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, 2008
Date of reporting period: September 30, 2008
Item 1. Reports to Stockholders.
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[TURNER FUNDS LOGO] ANNUAL REPORT
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September 30, 2008
U.S. growth equity funds
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Turner Concentrated Growth Fund
Turner Core Growth Fund
Turner Core Growth 130/30 Fund
Turner Emerging Growth Fund
Turner Large Cap Growth Fund
Turner Midcap Growth Fund
Turner New Enterprise Fund
Turner Small Cap Growth Fund
International growth equity funds
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Turner International Core Growth Fund
U.S. core equity funds
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Turner Midcap Equity Fund
Turner Quantitative Broad Market Equity Fund
Turner Small Cap Equity Fund
U.S. value equity funds
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Turner Quantitative Large Cap Value Fund
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CONTENTS
2 Letter to shareholders
6 Total returns of Turner Funds
9 Investment review:
Turner Concentrated Growth Fund
10 Investment review:
Turner Core Growth Fund
11 Investment review:
Turner Core Growth 130/30 Fund
12 Investment review:
Turner Emerging Growth Fund
13 Investment review:
Turner Large Cap Growth Fund
14 Investment review:
Turner Midcap Growth Fund
15 Investment review:
Turner New Enterprise Fund
16 Investment review:
Turner Small Cap Growth Fund
17 Investment review:
Turner International Core Growth Fund
18 Investment review:
Turner Midcap Equity Fund
19 Investment review:
Turner Quantitative Broad Market Equity Fund
20 Investment review:
Turner Small Cap Equity Fund
21 Investment review:
Turner Quantitative Large Cap Value Fund
22 Financial statements
66 Notes to financial statements
74 Report of independent registered public accounting firm
75 Notice to shareholders
76 Trustees and officers of the Trust
77 Disclosure of fund expenses
TURNER FUNDS
As of September 30, 2008, the Turner Funds offered a series of 13 mutual funds
to individual and institutional investors. The minimum initial investment for
Institutional Class Shares in a Turner Fund is $250,000 (except for $25,000 for
the Turner Quantitative Large Cap Value Fund) for regular accounts and $100,000
(with the exception of $10,000 for the Turner Quantitative 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 more than $22 billion in stock investments as of September 30,
2008. 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 Web site, www.turnerinvestments.com, or may write to Turner Funds,
P.O. Box 219805, Kansas City, Missouri 64121-9805.
TURNER FUNDS 2008 ANNUAL REPORT | 1
LETTER TO SHAREHOLDERS
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TO OUR SHAREHOLDERS
Like an avalanche triggered by a wayward skier, the stock market decline during
the 12-month period ended September 30, 2008, started small but quickly gained
terrifying downward momentum that buried many shares. The S&P 500 Index cascaded
into bear-market territory, losing 21.98%.
Meanwhile, the economy was similarly inundated. Incredibly, a relatively minor
percentage of homeowners unable to meet their subprime-mortgage obligations
morphed into nearly 2 million home foreclosures, billions of dollars of complex,
toxic mortgage securities that proved nearly impossible for financial
institutions to either value or unload, and the most severe contraction of
credit in modern times. In March the once-storied New York investment firm Bear
Stearns collapsed. (Little did anyone know that it would be the first of a
number of high-profile business failures.) The unemployment rate crept
uncomfortably higher, to 6.1%, and, alas, was widely expected to go higher still
in the months ahead. Financial titans Merrill Lynch, Washington Mutual, and
Wachovia found themselves starved for cash and ended up being acquired by
better-capitalized competitors. Mortgage giants Fannie Mae and Freddie Mac were
nationalized. The Treasury Department took over American International Group,
the world's largest insurance company. All of it culminated in a $700-billion
bailout package designed by the federal government to help stabilize a teetering
global financial system.
As the stock market and the financial system tried frantically to evade the
avalanche, the news turned more surreal by the day. In September, for instance,
investors fled money-market funds, the traditional safe haven of the
ultra-cautious, and sought refuge in Treasury bonds instead. At one point the
yield on one-year Treasury bills fell to almost zero; in essence investors were
willing to accept almost no interest payment in the hope that they would at
worst minimize any potential loss of their money. As THE WALL STREET JOURNAL
observed, investors were unsettled by "a double-dose of market whiplash and
extreme risk aversion, wondering, 'How bad can it get?'"
NOT FOR THE FAINT OF HEART
The only plausible response seemed to be, "plenty bad." The Dow Jones Wilshire
5000 Index, which includes almost all U.S. stocks, lost $7.2 trillion in value
over the past 12 months. And a key measure of market volatility, the Chicago
Board Options Exchange Volatility Index (often referred to as the "fear gauge")
reached highs not seen since the 9/11 terrorist attacks and the end of the bear
market in 2002. Whatever else you can say about it, this market was certainly
not for the faint of heart.
In the period, the growth style of investing outperformed value investing --
that is to say, growth did less bad. The broad-based Russell 3000 Growth Index
lost 20.60%, while the Russell 3000 Value Index fell 22.70%. In terms of market
capitalizations, small-cap stocks, as represented by the Russell 2000 Index,
lost the least, falling 14.48%. And regarding stock-market sectors, all 10
sectors of the Russell 3000 Index recorded negative returns, ranging from
consumer staples' 5% loss to (no surprise here) financial services' 37% decline.
Also worth noting: in the last three months of the period, sector leadership
decidedly shifted. In the broad-based Russell 3000 Index, energy, the top
performing sector for most of 2008, fell 37% in response to the decline in oil
prices resulting from a slowing global economy. And the financial-services
sector, which had been battered earlier in the year, rebounded, gaining 2%.
OUR FUNDS' RESULTS: NEGATIVE
Finally, as panic became the prevailing investor sentiment, value investing
returned to favor late in the period because cheaper value stocks were perceived
as less risky. The perception was that if the prices of value stocks were going
to fall, at least they would fall less than those of more richly priced growth
stocks. And stocks with good earnings fundamentals -- stocks that are our growth
funds' forte -- were punished. As a result, all nine of our growth funds -- as
well as our two core funds and two quantitative funds -- registered negative
returns for the 12-month period.
Clearly, it's safe to say that not only was this a market inhospitable to the
faint of heart but to our growth funds as well. Historically our growth funds
have generated the best results in a rising market that rewards corporate
earnings leaders. In a bear market, when price/earnings ratios shrink and
earnings growth is questioned, our growth funds have tended to underperform. The
one exception in this period was the Turner Emerging Growth Fund, which
outperformed its benchmark.
The Turner Small Cap Equity Fund and the Turner Midcap Equity Fund, our two core
funds that invest in both growth and value stocks, also struggled in the period,
mostly due to a heavier weighting in underperforming growth stocks than before
and our failure to adapt to the changing fortunes of certain market sectors. The
Small Cap Equity Fund had been underweighted in the financial-services sector
(which had generally HELPED performance in most of the period). But when
financial services did well later on, that underweighting hurt the fund's
results, as did our lack of exposure to regional and savings banks, which were
the sector's best performers. And the Midcap Equity
2 | TURNER FUNDS 2008 ANNUAL REPORT
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September 30, 2008
Fund would have performed better if it would have had less exposure to energy
and commodity stocks after the commodity bubble burst last summer.
QUANT FUND: A SILVER LINING
About the only other silver lining in this performance cloud was provided by one
of our quantitative funds, the Turner Quantitative Large Cap Value Fund, which
beat its benchmark handily. As we see it, the fund's outperformance is yet
another validation of the effectiveness of our proprietary model, which chooses
stocks for our quantitative funds (and which has been instrumental in helping
our growth funds achieve admirable long-term investment records as well). Our
model employs an optimization tool designed to properly diversify our
quantitative funds -- that is, they include a diverse mix of stocks that perform
differently from each other in a given market environment, so as to reduce
volatility. Indeed, our analysis shows that the model helped to damp the
volatility of the Quantitative Large Cap Value Fund during the period.
Here are the returns for each of our funds and their benchmarks in 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.)
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TOTAL RETURNS
12-month period ended September 30, 2008
TURNER CONCENTRATED GROWTH
FUND (TTOPX) (37.25)%
S&P 500 Index+ (21.98)
Russell 1000 Growth Index (20.88)
TURNER CORE GROWTH FUND,
INSTITUTIONAL CLASS (TTMEX) (27.53)
Russell 1000 Growth Index (20.88)
TURNER CORE GROWTH 130/30 FUND,
INSTITUTIONAL CLASS (TCGOX) (16.50)*
S&P 500 Index (7.59)*
Russell 1000 Growth Index (10.63)*
TURNER EMERGING GROWTH FUND (TMCGX) (16.08)
Russell 2000 Growth Index (17.07)
TURNER LARGE CAP GROWTH FUND,
INSTITUTIONAL CLASS (TSGEX) (32.16)
Russell Top 200 Growth Index (19.33)
Russell 1000 Growth Index (20.88)
TURNER MIDCAP GROWTH FUND,
INVESTOR CLASS (TMGFX) (26.69)
Russell Midcap Growth Index (24.65)
TURNER NEW ENTERPRISE FUND (TBTBX) (35.78)
NASDAQ Composite Index (21.92)
TURNER SMALL CAP GROWTH FUND (TSCEX) (19.80)
Russell 2000 Growth Index (17.07)
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TURNER INTERNATIONAL
CORE GROWTH FUND (TICGX) (31.04)%
Russell Global Growth ex-U.S. Index (32.37)
MSCI World Growth ex-U.S. Index (27.70)
TURNER MIDCAP EQUITY FUND,
INVESTOR CLASS (TMCFX) (26.48)
Russell Midcap Index (22.36)
TURNER QUANTITATIVE BROAD MARKET
EQUITY FUND, INSTITUTIONAL CLASS (TBMEX) (12.70)*
Russell 3000 Index (8.73)*
S&P 500 Index (8.37)*
TURNER SMALL CAP EQUITY FUND (TSEIX) (20.20)
Russell 2000 Index (14.48)
TURNER QUANTITATIVE LARGE CAP
VALUE FUND (TLVFX, FORMERLY
TURNER LARGE CAP VALUE FUND) (18.76)
Russell 1000 Value Index (23.56)
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+ Effective September 30, 2009, we intend to eliminate this benchmark for
the Turner Concentrated Growth Fund, based on our view that the Russell
1000 Growth Index is more appropriate.
* The return is for the period from the fund's inception to September 30,
2008. The Turner Core Growth 130/30 Fund was introduced on July 31, 2008;
the Turner Quantitative Broad Market Equity Fund, on June 30, 2008.
Returns of less than one year are cumulative, and not annualized.
For more details on the performance of each fund during the 12-month period, see
the INVESTMENT REVIEW beginning on page 9.
"SPEAK COMFORT TO ME, JACOB"
In the Charles Dickens classic A CHRISTMAS CAROL, Ebenezer Scrooge, upon
learning of the misery awaiting him in the afterlife, pleads with the ghost of
Jacob Marley, "Speak comfort to me, Jacob." But unlike the apparition of
Scrooge's long-dead business partner, we DO have some possible comfort to give.
Although the financial crisis has caused economists to raise the odds of a
recession, we think the consequences may not be quite as grave as popularly
anticipated, due in part to the continuing extraordinary government efforts to
rescue the financial system. We concur with the projections of the ISI
economic-research group that the economy will grow modestly again in the second
quarter of 2009 after three quarters of decline. And historically, the stock
market has confounded the levels of extremely bearish sentiment that prevail
today and turned upward several months before the economy did. In fact, even in
the midst of three of the last four recessions, the S&P 500 Index posted
POSITIVE returns, according to the National Bureau of Economic Research. As we
see it, corporate profits may hit bottom early next year, and stocks could
trough before year's end.
TURNER FUNDS 2008 ANNUAL REPORT | 3
LETTER TO SHAREHOLDERS (continued)
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The current shape of the yield curve (a graph plotting Treasury interest rates
of all maturities) may also be a sign of more rewarding investment times ahead.
A steeply sloped yield curve, depicting a sizable gap between the interest rates
for two-year and 10-year notes, historically has been a harbinger of
above-average economic growth over the next 12 months. At the end of September,
the gap in the yield curve was in fact steep: nearly two percentage points.
CRISIS OUTCOMES FAIRLY SIMILAR
Whatever the particular circumstances of this current bear market and financial
crisis -- and they all tend to leave their own unique footprints on the path of
history -- we take comfort in the knowledge that the outcomes tend to be fairly
similar, as follows. The stock market ultimately declines so brutally that
investors engage in a "capitulation" -- a throw-in-the-towel, final-stage rash
of selling. The federal government responds appropriately and aggressively to
the crisis. Some vulnerable financial-services firms fail. And finally and
blissfully, the healing process begins. Stocks eventually reverse course and
economic statistics, which tend to lag real-world developments, eventually
improve. We think this financial crisis is following that course exactly.
What are we, as fund managers, doing about all this in the meantime? As always,
we're scrutinizing our stock selections to be sure they do offer superior return
potential and, most important, WE'RE STICKING TO OUR INVESTMENT DISCIPLINES. We
believe the ability of any investment manager to outperform the market in the
long run hinges on the consistent application of a proven investment process. Of
course, the greatest challenge in sticking to any investment discipline is to do
so when it's under the greatest assault, as has been true recently. You can be
assured we won't succumb to the temptation to change our growth, core, and
quantitative investment processes out of desperation to "cure" a spell of
negative results. Chances are, you've selected us as your fund manager for that
very reason, and we intend to be true to you . . . and to ourselves.
HOW OUR FUNDS ARE POSITIONED
For our growth funds, that means, as always, we're invested in stocks that we
believe have the strongest earnings prospects in preparation for any rebound by
the market. For our quantitative funds, we continue to employ our proprietary
quantitative model and hold the stocks that we believe have the best statistical
chance of outperforming the market. And our core funds, as usual, are focused on
owning stocks that we think have either undervalued assets or strong prospective
earnings power. In broad terms, we're currently favoring early-cycle stocks,
such as home-building, retailing, select financial-services, and semiconductor
shares, that tend to do well in periods of economic recovery. (Interestingly,
early-cycle stocks were among the best relative performers at the end of the
period.)
In conclusion, it's important to remember that better days and markets lie
ahead. No one can say precisely when the stock market will dig out from this
avalanche of a bear market, but one thing we CAN say is that the economy should
do well over time and the people who own a piece of it by owning stocks should
in turn do well over time.
And finally, it's important for US to remember that we are here to serve you.
Especially in these volatile and uncertain times, we thank you for entrusting us
with your money and for your continuing confidence and support. You can be
assured that we will continue to do our best to achieve performance that's as
good as we can possibly make it.
/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, 2008, AND ARE NOT
INTENDED AS A FORECAST OR INVESTMENT RECOMMENDATIONS. THE INDEXES MENTIONED ARE
NOT AVAILABLE FOR INVESTMENT.
[PHOTO OF BOB TURNER]
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4 | TURNER FUNDS 2008 ANNUAL REPORT
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September 30, 2008
LIPPER INC. PERFORMANCE RANKINGS OF MUTUAL FUNDS WITH AT LEAST THREE YEARS OF
HISTORY
Periods ending September 30, 2008
ONE TWO THREE FOUR FIVE SEVEN TEN
YEAR YEARS YEARS YEARS YEARS YEARS YEARS
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LARGE-CAP GROWTH FUNDS
TURNER CONCENTRATED
GROWTH FUND
Ranking versus competitors 758/769 677/714 571/652 296/589 482/538 235/438 --
Percentile ranking 99 95 88 50 90 54 --
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TURNER CORE GROWTH FUND,
INSTITUTIONAL CLASS SHARES
Ranking versus competitors 678/769 517/714 327/652 70/589 61/538 61/438 --
Percentile ranking 88 72 50 12 11 14 --
INVESTOR CLASS SHARES
Ranking versus competitors 689/769 547/714 372/652 -- -- -- --
Percentile Ranking 90 77 57 -- -- -- --
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TURNER LARGE CAP GROWTH FUND
INSTITUTIONAL CLASS SHARES
Ranking versus competitors 752/769 688/714 628/652 570/589 522/538 384/438 --
Percentile ranking 98 96 96 97 97 88 --
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MID-CAP GROWTH FUNDS
TURNER MIDCAP GROWTH FUND,
INVESTOR CLASS SHARES
Ranking versus competitors 354/611 290/572 258/525 161/463 211/421 114/338 32/192
Percentile ranking 58 51 49 35 50 34 17
RETIREMENT CLASS SHARES
Ranking versus competitors 361/611 303/572 287/525 187/463 243/421 150/338 --
Percentile ranking 59 53 55 40 58 44 --
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SCIENCE AND TECHNOLOGY FUNDS
TURNER NEW ENTERPRISE FUND
Ranking versus competitors 142/160 79/149 61/141 27/136 32/129 7/112 --
Percentile Ranking 89 53 43 20 25 6 --
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SMALL-CAP CORE FUNDS
TURNER SMALL CAP EQUITY FUND
Ranking versus competitors 530/796 521/719 494/633 462/553 368/493 -- --
Percentile ranking 67 72 78 84 75 -- --
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SMALL-CAP GROWTH FUNDS
TURNER EMERGING GROWTH FUND
Ranking versus competitors 48/597 42/545 47/494 20/439 1/399 3/322 1/195
Percentile ranking 8 8 10 5 0 1 1
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TURNER SMALL CAP GROWTH FUND
Ranking versus competitors 145/597 96/545 76/494 100/439 91/399 60/322 68/195
Percentile ranking 24 18 15 23 23 19 35
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Source: Lipper Inc.
Total return is ranking criteria. Past performance is no guarantee of future
results.
TURNER FUNDS 2008 ANNUAL REPORT | 5
PERFORMANCE
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TOTAL RETURNS OF TURNER FUNDS
Through September 30, 2008
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED.
PLEASE CALL 1.800.224.6312 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,
PENNSYLVANIA 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 1.800.224.6312. 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 (23.68)% (40.15)% (37.25)% (3.65)% 0.97% N/A (1.05)% $ 42.58
S&P 500 Index (10.87) (19.29) (21.98) 0.22 5.17 n/a (0.09)
Russell 1000 Growth Index (11.23) (20.27) (20.88) 0.04 3.74 n/a (2.95)
INCEPTION DATE: 6/30/99
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TURNER CORE GROWTH FUND --
INSTITUTIONAL CLASS SHARES (17.18) (30.41) (27.53) (1.33) 5.49 N/A 0.65 360.08
INVESTOR CLASS SHARES(1) (17.35) (30.56) (27.76) (1.64) N/A N/A (0.53) 260.69
Russell 1000 Growth Index (11.23) (20.27) (20.88) 0.04 3.74 n/a (1.19)
INCEPTION DATE: 2/28/01
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TURNER CORE GROWTH
130/30 FUND --
INSTITUTIONAL CLASS SHARES N/A N/A N/A N/A N/A N/A (16.50)* 0.77
INVESTOR CLASS SHARES N/A N/A N/A N/A N/A N/A (16.40)* --
S&P 500 Index n/a n/a n/a n/a n/a n/a (7.59)*
Russell 1000 Growth Index n/a n/a n/a n/a n/a n/a (10.63)*
INCEPTION DATE: 7/31/08
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TURNER EMERGING
GROWTH FUND(5) (5.50) (17.86) (16.08) 3.27 11.72 24.23 22.61 529.58
Russell 2000 Growth Index (2.83) (15.29) (17.07) 1.46 6.64 4.67 1.77
INCEPTION DATE: 2/27/98
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TURNER LARGE CAP GROWTH FUND --
INSTITUTIONAL CLASS SHARES (19.90) (32.80) (32.16) (5.10) 0.05 N/A (8.86) 28.98
INVESTOR CLASS SHARES(2) (19.96) (32.89) (32.40) N/A N/A N/A (14.31) 0.66
Russell Top 200 Growth Index (10.25) (19.07) (19.33) 0.43 2.95 n/a (6.44)
Russell 1000 Growth Index (11.23) (20.27) (20.88) 0.04 3.74 n/a (5.64)
INCEPTION DATE: 6/14/00
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6 | TURNER FUNDS 2008 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 GROWTH FUND(5) --
INSTITUTIONAL CLASS SHARES(3) N/A N/A N/A N/A N/A N/A (24.43)%* $ 137.45
INVESTOR CLASS SHARES (17.02)% (27.98)% (26.69)% (0.27)% 6.03% 8.40% 10.36 994.54
RETIREMENT CLASS SHARES(4) (17.16) (28.13) (26.89) (0.63) 5.58 N/A 5.63 5.78
Russell Midcap Growth Index (13.93) (23.35) (24.65) (0.75) 6.53 5.51 6.02
INCEPTION DATE: 10/1/96
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TURNER NEW ENTERPRISE FUND(5) (21.79) (36.65) (35.78) (1.50) 5.23 N/A (6.79) 32.76
NASDAQ Composite Index (7.84) (20.63) (21.92) (0.14) 3.94 n/a (6.92)
INCEPTION DATE: 6/30/00
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TURNER SMALL CAP
GROWTH FUND(5) (5.80) (19.53) (19.80) 2.34 6.98 7.74 11.65 249.43
Russell 2000 Growth Index (2.83) (15.29) (17.07) 1.46 6.64 4.67 5.08
INCEPTION DATE: 2/7/94
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TURNER INTERNATIONAL
CORE GROWTH FUND (26.46) (34.43) (31.04) N/A N/A N/A (9.80) 3.33
Russell Global Growth ex-U.S. Index (25.66) (32.88) (32.37) n/a n/a n/a (10.98)
MSCI World Growth ex-U.S. Index (21.59) (27.74) (27.70) n/a n/a n/a (9.53)
INCEPTION DATE: 1/31/07
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TURNER MIDCAP EQUITY FUND --
INSTITUTIONAL CLASS SHARES (14.15) (24.64) (26.12) N/A N/A N/A (13.25) 0.08
INVESTOR CLASS SHARES (14.29) (24.78) (26.48) N/A N/A N/A (13.85) 0.43
Russell Midcap Index (10.58) (19.50) (22.36) n/a n/a n/a (11.09)
INCEPTION DATE: 1/31/07
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TURNER QUANTITATIVE BROAD
MARKET EQUITY FUND --
INSTITUTIONAL CLASS SHARES N/A N/A N/A N/A N/A N/A (12.70)* 0.54
INVESTOR CLASS SHARES N/A N/A N/A N/A N/A N/A (12.80)* --
Russell 3000 Index n/a n/a n/a n/a n/a n/a (8.73)*
S&P 500 Index n/a n/a n/a n/a n/a n/a (8.37)*
INCEPTION DATE: 6/30/08
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TURNER SMALL CAP
EQUITY FUND(5) -- (7.24) (17.70) (20.20) (2.51) 5.93 N/A 7.79 24.21
Russell 2000 Index (0.54) (10.38) (14.48) 1.83 8.15 n/a 6.48
INCEPTION DATE: 3/4/02
- ----------------------------------------------------------------------------------------------------------------------------------
TURNER QUANTITATIVE
LARGE CAP VALUE FUND (10.75) (18.23) (18.76) N/A N/A N/A 2.69 0.76
Russell 1000 Value Index (11.10) (18.85) (23.56) n/a n/a n/a 1.42
INCEPTION DATE: 10/10/05
- ----------------------------------------------------------------------------------------------------------------------------------
(1) Commenced operations on August 1, 2005.
(2) Commenced operations on January 31, 2007.
(3) Commenced operations on June 16, 2008.
(4) Commenced operations on September 24, 2001.
(5) 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 not annualized.
TURNER FUNDS 2008 ANNUAL REPORT | 7
PERFORMANCE (continued)
- --------------------------------------------------------------------------------
EXPENSE RATIO+
- --------------------------------------------------------------------------------
Gross Net
expense expense
ratio ratio
- --------------------------------------------------------------------------------
TURNER CONCENTRATED
GROWTH FUND
Investor Class Shares 1.45% 1.11%
TURNER CORE GROWTH FUND
Institutional Class Shares 1.07% 0.69%
Investor Class Shares 1.32% 0.94%
TURNER CORE GROWTH 130/30 FUND
Institutional Class Shares 5.84% 1.10%
Investor Class Shares 6.09% 1.35%
TURNER EMERGING GROWTH FUND
Investor Class Shares 1.55% 1.40%
TURNER LARGE CAP GROWTH FUND
Institutional Class Shares 1.24% 0.69%
Investor Class Shares 1.49% 0.94%
TURNER MIDCAP GROWTH FUND
Institutional Class Shares 1.00% 0.93%
Investor Class Shares 1.25% 1.18%
Retirement Class Shares 1.50% 1.43%
TURNER NEW ENTERPRISE FUND
Investor Class Shares 1.69% 1.27%
- --------------------------------------------------------------------------------
Gross Net
expense expense
ratio ratio
- --------------------------------------------------------------------------------
TURNER SMALL CAP GROWTH FUND
Investor Class Shares 1.49% 1.25%
TURNER INTERNATIONAL CORE
GROWTH FUND
Institutional Class Shares 4.65% 1.10%
TURNER MIDCAP EQUITY FUND
Institutional Class Shares 31.28% 0.90%
Investor Class Shares 22.29% 1.15%
TURNER QUANTITATIVE BROAD
MARKET EQUITY FUND
Institutional Class Shares 5.45% 0.64%
Investor Class Shares 5.70% 0.89%
TURNER SMALL CAP EQUITY FUND
Investor Class Shares 1.60% 1.45%
TURNER QUANTITATIVE LARGE CAP
VALUE FUND
Institutional Class Shares 5.28% 0.69%
- --------------------------------------------------------------------------------
+ These expense ratios are based on the most recent prospectus and may
differ from those shown in the financial highlights.
8 | TURNER FUNDS 2008 ANNUAL REPORT
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER CONCENTRATED GROWTH FUND
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2008
[DIAGRAM]
o Ticker symbol TTOPX
MARKET
o CUSIP #87252R862 CAPITALIZATION INVESTMENT STYLE
VALUE GROWTH
o Top five holdings+++ LARGE [ ] [ ] [X]
[ ] [ ] [ ]
(1) Google, Cl A SMALL [ ] [ ] [ ]
(2) Monsanto
(3) Charles Schwab
(4) Staples
(5) Marsh & McLennan
o % in five largest holdings 25.7%+
o Number of holdings 26
o Price/earnings ratio 18.6
o Weighted average market capitalization $38.60 billion
o % of holdings with positive earnings surprises 78.5%
o % of holdings with negative earnings surprises 21.5%
o Net assets $43 million
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE TURNER CONCENTRATED GROWTH FUND:
JUNE 30, 1999-SEPTEMBER 30, 2008*
[LINE GRAPH]
6/30/99 SEP 99 SEP 00 SEP 01 SEP 02 SEP 03 SEP 04 SEP 05 SEP 06 SEP 07 SEP 08
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Turner Concentrated Growth Fund $10,000 $13,990 $27,782 $8,225 $5,754 $8,639 $8,310 $10,138 $10,852 $14,450 $9,067
S&P 500 Index $10,000 $ 9,376 $10,621 $7,794 $6,197 $7,709 $8,778 $ 9,853 $10,916 $12,711 $9,918
Russell 1000 Growth Index $10,000 $ 9,634 $11,891 $6,464 $5,009 $6,307 $6,781 $ 7,567 $ 8,024 $ 9,577 $7,577
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDING SEPTEMBER 30, 2008)
ONE THREE FIVE SINCE
YEAR YEARS YEARS INCEPTION
- --------------------------------------------------------------------------------
TURNER CONCENTRATED GROWTH FUND (37.25)% (3.65)% 0.97% (1.05)%
S&P 500 Index (21.98)% 0.22% 5.17% (0.09)%
Russell 1000 Growth Index (20.88)% 0.04% 3.74% (2.95)%
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS+:
[BAR CHART]
Information technology 36.2%
Consumer discretionary 17.6%
Health care 15.8%
Financials 13.9%
Industrials 7.5%
Materials 5.5%
Cash equivalents/short-term investments++ 3.5%
MANAGER'S DISCUSSION AND ANALYSIS
The Turner Concentrated Growth Fund (TTOPX) contains a select few stocks that
Turner thinks have the strongest expected earnings power. In general, however,
those kinds of stocks, many of them in the middle of the capitalization
spectrum, didn't perform at all well in the 12-month period ended September 30,
2008, slower-growing, cheaper value stocks by and large did better. As a result,
the fund lost 37.25%, underperforming the Russell 1000 Growth Index by 16.37
percentage points.
Hurting the fund's performance the most was a 54% position in
information-technology and consumer-discretionary stocks. Semiconductor,
wireless-communications, data-networking, Internet, gaming, and retailing stocks
produced sizable losses. On the plus side, three of the fund's six sector
positions beat their corresponding index sectors. Materials holdings, a 6%
weighting, contributed the most extra return, due largely to mining and metals
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 Concentrated Growth Fund was June 30, 1999.
+ 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 the top five holdings, but are counted in the number of
holdings.
TURNER FUNDS 2008 ANNUAL REPORT | 9
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER CORE GROWTH FUND
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2008
[DIAGRAM]
o Ticker symbol TTMEX
Institutional Class Shares MARKET
CAPITALIZATION INVESTMENT STYLE
o CUSIP #900297847 VALUE GROWTH
Institutional Class Shares LARGE [ ] [ ] [X]
[ ] [ ] [ ]
o Top five holdings+++ SMALL [ ] [ ] [ ]
(1) Google, Cl A
(2) Schlumberger
(3) Apple
(4) QUALCOMM
(5) PepsiCo
o % in five largest holdings 13.9%+
o Number of holdings 76
o Price/earnings ratio 15.3
o Weighted average market capitalization $40.90 billion
o % of holdings with positive earnings surprises 73.7%
o % of holdings with negative earnings surprises 24.8%
o Net assets $360 million, Institutional Class Shares
- --------------------------------------------------------------------------------
GROWTH OF A $250,000 INVESTMENT IN THE TURNER CORE GROWTH FUND, INSTITUTIONAL
CLASS SHARES:
FEBRUARY 28, 2001-SEPTEMBER 30, 2008*,**
[LINE GRAPH]
2/28/01 SEP 01 SEP 02 SEP 03 SEP 04 SEP 05 SEP 06 SEP 07 SEP 08
------- ------ ------ ------ ------ -------- -------- -------- --------
Turner Core Growth Fund,
Institutional Class Shares $250,000 $204,500 $157,250 $201,000 $221,000 $273,250 $292,120 $362,237 $262,513
Russell 1000 Growth Index $250,000 $194,665 $150,849 $189,943 $204,205 $227,885 $241,639 $288,405 $228,192
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDING SEPTEMBER 30, 2008)
ONE THREE FIVE SINCE
YEAR YEARS YEARS INCEPTION
- -------------------------------------------------------------------------------------------
TURNER CORE GROWTH FUND, INSTITUTIONAL CLASS SHARES (27.53)% (1.33)% 5.49% 0.65%**
TURNER CORE GROWTH FUND, INVESTOR CLASS SHARES (27.76)% (1.64)% -- (0.53)%***
Russell 1000 Growth Index (20.88)% 0.04% 3.74% (1.19)%**
- -------------------------------------------------------------------------------------------
SECTOR WEIGHTINGS+:
[BAR CHART]
Information technology 21.9%
Financials 14.9%
Health care 12.8%
Industrials 10.6%
Consumer discretionary 10.5%
Energy 9.9%
Consumer staples 9.2%
Cash equivalents/short-term investments++ 4.7%
Materials 2.5%
Telecommunication services 2.1%
Utilities 0.9%
MANAGER'S DISCUSSION AND ANALYSIS
The traditional emphasis of the Turner Core Growth Fund, Institutional Class
(TTMEX) on large- and mid-cap growth stocks proved counterproductive in the
12-month period ended September 30, 2008. Growth-oriented holdings in those
capitalization segments led to a loss of 27.53% for the fund, which trailed the
Russell 1000 Growth Index by 6.65 percentage points.
Detracting the most from results were information-technology and
consumer-discretionary shares, which accounted for 32% of the portfolio;
semiconductor, wireless-communications, data-networking, Internet, and gaming
holdings performed especially poorly. Three of the fund's 10 sector positions --
in financials, energy, and materials, a 27% weighting -- outperformed their
corresponding sectors; brokerage, investment-management, energy-services,
metals, and mining stocks produced good relative returns in those sectors.
- --------------------------------------------------------------------------------
* 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 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 the top five holdings, but are counted in the number of
holdings.
Amounts designated as "--" are not applicable.
10 | TURNER FUNDS 2008 ANNUAL REPORT
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER CORE GROWTH 130/30 FUND
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2008
[DIAGRAM]
o Ticker symbol TCGOX
Institutional Class Shares MARKET
CAPITALIZATION INVESTMENT STYLE
o CUSIP #900297755 VALUE GROWTH
Institutional Class Shares LARGE [ ] [ ] [X]
[ ] [ ] [ ]
o Top five holdings++ SMALL [ ] [ ] [ ]
(1) Google, Cl A
(2) Schlumberger
(3) Intel
(4) Apple
(5) Gilead Sciences
o % in five largest holdings 15.0%+
o Number of holdings 109
o Price/earnings ratio 15.5
o Weighted average market capitalization $41.28 billion
o % of holdings with positive earnings surprises 73.7%
o % of holdings with negative earnings surprises 24.7%
o Net assets $0.8 million, Institutional Class Shares
- --------------------------------------------------------------------------------
GROWTH OF A $250,000 INVESTMENT IN THE TURNER CORE GROWTH 130/30 FUND,
INSTITUTIONAL CLASS SHARES:
JULY 31, 2008-SEPTEMBER 30, 2008*
[LINE GRAPH]
7/31/08 AUG 08 SEP 08
-------- -------- --------
Turner Core Growth 130/30 Fund,
Institutional Class Shares $250,000 $245,500 $208,750
Russell 1000 Growth Index $250,000 $252,692 $223,430
S&P 500 Index $250,000 $253,616 $231,017
- --------------------------------------------------------------------------------
CUMULATIVE TOTAL RETURNS (PERIOD ENDING SEPTEMBER 30, 2008)
SINCE
INCEPTION
- --------------------------------------------------------------------------------
TURNER CORE GROWTH 130/30 FUND, INSTITUTIONAL CLASS SHARES (16.50)%**
TURNER CORE GROWTH 130/30 FUND, INVESTOR CLASS SHARES (16.40)%**
S&P 500 Index (7.59)%**
Russell 1000 Growth Index (10.63)%**
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS+:
[BAR CHART]
Information technology 22.8%
Financials 15.3%
Health care 13.4%
Energy 10.5%
Consumer staples 9.7%
Industrials 9.6%
Consumer discretionary 9.4%
Cash equivalents 3.6%
Materials 2.0%
Telecommunication services 2.0%
Utilities 1.7%
MANAGER'S DISCUSSION AND ANALYSIS
In its first two months of operation, the Turner Core Growth 130/30 Fund,
Institutional Class (TCGOX) produced a 16.50% loss to underperform the Russell
1000 Growth Index by 5.87 percentage points.
The fund, which holds both long and short positions in an effort to capitalize
on rising and falling stock prices, produced its best relative returns in
financials shares, which represented 15% of the portfolio; they were the only
sector holdings to beat their counterparts in the index sectors. Financial-data,
investment-services, regional-bank, and real-estate shares performed best.
Hurting performance the most were losses in the information-technology and
consumer-discretionary sectors, which constituted 32% of the fund.
Semiconductor, consumer-electronics, discount-retailing, and department-store
stocks produced significant losses in those sectors.
- --------------------------------------------------------------------------------
* 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 redemption of fund shares. Performance of the
Institutional and Investor Class Shares will differ due to the difference
in fees. The inception date of the Turner Core Growth 130/30 Fund was July
31, 2008.
** Cumulative return, not annualized.
+ Percentages based on total investments.
++ Cash equivalents and short-term investments are not being considered a
holding for the top five holdings, but are counted in the number of
holdings.
TURNER FUNDS 2008 ANNUAL REPORT | 11
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER EMERGING GROWTH FUND
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2008
[DIAGRAM]
o Ticker symbol TMCGX
MARKET
o CUSIP #872524301 CAPITALIZATION INVESTMENT STYLE
VALUE GROWTH
o Top five holdings+++ LARGE [ ] [ ] [ ]
[ ] [ ] [ ]
(1) Deckers Outdoor SMALL [ ] [ ] [X]
(2) Bucyrus International, Cl A
(3) Parexel International
(4) iShares Russell 2000
Index Fund
(5) Icon ADR
o % in five largest holdings 14.0%+
o Number of holdings 90
o Price/earnings ratio 14.2
o Weighted average market capitalization $1.15 billion
o % of holdings with positive earnings surprises 81.0%
o % of holdings with negative earnings surprises 18.4%
o Net assets $530 million
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE TURNER EMERGING GROWTH FUND:
FEBRUARY 27, 1998-SEPTEMBER 30, 2008*
[LINE GRAPH]
9/30/98 SEP 99 SEP 00 SEP 01 SEP 02 SEP 03 SEP 04 SEP 05 SEP 06 SEP 07 SEP 08
------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Turner Emerging Growth Fund $10,000 $21,346 $48,887 $38,995 $38,947 $50,300 $62,143 $79,483 $83,421 $104,327 $87,549
Russell 2000 Growth Index $10,000 $13,263 $17,197 $ 9,873 $ 8,080 $11,452 $12,817 $15,120 $16,009 $ 19,041 $15,790
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDING SEPTEMBER 30, 2008)
ONE THREE FIVE TEN SINCE
YEAR YEARS YEARS YEARS INCEPTION
- --------------------------------------------------------------------------------
TURNER EMERGING GROWTH FUND (16.08)% 3.27% 11.72% 24.23% 22.61%
Russell 2000 Growth Index (17.07)% 1.46% 6.64% 4.67% 1.77%
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS+:
[BAR CHART]
Cash equivalents/short-term investments++ 25.6%
Industrials 20.2%
Health care 15.3%
Energy 11.4%
Consumer discretionary 10.5%
Information technology 7.0%
Financials 6.7%
Consumer staples 1.9%
Telecommunication services 0.6%
Materials 0.6%
Utilities 0.2%
MANAGER'S DISCUSSION AND ANALYSIS
In the 12-month period ended September 30, 2008, the Turner Emerging Growth Fund
(TMCGX) lost 16.08%. That was a good relative return under the circumstances:
the fund outpaced its benchmark, the Russell 2000 Growth Index, by 0.99
percentage points.
Four of the fund's 10 sector positions were responsible for that outperformance:
consumer discretionary, financials, industrials, and consumer staples, a 39%
weighting. Apparel, diversified-financial, railroad, and specialty-food shares
were relatively strong performers. Materials, health-care, and
information-technology stocks, a 23% weighting, were the primary detractors from
performance. Laggards included metals, biopharmaceutical, contract-research, and
information-services 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 the top five holdings, but are counted in the number of
holdings.
12 | TURNER FUNDS 2008 ANNUAL REPORT
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER LARGE CAP GROWTH FUND
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2008
[DIAGRAM]
o Ticker symbol TSGEX
Institutional Class Shares MARKET
CAPITALIZATION INVESTMENT STYLE
o CUSIP #87252R839 VALUE GROWTH
Institutional Class Shares LARGE [ ] [ ] [X]
[ ] [ ] [ ]
o Top five holdings+++ SMALL [ ] [ ] [ ]
(1) Google, Cl A
(2) QUALCOMM
(3) PepsiCo
(4) Apple
(5) Intel
o % in five largest holdings 22.1%+
o Number of holdings 51
o Price/earnings ratio 14.9
o Weighted average market capitalization $51.59 billion
o % of holdings with positive earnings surprises 73.9%
o % of holdings with negative earnings surprises 24.2%
o Net assets $29 million, Institutional Class Shares
- --------------------------------------------------------------------------------
GROWTH OF A $250,000 INVESTMENT IN THE TURNER LARGE CAP GROWTH FUND,
INSTITUTIONAL CLASS SHARES:
JUNE 14, 2000-SEPTEMBER 30, 2008*,**
[LINE GRAPH]
6/14/00 SEP 00 SEP 01 SEP 02 SEP 03 SEP 04 SEP 05 SEP 06 SEP 07 SEP 08
------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Turner Large Cap Growth Fund
Institutional Class Shares $250,000 $245,250 $117,500 $ 87,500 $115,506 $120,869 $135,488 $140,090 $170,712 $115,806
Russell Top 200 Growth Index $250,000 $238,621 $132,933 $101,303 $124,421 $131,799 $142,057 $150,294 $178,362 $143,886
Russell 1000 Growth Index $250,000 $242,279 $131,705 $102,060 $128,510 $138,159 $154,180 $163,486 $195,126 $154,388
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDING SEPTEMBER 30, 2008)
ONE THREE FIVE SINCE
YEAR YEARS YEARS INCEPTION
- ----------------------------------------------------------------------------------------------------
TURNER LARGE CAP GROWTH FUND, INSTITUTIONAL CLASS SHARES (32.16)% (5.10)% 0.05% (8.86)%**
TURNER LARGE CAP GROWTH FUND, INVESTOR CLASS SHARES (32.40)% -- -- (14.31)%***
Russell Top 200 Growth Index (19.33)% 0.43% 2.95% (6.44)%**
Russell 1000 Growth Index (20.88)% 0.04% 3.74% (5.64)%**
- ----------------------------------------------------------------------------------------------------
SECTOR WEIGHTINGS+:
[BAR CHART]
Information technology 37.3%
Health care 14.0%
Consumer staples 13.5%
Energy 8.5%
Industrials 7.5%
Consumer discretionary 7.3%
Financials 5.8%
Materials 3.0%
Cash equivalents/short-term investments++ 2.4%
Telecommunication services 0.7%
MANAGER'S DISCUSSION AND ANALYSIS
Substantial underperformance by holdings in two major sectors -- information
technology and consumer discretionary -- dampened the performance of the Turner
Large Cap Growth Fund, Institutional Class (TSGEX) in the 12-month period ended
September 30, 2008. The fund lost 32.16%, lagging the Russell Top 200 Growth
Index by 12.83 percentage points.
Those two sectors accounted for 45% of the fund's investments, with
semiconductor, wireless-communications, data-networking, Internet, and gaming
stocks detracting notably from results. Four of the fund's nine sector positions
beat their corresponding index sectors: financials, materials, health care, and
energy, which represented 31% of the portfolio. Relatively good performers in
those sectors included insurance, investment-management, brokerage,
agricultural-products, paper, pharmaceutical, medical-device, and
energy-services 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. 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.
+ 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 the top five
holdings, but are counted in the number of holdings.
Amounts designated as "--" are not applicable.
TURNER FUNDS 2008 ANNUAL REPORT | 13
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER MIDCAP GROWTH FUND
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2008
[DIAGRAM]
o Ticker symbol TMGFX,
Investor Class Shares MARKET
CAPITALIZATION INVESTMENT STYLE
o CUSIP #900297409, VALUE GROWTH
Investor Class Shares LARGE [ ] [ ] [ ]
[ ] [ ] [X]
o Top five holdings+++ SMALL [ ] [ ] [ ]
(1) Express Scripts
(2) McAfee
(3) Kohl's
(4) T. Rowe Price Group
(5) FTI Consulting
o % in five largest holdings 9.4%+
o Number of holdings 95
o Price/earnings ratio 16.5
o Weighted average market capitalization $7.03 billion
o % of holdings with positive earnings surprises 78.0%
o % of holdings with negative earnings surprises 20.7%
o Net assets $995 million, Investor Class Shares
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE TURNER MIDCAP GROWTH FUND, INVESTOR CLASS
SHARES:
SEPTEMBER 30, 1998-SEPTEMBER 30, 2008*,***
[LINE GRAPH]
9/30/98 SEP 99 SEP 00 SEP 01 SEP 02 SEP 03 SEP 04 SEP 05 SEP 06 SEP 07 SEP 08
------- ------ ------ ------ ------ ------ ------ ------ ------ ------ -------
Turner Midcap Growth Fund
Investor Class Shares $10,000 $18,407 $36,325 $14,895 $11,796 $16,727 $17,968 $22,591 $23,652 $30,569 $22,411
Russell Midcap Growth Index $10,000 $13,719 $22,002 $10,612 $ 8,967 $12,455 $14,158 $17,482 $18,712 $22,683 $17,091
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDING SEPTEMBER 30, 2008)
ONE THREE FIVE TEN SINCE
YEAR YEARS YEARS YEARS INCEPTION
- ------------------------------------------------------------------------------------------------------------
TURNER MIDCAP GROWTH FUND, INSTITUTIONAL CLASS SHARES -- -- -- -- (24.43)%**
TURNER MIDCAP GROWTH FUND, INVESTOR CLASS SHARES (26.69)% (0.27)% 6.03% 8.40% 10.36%***
TURNER MIDCAP GROWTH FUND, RETIREMENT CLASS SHARES (26.89)% (0.63)% 5.58% -- 5.63%****
Russell Midcap Growth Index (24.65)% (0.75)% 6.53% 5.51% 6.02%***
- ------------------------------------------------------------------------------------------------------------
SECTOR WEIGHTINGS+:
[BAR CHART]
Information technology 20.2%
Consumer discretionary 17.3%
Industrials 15.3%
Health care 12.0%
Energy 9.2%
Cash equivalents/short-term investments++ 7.8%
Financials 7.6%
Materials 4.2%
Consumer staples 3.8%
Utilities 1.6%
Telecommunication services 1.0%
MANAGER'S DISCUSSION AND ANALYSIS
In the 12-month period ended September 30, 2008, the Turner Midcap Growth Fund,
Investor Class (TMGFX) lost 26.69%, a result that represented a margin of
underperformance to the Russell Midcap Growth Index of 2.04 percentage points.
The fund's performance was most impaired by an unfavorable relative return in
the information-technology sector, a 20% weighting, and the weak showing of
mid-cap growth stocks as an asset class. The fund's semiconductor,
wireless-communications, and data-networking stocks were key detractors. What's
more, mid-cap growth stocks in aggregate lagged their small- and large-cap
counterparts by more than three percentage points. Four of the fund's 10 sector
positions trumped their corresponding index sectors, with energy, a 9%
weighting, contributing the greatest degree of outperformance. In the energy
sector, oil-services and solar-power stocks were relatively good 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
Institutional, Investor and Retirement Class Shares will differ due to
differences in fees.
** The inception date of the Turner Midcap Growth Fund (Institutional Class
Shares) was June 16, 2008. Cumulative return, not annualized.
*** 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 the top five holdings, but are counted in the number of
holdings.
Amounts designated as "--" are not applicable.
14 | TURNER FUNDS 2008 ANNUAL REPORT
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER NEW ENTERPRISE FUND
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2008
[DIAGRAM]
o Ticker symbol TBTBX
MARKET
o CUSIP #87252R797 CAPITALIZATION INVESTMENT STYLE
VALUE GROWTH
o Top five holdings+++ LARGE [ ] [ ] [ ]
[ ] [ ] [X]
(1) QUALCOMM SMALL [ ] [ ] [ ]
(2) Guess?
(3) Google, Cl A
(4) United Therapeutics
(5) FTI Consulting
o % in five largest holdings 23.9%+
o Number of holdings 32
o Price/earnings ratio 19
o Weighted average market capitalization $19.64 billion
o % of holdings with positive earnings surprises 71.5%
o % of holdings with negative earnings surprises 28.5%
o Net assets $33 million
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE TURNER NEW ENTERPRISE FUND:
JUNE 30, 2000-SEPTEMBER 30, 2008*
[LINE GRAPH]
6/30/00 SEP 00 SEP 01 SEP 02 SEP 03 SEP 04 SEP 05 SEP 06 SEP 07 SEP 08
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Turner New Enterprise Fund $10,000 $12,520 $3,290 $2,270 $4,340 $4,520 $5,860 $6,260 $8,720 $5,600
NASDAQ Composite Index $10,000 $ 9,264 $3,792 $2,977 $4,557 $4,862 $5,552 $5,876 $7,081 $5,529
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDING SEPTEMBER 30, 2008)
ONE THREE FIVE SINCE
YEAR YEARS YEARS INCEPTION
- --------------------------------------------------------------------------------
TURNER NEW ENTERPRISE FUND (35.78)% (1.50)% 5.23% (6.79)%
NASDAQ Composite Index (21.92)% (0.14)% 3.94% (6.92)%
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS+:
[BAR CHART]
Information technology 46.0%
Health care 16.7%
Consumer discretionary 14.6%
Industrials 11.1%
Cash equivalents/short-term investments++ 4.9%
Energy 3.4%
Materials 3.3%
MANAGER'S DISCUSSION AND ANALYSIS
Large losses in two major sectors were instrumental in the Turner New Enterprise
Fund (TBTBX) posting a 35.78% loss in the 12 months ended September 30, 2008.
The fund's return fell short of that of the NASDAQ Composite Index by 13.86
percentage points.
Returns in the information-technology and consumer-discretionary sectors, a 61%
weighting, trailed those of their corresponding index sectors significantly and
were responsible for much of the fund's underperformance. Semiconductor,
data-networking, Internet, and e-commerce stocks detracted most. Adding the most
to performance was a 20% position in health-care and materials stocks, with
biotechnology, contract-research, and mining shares recording strong 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 the top five holdings, but are counted in the number of
holdings.
TURNER FUNDS 2008 ANNUAL REPORT | 15
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER SMALL CAP GROWTH FUND
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2008
[DIAGRAM]
o Ticker symbol TSCEX
MARKET
o CUSIP #900297300 CAPITALIZATION INVESTMENT STYLE
VALUE GROWTH
o Top five holdings+++ LARGE [ ] [ ] [ ]
[ ] [ ] [ ]
(1) Parexel International SMALL [ ] [ ] [X]
(2) United Therapeutics
(3) Digital Realty Trust
(4) Wright Medical Group
(5) Icon ADR
o % in five largest holdings 7.6%+
o Number of holdings 117
o Price/earnings ratio 17.4
o Weighted average market capitalization $1.62 billion
o % of holdings with positive earnings surprises 79.4%
o % of holdings with negative earnings surprises 18.2%
o Net assets $249 million
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE TURNER SMALL CAP GROWTH FUND:
SEPTEMBER 30, 1998-SEPTEMBER 30, 2008*
[LINE GRAPH]
9/30/98 SEP 99 SEP 00 SEP 01 SEP 02 SEP 03 SEP 04 SEP 05 SEP 06 SEP 07 SEP 08
------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Turner Small Cap Growth Fund $10,000 $15,914 $24,838 $12,466 $10,052 $15,039 $16,990 $19,659 $20,846 $26,270 $21,069
Russell 2000 Growth Index $10,000 $13,263 $17,197 $9,873 $ 8,080 $11,452 $12,817 $15,120 $16,009 $19,041 $15,790
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDING SEPTEMBER 30, 2008)
ONE THREE FIVE TEN SINCE
YEAR YEARS YEARS YEARS INCEPTION
- --------------------------------------------------------------------------------
TURNER SMALL CAP GROWTH FUND (19.80)% 2.34% 6.98% 7.74% 11.65%
Russell 2000 Growth Index (17.07)% 1.46% 6.64% 4.67% 5.08%
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS+:
[BAR CHART]
Health care 21.7%
Information technology 18.5%
Industrials 16.0%
Cash equivalents/short-term investments++ 13.8%
Consumer discretionary 10.3%
Energy 6.8%
Financials 4.7%
Materials 3.7%
Consumer staples 2.8%
Telecommunication services 0.9%
Utilities 0.8%
MANAGER'S DISCUSSION AND ANALYSIS
The Turner Small Cap Growth Fund (TSCEX) produced favorable relative returns in
six of the 10 market sectors in which it was invested in the 12-month period
ended September 30, 2008. But that wasn't enough to keep the fund from
underperforming its benchmark, the Russell 2000 Growth Index. The fund recorded
a loss of 19.80%, which trailed the Russell 2000 Growth Index by 2.73 percentage
points.
The fund's best relative performers were health-care, industrials, and
financials stocks, a 42% weighting. Specifically, biotechnology,
specialty-pharmaceutical, medical-device, shipping, and financial-data shares
did best in those sectors. Information-technology, consumer-discretionary, and
materials stocks, a 33% weighting, were drags on performance; semiconductor,
data-networking, semiconductor-capital-equipment, Internet, and metals 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 the top five holdings, but are counted in the number of
holdings.
16 | TURNER FUNDS 2008 ANNUAL REPORT
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER INTERNATIONAL CORE GROWTH FUND
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2008
[DIAGRAM]
o Ticker symbol TICGX
MARKET
o CUSIP #900297771 CAPITALIZATION INVESTMENT STYLE
VALUE GROWTH
o Top five holdings++ LARGE [ ] [ ] [X]
[ ] [ ] [ ]
(1) Nestle SMALL [ ] [ ] [ ]
(2) Cia Energetica de Minas Gerais
(3) Bank of Nova Scotia
(4) Nintendo
(5) International Power
o % in five largest holdings 12.1%+
o Number of holdings 61
o Price/earnings ratio 12.8
o Weighted average market capitalization $36.29 billion
o % of holdings with positive earnings surprises N/A
o % of holdings with negative earnings surprises N/A
o Net assets $3 million
- --------------------------------------------------------------------------------
GROWTH OF A $250,000 INVESTMENT IN THE TURNER INTERNATIONAL CORE GROWTH FUND:
JANUARY 31, 2007-SEPTEMBER 30, 2008*
[LINE GRAPH]
1/31/07 MAR 07 JUN 07 SEP 07 DEC 07 MAR 08 JUN 08 SEP 08
------- ------ ------ ------ ------ ------ ------ ------
Turner International Core Growth Fund $250,000 $254,500 $274,750 $305,250 $321,073 $286,240 $288,511 $210,515
Russell Global Growth ex-U.S.Index $250,000 $259,187 $284,771 $304,561 $306,837 $277,047 $274,247 $205,961
MSCI World Growth ex-U.S. Index $250,000 $260,084 $278,971 $292,634 $292,818 $269,859 $274,208 $211,583
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDING SEPTEMBER 30, 2008)
ONE SINCE
YEAR INCEPTION
- --------------------------------------------------------------------------------
TURNER INTERNATIONAL CORE GROWTH FUND (31.04)% (9.80)%
Russell Global Growth ex-U.S. Index (32.37)% (10.98)%
MSCI World Growth ex-U.S. Index (27.70)% (9.53)%
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS+:
[BAR CHART]
Industrials 15.0%
Financials 13.7%
Energy 13.6%
Materials 12.4%
Consumer staples 10.9%
Information technology 9.6%
Health care 8.7%
Utilities 6.3%
Consumer discretionary 6.2%
Telecommunication services 2.0%
Cash equivalents 1.6%
MANAGER'S DISCUSSION AND ANALYSIS
In the 12-month period ended September 30, 2008, the Turner International Core
Growth Fund (TICGX) recorded a 31.04% loss. As a result, the fund underperformed
its benchmark, the MSCI World Growth ex-U.S. Index, by 3.34 percentage points.
Three of 10 sector positions -- information-technology, financials, and health
care, a combined 32% weighting -- contributed to the fund's results.
Semiconductor, data-networking, insurance, regional-bank, contract-research, and
pharmaceutical holdings especially added value. Materials, utilities, and
consumer-discretionary positions, a 25% weighting, were the primary detractors
from performance, with metals, telecommunications, and Internet stocks providing
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. The inception date
of the Turner International Core Growth Fund was January 31, 2007.
+ Percentages based on total investments.
++ Cash equivalents are not being considered a holding for the top five
holdings, but are counted in the number of holdings.
TURNER FUNDS 2008 ANNUAL REPORT | 17
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER MIDCAP EQUITY FUND
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2008
[DIAGRAM]
o Ticker symbol TMCFX,
Investor Class Shares MARKET
CAPITALIZATION INVESTMENT STYLE
o CUSIP #900297797, VALUE GROWTH
Investor Class Shares LARGE [ ] [ ] [ ]
[ ] [X] [ ]
o Top five holdings++ SMALL [ ] [ ] [ ]
(1) iShares Russell Midcap
Index Fund
(2) Alliance Data Systems
(3) Sybase
(4) Church & Dwight
(5) Brink's
o % in five largest holdings 13.7%+
o Number of holdings 77
o Price/earnings ratio 13.6
o Weighted average market capitalization $3.72 billion
o % of holdings with positive earnings surprises 87.0%
o % of holdings with negative earnings surprises 9.6%
o Net assets $0.4 million, Investor Class Shares
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE TURNER MIDCAP EQUITY FUND, INVESTOR CLASS
SHARES:
JANUARY 31, 2007-SEPTEMBER 30, 2008*
[LINE GRAPH]
1/31/07 MAR 07 JUN 07 SEP 07 DEC 07 MAR 08 JUN 08 SEP 08
------- ------ ------ ------ ------ ------ ------ ------
Turner Midcap Equity Fund
Investor Class Shares $10,000 $10,130 $10,860 $10,610 $10,370 $9,100 $9,250 $7,800
Russell Midcap Index $10,000 $10,096 $10,631 $10,590 $10,215 $9,196 $9,441 $8,222
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDING SEPTEMBER 30, 2008)
ONE SINCE
YEAR INCEPTION
- --------------------------------------------------------------------------------
TURNER MIDCAP EQUITY FUND, INSTITUTIONAL CLASS SHARES (26.12)% (13.25)%
TURNER MIDCAP EQUITY FUND, INVESTOR CLASS SHARES (26.48)% (13.85)%
Russell Midcap Index (22.36)% (11.09)%
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS+:
[BAR CHART]
Industrials 20.7%
Information technology 17.4%
Financials 16.8%
Health care 11.8%
Consumer discretionary 10.6%
Consumer staples 6.5%
Energy 5.7%
Utilities 5.3%
Cash equivalents 2.2%
Materials 1.8%
Telecommunication services 1.2%
MANAGER'S DISCUSSION AND ANALYSIS
In the 12 months ended September 30, 2008, the Turner Midcap Equity Fund,
Investor Class (TMCFX) returned a negative 26.48%, underperforming the Russell
Midcap Growth Index by 4.12 percentage points.
The fund's performance was hurt most by losses in materials and energy stocks,
with a combined weighting of 8%. Building-materials, chemical, and
energy-services stocks lost the most. Good relative returns in the financials,
utilities, consumer-discretionary, and information-technology sectors, which
accounted for 50% of the portfolio, contributed to results. Financial-data,
real-estate, natural-gas-utility, premium-retailing, data-management, and
computer-security holdings were among the outperformers in those sectors.
- --------------------------------------------------------------------------------
* 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.
+ Percentages based on total investments.
++ Cash equivalents are not being considered a holding for the top five
holdings, but are counted in the number of holdings.
18 | TURNER FUNDS 2008 ANNUAL REPORT
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER QUANTITATIVE BROAD MARKET EQUITY FUND
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2008
[DIAGRAM]
o Ticker symbol TBMEX,
Institutional Class Shares MARKET
CAPITALIZATION INVESTMENT STYLE
o CUSIP #900297730, VALUE GROWTH
Institutional Class Shares LARGE [ ] [ ] [X]
[ ] [ ] [ ]
o Top five holdings++ SMALL [ ] [ ] [ ]
(1) Exxon Mobil
(2) Microsoft
(3) General Electric
(4) Bank of America
(5) Procter & Gamble
o % in five largest holdings 11.6%+
o Number of holdings 116
o Price/earnings ratio 12
o Weighted average market capitalization $64.35 billion
o % of holdings with positive earnings surprises 73.4%
o % of holdings with negative earnings surprises 25.1%
o Net assets $0.5 million, Institutional Class Shares
- --------------------------------------------------------------------------------
GROWTH OF A $250,000 INVESTMENT IN THE TURNER QUANTITATIVE BROAD MARKET EQUITY
FUND, INSTITUTIONAL CLASS SHARES:
JUNE 30, 2008-SEPTEMBER 30, 2008*
[LINE GRAPH]
6/30/08 JUL 08 AUG 08 SEP 08
------- -------- -------- --------
Turner Quantitative Broad Market Equity Fund $250,000 $241,750 $240,250 $218,250
Russell 3000 Index $250,000 $248,006 $251,858 $228,177
S&P 500 Index $250,000 $247,899 $251,484 $229,075
- --------------------------------------------------------------------------------
CUMULATIVE TOTAL RETURNS (PERIOD ENDING SEPTEMBER 30, 2008)
SINCE
INCEPTION
- -------------------------------------------------------------------------------------
TURNER QUANTITATIVE BROAD MARKET EQUITY FUND, INSTITUTIONAL CLASS SHARES (12.70)%**
TURNER QUANTITATIVE BROAD MARKET EQUITY FUND, INVESTOR CLASS SHARES (12.80)%**
Russell 3000 Index (8.73)%**
S&P 500 Index (8.37)%**
- -------------------------------------------------------------------------------------
SECTOR WEIGHTINGS+:
[BAR CHART]
Financials 17.7%
Health care 14.2%
Information technology 13.3%
Energy 12.5%
Consumer discretionary 11.1%
Consumer staples 10.9%
Industrials 10.5%
Utilities 6.1%
Materials 3.3%
Cash equivalents 0.4%
MANAGER'S DISCUSSION AND ANALYSIS
In its first three months of existence, the Turner Quantitative Broad Market
Equity Fund, Institutional Class (TBMEX) lost 12.70%. That return underperformed
the Russell 3000 Index's 8.73% negative return by 3.97 percentage points.
The fund is invested in stocks of varied market capitalizations that rank highly
in Turner's proprietary quantitative model. Good relative returns in three
sectors -- financials, utilities, and materials, a 27% weighting -- enhanced the
fund's performance. Business-loan, insurance, telecommunications, and chemical
shares were among the best performers in those sectors. Impairing results the
most were holdings in the industrials and energy sectors, a 23% weighting.
Aviation-equipment, infrastructure, oil-production, and offshore-drilling stocks
were the biggest losers.
- --------------------------------------------------------------------------------
* 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 redemption of fund shares. Performance of the
Institutional and Investor Class Shares will differ due to the difference
in fees. The inception date of the Turner Quantitative Broad Market Equity
Fund was June 30, 2008.
** Cumulative return, not annualized.
+ Percentages based on total investments.
++ Cash equivalents and short-term investments are not being considered a
holding for the top five holdings, but are counted in the number of
holdings.
TURNER FUNDS 2008 ANNUAL REPORT | 19
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER SMALL CAP EQUITY FUND
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2008
[DIAGRAM]
o Ticker symbol TSEIX
MARKET
o CUSIP #87252R714 CAPITALIZATION INVESTMENT STYLE
VALUE GROWTH
o Top five holdings+++ LARGE [ ] [ ] [ ]
[ ] [ ] [ ]
(1) BioMed Realty Trust SMALL [ ] [X] [ ]
(2) Omega Healthcare Investors
(3) SVB Financial Group
(4) STERIS
(5) Potlatch
o % in five largest holdings 7.3%+
o Number of holdings 100
o Price/earnings ratio 15.3
o Weighted average market capitalization $1.23 billion
o % of holdings with positive earnings surprises 66.1%
o % of holdings with negative earnings surprises 30.6%
o Net assets $24 million
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE TURNER SMALL CAP EQUITY FUND:
MARCH 4, 2002-SEPTEMBER 30, 2008*
[LINE GRAPH]
3/4/02 SEP 02 SEP 03 SEP 04 SEP 05 SEP 06 SEP 07 SEP 08
------ ------ ------ ------ ------ ------ ------ ------
Turner Small Cap Equity Fund $10,000 $9,300 $12,279 $15,318 $17,673 $18,641 $20,521 $16,375
Russell 2000 Index $10,000 $7,485 $10,217 $12,135 $14,313 $15,733 $17,675 $15,115
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDING SEPTEMBER 30, 2008)
ONE THREE FIVE SINCE
YEAR YEARS YEARS INCEPTION
- --------------------------------------------------------------------------------
TURNER SMALL CAP EQUITY FUND (20.20)% (2.51)% 5.93% 7.79%
Russell 2000 Index (14.48)% 1.83% 8.15% 6.48%
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS+:
[BAR CHART]
Financials 16.3%
Cash equivalents/short-term investments++ 15.6%
Industrials 14.1%
Information technology 11.1%
Health care 10.9%
Consumer discretionary 10.4%
Utilities 6.4%
Materials 5.6%
Energy 5.3%
Consumer staples 4.3%
MANAGER'S DISCUSSION AND ANALYSIS
The Turner Small Cap Equity Fund (TSEIX) returned a negative 20.20% in the
12-month period ended September 30, 2008. The fund's return fell 5.72 percentage
points short of that of the benchmark, the Russell 2000 Index.
The fund is invested in both growth and value stocks in the nine market sectors;
all nine sector positions registered losses. However, four of the fund's nine
sector positions outperformed their corresponding index sectors: consumer
discretionary, utilities, health care, and financials, amounting to a 44%
weighting. Information-technology and industrials shares, a 25% weighting, were
the biggest drags on performance. Computer-related, digital-equipment,
chemicals, and shipping stocks recorded sizable losses.
- --------------------------------------------------------------------------------
* 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 the top five holdings, but are counted in the number of
holdings.
20 | TURNER FUNDS 2008 ANNUAL REPORT
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER QUANTITATIVE LARGE CAP VALUE FUND
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2008
[DIAGRAM]
o Ticker symbol TLVFX
MARKET
o CUSIP #900297821 CAPITALIZATION INVESTMENT STYLE
VALUE GROWTH
o Top five holdings++ LARGE [X] [ ] [ ]
[ ] [ ] [ ]
(1) Exxon Mobil SMALL [ ] [ ] [ ]
(2) General Electric
(3) JPMorgan Chase
(4) Bank of America
(5) Wells Fargo
o % in five largest holdings 20.6%+
o Number of holdings 82
o Price/earnings ratio 11.8
o Weighted average market capitalization $96.02 billion
o % of holdings with positive earnings surprises 77.0%
o % of holdings with negative earnings surprises 21.7%
o Net assets $0.8 million
- --------------------------------------------------------------------------------
GROWTH OF A $25,000 INVESTMENT IN THE TURNER QUANTITATIVE LARGE CAP VALUE
FUND:
OCTOBER 10, 2005-SEPTEMBER 30, 2008*
[LINE GRAPH]
10/10/05 MAR 06 SEP 06 MAR 07 SEP 07 MAR 08 SEP 08
-------- ------ ------ ------ ------ ------ ------
Turner Quantitative Large Cap Value Fund $25,000 $27,600 $28,730 $31,230 $33,302 $30,314 $27,056
Russell 1000 Value Index $25,000 $27,892 $29,802 $32,587 $34,109 $29,330 $26,073
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDING SEPTEMBER 30, 2008)
ONE SINCE
YEAR INCEPTION
- --------------------------------------------------------------------------------
TURNER QUANTITATIVE LARGE CAP VALUE FUND (18.76)% 2.69%
Russell 1000 Value Index (23.56)% 1.42%
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS+:
[BAR CHART]
Financials 29.0%
Energy 15.9%
Health care 11.7%
Industrials 10.7%
Consumer staples 9.6%
Consumer discretionary 7.6%
Utilities 6.5%
Materials 3.4%
Information technology 2.9%
Telecommunication services 2.6%
Cash equivalents 0.1%
MANAGER'S DISCUSSION AND ANALYSIS
In the 12 months ended September 30, 2008, the Turner Quantitative Large Cap
Value Fund (TLVFX) lost 18.76%. That loss outperformed the Russell 1000 Value
Index's 23.56% loss by 4.80 percentage points.
The fund is invested in large-cap value stocks that rank highly in Turner's
proprietary quantitative model. The model did a good job of stock picking: seven
of the fund's 10 sector investments outperformed their corresponding index
sectors. Financials stocks, a 29% weighting, enhanced performance to the
greatest degree; insurance, brokerage, and diversified-financial stocks did
best. Hurting results the most were consumer-staples and health-care stocks,
which represented 21% of the portfolio; food-processing, pharmaceutical, and
medical-equipment 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 Quantitative Large Cap Value Fund was October 10, 2005.
+ Percentages based on total investments.
++ Cash equivalents are not being considered a holding for the top five
holdings, but are counted in the number of holdings.
TURNER FUNDS 2008 ANNUAL REPORT | 21
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER CONCENTRATED GROWTH FUND
September 30, 2008
Value
Shares (000)
- --------------------------------------------------------------------------------
COMMON STOCK--99.4%+
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--18.2%
- --------------------------------------------------------------------------------
Amazon.com* 25,330 $ 1,843
Guess? 35,870 1,248
MGM Mirage* # 41,460 1,182
Staples 92,450 2,080
Toll Brothers* 54,850 1,384
------------
Total Consumer discretionary 7,737
------------
- --------------------------------------------------------------------------------
FINANCIALS--14.3%
- --------------------------------------------------------------------------------
Charles Schwab 90,570 2,355
Marsh & McLennan 64,260 2,041
US Bancorp 47,380 1,706
------------
Total Financials 6,102
------------
- --------------------------------------------------------------------------------
HEALTH CARE--16.3%
- --------------------------------------------------------------------------------
Charles River Laboratories
International* 31,590 1,754
Gilead Sciences* 43,770 1,995
Illumina* 34,640 1,404
Intuitive Surgical* 7,440 1,793
------------
Total Health care 6,946
------------
- --------------------------------------------------------------------------------
INDUSTRIALS--7.7%
- --------------------------------------------------------------------------------
First Solar* 7,760 1,466
FTI Consulting* 24,950 1,802
------------
Total Industrials 3,268
------------
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--37.3%
- --------------------------------------------------------------------------------
Apple* 16,460 1,871
Applied Materials 130,580 1,976
Broadcom, Cl A* 73,440 1,368
F5 Networks* 57,880 1,353
Google, Cl A* 6,070 2,431
Hewlett-Packard 33,180 1,534
Intel 86,460 1,620
Lam Research* 56,660 1,784
Nortel Networks* 91 --
QUALCOMM 45,590 1,959
------------
Total Information technology 15,896
------------
Value
Shares (000)
- --------------------------------------------------------------------------------
MATERIALS--5.6%
- --------------------------------------------------------------------------------
Monsanto 24,140 $ 2,389
------------
Total Materials 2,389
------------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $46,731) 42,338
================================================================================
- --------------------------------------------------------------------------------
CASH EQUIVALENT--3.7%
- --------------------------------------------------------------------------------
BlackRock TempCash Fund
Institutional Shares,
2.266%** (1) 1,555,615 1,556
- --------------------------------------------------------------------------------
TOTAL CASH EQUIVALENT
(COST $1,556) 1,556
================================================================================
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--103.1%
(COST $48,287) $ 43,894
================================================================================
Percentages are based on Net Assets of $42,581.***
* Non-income producing security.
** Rate shown is the 7-day effective yield as of September 30, 2008.
*** 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, 2008. The total value
of securities on loan at September 30, 2008 was $1,075,986. Certain of
these securities may have been sold prior to period end and are included
in receivable for investment securities sold on the Statement of Assets
and Liabilities.
(1) The Fund lends securities in its portfolio pursuant to a securities
lending agreement ("Lending Agreement") with Morgan Stanley. 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
BlackRock TempCash Fund, Institutional Shares, a money market fund. All
such investments are made at the risk of the Fund. As such, the Fund is
liable for investment losses. The Fund receives an annual fee for its
participation in the Lending Agreement based on projected lending
activity. A partial position of this security was purchased with cash
collateral received from securities lending. The total value of such
security at September 30, 2008 was $1,267,262.
Cl -- Class
Amounts designated as "--" have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
22 | TURNER FUNDS 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER CORE GROWTH FUND
September 30, 2008
Value
Shares (000)
- --------------------------------------------------------------------------------
COMMON STOCK--98.5%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--10.9%
- --------------------------------------------------------------------------------
Amazon.com* 76,960 $ 5,600
Cablevision Systems, Cl A 231,885 5,834
Comcast, Cl A 396,030 7,774
Guess? 154,070 5,360
Harley-Davidson 149,410 5,573
Kohl's* 164,270 7,570
MGM Mirage* # 142,840 4,071
NVR* 12,948 7,406
Pulte Homes 225,470 3,150
Sherwin-Williams 75,810 4,333
Staples 296,220 6,665
Urban Outfitters* 132,970 4,238
------------
Total Consumer discretionary 67,574
------------
- --------------------------------------------------------------------------------
CONSUMER STAPLES--9.5%
- --------------------------------------------------------------------------------
Campbell Soup 126,190 4,871
Clorox 85,240 5,344
CVS/Caremark 265,300 8,930
Estee Lauder, Cl A 90,120 4,498
General Mills 67,200 4,618
Kimberly-Clark 142,640 9,249
McCormick 128,240 4,931
PepsiCo 228,420 16,279
------------
Total Consumer staples 58,720
------------
- --------------------------------------------------------------------------------
ENERGY--10.2%
- --------------------------------------------------------------------------------
Cameron International* 241,080 9,291
Enbridge 116,590 4,441
Petroleo Brasileiro ADR 245,090 10,772
Schlumberger 231,910 18,110
Southwestern Energy* 338,477 10,337
Valero Energy 349,830 10,600
------------
Total Energy 63,551
------------
- --------------------------------------------------------------------------------
FINANCIALS--15.4%
- --------------------------------------------------------------------------------
Charles Schwab 529,420 13,765
Goldman Sachs Group 107,430 13,751
Marsh & McLennan 331,880 10,541
People's United Financial 581,740 11,198
Public Storage 124,120 12,289
T. Rowe Price Group 234,790 12,611
US Bancorp 390,590 14,069
Visa, Cl A 122,090 7,495
------------
Total Financials 95,719
------------
Value
Shares (000)
- --------------------------------------------------------------------------------
HEALTH CARE--13.2%
- --------------------------------------------------------------------------------
Baxter International 170,350 $ 11,180
Celgene* 69,380 4,390
Charles River Laboratories
International* 59,487 3,303
Covidien 132,890 7,144
Express Scripts* 84,640 6,248
Genentech* 66,140 5,865
Genzyme* 100,330 8,116
Gilead Sciences* 356,260 16,238
Illumina* 95,840 3,885
Intuitive Surgical* 16,468 3,969
Myriad Genetics* 54,020 3,505
Thermo Fisher Scientific* 105,260 5,789
United Therapeutics* 23,930 2,517
------------
Total Health care 82,149
------------
- --------------------------------------------------------------------------------
INDUSTRIALS--11.0%
- --------------------------------------------------------------------------------
Deere 102,330 5,065
First Solar* 55,090 10,407
Fluor 78,240 4,358
Robert Half International 203,140 5,028
Siemens ADR 142,560 13,385
SPX 48,470 3,732
Sunpower, Cl A* # 108,593 7,702
Tyco International 278,160 9,741
Union Pacific 123,630 8,798
------------
Total Industrials 68,216
------------
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--22.6%
- --------------------------------------------------------------------------------
Activision Blizzard* 369,380 5,700
Adobe Systems* 199,260 7,865
Apple* 157,340 17,883
Applied Materials 679,760 10,285
Baidu.com ADR* 17,330 4,302
Broadcom, Cl A* 338,020 6,297
F5 Networks* 152,460 3,564
Fiserv* 207,673 9,827
Google, Cl A* 51,670 20,695
Hewlett-Packard 267,960 12,390
Intel 858,960 16,088
Lam Research* 159,420 5,020
QUALCOMM 380,070 16,332
Salesforce.com* 87,330 4,227
------------
Total Information technology 140,475
------------
TURNER FUNDS 2008 ANNUAL REPORT | 23
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER CORE GROWTH FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
MATERIALS--2.6%
- --------------------------------------------------------------------------------
International Paper 141,040 $ 3,692
Monsanto 124,900 12,363
------------
Total Materials 16,055
------------
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--2.2%
- --------------------------------------------------------------------------------
Mobile Telesystems 87,100 4,878
NII Holdings* 227,610 8,631
------------
Total Telecommunication services 13,509
------------
- --------------------------------------------------------------------------------
UTILITIES--0.9%
- --------------------------------------------------------------------------------
FPL Group 111,440 5,605
------------
Total Utilities 5,605
------------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $663,521) 611,573
================================================================================
- --------------------------------------------------------------------------------
CASH EQUIVALENT--4.9%
- --------------------------------------------------------------------------------
BlackRock TempCash Fund
Institutional Shares,
2.266%** (1) 30,251,620 30,252
- --------------------------------------------------------------------------------
TOTAL CASH EQUIVALENT
(COST $30,252) 30,252
================================================================================
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--103.4%
(COST $693,773) $ 641,825
================================================================================
Percentages are based on Net Assets of $620,775.***
* Non-income producing security.
** Rate shown is the 7-day effective yield as of September 30, 2008.
*** This number has been rounded to the nearest thousand.
# Security fully or partially on loan at September 30, 2008. The total value
of securities on loan at September 30, 2008 was $8,328,372. Certain of
these securities may have been sold prior to period end and are included
in receivable for investment securities sold on the Statement of Assets
and Liabilities.
(1) The Fund lends securities in its portfolio pursuant to a securities
lending agreement ("Lending Agreement") with Morgan Stanley. 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 in the BlackRock TempCash Fund, Institutional Shares,
a money market fund. All such investments are made at the risk of the
Fund. As such, the Fund is liable for investment losses. The Fund receives
an annual fee for its participation in the Lending Agreement based on
projected lending activity. A partial position of this security was
purchased with cash collateral received from securities lending. The total
value of such security at September 30, 2008 was $10,817,700.
ADR -- American Depositary Receipt
Cl -- Class
The accompanying notes are an integral part of the financial statements.
24 | TURNER FUNDS 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER CORE GROWTH 130/30 FUND
September 30, 2008
Value
Shares (000)
- --------------------------------------------------------------------------------
COMMON STOCK--126.6%+
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--12.4%
- --------------------------------------------------------------------------------
Amazon.com* 110 $ 8
Cablevision Systems, Cl A 110 3
Comcast, Cl A 640 12
Guess?^ 257 9
Harley-Davidson 240 9
Kohl's*^ 190 9
MGM Mirage* 220 6
NVR*^ 21 12
Pulte Homes 360 5
Sherwin-Williams 120 7
Staples^ 380 8
Urban Outfitters*^ 212 7
------------
Total Consumer discretionary 95
------------
- --------------------------------------------------------------------------------
CONSUMER STAPLES--12.7%
- --------------------------------------------------------------------------------
Campbell Soup 202 8
Clorox^ 140 9
CVS/Caremark^ 435 15
Estee Lauder, Cl A 141 7
General Mills^ 139 10
Kimberly-Clark^ 230 15
McCormick^ 221 8
PepsiCo^ 370 26
------------
Total Consumer staples 98
------------
- --------------------------------------------------------------------------------
ENERGY--13.7%
- --------------------------------------------------------------------------------
Cameron International*^ 403 16
Enbridge 193 7
Petroleo Brasileiro ADR^ 407 18
Schlumberger^ 399 31
Southwestern Energy*^ 559 17
Valero Energy^ 550 17
------------
Total Energy 106
------------
- --------------------------------------------------------------------------------
FINANCIALS--20.1%
- --------------------------------------------------------------------------------
Charles Schwab^ 857 22
Goldman Sachs Group^ 161 21
Marsh & McLennan^ 600 19
People's United Financial^ 962 18
Public Storage^ 198 20
T. Rowe Price Group^ 370 20
US Bancorp 630 23
Visa, Cl A^ 197 12
------------
Total Financials 155
------------
Value
Shares (000)
- --------------------------------------------------------------------------------
HEALTH CARE--17.6%
- --------------------------------------------------------------------------------
Baxter International^ 272 $ 18
Celgene* 89 6
Charles River Laboratories
International* 99 5
Covidien^ 223 12
Express Scripts*^ 138 10
Genentech*^ 110 10
Genzyme*^ 168 14
Gilead Sciences*^ 603 27
Illumina* 154 6
Intuitive Surgical*^ 33 8
Myriad Genetics* 90 6
Thermo Fisher Scientific*^ 161 9
United Therapeutics* 40 4
------------
Total Health care 135
------------
- --------------------------------------------------------------------------------
INDUSTRIALS--12.6%
- --------------------------------------------------------------------------------
Deere^ 160 8
First Solar*^ 90 17
Fluor^ 180 10
Robert Half International 300 7
Siemens ADR^ 229 21
SPX 74 6
Sunpower, Cl A*^ 170 12
Union Pacific^ 219 16
------------
Total Industrials 97
------------
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--30.0%
- --------------------------------------------------------------------------------
Activision Blizzard*^ 672 10
Adobe Systems*^ 327 13
Apple*^ 250 28
Applied Materials^ 1,095 17
Baidu.com ADR* 23 6
Broadcom, Cl A*^ 560 10
F5 Networks* 240 6
Fiserv*^ 342 16
Google, Cl A*^ 89 36
Hewlett-Packard^ 420 19
Intel^ 1,530 29
Lam Research*^ 267 8
QUALCOMM^ 595 25
Salesforce.com* 138 7
------------
Total Information technology 230
------------
TURNER FUNDS 2008 ANNUAL REPORT | 25
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER CORE GROWTH 130/30 FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
MATERIALS--2.6%
- --------------------------------------------------------------------------------
Monsanto^ 199 $ 20
------------
Total Materials 20
------------
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--2.7%
- --------------------------------------------------------------------------------
Mobile Telesystems 111 6
NII Holdings*^ 379 15
------------
Total Telecommunication services 21
------------
- --------------------------------------------------------------------------------
UTILITIES--2.2%
- --------------------------------------------------------------------------------
Cia Energetica de Minas
Gerais ADR 388 8
FPL Group 189 9
------------
Total Utilities 17
------------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $1,102) 974
================================================================================
- --------------------------------------------------------------------------------
CASH EQUIVALENT--4.7%
- --------------------------------------------------------------------------------
BlackRock TempCash Fund
Institutional Shares, 2.266%** 35,866 36
- --------------------------------------------------------------------------------
TOTAL CASH EQUIVALENT
(COST $36) 36
================================================================================
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--131.3%
(COST $1,138) $ 1,010
================================================================================
Percentages are based on Net Assets of $769.***
* Non-income producing security.
** Rate shown is the 7-day effective yield as of September 30, 2008.
*** This number has been rounded to the nearest thousand.
^ All or a portion of this securitiy was held as collateral for securities
sold short. The total value of collateral for securities sold short at
September 30, 2008 was $783,888.
+ 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.
26 | TURNER FUNDS 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
SCHEDULE OF SECURITIES SOLD SHORT
TURNER CORE GROWTH 130/30 FUND
September 30, 2008
Value
Shares (000)
- --------------------------------------------------------------------------------
COMMON STOCK--30.8%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--2.5%
- --------------------------------------------------------------------------------
DISH Network, Cl A* 320 $ 7
Toyota Motor ADR 77 6
Yum! Brands 190 6
------------
Total Consumer discretionary 19
------------
- --------------------------------------------------------------------------------
CONSUMER STAPLES--5.0%
- --------------------------------------------------------------------------------
BJ's Wholesale Club* 279 11
Hormel Foods 267 10
Sara Lee 816 10
Unilever 292 8
------------
Total Consumer staples 39
------------
- --------------------------------------------------------------------------------
ENERGY--4.0%
- --------------------------------------------------------------------------------
Baker Hughes 90 5
Chevron 68 6
CNX Gas* 178 4
EOG Resources 67 6
Murphy Oil 80 5
W&T Offshore 179 5
------------
Total Energy 31
------------
- --------------------------------------------------------------------------------
FINANCIALS--4.7%
- --------------------------------------------------------------------------------
Allied Irish Banks* 230 4
Capital One Financial 223 11
Eaton Vance 250 9
General Growth Properties 245 4
M&T Bank 89 8
------------
Total Financials 36
------------
- --------------------------------------------------------------------------------
HEALTH CARE--3.6%
- --------------------------------------------------------------------------------
Edwards Lifesciences* 200 12
GlaxoSmithKline ADR 218 9
Schering-Plough 400 7
------------
Total Health care 28
------------
- --------------------------------------------------------------------------------
INDUSTRIALS--4.2%
- --------------------------------------------------------------------------------
Avery Dennison 270 12
Cooper Industries, Cl A 180 7
Ingersoll-Rand, Cl A 214 7
Rockwell Automation 156 6
------------
Total Industrials 32
------------
Value
Shares (000)
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--4.2%
- --------------------------------------------------------------------------------
Autodesk* 214 $ 7
Avnet* 236 6
Check Point Software
Technologies* 310 7
Computer Sciences* 168 7
NetApp* 280 5
------------
Total Information technology 32
------------
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--2.6%
- --------------------------------------------------------------------------------
America Movil ADR, Ser L 156 7
China Mobile ADR 89 4
Deutsche Telekom ADR 301 5
US Cellular* 77 4
------------
Total Telecommunication services 20
------------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(PROCEEDS $262) 237
================================================================================
- --------------------------------------------------------------------------------
TOTAL SECURITIES SOLD SHORT--30.8%
(PROCEEDS $262) $ 237
================================================================================
Percentages are based on Net Assets of $769.**
* Non-income producing security.
** 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 2008 ANNUAL REPORT | 27
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER EMERGING GROWTH FUND
September 30, 2008
Value
Shares (000)
- --------------------------------------------------------------------------------
COMMON STOCK--79.4%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--11.7%
- --------------------------------------------------------------------------------
American Public Education* 28,420 $ 1,372
Boyd Gaming # 287,410 2,690
California Pizza Kitchen* 241,830 3,112
Chico's FAS* 255,890 1,400
Citi Trends* 160,210 2,610
Deckers Outdoor* 206,780 21,522
Fuel Systems Solutions* 146,980 5,063
Genesco* 97,670 3,270
Great Wolf Resorts* 248,286 909
New Oriental Education &
Technology Group ADR* 53,260 3,421
New York & Co.* 389,080 3,712
Red Robin Gourmet Burgers* 153,310 4,109
True Religion Apparel* # 148,410 3,836
Volcom* # 299,310 5,172
------------
Total Consumer discretionary 62,198
------------
- --------------------------------------------------------------------------------
CONSUMER STAPLES--2.1%
- --------------------------------------------------------------------------------
Green Mountain Coffee
Roasters* # 70,930 2,790
United Natural Foods* # 338,360 8,456
------------
Total Consumer staples 11,246
------------
- --------------------------------------------------------------------------------
ENERGY--12.8%
- --------------------------------------------------------------------------------
Brigham Exploration* 251,150 2,760
Carrizo Oil & Gas* # 145,170 5,265
Dawson Geophysical* 112,290 5,243
Gushan Environmental
Energy # 448,290 2,291
ION Geophysical* 267,030 3,789
James River Coal* # 133,320 2,932
Kodiak Oil & Gas* 671,690 1,008
Lufkin Industries 55,260 4,385
NATCO Group, Cl A* 232,495 9,342
Penn Virginia 208,920 11,165
Petroleum Development* 37,940 1,683
StealthGas 143,010 1,935
T-3 Energy Services* 121,040 4,493
Trico Marine Services* # 79,990 1,366
Willbros Group* 372,092 9,860
------------
Total Energy 67,517
------------
Value
Shares (000)
- --------------------------------------------------------------------------------
FINANCIALS--3.5%
- --------------------------------------------------------------------------------
American Physicians Capital 133,760 $ 5,662
Harleysville Group 96,680 3,654
IBERIABANK 57,480 3,038
Navigators Group* 107,460 6,233
------------
Total Financials 18,587
------------
- --------------------------------------------------------------------------------
HEALTH CARE--17.2%
- --------------------------------------------------------------------------------
Acorda Therapeutics* 153,500 3,661
Alexion Pharmaceuticals* 178,860 7,029
Auxilium Pharmaceuticals* # 241,270 7,817
Datascope 76,410 3,945
Hologic* 91,650 1,772
Icon ADR* 305,620 11,690
IPC The Hospitalist* 96,264 2,474
Kendle International* # 187,060 8,363
LHC Group* 140,040 3,988
MWI Veterinary Supply* 109,620 4,307
Parexel International* 567,114 16,254
PharMerica* # 201,380 4,529
Rigel Pharmaceuticals* # 154,260 3,602
Wright Medical Group* 108,268 3,296
XenoPort* 169,340 8,211
------------
Total Health care 90,938
------------
- --------------------------------------------------------------------------------
INDUSTRIALS--22.6%
- --------------------------------------------------------------------------------
American Ecology 73,540 2,035
Ameron International 65,830 4,717
AZZ* # 97,200 4,021
Bucyrus International, Cl A 417,040 18,633
Canadian Solar GDR* 74,120 1,448
CBIZ* 563,340 4,760
Chart Industries* 176,420 5,039
CIRCOR International 78,570 3,412
Clean Harbors* 88,970 6,010
EnPro Industries* 158,980 5,908
Genesee & Wyoming, Cl A* 120,215 4,511
GeoEye* # 63,360 1,402
Graham 87,120 4,713
HUB Group, Cl A* 82,694 3,113
II-VI* 205,120 7,930
Layne Christensen* 78,890 2,795
Lindsay # 146,740 10,675
LMI Aerospace* 168,540 3,389
28 | TURNER FUNDS 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER EMERGING GROWTH FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
Middleby* # 127,300 $ 6,914
Powell Industries* 80,360 3,280
Robbins & Myers 127,240 3,936
Titan International # 148,700 3,170
Triumph Group # 173,076 7,911
------------
Total Industrials 119,722
------------
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--7.9%
- --------------------------------------------------------------------------------
Actuate* 401,870 1,407
Ansys* 276,860 10,485
Ariba* 459,040 6,486
Comtech Telecommunications* 98,685 4,859
Cybersource* 250,236 4,031
DG FastChannel* # 114,890 2,518
Kenexa* 134,620 2,126
Phoenix Technologies* 197,060 1,574
Renesola* # 265,880 2,789
Rofin-Sinar Technologies* 93,160 2,852
SPSS* 86,170 2,530
------------
Total Information technology 41,657
------------
- --------------------------------------------------------------------------------
MATERIALS--0.7%
- --------------------------------------------------------------------------------
Calgon Carbon* # 189,290 3,854
------------
Total Materials 3,854
------------
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--0.7%
- --------------------------------------------------------------------------------
NTELOS Holdings 132,030 3,550
------------
Total Telecommunication services 3,550
------------
- --------------------------------------------------------------------------------
UTILITIES--0.2%
- --------------------------------------------------------------------------------
Artesian Resources, Cl A 57,705 977
------------
Total Utilities 977
------------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $371,908) 420,246
================================================================================
- --------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY--4.0%
- --------------------------------------------------------------------------------
iShares Russell 2000 Growth
Index Fund # 94,150 6,658
iShares Russell 2000
Index Fund 215,550 14,742
- --------------------------------------------------------------------------------
TOTAL REGISTERED INVESTMENT
COMPANY (COST $22,333) 21,400
================================================================================
Value
Shares (000)
- --------------------------------------------------------------------------------
CASH EQUIVALENT--28.7%
- --------------------------------------------------------------------------------
BlackRock TempCash Fund
Institutional Shares,
2.266%** (1) 152,174,119 $ 152,174
- --------------------------------------------------------------------------------
TOTAL CASH EQUIVALENT
(COST $152,174) 152,174
================================================================================
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--112.1%
(COST $546,415) $ 593,820
================================================================================
Percentages are based on Net Assets of $529,578.***
* Non-income producing security.
** Rate shown is the 7-day effective yield as of September 30, 2008.
*** This number has been rounded to the nearest thousand.
# Security fully or partially on loan at September 30, 2008. The total value
of securities on loan at September 30, 2008 was $58,056,140. Certain of
these securities may have been sold prior to period end and are included
in receivable for investment securities sold on the Statement of Assets
and Liabilities.
(1) The Fund lends securities in its portfolio pursuant to a securities
lending agreement ("Lending Agreement") with Morgan Stanley. 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 in the BlackRock TempCash Fund, Institutional Shares,
a money market fund. All such investments are made at the risk of the
Fund. As such, the Fund is liable for investment losses. The Fund receives
an annual fee for its participation in the Lending Agreement based on
projected lending activity. A partial position of this security was
purchased with cash collateral received from securities lending. The total
value of such security at September 30, 2008 was $63,859,046.
ADR -- American Depositary Receipt
Cl -- Class
GDR -- Global Depositary Receipt
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2008 ANNUAL REPORT | 29
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER LARGE CAP GROWTH FUND
September 30, 2008
Value
Shares (000)
- --------------------------------------------------------------------------------
COMMON STOCK--98.6%+
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--7.4%
- --------------------------------------------------------------------------------
Amazon.com* 3,970 $ 289
Comcast, Cl A 13,940 274
Harley-Davidson 11,290 421
Kohl's* 9,050 417
MGM Mirage* # 10,660 304
Staples 21,300 479
------------
Total Consumer discretionary 2,184
------------
- --------------------------------------------------------------------------------
CONSUMER STAPLES--13.7%
- --------------------------------------------------------------------------------
Campbell Soup 11,490 443
Clorox 6,400 401
CVS/Caremark 20,350 685
Estee Lauder, Cl A 6,490 324
General Mills 4,950 340
Kimberly-Clark 8,220 533
PepsiCo 18,670 1,331
------------
Total Consumer staples 4,057
------------
- --------------------------------------------------------------------------------
ENERGY--8.5%
- --------------------------------------------------------------------------------
Halliburton 13,510 438
Petroleo Brasileiro ADR 11,400 501
Schlumberger 12,470 974
Southwestern Energy* 7,180 219
Valero Energy 13,280 402
------------
Total Energy 2,534
------------
- --------------------------------------------------------------------------------
FINANCIALS--5.8%
- --------------------------------------------------------------------------------
Goldman Sachs Group 4,000 512
Marsh & McLennan 12,500 397
T. Rowe Price Group 8,460 455
US Bancorp 10,000 360
------------
Total Financials 1,724
------------
- --------------------------------------------------------------------------------
HEALTH CARE--14.2%
- --------------------------------------------------------------------------------
Abbott Laboratories 15,230 877
Alcon 3,640 588
Baxter International 10,680 701
Express Scripts* 7,620 563
Value
Shares (000)
- --------------------------------------------------------------------------------
Gilead Sciences* 15,550 $ 709
Intuitive Surgical* 1,620 390
Thermo Fisher Scientific* 6,770 372
------------
Total Health care 4,200
------------
- --------------------------------------------------------------------------------
INDUSTRIALS--7.6%
- --------------------------------------------------------------------------------
Deere 8,230 407
First Solar* 2,500 472
Fluor 3,550 198
Siemens ADR 6,120 575
Union Pacific 8,350 594
------------
Total Industrials 2,246
------------
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--37.7%
- --------------------------------------------------------------------------------
Activision Blizzard* 23,220 358
Adobe Systems* 16,530 652
Apple* 10,600 1,205
Applied Materials 56,240 851
Baidu.com ADR* 1,410 350
Broadcom, Cl A* 53,560 998
Google, Cl A* 3,875 1,552
Hewlett-Packard 20,830 963
Intel 63,560 1,191
Juniper Networks* 35,260 743
Kla-Tencor 13,300 421
QUALCOMM 31,330 1,346
Xilinx 22,930 538
------------
Total Information technology 11,168
------------
- --------------------------------------------------------------------------------
MATERIALS--3.0%
- --------------------------------------------------------------------------------
International Paper 13,300 348
Monsanto 5,530 547
------------
Total Materials 895
------------
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--0.7%
- --------------------------------------------------------------------------------
NII Holdings* 5,330 202
------------
Total Telecommunication services 202
------------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $31,074) 29,210
================================================================================
30 | TURNER FUNDS 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER LARGE CAP GROWTH FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
CASH EQUIVALENT--2.4%
- --------------------------------------------------------------------------------
BlackRock TempCash Fund
Institutional Shares,
2.266%** (1) 715,946 $ 716
- --------------------------------------------------------------------------------
TOTAL CASH EQUIVALENT
(COST $716) 716
================================================================================
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--101.0%
(COST $31,790) $ 29,926
================================================================================
Percentages are based on Net Assets of $29,637.***
* Non-income producing security.
** Rate shown is the 7-day effective yield as of September 30, 2008.
*** 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, 2008. The total value
of securities on loan at September 30, 2008 was $275,494. Certain of these
securities may have been sold prior to period end and are included in
receivable for investment securities sold on the Statement of Assets and
Liabilities.
(1) The Fund lends securities in its portfolio pursuant to a securities
lending agreement ("Lending Agreement") with Morgan Stanley. 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 in the BlackRock TempCash Fund, Institutional Shares,
a money market fund. All such investments are made at the risk of the
Fund. As such, the Fund is liable for investment losses. The Fund receives
an annual fee for its participation in the Lending Agreement based on
projected lending activity. A partial position of this security was
purchased with cash collateral received from securities lending. The total
value of such security at September 30, 2008 was $324,468.
ADR -- American Depositary Receipt
Cl -- Class
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2008 ANNUAL REPORT | 31
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER MIDCAP GROWTH FUND
September 30, 2008
Value
Shares (000)
- --------------------------------------------------------------------------------
COMMON STOCK--97.4%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--18.3%
- --------------------------------------------------------------------------------
Apollo Group, Cl A* 81,630 $ 4,841
Big Lots* # 267,402 7,442
Cablevision Systems, Cl A 331,600 8,343
Deckers Outdoor* 91,470 9,520
GameStop, Cl A* 320,380 10,960
Guess? 477,207 16,602
Harley-Davidson 360,730 13,455
Kohl's* 524,400 24,164
Lululemon Athletica* # 347,840 8,011
MGM Mirage* # 229,660 6,545
Pulte Homes 688,950 9,625
Sherwin-Williams 198,100 11,323
Staples 629,860 14,172
Toll Brothers* 367,387 9,269
Urban Outfitters* 389,050 12,399
Warnaco Group* 157,070 7,114
WMS Industries* 553,025 16,906
Wynn Resorts # 213,767 17,452
------------
Total Consumer discretionary 208,143
------------
- --------------------------------------------------------------------------------
CONSUMER STAPLES--4.0%
- --------------------------------------------------------------------------------
Alberto-Culver, Cl B 391,030 10,652
Clorox 171,220 10,734
Estee Lauder, Cl A 288,420 14,395
McCormick 253,980 9,765
------------
Total Consumer staples 45,546
------------
- --------------------------------------------------------------------------------
ENERGY--9.7%
- --------------------------------------------------------------------------------
Alpha Natural Resources* 109,010 5,606
Cameron International* 388,070 14,956
Consol Energy 217,430 9,978
Continental Resources* 211,240 8,287
Diamond Offshore Drilling 100,980 10,407
Dresser-Rand Group* 314,430 9,895
Range Resources 244,665 10,489
Smith International 279,420 16,385
Southwestern Energy* 348,770 10,652
Sunoco 264,050 9,395
Walter Industries 105,590 5,010
------------
Total Energy 111,060
------------
Value
Shares (000)
- --------------------------------------------------------------------------------
FINANCIALS--8.0%
- --------------------------------------------------------------------------------
AON 343,660 $ 15,451
Hudson City Bancorp 937,340 17,294
Lazard, Cl A 165,520 7,078
Northern Trust 257,916 18,621
Public Storage 124,280 12,305
T. Rowe Price Group 370,842 19,918
------------
Total Financials 90,667
------------
- --------------------------------------------------------------------------------
HEALTH CARE--12.6%
- --------------------------------------------------------------------------------
Alexion Pharmaceuticals* 261,980 10,296
Allergan 194,280 10,005
Beckman Coulter 102,620 7,285
Charles River Laboratories
International* 207,209 11,506
Covance* 167,590 14,817
Dentsply International 242,950 9,120
Express Scripts* 338,070 24,956
Henry Schein* 190,599 10,262
Illumina* 310,856 12,599
Intuitive Surgical* 60,750 14,640
Myriad Genetics* 89,580 5,812
United Therapeutics* 121,870 12,817
------------
Total Health care 144,115
------------
- --------------------------------------------------------------------------------
INDUSTRIALS--16.2%
- --------------------------------------------------------------------------------
AGCO* 193,030 8,225
Ametek 340,830 13,896
Clean Harbors* 132,409 8,944
Covanta Holding* 382,160 9,149
Cummins 319,470 13,967
ESCO Technologies* 56,150 2,705
Flowserve 106,070 9,416
Fluor 261,480 14,565
FTI Consulting* 263,457 19,032
JB Hunt Transport Services 286,700 9,567
Kansas City Southern* 177,490 7,874
Pentair 138,280 4,780
Quanta Services* 490,940 13,260
Robert Half International 461,300 11,417
SPX 117,300 9,032
Stericycle* 205,030 12,078
Sunpower, Cl A* # 229,660 16,290
------------
Total Industrials 184,197
------------
32 | TURNER FUNDS 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER MIDCAP GROWTH FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--21.4%
- --------------------------------------------------------------------------------
Activision Blizzard* 1,057,060 $ 16,311
Altera 918,350 18,992
Atheros Communications* # 684,956 16,151
Baidu.com ADR* 34,570 8,581
Broadcom, Cl A* 630,010 11,737
Cavium Networks* # 420,449 5,920
Concur Technologies* 124,910 4,779
F5 Networks* 623,872 14,586
Fiserv* 371,351 17,572
Juniper Networks* 875,320 18,443
Lam Research* 382,240 12,037
McAfee* 722,300 24,529
Omniture* 700,970 12,870
PMC - Sierra* 1,898,270 14,085
Polycom* 344,590 7,970
Salesforce.com* 277,680 13,440
Varian Semiconductor
Equipment Associates* 472,040 11,858
VistaPrint* # 405,720 13,324
------------
Total Information technology 243,185
------------
- --------------------------------------------------------------------------------
MATERIALS--4.4%
- --------------------------------------------------------------------------------
Airgas 260,723 12,945
Ecolab 175,330 8,507
Pactiv* 473,464 11,756
Sigma-Aldrich 162,740 8,531
Temple-Inland 532,750 8,130
------------
Total Materials 49,869
------------
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--1.1%
- --------------------------------------------------------------------------------
NII Holdings* 331,260 12,561
------------
Total Telecommunication services 12,561
------------
- --------------------------------------------------------------------------------
UTILITIES--1.7%
- --------------------------------------------------------------------------------
PPL 312,210 11,558
Questar 181,550 7,429
------------
Total Utilities 18,987
------------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $1,150,808) 1,108,330
================================================================================
Value
Shares (000)
- --------------------------------------------------------------------------------
CASH EQUIVALENT--8.3%
- --------------------------------------------------------------------------------
BlackRock TempCash Fund
Institutional Shares,
2.266%** (1) 94,254,937 $ 94,255
- --------------------------------------------------------------------------------
TOTAL CASH EQUIVALENT
(COST $94,255) 94,255
================================================================================
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--105.7%
(COST $1,245,063) $ 1,202,585
================================================================================
Percentages are based on Net Assets of $1,137,780.***
* Non-income producing security.
** Rate shown is the 7-day effective yield as of September 30, 2008.
*** This number has been rounded to the nearest thousand.
# Security fully or partially on loan at September 30, 2008. The total value
of securities on loan at September 30, 2008 was $48,879,719. Certain of
these securities may have been sold prior to period end and are included
in receivable for investment securities sold on the Statement of Assets
and Liabilities.
(1) The Fund lends securities in its portfolio pursuant to a securities
lending agreement ("Lending Agreement") with Morgan Stanley. 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 in the BlackRock TempCash Fund, Institutional Shares,
a money market fund. All such investments are made at the risk of the
Fund. As such, the Fund is liable for investment losses. The Fund receives
an annual fee for its participation in the Lending Agreement based on
projected lending activity. A partial position of this security was
purchased with cash collateral received from securities lending. The total
value of such security at September 30, 2008 was $57,885,992.
ADR -- American Depositary Receipt
Cl -- Class
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2008 ANNUAL REPORT | 33
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER NEW ENTERPRISE FUND
September 30, 2008
Value
Shares (000)
- --------------------------------------------------------------------------------
COMMON STOCK--99.6%+
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--15.3%
- --------------------------------------------------------------------------------
GameStop, Cl A* 31,390 $ 1,074
Guess? 47,250 1,644
MGM Mirage* # 36,720 1,046
WMS Industries* 40,990 1,253
------------
Total Consumer discretionary 5,017
------------
- --------------------------------------------------------------------------------
ENERGY--3.5%
- --------------------------------------------------------------------------------
PetroHawk Energy* 31,020 671
Southwestern Energy* 15,650 478
------------
Total Energy 1,149
------------
- --------------------------------------------------------------------------------
HEALTH CARE--17.5%
- --------------------------------------------------------------------------------
Alexion Pharmaceuticals* 30,340 1,193
Genzyme* 15,580 1,260
Illumina* 25,120 1,018
Intuitive Surgical* 2,860 689
United Therapeutics* 14,770 1,554
------------
Total Health care 5,714
------------
- --------------------------------------------------------------------------------
INDUSTRIALS--11.7%
- --------------------------------------------------------------------------------
First Solar* 2,720 514
FTI Consulting* 21,190 1,531
Robert Half International 43,580 1,078
Sunpower, Cl A* # 9,840 698
------------
Total Industrials 3,821
------------
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--48.1%
- --------------------------------------------------------------------------------
Apple* 10,160 1,155
Ariba* 93,450 1,321
Atheros Communications* 38,720 913
F5 Networks* 53,880 1,260
Google, Cl A* 3,930 1,574
Juniper Networks* 43,050 907
Lam Research* 29,640 933
McAfee* 32,040 1,088
Micron Technology* 196,350 795
Omniture* 51,470 945
PMC - Sierra* 136,120 1,010
Polycom* 29,120 674
Value
Shares (000)
- --------------------------------------------------------------------------------
QUALCOMM 44,040 $ 1,892
Varian Semiconductor
Equipment Associates* 27,360 687
VistaPrint* 18,610 611
------------
Total Information technology 15,765
------------
- --------------------------------------------------------------------------------
MATERIALS--3.5%
- --------------------------------------------------------------------------------
Monsanto 11,560 1,144
------------
Total Materials 1,144
------------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $35,491) 32,610
================================================================================
- --------------------------------------------------------------------------------
CASH EQUIVALENT--5.1%
- --------------------------------------------------------------------------------
BlackRock TempCash Fund
Institutional Shares,
2.266%** (1) 1,683,227 1,683
- --------------------------------------------------------------------------------
TOTAL CASH EQUIVALENT
(COST $1,683) 1,683
================================================================================
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--104.7%
(COST $37,174) $ 34,293
================================================================================
Percentages are based on Net Assets of $32,759.***
* Non-income producing security.
** Rate shown is the 7-day effective yield as of September 30, 2008.
*** 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, 2008. The total value
of securities on loan at September 30, 2008 was $1,354,783. Certain of
these securities may have been sold prior to period end and are included
in receivable for investment securities sold on the Statement of Assets
and Liabilities.
(1) The Fund lends securities in its portfolio pursuant to a securities
lending agreement ("Lending Agreement") with Morgan Stanley. 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 in the BlackRock TempCash Fund, Institutional Shares,
a money market fund. All such investments are made at the risk of the
Fund. As such, the Fund is liable for investment losses. The Fund receives
an annual fee for its participation in the Lending Agreement based on
projected lending activity. This security was purchased with cash
collateral received from securities lending. The total value of such
security at September 30, 2008 was $1,683,227.
Cl -- Class
The accompanying notes are an integral part of the financial statements.
34 | TURNER FUNDS 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER SMALL CAP GROWTH FUND
September 30, 2008
Value
Shares (000)
- --------------------------------------------------------------------------------
COMMON STOCK--97.4%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--11.6%
- --------------------------------------------------------------------------------
Aeropostale* # 50,680 $ 1,627
Buckle # 21,270 1,181
Capella Education* 23,840 1,022
Chico's FAS* 249,120 1,363
Deckers Outdoor* 23,610 2,457
Gymboree* 59,280 2,105
Hibbett Sports* # 110,060 2,204
Interactive Data 108,100 2,726
LKQ* 105,090 1,783
Lululemon Athletica* # 88,630 2,041
Pulte Homes 62,690 876
True Religion Apparel* 90,920 2,350
Warnaco Group* 79,310 3,592
WMS Industries* 120,820 3,694
------------
Total Consumer discretionary 29,021
------------
- --------------------------------------------------------------------------------
CONSUMER STAPLES--3.2%
- --------------------------------------------------------------------------------
Darling International* 146,620 1,629
Flowers Foods 72,175 2,119
Green Mountain Coffee
Roasters* # 65,930 2,594
TreeHouse Foods* 51,020 1,515
------------
Total Consumer staples 7,857
------------
- --------------------------------------------------------------------------------
ENERGY--7.7%
- --------------------------------------------------------------------------------
Arena Resources* 52,900 2,055
CARBO Ceramics 27,570 1,423
Complete Production
Services* 79,160 1,594
Concho Resources* 78,860 2,177
Core Laboratories 24,820 2,515
EXCO Resources* 86,290 1,408
Foundation Coal Holdings 22,760 810
Goodrich Petroleum* # 42,450 1,850
Lufkin Industries 24,500 1,944
Penn Virginia 35,330 1,888
Willbros Group* 56,020 1,485
------------
Total Energy 19,149
------------
Value
Shares (000)
- --------------------------------------------------------------------------------
FINANCIALS--5.3%
- --------------------------------------------------------------------------------
Digital Realty Trust # 84,590 $ 3,997
Dime Community Bancshares 72,499 1,103
Extra Space Storage 138,115 2,121
Home Properties 32,470 1,882
PrivateBancorp 63,180 2,632
Riskmetrics Group* # 81,490 1,595
------------
Total Financials 13,330
------------
- --------------------------------------------------------------------------------
HEALTH CARE--24.6%
- --------------------------------------------------------------------------------
Acorda Therapeutics* 74,800 1,784
Alexion Pharmaceuticals* 76,528 3,007
Amedisys* # 73,600 3,582
Auxilium Pharmaceuticals* # 60,070 1,946
Cougar Biotechnology* 9,356 312
Eclipsys* 91,050 1,907
Haemonetics* 63,270 3,905
Icon ADR* 102,182 3,908
Myriad Genetics* 43,120 2,798
NuVasive* # 69,200 3,414
Onyx Pharmaceuticals* 40,100 1,451
OSI Pharmaceuticals* 59,760 2,946
Parexel International* 171,150 4,905
Perrigo 82,940 3,190
Psychiatric Solutions* # 72,140 2,738
Rigel Pharmaceuticals* # 68,730 1,605
Savient Pharmaceuticals* # 50,002 745
Thoratec* 58,328 1,531
United Therapeutics* 45,620 4,798
Universal Health
Services, Cl B 15,303 857
West Pharmaceutical Services 72,300 3,530
Wright Medical Group* 129,270 3,935
XenoPort* 51,450 2,495
------------
Total Health care 61,289
------------
- --------------------------------------------------------------------------------
INDUSTRIALS--18.0%
- --------------------------------------------------------------------------------
Actuant, Cl A 70,930 1,790
Aecom Technology* 94,220 2,303
Chart Industries* 48,540 1,386
TURNER FUNDS 2008 ANNUAL REPORT | 35
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER SMALL CAP GROWTH FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
Clean Harbors* 38,850 $ 2,624
Energy Conversion Devices* 21,150 1,232
ESCO Technologies* 34,400 1,657
Genesee & Wyoming, Cl A* 41,030 1,539
Huron Consulting Group* 53,910 3,072
JA Solar Holdings ADR* 77,290 818
Kforce* 170,870 1,745
Landstar System 60,360 2,659
Lindsay # 29,110 2,118
Mobile Mini* # 104,406 2,018
MPS Group* 129,810 1,308
Navigant Consulting* 92,250 1,835
Orbital Sciences* 85,420 2,048
RBC Bearings* 39,950 1,346
Teledyne Technologies* 46,430 2,654
Tetra Tech* 96,080 2,312
Valmont Industries 20,690 1,711
Wabtec 45,130 2,312
Waste Connections* 48,040 1,648
Woodward Governor 80,220 2,829
------------
Total Industrials 44,964
------------
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--20.9%
- --------------------------------------------------------------------------------
Ariba* 140,240 1,982
AsiaInfo Holdings* 118,040 1,084
Atheros Communications* 113,720 2,682
Cavium Networks* # 82,348 1,160
Concur Technologies* # 72,960 2,791
DTS* 38,480 1,071
F5 Networks* 88,460 2,068
Gartner* 44,241 1,003
Interwoven* 107,920 1,524
Microsemi* 121,350 3,092
Monolithic Power Systems* 137,020 2,380
Net 1 UEPS Technologies* 90,710 2,026
Novellus Systems* 104,750 2,057
Omniture* 152,607 2,802
Value
Shares (000)
- --------------------------------------------------------------------------------
Plexus* 107,830 $ 2,232
PMC - Sierra* 417,650 3,099
Polycom* 107,230 2,480
Riverbed Technology* 106,150 1,329
Sybase* 99,030 3,032
Taleo, Cl A* 84,280 1,676
TiVo* # 159,340 1,166
Verigy* 55,060 896
VistaPrint* # 104,630 3,436
Vocus* 78,501 2,666
Websense* 107,950 2,413
------------
Total Information technology 52,147
------------
- --------------------------------------------------------------------------------
MATERIALS--4.2%
- --------------------------------------------------------------------------------
Cabot 42,820 1,361
Century Aluminum* 45,420 1,258
Compass Minerals
International 33,660 1,763
Koppers Holdings 49,110 1,837
Olin 58,190 1,129
Solutia* 81,280 1,138
Temple-Inland 122,530 1,870
------------
Total Materials 10,356
------------
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--1.0%
- --------------------------------------------------------------------------------
NTELOS Holdings 36,490 981
Premiere Global Services* 114,190 1,606
------------
Total Telecommunication services 2,587
------------
- --------------------------------------------------------------------------------
UTILITIES--0.9%
- --------------------------------------------------------------------------------
ITC Holdings 41,250 2,135
------------
Total Utilities 2,135
------------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $237,239) 242,835
================================================================================
36 | TURNER FUNDS 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER SMALL CAP GROWTH FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
CASH EQUIVALENT--15.6%
- --------------------------------------------------------------------------------
BlackRock TempCash Fund
Institutional Shares,
2.266%** (1) 39,009,993 $ 39,010
- --------------------------------------------------------------------------------
TOTAL CASH EQUIVALENT
(COST $39,010) 39,010
================================================================================
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--113.0%
(COST $276,249) $ 281,845
================================================================================
Percentages are based on Net Assets of $249,434.***
* Non-income producing security.
** Rate shown is the 7-day effective yield as of September 30, 2008.
*** This number has been rounded to the nearest thousand.
# Security fully or partially on loan at September 30, 2008. The total value
of securities on loan at September 30, 2008 was $33,164,055. Certain of
these securities may have been sold prior to period end and are included
in receivable for investment securities sold on the Statement of Assets
and Liabilities.
(1) The Fund lends securities in its portfolio pursuant to a securities
lending agreement ("Lending Agreement") with Morgan Stanley. 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 in the BlackRock TempCash Fund, Institutional Shares,
a money market fund. All such investments are made at the risk of the
Fund. As such, the Fund is liable for investment losses. The Fund receives
an annual fee for its participation in the Lending Agreement based on
projected lending activity. A partial position of this security was
purchased with cash collateral received from securities lending. The total
value of such security at September 30, 2008 was $36,089,181.
ADR -- American Depositary Receipt
Cl -- Class
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2008 ANNUAL REPORT | 37
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER INTERNATIONAL CORE GROWTH FUND
September 30, 2008
Value
Shares (000)
- --------------------------------------------------------------------------------
COMMON STOCK--95.2%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--6.2%
- --------------------------------------------------------------------------------
Adidas^ 900 $ 48
Grupo Televisa 13,944 60
LVMH Moet Hennessy
Louis Vuitton^ 533 47
Panasonic^ 3,000 52
------------
Total Consumer discretionary 207
------------
- --------------------------------------------------------------------------------
CONSUMER STAPLES--9.7%
- --------------------------------------------------------------------------------
Carlsberg, Cl B^ 507 39
Diageo^ 2,370 40
Nestle^ 2,128 92
Reckitt Benckiser Group^ 1,030 50
Shiseido^ 2,300 51
Shoppers Drug Mart 1,070 52
------------
Total Consumer staples 324
------------
- --------------------------------------------------------------------------------
ENERGY--13.6%
- --------------------------------------------------------------------------------
Core Laboratories 450 45
Enbridge 1,930 71
Petroleo Brasileiro 3,190 70
Schlumberger 950 74
Tenaris^ 3,085 58
Transocean* 490 54
Tullow Oil^ 3,420 44
Weatherford International* 1,540 39
------------
Total Energy 455
------------
- --------------------------------------------------------------------------------
FINANCIALS--13.8%
- --------------------------------------------------------------------------------
Admiral Group^ 3,570 66
Bank of Nova Scotia 1,736 78
Credit Suisse Group^ 1,528 71
DnB NOR^ 3,875 30
Intesa Sanpaolo^ 10,630 59
Mitsui Fudosan^ 1,830 35
Standard Chartered^ 2,508 62
Unibanco - Uniao de
Bancos Brasileiros 5,893 59
------------
Total Financials 460
------------
Value
Shares (000)
- --------------------------------------------------------------------------------
HEALTH CARE--8.8%
- --------------------------------------------------------------------------------
Alcon 430 $ 69
CSL^ 2,420 73
Fresenius Medical Care^ 1,347 70
Icon ADR* 1,140 44
Novartis^ 700 37
------------
Total Health care 293
------------
- --------------------------------------------------------------------------------
INDUSTRIALS--15.1%
- --------------------------------------------------------------------------------
ABB^ 3,140 61
Alstom^ 640 49
BAE Systems^ 7,320 54
Canadian National Railway 1,574 75
Experian^ 5,962 39
Hamburger Hafen und Logistik^ 790 47
Kuehne + Nagel International^ 585 39
Ritchie Bros. Auctioneers 2,088 50
Siemens^ 390 36
Vestas Wind Systems*^ 615 54
------------
Total Industrials 504
------------
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--9.7%
- --------------------------------------------------------------------------------
ASML Holding^ 2,390 42
AU Optronics^ 53,000 60
Autonomy*^ 1,790 33
Nintendo^ 180 76
Samsung Electronics^ 130 60
STMicroelectronics^ 5,125 52
------------
Total Information technology 323
------------
- --------------------------------------------------------------------------------
MATERIALS--12.5%
- --------------------------------------------------------------------------------
Air Liquide^ 440 48
ArcelorMittal^ 1,044 53
BHP Billiton^ 1,940 50
CRH^ 2,500 53
DC Chemical^ 180 49
Goldcorp 1,320 42
Potash Corp. of Saskatchewan 540 70
Syngenta^ 240 51
------------
Total Materials 416
------------
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--1.9%
- --------------------------------------------------------------------------------
Mobile Telesystems 1,160 65
------------
Total Telecommunication services 65
------------
38 | TURNER FUNDS 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER INTERNATIONAL CORE GROWTH FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
UTILITIES--3.9%
- --------------------------------------------------------------------------------
Iberdrola Renovables*^ 12,716 $ 54
International Power^ 11,632 75
------------
Total Utilities 129
------------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $3,727) 3,176
================================================================================
- --------------------------------------------------------------------------------
PREFERRED STOCK--3.7%
- --------------------------------------------------------------------------------
CONSUMER STAPLES--1.2%
- --------------------------------------------------------------------------------
Cia Brasileira de Distribuicao
Grupo Pao de Acucar 2,329 40
------------
Total Consumer staples 40
------------
- --------------------------------------------------------------------------------
UTILITIES--2.5%
- --------------------------------------------------------------------------------
Cia Energetica de Minas Gerais 4,210 83
------------
Total Utilities 83
------------
- --------------------------------------------------------------------------------
TOTAL PREFERRED STOCK
(COST $147) 123
================================================================================
- --------------------------------------------------------------------------------
CASH EQUIVALENT--1.6%
- --------------------------------------------------------------------------------
BlackRock TempCash Fund
Institutional Shares,
2.266%** 53,131 53
- --------------------------------------------------------------------------------
TOTAL CASH EQUIVALENT
(COST $53) 53
================================================================================
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--100.5%
(COST $3,927) $ 3,352
================================================================================
Percentages are based on Net Assets of $3,335.***
* Non-income producing security.
** Rate shown is the 7-day effective yield as of September 30, 2008.
*** This number has been rounded to the nearest thousand.
^ Security is fair valued using methods determined in good faith by the Fair
Value Committee of the Board of Trustees. As of September 30, 2008, the
total market value of this security was $2,159, representing 64.7% of net
assets.***
ADR -- American Depositary Receipt
Cl -- Class
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
COUNTRY ALLOCATION AS OF 9/30/08+
- --------------------------------------------------------------------------------
Switzerland 14.1%
Canada 13.1
United Kingdom 12.6
Brazil 7.5
United States 6.5
Japan 6.4
Germany 6.0
France 4.3
Ireland 4.1
Australia 3.7
Luxembourg 3.3
South Korea 3.3
Denmark 2.8
Netherlands 2.6
Russia 1.9
Mexico 1.8
Taiwan 1.8
Italy 1.7
Spain 1.6
Norway 0.9
- --------------------------------------------------------------------------------
+ Percentages are based on total investments.
TURNER FUNDS 2008 ANNUAL REPORT | 39
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER MIDCAP EQUITY FUND
September 30, 2008
Value
Shares (000)
- --------------------------------------------------------------------------------
COMMON STOCK--92.8%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--10.6%
- --------------------------------------------------------------------------------
Burger King Holdings 270 $ 7
Dollar Tree* 220 8
DreamWorks Animation SKG, Cl A* 250 8
H&R Block 410 9
Hasbro 180 6
Jarden* 260 6
O'Reilly Automotive* 110 3
PetSmart 290 7
------------
Total Consumer discretionary 54
------------
- --------------------------------------------------------------------------------
CONSUMER STAPLES--6.4%
- --------------------------------------------------------------------------------
Alberto-Culver, Cl B 320 9
Church & Dwight 160 10
Constellation Brands, Cl A* 340 7
Herbalife 180 7
------------
Total Consumer staples 33
------------
- --------------------------------------------------------------------------------
ENERGY--5.6%
- --------------------------------------------------------------------------------
Alpha Natural Resources* 50 3
FMC Technologies* 80 4
Frontier Oil 190 3
Mariner Energy* 220 4
Penn Virginia 110 6
PetroHawk Energy* 130 3
Pioneer Natural Resources 50 3
Superior Energy Services* 110 3
------------
Total Energy 29
------------
- --------------------------------------------------------------------------------
FINANCIALS--12.2%
- --------------------------------------------------------------------------------
Alexandria Real Estate Equities 75 8
Arch Capital Group* 120 9
Douglas Emmett 310 7
Essex Property Trust 50 6
Hanover Insurance Group 160 7
Keycorp 310 4
Nationwide Health Properties 180 7
New York Community Bancorp 240 4
Rayonier 150 7
SLM* 325 4
------------
Total Financials 63
------------
Value
Shares (000)
- --------------------------------------------------------------------------------
HEALTH CARE--11.8%
- --------------------------------------------------------------------------------
Cephalon* 110 $ 9
Covance* 70 6
Hill-Rom Holdings 290 9
King Pharmaceuticals* 520 5
Omnicare 310 9
OSI Pharmaceuticals* 60 3
Perrigo 180 7
Teleflex 100 6
Varian Medical Systems* 120 7
------------
Total Health care 61
------------
- --------------------------------------------------------------------------------
INDUSTRIALS--20.6%
- --------------------------------------------------------------------------------
Ametek 170 7
Armstrong World Industries* 225 6
Brink's 160 10
Copart* 180 7
Corrections Corp. of America* 260 6
Covanta Holding* 330 8
FTI Consulting* 85 6
Kansas City Southern* 150 7
Kirby* 100 4
Lincoln Electric Holdings 90 6
Republic Services, Cl A 290 9
Roper Industries 135 8
Sunpower, Cl A* 50 3
Thomas & Betts* 120 5
Trinity Industries 170 4
URS* 130 5
Wabtec 100 5
------------
Total Industrials 106
------------
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--17.3%
- --------------------------------------------------------------------------------
Alliance Data Systems* 215 14
Amphenol, Cl A 95 4
BMC Software* 185 5
Convergys* 340 5
Global Payments 185 8
Harris 90 4
Itron* 90 8
McAfee* 270 9
Novell* 995 5
40 | TURNER FUNDS 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER MIDCAP EQUITY FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
QLogic* 380 $ 6
Sybase* 405 13
Synopsys* 420 8
------------
Total Information technology 89
------------
- --------------------------------------------------------------------------------
MATERIALS--1.8%
- --------------------------------------------------------------------------------
Celanese, Ser A 85 2
Sigma-Aldrich 130 7
------------
Total Materials 9
------------
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--1.2%
- --------------------------------------------------------------------------------
SBA Communications, Cl A* 240 6
------------
Total Telecommunication services 6
------------
- --------------------------------------------------------------------------------
UTILITIES--5.3%
- --------------------------------------------------------------------------------
Integrys Energy Group 160 8
MDU Resources Group 140 4
NSTAR 210 7
UGI 310 8
------------
Total Utilities 27
------------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $499) 477
================================================================================
- --------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY--4.5%
- --------------------------------------------------------------------------------
iShares Russell Midcap Index Fund 280 23
- --------------------------------------------------------------------------------
TOTAL REGISTERED INVESTMENT
COMPANY (COST $27) 23
================================================================================
- --------------------------------------------------------------------------------
CASH EQUIVALENT--2.1%
- --------------------------------------------------------------------------------
BlackRock TempCash Fund
Institutional Shares,
2.266%** 11,070 11
- --------------------------------------------------------------------------------
TOTAL CASH EQUIVALENT
(COST $11) 11
================================================================================
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--99.4%
(COST $537) $ 511
================================================================================
Percentages are based on Net Assets of $514.***
* Non-income producing security.
** Rate shown is the 7-day effective yield as of September 30, 2008.
*** This number has been rounded to the nearest thousand.
Cl -- Class
Ser -- Series
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2008 ANNUAL REPORT | 41
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER QUANTITATIVE BROAD MARKET EQUITY FUND
September 30, 2008
Value
Shares (000)
- --------------------------------------------------------------------------------
COMMON STOCK--99.3%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--11.0%
- --------------------------------------------------------------------------------
Comcast, Cl A 240 $ 5
Foot Locker 310 5
Goodyear Tire & Rubber* 220 3
Home Depot 160 4
Jarden* 190 4
Leggett & Platt 230 5
McDonald's 70 4
O'Reilly Automotive* 150 4
Phillips-Van Heusen 120 5
Pulte Homes 380 5
Target 80 4
Time Warner 270 4
Walt Disney 130 4
Wyndham Worldwide 250 4
------------
Total Consumer discretionary 60
------------
- --------------------------------------------------------------------------------
CONSUMER STAPLES--11.0%
- --------------------------------------------------------------------------------
Alberto-Culver, Cl B 150 4
Coca-Cola 80 4
Constellation Brands, Cl A* 220 5
Costco Wholesale 60 4
CVS/Caremark 110 4
General Mills 70 5
JM Smucker 70 3
Kraft Foods, Cl A 150 5
PepsiAmericas 220 5
PepsiCo 60 4
Philip Morris International 60 3
Procter & Gamble 130 9
Wal-Mart Stores 80 5
------------
Total Consumer staples 60
------------
- --------------------------------------------------------------------------------
ENERGY--12.5%
- --------------------------------------------------------------------------------
Chevron 90 7
Devon Energy 40 4
Enterprise Products Partners LP 120 3
Exxon Mobil 240 19
Kinder Morgan Management* 70 3
Mariner Energy* 140 3
Murphy Oil 70 5
Southern Union 190 4
Sunoco 100 4
Tesoro 210 3
Value
Shares (000)
- --------------------------------------------------------------------------------
Valero Energy 130 $ 4
Western Refining 340 3
Whiting Petroleum* 40 3
Williams 130 3
------------
Total Energy 68
------------
- --------------------------------------------------------------------------------
FINANCIALS--17.5%
- --------------------------------------------------------------------------------
Bank of America 270 10
Charles Schwab 180 5
Citigroup 250 5
CNA Financial 180 5
Entertainment Properties Trust 80 4
First American 150 4
Hanover Insurance Group 110 5
JPMorgan Chase 190 9
Keycorp 360 4
Lincoln National 80 3
NASDAQ OMX Group* 140 4
Northern Trust 50 4
PNC Financial Services Group 50 4
Regions Financial 420 4
Reinsurance Group of America, Cl A 100 5
Senior Housing Properties Trust 200 5
Tree.com* 1 --
Unum Group 140 4
US Bancorp 140 5
Wells Fargo 180 7
------------
Total Financials 96
------------
- --------------------------------------------------------------------------------
HEALTH CARE--14.1%
- --------------------------------------------------------------------------------
Abbott Laboratories 70 4
Amgen* 60 4
Bio-Rad Laboratories, Cl A* 40 4
Bristol-Myers Squibb 230 5
Brookdale Senior Living 180 4
Charles River Laboratories
International* 70 4
Gilead Sciences* 60 3
Johnson & Johnson 120 8
Medco Health Solutions* 100 5
Mylan* 410 5
PerkinElmer 110 3
Pfizer 330 6
Psychiatric Solutions* 140 5
42 | TURNER FUNDS 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER QUANTITATIVE BROAD MARKET EQUITY FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
Quest Diagnostics 100 $ 5
Teleflex 80 5
Thermo Fisher Scientific* 60 3
VCA Antech* 150 4
------------
Total Health care 77
------------
- --------------------------------------------------------------------------------
INDUSTRIALS--10.5%
- --------------------------------------------------------------------------------
BE Aerospace* 220 3
Continental Airlines, Cl B* 200 3
Delta Air Lines* 540 4
General Electric 440 11
Kennametal 130 4
Monster Worldwide* 250 4
Northrop Grumman 70 4
Pentair 150 5
Southwest Airlines 260 4
Thomas & Betts* 120 5
Timken 200 6
URS* 120 4
------------
Total Industrials 57
------------
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--13.3%
- --------------------------------------------------------------------------------
Avnet* 200 5
Cisco Systems* 210 5
EMC* 300 3
Google, Cl A* 10 4
Hewlett-Packard 120 5
Ingram Micro, Cl A* 290 5
Intel 200 4
International Business Machines 60 7
LSI* 680 4
Microsoft 510 14
NCR* 190 4
Nuance Communications* 340 4
Xerox 300 3
Zebra Technologies, Cl A* 180 5
------------
Total Information technology 72
------------
- --------------------------------------------------------------------------------
MATERIALS--3.4%
- --------------------------------------------------------------------------------
Cabot 180 6
International Paper 170 4
MeadWestvaco 170 4
Valspar 190 4
------------
Total Materials 18
------------
Value
Shares (000)
- --------------------------------------------------------------------------------
UTILITIES--6.0%
- --------------------------------------------------------------------------------
Alliant Energy 120 $ 4
Ameren 110 4
American Water Works 250 5
CMS Energy 340 4
Hawaiian Electric Industries 220 7
Sierra Pacific Resources 380 4
Wisconsin Energy 110 5
------------
Total Utilities 33
------------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $577) 541
================================================================================
- --------------------------------------------------------------------------------
CASH EQUIVALENT--0.5%
- --------------------------------------------------------------------------------
BlackRock TempCash Fund
Institutional Shares,
2.266%** 2,480 2
- --------------------------------------------------------------------------------
TOTAL CASH EQUIVALENT
(COST $2) 2
================================================================================
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--99.8%
(COST $579) $ 543
================================================================================
Percentages are based on Net Assets of $544.***
* Non-income producing security.
** Rate shown is the 7-day effective yield as of September 30, 2008.
*** This number has been rounded to the nearest thousand.
Cl -- Class
LP -- Limited Partnership
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2008 ANNUAL REPORT | 43
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER SMALL CAP EQUITY FUND
September 30, 2008
Value
Shares (000)
- --------------------------------------------------------------------------------
COMMON STOCK--95.3%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--11.8%
- --------------------------------------------------------------------------------
99 Cents Only Stores* 7,060 $ 78
Aaron Rents 11,640 315
Bob Evans Farms 9,150 250
Buffalo Wild Wings* # 3,810 153
California Pizza Kitchen* 12,530 161
Career Education* 6,840 112
Childrens Place Retail Stores* 5,330 178
Jo-Ann Stores* 11,950 251
JOS A Bank Clothiers* # 5,580 188
Lions Gate Entertainment* 24,420 222
Matthews International, Cl A 4,500 228
NetFlix* 8,400 259
Polaris Industries # 4,360 198
Zale* # 10,300 258
------------
Total Consumer discretionary 2,851
------------
- --------------------------------------------------------------------------------
CONSUMER STAPLES--4.8%
- --------------------------------------------------------------------------------
BJ's Wholesale Club* 4,750 185
Chiquita Brands International* # 15,770 249
Elizabeth Arden* 12,350 242
Pantry* 11,960 254
TreeHouse Foods* 8,120 241
------------
Total Consumer staples 1,171
------------
- --------------------------------------------------------------------------------
ENERGY--6.0%
- --------------------------------------------------------------------------------
BPZ Resources* 13,830 238
Dril-Quip* 2,670 116
Goodrich Petroleum* # 6,090 265
International Coal Group* 33,370 208
Parker Drilling* 28,740 231
Petroleum Development* 3,690 164
Trico Marine Services* 13,130 224
------------
Total Energy 1,446
------------
- --------------------------------------------------------------------------------
FINANCIALS--18.4%
- --------------------------------------------------------------------------------
BioMed Realty Trust 16,650 440
Cash America International 7,660 276
Ezcorp, Cl A* 18,630 350
Investors Bancorp* 15,080 227
IPC Holdings 9,680 292
Omega Healthcare Investors 22,220 437
Pico Holdings* 2,960 106
Potlatch 7,890 366
ProAssurance* 4,051 227
Value
Shares (000)
- --------------------------------------------------------------------------------
Prosperity Bancshares # 9,170 $ 312
Signature Bank* 8,730 305
South Financial Group 17,240 126
SVB Financial Group* 6,560 380
Tanger Factory Outlet Centers 5,770 253
Texas Capital Bancshares* 9,180 191
UCBH Holdings 22,770 146
UMB Financial 290 15
------------
Total Financials 4,449
------------
- --------------------------------------------------------------------------------
HEALTH CARE--12.3%
- --------------------------------------------------------------------------------
Amedisys* 4,790 233
Analogic 3,596 179
Conmed* 11,040 353
HealthExtras* 10,070 263
Invacare 9,240 223
Kendle International* # 5,270 236
Medicines* 10,780 250
Natus Medical* 11,770 267
OSI Pharmaceuticals* 2,630 130
Rigel Pharmaceuticals* 9,700 226
SonoSite* # 7,500 235
STERIS 9,860 371
------------
Total Health care 2,966
------------
- --------------------------------------------------------------------------------
INDUSTRIALS--15.9%
- --------------------------------------------------------------------------------
Aerovironment* # 7,000 224
Atlas Air Worldwide Holdings* 5,390 217
AZZ* 6,580 272
Clean Harbors* 3,690 249
EMCOR Group* 10,070 265
Energy Conversion Devices* 980 57
EnPro Industries* 5,920 220
Genesee & Wyoming, Cl A* 7,060 265
Kaydon 4,660 210
Knight Transportation # 8,520 145
Moog, Cl A* 5,760 247
Orbital Sciences* 10,190 244
Team* 7,590 274
Teledyne Technologies* 5,160 295
Titan International 5,455 116
Toro 5,920 245
Werner Enterprises # 13,960 303
------------
Total Industrials 3,848
------------
44 | TURNER FUNDS 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER SMALL CAP EQUITY FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--12.6%
- --------------------------------------------------------------------------------
Avid Technology* # 8,440 $ 203
China Security & Surveillance
Technology* # 17,670 245
Cybersource* 11,420 184
Exar* 30,420 233
Interwoven* 17,490 247
Mantech International, Cl A* 3,350 199
Mentor Graphics* 17,020 193
Microsemi* 11,740 299
Nice Systems ADR* 5,870 160
Plexus* 9,140 189
Silicon Laboratories* 6,210 191
Take-Two Interactive Software 16,330 268
Verigy* 13,040 212
Websense* 9,990 223
------------
Total Information technology 3,046
------------
- --------------------------------------------------------------------------------
MATERIALS--6.3%
- --------------------------------------------------------------------------------
Calgon Carbon* # 13,760 280
Koppers Holdings 4,600 172
Minerals Technologies 3,580 213
PAN American Silver* # 6,860 153
Rock-Tenn, Cl A 4,900 196
Sensient Technologies 10,640 299
Solutia* 16,030 224
------------
Total Materials 1,537
------------
- --------------------------------------------------------------------------------
UTILITIES--7.2%
- --------------------------------------------------------------------------------
Avista 15,950 346
ITC Holdings 5,520 286
New Jersey Resources 10,095 362
Northwest Natural Gas 4,880 254
Piedmont Natural Gas # 8,340 267
Southwest Gas 7,800 236
------------
Total Utilities 1,751
------------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $22,475) 23,065
================================================================================
Value
Shares (000)
- --------------------------------------------------------------------------------
CASH EQUIVALENT--17.6%
- --------------------------------------------------------------------------------
BlackRock TempCash Fund
Institutional Shares,
2.266%** (1) 4,263,937 $ 4,264
- --------------------------------------------------------------------------------
TOTAL CASH EQUIVALENT
(COST $4,264) 4,264
================================================================================
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--112.9%
(COST $26,739) $ 27,329
================================================================================
Percentages are based on Net Assets of $24,208.***
* Non-income producing security.
** Rate shown is the 7-day effective yield as of September 30, 2008.
*** This number has been rounded to the nearest thousand.
# Security fully or partially on loan at September 30, 2008. The total
value of securities on loan at September 30, 2008 was $3,012,966. Certain
of these securities may have been sold prior to period end and are
included in receivable for investment securities sold on the Statement of
Assets and Liabilities.
(1) The Fund lends securities in its portfolio pursuant to a securities
lending agreement ("Lending Agreement") with Morgan Stanley. 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 in the BlackRock TempCash Fund, Institutional Shares,
a money market fund. All such investments are made at the risk of the
Fund. As such, the Fund is liable for investment losses. The Fund receives
an annual fee for its participation in the Lending Agreement based on
projected lending activity. A partial position of this security was
purchased with cash collateral received from securities lending. The total
value of such security at September 30, 2008 was $3,238,598.
ADR -- American Depositary Receipt
Cl -- Class
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2008 ANNUAL REPORT | 45
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER QUANTITATIVE LARGE CAP VALUE FUND
September 30, 2008
Value
Shares (000)
- --------------------------------------------------------------------------------
COMMON STOCK--99.8%+
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--7.6%
- --------------------------------------------------------------------------------
Comcast, Cl A 400 $ 8
Home Depot 300 8
J.C. Penney 130 4
Johnson Controls 130 4
Leggett & Platt 180 4
Liberty Media - Interactive* 290 4
Lowe's 300 7
McDonald's 90 5
Time Warner 490 6
Walt Disney 250 8
------------
Total Consumer discretionary 58
------------
- --------------------------------------------------------------------------------
CONSUMER STAPLES--9.5%
- --------------------------------------------------------------------------------
Coca-Cola 90 5
Constellation Brands, Cl A* 390 8
General Mills 70 5
Kimberly-Clark 150 10
Kraft Foods, Cl A 150 5
Procter & Gamble 320 22
Reynolds American 150 7
Walgreen 130 4
Wal-Mart Stores 110 7
------------
Total Consumer staples 73
------------
- --------------------------------------------------------------------------------
ENERGY--15.9%
- --------------------------------------------------------------------------------
Anadarko Petroleum 70 3
Apache 60 6
Chevron 290 24
ConocoPhillips 200 15
Exxon Mobil 550 43
Marathon Oil 280 11
Pioneer Natural Resources 90 5
Spectra Energy 420 10
XTO Energy 90 4
------------
Total Energy 121
------------
- --------------------------------------------------------------------------------
FINANCIALS--29.0%
- --------------------------------------------------------------------------------
Bank of America 760 27
Chubb 160 9
Citigroup 1,000 20
Genworth Financial, Cl A 1,010 9
Hudson City Bancorp 510 9
JPMorgan Chase 600 28
Value
Shares (000)
- --------------------------------------------------------------------------------
Marsh & McLennan 200 $ 6
Merrill Lynch 270 7
MetLife 160 9
People's United Financial 460 9
PNC Financial Services Group 60 4
Rayonier 150 7
Regency Centers 170 11
Travelers 120 5
Unum Group 420 11
US Bancorp 350 13
Vornado Realty Trust 120 11
Wells Fargo 680 26
------------
Total Financials 221
------------
- --------------------------------------------------------------------------------
HEALTH CARE--11.7%
- --------------------------------------------------------------------------------
AmerisourceBergen, Cl A 200 8
Amgen* 140 8
Boston Scientific* 710 9
Bristol-Myers Squibb 580 12
Johnson & Johnson 190 13
Pfizer 890 16
Thermo Fisher Scientific* 170 9
Watson Pharmaceuticals* 200 6
Wyeth 220 8
------------
Total Health care 89
------------
- --------------------------------------------------------------------------------
INDUSTRIALS--10.7%
- --------------------------------------------------------------------------------
FedEx 90 7
General Dynamics 90 7
General Electric 1,310 33
ITT 180 10
Raytheon 150 8
Southwest Airlines 380 6
United Technologies 120 7
Waste Management 120 4
------------
Total Industrials 82
------------
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--2.9%
- --------------------------------------------------------------------------------
CA 190 4
Cisco Systems* 410 9
EMC* 400 5
Intel 220 4
------------
Total Information technology 22
------------
46 | TURNER FUNDS 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER QUANTITATIVE LARGE CAP VALUE FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
MATERIALS--3.4%
- --------------------------------------------------------------------------------
Ball 100 $ 4
Dow Chemical 130 4
EI Du Pont de Nemours 90 4
Freeport-McMoRan
Copper & Gold 50 3
MeadWestvaco 180 4
Sigma-Aldrich 130 7
------------
Total Materials 26
------------
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--2.6%
- --------------------------------------------------------------------------------
AT&T 550 15
Verizon Communications 150 5
------------
Total Telecommunication services 20
------------
- --------------------------------------------------------------------------------
UTILITIES--6.5%
- --------------------------------------------------------------------------------
Dominion Resources 290 12
Duke Energy 270 5
Integrys Energy Group 190 9
MDU Resources Group 190 6
Northeast Utilities 340 9
Southern 230 9
------------
Total Utilities 50
------------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $768) 762
================================================================================
- --------------------------------------------------------------------------------
CASH EQUIVALENT--0.2%
- --------------------------------------------------------------------------------
BlackRock TempCash Fund
Institutional Shares, 2.266%** 1,359 1
- --------------------------------------------------------------------------------
TOTAL CASH EQUIVALENT
(COST $1) 1
================================================================================
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--100.0%
(COST $769) $ 763
================================================================================
Percentages are based on Net Assets of $763.***
* Non-income producing security.
** Rate shown is the 7-day effective yield as of September 30, 2008.
*** 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.
Cl -- Class
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2008 ANNUAL REPORT | 47
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES (000)
September 30, 2008
Turner Turner Turner
Concentrated Core Growth Core Growth
Growth Fund Fund 130/30 Fund
- ----------------------------------------------------------------------------------------------------
Assets:
- ----------------------------------------------------------------------------------------------------
Investment securities, at cost $ 48,287 $ 693,773 $ 1,138
Foreign currency, at cost -- -- --
====================================================================================================
Investment securities, at value $ 43,894* $ 641,825* $ 1,010
Foreign currency, at value -- -- --
Receivable for capital shares sold 32 953 --
Receivable for investment securities sold -- 3,243 32
Receivable from investment adviser -- -- 10
Receivable for dividend income 35 693 1
- ----------------------------------------------------------------------------------------------------
Total assets 43,961 646,714 1,053
====================================================================================================
Liabilities:
Securities sold short, at proceeds -- -- 262
====================================================================================================
Securities sold short, at value -- -- 237
Obligation to return securities lending collateral 1,267 10,818 --
Payable for capital shares redeemed 77 1,300 --
Payable due to shareholder servicing 20 129 --
Payable due to investment adviser 5 256 --
Payable due to administrator 5 77 --
Payable due to chief compliance officer 1 10 --
Payable for investment securities purchased -- 13,320 34
Payable to custodian -- -- --
Payable due to distributor -- -- --
Dividends payable on securities sold short (Note 2) -- -- 1
Other accrued expenses 5 29 12
- ----------------------------------------------------------------------------------------------------
Total liabilities 1,380 25,939 284
- ----------------------------------------------------------------------------------------------------
Net assets $ 42,581 $ 620,775 $ 769
====================================================================================================
*Includes market value of securities on loan $ 1,076 $ 8,328 $ --
====================================================================================================
Net assets:
Portfolio capital of Institutional Class Shares $ -- $ 446,460 $ 916
Portfolio capital of Investor Class Shares 207,594 347,154 3
Portfolio capital of Retirement Class Shares -- -- --
Undistributed net investment income/(Distributions
in excess of net investment income) -- 1,519 --
Accumulated net realized gain (loss) on investments,
securities sold short and foreign currency
transactions (160,620) (122,410) (47)
Net unrealized appreciation (depreciation) on
investments and securities sold short (4,393) (51,948) (103)
Net unrealized depreciation on foreign currencies
and translation of other assets and liabilities
denominated in foreign currencies -- -- --
- ----------------------------------------------------------------------------------------------------
Net assets $ 42,581 $ 620,775 $ 769
====================================================================================================
Outstanding shares of beneficial interest(1)
Institutional Class Shares(2) -- 34,601,263 91,761
- ----------------------------------------------------------------------------------------------------
Outstanding shares of beneficial interest(1)
Investor Class Shares(2) 6,705,484 25,206,022 350
- ----------------------------------------------------------------------------------------------------
Outstanding shares of beneficial interest(1)
Retirement Class Shares(2) -- -- --
- ----------------------------------------------------------------------------------------------------
Net Assets -- Institutional Class Shares(2) $ -- $360,083,127 $ 766,575
- ----------------------------------------------------------------------------------------------------
Net Assets -- Investor Class Shares(2) $ 42,581,452 $260,692,300 $ 2,923
- ----------------------------------------------------------------------------------------------------
Net Assets -- Retirement Class Shares(2) $ -- $ -- $ --
- ----------------------------------------------------------------------------------------------------
Net asset value, offering and redemption price per
share -- Institutional Class Shares $ -- $ 10.41 $ 8.35
- ----------------------------------------------------------------------------------------------------
Net asset value, offering and redemption price per
share -- Investor Class Shares $ 6.35 $ 10.34 $ 8.36+
- ----------------------------------------------------------------------------------------------------
Net asset value, offering and redemption price per
share -- Retirement Class Shares $ -- $ -- $ --
====================================================================================================
- --------------------------------------------------------------------------------
Turner Turner Turner Turner
Emerging Large Cap Midcap New Enterprise
Growth Fund Growth Fund Growth Fund Fund
- ----------------------------------------------------------------------------------------------------------------------
Assets:
- ----------------------------------------------------------------------------------------------------------------------
Investment securities, at cost $ 546,415 $ 31,790 $ 1,245,063 $ 37,174
Foreign currency, at cost -- -- -- --
======================================================================================================================
Investment securities, at value $ 593,820* $ 29,926* $ 1,202,585* $ 34,293*
Foreign currency, at value -- -- -- --
Receivable for capital shares sold 167 151 3,428 77
Receivable for investment securities sold 1,007 444 23,586 995
Receivable from investment adviser -- -- -- 3
Receivable for dividend income 348 31 623 8
- ----------------------------------------------------------------------------------------------------------------------
Total assets 595,342 30,552 1,230,222 35,376
======================================================================================================================
Liabilities:
Securities sold short, at proceeds -- -- -- --
======================================================================================================================
Securities sold short, at value -- -- -- --
Obligation to return securities lending collateral 63,859 324 57,886 1,683
Payable for capital shares redeemed 1,266 44 4,293 176
Payable due to shareholder servicing 118 -- 225 8
Payable due to investment adviser 401 6 629 --
Payable due to administrator 66 4 144 4
Payable due to chief compliance officer 8 -- 18 1
Payable for investment securities purchased -- 528 29,107 --
Payable to custodian -- -- -- 738
Payable due to distributor -- -- 16 --
Dividends payable on securities sold short (Note 2) -- -- -- --
Other accrued expenses 46 9 124 7
- ----------------------------------------------------------------------------------------------------------------------
Total liabilities 65,764 915 92,442 2,617
- ----------------------------------------------------------------------------------------------------------------------
Net assets $ 529,578 $ 29,637 $ 1,137,780 $ 32,759
======================================================================================================================
*Includes market value of securities on loan $ 58,056 $ 275 $ 48,880 $ 1,355
======================================================================================================================
Net assets:
Portfolio capital of Institutional Class Shares $ -- $ 51,953 $ 161,439 $ --
Portfolio capital of Investor Class Shares 470,183 884 1,306,538 59,332
Portfolio capital of Retirement Class Shares -- -- 6,163 --
Undistributed net investment income/(Distributions
in excess of net investment income) (206) 35 -- --
Accumulated net realized gain (loss) on investments,
securities sold short and foreign currency
transactions 12,196 (21,371) (293,882) (23,692)
Net unrealized appreciation (depreciation) on
investments and securities sold short 47,405 (1,864) (42,478) (2,881)
Net unrealized depreciation on foreign currencies
and translation of other assets and liabilities
denominated in foreign currencies -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------
Net assets $ 529,578 $ 29,637 $ 1,137,780 $ 32,759
======================================================================================================================
Outstanding shares of beneficial interest(1)
Institutional Class Shares(2) -- 6,311,718 5,246,070 --
- ----------------------------------------------------------------------------------------------------------------------
Outstanding shares of beneficial interest(1)
Investor Class Shares(2) 11,408,893 144,731 37,988,592 5,851,940
- ----------------------------------------------------------------------------------------------------------------------
Outstanding shares of beneficial interest(1)
Retirement Class Shares(2) -- -- 227,703 --
- ----------------------------------------------------------------------------------------------------------------------
Net Assets -- Institutional Class Shares(2) $ -- $ 28,975,064 $137,450,901 $ --
- ----------------------------------------------------------------------------------------------------------------------
Net Assets -- Investor Class Shares(2) $529,578,248 $ 661,503 $994,544,987 $ 32,759,490
- ----------------------------------------------------------------------------------------------------------------------
Net Assets -- Retirement Class Shares(2) $ -- $ -- $ 5,784,393 $ --
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, offering and redemption price per
share -- Institutional Class Shares $ -- $ 4.59 $ 26.20 $ --
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, offering and redemption price per
share -- Investor Class Shares $ 46.42 $ 4.57 $ 26.18 $ 5.60
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, offering and redemption price per
share -- Retirement Class Shares $ -- $ -- $ 25.40 $ --
======================================================================================================================
Turner Turner Turner
Small Cap International Midcap
Growth Fund Core Growth Fund Equity Fund
- --------------------------------------------------------------------------------------------------------
Assets:
- --------------------------------------------------------------------------------------------------------
Investment securities, at cost $ 276,249 $ 3,927 $ 537
Foreign currency, at cost -- 8 --
========================================================================================================
Investment securities, at value $ 281,845* $ 3,352 $ 511
Foreign currency, at value -- 8 --
Receivable for capital shares sold 435 -- --
Receivable for investment securities sold 7,704 60 14
Receivable from investment adviser -- -- 8
Receivable for dividend income 113 10 --
- --------------------------------------------------------------------------------------------------------
Total assets 290,097 3,430 533
========================================================================================================
Liabilities:
Securities sold short, at proceeds -- -- --
========================================================================================================
Securities sold short, at value -- -- --
Obligation to return securities lending collateral 36,089 -- --
Payable for capital shares redeemed 208 -- --
Payable due to shareholder servicing 67 -- --
Payable due to investment adviser 150 5 --
Payable due to administrator 31 -- --
Payable due to chief compliance officer 4 -- --
Payable for investment securities purchased 4,092 79 12
Payable to custodian -- -- --
Payable due to distributor -- -- --
Dividends payable on securities sold short (Note 2) -- -- --
Other accrued expenses 22 11 7
- --------------------------------------------------------------------------------------------------------
Total liabilities 40,663 95 19
- --------------------------------------------------------------------------------------------------------
Net assets $ 249,434 $ 3,335 $ 514
========================================================================================================
*Includes market value of securities on loan $ 33,164 $ -- $ --
========================================================================================================
Net assets:
Portfolio capital of Institutional Class Shares $ -- $ 4,474 $ 100
Portfolio capital of Investor Class Shares 310,641 -- 572
Portfolio capital of Retirement Class Shares -- -- --
Undistributed net investment income/(Distributions
in excess of net investment income) -- 16 --
Accumulated net realized gain (loss) on investments,
securities sold short and foreign currency
transactions (66,803) (579) (132)
Net unrealized appreciation (depreciation) on
investments and securities sold short 5,596 (575) (26)
Net unrealized depreciation on foreign currencies
and translation of other assets and liabilities
denominated in foreign currencies -- (1) --
- --------------------------------------------------------------------------------------------------------
Net assets $ 249,434 $ 3,335 $ 514
========================================================================================================
Outstanding shares of beneficial interest(1)
Institutional Class Shares(2) -- 400,072 10,788
- --------------------------------------------------------------------------------------------------------
Outstanding shares of beneficial interest(1)
Investor Class Shares(2) 9,429,470 -- 54,982
- --------------------------------------------------------------------------------------------------------
Outstanding shares of beneficial interest(1)
Retirement Class Shares(2) -- -- --
- --------------------------------------------------------------------------------------------------------
Net Assets -- Institutional Class Shares(2) $ -- $ 3,334,608 $ 85,144
- --------------------------------------------------------------------------------------------------------
Net Assets -- Investor Class Shares(2) $249,434,175 $ -- $ 428,736
- --------------------------------------------------------------------------------------------------------
Net Assets -- Retirement Class Shares(2) $ -- $ -- $ --
- --------------------------------------------------------------------------------------------------------
Net asset value, offering and redemption price per
share -- Institutional Class Shares $ -- $ 8.34 $ 7.89
- --------------------------------------------------------------------------------------------------------
Net asset value, offering and redemption price per
share -- Investor Class Shares $ 26.45 $ -- $ 7.80
- --------------------------------------------------------------------------------------------------------
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, have been rounded to
$0 or are zero shares.
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2008 ANNUAL REPORT | 48 & 49
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES (000)
September 30, 2008
Turner Turner Turner
Quantitative Broad Small Cap Quantitative Large
Market Equity Fund Equity Fund Cap Value Fund
- ----------------------------------------------------------------------------------------------------------------------------
Assets:
- ----------------------------------------------------------------------------------------------------------------------------
Investment securities, at cost $ 579 $ 26,739 $ 769
============================================================================================================================
Investment securities, at value $ 543 $ 27,329* $ 763
Receivable for capital shares sold -- 6 --
Receivable for investment securities sold -- 595 1
Receivable from investment adviser 12 -- 1
Receivable for dividend income 1 24 1
- ----------------------------------------------------------------------------------------------------------------------------
Total assets 556 27,954 766
============================================================================================================================
Liabilities:
Obligation to return securities lending collateral -- 3,239 --
Payable for investment securities purchased -- 453 --
Payable due to investment adviser -- 12 --
Payable due to shareholder servicing -- 11 --
Payable for capital shares redeemed -- 10 --
Payable due to administrator -- 4 --
Payable due to chief compliance officer -- 1 --
Other accrued expenses 12 16 3
- ----------------------------------------------------------------------------------------------------------------------------
Total liabilities 12 3,746 3
- ----------------------------------------------------------------------------------------------------------------------------
Net assets $ 544 $ 24,208 $ 763
============================================================================================================================
*Includes market value of securities on loan $ -- $ 3,013 $ --
============================================================================================================================
Net assets:
Portfolio capital of Institutional Class Shares $ 612 $ -- $ 895
Portfolio capital of Investor Class Shares 3 28,998 --
Undistributed net investment income 2 -- 11
Accumulated net realized loss on investments (37) (5,380) (137)
Net unrealized appreciation (depreciation) on investments (36) 590 (6)
- ----------------------------------------------------------------------------------------------------------------------------
Net assets $ 544 $ 24,208 $ 763
============================================================================================================================
Outstanding shares of beneficial interest(1)
Institutional Class Shares(2) 62,125 -- 85,081
- ----------------------------------------------------------------------------------------------------------------------------
Outstanding shares of beneficial interest(1)
Investor Class Shares(2) 260 2,100,103 --
- ----------------------------------------------------------------------------------------------------------------------------
Net Assets -- Institutional Class Shares(2) $ 542,086 $ -- $ 762,929
- ----------------------------------------------------------------------------------------------------------------------------
Net Assets -- Investor Class Shares(2) $ 2,267 $24,207,531 $ --
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, offering and redemption
price per share -- Institutional Class Shares $ 8.73 $ -- $ 8.97
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, offering and redemption
price per share -- Investor Class Shares $ 8.72 $ 11.53 $ --
============================================================================================================================
(1) Unlimited authorization -- par value $0.00001.
(2) Shares and Net Assets have not been rounded.
Amounts designated as "--" are either not applicable, $0, have been rounded to
$0 or are zero shares.
The accompanying notes are an integral part of the financial statements.
50 | TURNER FUNDS 2008 ANNUAL REPORT
- -------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS (000)
Turner Turner Turner
Concentrated Core Growth Core Growth
Growth Fund Fund 130/30 Fund
-----------------------------------------------
year ended year ended 7/31/08(3) thru
9/30/08 9/30/08 9/30/08
- ---------------------------------------------------------------------------------------------------------------
Investment Income:
Dividend $ 362 $ 6,391 $ 2
Securities lending 18 176 --
Foreign taxes withheld -- (109) --
- ---------------------------------------------------------------------------------------------------------------
Total Investment income 380 6,458 2
- ---------------------------------------------------------------------------------------------------------------
Expenses:
Investment advisory fees 695 3,734 1
Shareholder service fees(1) 136 576 --
Administrator fees 76 817 --
Chief Compliance Officer fees 4 35 --
Transfer agent fees 50 166 14
Custodian fees 35 126 2
Registration fees 15 60 --
Professional fees 13 150 --
Printing fees 6 109 --
Trustees' fees 4 41 --
Dividend expense on short positions -- -- 2
Insurance and other fees 6 42 --
- ---------------------------------------------------------------------------------------------------------------
Total expenses 1,040 5,856 19
Less:
Investment advisory fee waiver (198) (1,246) (1)
Fees paid indirectly(2) (10) (2) --
Reimbursements of other operating expenses -- -- (15)
- ---------------------------------------------------------------------------------------------------------------
Net expenses 832 4,608 3
- ---------------------------------------------------------------------------------------------------------------
Net investment income (loss) (452) 1,850 (1)
- ---------------------------------------------------------------------------------------------------------------
Net realized loss from securities sold (11,806) (118,054) (42)
Net realized loss from securities sold short -- -- (5)
Net change in unrealized depreciation on investments (13,283) (100,153) (128)
Net change in unrealized appreciation on securities
sold short -- -- 25
- ---------------------------------------------------------------------------------------------------------------
Net realized and unrealized loss on investments and
securities sold short (25,089) (218,207) (150)
- ---------------------------------------------------------------------------------------------------------------
Net decrease in net assets resulting from operations $ (25,541) $ (216,357) $ (151)
===============================================================================================================
(1) Attributable to Investor Class Shares only.
(2) See Note 4 in Notes to Financial Statements.
(3) 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 2008 ANNUAL REPORT | 51
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS (000)
Turner Turner Turner
Emerging Large Cap Midcap
Growth Fund Growth Fund Growth Fund
----------------------------------------
year ended year ended year ended
9/30/08 9/30/08 9/30/08
- ------------------------------------------------------------------------------------------------------------------------------------
Investment Income:
Dividend $ 3,662 $ 353 $ 9,012
Securities lending 864 5 1,009
Foreign taxes withheld (19) (8) (43)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investment income 4,507 350 9,978
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses:
Investment advisory fees 6,041 233 10,051
Shareholder service fees(1) 1,510 1 3,264
Shareholder service fees(2) -- -- 16
Distribution fees(2) -- -- 16
Administrator fees 845 54 1,874
Chief Compliance Officer fees 29 3 71
Transfer agent fees 94 58 443
Custodian fees 89 32 136
Registration fees 56 20 108
Professional fees 152 9 334
Printing fees 66 6 154
Trustees' fees 45 3 99
Insurance and other fees 65 4 139
- ------------------------------------------------------------------------------------------------------------------------------------
Total expenses 8,992 423 16,705
Less:
Investment advisory fee waiver (516) (154) (914)
Fees paid indirectly(3) (11) (1) (36)
Reimbursements of other operating expenses -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net expenses 8,465 268 15,755
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (3,958) 82 (5,777)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) from securities sold 33,323 (5,825) (9,460)
Net realized loss on foreign currency transactions -- -- --
Net change in unrealized depreciation on investments (132,601) (8,429) (385,739)
Net change in unrealized depreciation on foreign currencies and translation of other
assets and liabilities denominated in foreign currencies -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized loss on investments and foreign currencies (99,278) (14,254) (395,199)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets resulting from operations $ (103,236) $ (14,172) $ (400,976)
====================================================================================================================================
- --------------------------------------------------------------------------------
Turner
Turner Turner International Turner
New Enterprise Small Cap Core Growth Midcap
Fund Growth Fund Fund Equity Fund
-----------------------------------------------------------
year ended year ended year ended year ended
9/30/08 9/30/08 9/30/08 9/30/08
- ------------------------------------------------------------------------------------------------------------------------------------
Investment Income:
Dividend $ 373 $ 1,342 $ 100 $ 5
Securities lending 41 865 -- --
Foreign taxes withheld (1) (40) (9) --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investment income 413 2,167 91 5
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses:
Investment advisory fees 834 2,869 35 4
Shareholder service fees(1) 164 717 -- 1
Shareholder service fees(2) -- -- -- --
Distribution fees(2) -- -- -- --
Administrator fees 92 401 6 1
Chief Compliance Officer fees 4 15 -- --
Transfer agent fees 63 65 27 54
Custodian fees 28 77 43 14
Registration fees 26 29 7 19
Professional fees 15 72 1 --
Printing fees 9 29 1 --
Trustees' fees 4 22 -- --
Insurance and other fees 5 33 6 2
- ------------------------------------------------------------------------------------------------------------------------------------
Total expenses 1,244 4,329 126 95
Less:
Investment advisory fee waiver (232) (730) (35) (4)
Fees paid indirectly(3) (16) (16) -- --
Reimbursements of other operating expenses -- -- (45) (85)
- ------------------------------------------------------------------------------------------------------------------------------------
Net expenses 996 3,583 46 6
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (583) (1,416) 45 (1)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) from securities sold (13,706) (13,030) (517) (111)
Net realized loss on foreign currency transactions -- -- (28) --
Net change in unrealized depreciation on investments (13,004) (47,793) (979) (52)
Net change in unrealized depreciation on foreign currencies and
translation of other assets and liabilities denominated in
foreign currencies -- -- (1) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized loss on investments and foreign
currencies (26,710) (60,823) (1,525) (163)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets resulting from operations $ (27,293) $ (62,239) $ (1,480) $ (164)
====================================================================================================================================
Turner Turner
Quantitative Turner Quantitative
Broad Market Small Cap Large Cap
Equity Fund Equity Fund Value Fund
---------------------------------------------
6/30/08(4) thru year ended year ended
9/30/08 9/30/08 9/30/08
- ------------------------------------------------------------------------------------------------------------------------------------
Investment Income:
Dividend $ 3 $ 311 $ 19
Securities lending -- 130 --
Foreign taxes withheld -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investment income 3 441 19
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses:
Investment advisory fees 1 432 5
Shareholder service fees(1) -- 114 --
Shareholder service fees(2) -- -- --
Distribution fees(2) -- -- --
Administrator fees -- 64 1
Chief Compliance Officer fees -- 3 --
Transfer agent fees 18 31 27
Custodian fees 2 49 6
Registration fees -- 17 11
Professional fees -- 11 --
Printing fees -- 3 --
Trustees' fees -- 4 --
Insurance and other fees 2 8 1
- ------------------------------------------------------------------------------------------------------------------------------------
Total expenses 23 736 51
Less:
Investment advisory fee waiver (1) (74) (5)
Fees paid indirectly(3) -- (2) --
Reimbursements of other operating expenses (21) -- (41)
- ------------------------------------------------------------------------------------------------------------------------------------
Net expenses 1 660 5
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) 2 (219) 14
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) from securities sold (37) (4,329) (108)
Net realized loss on foreign currency transactions -- -- --
Net change in unrealized depreciation on investments (36) (4,794) (80)
Net change in unrealized depreciation on foreign currencies and translation of
other assets and liabilities denominated in foreign currencies -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized loss on investments and foreign currencies (73) (9,123) (188)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets resulting from operations $ (71) $ (9,342) $ (174)
====================================================================================================================================
(1) Attributable to Investor Class Shares only.
(2) Attributable to Retirement Class Shares only.
(3) See Note 4 in Notes to Financial Statements.
(4) 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 2008 ANNUAL REPORT | 52 & 53
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (000)
Turner Concentrated Turner Core
Growth Fund Growth Fund
---------------------------------------------------
year ended year ended year ended year ended
9/30/08 9/30/07 9/30/08 9/30/07
- ------------------------------------------------------------------------------------------------------------------------------------
Investment activities:
Net investment income (loss) $ (452) $ (209) $ 1,850 $ 646
Net realized gain (loss) from securities sold and securities sold short (11,806) 7,682 (118,054) (1,620)
Net change in unrealized appreciation (depreciation) on investments
and securities sold short (13,283) 3,552 (100,153) 39,771
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations (25,541) 11,025 (216,357) 38,797
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Net investment income
Institutional Class Shares -- -- (612) (444)
Investor Class Shares -- -- (273) (52)
Retirement Class Shares -- -- -- --
Realized capital gains
Institutional Class Shares -- -- -- --
Investor Class Shares -- -- -- --
Retirement Class Shares -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions -- -- (885) (496)
- ------------------------------------------------------------------------------------------------------------------------------------
Capital share transactions:
Institutional Class Shares
Proceeds from shares issued -- -- 315,619 147,804
Proceeds from shares issued in lieu of cash distributions -- -- 503 444
Cost of shares redeemed -- -- (69,452) (14,649)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from Institutional Class Shares transactions -- -- 246,670 133,599
- ------------------------------------------------------------------------------------------------------------------------------------
Investor Class Shares
Proceeds from shares issued 53,335 30,295 377,978 13,619
Proceeds from shares issued in lieu of cash distributions -- -- 271 52
Cost of shares redeemed (46,614) (18,099) (62,221) (5,605)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Investor Class Shares transactions 6,721 12,196 316,028 8,066
- ------------------------------------------------------------------------------------------------------------------------------------
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 6,721 12,196 562,698 141,665
- ------------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (18,820) 23,221 345,456 179,966
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets:
Beginning of period 61,401 38,180 275,319 95,353
- ------------------------------------------------------------------------------------------------------------------------------------
End of period $ 42,581 $ 61,401 $ 620,775 $ 275,319
====================================================================================================================================
Undistributed net investment income
(Distributions in excess of net investment income) $ -- $ 6 $ 1,519 $ 530
====================================================================================================================================
Shares issued and redeemed:
Institutional Class Shares
Issued -- -- 23,511 11,444
Issued in lieu of cash distributions -- -- 33 36
Redeemed -- -- (5,465) (1,132)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in Institutional Class Shares -- -- 18,079 10,348
- ------------------------------------------------------------------------------------------------------------------------------------
Investor Class Shares
Issued 5,908 3,178 27,457 1,038
Issued in lieu of cash distributions -- -- 18 4
Redeemed (5,270) (2,136) (4,889) (439)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in Investor Class Shares 638 1,042 22,586 603
- ------------------------------------------------------------------------------------------------------------------------------------
Retirement Class Shares
Issued -- -- -- --
Issued in lieu of cash distributions -- -- -- --
Redeemed -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in Retirement Class Shares -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in share transactions 638 1,042 40,665 10,951
====================================================================================================================================
- --------------------------------------------------------------------------------
Turner Core Turner Emerging
Growth 130/30 Fund Growth Fund
----------------------------------------------
7/31/08(1) thru year ended year ended
9/30/08 9/30/08 9/30/07
- ------------------------------------------------------------------------------------------------------------------------------------
Investment activities:
Net investment income (loss) $ (1) $ (3,958) $ (3,011)
Net realized gain (loss) from securities sold and securities sold short (47) 33,323 71,394
Net change in unrealized appreciation (depreciation) on investments
and securities sold short (103) (132,601) 65,475
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations (151) (103,236) 133,858
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Net investment income
Institutional Class Shares -- -- --
Investor Class Shares -- (2,912) --
Retirement Class Shares -- -- --
Realized capital gains
Institutional Class Shares -- -- --
Investor Class Shares -- (84,525) (50,964)
Retirement Class Shares -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions -- (87,437) (50,964)
- ------------------------------------------------------------------------------------------------------------------------------------
Capital share transactions:
Institutional Class Shares
Proceeds from shares issued 917 -- --
Proceeds from shares issued in lieu of cash distributions -- -- --
Cost of shares redeemed -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from Institutional Class Shares transactions 917 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Investor Class Shares
Proceeds from shares issued 3 97,413 84,795
Proceeds from shares issued in lieu of cash distributions -- 86,908 50,559
Cost of shares redeemed -- (102,107) (145,438)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Investor Class Shares transactions 3 82,214 (10,084)
- ------------------------------------------------------------------------------------------------------------------------------------
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 920 82,214 (10,084)
- ------------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets 769 (108,459) 72,810
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets:
Beginning of period -- 638,037 565,227
- ------------------------------------------------------------------------------------------------------------------------------------
End of period $ 769 $ 529,578 $ 638,037
====================================================================================================================================
Undistributed net investment income
(Distributions in excess of net investment income) $ -- $ (206) $ 3,186
====================================================================================================================================
Shares issued and redeemed:
Institutional Class Shares
Issued 92 -- --
Issued in lieu of cash distributions -- -- --
Redeemed -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in Institutional Class Shares 92 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Investor Class Shares
Issued -- 1,807 1,420
Issued in lieu of cash distributions -- 1,563 898
Redeemed -- (1,920) (2,458)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in Investor Class Shares -- 1,450 (140)
- ------------------------------------------------------------------------------------------------------------------------------------
Retirement Class Shares
Issued -- -- --
Issued in lieu of cash distributions -- -- --
Redeemed -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in Retirement Class Shares -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in share transactions 92 1,450 (140)
====================================================================================================================================
Turner Large Cap Turner Midcap
Growth Fund Growth Fund
---------------------------------------------------
year ended year ended year ended year ended
9/30/08 9/30/07 9/30/08 9/30/07
- ------------------------------------------------------------------------------------------------------------------------------------
Investment activities:
Net investment income (loss) $ 82 $ 54 $ (5,777) $ (7,435)
Net realized gain (loss) from securities sold and securities sold short (5,825) 755 (9,460) 133,836
Net change in unrealized appreciation (depreciation) on investments
and securities sold short (8,429) 4,190 (385,739) 178,581
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations (14,172) 4,999 (400,976) 304,982
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Net investment income
Institutional Class Shares (89) (66) -- --
Investor Class Shares -- -- -- --
Retirement Class Shares -- -- -- --
Realized capital gains
Institutional Class Shares -- -- -- --
Investor Class Shares -- -- -- --
Retirement Class Shares -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions (89) (66) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Capital share transactions:
Institutional Class Shares
Proceeds from shares issued 18,638 19,850 165,302 --
Proceeds from shares issued in lieu of cash distributions 75 54 -- --
Cost of shares redeemed (13,516) (6,530) (3,189) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from Institutional Class Shares transactions 5,197 13,374 162,113 --
- ------------------------------------------------------------------------------------------------------------------------------------
Investor Class Shares
Proceeds from shares issued 931 86 473,324 327,209
Proceeds from shares issued in lieu of cash distributions -- -- -- --
Cost of shares redeemed (131) (2) (444,668) (404,010)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Investor Class Shares transactions 800 84 28,656 (76,801)
- ------------------------------------------------------------------------------------------------------------------------------------
Retirement Class Shares
Proceeds from shares issued -- -- 3,515 4,134
Proceeds from shares issued in lieu of cash distributions -- -- -- --
Cost of shares redeemed -- -- (1,912) (1,576)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from Retirement Class Shares transactions -- -- 1,603 2,558
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from capital share transactions 5,997 13,458 192,372 (74,243)
- ------------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (8,264) 18,391 (208,604) 230,739
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets:
Beginning of period 37,901 19,510 1,346,384 1,115,645
- ------------------------------------------------------------------------------------------------------------------------------------
End of period $ 29,637 $ 37,901 $1,137,780 $1,346,384
====================================================================================================================================
Undistributed net investment income
(Distributions in excess of net investment income) $ 35 $ 42 $ -- $ 201
====================================================================================================================================
Shares issued and redeemed:
Institutional Class Shares
Issued 2,996 3,159 5,354 --
Issued in lieu of cash distributions 11 9 -- --
Redeemed (2,270) (1,089) (108) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in Institutional Class Shares 737 2,079 5,246 --
- ------------------------------------------------------------------------------------------------------------------------------------
Investor Class Shares
Issued 156 13 14,256 10,387
Issued in lieu of cash distributions -- -- -- --
Redeemed (24) -- (13,798) (13,149)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in Investor Class Shares 132 13 458 (2,762)
- ------------------------------------------------------------------------------------------------------------------------------------
Retirement Class Shares
Issued -- -- 110 140
Issued in lieu of cash distributions -- -- -- --
Redeemed -- -- (61) (52)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in Retirement Class Shares -- -- 49 88
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in share transactions 869 2,092 5,753 (2,674)
====================================================================================================================================
(1) Commencement of Operations.
Amounts designated as "--" are either not applicable, $0, have been rounded to
$0 or are zero shares.
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2008 ANNUAL REPORT | 54 & 55
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (000)
Turner New
Enterprise Fund
------------------------
year ended year ended
9/30/08 9/30/07
- -----------------------------------------------------------------------------------------------------------------------------------
Investment activities:
Net investment income (loss) $ (583) $ (248)
Net realized gain (loss) from securities sold (13,706) 3,615
Net realized loss on foreign currency transactions -- --
Net change in unrealized appreciation (depreciation) on investments (13,004) 5,954
Net change in unrealized depreciation on foreign currencies and translation of
other assets and liabilities denominated in foreign currencies -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations (27,293) 9,321
- -----------------------------------------------------------------------------------------------------------------------------------
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 in net assets from Institutional Class Shares transactions -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Investor Class Shares
Proceeds from shares issued 59,670 50,438
Proceeds from shares issued in lieu of cash distributions -- --
Cost of shares redeemed (69,763) (13,654)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Investor Class Shares transactions (10,093) 36,784
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from capital share transactions (10,093) 36,784
- -----------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (37,386) 46,105
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets:
Beginning of period 70,145 24,040
- -----------------------------------------------------------------------------------------------------------------------------------
End of period $ 32,759 $ 70,145
===================================================================================================================================
Undistributed net investment income $ -- $ 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 7,008 6,123
Issued in lieu of cash distributions -- --
Redeemed (9,203) (1,917)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in Investor Class Shares (2,195) 4,206
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in share transactions (2,195) 4,206
===================================================================================================================================
- --------------------------------------------------------------------------------
Turner Small Cap Turner International
Growth Fund Core Growth Fund
-------------------------------------------------------
year ended year ended year ended 1/31/07(1) thru
9/30/08 9/30/07 9/30/08 9/30/07
- -----------------------------------------------------------------------------------------------------------------------------------
Investment activities:
Net investment income (loss) $ (1,416) $ (1,930) $ 45 $ 11
Net realized gain (loss) from securities sold (13,030) 38,846 (517) (34)
Net realized loss on foreign currency transactions -- -- (28) (7)
Net change in unrealized appreciation (depreciation) on investments (47,793) 28,720 (979) 404
Net change in unrealized depreciation on foreign currencies and
translation of other assets and liabilities denominated in
foreign currencies -- -- (1) --
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations (62,239) 65,636 (1,480) 374
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Net investment income
Institutional Class Shares -- -- (5) --
Investor Class Shares -- -- -- --
Realized capital gains
Institutional Class Shares -- -- (28) --
Investor Class Shares -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions -- -- (33) --
- -----------------------------------------------------------------------------------------------------------------------------------
Capital share transactions:
Institutional Class Shares
Proceeds from shares issued -- -- 4,955 2,035
Proceeds from shares issued in lieu of cash distributions -- -- 33 --
Cost of shares redeemed -- -- (2,549) --
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from Institutional Class Shares transactions -- -- 2,439 2,035
- -----------------------------------------------------------------------------------------------------------------------------------
Investor Class Shares
Proceeds from shares issued 63,454 80,195 -- --
Proceeds from shares issued in lieu of cash distributions -- -- -- --
Cost of shares redeemed (69,711) (76,172) -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Investor Class Shares
transactions (6,257) 4,023 -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from capital share transactions (6,257) 4,023 2,439 2,035
- -----------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (68,496) 69,659 926 2,409
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets:
Beginning of period 317,930 248,271 2,409 --
- -----------------------------------------------------------------------------------------------------------------------------------
End of period $ 249,434 $ 317,930 $ 3,335 $ 2,409
===================================================================================================================================
Undistributed net investment income $ -- $ 345 $ 16 $ 4
===================================================================================================================================
Shares issued and redeemed:
Institutional Class Shares
Issued -- -- 427 197
Issued in lieu of cash distributions -- -- 3 --
Redeemed -- -- (227) --
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in Institutional Class Shares -- -- 203 197
- -----------------------------------------------------------------------------------------------------------------------------------
Investor Class Shares
Issued 2,086 2,703 -- --
Issued in lieu of cash distributions -- -- -- --
Redeemed (2,298) (2,547) -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in Investor Class Shares (212) 156 -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in share transactions (212) 156 203 197
===================================================================================================================================
Turner
Turner Midcap Quantitative Broad
Equity Fund Market Equity Fund
--------------------------------------------------
year ended 1/31/07(1) thru 6/30/08(1) thru
9/30/08 9/30/07 9/30/08
- ----------------------------------------------------------------------------------------------------------------------------------
Investment activities:
Net investment income (loss) $ (1) $ (1) $ 2
Net realized gain (loss) from securities sold (111) (21) (37)
Net realized loss on foreign currency transactions -- -- --
Net change in unrealized appreciation (depreciation) on investments (52) 26 (36)
Net change in unrealized depreciation on foreign currencies and
translation of other assets and liabilities denominated in
foreign currencies -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations (164) 4 (71)
- ----------------------------------------------------------------------------------------------------------------------------------
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 100 -- 612
Proceeds from shares issued in lieu of cash distributions -- -- --
Cost of shares redeemed -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from Institutional Class Shares transactions 100 -- 612
- ----------------------------------------------------------------------------------------------------------------------------------
Investor Class Shares
Proceeds from shares issued 185 629 3
Proceeds from shares issued in lieu of cash distributions -- -- --
Cost of shares redeemed (139) (101) --
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Investor Class Shares transactions 46 528 3
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from capital share transactions 146 528 615
- ----------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (18) 532 544
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets:
Beginning of period 532 -- --
- ----------------------------------------------------------------------------------------------------------------------------------
End of period $ 514 $ 532 $ 544
==================================================================================================================================
Undistributed net investment income $ -- $ -- $ 2
==================================================================================================================================
Shares issued and redeemed:
Institutional Class Shares
Issued 11 -- 62
Issued in lieu of cash distributions -- -- --
Redeemed -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in Institutional Class Shares 11 -- 62
- ----------------------------------------------------------------------------------------------------------------------------------
Investor Class Shares
Issued 19 60 --
Issued in lieu of cash distributions -- -- --
Redeemed (14) (10) --
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in Investor Class Shares 5 50 --
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in share transactions 16 50 62
==================================================================================================================================
(1) Commencement of Operations.
Amounts designated as "--" are either not applicable, $0, have been rounded to
$0 or are zero shares.
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2008 ANNUAL REPORT | 56 & 57
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (000)
Turner Small Cap Turner Quantitative
Equity Fund Large Cap Value Fund
----------------------------------------------------
year ended year ended year ended year ended
9/30/08 9/30/07 9/30/08 9/30/07
- -------------------------------------------------------------------------------------------------------------------
Investment activities:
Net investment income (loss) $ (219) $ (513) $ 14 $ 9
Net realized gain (loss) from securities sold (4,329) 9,940 (108) 81
Net change in unrealized appreciation (depreciation)
on investments (4,794) (1,650) (80) 19
- -------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from operations (9,342) 7,777 (174) 109
- -------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Net investment income
Institutional Class Shares -- -- (8) (9)
Investor Class Shares -- -- -- --
Realized capital gains
Institutional Class Shares -- -- (110) (12)
Investor Class Shares (9,517) (5,701) -- --
- -------------------------------------------------------------------------------------------------------------------
Total dividends and distributions (9,517) (5,701) (118) (21)
- -------------------------------------------------------------------------------------------------------------------
Capital share transactions:
Institutional Class Shares
Proceeds from shares issued -- -- 102 230
Proceeds from shares issued in lieu of cash distributions -- -- 118 21
Cost of shares redeemed -- -- -- (84)
- -------------------------------------------------------------------------------------------------------------------
Net increase in net assets from Institutional Class
Shares transactions -- -- 220 167
- -------------------------------------------------------------------------------------------------------------------
Investor Class Shares
Proceeds from shares issued 6,597 7,445 -- --
Proceeds from shares issued in lieu of cash distributions 9,456 5,671 -- --
Cost of shares redeemed (38,278) (31,240) -- --
- -------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from Investor Class
Shares transactions (22,225) (18,124) -- --
- -------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from capital
share transactions (22,225) (18,124) 220 167
- -------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (41,084) (16,048) (72) 255
- -------------------------------------------------------------------------------------------------------------------
Net assets:
Beginning of year 65,292 81,340 835 580
- -------------------------------------------------------------------------------------------------------------------
End of year $ 24,208 $ 65,292 $ 763 $ 835
===================================================================================================================
Undistributed net investment income $ -- $ 12 $ 11 $ 5
===================================================================================================================
Shares issued and redeemed:
Institutional Class Shares
Issued -- -- 9 19
Issued in lieu of cash distributions -- -- 11 2
Redeemed -- -- -- (7)
- -------------------------------------------------------------------------------------------------------------------
Net increase in Institutional Class Shares -- -- 20 14
- -------------------------------------------------------------------------------------------------------------------
Investor Class Shares
Issued 497 430 -- --
Issued in lieu of cash distributions 676 336 -- --
Redeemed (2,844) (1,796) -- --
- -------------------------------------------------------------------------------------------------------------------
Net decrease in Investor Class Shares (1,671) (1,030) -- --
- -------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in share transactions (1,671) (1,030) 20 14
===================================================================================================================
Amounts designated as "--" are either not applicable, $0, have been rounded to
$0 or are zero shares.
The accompanying notes are an integral part of the financial statements.
58 | TURNER FUNDS 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
STATEMENT OF CASH FLOWS (000)
Turner
Core Growth
130/30 Fund
----------------
7/31/08(1) thru
9/30/08
- -----------------------------------------------------------------------------------------
Cash flows from operating activities:
Net decrease in net assets resulting from operations $ (151)
Adjustments to reconcile net decrease in net assets resulting
from operations to net cash used in operating activities
Purchases of portfolio investments (1,547)
Purchases of short-term investments (1,063)
Proceeds from sales of portfolio investments 403
Sales of short-term investments 1,027
Payments to cover securities sold short (106)
Proceeds from securities sold short 363
Realized loss from security transactions 47
Change in unrealized depreciation from security transactions 103
Increase in receivable for investment securities sold (32)
Increase in receivable from investment adviser (10)
Increase in receivable for dividend income (1)
Increase in payable for investment securities purchased 34
Increase in dividends payable on securities sold short 1
Increase in other accrued expenses 12
- -----------------------------------------------------------------------------------------
Net cash used in operating activities (920)
- -----------------------------------------------------------------------------------------
Cash flows from financing activities:
Proceeds from shares issued 920
- -----------------------------------------------------------------------------------------
Net cash provided by financing activities 920
- -----------------------------------------------------------------------------------------
Net change in cash --
Cash -- beginning of period --
- -----------------------------------------------------------------------------------------
Cash -- end of period $ --
=========================================================================================
(1) Commencement of operations.
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2008 ANNUAL REPORT | 59
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
Net asset Net Realized and Total Dividends Distributions
value, investment unrealized from from net from Total
beginning income gains (losses) investment investment capital dividends and
of period (loss) on investments operations income gains distributions
- ------------------------------------------------------------------------------------------------------------------
Turner Concentrated Growth Fund -- Investor Class Shares
- --------------------------------------------------------
2008 $10.12 (0.07) (3) (3.70) (3.77) -- -- --
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) -- -- --
- -----------------------------------------------------
Turner Core Growth Fund -- Institutional Class Shares
- -----------------------------------------------------
2008 $14.39 0.06 (3) (4.01) (3.95) (0.03) -- (0.03)
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 (4) $ 8.84 0.02 2.07 2.09 -- -- --
2004 $ 8.04 (0.03) 0.83 0.80 -- -- --
- ------------------------------------------------
Turner Core Growth Fund -- Investor Class Shares
- ------------------------------------------------
2008 $14.33 0.02 (3) (3.99) (3.97) (0.02) -- (0.02)
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)(4) $10.58 -- 0.35 0.35 -- -- --
- ------------------------------------------------------------
Turner Core Growth 130/30 Fund -- Institutional Class Shares
- ------------------------------------------------------------
2008 (5) $10.00 (0.01) (3) (1.64) (1.65) -- -- --
- -------------------------------------------------------
Turner Core Growth 130/30 Fund -- Investor Class Shares
- -------------------------------------------------------
2008 (5) $10.00 0.01 (3)(7) (1.65) (1.64) -- -- --
- ----------------------------------------------------
Turner Emerging Growth Fund -- Investor Class Shares
- ----------------------------------------------------
2008 $64.06 (0.35) (3) (8.54) (8.89) (0.25) (8.50) (8.75)
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)
- ----------------------------------------------------------
Turner Large Cap Growth Fund -- Institutional Class Shares
- ----------------------------------------------------------
2008 $ 6.78 0.01 (3) (2.19) (2.18) (0.01) -- (0.01)
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 --* -- --
- -----------------------------------------------------
Turner Large Cap Growth Fund -- Investor Class Shares
- -----------------------------------------------------
2008 $ 6.77 -- * (2.19) (2.19) (0.01) -- (0.01)
2007 (6) $ 5.92 0.01 (3) 0.84 0.85 -- -- --
- --------------------------------------------------------------------------------
Ratio of Ratio of net Ratio of net
Net net expenses expenses to Ratio of total investment
Net asset assets end to average average net assets expenses income (loss) Portfolio
value, end Total of period net assets excluding including to average to average turnover
of period return (000) dividend expense++ dividend expense net assets net assets++ rate+++
- ----------------------------------------------------------------------------------------------------------------------------------
Turner Concentrated Growth Fund -- Investor Class Shares
- --------------------------------------------------------
2008 $ 6.35 (37.25)% $ 42,581 1.53% 1.91% 1.91% (0.83)% 348%
2007 $10.12 33.16% $ 61,401 1.11% 1.46% 1.46% (0.57)% 220%
2006 $ 7.60 7.04% $ 38,180 1.59% 1.79% 1.79% (1.01)% 251%
2005 $ 7.10 21.99% $ 30,779 1.15% 1.41% 1.41% (0.57)% 330%
2004 $ 5.82 (3.80)% $ 39,109 1.42% 1.57% 1.57% (0.99)% 499%
- -----------------------------------------------------
Turner Core Growth Fund -- Institutional Class Shares
- -----------------------------------------------------
2008 $10.41 (27.53)% $360,083 0.69% 0.90% 0.90% 0.42% 200%
2007 $14.39 24.00% $237,778 0.68% 1.06% 1.06% 0.42% 103%
2006 $11.65 6.91% $ 71,935 0.59% 1.20% 1.20% 0.77% 124%
2005 (4) $10.93 23.64% $ 40,857 0.69% (1) 1.60% 1.60% 0.46% 136%
2004 $ 8.84 9.95% $ 5,080 1.25% 1.97% 1.97% (0.27)% 104%
- ------------------------------------------------
Turner Core Growth Fund -- Investor Class Shares
- ------------------------------------------------
2008 $10.34 (27.76)% $260,692 0.94% 1.15% 1.15% 0.15% 200%
2007 $14.33 23.68% $ 37,541 0.94% 1.31% 1.31% 0.15% 103%
2006 $11.61 6.52% $ 23,418 0.94% 1.43% 1.43% 0.23% 124%
2005 (2)(4) $10.93 3.31%+ $ 1 0.83% 2.50% 2.50% 0.33% 136%
- ------------------------------------------------------------
Turner Core Growth 130/30 Fund -- Institutional Class Shares
- ------------------------------------------------------------
2008 (5) $ 8.35 (16.50)%+ $ 766 1.10% 2.30% (8) 14.11% (0.78)% 38%
- -------------------------------------------------------
Turner Core Growth 130/30 Fund -- Investor Class Shares
- -------------------------------------------------------
2008 (5) $ 8.36 (16.40)%+ $ 3 1.35% 2.55% (8) 20.84% 0.34% 38%
- ----------------------------------------------------
Turner Emerging Growth Fund -- Investor Class Shares
- ----------------------------------------------------
2008 $46.42 (16.08)% $529,578 1.40% 1.49% 1.49% (0.66)% 71%
2007 $64.06 25.08% $638,037 1.40% 1.48% 1.48% (0.50)% 88%
2006 $55.97 4.95% $565,227 1.40% 1.44% 1.44% (0.57)% 78%
2005 $56.46 27.90% $502,108 1.40% 1.44% 1.44% (0.90)% 74%
2004 $50.02 23.54% $366,692 1.40% 1.42% 1.42% (0.85)% 122%
- ----------------------------------------------------------
Turner Large Cap Growth Fund -- Institutional Class Shares
- ----------------------------------------------------------
2008 $ 4.59 (32.16)% $ 28,975 0.69% 1.09% 1.09% 0.21% 213%
2007 $ 6.78 21.86% $ 37,814 0.70% 1.23% 1.23% 0.23% 119%
2006 $ 5.58 3.40% $ 19,510 0.75% 1.16% 1.16% 0.26% 194%
2005 $ 5.41 12.09% $ 43,025 0.75% 1.10% 1.10% 0.16% 155%
2004 $ 4.83 4.64% $ 67,991 0.75% 0.94% 0.94% 0.11% 166%
- -----------------------------------------------------
Turner Large Cap Growth Fund -- Investor Class Shares
- -----------------------------------------------------
2008 $ 4.57 (32.40)% $ 662 0.94% 1.36% 1.36% (0.05)% 213%
2007 (6) $ 6.77 14.36%+ $ 87 0.94% 1.51% 1.51% 0.13% 119%
* 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.
Excluding fees paid indirectly, the ratio of net expenses to average net
assets, excluding dividend expense, would have been 1.54% and 1.11% for
the Concentrated Growth Fund and the Core Growth 130/30 Fund,
Institutional Class Shares, respectively.
+++ Excludes effect of in-kind transfers and mergers, as applicable.
(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) 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.
(5) Commenced operations on July 31, 2008. All ratios for the period have been
annualized.
(6) Commenced operations on January 31, 2007. All ratios for the period have
been annualized.
(7) 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.
(8) Dividend expense totaled 1.20% of average net assets for the period ended
September 30, 2008.
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 2008 ANNUAL REPORT | 60 & 61
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
Net asset Net Realized and Total Dividends Distributions
value, investment unrealized from from net from Total
beginning income gains (losses) investment investment capital dividends and
of period (loss) on investments operations income gains distributions
- ---------------------------------------------------------------------------------------------------------------
Turner Midcap Growth Fund -- Institutional Class Shares
- -------------------------------------------------------
2008 (3) $34.67 (0.01) (1) (8.46) (8.47) -- -- --
- --------------------------------------------------
Turner Midcap Growth Fund -- Investor Class Shares
- --------------------------------------------------
2008 $35.71 (0.14) (1) (9.39) (9.53) -- -- --
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 -- -- --
- ----------------------------------------------------
Turner Midcap Growth Fund -- Retirement Class Shares
- ----------------------------------------------------
2008 $34.74 (0.22) (1) (9.12) (9.34) -- -- --
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 -- -- --
- ---------------------------------------------------
Turner New Enterprise Fund -- Investor Class Shares
- ---------------------------------------------------
2008 $ 8.72 (0.07) (1) (3.05) (3.12) -- -- --
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 -- -- --
- -----------------------------------------------------
Turner Small Cap Growth Fund -- Investor Class Shares
- -----------------------------------------------------
2008 $32.98 (0.15) (1) (6.38) (6.53) -- -- --
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 -- -- --
- -------------------------------------------------------------------
Turner International Core Growth Fund -- Institutional Class Shares
- -------------------------------------------------------------------
2008 $12.21 0.12 (1) (3.87) (3.75) (0.02) (0.10) (0.12)
2007 (4) $10.00 0.07 (1) 2.14 2.21 -- -- --
- -------------------------------------------------------
Turner Midcap Equity Fund -- Institutional Class Shares
- -------------------------------------------------------
2008 $10.68 0.01 (1)(2) (2.80) (2.79) -- -- --
2007 (4) $10.00 0.04 (1)(2) 0.64 0.68 -- -- --
- --------------------------------------------------
Turner Midcap Equity Fund -- Investor Class Shares
- --------------------------------------------------
2008 $10.61 (0.03) (1) (2.78) (2.81) -- -- --
2007 (4) $10.00 (0.02) (1) 0.63 0.61 -- -- --
- --------------------------------------------------------------------------------
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 Growth Fund -- Institutional Class Shares
- -------------------------------------------------------
2008 (3) $26.20 (24.43)%+ $ 137,451 0.93% 1.03% (0.09)% 157%
- --------------------------------------------------
Turner Midcap Growth Fund -- Investor Class Shares
- --------------------------------------------------
2008 $26.18 (26.69)% $ 994,545 1.18% 1.25% (0.44)% 157%
2007 $35.71 29.24% $1,340,172 1.18% 1.24% (0.63)% 155%
2006 $27.63 4.70% $1,113,201 1.18% 1.18% (0.30)% 135%
2005 $26.39 25.73% $ 955,730 1.20% 1.20% (0.78)% 152%
2004 $20.99 7.42% $ 857,899 1.16% 1.16% (0.84)% 167%
- ----------------------------------------------------
Turner Midcap Growth Fund -- Retirement Class Shares
- ----------------------------------------------------
2008 $25.40 (26.89)% $ 5,784 1.43% 1.50% (0.69)% 157%
2007 $34.74 28.86% $ 6,212 1.49% 1.56% (0.98)% 155%
2006 $26.96 4.13% $ 2,444 1.68% 1.68% (0.83)% 135%
2005 $25.89 25.13% $ 1,833 1.70% 1.70% (1.28)% 152%
2004 $20.69 6.87% $ 1,395 1.66% 1.66% (1.35)% 167%
- ---------------------------------------------------
Turner New Enterprise Fund -- Investor Class Shares
- ---------------------------------------------------
2008 $ 5.60 (35.78)% $ 32,759 1.52% 1.90% (0.89)% 323%
2007 $ 8.72 39.30% $ 70,145 1.27% 1.73% (0.98)% 173%
2006 $ 6.26 6.83% $ 24,040 1.61% 2.06% (1.02)% 235%
2005 $ 5.86 29.65% $ 9,144 1.36% 1.87% (1.14)% 227%
2004 $ 4.52 4.15% $ 10,805 1.18% 1.51% (0.83)% 382%
- -----------------------------------------------------
Turner Small Cap Growth Fund -- Investor Class Shares
- -----------------------------------------------------
2008 $26.45 (19.80)% $ 249,434 1.25% 1.51% (0.48)% 141%
2007 $32.98 26.02% $ 317,930 1.25% 1.48% (0.65)% 134%
2006 $26.17 6.04% $ 248,271 1.25% 1.42% (0.79)% 154%
2005 $24.68 15.71% $ 257,149 1.25% 1.44% (0.91)% 153%
2004 $21.33 12.98% $ 237,213 1.25% 1.41% (0.95)% 151%
- -------------------------------------------------------------------
Turner International Core Growth Fund -- Institutional Class Shares
- -------------------------------------------------------------------
2008 $ 8.34 (31.04)% $ 3,335 1.10% 3.05% 1.10% 245%
2007 (4) $12.21 22.10%+ $ 2,409 1.10% 4.63% 0.99% 111%
- -------------------------------------------------------
Turner Midcap Equity Fund -- Institutional Class Shares
- -------------------------------------------------------
2008 $ 7.89 (26.12)% $ 85 0.90% 17.32% 0.09% 168%
2007 (4) $10.68 6.80%+ $ -- 0.90% 31.25% 0.60% 98%
- --------------------------------------------------
Turner Midcap Equity Fund -- Investor Class Shares
- --------------------------------------------------
2008 $ 7.80 (26.48)% $ 429 1.15% 17.02% (0.32)% 168%
2007 (4) $10.61 6.10%+ $ 532 1.15% 22.26% (0.26)% 98%
+ Total return is for the period indicated and has not been annualized.
++ Inclusive of fees paid indirectly, waivers and/or reimbursements.
Excluding fees paid indirectly, the ratio of net expenses to average net
assets would have been 0.94%, 1.54%, 1.26%. 1.11%, 0.95%, and 1.20% for
Midcap Growth Fund, Institutional Class Shares, the New Enterprise Fund,
the Small Cap Growth Fund, the International Core Growth Fund, the Midcap
Equity Fund, Institutional Class Shares, and the Midcap Equity Fund,
Investor Class Shares, respectively.
+++ Excludes effect of in-kind transfers and mergers, as applicable.
(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 June 16, 2008. All ratios for the period have been
annualized.
(4) 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 2008 ANNUAL REPORT | 62 & 63
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 (losses) investment investment capital of dividends and
of period (loss) on investments operations income gains Capital distributions
- -----------------------------------------------------------------------------------------------------------------------
Turner Quantitative Broad Market Equity Fund -- Institutional Class Shares
- --------------------------------------------------------------------------
2008(2) $ 10.00 0.04 (1) (1.31) (1.27) -- -- -- --
- ---------------------------------------------------------------------
Turner Quantitative Broad Market Equity Fund -- Investor Class Shares
- ---------------------------------------------------------------------
2008(2) $ 10.00 0.03 (1) (1.31) (1.28) -- -- -- --
- -----------------------------------------------------
Turner Small Cap Equity Fund -- Investor Class Shares
- -----------------------------------------------------
2008 $ 17.31 (0.06) (1) (2.95) (3.01) -- (2.77) -- (2.77)
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)
- ----------------------------------------------------------------------
Turner Quantitative Large Cap Value Fund -- Institutional Class Shares
- ----------------------------------------------------------------------
2008 $ 12.86 0.16 (1) (2.23) (2.07) (0.12) (1.70) -- (1.82)
2007 $ 11.44 0.14 (1) 1.65 1.79 (0.15) (0.22) -- (0.37)
2006(3) $ 10.00 0.16 (1) 1.33 1.49 (0.05) -- -- (0.05)
- --------------------------------------------------------------------------------
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 Quantitative Broad Market Equity Fund -- Institutional Class Shares
- --------------------------------------------------------------------------
2008(2) $ 8.73 (12.70)%+ $ 542 0.64% 17.95% 1.60% 118%
- ---------------------------------------------------------------------
Turner Quantitative Broad Market Equity Fund -- Investor Class Shares
- ---------------------------------------------------------------------
2008(2) $ 8.72 (12.80)%+ $ 2 0.89% 16.99% 1.28% 118%
- -----------------------------------------------------
Turner Small Cap Equity Fund -- Investor Class Shares
- -----------------------------------------------------
2008 $11.53 (20.20)% $ 24,208 1.45% 1.62% (0.48)% 168%
2007 $17.31 10.14% $ 65,292 1.36% 1.59% (0.70)% 157%
2006 $16.94 5.48% $ 81,340 1.24% 1.70% (0.39)% 143%
2005 $16.06 15.37% $ 67,713 1.43% 1.67% (0.71)% 170%
2004 $13.92 24.75% $ 29,171 1.35% 1.94% (0.25)% 222%
- ----------------------------------------------------------------------
Turner Quantitative Large Cap Value Fund -- Institutional Class Shares
- ----------------------------------------------------------------------
2008 $ 8.97 (18.76)% $ 763 0.69% 6.13% 1.54% 181%
2007 $12.86 15.91% $ 835 0.65% 5.25% 1.15% 271%
2006(3) $11.44 14.92%+ $ 580 0.59% 7.71% 1.52% 252%
+ Total return is for the period indicated and has not been annualized.
++ Inclusive of fees paid indirectly, waivers and/or reimbursements.
Excluding fees paid indirectly, the ratio of net expenses to average net
assets would have been 0.66%, 0.91%, and 0.72% for the Quantitative Broad
Market Equity Fund, Institutional Class Shares, Quantitative Broad Market
Equity Fund, Investor Class Shares, and the Quantitative Large Cap Value
Fund, respectively.
+++ Excludes effect of in-kind transfers and mergers, as applicable.
(1) Based on average shares outstanding.
(2) Commenced operations on June 30, 2008. All ratios for the period have been
annualized.
(3) Commenced operations on October 10, 2005. 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 2008 ANNUAL REPORT | 64 & 65
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
September 30, 2008
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 thirteen active portfolios as of September 30, 2008. 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 Core Growth 130/30 Fund (the "Core Growth 130/30
Fund"), the Turner Emerging Growth Fund (the "Emerging Growth Fund"), the Turner
Large Cap Growth Fund (the "Large Cap Growth Fund"), the Turner Midcap Growth
Fund (the "Midcap Growth Fund"), the Turner New Enterprise Fund (the "New
Enterprise Fund"), Turner Small Cap Growth Fund (the "Small Cap Growth Fund"),
the Turner International Core Growth Fund (the "International Core Growth
Fund"), the Turner Midcap Equity Fund (the "Midcap Equity Fund"), the Turner
Quantitative Broad Market Equity Fund (the "Quantitative Broad Market Equity
Fund"), the Turner Small Cap Equity Fund (the "Small Cap Equity Fund"), and the
Turner Quantitative Large Cap Value Fund (the "Quantitative Large Cap Value
Fund"), each a "Fund" and collectively the "Funds." The International Core
Growth Fund and the Midcap Equity Fund commenced operations on January 31, 2007.
The Core Growth 130/30 Fund commenced operations on July 31, 2008 and the
Quantitative Broad Market Equity Fund commenced operations on June 30, 2008.
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.
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.
Effective March 1, 2008, the Small Cap Equity Fund was reopened to new investors
and existing shareholders.
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 U.S. generally accepted accounting principles 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 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.
66 | TURNER FUNDS 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
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.
SECURITIES SOLD SHORT -- As consistent with the Core Growth 130/30 Fund's
investment objectives, the Core Growth 130/30 Fund may engage in short
sales. Short sales are transactions under which a Fund sells a security it
does not own. To complete such a transaction, the Fund must borrow the
security to make delivery to the buyer. The Fund is then obligated to
replace the security borrowed by purchasing the security at the market
price at the time of the replacement. The price at such time may be more
or less than the price at which the security was sold by the Fund. Until
the security is replaced, the Fund is required to pay the lender amounts
equal to any dividends or interest that accrue during the period of the
loan. Dividends and interest are recorded on the ex-dividend date and are
shown as an expense for financial reporting purposes. To borrow the
security, the Fund also may be required to pay a premium, which would
decrease proceeds of the security sold. The proceeds of the short sale are
retained by the broker, to the extent necessary to meet margin
requirements, until the short position is closed out. A gain, limited to
the price at which the Fund sold the security short, or a loss, unlimited
in size, will be recognized upon the close of a short sale.
Until a Fund closes its short position or replaces the borrowed security,
the Fund will: (a) maintain a segregated account containing cash or liquid
securities at such a level that (i) the amount deposited in the account
plus the amount deposited with the broker as collateral will equal the
current value of the security sold short; and (ii) the amount deposited in
the segregated account plus the amount deposited with the broker as
collateral will not be less than the market value of the security at the
time the security was sold short, or (b) otherwise cover the Fund's short
positions.
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 in 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
TURNER FUNDS 2008 ANNUAL REPORT | 67
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
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 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, 2008, SEI was paid $1,132,791 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
twenty-five basis points (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, Core
Growth 130/30 Fund, Emerging Growth Fund, Large Cap Growth Fund, Midcap Growth
Fund, New Enterprise Fund, Small Cap Growth Fund, Midcap Equity Fund,
Quantitative Broad Market Equity Fund, and Small Cap Equity 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 Funds may earn cash management credits which can be used to offset transfer
agent expenses. During the year ended September 30, 2008, 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 $10,497
Core Growth Fund 1,775
Core Growth 130/30 Fund 19
Emerging Growth Fund 11,357
Large Cap Growth Fund 757
Midcap Growth Fund 36,099
New Enterprise Fund 15,786
Small Cap Growth Fund 15,854
International Core Growth Fund 246
Midcap Equity Fund 288
Quantitative Broad Market Equity Fund 30
Small Cap Equity Fund 1,810
Quantitative Large Cap Value Fund 269
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
68 | TURNER FUNDS 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
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
each Fund, except the Concentrated Growth Fund and New Enterprise Fund, on an
annualized basis through certain dates as disclosed in the following table:
ADVISORY EXPENSE DATE
FEE CAP (THROUGH)
-------- ------- ----------------
Core Growth Fund
INSTITUTIONAL CLASS 0.60%* 0.69% January 31, 2009
INVESTOR CLASS 0.60%* 0.94% January 31, 2009
Core Growth 130/30 Fund
INSTITUTIONAL CLASS 0.80% 1.10% July 31, 2009
INVESTOR CLASS 0.80% 1.35% July 31, 2009
Emerging Growth Fund
INVESTOR CLASS 1.00% 1.40% January 31, 2009
Large Cap Growth Fund
INSTITUTIONAL CLASS 0.60% 0.69% January 31, 2009
INVESTOR CLASS 0.60% 0.94% January 31, 2009
Midcap Growth Fund
INSTITUTIONAL CLASS 0.75% 0.93% May 31, 2009
INVESTOR CLASS 0.75% 1.18% January 31, 2009
RETIREMENT CLASS 0.75% 1.43% January 31, 2009
Small Cap Growth Fund
INVESTOR CLASS 1.00% 1.25% January 31, 2009
International Core Growth Fund
INSTITUTIONAL CLASS 0.85% 1.10% January 31, 2009
Midcap Equity Fund
INSTITUTIONAL CLASS 0.75% 0.90% January 31, 2009
INVESTOR CLASS 0.75% 1.15% January 31, 2009
Quantitative Broad Market Equity Fund
INSTITUTIONAL CLASS 0.50% 0.64% June 30, 2009
INVESTOR CLASS 0.50% 0.89% June 30, 2009
Small Cap Equity Fund
INVESTOR CLASS 0.95% 1.45% January 31, 2009
Quantitative Large Cap Value Fund
INSTITUTIONAL CLASS 0.60% 0.69% January 31, 2009
* PRIOR TO FEBRUARY 1, 2008, THE ADVISORY FEE FOR THE CORE GROWTH FUND WAS
0.75%.
For the remaining Funds, the Concentrated Growth Fund and the New Enterprise
Fund, 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 both the Concentrated Growth Fund and the New Enterprise Fund) 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, 2008, the Funds' advisory fees, before
waivers, were adjusted in accordance with the policy described above:
BASE NET ADVISER
ADVISER PERFORMANCE FEE BEFORE
FEE ADJUSTMENT WAIVERS
-------- ----------- -----------
Concentrated Growth Fund $599,943 $ 95,454 $695,397
New Enterprise Fund 722,070 111,894 833,964
6. REDEMPTION FEES:
Sales or exchanges out of the Core Growth Fund, New Enterprise Fund, Small Cap
Equity Fund and the Quantitative Large Cap Value 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.
TURNER FUNDS 2008 ANNUAL REPORT | 69
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
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, 2008 were as follows
(000):
PURCHASES (000) SALES (000)
--------------- -------------
Concentrated Growth Fund $ 189,233 $ 181,504
Core Growth Fund 1,683,452 1,116,148
Core Growth 130/30 Fund 1,547 403
Emerging Growth Fund 369,225 389,763
Large Cap Growth Fund 86,665 80,658
Midcap Growth Fund 2,225,503 2,027,789
New Enterprise Fund 207,426 201,709
Small Cap Growth Fund 398,192 407,269
International Core Growth Fund 12,290 9,830
Midcap Equity Fund 1,049 900
Quantitative Broad Market Equity Fund 782 558
Small Cap Equity Fund 73,892 105,934
Quantitative Large Cap Value Fund 1,632 1,505
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 Funds. 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, 2008 (000):
UNDISTRIBUTED ACCUMULATED
NET INVESTMENT NET REALIZED PAID-IN
INCOME GAIN/(LOSS) CAPITAL
-------------- ------------ --------
Concentrated Growth Fund $ 446 $ -- $ (446)
Core Growth Fund 24 (24) --
Core Growth 130/30 Fund 1 -- (1)
Emerging Growth Fund 3,478 (3,366) (112)
Midcap Growth Fund 5,576 22 (5,598)
New Enterprise Fund 555 -- (555)
Small Cap Growth Fund 1,071 (55) (1,016)
International Core Growth Fund (28) 28 --
Midcap Equity Fund 1 -- (1)
Small Cap Equity Fund 207 (207) --
The tax character of dividends and distributions declared during the years ended
September 30, 2008 and September 30, 2007 were as follows (000):
ORDINARY LONG-TERM
INCOME CAPITAL GAIN TOTAL
-------- ------------ -------
Core Growth Fund
2008 $ 885 $ -- $ 885
2007 496 -- 496
Emerging Growth Fund
2008 $2,910 $84,527 $87,437
2007 -- 50,964 50,964
Large Cap Growth Fund
2008 $ 89 $ -- $ 89
2007 66 -- 66
International Core
Growth Fund
2008 $ 33 $ -- $ 33
2007 -- -- --
Small Cap Equity Fund
2008 $3,123 $ 6,394 $ 9,517
2007 128 5,573 5,701
Quantitative Large
Cap Value Fund
2008 $ 76 $ 42 $ 118
2007 21 -- 21
70 | TURNER FUNDS 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
As of September 30, 2008, the components of distributable earnings (accumulated
losses) on a tax basis were as follows (000):
TOTAL
POST- DISTRIBUTABLE
UNDISTRIBUTED UNDISTRIBUTED CAPITAL POST- OCTOBER OTHER EARNINGS
ORDINARY LONG-TERM LOSS OCTOBER CURRENCY UNREALIZED TEMPORARY (ACCUMULATED
INCOME CAPITAL GAIN CARRYFORWARD LOSSES LOSSES APPRECIATION DIFFERENCES LOSSES)
------------- ------------- ------------ ---------- -------- ------------ ----------- -------------
Concentrated
Growth Fund $ -- $ -- $(148,986) $ (11,634) $ -- $ (4,393) $ -- $(165,013)
Core Growth Fund 1,519 -- (1,346) (117,791) -- (55,221) -- (172,839)
Core Growth 130/30 Fund -- -- -- (44) -- (106) -- (150)
Emerging Growth Fund -- 12,444 -- -- -- 47,157 (206) 59,395
Large Cap Growth Fund 34 -- (15,594) (5,748) -- (1,892) -- (23,200)
Midcap Growth Fund -- -- (256,451) (31,433) -- (48,476) -- (336,360)
New Enterprise Fund -- -- (8,815) (14,271) -- (3,487) -- (26,573)
Small Cap Growth Fund -- -- (51,190) (15,278) -- 5,261 -- (61,207)
International Core
Growth Fund 42 -- -- (556) (26) (599) -- (1,139)
Midcap Equity Fund -- -- (25) (91) -- (42) -- (158)
Quantitative Broad
Markets Equity Fund 2 -- -- (37) -- (36) -- (71)
Small Cap Equity Fund 17 -- -- (5,170) -- 363 -- (4,790)
Quantitative Large Cap
Value Fund 11 -- -- (118) -- (25) -- (132)
Post-October losses represent losses realized on investment transactions from
November 1, 2007 through September 30, 2008 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, 2008, 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 2012 2014 2015 2016 TOTAL
------ -------- -------- ---- ---- ---- ---- --------
Concentrated Growth Fund $3,435 $132,529 $ 12,850 $ -- $ -- $ -- $172 $148,986
Core Growth Fund -- -- 318 -- 201 827 -- 1,346
Large Cap Growth Fund -- 396 15,137 -- -- -- 61 15,594
Midcap Growth Fund -- 126,952 129,499 -- -- -- -- 256,451
New Enterprise Fund -- 8,182 386 247 -- -- -- 8,815
Small Cap Growth Fund -- 25,196 25,994 -- -- -- -- 51,190
Midcap Equity Fund -- -- -- -- -- -- 25 25
During the year ended September 30, 2008, the Core Growth Fund, Midcap Growth
Fund, New Enterprise Fund, and Small Cap Growth Fund utilized capital loss
carryforwards of $1,259,274, $27,801,581, $881,890, and $2,396,475,
respectively, to offset capital gains.
TURNER FUNDS 2008 ANNUAL REPORT | 71
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
At September 30, 2008, 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, excluding securities sold short were as
follows (000):
NET
FEDERAL UNREALIZED
TAX UNREALIZED UNREALIZED APPRECIATION
FUND COST APPRECIATION DEPRECIATION (DEPRECIATION)
- ---- ---------- ------------ ------------ --------------
Concentrated Growth Fund $ 48,287 $ 2,181 $ (6,574) $ (4,393)
Core Growth Fund 697,046 24,910 (80,131) (55,221)
Core Growth 130/30 Fund 1,141 14 (145) (131)
Emerging Growth Fund 546,663 94,812 (47,655) 47,157
Large Cap Growth Fund 31,818 1,991 (3,883) (1,892)
Midcap Growth Fund 1,251,061 87,255 (135,731) (48,476)
New Enterprise Fund 37,780 1,177 (4,664) (3,487)
Small Cap Growth Fund 276,584 26,879 (21,618) 5,261
International Core Growth Fund 3,951 44 (643) (599)
Midcap Equity Fund 553 17 (59) (42)
Quantitative Broad Market Equity Fund 579 11 (47) (36)
Small Cap Equity Fund 26,966 1,598 (1,235) 363
Quantitative Large Cap Value Fund 788 35 (60) (25)
Management has analyzed the Funds' tax position taken on Federal income tax
returns for all open tax years and has concluded that as of September 30, 2008,
no provision for income tax would be required in the Funds' financial
statements. The Funds' Federal and State income and Federal excise tax returns
for tax years for which the applicable statutes of limitations have not expired
are subject to examination by the Internal Revenue Service and state department
of revenue.
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 Morgan Stanley. 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 in the BlackRock
TempCash Fund, Institutional Shares, a money market 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 September 2006, the Financial Accounting Standards Board (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
72 | TURNER FUNDS 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
disclosures about fair value measurements. As of September 30, 2008, 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.
12. OTHER MATTERS:
Due to volatility in the equity markets, the market value of some of the Funds'
holdings may currently be lower than shown in the Schedules of Investments
("SOI"). The values shown in the SOIs were the market values as of September 30,
2008 and do not reflect any market events after September 30, 2008.
TURNER FUNDS 2008 ANNUAL REPORT | 73
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 Core Growth 130/30 Fund, Turner Emerging Growth Fund,
Turner Large Cap Growth Fund, Turner Midcap Growth Fund, Turner New Enterprise
Fund, Turner Small Cap Growth Fund, Turner International Core Growth Fund,
Turner Midcap Equity Fund, Turner Quantitative Broad Market Equity Fund, Turner
Small Cap Equity Fund, and Turner Quantitative Large Cap Value Fund,
(collectively, the Funds), as of September 30, 2008, and the related statements
of operations for the year or periods then ended, the statements of changes in
net assets for the year or periods in the two-year period then ended, the
statement of cash flows for the period then ended for the Turner Core Growth
130/30 Fund, and the financial highlights for each of the years or periods in
the four-year period then ended and the financial highlights for each of the
years in the five-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 Concentrated Growth Fund, Turner Emerging Growth Fund,
Turner Large Cap Growth Fund, Turner Midcap Growth Fund, Turner New Enterprise
Fund, Turner Small Cap Growth Fund, and Turner Small Cap Equity Fund for the
years or periods ended September 30, 2004 were audited by other auditors. Those
auditors expressed an unqualified opinion on those financial highlights in their
reports dated November 3, 2004.
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, 2008, by correspondence with the custodian
and brokers or 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, 2008, the
results of their operations for the year or period then ended, the changes in
their net assets in each of the years or periods in the two-year period then
ended, the cash flows for the period then ended for the Turner Core Growth
130/30 Fund, 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 26, 2008
74 | TURNER FUNDS 2008 ANNUAL REPORT
NOTICE TO SHAREHOLDERS (Unaudited)
- --------------------------------------------------------------------------------
For shareholders that do not have a September 30th, 2008 tax year end, this
notice is for informational purposes only. For shareholders with a September
30th, 2008 year end, please consult your tax advisor as to the pertinance of
this notice. For the fiscal year ended September 30th, 2008, 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 Core Growth
130/30 Fund ................ 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Turner Emerging
Growth Fund ................ 88.97% 3.33% 92.30% 24.82% 24.81% 0.00% 100.00%
Turner Large Cap
Growth Fund ................ 0.00% 100.00% 100.00% 100.00% 100.00% 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
Growth Fund ................ 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Turner International
Core Growth Fund* .......... 0.00% 100.00% 100.00% 0.39% 95.66% 0.00% 100.00%
Turner Midcap
Equity Fund ................ 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Turner Quantitative Broad
Market Equity Fund ......... 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Turner Small Cap
Equity Fund ................ 67.19% 32.81% 100.00% 10.73% 10.45% 0.00% 100.00%
Turner Quantitative
Large Cap Value Fund ....... 35.68% 64.32% 100.00% 30.58% 29.05% 0.00% 100.00%
(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 2008 the total
amount of foreign source income is $87,170. The total amount of foreign
tax paid is $7,733. 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, 2008. Complete information will be computed and reported in conjunction with
your 2008 Form 1099-DIV.
TURNER FUNDS 2008 ANNUAL REPORT | 75
TRUSTEES AND OFFICERS OF THE TRUST
- --------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS IN
POSITION HELD WITH COMPLEX OTHER
TRUST AND LENGTH PRINCIPAL OCCUPATION(S) OVERSEEN DIRECTORSHIPS
NAME, ADDRESS AND AGE(1) OF SERVICE(2) DURING PAST 5 YEARS BY TRUSTEE HELD
- -------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE*
- -------------------------------------------------------------------------------------------------------------------------------
Robert E. Turner Trustee (since 1996) Chairman and Chief Investment Officer, 13 None
(52) Turner (since 1990).
- -------------------------------------------------------------------------------------------------------------------------------
* Mr. Turner is deemed to be an "Interested Trustee" by virtue of his relationship with Turner.
- -------------------------------------------------------------------------------------------------------------------------------
NON-INTERESTED TRUSTEES
- -------------------------------------------------------------------------------------------------------------------------------
Alfred C. Salvato Chairman of the Chief Investment Officer & Treasurer, 13 None
(50) Board (since 2004); Thomas Jefferson University (since 2003)
Trustee (since 1996) Treasurer since 1995.
- -------------------------------------------------------------------------------------------------------------------------------
Janet F. Sansone Trustee (since 1996) Chief Management Officer, United States 13 None
(63) Government Printing Office (since 2008);
Self-employed Consultant (1999-2007).
- -------------------------------------------------------------------------------------------------------------------------------
John T. Wholihan Trustee (since 1996) Dean Emeritus (since 2007), Professor 13 None
(70) (since 1984) and Dean (1984-2007), College
of Business, Loyola Marymount University.
- -------------------------------------------------------------------------------------------------------------------------------
EXECUTIVE OFFICERS
- -------------------------------------------------------------------------------------------------------------------------------
Thomas R. Trala, Jr. President Chief Operating Officer (since 2004) and N/A N/A
(42) (since 2004) Chief Financial Officer (since 1995),
Turner.
- -------------------------------------------------------------------------------------------------------------------------------
Michael Lawson Controller and Chief Director, Fund Accounting, SEI Investments N/A N/A
SEI Financial Officer (since 2005); Manager, Fund Accounting
One Freedom Valley Drive, (since 2005) (since 1998).
Oaks, PA 19456
(47)
- -------------------------------------------------------------------------------------------------------------------------------
Brian F. McNally Vice-President (since General Counsel and Chief Compliance N/A N/A
(50) 2002), Secretary and Officer (since 2004), Deputy General
Chief Compliance Counsel (2002-2004).
Officer (since 2004),
Turner
- -------------------------------------------------------------------------------------------------------------------------------
Calvin Fisher Vice-President and Director - Mutual Fund Administration and N/A N/A
(35) Assistant Secretary Compliance (since 2005); Manager, Mutual
(since 2006), Turner Fund Administration (since 2001).
- -------------------------------------------------------------------------------------------------------------------------------
(1) Each Trustee and executive officer, unless noted otherwise, may be
contacted by writing to such Trustee or officer c/o Turner Funds, 1205
Westlakes Drive, Suite 100, Berwyn, PA 19312, Attn: Turner Chief Legal
Officer.
(2) Each Trustee serves until his or her respective successor has been duly
elected and qualified. Each officer serves a one-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.
76 | TURNER FUNDS 2008 ANNUAL REPORT
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 and on the next page 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
4/1/08 9/30/08 RATIOS PERIOD*
- --------------------------------------------------------------------------------
Turner Concentrated Growth Fund -- Investor Class Shares
- --------------------------------------------------------------------------------
Actual Fund Return $1,000.00 $ 763.20 1.39% $6.13
Hypothetical 5% Return 1,000.00 1,018.05 1.39 7.01
- --------------------------------------------------------------------------------
Turner Core Growth Fund -- Institutional Class Shares
- --------------------------------------------------------------------------------
Actual Fund Return 1,000.00 828.20 0.69 3.15
Hypothetical 5% Return 1,000.00 1,021.55 0.69 3.49
- --------------------------------------------------------------------------------
Turner Core Growth Fund -- Investor Class Shares
- --------------------------------------------------------------------------------
Actual Fund Return 1,000.00 826.50 0.94 4.29
Hypothetical 5% Return 1,000.00 1,020.30 0.94 4.75
- --------------------------------------------------------------------------------
Turner Core Growth 130/30 Fund -- Institutional Class Shares
- --------------------------------------------------------------------------------
Actual Fund Return 1,000.00 835.00 2.30 3.52**
Hypothetical 5% Return 1,000.00 1,019.50 2.30 11.58
- --------------------------------------------------------------------------------
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE VALUE EXPENSE DURING
4/1/08 9/30/08 RATIOS PERIOD*
- --------------------------------------------------------------------------------
Turner Core Growth 130/30 Fund -- Investor Class Shares
- --------------------------------------------------------------------------------
Actual Fund Return $1,000.00 $ 836.00 2.55% $3.90**
Hypothetical 5% Return 1,000.00 1,012.25 2.55 12.83
- --------------------------------------------------------------------------------
Turner Emerging Growth Fund -- Investor Class Shares
- --------------------------------------------------------------------------------
Actual Fund Return 1,000.00 945.00 1.40 6.81
Hypothetical 5% Return 1,000.00 1,018.00 1.40 7.06
- --------------------------------------------------------------------------------
Turner Large Cap Growth Fund -- Institutional Class Shares
- --------------------------------------------------------------------------------
Actual Fund Return 1,000.00 801.00 0.69 3.11
Hypothetical 5% Return 1,000.00 1,021.55 0.69 3.49
- --------------------------------------------------------------------------------
Turner Large Cap Growth Fund -- Investor Class Shares
- --------------------------------------------------------------------------------
Actual Fund Return 1,000.00 800.40 0.94 4.23
Hypothetical 5% Return 1,000.00 1,020.30 0.94 4.75
- --------------------------------------------------------------------------------
TURNER FUNDS 2008 ANNUAL REPORT | 77
DISCLOSURE OF FUND EXPENSES (continued) (Unaudited)
- --------------------------------------------------------------------------------
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE VALUE EXPENSE DURING
4/1/08 9/30/08 RATIOS PERIOD*
- --------------------------------------------------------------------------------
Turner Midcap Growth Fund -- Institutional Class Shares
- --------------------------------------------------------------------------------
Actual Fund Return $1,000.00 $ 755.70 0.93% $2.36***
Hypothetical 5% Return 1,000.00 1,020.35 0.93 4.70
- --------------------------------------------------------------------------------
Turner Midcap Growth Fund -- Investor Class Shares
- --------------------------------------------------------------------------------
Actual Fund Return 1,000.00 829.80 1.18 5.40
Hypothetical 5% Return 1,000.00 1,019.10 1.18 5.96
- --------------------------------------------------------------------------------
Turner Midcap Growth Fund -- Retirement Class Shares
- --------------------------------------------------------------------------------
Actual Fund Return 1,000.00 828.40 1.43 6.54
Hypothetical 5% Return 1,000.00 1,017.85 1.43 7.21
- --------------------------------------------------------------------------------
Turner New Enterprise Fund -- Investor Class Shares
- --------------------------------------------------------------------------------
Actual Fund Return 1,000.00 782.10 1.48 6.59
Hypothetical 5% Return 1,000.00 1,017.60 1.48 7.47
- --------------------------------------------------------------------------------
Turner Small Cap Growth Fund -- Investor Class Shares
- --------------------------------------------------------------------------------
Actual Fund Return 1,000.00 942.00 1.25 6.07
Hypothetical 5% Return 1,000.00 1,018.75 1.25 6.31
- --------------------------------------------------------------------------------
Turner International Core Growth Fund -- Institutional Class Shares
- --------------------------------------------------------------------------------
Actual Fund Return 1,000.00 735.40 1.10 4.77
Hypothetical 5% Return 1,000.00 1,019.50 1.10 5.55
- --------------------------------------------------------------------------------
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE VALUE EXPENSE DURING
4/1/08 9/30/08 RATIOS PERIOD*
- --------------------------------------------------------------------------------
Turner Midcap Equity Fund -- Institutional Class Shares
- --------------------------------------------------------------------------------
Actual Fund Return $1,000.00 $ 858.50 0.90% $4.18
Hypothetical 5% Return 1,000.00 1,020.50 0.90 4.55
- --------------------------------------------------------------------------------
Turner Midcap Equity Fund -- Investor Class Shares
- --------------------------------------------------------------------------------
Actual Fund Return 1,000.00 857.10 1.15 5.34
Hypothetical 5% Return 1,000.00 1,019.25 1.15 5.81
- --------------------------------------------------------------------------------
Turner Quantitative Broad Market Equity Fund -- Institutional Class Shares
- --------------------------------------------------------------------------------
Actual Fund Return 1,000.00 873.00 0.64 1.51****
Hypothetical 5% Return 1,000.00 1,021.80 0.64 3.23
- --------------------------------------------------------------------------------
Turner Quantitative Broad Market Equity Fund -- Investor Class Shares
- --------------------------------------------------------------------------------
Actual Fund Return 1,000.00 872.00 0.89 2.09****
Hypothetical 5% Return 1,000.00 1,020.55 0.89 4.50
- --------------------------------------------------------------------------------
Turner Small Cap Equity Fund -- Investor Class Shares
- --------------------------------------------------------------------------------
Actual Fund Return 1,000.00 927.60 1.45 6.99
Hypothetical 5% Return 1,000.00 1,017.75 1.45 7.31
- --------------------------------------------------------------------------------
Turner Quantitative Large Cap Value Fund -- Institutional Class Shares
- --------------------------------------------------------------------------------
Actual Fund Return 1,000.00 892.50 0.69 3.26
Hypothetical 5% Return 1,000.00 1,021.55 0.69 3.49
- --------------------------------------------------------------------------------
* Unless otherwise indicated, expenses are equal to the Fund's annualized
expense ratio multiplied by the average account value over the period,
multiplied by 183/366 (to reflect the one-half year period from 4/1/08 -
9/30/08.)
** Expenses are equal to the Fund's annualized expense ratio multiplied by
the average account value over the period, multiplied by 61/366 (to
reflect the period from inception to date, 7/31/08 - 9/30/08.)
*** Expenses are equal to the Fund's annualized expense ratio multiplied by
the average account value over the period, multiplied by 106/366 (to
reflect the period from inception to date, 6/16/08 - 9/30/08.)
**** Expenses are equal to the Fund's annualized expense ratio multiplied by
the average account value over the period, multiplied by 92/366 (to
reflect the period from inception to date, 6/30/08 - 9/30/08.)
78 | TURNER FUNDS 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
TURNER FUNDS
TURNER FUNDS' TRUSTEES
ALFRED C. SALVATO
Chief Investment Officer & Treasurer
Thomas Jefferson University
JANET F. SANSONE
Chief Management Officer
Office of The Public Printer of the United States
ROBERT E. TURNER
Chairman and Chief Investment Officer
Turner Investment Partners, Inc.
DR. JOHN T. WHOLIHAN
Professor, Dean Emeritus, 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; (ii) on the Commission's website at
http://www.sec.gov; and (iii) without charge by calling 1.800.224.6312.
80 | TURNER FUNDS 2008 ANNUAL REPORT
[TURNER FUNDS LOGO]
- --------------------------------------------------------------------------------
TURNER FUNDS
P.O. Box 219805
Kansas City, Missouri 64121-9805
Telephone: 1.800.224.6312
Email: mutualfunds@turnerinvestments.com
Web Site:www.turnerinvestments.com
TUR-AR-002-0305
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:
- ------------------ ----------------------------------------------------- -----------------------------------------------------
2008 2007
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
All fees and All fees and All other fees All fees and All fees and All other fees
services to the services to and services to services to the services to and services to
Trust that were service service Trust that were service service
pre-approved affiliates that affiliates that pre-approved affiliates that affiliates that
were did not require were did not require
pre-approved pre-approval pre-approved pre-approval
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
(a) Audit $243,500 N/A N/A $214,500 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 $ 62,400 N/A N/A $48,400 N/A N/A
(2)
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
(d) All N/A N/A N/A N/A $35,307 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 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:
---------------------------- ----------------- ----------------
2008 2007
---------------------------- ----------------- ----------------
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 $62,400 and $83,707 for 2008 and 2007, 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. 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, 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 changes in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) of the Investment Company Act of 1940)
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, 2008
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title) /s/ Thomas R. Trala, Jr.
----------------------------------
Thomas R. Trala, Jr., President
Date: December 5, 2008
By (Signature and Title) /s/ Michael Lawson
----------------------------------
Michael Lawson, Controller and CFO
Date: December 5, 2008