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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-07454
---------
Pacific Capital Funds
- ------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
111 South King Street Honolulu, HI 96813
- ------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
BISYS Fund Services, 3435 Stelzer Road Columbus, Ohio 43219
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(Name and address of agent for service)
Registrant's telephone number, including area code: 614-470-8000
------------
Date of fiscal year end: July 31, 2003
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Date of reporting period: July 31, 2003
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Form N-CSR is to be used by management investment companies to file reports
with the Commission not later than 10 days after the transmission to
stockholders of any report that is required to be transmitted to stockholders
under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1).
The Commission may use the information provided on Form N-CSR in its regulatory,
disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form
N-CSR, and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
Item 1. Reports to Stockholders.
Include a copy of the report transmitted to stockholders pursuant to
Rule 30e-1 under the Act (17 CFR 270.30e-1).
Pacific Capital Funds
------------------------------------------------------
Annual Report
As of July 31, 2003
Pacific Capital Funds
MANAGED BY THE ASSET MANAGEMENT GROUP OF [Graphic] Bank of Hawaii
MUTUAL FUNDS: . ARE NOT FDIC INSURED . HAVE NO BANK GUARANTEE . MAY LOSE VALUE
Table of Contents
Letter to Shareholders
Page 1
Fund Performance Review
Page 3
Statements of Assets and Liabilities
Page 29
Statements of Operations
Page 32
Statements of Changes in Net Assets
Page 35
Schedules of Portfolio Investments
Page 39
Notes to Financial Statements
Page 65
Financial Highlights
Page 78
Report of Independent Auditors
Page 89
Glossary of Terms
Dow Jones Industrial Average is a price-weighted average based on the
price-only performance of 30 blue chip stocks (The average is computed by
adding the prices of the 30 stocks and dividing by a denominator, which has
been adjusted over the years for stocks splits, stock dividends and
substitutions of stocks).
Gross Domestic Product is the measure of the market value of the goods and
services produced by labor and property in the United States.
Lehman Brothers Government/Credit Bond Index is composed of all bonds that are
investment-grade rated Baa or higher by Moody's or BBB or higher by S&P, if
unrated by Moody's. Issues must have at least one year to maturity. Total
return comprises price appreciation/depreciation and income as a percentage of
the original investment.
Lehman Brothers 5-Year Municipal Bond Index tracks bonds with maturity range of
four to six years.
Lehman Brothers Municipal Bond Index is a broad benchmark for the tax-exempt
bond market. The bonds tracked by this index must have a minimum credit rating
of at least Baa.
Merrill Lynch 1-5 Year U.S. Treasury Index is comprised of approximately 66
issues of U.S. Treasury securities maturing between one and five years
Merrill Lynch Corporate/Government Master Index consists of issues which
include corporate debt obligations rated BBB or better and publicly issued,
non-convertible domestic debt of the U.S. government or any agency thereof.
These quality parameters are based on composites of ratings assigned by
Standard and Poor's Ratings Group and Moody's Investors Service, Inc. Only
notes and bonds with a minimum maturity of one year are included.
Merrill Lynch One-Year Treasury Index consists of yields on Treasury securities
at a constant, the fixed maturities are constructed by the Treasury department,
and are based on the most actively traded marketable Treasury securities.
Yields on these issues are based on composite quotes reported by U.S.
Government securities dealers to the Federal Reserve Bank of New York. To
obtain the constant maturity yields, personnel at Treasury construct a yield
curve each business day, and yield values are then read from the curve at fixed
maturities.
Morgan Stanley Capital International (MSCI), Europe, Australasia and Far East
(EAFE) Index is comprised of a sample of companies representative of the market
structure of 20 European and Pacific Basin countries.
Morgan Stanley Capital International (MSCI), All Country (AC) Far East Free
Index (excluding Japan) represents the 48 developed and emerging markets around
the world that collectively comprise virtually all of the foreign equity stock
markets.
Nasdaq Composite Index is a market price only index that tracks the performance
of domestic common stocks traded on the regular Nasdaq market as well as
National Market System traded foreign common stocks and American Depository
Receipts.
Price-to-Earnings Ratio (P/E) - A valuation ratio of a company's current share
price to its per-share earnings. A high P/E means high projected earnings in
the future. This ratio gives an investor an idea of how much they are paying
for a particular company's earning power.
The Russell Universe - In 1984, Russell created the Russell family of stock
indices as part of a more accurate and comprehensive system for evaluating the
performance of investment managers. Russell now maintains 21 U.S. stock indices
and has launched similar broad-market and style indices in Canada and Japan.
Today, more than $214 billion is invested in funds modeling Russell's U.S.
indices, and more than $1 trillion in funds is benchmarked against the global
family of Russell indices.
Russell 1000 Index measures the performance of the 1,000 largest companies in
the Russell 3000 Index, which represents approximately 90% of the total market
capitalization of the Russell 3000 Index.
Russell 1000 Growth Index measures the performance of 1,000 securities found in
the Russell universe with higher price-to-book ratios and higher forecasted
growth values.
Russell 2000(R) Growth Index tracks the performance of domestically traded
common stocks of small- to mid-sized companies with higher price-to-book ratios
and higher forecasted growth values.
Russell 1000 Value Index measures the performance of the 1,000 largest of the
3,000 largest U.S.-domiciled companies (based on total market capitalization)
with lower price-to-book ratios and lower forecasted growth values.
Russell 2000 Value Index measures the performance of those Russell 2000
companies with lower price-to-book ratios and lower forecasted growth values.
S&P 500 Stock Index is an unmanaged index of 500 selected common stocks, most
of which are listed on the New York Stock Exchange, and is a measure of the
U.S. stock market as a whole.
Yield Curve - a graph of bond yields available at a given moment in time, with
the dividend yield rising along the vertical line and bond durations moving
outward along the horizontal line. A typical yield curve is rising, or
positive, because bonds of longer duration pay more interest.
Letter to Shareholders
Dear Shareholders:
The 12-month period between August 1, 2002 and July 31, 2003 was characterized
by two very different environments. The economy struggled during the first
eight months of the period, causing stocks to fall and helping bonds gain. The
situation reversed itself during the final four months, however, as the economy
showed signs of strength, the stock market surged and bonds lost ground. The
Dow Jones Industrial Average/1/ gained 5.69% during the period, while the S&P
500 Index/1/ returned 10.64%.
Economic Recap
The economy began the period with relatively healthy growth, largely due to a
great deal of stimulus from the Federal Reserve Board (the "Fed"). But a number
of factors combined to drag on the economy, including rising oil prices, a
strike by west-coast dockworkers and low corporate spending. Fears about the
impending war with Iraq, as well as other geopolitical tensions, weighed
heavily on business spending, as international instability clouded corporate
leaders' outlook and caused them to delay spending initiatives.
Low interest rates led to record levels of mortgage refinancing during this
time. That refinancing activity boosted consumers' buying power, helping to
prop up the economy. Even so, Gross Domestic Product/1/ (GDP) grew just 1.4%
during the fourth calendar quarter of 2002. The Fed lowered short-term interest
rates by 0.50 percentage points in November, marking the 12th time the Board
had lowered interest rates during this easing cycle.
The difficult economic environment continued into March, as the run-up to war
cast a pall over business activity. Economic growth appeared to gain strength
in the spring, however, after the invasion of Iraq cleared up the business
outlook. The Fed became concerned during the spring about the possibility of
deflation, a destructive economic environment characterized by falling prices.
The Fed lowered short-term interest rates on June 25, from 1.25% to 1.00%, to
reduce the risk of deflation.
Stock Market Recap
Stocks suffered during most of the period due to the cloudy economic outlook.
Better-than-expected earnings reports in August helped push stocks higher, but
the stock market soon slumped as it became clear that the economy was
stagnating. The market repeated that cycle in the fall: Stocks rose in late
October and early November when corporate profits beat expectations, but then
fell due to the economic uncertainty that resulted from the run-up to war. The
stock market then stagnated during most of the first calendar quarter of 2003.
Stocks surged following the Iraq invasion. Investors anticipating an economic
recovery bid up shares of highly cyclical stocks, particularly technology and
biotechnology shares. Shares of small companies outperformed large stocks
during that period. The rally lasted through June, and stocks traded in a
fairly tight range during July as investors tried to determine the economy's
strength.
Bond Market Recap
Fixed-income investments benefited from falling interest rates during the first
ten months of the period. Investors wary of the struggling stock market sought
bonds for their stability, pushing yields down and prices up. Bonds also
benefited from the weak economy and the Fed's easing monetary policy, which
especially boosted prices on short-term securities. Yields on Treasury bonds
reached 40-year lows in that environment.
Bond yields rose dramatically beginning in mid-June. Investors sold
fixed-income securities out of concern that a stronger economy would lead to
higher interest rates. Investors also shifted money from bonds to stocks, as
bonds' very low yields looked less attractive than potential returns in the
rising stock market. Yields on long-term bonds sustained the greatest increases
in that environment. Short-term bonds' yields remained relatively stable,
anchored by the Fed's indications that it would keep short-term interest rates
low. Corporate bonds outperformed government bonds for the 12-month period, as
investors prized the higher yields offered by corporate issues.
/1/ See Glossary of Terms for additional information
1
Letter to Shareholders--continued
Pacific Capital Funds
Early in the period we positioned the Pacific Capital Equity Funds for an
economic recovery. That strategy hurt returns prior to March, but boosted gains
during the stock-market rally, as the Funds benefited from strong stock
selection.
We positioned the Pacific Capital Fixed-Income Funds defensively during the
period, with durations shorter than those of their benchmarks. That strategy
hurt relative performance until yields rose very late in the period.
The Asset Management Group
We instituted several changes during the period to enhance the management
structure of the Pacific Capital Funds. First, we created our new Analytics and
Risk Management Group in February. That group is comprised of officers who
provide analytical support to the Funds' portfolio managers, to help the
managers optimize the construction and risk profiles of their portfolios. The
Analytics and Risk Management Group also analyzes the performance of the Funds
to give managers detailed feedback on how various strategies contributed to
returns.
Next, we also implemented a team approach to managing the Funds, beginning on
March 1, in which research analysts, trading and portfolio management all work
together to support the investment process. That culmination of experience and
ideas serves to improve efficiency and deliver consistent investment
performance over time. In addition, we partnered with Chicago Equity Partners,
a leading stock analysis firm, to provide additional resources to our research
analysis team.
Finally, we created our Investment Strategy Committee to provide our managers
with a broad view of economic trends that could affect the Pacific Capital
Funds. That committee is chaired by William Barton, Executive Vice President
and Chief Investment Officer, who has 44 years of experience analyzing economic
trends and their impact on financial markets.
Thank you for your confidence in the Pacific Capital Funds. If you have any
questions or would like a fund prospectus, please contact your registered
investment consultant or call Pacific Capital Funds at (800) 258-9232.
Sincerely,
William Barton
The Asset Management Group of Bank of Hawaii
Executive Vice President
Chief Investment Officer
Howard Hodel
The Asset Management Group of Bank of Hawaii
Manager and Executive Vice President
/1/ See Glossary of Terms page for additional information.
NOTICE ABOUT DUPLICATE MAILINGS
In order to reduce expenses of the Pacific Capital Funds incurred in
connection with the mailing of prospectuses, prospectus supplements,
semi-annual reports and annual reports to multiple shareholders at the same
address, Pacific Capital Funds may in the future deliver one copy of a
prospectus, prospectus supplement, semi-annual report or annual report to a
single investor sharing a street address or post office box with other
investors, provided that all such investors have the same last name or are
believed to be members of the same family. This process, called
"householding," will continue indefinitely unless you instruct us otherwise.
If you share an address with another investor and wish to receive your own
prospectus, prospectus supplements, semi-annual reports and annual reports,
please call the Trust toll-free at (800) 258-9232.
2
Pacific Capital Growth Stock Fund
The Equity Investment Team of The Asset Management Group of Bank of Hawaii
Team members include Howard Hodel, Clyde Powers, Bill Carpenter, Teresa Yee,
and Laughon Bryant. Mr. Hodel, Executive Vice President and Manager of the
Adviser's registered investment unit, has served as head of Bank of Hawaii's
Investment Services Group Analytics and Risk Management since January 2003. He
previously served at Bank of America from 1994 to 2003 as the Managing Director
of Market Risk Control Investments, and from 1987 to 1994 as Vice President in
Corporate Finance. Mr. Powers, CFA, Vice President of the Adviser, joined the
Adviser in 1997. He previously served as a Portfolio Manager for Amcore
Investment Group from 1995 to 1997, and as Managing Director-Investment
Operations for Union Capital Advisors from 1984 to 1995. Mr. Carpenter, Vice
President of the Adviser, rejoined the Adviser in 1999. He previously served as
a Small-Cap Analyst for Greenville Capital Management from 1996 to 1998, and as
Portfolio Manager for First Hawaiian Bank's Trust Division from 1985 to 1995
and as the Risk Manager for Bank of Hawaii from 1980 to 1984. Ms. Yee, Vice
President and Portfolio Manager of the Adviser, joined the Adviser in 1998.
Previously she served as an Equity Analyst from 1993 to 1997 at CIBC
Oppenheimer. Mr. Bryant, Assistant Vice President, has served the Adviser as a
Securities Analyst since 1997. Previously, he served as Portfolio Manager from
1993 to 1997 in First Hawaiian Bank's Trust and Investment Division.
How did the Fund perform compared to its benchmark?
For the 12-month period ended July 31, 2003, the Fund returned 10.14% (Class A
Shares without sales charge), trailing its benchmark, the Russell 1000 Growth
Index/1/, at 11.64%.
What were the major factors in the market that influenced the Fund's
performance?
The year ended July 31 was extremely volatile as investors focused on the
impending war with Iraq, corporate malfeasance, a sputtering economy, and a Fed
that couldn't force the economy higher despite cutting rates and providing
ample liquidity. Near year-end however, consumer confidence improved, the job
market started to stabilize, corporate America concluded their inventory
liquidation, and capital spending showed signs of improving. Nasdaq/1/ was the
best performing index for the period and information technology was the top
sector. By the end of the period reported earnings were exceeding expectations,
estimates for the balance of the year were raised, and the equity markets
responded favorably. Good performance resulted from a slight overweight in
technology and good equity selection.
Throughout the year, we positioned the Fund for an improving economy by
increasing the weights in information technology and the depressed financial
sector. The Fund benefited from strong stock selection, including Sandisk,
Express Scripts, Hispanic Broadcasting and Zimmer Holdings. The two sectors
with negative returns for the period were energy and industrials.++/ /
The Asset Management Group Fund Outlook
The recent bear market was longer and deeper by historical standards than most
other market declines. The market rally has surprised investors both in terms
of breadth and magnitude and now may need to consolidate. However, we feel that
the possibility for better conditions is on the horizon, supported by an
improving economy, stronger reported earnings, ample liquidity, and
unattractive alternatives. Therefore, at this time, we will maintain our
overweight in economically sensitive sectors of the economy.
/1/ See Glossary of Terms for additional information.
++ The portfolio composition is subject to change.
3
Pacific Capital Growth Stock Fund
Fund Objective:
The Fund, which seeks long-term growth of principal with a secondary objective
of dividend income, primarily invests in shares of large, high-quality
companies with two characteristics: above-average growth potential and exposure
to large global markets. We seek to invest in such companies when their shares
trade at attractive levels relative to their growth prospects. When
appropriate, the Fund also may invest in shares of smaller firms that we
believe demonstrate the potential for extraordinary growth.
Growth of a $10,000 Investment
[CHART]
Class Y
Shares Russell 1000 Standard and
Class A Class B (No Sales Growth Poor's 500
Shares* Shares** Charge) (Index) Stock Index
------- -------- --------- ------------ ------------
07/31/1993 $9,599 $10,000 $10,000 $10,000 $10,000
10,000 10,418 10,418 10,410 10,381
10,113 10,536 10,536 10,332 10,304
10,288 10,718 10,718 10,620 10,513
10,167 10,592 10,592 10,550 10,415
10,295 10,726 10,726 10,732 10,543
10,460 10,897 10,897 10,980 10,896
10,269 10,698 10,698 10,780 10,602
9,836 10,247 10,247 10,259 10,140
9,985 10,403 10,403 10,308 10,272
10,084 10,506 10,506 10,464 10,440
07/31/1994 9,923 10,338 10,338 10,154 10,182
10,181 10,607 10,607 10,502 10,519
10,503 10,942 10,942 11,087 10,947
10,247 10,675 10,675 10,936 10,683
10,393 10,827 10,827 11,194 10,928
10,093 10,514 10,516 10,836 10,527
10,170 10,595 10,598 11,017 10,680
10,440 10,877 10,891 11,252 10,958
10,687 11,134 11,151 11,724 11,383
10,942 11,400 11,419 12,066 11,720
11,210 11,679 11,700 12,330 12,061
11,547 12,030 12,044 12,760 12,538
07/31/1995 11,853 12,349 12,365 13,253 12,832
12,259 12,772 12,791 13,804 13,260
12,113 12,619 12,652 13,819 13,296
12,633 13,161 13,186 14,456 13,853
12,724 13,256 13,295 14,466 13,804
13,105 13,653 13,696 15,028 14,411
13,199 13,751 13,789 15,114 14,678
13,467 14,030 14,071 15,620 15,183
13,693 14,265 14,310 15,905 15,329
13,513 14,078 14,136 15,926 15,476
13,636 14,206 14,257 16,345 15,703
13,933 14,515 14,581 16,916 16,109
07/31/1996 13,927 14,509 14,578 16,939 16,175
13,272 13,827 13,885 15,946 15,455
13,513 14,078 14,140 16,358 15,783
14,349 14,949 15,017 17,549 16,669
14,473 15,078 15,150 17,655 17,126
15,620 16,272 16,366 18,980 18,426
15,146 15,779 15,861 18,609 18,065
16,119 16,793 16,895 19,914 19,187
16,087 16,759 16,865 19,779 19,342
15,311 15,951 16,044 18,709 18,538
16,609 17,304 17,416 19,951 19,644
17,471 18,201 18,321 21,391 20,850
07/31/1997 18,169 18,928 19,056 22,247 21,780
19,512 20,328 20,464 24,214 23,510
18,449 19,220 19,352 22,797 22,203
19,452 20,265 20,419 23,919 23,419
18,792 19,577 19,727 23,035 22,636
19,486 20,300 20,455 24,013 23,684
19,718 20,543 20,703 24,282 24,092
20,100 20,940 21,117 25,008 24,359
21,624 22,528 22,716 26,889 26,116
22,400 23,336 23,529 27,961 27,453
22,768 23,706 23,929 28,348 27,730
22,098 22,994 23,226 27,544 27,253
07/31/1998 23,465 24,405 24,673 29,231 28,360
23,333 24,268 24,549 29,037 28,058
18,995 19,748 19,986 24,679 24,001
20,678 21,460 21,737 26,575 25,539
21,848 22,679 23,005 28,711 27,616
23,623 24,514 24,866 30,895 29,290
26,734 27,711 28,143 33,681 30,978
27,755 28,759 29,229 35,659 32,273
26,153 27,089 27,551 34,030 31,270
28,084 29,070 29,591 35,822 32,521
27,174 28,104 28,637 35,868 33,781
26,467 27,368 27,896 34,766 32,983
07/31/1999 28,681 29,643 30,249 37,201 34,814
27,394 28,284 28,900 36,018 33,727
27,770 28,644 29,295 36,607 33,560
28,116 28,988 29,673 35,838 32,640
30,659 31,607 32,354 38,544 34,706
32,825 33,817 34,657 40,624 35,411
36,561 37,624 38,609 44,849 37,497
35,391 36,400 37,365 42,746 35,613
40,352 41,486 42,636 44,836 34,939
40,998 42,119 43,311 48,045 38,357
40,010 41,085 42,278 45,759 37,203
38,053 39,059 40,232 43,455 36,439
07/31/2000 41,482 42,562 43,880 46,748 37,338
39,788 40,768 42,067 44,799 36,754
42,490 43,533 44,956 48,855 39,037
40,171 41,127 42,510 44,234 36,976
39,828 40,747 42,151 42,141 36,820
35,452 36,253 37,533 35,929 33,917
35,385 36,176 37,456 34,792 34,083
34,814 35,575 36,862 37,196 35,292
30,198 30,849 32,000 30,881 32,074
26,830 27,326 28,382 27,521 30,042
29,845 30,419 31,633 31,001 32,377
29,736 30,304 31,520 30,545 32,594
07/31/2001 28,568 29,101 30,276 29,838 31,800
27,835 28,328 29,512 29,092 31,487
25,527 25,951 27,053 26,713 29,516
22,866 23,258 24,283 24,046 27,133
24,115 24,519 25,611 25,308 27,650
26,803 27,240 28,467 27,739 29,771
27,102 27,526 28,777 27,687 30,032
25,636 26,037 27,251 27,197 29,594
23,762 24,118 25,272 26,069 29,023
25,473 25,807 27,081 26,970 30,115
23,056 23,373 24,537 24,769 28,289
22,431 22,714 23,859 24,170 28,081
07/31/2002 20,693 20,938 22,021 21,934 26,080
18,738 18,962 19,958 20,728 24,047
18,846 19,048 20,071 20,790 24,205
17,163 17,329 18,262 18,634 21,575
18,493 18,675 19,703 20,343 23,473
19,199 19,363 20,467 21,448 24,855
17,842 17,988 19,025 19,966 23,394
17,407 17,558 18,573 19,482 22,781
17,299 17,415 18,431 19,392 22,439
17,543 17,673 18,714 19,753 22,657
18,982 19,076 20,240 21,214 24,524
19,851 19,964 21,173 22,273 25,816
07/31/2003 19,960 20,050 21,286 22,579 26,146
20,639 20,709 22,021 23,141 26,607
For performance purposes, the above graph has not been adjusted for CDSC
charges.
Average Annual Total Returns as of July 31, 2003
1 Year 5 Year 10 Year
------------------------------------------------------
Class A Shares* 5.70% -3.22% 7.51%
------------------------------------------------------
Class B Shares** 5.21% -3.21% 7.55%
------------------------------------------------------
Class Y Shares (No Sales Charge) 10.34% -2.15% 8.21%
------------------------------------------------------
*Reflects 4.00% Maximum Front-End Sales Charge.
**Reflects Maximum Contingent Deferred Sales Charge of up to 5.00% (CDSC). The
CDSC does not apply to performance over 6 years; therefore, the
10-year return does not reflect the CDSC, nor does the graph reflect
the CDSC charges.
Past performance is no guarantee of future results. Investment return and net
asset value (NAV) will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than the original cost. The chart and table above do
not reflect the deduction of taxes that a shareholder would pay on Fund
distributions or redemptions of Fund shares.
The chart above represents a comparison of a hypothetical $10,000 investment in
the indicated share class versus a similar investment in the Fund's benchmark.
The quoted performance of the Pacific Capital Growth Stock Fund includes the
performance of certain common trust fund ("Commingled") accounts advised by The
Asset Management Group of Bank of Hawaii and managed the same as the Fund in
all material respects, for periods dating back to July 31, 1993, and prior to
the Fund's commencement of operations on November 1, 1993, for the A Class, and
on October 14, 1994, for the Y Class, as adjusted to reflect the expenses
associated with the Fund. The Commingled accounts were not registered with the
Securities and Exchange Commission under the Investment Company Act of 1940
and, therefore, were not subject to the investment restrictions imposed by law
on registered mutual funds. If the Commingled accounts had been registered, the
Commingled accounts' performance may have been adversely affected.
Class B Shares were not in existence prior to March 2, 1998. Performance
calculated for any period up to and through March 2, 1998, is based upon the
performance of the Class A Shares, which does not reflect the higher 12b-1 fees
or the contingent deferred sales charge (CDSC). Had the CDSC and higher 12b-1
fees been incorporated, total return figures may have been adversely affected.
The performance of the Pacific Capital Growth Stock Fund is measured against
the Russell 1000 Growth Index and the Standard & Poor's 500 stock Index. The
Russell 1000 Growth Index measures the performance of 1,000 securities found in
the Russell universe with higher price-to-book ratios and higher forecasted
growth values and the Standard & Poor's 500 Stock Index measures the
performance of the broad domestic stock universe. The index does not reflect
the deduction of fees associated with a mutual fund, such as investment
management and fund accounting fees. The Fund's performance reflects the
deduction of fees for these value-added services. The Fund has changed its
standardized benchmark from the S&P 500 Stock Index to the Russell 1000 Growth
Index to provide a more appropriate market comparison for the Fund's
performance. Investors cannot invest directly in an index, although they can
invest in its underlying securities.
4
Pacific Capital Growth and Income Fund
The Equity Investment Team of The Asset Management Group of Bank of Hawaii
Team members include Howard Hodel, Clyde Powers, Bill Carpenter, Teresa Yee,
and Laughon Bryant. Mr. Hodel, Executive Vice President and Manager of the
Adviser's registered investment unit, has served as head of Bank of Hawaii's
Investment Services Group Analytics and Risk Management since January 2003. He
previously served at Bank of America from 1994 to 2003 as the Managing Director
of Market Risk Control Investments, and from 1987 to 1994 as Vice President in
Corporate Finance. Mr. Powers, CFA, Vice President of the Adviser, joined the
Adviser in 1997. He previously served as a Portfolio Manager for Amcore
Investment Group from 1995 to 1997, and as Managing Director--Investment
Operations for Union Capital Advisors from 1984 to 1995. Mr. Carpenter, Vice
President of the Adviser, rejoined the Adviser in 1999. He previously served as
a Small-Cap Analyst for Greenville Capital Management from 1996 to 1998, and as
Portfolio Manager for First Hawaiian Bank's Trust Division from 1985 to 1995
and as the Risk Manager for Bank of Hawaii from 1980 to 1984. Ms. Yee, Vice
President and Portfolio Manager of the Adviser, joined the Adviser in 1998.
Previously she served a an Equity Analyst from 1993 to 1997 at CIBC
Oppenheimer. Mr. Bryant, Assistant Vice President, has served the Adviser as a
Securities Analyst since 1997. Previously, he served as Portfolio Manager from
1993 to 1997 in First Hawaiian Bank's Trust and Investment Division.
How did the Fund perform compared to its benchmark?
For the 12-month period ended July 31, 2003, the Fund returned 8.31% (Class A
Shares without sales charge), verses the S&P 500 Stock Index/1/ return of
10.64%.
What were the major factors in the market that influenced the Fund's
performance?
The fiscal year has been very volatile with a host of fundamental and exogenous
forces influencing market direction. The period began in selling mode as
investors dumped stocks in the face of ongoing uncertainty with respect to the
economy, Iraq, terrorism, and corporate malfeasance. After hitting a low on
October 8, the market recovered some lost ground based on improving economic
data as well as a reduction in short-term interest rates by the Federal Reserve
Board. However, the rally was short-lived, and investors sold once again as
confidence dipped with news of a possible west coast port shutdown and weaker
than anticipated holiday retail sales. After a brief New Year's rally, the
confluence of mounting geopolitical tension and anemic economic data created
the "perfect storm" for the equity markets, which was characterized by another
sell-off. This downdraft lasted until early March, at which time the market
bounced off its lows due to news of the beginning of the long-awaited conflict
in Iraq coupled with an improved earnings season for corporate America. The
markets then went into rally mode for the rest of the spring up until the end
of this reporting period (07/31/03) as investors began to discount a second
half recovery based on continued improvement with respect to both economic data
and corporate earnings.
Throughout the reporting period, the Fund was positioned for an economic
recovery, with heavier weightings in the more economically sensitive sectors of
the market, including information technology, financials, health care, and
consumer discretionary. Unfortunately, we were a few months early in our
economic recovery call, which led to an underperformance for the first half of
the reporting period. Once the economy responded earlier this year and
continued to exhibit positive signals, the Fund's positioning started to
pay-off with overall returns commensurate with the market for much of 2003.++
What major changes have occurred in the portfolio during the period covered by
the report?
The Fund has maintained a consistent approach to the market for the past year
based on our top-down and bottom-up analysis. Our Chief Investment Officer,
Bill Barton, and the equity management team have positioned the Fund around our
outlook for a possible economic recovery in 2003, as we believe fiscal and
monetary stimulus will serve to spark renewed and sustainable economic growth
for the foreseeable future. We do, however, constantly review our outlook and
will adjust the portfolio accordingly, if necessary.
The Asset Management Group Fund Outlook
The recent bear market was longer and deeper by historical standards than most
other market declines. The market rally has surprised investors both in terms
of breadth and magnitude and now may need to consolidate. However, we feel that
the possibility for better conditions is on the horizon, supported by an
improving economy, stronger reported earnings, ample liquidity, and
unattractive alternatives. Therefore, at this time, we will maintain our
overweight in economically sensitive sectors of the economy.
++ The portfolio composition is subject to change.
/1/ See Glossary of Terms for additional information.
5
Pacific Capital Growth and Income Fund
Fund Objective:
The Fund seeks to provide long-term growth of principal with a secondary
objective of current income by investing in a portfolio of large and
medium-sized company shares broadly diversified across industries. We
especially favor attractively valued stocks of companies we believe can deliver
relatively strong growth within their respective market sectors.
Growth of a $10,000 Investment
[CHART]
Class A Class B Class Y Shares Standard and Poor's
Shares* Shares** (No Sales Charge) 500 Stock Index
------- -------- ----------------- -------------------
07/31/1993 $ 9,600 $10,000 $10,000 $10,000
9,950 10,365 10,366 10,381
9,840 10,250 10,261 10,304
9,920 10,333 10,334 10,513
9,770 10,177 10,188 10,415
9,860 10,271 10,282 10,543
9,980 10,396 10,408 10,896
9,760 10,167 10,178 10,602
9,320 9,708 9,728 10,140
9,470 9,865 9,885 10,272
9,610 10,010 10,031 10,440
9,490 9,885 9,906 10,182
07/31/1994 9,760 10,167 10,188 10,519
10,170 10,594 10,627 10,947
9,910 10,323 10,355 10,683
9,990 10,406 10,439 10,928
9,752 10,158 10,190 10,527
9,882 10,294 10,328 10,680
10,154 10,577 10,601 10,958
10,491 10,929 10,956 11,383
10,641 11,084 11,124 11,720
10,935 11,390 11,434 12,061
11,260 11,730 11,766 12,538
11,317 11,788 11,838 12,832
07/31/1995 11,632 12,116 12,159 13,260
11,582 12,064 12,109 13,296
11,972 12,471 12,520 13,853
11,899 12,395 12,457 13,804
12,313 12,826 12,896 14,411
12,482 13,002 13,064 14,678
12,808 13,342 13,406 15,183
12,980 13,521 13,586 15,329
13,152 13,700 13,780 15,476
13,321 13,876 13,957 15,703
13,603 14,170 14,256 16,109
13,719 14,291 14,380 16,175
07/31/1996 13,022 13,564 13,652 15,455
13,293 13,847 13,939 15,783
14,058 14,643 14,733 16,669
14,142 14,732 14,835 17,126
15,175 15,807 15,920 18,426
14,777 15,393 15,504 18,065
15,811 16,469 16,588 19,187
15,648 16,300 16,420 19,342
14,982 15,606 15,724 18,538
15,883 16,545 16,682 19,644
16,890 17,594 17,743 20,850
17,681 18,418 18,575 21,780
07/31/1997 19,219 20,020 20,201 23,510
18,314 19,077 19,258 22,203
19,242 20,043 20,237 23,419
18,651 19,428 19,605 22,636
19,422 20,231 20,419 23,684
19,740 20,562 20,756 24,092
20,131 20,970 21,180 24,359
21,585 22,484 22,712 26,116
22,322 23,239 23,492 27,453
22,457 23,379 23,646 27,730
21,777 22,653 22,928 27,253
23,012 23,914 24,229 28,360
07/31/1998 22,890 23,786 24,113 28,058
18,880 19,572 19,865 24,001
20,436 21,176 21,494 25,539
21,843 22,615 22,975 27,616
23,373 24,181 24,594 29,290
25,371 26,234 26,696 30,978
26,087 26,966 27,464 32,273
24,586 25,402 25,891 31,270
26,101 26,937 27,486 32,521
26,349 27,181 27,762 33,781
25,702 26,492 27,080 32,983
27,561 28,401 29,038 34,814
07/31/1999 26,019 26,779 27,414 33,727
25,440 26,177 26,810 33,560
25,330 26,047 26,714 32,640
27,327 28,085 28,818 34,706
28,773 29,549 30,351 35,411
31,263 32,082 32,990 37,497
30,320 31,098 31,997 35,613
31,876 32,673 33,653 34,939
34,516 35,364 36,452 38,357
33,290 34,084 35,160 37,203
31,467 32,197 33,239 36,439
33,809 34,577 35,723 37,338
07/31/2000 33,526 34,265 35,425 36,754
35,695 36,464 37,744 39,037
32,944 33,641 34,845 36,976
32,489 33,149 34,349 36,820
29,251 29,834 30,953 33,917
29,949 30,512 31,689 34,083
31,281 31,851 33,095 35,292
26,773 27,241 28,348 32,074
24,328 24,754 25,754 30,042
26,408 26,858 27,969 32,377
26,573 26,992 28,142 32,594
25,770 26,169 27,297 31,800
07/31/2001 25,350 25,710 26,854 31,487
23,543 23,874 24,951 29,516
21,280 21,559 22,568 27,133
21,992 22,267 23,313 27,650
24,091 24,390 25,563 29,771
24,145 24,429 25,624 30,032
23,105 23,357 24,528 29,594
22,174 22,401 23,527 29,023
23,342 23,568 24,778 30,115
21,736 21,942 23,080 28,289
21,371 21,559 22,695 28,081
19,765 19,914 21,001 26,080
07/31/2002 18,050 18,173 19,173 24,047
18,086 18,192 19,211 24,205
16,170 16,260 17,190 21,575
17,454 17,542 18,556 23,473
18,440 18,517 19,597 24,855
17,217 17,293 18,313 23,394
16,851 16,891 17,908 22,781
16,613 16,662 17,676 22,439
16,760 16,796 17,831 22,657
18,105 18,135 19,267 24,524
18,965 18,977 20,175 25,816
19,093 19,091 20,330 26,146
07/31/2003 19,550 19,531 20,806 26,607
For performance purposes, the above graph has not been adjusted for CDSC
charges.
Average Annual Total Returns as of July 31, 2003
1 Year 5 Year 10 Year
------------------------------------------------------
Class A Shares* 4.00% -3.89% 6.93%
------------------------------------------------------
Class B Shares** 3.47% -3.99% 6.92%
------------------------------------------------------
Class Y Shares (No Sales Charge) 8.52% -2.91% 7.60%
------------------------------------------------------
*Reflects 4.00% Maximum Front-End Sales Charge.
**Reflects Maximum Contingent Deferred Sales Charge of up to 5.00% (CDSC). The
CDSC does not apply to performance over 6 years; therefore, the
10-year return does not reflect the CDSC, nor does the graph reflect
the CDSC charges.
Past performance is no guarantee of future results. Investment return and net
asset value (NAV) will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than the original cost. The chart and table above do
not reflect the deduction of taxes that a shareholder would pay on Fund
distributions or redemption of Fund shares.
The chart above represents a comparison of a hypothetical $10,000 investment in
the indicated share class versus a similar investment in the Fund's benchmark.
The quoted performance of the Pacific Capital Growth and Income Fund ("Fund")
includes the performance of certain common trust fund ("Commingled") accounts
advised by The Asset Management Group of Bank of Hawaii and managed the same as
the Fund in all material respects, for periods dating back to July 31, 1993,
and prior to the Fund's commencement of operations on October 14, 1994, as
adjusted to reflect the expenses associated with the Fund. The Commingled
accounts were not registered with the Securities and Exchange Commission under
the Investment Company Act of 1940 and, therefore, were not subject to the
investment restrictions imposed by law on registered mutual funds. If the
Commingled accounts had been registered, the Commingled accounts' performance
may have been adversely affected.
Class B Shares were not in existence prior to March 2, 1998. Performance
calculated for any period up to and through March 2, 1998, is based upon the
performance of the Class A Shares, which does not reflect the higher 12b-1 fees
or the contingent deferred sales charge (CDSC). Had the CDSC and higher 12b-1
fees been incorporated, total return figures may have been adversely affected.
The performance of the Pacific Capital Growth and Income Fund is measured
against the Standard & Poor's 500 Stock Index, an unmanaged index generally
representative of the broad domestic stock universe. The index does not reflect
the deduction of fees associated with a mutual fund, such as investment
management and fund accounting fees. The Fund's performance reflects the
deduction of fees for these value-added services. Investors cannot invest
directly in an index, although they can invest in its underlying securities.
6
Pacific Capital New Asia Growth Fund+
First State Investments
Kes Visuvalingam, CFA and Director of Asian Equities for First State
Investments Asia, is responsible for the day-to-day management of the Fund.
Mr. Visuvalingam heads up a team of eight investment professionals based in
Hong Kong and Singapore. He has 2 years prior experience with Murray Johnstone
Asia and UBS Brinson Asset Management, based in London, Chicago and Singapore.
He is assisted in the management of the Fund by Martin Lau and Ho Hsiu-Mei. Mr.
Lau, CFA, is based in Hong Kong and has eight years of investment experience
managing Greater China and regional portfolios. Ms. Hsiu-Mei, senior portfolio
manager, has 12 years of investment experience, specifically in Asia Pacific
and Taiwan equity markets. The Asian investment operations cooperate closely
with the UK-based Global Emerging Markets team, headed by Angus Tulloch.
Mr. Tulloch has over 20 years of investment experience, managing client assets
for the firm since 1988.
How did the Fund perform compared to its benchmark?
The Fund declined 0.47% (Class A Shares without sales charge) for the 12-month
period ended July 31, 2003, under-performing its benchmark the MSCI AC Far East
ex-Japan Free Index/1/ which rose 6.8%.
What were the major factors in the market that influenced Fund performance?
The 12-months ended July 31, 2003 were characterised by extreme volatility in
Asian (ex-Japan) markets. During the first half of the period, markets fell due
to concerns about global growth (particularly in key destinations for Asian
exports, including the U.S. and Europe), political tensions within the region,
as well as rising geopolitical risk culminating in the Iraq war.
However, Asia benefited from a post-Iraq relief rally in global equity markets
that dominated much of the second half of the review period. This was given
momentum by a rise in U.S. consumer and business confidence, leading to
anticipation of a recovery in U.S. investment spending, which would in turn
sustain demand for Asian exports.
Asian markets initially lagged other regions as Hong Kong, China, Taiwan and
Singapore grappled with the outbreak of Severe Acute Respiratory Syndrome
(SARS), which had a profound affect on confidence, consumption and travel in
the region. However, as SARS abated, Asian markets advanced and outperformed
other regions from May to July.
During the past 12-months, we have increased the Fund's exposure to Thai and
Indian equity markets. Both markets are characterized as offering exposure to
robust, long-term domestic demand. Exposure to India, in particular, in
companies with high return on equity, undemanding valuations, strong management
and very competitive franchises helped to enhance Fund performance.
However, exposure to smaller technology stocks in Taiwan detracted from
performance. Market liquidity was biased towards larger (though less
competitive) stocks within the sector. These stocks are more reliant upon a
broad-based cyclical recovery in demand, rather than growing their market share.
Korean stock selection was another contributor to under-performance during the
review period. Consumer and banking exposure in Korea proved to be less
defensive in a slowing domestic demand environment. Nonetheless, the worst of
the domestic slowdown seems to be nearing an end. A moderation in bad debt
charges has led to a recent recovery in sentiment towards the financial sector,
which has amongst the best fundamentals in the region. We maintain the view
that selective Korean technology stocks are compelling from a growth and
valuation perspective, in an otherwise lack luster global environment. Again,
recent performance appears to vindicate this stance.++
First State Investments Fund Outlook
It appears that the recent equity rally has translated into a broader
anticipation of a second-half economic recovery in the U.S. Confidence has been
buoyed by aggressive fiscal and monetary reflation, aided by a weaker U.S.
dollar.
/1/ See Glossary of Terms for additional information
++ The portfolio composition is subject to change
+ International investing involves increased risk and volatility.
7
Pacific Capital New Asia Growth Fund+--continued
Nevertheless, structural risks remain in this cyclical recovery scenario. The
twin (fiscal and current account) deficits and high consumer indebtedness in
the U.S. are fundamental imbalances that could potentially keep economic growth
sub-par, and demand for Asian exports weak. In addition, the strength of the
Euro may hurt economic growth in the EC. With sustainable growth also elusive
in Japan, the U.S. remains the determinant of global demand.
The U.S. economy has been reliant on the consumer. However, recent rise in U.S.
bond yields may end the mortgage-refinancing boom that has been pivotal in
sustaining consumer expenditure. While there are signs of a pick up in capital
investment, much of this seems to be replacement demand. It is premature to
herald a new investment cycle that can take over from the consumer as the
driver of growth.
Given the uncertain global environment, we maintain our preference for Asia
(ex-Japan) over other regions, based on the potential for superior growth,
valuations, balance sheet quality and dividend yield. Euro currency strength
has helped Asia's export price competitiveness as Asian currencies have largely
tracked the weakening dollar. Despite lackluster global demand, Asian exporters
continue to gain market share. The long-term theme of Asian consumer demand
seems to be firmly intact--particularly in Thailand, India and China--in
contrasts with weakness in other regions. With the peaking of credit card
delinquencies, the foundations are also being established for a tentative
recovery in Korean consumption.
8
Pacific Capital New Asia Growth Fund
Fund Objective:
The Fund's investment objective is long-term growth of capital. The Fund seeks
to achieve this objective by investing in equity securities of rapidly growing
companies located in the developing countries of Asia. The Fund may invest in
these securities directly, or indirectly through other investment companies or
trusts that invest the majority of their assets in the developing countries of
Asia. The Fund does not limit its investments to any particular type or size of
company. The Fund focuses on companies whose earnings the Sub-Adviser expects
to grow or whose share price it believes is undervalued.
Growth of a $10,000 Investment
[CHART]
Class A Class B Class Y Shares MSCI AC Far East
Shares* Shares** (No Sales Charge) Free ex-Japan Index
------- -------- ----------------- -------------------
02/15/1995 $ 9,479 $10,000 $10,000 $10,000
9,488 10,010 10,020 11,011
9,649 10,180 10,180 11,063
9,678 10,210 10,210 10,959
10,275 10,840 10,850 12,294
10,104 10,660 10,670 12,109
07/31/1995 10,626 11,210 11,220 12,300
10,408 10,980 11,000 11,715
10,427 11,000 11,010 11,918
10,265 10,830 10,850 11,737
10,038 10,590 10,610 11,614
10,501 11,079 11,111 12,192
11,522 12,156 12,178 13,309
11,639 12,279 12,302 13,264
11,444 12,074 12,096 13,370
11,872 12,525 12,558 13,745
11,989 12,648 12,682 13,611
11,716 12,361 12,394 13,337
07/31/1996 10,803 11,397 11,439 12,376
11,123 11,735 11,768 12,823
11,289 11,910 11,953 13,146
11,306 11,928 11,968 12,898
12,123 12,790 12,842 13,637
12,181 12,851 12,903 13,550
12,721 13,421 13,484 13,747
12,996 13,711 13,775 13,798
12,309 12,986 13,048 13,044
12,004 12,664 12,726 12,711
12,770 13,473 13,546 13,356
13,252 13,980 14,045 13,713
07/31/1997 13,645 14,395 14,470 13,780
12,122 12,789 12,861 11,243
12,240 12,913 12,986 11,158
9,863 10,405 10,463 8,436
9,381 9,897 9,955 7,900
9,179 9,684 9,742 7,546
8,465 8,930 8,986 6,911
10,047 10,600 10,662 8,496
9,740 10,264 10,347 8,289
9,102 9,592 9,672 7,435
7,992 8,422 8,485 6,284
7,090 7,461 7,531 5,600
07/31/1998 6,980 7,345 7,414 5,444
6,310 6,638 6,704 4,603
7,024 7,379 7,461 5,099
7,816 8,202 8,310 6,491
8,300 8,712 8,834 7,083
8,161 8,564 8,687 7,182
7,984 8,367 8,500 6,948
7,786 8,146 8,277 6,825
8,447 8,842 8,991 7,592
10,135 10,603 10,783 9,345
10,234 10,707 10,900 8,925
11,976 12,515 12,761 10,473
07/31/1999 11,656 12,167 12,410 10,072
11,932 12,457 12,715 10,237
11,116 11,588 11,836 9,417
11,778 12,272 12,551 9,871
14,016 14,601 14,951 10,855
16,079 16,733 17,140 11,644
16,167 16,814 17,234 11,394
16,255 16,895 17,339 10,793
17,049 17,707 18,182 11,306
14,899 15,470 15,899 10,385
14,094 14,636 15,044 9,542
14,645 15,204 15,630 9,996
07/31/2000 13,785 14,300 14,728 9,640
13,807 14,311 14,752 9,519
12,594 13,048 13,452 8,418
11,326 11,727 12,106 7,760
10,796 11,171 11,532 7,374
10,609 10,962 11,333 7,359
12,087 12,492 12,925 8,348
11,469 11,843 12,270 7,943
10,410 10,742 11,134 7,099
10,984 11,322 11,743 7,126
10,929 11,252 11,684 7,086
10,752 11,067 11,497 6,938
07/31/2001 10,388 10,684 11,111 6,674
9,958 10,232 10,654 6,567
8,116 8,343 8,687 5,523
8,767 8,981 9,366 5,806
10,179 10,441 10,888 6,607
11,017 11,287 11,790 7,206
11,193 11,461 11,977 7,502
11,248 11,507 12,035 7,523
11,921 12,191 12,761 8,071
12,087 12,411 12,937 8,188
11,888 12,202 12,738 8,029
11,293 11,588 12,094 7,598
07/31/2002 10,840 11,125 11,626 7,322
10,521 10,788 11,275 7,160
9,330 9,560 10,010 6,346
9,638 9,861 10,338 6,686
10,079 10,290 10,783 7,023
9,285 9,491 9,963 6,540
9,363 9,572 10,057 6,618
8,966 9,155 9,636 6,328
8,502 8,691 9,144 6,039
8,679 8,865 9,339 6,260
9,396 9,583 10,100 6,803
9,947 10,140 10,698 7,200
07/31/2003 10,790 10,985 11,611 7,820
For performance purposes the above graph has not been adjusted for CDSC.
Average Annual Total Returns as of July 31, 2003
Since
Inception
1 Year 5 Year (2/15/95)
--------------------------------------------------------
Class A Shares* -5.65% 7.94% 0.90%
--------------------------------------------------------
Class B Shares** -5.20% 8.24% 1.12%
--------------------------------------------------------
Class Y Shares (No Sales Charge) -0.13% 9.39% 1.78%
--------------------------------------------------------
*Reflects 5.25% Maximum Front-End Sales Charge.
**Reflects Maximum Contingent Deferred Sales Charge of up to 5.00% (CDSC). The
CSDC does not apply to performance over six years, the since
inception return does not reflect the CDSC, nor does the graph
reflect the CDSC charges.
Past performance is no guarantee of future results. Investment return and net
asset value (NAV) will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than the original cost. The chart and table above do
not reflect the deduction of taxes that a shareholder would pay on Fund
distributions or redemption of Fund shares.
The chart above represents a comparison of a hypothetical $10,000 investment in
the indicated share class versus a similar investment in the Fund's benchmark.
Class B Shares were not in existence prior to March 2, 1998. Performance
calculated for any period up to and through March 2, 1998, is based upon the
performance of the Class A Shares, which does not reflect the higher 12b-1 fees
or the contingent deferred sales charge (CDSC). Had the CDSC and higher 12b-1
fees been incorporated, total return figures may have been adversely affected.
The performance of the Pacific Capital New Asia Growth Fund is measured against
the Morgan Stanley Capital International (MSCI) All Country (AC) Far East Free
Index (excluding Japan), which is unmanaged and is generally representative of
the 48 developed and emerging markets around the world that collectively
comprise virtually all of the foreign equity stock markets. The index does not
reflect the deduction of fees associated with a mutual fund, such as investment
management and fund accounting fees. The Fund's performance reflects the
deduction of fees for these value-added services. Investors cannot invest
directly in an index, although they can invest in its underlying securities.
9
Pacific Capital Diversified Fixed Income Fund
Janet E. Katakura
Vice President and Portfolio Manager
As Vice President, Ms. Katakura currently serves as Taxable Fixed-Income Team
Leader. Ms. Katakura has 29 years prior experience in the investment industry,
her most recent 20 years at The Asset Management Group of Bank of Hawaii. Prior
to joining The Asset Management Group of Bank of Hawaii, Ms. Katakura held
positions at Hawaiian Life Insurance Co., Ltd. and First National Bank of
Boston. Ms. Katakura is a member of the Investment Society of Hawaii.
How did the Fund perform compared to its benchmark?
For the 12-month period ended July 31, 2003, the Fund returned 5.76% (Class A
Shares without sales charge) versus its benchmark the Merrill Lynch Corporate &
Government Master Index/1/ return of 6.89%.
What were the major factors in the market that influenced the Fund's
performance?
Both geopolitical and economic events proved extremely influential on the bond
market, resulting in a volatile 12-month period. During much of 2002,
investors' confidence was shaken by corporate scandals, threat of war and
dismal stock market performance, all of which contributed to the "flight to
quality" inherent to government and highly rated corporate bonds--which are the
focus of the Diversified Fixed Income Fund.
Then, with the coming of the New Year, 2003, investors' appetite for risk
increased, as economic releases indicated the economy was improving. In this
environment of better-than-expected corporate financial health, lower quality
bonds provided double-digit returns, reversing the trend of the last several
years. In addition, investors reached down the credit curve to get a higher
yield than what was available in the government market. Consequently, we have
recently emphasized corporate bonds over government securities as we believe
they will provide better return potential.++
The Asset Management Group Fund Outlook
We believe the secular decline in interest rates that we have enjoyed over the
last 20 may have finally bottomed. While we don't expect to see sizeable
increases in rates over the near-term, we do anticipate that the longer-term
trend may call for higher rates. With that in mind, we have become more
defensive in our security selection, positioning the portfolio's duration at
10% shorter than the benchmark index. We will continue to overweight corporate
bonds and have invested in bonds with sinking fund payments, which may help to
provide cash flow to reinvest at the higher yields we anticipate. In this
environment, we will continue to look for opportunities to enhance return
potential.
/1/ See Glossary of terms for additional information.
++ The portfolio composition is subject to change.
10
Pacific Capital Diversified Fixed Income Fund
Fund Objective:
The investment objective of the Diversified Fixed Income Fund is to seek a high
level of current income. The Fund pursues its objective by investing primarily
in high- quality corporate bonds and obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities.
Growth of a $10,000 Investment
[CHART]
Class A Class B Class Y Shares Merrill Lynch Corporate &
Shares* Shares** (No Sales Charge) Government Master Index
------- -------- ----------------- -------------------------
07/31/1993 $ 9,602 $10,000 $10,000 $10,000
9,982 10,395 10,397 10,230
10,036 10,452 10,453 10,279
10,063 10,480 10,482 10,319
9,828 10,235 10,246 10,203
9,873 10,282 10,283 10,248
10,054 10,471 10,482 10,397
9,720 10,122 10,132 10,169
9,295 9,680 9,688 9,947
9,123 9,501 9,509 9,854
9,078 9,454 9,471 9,844
9,024 9,397 9,415 9,828
07/31/1994 9,241 9,623 9,641 10,003
9,213 9,595 9,622 10,014
9,024 9,397 9,424 9,871
8,933 9,303 9,348 9,861
8,889 9,258 9,350 9,840
8,995 9,368 9,462 9,913
9,188 9,568 9,663 10,098
9,471 9,864 9,970 10,319
9,538 9,934 10,042 10,397
9,675 10,076 10,196 10,538
10,201 10,624 10,748 10,979
10,281 10,707 10,834 11,069
07/31/1995 10,180 10,602 10,730 11,030
10,352 10,781 10,911 11,162
10,483 10,917 11,050 11,274
10,672 11,114 11,249 11,449
10,881 11,332 11,473 11,630
11,085 11,545 11,689 11,796
11,110 11,570 11,718 11,875
10,751 11,196 11,334 11,625
10,618 11,058 11,188 11,535
10,468 10,902 11,034 11,454
10,416 10,848 10,992 11,438
10,550 10,987 11,124 11,584
07/31/1996 10,551 10,989 11,138 11,611
10,508 10,943 11,084 11,583
10,686 11,129 11,273 11,784
10,952 11,405 11,554 12,055
11,180 11,644 11,807 12,277
11,002 11,458 11,612 12,146
10,981 11,436 11,603 12,162
10,997 11,453 11,611 12,176
10,803 11,250 11,420 12,051
10,963 11,418 11,580 12,229
11,047 11,504 11,681 12,335
11,171 11,634 11,803 12,485
07/31/1997 11,523 12,001 12,175 12,864
11,361 11,831 12,007 12,719
11,542 12,020 12,200 12,923
11,747 12,234 12,430 13,136
11,800 12,289 12,487 13,193
11,930 12,424 12,627 13,334
12,117 12,619 12,827 13,528
12,045 12,545 12,754 13,495
12,090 12,592 12,792 13,546
12,121 12,637 12,840 13,605
12,277 12,794 13,007 13,754
12,420 12,926 13,161 13,899
07/31/1998 12,396 12,894 13,138 13,912
12,724 13,241 13,486 14,175
13,097 13,609 13,881 14,571
12,957 13,467 13,748 14,491
13,021 13,513 13,807 14,555
13,079 13,567 13,860 14,604
13,133 13,616 13,933 14,710
12,760 13,222 13,531 14,339
12,816 13,272 13,605 14,429
12,810 13,259 13,603 14,477
12,652 13,075 13,414 14,319
12,576 12,988 13,349 14,276
07/31/1999 12,524 12,927 13,285 14,235
12,484 12,890 13,259 14,224
12,624 13,015 13,397 14,355
12,633 13,016 13,410 14,383
12,592 12,967 13,370 14,377
12,493 12,856 13,268 14,304
12,429 12,796 13,218 14,300
12,586 12,937 13,373 14,472
12,834 13,185 13,639 14,697
12,720 13,059 13,521 14,620
12,670 13,000 13,472 14,604
12,922 13,264 13,755 14,894
07/31/2000 13,036 13,360 13,865 15,044
13,228 13,561 14,085 15,255
13,289 13,616 14,154 15,320
13,392 13,700 14,252 15,420
13,662 13,967 14,541 15,699
13,974 14,278 14,875 16,013
14,126 14,425 15,054 16,249
14,290 14,599 15,231 16,425
14,369 14,657 15,305 16,514
14,180 14,468 15,121 16,373
14,243 14,510 15,178 16,473
14,305 14,564 15,261 16,545
07/31/2001 14,663 14,920 15,645 16,964
14,848 15,099 15,844 17,155
15,057 15,303 16,070 17,375
15,417 15,673 16,470 17,791
15,148 15,377 16,174 17,496
14,991 15,207 16,011 17,362
15,080 15,288 16,110 17,465
15,234 15,436 16,277 17,619
14,882 15,082 15,907 17,258
15,207 15,389 16,256 17,594
15,340 15,528 16,401 17,753
15,568 15,735 16,647 17,906
07/31/2002 15,854 16,015 16,956 18,163
16,169 16,323 17,295 18,558
16,554 16,702 17,708 18,959
16,429 16,566 17,579 18,782
16,303 16,427 17,449 18,775
16,731 16,849 17,924 19,263
16,703 16,810 17,899 19,254
16,974 17,074 18,191 19,592
16,988 17,075 18,208 19,567
17,085 17,162 18,300 19,762
17,506 17,575 18,768 20,305
17,453 17,512 18,702 20,231
07/31/2003 16,768 16,810 17,974 19,415
For performance purposes, the above graph has not been adjusted for CDSC
charges.
Average Annual Total Returns as of July 31, 2003
1 Year 5 Year 10 Year
------------------------------------------------------
Class A Shares* 1.51% 5.37% 5.30%
------------------------------------------------------
Class B Shares** 0.96% 5.28% 5.33%
------------------------------------------------------
Class Y Shares (No Sales Charge) 6.00% 6.47% 6.04%
------------------------------------------------------
*Reflects 4.00% Maximum Front-End Sales Charge.
**Reflects Maximum Contingent Deferred Sales Charge of up to 5.00% (CDSC). The
CDSC does not apply to performance over 6 years; therefore, the
10-year return does not reflect the CDSC, nor does the graph reflect
the CDSC charges.
Past performance is no guarantee of future results. Investment return and net
asset value (NAV) will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than the original cost. The chart and table above do
not reflect the deduction of taxes that a shareholder would pay on Fund
distributions or redemption of Fund shares.
The chart above represents a comparison of a hypothetical $10,000 investment in
the indicated share class versus a similar investment in the Fund's benchmark.
The quoted performance of the Pacific Capital Diversified Fixed Income Fund
includes the performance of certain common trust fund ("Commingled") accounts
advised by The Asset Management Group of Bank of Hawaii and managed the same as
the Fund in all material respects, for periods dating back to July 31, 1993,
and prior to the Fund's commencement of operations on October 14, 1994, as
adjusted to reflect the expenses associated with the Fund. The Commingled
accounts were not registered with the Securities and Exchange Commission under
the Investment Company Act of 1940 and, therefore, were not subject to the
investment restrictions imposed by law on registered mutual funds. If the
Commingled accounts had been registered, the Commingled accounts' performance
may have been adversely affected.
Class B Shares were not in existence prior to March 2, 1998. Performance
calculated for any period up to and through March 2, 1998, is based upon the
performance of the Class A Shares, which does not reflect the higher 12b-1 fees
or the contingent deferred sales charge (CDSC). Had the CDSC and higher 12b-1
fees been incorporated, total return figures may have been adversely affected.
The performance of the Pacific Capital Diversified Fixed Income Fund is
measured against the Merrill Lynch Corporate & Government Master Index, an
unmanaged index generally representative of the performance of corporate and
U.S. Government bonds. The index does not reflect the deduction of fees
associated with a mutual fund, such as investment management and fund
accounting fees. The Fund's performance reflects the deduction of fees for
these value-added services. Investors cannot invest directly in an index,
although they can invest in its underlying securities.
11
Pacific Capital Ultra Short Government Fund
Edward Haik
Vice President and Portfolio Manager
Mr. Haik serves as Vice President on the Taxable Fixed-Income Team at The Asset
Management Group of Bank of Hawaii. Mr. Haik has 13 years prior experience in
the investment industry, his most recent eight years at The Asset Management
Group of Bank of Hawaii. Prior experience includes positions at Garban Tokyo,
Ltd., Cantor Fitzgerald Securities, and Merrill Lynch.
How did the Fund perform compared to its benchmark?
For the 12-month period ended July 31, 2003, the Fund posted a gain of 1.67%
(Class A Shares without sales charge) verses its benchmarks the Merrill Lynch
1-Year U.S. Treasury Bill Constant Maturity Index/1/ and the Merrill Lynch
Six-Month U.S. Treasury Bill Index/1/, which returned 1.96% and 1.61%,
respectively.
What were the major factors in the market that influenced the Fund's
performance?
The 12-month period between August 1, 2002 and July 31, 2003 was characterized
by two very different environments. During the first eight months, the economy
struggled, causing stocks to fall and helping bonds gain. However, in the final
four months, as the economy began to show signs of strength, the situation
reversed as the stock market surged and bonds lost ground. Yields on long-term
bonds sustained the greatest increases, while short-term bonds remained
relatively stable, anchored by the Federal Reserve Board's indications to keep
short-term rates low.
During the period, the three-month to three-year yield curve/1/ predominantly
rallied. Treasury-bill yields along the three- and six- month yield curve
dropped the most, while Treasury-notes along the three-year yield curve
experienced only a marginal decline.
The Fund's (Class A Shares without sales charge) out-performance relative to
the Merrill Lynch Six-Month U.S. Treasury Bill Index is largely a result of our
Government Agency overweight. Slight under-performance for the Fund was
primarily due to our underweight of corporates.
Going forward, we will continue to maintain portfolio positions in callable
Agency issues, as we anticipate that higher coupons offered by such securities
may provide a yield advantage to the Fund in a rising rate environment.++
The Asset Management Group Fund Outlook
The Fund maintained a neutral-to-long duration position for most of the fiscal
year. We will likely take a more defensive neutral-to-short duration position
throughout the coming year, as we believe the potential for a U.S. recovery,
supported by an improving economy and stronger reported earnings, may lead to a
somewhat rocky path for bonds.
/1/ See Glossary of Terms page for additional information.
++ The portfolio composition is subject to change.
12
Pacific Capital Ultra Short Government Fund
Fund Objective:
The investment objective of the Ultra Short Government Fund is to provide
investors with high current income consistent with preservation of capital. The
Fund pursues its objective by investing primarily in short-term debt securities
issued or guaranteed by the U.S. Government, its agencies or instrumentalities.
Growth of a $10,000 Investment
[CHART]
Class Y
Shares Merrill Lynch Merrill Lynch
Class A Class B (No Sales 12-Month 6-Month U.S.
Shares* Shares** Charge) Treasury Index Treasury Bill Index
------- ------- --------- -------------- -------------------
06/01/2000 $ 9,823 $10,000 $10,000 $10,000 $10,000
9,895 10,073 10,073 10,076 10,057
07/31/2000 9,947 10,126 10,126 10,136 10,106
10,018 10,192 10,200 10,200 10,161
10,076 10,246 10,273 10,261 10,216
10,127 10,292 10,328 10,312 10,271
10,197 10,367 10,401 10,386 10,330
10,299 10,454 10,497 10,485 10,396
10,389 10,539 10,602 10,605 10,481
10,443 10,598 10,659 10,661 10,524
10,501 10,650 10,720 10,740 10,584
10,535 10,678 10,757 10,789 10,627
10,588 10,714 10,813 10,854 10,678
10,608 10,738 10,836 10,885 10,706
07/31/2001 10,689 10,813 10,921 10,964 10,748
10,744 10,852 10,980 11,007 10,787
10,847 10,949 11,086 11,127 10,855
10,905 11,000 11,137 11,202 10,894
10,887 10,976 11,132 11,214 10,921
10,894 10,986 11,141 11,248 10,937
10,908 10,983 11,159 11,253 10,953
10,942 11,021 11,195 11,288 10,973
10,904 10,966 11,159 11,288 10,986
10,973 11,028 11,232 11,366 11,017
11,011 11,059 11,261 11,398 11,039
11,058 11,099 11,312 11,460 11,064
07/31/2002 11,127 11,162 11,396 11,511 11,084
11,152 11,191 11,424 11,523 11,100
11,186 11,218 11,462 11,569 11,124
11,210 11,235 11,488 11,594 11,142
11,210 11,217 11,491 11,597 11,162
11,254 11,254 11,527 11,641 11,178
11,263 11,256 11,539 11,650 11,191
11,280 11,267 11,559 11,671 11,201
11,290 11,269 11,582 11,692 11,216
11,299 11,282 11,594 11,705 11,225
11,320 11,285 11,607 11,720 11,239
11,329 11,287 11,629 11,743 11,255
07/31/2003 11,313 10,964 11,616 11,737 11,262
Average Annual Total Returns as of July 31, 2003
Since
Inception
1 Year (6/1/00)
-------------------------------------------------
Class A Shares* -0.07% 3.98%
-------------------------------------------------
Class B Shares** -3.06% 2.95%
-------------------------------------------------
Class Y Shares (No Sales Charge) 1.92% 4.85%
-------------------------------------------------
*Reflects 1.75% Maximum Front-End Sales Charge.
**Reflects Maximum Contingent Deferred Sales Charge of up to 5.00% (CDSC).
Past performance is no guarantee of future results. Investment return and net
asset value (NAV) will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than the original cost. The chart and table above do
not reflect the deduction of taxes that a shareholder would pay on Fund
distributions or redemption of Fund shares.
The chart above represents a comparison of a hypothetical $10,000 investment in
the indicated share class versus a similar investment in the Fund's benchmark.
Class A and Class B Shares were not in existence prior to August 1, 2000.
Performance calculated for any period up to and through August 1, 2000, is
based upon the performance of Class Y Shares, which does not reflect the higher
12b-1 fees or the contingent deferred sales charge (CDSC). Had the CDSC and
higher 12b-1 fees been incorporated, total return figures may have been
adversely affected.
The Merrill Lynch 12-Month U.S. Treasury Index and the Merrill Lynch 6-Month
U.S. Treasury Bill Index consist of yields on Treasury securities at a
constant, the fixed maturities are constructed by the Treasury department, and
are based on the most actively traded marketable Treasury securities. Yields on
these issues are based on composite quotes reported by U.S. Government
securities dealers to the Federal Reserve Bank of New York. To obtain the
constant maturity yields, personnel at Treasury construct a yield curve each
business day, and yield values are then read from the curve at fixed maturities.
13
Pacific Capital Short Intermediate U.S. Government Securities Fund
Edward Haik
Vice President and Portfolio Manager
Mr. Haik serves as Vice President on the Taxable Fixed-Income Team at The Asset
Management Group of Bank of Hawaii. Mr. Haik has 13 years prior experience in
the investment industry, his most recent eight years at The Asset Management
Group of Bank of Hawaii. Prior experience includes positions at Garban Tokyo,
Ltd., Cantor Fitzgerald Securities, and Merrill Lynch.
How did the Fund perform compared to its benchmark?
For the 12-month period ended July 31, 2003, the Fund (Class A Shares without
sales charge) posted a gain of 3.28% verses its benchmark the Merrill Lynch 1-5
Year U.S. Treasury Index/1/ return of 3.42%.
What were the major factors in the market that influenced the Fund's
performance?
The 12-month period between August 1, 2002 and July 31, 2003 was characterized
by two very different environments. During the first eight months, the economy
struggled, causing stocks to fall and helping bonds gain. However, in the final
four months, as the economy began to show signs of strength, the situation
reversed as the stock market surged and bonds lost ground.
During the period, the three-month to five-year yield curve predominantly
rallied. Treasury-bill yields along the three- and six- month yield curve
dropped the most, while Treasury-notes along the five-year yield curve
experienced a marginal increase.
While the Fund performed in line with its benchmark, primarily due to our
Government Agency overweight and longer duration position, slight
underperformance was largely a result of our corporate underweight.
Going forward, we will continue to maintain portfolio positions in callable
Agency issues, as we anticipate that higher coupons offered by such securities
may provide a yield advantage for the Fund in a rising rate environment.++
The Asset Management Group Fund Outlook
The Fund maintained a neutral-to-long duration position for most of the fiscal
year. We will likely take a more defensive neutral-to-short duration position
throughout the coming year, as we believe the potential for a U.S. recovery,
supported by an improving economy and stronger reported earnings, may lead to a
somewhat rocky path for bonds.
/1/ See Glossary of terms for additional information.
++ The portfolio composition is subject to change.
14
Pacific Capital Short Intermediate U.S. Government Securities Fund
Fund Objective:
The primary investment objective of the Short Intermediate U.S. Government
Securities Fund, a diversified portfolio, is to provide investors with a high
level of current income, consistent with prudent risk of capital. The potential
for some capital appreciation is a secondary consideration. The Fund pursues
these objectives by investing primarily in U.S. Treasury securities and
repurchase agreements that are collateralized by U.S. Treasury securities. The
Fund maintains an average maturity of two to five years. The Fund focuses on
maximizing income consistent with prudent investment risk within this maturity
range.
Growth of a $10,000 Investment
[CHART]
Merrill Lynch
Class A Class Y Shares 1-5 Year U.S.
Shares* (No Sales Charge) Treasury Index
------- ----------------- ---------------
12/13/1993 $ 9,775 $10,000 $10,000
9,790 10,015 10,037
9,869 10,096 10,120
9,672 9,894 10,016
9,485 9,703 9,920
9,389 9,605 9,863
9,391 9,607 9,876
9,374 9,590 9,895
07/31/1994 9,506 9,724 9,999
9,520 9,739 10,032
9,378 9,594 9,978
9,357 9,582 9,990
9,284 9,519 9,936
9,306 9,533 9,963
9,460 9,691 10,117
9,649 9,886 10,289
9,691 9,931 10,345
9,790 10,034 10,451
10,054 10,307 10,695
10,110 10,367 10,758
07/31/1995 10,101 10,359 10,785
10,177 10,440 10,859
10,242 10,509 10,919
10,359 10,630 11,026
10,500 10,780 11,144
10,600 10,884 11,241
10,685 10,985 11,343
10,543 10,830 11,261
10,443 10,741 11,227
10,390 10,689 11,214
10,369 10,670 11,222
10,466 10,772 11,316
07/31/1996 10,493 10,790 11,356
10,494 10,805 11,383
10,616 10,921 11,506
10,766 11,090 11,663
10,888 11,206 11,775
10,803 11,132 11,744
10,828 11,149 11,796
10,838 11,161 11,815
10,744 11,079 11,786
10,853 11,194 11,898
10,924 11,269 11,983
10,994 11,344 12,075
07/31/1997 11,219 11,566 12,249
11,151 11,510 12,233
11,270 11,634 12,345
11,402 11,774 12,459
11,426 11,801 12,484
11,526 11,905 12,579
11,696 12,071 12,727
11,645 12,034 12,723
11,672 12,064 12,770
11,733 12,129 12,829
11,808 12,209 12,904
11,881 12,287 12,979
07/31/1998 11,918 12,328 13,035
12,178 12,598 13,246
12,536 12,970 13,489
12,546 12,984 13,545
12,455 12,893 13,509
12,497 12,939 13,553
12,533 12,979 13,616
12,286 12,726 13,486
12,347 12,792 13,586
12,367 12,816 13,627
12,248 12,683 13,579
12,243 12,681 13,622
07/31/1999 12,252 12,707 13,651
12,274 12,719 13,688
12,374 12,838 13,787
12,370 12,837 13,815
12,364 12,834 13,833
12,316 12,787 13,830
12,259 12,731 13,803
12,345 12,823 13,901
12,477 12,948 14,018
12,486 12,960 14,038
12,524 13,003 14,095
12,671 13,172 14,269
07/31/2000 12,739 13,246 14,360
12,875 13,391 14,484
12,969 13,491 14,598
13,065 13,594 14,682
13,257 13,796 14,848
13,480 14,031 15,057
13,648 14,193 15,245
13,754 14,321 15,362
13,852 14,410 15,492
13,791 14,364 15,493
13,844 14,423 15,571
13,895 14,464 15,620
07/31/2001 14,086 14,681 15,846
14,189 14,776 15,955
14,434 15,048 16,263
14,577 15,201 16,451
14,459 15,081 16,350
14,426 15,036 16,317
14,453 15,081 16,362
14,533 15,168 16,469
14,397 15,014 16,293
14,586 15,228 16,520
14,675 15,323 16,617
14,820 15,479 16,783
07/31/2002 15,027 15,713 17,056
15,158 15,838 17,167
15,318 16,008 17,394
15,344 16,038 17,411
15,263 15,957 17,305
15,459 16,164 17,536
15,439 16,146 17,510
15,551 16,266 17,635
15,558 16,277 17,657
15,612 16,336 17,694
15,729 16,461 17,846
15,751 16,487 17,851
07/31/2003 15,520 16,248 17,639
Average Annual Total Returns as of July 31, 2003
Since
Inception
1 Year 5 Year (12/13/93)
---------------------------------------------------------
Class A Shares* 0.97% 4.95% 4.67%
---------------------------------------------------------
Class Y Shares (No Sales Charge) 3.41% 5.68% 5.17%
---------------------------------------------------------
*Reflects 2.25% Maximum Front-End Sales Charge.
Past performance is no guarantee of future results. Investment return and net
asset value (NAV) will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than the original cost. The chart and table above do
not reflect the deduction of taxes that a shareholder would pay on Fund
distributions or redemption of Fund shares.
The chart above represents a comparison of a hypothetical $10,000 investment in
the indicated share class versus a similar investment in the Fund's benchmark.
The performance for the Class Y Shares of the Pacific Capital Short
Intermediate U.S. Government Securities Fund prior to 10/14/94 is based on the
performance of the Class A Shares.
The performance of the Pacific Capital Short Intermediate U.S. Government
Securities Fund is measured against the Merrill Lynch 1-5-Year U.S. Treasury
Index, an unmanaged index which tracks the performance of Treasury bonds in a
maturity range of one to five years. The index does not reflect the deduction
of fees associated with a mutual fund, such as investment management and fund
accounting fees. The Fund's performance reflects the deduction of fees for
these value-added services. Investors cannot invest directly in an index,
although they can invest in its underlying securities.
15
Pacific Capital Tax Free Securities Fund+
The Fixed Income Investment Team of The Asset Management Group of Bank of Hawaii
Robert Crowell, Executive Vice President and Senior Portfolio Manager on the
Fixed Income Investment Team, is responsible for the day-to-day management of
the Tax Free Securities and the Tax Free Short Intermediate Securities Fund.
Mr. Crowell has served with Bank of Hawaii for 33 years. As Chief Investment
Officer of the Treasury Group, he managed the Bank's $3 billion investment
portfolio. From 1984 to 1993, he served as principal of the Bank's Municipal
Securities Dealer Operations.
How did the Fund perform compared to its benchmark?
For the 12-month period ended July 31, 2003, the Fund gained 3.54% (Class A
Shares without sales charge) versus its benchmark the Lehman Brothers Municipal
Bond Index/1/ return of 3.60%.
What were the major factors in the market that influenced the Fund's
performance?
Fixed-income investments benefited from historically low interest rates during
the first 10 months of the fiscal year, even dropping to ultra-low levels in
June 2003. However, by July month-end, interest rates increased dramatically in
the intermediate- to long-end of the yield curve, ending the year where they
started with 10-year AAA bonds yielding just over 4.00%.
The Federal Reserve Board reduced the overnight Fed funds rate from 1.75% at
the beginning of the fiscal year to 1.00% on June 25, 2003, surprisingly ending
the rally in long-term interest rates.
The increase in rates at the end of the year explains the negative absolute
return in the Fund for the latest quarter (-1.31% for the three-month period
ended 7/31/03) and the moderate return of 3.54% (Class A Shares without sales
charge) for the year.
The Fund's (Class A Shares without sales charge) slight under-performance
relative to the benchmark was largely a result of our defensive position,
holding the portfolio duration slightly short of the index. However, the strong
rebound in interest rates at the end of the fiscal year helped to boost our
overall performance.++
The Asset Management Group Fund Outlook
Being short the index helped to benefit Fund performance in the latest quarter.
Going forward, we will continue to position the fund defensively for both
credit quality and interest rate risk. Currently, we are wary of the affect on
interest rates stemming from a potential U.S. recovery. While we remain
cautious, interest rate levels are more attractive than they were in June and
we are looking for opportunities to slowly scale into the market to maintain
the Fund's income.
/1/ See Glossary of terms for additional information.
+ The Fund's income may be subject to the federal alternative minimum tax and
to certain state and local taxes.
++ The portfolio composition is subject to change.
16
Pacific Capital Tax-Free Securities Fund
Fund Objective:
The Tax-Free Securities Fund's investment objective is to seek high current
income that is exempt from federal and Hawaii income tax. With this in mind, we
tend to be more moderate on interest rate bets and look toward more consistent
long-term performance. Our strategy is to select bonds that we believe provide
good relative value and structural fit within the context of our interest rate
outlook, while heavily emphasizing higher-quality bonds. The Fund intends to
invest at least 50% to 60% of its holdings in Hawaiian municipal bonds. Our
primary goal is to provide a high level of double tax-exempt income (free from
federal and state taxes), while providing diversification through national
issues from states that are economically sound and viable.
Growth of a $10,000 Investment
[CHART]
Class A Class B Class Y Shares Lehman Brothers Municipal
Shares* Shares** (No Sales Charge) Bond Index
------- -------- ----------------- -------------------------
07/31/1993 $ 9,600 $10,000 $10,000 $10,000
9,711 10,116 10,117 10,208
9,814 10,223 10,224 10,324
9,804 10,213 10,224 10,344
9,693 10,097 10,107 10,253
9,916 10,330 10,331 10,469
10,019 10,436 10,447 10,589
9,739 10,145 10,156 10,314
9,311 9,699 9,708 9,895
9,358 9,748 9,767 9,979
9,423 9,816 9,825 10,066
9,348 9,738 9,757 10,004
07/31/1994 9,516 9,913 9,932 10,187
9,534 9,932 9,961 10,223
9,395 9,787 9,815 10,073
9,143 9,525 9,582 9,893
8,960 9,334 9,390 9,714
9,177 9,559 9,619 9,928
9,478 9,873 9,933 10,212
9,764 10,171 10,234 10,509
9,858 10,269 10,334 10,630
9,851 10,262 10,330 10,643
10,177 10,601 10,672 10,982
10,055 10,475 10,547 10,887
07/31/1995 10,152 10,575 10,650 10,990
10,240 10,667 10,745 11,130
10,300 10,730 10,810 11,200
10,458 10,894 10,977 11,362
10,646 11,090 11,179 11,551
10,779 11,228 11,320 11,662
10,838 11,290 11,374 11,750
10,736 11,184 11,281 11,670
10,554 10,994 11,092 11,521
10,517 10,955 11,045 11,489
10,496 10,934 11,027 11,484
10,605 11,047 11,144 11,609
07/31/1996 10,711 11,158 11,257 11,715
10,700 11,147 11,249 11,713
10,853 11,306 11,411 11,877
10,971 11,429 11,537 12,011
11,166 11,631 11,744 12,231
11,107 11,570 11,684 12,179
11,119 11,583 11,699 12,202
11,201 11,668 11,788 12,315
11,009 11,468 11,587 12,151
11,110 11,573 11,695 12,253
11,271 11,741 11,879 12,437
11,389 11,864 11,994 12,570
07/31/1997 11,712 12,201 12,336 12,918
11,572 12,055 12,203 12,796
11,701 12,189 12,330 12,949
11,746 12,235 12,390 13,032
11,810 12,302 12,461 13,109
12,006 12,507 12,682 13,300
12,152 12,659 12,839 13,437
12,128 12,634 12,816 13,441
12,119 12,617 12,810 13,453
12,019 12,529 12,707 13,392
12,234 12,762 12,937 13,604
12,290 12,813 12,999 13,657
07/31/1998 12,314 12,818 13,027 13,691
12,497 13,012 13,223 13,904
12,668 13,185 13,406 14,077
12,646 13,153 13,385 14,077
12,692 13,192 13,436 14,127
12,745 13,228 13,482 14,162
12,874 13,366 13,634 14,330
12,788 13,269 13,546 14,267
12,800 13,274 13,562 14,287
12,823 13,289 13,589 14,323
12,741 13,185 13,493 14,240
12,526 12,967 13,282 14,035
07/31/1999 12,562 12,999 13,323 14,085
12,431 12,857 13,187 13,973
12,429 12,848 13,188 13,978
12,260 12,665 13,013 13,827
12,394 12,796 13,157 13,974
12,317 12,709 13,079 13,869
12,244 12,626 13,005 13,810
12,402 12,780 13,162 13,970
12,662 13,041 13,453 14,276
12,574 12,942 13,363 14,191
12,500 12,857 13,288 14,118
12,811 13,170 13,620 14,492
07/31/2000 12,974 13,329 13,796 14,693
13,150 13,501 13,985 14,919
13,072 13,399 13,892 14,842
13,224 13,560 14,070 15,004
13,298 13,628 14,152 15,118
13,657 13,974 14,535 15,491
13,758 14,068 14,632 15,644
13,806 14,124 14,700 15,695
13,909 14,220 14,813 15,836
13,738 14,037 14,635 15,665
13,868 14,160 14,776 15,834
13,970 14,256 14,887 15,940
07/31/2001 14,152 14,433 15,083 16,176
14,399 14,676 15,350 16,443
14,329 14,582 15,264 16,387
14,499 14,746 15,463 16,574
14,336 14,584 15,292 16,434
14,207 14,431 15,145 16,278
14,435 14,667 15,405 16,560
14,618 14,844 15,602 16,760
14,356 14,569 15,327 16,432
14,639 14,847 15,632 16,752
14,704 14,904 15,705 16,854
14,878 15,070 15,893 17,033
07/31/2002 15,067 15,238 16,098 17,253
15,215 15,392 16,258 17,460
15,543 15,714 16,611 17,842
15,315 15,474 16,373 17,546
15,226 15,374 16,281 17,472
15,520 15,662 16,598 17,841
15,488 15,619 16,567 17,796
15,677 15,801 16,788 18,046
15,701 15,814 16,801 18,056
15,809 15,914 16,936 18,176
16,134 16,231 17,272 18,601
16,084 16,170 17,237 18,521
07/31/2003 15,601 15,674 16,710 17,873
For performance purposes, the above graph has not been adjusted for CDSC
charges.
Average Annual Total Returns as of July 31, 2003
1 Year 5 Year 10 Year
------------------------------------------------------
Class A Shares* -0.58% 4.00% 4.55%
------------------------------------------------------
Class B Shares** -1.10% 3.94% 4.60%
------------------------------------------------------
Class Y Shares (No Sales Charge) 3.80% 5.11% 5.27%
------------------------------------------------------
*Reflects 4.00% Maximum Front-End Sales Charge.
**Reflects Maximum Contingent Deferred Sales Charge of up to 5.00% (CDSC). The
CDSC does not apply to performance over 6 years; therefore, the
10-year return does not reflect the CDSC, nor does the graph reflect
the CDSC charges.
Past performance is no guarantee of future results. Investment return and net
asset value (NAV) will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than the original cost. The chart and table above do
not reflect the deduction of taxes that a shareholder would pay on Fund
distributions or redemption of Fund shares.
The chart above represents a comparison of a hypothetical $10,000 investment in
the indicated share class versus a similar investment in the Fund's benchmark.
The quoted performance of the Pacific Capital Tax-Free Securities Fund includes
the performance of certain common trust fund ("Commingled") accounts advised by
The Asset Management Group of Bank of Hawaii and managed the same as the Fund
in all material respects, for periods dating back to July 31, 1993, and prior
to the Fund's commencement of operations on October 14, 1994, as adjusted to
reflect the expenses associated with the Fund. The Commingled accounts were not
registered with the Securities and Exchange Commission under the Investment
Company Act of 1940 and, therefore, were not subject to the investment
restrictions imposed by law on registered mutual funds. If the Commingled
accounts had been registered, the Commingled accounts' performance may have
been adversely affected.
Class B Shares were not in existence prior to March 2, 1998. Performance
calculated for any period up to and through March 2, 1998, is based upon the
performance of the Class A Shares, which does not reflect the higher 12b-1 fees
or the contingent deferred sales charge (CDSC). Had the CDSC and higher 12b-1
fees been incorporated, total return figures may have been adversely affected.
The performance of the Pacific Capital Tax-Free Securities Fund is measured
against the Lehman Brothers Municipal Bond Index, which is an unmanaged index
generally representative of a broad range of maturities. The index does not
reflect the deduction of fees associated with a mutual fund, such as investment
management and fund accounting fees. The Fund's performance reflects the
deduction of fees for these value-added services. Investors cannot invest
directly in an index, although they can invest in its underlying securities.
17
Pacific Capital Tax Free Short Intermediate Securities Fund+
The Fixed Income Investment Team of The Asset Management Group of Bank of Hawaii
Robert Crowell, Executive Vice President and Senior Portfolio Manager on the
Fixed Income Investment Team, is responsible for the day-to-day management of
the Tax Free Securities and the Tax Free Short Intermediate Securities Fund.
Mr. Crowell has served with Bank of Hawaii for 33 years. As Chief Investment
Officer of the Treasury Group, he managed the Bank's $3 billion investment
portfolio. From 1984 to 1993, he served as principal of the Bank's Municipal
Securities Dealer Operations.
How did the Fund perform compared to its benchmark?
For the 12-month period ended July 31, 2003, the Fund gained 2.62% (Class A
Shares without sales charge) versus its benchmark the Lehman Brothers 5 Year
Municipal Bond Index/1/ return of 3.96%.
What were the major factors in the market that influenced the Fund's
performance?
Fixed-income investments benefited from historically low interest rates during
the first 10 months of the fiscal year, even dropping to ultra-low levels in
June 2003. However, by July month-end, interest rates increased dramatically in
the intermediate- to long-end of the yield curve, ending the year where they
started with 10-year AAA bonds yielding just over 4.00%.
The Federal Reserve Board reduced the overnight fed funds rate from 1.75% at
the beginning of the fiscal year to 1.00% on June 25, 2003, surprisingly ending
the rally in long-term interest rates.
The increase in rates at the end of the year explains the negative absolute
return in the Fund for the latest quarter (-0.51% for the three-month period
ended 7/31/03) and the moderate return of 2.62% (Class A Shares without sales
charge) for the year.
The Fund's (class A Shares without sales charge) under-performance relative to
the benchmark was largely a result of our defensive position, holding the
portfolio duration slightly short of the index. However, the strong rebound in
interest rates at the end of the fiscal year allowed for some catch-up in
performance for the 12-month period.++
The Asset Management Group Fund Outlook
Being short the index helped to benefit Fund performance in the latest quarter.
Going forward, we will continue to position the fund defensively for both
credit quality and interest rate risk, as we are wary of the affect on interest
rates stemming from a potential U.S. recovery. While we remain cautious,
interest rate levels are more attractive than they were in June and we are
looking for opportunities to slowly scale into the market to maintain the
Fund's income.
+ The Fund's income may be subject to the federal alternative minimum tax and
to certain state and local taxes.
/1/ See Glossary of terms for additional information.
++ The portfolio composition is subject to change.
18
Pacific Capital Tax-Free Short Intermediate Securities Fund
Fund Objective:
The Tax-Free Short Intermediate Securities Fund seeks to provide a high level
of tax-exempt income and more price stability than a long-term bond fund. The
Fund also provides double tax-exempt income for residents of Hawaii--50% to 60%
of the Fund's holdings are invested in Hawaiian municipal bonds--while
fulfilling diversification through national municipal issues.
Growth of a $10,000 Investment
[CHART]
Class A Class Y Shares Lehman Brothers 5-Year
Shares* (No Sales Charge) Municipal Bond Index
------- ----------------- ----------------------
07/31/1993 $ 9,772 $10,000 $10,000
9,871 10,102 10,144
9,911 10,142 10,221
9,911 10,152 10,247
9,891 10,132 10,194
9,990 10,234 10,345
10,059 10,305 10,437
9,950 10,193 10,267
9,802 10,041 10,054
9,842 10,091 10,116
9,871 10,122 10,167
9,861 10,112 10,161
07/31/1994 9,931 10,183 10,279
9,960 10,224 10,329
9,921 10,183 10,259
9,832 10,112 10,192
9,769 10,068 10,099
9,831 10,124 10,213
9,861 10,155 10,340
9,963 10,261 10,521
10,032 10,333 10,628
10,066 10,380 10,668
10,199 10,520 10,892
10,193 10,505 10,911
07/31/1995 10,286 10,602 11,044
10,379 10,701 11,145
10,422 10,747 11,172
10,445 10,783 11,241
10,520 10,854 11,343
10,551 10,889 11,402
10,613 10,955 11,516
10,591 10,935 11,484
10,538 10,871 11,403
10,540 10,887 11,402
10,520 10,868 11,398
10,581 10,932 11,465
07/31/1996 10,636 10,991 11,549
10,638 11,004 11,559
10,680 11,060 11,654
10,759 11,130 11,755
10,863 11,240 11,908
10,858 11,237 11,885
10,892 11,274 11,926
10,933 11,330 12,013
10,855 11,240 11,882
10,902 11,291 11,933
10,989 11,384 12,080
11,054 11,453 12,171
07/31/1997 11,174 11,580 12,386
11,141 11,548 12,323
11,207 11,618 12,432
11,240 11,655 12,497
11,282 11,702 12,536
11,360 11,808 12,643
11,439 11,892 12,758
11,447 11,892 12,779
11,448 11,907 12,790
11,379 11,827 12,737
11,493 11,959 12,889
11,526 11,984 12,933
07/31/1998 11,548 12,021 12,979
11,685 12,165 13,138
11,787 12,262 13,274
11,799 12,289 13,312
11,821 12,314 13,336
11,875 12,361 13,383
11,978 12,470 13,525
11,937 12,442 13,511
11,936 12,431 13,523
11,956 12,467 13,564
11,919 12,419 13,508
11,774 12,272 13,355
07/31/1999 11,831 12,334 13,438
11,805 12,310 13,433
11,839 12,348 13,481
11,802 12,312 13,448
11,872 12,387 13,527
11,845 12,362 13,482
11,808 12,327 13,477
11,843 12,365 13,521
11,953 12,482 13,644
11,890 12,444 13,613
11,865 12,396 13,609
12,073 12,615 13,858
07/31/2000 12,208 12,759 14,003
12,331 12,890 14,155
12,318 12,879 14,131
12,393 12,959 14,230
12,417 12,988 14,291
12,606 13,187 14,521
12,758 13,362 14,771
12,793 13,387 14,810
12,881 13,482 14,932
12,778 13,391 14,848
12,892 13,500 15,001
12,939 13,565 15,078
07/31/2001 13,050 13,671 15,241
13,174 13,816 15,446
13,208 13,841 15,493
13,293 13,933 15,620
13,208 13,848 15,496
13,124 13,777 15,420
13,311 13,962 15,669
13,404 14,075 15,846
13,200 13,852 15,508
13,413 14,091 15,866
13,470 14,153 15,973
13,578 14,269 16,147
07/31/2002 13,699 14,399 16,321
13,794 14,501 16,478
13,941 14,659 16,707
13,839 14,555 16,537
13,801 14,505 16,520
13,977 14,692 16,849
13,980 14,712 16,877
14,100 14,841 17,061
14,075 14,818 17,037
14,130 14,878 17,118
14,279 15,038 17,391
14,251 15,011 17,346
07/31/2003 14,058 14,799 16,968
Average Annual Total Returns as of July 31, 2003
1 Year 5 Year 10 Year
------------------------------------------------------
Class A Shares* 0.30% 3.55% 3.46%
------------------------------------------------------
Class Y Shares (No Sales Charge) 2.78% 4.25% 4.00%
------------------------------------------------------
*Reflects 2.25% Maximum Front-End Sales Charge.
Past performance is no guarantee of future results. Investment return and net
asset value (NAV) will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than the original cost. The chart and table above do
not reflect the deduction of taxes that a shareholder would pay on Fund
distributions or redemption of Fund shares.
The chart above represents a comparison of a hypothetical $10,000 investment in
the indicated share class versus a similar investment in the Fund's benchmark.
The quoted performance of the Pacific Capital Tax-Free Short Intermediate
Securities Fund includes the performance of certain common trust fund
("Commingled") accounts advised by The Asset Management Group of Bank of Hawaii
and managed the same as the Fund in all material respects, for periods dating
back to July 31, 1993, and prior to the Fund's commencement of operations on
October 14, 1994, as adjusted to reflect the expenses associated with the Fund.
The Commingled accounts were not registered with the Securities and Exchange
Commission under the Investment Company Act of 1940 and, therefore, were not
subject to the investment restrictions imposed by law on registered mutual
funds. If the Commingled accounts had been registered, the Commingled accounts'
performance may have been adversely affected.
The performance of the Pacific Capital Tax-Free Short Intermediate Securities
Fund is measured against the Lehman Brothers 5-Year Municipal Bond Index, an
unmanaged index that generally tracks bonds with a maturity range of four to
six years. It is important to note that the Fund may invest only in bonds with
maturities of five years or less. The index does not reflect the deduction of
fees associated with a mutual fund, such as investment management and fund
accounting fees. The Fund's performance reflects the deduction of fees for
these value-added services. Investors cannot invest directly in an index,
although they can invest in its underlying securities.
19
Pacific Capital International Stock Fund+
Nicholas-Applegate Capital Management
The Fund is sub-advised by Nicholas-Applegate Capital Management (NACM); a
management team led by Loretta Morris is responsible for the day-to-day
management of the Fund. Ms. Morris, who is responsible for portfolio management
and research at NACM since 1990, has 11 years prior investment experience,
including portfolio management with Collins Associates.
How did the Fund perform compared to its benchmark?
For the 12 months ended July 31, 2003, the Fund delivered a return of 1.41%
(Class A Shares without sales charge), versus 6.67% for the MSCI EAFE Index./1/
Stock selection in the United Kingdom, Japan and Australia hurt relative
returns. The UK and Japan are the largest country weights in the Fund and both
are underweight vs. the benchmark as of 7/31/03. Contributing positively to
performance was stock selection in Israel, Switzerland, France and Germany.
On a sector basis, strong stock selection in healthcare
(drugs/pharmaceuticals), technology (software and semiconductors) and utilities
added relative value. Stock selection in financials (money-center banks and
investments), consumer discretionary and transportation holdings underperformed
relative to the benchmark.
Among the Fund's best-performing holdings during the period was Teva
Pharmaceutical, an Israel-based manufacturer primarily of generic drugs, Credit
Suisse, the largest Swiss banking and financial services concern, and Vodafone
Group, a UK-based provider of wireless communications services. Teva advanced
based on its strong competitive position as the world's #2 generic drugmaker
with a robust pipeline. Credit Suisse advanced as a result of strength in the
fixed-income market and improving results in its equity and private banking
units. Vodafone continues to benefit from improving results, experiencing
double-digit growth in subscribers and revenues and retaining a #1 or #2
position in every market in which it operates.
What were the major factors in the market that influenced the Fund's
performance?
The international equity market became sharply oversold in the last half of
2002 with investor sentiment dampened by anemic growth rates, pessimism over
financial services companies (particularly in Germany), the overhang of the
Iraq situation and terrorism, debt downgrades from credit rating agencies.
In first quarter of 2003, the international stock markets came under pressure
as a combination of war worries and weak economic data spurred a sell-off in
equities. "War trades" also heightened volatility as investors moved quickly
into, then back out of, gold, oil and Treasury securities.
A snap-back in late March erased almost all of January and February's losses,
even though the MSCI EAFE Index finished the quarter down 8.8%, with much of
the decline due to regained strength in the dollar.
International equities continued to rise, starting in April, despite ongoing
worries over the slow pace of growth in Europe and Japan's long-beleaguered
financial and banking system. International stocks were buoyed by many of the
same factors that drove U.S. stocks higher, including falling interest rates,
modest inflation, fear of SARS and Iraq abating and data suggesting a
rekindling of economic activity.
In the last few months of the fiscal year, the euro and yen strengthened
against the dollar, helping to boost returns. However, the European and
Japanese economies remained weak relative to the
/1/ See Glossary of Terms for additional information
+ International investing involves increased risk and volatility.
20
Pacific Capital International Stock Fund+--continued
U.S., prompting the ECB's stimulative interest rate cut. The rally was largely
driven by increased liquidity in the markets as central banks worldwide
continued to pursue stimulative policies and corporations took advantage of low
interest rates to refinance debt, cut costs, and improve cash flow.
Markets were boosted in July by marginally stronger economic news in most major
economies. Leading economic indicators improved even in continental Europe
where business and consumer confidence have improved for several consecutive
months. Investor confidence increased globally and the equity market rally
resumed.++
What major changes have occurred in the portfolio during the period covered by
the report?
During the period we shifted holdings in the financial services sector from
more retail-oriented stocks to those with more exposure to capital markets. We
also added to technology, resulting in an over-weighting in information
technology and telecommunications versus the benchmark.
We trimmed our utilities weighting slightly below the benchmark. As the market
began to rally, the reliable earnings growth of this sector became less
attractive compared to the faster-growing financials, technology and telecom
sectors. We also trimmed or sold several positions in the consumer
discretionary sector vulnerable to a weaker U.S. dollar.
In the last half of the fiscal year, we continued to add to the Japan portion
of the portfolio. Japan has become more attractive. Loose liquidity conditions
have triggered a sell-off in Japan's bond market in favor of equities.
Nicholas Applegate Capital Management Fund Outlook
Although economic data has remained mixed, it appears that the U.S. labor
market is firming, corporate earnings are improving, the housing market is
holding up, interest rates remain low, and capital equipment spending is on the
upswing. Asian economies are being fed by strong Chinese growth, as China must
import manufacturing equipment, chemicals, and construction materials to feed
the boom in manufacturing. Meanwhile, higher wages are creating a middle class
that demands consumer goods. Asian companies are the primary beneficiaries of
this Chinese demand.
The growth style of investing has been out of favor over the last several
years. The most recent rally has been led by stocks with low valuations, but
many of these value stocks have become fairly priced. Should the global economy
continue to improve, investors may look to companies that are growing earnings
beyond market expectations. At this point, we remain positive on international
equities as favorable relative valuations, corporate cost cutting and
restructuring, rampant liquidity, steady consumer spending, a rebound in
capital spending and reallocation to equities may bode well for stock markets
worldwide.
++ The portfolio composition is subject to change.
21
Pacific Capital International Stock Fund
Fund Objective:
Seeking long-term growth of capital, the International Stock Fund primarily
invests in preferred and common stocks of foreign companies. The Fund may
invest in these securities directly or through other investment companies or
trusts. The Fund is not limited to any particular type of company or to any
geographic region of the world.
[CHART]
Growth of a $10,000 Investment
Class A Class B Class Y Shares MSCI EAFE/(R)/
Shares* Shares** (No Sales Charge) Index
------- -------- ----------------- ------------
12/02/1998 $ 9,479 $10,000 $10,000 $10,000
9,943 10,490 10,490 10,397
10,464 11,031 11,040 10,369
9,962 10,500 10,520 10,124
10,322 10,871 10,900 10,549
10,692 11,251 11,300 10,979
10,256 10,791 10,840 10,416
11,033 11,601 11,660 10,824
07/31/1999 11,336 11,912 11,990 11,148
11,545 12,122 12,210 11,192
11,706 12,272 12,370 11,307
12,455 13,063 13,170 11,733
14,104 14,774 14,920 12,143
16,893 17,659 17,843 13,235
15,582 16,284 16,459 12,396
17,304 18,073 18,287 12,733
16,325 17,049 17,254 13,229
14,936 15,591 15,788 12,535
14,123 14,723 14,931 12,231
14,906 15,529 15,757 12,712
07/31/2000 14,241 14,837 15,065 12,182
14,750 15,354 15,602 12,290
13,781 14,340 14,580 11,694
12,890 13,399 13,640 11,420
12,254 12,727 12,969 10,994
12,650 13,133 13,387 11,388
12,283 12,743 12,999 11,382
11,242 11,652 11,902 10,530
10,335 10,704 10,947 9,833
11,046 11,444 11,708 10,522
10,666 11,042 11,308 10,159
10,238 10,587 10,857 9,748
07/31/2001 9,980 10,314 10,573 9,571
9,576 9,899 10,159 9,331
8,756 9,041 9,282 8,388
8,695 8,976 9,230 8,602
8,829 9,106 9,359 8,920
8,915 9,197 9,462 8,973
8,499 8,755 9,023 8,497
8,548 8,807 9,075 8,557
9,037 9,301 9,591 9,024
8,988 9,236 9,540 9,089
9,001 9,236 9,553 9,213
8,670 8,911 9,217 8,849
07/31/2002 7,801 8,028 8,313 7,976
7,703 7,937 8,223 7,960
6,968 7,171 7,436 7,107
7,225 7,430 7,720 7,490
7,421 7,638 7,926 7,831
7,164 7,366 7,655 7,568
6,907 7,093 7,384 7,253
6,772 6,963 7,255 7,087
6,686 6,872 7,165 6,953
7,250 7,443 7,771 7,642
7,703 7,898 8,249 8,113
7,837 8,028 8,391 8,313
07/31/2003 7,911 7,981 8,481 8,516
Average Annual Total Returns as of July 31, 2003
Since
Inception
1 Year (12/2/98)
-------------------------------------------------
Class A Shares* -3.87% -4.90%
-------------------------------------------------
Class B Shares** -3.03% -4.72%
-------------------------------------------------
Class Y Shares (No Sales Charge) 2.02% -3.47%
-------------------------------------------------
*Reflects 5.25% Maximum Front-End Sales Charge.
**Reflects Maximum Contingent Deferred Sales Charge of up to 5.00%.
Past performance is no guarantee of future results. Investment return and net
asset value (NAV) will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than the original cost. The chart and table above do
not reflect the deduction of taxes that a shareholder would pay on Fund
distributions or redemption of Fund shares.
The chart above represents a comparison of a hypothetical $10,000 investment in
the indicated share class versus a similar investment in the Fund's benchmark.
Class A Shares were not in existence prior to December 8, 1998. Performance
calculated for any period up to and through December 8, 1998, is based upon the
performance of Class Y Shares, which does not reflect the higher 12b-1 fees.
Had the higher 12b-1 fees been incorporated, total return figures may have been
adversely affected.
Class B Shares were not in existence prior to December 20, 1998. Performance
calculated for any period up to and through December 20, 1998, is based upon
the performance of the Class Y Shares, which does not reflect the higher 12b-1
fees or the contingent deferred sales charge (CDSC). Had the CDSC and higher
12b-1 fees been incorporated, total return figures may have been adversely
affected.
The performance of the Pacific Capital International Stock Fund is measured
against the Morgan Stanley Capital International (MSCI) Europe, Australasia and
Far East (EAFE(R)) Index, which is unmanaged and is generally a sample of
companies representative of the market structure of 20 European and Pacific
Basin countries. The index does not reflect the deduction of fees associated
with a mutual fund, such as investment management and fund accounting fees. The
Fund's performance reflects the deduction of fees for these value-added
services. Investors cannot invest directly in an index, although they can
invest in its underlying securities.
22
Pacific Capital Value Fund
The Equity Investment Team of The Asset Management Group of Bank of Hawaii
Team members include Howard Hodel, Clyde Powers, Bill Carpenter, Teresa Yee,
and Laughon Bryant. Mr. Hodel, Executive Vice President and Manager of the
Adviser's registered investment unit, has served as head of Bank of Hawaii's
Investment Services Group Analytics and Risk Management since January 2003. He
previously served at Bank of America from 1994 to 2003 as the Managing Director
of Market Risk Control Investments, and from 1987 to 1994 as Vice President in
Corporate Finance. Mr. Powers, CFA, Vice President of the Adviser, joined the
Adviser in 1997. He previously served as a Portfolio Manager for Amcore
Investment Group from 1995 to 1997, and as Managing Director-Investment
Operations for Union Capital Advisors from 1984 to 1995. Mr. Carpenter, Vice
President of the Adviser, rejoined the Adviser in 1999. He previously served as
a Small-Cap Analyst for Greenville Capital Management from 1996 to 1998, and as
Portfolio Manager for First Hawaiian Bank's Trust Division from 1985 to 1995
and as the Risk Manager for Bank of Hawaii from 1980 to 1984. Ms. Yee, Vice
President and Portfolio Manager of the Adviser, joined the Adviser in 1998.
Previously she served a an Equity Analyst from 1993 to 1997 at CIBC
Oppenheimer. Mr. Bryant, Assistant Vice President, has served the Adviser as a
Securities Analyst since 1997. Previously, he served as Portfolio Manager from
1993 to 1997 in First Hawaiian Bank's Trust and Investment Division.
How did the Fund perform compared to its benchmark?
For the 12-months ended July 31, 2003, the Fund appreciated 6.07% (Class A
Shares without sales charge), versus its benchmark the Russell 1000 Value
Index/1/ return of 10.75%.
What were the major factors in the market that influenced the Fund's
performance?
Over the course of the 12-month period, the war in Iraq, geopolitical tensions,
Federal rate cuts, and improving fundamental and economic data coupled to
create a very volatile environment for the stock market. A rebound in stocks
towards the end of the period was led by the tech-heavy Nasdaq, as positive
news on the economy and corporate earnings came to fruition. Investors cheered
the better than expected data and started to discount a stronger recovery going
into the second half of the year.
The Value Fund's underperformance for the annual period was attributable to an
overweight in the financial sector where stock selection led to relative
under-performance in a stabilizing interest rate environment.
Positive stock and sector selection in industrials and information technology
during the year mitigated the relative underperformance. In particular, the
Fund benefited from top performing holdings, including Ingersoll-Rand, Capital
One Financial, and Tyco International.++
What major changes have occurred in the portfolio during the period covered by
the report?
In expectation of a strong economic recovery, the Fund made opportunistic
trades to position the portfolio more heavily in economically sensitive areas
throughout the year. New names were added in health care, financials, and
information technology. A global rebalancing event that took place at the end
of June resulted in the Fund trimming and eliminating positions across the
board.++
The Asset Management Group Fund Outlook
The recent bear market was longer and deeper by historical standards than most
other market declines. However, the market was shown signs of positive
advancement supported by stronger corporate earnings in an improving economy.
Hence, our outlook at this time remains positive and we will maintain our
overweight to economically sensitive sectors of the economy.
/1/ See Glossary of terms for additional information.
++ The portfolio composition is subject to change.
23
Pacific Capital Value Fund
Fund Objective:
Seeking long-term growth capital first, and current income second, the Value
Fund invests primarily in a diversified portfolio of common stocks of companies
traded in the United States. The Fund focuses on mid to large-capitalization
companies, specifically those believed to be undervalued relative to their
peers.
Growth of a $10,000 Investment
[CHART]
Class A Class B Class Y Shares Russell 1000
Shares* Shares** (No Sales Charge) Value Index
------- ------- ---------------- ------------
12/01/1998 $ 9,597 $10,000 $10,000 $10,000
9,855 10,267 10,280 10,340
9,875 10,277 10,290 10,423
9,506 9,887 9,909 10,276
9,945 10,340 10,378 10,489
10,571 10,991 11,030 11,468
10,436 10,830 10,883 11,342
10,792 11,201 11,260 11,671
07/31/1999 10,395 10,788 10,856 11,330
10,022 10,392 10,461 10,909
9,696 10,047 10,132 10,528
10,177 10,538 10,624 11,134
10,200 10,548 10,651 11,047
10,717 11,082 11,194 11,100
10,362 10,701 10,823 10,738
10,423 10,754 10,886 9,940
11,490 11,853 12,012 11,153
11,169 11,525 11,684 11,023
11,078 11,420 11,588 11,139
10,894 11,219 11,397 10,630
07/31/2000 10,936 11,252 11,446 10,764
11,680 12,013 12,224 11,362
11,150 11,463 11,670 11,466
11,249 11,558 11,779 11,748
10,494 10,776 10,989 11,312
11,073 11,363 11,599 11,879
11,579 11,874 12,129 11,924
10,732 10,998 11,243 11,593
10,309 10,560 10,812 11,183
11,062 11,327 11,594 11,732
11,168 11,424 11,717 11,995
10,814 11,059 11,348 11,729
07/31/2001 10,755 10,998 11,292 11,704
10,272 10,487 10,774 11,235
9,530 9,721 10,009 10,444
9,728 9,915 10,211 10,355
10,246 10,451 10,767 10,957
10,421 10,609 10,942 11,215
10,068 10,256 10,587 11,128
9,820 10,001 10,327 11,146
10,434 10,609 10,971 11,673
10,034 10,195 10,545 11,273
9,998 10,147 10,507 11,330
9,313 9,453 9,788 10,679
07/31/2002 8,309 8,431 8,741 9,686
8,392 8,504 8,828 9,759
7,410 7,507 7,796 8,674
7,893 7,987 8,309 9,317
8,355 8,450 8,795 9,904
7,885 7,969 8,292 9,474
7,687 7,774 8,098 9,244
7,508 7,591 7,910 8,998
7,461 7,530 7,860 9,013
8,186 8,259 8,628 9,806
8,688 8,760 9,156 10,439
8,771 8,833 9,244 10,570
07/31/2003 8,813 8,726 9,294 10,727
Average Annual Total Returns as of July 31, 2003
Since
Inception
1 Year (12/3/98)
-------------------------------------------------
Class A Shares* 1.86% -2.67%
-------------------------------------------------
Class B Shares** 1.22% -2.88%
-------------------------------------------------
Class Y Shares (No Sales Charge) 6.32% -1.56%
-------------------------------------------------
* Reflects 4.00% Maximum Front-End Sales Charge.
** Reflects Maximum Contingent Deferred Sales Charge of up to 5.00%.
Past performance is no guarantee of future results. Investment return and net
asset value (NAV) will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than the original cost. The chart and table above do
not reflect the deduction of taxes that a shareholder would pay on Fund
distributions or redemptions of Fund shares.
The chart above represents a comparison of a hypothetical $10,000 investment in
the indicated share class versus a similar investment in the Fund's benchmark.
Class A Shares were not in existence prior to December 8, 1998. Performance
calculated for any period up to and through December 8, 1998, is based upon the
performance of Class Y Shares.
Class B Shares were not in existence prior to December 13, 1998. Performance
calculated for any period up to and through December 13, 1998, is based upon
the performance of the Class Y Shares, which does not reflect the higher 12b-1
fees or the contingent deferred sales charge (CDSC). Had the CDSC and higher
12b-1 fees been incorporated, total return figures may have been adversely
affected.
The performance of the Pacific Capital Value Fund is measured against the
Russell 1000 Value Index, unmanaged index is comprised of the securities that
tend to exhibit low price-to-book and price-to-earnings ratios. The index does
not reflect the deduction of fees associated with a mutual fund, such as
investment management and fund accounting fees. The Fund's performance reflects
the deduction of fees for these value-added services. Investors cannot invest
directly in an index, although they can invest in its underlying securities.
24
Pacific Capital Small Cap Fund+
Nicholas-Applegate Capital Management
The Fund is sub-advised by Nicholas-Applegate Capital Management (NACM); a
management team led by Mark Stuckleman is responsible for the day-to-day
management of the Fund. Mr. Stuckleman, Lead Portfolio Manager for NACM, has 12
years investment experience. Prior to joining NACM in 1995, Mr. Stuckleman was
a senior quantitative analyst with Wells Fargo Bank's Investment Management
Group.
How did the Fund perform compared to its benchmark?
In the 12 months ending July 31, 2003, the Fund returned 24.62% (Class A Shares
without sales charge), outperforming the Russell 2000 Value Index/1/ return of
18.63%.
The Fund's out-performance relative to the benchmark was largely a result of
strong stock selection in technology, financials and airlines. In particular,
transportation stocks were strong, with exposure to airlines contributing
positively to performance. AAR Corp., a provider of aircraft parts and
services, gained on the prospect of improving industry conditions. Continental
Airlines benefited similarly during the period.
Technology stocks rallied as tech spending showed signs of stabilizing. Within
technology, defense communications contractor Titan Corp. gained on
better-than-expected earnings. Positions in semiconductor related stocks,
including graphics chipmaker ATI Technologies and ASE Test, contributed to
positive performance with ASE Test rising on an improving revenue outlook.
Avocent, which specializes in network server management systems, was also among
the top performers.
In the financials, First Essex Bancorp and BankAtlantic Bancorp were strong
holdings. First Essex increased as it was acquired by Sovereign. These regional
banks provide various products and services for consumer and commercial banking
and real estate developing.
Stock selection in the healthcare sector, drugs/pharmaceutical and hospitals,
under-performed relative to the Russell 2000 Value Index. Highly levered
utility stocks traded lower in July following gains earlier in the period in
the face of rising longer-term interest rates.
What were the major factors in the market that influenced the Fund's
performance?
In the first part of the fiscal year, investors focused primarily on potential
U.S. military action in Iraq, accounting and insider trading scandals, and
evidence of a weakening economy. As a result, the markets were volatile while
generally trending downward.
In September, selling pressure continued to intensify amid a weakening earnings
picture, an escalation of the conflict in the Middle East and increasing talk
of military action against Iraq. During the month, consensus earnings estimate
continued to be revised downward as many companies lowered their guidance for
the quarter as a whole.
After a strong October, the U.S. stock market continued to power higher in
November. Technology stocks staged a particularly strong rally. In November,
the rally seemed to be driven by a lack of bad news rather than any particular
good news. Iraq's welcoming of United Nations weapons inspectors seemed to
relieve investor tensions regarding military action there, as Saddam Hussein
showed more willingness to cooperate with UN mandates.
January began in a promising fashion, with stocks rallying, but
weaker-than-expected earnings reports and uncertainty over the Iraq situation
soured investor sentiment. An initial rally was led by a proposal by President
Bush to eliminate the double taxation of dividends, but the start of earnings
/1/ See Glossary of Terms for additional information
25
Pacific Capital Small Cap Fund+--continued
season stalled the rally. Bush's State of the Union address, which pledged
increased healthcare spending and tax cuts, failed to resurrect the equity
markets.
The dark clouds of Iraq, North Korea and continued global economic weakness
conspired to pressure the broad U.S. stock market in February. US equities
declined for the third straight month. However, tech stocks, impelled by
encouraging earnings growth projections, rebounded with the Nasdaq Composite
Index/1/ advancing 1.3%.
Equities ended March slightly positive following an extremely volatile month in
which the market was obsessed by the military action in Iraq. The market, as
measured by the S&P 500 Index/1/, fell 4.8% early in March as the prospect of
war weighted heavily on investor sentiment.
Economic news was generally weaker as consumer and business activity was muted
by the war. Higher energy prices and poor weather in many parts of the country
led to an overall weakening in all areas of the economy, including retail
sales, home sales, manufacturing activity and unemployment. Consumer confidence
fell to its lowest level since October 1993 and posted the ninth decline in 10
months.
The U.S. stock market bounced back strongly in April as investor fears of a
protracted military campaign in Iraq were not borne out. Gains were fueled by
greater clarity regarding the Iraq situation and a solid earnings picture,
which overcame weak economic reports. One factor behind the solid first quarter
earnings was the lack of major blow-ups, in which companies miss estimates by a
large margin and sell off. Also, moderating energy prices were a positive
factor, and the effect of a weaker dollar may have been underestimated.
During the last quarter of the reporting period, U.S. stocks surged as
forward-looking investors began to anticipate the dual economic stimulus of a
low-interest rate environment and tax-cut legislation passed by Congress and
signed by President Bush. A decline in consumer confidence readings and
persistent questions over the strength of the job market were offset by a
speedy military victory in Iraq, declining fears over SARS, solid housing start
figures, an uptick in capital equipment expenditures and a level of consumer
price inflation that offset concerns over deflation.
On the earnings front, companies reporting second quarter earnings in July were
generally in line or ahead of expectations. Corporate earnings have shown signs
of improvement. Analysts now project third and fourth quarter figures at 21.3%
and 21.6%, respectively.
What major changes have occurred in the portfolio during the period covered by
the report?
The Fund's holdings remain diversified across sectors and industries. During
the period, as a result of our bottom-up stock selection process and capital
appreciation, weightings of the healthcare and information technology sectors
increased. The weighting in consumer discretionary and financials slightly
declined.
++ The portfolio composition is subject to change.
/1/ See Glossary of terms for additional information.
+ Small-capitalization funds typically carry additional risks since smaller
companies generally have a higher risk of failure. Historically, smaller
companies' stocks have experienced a greater degree of market volatility than
average.
26
Pacific Capital Small Cap Fund+--continued
As of 7/31/03, the Fund's largest under-weights, versus the Russell 2000 Value
Index/1/, were in consumer discretionary and financials. Significant
over-weights included healthcare and information technology.++
The Nicholas Applegate Fund Outlook
Amid a mixed macroeconomic environment, the market has made a good run over the
past few months. In retrospect, Wall Street analysts may have been somewhat
overzealous in reducing earnings estimates for 2003, effectively lowering the
bar of expectations and preparing the market for strength.
We continue to be encouraged by positive developments in the markets. The
federal government's fiscal and monetary policies are extraordinarily
stimulative. Corporate earnings have finally stopped decelerating and there is
greater comfort with expectations and guidance. Recently passed tax cut
legislation is also stimulative, which may help improve prospects for economic
growth in the second half of the year.
At this time, we remain positive on U.S. equities as favorable relative
valuations, corporate cost cutting and restructuring, rampant liquidity, steady
consumer spending, a rebound in capital spending and reallocation to equities
may bode well for stock markets worldwide.
27
Pacific Capital Small Cap Fund
Fund Objective:
Seeking long-term growth of capital, the Small Cap Fund primarily invests in a
diversified portfolio of common stocks of smaller U.S. companies that the Sub-
Adviser believes to be exhibiting solid fundamental strength and attractive
valuations.
Growth of a $10,000 Investment
[CHART]
Class A Class B Class Y Russell 2000
Shares* Shares** (No Sales Charge) Value Index
------- -------- ----------------- ------------
12/01/1998 $ 9,479 $10,000 $10,000 $10,000
9,719 10,253 10,245 10,314
9,416 9,923 9,935 10,079
8,771 9,242 9,254 9,391
8,534 8,982 9,004 9,314
9,378 9,873 9,905 10,164
9,833 10,343 10,375 10,477
10,298 10,823 10,875 10,856
07/31/1999 10,108 10,613 10,675 10,598
9,767 10,253 10,325 10,211
9,454 9,923 9,995 10,007
9,179 9,623 9,704 9,807
9,435 9,883 9,975 9,857
9,560 10,015 10,116 10,160
9,283 9,716 9,825 9,895
9,086 9,498 9,617 10,499
9,825 10,267 10,386 10,549
10,173 10,620 10,761 10,611
10,094 10,537 10,688 10,449
10,291 10,734 10,896 10,754
07/31/2000 10,261 10,703 10,869 11,113
10,942 11,398 11,589 11,610
11,090 11,543 11,745 11,544
11,169 11,616 11,826 11,503
10,912 11,325 11,543 11,269
12,096 12,555 12,810 12,479
12,527 12,991 13,268 12,824
12,527 12,980 13,268 12,806
12,356 12,790 13,087 12,601
13,150 13,617 13,934 13,184
13,982 14,467 14,815 13,523
14,292 14,769 15,142 14,067
07/31/2001 14,394 14,868 15,253 13,752
14,245 14,711 15,106 13,704
12,877 13,279 13,648 12,191
13,261 13,671 14,063 12,510
13,967 14,387 14,810 13,409
15,131 15,590 16,048 14,230
15,271 15,727 16,200 14,418
15,294 15,739 16,224 14,506
16,618 17,089 17,639 15,593
16,987 17,462 18,039 16,141
16,468 16,920 17,490 15,608
16,180 16,607 17,184 15,262
07/31/2002 14,002 14,365 14,877 12,994
13,956 14,305 14,828 12,937
12,942 13,256 13,753 12,013
12,948 13,268 13,769 12,193
14,009 14,329 14,895 13,166
13,798 14,107 14,677 12,604
13,363 13,652 14,216 12,249
12,968 13,238 13,796 11,837
13,166 13,445 14,020 11,964
14,325 14,603 15,236 13,100
15,894 16,203 16,927 14,438
16,381 16,699 17,445 14,682
07/31/2003 17,449 17,575 18,591 15,414
Average Annual Total Returns as of July 31, 2003
Since
Inception
1 Year (12/3/98)
-------------------------------------------------
Class A Shares* 18.10% 12.68%
-------------------------------------------------
Class B Shares** 19.74% 12.85%
-------------------------------------------------
Class Y Shares (No Sales Charge) 24.96% 14.22%
-------------------------------------------------
*Reflects 5.25% Maximum Front-End Sales Charge.
**Reflects Maximum Contingent Deferred Sales Charge of up to 5.00%.
Past performance is no guarantee of future results. Investment return and net
asset value (NAV) will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than the original cost. The chart and table above do
not reflect the deduction of taxes that a shareholder would pay on Fund
distributions or redemption of Fund shares.
The chart above represents a comparison of a hypothetical $10,000 investment in
the indicated share class versus a similar investment in the Fund's benchmark.
Class A Shares were not in existence prior to December 8, 1999. Performance
calculated for any period up to and through December 8, 1998, is based upon the
performance of Class Y Shares.
Class B Shares were not in existence prior to December 20, 1998. Performance
calculated for any period up to and through December 20, 1998, is based upon
the performance of the Class Y Shares, which does not reflect the higher 12b-1
fees or the contingent deferred sales charge (CDSC). Had the CDSC and higher
12b-1 fees been incorporated, total return figures may have been adversely
affected.
The performance of the Pacific Capital Small Cap Fund is measured against the
Russell 2000 Value Index, an unmanaged index comprised of securities in the
Russell 2000 Index with a less-than-average growth orientation. The index does
not reflect the deduction of fees associated with a mutual fund, such as
investment management and fund accounting fees. The Fund's performance reflects
the deduction of fees for these value-added services. Investors cannot invest
directly in an index, although they can invest in its underlying securities.
28
PACIFIC CAPITAL FUNDS
Statements of Assets and Liabilities
July 31, 2003
Growth Growth and New Asia Diversified
Stock Income Growth Fixed Income
Fund Fund Fund Fund
------------- ------------ ----------- ------------
ASSETS:
Investments, at value (cost $272,570,496; $150,296,949; $22,848,733;
and $237,382,796, respectively).................................... $ 275,799,459 $151,085,065 $25,560,177 $246,816,662
Foreign currency (cost $249,877).................................... -- -- 249,707 --
Interest and dividends receivable................................... 147,031 133,917 28,005 3,298,997
Receivable for capital shares issued................................ 1,197 240 -- 2,881
Receivable from brokers for investments sold........................ 1,817,841 -- 316,563 --
Prepaid expenses and other assets................................... 3,501 2,028 324 3,744
------------- ------------ ----------- ------------
Total Assets.................................................... 277,769,029 151,221,250 26,154,776 250,122,284
------------- ------------ ----------- ------------
LIABILITIES:
Payable to custodian................................................ -- -- 158,845 --
Distributions payable............................................... -- -- -- 27,474
Payable for capital shares redeemed................................. 8,388 7,319 -- 25,805
Payable to brokers for investments purchased........................ 1,347,151 -- 312,490 --
Accrued expenses and other payables:
Investment advisory fees.......................................... 188,182 102,488 8,619 95,817
Sub-investment advisory fees...................................... -- -- 10,774 --
Administration fees............................................... 3,633 1,988 317 3,308
Distribution fees................................................. 13,967 7,564 617 6,375
Other............................................................. 36,871 19,826 38,287 27,932
------------- ------------ ----------- ------------
Total Liabilities............................................... 1,598,192 139,185 529,949 186,711
------------- ------------ ----------- ------------
NET ASSETS:
Capital (no par value).............................................. 406,217,168 190,283,676 28,854,759 237,842,727
Undistributed (distributions in excess of) net investment income.... -- 20,112 (2,574) (4,807)
Accumulated net realized gains (losses) from investment and foreign
currency transactions.............................................. (133,275,294) (40,009,839) (5,938,642) 2,663,787
Net unrealized appreciation from investments and foreign currency... 3,228,963 788,116 2,711,284 9,433,866
------------- ------------ ----------- ------------
Net Assets...................................................... $ 276,170,837 $151,082,065 $25,624,827 $249,935,573
============= ============ =========== ============
Net Assets
Class A........................................................... $ 11,230,855 $ 5,547,985 $ 1,264,190 $ 8,840,694
Class B........................................................... 13,630,250 7,506,634 423,682 5,192,547
Class Y........................................................... 251,309,732 138,027,446 23,936,955 235,902,332
------------- ------------ ----------- ------------
Total........................................................... $ 276,170,837 $151,082,065 $25,624,827 $249,935,573
============= ============ =========== ============
Outstanding units of beneficial interest (shares)
Class A........................................................... 1,477,880 519,064 129,392 783,685
Class B........................................................... 1,884,598 735,390 44,669 461,021
Class Y........................................................... 32,261,382 12,826,619 2,420,472 20,778,577
------------- ------------ ----------- ------------
Total........................................................... 35,623,860 14,081,073 2,594,533 22,023,283
============= ============ =========== ============
Net Asset Value
Class A--redemption price per share............................... $ 7.60 $ 10.69 $ 9.77 $ 11.28
============= ============ =========== ============
Class A--maximum sales charge..................................... 4.00% 4.00% 5.25% 4.00%
------------- ------------ ----------- ------------
Class A--Maximum offering price per share (100%/(100%-maximum
sales charge) of net asset value adjusted to the nearest cent)... $ 7.92 $ 11.14 $ 10.31 $ 11.75
============= ============ =========== ============
Class B--offering price per share*................................ $ 7.23 $ 10.21 $ 9.48 $ 11.26
============= ============ =========== ============
Class Y--offering and redemption price per share.................. $ 7.79 $ 10.76 $ 9.89 $ 11.35
============= ============ =========== ============
- --------
* Redemption price per share varies based on length of time shares are held.
See notes to financial statements.
29
PACIFIC CAPITAL FUNDS
Statements of Assets and Liabilities, Continued
July 31, 2003
Ultra Short Short Intermediate Tax-Free Tax-Free Short
Government U.S. Government Securities Intermediate
Fund Securities Fund Fund Securities Fund
------------ ------------------ ------------ ---------------
ASSETS:
Investments, at value (cost $255,212,698; $91,764,796;
$374,948,993; and $63,650,018, respectively)........... $257,334,194 $93,260,893 $405,890,582 $65,218,102
Cash.................................................... 563 160 -- --
Interest and dividends receivable....................... 1,201,450 926,987 4,570,565 591,785
Receivable for capital shares issued.................... 271 11,700 -- --
Receivable from brokers for investments sold............ -- -- 3,429,420 --
Prepaid expenses and other assets....................... 3,396 910 6,923 781
------------ ----------- ------------ -----------
Total Assets........................................ 258,539,874 94,200,650 413,897,490 65,810,668
------------ ----------- ------------ -----------
LIABILITIES:
Distributions payable................................... 14,219 6,436 48,311 4,058
Payable for capital shares redeemed..................... -- 7,000 -- --
Payable to brokers for investments purchased............ 2,757,641 -- -- --
Accrued expenses and other payables:
Investment advisory fees.............................. 41,615 22,698 163,028 21,666
Administration fees................................... 1,451 1,123 5,485 802
Distribution fees..................................... 4,371 1,048 6,650 498
Other................................................. 23,491 11,446 44,863 13,059
------------ ----------- ------------ -----------
Total Liabilities................................... 2,842,788 49,751 268,337 40,083
------------ ----------- ------------ -----------
NET ASSETS:
Capital (no par value).................................. 253,572,666 92,625,993 381,300,657 64,202,492
Undistributed net investment income..................... 7,151 41 37 9
Accumulated net realized gains (losses) from investment
transactions........................................... (4,227) 28,768 1,386,870 --
Net unrealized appreciation from investments............ 2,121,496 1,496,097 30,941,589 1,568,084
------------ ----------- ------------ -----------
Net Assets.......................................... $255,697,086 $94,150,899 $413,629,153 $65,770,585
============ =========== ============ ===========
Net Assets
Class A............................................... $ 12,786,913 $ 5,326,881 $ 11,828,935 $ 2,321,501
Class B............................................... 1,994,077 -- 4,642,743 --
Class Y............................................... 240,916,096 88,824,018 397,157,475 63,449,084
------------ ----------- ------------ -----------
Total............................................... $255,697,086 $94,150,899 $413,629,153 $65,770,585
============ =========== ============ ===========
Outstanding units of beneficial interest (shares)
Class A............................................... 1,248,501 534,135 1,100,741 224,151
Class B............................................... 194,694 -- 432,045 --
Class Y............................................... 23,510,888 8,889,682 36,815,166 6,092,897
------------ ----------- ------------ -----------
Total............................................... 24,954,083 9,423,817 38,347,952 6,317,048
============ =========== ============ ===========
Net Asset Value
Class A--redemption price per share................... $ 10.24 $ 9.97 $ 10.75 $ 10.36
============ =========== ============ ===========
Class A--maximum sales charge......................... 1.75% 2.25% 4.00% 2.25%
------------ ----------- ------------ -----------
Class A--Maximum offering price per share
(100%/(100%-maximum sales charge) of net asset value
adjusted to the nearest cent)........................ $ 10.42 $ 10.20 $ 11.20 $ 10.60
============ =========== ============ ===========
Class B--offering price per share*.................... $ 10.24 $ -- $ 10.75 $ --
============ =========== ============ ===========
Class Y--offering and redemption price per share...... $ 10.25 $ 9.99 $ 10.79 $ 10.41
============ =========== ============ ===========
- --------
* Redemption price per share varies based on length of time shares are held.
See notes to financial statements.
30
PACIFIC CAPITAL FUNDS
Statements of Assets and Liabilities, Continued
July 31, 2003
International Small Cap
Stock Fund Value Fund Fund
------------- ------------ -----------
ASSETS:
Investments, at value (cost $54,858,278; $208,001,055; and $72,902,677, respectively). $ 60,908,666 $214,072,276 $87,839,118
Foreign currency (cost $124,710)...................................................... 114,922 -- --
Interest and dividends receivable..................................................... 85,078 423,335 61,065
Receivable for capital shares issued.................................................. 4,603 -- 1,182
Receivable from brokers for investments sold.......................................... 1,638,821 -- 2,287,525
Reclaims receivable................................................................... 67,484 -- --
Prepaid expenses and other assets..................................................... 1,849 2,970 1,257
------------ ------------ -----------
Total Assets...................................................................... 62,821,423 214,498,581 90,190,147
------------ ------------ -----------
LIABILITIES:
Payable to brokers for investments purchased.......................................... 761,686 -- 509,989
Accrued expenses and other payables:
Investment advisory fees............................................................ 18,626 146,730 29,036
Sub-investment advisory fees........................................................ 34,054 -- 42,048
Administration fees................................................................. 823 2,836 1,170
Distribution fees................................................................... 772 1,564 2,364
Other............................................................................... 37,016 29,648 14,747
------------ ------------ -----------
Total Liabilities................................................................. 852,977 180,778 599,354
------------ ------------ -----------
NET ASSETS:
Capital (no par value)................................................................ 101,126,101 255,790,454 74,785,060
Undistributed (distributions in excess of) net investment income...................... (539,640) 93,355 --
Accumulated net realized losses from investment, option, and foreign currency
transactions......................................................................... (44,658,657) (47,637,227) (130,708)
Net unrealized appreciation from investments and foreign currency..................... 6,040,642 6,071,221 14,936,441
------------ ------------ -----------
Net Assets........................................................................ $ 61,968,446 $214,317,803 $89,590,793
============ ============ ===========
Net Assets
Class A............................................................................. $ 874,434 $ 2,145,558 $ 1,595,328
Class B............................................................................. 536,350 1,291,481 2,475,508
Class Y............................................................................. 60,557,662 210,880,764 85,519,957
------------ ------------ -----------
Total............................................................................. $ 61,968,446 $214,317,803 $89,590,793
============ ============ ===========
Outstanding units of beneficial interest (shares)
Class A............................................................................. 135,346 291,154 120,448
Class B............................................................................. 85,941 177,628 192,079
Class Y............................................................................. 9,218,076 28,574,286 6,429,480
------------ ------------ -----------
Total.............................................................................. 9,439,363 29,043,068 6,742,007
============ ============ ===========
Net Asset Value
Class A-- redemption price per share................................................ $ 6.46 $ 7.37 $ 13.24
============ ============ ===========
Class A-- maximum sales charge...................................................... 5.25% 4.00% 5.25%
------------ ------------ -----------
Class A--Maximum offering price per share
(100%/(100%-maximum sales charge) of net asset value adjusted to the nearest cent). $ 6.82 $ 7.68 $ 13.97
============ ============ ===========
Class B--offering price per share*.................................................. $ 6.24 $ 7.27 $ 12.89
============ ============ ===========
Class Y--offering and redemption price per share.................................... $ 6.57 $ 7.38 $ 13.30
============ ============ ===========
- --------
* Redemption price per share varies based on length of time shares are held.
See notes to financial statements.
31
PACIFIC CAPITAL FUNDS
Statements of Operations
For the Year Ended July 31, 2003
Growth Growth and New Asia Diversified
Stock Income Growth Fixed Income
Fund Fund Fund Fund
------------ ----------- ----------- ------------
Investment Income:
Interest income.......................................................... $ 8,819 $ 1,463 $ 1,391 $12,133,189
Dividend income.......................................................... 1,856,735 2,208,853 587,856 44,939
Foreign tax withholding.................................................. -- -- (69,704) --
------------ ----------- ----------- -----------
Total Investment Income.............................................. 1,865,554 2,210,316 519,543 12,178,128
------------ ----------- ----------- -----------
Expenses:
Investment advisory fees................................................. 1,951,135 1,095,498 102,192 1,454,107
Sub-investment advisory fees............................................. -- -- 90,161 --
Administration fees...................................................... 390,231 219,102 34,196 387,764
Distribution fees--Class A............................................... 81,083 39,953 9,658 53,797
Distribution fees--Class B............................................... 130,796 73,519 3,577 54,532
Accounting fees.......................................................... 76,968 45,396 17,100 81,551
Custodian fees........................................................... 28,466 20,172 86,705 24,239
Transfer agent fees...................................................... 113,095 76,845 48,261 65,232
Legal and audit fees..................................................... 40,837 24,787 10,648 40,330
Trustees' fees and expenses.............................................. 20,333 11,609 1,790 20,903
Registration and filing fees............................................. 13,853 12,542 987 2,723
Other.................................................................... 42,423 34,550 5,027 33,842
------------ ----------- ----------- -----------
Total expenses before voluntary fee reductions....................... 2,889,220 1,653,973 410,302 2,219,020
Expenses voluntarily reduced:
Investment advisory fees........................................... -- -- -- (363,527)
Administration fees................................................ -- -- (2,138) --
Distribution fees--Class A......................................... (54,055) (26,635) (6,439) (35,864)
------------ ----------- ----------- -----------
Net Expenses......................................................... 2,835,165 1,627,338 401,725 1,819,629
------------ ----------- ----------- -----------
Net Investment Income (Loss)............................................. (969,611) 582,978 117,818 10,358,499
------------ ----------- ----------- -----------
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains (losses) from investment and foreign currency
transactions............................................................ (17,023,619) (4,181,124) (1,615,763) 6,645,110
Net change in unrealized appreciation (depreciation) from investments and
foreign currency........................................................ 47,151,913 17,295,259 2,477,911 (3,022,403)
------------ ----------- ----------- -----------
Net realized/unrealized gains from investments and foreign currency...... 30,128,294 13,114,135 862,148 3,622,707
------------ ----------- ----------- -----------
Change in net assets resulting from operations........................... $ 29,158,683 $13,697,113 $ 979,966 $13,981,206
============ =========== =========== ===========
See notes to financial statements.
32
PACIFIC CAPITAL FUNDS
Statements of Operations, Continued
For the Year Ended July 31, 2003
Ultra Short Short Intermediate Tax-Free Tax-Free Short
Government U.S. Government Securities Intermediate
Fund Securities Fund Fund Securities Fund
----------- ------------------ ----------- ---------------
Investment Income:
Interest income......................................... $ 6,188,092 $2,605,479 $21,604,161 $1,859,326
Dividend income......................................... -- -- 51,731 20,192
----------- ---------- ----------- ----------
Total Investment Income............................. 6,188,092 2,605,479 21,655,892 1,879,518
----------- ---------- ----------- ----------
Expenses:
Investment advisory fees................................ 871,516 345,073 2,658,856 279,734
Administration fees..................................... 348,610 110,425 709,033 89,516
Distribution fees--Class A.............................. 110,178 22,551 90,316 17,106
Distribution fees--Class B.............................. 18,568 -- 50,789 --
Accounting fees......................................... 72,658 27,481 158,335 23,961
Custodian fees.......................................... 19,226 11,369 33,341 16,124
Transfer agent fees..................................... 62,504 29,192 67,835 28,382
Legal and audit fees.................................... 34,888 14,086 69,162 12,375
Trustees' fees and expenses............................. 18,574 5,749 38,834 4,732
Registration and filing fees............................ 2,062 1,414 3,269 504
Other................................................... 29,961 9,948 59,696 8,686
----------- ---------- ----------- ----------
Total expenses before voluntary fee reductions...... 1,588,745 577,288 3,939,466 481,120
Expenses voluntarily reduced:
Investment advisory fees.......................... (456,762) (158,870) (664,714) (55,946)
Administration fees............................... (198,274) (17,302) -- (5,595)
Distribution fees--Class A........................ (73,452) (15,034) (60,211) (11,404)
----------- ---------- ----------- ----------
Net Expenses........................................ 860,257 386,082 3,214,541 408,175
----------- ---------- ----------- ----------
Net Investment Income................................... 5,327,835 2,219,397 18,441,351 1,471,343
----------- ---------- ----------- ----------
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains (losses) from investment transactions (4,227) 253,411 1,612,128 72,749
Net change in unrealized depreciation from investments.. (1,315,978) (554,183) (2,831,954) (105,000)
----------- ---------- ----------- ----------
Net realized/unrealized losses from investments......... (1,320,205) (300,772) (1,219,826) (32,251)
----------- ---------- ----------- ----------
Change in net assets resulting from operations.......... $ 4,007,630 $1,918,625 $17,221,525 $1,439,092
=========== ========== =========== ==========
See notes to financial statements.
33
PACIFIC CAPITAL FUNDS
Statements of Operations, Continued
For the Year Ended July 31, 2003
International Value Small Cap
Stock Fund Fund Fund
------------- ------------ -----------
Investment Income:
Interest income............................................................... $ 1,055 $ 3,601 $ 2,168
Dividend income............................................................... 1,412,702 4,841,650 1,041,763
Foreign tax withholding....................................................... (164,020) -- --
----------- ------------ -----------
Total Investment Income................................................... 1,249,737 4,845,251 1,043,931
----------- ------------ -----------
Expenses:
Investment advisory fees...................................................... 297,070 1,632,669 412,322
Sub-investment advisory fees.................................................. 292,784 -- 328,971
Administration fees........................................................... 86,080 326,537 108,871
Distribution fees--Class A.................................................... 8,882 14,732 9,307
Distribution fees--Class B.................................................... 5,356 12,171 19,645
Accounting fees............................................................... 33,178 65,877 25,257
Custodian fees................................................................ 103,615 26,980 21,590
Transfer agent fees........................................................... 54,358 53,290 55,510
Legal and audit fees.......................................................... 12,348 34,441 13,510
Trustees' fees and expenses................................................... 4,644 17,575 5,966
Registration and filing fees.................................................. 12,771 1,839 2,180
Other......................................................................... 9,325 27,459 10,695
----------- ------------ -----------
Total expenses before voluntary fee reductions............................ 920,411 2,213,570 1,013,824
Expenses voluntarily reduced:
Investment advisory fees................................................ (53,799) -- (68,043)
Distribution fees--Class A.............................................. (5,922) (9,822) (6,204)
----------- ------------ -----------
Net Expenses.............................................................. 860,690 2,203,748 939,577
----------- ------------ -----------
Net Investment Income......................................................... 389,047 2,641,503 104,354
----------- ------------ -----------
Realized/Unrealized Gains (Losses) from Investments:
Net realized losses from investment, option, and foreign currency transactions (7,799,455) (13,768,327) (126,637)
Net change in unrealized appreciation from investments and foreign currency... 9,465,637 27,939,859 15,810,277
----------- ------------ -----------
Net realized/unrealized gains from investments, options, and foreign currency. 1,666,182 14,171,532 15,683,640
----------- ------------ -----------
Change in net assets resulting from operations................................ $ 2,055,229 $ 16,813,035 $15,787,994
=========== ============ ===========
See notes to financial statements.
34
PACIFIC CAPITAL FUNDS
Statements of Changes in Net Assets
Growth Stock Fund Growth and Income Fund New Asia Growth Fund
--------------------------- -------------------------- --------------------------
For the Year For the Year For the Year For the Year For the Year For the Year
Ended Ended Ended Ended Ended Ended
July 31, 2003 July 31, 2002 July 31, 2003 July 31, 2002 July 31, 2003 July 31, 2002
------------- ------------- ------------- ------------- ------------- -------------
From Investment Activities:
Operations:
Net investment income (loss)..... $ (969,611) $ (1,924,959) $ 582,978 $ 195,770 $ 117,818 $ 18,958
Net realized losses from
investment and foreign
currency transactions........... (17,023,619) (81,090,991) (4,181,124) (32,025,695) (1,615,763) (1,454,850)
Net change in unrealized
appreciation (depreciation)
from investments and foreign
currency........................ 47,151,913 (29,407,716) 17,295,259 (20,154,879) 2,477,911 2,772,743
------------ ------------- ------------ ------------ ----------- -----------
Change in net assets resulting from
operations........................ 29,158,683 (112,423,666) 13,697,113 (51,984,804) 979,966 1,336,851
------------ ------------- ------------ ------------ ----------- -----------
Distributions to Class A
Shareholders:
From net investment income....... -- -- (10,822) -- (1,795) --
Distributions to Class Y
Shareholders:
From net investment income....... -- -- (557,589) (190,225) (62,183) (360)
------------ ------------- ------------ ------------ ----------- -----------
Change in net assets from
shareholder distributions......... -- -- (568,411) (190,225) (63,978) (360)
------------ ------------- ------------ ------------ ----------- -----------
Change in net assets from share
transactions...................... 25,629,089 (42,031,476) 7,316,182 (2,276,778) 2,882,709 (2,168,323)
------------ ------------- ------------ ------------ ----------- -----------
Change in net assets............... 54,787,772 (154,455,142) 20,444,884 (54,451,807) 3,798,697 (831,832)
------------ ------------- ------------ ------------ ----------- -----------
Net Assets:
Beginning of year................ 221,383,065 375,838,207 130,637,181 185,088,988 21,826,130 22,657,962
------------ ------------- ------------ ------------ ----------- -----------
End of year...................... $276,170,837 $ 221,383,065 $151,082,065 $130,637,181 $25,624,827 $21,826,130
============ ============= ============ ============ =========== ===========
See notes to financial statements.
35
PACIFIC CAPITAL FUNDS
Statements of Changes in Net Assets, Continued
Diversified Fixed Ultra Short Short Intermediate U.S.
Income Fund Government Fund Government Securities Fund
-------------------------- -------------------------- --------------------------
For the Year For the Year For the Year For the Year For the Year For the Year
Ended Ended Ended Ended Ended Ended
July 31, 2003 July 31, 2002 July 31, 2003 July 31, 2002 July 31, 2003 July 31, 2002
------------- ------------- ------------- ------------- ------------- -------------
From Investment Activities:
Operations:
Net investment income.............. $ 10,358,499 $ 12,036,822 $ 5,327,835 $ 8,031,414 $ 2,219,397 $ 2,221,250
Net realized gains (losses) from
investment transactions........... 6,645,110 6,650,858 (4,227) 244,413 253,411 479,070
Net change in unrealized
appreciation (depreciation) from
investments....................... (3,022,403) 459,012 (1,315,978) 2,049,659 (554,183) 1,361,647
------------ ------------ ------------ ------------ ----------- -----------
Change in net assets resulting from
operations.......................... 13,981,206 19,146,692 4,007,630 10,325,486 1,918,625 4,061,967
------------ ------------ ------------ ------------ ----------- -----------
Distributions to Class A
Shareholders:
From net investment income......... (289,985) (338,116) (327,809) (446,431) (88,244) (46,594)
From net realized gains............ (66,756) -- (16,502) (4,025) (28,186) (5,775)
Distributions to Class B
Shareholders:
From net investment income......... (180,337) (196,334) (27,122) (26,142) -- --
From net realized gains............ (52,356) -- (1,896) (339) -- --
Distributions to Class Y
Shareholders:
From net investment income......... (9,893,360) (11,502,867) (4,972,904) (7,558,841) (2,131,165) (2,174,656)
From net realized gains............ (2,192,141) -- (225,728) (71,682) (675,526) (287,909)
------------ ------------ ------------ ------------ ----------- -----------
Change in net assets from shareholder
distributions....................... (12,674,935) (12,037,317) (5,571,961) (8,107,460) (2,923,121) (2,514,934)
------------ ------------ ------------ ------------ ----------- -----------
Change in net assets from share
transactions........................ 14,378,040 (15,450,255) 55,936,532 33,802,446 30,850,923 14,667,361
------------ ------------ ------------ ------------ ----------- -----------
Change in net assets................. 15,684,311 (8,340,880) 54,372,201 36,020,472 29,846,427 16,214,394
------------ ------------ ------------ ------------ ----------- -----------
Net Assets:
Beginning of year.................. 234,251,262 242,592,142 201,324,885 165,304,413 64,304,472 48,090,078
------------ ------------ ------------ ------------ ----------- -----------
End of year........................ $249,935,573 $234,251,262 $255,697,086 $201,324,885 $94,150,899 $64,304,472
============ ============ ============ ============ =========== ===========
See notes to financial statements.
36
PACIFIC CAPITAL FUNDS
Statements of Changes in Net Assets, Continued
Tax-Free Short Intermediate
Tax-Free Securities Fund Securities Fund International Stock Fund
-------------------------- -------------------------- --------------------------
For the Year For the Year For the Year For the Year For the Year For the Year
Ended Ended Ended Ended Ended Ended
July 31, 2003 July 31, 2002 July 31, 2003 July 31, 2002 July 31, 2003 July 31, 2002
------------- ------------- ------------- ------------- ------------- -------------
From Investment Activities:
Operations:
Net investment income............ $ 18,441,351 $ 20,546,004 $ 1,471,343 $ 1,448,395 $ 389,047 $ 9,471
Net realized gains (losses) from
investment, option, and foreign
currency transactions........... 1,612,128 4,529,744 72,749 241,161 (7,799,455) (17,664,454)
Net change in unrealized
appreciation (depreciation)
from investments and foreign
currency........................ (2,831,954) 5,118,184 (105,000) 791,335 9,465,637 1,926,538
------------ ------------ ----------- ----------- ----------- ------------
Change in net assets resulting from
operations........................ 17,221,525 30,193,932 1,439,092 2,480,891 2,055,229 (15,728,445)
------------ ------------ ----------- ----------- ----------- ------------
Distributions to Class A
Shareholders:
From net investment income....... (473,346) (424,975) (54,650) (53,718) -- --
From net realized gains.......... (67,655) (97,187) (10,753) -- -- --
Distributions to Class B
Shareholders:
From net investment income....... (161,539) (183,108) -- -- -- --
From net realized gains.......... (31,494) (51,915) -- -- -- --
Distributions to Class Y
Shareholders:
From net investment income....... (17,806,466) (19,937,921) (1,416,693) (1,394,677) -- --
From net realized gains.......... (2,406,209) (4,419,228) (241,586) -- -- --
------------ ------------ ----------- ----------- ----------- ------------
Change in net assets from
shareholder distributions......... (20,946,709) (25,114,334) (1,723,682) (1,448,395) -- --
------------ ------------ ----------- ----------- ----------- ------------
Change in net assets from share
transactions...................... (45,601,269) (18,981,984) 14,299,296 9,134,779 7,741,956 (14,347,900)
------------ ------------ ----------- ----------- ----------- ------------
Change in net assets............... (49,326,453) (13,902,386) 14,014,706 10,167,275 9,797,185 (30,076,345)
------------ ------------ ----------- ----------- ----------- ------------
Net Assets:
Beginning of year................ 462,955,606 476,857,992 51,755,879 41,588,604 52,171,261 82,247,606
------------ ------------ ----------- ----------- ----------- ------------
End of year...................... $413,629,153 $462,955,606 $65,770,585 $51,755,879 $61,968,446 $ 52,171,261
============ ============ =========== =========== =========== ============
See notes to financial statements.
37
PACIFIC CAPITAL FUNDS
Statements of Changes in Net Assets, Continued
Value Fund Small Cap Fund
-------------------------- --------------------------
For the Year For the Year For the Year For the Year
Ended Ended Ended Ended
July 31, 2003 July 31, 2002 July 31, 2003 July 31, 2002
------------- ------------- ------------- -------------
From Investment Activities:
Operations:
Net investment income..................................... $ 2,641,503 $ 1,654,462 $ 104,354 $ 338,718
Net realized gains (losses) from investment transactions.. (13,768,327) (29,928,320) (126,637) 8,357,056
Net change in unrealized appreciation (depreciation) from
investments.............................................. 27,939,859 (27,069,754) 15,810,277 (9,146,353)
------------ ------------ ----------- -----------
Change in net assets resulting from operations.............. 16,813,035 (55,343,612) 15,787,994 (450,579)
------------ ------------ ----------- -----------
Distributions to Class A Shareholders:
From net investment income................................ (20,330) (10,639) (2,625) (2,859)
From net realized gains................................... -- -- (150,765) (69,677)
Distributions to Class B Shareholders:
From net investment income................................ (3,545) -- -- (310)
From net realized gains................................... -- -- (242,247) (82,711)
Distributions to Class Y Shareholders:
From net investment income................................ (2,538,440) (1,665,914) (195,037) (325,568)
From net realized gains................................... -- -- (7,348,094) (5,158,310)
------------ ------------ ----------- -----------
Change in net assets from shareholder distributions......... (2,562,315) (1,676,553) (7,938,768) (5,639,435)
------------ ------------ ----------- -----------
Change in net assets from share transactions................ (2,253,114) 24,186,766 10,461,886 21,677,243
------------ ------------ ----------- -----------
Change in net assets........................................ 11,997,606 (32,833,399) 18,311,112 15,587,229
------------ ------------ ----------- -----------
Net Assets:
Beginning of year......................................... 202,320,197 235,153,596 71,279,681 55,692,452
------------ ------------ ----------- -----------
End of year............................................... $214,317,803 $202,320,197 $89,590,793 $71,279,681
============ ============ =========== ===========
See notes to financial statements.
38
PACIFIC CAPITAL FUNDS
Growth Stock Fund
Schedule of Portfolio Investments
July 31, 2003
Security
Shares Description Value
- --------- ----------------------------------- ------------
Common Stocks (95.3%)
Advertising (1.1%)
42,180 Omnicom Group, Inc................. $ 3,116,258
------------
Aerospace/Defense (1.0%)
53,000 Lockheed Martin Corp............... 2,774,020
------------
Beverages (3.5%)
75,600 Anheuser-Busch Cos., Inc........... 3,917,592
124,444 PepsiCo, Inc....................... 5,733,135
------------
9,650,727
------------
Business Equipment & Services (5.4%)
44,410 Affiliated Computer Services, Inc.,
Class A (b)....................... 2,200,516
215,560 BearingPoint, Inc. (b)............. 2,371,160
148,490 Concord EFS, Inc. (b).............. 2,020,949
109,520 First Data Corp.................... 4,135,475
65,570 Fiserv, Inc. (b)................... 2,559,853
47,287 Paychex, Inc....................... 1,538,246
------------
14,826,199
------------
Computers & Peripherals (6.7%)
534,704 Cisco Systems, Inc. (b)............ 10,437,421
104,020 Dell, Inc. (b)..................... 3,503,394
162,630 EMC Corp. (b)...................... 1,730,383
23,140 Lexmark International, Inc. (b).... 1,484,894
26,150 SanDisk Corp. (b).................. 1,482,444
------------
18,638,536
------------
Consumer Goods & Services (0.6%)
37,340 Clorox Co. (The)................... 1,620,183
------------
Diversified Operations (0.8%)
16,070 3M Co.............................. 2,253,014
------------
Electrical Equipment (4.4%)
430,093 General Electric Co................ 12,231,845
------------
Electronic Components/Instruments (0.5%)
62,030 Jabil Circuit, Inc. (b)............ 1,429,792
------------
Electronics--Semiconductors (8.4%)
222,740 Applied Materials, Inc. (b)........ 4,343,430
239,360 Intel Corp......................... 5,972,031
51,070 International Rectifier Corp. (b).. 1,409,532
34,730 KLA-Tencor Corp. (b)............... 1,793,805
118,170 Micron Technology, Inc. (b)........ 1,730,009
32,370 QLogic Corp. (b)................... 1,364,396
176,240 Skyworks Solutions, Inc. (b)....... 1,499,802
220,072 Taiwan Semiconductor
Manufacturing Co., Ltd.,
ADR (b)........................... 2,200,716
148,580 Texas Instruments, Inc............. 2,803,705
------------
23,117,426
------------
Entertainment (1.7%)
109,740 Viacom, Inc., Class B (b).......... 4,775,885
------------
Financial Services (9.8%)
114,220 Capital One Financial Corp......... 5,472,280
156,000 Citigroup, Inc..................... 6,988,799
75,690 Fannie Mae......................... 4,847,188
38,340 Fifth Third Bancorp................ 2,109,083
48,370 Goldman Sachs Group, Inc........... 4,214,962
Security
Shares Description Value
--------- ---------------------------------- ------------
Common Stocks, continued
Financial Services, continued
70,750 Morgan Stanley....................... $ 3,356,380
------------
26,988,692
------------
Food Distributors (0.7%)
48,350 Performance Food Group Co. (b)....... 1,826,663
------------
Food Processing & Packaging (1.0%)
89,010 Dean Foods Co. (b)................... 2,664,069
------------
Health Care (4.8%)
75,955 Cardinal Health, Inc................. 4,158,536
48,300 First Health Group Corp. (b)......... 1,247,106
85,500 Lincare Holdings, Inc. (b)........... 3,112,200
55,410 UnitedHealth Group, Inc.............. 2,886,307
23,690 WellPoint Health Networks,
Inc. (b)............................ 1,981,669
------------
13,385,818
------------
Insurance (3.4%)
111,450 American International Group, Inc.... 7,155,090
45,140 Hartford Financial Services Group,
Inc. (The).......................... 2,355,857
------------
9,510,947
------------
Media--Radio Broadcasting (0.8%)
83,890 Hispanic Broadcasting Corp.,
Class A (b)......................... 2,196,240
------------
Medical--Biotechnology (3.7%)
87,250 Amgen, Inc. (b)...................... 6,070,855
47,690 Charles River Laboratories
International, Inc. (b)............. 1,772,160
98,990 Pharmaceutical Product
Development, Inc. (b)............... 2,479,700
------------
10,322,715
------------
Medical Instruments (2.3%)
89,990 Medtronic, Inc....................... 4,634,485
35,010 Zimmer Holdings, Inc. (b)............ 1,673,828
------------
6,308,313
------------
Medical Services (2.4%)
48,550 Express Scripts, Inc. (b)............ 3,204,300
59,280 Quest Diagnostics, Inc. (b).......... 3,542,573
------------
6,746,873
------------
Medical Supplies (0.8%)
41,690 Patterson Dental Co. (b)............. 2,230,415
------------
Oil & Gas--Exploration & Production Services (0.8%)
68,700 National-Oilwell, Inc. (b)........... 1,264,080
23,110 Weatherford International Ltd. (b)... 838,200
------------
2,102,280
------------
Packaging & Containers (0.4%)
49,300 Pactiv Corp. (b)..................... 973,675
------------
Pharmaceuticals (8.7%)
58,920 Abbott Laboratories.................. 2,312,610
32,820 AmerisourceBergen Corp............... 2,070,614
35,390 Biovail Corp. (b).................... 1,358,622
81,950 Johnson & Johnson.................... 4,244,191
55,540 Lilly (Eli) & Co..................... 3,656,754
See notes to financial statements.
39
PACIFIC CAPITAL FUNDS
Growth Stock Fund
Schedule of Portfolio Investments, Continued
July 31, 2003
Security
Shares Description Value
- --------- ------------------------------- ------------
Common Stocks, continued
Pharmaceuticals, continued
312,544 Pfizer, Inc.................... $ 10,426,467
------------
24,069,258
------------
Publishing (0.9%)
42,280 McGraw-Hill Cos., Inc. (The)... 2,569,778
------------
Restaurants (1.7%)
39,100 Brinker International, Inc. (b) 1,368,500
119,090 Starbucks Corp. (b)............ 3,254,730
------------
4,623,230
------------
Retail (10.1%)
26,290 AutoZone, Inc. (b)............. 2,188,905
83,550 Bed Bath & Beyond, Inc. (b).... 3,232,550
72,030 Kohl's Corp. (b)............... 4,274,981
122,410 Lowe's Cos., Inc............... 5,821,819
157,040 Wal-Mart Stores, Inc........... 8,780,105
107,790 Walgreen Co.................... 3,225,077
------------
27,523,437
------------
Retail--Food Chain (0.5%)
25,760 Whole Foods Market, Inc. (b)... 1,313,142
------------
Software & Computer Services (6.8%)
37,110 Mercury Interactive Corp. (b).. 1,460,650
375,870 Microsoft Corp................. 9,922,968
317,960 Oracle Corp. (b)............... 3,815,520
118,863 VERITAS Software Corp. (b)..... 3,660,980
------------
18,860,118
------------
Security
Shares Description Value
--------- -------------------------- ------------
Common Stocks, continued
Telecommunications--Services & Equipment (0.4%)
32,140 QUALCOMM, Inc.................. $ 1,203,964
------------
Transportation (0.9%)
37,500 FedEx Corp..................... 2,414,625
------------
Utilities--Telecommunications (0.3%)
21,980 Verizon Communications......... 766,223
------------
Total Common Stocks (Cost $261,386,693) 263,034,360
------------
Depositary Receipts (3.9%)
220,000 Nasdaq 100 Share Index (b)..... 7,002,600
39,150 S&P 500 Depositary Receipt..... 3,891,119
------------
Total Depositary Receipts (Cost $9,312,423) 10,893,719
------------
Investment Company (0.7%)
1,871,380 LEADER Money Market Fund,
Institutional Shares.......... 1,871,380
------------
Total Investment Company (Cost $1,871,380) 1,871,380
------------
Total Investments (Cost $272,570,496)
(a)--99.9% 275,799,459
Other assets in excess of liabilities--0.1% 371,378
------------
Net Assets--100.0% $276,170,837
============
- --------
(a) Represents cost for financial reporting purposes and differs from value by
unrealized appreciation (depreciation) of securities as follows:
Unrealized appreciation.... $ 31,344,667
Unrealized depreciation.... (28,115,704)
------------
Net unrealized appreciation $ 3,228,963
============
Aggregate cost for federal income tax purposes is substantially the same.
(b) Non-income producing security.
ADR--American Depositary Receipt
See notes to financial statements.
40
PACIFIC CAPITAL FUNDS
Growth and Income Fund
Schedule of Portfolio Investments
July 31, 2003
Security
Shares Description Value
- ------- ---------------------------------- -------------
Common Stocks (96.5%)
Aerospace/Defense (0.6%)
16,070 Alliant Techsystems, Inc. (b)..... $ 882,243
-------------
Banks (3.5%)
34,760 Bank of America Corp.............. 2,870,133
108,590 MBNA Corp......................... 2,420,471
-------------
5,290,604
-------------
Beverages (3.6%)
37,640 Anheuser-Busch Cos., Inc.......... 1,950,504
33,750 Coca-Cola Co. (The)............... 1,517,738
41,515 PepsiCo, Inc...................... 1,912,596
-------------
5,380,838
-------------
Business Equipment & Services (1.3%)
24,740 Deluxe Corp....................... 1,098,456
25,995 Paychex, Inc...................... 845,617
-------------
1,944,073
-------------
Chemicals (1.0%)
32,740 E.I. du Pont de Nemours & Co...... 1,438,596
-------------
Computers & Peripherals (6.6%)
144,510 Cisco Systems, Inc. (b)........... 2,820,835
54,330 Dell, Inc. (b).................... 1,829,834
148,570 EMC Corp. (b)..................... 1,580,785
83,700 Hewlett-Packard Co................ 1,771,929
24,590 International Business Machines
Corp............................. 1,997,938
-------------
10,001,321
-------------
Consumer Goods & Services (1.5%)
25,120 Procter & Gamble Co............... 2,207,294
-------------
Data Processing (1.0%)
39,930 DST Systems, Inc. (b)............. 1,467,827
-------------
Diversified Operations (3.2%)
10,560 3M Co............................. 1,480,512
45,930 Honeywell International, Inc...... 1,298,900
27,130 United Technologies Corp.......... 2,040,990
-------------
4,820,402
-------------
Electrical Equipment (4.5%)
239,560 General Electric Co............... 6,813,086
-------------
Electronic Components/Instruments (2.1%)
152,740 Flextronics International Ltd. (b) 1,680,140
110,090 Vishay Intertechnology, Inc. (b).. 1,464,197
-------------
3,144,337
-------------
Electronics--Semiconductors (4.4%)
74,980 Applied Materials, Inc. (b)....... 1,462,110
128,280 Intel Corp........................ 3,200,586
38,340 Teradyne, Inc. (b)................ 630,693
74,674 Texas Instruments, Inc............ 1,409,098
-------------
6,702,487
-------------
Entertainment (1.9%)
64,590 Viacom, Inc., Class B (b)......... 2,810,957
-------------
Financial Services (8.4%)
72,380 American Express Co............... 3,197,025
78,710 Citigroup, Inc.................... 3,526,208
Security
Shares Description Value
- ------- ---------------------------------- -------------
Common Stocks, continued
Financial Services, continued
17,000 Fannie Mae........................ $ 1,088,680
28,980 Fifth Third Bancorp............... 1,594,190
42,905 J.P. Morgan Chase & Co............ 1,503,820
39,130 Morgan Stanley.................... 1,856,327
-------------
12,766,250
-------------
Food Distributors (0.9%)
46,580 SYSCO Corp........................ 1,403,455
-------------
Health Care (1.6%)
27,270 AdvancePCS (b).................... 1,033,260
19,030 Anthem, Inc. (b).................. 1,436,956
-------------
2,470,216
-------------
Insurance (5.5%)
77,585 American International Group, Inc. 4,980,957
68,540 Marsh & McLennan Cos., Inc........ 3,400,955
-------------
8,381,912
-------------
Insurance--Life & Health (0.7%)
31,020 AFLAC, Inc........................ 995,122
-------------
Media--Cable TV (1.6%)
80,750 Comcast Corp., Class A (b)........ 2,448,340
-------------
Medical--Biotechnology (1.8%)
39,440 Amgen, Inc. (b)................... 2,744,235
-------------
Medical Instruments (2.2%)
37,490 Medtronic, Inc.................... 1,930,735
30,290 Zimmer Holdings, Inc. (b)......... 1,448,165
-------------
3,378,900
-------------
Metal & Mineral Production (0.6%)
34,030 Alcoa, Inc........................ 945,013
-------------
Motorcycle Manufacturing (0.6%)
18,240 Harley-Davidson, Inc.............. 855,091
-------------
Oil & Gas--Exploration & Production Services (5.4%)
23,180 ChevronTexaco Corp................ 1,671,510
13,798 Devon Energy Corp................. 653,611
121,180 Exxon Mobil Corp.................. 4,311,584
32,470 Marathon Oil Corp................. 835,778
16,110 Schlumberger Ltd.................. 726,078
-------------
8,198,561
-------------
Pharmaceuticals (7.0%)
21,000 AmerisourceBergen Corp............ 1,324,890
51,616 Johnson & Johnson................. 2,673,193
24,140 Lilly (Eli) & Co.................. 1,589,378
149,648 Pfizer, Inc....................... 4,992,257
-------------
10,579,718
-------------
Real Estate (2.8%)
30,490 Healthcare Realty Trust, Inc...... 999,767
35,690 iStar Financial, Inc.............. 1,293,763
46,660 Simon Property Group, Inc......... 1,976,051
-------------
4,269,581
-------------
See notes to financial statements.
41
PACIFIC CAPITAL FUNDS
Growth and Income Fund
Schedule of Portfolio Investments, Continued
July 31, 2003
Security
Shares Description Value
- ------- ------------------------------------ -------------
Common Stocks, continued
Restaurants (1.3%)
23,610 Applebee's International, Inc....... $ 753,159
45,976 Starbucks Corp. (b)................. 1,256,524
-------------
2,009,683
-------------
Retail (9.9%)
37,040 Best Buy Co., Inc. (b).............. 1,616,796
45,430 Chico's FAS, Inc. (b)............... 1,233,425
51,390 Costco Wholesale Corp. (b).......... 1,904,000
57,190 Home Depot, Inc. (The).............. 1,784,328
40,120 Hot Topic, Inc. (b)................. 1,159,468
36,195 Kohl's Corp. (b).................... 2,148,173
87,380 Wal-Mart Stores, Inc................ 4,885,415
-------------
14,731,605
-------------
Savings & Loans (0.7%)
26,810 Washington Mutual, Inc.............. 1,058,459
-------------
Software & Computer Services (4.7%)
204,310 Microsoft Corp...................... 5,393,784
146,990 Oracle Corp. (b).................... 1,763,880
-------------
7,157,664
-------------
Transportation (1.3%)
30,370 United Parcel Service, Inc., Class B 1,915,740
-------------
Security
Shares Description Value
--------- -------------------------- -------------
Common Stocks, continued
Utilities--Electric (0.6%)
15,230 Dominion Resources, Inc...... $ 915,323
-------------
Utilities--Telecommunications (3.7%)
39,380 ALLTEL Corp.................. 1,842,590
108,066 Verizon Communications....... 3,767,181
-------------
5,609,771
-------------
Total Common Stocks (Cost $144,969,494) 145,738,704
-------------
Depositary Receipt (1.1%)
16,600 S&P 500 Depositary Receipt... 1,649,874
-------------
Total Depositary Receipt (Cost $1,630,968) 1,649,874
-------------
Investment Company (2.4%)
3,696,487 LEADER Money Market Fund,
Institutional Shares........ 3,696,487
-------------
Total Investment Company (Cost $3,696,487) 3,696,487
-------------
Total Investments (Cost $150,296,949)
(a)--100.0% 151,085,065
Liabilities in excess of other assets--0.0% (3,000
-------------
Net Assets--100.0% $ 151,082,065
=============
- --------
(a) Represents cost for financial reporting purposes and differs from value by
unrealized appreciation (depreciation) of securities as follows:
Unrealized appreciation.... $ 17,170,756
Unrealized depreciation.... (16,382,640)
------------
Net unrealized appreciation $ 788,116
============
Aggregate cost for federal income tax purposes is substantially the same.
(b) Non-income producing security.
See notes to financial statements.
42
PACIFIC CAPITAL FUNDS
New Asia Growth Fund
Schedule of Portfolio Investments
July 31, 2003
Security
Shares Description Value
- --------- -------------------------------------- ------------
Common Stocks (98.3%)
China (10.1%)
Automotive (1.2%)
592,000 Denway Motors Ltd...................... $ 316,902
------------
Commercial Services (2.9%)
1,080,000 Anhui Expressway Co., Ltd., Class H.... 301,183
944,100 Zhejiang Expressway Co., Ltd., Class H. 444,860
------------
746,043
------------
Containers & Packaging (0.9%)
208,000 Cosco Pacific Ltd...................... 220,021
------------
Oil & Gas--Exploration & Production Services (1.6%)
235,000 CNOOC Ltd.............................. 405,263
------------
Real Estate (1.0%)
270,000 China Resources Enterprise Ltd......... 244,062
------------
Telecommunications (1.4%)
144,000 China Mobile Ltd....................... 370,189
------------
Utilities--Electric (1.1%)
210,000 Huaneng Power International, Inc.,
Class H............................... 284,066
------------
2,586,546
------------
Hong Kong (19.8%)
Apparel/Textile (4.5%)
258,500 Esprit Holdings Ltd.................... 662,884
304,000 Texwinca Holdings Ltd.................. 243,613
88,500 Yue Yuen Industrial Holdings Ltd....... 257,015
------------
1,163,512
------------
Banks (2.2%)
45,746 HSBC Holdings PLC...................... 561,615
------------
Chemicals (1.2%)
350,000 Kingboard Chemical Holdings Ltd........ 302,914
------------
Diversified--Conglomerates/Holding Cos. (2.1%)
44,300 Hutchison Whampoa Ltd.................. 289,682
52,000 Swire Pacific Ltd., Class A............ 240,023
------------
529,705
------------
Electronic Components/Instruments (1.2%)
164,000 Techtronic Industries Co., Ltd......... 301,747
------------
Financial Services (1.0%)
54,400 Dah Sing Financial Group............... 268,539
------------
Metals (0.4%)
216,000 Lung Kee (Bermuda) Holdings Ltd........ 96,932
------------
Real Estate (3.6%)
36,000 Cheung Kong Holdings Ltd............... 236,561
397,000 Hang Lung Group Ltd.................... 366,497
55,000 Sun Hung Kai Properties Ltd............ 326,506
------------
929,564
------------
Retail (1.1%)
824,000 Giordano International Ltd............. 290,541
------------
Transportation (0.2%)
12,200 Kowloon Motor Bus Holdings Ltd......... 55,218
------------
Utilities--Electric (2.3%)
134,000 CLP Holdings Ltd....................... 589,313
------------
5,089,600
------------
Security
Shares Description Value
- --------- ----------------------------------- ------------
Common Stocks, continued
India (0.7%)
Metals (0.7%)
9,140 Hindalco Industries Ltd., GDR (c).. $ 167,719
------------
Malaysia (6.5%)
Agricultural Operations (1.3%)
211,400 IOI Corp. Berhad................... 328,226
------------
Banks (1.5%)
576,773 Public Bank Berhad, Local Shares... 332,404
58,250 Public Bank Berhad................. 39,702
------------
372,106
------------
Building & Construction (0.5%)
77,000 Gamuda Berhad...................... 130,697
------------
Diversified--Conglomerates/Holding Cos. (1.3%)
81,000 Genting Berhad..................... 330,395
------------
Leisure (0.9%)
89,000 Tanjong PLC........................ 233,039
------------
Telecommunications (1.0%)
170,000 Maxis Communications Berhad........ 268,421
------------
1,662,884
------------
Philippines (0.9%)
Real Estate (0.9%)
1,881,310 Ayala Land, Inc.................... 219,996
------------
Singapore (9.1%)
Banks (4.1%)
45,000 Oversea-Chinese Banking Corp., Ltd. 273,875
104,000 United Overseas Bank Ltd........... 780,844
------------
1,054,719
------------
Beverages (0.8%)
36,000 Fraser & Neave Ltd................. 198,624
------------
Consumer Goods & Services (0.6%)
388,000 Singapore Post Ltd. (b)............ 155,588
------------
Electronic Components/Instruments (0.8%)
20,000 Venture Manufacturing Ltd.......... 203,629
------------
Health Care (0.7%)
353,000 Parkway Holdings Ltd............... 167,655
------------
Publishing (1.1%)
25,500 Singapore Press Holdings Ltd....... 274,131
------------
Telecommunications (1.0%)
319,000 MobileOne Ltd...................... 268,540
------------
2,322,886
------------
South Korea (28.4%)
Automotive (1.0%)
8,440 Hyundai Motor Co., Ltd............. 251,663
------------
Automotive Parts (1.0%)
9,100 Hyundai Mobis...................... 261,707
------------
Banks (3.5%)
21,289 Kookmin Bank....................... 698,813
27,840 Koram Bank......................... 201,165
------------
899,978
------------
See notes to financial statements.
43
PACIFIC CAPITAL FUNDS
New Asia Growth Fund
Schedule of Portfolio Investments, Continued
July 31, 2003
Security
Shares Description Value
- ------- ------------------------------------ ------------
Common Stocks, continued
South Korea, continued
Business Equipment & Services (0.9%)
4,030 Sindo Ricoh Co., Ltd................ $ 231,798
------------
Electronic Components/Instruments (12.9%)
10,520 Fine DNC Co., Ltd................... 176,884
3,600 Hankuk Electric Glass Co., Ltd...... 219,568
4,180 KH Vatec Co., Ltd................... 174,565
7,070 Samsung Electronics Co., Ltd........ 2,491,419
2,850 Samsung SDI Co., Ltd................ 264,358
------------
3,326,794
------------
Electronics--Semiconductors (1.0%)
37,134 Osung LST Co., Ltd. (b)............. 263,917
------------
Financial Services (1.0%)
19,290 Korea Exchange Bank Credit Services
Co., Ltd........................... 119,776
10,530 Shinhan Financial Group Co., Ltd.... 132,461
------------
252,237
------------
Insurance (0.8%)
4,010 Samsung Fire & Marine Insurance Co.,
Ltd................................ 200,075
------------
Retail (1.0%)
1,370 Shinsegae Co., Ltd.................. 250,093
------------
Steel (1.7%)
3,710 POSCO............................... 446,269
------------
Telecommunication Equipment (1.1%)
11,940 You Eal Electronics Co., Ltd........ 289,776
------------
Telecommunications (2.5%)
9,720 Korea Telecom Corp.................. 364,757
1,520 SK Telecom Co., Ltd................. 263,956
------------
628,713
------------
7,303,020
------------
Taiwan (18.7%)
Automotive Parts (0.9%)
97,000 Fine Blanking & Tool Co., Ltd....... 239,579
------------
Chemicals (1.1%)
216,480 Formosa Plastic Corp................ 293,760
------------
Computers & Peripherals (6.0%)
73,000 Asustek Computer, Inc............... 237,574
36,600 Benq Corp........................... 45,837
471,000 Chi Mei Optoelectronics Corp. (b)... 465,327
144,400 Chicony Electronics Co., Ltd........ 253,852
Security
Shares Description Value
- --------- ---------------------------------- ------------
Common Stocks, continued
Taiwan, continued
Computers & Peripherals, continued
117,000 Gigabyte Technology Co., Ltd....... $ 290,677
104,500 Quanta Computer, Inc............... 245,957
------------
1,539,224
------------
Electronics--Semiconductors (8.5%)
483,000 Advanced Semiconductor
Engineering, Inc. (b)............. 336,835
48,000 MediaTek, Inc...................... 573,248
34,310 Nanya Technology Corp. (b)......... 25,522
376,950 Powertech Technology, Inc. (b)..... 372,410
509,155 Taiwan Semiconductor Manufacturing
Co., Ltd. (b)..................... 872,893
------------
2,180,908
------------
Telecommunication Equipment (2.2%)
254,400 Zinwell Corp....................... 286,819
116,000 Zyxel Communications Corp. (b)..... 267,968
------------
554,787
------------
4,808,258
------------
Thailand (4.1%)
Banks (1.4%)
351,500 Kasikornbank Public Co., Ltd. (b).. 368,414
------------
Building Materials (1.1%)
75,100 Siam Cement Public Co., Ltd........ 293,387
------------
Real Estate (1.6%)
1,820,700 Land & Houses Public Co., Ltd.,
NVDR.............................. 377,325
------------
1,039,126
------------
Total Common Stocks (Cost $22,525,571) 25,200,035
------------
Equity Linked Notes (1.4%)
India (1.4%)
Metals (0.6%)
35,000 Tata Iron & Steel Co., Ltd. (b).... 157,500
------------
Pharmaceuticals (0.8%)
11,410 Ranbaxy Laboratories Ltd. (b)...... 202,642
------------
Total Equity Linked Notes (Cost $323,162) 360,142
------------
Total Investments (Cost $22,848,733)
(a)--99.7% 25,560,177
Other assets in excess of liabilities--0.3% 64,650
------------
Net Assets--100.0% $ 25,624,827
============
- --------
(a) Represents cost for financial reporting purposes and differs from value by
unrealized appreciation (depreciation) of securities as follows:
Unrealized appreciation.... $3,582,492
Unrealized depreciation.... (871,048)
----------
Net unrealized appreciation $2,711,444
==========
Aggregate cost for federal income tax purposes is substantially the same.
(b) Non-income producing security.
(c) A portion of this security is restricted as to resale as of July 31, 2003.
GDR--Global Depositary Receipt
NVDR--Non-Voting Depositary Receipt
PLC--Public Limited Company
See notes to financial statements.
44
PACIFIC CAPITAL FUNDS
Diversified Fixed Income Fund
Schedule of Portfolio Investments
July 31, 2003
Principal Security
Amount Description Value
- ----------- ----------------------------------- -------------
Corporate Bonds (44.6%)
Banks--Domestic (4.0%)
$ 2,975,000 Bank of New York Co., Inc.,
Series E, 2.20%, 5/12/06, MTN..... $ 2,955,294
1,750,000 Mercantile Safe Deposit & Trust,
5.70%, 11/15/11................... 1,792,231
1,350,000 U.S. Bancorp, 5.10%, 7/15/07....... 1,436,681
4,000,000 Wells Fargo Co., 3.12%, 8/15/08.... 3,871,783
-------------
10,055,989
-------------
Consumer Goods & Services (3.2%)
1,145,000 Colgate-Palmolive Co., Series B,
7.60%, 5/19/25, MTN............... 1,358,256
3,765,000 Estee Lauder Cos., Inc.,
6.00%, 1/15/12.................... 4,000,855
2,200,000 Procter & Gamble Co.,
8.50%, 8/10/09.................... 2,686,750
-------------
8,045,861
-------------
Electrical Equipment (1.2%)
3,000,000 General Electric Co.,
5.00%, 2/1/13..................... 2,940,972
-------------
Financial Services (9.4%)
2,000,000 General Electric Capital Corp.,
5.00%, 2/15/07, MTN............... 2,122,822
3,000,000 General Electric Capital Corp.,
8.63%, 6/15/08.................... 3,610,290
2,000,000 General Motors Acceptance Corp.,
4.50%, 7/15/06.................... 2,005,000
5,000,000 Goldman Sachs Group, Inc.,
6.88%, 1/15/11.................... 5,581,400
2,500,000 Morgan Stanley Dean Witter &
Co., 5.80%, 4/1/07................ 2,701,565
4,230,000 Pitney Bowes Credit Corp.,
5.75%, 8/15/08.................... 4,597,553
3,000,000 US Central Credit Union,
2.75%, 5/30/08.................... 2,868,750
-------------
23,487,380
-------------
Food Distributors (1.3%)
448,000 Ralston Purina Co.,
7.88%, 6/15/25.................... 544,267
2,495,000 SYSCO Corp., 7.25%, 4/15/07........ 2,806,875
-------------
3,351,142
-------------
Foreign Agency (1.2%)
3,000,000 Province of Ontario, 3.28%, 3/28/08 2,962,500
-------------
Oil & Gas--Exploration & Production Services (7.5%)
800,000 Amoco Argentina, 6.63%, 9/15/05.... 876,000
5,000,000 Amoco Co., 6.50%, 8/1/07........... 5,550,000
5,000,000 British Transco Finance,
6.63%, 6/1/18..................... 5,231,250
2,056,000 ChevronTexaco Corp.,
8.11%, 12/1/04, Chevron Corp.
Guaranteed........................ 2,163,940
4,477,000 Rowan Cos., Inc., Title XI Shipping
Bonds, 5.88%, 3/15/12, U.S.
Government Guaranteed............. 4,889,685
-------------
18,710,875
-------------
Principal Security
Amount Description Value
- ----------- --------------------------------- -------------
Corporate Bonds, continued
Pharmaceuticals (2.2%)
$ 5,000,000 Zeneca Wilmington, Inc.,
7.00%, 11/15/23................. $ 5,559,415
-------------
Restaurants (1.1%)
1,400,000 McDonald's Corp., 6.50%, 8/1/07.. 1,540,000
1,025,000 Wendy's International, Inc.,
6.20%, 6/15/14.................. 1,091,625
-------------
2,631,625
-------------
Retail (1.3%)
2,500,000 Wal-Mart Stores, Inc.,
8.85%, 1/2/15................... 3,196,400
-------------
Sovereign Agency (2.1%)
5,000,000 Export Development Corp.,
4.55%, 6/30/05.................. 5,253,685
-------------
Supranational Agency (4.9%)
920,000 African Development Bank,
6.88%, 10/15/15................. 1,044,571
3,000,000 Asian Development Bank,
5.59%, 7/16/18.................. 3,075,000
2,000,000 European Investment Bank,
4.88%, 9/6/06, MTN.............. 2,119,460
4,779,000 Inter-American Development Bank,
8.50%, 3/15/11.................. 6,006,070
-------------
12,245,101
-------------
Telecommunications (2.7%)
4,075,000 GTE Southwest, Inc.,
First Mortgage Bond,
8.50%, 11/15/31................. 5,098,844
1,380,000 Southwestern Bell Telephone Co.,
7.00%, 7/1/15................... 1,580,100
-------------
6,678,944
-------------
Transportation (2.5%)
5,509,594 FedEx Corp., Pass Thru
Certificates, 7.50%, 1/15/18.... 6,210,803
-------------
Total Corporate Bonds (Cost $106,167,868) 111,330,692
-------------
Private Placements (4.8%)
Financial Services (0.9%)
2,146,867 Alter Moneta Receivables LLC,
2.56%, 3/15/11 (b).............. 2,147,958
-------------
Insurance (1.8%)
5,000,000 Monumental Global Funding II,
2.80%, 7/15/08 (b).............. 4,756,250
-------------
Minerals (0.9%)
2,000,000 North Finance (Bermuda) Ltd.,
7.00%, 9/15/05 (b).............. 2,153,052
-------------
Tools & Accessories (1.2%)
3,000,000 Stanley Works, 4.90%, 11/1/12 (b) 2,921,250
-------------
Total Private Placements (Cost $12,263,917) 11,978,510
-------------
U.S. Government Agencies (28.7%)
Federal Home Loan Bank (8.4%)
3,000,000 1.00%, 8/6/03.................... 2,999,417
5,000,000 6.50%, 11/15/05.................. 5,479,941
See notes to financial statements.
45
PACIFIC CAPITAL FUNDS
Diversified Fixed Income Fund
Schedule of Portfolio Investments, Continued
July 31, 2003
Principal Security
Amount Description Value
----------- --------------- -------------
U.S. Government Agencies, continued
Federal Home Loan Bank, continued
$ 5,000,000 2.00%, 2/6/06...... $ 5,000,325
3,000,000 4.88%, 11/15/06.... 3,190,845
1,000,000 5.80%, 9/2/08...... 1,098,002
3,000,000 7.63%, 5/14/10..... 3,563,157
-------------
21,331,687
-------------
Federal Home Loan Mortgage Corp. (8.1%)
125,000 2.88%, 9/26/05..... 125,294
1,250,000 2.00%, 5/19/06..... 1,245,325
2,075,000 6.75%, 5/30/06..... 2,311,612
5,000,000 4.50%, 7/23/07..... 5,171,760
4,200,000 3.75%, 2/20/08..... 4,218,161
6,675,000 6.25%, 3/5/12...... 7,050,902
-------------
20,123,054
-------------
Federal National Mortgage Assoc. (7.3%)
3,000,000 2.10%, 9/30/05..... 2,998,434
5,000,000 5.50%, 5/2/06...... 5,368,470
5,000,000 6.00%, 5/15/08..... 5,504,500
1,000,000 6.88%, 9/10/12..... 1,090,183
3,600,000 4.60%, 6/5/18...... 3,260,743
-------------
18,222,330
-------------
Housing & Urban Development (1.3%)
2,950,000 6.41%, 8/1/14...... 3,181,820
-------------
Private Export Funding (1.7%)
565,000 7.11%, 4/15/07..... 641,981
3,100,000 6.67%, 9/15/09..... 3,510,750
-------------
4,152,731
-------------
Small Business Administration Corp. (1.9%)
4,514,715 6.34%, 8/1/11...... 4,710,052
-------------
Total U.S. Government Agencies
(Cost $68,883,605) 71,721,674
-------------
Shares or
Principal Security
Amount Description Value
---------- ---------------------------- ------------
U.S. Treasury Bonds (6.4%)
$6,400,000 7.25%, 5/15/16.................. $ 7,782,503
2,850,000 7.88%, 2/15/21.................. 3,676,055
4,200,000 6.25%, 8/15/23.................. 4,612,784
------------
Total U.S. Treasury Bonds
(Cost $15,571,187) 16,071,342
------------
U.S. Treasury Notes (12.1%)
4,300,000 7.25%, 8/15/04.................. 4,565,895
1,000,000 7.50%, 2/15/05.................. 1,090,196
5,415,000 6.50%, 5/15/05.................. 5,874,641
5,000,000 5.75%, 11/15/05................. 5,422,270
3,000,000 6.63%, 5/15/07.................. 3,409,455
9,000,000 5.63%, 5/15/08.................. 9,931,644
------------
Total U.S. Treasury Notes (Cost $29,075,876) 30,294,101
------------
Investment Companies (2.2%)
3,770,836 LEADER Money Market Fund,
Institutional Shares........... 3,770,836
1,649,507 LEADER Treasury Money Market
Fund, Institutional Shares..... 1,649,507
------------
Total Investment Companies (Cost $5,420,343) 5,420,343
------------
Total Investments (Cost $237,382,796)
(a)--98.8% 246,816,662
Other assets in excess of liabilities--1.2% 3,118,911
------------
Net Assets--100.0% $249,935,573
============
- --------
(a) Represents cost for financial reporting purposes and differs from value by
unrealized appreciation (depreciation) of securities as follows:
Unrealized appreciation.... $11,561,128
Unrealized depreciation.... (2,127,262)
-----------
Net unrealized appreciation $ 9,433,866
===========
Aggregate cost for federal income tax purposes is substantially the same.
(b) Security exempt from registration under Rule 144A of the Securities Act of
1933, as amended. These securities may be resold in transactions exempt
from registration normally to qualified institutional buyers.
MTN--Medium Term Note
See notes to financial statements.
46
PACIFIC CAPITAL FUNDS
Ultra Short Government Fund
Schedule of Portfolio Investments
July 31, 2003
Principal
Amount Security Description Value
- ------------ --------------------------------------------------- ------------
U.S. Government Agencies (99.3%)
Federal Farm Credit Bank (49.2%)
$100,356,000 0.95%, 8/1/03....................................... $100,353,352
5,000,000 1.41%, 8/5/03....................................... 4,999,488
35,000 5.375%, 9/11/03..................................... 35,167
500,000 6.40%, 10/20/03..................................... 505,625
1,000,000 5.10%, 11/24/03..................................... 1,012,840
750,000 5.10%, 6/7/04....................................... 774,569
7,000,000 5.00%, 7/16/04...................................... 7,245,000
1,000,000 8.06%, 1/4/05....................................... 1,088,800
2,000,000 3.875%, 2/1/05...................................... 2,061,188
3,000,000 1.75%, 4/8/05....................................... 2,993,871
3,000,000 2.00%, 6/24/05...................................... 3,000,114
1,385,000 2.10%, 3/17/06...................................... 1,371,081
440,000 2.48%, 4/7/06....................................... 439,314
------------
125,880,409
------------
Federal Home Loan Bank (40.6%)
10,000,000 0.99%, 8/13/03...................................... 9,996,424
5,000,000 4.125%, 8/15/03..................................... 5,006,147
1,270,000 5.575%, 9/2/03...................................... 1,274,864
250,000 5.60%, 9/2/03....................................... 250,963
5,000,000 5.125%, 9/15/03..................................... 5,024,882
3,500,000 6.375%, 11/14/03.................................... 3,553,074
800,000 5.40%, 11/20/03..................................... 810,489
3,000,000 5.375%, 1/5/04...................................... 3,055,251
1,000,000 3.20%, 2/13/04...................................... 1,011,110
2,000,000 5.25%, 2/13/04...................................... 2,043,960
250,000 5.40%, 3/1/04....................................... 256,208
2,000,000 1.41%, 3/8/04....................................... 2,000,148
2,000,000 1.425%, 3/8/04...................................... 2,000,144
1,500,000 4.875%, 4/16/04..................................... 1,539,158
9,000,000 4.875%, 5/14/04..................................... 9,258,659
1,500,000 3.375%, 6/15/04..................................... 1,527,414
8,000,000 4.75%, 6/28/04...................................... 8,253,263
1,000,000 2.25%, 8/13/04...................................... 1,009,049
2,500,000 4.625%, 8/13/04..................................... 2,584,375
6,000,000 6.25%, 8/13/04...................................... 6,300,000
200,000 6.00%, 9/15/04...................................... 210,202
1,650,000 1.40%, 9/17/04...................................... 1,649,477
1,500,000 3.625%, 10/15/04.................................... 1,538,139
2,500,000 4.31%, 10/15/04..................................... 2,515,625
1,435,000 3.375%, 11/15/04.................................... 1,469,081
1,000,000 4.125%, 11/15/04.................................... 1,032,500
1,500,000 4.125%, 1/14/05..................................... 1,550,832
500,000 1.875%, 2/15/05..................................... 500,454
Principal
Amount Security Description Value
- ----------- --------------------------------------------------- ------------
U.S. Government Agencies, continued
Federal Home Loan Bank, continued
$ 240,000 4.375%, 2/15/05..................................... $ 249,300
1,000,000 2.01%, 2/25/05...................................... 1,000,446
2,000,000 2.02%, 2/28/05...................................... 2,001,024
500,000 4.00%, 4/25/05...................................... 517,861
2,090,000 7.25%, 5/13/05...................................... 2,288,374
1,500,000 6.955%, 7/15/05..................................... 1,646,250
2,000,000 2.00%, 9/26/05...................................... 1,994,230
2,000,000 2.10%, 9/26/05...................................... 1,997,908
500,000 2.23%, 10/28/05..................................... 500,054
1,000,000 3.05%, 11/14/05..................................... 1,000,000
500,000 2.50%, 12/15/05..................................... 502,132
1,000,000 1.83%, 12/30/05..................................... 987,784
1,000,000 5.29%, 1/27/06...................................... 1,069,160
1,000,000 4.64%, 1/30/06...................................... 1,015,435
500,000 2.50%, 3/10/06...................................... 499,984
125,000 2.00%, 3/30/06...................................... 123,336
1,500,000 1.875%, 6/15/06..................................... 1,472,408
2,000,000 1.90%, 7/7/06....................................... 1,956,352
2,000,000 2.08%, 7/14/06...................................... 1,965,552
3,780,000 2.285%, 7/28/06..................................... 3,734,016
------------
103,743,498
------------
Student Loan Marketing Assoc. (6.5%)
850,000 2.95%, 1/2/04....................................... 856,375
13,200,000 5.00%, 6/30/04...................................... 13,678,500
2,000,000 3.375%, 7/15/04..................................... 2,040,622
------------
16,575,497
------------
Tennessee Valley Authority (3.0%)
7,500,000 4.75%, 7/15/04...................................... 7,725,000
------------
Total U.S. Government Agencies
(Cost $251,818,619) 253,924,404
------------
U.S. Treasury Notes (1.3%)
2,000,000 3.00%, 1/31/04...................................... 2,019,922
399,000 1.25%, 5/31/05...................................... 395,805
1,000,000 2.00%, 5/15/06...................................... 994,063
------------
Total U.S. Treasury Notes (Cost $3,394,079) 3,409,790
------------
Total Investments (Cost $255,212,698)
(a)--100.6% 257,334,194
Liabilities in excess of other assets--(0.6)% (1,637,108)
------------
Net Assets--100.0% $255,697,086
============
- --------
(a) Represents cost for financial reporting purposes and differs from value by
unrealized appreciation (depreciation) of securities as follows:
Unrealized appreciation.... $2,285,269
Unrealized depreciation.... (163,773)
----------
Net unrealized appreciation $2,121,496
==========
Aggregate cost for federal income tax purposes is substantially the same.
See notes to financial statements.
47
PACIFIC CAPITAL FUNDS
Short Intermediate U.S. Government Securities Fund
Schedule of Portfolio Investments
July 31, 2003
Principal Security
Amount Description Value
- ---------- ---------------- -----------
U.S. Government Agencies (84.3%)
Federal Farm Credit Bank (25.8%)
$9,252,000 0.95%, 8/1/03... $ 9,251,755
5,000,000 3.875%, 12/15/04 5,149,999
2,000,000 3.875%, 2/1/05.. 2,061,188
1,000,000 5.75%, 2/9/05... 1,058,920
1,000,000 1.75%, 4/8/05... 997,957
2,000,000 2.125%, 8/15/05. 2,003,378
500,000 5.10%, 11/9/05.. 531,572
10,000 6.50%, 11/22/05. 10,948
1,000,000 5.50%, 6/15/06.. 1,078,750
250,000 6.30%, 8/8/07... 278,081
200,000 6.52%, 9/24/07.. 224,412
500,000 3.625%, 11/19/07 501,024
200,000 4.00%, 12/24/07. 201,750
1,000,000 2.95%, 6/12/08.. 968,722
-----------
24,318,456
-----------
Federal Home Loan Bank (55.4%)
200,000 5.40%, 11/20/03. 202,622
1,600,000 3.00%, 12/26/03. 1,612,590
1,000,000 3.20%, 2/13/04.. 1,011,110
1,000,000 5.25%, 2/13/04.. 1,021,980
1,500,000 3.375%, 6/15/04. 1,527,414
1,000,000 4.75%, 6/28/04.. 1,031,658
1,000,000 2.25%, 8/13/04.. 1,009,049
500,000 3.375%, 11/15/04 511,875
3,000,000 4.125%, 11/15/04 3,097,500
300,000 4.375%, 2/15/05. 311,625
1,500,000 5.25%, 5/13/05.. 1,589,435
500,000 6.955%, 7/15/05. 548,750
1,000,000 3.25%, 8/15/05.. 1,024,043
1,000,000 6.875%, 8/15/05. 1,098,181
15,000 6.34%, 10/19/05. 16,364
500,000 2.23%, 10/28/05. 500,054
100,000 6.50%, 11/15/05. 109,599
500,000 2.50%, 12/15/05. 502,132
1,000,000 5.29%, 1/27/06.. 1,069,160
1,000,000 4.64%, 1/30/06.. 1,015,435
1,000,000 2.60%, 2/24/06.. 1,001,954
500,000 2.50%, 3/10/06.. 499,984
2,000,000 2.50%, 3/24/06.. 1,998,772
7,000,000 2.125%, 5/15/06. 6,912,499
5,000,000 5.375%, 5/15/06. 5,373,089
500,000 1.90%, 7/7/06... 489,088
1,000,000 5.25%, 8/15/06.. 1,075,000
Principal Security
Amount Description Value
---------- ---------------- -----------
U.S. Government Agencies, continued
Federal Home Loan Bank, continued
$ 150,000 4.61%, 11/6/06........ $ 158,250
1,000,000 4.875%, 11/15/06...... 1,063,615
2,000,000 6.79%, 2/5/07......... 2,253,376
3,000,000 4.875%, 2/15/07....... 3,185,649
890,000 5.00%, 3/8/07......... 950,357
365,000 6.995%, 4/2/07........ 414,629
500,000 4.875%, 5/15/07....... 530,864
1,500,000 7.625%, 5/15/07....... 1,741,758
210,000 7.325%, 5/30/07....... 241,287
255,000 6.50%, 8/15/07........ 285,609
355,000 4.10%, 8/27/07........ 355,783
1,260,000 3.175%, 10/2/07....... 1,250,990
425,000 3.45%, 11/5/07........ 426,057
500,000 4.25%, 11/7/07........ 504,222
225,000 3.50%, 11/15/07....... 225,844
1,000,000 3.375%, 2/15/08....... 995,115
250,000 3.50%, 4/15/08........ 248,523
1,000,000 6.185%, 5/6/08........ 1,115,124
-----------
52,108,014
-----------
Student Loan Marketing Assoc. (1.4%)
1,000,000 3.375%, 7/15/04....... 1,020,311
250,000 5.85%, 6/1/07......... 274,023
-----------
1,294,334
-----------
Tennessee Valley Authority (1.7%)
1,500,000 6.375%, 6/15/05....... 1,621,875
-----------
Total U.S. Government Agencies
(Cost $77,885,580) 79,342,679
-----------
U.S. Treasury Notes (14.8%)
248,000 5.875%, 2/15/04....... 254,442
493,000 6.00%, 8/15/04........ 517,169
300,000 6.50%, 5/15/05........ 325,465
2,200,000 6.50%, 8/15/05........ 2,405,993
1,500,000 7.00%, 7/15/06........ 1,697,873
200,000 3.00%, 11/15/07....... 199,516
1,000,000 3.00%, 2/15/08........ 992,383
7,750,000 2.625%, 5/15/08....... 7,525,373
-----------
Total U.S. Treasury Notes (Cost $13,879,216) 13,918,214
-----------
Total Investments (Cost $91,764,796)
(a)--99.1% 93,260,893
Other assets in excess of liabilities--0.9% 890,006
-----------
Net Assets--100.0% $94,150,899
===========
- --------
(a) Represents cost for financial reporting purposes and differs from value by
unrealized appreciation (depreciation) of securities as follows:
Unrealized appreciation.... $2,044,211
Unrealized depreciation.... (548,114)
----------
Net unrealized appreciation $1,496,097
==========
Aggregate cost for federal income tax purposes is substantially the same.
See notes to financial statements.
48
PACIFIC CAPITAL FUNDS
Tax-Free Securities Fund
Schedule of Portfolio Investments
July 31, 2003
Principal Security
Amount Description Value
- ------------ ------------------------------- -------------
Alternative Minimum Tax Paper (14.9%)
Hawaii (14.9%)
$ 3,000,000 Hawaii Airport System Revenue,
5.63%, 7/1/18, Callable
7/1/21 @ 100, FGIC............ $ 3,132,990
15,375,000 Hawaii Airport System Revenue,
Second Series, 6.90%, 7/1/12,
Escrowed to Maturity, MBIA.... 18,241,976
3,000,000 Hawaii Department of Budget &
Finance Special Purpose
Revenue, Hawaiian Electric
Co., 5.70%, 7/1/20, Callable
7/1/10 @ 101, AMBAC........... 3,145,560
11,000,000 Hawaii Department of Budget &
Finance Special Purpose
Revenue, Hawaiian Electric
Co., Series A, 6.60%, 1/1/25,
Callable 1/1/05 @101, MBIA.... 11,690,250
5,000,000 Hawaii Department of Budget &
Finance Special Purpose
Revenue, Hawaiian Electric
Co., Series A, 6.20%, 5/1/26,
Callable 5/1/06 @ 101, MBIA... 5,449,650
7,200,000 Hawaii Department of Budget &
Finance Special Purpose
Revenue, Hawaiian Electric
Co., Series A, 5.65%, 10/1/27,
Callable 10/1/12 @ 101,
MBIA.......................... 7,429,608
2,650,000 Hawaii Harbor Capital
Improvement Revenue, 6.10%,
7/1/07, Callable 7/1/04 @102,
FGIC.......................... 2,792,809
4,660,000 Hawaii Harbor Capital
Improvement Revenue, 6.38%,
7/1/24, Callable 7/1/04 @ 102,
FGIC.......................... 4,918,630
1,500,000 Hawaii Harbor System Revenue,
Series B, 5.50%, 7/1/19,
Callable 7/1/12 @ 100,
AMBAC......................... 1,541,355
3,120,000 Hawaii Housing Finance &
Development Corp., Single
Family Mortgage Revenue,
Series A, 6.00%, 7/1/26,
Callable 7/1/04 @ 102,
FNMA.......................... 3,165,365
-------------
Total Alternative Minimum Tax Paper
(Cost $55,913,666) 61,508,193
-------------
Commercial Paper (0.2%)
Hawaii (0.2%)
1,000,000 Honolulu City & County GO,
1.05%, Mandatory Put
8/7/03 @ 100.................. 1,000,000
-------------
Total Commercial Paper (Cost $1,000,000) 1,000,000
-------------
Principal Security
Amount Description Value
- ------------ --------------------------------- -------------
Municipal Bonds (82.8%)
Arizona (1.7%)
$ 1,000,000 Maricopa School District No. 69
Paradise Valley GO, 5.40%,
7/1/12, Callable 7/1/05 @ 101,
MBIA............................ $ 1,071,500
1,000,000 Mesa GO, 5.00%, 7/1/13, FGIC..... 1,101,220
2,150,000 Phoenix Civic Improvement Corp.
Revenue, 5.25%, 7/1/16,
Callable 7/1/27 @ 100, MBIA..... 2,288,589
2,510,000 Scottsdale GO, 5.38%, 7/1/16,
Callable 7/1/11 @ 101........... 2,696,568
-------------
7,157,877
-------------
California (0.7%)
2,745,000 San Francisco City & County
Airport Community
International Airport Revenue,
Second Series, 5.63%, 5/1/21,
Callable 5/1/06 @ 101, FGIC..... 2,946,236
-------------
Colorado (0.6%)
600,000 Adams & Arapahoe Counties
School District No. 28 GO,
Series C, 5.35%, 12/1/15,
Callable 12/1/06 @ 102,
FGIC............................ 653,712
2,000,000 Colorado Housing & Finance
Authority Revenue, Class I,
Series A-1, 0.88%*, 10/1/30,
FHLB............................ 2,000,000
-------------
2,653,712
-------------
Connecticut (1.2%)
5,000,000 Connecticut State Health &
Educational Facilities Authority
Revenue, Series V-2,
0.82%*, 7/1/36.................. 5,000,000
-------------
Florida (6.3%)
3,000,000 Florida State Board of Education
Capital Outlay GO, Series C,
5.88%, 6/1/20, Callable 6/1/10
@ 101, FGIC..................... 3,289,710
700,000 Florida State Board of Education
Capital Outlay GO, Series 99E,
5.25%, 6/1/12, Callable
6/1/11 @ 101.................... 763,861
5,000,000 Florida State Turnpike Authority
Revenue, Department of
Transportation, Series A,
5.50%, 7/1/17, Callable
7/1/05 @ 101, FGIC.............. 5,444,700
3,500,000 Florida State Turnpike Authority
Revenue, Department of
Transportation, Series A,
5.75%, 7/1/17, Callable
7/1/10 @ 101.................... 3,843,980
See notes to financial statements.
49
PACIFIC CAPITAL FUNDS
Tax-Free Securities Fund
Schedule of Portfolio Investments, Continued
July 31, 2003
Principal Security
Amount Description Value
- ------------ -------------------------------- -------------
Municipal Bonds, continued
Florida, continued
$ 2,000,000 Miami-Dade County Expressway
Authority Toll System Revenue,
6.00%, 7/1/20, Prerefunded
7/1/10 @ 101, FGIC............. $ 2,320,040
4,875,000 Orange County Public Service Tax
Revenue, 6.00%, 10/1/24,
Callable 10/1/05 @ 102,
FGIC........................... 5,354,651
3,725,000 Orlando Utilities Community
Water & Electric Revenue,
Series D, 6.75%, 10/1/17....... 4,526,173
-------------
25,543,115
-------------
Georgia (2.6%)
390,000 Georgia Municipal Electric
Authority Power Revenue,
Series W, 6.60%, 1/1/18,
Escrowed to Maturity, MBIA..... 476,112
6,420,000 Georgia Municipal Electric
Authority Power Revenue,
Series W, 6.60%, 1/1/18,
MBIA........................... 7,708,365
2,330,000 Metropolitan Atlanta Rapid
Transportation Authority Sales
Tax Revenue, Series P,
6.25%, 7/1/11, AMBAC........... 2,735,676
-------------
10,920,153
-------------
Hawaii (44.7%)
1,000,000 Hawaii County GO, Series A,
4.70%, 2/1/07, Callable
2/1/06 @ 101.5, FGIC........... 1,068,880
2,000,000 Hawaii County GO, Series A,
5.50%, 5/1/08, FGIC............ 2,223,920
1,000,000 Hawaii County GO, Series A,
4.90%, 2/1/09, Callable
2/1/06 @ 101.5, FGIC........... 1,073,430
1,810,000 Hawaii County GO, Series A,
5.00%, 2/1/10, Callable
2/1/06 @ 101.5, FGIC........... 1,927,704
2,095,000 Hawaii County GO, Series A,
5.10%, 2/1/13, Callable
2/1/06 @ 101.5, FGIC........... 2,242,006
605,000 Hawaii County GO, Series A,
5.60%, 5/1/13, FGIC............ 674,648
1,065,000 Hawaii County GO, Series A,
5.50%, 7/15/14, FGIC........... 1,170,499
2,320,000 Hawaii County GO, Series A,
5.20%, 2/1/15, Callable
2/1/06 @ 101.5, FGIC........... 2,484,279
1,340,000 Hawaii County GO, Series A,
5.50%, 7/15/15, FGIC........... 1,460,386
2,000,000 Hawaii County GO, Series A,
5.50%, 5/15/16, Callable
5/15/09 @ 101, FSA............. 2,164,880
Principal Security
Amount Description Value
- ------------ --------------------------------- -------------
Municipal Bonds, continued
Hawaii, continued
$ 3,000,000 Hawaii Department of Budget &
Finance, Special Purpose
Revenue, Hawaiian Electric
Co., Series A, 4.95%, 4/1/12,
MBIA............................ $ 3,202,110
2,000,000 Hawaii Department of Budget &
Finance, Special Purpose
Revenue, Hawaiian Electric
Co., Series A, 5.50%, 12/1/14,
Callable 12/1/09 @ 101,
AMBAC........................... 2,175,720
1,700,000 Hawaii Department of Budget &
Finance, Special Purpose
Revenue, Kapiolani Health Care
System, 6.30%, 7/1/08, Callable
8/31/03 @ 102, MBIA............. 1,737,400
3,680,000 Hawaii Department of Budget &
Finance, Special Purpose
Revenue, Kapiolani Health Care
System, 6.40%, 7/1/13, Callable
8/31/03 @ 102, MBIA............. 3,761,107
1,455,000 Hawaii Department of Budget &
Finance, Special Purpose
Revenue, Queens Health
System, Series A, 5.88%,
7/1/11, Callable 7/1/06 @ 102... 1,546,738
3,245,000 Hawaii Department of Budget &
Finance, Special Purpose
Revenue, Queens Health
System, Series A, 6.05%,
7/1/16, Callable 7/1/06 @ 102... 3,387,131
3,500,000 Hawaii Department of Budget &
Finance, Special Purpose
Revenue, Queens Health
System, Series B, 5.25%, 7/1/23,
Callable 7/1/08 @ 102, MBIA..... 3,526,005
1,400,000 Hawaii Department of
Transportation, Matson
Terminal, Inc. Special Facility
Revenue, 5.75%, 3/1/13,
Callable 8/20/03 @ 102.......... 1,420,062
2,795,000 Hawaii Housing Finance &
Development Corp., Single
Family Mortgage Revenue,
Series B, 5.70%, 7/1/13,
Callable 7/1/04 @ 102, FNMA..... 2,880,779
1,325,000 Hawaii Housing Finance &
Development Corp., Single
Family Mortgage Revenue,
Series B, 6.90%, 7/1/16,
Callable 1/1/04 @ 100, FNMA..... 1,338,078
5,980,000 Hawaii Housing Finance &
Development Corp., Single
Family Mortgage Revenue,
Series B, 5.85%, 7/1/17,
Callable 7/1/04 @ 102,
FNMA............................ 6,117,180
See notes to financial statements.
50
PACIFIC CAPITAL FUNDS
Tax-Free Securities Fund
Schedule of Portfolio Investments, Continued
July 31, 2003
Principal Security
Amount Description Value
- ------------ ------------------------------ -------------
Municipal Bonds, continued
Hawaii, continued
$ 3,475,000 Hawaii Housing Finance &
Development Corp., Single
Family Mortgage Revenue,
Series B, 7.00%, 7/1/31,
Callable 1/1/04 @ 100,
FNMA......................... $ 3,509,715
2,340,000 Hawaii Housing Finance &
Development Corp., University
of Hawaii Faculty Housing
Project Revenue, 5.70%,
10/1/25, Callable
10/1/05 @ 101, AMBAC......... 2,485,174
2,000,000 Hawaii State GO, Series BZ,
6.00%, 10/1/12, FGIC......... 2,300,700
1,350,000 Hawaii State GO, Series CH,
4.75%, 11/1/11, MBIA......... 1,434,024
1,335,000 Hawaii State GO, Series CH,
4.75%, 11/1/13, MBIA......... 1,401,189
3,000,000 Hawaii State GO, Series CM,
6.50%, 12/1/13, FGIC......... 3,586,830
1,500,000 Hawaii State GO, Series CN,
6.25%, 3/1/08, FGIC.......... 1,710,240
4,000,000 Hawaii State GO, Series CN,
5.25%, 3/1/13, Callable
3/1/07 @ 102, FGIC........... 4,312,120
2,000,000 Hawaii State GO, Series CN,
5.50%, 3/1/14, Callable
3/1/07 @ 102, FGIC........... 2,186,220
4,975,000 Hawaii State GO, Series CN,
5.25%, 3/1/15, Callable
3/1/07 @ 102, FGIC........... 5,349,269
5,255,000 Hawaii State GO, Series CP,
5.00%, 10/1/12, Callable
10/1/07 @ 101, FGIC.......... 5,630,048
5,300,000 Hawaii State GO, Series CP,
5.00%, 10/1/13, Callable
10/1/07 @ 101, FGIC.......... 5,652,767
4,310,000 Hawaii State GO, Series CP,
5.00%, 10/1/15, Callable
10/1/07 @ 101, FGIC.......... 4,588,254
3,000,000 Hawaii State GO, Series CP,
5.00%, 10/1/16, Callable
10/1/07 @ 101, FGIC.......... 3,171,000
2,050,000 Hawaii State GO, Series CP,
5.00%, 10/1/17, Callable
10/1/07 @ 101, FGIC.......... 2,151,475
3,150,000 Hawaii State GO, Series CR,
5.00%, 4/1/16, Callable
4/1/08 @ 101, MBIA........... 3,318,242
5,500,000 Hawaii State GO, Series CR,
5.00%, 4/1/17, Callable
4/1/08 @ 101, MBIA........... 5,738,809
1,000,000 Hawaii State GO, Series CR,
4.75%, 4/1/18, Callable
4/1/08 @ 101, MBIA........... 1,018,220
2,200,000 Hawaii State GO, Series CS,
5.00%, 4/1/08, MBIA.......... 2,394,766
Principal Security
Amount Description Value
- ------------ ------------------------------ -------------
Municipal Bonds, continued
Hawaii, continued
$ 2,000,000 Hawaii State GO, Series CT,
5.88%, 9/1/16, Prerefunded
9/1/09 @ 101, FSA............ $ 2,320,380
2,000,000 Hawaii State GO, Series CT,
5.88%, 9/1/17, Prerefunded
9/1/09 @ 101, FSA............ 2,320,380
1,000,000 Hawaii State GO, Series CU,
5.50%, 10/1/17, MBIA......... 1,125,580
4,000,000 Hawaii State GO, Series CV,
5.00%, 8/1/20, Callable
8/1/11 @ 100, FGIC........... 4,047,240
3,000,000 Hawaii State GO, Series CV,
5.25%, 8/1/21, Callable
8/1/11 @ 100, FGIC........... 3,070,710
1,000,000 Hawaii State Highway Revenue,
5.25%, 7/1/14, Callable
7/1/08 @ 101, FGIC........... 1,066,600
2,000,000 Hawaii State Highway Revenue,
5.38%, 7/1/14, Callable
7/1/11 @ 100, FSA............ 2,158,020
2,325,000 Hawaii State Highway Revenue,
5.38%, 7/1/15, Callable
7/1/11 @ 100, FSA............ 2,500,584
1,250,000 Hawaii State Highway Revenue,
5.25%, 7/1/16, Callable
7/1/06 @ 102, MBIA........... 1,335,375
1,350,000 Hawaii State Highway Revenue,
5.38%, 7/1/17, Callable
7/1/10 @ 100, FSA............ 1,428,422
2,530,000 Hawaii State Highway Revenue,
5.38%, 7/1/18, Callable
7/1/10 @ 100, FSA............ 2,641,725
875,000 Honolulu City & County GO,
Series A, 6.00%, 1/1/11, FGIC 994,578
2,125,000 Honolulu City & County GO,
Series A, 6.00%, 1/1/11,
Escrowed to Maturity, FGIC... 2,430,108
4,820,000 Honolulu City & County GO,
Series A, 5.75%, 4/1/11,
Escrowed to Maturity, FGIC... 5,452,673
465,000 Honolulu City & County GO,
Series A, 5.75%, 4/1/12,
Escrowed to Maturity, FGIC... 526,924
1,865,000 Honolulu City & County GO,
Series A, 5.75%, 4/1/12, FGIC 2,098,778
1,010,000 Honolulu City & County GO,
Series A, 5.00%, 11/1/12,
Callable 11/1/05 @ 101,
MBIA......................... 1,074,842
850,000 Honolulu City & County GO,
Series A, 5.75%, 4/1/13,
Escrowed to Maturity, FGIC... 964,478
3,345,000 Honolulu City & County GO,
Series A, 5.75%, 4/1/13, FGIC 3,767,005
5,000 Honolulu City & County GO,
Series A, 5.63%, 9/1/13,
Callable 9/1/06 @ 102, FGIC.. 5,486
See notes to financial statements.
51
PACIFIC CAPITAL FUNDS
Tax-Free Securities Fund
Schedule of Portfolio Investments, Continued
July 31, 2003
Principal Security
Amount Description Value
- ------------ -------------------------------- -------------
Municipal Bonds, continued
Hawaii, continued
$ 1,670,000 Honolulu City & County GO,
Series A, 5.63%, 9/1/13,
Prerefunded 9/1/08 @ 100,
FGIC........................... $ 1,895,817
3,500,000 Honolulu City & County GO,
Series A, 5.38%, 9/1/18,
Callable 9/1/11 @ 100, FSA..... 3,676,225
1,000,000 Honolulu City & County GO,
Series B, 5.13%, 7/1/10,
Callable 7/1/09 @ 101, FGIC.... 1,086,880
295,000 Honolulu City & County GO,
Series B, 5.25%, 10/1/12,
Escrowed to Maturity, FGIC..... 324,922
640,000 Honolulu City & County GO,
Series B, 5.25%, 10/1/12,
FGIC........................... 699,763
2,595,000 Honolulu City & County GO,
Series B, 5.13%, 7/1/18,
Callable 7/1/09 @ 101, FGIC.... 2,672,201
2,500,000 Honolulu City & County GO,
Series C, 5.13%, 7/1/16,
Callable 7/1/09 @ 101, FGIC.... 2,631,250
2,000,000 Honolulu City & County Waste
Water System Revenue, Junior
Series, 5.00%, 7/1/23, Callable
7/1/09 @ 101, FGIC............. 1,982,480
2,320,000 Honolulu City & County Water
GO, 6.00%, 12/1/11,
Escrowed to Maturity, FGIC..... 2,688,277
935,000 Honolulu City & County Water
GO, 6.00%, 12/1/14,
Escrowed to Maturity, FGIC..... 1,089,023
1,340,000 Kauai County GO, Series C,
5.90%, 8/1/09, AMBAC........... 1,533,402
935,000 Maui County GO, 5.25%, 9/1/06,
Callable 9/1/03 @ 101, FGIC.... 947,305
1,000,000 Maui County GO, 6.00%,
12/15/08, FGIC................. 1,158,230
1,180,000 Maui County GO, 5.13%,
12/15/10, Prerefunded
12/15/03 @ 101, FGIC........... 1,209,901
1,005,000 Maui County GO, Series A,
5.10%, 9/1/11, Callable
9/1/07 @ 101, FGIC............. 1,079,782
1,020,000 Maui County GO, Series A,
5.90%, 6/1/14, Prerefunded
6/1/06 @ 101, MBIA............. 1,140,340
1,160,000 Maui County GO, Series A,
5.13%, 3/1/15, Callable
3/1/08 @ 101, FGIC............. 1,235,702
2,040,000 Maui County GO, Series A,
5.38%, 3/1/17, Callable
3/1/08 @ 101, FGIC............. 2,187,247
1,125,000 Maui County GO, Series C,
5.25%, 3/1/18, FGIC............ 1,169,809
Principal Security
Amount Description Value
- ------------ --------------------------------- -------------
Municipal Bonds, continued
Hawaii, continued
$ 1,000,000 University of Hawaii System
Revenue, Series A,
5.50%, 7/15/16, FGIC............ $ 1,089,070
1,205,000 University of Hawaii System
Revenue, Series A, 5.50%,
7/15/22, Callable 7/15/12 @
100, FGIC....................... 1,259,478
1,000,000 University of Hawaii System
Revenue, Series A, 5.50%,
7/15/29, Callable 7/15/12 @
100, FGIC....................... 1,027,690
-------------
184,636,686
-------------
Illinois (0.8%)
3,230,000 Chicago GO, Series A, 5.38%,
1/1/14, Callable 7/1/12 @ 100,
AMBAC........................... 3,496,960
-------------
Kansas (1.5%)
3,725,000 Burlington Pollution Control
Revenue, Kansas Gas &
Electric Co. Project, 7.00%,
6/1/31, Callable 9/15/03 @ 101,
MBIA............................ 3,924,362
2,195,000 Kansas City Utilities System
Revenue, 6.38%, 9/1/23,
Callable 9/1/04 @ 102, FGIC..... 2,365,156
-------------
6,289,518
-------------
Kentucky (0.3%)
1,250,000 Kentucky State Property &
Buildings Commission
Revenue, 2nd Series,
5.50%, 11/1/16, FSA............. 1,359,313
-------------
Massachusetts (1.6%)
1,000,000 Massachusetts State GO, Series C,
5.75%, 10/1/20, Prerefunded
10/1/10 @ 100................... 1,141,280
5,000,000 Massachusetts State GO, Series D,
5.25%, 11/1/17, MBIA............ 5,523,350
80,000 Massachusetts State Water
Pollution Abatement Revenue,
Series 2, 5.70%, 2/1/13,
Callable 2/1/05 @ 102........... 85,788
-------------
6,750,418
-------------
Michigan (4.1%)
3,000,000 Caledonia Community Schools
GO, 5.50%, 5/1/23, Callable
5/1/10 @ 100, FGIC.............. 3,102,000
3,000,000 Michigan Municipal Building
Authority Revenue, Clean
Water Revolving Fund, 5.50%,
10/1/21, Callable 10/1/10
@ 101........................... 3,400,140
1,500,000 Michigan State Building Authority
Revenue, Series II,
5.00%, 10/15/12, Callable
10/15/07 @ 101.................. 1,665,720
See notes to financial statements.
52
PACIFIC CAPITAL FUNDS
Tax-Free Securities Fund
Schedule of Portfolio Investments, Continued
July 31, 2003
Principal Security
Amount Description Value
- ------------ ------------------------------- -------------
Municipal Bonds, continued
Michigan, continued
$ 3,000,000 Michigan State GO,
5.50%, 12/1/13................ $ 3,361,140
2,245,000 Michigan State Strategic Fund
Ltd. Obligation Revenue,
6.95%, 5/1/11, FGIC........... 2,696,784
2,250,000 Saline Area Schools GO,
5.50%, 5/1/15, Callable
5/1/05 @ 101, FGIC............ 2,402,775
-------------
16,628,559
-------------
Minnesota (0.3%)
1,000,000 St. Paul Special Assessment GO,
Series B, 5.00%, 3/1/13....... 1,053,560
-------------
Missouri (0.5%)
2,000,000 University of Missouri Revenue,
Series B, 5.38%, 11/1/16...... 2,137,680
-------------
New Mexico (0.4%)
1,625,000 Sante Fe Gross Receipts Tax
Revenue, Series B, 5.63%,
6/1/16, Callable 6/1/06 @ 102,
AMBAC......................... 1,773,590
-------------
New York (2.1%)
5,000,000 New York State Thruway
Authority General Revenue,
Series D, 5.50%, 1/1/16,
Callable 1/1/07 @ 102......... 5,430,700
2,000,000 New York State Thruway
Authority Revenue, Highway &
Bridge Trust Fund, Series A,
5.80%, 4/1/18, Callable
4/1/10 @ 101, FSA............. 2,183,340
1,000,000 New York State Thruway
Authority Revenue, Highway &
Bridge Trust Fund, Series B,
5.25%, 4/1/12, AMBAC.......... 1,087,590
-------------
8,701,630
-------------
Ohio (2.8%)
2,320,000 Cleveland Package Facilities
Revenue, 5.50%, 9/15/16,
Callable 9/15/06 @ 102,
MBIA.......................... 2,502,932
3,165,000 Columbus Municipal Airport
Authority Revenue, Port
Columbus Improvement, Series
B, 5.00%, 1/1/16, Callable
1/1/08 @ 101, AMBAC........... 3,245,011
1,000,000 Hamilton County Sales Tax
Revenue, Series B,
5.25%, 12/1/18, AMBAC......... 1,046,280
1,000,000 Ohio State Building Authority,
Adult Correction Facility
Revenue, Series A,
5.50%, 10/1/14, FSA........... 1,087,490
Principal Security
Amount Description Value
- ------------ ------------------------------ -------------
Municipal Bonds, continued
Ohio, continued
$ 2,250,000 Ohio State Community Turnpike
Revenue, Series B,
5.50%, 2/15/12, FSA.......... $ 2,490,098
1,000,000 Ohio State Water Development
Authority Pollution Control
Facilities Revenue,
5.50%, 12/1/15, Callable
6/1/05 @ 101, MBIA........... 1,085,520
-------------
11,457,331
-------------
Oregon (2.1%)
3,100,000 Clackamas Community College
District GO, 5.25%, 6/15/16,
Callable 6/15/11 @ 100,
FGIC......................... 3,286,031
5,000,000 Portland Sewer System Revenue,
Series A, 5.75%, 8/1/18,
Callable 8/1/10 @ 100, FGIC.. 5,455,700
-------------
8,741,731
-------------
Puerto Rico (0.4%)
1,500,000 Puerto Rico Commonwealth
Public Improvement GO,
Series A, 5.50%, 7/1/13,
FGIC......................... 1,681,170
-------------
Tennessee (1.6%)
4,730,000 Shelby County GO, Series A,
5.63%, 4/1/15, Callable
4/1/05 @ 101................. 5,032,625
1,600,000 Shelby County GO, Series B,
5.25%, 8/1/17, Callable
8/1/07 @ 101................. 1,701,936
-------------
6,734,561
-------------
Virginia (2.8%)
3,650,000 Norfolk Water Revenue, 5.75%,
11/1/13, Callable
11/1/05 @ 102, MBIA.......... 4,011,971
1,750,000 Richmond GO, Series B, 5.20%,
1/15/14, Callable
1/15/06 @ 102, FGIC.......... 1,891,225
5,000,000 Virginia State Public School
Authority Special Obligation
Chesapeake School Financing
Revenue, 5.63%, 6/1/15,
Callable 6/1/05 @ 102........ 5,487,650
-------------
11,390,846
-------------
Washington (3.7%)
3,475,000 Douglas County School District
No. 206 Eastmont GO,
5.00%, 12/1/17, FGIC......... 3,567,539
3,000,000 King County Sewer Revenue,
Second Series, 6.25%, 1/1/14,
Callable 1/1/09 @ 101, FGIC.. 3,408,810
See notes to financial statements.
53
PACIFIC CAPITAL FUNDS
Tax-Free Securities Fund
Schedule of Portfolio Investments, Continued
July 31, 2003
Principal Security
Amount Description Value
- ------------ ------------------------------ -------------
Municipal Bonds, continued
Washington, continued
$ 1,000,000 Snohomish County GO, 5.70%,
12/1/14, Callable
12/1/09 @ 100, MBIA.......... $ 1,098,170
2,880,000 Snohomish County Limited Tax
GO, 5.25%, 12/1/12, Callable
12/1/11 @ 100, MBIA.......... 3,113,482
4,000,000 Washington State GO, Series A,
5.63%, 7/1/19, Callable
7/1/10 @ 100................. 4,288,920
-------------
15,476,921
-------------
Total Municipal Bonds (Cost $317,184,505) 342,531,567
-------------
Security
Shares Description Value
------- ------------------------------- ------------
Investment Company (0.2%)
850,822 Dreyfus Tax Exempt Cash
Management Fund, Institutional
Shares.......................... $ 850,822
------------
Total Investment Company (Cost $850,822) 850,822
------------
Total Investments (Cost $374,948,993)
(a)--98.1% 405,890,582
Other assets in excess of liabilities--1.9% 7,738,571
------------
Net Assets--100.0% $413,629,153
============
- --------
* Variable rate security. Rate represents rate in effect on July 31, 2003.
Maturity reflects final maturity date.
(a) Represents cost for financial reporting purposes and differs from value by
unrealized appreciation (depreciation) of securities as follows:
Unrealized appreciation.... $30,970,553
Unrealized depreciation.... (28,964)
-----------
Net unrealized appreciation $30,941,589
===========
Aggregate cost for federal income tax purposes is substantially the same.
AMBAC--Insured by AMBAC Indemnity Corporation
FGIC--Insured by the Financial Guaranty Insurance Company
FHLB--Insured by Federal Home Loan Bank collateral
FNMA--Insured by Federal National Mortgage Association collateral
FSA--Insured by Financial Security Assurance
GO--General Obligation
MBIA--Insured by MBIA, Inc.
See notes to financial statements.
54
PACIFIC CAPITAL FUNDS
Tax-Free Short Intermediate Securities Fund
Schedule of Portfolio Investments
July 31, 2003
Principal Security
Amount Description Value
- ----------- ----------------------------------- ------------
Alternative Minimum Tax Paper (9.1%)
Hawaii (6.7%)
$ 610,000 Hawaii Airport System Revenue,
Second Series, 6.90%, 7/1/12,
Escrowed to Maturity, MBIA........ $ 723,747
1,000,000 Hawaii State Airport System
Revenue, 4.75%, 7/1/06, FGIC...... 1,058,330
585,000 Hawaii State Harbor Capital
Improvements Revenue,
5.80%, 7/1/04, FGIC............... 609,915
1,885,000 Hawaii State Housing Finance &
Development Corp., Single
Family Mortgage Revenue,
Series A, 4.75%, 7/1/06, FNMA..... 1,994,952
------------
4,386,944
------------
Tennessee (0.8%)
500,000 Memphis-Shelby County Airport
Authority Revenue,
4.00%, 11/15/03, MBIA............. 503,775
------------
Utah (1.6%)
1,000,000 Utah State Board of Regents Student
Loan Revenue, Series N, 5.90%,
11/1/07, Callable 11/1/05 @ 102,
AMBAC............................. 1,084,880
------------
Total Alternative Minimum Tax Paper
(Cost $5,719,538) 5,975,599
------------
Commercial Paper (3.0%)
Hawaii (3.0%)
2,000,000 Honolulu City & County GO,
1.05%, 8/7/03..................... 2,000,000
------------
Total Commercial Paper (Cost $2,000,000) 2,000,000
------------
Municipal Bonds (85.7%)
Connecticut (0.0%)
25,000 Connecticut State GO, Series E,
4.75%, 3/15/08, Prerefunded
3/15/04 @ 101.50.................. 25,950
------------
Hawaii (44.0%)
775,000 Hawaii County GO, Series A,
5.20%, 5/1/04, FGIC............... 799,010
1,065,000 Hawaii County GO, Series A,
5.25%, 5/15/12, Callable
5/15/09 @ 101..................... 1,140,338
2,275,000 Hawaii Department of Budget &
Finance, Special Purpose
Revenue, Queens Health System,
Series A, 0.85%*, 7/1/26.......... 2,275,000
2,000,000 Hawaii State Airport System
Revenue, First Series,
5.60%, 7/1/04, MBIA............... 2,079,920
1,000,000 Hawaii State GO, Series CN,
6.25%, 3/1/08, FGIC............... 1,140,160
800,000 Hawaii State GO, Series CO,
6.00%, 9/1/05, FGIC............... 871,112
1,000,000 Hawaii State GO, Series CO,
6.00%, 9/1/06, FGIC............... 1,110,070
1,150,000 Hawaii State GO, Series CP,
5.50%, 10/1/07, FGIC.............. 1,277,167
Principal Security
Amount Description Value
- ----------- ---------------------------------- ------------
Municipal Bonds, continued
Hawaii, continued
$ 1,000,000 Hawaii State GO, Series CR,
5.25%, 4/1/13, Callable
4/1/08 @ 101, MBIA.......................... $ 1,072,780
1,000,000 Hawaii State GO, Series CS,
5.00%, 4/1/07, MBIA......................... 1,082,420
1,000,000 Hawaii State GO, Series CT,
5.25%, 9/1/07, FSA.......................... 1,098,910
1,000,000 Hawaii State GO, Series CU,
5.75%, 10/1/10, MBIA........................ 1,132,490
1,250,000 Hawaii State GO, Series CV,
5.50%, 8/1/08, FGIC......................... 1,393,800
1,000,000 Hawaii State GO, Series CZ,
5.25%, 7/1/12, FSA.......................... 1,091,270
1,000,000 Hawaii State Harbor System
Revenue, Series A, 4.50%, 7/1/08,
AMBAC....................................... 1,067,930
750,000 Hawaii State Highway Revenue,
4.85%, 7/1/09, FSA.......................... 814,830
1,200,000 Hawaii State Housing Finance &
Development Corp., Single
Family Mortgage Revenue,
Series B, 4.80%, 7/1/07, FNMA............... 1,270,836
3,600,000 Honolulu City & County GO,
Series A, 0.80%*, 1/1/10.................... 3,599,999
1,000,000 Honolulu City & County GO,
Series B, 0.80%*, 1/1/05.................... 1,000,000
1,150,000 Honolulu City & County Waste
Water System Revenue,
5.00%, 7/1/09, FGIC......................... 1,258,606
1,000,000 Honolulu City & County Waste
Water System Revenue,
Series SR, 5.00%, 7/1/07,
AMBAC....................................... 1,085,850
1,125,000 Maui County GO, Series B,
5.375%, 9/1/13, Callable
9/1/12 @ 100, MBIA.......................... 1,231,830
------------
28,894,328
------------
Idaho (1.5%)
1,000,000 Idaho Health Facilities Authority
Revenue, St. Lukes Regional
Medical Center Project,
0.90%*, 5/1/22.............................. 1,000,000
------------
Kansas (3.3%)
1,075,000 Johnson County, Unified School
District #233 GO, Series C,
5.00%, 9/1/05, FGIC......................... 1,148,509
1,000,000 Wyandotte County & Kansas City
Unified Government Utility
System Revenue, 4.50%, 9/1/03,
MBIA........................................ 1,002,812
------------
2,151,321
------------
Michigan (8.7%)
3,000,000 Eastern Michigan University
Revenue, 0.90%*, 6/1/27, FGIC............... 2,999,999
1,000,000 Huron Valley School District GO,
3.00%, 5/1/05............................... 1,027,380
See notes to financial statements.
55
PACIFIC CAPITAL FUNDS
Tax-Free Short Intermediate Securities Fund
Schedule of Portfolio Investments, Continued
July 31, 2003
Principal Security
Amount Description Value
- ----------- ------------------------------------- ------------
Municipal Bonds, continued
Michigan, continued
$ 1,500,000 Michigan State Building Authority
Revenue, Series II, 5.00%,
10/15/12, Callable
10/15/07 @ 101...................... $ 1,665,720
------------
5,693,099
------------
Minnesota (1.5%)
1,000,000 Cohasset Minnesota Power & Light
Co. Project Revenue, Series A,
0.90%*, 6/1/20...................... 1,000,000
------------
Mississippi (2.0%)
1,200,000 Mississippi State GO, 5.50%, 9/1/09.. 1,347,672
------------
Missouri (6.1%)
2,000,000 Kansas City Industrial Development
Authority Revenue, Ewing Marion
Kaufman Foundation,
0.90%*, 4/1/27...................... 2,000,000
1,000,000 Missouri State Health & Educational
Facilities Authority Revenue,
Saint Louis University, Series A,
0.95%*, 10/1/09..................... 1,000,000
1,000,000 Missouri State Health & Educational
Facilities Authority Revenue,
Washington University, Series D,
0.90%*, 9/1/30...................... 1,000,000
------------
4,000,000
------------
New Jersey (2.7%)
1,750,000 New Jersey State Transportation
Corp., Capital Grant Revenue
Anticipation Notes, Series B,
5.50%, 2/1/11, Continuously
Callable @ 100, AMBAC............... 1,752,223
------------
New York (4.8%)
1,000,000 Metropolitan Transportation Authority
Revenue, Dedicated Tax Fund,
Series A, 5.25%, 11/15/12, FSA...... 1,092,790
1,000,000 New York GO, Series F, 4.00%, 8/1/03 1,000,073
Shares or
Principal Security
Amount Description Value
---------- -------------------------------- ------------
Municipal Bonds, continued
New York, continued
$1,000,000 New York State Thruway Authority
Revenue, Highway & Bridge
Trust Fund, Series B,
5.25%, 4/1/12, AMBAC............ $ 1,087,590
------------
3,180,453
------------
North Carolina (4.5%)
2,975,000 Durham GO, 0.90%*, 2/1/11........ 2,975,000
------------
Pennsylvania (1.7%)
1,030,000 Philadelphia Water & Wastewater
Revenue, Series B, 5.50%,
11/1/11, FGIC................... 1,147,410
------------
Texas (1.6%)
1,000,000 Texas Municipal Power Agency
Revenue, 3.75%, 9/1/05,
Continuously Callable @ 100,
AMBAC........................... 1,022,110
------------
Utah (1.7%)
1,000,000 Utah State GO, Series F,
5.00%, 7/1/12, Prerefunded
7/1/07 @ 100.................... 1,096,360
------------
Washington (1.6%)
1,000,000 Washington State GO, Series A,
5.80%, 9/1/08, Prerefunded
9/1/04 @ 100.................... 1,051,610
------------
Total Municipal Bonds (Cost $55,025,513) 56,337,536
------------
Investment Company (1.4%)
904,967 Dreyfus Tax Exempt Cash
Management Fund, Institutional
Shares.......................... 904,967
------------
Total Investment Company (Cost $904,967) 904,967
------------
Total Investments (Cost $63,650,018)
(a)--99.2% 65,218,102
Other assets in excess of liabilities--0.8% 552,483
------------
Net Assets--100.0% $ 65,770,585
============
- --------
* Variable rate security. Rate represents rate in effect on July 31, 2003.
Maturity reflects final maturity date.
(a) Represents cost for financial reporting purposes and differs from value by
unrealized appreciation (depreciation) of securities as follows:
Unrealized appreciation.... $1,627,313
Unrealized depreciation.... (59,229)
----------
Net unrealized appreciation $1,568,084
==========
Aggregate cost for federal income tax purposes is substantially the same.
AMBAC--Insured by AMBAC Indemnity Corporation
FGIC--Insured by the Financial Guaranty Insurance Company
FNMA--Insured by Federal National Mortgage Association collateral
FSA--Insured by Financial Security Assurance
GO--General Obligation
MBIA--Insured by MBIA, Inc.
See notes to financial statements.
56
PACIFIC CAPITAL FUNDS
International Stock Fund
Schedule of Portfolio Investments
July 31, 2003
Security
Shares Description Value
- ------- ---------------------------------- ------------
Common Stocks (94.2%)
Australia (2.2%)
Airlines (0.5%)
142,374 Qantas Airways Ltd................ $ 294,350
------------
Multimedia (1.3%)
66,000 News Corp., Ltd. (The)............ 494,902
46,000 Publishing & Broadcasting Ltd..... 306,175
------------
801,077
------------
Telecommunications (0.4%)
86,000 Telstra Corp., Ltd................ 260,847
------------
1,356,274
------------
Belgium (0.5%)
Beverages (0.5%)
12,800 Interbrew......................... 285,548
------------
Bermuda (0.7%)
Oil & Gas--Exploration & Production Services (0.7%)
4,700 Nabors Industries Ltd. (b)........ 168,260
7,300 Weatherford International Ltd. (b) 264,771
------------
433,031
------------
Brazil (2.8%)
Beverages (0.6%)
19,300 Companhia de Bebidas das Americas,
ADR.............................. 383,105
------------
Oil & Gas--Exploration & Production Services (0.6%)
19,400 Petroleo Brasileiro SA, ADR....... 393,626
------------
Paper Products (0.3%)
7,500 Aracruz Celulose SA, ADR.......... 187,800
------------
Telecommunications (1.3%)
31,500 Tele Norte Leste Participacoes SA,
ADR.............................. 347,130
16,200 Telecomunicacoes Brasileiras SA,
ADR.............................. 416,016
------------
763,146
------------
1,727,677
------------
Canada (6.4%)
Automotive Parts (0.6%)
4,700 Magna International, Inc., Class A 357,444
------------
Banks (0.8%)
11,400 Bank of Nova Scotia............... 490,323
------------
Food Distributors (0.6%)
8,000 Loblaw Cos., Ltd.................. 359,311
------------
Metals (0.5%)
9,400 Alcan, Inc........................ 327,214
------------
Oil & Gas--Exploration & Production Services (2.6%)
13,400 EnCana Corp....................... 462,541
6,000 Petro-Canada...................... 229,988
17,000 Precision Drilling Corp. (b)...... 617,101
7,100 Talisman Energy, Inc.............. 304,519
------------
1,614,149
------------
Security
Shares Description Value
- --------- ---------------------------------- ------------
Common Stocks, continued
Canada, continued
Telecommunications (0.7%)
24,530 Telus Corp........................ $ 426,198
------------
Transportation (0.6%)
7,300 Canadian National Railway Co...... 379,965
------------
3,954,604
------------
China (1.9%)
Oil & Gas--Exploration & Production Services (0.7%)
239,000 CNOOC Ltd......................... 412,161
------------
Telecommunications (0.9%)
2,322,000 China Telecom Corp., Ltd., Class H 625,215
------------
Transportation (0.3%)
390,000 Jiangsu Expressway Co., Ltd.,
Class H.......................... 160,015
------------
1,197,391
------------
Denmark (0.5%)
Telecommunications (0.5%)
11,200 TDC A/S........................... 321,500
------------
Finland (1.6%)
Paper Products (0.8%)
28,500 UPM-Kymmene Oyj................... 465,775
------------
Telecommunications--Services & Equipment (0.8%)
17,500 Nokia Corp., Class A, ADR......... 267,750
16,300 Nokia Oyj......................... 249,879
------------
517,629
------------
983,404
------------
France (5.0%)
Automotive Parts (0.2%)
3,900 Compagnie Generale des
Etablissements Michelin, Class B. 141,434
------------
Banks (1.1%)
12,900 BNP Paribas SA.................... 701,587
------------
Insurance (0.8%)
27,100 Axa............................... 466,687
------------
Leisure (0.5%)
8,000 Accor SA.......................... 301,017
------------
Oil & Gas--Exploration & Production Services (1.3%)
5,100 Total Fina SA, Class B............ 756,572
------------
Telecommunication Equipment (0.8%)
49,200 Alcatel (b)....................... 493,963
------------
Telecommunications (0.3%)
7,800 France Telecom SA (b)............. 206,226
------------
3,067,486
------------
Germany (4.6%)
Automotive (0.7%)
7,400 Bayerische Motoren Werke AG....... 287,353
392 Porsche AG........................ 160,161
------------
447,514
------------
See notes to financial statements.
57
PACIFIC CAPITAL FUNDS
International Stock Fund
Schedule of Portfolio Investments, Continued
July 31, 2003
Security
Shares Description Value
- ------- ------------------------------ ------------
Common Stocks, continued
Germany, continued
Chemicals (0.9%)
11,600 BASF AG....................... $ 551,632
------------
Financial Services (0.5%)
2,700 Muenchener Rueckversicherungs-
Gesellschaft AG.............. 305,418
------------
Pharmaceuticals (0.6%)
6,000 Altana AG..................... 370,756
------------
Retail (0.1%)
1,500 Metro AG...................... 55,377
------------
Software & Computer Services (1.3%)
4,300 SAP AG........................ 504,314
27,000 T-Online International AG (b). 281,106
------------
785,420
------------
Transportation (0.5%)
20,800 Deutsche Post AG.............. 310,202
------------
2,826,319
------------
Hong Kong (1.3%)
Real Estate (0.6%)
52,000 Cheung Kong Holdings Ltd...... 341,700
------------
Utilities--Electric (0.7%)
102,000 CLP Holdings Ltd.............. 448,581
------------
790,281
------------
Hungary (0.4%)
Banks (0.4%)
28,900 OTP Bank Rt. (b).............. 270,376
------------
Ireland (1.0%)
Banks (1.0%)
53,300 Bank of Ireland............... 620,915
------------
Israel (2.7%)
Pharmaceuticals (2.7%)
10,000 Taro Pharmaceutical Industries
Ltd. (b)..................... 545,700
19,200 Teva Pharmaceutical Industries
Ltd., ADR.................... 1,100,928
------------
1,646,628
------------
Italy (2.9%)
Aerospace/Defense (0.4%)
396,600 Finmeccanica SpA.............. 271,407
------------
Banks (0.6%)
81,700 UniCredito Italiano SpA....... 383,463
------------
Oil & Gas--Exploration & Production Services (1.4%)
19,600 ENI SpA....................... 289,217
145,700 Snam Rete Gas SpA............. 560,854
------------
850,071
------------
Television (0.5%)
32,000 Mediaset SpA.................. 287,060
------------
1,792,001
------------
Security
Shares Description Value
- ------- ----------------------------------------- ------------
Common Stocks, continued
Japan (18.3%)
Advertising (0.4%)
87 Dentsu, Inc.............................. $ 276,420
------------
Automotive (1.6%)
10,500 Honda Motor Co., Ltd..................... 405,035
22,300 Toyota Motor Corp........................ 564,230
------------
969,265
------------
Banks (0.7%)
94 Mitsubishi Tokyo Financial Group, Inc. 417,968
------------
Building Materials (0.8%)
74,000 Asahi Glass Co., Ltd..................... 503,380
------------
Business Equipment & Services (1.0%)
13,000 Canon, Inc............................... 625,493
------------
Chemicals (1.6%)
125,000 Asahi Kasei Corp......................... 379,526
17,400 Shin-Etsu Chemical Co., Ltd.............. 606,247
------------
985,773
------------
Electrical & Electronic (3.8%)
9,700 Fanuc Ltd................................ 539,135
2,500 Keyence Corp............................. 465,386
56,000 Matsushita Electricl Industrial Co., Ltd. 661,994
9,000 Murata Manufacturing Co., Ltd............ 414,368
3,000 SMC Corp................................. 281,223
------------
2,362,106
------------
Financial Services (1.3%)
49,000 Daiwa Securities Group, Inc.............. 283,728
41,000 Nomura Holdings, Inc..................... 544,195
------------
827,923
------------
Insurance (1.1%)
74 Millea Holdings, Inc..................... 687,544
------------
Manufacturing--Consumer Goods (0.7%)
22,000 Kao Corp................................. 412,460
------------
Medical Equipment & Supplies (1.0%)
9,000 Hoya Corp................................ 645,817
------------
Printing & Publishing (1.1%)
56,000 Dai Nippon Printing Co., Ltd............. 657,812
------------
Real Estate (1.0%)
87,000 Mitsubishi Estate Co., Ltd............... 635,116
------------
Telecommunications (1.6%)
140 Japan Telecom Holdings Co., Ltd.......... 429,715
130 KDDI Corp................................ 586,669
------------
1,016,384
------------
Transportation (0.6%)
80 East Japan Railway Co.................... 351,072
------------
11,374,533
------------
Netherlands (4.3%)
Electronics--Semiconductors (0.7%)
33,500 ASML Holding NV (b)...................... 433,490
------------
Insurance (1.3%)
42,600 ING Groep NV............................. 862,592
------------
See notes to financial statements.
58
PACIFIC CAPITAL FUNDS
International Stock Fund
Schedule of Portfolio Investments, Continued
July 31, 2003
Security
Shares Description Value
- ------ ------------------------------ ------------
Common Stocks, continued
Netherlands, continued
Oil & Gas--Exploration & Production Services (1.4%)
13,300 Royal Dutch Petroleum Co...... $ 579,614
6,100 Schlumberger Ltd.............. 274,927
------------
854,541
------------
Transportation (0.9%)
28,800 TPG NV........................ 537,455
------------
2,688,078
------------
Norway (1.1%)
Oil & Gas--Exploration & Production Services (0.5%)
35,700 Statoil ASA................... 321,564
------------
Telecommunications (0.6%)
78,750 Telenor ASA................... 345,697
------------
667,261
------------
Russia (0.7%)
Oil & Gas--Exploration & Production Services (0.7%)
6,000 OAO LUKOIL, ADR............... 428,400
------------
Singapore (1.4%)
Airlines (0.3%)
32,000 Singapore Airlines Ltd........ 196,576
------------
Banks (0.6%)
53,000 DBS Group Holdings Ltd........ 343,666
------------
Publishing (0.5%)
32,000 Singapore Press Holdings Ltd.. 344,008
------------
884,250
------------
South Korea (5.2%)
Banks (0.6%)
11,900 Kookmin Bank.................. 390,618
------------
Chemicals (0.7%)
11,100 KG Chem Ltd................... 437,230
------------
Electronic Components/Instruments (2.1%)
15,760 LG Electronics, Inc........... 676,859
3,400 Samsung Electronics Co., Ltd.,
GDR (c)...................... 599,250
------------
1,276,109
------------
Steel (0.5%)
2,700 POSCO......................... 324,778
------------
Telecommunications (1.3%)
3,200 SK Telecom Co., Ltd........... 555,697
13,600 SK Telecom Co., Ltd., ADR..... 263,976
------------
819,673
------------
3,248,408
------------
Spain (2.1%)
Electric Services (0.6%)
22,000 Endesa SA..................... 349,146
------------
Oil & Gas--Exploration & Production Services (0.5%)
20,000 Repsol YPF SA................. 320,782
200 Repsol YPF SA, ADR............ 3,172
------------
323,954
------------
Security
Shares Description Value
- ------ ---------------------------------- ------------
Common Stocks, continued
Spain, continued
Utilities--Telecommunications (1.0%)
51,408 Telefonica SA (b)................. $ 601,188
------------
1,274,288
------------
Sweden (1.6%)
Banks (0.9%)
52,000 Skandinaviska Enskilda Banken AB,
Class A.......................... 563,521
------------
Retail (0.7%)
19,600 Hennes & Mauritz AB, Class B...... 417,648
------------
981,169
------------
Switzerland (6.2%)
Banks (3.1%)
34,500 Credit Suisse Group............... 1,084,250
13,800 UBS AG............................ 808,099
------------
1,892,349
------------
Building Materials (0.7%)
11,000 Holcim Ltd........................ 456,664
------------
Insurance (0.3%)
4,400 Converium Holding AG.............. 209,104
------------
Pharmaceuticals (2.1%)
16,858 Novartis AG....................... 650,132
7,600 Roche Holding AG.................. 633,795
------------
1,283,927
------------
3,842,044
------------
Taiwan (0.6%)
Electronics (0.1%)
3,592 Taiwan Semiconductor Manufacturing
Co., Ltd., ADR (b)............... 35,920
------------
Telecommunications (0.5%)
26,300 Chunghwa Telecom Co., Ltd., ADR... 362,677
------------
398,597
------------
United Kingdom (17.8%)
Airlines (0.3%)
70,700 British Airways PLC (b)........... 196,325
------------
Airport Development (0.5%)
38,000 BAA PLC........................... 286,480
------------
Banks (4.4%)
69,052 Barclays PLC...................... 519,746
65,700 HBOS PLC.......................... 818,474
46,428 Royal Bank of Scotland Group PLC.. 1,311,262
------------
2,649,482
------------
Financial Services (1.1%)
35,400 Man Group PLC..................... 704,468
------------
Food Products (0.4%)
44,410 Cadbury Schweppes PLC............. 269,128
------------
Leisure (0.5%)
10,300 Carnival PLC...................... 327,161
------------
See notes to financial statements.
59
PACIFIC CAPITAL FUNDS
International Stock Fund
Schedule of Portfolio Investments, Continued
July 31, 2003
Security
Shares Description Value
- ------- ------------------------------------- ------------
Common Stocks, continued
United Kingdom, continued
Lodging (0.4%)
35,254 InterContinental Hotels Group PLC (b) $ 264,078
------------
Manufacturing--Consumer Goods (0.7%)
25,200 Reckitt Benckiser PLC................ 463,409
Metals (1.4%)
148,372 BHP Billiton PLC..................... 885,433
------------
Pharmaceuticals (1.3%)
42,700 GlaxoSmithKline PLC.................. 818,166
------------
Real Estate (1.1%)
18,000 Berkeley Group PLC (The)............. 246,127
39,000 George Wimpey PLC.................... 221,925
24,500 Persimmon PLC........................ 205,971
------------
674,023
------------
Retail (1.6%)
21,000 Kesa Electricals PLC (b)............. 69,201
91,875 Kingfisher PLC....................... 414,255
122,900 Tesco PLC............................ 425,238
------------
908,694
------------
Telecommunications (2.4%)
632,000 mmO2 PLC (b)......................... 546,051
478,300 Vodafone Group PLC................... 907,235
------------
1,453,286
------------
Television (0.9%)
49,700 British Sky Broadcasting Group
PLC (b)............................. 562,827
------------
Tobacco (0.4%)
17,500 Imperial Tobacco Group PLC........... 275,115
------------
Utilities--Gas (0.4%)
61,600 BG Group PLC......................... 268,341
------------
11,006,416
------------
Security
Shares Description Value
- --------- ----------------------------------- -----------
Common Stocks, continued
United States (0.4%)
Telecommunication Equipment (0.4%)
6,300 UTStarcom, Inc. (b)................ $ 268,191
-----------
Total Common Stocks (Cost $52,440,198) 58,335,070
-----------
Equity Linked Notes (3.1%)
Taiwan (3.1%)
Chemicals (0.7%)
303,500 Formosa Plastics Corp. (b)......... 412,760
-----------
Computers & Peripherals (1.2%)
117,100 Asustek Computer, Inc. (b)......... 380,575
190,000 Quanta Computer, Inc., Series C (b) 446,500
-----------
827,075
-----------
Electronics--Semiconductors (0.4%)
297,000 Nanya Technology Corp. (b)......... 219,780
-----------
Semiconductors (0.8%)
284,000 Taiwan Semiconductor Manufacturing
Co., Ltd. (b)..................... 485,640
-----------
Total Equity Linked Notes (Cost $1,784,180) 1,945,255
-----------
Option (0.0%)
Hong Kong (0.0%)
1,030,000 Hong Kong Dollar Put, Expires
10/7/03........................... 312
-----------
Total Option (Cost $5,871) 312
-----------
Cash Sweep (1.0%)
628,029 Bank of New York................... 628,029
-----------
Total Cash Sweep (Cost $628,029) 628,029
-----------
Total Investments (Cost $54,858,278)
(a)--98.3% 60,908,666
Other assets in excess of liabilities--1.7% 1,059,780
-----------
Net Assets--100.0% $61,968,446
===========
- --------
(a) Represents cost for financial reporting purposes and differs from value by
unrealized appreciation (depreciation) of securities as follows:
Unrealized appreciation.... $ 7,310,348
Unrealized depreciation.... (1,259,960)
-----------
Net unrealized appreciation $ 6,050,388
===========
Aggregate cost for federal income tax purposes is substantially the same.
(b) Non-income producing security.
(c) Security exempt from registration under Rule 144A of the Securities Act of
1933, as amended. These securities may be resold in transactions exempt
from registration normally to qualified institutional buyers.
AB--Aktiebolog (Swedish Stock Co.)
ADR--American Depositary Receipt
AG--Aktiengesellschaft (West German Stock Co.)
GDR--Global Depositary Receipt
NV--Naamloze Vennootschaap (Dutch Corp.)
PLC--Public Limited Company
SA--Societe Anonyme (French Corp.)
SpA--Societa per Azioni (Italian Corp.)
See notes to financial statements.
60
PACIFIC CAPITAL FUNDS
Value Fund
Schedule of Portfolio Investments
July 31, 2003
Security
Shares Description Value
- ------- ---------------------------------- -------------
Common Stocks (98.0%)
Aerospace/Defense (0.9%)
20,980 Northrop Grumman Corp............. $ 1,935,195
-------------
Banks (9.8%)
93,460 Bank of America Corp.............. 7,716,992
72,141 Bank of New York Co., Inc......... 2,172,887
57,240 Comerica, Inc..................... 2,774,995
120,911 FleetBoston Financial Corp........ 3,759,123
104,850 Wachovia Corp..................... 4,580,897
-------------
21,004,894
-------------
Beverages (0.7%)
28,600 Anheuser-Busch Cos., Inc.......... 1,482,052
-------------
Business Equipment & Services (2.6%)
307,380 Cendant Corp. (b)................. 5,517,471
-------------
Chemicals (3.8%)
66,830 Air Products & Chemicals, Inc..... 3,106,258
43,270 Dow Chemical Co................... 1,527,431
79,926 E.I. du Pont de Nemours & Co...... 3,511,949
-------------
8,145,638
-------------
Computers & Peripherals (3.4%)
188,943 Hewlett-Packard Co................ 3,999,923
40,230 International Business Machines
Corp............................. 3,268,688
-------------
7,268,611
-------------
Consumer Goods & Services (0.7%)
32,665 Kimberly-Clark Corp............... 1,580,986
-------------
Diversified Operations (7.3%)
171,370 Flowserve Corp. (b)............... 3,300,586
98,770 Honeywell International, Inc...... 2,793,216
63,240 Ingersoll-Rand Co., Ltd........... 3,430,138
51,600 ITT Industries, Inc............... 3,441,719
139,940 Tyco International Ltd............ 2,602,884
-------------
15,568,543
-------------
Electronic Components/Instruments (1.9%)
269,620 Flextronics International Ltd. (b) 2,965,820
82,415 Vishay Intertechnology, Inc. (b).. 1,096,120
-------------
4,061,940
-------------
Electronics--Semiconductors (1.1%)
58,800 Cypress Semiconductor Corp. (b)... 822,024
70,550 STMicroelectronics NV, ADR........ 1,509,065
-------------
2,331,089
-------------
Entertainment (2.7%)
130,390 AOL Time Warner, Inc. (b)......... 2,011,918
85,085 Viacom, Inc., Class B (b)......... 3,702,899
-------------
5,714,817
-------------
Financial Services (13.9%)
84,670 Capital One Financial Corp........ 4,056,540
237,193 Citigroup, Inc.................... 10,626,247
47,420 Fannie Mae........................ 3,036,777
132,165 J.P. Morgan Chase & Co............ 4,632,383
44,040 Lehman Brothers Holdings, Inc..... 2,786,411
100,330 Morgan Stanley.................... 4,759,655
-------------
29,898,013
-------------
Security
Shares Description Value
- ------- ---------------------------------- -------------
Common Stocks, continued
Food Processing & Packaging (1.0%)
93,090 ConAgra Foods, Inc................ $ 2,097,318
-------------
Health Care Facilities (1.0%)
83,370 Apria Healthcare Group, Inc. (b).. 2,164,285
-------------
Insurance (7.5%)
61,590 ACE Ltd........................... 2,031,854
56,970 American International Group, Inc. 3,657,474
65,600 Hartford Financial Services Group,
Inc. (The)....................... 3,423,664
84,300 MetLife, Inc...................... 2,336,796
55,380 RenaissanceRe Holdings Ltd........ 2,358,634
134,669 Travelers Property Casualty Corp.,
Class B.......................... 2,173,558
-------------
15,981,980
-------------
Insurance--Life & Health (2.5%)
111,720 Lincoln National Corp............. 4,171,625
79,600 UnumProvident Corp................ 1,080,968
-------------
5,252,593
-------------
Media--Cable TV (3.5%)
144,355 Comcast Corp., Class A (b)........ 4,376,843
288,220 Liberty Media Corp., Class A (b).. 3,196,360
-------------
7,573,203
-------------
Medical Instruments (1.0%)
30,640 C.R. Bard, Inc.................... 2,100,678
-------------
Medical Services (0.6%)
40,260 Laboratory Corp. of America
Holdings (b)..................... 1,279,060
-------------
Metal & Mineral Production (1.4%)
110,620 Alcoa, Inc........................ 3,071,917
-------------
Oil & Gas--Exploration & Production Services (9.8%)
52,860 ChevronTexaco Corp................ 3,811,735
75,680 ConocoPhillips.................... 3,961,091
58,084 Devon Energy Corp................. 2,751,439
217,678 Exxon Mobil Corp.................. 7,744,984
39,900 National-Oilwell, Inc. (b)........ 734,160
61,730 Newfield Exploration Co. (b)...... 2,230,305
-------------
21,233,714
-------------
Paper Products (0.4%)
20,470 Temple-Inland, Inc................ 949,603
-------------
Pharmaceuticals (1.2%)
57,050 Wyeth............................. 2,600,339
-------------
Publishing (2.2%)
35,250 Gannett Co., Inc.................. 2,708,257
33,270 McGraw-Hill Cos., Inc. (The)...... 2,022,151
-------------
4,730,408
-------------
Restaurants (0.6%)
43,330 Yum! Brands, Inc. (b)............. 1,296,867
-------------
Retail (1.6%)
82,850 Pier 1 Imports, Inc............... 1,541,010
48,551 Target Corp....................... 1,860,474
-------------
3,401,484
-------------
See notes to financial statements.
61
PACIFIC CAPITAL FUNDS
Value Fund
Schedule of Portfolio Investments, Continued
July 31, 2003
Security
Shares Description Value
- ------- -------------------------- -------------
Common Stocks, continued
Savings & Loans (2.9%)
155,055 Washington Mutual, Inc.... $ 6,121,571
-------------
Software & Computer Services (0.6%)
69,269 FileNET Corp. (b)......... 1,262,081
-------------
Telecommunications--Services & Equipment (0.6%)
187,510 RF Micro Devices, Inc. (b) 1,378,199
-------------
Tobacco (0.5%)
27,094 Altria Group, Inc......... 1,084,031
-------------
Utilities--Electric (5.4%)
69,900 Dominion Resources, Inc... 4,200,990
75,380 Exelon Corp............... 4,332,088
86,620 FirstEnergy Corp.......... 2,987,524
-------------
11,520,602
-------------
Security
Shares Description Value
--------- ------------------------- ------------
Common Stocks, continued
Utilities--Telecommunications (4.9%)
53,242 AT&T Corp................... $ 1,131,925
174,250 SBC Communications, Inc..... 4,070,480
150,161 Verizon Communications...... 5,234,612
------------
10,437,017
------------
Total Common Stocks (Cost $203,974,978) 210,046,199
------------
Investment Company (1.9%)
4,026,077 LEADER Money Market Fund,
Institutional Shares....... 4,026,077
------------
Total Investment Company (Cost $4,026,077) 4,026,077
------------
Total Investments (Cost $208,001,055)
(a)--99.9% 214,072,276
Other assets in excess of liabilities--0.1% 245,527
------------
Net Assets--100.0% $214,317,803
============
- --------
(a) Represents cost for financial reporting purposes and differs from value by
unrealized appreciation (depreciation) of securities as follows:
Unrealized appreciation.... $ 19,371,792
Unrealized depreciation.... (13,300,571)
------------
Net unrealized appreciation $ 6,071,221
============
Aggregate cost for federal income tax purposes is substantially the same.
(b) Non-income producing security.
ADR--American Depositary Receipt
NV--Naamloze Vennootschaap (Dutch Corp.)
See notes to financial statements.
62
PACIFIC CAPITAL FUNDS
Small Cap Fund
Schedule of Portfolio Investments
July 31, 2003
Security
Shares Description Value
---------- --------------------------------------- ------------
Common Stocks (88.5%)
Aerospace/Defense (2.5%)
177,100 AAR Corp............................... $ 1,434,510
64,200 Kaman Corp............................. 789,018
------------
2,223,528
------------
Agricultural Services (1.3%)
46,800 Delta & Pine Land Co................... 1,156,428
------------
Airlines (1.0%)
61,300 Continental Airlines, Inc., Class B (b) 896,819
------------
Apparel (1.0%)
26,700 Kellwood Co............................ 877,095
------------
Appliances (1.0%)
112,000 Applica, Inc........................... 919,520
------------
Automotive (1.1%)
14,900 Oshkosh Truck Corp..................... 991,148
------------
Banks (7.7%)
23,960 Associated Banc-Corp................... 900,417
30,700 Banknorth Group, Inc................... 847,320
25,200 Community Bank System, Inc............. 1,063,439
30,300 F.N.B. Corp............................ 955,965
33,400 FirstMerit Corp........................ 797,258
33,900 Greater Bay Bancorp.................... 664,101
30,300 Oak Hill Financial, Inc................ 892,335
56,200 Riggs National Corp.................... 909,316
------------
7,030,151
------------
Building Materials (4.1%)
27,900 Ameron International Corp.............. 946,368
58,800 Dycom Industries, Inc. (b)............. 1,000,188
85,900 Louisiana-Pacific Corp. (b)............ 1,043,685
21,700 Quanex Corp............................ 687,890
------------
3,678,131
------------
Business Equipment & Services (6.2%)
23,300 CACI International, Inc., Class A (b) 916,622
127,700 Danka Business Systems PLC,
ADR (b)............................... 440,565
52,100 infoUSA, Inc. (b)...................... 468,900
29,900 PEC Solutions, Inc. (b)................ 670,956
37,500 RadiSys Corp. (b)...................... 577,500
95,100 Titan Corp. (The) (b).................. 1,458,834
46,200 Viad Corp.............................. 1,025,178
------------
5,558,555
------------
Chemicals (1.2%)
77,000 OM Group, Inc.......................... 1,071,070
------------
Commercial Services (1.9%)
45,300 Price Communications Corp. (b)......... 575,310
46,000 SOURCECORP, Inc. (b)................... 1,099,400
------------
1,674,710
------------
Computers & Peripherals (1.4%)
52,400 ATI Technologies, Inc. (b)............. 650,808
17,800 Imation Corp........................... 635,282
------------
1,286,090
------------
Consumer Services (0.9%)
188,400 Stewart Enterprises, Inc., Class A (b) 830,844
------------
Security
Shares Description Value
---------- --------------------------------------- ------------
Common Stocks, continued
Diversified Operations (0.5%)
9,500 Actuant Corp., Class A (b)............. $ 462,650
------------
Educational Services (0.5%)
21,600 Concorde Career Colleges, Inc. (b)..... 447,120
------------
Electronic Components/Instruments (1.7%)
82,000 Power-One, Inc. (b).................... 868,380
21,500 Rogers Corp. (b)....................... 633,820
------------
1,502,200
------------
Electronics--Semiconductors (3.4%)
245,100 Agere Systems, Inc., Class A (b)....... 688,731
133,700 ASE Test Ltd. (b)...................... 903,812
27,700 Photronics, Inc. (b)................... 508,295
20,900 Planar Systems, Inc. (b)............... 504,108
38,200 PMC-Sierra, Inc. (b)................... 468,332
------------
3,073,278
------------
Food Processing & Packaging (1.4%)
25,900 Chiquita Brands International, Inc. (b) 396,270
43,350 Flowers Foods, Inc..................... 882,173
------------
1,278,443
------------
Health Care (1.3%)
42,400 LifePoint Hospitals, Inc. (b).......... 1,196,952
------------
Hotels & Lodging (0.8%)
45,400 Extended Stay America, Inc. (b)........ 679,184
------------
Insurance (4.2%)
287,700 Meadowbrook Insurance Group, Inc. (b) 891,870
52,500 Phoenix Cos., Inc. (The)............... 491,400
21,700 Platinum Underwriters Holdings, Ltd. 586,985
28,300 RLI Corp............................... 915,788
33,100 Selective Insurance Group, Inc......... 842,726
------------
3,728,769
------------
Machinery/Equipment (1.1%)
59,910 Gerber Scientific, Inc. (b)............ 507,438
29,800 Rofin-Sinar Technologies, Inc. (b)..... 441,040
------------
948,478
------------
Manufacturing (1.8%)
38,200 Cooper Tire & Rubber Co................ 649,400
59,100 Tredegar Corp.......................... 930,825
------------
1,580,225
------------
Media--Cable TV (0.3%)
59,700 Charter Communications, Inc.,
Class A (b)........................... 290,739
------------
Medical--Biotechnology (1.2%)
13,400 CV Therapeutics, Inc. (b).............. 478,246
37,200 SangStat Medical Corp. (b)............. 595,572
------------
1,073,818
------------
Medical Instruments (1.2%)
15,900 Inamed Corp. (b)....................... 1,055,760
------------
Metals (3.3%)
90,000 Allegheny Technologies, Inc............ 679,500
45,000 Cleveland-Cliffs, Inc. (b)............. 886,500
85,000 Commonweath Industries, Inc............ 408,000
See notes to financial statements.
63
PACIFIC CAPITAL FUNDS
Small Cap Fund
Schedule of Portfolio Investments, Continued
July 31, 2003
Security
Shares Description Value
---------- ----------------------------------- ------------
Common Stocks, continued
Metals, continued
57,800 Joy Global, Inc. (b)............... $ 912,662
5,600 Steel Technologies, Inc............ 60,256
------------
2,946,918
------------
Multimedia (1.8%)
52,500 aQuantive, Inc. (b)................ 519,750
172,900 UnitedGlobalCom, Inc., Class A (b). 1,096,186
------------
1,615,936
------------
Oil & Gas--Exploration & Production Services (1.7%)
155,500 Newpark Resources, Inc. (b)........ 747,955
37,000 Westport Resources Corp. (b)....... 767,750
------------
1,515,705
------------
Pharmaceuticals (2.9%)
47,200 Andrx Corp. (b).................... 1,070,496
29,100 CIMA Labs, Inc. (b)................ 838,080
124,100 Medarex, Inc. (b).................. 689,996
------------
2,598,572
------------
Publishing (0.9%)
22,400 Lee Enterprises, Inc............... 831,712
------------
Raw Materials (1.1%)
42,100 Georgia Gulf Corp.................. 963,248
------------
Real Estate (4.3%)
70,000 American Financial Realty Trust.... 1,031,800
39,000 Anworth Mortgage Asset Corp........ 599,820
21,100 Gables Residential Trust........... 669,925
78,700 Innkeepers USA Trust............... 645,340
23,800 Manufactured Home Communities, Inc. 871,080
------------
3,817,965
------------
Recreational Products (0.8%)
18,400 Toro Co............................ 735,632
------------
Retail (2.8%)
59,000 Duane Reade, Inc. (b).............. 988,250
27,300 Jo-Ann Stores, Inc., Class A (b)... 738,465
30,500 Men's Wearhouse, Inc. (The) (b).... 771,955
------------
2,498,670
------------
Retail--Food Chain (0.9%)
51,100 Casey's General Stores, Inc........ 782,852
------------
Savings & Loans (5.3%)
68,200 BankAtlantic Bancorp, Inc., Class A 951,390
68,050 Brookline Bancorp, Inc............. 1,013,265
25,200 First Essex Bancorp, Inc........... 1,251,432
Security
Shares Description Value
---------- ------------------------------------ ------------
Common Stocks, continued
Savings & Loans, continued
26,200 Parkvale Financial Corp............. $ 642,948
37,800 TierOne Corp. (b)................... 873,180
------------
4,732,215
------------
Security & Protection Services (1.1%)
58,600 Brink's Co. (The)................... 963,384
------------
Software & Computer Services (0.3%)
32,000 MSC.Software Corp. (b).............. 237,440
------------
Telecommunications--Services & Equipment (3.1%)
75,600 Cincinnati Bell, Inc. (b)........... 426,384
22,600 Commonwealth Telephone
Enterprises, Inc. (b).............. 858,800
70,300 Dobson Communications Corp.,
Class A (b)........................ 452,732
52,700 REMEC, Inc. (b)..................... 506,447
34,700 Tekelec (b)......................... 509,049
------------
2,753,412
------------
Transportation (3.4%)
44,800 Genesee & Wyoming, Inc., Class A (b) 1,003,968
39,282 Heartland Express, Inc. (b)......... 997,763
71,700 SCS Transportation, Inc. (b)........ 1,076,217
------------
3,077,948
------------
Utilities--Electric (1.3%)
28,000 Black Hills Corp.................... 859,320
52,900 Sierra Pacific Resources (b)........ 272,435
------------
1,131,755
------------
Utilities--Gas (2.8%)
27,000 Energen Corp........................ 936,900
57,015 Southern Union Co. (b).............. 878,601
23,200 UGI Corp............................ 732,424
------------
2,547,925
------------
Total Common Stocks (Cost $64,407,042) 79,262,994
------------
Depositary Receipt (4.8%)
32,000 iShares Russell 2000 Value Index
Fund............................... 4,329,600
------------
Total Depositary Receipt (Cost $4,249,111) 4,329,600
------------
Cash Sweep (4.7%)
4,246,524 Bank of New York.................... 4,246,524
------------
Total Cash Sweep (Cost $4,246,524) 4,246,524
------------
Total Investments (Cost $72,902,677)
(a)--98.0% 87,839,118
Other assets in excess of liabilities--2.0% 1,751,675
------------
Net Assets--100.0% $ 89,590,793
============
- --------
(a) Represents cost for financial reporting purposes and differs from value by
unrealized appreciation (depreciation) of securities as follows:
Unrealized appreciation.... $17,394,205
Unrealized depreciation.... (2,457,764)
-----------
Net unrealized appreciation $14,936,441
===========
Aggregate cost for federal income tax purposes is substantially the same.
(b) Non-income producing security.
ADR--American Depositary Receipt
See notes to financial statements.
64
PACIFIC CAPITAL FUNDS
Notes to Financial Statements
July 31, 2003
1. Organization
Pacific Capital Funds (the "Trust") was organized on October 30, 1992, and is
registered under the Investment Company Act of 1940, as amended ("the 1940
Act"), as an open-end management investment company established as a
Massachusetts business trust. The Trust currently consists of the following
investment portfolios (individually, a "Fund" and collectively, the "Funds"):
Growth Stock Fund, Growth and Income Fund, New Asia Growth Fund, Diversified
Fixed Income Fund, Ultra Short Government Fund, Short Intermediate U.S.
Government Securities Fund, Tax-Free Securities Fund, Tax-Free Short
Intermediate Securities Fund, International Stock Fund, Value Fund, and Small
Cap Fund. The Trust is authorized to issue an unlimited number of shares
without par value in three classes of shares for each Fund: Class A, Class B
and Class Y. Each class of shares for each Fund has identical rights and
privileges except with respect to sales charges, distribution (12b-1) fees
paid by Class A and B shares, voting rights on matters affecting a single
class of shares, and the exchange privileges of each class of shares.
Effective June 1, 2003, the offering of Class B shares by all the Funds of
the Trust was suspended. On and after June 1, 2003, investors are not able to
make new purchases of Class B shares, except dividend or distribution
reinvestments in Class B shares.
2. Significant Accounting Policies
The following is a summary of significant accounting policies followed by the
Trust in the preparation of its financial statements. The policies are in
conformity with generally accepted accounting principles in the United States
("GAAP"). The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of income and expenses for the period. Actual results could differ from those
estimates.
Securities Valuation:
Investments and options of the Funds for which the primary market is a
national securities exchange are valued at the last reported sale price, or
official closing price, on the day of valuation. In the absence of any sale
of such securities on the valuation date, the valuations are based on the
mean of the latest quoted bid and asked prices. Securities, including thinly
traded, unlisted, and restricted securities, for which market quotations are
not readily available, are valued at fair market value by The Asset
Management Group of Bank of Hawaii (the "Advisor") under the supervision of
the Trust's Board of Trustees. Investments in investment companies are valued
at their respective net asset values as reported by such companies. Money
market instruments and other debt securities maturing in 60 days or less are
valued at either amortized cost, which approximates market value, or at
original cost which combined with accrued interest, approximates market
value. Under the amortized cost valuation method, the discount or premium is
amortized on a constant basis to the maturity of the security. Investments in
foreign securities, currency holdings and other assets and liabilities of New
Asia Growth Fund and International Stock Fund are valued based on quotations
from the primary market in which they are traded and translated from the
local currency into U.S. dollars using current exchange rates.
Securities Transactions and Related Income:
Securities transactions are accounted for on the date the security is
purchased or sold (trade date). Interest income is recognized on the accrual
basis and includes, where applicable, the pro rata amortization of premium or
accretion of discount. Dividend income is recorded on the ex-dividend date.
Gains or losses realized from sales of securities are determined by comparing
the identified cost of the security lot sold with the net sales proceeds.
Continued
65
PACIFIC CAPITAL FUNDS
Notes to Financial Statements, Continued
July 31, 2003
Foreign Currency Translation:
The accounting records of the Trust are maintained in U.S. dollars.
Investment securities and other assets and liabilities of the New Asia Growth
Fund and International Stock Fund denominated in a foreign currency are
translated into U.S. dollars at current exchange rates. Purchases and sales
of securities, income receipts and expense payments are translated into U.S.
dollars at the exchange rate on the date of the transactions.
The New Asia Growth Fund and International Stock Fund do not isolate that
portion of the results of operations resulting from changes in foreign
exchange rates on investments from fluctuations arising from changes in
market prices of securities held. Such fluctuations are included with the net
realized and unrealized gain or loss from investments and foreign currencies.
Reported net realized foreign currency exchange gains or losses arise from
sales and maturities of portfolio securities, sales of foreign currencies,
currency exchange fluctuations between the trade and settlement dates of
securities transactions, and the differences between the amounts of assets
and liabilities recorded and the U.S. dollar equivalents of the amounts
actually received or paid. Net unrealized foreign currency appreciation or
depreciation arises from changes in the values of assets and liabilities,
including investments in securities, resulting from changes in currency
exchange rates.
Forward Currency Exchange Contracts:
The New Asia Growth Fund and International Stock Fund may enter into foreign
currency exchange contracts to convert U.S. dollars to and from various
foreign currencies. A foreign currency exchange contract is an obligation by
a Fund to purchase or sell a specific foreign currency at a future date at a
price (in U.S. dollars) set at the time of the contract. The Funds do not
engage in "cross-currency" foreign exchange contracts (i.e., contracts to
purchase or sell one foreign currency in exchange for another foreign
currency). The Funds' foreign currency contracts might be considered spot
(typically a contract of one week or less) contracts or forward (contract
length over one week) contracts. Spot contracts are entered into for purposes
of hedging against foreign currency fluctuations relating to a specific
portfolio transaction, such as the delay between a security transaction trade
date and settlement date. Forward contracts are entered into for purposes of
hedging portfolio holdings or concentrations of such holdings. These Funds
enter into foreign currency exchange contracts solely for spot or forward
hedging purposes, and not for speculative purposes (i.e., the Funds do not
enter into such contracts for the purpose of earning foreign currency gains).
Foreign currency exchange contracts are adjusted daily by the prevailing spot
or forward rate of the underlying currency, and any appreciation or
depreciation is recorded for financial statement purposes as unrealized until
the contract settlement date, at which time the Fund records realized gains
or losses equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed. A Fund could be
exposed to risk if a counterparty is unable to meet the terms of a forward
foreign exchange currency contract or if the value of the foreign currency
changes unfavorably.
Dividends to Shareholders:
Dividends from net investment income are declared daily and paid monthly for
the Diversified Fixed Income Fund, Ultra Short Government Fund, Short
Intermediate U.S. Government Securities Fund, Tax-Free Securities Fund and
Tax-Free Short Intermediate Securities Fund. Dividends from net investment
income are declared and paid quarterly for the Growth Stock Fund, Growth and
Income Fund, New Asia Growth Fund, International Stock Fund, Value Fund and
Small Cap Fund. Distributable net realized capital gains, if any, are
declared and distributed annually for all the Funds.
The amounts of dividends from net investment income and of distributions from
net realized gains are determined in accordance with federal income tax
regulations, which may differ from GAAP. These "book/tax" differences are
either considered temporary or permanent in nature. To the extent these
differences are permanent in nature, such amounts are
Continued
66
PACIFIC CAPITAL FUNDS
Notes to Financial Statements, Continued
July 31, 2003
reclassified within the composition of net assets based on their federal
tax-basis treatment; temporary differences do not require reclassification.
Concentration of Credit Risk:
The Tax-Free Securities Fund and the Tax-Free Short Intermediate Securities
Fund have a majority of their investments in the securities of issuers in
Hawaii. Such concentration may subject the Fund to the effects of economic
changes occurring within that State.
The New Asia Growth Fund has a majority of its investments in securities of
the Far East Asia region. Such concentration may subject the Fund to the
effects of economic changes occurring within the region.
Allocation Methodology:
Expenses directly related to one Fund are charged to that Fund. Other
operating expenses for the Funds or the Trust are prorated to the Funds on
the basis of relative net assets or other appropriate basis.
Income, expenses (other than expenses attributable to a specific share
class), realized and unrealized gains or losses on investments are allocated
to each class of shares based on its relative net assets. Class specific
expenses are charged directly to the class incurring the expense.
3. Purchases and Sales of Securities
Purchases and sales of securities (excluding short-term securities) for the
year ended July 31, 2003 are as follows:
Purchases Sales
------------ ------------
Growth Stock Fund................................. $ 99,180,127 $ 75,352,838
Growth and Income Fund............................ 68,508,956 60,990,370
New Asia Growth Fund.............................. 27,100,589 22,643,931
Diversified Fixed Income Fund..................... 130,594,992 123,713,074
Ultra Short Government Fund....................... 59,223,139 21,785,000
Short Intermediate U.S. Government Securities Fund 43,004,889 11,329,112
Tax-Free Securities Fund.......................... 5,226,124 37,338,231
Tax-Free Short Intermediate Securities Fund....... 6,509,408 2,584,815
International Stock Fund.......................... 99,576,863 91,033,587
Value Fund........................................ 154,590,676 155,378,393
Small Cap Fund.................................... 68,403,828 71,350,175
4. Transactions with Affiliates
Investment advisory services are provided to the Trust by the Advisor. For
the Advisor's services, the Funds pay the Advisor as follows: Growth Stock
Fund, Growth and Income Fund, and Value Fund--0.80% of the Funds' average
daily net assets; New Asia Growth Fund and Ultra Short Government Fund--0.40%
of the Funds' average daily net assets; Diversified Fixed Income Fund and
Tax-Free Securities Fund--0.60% of the Funds' average daily net assets; Short
Intermediate U.S. Government Securities Fund, Tax-Free Short Intermediate
Securities Fund and Small Cap Fund--0.50% of the Funds' average daily net
assets; International Stock Fund--0.45% of the Fund's average daily net
assets. Certain Trustees and officers of the Trust are employees of either
the Advisor or its affiliates and are not paid any fees directly by the Trust
for serving in such capacities.
Continued
67
PACIFIC CAPITAL FUNDS
Notes to Financial Statements, Continued
July 31, 2003
First State Investments (formerly First State (Hong Kong) LLC) is the
Sub-Advisor to the New Asia Growth Fund. Nicholas-Applegate Capital
Management ("NACM") is the Sub-Advisor to the International Stock Fund and
the Small Cap Fund. For the Sub-Advisors' services, the Funds pay the
Sub-Advisors as follows: New Asia Growth Fund--0.50% of the Fund's average
daily net assets; International Stock Fund--0.65% of the first $50 million of
the Fund's average daily net assets, and 0.60% of it's average daily net
assets in excess of $50 million; Small Cap Fund--0.60% of the first $50
million of the Fund's average daily net assets, and 0.55% of it's average
daily net assets in excess of $50 million. Prior to October 1, 2002, all
sub-advisory fees were borne by the Advisor, and not the Funds.
BISYS Fund Services Limited Partnership d/b/a BISYS Fund Services ("BISYS"),
and BISYS Fund Services Ohio, Inc. ("BISYS Ohio") are subsidiaries of The
BISYS Group, Inc. BISYS, with whom certain officers of the Trust are
affiliated, serves the Trust as principal underwriter and distributor. Such
officers are not paid any fees directly by the Funds for serving as officers
of the Trust. BISYS Ohio serves the Trust as administrator. Under the terms
of the administration agreement, BISYS Ohio's fees are computed at an annual
rate of 0.16% of the average daily net assets of each Fund.
The Trust has adopted for the Class A and Class B shares of each of the Funds
a Class A Distribution Plan and a Class B Distribution Plan (the "Plans")
pursuant to Rule 12b-1 under the 1940 Act. Under the Plans each Fund pays
BISYS a fee which will not exceed on an annual basis, 0.75% and 1.00%,
respectively, of the average daily net assets attributable to the Class A and
Class B shares of each Fund. These fees are for payments BISYS makes to
banks, including the Advisor or its affiliates, other institutions and
broker/dealers, and for expenses BISYS and any of its affiliates or
subsidiaries incur for providing distribution or shareholder service
assistance.
Effective January 1, 2003, the Pacific Capital New Asia Growth Fund and
Pacific Capital International Stock Fund implemented a redemption fee. This
fee may be assessed on redemptions and exchanges of Fund shares within 90
days from the date the Fund shares were acquired. This fee will not apply to
Fund shares acquired prior to January 1, 2003.
For the year ended July 31, 2003, BISYS, as the Trust's principal
underwriter, received approximately $205,401 from commissions on sales of
Class A and Class B shares, of which $6,612 was retained by the principal
underwriter or other affiliated broker-dealer.
BISYS Ohio serves the Trust as fund accountant. Under the terms of the fund
accounting agreement, BISYS Ohio is entitled to receive a fixed-dollar fee
per Fund and is reimbursed for certain out-of-pocket expenses incurred in
providing fund accounting services.
BISYS Ohio serves the Trust as transfer agent. Under the terms of the
transfer agency agreement, BISYS Ohio is entitled to receive fees and
reimbursement for certain out-of-pocket expenses incurred in providing
transfer agent services.
Fees may be voluntarily reduced or expenses reimbursed to assist the Funds in
maintaining competitive expense ratios. These amounts are disclosed on the
Statements of Operations.
Continued
68
PACIFIC CAPITAL FUNDS
Notes to Financial Statements, Continued
July 31, 2003
5. Capital Share Transactions:
Transactions in capital shares for the Trust were as follows:
Growth Stock Fund Growth and Income Fund
------------------------ ------------------------
Amount Shares Amount Shares
------------ ---------- ------------ ----------
For the Year Ended For the Year Ended
July 31, 2003 July 31, 2003
------------------------ ------------------------
Class A:
Shares issued....... $ 794,002 116,111 $ 458,084 47,199
Dividends reinvested -- -- 9,875 1,028
Shares redeemed..... (2,226,355) (333,103) (1,003,144) (105,049)
------------ ---------- ------------ ----------
Net Change.......... $ (1,432,353) (216,992) $ (535,185) (56,822)
============ ========== ============ ==========
Class B:
Shares issued....... $ 408,072 62,518 $ 314,186 34,022
Shares redeemed..... (2,314,827) (357,992) (1,507,241) (163,869)
------------ ---------- ------------ ----------
Net Change.......... $ (1,906,755) (295,474) $ (1,193,055) (129,847)
============ ========== ============ ==========
Class Y:
Shares issued....... $ 97,236,084 14,135,813 $ 54,447,192 5,651,480
Dividends reinvested -- -- 50,111 5,086
Shares redeemed..... (68,267,887) (9,536,077) (45,452,881) (4,545,501)
------------ ---------- ------------ ----------
Net Change.......... $ 28,968,197 4,599,736 $ 9,044,422 1,111,065
============ ========== ============ ==========
For the Year Ended For the Year Ended
July 31, 2002 July 31, 2002
------------------------ ------------------------
Class A:
Shares issued....... $ 969,671 107,597 $ 848,305 68,472
Shares redeemed..... (5,106,185) (577,794) (2,228,457) (188,859)
------------ ---------- ------------ ----------
Net Change.......... $ (4,136,514) (470,197) $ (1,380,152) (120,387)
============ ========== ============ ==========
Class B:
Shares issued....... $ 1,451,173 168,292 $ 682,498 58,504
Shares redeemed..... (3,524,287) (424,193) (2,058,843) (181,311)
------------ ---------- ------------ ----------
Net Change.......... $ (2,073,114) (255,901) $ (1,376,345) (122,807)
============ ========== ============ ==========
Class Y:
Shares issued....... $ 44,376,625 4,901,855 $ 39,496,238 3,277,090
Dividends reinvested -- -- 20,119 1,665
Shares redeemed..... (80,198,473) (8,814,396) (39,036,638) (3,166,989)
------------ ---------- ------------ ----------
Net Change.......... $(35,821,848) (3,912,541) $ 479,719 111,766
============ ========== ============ ==========
Continued
69
PACIFIC CAPITAL FUNDS
Notes to Financial Statements, Continued
July 31, 2003
5. Capital Share Transactions (continued):
Transactions in capital shares for the Trust were as follows:
New Asia Growth Fund Diversified Fixed Income Fund
------------------------ ----------------------------
Amount Shares Amount Shares
------------ ---------- ------------- -----------
For the Year Ended For the Year Ended
July 31, 2003 July 31, 2003
------------------------ ----------------------------
Class A:
Shares issued....... $ 8,254,007 960,004 $ 10,551,678 916,978
Dividends reinvested 1,579 161 310,351 27,018
Shares redeemed..... (8,565,630) (986,327) (8,796,698) (762,287)
------------ ---------- ------------- -----------
Net Change.......... $ (310,044) (26,162) $ 2,065,331 181,709
============ ========== ============= ===========
Class B:
Shares issued....... $ 55,524 6,676 $ 1,068,526 93,369
Dividends reinvested -- -- 212,372 18,528
Shares redeemed..... (55,546) (6,424) (1,113,027) (96,909)
------------ ---------- ------------- -----------
Net Change.......... $ (22) 252 $ 167,871 14,988
============ ========== ============= ===========
Class Y:
Shares issued....... $ 16,884,508 1,948,497 $ 102,268,745 8,829,242
Dividends reinvested 14,297 1,536 2,893,514 252,121
Shares redeemed..... (13,706,030) (1,531,287) (93,017,421) (8,007,707)
------------ ---------- ------------- -----------
Net Change.......... $ 3,192,775 418,746 $ 12,144,838 1,073,656
============ ========== ============= ===========
For the Year Ended For the Year Ended
July 31, 2002 July 31, 2002
------------------------ ----------------------------
Class A:
Shares issued....... $ 3,749,111 369,052 $ 1,893,293 173,497
Dividends reinvested -- -- 324,522 29,499
Shares redeemed..... (4,020,146) (391,088) (3,371,707) (308,107)
------------ ---------- ------------- -----------
Net Change.......... $ (271,035) (22,036) $ (1,153,892) (105,111)
============ ========== ============= ===========
Class B:
Shares issued....... $ 26,602 2,521 $ 1,036,961 94,634
Dividends reinvested -- -- 175,383 15,975
Shares redeemed..... (83,194) (9,384) (725,837) (66,187)
------------ ---------- ------------- -----------
Net Change.......... $ (56,592) (6,863) $ 486,507 44,422
============ ========== ============= ===========
Class Y:
Shares issued....... $ 28,658,100 2,902,349 $ 95,790,472 8,681,877
Dividends reinvested 122 12 1,170,234 105,809
Shares redeemed..... (30,498,918) (3,061,180) (111,743,576) (10,114,575)
------------ ---------- ------------- -----------
Net Change.......... $ (1,840,696) (158,819) $ (14,782,870) (1,326,889)
============ ========== ============= ===========
Continued
70
PACIFIC CAPITAL FUNDS
Notes to Financial Statements, Continued
July 31, 2003
5. Capital Share Transactions (continued):
Transactions in capital shares for the Trust were as follows:
Short Intermediate
Ultra Short U.S. Government
Government Fund Securities Fund
-------------------------- ------------------------
Amount Shares Amount Shares
------------- ----------- ------------ ----------
For the Year Ended For the Year Ended
July 31, 2003 July 31, 2003
-------------------------- ------------------------
Class A:
Shares issued....... $ 10,153,475 986,435 $ 12,283,053 1,215,990
Dividends reinvested 344,808 33,490 61,059 6,055
Shares redeemed..... (11,737,626) (1,140,688) (9,104,516) (901,407)
------------- ----------- ------------ ----------
Net Change.......... $ (1,239,343) (120,763) $ 3,239,596 320,638
============= =========== ============ ==========
Class B:
Shares issued....... $ 939,560 91,194 $ -- --
Dividends reinvested 26,819 2,605 -- --
Shares redeemed..... (361,943) (35,197) -- --
------------- ----------- ------------ ----------
Net Change.......... $ 604,436 58,602 $ -- --
============= =========== ============ ==========
Class Y:
Shares issued....... $ 192,951,426 18,738,665 $ 55,975,493 5,526,973
Dividends reinvested 1,254,423 121,766 606,943 60,296
Shares redeemed..... (137,634,410) (13,362,464) (28,971,109) (2,860,109)
------------- ----------- ------------ ----------
Net Change.......... $ 56,571,439 5,497,967 $ 27,611,327 2,727,160
============= =========== ============ ==========
For the Year Ended For the Year Ended
July 31, 2002 July 31, 2002
-------------------------- ------------------------
Class A:
Shares issued....... $ 10,252,262 999,926 $ 6,399,749 645,212
Dividends reinvested 451,375 43,982 49,686 5,019
Shares redeemed..... (11,745,912) (1,145,137) (5,440,001) (547,786)
------------- ----------- ------------ ----------
Net Change.......... $ (1,042,275) (101,229) $ 1,009,434 102,445
============= =========== ============ ==========
Class B:
Shares issued....... $ 843,336 82,029 $ -- --
Dividends reinvested 23,595 2,299 -- --
Shares redeemed..... (330,887) (32,263) -- --
------------- ----------- ------------ ----------
Net Change.......... $ 536,044 52,065 $ -- --
============= =========== ============ ==========
Class Y:
Shares issued....... $ 237,413,965 23,172,347 $ 52,678,793 5,316,645
Dividends reinvested 3,293,865 320,758 407,401 41,275
Shares redeemed..... (206,399,153) (20,112,064) (39,428,267) (3,976,642)
------------- ----------- ------------ ----------
Net Change.......... $ 34,308,677 3,381,041 $ 13,657,927 1,381,278
============= =========== ============ ==========
Continued
71
PACIFIC CAPITAL FUNDS
Notes to Financial Statements, Continued
July 31, 2003
5. Capital Share Transactions (continued):
Transactions in capital shares for the Trust were as follows:
Tax-Free
Short Intermediate
Tax-Free Securities Fund Securities Fund
------------------------ ------------------------
Amount Shares Amount Shares
------------ ---------- ------------ ----------
For the Year Ended For the Year Ended
July 31, 2003 July 31, 2003
------------------------ ------------------------
Class A:
Shares issued....... $ 2,148,066 195,318 $ 336,781 32,272
Dividends reinvested 455,258 41,614 64,372 6,171
Shares redeemed..... (2,409,293) (219,713) (228,995) (21,940)
------------ ---------- ------------ ----------
Net Change.......... $ 194,031 17,219 $ 172,158 16,503
============ ========== ============ ==========
Class B:
Shares issued....... $ 199,331 18,133 $ -- --
Dividends reinvested 108,025 9,886 -- --
Shares redeemed..... (1,073,333) (98,782) -- --
------------ ---------- ------------ ----------
Net Change.......... $ (765,977) (70,763) $ -- --
============ ========== ============ ==========
Class Y:
Shares issued....... $ 32,547,775 2,951,050 $ 33,234,318 3,157,037
Dividends reinvested 2,413,368 222,567 334,244 32,033
Shares redeemed..... (79,990,466) (7,261,015) (19,441,424) (1,844,448)
------------ ---------- ------------ ----------
Net Change.......... $(45,029,323) (4,087,398) $ 14,127,138 1,344,622
============ ========== ============ ==========
For the Year Ended For the Year Ended
July 31, 2002 July 31, 2002
------------------------ ------------------------
Class A:
Shares issued....... $ 4,195,139 390,368 $ 1,261,813 123,126
Dividends reinvested 434,420 40,696 52,675 5,142
Shares redeemed..... (1,399,399) (130,662) (931,139) (90,746)
------------ ---------- ------------ ----------
Net Change.......... $ 3,230,160 300,402 $ 383,349 37,522
============ ========== ============ ==========
Class B:
Shares issued....... $ 1,003,730 93,546 $ -- --
Dividends reinvested 141,930 13,308 -- --
Shares redeemed..... (761,266) (71,405) -- --
------------ ---------- ------------ ----------
Net Change.......... $ 384,394 35,449 $ -- --
============ ========== ============ ==========
Class Y:
Shares issued....... $ 41,368,476 3,854,797 $ 21,292,806 2,071,550
Dividends reinvested 4,387,669 413,870 13,622 1,323
Shares redeemed..... (68,352,683) (6,348,340) (12,554,998) (1,218,877)
------------ ---------- ------------ ----------
Net Change.......... $(22,596,538) (2,079,673) $ 8,751,430 853,996
============ ========== ============ ==========
Continued
72
PACIFIC CAPITAL FUNDS
Notes to Financial Statements, Continued
July 31, 2003
5. Capital Share Transactions (continued):
Transactions in capital shares for the Trust were as follows:
International Stock Fund Value Fund
------------------------ -------------------------
Amount Shares Amount Shares
------------ ---------- ------------ -----------
For the Year Ended For the Year Ended
July 31, 2003 July 31, 2003
------------------------ -------------------------
Class A:
Shares issued....... $ 15,931,966 2,721,226 $ 368,226 54,381
Dividends reinvested -- -- 20,160 2,949
Shares redeemed..... (16,261,026) (2,764,493) (375,626) (55,445)
------------ ---------- ------------ -----------
Net Change.......... $ (329,060) (43,267) $ 12,760 1,885
============ ========== ============ ===========
Class B:
Shares issued....... $ 11,235 1,868 $ 174,581 25,618
Dividends reinvested -- -- 3,507 524
Shares redeemed..... (87,797) (14,984) (367,645) (54,333)
------------ ---------- ------------ -----------
Net Change.......... $ (76,562) (13,116) $ (189,557) (28,191)
============ ========== ============ ===========
Class Y:
Shares issued....... $ 18,694,187 3,153,781 $ 89,512,632 13,483,447
Dividends reinvested -- -- 43,711 6,378
Shares redeemed..... (10,546,609) (1,760,198) (91,632,660) (13,187,291)
------------ ---------- ------------ -----------
Net Change.......... $ 8,147,578 1,393,583 $ (2,076,317) 302,534
============ ========== ============ ===========
For the Year Ended For the Year Ended
July 31, 2002 July 31, 2002
------------------------ -------------------------
Class A:
Shares issued....... $ 6,038,643 875,402 $ 1,092,784 128,030
Dividends reinvested -- -- 10,405 1,310
Shares redeemed..... (6,771,277) (968,071) (935,520) (114,192)
------------ ---------- ------------ -----------
Net Change.......... $ (732,634) (92,669) $ 167,669 15,148
============ ========== ============ ===========
Class B:
Shares issued....... $ 50,474 7,096 $ 509,644 60,443
Shares redeemed..... (116,958) (16,418) (213,502) (25,473)
------------ ---------- ------------ -----------
Net Change.......... $ (66,484) (9,322) $ 296,142 34,970
============ ========== ============ ===========
Class Y:
Shares issued....... $ 31,364,773 4,354,051 $ 77,678,106 9,457,545
Dividends reinvested -- -- 19,610 2,501
Shares redeemed..... (44,913,555) (6,191,769) (53,974,761) (6,457,303)
------------ ---------- ------------ -----------
Net Change.......... $(13,548,782) (1,837,718) $ 23,722,955 3,002,743
============ ========== ============ ===========
Continued
73
PACIFIC CAPITAL FUNDS
Notes to Financial Statements, Continued
July 31, 2003
5. Capital Share Transactions (continued):
Transactions in capital shares for the Trust were as follows:
Small Cap Fund
------------------------
Amount Shares
------------ ----------
For the Year Ended
July 31, 2003
------------------------
Class A:
Shares issued....... $ 274,132 24,441
Dividends reinvested 145,154 13,895
Shares redeemed..... (242,169) (22,036)
------------ ----------
Net Change.......... $ 177,117 16,300
============ ==========
Class B:
Shares issued....... $ 398,341 37,409
Dividends reinvested 233,202 22,863
Shares redeemed..... (390,963) (37,132)
------------ ----------
Net Change.......... $ 240,580 23,140
============ ==========
Class Y:
Shares issued....... $ 39,167,209 3,446,523
Dividends reinvested 5,596,681 534,466
Shares redeemed..... (34,719,701) (3,135,575)
------------ ----------
Net Change.......... $ 10,044,189 845,414
============ ==========
For the Year Ended
July 31, 2002
------------------------
Class A:
Shares issued....... $ 709,296 52,361
Dividends reinvested 71,233 5,623
Shares redeemed..... (609,029) (46,243)
------------ ----------
Net Change.......... $ 171,500 11,741
============ ==========
Class B:
Shares issued....... $ 1,455,831 108,532
Dividends reinvested 80,425 6,464
Shares redeemed..... (170,257) (12,977)
------------ ----------
Net Change.......... $ 1,365,999 102,019
============ ==========
Class Y:
Shares issued....... $ 54,148,882 4,089,207
Dividends reinvested 3,328,751 262,585
Shares redeemed..... (37,337,889) (2,737,517)
------------ ----------
Net Change.......... $ 20,139,744 1,614,275
============ ==========
6. Federal Income Tax Information
It is the policy of each Fund to continue to qualify as a regulated
investment company by complying with the provisions available to certain
investment companies as defined in applicable sections of the Internal
Revenue Code, and to make
Continued
74
PACIFIC CAPITAL FUNDS
Notes to Financial Statements, Continued
July 31, 2003
distributions from net investment income and from net realized gains
sufficient to relieve it from all, or substantially all, federal income
taxes. Withholding taxes on foreign dividends have been paid or provided for
in accordance with applicable country's tax rules and rates.
The tax character of distributions during the fiscal year ended July 31, 2003
was as follows (amounts in thousands):
Distribution Paid From
------------------------
Net Net Total Total
Investment Long-Term Taxable Tax Exempt Distributions
Income Capital Gains Distributions Distributions Paid
---------- ------------- ------------- ------------- -------------
Growth and Income Fund....................... $ 568 $ -- $ 568 $ -- $ 568
New Asia Growth Fund......................... 64 -- 64 -- 64
Diversified Fixed Income Fund................ 10,613 2,062 12,675 -- 12,675
Ultra Short Government Fund.................. 5,572 -- 5,572 -- 5,572
Short Intermediate U.S. Government Securities
Fund........................................ 2,409 514 2,923 -- 2,923
Tax-Free Securities Fund..................... 243 2,395 2,638 18,309 20,947
Tax-Free Short Intermediate Securities Fund.. 60 193 253 1,471 1,724
Value Fund................................... 2,562 -- 2,562 -- 2,562
Small Cap Fund............................... 5,106 2,833 7,939 -- 7,939
The tax character of distributions during the fiscal year ended July 31, 2002
was as follows (amounts in thousands):
Distributions Paid From
------------------------
Net Net Total Tax Total
Investment Long-Term Taxable Exempt Distributions
Income Capital Gains Distributions Distributions Paid*
---------- ------------- ------------- ------------- -------------
Growth and Income Fund....................... $ 190 $ -- $ 190 $ -- $ 190
New Asia Growth Fund......................... --** -- -- -- --
Diversified Fixed Income Fund................ 12,042 -- 12,042 -- 12,042
Ultra Short Government Fund.................. 8,078 32 8,110 -- 8,110
Short Intermediate U.S. Gov't Securities Fund 2,514 -- 2,514 -- 2,514
Tax-Free Securities Fund..................... 185 4,512 4,697 20,422 25,119
Tax-Free Short Intermediate Securities Fund.. 2 -- 2 1,446 1,448
Value Fund................................... 1,677 -- 1,677 -- 1,677
Small Cap Fund............................... 2,011 3,628 5,639 -- 5,639
Balanced Fund................................ 3,501 -- 3,501 -- 3,501
* Total distributions paid differ from the Statements of Changes in Net Assets
because for tax purposes dividends are recognized when actually paid.
** Less than $1,000.
Continued
75
PACIFIC CAPITAL FUNDS
Notes to Financial Statements, Continued
July 31, 2003
As of July 31, 2003, the components of accumulated earnings/(deficit) on a
tax basis was as follows (amounts in thousands):
Total
Undistributed Undistributed Accumulated Unrealized Accumulated
Ordinary Long-Term Accumulated Capital & Appreciation/ Earnings/
Income Capital Gains Earnings Other Losses (Depreciation)* (Deficit)
------------- ------------- ----------- ------------ --------------- -----------
Growth Stock Fund................. $ -- $ -- $ -- $(132,178) $ 2,131 $(130,047)
Growth and Income Fund............ 20 -- 20 (39,468) 246 (39,202)
New Asia Growth Fund.............. -- -- -- (5,584) 2,354 (3,230)
Diversified Fixed Income Fund..... 1,120 3,724 4,844 (2,158) 9,434 12,120
Ultra Short Government Fund....... 21 -- 21 (4) 2,121 2,138
Short Intermediate U.S. Government
Securities Fund.................. 15 20 35 -- 1,496 1,531
International Stock Fund.......... -- -- -- (44,954) 5,796 (39,158)
Value Fund........................ 93 -- 93 (45,407) 3,841 (41,473)
Small Cap Fund.................... -- -- -- (30) 14,835 14,805
* The differences between book-basis and tax basis unrealized
appreciation/(depreciation) is attributable to the tax deferral of losses on
wash sales for the Growth Stock Fund, Growth and Income Fund, New Asia Growth
Fund, International Stock Fund, Value Fund, and Small Cap Fund.
Undistributed Total
--------------------------------- Unrealized Accumulated
Tax Exempt Ordinary Long-Term Accumulated Appreciation/ Earnings/
Income Income Capital Gains Earnings (Depreciation) (Deficit)
---------- -------- ------------- ----------- -------------- -----------
Tax-Free Securities Fund.............. $48 $--** $1,387 $1,435 $30,942 $32,377
Tax-Free Short Intermediate Securities
Fund................................. 4 -- -- 4 1,568 1,572
** Less than $1,000.
Capital Loss Carryforward
On July 31, 2003, the Funds' most recent fiscal year end for tax purposes,
the following Funds had net capital loss carryforwards to offset future net
capital gains, if any:
Amount Expires
----------- -------
Growth Stock Fund............ $ 709,011 2009
38,902,738 2010
82,021,934 2011
Growth and Income Fund....... 7,912,252 2010
28,653,978 2011
New Asia Growth Fund......... 683,203 2007
400,314 2009
2,794,727 2010
529,712 2011
Diversified Fixed Income Fund 2,061,471 2004
58,103 2005
38,240 2006
International Stock Fund..... 1,431,316 2009
29,506,697 2010
9,834,840 2011
Value Fund................... 3,347,910 2010
36,042,699 2011
Small Cap Fund............... 29,610 2011
Continued
76
PACIFIC CAPITAL FUNDS
Notes to Financial Statements, Continued
July 31, 2003
Post October Loss Deferral
Capital (and foreign currency) losses incurred after October 31 within a
Fund's fiscal year are deemed to arise on the first business day of the
following fiscal year for tax purposes. The following Funds have incurred and
will elect to defer such capital losses (and foreign currency losses):
Post October Foreign
Capital Losses Currency Losses
-------------- ---------------
Growth Stock Fund.......... $10,544,089 $ --
Growth and Income Fund..... 2,901,475 --
New Asia Growth Fund....... 1,173,295 2,574
Ultra Short Government Fund 4,227 --
International Stock Fund... 3,641,415 539,640
Value Fund................. 6,016,557 --
Dividend Received Deduction
For corporate shareholders, the following percentages of the total ordinary
income distributions paid during the fiscal year ended July 31, 2003 qualify
for the corporate dividends received deduction for the following Funds:
Percentage
----------
Growth and Income Fund 100%
Value Fund............ 100%
Small Cap Fund........ 27%
Additional Tax Information (unaudited)
For the fiscal year ended July 31, 2003, certain dividends paid by the Funds
may be subject to a maximum tax rate of 15%, as provided for by the Jobs and
Growth Tax Relief Reconciliation Act of 2003. The Funds intend to designate
the maximum amount allowable as taxed at a maximum rate of 15%. Complete
information will be reported in conjunction with your 2003 Form 1099-DIV.
For the year ended July 31, 2003, the following Funds paid qualified dividend
income of (amounts in thousands):
Amount
------
Growth and Income Fund $ 283
Value Fund............ 1,502
Continued
77
PACIFIC CAPITAL FUNDS -- GROWTH STOCK FUND
Financial Highlights
(Selected data for a share of capital stock outstanding throughout the year)
Investment Activities Distributions
----------------------------------- --------------------------------
Net Asset Net Realized Net Asset
Value, Net and Unrealized Total from Net Net Value,
Beginning Investment Gains (Losses) Investment Investment Realized Total End of Total
of Year Loss on Investments Activities Income Gains Distributions Year Return*
- -----------------------------------------------------------------------------------------------------------------------------
CLASS A
Year Ended July 31, 2003 $ 6.90 $(0.04) $ 0.74 $ 0.70 $ -- $ -- $ -- $ 7.60 10.14%
Year Ended July 31, 2002 10.25 (0.08) (3.27) (3.35) -- -- -- 6.90 (32.68%)
Year Ended July 31, 2001 19.73 (0.09) (4.67) (4.76) -- (4.72) (4.72) 10.25 (30.04%)
Year Ended July 31, 2000 17.45 (0.11) 7.24 7.13 -- (4.85) (4.85) 19.73 45.24%
Year Ended July 31, 1999 17.75 (0.08) 2.80 2.72 (0.01) (3.01) (3.02) 17.45 17.40%
- -----------------------------------------------------------------------------------------------------------------------------
CLASS B
Year Ended July 31, 2003 $ 6.62 $(0.09) $ 0.70 $ 0.61 $ -- $ -- $ -- $ 7.23 9.21%
Year Ended July 31, 2002 9.89 (0.14) (3.13) (3.27) -- -- -- 6.62 (33.06%)
Year Ended July 31, 2001 19.32 (0.16) (4.55) (4.71) -- (4.72) (4.72) 9.89 (30.51%)
Year Ended July 31, 2000 17.28 (0.18) 7.07 6.89 -- (4.85) (4.85) 19.32 44.14%
Year Ended July 31, 1999 17.72 (0.10) 2.67 2.57 -- (3.01) (3.01) 17.28 16.55%
- -----------------------------------------------------------------------------------------------------------------------------
CLASS Y
Year Ended July 31, 2003 $ 7.06 $(0.02) $ 0.75 $ 0.73 $ -- $ -- $ -- $ 7.79 10.34%
Year Ended July 31, 2002 10.44 (0.05) (3.33) (3.38) -- -- -- 7.06 (32.38%)
Year Ended July 31, 2001 19.95 (0.06) (4.73) (4.79) -- (4.72) (4.72) 10.44 (29.84%)
Year Ended July 31, 2000 17.56 (0.08) 7.32 7.24 -- (4.85) (4.85) 19.95 45.56%
Year Ended July 31, 1999 17.81 (0.06) 2.82 2.76 -- (3.01) (3.01) 17.56 17.72%
- -----------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-------------------------------------------------------------
Ratio of Net
Ratio of Investment Ratio of
Net Assets, Expenses Loss to Expenses
End of to Average Average to Average Portfolio
Year (000's) Net Assets Net Assets Net Assets** Turnover (a)
- ---------------------------------------------------------------------------------------
CLASS A
Year Ended July 31, 2003 $ 11,231 1.35% (0.58%) 1.85% 33.11%
Year Ended July 31, 2002 11,701 1.34% (0.80%) 1.86% 36.85%
Year Ended July 31, 2001 22,182 1.33% (0.69%) 1.87% 97.27%
Year Ended July 31, 2000 30,971 1.30% (0.70%) 1.84% 117.11%
Year Ended July 31, 1999 17,417 1.32% (0.58%) 1.85% 81.02%
- ---------------------------------------------------------------------------------------
CLASS B
Year Ended July 31, 2003 $ 13,630 2.10% (1.33%) 2.10% 33.11%
Year Ended July 31, 2002 14,431 2.09% (1.55%) 2.11% 36.85%
Year Ended July 31, 2001 24,084 2.08% (1.45%) 2.12% 97.27%
Year Ended July 31, 2000 28,789 2.06% (1.46%) 2.10% 117.11%
Year Ended July 31, 1999 9,988 2.06% (1.35%) 2.10% 81.02%
- ---------------------------------------------------------------------------------------
CLASS Y
Year Ended July 31, 2003 $251,310 1.10% (0.33%) 1.10% 33.11%
Year Ended July 31, 2002 195,252 1.09% (0.55%) 1.11% 36.85%
Year Ended July 31, 2001 329,572 1.08% (0.44%) 1.12% 97.27%
Year Ended July 31, 2000 504,125 1.05% (0.45%) 1.09% 117.11%
Year Ended July 31, 1999 382,298 1.07% (0.32%) 1.11% 81.02%
- ---------------------------------------------------------------------------------------
* Excludes sales charge for class A and contingent deferred sales charge for
class B.
** During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred the ratios would have been as indicated.
(a) Portfolio turnover is calculated on the basis of the Fund, as a whole,
without distinguishing between the classes of shares issued.
See notes to financial statements.
78
PACIFIC CAPITAL FUNDS -- GROWTH AND INCOME FUND
Financial Highlights
(Selected data for a share of capital stock outstanding throughout the year)
Investment Activities Distributions
------------------------------------ ---------------------------------
Net Asset Net Net Realized Net Asset
Value, Investment and Unrealized Total from Net Net Value,
Beginning Income Gains (Losses) Investment Investment Realized Total End of Total
of Year (Loss) on Investments Activities Income Gains Distributions Year Return*
- -------------------------------------------------------------------------------------------------------------------------------
CLASS A
Year Ended July 31, 2003 $ 9.89 $ 0.02 $ 0.80 $ 0.82 $(0.02) $ -- $(0.02) $10.69 8.31%
Year Ended July 31, 2002 13.89 -- (4.00) (4.00) -- -- -- 9.89 (28.80%)
Year Ended July 31, 2001 21.33 (0.03) (4.72) (4.75) -- (2.69) (2.69) 13.89 (24.39%)
Year Ended July 31, 2000 18.89 (0.04) 5.16 5.12 -- (2.68) (2.68) 21.33 28.85%
Year Ended July 31, 1999 18.72 (0.02) 2.38 2.36 -- (2.19) (2.19) 18.89 13.67%
- -------------------------------------------------------------------------------------------------------------------------------
CLASS B
Year Ended July 31, 2003 $ 9.50 $(0.05) $ 0.76 $ 0.71 $ -- $ -- $ -- $10.21 7.47%
Year Ended July 31, 2002 13.44 (0.10) (3.84) (3.94) -- -- -- 9.50 (29.32%)
Year Ended July 31, 2001 20.88 (0.14) (4.61) (4.75) -- (2.69) (2.69) 13.44 (24.97%)
Year Ended July 31, 2000 18.66 (0.15) 5.05 4.90 -- (2.68) (2.68) 20.88 27.95%
Year Ended July 31, 1999 18.68 (0.08) 2.25 2.17 -- (2.19) (2.19) 18.66 12.58%
- -------------------------------------------------------------------------------------------------------------------------------
CLASS Y
Year Ended July 31, 2003 $ 9.96 $ 0.04 $ 0.80 $ 0.84 $(0.04) $ -- $(0.04) $10.76 8.52%
Year Ended July 31, 2002 13.97 0.03 (4.02) (3.99) (0.02) -- (0.02) 9.96 (28.60%)
Year Ended July 31, 2001 21.39 0.01 (4.74) (4.73) --(b) (2.69) (2.69) 13.97 (24.19%)
Year Ended July 31, 2000 18.90 --(b) 5.18 5.18 (0.01) (2.68) (2.69) 21.39 29.22%
Year Ended July 31, 1999 18.75 0.03 2.34 2.37 (0.03) (2.19) (2.22) 18.90 13.69%
- -------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
--------------------------------------------------------------
Ratio of Net
Investment
Ratio of Income Ratio of
Net Assets, Expenses (Loss) to Expenses
End of to Average Average to Average Portfolio
Year (000's) Net Assets Net Assets Net Assets** Turnover (a)
- ---------------------------------------------------------------------------------------
CLASS A
Year Ended July 31, 2003 $ 5,548 1.37% 0.24% 1.87% 46.92%
Year Ended July 31, 2002 5,696 1.35% (0.03%) 1.88% 43.28%
Year Ended July 31, 2001 9,669 1.35% (0.16%) 1.89% 43.24%
Year Ended July 31, 2000 12,540 1.33% (0.22%) 1.87% 60.51%
Year Ended July 31, 1999 9,593 1.35% (0.12%) 1.89% 65.56%
- ---------------------------------------------------------------------------------------
CLASS B
Year Ended July 31, 2003 $ 7,507 2.12% (0.51%) 2.12% 46.92%
Year Ended July 31, 2002 8,222 2.10% (0.79%) 2.13% 43.28%
Year Ended July 31, 2001 13,282 2.10% (0.92%) 2.14% 43.24%
Year Ended July 31, 2000 15,593 2.08% (0.99%) 2.12% 60.51%
Year Ended July 31, 1999 8,265 2.09% (0.90%) 2.13% 65.56%
- ---------------------------------------------------------------------------------------
CLASS Y
Year Ended July 31, 2003 $138,027 1.12% 0.49% 1.12% 46.92%
Year Ended July 31, 2002 116,719 1.10% 0.20% 1.13% 43.28%
Year Ended July 31, 2001 162,138 1.10% 0.09% 1.14% 43.24%
Year Ended July 31, 2000 201,600 1.08% 0.03% 1.12% 60.51%
Year Ended July 31, 1999 157,891 1.10% 0.15% 1.14% 65.56%
- ---------------------------------------------------------------------------------------
* Excludes sales charge for class A and contingent deferred sales charge for
class B.
** During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred the ratios would have been as indicated.
(a) Portfolio turnover is calculated on the basis of the Fund, as a whole,
without distinguishing between the classes of shares issued.
(b) Less than $0.01 per share.
See notes to financial statements.
79
PACIFIC CAPITAL FUNDS -- NEW ASIA GROWTH FUND
Financial Highlights
(Selected data for a share of capital stock outstanding throughout the year)
Investment Activities Distributions
-------------------------------------- -------------------------------
Net Asset Net Realized Net Asset
Value, Net and Unrealized Total from Net Net Value,
Beginning Investment Gains (Losses) Investment Investment Realized Total End of Total
of Year Income (Loss) on Investments Activities Income Gains Distributions Year Return*
- ---------------------------------------------------------------------------------------------------------------------------------
CLASS A
Year Ended July 31, 2003 $ 9.83 $ 0.02 $(0.07) $(0.05) $(0.01) $-- $(0.01) $ 9.77 (0.47%)
Year Ended July 31, 2002 9.42 (0.01) 0.42 0.41 -- -- -- 9.83 4.35%
Year Ended July 31, 2001 12.50 (0.05) (3.03) (3.08) -- -- -- 9.42 (24.64%)
Year Ended July 31, 2000 10.57 (0.17) 2.10 1.93 -- -- -- 12.50 18.26%
Year Ended July 31, 1999 6.35 (0.05) 4.29 4.24 (0.02) -- (0.02) 10.57 66.99%
- ---------------------------------------------------------------------------------------------------------------------------------
CLASS B
Year Ended July 31, 2003 $ 9.60 $(0.04) $(0.08) $(0.12) $ -- $-- $ -- $ 9.48 (1.25%)
Year Ended July 31, 2002 9.22 (0.10) 0.48 0.38 -- -- -- 9.60 4.12%
Year Ended July 31, 2001 12.34 (0.15) (2.97) (3.12) -- -- -- 9.22 (25.28%)
Year Ended July 31, 2000 10.50 (0.13) 1. 97 1.84 -- -- -- 12.34 17.52%
Year Ended July 31, 1999 6.34 (0.02) 4.18 4.16 -- -- -- 10.50 65.66%
- ---------------------------------------------------------------------------------------------------------------------------------
CLASS Y
Year Ended July 31, 2003 $ 9.93 $ 0.05 $(0.06) $(0.01) $(0.03) $-- $(0.03) $ 9.89 (0.13%)
Year Ended July 31, 2002 9.49 0.01 0.43 0.44 --(b) -- --(b) 9.93 4.64%
Year Ended July 31, 2001 12.58 (0.02) (3.07) (3.09) -- -- -- 9.49 (24.56%)
Year Ended July 31, 2000 10.60 (0.09) 2.07 1.98 -- -- -- 12.58 18.68%
Year Ended July 31, 1999 6.37 (0.06) 4.33 4.27 (0.04) -- (0.04) 10.60 67.38%
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
--------------------------------------------------------------
Ratio of Net
Ratio of Investment Ratio of
Net Assets, Expenses to Income (Loss) Expenses to
End of Year Average to Average Average Portfolio
(000's) Net Assets Net Assets Net Assets** Turnover (a)
- ----------------------------------------------------------------------------------------
CLASS A
Year Ended July 31, 2003 $ 1,264 2.10% 0.22% 2.61% 110.44%
Year Ended July 31, 2002 1,530 1.96% (0.07%) 2.48% 70.55%
Year Ended July 31, 2001 1,673 1.98% (0.40%) 2.53% 115.95%
Year Ended July 31, 2000 2,704 1.99% (1.22%) 2.54% 172.57%
Year Ended July 31, 1999 2,379 2.14% (0.52%) 2.78% 152.58%
- ----------------------------------------------------------------------------------------
CLASS B
Year Ended July 31, 2003 $ 424 2.85% (0.51%) 2.86% 110.44%
Year Ended July 31, 2002 426 2.71% (0.91%) 2.74% 70.55%
Year Ended July 31, 2001 473 2.73% (1.16%) 2.78% 115.95%
Year Ended July 31, 2000 823 2.75% (1.94%) 2.80% 172.57%
Year Ended July 31, 1999 311 2.82% (1.33%) 2.95% 152.58%
- ----------------------------------------------------------------------------------------
CLASS Y
Year Ended July 31, 2003 $23,937 1.85% 0.59% 1.86% 110.44%
Year Ended July 31, 2002 19,870 1.71% 0.13% 1.73% 70.55%
Year Ended July 31, 2001 20,512 1.73% (0.17%) 1.78% 115.95%
Year Ended July 31, 2000 25,740 1.74% (0.95%) 1.79% 172.57%
Year Ended July 31, 1999 15,954 1.90% (0.33%) 2.05% 152.58%
- ----------------------------------------------------------------------------------------
* Excludes sales charge for class A and contingent deferred sales charge for
class B.
** During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred the ratios would have been as indicated.
(a) Portfolio turnover is calculated on the basis of the Fund, as a whole,
without distinguishing between the classes of shares issued.
(b) Less than $0.01 per share.
See notes to financial statements.
80
PACIFIC CAPITAL FUNDS -- DIVERSIFIED FIXED INCOME FUND
Financial Highlights
(Selected data for a share of capital stock outstanding throughout the year)
Investment Activities Distributions
------------------------------------ --------------------------------
Net Asset Net Realized Net Asset
Value, Net and Unrealized Total from Net Net Value,
Beginning Investment Gains (Losses) Investment Investment Realized Total End of Total
of Year Income on Investments Activities Income Gains Distributions Year Return*
- ----------------------------------------------------------------------------------------------------------------------------
CLASS A
Year Ended July 31, 2003 $11.22 $0.47 $ 0.17 $0.64 $(0.47) $(0.11) $(0.58) $11.28 5.76%
Year Ended July 31, 2002 10.89 0.53 0.33 0.86 (0.53) -- (0.53) 11.22 8.13%
Year Ended July 31, 2001 10.22 0.58 0.67 1.25 (0.58) -- (0.58) 10.89 12.48%
Year Ended July 31, 2000 10.39 0.58 (0.17) 0.41 (0.58) -- (0.58) 10.22 4.09%
Year Ended July 31, 1999 10.92 0.56 (0.43) 0.13 (0.56) (0.10) (0.66) 10.39 1.02%
- ----------------------------------------------------------------------------------------------------------------------------
CLASS B
Year Ended July 31, 2003 $11.20 $0.38 $ 0.17 $0.55 $(0.38) $(0.11) $(0.49) $11.26 4.96%
Year Ended July 31, 2002 10.87 0.45 0.33 0.78 (0.45) -- (0.45) 11.20 7.34%
Year Ended July 31, 2001 10.20 0.50 0.67 1.17 (0.50) -- (0.50) 10.87 11.68%
Year Ended July 31, 2000 10.37 0.50 (0.17) 0.33 (0.50) -- (0.50) 10.20 3.34%
Year Ended July 31, 1999 10.91 0.48 (0.44) 0.04 (0.48) (0.10) (0.58) 10.37 0.24%
- ----------------------------------------------------------------------------------------------------------------------------
CLASS Y
Year Ended July 31, 2003 $11.29 $0.50 $ 0.17 $0.67 $(0.50) $(0.11) $(0.61) $11.35 6.00%
Year Ended July 31, 2002 10.96 0.56 0.33 0.89 (0.56) -- (0.56) 11.29 8.38%
Year Ended July 31, 2001 10.28 0.61 0.68 1.29 (0.61) -- (0.61) 10.96 12.83%
Year Ended July 31, 2000 10.45 0.61 (0.17) 0.44 (0.61) -- (0.61) 10.28 4.37%
Year Ended July 31, 1999 11.00 0.59 (0.45) 0.14 (0.59) (0.10) (0.69) 10.45 1.10%
- ----------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-------------------------------------------------------------
Ratio of Net
Ratio of Investment Ratio of
Net Assets, Expenses Income Expenses to
End of Year to Average to Average Average Portfolio
(000's) Net Assets Net Assets Net Assets** Turnover (a)
- --------------------------------------------------------------------------------------
CLASS A
Year Ended July 31, 2003 $ 8,841 0.97% 4.04% 1.62% 52.53%
Year Ended July 31, 2002 6,755 0.96% 4.86% 1.63% 71.59%
Year Ended July 31, 2001 7,702 0.95% 5.43% 1.65% 58.91%
Year Ended July 31, 2000 5,252 0.97% 5.70% 1.66% 84.65%
Year Ended July 31, 1999 2,228 0.98% 5.08% 1.67% 60.00%
- --------------------------------------------------------------------------------------
CLASS B
Year Ended July 31, 2003 $ 5,193 1.72% 3.30% 1.87% 52.53%
Year Ended July 31, 2002 4,997 1.71% 4.11% 1.88% 71.59%
Year Ended July 31, 2001 4,367 1.70% 4.67% 1.90% 58.91%
Year Ended July 31, 2000 2,760 1.71% 4.95% 1.90% 84.65%
Year Ended July 31, 1999 2,078 1.72% 4.39% 1.91% 60.00%
- --------------------------------------------------------------------------------------
CLASS Y
Year Ended July 31, 2003 $235,902 0.72% 4.30% 0.87% 52.53%
Year Ended July 31, 2002 222,500 0.71% 5.11% 0.88% 71.59%
Year Ended July 31, 2001 230,523 0.70% 5.70% 0.90% 58.91%
Year Ended July 31, 2000 241,169 0.71% 5.95% 0.90% 84.65%
Year Ended July 31, 1999 199,413 0.73% 5.34% 0.92% 60.00%
- --------------------------------------------------------------------------------------
* Excludes sales charge for class A and contingent deferred sales charge for
class B.
** During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred the ratios would have been as indicated.
(a) Portfolio turnover is calculated on the basis of the Fund, as a whole,
without distinguishing between the classes of shares issued.
See notes to financial statements.
81
PACIFIC CAPITAL FUNDS -- ULTRA SHORT GOVERNMENT FUND
Financial Highlights
(Selected data for a share of capital stock outstanding throughout the period)
Investment Activities Distributions
------------------------------------ ----------------------------------
Net Asset Net Realized Net Asset
Value, Net and Unrealized Total from Net Net Value,
Beginning Investment Gains (Losses) Investment Investment Realized Total End of
of Period Income on Investments Activities Income Gains Distributions Period
- ----------------------------------------------------------------------------------------------------------------------------
CLASS A
Year Ended July 31, 2003 $10.31 $0.23 $(0.06) $0.17 $(0.23) $(0.01) $(0.24) $10.24
Year Ended July 31, 2002 10.20 0.30 0.11 0.41 (0.30) --(d) (0.30) 10.31
Year Ended July 31, 2001 (b) 10.02 0.55 0.18 0.73 (0.55) -- (0.55) 10.20
- ----------------------------------------------------------------------------------------------------------------------------
CLASS B
Year Ended July 31, 2003 $10.31 $0.15 $(0.06) $0.09 $(0.15) $(0.01) $(0.16) $10.24
Year Ended July 31, 2002 10.21 0.22 0.10 0.32 (0.22) --(d) (0.22) 10.31
Year Ended July 31, 2001 (b) 10.02 0.48 0.19 0.67 (0.48) -- (0.48) 10.21
- ----------------------------------------------------------------------------------------------------------------------------
CLASS Y
Year Ended July 31, 2003 $10.32 $0.26 $(0.06) $0.20 $(0.26) $(0.01) $(0.27) $10.25
Year Ended July 31, 2002 10.21 0.33 0.11 0.44 (0.33) --(d) (0.33) 10.32
Year Ended July 31, 2001 10.02 0.58 0.19 0.77 (0.58) -- (0.58) 10.21
Period Ended July 31, 2000 (c) 10.00 0.11 0.02 0.13 (0.11) -- (0.11) 10.02
- ----------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-------------------------------------------------------------
Ratio of Net
Net Assets, Ratio of Investment Ratio of
End of Expenses Income to Expenses
Total Period to Average Average to Average Portfolio
Return* (000's) Net Assets Net Assets Net Assets** Turnover (a)
- ------------------------------------------------------------------------------------------------------
CLASS A
Year Ended July 31, 2003 1.67% $ 12,787 0.62% 2.23% 1.42% 17.41%
Year Ended July 31, 2002 4.10% 14,116 0.62% 2.93% 1.42% 26.15%
Year Ended July 31, 2001 (b) 7.46% 15,002 0.64% 5.20% 1.51% 8.22%
- ------------------------------------------------------------------------------------------------------
CLASS B
Year Ended July 31, 2003 0.91% $ 1,994 1.37% 1.46% 1.67% 17.41%
Year Ended July 31, 2002 3.22% 1,403 1.37% 2.14% 1.67% 26.15%
Year Ended July 31, 2001 (b) 6.79% 858 1.39% 4.48% 1.76% 8.22%
- ------------------------------------------------------------------------------------------------------
CLASS Y
Year Ended July 31, 2003 1.92% $240,916 0.37% 2.47% 0.67% 17.41%
Year Ended July 31, 2002 4.35% 185,806 0.37% 3.16% 0.67% 26.15%
Year Ended July 31, 2001 7.85% 149,445 0.39% 5.56% 0.76% 8.22%
Period Ended July 31, 2000 (c) 1.27%(f) 47,483 0.40%(e) 6.38%(e) 1.28%(e) 0.00%
- ------------------------------------------------------------------------------------------------------
* Excludes sales charge for class A and contingent deferred sales charge for
class B.
** During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred the ratios would have been as indicated.
(a) Portfolio turnover is calculated on the basis of the Fund, as a whole,
without distinguishing between the classes of shares issued.
(b) Period from August 1, 2000 (commencement of operations) to July 31, 2001.
(c) Period from June 1, 2000 (commencement of operations) to July 31, 2000.
(d) Less than $0.01 per share.
(e) Annualized
(f) Not Annualized
See notes to financial statements.
82
PACIFIC CAPITAL FUNDS -- SHORT INTERMEDIATE U.S. GOVERNMENT SECURITIES FUND
Financial Highlights
(Selected data for a share of capital stock outstanding throughout the year)
Investment Activities Distributions
------------------------------------ --------------------------------
Net Asset Net Realized Net Asset
Value, Net and Unrealized Total from Net Net Value,
Beginning Investment Gains (Losses) Investment Investment Realized Total End of Total
of Year Income on Investments Activities Income Gains Distributions Year Return*
- ----------------------------------------------------------------------------------------------------------------------------
CLASS A
Year Ended July 31, 2003 $10.06 $0.31 $ 0.02 $0.33 $(0.31) $(0.11) $(0.42) $ 9.97 3.28%
Year Ended July 31, 2002 9.81 0.34 0.30 0.64 (0.34) (0.05) (0.39) 10.06 6.68%
Year Ended July 31, 2001 9.30 0.45 0.51 0.96 (0.45) -- (0.45) 9.81 10.58%
Year Ended July 31, 2000 9.42 0.44 (0.08) 0.36 (0.44) (0.04) (0.48) 9.30 3.97%
Year Ended July 31, 1999 9.64 0.45 (0.18) 0.27 (0.45) (0.04) (0.49) 9.42 2.79%
- ----------------------------------------------------------------------------------------------------------------------------
CLASS Y
Year Ended July 31, 2003 $10.09 $0.33 $ 0.01 $0.34 $(0.33) $(0.11) $(0.44) $ 9.99 3.41%
Year Ended July 31, 2002 9.83 0.37 0.31 0.68 (0.37) (0.05) (0.42) 10.09 7.03%
Year Ended July 31, 2001 9.32 0.48 0.51 0.99 (0.48) -- (0.48) 9.83 10.84%
Year Ended July 31, 2000 9.44 0.47 (0.08) 0.39 (0.47) (0.04) (0.51) 9.32 4.24%
Year Ended July 31, 1999 9.66 0.48 (0.18) 0.30 (0.48) (0.04) (0.52) 9.44 3.05%
- ----------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
--------------------------------------------------------------
Ratio of Net
Ratio of Investment Ratio of
Net Assets, Expenses Income to Expenses
End of to Average Average to Average Portfolio
Year (000's) Net Assets Net Assets Net Assets** Turnover (a)
- ---------------------------------------------------------------------------------------
CLASS A
Year Ended July 31, 2003 $ 5,327 0.80% 2.93% 1.55% 17.50%
Year Ended July 31, 2002 2,148 0.81% 3.44% 1.57% 62.60%
Year Ended July 31, 2001 1,090 0.90% 4.66% 1.65% 107.46%
Year Ended July 31, 2000 452 0.89% 4.78% 1.64% 48.99%
Year Ended July 31, 1999 595 0.94% 4.65% 1.49% 63.27%
- ---------------------------------------------------------------------------------------
CLASS Y
Year Ended July 31, 2003 $88,824 0.55% 3.23% 0.80% 17.50%
Year Ended July 31, 2002 62,156 0.56% 3.69% 0.82% 62.60%
Year Ended July 31, 2001 47,000 0.65% 4.96% 0.90% 107.46%
Year Ended July 31, 2000 32,380 0.64% 5.04% 0.89% 48.99%
Year Ended July 31, 1999 33,332 0.67% 4.89% 0.72% 63.27%
- ---------------------------------------------------------------------------------------
* Excludes sales charge for class A.
** During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred the ratios would have been as indicated.
(a) Portfolio turnover is calculated on the basis of the Fund, as a whole,
without distinguishing between the classes of shares issued.
See notes to financial statements.
83
PACIFIC CAPITAL FUNDS -- TAX-FREE SECURITIES FUND
Financial Highlights
(Selected data for a share of capital stock outstanding throughout the year)
Investment Activities Distributions
------------------------------------ --------------------------------
Net Asset Net Realized Net Asset
Value, Net and Unrealized Total from Net Net Value,
Beginning Investment Gains (Losses) Investment Investment Realized Total End of Total
of Year Income on Investments Activities Income Gains Distributions Year Return*
- ----------------------------------------------------------------------------------------------------------------------------
CLASS A
Year Ended July 31, 2003 $10.86 $0.43 $(0.05) $0.38 $(0.43) $(0.06) $(0.49) $10.75 3.54%
Year Ended July 31, 2002 10.74 0.45 0.23 0.68 (0.45) (0.11) (0.56) 10.86 6.47%
Year Ended July 31, 2001 10.29 0.47 0.45 0.92 (0.47) -- (0.47) 10.74 9.07%
Year Ended July 31, 2000 10.49 0.48 (0.15) 0.33 (0.48) (0.05) (0.53) 10.29 3.28%
Year Ended July 31, 1999 10.84 0.48 (0.25) 0.23 (0.48) (0.10) (0.58) 10.49 2.00%
- ----------------------------------------------------------------------------------------------------------------------------
CLASS B
Year Ended July 31, 2003 $10.85 $0.35 $(0.04) $0.31 $(0.35) $(0.06) $(0.41) $10.75 2.86%
Year Ended July 31, 2002 10.74 0.37 0.22 0.59 (0.37) (0.11) (0.48) 10.85 5.58%
Year Ended July 31, 2001 10.29 0.39 0.45 0.84 (0.39) -- (0.39) 10.74 8.28%
Year Ended July 31, 2000 10.49 0.40 (0.15) 0.25 (0.40) (0.05) (0.45) 10.29 2.54%
Year Ended July 31, 1999 10.83 0.40 (0.24) 0.16 (0.40) (0.10) (0.50) 10.49 1.40%
- ----------------------------------------------------------------------------------------------------------------------------
CLASS Y
Year Ended July 31, 2003 $10.90 $0.46 $(0.05) $0.41 $(0.46) $(0.06) $(0.52) $10.79 3.80%
Year Ended July 31, 2002 10.78 0.47 0.23 0.70 (0.47) (0.11) (0.58) 10.90 6.73%
Year Ended July 31, 2001 10.33 0.49 0.45 0.94 (0.49) -- (0.49) 10.78 9.33%
Year Ended July 31, 2000 10.53 0.50 (0.15) 0.35 (0.50) (0.05) (0.55) 10.33 3.55%
Year Ended July 31, 1999 10.88 0.51 (0.25) 0.26 (0.51) (0.10) (0.61) 10.53 2.26%
- ----------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
--------------------------------------------------------------
Ratio of Net
Ratio of Investment Ratio of
Net Assets, Expenses Income to Expenses
End of to Average Average to Average Portfolio
Year (000's) Net Assets Net Assets Net Assets** Turnover (a)
- ---------------------------------------------------------------------------------------
CLASS A
Year Ended July 31, 2003 $ 11,829 0.96% 3.93% 1.61% 1.24%
Year Ended July 31, 2002 11,765 0.94% 4.17% 1.61% 13.40%
Year Ended July 31, 2001 8,413 0.95% 4.41% 1.64% 19.05%
Year Ended July 31, 2000 6,832 0.95% 4.71% 1.64% 22.40%
Year Ended July 31, 1999 4,795 0.96% 4.41% 1.65% 9.91%
- ---------------------------------------------------------------------------------------
CLASS B
Year Ended July 31, 2003 $ 4,643 1.71% 3.18% 1.86% 1.24%
Year Ended July 31, 2002 5,458 1.69% 3.42% 1.86% 13.40%
Year Ended July 31, 2001 5,019 1.70% 3.65% 1.89% 19.05%
Year Ended July 31, 2000 2,779 1.70% 3.97% 1.89% 22.40%
Year Ended July 31, 1999 1,756 1.70% 3.68% 1.89% 9.91%
- ---------------------------------------------------------------------------------------
CLASS Y
Year Ended July 31, 2003 $397,157 0.71% 4.18% 0.86% 1.24%
Year Ended July 31, 2002 445,733 0.69% 4.42% 0.86% 13.40%
Year Ended July 31, 2001 463,426 0.70% 4.66% 0.89% 19.05%
Year Ended July 31, 2000 432,677 0.70% 4.96% 0.89% 22.40%
Year Ended July 31, 1999 424,022 0.71% 4.66% 0.90% 9.91%
- ---------------------------------------------------------------------------------------
* Excludes sales charge for class A and contingent deferred sales charge for
class B.
** During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred the ratios would have been as indicated.
(a) Portfolio turnover is calculated on the basis of the Fund, as a whole,
without distinguishing between the classes of shares issued.
See notes to financial statements.
84
PACIFIC CAPITAL FUNDS -- TAX-FREE SHORT INTERMEDIATE SECURITIES FUND
Financial Highlights
(Selected data for a share of capital stock outstanding throughout the year)
Investment Activities Distributions
------------------------------------ --------------------------------
Net Asset Net Realized Net Asset
Value, Net and Unrealized Total from Net Net Value,
Beginning Investment Gains (Losses) Investment Investment Realized Total End of Total
of Year Income on Investments Activities Income Gains Distributions Year Return*
- ----------------------------------------------------------------------------------------------------------------------------
CLASS A
Year Ended July 31, 2003 $10.39 $0.25 $ 0.02 $0.27 $(0.25) $(0.05) $(0.30) $10.36 2.62%
Year Ended July 31, 2002 10.18 0.29 0.21 0.50 (0.29) -- (0.29) 10.39 4.98%
Year Ended July 31, 2001 9.86 0.35 0.32 0.67 (0.35) -- (0.35) 10.18 6.89%
Year Ended July 31, 2000 9.95 0.35 (0.04) 0.31 (0.35) (0.05) (0.40) 9.86 3.19%
Year Ended July 31, 1999 10.09 0.34 (0.09) 0.25 (0.34) (0.05) (0.39) 9.95 2.44%
- ----------------------------------------------------------------------------------------------------------------------------
CLASS Y
Year Ended July 31, 2003 $10.45 $0.28 $ 0.01 $0.29 $(0.28) $(0.05) $(0.33) $10.41 2.78%
Year Ended July 31, 2002 10.23 0.32 0.22 0.54 (0.32) -- (0.32) 10.45 5.33%
Year Ended July 31, 2001 9.91 0.38 0.32 0.70 (0.38) -- (0.38) 10.23 7.15%
Year Ended July 31, 2000 10.00 0.37 (0.04) 0.33 (0.37) (0.05) (0.42) 9.91 3.44%
Year Ended July 31, 1999 10.15 0.37 (0.10) 0.27 (0.37) (0.05) (0.42) 10.00 2.60%
- ----------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-------------------------------------------------------------
Ratio of Net
Net Assets, Ratio of Investment Ratio of
End of Expenses Income to Expenses
Year to Average Average to Average Portfolio
(000's) Net Assets Net Assets Net Assets** Turnover (a)
- --------------------------------------------------------------------------------------
CLASS A
Year Ended July 31, 2003 $ 2,322 0.97% 2.40% 1.58% 6.01%
Year Ended July 31, 2002 2,157 0.98% 2.82% 1.61% 37.24%
Year Ended July 31, 2001 1,732 0.98% 3.48% 1.63% 73.06%
Year Ended July 31, 2000 1,458 0.98% 3.57% 1.63% 42.57%
Year Ended July 31, 1999 878 0.98% 3.35% 1.63% 18.40%
- --------------------------------------------------------------------------------------
CLASS Y
Year Ended July 31, 2003 $63,449 0.72% 2.64% 0.83% 6.01%
Year Ended July 31, 2002 49,599 0.73% 3.06% 0.86% 37.24%
Year Ended July 31, 2001 39,857 0.73% 3.73% 0.88% 73.06%
Year Ended July 31, 2000 41,371 0.73% 3.80% 0.88% 42.57%
Year Ended July 31, 1999 47,668 0.73% 3.61% 0.88% 18.40%
- --------------------------------------------------------------------------------------
* Excludes sales charge for class A.
** During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred the ratios would have been as indicated.
(a) Portfolio turnover is calculated on the basis of the Fund, as a whole,
without distinguishing between the classes of shares issued.
See notes to financial statements.
85
PACIFIC CAPITAL FUNDS -- INTERNATIONAL STOCK FUND
Financial Highlights
(Selected data for a share of capital stock outstanding throughout the period)
Investment Activities Distributions
----------------------------------- -------------------------------------------
Net Asset Net Net Realized Net Asset
Value, Investment and Unrealized Total from Net Net Value,
Beginning Income Gains (Losses) Investment Investment Realized Total End of
of Period (Loss) on Investments Activities Income Gains Distributions Period
- --------------------------------------------------------------------------------------------------------------------------
CLASS A
Year Ended July 31, 2003 $ 6.37 $ 0.03 $ 0.06 $ 0.09 $-- $ -- $ -- $ 6.46
Year Ended July 31, 2002 8.15 (0.04) (1.74) (1.78) -- -- -- 6.37
Year Ended July 31, 2001 14.55 (0.05) (3.77) (3.82) -- (2.58) (2.58) 8.15
Year Ended July 31, 2000 11.96 0.05 3.03 3.08 -- (0.49) (0.49) 14.55
Period Ended July 31, 1999 (b) 10.09 -- 1.87 1.87 -- -- -- 11.96
- --------------------------------------------------------------------------------------------------------------------------
CLASS B
Year Ended July 31, 2003 $ 6.18 $(0.03) $ 0.09 $ 0.06 $-- $ -- $ -- $ 6.24
Year Ended July 31, 2002 7.94 (0.07) (1.69) (1.76) -- -- -- 6.18
Year Ended July 31, 2001 14.35 (0.11) (3.72) (3.83) -- (2.58) (2.58) 7.94
Year Ended July 31, 2000 11.90 0.04 2.90 2.94 -- (0.49) (0.49) 14.35
Period Ended July 31, 1999 (c) 10.20 (0.02) 1.72 1.70 -- -- -- 11.90
- --------------------------------------------------------------------------------------------------------------------------
CLASS Y
Year Ended July 31, 2003 $ 6.44 $ 0.05 $ 0.08 $ 0.13 $-- $ -- $ -- $ 6.57
Year Ended July 31, 2002 8.19 (0.01) (1.74) (1.75) -- -- -- 6.44
Year Ended July 31, 2001 14.59 (0.02) (3.80) (3.82) -- (2.58) (2.58) 8.19
Year Ended July 31, 2000 11.98 (0.06) 3.16 3.10 -- (0.49) (0.49) 14.59
Period Ended July 31, 1999 (d) 10.00 -- 1.98 1.98 -- -- -- 11.98
- --------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-----------------------------------------------------------------
Ratio of Net
Ratio of Investment Ratio of
Net Assets, Expenses to Income (Loss) Expenses to
Total End of Period Average to Average Average Portfolio
Return* (000's) Net Assets Net Assets Net Assets** Turnover (a)
- -----------------------------------------------------------------------------------------------------------
CLASS A
Year Ended July 31, 2003 1.41% $ 874 1.84% 0.43% 2.44% 178.04%
Year Ended July 31, 2002 (21.84%) 1,137 1.81% (0.15%) 2.44% 244.40%
Year Ended July 31, 2001 (29.92%) 2,210 1.75% (0.41%) 2.39% 213.53%
Year Ended July 31, 2000 25.62% 4,362 1.66% (0.58%) 2.30% 214.18%
Period Ended July 31, 1999 (b) 18.53%(f) 265 1.94%(e) (0.19%)(e) 2.61%(e) 156.46%
- -----------------------------------------------------------------------------------------------------------
CLASS B
Year Ended July 31, 2003 0.97% $ 536 2.59% (0.36%) 2.69% 178.04%
Year Ended July 31, 2002 (22.17%) 612 2.56% (0.95%) 2.69% 244.40%
Year Ended July 31, 2001 (30.48%) 860 2.50% (1.15%) 2.64% 213.53%
Year Ended July 31, 2000 24.56% 1,202 2.43% (1.10%) 2.57% 214.18%
Period Ended July 31, 1999 (c) 16.67%(f) 102 2.76%(e) (1.08%)(e) 2.91%(e) 156.46%
- -----------------------------------------------------------------------------------------------------------
CLASS Y
Year Ended July 31, 2003 2.02% $ 60,558 1.59% 0.74% 1.69% 178.04%
Year Ended July 31, 2002 (21.37%) 50,422 1.56% 0.03% 1.69% 244.40%
Year Ended July 31, 2001 (29.82%) 79,177 1.50% (0.14%) 1.64% 213.53%
Year Ended July 31, 2000 25.65% 109,962 1.45% (0.49%) 1.59% 214.18%
Period Ended July 31, 1999 (d) 19.90%(f) 81,253 1.65%(e) 0.03%(e) 1.79%(e) 156.46%
- -----------------------------------------------------------------------------------------------------------
* Excludes sales charge for class A and contingent deferred sales charge for
class B.
** During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred the ratios would have been as indicated.
(a) Portfolio turnover is calculated on the basis of the Fund, as a whole,
without distinguishing between the classes of shares issued.
(b) Period from December 8, 1998 (commencement of operations) to July 31, 1999.
(c) Period from December 20, 1998 (commencement of operations) to July 31, 1999.
(d) Period from December 2, 1998 (commencement of operations) to July 31, 1999.
(e) Annualized
(f) Not Annualized
See notes to financial statements.
86
PACIFIC CAPITAL FUNDS -- VALUE FUND
Financial Highlights
(Selected data for a share of capital stock outstanding throughout the period)
Investment Activities Distributions
----------------------------------- ---------------------------------
Net Asset Net Net Realized Net Asset
Value, Investment and Unrealized Total from Net Net Value,
Beginning Income Gains (Losses) Investment Investment Realized Total End of
of Period (Loss) on Investments Activities Income Gains Distributions Period
- ---------------------------------------------------------------------------------------------------------------------------
CLASS A
Year Ended July 31, 2003 $ 7.02 $ 0.07 $ 0.35 $ 0.42 $(0.07) $ -- $(0.07) $ 7.37
Year Ended July 31, 2002 9.13 0.04 (2.11) (2.07) (0.04) -- (0.04) 7.02
Year Ended July 31, 2001 10.73 0.04 (0.22) (0.18) (0.05) (1.37) (1.42) 9.13
Year Ended July 31, 2000 10.37 0.03 0.50 0.53 (0.04) (0.13) (0.17) 10.73
Period Ended July 31, 1999 (b) 10.05 0.01 0.78 0.79 (0.02) (0.45) (0.47) 10.37
- ---------------------------------------------------------------------------------------------------------------------------
CLASS B
Year Ended July 31, 2003 $ 6.93 $ 0.02 $ 0.34 $ 0.36 $(0.02) $ -- $(0.02) $ 7.27
Year Ended July 31, 2002 9.04 (0.02) (2.09) (2.11) -- -- -- 6.93
Year Ended July 31, 2001 10.65 (0.02) (0.22) (0.24) --(e) (1.37) (1.37) 9.04
Year Ended July 31, 2000 10.34 (0.03) 0.47 0.44 --(e) (0.13) (0.13) 10.65
Period Ended July 31, 1999 (c) 9.90 (0.01) 0.91 0.90 (0.01) (0.45) (0.46) 10.34
- ---------------------------------------------------------------------------------------------------------------------------
CLASS Y
Year Ended July 31, 2003 $ 7.03 $ 0.09 $ 0.35 $ 0.44 $(0.09) $ -- $(0.09) $ 7.38
Year Ended July 31, 2002 9.15 0.06 (2.12) (2.06) (0.06) -- (0.06) 7.03
Year Ended July 31, 2001 10.74 0.07 (0.22) (0.15) (0.07) (1.37) (1.44) 9.15
Year Ended July 31, 2000 10.38 0.07 0.49 0.56 (0.07) (0.13) (0.20) 10.74
Period Ended July 31, 1999 (d) 10.00 0.04 0.83 0.87 (0.04) (0.45) (0.49) 10.38
- ---------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-------------------------------------------------------------
Ratio of
Net
Investment
Net Assets, Ratio of Income Ratio of
End of Expenses (Loss) to Expenses
Total Period to Average Average to Average Portfolio
Return* (000's) Net Assets Net Assets Net Assets** Turnover (a)
- -------------------------------------------------------------------------------------------------------
CLASS A
Year Ended July 31, 2003 6.07% $ 2,146 1.32% 1.05% 1.82% 77.62%
Year Ended July 31, 2002 (22.74%) 2,032 1.30% 0.48% 1.82% 48.18%
Year Ended July 31, 2001 (1.66%) 2,504 1.31% 0.49% 1.85% 79.05%
Year Ended July 31, 2000 5.21% 1,355 1.30% 0.30% 1.85% 120.42%
Period Ended July 31, 1999 (b) 7.81%(g) 178 1.60%(f) (0.01%)(f) 2.15%(f) 113.72%
- -------------------------------------------------------------------------------------------------------
CLASS B
Year Ended July 31, 2003 5.22% $ 1,291 2.07% 0.31% 2.07% 77.62%
Year Ended July 31, 2002 (23.34%) 1,427 2.05% (0.28%) 2.07% 48.18%
Year Ended July 31, 2001 (2.25%) 1,544 2.06% (0.26%) 2.10% 79.05%
Year Ended July 31, 2000 4.30% 1,018 2.06% (0.37%) 2.10% 120.42%
Period Ended July 31, 1999 (c) 8.94%(g) 472 2.44%(f) (0.71%)(f) 2.48%(f) 113.72%
- -------------------------------------------------------------------------------------------------------
CLASS Y
Year Ended July 31, 2003 6.32% $210,881 1.07% 1.30% 1.07% 77.62%
Year Ended July 31, 2002 (22.59%) 198,862 1.05% 0.71% 1.07% 48.18%
Year Ended July 31, 2001 (1.34%) 231,106 1.06% 0.76% 1.10% 79.05%
Year Ended July 31, 2000 5.44% 203,366 1.05% 0.66% 1.09% 120.42%
Period Ended July 31, 1999 (d) 8.56%(g) 75,464 1.28%(f) 0.40%(f) 1.32%(f) 113.72%
- -------------------------------------------------------------------------------------------------------
* Excludes sales charge for class A and contingent deferred sales charge for
class B.
** During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred the ratios would have been as indicated.
(a) Portfolio turnover is calculated on the basis of the Fund, as a whole,
without distinguishing between the classes of shares issued.
(b) Period from December 8, 1998 (commencement of operations) to July 31, 1999.
(c) Period from December 13, 1998 (commencement of operations) to July 31, 1999.
(d) Period from December 3, 1998 (commencement of operations) to July 31, 1999.
(e) Less than $0.01 per share.
(f) Annualized
(g) Not Annualized
See notes to financial statements.
87
PACIFIC CAPITAL FUNDS -- SMALL CAP FUND
Financial Highlights
(Selected data for a share of capital stock outstanding throughout the period)
Investment Activities Distributions
-------------------------------------- --------------------------------------------
Net Asset Net Realized Net Asset
Value, Net and Unrealized Total from Net Net Value,
Beginning Investment Gains (Losses) Investment Investment Realized Total End of
of Period Income (Loss) on Investments Activities Income Gains Distributions Period
- ------------------------------------------------------------------------------------------------------------------------------
CLASS A
Year Ended July 31, 2003 $12.15 $(0.01) $ 2.59 $ 2.58 $(0.02) $(1.47) $(1.49) $13.24
Year Ended July 31, 2002 13.47 0.03 (0.36) (0.33) (0.03) (0.96) (0.99) 12.15
Year Ended July 31, 2001 10.40 0.05 3.90 3.95 (0.08) (0.80) (0.88) 13.47
Year Ended July 31, 2000 10.66 0.02 0.10 0.12 (0.03) (0.35) (0.38) 10.40
Period Ended July 31, 1999 (b) 10.07 (0.01) 0.60 0.59 -- -- -- 10.66
- ------------------------------------------------------------------------------------------------------------------------------
CLASS B
Year Ended July 31, 2003 $11.92 $(0.08) $ 2.52 $ 2.44 $ -- $(1.47) $(1.47) $12.89
Year Ended July 31, 2002 13.29 (0.06) (0.35) (0.41) --(e) (0.96) (0.96) 11.92
Year Ended July 31, 2001 10.31 (0.03) 3.82 3.79 (0.01) (0.80) (0.81) 13.29
Year Ended July 31, 2000 10.61 (0.03) 0.08 0.05 --(e) (0.35) (0.35) 10.31
Period Ended July 31, 1999 (c) 9.78 (0.03) 0.86 0.83 -- -- -- 10.61
- ------------------------------------------------------------------------------------------------------------------------------
CLASS Y
Year Ended July 31, 2003 $12.18 $ 0.03 $ 2.60 $ 2.63 $(0.04) $(1.47) $(1.51) $13.30
Year Ended July 31, 2002 13.49 0.06 (0.35) (0.29) (0.06) (0.96) (1.02) 12.18
Year Ended July 31, 2001 10.42 0.08 3.88 3.96 (0.09) (0.80) (0.89) 13.49
Year Ended July 31, 2000 10.67 0.05 0.10 0.15 (0.05) (0.35) (0.40) 10.42
Period Ended July 31, 1999 (d) 10.00 -- 0.67 0.67 -- -- -- 10.67
- ------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-----------------------------------------------------------------
Ratio of Net
Ratio of Investment Ratio of
Net Assets, Expenses to Income (Loss) Expenses to
Total End of Period Average to Average Average Portfolio
Return* (000's) Net Assets Net Assets Net Assets** Turnover (a)
- ----------------------------------------------------------------------------------------------------------
CLASS A
Year Ended July 31, 2003 24.62% $ 1,595 1.60% (0.08%) 2.20% 105.27%
Year Ended July 31, 2002 (2.72%) 1,265 1.58% 0.20% 2.20% 81.67%
Year Ended July 31, 2001 40.28% 1,245 1.65% 0.31% 2.29% 90.31%
Year Ended July 31, 2000 1.51% 330 1.66% 0.30% 2.31% 98.73%
Period Ended July 31, 1999 (b) 5.91%(g) 93 1.84%(f) (0.26%)(f) 2.50%(f) 60.08%
- ----------------------------------------------------------------------------------------------------------
CLASS B
Year Ended July 31, 2003 23.74% $ 2,476 2.35% (0.83%) 2.45% 105.27%
Year Ended July 31, 2002 (3.38%) 2,013 2.33% (0.61%) 2.44% 81.67%
Year Ended July 31, 2001 38.92% 890 2.40% (0.46%) 2.54% 90.31%
Year Ended July 31, 2000 0.85% 214 2.41% (0.45%) 2.55% 98.73%
Period Ended July 31, 1999 (c) 8.56%(g) 82 2.59%(f) (1.00%)(f) 2.73%(f) 60.08%
- ----------------------------------------------------------------------------------------------------------
CLASS Y
Year Ended July 31, 2003 24.96% $85,520 1.35% 0.19% 1.45% 105.27%
Year Ended July 31, 2002 (2.47%) 68,001 1.33% 0.47% 1.45% 81.67%
Year Ended July 31, 2001 40.34% 53,558 1.40% 0.67% 1.54% 90.31%
Year Ended July 31, 2000 1.82% 36,962 1.41% 0.52% 1.55% 98.73%
Period Ended July 31, 1999 (d) 6.75%(g) 31,812 1.52%(f) 0.08%(f) 1.66%(f) 60.08%
- ----------------------------------------------------------------------------------------------------------
* Excludes sales charge for class A and contingent deferred sales charge for
class B.
** During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred the ratios would have been as indicated.
(a) Portfolio turnover is calculated on the basis of the Fund, as a whole,
without distinguishing between the classes of shares issued.
(b) Period from December 8, 1998 (commencement of operations) to July 31, 1999.
(c) Period from December 20, 1998 (commencement of operations) to July 31, 1999.
(d) Period from December 3, 1998 (commencement of operations) to July 31, 1999.
(e) Less than $0.01 per share.
(f) Annualized
(g) Not Annualized
See notes to financial statements.
88
PACIFIC CAPITAL FUNDS
Report of Independent Auditors
The Board of Trustees and Shareholders
Pacific Capital Funds
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments, of the Pacific Capital Funds (comprised
of Growth Stock Fund, Growth and Income Fund, New Asia Growth Fund, Diversified
Fixed Income Fund, Ultra Short Government Fund, Short Intermediate U.S.
Government Securities Fund, Tax-Free Securities Fund, Tax-Free Short
Intermediate Securities Fund, International Stock Fund, Value Fund and Small
Cap Fund) (the Funds) as of July 31, 2003, the related statements of operations
for the year then ended, the statements of changes in net assets for each of
the two years then ended and the financial highlights for each of the periods
indicated therein. 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.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audits to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements and financial highlights. Our
procedures included confirmation of securities owned as of July 31, 2003, by
correspondence with the custodian and brokers or by other appropriate auditing
procedures where replies from brokers were not received. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective portfolios constituting the Pacific Capital Funds at July 31,
2003, the results of their operations for the year then ended, the changes in
their net assets for each of the two years then ended and their financial
highlights for each of the periods indicated therein, in conformity with
accounting principles generally accepted in the United States.
/s/ Ernst & Young LLP
Columbus, Ohio
September 5, 2003
89
PACIFIC CAPITAL FUNDS
Trustees and Executive Officers of the Pacific Capital Funds (unaudited)
Interested Trustees. The table below sets forth certain information about each
of the Trustees of the Trust who are "interested persons" of the Trust as
defined by the 1940 Act.
Term of Number of
Office; Portfolios
Position(s) Term in Fund
Name, Address Held with Served in Principal Occupation(s) Complex Other Directorships
and Age Trust Office During Past 5 Years Overseen Held by Trustee
- ------------- ----------- ------------ --------------------------- ---------- -------------------------------------
Donna Tanoue* Trustee and Indefinite; Vice Chairman of Bank of 11 Member of the Boards of the Bank of
111 South King Street, Chairperson Since: 4/02 Hawaii--Investment Hawaii (since 2001), Bankoh
Honolulu, Hawaii 96813 Services Group (since Investment Services, Inc. (since
Age: 49 2002); Self-employed 2001), Hawaii Community
Consultant (2001-2002); Foundation (since 2002), Kaneohe
Chairman of Federal Ranch Co., Ltd. (since 2002), Hawaii
Deposit Insurance Corp. Theatre Center (since 2002).
(1998-2001)
Douglas Philpotts**, Trustee Indefinite; Retired. Formerly Director, 11 Trustee of Cash Assets Trust, U.S.
55 Dowsett Avenue Since: 10/92 Chairman of the Board and Treasuries Cash Assets Trust, Tax-
Honolulu, Hawaii 96817 President of Hawaiian Trust Free Cash Assets Trust, and Hawaiian
Age: 71 Co., Ltd. (until 1994), a Tax-Free Trust (registered investment
predecessor of The Asset companies) (since 1993); Trustee of
Management Group of The Strong Foundation (support of
Bank of Hawaii. programs for Hawaiian youth) (since
1974).
- --------
* Ms. Tanoue is an "interested person," as defined by the 1940 Act, because
of her employment with The Asset Management Group of Bank of Hawaii, the
investment adviser to the Trust.
** Mr. Philpotts may be deemed to be an "interested person," as defined by the
1940 Act, because of his ownership, as trustee of a revocable trust, of
common stock of Bank of Hawaii.
90
PACIFIC CAPITAL FUNDS
Independent Trustees. The table below sets forth certain information about the
Trustees of the Trust who are not "interested persons" of the Trust as defined
in the 1940 Act.
Term of Number of
Office; Portfolios
Position(s) Term in Fund
Name, Address Held with Served in Principal Occupation(s) Complex Other Directorships
and Age Trust Office During Past 5 Years Overseen Held by Trustee
- ------------- ----------- ------------ --------------------------- ---------- --------------------------------------
Richard W. Gushman, II Trustee Indefinite; President and Chief 11 Trustee of Cash Assets Trust, Tax-
700 Bishop Street, Since: 10/92 Executive Officer of Free Cash Assets Trust, U.S.
Suite 200 OKOA, Inc., (commercial Treasuries Cash Assets Trust, and
Honolulu, Hawaii 96813 real estate) (since 1972); Hawaiian Tax-Free Trust (registered
Age: 57 Managing Partner of investment companies) (since 1993);
Summit Financial Director of Oceanic Cablevision, Inc.
Resources (financial (since 1998), Servco Pacific, Inc.
services company); Trustee (distribution of automotive and other
(since 2000) and Chairman products), Outrigger Hotels, Inc.
of the Board (since 2002) (since 2000), and American Savings
of the Estate of James Bank (2002); Trustee of Hawaii
Campbell (real estate Pacific University (since 1997); Board
holdings)*** member of Aloha United Way, Boys
and Girls Club of Honolulu, and other
charitable and civic organizations.
Stanley W. Hong Trustee Indefinite; President of Waste 11 Trustee of Cash Assets Trust, Tax-
4976 Poola Street Since: 10/92 Management of Hawaii, Free Cash Assets Trust, U.S.
Honolulu, Hawaii 96821 Inc. (landfill management) Treasuries Cash Assets Trust, and
Age: 67 (since 2002); President and Hawaiian Tax-Free Trust (registered
Chief Executive Officer of investment companies) (since 1993);
The Chamber of Commerce Trustee of The King Williams Charles
of Hawaii (1996-2002) Lunalilo Trust Estate (since 2001);
Board member of several other
corporate and community
organizations.
Russell K. Okata Trustee Indefinite; Executive Director of the 11 Trustee of Cash Assets Trust, Tax-
1015 Wilder Avenue, #203 Since: 10/92 Hawaii Government Free Cash Assets Trust, U.S.
Honolulu, Hawaii 96822 Employees Association Treasuries Cash Assets Trust, and
Age: 59 (since 1981) Hawaiian Tax-Free Trust (registered
investment companies) (since 1993);
Vice President of the Hawaii State
AFL-CIO (since 1972) and the
American Federation of State, County
& Municipal Employees, AFL-CIO
(since 1981); Chairman of the Royal
State Group (since 1988); Member of
the Boards of Blood Bank of Hawaii,
Bishop Museum, Public Schools of
Hawaii Foundation, and other
community organizations.
Oswald K. Stender Trustee Indefinite; Retired 11 Trustee of Cash Assets Trust, Tax-
1056 Maunawili Since: 10/92 Free Cash Assets Trust, U.S.
Kailua, Hawaii 96734 Treasuries Cash Assets Trust and
Age: 71 Hawaiian Tax-Free Trust (registered
investment companies) (since 1993);
Director of Hawaiian Electric
Industries, Inc., a public utility
holding company (since 1993); former
Trustee of the Bernice Pauahi Bishop
Estate (operation of school for
children of Hawaiian ancestry) (1990-
1999); Board member of various
housing and real estate associations
and community organizations.
91
- --------
*** The Estate of James Campbell has entered into a credit agreement with a
group of commercial banks, one of which is Bank of Hawaii, for which BNP
Paribas acts as administrative agent. The agreement provides for a variety
of term and revolving loans with a total lending commitment of $430
million, of which Bank of Hawaii's commitment is approximately $45 million,
and is for a period of two years with certain rights of extension. The
Trustees of the Trust (other than Mr. Gushman) who are not "interested
persons" of the Trust as defined in the 1940 Act have determined that these
are not material relationships that might impair Mr. Gushman's
independence, and that he should continue to be classified as a
"disinterested" Trustee of the Trust pursuant to the 1940 Act.
The Statement of Additional Information includes additional information about
the Trustees of the Trust and is available, without charge, upon request, by
calling (800) 258-9232.
92
PACIFIC CAPITAL FUNDS
Executive Officers. The table below sets forth certain information about each
of the Trust's executive officers.
Term of Office
Position(s) Held and Length of
Name, Address and Age with Trust Time Served Principal Occupation(s) During Past 5 Years
- --------------------- ---------------- -------------- ----------------------------------------------------------
William P. Henry, Jr. President Indefinite; Executive Vice President of Bank of Hawaii (2003);
130 Merchant Street Since 12/02 President of Trinity Solutions, Inc. and advisor to CEO of
Suite 240 Bank of Hawaii (2001-2002); Senior Vice President,
Honolulu, Hawaii 96813 Strategic Business Development of Jubilee Tech
Age: 39 International (2000); Senior Manager of Marakon
Associates (1991-1998).
Irimga McKay Executive Indefinite; Executive Vice President, Client Services of BISYS Fund
3435 Stelzer Road Vice President Since: 12/02 Services (since 1988).
Columbus, Ohio 43219
Age: 43
Andrew Spencer Executive Vice Indefinite; Vice President and Manager of Bank of Hawaii--
130 Merchant Street President Since: 6/01 Investment Products Division (since 2001); Assistant Vice
Suite 240 President of M&T Bank (1998-2001); Manager of Xerox
Honolulu, Hawaii 96813 Corporation--Product Development (1988-1998).
Age: 38
Jenna Alexander Vice President Indefinite; Product Manager, Investment Products Division of Bank of
130 Merchant Street Since: 3/03 Hawaii (since 2000). Marketing Director, Megaxess, Inc.
Suite 240 (1998-2000)
Honolulu, Hawaii 96813
Age: 27
Alaina Metz Vice President Indefinite; Vice President, Regulatory Services of BISYS Fund
3435 Stelzer Road Since: 9/96 Services--Blue Sky Compliance (since 1995).
Columbus, Ohio 43219
Age: 36
Mark Sichley Vice President Indefinite; Vice President, Client Services of BISYS Fund Services
3435 Stelzer Road Since: 6/02 (since 1987).
Columbus, Ohio 43219
Age: 45
Nadeem Yousaf Treasurer Indefinite; Vice President, Financial Services of BISYS Fund Services
3435 Stelzer Road Since: 6/00 (since 1999); Director of Canadian Operations, Investors
Columbus, Ohio 43219 Bank and Trust (1997-1999); Assistant Manager--
Age: 34 Investment Management Services Group of
PricewaterhouseCoopers LLP (1994-1997).
93
PACIFIC CAPITAL FUNDS
Special Meeting of Shareholders (unaudited)
A Special Meeting of shareholders of the Pacific Capital Growth and Income Fund
(the "Fund") was held on May 8, 2003 at 60 State Street, Suite 1300, Boston,
Massachusetts 02109, for the purpose of seeking approval to change the
fundamental investment objectives of the Fund to make long term capital
appreciation the primary objective and current income the secondary objective
(the "Proposal"). As of the record date, there were 14,998,681.950 shares of
the Fund outstanding and entitled to vote at the Special Meeting. A majority of
the outstanding voting shares of the Fund approved the Proposal by the
following votes:
FOR AGAINST ABSTAIN
12,078,761.069 shares 60,671.128 shares 17,549.249 shares
94
INVESTMENT ADVISER
The Asset Management Group of Bank of Hawaii
111 South King Street
Honolulu, HI 96813
SUB-ADVISERS
Nicholas-Applegate Capital Management
600 West Broadway
San Diego, CA 92102
First State Investments
3 Exchange Square
8 Connaught Place Central
Hong Kong
DISTRIBUTOR
BISYS Fund Services
3435 Stelzer Road
Columbus, OH 43219
LEGAL COUNSEL
Paul, Hastings,Janofsky & Walker LLP
515 South Flower Street
Los Angeles, CA 90071
INDEPENDENT AUDITORS
Ernst & Young LLP
41 South High Street, Suite 1100
Columbus, OH 43215
ADMINISTRATOR AND TRANSFER AGENT
BISYS Fund Services Ohio, Inc.
3435 Stelzer Road
Columbus, OH 43219
[GRAPHIC]Pacific Capital Funds
MANAGED BY THE ASSET MANAGEMENT GROUP OF [GRAPHIC] Bank of Hawaii
The Pacific Capital Funds are distributed by BISYS Fund Services. This document
must be preceded or accompanied by a current prospectus for the Pacific Capital
Funds, which you should read carefully before you invest or send money.
PCR-0006 9/03
Item 2. Code of Ethics.
Disclose whether, as of the end of the period covered by the report, the
registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar functions,
regardless of whether these individuals are employed by the registrant or a
third party. If the registrant has not adopted such a code of ethics,
explain why it has not done so.
The registrant has adopted a code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions. This code of ethics is included as Exhibit 10 (a)(1).
Item 3. Audit Committee Financial Expert.
(a) (1) Disclose that the registrant's board of directors has
determined that the registrant either:
(i) Has at least one audit committee financial expert serving
on its audit committee; or
(ii) Does not have an audit committee financial expert serving
on its audit committee.
(2) If the registrant provides the disclosure required by
paragraph (a)(1)(i) of this Item, it must disclose the name of the
audit committee financial expert and whether that person is
"independent." In order to be considered "independent" for
purposes of this Item, a member of an audit committee may not,
other than in his or her capacity as a member of the audit
committee, the board of directors, or any other board committee:
(i) Accept directly or indirectly any consulting, advisory, or
other compensatory fee from the issuer; or
(ii) Be an "interested person" of the investment company as
defined in Section 2(a)(19) of the Act (15 U.S.C. 80a-
2(a)(19)).
(3) If the registrant provides the disclosure required by
paragraph (a)(1)(ii) of this Item, it must explain why it does not
have an audit committee financial expert.
The Registrant's Board of Trustees has determined that no member of the Board's
audit committee qualifies as an audit committee financial expert ("ACFE"). After
evaluating the matter, the Board concluded that it was not necessary to add a
Trustee to the Board who qualified as an ACFE, as the business experience of the
current independent members of the Board was adequate to exercise their
oversight responsibilities.
Item 4. Principal Accountant Fees and Services.
(a) Disclose, under the caption Audit Fees, the aggregate fees billed
for each of the last two fiscal years for professional services rendered by the
principal accountant for the audit of the registrant's annual financial
statements or services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements for those fiscal
years.
(b) Disclose, under the caption Audit-Related Fees, the aggregate fees
billed in each of the last two fiscal years for assurance and related services
by the principal accountant that are reasonably related to the performance of
the audit of the registrant's financial statements and are not reported under
paragraph (a) of this Item. Registrants shall describe the nature of the
services comprising the fees disclosed under this category.
(c) Disclose, under the caption Tax Fees, the aggregate fees billed in
each of the last two fiscal years for professional services rendered by the
principal accountant for tax compliance, tax advice, and tax planning.
Registrants shall describe the nature of the services comprising the fees
disclosed under this category.
(d) Disclose, under the caption All Other Fees, the aggregate fees
billed in each of the last two fiscal years for products and services provided
by the principal accountant, other than the services reported in paragraphs (a)
through (c) of this Item. Registrants shall describe the nature of the services
comprising the fees disclosed under this category.
(e) (1) Disclose the audit committee's pre-approval policies and
procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
(2) Disclose the percentage of services described in each of
paragraphs (b) through (d) of this Item that were approved by the audit
committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) If greater than 50 percent, disclose the percentage of hours
expended on the principal accountant's engagement to audit the registrant's
financial statements for the most recent fiscal year that were attributed to
work performed by persons other than the principal accountant's full-time,
permanent employees.
(g) Disclose the aggregate non-audit fees billed by the registrant's
accountant for services rendered to the registrant, and rendered to the
registrant's investment adviser (not including any sub-adviser whose role is
primarily portfolio management and is subcontracted with or overseen by another
investment adviser), and any entity controlling, controlled by, or under common
control with the adviser that provides ongoing services to the registrant for
each of the last two fiscal years of the registrant.
(h) Disclose whether the registrant's audit committee of the board of
directors has considered whether the provision of nonaudit services that were
rendered to the registrant's investment adviser (not including any subadviser
whose role is primarily
portfolio management and is subcontracted with or overseen by another investment
adviser), and any entity controlling, controlled by, or under common control
with the investment adviser that provides ongoing services to the registrant
that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of
Regulation S-X is compatible with maintaining the principal accountant's
independence.
Only effective for annual reports with periods ending on or after December 15,
2003.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. [Reserved]
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
A closed-end management investment company that is filing an annual
report on this Form N-CSR must, unless it invests exclusively in non-voting
securities, describe the policies and procedures that it uses to determine how
to vote proxies relating to portfolio securities, including the procedures that
the company uses when a vote presents a conflict between the interests of its
shareholders, on the one hand, and those of the company's investment adviser;
principal underwriter; or any affiliated person (as defined in Section 2(a)(3)
of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(3)) and the rules
thereunder) of the company, its investment adviser, or its principal
underwriter, on the other. Include any policies and procedures of the company's
investment adviser, or any other third party, that the company uses, or that are
used on the company's behalf, to determine how to vote proxies relating to
portfolio securities. Not applicable.
Item 8. [Reserved]
Item 9. Controls and Procedures.
(a) Disclose the conclusions of the registrant's principal executive
and principal financial officers, or persons performing similar functions,
regarding the effectiveness of the registrant's disclosure controls and
procedures (as defined in Rule 30a-3(c) under the Act (17 CFR 270.30a-3(c))) as
of a date within 90 days of the filing date of the report that includes the
disclosure required by this paragraph, based on the evaluation of these controls
and procedures required by Rule 30a-3(b) under the Act (17 CFR 270.30a-3(b)) and
Rules 13a-15(b) or 15d-15(b) under the Exchange Act (17 CFR 240.13a-15(b) or
240.15d-15(b)).
In the opinion of the principal executive officer and principal financial
officer, based on their evaluation, the registrant's disclosure controls and
procedures are adequately designed and are operating effectively to ensure (i)
that material information relating to the registrant, including its consolidated
subsidiaries, is made known to them by others within those entities,
particularly during the period in which this report is being prepared; and (ii)
that information required to be disclosed by the registrant on Form N-CSR is
recorded, processed, summarized and reported within the time periods specified
in the Securities and Exchange Commission's rules and forms.
(b) Disclose any change in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that
occurred during the registrant's last fiscal half-year (the registrant's second
fiscal half-year in the case of an annual report) that has materially affected,
or is reasonably likely to materially affect, the registrant's internal control
over financial reporting.
There were no changes in the registrant's internal control over financial
reporting that occurred during the registrant's most recent fiscal half-year
(the registrant's second fiscal half-year in the case of an annual report) that
have materially affected or are reasonably likely to materially affect, the
registrant's internal control over financial reporting.
Item 10. Exhibits.
(a) File the exhibits listed below as part of this Form. Letter or
number the exhibits in the sequence indicated.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of
the disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit.
The code of ethics that is the subject of the disclosure required by Item 2 is
attached hereto.
(a)(2) A separate certification for each principal executive officer
and principal financial officer of the registrant as required by Rule 30a-2
under the Act (17 CFR 270.30a-2). Certifications pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 are attached hereto.
(b) A separate or combined certification for each principal executive
officer and principal officer of the registrant as required by Rule 30a-2(b)
under the Act of 1940. Certifications pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 are attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Pacific Capital Funds
By (Signature and Title)* /s/ Nadeem Yousaf
-------------------------------------
Nadeem Yousaf, Treasurer
Date October 1, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ William P. Henry, Jr.
-------------------------------------
William P. Henry, Jr., President
Date October 1, 2003
By (Signature and Title)* /s/ Nadeem Yousaf
-------------------------------------
Nadeem Yousaf, Treasurer
Date October 1, 2003
* Print the name and title of each signing officer under his or her signature.