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 811-05059
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HighMark Funds
--------------------------------------------------
(Exact name of registrant as specified in charter)
350 California Street, Suite 1600
San Francisco, CA 94104
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(Address of principal executive offices) (Zip code)
John M. Loder, Esq.
Ropes & Gray LLP
Three Embarcadero Center
San Francisco, CA 94111
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(Name and address of agent for service)
registrant's telephone number, including area code: 1-800-433-6884
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Date of fiscal year end: July 31, 2010
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Date of reporting period: July 31, 2010
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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, 100 F Street, NE,
Washington, DC 20549. The OMB has reviewed this collection of information under
the clearance requirements of 44 U.S.C. ss. 3507.
Item 1. Reports to Stockholders.
The Report to Shareholders is attached herewith.
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JULY 31, 2010
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HIGHMARK
The smarter approach to investing.
EQUITY
ASSET ALLOCATION
FIXED-INCOME
ANNUAL
--------------------------------------------------------
report
[GRAPHIC OMITTED]
[HIGHMARK FUNDS LOGO](R)
TABLE OF CONTENTS
management's discussion of fund performance
balanced fund .......................................................... 2
cognitive value fund ................................................... 4
core equity fund ....................................................... 6
enhanced growth fund ................................................... 8
equity income fund ..................................................... 10
fundamental equity fund ................................................ 12
geneva mid cap growth fund ............................................. 14
(formerly geneva growth fund)
geneva small cap growth fund ........................................... 16
international opportunities fund ....................................... 18
large cap growth fund .................................................. 20
large cap value fund ................................................... 22
nyse arca tech 100 index fund .......................................... 24
small cap advantage fund ............................................... 26
small cap value fund ................................................... 28
value momentum fund .................................................... 30
capital growth allocation fund ......................................... 32
diversified equity allocation fund ..................................... 34
growth & income allocation fund ........................................ 36
income plus allocation fund ............................................ 38
bond fund .............................................................. 40
california intermediate tax-free bond fund ............................. 42
national intermediate tax-free bond fund ............................... 44
short term bond fund ................................................... 46
wisconsin tax-exempt fund .............................................. 48
disclosure of fund expenses ............................................... 50
schedules of investments .................................................. 53
statements of assets and liabilities ...................................... 122
statements of operations .................................................. 134
statements of changes in net assets ....................................... 140
financial highlights ...................................................... 162
notes to financial statements ............................................. 174
report of independent registered public accounting firm ................... 189
notice to shareholders .................................................... 190
trustees and officers ..................................................... 191
board approval of the existing advisory and sub advisory agreements ....... 193
fund information .......................................................... 198
service providers & board of trustees ..................................... 204
This report and the financial statements contained herein are submitted for the
general information of HighMark Funds' shareholders. This report is not
authorized for distribution to prospective investors unless preceded or
accompanied by an effective prospectus.
Shares of HighMark Funds are not deposits or obligations of, or guaranteed by,
Union Bank, N.A. or any of its subsidiaries or affiliates. Such shares are also
not federally insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board, or any other agency. Investments in shares of mutual funds
involve risk, including the possible loss of principal. HighMark Funds
Distributors, Inc. serves as Distributor for HighMark Funds and is not
affiliated with the Adviser of HighMark Funds, HighMark Capital Management,
Inc., or with Union Bank, N.A.
TOP TEN HOLDINGS
% OF
COMPANY* PORTFOLIO
DANAHER 3.0%
PRAXAIR 2.6
CISCO SYSTEMS 1.9
JPMORGAN CHASE 1.8
GOLDMAN SACHS GROUP 1.8
WELLS FARGO 1.8
EXXON MOBIL 1.8
SUNCOR ENERGY 1.7
OCCIDENTAL PETROLEUM 1.7
GOOGLE, CL A 1.7
FUND SECTORS
% OF
SECTOR PORTFOLIO
INFORMATION TECHNOLOGY 14.6%
ENERGY 12.5
FINANCIALS 11.2
INDUSTRIAL 9.4
CONSUMER STAPLES 9.0
CONSUMER DISCRETIONARY 8.1
REPURCHASE AGREEMENT 7.4
HEALTH CARE 6.7
MATERIALS 5.2
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS 4.9
MORTGAGE-BACKED SECURITIES 4.6
UTILITIES 3.0
U.S. TREASURY OBLIGATION 1.3
ASSET-BACKED SECURITIES 0.9
TELECOMMUNICATION SERVICES 0.6
REGISTERED INVESTMENT COMPANY 0.6
* EXCLUDES SHORT-TERM SECURITIES.
BALANCED FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2010, HighMark Balanced Fund (the "Fund")
produced a total return of 12.60% (Fiduciary Shares). In comparison, the Fund's
benchmarks, the unmanaged S&P 500 Index, the Barclays Capital U.S. Aggregate
Bond Index and the unmanaged blended index of 60% S&P 500 Index and 40% Barclays
Capital U.S. Aggregate Bond Index, returned 13.84%, 8.91% and 11.87%,
respectively, for the same period. The Fund outperformed its blended benchmark
of 60% S&P 500 Index and 40% Barclays Capital U.S. Aggregate Bond Index overall
for the reporting period.
FACTORS AFFECTING PERFORMANCE
The equity market stabilization and recovery that began March 9, 2009 continued
during the Fund's reporting period, although volatility increased and growth
slowed in the latter half of the reporting period. The fiscal and monetary
stimulus applied during the economic downturn and coordinated action by central
banks took time to cycle through U.S. and world economies. Stock market
performance reflected this recovery in economic activity and resulted in
broad-based participation in the markets' advance during the reporting period.
However, unemployment remained stubbornly high, which called into question the
sustainability of improvements in consumer spending. Also, the expiration of the
new home buyer's tax credit exposed the fragility of the recovery in the housing
market. These factors, coupled with the euro zone sovereign debt crisis that
began in April, caused significant slowdowns in domestic and global markets.
The utilities sector performed well during the reporting period, as did the
consumer discretionary sector, with its greater exposure to a global economic
recovery. Apple Inc. and Citrix Systems Inc. in the technology sector were top
contributors to the Fund's performance. Questar Corp. was a top performer in the
utilities sector. Starwood Hotels & Resorts Worldwide Inc. and Las Vegas Sands
Corp. were top performers in the consumer discretionary sector.
However, the consumer staples sector of the portfolio was negatively impacted by
one of the Fund's larger holdings, CVS Caremark, and the management and
operational issues the company experienced. Also, the financial sector
contributed negatively to performance, most notably Goldman Sachs, which was
involved with a lawsuit brought by the Securities and Exchange Commission.
Credit quality was a key factor for much of the Fund's fixed income performance,
as spreads narrowed and lower quality securities outperformed higher quality
securities during the reporting period. This outperformance was due mainly to
the recovery in the corporate bond sector, which continued to rebound from
historic lows earlier in the calendar year.
The Fund is double in its weighting relative to its benchmark in lower quality
corporate bonds and underweighted in higher quality Treasury bonds. The Fund's
overweight in corporate bonds relative to its benchmark is the primary reason
for its fixed income outperformance during the reporting period.
2 HIGHMARK(R) FUNDS
HIGHMARK BALANCED FUND INVESTMENT OBJECTIVE
HIGHMARK BALANCED FUND SEEKS CAPITAL APPRECIATION AND INCOME, WITH A SECONDARY
INVESTMENT OBJECTIVE OF CONSERVATION OF CAPITAL.
[PHOTO OF DAVID GOERZ]
PORTFOLIO MANAGER
DAVID GOERZ (1)
HIGHMARK CAPITAL MANAGEMENT, INC.
[PHOTO OF KEN WEMER]
PORTFOLIO MANAGER
KEN WEMER (1)
HIGHMARK CAPITAL MANAGEMENT, INC.
[PHOTO OF JACK MONTGOMERY]
PORTFOLIO MANAGER
JACK MONTGOMERY (1)
HIGHMARK CAPITAL MANAGEMENT, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK BALANCED
FUND VERSUS THE S&P 500 INDEX, THE BARCLAYS CAPITAL U.S. AGGREGATE BOND INDEX,
AN UNMANAGED BLENDED INDEX OF 60% S&P 500 INDEX AND 40% BARCLAYS CAPITAL U.S.
AGGREGATE BOND INDEX AND THE MORNINGSTAR MODERATE ALLOCATION CATEGORY.
[LINE GRAPH]
60/40 Hybrid Barclays Capital
HighMark Balanced Fund HighMark Balanced Fund Morningstar Moderate of the following U.S. Aggregate
Fiduciary Shares Class A Shares Allocation Category two indices: Bond Index++ S&P 500 Index++
---------------------- ---------------------- -------------------- ---------------- ---------------- ---------------
7/00 $10,000 $ 9,450 $10,000 $10,000 $10,000 $10,000
7/01 $ 9,415 $ 8,869 $ 9,913 $ 9,606 $11,268 $ 8,567
7/02 $ 8,074 $ 7,586 $ 8,718 $ 8,463 $12,116 $ 6,543
7/03 $ 8,664 $ 8,128 $ 9,382 $ 9,236 $12,773 $ 7,239
7/04 $ 9,358 $ 8,751 $10,231 $10,149 $13,391 $ 8,192
7/05 $10,229 $ 9,544 $11,470 $11,202 $14,033 $ 9,343
7/06 $10,615 $ 9,879 $12,035 $11,634 $14,238 $ 9,846
7/07 $11,832 $10,980 $13,515 $13,017 $15,029 $11,434
7/08 $11,061 $10,245 $12,682 $12,472 $15,954 $10,166
7/09 $10,149 $ 9,379 $11,188 $11,370 $17,206 $ 8,137
7/10 $11,428 $10,524 $12,518 $12,720 $18,739 $ 9,263
++ Indexes are unmanaged and do not incur fees, expenses or other costs.
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ANNUALIZED ANNUALIZED ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR 5 YEAR 10 YEAR SINCE EXPENSE EXPENSE
RETURN RETURN RETURN RETURN INCEPTION RATIO++ RATIO++
- ----------------------------------------------------------------------------------------------------------------------------
Fiduciary Shares 12.60% -1.15% 2.24% 1.34% 6.25% 1.56% 0.99%
- ----------------------------------------------------------------------------------------------------------------------------
Class A Shares 12.24% -1.40% 1.98% 1.09% 6.04%+ 1.81% 1.24%
- ----------------------------------------------------------------------------------------------------------------------------
Class A Shares w/load* 6.04% -3.24% 0.84% 0.51% 5.73%+ 1.81% 1.24%
- ----------------------------------------------------------------------------------------------------------------------------
Class B Shares 11.62% -1.96% 1.38% 0.46% 5.65%+ 2.31% 1.84%
- ----------------------------------------------------------------------------------------------------------------------------
Class B Shares w/load** 6.62% -2.85% 1.03% 0.46% 5.65%+ 2.31% 1.84%
- ----------------------------------------------------------------------------------------------------------------------------
Class C Shares 11.61% -2.00% 1.37% 0.45% 5.73%+ 2.31% 1.84%
- ----------------------------------------------------------------------------------------------------------------------------
Class C Shares w/load*** 10.61% -2.00% 1.37% 0.45% 5.73%+ 2.31% 1.84%
- ----------------------------------------------------------------------------------------------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. RETURNS SHOWN IN THE GRAPH
AND THE TABLE DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY
ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. THE RETURNS FOR CERTAIN
PERIODS REFLECT FEE WAIVERS AND/OR REIMBURSEMENTS IN EFFECT FOR THAT PERIOD;
ABSENT FEE WAIVERS AND REIMBURSEMENTS, PERFORMANCE WOULD HAVE BEEN LOWER.
PERFORMANCE PRESENTED FROM FEBRUARY 1, 1991 (COMMENCEMENT OF INVESTMENT
OPERATIONS OF FIDUCIARY SHARES) TO APRIL 25, 1997 AND NOVEMBER 13, 1992
(COMMENCEMENT OF CLASS A SHARES) TO APRIL 25, 1997, REFLECTS THE PERFORMANCE OF
STEPSTONE BALANCED FUND, THE PREDECESSOR TO HIGHMARK BALANCED FUND. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, SO SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. FOR MONTH-END PERFORMANCE DATA
PLEASE CALL 1-800-433-6884 OR VISIT OUR WEBSITE AT WWW.HIGHMARKFUNDS.COM.
+ The performance presented links the performance of Fiduciary Shares from
February 1, 1991 with the performance of Class A Shares on November 13,
1992, Class B Shares on February 2, 1998 and Class C Shares on November
30, 1999. Fiduciary Share performance has been adjusted for the maximum
sales charge/contingent deferred sales charge ("CDSC") applicable to Class
A, Class B and Class C Shares, as applicable, but does not reflect the
higher Rule 12b-1 fees and expenses applicable to these Classes. With
those adjustments, performance would be lower than that shown.
++ Per prospectus. The expense ratios presented above may vary from the
expense ratios presented in other sections of this report that are based
on expenses incurred during the period covered by this report. The Fund's
Adviser has contractually agreed to waive fees and reimburse expenses in
order to keep total operating expenses for all share classes from
exceeding the net expense ratios listed in the prospectus, for the period
beginning December 1, 2009 and ending on November 30, 2010. The Adviser
may recoup from the Fund any of the fees and expenses it has waived and/or
reimbursed until the end of the third fiscal year after the end of the
fiscal year in which such waiver and/or reimbursement occurs, subject to
certain limitations. This recoupment could reduce the Fund's future total
return.
* Reflects 5.50% front-end sales charge.
** Reflects maximum CDSC of 5.00%.
*** Reflects maximum CDSC of 1.00%.
(1) Mr. Goerz is responsible for asset allocation decisions; Mr. Wemer manages
the equity portion of the Fund's portfolio; Mr. Montgomery is responsible
for the management of the fixed income portion of the Fund's portfolio.
HIGHMARK(R) FUNDS 3
TOP TEN HOLDINGS
% OF
COMPANY* PORTFOLIO
HEALTHSPRING 1.2%
UGI 1.2
UNISOURCE ENERGY 1.2
HUBBELL, CL B 1.2
TIMKEN 1.1
STANDEX INTERNATIONAL 1.1
APPLIED INDUSTRIAL TECHNOLIGIES 1.1
NACCO INDUSTRIES, CL A 1.0
MANTECH INTERNATIONAL, CL A 1.0
M&F WORLDWIDE 1.0
FUND SECTORS
% OF
SECTOR PORTFOLIO
FINANCIALS 21.3%
INDUSTRIAL 20.0
CONSUMER DISCRETIONARY 13.8
INFORMATION TECHNOLOGY 13.5
MATERIALS 6.7
HEALTH CARE 6.5
ENERGY 5.6
UTILITIES 4.7
CONSUMER STAPLES 4.0
REPURCHASE AGREEMENT 2.0
REGISTERED INVESTMENT COMPANIES 1.2
TELECOMMUNICATION SERVICES 0.7
* EXCLUDES SHORT-TERM SECURITIES.
COGNITIVE VALUE FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2010, HighMark Cognitive Value Fund (the
"Fund") produced a total return of 20.08% (Class M Shares). In comparison, the
Fund's benchmark, the unmanaged S&P Small Cap 600/Citigroup Value Index,
returned 18.31% for the same period.
FACTORS AFFECTING PERFORMANCE
Unlike late 2008 and early 2009, when extreme market dislocations caused several
of the Fund's behavioral finance investment factors to underperform, market
conditions were more typical for most of the fiscal year. In the second half of
the reporting period, micro-cap stocks also experienced relatively better
returns. These two developments positively contributed to the Fund's
performance.
For the Fund's behavioral finance investment strategy to succeed, we believe
investors must behave in an irrational but predictable manner. During the market
meltdown and subsequent sharp rally in late 2008 and the first half of 2009,
investors were irrational but not easily predictable, as the extreme market
events tended to break them out of their normal routines. Although this effect
was temporary, the magnitude of the market swings, combined with substantial
economic disruption, kept investors off balance for longer than usual.
During the first two months covered by this report, investor irrationality was
often unpredictable, diminishing the usefulness of the Fund's Behavioral Ranking
Model (BRM). Over the next three months, predictability began to return, but it
took a while before this translated into positive investment performance. During
this time, the micro-cap stock portion of the Fund's portfolio lagged the
overall stock market, largely due to the perception that tight lending
conditions would disproportionately harm the smaller companies that tend to be
more dependent on external financing for their operations.
During the first few months of 2010, the Fund experienced a combination of
performance results, with the only strong positive BRM result coming in
February. Micro-cap stocks were also lackluster during this period. In March,
micro-cap stocks finally began to outperform. From March to July 2010, micro-cap
stocks beat the S&P Small Cap 600/Citigroup Value Index by an average of 2% per
month. The BRM also started to contribute positively to the Fund's results as
investors' irrational behavior appeared to have returned to its more typical,
reasonably predictable state. As a result, the Fund was able to outperform its
benchmark for the full fiscal year.
4 HIGHMARK(R) FUNDS
HIGHMARK COGNITIVE VALUE FUND INVESTMENT OBJECTIVE
HIGHMARK COGNITIVE VALUE FUND SEEKS LONG-TERM CAPITAL APPRECIATION.
[PHOTO OF THOMAS MUDGE]
LEAD PORTFOLIO MANAGER
THOMAS MUDGE
BAILARD, INC.
[PHOTO OF GEORGE Y. SOKOLOFF]
PORTFOLIO MANAGER
GEORGE Y. SOKOLOFF
BAILARD, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK COGNITIVE
VALUE FUND VERSUS THE S&P SMALLCAP 600/CITIGROUP VALUE INDEX AND THE MORNINGSTAR
SMALL VALUE CATEGORY.
[LINE GRAPH]
HighMark HighMark S&P
Cognitive Cognitive SmallCap
Value Fund Value Fund 600/Citigroup Morningstar
Class M Class A Value Small Value
Shares Shares+ Index++ Category
---------- ---------- ------------- -----------
5/30/01 $10,000 $ 9,446 $10,000 $10,000
7/01 $10,070 $ 9,505 $10,343 $10,567
7/02 $ 9,528 $ 8,950 $ 9,428 $ 9,267
7/03 $10,412 $ 9,734 $10,879 $10,519
7/04 $12,358 $11,497 $13,201 $11,464
7/05 $15,317 $14,180 $16,614 $12,780
7/06 $16,552 $15,273 $17,763 $13,256
7/07 $18,535 $17,034 $20,066 $14,752
7/08 $16,499 $15,123 $17,833 $13,019
7/09 $12,866 $11,735 $14,546 $10,713
7/10 $15,450 $14,042 $17,209 $12,990
++ Indexes are unmanaged and do not incur fees, expenses or other costs.
- --------------------------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR 5 YEAR SINCE EXPENSE EXPENSE
RETURN RETURN RETURN INCEPTION RATIO++ RATIO++
- --------------------------------------------------------------------------------------------------------------
Fiduciary Shares 20.06% -5.92% 0.13%+ 4.72%+ 1.35% 1.23%
- --------------------------------------------------------------------------------------------------------------
Class A Shares 19.60% -6.25% -0.21%+ 4.41%+ 1.60% 1.48%
- --------------------------------------------------------------------------------------------------------------
Class A Shares w/load* 13.01% -7.99% -1.34%+ 3.76%+ 1.60% 1.48%
- --------------------------------------------------------------------------------------------------------------
Class C Shares 18.92% -6.85% -0.84%+ 3.80%+ 2.10% 2.08%
- --------------------------------------------------------------------------------------------------------------
Class C Shares w/load** 17.92% -6.85% -0.84%+ 3.80%+ 2.10% 2.08%
- --------------------------------------------------------------------------------------------------------------
Class M Shares 20.08% -5.89% 0.17% 4.86% 1.10% 1.08%
- --------------------------------------------------------------------------------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. RETURNS SHOWN IN THE GRAPH
AND THE TABLE DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY
ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. THE RETURNS FOR CERTAIN
PERIODS REFLECT FEE WAIVERS AND/OR REIMBURSEMENTS IN EFFECT FOR THAT PERIOD;
ABSENT FEE WAIVERS AND REIMBURSEMENTS, PERFORMANCE WOULD HAVE BEEN LOWER.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, SO SHARES, WHEN REDEEMED,
MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. FOR MONTH-END PERFORMANCE
DATA PLEASE CALL 1-800-433-6884 OR VISIT OUR WEBSITE AT WWW.HIGHMARKFUNDS.COM.
+ The performance presented links the performance of Class M Shares from May
30, 2001 with the performance of Class A and Class C Shares on April 3,
2006 and Fiduciary Shares on July 3, 2006. Class M Share performance has
been adjusted for the maximum sales charge/contingent deferred sales
charge ("CDSC") applicable to Class A and Class C Shares, as applicable,
but does not reflect the higher Rule 12b-1 fees and expenses applicable to
these Classes. With those adjustments, performance would be lower than
that shown.
++ Per prospectus. The expense ratios presented above may vary from the
expense ratios presented in other sections of this report that are based
on expenses incurred during the period covered by this report. The Fund's
Adviser has contractually agreed to waive fees and reimburse expenses in
order to keep total operating expenses for all share classes from
exceeding the net expense ratios listed in the prospectus, for the period
beginning December 1, 2009 and ending on November 30, 2010. The Adviser
may recoup from the Fund any of the fees and expenses it has waived and/or
reimbursed until the end of the third fiscal year after the end of the
fiscal year in which such waiver and/or reimbursement occurs, subject to
certain limitations. This recoupment could reduce the Fund's future total
return.
* Reflects 5.50% front-end sales charge.
** Reflects maximum CDSC of 1.00%.
HIGHMARK(R) FUNDS 5
TOP TEN HOLDINGS
% OF
COMPANY* PORTFOLIO
COCA COLA 3.4%
INTERNATIONAL BUSINESS MACHINES 3.0
CONOCOPHILLIPS 2.9
GENERAL ELECTRIC 2.8
UNITED PARCEL SERVICE, CL B 2.8
PROCTER & GAMBLE 2.7
JPMORGAN CHASE 2.7
CHEVRON 2.6
IAC/INTERACTIVECORP 2.4
WELLS FARGO 2.3
FUND SECTORS
% OF
SECTOR PORTFOLIO
INFORMATION TECHNOLOGY 19.9%
FINANCIALS 15.5
CONSUMER STAPLES 12.9
INDUSTRIAL 12.4
HEALTH CARE 10.5
ENERGY 9.5
CONSUMER DISCRETIONARY 8.8
MATERIALS 3.4
TELECOMMUNICATIONS SERVICES 2.5
REPURCHASE AGREEMENT 2.3
UTILITIES 2.3
* EXCLUDES SHORT-TERM SECURITIES.
CORE EQUITY FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2010, HighMark Core Equity Fund (the "Fund")
produced a total return of 14.56% (Fiduciary Shares). In comparison, the Fund's
benchmark, the unmanaged S&P 500 Index, returned 13.84% over the same period.
FACTORS AFFECTING PERFORMANCE
The equity market stabilization and recovery that began March 9, 2009 continued
during the Fund's reporting period. The fiscal and monetary stimulus applied
during the economic downturn took time to cycle through U.S. and world economies
and eventually led to GDP growth for the majority of the period. Stock market
performance reflected this recovery in economic activity and resulted in
broad-based participation in the markets' advance. However, in April 2010 the
economy showed signs of slowing, and the sovereign debt crisis in the euro zone
raised fears of further economic uncertainty and volatility.
The Fund initially sought to capitalize on the economic expansion witnessed
throughout much of the reporting period, and invested in companies with lower
valuations. As the economy slowed, valuations became less important, and
companies with strong earnings were favored.
The consumer durables and technology sectors contributed to the Fund's
performance. Specific stocks that performed well include Pioneer Natural
Resources, a petroleum exploration and production firm in the energy sector.
Also, petroleum giant Conoco Phillips and Internet company Interactive Corp.
added to performance.
The financials and consumer staples sectors detracted from the Fund's
performance. Specifically, Goldman Sachs and Waddell & Reed performed poorly in
financials, as did Amgen in the biotechnology sector. Despite this slight drag
on performance, the Fund outperformed its benchmark for the reporting period.
6 HIGHMARK(R) FUNDS
HIGHMARK CORE EQUITY FUND INVESTMENT OBJECTIVE
HIGHMARK CORE EQUITY FUND SEEKS LONG-TERM CAPITAL APPRECIATION.
[PHOTO OF DAVID GOERZ]
CO-PORTFOLIO MANAGER
DAVID GOERZ
HIGHMARK CAPITAL MANAGEMENT, INC.
[PHOTO OF DEREK IZUEL]
CO-PORTFOLIO MANAGER
DEREK IZUEL
HIGHMARK CAPITAL MANAGEMENT, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK CORE
EQUITY FUND VERSUS THE S&P 500 INDEX AND THE MORNINGSTAR LARGE VALUE CATEGORY.
[LINE GRAPH]
HighMark
Core Equity HighMark
Fund Core Equity Morningstar
Fiduciary Fund Class A S&P 500 Large Value
Shares Shares+ Index++ Category
----------- ------------ --------- -----------
7/00 $10,000 $ 9,450 $10,000 $10,000
7/01 $ 8,509 $ 8,015 $ 8,567 $10,787
7/02 $ 6,446 $ 6,055 $ 6,543 $ 8,722
7/03 $ 7,035 $ 6,594 $ 7,239 $ 9,476
7/04 $ 7,726 $ 7,218 $ 8,192 $10,931
7/05 $ 8,611 $ 8,036 $ 9,346 $12,671
7/06 $ 9,431 $ 8,771 $ 9,849 $13,717
7/07 $10,809 $10,020 $11,439 $15,686
7/08 $ 9,258 $ 8,572 $10,170 $13,309
7/09 $ 7,445 $ 6,872 $ 8,140 $10,628
7/10 $ 8,528 $ 7,852 $ 9,267 $11,983
++ Indexes are unmanaged and do not incur fees, expenses or other costs.
- -----------------------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR 5 YEAR 10 YEAR SINCE EXPENSE EXPENSE
RETURN RETURN RETURN RETURN INCEPTION RATIO++ RATIO++
- -----------------------------------------------------------------------------------------------------------
Fiduciary Shares 14.56% -7.59% -0.19% -1.58% -1.78% 1.19% 1.00%
- -----------------------------------------------------------------------------------------------------------
Class A Shares 14.27% -7.80% -0.46% -1.84% -2.03%+ 1.44% 1.25%
- -----------------------------------------------------------------------------------------------------------
Class A Shares w/load* 8.00% -9.53% -1.58% -2.39% -2.57%+ 1.44% 1.25%
- -----------------------------------------------------------------------------------------------------------
Class B Shares 13.58% -8.41% -1.07% -2.46% -2.65%+ 1.94% 1.85%
- -----------------------------------------------------------------------------------------------------------
Class B Shares w/load** 8.58% -9.28% -1.44% -2.46% -2.65%+ 1.94% 1.85%
- -----------------------------------------------------------------------------------------------------------
Class C Shares 13.50% -8.49% -1.14% -2.18%+ -2.37%+ 1.94% 1.85%
- -----------------------------------------------------------------------------------------------------------
Class C Shares w/load*** 12.50% -8.49% -1.14% -2.18%+ -2.37%+ 1.94% 1.85%
- -----------------------------------------------------------------------------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. RETURNS SHOWN IN THE GRAPH
AND THE TABLE DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY
ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. THE RETURNS FOR CERTAIN
PERIODS REFLECT FEE WAIVERS AND/OR REIMBURSEMENTS IN EFFECT FOR THAT PERIOD;
ABSENT FEE WAIVERS AND REIMBURSEMENTS, PERFORMANCE WOULD HAVE BEEN LOWER.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, SO SHARES, WHEN REDEEMED,
MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. FOR MONTH-END PERFORMANCE
DATA PLEASE CALL 1-800-433-6884 OR VISIT OUR WEBSITE AT WWW.HIGHMARKFUNDS.COM.
+ The performance presented links the performance of Fiduciary Shares from
May 31, 2000 with the performance of Class A and Class B Shares on June
30, 2000 and Class C Shares on November 28, 2003. Fiduciary Share
performance has been adjusted for the maximum sales charge/contingent
deferred sales charge ("CDSC") applicable to Class A, Class B and Class C
Shares, as applicable, but does not reflect the higher Rule 12b-1 fees and
expenses applicable to these Classes. With those adjustments, performance
would be lower than that shown.
++ Per prospectus. The expense ratios presented above may vary from the
expense ratios presented in other sections of this report that are based
on expenses incurred during the period covered by this report. The Fund's
Adviser has contractually agreed to waive fees and reimburse expenses in
order to keep total operating expenses for all share classes from
exceeding the net expense ratios listed in the prospectus, for the period
beginning December 1, 2009 and ending on November 30, 2010. The Adviser
may recoup from the Fund any of the fees and expenses it has waived and/or
reimbursed until the end of the third fiscal year after the end of the
fiscal year in which such waiver and/or reimbursement occurs, subject to
certain limitations. This recoupment could reduce the Fund's future total
return.
* Reflects 5.50% front-end sales charge.
** Reflects maximum CDSC of 5.00%.
*** Reflects maximum CDSC of 1.00%.
HIGHMARK(R) FUNDS 7
TOP TEN HOLDINGS
% OF
COMPANY* PORTFOLIO
APPLE 6.3%
MICROSOFT 5.0
GOOGLE, CL A 3.4
HEWLETT-PACKARD 3.3
CISCO SYSTEMS 3.1
INTEL 2.9
ORACLE 2.9
INTERNATIONAL BUSINESS MACHINES 2.8
QUALCOMM 2.5
SALESFORCE.COM 1.7
FUND SECTORS
% OF
SECTOR PORTFOLIO
INFORMATION TECHNOLOGY 87.4%
HEALTH CARE 6.9
CONSUMER DISCRETIONARY 2.4
REPURCHASE AGREEMENT 1.5
TELECOMMUNICATION SERVICES 1.5
INDUSTRIAL 0.3
* EXCLUDES SHORT-TERM SECURITIES.
ENHANCED GROWTH FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2010, Highmark Enhanced Growth Fund (the
"Fund") produced a total return of 14.04% (Class M Shares). In comparison, the
Fund's benchmark, the NASDAQ 100 Index, returned 17.02% for the same period.
FACTORS AFFECTING PERFORMANCE
During the reporting period, the Fund focused on certain sectors, particularly
in the technology sector. The Fund also invested in the healthcare sector,
focusing on biotech, medical devices and pharmaceutical companies. The Fund also
held small positions in the consumer discretionary, industrials and
telecommunications sectors.
Equities recovered significantly from the low in March 2009 during the first six
months of the reporting period. The Fund benefitted from the overall positive
market sentiment in the equity market. The Fund was up 7.97% during the first
six months of this fiscal year, particularly due to outperformance in technology
stocks. Technology companies with strong balance sheets (i.e. high cash balance
and low debts), high earnings growth expectations and low valuations
outperformed equities in other spectrums. Inclusion of these securities
positively contributed to the Fund's performance during the first six months of
the reporting period.
Sub-sectors that contributed to the Fund's overall performance were internet
software and services, systems software and semiconductor stocks. IT consulting,
computer peripherals and electronic components also performed well. The
sub-sectors that detracted from the Fund's performance were home entertainment,
software, electronic manufacturing services and semiconductor equipment.
Investor sentiment changed course during the second half of the reporting
period. While sentiment was still buoyant at the start of the calendar year,
pessimism started gaining momentum, particularly when the European sovereign
debt crisis took hold. With unemployment in the U.S. still at record levels,
housing still in a slump and looming deficits, the equity markets gave up much
of their earlier gains.
Technology stocks underperformed during the second half of the reporting period.
Disappointments in future earnings growth estimates, concerns of unsustainable
earnings growth and low revenue growth among technology companies (i.e. earnings
growth generated from cost cuttings instead of revenue growth) resulted in
concerns of an impending slowdown in the overall economy and concerns in
sustainability of corporate spending and future capital expenditures. These
concerns detracted from the performance of the technology sector in the second
half of the reporting period.
Sub-sectors that contributed positively to the Fund's overall performance over
the second half of the reporting period were internet software and services,
systems software and semiconductor stocks. IT consulting, computer peripherals
and electronic components also performed very well. The end of the fiscal year
was marked by a sell-off in all major sub-sectors within the technology area.
Among the larger detractors from performance were stocks within the
communications equipment, computer hardware and computer storage industry
groups.
8 HIGHMARK(R) FUNDS
HIGHMARK ENHANCED GROWTH FUND INVESTMENT OBJECTIVE
HIGHMARK ENHANCED GROWTH FUND SEEKS LONG-TERM CAPITAL APPRECIATION.
[PHOTO OF SONYA THADHANI]
PORTFOLIO MANAGER
SONYA THADHANI
BAILARD, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK ENHANCED
GROWTH FUND VERSUS THE NASDAQ 100 INDEX AND THE MORNINGSTAR TECHNOLOGY CATEGORY.
[LINE GRAPH]
HighMark Enhanced HighMark Enhanced
Growth Fund Growth Fund Morningstar Technology
Class M Shares Class A Shares+ NASDAQ 100 Index++ Category
----------------- ----------------- ------------------ ----------------------
5/30/01 $10,000 $9,450 $10,000 $10,000
7/01 $ 9,320 $8,799 $ 9,465 $ 8,836
7/02 $ 5,490 $5,158 $ 5,413 $ 6,185
7/03 $ 7,180 $6,711 $ 7,196 $ 7,020
7/04 $ 7,840 $7,292 $ 7,910 $ 7,651
7/05 $ 8,886 $8,223 $ 9,100 $ 8,530
7/06 $ 8,139 $7,488 $ 8,595 $ 8,298
7/07 $10,328 $9,461 $11,053 $10,576
7/08 $ 9,350 $8,531 $10,579 $ 9,468
7/09 $ 8,150 $7,405 $ 9,173 $ 8,391
7/10 $ 9,294 $8,414 $10,735 $ 9,755
++ Indexes are unmanaged and do not incur fees, expenses or other costs.
- ----------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR 5 YEAR SINCE EXPENSE EXPENSE
RETURN RETURN RETURN INCEPTION RATIO++ RATIO++
- ----------------------------------------------------------------------------------------------
Fiduciary Shares 14.17% -3.46% 0.94%+ -0.88%+ 1.31% 1.20%
- ----------------------------------------------------------------------------------------------
Class A Shares 13.71% -3.81% 0.47%+ -1.25%+ 1.56% 1.45%
- ----------------------------------------------------------------------------------------------
Class A Shares w/load* 7.50% -5.60% -0.65%+ -1.87%+ 1.56% 1.45%
- ----------------------------------------------------------------------------------------------
Class C Shares 13.04% -4.41% -0.07%+ -1.77%+ 2.06% 2.05%
- ----------------------------------------------------------------------------------------------
Class C Shares w/load** 12.04% -4.41% -0.07%+ -1.77%+ 2.06% 2.05%
- ----------------------------------------------------------------------------------------------
Class M Shares 14.04% -3.46% 0.90% -0.80% 1.06% 1.05%
- ----------------------------------------------------------------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. RETURNS SHOWN IN THE GRAPH
AND THE TABLE DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY
ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. THE RETURNS FOR CERTAIN
PERIODS REFLECT FEE WAIVERS AND/OR REIMBURSEMENTS IN EFFECT FOR THAT PERIOD;
ABSENT FEE WAIVERS AND REIMBURSEMENTS, PERFORMANCE WOULD HAVE BEEN LOWER.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, SO SHARES, WHEN REDEEMED,
MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. FOR MONTH-END PERFORMANCE
DATA PLEASE CALL 1-800-433-6884 OR VISIT OUR WEBSITE AT WWW.HIGHMARKFUNDS.COM.
+ The performance presented links the performance of Class M Shares from May
30, 2001 with the performance of Class A and Class C Shares on April 3,
2006 and Fiduciary Shares on April 4, 2006. Class M Share performance has
been adjusted for the maximum sales charge/contingent deferred sales
charge ("CDSC") applicable to Class A and Class C Shares, as applicable,
but does not reflect the higher Rule 12b-1 fees and expenses applicable to
these Classes. With those adjustments, performance would be lower than
that shown.
++ Per prospectus. The expense ratios presented above may vary from the
expense ratios presented in other sections of this report that are based
on expenses incurred during the period covered by this report. The Fund's
Adviser has contractually agreed to waive fees and reimburse expenses in
order to keep total operating expenses for all share classes from
exceeding the net expense ratios listed in the prospectus, for the period
beginning December 1, 2009 and ending on November 30, 2010. The Adviser
may recoup from the Fund any of the fees and expenses it has waived and/or
reimbursed until the end of the third fiscal year after the end of the
fiscal year in which such waiver and/or reimbursement occurs, subject to
certain limitations. This recoupment could reduce the Fund's future total
return.
* Reflects 5.50% front-end sales charge.
** Reflects maximum CDSC of 1.00%.
HIGHMARK(R) FUNDS 9
TOP TEN HOLDINGS
% OF
COMPANY* PORTFOLIO
INTERNATIONAL BUSINESS MACHINES 3.8%
RAYONIER REIT 3.7
MERCK 3.1
ANNALY CAPITAL MANAGEMENT REIT 3.0
CHEVRON 3.0
AT&T 2.8
GENERAL ELECTRIC 2.7
BRISTOL-MYERS SQUIBB 2.6
PPG INDUSTRIES 2.5
TRANSCANADA 2.4
FUND SECTORS
% OF
SECTOR PORTFOLIO
FINANCIALS 25.1%
ENERGY 15.4
CONSUMER DISCRETIONARY 10.8
HEALTH CARE 9.9
INDUSTRIAL 9.8
INFORMATION TECHNOLOGY 9.0
MATERIALS 7.6
TELECOMMUNICATION SERVICES 6.8
UTILITIES 3.4
CONSUMER STAPLES 2.1
REGISTERED INVESTMENT COMPANY 0.1
* EXCLUDES SHORT-TERM SECURITIES.
EQUITY INCOME FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2010, HighMark Equity Income Fund (the
"Fund") produced a total return of 16.06% (Class A Shares without load). In
comparison, the Fund's benchmark, the unmanaged Russell 1000 Value Index,
returned 15.39% for the same period.
FACTORS AFFECTING PERFORMANCE
The equity market stabilization and recovery that began March 9, 2009 continued
during the Fund's reporting period, although volatility increased and growth
slowed in the latter half of the reporting period. The fiscal and monetary
stimulus applied during the economic downturn and coordinated action by central
banks took time to cycle through U.S. and world economies. However, it
eventually led to GDP growth and stock market outperformance. The result was
broad-based participation in the markets' advance during the reporting period.
The Fund's overweight of 3.66% to the materials sector positively contributed to
the Fund's performance. However, the Fund's 2.13% underweight exposure to the
industrials sector detracted from the Fund's performance.
Polaris Industries in the consumer discretionary sector provided a contribution
of 0.94% to the Fund's performance. Rayonier Inc. in the real estate investment
trust sector contributed 0.91% of the Fund's performance, and PPG Industries in
the industrial sector provided a contribution of 0.74% to the Fund's
performance.
Citigroup Inc. in the financial sector detracted from the Fund's performance
(-0.58%), as did BP Plc. Sponsored ADR in the oil exploration sector (-0.53%).
Despite this, the Fund outperformed its benchmark for the reporting period.
10 HIGHMARK(R) FUNDS
HIGHMARK EQUITY INCOME FUND INVESTMENT OBJECTIVE
HIGHMARK EQUITY INCOME FUND SEEKS TOTAL RETURN FROM INCOME AND CAPITAL
APPRECIATION.
[PHOTO OF DONALD NESBITT]
LEAD PORTFOLIO MANAGER
DONALD NESBITT
ZIEGLER CAPITAL MANAGEMENT, LLC
[PHOTO OF MIKHAIL ALKHAZOV]
PORTFOLIO MANAGER
MIKHAIL ALKHAZOV
ZIEGLER CAPITAL MANAGEMENT, LLC
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK EQUITY
INCOME FUND VERSUS THE RUSSELL 1000 VALUE INDEX AND THE MORNINGSTAR LARGE VALUE
CATEGORY.
[LINE GRAPH]
HighMark Equity
Income Fund Russell 1000 Morningstar Large
Class A Shares Value Index++ Value Category
--------------- ------------- -----------------
3/31/05 $ 9,450 $10,000 $10,000
7/05 $ 9,943 $10,497 $10,449
7/06 $10,421 $11,713 $11,312
7/07 $11,810 $13,291 $12,935
7/08 $10,062 $11,277 $10,976
7/09 $ 7,833 $ 8,690 $ 8,764
7/10 $ 9,090 $10,028 $ 9,881
++ Indexes are unmanaged and do not incur fees, expenses or other costs.
- --------------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR 5 YEAR SINCE EXPENSE EXPENSE
RETURN RETURN RETURN INCEPTION RATIO++ RATIO++
- --------------------------------------------------------------------------------------------------
Fiduciary Shares 15.50% -8.50%+ -1.87%+ -0.82%+ 1.23% 0.90%
- --------------------------------------------------------------------------------------------------
Class A Shares 16.06% -8.35% -1.78% -0.73% 1.48% 1.15%
- --------------------------------------------------------------------------------------------------
Class A Shares w/load* 9.61% -10.06% -2.88% -1.77% 1.48% 1.15%
- --------------------------------------------------------------------------------------------------
Class B Shares 15.25% -8.98% -2.49% -1.45% 1.98% 1.75%
- --------------------------------------------------------------------------------------------------
Class B Shares w/load** 10.25% -9.83% -2.82% -1.61% 1.98% 1.75%
- --------------------------------------------------------------------------------------------------
Class C Shares 15.22% -9.01% -2.50% -1.26% 1.98% 1.75%
- --------------------------------------------------------------------------------------------------
Class C Shares w/load*** 14.22% -9.01% -2.50% -1.26% 1.98% 1.75%
- --------------------------------------------------------------------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. RETURNS SHOWN IN THE GRAPH
AND THE TABLE DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY
ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. THE RETURNS FOR CERTAIN
PERIODS REFLECT FEE WAIVERS AND/OR REIMBURSEMENTS IN EFFECT FOR THAT PERIOD;
ABSENT FEE WAIVERS AND REIMBURSEMENTS, PERFORMANCE WOULD HAVE BEEN LOWER.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, SO SHARES, WHEN REDEEMED,
MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. FOR MONTH-END PERFORMANCE
DATA PLEASE CALL 1-800-433-6884 OR VISIT OUR WEBSITE AT WWW.HIGHMARKFUNDS.COM.
+ The performance presented links the performance of Class A Shares from
April 1, 2005 with the performance of Fiduciary Shares on July 24, 2009.
Class A Share performance has been adjusted by removing the sales charge
applicable to Class A Shares because Class A Shares bear a sales charge
while Fiduciary Shares do not bear a sales charge, but the performance
otherwise has not been adjusted to reflect the fees and expenses
applicable to Fiduciary Shares; with those adjustments, performance would
be higher than that shown.
++ Per prospectus. The expense ratios presented above may vary from the
expense ratios presented in other sections of this report that are based
on expenses incurred during the period covered by this report. The Fund's
Adviser has contractually agreed to waive fees and reimburse expenses in
order to keep total operating expenses for all share classes from
exceeding the net expense ratios listed in the prospectus, for the period
beginning December 1, 2009 and ending on November 30, 2010. The Adviser
may recoup from the Fund any of the fees and expenses it has waived and/or
reimbursed until the end of the third fiscal year after the end of the
fiscal year in which such waiver and/or reimbursement occurs, subject to
certain limitations. This recoupment could reduce the Fund's future total
return.
* Reflects 5.50% front-end sales charge.
** Reflects maximum CDSC of 5.00%.
*** Reflects maximum CDSC of 1.00%.
HIGHMARK(R) FUNDS 11
TOP TEN HOLDINGS
% OF
COMPANY* PORTFOLIO
DANAHER 4.3%
PRAXAIR 3.7
GOLDMAN SACHS GROUP 2.7
JPMORGAN CHASE 2.7
EXXON MOBIL 2.6
WELLS FARGO 2.6
APPLE 2.5
OCCIDENTAL PETROLEUM 2.4
GOOGLE, CL A 2.4
SUNCOR ENERGY 2.4
FUND SECTORS
% OF
SECTOR PORTFOLIO
INFORMATION TECHNOLOGY 19.8%
ENERGY 14.9
CONSUMER STAPLES 12.4
INDUSTRIAL 12.3
FINANCIALS 10.7
CONSUMER DISCRETIONARY 8.6
HEALTH CARE 7.8
MATERIALS 6.4
REGISTERED INVESTMENT COMPANIES 4.8
UTILITIES 2.3
* EXCLUDES SHORT-TERM SECURITIES.
FUNDAMENTAL EQUITY FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2010, HighMark Fundamental Equity Fund (the
"Fund") produced a total return of 11.78% (Fiduciary Shares). In comparison, the
Fund's benchmark, the unmanaged S&P 500 Index, returned 13.84% for the same
period.
FACTORS AFFECTING PERFORMANCE
The equity market stabilization and recovery that began March 9, 2009 continued
during the Fund's reporting period, although volatility increased and growth
slowed in the latter half of the reporting period. The fiscal and monetary
stimulus applied during the economic downturn and coordinated action by central
banks took time to cycle through U.S. and world economies. Stock market
performance reflected this recovery in economic activity and resulted in the
broad-based participation in the markets' advance during the reporting period.
However, unemployment remained stubbornly high, which called into question the
sustainability of improvements in consumer spending. Also, the expiration of the
new home buyer's tax credit exposed the fragility of the recovery in the housing
market. These factors, coupled with the euro zone sovereign debt crisis that
began in April, caused significant slowdowns in domestic and global markets.
The utilities sector performed well during the reporting period, as did the
consumer discretionary sector, with its greater exposure to a global economic
recovery. Apple Inc. and Citrix Systems Inc. in the technology sector were top
contributors to the Fund's performance. Questar Corp. was a top performer in the
utilities sector. Starwood Hotels & Resorts Worldwide Inc. and Las Vegas Sands
Corp. were top performers in the consumer discretionary sector.
However, the consumer staples sector of the portfolio was negatively impacted by
one of the Fund's larger holdings, CVS Caremark, and the management and
operational issues the company experienced. Also, the financial sector
contributed negatively to performance, most notably Goldman Sachs, which was
involved with a lawsuit brought by the Securities and Exchange Commission.
As a result, the Fund underperformed its benchmark for the reporting period.
12 HIGHMARK(R) FUNDS
HIGHMARK FUNDAMENTAL EQUITY FUND INVESTMENT OBJECTIVE
HIGHMARK FUNDAMENTAL EQUITY FUND SEEKS LONG-TERM CAPITAL APPRECIATION THROUGH
INVESTMENTS IN U.S. EQUITY SECURITIES.
[PHOTO OF KEN WEMER]
CO-PORTFOLIO MANAGER (1)
KEN WEMER
HIGHMARK CAPITAL MANAGEMENT, INC.
[PHOTO OF GEORGE ROKAS]
CO-PORTFOLIO MANAGER (1)
GEORGE ROKAS
HIGHMARK CAPITAL MANAGEMENT, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK
FUNDAMENTAL EQUITY FUND VERSUS THE S&P 500 INDEX.
[LINE GRAPH]
HighMark Fundamental HighMark Fundamental
Equity Fund Equity Fund
Fiduciary Shares Class A Shares S&P 500 Index++
-------------------- -------------------- ---------------
8/1/08 $10,000 $9,450 $10,000
10/08 $ 7,535 $7,111 $ 7,690
1/09 $ 6,632 $6,263 $ 6,605
4/09 $ 7,232 $6,819 $ 7,033
7/09 $ 8,198 $7,722 $ 8,004
7/10 $ 9,164 $8,606 $ 9,112
++ Indexes are unmanaged and do not incur fees, expenses or other costs.
- -------------------------------------------------------------------------------
ANNUALIZED GROSS NET
ONE YEAR SINCE EXPENSE EXPENSE
RETURN INCEPTION RATIO++ RATIO++
- -------------------------------------------------------------------------------
Fiduciary Shares 11.78% -4.28% 1.82% 0.98%
- -------------------------------------------------------------------------------
Class A Shares 11.44% -4.58% 2.07% 1.23%
- -------------------------------------------------------------------------------
Class A Shares w/load* 5.28% -7.24% 2.07% 1.23%
- -------------------------------------------------------------------------------
Class C Shares 11.39% -5.07% 2.57% 1.83%
- -------------------------------------------------------------------------------
Class C Shares w/load** 10.39% -5.07% 2.57% 1.83%
- -------------------------------------------------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. RETURNS SHOWN IN THE GRAPH
AND THE TABLE DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY
ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. THE RETURNS FOR CERTAIN
PERIODS REFLECT FEE WAIVERS AND/OR REIMBURSEMENTS IN EFFECT FOR THAT PERIOD;
ABSENT FEE WAIVERS AND REIMBURSEMENTS, PERFORMANCE WOULD HAVE BEEN LOWER.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, SO SHARES, WHEN REDEEMED,
MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. FOR MONTH-END PERFORMANCE
DATA PLEASE CALL 1-800-433-6884 OR VISIT OUR WEBSITE AT WWW.HIGHMARKFUNDS.COM.
++ Per prospectus. The expense ratios presented above may vary from the
expense ratios presented in other sections of this report that are based
on expenses incurred during the period covered by this report. The Fund's
Adviser has contractually agreed to waive fees and reimburse expenses in
order to keep total operating expenses for all share classes from
exceeding the net expense ratios listed in the prospectus, for the period
beginning December 1, 2009 and ending on November 30, 2010. The Adviser
may recoup from the Fund any of the fees and expenses it has waived and/or
reimbursed until the end of the third fiscal year after the end of the
fiscal year in which such waiver and/or reimbursement occurs, subject to
certain limitations. This recoupment could reduce the Fund's future total
return.
* Reflects 5.50% front-end sales charge.
** Reflects maximum CDSC of 1.00%.
(1) The portfolio management team also includes: Flavia Araujo, co-portfolio
manager; David Dillion, co-portfolio manager and Robert Kang, co-portfolio
manager.
HIGHMARK(R) FUNDS 13
TOP TEN HOLDINGS
% OF
COMPANY* PORTFOLIO
COGNIZANT TECHNOLOGY SOLUTIONS 3.1%
CITRIX SYSTEMS 2.7
O'REILLY AUTOMOTIVE 2.7
CERNER 2.6
TRACTOR SUPPLY 2.5
RESMED 2.4
FMC TECHNOLOGIES 2.4
PANERA BREAD 2.4
CH ROBINSON WORLDWIDE 2.4
INTUIT 2.4
FUND SECTORS
% OF
SECTOR PORTFOLIO
INFORMATION TECHNOLOGY 24.6%
INDUSTRIAL 22.6
CONSUMER DISCRETIONARY 21.0
HEALTH CARE 13.4
ENERGY 7.5
FINANCIALS 4.0
CONSUMER STAPLES 4.0
REGISTERED INVESTMENT COMPANY 1.6
MATERIALS 1.3
* EXCLUDES SHORT-TERM SECURITIES.
GENEVA MID CAP GROWTH FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2010, HighMark Geneva Mid Cap Growth Fund
(the "Fund") produced a total return of 19.22% (Class A Shares without load). In
comparison, the Fund's benchmark, the unmanaged Russell Midcap Growth Index,
returned 20.17% for the same period.
FACTORS AFFECTING PERFORMANCE
The equity market stabilization and recovery that began in March 2009 continued
during the Fund's reporting period, although volatility increased and growth
slowed in the latter half of the reporting period. Uncertainty remained over
whether the global economy was entering an inflationary or deflationary period,
and whether U.S. markets were overexposed to equities. Political issues dealing
with health care and tax policy added to the uncertainty. Nonetheless, the
reporting period was characterized by record corporate cash balances and
earnings.
The Fund invests in higher quality companies. Although it participated in the
markets' advance, the reporting period was characterized primarily by the
significant outperformance of lower quality issues, as investors focused on
companies that benefited most from the massive fiscal and monetary stimulus.
Signifying the volatility of the period, the Fund outperformed its benchmark in
the fourth quarter of 2009, only to underperform in the first quarter of 2010 as
momentum shifted to lower quality, higher beta stocks. Although market momentum
once again shifted back to higher quality stocks towards the end of the
reporting period, the Fund was unable to overcome the earlier outperformance of
lower quality stocks overall.
The Fund's overweight to the information technology and industrial sectors, as
well as its stock selection in the consumer discretionary sector, contributed to
performance, while its underweight to the financial sector detracted from
performance. In the information technology sector, Cognizant Technology
Solutions and Citrix were top contributors to performance, as were Panera Bread
and Chipotle in the consumer discretionary sector.
Specific stocks that led to the Fund's underperformance during the reporting
period were McAfee Inc. in the information technology sector, Range Resources in
the energy sector and Covance in the health care sector.
14 HIGHMARK(R) FUNDS
HIGHMARK GENEVA MID CAP GROWTH FUND INVESTMENT OBJECTIVE
HIGHMARK GENEVA MID CAP GROWTH FUND SEEKS LONG-TERM CAPITAL APPRECIATION.
[PHOTO OF AMY S. CROEN]
CO-PORTFOLIO MANAGER
AMY S. CROEN
GENEVA CAPITAL MANAGEMENT LTD.
[PHOTO OF WILLIAM A. PRIEBE]
CO-PORTFOLIO MANAGER
WILLIAM A. PRIEBE
GENEVA CAPITAL MANAGEMENT LTD.
[PHOTO OF MICHELLE J. PICARD]
CO-PORTFOLIO MANAGER
MICHELLE J. PICARD
GENEVA CAPITAL MANAGEMENT LTD.
[PHOTO OF W. SCOTT PRIEBE]
CO-PORTFOLIO MANAGER
W. SCOTT PRIEBE
GENEVA CAPITAL MANAGEMENT LTD.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK GENEVA MID
CAP GROWTH FUND VERSUS THE RUSSELL MID-CAP GROWTH INDEX AND MORNINGSTAR MID-CAP
GROWTH CATEGORY.
[LINE GRAPH]
Geneva Mid Cap
Growth Fund Class A Russell Mid-Cap Morningstar Mid-Cap
Shares Growth Index++ Growth Category
------------------- --------------- -------------------
7/00 $ 9,450 $10,000 $10,000
7/01 $ 9,618 $ 6,819 $ 7,400
7/02 $ 8,401 $ 4,863 $ 5,311
7/03 $ 9,257 $ 5,989 $ 6,141
7/04 $10,715 $ 6,875 $ 6,798
7/05 $13,373 $ 8,638 $ 8,320
7/06 $13,710 $ 8,896 $ 8,518
7/07 $15,599 $10,800 $10,351
7/08 $15,401 $ 9,944 $ 9,529
7/09 $12,797 $ 7,769 $ 7,358
7/10 $15,254 $ 9,336 $ 8,696
++ Indexes are unmanaged and do not incur fees, expenses or other costs.
- -----------------------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR 5 YEAR 10 YEAR SINCE EXPENSE EXPENSE
RETURN RETURN RETURN RETURN INCEPTION RATIO++ RATIO++
- -----------------------------------------------------------------------------------------------------------
Fiduciary Shares 19.55% -0.65%+ 2.73%+ 4.94%+ 5.75%+ 1.29% 1.15%
- -----------------------------------------------------------------------------------------------------------
Class A Shares 19.22% -0.74% 2.67% 4.91% 5.73% 1.54% 1.40%
- -----------------------------------------------------------------------------------------------------------
Class A Shares w/load* 12.63% -2.59% 1.52% 4.31% 5.22% 1.54% 1.40%
- -----------------------------------------------------------------------------------------------------------
Class B Shares 18.53% -1.42% 1.93% 4.14% 4.98% 2.04% 2.00%
- -----------------------------------------------------------------------------------------------------------
Class B Shares w/load** 13.53% -2.36% 1.56% 4.14% 4.98% 2.04% 2.00%
- -----------------------------------------------------------------------------------------------------------
Class C Shares 18.52% -1.44% 1.94% 4.17% 5.08%+ 2.04% 2.00%
- -----------------------------------------------------------------------------------------------------------
Class C Shares w/load*** 17.52% -1.44% 1.94% 4.17% 5.08%+ 2.04% 2.00%
- -----------------------------------------------------------------------------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. RETURNS SHOWN IN THE GRAPH
AND THE TABLE DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY
ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. THE RETURNS FOR CERTAIN
PERIODS REFLECT FEE WAIVERS AND/OR REIMBURSEMENTS IN EFFECT FOR THAT PERIOD;
ABSENT FEE WAIVERS AND REIMBURSEMENTS, PERFORMANCE WOULD HAVE BEEN LOWER.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, SO SHARES, WHEN REDEEMED,
MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. FOR MONTH-END PERFORMANCE
DATA PLEASE CALL 1-800-433-6884 OR VISIT OUR WEBSITE AT WWW.HIGHMARKFUNDS.COM.
+ The performance presented links the performance of Class A Shares from
January 4, 1999 with the performance of Class C Shares on May 8, 2000 and
the performance of Fiduciary Shares on June 26, 2009. With respect to
Class C Shares, Class A Share performance has been adjusted for the
maximum contingent deferred sales charge ("CDSC") applicable to Class C
Shares, but does not reflect the higher Rule 12b-1 fees and expenses
applicable to the Class; with those adjustments, performance would be
lower than that shown. With respect to Fiduciary Shares, Class A Share
performance has been adjusted by removing the sales charge applicable to
Class A Shares because Class A Shares bear a sales charge while Fiduciary
Shares do not bear a sales charge, but the performance otherwise has not
been adjusted to reflect the fees and expenses applicable to Fiduciary
Shares; with those adjustments, performance would be higher than that
shown.
++ Per prospectus. The expense ratios presented above may vary from the
expense ratios presented in other sections of this report that are based
on expenses incurred during the period covered by this report. The Fund's
Adviser has contractually agreed to waive fees and reimburse expenses in
order to keep total operating expenses for all share classes from
exceeding the net expense ratios listed in the prospectus, for the period
beginning December 1, 2009 and ending on November 30, 2010. The Adviser
may recoup from the Fund any of the fees and expenses it has waived and/or
reimbursed until the end of the third fiscal year after the end of the
fiscal year in which such waiver and/or reimbursement occurs, subject to
certain limitations. This recoupment could reduce the Fund's future total
return.
* Reflects 5.50% front-end sales charge.
** Reflects maximum CDSC of 5.00%.
*** Reflects maximum CDSC of 1.00%.
HIGHMARK(R) FUNDS 15
TOP TEN HOLDINGS
% OF
COMPANY* PORTFOLIO
ISHARES RUSSELL 2000 GROWTH INDEX FUND 4.9%
CAPELLA EDUCATION 2.7
MONRO MUFFLER BRAKE 2.7
RIVERBED TECHNOLOGY 2.7
BALCHEM 2.6
KNIGHT TRANSPORTATION 2.5
GENESEE & WYOMING, CL A 2.5
NEOGEN 2.4
HMS HOLDINGS 2.3
CONCUR TECHNOLOGIES 2.3
FUND SECTORS
% OF
SECTOR PORTFOLIO
INFORMATION TECHNOLOGY 21.3%
INDUSTRIAL 20.4
HEALTH CARE 19.7
CONSUMER DISCRETIONARY 16.3
REGISTERED INVESTMENT COMPANIES 8.4
ENERGY 6.9
FINANCIALS 3.0
MATERIALS 2.6
CONSUMER STAPLES 1.4
* EXCLUDES SHORT-TERM SECURITIES.
GENEVA SMALL CAP GROWTH FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2010, HighMark Geneva Small Cap Growth Fund
(the "Fund") produced a total return of 17.83% (Class A Shares without load). In
comparison, the Fund's benchmark, the unmanaged Russell 2000 Growth Index,
returned 16.71% for the same period.
FACTORS AFFECTING PERFORMANCE
The equity market stabilization and recovery that began in March 2009 continued
during the Fund's reporting period, although volatility increased and growth
slowed in the latter half of the reporting period. Uncertainty remained over
whether the global economy was entering an inflationary or deflationary period,
and whether U.S. markets were overexposed to equities. Political issues dealing
with health care and tax policy added to the uncertainty. Nonetheless, the
reporting period was characterized by record corporate cash balances and
earnings.
Although the Fund participated in the market advance, the reporting period was
characterized primarily by the outperformance of lower quality issues, as
investors focused on companies that benefited most from the massive fiscal and
monetary stimulus. Even though the Fund invests in higher quality stocks, it was
able to outperform its benchmark for the reporting period.
An overweight to the energy sector, as well as stock selection within the
sector, contributed to the Fund's performance. The information technology sector
also contributed to performance. Specific stocks that contributed to performance
were Riverbed Technology in the information technology sector, and HMS Holdings
and SXC Health Solutions Corp. in the health care sector.
The telecommunications and consumer staples sectors detracted from performance.
Specific stocks that detracted from performance include Privatebancorp in the
financial sector and Neutral Tandem in the telecommunications sector.
16 HIGHMARK(R) FUNDS
HIGHMARK GENEVA SMALL CAP GROWTH FUND INVESTMENT OBJECTIVE
HIGHMARK GENEVA SMALL CAP GROWTH FUND SEEKS LONG-TERM CAPITAL APPRECIATION.
[PHOTO OF AMY S. CROEN]
CO-PORTFOLIO MANAGER
AMY S. CROEN
GENEVA CAPITAL MANAGEMENT LTD.
[PHOTO OF WILLIAM A. PRIEBE]
CO-PORTFOLIO MANAGER
WILLIAM A. PRIEBE
GENEVA CAPITAL MANAGEMENT LTD.
[PHOTO OF MICHELLE J. PICARD]
CO-PORTFOLIO MANAGER
MICHELLE J. PICARD
GENEVA CAPITAL MANAGEMENT LTD.
[PHOTO OF W. SCOTT PRIEBE]
CO-PORTFOLIO MANAGER
W. SCOTT PRIEBE
GENEVA CAPITAL MANAGEMENT LTD.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK GENEVA
SMALL CAP GROWTH FUND VERSUS THE RUSSELL 2000 GROWTH INDEX AND THE MORNINGSTAR
SMALL GROWTH CATEGORY.
[LINE GRAPH]
HighMark Geneva Morningstar
Small Cap Growth Russell 2000 Small Growth
Class A Shares Growth Index++ Category
---------------- -------------- ------------
6/12/09 $ 9,450 $10,000 $10,000
7/09 $10,350 $10,483 $10,491
8/09 $10,339 $10,586 $10,665
9/09 $10,939 $11,281 $11,381
10/09 $10,519 $10,497 $10,709
11/09 $10,819 $10,822 $11,071
12/09 $11,459 $11,748 $11,938
1/10 $10,905 $11,222 $11,397
7/10 $12,849 $13,098 $13,355
++ Indexes are unmanaged and do not incur fees, expenses or other costs.
- ----------------------------------------------------------------------------------
ANNUALIZED GROSS NET
ONE YEAR SINCE EXPENSE EXPENSE
RETURN INCEPTION+ RATIO++ RATIO++
- ----------------------------------------------------------------------------------
Fiduciary Shares 18.12% 19.38% 1.56% 1.39%
- ----------------------------------------------------------------------------------
Class A Shares 17.83% 19.12% 1.81% 1.64%
- ----------------------------------------------------------------------------------
Class A Shares w/load* 11.37% 13.34% 1.81% 1.64%
- ----------------------------------------------------------------------------------
Class C Shares 17.11% 18.43% 2.31% 2.24%
- ----------------------------------------------------------------------------------
Class C Shares w/load** 16.11% 18.43% 2.31% 2.24%
- ----------------------------------------------------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. RETURNS SHOWN IN THE GRAPH
AND THE TABLE DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY
ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. THE RETURNS FOR CERTAIN
PERIODS REFLECT FEE WAIVERS AND/OR REIMBURSEMENTS IN EFFECT FOR THAT PERIOD;
ABSENT FEE WAIVERS AND REIMBURSEMENTS, PERFORMANCE WOULD HAVE BEEN LOWER.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, SO SHARES, WHEN REDEEMED,
MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. FOR MONTH-END PERFORMANCE
DATA PLEASE CALL 1-800-433-6884 OR VISIT OUR WEBSITE AT WWW.HIGHMARKFUNDS.COM.
IN ADDITION TO THE NORMAL RISKS ASSOCIATED WITH EQUITY INVESTING, INVESTING IN
SMALL CAP COMPANIES MAY INVOLVE ADDITIONAL RISK BECAUSE, AS SMALL CAP COMPANIES
ARE FREQUENTLY IN THE EARLY STAGES OF GROWTH, THEIR STOCKS TEND TO FLUCTUATE IN
VALUE.
+ Commenced investment operations on June 12, 2009.
++ Per prospectus. The expense ratios presented above may vary from the
expense ratios presented in other sections of this report that are based
on expenses incurred during the period covered by this report. The Fund's
Adviser has contractually agreed to waive fees and reimburse expenses in
order to keep total operating expenses for all share classes from
exceeding the net expense ratios listed in the prospectus, for the period
beginning December 1, 2009 and ending on November 30, 2010. The Adviser
may recoup from the Fund any of the fees and expenses it has waived and/or
reimbursed until the end of the third fiscal year after the end of the
fiscal year in which such waiver and/or reimbursement occurs, subject to
certain limitations. This recoupment could reduce the Fund's future total
return.
* Reflects 5.50% front-end sales charge.
** Reflects maximum CDSC of 1.00%.
HIGHMARK(R) FUNDS 17
TOP TEN HOLDINGS+
% OF
COMPANY* PORTFOLIO
NESTLE 1.6%
ROCHE HOLDING 1.2
NOVARTIS 1.0
BP 1.0
SIEMENS 1.0
GLAXOSMITHKLINE 1.0
STANDARD CHARTERED 0.9
BHP BILLITON (U.K.) 0.9
ASTRAZENECA 0.9
MARKET VECTORS RUSSIA 0.9
FUND SECTORS+
% OF
SECTOR PORTFOLIO
FINANCIALS 24.6%
INDUSTRIAL 12.1
MATERIALS 11.2
CONSUMER DISCRETIONARY 10.0
CONSUMER STAPLES 9.7
HEALTH CARE 7.9
ENERGY 7.4
INFORMATION TECHNOLOGY 6.2
TELECOMMUNICATION SERVICES 4.9
UTILITIES 3.6
REGISTERED INVESTMENT COMPANIES 1.4
REPURCHASE AGREEMENT 1.0
* EXCLUDES SHORT-TERM SECURITIES.
+ EXCLUDES SECURITIES PURCHASED WITH CASH COLLATERAL RECEIVED FROM
SECURITIES LENDING.
INTERNATIONAL OPPORTUNITIES FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2010, Highmark International Opportunities
Fund (the "Fund") produced a total return of 8.31% (Class M Shares). In
comparison, the Fund's benchmark, the unmanaged MSCI All-Country World ex-U.S.
Index (gross) ("ACWI ex-U.S."), returned 10.12% for the same period.
FACTORS AFFECTING PERFORMANCE
During the fiscal year, international global equity markets were affected by the
reverberations of Western Europe's debt crisis along with the general struggle
for economies to regain their footing after the downturn of the past three
years. Over the course of the fiscal year, the world's underlying growth
stabilized from the crisis levels of 2008 to 2009. China provided a demand pull
for much of Asia. In Europe, the fiscal year was dominated by concerns over
sovereign debt of Greece, Italy, Portugal and Spain. May and June produced the
most concerted steps towards a region-wide solution to that crisis, with a
formalization of an agreement between the European Commission and the
International Monetary Fund. Following that, austerity measures were announced
by many Western European governments to address increased borrowing costs due to
their budget overhangs. Euro weakness bolstered German growth through improved
export competitiveness. Increased confidence also emerged after the U.K.
parliamentary election in the fiscal year's final quarter.
During the fiscal year, Greece's stock market experienced the largest drop,
which was more than 36% according to the MSCI Greece Index. The rest of Southern
Europe was pulled down by the same anxieties and turned in negative results as
well. At the other end of the spectrum, several emerging countries gained more
than 30%. For the fiscal year period, the MSCI EAFE Index, a broad measure of
developed markets, returned just over 6%, while a similar measure for emerging
markets, MSCI Emerging Market Index, returned just under 20%. By most accounts,
emerging markets entered and exited the global financial crisis in stronger
financial positions than many developed markets, which has been reflected in
their stock market returns.
The Fund underperformed its benchmark for the fiscal year. Country allocation
was slightly beneficial for the year due primarily to overweight positions among
selected emerging markets (such as Turkey and Thailand) as well as in developed
markets like Sweden. These gains were partially offset by selected underweights
to some of the countries, such as Canada and Switzerland, which benefited from a
rush of investors seeking a safe haven. Stock selection detracted from overall
results. Most of this occurred early in the fiscal year during the end of what
was termed 2009's "junk rally," when securities that had been hardest hit during
the financial crisis rebounded fastest, regardless of underlying fundamentals.
Results stabilized in the second half of the fiscal year, with earnings quality
becoming a critical element in 2010. Most recently, valuations have started to
show increased efficacy. Stock selection detracted from performance the most in
the U.K., Japan and Switzerland. The Fund also engaged in a currency hedge
against the euro in early 2010 which benefited the overall results.
18 HIGHMARK(R) FUNDS
HIGHMARK INTERNATIONAL OPPORTUNITIES FUND INVESTMENT OBJECTIVE
HIGHMARK INTERNATIONAL OPPORTUNITIES FUND SEEKS LONG-TERM CAPITAL APPRECIATION.
[PHOTO OF ANTHONY R. CRADDOCK]
CO-PORTFOLIO MANAGER
ANTHONY R. CRADDOCK
BAILARD, INC.
[PHOTO OF ERIC P. LEVE]
CO-PORTFOLIO MANAGER
ERIC P. LEVE
BAILARD, INC.
[PHOTO OF PETER M. HILL]
CO-PORTFOLIO MANAGER
PETER M. HILL
BAILARD, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK
INTERNATIONAL OPPORTUNITIES FUND VERSUS THE MSCI ALL-COUNTRY WORLD EX-U.S. INDEX
GROSS AND THE MORNINGSTAR FOREIGN LARGE BLEND CATEGORY.
[LINE GRAPH]
HighMark International HighMark International MCSI All-Country Morningstar
Opportunities Fund Opportunities Fund World ex-US Foreign Large
Class M Shares Class A Shares+ Index Gross++ Blend Category
---------------------- ---------------------- ---------------- --------------
7/00 $10,000 $ 9,450 $10,000 $10,000
7/01 $ 7,575 $ 7,130 $ 7,720 $ 7,646
7/02 $ 6,468 $ 6,051 $ 6,525 $ 6,405
7/03 $ 7,153 $ 6,668 $ 7,081 $ 6,902
7/04 $ 8,869 $ 8,231 $ 8,841 $ 8,565
7/05 $11,240 $10,390 $10,996 $10,590
7/06 $14,384 $13,256 $13,703 $13,043
7/07 $18,624 $17,100 $17,532 $16,121
7/08 $16,753 $15,339 $15,902 $14,288
7/09 $12,472 $11,386 $12,578 $11,003
7/10 $13,509 $12,302 $13,851 $11,802
++ Indexes are unmanaged and do not incur fees, expenses or other costs.
- -----------------------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR 5 YEAR 10 YEAR SINCE EXPENSE EXPENSE
RETURN RETURN RETURN RETURN INCEPTION RATIO++ RATIO++
- -----------------------------------------------------------------------------------------------------------
Fiduciary Shares 8.03% -10.28% 3.62%+ 2.90%+ 7.19%+ 1.57% 1.48%
- -----------------------------------------------------------------------------------------------------------
Class A Shares 8.04% -10.41% 3.43%+ 2.68%+ 6.93%+ 1.82% 1.63%
- -----------------------------------------------------------------------------------------------------------
Class A Shares w/load* 2.07% -12.09% 2.25%+ 2.10%+ 6.74%+ 1.82% 1.63%
- -----------------------------------------------------------------------------------------------------------
Class C Shares 7.39% -11.00% 2.74%+ 2.07%+ 6.37%+ 2.32% 2.32%
- -----------------------------------------------------------------------------------------------------------
Class C Shares w/load** 6.39% -11.00% 2.74%+ 2.07%+ 6.37%+ 2.32% 2.32%
- -----------------------------------------------------------------------------------------------------------
Class M Shares 8.31% -10.15% 3.74% 3.05% 7.37% 1.32% 1.32%
- -----------------------------------------------------------------------------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. RETURNS SHOWN IN THE GRAPH
AND THE TABLE DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY
ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. THE RETURNS FOR CERTAIN
PERIODS REFLECT FEE WAIVERS AND/OR REIMBURSEMENTS IN EFFECT FOR THAT PERIOD;
ABSENT FEE WAIVERS AND REIMBURSEMENTS, PERFORMANCE WOULD HAVE BEEN LOWER.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, SO SHARES, WHEN REDEEMED,
MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. FOR MONTH-END PERFORMANCE
DATA PLEASE CALL 1-800-433-6884 OR VISIT OUR WEBSITE AT WWW.HIGHMARKFUNDS.COM.
IN ADDITION TO THE NORMAL RISKS ASSOCIATED WITH INVESTING, INTERNATIONAL
INVESTMENTS MAY INVOLVE RISK OF CAPITAL LOSS FROM AN UNFAVORABLE FLUCTUATION IN
CURRENCY VALUES, FROM DIFFERENCES IN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES OR
FROM ECONOMIC OR POLITICAL INSTABILITY IN OTHER NATIONS. EMERGING MARKETS
INVESTMENTS INVOLVE HEIGHTENED RISKS RELATED TO THE SAME FACTORS.
+ The performance presented links the performance of Class M Shares from
September 4, 1979 with the performance of Class A and Class C Shares on
April 3, 2006 and Fiduciary Shares on April 4, 2006. Class M Share
performance has been adjusted for the maximum sales charge/contingent
deferred sales charge ("CDSC") applicable to Class A and Class C Shares,
as applicable, but does not reflect the higher Rule 12b-1 fees and
expenses applicable to these Classes. With those adjustments, performance
would be lower than that shown.
++ Per prospectus. The expense ratios presented above may vary from the
expense ratios presented in other sections of this report that are based
on expenses incurred during the period covered by this report. The Fund's
Adviser has contractually agreed to waive fees and reimburse expenses in
order to keep total operating expenses for all share classes from
exceeding the net expense ratios listed in the prospectus, for the period
beginning December 1, 2009 and ending on November 30, 2010. The Adviser
may recoup from the Fund any of the fees and expenses it has waived and/or
reimbursed until the end of the third fiscal year after the end of the
fiscal year in which such waiver and/or reimbursement occurs, subject to
certain limitations. This recoupment could reduce the Fund's future total
return.
* Reflects 5.50% front-end sales charge.
** Reflects maximum CDSC of 1.00%.
HIGHMARK(R) FUNDS 19
TOP TEN HOLDINGS
% OF
COMPANY* PORTFOLIO
APPLE 5.5%
CISCO SYSTEMS 4.6
GOOGLE, CL A 3.9
PRAXAIR 3.1
WAL-MART STORES 2.8
COCA-COLA 2.7
PHILIP MORRIS INTERNATIONAL 2.7
INTEL 2.7
ECOLAB 2.6
DANAHER 2.5
FUND SECTORS
% OF
SECTOR PORTFOLIO
INFORMATION TECHNOLOGY 30.9%
CONSUMER STAPLES 13.4
INDUSTRIAL 13.0
CONSUMER DISCRETIONARY 11.0
ENERGY 7.8
HEALTH CARE 6.9
MATERIALS 6.1
FINANCIALS 5.5
REGISTERED INVESTMENT COMPANY 3.9
UTILITIES 1.5
* EXCLUDES SHORT-TERM SECURITIES.
LARGE CAP GROWTH FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2010, HighMark Large Cap Growth Fund (the
"Fund") produced a total return of 12.82% (Fiduciary Shares). In comparison, the
Fund's benchmark, the unmanaged Russell 1000 Growth Index, returned 13.65% over
the same period.
FACTORS AFFECTING PERFORMANCE
The equity market stabilization and recovery that began March 9, 2009 continued
during the Fund's reporting period, although volatility increased and growth
slowed in the latter half of the reporting period. The fiscal and monetary
stimulus applied during the economic downturn and coordinated action by central
banks took time to cycle through U.S. and world economies. Stock market
performance reflected this recovery in economic activity and resulted in the
broad-based participation in the markets' advance during the reporting period.
However, unemployment remained stubbornly high, which called into question the
sustainability of improvements in consumer spending. Also, the expiration of the
new home buyer's tax credit exposed the fragility of the recovery in the housing
market. These factors, coupled with the euro zone sovereign debt crisis that
began in April, caused significant slowdowns in domestic and global markets.
The technology sector performed well during the reporting period, outpacing the
broader market due to strong earnings. Also, the consumer discretionary sector,
with its greater exposure to a global economic recovery, exceeded expectations.
Apple Inc. and Citrix Systems Inc. in the technology sector were top
contributors to the Fund's performance, as were Starwood Hotels & Resorts
Worldwide Inc. and Las Vegas Sands Corp. in the consumer discretionary sector.
However, the consumer staples sector of the portfolio was negatively impacted by
one of the Fund's larger holdings, CVS Caremark, and the management and
operational issues the company experienced. Also, the financial sector
contributed negatively to performance due to uncertainty surrounding proposed
financial reform legislation. Goldman Sachs, which was subject to a lawsuit
brought by the Securities and Exchange Commission, was a top detractor from
performance.
As a result, the Fund underperformed its benchmark for the reporting period.
20 HIGHMARK(R) FUNDS
HIGHMARK LARGE CAP GROWTH FUND INVESTMENT OBJECTIVE
HIGHMARK LARGE CAP GROWTH FUND SEEKS LONG-TERM CAPITAL APPRECIATION THROUGH
INVESTMENTS IN EQUITY SECURITIES. THE PRODUCTION OF CURRENT INCOME IS AN
INCIDENTAL OBJECTIVE.
[PHOTO OF KEN WEMER]
CO-PORTFOLIO MANAGER (1)
KEN WEMER
HIGHMARK CAPITAL MANAGEMENT, INC.
[PHOTO OF GEORGE ROKAS]
CO-PORTFOLIO MANAGER (1)
GEORGE ROKAS
HIGHMARK CAPITAL MANAGEMENT, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK LARGE CAP
GROWTH FUND VERSUS THE RUSSELL 1000 GROWTH INDEX AND THE MORNINGSTAR LARGE
GROWTH CATEGORY.
[LINE GRAPH]
Highmark Large Cap Highmark Large Cap
Growth Fund Growth Fund Morningstar Large Russell 1000
Fiduciary Shares Class A Shares Growth Category Growth Index++
------------------ ------------------ ----------------- --------------
7/00 $10,000 $ 9,450 $10,000 $10,000
7/01 $ 5,429 $ 5,119 $ 7,052 $ 6,494
7/02 $ 4,084 $ 3,847 $ 5,044 $ 4,627
7/03 $ 4,538 $ 4,251 $ 5,612 $ 5,166
7/04 $ 4,694 $ 4,394 $ 5,997 $ 5,605
7/05 $ 5,406 $ 5,047 $ 6,887 $ 6,337
7/06 $ 5,518 $ 5,139 $ 6,863 $ 6,289
7/07 $ 6,319 $ 5,865 $ 8,100 $ 7,513
7/08 $ 5,769 $ 5,342 $ 7,554 $ 7,041
7/09 $ 5,021 $ 4,636 $ 6,043 $ 5,804
7/10 $ 5,665 $ 5,214 $ 6,756 $ 6,596
++ Indexes are unmanaged and do not incur fees, expenses or other costs.
- -----------------------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR 5 YEAR 10 YEAR SINCE EXPENSE EXPENSE
RETURN RETURN RETURN RETURN INCEPTION RATIO++ RATIO++
- -----------------------------------------------------------------------------------------------------------
Fiduciary Shares 12.82% -3.58% 0.94% -5.52% 3.79% 1.18% 1.03%
- -----------------------------------------------------------------------------------------------------------
Class A Shares 12.48% -3.84% 0.66% -5.77% 3.59%+ 1.43% 1.28%
- -----------------------------------------------------------------------------------------------------------
Class A Shares w/load* 6.30% -5.63% -0.47% -6.31% 3.24%+ 1.43% 1.28%
- -----------------------------------------------------------------------------------------------------------
Class B Shares 11.77% -4.38% 0.10% -6.35% 3.12%+ 1.93% 1.88%
- -----------------------------------------------------------------------------------------------------------
Class B Shares w/load** 6.77% -5.34% -0.30% -6.35% 3.12%+ 1.93% 1.88%
- -----------------------------------------------------------------------------------------------------------
Class C Shares 11.88% -4.39% 0.07% -6.35% 3.21%+ 1.93% 1.88%
- -----------------------------------------------------------------------------------------------------------
Class C Shares w/load*** 10.88% -4.39% 0.07% -6.35% 3.21%+ 1.93% 1.88%
- -----------------------------------------------------------------------------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. RETURNS SHOWN IN THE GRAPH
AND THE TABLE DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY
ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. THE RETURNS FOR CERTAIN
PERIODS REFLECT FEE WAIVERS AND/OR REIMBURSEMENTS IN EFFECT FOR THAT PERIOD;
ABSENT FEE WAIVERS AND REIMBURSEMENTS, PERFORMANCE WOULD HAVE BEEN LOWER.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, SO SHARES, WHEN REDEEMED,
MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. FOR MONTH-END PERFORMANCE
DATA PLEASE CALL 1-800-433-6884 OR VISIT OUR WEBSITE AT WWW.HIGHMARKFUNDS.COM.
+ The performance presented links the performance of Fiduciary Shares from
November 18, 1993 with the performance of Class A Shares on June 20, 1994,
Class B Shares on February 2, 1998 and Class C Shares on November 30,
1999. Fiduciary Share performance has been adjusted for the maximum sales
charge/contingent deferred sales charge ("CDSC") applicable to Class A,
Class B and Class C Shares, as applicable, but does not reflect the higher
Rule 12b-1 fees and expenses applicable to these Classes. With those
adjustments, performance would be lower than that shown.
++ Per prospectus. The expense ratios presented above may vary from the
expense ratios presented in other sections of this report that are based
on expenses incurred during the period covered by this report. The Fund's
Adviser has contractually agreed to waive fees and reimburse expenses in
order to keep total operating expenses for all share classes from
exceeding the net expense ratios listed in the prospectus, for the period
beginning December 1, 2009 and ending on November 30, 2010. The Adviser
may recoup from the Fund any of the fees and expenses it has waived and/or
reimbursed until the end of the third fiscal year after the end of the
fiscal year in which such waiver and/or reimbursement occurs, subject to
certain limitations. This recoupment could reduce the Fund's future total
return.
* Reflects 5.50% front-end sales charge.
** Reflects maximum CDSC of 5.00%.
*** Reflects maximum CDSC of 1.00%.
(1) The portfolio management team also includes: Flavia Araujo, co-portfolio
manager; David Dillon, co-portfolio manager and Robert Kang, co-portfolio
manager.
HIGHMARK(R) FUNDS 21
TOP TEN HOLDINGS
% OF
COMPANY* PORTFOLIO
EXXON MOBIL 4.6%
WELLS FARGO 3.9
JPMORGAN CHASE 3.9
PFIZER 3.7
BANK OF AMERICA 3.1
KRAFT FOODS, CL A 2.6
UNITEDHEALTH GROUP 2.5
QEP RESOURCES 2.3
VODAFONE GROUP PLC, SP ADR 2.2
TIME WARNER CABLE 2.1
FUND SECTORS
% OF
SECTOR PORTFOLIO
FINANCIALS 25.4%
ENERGY 18.2
INDUSTRIAL 12.9
HEALTH CARE 12.5
CONSUMER STAPLES 8.1
CONSUMER DISCRETIONARY 7.8
INFORMATION TECHNOLOGY 6.1
MATERIALS 4.4
TELECOMMUNICATION SERVICES 3.3
UTILITIES 1.1
REPURCHASE AGREEMENT 0.2
* EXCLUDES SHORT-TERM SECURITIES.
LARGE CAP VALUE FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2010, HighMark Large Cap Value Fund (the
"Fund") produced a total return of 11.12% (Fiduciary Shares). In comparison, the
Fund's benchmark, the unmanaged Russell 1000 Value Index, returned 15.39% for
the same period.
FACTORS AFFECTING PERFORMANCE
The equity market stabilization and recovery that began March 9, 2009 continued
during the Fund's reporting period, although volatility increased and growth
slowed in the latter half of the reporting period. The fiscal and monetary
stimulus applied during the economic downturn and coordinated action by central
banks took time to cycle through U.S. and world economies. Stock market
performance reflected this recovery in economic activity and resulted in
broad-based participation in the markets' advance during the reporting period.
However, unemployment remained stubbornly high, which called into question the
sustainability of improvements in consumer spending. Also, the expiration of the
new home buyer's tax credit exposed the fragility of the recovery in the housing
market. These factors, coupled with the euro zone sovereign debt crisis that
began in April, caused significant slowdowns in domestic and global markets.
The Fund's current management team took control of the portfolio in May 2010.
Prior to the management transition, the health care sector, and specifically
AmerisourceBergen, contributed to Fund performance. The health care sector
continued to contribute to performance after the transition, with United
Healthcare performing well after health care reform legislation proved less
onerous than expected. Stock selection in the consumer staples sector also added
to performance, with Herbalife performing well.
The financial and utilities sectors detracted from performance, specifically,
Hudson City Bancorp in the financial sector and Mirant in the utilities sector.
These companies were not retained once the management transition was complete.
However, these holdings were a drag on performance, and as a result the Fund
underperformed its benchmark overall for the reporting period.
22 HIGHMARK(R) FUNDS
HIGHMARK LARGE CAP VALUE FUND INVESTMENT OBJECTIVE
HIGHMARK LARGE CAP VALUE FUND SEEKS TO PROVIDE LONG-TERM CAPITAL APPRECIATION.
[PHOTO OF RICHARD EARNEST]
CO-PORTFOLIO MANAGER
RICHARD EARNEST
HIGHMARK CAPITAL MANAGEMENT, INC.
[PHOTO OF KEITH STRIBLING]
CO-PORTFOLIO MANAGER
KEITH STRIBLING
HIGHMARK CAPITAL MANAGEMENT, INC.
[PHOTO OF TODD LOWENSTEIN]
CO-PORTFOLIO MANAGER
TODD LOWENSTEIN
HIGHMARK CAPITAL MANAGEMENT, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK LARGE CAP
VALUE FUND VERSUS THE RUSSELL 1000 VALUE INDEX AND THE MORNINGSTAR LARGE VALUE
CATEGORY.
[LINE GRAPH]
HighMark Large Cap HighMark Large Cap
Value Fund Value Fund Morningstar Large Russell 1000
Fiduciary Shares Class A Shares Value Category Value Index++
------------------ ------------------- ----------------- -------------
7/00 $10,000 $ 9,450 $10,000 $10,000
7/01 $ 9,711 $ 9,146 $11,017 $10,874
7/02 $ 7,349 $ 6,900 $ 8,925 $ 8,999
7/03 $ 7,883 $ 7,392 $ 9,683 $ 9,967
7/04 $ 9,485 $ 8,870 $11,164 $11,729
7/05 $11,511 $10,741 $12,928 $13,961
7/06 $12,756 $11,872 $13,989 $15,578
7/07 $14,336 $13,307 $15,990 $17,679
7/08 $12,093 $11,199 $13,588 $15,000
7/09 $ 9,743 $ 8,994 $16,326 $11,559
7/10 $10,826 $ 9,975 $18,408 $13,338
++ Indexes are unmanaged and do not incur fees, expenses or other costs.
- -----------------------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR 5 YEAR 10 YEAR SINCE EXPENSE EXPENSE
RETURN RETURN RETURN RETURN INCEPTION RATIO++ RATIO++
- -----------------------------------------------------------------------------------------------------------
Fiduciary Shares 11.12% -8.94% -1.22% 0.80% 8.85% 1.11% 1.00%
- -----------------------------------------------------------------------------------------------------------
Class A Shares 10.91% -9.16% -1.47% 0.54% 8.71%+ 1.36% 1.25%
- -----------------------------------------------------------------------------------------------------------
Class A Shares w/load* 4.77% -10.85% -2.58% -0.03% 8.49%+ 1.36% 1.25%
- -----------------------------------------------------------------------------------------------------------
Class B Shares 10.23% -9.71% -2.07% -0.09% 8.39%+ 1.86% 1.85%
- -----------------------------------------------------------------------------------------------------------
Class B Shares w/load** 5.23% -10.54% -2.43% -0.09% 8.39%+ 1.86% 1.85%
- -----------------------------------------------------------------------------------------------------------
Class C Shares 10.27% -9.70% -2.07% -0.09% 8.46%+ 1.86% 1.85%
- -----------------------------------------------------------------------------------------------------------
Class C Shares w/load*** 9.27% -9.70% -2.07% -0.09% 8.46%+ 1.86% 1.85%
- -----------------------------------------------------------------------------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. RETURNS SHOWN IN THE GRAPH
AND THE TABLE DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY
ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. THE RETURNS FOR CERTAIN
PERIODS REFLECT FEE WAIVERS AND/OR REIMBURSEMENTS IN EFFECT FOR THAT PERIOD;
ABSENT FEE WAIVERS AND REIMBURSEMENTS, PERFORMANCE WOULD HAVE BEEN LOWER.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, SO SHARES, WHEN REDEEMED,
MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. FOR MONTH-END PERFORMANCE
DATA PLEASE CALL 1-800-433-6884 OR VISIT OUR WEBSITE AT WWW.HIGHMARKFUNDS.COM.
+ The performance presented links the performance of Fiduciary Shares from
February 9, 1984 with the performance of Class A Shares on June 20, 1994,
Class B Shares on February 2, 1998 and Class C Shares on November 30,
1999. Fiduciary Share performance has been adjusted for the maximum sales
charge/contingent deferred sales charge ("CDSC") applicable to Class A,
Class B and Class C Shares, as applicable, but does not reflect the higher
Rule 12b-1 fees and expenses applicable to these Classes. With those
adjustments, performance would be lower than that shown.
++ Per prospectus. The expense ratios presented above may vary from the
expense ratios presented in other sections of this report that are based
on expenses incurred during the period covered by this report. The Fund's
Adviser has contractually agreed to waive fees and reimburse expenses in
order to keep total operating expenses for all share classes from
exceeding the net expense ratios listed in the prospectus, for the period
beginning December 1, 2009 and ending on November 30, 2010. The Adviser
may recoup from the Fund any of the fees and expenses it has waived and/or
reimbursed until the end of the third fiscal year after the end of the
fiscal year in which such waiver and/or reimbursement occurs, subject to
certain limitations. This recoupment could reduce the Fund's future total
return.
* Reflects 5.50% front-end sales charge.
** Reflects maximum CDSC of 5.00%.
*** Reflects maximum CDSC of 1.00%.
HIGHMARK(R) FUNDS 23
TOP TEN HOLDINGS
% OF
COMPANY* PORTFOLIO
APPLE 8.1%
INTERNATIONAL BUSINESS MACHINES 4.0
SALESFORCE.COM 3.1
F5 NETWORKS 2.8
LOCKHEED MARTIN 2.4
GOODRICH 2.3
GENZYME 2.2
BIOGEN IDEC 1.8
CITRIX SYSTEMS 1.7
AMGEN 1.7
FUND SECTORS
% OF
SECTOR PORTFOLIO
INFORMATION TECHNOLOGY 75.0%
HEALTH CARE 17.7
INDUSTRIAL 6.1
TELECOMMUNICATION SERVICES 1.1
REGISTERED INVESTMENT COMPANY 0.1
* EXCLUDES SHORT-TERM SECURITIES.
NYSE ARCA TECH 100 INDEX FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2010, HighMark NYSE Arca Tech 100 Index Fund
(the "Fund") produced a total return of 16.18% (Class A Shares without load). In
comparison, the Fund's benchmark, the NYSE Arca Tech 100 Index, returned 17.17%
for the same period.
FACTORS AFFECTING PERFORMANCE
The equity market stabilization and recovery that began March 9, 2009 continued
during the Fund's reporting period, although volatility increased and growth
slowed in the latter half of the reporting period. The fiscal and monetary
stimulus applied during the economic downturn and coordinated action by central
banks took time to cycle through U.S. and world economies. However, it
eventually led to GDP growth and stock market outperformance. The result was
broad-based participation in the markets' advance during the reporting period.
The Fund is passively managed to the NYSE Arca Tech 100 Index, so performance
differences between the Fund and its benchmark are primarily the result of fund
expenses and investor capital flows. Because the Fund is passively managed, it
makes no active industry or security-selection bets as an investment strategy;
therefore, the Fund's performance reflects the NYSE Arca Tech 100 Index's
exposure to various industries and the individual stocks in the index. The
Fund's 14.17% exposure to the computers and peripherals sector provided a
positive contribution of 4.63% to performance. The Fund's 5.28% exposure to the
internet software and services sector contributed 0.25% to performance.
Apple Inc. in the computers and peripherals sector and F5 Networks in the
internet services sector were top stock performers. Millipore Corp. in the
biomanufacturing sector also positively contributed to performance.
McAffee Inc. in the information technology sector and Comtech Telecommunications
in the telecommunications sector were top detractors from performance. Amgen
Inc. in the pharmaceutical sector also detracted from performance.
License Information
"Archipelago(R)", "ARCA(R)", "ARCAEX(R)", "NYSE(R)", "NYSE ARCA(SM)" and "NYSE
Arca Tech 100(SM)" are trademarks of the NYSE Group, Inc. and Archipelago
Holdings, Inc. and have been licensed for use by HighMark Funds. NYSE Arca Tech
100 Index Fund is not sponsored, endorsed, sold or promoted by Archipelago
Holdings, Inc. or by NYSE Group, Inc. Neither Archipelago Holdings, Inc. nor
NYSE Group, Inc. makes any representation or warranty regarding the advisability
of investing in securities generally, NYSE Arca Tech 100 Index Fund particularly
or the ability of NYSE Arca Tech 100 Index to track general stock market
performance.
ARCHIPELAGO HOLDINGS, INC. ("ARCA") MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND
HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE WITH RESPECT TO NYSE ARCA TECH 100 INDEX OR ANY DATA INCLUDED
THEREIN. IN NO EVENT SHALL ARCA HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE,
INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF
THE POSSIBILITY OF SUCH DAMAGES.
24 HIGHMARK(R) FUNDS
HIGHMARK NYSE ARCA TECH 100 INDEX FUND INVESTMENT OBJECTIVE
HIGHMARK NYSE ARCA TECH 100 INDEX FUND SEEKS TO PROVIDE LONG-TERM CAPITAL
APPRECIATION.
[PHOTO OF DONALD NESBITT]
LEAD PORTFOLIO MANAGER
DONALD NESBITT
ZIEGLER CAPITAL MANAGEMENT, LLC
[PHOTO OF MIKHAIL ALKHAZOV]
PORTFOLIO MANAGER
MIKHAIL ALKHAZOV
ZIEGLER CAPITAL MANAGEMENT, LLC
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK NYSE ARCA
TECH 100 INDEX FUND VERSUS THE NYSE ARCA TECH 100 INDEX AND THE MORNINGSTAR
TECHNOLOGY CATEGORY.
[LINE GRAPH]
HighMark NYSE Arca Morningstar
Tech 100 Index NYSE Arca Technology
Class A Shares Tech 100 Index++ Category
------------------ ---------------- -----------
7/00 $ 9,450 $10,000 $10,000
7/01 $ 6,271 $ 6,696 $ 4,650
7/02 $ 4,094 $ 4,414 $ 2,543
7/03 $ 5,317 $ 5,777 $ 3,222
7/04 $ 5,997 $ 6,565 $ 3,389
7/05 $ 7,120 $ 7,845 $ 3,960
7/06 $ 6,762 $ 7,493 $ 3,856
7/07 $ 8,196 $ 9,122 $ 4,916
7/08 $ 7,687 $ 8,583 $ 4,398
7/09 $ 6,730 $ 7,544 $ 3,898
7/10 $ 7,817 $ 8,839 $ 4,532
++ Indexes are unmanaged and do not incur fees, expenses or other costs.
- -----------------------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR 5 YEAR 10 YEAR SINCE EXPENSE EXPENSE
RETURN RETURN RETURN RETURN INCEPTION RATIO++ RATIO++
- -----------------------------------------------------------------------------------------------------------
Fiduciary Shares 16.46% -1.49%+ 1.94%+ -1.85%+ 9.89%+ 0.94% 0.83%
- -----------------------------------------------------------------------------------------------------------
Class A Shares 16.18% -1.56% 1.89% -1.88% 9.88% 1.19% 1.08%
- -----------------------------------------------------------------------------------------------------------
Class A Shares w/load* 9.81% -3.40% 0.74% -2.43% 9.44% 1.19% 1.08%
- -----------------------------------------------------------------------------------------------------------
Class B Shares 15.48% -2.26% 1.15% -2.60% 9.19%+ 1.69% 1.68%
- -----------------------------------------------------------------------------------------------------------
Class B Shares w/load** 10.48% -3.25% 0.77% -2.60% 9.19%+ 1.69% 1.68%
- -----------------------------------------------------------------------------------------------------------
Class C Shares 15.49% -2.25% 1.16% -2.59% 9.30%+ 1.69% 1.68%
- -----------------------------------------------------------------------------------------------------------
Class C Shares w/load*** 14.49% -2.25% 1.16% -2.59% 9.30%+ 1.69% 1.68%
- -----------------------------------------------------------------------------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. RETURNS SHOWN IN THE GRAPH
AND THE TABLE DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY
ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. THE RETURNS FOR CERTAIN
PERIODS REFLECT FEE WAIVERS AND/OR REIMBURSEMENTS IN EFFECT FOR THAT PERIOD;
ABSENT FEE WAIVERS AND REIMBURSEMENTS, PERFORMANCE WOULD HAVE BEEN LOWER.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, SO SHARES, WHEN REDEEMED,
MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. FOR MONTH-END PERFORMANCE
DATA PLEASE CALL 1-800-433-6884 OR VISIT OUR WEBSITE AT WWW.HIGHMARKFUNDS.COM.
THE FUND'S INVESTMENT IN TECHNOLOGY-RELATED COMPANIES EXPOSES THE FUND TO RISKS
ASSOCIATED WITH ECONOMIC CONDITIONS IN THE TECHNOLOGY MARKET TO A GREATER EXTENT
THAN FUNDS NOT CONCENTRATED IN THE TECHNOLOGY SECTOR. DUE TO INTENSE GLOBAL
COMPETITION, A LESS DIVERSIFIED PRODUCT LINE, AND OTHER FACTORS, COMPANIES THAT
DEVELOP AND/OR RELY ON TECHNOLOGY COULD BECOME INCREASINGLY SENSITIVE TO
DOWNSWINGS IN THE ECONOMY. IN THE PAST, SUCH COMPANIES HAVE ALSO EXPERIENCED
VOLATILE SWINGS IN DEMAND FOR THEIR PRODUCTS AND SERVICES DUE TO CHANGING
ECONOMIC CONDITIONS, RAPID TECHNOLOGICAL ADVANCES AND SHORTER PRODUCT LIFE
SPANS.
+ The performance presented links the performance of Class A Shares from
June 10, 1996 with the performance of Class B Shares on July 27, 1998,
Class C Shares on May 8, 2000 and Fiduciary Shares on July 23, 2009. With
respect to Class B and C Shares, Class A Share performance has been
adjusted for the maximum contingent deferred sales charge ("CDSC")
applicable to Class B and C Shares, as applicable, but does not reflect
the higher Rule 12b-1 fees and expenses applicable to these Classes. With
those adjustments, performance would be lower than that shown. With
respect to Fiduciary Shares, Class A Share performance has been adjusted
by removing the sales charge applicable to Class A Shares because Class A
Shares bear a sales charge while Fiduciary Shares do not bear a sales
charge, but the performance otherwise has not been adjusted to reflect the
fees and expenses applicable to Fiduciary Shares; with those adjustments,
performance would be higher than that shown.
++ Per prospectus. The expense ratios presented above may vary from the
expense ratios presented in other sections of this report that are based
on expenses incurred during the period covered by this report. The Fund's
Adviser has contractually agreed to waive fees and reimburse expenses in
order to keep total operating expenses for all share classes from
exceeding the net expense ratios listed in the prospectus, for the period
beginning December 1, 2009 and ending on November 30, 2010. The Adviser
may recoup from the Fund any of the fees and expenses it has waived and/or
reimbursed until the end of the third fiscal year after the end of the
fiscal year in which such waiver and/or reimbursement occurs, subject to
certain limitations. This recoupment could reduce the Fund's future total
return.
* Reflects 5.50% front-end sales charge.
** Reflects maximum CDSC of 5.00%.
*** Reflects maximum CDSC of 1.00%.
HIGHMARK(R) FUNDS 25
TOP TEN HOLDINGS
% OF
COMPANY* PORTFOLIO
TIBCO SOFTWARE 2.5%
EXTRA SPACE STORAGE REIT 2.3
COLUMBIA SPORTSWEAR 2.1
BENCHMARK ELECTRONICS 1.8
MANHATTAN ASSOCIATES 1.8
COMPLETE PRODUCTION SERVICES 1.7
ACTUANT, CL A 1.5
LOGMEIN 1.5
AMERIGROUP 1.5
KNOLL 1.4
FUND SECTORS
% OF
SECTOR PORTFOLIO
FINANCIALS 21.5%
INFORMATION TECHNOLOGY 20.3
INDUSTRIAL 15.8
HEALTH CARE 13.9
CONSUMER DISCRETIONARY 13.8
MATERIALS 4.6
ENERGY 4.5
REPURCHASE AGREEMENT 2.1
UTILITIES 1.7
CONSUMER STAPLES 1.5
TELECOMMUNICATION SERVICES 0.3
* EXCLUDES SHORT-TERM SECURITIES.
SMALL CAP ADVANTAGE FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2010, HighMark Small Cap Advantage Fund (the
"Fund") produced a total return of 23.32% (Fiduciary Shares). In comparison, the
Fund's benchmark, the unmanaged Russell 2000 Index, returned 18.43% for the same
period.
FACTORS AFFECTING PERFORMANCE
The equity market stabilization and recovery that began March 9, 2009 continued
during the Fund's reporting period. The fiscal and monetary stimulus applied
during the economic downturn took time to cycle through U.S. and world economies
and eventually led to GDP growth for the majority of the period. Stock market
performance reflected this recovery in economic activity and resulted in
broad-based participation in the markets' advance. However, in April 2010 the
economy showed signs of slowing, and the sovereign debt crisis in the euro zone
raised fears of further economic uncertainty and volatility.
The Fund initially sought to capitalize on the economic expansion witnessed
throughout much of the reporting period and invested in companies with lower
valuations. As the economy slowed, valuations became less important, and
companies with strong earnings were favored.
An underweight in the financials and materials sectors benefited the Fund's
performance. Specific stocks that contributed to performance were
Schweitzer-Maudit International in the tobacco sector, Complete Production
Services in the oil services sector and Polyone in the materials sector.
The consumer staples and utilities sectors detracted from the Fund's
performance. Specifically, call-center operator Teletech Holdings, armored
vehicle manufacturer Force Protection and financial services firm Penson
Worldwide performed poorly in the reporting period. Despite this, the Fund
outperformed its benchmark for the reporting period.
26 HIGHMARK(R) FUNDS
HIGHMARK SMALL CAP ADVANTAGE FUND INVESTMENT OBJECTIVE
HIGHMARK SMALL CAP ADVANTAGE FUND SEEKS TO PROVIDE LONG-TERM CAPITAL
APPRECIATION.
[PHOTO OF DAVID GOERZ]
CO-PORTFOLIO MANAGER
DAVID GOERZ
HIGHMARK CAPITAL MANAGEMENT, INC.
[PHOTO OF DEREK IZUEL]
CO-PORTFOLIO MANAGER
DEREK IZUEL
HIGHMARK CAPITAL MANAGEMENT, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK SMALL CAP
ADVANTAGE FUND VERSUS THE RUSSELL 2000 INDEX AND THE MORNINGSTAR SMALL VALUE
CATEGORY.
[LINE GRAPH]
HighMark Small Cap HighMark Small Cap Morningstar
Advantage Fund Advantage Fund Small Value Russell
Fiduciary Shares Class A Shares Category 2000 Index+
------------------ ------------------ ----------- -----------
3/1/07 $ 10,000 $ 9,452 $ 10,000 $ 10,000
7/07 $ 9,415 $ 8,894 $ 9,842 $ 9,861
7/08 $ 8,334 $ 7,850 $ 8,673 $ 9,199
7/09 $ 6,009 $ 5,646 $ 7,137 $ 7,293
7/10 $ 7,410 $ 6,936 $ 8,653 $ 8,637
+ Indexes are unmanaged and do not incur fees, expenses or other costs.
- ---------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR SINCE EXPENSE EXPENSE
RETURN RETURN INCEPTION RATIO++ RATIO++
- ---------------------------------------------------------------------------------
Fiduciary Shares 23.32% -7.67% -8.40% 1.85% 1.37%
- ---------------------------------------------------------------------------------
Class A Shares 22.86% -7.95% -8.66% 2.10% 1.62%
- ---------------------------------------------------------------------------------
Class A Shares w/load* 16.07% -9.68% -10.15% 2.10% 1.62%
- ---------------------------------------------------------------------------------
Class C Shares 22.17% -8.66% -9.30% 2.60% 2.22%
- ---------------------------------------------------------------------------------
Class C Shares w/load** 21.17% -8.66% -9.30% 2.60% 2.22%
- ---------------------------------------------------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. RETURNS SHOWN IN THE GRAPH
AND THE TABLE DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY
ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. THE RETURNS FOR CERTAIN
PERIODS REFLECT FEE WAIVERS AND/OR REIMBURSEMENTS IN EFFECT FOR THAT PERIOD;
ABSENT FEE WAIVERS AND REIMBURSEMENTS, PERFORMANCE WOULD HAVE BEEN LOWER.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, SO SHARES, WHEN REDEEMED,
MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. FOR MONTH-END PERFORMANCE
DATA PLEASE CALL 1-800-433-6884 OR VISIT OUR WEBSITE AT WWW.HIGHMARKFUNDS.COM.
IN ADDITION TO THE NORMAL RISKS ASSOCIATED WITH EQUITY INVESTING, INVESTING IN
SMALL CAP COMPANIES MAY INVOLVE ADDITIONAL RISK BECAUSE, AS SMALL CAP COMPANIES
ARE FREQUENTLY IN THE EARLY STAGES OF GROWTH, THEIR STOCKS TEND TO FLUCTUATE IN
VALUE.
++ Per prospectus. The expense ratios presented above may vary from the
expense ratios presented in other sections of this report that are based
on expenses incurred during the period covered by this report. The Fund's
Adviser has contractually agreed to waive fees and reimburse expenses in
order to keep total operating expenses for all share classes from
exceeding the net expense ratios listed in the prospectus, for the period
beginning December 1, 2009 and ending on November 30, 2010. The Adviser
may recoup from the Fund any of the fees and expenses it has waived and/or
reimbursed until the end of the third fiscal year after the end of the
fiscal year in which such waiver and/or reimbursement occurs, subject to
certain limitations. This recoupment could reduce the Fund's future total
return.
* Reflects 5.50% front-end sales charge.
** Reflects maximum CDSC of 1.00%.
HIGHMARK(R) FUNDS 27
TOP TEN HOLDINGS+
% OF
COMPANY* PORTFOLIO
UNIVERSAL AMERICAN FINANCIAL 1.4%
DELUXE 1.4
CRACKER BARREL OLD COUNTRY STORE 1.3
NEWMARKET 1.3
DEL MONTE FOODS 1.3
PAR PHARMACEUTICAL 1.2
NACCO INDUSTRIES, CL A 1.2
EL PASO ELECTRIC 1.2
ONE LIBERTY PROPERTIES REIT 1.2
HORACE MANN EDUCATORS 1.1
FUND SECTORS+
% OF
SECTOR PORTFOLIO
FINANCIALS 30.7%
INDUSTRIAL 15.0
CONSUMER DISCRETIONARY 12.8
INFORMATION TECHNOLOGY 10.8
HEALTH CARE 7.0
UTILITIES 6.4
ENERGY 5.6
CONSUMER STAPLES 5.3
MATERIALS 4.4
TELECOMMUNICATION SERVICES 1.4
REPURCHASE AGREEMENT 0.6
* EXCLUDES SHORT-TERM SECURITIES.
+ EXCLUDES SECURITIES PURCHASED WITH CASH COLLATERAL RECEIVED FROM
SECURITIES LENDING.
SMALL CAP VALUE FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2010, HighMark Small Cap Value Fund (the
"Fund") produced a total return of 25.21% (Fiduciary Shares). In comparison, the
Fund's benchmark, the unmanaged Russell 2000 Value Index, returned 20.11% for
the same period.
FACTORS AFFECTING PERFORMANCE
The equity market stabilization and recovery that began March 9, 2009 continued
during the Fund's reporting period, although volatility increased and growth
slowed in the latter half of the reporting period. For much of that period,
small cap stocks performed well. The value sector slightly outperformed the
growth sector, and so-called deep value stocks performed well, especially in the
consumer discretionary and industrial sectors. Deep value stocks are defined as
stocks that have low price multiples with positive cash flow, earnings and book
value. Since the Fund has a concentration in deep value stocks, it experienced
solid performance overall.
Sectors that contributed to performance include financials and industrials, and
more specifically the transportation and machinery subsectors within
industrials. Stock selection contributed to the Fund's performance, such as
Huntington Bancshares in the financial sector, P.A.M Transportation Services in
the transportation sector and NACCO Industries in the machinery sector.
Although the REIT sector performed well during the reporting period, the Fund's
underweight to the REIT sector detracted from performance slightly. However,
this was offset by an overweight to the solidly performing consumer
discretionary sector. Stock selection in the technology sector and health care
sector detracted from performance, specifically, United Online in the technology
sector and Skilled Healthcare Group in the health care sector.
Despite this, the Fund outperformed its benchmark for the reporting period.
28 HIGHMARK(R) FUNDS
HIGHMARK SMALL CAP VALUE FUND INVESTMENT OBJECTIVE
HIGHMARK SMALL CAP VALUE FUND SEEKS TO PROVIDE LONG-TERM CAPITAL APPRECIATION.
[PHOTO OF JOSEF LAKONISHOK]
CO-PORTFOLIO MANAGER (1)
JOSEF LAKONISHOK
LSV ASSET MANAGEMENT
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK SMALL CAP
VALUE FUND VERSUS THE RUSSELL 2000 VALUE INDEX AND THE MORNINGSTAR SMALL VALUE
CATEGORY.
[LINE GRAPH]
HighMark Small Cap HighMark Small Cap
Value Fund Value Fund Morningstar Small Russell 2000
Fiduciary Shares Class A Shares Value Category Value Index++
------------------ ------------------ ----------------- -------------
7/00 $ 10,000 $ 9,450 $ 10,000 $ 10,000
7/01 $ 9,720 $ 9,157 $ 12,645 $ 12,375
7/02 $ 9,730 $ 9,141 $ 11,994 $ 11,693
7/03 $ 11,723 $ 10,984 $ 14,010 $ 13,870
7/04 $ 14,152 $ 13,229 $ 17,183 $ 17,037
7/05 $ 18,271 $ 17,036 $ 21,391 $ 21,589
7/06 $ 18,269 $ 17,000 $ 22,187 $ 23,085
7/07 $ 19,517 $ 18,119 $ 24,692 $ 24,856
7/08 $ 16,456 $ 15,232 $ 21,791 $ 22,383
7/09 $ 13,975 $ 12,905 $ 17,932 $ 17,756
7/10 $ 17,498 $ 16,120 $ 21,742 $ 21,327
++ Indexes are unmanaged and do not incur fees, expenses or other costs.
- ------------------------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR 5 YEAR 10 YEAR SINCE EXPENSE EXPENSE
RETURN RETURN RETURN RETURN INCEPTION RATIO++ RATIO++
- ------------------------------------------------------------------------------------------------------------
Fiduciary Shares 25.21% -3.57% -0.86% 5.75% 8.23% 1.58% 1.37%
- ------------------------------------------------------------------------------------------------------------
Class A Shares 24.93% -3.81% -1.09% 5.49% 7.95% 1.83% 1.62%
- ------------------------------------------------------------------------------------------------------------
Class A Shares w/load* 18.01% -5.61% -2.21% 4.89% 7.44% 1.83% 1.62%
- ------------------------------------------------------------------------------------------------------------
Class B Shares 24.19% -4.40% -1.72% 4.81% 7.29% 2.33% 2.22%
- ------------------------------------------------------------------------------------------------------------
Class B Shares w/load** 19.19% -5.15% -1.97% 4.81% 7.29% 2.33% 2.22%
- ------------------------------------------------------------------------------------------------------------
Class C Shares 24.33% -4.36% -1.68% 4.82% 7.40%+ 2.33% 2.22%
- ------------------------------------------------------------------------------------------------------------
Class C Shares w/load*** 23.33% -4.36% -1.68% 4.82% 7.40%+ 2.33% 2.22%
- ------------------------------------------------------------------------------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. RETURNS SHOWN IN THE GRAPH
AND THE TABLE DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY
ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. THE RETURNS FOR CERTAIN
PERIODS REFLECT FEE WAIVERS AND/OR REIMBURSEMENTS IN EFFECT FOR THAT PERIOD;
ABSENT FEE WAIVERS AND REIMBURSEMENTS, PERFORMANCE WOULD HAVE BEEN LOWER.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, SO SHARES, WHEN REDEEMED,
MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. FOR MONTH-END PERFORMANCE
DATA PLEASE CALL 1-800-433-6884 OR VISIT OUR WEBSITE AT WWW.HIGHMARKFUNDS.COM.
IN ADDITION TO THE NORMAL RISKS ASSOCIATED WITH EQUITY INVESTING, INVESTING IN
SMALL CAP COMPANIES MAY INVOLVE ADDITIONAL RISK BECAUSE, AS SMALL CAP COMPANIES
ARE FREQUENTLY IN THE EARLY STAGES OF GROWTH, THEIR STOCKS TEND TO FLUCTUATE IN
VALUE.
+ The performance presented links the performance of Fiduciary Shares from
September 17, 1998 with the performance of Class C Shares on November 30,
1999. Fiduciary Shares performance has been adjusted for the contingent
deferred sales charge ("CDSC") applicable to Class C Shares but does not
reflect the higher Rule 12b-1 fees and expenses applicable to this Class.
With these adjustments, performance would be lower than that shown.
++ Per prospectus. The expense ratios presented above may vary from the
expense ratios presented in other sections of this report that are based
on expenses incurred during the period covered by this report. The Fund's
Adviser has contractually agreed to waive fees and reimburse expenses in
order to keep total operating expenses for all share classes from
exceeding the net expense ratios listed in the prospectus, for the period
beginning December 1, 2009 and ending on November 30, 2010. The Adviser
may recoup from the Fund any of the fees and expenses it has waived and/or
reimbursed until the end of the third fiscal year after the end of the
fiscal year in which such waiver and/or reimbursement occurs, subject to
certain limitations. This recoupment could reduce the Fund's future total
return.
* Reflects 5.50% front-end sales charge.
** Reflects maximum CDSC of 5.00%.
*** Reflects maximum CDSC of 1.00%.
(1) The portfolio management team also includes: Menno Vermeulen, co-portfolio
manager, and Puneet Mansharamani, co-portfolio manager.
HIGHMARK(R) FUNDS 29
TOP TEN HOLDINGS
% OF
COMPANY* PORTFOLIO
MICROSOFT 4.4%
JPMORGAN CHASE 3.7
GENERAL ELECTRIC 3.6
CHEVRON 3.6
EXXON MOBIL 3.1
BERKSHIRE HATHAWAY, CL B 3.0
MERCK 2.5
NESTLE, ADR 2.5
INTERNATIONAL BUSINESS MACHINES 2.5
PHILIP MORRIS INTERNATIONAL 2.2
FUND SECTORS
% OF
SECTOR PORTFOLIO
FINANCIALS 16.9%
INDUSTRIAL 16.1
INFORMATION TECHNOLOGY 15.3
CONSUMER STAPLES 14.8
ENERGY 14.4
CONSUMER DISCRETIONARY 9.8
HEALTH CARE 7.5
MATERIALS 1.8
TELECOMMUNICATION SERVICES 1.4
REGISTERED INVESTMENT COMPANY 1.3
UTILITIES 0.7
* EXCLUDES SHORT-TERM SECURITIES.
VALUE MOMENTUM FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2010, HighMark Value Momentum Fund (the
"Fund") produced a total return of 13.43% (Fiduciary Shares). In comparison, the
Fund's benchmark, the unmanaged S&P 500 Index, returned 13.84% for the same
period.
FACTORS AFFECTING PERFORMANCE
The equity market stabilization and recovery that began March 9, 2009 continued
during the Fund's reporting period, although volatility increased and growth
slowed in the latter half of the reporting period. The fiscal and monetary
stimulus applied during the economic downturn and coordinated action by central
banks took time to cycle through U.S. and world economies. Stock market
performance reflected this recovery in economic activity and resulted in
broad-based participation in the markets' advance during the reporting period.
However, unemployment remained stubbornly high, which called into question the
sustainability of improvements in consumer spending. Also, the expiration of the
new home buyer's tax credit exposed the fragility of the recovery in the housing
market. These factors, coupled with the euro zone sovereign debt crisis that
began in April, caused significant slowdowns in domestic and global markets.
The industrial and utility sectors contributed to Fund performance. Stock
selection in the consumer staples sector also contributed. Questar, a utility
company, performed well. Cadbury, one of the consumer staples holdings, received
a takeover bid from Kraft, adding to the Fund's performance.
The financial and technology sectors detracted from performance. Specific stocks
that detracted from performance include Bank of New York in the financial sector
and Nokia in the technology sector. Because of this, the fund underperformed its
benchmark for the reporting period.
30 HIGHMARK(R) FUNDS
HIGHMARK VALUE MOMENTUM FUND INVESTMENT OBJECTIVE
HIGHMARK VALUE MOMENTUM FUND SEEKS LONG-TERM CAPITAL GROWTH WITH
A SECONDARY OBJECTIVE OF CURRENT INCOME.
[PHOTO OF RICHARD EARNEST]
CO-PORTFOLIO MANAGER
RICHARD EARNEST
HIGHMARK CAPITAL MANAGEMENT, INC.
[PHOTO OF KEITH STRIBLING
CO-PORTFOLIO MANAGER
KEITH STRIBLING
HIGHMARK CAPITAL MANAGEMENT, INC.
[PHOTO OF TODD LOWENSTEIN
CO-PORTFOLIO MANAGER
TODD LOWENSTEIN
HIGHMARK CAPITAL MANAGEMENT, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK VALUE
MOMENTUM FUND VERSUS THE S&P 500 INDEX, RUSSELL 1000 VALUE INDEX AND THE
MORNINGSTAR LARGE VALUE CATEGORY.
[LINE GRAPH]
HighMark Value HighMark Value
Momentum Fund Momentum Fund Morningstar Large Russell 1000 S&P 500
Fiduciary Shares Class A Shares Value Category Value Index++ Index++
---------------- -------------- ----------------- ------------- -------
7/00 $10,000 $ 9,450 $10,000 $10,000 $10,000
7/01 $ 9,945 $ 9,374 $11,017 $10,874 $ 8,567
7/02 $ 7,950 $ 7,476 $ 8,926 $ 8,999 $ 6,543
7/03 $ 8,744 $ 8,204 $ 9,684 $ 9,967 $ 7,240
7/04 $10,117 $ 9,464 $11,164 $11,729 $ 8,193
7/05 $11,833 $11,040 $12,928 $13,961 $ 9,344
7/06 $12,936 $12,041 $13,990 $15,578 $ 9,847
7/07 $15,055 $13,977 $15,990 $17,679 $11,435
7/08 $13,099 $12,129 $13,589 $15,000 $10,167
7/09 $10,072 $ 9,303 $10,851 $11,559 $ 8,138
7/10 $11,424 $10,529 $12,234 $13,338 $ 9,264
++ Indexes are unmanaged and do not incur fees, expenses or other costs.
- ----------------------------------------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR 5 YEAR 10 YEAR SINCE EXPENSE EXPENSE
RETURN RETURN RETURN RETURN INCEPTION RATIO++ RATIO++
- ----------------------------------------------------------------------------------------------------------------------------
Fiduciary Shares 13.43% -8.79% -0.70% 1.34% 8.26% 1.09% 1.02%
- ----------------------------------------------------------------------------------------------------------------------------
Class A Shares 13.18% -9.01% -0.94% 1.09% 8.06%+ 1.34% 1.27%
- ----------------------------------------------------------------------------------------------------------------------------
Class A Shares w/load* 6.93% -10.71% -2.06% 0.52% 7.75%+ 1.34% 1.27%
- ----------------------------------------------------------------------------------------------------------------------------
Class B Shares 12.51% -9.55% -1.54% 0.46% 7.64%+ 1.84% 1.84%
- ----------------------------------------------------------------------------------------------------------------------------
Class B Shares w/load** 7.51% -10.24% -1.78% 0.46% 7.64%+ 1.84% 1.84%
- ----------------------------------------------------------------------------------------------------------------------------
Class C Shares 12.50% -9.54% -1.54% 0.45% 7.74%+ 1.84% 1.84%
- ----------------------------------------------------------------------------------------------------------------------------
Class C Shares w/load*** 11.50% -9.54% -1.54% 0.45% 7.74%+ 1.84% 1.84%
- ----------------------------------------------------------------------------------------------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. RETURNS SHOWN IN THE GRAPH
AND THE TABLE DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY
ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. THE RETURNS FOR CERTAIN
PERIODS REFLECT FEE WAIVERS AND/OR REIMBURSEMENTS IN EFFECT FOR THAT PERIOD;
ABSENT FEE WAIVERS AND REIMBURSEMENTS, PERFORMANCE WOULD HAVE BEEN LOWER.
PERFORMANCE PRESENTED FROM FEBRUARY 1, 1991 (COMMENCEMENT OF INVESTMENT
OPERATIONS OF FIDUCIARY SHARES) TO APRIL 25, 1997 AND APRIL 2, 1992
(COMMENCEMENT OF INVESTMENT OPERATIONS OF CLASS A SHARES) TO APRIL 25, 1997,
REFLECTS THE PERFORMANCE OF STEPSTONE VALUE MOMENTUM FUND, THE PREDECESSOR TO
HIGHMARK BALANCED FUND. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, SO
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. FOR
MONTH-END PERFORMANCE DATA PLEASE CALL 1-800-433-6884 OR VISIT OUR WEBSITE AT
WWW.HIGHMARKFUNDS.COM.
+ The performance presented links the performance of Fiduciary Shares from
February 1, 1991 with the performance of Class A Shares on April 2, 1992,
Class B Shares on February 2, 1998 and Class C Shares on November 30,
1999. Fiduciary Share performance has been adjusted for the maximum sales
charge/contingent deferred sales charge ("CDSC") applicable to Class A,
Class B and Class C Shares, as applicable, but does not reflect the higher
Rule 12b-1 fees and expenses applicable to these Classes. With those
adjustments, performance would be lower than that shown.
++ Per prospectus. The expense ratios presented above may vary from the
expense ratios presented in other sections of this report that are based
on expenses incurred during the period covered by this report. The Fund's
Adviser has contractually agreed to waive fees and reimburse expenses in
order to keep total operating expenses for all share classes from
exceeding the net expense ratios listed in the prospectus, for the period
beginning December 1, 2009 and ending on November 30, 2010. The Adviser
may recoup from the Fund any of the fees and expenses it has waived and/or
reimbursed until the end of the third fiscal year after the end of the
fiscal year in which such waiver and/or reimbursement occurs, subject to
certain limitations. This recoupment could reduce the Fund's future total
return.
* Reflects 5.50% front-end sales charge.
** Reflects maximum CDSC of 5.00%.
*** Reflects maximum CDSC of 1.00%.
HIGHMARK(R) FUNDS 31
FUND SECTORS
% OF
SECTOR PORTFOLIO
AFFILIATED EQUITY REGISTERED INVESTMENT COMPANIES 84.2%
EQUITY REGISTERED INVESTMENT COMPANIES 7.9
AFFILIATED FIXED INCOME REGISTERED INVESTMENT COMPANIES 5.9
FIXED INCOME REGISTERED INVESTMENT COMPANY 1.3
AFFILIATED MONEY MARKET REGISTERED INVESTMENT COMPANY 0.7
CAPITAL GROWTH ALLOCATION FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2010, HighMark Capital Growth Allocation Fund
(the "Fund") produced a total return of 13.84% (Class A Shares without load). In
comparison, the Fund's benchmark of an 80/15/5% blend of the S&P 500 Index, the
Barclays Capital U.S. Aggregate Bond Index and the Citigroup Bond 3-Month
Treasury Bill Index returned 12.42% over the same period.
FACTORS AFFECTING PERFORMANCE
Domestic equities rose during the 12 month period, with the S&P 500 Index
returning 13.8%. Industrial (28.7%), consumer discretionary (26.1%) and
financial (14.5%) sectors led equity indices higher. International stocks (EAFE)
rose 6.7% for the period, but emerging market equities outperformed other equity
investments, with a return of 20.2%. Fixed income returns were also positive for
the period, with the Barclays Capital Aggregate Index returning 8.9% and the
Bank of America Merrill Lynch High Yield Cash Pay Index returning a strong
24.0%.
The Fund maintained a tactical overweight to global equities and an underweight
to bonds compared to the Fund's target weights. These tactical decisions
contributed to the outperformance of the Fund versus its custom benchmark.
During the reporting period, the only appreciable change to the tactical
allocations was the addition of a tilt to the industrial sector, which was added
in the first quarter of 2010, by investing in the Fidelity Advisor Select
Industrials mutual fund.
The Fund benefited from an overweight to U.S. equities (13.8%), emerging market
equities (20.2%) and REITs (52.6%) relative to an underweight in MSCI EAFE
(developed international) countries. Overweight positions in large-cap value
stocks and small-cap stocks (18.4%) added to performance, as large-cap value
stocks outperformed large-cap growth stocks by 1.7%, and small-cap stocks
outperformed large-cap stocks by 4.6%. Within the fixed income allocation,
excess return was derived from an overweight to high-yield bonds (24.0%),
although the shorter maturity of fixed income holdings detracted from
performance. The Fund also benefited from overweight positions in technology
(13.7%) and high-yield (24%).
All of the underlying funds held by the Fund during the annual reporting period
had positive returns. Holdings in HighMark Core Equity Fund, HighMark Geneva
Small Cap Growth Fund, JP Morgan Small Cap Growth Fund, HighMark Small Cap
Advantage Fund, HighMark Small Cap Value Fund and HighMark Short Term Bond Fund
outperformed their benchmarks. HighMark Large Cap Growth Fund, HighMark Value
Momentum Fund, HighMark Fundamental Equity Fund, HighMark Large Cap Value Fund,
HighMark Enhanced Growth Fund, HighMark Geneva Mid Cap Growth Fund, HighMark
Cognitive Value Fund, HighMark International Opportunities Fund, Morgan Stanley
US Real Estate Portfolio and Eaton Vance Income Fund of Boston underperformed
their benchmarks. Fidelity Advisor Industrials Fund was not a position for the
entire period.
32 HIGHMARK(R) FUNDS
HIGHMARK CAPITAL GROWTH ALLOCATION FUND INVESTMENT OBJECTIVE
HIGHMARK CAPITAL GROWTH ALLOCATION FUND PRIMARILY SEEKS CAPITAL APPRECIATION.
[PHOTO OF DAVID GOERZ]
PORTFOLIO MANAGER
DAVID GOERZ
HIGHMARK CAPITAL MANAGEMENT, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK CAPITAL
GROWTH ALLOCATION FUND VERSUS THE S&P 500 INDEX; THE BARCLAYS CAPITAL U.S.
AGGREGATE BOND INDEX; THE CITIGROUP BOND 3-MONTH TREASURY BILL INDEX; AN
UNMANAGED BLENDED INDEX OF 80% S&P 500 INDEX, 15% BARCLAYS CAPITAL U.S.
AGGREGATE BOND INDEX AND 5% CITIGROUP BOND 3-MONTH TREASURY BILL INDEX AND THE
MORNINGSTAR LARGE BLEND CATEGORY.
[LINE GRAPH]
HighMark 80/15/5 Barclays Citigroup Bond
Capital Growth Hybrid of the Capital U.S. 3-Month
Allocation Morningstar Large following Aggregate Bond Treasury Bill
Fund Class A Shares Blend Category indexes: S&P 500 Index++ Index++ Index++
-------------------- ----------------- ------------- --------------- -------------- --------------
10/12/04 $ 9,450 $10,000 $10,000 $10,000 $10,000 $10,000
7/05 $10,511 $11,268 $11,268 $11,159 $10,226 $10,192
7/06 $11,071 $11,827 $11,495 $11,759 $10,375 $10,613
7/07 $12,643 $13,697 $13.101 $13,656 $10,954 $11,150
7/08 $11,276 $12,219 $12,074 $12,142 $11,628 $11,490
7/09 $ 9,282 $ 9,812 $10,293 $ 9,718 $12,541 $11,565
7/10 $10,568 $11,046 $11,572 $11,063 $13,658 $11,579
++ Indexes are unmanaged and do not incur fees, expenses or other costs.
- --------------------------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR 5 YEAR SINCE EXPENSE EXPENSE
RETURN RETURN RETURN INCEPTION RATIO++ RATIO++
- --------------------------------------------------------------------------------------------------------------
Fiduciary Shares 14.17% -5.54% 0.31%+ 2.12%+ 1.80% 1.32%
- --------------------------------------------------------------------------------------------------------------
Class A Shares 13.84% -5.80% 0.11% 1.94% 2.05% 1.57%
- --------------------------------------------------------------------------------------------------------------
Class A Shares w/load* 7.58% -7.56% -1.02% 0.96% 2.05% 1.57%
- --------------------------------------------------------------------------------------------------------------
Class C Shares 13.10% -6.44% -0.59% 1.24% 2.54% 2.27%
- --------------------------------------------------------------------------------------------------------------
Class C Shares w/load** 12.10% -6.44% -0.59% 1.24% 2.54% 2.27%
- --------------------------------------------------------------------------------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. RETURNS SHOWN IN THE GRAPH
AND THE TABLE DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY
ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. THE RETURNS FOR CERTAIN
PERIODS REFLECT FEE WAIVERS AND/OR REIMBURSEMENTS IN EFFECT FOR THAT PERIOD;
ABSENT FEE WAIVERS AND REIMBURSEMENTS, PERFORMANCE WOULD HAVE BEEN LOWER.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, SO SHARES, WHEN REDEEMED,
MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. FOR MONTH-END PERFORMANCE
DATA PLEASE CALL 1-800-433-6884 OR VISIT OUR WEBSITE AT WWW.HIGHMARKFUNDS.COM.
THE FUND IS STRUCTURED AS A FUND-OF-FUNDS AND IS SUBJECT TO THE SAME RISKS AS
THE UNDERLYING FUNDS IN WHICH IT INVESTS. IN ADDITION, THE FUND INDIRECTLY PAYS
A PORTION OF THE EXPENSES INCURRED BY THE UNDERLYING FUNDS. THE VALUE OF THE
FUND WILL FLUCTUATE IN RESPONSE TO CHANGES IN THE SHARE PRICES OF THE
INVESTMENTS THAT IT OWNS. THERE IS NO GUARANTEE THAT THE FUND'S PRINCIPAL VALUE
WILL INCREASE. IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND.
+ The performance presented links the performance of Class A Shares from
October 12, 2004 with performance of Fiduciary Shares which commenced
investment operations on November 15, 2006. Class A Share performance has
been adjusted by removing the sales charge applicable to Class A Shares
because Class A Shares bear a sales charge while Fiduciary Shares do not
bear a sales charge, but the performance otherwise has not been adjusted
to reflect the fees and expenses applicable to Fiduciary Shares. With
those adjustments, performance would be higher than that shown.
++ Per prospectus. The expense ratios presented above may vary from the
expense ratios presented in other sections of this report that are based
on expenses incurred during the period covered by this report. The Fund's
Adviser has contractually agreed to waive fees and reimburse expenses in
order to keep total operating expenses for all share classes from
exceeding the net expense ratios listed in the prospectus, for the period
beginning December 1, 2009 and ending on November 30, 2010. The Adviser
may recoup from the Fund any of the fees and expenses it has waived and/or
reimbursed until the end of the third fiscal year after the end of the
fiscal year in which such waiver and/or reimbursement occurs, subject to
certain limitations. This recoupment could reduce the Fund's future total
return.
* Reflects 5.50% front-end sales charge.
** Reflects maximum CDSC of 1.00%.
HIGHMARK(R) FUNDS 33
FUND SECTORS
% OF
SECTOR PORTFOLIO
AFFILIATED EQUITY REGISTERED INVESTMENT COMPANIES 90.1%
EQUITY REGISTERED INVESTMENT COMPANIES 9.5
AFFILIATED MONEY MARKET REGISTERED INVESTMENT COMPANY 0.4
DIVERSIFIED EQUITY ALLOCATION FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2010, HighMark Diversified Equity Allocation
Fund (the "Fund") produced a total return of 14.58% (Class A Shares without
load). In comparison, the Fund's benchmark, the unmanaged S&P 500 Index,
returned 13.84% over the same period.
FACTORS AFFECTING PERFORMANCE
Domestic equities rose during the 12 month period, with the S&P 500 Index
returning 13.8%. Industrial (28.7%), consumer discretionary (26.1%) and
financial (14.5%) sectors led equity indices higher. International stocks (EAFE)
rose 6.7% for the period, but emerging market equities outperformed other equity
investments, with a return of 20.2%.
The Fund maintained a tactical overweight to global equities and an underweight
to bonds compared to the Fund's target weights. These tactical decisions
contributed to the outperformance of the Fund versus its benchmark. During the
reporting period, the only appreciable change to the tactical allocations was
the addition of a tilt to the industrial sector, which was added in the first
quarter of 2010, by investing in the Fidelity Advisor Select Industrials mutual
fund.
The Fund benefited from an overweight to U.S. equities (13.8%), emerging market
equities (20.2%) and REITs (52.6%) relative to an underweight in MSCI EAFE
(developed international) countries. Overweight positions in large-cap value
stocks and small-cap stocks (18.4%) added to performance, as large-cap value
stocks outperformed large growth stocks by 1.7%, and small-cap stocks
outperformed large-cap stocks by 4.6%. The Funds also benefited from overweight
positions in technology (13.7%).
All of the underlying funds held by the Fund during the annual reporting period
had positive returns. Holdings in HighMark Core Equity Fund, HighMark Geneva
Small Cap Growth Fund, JP Morgan Small Cap Growth Fund, HighMark Small Cap
Advantage Fund and HighMark Small Cap Value Fund outperformed their benchmarks.
HighMark Large Cap Growth Fund, HighMark Value Momentum Fund, HighMark
Fundamental Equity Fund, HighMark Large Cap Value Fund, HighMark Enhanced Growth
Fund, HighMark Geneva Mid Cap Growth Fund, HighMark Cognitive Value Fund,
HighMark International Opportunities Fund and Morgan Stanley US Real Estate
Portfolio underperformed their benchmarks. Fidelity Advisor Industrials Fund was
not a position for the entire period.
34 HIGHMARK(R) FUNDS
HIGHMARK DIVERSIFIED EQUITY ALLOCATION FUND INVESTMENT OBJECTIVE
HIGHMARK DIVERSIFIED EQUITY ALLOCATION FUND SEEKS CAPITAL APPRECIATION.
[PHOTO OF DAVID GOERZ]
PORTFOLIO MANAGER
DAVID GOERZ
HIGHMARK CAPITAL MANAGEMENT, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK
DIVERSIFIED EQUITY ALLOCATION FUND VERSUS THE S&P 500 INDEX AND THE MORNINGSTAR
LARGE BLEND CATEGORY.
[LINE GRAPH]
HighMark Diversified Morningstar
Equity Allocation Fund Large Blend
Class A Shares S&P 500 Index+ Category
---------------------- -------------- -----------
11/15/06 $ 9,450 $ 10,000 $ 10,000
7/07 $10,010 $ 10,549 $ 10,612
7/08 $ 8,757 $ 9,379 $ 9,466
7/09 $ 7,013 $ 7,507 $ 7,601
7/10 $ 8,037 $ 8,546 $ 8,557
+ Indexes are unmanaged and do not incur fees, expenses or other costs.
- --------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR SINCE EXPENSE EXPENSE
RETURN RETURN INCEPTION RATIO++ RATIO++
- --------------------------------------------------------------------------------
Fiduciary Shares 14.86% -6.87% -4.08% 3.22% 1.35%
- --------------------------------------------------------------------------------
Class A Shares 14.58% -7.06% -4.28% 3.47% 1.60%
- --------------------------------------------------------------------------------
Class A Shares w/load* 8.30% -8.80% -5.73% 3.47% 1.60%
- --------------------------------------------------------------------------------
Class C Shares 13.84% -7.73% -4.95% 3.97% 2.30%
- --------------------------------------------------------------------------------
Class C Shares w/load** 12.84% -7.73% -4.95% 3.97% 2.30%
- --------------------------------------------------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. RETURNS SHOWN IN THE GRAPH
AND THE TABLE DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY
ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. THE RETURNS FOR CERTAIN
PERIODS REFLECT FEE WAIVERS AND/OR REIMBURSEMENTS IN EFFECT FOR THAT PERIOD;
ABSENT FEE WAIVERS AND REIMBURSEMENTS, PERFORMANCE WOULD HAVE BEEN LOWER.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, SO SHARES, WHEN REDEEMED,
MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. FOR MONTH-END PERFORMANCE
DATA PLEASE CALL 1-800-433-6884 OR VISIT OUR WEBSITE AT WWW.HIGHMARKFUNDS.COM.
THE FUND IS STRUCTURED AS A FUND-OF-FUNDS AND IS SUBJECT TO THE SAME RISKS AS
THE UNDERLYING FUNDS IN WHICH IT INVESTS. IN ADDITION, THE FUND INDIRECTLY PAYS
A PORTION OF THE EXPENSES INCURRED BY THE UNDERLYING FUNDS. THE VALUE OF THE
FUND WILL FLUCTUATE IN RESPONSE TO CHANGES IN THE SHARE PRICES OF THE
INVESTMENTS THAT IT OWNS. THERE IS NO GUARANTEE THAT THE FUND'S PRINCIPAL VALUE
WILL INCREASE. IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND.
++ Per prospectus. The expense ratios presented above may vary from the
expense ratios presented in other sections of this report that are based
on expenses incurred during the period covered by this report. The Fund's
Adviser has contractually agreed to waive fees and reimburse expenses in
order to keep total operating expenses for all share classes from
exceeding the net expense ratios listed in the prospectus, for the period
beginning December 1, 2009 and ending on November 30, 2010. The Adviser
may recoup from the Fund any of the fees and expenses it has waived and/or
reimbursed until the end of the third fiscal year after the end of the
fiscal year in which such waiver and/or reimbursement occurs, subject to
certain limitations. This recoupment could reduce the Fund's future total
return.
* Reflects 5.50% front-end sales charge.
** Reflects maximum CDSC of 1.00%.
HIGHMARK(R) FUNDS 35
FUND SECTORS
% OF
SECTOR PORTFOLIO
AFFILIATED EQUITY REGISTERED
INVESTMENT COMPANIES 66.1%
AFFILIATED FIXED INCOME
REGISTERED INVESTMENT
COMPANIES 22.4
EQUITY REGISTERED INVESTMENT
COMPANIES 6.0
AFFILIATED MONEY MARKET
REGISTERED INVESTMENT COMPANY 2.8
FIXED INCOME REGISTERED
INVESTMENT COMPANY 2.7
GROWTH & INCOME ALLOCATION FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2010, HighMark Growth & Income Allocation
Fund (the "Fund") produced a total return of 12.60% (Class A Shares without
load). In comparison, the Fund's benchmark of a 60/35/5% blend of the S&P 500
Index, the Barclays Capital U.S. Aggregate Bond Index and the Citigroup Bond
3-Month Treasury Bill Index returned 11.43% over the same period.
FACTORS AFFECTING PERFORMANCE
Domestic equities rose during the 12 month period, with the S&P 500 Index
returning 13.8%. Industrial (28.7%), consumer discretionary (26.1%) and
financial (14.5%) sectors led equity indices higher. International stocks (EAFE)
rose 6.7% for the period, but emerging market equities outperformed other equity
investments, with a return of 20.2%. Fixed income returns were also positive for
the period, with the Barclays Capital Aggregate Index returning 8.9% and the
Bank of America Merrill Lynch High Yield Cash Pay Index returning a strong
24.0%.
The Fund maintained a tactical overweight to global equities and an underweight
to bonds compared to the Fund's target weights. These tactical decisions
contributed to the outperformance of the Fund versus its custom benchmark.
During the reporting period, the only appreciable change to the tactical
allocations was the addition of a tilt to the industrial sector, which was added
in the first quarter of 2010, by investing in the Fidelity Advisor Select
Industrials mutual fund.
The Fund benefited from an overweight to U.S. equities (13.8%), emerging market
equities (20.2%) and REITs (52.6%) relative to an underweight in MSCI EAFE
(developed international) countries. Overweight positions in large-cap value
stocks and small-cap stocks (18.4%) added to performance, as large-cap value
stocks outperformed large-cap growth stocks by 1.7%, and small-cap stocks
outperformed large-cap stocks by 4.6%. Within the fixed income allocation,
excess return was derived from an overweight to high-yield bonds (24.0%),
although the shorter maturity of fixed income holdings detracted from
performance. The Fund also benefited from overweight positions in technology
(13.7%) and high-yield (24%).
All of the underlying funds held by the Fund during the annual reporting period
had positive returns. Holdings in HighMark Core Equity Fund, HighMark Geneva
Small Cap Growth Fund, JP Morgan Small Cap Growth Fund, HighMark Small Cap
Advantage Fund, HighMark Small Cap Value Fund and HighMark Short Term Bond Fund
outperformed their benchmarks. HighMark Large Cap Growth Fund, HighMark Value
Momentum Fund, HighMark Fundamental Equity Fund, HighMark Large Cap Value Fund,
HighMark Enhanced Growth Fund, HighMark Geneva Mid Cap Growth Fund, HighMark
Cognitive Value Fund, HighMark International Opportunities Fund, Morgan Stanley
US Real Estate Portfolio and Eaton Vance Income Fund of Boston underperformed
their benchmarks. Fidelity Advisor Industrials Fund was not a position for the
entire period.
36 HIGHMARK(R) FUNDS
HIGHMARK GROWTH & INCOME ALLOCATION FUND INVESTMENT OBJECTIVE
HIGHMARK GROWTH & INCOME ALLOCATION FUND SEEKS CAPITAL APPRECIATION AND INCOME.
[PHOTO OF DAVID GOERZ]
PORTFOLIO MANAGER
DAVID GOERZ
HIGHMARK CAPITAL MANAGEMENT, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK GROWTH &
INCOME ALLOCATION FUND VERSUS THE S&P 500 INDEX; THE BARCLAYS CAPITAL U.S.
AGGREGATE BOND INDEX; THE CITIGROUP 3-MONTH U.S. TREASURY BILL INDEX; AN
UNMANAGED BLENDED INDEX OF 60% S&P 500 INDEX, 35% BARCLAYS CAPITAL U.S.
AGGREGATE BOND INDEX AND 5% CITIGROUP 3-MONTH U.S. TREASURY BILL INDEX AND THE
MORNINGSTAR MODERATE ALLOCATION CATEGORY.
[LINE GRAPH]
HighMark Growth Barclays Capital Citigroup 3-Month
& Income Allocation Morningstar Moderate 60/35/5 Hybrid of S&P 500 US Aggregate US Treasury
Fund Class A Shares Allocation Category the following indexes: Index++ Bond Index++ Bill Index++
------------------- -------------------- ---------------------- ----------- ---------------- -----------------
10/12/04 $ 9,450 $10,000 $10,000 $10,000 $10,000 $10,000
7/05 $10,286 $10,992 $10,792 $11,159 $10,226 $10,192
7/06 $10,740 $11,534 $11,223 $11,759 $10,375 $10,613
7/07 $12,039 $12,953 $12,554 $13,656 $10,952 $11,150
7/08 $11,146 $12,155 $11,997 $12,142 $11,626 $11,490
7/09 $ 9,776 $10,723 $10,889 $ 9,719 $12,538 $11,565
7/10 $11,011 $11,998 $12,134 $11,063 $13,656 $11,579
++ Indexes are unmanaged and do not incur fees, expenses or other costs.
- ---------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR 5 YEAR SINCE EXPENSE EXPENSE
RETURN RETURN RETURN INCEPTION RATIO++ RATIO++
- ---------------------------------------------------------------------------------------------
Fiduciary Shares 12.83% -2.71% 1.55%+ 2.83%+ 1.74% 1.26%
- ---------------------------------------------------------------------------------------------
Class A Shares 12.60% -2.94% 1.37% 2.67% 1.99% 1.51%
- ---------------------------------------------------------------------------------------------
Class A Shares w/load* 6.41% -4.76% 0.22% 1.67% 1.99% 1.51%
- ---------------------------------------------------------------------------------------------
Class C Shares 11.78% -3.62% 0.65% 1.94% 2.49% 2.21%
- ---------------------------------------------------------------------------------------------
Class C Shares w/load** 10.78% -3.62% 0.65% 1.94% 2.49% 2.21%
- ---------------------------------------------------------------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. RETURNS SHOWN IN THE GRAPH
AND THE TABLE DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY
ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. THE RETURNS FOR CERTAIN
PERIODS REFLECT FEE WAIVERS AND/OR REIMBURSEMENTS IN EFFECT FOR THAT PERIOD;
ABSENT FEE WAIVERS AND REIMBURSEMENTS, PERFORMANCE WOULD HAVE BEEN LOWER.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, SO SHARES, WHEN REDEEMED,
MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. FOR MONTH-END PERFORMANCE
DATA PLEASE CALL 1-800-433-6884 OR VISIT OUR WEBSITE AT WWW.HIGHMARKFUNDS.COM.
THE FUND IS STRUCTURED AS A FUND-OF-FUNDS AND IS SUBJECT TO THE SAME RISKS AS
THE UNDERLYING FUNDS IN WHICH IT INVESTS. IN ADDITION, THE FUND INDIRECTLY PAYS
A PORTION OF THE EXPENSES INCURRED BY THE UNDERLYING FUNDS. THE VALUE OF THE
FUND WILL FLUCTUATE IN RESPONSE TO CHANGES IN THE SHARE PRICES OF THE
INVESTMENTS THAT IT OWNS. THERE IS NO GUARANTEE THAT THE FUND'S PRINCIPAL VALUE
WILL INCREASE. IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND.
+ The performance presented links the performance of Class A Shares from
October 12, 2004 with performance of Fiduciary Shares which commenced
investment operations on November 15, 2006. Class A Share performance has
been adjusted by removing the sales charge applicable to Class A Shares
because Class A Shares bear a sales charge while Fiduciary Shares do not
bear a sales charge, but the performance otherwise has not been adjusted
to reflect the fees and expenses applicable to Fiduciary Shares. With
those adjustments, performance would be higher than that shown.
++ Per prospectus. The expense ratios presented above may vary from the
expense ratios presented in other sections of this report that are based
on expenses incurred during the period covered by this report. The Fund's
Adviser has contractually agreed to waive fees and reimburse expenses in
order to keep total operating expenses for all share classes from
exceeding the net expense ratios listed in the prospectus, for the period
beginning December 1, 2009 and ending on November 30, 2010. The Adviser
may recoup from the Fund any of the fees and expenses it has waived and/or
reimbursed until the end of the third fiscal year after the end of the
fiscal year in which such waiver and/or reimbursement occurs, subject to
certain limitations. This recoupment could reduce the Fund's future total
return.
* Reflects 5.50% front-end sales charge.
** Reflects maximum CDSC of 1.00%.
HIGHMARK(R) FUNDS 37
FUND SECTORS
% OF
SECTOR PORTFOLIO
AFFILIATED FIXED INCOME
REGISTERED INVESTMENT
COMPANIES 49.1%
AFFILIATED EQUITY REGISTERED
INVESTMENT COMPANIES 39.0
FIXED INCOME REGISTERED
INVESTMENT COMPANY 4.8
AFFILIATED MONEY MARKET
REGISTERED INVESTMENT
COMPANY 4.0
EQUITY REGISTERED INVESTMENT
COMPANIES 3.1
INCOME PLUS ALLOCATION FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2010, HighMark Income Plus Allocation Fund
(the "Fund") produced a total return of 10.21% (Class A Shares without load). In
comparison, the Fund's benchmark of a 30/60/10% blend of the S&P 500 Index, the
Barclays Capital U.S. Aggregate Bond Index and the Citigroup Bond 3-Month
Treasury Bill Index returned 9.51% over the same period.
FACTORS AFFECTING PERFORMANCE
Domestic equities rose during the 12 month period, with the S&P 500 Index
returning 13.8%. Industrial (28.7%), consumer discretionary (26.1%) and
financial (14.5%) sectors led equity indices higher. International stocks (EAFE)
rose 6.7% for the period, but emerging market equities outperformed other equity
investments, with a return of 20.2%. Fixed income returns were also positive for
the period, with the Barclays Capital Aggregate Index returning 8.9% and the
Bank of America Merrill Lynch High Yield Cash Pay Index returning a strong
24.0%.
The Fund maintained a tactical overweight to global equities and an underweight
to bonds compared to the Fund's target weights. These tactical decisions
contributed to the outperformance of the Fund versus its custom benchmark.
During the reporting period, the only appreciable change to the tactical
allocations was the addition of a tilt to the industrial sector, which was added
in the first quarter of 2010, by investing in the Fidelity Advisor Select
Industrials mutual fund.
The Fund benefited from an overweight to U.S. equities (13.8%), emerging market
equities (20.2%) and REITs (52.6%) relative to an underweight in MSCI EAFE
(developed international) countries. Overweight positions in large-cap value
stocks and small-cap stocks (18.4%) added to performance, as large-cap value
stocks outperformed large-cap growth stocks by 1.7%, and small-cap stocks
outperformed large-cap stocks by 4.6%. Within the fixed income allocation,
excess return was derived from an overweight to high-yield bonds (24.0%),
although the shorter maturity of fixed income holdings detracted from
performance. The Fund also benefited from overweight positions in technology
(13.7%) and high-yield (24%).
All of the underlying funds held by the Fund during the annual reporting period
had positive returns. Holdings in HighMark Core Equity Fund, HighMark Geneva
Small Cap Growth Fund, JP Morgan Small Cap Growth Fund, HighMark Small Cap
Advantage Fund, HighMark Small Cap Value Fund and HighMark Short Term Bond Fund
outperformed their benchmarks. HighMark Large Cap Growth Fund, HighMark Value
Momentum Fund, HighMark Fundamental Equity Fund, HighMark Large Cap Value Fund,
HighMark Enhanced Growth Fund, HighMark Geneva Mid Cap Growth Fund, HighMark
Cognitive Value Fund, HighMark International Opportunities Fund, Morgan Stanley
US Real Estate Portfolio and Eaton Vance Income Fund of Boston underperformed
their benchmarks. Fidelity Advisor Industrials Fund was not a position for the
entire period.
38 HIGHMARK(R) FUNDS
HIGHMARK INCOME PLUS ALLOCATION FUND INVESTMENT OBJECTIVE
HIGHMARK INCOME PLUS ALLOCATION FUND PRIMARILY SEEKS INCOME AND SECONDARILY
SEEKS CAPITAL APPRECIATION.
[PHOTO OF DAVID GOERZ]
PORTFOLIO MANAGER
DAVID GOERZ
HIGHMARK CAPITAL MANAGEMENT, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK INCOME
PLUS ALLOCATION FUND VERSUS THE S&P 500 INDEX; THE BARCLAYS CAPITAL U.S.
AGGREGATE BOND INDEX; THE CITIGROUP 3-MONTH U.S. TREASURY BILL INDEX; AN
UNMANAGED BLENDED INDEX OF 30% S&P 500 INDEX, 60% BARCLAYS CAPITAL U.S.
AGGREGATE BOND INDEX AND 10% CITIGROUP 3-MONTH U.S. TREASURY BILL INDEX AND THE
MORNINGSTAR CONSERVATIVE ALLOCATION CATEGORY.
[LINE GRAPH]
HighMark Income 30/60/10 Hybrid Barclays Capital Citigroup Bond
Plus Allocation Morningstar Conservative of the following S&P 500 US Aggregate 3-Month US Treasury
Fund Class A Shares Allocation Category indexes: Index++ Bond Index++ Bill Index++
------------------- ------------------------- ----------------- --------- --------------- --------------------
10/12/04 $ 9,550 $10,000 $10,000 $10,000 $10,000 $10,000
Jul-05 $ 9,999 $10,581 $10,512 $11,159 $10,226 $10,192
Jul-06 $10,310 $10,955 $10,819 $11,759 $10,375 $10,613
Jul-07 $11,176 $11,830 $11,755 $13,656 $10,952 $11,150
Jul-08 $10,879 $11,528 $11,828 $12,142 $11,626 $11,490
Jul-09 $10,415 $10,940 $11,685 $ 9,718 $12,538 $11,565
Jul-10 $11,480 $12,249 $12,796 $11,063 $13,656 $11,579
++ Indexes are unmanaged and do not incur fees, expenses or other costs.
- ----------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR 5 YEAR SINCE EXPENSE EXPENSE
RETURN RETURN RETURN INCEPTION RATIO++ RATIO++
- ----------------------------------------------------------------------------------------------
Fiduciary Shares 10.54% 1.16% 2.99%+ 3.39%+ 2.31% 1.15%
- ----------------------------------------------------------------------------------------------
Class A Shares 10.21% 0.89% 2.80% 3.22% 2.56% 1.40%
- ----------------------------------------------------------------------------------------------
Class A Shares w/load* 5.25% -0.64% 1.85% 2.41% 2.56% 1.40%
- ----------------------------------------------------------------------------------------------
Class C Shares 9.51% 0.20% 2.09% 2.51% 3.06% 2.10%
- ----------------------------------------------------------------------------------------------
Class C Shares w/load** 8.51% 0.20% 2.09% 2.51% 3.06% 2.10%
- ----------------------------------------------------------------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. RETURNS SHOWN IN THE GRAPH
AND THE TABLE DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY
ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. THE RETURNS FOR CERTAIN
PERIODS REFLECT FEE WAIVERS AND/OR REIMBURSEMENTS IN EFFECT FOR THAT PERIOD;
ABSENT FEE WAIVERS AND REIMBURSEMENTS, PERFORMANCE WOULD HAVE BEEN LOWER.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, SO SHARES, WHEN REDEEMED,
MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. FOR MONTH-END PERFORMANCE
DATA PLEASE CALL 1-800-433-6884 OR VISIT OUR WEBSITE AT WWW.HIGHMARKFUNDS.COM.
THE FUND IS STRUCTURED AS A FUND-OF-FUNDS AND IS SUBJECT TO THE SAME RISKS AS
THE UNDERLYING FUNDS IN WHICH IT INVESTS. IN ADDITION, THE FUND INDIRECTLY PAYS
A PORTION OF THE EXPENSES INCURRED BY THE UNDERLYING FUNDS. THE VALUE OF THE
FUND WILL FLUCTUATE IN RESPONSE TO CHANGES IN THE SHARE PRICES OF THE
INVESTMENTS THAT IT OWNS. THERE IS NO GUARANTEE THAT THE FUND'S PRINCIPAL VALUE
WILL INCREASE. IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND.
+ The performance presented links the performance of Class A Shares from
October 12, 2004 with performance of Fiduciary Shares which commenced
investment operations on November 15, 2006. Class A Share performance has
been adjusted by removing the sales charge applicable to Class A Shares
because Class A Shares bear a sales charge while Fiduciary Shares do not
bear a sales charge, but the performance otherwise has not been adjusted
to reflect the fees and expenses applicable to Fiduciary Shares. With
those adjustments, performance would be higher than that shown.
++ Per prospectus. The expense ratios presented above may vary from the
expense ratios presented in other sections of this report that are based
on expenses incurred during the period covered by this report. The Fund's
Adviser has contractually agreed to waive fees and reimburse expenses in
order to keep total operating expenses for all share classes from
exceeding the net expense ratios listed in the prospectus, for the period
beginning December 1, 2009 and ending on November 30, 2010. The Adviser
may recoup from the Fund any of the fees and expenses it has waived and/or
reimbursed until the end of the third fiscal year after the end of the
fiscal year in which such waiver and/or reimbursement occurs, subject to
certain limitations. This recoupment could reduce the Fund's future total
return.
* Reflects 4.50% front-end sales charge.
** Reflects maximum CDSC of 1.00%.
HIGHMARK(R) FUNDS 39
TOP TEN HOLDINGS
% OF
HOLDING* PORTFOLIO
U.S. TREASURY NOTE
3.000%, 09/30/16 4.4%
FNMA
4.500%, 04/01/18 3.6
JPMORGAN CHASE
3.125%, 12/01/11 2.9
CITICORP MORTGAGE SECURITIES
SER 2003-10, CL A1
4.500%, 11/25/18 2.3
FNMA
5.500%, 03/01/20 2.1
U.S. TREASURY NOTE
1.875%, 06/30/15 2.0
COMCAST
5.700%, 07/01/19 1.9
FNMA
5.175%, 01/01/36 1.8
CENTERPOINT ENERGY
TRANSITION BOND CO. II
SER 2005-A, CL A3
5.090%, 08/01/15 1.8
TIME WARNER ENTERTAINMENT
8.375%, 03/15/23 1.8
FUND SECTORS
% OF
SECTOR PORTFOLIO
MORTGAGE-BACKED SECURITIES 17.4%
U.S. GOVERNMENT AGENCY
MORTGAGE-BACKED OBLIGATIONS 17.0
FINANCIALS 10.4
UTILITIES 7.8
ENERGY 7.5
U.S. TREASURY OBLIGATIONS 6.4
CONSUMER DISCRETIONARY 6.1
HEALTH CARE 5.8
ASSET-BACKED SECURITIES 5.3
CONSUMER STAPLES 3.7
MATERIALS 2.9
INDUSTRIAL 2.7
TELECOMMUNICATION SERVICES 2.5
FOREIGN GOVERNMENTS 2.2
REGISTERED INVESTMENT COMPANY 1.5
INFORMATION TECHNOLOGY 0.8
* EXCLUDES SHORT-TERM SECURITIES.
BOND FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2010, HighMark Bond Fund (the "Fund")
produced a total return of 10.29% (Fiduciary Shares). In comparison, the Fund's
benchmark, the unmanaged Barclays Capital U.S. Aggregate Bond Index, returned
8.91% for the same period.
FACTORS AFFECTING PERFORMANCE
The bond market recovery that began in December 2008 achieved full recovery
during the Fund's fiscal year, largely due to the continued stabilization of the
credit markets and strong corporate earnings. From the beginning of the
reporting period, August 2009, through March 2010, the bond markets advanced
across most major asset classes, although the euro zone sovereign debt crisis
that began in April 2010 caused the advancement to slow somewhat.
Credit market stabilization was largely in response to coordinated stimulus
actions by central banks across the globe. Even though these actions took place
prior to the Fund's current reporting period, the positive effects took time to
cycle through world economies, and the impact was felt during the reporting
period.
Credit quality was a key factor for much of the Fund's performance, as spreads
narrowed and lower quality securities outperformed higher quality securities
during the reporting period. This outperformance was due mainly to the recovery
in the corporate bond sector, which continued to rebound from historic lows in
the first quarter of 2009.
The Fund is double in its weighting relative to its benchmark in lower quality
corporate bonds and underweighted in higher quality Treasury bonds. The Fund's
overweight in corporate bonds relative to its benchmark is the primary reason
for its overall outperformance during the reporting period.
40 HIGHMARK(R) FUNDS
HIGHMARK BOND FUND INVESTMENT OBJECTIVE
HIGHMARK BOND FUND SEEKS TOTAL RETURN THROUGH INVESTMENTS IN FIXED-INCOME
SECURITIES.
[PHOTO OF JACK MONTGOMERY]
LEAD PORTFOLIO MANAGER
JACK MONTGOMERY
HIGHMARK CAPITAL MANAGEMENT, INC.
[PHOTO OF GREGORY LUGOSI]
PORTFOLIO MANAGER
GREGORY LUGOSI
HIGHMARK CAPITAL MANAGEMENT, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK BOND FUND
VERSUS THE BARCLAYS CAPITAL U.S. AGGREGATE BOND INDEX AND THE MORNINGSTAR
INTERMEDIATE-TERM BOND CATEGORY.
[LINE GRAPH]
Morningstar Barclays Capital
HighMark Bond Fund HighMark Bond Fund Intermediate-Term Bond U.S. Aggregate Bond
Fiduciary Shares Class A Shares Category Index++
------------------ ------------------ ---------------------- -------------------
7/00 $ 10,000 $ 9,775 $ 10,000 $ 10,000
7/01 $ 11,273 $ 11,022 $ 11,184 $ 11,268
7/02 $ 11,734 $ 11,466 $ 11,723 $ 12,116
7/03 $ 12,498 $ 12,192 $ 12,428 $ 12,773
7/04 $ 13,083 $ 12,737 $ 12,988 $ 13,391
7/05 $ 13,652 $ 13,266 $ 13,554 $ 14,033
7/06 $ 13,799 $ 13,365 $ 13,703 $ 14,238
7/07 $ 14,545 $ 14,048 $ 14,372 $ 15,029
7/08 $ 15,333 $ 14,785 $ 14,665 $ 15,954
7/09 $ 16,549 $ 15,905 $ 15,431 $ 17,206
7/10 $ 18,254 $ 17,508 $ 17,209 $ 18,739
++ Indexes are unmanaged and do not incur fees, expenses or other costs.
- ------------------------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR 5 YEAR 10 YEAR SINCE EXPENSE EXPENSE
RETURN RETURN RETURN RETURN INCEPTION RATIO++ RATIO++
- ------------------------------------------------------------------------------------------------------------
Fiduciary Shares 10.29% 7.87% 5.98% 6.20% 7.67% 0.99% 0.79%
- ------------------------------------------------------------------------------------------------------------
Class A Shares 10.08% 7.61% 5.70% 6.00% 7.57%+ 1.24% 1.04%
- ------------------------------------------------------------------------------------------------------------
Class A Shares w/load* 7.64% 6.79% 5.23% 5.76% 7.48%+ 1.24% 1.04%
- ------------------------------------------------------------------------------------------------------------
Class B Shares 9.36% 6.87% 4.99% 5.22%+ 7.30%+ 1.74% 1.72%
- ------------------------------------------------------------------------------------------------------------
Class B Shares w/load** 4.36% 5.99% 4.65% 5.22%+ 7.30%+ 1.74% 1.72%
- ------------------------------------------------------------------------------------------------------------
Class C Shares 9.58% 7.21% 5.29% 5.74%+ 7.49%+ 1.49% 1.47%
- ------------------------------------------------------------------------------------------------------------
Class C Shares w/load*** 8.58% 7.21% 5.29% 5.74%+ 7.49%+ 1.49% 1.47%
- ------------------------------------------------------------------------------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. RETURNS SHOWN IN THE GRAPH
AND THE TABLE DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY
ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. THE RETURNS FOR CERTAIN
PERIODS REFLECT FEE WAIVERS AND/OR REIMBURSEMENTS IN EFFECT FOR THAT PERIOD;
ABSENT FEE WAIVERS AND REIMBURSEMENTS, PERFORMANCE WOULD HAVE BEEN LOWER.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, SO SHARES, WHEN REDEEMED,
MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. FOR MONTH-END PERFORMANCE
DATA PLEASE CALL 1-800-433-6884 OR VISIT OUR WEBSITE AT WWW.HIGHMARKFUNDS.COM.
BONDS AND BOND FUNDS WILL TYPICALLY DECREASE IN VALUE AS INTEREST RATES RISE.
+ The performance presented links the performance of Fiduciary Shares from
February 15, 1984 with the performance of Class A Shares on June 20, 1994,
Class B Shares on November 30, 2000 and Class C Shares on November 28,
2003. Fiduciary Share performance has been adjusted for the maximum sales
charge/contingent deferred sales charge ("CDSC") applicable to Class A,
Class B and Class C Shares, as applicable, but does not reflect the higher
Rule 12b-1 fees and expenses applicable to these Classes. With those
adjustments, performance would be lower than that shown.
++ Per prospectus. The expense ratios presented above may vary from the
expense ratios presented in other sections of this report that are based
on expenses incurred during the period covered by this report. The Fund's
Adviser has contractually agreed to waive fees and reimburse expenses in
order to keep total operating expenses for all share classes from
exceeding the net expense ratios listed in the prospectus, for the period
beginning December 1, 2009 and ending on November 30, 2010. The Adviser
may recoup from the Fund any of the fees and expenses it has waived and/or
reimbursed until the end of the third fiscal year after the end of the
fiscal year in which such waiver and/or reimbursement occurs, subject to
certain limitations. This recoupment could reduce the Fund's future total
return.
* Reflects 2.25% front-end sales charge. Prior to December 1, 2005, the
front-end sales charge was 3.25%.
** Reflects maximum CDSC of 5.00%.
*** Reflects maximum CDSC of 1.00%.
HIGHMARK(R) FUNDS 41
TOP TEN HOLDINGS
% OF
HOLDING* PORTFOLIO
NORTHERN CALIFORNIA
TRANSMISSION AGENCY,
CALIFORNIA-OREGON TRANSMISSION
PROJECT
SER A, RB, AGM INSURED,
SPA DEXIA CREDIT
0.330%, 05/01/24 2.7%
SACRAMENTO COUNTY, SANITATION
DISTRICT FINANCING AUTHORITY,
SUB LIEN,
SACRAMENTO REGIONAL,
SER C, BANK OF AMERICA INSURED
0.270%, 12/01/30 2.4
IRVINE, IMPROVEMENT BOND
ACT OF 1915
LIMITED OBLIGATION REASSESMENT
SER 85-7-A, AGM INSURED
0.320%, 09/02/32 2.3
CALIFORNIA STATE, ECONOMIC RECOVERY
SER C-15, GO, AGM INSURED
0.390%, 07/01/23 2.3
SAN DIEGO, PUBLIC FACILITIES
FINANCING AUTHORITY
SEWER AUTHORITY, SER B, RB
5.500%, 05/15/23 1.7
SOUTHERN CALIFORNIA,
PUBLIC POWER AUTHORITY
POWER PROJECT REVENUE,
PALO VERDE SUB
SER A, RB, JPMORGAN CHASE INSURED
0.240%, 07/01/17 1.7
SOUTHERN CALIFORNIA,
PUBLIC POWER AUTHORITY
POWER PROJECT REVENUE,
CANYON POWER
SER A, RB
5.000%, 07/01/25 1.6
ORANGE COUNTY, SANITATION DISTRICT
SER B, COP, AGM INSURED
5.000%, 02/01/23 1.4
M-S-R PUBLIC POWER AUTHORITY
SAN JUAN PROJECT
SER I, RB, NATIONAL-RE INSURED
5.000%, 07/01/14 1.3
CALIFORNIA STATE, DEPARTMENT OF
TRANSPORTATION
FEDERAL HIGHWAY GRANT
ANTICIPATION BONDS
SER A, RB, NATIONAL-RE FGIC INSURED
5.000% 02/01/14 1.2
FUND SECTORS
% OF
SECTOR PORTFOLIO
REVENUE BONDS 45.5%
GENERAL OBLIGATIONS 38.7
CERTIFICATE OF PARTICIPATION 9.5
REGISTERED INVESTMENT COMPANY 2.9
SPECIAL ASSESSMENT 2.7
TAX ALLOCATION 0.7
* EXCLUDES SHORT-TERM SECURITIES.
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2010, HighMark California Intermediate
Tax-Free Bond Fund (the "Fund") produced a total return of 5.49% (Fiduciary
Shares). In comparison, the Fund's benchmark, the unmanaged Barclays 7-Year
Municipal Bond Index, returned 7.59% for the same period.
FACTORS AFFECTING PERFORMANCE
The first half of the Fund's reporting period was marked by the continued
stabilization of the credit markets, largely in response to coordinated stimulus
actions by central banks across the globe. Even though these actions took place
prior to the Fund's current reporting period, the positive effects took time to
cycle through world economies, and the impact was felt during the first half of
the Fund's fiscal year.
During the period, the Federal Open Market Committee left the federal funds
rate, the rate banks lend to each other, unchanged from its beginning level of
between 0% and 0.25%.
The first of the two most notable items was the outperformance of high-yield
instruments, as this area continued to rebound from depressed lows in 2008.
The second notable item was the large amount of new issuance that was brought to
market in taxable form. This was due to the federal government's "Build America
Bonds" program, which provided incentives to municipal issuers to issue bonds on
a taxable basis. Taxable municipals represented 32% of all municipal debt issued
during the second half of the Fund's reporting period.
As yields fell over the period and the market stabilized, volume and new
issuance increased, with California acting as the nation's largest state of
issuance during the period.
Initially, the Fund's performance was helped by the shorter average life of its
holdings, which was an area of outperformance on the yield curve early in the
reporting period as issues with shorter maturities performed better than issues
with longer maturities. In the latter half of the Fund's reporting period, the
shorter average life of its bonds was an area of underperformance on the yield
curve and hurt performance. Additionally, the strong credit quality of the
portfolio's holdings, which until recently provided protection, was a hindrance
during the reporting period as lower credit quality continued to outperform
higher credit quality.
As a result, the Fund underperformed its benchmark for the reporting period.
42 HIGHMARK(R) FUNDS
HIGHMARK CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND INVESTMENT OBJECTIVE
HIGHMARK CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND SEEKS TO PROVIDE HIGH
CURRENT INCOME THAT IS EXEMPT FROM FEDERAL INCOME TAX AND STATE OF CALIFORNIA
PERSONAL INCOME TAX.
[PHOTO OF ROBERT BIGELOW]
LEAD PORTFOLIO MANAGER
ROBERT BIGELOW
HIGHMARK CAPITAL MANAGEMENT, INC.
[PHOTO OF RAYMOND MOW]
PORTFOLIO MANAGER
RAYMOND MOW
HIGHMARK CAPITAL MANAGEMENT, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK CALIFORNIA
INTERMEDIATE TAX-FREE BOND FUND VERSUS THE BARCLAYS CAPITAL 7-YEAR MUNICIPAL
BOND INDEX AND THE MORNINGSTAR MUNICIPAL CALIFORNIA INTERMEDIATE/SHORT CATEGORY.
[LINE GRAPH]
HighMark California HighMark California Morningstar Municipal
Intermediate Intermediate California Barclays Capital
Tax-Free Bond Fund Tax-Free Bond Fund Intermediate/Short 7-Year Municipal
Fiduciary Shares Class A Shares Category Bond Index++
------------------- ------------------- --------------------- ----------------
7/00 $10,000 $ 9,775 $10,000 $10,000
7/01 $10,793 $10,541 $10,749 $10,917
7/02 $11,428 $11,164 $11,352 $11,696
7/03 $11,719 $11,433 $11,573 $12,149
7/04 $12,150 $11,828 $12,041 $12,776
7/05 $12,483 $12,124 $12,501 $13,282
7/06 $12,689 $12,293 $12,751 $13,568
7/07 $13,099 $12,662 $13,170 $14,102
7/08 $13,749 $13,247 $13,423 $14,924
7/09 $14,546 $13,985 $13,776 $16,120
7/10 $15,348 $14,720 $14,821 $17,343
++ Indexes are unmanaged and do not incur fees, expenses or other costs.
- ------------------------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR 5 YEAR 10 YEAR SINCE EXPENSE EXPENSE
RETURN RETURN RETURN RETURN INCEPTION RATIO++ RATIO++
- ------------------------------------------------------------------------------------------------------------
Fiduciary Shares 5.49% 5.42% 4.22% 4.38% 4.48% 1.03% 0.54%
- ------------------------------------------------------------------------------------------------------------
Class A Shares 5.26% 5.15% 3.96% 4.18% 4.34% 1.28% 0.79%
- ------------------------------------------------------------------------------------------------------------
Class A Shares w/load* 2.88% 4.37% 3.49% 3.94% 4.20% 1.28% 0.79%
- ------------------------------------------------------------------------------------------------------------
Class B Shares 4.49% 4.43% 3.22% 3.37% 3.83%+ 1.78% 1.49%
- ------------------------------------------------------------------------------------------------------------
Class B Shares w/load** -0.51% 3.51% 2.87% 3.37% 3.83%+ 1.78% 1.49%
- ------------------------------------------------------------------------------------------------------------
Class C Shares 4.82% 4.67% 3.48% 3.88%+ 4.18%+ 1.53% 1.24%
- ------------------------------------------------------------------------------------------------------------
Class C Shares w/load*** 3.82% 4.67% 3.48% 3.88%+ 4.18%+ 1.53% 1.24%
- ------------------------------------------------------------------------------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. RETURNS SHOWN IN THE GRAPH
AND THE TABLE DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY
ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. THE RETURNS FOR CERTAIN
PERIODS REFLECT FEE WAIVERS AND/OR REIMBURSEMENTS IN EFFECT FOR THAT PERIOD;
ABSENT FEE WAIVERS AND REIMBURSEMENTS, PERFORMANCE WOULD HAVE BEEN LOWER.
PERFORMANCE PRESENTED FROM OCTOBER 15, 1993 (COMMENCEMENT OF INVESTMENT
OPERATIONS OF FIDUCIARY AND CLASS A SHARES) TO APRIL 25, 1997 REFLECTS THE
PERFORMANCE OF STEPSTONE CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND, THE
PREDECESSOR TO HIGHMARK CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, SO SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. FOR MONTH-END PERFORMANCE DATA
PLEASE CALL 1-800-433-6884 OR VISIT OUR WEBSITE AT WWW.HIGHMARKFUNDS.COM.
BONDS AND BOND FUNDS WILL TYPICALLY DECREASE IN VALUE AS INTEREST RATES RISE.
+ The performance presented links the performance of Fiduciary Shares from
October 15, 1993 with the performance of Class B Shares on November 30,
1999 and Class C Shares on November 28, 2003. Fiduciary Share performance
has been adjusted for the contingent deferred sales charge ("CDSC")
applicable to Class B Shares and Class C Shares, as applicable, but does
not reflect the higher Rule 12b-1 fees and expenses applicable to these
Classes. With those adjustments, performance would be lower than that
shown.
++ Per prospectus. The expense ratios presented above may vary from the
expense ratios presented in other sections of this report that are based
on expenses incurred during the period covered by this report. The Fund's
Adviser has contractually agreed to waive fees and reimburse expenses in
order to keep total operating expenses for all share classes from
exceeding the net expense ratios listed in the prospectus, for the period
beginning December 1, 2009 and ending on November 30, 2010. The Adviser
may recoup from the Fund any of the fees and expenses it has waived and/or
reimbursed until the end of the third fiscal year after the end of the
fiscal year in which such waiver and/or reimbursement occurs, subject to
certain limitations. This recoupment could reduce the Fund's future total
return.
* Reflects 2.25% front-end sales charge.
** Reflects maximum CDSC of 5.00%.
*** Reflects maximum CDSC of 1.00%.
HIGHMARK(R) FUNDS 43
TOP TEN HOLDINGS
% OF
HOLDING* PORTFOLIO
ALASKA STATE, INTERNATIONAL
AIRPORTS SYSTEM
SER D, RB, NATIONAL-RE INSURED
5.000%, 10/01/22 2.0%
DENVER CITY & COUNTY AIRPORT REVENUE,
SER C, RB, LOC JPMORGAN CHASE
0.260%, 11/15/22 1.9
ILLINOIS STATE TOLL HIGHWAY AUTHORITY,
TOLL HIGHWAY REVENUE,
SER A-1, RB, AGM INSURED
0.320%, 01/01/31 1.9
SEATTLE, LIMITED TAX, SER B, GO
5.500%, 03/01/11 1.9
SAN RAMON VALLEY, UNIFIED
SCHOOL DISTRICT
ELECTION 2002, GO, AGM INSURED
5.250%, 08/01/18 1.8
CLARK COUNTY, LIMITED
TAX-BOND BANK, GO
5.000%, 06/01/25 1.8
ENERGY NORTHWEST, ELECTRIC REVENUE,
PROJECT NO. 1,
SER B, RB, NATIONAL-RE INSURED
6.000%, 07/01/17 1.8
CHICAGO, O'HARE INTERNATIONAL
AIRPORT,
SER A, RB, AGM INSURED
5.000%, 01/01/19 1.7
CHICO, UNIFIED SCHOOL DISTRICT,
SER B, GO, AGM INSURED
5.000%, 08/01/25 1.7
IDAHO STATE, HOUSING & FINANCE
ASSOCIATION,
GRANT & REVENUE ANTICIPATION,
FEDERAL HIGHWAY TRUST,
RB, SER A
5.250%, 07/15/24 1.6
FUND SECTORS
% OF
SECTOR PORTFOLIO
REVENUE BONDS 49.0%
GENERAL OBLIGATIONS 44.8
REGISTERED INVESTMENT COMPANY 3.2
CERTIFICATE OF PARTICIPATION 1.8
TAX ALLOCATION 1.2
* EXCLUDES SHORT-TERM SECURITIES.
NATIONAL INTERMEDIATE TAX-FREE BOND FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2010, HighMark National Intermediate Tax-Free
Bond Fund (the "Fund") produced a total return of 5.60% (Fiduciary Shares). In
comparison, the Fund's benchmark, the unmanaged Barclays 7-Year Municipal Bond
Index, returned 7.59% for the same period.
FACTORS AFFECTING PERFORMANCE
The first half of the Fund's reporting period was marked by the continued
stabilization of the credit markets, largely in response to coordinated stimulus
actions by central banks across the globe. Even though these actions took place
prior to the Fund's current reporting period, the positive effects took time to
cycle through world economies, and the impact was felt during the first half of
the Fund's fiscal year.
During the period, the Federal Open Market Committee left the federal funds
rate, the rate banks lend to each other, unchanged from its beginning level of
between 0% and 0.25%.
The first of the two most notable items was the outperformance of high-yield
instruments, as this area continued to rebound from depressed lows in 2008.
The second notable item was the large amount of new issuance that was brought to
market in taxable form. This was due to the federal government's "Build America
Bonds" program, which provided incentives to municipal issuers to issue bonds on
a taxable basis. Taxable municipals represented 32% of all municipal debt issued
during the second half of the Fund's reporting period.
As yields fell over the period and the market stabilized, volume and new
issuance increased.
Initially, the Fund's performance was helped by the shorter average life of its
holdings, which was an area of outperformance on the yield curve early in the
reporting period as issues with shorter maturities performed better than issues
with longer maturities. In the latter half of the Fund's reporting period, the
shorter average life of its bonds was an area of underperformance on the yield
curve and hurt performance. Additionally, the strong credit quality of the
portfolio's holdings, which until recently provided protection, was a hindrance
during the reporting period as lower credit quality continued to outperform
higher credit quality.
As a result, the Fund underperformed its benchmark for the reporting period.
44 HIGHMARK(R) FUNDS
HIGHMARK NATIONAL INTERMEDIATE TAX-FREE BOND FUND INVESTMENT OBJECTIVE
HIGHMARK NATIONAL INTERMEDIATE TAX-FREE BOND FUND SEEKS TO PROVIDE HIGH CURRENT
INCOME THAT IS EXEMPT FROM FEDERAL INCOME TAX.
[PHOTO OF ROBERT BIGELOW]
LEAD PORTFOLIO MANAGER
ROBERT BIGELOW
HIGHMARK CAPITAL MANAGEMENT, INC.
[PHOTO OF RAYMOND MOW]
PORTFOLIO MANAGER
RAYMOND MOW
HIGHMARK CAPITAL MANAGEMENT, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK NATIONAL
INTERMEDIATE TAX-FREE BOND FUND VERSUS THE BARCLAYS CAPITAL 7-YEAR MUNICIPAL
BOND INDEX AND THE MORNINGSTAR MUNICIPAL NATIONAL INTERMEDIATE CATEGORY.
[LINE GRAPH]
HighMark National HighMark National
Intermediate Intermediate Morningstar Municipal Barclays Capital
Tax-Free Bond Fund Tax-Free Bond Fund National Intermediate 7-Year Municipal
Fiduciary Shares+ Class A Shares+ Category Bond Index++
------------------ ------------------ --------------------- ----------------
7/00 $ 10,000 $ 9,775 $ 10,000 $ 10,000
7/01 $ 10,817 $ 10,554 $ 10,881 $ 10,917
7/02 $ 11,403 $ 11,088 $ 11,446 $ 11,696
7/03 $ 11,711 $ 11,362 $ 11,698 $ 12,149
7/04 $ 12,084 $ 11,695 $ 12,212 $ 12,776
7/05 $ 12,376 $ 11,949 $ 12,674 $ 13,282
7/06 $ 12,616 $ 12,151 $ 12,896 $ 13,568
7/07 $ 13,085 $ 12,560 $ 13,315 $ 14,102
7/08 $ 13,748 $ 13,177 $ 13,674 $ 14,924
7/09 $ 14,552 $ 13,915 $ 14,250 $ 16,120
7/10 $ 15,366 $ 14,654 $ 15,379 $ 17,343
++ Indexes are unmanaged and do not incur fees, expenses or other costs.
- ------------------------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR 5 YEAR 10 YEAR SINCE EXPENSE EXPENSE
RETURN RETURN RETURN RETURN INCEPTION RATIO++ RATIO++
- ------------------------------------------------------------------------------------------------------------
Fiduciary Shares 5.60% 5.50% 4.42% 4.39%+ 4.93%+ 1.09% 0.53%
- ------------------------------------------------------------------------------------------------------------
Class A Shares 5.33% 5.28% 4.17% 4.13%+ 4.67%+ 1.34% 0.78%
- ------------------------------------------------------------------------------------------------------------
Class A Shares w/load* 2.94% 4.48% 3.69% 3.90%+ 4.56%+ 1.34% 0.78%
- ------------------------------------------------------------------------------------------------------------
Class C Shares^ 5.08% 3.99% 3.21% 3.82%+ 4.67%+ 1.59% 1.23%
- ------------------------------------------------------------------------------------------------------------
Class C Shares w/load^** 4.08% 3.99% 3.21% 3.82%+ 4.67%+ 1.59% 1.23%
- ------------------------------------------------------------------------------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. RETURNS SHOWN IN THE GRAPH
AND THE TABLE DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY
ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. THE RETURNS FOR CERTAIN
PERIODS REFLECT FEE WAIVERS AND/OR REIMBURSEMENTS IN EFFECT FOR THAT PERIOD;
ABSENT FEE WAIVERS AND REIMBURSEMENTS, PERFORMANCE WOULD HAVE BEEN LOWER.
PERFORMANCE PRESENTED FROM FEBRUARY 17, 1989 TO OCTOBER 18, 2002 (COMMENCEMENT
OF INVESTMENT OPERATIONS OF FIDUCIARY AND CLASS A SHARES) REFLECTS THE
PERFORMANCE OF UBOC INTERMEDIATE MUNICIPAL BOND FUND, A COMMON TRUST FUND.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, SO SHARES, WHEN REDEEMED,
MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. FOR MONTH-END PERFORMANCE
DATA PLEASE CALL 1-800-433-6884 OR VISIT OUR WEBSITE AT WWW.HIGHMARKFUNDS.COM.
BONDS AND BOND FUNDS WILL TYPICALLY DECREASE IN VALUE AS INTEREST RATES RISE.
+ The performance presented links the performance of UBOC Intermediate
Municipal Bond Fund, a common trust fund (the "Common Trust Fund"), for
the period prior to its consolidation with HighMark National Intermediate
Tax-Free Bond Fund on October 18, 2002, as adjusted to reflect the fees
and expenses associated with HighMark National Intermediate Tax-Free Bond
Fund. The Common Trust Fund was not registered under the Investment
Company Act of 1940, as amended, and therefore was not subject to the
investment restrictions, limitations, and diversification requirements
imposed by such Act and the Internal Revenue Code of 1986, as amended. If
the Common Trust Fund had been registered, its performance may have been
lower.
^ For the period February 17, 1989 through November 27, 2003 for Class C
Shares, performance data is based on Fiduciary Share performance (whose
performance data includes the performance of a common trust fund for the
period prior to its consolidation with the National Intermediate Tax-Free
Bond Fund on October 18, 2002, as discussed above). From November 28, 2003
through September 26, 2007 for Class C Shares, performance data reflects
the performance of Class C Shares during that period. From September 27,
2007 through December 3, 2009, no Class C Shares were outstanding, and
performance data for Class C Shares during such period is based on
Fiduciary Share performance. Class C Shares reopened on December 1, 2009,
and from December 4, 2009 through July 31, 2010, performance data reflects
the performance of Class C Shares during that period. The performance of
the Fiduciary Shares has been adjusted for the maximum contingent deferred
sales charge ("CDSC") applicable to Class C Shares but does not reflect
Class C Shares' Rule 12b-1 fees and expenses. With those adjustments,
performance would be lower than that shown.
++ Per prospectus. The expense ratios presented above may vary from the
expense ratios presented in other sections of this report that are based
on expenses incurred during the period covered by this report. The Fund's
Adviser has contractually agreed to waive fees and reimburse expenses in
order to keep total operating expenses for all share classes from
exceeding the net expense ratios listed in the prospectus, for the period
beginning December 1, 2009 and ending on November 30, 2010. The Adviser
may recoup from the Fund any of the fees and expenses it has waived and/or
reimbursed until the end of the third fiscal year after the end of the
fiscal year in which such waiver and/or reimbursement occurs, subject to
certain limitations. This recoupment could reduce the Fund's future total
return.
* Reflects 2.25% front-end sales charge.
** Reflects maximum CDSC of 1.00%.
HIGHMARK(R) FUNDS 45
TOP TEN HOLDINGS
% OF
HOLDING* PORTFOLIO
SEARIVER MARITIME
ZERO COUPON, 09/01/12 2.6%
U.S. TREASURY NOTE
1.375%, 09/15/12 1.9
FHLMC, ARM
2.873%, 10/01/36 1.8
FHLMC, ARM
4.685%, 11/01/35 1.8
FHLMC, ARM
2.689%, 12/01/34 1.7
BURLINGTON NORTHERN SANTA FE
5.900%, 07/01/12 1.5
FNMA, ARM
5.175%,01/01/36 1.5
WELLS FARGO
4.375%, 01/31/13 1.5
GREENWICH CAPITAL COMMERCIAL
FUNDING, SER 2004-GG1, CL A5
4.883%, 06/10/36 1.4
FNMA, ARM
2.540%, 06/01/34 1.4
FUND SECTORS
% OF
SECTOR PORTFOLIO
U.S. GOVERNMENT AGENCY
MORTGAGE-BACKED OBLIGATIONS 21.2%
MORTGAGE-BACKED SECURITIES 12.5
ASSET-BACKED SECURITIES 8.9
ENERGY 8.6
FINANCIALS 7.5
UTILITIES 6.4
INDUSTRIAL 5.9
CONSUMER DISCRETIONARY 5.4
CONSUMER STAPLES 5.1
U.S. TREASURY OBLIGATION 3.9
MATERIALS 3.7
HEALTH CARE 3.6
REGISTERED INVESTMENT COMPANIES 2.5
TELECOMMUNICATION SERVICES 2.3
INFORMATION TECHNOLOGY 1.5
FOREIGN GOVERNMENTS 1.0
* EXCLUDES SHORT-TERM SECURITIES.
SHORT TERM BOND FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2010, HighMark Short Term Bond Fund (the
"Fund") produced a total return of 4.04% (Fiduciary Shares). In comparison, the
Fund's benchmark, the unmanaged Barclays Capital 1-3 Year U.S. Government/Credit
Bond Index, returned 3.71% for the same period.
FACTORS AFFECTING PERFORMANCE
The bond market recovery that began in December 2008 achieved full recovery
during the Fund's fiscal year, largely due to the continued stabilization of the
credit markets and strong corporate earnings. From the beginning of the
reporting period, August 2009, through March 2010, the bond markets advanced
across most major asset classes, although the euro zone sovereign debt crisis
that began in April 2010 caused the advancement to slow somewhat.
Credit market stabilization was largely in response to coordinated stimulus
actions by central banks across the globe. Even though these actions took place
prior to the Fund's current reporting period, the positive effects took time to
cycle through world economies, and the impact was felt during the reporting
period.
Credit quality was a key factor for much of the Fund's performance, as spreads
narrowed and lower quality securities outperformed higher quality securities
during the reporting period. This outperformance was due mainly to the recovery
in the corporate bond sector, which continued to rebound from historic lows in
first quarter of 2009.
The Fund is double in its weighting relative to its benchmark in lower quality
corporate bonds and underweighted in higher quality Treasury bonds. The Fund's
overweight in corporate bonds relative to its benchmark is the primary reason
for its overall outperformance during the reporting period.
46 HIGHMARK(R) FUNDS
HIGHMARK SHORT TERM BOND FUND INVESTMENT OBJECTIVE
HIGHMARK SHORT TERM BOND FUND SEEKS TOTAL RETURN THROUGH INVESTMENTS IN
FIXED-INCOME SECURITIES.
[PHOTO OF JACK MONTGOMERY]
LEAD PORTFOLIO MANAGER
JACK MONTGOMERY
HIGHMARK CAPITAL MANAGEMENT, INC.
[PHOTO OF GREGORY LUGOSI]
PORTFOLIO MANAGER
GREGORY LUGOSI
HIGHMARK CAPITAL MANAGEMENT, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK SHORT TERM
BOND FUND VERSUS THE BARCLAYS CAPITAL 1-3 YEAR U.S. GOVERNMENT/CREDIT BOND INDEX
AND THE MORNINGSTAR SHORT BOND CATEGORY.
[LINE GRAPH]
Barclays Capital
HighMark HighMark 1-3 Year
Short Term Bond Short Term Bond Morningstar U.S. Government/Credit
Fund Fiduciary Shares Fund Class A Shares Short Bond Category Bond Index++
--------------------- ------------------- ------------------- ----------------------
11/2/04 $ 10,000 $ 9,775 $ 10,000 $ 10,000
7/05 $ 10,034 $ 9,792 $ 10,063 $ 10,086
7/06 $ 10,306 $ 10,033 $ 10,306 $ 10,388
7/07 $ 10,801 $ 10,478 $ 10,782 $ 10,943
7/08 $ 11,363 $ 10,995 $ 10,916 $ 11,624
7/09 $ 11,959 $ 11,531 $ 11,262 $ 12,217
7/10 $ 12,443 $ 11,975 $ 11,969 $ 12,670
++ Indexes are unmanaged and do not incur fees, expenses or other costs.
- -----------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR 5 YEAR SINCE EXPENSE EXPENSE
RETURN RETURN RETURN INCEPTION RATIO++ RATIO++
- -----------------------------------------------------------------------------------------------
Fiduciary Shares 4.04% 4.83% 4.40% 3.88% 1.08% 0.71%
- -----------------------------------------------------------------------------------------------
Class A Shares 3.86% 4.56% 4.11% 3.60% 1.33% 0.96%
- -----------------------------------------------------------------------------------------------
Class A Shares w/load* 1.52% 3.75% 3.63% 3.19% 1.33% 0.96%
- -----------------------------------------------------------------------------------------------
Class C Shares 3.37% 4.09% 3.67% 3.24%+ 1.58% 1.41%
- -----------------------------------------------------------------------------------------------
Class C Shares w/load** 2.37% 4.09% 3.67% 3.24%+ 1.58% 1.41%
- -----------------------------------------------------------------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. RETURNS SHOWN IN THE GRAPH
AND THE TABLE DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY
ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. THE RETURNS FOR CERTAIN
PERIODS REFLECT FEE WAIVERS AND/OR REIMBURSEMENTS IN EFFECT FOR THAT PERIOD;
ABSENT FEE WAIVERS AND REIMBURSEMENTS, PERFORMANCE WOULD HAVE BEEN LOWER.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, SO SHARES, WHEN REDEEMED,
MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. FOR MONTH-END PERFORMANCE
DATA PLEASE CALL 1-800-433-6884 OR VISIT OUR WEBSITE AT WWW.HIGHMARKFUNDS.COM.
BONDS AND BOND FUNDS WILL TYPICALLY DECREASE IN VALUE AS INTEREST RATES RISE.
+ The performance presented links the performance of the Fiduciary Shares
from November 2, 2004 with the performance of Class C Shares on November
29, 2004. Fiduciary Share performance has been adjusted for the contingent
deferred sales charge ("CDSC") applicable to Class C Shares but does not
reflect the higher Rule 12b-1 fees and expenses applicable to this Class.
With these adjustments, performance would be lower than that shown.
++ Per prospectus. The expense ratios presented above may vary from the
expense ratios presented in other sections of this report that are based
on expenses incurred during the period covered by this report. The Fund's
Adviser has contractually agreed to waive fees and reimburse expenses in
order to keep total operating expenses for all share classes from
exceeding the net expense ratios listed in the prospectus, for the period
beginning December 1, 2009 and ending on November 30, 2010. The Adviser
may recoup from the Fund any of the fees and expenses it has waived and/or
reimbursed until the end of the third fiscal year after the end of the
fiscal year in which such waiver and/or reimbursement occurs, subject to
certain limitations. This recoupment could reduce the Fund's future total
return.
* Reflects 2.25% front-end sales charge. Prior to December 1, 2005, the
front-end sales charge was 3.25%.
** Reflects maximum CDSC of 1.00%.
HIGHMARK(R) FUNDS 47
TOP TEN HOLDINGS
% OF
COMPANY* PORTFOLIO
MADISON, COMMUNITY DEVELOPMENT
AUTHORITY REVENUE,
WISCONSIN ALUMNI RESEARCH
FUND PROJECT, RB
5.000%, 10/01/34 3.0%
SOUTHEAST WISCONSIN
PROFESSIONAL BASEBALL
PARK DISTRICT,
SALES TAX REVENUE, REFUNDING,
SER A, RB, NATIONAL-RE INSURED
5.500%, 12/15/26 2.8
GUAM POWER AUTHORITY,
SER A, RB, NATIONAL-RE
IBC BANK INSURED
5.125%, 10/01/29 2.4
PUERTO RICO SALES TAX FINANCING,
CORPORATE SALES TAX REVENUE,
FIRST SUB-SER A, RB
6.375%, 08/01/39 2.1
WISCONSIN CENTER DISTRICT,
SER 1998A, JUNIOR
DEDICATED TAX REVENUE,
RB AGM INSURED
5.250%, 12/15/23 1.8
VIRGIN ISLANDS PUBLIC
FINANCE AUTHORITY,
GROSS RECEIPTS TAXES
LOAN NOTES, RB
NATIONAL-RE FGIC INSURED
5.000%, 10/01/24 1.6
PUERTO RICO
ELECTRIC POWER AUTHORITY,
SER WW, RB
5.500%, 07/01/38 1.6
PUERTO RICO SALES TAX FINANCING,
CORPORATE SALES TAX REVENUE,
FIRST SUB-SER A, RB
5.500%, 08/01/37 1.6
GREEN BAY/BROWN COUNTY
PROFESSIONAL FOOTBALL
STADIUM, LAMBEAU
FIELD RENOVATION PROJECT,
SER A, RB, AMBAC INSURED
5.000%, 02/01/19 1.6
SOUTHEAST WISCONSIN
PROFESSIONAL BASEBALL
PARK DISTRICT,
SALES TAX REVENUE, REFUNDING,
SER A, RB, NATIONAL-RE INSURED
5.500%, 12/15/19 1.5
FUND SECTORS
% OF
SECTOR PORTFOLIO
REVENUE BONDS 90.4%
REGISTERED INVESTMENT COMPANY 4.4
GENERAL OBLIGATIONS 4.0
CERTIFICATE OF PARTICIPATION 1.1
TAX ALLOCATION 0.1
* EXCLUDES SHORT-TERM SECURITIES.
WISCONSIN TAX-EXEMPT FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2010, HighMark Wisconsin Tax-Exempt Fund (the
"Fund") produced a total return of 7.95% (Class A Shares without load). In
comparison, the Fund's benchmark, the unmanaged Barclays Capital Municipal Bond
Index, returned 9.15% for the same period.
FACTORS AFFECTING PERFORMANCE
The Fund's reporting period was marked by concerns over budget deficits and
fiscal constraints by many state governments. The equity market stabilization
and recovery that began March 9, 2009 slowed somewhat and cost-cutting measures
ensued. Debt service became a focus, as record low municipal bond yields meant
many state and local governments could refinance to lower levels, while at the
same time issuing "Build America Bonds," which are municipal bonds that carry
special tax credits and federal subsidies. During the reporting period Moody's
implemented its recalibration of municipal credit ratings to move municipal
issuers to a global rating. The new global rating system is used for both
taxable and tax-exempt securities. This new system helped performance as ratings
improved one to three notches on many of the Fund's holdings under the new
rating system.
Specific to the state of Wisconsin, the municipal bond yield experienced its
steepest spread between short-term and long-term issues. At one point during the
reporting period, there was a 4% spread between the two-year and 30-year issues.
In order to take advantage of the curve, a number of non-rated Wisconsin state
and short maturity non-rated Wisconsin issues were sold. Due to depressed
economic conditions, new issues in Wisconsin were in short supply and, as a
result, higher quality U.S. territory issues were bought by the Fund. Puerto
Rico sales tax revenue bonds and U.S. Virgin Islands revenue bonds contributed
to performance, as U.S. territory paper outperformed during the first half of
the reporting period. However, the Fund largely invests in smaller municipal
issues unique to the state of Wisconsin. These smaller issues failed to
participate as much in the market rally when compared with larger, more generic
bonds.
During the first half of the reporting period, the Fund's performance was
benefitted by the holding of longer maturity and lower credit quality bonds.
However, during the second half of the second quarter of 2010, pressure on these
issues detracted from performance. As a result, the Fund underperformed its
benchmark for the reporting period.
48 HIGHMARK(R) FUNDS
HIGHMARK WISCONSIN TAX-EXEMPT FUND INVESTMENT OBJECTIVE
HIGHMARK WISCONSIN TAX-EXEMPT FUND SEEKS TO PROVIDE INVESTORS WITH A HIGH LEVEL
OF CURRENT INCOME THAT IS EXEMPT FROM FEDERAL INCOME TAX AND WISCONSIN PERSONAL
INCOME TAX.
[PHOTO OF ERIC ZENNER]
CO-PORTFOLIO MANAGER
ERIC ZENNER
ZIEGLER CAPITAL MANAGEMENT, LLC
[PHOTO OF RICHARD SCARGILL]
CO-PORTFOLIO MANAGER
RICHARD SCARGILL
ZIEGLER CAPITAL MANAGEMENT, LLC
[PHOTO OF PAULA HORN]
CO-PORTFOLIO MANAGER
PAULA HORN
ZIEGLER CAPITAL MANAGEMENT, LLC
[PHOTO OF MICHAEL SANDERS]
CO-PORTFOLIO MANAGER
MICHAEL SANDERS
ZIEGLER CAPITAL MANAGEMENT, LLC
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK WISCONSIN
TAX-EXEMPT FUND VERSUS THE BARCLAYS CAPITAL MUNICIPAL BOND INDEX AND THE
MORNINGSTAR MUNICIPAL SINGLE STATE INTERMEDIATE CATEGORY.
[LINE GRAPH]
Morningstar
HighMark Municipal Barclays
Wisconsin Tax- Single State Capital
Exempt Fund Intermediate Municipal
Class A Shares Caregory Bond Index++
-------------- ------------ ------------
7/00 $ 9,775 $10,000 $10,000
7/01 $10,714 $10,862 $11,008
7/02 $11,343 $11,479 $11,747
7/03 $11,827 $11,769 $12,170
7/04 $12,349 $12,288 $12,874
7/05 $12,932 $12,789 $13,692
7/06 $13,192 $13,011 $14,041
7/07 $13,656 $13,457 $14,640
7/08 $13,932 $13,632 $15,055
7/09 $14,336 $14,216 $15,824
7/10 $15,477 $15,226 $17,272
++ Indexes are unmanaged and do not incur fees, expenses or other costs.
- ------------------------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR 5 YEAR 10 YEAR SINCE EXPENSE EXPENSE
RETURN RETURN RETURN RETURN INCEPTION RATIO++ RATIO++
- ------------------------------------------------------------------------------------------------------------
Class A Shares 7.95% 4.26% 3.66% 4.70% 4.54% 1.29% 0.93%
- ------------------------------------------------------------------------------------------------------------
Class A Shares w/load* 5.54% 3.46% 3.19% 4.46% 4.39% 1.29% 0.93%
- ------------------------------------------------------------------------------------------------------------
Class B Shares 7.10% 3.48% 2.88% 4.11%+ 4.17%+ 1.79% 1.63%
- ------------------------------------------------------------------------------------------------------------
Class B Shares w/load** 2.10% 2.54% 2.52% 4.11%+ 4.17%+ 1.79% 1.63%
- ------------------------------------------------------------------------------------------------------------
Class C Shares 7.37% 3.58% 2.94% 4.14%+ 4.19%+ 1.54% 1.38%
- ------------------------------------------------------------------------------------------------------------
Class C Shares w/load*** 6.37% 3.58% 2.94% 4.14%+ 4.19%+ 1.54% 1.38%
- ------------------------------------------------------------------------------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. RETURNS SHOWN IN THE GRAPH
AND THE TABLE DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY
ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. THE RETURNS FOR CERTAIN
PERIODS REFLECT FEE WAIVERS AND/OR REIMBURSEMENTS IN EFFECT FOR THAT PERIOD;
ABSENT FEE WAIVERS AND REIMBURSEMENTS, PERFORMANCE WOULD HAVE BEEN LOWER.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, SO SHARES, WHEN REDEEMED,
MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. FOR MONTH-END PERFORMANCE
DATA PLEASE CALL 1-800-433-6884 OR VISIT OUR WEBSITE AT WWW.HIGHMARKFUNDS.COM.
BONDS AND BOND FUNDS WILL TYPICALLY DECREASE IN VALUE AS INTEREST RATES RISE.
+ The performance presented links the performance of the Class A Shares from
June 13, 1994 with the performance of Class B and Class C Shares on
January 6, 2003. Class A Share performance has been adjusted for the
contingent deferred sales charge ("CDSC") applicable to Class B and Class
C Shares, as applicable, but does not reflect the higher Rule 12b-1 fees
and expenses applicable to these Classes. With these adjustments,
performance would be lower than that shown.
++ Per prospectus. The expense ratios presented above may vary from the
expense ratios presented in other sections of this report that are based
on expenses incurred during the period covered by this report. The Fund's
Adviser has contractually agreed to waive fees and reimburse expenses in
order to keep total operating expenses for all share classes from
exceeding the net expense ratios listed in the prospectus, for the period
beginning December 1, 2009 and ending on November 30, 2010. The Adviser
may recoup from the Fund any of the fees and expenses it has waived and/or
reimbursed until the end of the third fiscal year after the end of the
fiscal year in which such waiver and/or reimbursement occurs, subject to
certain limitations. This recoupment could reduce the Fund's future total
return.
* Reflects 2.25% front-end sales charge.
** Reflects maximum CDSC of 5.00%.
*** Reflects maximum CDSC of 1.00%.
HIGHMARK(R) FUNDS 49
DISCLOSURE OF FUND EXPENSES (UNAUDITED)
We believe it is important for you to understand the impact of fees regarding
your investment. All mutual funds have operating expenses. As a shareholder of a
mutual fund, you incur two types of costs: (1) transaction costs, which include,
as applicable, redemption fees; and (2) ongoing costs, which include costs for
portfolio management, administrative services, distribution fees and shareholder
reports (like this one), among others. Operating expenses, which are deducted
from a mutual fund's gross income, directly reduce the investment return of the
mutual fund. A mutual fund's expenses are expressed as a percentage of its
average net assets. This figure is known as the expense ratio. The following
examples are intended to help you understand the ongoing fees (in dollars) of
investing in each Fund and to compare these costs with those of other mutual
funds. The examples are based on an investment of $1,000 made at the beginning
of the period shown and held for the entire period.
The table below illustrates each Fund's costs in two ways.
o ACTUAL FUND RETURN. This section helps you to estimate the actual expenses
after fee waivers that you paid over the period. The "Ending Account
Value" shown is derived from the Fund's actual return, and the fourth
column shows the dollar amount that would have been paid by an investor
who started with $1,000 in the Fund. You may use the information here,
together with the amount you invested, to estimate the expenses that you
paid over the period.
To do so, simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
given for your Fund under the heading "Expenses Paid During Period."
o HYPOTHETICAL 5% RETURN. This section is intended to help you compare each
Fund's costs with those of other mutual funds. It assumes that the Fund
had a return of 5% before expenses during the year, but that the expense
ratio is unchanged. In this case, because the return used is not the
Fund's actual return, the results do not apply to your investment. The
example is useful in making comparisons because the Securities and
Exchange Commission requires all mutual funds to calculate expenses based
on a 5% return. You can assess each Fund's costs by comparing this
hypothetical example with the hypothetical examples that appear in
shareholder reports of other mutual funds.
Please note that the expenses shown in the table are meant to highlight and help
you compare ongoing costs only and do not reflect any transactional costs such
as sales charges (loads), and redemption fees, which are described in each
Fund's prospectus. If these fees were applied to your account, your costs would
be higher.
BEGINNING ENDING NET EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE AT VALUE AT EXPENSE DURING
2/1/10 7/31/10 RATIOS PERIOD*
BALANCED FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $1,040.20 0.98% $ 4.96
Class A Shares ................ 1,000.00 1,038.20 1.23% 6.22
Class B Shares ................ 1,000.00 1,035.70 1.83% 9.24
Class C Shares ................ 1,000.00 1,035.10 1.83% 9.23
HYPOTHETICAL 5% RETURN
Fiduciary Shares .............. $1,000.00 $1,019.93 0.98% $ 4.91
Class A Shares ................ 1,000.00 1,018.70 1.23% 6.16
Class B Shares ................ 1,000.00 1,015.72 1.83% 9.15
Class C Shares ................ 1,000.00 1,015.72 1.83% 9.15
- -------------------------------------------------------------------------------
COGNITIVE VALUE FUND
- -------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $1,118.10 1.13% $ 5.93
Class A Shares ................ 1,000.00 1,116.70 1.45% 7.61
Class C Shares ................ 1,000.00 1,112.30 2.05% 10.74
Class M Shares ................ 1,000.00 1,119.50 1.05% 5.52
HYPOTHETICAL 5% RETURN
Fiduciary Shares .............. $1,000.00 $1,019.19 1.13% $ 5.66
Class A Shares ................ 1,000.00 1,017.60 1.45% 7.25
Class C Shares ................ 1,000.00 1,014.63 2.05% 10.24
Class M Shares ................ 1,000.00 1,019.59 1.05% 5.26
BEGINNING ENDING NET EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE AT VALUE AT EXPENSE DURING
2/1/10 7/31/10 RATIOS PERIOD*
CORE EQUITY FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $1,028.60 0.95% $ 4.78
Class A Shares ................ 1,000.00 1,028.90 1.23% 6.19
Class B Shares ................ 1,000.00 1,025.30 1.83% 9.19
Class C Shares ................ 1,000.00 1,025.60 1.83% 9.19
HYPOTHETICAL 5% RETURN
Fiduciary Shares .............. $1,000.00 $1,020.08 0.95% $ 4.76
Class A Shares ................ 1,000.00 1,018.70 1.23% 6.16
Class B Shares ................ 1,000.00 1,015.72 1.83% 9.15
Class C Shares ................ 1,000.00 1,015.72 1.83% 9.15
- -------------------------------------------------------------------------------
ENHANCED GROWTH FUND
- -------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $1,056.30 1.06% $ 5.40
Class A Shares ................ 1,000.00 1,053.60 1.43% 7.28
Class C Shares ................ 1,000.00 1,051.10 2.03% 10.32
Class M Shares ................ 1,000.00 1,056.30 1.03% 5.25
HYPOTHETICAL 5% RETURN
Fiduciary Shares .............. $1,000.00 $1,019.54 1.06% $ 5.31
Class A Shares ................ 1,000.00 1,017.70 1.43% 7.15
Class C Shares ................ 1,000.00 1,014.73 2.03% 10.14
Class M Shares ................ 1,000.00 1,019.69 1.03% 5.16
50 HIGHMARK(R) FUNDS
BEGINNING ENDING NET EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE AT VALUE AT EXPENSE DURING
2/1/10 7/31/10 RATIOS PERIOD*
- --------------------------------------------------------------------------------
EQUITY INCOME FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $1,042.90 0.90% $ 4.56
Class A Shares ................ 1,000.00 1,042.40 1.15% 5.82
Class B Shares ................ 1,000.00 1,039.00 1.75% 8.85
Class C Shares ................ 1,000.00 1,039.50 1.75% 8.85
HYPOTHETICAL 5% RETURN
Fiduciary Shares .............. $1,000.00 $1,020.33 0.90% $ 4.51
Class A Shares ................ 1,000.00 1,019.09 1.15% 5.76
Class B Shares ................ 1,000.00 1,016.12 1.75% 8.75
Class C Shares ................ 1,000.00 1,016.12 1.75% 8.75
- --------------------------------------------------------------------------------
FUNDAMENTAL EQUITY FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $1,034.90 0.89% $ 4.49
Class A Shares ................ 1,000.00 1,033.20 1.22% 6.15
Class C Shares ................ 1,000.00 1,030.50 1.82% 9.16
HYPOTHETICAL 5% RETURN
Fiduciary Shares .............. $1,000.00 $1,020.38 0.89% $ 4.46
Class A Shares ................ 1,000.00 1,018.74 1.22% 6.11
Class C Shares ................ 1,000.00 1,015.77 1.82% 9.10
- --------------------------------------------------------------------------------
GENEVA MID CAP GROWTH FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $1,105.80 1.11% $ 5.80
Class A Shares ................ 1,000.00 1,104.70 1.38% 7.20
Class B Shares ................ 1,000.00 1,101.10 1.98% 10.31
Class C Shares ................ 1,000.00 1,101.30 1.98% 10.32
HYPOTHETICAL 5% RETURN
Fiduciary Shares .............. $1,000.00 $1,019.29 1.11% $ 5.56
Class A Shares ................ 1,000.00 1,017.95 1.38% 6.90
Class B Shares ................ 1,000.00 1,014.98 1.98% 9.89
Class C Shares ................ 1,000.00 1,014.98 1.98% 9.89
- --------------------------------------------------------------------------------
GENEVA SMALL CAP GROWTH FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $1,119.50 1.36% $ 7.15
Class A Shares ................ 1,000.00 1,118.30 1.62% 8.51
Class C Shares ................ 1,000.00 1,115.00 2.22% 11.64
HYPOTHETICAL 5% RETURN
Fiduciary Shares .............. $1,000.00 $1,018.05 1.36% $ 6.80
Class A Shares ................ 1,000.00 1,016.76 1.62% 8.10
Class C Shares ................ 1,000.00 1,013.79 2.22% 11.08
- --------------------------------------------------------------------------------
INTERNATIONAL OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $1,012.80 1.44% $ 7.19
Class A Shares ................ 1,000.00 1,012.80 1.60% 7.99
Class C Shares ................ 1,000.00 1,009.70 2.28% 11.36
Class M Shares ................ 1,000.00 1,014.40 1.28% 6.39
HYPOTHETICAL 5% RETURN
Fiduciary Shares .............. $1,000.00 $1,017.65 1.44% $ 7.20
Class A Shares ................ 1,000.00 1,016.86 1.60% 8.00
Class C Shares ................ 1,000.00 1,013.49 2.28% 11.38
Class M Shares ................ 1,000.00 1,018.45 1.28% 6.41
BEGINNING ENDING NET EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE AT VALUE AT EXPENSE DURING
2/1/10 7/31/10 RATIOS PERIOD*
- --------------------------------------------------------------------------------
LARGE CAP GROWTH FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $1,040.10 0.99% $ 5.01
Class A Shares ................ 1,000.00 1,038.50 1.25% 6.32
Class B Shares ................ 1,000.00 1,036.00 1.85% 9.34
Class C Shares ................ 1,000.00 1,036.20 1.85% 9.34
HYPOTHETICAL 5% RETURN
Fiduciary Shares .............. $1,000.00 $1,019.89 0.99% $ 4.96
Class A Shares ................ 1,000.00 1,018.60 1.25% 6.26
Class B Shares ................ 1,000.00 1,015.62 1.85% 9.25
Class C Shares ................ 1,000.00 1,015.62 1.85% 9.25
- --------------------------------------------------------------------------------
LARGE CAP VALUE FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $1,029.20 0.97% $ 4.88
Class A Shares ................ 1,000.00 1,027.80 1.23% 6.18
Class B Shares ................ 1,000.00 1,024.80 1.83% 9.19
Class C Shares ................ 1,000.00 1,024.90 1.83% 9.19
HYPOTHETICAL 5% RETURN
Fiduciary Shares .............. $1,000.00 $1,019.98 0.97% $ 4.86
Class A Shares ................ 1,000.00 1,018.70 1.23% 6.16
Class B Shares ................ 1,000.00 1,015.72 1.83% 9.15
Class C Shares ................ 1,000.00 1,015.72 1.83% 9.15
- --------------------------------------------------------------------------------
NYSE ARCA TECH 100 INDEX FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $1,089.00 0.83% $ 4.30
Class A Shares ................ 1,000.00 1,087.90 1.08% 5.59
Class B Shares ................ 1,000.00 1,084.50 1.68% 8.68
Class C Shares ................ 1,000.00 1,084.80 1.68% 8.68
HYPOTHETICAL 5% RETURN
Fiduciary Shares .............. $1,000.00 $1,020.68 0.83% $ 4.16
Class A Shares ................ 1,000.00 1,019.44 1.08% 5.41
Class B Shares ................ 1,000.00 1,016.46 1.68% 8.40
Class C Shares ................ 1,000.00 1,016.46 1.68% 8.40
- --------------------------------------------------------------------------------
SMALL CAP ADVANTAGE FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $1,111.60 1.30% $ 6.81
Class A Shares ................ 1,000.00 1,109.70 1.60% 8.37
Class C Shares ................ 1,000.00 1,106.60 2.20% 11.49
HYPOTHETICAL 5% RETURN
Fiduciary Shares .............. $1,000.00 $1,018.35 1.30% $ 6.51
Class A Shares ................ 1,000.00 1,016.86 1.60% 8.00
Class C Shares ................ 1,000.00 1,013.88 2.20% 10.99
- --------------------------------------------------------------------------------
SMALL CAP VALUE FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $1,109.70 1.24% $ 6.49
Class A Shares ................ 1,000.00 1,109.00 1.51% 7.90
Class B Shares ................ 1,000.00 1,104.90 2.11% 11.01
Class C Shares ................ 1,000.00 1,105.70 2.11% 11.02
HYPOTHETICAL 5% RETURN
Fiduciary Shares .............. $1,000.00 $1,018.65 1.24% $ 6.21
Class A Shares ................ 1,000.00 1,017.31 1.51% 7.55
Class B Shares ................ 1,000.00 1,014.33 2.11% 10.54
Class C Shares ................ 1,000.00 1,014.33 2.11% 10.54
HIGHMARK(R) FUNDS 51
DISCLOSURE OF FUND EXPENSES (UNAUDITED) (CONCLUDED)
BEGINNING ENDING NET EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE AT VALUE AT EXPENSE DURING
2/1/10 7/31/10 RATIOS PERIOD*
- --------------------------------------------------------------------------------
VALUE MOMENTUM FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $1,018.30 1.00% $ 5.00
Class A Shares ................ 1,000.00 1,016.80 1.25% 6.25
Class B Shares ................ 1,000.00 1,013.60 1.85% 9.24
Class C Shares ................ 1,000.00 1,013.80 1.85% 9.24
HYPOTHETICAL 5% RETURN
Fiduciary Shares .............. $1,000.00 $1,019.84 1.00% $ 5.01
Class A Shares ................ 1,000.00 1,018.60 1.25% 6.26
Class B Shares ................ 1,000.00 1,015.62 1.85% 9.25
Class C Shares ................ 1,000.00 1,015.62 1.85% 9.25
- --------------------------------------------------------------------------------
CAPITAL GROWTH ALLOCATION FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $1,049.30 0.32% $ 1.63
Class A Shares ................ 1,000.00 1,047.50 0.57% 2.89
Class C Shares ................ 1,000.00 1,044.00 1.28% 6.49
HYPOTHETICAL 5% RETURN
Fiduciary Shares .............. $1,000.00 $1,023.21 0.32% $ 1.61
Class A Shares ................ 1,000.00 1,021.97 0.57% 2.86
Class C Shares ................ 1,000.00 1,018.45 1.28% 6.41
- --------------------------------------------------------------------------------
DIVERSIFIED EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $1,050.40 0.33% $ 1.68
Class A Shares ................ 1,000.00 1,049.30 0.57% 2.90
Class C Shares ................ 1,000.00 1,046.00 1.27% 6.44
HYPOTHETICAL 5% RETURN
Fiduciary Shares .............. $1,000.00 $1,023.16 0.33% $ 1.66
Class A Shares ................ 1,000.00 1,021.97 0.57% 2.86
Class C Shares ................ 1,000.00 1,018.50 1.27% 6.36
- --------------------------------------------------------------------------------
GROWTH & INCOME ALLOCATION FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $1,046.20 0.33% $ 1.67
Class A Shares ................ 1,000.00 1,045.70 0.57% 2.89
Class C Shares ................ 1,000.00 1,041.70 1.28% 6.48
HYPOTHETICAL 5% RETURN
Fiduciary Shares .............. $1,000.00 $1,023.16 0.33% $ 1.66
Class A Shares ................ 1,000.00 1,021.97 0.57% 2.86
Class C Shares ................ 1,000.00 1,018.45 1.28% 6.41
- --------------------------------------------------------------------------------
INCOME PLUS ALLOCATION FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $1,039.40 0.33% $ 1.67
Class A Shares ................ 1,000.00 1,038.10 0.57% 2.88
Class C Shares ................ 1,000.00 1,034.90 1.28% 6.46
HYPOTHETICAL 5% RETURN
Fiduciary Shares .............. $1,000.00 $1,023.16 0.33% $ 1.66
Class A Shares ................ 1,000.00 1,021.97 0.57% 2.86
Class C Shares ................ 1,000.00 1,018.45 1.28% 6.41
BEGINNING ENDING NET EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE AT VALUE AT EXPENSE DURING
2/1/10 7/31/10 RATIOS PERIOD*
- --------------------------------------------------------------------------------
BOND FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $1,049.10 0.78% $ 3.96
Class A Shares ................ 1,000.00 1,048.60 1.03% 5.23
Class B Shares ................ 1,000.00 1,044.20 1.71% 8.67
Class C Shares ................ 1,000.00 1,045.70 1.46% 7.41
HYPOTHETICAL 5% RETURN
Fiduciary Shares .............. $1,000.00 $1,020.93 0.78% $ 3.91
Class A Shares ................ 1,000.00 1,019.69 1.03% 5.16
Class B Shares ................ 1,000.00 1,016.31 1.71% 8.55
Class C Shares ................ 1,000.00 1,017.55 1.46% 7.30
- --------------------------------------------------------------------------------
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $1,027.40 0.53% $ 2.66
Class A Shares ................ 1,000.00 1,026.30 0.78% 3.92
Class B Shares ................ 1,000.00 1,022.50 1.48% 7.42
Class C Shares ................ 1,000.00 1,024.20 1.23% 6.17
HYPOTHETICAL 5% RETURN
Fiduciary Shares .............. $1,000.00 $1,022.17 0.53% $ 2.66
Class A Shares ................ 1,000.00 1,020.93 0.78% 3.91
Class B Shares ................ 1,000.00 1,017.46 1.48% 7.40
Class C Shares ................ 1,000.00 1,018.70 1.23% 6.16
- --------------------------------------------------------------------------------
NATIONAL INTERMEDIATE TAX-FREE BOND FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $1,028.90 0.51% $ 2.57
Class A Shares ................ 1,000.00 1,027.60 0.76% 3.82
Class C Shares ................ 1,000.00 1,025.50 1.21% 6.08
HYPOTHETICAL 5% RETURN
Fiduciary Shares .............. $1,000.00 $1,022.27 0.51% $ 2.56
Class A Shares ................ 1,000.00 1,021.03 0.76% 3.81
Class C Shares ................ 1,000.00 1,018.79 1.21% 6.06
- --------------------------------------------------------------------------------
SHORT TERM BOND FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $1,014.20 0.66% $ 3.30
Class A Shares ................ 1,000.00 1,012.80 0.94% 4.69
Class C Shares ................ 1,000.00 1,011.40 1.39% 6.93
HYPOTHETICAL 5% RETURN
Fiduciary Shares .............. $1,000.00 $1,021.52 0.66% $ 3.31
Class A Shares ................ 1,000.00 1,020.13 0.94% 4.71
Class C Shares ................ 1,000.00 1,017.90 1.39% 6.95
- --------------------------------------------------------------------------------
WISCONSIN TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Class A Shares ................ $1,000.00 $1,034.00 0.90% $ 4.54
Class B Shares ................ 1,000.00 1,029.50 1.60% 8.05
Class C Shares ................ 1,000.00 1,030.90 1.35% 6.80
HYPOTHETICAL 5% RETURN
Class A Shares ................ $1,000.00 $1,020.33 0.90% $ 4.51
Class B Shares ................ 1,000.00 1,016.86 1.60% 8.00
Class C Shares ................ 1,000.00 1,018.10 1.35% 6.76
- --------------------
* Expenses are equal to each Fund's net annualized expense ratio multiplied
by the average account value over the period, multiplied by 181/365 (to
reflect the one half year period).
52 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
BALANCED FUND
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - 65.1%+
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 5.9%
Carnival 3,725 $ 129,183
International Game Technology 3,760 57,302
Kohl's * 5,007 238,784
Las Vegas Sands * 7,980 214,343
NIKE, Cl B 2,210 162,744
Nordstrom 3,210 109,140
Staples 6,525 132,653
Starwood Hotels & Resorts Worldwide 2,890 140,021
Tiffany & Co. 2,290 96,340
Yum! Brands 3,300 136,290
------------
1,416,800
------------
CONSUMER STAPLES - 8.4%
Altria Group 9,600 212,736
Anheuser-Busch InBev NV, SP ADR 1,790 94,977
Avon Products 3,880 120,784
CVS Caremark 10,095 309,816
Kellogg 3,095 154,905
Mead Johnson Nutrition 1,750 92,995
Philip Morris International 6,330 323,083
Procter & Gamble 6,005 367,266
Wal-Mart Stores 6,985 357,562
------------
2,034,124
------------
ENERGY - 10.2%
BG Group PLC, SP ADR 2,650 214,518
Cameron International * 5,095 201,711
EOG Resources 1,540 150,150
Exxon Mobil 7,005 418,072
Occidental Petroleum 5,240 408,353
QEP Resources * 6,260 215,469
Schlumberger 3,790 226,111
Suncor Energy (Canada) 12,440 409,898
Tenaris, ADR 3,680 147,384
Ultra Petroleum * 1,530 64,826
------------
2,456,492
------------
FINANCIALS - 7.1%
Goldman Sachs Group 2,805 423,050
Greenhill & Co. 1,225 83,361
Hanover Insurance Group 8,420 369,049
JPMorgan Chase 10,620 427,774
Wells Fargo 15,100 418,723
------------
1,721,957
------------
HEALTH CARE - 5.3%
Gilead Sciences * 7,770 258,896
Johnson & Johnson 4,695 272,733
Merck 6,760 232,950
Pfizer 20,817 312,255
Zimmer Holdings * 3,780 200,302
------------
1,277,136
------------
- --------------------------------------------------------------------------------
Description Shares/Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
INDUSTRIAL - 8.4%
3M 2,730 $ 233,524
Danaher 18,670 717,115
Deere 3,235 215,710
Donaldson 5,250 249,218
Emerson Electric 2,180 107,997
General Electric 6,100 98,332
Rockwell Collins 4,260 243,502
Stericycle * 2,780 175,140
------------
2,040,538
------------
INFORMATION TECHNOLOGY - 13.8%
Accenture, Cl A 2,380 94,343
Analog Devices 5,800 172,318
Apple * 1,530 393,593
Autodesk * 3,620 106,935
Broadcom, Cl A 5,490 197,805
Cisco Systems * 19,905 459,208
Citrix Systems * 3,945 217,054
EMC * 5,510 109,043
Google, Cl A * 830 402,426
Intel 17,515 360,809
Linear Technology 5,975 190,483
Microsoft 8,590 221,708
Oracle 13,680 323,395
QUALCOMM 2,640 100,531
------------
3,349,651
------------
MATERIALS - 4.4%
Ecolab 7,710 377,096
Praxair 7,120 618,158
Weyerhaeuser 4,160 67,475
------------
1,062,729
------------
UTILITIES - 1.6%
Exelon 2,315 96,836
ITC Holdings 1,765 100,146
Questar 6,460 106,267
Wisconsin Energy 1,545 83,863
------------
387,112
------------
TOTAL COMMON STOCK
(Cost $13,005,723)
15,746,539
------------
- --------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - 14.1%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 2.1%
Comcast
5.700%, 07/01/19 $ 150,000 167,671
Macy's Retail Holdings
5.875%, 01/15/13 50,000 52,000
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 53
SCHEDULE OF INVESTMENTS
JULY 31, 2010
BALANCED FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - (CONTINUED)
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY (continued)
Staples
9.750%, 01/15/14 $ 50,000 $ 61,596
Time Warner Entertainment
8.375%, 03/15/23 175,000 226,543
------------
507,810
------------
CONSUMER STAPLES - 0.4%
Kroger
5.500%, 02/01/13 90,000 98,231
------------
ENERGY - 2.2%
Colorado Interstate Gas
6.800%, 11/15/15 112,000 130,569
ConocoPhillips
5.750%, 02/01/19 100,000 116,325
Energy Transfer Partners
9.700%, 03/15/19 100,000 125,851
Enterprise Products Operating
5.200%, 09/01/20 150,000 160,691
------------
533,436
------------
FINANCIALS - 4.0%
Bank of America, MTN
5.650%, 05/01/18 100,000 104,682
GE Global Insurance
7.750%, 06/15/30 200,000 224,839
JPMorgan Chase
3.125%, 12/01/11 100,000 103,444
JPMorgan Chase Bank
6.000%, 10/01/17 125,000 140,489
Lehman Brothers Holdings, MTN (A)
5.625%, 01/24/13 125,000 27,031
Morgan Stanley
6.750%, 04/15/11 100,000 103,983
Wachovia Capital Trust I
7.640%, 01/15/27 100,000 98,189
Wells Fargo
3.000%, 12/09/11 150,000 155,158
------------
957,815
------------
HEALTH CARE - 1.3%
Boston Scientific
6.000%, 01/15/20 50,000 51,784
HCA
7.875%, 02/01/11 40,000 40,500
UnitedHealth Group
5.250%, 03/15/11 150,000 153,628
Wellpoint
6.000%, 02/15/14 58,000 65,705
------------
311,617
------------
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - (CONTINUED)
- --------------------------------------------------------------------------------
INDUSTRIAL - 0.9%
General Electric
5.000%, 02/01/13 $ 150,000 $ 162,497
L-3 Communications
5.875%, 01/15/15 50,000 51,000
------------
213,497
------------
INFORMATION TECHNOLOGY - 0.5%
International Business Machines
6.500%, 01/15/28 100,000 120,463
------------
MATERIALS - 0.7%
Rio Tinto Finance USA
6.500%, 07/15/18 100,000 116,600
Teck Resources
10.250%, 05/15/16 50,000 60,500
------------
177,100
------------
TELECOMMUNICATION SERVICES - 0.6%
Verizon Maryland Inc.
8.000%, 10/15/29 75,000 85,637
New England Telephone & Telegraph
7.875%, 11/15/29 50,000 58,237
------------
143,874
------------
UTILITIES - 1.4%
Duke Energy
6.300%, 02/01/14 100,000 113,718
MidAmerican Energy Holdings
5.750%, 04/01/18 100,000 113,865
Virginia Electric & Power, Ser A
4.750%, 03/01/13 100,000 108,509
------------
336,092
------------
TOTAL CORPORATE OBLIGATIONS
(Cost $3,287,416) 3,399,935
------------
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS - 4.9%
- --------------------------------------------------------------------------------
FHLMC Gold
6.000%, 09/01/17 58,961 64,229
5.000%, 10/01/20 26,984 29,003
4.500%, 03/01/18 24,287 25,800
4.500%, 05/01/19 35,486 37,997
FNMA
8.000%, 05/01/25 10,819 12,540
7.000%, 07/01/26 16,040 18,165
7.000%, 12/01/27 14,513 16,452
6.500%, 05/01/14 22,184 24,110
6.500%, 01/01/28 15,823 17,512
6.500%, 05/01/29 11,095 12,397
6.000%, 02/01/17 64,394 70,047
6.000%, 03/01/28 18,638 20,671
The accompanying notes are an integral part of the financial statements.
54 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
BALANCED FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS - (CONTINUED)
- --------------------------------------------------------------------------------
FNMA (continued)
6.000%, 05/01/28 $ 7,698 $ 8,538
5.500%, 12/01/17 65,516 70,966
5.000%, 12/01/17 19,905 21,410
5.000%, 04/01/18 109,290 117,550
5.000%, 11/01/18 9,829 10,572
4.500%, 02/01/19 85,781 91,878
4.500%, 05/01/19 208,828 223,737
4.500%, 06/01/19 28,325 30,347
4.000%, 09/01/18 20,210 21,480
FNMA, CMO REMIC Ser 2003-25, Cl CD
3.500%, 03/25/17 59,453 60,385
GNMA
7.000%, 02/15/26 16,725 19,182
7.000%, 10/15/27 16,290 18,703
7.000%, 03/15/29 18,269 20,990
6.500%, 05/15/28 17,416 19,653
6.500%, 01/15/29 28,248 31,806
6.000%, 04/15/29 48,541 53,929
------------
TOTAL U.S. GOVERNMENT AGENCY
MORTGAGE-BACKED OBLIGATIONS
(Cost $1,078,993) 1,170,049
------------
- --------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES - 4.5%
- --------------------------------------------------------------------------------
Chase Mortgage Finance,
Ser 2004-S1, CI A3
5.500%, 02/25/19 101,256 104,898
Citicorp Mortgage Securities,
Ser 2003-10, Cl A1
4.500%, 11/25/18 129,592 133,735
CS First Boston Mortgage Securities,
Ser 2005-C1, Cl A4
5.014%, 02/15/38 150,000 158,464
Lehman Mortgage Trust,
Ser 2007-8, Cl 1A1
6.000%, 09/25/37 227,297 186,278
Merrill Lynch Mortgage Trust,
Ser 2002-MW1, CI A3
5.403%, 07/12/34 49,948 50,909
Morgan Stanley Capital I,
Ser 2003-T11, Cl A4
5.150%, 06/13/41 100,000 107,289
Wells Fargo Mortgage Backed
Securities Trust,
Ser 2004-2, Cl A1
5.000%, 01/25/19 132,842 136,865
Wells Fargo Mortgage Backed
Securities Trust, Ser 2003-M, Cl A1 (B)
4.675%, 12/25/33 39,056 39,470
- --------------------------------------------------------------------------------
Description Par/Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES - (CONTINUED)
- --------------------------------------------------------------------------------
Wells Fargo Mortgage Backed
Securities Trust, Ser 2007-7, Cl A1
6.000%, 06/25/37 $ 201,980 $ 178,274
------------
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $1,128,868) 1,096,182
------------
- --------------------------------------------------------------------------------
U.S. TREASURY OBLIGATION - 1.3%
- --------------------------------------------------------------------------------
U.S. Treasury Note
3.000%, 09/30/16 300,000 316,031
------------
TOTAL U.S. TREASURY OBLIGATION
(Cost $298,128) 316,031
------------
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES - 0.9%
- --------------------------------------------------------------------------------
Centerpoint Energy Transition Bond,
Ser 2001-1, Cl A4
5.630%, 09/15/15 76,862 83,252
TXU Electric Delivery Transition Bond,
Ser 2004-1, Cl A3
5.290%, 05/15/18 120,000 137,460
------------
TOTAL ASSET-BACKED SECURITIES
(Cost $200,174) 220,712
------------
- --------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 0.6%
- --------------------------------------------------------------------------------
Financial Select Sector SPDR ETF 8,910 131,066
------------
TOTAL REGISTERED INVESTMENT COMPANY
(Cost $85,036) 131,066
------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 7.2%
- --------------------------------------------------------------------------------
Credit Suisse Securities (USA)
0.200%, dated 07/30/10, matures on
08/02/10, repurchase price $1,752,361
(collateralized by a U.S. Treasury Note
obligation, par value $1,770,000,
1.125%, 12/15/12, total market
value $1,789,051) $ 1,752,332 1,752,332
------------
TOTAL REPURCHASE AGREEMENT
(Cost $1,752,332) 1,752,332
------------
TOTAL INVESTMENTS - 98.6%
(Cost $20,836,670) 23,832,846
------------
OTHER ASSETS & LIABILITIES, NET - 1.4% 340,707
------------
NET ASSETS - 100.0% $ 24,173,553
============
- --------------------------------------------------------------------------------
* NON-INCOME PRODUCING SECURITY.
+ NARROW INDUSTRIES ARE UTILIZED FOR COMPLIANCE PURPOSES, WHEREAS BROAD
SECTORS ARE UTILIZED FOR REPORTING.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 55
SCHEDULE OF INVESTMENTS
JULY 31, 2010
BALANCED FUND (CONCLUDED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(A) THE ISSUER IS IN DEFAULT OF CERTAIN DEBT COVENANTS. INCOME IS NOT BEING
ACCRUED. AS OF JULY 31, 2010, THE VALUE OF THESE SECURITIES AMOUNTED TO
$27,031, WHICH REPRESENTS 0.1 OF NET ASSETS.
(B) FLOATING RATE SECURITY. RATE DISCLOSED IS AS OF JULY 31, 2010.
ADR - AMERICAN DEPOSITARY RECEIPT
CL - CLASS
CMO - COLLATERALIZED MORTGAGE OBLIGATION
ETF - EXCHANGE TRADED FUND
FHLMC - FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA - FEDERAL NATIONAL MORTGAGE ASSOCIATION
GNMA - GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
MTN - MEDIUM TERM NOTE
PLC - PUBLIC LIABILITY COMPANY
REMIC - REAL ESTATE MORTGAGE INVESTMENT CONDUIT
SER - SERIES
SP ADR - SPONSORED AMERICAN DEPOSITARY RECEIPT
SPDR - STANDARD & POOR'S DEPOSITARY RECEIPTS
A summary of the inputs used to value the Fund's net assets as of July 31, 2010
is as follows (see Note 2 - significant accounting policies in the notes to
financial statements):
LEVEL 2 LEVEL 3
TOTAL FAIR LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
07/31/10 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Common Stock * $ 15,746,539 $ 15,746,539 $ -- $ --
Corporate Obligations 3,399,935 -- 3,399,935 --
U.S. Government Agency Mortgage-Backed Obligations 1,170,049 -- 1,170,049 --
Mortgage-Backed Securities 1,096,182 -- 1,096,182 --
U.S. Treasury Obligation 316,031 -- 316,031 --
Asset-Backed Securities 220,712 -- 220,712 --
Registered Investment Company 131,066 131,066 -- --
Repurchase Agreement 1,752,332 -- 1,752,332 --
------------ ------------ ------------ ------------
Total: $ 23,832,846 $ 15,877,605 $ 7,955,241 $ --
============ ============ ============ ============
* See schedule of investments detail for industry breakout.
The accompanying notes are an integral part of the financial statements.
56 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
COGNITIVE VALUE FUND
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - 97.3%+
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 13.9%
American Greetings, Cl A 18,000 $ 368,820
Big Lots * 11,500 394,565
Brown Shoe 20,500 299,710
Career Education * 12,700 310,261
Carter's * 14,400 349,056
Cato, Cl A 29,800 693,744
Citi Trends * 1,100 34,529
Cooper Tire & Rubber 19,200 414,912
Core-Mark Holding * 4,800 146,496
Corinthian Colleges * 13,400 121,940
Dex One * 12,500 226,500
DSW, Cl A * 12,800 340,608
Emerson Radio 49,300 110,925
Finish Line, Cl A 40,300 576,693
Full House Resorts * 107,800 342,804
Hallwood Group * 10,200 328,440
Hawk, Cl A * 9,500 277,685
Helen of Troy * ++ 10,900 261,164
Jo-Ann Stores * 14,300 599,027
Lifetime Brands * 23,300 342,277
Lincoln Educational Services * 23,100 487,179
Live Nation Entertainment * 2 18
McCormick & Schmick's
Seafood Restaurants * 30,300 239,673
Motorcar Parts of America * 33,800 225,784
RG Barry 39,700 470,445
Ruth's Hospitality Group * 89,300 360,772
Scholastic 12,400 314,092
Shoe Carnival * 7,000 147,350
Signet Jewelers * ++ 6,100 181,597
Skechers U.S.A., Cl A * 6,700 248,503
Sturm Ruger & Co 31,100 435,400
TRW Automotive Holdings * 8,600 301,774
Tuesday Morning * 25,200 109,872
VCG Holding * 82,100 164,200
------------
10,226,815
------------
CONSUMER STAPLES - 4.0%
Andersons 18,600 639,282
B&G Foods, Cl A 16,200 185,814
Central Garden & Pet * 14,400 149,904
Del Monte Foods 36,200 502,456
John B. Sanfilippo & Son * 13,500 189,540
Lancaster Colony 8,300 430,936
Nash Finch 3,700 145,484
Nutraceutical International * 26,000 409,500
Weis Markets 7,900 283,215
------------
2,936,131
------------
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
ENERGY - 5.6%
Adams Resources & Energy 13,000 $ 273,000
Complete Production Services * 17,800 342,650
Contango Oil & Gas * 13,400 587,456
Newpark Resources * 76,600 612,034
Oil States International * 16,500 758,010
OMNI Energy Services * 84,400 227,036
PrimeEnergy * 12,000 218,880
SM Energy 7,400 306,508
TETRA Technologies * 19,600 204,232
TGC Industries * 54,500 185,300
TransGlobe Energy * 60,000 452,400
------------
4,167,506
------------
FINANCIALS - 21.4%
1st Source 34,100 627,099
Advance America Cash Advance Centers 56,090 220,995
Agree Realty REIT 14,400 332,640
Alliance Financial 21,100 629,624
Allied World Assurance Company Holdings ++ 14,000 697,480
Alterra Capital Holdings ++ 34,600 669,510
American Equity Investment Life Holding 30,100 325,080
American Safety Insurance Holdings * 8,300 136,950
AmTrust Financial Services 17,200 220,676
Ashford Hospitality Trust REIT * 31,800 279,522
B of I Holding * 10,580 165,260
Bar Harbor Bankshares 5,600 150,080
Cash America International 9,800 328,300
CNA Surety * 15,200 262,200
Compass Diversified Holdings 43,400 654,038
Dime Community Bancshares 44,600 584,260
Endurance Specialty Holdings ++ 17,300 667,607
Financial Institutions 37,400 709,478
Flagstone Reinsurance Holdings ++ 49,200 543,168
Flushing Financial 11,500 143,405
LTC Properties REIT 29,000 714,850
Medical Properties Trust REIT 33,200 330,008
Merchants Bancshares 19,477 464,526
MFA Financial REIT 29,600 217,264
Mission West Properties REIT 21,740 153,484
Montpelier Re Holdings ++ 26,100 424,386
Nelnet, Cl A 12,600 254,016
New Hampshire Thrift Bancshares 22,500 227,475
One Liberty Properties REIT 10,716 166,741
Orrstown Financial Services 7,992 183,017
PS Business Parks REIT 12,400 720,068
Republic Bancorp, Cl A 30,500 755,790
Southside Bancshares 31,973 606,208
Tompkins Financial 1,140 47,595
Trustmark 6,400 140,800
United Security Bancshares 22,000 197,560
Unitrin 24,300 675,297
Urstadt Biddle Properties, Cl A REIT 14,300 254,969
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 57
SCHEDULE OF INVESTMENTS
JULY 31, 2010
COGNITIVE VALUE FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
FINANCIALS - (CONTINUED)
WesBanco 27,500 $ 477,125
World Acceptance * 9,800 406,014
------------
15,764,565
------------
HEALTH CARE - 6.6%
Continucare * 65,500 249,555
Coventry Health Care * 27,000 535,410
Five Star Quality Care * 46,200 168,630
Health Net * 21,400 503,970
Healthspring * 47,400 891,120
Hi-Tech Pharmacal * 6,300 110,754
Medicis Pharmaceutical, Cl A 11,200 283,920
MedQuist 69,600 601,344
Metropolitan Health Networks * 58,100 220,199
Par Pharmaceutical * 23,800 628,320
Universal American Financial * 39,400 659,556
------------
4,852,778
------------
INDUSTRIAL - 20.1%
AeroCentury * 18,000 359,640
Applied Industrial Technologies 27,900 781,200
Atlas Air Worldwide Holdings * 6,200 362,576
AZZ 3,700 161,061
Carlisle Cos 19,900 670,232
Consolidated Graphics * 13,100 562,907
Courier 23,500 374,355
Crane 1,000 35,540
Dolan * 19,800 231,462
Ecology and Environment, Cl A 30,100 358,491
Ennis 37,900 641,268
EnPro Industries * 24,600 736,770
Espey Manufacturing & Electronics 7,700 146,300
Fly Leasing, ADR 39,400 460,980
Global Ship Lease, Cl A * ++ 69,100 167,222
Great Lakes Dredge & Dock 58,200 325,920
Hubbell, Cl B 18,200 858,858
Lawson Products 7,581 135,018
LMI Aerospace * 5,000 86,100
M&F Worldwide * 27,000 760,860
Miller Industries 18,800 251,356
NACCO Industries, Cl A 8,700 774,648
National Technical Systems 12,800 108,800
Paragon Shipping, Cl A ++ 63,200 262,280
Pinnacle Airlines * 32,200 178,710
Quanex Building Products 12,300 216,357
R.R. Donnelley & Sons 40,300 679,861
RCM Technologies * 16,576 85,035
SIFCO Industries 31,100 318,775
Sparton * 99,100 564,870
Standex International 27,600 828,552
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
INDUSTRIAL - (CONTINUED)
TAL International Group 22,700 $ 611,538
Technology Research 106,332 549,736
Timken 25,300 850,586
Todd Shipyards 20,000 304,000
------------
14,801,864
------------
INFORMATION TECHNOLOGY - 13.6%
Alliance Fiber Optic Products 58,300 105,523
AudioCodes * ++ 69,000 203,550
AXT * 73,000 429,970
Brightpoint * 34,000 269,280
CDC Software, ADR * 44,000 307,560
Communications Systems 25,100 257,526
CSG Systems International * 25,100 473,386
DDi 49,000 443,940
Digimarc * 13,000 268,580
EarthLink 24,900 219,867
Ingram Micro, Cl A * 22,400 370,272
Insight Enterprises * 50,300 732,871
Integrated Silicon Solution * 39,900 343,140
Lattice Semiconductor * 92,600 514,856
ManTech International, Cl A * 19,300 765,245
Micrel 19,600 190,512
Net 1 UEPS Technologies * ++ 21,300 309,915
OPNET Technologies 12,300 187,452
Power-One * 41,800 519,574
RF Micro Devices * 37,700 157,209
Richardson Electronics 56,500 539,575
Rimage * 14,600 246,448
Saba Software * 36,400 178,724
Silicon Laboratories * 4,200 168,210
Spreadtrum Communications, ADR * 22,300 206,944
Tech Data * 9,100 359,996
Tessco Technologies 46,350 654,462
Ultra Clean Holdings * 34,200 370,386
Unica * 25,800 230,136
------------
10,025,109
------------
MATERIALS - 6.7%
Arch Chemicals 12,300 421,521
Boise * 64,300 385,157
Buckeye Technologies * 13,400 152,090
Domtar ++ 11,600 678,600
Innophos Holdings 20,700 606,717
KapStone Paper and Packaging * 49,900 570,856
Kraton Performance Polymers * 8,900 208,794
Minerals Technologies 6,400 333,888
Neenah Paper 19,100 342,654
PolyOne * 43,200 445,392
Quaker Chemical 18,600 655,836
Stepan 2,600 171,626
------------
4,973,131
------------
The accompanying notes are an integral part of the financial statements.
58 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
COGNITIVE VALUE FUND (CONCLUDED)
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES - 0.7%
Telecom of New Zealand, SP ADR 19,800 $ 142,956
USA Mobility 26,500 392,995
------------
535,951
------------
UTILITIES - 4.7%
DPL 18,200 460,642
Gas Natural 26,200 307,064
NiSource 21,300 351,450
Pinnacle West Capital 9,100 346,619
TECO Energy 18,200 297,388
UGI 32,800 884,288
Unisource Energy 26,700 861,876
------------
3,509,327
------------
TOTAL COMMON STOCK
(Cost $65,130,594) 71,793,177
------------
- --------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANIES - 1.2%
- --------------------------------------------------------------------------------
iShares Russell 2000 Value Index Fund ETF 5,000 303,800
iShares S&P SmallCap 600 Value
Index Fund ETF 5,000 305,250
Rydex S&P SmallCap 600 Pure Value ETF 8,200 267,894
------------
TOTAL REGISTERED INVESTMENT COMPANIES
(Cost $794,874) 876,944
------------
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 2.0%
- --------------------------------------------------------------------------------
Credit Suisse Securities (USA)
0.200%, dated 07/30/10, matures on
08/02/10, repurchase price $1,493,032
(collateralized by a U.S. Treasury Note
obligation, par value $1,510,000,
1.125%, 12/15/12, total market
value $1,526,253) $ 1,493,007 $ 1,493,007
------------
TOTAL REPURCHASE AGREEMENT
(Cost $1,493,007) 1,493,007
------------
TOTAL INVESTMENTS - 100.5%
(Cost $67,418,475) 74,163,128
------------
OTHER ASSETS & LIABILITIES, NET - (0.5)% (367,916)
------------
NET ASSETS - 100.0% $ 73,795,212
============
- --------------------------------------------------------------------------------
* NON-INCOME PRODUCING SECURITY.
++ THIS COMPANY IS DOMICILED OUTSIDE OF THE UNITED STATES. THE SECURITY'S
FUNCTIONAL CURRENCY IS THE UNITED STATES DOLLAR.
+ NARROW INDUSTRIES ARE UTILIZED FOR COMPLIANCE PURPOSES, WHEREAS BROAD
SECTORS ARE UTILIZED FOR REPORTING.
ADR - AMERICAN DEPOSITARY RECEIPT
CL - CLASS
ETF - EXCHANGE TRADED FUND
REIT - REAL ESTATE INVESTMENT TRUST
S&P - STANDARD & POOR'S
SP ADR - SPONSORED AMERICAN DEPOSITARY RECEIPT
A summary of the inputs used to value the Fund's net assets as of July 31, 2010
is as follows (see Note 2 - significant accounting policies in the notes to
financial statements):
LEVEL 2 LEVEL 3
TOTAL FAIR LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
07/31/10 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Common Stock * $ 71,793,177 $ 71,793,177 $ -- $ --
Registered Investment Companies 876,944 876,944 -- --
Repurchase Agreement 1,493,007 -- 1,493,007 --
------------ ------------ ------------ ------------
Total: $ 74,163,128 $ 72,670,121 $ 1,493,007 $ --
============ ============ ============ ============
* See schedule of investments detail for industry breakout.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 59
SCHEDULE OF INVESTMENTS
JULY 31, 2010
CORE EQUITY FUND
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - 97.5%+
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 8.8%
Comcast, Cl A 26,839 $ 522,555
Harman International Industries * 5,500 167,255
Home Depot 33,695 960,644
Liberty Capital, Cl A * 7,800 363,792
Macy's 38,900 725,485
McDonald's 6,500 453,245
News, Cl A 86,400 1,127,520
Starbucks 6,800 168,980
Target 7,200 369,504
Wynn Resorts 3,500 306,880
------------
5,165,860
------------
CONSUMER STAPLES - 12.9%
Coca-Cola 36,500 2,011,515
Colgate-Palmolive 8,400 663,432
Hansen Natural * 4,500 188,505
JM Smucker 4,300 264,149
Kimberly-Clark 10,905 699,229
Procter & Gamble 26,400 1,614,624
Reynolds American 14,500 838,390
Wal-Mart Stores 26,100 1,336,059
------------
7,615,903
------------
ENERGY - 9.4%
Chevron 20,000 1,524,200
Cimarex Energy 5,300 365,011
ConocoPhillips 31,130 1,718,999
EXCO Resources 11,700 169,767
Exxon Mobil 7,100 423,728
Forest Oil * 5,900 168,681
Hess 2,800 150,052
Nabors Industries * ++ 36,022 663,165
Occidental Petroleum 3,300 257,169
Valero Energy 8,000 135,920
------------
5,576,692
------------
FINANCIALS - 15.5%
American Express 18,900 843,696
Comerica 6,500 249,340
Discover Financial Services 77,700 1,186,479
Duke Realty REIT 62,300 745,108
Fifth Third Bancorp 32,700 415,617
Franklin Resources 2,400 241,392
Goldman Sachs Group 5,010 755,608
JPMorgan Chase 39,720 1,599,922
Mack-Cali Realty REIT 6,900 222,318
Progressive 27,800 545,992
Prudential Financial 4,000 229,160
State Street 11,700 455,364
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
FINANCIALS - (CONTINUED)
TFS Financial 25,600 $ 318,976
Wells Fargo 49,100 1,361,543
------------
9,170,515
------------
HEALTH CARE - 10.5%
Allergan 12,100 738,826
Amgen * 24,200 1,319,626
Baxter International 3,300 144,441
Johnson & Johnson 15,900 923,631
Pfizer 68,509 1,027,635
United Therapeutics * 6,200 303,118
UnitedHealth Group 31,400 956,130
Zimmer Holdings * 14,864 787,643
------------
6,201,050
------------
INDUSTRIAL - 12.3%
3M 9,700 829,738
Caterpillar 5,200 362,700
Cooper Industries, Cl A ++ 8,500 383,775
Crane 4,700 167,038
Deere 2,400 160,032
Dun & Bradstreet 6,700 458,012
Eaton 6,400 502,144
General Electric 103,655 1,670,919
Joy Global 2,600 154,362
Oshkosh * 7,700 264,726
Rockwell Automation 6,400 346,560
Shaw Group * 10,900 349,236
United Parcel Service, Cl B 25,200 1,638,000
------------
7,287,242
------------
INFORMATION TECHNOLOGY - 19.9%
Advanced Micro Devices * 52,400 392,476
Amdocs * ++ 9,600 262,368
Apple * 4,100 1,054,725
AVX 22,984 323,615
Cisco Systems * 33,800 779,766
Computer Sciences 3,200 145,056
Corning 13,100 237,372
eBay * 30,400 635,664
Hewlett-Packard 26,600 1,224,664
IAC/InterActiveCorp * 55,700 1,392,500
Intel 51,980 1,070,788
International Business Machines 13,800 1,771,920
Microsoft 39,925 1,030,464
Motorola * 20,800 155,792
QUALCOMM 10,300 392,224
The accompanying notes are an integral part of the financial statements.
60 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
CORE EQUITY FUND (CONCLUDED)
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY - (CONTINUED)
SanDisk * 8,400 $ 367,080
Symantec * 24,209 313,991
Yahoo! * 13,500 187,380
------------
11,737,845
------------
MATERIALS - 3.4%
EI Du Pont de Nemours 25,500 1,037,085
Freeport-McMoRan Copper & Gold 2,300 164,542
International Flavors & Fragrances 8,300 376,654
Temple-Inland 8,400 168,504
Walter Energy 3,800 270,940
------------
2,017,725
------------
TELECOMMUNICATION SERVICES - 2.5%
AT&T 12,000 311,280
US Cellular * 3,682 173,164
Verizon Communications 33,600 976,416
------------
1,460,860
------------
UTILITIES - 2.3%
AGL Resources 9,700 368,600
MDU Resources Group 51,300 1,013,175
------------
1,381,775
------------
TOTAL COMMON STOCK
(Cost $59,542,220) 57,615,467
------------
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 2.3%
- --------------------------------------------------------------------------------
Credit Suisse Securities (USA)
0.200%, dated 07/30/10, matures on
08/02/10, repurchase price $1,386,301
(collateralized by a U.S. Treasury Note
obligation, par value $1,400,000,
1.125%, 12/15/12, total market
value $1,415,069) $ 1,386,278 $ 1,386,278
------------
TOTAL REPURCHASE AGREEMENT
(Cost $1,386,278) 1,386,278
------------
TOTAL INVESTMENTS - 99.8%
(Cost $60,928,498) 59,001,745
------------
OTHER ASSETS & LIABILITIES, NET - 0.2% 123,900
------------
NET ASSETS - 100.0% $ 59,125,645
============
- --------------------------------------------------------------------------------
* NON-INCOME PRODUCING SECURITY.
++ THIS COMPANY IS DOMICILED OUTSIDE OF THE UNITED STATES. THE SECURITY'S
FUNCTIONAL CURRENCY IS THE UNITED STATES DOLLAR.
+ NARROW INDUSTRIES ARE UTILIZED FOR COMPLIANCE PURPOSES, WHEREAS BROAD
SECTORS ARE UTILIZED FOR REPORTING.
CL - CLASS
REIT - REAL ESTATE INVESTMENT TRUST
S&P - STANDARD & POOR'S
FUTURES - A SUMMARY OF THE OPEN FUTURES CONTRACTS HELD BY THE FUND AT JULY 31,
2010 ARE AS FOLLOWS:
LONG FUTURES NUMBER OF EXPIRATION UNREALIZED
OUTSTANDING CONTRACTS DATE COUNTERPARTY APPRECIATION*
- ----------------------------------------------------------------------------------
S&P 500 E-mini 26 September 2010 GSC $26,784
* The primary risk exposure is equity contracts.
A summary of the inputs used to value the Fund's net assets as of July 31, 2010
is as follows (see Note 2 - significant accounting policies in the notes to
financial statements):
LEVEL 2 LEVEL 3
TOTAL FAIR LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
07/31/10 PRICE INPUTS INPUTS
------------ ------------ ----------- ------------
Common Stock * $ 57,615,467 $ 57,615,467 $ -- $ --
Repurchase Agreement 1,386,278 -- 1,386,278 --
Derivatives (1)
Equity Contracts 26,784 26,784 -- --
------------ ------------ ----------- ------------
Total: $ 59,028,529 $ 57,642,251 $ 1,386,278 $ --
============ ============ =========== ============
* See schedule of investments detail for industry breakout.
(1) Investments in derivatives include futures contracts.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 61
SCHEDULE OF INVESTMENTS
JULY 31, 2010
ENHANCED GROWTH FUND
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - 98.2%+
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 2.4%
Amazon.com * 6,000 $ 707,340
Comcast, Cl A 22,800 443,916
Garmin ++ 7,050 200,996
Netflix * 1,000 102,550
Priceline.com * 1,000 224,400
------------
1,679,202
------------
HEALTH CARE - 6.9%
Alexion Pharmaceuticals * 4,000 217,440
Alkermes * 12,000 154,800
Allscripts-Misys Healthcare Solutions * 10,000 166,900
Amgen * 10,000 545,300
Amylin Pharmaceuticals * 7,000 132,440
athenahealth * 7,000 194,390
Baxter International 8,000 350,160
Biogen Idec * 4,000 223,520
Celgene * 7,000 386,050
Cephalon * 5,000 283,750
Dendreon * 3,000 98,730
Genzyme * 4,000 278,240
Gilead Sciences * 6,000 199,920
Human Genome Sciences * 3,000 77,820
Illumina * 4,000 179,320
Merck 8,000 275,680
Myriad Genetics * 4,000 58,040
Neurocrine Biosciences * 20,000 113,600
QIAGEN * ++ 4,000 74,880
Thermo Fisher Scientific * 8,000 358,880
United Therapeutics * 6,000 293,340
Vertex Pharmaceuticals * 2,000 67,320
------------
4,730,520
------------
INDUSTRIAL - 0.3%
GT Solar International * 30,000 194,400
------------
INFORMATION TECHNOLOGY - 87.1%
Accenture, Cl A ++ 22,350 885,954
Activision Blizzard 47,100 559,548
Adobe Systems * 20,000 574,400
Akamai Technologies * 5,000 191,800
Altera 29,400 814,968
Amdocs * ++ 23,000 628,590
Analog Devices 18,450 548,149
Apple * 16,645 4,281,926
Applied Materials 35,250 415,950
ASML Holding ++ 12,847 413,545
Autodesk * 19,900 587,846
Automatic Data Processing 14,000 577,780
Avnet * 6,590 165,738
Baidu, SP ADR * 5,000 407,050
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY - (CONTINUED)
BMC Software * 23,200 $ 825,456
Broadcom, Cl A 28,310 1,020,009
Check Point Software Technologies * ++ 25,300 860,706
Cisco Systems * 92,340 2,130,284
Citrix Systems * 13,500 742,770
Cognizant Technology Solutions, Cl A * 20,200 1,102,112
Computer Sciences 4,000 181,320
Corning 38,010 688,741
Dell * 31,300 414,412
eBay * 37,300 779,943
Electronic Arts * 10,550 168,061
EMC * 53,170 1,052,234
F5 Networks * 11,900 1,045,177
Fiserv * 7,800 390,780
Flextronics International * ++ 79,750 496,045
Google, Cl A * 4,725 2,290,916
Harris 10,000 445,300
Hewlett-Packard 48,530 2,234,321
IAC/InterActiveCorp * 9,125 228,125
Intel 96,120 1,980,072
International Business Machines 14,650 1,881,060
Intersil, Cl A 23,150 262,984
Intuit * 8,650 343,838
Juniper Networks * 26,100 725,058
KLA-Tencor 15,000 475,050
Lam Research * 11,550 487,295
Lexmark International, Cl A * 5,000 183,750
Linear Technology 12,350 393,718
Marvell Technology Group * ++ 57,650 860,138
Maxim Integrated Products 18,700 327,811
McAfee * 20,600 681,860
Microchip Technology 18,000 548,100
Micron Technology * 90,050 655,564
Microsoft 131,810 3,402,016
National Semiconductor 39,300 542,340
NetApp * 17,750 750,825
Nintendo, ADR 17,100 602,168
Nokia, SP ADR 29,000 275,790
Nuance Communications * 22,000 363,220
NVIDIA * 33,425 307,176
Open Text * ++ 7,500 296,250
Oracle 82,700 1,955,028
Paychex 10,100 262,499
QUALCOMM 44,500 1,694,560
Rambus * 13,500 265,275
Red Hat * 24,700 794,105
Research In Motion * ++ 10,780 620,173
Riverbed Technology * 7,850 291,157
Salesforce.com * 11,750 1,162,663
Samsung Electronics, GDR ++ 3,000 1,035,000
The accompanying notes are an integral part of the financial statements.
62 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
ENHANCED GROWTH FUND (CONCLUDED)
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY - (CONTINUED)
SanDisk * 15,000 $ 655,500
SAP, ADR 6,300 288,981
Seagate Technology * ++ 42,000 527,100
Siliconware Precision Industries, ADR 53,009 258,684
Symantec * 20,100 260,697
SYNNEX * 12,400 327,236
Taiwan Semiconductor Manufacturing, SP ADR 51,806 523,241
Teradata * 6,550 208,290
Texas Instruments 40,000 987,600
Varian Semiconductor Equipment Associates * 9,000 254,340
VeriSign * 18,400 517,960
VMware, Cl A * 8,000 620,240
Western Digital * 16,000 422,240
Xilinx 29,300 818,056
Yahoo! * 32,835 455,750
------------
59,702,414
------------
TELECOMMUNICATION SERVICES - 1.5%
American Tower, Cl A * 7,050 325,992
Millicom International Cellular ++ 4,950 461,439
Tele Norte Leste Participacoes, ADR 14,700 215,061
------------
1,002,492
------------
TOTAL COMMON STOCK
(Cost $53,135,321) 67,309,028
------------
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 1.5%
- --------------------------------------------------------------------------------
Credit Suisse Securities (USA)
0.200%, dated 07/30/10, matures on
08/02/10, repurchase price $1,033,814
(collateralized by a U.S. Treasury Note
obligation, par value $1,045,000,
1.125% 12/15/12, total market
value $1,056,248) $ 1,033,797 $ 1,033,797
------------
TOTAL REPURCHASE AGREEMENT
(Cost $1,033,797) 1,033,797
------------
TOTAL INVESTMENTS - 99.7%
(Cost $54,169,118) 68,342,825
------------
OTHER ASSETS & LIABILITIES, NET - 0.3% 198,781
------------
NET ASSETS - 100.0% $ 68,541,606
============
- --------------------------------------------------------------------------------
* NON-INCOME PRODUCING SECURITY.
++ THIS COMPANY IS DOMICILED OUTSIDE OF THE UNITED STATES. THE SECURITY'S
FUNCTIONAL CURRENCY IS THE UNITED STATES DOLLAR.
+ NARROW INDUSTRIES ARE UTILIZED FOR COMPLIANCE PURPOSES, WHEREAS BROAD
SECTORS ARE UTILIZED FOR REPORTING.
ADR - AMERICAN DEPOSITARY RECEIPT
CL - CLASS
GDR - GLOBAL DEPOSITARY RECEIPT
SP ADR - SPONSORED AMERICAN DEPOSITARY RECEIPT
A summary of the inputs used to value the Fund's net assets as of July 31, 2010
is as follows (see Note 2 - significant accounting policies in the notes to
financial statements):
LEVEL 2 LEVEL 3
TOTAL FAIR LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
07/31/10 PRICE INPUTS INPUTS
------------ ------------ ----------- ------------
Common Stock * $ 67,309,028 $ 67,309,028 $ -- $ --
Repurchase Agreement 1,033,797 -- 1,033,797 --
------------ ------------ ----------- ------------
Total: $ 68,342,825 $ 67,309,028 $ 1,033,797 $ --
============ ============ =========== ============
* See schedule of investments detail for industry breakout.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 63
SCHEDULE OF INVESTMENTS
JULY 31, 2010
EQUITY INCOME FUND
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - 99.7%+
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 10.8%
Gannett 20,685 $ 272,628
Leggett & Platt 11,280 235,075
Limited Brands 10,920 279,989
National Presto Industries 3,029 308,928
Newell Rubbermaid 10,225 158,487
Polaris Industries 4,325 258,202
------------
1,513,309
------------
CONSUMER STAPLES - 2.1%
Altria Group 13,085 289,964
------------
ENERGY - 15.4%
Chevron 5,415 412,677
Duncan Energy Partners 11,475 318,661
Enbridge Energy Partners 5,690 308,739
Exxon Mobil 5,200 310,336
Occidental Petroleum 3,600 280,548
TransCanada ++ 9,555 337,769
Williams 9,475 183,910
------------
2,152,640
------------
FINANCIALS - 25.1%
American Express 4,965 221,638
Annaly Capital Management REIT 23,950 416,730
BB&T 8,875 220,366
CBL & Associates Properties REIT 7,720 108,620
Chimera Investment REIT 77,895 301,454
Commerce Bancshares 3,050 119,407
Goldman Sachs Group 605 91,246
Home Properties REIT 5,180 257,291
JPMorgan Chase 2,900 116,812
Mercury General 6,575 283,580
Morgan Stanley 3,175 85,693
New York Community Bancorp 11,170 192,794
Rayonier REIT 10,515 513,447
Trustmark 4,435 97,570
U.S. Bancorp 11,325 270,668
Wells Fargo 7,685 213,105
------------
3,510,421
------------
HEALTH CARE - 9.9%
Bristol-Myers Squibb 14,655 365,203
Johnson & Johnson 5,030 292,193
Merck 12,515 431,267
Pfizer 19,710 295,650
------------
1,384,313
------------
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
INDUSTRIAL - 9.8%
Deluxe 5,385 $ 110,823
General Electric 23,100 372,372
Grupo Aeroportuario del Pacifico, ADR 6,420 208,586
HNI 8,595 222,095
R.R. Donnelley & Sons 7,760 130,911
Tyco International ++ 8,560 327,677
------------
1,372,464
------------
INFORMATION TECHNOLOGY - 8.9%
EarthLink 13,445 118,719
Intel 8,755 180,353
International Business Machines 4,120 529,008
Microsoft 12,145 313,462
National Semiconductor 8,000 110,400
------------
1,251,942
------------
MATERIALS - 7.6%
Eastman Chemical 4,145 259,643
EI Du Pont de Nemours 6,495 264,152
MeadWestvaco 8,010 191,920
PPG Industries 4,985 346,308
------------
1,062,023
------------
TELECOMMUNICATION SERVICES - 6.7%
AT&T 15,120 392,213
CenturyLink 2,170 77,295
Consolidated Communications 18,515 323,272
Frontier Communications 1,173 8,962
Verizon Communications 4,900 142,394
------------
944,136
------------
UTILITIES - 3.4%
DTE Energy 4,320 199,411
NorthWestern 4,580 129,156
OGE Energy 3,620 143,497
------------
472,064
------------
TOTAL COMMON STOCK
(Cost $12,737,312) 13,953,276
------------
- --------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 0.2%
- --------------------------------------------------------------------------------
Dreyfus Cash Management 22,900 22,900
------------
TOTAL REGISTERED INVESTMENT COMPANY
(Cost $22,900) 22,900
------------
TOTAL INVESTMENTS - 99.9%
(Cost $12,760,212) 13,976,176
------------
OTHER ASSETS & LIABILITIES, NET - 0.1% 15,319
------------
NET ASSETS - 100.0% $ 13,991,495
============
The accompanying notes are an integral part of the financial statements.
64 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
EQUITY INCOME FUND (CONCLUDED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
++ THIS COMPANY IS DOMICILED OUTSIDE OF THE UNITED STATES. THE SECURITY'S
FUNCTIONAL CURRENCY IS THE UNITED STATES DOLLAR.
+ NARROW INDUSTRIES ARE UTILIZED FOR COMPLIANCE PURPOSES, WHEREAS BROAD
SECTORS ARE UTILIZED FOR REPORTING.
ADR - AMERICAN DEPOSITARY RECEIPT
REIT - REAL ESTATE INVESTMENT TRUST
A summary of the inputs used to value the Fund's net assets as of July 31, 2010
is as follows (see Note 2 - significant accounting policies in the notes to
financial statements):
LEVEL 2 LEVEL 3
TOTAL FAIR LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
07/31/10 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Investments in Securities * $ 13,976,176 $ 13,976,176 $ -- $ --
============ ============ ============ ============
* See schedule of investments detail for industry and security type
breakouts.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 65
SCHEDULE OF INVESTMENTS
JULY 31, 2010
FUNDAMENTAL EQUITY FUND
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - 93.5%+
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 8.5%
Carnival 3,505 $ 121,553
International Game Technology 3,645 55,550
Kohl's * 4,679 223,142
Las Vegas Sands * 7,340 197,152
NIKE, Cl B 2,005 147,648
Nordstrom 2,993 101,762
Staples 6,000 121,980
Starwood Hotels & Resorts Worldwide 2,815 136,387
Tiffany & Co. 2,214 93,143
Yum! Brands 2,950 121,835
------------
1,320,152
------------
CONSUMER STAPLES - 12.2%
Altria Group 9,030 200,105
Anheuser-Busch InBev NV, SP ADR 1,640 87,018
Avon Products 3,670 114,247
CVS Caremark 9,727 298,522
Kellogg 2,825 141,391
Mead Johnson Nutrition 1,610 85,555
Philip Morris International 5,888 300,524
Procter & Gamble 5,490 335,768
Wal-Mart Stores 6,715 343,741
------------
1,906,871
------------
ENERGY - 14.6%
BG Group PLC, SP ADR ++ 2,405 194,685
Cameron International * 5,179 205,037
EOG Resources 1,370 133,575
Exxon Mobil 6,687 399,087
Occidental Petroleum 4,791 373,363
QEP Resources * 5,730 197,227
Schlumberger 3,542 211,316
Suncor Energy (Canada) 11,089 365,383
Tenaris, ADR ++ 3,496 140,015
Ultra Petroleum * 1,457 61,733
------------
2,281,421
------------
FINANCIALS - 10.5%
Goldman Sachs Group 2,724 410,834
Greenhill & Co. 1,120 76,216
Hanover Insurance Group 8,008 350,991
JPMorgan Chase 10,130 408,036
Wells Fargo 14,385 398,896
------------
1,644,973
------------
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
HEALTH CARE - 7.6%
Gilead Sciences * 7,200 $ 239,904
Johnson & Johnson 4,215 244,849
Merck 6,495 223,818
Pfizer 19,778 296,670
Zimmer Holdings * 3,460 183,345
------------
1,188,586
------------
INDUSTRIAL - 12.1%
3M 2,525 215,989
Danaher 17,258 662,880
Deere 2,947 196,506
Donaldson 4,890 232,128
Emerson Electric 2,039 101,012
General Electric 5,730 92,368
Rockwell Collins 3,955 226,068
Stericycle * 2,600 163,800
------------
1,890,751
------------
INFORMATION TECHNOLOGY - 19.4%
Accenture, Cl A ++ 2,140 84,830
Analog Devices 5,310 157,760
Apple * 1,465 376,871
Autodesk * 3,340 98,664
Broadcom, Cl A 5,105 183,933
Cisco Systems * 14,888 343,466
Citrix Systems * 3,775 207,701
EMC * 5,070 100,335
Google, Cl A * 761 368,971
Intel 16,372 337,263
Linear Technology 5,497 175,244
Microsoft 7,962 205,499
Oracle 12,438 294,034
QUALCOMM 2,550 97,104
------------
3,031,675
------------
MATERIALS - 6.3%
Ecolab 7,170 350,685
Praxair 6,457 560,597
Weyerhaeuser 4,024 65,269
------------
976,551
------------
UTILITIES - 2.3%
Exelon 2,107 88,135
TC Holdings 1,609 91,294
Questar 5,730 94,258
Wisconsin Energy 1,465 79,520
------------
353,207
------------
TOTAL COMMON STOCK
(Cost $13,761,905) 14,594,187
------------
The accompanying notes are an integral part of the financial statements.
66 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
FUNDAMENTAL EQUITY FUND (CONCLUDED)
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANIES - 4.7%
- --------------------------------------------------------------------------------
Dreyfus Cash Management 612,290 $ 612,290
Financial Select Sector SPDR ETF 8,193 120,519
------------
TOTAL REGISTERED INVESTMENT COMPANIES
(Cost $714,815) 732,809
------------
TOTAL INVESTMENTS - 98.2%
(Cost $14,476,720) 15,326,996
------------
OTHER ASSETS & LIABILITIES, NET - 1.8% 281,513
------------
NET ASSETS - 100.0% $ 15,608,509
============
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
* NON-INCOME PRODUCING SECURITY.
++ THIS COMPANY IS DOMICILED OUTSIDE OF THE UNITED STATES. THE SECURITY'S
FUNCTIONAL CURRENCY IS THE UNITED STATES DOLLAR.
+ NARROW INDUSTRIES ARE UTILIZED FOR COMPLIANCE PURPOSES, WHEREAS BROAD
SECTORS ARE UTILIZED FOR REPORTING.
ADR - AMERICAN DEPOSITARY RECEIPT
CL - CLASS
ETF - EXCHANGE TRADED FUND
PLC - PUBLIC LIABILITY COMPANY
SP ADR - SPONSORED AMERICAN DEPOSITARY RECEIPT
SPDR - STANDARD & POOR'S DEPOSITARY RECEIPTS
A summary of the inputs used to value the Fund's net assets as of July 31, 2010
is as follows (see Note 2 - significant accounting policies in the notes to
financial statements):
LEVEL 2 LEVEL 3
TOTAL FAIR LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
07/31/10 PRICE INPUTS INPUTS
----------- ------------ ----------- -------------
Investment in Securities * $15,326,996 $ 15,326,996 $ -- $ --
=========== ============ =========== =============
* See schedule of investments detail for industry and security type
breakouts.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 67
SCHEDULE OF INVESTMENTS
JULY 31, 2010
GENEVA MID CAP GROWTH FUND
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - 98.8%+
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 21.1%
Chipotle Mexican Grill * 31,780 $ 4,700,262
Coach 113,220 4,185,743
Deckers Outdoor * 64,805 3,297,926
Dick's Sporting Goods * 185,290 4,874,980
LKQ * 173,050 3,422,929
Morningstar * 53,770 2,420,188
O'Reilly Automotive * 121,070 5,966,330
Panera Bread, Cl A * 68,170 5,331,576
Strayer Education 17,925 4,291,245
Tractor Supply 80,645 5,605,634
Urban Outfitters * 86,150 2,770,584
------------
46,867,397
------------
CONSUMER STAPLES - 4.0%
Alberto-Culver 82,315 2,409,360
Church & Dwight 63,435 4,203,837
Flowers Foods 90,515 2,193,178
------------
8,806,375
------------
ENERGY - 7.6%
FMC Technologies * 84,320 5,335,770
Oceaneering International * 33,575 1,661,291
Oil States International * 73,490 3,376,131
Range Resources 76,720 2,847,846
Southwestern Energy * 97,460 3,552,417
------------
16,773,455
------------
FINANCIALS - 4.0%
Affiliated Managers Group * 44,650 3,162,559
Eaton Vance 84,000 2,516,640
IntercontinentalExchange * 30,190 3,188,668
------------
8,867,867
------------
HEALTH CARE - 13.4%
Cerner * 74,220 5,748,339
Covance * 62,360 2,417,074
CR Bard 35,350 2,776,035
DENTSPLY International 117,285 3,520,896
IDEXX Laboratories * 80,125 4,706,543
ResMed * 82,195 5,399,390
Varian Medical Systems * 95,130 5,251,176
------------
29,819,453
------------
INDUSTRIAL - 22.7%
AMETEK 98,035 4,340,009
CH Robinson Worldwide 81,440 5,309,888
Copart * 79,895 2,911,374
Expeditors International of Washington 106,780 4,553,099
Fastenal 103,070 5,058,676
Flowserve 43,275 4,291,149
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
INDUSTRIAL - (CONTINUED)
IDEX 85,605 $ 2,753,913
IHS, Cl A * 61,100 3,868,241
Knight Transportation 152,585 3,192,078
L-3 Communications Holdings 32,120 2,346,045
Lincoln Electric Holdings 40,790 2,252,424
Roper Industries 83,035 5,189,688
Stericycle * 67,775 4,269,825
------------
50,336,409
------------
INFORMATION TECHNOLOGY - 24.7%
Akamai Technologies * 80,190 3,076,088
Amphenol, Cl A 116,395 5,214,496
ANSYS * 116,725 5,246,789
Citrix Systems * 110,765 6,094,290
Cognizant Technology Solutions, Cl A * 126,575 6,905,932
Dolby Laboratories, Cl A * 31,075 1,972,330
F5 Networks * 30,915 2,715,264
FactSet Research Systems 42,975 3,223,125
Fiserv * 57,710 2,891,271
FLIR Systems * 124,765 3,713,006
Intuit * 133,165 5,293,309
MICROS Systems * 134,000 4,794,520
Trimble Navigation * 126,600 3,591,642
------------
54,732,062
------------
MATERIALS - 1.3%
Sigma-Aldrich 50,605 2,838,941
------------
2,838,941
------------
TOTAL COMMON STOCK
(Cost $164,193,542) 219,041,959
------------
- --------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 1.7%
- --------------------------------------------------------------------------------
Dreyfus Cash Management 3,648,734 3,648,734
------------
TOTAL REGISTERED INVESTMENT COMPANY
(Cost $3,648,734) 3,648,734
------------
TOTAL INVESTMENTS - 100.5%
(Cost $167,842,276) 222,690,693
------------
OTHER ASSETS & LIABILITIES, NET - (0.5)% (1,073,073)
------------
NET ASSETS - 100.0% $221,617,620
============
- --------------------------------------------------------------------------------
* NON-INCOME PRODUCING SECURITY.
+ NARROW INDUSTRIES ARE UTILIZED FOR COMPLIANCE PURPOSES, WHEREAS BROAD
SECTORS ARE UTILIZED FOR REPORTING.
CL - CLASS
The accompanying notes are an integral part of the financial statements.
68 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
GENEVA MID CAP GROWTH FUND (CONCLUDED)
A summary of the inputs used to value the Fund's net assets as of July 31, 2010
is as follows (see Note 2- significant accounting policies in the notes to
financial statements):
LEVEL 2 LEVEL 3
TOTAL FAIR LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
07/31/10 PRICE INPUTS INPUTS
------------- ------------- ----------- ------------
Investment in Securities * $ 222,690,693 $ 222,690,693 $ -- $ --
============= ============= =========== ============
* See schedule of investments detail for industry and security type
breakout.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 69
SCHEDULE OF INVESTMENTS
JULY 31, 2010
GENEVA SMALL CAP GROWTH FUND
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - 92.3%+
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 16.5%
Capella Education * 2,810 $ 261,105
Dick's Sporting Goods * 5,505 144,837
hhgregg * 8,340 169,219
Hibbett Sports * 7,785 206,069
LKQ * 7,680 151,910
Monro Muffler Brake 6,350 260,604
Panera Bread, Cl A * 1,800 140,778
Ulta Salon, Cosmetics & Fragrance * 5,505 139,056
WMS Industries * 3,310 127,468
------------
1,601,046
------------
CONSUMER STAPLES - 1.4%
Treehouse Foods * 2,915 139,016
------------
ENERGY - 7.0%
Brigham Exploration * 5,640 97,346
Dril-Quip * 1,935 101,162
SM Energy 3,150 130,473
T-3 Energy Services * 8,100 205,416
Whiting Petroleum * 1,615 142,136
------------
676,533
------------
FINANCIALS - 3.0%
Affiliated Managers Group * 2,140 151,576
Eaton Vance 4,820 144,407
------------
295,983
------------
HEALTH CARE - 19.9%
Dionex * 2,650 200,075
Haemonetics * 2,305 127,351
HMS Holdings * 3,970 223,590
IDEXX Laboratories * 2,330 136,864
Meridian Bioscience 6,480 124,481
Neogen * 8,025 239,627
NuVasive * 3,945 129,278
Onyx Pharmaceuticals * 3,340 86,840
PAREXEL International * 8,710 178,816
Quality Systems 2,810 154,325
SXC Health Solutions * 2,915 197,929
West Pharmaceutical Services 3,735 135,730
------------
1,934,906
------------
INDUSTRIAL - 20.5%
Acuity Brands 3,945 166,203
Aerovironment * 5,535 132,342
Allegiant Travel 2,680 118,965
Badger Meter 3,340 130,794
CIRCOR International 4,235 132,471
CoStar Group * 3,840 168,307
Donaldson 3,760 178,487
Genesee & Wyoming, Cl A * 6,085 248,755
Kaydon 3,255 123,657
Knight Transportation 11,950 249,994
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
INDUSTRIAL - (CONTINUED)
Middleby * 2,940 $ 169,079
RBC Bearings * 5,740 176,046
------------
1,995,100
------------
INFORMATION TECHNOLOGY - 21.4%
ArcSight * 4,105 102,666
Blackboard * 5,135 194,976
Bottomline Technologies * 3,585 50,800
Concur Technologies * 4,770 220,756
Constant Contact * 7,015 136,722
DTS * 4,290 153,239
FactSet Research Systems 2,170 162,750
Interactive Intelligence * 5,480 88,666
Netezza * 11,355 176,003
Pegasystems 5,055 155,492
Riverbed Technology * 7,015 260,186
Tyler Technologies * 10,750 176,623
Ultimate Software Group * 6,325 204,045
------------
2,082,924
------------
MATERIALS - 2.6%
Balchem 9,727 257,279
------------
TOTAL COMMON STOCK
(Cost $8,120,176) 8,982,787
------------
- --------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANIES - 8.5%
- --------------------------------------------------------------------------------
Dreyfus Cash Management 340,401 340,401
iShares Russell 2000 Growth Index Fund 6,835 483,918
------------
824,319
------------
TOTAL REGISTERED INVESTMENT COMPANIES
(Cost $810,653) 824,319
------------
TOTAL INVESTMENTS - 100.8%
(Cost $8,930,829) 9,807,106
------------
OTHER ASSETS & LIABILITIES, NET - (0.8)% (74,796)
------------
NET ASSETS - 100.0% $ 9,732,310
============
- --------------------------------------------------------------------------------
* NON-INCOME PRODUCING SECURITY.
+ NARROW INDUSTRIES ARE UTILIZED FOR COMPLIANCE PURPOSES, WHEREAS BROAD
SECTORS ARE UTILIZED FOR REPORTING.
CL - CLASS
The accompanying notes are an integral part of the financial statements.
70 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
GENEVA SMALL CAP GROWTH FUND (CONCLUDED)
A summary of the inputs used to value the Fund's net assets as of July 31, 2010
is as follows (see Note 2- significant accounting policies in the notes to
financial statements):
LEVEL 2 LEVEL 3
TOTAL FAIR LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
07/31/10 PRICE INPUTS INPUTS
---------- ----------- ----------- ------------
Investments in Securities * $9,807,106 $ 9,807,106 $ -- $ --
========== =========== =========== ============
* See schedule of investments detail for industry and security type
breakout.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 71
SCHEDULE OF INVESTMENTS
JULY 31, 2010
INTERNATIONAL OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - 97.2%+
- --------------------------------------------------------------------------------
ARGENTINA - 0.9%
Banco Macro, ADR (A) 10,000 $ 379,700
MercadoLibre * (A) 15,000 907,500
Telecom Argentina, SP ADR 35,000 638,750
------------
1,925,950
------------
AUSTRALIA - 4.9%
Ansell 50,000 581,269
Australia & New Zealand Banking Group 60,000 1,251,199
BHP Billiton 40,000 1,451,861
Caltex Australia 60,000 557,476
Challenger Financial Services Group 200,000 636,908
Coca-Cola Amatil 50,000 518,845
DuluxGroup * 30,000 67,310
Flight Centre 40,000 671,649
Kingsgate Consolidated 70,000 619,357
Lend Lease Group (A) 80,000 527,620
National Australia Bank 50,000 1,136,754
Orica 30,000 683,952
OZ Minerals * 500,000 556,390
QBE Insurance Group 30,000 453,254
UGL 45,000 574,031
Wesfarmers 20,000 562,542
------------
10,850,417
------------
BELGIUM - 2.5%
Ageas 200,000 550,712
Agfa-Gevaert * 60,000 362,797
Anheuser-Busch InBev NV, 25,000 1,323,840
Bekaert 4,000 869,984
Belgacom 13,000 466,809
D' Ieteren 1,000 482,166
Delhaize Group 6,000 443,098
Dexia * (A) 104,761 513,586
Nyrstar 40,000 463,922
------------
5,476,914
------------
BERMUDA - 0.2%
Catlin Group 70,000 422,665
------------
BRAZIL - 1.7%
Banco do Brasil 60,000 1,037,071
Petroleo Brasileiro, ADR (A) 27,000 982,800
Souza Cruz 10,000 458,267
Vale, SP ADR (A) 42,000 1,167,600
------------
3,645,738
------------
CANADA - 0.8%
Barrick Gold 10,000 411,069
Husky Energy 10,000 245,708
Royal Bank of Canada (A) 12,000 627,051
SXC Health Solutions * 8,000 548,145
------------
1,831,973
------------
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
CHINA - 0.3%
China Construction Bank, Cl H 800,000 $ 678,725
------------
COLOMBIA - 0.8%
Bancolombia, SP ADR (A) 31,000 1,817,530
------------
FRANCE - 8.0%
AXA 44,311 816,788
BNP Paribas 25,058 1,721,213
Bouygues 20,000 844,442
Carrefour 21,000 966,711
Casino Guichard-Perrachon 6,000 522,538
Christian Dior 9,000 975,331
CNP Assurances 20,000 412,839
Compagnie Generale des Etablissements
Michelin, Cl B 5,000 380,911
Dassault Systemes 7,000 455,054
France Telecom 35,000 732,958
L'Oreal 5,000 524,649
Lafarge 17,000 926,020
PPR 4,000 535,074
Sanofi-Aventis 28,746 1,669,610
Schneider Electric 8,000 922,632
SILIC REIT 4,000 449,483
Technip 10,000 665,911
Total 30,000 1,513,350
Valeo * 12,000 428,711
Veolia Environnement 30,000 796,552
Vinci 18,000 871,418
Vivendi 25,000 600,916
------------
17,733,111
------------
GERMANY - 7.7%
Aixtron (A) 20,000 598,016
Allianz 13,000 1,509,441
BASF 30,000 1,751,827
Bayer 25,000 1,437,214
Bilfinger Berger 10,000 570,846
Daimler * 20,000 1,078,358
Deutsche Bank 20,000 1,396,979
E.ON 20,000 596,713
Fresenius Medical Care KGAA 10,000 548,692
Hannover Rueckversicherung 12,000 574,534
Lanxess 12,000 576,176
Linde 6,000 703,311
Metro 10,000 555,078
Muenchener Rueckversicherungs-Gesellschaft 3,000 415,575
Puma 2,000 584,464
RWE 21,000 1,482,974
Siemens 22,500 2,192,912
Software 5,000 557,488
------------
17,130,598
------------
The accompanying notes are an integral part of the financial statements.
72 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
INTERNATIONAL OPPORTUNITIES FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
HONG KONG - 5.1%
BOC Hong Kong Holdings 300,000 $ 770,132
Cheung Kong Holdings 80,000 966,592
China Mobile 50,000 505,632
CLP Holdings 150,000 1,107,499
CNOOC 400,000 673,576
Esprit Holdings 80,000 502,092
Johnson Electric Holdings * 1,200,000 563,888
Kingboard Chemical Holdings 80,000 370,261
Link REIT 250,000 650,145
Midland Holdings 700,000 658,770
Orient Overseas International * 90,000 703,315
Sino Land 350,000 662,375
SJM Holdings 1,000,000 881,880
Sun Hung Kai Properties 50,000 734,471
Swire Pacific, Cl A 50,000 607,660
VTech Holdings 40,000 425,362
Yue Yuen Industrial Holdings 150,000 486,643
------------
11,270,293
------------
INDIA - 1.3%
Axis Bank 20,000 579,011
Dr. Reddy's Laboratories 12,000 350,290
Hero Honda Motors 10,000 391,089
Infosys Technologies, SP ADR (A) 10,000 604,800
Oil & Natural Gas 20,000 534,727
Tata Motors, SP ADR * (A) 25,000 472,750
------------
2,932,667
------------
IRELAND - 0.3%
Experian 70,000 689,247
------------
JAPAN - 14.6%
Air Water 40,000 435,210
Asahi Glass 50,000 509,289
Astellas Pharma 12,000 407,107
Bridgestone 30,000 537,184
Canon 20,000 871,578
Central Japan Railway 50 407,431
Chubu Electric Power 14,000 347,103
Chuo Mitsui Trust Holdings 130,000 461,948
Daito Trust Construction 18,000 979,223
East Japan Railway 6,000 386,828
Eisai 15,000 511,835
Fanuc 4,000 472,713
Fast Retailing 4,000 598,646
Foster Electric 17,000 460,050
FUJI OIL 50,000 738,469
FUJIFILM Holdings 16,000 500,029
Fujitsu 120,000 854,216
Hitachi * 120,000 488,917
Hitachi Chemical 25,000 498,293
Honda Motor 30,000 940,679
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
JAPAN - (CONTINUED)
Hoya 20,000 $ 475,953
Itochu 100,000 780,138
Japan Tobacco 150 482,667
JFE Holdings 14,000 433,474
KDDI 100 486,718
Kyocera 4,000 356,965
Marubeni 100,000 537,068
Miraca Holdings 12,000 357,243
Mitsubishi 35,000 757,162
Mitsui 45,000 577,117
Mizuho Financial Group 400,000 652,816
Nintendo 2,000 559,292
Nissan Motor * 140,000 1,075,988
Nitto Denko 25,000 866,370
ORIX 9,000 708,374
Osaka Gas 150,000 553,851
SANKYU 120,000 506,974
Secom 10,000 458,939
Seven & I Holdings 20,000 478,963
Sharp 40,000 438,451
Softbank 30,000 897,621
Sony 15,000 469,645
Sumitomo 60,000 637,537
Sumitomo Electric 50,000 584,525
Sumitomo Metal Mining 25,000 332,774
Sumitomo Mitsui Financial Group 25,000 774,350
Sumitomo Trust & Banking 100,000 556,745
Takeda Pharmaceutical 13,000 596,620
TDK 6,000 361,826
TOKIO Marine Holdings 20,000 547,717
Tokyo Electron 10,000 537,068
Tokyo Gas 150,000 682,331
Toshiba * 70,000 366,225
Toyota Motor 22,000 776,665
Toyota Motor, SP ADR (A) 10,000 702,300
YAMADA DENKI 7,000 473,176
------------
32,248,396
------------
LUXEMBOURG - 0.4%
Oriflame Cosmetics, SDR 6,000 358,771
Ternium, SP ADR (A) 12,000 429,000
------------
787,771
------------
MEXICO - 0.7%
America Movil, ADR, Ser L (A) 12,500 620,125
Fomento Economico Mexicano, ADR 10,000 486,800
Grupo Mexico, Ser B 150,000 397,377
------------
1,504,302
------------
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 73
SCHEDULE OF INVESTMENTS
JULY 31, 2010
INTERNATIONAL OPPORTUNITIES FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
NETHERLANDS - 4.7%
Aalberts Industries 40,000 $ 596,062
AEGON * 100,000 601,535
BinckBank (A) 40,000 560,616
CSM 30,000 870,245
Heineken 7,000 316,809
ING Groep * 60,000 577,036
Koninklijke (Royal) KPN (A) 50,000 695,883
Koninklijke Ahold 40,000 513,442
Koninklijke Boskalis Westminster 8,301 342,751
Koninklijke DSM 12,000 569,451
Koninklijke Philips Electronics 35,000 1,090,543
Mediq 30,000 553,774
Nutreco (A) 10,000 604,206
Royal Dutch Shell, Cl B 50,000 1,317,689
SBM Offshore 35,000 552,113
TomTom * (A) 90,000 542,085
------------
10,304,240
------------
NORWAY - 0.8%
Austevoll Seafood 60,000 371,331
Statoil 30,000 606,375
TGS Nopec Geophysical 25,000 331,045
Yara International 10,000 376,927
------------
1,685,678
------------
PERU - 0.6%
Cia de Minas Buenaventura, ADR 17,500 675,675
Credicorp 7,000 684,040
------------
1,359,715
------------
PHILIPPINES - 1.4%
Aboitiz Power 1,500,000 663,556
Megaworld 20,000,000 658,617
Metropolitan Bank & Trust 600,000 790,340
Philippine Long Distance Telephone 20,000 1,062,569
------------
3,175,082
------------
POLAND - 1.0%
Bank Pekao 10,000 533,181
KGHM Polska Miedz 10,000 347,105
Polski Koncern Naftowy Orlen * 30,000 381,099
Powszechna Kasa Oszczednosci
Bank Polski 50,000 637,606
Telekomunikacja Polska 70,000 362,297
------------
2,261,288
------------
SOUTH KOREA - 3.9%
Hanjin Shipping * 20,000 538,427
Honam Petrochemical 4,000 583,226
Hynix Semiconductor * 25,000 475,456
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
SOUTH KOREA - (CONTINUED)
Hyundai Motor 5,000 $ 629,715
Kia Motors 20,000 522,367
Korea Zinc 3,000 597,173
LG Display 15,000 460,241
LG Electronics 5,000 424,741
POSCO 1,500 623,798
Samsung Electronics 2,500 1,711,641
Samsung Engineering 6,000 626,334
Shinhan Financial Group 25,000 1,024,872
Woori Finance Holdings 40,000 497,010
------------
8,715,001
------------
SPAIN - 1.0%
Banco Santander * (A) 80,000 1,039,290
Construcciones y Auxiliar de Ferrocarriles 500 225,152
Red Electrica 9,000 394,073
Telefonica 20,000 454,018
------------
2,112,533
------------
SWEDEN - 3.9%
Alfa Laval 35,000 542,478
Assa Abloy, Cl B 20,000 442,404
Atlas Copco, Cl A 40,000 654,325
Electrolux, Ser B 40,000 892,010
Elekta, Cl B 15,000 434,855
Hennes & Mauritz, Cl B 10,000 314,974
Hexagon, Cl B (A) 30,000 503,625
Nordea Bank 100,000 1,000,048
Saab, Cl B 30,000 389,770
Skandinaviska Enskilda Banken, Cl A 45,000 309,717
Svenska Cellulosa, Cl B 50,000 721,642
Svenska Handelsbanken, Cl A 30,000 860,984
Tele2, Cl B 35,000 620,529
Telefonaktiebolaget LM Ericsson, Cl B 90,000 993,538
------------
8,680,899
------------
SWITZERLAND - 7.3%
ABB 30,000 605,357
Clariant * 80,000 1,059,806
Compagnie Financiere Richemont, Cl A 10,000 390,227
Credit Suisse Group 30,477 1,387,951
Geberit 6,000 980,897
Nestle 70,000 3,460,689
Novartis 47,002 2,280,840
Roche Holding 21,000 2,731,593
Swiss Life Holding 9,000 946,050
Syngenta 2,500 551,982
UBS * 70,000 1,196,122
Zurich Financial Services 2,598 606,541
------------
16,198,055
------------
The accompanying notes are an integral part of the financial statements.
74 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
INTERNATIONAL OPPORTUNITIES FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
THAILAND - 1.2%
Banpu, NVDR 60,000 $ 1,160,031
Charoen Pokphand Foods, NVDR 900,000 672,037
Krung Thai Bank, NVDR 2,000,000 805,577
------------
2,637,645
------------
TURKEY - 3.1%
Arcelik 150,000 741,441
Tupras Turkiye Petrol Rafinerileri 30,000 681,728
Turk Hava Yollari Anonim Ortakligi * 228,571 661,206
Turk Telekomunikasyon 200,000 749,735
Turkiye Garanti Bankasi 250,000 1,293,790
Turkiye Halk Bankasi * 120,000 971,338
Turkiye Is Bankasi, Cl C 450,000 1,686,903
------------
6,786,141
------------
UNITED KINGDOM - 18.1%
Amlin 70,000 466,601
Anglo American * 20,000 792,261
AstraZeneca 38,085 1,935,056
BAE Systems 90,000 441,180
Balfour Beatty 75,000 293,155
Barclays 300,000 1,566,633
BBA Aviation 150,000 461,328
BG Group 65,000 1,041,872
BHP Billiton 65,000 1,990,420
BP 350,000 2,229,479
British American Tobacco 47,170 1,623,922
Britvic 70,000 527,232
BT Group 400,000 892,529
Centrica 121,875 581,177
Compass Group 110,000 914,811
Croda International 60,000 1,215,459
GlaxoSmithKline 124,044 2,162,483
HSBC Holdings 168,000 1,702,961
Imperial Tobacco Group 30,000 849,221
Inmarsat 40,000 462,584
Invensys 80,000 335,169
Investec 50,000 388,363
John Wood Group 180,000 1,010,309
Johnson Matthey 20,000 530,685
Micro Focus International 100,000 648,527
National Grid 40,000 319,792
Old Mutual 250,000 473,881
Pearson 50,000 776,334
Petrofac 90,000 1,765,287
Provident Financial 30,000 379,654
Prudential 60,000 522,054
Reckitt Benckiser Group 18,000 882,644
Rentokil Initial * 300,000 481,570
Rio Tinto 25,000 1,296,309
Rolls-Royce Group 70,000 637,072
RSA Insurance Group 250,000 500,557
- --------------------------------------------------------------------------------
Description Shares/Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
UNITED KINGDOM - (CONTINUED)
Standard Chartered 70,000 $ 2,023,254
Tesco 90,000 551,687
Unilever 60,000 1,705,032
Vodafone Group 550,385 1,284,655
WH Smith 120,000 799,699
WPP Group 60,000 637,857
------------
40,100,755
------------
TOTAL COMMON STOCK
(Cost $187,144,735) 214,963,329
------------
- --------------------------------------------------------------------------------
PREFERRED STOCK - 0.2%
- --------------------------------------------------------------------------------
BRAZIL - 0.2%
Eletropaulo Metropolitana, Cl B 20,000 420,855
------------
TOTAL PREFERRED STOCK
(Cost $238,034) 420,855
------------
- --------------------------------------------------------------------------------
WARRANTS - 0.0%
- --------------------------------------------------------------------------------
HONG KONG - 0.0%
Kingboard Chemical Holdings 8,000 3,182
------------
TOTAL WARRANTS
(Cost $--) 3,182
------------
- --------------------------------------------------------------------------------
EXCHANGE TRADED FUNDS - 1.4%
- --------------------------------------------------------------------------------
UNITED STATES - 1.4%
iShares MSCI South Africa Index Fund 20,000 1,213,000
Market Vectors Russia (A) 60,000 1,893,600
------------
TOTAL EXCHANGE TRADED FUNDS
(Cost $2,224,124) 3,106,600
------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 7.5%
- --------------------------------------------------------------------------------
Bank of America (B)
0.290%, dated 07/30/10, matures on
08/02/10, repurchase price $3,000,073
(collateralized by a corporate obligation,
par value $3,533,728, 0.00%, 08/15/15,
total market value $3,150,000) $ 3,000,000 3,000,000
Credit Suisse Securities (USA)
0.200%, dated 07/30/10, matures on
08/02/10, repurchase price $2,179,907
(collateralized by a U.S. Treasury Note
obligation, par value $2,200,000,
1.125% 12/15/12, total market
value $2,223,679) 2,179,870 2,179,870
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 75
SCHEDULE OF INVESTMENTS
JULY 31, 2010
INTERNATIONAL OPPORTUNITIES FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - (CONTINUED)
- --------------------------------------------------------------------------------
Deutsche Bank Securities, Inc. (B)
0.200%, dated 07/30/10, matures on
08/02/10, repurchase price
$4,000,067 (collateralized by a
corporate obligation, par value
$4,071,600, 0.550%, 09/30/11,
total market value $4,080,191) $ 4,000,000 $ 4,000,000
HSBC Securities (B)
0.190%, dated 07/30/10, matures
on 08/02/10, repurchase price
$1,559,194 (collateralized by a
U.S. Treasury Note obligation,
par value $1,480,771, 3.625%,
08/15/19, total market
value $1,591,416) 1,559,169 1,559,169
HSBC Securities (B)
0.360%, dated 07/30/10,
matures on 08/02/10, repurchase price
$3,000,090 (collateralized by
a corporate obligation,
par value $2,889,000, 4.45%, 06/24/20,
total market value $3,150,269) 3,000,000 3,000,000
JPMorgan Chase & Co. (B)
0.340%, dated 07/30/10, matures
on 08/02/10, repurchase price
$3,000,085 (collateralized by
various corporate obligations,
ranging in par value from
$1,170,000 - $1,700,000,
5.500% - 7.300%,
05/15/12 - 08/01/14,
total market value $3,151,207) 3,000,000 3,000,000
------------
TOTAL REPURCHASE AGREEMENTS
(Cost $16,739,039) 16,739,039
------------
TOTAL INVESTMENTS - 106.3%
(Cost $206,345,932) 235,233,005
------------
OTHER ASSETS & LIABILITIES, NET - (6.3)% (14,007,531)
------------
NET ASSETS - 100.0% $221,225,474
============
- --------------------------------------------------------------------------------
* NON-INCOME PRODUCING SECURITY.
+ NARROW INDUSTRIES ARE UTILIZED FOR COMPLIANCE PURPOSES, WHEREAS BROAD
SECTORS ARE UTILIZED FOR REPORTING.
(A) THIS SECURITY OR PARTIAL POSITION OF THIS SECURITY IS ON LOAN AT JULY 31,
2010. THE TOTAL VALUE OF SECURITIES ON LOAN AT JULY 31, 2010 IS
$14,013,668.
(B) THIS SECURITY WAS PURCHASED WITH CASH COLLATERAL RECEIVED FROM SECURITIES
LENDING.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ADR - AMERICAN DEPOSITARY RECEIPT
BBH - BROWN BROTHERS HARRIMAN & CO.
CL - CLASS
DKK - DANISH KRONE
EUR - EUROPEAN EURO
GBP - BRITISH POUND
HSBC - HSBC BANK PLC
NVDR - NON VOTING DEPOSITARY RECEIPT
REIT - REAL ESTATE INVESTMENT TRUST
SDR - SWEDISH DEPOSITARY RECEIPT
SER - SERIES
SP ADR - SPONSORED AMERICAN DEPOSITARY RECEIPT
TRY - TURKISH LIRA
FOREIGN CURRENCY CONTRACTS OUTSTANDING AS OF JULY 31, 2010 WERE AS FOLLOWS:
PRINCIPAL NET
CONTRACTS AMOUNT UNREALIZED
TO BUY OR COVERED BY APPRECIATION
TO SELL CURRENCY CONTRACTS EXPIRATION COUNTERPARTY (DEPRECIATION)*
- --------------------------------------------------------------------------------
Sell DKK 16,030,489 08/10 BBH $ 11,100
Buy EUR 10,000,000 08/10 BBH 607,520
Sell EUR 10,000,000 08/10 BBH (283,920)
Buy TRY 4,529,944 08/10 BBH 10,928
Sell GBP 11,556 08/10 HSBC (60)
---------------
$ 345,568
===============
* The primary risk exposure is foreign exchange contracts.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
The accompanying notes are an integral part of the financial statements.
76 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
INTERNATIONAL OPPORTUNITIES FUND (CONCLUDED)
A summary of the inputs used to value the Fund's net assets as of July 31, 2010
is as follows (see Note 2- significant accounting policies in the notes to
financial statements):
LEVEL 2 LEVEL 3
TOTAL FAIR LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
07/31/10 PRICE INPUTS INPUTS
------------- ------------ ----------- ------------
Assets:
Common Stock* $ 214,963,329 $214,963,329 $ -- $ --
Preferred Stock* 420,855 420,855 -- --
Warrants* 3,182 3,182 -- --
Exchange Traded Funds* 3,106,600 3,106,600 -- --
Repurchase Agreements 16,739,039 -- 16,739,039 --
Derivatives (1)
Foreign Exchange Contracts 629,548 -- 629,548 --
Liabilities:
Derivatives (1) -- --
Foreign Exchange Contracts (283,920) -- (283,920) --
------------- ------------ ----------- ------------
Total: $ 235,578,633 $218,493,966 $17,084,667 $ --
============= ============ =========== ============
* See schedule of investments detail for country breakout.
(1) Investments in derivatives include open foreign currency contracts.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 77
SCHEDULE OF INVESTMENTS
JULY 31, 2010
LARGE CAP GROWTH FUND
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - 93.8%+
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 10.8%
Carnival 20,197 $ 700,432
International Game Technology 20,489 312,252
Kohl's * 32,238 1,537,430
Las Vegas Sands * 45,267 1,215,872
NIKE, Cl B 15,007 1,105,115
Nordstrom 22,159 753,406
Staples 37,724 766,929
Starwood Hotels & Resorts Worldwide 23,973 1,161,492
Tiffany & Co. 17,314 728,400
Yum! Brands 24,035 992,646
------------
9,273,974
------------
CONSUMER STAPLES - 13.1%
Anheuser-Busch InBev NV, SP ADR 9,202 488,258
Avon Products 26,920 838,020
Coca-Cola 41,962 2,312,526
CVS Caremark 43,157 1,324,488
Kellogg 12,405 620,870
Mead Johnson Nutrition 8,915 473,743
Philip Morris International 44,814 2,287,306
Procter & Gamble 9,883 604,444
Wal-Mart Stores 46,289 2,369,534
------------
11,319,189
------------
ENERGY - 7.6%
BG Group PLC, SP ADR 13,362 1,081,654
Cameron International * 20,505 811,793
Occidental Petroleum 21,285 1,658,740
QEP Resources * 15,883 546,693
Schlumberger 29,757 1,775,303
Suncor Energy (Canada) 21,909 721,902
------------
6,596,085
------------
FINANCIALS - 5.3%
Goldman Sachs Group 9,991 1,506,843
Greenhill & Co. 6,287 427,830
Hanover Insurance Group 41,132 1,802,815
JPMorgan Chase 21,596 869,887
------------
4,607,375
------------
HEALTH CARE - 6.7%
Gilead Sciences * 40,865 1,361,622
Johnson & Johnson 31,203 1,812,582
Merck 37,645 1,297,247
Zimmer Holdings * 25,190 1,334,818
------------
5,806,269
------------
INDUSTRIAL - 12.7%
3M 17,046 1,458,115
Danaher 55,146 2,118,158
Deere 15,837 1,056,011
Donaldson 30,829 1,463,453
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
INDUSTRIAL - (CONTINUED)
Emerson Electric 11,442 $ 566,837
Expeditors International of Washington 41,831 1,783,674
Rockwell Collins 22,754 1,300,619
Stericycle * 18,594 1,171,422
------------
10,918,289
------------
INFORMATION TECHNOLOGY - 30.1%
Accenture, Cl A ++ 13,070 518,095
Analog Devices 31,479 935,241
Apple * 17,887 4,601,431
Autodesk * 19,634 579,988
Broadcom, Cl A 38,960 1,403,729
Cisco Systems * 168,975 3,898,253
Citrix Systems * 21,616 1,189,312
EMC * 30,168 597,025
Google, Cl A * 6,841 3,316,859
Intel 109,405 2,253,743
Linear Technology 43,469 1,385,792
Microsoft 69,794 1,801,383
Oracle 86,326 2,040,747
QUALCOMM 39,247 1,494,526
------------
26,016,124
------------
MATERIALS - 6.0%
Ecolab 45,585 2,229,562
Praxair 29,956 2,600,780
Weyerhaeuser 21,242 344,545
------------
5,174,887
------------
UTILITIES - 1.5%
ITC Holdings 9,567 542,831
Questar 15,883 261,275
Wisconsin Energy 8,562 464,745
------------
1,268,851
------------
TOTAL COMMON STOCK
(Cost $71,938,003) 80,981,043
------------
- --------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 3.8%
- --------------------------------------------------------------------------------
Dreyfus Cash Management 3,286,926 3,286,926
------------
TOTAL REGISTERED INVESTMENT COMPANY
(Cost $3,286,926) 3,286,926
------------
TOTAL INVESTMENTS - 97.6%
(Cost $75,224,929) 84,267,969
------------
OTHER ASSETS & LIABILITIES, NET - 2.4% 2,067,699
------------
NET ASSETS - 100.0% $ 86,335,668
============
The accompanying notes are an integral part of the financial statements.
78 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
LARGE CAP GROWTH FUND (CONCLUDED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
* NON-INCOME PRODUCING SECURITY.
++ THIS COMPANY IS DOMICILED OUTSIDE OF THE UNITED STATES. THE SECURITY'S
FUNCTIONAL CURRENCY IS THE UNITED STATES DOLLAR.
+ NARROW INDUSTRIES ARE UTILIZED FOR COMPLIANCE PURPOSES, WHEREAS BROAD
SECTORS ARE UTILIZED FOR REPORTING.
ADR - AMERICAN DEPOSITARY RECEIPT
CL - CLASS
PLC - PUBLIC LIABILITY COMPANY
SP ADR - SPONSORED AMERICAN DEPOSITARY RECEIPT
A summary of the inputs used to value the Fund's net assets as of July 31, 2010
is as follows (see Note 2 - significant accounting policies in the notes to
financial statements):
LEVEL 2 LEVEL 3
TOTAL FAIR LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
07/31/10 PRICE INPUTS INPUTS
------------ ------------ ----------- ------------
Investments in Securities * $ 84,267,969 $ 84,267,969 $ -- $ --
============ ============ =========== ============
* See schedule of investments detail for industry and security type
breakouts.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 79
SCHEDULE OF INVESTMENTS
JULY 31, 2010
LARGE CAP VALUE FUND
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - 98.1%+
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 7.6%
Autoliv * ++ 25,800 $ 1,481,952
Cooper Tire & Rubber 60,800 1,313,888
H&R Block 68,000 1,066,240
Office Depot * 242,200 1,046,304
Pulte Group * 103,600 909,608
Time Warner Cable 45,000 2,572,650
Viacom, Cl B 33,500 1,106,840
------------
9,497,482
------------
CONSUMER STAPLES - 7.9%
Altria Group 84,200 1,865,872
Archer-Daniels-Midland 34,000 930,240
CVS Caremark 67,000 2,056,230
Heineken ADR 82,300 1,859,157
Kraft Foods, Cl A 107,200 3,131,312
------------
9,842,811
------------
ENERGY - 17.9%
Apache 21,200 2,026,296
BP PLC, SP ADR 40,100 1,542,647
CONSOL Energy 36,800 1,379,264
Exxon Mobil 94,600 5,645,728
Halliburton 78,300 2,339,604
Pride International * 82,500 1,962,675
QEP Resources * 81,100 2,791,462
Suncor Energy (Canada) 75,100 2,474,545
Williams 110,000 2,135,100
------------
22,297,321
------------
FINANCIALS - 25.0%
ACE ++ 24,050 1,276,574
Annaly Capital Management REIT 75,000 1,305,000
Bank of America 266,800 3,745,872
Bank of New York Mellon 40,700 1,020,349
Berkshire Hathaway, Cl B * 24,500 1,913,940
CIT Group * 36,600 1,330,776
Goldman Sachs Group 12,650 1,907,873
Hanover Insurance Group 57,050 2,500,502
JPMorgan Chase 116,850 4,706,718
Marsh & McLennan 51,900 1,220,688
MetLife 50,850 2,138,751
MGIC Investment * 153,000 1,314,270
Moody's 81,450 1,918,147
Wells Fargo 172,800 4,791,744
------------
31,091,204
------------
HEALTH CARE - 12.3%
Baxter International 26,600 1,164,282
Boston Scientific * 317,900 1,780,240
GlaxoSmithKline PLC, SP ADR 61,000 2,145,370
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
HEALTH CARE - (CONTINUED)
Merck 73,900 $ 2,546,594
Pfizer 304,950 4,574,250
UnitedHealth Group 102,300 3,115,035
------------
15,325,771
------------
INDUSTRIAL - 12.7%
Avis Budget Group * 60,350 744,719
Cooper Industries, Cl A ++ 24,000 1,083,600
CSX 16,350 861,972
General Electric 130,500 2,103,660
Harsco 41,450 959,982
Honeywell International 37,350 1,600,821
Jardine Matheson Holdings, ADR 37,750 1,579,838
Lockheed Martin 14,850 1,115,978
Schindler Holding AG, COP (Switzerland) 26,000 2,331,189
Tyco International ++ 43,100 1,649,868
United Technologies 23,900 1,699,290
------------
15,730,917
------------
INFORMATION TECHNOLOGY - 6.0%
DST Systems 29,750 1,222,130
Intel 81,600 1,680,960
Microsoft 94,000 2,426,140
Nokia, SP ADR 104,700 995,697
Western Union 69,200 1,123,116
------------
7,448,043
------------
MATERIALS - 4.3%
Crown Holdings * 48,100 1,338,623
Rio Tinto, SP ADR 38,450 1,996,324
Vulcan Materials 33,200 1,501,968
Weyerhaeuser 29,750 482,545
------------
5,319,460
------------
TELECOMMUNICATION SERVICES - 3.3%
Sprint Nextel * 302,050 1,380,368
Vodafone Group PLC, SP ADR 113,650 2,668,502
------------
4,048,870
------------
UTILITIES - 1.1%
Questar 80,650 1,326,692
------------
TOTAL COMMON STOCK
(Cost $131,672,126) 121,928,571
------------
The accompanying notes are an integral part of the financial statements.
80 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
LARGE CAP VALUE FUND (CONCLUDED)
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 0.2%
- --------------------------------------------------------------------------------
Credit Suisse Securities (USA)
0.200%, dated 07/30/10, matures on
08/02/10, repurchase price $252,144
(collateralized by a U.S. Treasury Note
obligation, par value $255,000,
1.125%, 12/15/12, total market
value $257,745) $ 252,140 $ 252,140
------------
TOTAL REPURCHASE AGREEMENT
(Cost $252,140) 252,140
------------
TOTAL INVESTMENTS - 98.3%
(Cost $131,924,266) 122,180,711
------------
OTHER ASSETS & LIABILITIES, NET - 1.7% 2,070,917
------------
NET ASSETS - 100.0% $124,251,628
============
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
* NON-INCOME PRODUCING SECURITY.
++ THIS COMPANY IS DOMICILED OUTSIDE OF THE UNITED STATES. THE SECURITY'S
FUNCTIONAL CURRENCY IS THE UNITED STATES DOLLAR.
+ NARROW INDUSTRIES ARE UTILIZED FOR COMPLIANCE PURPOSES, WHEREAS BROAD
SECTORS ARE UTILIZED FOR REPORTING.
ADR - AMERICAN DEPOSITARY RECEIPT
CL - CLASS
COP - CERTIFICATES OF PARTICIPATION
PLC - PUBLIC LIABILITY COMPANY
REIT - REAL ESTATE INVESTMENT TRUST
SP ADR - SPONSORED AMERICAN DEPOSITARY RECEIPT
A summary of the inputs used to value the Fund's net assets as of July 31, 2010
is as follows (see Note 2 -- significant accounting policies in the notes to
financial statements):
LEVEL 2 LEVEL 3
TOTAL FAIR LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
07/31/10 PRICE INPUTS INPUTS
------------- ------------- ----------- ------------
Common Stock * $ 121,928,571 $ 121,928,571 $ -- $ --
Repurchase Agreement 252,140 -- 252,140 --
------------- ------------- ----------- ------------
Total: $ 122,180,711 $ 121,928,571 $ 252,140 $ --
============= ============= =========== ============
* See schedule of investments detail for industry type breakout.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 81
SCHEDULE OF INVESTMENTS
JULY 31, 2010
NYSE ARCA TECH 100 INDEX FUND
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - 100.0%+
- --------------------------------------------------------------------------------
HEALTH CARE - 17.7%
Amgen * 57,710 $ 3,146,926
AstraZeneca PLC, SP ADR 57,710 2,910,892
Biogen Idec * 57,710 3,224,835
Biovail ++ 57,710 1,263,272
Boston Scientific * 57,710 323,176
Bristol-Myers Squibb 57,710 1,438,133
CONMED * 57,710 1,109,763
Genzyme * 57,710 4,014,308
Kinetic Concepts * 57,710 2,049,282
Life Technologies * 57,710 2,480,953
Medtronic 57,710 2,133,539
Novartis AG, ADR 57,710 2,812,785
St. Jude Medical * 57,710 2,121,997
Thermo Fisher Scientific * 57,710 2,588,871
ViroPharma * 57,710 760,041
------------
32,378,773
------------
INDUSTRIAL - 6.1%
Goodrich 57,710 4,205,328
Lockheed Martin 57,710 4,336,907
Raytheon 57,710 2,670,242
------------
11,212,477
------------
INFORMATION TECHNOLOGY - 75.1%
ADC Telecommunications * 57,710 734,648
Adobe Systems * 57,710 1,657,431
Agilent Technologies * 57,710 1,611,840
Altera 57,710 1,599,721
Amdocs * ++ 57,710 1,577,214
Analog Devices 57,710 1,714,564
Apple * 57,710 14,845,897
Applied Materials 57,710 680,978
Arris Group * 57,710 537,857
Autodesk * 57,710 1,704,753
Automatic Data Processing 57,710 2,381,692
BMC Software * 57,710 2,053,322
Broadcom, Cl A 57,710 2,079,291
CA 57,710 1,128,808
Check Point Software Technologies * ++ 57,710 1,963,294
Ciena * 57,710 755,424
Cisco Systems * 57,710 1,331,370
Citrix Systems * 57,710 3,175,204
Computer Sciences 57,710 2,615,994
Compuware * 57,710 472,068
Comtech Telecommunications * 57,710 1,244,805
Corning 57,710 1,045,705
Cypress Semiconductor * 57,710 611,726
Dell * 57,710 764,080
Digital River * 57,710 1,517,196
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY - (CONTINUED)
DST Systems 57,710 $ 2,370,727
eBay * 57,710 1,206,716
EMC * 57,710 1,142,081
Emulex * 57,710 502,077
F5 Networks * 57,710 5,068,669
Harmonic * 57,710 402,239
Harris 57,710 2,569,826
Hewlett-Packard 57,710 2,656,968
Intel 57,710 1,188,826
InterDigital * 57,710 1,574,906
International Business Machines 57,710 7,409,964
Ixia * 57,710 633,656
j2 Global Communications * 57,710 1,357,916
JDS Uniphase * 57,710 626,153
Juniper Networks * 57,710 1,603,184
KLA-Tencor 57,710 1,827,676
Lam Research * 57,710 2,434,785
Linear Technology 57,710 1,839,795
LSI * 57,710 232,571
McAfee * 57,710 1,910,201
MEMC Electronic Materials * 57,710 551,708
Microsoft 57,710 1,489,495
Motorola * 57,710 432,248
National Semiconductor 57,710 796,398
NetApp * 57,710 2,441,133
Nokia, SP ADR 57,710 548,822
Novell * 57,710 348,568
Novellus Systems * 57,710 1,541,434
Open Text * 57,710 2,279,545
Oracle 57,710 1,364,264
Parametric Technology * 57,710 1,035,317
Polycom * 57,710 1,712,833
Progress Software * 57,710 1,725,529
QLogic * 57,710 918,743
QUALCOMM 57,710 2,197,597
RealNetworks * 57,710 191,597
Red Hat * 57,710 1,855,376
Salesforce.com * 57,710 5,710,405
SanDisk * 57,710 2,521,927
SAP, ADR 57,710 2,647,158
Seagate Technology * 57,710 724,261
Standard Microsystems * 57,710 1,270,774
Symantec * 57,710 748,499
Synopsys * 57,710 1,260,386
Tellabs 57,710 402,816
Teradata * 57,710 1,835,178
Teradyne * 57,710 620,960
Tessera Technologies * 57,710 979,916
Texas Instruments 57,710 1,424,860
The accompanying notes are an integral part of the financial statements.
82 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
NYSE ARCA TECH 100 INDEX FUND (CONCLUDED)
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY - (CONTINUED)
VASCO Data Security International * 57,710 $ 367,613
VeriSign * 57,710 1,624,537
Websense * 57,710 1,071,098
Western Digital * 57,710 1,522,967
Xerox Corp 57,710 562,095
Xilinx 57,710 1,611,263
Yahoo! * 57,710 801,015
------------
137,502,153
------------
TELECOMMUNICATION SERVICES - 1.1%
Telephone and Data Systems 57,710 1,969,642
------------
TOTAL COMMON STOCK
(Cost $143,719,684) 183,063,045
------------
- --------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 0.1%
- --------------------------------------------------------------------------------
Dreyfus Cash Management 186,214 186,214
------------
TOTAL REGISTERED INVESTMENT COMPANY
(Cost $186,214) 186,214
------------
TOTAL INVESTMENTS - 100.1%
(Cost $143,905,898) 183,249,259
------------
OTHER ASSETS & LIABILITIES, NET - (0.1)% (102,243)
------------
NET ASSETS - 100.0% $183,147,016
============
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
* NON-INCOME PRODUCING SECURITY.
++ THIS COMPANY IS DOMICILED OUTSIDE OF THE UNITED STATES. THE SECURITY'S
FUNCTIONAL CURRENCY IS THE UNITED STATES DOLLAR.
+ NARROW INDUSTRIES ARE UTILIZED FOR COMPLIANCE PURPOSES, WHEREAS BROAD
SECTORS ARE UTILIZED FOR REPORTING.
ADR - AMERICAN DEPOSITARY RECEIPT
CL - CLASS
PLC - PUBLIC LIABILITY COMPANY
SP ADR - SPONSORED AMERICAN DEPOSITARY RECEIPT
A summary of the inputs used to value the Fund's net assets as of July 31, 2010
is as follows (see Note 2 -- significant accounting policies in the notes to
financial statements):
LEVEL 2 LEVEL 3
TOTAL FAIR LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
07/31/10 PRICE INPUTS INPUTS
------------ ------------ ----------- ------------
Investments in Securities * $183,249,259 $183,249,259 $ -- $ --
============ ============ =========== ============
* See schedule of investments detail for industry and security type
breakouts.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 83
SCHEDULE OF INVESTMENTS
JULY 31, 2010
SMALL CAP ADVANTAGE FUND
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - 97.4%+
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 13.7%
AFC Enterprises * 25,000 $ 236,750
American Axle & Manufacturing Holdings * 23,500 218,785
Biglari Holdings * 300 87,150
Columbia Sportswear 10,400 509,704
Cracker Barrel Old Country Store 6,600 323,268
Dillard's, Cl A 6,000 138,840
Harte-Hanks 14,400 162,432
HOT Topic 18,300 96,807
Lincoln Educational Services * 3,400 71,706
Oxford Industries 10,600 237,440
Perry Ellis International * 3,700 82,843
Pinnacle Entertainment * 8,000 86,800
Red Robin Gourmet Burgers * 4,100 87,494
Skechers U.S.A., Cl A * 3,300 122,397
Standard Pacific * 17,500 70,000
Tenneco * 5,100 140,760
Texas Roadhouse * 8,800 118,624
Timberland, Cl A * 15,200 267,824
Volcom * 5,600 91,112
Warnaco Group * 3,100 129,487
------------
3,280,223
------------
CONSUMER STAPLES - 1.5%
Spectrum Brands Holdings * 3,700 107,300
United Natural Foods * 4,900 165,277
USANA Health Sciences * 2,100
87,990
------------
360,567
------------
ENERGY - 4.5%
Basic Energy Services * 9,100 85,267
Complete Production Services * 21,200 408,100
ION Geophysical * 45,900 201,501
PetroQuest Energy * 10,100 67,064
Swift Energy * 5,500 142,615
TETRA Technologies * 5,900 61,478
Western Refining * 19,900 105,470
------------
1,071,495
------------
FINANCIALS - 21.4%
1st United Bancorp * 14,600 108,624
Agree Realty REIT 5,200 120,120
Ashford Hospitality Trust REIT * 15,200 133,608
Bank Mutual 9,500 55,860
BioMed Realty Trust REIT 15,300 276,012
Brookline Bancorp 6,600 63,888
CBL & Associates Properties REIT 17,000 239,190
Cohen & Steers 14,200 316,660
Colonial Properties Trust REIT 9,700 156,364
Cousins Properties REIT 11,500 78,775
Developers Diversified Realty REIT 13,700 155,495
Employers Holdings 4,400 68,376
Extra Space Storage REIT 35,200 545,952
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
FINANCIALS - (CONTINUED)
Financial Engines * 6,400 $ 93,760
First Cash Financial Services * 4,100 98,318
First Interstate BancSystem 22,900 304,570
First Potomac Realty Trust REIT 6,400 99,200
Hallmark Financial Services * 10,400 105,456
Hudson Valley Holding 4,200 81,312
Infinity Property & Casualty 2,300 110,492
Investors Bancorp * 6,400 84,032
Kilroy Realty REIT 2,000 67,160
LaBranche * 24,000 90,960
Navigators Group * 7,500 319,725
Nelnet, Cl A 6,900 139,104
Parkway Properties REIT 13,500 225,585
Platinum Underwriters Holdings ++ 1,700 66,436
PMA Capital, Cl A * 10,300 69,113
Sierra Bancorp 11,500 136,275
Sovran Self Storage REIT 4,500 165,600
Trustmark 9,600 211,200
United Bankshares 3,400 86,802
Westamerica Bancorporation 4,400 236,544
------------
5,110,568
------------
HEALTH CARE - 13.8%
Accretive Health * 7,800 92,742
Alkermes * 5,200 67,080
AMERIGROUP * 9,900 354,024
Centene * 9,700 206,707
CONMED * 7,800 149,994
Cyberonics * 6,600 157,212
Healthspring * 6,800 127,840
InterMune * 8,400 81,984
Kendle International * 5,800 71,398
Magellan Health Services * 1,700 71,553
Medicis Pharmaceutical, Cl A 7,500 190,125
Medidata Solutions * 19,200 289,536
Molina Healthcare * 5,600 166,936
Nabi Biopharmaceuticals * 29,000 165,880
NPS Pharmaceuticals * 17,500 121,100
Omeros * 9,500 68,875
Osiris Therapeutics * 14,100 112,095
Par Pharmaceutical * 5,900 155,760
Savient Pharmaceuticals * 5,500 75,350
Sirona Dental Systems * 6,300 193,914
STERIS 6,900 219,351
ViroPharma * 13,400 176,478
------------
3,315,934
------------
INDUSTRIAL - 15.7%
AAR * 5,800 97,440
Actuant, Cl A 17,800 367,036
Administaff 5,400 140,724
Alaska Air Group * 4,600 237,314
The accompanying notes are an integral part of the financial statements.
84 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
SMALL CAP ADVANTAGE FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
INDUSTRIAL - (CONTINUED)
AMERCO * 1,600 $ 109,072
American Railcar Industries * 17,700 241,605
American Reprographics * 16,300 145,070
AO Smith 1,500 82,020
Applied Industrial Technologies 5,400 151,200
Atlas Air Worldwide Holdings * 3,600 210,528
AZZ 1,600 69,648
Barnes Group 3,600 66,168
Blount International * 10,100 107,565
CDI 8,700 146,160
Consolidated Graphics * 3,200 137,504
Deluxe 8,100 166,698
Encore Wire 3,600 76,608
Force Protection * 58,200 260,154
Granite Construction 4,100 95,325
Griffon * 4,800 65,088
Knoll 24,400 342,332
Ladish * 3,500 102,935
Layne Christensen * 3,300 83,193
Sykes Enterprises * 5,500 87,175
United Stationers * 3,100 167,865
------------
3,756,427
------------
INFORMATION TECHNOLOGY - 20.2%
Acxiom * 10,700 164,138
Anaren * 7,700 121,814
Aspen Technology * 5,100 55,743
ATMI * 12,800 189,952
Benchmark Electronics * 26,100 435,870
BigBand Networks * 22,000 68,640
Blackbaud 2,700 63,963
Cirrus Logic * 8,300 161,850
Diodes * 7,100 125,528
Fair Isaac 3,600 85,860
Internet Capital Group * 21,000 176,820
Kenexa * 13,500 162,405
LogMeIn * 12,500 356,250
Manhattan Associates * 16,100 432,446
MaxLinear, Cl A * 4,100 51,291
MicroStrategy, Cl A * 1,400 116,186
NETGEAR * 10,300 247,200
OmniVision Technologies * 5,300 118,243
Progress Software * 3,700 110,630
Spansion, Cl A * 3,600 60,552
Stamps.com * 9,900 108,306
TeleTech Holdings * 20,800 289,120
TIBCO Software * 43,000 583,080
ValueClick * 15,900 174,105
VeriFone Systems * 12,300 269,124
Wright Express * 3,000 104,970
------------
4,834,086
------------
- --------------------------------------------------------------------------------
Description Shares/Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
MATERIALS - 4.6%
AEP Industries * 2,500 $ 72,250
Capital Gold * 15,100 56,323
Century Aluminum * 7,000 73,010
Domtar ++ 2,400 140,400
Innospec * 6,300 69,300
Kraton Performance Polymers * 6,000 140,760
Minerals Technologies 2,200 114,774
Rockwood Holdings * 2,400 70,104
Stillwater Mining * 17,300 238,221
U.S. Energy * 12,200 58,560
U.S. Gold * 12,300 60,885
------------
1,094,587
------------
TELECOMMUNICATION SERVICES - 0.3%
Alaska Communications Systems Group 7,600 70,376
------------
UTILITIES - 1.7%
Nicor 5,700 249,603
NorthWestern 2,700 76,140
Portland General Electric 4,200 80,220
------------
405,963
------------
TOTAL COMMON STOCK
(Cost $20,928,491) 23,300,226
------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 2.1%
- --------------------------------------------------------------------------------
Credit Suisse Securities (USA)0.200%, dated
07/30/10, matures on 08/02/10, repurchase
price $494,166 (collateralized by a U.S.
Treasury Note obligation, par value
$500,000,1.125% 12/15/12, total
marketvalue $505,382) $ 494,158 494,158
------------
TOTAL REPURCHASE AGREEMENT
(Cost $494,158) 494,158
------------
TOTAL INVESTMENTS - 99.5%
(Cost $21,422,649) 23,794,384
------------
OTHER ASSETS & LIABILITIES, NET - 0.5% 119,664
------------
NET ASSETS - 100.0% $ 23,914,048
============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 85
SCHEDULE OF INVESTMENTS
JULY 31, 2010
SMALL CAP ADVANTAGE FUND (CONCLUDED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
* NON-INCOME PRODUCING SECURITY.
++ THIS COMPANY IS DOMICILED OUTSIDE OF THE UNITED STATES. THE SECURITY'S
FUNCTIONAL CURRENCY IS THE UNITED STATES DOLLAR.
+ NARROW INDUSTRIES ARE UTILIZED FOR COMPLIANCE PURPOSES, WHEREAS BROAD
SECTORS ARE UTILIZED FOR REPORTING.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CL - CLASS
REIT - REAL ESTATE INVESTMENT TRUST
FUTURES - A SUMMARY OF THE OPEN FUTURES CONTRACTS HELD BY THE FUND AT JULY 31,
2010 IS AS FOLLOWS:
LONG FUTURES NUMBER OF EXPIRATION UNREALIZED
OUTSTANDING CONTRACTS DATE COUNTERPARTY DEPRECIATION*
- -----------------------------------------------------------------------------
Russell 2000 September
Mini Index Futures 7 2010 GSC $ (1,894)
* The primary risk exposure is equity contracts.
A summary of the inputs used to value the Fund's net assets as of July 31, 2010
is as follows (see Note 2 - significant accounting policies in the notes to
financial statements):
LEVEL 2 LEVEL 3
TOTAL FAIR LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
07/31/10 PRICE INPUTS INPUTS
------------- ------------ ----------- ------------
Common Stocks * $ 23,300,226 $ 23,300,226 $ -- $ --
Repurchase Agreement 494,158 -- 494,158 --
Derivatives (1)
Equity Contracts (1,894) (1,894) -- --
------------- ------------ ----------- ------------
Total: $ 23,792,490 $ 23,298,332 $ 494,158 $ --
============= ============ =========== ============
* See schedule of investments detail for industry breakout.
(1) Investments in derivatives include open futures contracts.
The accompanying notes are an integral part of the financial statements.
86 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
SMALL CAP VALUE FUND
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - 99.5%+
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 12.9%
American Greetings, Cl A (A) 37,400 $ 766,326
Arctic Cat * 31,782 316,231
Big Lots * (A) 12,300 422,013
Blyth 7,100 280,805
Bob Evans Farms (A) 26,300 689,586
Cabela's * (A) 43,200 673,488
Callaway Golf (A) 42,300 285,525
Cooper Tire & Rubber 33,600 726,096
Cracker Barrel Old Country Store 19,300 945,314
Journal Communications, Cl A * 70,900 337,484
National Presto Industries 3,800 387,562
O'Charleys * 31,500 219,555
RadioShack 28,200 607,428
Rent-A-Center * (A) 16,000 351,840
Ruby Tuesday * (A) 77,600 793,072
Scholastic (A) 22,200 562,326
Stage Stores 61,800 679,800
------------
9,044,451
------------
CONSUMER STAPLES - 5.3%
Cal-Maine Foods (A) 11,800 372,762
Chiquita Brands International * (A) 23,900 350,852
Corn Products International 15,700 523,438
Del Monte Foods 63,700 884,156
Fresh Del Monte Produce * ++ (A) 31,200 650,208
Nash Finch (A) 6,200 243,784
Universal (A) 16,600 736,210
------------
3,761,410
------------
ENERGY - 5.6%
Allis-Chalmers Energy * (A) 34,400 89,784
Atwood Oceanics * (A) 24,500 666,400
Hornbeck Offshore Services * 27,700 466,191
Knightsbridge Tankers ++ (A) 29,100 543,006
Overseas Shipholding Group (A) 8,900 349,147
SEACOR Holdings * 4,700 389,253
Tesoro 27,100 349,861
USEC * (A) 119,000 658,070
VAALCO Energy * (A) 73,100 436,407
------------
3,948,119
------------
FINANCIALS - 30.7%
Allied World Assurance Company Holdings ++ 7,000 348,740
Alterra Capital Holdings ++ 20,000 387,000
American Equity Investment Life Holding 41,200 444,960
Anworth Mortgage Asset REIT (A) 40,200 280,194
Ares Capital 5,590 78,316
Ashford Hospitality Trust REIT * (A) 44,500 391,155
Astoria Financial (A) 50,500 668,620
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
FINANCIALS - (CONTINUED)
Banco Latinoamericano de Exportaciones,
Cl E ++ 46,900 $ 580,153
BioMed Realty Trust REIT 27,700 499,708
Camden National (A) 11,554 361,063
Capstead Mortgage REIT (A) 50,000 585,000
Cathay General Bancorp 15,200 178,752
CBL & Associates Properties REIT (A) 12,245 172,287
Cedar Shopping Centers REIT 51,400 318,680
Citizens Republic Bancorp * 1 1
CNA Surety * 19,500 336,375
CNO Financial Group * 76,600 411,342
Commonwealth REIT (A) 30,925 802,504
Dime Community Bancshares 27,200 356,320
Dynex Capital REIT (A) 25,800 250,260
Encore Capital Group * (A) 18,941 416,702
First Bancorp (A) 38,629 644,718
First Bancorp/ Puerto Rico * (A) 54,100 30,567
First Financial Holdings (A) 11,000 138,380
Flushing Financial (A) 35,800 446,426
GFI Group (A) 92,900 547,181
Harleysville Group 11,200 352,576
Hercules Technology Growth Capital (A) 44,000 460,240
Horace Mann Educators 47,900 805,678
Huntington Bancshares 118,700 719,322
Independent Bank (A) 49,665 17,383
Infinity Property & Casualty (A) 10,500 504,420
Integra Bank (A) 51,000 37,740
International Bancshares (A) 40,100 695,334
Medical Properties Trust REIT (A) 49,600 493,024
Montpelier Re Holdings ++ 43,300 704,058
Nelnet, Cl A (A) 39,400 794,304
One Liberty Properties REIT (A) 52,346 814,504
Oriental Financial Group (A) 56,100 794,376
Parkway Properties REIT (A) 21,500 359,265
Pennantpark Investment 33,100 347,881
Presidential Life 28,351 278,123
Protective Life 21,100 474,539
RAIT Financial Trust REIT * (A) 38,200 76,400
Republic Bancorp, Cl A (A) 20,218 501,002
Safety Insurance Group 15,900 623,280
SeaBright Insurance Holdings 22,600 185,094
Selective Insurance Group (A) 23,500 365,660
Sierra Bancorp (A) 18,000 213,300
StanCorp Financial Group (A) 13,600 512,584
Validus Holdings ++ 13,500 335,340
Walter Investment Management REIT (A) 14,200 245,234
Whitney Holding (A) 24,400 198,128
------------
21,584,193
------------
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 87
SCHEDULE OF INVESTMENTS
JULY 31, 2010
SMALL CAP VALUE FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
HEALTH CARE - 7.0%
Endo Pharmaceuticals Holdings * 17,500 $ 420,175
Kendle International * (A) 22,100 272,051
Kindred Healthcare * (A) 23,400 311,220
Kinetic Concepts * 9,400 333,794
Lumenis * ++ 13 --
Magellan Health Services * 13,300 559,797
Nighthawk Radiology Holdings * 56,000 165,760
Par Pharmaceutical * 32,700 863,280
PDL BioPharma (A) 56,000 348,320
PharMerica * 33,400 436,204
Skilled Healthcare Group, Cl A * (A) 54,300 144,438
Universal American Financial * (A) 56,961 953,527
Universal Health Services, Cl B 4,000 143,880
------------
4,952,446
------------
INDUSTRIAL - 15.0%
Alaska Air Group * 10,400 536,537
Ampco-Pittsburgh (A) 21,600 518,616
AO Smith (A) 11,600 634,288
ATC Technology * 21,800 522,764
Crane 16,600 589,964
Deluxe (A) 46,200 950,796
Dycom Industries * 52,400 474,220
EMCOR Group * 30,700 798,507
Ennis (A) 44,500 752,940
EnPro Industries * 26,500 793,675
Esterline Technologies * (A) 11,200 574,896
Genco Shipping & Trading * (A) 13,900 232,130
Hubbell, Cl B 7,100 335,049
Mueller Industries (A) 15,600 385,631
NACCO Industries, Cl A 9,400 836,976
PAM Transportation Services * 43,452 635,268
Ryder System 9,800 427,966
Seaboard 110 166,980
Teledyne Technologies * 8,900 365,167
------------
10,532,370
------------
INFORMATION TECHNOLOGY - 10.8%
Arris Group * (A) 47,800 445,496
Benchmark Electronics * (A) 19,700 328,990
Black Box 9,123 277,704
CIBER * (A) 121,000 402,930
Convergys * (A) 64,000 714,880
CSG Systems International * (A) 36,600 690,276
CTS (A) 82,200 768,570
Fairchild Semiconductor International * 36,500 331,420
Gerber Scientific * (A) 53,200 305,368
Imation * 29,100 271,212
Multi-Fineline Electronix * (A) 27,800 704,452
RF Micro Devices * (A) 98,000 408,660
- --------------------------------------------------------------------------------
Description Shares/Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY - (CONTINUED)
Silicon Image * (A) 81,100 $ 345,486
Smart Modular Technologies WWH * 62,300 337,043
Tech Data * (A) 12,700 502,412
United Online (A) 118,800 750,816
------------
7,585,715
------------
MATERIALS - 4.4%
Glatfelter (A) 58,800 672,084
NewMarket (A) 8,500 911,115
OM Group * 11,100 299,700
Rock-Tenn, Cl A 14,000 745,080
Stepan (A) 6,700 442,267
------------
3,070,246
------------
TELECOMMUNICATION SERVICES - 1.4%
Cincinnati Bell * 190,800 564,768
Frontier Communications (A) 1 8
USA Mobility (A) 30,500 452,315
------------
1,017,091
------------
UTILITIES - 6.4%
Avista (A) 37,100 776,132
El Paso Electric * (A) 38,400 825,600
Energen 11,700 519,948
Nicor (A) 9,300 407,247
NorthWestern 16,100 454,020
NV Energy 22,800 289,560
Portland General Electric 22,000 420,200
Unisource Energy 13,600 439,008
Vectren 15,100 374,027
------------
4,505,742
------------
TOTAL COMMON STOCK
(Cost $76,888,149) 70,001,783
------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 42.8%
- --------------------------------------------------------------------------------
Bank of America (B)
0.29%, dated 07/30/10, matures on
08/02/10, repurchase price $7,000,169
(collateralized by a corporate
obligation, par value $11,799,092,
0.00%, 08/15/15, total market
value $7,350,000) $ 7,000,000 7,000,000
Credit Suisse Securities (USA)
0.200%, dated 07/30/10, matures on
08/02/10, repurchase price $416,752
(collateralized by a U.S. Treasury Note
obligation, par value $425,000,
1.125%,12/15/12, total market
value $429,574) 416,745 416,745
The accompanying notes are an integral part of the financial statements.
88 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
SMALL CAP VALUE FUND (CONCLUDED)
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - (CONTINUED)
- --------------------------------------------------------------------------------
Deutche Bank Securities, Inc. (B)
0.20%, dated 07/30/10, matures on
08/02/10, repurchase price
$6,000,100 (collateralized by a
corporate obligation, par value
$10,179,879, 0.550%, 09/30/11,
total market value $6,120,287) $ 6,000,000 $ 6,000,000
HSBC Securities (B)
0.36%, dated 07/30/10, matures on
08/02/10, repurchase price
$7,000,210 (collateralized by a
corporate obligation, par value
$9,630,000, 4.45%, 06/24/20,
total market value $7,350,629) 7,000,000 7,000,000
HSBC Securities (B)
0.19%, dated 07/30/10, matures on
08/02/10, repurchase price
$2,736,891 (collateralized by a
U.S. Treasury Note obligation,
par value $4,080,000, 3.625%,
08/15/19, total market
value $2,793,453) 2,736,848 2,736,848
JPMorgan Chase & Co (B)
0.34%, dated 07/30/10, matures on
08/02/10, repurchase price
$7,000,198 (collateralized by
various corporate obligations, ranging
in par value from $1,170,000 -
$4,433,000, 5.500% - 7.300%,
05/15/12 - 11/18/14, total market
value $7,351,162) 7,000,000 7,000,000
------------
TOTAL REPURCHASE AGREEMENTS
(Cost $30,153,593) 30,153,593
------------
TOTAL INVESTMENTS - 142.3%
(Cost $107,041,742) 100,155,376
------------
OTHER ASSETS & LIABILITIES, NET - (42.3)% (29,768,406)
------------
NET ASSETS - 100.0% $ 70,386,970
============
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
* NON-INCOME PRODUCING SECURITY.
++ THIS COMPANY IS DOMICILED OUTSIDE OF THE UNITED STATES. THE SECURITY'S
FUNCTIONAL CURRENCY IS THE UNITED STATES DOLLAR.
+ NARROW INDUSTRIES ARE UTILIZED FOR COMPLIANCE PURPOSES, WHEREAS BROAD
SECTORS ARE UTILIZED FOR REPORTING.
(A) THIS SECURITY OR PARTIAL POSITION OF THIS SECURITY IS ON LOAN AT JULY 31,
2010. THE TOTAL VALUE OF SECURITIES ON LOAN AT JULY 31, 2010 IS
$28,643,081.
(B) THIS SECURITY WAS PURCHASED WITH CASH COLLATERAL RECEIVED FROM SECURITIES
LENDING.
CL - CLASS
REIT - REAL ESTATE INVESTMENT TRUST
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
A summary of the inputs used to value the Fund's net assets as of July 31, 2010
is as follows (see Note 2- significant accounting policies in the notes to
financial statements):
LEVEL 2 LEVEL 3
TOTAL FAIR LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
07/31/10 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Common Stock * $ 70,001,783 $ 70,001,783 $ -- $ --
Repurchase Agreements 30,153,593 -- 30,153,593 --
------------ ------------ ------------ ------------
Total: $100,155,376 $ 70,001,783 $ 30,153,593 $ --
============ ============ ============ ============
* See schedule of investments detail for industry breakout.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 89
SCHEDULE OF INVESTMENTS
JULY 31, 2010
VALUE MOMENTUM FUND
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - 97.8%+
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 9.7%
Comcast, Cl A 336,000 $ 6,202,560
Home Depot 166,000 4,732,660
McGraw-Hill 150,400 4,615,776
News, Cl A 421,800 5,504,490
Time Warner 109,000 3,429,140
Time Warner Cable 92,600 5,293,942
------------
29,778,568
------------
CONSUMER STAPLES - 14.6%
Altria Group 165,900 3,676,344
Diageo, ADR 85,400 5,967,752
Heineken ADR 161,500 3,648,285
Henkel KGaA, ADR 85,000 3,485,000
Kraft Foods, Cl A 139,000 4,060,190
Nestle, ADR 153,800 7,590,030
Philip Morris International 129,000 6,584,160
Wal-Mart Stores 88,000 4,504,720
Walgreens 183,000 5,224,650
------------
44,741,131
------------
ENERGY - 14.3%
Apache 5,450 520,911
Chevron 141,900 10,814,199
Exxon Mobil 156,600 9,345,888
Halliburton 90,800 2,713,104
Marathon Oil 181,000 6,054,450
Peabody Energy 38,500 1,738,275
QEP Resources * 135,000 4,646,700
Suncor Energy (Canada) 122,500 4,036,375
Williams 202,700 3,934,407
------------
43,804,309
------------
FINANCIALS - 16.8%
Bank of America 428,600 6,017,544
Bank of New York Mellon 151,800 3,805,626
Berkshire Hathaway, Cl B * 114,700 8,960,364
Goldman Sachs Group 30,800 4,645,256
Hanover Insurance Group 97,900 4,290,957
JPMorgan Chase 279,400 11,254,232
Loews 71,100 2,641,365
MetLife 95,500 4,016,730
Wells Fargo 207,800 5,762,294
------------
51,394,368
------------
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
HEALTH CARE - 7.4%
Boston Scientific * 338,000 $ 1,892,800
Covidien PLC ++ 69,800 2,604,936
Johnson & Johnson 68,200 3,961,738
Merck 221,300 7,625,998
Pfizer 310,900 4,663,500
UnitedHealth Group 63,300 1,927,485
------------
22,676,457
------------
INDUSTRIAL - 15.9%
ABB, SP ADR * 170,000 3,430,600
Deere 38,800 2,587,184
Dun & Bradstreet 47,900 3,274,444
General Electric 672,500 10,840,700
Honeywell International 105,000 4,500,300
Jardine Matheson Holdings, ADR 50,500 2,113,425
Lockheed Martin 45,000 3,381,750
Schindler Holding AG, COP (Switzerland) 32,005 2,869,604
Tyco International ++ 66,100 2,530,308
Union Pacific 58,500 4,368,195
United Technologies 54,700 3,889,170
Waste Management 147,300 5,000,835
------------
48,786,515
------------
INFORMATION TECHNOLOGY - 15.2%
Accenture, Cl A ++ 88,300 3,500,212
Automatic Data Processing 60,500 2,496,835
Corning 222,600 4,033,512
Hewlett-Packard 89,500 4,120,580
Intel 243,500 5,016,100
International Business Machines 58,850 7,556,340
Microsoft 514,800 13,286,988
Nokia, SP ADR 125,100 1,189,701
Teradata * 63,300 2,012,940
Western Union 205,500 3,335,265
------------
46,548,473
------------
MATERIALS - 1.8%
Dow Chemical 56,800 1,552,344
Rio Tinto, SP ADR 46,000 2,388,320
Weyerhaeuser 100,000 1,622,000
------------
5,562,664
------------
TELECOMMUNICATION SERVICES - 1.4%
AT&T 116,700 3,027,198
Sprint Nextel * 261,600 1,195,512
------------
4,222,710
------------
UTILITIES - 0.7%
Questar 133,800 2,201,010
------------
TOTAL COMMON STOCK
(Cost $279,411,959) 299,716,205
------------
The accompanying notes are an integral part of the financial statements.
90 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
VALUE MOMENTUM FUND (CONCLUDED)
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 1.3%
- --------------------------------------------------------------------------------
Dreyfus Cash Management 3,952,990 $ 3,952,990
------------
TOTAL REGISTERED INVESTMENT COMPANY
(Cost $3,952,990) 3,952,990
------------
TOTAL INVESTMENTS - 99.1%
(Cost $283,364,949) 303,669,195
------------
OTHER ASSETS & LIABILITIES, NET - 0.9% 2,611,713
------------
NET ASSETS - 100.0% $306,280,908
============
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
* NON-INCOME PRODUCING SECURITY.
++ THIS COMPANY IS DOMICILED OUTSIDE OF THE UNITED STATES. THE SECURITY'S
FUNCTIONAL CURRENCY IS THE UNITED STATES DOLLAR.
+ NARROW INDUSTRIES ARE UTILIZED FOR COMPLIANCE PURPOSES, WHEREAS BROAD
SECTORS ARE UTILIZED FOR REPORTING.
ADR - AMERICAN DEPOSITARY RECEIPT
CL - CLASS
COP - CERTIFICATES OF PARTICIPATION
PLC - PUBLIC LIABILITY COMPANY
SP ADR - SPONSORED AMERICAN DEPOSITARY RECEIPT
A summary of the inputs used to value the Fund's net assets as of July 31, 2010
is as follows (see Note 2 - significant accounting policies in the notes to
financial statements):
LEVEL 2 LEVEL 3
TOTAL FAIR LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
07/31/10 PRICE INPUTS INPUTS
------------ ------------ ----------- ------------
Investments in Securities * $303,669,195 $303,669,195 $ -- $ --
============ ============ =========== ============
* See schedule of investments detail for industry breakout.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 91
SCHEDULE OF INVESTMENTS
JULY 31, 2010
CAPITAL GROWTH ALLOCATION FUND
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AFFILIATED EQUITY REGISTERED INVESTMENT COMPANIES - 84.3%
- --------------------------------------------------------------------------------
HighMark Cognitive Value Fund,
Fiduciary Shares - 0.6% 26,276 $ 246,206
HighMark Core Equity Fund,
Fiduciary Shares - 17.0% 935,097 6,770,101
HighMark Enhanced Growth Fund,
Fiduciary Shares - 1.6% 67,828 624,021
HighMark Fundamental Equity Fund,
Fiduciary Shares - 8.6% 189,576 3,429,437
HighMark Geneva Mid Cap Growth Fund,
Fiduciary Shares - 1.3% * 29,466 529,799
HighMark Geneva Small Cap Growth Fund,
Fiduciary Shares - 1.1% * 17,382 424,990
HighMark International Opportunities Fund,
Fiduciary Shares - 13.4% 845,574 5,352,482
HighMark Large Cap Growth Fund,
Fiduciary Shares - 6.6% 299,182 2,635,798
HighMark Large Cap Value Fund,
Fiduciary Shares - 15.2% 588,623 6,045,153
HighMark Small Cap Advantage Fund,
Fiduciary Shares - 10.5% 288,237 4,190,969
HighMark Small Cap Value Fund,
Fiduciary Shares - 3.6% 121,311 1,422,973
HighMark Value Momentum Fund,
Fiduciary Shares - 4.8% 139,490 1,902,641
------------
TOTAL AFFILIATED EQUITY REGISTERED
INVESTMENT COMPANIES
(Cost $35,822,234) 33,574,570
------------
- --------------------------------------------------------------------------------
AFFILIATED FIXED INCOME REGISTERED INVESTMENT COMPANIES - 5.9%
- --------------------------------------------------------------------------------
HighMark Bond Fund,
Fiduciary Shares - 0.0% 772 8,783
HighMark Short Term Bond Fund,
Fiduciary Shares - 5.9% 232,227 2,347,815
------------
TOTAL AFFILIATED FIXED INCOME REGISTERED
INVESTMENT COMPANIES
(Cost $2,309,370) 2,356,598
------------
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AFFILIATED MONEY MARKET REGISTERED INVESTMENT COMPANY - 0.6%
- --------------------------------------------------------------------------------
HighMark Diversified Money Market Fund,
Fiduciary Shares, 0.16% (A) 262,523 $ 262,523
------------
TOTAL AFFILIATED MONEY MARKET REGISTERED
INVESTMENT COMPANY
(Cost $262,523) 262,523
------------
- --------------------------------------------------------------------------------
EQUITY REGISTERED INVESTMENT COMPANIES - 7.9%
- --------------------------------------------------------------------------------
Fidelity Advisor Industrials Fund,
Institutional Class - 1.2% 20,889 465,825
JPMorgan Small Cap Growth Fund,
Institutional Class - 1.7% * 71,359 659,357
Lazard Emerging Markets Equity Portfolio,
Institutional Class - 3.4% 70,684 1,367,029
Morgan Stanley Institutional Fund -
U.S. Real Estate Portfolio,
Institutional Class - 1.6% 49,572 639,480
------------
TOTAL EQUITY REGISTERED INVESTMENT COMPANIES
(Cost $2,604,728) 3,131,691
------------
- --------------------------------------------------------------------------------
FIXED INCOME REGISTERED INVESTMENT COMPANY - 1.3%
- --------------------------------------------------------------------------------
Eaton Vance Income Fund of Boston,
Institutional Class - 1.3% 94,067 534,302
------------
TOTAL FIXED INCOME REGISTERED
INVESTMENT COMPANY
(Cost $495,090) 534,302
------------
TOTAL INVESTMENTS - 100.0%
(Cost $41,493,945) 39,859,684
------------
OTHER ASSETS & LIABILITIES, NET - 0.0% (14,923)
------------
NET ASSETS - 100.0% $ 39,844,761
============
- --------------------------------------------------------------------------------
* NON-INCOME PRODUCING SECURITY.
(A) THE RATE SHOWN REPRESENTS THE 7-DAY EFFECTIVE YIELD AS OF JULY 31, 2010.
A summary of the inputs used to value the Fund's net assets as of July 31, 2010
is as follows (see Note 2 - significant accounting policies in the notes to
financial statements):
LEVEL 2 LEVEL 3
TOTAL FAIR LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
07/31/10 PRICE INPUTS INPUTS
------------ ------------ ----------- ------------
Investments in Securities * $ 39,859,684 $ 39,859,684 $ -- $ --
============ ============ =========== ============
* See schedule of investments detail for security type breakout.
The accompanying notes are an integral part of the financial statements.
92 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
DIVERSIFIED EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AFFILIATED EQUITY REGISTERED INVESTMENT COMPANIES - 90.2%
- --------------------------------------------------------------------------------
HighMark Cognitive Value Fund,
Fiduciary Shares - 0.7% 5,473 $ 51,280
HighMark Core Equity Fund,
Fiduciary Shares - 20.1% 208,410 1,508,886
HighMark Enhanced Growth Fund,
Fiduciary Shares - 2.0% 15,910 146,374
HighMark Fundamental Equity Fund,
Fiduciary Shares - 10.2% 42,374 766,545
HighMark Geneva Mid Cap Growth Fund,
Fiduciary Shares - 1.5% * 6,214 111,728
HighMark Geneva Small Cap Growth Fund,
Fiduciary Shares - 1.2% * 3,655 89,365
HighMark International Opportunities Fund,
Fiduciary Shares - 14.0% 166,416 1,053,412
HighMark Large Cap Growth Fund,
Fiduciary Shares - 5.1% 43,257 381,094
HighMark Large Cap Value Fund,
Fiduciary Shares - 14.7% 107,688 1,105,952
HighMark Small Cap Advantage Fund,
Fiduciary Shares - 11.4% 58,868 855,941
HighMark Small Cap Value Fund,
Fiduciary Shares - 3.8% 24,580 288,319
HighMark Value Momentum Fund,
Fiduciary Shares - 5.5% 30,431 415,075
------------
TOTAL AFFILIATED EQUITY REGISTERED
INVESTMENT COMPANIES
(Cost $6,071,195) 6,773,971
------------
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AFFILIATED MONEY MARKET REGISTERED INVESTMENT COMPANY - 0.4%
- --------------------------------------------------------------------------------
HighMark Diversified Money Market Fund,
Fiduciary Shares, 0.16% (A) 29,722 $ 29,722
------------
TOTAL AFFILIATED MONEY MARKET REGISTERED
INVESTMENT COMPANY
(Cost $29,722) 29,722
------------
- --------------------------------------------------------------------------------
EQUITY REGISTERED INVESTMENT COMPANIES - 9.6%
- --------------------------------------------------------------------------------
Fidelity Advisor Industrials Fund,
Institutional Class - 1.5% 4,958 110,563
JPMorgan Small Cap Growth Fund,
Institutional Class - 1.8% * 14,382 132,885
Lazard Emerging Markets Equity Portfolio,
Institutional Class - 4.2% 16,507 319,241
Morgan Stanley Institutional Fund -
U.S. Real Estate Portfolio,
Institutional Class - 2.1% 12,063 155,610
------------
TOTAL EQUITY REGISTERED
INVESTMENT COMPANIES
(Cost $596,312) 718,299
------------
TOTAL INVESTMENTS - 100.2%
(Cost $6,697,229) 7,521,992
------------
OTHER ASSETS & LIABILITIES, NET - (0.2)% (11,705)
------------
NET ASSETS - 100.0% $ 7,510,287
============
- --------------------------------------------------------------------------------
* NON-INCOME PRODUCING SECURITY.
(A) THE RATE SHOWN REPRESENTS THE 7-DAY EFFECTIVE YIELD AS OF JULY 31, 2010.
A summary of the inputs used to value the Fund's net assets as of July 31, 2010
is as follows (see Note 2 - significant accounting policies in the notes to
financial statements):
LEVEL 2 LEVEL 3
TOTAL FAIR LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
07/31/10 PRICE INPUTS INPUTS
------------ ------------ ----------- ------------
Investments in Securities * $ 7,521,992 $ 7,521,992 $ -- $ --
============ ============ =========== ============
* See schedule of investments detail for security type breakout.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 93
SCHEDULE OF INVESTMENTS
JULY 31, 2010
GROWTH & INCOME ALLOCATION FUND
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AFFILIATED EQUITY REGISTERED INVESTMENT COMPANIES - 66.1%
- --------------------------------------------------------------------------------
HighMark Cognitive Value Fund,
Fiduciary Shares - 0.5% 22,616 $ 211,910
HighMark Core Equity Fund,
Fiduciary Shares - 12.3% 738,531 5,346,968
HighMark Enhanced Growth Fund,
Fiduciary Shares - 1.2% 55,391 509,602
HighMark Fundamental Equity Fund,
Fiduciary Shares - 6.3% 150,704 2,726,227
HighMark Geneva Mid Cap Growth Fund,
Fiduciary Shares - 1.2% * 29,439 529,313
HighMark Geneva Small Cap Growth Fund,
Fiduciary Shares - 0.9% * 15,505 379,097
HighMark International Opportunities Fund,
Fiduciary Shares - 11.1% 757,646 4,795,897
HighMark Large Cap Growth Fund,
Fiduciary Shares - 5.6% 273,571 2,410,157
HighMark Large Cap Value Fund,
Fiduciary Shares - 12.2% 514,099 5,279,794
HighMark Small Cap Advantage Fund,
Fiduciary Shares - 8.5% 252,064 3,665,005
HighMark Small Cap Value Fund,
Fiduciary Shares - 2.9% 106,250 1,246,309
HighMark Value Momentum Fund,
Fiduciary Shares - 3.4% 109,079 1,487,839
------------
TOTAL AFFILIATED EQUITY REGISTERED
INVESTMENT COMPANIES
(Cost $26,748,174) 28,588,118
------------
- --------------------------------------------------------------------------------
AFFILIATED FIXED INCOME REGISTERED INVESTMENT COMPANIES - 22.5%
- --------------------------------------------------------------------------------
HighMark Bond Fund,
Fiduciary Shares - 8.2% 309,596 3,523,201
HighMark Short Term Bond Fund,
Fiduciary Shares - 14.3% 611,187 6,179,101
------------
TOTAL AFFILIATED FIXED INCOME REGISTERED
INVESTMENT COMPANIES
(Cost $9,381,945) 9,702,302
------------
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AFFILIATED MONEY MARKET REGISTERED INVESTMENT COMPANY - 2.8%
- --------------------------------------------------------------------------------
HighMark Diversified Money Market Fund,
Fiduciary Shares, 0.16% (A) 224,736 $ 1,224,736
------------
TOTAL AFFILIATED MONEY MARKET REGISTERED
INVESTMENT COMPANY
(Cost $1,224,736) 1,224,736
------------
- --------------------------------------------------------------------------------
EQUITY REGISTERED INVESTMENT COMPANIES - 6.0%
- --------------------------------------------------------------------------------
Fidelity Advisor Industrials Fund,
Institutional Class - 0.9% 16,894 376,736
JPMorgan Small Cap Growth Fund,
Institutional Class - 1.3% * 63,713 588,710
Lazard Emerging Markets Equity Portfolio,
Institutional Class - 2.6% 57,518 1,112,391
Morgan Stanley Institutional Fund -
U.S. Real Estate Portfolio,
Institutional Class - 1.2% 40,441 521,695
------------
TOTAL EQUITY REGISTERED INVESTMENT
COMPANIES
(Cost $2,138,474) 2,599,532
------------
- --------------------------------------------------------------------------------
FIXED INCOME REGISTERED INVESTMENT COMPANY - 2.7%
- --------------------------------------------------------------------------------
Eaton Vance Income Fund of Boston,
Institutional Class - 2.7% 204,911 1,163,896
------------
TOTAL FIXED INCOME REGISTERED
INVESTMENT COMPANY
(Cost $1,037,258) 1,163,896
------------
TOTAL INVESTMENTS - 100.1%
(Cost $40,530,587) 43,278,584
------------
OTHER ASSETS & LIABILITIES, NET - (0.1)% (30,768)
------------
NET ASSETS - 100.0% $ 43,247,816
============
- --------------------------------------------------------------------------------
* NON-INCOME PRODUCING SECURITY.
(A) THE RATE SHOWN REPRESENTS THE 7-DAY EFFECTIVE YIELD AS OF JULY 31, 2010.
A summary of the inputs used to value the Fund's net assets as of July 31, 2010
is as follows (see Note 2 - significant accounting policies in the notes to
financial statements):
LEVEL 2 LEVEL 3
TOTAL FAIR LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
07/31/10 PRICE INPUTS INPUTS
------------ ------------ ----------- ------------
Investments in Securities * $ 43,278,584 $ 43,278,584 $ -- $ --
============ ============ =========== ============
* See schedule of investments detail for security type breakout.
The accompanying notes are an integral part of the financial statements.
94 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
INCOME PLUS ALLOCATION FUND
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AFFILIATED FIXED INCOME REGISTERED INVESTMENT COMPANIES - 48.7%
- --------------------------------------------------------------------------------
HighMark Bond Fund,
Fiduciary Shares - 18.1% 249,291 $ 2,836,936
HighMark Short Term Bond Fund,
Fiduciary Shares - 30.6% 476,044 4,812,802
------------
TOTAL AFFILIATED FIXED INCOME REGISTERED
INVESTMENT COMPANIES
(Cost $7,395,059) 7,649,738
------------
- --------------------------------------------------------------------------------
AFFILIATED EQUITY REGISTERED INVESTMENT COMPANIES - 38.7%
- --------------------------------------------------------------------------------
HighMark Cognitive Value Fund,
Fiduciary Shares - 0.2% 4,260 39,920
HighMark Core Equity Fund,
Fiduciary Shares - 8.4% 182,812 1,323,555
HighMark Enhanced Growth Fund,
Fiduciary Shares - 0.6% 9,783 90,003
HighMark Fundamental Equity Fund,
Fiduciary Shares - 4.3% 37,177 672,537
HighMark Geneva Mid Cap Growth Fund,
Fiduciary Shares - 0.4% * 3,527 63,415
HighMark Geneva Small Cap Growth Fund,
Fiduciary Shares - 0.5% * 2,959 72,348
HighMark International Opportunities Fund,
Fiduciary Shares - 3.2% 80,185 507,573
HighMark Large Cap Growth Fund,
Fiduciary Shares - 4.8% 86,041 758,022
HighMark Large Cap Value Fund,
Fiduciary Shares - 7.3% 111,001 1,139,981
HighMark Small Cap Advantage Fund,
Fiduciary Shares - 4.9% 52,730 766,690
HighMark Small Cap Value Fund,
Fiduciary Shares - 1.5% 20,631 241,997
HighMark Value Momentum Fund,
Fiduciary Shares - 2.6% 29,634 404,212
------------
TOTAL AFFILIATED EQUITY REGISTERED
INVESTMENT COMPANIES
(Cost $5,312,142) 6,080,253
------------
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AFFILIATED MONEY MARKET REGISTERED INVESTMENT COMPANY - 4.0%
- --------------------------------------------------------------------------------
HighMark Diversified Money Market Fund,
Fiduciary Shares, 0.16% (A) 633,509 $ 633,509
------------
TOTAL AFFILIATED MONEY MARKET REGISTERED
INVESTMENT COMPANY
(Cost $633,509) 633,509
------------
- --------------------------------------------------------------------------------
FIXED INCOME REGISTERED INVESTMENT COMPANY - 4.8%
- --------------------------------------------------------------------------------
Eaton Vance Income Fund of Boston,
Institutional Class - 4.8% 131,777 748,496
------------
TOTAL FIXED INCOME REGISTERED
INVESTMENT COMPANY
(Cost $680,933) 748,496
------------
- --------------------------------------------------------------------------------
EQUITY REGISTERED INVESTMENT COMPANIES - 3.0%
- --------------------------------------------------------------------------------
Fidelity Advisor Industrials Fund,
Institutional Class - 0.4% 2,744 61,191
JPMorgan Small Cap Growth Fund,
Institutional Class - 0.7% * 12,568 116,125
Lazard Emerging Markets Equity Portfolio,
Institutional Class - 1.3% 10,495 202,963
Morgan Stanley Institutional Fund -
U.S. Real Estate Portfolio,
Institutional Class - 0.6% 7,682 99,102
------------
TOTAL EQUITY REGISTERED
INVESTMENT COMPANIES
(Cost $378,020) 479,381
------------
TOTAL INVESTMENTS - 99.2%
(Cost $14,399,663) 15,591,377
------------
OTHER ASSETS & LIABILITIES, NET - 0.8% 123,574
------------
NET ASSETS - 100.0% $ 15,714,951
============
- --------------------------------------------------------------------------------
* NON-INCOME PRODUCING SECURITY.
(A) THE RATE SHOWN REPRESENTS THE 7-DAY EFFECTIVE YIELD AS OF JULY 31, 2010.
A summary of the inputs used to value the Fund's net assets as of July 31, 2010
is as follows (see Note 2 - significant accounting policies in the notes to
financial statements):
LEVEL 2 LEVEL 3
TOTAL FAIR LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
07/31/10 PRICE INPUTS INPUTS
------------ ------------ ----------- ------------
Investments in Securities * $ 15,591,377 $ 15,591,377 $ -- $ --
============ ============ =========== ============
* See schedule of investments detail for security type breakout.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 95
SCHEDULE OF INVESTMENTS
JULY 31, 2010
BOND FUND
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - 51.9%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 6.1%
Comcast
5.700%, 07/01/19 $ 6,000,000 $ 6,706,824
JC Penney
5.750%, 02/15/18 2,000,000 2,025,000
Macy's Retail Holdings
5.875%, 01/15/13 1,950,000 2,028,000
News America Holdings
7.750%, 02/01/24 1,000,000 1,233,924
Staples
9.750%, 01/15/14 3,000,000 3,695,757
Time Warner Entertainment
8.375%, 03/15/23 5,000,000 6,472,655
------------
22,162,160
------------
CONSUMER STAPLES - 3.7%
Anheuser-Busch Inbev Worldwide
3.000%, 10/15/12 4,000,000 4,134,324
General Mills
5.700%, 02/15/17 3,475,000 4,065,788
Kroger
5.000%, 04/15/13 2,605,000 2,819,746
Safeway
6.250%, 03/15/14 2,000,000 2,294,124
------------
13,313,982
------------
ENERGY - 7.4%
BP Capital Markets
4.750%, 03/10/19 3,000,000 2,826,045
Colorado Interstate Gas
6.800%, 11/15/15 3,000,000 3,497,394
ConocoPhillips
5.750%, 02/01/19 4,000,000 4,653,016
Energy Transfer Partners
9.700%, 03/15/19 2,000,000 2,517,016
Enterprise Products Operating
5.200%, 09/01/20 5,000,000 5,356,370
Magellan Midstream Partners
6.550%, 07/15/19 3,000,000 3,494,442
Rockies Express Pipeline (A)
3.900%, 04/15/15 1,000,000 988,521
Transcontinental Gas Pipe Line
7.250%, 12/01/26 2,250,000 2,623,196
Williams Partners (A)
5.250%, 03/15/20 1,000,000 1,067,862
------------
27,023,862
------------
FINANCIALS - 10.3%
Bank of America, MTN
5.650%, 05/01/18 3,000,000 3,140,472
GE Global Insurance
7.750%, 06/15/30 5,000,000 5,620,985
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - (CONTINUED)
- --------------------------------------------------------------------------------
FINANCIALS - (CONTINUED)
JPMorgan Chase
3.125%, 12/01/11 $ 10,000,000 $ 10,344,370
JPMorgan Chase Bank
6.000%, 10/01/17 4,200,000 4,720,426
Lehman Brothers Holdings, MTN (B)
5.625%, 01/24/13 4,000,000 865,000
Morgan Stanley
6.750%, 04/15/11 5,500,000 5,719,054
NB Capital Trust IV
8.250%, 04/15/27 2,000,000 2,045,000
UNUM Group
7.625%, 03/01/11 227,000 234,935
Wachovia Capital Trust I (A)
7.640%, 01/15/27 2,680,000 2,631,473
Wells Fargo
3.000%, 12/09/11 2,000,000 2,068,770
------------
37,390,485
------------
FOREIGN GOVERNMENTS - 2.2%
Hydro Quebec, Ser IO
8.050%, 07/07/24 1,125,000 1,621,875
Pemex Project Funding Master Trust
9.125%, 10/13/10 5,000,000 5,000,000
Province of Saskatchewan
9.375%, 12/15/20 1,000,000 1,483,993
------------
8,105,868
------------
HEALTH CARE - 5.7%
Baxter International
4.500%, 08/15/19 1,850,000 1,998,115
Boston Scientific
6.000%, 01/15/20 3,000,000 3,107,028
Cigna
5.125%, 06/15/20 1,000,000 1,053,180
HCA
7.875%, 02/01/11 999,000 1,011,488
UnitedHealth Group
5.250%, 03/15/11 4,500,000 4,608,846
Wellpoint
7.000%, 02/15/19 2,000,000 2,388,490
6.000%, 02/15/14 1,000,000 1,132,842
Wyeth
5.500%, 02/01/14 5,000,000 5,657,465
------------
20,957,454
------------
INDUSTRIAL - 2.7%
Continental Airlines, Ser 98-1B (C)
6.748%, 03/15/17 862,983 811,204
General Electric
5.000%, 02/01/13 5,000,000 5,416,565
The accompanying notes are an integral part of the financial statements.
96 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
BOND FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - (CONTINUED)
- --------------------------------------------------------------------------------
INDUSTRIAL - (CONTINUED)
L-3 Communications
5.875%, 01/15/15 $ 2,450,000 $ 2,499,000
Ser B
6.375%, 10/15/15 1,000,000 1,025,000
------------
9,751,769
------------
INFORMATION TECHNOLOGY - 0.8%
International Business Machines
6.500%, 01/15/28 2,500,000 3,011,585
------------
MATERIALS - 2.8%
Dow Chemical
5.900%, 02/15/15 3,000,000 3,325,710
Rio Tinto Finance USA
6.500%, 07/15/18 4,000,000 4,663,992
Teck Resources
10.250%, 05/15/16 1,950,000 2,359,500
------------
10,349,202
------------
TELECOMMUNICATION SERVICES - 2.5%
Bell Atlantic Maryland
8.000%, 10/15/29 2,980,000 3,402,656
New England Telephone & Telegraph
7.875%, 11/15/29 4,925,000 5,736,290
------------
9,138,946
------------
UTILITIES - 7.7%
Duke Energy
6.300%, 02/01/14 4,000,000 4,548,716
Exelon Generation
6.200%, 10/01/17 4,000,000 4,581,124
MidAmerican Energy Holdings
5.750%, 04/01/18 5,000,000 5,693,240
MidAmerican Energy Holdings, Ser D
5.000%, 02/15/14 400,000 436,462
Oklahoma Gas & Electric
6.650%, 07/15/27 2,500,000 2,881,290
Sempra Energy
6.150%, 06/15/18 4,000,000 4,605,136
Virginia Electric & Power, Ser A
4.750%, 03/01/13 5,000,000 5,425,440
------------
28,171,408
------------
TOTAL CORPORATE OBLIGATIONS
(Cost $175,759,844) 189,376,721
------------
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS - 16.8%
- --------------------------------------------------------------------------------
FHLMC Gold
6.000%, 06/01/13 $ 352,933 $ 373,328
6.000%, 09/01/13 375,081 398,169
6.000%, 09/01/17 1,333,554 1,452,705
6.000%, 11/01/17 492,942 535,401
5.500%, 03/01/17 398,324 429,437
5.000%, 10/01/20 832,653 894,936
4.500%, 05/01/19 1,107,694 1,186,086
4.500%, 07/01/19 3,407,112 3,648,235
4.500%, 04/01/20 431,446 461,979
FHLMC, ARM (D)
5.176%, 06/01/39 2,507,501 2,672,586
2.689%, 12/01/34 2,500,689 2,601,203
FHLMC, CMO REMIC Ser 1666, Cl J
6.250%, 01/15/24 2,000,000 2,191,875
FNMA
8.500%, 05/01/25 19,883 23,119
8.000%, 08/01/24 1,986 2,298
8.000%, 09/01/24 445 515
8.000%, 06/01/30 13,328 15,479
7.500%, 12/01/26 150,169 171,169
7.000%, 12/01/10 3,240 3,251
7.000%, 05/01/30 39,258 44,606
6.500%, 04/01/14 238,334 259,025
6.500%, 05/01/26 63,393 70,159
6.500%, 03/01/28 23,671 26,449
6.500%, 04/01/28 104,846 117,150
6.500%, 01/01/29 484,991 541,907
6.500%, 06/01/29 208,953 233,474
6.500%, 06/01/29 337,250 376,828
6.500%, 07/01/29 266,857 298,173
6.500%, 08/01/29 108,723 121,482
6.500%, 05/01/30 366,674 409,705
6.000%, 09/01/10 412 415
6.000%, 05/01/11 3,237 3,300
6.000%, 01/01/12 7,414 7,995
6.000%, 01/01/12 3,802 4,100
6.000%, 03/01/13 27,484 29,673
6.000%, 05/01/16 354,864 386,016
6.000%, 10/01/16 502,247 546,338
6.000%, 11/01/17 1,064,551 1,158,004
6.000%, 12/01/27 2,028 2,221
6.000%, 12/01/27 1,102 1,207
6.000%, 12/01/27 31,789 34,815
6.000%, 12/01/27 14,970 16,395
6.000%, 07/01/28 348,835 386,884
6.000%, 08/01/28 92,230 102,290
6.000%, 10/01/28 197,360 218,887
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 97
SCHEDULE OF INVESTMENTS
JULY 31, 2010
BOND FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS - (CONTINUED)
- --------------------------------------------------------------------------------
FNMA (continued)
6.000%, 10/01/28 $ 65,229 $ 72,343
6.000%, 12/01/28 230,010 255,098
6.000%, 12/01/28 654,625 726,027
6.000%, 12/01/28 277,767 308,063
5.500%, 01/01/17 263,065 284,966
5.500%, 02/01/17 149,937 162,560
5.500%, 12/01/17 1,406,886 1,523,905
5.500%, 03/01/20 7,017,860 7,619,672
5.000%, 11/01/17 1,745,083 1,876,980
5.000%, 12/01/17 623,503 670,628
5.000%, 02/01/18 2,039,541 2,193,694
5.000%, 11/01/18 314,141 337,884
4.500%, 04/01/18 11,946,579 12,795,777
FNMA, ARM (D)
5.175%, 01/01/36 6,320,731 6,626,254
FNMA, CMO REMIC Ser 2003-25, Cl CD
3.500%, 03/25/17 1,307,959 1,328,473
GNMA
8.000%, 04/15/17 8,450 9,510
8.000%, 05/15/17 3,825 3,888
8.000%, 11/15/26 187,015 218,855
8.000%, 12/15/26 68,274 79,898
7.500%, 05/15/23 95,056 109,088
7.500%, 01/15/24 16,496 18,969
7.500%, 01/15/24 1,131 1,300
7.500%, 01/15/24 9,610 11,051
7.500%, 01/15/24 666 766
7.500%, 01/15/24 25,528 29,355
7.500%, 02/15/27 16,150 18,577
7.500%, 02/15/27 4,646 5,344
7.500%, 07/15/27 16,197 18,632
7.500%, 08/15/27 955 1,099
7.500%, 08/15/27 7,521 8,651
7.500%, 08/15/27 12,295 14,143
7.500%, 08/15/27 1,160 1,335
7.500%, 08/15/27 650 748
7.500%, 08/15/27 10,679 12,284
7.000%, 01/15/24 25,095 28,679
7.000%, 04/15/24 15,627 17,859
6.500%, 12/15/23 34,428 38,481
6.500%, 12/15/23 13,474 15,060
6.500%, 01/15/24 6,684 7,525
6.500%, 02/15/24 63,320 71,281
6.500%, 04/15/26 24,607 27,444
6.500%, 01/15/29 163,297 183,860
6.500%, 05/15/29 488,447 550,653
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS - (CONTINUED)
- --------------------------------------------------------------------------------
GNMA (continued)
6.500%, 06/15/29 $ 48,045 $ 54,095
6.000%, 08/15/28 84,337 93,699
6.000%, 09/15/28 86,402 95,993
6.000%, 09/15/28 141,200 156,874
------------
TOTAL U.S. GOVERNMENT AGENCY
MORTGAGE-BACKED OBLIGATIONS
(Cost $57,306,456) 61,146,589
------------
- --------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES - 17.2%
- --------------------------------------------------------------------------------
Banc of America Mortgage Securities,
Ser 2003-7, Cl A2
4.750%, 09/25/18 5,515,122 5,693,685
Chase Manhattan Bank-First
Union National Bank,
Ser 1999-1, Cl E (D)
7.568%, 08/15/31 5,000,000 5,035,075
Chase Mortgage Finance,
Ser 2004-S1, CI A3
5.500%, 02/25/19 2,936,422 3,042,051
Ser 2003-S10, Cl A1
4.750%, 11/25/18 795,789 829,689
Citicorp Mortgage Securities,
Ser 2003-10, Cl A1
4.500%, 11/25/18 7,905,118 8,157,829
CS First Boston Mortgage Securities,
Ser 2005-C1, Cl A4 (D)
5.014%, 02/15/38 5,000,000 5,282,138
GE Capital Commercial Mortgage,
Ser 2004-C3, Cl A3 (D)
4.865%, 07/10/39 2,575,000 2,646,219
JPMorgan Chase Commercial Mortgage
Securities, Ser 2004-PNC1, Cl A4 (D)
5.387%, 06/12/41 5,000,000 5,353,949
Lehman Mortgage Trust,
Ser 2007-8, Cl 1A1
6.000%, 09/25/37 7,349,256 6,022,972
Merrill Lynch Mortgage Trust,
Ser 2002-MW1, CI A3
5.403%, 07/12/34 1,548,381 1,578,192
Morgan Stanley Capital I,
Ser 2003-T11, Cl A4
5.150%, 06/13/41 5,000,000 5,364,424
Morgan Stanley Dean Witter Capital I,
Ser 2001-TOP3, Cl A4
6.390%, 07/15/33 895,240 924,020
Wachovia Bank Commercial
Mortgage Trust, Ser 2005-C17, Cl A2
4.782%, 03/15/42 487,990 488,840
The accompanying notes are an integral part of the financial statements.
98 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
BOND FUND (CONCLUDED)
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES - (CONTINUED)
- --------------------------------------------------------------------------------
Wells Fargo Mortgage Backed Securities Trust,
Ser 2007-7, Cl A1
6.000%, 06/25/37 $6,530,703 $ 5,764,201
Ser 2004-2, Cl A1
5.000%, 01/25/19 4,383,777 4,516,548
Ser 2003-M, Cl A1(D)
4.675%, 12/25/33 2,095,059 2,117,292
------------
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $61,706,318) 62,817,124
------------
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES - 5.2%
- --------------------------------------------------------------------------------
BMW Vehicle Owner Trust,
Ser 2010-A, Cl A3
1.390%, 04/25/13 2,500,000 2,526,802
CenterPoint Energy Transition
Bond Co. II, Ser 2005-A, Cl A3
5.090%, 08/01/15 5,825,000 6,492,545
Chase Issuance Trust,
Ser 2005-A2, Cl A2 (D)
0.411%, 12/15/14 5,500,000 5,486,318
TXU Electric Delivery Transition Bond,
Ser 2004-1, Cl A3
5.290%, 05/15/18 4,000,000 4,582,002
------------
TOTAL ASSET-BACKED SECURITIES
(Cost $17,679,877) 19,087,667
------------
- --------------------------------------------------------------------------------
U.S. TREASURY OBLIGATION - 6.3%
- --------------------------------------------------------------------------------
U.S. Treasury Note
3.000%, 09/30/16 15,000,000 15,801,570
1.875%, 06/30/15 7,000,000 7,103,362
------------
TOTAL U.S. TREASURY OBLIGATION
(Cost $21,932,342) 22,904,932
------------
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 1.5%
- --------------------------------------------------------------------------------
Dreyfus Cash Management 5,339,279 $ 5,339,279
------------
TOTAL REGISTERED INVESTMENT COMPANY
(Cost $5,339,279) 5,339,279
------------
TOTAL INVESTMENTS - 98.9%
(Cost $339,724,116) 360,672,312
------------
OTHER ASSETS & LIABILITIES, NET - 1.1% 4,106,153
------------
NET ASSETS - 100.0% $364,778,465
============
- --------------------------------------------------------------------------------
(A) SECURITIES SOLD WITHIN THE TERMS OF A PRIVATE PLACEMENT MEMORANDUM, EXEMPT
FROM REGISTRATION UNDER SECTION 3(A), 4(2) OR RULE 144A OF THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY BE SOLD ONLY TO THE DEALERS IN THAT
PROGRAM OR OTHER "ACCREDITED INVESTORS". THE VALUE OF THESE SECURITIES AS
OF JULY 31, 2010 WAS $4,687,856 AND REPRESENTED 1.3% OF NET ASSETS.
(B) THE ISSUER IS IN DEFAULT OF CERTAIN DEBT COVENANTS. INCOME IS NOT BEING
ACCRUED. AS OF JULY 31, 2010, THE VALUE OF THIS SECURITY AMOUNTED TO
$865,000, WHICH REPRESENTS 0.2% OF NET ASSETS.
(C) SECURITY CONSIDERED ILLIQUID. THE TOTAL VALUE OF SUCH SECURITY AS OF JULY
31, 2010 WAS $811,204 AND REPRESENTED 0.2% OF NET ASSETS.
(D) FLOATING RATE SECURITY. RATE DISCLOSED IS AS OF JULY 31, 2010.
ARM - ADJUSTABLE RATE MORTGAGE
CL - CLASS
CMO - COLLATERALIZED MORTGAGE OBLIGATION
FHLMC - FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA - FEDERAL NATIONAL MORTGAGE ASSOCIATION
GNMA - GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
MTN - MEDIUM TERM NOTE
REMIC - REAL ESTATE MORTGAGE INVESTMENT CONDUIT
SER - SERIES
A summary of the inputs used to value the Fund's net assets as of July 31, 2010
is as follows (see Note 2 - significant accounting policies in the notes to
financial statements):
LEVEL 2 LEVEL 3
TOTAL FAIR LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
07/31/10 PRICE INPUTS INPUTS
------------- -------------- ------------- ------------
Corporate Obligations $ 189,376,721 $ -- $ 189,376,721 $ --
U.S. Government Agency Mortgage-Backed Obligations 61,146,589 -- 61,146,589 --
Mortgage-Backed Securities 62,817,124 -- 62,817,124 --
Asset-Backed Securities 19,087,667 -- 19,087,667 --
U.S. Treasury Obligations 22,904,932 -- 22,904,932 --
Registered Investment Company 5,339,279 5,339,279 -- --
------------- -------------- ------------- ------------
Total: $ 360,672,312 $ 5,339,279 $ 355,333,033 $ --
============= ============== ============= ============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 99
SCHEDULE OF INVESTMENTS
JULY 31, 2010
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - 97.8%
- --------------------------------------------------------------------------------
CALIFORNIA - 97.8%
Alhambra, Unified School District,
Election 2004, Ser B, GO
5.250%, 08/01/23 (A) $ 1,150,000 $ 1,272,303
Anaheim Public Financing Authority,
Electric System Distribution, RB,
3.000%, 10/01/10 100,000 100,425
Berryessa, Unified School District,
GO, National-RE Insured
5.375%, 03/01/12 460,000 491,666
Brentwood, Unified School District,
Election 1997, Ser B,
GO, National-RE FGIC Insured
4.850%, 08/01/14 (A) 410,000 414,895
Burlingame, Elementary School District,
GO, AGM Insured
5.250%, 07/15/16 795,000 944,579
California State, Department of
Transportation, Federal Highway Grant
Anticipation Bonds, Ser A, RB,
National-RE FGIC Insured
5.000%, 02/01/14 2,215,000 2,506,029
Ser A, RB,
4.000%, 02/01/11 500,000 509,105
California State, Department of
Water Resources,
Central Valley Project, Ser Z,
ETM, RB, FGIC Insured
5.000%, 12/01/12 10,000 11,081
RB, National-RE FGIC Insured
5.000%, 12/01/12 990,000 1,095,772
Power Supply Revenue, RB,
Ser A, AGM Insured
5.250%, 05/01/11 485,000 502,436
Ser A, AMBAC Insured
5.500%, 05/01/15 (A) 1,225,000 1,348,884
Ser H, AGM Insured
5.000%, 05/01/21 (A) 1,000,000 1,126,900
5.000%, 05/01/22 (A) 1,270,000 1,419,136
Subuser F5
5.000%, 05/01/22 (A) 730,000 813,081
RB, AGM Insured
5.500%, 12/01/14 10,000 12,018
RB. ETM, AGM Insured
5.500%, 12/01/14 1,340,000 1,607,183
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
California State, Economic Recovery,
Ser A, GO
5.250%, 07/01/14 $ 600,000 $ 688,782
Ser A, GO, ETM
5.250%, 07/01/14 170,000 199,697
Ser B, GO, Prerefunded @ 100
5.000%, 03/01/11 (A) (B) (C) 100,000 102,739
Ser C-15, GO, AGM Insured
0.390%, 07/01/23 (A) (B) 4,715,000 4,715,000
California State, Educational
Facilities Authority,
Loyola-Marymount University,
Ser A, RB, National-RE Insured
4.500%, 10/01/12 (A) 1,760,000 1,845,413
Santa Clara University, RB
5.250%, 04/01/23 (A) 250,000 277,560
5.250%, 04/01/24 (A) 670,000 738,206
Stanford University,
Ser P, RB
5.250%, 12/01/13 825,000 947,265
Ser R, RB
5.000%, 11/01/11 635,000 672,040
California State, GO,
5.000%, 12/01/17 (A) 1,545,000 1,747,410
AMBAC Insured
5.000%, 11/01/17 1,000,000 1,134,840
National-RE FGIC Insured
4.500%, 09/01/10 1,000,000 1,002,960
Various Purposes,
5.250%, 10/01/21 (A) 1,000,000 1,109,580
5.625%, 04/01/25 (A) 1,975,000 2,159,406
California State,
Public Works Board Lease,
Various University of California Projects,
Ser A, RB, AMBAC Insured
5.100%, 12/01/10 (A) 1,000,000 1,003,060
California State, University,
Systemwide Ser A, RB
5.000%, 11/01/25 (A) 555,000 607,825
5.000%, 11/01/26 (A) 1,500,000 1,636,395
Cerritos Community College District,
Election 2004, Ser C, GO
5.250%, 08/01/24 (A) 450,000 504,401
5.250%, 08/01/25 (A) 500,000 553,980
Chaffey, Unified High School District,
GO, National-RE FGIC Insured
5.000%, 08/01/15 1,000,000 1,146,960
The accompanying notes are an integral part of the financial statements.
100 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
Citrus Community College District,
Election 2004,
Ser C, GO
5.250%, 06/01/25 (A) $ 485,000 $ 534,606
Coast Community College,
GO, National-RE Insured
5.250%, 08/01/15 1,000,000 1,177,070
Corona-Norca Unified School District,
Election 2006, Ser A, GO,
AGM Insured
5.000%, 08/01/17 500,000 568,390
Cupertino, Unified School District,
GO, AGM Insured
5.250%, 08/01/13 (A) 595,000 621,525
Desert Sands Unified School District,
Election 2001, GO
5.750%, 08/01/19 (A) 650,000 774,144
5.250%, 08/01/20 (A) 610,000 693,881
5.250%, 08/01/22 (A) 550,000 611,732
Dublin, Unified School District,
Election 2004, Ser A, GO,
AGM Insured
5.000%, 08/01/26 (A) 1,580,000 1,650,421
East Bay, Municipal Utility District,
Water System Project, RB,
National-RE Insured,
Prerefunded @ 100
5.250%, 06/01/11 (C) 1,250,000 1,301,687
East Bay, Regional Park District, GO
4.500%, 09/01/10 150,000 150,478
Eastern Municipal Water District,
Ser A, COP,
National-RE FGIC Insured
5.250%, 07/01/12 (A) 300,000 312,672
5.250%, 07/01/13 (A) 1,000,000 1,040,840
5.375%, 07/01/16 (A) 2,120,000 2,194,009
5.375%, 07/01/17 (A) 2,410,000 2,495,459
El Camino, Community College,
GO, AGM Insured
5.000%, 08/01/16 (A) 1,000,000 1,150,050
Fallbrook, Unified High School District,
GO, National-RE FGIC Insured
5.375%, 09/01/12 250,000 274,580
Fremont, Unified High School District,
Ser B, ETM, GO
5.000%, 09/01/10 600,000 602,142
Fresno, Joint Powers Financing Authority,
Fresno City Hall, RB, AMBAC Insured
4.600%, 08/01/11 (A) 500,000 500,000
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
Gilroy, Unified School District,
Election 2008, Ser A, GO
5.250%, 08/01/22 (A) $ 1,800,000 $ 2,023,470
Grant, Joint Union High School District,
Election 2006, GO, AGM Insured
5.000%, 08/01/21 (A) 975,000 1,069,770
Hayward, Unified School District, GO
5.000%, 08/01/25 (A) 1,000,000 1,035,560
Irvine, Improvement Bond Act of 1915,
Limited Obligation Reassesment,
Ser 85-7-A, Special Assessment,
AGM Insured, SPA Dexia Credit
0.320%, 09/02/32 (A) (B) 4,800,000 4,800,000
Kings River, Conservation District,
Pine Flat Power,
Ser F, RB
4.625%, 01/01/11 500,000 509,065
Livermore-Amador Valley,
Water Management Authority,
Ser A, RB, AMBAC Insured
5.000%, 08/01/13 (A) 410,000 427,683
5.250%, 08/01/14 (A) 750,000 782,520
Lodi, Unified School District,
Election 2002, GO, AGM Insured
5.250%, 08/01/22 (A) 1,000,000 1,057,450
Long Beach, Unified School District,
Election of 2008, Ser A, GO
5.250%, 08/01/25 (A) 1,515,000 1,678,559
Ser B, GO,
5.250%, 08/01/24 (A) 1,000,000 1,116,830
Los Angeles County, Metropolitan
Transportation Authority, Sales Tax Project,
Proposition A, 1st Tier Senior, RB
5.000%, 07/01/11 155,000 161,560
Los Angeles County, Public Works
Financing Authority,
Flood Control District, Ser A,
RB, National-RE Insured
5.000%, 03/01/11 200,000 205,042
Regional Park & Open Space,
Special Assessment,
AGM Insured
5.000%, 10/01/12 715,000 781,874
Los Angeles Harbor Department,
Ser A, RB
5.000%, 08/01/20 (A) 2,000,000 2,316,600
5.250%, 08/01/21 (A) 350,000 407,463
Los Angeles,
Ser A, GO,
FGIC Insured, Prerefunded @100
5.000%, 09/01/10 (C) 205,000 205,732
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 101
SCHEDULE OF INVESTMENTS
JULY 31, 2010
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
National-RE Insured
5.250%, 09/01/11 $ 275,000 $ 289,536
5.000%, 09/01/21 (A) 1,900,000 2,035,736
National-RE, FGIC Insured
5.250%, 09/01/10 100,000 100,374
Ser B, GO,
AGM Insured
5.000%, 09/01/16 (A) 1,000,000 1,142,000
Los Angeles, Community College District,
Election 2001, Ser A, GO,
National-RE, FGIC Insured
5.000%, 08/01/23 (A) 500,000 544,215
Election 2003, Ser E, GO,
AGM Insured
5.000%, 08/01/17 (A) 1,000,000 1,148,510
Election 2008, Ser A, GO
5.500%, 08/01/22 (A) 1,500,000 1,733,475
5.500%, 08/01/24 (A) 800,000 908,632
Los Angeles, Department of Airports,
Airport Revenue, Los Angeles
International Airport, Ser C, RB
5.250%, 05/15/21 (A) 1,000,000 1,104,620
Los Angeles, Department of Water & Power,
Ser A-A-1, RB,
National-RE Insured
5.250%, 07/01/11 1,045,000 1,090,708
5.250%, 07/01/13 (A) 2,075,000 2,161,673
Ser B, RB,
National-RE Insured
5.000%, 07/01/13 430,000 481,682
Los Angeles, Unified School District, GO,
Election 1997, Ser E,
National-RE Insured,
Prerefunded @ 100
5.500%, 07/01/12 (C) 1,390,000 1,527,151
National-RE Insured,
5.500%, 07/01/12 1,380,000 1,504,517
Ser D
5.250%, 07/01/24 (A) 1,000,000 1,096,010
Ser I
5.000%, 07/01/25 (A) 1,750,000 1,870,523
Ser KRY,
5.000%, 07/01/11 485,000 505,069
Los Angeles, Waste Water System,
Ser C, RB, National-RE Insured
5.375%, 06/01/12 1,180,000 1,280,748
Los Gatos-Saratoga, Joint Unified
High School, Election 1998,
Ser B, GO, Prerefunded @ 101
4.600%, 12/01/10 (C) 875,000 896,306
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
M-S-R Public Power Authority,
San Juan Project, Ser I, RB,
National-RE Insured
5.000%, 07/01/14 (A) $ 2,630,000 $ 2,707,848
Metropolitan, Water District of
Southern California,
Ser A, RB
5.375%, 07/01/12 (A) 2,185,000 2,307,710
Ser A-1, RB, SPA JPMorgan Chase
0.210%, 07/01/23 (A) (B) 1,700,000 1,700,000
Modesto Irrigation District, COP,
Capital Improvements, Ser A
5.500%, 10/01/25 (A) 1,500,000 1,632,285
Mountain View, Shoreline Regional
Park Community, Ser A, TA,
National-RE Insured
5.600%, 08/01/10 (A) 500,000 500,000
North Orange County, Community
College District, GO, National-RE Insured
5.000%, 08/01/15 1,000,000 1,170,350
Northern California Transmission Agency,
California-Oregon Transmission Project,
Ser A, RB
5.000%, 05/01/22 (A) 1,035,000 1,124,983
Ser A,RB, AGM Insured,
SPA Dexia Credit
0.330%, 05/01/24 (A) (B) 5,500,000 5,500,000
Norwalk, La Mirada Unified School
District, Election 2002, Ser A, GO,
FGIC Insured, Prerefunded @ 100
5.000%, 08/01/13 (C) 1,800,000 2,040,804
Orange County, Sanitation District,
Ser B, COP, AGM Insured
5.000%, 02/01/17 450,000 523,467
5.000%, 02/01/23 (A) 2,615,000 2,866,458
5.000%, 02/01/25 (A) 1,200,000 1,298,652
Orange County, Water District,
Ser B, COP, National-RE Insured
5.000%, 08/15/24 (A) 700,000 744,835
Pajaro Valley Unified School District,
GO, AGM Insured
5.000%, 08/01/10 300,000 300,000
Paramount, Unified School District,
GO, AGM Insured
5.000%, 09/01/15 1,000,000 1,151,900
Pasadena Unified School District, GO,
National-RE FGIC Insured
5.000%, 11/01/10 400,000 404,576
The accompanying notes are an integral part of the financial statements.
102 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
Port of Oakland, RB,
Ser B, National-RE Insured
5.000%, 11/01/18 (A) $ 1,175,000 $ 1,286,825
Ser M, FGIC Insured,
Prerefunded @ 100
5.250%, 11/01/12 (C) 1,000,000 1,108,600
Redding, Electric System Revenue,
Ser A, COP, AGM Insured
5.000%, 06/01/22 (A) 1,500,000 1,623,945
5.000%, 06/01/24 (A) 1,010,000 1,080,033
Redwood City, Elementary School District,
GO, National-RE FGIC Insured
5.500%, 08/01/10 1,140,000 1,140,000
5.500%, 08/01/14 900,000 1,012,905
Riverside, Community College,
GO, AGM Insured
5.000%, 08/01/19 (A) 1,700,000 1,878,109
Sacramento County, Sanitation District,
RB, Financing Authority, Sub Lien,
Sacramento Regional,
Ser C, Bank of America Insured
0.270%, 12/01/30 (A) (B) 5,000,000 5,000,000
Sacramento, Municipal Utility District, RB,
Electric Power & Light Revenues,
Ser O, National-RE Insured
5.250%, 08/15/10 500,000 500,730
Ser P, AGM Insured
5.250%, 08/15/13 (A) 1,635,000 1,716,815
Ser R, National-RE Insured
5.000%, 08/15/16 (A) 1,000,000 1,095,820
Ser R, National-RE Insured,
5.000%, 08/15/15 1,480,000 1,689,183
Ser U, AGM Insured
5.000%, 08/15/23 (A) 1,535,000 1,696,098
San Bernardino County, Community
College District, GO,
AGM Insured
5.000%, 08/01/15 1,000,000 1,172,980
Election 2002, Ser A
6.250%, 08/01/24 (A) 1,000,000 1,178,060
San Bernardino, Municipal Water
Department, Sewer Authority, COP,
National-RE FGIC Insured
5.000%, 02/01/11 (A) 1,130,000 1,138,769
San Diego County, Water Authority, COP,
Ser A, AGM Insured
5.000%, 05/01/20 (A) 1,000,000 1,120,330
Water Revenues, Ser 2008A,
National-RE FGIC Insured
5.250%, 05/01/16 1,310,000 1,524,355
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
San Diego, Public Facilities Financing
Authority,
RB, National-RE Insured
5.000%, 08/01/14 (A) $ 1,050,000 $ 1,135,879
Sewer Authority, Ser B, RB
5.500%, 05/15/23 (A) 3,100,000 3,529,846
Water Authority, Ser B, RB
5.000%, 08/01/21 (A) 1,000,000 1,132,170
San Francisco City & County,
Academy Sciences Improvement,
Ser E, GO
National-RE Insured
5.000%, 06/15/24 (A) 2,025,000 2,158,711
Airport Commission, International
Airport, Second Series, Issue 32F,
RB, National-RE FGIC Insured
5.000%, 05/01/22 (A) 2,000,000 2,147,180
Issue 32F, Ser D, RB, AGM Insured,
SPA Dexia Credit
0.350%, 05/01/26 (A) (B) 1,400,000 1,400,000
RB, National-RE FGIC Insured
5.250%, 05/01/19 2,000,000 2,320,319
Public Utilities Commission, Clean Water,
Ser A, RB, National-RE Insured
3.250%, 10/01/10 650,000 652,262
Public Utilities Commission, Water Revenue,
Ser A, RB, AGM Insured,
5.000%, 11/01/10 1,000,000 1,011,270
5.000%, 11/01/11 1,000,000 1,056,650
5.000%, 11/01/23 (A) 1,000,000 1,096,980
Ser B, RB, National-RE Insured
5.000%, 11/01/15 (A) 1,250,000 1,357,638
Unified School District, Prop A,
Ser B, GO, Election 2003, AGM Insured
5.000%, 06/15/20 (A) 1,815,000 1,969,075
Ser B, GO, Election 2006
5.250%, 06/15/23 (A) 620,000 705,083
San Francisco, Bay Area Rapid Transit,
RB, AMBAC Insured
5.250%, 07/01/14 (A) 300,000 313,179
San Joaquin County, Delta Community
College District, Election 2004,
Ser A, GO, AGM Insured
4.500%, 08/01/15 1,000,000 1,143,760
San Jose, Financing Authority,
Convention Center Project, Ser F, RB,
National-RE Insured
4.250%, 09/01/11 2,015,000 2,099,912
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 103
SCHEDULE OF INVESTMENTS
JULY 31, 2010
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
San Jose, Redevelopment Agency,
Merged Area TA, National-RE Insured
6.000%, 08/01/10 $ 745,000 $ 745,000
Prerefunded @ 101
5.000%, 08/01/10 (C) 100,000 101,000
San Juan, Unified School District,
GO, AGM Insured
5.250%, 08/01/10 1,150,000 1,150,000
GO, Election 2002, AGM Insured
5.000%, 08/01/26 (A) 1,560,000 1,671,509
San Lorenzo, Unified School District,
Election 2008, Ser A, GO,
Assured Guaranty Insured
5.000%, 08/01/22 (A) 325,000 351,384
San Mateo, County, Transit District,
Ser A, RB, National-RE Insured
5.250%, 06/01/16 2,000,000 2,332,920
San Mateo, Joint Powers Financing
Authority, Lease Revenue,
Capital Projects, Ser A, RB
5.250%, 07/15/24 (A) 1,000,000 1,104,970
San Mateo, Unified High School District,
Election 2000, Ser A, GO, FGIC Insured,
Prerefunded @ 100
5.375%, 09/01/11 (C) 2,195,000 2,317,415
San Ramon Valley, Unified School District,
Election 2002, GO, AGM Insured
5.250%, 08/01/18 (A) 1,250,000 1,412,813
Santa Ana, Community Redevelopment
Agency, Mainplace Project,
Ser E, ETM, RB, USGOV Insured
6.400%, 12/15/10 85,000 86,292
Santa Clara, Valley Transportation
Authority, Measure A,
Ser A, RB, AMBAC Insured
5.000%, 04/01/25 (A) 400,000 432,384
Santa Maria, Joint Unified High School
District, Ser A, ETM, GO, AGM Insured
5.500%, 08/01/15 510,000 608,297
Solano County, Community College,
Election 2002, Ser A, GO,
National-RE Insured,
Prerefunded @ 100
5.000%, 08/01/13 (C) 1,865,000 2,108,532
Southern California, Public Power Authority,
Power Project Revenue,
Canyon Power, Ser A, RB,
5.000%, 07/01/25 (A) 2,950,000 3,198,567
- --------------------------------------------------------------------------------
Description Par/Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
Palo Verde Sub, Ser A, RB,
JPMorgan Chase Insured,
0.240%, 07/01/17 (A)(B) $ 3,500,000 $ 3,500,000
Transmission Project Revenue,
Sub Southern Transmission, Ser A, RB
5.000%, 07/01/23 (A) 1,100,000 1,215,885
Stockton, Unified School District,
Election 2005, GO, AGM Insured
5.000%, 08/01/16 645,000 726,941
Torrance, Unified School District,
Election 2008, Measure Y, GO
2.500%, 08/01/10 250,000 250,000
Election 2008, Measure Z, GO
5.500%, 08/01/25 (A) 1,000,000 1,126,830
Turlock, Irrigation District, Ser A, RB,
National-RE Insured
6.000%, 01/01/11 550,000 559,339
University of California,
Ser A, RB, National-RE Insured
5.000%, 05/15/20 (A) 430,000 463,858
Ser O, RB
5.500%, 05/15/22 (A) 2,000,000 2,337,920
------------
TOTAL MUNICIPAL BONDS
(Cost $190,931,746) 199,592,556
------------
- --------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 2.9%
- --------------------------------------------------------------------------------
BlackRock Liquidity Funds,
California Money Fund 5,892,504 5,892,504
------------
TOTAL REGISTERED INVESTMENT COMPANY
(Cost $5,892,504) 5,892,504
------------
TOTAL INVESTMENTS - 100.7%
(Cost $196,824,250) 205,485,060
------------
OTHER ASSETS & LIABILITIES, NET - (0.7)% (1,471,745)
------------
NET ASSETS - 100.0% $204,013,315
============
- --------------------------------------------------------------------------------
(A) THESE SECURITIES ARE SUBJECT TO A DEMAND FEATURE WHICH REDUCES THE
EFFECTIVE MATURITY.
(B) FLOATING RATE SECURITY. RATE DISCLOSED IS AS OF JULY 31, 2010.
(C) PREREFUNDED SECURITY - THE MATURITY DATE SHOWN IS THE PREREFUNDED DATE.
The accompanying notes are an integral part of the financial statements.
104 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND (CONCLUDED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AGM - ASSURED GUARANTY MUNICIPAL CORPORATION (FORMERLY KNOWN AS FINANCIAL
SECURITY ASSURANCE)
AMBAC - AMERICAN MUNICIPAL BOND ASSURANCE CORPORATION
COP - CERTIFICATES OF PARTICIPATION
ETM - ESCROWED TO MATURITY
FGIC - FINANCIAL GUARANTY INSURANCE CORPORATION
GO - GENERAL OBLIGATION
RB - REVENUE BOND
SER - SERIES
SPA - STANDBY PURCHASE AGREEMENT
TA - TAX ALLOCATION
A summary of the inputs used to value the Fund's net assets as of July 31, 2010
is as follows (see Note 2- significant accounting policies in the notes to
financial statements):
LEVEL 2 LEVEL 3
TOTAL FAIR LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
07/31/10 PRICE INPUTS INPUTS
------------- ----------- ------------- ------------
Municipal Bonds $ 199,592,556 $ -- $ 199,592,556 $ --
Registered Investment Company 5,892,504 5,892,504 -- --
------------- ----------- ------------- ------------
Total: $ 205,485,060 $ 5,892,504 $ 199,592,556 $ --
============= =========== ============= ============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 105
SCHEDULE OF INVESTMENTS
JULY 31, 2010
NATIONAL INTERMEDIATE TAX-FREE BOND FUND
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - 95.6%
- --------------------------------------------------------------------------------
ALASKA - 3.6%
Alaska State, International Airports System,
Ser D, RB, National-RE Insured
5.000%, 10/01/22 (A) $ 2,000,000 $ 2,129,440
Anchorage, City of Anchorage Schools,
Ser B, GO,
5.000%, 08/01/24 (A) 1,000,000 1,095,750
National-RE FGIC Insured
5.000%, 09/01/17 500,000 588,745
------------
3,813,935
------------
ARIZONA - 2.9%
Arizona State, Transportation Board
& Highway Revenue, Ser A, RB
5.250%, 07/01/17 (A) 1,000,000 1,095,320
Phoenix, GO, Ser A
6.250%, 07/01/17 1,000,000 1,264,080
Tucson, Water Revenue, RB
5.000%, 07/01/21 (A) 640,000 727,066
------------
3,086,466
------------
CALIFORNIA - 20.0%
California State, Department of
Transportation, Federal Highway Grant
Anticipation Bonds,
Ser A, RB, National-RE FGIC Insured
5.000%, 02/01/14 1,000,000 1,131,390
California State, Department of
Water Resources,
Central Valley Project, Ser X, RB,
National-RE FGIC Insured
5.500%, 12/01/15 625,000 759,619
Central Valley Project, Ser Z, RB,
National-RE FGIC Insured
5.000%, 12/01/12 500,000 553,420
Power Supply Revenue,
RB, Ser H, AGM Insured
5.000%, 05/01/22 (A) 1,000,000 1,117,430
California State, Educational Facilities
Authority, Loyola-Marymount University,
Ser A, RB, National-RE Insured
4.500%, 10/01/12 1,000,000 1,048,530
California State, GO,
Various Purposes,
5.625%, 04/01/25 (A) 1,000,000 1,093,370
5.250%, 10/01/21 (A) 1,000,000 1,109,580
Chico, Unified School District,
Ser B, GO, AGM Insured
5.000%, 08/01/25 (A) 1,625,000 1,727,212
Contra Costa, Water District,
Ser E, RB, AMBAC Insured
6.250%, 10/01/12 545,000 578,076
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
Elsinore Valley, Municipal Water District,
COP, National-RE FGIC Insured
5.375%, 07/01/18 $ 750,000 $ 846,390
Long Beach, Unified School District,
Election of 2008, Ser A, GO
5.250%, 08/01/24 (A) 525,000 586,336
5.250%, 08/01/25 (A) 1,000,000 1,107,960
Los Angeles, Ser A, GO,
National-RE Insured
5.250%, 09/01/12 625,000 681,031
Los Angeles, Unified School District,
GO, Ser I
5.000%, 07/01/25 (A) 1,000,000 1,068,870
Redding, Electric System Revenue,
Ser A, COP, AGM Insured
5.000%, 06/01/22 (A) 1,000,000 1,082,630
Sacramento Municipal Utility District,
Ser R, RB, National-RE Insured
5.000%, 08/15/23 (A) 500,000 528,165
San Bernardino County, Community
College District, GO,
Election 2002, Ser A
6.250%, 08/01/24 (A) 850,000 1,001,351
San Francisco City & County, Airport
Commission, International Airport,
Second Series,
RB, National-RE FGIC Insured
5.250%, 05/01/19 1,000,000 1,160,160
San Jose, Redevelopment Agency, TA,
ETM, National-RE Insured,
Prerefunded @ 100 (B)
6.000%, 08/01/15 330,000 406,342
National-RE Insured
6.000%, 08/01/15 775,000 864,567
San Ramon Valley, Unified School District,
Election 2002, GO, AGM Insured
5.250%, 08/01/18 (A) 1,670,000 1,887,517
Torrance, Unified School District,
Election of 2008, Measure Y, GO
5.500%, 08/01/25 (A) 750,000 845,123
------------
21,185,069
------------
COLORADO - 2.9%
Denver, City & County Airport Revenue,
Ser C, RB, LOC JPMorgan Chase (C)
0.260%, 11/15/22 (A) 2,000,000 2,000,000
Fort Collins, Water Utility Enterprise
Water Revenue, RB
4.000%, 12/01/10 500,000 505,605
The accompanying notes are an integral part of the financial statements.
106 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
NATIONAL INTERMEDIATE TAX-FREE BOND FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
COLORADO - (CONTINUED)
Regional Transportation District, Sales Tax,
Ser B, RB, AMBAC Insured
5.250%, 11/01/12 $ 500,000 $ 553,345
------------
3,058,950
------------
FLORIDA - 2.4%
Florida State Municipal Power Agency
Revenue, All Requirements Supply,
Ser C, RB, LOC Bank of America (C)
0.270%, 10/01/35 (A) 1,340,000 1,340,000
Jacksonville, Local Government,
Sales Tax Revenue,
RB, National-RE FGIC Insured
5.500%, 10/01/13 770,000 874,096
Orlando, Utilities Commission,
Water & Electric Revenue, RB
6.000%, 10/01/10 280,000 282,542
------------
2,496,638
------------
GEORGIA - 1.2%
Atlanta, Water & Wastewater Revenue,
Ser A, RB, National-RE FGIC Insured
5.500%, 11/01/13 1,000,000 1,118,990
Georgia State, Road & Tollway Authority,
Federal Highway Grant Anticipation
Bonds, Ser A, RB
4.000%, 06/01/11 120,000 123,655
------------
1,242,645
------------
HAWAII - 5.5%
Hawaii County, Ser A, GO,
FGIC Insured,
Prerefunded @ 100 (B)
5.500%, 07/15/11 635,000 665,899
Hawaii State, Highway Revenue,
Ser B, RB, AGM Insured
5.000%, 07/01/15 1,000,000 1,162,950
Honolulu City and County,
Ser A, GO
5.000%, 04/01/25 (A) 1,000,000 1,111,160
Ser A, GO, AGM Insured,
Prerefunded @ 100 (B)
5.375%, 09/01/11 1,150,000 1,211,950
Kauai County, Ser A, GO,
National-RE Insured
5.625%, 08/01/13 (A) 440,000 460,165
Kauai County, Ser A, GO,
National-RE Insured,
Prerefunded @ 100 (B)
5.625%, 08/01/11 60,000 63,192
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
HAWAII - (CONTINUED)
University of Hawaii Revenue,
Ser A, RB,
5.500%, 10/01/22 (A) $ 500,000 $ 571,015
5.500%, 10/01/23 (A) 500,000 570,180
------------
5,816,511
------------
IDAHO - 4.2%
Idaho State, Housing & Finance
Association, Grant & Revenue
Anticipation, Federal Highway
Trust, RB, National-RE Insured
5.000%, 07/15/15 1,000,000 1,153,880
Ser A
5.000%, 07/15/22 (A) 400,000 447,044
5.250%, 07/15/24 (A) 1,525,000 1,703,623
Twin Falls County, School
District No. 411,
GO, National-RE Insured
5.000%, 09/15/16 1,000,000 1,133,020
------------
4,437,567
------------
ILLINOIS - 10.1%
Chicago,
Ser A, GO, AGM Insured
5.000%, 01/01/23 (A) 1,075,000 1,145,606
Ser C, GO
5.000%, 01/01/23 (A) 1,285,000 1,388,327
Chicago, Board of Education,
Dedicated Revenues,
Ser B, GO, AMBAC Insured
5.000%, 12/01/23 (A) 1,125,000 1,200,172
Chicago, O'Hare International Airport,
3rd Lien, Ser D, RB,
LOC Dexia Credit Local (C)
0.280%, 01/01/35 1,450,000 1,450,000
Ser B, RB, AGM Insured
5.000%, 01/01/19 (A) 1,655,000 1,816,263
Chicago, Project & Refunding,
Ser A, GO
5.250%, 01/01/21 (A) 895,000 1,006,964
Illinois State Toll Highway Authority,
Toll Highway Revenue,
Ser A-1, RB, AGM Insured (C)
0.320%, 01/01/31 2,000,000 2,000,000
Illinois State, GO, National-RE
Insured (A)
5.000%, 08/01/26 700,000 710,759
------------
10,718,091
------------
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 107
SCHEDULE OF INVESTMENTS
JULY 31, 2010
NATIONAL INTERMEDIATE TAX-FREE BOND FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
MARYLAND - 0.2%
Maryland Water Quality Financing
Administration Revolving
Loan Fund, Ser A, RB
3.250%, 03/01/11 $ 250,000 $ 254,293
------------
MASSACHUSETTS - 4.1%
Massachusetts State,
School Building Authority,
Ser A, RB, AGM Insured
5.000%, 08/15/14 1,175,000 1,357,184
Ser A, GO,
6.000%, 11/01/10 455,000 461,325
Ser C, GO, AGM Insured
5.500%, 11/01/10 140,000 141,778
Water Resources Authority,
Ser A, RB, National-RE Insured
5.250%, 08/01/16 1,000,000 1,177,710
5.250%, 08/01/15 1,025,000 1,209,193
------------
4,347,190
------------
NEVADA - 5.0%
Clark County,
Limited Tax-Bond Bank, GO
5.000%, 06/01/25 (A) 1,735,000 1,871,041
School District, Ser A, GO, AGM Insured
5.500%, 06/15/16 (A) 500,000 556,620
Las Vegas, Valley Water District,
Refunding & Water Improvement,
Ser A, GO, National-RE FGIC Insured
5.250%, 06/01/18 (A) 1,305,000 1,414,502
Las Vegas, Water District Revenue,
Ser B, GO, National-RE Insured
5.250%, 06/01/14 (A) 300,000 330,249
Nevada State, Ser B, GO, AGM Insured
5.000%, 08/01/24 (A) 525,000 551,103
Nevada State, Capital Improvements,
Ser A, GO, National-RE Insured
5.000%, 11/01/16 (A) 500,000 533,180
------------
5,256,695
------------
NEW JERSEY - 3.0%
Maplewood Township,
Refunding-General Improvement,
GO, AGM Insured
3.125%, 02/01/11 200,000 202,754
New Jersey State,
Ser L, GO, AMBAC Insured
5.250%, 07/15/16 1,015,000 1,198,461
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
NEW JERSEY - (CONTINUED)
Transportation Trust Fund Authority,
Ser A, RB
5.250%, 12/15/21 $ 515,000 $ 594,696
Transportation Trust Fund Authority,
Ser C, ETM, RB, National-RE Insured
5.250%, 06/15/15 1,000,000 1,190,260
------------
3,186,171
------------
NEW YORK - 4.7%
New York State,
Ser C-1, GO, AGM Insured
5.000%, 10/01/24 (A) 1,000,000 1,090,240
Ser M, GO, AGM Insured
5.000%, 04/01/15 1,000,000 1,147,660
New York State, Thruway Authority,
Highway and Bridge Trust Fund,
Ser A, RB, National-RE FGIC Insured
5.500%, 04/01/11 170,000 175,879
Personal Income Tax Revenue, Ser A, RB
5.000%, 03/15/11 300,000 308,679
Second Highway and Bridge Trust Fund,
Ser A, RB, National-RE Insured
Prerefunded @ 100 (B)
5.000%, 04/01/14 1,000,000 1,147,600
Ser B, RB
5.000%, 04/01/21 (A) 1,000,000 1,144,090
------------
5,014,148
------------
NORTH CAROLINA - 0.3%
Charlotte, GO
5.000%, 08/01/10 300,000 300,000
------------
OHIO - 0.2%
Ohio State, Water Development
Authority, Pollution Control Revenue,
Water Loan Fund Water Quality,
Ser B, RB
5.000%, 12/01/10 200,000 203,076
------------
OREGON - 6.0%
Chemeketa, Community College District,
ETM, GO, FGIC Insured
5.500%, 06/01/12 1,060,000 1,149,867
McMinnville, School District,
No. 40, GO, AGM Insured
5.000%, 06/15/11 1,000,000 1,039,800
Portland, Sewer System Revenue,
Second Lien, Ser B, RB, AGM Insured
5.000%, 06/15/23 (A) 1,160,000 1,288,772
The accompanying notes are an integral part of the financial statements.
108 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
NATIONAL INTERMEDIATE TAX-FREE BOND FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
OREGON - (CONTINUED)
Washington County, School District
Authority No. 15, GO, AGM Insured
5.000%, 06/15/14 $ 1,000,000 $ 1,133,310
Washington, Multnomah & Yamill
Counties, School District Authority,
GO, National-RE Insured
5.000%, 06/01/11 550,000 570,999
Yamill County, School District
Authority No. 29J, GO,
National-RE FGIC Insured
5.250%, 06/15/16 1,000,000 1,150,280
------------
6,333,028
------------
TEXAS - 9.1%
Austin, Water & WasteWater
System Revenue,
RB, LOC Dexia Credit Local (C)
0.350%, 05/15/31 (A) 1,200,000 1,200,000
Denton, Utilities System Revenue,
RB, National-RE Insured
5.250%, 12/01/23 1,065,000 1,131,669
Houston, Texas Utility System Revenue,
First Lien, Ser A, RB, AGM Insured
5.250%, 11/15/17 1,000,000 1,176,150
Lamar Consolidated Independent
School District, Schoolhouse,
GO, PSF Insured
5.000%, 02/15/17 800,000 945,704
Lower Colorado River Authority, RB
5.000%, 05/15/22 (A) 675,000 740,239
Texas Revenue, RB
5.000%, 05/15/21 (A) 935,000 1,034,970
North East Independent School District,
Ser A, GO, PSF Insured
5.000%, 08/01/17 500,000 594,905
San Antonio, Water Revenue,
RB, AGM Insured
5.500%, 05/15/15 (A) 500,000 542,390
RB, National-RE FGIC Insured
5.000%, 05/15/17 1,000,000 1,161,090
Texas State, University Systems
Financing Revenue, RB
5.250%, 03/15/21 (A) 1,000,000 1,147,710
------------
9,674,827
------------
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
UTAH - 2.2%
Park City, Utah School District,
Utah School Board, GO,
School Board Insured
4.000%, 02/01/11 $ 300,000 $ 305,493
Utah State, Board of Regents
Auxilliary & Campus Facilities Revenue,
Ser A, RB, National-RE Insured
5.000%, 04/01/17 (A) 1,500,000 1,662,495
Washington County School District,
St. George Building, Utah School Board
Guarantee Program, GO,
School Board Guarantee
3.750%, 03/01/11 300,000 305,994
------------
2,273,982
------------
WASHINGTON - 8.0%
Energy Northwest, Electric Revenue,
Project No. 1, Ser B, RB,
National-RE Insured
6.000%, 07/01/17 (A) 1,700,000 1,866,379
King County, School District
No. 410, GO,
National-RE FGIC Insured
5.500%, 12/01/10 1,285,000 1,306,087
Pierce County, GO, AMBAC Insured
5.125%, 08/01/16 (A) 1,375,000 1,573,935
Seattle, Limited Tax, Ser B, GO,
5.500%, 03/01/11 1,935,000 1,990,922
ETM, Prerefunded @ 100 (B)
5.500%, 03/01/11 65,000 66,959
Snohomish County,
School District No. 015 Edmonds,
Ser A, GO, AGM Insured
5.000%, 12/01/10 500,000 507,725
Washington State, Ser A, GO,
5.000%, 07/01/19 (A) 1,000,000 1,148,120
------------
8,460,127
------------
TOTAL MUNICIPAL BONDS
(Cost $95,769,141) 101,159,409
------------
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 109
SCHEDULE OF INVESTMENTS
JULY 31, 2010
NATIONAL INTERMEDIATE TAX-FREE BOND FUND (CONCLUDED)
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 3.1%
- --------------------------------------------------------------------------------
Fidelity Institutional
Tax-Exempt Portfolio 3,290,604 $ 3,290,604
------------
TOTAL REGISTERED INVESTMENT COMPANY
(Cost $3,290,604) 3,290,604
------------
TOTAL INVESTMENTS - 98.7%
(Cost $99,059,745) 104,450,013
------------
OTHER ASSETS & LIABILITIES, NET - 1.3% 1,368,220
------------
NET ASSETS - 100.0% $105,818,233
============
- --------------------------------------------------------------------------------
(A) THESE SECURITIES ARE SUBJECT TO A DEMAND FEATURE WHICH REDUCES THE
EFFECTIVE MATURITY DATE.
(B) PREREFUNDED SECURITY - THE MATURITY DATE SHOWN IS THE PREREFUNDED DATE.
(C) FLOATING RATE SECURITY. RATE DISCLOSED IS AS OF JULY 31, 2010.
AGM - ASSURED GUARANTY MUNICIPAL CORPORATION (FORMERLY KNOWN AS
FINANCIAL SECURITY ASSURANCE)
AMBAC - AMERICAN MUNICIPAL BOND ASSURANCE CORPORATION
COP - CERTIFICATES OF PARTICIPATION
ETM - ESCROWED TO MATURITY
FGIC - FINANCIAL GUARANTY INSURANCE CORPORATION
GO - GENERAL OBLIGATION
LOC - LETTER OF CREDIT
PSF - PRIORITY SOLIDARITY FUND
RB - REVENUE BOND
SER - SERIES
TA - TAX ALLOCATION
A summary of the inputs used to value the Fund's net assets as of July 31, 2010
is as follows (see Note 2 - significant accounting policies in the notes to
financial statements):
LEVEL 2 LEVEL 3
TOTAL FAIR LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
07/31/10 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Municipal Bonds $101,159,409 $ -- $101,159,409 $ --
Registered Investment Company 3,290,604 3,290,604 -- --
------------ ------------ ------------ ------------
Total: $104,450,013 $ 3,290,604 $101,159,409 $ --
============ ============ ============ ============
The accompanying notes are an integral part of the financial statements.
110 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
SHORT TERM BOND FUND
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - 50.2%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 5.3%
Comcast
5.500%, 03/15/11 $ 500,000 $ 513,592
5.300%, 01/15/14 1,150,000 1,273,888
JC Penney
9.000%, 08/01/12 500,000 553,125
Macy's Retail Holdings
5.350%, 03/15/12 500,000 516,250
Staples
9.750%, 01/15/14 1,000,000 1,231,919
7.750%, 04/01/11 700,000 729,040
Time Warner Cable
5.400%, 07/02/12 1,000,000 1,073,898
------------
5,891,712
------------
CONSUMER STAPLES - 5.0%
Anheuser-Busch Inbev Worldwide
3.000%, 10/15/12 1,000,000 1,033,581
Coca-Cola
3.625%, 03/15/14 250,000 269,075
General Mills
6.000%, 02/15/12 500,000 537,396
Kellogg, Ser B
6.600%, 04/01/11 500,000 519,428
Kraft Foods
6.250%, 06/01/12 500,000 543,963
Kroger
5.500%, 02/01/13 750,000 818,594
5.000%, 04/15/13 500,000 541,218
Safeway
6.500%, 03/01/11 750,000 771,989
5.800%, 08/15/12 500,000 542,772
------------
5,578,016
------------
ENERGY - 8.4%
ConocoPhillips
4.750%, 10/15/12 1,000,000 1,075,578
Consolidated Natural Gas
6.000%, 10/15/10 325,000 328,348
Enterprise Products Operating, Ser M
5.650%, 04/01/13 1,000,000 1,091,056
Kinder Morgan Energy Partners
7.500%, 11/01/10 800,000 810,138
Marathon Oil Corp
6.125%, 03/15/12 800,000 856,590
Northern Natural Gas (A)
7.000%, 06/01/11 500,000 523,920
SeaRiver Maritime (B)
0.000%, 09/01/12 3,000,000 2,854,872
Shell International Finance
4.000%, 03/21/14 1,000,000 1,072,698
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - (CONTINUED)
- --------------------------------------------------------------------------------
ENERGY - (CONTINUED)
Transcontinental Gas Pipeline, Ser B
7.000%, 08/15/11 $ 500,000 $ 527,728
Williams Cos (A)
6.375%, 10/01/10 230,000 231,396
------------
9,372,324
------------
FINANCIALS - 7.4%
Bank of America
5.375%, 09/11/12 1,000,000 1,058,158
BP Capital Markets
3.125%, 03/10/12 1,000,000 983,380
Goldman Sachs Group
5.700%, 09/01/12 1,000,000 1,075,205
John Deere Capital
5.100%, 01/15/13 500,000 544,811
John Deere Capital, MTN
5.400%, 10/17/11 510,000 537,319
JPMorgan Chase
4.750%, 05/01/13 1,000,000 1,081,420
3.125%, 12/01/11 500,000 517,219
Lehman Brothers Holdings, MTN (C)
5.625%, 01/24/13 500,000 108,125
UNUM Group
7.625%, 03/01/11 250,000 258,738
Wells Fargo
4.375%, 01/31/13 1,500,000 1,592,253
3.000%, 12/09/11 500,000 517,192
------------
8,273,820
------------
FOREIGN GOVERNMENT - 1.0%
Province of British Columbia
2.850%, 06/15/15 1,000,000 1,050,729
------------
HEALTH CARE - 3.6%
Cigna
7.000%, 01/15/11 500,000 512,558
Eli Lilly
3.550%, 03/06/12 500,000 520,980
Pfizer
4.450%, 03/15/12 500,000 528,556
UnitedHealth Group
5.250%, 03/15/11 750,000 768,141
Wellpoint
6.800%, 08/01/12 500,000 548,505
6.000%, 02/15/14 475,000 538,100
Wyeth
5.500%, 03/15/13 500,000 553,753
------------
3,970,593
------------
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 111
SCHEDULE OF INVESTMENTS
JULY 31, 2010
SHORT TERM BOND FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - (CONTINUED)
- --------------------------------------------------------------------------------
INDUSTRIAL - 5.8%
Burlington Northern Santa Fe
6.750%, 07/15/11 $ 500,000 $ 527,965
5.900%, 07/01/12 1,560,000 1,687,312
CSX
5.300%, 02/15/14 1,000,000 1,110,213
General Electric
5.000%, 02/01/13 1,000,000 1,083,313
Honeywell International
5.625%, 08/01/12 500,000 544,651
L-3 Communications (B)
5.875%, 01/15/15 500,000 510,000
Union Pacific
5.450%, 01/31/13 935,000 1,025,362
------------
6,488,816
------------
INFORMATION TECHNOLOGY - 1.5%
Hewlett-Packard
4.250%, 02/24/12 500,000 526,167
International Business Machines
7.500%, 06/15/13 500,000 587,504
Oracle
5.000%, 01/15/11 500,000 509,275
------------
1,622,946
------------
MATERIALS - 3.7%
Dow Chemical
4.850%, 08/15/12 1,000,000 1,059,006
Praxair
3.950%, 06/01/13 1,040,000 1,115,128
Rio Tinto Alcan
5.200%, 01/15/14 750,000 813,807
Teck Resources
7.000%, 09/15/12 998,000 1,074,789
------------
4,062,730
------------
TELECOMMUNICATION SERVICES - 2.2%
AT&T
5.875%, 08/15/12 1,250,000 1,368,093
Verizon Communications
5.250%, 04/15/13 1,000,000 1,105,043
------------
2,473,136
------------
UTILITIES - 6.3%
Centerpoint Energy, Ser B
7.250%, 09/01/10 250,000 250,992
Duke Energy
6.300%, 02/01/14 500,000 568,590
Exelon Generation
5.350%, 01/15/14 1,182,000 1,294,347
Firstenergy, Ser B
6.450%, 11/15/11 500,000 525,988
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - (CONTINUED)
- --------------------------------------------------------------------------------
UTILITIES - (CONTINUED)
FPL Group Capital (D)
1.419%, 06/17/11 $ 1,000,000 $ 1,006,117
MidAmerican Energy Holdings,
5.875%, 10/01/12 500,000 544,555
Ser D
5.000%, 02/15/14 500,000 545,577
Pacific Gas & Electric
4.200%, 03/01/11 1,000,000 1,018,977
Southern California Edison
5.750%, 03/15/14 500,000 571,679
Xcel Energy
7.000%, 12/01/10 658,000 670,763
------------
6,997,585
------------
TOTAL CORPORATE OBLIGATIONS
(Cost $55,044,312) 55,782,407
------------
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS - 20.8%
- --------------------------------------------------------------------------------
FHLMC 7 Year Balloon
3.500%, 08/01/10 103,811 104,024
FHLMC Gold
6.000%, 01/01/13 79,132 83,390
6.000%, 09/01/13 18,903 20,066
6.000%, 04/01/14 37,379 39,976
6.000%, 05/01/14 155,154 166,101
6.000%, 05/01/14 28,060 30,497
6.000%, 05/01/14 37,628 40,896
6.000%, 05/01/14 20,187 21,940
6.000%, 07/01/14 135,496 145,056
6.000%, 10/01/16 128,786 140,293
6.000%, 04/01/17 399,499 435,755
6.000%, 04/01/29 108,116 119,384
5.500%, 07/01/15 391,048 422,749
5.500%, 03/01/17 125,807 135,634
5.500%, 12/01/17 13,437 14,556
5.500%, 02/01/18 146,315 158,510
5.500%, 11/01/18 13,574 14,709
5.500%, 10/01/32 860,737 931,590
5.500%, 12/01/34 547,986 592,153
5.000%, 10/01/18 424,802 457,061
5.000%, 07/01/20 193,327 207,788
FHLMC, ARM
5.176%, 06/01/39 1,003,000 1,069,034
4.685%, 11/01/35 1,848,968 1,920,743
2.873%, 10/01/36 1,930,826 2,009,907
2.793%, 03/01/35 249,448 262,246
2.689%, 12/01/34 1,766,024 1,837,009
2.632%, 01/01/34 340,686 353,911
The accompanying notes are an integral part of the financial statements.
112 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
SHORT TERM BOND FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS - (CONTINUED)
- --------------------------------------------------------------------------------
FNMA
8.000%, 06/01/30 $ 5,007 $ 5,819
8.000%, 11/01/30 3,117 3,620
6.982%, 01/01/15 40,336 42,955
6.500%, 06/01/16 55,931 60,857
6.500%, 07/01/16 41,010 44,621
6.500%, 11/01/16 35,015 38,099
6.500%, 01/01/17 40,488 44,053
6.500%, 02/01/17 15,075 16,402
6.500%, 04/01/17 54,284 59,217
6.500%, 07/01/17 49,633 54,144
6.000%, 04/01/16 435,892 473,340
6.000%, 04/01/16 193,186 210,145
6.000%, 05/01/16 444,829 483,879
6.000%, 05/01/16 229,664 249,466
6.000%, 06/01/16 23,194 25,230
6.000%, 08/01/16 42,441 46,166
6.000%, 10/01/16 100,450 109,268
6.000%, 05/01/18 288,710 314,055
5.500%, 07/01/14 142,429 154,243
5.500%, 09/01/14 219,038 237,205
5.500%, 08/01/15 495,247 536,324
5.500%, 12/01/16 51,111 55,366
5.500%, 01/01/17 375,908 407,204
5.500%, 09/01/17 507,116 549,036
5.500%, 09/01/17 61,399 66,568
5.500%, 10/01/17 82,091 88,892
5.500%, 11/01/17 144,516 156,431
5.500%, 12/01/17 86,427 93,616
5.500%, 02/01/18 9,923 10,774
5.500%, 04/01/18 21,695 23,556
5.500%, 10/01/18 26,693 28,941
5.500%, 12/01/18 986,478 1,068,607
5.000%, 07/01/14 37,044 38,966
5.000%, 05/01/18 24,610 26,470
5.000%, 06/01/18 94,190 101,309
FNMA, ARM
5.175%, 01/01/36 1,587,975 1,664,733
3.177%, 09/01/33 178,246 185,385
3.118%, 08/01/27 32,828 33,308
2.540%, 06/01/34 1,449,352 1,507,960
2.108%, 01/01/35 494,083 513,095
FNMA, CMO REMIC,
Ser 2002-18, Cl PC
5.500%, 04/25/17 180,418 190,884
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS - (CONTINUED)
- --------------------------------------------------------------------------------
GNMA, CMO REMIC
Ser 62, Cl B
4.763%, 01/16/25 $ 48,079 $ 48,375
Ser 52, CI A
4.287%, 01/16/30 1,138,301 1,162,946
Ser 51, CI A
4.145%, 02/16/18 109,399 109,927
Ser 77, CI A
3.402%, 03/16/20 102,829 103,069
------------
TOTAL U.S. GOVERNMENT AGENCY
MORTGAGE-BACKED OBLIGATIONS
(Cost $22,427,714) 23,179,504
------------
- --------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES - 12.3%
- --------------------------------------------------------------------------------
Banc of America Commercial Mortgage,
Ser 2003-2, Cl A2
4.342%, 03/11/41 154,863 156,609
Ser 2005-1, Cl A3
4.877%, 11/10/42 96,038 96,834
Banc of America Funding,
Ser 2002-2, Cl A2
6.000%, 11/25/32 6,306 6,257
Bear Stearns Commercial
Mortgage Securities,
Ser 2001-TOP2, Cl A2
6.480%, 02/15/35 907,627 924,803
Ser 2001-TOP4, Cl A1
5.060%, 11/15/16 22,910 23,031
Ser 2003-T12, Cl A3(D)
4.240%, 08/13/39 333,292 343,188
Ser 2004-PWR5, Cl A3
4.565%, 07/11/42 640,000 650,130
Chase Manhattan Bank-
First Union National Bank,
Ser 1999-1, Cl E (D)
7.568%, 08/15/31 750,000 755,261
Chase Mortgage Finance,
Ser 2003-S10, Cl A1
4.750%, 11/25/18 795,789 829,689
Ser 2004-S1, CI A3
5.500%, 02/25/19 418,187 433,230
Citicorp Mortgage Securities,
Ser 2003-10, Cl A1
4.500%, 11/25/18 907,145 936,144
Commercial Mortgage Pass
Through Certificates,
Ser 2004-LB4A, Cl A3
4.405%, 10/15/37 1,000,000 1,015,026
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 113
SCHEDULE OF INVESTMENTS
JULY 31, 2010
SHORT TERM BOND FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES - (CONTINUED)
- --------------------------------------------------------------------------------
Greenwich Capital Commercial Funding,
Ser 2004-GG1, Cl A5
4.883%, 06/10/36 $ 1,500,000 $ 1,532,360
Master Asset Securitization Trust,
Ser 2003-10, Cl 2A1
4.500%, 11/25/13 96,627 97,324
Merrill Lynch Mortgage Investors Trust,
Ser 2005-A2, Cl A4 (D)
2.802%, 02/25/35 272,547 272,532
Merrill Lynch Mortgage Trust,
Ser 2002-MW1, CI A3
5.403%, 07/12/34 399,582 407,275
Morgan Stanley Capital I,
Ser 2003-T11, Cl A4
5.150%, 06/13/41 310,000 332,594
Ser 2004-T15, Cl A2
4.690%, 06/13/41 220,207 221,204
Morgan Stanley Dean Witter Capital I,
Ser 2001-TOP1, Cl A4
6.660%, 02/15/33 118,154 119,511
Ser 2001-TOP3, Cl A4
6.390%, 07/15/33 590,859 609,853
Ser 2002-IQ2, Cl A4
5.740%, 12/15/35 638,469 670,327
Wachovia Bank Commercial
Mortgage Trust,
Ser 2004-C15, Cl A2
4.039%, 10/15/41 718,847 723,357
Ser 2005-C17, Cl A2
4.782%, 03/15/42 487,990 488,840
Washington Mutual,
Ser 2002-MS6, Cl 3A1
6.500%, 09/25/32 350,729 360,886
Ser 2005-8, Cl 1A8
5.500%, 10/25/35 213,172 196,359
Wells Fargo Mortgage Backed
Securities Trust,
Ser 2003-M, Cl A1(D)
4.675%, 12/25/33 686,264 693,547
Ser 2004-2, Cl A1
5.000%, 01/25/19 797,050 821,191
------------
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $13,429,530) 13,717,362
------------
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES - 8.8%
- --------------------------------------------------------------------------------
BMW Vehicle Owner Trust,
Ser 2010-A, Cl A3
1.390%, 04/25/13 1,000,000 1,010,721
Centerpoint Energy Transition Bond,
Ser 2005-A, Cl A2
4.970%, 08/01/14 434,725 452,196
- --------------------------------------------------------------------------------
Description Par/Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES - (CONTINUED)
- --------------------------------------------------------------------------------
Chase Issuance Trust,
Ser 2005-A2, Cl A2(D)
0.411%, 12/15/14 $ 1,500,000 $ 1,496,269
Ser 2009-A3, Cl A3
2.400%, 06/17/13 430,000 436,711
FPL Recovery Funding,
Ser 2007-A, Cl A2
5.044%, 08/01/15 1,000,000 1,075,212
Massachusetts RRB Special Purpose Trust,
Ser 2001-1, Cl A
6.530%, 06/01/15 1,295,630 1,407,198
Ser 2005-1, Cl A3
4.130%, 09/15/13 703,447 717,437
PG&E Energy Recovery Funding,
Ser 2005-1, Cl A5
4.470%, 12/25/14 1,000,000 1,073,638
Ser 2005-2, Cl A2
5.030%, 03/25/14 708,329 735,537
PSE&G Transition Funding,
Ser 2005-1, Cl A2
4.340%, 06/16/14 126,763 131,296
Public Service New Hampshire Funding,
Ser 2001-1, Cl A3
6.480%, 05/01/15 1,137,187 1,228,910
------------
TOTAL ASSET-BACKED SECURITIES
(Cost $9,671,722) 9,765,125
------------
- --------------------------------------------------------------------------------
U.S. TREASURY OBLIGATION - 3.8%
- --------------------------------------------------------------------------------
U.S. Treasury Inflation Index Note
2.000%, 01/15/16 1,000,000 1,188,424
U.S. Treasury Note
1.375%, 09/15/12 2,000,000 2,033,124
1.000%, 10/31/11 1,000,000 1,007,695
------------
TOTAL U.S. TREASURY OBLIGATION
(Cost $4,137,719) 4,229,243
------------
- --------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 2.4%
- --------------------------------------------------------------------------------
Dreyfus Cash Management 2,703,066 2,703,066
------------
TOTAL REGISTERED INVESTMENT COMPANY
(Cost $2,703,066) 2,703,066
------------
TOTAL INVESTMENTS - 98.3%
(Cost $107,414,063) 109,376,707
------------
OTHER ASSETS & LIABILITIES, NET - 1.7% 1,891,611
------------
NET ASSETS - 100.0% $111,268,318
============
The accompanying notes are an integral part of the financial statements.
114 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
SHORT TERM BOND FUND (CONCLUDED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(A) SECURITIES SOLD WITHIN THE TERMS OF A PRIVATE PLACEMENT MEMORANDUM, EXEMPT
FROM REGISTRATION UNDER SECTION 3(A), 4(2) OR RULE 144A OF THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY BE SOLD ONLY TO THE DEALERS IN THAT
PROGRAM OR OTHER "ACCREDITED INVESTORS". THE VALUE OF THESE SECURITIES AS
OF JULY 31, 2010 WAS $755,316 AND REPRESENTED 0.7% OF NET ASSETS.
(B) THIS SECURITY IS SUBJECT TO A DEMAND FEATURE WHICH REDUCES THE EFFECTIVE
MATURITY.
(C) THE ISSUER IS IN DEFAULT OF CERTAIN DEBT COVENANTS. INCOME IS NOT BEING
ACCRUED. AS OF JULY 31, 2010, THE VALUE OF THESE SECURITIES AMOUNTED TO
$108,125, WHICH REPRESENTS 0.1% OF NET ASSETS.
(D) FLOATING RATE SECURITY. RATE DISCLOSED IS AS OF JULY 31, 2010.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ARM - ADJUSTABLE RATE MORTGAGE
CL - CLASS
CMO - COLLATERALIZED MORTGAGE OBLIGATION
FHLMC - FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA - FEDERAL NATIONAL MORTGAGE ASSOCIATION
GNMA - GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
MTN - MEDIUM TERM NOTE
REMIC - REAL ESTATE MORTGAGE INVESTMENT CONDUIT
SER - SERIES
A summary of the inputs used to value the Fund's net assets as of July 31, 2010
is as follows (see Note 2 - significant accounting policies in the notes to
financial statements):
LEVEL 2 LEVEL 3
TOTAL FAIR LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
07/31/10 PRICE INPUTS INPUTS
------------- -------------- ------------- ------------
Corporate Obligations $ 55,782,407 $ -- $ 55,782,407 $ --
U.S. Government Agency Mortgage-Backed Obligations 23,179,504 -- 23,179,504 --
Mortgage-Backed Securities 13,717,362 -- 13,717,362 --
Asset-Backed Securities 9,765,125 -- 9,765,125 --
U.S. Treasury Obligations 4,229,243 -- 4,229,243 --
Registered Investment Company 2,703,066 2,703,066 -- --
------------- -------------- ------------- ------------
Total: $ 109,376,707 $ 2,703,066 $ 106,673,641 $ --
============= ============== ============= ============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 115
SCHEDULE OF INVESTMENTS
JULY 31, 2010
WISCONSIN TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - 94.3%
- --------------------------------------------------------------------------------
GUAM - 2.4%
Guam Power Authority, Ser A, RB,
National-RE-IBC Bank Insured
5.125%, 10/01/29 (A) $ 3,815,000 $ 3,784,862
------------
MASSACHUSETTS - 0.7%
Massachusetts State Housing
Finance Agency, Multi-Family
Housing Authority, ETM, RB,
HUD Section 8
7.000%, 04/01/21 (A) 910,000 1,224,560
------------
PUERTO RICO - 20.5%
Commonwealth of Puerto Rico,
Public Improvement,
GO, AGM Insured, Unrefunded Balance
5.250%, 07/01/27 (A) 755,000 760,353
5.125%, 07/01/30 (A) 1,215,000 1,220,127
Ser A, GO, National-RE Insured
5.500%, 07/01/20 1,020,000 1,096,551
Ser A, GO, XLCA Insured
5.500%, 07/01/17 1,130,000 1,231,384
Puerto Rico Commonwealth
Highway & Transportation Authority,
Grant Anticipation Revenue,
RB, National-RE Insured
5.000%, 09/15/20 (A) 780,000 802,004
Highway Revenue,
Ser AA, RB, AGM Insured (A)
4.950%, 07/01/26 1,500,000 1,555,860
Transportation Revenue,
Ser E, RB, AGM Insured
5.500%, 07/01/23 1,120,000 1,269,890
Puerto Rico Commonwealth
Infrastructure Financing Authority,
Special Tax Revenue, Ser A,
BHAC Credit, FGIC Insured
5.500%, 07/01/22 1,385,000 1,651,322
FGIC Insured
5.500%, 07/01/21 945,000 1,008,901
Puerto Rico Electric Power Authority,
Ser TT, RB
5.000%, 07/01/22 (A) 300,000 312,426
5.000%, 07/01/37 (A) 1,700,000 1,658,180
Ser UU, RB, AGM Insured
5.000%, 07/01/20 (A) 1,000,000 1,084,920
Ser WW, RB
5.500%, 07/01/38 (A) 2,500,000 2,565,925
Ser XX, RB (A)
4.625%, 07/01/25 2,100,000 2,107,371
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
PUERTO RICO - (CONTINUED)
Puerto Rico Municipal Finance Agency,
Ser A, GO, AGM Insured
5.000%, 08/01/30 (A) $ 880,000 $ 897,899
Ser C, GO, CIFG Insured
5.250%, 08/01/23 1,000,000 1,068,090
Puerto Rico Public Buildings
Authority, Revenue Refunding,
Government Facilities,
Ser H, RB, AMBAC,
Commonwealth Guaranteed
5.500%, 07/01/17 1,250,000 1,358,225
Ser L, RB, XLCA,
Commonwealth Guaranteed
5.500%, 07/01/21 500,000 532,930
Puerto Rico Sales Tax Financing,
Corporate Sales Tax Revenue,
First Sub-Ser A, RB
5.500%, 08/01/37 (A) 2,500,000 2,553,725
5.750%, 08/01/37 (A) 1,400,000 1,462,916
6.375%, 08/01/39 (A) 3,000,000 3,295,800
6.000%, 08/01/42 (A) 1,000,000 1,069,470
6.500%, 08/01/44 (A) 2,000,000 2,222,780
------------
32,787,049
------------
VIRGIN ISLANDS - 5.7%
Virgin Islands Public Finance Authority,
Gross Receipts Taxes Loan Notes, RB,
National-RE FGIC Insured
5.000%, 10/01/21 (A) 2,000,000 2,072,740
5.000%, 10/01/23 (A) 1,000,000 1,037,460
5.000%, 10/01/24 (A) 2,500,000 2,569,150
5.000%, 10/01/27 (A) 2,000,000 2,016,740
Senior Lien, Capital Projects,
Ser A-1, RB
5.000%, 10/01/39 (A) 1,250,000 1,194,550
Virgin Islands Water & Power Authority,
Water Systems Revenue, Refunding,
Asset Guarantee, RB,
National-RE-IBC Bank MBIA Insured
5.250%, 07/01/12 (A) 170,000 170,505
------------
9,061,145
------------
WISCONSIN - 65.0%
Appleton, Redevelopment Authority,
Fox Cities Performing Arts Project,
Ser A, RB, LOC Associated Bank N.A.
4.750%, 09/01/17 (A) 360,000 366,916
4.850%, 09/01/19 (A) 435,000 442,282
The accompanying notes are an integral part of the financial statements.
116 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
WISCONSIN TAX-EXEMPT FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
WISCONSIN - (CONTINUED)
Ashwaubenon, Community Development
Authority, Lease Revenue,
Refunding, Arena Project, RB
4.700%, 06/01/15 (A) $ 500,000 $ 523,235
5.050%, 06/01/19 (A) 1,030,000 1,074,661
5.200%, 06/01/22 (A) 500,000 519,190
5.000%, 06/01/23 (A) 925,000 954,748
Beloit, Community Development
Authority, Lease Revenue, RB
4.700%, 03/01/21 (A) 345,000 364,099
4.750%, 03/01/22 (A) 300,000 315,171
5.000%, 03/01/25 (A) 650,000 683,423
Burlington, Community Development
Authority, Lease Revenue, RB
4.000%, 04/01/16 (A) 200,000 211,934
4.100%, 04/01/17 (A) 750,000 784,927
Cudahy, Community Development
Authority, Redevelopment Lease
Revenue, RB
3.250%, 06/01/11 (A) 250,000 250,410
3.300%, 06/01/11 175,000 177,368
4.000%, 06/01/12 100,000 103,930
3.650%, 06/01/13 200,000 208,400
4.250%, 06/01/17 (A) 500,000 529,865
Delafield, Community Development
Authority, Redevelopment Revenue,
St. Johns Northwestern Military, RB
4.150%, 06/01/25 (A) 250,000 262,235
4.250%, 06/01/26 (A) 330,000 346,081
4.600%, 06/01/30 (A) 600,000 628,338
Eau Claire, Housing Authority,
Housing Revenue, London Hill
Townhouses Project, Ser A, RB
6.250%, 05/01/15 350,000 340,445
Glendale, Community Development
Authority, Lease Revenue,
Bayshore Public Parking Facility,
Ser A, RB
5.000%, 10/01/24 (A) 1,500,000 1,563,285
4.750%, 10/01/27 (A) 1,000,000 1,011,340
Tax Increment District No. 7, RB
4.350%, 09/01/16 (A) 1,000,000 1,031,420
4.750%, 09/01/17 (A) 1,250,000 1,272,675
4.500%, 09/01/18 (A) 2,000,000 2,051,340
4.875%, 09/01/19 (A) 1,000,000 1,015,420
Green Bay, Redevelopment Authority,
Bellin Memorial Hospital Project, RB
6.000%, 12/01/29 (A) 1,000,000 1,073,670
6.150%, 12/01/32 (A) 1,000,000 1,079,570
Ser A
5.500%, 02/15/21 (A) 400,000 407,504
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
WISCONSIN - (CONTINUED)
Lease Revenue, Refunding,
Convention Center Project, RB
4.200%, 06/01/25 (A) $ 1,000,000 $ 1,023,310
4.300%, 06/01/29 (A) 1,000,000 1,008,670
Green Bay/Brown County Professional
Football Stadium, Lambeau Field
Renovation Project,
Ser A, RB, AMBAC Insured
4.850%, 02/01/15 (A) 1,020,000 1,033,444
4.900%, 02/01/16 (A) 1,015,000 1,026,774
5.000%, 02/01/19 (A) 2,500,000 2,523,100
Kenosha, Housing Authority,
Multi-Family Housing Revenue,
Villa Ciera Project,
Ser A, RB, GNMA Collateralized
6.000%, 11/20/41 (A) 1,000,000 1,002,530
Madison, Community Development
Authority Revenue,
Wisconsin Alumni
Research Fund Project, RB
5.000%, 10/01/27 (A) 925,000 1,010,128
5.000%, 10/01/34 (A) 4,500,000 4,739,625
Middleton, Community Development
Authority, Lease Revenue, Ser A, RB
4.350%, 10/01/17 (A) 1,630,000 1,685,632
4.550%, 10/01/18 (A) 500,000 517,865
Milwaukee, Redevelopment Authority,
Summerfest Project, RB
4.700%, 08/01/15 (A) 500,000 510,015
4.800%, 08/01/16 (A) 500,000 508,580
4.850%, 08/01/17 (A) 500,000 507,400
4.950%, 08/01/20 (A) 1,250,000 1,264,825
Milwaukee, Redevelopment Authority,
Development Revenue, Refunding,
Marquette University
Project, RB, XLCA Insured
4.150%, 11/01/16 (A) 1,275,000 1,290,733
4.250%, 11/01/17 (A) 1,000,000 1,007,820
4.350%, 11/01/18 (A) 500,000 502,625
Milwaukee, Redevelopment Authority,
Lease Revenue,
Milwaukee Public Schools,
Congress School, Ser A, RB
4.500%, 08/01/20 (A) 500,000 510,945
4.600%, 08/01/22 (A) 500,000 514,135
RB, AMBAC Insured
3.250%, 08/01/11 500,000 512,680
3.650%, 08/01/13 2,000,000 2,138,680
3.800%, 08/01/14 (A) 1,000,000 1,067,040
4.000%, 08/01/16 (A) 1,000,000 1,045,330
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 117
SCHEDULE OF INVESTMENTS
JULY 31, 2010
WISCONSIN TAX-EXEMPT FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
WISCONSIN - (CONTINUED)
4.100%, 08/01/17 (A) $ 1,000,000 $ 1,039,680
4.125%, 08/01/18 (A) 2,010,000 2,078,320
University of Wisconsin,
Kenilworth Project, RB,
LOC U.S. Bank NA (C)
0.280%, 09/01/40 1,000,000 1,000,000
Milwaukee, Redevelopment Authority,
Redevelopment Revenue,
United Community Center Inc.
Project, RB, LOC U.S. Bank NA (C)
0.280%, 10/01/22 450,000 450,000
YMCA Greater Milwaukee,
Ser A, RB, LOC Marshall & Ilsley Bank
5.250%, 06/01/19 (A) 395,000 398,527
5.300%, 06/01/29 (A) 1,800,000 1,804,896
Ser B, RB, LOC FHLB
5.150%, 06/01/19 (A) 190,000 197,482
5.200%, 06/01/29 (A) 355,000 368,795
Neenah, Community Development
Authority, Lease Revenue, Ser A, RB
4.300%, 12/01/20 (A) 1,000,000 1,039,550
5.125%, 12/01/23 (A) 1,000,000 1,074,200
4.625%, 12/01/28 (A) 600,000 621,996
4.700%, 12/01/28 (A) 1,250,000 1,279,387
4.750%, 12/01/32 (A) 400,000 410,488
North Fond Du Lac, Community
Development Authority,
Lease Revenue, Refunding, RB
4.350%, 12/01/17 (A) 325,000 335,588
Oak Creek, Housing Authority,
Refunding, Capital Appreciation,
Wood Creek Project, RB,
GNMA Collateralized
0.000%, 01/20/11 (A) 125,000 121,820
0.000%, 07/20/11 (A) 125,000 118,735
0.000%, 01/20/12 (A) 65,000 60,090
0.000%, 01/20/13 (A) 125,000 109,390
0.000%, 07/20/13 (A) 125,000 106,427
0.000%, 01/20/14 (A) 60,000 49,613
Wood Creek Project,
RB, GNMA Collateralized
5.500%, 07/20/19 (A) 1,000,000 1,000,530
5.625%, 07/20/29 (A) 2,205,000 2,206,169
Onalaska, Community Development
Authority, Lease Revenue, RB
3.650%, 10/01/12 (A) 100,000 103,876
3.900%, 10/01/14 (A) 100,000 104,907
4.000%, 10/01/15 100,000 103,784
4.150%, 10/01/16 (A) 200,000 206,386
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
WISCONSIN - (CONTINUED)
Oostburg, Community Development
Authority, Lease Revenue, TA
4.350%, 05/01/21 (A) $ 105,000 $ 105,264
4.400%, 05/01/22 (A) 110,000 110,078
Oshkosh, Housing Authority,
VNA Apartments Inc. Project, RB,
GNMA Collateralized
5.450%, 09/20/17 (A) 100,000 100,066
5.750%, 09/20/38 (A) 1,260,000 1,260,655
Sheboygan, Housing Authority,
Multifamily Revenue Refunding,
Lake Shore Apartments Project,
Ser A, RB, GNMA Collateralized
5.100%, 11/20/26 (A) 1,000,000 1,000,390
Southeast Wisconsin Professional
Baseball Park District,
League, Capital Appreciation, COP,
ETM, National-RE Insured
0.000%, 12/15/15 970,000 880,634
0.000%, 12/15/17 1,000,000 836,450
Sales Tax Revenue, Refunding,
Ser A, RB, National-RE Insured
5.500%, 12/15/11 525,000 557,954
5.500%, 12/15/18 250,000 302,502
5.500%, 12/15/19 2,000,000 2,429,160
5.500%, 12/15/26 4,010,000 4,480,413
5.100%, 12/15/29 (A) 285,000 302,670
Sturgeon Bay, Waterfront Redevelopment
Authority, Lease Revenue, Ser A, RB
4.350%, 10/01/18 (A) 1,100,000 1,129,249
4.500%, 10/01/21 (A) 500,000 506,685
Sun Prairie, Community Development
Authority, Lease Revenue, RB
4.400%, 08/01/20 (A) 150,000 152,224
4.500%, 08/01/21 (A) 150,000 152,518
Tax Incremental District No. 8, RB
4.300%, 08/01/21 (A) 975,000 988,114
4.350%, 08/01/22 (A) 975,000 985,023
Verona, Community Development
Authority, Community Development
Lease Revenue, RB
3.800%, 12/01/16 (A) 100,000 101,150
3.900%, 12/01/17 (A) 100,000 100,710
4.000%, 12/01/18 (A) 50,000 50,214
4.800%, 02/01/20 (A) 100,000 102,190
4.200%, 12/01/20 (A) 50,000 50,043
4.250%, 12/01/21 (A) 50,000 49,997
4.850%, 02/01/22 (A) 200,000 203,076
Ser A, RB
3.650%, 06/01/17 (A) 100,000 100,128
The accompanying notes are an integral part of the financial statements.
118 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
WISCONSIN TAX-EXEMPT FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
WISCONSIN - (CONTINUED)
Walworth County, Housing Authority,
Housing Revenue, Kiwanis Heritage
Senior Apartments, RB, FHA Insured
5.700%, 03/01/39 (A) $ 460,000 $ 460,235
Waterford, Community Development
Authority, Lease Revenue, Refunding, RB
4.650%, 10/01/20 (A) 750,000 757,868
Waukesha, Redevelopment Authority,
Avalon Square Project,
Ser A, RB, GNMA Collateralized
5.000%, 06/20/21 (A) 1,000,000 1,032,660
Wauwatosa, Housing Authority,
Capital Appreciation, Refunding,
Hawthorne Terrace Project, Ser A, RB
0.000%, 11/01/10 100,000 99,831
West Bend, Redevelopment Authority,
Lease Revenue, RB
4.500%, 10/01/23 (A) 250,000 259,065
4.550%, 10/01/24 (A) 250,000 258,222
4.600%, 10/01/25 (A) 150,000 154,503
4.650%, 10/01/28 (A) 250,000 254,575
Weston, Community Development
Authority, Lease Revenue,
Ser A, RB
4.100%, 10/01/16 (A) 500,000 522,730
4.250%, 10/01/17 (A) 200,000 208,346
4.350%, 10/01/18 (A) 500,000 510,180
4.400%, 10/01/18 (A) 500,000 519,020
5.250%, 10/01/20 (A) 445,000 472,746
4.500%, 10/01/21 (A) 100,000 101,524
4.700%, 10/01/21 (A) 1,230,000 1,272,152
4.625%, 10/01/25 (A) 825,000 831,204
Guaranty Agreement: Associated Trust Co.
4.450%, 10/01/19 (A) 500,000 508,820
Ser B, RB
4.750%, 10/01/22 (A) 130,000 133,094
4.750%, 10/01/23 (A) 140,000 142,796
Winnebago County, Housing Authority,
Housing Revenue, Ser A, RB
6.875%, 03/01/12 (A) 50,000 50,184
7.125%, 03/01/22 (A) 380,000 381,467
Wisconsin Center District,
Capital Appreciation,
Senior Dedicated Tax Revenue,
Ser A, RB, National-RE Insured
0.000%, 12/15/26 2,500,000 1,157,775
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
WISCONSIN - (CONTINUED)
Ser 1998A, Junior Dedicated
Tax Revenue,
RB, AGM Insured
5.250%, 12/15/23 $ 2,585,000 $ 2,879,044
Wisconsin Dells, Community
Development Authority,
Lease Revenue, RB
5.000%, 03/01/22 (A) 1,500,000 1,550,010
5.000%, 09/01/24 (A) 110,000 110,025
4.600%, 03/01/25 (A) 1,200,000 1,193,664
Ser A
4.300%, 03/01/22 (A) 225,000 224,586
4.450%, 03/01/25 (A) 300,000 293,691
Wisconsin Housing & Economic
Development Authority,
Multi-Family Housing,
Ser A, RB (D)
4.250%, 12/01/35 (A) 1,500,000 1,551,555
Ser A, RB, (C)
SPA Marshall & Ilsley Bank,
LOC Fannie Mae & Freddie Mac
0.270%, 10/01/36 140,000 140,000
Ser B, RB,
GO of Authorization
4.300%, 05/01/27 (A) 1,000,000 994,040
4.400%, 05/01/37 (A) 500,000 470,020
GO of Authorization,
SPA Marshall & Ilsley Bank (C)
0.270%, 10/01/36 150,000 150,000
Ser E, RB, GO of Authorization
4.700%, 11/01/25 (A) 275,000 281,911
4.900%, 11/01/35 (A) 1,650,000 1,654,026
Wisconsin Housing Finance Authority,
RB, FHA Mortgages Insured,
Prerefunded 12/01/17 @ 100 (B)
6.100%, 12/01/17 995,000 1,178,160
RB, National-RE FHA Mortgages
Insured, Prerefunded
12/01/17 @ 100 (B)
6.100%, 12/01/17 925,000 1,095,274
------------
103,828,964
------------
TOTAL MUNICIPAL BONDS
(Cost $146,357,392) 150,686,580
------------
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 119
SCHEDULE OF INVESTMENTS
JULY 31, 2010
WISCONSIN TAX-EXEMPT FUND (CONCLUDED)
- --------------------------------------------------------------------------------
Description Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 4.4%
- --------------------------------------------------------------------------------
AIM Tax-Free Investments Co. -
Cash Reserve Portfolio,
Private Class 6,954,084 $ 6,954,084
------------
TOTAL REGISTERED INVESTMENT COMPANY
(Cost $6,954,084) 6,954,084
------------
TOTAL INVESTMENTS - 98.7%
(Cost $153,311,476) 157,640,664
------------
OTHER ASSETS & LIABILITIES, NET - 1.3% 2,079,363
------------
NET ASSETS - 100.0% $159,720,027
============
- --------------------------------------------------------------------------------
(A) THESE SECURITIES ARE SUBJECT TO A DEMAND FEATURE WHICH REDUCES THE
EFFECTIVE MATURITY.
(B) PREREFUNDED SECURITY - THE MATURITY DATE SHOWN IS THE PREREFUNDED DATE.
(C) DEMAND FEATURE - THE ADJUSTABLE RATE REFLECTED IS THE RATE IN EFFECT ON
JULY 31, 2010. THE DATE REPORTED IS THE FINAL MATURITY, NOT THE DATE ON
WHICH PRINCIPAL COULD BE RECOVERED.
(D) FLOATING RATE SECURITY. RATE DISCLOSED IS AS OF JULY 31, 2010.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AGM - ASSURED GUARANTY MUNICIPAL CORPORATION (FORMERLY KNOWN AS FINANCIAL
SECURITY ASSURANCE)
AMBAC - AMERICAN MUNICIPAL BOND ASSURANCE CORPORATION
BHAC - BERKSHIRE HATHAWAY ASSURANCE CORP.
COP - CERTIFICATES OF PARTICIPATION
ETM - ESCROWED TO MATURITY
FGIC - FINANCIAL GUARANTY INSURANCE CORPORATION
FHA - FEDERAL HOUSING ADMINISTRATION
FHLB - FEDERAL HOME LOAN BANK
GNMA - GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
GO - GENERAL OBLIGATION
HUD - HOUSING AND URBAN DEVELOPMENT
IBC - INTERNATIONAL BANCSHARES CORP.
LOC - LETTER OF CREDIT
MBIA - MUNICIPAL BOND INVESTORS ASSURANCE
NA - NATIONAL ASSOCIATION
RB - REVENUE BOND
SER - SERIES
SPA - STANDBY PURCHASE AGREEMENT
TA - TAX ALLOCATION
XLCA - XL CAPITAL ASSURANCE
A summary of the inputs used to value the Fund's net assets as of July 31, 2010
is as follows (see Note 2 - significant accounting policies in the notes to
financial statements):
LEVEL 2 LEVEL 3
TOTAL FAIR LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
07/31/10 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Municipal Bonds $150,686,580 $ -- $150,686,580 $ --
Registered Investment Company 6,954,084 6,954,084 -- --
------------ ------------ ------------ ------------
Total: $157,640,664 $ 6,954,084 $150,686,580 $ --
============ ============ ============ ============
The accompanying notes are an integral part of the financial statements.
120 HIGHMARK(R) FUNDS
This Page Left Blank Intentionally.
STATEMENTS OF ASSETS AND LIABILITIES
JULY 31, 2010
COGNITIVE
BALANCED VALUE
FUND FUND
------------- -------------
ASSETS:
Investments, at Value + ........................................................................ $ 22,080,514 $ 72,670,121
Repurchase Agreements, at Value + .............................................................. 1,752,332 1,493,007
Cash ........................................................................................... -- --
Receivable for Investments Sold ................................................................ 203,225 1,533,968
Receivable for Fund Shares Sold ................................................................ 9,063 7,579
Accrued Income ................................................................................. 182,414 55,944
Prepaid Expenses ............................................................................... 23,727 19,246
Reclaims Receivable ............................................................................ -- --
Deferred Compensation .......................................................................... 1,429 4,294
Variation Margin Receivable .................................................................... -- --
Due from Adviser, net .......................................................................... -- --
------------- -------------
TOTAL ASSETS ................................................................................. 24,252,704 75,784,159
------------- -------------
LIABILITIES:
Payable for Investments Purchased .............................................................. -- 1,628,770
Payable for Fund Shares Redeemed ............................................................... 30,520 265,118
Income Distribution Payable .................................................................... -- --
Due to Custodian ............................................................................... -- --
Investment Adviser Fees Payable ................................................................ 4,172 43,699
Administration Fees Payable .................................................................... 3,034 9,119
Chief Compliance Officer Fees Payable .......................................................... 1,038 1,038
Custodian Fees Payable ......................................................................... 126 380
Audit Fees Payable ............................................................................. 25,709 23,665
Deferred Compensation Payable .................................................................. 1,429 4,294
Shareholder Servicing Fees Payable ............................................................. 3,010 279
Transfer Agent Fees Payable .................................................................... 4,141 4,925
Printing Fees Payable .......................................................................... 906 2,823
Trustees Fees Payable .......................................................................... 109 324
Accrued Distribution Fees ...................................................................... 1,892 546
Accrued Expenses and Other Payables ............................................................ 3,065 3,967
------------- -------------
TOTAL LIABILITIES ............................................................................ 79,151 1,988,947
------------- -------------
Net Assets ................................................................................. $ 24,173,553 $ 73,795,212
============= =============
NET ASSETS:
Paid-in Capital (unlimited authorized - no par value) .......................................... $ 23,762,595 $ 89,934,266
Undistributed Net Investment Income/(Accumulated Net Investment Loss) .......................... 119,649 216,682
Accumulated Net Realized Gain (Loss) on Investments, Investments in Affiliated Funds,
Forward Foreign Currency Contracts, Futures Contracts and Foreign Currency Transactions ..... (2,704,867) (23,100,389)
Net Unrealized Appreciation (Depreciation) on Investments, Investments in Affiliated Funds,
Forward Foreign Currency Contracts, Futures Contracts and Foreign Currency Transactions ..... 2,996,176 6,744,653
------------- -------------
Net Assets ................................................................................. $ 24,173,553 $ 73,795,212
============= =============
+ Cost of Investments and Repurchase Agreements ............................................... $ 20,836,670 $ 67,418,475
* Represents margin deposit for futures contracts.
Amounts designated as "--" are either not applicable or less than $1.00.
The accompanying notes are an integral part of the financial statements.
122 HIGHMARK(R) FUNDS
GENEVA GENEVA
CORE ENHANCED EQUITY FUNDAMENTAL MID CAP SMALL CAP
EQUITY GROWTH INCOME EQUITY GROWTH GROWTH
FUND FUND FUND FUND FUND FUND
------------ ------------ ------------ ------------ ------------- -----------
ASSETS:
Investments, at Value + .................. $ 57,615,467 $ 67,309,028 $ 13,976,176 $ 15,326,996 $ 222,690,693 $ 9,807,106
Repurchase Agreements, at Value + ........ 1,386,278 1,033,797 -- -- -- --
Cash ..................................... 117,000* -- -- -- -- --
Receivable for Investments Sold .......... -- 429,750 -- 180,338 -- --
Receivable for Fund Shares Sold .......... -- 26,056 805 -- 244,403 21,500
Accrued Income ........................... 72,385 28,011 33,775 112,888 20,269 3,138
Prepaid Expenses ......................... 20,658 20,450 21,702 21,225 30,114 19,322
Reclaims Receivable ...................... -- 428 -- -- -- --
Deferred Compensation .................... 3,480 4,086 825 912 12,905 560
Variation Margin Receivable .............. 1,690 -- -- -- -- --
Due from Adviser, net .................... -- -- 2,455 -- -- --
------------ ------------ ------------ ------------ ------------- -----------
TOTAL ASSETS ........................... 59,216,958 68,851,606 14,035,738 15,642,359 222,998,384 9,851,626
------------ ------------ ------------ ------------ ------------- -----------
LIABILITIES:
Payable for Investments Purchased ........ -- -- -- -- 940,832 86,743
Payable for Fund Shares Redeemed ......... 15,497 219,902 -- 736 126,696 --
Income Distribution Payable .............. -- -- -- -- -- --
Due to Custodian ......................... -- -- -- -- -- --
Investment Adviser Fees Payable .......... 23,204 40,197 -- 86 118,467 528
Administration Fees Payable .............. 7,389 8,675 1,751 1,938 27,402 1,189
Chief Compliance Officer Fees Payable .... 1,038 1,038 1,038 1,038 1,038 1,038
Custodian Fees Payable ................... 308 361 73 81 1,142 50
Audit Fees Payable ....................... 23,599 23,638 23,393 23,406 24,321 23,363
Deferred Compensation Payable ............ 3,480 4,086 825 912 12,905 560
Shareholder Servicing Fees Payable ....... 5,499 323 1,630 981 25,435 1,038
Transfer Agent Fees Payable .............. 4,287 5,072 7,569 1,880 34,284 1,739
Printing Fees Payable .................... 2,486 2,710 617 524 7,482 228
Trustees Fees Payable .................... 318 311 93 49 641 5
Accrued Distribution Fees ................ 1,202 625 5,049 11 55,941 856
Accrued Expenses and Other Payables ...... 3,006 3,062 2,205 2,208 4,178 1,979
------------ ------------ ------------ ------------ ------------- -----------
TOTAL LIABILITIES ...................... 91,313 310,000 44,243 33,850 1,380,764 119,316
------------ ------------ ------------ ------------ ------------- -----------
Net Assets ........................... $ 59,125,645 $ 68,541,606 $ 13,991,495 $ 15,608,509 $ 221,617,620 $ 9,732,310
============ ============ ============ ============ ============= ===========
NET ASSETS:
Paid-in Capital (unlimited authorized -
no par value) .......................... $ 85,319,652 $ 71,797,921 $ 22,955,993 $ 16,425,137 $ 170,071,694 $ 8,613,793
Undistributed Net Investment Income/
(Accumulated Net Investment Loss) ...... 54,144 (63,500) 49,869 147,525 -- --
Accumulated Net Realized Gain (Loss)
on Investments, Investments in
Affiliated Funds, Forward Foreign
Currency Contracts, Futures Contracts
and Foreign Currency Transactions ...... (24,348,182) (17,366,522) (10,230,331) (1,814,429) (3,302,491) 242,240
Net Unrealized Appreciation
(Depreciation) on Investments,
Investments in Affiliated Funds, Forward
Foreign Currency Contracts, Futures
Contracts and Foreign Currency
Transactions ........................... (1,899,969) 14,173,707 1,215,964 850,276 54,848,417 876,277
------------ ------------ ------------ ------------ ------------- -----------
Net Assets ........................... $ 59,125,645 $ 68,541,606 $ 13,991,495 $ 15,608,509 $ 221,617,620 $ 9,732,310
============ ============ ============ ============ ============= ===========
+ Cost of Investments and Repurchase
Agreements ............................. $ 60,928,498 $ 54,169,118 $ 12,760,212 $ 14,476,720 $ 167,842,276 $ 8,930,829
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 123
STATEMENTS OF ASSETS AND LIABILITIES
JULY 31, 2010
COGNITIVE
BALANCED VALUE
FUND FUND
------------ ------------
FIDUCIARY SHARES:
Net Assets ........................................................ $ 17,551,594 $ 2,230,226
Shares of beneficial interest outstanding ......................... 1,397,717 238,153
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE (A) ......... $ 12.56 $ 9.36
============ ============
CLASS A SHARES:
Net Assets ........................................................ $ 5,656,999 $ 654,681
Shares of beneficial interest outstanding ......................... 451,387 69,833
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE (A) ................... $ 12.53 $ 9.37
------------ ------------
Maximum Offering Price Per Share (B) ........................... $ 13.26 $ 9.92
============ ============
CLASS B SHARES:
Net Assets ........................................................ $ 454,644 N/A
Shares of beneficial interest outstanding ......................... 36,371 N/A
NET ASSET VALUE AND OFFERING PRICE PER SHARE (A) ..................... $ 12.50 N/A
============ ============
CLASS C SHARES:
Net Assets ........................................................ $ 510,316 $ 520,057
Shares of beneficial interest outstanding ......................... 40,950 57,082
NET ASSET VALUE AND OFFERING PRICE PER SHARE (A) ..................... $ 12.46 $ 9.11
============ ============
CLASS M SHARES:
Net Assets ........................................................ N/A $ 70,390,248
Shares of beneficial interest outstanding ......................... N/A 7,515,395
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE (A) ......... N/A $ 9.37
============ ============
N/A Not Applicable
(A) Fiduciary Class, Class A and Class M Shares of certain funds have possible
redemption and exchange fees (See Note 2 in the notes to financial
statements). Class B and Class C Shares have contingent deferred sales
charges (See Note 3 in the notes to financial statements).
(B) The sales load for the class is 5.5%.
The accompanying notes are an integral part of the financial statements.
124 HIGHMARK(R) FUNDS
GENEVA GENEVA
CORE ENHANCED EQUITY FUNDAMENTAL MID CAP SMALL CAP
EQUITY GROWTH INCOME EQUITY GROWTH GROWTH
FUND FUND FUND FUND FUND FUND
------------ ------------ ----------- ------------ ------------ -----------
FIDUCIARY SHARES:
Net Assets ................................. $ 55,593,087 $ 1,676,367 $ 9,253 $ 15,591,527 $ 19,588,342 $ 6,252,291
Shares of beneficial interest
outstanding .............................. 7,674,799 182,230 1,174 862,140 1,089,189 255,689
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE (A) ......................... $ 7.24 $ 9.20 $ 7.88 $ 18.08 $ 17.98 $ 24.45
============ ============ =========== ============ ============ ===========
CLASS A SHARES:
Net Assets ................................. $ 2,640,213 $ 2,277,231 $ 9,975,601 $ 5,224 $176,923,831 $ 3,220,168
Shares of beneficial interest
outstanding .............................. 365,387 251,513 1,264,783 290 9,870,341 132,047
NET ASSET VALUE AND REDEMPTION PRICE PER
SHARE (A) ................................... $ 7.23 $ 9.05 $ 7.89 $ 18.04 $ 17.92 $ 24.39
------------ ------------ ----------- ------------ ------------ -----------
Maximum Offering Price Per Share (B) ..... $ 7.65 $ 9.58 $ 8.35 $ 19.09 $ 18.96 $ 25.81
============ ============ =========== ============ ============ ===========
CLASS B SHARES:
Net Assets ................................. $ 451,354 N/A $ 1,812,686 N/A $ 6,209,272 N/A
Shares of beneficial interest
outstanding .............................. 63,925 N/A 229,208 N/A 377,729 N/A
NET ASSET VALUE AND OFFERING PRICE PER
SHARE (A) ................................... $ 7.06 N/A $ 7.91 N/A $ 16.44 N/A
============ ============ =========== ============ ============ ===========
CLASS C SHARES:
Net Assets ................................. $ 440,991 $ 179,645 $ 2,193,955 $ 11,758 $ 18,896,175 $ 259,851
Shares of beneficial interest
outstanding .............................. 62,727 20,324 279,475 656 1,135,666 10,723
NET ASSET VALUE AND OFFERING PRICE PER
SHARE (A) ................................... $ 7.03 $ 8.84 $ 7.85 $ 17.91 $ 16.64 $ 24.23
============ ============ =========== ============ ============ ===========
CLASS M SHARES:
Net Assets ................................. N/A $ 64,408,363 N/A N/A N/A N/A
Shares of beneficial interest
outstanding .............................. N/A 6,998,271 N/A N/A N/A N/A
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE (A) ........................ N/A $ 9.20 N/A N/A N/A N/A
============ ============ =========== ============ ============ ===========
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 125
STATEMENTS OF ASSETS AND LIABILITIES
JULY 31, 2010
INTERNATIONAL LARGE CAP
OPPORTUNITIES GROWTH
FUND FUND
--------------- --------------
ASSETS:
Investments, at Value + ................................................................ $ 218,493,966* $ 84,267,969
Repurchase Agreements, at Value + ...................................................... 16,739,039 --
Affiliated Investments, at Value ++ .................................................... -- --
Cash ................................................................................... -- --
Foreign Currency ....................................................................... 39,591** --
Receivable for Investments Sold ........................................................ 5,491,640 1,434,535
Receivable for Fund Shares Sold ........................................................ 99,836 139,135
Accrued Income ......................................................................... 278,203 587,191
Prepaid Expenses ....................................................................... 24,254 26,662
Reclaims Receivable .................................................................... 93,855 --
Deferred Compensation .................................................................. 12,862 5,066
Variation Margin Receivable ............................................................ -- --
Due from Adviser, net .................................................................. -- --
Unrealized Appreciation of Foreign Currency Contracts (1) .............................. 629,548 --
--------------- --------------
TOTAL ASSETS ........................................................................ 241,902,794 86,460,558
--------------- --------------
LIABILITIES:
Payable Upon Return of Securities Loaned ............................................... 14,559,169 --
Payable for Investments Purchased ...................................................... 4,880,953 --
Payable for Fund Shares Redeemed ....................................................... 461,287 8,748
Due to Custodian ....................................................................... 86,581 --
Investment Adviser Fees Payable ........................................................ 172,956 34,200
Administration Fees Payable ............................................................ 27,309 10,756
Chief Compliance Officer Fees Payable .................................................. 1,038 1,038
Custodian Fees Payable ................................................................. 8,366 448
Audit Fees Payable ..................................................................... 40,902 23,739
Deferred Compensation Payable .......................................................... 12,862 5,066
Shareholder Servicing Fees Payable ..................................................... 10,461 9,839
Transfer Agent Fees Payable ............................................................ 11,939 14,978
Printing Fees Payable .................................................................. 8,471 3,612
Trustees Fees Payable .................................................................. 1,068 479
Accrued Distribution Fees .............................................................. 3,008 8,780
Accrued Expenses and Other Payables .................................................... 106,970 3,207
Unrealized Depreciation on Foreign Currency Contracts (1) .............................. 283,980 --
--------------- --------------
TOTAL LIABILITIES ................................................................... 20,677,320 124,890
--------------- --------------
NET ASSETS ....................................................................... $ 221,225,474 $ 86,335,668
=============== ==============
NET ASSETS:
Paid-in Capital (unlimited authorized - no par value) .................................. $ 260,349,653 $ 131,272,485
Undistributed Net Investment Income/(Accumulated Net Investment Loss) .................. 4,220,837 961,600
Accumulated Net Realized Gain (Loss) on Investments, Investments in Affiliated Funds,
Forward Foreign Currency Contracts, Futures Contracts and Foreign Currency
Transactions ........................................................................ (72,567,657) (54,941,457)
Net Unrealized Appreciation (Depreciation) on Investments, Investments in Affiliated
Funds, Forward Foreign Currency Contracts, Futures Contracts and Foreign Currency
Transactions ........................................................................ 29,222,641 9,043,040
--------------- --------------
NET ASSETS ....................................................................... $ 221,225,474 $ 86,335,668
=============== ==============
+ Cost of Investments and Repurchase Agreements .................................... $ 206,345,932 $ 75,224,929
++ Cost of Affiliated Investments ................................................... $ -- $ --
* Includes Market Value of Securities on Loan ...................................... $ 14,013,668 $ --
** Cost of foreign currency is $39,289.
*** Represents margin deposits for future contracts.
Amounts designated as "--" are either not applicable or less than $1.00.
(1) The primary risk exposure is foreign exchange contracts (see Note 2).
The accompanying notes are an integral part of the financial statements.
126 HIGHMARK(R) FUNDS
NYSE ARCA CAPITAL
LARGE CAP TECH 100 SMALL CAP SMALL CAP VALUE GROWTH
VALUE INDEX ADVANTAGE VALUE MOMENTUM ALLOCATION
FUND FUND FUND FUND FUND FUND
------------- -------------- ------------ ------------ ------------- -------------
ASSETS:
Investments, at Value + ..... $ 121,928,571 $ 183,249,259 $ 23,300,226 $ 70,001,783 $ 303,669,195 $ 3,665,993
Repurchase Agreements, at
Value + .................. 252,140 -- 494,158 30,153,593 -- --
Affiliated Investments,
at Value ++ .............. -- -- -- -- -- 36,193,691
Cash ........................ -- -- 35,000*** -- -- --
Foreign Currency ............ -- -- -- -- -- --
Receivable for
Investments Sold ......... 1,018,884 -- 106,000 14,223 -- --
Receivable for Fund
Shares Sold .............. 139,788 157,772 -- 18,668 229,056 30,913
Accrued Income .............. 1,013,076 50,728 11,395 67,931 2,762,826 33
Prepaid Expenses ............ 28,678 29,094 15,849 27,352 30,766 22,529
Reclaims Receivable ......... -- 4,043 -- -- 21,671 --
Deferred Compensation ....... 7,439 10,880 1,377 4,089 17,934 2,327
Variation Margin
Receivable ............... -- -- 1,330 -- -- --
Due from Adviser, net ....... -- -- -- -- -- 8,767
Unrealized Appreciation
of Foreign Currency
Contracts (1) ............ -- -- -- -- -- --
------------- -------------- ------------ ------------ ------------- -------------
TOTAL ASSETS ............. 124,388,576 183,501,776 23,965,335 100,287,639 306,731,448 39,924,253
------------- -------------- ------------ ------------ ------------- -------------
LIABILITIES:
Payable Upon Return of
Securities Loaned ........ -- -- -- 29,736,848 -- --
Payable for Investments
Purchased ................ -- -- -- -- -- --
Payable for Fund Shares
Redeemed ................. 10,059 105,888 2,040 43,939 110,893 20,281
Due to Custodian ............ -- -- -- -- -- --
Investment Adviser Fees
Payable .................. 21,579 44,200 12,406 38,595 148,401 --
Administration Fees
Payable .................. 15,795 23,101 2,924 8,682 38,078 4,941
Chief Compliance Officer
Fees Payable ............. 1,038 1,038 1,038 1,038 1,038 1,038
Custodian Fees Payable ...... 658 963 122 362 1,587 206
Audit Fees Payable .......... 24,165 24,231 23,438 23,691 24,837 17,337
Deferred Compensation
Payable .................. 7,439 10,880 1,377 4,089 17,934 2,327
Shareholder Servicing
Fees Payable ............. 13,827 22,595 1,753 7,873 37,516 991
Transfer Agent Fees
Payable .................. 18,286 53,354 2,107 17,175 30,577 11,287
Printing Fees Payable ....... 7,209 7,437 915 3,016 12,555 1,541
Trustees Fees Payable ....... 891 912 103 420 1,554 177
Accrued Distribution Fees ... 8,084 49,336 125 11,245 19,332 18,041
Accrued Expenses and
Other Payables ........... 7,918 10,825 2,939 3,696 6,238 1,325
Unrealized Depreciation
on Foreign Currency
Contracts (1) ............ -- -- -- -- -- --
------------- -------------- ------------ ------------ ------------- -------------
TOTAL LIABILITIES ........ 136,948 354,760 51,287 29,900,669 450,540 79,492
------------- -------------- ------------ ------------ ------------- -------------
NET ASSETS ............ $ 124,251,628 $ 183,147,016 $ 23,914,048 $ 70,386,970 $ 306,280,908 $ 39,844,761
============= ============== ============ ============ ============= =============
NET ASSETS:
Paid-in Capital
(unlimited authorized -
no par value) ............ $ 180,280,085 $ 276,336,409 $ 31,890,383 $111,957,244 $ 301,034,133 $ 55,622,712
Undistributed Net
Investment
Income/(Accumulated Net
Investment Loss) ......... 1,102,153 -- -- 220,960 2,527,968 32,115
Accumulated Net Realized
Gain (Loss) on
Investments,
Investments in
Affiliated Funds,
Forward Foreign
Currency Contracts,
Futures Contracts and
Foreign Currency
Transactions ............. (47,387,055) (132,532,754) (10,346,176) (34,904,868) (17,585,543) (14,175,805)
Net Unrealized
Appreciation
(Depreciation) on
Investments,
Investments in
Affiliated Funds,
Forward Foreign
Currency Contracts,
Futures Contracts and
Foreign Currency
Transactions ............. (9,743,555) 39,343,361 2,369,841 (6,886,366) 20,304,350 (1,634,261)
------------- -------------- ------------ ------------ ------------- -------------
NET ASSETS ............ $ 124,251,628 $ 183,147,016 $ 23,914,048 $ 70,386,970 $ 306,280,908 $ 39,844,761
============= ============== ============ ============ ============= =============
+ Cost of Investments
and Repurchase
Agreements ......... $ 131,924,266 $ 143,905,898 $ 21,422,649 $107,041,742 $ 283,364,949 $ 3,099,818
++ Cost of Affiliated
Investments ........ $ -- $ -- $ -- $ -- $ -- $ 38,394,127
* Includes Market
Value of
Securities on
Loan ............... $ -- $ -- $ -- $ 28,643,081 $ -- $ --
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 127
STATEMENTS OF ASSETS AND LIABILITIES
JULY 31, 2010
INTERNATIONAL LARGE CAP
OPPORTUNITIES GROWTH
FUND FUND
------------- ------------
FIDUCIARY SHARES:
Net Assets .................................................. $ 79,236,673 $ 60,078,249
Shares of beneficial interest outstanding ................... 12,508,789 6,818,846
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE (A) ... $ 6.33 $ 8.81
============= ============
CLASS A SHARES:
Net Assets .................................................. $ 6,692,942 $ 19,881,394
Shares of beneficial interest outstanding ................... 1,059,383 2,300,021
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE (A) ............. $ 6.32 $ 8.64
------------- ------------
Maximum Offering Price Per Share (B) ..................... $ 6.69 $ 9.14
============= ============
CLASS B SHARES:
Net Assets .................................................. N/A $ 3,126,013
Shares of beneficial interest outstanding ................... N/A 387,372
NET ASSET VALUE AND OFFERING PRICE PER SHARE (A) ............... N/A $ 8.07
============= ============
CLASS C SHARES:
Net Assets .................................................. $ 1,974,951 $ 3,250,012
Shares of beneficial interest outstanding ................... 315,677 405,216
NET ASSET VALUE AND OFFERING PRICE PER SHARE (A) ............... $ 6.26 $ 8.02
============= ============
CLASS M SHARES:
Net Assets .................................................. $ 133,320,908 N/A
Shares of beneficial interest outstanding ................... 21,027,587 N/A
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE (A) ... $ 6.34 N/A
============= ============
N/A Not Applicable
(A) Fiduciary Class, Class A and Class M Shares of certain funds have possible
redemption and exchange fees (See Note 2 in the notes to financial
statements). Class B and Class C Shares have contingent deferred sales
charges (See Note 3 in the notes to financial statements).
(B) The sales load for the class is 5.5%.
The accompanying notes are an integral part of the financial statements.
128 HIGHMARK(R) FUNDS
NYSE ARCA CAPITAL
LARGE CAP TECH 100 SMALL CAP SMALL CAP VALUE GROWTH
VALUE INDEX ADVANTAGE VALUE MOMENTUM ALLOCATION
FUND FUND FUND FUND FUND FUND
------------ ------------- ------------ ------------ ------------- ------------
FIDUCIARY SHARES:
Net Assets ............................. $ 97,346,903 $ 311,833 $ 23,527,050 $ 32,877,799 $ 228,162,137 $ 190,266
Shares of beneficial interest
outstanding ......................... 9,476,087 12,137 1,618,612 2,801,854 16,725,372 10,416
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE (A) .................... $ 10.27 $ 25.69 $ 14.54 $ 11.73 $ 13.64 $ 18.27
============ ============= ============ ============ ============= ============
CLASS A SHARES:
Net Assets ............................. $ 22,407,204 $ 162,266,663 $ 309,823 $ 31,263,396 $ 72,131,888 $ 23,808,247
Shares of beneficial interest
outstanding ......................... 2,176,105 6,332,381 21,407 2,742,524 5,301,642 1,305,112
NET ASSET VALUE AND REDEMPTION PRICE PER
SHARE (A) .............................. $ 10.30 $ 25.62 $ 14.47 $ 11.40 $ 13.61 $ 18.24
------------ ------------- ------------ ------------ ------------- ------------
Maximum Offering Price Per Share
(B) .............................. $ 10.90 $ 27.11 $ 15.31 $ 12.06 $ 14.40 $ 19.30
============ ============= ============ ============ ============= ============
CLASS B SHARES:
Net Assets ............................. $ 1,265,133 $ 9,888,556 N/A $ 1,702,821 $ 3,438,900 N/A
Shares of beneficial interest
outstanding ......................... 125,100 423,431 N/A 158,495 258,264 N/A
NET ASSET VALUE AND OFFERING PRICE PER
SHARE (A) .............................. $ 10.11 $ 23.35 N/A $ 10.74 $ 13.32 N/A
============ ============= ============ ============ ============= ============
CLASS C SHARES:
Net Assets ............................. $ 3,232,388 $ 10,679,964 $ 77,175 $ 4,542,954 $ 2,547,983 $ 15,846,248
Shares of beneficial interest
outstanding ......................... 320,746 449,160 5,427 425,801 192,144 878,946
NET ASSET VALUE AND OFFERING PRICE PER
SHARE (A) .............................. $ 10.08 $ 23.78 $ 14.22 $ 10.67 $ 13.26 $ 18.03
============ ============= ============ ============ ============= ============
CLASS M SHARES:
Net Assets ............................. N/A N/A N/A N/A N/A N/A
Shares of beneficial interest
outstanding ......................... N/A N/A N/A N/A N/A N/A
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE (A) .................... N/A N/A N/A N/A N/A N/A
============ ============= ============ ============ ============= ============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 129
STATEMENTS OF ASSETS AND LIABILITIES
JULY 31, 2010
DIVERSIFIED GROWTH &
EQUITY INCOME
ALLOCATION ALLOCATION
FUND FUND
----------- ------------
ASSETS:
Investments, at Value + .................................................................... $ 718,299 $ 3,763,428
Affiliated Investments, at Value ++ ........................................................ 6,803,693 39,515,156
Receivable for Investments Sold ............................................................ -- --
Receivable for Fund Shares Sold ............................................................ 144 14,587
Accrued Income ............................................................................. 3 140
Prepaid Expenses ........................................................................... 9,398 21,299
Deferred Compensation ...................................................................... 442 2,528
Due from Adviser, net ...................................................................... 6,476 6,715
----------- ------------
TOTAL ASSETS ............................................................................ 7,538,455 43,323,853
----------- ------------
LIABILITIES:
Payable for Investments Purchased .......................................................... -- --
Payable for Fund Shares Redeemed ........................................................... -- 17,895
Investment Adviser Fees Payable ............................................................ -- --
Administration Fees Payable ................................................................ 938 5,368
Chief Compliance Officer Fees Payable ...................................................... 1,038 1,038
Custodian Fees Payable ..................................................................... 39 224
Audit Fees Payable ......................................................................... 17,184 17,345
Deferred Compensation Payable .............................................................. 442 2,528
Shareholder Servicing Fees Payable ......................................................... 131 1,078
Transfer Agent Fees Payable ................................................................ 3,027 7,892
Printing Fees Payable ...................................................................... 257 1,587
Trustees Fees Payable ...................................................................... 23 176
Accrued Distribution Fees .................................................................. 4,188 19,574
Accrued Expenses and Other Payables ........................................................ 901 1,332
----------- ------------
TOTAL LIABILITIES ....................................................................... 28,168 76,037
----------- ------------
NET ASSETS ........................................................................... $ 7,510,287 $ 43,247,816
=========== ============
NET ASSETS:
Paid-in Capital (unlimited authorized - no par value) ...................................... $ 8,534,338 $ 53,961,596
Undistributed Net Investment Income/(Accumulated Net Investment Loss) ...................... 6,248 62,168
Accumulated Net Realized Gain (Loss) on Investments, Investments in Affiliated Funds,
Forward Foreign Currency Contracts, Futures Contracts and Foreign Currency Transactions .. (1,855,062) (13,523,945)
Net Unrealized Appreciation (Depreciation) on Investments, Investments in Affiliated
Funds, Forward Foreign Currency Contracts, Futures Contracts and Foreign Currency
Transactions ............................................................................. 824,763 2,747,997
----------- ------------
NET ASSETS ........................................................................... $ 7,510,287 $ 43,247,816
=========== ============
+ Cost of Investments ...................................................................... $ 596,312 $ 3,175,732
++ Cost of Affiliated Investments .......................................................... $ 6,100,917 $ 37,354,855
Amounts designated as "--" are either not applicable or less than $1.00.
The accompanying notes are an integral part of the financial statements.
130 HIGHMARK(R) FUNDS
INCOME CALIFORNIA NATIONAL
PLUS INTERMEDIATE INTERMEDIATE SHORT TERM WISCONSIN
ALLOCATION BOND TAX-FREE BOND TAX-FREE BOND BOND TAX-EXEMPT
FUND FUND FUND FUND FUND FUND
----------- ------------ ------------- ------------- ------------- -------------
ASSETS:
Investments, at Value + ................ $ 1,227,877 $360,672,312 $ 205,485,060 $ 104,450,013 $ 109,376,707 $ 157,640,664
Affiliated Investments, at Value ++ .... 14,363,500 -- -- -- -- --
Receivable for Investments Sold ........ -- 275,219 -- -- 193,295 --
Receivable for Fund Shares Sold ........ 131,022 530,041 3,198,350 233,871 738,864 291,518
Accrued Income ......................... 79 3,729,009 2,572,002 1,186,105 1,050,028 2,002,255
Prepaid Expenses ....................... 20,258 29,554 13,277 30,570 15,914 7,000
Deferred Compensation .................. 913 21,885 11,783 6,246 6,598 9,531
Due from Adviser, net .................. 6,718 -- -- -- -- --
----------- ------------ ------------- ------------- ------------- -------------
TOTAL ASSETS ........................ 15,750,367 365,258,020 211,280,472 105,906,805 111,381,406 159,950,968
----------- ------------ ------------- ------------- ------------- -------------
LIABILITIES:
Payable for Investments Purchased ...... -- -- 6,905,037 -- -- --
Payable for Fund Shares Redeemed ....... 2,500 164,954 206,950 5,250 1,848 56,863
Investment Adviser Fees Payable ........ -- 147,693 36,093 12,448 29,361 41,211
Administration Fees Payable ............ 1,938 46,468 25,019 13,263 14,008 20,237
Chief Compliance Officer Fees Payable .. 1,038 1,038 1,038 1,038 1,038 1,038
Custodian Fees Payable ................. 81 1,936 1,043 553 584 843
Audit Fees Payable ..................... 17,214 27,601 26,390 26,038 26,550 26,283
Deferred Compensation Payable .......... 913 21,885 11,783 6,246 6,598 9,531
Shareholder Servicing Fees Payable ..... 409 20,864 7,855 4,326 2,284 6,821
Transfer Agent Fees Payable ............ 3,110 14,163 7,786 4,383 6,009 13,152
Printing Fees Payable .................. 470 13,276 6,431 3,771 3,324 5,894
Trustees Fees Payable .................. 39 1,632 720 469 229 775
Accrued Distribution Fees .............. 6,741 9,304 24,423 6,086 15,319 39,110
Accrued Expenses and Other Payables .... 963 8,741 6,589 4,701 5,936 9,183
----------- ------------ ------------- ------------- ------------- -------------
TOTAL LIABILITIES ................... 35,416 479,555 7,267,157 88,572 113,088 230,941
----------- ------------ ------------- ------------- ------------- -------------
NET ASSETS ....................... $15,714,951 $364,778,465 $ 204,013,315 $ 105,818,233 $ 111,268,318 $ 159,720,027
=========== ============ ============= ============= ============= =============
NET ASSETS:
Paid-in Capital (unlimited authorized -
no par value) ........................ $15,726,706 $341,586,375 $ 195,324,745 $ 100,387,789 $ 109,600,131 $ 155,150,724
Undistributed Net Investment
Income/(Accumulated Net Investment
Loss) ................................ 26,677 235,062 27,760 26,106 15,737 58,804
Accumulated Net Realized Gain (Loss) on
Investments, Investments in
Affiliated Funds, Forward Foreign
Currency Contracts, Futures Contracts
and Foreign Currency Transactions .... (1,230,146) 2,008,832 -- 14,070 (310,194) 181,311
Net Unrealized Appreciation
(Depreciation) on Investments,
Investments in Affiliated Funds,
Forward Foreign Currency Contracts,
Futures Contracts and Foreign
Currency Transactions ................ 1,191,714 20,948,196 8,660,810 5,390,268 1,962,644 4,329,188
----------- ------------ ------------- ------------- ------------- -------------
NET ASSETS ....................... $15,714,951 $364,778,465 $ 204,013,315 $ 105,818,233 $ 111,268,318 $ 159,720,027
=========== ============ ============= ============= ============= =============
+ Cost of Investments .................. $ 1,058,953 $339,724,116 $ 196,824,250 $ 99,059,745 $ 107,414,063 $ 153,311,476
++ Cost of Affiliated Investments ...... $13,340,710 $ -- -- -- -- --
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 131
STATEMENTS OF ASSETS AND LIABILITIES
JULY 31, 2010
DIVERSIFIED GROWTH &
EQUITY INCOME
ALLOCATION ALLOCATION
FUND FUND
----------- ------------
FIDUCIARY SHARES:
Net Assets ................................................... $ 497,495 $ 127,073
Shares of beneficial interest outstanding .................... 31,021 6,634
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE (A) .... $ 16.04 $ 19.15
=========== ============
CLASS A SHARES:
Net Assets ................................................... $ 2,647,318 $ 26,026,462
Shares of beneficial interest outstanding .................... 165,832 1,363,665
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE (A) .............. $ 15.96 $ 19.09
----------- ------------
Maximum Offering Price Per Share (B) ....................... $ 16.89 $ 20.20
=========== ============
CLASS B SHARES:
Net Assets ................................................... N/A N/A
Shares of beneficial interest outstanding .................... N/A N/A
NET ASSET VALUE AND OFFERING PRICE PER SHARE (A) ................ N/A N/A
=========== ============
CLASS C SHARES:
Net Assets ................................................... $ 4,365,474 $ 17,094,281
Shares of beneficial interest outstanding .................... 278,238 900,593
NET ASSET VALUE AND OFFERING PRICE PER SHARE (A) ................ $ 15.69 $ 18.98
=========== ============
N/A Not Applicable
(A) Fiduciary Class and Class A Shares of certain funds have possible
redemption and exchange fees (See Note 2 in the notes to financial
statements). Class B and Class C Shares have contingent deferred sales
charges (See Note 3 in the notes to financial statements).
(B) The sales load for the Diversified Equity Allocation Fund and Growth &
Income Allocation Fund is 5.50%. The sales load for the Income Plus
Allocation Fund is 4.50%. The sales load for the Bond Fund, California
Intermediate Tax-Free Bond Fund, National Intermediate Tax-Free Bond Fund,
Short Term Bond Fund and Wisconsin Tax-Exempt Fund is 2.25%.
Amounts designated as "--" are either not applicable or less than $1.00.
The accompanying notes are an integral part of the financial statements.
132 HIGHMARK(R) FUNDS
INCOME CALIFORNIA NATIONAL
PLUS INTERMEDIATE INTERMEDIATE SHORT TERM WISCONSIN
ALLOCATION BOND TAX-FREE BOND TAX-FREE BOND BOND TAX-EXEMPT
FUND FUND FUND FUND FUND FUND
---------- ------------ ------------- ------------- ----------- ------------
FIDUCIARY SHARES:
Net Assets .......................... $ 235,457 $330,317,720 $ 112,406,697 $ 81,120,621 $71,121,675 N/A
Shares of beneficial
interest outstanding .............. 11,926 29,014,795 10,983,620 7,064,302 7,031,067 N/A
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE
(A) ................................. $ 19.74 $ 11.38 $ 10.23 $ 11.48 $ 10.12 N/A
========== ============ ============= ============= =========== ============
CLASS A SHARES:
Net Assets .......................... $9,603,590 $ 28,951,830 $ 76,111,437 $ 22,334,709 $22,581,313 $146,664,880
Shares of beneficial
interest outstanding .............. 486,405 2,583,191 7,473,589 1,945,746 2,235,518 13,942,164
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE (A) ................. $ 19.74 $ 11.21 $ 10.18 $ 11.48 $ 10.10 $ 10.52
---------- ------------ ------------- ------------- ----------- ------------
Maximum Offering Price Per
Share (B) ....................... $ 20.67 $ 11.47 $ 10.41 $ 11.74 $ 10.33 $ 10.76
========== ============ ============= ============= =========== ============
CLASS B SHARES:
Net Assets .......................... N/A $ 1,344,589 $ 635,403 $ -- $ -- $ 2,898,482
Shares of beneficial
interest outstanding .............. N/A 120,467 62,395 -- -- 275,909
NET ASSET VALUE AND OFFERING
PRICE PER SHARE (A) ................. N/A $ 11.16 $ 10.18 N/A N/A $ 10.51
========== ============ ============= ============= =========== ============
CLASS C SHARES:
Net Assets .......................... $5,875,904 $ 4,164,326 $ 14,859,778 $ 2,362,903 $17,565,330 $ 10,156,665
Shares of beneficial
interest outstanding .............. 299,640 373,343 1,463,863 205,731 1,718,887 966,801
NET ASSET VALUE AND OFFERING
PRICE PER SHARE (A) ................. $ 19.61 $ 11.15 $ 10.15 $ 11.49 $ 10.22 $ 10.51
========== ============ ============= ============= =========== ============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 133
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JULY 31, 2010
COGNITIVE
BALANCED VALUE
FUND FUND
------------- -------------
Interest Income ............................................................. $ 320,911 $ 1,427
Dividend Income ............................................................. 347,745 1,321,948
Less: Foreign Taxes Withheld ................................................ (675) (1,133)
------------- -------------
Total Investment Income ............................................ 667,981 1,322,242
------------- -------------
Expenses:
Investment Adviser Fees .................................................. 143,292 552,259
Shareholder Servicing Fees Fiduciary Shares .............................. 44,083 6,491
Shareholder Servicing Fees Class A Shares ................................ 13,152 1,213
Shareholder Servicing Fees Class B Shares ................................ 1,411 --
Administration Fees ...................................................... 35,751 110,230
Custodian Fees ........................................................... 1,493 4,602
Trustees Fees ............................................................ 1,336 4,141
Chief Compliance Officer Fees ............................................ 7,052 7,052
Distribution Fees Class A Shares ......................................... 13,152 1,213
Distribution Fees Class B Shares ......................................... 4,234 --
Distribution Fees Class C Shares ......................................... 4,236 5,087
Registration Fees ........................................................ 58,526 28,195
Transfer Agent Fees ...................................................... 18,656 25,653
Printing Fees ............................................................ 3,278 10,090
Audit Fees ............................................................... 25,786 23,885
Legal Fees ............................................................... 2,197 6,756
Miscellaneous Fees ....................................................... 25,149 23,080
------------- -------------
Total Expenses ..................................................... 402,784 809,947
------------- -------------
Less: Waivers, Reimbursements and Reduction of Expenses
Investment Adviser Fee Waiver ......................................... (122,369) (16,859)
Shareholder Servicing Fee Waiver - Fiduciary Shares ................... (17,633) (4,421)
Shareholder Servicing Fee Waiver - Class A Shares ..................... (5,261) (485)
Reimbursement of Expenses by Adviser .................................. -- --
Reduction of Expenses by Administrator ................................ (1,083) (3,254)
------------- -------------
Total Waivers and Reduction of Expenses ..................................... (146,346) (25,019)
------------- -------------
Total Net Expenses .......................................................... 256,438 784,928
------------- -------------
Net Investment Income (Loss) ................................................ 411,543 537,314
------------- -------------
Net Realized Gain (Loss) on Investments ..................................... 957,744 10,688,626
Net Realized Gain (Loss) on Futures Contracts (1) ........................... -- --
Payment by affiliates (Note 3) .............................................. -- 11,198
Change in Unrealized Appreciation (Depreciation) on Investments ............. 1,315,614 2,288,843
Change in Unrealized Appreciation (Depreciation) on Futures Contracts (1) ... -- --
------------- -------------
Net Realized and Unrealized Gain on Investments ............................. 2,273,358 12,988,667
------------- -------------
Increase in Net Assets Resulting from Operations ............................ $ 2,684,901 $ 13,525,981
============= =============
Amounts designated as "--" are either not applicable or less than $1.00.
(1) The primary risk exposure is equity contracts (see Note 2).
The accompanying notes are an integral part of the financial statements.
134 HIGHMARK(R) FUNDS
GENEVA GENEVA
CORE ENHANCED EQUITY FUNDAMENTAL MID CAP SMALL CAP
EQUITY GROWTH INCOME EQUITY GROWTH GROWTH
FUND FUND FUND FUND FUND FUND
----------- ----------- ----------- ----------- ------------ -----------
Interest Income .................................... $ 1,664 $ 1,163 $ -- $ -- $ -- $ --
Dividend Income .................................... 1,326,712 704,159 656,577 317,414 967,222 32,164
Less: Foreign Taxes Withheld ....................... -- (19,377) (2,596) (572) -- --
----------- ----------- ----------- ----------- ------------ -----------
Total Investment Income ................... 1,328,376 685,945 653,981 316,842 967,222 32,164
----------- ----------- ----------- ----------- ------------ -----------
Expenses:
Investment Adviser Fees ......................... 383,372 530,415 86,060 85,609 1,510,568 67,395
Shareholder Servicing Fees Fiduciary Shares ..... 150,626 3,553 69 35,634 25,417 10,322
Shareholder Servicing Fees Class A Shares ....... 6,106 4,024 27,393 14 416,830 6,181
Shareholder Servicing Fees Class B Shares ....... 1,866 -- 5,432 -- 17,621 --
Administration Fees ............................. 95,643 105,869 23,420 21,362 301,545 10,094
Custodian Fees .................................. 4,313 4,441 870 892 11,635 422
Trustees Fees ................................... 3,712 4,049 883 730 10,394 282
Chief Compliance Officer Fees ................... 7,052 7,052 5,968 7,052 5,968 5,968
Distribution Fees Class A Shares ................ 6,106 4,024 27,393 14 416,830 6,181
Distribution Fees Class B Shares ................ 5,597 -- 16,296 -- 52,864 --
Distribution Fees Class C Shares ................ 4,561 1,945 24,895 91 174,620 1,383
Registration Fees ............................... 42,570 27,998 52,689 37,152 57,604 17,933
Transfer Agent Fees ............................. 22,106 26,097 26,608 8,322 135,595 7,546
Printing Fees ................................... 9,103 9,633 3,790 1,856 43,458 752
Audit Fees ...................................... 23,862 23,893 25,422 23,410 34,074 23,363
Legal Fees ...................................... 5,925 6,342 1,699 1,324 20,478 573
Miscellaneous Fees .............................. 19,071 19,361 15,498 15,617 20,356 16,000
----------- ----------- ----------- ----------- ------------ -----------
Total Expenses ............................ 791,591 778,696 344,385 239,079 3,255,857 174,395
----------- ----------- ----------- ----------- ------------ -----------
Less: Waivers, Reimbursements and Reduction of
Expenses
Investment Adviser Fee Waiver ................ (81,782) (31,159) (86,060) (85,609) (168,031) (67,395)
Shareholder Servicing Fee Waiver - Fiduciary
Shares ..................................... (83,102) (3,230) (28) (25,582) (11,994) (4,385)
Shareholder Servicing Fee Waiver - Class A
Shares ..................................... (2,442) (1,610) (10,957) (5) (166,732) (2,472)
Reimbursement of Expenses by Adviser ......... -- -- (38,888) (27) -- (63)
Reduction of Expenses by Administrator ....... (2,637) (3,096) (625) (691) (9,779) (424)
----------- ----------- ----------- ----------- ------------ -----------
Total Waivers and Reduction of Expenses ............ (169,963) (39,095) (136,558) (111,914) (356,536) (74,739)
----------- ----------- ----------- ----------- ------------ -----------
Total Net Expenses ................................. 621,628 739,601 207,827 127,165 2,899,321 99,656
----------- ----------- ----------- ----------- ------------ -----------
Net Investment Income (Loss) ....................... 706,748 (53,656) 446,154 189,677 (1,932,099) (67,492)
----------- ----------- ----------- ----------- ------------ -----------
Net Realized Gain (Loss) on Investments ............ 1,179,913 4,306,876 (541,787) 182,285 10,973,440 309,993
Net Realized Gain (Loss) on Futures
Contracts (1) ................................... 124,966 -- -- -- -- --
Payment by affiliates (Note 3) ..................... -- -- -- -- -- --
Change in Unrealized Appreciation (Depreciation)
on Investments ................................... 6,966,952 4,891,765 2,551,009 1,038,585 25,160,888 716,135
Change in Unrealized Appreciation
(Depreciation) on Futures Contracts (1) .......... 3,139 -- -- -- -- --
----------- ----------- ----------- ----------- ------------ -----------
Net Realized and Unrealized Gain on Investments .... 8,274,970 9,198,641 2,009,222 1,220,870 36,134,328 1,026,128
----------- ----------- ----------- ----------- ------------ -----------
Increase in Net Assets Resulting from Operations ... $ 8,981,718 $ 9,144,985 $ 2,455,376 $ 1,410,547 $ 34,202,229 $ 958,636
=========== =========== =========== =========== ============ ===========
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 135
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JULY 31, 2010
INTERNATIONAL LARGE CAP
OPPORTUNITIES GROWTH
FUND FUND
------------- -------------
Interest Income ............................................................................. $ 6,423 $ --
Income from Investments in Affiliated Funds ................................................. -- --
Securities Lending Income ................................................................... 197,532 --
Dividend Income ............................................................................. 6,708,760 2,008,134
Less: Foreign Taxes Withheld ................................................................ (530,442) (1,308)
------------- -------------
Total Investment Income ............................................................... 6,382,273 2,006,826
------------- -------------
Expenses:
Investment Adviser Fees .................................................................. 2,105,767 560,723
Shareholder Servicing Fees Fiduciary Shares .............................................. 183,098 163,050
Shareholder Servicing Fees Class A Shares ................................................ 24,357 51,148
Shareholder Servicing Fees Class B Shares ................................................ -- 10,920
Administration Fees ...................................................................... 331,799 139,887
Custodian Fees ........................................................................... 104,856 5,936
Trustees Fees ............................................................................ 12,537 5,411
Chief Compliance Officer Fees ............................................................ 7,052 7,052
Distribution Fees Class A Shares ......................................................... 24,357 51,148
Distribution Fees Class B Shares ......................................................... -- 32,760
Distribution Fees Class C Shares ......................................................... 22,146 34,063
Registration Fees ........................................................................ 41,303 44,276
License Fees ............................................................................. -- --
Transfer Agent Fees ...................................................................... 65,549 70,495
Printing Fees ............................................................................ 30,842 13,558
Audit Fees ............................................................................... 34,175 24,187
Legal Fees ............................................................................... 20,570 7,570
Miscellaneous Fees ....................................................................... 84,691 19,336
------------- -------------
Total Expenses ........................................................................ 3,093,099 1,241,520
------------- -------------
Less: Waivers, Reimbursements and Reduction of Expenses
Investment Adviser Fee Waiver ......................................................... -- (97,377)
Shareholder Servicing Fee Waiver - Fiduciary Shares ................................... (66,260) (76,285)
Shareholder Servicing Fee Waiver - Class A Shares ..................................... (16,848) (20,459)
Reimbursement of Expenses by Adviser .................................................. -- --
Reduction of Expenses by Administrator ................................................ (9,745) (3,838)
------------- -------------
Total Waivers and Reduction of Expenses ........................................................ (92,853) (197,959)
------------- -------------
Total Net Expenses ............................................................................. 3,000,246 1,043,561
------------- -------------
Net Investment Income (Loss) ................................................................... 3,382,027 963,265
------------- -------------
Net Realized Gain (Loss) on Investments ........................................................ 19,796,126 3,597,327
Net Realized Gain (Loss) on Investments in Affiliated Funds .................................... -- --
Net Realized Gain (Loss) on Foreign Currency Contracts (1) ..................................... 910,833 --
Net Realized Gain (Loss) on Foreign Currency Transactions ...................................... (250,440) --
Net Realized Gain (Loss) on Futures Contracts (2) .............................................. -- --
Change in Unrealized Appreciation (Depreciation) on Investments ................................ (6,639,994) 6,921,645
Change in Unrealized Appreciation (Depreciation) on Investments in Affiliated Funds ............ -- --
Change in Unrealized Appreciation (Depreciation) on Foreign Currency Transactions .............. (14,740) --
Change in Unrealized Appreciation (Depreciation) on Foreign Currency Contracts (1) ............. 338,766 --
Change in Unrealized Appreciation (Depreciation) on Futures Contracts (2) ...................... -- --
------------- -------------
Net Realized and Unrealized Gain on Investments ................................................ 14,140,551 10,518,972
------------- -------------
Increase in Net Assets Resulting from Operations ............................................... $ 17,522,578 $ 11,482,237
============= =============
Amounts designated as "--" are either not applicable or less than $1.00.
(1) The primary risk exposure is foreign exchange contracts (see Note 2).
(2) The primary risk exposure is equity contracts (see Note 2).
The accompanying notes are an integral part of the financial statements.
136 HIGHMARK(R) FUNDS
NYSE ARCA CAPITAL
LARGE CAP TECH 100 SMALL CAP SMALL CAP VALUE GROWTH
VALUE INDEX ADVANTAGE VALUE MOMENTUM ALLOCATION
FUND FUND FUND FUND FUND FUND
----------- ----------- ---------- ----------- ----------- -----------
Interest Income ................................... $ 3,080 $ -- $ 1,070 $ 1,275 $ -- $ --
Income from Investments in Affiliated Funds ....... -- -- -- -- -- 440,207
Securities Lending Income ......................... -- -- -- 33,524 -- --
Dividend Income ................................... 5,081,873 1,628,058 235,725 1,746,032 9,703,864 87,459
Less: Foreign Taxes Withheld ...................... (19,580) (35,514) -- (745) (72,176) --
----------- ----------- ---------- ----------- ----------- -----------
Total Investment Income ..................... 5,065,373 1,592,544 236,795 1,780,086 9,631,688 527,666
----------- ----------- ---------- ----------- ----------- -----------
Expenses:
Investment Adviser Fees ........................ 1,076,407 681,361 226,761 776,121 1,956,442 70,614
Shareholder Servicing Fees Fiduciary Shares .... 367,546 277 58,719 83,597 602,109 526
Shareholder Servicing Fees Class A Shares ...... 67,233 425,237 744 91,154 193,794 61,812
Shareholder Servicing Fees Class B Shares ...... 4,312 31,596 -- 6,614 12,104 --
Administration Fees ............................ 268,518 290,083 35,732 116,169 488,105 60,404
Custodian Fees ................................. 43,868 19,908 1,628 8,484 23,733 2,848
Trustees Fees .................................. 10,826 10,576 1,334 4,443 18,675 2,257
Chief Compliance Officer Fees .................. 7,052 5,968 7,052 7,052 7,052 7,052
Distribution Fees Class A Shares ............... 67,233 425,237 744 91,154 193,794 61,812
Distribution Fees Class B Shares ............... 12,936 94,789 -- 19,844 36,311 --
Distribution Fees Class C Shares ............... 37,648 109,427 843 50,659 28,711 154,155
Registration Fees .............................. 45,062 47,830 36,979 43,236 46,169 34,870
License Fees ................................... -- 77,515 -- -- -- --
Transfer Agent Fees ............................ 89,413 192,313 10,030 78,604 153,897 51,285
Printing Fees .................................. 26,713 43,909 3,305 10,681 46,834 5,553
Audit Fees ..................................... 25,074 34,346 23,514 23,979 27,288 17,492
Legal Fees ..................................... 16,200 20,108 2,222 7,065 29,113 3,691
Miscellaneous Fees ............................. 21,383 21,977 19,833 22,085 22,175 13,089
----------- ----------- ---------- ----------- ----------- -----------
Total Expenses .............................. 2,187,424 2,532,457 429,440 1,440,941 3,886,306 547,460
----------- ----------- ---------- ----------- ----------- -----------
Less: Waivers, Reimbursements and Reduction of
Expenses
Investment Adviser Fee Waiver ............... (132,086) (119,697) (80,184) (236,761) (28,766) (70,614)
Shareholder Servicing Fee Waiver -
Fiduciary Shares ......................... (165,578) (111) (36,827) (37,038) (245,532) (421)
Shareholder Servicing Fee Waiver -
Class A Shares ........................... (26,893) (170,095) (298) (36,461) (76,644) (49,449)
Reimbursement of Expenses by Adviser ........ -- -- -- -- -- (85,814)
Reduction of Expenses by Administrator ...... (5,637) (8,244) (1,043) (3,098) (13,589) (1,763)
----------- ----------- ---------- ----------- ----------- -----------
Total Waivers and Reduction of Expenses .............. (330,194) (298,147) (118,352) (313,358) (364,531) (208,061)
----------- ----------- ---------- ----------- ----------- -----------
Total Net Expenses ................................... 1,857,230 2,234,310 311,088 1,127,583 3,521,775 339,399
----------- ----------- ---------- ----------- ----------- -----------
Net Investment Income (Loss) ......................... 3,208,143 (641,766) (74,293) 652,503 6,109,913 188,267
----------- ----------- ---------- ----------- ----------- -----------
Net Realized Gain (Loss) on Investments .............. 17,638,380 5,095,461 1,843,553 (7,526,496) 9,071,214 (75,379)
Net Realized Gain (Loss) on Investments in
Affiliated Funds .................................. -- -- -- -- -- (3,472,370)
Net Realized Gain (Loss) on Foreign Currency
Contracts (1) ..................................... -- -- -- -- -- --
Net Realized Gain (Loss) on Foreign Currency
Transactions ...................................... (4,820) -- -- -- (47) --
Net Realized Gain (Loss) on Futures Contracts (2) .... -- -- 82,450 -- -- --
Change in Unrealized Appreciation (Depreciation) on
Investments ....................................... 501,588 24,552,907 3,300,654 24,817,284 26,098,521 770,825
Change in Unrealized Appreciation (Depreciation) on
Investments in Affiliated Funds ................... -- -- -- -- -- 7,711,820
Change in Unrealized Appreciation (Depreciation) on
Foreign Currency Transactions ..................... -- -- -- -- 104 --
Change in Unrealized Appreciation (Depreciation) on
Foreign Currency Contracts (1) .................... -- -- -- -- -- --
Change in Unrealized Appreciation (Depreciation) on
Futures Contracts (2) ............................. -- -- (29,824) -- -- --
----------- ----------- ---------- ----------- ----------- -----------
Net Realized and Unrealized Gain on Investments ...... 18,135,148 29,648,368 5,196,833 17,290,788 35,169,792 4,934,896
----------- ----------- ---------- ----------- ----------- -----------
Increase in Net Assets Resulting from Operations ..... $21,343,291 $29,006,602 $5,122,540 $17,943,291 $41,279,705 $ 5,123,163
=========== =========== ========== =========== =========== ===========
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 137
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JULY 31, 2010
DIVERSIFIED GROWTH &
EQUITY INCOME
ALLOCATION ALLOCATION
FUND FUND
------------- -------------
Interest Income ............................................................................. $ -- $ --
Income from Investments in Affiliated Funds ................................................. 65,412 634,245
Dividend Income ............................................................................. 8,530 127,720
------------- -------------
Total Investment Income ............................................................... 73,942 761,965
------------- -------------
Expenses:
Investment Adviser Fees .................................................................. 12,032 73,395
Shareholder Servicing Fees Fiduciary Shares .............................................. 446 308
Shareholder Servicing Fees Class A Shares ................................................ 6,705 61,936
Shareholder Servicing Fees Class B Shares ................................................ -- --
Administration Fees ...................................................................... 10,294 62,785
Custodian Fees ........................................................................... 453 2,653
Trustees Fees ............................................................................ 369 2,314
Chief Compliance Officer Fees ............................................................ 7,052 7,052
Distribution Fees Class A Shares ......................................................... 6,705 61,936
Distribution Fees Class B Shares ......................................................... -- --
Distribution Fees Class C Shares ......................................................... 40,150 170,422
Registration Fees ........................................................................ 32,664 34,183
Transfer Agent Fees ...................................................................... 13,043 36,856
Printing Fees ............................................................................ 935 5,685
Audit Fees ............................................................................... 17,205 14,284
Legal Fees ............................................................................... 649 3,803
Miscellaneous Fees ....................................................................... 11,831 13,143
------------- -------------
Total Expenses ........................................................................ 160,533 550,755
------------- -------------
Less: Waivers, Reimbursements and Reduction of Expenses
Investment Adviser Fee Waiver ......................................................... (12,032) (73,395)
Shareholder Servicing Fee Waiver - Fiduciary Shares ................................... (357) (247)
Shareholder Servicing Fee Waiver - Class A Shares ..................................... (5,364) (49,549)
Reimbursement of Expenses by Adviser .................................................. (75,253) (65,508)
Reduction of Expenses by Administrator ................................................ (335) (1,915)
------------- -------------
Total Waivers and Reduction of Expenses ........................................................ (93,341) (190,614)
------------- -------------
Total Net Expenses ............................................................................. 67,192 360,141
------------- -------------
Net Investment Income .......................................................................... 6,750 401,824
------------- -------------
Net Realized Gain on Investments ............................................................... 29,065 167,025
Net Realized Gain (Loss) on Investments in Affiliated Funds .................................... (329,249) (1,750,298)
Change in Unrealized Appreciation (Depreciation) on Investments ................................ 94,592 453,596
Change in Unrealized Appreciation (Depreciation) on Investments in Affiliated Funds ............ 995,270 5,389,241
------------- -------------
Net Realized and Unrealized Gain on Investments ................................................ 789,678 4,259,564
------------- -------------
Increase in Net Assets Resulting from Operations ............................................... $ 796,428 $ 4,661,388
============= =============
Amounts designated as "--" are either not applicable or less than $1.00.
The accompanying notes are an integral part of the financial statements.
138 HIGHMARK(R) FUNDS
INCOME CALIFORNIA NATIONAL
PLUS INTERMEDIATE INTERMEDIATE SHORT TERM WISCONSIN
ALLOCATION BOND TAX-FREE BOND TAX-FREE BOND BOND TAX-EXEMPT
FUND FUND FUND FUND FUND FUND
---------- ----------- ------------- ------------- ---------- -----------
Interest Income ................................ $ -- $17,490,029 $ 6,482,989 $ 3,484,632 $3,072,555 $ 6,727,285
Income from Investments in Affiliated Funds .... 269,728 -- -- -- -- --
Dividend Income ................................ 57,453 19,106 6,745 2,563 12,978 2,031
---------- ----------- ------------- ------------- ---------- -----------
Total Investment Income .................. 327,181 17,509,135 6,489,734 3,487,195 3,085,533 6,729,316
---------- ----------- ------------- ------------- ---------- -----------
Expenses:
Investment Adviser Fees ..................... 22,756 1,749,141 864,099 497,801 370,945 773,361
Shareholder Servicing Fees Fiduciary
Shares ................................... 553 798,846 258,933 191,225 162,034 --
Shareholder Servicing Fees Class A Shares ... 19,911 64,286 146,627 55,804 44,063 360,168
Shareholder Servicing Fees Class B Shares ... -- 5,112 2,753 -- -- 7,580
Administration Fees ......................... 19,471 523,697 258,725 149,045 138,863 231,537
Custodian Fees .............................. 816 21,864 10,801 6,223 5,796 8,275
Trustees Fees ............................... 671 19,431 9,403 5,626 4,713 8,303
Chief Compliance Officer Fees ............... 7,052 7,052 7,052 7,052 7,052 5,968
Distribution Fees Class A Shares ............ 19,911 64,286 146,627 55,804 44,063 360,168
Distribution Fees Class B Shares ............ -- 15,335 8,260 -- -- 22,740
Distribution Fees Class C Shares ............ 48,178 18,981 71,211 5,615 77,229 56,797
Registration Fees ........................... 34,026 46,655 31,172 45,738 35,325 11,157
Transfer Agent Fees ......................... 13,971 87,225 46,886 25,976 34,091 52,043
Printing Fees ............................... 1,701 48,344 23,581 14,096 12,046 33,643
Audit Fees .................................. 17,249 28,582 26,816 26,318 26,795 35,256
Legal Fees .................................. 1,206 32,234 16,263 9,566 8,636 15,960
Miscellaneous Fees .......................... 11,995 47,947 41,751 32,793 40,509 50,212
---------- ----------- ------------- ------------- ---------- -----------
Total Expenses ........................... 219,467 3,579,018 1,970,960 1,128,682 1,012,160 2,033,168
---------- ----------- ------------- ------------- ---------- -----------
Less: Waivers, Reimbursements and Reduction of
Expenses
Investment Adviser Fee Waiver ............ (22,756) (105,449) (491,521) (354,003) (87,953) (290,460)
Shareholder Servicing Fee Waiver -
Fiduciary Shares ...................... (443) (584,592) (207,146) (152,980) (148,475) --
Shareholder Servicing Fee Waiver -
Class A Shares ........................ (15,929) (46,286) (117,301) (44,643) (35,251) (288,135)
Reimbursement of Expenses by Adviser ..... (71,706) -- -- -- -- --
Reduction of Expenses by Administrator ... (692) (16,583) (8,928) (4,733) (4,999) (7,222)
---------- ----------- ------------- ------------- ---------- -----------
Total Waivers and Reduction of Expenses ........... (111,526) (752,910) (824,896) (556,359) (276,678) (585,817)
---------- ----------- ------------- ------------- ---------- -----------
Total Net Expenses ................................ 107,941 2,826,108 1,146,064 572,323 735,482 1,447,351
---------- ----------- ------------- ------------- ---------- -----------
Net Investment Income ............................. 219,240 14,683,027 5,343,670 2,914,872 2,350,051 5,281,965
---------- ----------- ------------- ------------- ---------- -----------
Net Realized Gain on Investments .................. 35,848 4,420,896 34 10,186 122,909 396,712
Net Realized Gain (Loss) on Investments in
Affiliated Funds ............................... 430,658 -- -- -- -- --
Change in Unrealized Appreciation (Depreciation)
on Investments ................................. 97,572 15,381,721 3,719,978 2,398,839 1,031,230 5,855,281
Change in Unrealized Appreciation (Depreciation)
on Investments in Affiliated Funds ............. 331,977 -- -- -- -- --
---------- ----------- ------------- ------------- ---------- -----------
Net Realized and Unrealized Gain on Investments ... 896,055 19,802,617 3,720,012 2,409,025 1,154,139 6,251,993
---------- ----------- ------------- ------------- ---------- -----------
Increase in Net Assets Resulting from Operations .. $1,115,295 $34,485,644 $ 9,063,682 $ 5,323,897 $3,504,190 $11,533,958
========== =========== ============= ============= ========== ===========
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 139
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS OR PERIODS ENDED JULY 31, 2010 (UNLESS OTHERWISE INDICATED)
BALANCED COGNITIVE VALUE CORE EQUITY
FUND FUND FUND
------------------------ ------------------------- --------------------------
2010 2009 2010 2009 2010 2009
------------------------ ------------------------- --------------------------
Investment Activities:
Net Investment Income (Loss) .................. $ 411,543 $ 439,241 $ 537,314 $ 797,019 $ 706,748 $ 1,340,741
Net Realized Gain (Loss) on Investments,
Affiliated Funds, Foreign Currency
Transactions, Written Option Contracts,
Futures Contracts, Payments from
Affiliates and Capital Gains Distributions
Received ................................... 957,744 (3,523,227) 10,699,824 (29,319,054) 1,304,879 (16,649,262)
Change in Unrealized Appreciation
(Depreciation) on Investments, Affiliated
Funds, Foreign Currency Transactions,
Foreign Currency Contracts, Written
Options and Futures Contracts .............. 1,315,614 199,547 2,288,843 4,841,815 6,970,091 (3,771,715)
----------- ----------- ----------- ------------ ------------ ------------
Net Increase (Decrease) in Net Assets
Resulting From Operations .................. 2,684,901 (2,884,439) 13,525,981 (23,680,220) 8,981,718 (19,080,236)
----------- ----------- ----------- ------------ ------------ ------------
Dividends and Distributions to Shareholders:
Net Investment Income:
Fiduciary Shares ........................... (244,672) (344,488) (25,991) (20,119) (674,084) (1,249,120)
Class A Shares ............................. (58,773) (82,167) (2,842) (615) (20,034) (40,354)
Class B Shares ............................. (2,575) (9,533) -- -- (1,754) (13,366)
Class C Shares ............................. (2,064) (3,808) (1,244) (1,252) (1,208) (7,995)
Class M Shares ............................. -- -- (584,923) (815,928) -- --
Class R Shares ............................. -- -- -- -- -- --
Capital Gains:
Class A Shares ............................. -- -- -- -- -- --
Class B Shares ............................. -- -- -- -- -- --
Class C Shares ............................. -- -- -- -- -- --
Class R Shares ............................. -- -- -- -- -- --
Return of Capital:
Class A Shares ............................. -- -- -- -- -- --
Class B Shares ............................. -- -- -- -- -- --
Class C Shares ............................. -- -- -- -- -- --
Class R Shares ............................. -- -- -- -- -- --
----------- ----------- ----------- ------------ ------------ ------------
Total Dividends and Distributions ....... (308,084) (439,996) (615,000) (837,914) (697,080) (1,310,835)
----------- ----------- ----------- ------------ ------------ ------------
Net Increase (Decrease) in Net Assets From:
Share Transactions (4) ..................... (394,912) (4,278,215) (9,409,888) 588,081 (12,962,338) (17,614,305)
Redemption Fees ............................ -- -- 7 61 -- --
Fair Funds Settlement (5) .................. -- 23,977 -- -- -- --
----------- ----------- ----------- ------------ ------------ ------------
Total Increase (Decrease) in Net
Assets ............................... 1,981,905 (7,578,673) 3,501,100 (23,929,992) (4,677,700) (38,005,376)
----------- ----------- ----------- ------------ ------------ ------------
Net Assets:
Beginning of Period ........................... 22,191,648 29,770,321 70,294,112 94,224,104 63,803,345 101,808,721
----------- ----------- ----------- ------------ ------------ ------------
End of Period ................................. $24,173,553 $22,191,648 $73,795,212 $ 70,294,112 $ 59,125,645 $ 63,803,345
----------- ----------- ----------- ------------ ------------ ------------
Undistributed Net Investment Income/(Accumulated
Net Investment Loss) .......................... $ 119,649 $ 16,266 $ 216,682 $ 293,873 $ 54,144 $ 44,476
=========== =========== =========== ============ ============ ============
Amounts designated as "--" are either not applicable or less than $1.00.
(1) For the nine months ended July 31, 2009, (see Note 9 in the notes to
financial statements for details of the Reorganization.)
(2) For the year ended October 31.
(3) Commenced operations on August 1, 2008.
(4) For details on share transaction by class, see statements of changes in
net assets - capital stock activity on pages 148 - 161.
(5) The funds were recipients of a portion of a distribution from a Fair Fund
established by the United States Securities and Exchange Commission. The
proceeds received were part of the Millennium Partners, L.P. and Bear,
Stearns & Co., Inc. settlements.
The accompanying notes are an integral part of the financial statements.
140 HIGHMARK(R) FUNDS
ENHANCED GROWTH EQUITY INCOME
FUND FUND
-------------------------- ----------------------------------------
2010 2009 2010 2009(1) 2008(2)
-------------------------- ----------------------------------------
Investment Activities:
Net Investment Income (Loss) ........................... $ (53,656) $ 108,270 $ 446,154 $ 359,776 $ 839,661
Net Realized Gain (Loss) on Investments, Affiliated
Funds, Foreign Currency Transactions, Written
Option Contracts, Futures Contracts, Payments from
Affiliates and Capital Gains Distributions
Received ............................................ 4,306,876 (17,723,607) (541,787) (4,241,546) (5,575,131)
Change in Unrealized Appreciation (Depreciation) on
Investments, Affiliated Funds, Foreign Currency
Transactions, Foreign Currency Contracts, Written
Options and Futures Contracts ....................... 4,891,765 (6,537,074) 2,551,009 3,023,146 (8,101,527)
----------- ------------ ----------- ----------- ------------
Net Increase (Decrease) in Net Assets Resulting From
Operations .......................................... 9,144,985 (24,152,411) 2,455,376 (858,624) (12,836,997)
----------- ------------ ----------- ----------- ------------
Dividends and Distributions to Shareholders:
Net Investment Income:
Fiduciary Shares .................................... (779) -- (592) -- --
Class A Shares ...................................... (160) -- (273,829) (272,818) (559,301)
Class B Shares ...................................... -- -- (39,506) (40,305) (89,338)
Class C Shares ...................................... (2) -- (45,525) (55,620) (113,783)
Class M Shares ...................................... (108,244) -- -- -- --
Class R Shares ...................................... -- -- -- (2,358) (3,287)
Capital Gains:
Class A Shares ...................................... -- -- -- -- (758,035)
Class B Shares ...................................... -- -- -- -- (245,075)
Class C Shares ...................................... -- -- -- -- (209,995)
Class R Shares ...................................... -- -- -- -- (3,462)
Return of Capital:
Class A Shares ...................................... -- -- -- (9,429) --
Class B Shares ...................................... -- -- -- (1,393) --
Class C Shares ...................................... -- -- -- (1,922) --
Class R Shares ...................................... -- -- -- (82) --
----------- ------------ ----------- ----------- ------------
Total Dividends and Distributions ................ (109,185) -- (359,452) (383,927) (1,982,276)
----------- ------------ ----------- ----------- ------------
Net Increase (Decrease) in Net Assets From:
Share Transactions (4) .............................. (9,354,852) (32,007,883) (5,146,256) (2,284,239) (9,478,939)
Redemption Fees ..................................... -- -- -- -- --
Fair Funds Settlement (5) ........................... -- -- -- -- --
----------- ------------ ----------- ----------- ------------
Total Increase (Decrease) in Net Assets .......... (319,052) (56,160,294) (3,050,332) (3,526,790) (24,298,212)
----------- ------------ ----------- ----------- ------------
Net Assets:
Beginning of Period .................................... 68,860,658 125,020,952 17,041,827 20,568,617 44,866,829
----------- ------------ ----------- ----------- ------------
End of Period .......................................... $68,541,606 $ 68,860,658 $13,991,495 $17,041,827 $ 20,568,617
----------- ------------ ----------- ----------- ------------
Undistributed Net Investment Income/(Accumulated Net
Investment Loss) ....................................... $ (63,500) $ (1,056) $ 49,869 $ -- $ --
=========== ============ =========== =========== ============
FUNDAMENTAL EQUITY GENEVA MID CAP GROWTH
FUND FUND
------------------------- ------------------------------------------
2010 2009(3) 2010 2009(1) 2008(2)
------------------------- ------------------------------------------
Investment Activities:
Net Investment Income (Loss) .......................... $ 189,677 $ 90,317 $ (1,932,099) $ (1,316,380) $ (2,219,011)
Net Realized Gain (Loss) on Investments, Affiliated
Funds, Foreign Currency Transactions, Written
Option Contracts, Futures Contracts, Payments from
Affiliates and Capital Gains Distributions
Received ........................................... 182,285 (1,996,714) 10,973,440 (4,216,354) (9,769,687)
Change in Unrealized Appreciation (Depreciation) on
Investments, Affiliated Funds, Foreign Currency
Transactions, Foreign Currency Contracts, Written
Options and Futures Contracts ...................... 1,038,585 (188,309) 25,160,888 22,526,478 (71,809,660)
----------- ----------- ------------ ------------ ------------
Net Increase (Decrease) in Net Assets Resulting From
Operations ......................................... 1,410,547 (2,094,706) 34,202,229 16,993,744 (83,798,358)
----------- ----------- ------------ ------------ ------------
Dividends and Distributions to Shareholders:
Net Investment Income:
Fiduciary Shares ................................... (83,773) (49,156) -- -- --
Class A Shares ..................................... (21) -- -- -- --
Class B Shares ..................................... -- -- -- -- --
Class C Shares ..................................... (19) -- -- -- --
Class M Shares ..................................... -- -- -- -- --
Class R Shares ..................................... -- -- -- -- --
Capital Gains:
Class A Shares ..................................... -- -- -- -- (11,149,169)
Class B Shares ..................................... -- -- -- -- (977,184)
Class C Shares ..................................... -- -- -- -- (1,222,187)
Class R Shares ..................................... -- -- -- -- (77,459)
Return of Capital:
Class A Shares ..................................... -- -- -- -- --
Class B Shares ..................................... -- -- -- -- --
Class C Shares ..................................... -- -- -- -- --
Class R Shares ..................................... -- -- -- -- --
----------- ----------- ------------ ------------ ------------
Total Dividends and Distributions ............. (83,813) (49,156) -- -- (13,425,999)
----------- ----------- ------------ ------------ ------------
Net Increase (Decrease) in Net Assets From:
Share Transactions (4) ............................. 2,829,031 13,596,606 15,157,990 (651,656) 646,829
Redemption Fees .................................... -- -- -- -- --
Fair Funds Settlement (5) .......................... -- -- -- -- --
----------- ----------- ------------ ------------ ------------
Total Increase (Decrease) in Net Assets ....... 4,155,765 11,452,744 49,360,219 16,342,088 (96,577,528)
----------- ----------- ------------ ------------ ------------
Net Assets:
Beginning of Period ................................... 11,452,744 -- 172,257,401 155,915,313 252,492,841
----------- ----------- ------------ ------------ ------------
End of Period ......................................... $15,608,509 $11,452,744 $221,617,620 $172,257,401 $155,915,313
----------- ----------- ------------ ------------ ------------
Undistributed Net Investment Income/(Accumulated Net
Investment Loss) ...................................... $ 147,525 $ 41,661 $ -- $ -- $ --
=========== =========== ============ ============ ============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 141
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS OR PERIODS ENDED JULY 31, 2010 (UNLESS OTHERWISE INDICATED)
GENEVA SMALL
CAP GROWTH INTERNATIONAL OPPORTUNITIES LARGE CAP GROWTH
FUND FUND FUND
------------------------ ---------------------------- --------------------------
2010 2009(1) 2010 2009 2010 2009
------------------------ ---------------------------- --------------------------
Investment Activities:
Net Investment Income (Loss) ............. $ (67,492) $ (3,545) $ 3,382,027 $ 4,522,369 $ 963,265 $ 734,270
Net Realized Gain (Loss) on Investments,
Affiliated Funds, Foreign Currency
Transactions, Written Option Contracts,
Futures Contracts, Payments from
Affiliates and Capital Gains
Distributions Received ................ 309,993 (2,286) 20,456,519 (88,771,528) 3,597,327 (14,084,974)
Change in Unrealized
Appreciation (Depreciation) on
Investments, Affiliated Funds, Foreign
Currency Transactions, Foreign Currency
Contracts, Written Options and Futures
Contracts ............................. 716,135 160,142 (6,315,968) (14,939,752) 6,921,645 (1,263,716)*
----------- ----------- ------------- ------------- ------------ ------------
Net Increase (Decrease) in Net Assets
Resulting From Operations ................. 958,636 154,311 17,522,578 (99,188,911) 11,482,237 (14,614,420)
----------- ----------- ------------- ------------- ------------ ------------
Dividends and Distributions to Shareholders:
Net Investment Income:
Fiduciary Shares ...................... -- -- (1,712,157) (1,194,263) (528,202) (457,392)
Class A Shares ........................ -- -- (240,267) (170,735) (165,268) (27,979)
Class B Shares ........................ -- -- -- -- -- --
Class C Shares ........................ -- -- (31,067) (26,867) (20,349) --
Class M Shares ........................ -- -- (3,358,353) (2,826,646) -- --
Capital Gains:
Fiduciary Shares ...................... -- -- -- (1,583,393) -- --
Class A Shares ........................ -- -- -- (263,209) -- --
Class B Shares ........................ -- -- -- -- -- --
Class C Shares ........................ -- -- -- (73,129) -- --
Class M Shares ........................ -- -- -- (3,509,677) -- --
----------- ----------- ------------- ------------- ------------ ------------
Return of Capital:
Total Dividends and Distributions .. -- -- (5,341,844) (9,647,919) (713,819) (485,371)
----------- ----------- ------------- ------------- ------------ ------------
Net Increase (Decrease) in Net
Assets From:
Share Transactions (4) ................ 5,151,518 3,467,795 (1,043,692) (33,844,445) (17,800,771) 304,076
Redemption Fees ....................... 50 -- 3,405 3,506 -- --
Fair Funds Settlement (5) ............. -- -- -- -- -- 214,649
----------- ----------- ------------- ------------- ------------ ------------
Total Increase (Decrease) in Net
Assets ........................... 6,110,204 3,622,106 11,140,447 (142,677,769) (7,032,353) (14,581,066)
----------- ----------- ------------- ------------- ------------ ------------
Net Assets:
Beginning of Period ...................... 3,622,106 -- 210,085,027 352,762,796 93,368,021 107,949,087
----------- ----------- ------------- ------------- ------------ ------------
End of Period ............................ $ 9,732,310 $ 3,622,106 $ 221,225,474 $ 210,085,027 $ 86,335,668 $ 93,368,021
=========== =========== ============= ============= ============ ============
Undistributed Net Investment
Income/(Accumulated Net Investment
Loss) ................................... $ -- $ -- $ 4,220,837 $ 4,707,968 $ 961,600 $ 712,154
=========== =========== ============= ============= ============ ============
Amounts designated as "--" are either not applicable or less than $1.00.
* Change in unrealized appreciation (depreciation) does not include
unrealized appreciation (depreciation) in connection with the
Reorganization (see Note 9 in the notes to financial statements).
(1) Commenced operations on June 12, 2009.
(2) For the nine months ended July 31, 2009, (see Note 9 in the notes to
financial statements for details of the Reorganization.)
(3) For the year ended October 31.
(4) For details on share transaction by class, see statements of changes in
net assets - capital stock activity on pages 148 - 161.
(5) The funds were recipients of a portion of a distribution from a Fair Fund
established by the United States Securities and Exchange Commission. The
proceeds received were part of the Millennium Partners, L.P. and Bear,
Stearns & Co., Inc. settlements.
The accompanying notes are an integral part of the financial statements.
142 HIGHMARK(R) FUNDS
LARGE CAP VALUE NYSE ARCA TECH 100 INDEX
FUND FUND
------------------------------ -----------------------------------------------
2010 2009 2010 2009(2) 2008(3)
------------------------------ -----------------------------------------------
Investment Activities:
Net Investment Income (Loss) ............. $ 3,208,143 $ 3,133,275 $ (641,766) $ (391,262) $ (1,458,396)
Net Realized Gain (Loss) on Investments,
Affiliated Funds, Foreign Currency
Transactions, Written Option Contracts,
Futures Contracts, Payments from
Affiliates and Capital Gains
Distributions Received ................ 17,633,560 (42,992,609) 5,095,461 (20,399,115) (12,783,115)
Change in Unrealized Appreciation
(Depreciation) on Investments,
Affiliated Funds, Foreign Currency
Transactions, Foreign Currency
Contracts, Written Options and Futures
Contracts ............................. 501,588 (1,581,972) 24,552,907 48,224,267 (112,815,420)
------------- ------------- ------------- ------------- -------------
Net Increase (Decrease) in Net Assets
Resulting From Operations ............... 21,343,291 (41,441,306) 29,006,602 27,433,890 (127,056,931)
------------- ------------- ------------- ------------- -------------
Dividends and Distributions to Shareholders:
Net Investment Income:
Fiduciary Shares ...................... (1,862,693) (2,637,188) -- -- --
Class A Shares ........................ (269,979) (433,855) -- -- --
Class B Shares ........................ (7,285) (10,389) -- -- --
Class C Shares ........................ (16,247) (38,733) -- -- --
Class M Shares ........................ -- -- -- -- --
Capital Gains:
Fiduciary Shares ...................... -- -- -- -- --
Class A Shares ........................ -- -- -- -- --
Class B Shares ........................ -- -- -- -- --
Class C Shares ........................ -- -- -- -- --
Class M Shares ........................ -- -- -- -- --
------------- ------------- ------------- ------------- -------------
Return of Capital:
Total Dividends and Distributions .. (2,156,204) (3,120,165) -- -- --
------------- ------------- ------------- ------------- -------------
Net Increase (Decrease) in Net
Assets From:
Share Transactions (4) ................ (80,535,260) 9,935,741 (37,821,926) (30,958,842) (59,266,369)
Redemption Fees ....................... -- -- -- -- --
Fair Funds Settlement (5) ............. -- -- -- -- --
------------- ------------- ------------- ------------- -------------
Total Increase (Decrease) in Net
Assets ........................... (61,348,173) (34,625,730) (8,815,324) (3,524,952) (186,323,300)
------------- ------------- ------------- ------------- -------------
Net Assets:
Beginning of Period ...................... 185,599,801 220,225,531 191,962,340 195,487,292 381,810,592
------------- ------------- ------------- ------------- -------------
End of Period ............................ $ 124,251,628 $ 185,599,801 $ 183,147,016 $ 191,962,340 $ 195,487,292
============= ============= ============= ============= =============
Undistributed Net Investment
Income/(Accumulated Net Investment
Loss) .................................... $ 1,102,153 $ 55,034 $ -- $ -- $ --
============= ============= ============= ============= =============
SMALL CAP ADVANTAGE SMALL CAP VALUE
FUND FUND
----------------------------- ------------------------------
2010 2009 2010 2009
----------------------------- ------------------------------
Investment Activities:
Net Investment Income (Loss) ............. $ (74,293) $ 97,611 $ 652,503 $ 1,493,890
Net Realized Gain (Loss) on Investments,
Affiliated Funds, Foreign Currency
Transactions, Written Option Contracts,
Futures Contracts, Payments from
Affiliates and Capital Gains
Distributions Received ................ 1,926,003 (8,453,689) (7,526,496) (26,136,516)
Change in Unrealized Appreciation
(Depreciation) on Investments,
Affiliated Funds, Foreign Currency
Transactions, Foreign Currency
Contracts, Written Options and Futures
Contracts ............................. 3,270,830 1,132,243 24,817,284 587,678
------------- ------------- ------------- -------------
Net Increase (Decrease) in Net Assets
Resulting From Operations ............... 5,122,540 (7,223,835) 17,943,291 (24,054,948)
------------- ------------- ------------- -------------
Dividends and Distributions to Shareholders:
Net Investment Income:
Fiduciary Shares ...................... (96,482) (33,798) (392,325) (1,088,789)
Class A Shares ........................ (600) (454) (413,599) (632,045)
Class B Shares ........................ -- -- (13,921) (36,189)
Class C Shares ........................ -- -- (29,210) (66,785)
Class M Shares ........................ -- -- -- --
Capital Gains:
Fiduciary Shares ...................... -- -- -- (358,268)
Class A Shares ........................ -- -- -- (219,074)
Class B Shares ........................ -- -- -- (27,964)
Class C Shares ........................ -- -- -- (43,162)
Class M Shares ........................ -- -- -- --
------------- ------------- ------------- -------------
Return of Capital:
Total Dividends and Distributions .. (97,082) (34,252) (849,055) (2,472,276)
------------- ------------- ------------- -------------
Net Increase (Decrease) in Net
Assets From:
Share Transactions (4) ................ (3,509,495) 2,369,668 (22,904,102) (28,022,521)
Redemption Fees ....................... -- 155 1,051 4,585
Fair Funds Settlement (5) ............. -- -- -- --
------------- ------------- ------------- -------------
Total Increase (Decrease) in Net
Assets ........................... 1,515,963 (4,888,264) (5,808,815) (54,545,160)
------------- ------------- ------------- -------------
Net Assets:
Beginning of Period ...................... 22,398,085 27,286,349 76,195,785 130,740,945
------------- ------------- ------------- -------------
End of Period ............................ $ 23,914,048 $ 22,398,085 $ 70,386,970 $ 76,195,785
============= ============= ============= =============
Undistributed Net Investment
Income/(Accumulated Net Investment
Loss) ................................... $ -- $ 96,898 $ 220,960 $ 417,512
============= ============= ============= =============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 143
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS OR PERIODS ENDED JULY 31, 2010 (UNLESS OTHERWISE INDICATED)
DIVERSIFIED
VALUE MOMENTUM CAPITAL GROWTH ALLOCATION EQUITY ALLOCATION
FUND FUND FUND
---------------------------- -------------------------- --------------------------
2010 2009 2010 2009 2010 2009
---------------------------- -------------------------- --------------------------
Investment Activities:
Net Investment Income .................... $ 6,109,913 $ 4,576,342 $ 188,267 $ 325,919 $ 6,750 $ 12,013
Net Realized Gain (Loss) on Investments,
Affiliated Funds, Foreign Currency
Transactions, Written Option Contracts,
Futures Contracts, Payments from
Affiliates and Capital Gains
Distributions Received ................ 9,071,167 (23,868,232) (3,547,749) (10,049,391) (300,184) (1,388,833)
Change in Unrealized Appreciation
(Depreciation) on Investments,
Affiliated Funds, Foreign Currency
Transactions, Foreign Currency
Contracts, Written Options and Futures
Contracts ............................. 26,098,625 (59,439,324)* 8,482,645 (2,156,858) 1,089,862 639,489
------------- ------------- ------------ ------------ ----------- ------------
Net Increase (Decrease) in Net Assets
Resulting From Operations ............... 41,279,705 (78,731,214) 5,123,163 (11,880,330) 796,428 (737,331)
------------- ------------- ------------ ------------ ----------- ------------
Dividends and Distributions to Shareholders:
Net Investment Income:
Fiduciary Shares ...................... (2,884,929) (4,177,339) (2,035) (2,256) (182) (69)
Class A Shares ........................ (733,393) (327,044) (187,322) (305,266) (9,513) (6,063)
Class B Shares ........................ (15,094) (24,679) -- -- -- --
Class C Shares ........................ (10,088) (11,628) (47,557) -- (2,010) (158)
Capital Gains:
Fiduciary Shares ...................... -- (17,138,714) -- (11,713) -- (354)
Class A Shares ........................ -- (1,227,539) -- (2,141,795) -- (43,881)
Class B Shares ........................ -- (177,864) -- -- -- --
Class C Shares ........................ -- (74,372) -- (1,161,096) -- (41,763)
------------- ------------- ------------ ------------ ----------- ------------
Return of Capital:
Total Dividends and Distributions .. (3,643,504) (23,159,179) (236,914) (3,622,126) (11,705) (92,288)
------------- ------------- ------------ ------------ ----------- ------------
Net Increase (Decrease) in Net
Assets From:
Share Transactions (2) ................ (45,061,793) 57,036,489 (3,101,568) (7,530,595) 920,905 1,634,483
------------- ------------- ------------ ------------ ----------- ------------
Total Increase (Decrease) in Net
Assets .......................... (7,425,592) (44,853,904) 1,784,681 (23,033,051) 1,705,628 804,864
------------- ------------- ------------ ------------ ----------- ------------
Net Assets:
Beginning of Period ...................... 313,706,500 358,560,404 38,060,080 61,093,131 5,804,659 4,999,795
------------- ------------- ------------ ------------ ----------- ------------
End of Period ............................ $ 306,280,908 $ 313,706,500 $ 39,844,761 $ 38,060,080 $ 7,510,287 $ 5,804,659
============= ============= ============ ============ =========== ============
Undistributed Net Investment
Income/(Accumulated Net Investment
Loss) ................................... $ 2,527,968 $ 61,606 $ 32,115 $ 80,762 $ 6,248 $ 11,203
============= ============= ============ ============ =========== ============
Amounts designated as "--" are either not applicable or less than $1.00.
* Change in unrealized appreciation (depreciation) does not include
unrealized appreciation (depreciation) in connection with the
Reorganization (see Note 9 in the notes to financial statements).
(1) Class C Shares resumed operations on December 4, 2009.
(2) For details on share transaction by class, see statements of changes in
net assets - capital stock activity on pages 148 - 161.
The accompanying notes are an integral part of the financial statements.
144 HIGHMARK(R) FUNDS
GROWTH &
INCOME ALLOCATION INCOME PLUS ALLOCATION BOND
FUND FUND FUND
------------------------- ----------------------- --------------------------
2010 2009 2010 2009 2010 2009
------------------------- ----------------------- --------------------------
Investment Activities:
Net Investment Income ......................... $ 401,824 $ 588,242 $ 219,240 $ 184,454 $ 14,683,027 $ 15,383,836
Net Realized Gain (Loss) on Investments,
Affiliated Funds, Foreign Currency
Transactions, Written Option Contracts,
Futures Contracts, Payments from
Affiliates and Capital Gains
Distributions Received ..................... (1,583,273) (11,271,066) 466,506 (1,598,154) 4,420,896 1,271,467
Change in Unrealized Appreciation
(Depreciation) on Investments,
Affiliated Funds, Foreign Currency
Transactions, Foreign Currency
Contracts, Written Options and Futures
Contracts .................................. 5,842,837 1,824,428 429,549 1,262,619 15,381,721 7,271,133
----------- ------------ ----------- ---------- ------------ ------------
Net Increase (Decrease) in Net Assets
Resulting From Operations ..................... 4,661,388 (8,858,396) 1,115,295 (151,081) 34,485,644 23,926,436
----------- ------------ ----------- ---------- ------------ ------------
Dividends and Distributions to Shareholders:
Net Investment Income:
Fiduciary Shares ........................... (1,949) (1,923) (4,562) (3,225) (13,688,181) (14,125,468)
Class A Shares ............................. (331,804) (428,603) (143,402) (130,405) (1,055,075) (1,220,692)
Class B Shares ............................. -- -- -- -- (69,625) (134,120)
Class C Shares ............................. (110,753) (148,251) (57,376) (56,245) (94,383) (18,089)
Capital Gains:
Fiduciary Shares ........................... -- (6,583) -- (3,253) -- --
Class A Shares ............................. -- (1,663,271) -- (159,945) -- --
Class B Shares ............................. -- -- -- -- -- --
Class C Shares ............................. -- (932,511) -- (102,692) -- --
----------- ------------ ----------- ---------- ------------ ------------
Return of Capital:
Total Dividends and Distributions ....... (444,506) (3,181,142) (205,340) (455,765) (14,907,264) (15,498,369)
----------- ------------ ----------- ---------- ------------ ------------
Net Increase (Decrease) in Net Assets From:
Share Transactions (2) ..................... 95,438 (6,992,871) 5,018,238 1,875,947 11,362,016 (54,574,279)
----------- ------------ ----------- ---------- ------------ ------------
Total Increase (Decrease) in Net
Assets ............................... 4,312,320 (19,032,409) 5,928,193 1,269,101 30,940,396 (46,146,212)
----------- ------------ ----------- ---------- ------------ ------------
Net Assets:
Beginning of Period ........................... 38,935,496 57,967,905 9,786,758 8,517,657 333,838,069 379,984,281
----------- ------------ ----------- ---------- ------------ ------------
End of Period ................................. $43,247,816 $ 38,935,496 $15,714,951 $9,786,758 $364,778,465 $333,838,069
=========== ============ =========== ========== ============ ============
Undistributed Net Investment
Income/(Accumulated Net Investment Loss) ...... $ 62,168 $ 104,850 $ 26,677 $ 12,777 $ 235,062 $ 344,350
=========== ============ =========== ========== ============ ============
CALIFORNIA INTERMEDIATE NATIONAL INTERMEDIATE
TAX-FREE BOND FUND TAX-FREE BOND FUND
------------------------------ ------------------------------
2010 2009 2010(1) 2009
------------------------------ ------------------------------
Investment Activities:
Net Investment Income ......................... $ 5,343,670 $ 4,498,923 $ 2,914,872 $ 2,569,580
Net Realized Gain (Loss) on Investments,
Affiliated Funds, Foreign Currency
Transactions, Written Option Contracts,
Futures Contracts, Payments from
Affiliates and Capital Gains
Distributions Received ..................... 34 274,550 10,186 --
Change in Unrealized Appreciation
(Depreciation) on Investments,
Affiliated Funds, Foreign Currency
Transactions, Foreign Currency
Contracts, Written Options and Futures
Contracts .................................. 3,719,978 2,750,979 2,398,839 1,729,714
------------- ------------- ------------- -------------
Net Increase (Decrease) in Net Assets
Resulting From Operations ..................... 9,063,682 7,524,452 5,323,897 4,299,294
------------- ------------- ------------- -------------
Dividends and Distributions to Shareholders:
Net Investment Income:
Fiduciary Shares ........................... (3,319,982) (3,175,821) (2,278,065) (2,214,137)
Class A Shares ............................. (1,744,847) (1,193,610) (607,623) (355,881)
Class B Shares ............................. (24,470) (59,137) -- --
Class C Shares ............................. (242,758) (72,978) (17,674) --
Capital Gains:
Fiduciary Shares ........................... (169,020) (162,406) -- (49,824)
Class A Shares ............................. (90,864) (64,023) -- (7,274)
Class B Shares ............................. (2,029) (4,624) -- --
Class C Shares ............................. (14,001) (3,338) -- --
------------- ------------- ------------- -------------
Return of Capital:
Total Dividends and Distributions ....... (5,607,971) (4,735,937) (2,903,362) (2,627,116)
------------- ------------- ------------- -------------
Net Increase (Decrease) in Net Assets From:
Share Transactions (2) ..................... 48,745,858 25,878,331 9,113,103 22,622,195
------------- ------------- ------------- -------------
Total Increase (Decrease) in Net
Assets ............................... 52,201,569 28,666,846 11,533,638 24,294,373
------------- ------------- ------------- -------------
Net Assets:
Beginning of Period ........................... 151,811,746 123,144,900 94,284,595 69,990,222
------------- ------------- ------------- -------------
End of Period ................................. $ 204,013,315 $ 151,811,746 $ 105,818,233 $ 94,284,595
============= ============= ============= =============
Undistributed Net Investment
Income/(Accumulated Net Investment Loss) ...... $ 27,760 $ 17,503 $ 26,106 $ 18,080
============= ============= ============= =============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 145
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS OR PERIODS ENDED JULY 31, 2010 (UNLESS OTHERWISE INDICATED)
SHORT TERM BOND WISCONSIN
FUND TAX-EXEMPT FUND
---------------------------- ---------------------------------------------
2010 2009 2010 2009(1) 2008(2)
---------------------------- ---------------------------------------------
Investment Activities:
Net Investment Income ........................... $ 2,350,051 $ 1,994,635 $ 5,281,965 $ 4,063,602 $ 5,892,362
Net Realized Gain (Loss) on Investments,
Affiliated Funds, Foreign Currency
Transactions, Written Option Contracts,
Futures Contracts, Payments from Affiliates
and Capital Gains Distributions Received ..... 122,909 (253,064) 396,712 (210,792) 39,356
Change in Unrealized Appreciation (Depreciation)
on Investments, Affiliated Funds, Foreign
Currency Transactions, Foreign Currency
Contracts, Written Options and Futures
Contracts .................................... 1,031,230 792,628 5,855,281 7,654,037 (12,206,254)
------------- ------------ ------------- ------------- -------------
Net Increase (Decrease) in Net Assets Resulting
From Operations ................................. 3,504,190 2,534,199 11,533,958 1,506,847 (6,274,536)
------------- ------------ ------------- ------------- -------------
Dividends and Distributions to Shareholders:
Net Investment Income:
Fiduciary Shares ............................. (1,833,809) (1,855,111) -- -- --
Class A Shares ............................... (454,749) (105,388) (5,009,291) (3,757,517) (5,633,475)
Class B Shares ............................... -- -- (84,091) (65,313) (99,941)
Class C Shares ............................... (214,811) (28,366) (231,262) (126,320) (184,398)
------------- ------------ ------------- ------------- -------------
Total Dividends and Distributions ......... (2,503,369) (1,988,865) (5,324,644) (3,949,150) (5,917,814)
------------- ------------ ------------- ------------- -------------
Net Increase (Decrease) in Net Assets From:
Share Transactions (3) .......................... 46,284,631 9,846,615 3,562,948 (10,471,651) (3,047,367)
------------- ------------ ------------- ------------- -------------
Total Increase (Decrease) in Net Assets ... 47,285,452 10,391,949 9,772,262 (2,913,954) (15,239,717)
------------- ------------ ------------- ------------- -------------
Net Assets:
Beginning of Period .......................... 63,982,866 53,590,917 149,947,765 152,861,719 168,101,436
------------- ------------ ------------- ------------- -------------
End of Period ................................ $ 111,268,318 $ 63,982,866 $ 159,720,027 $ 149,947,765 $ 152,861,719
------------- ------------ ------------- ------------- -------------
Undistributed Net Investment Income/(Accumulated
Net Investment Loss) ............................ $ 15,737 $ 18,139 $ 58,804 $ 96,874 $ (17,578)
============= ============ ============= ============= =============
Amounts designated as "--" are either not applicable or less than $1.00.
(1) For the nine months ended July 31, 2009, (see Note 9 in the notes to
financial statements for details of the Reorganization.)
(2) For the year ended October 31.
(3) For details on share transaction by class, see statement of changes in net
assets - capital stock activity on pages 148 - 161.
The accompanying notes are an integral part of the financial statements.
146 HIGHMARK(R) FUNDS
This Page Left Blank Intentionally.
HIGHMARK(R) FUNDS 147
STATEMENTS OF CHANGES IN NET ASSETS - CAPITAL STOCK ACTIVITY
FOR THE YEARS OR PERIODS ENDED JULY 31 (UNLESS OTHERWISE INDICATED)
BALANCED FUND
-----------------------------------------------------
2010 2009
SHARES DOLLARS SHARES DOLLARS
-----------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ..................... 190,125 $ 2,348,826 224,342 $ 2,337,249
Reinvestment of Dividends and Distributions ..... 19,915 244,672 33,727 344,488
Cost of Shares Redeemed ......................... (297,254) (3,623,346) (543,137) (5,681,321)
---------- ------------ ---------- ------------
Total Fiduciary Share Transactions ........... (87,214) (1,029,848) (285,068) (2,999,584)
---------- ------------ ---------- ------------
Class A Shares:
Proceeds from Shares Issued ..................... 94,813 1,178,505 319,172 3,075,121
Reinvestment of Dividends and Distributions ..... 4,424 54,301 7,676 77,923
Cost of Shares Redeemed ......................... (47,879) (588,062) (391,002) (3,859,955)
---------- ------------ ---------- ------------
Total Class A Share Transactions ............. 51,358 644,744 (64,154) (706,911)
---------- ------------ ---------- ------------
Class B Shares:
Proceeds from Shares Issued ..................... 19,472 241,656 -- --
Reinvestment of Dividends and Distributions ..... 209 2,558 934 9,484
Cost of Shares Redeemed ......................... (31,679) (393,892) (55,983) (576,374)
---------- ------------ ---------- ------------
Total Class B Share Transactions ............. (11,998) (149,678) (55,049) (566,890)
---------- ------------ ---------- ------------
Class C Shares:
Proceeds from Shares Issued ..................... 18,985 234,788 8,872 85,071
Reinvestment of Dividends and Distributions ..... 164 1,999 365 3,679
Cost of Shares Redeemed ......................... (7,870) (96,917) (9,405) (93,580)
---------- ------------ ---------- ------------
Total Class C Share Transactions ............. 11,279 139,870 (168) (4,830)
---------- ------------ ---------- ------------
Class M Shares:
Proceeds from Shares Issued ..................... -- -- -- --
Reinvestment of Dividends and Distributions ..... -- -- -- --
Cost of Shares Redeemed ......................... -- -- -- --
---------- ------------ ---------- ------------
Total Class M Share Transactions ............. -- -- -- --
---------- ------------ ---------- ------------
Net Decrease from Capital Stock Activity ........ (36,575) $ (394,912) (404,439) $ (4,278,215)
========== ============ ========== ============
COGNITIVE VALUE FUND
-------------------------------------------------------
2010 2009
SHARES DOLLARS SHARES DOLLARS
-------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ..................... 155,302 $ 1,262,448 125,403 $ 912,850
Reinvestment of Dividends and Distributions ..... 1,819 15,500 2,891 20,119
Cost of Shares Redeemed ......................... (152,405) (1,384,099) (119,057) (905,623)
---------- ------------- ---------- -------------
Total Fiduciary Share Transactions ........... 4,716 (106,151) 9,237 27,346
---------- ------------- ---------- -------------
Class A Shares:
Proceeds from Shares Issued ..................... 36,911 325,652 22,608 156,970
Reinvestment of Dividends and Distributions ..... 326 2,792 83 584
Cost of Shares Redeemed ......................... (9,602) (87,308) (30,429) (221,817)
---------- ------------- ---------- -------------
Total Class A Share Transactions ............. 27,635 241,136 (7,738) (64,263)
---------- ------------- ---------- -------------
Class B Shares:
Proceeds from Shares Issued ..................... -- -- -- --
Reinvestment of Dividends and Distributions ..... -- -- -- --
Cost of Shares Redeemed ......................... -- -- -- --
---------- ------------- ---------- -------------
Total Class B Share Transactions ............. -- -- -- --
---------- ------------- ---------- -------------
Class C Shares:
Proceeds from Shares Issued ..................... 13,975 119,610 48,783 350,998
Reinvestment of Dividends and Distributions ..... 149 1,244 183 1,252
Cost of Shares Redeemed ......................... (10,870) (97,611) (147) (1,014)
---------- ------------- ---------- -------------
Total Class C Share Transactions ............. 3,254 23,243 48,819 351,236
---------- ------------- ---------- -------------
Class M Shares:
Proceeds from Shares Issued ..................... 300,051 2,620,564 2,372,211 19,471,930
Reinvestment of Dividends and Distributions ..... 54,209 461,856 95,628 664,618
Cost of Shares Redeemed ......................... (1,447,057) (12,650,536) (2,796,394) (19,862,786)
---------- ------------- ---------- -------------
Total Class M Share Transactions ............. (1,092,797) (9,568,116) (328,555) 273,762
---------- ------------- ---------- -------------
Net Decrease from Capital Stock Activity ........ (1,057,192) $ (9,409,888) (278,237) $ 588,081
========== ============= ========== =============
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
148 HIGHMARK(R) FUNDS
CORE EQUITY FUND
-------------------------------------------------------
2010 2009
SHARES DOLLARS SHARES DOLLARS
-------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ..................... 600,079 $ 4,331,484 1,628,250 $ 9,296,806
Reinvestment of Dividends and Distributions ..... 38,237 274,898 81,165 465,821
Cost of Shares Redeemed ......................... (2,420,542) (17,309,113) (4,066,093) (26,225,255)
---------- ------------- ---------- -------------
Total Fiduciary Share Transactions ........... (1,782,226) (12,702,731) (2,356,678) (16,462,628)
---------- ------------- ---------- -------------
Class A Shares:
Proceeds from Shares Issued ..................... 99,094 722,925 294,032 1,781,324
Reinvestment of Dividends and Distributions ..... 2,543 18,295 5,580 32,380
Cost of Shares Redeemed ......................... (50,295) (367,373) (405,426) (2,291,029)
---------- ------------- ---------- -------------
Total Class A Share Transactions ............. 51,342 373,847 (105,814) (477,325)
---------- ------------- ---------- -------------
Class B Shares:
Proceeds from Shares Issued ..................... 20,019 144,738 -- --
Reinvestment of Dividends and Distributions ..... 244 1,692 2,272 12,688
Cost of Shares Redeemed ......................... (100,741) (717,645) (94,230) (539,310)
---------- ------------- ---------- -------------
Total Class B Share Transactions ............. (80,478) (571,215) (91,958) (526,622)
---------- ------------- ---------- -------------
Class C Shares:
Proceeds from Shares Issued ..................... 5,622 39,615 277,675 1,426,584
Reinvestment of Dividends and Distributions ..... 147 1,023 1,342 7,386
Cost of Shares Redeemed ......................... (14,846) (102,877) (291,087) (1,581,700)
---------- ------------- ---------- -------------
Total Class C Share Transactions ............. (9,077) (62,239) (12,070) (147,730)
---------- ------------- ---------- -------------
Class M Shares:
Proceeds from Shares Issued ..................... -- -- -- --
Reinvestment of Dividends and Distributions ..... -- -- -- --
Cost of Shares Redeemed ......................... -- -- -- --
---------- ------------- ---------- -------------
Total Class M Share Transactions ............. -- -- -- --
---------- ------------- ---------- -------------
Net Decrease from Capital Stock Activity ........ (1,820,439) $ (12,962,338) (2,566,520) $ (17,614,305)
========== ============= ========== =============
ENHANCED GROWTH FUND
-------------------------------------------------------
2010 2009
SHARES DOLLARS SHARES DOLLARS
-------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ..................... 142,824 $ 1,269,119 274,837 $ 1,987,874
Reinvestment of Dividends and Distributions ..... 65 606 -- --
Cost of Shares Redeemed ......................... (207,977) (1,866,375) (206,217) (1,387,518)
---------- ------------- ---------- -------------
Total Fiduciary Share Transactions ........... (65,088) (596,650) 68,620 600,356
---------- ------------- ---------- -------------
Class A Shares:
Proceeds from Shares Issued ..................... 305,773 2,800,369 100,303 690,451
Reinvestment of Dividends and Distributions ..... 9 83 -- --
Cost of Shares Redeemed ......................... (164,217) (1,511,394) (61,689) (452,329)
---------- ------------- ---------- -------------
Total Class A Share Transactions ............. 141,565 1,289,058 38,614 238,122
---------- ------------- ---------- -------------
Class B Shares:
Proceeds from Shares Issued ..................... -- -- -- --
Reinvestment of Dividends and Distributions ..... -- -- -- --
Cost of Shares Redeemed ......................... -- -- -- --
---------- ------------- ---------- -------------
Total Class B Share Transactions ............. -- -- -- --
---------- ------------- ---------- -------------
Class C Shares:
Proceeds from Shares Issued ..................... 11,168 92,399 1,926 11,237
Reinvestment of Dividends and Distributions ..... -- 2 -- --
Cost of Shares Redeemed ......................... (6,439) (56,484) (18,136) (123,618)
---------- ------------- ---------- -------------
Total Class C Share Transactions ............. 4,729 35,917 (16,210) (112,381)
---------- ------------- ---------- -------------
Class M Shares:
Proceeds from Shares Issued ..................... 277,982 2,494,622 1,339,593 9,001,666
Reinvestment of Dividends and Distributions ..... 9,093 84,199 -- --
Cost of Shares Redeemed ......................... (1,445,795) (12,661,998) (6,391,063) (41,735,646)
---------- ------------- ---------- -------------
Total Class M Share Transactions ............. (1,158,720) (10,083,177) (5,051,470) (32,733,980
---------- ------------- ---------- -------------
Net Decrease from Capital Stock Activity ........ (1,077,514) $ (9,354,852) (4,960,446) $ (32,007,883)
========== ============= ========== =============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 149
STATEMENTS OF CHANGES IN NET ASSETS - CAPITAL STOCK ACTIVITY
FOR THE YEARS OR PERIODS ENDED JULY 31 (UNLESS OTHERWISE INDICATED)
EQUITY INCOME FUND
---------------------------------------------------------------------------
2010 2009(1) 2008(2)
SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS
---------------------------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued .................. 1,165 $ 9,347 10,885 $ 75,000 -- $ --
Reinvestment of Dividends and Distributions .. 9 74 -- -- -- --
Cost of Shares Redeemed ...................... -- -- -- -- -- --
Transfer to Class A .......................... (10,885) (74,904) -- -- -- --
-------- ----------- -------- ----------- ---------- ------------
Total Fiduciary Share Transactions ........ (9,711) (65,483) 10,885 75,000 -- --
-------- ----------- -------- ----------- ---------- ------------
Class A Shares:
Proceeds from Shares Issued .................. 112,276 883,860 288,140 1,546,137 325,034 3,291,231
Transfer from Fiduciary Shares ............... 10,885 74,904 -- -- -- --
Reinvestment of Dividends and Distributions .. 31,237 245,221 39,454 246,268 111,652 1,165,283
Cost of Shares Redeemed ...................... (580,701) (4,476,212) (459,643) (2,679,212) (1,044,363) (10,647,331)
Converted from Class R (Note 9) .............. -- -- 17,555 115,883 -- --
-------- ----------- -------- ----------- ---------- ------------
Total Class A Share Transactions .......... (426,303) (3,272,227) (114,494) (770,924) (607,677) (6,190,817)
-------- ----------- -------- ----------- ---------- ------------
Class B Shares:
Proceeds from Shares Issued .................. 3,644 28,861 35,000 199,706 38,855 405,645
Reinvestment of Dividends and Distributions .. 4,494 35,434 5,966 36,954 28,311 298,967
Cost of Shares Redeemed ...................... (113,992) (892,257) (130,338) (813,500) (361,707) (3,590,223)
-------- ----------- -------- ----------- ---------- ------------
Total Class B Share Transactions .......... (105,854) (827,962) (89,372) (576,840) (294,541) (2,885,611)
-------- ----------- -------- ----------- ---------- ------------
Class C Shares:
Proceeds from Shares Issued .................. 8,614 69,103 27,611 158,843 80,295 796,562
Reinvestment of Dividends and Distributions .. 5,103 39,930 8,040 49,887 28,459 298,124
Cost of Shares Redeemed ...................... (142,522) (1,089,617) (181,054) (1,135,280) (155,358) (1,528,619)
-------- ----------- -------- ----------- ---------- ------------
Total Class C Share Transactions .......... (128,805) (980,584) (145,403) (926,550) (46,604) (433,933)
-------- ----------- -------- ----------- ---------- ------------
Class R Shares:
Proceeds from Shares Issued .................. -- -- 5,188 31,563 6,495 62,932
Reinvestment of Dividends and Distributions .. -- -- 389 2,440 648 6,749
Cost of Shares Redeemed ...................... -- -- (498) (3,045) (4,112) (38,259)
Converted to Class A Shares (Note 9) ......... -- -- (17,598) (115,883) -- --
-------- ----------- -------- ----------- ---------- ------------
Total Class R Share Transactions .......... -- -- (12,519) (84,925) 3,031 31,422
-------- ----------- -------- ----------- ---------- ------------
Net Increase (Decrease) from Capital Stock
Activity ................................... (670,673) $(5,146,256) (350,903) $(2,284,239) (945,791) $ (9,478,939)
======== =========== ======== =========== ========== ============
Amounts designated as "--" are either $0 or have been rounded to $0.
(1) For the nine months ended July 31, 2009, (see Note 9 in the notes to
financial statements for details of the Reorganization.)
(2) For the year ended October 31.
(3) Commenced operations on August 1, 2008.
The accompanying notes are an integral part of the financial statements.
150 HIGHMARK(R) FUNDS
FUNDAMENTAL EQUITY FUND
-----------------------------------------------
2010 2009(3)
SHARES DOLLARS SHARES DOLLARS
-----------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ............................... 297,275 $ 5,295,068 908,445 $16,577,201
Reinvestment of Dividends and Distributions ............... 2,625 47,886 3,591 49,156
Cost of Shares Redeemed ................................... (141,278) (2,528,089) (208,518) (3,032,021)
Transfer to Class A ....................................... -- -- -- --
-------- ----------- -------- -----------
Total Fiduciary Share Transactions ..................... 158,622 2,814,865 703,518 13,594,336
-------- ----------- -------- -----------
Class A Shares:
Proceeds from Shares Issued ............................... 165 2,730 163 2,250
Transfer from Fiduciary Shares ............................ -- -- -- --
Reinvestment of Dividends and Distributions ............... 1 11 -- --
Cost of Shares Redeemed ................................... (39) (665) -- --
Converted from Class R (Note 9) ........................... -- -- -- --
-------- ----------- -------- -----------
Total Class A Share Transactions ....................... 127 2,076 163 2,250
-------- ----------- -------- -----------
Class B Shares:
Proceeds from Shares Issued ............................... -- -- -- --
Reinvestment of Dividends and Distributions ............... -- -- -- --
Cost of Shares Redeemed ................................... -- -- -- --
-------- ----------- -------- -----------
Total Class B Share Transactions ....................... -- -- -- --
-------- ----------- -------- -----------
Class C Shares:
Proceeds from Shares Issued ............................... 898 16,448 1 20
Reinvestment of Dividends and Distributions ............... 1 19 -- --
Cost of Shares Redeemed ................................... (244) (4,377) -- --
-------- ----------- -------- -----------
Total Class C Share Transactions ....................... 655 12,090 1 20
-------- ----------- -------- -----------
Class R Shares:
Proceeds from Shares Issued ............................... -- -- -- --
Reinvestment of Dividends and Distributions ............... -- -- -- --
Cost of Shares Redeemed ................................... -- -- -- --
Converted to Class A Shares (Note 9) ...................... -- -- -- --
-------- ----------- -------- -----------
Total Class R Share Transactions ....................... -- -- -- --
-------- ----------- -------- -----------
Net Increase (Decrease) from Capital Stock Activity ....... 159,404 $ 2,829,031 703,682 $13,596,606
======== =========== ======== ===========
GENEVA MID CAP GROWTH FUND
---------------------------------------------------------------------------------
2010 2009(1) 2008(2)
SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS
---------------------------------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ............. 1,063,746 $ 18,037,809 96,965 $ 1,427,858 -- $ --
Reinvestment of Dividends and
Distributions ......................... -- -- -- -- -- --
Cost of Shares Redeemed ................. (71,522) (1,283,574) -- -- -- --
Transfer to Class A ..................... -- -- -- -- -- --
---------- ------------ ---------- ------------ ---------- ------------
Total Fiduciary Share Transactions ... 992,224 16,754,235 96,965 1,427,858 -- --
---------- ------------ ---------- ------------ ---------- ------------
Class A Shares:
Proceeds from Shares Issued ............. 3,052,834 51,229,685 3,653,777 44,843,668 3,255,151 59,027,179
Transfer from Fiduciary Shares .......... -- -- -- -- -- --
Reinvestment of Dividends and
Distributions ......................... -- -- -- -- 521,214 10,387,789
Cost of Shares Redeemed ................. (3,071,020) (51,710,749) (3,637,875) (44,872,000) (3,681,870) (66,688,185)
Converted from Class R (Note 9) ......... -- -- 70,018 1,008,570 -- --
---------- ------------ ---------- ------------ ---------- ------------
Total Class A Share Transactions ..... (18,186) (481,064) 85,920 980,238 94,495 2,726,783
---------- ------------ ---------- ------------ ---------- ------------
Class B Shares:
Proceeds from Shares Issued ............. 6,456 100,681 34,914 390,252 57,061 994,426
Reinvestment of Dividends and
Distributions ......................... -- -- -- -- 46,594 866,642
Cost of Shares Redeemed ................. (163,704) (2,553,951) (148,997) (1,712,309) (316,427) (5,373,474)
---------- ------------ ---------- ------------ ---------- ------------
Total Class B Share Transactions ..... (157,248) (2,453,270) (114,083) (1,322,057) (212,772) (3,512,406)
---------- ------------ ---------- ------------ ---------- ------------
Class C Shares:
Proceeds from Shares Issued ............. 246,143 3,835,951 146,026 1,788,750 212,465 3,638,755
Reinvestment of Dividends and
Distributions ......................... -- -- -- -- 62,216 1,171,537
Cost of Shares Redeemed ................. (157,964) (2,497,862) (234,954) (2,695,961) (191,432) (3,205,654)
---------- ------------ ---------- ------------ ---------- ------------
Total Class C Share Transactions ..... 88,179 1,338,089 (88,928) (907,211) 83,249 1,604,638
---------- ------------ ---------- ------------ ---------- ------------
Class R Shares:
Proceeds from Shares Issued ............. -- -- 23,051 273,244 14,873 265,381
Reinvestment of Dividends and
Distributions ......................... -- -- -- -- 3,934 77,459
Cost of Shares Redeemed ................. -- -- (7,828) (95,158) (28,621) (515,026)
Converted to Class A Shares (Note 9) .... -- -- (71,333) (1,008,570) -- --
---------- ------------ ---------- ------------ ---------- ------------
Total Class R Share Transactions ..... -- -- (56,110) (830,484) (9,814) (172,186)
---------- ------------ ---------- ------------ ---------- ------------
Net Increase (Decrease) from Capital
Stock Activity ........................ 904,969 $ 15,157,990 (76,236) $ (651,656) (44,842) $ 646,829
========== ============ ========== ============ ========== ============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 151
STATEMENTS OF CHANGES IN NET ASSETS - CAPITAL STOCK ACTIVITY
FOR THE YEARS OR PERIODS ENDED JULY 31 (UNLESS OTHERWISE INDICATED)
GENEVA SMALL CAP GROWTH FUND INTERNATIONAL OPPORTUNITIES FUND
------------------------------------------ ----------------------------------------------------
2010 2009(1) 2010 2009
SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS
------------------------------------------ ----------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares
Issued ................. 189,403 $ 4,337,162 77,193 $ 1,512,890 3,760,312 $ 23,813,144 3,524,287 $ 19,507,507
Reinvestment of Dividends
and Distributions ...... -- -- -- -- 113,810 729,525 373,176 1,888,871
Cost of Shares Redeemed ... (10,902) (242,021) (5) (100) (1,971,883) (12,616,751) (4,812,790) (25,872,364)
------- ----------- ------- ----------- ---------- ------------ ---------- -------------
Total Fiduciary Share
Transactions ......... 178,501 4,095,141 77,188 1,512,790 1,902,239 11,925,918 (915,327) (4,475,986)
------- ----------- ------- ----------- ---------- ------------ ---------- -------------
Class A Shares:
Proceeds from Shares
Issued ................. 44,423 1,054,768 96,049 1,920,781 350,341 2,242,538 491,491 2,772,413
Subscriptions from
Reorganizations Class A
(Note 9) ............... -- -- -- -- -- -- -- --
Subscriptions from
Reorganizations Class R
(Note 9) ............... -- -- -- -- -- -- -- --
Reinvestment of Dividends
and Distributions ...... -- -- -- -- 35,328 226,098 79,216 399,418
Cost of Shares Redeemed ... (8,420) (209,691) (5) (95) (998,450) (6,357,947) (1,002,133) (5,700,750)
------- ----------- ------- ----------- ---------- ------------ ---------- -------------
Total Class A Share
Transactions ......... 36,003 845,077 96,044 1,920,686 (612,781) (3,889,311) (431,426) (2,528,919)
------- ----------- ------- ----------- ---------- ------------ ---------- -------------
Class B Shares:
Proceeds from Shares
Issued ................. -- -- -- -- -- -- -- --
Subscriptions from
Reorganizations Class B
(Note 9) ............... -- -- -- -- -- -- -- --
Reinvestment of Dividends
and Distributions ...... -- -- -- -- -- -- -- --
Cost of Shares Redeemed ... -- -- -- -- -- -- -- --
------- ----------- ------- ----------- ---------- ------------ ---------- -------------
Total Class B Share
Transactions ......... -- -- -- -- -- -- -- --
------- ----------- ------- ----------- ---------- ------------ ---------- -------------
Class C Shares:
Proceeds from Shares
Issued ................. 10,681 248,815 1,758 34,419 61,757 384,258 100,452 576,082
Subscriptions from
Reorganizations Class C
(Note 9) ............... -- -- -- -- -- -- -- --
Reinvestment of Dividends
and Distributions ...... -- -- -- -- 3,892 24,789 17,243 85,957
Cost of Shares Redeemed ... (1,711) (37,515) (5) (100) (124,689) (783,287) (291,524) (1,551,601)
------- ----------- ------- ----------- ---------- ------------ ---------- -------------
Total Class C Share
Transactions ......... 8,970 211,300 1,753 34,319 (59,040) (374,240) (173,829) (889,562)
------- ----------- ------- ----------- ---------- ------------ ---------- -------------
Class M Shares:
Proceeds from Shares
Issued ................. -- -- -- -- 1,043,818 6,586,676 1,905,581 10,694,314
Reinvestment of Dividends
and Distributions ...... -- -- -- -- 399,678 2,561,935 996,795 5,046,039
Cost of Shares Redeemed ... -- -- -- -- (2,776,194) (17,854,670) (7,969,797) (41,690,331)
------- ----------- ------- ----------- ---------- ------------ ---------- -------------
Total Class M Share
Transactions ......... -- -- -- -- (1,332,698) (8,706,059) (5,067,421) (25,949,978)
------- ----------- ------- ----------- ---------- ------------ ---------- -------------
Net Increase (Decrease)
from Capital Stock
Activity ............... 223,474 $ 5,151,518 174,985 $ 3,467,795 (102,280) $ (1,043,692) (6,588,003) $ (33,844,445)
======= =========== ======= =========== ========== ============ ========== =============
Amounts designated as "--" are either $0 or have been rounded to $0.
(1) Commenced operations on June 12, 2009.
The accompanying notes are an integral part of the financial statements.
152 HIGHMARK(R) FUNDS
LARGE CAP GROWTH FUND LARGE CAP VALUE FUND
-------------------------------------------------- ---------------------------------------------------
2010 2009 2010 2009
SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS
-------------------------------------------------- ---------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares
Issued .......... 566,488 $ 4,933,367 1,265,000 $ 8,918,195 1,463,448 $ 14,891,474 4,159,420 $ 36,756,268
Reinvestment of
Dividends and
Distributions ... 32,425 288,256 39,410 258,133 147,204 1,518,985 240,678 2,123,168
Cost of Shares
Redeemed ........ (2,297,086) (19,868,860) (2,932,752) (21,507,685) (8,297,929) (86,255,700) (2,689,524) (24,639,755)
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Total Fiduciary
Share
Transactions .. (1,698,173) (14,647,237) (1,628,342) (12,331,357) (6,687,277) (69,845,241) 1,710,574 14,239,681
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Class A Shares:
Proceeds from Shares
Issued .......... 732,918 6,144,306 198,854 1,416,568 274,566 2,829,136 354,101 3,130,091
Subscriptions from
Reorganizations
Class A
(Note 9) ........ -- -- 1,313,170 9,710,500 -- -- 575,537 5,186,682
Subscriptions from
Reorganizations
Class R
(Note 9) ........ -- -- 17,230 127,406 -- -- 16,420 147,971
Reinvestment of
Dividends and
Distributions ... 17,622 154,014 3,941 25,421 24,655 254,321 44,662 398,588
Cost of Shares
Redeemed ........ (716,185) (6,089,897) (550,688) (3,791,187) (1,130,400) (11,555,215) (1,554,764) (14,266,173)
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Total Class A
Share
Transactions .. 34,355 208,423 982,507 7,488,708 (831,179) (8,471,758) (564,044) (5,402,841)
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Class B Shares:
Proceeds from Shares
Issued .......... 2,163 16,874 -- -- 503 5,002 237 2,015
Subscriptions from
Reorganizations
Class B
(Note 9) ........ -- -- 544,752 3,757,374 -- -- 181,615 1,607,419
Reinvestment of
Dividends and
Distributions ... -- -- -- -- 661 6,642 961 8,409
Cost of Shares
Redeemed ........ (348,107) (2,779,204) (204,025) (1,339,624) (104,165) (1,056,789) (64,998) (573,109)
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Total Class B
Share
Transactions .. (345,944) (2,762,330) 340,727 2,417,750 (103,001) (1,045,145) 117,815 1,044,734
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Class C Shares:
Proceeds from Shares
Issued .......... 33,352 271,904 12,832 80,680 15,719 156,531 103,680 968,256
Subscriptions from
Reorganizations
Class C
(Note 9) ........ -- -- 457,217 3,152,423 -- -- 180,087 1,588,838
Reinvestment of
Dividends and
Distributions ... 2,401 19,546 -- -- 1,537 15,424 4,215 36,678
Cost of Shares
Redeemed ........ (113,009) (891,077) (79,268) (504,128) (134,731) (1,345,071) (295,771) (2,539,605)
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Total Class C
Share
Transactions .. (77,256) (599,627) 390,781 2,728,975 (117,475) (1,173,116) (7,789) 54,167
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Class M Shares:
Proceeds from Shares
Issued .......... -- -- -- -- -- -- -- --
Reinvestment of
Dividends and
Distributions ... -- -- -- -- -- -- -- --
Cost of Shares
Redeemed ........ -- -- -- -- -- -- -- --
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Total Class M
Share
Transactions .. -- -- -- -- -- -- -- --
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Net Increase
(Decrease) from
Capital Stock
Activity ........ (2,087,018) $(17,800,771) 85,673 $ 304,076 (7,738,932) $(80,535,260) 1,256,556 $ 9,935,741
========== ============ ========== ============ ========== ============ ========== ============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 153
STATEMENTS OF CHANGES IN NET ASSETS - CAPITAL STOCK ACTIVITY
FOR THE YEARS OR PERIODS ENDED JULY 31 (UNLESS OTHERWISE INDICATED)
NYSE ARCA TECH 100 INDEX FUND
--------------------------------------------------------------------------------------
2010 2009(1) 2008(2)
SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS
--------------------------------------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ......... 16,327 $ 417,533 921 $ 20,300 -- $ --
Reinvestment of Dividends and
Distributions .................... -- -- -- -- -- --
Cost of Shares Redeemed ............. (5,111) (125,391) -- -- -- --
---------- ------------- ---------- ------------- ---------- -------------
Total Fiduciary Share
Transactions .................. 11,216 292,142 921 20,300 -- --
---------- ------------- ---------- ------------- ---------- -------------
Class A Shares:
Proceeds from Shares Issued ......... 1,007,872 24,788,795 1,360,820 19,140,893 2,479,297 62,031,230
Reinvestment of Dividends and
Distributions .................... -- -- -- -- -- --
Cost of Shares Redeemed ............. (2,241,848) (54,851,874) (2,294,337) (34,556,449) (3,598,815) (85,970,551)
Converted from Class R (Note 9) ..... -- -- 23,490 488,911 -- --
---------- ------------- ---------- ------------- ---------- -------------
Total Class A Share
Transactions .................. (1,233,976) (30,063,079) (910,027) (14,926,645) (1,119,518) (23,939,321)
---------- ------------- ---------- ------------- ---------- -------------
Class B Shares:
Proceeds from Shares Issued ......... 926 21,890 23,594 375,559 32,696 767,002
Reinvestment of Dividends and
Distributions .................... -- -- -- -- -- --
Cost of Shares Redeemed ............. (290,604) (6,562,068) (323,924) (5,287,719) (1,018,623) (23,355,287)
---------- ------------- ---------- ------------- ---------- -------------
Total Class B Share
Transactions .................. (289,678) (6,540,178) (300,330) (4,912,160) (985,927) (22,588,285)
---------- ------------- ---------- ------------- ---------- -------------
Class C Shares:
Proceeds from Shares Issued ......... 39,875 914,050 26,249 464,692 31,879 746,296
Reinvestment of Dividends and
Distributions .................... -- -- -- -- -- --
Cost of Shares Redeemed ............. (106,455) (2,424,861) (248,691) (4,062,667) (271,828) (6,291,662)
---------- ------------- ---------- ------------- ---------- -------------
Total Class C Share
Transactions .................. (66,580) (1,510,811) (222,442) (3,597,975) (239,949) (5,545,366)
---------- ------------- ---------- ------------- ---------- -------------
Class F Shares:
Proceeds from Shares Issued ......... -- -- 8,757 150,000 -- --
Cost of Shares Redeemed ............. -- -- (425,644) (7,196,051) (284,717) (7,246,260)
---------- ------------- ---------- ------------- ---------- -------------
Total Class F Share
Transactions .................. -- -- (416,887) (7,046,051) (284,717) (7,246,260)
---------- ------------- ---------- ------------- ---------- -------------
Class R Shares:
Proceeds from Shares Issued ......... -- -- 5,755 97,783 10,369 251,748
Cost of Shares Redeemed ............. -- -- (5,904) (105,183) (8,103) (198,885)
Converted to Class A Shares
(Note 9) ......................... -- -- (23,923) (488,911) -- --
---------- ------------- ---------- ------------- ---------- -------------
Total Class R Share
Transactions .................. -- -- (24,072) (496,311) 2,266 52,863
---------- ------------- ---------- ------------- ---------- -------------
Net Increase (Decrease) from Capital
Stock Activity ................... (1,579,018) $ (37,821,926) (1,872,837) $ (30,958,842) (2,627,845) $ (59,266,369)
========== ============= ========== ============= ========== =============
Amounts designated as "--" are either $0 or have been rounded to $0.
(1) For the nine months ended July 31, 2009, (see Note 9 in the notes to
financial statements for details of the Reorganization.)
(2) For the year ended October 31.
The accompanying notes are an integral part of the financial statements.
154 HIGHMARK(R) FUNDS
SMALL CAP ADVANTAGE FUND SMALL CAP VALUE FUND
--------------------------------------------- -------------------------------------------------------
2010 2009 2010 2009
SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS
--------------------------------------------- -------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares
Issued .......... 311,157 $ 4,189,969 828,276 $ 9,144,141 558,388 $ 6,254,693 926,353 $ 7,668,445
Reinvestment of
Dividends and
Distributions ... 3,174 42,430 1,332 14,597 23,696 254,734 152,472 1,187,566
Cost of Shares
Redeemed ........ (560,001) (7,738,957) (605,983) (6,958,243) (1,180,392) (12,936,459) (4,720,467) (39,331,966)
-------- ----------- -------- ------------ ------------ ------------- ---------- -------------
Total Fiduciary
Share
Transactions .. (245,670) (3,506,558) 223,625 2,200,495 (598,308) (6,427,032) (3,641,642) (30,475,955)
-------- ----------- -------- ------------ ------------ ------------- ---------- -------------
Class A Shares:
Proceeds from Shares
Issued .......... 5,829 77,893 25,518 342,008 333,646 3,724,968 2,766,088 22,097,944
Reinvestment of
Dividends and
Distributions ... 44 587 41 454 12,588 131,670 94,345 715,309
Cost of Shares
Redeemed ........ (3,675) (53,481) (16,604) (168,756) (1,523,816) (17,000,290) (2,130,544) (17,304,559)
Converted from
Class R
(Note 9) ........ -- -- -- -- -- -- -- --
-------- ----------- -------- ------------ ------------ ------------- ---------- -------------
Total Class A
Share
Transactions .. 2,198 24,999 8,955 173,706 (1,177,582) (13,143,652) 729,889 5,508,694
-------- ----------- -------- ------------ ------------ ------------- ---------- -------------
Class B Shares:
Proceeds from Shares
Issued .......... -- -- -- -- 14,739 149,738 5,238 26,470
Reinvestment of
Dividends and
Distributions ... -- -- -- -- 1,321 13,069 8,623 61,445
Cost of Shares
Redeemed ........ -- -- -- -- (190,059) (1,983,886) (215,078) (1,585,543)
-------- ----------- -------- ------------ ------------ ------------- ---------- -------------
Total Class B
Share
Transactions .. -- -- -- -- (173,999) (1,821,079) (201,217) (1,497,628)
-------- ----------- -------- ------------ ------------ ------------- ---------- -------------
Class C Shares:
Proceeds from Shares
Issued .......... 1,464 19,495 511 7,873 23,462 232,821 75,050 545,909
Reinvestment of
Dividends and
Distributions ... -- -- -- -- 2,775 27,254 14,528 103,035
Cost of Shares
Redeemed ........ (3,514) (47,431) (1,191) (12,406) (173,958) (1,772,414) (300,387) (2,206,576)
-------- ----------- -------- ------------ ------------ ------------- ---------- -------------
Total Class C
Share
Transactions .. (2,050) (27,936) (680) (4,533) (147,721) (1,512,339) (210,809) (1,557,632)
-------- ----------- -------- ------------ ------------ ------------- ---------- -------------
Class F Shares:
Proceeds from Shares
Issued .......... -- -- -- -- -- -- -- --
Cost of Shares
Redeemed ........ -- -- -- -- -- -- -- --
-------- ----------- -------- ------------ ------------ ------------- ---------- -------------
Total Class F
Share
Transactions .. -- -- -- -- -- -- -- --
-------- ----------- -------- ------------ ------------ ------------- ---------- -------------
Class R Shares:
Proceeds from Shares
Issued .......... -- -- -- -- -- -- -- --
Cost of Shares
Redeemed ........ -- -- -- -- -- -- -- --
Converted to Class A
Shares
(Note 9) ........ -- -- -- -- -- -- -- --
-------- ----------- -------- ------------ ------------ ------------- ---------- -------------
Total Class R
Share
Transactions .. -- -- -- -- -- -- -- --
-------- ----------- -------- ------------ ------------ ------------- ---------- -------------
Net Increase
(Decrease) from
Capital Stock
Activity ........ (245,522) $(3,509,495) 231,900 $ 2,369,668 $ (2,097,610) $ (22,904,102) (3,323,779) $ (28,022,521)
======== =========== ======== ============ ============ ============= ========== =============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 155
STATEMENTS OF CHANGES IN NET ASSETS - CAPITAL STOCK ACTIVITY
FOR THE YEARS OR PERIODS ENDED JULY 31 (UNLESS OTHERWISE INDICATED)
VALUE MOMENTUM FUND CAPITAL GROWTH ALLOCATION FUND
---------------------------------------------------- -----------------------------------------------
2010 2009 2010 2009
SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS
---------------------------------------------------- -----------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares
Issued .......... 2,010,995 $ 27,393,741 3,386,519 $ 39,984,032 1,274 $ 21,363 2,267 $ 33,840
Reinvestment of
Dividends and
Distributions ... 165,801 2,261,189 1,778,000 19,708,200 112 2,035 1,009 13,969
Cost of Shares
Redeemed ........ (4,325,937) (58,876,842) (5,022,053) (62,298,577) (2,047) (35,702) (3) (40)
---------- ------------- ---------- ------------- -------- ------------ -------- ------------
Total Fiduciary
Share
Transactions .. (2,149,141) (29,221,912) 142,466 (2,606,345) (661) (12,304) 3,273 47,769
---------- ------------- ---------- ------------- -------- ------------ -------- ------------
Class A Shares:
Proceeds from Shares
Issued .......... 202,680 2,757,666 175,910 1,995,033 275,110 4,942,782 146,815 2,268,083
Subscriptions from
Reorganizations
Class A
(Note 9) ........ -- -- 5,111,195 58,953,550 -- -- -- --
Subscriptions from
Reorganizations
Class R
(Note 9) ........ -- -- 20,183 232,791 -- -- -- --
Reinvestment of
Dividends and
Distributions ... 49,603 673,628 127,997 1,417,566 9,509 173,229 167,161 2,306,487
Cost of Shares
Redeemed ........ (1,140,055) (15,420,514) (661,297) (7,754,507) (453,287) (8,195,630) (640,253) (9,713,470)
---------- ------------- ---------- ------------- -------- ------------ -------- ------------
Total Class A
Share
Transactions .... (887,772) (11,989,220) 4,773,988 54,844,433 (168,668) (3,079,619) (326,277) (5,138,900)
---------- ------------- ---------- ------------- -------- ------------ -------- ------------
Class B Shares:
Proceeds from Shares
Issued .......... -- -- 1,459 19,373 -- -- -- --
Subscriptions from
Reorganizations
Class B
(Note 9) ........ -- -- 362,746 4,095,835 -- -- -- --
Reinvestment of
Dividends and
Distributions ... 1,122 14,411 18,432 199,092 -- -- -- --
Cost of Shares
Redeemed ........ (224,343) (3,005,311) (123,880) (1,416,493) -- -- -- --
---------- ------------- ---------- ------------- -------- ------------ -------- ------------
Total Class B
Share
Transactions .... (223,221) (2,990,900) 258,757 2,897,807 -- -- -- --
---------- ------------- ---------- ------------- -------- ------------ -------- ------------
Class C Shares:
Proceeds from Shares
Issued .......... 15,078 201,967 14,236 163,839 168,565 3,011,984 99,859 1,485,062
Subscriptions from
Reorganizations
Class C
(Note 9) ........ -- -- 206,175 2,318,542 -- -- -- --
Reinvestment of
Dividends and
Distributions 745 9,603 7,559 81,284 2,489 44,921 81,310 1,096,052
Cost of Shares
Redeemed ........ (82,054) (1,071,331) (57,319) (663,071) (174,042) (3,066,550) (301,445) (5,020,578)
---------- ------------- ---------- ------------- -------- ------------ -------- ------------
Total Class C
Share
Transactions .... (66,231) (859,761) 170,651 1,900,594 (2,988) (9,645) (120,276) (2,439,464)
---------- ------------- ---------- ------------- -------- ------------ -------- ------------
Net Increase
(Decrease) from
Capital Stock
Activity ........ (3,326,365) $ (45,061,793) 5,345,862 $ 57,036,489 (172,317) $ (3,101,568) (443,280) $ (7,530,595)
========== ============= ========== ============= ======== ============ ======== ============
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
156 HIGHMARK(R) FUNDS
DIVERSIFIED EQUITY ALLOCATION FUND GROWTH & INCOME ALLOCATION FUND
------------------------------------------------ ----------------------------------------------------
2010 2009 2010 2009
SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS
------------------------------------------------ ----------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares
Issued .......... 30,157 $ 471,245 5,827 $ 68,428 -- $ -- 1,829 $ 32,460
Reinvestment of
Dividends and
Distributions ... 12 182 36 423 103 1,948 562 8,505
Cost of Shares
Redeemed ........ (999) (15,845) (4,823) (53,041) (55) (1,000) (152) (2,517)
---------- ---------- -------- ----------- --------- ----------- --------- -------------
Total Fiduciary
Share
Transactions .. 29,170 455,582 1,040 15,810 48 948 2,239 38,448
---------- ---------- -------- ----------- --------- ----------- --------- -------------
Class A Shares:
Proceeds from Shares
Issued .......... 46,949 752,397 54,827 697,621 322,699 6,090,425 190,030 3,101,372
Subscriptions from
Reorganizations
Class A
(Note 9) ........ -- -- -- -- -- -- -- --
Subscriptions from
Reorganizations
Class R
(Note 9) ........ -- -- -- -- -- -- -- --
Reinvestment of
Dividends and
Distributions ... 514 8,105 3,736 43,695 15,481 291,400 127,615 1,931,010
Cost of Shares
Redeemed ........ (45,379) (711,877) (35,370) (461,584) (318,698) (5,921,378) (739,676) (11,599,081)
---------- ---------- -------- ----------- --------- ----------- --------- -------------
Total Class A
Share
Transactions .... 2,084 48,625 23,193 279,732 19,482 460,447 (422,031) (6,566,699)
---------- ---------- -------- ----------- --------- ----------- --------- -------------
Class B Shares:
Proceeds from Shares
Issued .......... -- -- -- -- -- -- -- --
Subscriptions from
Reorganizations
Class B
(Note 9) ........ -- -- -- -- -- -- -- --
Reinvestment of
Dividends and
Distributions ... -- -- -- -- -- -- -- --
Cost of Shares
Redeemed ........ -- -- -- -- -- -- -- --
---------- ---------- -------- ----------- --------- ----------- --------- -------------
Total Class B
Share
Transactions .... -- -- -- -- -- -- -- --
---------- ---------- -------- ----------- --------- ----------- --------- -------------
Class C Shares:
Proceeds from Shares
Issued .......... 54,439 859,412 163,453 1,941,152 163,293 3,035,161 201,457 3,171,948
Subscriptions from
Reorganizations
Class C
(Note 9) ........ -- -- -- -- -- -- -- --
Reinvestment of
Dividends and
Distributions ... 127 1,983 3,514 40,518 5,460 102,279 70,169 1,045,651
Cost of Shares
Redeemed ........ (29,284) (444,697) (51,384) (642,729) (188,909) (3,503,397) (298,029) (4,682,219)
---------- ---------- -------- ----------- --------- ----------- --------- -------------
Total Class C
Share
Transactions .... 25,282 416,698 115,583 1,338,941 (20,156) (365,957) (26,403) (464,620)
---------- ---------- -------- ----------- --------- ----------- --------- -------------
Net Increase
(Decrease) from
Capital Stock
Activity ........ 56,536 $ 920,905 139,816 $ 1,634,483 (626) $ 95,438 (446,195) $ (6,992,871)
========== ========== ======== =========== ========= =========== ========= =============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 157
STATEMENTS OF CHANGES IN NET ASSETS - CAPITAL STOCK ACTIVITY
FOR THE YEARS OR PERIODS ENDED JULY 31 (UNLESS OTHERWISE INDICATED)
INCOME PLUS ALLOCATION FUND BOND FUND
------------------------------------------- --------------------------------------------------
2010 2009 2010 2009
SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS
------------------------------------------- --------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued .. 902 $ 17,500 5,704 $ 100,000 5,574,740 $ 61,688,835 4,194,223 $ 43,413,712
Reinvestment of Dividends and
Distributions .............. 224 4,359 367 6,175 677,296 7,489,780 704,102 7,245,405
Cost of Shares Redeemed ...... (268) (5,268) -- -- (5,751,601) (63,781,540) (9,323,928) (95,805,703)
-------- ---------- -------- ----------- ---------- ------------ ---------- ------------
Total Fiduciary Share
Transactions ............. 858 16,591 6,071 106,175 500,435 5,397,075 (4,425,603) (45,146,586)
-------- ---------- -------- ----------- ---------- ------------ ---------- ------------
Class A Shares:
Proceeds from Shares Issued .. 268,147 5,199,289 190,258 3,145,881 977,218 10,658,953 526,472 5,362,145
Reinvestment of Dividends and
Distributions .............. 6,062 117,980 13,838 231,777 67,090 730,602 93,190 942,993
Cost of Shares Redeemed ...... (121,885) (2,351,233) (126,354) (2,188,486) (603,596) (6,576,638) (1,500,998) (15,272,723)
-------- ---------- -------- ----------- ---------- ------------ ---------- ------------
Total Class A Share
Transactions ............. 152,324 2,966,036 77,742 1,189,172 440,712 4,812,917 (881,336) (8,967,585)
-------- ---------- -------- ----------- ---------- ------------ ---------- ------------
Class B Shares:
Proceeds from Shares Issued .. -- -- -- -- 8,791 96,035 5,918 59,650
Reinvestment of Dividends and
Distributions .............. -- -- -- -- 5,214 56,427 10,598 106,823
Cost of Shares Redeemed ...... -- -- -- -- (157,571) (1,706,948) (168,799) (1,709,358)
-------- ---------- -------- ----------- ---------- ------------ ---------- ------------
Total Class B Share
Transactions ............. -- -- -- -- (143,566) (1,554,486) (152,283) (1,542,885)
-------- ---------- -------- ----------- ---------- ------------ ---------- ------------
Class C Shares:
Proceeds from Shares Issued .. 151,534 2,896,971 107,851 1,853,720 293,071 3,181,597 130,509 1,336,198
Reinvestment of Dividends and
Distributions .............. 2,454 47,464 8,083 133,596 6,797 73,817 1,354 13,876
Cost of Shares Redeemed ...... (47,070) (908,824) (82,224) (1,406,716) (50,502) (548,904) (26,810) (267,297)
-------- ---------- -------- ----------- ---------- ------------ ---------- ------------
Total Class C Share
Transactions ............. 106,918 2,035,611 33,710 580,600 249,366 2,706,510 105,053 1,082,777
-------- ---------- -------- ----------- ---------- ------------ ---------- ------------
Net Increase (Decrease) from
Capital Stock Activity ..... 260,100 $5,018,238 117,523 $ 1,875,947 1,046,947 $ 11,362,016 (5,354,169) $(54,574,279)
======== ========== ======== =========== ========== ============ ========== ============
Amounts designated as "--" are either $0 or have been rounded to $0.
(1) Class C Shares resumed operations on December 4, 2009.
The accompanying notes are an integral part of the financial statements.
158 HIGHMARK(R) FUNDS
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND NATIONAL INTERMEDIATE TAX-FREE BOND FUND
-------------------------------------------------- --------------------------------------------------
2010 2009 2010(1) 2009
SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS
-------------------------------------------------- --------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares
Issued .............. 3,688,083 $ 37,392,969 2,177,258 $ 21,627,498 1,577,838 $ 17,912,769 2,012,825 $ 22,416,972
Reinvestment of
Dividends and
Distributions ....... 82,682 839,016 58,451 576,060 38,588 437,757 21,024 232,945
Cost of Shares
Redeemed ............ (2,399,811) (24,338,568) (1,800,291) (17,822,029) (1,245,952) (14,108,536) (1,081,373) (11,977,721)
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Total Fiduciary Share
Transactions ...... 1,370,954 13,893,417 435,418 4,381,529 370,474 4,241,990 952,476 10,672,196
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Class A Shares:
Proceeds from Shares
Issued .............. 3,689,289 37,294,890 3,154,876 31,146,542 1,122,311 12,713,768 1,404,828 15,659,510
Reinvestment of
Dividends and
Distributions ....... 105,392 1,064,003 79,689 785,680 34,099 386,698 23,858 264,184
Cost of Shares
Redeemed ............ (1,212,513) (12,244,600) (1,249,857) (12,362,822) (932,435) (10,563,632) (356,054) (3,973,695)
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Total Class A Share
Transactions ...... 2,582,168 26,114,293 1,984,708 19,569,400 223,975 2,536,834 1,072,632 11,949,999
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Class B Shares:
Proceeds from Shares
Issued .............. -- -- 1 6 -- -- -- --
Reinvestment of
Dividends and
Distributions ....... 1,992 20,097 5,016 49,278 -- -- -- --
Cost of Shares
Redeemed ............ (102,055) (1,028,213) (175,521) (1,731,414) -- -- -- --
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Total Class B Share
Transactions ...... (100,063) (1,008,116) (170,504) (1,682,130) -- -- -- --
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Class C Shares:
Proceeds from Shares
Issued .............. 1,049,800 10,572,230 445,680 4,410,987 204,826 2,323,977 -- --
Reinvestment of
Dividends and
Distributions ....... 17,578 176,943 5,536 54,559 914 10,402 -- --
Cost of Shares
Redeemed ............ (99,602) (1,002,909) (87,044) (856,014) (9) (100) -- --
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Total Class C Share
Transactions ...... 967,776 9,746,264 364,172 3,609,532 205,731 2,334,279 -- --
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Net Increase (Decrease)
from Capital Stock
Activity ............ 4,820,835 $ 48,745,858 2,613,794 $ 25,878,331 800,180 $ 9,113,103 2,025,108 $ 22,622,195
========== ============ ========== ============ ========== ============ ========== ============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 159
STATEMENTS OF CHANGES IN NET ASSETS - CAPITAL STOCK ACTIVITY
FOR THE YEARS OR PERIODS ENDED JULY 31 (UNLESS OTHERWISE INDICATED)
SHORT TERM BOND FUND
------------------------------------------------------
2010 2009
SHARES DOLLARS SHARES DOLLARS
------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ................................. 3,666,010 $ 36,907,146 2,115,604 $ 20,814,447
Reinvestment of Dividends and Distributions ................. 101,725 1,024,311 92,677 907,288
Cost of Shares Redeemed ..................................... (1,885,497) (19,007,646) (2,414,106) (23,599,590)
---------- ------------ ---------- ------------
Total Fiduciary Share Transactions ........................ 1,882,238 18,923,811 (205,825) (1,877,855)
---------- ------------ ---------- ------------
Class A Shares:
Proceeds from Shares Issued ................................. 2,281,098 22,943,512 1,025,504 10,101,777
Reinvestment of Dividends and Distributions ................. 25,811 259,610 5,260 51,817
Cost of Shares Redeemed ..................................... (1,013,278) (10,202,619) (116,327) (1,145,206)
---------- ------------ ---------- ------------
Total Class A Share Transactions .......................... 1,293,631 13,000,503 914,437 9,008,388
---------- ------------ ---------- ------------
Class B Shares:
Proceeds from Shares Issued ................................. -- -- -- --
Reinvestment of Dividends and Distributions ................. -- -- -- --
Cost of Shares Redeemed ..................................... -- -- -- --
---------- ------------ ---------- ------------
Total Class B Share Transactions .......................... -- -- -- --
---------- ------------ ---------- ------------
Class C Shares:
Proceeds from Shares Issued ................................. 1,546,664 15,742,015 292,625 2,923,619
Reinvestment of Dividends and Distributions ................. 14,855 151,159 1,839 18,304
Cost of Shares Redeemed ..................................... (150,532) (1,532,857) (22,816) (225,841)
---------- ------------ ---------- ------------
Total Class C Share Transactions .......................... 1,410,987 14,360,317 271,648 2,716,082
---------- ------------ ---------- ------------
Net Increase (Decrease) from Capital Stock Activity ......... 4,586,856 $ 46,284,631 980,260 $ 9,846,615
========== ============ ========== ============
Amounts designated as "--" are either $0 or have been rounded to $0.
(1) For the nine months ended July 31, 2009, (see Note 9 in the notes to
financial statements for details of the Reorganization.)
(2) For the year ended October 31.
The accompanying notes are an integral part of the financial statements.
160 HIGHMARK(R) FUNDS
WISCONSIN TAX-EXEMPT FUND
---------------------------------------------------------------------------------
2010 2009(1) 2008(2)
SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS
---------------------------------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ....... -- $ -- -- $ -- -- $ --
Reinvestment of Dividends
and Distributions ............... -- -- -- -- -- --
Cost of Shares Redeemed ........... -- -- -- -- -- --
---------- ------------ ---------- ------------ ---------- ------------
Total Fiduciary Share
Transactions .................. -- -- -- -- -- --
---------- ------------ ---------- ------------ ---------- ------------
Class A Shares:
Proceeds from Shares Issued ....... 1,258,261 13,085,247 732,043 7,218,565 2,323,470 23,704,708
Reinvestment of Dividends
and Distributions ............... 335,617 3,487,869 265,911 2,635,797 392,824 3,981,841
Cost of Shares Redeemed ........... (1,550,661) (16,109,882) (2,036,838) (20,096,393) (3,028,663) (30,629,842)
---------- ------------ ---------- ------------ ---------- ------------
Total Class A Share
Transactions .................. 43,217 463,234 (1,038,884) (10,242,031) (312,369) (2,943,293)
---------- ------------ ---------- ------------ ---------- ------------
Class B Shares:
Proceeds from Shares Issued ....... 6,723 68,395 5,755 57,500 27,314 279,292
Reinvestment of Dividends
and Distributions ............... 4,307 44,676 3,569 35,326 5,618 56,884
Cost of Shares Redeemed ........... (46,583) (482,545) (43,744) (430,518) (31,470) (318,947)
---------- ------------ ---------- ------------ ---------- ------------
Total Class B Share
Transactions .................. (35,553) (369,474) (34,420) (337,692) 1,462 17,229
---------- ------------ ---------- ------------ ---------- ------------
Class C Shares:
Proceeds from Shares Issued ....... 449,614 4,686,551 140,573 1,402,067 144,068 1,463,956
Reinvestment of Dividends
and Distributions ............... 15,182 157,657 8,532 84,490 13,309 134,639
Cost of Shares Redeemed ........... (132,988) (1,375,020) (140,281) (1,378,485) (173,113) (1,719,898)
---------- ------------ ---------- ------------ ---------- ------------
Total Class C Share
Transactions .................. 331,808 3,469,188 8,824 108,072 (15,736) (121,303)
---------- ------------ ---------- ------------ ---------- ------------
Net Increase (Decrease)
from Capital Stock
Activity ........................ 339,472 $ 3,562,948 (1,064,480) $(10,471,651) (326,643) $ (3,047,367)
========== ============ ========== ============ ========== ============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 161
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FOR THE YEARS OR PERIODS ENDED JULY 31, (UNLESS OTHERWISE INDICATED)
DIVIDENDS AND
INVESTMENT ACTIVITIES DISTRIBUTIONS
------------------------------- --------------------
NET
ASSET NET REALIZED TOTAL
VALUE, NET AND UNREALIZED TOTAL NET FROM
BEGINNING INVESTMENT GAIN (LOSS) ON FROM INVESTMENT CAPITAL DIVIDENDS AND REDEMPTION
OF PERIOD INCOME (LOSS)+ INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS FEES
- ------------------------------------------------------------------------------------------------------------------------------------
- -------------
BALANCED FUND
- -------------
FIDUCIARY SHARES
2010 $11.31 $ 0.223 $ 1.197 $ 1.420 $(0.170) $ -- $(0.170) $ --
2009 12.58 0.211 (1.273)~ (1.062) (0.208) -- (0.208) --
2008 14.95 0.292 (1.141) (0.849) (0.285) (1.236) (1.521) --
2007 14.06 0.296 1.300 1.596 (0.301) (0.405) (0.706) --
2006 13.81 0.257 0.258 0.515 (0.265) -- (0.265) --
CLASS A SHARES
2010 $11.29 $ 0.192 $ 1.186 $ 1.378 $(0.138) $ -- $(0.138) $ --
2009 12.56 0.185 (1.270)~ (1.085) (0.185) -- (0.185) --
2008 14.92 0.256 (1.130) (0.874) (0.250) (1.236) (1.486) --
2007 14.04 0.260 1.291 1.551 (0.266) (0.405) (0.671) --
2006 13.79 0.224 0.258 0.482 (0.232) -- (0.232) --
CLASS B SHARES
2010 $11.25 $ 0.118 $ 1.188 $ 1.306 $(0.056) $ -- $(0.056) $ --
2009 12.52 0.122 (1.267)~ (1.145) (0.125) -- (0.125) --
2008 14.87 0.175 (1.123) (0.948) (0.166) (1.236) (1.402) --
2007 14.00 0.170 1.282 1.452 (0.177) (0.405) (0.582) --
2006 13.75 0.138 0.259 0.397 (0.147) -- (0.147) --
CLASS C SHARES
2010 $11.22 $ 0.118 $ 1.183 $ 1.301 $(0.061) $ -- $(0.061) $ --
2009 12.49 0.121 (1.264)~ (1.143) (0.127) -- (0.127) --
2008 14.85 0.171 (1.128) (0.957) (0.167) (1.236) (1.403) --
2007 13.98 0.171 1.284 1.455 (0.180) (0.405) (0.585) --
2006 13.73 0.138 0.261 0.399 (0.149) -- (0.149) --
- --------------------
COGNITIVE VALUE FUND
- --------------------
FIDUCIARY SHARES
2010 $ 7.87 $ 0.058 $ 1.503## $ 1.561 $(0.071) $ -- $(0.071) $ --#
2009 10.23 0.082 (2.354) (2.272) (0.088) -- (0.088) --#
2008 13.03 0.082 (1.405) (1.323) (0.097) (1.380) (1.477) --#
2007 13.03 0.078 1.475 1.553 (0.059) (1.494) (1.553) --
2006 (1) 13.38 0.011 (0.361) (0.350) -- -- -- --
CLASS A SHARES
2010 $ 7.89 $ 0.030 $ 1.501## $ 1.531 $(0.051) $ -- $(0.051) $ --#
2009 10.19 0.056 (2.341) (2.285) (0.015) -- (0.015) --#
2008 12.97 0.041 (1.390) (1.349) (0.051) (1.380) (1.431) --#
2007 13.02 0.037 1.461 1.498 (0.054) (1.494) (1.548) --
2006 (2) 13.53 0.029 (0.539) (0.510) -- -- -- --
CLASS C SHARES
2010 $ 7.68 $(0.022) $ 1.473## $ 1.451 $(0.021) $ -- $(0.021) $ --#
2009 10.04 0.008 (2.316) (2.308) (0.052) -- (0.052) --#
2008 12.89 (0.029) (1.380) (1.409) (0.061) (1.380) (1.441) --#
2007 12.98 (0.043) 1.447 1.404 -- (1.494) (1.494) --
2006 (2) 13.53 (0.013) (0.537) (0.550) -- -- -- --
CLASS M SHARES
2010 $ 7.87 $ 0.065 $ 1.508## $ 1.573 $(0.073) $ -- $(0.073) $ --#
2009 10.22 0.083 (2.345) (2.262) (0.088) -- (0.088) --#
2008 13.02 0.084 (1.407) (1.323) (0.097) (1.380) (1.477) --#
2007 13.02 0.088 1.465 1.553 (0.059) (1.494) (1.553) --
2006 (3) 13.59 0.056 1.155 1.211 (0.033) (1.748) (1.781) --
2005 (4) 12.79 0.03 2.08 2.11 (0.03) (1.28) (1.31) --
RATIO
OF EXPENSES
TO AVERAGE RATIO OF
NET NET NET ASSETS NET
ASSET ASSETS, RATIO EXCLUDING INVESTMENT
VALUE, END OF EXPENSES FEE WAIVERS INCOME (LOSS) PORTFOLIO
END TOTAL OF PERIOD TO AVERAGE AND REDUCTION TO AVERAGE TURNOVER
OF PERIOD RETURN** (000) NET ASSETS OF EXPENSES NET ASSETS RATE
- -------------------------------------------------------------------------------------------------------------------
- -------------
BALANCED FUND
- -------------
FIDUCIARY SHARES
2010 $12.56 12.60% $ 17,552 0.98% 1.60% 1.81% 31%
2009 11.31 (8.24) 16,799 0.97 1.56 2.01 48
2008 12.58 (6.52) 22,274 0.96 1.23 2.09 28
2007 14.95 11.47 33,427 0.94 1.12 1.99 23
2006 14.06 3.77 37,571 0.92 1.10 1.85 16
CLASS A SHARES
2010 $12.53 12.24% $ 5,657 1.23% 1.85% 1.56% 31%
2009 11.29 (8.46) 4,516 1.22 1.81 1.76 48
2008 12.56 (6.69) 5,829 1.21 1.48 1.84 28
2007 14.92 11.14 7,359 1.19 1.37 1.75 23
2006 14.04 3.52 7,065 1.17 1.34 1.61 16
CLASS B SHARES
2010 $12.50 11.62% $ 455 1.83% 2.35% 0.96% 31%
2009 11.25 (9.03) 544 1.82 2.31 1.16 48
2008 12.52 (7.21) 1,295 1.80 1.97 1.25 28
2007 14.87 10.44 2,277 1.79 1.87 1.15 23
2006 14.00 2.90 3,089 1.79 1.85 0.99 16
CLASS C SHARES
2010 $12.46 11.61% $ 510 1.83% 2.35% 0.96% 31%
2009 11.22 (9.03) 333 1.82 2.31 1.16 48
2008 12.49 (7.29) 373 1.81 1.98 1.24 28
2007 14.85 10.48 393 1.79 1.87 1.15 23
2006 13.98 2.92 338 1.79 1.85 0.99 16
- --------------------
COGNITIVE VALUE FUND
- --------------------
FIDUCIARY SHARES
2010 $ 9.36 20.06%## $ 2,230 1.13% 1.33% 0.66% 152%
2009 7.87 (22.10) 1,837 1.03 1.34 1.11 141
2008 10.23 (10.97) 2,294 1.01 1.28 0.75 109
2007 13.03 11.97 2,270 0.94 1.23 0.58 103
2006 (1) 13.03 (2.62) 1,728 0.39* 0.39* 1.08* 76
CLASS A SHARES
2010 $ 9.37 19.60%## $ 655 1.45% 1.58% 0.34% 152%
2009 7.89 (22.40) 333 1.40 1.59 0.74 141
2008 10.19 (11.22) 509 1.41 1.53 0.35 109
2007 12.97 11.52 3,766 1.34 1.48 0.28 103
2006 (2) 13.02 (3.77) 483 0.94* 0.94* 0.67* 76
CLASS C SHARES
2010 $ 9.11 18.92%## $ 520 2.05% 2.08% (0.26)% 152%
2009 7.68 (22.92) 413 2.02 2.09 0.12 141
2008 10.04 (11.81) 50 2.02 2.05 (0.27) 109
2007 12.89 10.79 31 1.97 2.01 (0.32) 103
2006 (2) 12.98 (4.07) 3 1.86* 1.86* (0.29)* 76
CLASS M SHARES
2010 $ 9.37 20.08%## $ 70,390 1.05% 1.08% 0.74% 152%
2009 7.87 (22.02) 67,711 1.02 1.09 1.12 141
2008 10.22 (10.98) 91,371 1.01 1.03 0.75 109
2007 13.02 11.98 103,295 0.94 0.97 0.65 103
2006 (3) 13.02 10.13 91,652 1.00* 1.02* 0.51* 76
2005 (4) 13.59 17.14 86,500 1.09 1.09 0.25 59
The accompanying notes are an integral part of the financial statements.
162 HIGHMARK(R) FUNDS
DIVIDENDS AND
INVESTMENT ACTIVITIES DISTRIBUTIONS
------------------------------- --------------------
NET
ASSET NET REALIZED TOTAL
VALUE, NET AND UNREALIZED TOTAL NET FROM
BEGINNING INVESTMENT GAIN (LOSS) ON FROM INVESTMENT CAPITAL DIVIDENDS AND REDEMPTION
OF PERIOD INCOME (LOSS)+ INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS FEES
- ------------------------------------------------------------------------------------------------------------------------------------
- ----------------
CORE EQUITY FUND
- ----------------
FIDUCIARY SHARES
2010 $6.39 $ 0.081 $ 0.848 $ 0.929 $(0.079) $ -- $(0.079) $ --
2009 8.12 0.120 (1.733) (1.613) (0.117) -- (0.117) --
2008 9.96 0.132 (1.502) (1.370) (0.133) (0.337) (0.470) --
2007 8.78 0.104 1.178 1.282 (0.102) -- (0.102) --
2006 8.10 0.088 0.680 0.768 (0.088) -- (0.088) --
CLASS A SHARES
2010 $6.38 $ 0.061 $ 0.848 $ 0.909 $(0.059) $ -- $(0.059) $ --
2009 8.10 0.103 (1.722) (1.619) (0.101) -- (0.101) --
2008 9.93 0.108 (1.495) (1.387) (0.106) (0.337) (0.443) --
2007 8.76 0.072 1.175 1.247 (0.077) -- (0.077) --
2006 8.09 0.066 0.672 0.738 (0.068) -- (0.068) --
CLASS B SHARES
2010 $6.23 $ 0.017 $ 0.829 $ 0.846 $(0.016) $ -- $(0.016) $ --
2009 7.92 0.066 (1.687) (1.621) (0.069) -- (0.069) --
2008 9.74 0.050 (1.473) (1.423) (0.060) (0.337) (0.397) --
2007 8.61 0.018 1.152 1.170 (0.040) -- (0.040) --
2006 7.95 0.014 0.671 0.685 (0.025) -- (0.025) --
CLASS C SHARES
2010 $6.21 $ 0.017 $ 0.821 $ 0.838 $(0.018) $ -- $(0.018) $ --
2009 7.92 0.064 (1.699) (1.635) (0.075) -- (0.075) --
2008 9.74 0.052 (1.472) (1.420) (0.063) (0.337) (0.400) --
2007 8.61 0.013 1.155 1.168 (0.038) -- (0.038) --
2006 7.96 0.014 0.661 0.675 (0.025) -- (0.025) --
- --------------------
ENHANCED GROWTH FUND
- --------------------
FIDUCIARY SHARES
2010 $8.07 $(0.008) $ 1.151 $ 1.143 $(0.013) $ -- $(0.013) $ --
2009 9.26 0.009 (1.199) (1.190) -- -- -- --
2008 (5) 9.29 (0.022) (0.008) (0.030) -- -- -- --
CLASS A SHARES
2010 $7.96 $(0.042) $ 1.133 $ 1.091 $(0.001) $ -- $(0.001) $ --
2009 9.17 (0.018) (1.192) (1.210) -- -- -- --
2008 10.17 (0.065) (0.935) (1.000) -- -- -- --
2007 8.05 (0.075) 2.195 2.120 -- -- -- --
2006 (2) 9.29 (0.029) (1.211) (1.240) -- -- -- --
CLASS C SHARES
2010 $7.82 $(0.093) $ 1.113 $ 1.020 $ --# $ -- $ --# $ --
2009 9.07 (0.059) (1.191) (1.250) -- -- -- --
2008 10.12 (0.123) (0.927) (1.050) -- -- -- --
2007 8.06 (0.133) 2.193 2.060 -- -- -- --
2006 (2) 9.29 (0.025) (1.205) (1.230) -- -- -- --
RATIO
OF EXPENSES
TO AVERAGE RATIO OF
NET NET NET ASSETS NET
ASSET ASSETS, RATIO EXCLUDING INVESTMENT
VALUE, END OF EXPENSES FEE WAIVERS INCOME (LOSS) PORTFOLIO
END TOTAL OF PERIOD TO AVERAGE AND REDUCTION TO AVERAGE TURNOVER
OF PERIOD RETURN** (000) NET ASSETS OF EXPENSES NET ASSETS RATE
- -------------------------------------------------------------------------------------------------------------------
- ----------------
CORE EQUITY FUND
- ----------------
FIDUCIARY SHARES
2010 $ 7.24 14.56% $ 55,593 0.95% 1.22% 1.13% 93%
2009 6.39 (19.59) 60,454 0.92 1.19 2.00 42
2008 8.12 (14.35) 95,872 0.90 1.11 1.46 56
2007 9.96 14.61 127,266 0.91 1.08 1.05 79
2006 8.78 9.53 110,720 0.91 1.07 1.04 72
CLASS A SHARES
2010 $ 7.23 14.27% $ 2,640 1.23% 1.47% 0.85% 93%
2009 6.38 (19.83) 2,004 1.20 1.44 1.72 42
2008 8.10 (14.45) 3,400 1.19 1.37 1.17 56
2007 9.93 14.24 8,664 1.18 1.34 0.72 79
2006 8.76 9.15 2,749 1.17 1.34 0.79 72
CLASS B SHARES
2010 $ 7.06 13.58% $ 451 1.83% 1.97% 0.25% 93%
2009 6.23 (20.35) 900 1.80 1.94 1.12 42
2008 7.92 (15.08) 1,873 1.79 1.86 0.57 56
2007 9.74 13.57 2,663 1.78 1.83 0.19 79
2006 8.61 8.63 2,717 1.79 1.84 0.17 72
CLASS C SHARES
2010 $ 7.03 13.50% $ 441 1.83% 1.97% 0.25% 93%
2009 6.21 (20.52) 446 1.80 1.94 1.12 42
2008 7.92 (15.05) 664 1.77 1.84 0.59 56
2007 9.74 13.59 811 1.78 1.83 0.13 79
2006 8.61 8.50 310 1.79 1.84 0.17 72
- --------------------
ENHANCED GROWTH FUND
- --------------------
FIDUCIARY SHARES
2010 $ 9.20 14.17% $ 1,676 1.06% 1.33% (0.09)% 17%
2009 8.07 (12.85) 1,996 1.00 1.31 0.13 24
2008 (5) 9.26 (9.57) 1,655 0.99* 1.26* (0.27)* 21
CLASS A SHARES
2010 $ 9.05 13.71% $ 2,277 1.43% 1.58% (0.46)% 17%
2009 7.96 (13.20) 875 1.40 1.56 (0.26) 24
2008 9.17 (9.83) 654 1.38 1.51 (0.66) 21
2007 10.17 26.34 223 1.35 1.49 (0.77) 40
2006 (2) 8.05 (13.35) 39 1.35* 1.49* (1.10)* 53
CLASS C SHARES
2010 $ 8.84 13.04% $ 180 2.03% 2.08% (1.06)% 17%
2009 7.82 (13.78) 122 2.00 2.06 (0.87) 24
2008 9.07 (10.38) 288 1.99 2.02 (1.27) 21
2007 10.12 25.56 6 1.89 1.92 (1.38) 40
2006 (2) 8.06 (13.24) --++ 1.47* 1.49* (0.87)* 53
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
* ANNUALIZED.
** TOTAL RETURN DOES NOT REFLECT ANY APPLICABLE SALES CHARGE. TOTAL RETURN IS
FOR THE PERIOD INDICATED AND HAS NOT BEEN ANNUALIZED.
~ INCLUDES $0.012 OF FAIR FUNDS SETTLEMENT.
# AMOUNT REPRESENTS LESS THAN $0.001.
## INCLUDES PAYMENT BY AFFILIATES OF $0.001 PER SHARE. THE EFFECTS OF SUCH
PAYMENTS DID NOT AFFECT THE AMOUNT SHOWN AS TOTAL RETURN FOR THE PERIOD.
+ PER SHARE AMOUNTS CALCULATED USING AVERAGE SHARES METHOD.
++ AMOUNT REPRESENTS LESS THAN $1,000.
(1) COMMENCED OPERATIONS ON JULY 3, 2006.
(2) COMMENCED OPERATIONS ON APRIL 3, 2006.
(3) FOR THE TEN MONTH PERIOD ENDED JULY 31, 2006. ON APRIL 3, 2006, HIGHMARK
FUNDS ACQUIRED THE ASSETS AND ASSUMED THE IDENTIFIED LIABILITIES OF
BAILARD COGNITIVE VALUE FUND, BAILARD ENHANCED GROWTH FUND AND BAILARD
INTERNATIONAL EQUITY FUND (THE "BAILARD FUNDS"). THE FISCAL YEAR END OF
THE BAILARD FUNDS, THE PREDECESSOR FUNDS TO HIGHMARK COGNITIVE VALUE FUND,
HIGHMARK ENHANCED GROWTH FUND AND HIGHMARK INTERNATIONAL OPPORTUNITIES
FUND, WAS SEPTEMBER 30. THE FISCAL YEAR END OF THE SUCCESSOR HIGHMARK
FUNDS IS JULY 31.
(4) FOR THE YEAR ENDED SEPTEMBER 30.
(5) COMMENCED OPERATIONS ON SEPTEMBER 26, 2007.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 163
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FOR THE YEARS OR PERIODS ENDED JULY 31, (UNLESS OTHERWISE INDICATED)
DIVIDENDS AND
INVESTMENT ACTIVITIES DISTRIBUTIONS
------------------------------- --------------------
NET
ASSET NET REALIZED TOTAL
VALUE, NET AND UNREALIZED TOTAL NET FROM
BEGINNING INVESTMENT GAIN (LOSS) ON FROM INVESTMENT CAPITAL DIVIDENDS AND REDEMPTION
OF PERIOD INCOME (LOSS)+ INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS FEES
- ------------------------------------------------------------------------------------------------------------------------------------
- --------------------------------
ENHANCED GROWTH FUND (CONTINUED)
- --------------------------------
CLASS M SHARES
2010 $ 8.07 $(0.005) $ 1.150 $ 1.145 $(0.015) $ -- $(0.015) $ --
2009 9.27 0.009 (1.209) (1.200) -- -- -- --
2008 10.24 (0.026) (0.944) (0.970) -- -- -- --
2007 8.07 (0.035) 2.205 2.170 -- -- -- --
2006 (1) 8.78 (0.034) (0.676) (0.710) -- -- -- --
2005 (2) 7.89 0.03 0.94 0.97 (0.08) -- (0.08) --
- ------------------
EQUITY INCOME FUND
- ------------------
FIDUCIARY SHARES
2010 $ 6.97 $ 0.245 $ 0.834 $ 1.079 $(0.169) $ -- $(0.169) $ --
2009 (3) 6.89 0.003 0.077 0.080 -- -- -- --
CLASS A SHARES
2010 $ 6.97 $ 0.234 $ 0.883 $ 1.117 $(0.197) $ -- $(0.197) $ --
2009 (4) 7.37 0.150 (0.386) (0.236) (0.164) -- (0.164)++ --
2008 (5) 12.01 0.30^ (4.31) (4.01) (0.28) (0.35) (0.63) --
2007 (5) 11.43 0.29^ 0.85 1.14 (0.26) (0.30) (0.56) --
2006 (5) 9.77 0.29^ 1.70 1.99 (0.27) (0.06) (0.33) --
2005 (5)(6) 10.00 0.16^ (0.32) (0.16) (0.07) -- (0.07) --
CLASS B SHARES
2010 $ 6.99 $ 0.188 $ 0.877 $ 1.065 $(0.145) $ -- $(0.145) $ --
2009 (4) 7.35 0.116 (0.368) (0.252) (0.108) -- (0.108)++ --
2008 (5) 11.95 0.24^ (4.33) (4.09) (0.16) (0.35) (0.51) --
2007 (5) 11.38 0.22^ 0.83 1.05 (0.20) (0.28) (0.48) --
2006 (5) 9.74 0.22^ 1.69 1.91 (0.21) (0.06) (0.27) --
2005 (5)(6) 10.00 0.10^ (0.31) (0.21) (0.05) -- (0.05) --
CLASS C SHARES
2010 $ 6.94 $ 0.187 $ 0.868 $ 1.055 $(0.145) $ -- $(0.145) $ --
2009 (4) 7.33 0.115 (0.379) (0.264) (0.126) -- (0.126)++ --
2008 (5) 11.95 0.21^ (4.28) (4.07) (0.20) (0.35) (0.55) --
2007 (5) 11.40 0.22^ 0.82 1.04 (0.21) (0.28) (0.49) --
2006 (5) 9.74 0.21^ 1.71 1.92 (0.20) (0.06) (0.26) --
2005 (5)(7) 9.89 0.11^ (0.21) (0.10) (0.05) -- (0.05) --
- -----------------------
FUNDAMENTAL EQUITY FUND
- -----------------------
FIDUCIARY SHARES
2010 $16.28 $ 0.238 $ 1.671 $ 1.909 $(0.109) $ -- $(0.109) $ --
2009 (8) 20.00 0.181 (3.803) (3.622) (0.098) -- (0.098) --
CLASS A SHARES
2010 $16.25 $ 0.179 $ 1.680 $ 1.859 $(0.069) $ -- $(0.069) $ --
2009 (8) 20.00 0.114 (3.786) (3.672) (0.078) -- (0.078) --
CLASS C SHARES
2010 $16.14 $ 0.072 $ 1.767 $ 1.839 $(0.069) $ -- $(0.069) $ --
2009 (8) 20.00 0.023 (3.845) (3.822) (0.038) -- (0.038) --
- --------------------------
GENEVA MID CAP GROWTH FUND
- --------------------------
FIDUCIARY SHARES
2010 $15.04 $(0.110) $ 3.050 $ 2.940 $ -- $ -- $ -- $ --
2009 (9) 14.07 (0.006) 0.976 0.970 -- -- -- --
CLASS A SHARES
2010 $15.03 $(0.152) $ 3.042 $ 2.890 $ -- $ -- $ -- $ --
2009 (3) 13.53 (0.103) 1.603 1.500 -- -- -- --
2008 (4) 21.80 (0.17)^ (6.94) (7.11) -- (1.16) (1.16) --
2007 (4) 18.37 (0.18)^ 3.68 3.50 -- (0.07) (0.07) --
2006 (4) 16.57 (0.11)^ 1.91 1.80 -- -- -- --
2005 (4) 14.06 (0.12)^ 2.63 2.51 -- -- -- --
RATIO
OF EXPENSES
TO AVERAGE RATIO OF
NET NET NET ASSETS NET
ASSET ASSETS, RATIO EXCLUDING INVESTMENT
VALUE, END OF EXPENSES FEE WAIVERS INCOME (LOSS) PORTFOLIO
END TOTAL OF PERIOD TO AVERAGE AND REDUCTION TO AVERAGE TURNOVER
OF PERIOD RETURN** (000) NET ASSETS OF EXPENSES NET ASSETS RATE
- -------------------------------------------------------------------------------------------------------------------
- --------------------------------
ENHANCED GROWTH FUND (CONTINUED)
- --------------------------------
CLASS M SHARES
2010 $ 9.20 14.04% $ 64,408 1.03% 1.08% (0.06)% 17%
2009 8.07 (12.84) 65,867 1.00 1.06 0.13 24
2008 9.27 (9.47) 122,424 0.98 1.01 (0.26) 21
2007 10.24 26.89 137,818 0.93 0.97 (0.37) 40
2006 (1) 8.07 (8.09) 120,694 0.97* 0.98* (0.46)* 53
2005 (2) 8.78 12.24 129,300 1.00 1.00 0.37 8
- ------------------
EQUITY INCOME FUND
- ------------------
FIDUCIARY SHARES
2010 $ 7.88 15.50% $ 9 0.90% 1.80% 3.28% 46%
2009 (3) 6.97 1.16 76 0.90*~ 2.53*~ 3.43* 32
CLASS A SHARES
2010 $ 7.89 16.06% $ 9,976 1.15% 2.05% 3.03% 46%
2009 (4) 6.97 (2.93) 11,793 1.16*~ 2.47*~ 3.17* 32
2008 (5) 7.37 (34.84) 13,298 1.15 1.68 2.95 83
2007 (5) 12.01 10.23 28,991 1.15 1.42 2.51 85
2006 (5) 11.43 20.75 18,437 1.15 1.74 2.83 38
2005 (5)(6) 9.77 (1.58) 8,041 1.15* 2.71* 2.51* 44
CLASS B SHARES
2010 $ 7.91 15.25% $ 1,813 1.75% 2.55% 2.43% 46%
2009 (4) 6.99 (3.24) 2,341 1.87*~ 3.17*~ 2.45* 32
2008 (5) 7.35 (35.44) 3,121 1.90 2.42 2.23 83
2007 (5) 11.95 9.41 8,590 1.90 2.16 1.87 85
2006 (5) 11.38 19.91 7,613 1.90 2.48 2.05 38
2005 (5)(6) 9.74 (2.09) 2,969 1.90* 3.47* 1.75* 44
CLASS C SHARES
2010 $ 7.85 15.22% $ 2,194 1.75% 2.55% 2.43% 46%
2009 (4) 6.94 (3.39) 2,832 1.87*~ 3.17*~ 2.45* 32
2008 (5) 7.33 (35.38) 4,057 1.90 2.44 2.18 83
2007 (5) 11.95 9.39 7,171 1.90 2.16 1.81 85
2006 (5) 11.40 19.96 5,338 1.90 2.45 2.02 38
2005 (5)(7) 9.74 (1.00) 1,466 1.89* 3.47* 1.77* 44
- -----------------------
FUNDAMENTAL EQUITY FUND
- -----------------------
FIDUCIARY SHARES
2010 $18.08 11.78% $ 15,592 0.89% 1.67% 1.33% 26%
2009 (8) 16.28 (18.02) 11,450 0.82* 1.81* 1.22* 62
CLASS A SHARES
2010 $18.04 11.44% $ 5 1.22% 1.92% 1.00% 26%
2009 (8) 16.25 (18.29) 3 1.22* 2.06* 0.82* 62
CLASS C SHARES
2010 $17.91 11.39% $ 12 1.82% 2.42% 0.40% 26%
2009 (8) 16.14 (19.08) -- 1.82* 2.56* 0.22* 62
- --------------------------
GENEVA MID CAP GROWTH FUND
- --------------------------
FIDUCIARY SHARES
2010 $17.98 19.55% $ 19,588 1.11% 1.32% (0.63)% 26%
2009 (9) 15.04 6.89 1,459 1.13*~ 1.25*~ (0.50)* 24
CLASS A SHARES
2010 $17.92 19.22% $176,924 1.38% 1.57% (0.90)% 26%
2009 (3) 15.03 11.16 148,670 1.70*~ 1.72*~ (1.07)* 24
2008 (4) 13.53 (34.29) 132,592 1.38 1.38 (0.91) 22
2007 (4) 21.80 19.11 211,653 1.37 1.37 (0.90) 36
2006 (4) 18.37 10.86 184,239 1.36 1.36 (0.76) 22
2005 (4) 16.57 17.85 100,553 1.40 1.40 (0.98) 20
The accompanying notes are an integral part of the financial statements.
164 HIGHMARK(R) FUNDS
DIVIDENDS AND
INVESTMENT ACTIVITIES DISTRIBUTIONS
------------------------------- --------------------
NET
ASSET NET REALIZED TOTAL
VALUE, NET AND UNREALIZED TOTAL NET FROM
BEGINNING INVESTMENT GAIN (LOSS) ON FROM INVESTMENT CAPITAL DIVIDENDS AND REDEMPTION
OF PERIOD INCOME (LOSS)+ INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS FEES
- ------------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------
GENEVA MID CAP GROWTH FUND (CONTINUED)
- --------------------------------------
CLASS B SHARES
2010 $13.87 $(0.233) $ 2.803 $ 2.570 $ -- $ -- $ -- $ --
2009 (3) 12.55 (0.158) 1.478 1.320 -- -- -- --
2008 (4) 20.45 (0.34)^ (6.40) (6.74) -- (1.16) (1.16) --
2007 (4) 17.37 (0.38)^ 3.53 3.15 -- (0.07) (0.07) --
2006 (4) 15.79 (0.28)^ 1.86 1.58 -- -- -- --
2005 (4) 13.49 (0.24)^ 2.54 2.30 -- -- -- --
CLASS C SHARES
2010 $14.04 $(0.237) $ 2.837 $ 2.600 $ -- $ -- $ -- $ --
2009 (3) 12.70 (0.160) 1.500 1.340 -- -- -- --
2008 (4) 20.69 (0.28)^ (6.55) (6.83) -- (1.16) (1.16) --
2007 (4) 17.57 (0.31)^ 3.50 3.19 -- (0.07) (0.07) --
2006 (4) 15.97 (0.23)^ 1.83 1.60 -- -- -- --
2005 (4) 13.65 (0.20)^ 2.52 2.32 -- -- -- --
- ----------------------------
GENEVA SMALL CAP GROWTH FUND
- ----------------------------
FIDUCIARY SHARES
2010 $20.70 $(0.204) $ 3.954 $ 3.750 $ -- $ -- $ -- $ --#
2009 (10) 20.00 (0.018) 0.718 0.700 -- -- -- --
CLASS A SHARES
2010 $20.70 $(0.264) $ 3.954 $ 3.690 $ -- $ -- $ -- $ --#
2009 (10) 20.00 (0.025) 0.725 0.700 -- -- -- --
CLASS C SHARES
2010 $20.69 $(0.401) $ 3.941 $ 3.540 $ -- $ -- $ -- $ --#
2009 (10) 20.00 (0.039) 0.729 0.690 -- -- -- --
- --------------------------------
INTERNATIONAL OPPORTUNITIES FUND
- --------------------------------
FIDUCIARY SHARES
2010 $ 6.00 $ 0.092 $ 0.392 $ 0.484 $(0.154) $ -- $(0.154) $ --#
2009 8.48 0.117 (2.343) (2.226) (0.109) (0.145) (0.254) --#
2008 9.93 0.175 (1.106) (0.931) (0.155) (0.364) (0.519) --#
2007 8.53 0.154 2.203 2.357 (0.128) (0.829) (0.957) --
2006 (11) 8.69 0.073 (0.233) (0.160) -- -- -- --
RATIO
OF EXPENSES
TO AVERAGE RATIO OF
NET NET NET ASSETS NET
ASSET ASSETS, RATIO EXCLUDING INVESTMENT
VALUE, END OF EXPENSES FEE WAIVERS INCOME (LOSS) PORTFOLIO
END TOTAL OF PERIOD TO AVERAGE AND REDUCTION TO AVERAGE TURNOVER
OF PERIOD RETURN** (000) NET ASSETS OF EXPENSES NET ASSETS RATE
- ------------------------------------------------------------------------------------------------------------------
- --------------------------------------
GENEVA MID CAP GROWTH FUND (CONTINUED)
- --------------------------------------
CLASS B SHARES
2010 $16.44 18.53% $ 6,209 1.98% 2.07% (1.50)% 26%
2009 (3) 13.87 10.52 7,420 2.42*~ 2.42*~ (1.78)* 24
2008 (4) 12.55 (34.77) 8,143 2.13 2.13 (1.66) 22
2007 (4) 20.45 18.19 17,627 2.11 2.11 (1.65) 36
2006 (4) 17.37 10.01 23,823 2.11 2.11 (1.49) 22
2005 (4) 15.79 17.05 22,947 2.15 2.15 (1.73) 20
CLASS C SHARES
2010 $16.64 18.52% $18,896 1.98% 2.07% (1.50)% 26%
2009 (3) 14.04 10.55 14,708 2.42*~ 2.42*~ (1.79)* 24
2008 (4) 12.70 (34.80) 14,433 2.13 2.13 (1.66) 22
2007 (4) 20.69 18.21 21,790 2.12 2.12 (1.65) 36
2006 (4) 17.57 10.02 18,953 2.11 2.11 (1.50) 22
2005 (4) 15.97 17.00 11,395 2.15 2.15 (1.73) 20
- ----------------------------
GENEVA SMALL CAP GROWTH FUND
- ----------------------------
FIDUCIARY SHARES
2010 $24.45 18.12% $ 6,252 1.37% 2.48% (0.89)% 62%
2009 (10) 20.70 3.50 1,598 1.37* 8.34* (0.73)* 7
CLASS A SHARES
2010 $24.39 17.83% $ 3,220 1.62% 2.73% (1.15)% 62%
2009 (10) 20.70 3.50 1,988 1.62* 8.59* (0.98)* 7
CLASS C SHARES
2010 $24.23 17.11% $ 260 2.22% 3.23% (1.75)% 62%
2009 (10) 20.69 3.45 36 2.22* 9.09* (1.58)* 7
- --------------------------------
INTERNATIONAL OPPORTUNITIES FUND
- --------------------------------
FIDUCIARY SHARES
2010 $ 6.33 8.03% $79,237 1.44% 1.53% 1.44% 84%
2009 6.00 (25.64) 63,644 1.39 1.56 2.10 134
2008 8.48 (10.10) 97,714 1.34 1.50 1.86 86
2007 9.93 29.30 60,509 1.26 1.48 1.65 32
2006 (11) 8.53 (1.84) 13,422 1.29* 1.34* 2.65* 48
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. FOR NET
ASSETS AT END OF PERIOD, "--" IS AN AMOUNT LESS THAN $1,000.
* ANNUALIZED.
** TOTAL RETURN DOES NOT REFLECT ANY APPLICABLE SALES CHARGE. TOTAL RETURN IS
FOR THE PERIOD INDICATED AND HAS NOT BEEN ANNUALIZED.
~ RATIOS OF EXPENSES TO AVERAGE NET ASSETS INCLUDE INTEREST EXPENSES OF LESS
THAN 0.005% FOR THE PERIOD ENDED JULY 31, 2009, WHICH IS NOT INCLUDED IN
THE CONTRACTUAL EXPENSE LIMITATIONS. THE INTEREST EXPENSE IS FROM
UTILIZING A LINE OF CREDIT.
# AMOUNT REPRESENTS LESS THAN $0.001.
+ PER SHARE AMOUNTS CALCULATED USING AVERAGE SHARES METHOD, UNLESS OTHERWISE
INDICATED.
++ INCLUDES RETURN OF CAPITAL OF $0.005 FOR CLASS A SHARES AND $0.004 FOR
CLASS B SHARES AND CLASS C SHARES.
^ PER SHARE AMOUNTS CALCULATED USING SEC METHOD.
(1) FOR THE TEN MONTH PERIOD ENDED JULY 31, 2006. ON APRIL 3, 2006, HIGHMARK
FUNDS ACQUIRED THE ASSETS AND ASSUMED THE IDENTIFIED LIABILITIES OF
BAILARD COGNITIVE VALUE FUND, BAILARD ENHANCED GROWTH FUND AND BAILARD
INTERNATIONAL EQUITY FUND (THE "BAILARD FUNDS"). THE FISCAL YEAR END OF
THE BAILARD FUNDS, THE PREDECESSOR FUNDS TO HIGHMARK COGNITIVE VALUE FUND,
HIGHMARK ENHANCED GROWTH FUND AND HIGHMARK INTERNATIONAL OPPORTUNITIES
FUND, WAS SEPTEMBER 30. THE FISCAL YEAR END OF THE SUCCESSOR HIGHMARK
FUNDS IS JULY 31.
(2) FOR THE YEAR ENDED SEPTEMBER 30.
(3) COMMENCED OPERATIONS ON JULY 24, 2009.
(4) FOR THE NINE MONTH PERIOD ENDED JULY 31, 2009. ON JUNE 8, 2009, HIGHMARK
FUNDS ACQUIRED THE ASSETS AND ASSUMED THE IDENTIFIED LIABILITIES OF NORTH
TRACK EQUITY INCOME FUND, NORTH TRACK GENEVA GROWTH FUND, NORTH TRACK NYSE
ARCA TECH 100 INDEX FUND AND NORTH TRACK WISCONSIN TAX-EXEMPT FUND (THE
"NORTH TRACK FUNDS"). THE FISCAL YEAR END OF THE NORTH TRACK FUNDS, THE
PREDECESSOR FUNDS TO HIGHMARK EQUITY INCOME FUND, HIGHMARK GENEVA MID CAP
GROWTH FUND, HIGHMARK NYSE ARCA TECH 100 INDEX FUND AND HIGHMARK WISCONSIN
TAX-EXEMPT FUND, WAS OCTOBER 31. THE FISCAL YEAR END OF THE SUCCESSOR
HIGHMARK FUNDS IS JULY 31.
(5) FOR THE YEAR ENDED OCTOBER 31.
(6) COMMENCED OPERATIONS ON APRIL 1, 2005.
(7) COMMENCED OPERATIONS ON APRIL 4, 2005.
(8) COMMENCED OPERATIONS ON AUGUST 1, 2008.
(9) COMMENCED OPERATIONS ON JUNE 26, 2009.
(10) COMMENCED OPERATIONS ON JUNE 12, 2009.
(11) COMMENCED OPERATIONS ON APRIL 4, 2006.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 165
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FOR THE YEARS OR PERIODS ENDED JULY 31, (UNLESS OTHERWISE INDICATED)
DIVIDENDS AND
INVESTMENT ACTIVITIES DISTRIBUTIONS
------------------------------- --------------------
NET
ASSET NET REALIZED TOTAL
VALUE, NET AND UNREALIZED TOTAL NET FROM
BEGINNING INVESTMENT GAIN (LOSS) ON FROM INVESTMENT CAPITAL DIVIDENDS AND REDEMPTION
OF PERIOD INCOME (LOSS)+ INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS FEES
- ------------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------
INTERNATIONAL OPPORTUNITIES FUND (CONTINUED)
- --------------------------------------------
CLASS A SHARES
2010 $ 5.98 $ 0.082 $ 0.401 $ 0.483 $(0.143) $ -- $(0.143) $ --+++
2009 8.45 0.107 (2.340) (2.233) (0.092) (0.145) (0.237) --+++
2008 9.90 0.157 (1.098) (0.941) (0.145) (0.364) (0.509) --+++
2007 8.52 0.136 2.194 2.330 (0.121) (0.829) (0.950) --
2006 (1) 8.63 0.052 (0.184) (0.132) -- -- -- 0.022
CLASS C SHARES
2010 $ 5.92 $ 0.038 $ 0.390 $ 0.428 $(0.088) $ -- $(0.088) $ --+++
2009 8.35 0.068 (2.297) (2.229) (0.056) (0.145) (0.201) --+++
2008 9.81 0.090 (1.088) (0.998) (0.098) (0.364) (0.462) --+++
2007 8.49 0.056 2.193 2.249 (0.100) (0.829) (0.929) --
2006 (1) 8.63 0.034 (0.174) (0.140) -- -- -- --
CLASS M SHARES
2010 $ 6.00 $ 0.102 $ 0.398 $ 0.500 $(0.160) $ -- $(0.160) $ --+++
2009 8.48 0.124 (2.343) (2.219) (0.116) (0.145) (0.261) --+++
2008 9.93 0.187 (1.112) (0.925) (0.161) (0.364) (0.525) --+++
2007 8.52 0.139 2.229 2.368 (0.129) (0.829) (0.958) --
2006 (2) 7.54 0.095 1.219 1.314 (0.146) (0.188) (0.334) --
2005 (3) 5.79 0.07 1.73 1.80 (0.05) -- (0.05) --
- ---------------------
LARGE CAP GROWTH FUND
- ---------------------
FIDUCIARY SHARES
2010 $ 7.87 $ 0.101 $ 0.909 $ 1.010 $(0.070) $ -- $(0.070) $ --
2009 9.11 0.072 (1.263)^ (1.191) (0.049) -- (0.049) --
2008 10.03 0.068 (0.933) (0.865) (0.055) -- (0.055) --
2007 8.77 0.040 1.231 1.271 (0.011) -- (0.011) --
2006 8.61 0.009 0.170 0.179 (0.019) -- (0.019) --
CLASS A SHARES
2010 $ 7.74 $ 0.076 $ 0.891 $ 0.967 $(0.067) $ -- $(0.067) $ --
2009 8.95 0.051 (1.238)^ (1.187) (0.023) -- (0.023) --
2008 9.85 0.040 (0.916) (0.876) (0.024) -- (0.024) --
2007 8.63 0.014 1.206 1.220 -- -- -- --
2006 8.48 (0.013) 0.167 0.154 (0.004) -- (0.004) --
CLASS B SHARES
2010 $ 7.22 $ 0.023 $ 0.827 $ 0.850 $ -- $ -- $ -- $ --
2009 8.35 0.008 (1.138)^ (1.130) -- -- -- --
2008 9.23 (0.017) (0.863) (0.880) -- -- -- --
2007 8.13 (0.040) 1.140 1.100 -- -- -- --
2006 8.03 (0.064) 0.164 0.100 -- -- --
CLASS C SHARES
2010 $ 7.21 $ 0.023 $ 0.834 $ 0.857 $(0.047) $ -- $(0.047) $ --
2009 8.36 0.008 (1.158)^ (1.150) -- -- -- --
2008 9.23 (0.018) (0.852) (0.870) -- -- -- --
2007 8.14 (0.039) 1.129 1.090 -- -- -- --
2006 8.04 (0.064) 0.164 0.100 -- -- -- --
- --------------------
LARGE CAP VALUE FUND
- --------------------
FIDUCIARY SHARES
2010 $ 9.36 $ 0.191 $ 0.849 $ 1.040 $(0.130) $ -- $(0.130) $ --
2009 11.85 0.175 (2.489) (2.314) (0.176) -- (0.176) --
2008 15.16 0.208 (2.444) (2.236) (0.214) (0.860) (1.074) --
2007 13.67 0.211 1.483 1.694 (0.204) -- (0.204) --
2006 12.49 0.161 1.182 1.343 (0.163) -- (0.163) --
RATIO
OF EXPENSES
TO AVERAGE RATIO OF
NET NET NET ASSETS NET
ASSET ASSETS, RATIO EXCLUDING INVESTMENT
VALUE, END OF EXPENSES FEE WAIVERS INCOME (LOSS) PORTFOLIO
END TOTAL OF PERIOD TO AVERAGE AND REDUCTION TO AVERAGE TURNOVER
OF PERIOD RETURN** (000) NET ASSETS OF EXPENSES NET ASSETS RATE
- -------------------------------------------------------------------------------------------------------------------
- --------------------------------------------
INTERNATIONAL OPPORTUNITIES FUND (CONTINUED)
- --------------------------------------------
CLASS A SHARES
2010 $ 6.32 8.04% $ 6,693 1.60% 1.78% 1.28% 84%
2009 5.98 (25.77) 10,004 1.57 1.81 1.92 134
2008 8.45 (10.33) 17,766 1.53 1.75 1.68 86
2007 9.90 29.00 14,532 1.50 1.74 1.45 32
2006 (1) 8.52 (1.27) 1,952 1.69* 1.84* 1.88* 48
CLASS C SHARES
2010 $ 6.26 7.39% $ 1,975 2.28% 2.28% 0.60% 84%
2009 5.92 (26.34) 2,217 2.27 2.31 1.22 134
2008 8.35 (10.87) 4,582 2.23 2.25 0.98 86
2007 9.81 28.04 3,159 2.18 2.23 0.61 32
2006 (1) 8.49 (1.62) 731 2.28* 2.33* 1.23* 48
CLASS M SHARES
2010 $ 6.34 8.31% $133,321 1.28% 1.28% 1.60% 84%
2009 6.00 (25.55) 134,220 1.27 1.31 2.22 134
2008 8.48 (10.05) 232,701 1.23 1.25 1.98 86
2007 9.93 29.48 273,474 1.17 1.21 1.51 32
2006 (2) 8.52 17.96 202,134 1.25* 1.27* 1.41* 48
2005 (3) 7.54 31.32 170,000 1.45 1.45 1.13 74
- ---------------------
LARGE CAP GROWTH FUND
- ---------------------
FIDUCIARY SHARES
2010 $ 8.81 12.82% $ 60,078 0.99% 1.21% 1.16% 34%
2009 7.87 (12.97) 67,051 0.93 1.17 0.99 60
2008 9.11 (8.70) 92,418 0.94 1.11 0.68 43
2007 10.03 14.50 110,600 0.93 1.09 0.42 88
2006 8.77 2.07 103,454 0.89 1.07 0.10 68
CLASS A SHARES
2010 $ 8.64 12.48% $ 19,881 1.25% 1.46% 0.89% 34%
2009 7.74 (13.21) 17,543 1.21 1.42 0.72 60
2008 8.95 (8.92) 11,486 1.21 1.36 0.41 43
2007 9.85 14.14 14,284 1.19 1.34 0.15 88
2006 8.63 1.81 15,809 1.14 1.32 (0.15) 68
CLASS B SHARES
2010 $ 8.07 11.77% $ 3,126 1.85% 1.96% 0.29% 34%
2009 7.22 (13.53) 5,292 1.81 1.92 0.12 60
2008 8.35 (9.53) 3,279 1.81 1.85 (0.19) 43
2007 9.23 13.53 5,835 1.79 1.84 (0.45) 88
2006 8.13 1.25 7,519 1.76 1.83 (0.77) 68
CLASS C SHARES
2010 $ 8.02 11.88% $ 3,250 1.85% 1.96% 0.29% 34%
2009 7.21 (13.76) 3,481 1.81 1.92 0.12 60
2008 8.36 (9.43) 766 1.82 1.86 (0.20) 43
2007 9.23 13.39 1,097 1.79 1.84 (0.44) 88
2006 8.14 1.24 1,304 1.76 1.83 (0.77) 68
- --------------------
LARGE CAP VALUE FUND
- --------------------
FIDUCIARY SHARES
2010 $10.27 11.12% $ 97,347 0.97% 1.16% 1.85% 117%
2009 9.36 (19.43) 151,262 0.94 1.11 1.93 66
2008 11.85 (15.65) 171,314 0.90 1.09 1.53 65
2007 15.16 12.40 216,156 0.89 1.08 1.39 84
2006 13.67 10.82 168,092 0.92 1.08 1.23 81
The accompanying notes are an integral part of the financial statements.
166 HIGHMARK(R) FUNDS
DIVIDENDS AND
INVESTMENT ACTIVITIES DISTRIBUTIONS
------------------------------- --------------------
NET
ASSET NET REALIZED TOTAL
VALUE, NET AND UNREALIZED TOTAL NET FROM
BEGINNING INVESTMENT GAIN (LOSS) ON FROM INVESTMENT CAPITAL DIVIDENDS AND REDEMPTION
OF PERIOD INCOME (LOSS)+ INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS FEES
- ------------------------------------------------------------------------------------------------------------------------------------
- --------------------------------
LARGE CAP VALUE FUND (CONTINUED)
- --------------------------------
CLASS A SHARES
2010 $ 9.38 $ 0.164 $ 0.859 $ 1.023 $(0.103) $ -- $(0.103) $ --
2009 11.88 0.155 (2.503) (2.348) (0.152) -- (0.152) --
2008 15.19 0.177 (2.450) (2.273) (0.177) (0.860) (1.037) --
2007 13.70 0.171 1.485 1.656 (0.166) -- (0.166) --
2006 12.52 0.129 1.181 1.310 (0.131) -- (0.131) 0.001
CLASS B SHARES
2010 $ 9.21 $ 0.100 $ 0.842 $ 0.942 $(0.042) $ -- $(0.042) $ --
2009 11.67 0.097 (2.459) (2.362) (0.098) -- (0.098) --
2008 14.94 0.092 (2.402) (2.310) (0.100) (0.860) (0.960) --
2007 13.50 0.082 1.458 1.540 (0.100) -- (0.100) --
2006 12.35 0.047 1.163 1.210 (0.060) -- (0.060) --
CLASS C SHARES
2010 $ 9.18 $ 0.100 $ 0.843 $ 0.943 $(0.043) $ -- $(0.043) $ --
2009 11.64 0.097 (2.457) (2.360) (0.100) -- (0.100) --
2008 14.90 0.090 (2.390) (2.300) (0.100) (0.860) (0.960) --
2007 13.47 0.079 1.452 1.531 (0.101) -- (0.101) --
2006 12.32 0.046 1.166 1.212 (0.062) -- (0.062) --
- -----------------------------
NYSE ARCA TECH 100 INDEX FUND
- -----------------------------
FIDUCIARY SHARES
2010 $22.06 $(0.002) $ 3.632 $ 3.630 $ -- $ -- $ -- $ --
2009 (4) 22.04 0.001 0.019 0.020 -- -- -- --
CLASS A SHARES
2010 $22.06 $(0.063) $ 3.623 $ 3.560 $ -- $ -- $ -- $ --
2009 (5) 18.53 (0.029) 3.559 3.530 -- -- -- --
2008 (6) 29.13 (0.10)^^ (10.50) (10.60) -- -- -- --
2007 (6) 24.67 (0.12)^^ 4.58 4.46 -- -- -- --
2006 (6) 23.10 (0.12)^^ 1.69 1.57 -- -- -- --
2005 (6) 20.73 (0.11)^^ 2.48 2.37 -- -- -- --
CLASS B SHARES
2010 $20.22 $(0.191) $ 3.321 $ 3.130 $ -- $ -- $ -- $ --
2009 (5) 17.08 (0.115) 3.255 3.140 -- -- -- --
2008 (6) 27.06 (0.37)^^ (9.61) (9.98) -- -- -- --
2007 (6) 23.09 (0.37)^^ 4.34 3.97 -- -- -- --
2006 (6) 21.78 (0.31)^^ 1.62 1.31 -- -- -- --
2005 (6) 19.69 (0.28)^^ 2.37 2.09 -- -- -- --
RATIO
OF EXPENSES
TO AVERAGE RATIO OF
NET NET NET ASSETS NET
ASSET ASSETS, RATIO EXCLUDING INVESTMENT
VALUE, END OF EXPENSES FEE WAIVERS INCOME (LOSS) PORTFOLIO
END TOTAL OF PERIOD TO AVERAGE AND REDUCTION TO AVERAGE TURNOVER
OF PERIOD RETURN** (000) NET ASSETS OF EXPENSES NET ASSETS RATE
- -------------------------------------------------------------------------------------------------------------------
- --------------------------------
LARGE CAP VALUE FUND (CONTINUED)
- --------------------------------
CLASS A SHARES
2010 $10.30 10.91% $ 22,407 1.23% 1.41% 1.59% 117%
2009 9.38 (19.69) 28,212 1.20 1.36 1.67 66
2008 11.88 (15.85) 42,433 1.16 1.34 1.27 65
2007 15.19 12.09 153,045 1.14 1.33 1.13 84
2006 13.70 10.52 134,433 1.17 1.32 0.98 81
CLASS B SHARES
2010 $10.11 10.23% $ 1,265 1.83% 1.91% 0.99% 117%
2009 9.21 (20.18) 2,101 1.80 1.86 1.07 66
2008 11.67 (16.33) 1,287 1.76 1.83 0.68 65
2007 14.94 11.40 2,502 1.74 1.83 0.55 84
2006 13.50 9.81 3,042 1.79 1.84 0.36 81
CLASS C SHARES
2010 $10.08 10.27% $ 3,232 1.83% 1.91% 0.99% 117%
2009 9.18 (20.22) 4,025 1.80 1.86 1.07 66
2008 11.64 (16.31) 5,192 1.77 1.84 0.67 65
2007 14.90 11.36 7,742 1.74 1.83 0.53 84
2006 13.47 9.86 5,927 1.79 1.84 0.36 81
- -----------------------------
NYSE ARCA TECH 100 INDEX FUND
- -----------------------------
FIDUCIARY SHARES
2010 $25.69 16.46% $ 312 0.83% 1.00% (0.01)% 9%
2009 (4) 22.06 0.09 20 0.83*~# 0.97*~# 0.24*# 10
CLASS A SHARES
2010 $25.62 16.18% $162,267 1.08% 1.25% (0.26)% 9%
2009 (5) 22.06 19.05 166,899 1.27*~# 1.42*~ (0.21)*# 10
2008 (6) 18.53 (36.39) 157,076 1.08++ 1.08 (0.37)++ 19
2007 (6) 29.13 18.08 279,501 0.99++ 0.99 (0.45)++ 14
2006 (6) 24.67 6.80 275,177 0.99## 0.99 (0.47)## 11
2005 (6) 23.10 11.43 289,674 1.02## 1.02 (0.48)## 17
CLASS B SHARES
2010 $23.35 15.48% $ 9,889 1.68% 1.75% (0.86)% 9%
2009 (5) 20.22 18.38 14,422 1.99*~# 2.11*~ (0.92)*# 10
2008 (6) 17.08 (36.88) 17,314 1.82++ 1.82 (1.10)++ 19
2007 (6) 27.06 17.19 54,103 1.74++ 1.74 (1.20)++ 14
2006 (6) 23.09 6.01 74,106 1.74## 1.74 (1.22)## 11
2005 (6) 21.78 10.61 87,420 1.77## 1.77 (1.23)## 17
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
* ANNUALIZED.
** TOTAL RETURN DOES NOT REFLECT ANY APPLICABLE SALES CHARGE. TOTAL RETURN IS
FOR THE PERIOD INDICATED AND HAS NOT BEEN ANNUALIZED.
~ RATIOS OF EXPENSES TO AVERAGE NET ASSETS INCLUDE INTEREST EXPENSES OF LESS
THAN 0.005% FOR THE PERIOD ENDED JULY 31, 2009, WHICH IS NOT INCLUDED IN
THE CONTRACTUAL EXPENSES LIMITATION. THE INTEREST EXPENSE IS FROM
UTILIZING A LINE OF CREDIT.
+ PER SHARE AMOUNTS CALCULATED USING AVERAGE SHARES METHOD, UNLESS OTHERWISE
INDICATED.
++ DOES NOT REFLECT VENDOR REIMBURSEMENT OF 0.03%.
+++ AMOUNT REPRESENTS LESS THAN $0.001.
# DOES NOT REFLECT VENDOR REIMBURSEMENT OF 0.08%.
## DOES NOT REFLECT VENDOR REIMBURSEMENT OF 0.02%.
^ INCLUDES $0.017 OF FAIR FUNDS SETTLEMENT.
^^ PER SHARE AMOUNTS CALCULATED USING SEC METHOD.
(1) COMMENCED OPERATIONS ON APRIL 3, 2006.
(2) FOR THE TEN MONTH PERIOD ENDED JULY 31, 2006. ON APRIL 3, 2006, HIGHMARK
FUNDS ACQUIRED THE ASSETS AND ASSUMED THE IDENTIFIED LIABILITIES OF
BAILARD COGNITIVE VALUE FUND, BAILARD ENHANCED GROWTH FUND AND BAILARD
INTERNATIONAL EQUITY FUND (THE "BAILARD FUNDS"). THE FISCAL YEAR END OF
THE BAILARD FUNDS, THE PREDECESSOR FUNDS TO HIGHMARK COGNITIVE VALUE FUND,
HIGHMARK ENHANCED GROWTH FUND AND HIGHMARK INTERNATIONAL OPPORTUNITIES
FUND, WAS SEPTEMBER 30. THE FISCAL YEAR END OF THE SUCCESSOR HIGHMARK
FUNDS IS JULY 31.
(3) FOR THE YEAR ENDED SEPTEMBER 30.
(4) COMMENCED OPERATIONS ON JULY 23, 2009.
(5) FOR THE NINE MONTH PERIOD ENDED JULY 31, 2009. ON JUNE 8, 2009, HIGHMARK
FUNDS ACQUIRED THE ASSETS AND ASSUMED THE IDENTIFIED LIABILITIES OF NORTH
TRACK EQUITY INCOME FUND, NORTH TRACK GENEVA GROWTH FUND, NORTH TRACK NYSE
ARCA TECH 100 INDEX FUND AND NORTH TRACK WISCONSIN TAX-EXEMPT FUND (THE
"NORTH TRACK FUNDS"). THE FISCAL YEAR END OF THE NORTH TRACK FUNDS, THE
PREDECESSOR FUNDS TO HIGHMARK EQUITY INCOME FUND, HIGHMARK GENEVA GROWTH
FUND, HIGHMARK NYSE ARCA TECH 100 INDEX FUND AND HIGHMARK WISCONSIN
TAX-EXEMPT FUND, WAS OCTOBER 31. THE FISCAL YEAR END OF THE SUCCESSOR
HIGHMARK FUNDS IS JULY 31.
(6) FOR THE YEAR ENDED OCTOBER 31.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 167
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FOR THE YEARS OR PERIODS ENDED JULY 31, (UNLESS OTHERWISE INDICATED)
DIVIDENDS AND
INVESTMENT ACTIVITIES DISTRIBUTIONS
------------------------------- --------------------
NET
ASSET NET REALIZED TOTAL
VALUE, NET AND UNREALIZED TOTAL NET FROM
BEGINNING INVESTMENT GAIN (LOSS) ON FROM INVESTMENT CAPITAL DIVIDENDS AND REDEMPTION
OF PERIOD INCOME (LOSS)+ INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS FEES
- ------------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------
NYSE ARCA TECH 100 INDEX FUND (CONTINUED)
- -----------------------------------------
CLASS C SHARES
2010 $20.59 $(0.196) $ 3.386 $ 3.190 $ -- $ -- $ -- $ --
2009 (1) 17.39 (0.117) 3.317 3.200 -- -- -- --
2008 (2) 27.55 (0.30)^ (9.86) (10.16) -- -- -- --
2007 (2) 23.51 (0.32)^ 4.36 4.04 -- -- -- --
2006 (2) 22.17 (0.31)^ 1.65 1.34 -- -- -- --
2005 (2) 20.05 (0.28)^ 2.40 2.12 -- -- -- --
- ------------------------
SMALL CAP ADVANTAGE FUND
- ------------------------
FIDUCIARY SHARES
2010 $11.85 $(0.041) $ 2.787 $ 2.746 $(0.056) $ -- $(0.056) $ --
2009 16.45 0.055 (4.636) (4.581) (0.019) -- (0.019) --+++
2008 18.83 0.089 (2.249) (2.160) (0.110) (0.110) (0.220) --
2007 (3) 20.00 0.052 (1.222) (1.170) -- -- -- --
CLASS A SHARES
2010 $11.80 $(0.084) $ 2.779 $ 2.695 $(0.025) $ -- $(0.025) $ --
2009 16.43 0.020 (4.634) (4.614) (0.016) -- (0.016) --+++
2008 18.82 0.038 (2.246) (2.208) (0.072) (0.110) (0.182) --
2007 (3) 20.00 0.021 (1.201) (1.180) -- -- -- --
CLASS C SHARES
2010 $11.65 $(0.161) $ 2.731 $ 2.570 $ -- $ -- $ -- $ --
2009 16.36 (0.048) (4.662) (4.710) -- -- -- --+++
2008 18.80 (0.062) (2.254) (2.316) (0.014) (0.110) (0.124) --
2007 (3) 20.00 (0.031) (1.169) (1.200) -- -- -- --
- --------------------
SMALL CAP VALUE FUND
- --------------------
FIDUCIARY SHARES
2010 $ 9.48 $ 0.116 $ 2.262 $ 2.378 $(0.128) $ -- $(0.128) $ --+++
2009 11.52 0.174 (1.966) (1.792) (0.186) (0.062) (0.248) --+++
2008 17.05 0.166 (2.630) (2.464) (0.190) (2.877) (3.067) 0.001
2007 18.12 0.215 1.128 1.343 (0.180) (2.234) (2.414) 0.001
2006 19.55 0.115 (0.156) (0.041) (0.080) (1.309) (1.389) --
CLASS A SHARES
2010 $ 9.22 $ 0.084 $ 2.204 $ 2.288 $(0.108) $ -- $(0.108) $ --+++
2009 11.22 0.141 (1.907) (1.766) (0.172) (0.062) (0.234) --+++
2008 16.68 0.128 (2.570) (2.442) (0.142) (2.877) (3.019) 0.001
2007 17.77 0.167 1.109 1.276 (0.133) (2.234) (2.367) 0.001
2006 19.21 0.068 (0.145) (0.077) (0.054) (1.309) (1.363) --
CLASS B SHARES
2010 $ 8.69 $ 0.019 $ 2.079 $ 2.098 $(0.048) $ -- $(0.048) $ --+++
2009 10.53 0.090 (1.788) (1.698) (0.080) (0.062) (0.142) --+++
2008 15.85 0.046 (2.430) (2.384) (0.060) (2.877) (2.937) 0.001
2007 17.01 0.058 1.052 1.110 (0.037) (2.234) (2.271) 0.001
2006 18.51 (0.043) (0.148) (0.191) -- (1.309) (1.309) --
CLASS C SHARES
2010 $ 8.63 $ 0.019 $ 2.076 $ 2.095 $(0.055) $ -- $(0.055) $ --+++
2009 10.48 0.089 (1.783) (1.694) (0.094) (0.062) (0.156) --+++
2008 15.76 0.048 (2.415) (2.367) (0.037) (2.877) (2.914) 0.001
2007 16.94 0.052 1.056 1.108 (0.055) (2.234) (2.289) 0.001
2006 18.43 (0.044) (0.137) (0.181) -- (1.309) (1.309) --
RATIO
OF EXPENSES
TO AVERAGE RATIO OF
NET NET NET ASSETS NET
ASSET ASSETS, RATIO EXCLUDING INVESTMENT
VALUE, END OF EXPENSES FEE WAIVERS INCOME (LOSS) PORTFOLIO
END TOTAL OF PERIOD TO AVERAGE AND REDUCTION TO AVERAGE TURNOVER
OF PERIOD RETURN** (000) NET ASSETS OF EXPENSES NET ASSETS RATE
- -------------------------------------------------------------------------------------------------------------------
- -----------------------------------------
NYSE ARCA TECH 100 INDEX FUND (CONTINUED)
- -----------------------------------------
CLASS C SHARES
2010 $23.78 15.49% $ 10,680 1.68% 1.75% (0.86)% 9%
2009 (1) 20.59 18.40 10,620 1.99*~## 2.11*~ (0.92)*## 10
2008 (2) 17.39 (36.88) 12,839 1.82++ 1.82 (1.12)++ 19
2007 (2) 27.55 17.18 26,946 1.74++ 1.74 (1.20)++ 14
2006 (2) 23.51 6.04 27,514 1.74### 1.74 (1.22)### 11
2005 (2) 22.17 10.57 33,503 1.77### 1.77 (1.24)### 17
- ------------------------
SMALL CAP ADVANTAGE FUND
- ------------------------
FIDUCIARY SHARES
2010 $14.54 23.32% $ 23,527 1.30% 1.79% (0.30)% 78%
2009 11.85 (27.90) 22,084 1.27 1.85 0.48 61
2008 16.45 (11.48) 26,984 1.26 1.67 0.54 87
2007 (3) 18.83 (5.85) 27,572 1.30* 1.60* 0.61* 26
CLASS A SHARES
2010 $14.47 22.86% $ 310 1.60% 2.04% (0.61)% 78%
2009 11.80 (28.08) 227 1.57 2.10 0.18 61
2008 16.43 (11.74) 168 1.57 1.91 0.23 87
2007 (3) 18.82 (5.90) 117 1.56* 2.02* 0.24* 26
CLASS C SHARES
2010 $14.22 22.17% $ 77 2.20% 2.54% (1.21)% 78%
2009 11.65 (28.85) 87 2.17 2.60 (0.42) 61
2008 16.36 (12.33) 133 2.17 2.43 (0.38) 87
2007 (3) 18.80 (6.00) 131 2.17* 2.62* (0.35)* 26
- --------------------
SMALL CAP VALUE FUND
- --------------------
FIDUCIARY SHARES
2010 $11.73 25.21% $ 32,878 1.24% 1.66% 1.05% 34%
2009 9.48 (15.08) 32,222 1.25 1.58 2.01 37
2008 11.52 (15.68) 81,102 1.35 1.51 1.23 25
2007 17.05 6.83 178,805 1.34 1.48 1.16 46
2006 18.12 (0.01) 164,131 1.32 1.49 0.62 35
CLASS A SHARES
2010 $11.40 24.93% $ 31,263 1.51% 1.91% 0.79% 34%
2009 9.22 (15.28) 36,132 1.51 1.83 1.75 37
2008 11.22 (15.91) 35,794 1.61 1.76 0.97 25
2007 16.68 6.58 59,512 1.59 1.73 0.91 46
2006 17.77 (0.21) 64,484 1.57 1.74 0.37 35
CLASS B SHARES
2010 $10.74 24.19% $ 1,703 2.11% 2.41% 0.19% 34%
2009 8.69 (15.82) 2,890 2.11 2.33 1.15 37
2008 10.53 (16.43) 5,622 2.21 2.26 0.37 25
2007 15.85 5.86 10,987 2.19 2.23 0.33 46
2006 17.01 (0.87) 13,145 2.18 2.24 (0.25) 35
CLASS C SHARES
2010 $10.67 24.33% $ 4,543 2.11% 2.41% 0.19% 34%
2009 8.63 (15.84) 4,952 2.11 2.33 1.15 37
2008 10.48 (16.40) 8,223 2.20 2.25 0.38 25
2007 15.76 5.88 20,268 2.19 2.23 0.30 46
2006 16.94 (0.82) 18,990 2.18 2.24 (0.25) 35
The accompanying notes are an integral part of the financial statements.
168 HIGHMARK(R) FUNDS
DIVIDENDS AND
INVESTMENT ACTIVITIES DISTRIBUTIONS
------------------------------- --------------------
NET
ASSET NET REALIZED TOTAL
VALUE, NET AND UNREALIZED TOTAL NET FROM
BEGINNING INVESTMENT GAIN (LOSS) ON FROM INVESTMENT CAPITAL DIVIDENDS AND REDEMPTION
OF PERIOD INCOME (LOSS)+ INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS FEES
- ------------------------------------------------------------------------------------------------------------------------------------
- -------------------
VALUE MOMENTUM FUND
- -------------------
FIDUCIARY SHARES
2010 $12.17 $0.265 $ 1.368 $ 1.633 $(0.163) $ -- $(0.163) $ --
2009 17.53 0.221 (4.399) (4.178) (0.223) (0.959) (1.182) --
2008 24.21 0.279 (2.950) (2.671) (0.283) (3.726) (4.009) --
2007 23.25 0.343 3.381 3.724 (0.343) (2.421) (2.764) --
2006 24.07 0.314 1.777 2.091 (0.311) (2.600) (2.911) --
CLASS A SHARES
2010 $12.14 $0.230 $ 1.369 $ 1.599 $(0.129) $ -- $(0.129) $ --
2009 17.50 0.186 (4.395) (4.209) (0.192) (0.959) (1.151) --
2008 24.17 0.224 (2.934) (2.710) (0.234) (3.726) (3.960) --
2007 23.22 0.282 3.373 3.655 (0.284) (2.421) (2.705) --
2006 24.04 0.255 1.780 2.035 (0.255) (2.600) (2.855) --
CLASS B SHARES
2010 $11.88 $0.146 $ 1.339 $ 1.485 $(0.045) $ -- $(0.045) $ --
2009 17.16 0.115 (4.312) (4.197) (0.124) (0.959) (1.083) --
2008 23.79 0.100 (2.880) (2.780) (0.124) (3.726) (3.850) --
2007 22.92 0.136 3.325 3.461 (0.170) (2.421) (2.591) --
2006 23.79 0.114 1.746 1.860 (0.130) (2.600) (2.730) --
CLASS C SHARES
2010 $11.84 $0.145 $ 1.322 $ 1.467 $(0.047) $ -- $(0.047) $ --
2009 17.10 0.113 (4.289) (4.176) (0.125) (0.959) (1.084) --
2008 23.72 0.107 (2.866) (2.759) (0.135) (3.726) (3.861) --
2007 22.86 0.127 3.330 3.457 (0.176) (2.421) (2.597) --
2006 23.74 0.110 1.742 1.852 (0.132) (2.600) (2.732) --
- ------------------------------
CAPITAL GROWTH ALLOCATION FUND
- ------------------------------
FIDUCIARY SHARES
2010 $16.15 $0.176 $ 2.112 $ 2.288 $(0.168) $ -- $(0.168) $ --
2009 21.86 0.196 (4.304) (4.108) (0.230) (1.372) (1.602) --
2008 25.72 0.306 (2.894) (2.588) (0.360) (0.912) (1.272) --
2007 (4) 25.10 0.140 1.218 1.358 (0.419) (0.319) (0.738) --
CLASS A SHARES
2010 $16.14 $0.131 $ 2.103 $ 2.234 $(0.134) $ -- $(0.134) $ --
2009 21.85 0.167 (4.317) (4.150) (0.188) (1.372) (1.560) --
2008 25.72 0.233 (2.886) (2.653) (0.305) (0.912) (1.217) --
2007 23.17 0.262 3.002 3.264 (0.395) (0.319) (0.714) --
2006 22.16 0.112 1.066 1.178 (0.090) (0.078) (0.168) --
RATIO
OF EXPENSES
TO AVERAGE RATIO OF
NET NET NET ASSETS NET
ASSET ASSETS, RATIO EXCLUDING INVESTMENT
VALUE, END OF EXPENSES FEE WAIVERS INCOME PORTFOLIO
END TOTAL OF PERIOD TO AVERAGE AND REDUCTION TO AVERAGE TURNOVER
OF PERIOD RETURN** (000) NET ASSETS# OF EXPENSES# NET ASSETS# RATE
- ------------------------------------------------------------------------------------------------------------------
- -------------------
VALUE MOMENTUM FUND
- -------------------
FIDUCIARY SHARES
2010 $13.64 13.43% $228,162 1.00% 1.11% 1.95% 12%
2009 12.17 (23.11) 229,771 0.96 1.09 1.82 20
2008 17.53 (12.99) 328,465 0.95 1.08 1.34 17
2007 24.21 16.38 445,763 0.94 1.08 1.41 19
2006 23.25 9.32 434,080 0.93 1.08 1.35 21
CLASS A SHARES
2010 $13.61 13.18% $ 72,132 1.25% 1.36% 1.70% 12%
2009 12.14 (23.30) 75,156 1.21 1.34 1.57 20
2008 17.50 (13.22) 24,772 1.21 1.33 1.08 17
2007 24.17 16.08 31,773 1.19 1.33 1.15 19
2006 23.22 9.06 30,047 1.18 1.34 1.09 21
CLASS B SHARES
2010 $13.32 12.51% $ 3,439 1.85% 1.86% 1.10% 12%
2009 11.88 (23.74) 5,722 1.81 1.84 0.97 20
2008 17.16 (13.74) 3,823 1.80 1.83 0.49 17
2007 23.79 15.38 6,772 1.79 1.83 0.56 19
2006 22.92 8.36 7,471 1.80 1.84 0.49 21
CLASS C SHARES
2010 $13.26 12.50% $ 2,548 1.85% 1.86% 1.10% 12%
2009 11.84 (23.76) 3,058 1.81 1.84 0.97 20
2008 17.10 (13.69) 1,500 1.76 1.79 0.53 17
2007 23.72 15.40 2,061 1.79 1.83 0.53 19
2006 22.86 8.34 1,442 1.80 1.84 0.49 21
- ------------------------------
CAPITAL GROWTH ALLOCATION FUND
- ------------------------------
FIDUCIARY SHARES
2010 $18.27 14.17% $ 190 0.33% 0.92% 0.98% 30%
2009 16.15 (17.46) 179 0.33 0.81 1.31 48
2008 21.86 (10.56) 171 0.33 0.70 1.23 25
2007 (4) 25.72 5.50 770 0.31* 0.70* 0.75* 16
CLASS A SHARES
2010 $18.24 13.84% $ 23,808 0.58% 1.17% 0.73% 30%
2009 16.14 (17.68) 23,780 0.58 1.06 1.06 48
2008 21.85 (10.81) 39,324 0.59 0.95 0.97 25
2007 25.72 14.19 49,073 0.57 0.93 1.03 16
2006 23.17 5.33 30,900 0.82 1.45 0.49 12
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
* ANNUALIZED.
** TOTAL RETURN DOES NOT REFLECT ANY APPLICABLE SALES CHARGE. TOTAL RETURN IS
FOR THE PERIOD INDICATED AND HAS NOT BEEN ANNUALIZED.
~ RATIOS OF EXPENSES TO AVERAGE NET ASSETS INCLUDE INTEREST EXPENSES OF LESS
THAN 0.005% FOR THE PERIOD ENDED JULY 31, 2009, WHICH IS NOT INCLUDED IN
THE CONTRACTUAL EXPENSES LIMITATION. THE INTEREST EXPENSE IS FROM
UTILIZING A LINE OF CREDIT.
+ PER SHARE AMOUNTS CALCULATED USING AVERAGE SHARES METHOD, UNLESS OTHERWISE
INDICATED.
++ DOES NOT REFLECT VENDOR REIMBURSEMENT OF 0.03%.
+++ AMOUNT REPRESENTS LESS THAN $0.001.
# RATIOS DO NOT INCLUDE INCOME AND EXPENSES OF THE UNDERLYING FUNDS IN WHICH
THE FUND INVESTS FOR THE CAPITAL GROWTH ALLOCATION FUND.
## DOES NOT REFLECT VENDOR REIMBURSEMENT OF 0.08%.
### DOES NOT REFLECT VENDOR REIMBURSEMENT OF 0.02%.
^ PER SHARE AMOUNTS CALCULATED USING SEC METHODS.
(1) FOR THE NINE MONTH PERIOD ENDED JULY 31, 2009. ON JUNE 8, 2009, HIGHMARK
FUNDS ACQUIRED THE ASSETS AND ASSUMED THE IDENTIFIED LIABILITIES OF NORTH
TRACK EQUITY INCOME FUND, NORTH TRACK GENEVA GROWTH FUND, NORTH TRACK NYSE
ARCA TECH 100 INDEX FUND AND NORTH TRACK WISCONSIN TAX-EXEMPT FUND (THE
"NORTH TRACK FUNDS"). THE FISCAL YEAR END OF THE NORTH TRACK FUNDS, THE
PREDECESSOR FUNDS TO HIGHMARK EQUITY INCOME FUND, HIGHMARK GENEVA GROWTH
FUND, HIGHMARK NYSE ARCA TECH 100 INDEX FUND AND HIGHMARK WISCONSIN
TAX-EXEMPT FUND, WAS OCTOBER 31. THE FISCAL YEAR END OF THE SUCCESSOR
HIGHMARK FUNDS IS JULY 31.
(2) FOR THE YEAR ENDED OCTOBER 31.
(3) COMMENCED OPERATIONS ON MARCH 1, 2007.
(4) COMMENCED OPERATIONS ON NOVEMBER 15, 2006.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 169
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FOR THE YEARS OR PERIODS ENDED JULY 31, (UNLESS OTHERWISE INDICATED)
DIVIDENDS AND
INVESTMENT ACTIVITIES DISTRIBUTIONS
------------------------------- --------------------
NET
ASSET NET REALIZED TOTAL
VALUE, NET AND UNREALIZED TOTAL NET FROM
BEGINNING INVESTMENT GAIN (LOSS) ON FROM INVESTMENT CAPITAL DIVIDENDS AND REDEMPTION
OF PERIOD INCOME (LOSS)+ INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS FEES
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------
CAPITAL GROWTH ALLOCATION FUND (CONTINUED)
- ------------------------------------------
CLASS C. SHARES
2010 $15.99 $ 0.006 $ 2.089 $ 2.095 $(0.055) $ -- $(0.055) $ --
2009 21.55 0.058 (4.246) (4.188) -- (1.372) (1.372) --
2008 25.42 0.063 (2.849) (2.786) (0.172) (0.912) (1.084) --
2007 22.97 0.069 2.989 3.058 (0.289) (0.319) (0.608) --
2006 22.07 (0.057) 1.063 1.006 (0.028) (0.078) (0.106) --
- ----------------------------------
DIVERSIFIED EQUITY ALLOCATION FUND
- ----------------------------------
FIDUCIARY SHARES
2010 $14.03 $ 0.119 $ 1.965 $ 2.084 $(0.074) $ -- $(0.074) $ --
2009 18.08 0.117 (3.776) (3.659) (0.060) (0.331) (0.391) --
2008 20.97 0.180 (2.718) (2.538) (0.210) (0.142) (0.352) --
2007 (1) 20.00 0.239 0.973 1.212 (0.242) -- (0.242) --
CLASS A SHARES
2010 $13.98 $ 0.078 $ 1.959 $ 2.037 $(0.057) $ -- $(0.057) $ --
2009 18.02 0.088 (3.753) (3.665) (0.044) (0.331) (0.375) --
2008 20.94 0.122 (2.702) (2.580) (0.198) (0.142) (0.340) --
2007 (1) 20.00 0.042 1.134 1.176 (0.236) -- (0.236) --
CLASS C SHARES
2010 $13.79 $(0.031) $ 1.939 $ 1.908 $(0.008) $ -- $(0.008) $ --
2009 17.85 (0.004) (3.724) (3.728) (0.001) (0.331) (0.332) --
2008 20.85 (0.020) (2.690) (2.710) (0.148) (0.142) (0.290) --
2007 (1) 20.00 (0.119) 1.200 1.081 (0.231) -- (0.231) --
- -------------------------------
GROWTH & INCOME ALLOCATION FUND
- -------------------------------
FIDUCIARY SHARES
2010 $17.24 $ 0.279 $ 1.928 $ 2.207 $(0.297) $ -- $(0.297) $ --
2009 21.44 0.314 (3.122) (2.808) (0.321) (1.071) (1.392) --
2008 24.23 0.413 (2.065) (1.652) (0.501) (0.637) (1.138) --
2007 (1) 23.75 0.035 1.130 1.165 (0.407) (0.278) (0.685) --
CLASS A SHARES
2010 $17.18 $ 0.232 $ 1.929 $ 2.161 $(0.251) $ -- $(0.251) $ --
2009 21.37 0.281 (3.123) (2.842) (0.277) (1.071) (1.348) --
2008 24.15 0.372 (2.075) (1.703) (0.440) (0.637) (1.077) --
2007 22.26 0.412 2.258 2.670 (0.502) (0.278) (0.780) --
2006 21.61 0.259 0.688 0.947 (0.240) (0.057) (0.297) --
CLASS C SHARES
2010 $17.09 $ 0.101 $ 1.910 $ 2.011 $(0.121) $ -- $(0.121) $ --
2009 21.26 0.162 (3.102) (2.940) (0.159) (1.071) (1.230) --
2008 24.03 0.208 (2.062) (1.854) (0.279) (0.637) (0.916) --
2007 22.18 0.226 2.261 2.487 (0.359) (0.278) (0.637) --
2006 21.55 0.103 0.688 0.791 (0.104) (0.057) (0.161) --
- ---------------------------
INCOME PLUS ALLOCATION FUND
- ---------------------------
FIDUCIARY SHARES
2010 $18.23 $ 0.424 $ 1.527 $ 1.951 $(0.441) $ -- $(0.441) $ --
2009 20.30 0.484 (1.425) (0.941) (0.482) (0.647) (1.129) --
2008 21.85 0.590 (1.088) (0.498) (0.630) (0.422) (1.052) --
2007 (1) 21.86 0.409 0.348 0.757 (0.482) (0.285) (0.767) --
CLASS A SHARES
2010 $18.24 $ 0.376 $ 1.478 $ 1.854 $(0.354) $ -- $(0.354) $ --
2009 20.31 0.440 (1.424) (0.984) (0.439) (0.647) (1.086) --
2008 21.86 0.540 (1.089) (0.549) (0.579) (0.422) (1.001) --
2007 20.95 0.544 1.199 1.743 (0.548) (0.285) (0.833) --
2006 20.73 0.434 0.205 0.639 (0.407) (0.012) (0.419) --
RATIO
OF EXPENSES
TO AVERAGE RATIO OF
NET NET NET ASSETS NET
ASSET ASSETS, RATIO EXCLUDING INVESTMENT
VALUE, END OF EXPENSES FEE WAIVERS INCOME (LOSS) PORTFOLIO
END TOTAL OF PERIOD TO AVERAGE AND REDUCTION TO AVERAGE TURNOVER
OF PERIOD RETURN** (000) NET ASSETS# OF EXPENSES# NET ASSETS# RATE
- -------------------------------------------------------------------------------------------------------------------
- ------------------------------------------
CAPITAL GROWTH ALLOCATION FUND (CONTINUED)
- ------------------------------------------
CLASS C. SHARES
2010 $18.03 13.10% $ 15,846 1.28% 1.67% 0.03% 30%
2009 15.99 (18.25) 14,101 1.27 1.55 0.37 48
2008 21.55 (11.43) 21,599 1.29 1.46 0.26 25
2007 25.42 13.39 30,144 1.27 1.43 0.28 16
2006 22.97 4.56 16,718 1.53 1.95 (0.25) 12
- ----------------------------------
DIVERSIFIED EQUITY ALLOCATION FUND
- ----------------------------------
FIDUCIARY SHARES
2010 $16.04 14.86% $ 497 0.32% 1.80% 0.75% 35%
2009 14.03 (19.81) 26 0.33 2.20 0.92 59
2008 18.08 (12.30) 15 0.36 1.65 0.86 68
2007 (1) 20.97 6.10 183 0.33* 3.37* 1.67* 10
CLASS A SHARES
2010 $15.96 14.58% $ 2,647 0.57% 2.05% 0.50% 35%
2009 13.98 (19.92) 2,289 0.58 2.45 0.67 59
2008 18.02 (12.52) 2,533 0.60 1.90 0.62 68
2007 (1) 20.94 5.93 4,871 0.57* 2.70* 0.28* 10
CLASS C SHARES
2010 $15.69 13.84% $ 4,365 1.27% 2.55% (0.20)% 35%
2009 13.79 (20.52) 3,489 1.29 2.95 (0.04) 59
2008 17.85 (13.17) 2,452 1.32 2.41 (0.10) 68
2007 (1) 20.85 5.45 1,986 1.29* 2.93* (0.81)* 10
- -------------------------------
GROWTH & INCOME ALLOCATION FUND
- -------------------------------
FIDUCIARY SHARES
2010 $19.15 12.83% $ 127 0.33% 0.86% 1.49% 39%
2009 17.24 (12.10) 114 0.33 0.81 1.94 66
2008 21.44 (7.15) 93 0.33 0.71 1.87 27
2007 (1) 24.23 4.98 1 0.31* 0.67* 0.21* 13
CLASS A SHARES
2010 $19.09 12.60% $ 26,026 0.57% 1.11% 1.24% 39%
2009 17.18 (12.29) 23,091 0.58 1.06 1.69 66
2008 21.37 (7.42) 37,737 0.58 0.96 1.62 27
2007 24.15 12.10 47,572 0.55 0.93 1.72 13
2006 22.26 4.41 31,426 0.81 1.45 1.17 13
CLASS C SHARES
2010 $18.98 11.78% $ 17,094 1.28% 1.61% 0.54% 39%
2009 17.09 (12.92) 15,731 1.28 1.56 0.99 66
2008 21.26 (8.02) 20,137 1.28 1.47 0.91 27
2007 24.03 11.29 22,941 1.25 1.43 0.95 13
2006 22.18 3.68 11,752 1.52 1.96 0.47 13
- ---------------------------
INCOME PLUS ALLOCATION FUND
- ---------------------------
FIDUCIARY SHARES
2010 $19.74 10.54% $ 235 0.32% 1.26% 2.19% 29%
2009 18.23 (4.02) 202 0.35 1.49 2.78 75
2008 20.30 (2.43) 101 0.39 1.01 2.79 61
2007 (1) 21.85 3.52 103 0.37* 0.77* 2.61* 12
CLASS A SHARES
2010 $19.74 10.21% $ 9,604 0.58% 1.51% 1.94% 29%
2009 18.24 (4.26) 6,092 0.60 1.74 2.53 75
2008 20.31 (2.66) 5,206 0.65 1.26 2.54 61
2007 21.86 8.40 5,459 0.62 0.97 2.49 12
2006 20.95 3.11 3,651 0.87 1.83 2.07 26
The accompanying notes are an integral part of the financial statements.
170 HIGHMARK(R) FUNDS
DIVIDENDS AND
INVESTMENT ACTIVITIES DISTRIBUTIONS
------------------------------- --------------------
NET
ASSET NET REALIZED TOTAL
VALUE, NET AND UNREALIZED TOTAL NET FROM
BEGINNING INVESTMENT GAIN (LOSS) ON FROM INVESTMENT CAPITAL DIVIDENDS AND REDEMPTION
OF PERIOD INCOME+ INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS FEES
- ------------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------
INCOME PLUS ALLOCATION FUND (CONTINUED)
- ---------------------------------------
CLASS C SHARES
2010 $18.12 $ 0.239 $ 1.479 $ 1.718 $(0.228) $ -- $(0.228) $ --
2009 20.19 0.316 (1.425) (1.109) (0.314) (0.647) (0.961) --
2008 21.73 0.390 (1.080) (0.690) (0.428) (0.422) (0.850) --
2007 20.85 0.387 1.193 1.580 (0.415) (0.285) (0.700) --
2006 20.66 0.308 0.183 0.491 (0.289) (0.012) (0.301) --
- ---------
BOND FUND
- ---------
FIDUCIARY SHARES
2010 $10.77 $ 0.467 $ 0.618 $ 1.085 $(0.475) $ -- $(0.475) $ --
2009 10.45 0.472 0.324 0.796 (0.476) -- (0.476) --
2008 10.40 0.512 0.048 0.560 (0.510) -- (0.510) --
2007 10.35 0.505 0.046 0.551 (0.501) -- (0.501) --
2006 10.75 0.496 (0.384) 0.112 (0.512) -- (0.512) --
CLASS A SHARES
2010 $10.61 $ 0.433 $ 0.614 $ 1.047 $(0.447) $ -- $(0.447) $ --
2009 10.31 0.440 0.310 0.750 (0.450) -- (0.450) --
2008 10.26 0.479 0.055 0.534 (0.484) -- (0.484) --
2007 10.22 0.472 0.044 0.516 (0.476) -- (0.476) --
2006 10.63 0.463 (0.387) 0.076 (0.486) -- (0.486) --
CLASS B SHARES
2010 $10.56 $ 0.357 $ 0.615 $ 0.972 $(0.372) $ -- $(0.372) $ --
2009 10.26 0.369 0.311 0.680 (0.380) -- (0.380) --
2008 10.22 0.406 0.046 0.452 (0.412) -- (0.412) --
2007 10.18 0.400 0.046 0.446 (0.406) -- (0.406) --
2006 10.59 0.389 (0.383) 0.006 (0.416) -- (0.416) --
CLASS C SHARES
2010 $10.56 $ 0.384 $ 0.609 $ 0.993 $(0.403) $ -- $(0.403) $ --
2009 10.25 0.396 0.325 0.721 (0.411) -- (0.411) --
2008 10.20 0.430 0.060 0.490 (0.440) -- (0.440) --
2007 10.17 0.425 0.039 0.464 (0.434) -- (0.434) --
2006 10.57 0.423 (0.384) 0.039 (0.439) -- (0.439) --
- ------------------------------------------
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND
- ------------------------------------------
FIDUCIARY SHARES
2010 $10.03 $ 0.327 $ 0.216 $ 0.543 $(0.326) $(0.017) $(0.343) $ --
2009 9.83 0.344 0.216 0.560 (0.342) (0.018) (0.360) --
2008 9.72 0.348 0.129 0.477 (0.354) (0.013) (0.367) --
2007 9.81 0.361 (0.047) 0.314 (0.368) (0.036) (0.404) --
2006 10.12 0.370 (0.208) 0.162 (0.372) (0.100) (0.472) --
RATIO
OF EXPENSES
TO AVERAGE RATIO OF
NET NET NET ASSETS NET
ASSET ASSETS, RATIO EXCLUDING INVESTMENT
VALUE, END OF EXPENSES FEE WAIVERS INCOME PORTFOLIO
END TOTAL OF PERIOD TO AVERAGE AND REDUCTION TO AVERAGE TURNOVER
OF PERIOD RETURN** (000) NET ASSETS# OF EXPENSES# NET ASSETS# RATE
- -------------------------------------------------------------------------------------------------------------------
- ---------------------------------------
INCOME PLUS ALLOCATION FUND (CONTINUED)
- ---------------------------------------
CLASS C SHARES
2010 $19.61 9.51% $ 5,876 1.28% 2.01% 1.24% 29%
2009 18.12 (4.97) 3,493 1.30 2.24 1.83 75
2008 20.19 (3.32) 3,210 1.35 1.76 1.84 61
2007 21.73 7.63 3,775 1.32 1.47 1.78 12
2006 20.85 2.39 2,086 1.59 2.20 1.48 26
- --------
BOND FUND
- --------
FIDUCIARY SHARES
2010 $11.38 10.29% $330,318 0.78% 1.00% 4.23% 32%
2009 10.77 7.93 307,014 0.77 0.99 4.57 41
2008 10.45 5.42 344,350 0.76 0.98 4.83 28
2007 10.40 5.40 352,610 0.74 0.99 4.81 16
2006 10.35 1.08 396,003 0.74 0.99 4.71 20
CLASS A SHARES
2010 $11.21 10.08% $ 28,952 1.03% 1.25% 3.97% 32%
2009 10.61 7.58 22,726 1.02 1.24 4.32 41
2008 10.31 5.24 31,167 1.01 1.23 4.58 28
2007 10.26 5.11 31,068 1.00 1.24 4.56 16
2006 10.22 0.75 35,511 0.99 1.24 4.45 20
CLASS B SHARES
2010 $11.16 9.36% $ 1,345 1.71% 1.75% 3.29% 32%
2009 10.56 6.87 2,789 1.70 1.74 3.64 41
2008 10.26 4.43 4,273 1.69 1.73 3.89 28
2007 10.22 4.43 5,577 1.68 1.74 3.87 16
2006 10.18 0.06 6,926 1.69 1.74 3.75 20
CLASS C SHARES
2010 $11.15 9.58% $ 4,164 1.46% 1.50% 3.54% 32%
2009 10.56 7.29 1,309 1.45 1.49 3.89 41
2008 10.25 4.82 194 1.45 1.49 4.14 28
2007 10.20 4.61 102 1.43 1.49 4.13 16
2006 10.17 0.39 91 1.43 1.49 4.10 20
- ------------------------------------------
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND
- ------------------------------------------
FIDUCIARY SHARES
2010 $10.23 5.49% $112,407 0.53% 1.02% 3.22% 17%
2009 10.03 5.80 96,420 0.52 1.03 3.47 12
2008 9.83 4.96 90,173 0.51 1.01 3.54 14
2007 9.72 3.24 89,852 0.49 1.00 3.67 2
2006 9.81 1.65 95,266 0.50 1.00 3.72 5
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
* ANNUALIZED.
** TOTAL RETURN DOES NOT REFLECT ANY APPLICABLE SALES CHARGE. TOTAL RETURN IS
FOR THE PERIOD INDICATED AND HAS BEEN ANNUALIZED.
+ PER SHARE AMOUNTS CALCULATED USING AVERAGE SHARES METHOD.
# RATIOS DO NOT INCLUDE INCOME AND EXPENSES OF THE UNDERLYING FUNDS IN WHICH
THE FUND INVESTS FOR THE CAPITAL GROWTH ALLOCATION FUND, DIVERSIFIED
EQUITY ALLOCATION FUND, GROWTH & INCOME ALLOCATION FUND AND INCOME PLUS
ALLOCATION FUND.
(1) COMMENCED OPERATIONS ON NOVEMBER 15, 2006.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 171
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FOR THE YEARS OR PERIODS ENDED JULY 31, (UNLESS OTHERWISE INDICATED)
DIVIDENDS AND
INVESTMENT ACTIVITIES DISTRIBUTIONS
------------------------------- --------------------
NET
ASSET NET REALIZED TOTAL
VALUE, NET AND UNREALIZED TOTAL NET FROM
BEGINNING INVESTMENT GAIN ON FROM INVESTMENT CAPITAL DIVIDENDS AND REDEMPTION
OF PERIOD INCOME+ INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS FEES
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND (CONTINUED)
- ------------------------------------------------------
CLASS A SHARES
2010 $ 9.98 $0.300 $ 0.218 $0.518 $(0.301) $(0.017) $(0.318) $ --
2009 9.78 0.318 0.217 0.535 (0.317) (0.018) (0.335) --
2008 9.68 0.323 0.120 0.443 (0.330) (0.013) (0.343) --
2007 9.77 0.334 (0.045) 0.289 (0.343) (0.036) (0.379) --
2006 10.08 0.344 (0.207) 0.137 (0.347) (0.100) (0.447) --
CLASS B SHARES
2010 $ 9.98 $0.230 $ 0.213 $0.443 $(0.226) $(0.017) $(0.243) $ --
2009 9.77 0.249 0.225 0.474 (0.246) (0.018) (0.264) --
2008 9.67 0.254 0.119 0.373 (0.260) (0.013) (0.273) --
2007 9.76 0.266 (0.044) 0.222 (0.276) (0.036) (0.312) --
2006 10.08 0.272 (0.214) 0.058 (0.278) (0.100) (0.378) --
CLASS C SHARES
2010 $ 9.95 $0.253 $ 0.221 $0.474 $(0.257) $(0.017) $(0.274) $ --
2009 9.76 0.272 0.211 0.483 (0.275) (0.018) (0.293) --
2008 9.66 0.275 0.125 0.400 (0.287) (0.013) (0.300) --
2007 9.75 0.289 (0.046) 0.243 (0.297) (0.036) (0.333) --
2006 10.06 0.296 (0.206) 0.090 (0.300) (0.100) (0.400) --
- ----------------------------------------
NATIONAL INTERMEDIATE TAX-FREE BOND FUND
- ----------------------------------------
FIDUCIARY SHARES
2010 $11.20 $0.339 $ 0.279 $0.618 $(0.338) $ -- $(0.338) $ --
2009 10.95 0.371 0.259 0.630 (0.371) (0.009) (0.380) --
2008 10.84 0.420 0.122 0.542 (0.426) (0.006) (0.432) --
2007 10.92 0.433 (0.033) 0.400 (0.441) (0.039) (0.480) --
2006 11.25 0.442 (0.231) 0.211 (0.451) (0.090) (0.541) --
CLASS A SHARES
2010 $11.20 $0.311 $ 0.278 $0.589 $(0.309) $ -- $(0.309) $ --
2009 10.95 0.343 0.260 0.603 (0.344) (0.009) (0.353) --
2008 10.83 0.391 0.135 0.526 (0.400) (0.006) (0.406) --
2007 10.92 0.405 (0.042) 0.363 (0.414) (0.039) (0.453) --
2006 11.25 0.414 (0.230) 0.184 (0.424) (0.090) (0.514) --
CLASS C SHARES
2010 (1) $11.40 $0.170 $ 0.203 $0.373 $(0.283) $ -- $(0.283) $ --
2008 (2) 11.05 0.058 0.070 0.128 (0.058) -- (0.058) --
2007 11.12 0.360 (0.045) 0.315 (0.346) (0.039) (0.385) --
2006 11.44 0.368 (0.230) 0.138 (0.368) (0.090) (0.458) --
2005 11.54 0.381 (0.018) 0.363 (0.375) (0.088) (0.463) --
2004 (3) 11.78 0.343 (0.315) 0.028 (0.267) (0.001) (0.268) --
- --------------------
SHORT TERM BOND FUND
- --------------------
FIDUCIARY SHARES
2010 $10.00 $0.269 $ 0.140 $0.409 $(0.289) $ -- $(0.289) $ --
2009 9.89 0.392 0.111 0.503 (0.393) -- (0.393) --
2008 9.82 0.430 0.074 0.504 (0.434) -- (0.434) --
2007 9.76 0.406 0.055 0.461 (0.401) -- (0.401) --
2006 9.84 0.346 (0.085) 0.261 (0.341) -- (0.341) --
CLASS A SHARES
2010 $ 9.98 $0.240 $ 0.141 $0.381 $(0.261) $ -- $(0.261) $ --
2009 9.88 0.364 0.104 0.468 (0.368) -- (0.368) --
2008 9.81 0.401 0.076 0.477 (0.407) -- (0.407) --
2007 9.76 0.365 0.061 0.426 (0.376) -- (0.376) --
2006 9.84 0.319 (0.082) 0.237 (0.317) -- (0.317) --
RATIO
OF EXPENSES
TO AVERAGE RATIO OF
NET NET NET ASSETS NET
ASSET ASSETS, RATIO EXCLUDING INVESTMENT
VALUE, END OF EXPENSES FEE WAIVERS INCOME PORTFOLIO
END TOTAL OF PERIOD TO AVERAGE AND REDUCTION TO AVERAGE TURNOVER
OF PERIOD RETURN*** (000) NET ASSETS OF EXPENSES NET ASSETS RATE
- -----------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND (CONTINUED)
- ------------------------------------------------------
CLASS A SHARES
2010 $10.18 5.26% $76,111 0.78% 1.27% 2.97% 17%
2009 9.98 5.57 48,833 0.77 1.28 3.22 12
2008 9.78 4.62 28,430 0.75 1.25 3.30 14
2007 9.68 3.00 27,500 0.74 1.25 3.42 2
2006 9.77 1.40 37,472 0.75 1.25 3.47 5
CLASS B SHARES
2010 $10.18 4.49% $ 635 1.48% 1.77% 2.27% 17%
2009 9.98 4.92 1,621 1.47 1.78 2.52 12
2008 9.77 3.88 3,254 1.46 1.76 2.59 14
2007 9.67 2.29 4,326 1.44 1.75 2.72 2
2006 9.76 0.60 5,345 1.46 1.75 2.75 5
CLASS C SHARES
2010 $10.15 4.82% $14,860 1.23% 1.52% 2.52% 17%
2009 9.95 5.03 4,938 1.22 1.53 2.77 12
2008 9.76 4.18 1,287 1.22 1.52 2.83 14
2007 9.66 2.52 259 1.19 1.50 2.96 2
2006 9.75 0.93 540 1.22 1.50 3.00 5
- ----------------------------------------
NATIONAL INTERMEDIATE TAX-FREE BOND FUND
- ----------------------------------------
FIDUCIARY SHARES
2010 $11.48 5.60% $81,121 0.51% 1.07% 2.99% 14%
2009 11.20 5.85 75,000 0.44 1.08 3.35 35
2008 10.95 5.06 62,883 0.29 1.05 3.82 19
2007 10.84 3.72 67,896 0.28 1.01 3.95 4
2006 10.92 1.94 75,401 0.28 1.00 4.00 7
CLASS A SHARES
2010 $11.48 5.33% $22,335 0.76% 1.32% 2.74% 14%
2009 11.20 5.60 19,285 0.69 1.33 3.10 35
2008 10.95 4.91 7,108 0.54 1.30 3.57 19
2007 10.83 3.37 3,159 0.53 1.25 3.70 4
2006 10.92 1.69 2,923 0.53 1.25 3.74 7
CLASS C SHARES
2010 (1) $11.49 2.25% $ 2,363 1.21%* 1.57%* 2.29%* 14%
2008 (2) 11.12 1.16 -- 0.97* 1.43* 3.01* 19**
2007 11.05 2.86 6 0.97 1.55 3.22 4
2006 11.12 1.24 25 1.00 1.51 3.27 7
2005 11.44 3.15 50 1.03 1.59 3.30 14
2004 (3) 11.54 0.23 --++ 0.67* 0.67* 4.30* 2
- --------------------
SHORT TERM BOND FUND
- --------------------
FIDUCIARY SHARES
2010 $10.12 4.04% $71,122 0.66% 0.99% 2.67% 27%
2009 10.00 5.24 51,471 0.66 1.07 3.99 54
2008 9.89 5.21 52,958 0.65 0.97 4.33 43
2007 9.82 4.81 54,638 0.65 0.92 4.13 33
2006 9.76 2.71 36,497 0.65 0.92 3.54 27
CLASS A SHARES
2010 $10.10 3.86% $22,581 0.94% 1.24% 2.39% 27%
2009 9.98 4.88 9,403 0.93 1.32 3.72 54
2008 9.88 4.93 271 0.93 1.23 4.05 43
2007 9.81 4.43 153 0.91 1.16 3.72 33
2006 9.76 2.46 1,113 0.90 1.21 3.26 27
The accompanying notes are an integral part of the financial statements.
172 HIGHMARK(R) FUNDS
DIVIDENDS AND
INVESTMENT ACTIVITIES DISTRIBUTIONS
------------------------------- --------------------
NET
ASSET NET REALIZED TOTAL
VALUE, NET AND UNREALIZED TOTAL NET FROM
BEGINNING INVESTMENT GAIN ON FROM INVESTMENT CAPITAL DIVIDENDS AND REDEMPTION
OF PERIOD INCOME (LOSS)+ INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS FEES
- ------------------------------------------------------------------------------------------------------------------------------------
- --------------------------------
SHORT TERM BOND FUND (CONTINUED)
- --------------------------------
CLASS C SHARES
2010 $10.10 $0.197 $ 0.140 $0.337 $(0.217) $ -- $(0.217) $ --
2009 9.99 0.323 0.112 0.435 (0.325) -- (0.325) --
2008 9.91 0.362 0.073 0.435 (0.355) -- (0.355) --
2007 9.84 0.334 0.066 0.400 (0.330) -- (0.330) --
2006 9.92 0.277 (0.084) 0.193 (0.273) -- (0.273) --
- -------------------------
WISCONSIN TAX-EXEMPT FUND
- -------------------------
CLASS A SHARES
2010 $10.10 $0.359 $ 0.422 $0.781 $(0.361) $ -- $(0.361) $ --
2009 (4) 9.61 0.267 0.481 0.748 (0.258) -- (0.258) --
2008 (5) 10.35 0.37^ (0.74) (0.37) (0.37) -- (0.37) --
2007 (5) 10.49 0.37^ (0.14) 0.23 (0.37) -- (0.37) --
2006 (5) 10.36 0.37^ 0.13 0.50 (0.37) -- (0.37) --
2005 (5) 10.55 0.37^ (0.19) 0.18 (0.37) -- (0.37) --
CLASS B SHARES
2010 $10.09 $0.285 $ 0.423 $0.708 $(0.288) $ -- $(0.288) $ --
2009 (4) 9.60 0.212 0.482 0.694 (0.204) -- (0.204) --
2008 (5) 10.34 0.29^ (0.74) (0.45) (0.29) -- (0.29) --
2007 (5) 10.48 0.29^ (0.14) 0.15 (0.29) -- (0.29) --
2006 (5) 10.35 0.29^ 0.13 0.42 (0.29) -- (0.29) --
2005 (5) 10.55 0.29^ (0.20) 0.09 (0.29) -- (0.29) --
CLASS C SHARES
2010 $10.09 $0.311 $ 0.424 $0.735 $(0.315) $ -- $(0.315) $ --
2009 (4) 9.60 0.216 0.481 0.697 (0.207) -- (0.207) --
2008 (5) 10.34 0.29^ (0.74) (0.45) (0.29) -- (0.29) --
2007 (5) 10.48 0.30^ (0.15) 0.15 (0.29) -- (0.29) --
2006 (5) 10.35 0.29^ 0.13 0.42 (0.29) -- (0.29) --
2005 (5) 10.55 0.29^ (0.20) 0.09 (0.29) -- (0.29) --
RATIO
OF EXPENSES
TO AVERAGE RATIO OF
NET NET NET ASSETS NET
ASSET ASSETS, RATIO EXCLUDING INVESTMENT
VALUE, END OF EXPENSES FEE WAIVERS INCOME (LOSS) PORTFOLIO
END TOTAL OF PERIOD TO AVERAGE AND REDUCTION TO AVERAGE TURNOVER
OF PERIOD RETURN*** (000) NET ASSETS OF EXPENSES NET ASSETS RATE
- -------------------------------------------------------------------------------------------------------------------
- --------------------------------
SHORT TERM BOND FUND (CONTINUED)
- --------------------------------
CLASS C SHARES
2010 $10.22 3.37% $ 17,565 1.39% 1.49% 1.94% 27%
2009 10.10 4.47 3,109 1.38 1.57 3.27 54
2008 9.99 4.44 362 1.37 1.47 3.61 43
2007 9.91 4.12 1,608 1.36 1.42 3.37 33
2006 9.84 1.98 2,509 1.37 1.47 2.80 27
- -------------------------
WISCONSIN TAX-EXEMPT FUND
- -------------------------
CLASS A SHARES
2010 $10.52 7.95% $146,665 0.90% 1.29% 3.45% 13%
2009 (4) 10.10 7.76 140,399 1.03* 1.28* 3.61* 9
2008 (5) 9.61 (3.72) 143,533 0.95 1.06 3.59 9
2007 (5) 10.35 2.24 157,899 0.99 1.04 3.56 9
2006 (5) 10.49 4.89 154,008 1.08 1.08 3.54 6
2005 (5) 10.36 1.68 150,097 1.09 1.09 3.48 8
CLASS B SHARES
2010 $10.51 7.10% $ 2,898 1.60% 1.79% 2.75% 13%
2009 (4) 10.09 7.18 3,142 1.77* 1.98* 2.87* 9
2008 (5) 9.60 (4.43) 3,319 1.70 1.81 2.84 9
2007 (5) 10.34 1.51 3,562 1.74 1.79 2.81 9
2006 (5) 10.48 4.14 3,630 1.83 1.83 2.79 6
2005 (5) 10.35 0.86 3,535 1.84 1.84 2.73 8
CLASS C SHARES
2010 $10.51 7.37% $ 10,157 1.35% 1.54% 3.00% 13%
2009 (4) 10.09 7.22 6,406 1.72* 1.93* 2.92* 9
2008 (5) 9.60 (4.33) 6,009 1.70 1.81 2.84 9
2007 (5) 10.34 1.51 6,640 1.74 1.79 2.81 9
2006 (5) 10.48 4.14 4,631 1.83 1.83 2.79 6
2005 (5) 10.35 0.86 4,195 1.84 1.84 2.73 8
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. FOR NET
ASSET VALUE, AT END OF PERIOD, "--" IS AN AMOUNT LESS THAN $1,000.
* ANNUALIZED.
** PORTFOLIO TURNOVER RATE BASED ON ONE YEAR DATA.
*** TOTAL RETURN DOES NOT REFLECT ANY APPLICABLE SALES CHARGE. TOTAL RETURN IS
FOR THE PERIOD INDICATED AND HAS NOT BEEN ANNUALIZED.
+ PER SHARE AMOUNTS CALCULATED USING AVERAGE SHARES METHOD, UNLESS OTHERWISE
INDICATED.
++ AMOUNT REPRESENTS LESS THAN $1,000.
^ PER SHARE AMOUNTS CALCULATED USING SEC METHOD.
(1) CLASS C SHARES RESUMED OPERATIONS ON DECEMBER 4, 2009, WITH A BEGINNING
NET ASSET VALUE PER SHARE OF $11.40.
(2) THE INFORMATION PRESENTED IS FOR THE PERIOD FROM AUGUST 1, 2007 THROUGH
SEPTEMBER 27, 2007. CLASS C SHARES CLOSED ON SEPTEMBER 27, 2007. THE
ENDING NET ASSET VALUE REFLECTS THE PRICE WHICH FINAL REDEMPTIONS WERE
PAID.
(3) COMMENCED OPERATIONS ON NOVEMBER 28, 2003.
(4) FOR THE NINE MONTH PERIOD ENDED JULY 31, 2009. ON JUNE 8, 2009, HIGHMARK
FUNDS ACQUIRED THE ASSETS AND ASSUMED THE IDENTIFIED LIABILITIES OF NORTH
TRACK EQUITY INCOME FUND, NORTH TRACK GENEVA GROWTH FUND, NORTH TRACK NYSE
ARCA TECH 100 INDEX FUND AND NORTH TRACK WISCONSIN TAX-EXEMPT FUND (THE
"NORTH TRACK FUNDS"). THE FISCAL YEAR END OF THE NORTH TRACK FUNDS, THE
PREDECESSOR FUNDS TO HIGHMARK EQUITY INCOME FUND, HIGHMARK GENEVA GROWTH
FUND, HIGHMARK NYSE ARCA TECH 100 INDEX FUND AND HIGHMARK WISCONSIN
TAX-EXEMPT FUND, WAS OCTOBER 31. THE FISCAL YEAR END OF THE SUCCESSOR
HIGHMARK FUNDS IS JULY 31.
(5) FOR THE YEAR ENDED OCTOBER 31.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 173
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2010
1. ORGANIZATION
HighMark(R) Funds ("HighMark" or the "Trust") was organized as a Massachusetts
business trust under a Declaration of Trust dated March 10, 1987.
HighMark is registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), as an open-end investment company with twenty-nine separate funds.
The following funds of the Trust are included in these financial statements:
Balanced Fund, Cognitive Value Fund, Core Equity Fund, Enhanced Growth Fund,
Equity Income Fund, Fundamental Equity Fund, Geneva Mid Cap Growth Fund
(formerly Geneva Growth Fund), Geneva Small Cap Growth Fund, International
Opportunities Fund, Large Cap Growth Fund, Large Cap Value Fund, NYSE Arca Tech
100 Index Fund, Small Cap Advantage Fund, Small Cap Value Fund, Value Momentum
Fund (collectively, the "Equity Funds"), Bond Fund, California Intermediate
Tax-Free Bond Fund, National Intermediate Tax-Free Bond Fund, Short Term Bond
Fund and Wisconsin Tax-Exempt Fund (collectively, the "Fixed-Income Funds"),
Capital Growth Allocation Fund, Diversified Equity Allocation Fund, Growth &
Income Allocation Fund and Income Plus Allocation Fund (collectively, the "Asset
Allocation Funds"). The Equity Funds, the Fixed-Income Funds, and the Asset
Allocation Funds are collectively the "Funds" and each is a "Fund." Pursuant to
HighMark's multiple class plan, the Funds may offer up to six classes of shares,
Class A Shares, Class B Shares and Class C Shares (collectively, the "Retail
Shares"), Fiduciary Shares, Class S Shares and Class M Shares. The Funds'
prospectuses provide a description of each Fund's investment objectives,
policies and strategies.
Class B Shares of the Funds are closed to purchases by new and existing
investors. Existing investors, however, may still exchange shares and reinvest
distributions in Class B Shares of the Funds.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Funds.
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS -- The preparation
of financial statements in accordance with accounting principles generally
accepted in the United States of America require 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 increases and
decreases in net assets from operations during the reporting period. Actual
results could differ from those estimates and assumptions.
SECURITY VALUATION -- Securities listed on a securities exchange, market or
automated quotation system for which quotations are readily available (except
for securities traded on NASDAQ) are valued at the last quoted sale price on the
primary exchange or market (foreign or domestic) on which they are traded, or,
if there is no such reported sale, at the most recent quoted bid price. For
securities traded on NASDAQ, the NASDAQ Official Closing Price is used. Where
available, debt securities are priced based upon valuations provided by
independent, third-party pricing agents. These third-party pricing agents may
employ methodologies that utilize actual market transactions, broker-dealer
supplied valuations, or other electronic data processing techniques. Such
techniques generally consider such factors as security prices, yields,
maturities, call features, ratings and developments relating to specific
securities in arriving at valuations. Debt obligations with remaining maturities
of sixty days or less may be valued at their amortized cost, which approximates
market value. Prices for most securities held in the Funds are obtained daily
from recognized independent pricing agents. If a security price cannot be
obtained from an independent, third-party pricing agent, the Funds seek to
obtain a bid price from at least one independent broker.
Options for which the primary market is a national securities exchange are
valued at the last sale price on the exchange on which they are traded, or, in
the absence of any sale, at the closing bid price for long option positions and
the closing ask price for short option positions. Options not traded on a
national securities exchange are valued at the last quoted bid price for long
option positions and the closing ask price for short option positions.
Investments in registered investment companies are priced at the fund's daily
net asset value. The assets of each of the Asset Allocation Funds consist
primarily of the investments in underlying affiliated registered investment
companies, which are valued at their respective daily net asset values in
accordance with the above, board-approved, pricing procedures.
Securities for which market prices are not readily available are valued in
accordance with the Funds' Fair Value Procedures established by HighMark's Board
of Trustees (the "Board"). The Funds' Fair Value Procedures are implemented
through a Fair Value Committee (the "Committee") designated by the Board. Some
of the more common reasons that may necessitate that a security be valued using
Fair Value Procedures include: the security's trading has been halted or
suspended; the security has been de-listed from a national exchange; the
security's primary trading market is temporarily closed at a time when under
normal conditions it would be open; the security has not been traded for a
significant amount of time; or the security's primary pricing source is not able
or willing to provide a price. When a security is valued in accordance with the
Fair Value Procedures, the Committee will determine the value after taking into
consideration relevant information reasonably available to the Committee.
For securities held by the Funds that principally trade on a foreign market or
exchange, a significant gap in time can exist between the time of a particular
security's last trade and the time at which the Fund calculates its net asset
value. The closing prices of securities may no longer reflect their market value
at the time the Fund calculates its net asset value if an event
174 HIGHMARK(R) FUNDS
that could materially affect the value of those securities (a "Significant
Event") has occurred between the time of the security's last close and the time
that the Fund calculates its net asset value. A Significant Event may relate to
a single issuer or to an entire market sector. If HighMark Capital Management,
Inc. (the "Adviser" or the "Administrator"), a wholly owned subsidiary of Union
Bank, N.A. (the "Bank") (a wholly owned subsidiary of UnionBanCal Corporation),
or the sub-adviser of a Fund becomes aware of a Significant Event that has
occurred with respect to a security or group of securities after the closing of
the exchange or market on which the security or securities principally trade,
but before the time at which the Fund calculates its net asset value, it shall
request that a Committee meeting be called.
The International Opportunities Fund also uses a third-party fair valuation
vendor. The vendor provides a fair value for foreign securities held by the Fund
based on certain factors and methodologies (involving, generally, tracking
valuation correlations between the U.S. market and each non-U.S. security).
Values from the fair value vendor are applied in the event that there is a
movement in the U.S. market that exceeds a specific threshold that has been
established by the Committee. The Committee has also established a "confidence
interval", which is used to determine the level of historical correlation
between the value of a specific foreign security and movements in the U.S.
market. In the event that the threshold established by the Committee is exceeded
on a specific day, the Fund will value the non-U.S. securities in its portfolio
that exceed the applicable "confidence interval" based upon the adjusted prices
provided by the fair valuation vendor.
FAIR VALUE MEASUREMENTS - The inputs and valuations techniques used to measure
fair value of the Funds' net assets are summarized into three levels as
described in the hierarchy below:
o Level 1 - unadjusted quoted prices in active markets for identical
assets or liabilities
o Level 2 - other significant observable inputs (including quoted
prices for similar securities, interest rates, prepayment
speeds, credit risk, etc.)
o Level 3 - significant unobservable inputs (including the Fund's own
assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities.
A summary of the levels for each of the Fund's investments as of July 31, 2010
is included with each Fund's schedule of investments.
FOREIGN CURRENCY TRANSLATION -- The books and records of the Funds are
maintained in U.S. dollars on the following basis:
(I) market value of investment securities, assets and liabilities at the
current rate of exchange; and
(II) purchases and sales of investment securities, income and expenses at
the relevant rates of exchange prevailing on the respective dates of
such transactions.
The Funds do not isolate the portion of gains and losses on investments in
securities that is due to changes in the foreign exchange rates from that which
is due to changes in market prices of securities. The Funds report certain
foreign currency related transactions as components of realized gains for
financial reporting purposes, whereas such components are treated as ordinary
income for federal income tax purposes.
FORWARD FOREIGN CURRENCY CONTRACTS -- The International Opportunities Fund may
enter into spot and forward foreign currency contracts as hedges against either
specific transactions, Fund positions or anticipated Fund positions. All
commitments are "marked-to-market" daily using the applicable spot or forward
foreign exchange rate, and any resulting unrealized gains or losses are
recorded. The International Opportunities Fund realizes gains and losses at the
time the spot or forward contracts are extinguished. Unrealized gains or losses
on outstanding positions in spot and forward foreign currency contracts held at
the close of the period are recognized as ordinary income or loss for federal
income tax purposes. The International Opportunities Fund could be exposed to
risk if the counterparties to the contracts are unable to meet the terms of the
contract and from unanticipated movements in the value of a foreign currency
relative to the U.S. dollar. Also, the risk exists that losses could exceed
amounts disclosed on the statement of assets and liabilities. The only Fund to
have engaged in forward foreign currency contracts was the International
Opportunities Fund. During the year ended July 31, 2010, the average number of
foreign currency contracts outstanding held by the International Opportunities
Fund, based on a quarterly average was 2. The unrealized appreciation and
depreciation on foreign currency contracts at July 31, 2010, and the net
realized gain (loss) and change in unrealized appreciation (depreciation) on
foreign currency contracts for the year ended July 31, 2010, are presented in
separate lines on the statement of assets and liabilities and statement of
operations, respectively.
SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are
accounted for on the date the security is purchased or sold (trade date). Costs
used in determining realized gains and losses on the sale of investment
securities are those of the specific securities sold, adjusted for the accretion
and amortization of purchase discounts and premiums, if any, during the
respective holding periods. Interest income is recorded on the accrual basis;
dividend income is recorded on the ex-dividend date, or in the case of certain
foreign investments, as soon as the Fund is made aware of it.
HIGHMARK(R) FUNDS 175
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JULY 31, 2010
REPURCHASE AGREEMENTS -- Securities pledged as collateral for repurchase
agreements are held by the custodian bank until the respective agreements
mature. Provisions of repurchase agreements and procedures adopted by the
Adviser are designed to ensure that the market value of the collateral is
sufficient in the event of default by the counterparty. If the counterparty
defaults and the value of the collateral declines or if the counterparty enters
an insolvency proceeding, realization of the collateral by a Fund may be delayed
or limited.
OPTIONS TRANSACTIONS -- In the normal course of pursuing its investment
objectives, certain Funds are subject to price volatility risk. In order to
produce incremental earnings and protect gains or minimize losses, certain
Funds, as described in their prospectuses, may participate in options
transactions including writing covered call options. A risk in writing a covered
call option is that a Fund gives up the opportunity of profit if the market
price of the underlying security increases. Also, certain Funds may purchase
call or put options with respect to securities that are permitted investments,
as described in the Funds' prospectuses. The risk in purchasing options is
limited to the premium paid. Counterparty risk is the risk to the option buyer
that the writer will not buy or sell the underlying securities as agreed.
A Fund realizes a gain or loss upon the expiration of a written call or
purchased call or put option, respectively. When a written call option is closed
prior to expiration by being exercised, the proceeds on the sale are increased
by the amount of original premium received.
When a purchased call or put option is closed prior to expiration by being
exercised, the cost of investments purchased or sold, respectively, is increased
by the amount of original premium paid.
A Fund records unrealized depreciation when the underlying security's market
price rises (in case of a written call) and unrealized appreciation/depreciation
when the underlying security's market price changes (in case of a purchased call
or put) to the extent sufficient to cover the option premium and transaction
costs.
There were no written options for the year ended July 31, 2010.
FUTURES CONTRACTS - The Core Equity Fund and the Small Cap Advantage Fund
utilized futures contracts during the year ended July 31, 2010. The Funds'
investments in futures contracts are designed to enable the Funds to more
closely approximate the performance of their benchmark indices or are designed
for tactical hedging purposes. Initial margin deposits of cash or securities are
made upon entering into futures contracts. The contracts are marked to market
daily at the settlement price established each day by the board of exchange on
which they are traded, and the resulting changes in value are accounted for as
unrealized gains and losses. Variation margin payments are paid or received,
depending upon whether unrealized losses or gains are incurred. When the
contract is closed, the Fund records a realized gain or loss equal to the
difference between the proceeds from (or cost of) the closing transaction and
the amount invested in the contract.
Risks of entering into futures contracts include the possibility that there will
be a decrease in the price of the underlying securities or index. Second, it is
possible that a lack of liquidity for futures contracts could exist in the
secondary market, resulting in an inability to close a position prior to its
maturity date. Third, the futures contract involves the risk that the Fund could
lose more than the original margin deposit required to initiate a futures
transaction. Additionally, the risk exists that losses could exceed amounts
disclosed on the statement of assets and liabilities. As of July 31, 2010, the
Core Equity Fund and the Small Cap Advantage Fund were the only Funds to have
open futures contracts. During the year ended July 31, 2010, the average number
of futures contracts outstanding, based on a quarterly average, was 21 and 10 on
the Core Equity Fund and the Small Cap Advantage Fund, respectively. The
unrealized appreciation and depreciation on futures contracts at July 31, 2010,
and the net realized gain (loss) and change in unrealized appreciation
(depreciation) on futures contracts for the year ended July 31, 2010, are
presented in separate lines on the statement of assets and liabilities and
statement of operations, respectively.
SECURITIES PURCHASED ON A WHEN-ISSUED BASIS -- Delivery and payment for
securities that have been purchased by a Fund on a when-issued or forward
commitment basis can take place up to a month or more after the trade date.
During the period, such securities are subject to market fluctuations and the
Fund may maintain, in a segregated account with its custodian, assets with a
market value equal to or greater than the amount of its purchase commitments.
These securities are recorded as an asset and are subject to changes in value
based upon changes in the general level of interest rates or other market
environment factors. Therefore, the purchase of securities on a "when-issued"
basis may increase the risk of fluctuations in a Fund's net asset value.
DISCOUNTS AND PREMIUMS -- Discounts and premiums are accreted or amortized over
the life of each security and are recorded as interest income for each of the
Funds using a method that approximates the effective interest method.
CLASSES -- Class specific expenses are borne by that class. Income, non-class
specific expenses and realized/unrealized gains and losses are allocated to the
respective classes on the basis of the relative daily net assets.
ASSET ALLOCATION FUNDS -- In addition to the direct expenses borne by the
shareholders of the Asset Allocation Funds, the shareholders also bear
indirectly a proportionate share of the expenses of the investment companies in
which the Funds invest ("underlying funds"). Capital gain distributions from the
underlying funds are booked as realized gains.
176 HIGHMARK(R) FUNDS
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Each of the Equity Funds may
declare and pay dividends from net investment income periodically, each of the
Fixed-Income Funds may declare and pay dividends from net investment income
monthly and the Asset Allocation Funds may declare and pay dividends from net
investment income quarterly. None of the Funds has a targeted dividend rate, and
none of the Funds guarantees that it will pay any dividends or other
distributions. Any net realized capital gains, if any, will be distributed at
least annually by all Funds.
DEFERRED COMPENSATION PLAN -- Under the deferred compensation plan approved by
the Board, members of the Board (the "Trustees") who are not officers or
employees of the Bank or any subsidiary of the Bank are permitted to defer a
portion of their annual compensation. Deferred amounts earn an approximate
return as though equivalent dollar amounts had been invested in shares of Funds
selected by the Trustees, which has the same economic effect for the Trustees as
if the Trustees had invested the deferred amounts in such Funds.
The deferred compensation plan is not funded and obligations thereunder
represent general unsecured claims against the general assets of HighMark.
However, HighMark has elected to invest in shares of those Funds selected by the
Trustees in order to match the deferred compensation obligation. The deferred
compensation is allocated to the Funds based on average net assets.
REDEMPTION AND EXCHANGE FEES -- The redemption fee and the exchange fee are
designed to discourage short-term trading. Proceeds of the fees are recorded as
an increase to paid-in capital of the applicable Fund.
CURRENT, EFFECTIVE OCTOBER 16, 2006
- --------------------------------------------------------------------------------
FIDUCIARY CLASS
----------------------------------------
Cognitive Value 2% redemption and 30 days or less
exchange fees after purchase
Geneva Small Cap Growth 2% redemption and 30 days or less
exchange fees after purchase
International Opportunities 2% redemption and 30 days or less
exchange fees after purchase
Small Cap Advantage 2% redemption and 30 days or less
exchange fees after purchase
Small Cap Value 2% redemption and 30 days or less
exchange fees after purchase
CLASS A
----------------------------------------
Cognitive Value 2% redemption and 30 days or less
exchange fees after purchase
Geneva Small Cap Growth 2% redemption and 30 days or less
exchange fees after purchase
International Opportunities 2% redemption and 30 days or less
exchange fees after purchase
Small Cap Advantage 2% redemption and 30 days or less
exchange fees after purchase
Small Cap Value 2% redemption and 30 days or less
exchange fees after purchase
CLASS M
----------------------------------------
Cognitive Value 2% redemption and 30 days or less
exchange fees after purchase
International Opportunities 2% redemption and 30 days or less
exchange fees after purchase
For the year ended July 31, 2010, the Cognitive Value Fund, the Geneva Small Cap
Growth Fund, the International Opportunities Fund and the Small Cap Value Fund
received redemption fees of $7, $50, $3,405 and $1,051, respectively. A Fund's
redemption fees are allocated to all classes in that Fund based on relative net
assets.
3. AGREEMENTS AND TRANSACTIONS WITH AFFILIATES
HighMark and the Adviser are parties to an Investment Advisory agreement. For
its services, the Adviser is entitled to receive a fee with respect to each
Fund, which is calculated daily and paid monthly, based on the daily net assets
of each Fund, at an annual rate of:
Balanced ............................... 0.60%
Cognitive Value ........................ 0.75% on the first $500 million
0.70% on assets over $500 million
Core Equity ............................ 0.60%
Enhanced Growth ........................ 0.75% on the first $500 million
0.70% on the next $500 million
0.65% on assets over $1 billion
Equity Income .......................... 0.55% on the first $100 million
0.50% on the next $400 million
0.45% on assets over $500 million
Fundamental Equity ..................... 0.60%
Geneva Mid Cap Growth .................. 0.75% on the first $250 million
0.70% on the next $250 million
0.65% on assets over $500 million
Geneva Small Cap Growth ................ 1.00% on the first $250 million
0.95% on the next $250 million
0.90% on assets over $500 million
International Opportunities ............ 0.95% on the first $250 million
0.90% on the next $250 million
0.85% on the next $500 million
0.80% on assets over $1 billion
Large Cap Growth ....................... 0.60%
Large Cap Value ........................ 0.60%
NYSE Arca Tech 100 Index ............... 0.50% on the first $50 million
0.30% on the next $200 million
0.25% on the next $250 million
0.20% on assets over $500 million
Small Cap Advantage .................... 0.95%
Small Cap Value ........................ 1.00%
Value Momentum ......................... 0.60%
Capital Growth Allocation .............. 0.175%
Diversified Equity Allocation .......... 0.175%
Growth & Income Allocation ............. 0.175%
Income Plus Allocation ................. 0.175%
Bond ................................... 0.50%
California Intermediate Tax-Free Bond .. 0.50%
National Intermediate Tax-Free Bond .... 0.50%
Short Term Bond ........................ 0.40%
Wisconsin Tax-Exempt ................... 0.50% on the first $250 million
0.40% on assets over $250 million
HIGHMARK(R) FUNDS 177
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JULY 31, 2010
Effective December 1, 2009, the Adviser contractually agreed to reduce its fees
throughout the period December 1, 2009 through November 30, 2010 and to the
extent necessary to reimburse the Funds in order to limit the Funds from
exceeding certain expense limitations as follows:
FIDUCIARY CLASS A CLASS B CLASS C CLASS M
SHARES SHARES SHARES SHARES SHARES
--------- ------- ------- ------- -------
Balanced .......................... 0.99% 1.24% 1.84% 1.84% n/a
Cognitive Value ................... 1.22 1.47 n/a 2.07 1.07%
Core Equity ....................... 1.00 1.25 1.85 1.85 n/a
Enhanced Growth ................... 1.20 1.45 n/a 2.05 1.05
Equity Income ..................... 0.90 1.15 1.75 1.75 n/a
Fundamental Equity ................ 0.97 1.22 n/a 1.82 n/a
Geneva Mid Cap Growth ............. 1.13 1.38 1.98 1.98 n/a
Geneva Small Cap Growth. .......... 1.37 1.62 n/a 2.22 n/a
International Opportunities ....... 1.47 1.62 n/a 2.32 1.32
Large Cap Growth .................. 1.02 1.27 1.87 1.87 n/a
Large Cap Value ................... 1.00 1.25 1.85 1.85 n/a
NYSE Arca Tech 100 Index .......... 0.83 1.08 1.68 1.68 n/a
Small Cap Advantage ............... 1.37 1.62 n/a 2.22 n/a
Small Cap Value ................... 1.37 1.62 2.22 2.22 n/a
Value Momentum .................... 1.02 1.27 1.87 1.87 n/a
Capital Growth Allocation ......... 0.33 0.58 n/a 1.28 n/a
Diversified Equity Allocation ..... 0.33 0.58 n/a 1.28 n/a
Growth & Income Allocation ........ 0.33 0.58 n/a 1.28 n/a
Income Plus Allocation ............ 0.33 0.58 n/a 1.28 n/a
Bond .............................. 0.79 1.04 1.72 1.47 n/a
California Intermediate
Tax-Free Bond .................. 0.54 0.79 1.49 1.24 n/a
National Intermediate
Tax-Free Bond .................. 0.52 0.77 n/a 1.22 n/a
Short Term Bond ................... 0.70 0.95 n/a 1.40 n/a
Wisconsin Tax-Exempt .............. 0.65 0.90 1.60 1.35 n/a
n/a -- not applicable
Effective December 1, 2009, the Adviser may recoup from the Fund any of the fees
and expenses it has waived and/or reimbursed until the end of the third fiscal
year after the end of the fiscal year in which such waiver and/or reimbursement
occurs, subject to certain limitations. This recoupment could reduce the Fund's
future total return.
The total amount of fees waived and/or assumed by the Adviser during the fiscal
year ended July 31, and is therefore currently eligible for recoupment provided
that the total recoupment does not exceed the Funds' respective limitation, is
as follows:
FOR THE PERIOD
DECEMBER 1, 2009
THROUGH
JULY 31, 2010
----------------
Balanced .................................................... 73,760
Core Equity ................................................. 48,012
Enhanced Growth ............................................. 3,996
Equity Income ............................................... 73,275
Fundamental Equity .......................................... 61,786
Geneva Mid Cap Growth ....................................... 122,334
Geneva Small Cap ............................................ 47,565
Large Cap Growth ............................................ 66,315
Large Cap Value ............................................. 93,692
NYSE Arca Tech 100 Index .................................... 68,245
Small Cap Advantage ......................................... 48,889
Small Cap Value ............................................. 166,746
Value Momentum .............................................. 6,388
Capital Growth Allocation ................................... 113,246
Diversified Equity Allocation ............................... 60,394
Growth & Income Allocation .................................. 99,056
Income Plus Allocation Fund ................................. 66,595
FOR THE PERIOD
DECEMBER 1, 2009
THROUGH
JULY 31, 2010
----------------
Bond ........................................................ 53,629
CA Intermediate Tax-Free Bond ............................... 334,529
National Intermediate Tax-Free Bond ......................... 239,461
Short Term Bond ............................................. 57,114
Wisconsin Tax-Exempt ........................................ 200,279
Effective August 1, 2009 through November 30, 2009, the Adviser contractually
agreed to reduce its fees and to the extent necessary to reimburse the Funds in
order to limit the Funds from exceeding certain expense limitations as follows:
FIDUCIARY CLASS A CLASS B CLASS C CLASS M
SHARES SHARES SHARES SHARES SHARES
--------- ------- ------- ------- -------
Balanced .......................... 0.97% 1.22% 1.82% 1.82% n/a
Cognitive Value ................... 1.17 1.42 n/a 2.02 1.02%
Core Equity ....................... 0.95 1.20 1.80 1.80 n/a
Enhanced Growth ................... 1.15 1.40 n/a 2.00 1.00
Equity Income ..................... 0.90 1.15 1.75 1.75 n/a
Fundamental Equity ................ 0.97 1.22 n/a 1.82 n/a
Geneva Mid Cap Growth ............. 1.13 1.38 1.98 1.98 n/a
Geneva Small Cap Growth. .......... 1.37 1.62 n/a 2.22 n/a
International Opportunities ....... 1.42 1.57 n/a 2.27 1.27
Large Cap Growth .................. 0.97 1.22 1.82 1.82 n/a
Large Cap Value ................... 0.95 1.20 1.80 1.80 n/a
NYSE Arca Tech 100 Index. ......... 0.83 1.08 1.68 1.68 n/a
Small Cap Advantage ............... 1.32 1.57 n/a 2.17 n/a
Small Cap Value ................... 1.37 1.62 2.22 2.22 n/a
Value Momentum .................... 0.97 1.22 1.82 1.82 n/a
Capital Growth Allocation ......... 0.33 0.58 n/a 1.28 n/a
Diversified Equity Allocation ..... 0.33 0.58 n/a 1.28 n/a
Growth & Income Allocation ........ 0.33 0.58 n/a 1.28 n/a
Income Plus Allocation ............ 0.33 0.58 n/a 1.28 n/a
Bond .............................. 0.77 1.02 1.70 1.45 n/a
California Intermediate
Tax-Free Bond .................. 0.52 0.77 1.47 1.22 n/a
National Intermediate
Tax-Free Bond .................. 0.50 0.75 n/a n/a n/a
Short Term Bond ................... 0.68 0.93 n/a 1.38 n/a
Wisconsin Tax-Exempt .............. 0.65 0.90 1.60 1.35 n/a
n/a -- not applicable
The Fund's total actual annual operating expense ratio may be less than the
amount shown for such Fund above due to additional waivers/reimbursements
described below.
During the year ended July 31, 2010, the Adviser reimbursed the Cognitive Value
Fund $11,198 for losses incurred on transactions not meeting the Fund's
investment guidelines.
Effective April 3, 2006, the Adviser and Bailard, Inc. ("Bailard") entered into
an investment sub-advisory agreement relating to the Cognitive Value Fund, the
Enhanced Growth Fund and the International Opportunities Fund. Bailard is
entitled to receive a fee at the annual rate of 0.375% of the daily net assets
on the first $500 million and 0.35% on the daily net assets over $500 million of
the Cognitive Value Fund. Bailard is entitled to receive a fee at the annual
rate of 0.375% of the daily net assets on the first $500 million, 0.350% on the
daily net assets on the next $500 million and 0.325% on the daily net assets
over $1 billion of the Enhanced Growth Fund. Bailard is entitled to receive a
fee at the annual rate of 0.475% of the daily net assets on the first $250
million, 0.450% on the daily net
178 HIGHMARK(R) FUNDS
assets on the next $250 million, 0.425% on the daily net assets on the next $500
million and 0.400% on the daily net assets over $1 billion of the International
Opportunities Fund. Bailard's fee is paid from the Adviser's fee.
Effective May 21, 2010, the Adviser and Ziegler Capital Management, LLC
("Ziegler") entered into an interim investment sub-advisory agreement relating
to HighMark Equity Income Fund. Ziegler is entitled to be paid monthly a fee
equal, with respect to any particular month, to 50% of the total of (i) the
adjusted gross advisory fee payable to the Adviser by the Fund with respect to
such month, minus (ii) any adviser pay or supplemental payments paid to
financial intermediaries or other third parties for the offering or sale of
shares in such Fund or the ongoing maintenance of relationships with
shareholders of such Fund (including the performance of services with respect to
such shareholders) by an adviser or a distributor of HighMark or any of its
affiliates (whether as revenue sharing, or for shareholder services,
recordkeeping services or other services) with respect to such month. Ziegler's
fee is paid from the Adviser's fee. Previously Ziegler had an investment
sub-advisory agreement, with the same compensation structure disclosed above,
with the Adviser from June 8, 2009 to May 20, 2010 relating to Equity Income
Fund.
Effective June 8, 2009, the Adviser and Geneva Capital Management Ltd.
("Geneva") entered into two investment sub-advisory agreements relating to
HighMark Geneva Mid Cap Growth Fund and HighMark Geneva Small Cap Growth Fund,
respectively. Geneva shall be paid monthly a fee equal, with respect to any
particular month, to 50% of the total of (i) the gross advisory fee payable to
Adviser by the applicable Fund with respect to such month, minus (ii) any
adviser pay or supplemental payments paid to financial intermediaries or other
third parties under agreements executed after HighMark Geneva Mid Cap Growth
Fund and HighMark Geneva Small Cap Growth Fund commence operations, for the
offering or sale of shares in such Fund or the ongoing maintenance of
relationships with shareholders of such Fund (including the performance of
services with respect to such shareholders) by an adviser or a distributor of
HighMark or any of its affiliates (whether as revenue sharing, or for
shareholder services, recordkeeping services or other services) with respect to
such month up to an amount not to exceed 0.10% of the average daily net assets
of the Fund with respect to such month. Geneva's fee is paid from the Adviser's
fee.
Effective May 21, 2010, the Adviser and Ziegler entered into an interim
investment sub-advisory agreement relating to the HighMark NYSE Arca Tech 100
Index Fund. Ziegler shall be paid monthly a fee equal, with respect to any
particular month, to 50% of the total of (i) the adjusted gross advisory fee
payable to Adviser by the Fund with respect to such month, minus (ii) any
adviser pay or supplemental payments paid to financial intermediaries or other
third parties for the offering or sale of shares in such Fund or the ongoing
maintenance of relationships with shareholders of such Fund (including the
performance of services with respect to such shareholders) by an adviser or a
distributor of HighMark or any of its affiliates (whether as revenue sharing, or
for shareholder services, recordkeeping services or other services) with respect
to such month, minus (iii) all amounts paid by the Fund and/or Adviser with
respect to such month pursuant to any license agreement relating to the Fund's
use of the NYSE Arca Tech 100 Index and/or any trademarks Archipelago Holdings,
Inc. ("Licensing Agreement") or any successor thereto owns or to which it has
rights. Ziegler's fee is paid from the Adviser's fee. Prior to June 8, 2009, the
fees related to the Licensing Agreement were reimbursed to the Fund through
broker trading commissions. Previously Ziegler had an investment sub-advisory
agreement, with the same compensation structure disclosed above, with the
Adviser from June 8, 2009 to May 20, 2010 relating to NYSE Arca Tech 100 Index
Fund.
Effective May 21, 2010, the Adviser and Ziegler entered into an interim
investment sub-advisory agreement relating to HighMark Wisconsin Tax-Exempt
Fund. Ziegler shall be paid monthly a fee equal, with respect to any particular
month, to 50% of the total of (i) the adjusted gross advisory fee payable to
Adviser by the Fund with respect to such month, minus (ii) the lesser of (1) the
contractually committed expense reimbursement rate, if any, in effect on the
date the Fund commences operations and (2) the contractually committed expense
reimbursement rate, if any, then in effect, minus (iii) any adviser pay or
supplemental payments paid to financial intermediaries or other third parties
for the offering or sale of shares in such Fund or the ongoing maintenance of
relationships with shareholders of such Fund (including the performance of
services with respect to such shareholders) by an adviser or a distributor of
HighMark or any of its affiliates (whether as revenue sharing, or for
shareholder services, recordkeeping services or other services) with respect to
such month. Ziegler's fee is paid from the Adviser's fee. Previously Ziegler had
an investment sub-advisory agreement, with the same compensation structure
disclosed above, with the Adviser from June 8, 2009 to May 20, 2010 relating to
Wisconsin Tax-Exempt Fund.
Effective May 1, 2010, HighMark Capital Management became sole investment
adviser to the Large Cap Value Fund. Prior to May 1, 2010 the Adviser and
Aronson+Johnson+Ortiz, LP ("AJO") were parties to an investment sub-advisory
agreement relating to the Large Cap Value Fund. AJO was entitled to receive a
fee at the annual rate of 0.30% of the daily net assets of the Large Cap Value
Fund. AJO's fee was paid from the Adviser's fee.
Effective October 1, 2001, the Adviser and LSV Asset Management ("LSV") entered
into an investment sub-advisory agreement relating to the Small Cap Value Fund.
LSV is entitled to receive a fee at the annual rate of 0.65% of the daily net
assets on the first $50 million, 0.55% of the daily net assets on the next $50
million and 0.50% on the daily net assets over $100 million of the Small Cap
Value Fund. LSV's fee is paid from the Adviser's fee.
HIGHMARK(R) FUNDS 179
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JULY 31, 2010
Effective December 10, 2007, the Administrator and HighMark are parties to an
administrative services agreement (the "Administrative Services Agreement")
under which the Administrator provides the Funds with administrative services
for an annual fee of 0.15% of the first $8 billion of the average daily net
assets of the Funds and 0.14% of such average daily net assets in excess of $8
billion allocated to each Fund based on its respective net assets. Prior to
December 10, 2007, the Administrator and HighMark were parties to an
administrative services agreement under which the Administrator provided the
Funds with management and administrative services for an annual fee of 0.15% of
the first $10 billion of the average daily net assets of the Funds and 0.145% of
such average daily net assets in excess of $10 billion allocated to each Fund
based on its respective net assets, possibly subject to certain minimum fees.
The Administrator may voluntarily waive its fee, subject to termination at any
time by the Administrator.
Effective December 3, 2007 for the Equity Funds and the Asset Allocation Funds
and December 10, 2007 for the Fixed-Income Funds pursuant to a separate
agreement with the Administrator, BNY Mellon Investment Servicing (U.S.) Inc.
(the "Sub-Administrator"), formerly known as PNC Global Investment Servicing
(U.S.) Inc., performs sub-administration services on behalf of each Fund, for
which it receives a fee paid by the Administrator at the annual rate of 0.025%
of the first $8 billion of the aggregate average net assets of the Funds and
0.015% of such assets in excess of $8 billion. For the year ended July 31, 2010,
the Sub-Administrator earned sub-administration fees in the amount of $631,668.
Prior to December 1, 2009, the Administrator was responsible for certain fees
charged by HighMark's transfer agent and certain routine legal expenses incurred
by HighMark. These expenses are included in "Reduction of Expenses by the
Administrator" on the statement of operations.
Certain officers of HighMark and Trustees who are deemed to be "interested
persons" of HighMark as defined in the 1940 Act ("Interested Trustees") are also
officers of the Adviser, the Adviser's parent and the Sub-Administrator. Such
officers and Interested Trustees, except for the Funds' Chief Compliance
Officer, are paid no fees by the Funds for serving as officers of HighMark.
The Trustees who are not "interested persons" of HighMark ("Independent
Trustees") receive quarterly retainer fees and fees and expenses for each
meeting of the Board attended, which is paid by the Funds.
Effective August 1, 2009, Boston Financial Data Services, Inc. ("BFDS") serves
as the transfer agent, dividend disbursing agent and shareholder servicing agent
for the Funds. Prior to August 1, 2009, State Street Bank and Trust Company
("State Street") served as the transfer agent, dividend disbursing agent and
shareholder servicing agent for the Funds. State Street had sub-contracted such
services to its affiliate, BFDS.
Effective December 1, 2008, HighMark Funds Distributors, Inc. (the
"Distributor"), a wholly owned subsidiary of BNY Mellon Distributors Inc.,
formerly known as PFPC Distributors, Inc., and HighMark are parties to an
underwriting agreement dated December 1, 2008. HighMark has adopted 12b-1 Plans
(the "Plans") with respect to Class A, Class B and Class C Shares that allow
each Fund to pay distribution and service fees to the Distributor as
compensation for its services under the Plans. The Distributor receives a
distribution fee computed daily and paid monthly, at the annual rate of 0.25% of
the daily net assets attributable to each Fund's Class A Shares, 0.75% of the
daily net assets attributable to each Fund's Class B Shares and 1.00% of the
daily net assets attributable to each Fund's Class C Shares (0.75% of the daily
net assets of the Bond Fund, the California Intermediate Tax-Free Bond Fund, the
National Intermediate Tax-Free Bond Fund, the Short Term Bond Fund and the
Wisconsin Tax-Exempt Fund), which may be used by the Distributor to provide
compensation for sales support and distribution activities. Prior to December 1,
2008, PFPC Distributors, Inc. (the "Prior Distributor") and HighMark were
parties to a distribution agreement dated January 1, 2008. No compensation was
paid to the Prior Distributor for services rendered to the Fiduciary Shares
under this agreement. HighMark had adopted 12b-1 plans with respect to Class A,
Class B and Class C Shares that allowed each Fund to pay distribution and
service fees to the Prior Distributor as compensation for its services under the
same fee structure described above.
Prior to June 8, 2009, the North Track Equity Income Fund, North Track Geneva
Growth Fund, North Track NYSE Arca Tech 100 Index Fund and the North Track
Wisconsin Tax-Exempt Fund (predecessor funds to the HighMark Equity Income Fund,
HighMark Geneva Growth Fund, HighMark NYSE Arca Tech 100 Index Fund and HighMark
Wisconsin Tax-Exempt Fund) had adopted a Rule 12b-1 distribution plan (the
"Former Plan") with respect to Class A, Class B, Class C and Class R shares and
had entered into a distribution agreement with B.C. Ziegler and Company (the
"Former Distributor"). The Funds made payments to the Former Distributor at an
annual rate of 0.25% of Class A average daily net assets, 1.00% of Class B and
Class C average daily net assets and 0.75% of Class R average daily net assets
pursuant to the Former Plan. The payments provided compensation for distribution
and shareholding servicing expenses which included, but are not limited to,
payments to broker-dealers that have entered into sales agreements with respect
to shares of the Funds. Class R Shares were exchanged for Class A Shares on June
8, 2009.
HighMark has also adopted shareholder service plans/agreements permitting
payment of compensation to service providers, that may include the Bank or its
affiliates that have agreed to provide certain shareholder support services for
its customers who own Fiduciary, Class A or Class B Shares. In consideration for
such services, a service provider is entitled to receive compensation at the
annual rate of up to 0.25% of the average daily net assets of the applicable
class or classes of shares of the Funds. The service providers have agreed to
waive
180 HIGHMARK(R) FUNDS
a portion of their fees for certain classes of all Funds for the year ended July
31, 2010. For the year ended July 31, 2010, the Bank, or its affiliates earned
shareholder servicing fees, net of waivers, from the Funds in the amount of
approximately $2,342,440, which is included in the shareholder servicing fees
and the related waivers on the statement of operations.
A sales charge is imposed on purchases of Class A Shares at the following rates:
CLASS A
SHARES*
-------
Balanced .......................................................... 5.50%
Cognitive Value ................................................... 5.50
Core Equity ....................................................... 5.50
Enhanced Growth ................................................... 5.50
Equity Income ..................................................... 5.50
Fundamental Equity ................................................ 5.50
Geneva Mid Cap Growth ............................................. 5.50
Geneva Small Cap Growth ........................................... 5.50
International Opportunities ....................................... 5.50
Large Cap Growth .................................................. 5.50
Large Cap Value ................................................... 5.50
NYSE Arca Tech 100 Index .......................................... 5.50
Small Cap Advantage ............................................... 5.50
Small Cap Value ................................................... 5.50
Value Momentum .................................................... 5.50
Capital Growth Allocation ......................................... 5.50
Diversified Equity Allocation ..................................... 5.50
Growth & Income Allocation ........................................ 5.50
Income Plus Allocation ............................................ 4.50
Bond .............................................................. 2.25
California Intermediate Tax-Free Bond ............................. 2.25
National Intermediate Tax-Free Bond ............................... 2.25
Short Term Bond ................................................... 2.25
Wisconsin Tax-Exempt .............................................. 2.25
* Maximum sales charge as a percentage of offering price. Lower sales
charges apply based on amount invested.
A CDSC is imposed on certain redemptions of Class B Shares. The CDSC varies
depending on the number of years from the purchase of Class B Shares until the
redemption of such shares.
YEARS SINCE CONTINGENT DEFERRED
PURCHASE MADE SALES CHARGE
--------------------------------------------------
First .................... 5%
Second ................... 4%
Third .................... 3%
Fourth ................... 3%
Fifth .................... 2%
Sixth .................... 1%
Seventh and Eighth ....... None
A CDSC of 1% is imposed when Class C Shares are redeemed within the first year
of purchase.
Union Bank, N.A. acts as custodian (the "Custodian") for the Funds. The
Custodian, as compensation for its services, receives a fee at the annual rate
of 0.00625% of each Fund's daily net assets except for the International
Opportunities Fund, which pays fees based on transactions and assets. The
Custodian plays no role in determining the investment policies of the Funds or
which securities are to be purchased or sold in the Funds.
4. INVESTMENT TRANSACTIONS
The purchases and sales (including maturities) of investment securities by the
Equity Funds and Fixed-Income Funds, excluding short-term investments and U.S.
government securities, for the year ended July 31, 2010 are as follows:
INVESTMENT SECURITIES
-----------------------------
PURCHASES SALES
------------- -------------
Balanced ....................................... $ 6,237,118 $ 6,235,063
Cognitive Value ................................ 109,594,402 118,784,062
Core Equity .................................... 57,041,769 70,077,863
Enhanced Growth ................................ 11,809,017 21,022,386
Equity Income .................................. 7,143,346 11,797,791
Fundamental Equity ............................. 6,148,794 3,576,407
Geneva Mid Cap Growth .......................... 64,150,201 50,437,581
Geneva Small Cap Growth ........................ 8,912,162 4,051,942
International Opportunities .................... 179,788,578 181,562,662
Large Cap Growth ............................... 30,602,860 50,589,353
Large Cap Value ................................ 203,668,160 282,162,768
NYSE Arca Tech 100 Index ....................... 17,885,965 54,918,654
Small Cap Advantage ............................ 17,721,189 20,668,807
Small Cap Value ................................ 25,517,158 45,652,264
Value Momentum ................................. 36,856,693 74,281,425
Capital Growth Allocation ...................... 11,953,618 14,793,512
Diversified Equity Allocation .................. 3,302,212 2,386,505
Growth & Income Allocation ..................... 16,107,333 15,935,336
Income Plus Allocation ......................... 8,259,512 3,574,670
Bond ........................................... 88,850,276 42,930,486
California Intermediate Tax-Free Bond .......... 78,234,631 28,170,279
National Intermediate Tax-Free Bond ............ 21,932,873 12,955,067
Short Term Bond ................................ 55,238,236 15,160,033
Wisconsin Tax-Exempt ........................... 21,485,232 19,466,068
The purchases and sales (including maturities) of U.S. Government securities by
the Equity Funds and Fixed-Income Funds for the year ended July 31, 2010 are as
follows:
INVESTMENT SECURITIES
-----------------------------
PURCHASES SALES
------------- -------------
Balanced ....................................... $ 298,047 $ 703,846
Bond ........................................... 36,723,558 65,866,799
Short Term Bond ................................ 17,364,003 7,707,607
HIGHMARK(R) FUNDS 181
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JULY 31, 2010
Investments made by the Asset Allocation Funds in other HighMark Funds are
considered to be investments in Affiliated Companies as defined under section
2(a)(2) of the 1940 Act. A summary of the investment and income activity in each
affiliated registered investment company's Fiduciary Shares for each Asset
Allocation Fund is as follows:
CAPITAL GROWTH ALLOCATION
- -------------------------------------------------------------------------------------------
REALIZED INCOME FROM
AFFILIATED REGISTERED GAINS AFFILIATED
INVESTMENT COMPANY CONTRIBUTIONS WITHDRAWALS (LOSSES) INVESTMENTS
- -------------------------------- ------------- ----------- ------------ -----------
Cognitive Value ................ $ 22,675 $ 752,373 $ (152,493) $ 6,034
Core Equity .................... 1,160,079 2,951,012 (762,952) 80,066
Enhanced Growth ................ 446,161 712,325 146,074 235
Fundamental Equity ............. 464,823 981,200 (101,267) 20,932
Geneva Mid Cap Growth .......... -- 69,190 14,290 --
Geneva Small Cap Growth ........ 422,014 -- -- --
International Opportunities .... 2,115,608 1,682,885 (494,585) 97,112
Large Cap Growth ............... 351,721 1,905,448 (269,716) 26,695
Large Cap Value ................ 1,119,368 946,350 (204,684) 72,937
Small Cap Advantage ............ 1,064,911 2,221,060 (569,915) 17,004
Small Cap Value ................ 702,050 405,738 (54,065) 11,178
Value Momentum ................. 843,314 2,786,291 (1,048,397) 32,946
Bond ........................... 169,785 167,525 3,933 3,700
Short Term Bond ................ 995,152 928,014 21,407 70,144
Diversified Money Market ....... 7,700,698 8,046,088 -- 1,224
------------- ----------- ------------ -----------
TOTAL: $ 17,578,359 $24,555,499 $ (3,472,370) $ 440,207
============= =========== ============ ===========
DIVERSIFIED EQUITY ALLOCATION
- -------------------------------------------------------------------------------------------
REALIZED INCOME FROM
AFFILIATED REGISTERED GAINS AFFILIATED
INVESTMENT COMPANY CONTRIBUTIONS WITHDRAWALS (LOSSES) INVESTMENTS
- -------------------------------- ------------- ----------- ------------ -----------
Cognitive Value ................ $ 7,668 $ 93,347 $ 2,096 $ 1,059
Core Equity .................... 490,415 506,792 (122,398) 15,954
Enhanced Growth ................ 128,116 127,459 50,734 48
Fundamental Equity ............. 257,498 206,720 (23,565) 4,076
Geneva Mid Cap Growth .......... 16,607 7,286 1,556 --
Geneva Small Cap Growth ........ 88,686 -- -- --
International Opportunities .... 620,698 363,101 (100,969) 16,550
Large Cap Growth ............... 119,290 275,298 (4,155) 3,864
Large Cap Value ................ 436,242 225,981 (73,349) 12,086
Small Cap Advantage ............ 277,127 226,176 (9,712) 3,036
Small Cap Value ................ 147,276 34,876 284 1,987
Value Momentum ................. 257,873 382,968 (49,771) 6,688
Diversified Money Market ....... 1,673,248 1,662,320 -- 64
------------- ----------- ------------ -----------
TOTAL: $ 4,520,744 $ 4,112,324 $ (329,249) $ (65,412)
============= =========== ============ ===========
GROWTH & INCOME ALLOCATION
- -------------------------------------------------------------------------------------------
REALIZED INCOME FROM
AFFILIATED REGISTERED GAINS AFFILIATED
INVESTMENT COMPANY CONTRIBUTIONS WITHDRAWALS (LOSSES) INVESTMENTS
- -------------------------------- ------------- ----------- ------------ -----------
Cognitive Value ................ $ 22,916 $ 586,855 $ (66,474) $ 5,035
Core Equity .................... 1,194,012 2,291,442 (644,347) 60,175
Enhanced Growth ................ 380,163 546,181 131,268 180
Fundamental Equity ............. 445,227 644,340 (73,845) 15,564
Geneva Mid Cap Growth ......... 40,210 48,818 5,610 --
Geneva Small Cap Growth ........ 376,223 -- -- --
International Opportunities .... 2,330,416 1,837,458 (529,299) 82,813
Large Cap Growth ............... 326,466 1,409,703 (239,602) 22,606
Large Cap Value ................ 1,439,336 1,114,342 (316,661) 61,033
Small Cap Advantage ............ 1,348,143 1,664,278 (20,441) 13,987
GROWTH & INCOME ALLOCATION
- -------------------------------------------------------------------------------------------
REALIZED INCOME FROM
AFFILIATED REGISTERED GAINS AFFILIATED
INVESTMENT COMPANY CONTRIBUTIONS WITHDRAWALS (LOSSES) INVESTMENTS
- -------------------------------- ------------- ----------- ------------ -----------
Small Cap Value ................ $ 716,182 $ 264,426 $ 100,819 $ 9,362
Value Momentum ................. 782,536 1,625,861 (281,837) 24,812
Bond ........................... 1,867,642 1,923,267 148,379 161,757
Short Term Bond ................ 2,807,908 2,231,578 36,132 173,967
Diversified Money Market ....... 8,549,604 8,582,395 -- 2,954
------------- ----------- ------------ -----------
TOTAL: $ 22,626,984 $24,770,944 $ (1,750,298) $ 634,245
============= =========== ============ ===========
INCOME PLUS ALLOCATION
- -------------------------------------------------------------------------------------------
REALIZED INCOME FROM
AFFILIATED REGISTERED GAINS AFFILIATED
INVESTMENT COMPANY CONTRIBUTIONS WITHDRAWALS (LOSSES) INVESTMENTS
- -------------------------------- ------------- ----------- ------------ -----------
Cognitive Value ................ $ 12,143 $ 49,766 $ 18,628 $ 826
Core Equity .................... 790,992 395,605 92,709 12,514
Enhanced Growth ................ 84,418 68,773 30,976 28
Fundamental Equity ............. 348,652 185,334 (4,511) 3,341
Geneva Mid Cap Growth .......... 13,704 -- -- --
Geneva Small Cap Growth ........ 71,745 -- -- --
International Opportunities .... 420,413 63,017 14,070 3,764
Large Cap Growth ............... 360,704 217,907 40,658 5,586
Large Cap Value ................ 607,207 161,762 2,718 11,167
Small Cap Advantage ............ 494,541 212,053 111,714 2,480
Small Cap Value ................ 153,513 21,405 14,233 1,559
Value Momentum ................. 303,967 230,029 64,162 5,656
Bond ........................... 1,416,553 607,106 30,125 105,226
Short Term Bond ................ 2,508,313 758,754 15,176 116,243
Diversified Money Market ....... 4,530,729 4,318,765 -- 1,338
------------- ----------- ------------ -----------
TOTAL: $ 12,117,594 $ 7,290,276 $ 430,658 $ 269,728
============= =========== ============ ===========
Amounts designated as "--" are either $0 or have been rounded to $0.
5. FEDERAL INCOME TAXES
It is each Fund's intention to continue to qualify as a regulated investment
company for federal income tax purposes and distribute all of its taxable income
and net capital gains. Accordingly, no provision for federal income taxes is
required.
The Funds have analyzed their tax positions taken on federal income tax returns
for all open tax years (tax years ended July 31, 2007 through 2009) and have
concluded that no provision for income tax is required in their financial
statements.
The timing and characterization of certain income and capital gains
distributions are determined annually in accordance with federal tax
regulations, which may differ from accounting principles generally accepted in
the United States of America. As a result, the net investment income (loss) and
net realized gain (loss) on investment transactions for a reporting period may
differ significantly from distributions during such period. These book/tax
differences may be temporary or permanent in nature. To the extent these
differences are permanent, they are charged or credited to paid-in capital,
undistributed realized gains or undistributed net investment income or
accumulated net realized gain, as appropriate, in the period that the
differences arise.
Permanent differences primarily attributable to net operating losses,
distribution reclasses, different treatment for gains and
182 HIGHMARK(R) FUNDS
losses on paydowns of mortgage- and asset-backed securities, reclassifications
of long-term capital gain distributions on Real Estate Investment Trust
securities, gains and losses on passive foreign investment companies and the
classification of gains and losses on foreign currency for tax purposes. The
following permanent differences have been reclassified to/from the following
accounts:
UNDISTRIBUTED UNDISTRIBUTED
NET INVESTMENT NET REALIZED PAID-IN
INCOME GAIN CAPITAL
-------------- ------------- -----------
Balanced ............................... $ (76) $ 76 $ --
Cognitive Value ........................ 495 (495) --
Enhanced Growth ........................ 100,397 (45,846) (54,551)
Equity Income .......................... (36,833) 36,833 --
Geneva Mid Cap Growth .................. 1,932,099 -- (1,932,099)
Geneva Small Cap Growth ................ 67,492 (65,467) (2,025)
International Opportunities ............ 1,472,686 (1,472,686) --
Large Cap Growth ....................... -- 88,156,404 (88,156,404)
Large Cap Value ........................ (4,820) 4,820 --
NYSE Arca Tech 100 Index ............... 641,766 (1) (641,765)
Small Cap Advantage. ................... 74,477 -- (74,477)
Value Momentum ......................... (47) 47 --
Bond ................................... 114,949 (114,949) --
California Intermediate Tax-Free Bond .. (1,356) 1,356 --
National Intermediate Tax-Free Bond .... (3,484) 3,884 (400)
Short Term Bond ........................ 150,916 (150,916) --
Wisconsin Tax-Exempt ................... 4,609 (4,609) --
These reclassifications have no effect on net assets or net asset value per
share of the Funds.
The tax character of dividends and distributions paid on a tax basis during the
years or periods ended July 31, 2010 and July 31, 2009 (unless otherwise
indicated) were as follows:
LONG-TERM RETURN
TAX-EXEMPT ORDINARY CAPITAL OF
INCOME INCOME (1) GAIN CAPITAL TOTAL
---------- ---------- ----------- ------- -----------
Balanced
2010 ........................ $ -- $ 308,084 $ -- $ -- $ 308,084
2009 ........................ -- 439,996 -- -- 439,996
Cognitive Value
2010 ........................ -- 615,000 -- -- 615,000
2009 ........................ -- 837,914 -- -- 837,914
Core Equity
2010 ........................ -- 697,080 -- -- 697,080
2009 ........................ -- 1,310,835 -- -- 1,310,835
Enhanced Growth
2010 ........................ -- 109,185 -- -- 109,185
2009 ........................ -- -- -- -- --
Equity Income
2010 ........................ -- 359,452 -- -- 359,452
2009* ....................... -- 371,101 -- 12,826 383,927
10/31/08 .................... -- 765,646 1,216,630 -- 1,982,276
Fundamental Equity
2010 ........................ -- 83,813 -- -- 83,813
2009 (1) .................... -- 49,156 -- -- 49,156
Geneva Mid Cap Growth
2010 ........................ -- -- -- -- --
2009* ....................... -- -- -- -- --
10/31/08 .................... -- -- 13,425,999 -- 13,425,999
LONG-TERM RETURN
TAX-EXEMPT ORDINARY CAPITAL OF
INCOME INCOME GAIN CAPITAL TOTAL
---------- ----------- ----------- ------- -----------
International Opportunities
2010 ........................ $ -- $ 5,341,844 $ -- $ -- $ 5,341,844
2009 ........................ -- 4,221,502 5,426,417 -- 9,647,919
Large Cap Growth
2010 ........................ -- 713,819 -- -- 713,819
2009 ........................ -- 485,371 -- -- 485,371
Large Cap Value
2010 ........................ -- 2,156,204 -- -- 2,156,204
2009 ........................ -- 3,120,165 -- -- 3,120,165
Small Cap Advantage
2010 ........................ -- 97,082 -- -- 97,082
2009 ........................ -- 34,252 -- -- 34,252
Small Cap Value
2010 ........................ -- 849,055 -- -- 849,055
2009 ........................ -- 2,472,276 -- -- 2,472,276
Value Momentum
2010 ........................ -- 3,643,504 -- -- 3,643,504
2009 ........................ -- 6,742,131 16,417,048 -- 23,159,179
Capital Growth Allocation
2010 ........................ -- 236,914 -- -- 236,914
2009 ........................ -- 307,547 3,314,579 -- 3,622,126
Diversified Equity Allocation
2010 ........................ -- 11,705 -- -- 11,705
2009 ........................ -- 6,309 85,979 -- 92,288
Growth & Income Allocation
2010 ........................ -- 444,506 -- -- 444,506
2009 ........................ -- 578,942 2,602,200 -- 3,181,142
Income Plus Allocation
2010 ........................ -- 205,340 -- -- 205,340
2009 ........................ -- 189,876 265,889 -- 455,765
Bond
2010 ........................ -- 14,907,264 -- -- 14,907,264
2009 ........................ -- 15,498,369 -- -- 15,498,369
California Intermediate
Tax-Free Bond
2010 ........................ 5,333,413 21 274,537 -- 5,607,971
2009 ........................ 4,501,546 -- 234,391 -- 4,735,937
National Intermediate
Tax-Free Bond
2010 ........................ 2,903,362 -- -- -- 2,903,362
2009 ........................ 2,570,616 -- 56,500 -- 2,627,116
Short Term Bond
2010 ........................ -- 2,503,369 -- -- 2,503,369
2009 ........................ -- 1,988,865 -- -- 1,988,865
Wisconsin Tax-Exempt
2010 ........................ 5,298,364 21,671 4,609 -- 5,324,644
2009* ....................... 3,925,130 24,020 -- -- 3,949,150
10/31/08 .................... -- 5,894,078 -- -- 5,894,078
* For the nine month period ended July 31, 2009.
(1) For tax purposes, short-term capital gain distributions, if any, are
considered ordinary income distributions.
(2) Commenced operations on August 1, 2008.
Amounts designated as "--" are $0.
HIGHMARK(R) FUNDS 183
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JULY 31, 2010
As of July 31, 2010, the components of distributable earnings (accumulated
losses) on a tax basis were as follows:
UNDISTRIBUTED UNDISTRIBUTED UNDISTRIBUTED CAPITAL
ORDINARY TAX-EXEMPT LONG-TERM LOSS
INCOME INCOME CAPITAL GAIN CARRYFORWARD
------------- -------------- ------------- -------------
Balanced .................................. $ 119,649 $ -- $ -- $ (2,381,965)
Cognitive Value ........................... 316,167 -- -- (22,913,557)
Core Equity ............................... 54,144 -- -- (23,988,501)
Enhanced Growth ........................... -- -- -- (17,129,445)
Equity Income ............................. 49,869 -- -- (9,510,431)
Fundamental Equity ........................ 147,525 -- -- (1,597,093)
Geneva Mid Cap Growth ..................... -- -- -- (2,277,681)
Geneva Small Cap Growth ................... 76,657 -- 179,513 --
International Opportunities ............... 4,898,752 -- -- (72,183,960)
Large Cap Growth .......................... 961,600 -- -- (54,625,361)
Large Cap Value ........................... 1,106,973 -- -- (45,383,938)
NYSE Arca Tech 100 Index .................. -- -- -- (123,776,208)
Small Cap Advantage ....................... -- -- -- (10,348,070)
Small Cap Value ........................... 220,960 -- -- (30,979,746)
Value Momentum ............................ 2,528,015 -- -- (17,079,156)
Capital Growth Allocation ................. 32,115 -- -- (7,190,754)
Diversified Equity Allocation ............. 6,248 -- -- (501,728)
Growth & Income Allocation ................ 62,168 -- -- (5,033,471)
Income Plus Allocation .................... 26,677 -- -- (84,165)
Bond ...................................... 37,470 -- 2,020,426 --
California Intermediate Tax-Free Bond ..... -- 21,373 -- --
National Intermediate Tax-Free Bond ....... -- 25,664 14,070 --
Short Term Bond ........................... 15,737 -- -- (266,193)
Wisconsin Tax-Exempt ...................... -- 58,804 181,311 --
TOTAL
DISTRIBUTABLE
POST- UNREALIZED OTHER EARNINGS
OCTOBER APPRECIATION TEMPORARY (ACCUMULATED
LOSSES (DEPRECIATION) DIFFERENCES LOSSES)
------------ -------------- ------------- -------------
Balanced .................................. $ -- $ 2,673,274 $ -- $ 410,958
Cognitive Value ........................... -- 6,458,336 -- (16,139,054)
Core Equity ............................... -- (2,259,650) -- (26,194,007)
Enhanced Growth ........................... -- 13,873,130 -- (3,256,315)
Equity Income ............................. (436,397) 932,461 -- (8,964,498)
Fundamental Equity ........................ -- 632,940 -- (816,628)
Geneva Mid Cap Growth ..................... -- 53,823,607 -- 51,545,926
Geneva Small Cap Growth ................... -- 862,347 -- 1,118,517
International Opportunities ............... -- 28,161,029 -- (39,124,179)
Large Cap Growth .......................... -- 8,726,944 -- (44,936,817)
Large Cap Value ........................... (4,820) (11,746,672) -- (56,028,457)
NYSE Arca Tech 100 Index .................. -- 30,586,815 -- (93,189,393)
Small Cap Advantage ....................... -- 2,371,735 -- (7,976,335)
Small Cap Value ........................... (3,925,110) (6,886,378) -- (41,570,274)
Value Momentum ............................ (47) 19,797,963 -- 5,246,775
Capital Growth Allocation ................. (1,443,577) (7,175,735) -- (15,777,951)
Diversified Equity Allocation ............. (17,208) (511,363) -- (1,024,051)
Growth & Income Allocation ................ (966,580) (4,775,897) -- (10,713,780)
Income Plus Allocation .................... -- 45,733 -- (11,755)
Bond ...................................... -- 21,134,194 -- 23,192,090
California Intermediate Tax-Free Bond ..... -- 8,667,197 -- 8,688,570
National Intermediate Tax-Free Bond ....... -- 5,390,710 -- 5,430,444
Short Term Bond ........................... (44,001) 1,962,644 -- 1,668,187
Wisconsin Tax-Exempt ...................... -- 4,329,188 -- 4,569,303
AMOUNTS DESIGNATED AS "--" ARE EITHER NOT APPLICABLE OR LESS THAN $1.00.
Post-October losses represent losses realized on investment transactions from
November 1, 2009 through July 31, 2010, that, in accordance with Federal income
tax regulations, a Fund may elect to defer and treat as having arisen in the
following year.
For federal income tax purposes, capital loss carryforwards represent net
realized losses of a Fund that may be carried forward for a maximum period of
eight years and applied against future net capital gains. At July 31, 2010, the
Funds had capital loss carryforwards available to offset future realized capital
gains through the indicated expiration dates:
2011 2012 2013 2014 2015
----------- ---------- -------- ----------- -----------
Balanced ....................... $ -- $ -- $ -- $ -- $ --
Cognitive Value ................ -- -- -- -- --
Core Equity .................... -- -- -- -- --
Enhanced Growth ................ -- 2,550,850 761,621 -- --
Equity Income .................. -- -- -- -- --
Fundamental Equity ............. -- -- -- -- --
Geneva Mid Cap Growth .......... -- -- -- -- --
International Opportunities .... -- -- -- -- --
Large Cap Growth ............... 39,025,017 -- -- -- --
Large Cap Value ................ -- -- -- -- 2,415,678*
NYSE Arca Tech 100 Index ....... -- -- -- 54,139,818 38,357,084
Small Cap Advantage ............ -- -- -- -- --
2016 2017 2018 TOTAL
----------- ------------ ----------- -- -----------
Balanced ....................... $ -- $ 1,403,955 $ 978,010 $ 2,381,965
Cognitive Value ................ -- 11,097,315 11,816,242 22,913,557
Core Equity .................... 568,503 11,186,873 12,233,125 23,988,501
Enhanced Growth ................ -- 2,060,779 11,756,195 17,129,445
Equity Income .................. 5,433,932 3,822,036 254,463 9,510,431
Fundamental Equity ............. -- 541,162 1,055,931 1,597,093
Geneva Mid Cap Growth .......... -- 2,277,681 -- 2,277,681
International Opportunities .... -- 38,473,422 33,710,538 72,183,960
Large Cap Growth ............... 943,708* 10,266,788 4,389,848 54,625,361
Large Cap Value ................ 393,275* 22,090,940 20,484,045 45,383,938
NYSE Arca Tech 100 Index ....... 14,282,341 16,996,965 -- 123,776,208
Small Cap Advantage ............ 767,062 4,383,294 5,197,714 10,348,070
184 HIGHMARK(R) FUNDS
2011 2012 2013 2014 2015 2016 2017 2018 TOTAL
---- ---- ---- -------- --------- ----------- ----------- ------------ ------------
Small Cap Value ................ $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ 30,979,746 $ 30,979,746
Value Momentum ................. -- -- -- 16,755* 747,348* 1,061,013* 6,079,997 9,174,043 17,079,156
Capital Growth Allocation ...... -- -- -- -- -- -- 2,232,328 4,958,426 7,190,754
Diversified Equity Allocation... -- -- -- -- -- -- 353,570 148,158 501,728
Growth & Income Allocation ..... -- -- -- -- -- -- 936,922 4,096,549 5,033,471
Income Plus Allocation ......... -- -- -- -- -- -- 84,165 -- 84,165
Short Term Bond ................ -- -- -- -- 9,428 -- -- 256,765 266,193
AMOUNTS DESIGNATED AS "--" ARE EITHER NOT APPLICABLE OR LESS THAN $1.00.
* Capital loss carryforward amount was inherited from Merging Fund (see Note
9) and may be subject to IRS limitations in a given year.
During the year ended July 31, 2010, capital loss carryforwards that were
utilized and/or expired to offset gains are as follows:
Geneva Mid Cap Growth ................ $ 10,961,868
Geneva Small Cap Growth .............. 2,286
Large Cap Growth ..................... 88,156,404
NYSE Arca Tech 100 Index ............. 5,828,135
Income Plus Allocation ............... 27,898
Bond ................................. 2,285,521
Wisconsin Tax-Exempt ................. 210,792
At July 31, 2010, the total cost of securities for federal income tax purposes
and the aggregate gross unrealized appreciation and depreciation for securities
held by the Funds are as follows:
NET
FEDERAL APPRECIATION
TAX COST APPRECIATION DEPRECIATION (DEPRECIATION)
--------------- ------------ ------------- --------------
Balanced ................................... $ 21,159,572 $ 3,552,632 $ (879,358) $ 2,673,274
Cognitive Value ............................ 67,704,792 8,794,534 (2,336,198) 6,458,336
Core Equity ................................ 61,261,395 2,949,978 (5,209,628) (2,259,650)
Enhanced Growth ............................ 54,469,695 18,772,154 (4,899,024) 13,873,130
Equity Income .............................. 13,043,715 1,640,895 (708,434) 932,461
Fundamental Equity ......................... 14,694,056 1,514,558 (881,618) 632,940
Geneva Mid Cap Growth ...................... 168,867,086 59,146,750 (5,323,143) 53,823,607
Geneva Small Cap Growth .................... 8,944,759 1,065,025 (202,678) 862,347
International Opportunities ................ 207,083,944 36,504,260 (8,355,199) 28,149,061
Large Cap Growth ........................... 75,541,025 11,599,055 (2,872,111) 8,726,944
Large Cap Value ............................ 133,927,383 2,139,949 (13,886,621) (11,746,672)
NYSE Arca Tech 100 Index ................... 152,662,444 58,254,861 (27,668,046) 30,586,815
Small Cap Advantage ........................ 21,422,649 3,570,254 (1,198,519) 2,371,735
Small Cap Value ............................ 107,041,754 8,910,519 (15,796,897) (6,886,378)
Value Momentum ............................. 283,871,336 47,180,528 (27,382,669) 19,797,859
Capital Growth Allocation .................. 47,035,419 1,772,849 (8,948,584) (7,175,735)
Diversified Equity Allocation .............. 8,033,355 825,087 (1,336,450) (511,363)
Growth & Income Allocation ................. 48,054,481 2,819,058 (7,594,955) (4,775,897)
Income Plus Allocation ..................... 15,545,644 1,191,714 (1,145,981) 45,733
Bond ....................................... 339,538,118 26,128,226 (4,994,032) 21,134,194
California Intermediate Tax-Free Bond ...... 196,817,863 8,766,365 (99,168) 8,667,197
National Intermediate Tax-Free Bond ........ 99,059,303 5,390,922 (212) 5,390,710
Short Term Bond ............................ 107,414,063 2,432,376 (469,732) 1,962,644
Wisconsin Tax-Exempt ....................... 153,311,476 4,918,260 (589,072) 4,329,188
The difference between book-basis and tax-basis net unrealized losses is
attributable primarily to the tax deferral of losses on wash sales, the deferral
of post-October capital losses for tax purposes, the difference between book and
tax amortization methods for premiums and discounts on fixed-income securities,
book/tax differences in the accrual of income on securities in default and the
timing of income recognition on partnership interests.
HIGHMARK(R) FUNDS 185
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JULY 31, 2010
6. SECURITIES LENDING
The Custodian serves as the Funds' securities lending agent. Certain Funds lend
their securities to approved brokers to earn additional income and receive cash
and/or securities as collateral to secure the loans. The Custodian rebates to
the brokers certain negotiated amounts if cash is received as collateral for
securities on loan. Additionally, the Custodian receives fees for administering
the securities lending program for the Funds. For the year ended July 31, 2010,
these fees totaled $231,406. Such fees and rebates reduce the overall income the
Funds earned on securities purchased with cash collateral, which is reflected
net as a reduction to interest income in the statements of operations. The Funds
maintain collateral at not less than 100% of the value of loaned securities. If
cash collateral is received, a related liability is shown on the statements of
assets and liabilities. Although the risk of securities lending is mitigated by
the collateral, a Fund could experience a delay in recovering its securities and
a possible loss of income or value if the borrower fails to return them. The
market value of the securities on loan and collateral at July 31, 2010, and the
income generated from the program during the period ended July 31, 2010, with
respect to such loans are as follows:
MARKET VALUE MARKET INCOME RECEIVED
OF SECURITIES VALUE OF FROM SECURITIES
LOANED COLLATERAL LENDING
------------- ------------ ---------------
International Opportunities ... $ 14,013,668 $ 14,559,169 $ 197,532
Small Cap Value ............... 28,643,081 29,736,848 33,524
7. CONCENTRATION OF CREDIT RISK
The California Intermediate Tax-Free Bond Fund invests in debt securities issued
by the State of California and its political subdivisions. The Wisconsin
Tax-Exempt Fund invests in debt securities issued by the State of Wisconsin and
its political subdivisions. The ability of the issuers of the securities held by
these Funds to meet their obligations may be affected by economic and political
developments in their respective states.
Each Fund may invest in securities of foreign issuers in various countries.
These investments may involve certain considerations and risks not typically
associated with investments in the United States, as a result of, among other
factors, the possibility of future political and economic developments and the
level of governmental supervision and regulation of securities markets in the
respective countries.
8. OTHER
At July 31, 2010, the percentage of total shares outstanding held by
shareholders of record (comprised of omnibus accounts held on behalf of
individual shareholders) owning 10% or greater of the aggregate total shares
outstanding for each Fund is as follows:
NO. OF %
SHAREHOLDERS OWNERSHIP
------------ ---------
Balanced ........................................... 2 36%
Cognitive Value .................................... 1 17%
Core Equity ........................................ 3 73%
Enhanced Growth .................................... 1 18%
Equity Income ...................................... -- --
Fundamental Equity ................................. 4 86%
Geneva Mid Cap Growth .............................. 2 27%
Geneva Small Cap Growth ............................ 4 84%
International Opportunities ........................ 2 23%
Large Cap Growth ................................... 2 39%
Large Cap Value .................................... 3 38%
NYSE Arch Tech 100 Index ........................... 1 21%
Small Cap Advantage ................................ 3 80%
Small Cap Value .................................... 2 34%
Value Momentum ..................................... 2 43%
Capital Growth Allocation .......................... -- --
Diversified Equity Allocation ...................... -- --
Growth & Income Allocation ......................... -- --
Income Plus Allocation ............................. -- --
Bond ............................................... 3 63%
California Intermediate Tax-Free Bond .............. 1 30%
National Intermediate Tax-Free Bond ................ 2 56%
Short Term Bond .................................... 2 33%
Wisconsin Tax-Exempt ............................... -- --
186 HIGHMARK(R) FUNDS
9. FUND REORGANIZATIONS
The Board of Directors of North Track Funds, Inc. and the stockholders of North
Track Dow Jones U.S. Financial 100 Plus Fund, North Track Dow Jones U.S. Health
Care 100 Plus Fund, North Track Large Cap Equity Fund and the North Track S&P
100 Index Fund (the "Merging Funds") approved plans of reorganization pursuant
to which the assets and identified liabilities of each of the Merging Funds were
transferred to the corresponding, similarly managed series of HighMark Funds
(shown below) in exchange for newly issued Class A, B and C shares of the
corresponding HighMark Fund as noted below. The consummation of the
reorganizations took place on June 8, 2009.
CLASS A CLASS A CLASS B CLASS B CLASS C CLASS C
SHARES NET ASSET SHARES NET ASSET SHARES NET ASSET
MERGING FUNDS HIGHMARK FUNDS ISSUED VALUE ISSUED VALUE ISSUED VALUE
- ---------------------------------- --------------------- --------- --------- ------- --------- ------- ----------
North Track Dow Jones
U.S. Financial 100 Plus Fund* Large Cap Value Fund 591,957 $ 9.01 181,615 $ 8.85 180,087 $ 8.82
- ------------------------------------------------------------------------------------------------------------------------
North Track Dow Jones
U.S. Health Care 100 Plus Fund* Large Cap Growth Fund 1,330,400 7.39 544,752 6.90 457,217 6.89
- ------------------------------------------------------------------------------------------------------------------------
North Track Large Cap Equity Fund Value Momentum Fund 466,026 11.53 N/A N/A 66,628 11.25
- ------------------------------------------------------------------------------------------------------------------------
North Track S&P 100 Index Fund* Value Momentum Fund 4,665,352 11.53 362,746 11.29 139,547 11.25
* These Funds had Class R shares outstanding immediately prior to the
reorganization, which were exchanged for Class A shares of the
corresponding HighMark Funds.
The conversion ratios for each Share class issued in the reorganization were as
follows:
MERGING FUNDS HIGHMARK FUNDS CLASS A CLASS B CLASS C CLASS R*
- ---------------------------------- --------------------- ------- --------- ------- ----------
North Track Dow Jones
U.S. Financial 100 Plus Fund Large Cap Value Fund 0.5041 0.5160 0.5132 0.5134
- ------------------------------------------------------------------------------------------------------------------------
North Track Dow Jones
U.S. Health Care 100 Plus Fund Large Cap Growth Fund 1.1684 1.1855 1.1872 1.1536
- ------------------------------------------------------------------------------------------------------------------------
North Track Large Cap Equity Fund Value Momentum Fund 0.5813 N/A 0.5968 N/A
- ------------------------------------------------------------------------------------------------------------------------
North Track S&P 100 Index Fund Value Momentum Fund 2.0400 2.0662 2.0766 2.0262
* Class R shares were exchanged for Class A shares of the corresponding
HighMark Funds.
The following information relates to the Merging and the corresponding HighMark
Funds immediately prior to and immediately after the consummation of the
reorganization:
SHARES UNREALIZED
REORGANIZING FUND/HIGHMARK FUND NET ASSETS OUTSTANDING APP/(DEP)
- ---------------------------------------------------- ------------ ----------- -----------
North Track Dow Jones U.S. Financial 100 Plus Fund (before reorganization) $ 8,530,910 1,876,550 $(3,344,572)
HighMark Large Cap Value Fund (before reorganization) 168,743,013 18,770,117 N/A
HighMark Large Cap Value Fund (after reorganization) 177,273,923 19,723,776 N/A
- ------------------------------------------------------------------------------------------------------------------------
North Track Dow Jones U.S. Health Care 100 Plus Fund (before reorganization) 16,747,703 1,983,448 2,446,629
HighMark Large Cap Growth Fund (before reorganization) 76,090,193 10,163,698 N/A
HighMark Large Cap Growth Fund (after reorganization) 92,837,896 12,496,067 N/A
- ------------------------------------------------------------------------------------------------------------------------
North Track Large Cap Equity Fund (before reorganization) 6,124,511 913,306 (1,154,725)
North Track S&P 100 Index Fund (before reorganization) 59,476,208 2,529,764 13,529,018
HighMark Value Momentum Fund (before reorganization) 239,015,858 20,678,587 N/A
HighMark Value Momentum Fund (after reorganization) 304,616,577 26,378,886 N/A
- ------------------------------------------------------------------------------------------------------------------------
HighMark Capital Management reimbursed the funds for trading costs associated
with the restructuring of portfolios in connection with the reorganizations.
HIGHMARK(R) FUNDS 187
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
JULY 31, 2010
The Board of Directors of North Track Funds, Inc. and the stockholders of North
Track Equity Income Fund, North Track Geneva Growth Fund, North Track NYSE Arca
Tech 100 Index Fund and North Track Wisconsin Tax-Exempt Fund (the "Reorganizing
Funds") approved plans of reorganization pursuant to which the assets and
identified liabilities of each of the Reorganizing Funds were transferred to the
corresponding HighMark Fund as noted below. The HighMark Funds listed below were
created in anticipation of the reorganizations. The consummation of the
reorganizations took place on June 8, 2009. The information in the financial
statements and financial highlights of the Reorganizing Funds for periods prior
to June 8, 2009 are included in this report as part of the financial statements
and financial highlights of the corresponding HighMark Funds below (refer to
statements for specific periods covered). The fiscal year end of the
"Reorganizing Funds" was October 31. The fiscal year end of the successor
HighMark Funds is July 31.
SHARES
REORGANIZING FUNDS HIGHMARK FUNDS NET ASSETS OUTSTANDING
- ----------------------------- ----------------------------- ------------ -----------
North Track Equity Income Fund* Equity Income Fund $ 16,679,360 2,527,451
- ------------------------------------------------------------------------------------------------------
North Track Geneva Growth Fund* Geneva Mid Cap Growth Fund 172,638,318 12,096,812
- ------------------------------------------------------------------------------------------------------
North Track NYSE Arca Tech 100 Index Fund* NYSE Arca Tech 100 Index Fund 181,294,731 8,806,173
- ------------------------------------------------------------------------------------------------------
North Track Wisconsin Tax-Exempt Fund Wisconsin Tax-Exempt Fund 152,122,931 15,111,697
* These Funds had Class R shares outstanding immediately prior to the
reorganization, which were exchanged for Class A Shares of the
corresponding HighMark Fund.
10. NEW ACCOUNTING PRONOUNCEMENT
In January 2010, the Financial Accounting Standards Board ("FASB") issued
Accounting Standards Update ("ASU") No. 2010-06 "Improving Disclosures about
Fair Value Measurements." ASU No. 2010-06 amends FASB Accounting Standards
Codification Topic 820, Fair Value Measurements and Disclosures, to require
additional disclosures regarding fair value measurements. Certain disclosures
required by ASU No. 2010-06 are currently effective for interim and annual
reporting periods beginning after December 15, 2009, and other required
disclosures are effective for fiscal years beginning after December 15, 2010 and
for interim periods within those fiscal years. Management has evaluated the
impact and has incorporated the appropriate disclosures required by ASU No.
2010-06 in the Funds' financial statement disclosures.
11. SUBSEQUENT EVENTS
Management has evaluated the impact of all subsequent events on the Funds
through the date the financial statements were issued, and has determined that
there were no subsequent events that would require disclosure in or adjustments
to the financial statements.
188 HIGHMARK(R) FUNDS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF THE HIGHMARK FUNDS:
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of the Balanced Fund, Cognitive Value Fund, Core
Equity Fund, Enhanced Growth Fund, Equity Income Fund, Fundamental Equity Fund,
Geneva Mid Cap Growth Fund (formerly, Geneva Growth Fund), Geneva Small Cap
Growth Fund, International Opportunities Fund, Large Cap Growth Fund, Large Cap
Value Fund, NYSE Arca Tech 100 Index Fund, Small Cap Advantage Fund, Small Cap
Value Fund, Value Momentum Fund, Capital Growth Allocation Fund, Diversified
Equity Allocation Fund, Growth & Income Allocation Fund, Income Plus Allocation
Fund, Bond Fund, California Intermediate Tax-Free Bond Fund, National
Intermediate Tax-Free Bond Fund, Short Term Bond Fund, and Wisconsin Tax-Exempt
Fund (collectively, the "Funds"), twenty-four of the twenty-nine Portfolios
constituting the HighMark Funds (the "Trust") as of July 31, 2010, and the
related statements of operations, the statements of changes in net assets and
the financial highlights for each of the periods presented. 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 the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. The Trust
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Trust's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of July 31, 2010, by correspondence with the custodian
and brokers; where replies were not received from brokers, we performed other
auditing procedures. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Balanced Fund, Cognitive Value Fund, Core Equity Fund, Enhanced Growth Fund,
Equity Income Fund, Fundamental Equity Fund, Geneva Mid Cap Growth Fund, Geneva
Small Cap Growth Fund, International Opportunities Fund, Large Cap Growth Fund,
Large Cap Value Fund, NYSE Arca Tech 100 Index Fund, Small Cap Advantage Fund,
Small Cap Value Fund, Value Momentum Fund, Capital Growth Allocation Fund,
Diversified Equity Allocation Fund, Growth & Income Allocation Fund, Income Plus
Allocation Fund, Bond Fund, California Intermediate Tax-Free Bond Fund, National
Intermediate Tax-Free Bond Fund, Short Term Bond Fund, and Wisconsin Tax-Exempt
Fund as of July 31, 2010, the results of their operations, the changes in their
net assets, and the financial highlights for each of the periods presented, in
conformity with accounting principles generally accepted in the United States of
America.
DELOITTE & TOUCHE LLP
Philadelphia, Pennsylvania
September 27, 2010
HIGHMARK(R) FUNDS 189
NOTICE TO SHAREHOLDERS (UNAUDITED)
For shareholders that do not have a July 31, 2010 tax year end, this notice is
for informational purposes only. For shareholders with a July 31, 2010 tax year
end, please consult your tax adviser as to the pertinence of this notice.
For the fiscal year ended July 31, 2010, each Fund is designating the following
items with regard to distributions paid during the year.
QUALIFIED
DIVIDENDS
AND QUALIFYING
CORPORATE DIVIDEND
15% RATE ORDINARY DIVIDENDS INCOME QUALIFIED
LONG-TERM INCOME TAX EXEMPT RECEIVED (15% TAX U.S. QUALIFIED SHORT-TERM
CAPITAL GAIN DISTRIBUTIONS INCOME DEDUCTION RATE FOR GOVERNMENT INTEREST CAPITAL
FUND DISTRIBUTION (TAX BASIS) DISTRIBUTIONS TOTAL (1) QDI) (2) INTEREST (3) INCOME GAIN
- ------------------------------------------------------------------------------------------------------------------------------------
Balanced ................... 0.00% 100.00% 0.00% 100.00% 79.40% 84.17% 0.85% 48.34% 0.00%
Cognitive Value ............ 0.00% 100.00% 0.00% 100.00% 100.00% 100.00% 0.00% 0.20% 0.00%
Core Equity ................ 0.00% 100.00% 0.00% 100.00% 100.00% 100.00% 0.00% 0.12% 0.00%
Enhanced Growth ............ 0.00% 100.00% 0.00% 100.00% 99.18% 100.00% 0.00% 0.00% 0.00%
Equity Income .............. 0.00% 100.00% 0.00% 100.00% 100.00% 100.00% 0.00% 0.03% 0.00%
Fundamental Equity ......... 0.00% 100.00% 0.00% 100.00% 100.00% 100.00% 0.00% 1.29% 0.00%
Geneva Mid Cap Growth ...... 0.00% 0.00% 0.00% 0.00% 0.00% 100.00% 0.00% 0.00% 0.00%
Geneva Small Cap
Growth (4) ............... 0.00% 0.00% 0.00% 0.00% 0.00% 100.00% 0.00% 0.00% 0.00%
International
Opportunities (5) ........ 0.00% 100.00% 0.00% 100.00% 0.36% 100.00% 0.00% 0.24% 0.00%
Large Cap Growth ........... 0.00% 100.00% 0.00% 100.00% 100.00% 100.00% 0.00% 2.32% 0.00%
Large Cap Value ............ 0.00% 100.00% 0.00% 100.00% 100.00% 100.00% 0.00% 0.07% 0.00%
NYSE Arca Tech 100 Index ... 0.00% 0.00% 0.00% 0.00% 0.00% 100.00% 0.00% 0.00% 0.00%
Small Cap Advantage ........ 0.00% 100.00% 0.00% 100.00% 99.81% 100.00% 0.00% 1.13% 0.00%
Small Cap Value ............ 0.00% 100.00% 0.00% 100.00% 91.46% 100.00% 0.00% 0.11% 0.00%
Value Momentum ............. 0.00% 100.00% 0.00% 100.00% 100.00% 100.00% 0.00% 0.00% 0.00%
Capital Growth Allocation .. 0.00% 100.00% 0.00% 100.00% 100.00% 100.00% 0.00% 0.00% 0.00%
Diversified Equity
Allocation ............... 0.00% 100.00% 0.00% 100.00% 100.00% 100.00% 0.00% 0.00% 0.00%
Growth & Income
Allocation ............... 0.00% 100.00% 0.00% 100.00% 52.06% 100.00% 0.00% 0.50% 0.00%
Income Plus Allocation ..... 0.00% 100.00% 0.00% 100.00% 19.73% 45.68% 0.00% 0.01% 0.00%
Bond (4) ................... 0.00% 100.00% 0.00% 100.00% 0.00% 0.00% 1.20% 99.82% 0.00%
California Intermediate
Tax-Free Bond (4) (6) ... 4.90% 0.00% 95.10% 100.00% 0.00% 0.00% 0.00% 0.00% 0.00%
National Intermediate
Tax-Free Bond (4) ....... 0.00% 0.00% 100.00% 100.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Short Term Bond. ........... 0.00% 100.00% 0.00% 100.00% 0.00% 0.00% 1.89% 98.55% 0.00%
Wisconsin Tax-Exempt (4) ... 0.09% 0.41% 99.50% 100.00% 0.00% 0.00% 0.00% 0.00% 0.00%
- --------------------
(1) QUALIFYING DIVIDENDS REPRESENT DIVIDENDS WHICH QUALIFY FOR THE CORPORATE
DIVIDENDS RECEIVED DEDUCTION AND IS REFLECTED AS A PERCENTAGE OF "ORDINARY
INCOME DISTRIBUTIONS."
(2) THE PERCENTAGE IN THIS COLUMN REPRESENTS THE AMOUNT OF "QUALIFYING
DIVIDEND INCOME" AS CREATED BY THE JOBS AND GROWTH TAX RELIEF
RECONCILIATION ACT OF 2003 AND IS REFLECTED AS A PERCENTAGE OF "INVESTMENT
COMPANY TAXABLE INCOME." IT IS THE INTENTION OF EACH OF THE AFOREMENTIONED
FUNDS TO DESIGNATE THE MAXIMUM AMOUNT PERMITTED BY THE LAW.
(3) "U.S. GOVERNMENT INTEREST" REPRESENTS THE AMOUNT OF INTEREST THAT WAS
DERIVED FROM DIRECT U.S. GOVERNMENT OBLIGATIONS AND DISTRIBUTED DURING THE
FISCAL YEAR. THIS AMOUNT IS REFLECTED AS A PERCENTAGE OF TOTAL ORDINARY
INCOME DISTRIBUTIONS (THE TOTAL OF SHORT-TERM CAPITAL GAIN AND NET
INVESTMENT INCOME DISTRIBUTIONS). GENERALLY, INTEREST FROM DIRECT U.S.
GOVERNMENT OBLIGATIONS IS EXEMPT FROM STATE INCOME TAX. HOWEVER, FOR
SHAREHOLDERS OF EACH FUND WHO ARE RESIDENTS OF CALIFORNIA, CONNECTICUT AND
NEW YORK, THE STATUTORY THRESHOLD REQUIREMENTS WERE NOT SATISFIED TO
PERMIT EXEMPTION OF THESE AMOUNTS FROM STATE INCOME.
(4) FOR THE FISCAL YEAR ENDED 2010, THE GENEVA SMALL CAP GROWTH FUND, THE BOND
FUND, THE CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND, THE NATIONAL
INTERMEDIATE TAX-FREE BOND FUND AND THE WISCONSIN TAX-EXEMPT FUND HAD
LONG-TERM CAPITAL GAIN DISTRIBUTION DESIGNATIONS OF $179,513, $2,020,426,
$274,537, $14,070 AND $185,920, RESPECTIVELY.
(5) THE FUND INTENDS TO PASS THROUGH A FOREIGN TAX CREDIT TO THE SHAREHOLDERS.
FOR THE FISCAL YEAR ENDED 2010, THE TOTAL AMOUNT OF FOREIGN SOURCE INCOME
IS $6,617,953. THE TOTAL AMOUNT OF FOREIGN TAX TO BE PAID IS $422,875.
YOUR ALLOCABLE SHARE OF THE FOREIGN TAX CREDIT WILL BE REPORTED ON FORM
1099 DIV.
(6) FOR RESIDENTS OF CALIFORNIA: THE CALIFORNIA INTERMEDIATE TAX-FREE BOND
FUND MET THE QUARTERLY DIVERSIFICATION TEST FOR THE FISCAL YEAR ENDED JULY
31, 2010.
190 HIGHMARK(R) FUNDS
TRUSTEES AND OFFICERS (UNAUDITED)
Information pertaining to the Trustees and officers of the Trust is set forth
below. The Statement of Additional Information ("SAI") includes additional
information about Fund directors. The SAI is available, without charge, upon
request, by calling 1-800-433-6884. The following trustees and officers list is
current as of September 21, 2010.
- -----------------------------------------------------------------------------------------------------------------------------------
TERM OF NUMBER OF PORTFOLIOS OTHER
OFFICE IN HIGHMARK DIRECTORSHIPS
AND PRINCIPAL FUNDS HELD BY
POSITION(S) LENGTH OF OCCUPATION(S) COMPLEX TRUSTEE
NAME, HELD WITH TIME DURING PAST OVERSEEN DURING
ADDRESS(1) AND AGE THE TRUST SERVED(2) 5 YEARS BY TRUSTEE(3) PAST 5 YEARS(4)
- -----------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
David E. Benkert Trustee, Since From April 1, 1992 to present, 29 None
53 Chairman 3/04 Director, Navigant Consulting,
Inc. (financial consulting).
Thomas L. Braje Trustee Since Prior to retirement in October 29 None
67 6/87 1996, Vice President and Chief
Financial Officer of Bio-Rad
Laboratories, Inc.
Evelyn S. Dilsaver Trustee, Audit Since Since January 2010, Member, 29 Longs Drug
55 Committee 1/08 Board of Directors of Corporation
Chairman Tempur-Pedic International (LDG)(5);
Inc. (mattress manufacturer). Aeropostale,
Since November 2009, Member, Inc. (ARO);
Board of Directors of Blue Tamalpais
Shield of California (health Bancorp (TAMB);
insurance). Formerly Executive Tempur-Pedic
Vice President for The Charles International
Schwab Corporation, and Inc. (TPX)
President and Chief Executive
Officer of Charles Schwab
Investment Management, Inc.
Prior to July 2004, Senior Vice
President, Charles Schwab
Investment Management, Inc.
Asset Management Products and
Services. Prior to July 2003,
Executive Vice President -
Chief Financial Officer and
Chief Administrative Officer
for U.S. Trust Company, then a
subsidiary of The Charles
Schwab Corporation.
David A. Goldfarb Trustee Since Since January 2010, owner of 29 None
68 6/87 David A. Goldfarb, CPA. From
1987 to 2009, Partner,
Goldfarb & Simons, Certified
Public Accountants.
Michael L. Noel Trustee, Vice Since President, Noel Consulting 29 Avista Corp.
69 Chairman, 12/98 Company since 1998. Member, (AVA)
Governance Saber Partners (financial
Committee advisory firm) since 2002.
Chairman Member, Board of Directors,
Avista Corp. (utility
company), since January 2004.
Member, Board of Directors,
SCAN Health Plan, since 1997.
From April 1997 to December
1998, Member of HighMark Funds
Advisory Board.
Robert M. Whitler(6) Trustee Since Retired from Union Bank, N.A. 29 None
72 12/98 (formerly Union Bank of
California, N.A.) in 1996.
Served as Executive Vice
President, Chief Trust Officer
and Head of the Trust
Investments Group.
HIGHMARK(R) FUNDS 191
TRUSTEES AND OFFICERS (UNAUDITED) (CONCLUDED)
- -----------------------------------------------------------------------------------------------------------------------------------
TERM OF NUMBER OF PORTFOLIOS OTHER
OFFICE IN HIGHMARK DIRECTORSHIPS
AND PRINCIPAL FUNDS HELD BY
POSITION(S) LENGTH OF OCCUPATION(S) COMPLEX TRUSTEE
NAME, HELD WITH TIME DURING PAST OVERSEEN DURING
ADDRESS(1) AND AGE THE TRUST SERVED(2) 5 YEARS BY TRUSTEE(3) PAST 5 YEARS(4)
- -----------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEES AND OFFICERS
Earle A. Malm II(7) Trustee, Since 12/05 President, Chief Executive 29 N/A
350 California Street President (President) Officer and Director of the
San Francisco, CA Since 1/08 Adviser since October 2002.
94104 (Trustee) Chairman of the Board of the
61 Adviser since February 2005.
Colleen Cummings Assistant Since Vice President and Senior N/A N/A
4400 Computer Drive Treasurer 6/10 Director, Client Services
Westborough, MA Administration, BNY Mellon
01581 Investment Servicing (US)
39 Inc. (formerly known as PNC
Global Investment Servicing
(U.S.) Inc.) since 2004.
Pamela O'Donnell Vice President, Since 12/05 Vice President and Director N/A N/A
350 California Street Treasurer and (Treasurer) of Mutual Fund Administration
San Francisco, CA Chief Financial Since 3/09 of the Adviser since 2005.
94104 Officer (Vice Vice President of Operations
46 President) and Client Service of the
Since 6/10 Adviser from 2003 to 2005.
(Chief
Financial
Officer)
Catherine M. Vacca Chief Since 9/04 Senior Vice President and N/A N/A
350 California Street Compliance Chief Compliance Officer of
San Francisco, CA Officer the Adviser since July 2004.
94104
53
Helen Robichaud Secretary Since 3/10 Vice President and Counsel, N/A N/A
99 High Street, BNY Mellon Investment
27th Floor Servicing (US) Inc. (formerly
Boston, MA 02110 known as PNC Global
58 Investment Servicing (U.S.)
Inc.) since January 2010.
Director of Fund Regulatory
Services of J.P. Morgan from
June 2008 to December 2009.
Associate General Counsel of
J.P. Morgan from August 1995
to June 2008.
Carol Gould Vice President Since 9/08 Assistant Vice President and N/A N/A
99 High Street, and Assistant Manager of BNY Mellon
27th Floor Secretary Investment Servicing (US)
Boston, MA 02110 Inc. (formerly known as PNC
49 Global Investment Servicing
(U.S.) Inc.) since November
2004.
- --------------------
(1) Each Trustee may be contacted by writing to the Trustee c/o HighMark
Funds, 350 California Street, Suite 1600, San Francisco, CA 94104.
(2) Each Trustee shall hold office during the lifetime of HighMark Funds until
he or she dies, resigns, retires or is removed or, if sooner, until the
next meeting of shareholders following his election or appointment as
Trustee at which Trustees are elected and until his successor shall have
been elected and qualified in accordance with the Trust's Declaration of
Trust.
(3) The "HighMark Funds Complex" consists of all registered investment
companies for which the Adviser serves as investment adviser. As of July
31, 2010, the HighMark Funds Complex consisted of 29 Funds.
(4) Directorships of companies required to report to the SEC under the
Securities Exchange Act of 1934 (i.e., "public companies") or other
investment companies registered under the 1940 Act.
(5) Ms. Dilsaver ceased being a director of Longs Drug Corporation in
connection with the acquisition of the company by CVS Caremark in 2008.
(6) Mr. Whitler is expected to retire on December 31, 2010.
(7) Earle Malm is an Interested Trustee by virtue of his position with the
Adviser.
192 HIGHMARK(R) FUNDS
BOARD APPROVAL OF THE EXISTING ADVISORY AND SUB-ADVISORY AGREEMENTS (UNAUDITED)
The Board of Trustees, including all of the trustees who are not "interested
persons" (as defined in the 1940 Act) of HighMark, the Adviser or the
sub-advisers of the Funds ("Independent Trustees"), considers matters bearing on
the advisory agreement between HighMark and the Adviser (the "Investment
Advisory Agreement") and the sub-advisory agreements that relate to the Funds at
most of its meetings throughout the year.
Once a year, usually in the summer, the Board of Trustees meets to extensively
review the Investment Advisory Agreement and the sub-advisory agreements (except
any agreement that is still within the first year of its initial term) to
determine whether to approve the continuation of the agreements with respect to
the Funds and the other series of HighMark for an additional one-year period. In
connection with these annual determinations, the Trustees receive materials that
the Adviser and the Funds' sub-advisers believe to be reasonably necessary for
the Trustees to evaluate the agreements. With respect to the Funds, these
materials generally include, among other items,
o information on the investment performance of the Funds and the
performance of peer groups of mutual funds and the Funds'
performance benchmarks,
o information on the Funds' advisory and sub-advisory fees and other
expenses, including information comparing the Funds' expenses to
those of peer groups of mutual funds and information about any
applicable expense caps and fee "breakpoints" (fee rates that
decline as a percentage of Fund assets as Fund assets reach higher
levels),
o sales and redemption data for the Funds,
o information about the profitability of the Adviser and the
sub-advisers with respect to their provision of services to the
Funds and
o other information obtained through the completion of an
informational questionnaire sent to the Adviser and the sub-
advisers by the Trustees.
The Board of Trustees may also consider other matters such as:
o the Adviser's and the sub-advisers' financial results and financial
condition,
o the size, education and experience of the Adviser's and each
sub-adviser's investment staff and their use of technology, external
research and trading cost measurement tools,
o the procedures employed to determine the value of the Funds' assets,
o the allocation of the Funds' brokerage including allocations, if
any, to brokers affiliated with the Adviser or any sub- adviser and
the use of "soft" commission dollars to pay for research services
for the Adviser and the sub-advisers,
o the Adviser's and the sub-advisers' resources devoted to, and record
of compliance with, the Funds' investment policies and restrictions,
policies on personal securities transactions and other compliance
policies and
o the outlook for the economy generally and for the mutual fund
industry in particular.
Throughout the process, the Trustees are afforded the opportunity to ask
questions of and request additional materials from the Adviser and the
sub-advisers. The Trustees also meet with, and ask questions of, representatives
of the Adviser and the sub-advisers, either in person or by conference
telephone. As a consequence of this process, HighMark has in the past removed
sub-advisers that have underperformed and has effected other changes in Fund
portfolio management.
The Board of Trustees most recently approved the continuation of the Investment
Advisory Agreement with respect to all of the Funds and the sub-advisory
agreements that relate to each of the Funds that has a sub-adviser other than
HighMark Equity Income Fund, HighMark NYSE Arca Tech 100 Index Fund and HighMark
Wisconsin Tax-Exempt Fund (the Investment Advisory Agreement, collectively with
the sub-advisory agreements relating to each of the Funds other than HighMark
Equity Income Fund, HighMark NYSE Arca Tech 100 Index Fund and HighMark
Wisconsin Tax-Exempt Fund, the "Agreements") at meetings held on June 23-24,
2010.
In considering whether to approve the continuation of the Agreements with
respect to the Funds at the meetings held on June 23-24, 2010, the Board of
Trustees did not identify any single factor as determinative. Matters considered
by the Trustees in connection with their approval of the Agreements as they
relate to the Funds included the following:
THE NATURE, EXTENT AND QUALITY OF THE SERVICES PROVIDED TO THE FUNDS UNDER THE
AGREEMENTS. The Trustees considered the nature, extent and quality of the
services provided by the Adviser, Bailard, Inc., Geneva Capital Management, Ltd.
and LSV Asset Management (collectively, the "Managers") and their affiliates to
the Funds and the resources dedicated to the Funds by the Managers and their
affiliates. The Trustees considered not only the advisory services provided by
the Managers to the Funds, but also the monitoring and oversight services
provided by the Adviser with respect to the sub-advised Funds. For each Fund,
the
HIGHMARK(R) FUNDS 193
BOARD APPROVAL OF THE EXISTING ADVISORY AND SUB-ADVISORY AGREEMENTS (UNAUDITED)
(CONTINUED)
Trustees also considered the benefits to shareholders of investing in a mutual
fund that is part of a family of funds offering a variety of investment
disciplines and providing for a variety of fund and shareholder services. After
reviewing these and related factors and discussions with Fund management, the
Trustees concluded, within the context of their overall conclusions regarding
each of the Agreements, that the nature, extent and quality of services provided
supported the renewal of the Agreements with respect to the Funds.
INVESTMENT PERFORMANCE OF THE FUNDS AND THE MANAGERS. As noted above, the
Trustees received information about the performance of the Funds over various
time periods, including information comparing the performance of the Funds to
the performance of peer groups of funds and the Funds' respective performance
benchmarks. In addition, the Trustees held various discussions with the Managers
about Fund performance, including discussions with the Adviser at each regular
board meeting throughout the year. With respect to each Fund, the Board of
Trustees concluded that the Fund's performance supported the renewal of the
Agreement(s) relating to that Fund. In the case of each Fund that had
performance that lagged that of a relevant peer group for certain (although not
necessarily all) periods considered, the Board of Trustees concluded that other
factors relevant to performance supported renewal of the Agreements with respect
to such Fund. These factors varied from Fund to Fund, but included one or more
of the following: (1) that the Fund's performance, although lagging in certain
recent periods, was strong over the longer term; (2) that the underperformance
was attributable, to a significant extent, to investment decisions by the Fund's
Manager(s) that were reasonable and consistent with the Fund's investment
objective and policies; (3) that the Fund's performance was competitive when
compared to other relevant performance benchmarks or peer groups; and (4) that
the Fund's Manager(s) have taken or are taking or formulating steps designed to
help improve the Fund's investment performance. The Trustees also noted that
some of the Funds were recently formed and therefore performance comparisons
were unavailable or related to a time period that was too short for a comparison
to be meaningful. In addition, the Trustees noted that some of the Funds have
sub-advisers or portfolio managers who have been managing the Fund for a limited
period of time, and that the long-term investment performance of those Funds is
not entirely attributable to the current sub-adviser's or portfolio managers'
efforts. In such circumstances, the Trustees paid particular attention to the
Fund's investment performance during the period for which the current
sub-adviser or portfolio managers have managed the Fund. The Trustees also
considered each Manager's performance and reputation generally, the Funds'
performance as a fund family generally, and the historical responsiveness of the
Managers to Trustee concerns about performance and the willingness of the
Managers to take steps intended to improve performance. After reviewing these
and related factors and discussions with Fund management, the Trustees
concluded, within the context of their overall conclusions regarding each of the
Agreements with respect to the Funds, that the performance of the Funds and the
Managers supported the renewal of the Agreements with respect to the Funds.
THE COSTS OF THE SERVICES TO BE PROVIDED AND PROFITS TO BE REALIZED BY THE
MANAGERS AND THEIR AFFILIATES FROM THEIR RESPECTIVE RELATIONSHIPS WITH THE
FUNDS. The Trustees considered and had discussions with Fund management
regarding the fees charged to the Funds for advisory and sub-advisory services
as well as the total expense levels of the Funds. This information included
comparisons of the Funds' advisory fees and total expense levels to those of
their peer groups and information about the advisory fees charged by the
Managers to other funds and accounts with similar investment programs, if any.
In considering the fees charged to such other funds or accounts, the Trustees
considered, among other things, the differences between managing mutual funds as
compared to other types of accounts, including the additional resources required
to manage mutual fund assets effectively. In evaluating each Fund's advisory
fees (and sub-advisory fees, if any), the Trustees also took into account the
demands, complexity and quality of the investment management of such Fund. The
Trustees also considered any compensation received by the Managers and their
affiliates from the Funds for providing services other than advisory or
sub-advisory services. The Trustees reviewed information provided by the
Managers as to the profitability of the Managers' and their affiliates'
relationships with the Funds, and information about the allocation of expenses
used to calculate profitability. When reviewing profitability, the Trustees also
considered information about the performance of the relevant Funds, the expense
levels of the Funds, and whether the Managers had implemented breakpoints in
their fee schedules and/or expense caps with respect to such Funds. After
reviewing these and related factors and discussions with Fund management, the
Trustees concluded, within the context of their overall conclusions regarding
each of the Agreements, that the advisory and sub-advisory fees charged to each
of the Funds were fair and reasonable, and that the costs of these services
generally and the related profitability of the Managers and their affiliates in
respect of their relationships with the Funds supported the renewal of the
Agreements with respect to the Funds.
ECONOMIES OF SCALE. The Trustees considered the existence of any economies of
scale (i.e. decreasing per unit costs as a fund increases in asset size) in the
provision of services by the Managers and whether those economies are shared
with the Funds through breakpoints in their investment advisory fees or other
means, such as expense waivers. The Trustees noted that all of the share classes
of all of the Funds benefited from expense caps. In considering these issues,
the Trustees also took note of the costs of the services provided (both on an
absolute and a relative basis) and the profitability to the Managers and their
affiliates of their relationships with the Funds, as discussed above. After
reviewing these and related factors and discussions with Fund management, the
Trustees concluded, within the context of their overall conclusions regarding
each of the Agreements, that the extent to
194 HIGHMARK(R) FUNDS
which any economies of scale are shared with the Funds supported the renewal of
the Agreements with respect to the Funds.
The Trustees also considered other factors, which included but were not limited
to the following:
o whether each Fund has operated in accordance with its investment
objective and the Fund's record of compliance with its investment
policies and restrictions, and the compliance programs of the Funds
and the Managers.
o the nature, quality, cost and extent of administrative, custody,
securities lending and shareholder services performed by the Adviser
and its affiliates, both under the applicable Agreement and under
other separate agreements with or with respect to HighMark.
o so-called "fallout benefits" to the Managers, such as the engagement
of affiliates of the Adviser to provide custody, securities lending,
administration and other services to the Funds, and the benefits of
investment research provided to the Managers by reason of brokerage
commissions generated by the Funds' securities transactions. The
Trustees considered the possible conflicts of interest associated
with these fallout and other benefits, and the reporting, disclosure
and other processes in place to disclose and monitor such possible
conflicts of interest.
Based on their evaluation of all factors that they deemed to be material,
including those factors described above, and assisted by the advice of
independent counsel, the Trustees concluded that the Agreements should be
continued with respect to the Funds through July 31, 2011.
In addition to the foregoing renewals, during the period covered by this annual
report, the Board of Trustees, including the Independent Trustees, also
approved, at an in-person meeting of the Board held on May 19, 2010, interim
contracts between the Adviser and Ziegler Capital Management, LLC ("Ziegler")
relating to HighMark Equity Income Fund, HighMark NYSE Arca Tech 100 Index Fund
and HighMark Wisconsin Tax-Exempt Fund (the "Ziegler Sub-Advised Funds"),
respectively (each an "Interim Sub-Advisory Agreement," and collectively, the
"Interim Sub-Advisory Agreements") and new sub-advisory agreements between the
Adviser and Ziegler relating to the Ziegler Sub-Advised Funds (each a "New
Sub-Advisory Agreement," and collectively, the "New Sub-Advisory Agreements").
On April 30, 2010, the Ziegler Companies, Inc. ("ZCO"), the parent company of
Ziegler, entered into a purchase agreement (the "Purchase Agreement") with RTZ
Acquisition, LLC ("Rizvi") and Scott Roberts to sell fifty-one percent (51%) of
the outstanding membership interests in Ziegler (the "Transaction"). Rizvi is a
newly formed entity managed by Rizvi Traverse Management LLC. The Transaction
closed on May 21, 2010.
The Transaction is the type of event considered to be a "change of control" of
Ziegler under the 1940 Act. Under the 1940 Act, investment advisory (and
sub-advisory) agreements for investment companies are required to terminate
automatically upon their assignment, and a "change of control" of an investment
adviser (or a sub-adviser) is deemed to cause an assignment of the investment
advisory (or sub-advisory) agreements to which the investment adviser (or
sub-adviser) is a party. Consequently, on May 21, 2010, the then existing
sub-advisory agreements between the Adviser and Ziegler relating to the Ziegler
Sub-Advised Funds automatically terminated in accordance with their terms as
well as the terms of the 1940 Act (each a "Prior Sub-Advisory Agreement," and
collectively, the "Prior Sub-Advisory Agreements"). In anticipation of the
termination of the Prior Sub-Advisory Agreements, at an in person meeting of the
Board held on May 19, 2010, as mentioned above, the Board, including the
Independent Trustees, approved the Interim Sub-Advisory Agreements, which will
continue in effect until the earlier of 150 days after the termination of the
Prior Sub-Advisory Agreements and the approval of new sub-advisory agreements
between HCM and Ziegler. As mentioned above, at such Board meeting, the Board,
including the Independent Trustees, also approved the New Sub-Advisory
Agreements. A special meeting of shareholders of the Ziegler Sub-Advised Funds
has been called to be held on October 8, 2010 to consider approving the New
Sub-Advisory Agreements for the Ziegler Sub-Advised Funds.
At the meeting of the Board held on May 19, 2010, the Trustees conferred with
representatives of Ziegler and the Adviser to consider the Transaction and its
effect on the Ziegler Sub-Advised Funds. Legal counsel assisted the Board, and
provided advice on, among other things, the Board's fiduciary obligations in
considering the proposed Interim Sub-Advisory Agreements and New Sub-Advisory
Agreements.
In evaluating the proposed New Sub-Advisory Agreements, the Board reviewed
materials furnished by the Adviser and Ziegler. Representatives of Ziegler were
present at the meeting and described in detail the Transaction and its effect on
Ziegler's provision of sub-advisory services to the Ziegler Sub-Advised Funds.
After considering the information presented to it at the meeting, the Board,
including a majority of the Independent Trustees, approved the New Sub-Advisory
Agreements. In considering whether to approve the New Sub-Advisory Agreements,
the Board did not identify any single factor as determinative. Matters
considered by the Trustees in connection with their approval of the New
Sub-Advisory Agreements included the following:
HIGHMARK(R) FUNDS 195
BOARD APPROVAL OF THE EXISTING ADVISORY AND SUB-ADVISORY AGREEMENTS (UNAUDITED)
(CONCLUDED)
THE DIFFERENCES BETWEEN THE PRIOR SUB-ADVISORY AGREEMENTS AND THE NEW
SUB-ADVISORY AGREEMENTS. In considering whether to approve the New Sub-Advisory
Agreements, the Trustees took into account that they had initially approved the
Prior Sub-Advisory Agreements with Ziegler on January 23, 2009 and the initial
shareholder of the Ziegler Sub-Advised Funds approved the Prior Sub-Advisory
Agreements on June 3, 2009. The Trustees also noted that there are no material
changes between the terms and conditions of the Prior Sub-Advisory Agreements
and the New Sub-Advisory Agreements, except that the New Sub-Advisory Agreements
will have different effective dates.
THE IMPACT OF THE TRANSACTION ON ZIEGLER'S PROVISION OF SUB-ADVISORY SERVICES TO
THE ZIEGLER SUB-ADVISED FUNDS. In determining whether to approve the New
Sub-Advisory Agreements, the Trustees, including a majority of the Independent
Trustees, determined that the scope and quality of services to be provided under
the New Sub-Advisory Agreements were at least equivalent to those provided under
the Prior Sub-Advisory Agreements. In addition, the Trustees were advised by
Ziegler that Ziegler anticipated that there would be no changes in the personnel
who provide the portfolio management services to the Ziegler Sub-Advised Funds.
The Trustees reviewed information regarding the Transaction and information
regarding Ziegler and its new investors, including financial statements of
Ziegler pre and post Transaction, affiliates of Ziegler pre and post Transaction
and Ziegler's business plan. The Trustees noted that there are no anticipated
changes in the management structure, the portfolio management teams or any other
personnel of Ziegler after the Transaction, aside from Ziegler hiring its own
in-house legal counsel on May 3, 2010, and Mr. Roberts, the President of
Ziegler, taking on additional responsibilities as the CEO and Chairman of
Ziegler, which make Mr. Roberts responsible for all aspects of the management of
Ziegler and require him to report to Ziegler's Board of Managers. The Trustees
further noted that ZCO will bear all expenses incurred by the Ziegler
Sub-Advised Funds in connection with the proposed Transaction.
THE NATURE, EXTENT AND QUALITY OF THE SERVICES TO BE PROVIDED TO THE ZIEGLER
SUB-ADVISED FUNDS UNDER THE NEW SUB-ADVISORY AGREEMENTS. The Trustees considered
the nature, extent and quality of the services provided by Ziegler to the
Ziegler Sub-Advised Funds and the resources dedicated to the Ziegler Sub-Advised
Funds by Ziegler. After reviewing these and related factors and discussions with
Fund management, the Trustees concluded, within the context of their overall
conclusions regarding the New Sub-Advisory Agreements, that the nature, extent
and quality of services provided by Ziegler supported approval of the New
Sub-Advisory Agreements.
INVESTMENT PERFORMANCE OF THE ZIEGLER SUB-ADVISED FUNDS AND ZIEGLER. The
Trustees received and considered information about the performance of the
Ziegler Sub-Advised Funds relative to their peers and Ziegler's performance in
managing products with similar investment objectives and strategies as the
Ziegler Sub-Advised Funds over various time periods. The Trustees also
considered Ziegler's reputation generally. After reviewing these and related
factors and discussions with Fund management, the Trustees concluded, within the
context of their overall conclusions regarding the New Sub-Advisory Agreements,
that the performance of Ziegler in managing the Ziegler Sub-Advised Funds when
compared to products with similar investment objectives and strategies as the
Ziegler Sub-Advised Funds supported approval of the New Sub-Advisory Agreements.
THE COSTS OF THE SERVICES TO BE PROVIDED AND PROFITS TO BE REALIZED BY ZIEGLER
AND ITS AFFILIATES FROM THEIR RELATIONSHIPS WITH THE ZIEGLER SUB-ADVISED FUNDS.
The Trustees considered and had discussions with Fund management regarding the
fees charged by Ziegler relating to its services to the Ziegler Sub-Advised
Funds. The Trustees observed that the fee rates under the New Sub-Advisory
Agreements were identical to the fee rates under the Prior Sub-Advisory
Agreements. In considering the fees charged to other funds or accounts, the
Trustees considered, among other things, the differences between managing mutual
funds as compared to other types of accounts, including the additional resources
required to manage mutual fund assets effectively, and the differences between
the responsibilities of a sub-adviser, as compared to an adviser, of a mutual
fund. In evaluating the Ziegler Sub-Advised Funds' sub-advisory fees, the
Trustees also took into account the demands of Ziegler's approach to the
investment management of the Ziegler Sub-Advised Funds. The Trustees also
considered whether any compensation other than sub-advisory fees is received by
Ziegler and its affiliates from the Ziegler Sub-Advised Funds or any other
series of HighMark. The Trustees also reviewed information relating to the
profitability of Ziegler's and its affiliates' relationship with the Ziegler
Sub-Advised Funds. When reviewing the profitability of Ziegler, the Trustees
took into account the expense levels of the Ziegler Sub-Advised Funds and
whether Ziegler had implemented breakpoints in its fee schedules. After
reviewing these and related factors and discussions with Fund management, the
Trustees concluded, within the context of their overall conclusions regarding
the New Sub-Advisory Agreements, that the sub-advisory fees charged by Ziegler
relating to its services provided to the Ziegler Sub-Advised Funds were fair and
reasonable, and that the costs of these services generally and the related
profitability of Ziegler and its affiliates in respect of their relationship
with the Ziegler Sub-Advised Funds supported approval of the New Sub-Advisory
Agreements.
ECONOMIES OF SCALE. The Trustees considered the possible existence of economies
of scale (i.e. decreasing per unit costs as a fund increases in asset size) in
the provision of services by Ziegler and whether those economies of scale are
shared with the Ziegler Sub-Advised Funds. The Trustees noted that all of the
share classes of the Ziegler Sub-Advised Funds benefit from expense caps. In
considering these issues, the Trustees also took note of the costs of the
services provided (both on an absolute and a relative basis)
196 HIGHMARK(R) FUNDS
and the profitability to Ziegler and its affiliates of their relationships with
the Ziegler Sub-Advised Funds, as discussed above. After reviewing these and
related factors and discussions with Fund management, the Trustees concluded,
within the context of their overall conclusions regarding the New Sub-Advisory
Agreements, that the extent to which any economies of scale are shared with the
Ziegler Sub-Advised Funds supported the approval of the New Sub-Advisory
Agreements with respect to the Ziegler Sub-Advised Funds.
The Trustees also considered other factors, which included but were not limited
to the following:
o the compliance programs of Ziegler;
o so-called "fallout benefits" to Ziegler such as the benefits of
investment research provided to Ziegler by reason of brokerage
commissions ("soft dollar" benefits) generated by HighMark Equity
Income Fund's and HighMark NYSE Arca Tech 100 Index Fund's
securities transactions. There is no soft dollar arrangement for
Ziegler's fixed income portfolios, including HighMark Wisconsin
Tax-Exempt Fund.
Based on their evaluation of all factors that they deemed to be material and
assisted by the advice of independent counsel, the Trustees, including a
majority of the Independent Trustees, approved the New Sub-Advisory Agreements.
Based on the same factors and conclusions, the Trustees also approved the
Interim Sub-Advisory Agreements between HCM and Ziegler relating to the Ziegler
Sub-Advised Funds, such agreements to take effect upon the termination of the
Prior Sub-Advisory Agreements and to terminate no later than 150 days after
their effectiveness.
HIGHMARK(R) FUNDS 197
FUND INFORMATION (UNAUDITED)
JULY 31, 2010
HighMark Funds is committed to managing our mutual funds in the best interests
of our shareholders. The Board of Trustees of HighMark Funds has delegated the
authority to vote proxies on behalf of the Funds that own voting securities to
the Adviser. The Board has authorized the Adviser to delegate proxy voting
authority with respect to a Fund to that Fund's sub-adviser. A description of
the proxy voting guidelines and policies that the Funds use to determine how to
vote proxies relating to portfolio securities is available (i) without charge,
upon request by calling our investor services desk at 1-800-433-6884; (ii) on
the SEC's website at http://www.sec.gov; and (iii) on HighMark Funds' website at
http://www.highmarkfunds.com. Information relating to how a Fund voted proxies
relating to portfolio securities during the most recent 12-month period ended
June 30 is available (i) without charge, upon request by calling our investor
services desk at 1-800-433-6884; (ii) on the SEC's website at
http://www.sec.gov; and (iii) on the HighMark Funds' website at
http://www.highmarkfunds.com. The Trust files its complete schedule of portfolio
holdings with the Securities and Exchange Commission for the first and third
quarters of each fiscal year on Form N-Q within sixty days after the end of the
period. The Funds' Forms N-Q are (i) available without charge upon request by
calling our investor services desk at 1-800-433-6884; (ii) available on the
SEC's website at http://www.sec.gov; (iii) available on the HighMark Funds'
website at http://www.highmarkfunds.com; and (iv) may be reviewed and copied at
the SEC's Public Reference Room in Washington, DC. Information on the operation
of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
FIDUCIARY SHARES INFORMATION
FUND CUSIP TICKER FUND #
BALANCED 431114792 HMBAX 491
COGNITIVE VALUE 431112390 HCLFX 2209
CORE EQUITY 431112788 HMCFX 1627
ENHANCED GROWTH 431112358 HEGFX 2210
EQUITY INCOME 431113109 NJPFX 2643
FUNDAMENTAL EQUITY 431112267 HMFFX 2217
GENEVA MID CAP GROWTH 431113505 PNMFX 2647
GENEVA SMALL CAP GROWTH 431113885 HGFSX 2650
INTERNATIONAL OPPORTUNITIES 431112341 HIOFX 2211
LARGE CAP GROWTH 431114818 HMGRX 492
LARGE CAP VALUE 431114206 HMIEX 490
NYSE ARCA TECH 100 INDEX 431113844 PTSFX 2654
SMALL CAP ADVANTAGE 431112465 HSAFX 2214
SMALL CAP VALUE 431112101 HMSCX 148
VALUE MOMENTUM 431114677 HMVMX 871
CAPITAL GROWTH ALLOCATION 431112283 HGAFX 2198
DIVERSIFIED EQUITY ALLOCATION 431112317 HEAFX 2195
GROWTH & INCOME ALLOCATION 431112325 HGIFX 2197
INCOME PLUS ALLOCATION 431112333 HPAFX 2196
BOND 431114305 HMBDX 489
CA INTERMEDIATE TAX-FREE BOND 431114644 HMITX 847
NATIONAL INTERMEDIATE TAX-FREE BOND 431112655 HMNTX 1600
SHORT TERM BOND 431112549 HMSFX 1506
WISCONSIN TAX-EXEMPT 431113794 WTEFX 2658
198 HIGHMARK(R) FUNDS
RETAIL SHARES INFORMATION
FUND CUSIP TICKER FUND #
BALANCED
CLASS A SHARES 431114776 HMBRX 480
CLASS B SHARES 431114545 HMBBX 452
CLASS C SHARES 431112887 HMBCX 1760
COGNITIVE VALUE
CLASS A SHARES 431112432 HCLAX 2203
CLASS C SHARES 431112424 HCLCX 2206
CORE EQUITY
CLASS A SHARES 431112770 HCEAX 1626
CLASS B SHARES 431112762 HCEBX 1628
CLASS C SHARES 431112754 HCECX 1632
EQUITY INCOME
CLASS A SHARES 431113208 NJPAX 2640
CLASS B SHARES 431113307 NJPBX 2641
CLASS C SHARES 431113406 NJPCX 2642
ENHANCED GROWTH
CLASS A SHARES 431112382 HEHAX 2204
CLASS C SHARES 431112374 HEGCX 2207
FUNDAMENTAL EQUITY
CLASS A SHARES 431112259 HMFAX 2215
CLASS C SHARES 431112242 HMFCX 2216
GENEVA MID CAP GROWTH
CLASS A SHARES 431113604 PNMAX 2644
CLASS B SHARES 431113703 PNMBX 2645
CLASS C SHARES 431113802 MGPCX 2646
GENEVA SMALL CAP GROWTH
CLASS A SHARES 431113877 HGASX 2648
CLASS C SHARES 431113851 HGCSX 2649
INTERNATIONAL OPPORTUNITIES
CLASS A SHARES 431112481 HIOAX 2205
CLASS C SHARES 431112473 HITCX 2208
LARGE CAP GROWTH
CLASS A SHARES 431114768 HMRGX 481
CLASS B SHARES 431114511 HMGBX 455
CLASS C SHARES 431112879 HGRCX 1755
LARGE CAP VALUE
CLASS A SHARES 431114784 HMERX 479
CLASS B SHARES 431114537 HIEBX 457
CLASS C SHARES 431112861 HIECX 1754
HIGHMARK(R) FUNDS 199
FUND INFORMATION (UNAUDITED) (CONCLUDED)
JULY 31, 2010
RETAIL SHARES INFORMATION (CONTINUED)
FUND CUSIP TICKER FUND #
NYSE ARCA TECH 100 INDEX
CLASS A SHARES 431113836 PPTIX 2651
CLASS B SHARES 431113828 PSEBX 2652
CLASS C SHARES 431113810 PTICX 2653
SMALL CAP ADVANTAGE
CLASS A SHARES 431112457 HSAAX 2212
CLASS C SHARES 431112440 HSCAX 2213
SMALL CAP VALUE
CLASS A SHARES 431112200 HASVX 41
CLASS B SHARES 431112309 HBSVX 123
CLASS C SHARES 431112820 HSVCX 1756
VALUE MOMENTUM
CLASS A SHARES 431114628 HMVLX 870
CLASS B SHARES 431114529 HVMBX 456
CLASS C SHARES 431112812 HVMCX 1753
CAPITAL GROWTH ALLOCATION
CLASS A SHARES 431112564 HMAAX 1494
CLASS C SHARES 431112556 HMACX 1497
DIVERSIFIED EQUITY ALLOCATION
CLASS A SHARES 431112275 HEAAX 2193
CLASS C SHARES 431112291 HEACX 2194
GROWTH & INCOME ALLOCATION
CLASS A SHARES 431112580 HMRAX 1493
CLASS C SHARES 431112572 HMRCX 1496
INCOME PLUS ALLOCATION
CLASS A SHARES 431112614 HMPAX 1495
CLASS C SHARES 431112598 HMPCX 1498
BOND
CLASS A SHARES 431114743 HMRBX 478
CLASS B SHARES 431112747 HBDBX 1090
CLASS C SHARES 431112648 HBDCX 1492
CA INTERMEDIATE TAX-FREE BOND
CLASS A SHARES 431114578 HMCIX 846
CLASS B SHARES 431112796 HCABX 1761
CLASS C SHARES 431112630 HCTCX 1491
NATIONAL INTERMEDIATE TAX-FREE BOND
CLASS A SHARES 431112663 HMNFX 1598
CLASS C SHARES 431112622 HNTCX 1490
SHORT TERM BOND
CLASS A SHARES 431112523 HMSAX 1505
CLASS C SHARES 431112515 HMTCX 1470
200 HIGHMARK(R) FUNDS
RETAIL SHARES INFORMATION (CONTINUED)
FUND CUSIP TICKER FUND #
WISCONSIN TAX-EXEMPT
CLASS A SHARES 431113786 PWTEX 2655
CLASS B SHARES 431113778 WTEBX 2656
CLASS C SHARES 431113760 WTECX 2657
CLASS M SHARES INFORMATION
COGNITIVE VALUE 431112416 HCLMX 2200
ENHANCED GROWTH 431112366 HEGMX 2201
INTERNATIONAL OPPORTUNITIES 431112499 HIOMX 2202
HIGHMARK(R) FUNDS 201
NOTES
202 HIGHMARK(R) FUNDS
NOTES
HIGHMARK(R) FUNDS 203
SERVICE PROVIDERS & BOARD OF TRUSTEES
INVESTMENT ADVISER & ADMINISTRATOR
HighMark Capital Management, Inc.
350 California Street, Suite 1600
San Francisco, CA 94104
SUB-ADVISERS
Cognitive Value Fund,
Enhanced Growth Fund and
International Opportunities Fund:
Bailard, Inc.
950 Tower Lane, Suite 1900
Foster City, CA 94404-2131
Small Cap Value Fund:
LSV Asset Management
One North Wacker Drive, Suite 4000
Chicago, IL 60606
Geneva Mid Cap Growth Fund and
Geneva Small Cap Growth Fund:
Geneva Capital Management Ltd.
250 East Wisconsin Avenue, Suite 1050
Milwaukee, WI 53202
Equity Income Fund,
NYSE Arca Tech 100 Index Fund
and Wisconsin Tax-Exempt Fund:
Ziegler Capital Management, LLC
200 South Wacker Drive, Suite 2000
Chicago, IL 60606
CUSTODIAN
Union Bank, N.A.
350 California Street
San Francisco, CA 94104
DISTRIBUTOR
HighMark Funds Distributors, Inc.
760 Moore Road
King of Prussia, PA 19406
LEGAL COUNSEL
Ropes & Gray LLP
Three Embarcadero Center
San Francisco, CA 94111-4006
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Deloitte & Touche LLP
1700 Market Street
Philadelphia, PA 19103
TRANSFER AGENT
Boston Financial Data Services
PO Box 8416
Boston, MA 02266
BOARD OF TRUSTEES
David E. Benkert, Chairman
Thomas L. Braje
Evelyn S. Dilsaver
David A. Goldfarb
Michael L. Noel
Robert M. Whitler
Earle A. Malm, II
204 HIGHMARK(R) FUNDS
- --------------------------------------------------------------------------------
TO LEARN MORE ABOUT HIGHMARK, VISIT US AT
WWW.HIGHMARKFUNDS.COM OR CALL:
INVESTOR SERVICES DESK
1.800.433.6884
INVESTMENT PROFESSIONAL SUPPORT DESK
1.800.455.5609
THANK YOU FOR YOUR INVESTMENT.
[HIGHMARK FUNDS LOGO](R)
-----------------------------
Mutual Funds:
o are not FDIC insured
o have no bank guarantee
o may lose value
-----------------------------
[HIGHMARK FUNDS LOGO](R)
445 South Figueroa Street o Suite 306 o Los Angeles o California o 90071
WWW.HIGHMARKFUNDS.COM
HMK-AR-004-0100
84806-B (07/10)
- --------------------------------------------------------------------------------
JULY 31, 2010
- --------------------------------------------------------------------------------
HIGHMARK
The smarter approach to investing.
MONEY MARKET
ANNUAL
--------------------------------------------------------
report
[GRAPHIC OMITTED]
[HIGHMARK FUNDS LOGO](R)
TABLE OF CONTENTS
management's discussion of fund performance
california tax-free money market fund. ................................. 2
taxable money market funds ............................................. 3
disclosure of fund expenses. .............................................. 4
schedules of investments .................................................. 6
statements of assets and liabilities ...................................... 19
statements of operations .................................................. 21
statements of changes in net assets. ...................................... 22
financial highlights. ..................................................... 28
notes to financial statements ............................................. 31
report of independent registered public accounting firm ................... 36
notice to shareholders .................................................... 37
trustees and officers. .................................................... 38
board approval of the existing advisory agreements ........................ 40
fund information .......................................................... 42
service providers & board of trustees ..................................... 44
This report and the financial statements contained herein are submitted for the
general information of HighMark Funds' shareholders. This report is not
authorized for distribution to prospective investors unless preceded or
accompanied by an effective prospectus.
Shares of HighMark Funds are not deposits or obligations of, or guaranteed by,
Union Bank, N.A. or any of its subsidiaries or affiliates. Such shares are also
not federally insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board, or any other agency. Investments in shares of mutual funds
involve risk, including the possible loss of principal. HighMark Funds
Distributors, Inc. serves as distributor for HighMark Funds and is not
affiliated with the adviser of HighMark Funds, HighMark Capital Management,
Inc., or with Union Bank, N.A.
FUND SECTORS
CALIFORNIA TAX-FREE
MONEY MARKET FUND
% OF
SECTOR PORTFOLIO
REVENUE BONDS 60.4%
GENERAL OBLIGATIONS 14.6
TAX EXEMPT COMMERCIAL PAPER 8.1
TAX AND REVENUE ANTICIPATION NOTES 6.3
CERTIFICATES OF PARTICIPATION 5.7
SPECIAL TAX 4.9
CALIFORNIA TAX-FREE MONEY MARKET FUND* (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2010, HighMark California Tax-Free Money
Market Fund (the "Fund") produced a seven-day effective yield of 0.03%
(Fiduciary Shares)**. Using a combined federal and California state income tax
rate of 34.90%, the seven-day effective yield is equivalent to a 0.06% taxable
yield.
FACTORS AFFECTING PERFORMANCE
During the Fund's reporting period, the Federal Reserve maintained a target
short-term interest rate range between 0% and 0.25%. The Federal Reserve said
economic conditions warranted these low interest rate levels in order to support
an economic recovery that was slower than anticipated. While it did see
indicators that economic activity was improving, the Federal Reserve remained
concerned by high unemployment, modest income growth, lower housing wealth and
tighter credit. Municipal note yields decreased from 0.83% to 0.48%, reflecting
the demand for new issuance of annual cash flow notes from municipal issuers. As
of July 31, 2010, California's long term rating from the three major rating
agencies was A1/A-/A-, upgraded by Moody's and Fitch as they transitioned their
municipal rating to a global rating scale. The state's budget deficit was
projected at $17.9 billion as the recession continued, and the legislature and
governor worked to compromise on its budget for the fiscal year.
The Fund maintained a shorter weighted average maturity than its peer group
during the period, increasing the percentage of its variable rate notes position
to provide a higher level of liquidity. The Fund's weighted average maturity was
23 days.
* AN INVESTMENT IN THE HIGHMARK MONEY MARKET FUNDS IS NEITHER INSURED NOR
GUARANTEED BY THE U.S. GOVERNMENT, EXCEPT THAT THE HIGHMARK MONEY MARKET
FUNDS PARTICIPATED IN THE U.S. DEPARTMENT OF TREASURY'S TEMPORARY
GUARANTEE PROGRAM UNTIL THE PROGRAM EXPIRED ON SEPTEMBER 18, 2009 (SEE
NOTE 7 TO THE ACCOMPANYING FINANCIAL STATEMENTS). ALTHOUGH THESE FUNDS
SEEK TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00, THERE CAN BE NO
ASSURANCE THAT THEY WILL BE ABLE TO DO SO. SOME OR ALL OF THE INCOME YOU
RECEIVE FROM HIGHMARK CALIFORNIA TAX-FREE MONEY MARKET FUND MAY BE SUBJECT
TO CERTAIN STATE AND LOCAL TAXES, AND IN SOME CASES, TO THE FEDERAL
ALTERNATIVE MINIMUM TAX. IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN
THE FUNDS.
** The seven-day effective yields, as of July 31, 2010, are as follows:
CLASS A CLASS S FIDUCIARY
SHARES SHARES SHARES
- --------------------------------------------------------------------------------
California Tax Free Money Market Fund
Subsidized+ 0.02% 0.02% 0.03%
Non-Subsidized -0.49% -0.54% -0.24%
+ The Fund's Adviser has contractually agreed to waive fees and reimburse
expenses in order to keep total operating expenses for all share classes
from exceeding the net expense ratios listed in the prospectus, for the
period beginning December 1, 2009 and ending on November 30, 2010. The
yields shown also reflect voluntary waivers in place. The Adviser may
recoup from the Fund any of the fees and expenses it has waived and/or
reimbursed until the end of the third fiscal year after the end of the
fiscal year in which such waiver and/or reimbursement occurs, subject to
certain limitations. This recoupment could reduce the Fund's future total
return.
2 HIGHMARK(R) FUNDS
TAXABLE MONEY MARKET FUNDS* (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2010, HighMark 100% U.S. Treasury Money
Market Fund posted a seven-day effective yield of 0.01% (Fiduciary Shares)**,
HighMark Treasury Plus Money Market Fund posted a seven-day effective yield of
0.03% (Fiduciary Shares)**, HighMark U.S. Government Money Market Fund posted a
seven-day effective yield of 0.05% (Fiduciary Shares)** and HighMark Diversified
Money Market Fund posted a seven-day effective yield of 0.16% (Fiduciary
Shares)**. (These funds are collectively the "Funds," and each is a "Fund.")
FACTORS AFFECTING PERFORMANCE
A muted economic recovery with low interest rates, strong demand for short-term
U.S. Treasury securities and a general shortage of high-quality investments all
contributed negatively to the Funds' performance.
HighMark 100% U.S. Treasury Money Market Fund's investment strategy was driven
primarily by supply fluctuations, auction sizes and timing. At year-end 2009,
U.S. Treasury securities maturing in three months or less traded at, or near,
zero market yields.
HighMark Treasury Plus Money Market Fund was negatively affected by this same
trend. The yield advantage when compared with direct short-term U.S. Treasury
investments led the Fund to invest primarily in overnight repurchase agreements
during the period. Within prospectus limits, this Fund and the HighMark U.S.
Government Money Market Fund benefited by investing in U.S. Government agency
guaranteed issues.
HighMark Diversified Money Market Fund struggled with collapsing yields and a
shortage of high-quality financial paper in the first half of the fiscal year.
During this time, it focused on sovereign guarantees offered for new issue bank
debt with attractive levels for one year maturities. Beginning in late March
2010, London Interbank Offered Rates (LIBOR) began to rise over concerns with
European banking and sovereign risks, especially in Greece. The Fund benefited
from this uptick through resets on adjustable rate securities it held, as one
month LIBOR rates increased 0.10% before peaking in mid-May 2010 at 0.34%, and
three month LIBOR rose by 0.20% to 0.54%. European Union guarantees, led by
Germany and France, reassured capital markets, and as a result the LIBOR curve
normalized.
* AN INVESTMENT IN THE HIGHMARK MONEY MARKET FUNDS IS NEITHER INSURED NOR
GUARANTEED BY THE U.S. GOVERNMENT, EXCEPT THAT THE HIGHMARK MONEY MARKET
FUNDS PARTICIPATED IN THE U.S. DEPARTMENT OF TREASURY'S TEMPORARY
GUARANTEE PROGRAM UNTIL THE PROGRAM EXPIRED ON SEPTEMBER 18, 2009 (SEE
NOTE 7 TO THE ACCOMPANYING FINANCIAL STATEMENTS). ALTHOUGH THESE FUNDS
SEEK TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00, THERE CAN BE NO
ASSURANCE THAT THEY WILL BE ABLE TO DO SO. IT IS POSSIBLE TO LOSE MONEY BY
INVESTING IN THE FUNDS.
** The seven-day effective yields, as of July 31, 2010, are as follows:
CLASS A CLASS B CLASS C CLASS S FIDUCIARY
SHARES SHARES SHARES SHARES SHARES
- ------------------------------------------------------------------------------------------
Diversified Money Market Fund
Subsidized+ 0.07% n/a n/a 0.07% 0.16%
Non-Subsidized -0.29% n/a n/a -0.34% -0.04%
Treasury Plus Money Market Fund
Subsidized+ 0.03% n/a n/a 0.00% 0.03%
Non-Subsidized -0.87% n/a n/a 0.00% -0.62%
U.S. Government Money Market Fund
Subsidized+ 0.05% 0.05% 0.05% 0.05% 0.05%
Non-Subsidized -0.75% -1.24% -1.00% -0.80% -0.50%
100% U.S. Treasury Money Market Fund
Subsidized+ 0.01% n/a n/a 0.01% 0.01%
Non-Subsidized -0.85% n/a n/a -0.90% -0.60%
+ The Fund's Adviser has contractually agreed to waive fees and reimburse
expenses in order to keep total operating expenses for all share classes
from exceeding the net expense ratios listed in the prospectus, for the
period beginning December 1, 2009 and ending on November 30, 2010. The
yields shown also reflect voluntary waivers in place. The Adviser may
recoup from the Fund any of the fees and expenses it has waived and/or
reimbursed until the end of the third fiscal year after the end of the
fiscal year in which such waiver and/or reimbursement occurs, subject to
certain limitations. This recoupment could reduce the Fund's future total
return.
FUND SECTORS
DIVERSIFIED MONEY
MARKET FUND
% OF
SECTOR PORTFOLIO
COMMERCIAL PAPER 52.0%
CERTIFICATES OF DEPOSIT 34.5
CORPORATE OBLIGATIONS 9.7
FOREIGN BANK NOTE 1.9
REPURCHASE AGREEMENT 1.5
VARIABLE RATE DEMAND NOTES 0.4
TREASURY PLUS MONEY
MARKET FUND
% OF
SECTOR PORTFOLIO
REPURCHASE AGREEMENTS 96.3%
U.S. GOVERNMENT GUARANTEED OBLIGATION 3.7
U.S. GOVERNMENT MONEY
MARKET FUND
% OF
SECTOR PORTFOLIO
REPURCHASE AGREEMENTS 58.4%
U.S. GOVERNMENT AGENCY OBLIGATIONS 20.8
VARIABLE RATE DEMAND NOTES 15.6
U.S. GOVERNMENT GUARANTEED OBLIGATION 5.2
100% U.S. TREASURY MONEY
MARKET FUND
% OF
SECTOR PORTFOLIO
U.S. TREASURY BILLS 100.0%
HIGHMARK(R) FUNDS 3
DISCLOSURE OF FUND EXPENSES
We believe it is important for you to understand the impact of fees regarding
your investment. All mutual funds have operating expenses. As a shareholder of a
mutual fund, you incur two types of costs: (1) transaction costs and (2) ongoing
costs, which include costs for portfolio management, administrative services,
distribution fees and shareholder reports (like this one), among others.
Operating expenses, which are deducted from a mutual fund's gross income,
directly reduce the investment return of the mutual fund. A mutual fund's
expenses are expressed as a percentage of its average net assets. This figure is
known as the expense ratio. The following examples are intended to help you
understand the ongoing fees (in dollars) of investing in each Fund and to
compare these costs with those of other mutual funds. The examples are based on
an investment of $1,000 made at the beginning of the period shown and held for
the entire period.
The table below illustrates each Fund's costs in two ways.
o ACTUAL FUND RETURN. This section helps you to estimate the actual expenses
after fee waivers that you paid over the period. The "Ending Account
Value" shown is derived from the Fund's actual return, and the fourth
column shows the dollar amount that would have been paid by an investor
who started with $1,000 in the Fund. You may use the information here,
together with the amount you invested, to estimate the expenses that you
paid over the period.
To do so, simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
given for your Fund under the heading "Expenses Paid During Period."
o HYPOTHETICAL 5% RETURN. This section is intended to help you compare each
Fund's costs with those of other mutual funds. It assumes that the Fund
had a return of 5% before expenses during the year, but that the expense
ratio is unchanged. In this case, because the return used is not the
Fund's actual return, the results do not apply to your investment. The
example is useful in making comparisons because the Securities and
Exchange Commission requires all mutual funds to calculate expenses based
on a 5% return. You can assess each Fund's costs by comparing this
hypothetical example with the hypothetical examples that appear in
shareholder reports of other mutual funds.
Please note that the expenses shown in the table are meant to highlight and help
you compare ongoing costs only and do not reflect any transactional costs such
as redemption fees, which are described in each Fund's prospectus. If these fees
were applied to your account, your costs would be higher.
BEGINNING ENDING NET EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE AT VALUE AT EXPENSE DURING
2/1/10 7/31/10 RATIOS PERIOD*
CALIFORNIA TAX-FREE MONEY MARKET FUND
- --------------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .................... $1,000.00 $1,000.10 0.40% $ 1.98
Class A Shares ...................... 1,000.00 1,000.10 0.42% 2.08
Class S Shares ...................... 1,000.00 1,000.10 0.42% 2.08
HYPOTHETICAL 5% RETURN
Fiduciary Shares .................... $1,000.00 $1,022.81 0.40% $ 2.01
Class A Shares ...................... 1,000.00 1,022.71 0.42% 2.11
Class S Shares ...................... 1,000.00 1,022.71 0.42% 2.11
- --------------------------------------------------------------------------------------
DIVERSIFIED MONEY MARKET FUND
- --------------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .................... $1,000.00 $1,000.80 0.56% $ 2.78
Class A Shares ...................... 1,000.00 1,000.40 0.73% 3.62
Class S Shares ...................... 1,000.00 1,000.40 0.75% 3.72
HYPOTHETICAL 5% RETURN
Fiduciary Shares .................... $1,000.00 $1,022.02 0.56% $ 2.81
Class A Shares ...................... 1,000.00 1,021.17 0.73% 3.66
Class S Shares ...................... 1,000.00 1,021.08 0.75% 3.76
BEGINNING ENDING NET EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE AT VALUE AT EXPENSE DURING
2/1/10 7/31/10 RATIOS PERIOD*
TREASURY PLUS MONEY MARKET FUND
- --------------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .................... $1,000.00 $1,000.10 0.14% $ 0.69
Class A Shares ...................... 1,000.00 1,000.10 0.16% 0.79
Class S Shares ...................... 1,000.00 1,000.00 0.14% 0.69
HYPOTHETICAL 5% RETURN
Fiduciary Shares .................... $1,000.00 $1,024.10 0.14% $ 0.70
Class A Shares ...................... 1,000.00 1,024.00 0.16% 0.80
Class S Shares ...................... 1,000.00 1,024.10 0.14% 0.70
- --------------------------------------------------------------------------------------
U.S. GOVERNMENT MONEY MARKET FUND
- --------------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .................... $1,000.00 $1,000.20 0.16% $ 0.79
Class A Shares ...................... 1,000.00 1,000.20 0.18% 0.89
Class B Shares ...................... 1,000.00 1,000.20 0.18% 0.89
Class C Shares ...................... 1,000.00 1,000.20 0.18% 0.89
Class S Shares ...................... 1,000.00 1,000.20 0.19% 0.94
HYPOTHETICAL 5% RETURN
Fiduciary Shares .................... $1,000.00 $1,024.00 0.16% $ 0.80
Class A Shares ...................... 1,000.00 1,023.90 0.18% 0.90
Class B Shares ...................... 1,000.00 1,023.90 0.18% 0.90
Class C Shares ...................... 1,000.00 1,023.90 0.18% 0.90
Class S Shares ...................... 1,000.00 1,023.85 0.19% 0.95
4 HIGHMARK(R) FUNDS
BEGINNING ENDING NET EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE AT VALUE AT EXPENSE DURING
2/1/10 7/31/10 RATIOS PERIOD*
- --------------------------------------------------------------------------------------
100% U.S. TREASURY MONEY MARKET FUND
- --------------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .................... $1,000.00 $1,000.00 0.13% $ 0.64
Class A Shares ...................... 1,000.00 1,000.10 0.13% 0.64
Class S Shares ...................... 1,000.00 1,000.10 0.13% 0.64
HYPOTHETICAL 5% RETURN
Fiduciary Shares .................... $1,000.00 $1,024.15 0.13% $ 0.65
Class A Shares ...................... 1,000.00 1,024.15 0.13% 0.65
Class S Shares ...................... 1,000.00 1,024.15 0.13% 0.65
- --------------------
* Expenses are equal to the fund's net annualized expense ratio multiplied
by the average account value over the period, multiplied by 181/365 (to
reflect the one half year period).
SCHEDULE OF INVESTMENTS
JULY 31, 2010
CALIFORNIA TAX-FREE MONEY MARKET FUND
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - 88.3%
- --------------------------------------------------------------------------------
CALIFORNIA - 87.0%
ABAG, Multi-Family Housing
Finance Authority, Non-Profit,
Episcopal Homes Foundation,
COP, LOC Wells Fargo Bank
N.A. (A) (B) (C)
0.220%, 02/01/25 $ 4,920,000 $ 4,920,000
Alameda County, Industrial
Development Authority Revenue,
Ettore Products Company Project,
Ser A, RB, AMT,
LOC Comerica Bank (A) (B) (C)
0.390%, 12/01/30 4,000,000 4,000,000
Azusa, Unified School District,
School Facilities Bridge
Funding Program, COP,
AGM Insured, SPA Dexia Credit
(A) (B) (C)
0.330%, 06/01/38 120,000 120,000
Bay Area Toll Authority, Toll Bridge
Revenue, San Francisco Bay Area,
Ser G-1, RB,
LOC BNP Paribas (A) (B) (C)
0.200%, 04/01/45 5,000,000 5,000,000
California State,
Kindergarten, (A) (B) (C)
Ser B5, GO, LOC Citibank
0.210%, 05/01/34 7,400,000 7,400,000
Sub-Ser B-7, GO,
LOC Landesbank Hessen
0.360%, 05/01/40 11,755,000 11,755,000
California State, Department of
Water Resources, Power
Supply Revenue, (A) (B) (C)
Ser C-08, RB,
LOC Bayerische Landesbank
0.260%, 05/01/22 11,450,000 11,450,000
Ser C-11, RB, LOC KBC Bank NV
0.260%, 05/01/22 11,300,000 11,300,000
California State, Economic Recovery,
GO, (A) (B) (C)
Ser C-15, AGM Insured
SPA Dexia Credit
0.390%, 07/01/23 37,405,000 37,405,000
Ser C-16, AGM Insured
SPA Dexia Credit
0.350%, 07/01/23 4,010,000 4,010,000
California State, Educational Facilities
Authority, (A) (B)
California Institute of Technology, RB
0.210%, 01/01/24 19,000,000 19,000,000
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
University of San Francisco, RB
LOC Allied Irish Bank PLC (C)
2.000%, 05/01/30 $ 15,350,000 $ 15,350,000
2.000%, 05/01/33 4,600,000 4,600,000
California State, Health Facilities
Financing Authority, (A) (B) (C)
Catholic Healthcare, Ser H, RB,
LOC Citibank N.A.
0.230%, 07/01/33 2,000,000 2,000,000
Scripps Health, Ser C, RB,
LOC Barclays Bank PLC
0.200%, 10/01/40 4,000,000 4,000,000
California State, Housing Finance Agency,
Multi-Family Housing, (A) (B) (C)
Ser B, RB, FNMA Insured,
0.290%, 02/01/35 13,800,000 13,800,000
Ser C, RB, AMT
0.250%, 08/01/38 1,900,000 1,900,000
California State, Infrastructure
& Economic Development
Bank Revenue, Southern California
Public Radio Project, RB,
LOC Allied Irish Bank PLC (A) (B) (C)
2.750%, 09/01/25 3,000,000 3,000,000
California State, Municipal Finance
Authority Revenue, Santa Margarita
Catholic School, RB, LOC Allied Irish
Bank PLC (A) (B) (C)
2.950%, 05/01/39 12,000,000 12,000,000
California Statewide, Communities
Development Authority, (A) (B) (C)
Chadwick School, RB,
LOC Allied Irish Bank PLC
2.250%, 10/01/29 7,180,000 7,180,000
Sweep Loan Program,
Ser A, RB, LOC Citibank N.A.
0.230%, 08/01/35 15,000,000 15,000,000
California Transit Finance Authority,
RB, AGM Insured
SPA Dexia Credit (A) (B) (C)
0.300%, 10/01/27 5,000,000 5,000,000
Contra Costa County, Multi-Family
Mortgage Revenue, RB,
FNMA Insured (A) (B) (C)
0.230%, 11/15/22 3,000,000 3,000,000
Elsinore Valley Municipal Water District,
Ser B, COP, LOC Allied Irish
Bank PLC (A) (B) (C)
3.000%, 07/01/35 6,330,000 6,330,000
The accompanying notes are an integral part of the financial statements.
6 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
CALIFORNIA TAX-FREE MONEY MARKET FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
Hesperia Unified School District,
Interim School Facility Funding
Program, COP, AGM Insured,
SPA Dexia Credit (A) (B) (C)
0.500%, 02/01/38 $ 3,000,000 $ 3,000,000
Irvine Ranch Water District, RB,
LOC Bank of America N.A. (A) (B) (C)
0.230%, 08/01/16 2,000,000 2,000,000
Irvine, Improvement Bond Act of 1915,
Limited Obligation Reassessment,
Ser 85-7-A, Special Assessment,
AGM Insured, SPA Dexia
Credit (A) (B) (C)
0.320%, 09/02/32 22,600,000 22,600,000
Livermore, Multi-Family Housing
Authority, Mortgage Portola, RB, AMT,
FHLMC Insured (A) (B) (C)
0.280%, 05/01/19 375,000 375,000
Los Angeles County Housing Authority,
Multi-Family Housing
Authority, (A) (B) (C)
Fountain Park Project, Ser P, RB,
AMT, FNMA Insured
0.260%, 04/15/33 14,500,000 14,500,000
Malibu Meadows II, Ser C, RB,
FNMA Insured
0.220%, 04/15/28 7,000,000 7,000,000
Los Angeles County, TRAN, GO
2.000%, 06/30/11 10,000,000 10,104,017
Los Angeles, Department of
Water & Power, (A) (B) (C)
Power Systems Revenue,
Sub-Ser A-3, RB,
SPA Lloyds TSB Bank PLC
0.200%, 07/01/35 5,000,000 5,000,000
Waterworks Revenue,
Sub-Ser B-4, RB,
SPA Wells Fargo Bank N.A.
0.230%, 07/01/35 8,975,000 8,975,000
Los Angeles, TECP
LOC Barclays Bank (C)
0.300%, 09/09/10 5,000,000 5,000,000
Los Angeles, TRAN, GO
2.000%, 05/31/11 5,000,000 5,049,481
Los Angeles, TRAN, TECP
0.270%, 08/17/10 6,450,000 6,450,000
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
Metropolitan, Water District of
Southern California,
Waterworks Revenue, (A) (B) (C)
Ser A-1, RB
SPA Banco Bilboa Vizcaya Argentaria
0.350%, 07/01/21 $ 12,000,000 $ 12,000,000
Ser B, RB
SPA Landesbank Hessen
0.220%, 07/01/28 16,000,000 15,999,427
Ser B-2, RB
SPA Banco Bilboa Vizcaya Argentaria
0.350%, 07/01/35 8,000,000 8,000,000
Ser C, RB
SPA Landesbank Hessen
0.220%, 07/01/28 9,900,000 9,900,000
Riverside County,
Public Facilities, (A) (B) (C)
Ser A, COP
LOC State Street Bank & Trust Co.
0.250%, 12/01/15 4,100,000 4,100,000
Ser B, COP
0.250%, 12/01/15 2,450,000 2,450,000
Ser D, COP
0.250%, 12/01/15 1,500,000 1,500,000
Riverside County, TRAN, GO, Ser B
2.000%, 06/30/11 10,000,000 10,131,553
Sacramento County, Sanitation
District, Financing Authority,
Subordinate Lien, Ser E, RB,
LOC U.S. Bank N.A. (A) (B) (C)
0.220%, 12/01/40 5,000,000 5,000,000
San Diego County, Regional
Transportation Commission,
Sales Tax Revenue, Ser D, RB,
SPA Dexia Credit Local (A) (B) (C)
0.300%, 04/01/38 7,600,000 7,599,821
San Diego, COP, LOC Allied Irish
Bank PLC (A) (B) (C)
2.150%, 11/01/34 3,755,000 3,755,000
San Francisco City & County, (A) (B) (C)
Airport Commission, International
Airport, Second Series,
Issue 32F, Ser D, RB, AGM Insured,
SPA Dexia Credit
0.350%, 05/01/26 10,515,000 10,515,000
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 7
SCHEDULE OF INVESTMENTS
JULY 31, 2010
CALIFORNIA TAX-FREE MONEY MARKET FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Par/Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
Airports Commission, International
Airport, Ser-A-3, RB,
LOC JPMorgan Chase Bank
0.240%, 05/01/30 $ 4,000,000 $ 4,000,000
Airports Commission, International
Airport, Ser 37D, RB,
AGM Insured, SPA Dexia Credit
0.330%, 05/01/30 5,500,000 5,500,000
Finance Corporation Lease,
Revenue, Moscone Center,
Ser 2008-2, RB,
LOC State Street Bank & Trust Co.
0.220%, 04/01/30 5,575,000 5,575,000
San Gabriel Valley, TECP
LOC Landesbank Hessen
0.360%, 08/17/10 9,850,000 9,850,000
Santa Clara County, El Camino
Hospital District Lease Authority,
Valley Medical Center Project,
Ser A, RB, LOC State Street
Bank & Trust Co. (A) (B) (C)
0.250%, 08/01/15 550,000 550,000
Santa Cruz County, TRAN, GO
2.000%, 06/30/11 4,000,000 4,054,450
University of California, TECP
0.300%, 08/12/10 16,000,000 16,000,000
Vallejo, Multi-Family Housing
Authority, RB,
FNMA Insured (A) (B) (C)
0.280%, 05/15/22 4,000,000 4,000,000
Vallejo, Water Revenue, Ser A, RB,
LOC JPMorgan Chase
Bank (A) (B) (C)
0.300%, 06/01/31 12,790,000 12,790,000
Whittier, Healthcare Facilities,
Presbyterian Intercommunity,
Ser B, RB,
LOC U.S. Bank N.A. (A) (B) (C)
0.200%, 06/01/36 2,800,000 2,800,000
------------
455,643,749
------------
ILLINOIS - 1.3%
Chicago, Ser F, GO,
LOC Banco Bilbao Vizcaya (A) (B) (C)
0.330%, 01/01/42 7,100,000 7,100,000
TOTAL MUNICIPAL BONDS
(Cost $462,743,749) 462,743,749
------------
- --------------------------------------------------------------------------------
Description Par/Shares Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANIES - 0.0%
- --------------------------------------------------------------------------------
BlackRock Liquidity Funds,
California Money Fund $ 15,947 $ 15,947
Goldman Sachs Institutional Liquid
Assets Tax Exempt
California Portfolio 6,450 6,450
------------
TOTAL REGISTERED INVESTMENT COMPANIES
(Cost $22,397) 22,397
------------
TOTAL INVESTMENTS - 88.3%
(Cost $462,766,146) * 462,766,146
------------
OTHER ASSETS & LIABILITIES, NET - 11.7% 61,097,932
------------
NET ASSETS - 100.0% $523,864,078
============
* AT JULY 31, 2010, COST IS IDENTICAL FOR BOOK AND FEDERAL INCOME TAX
PURPOSES.
(A) FLOATING RATE SECURITY. RATE DISCLOSED IS AS OF JULY 31, 2010.
(B) PUT AND DEMAND FEATURE - VARIABLE RATE DEMAND NOTES ARE PAYABLE UPON
DEMAND. PUT BONDS AND NOTES HAVE DEMAND FEATURES THAT ALLOW THE HOLDER TO
REDEEM THE ISSUE AT SPECIFIED DATES BEFORE MATURITY. THE DATE REPORTED IS
THE FINAL MATURITY, NOT THE NEXT RESET OR PUT DATE. THE INTEREST RATE
SHOWN REFLECTS THE RATE IN EFFECT ON JULY 31, 2010.
(C) SECURITIES ARE HELD IN CONJUNCTION WITH A GUARANTEE/LETTER OF CREDIT
AND/OR A LIQUIDITY AGREEMENT BY A MAJOR COMMERCIAL BANK OR FINANCIAL
INSTITUTION.
ABAG - ASSOCIATION OF BAY AREA GOVERNMENTS
AGM - ASSURED GUARANTY MUNICIPAL CORPORATION (FORMERLY KNOWN AS FINANCIAL
SECURITY ASSURANCE)
AMT - ALTERNATIVE MINIMUM TAX
COP - CERTIFICATES OF PARTICIPATION
FHLMC - FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA - FEDERAL NATIONAL MORTGAGE ASSOCIATION
GO - GENERAL OBLIGATION
LOC - LETTER OF CREDIT
PLC - PUBLIC LIABILITY COMPANY
RB - REVENUE BOND
SER - SERIES
SPA - STANDBY PURCHASE AGREEMENT
TECP - TAX-EXEMPT COMMERCIAL PAPER
TRAN - TAX AND REVENUE ANTICIPATION NOTE
The accompanying notes are an integral part of the financial statements.
8 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
CALIFORNIA TAX-FREE MONEY MARKET FUND (CONCLUDED)
A summary of the inputs used to value the Fund's net assets as of July 31, 2010
is as follows (see Note 2 -- significant accounting policies in the notes to
financial statements):
LEVEL 2 LEVEL 3
TOTAL FAIR LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
07/31/10 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Municipal Bonds $462,743,749 $ -- $462,743,749 $ --
Registered Investment
Companies 22,397 22,397 -- --
------------ ------------ ------------ ------------
Total: $462,766,146 $ 22,397 $462,743,749 $ --
============ ============ ============ ============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 9
SCHEDULE OF INVESTMENTS
JULY 31, 2010
DIVERSIFIED MONEY MARKET FUND
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMERCIAL PAPER - DISCOUNTED* - 52.0%
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES - AUTOMOBILE - 9.5% (A)
Giro Balanced Funding Corp.
0.500%, 08/03/10 $120,000,000 $ 119,996,667
Silver Tower U.S. Funding
1.055%, 08/30/10 125,000,000 124,894,271
---------------
TOTAL ASSET-BACKED SECURITIES - AUTOMOBILE
(Cost $244,890,938) 244,890,938
---------------
ASSET-BACKED SECURITIES - CREDIT CARD - 5.0% (A)
White Point Funding Inc.
0.601%, 08/03/10 50,132,000 50,130,329
0.550%, 08/09/10 25,000,000 24,996,944
0.601%, 08/26/10 52,007,000 51,985,331
---------------
TOTAL ASSET-BACKED SECURITIES - CREDIT CARD
(Cost $127,112,604) 127,112,604
---------------
ASSET-BACKED SECURITIES - DIVERSIFIED FINANCIAL ASSETS - 9.5% (A)
Belmont Funding LLC
0.550%, 08/06/10 125,000,000 124,990,451
Ebbets Funding LLC
0.550%, 08/03/10 120,000,000 119,996,333
---------------
TOTAL ASSET-BACKED SECURITIES -
DIVERSIFIED FINANCIAL ASSETS
(Cost $244,986,784) 244,986,784
---------------
ASSET-BACKED SECURITIES - GOVERNMENT - 4.7% (A)
Govco LLC
0.501%, 08/16/10 50,000,000 49,989,583
0.531%, 08/23/10 70,000,000 69,977,328
---------------
TOTAL ASSET-BACKED SECURITIES - GOVERNMENT
(Cost $119,966,911) 119,966,911
---------------
ASSET-BACKED SECURITIES - TRADE RECEIVABLES - 5.6% (A)
Autobahn Funding Co. LLC
0.260%, 08/02/10 40,000,000 39,999,711
Romulus Funding Corp.
0.320%, 08/02/10 39,000,000 38,999,653
Sydney Capital Corp.
0.621%, 08/16/10 17,000,000 16,995,608
0.621%, 08/25/10 48,000,000 47,980,160
---------------
TOTAL ASSET-BACKED SECURITIES -
TRADE RECEIVABLES
(Cost $143,975,132) 143,975,132
---------------
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMERCIAL PAPER - DISCOUNTED* - (CONTINUED)
- --------------------------------------------------------------------------------
BANKING - 12.8%
Beethoven Funding Corp.
0.420%, 08/06/10 (A) $ 87,160,000 $ 87,154,916
Louis Dreyfus Corp. LOC: Calyon
0.280%, 08/02/10 120,000,000 119,999,067
PB Finance (Delaware)
1.002%, 08/03/10 (A) 95,000,000 94,994,722
1.002%, 08/04/10 (A) 25,000,000 24,997,917
---------------
TOTAL BANKING
(Cost $327,146,622) 327,146,622
---------------
OIL-INTEGRATED - 4.9% (A)
BP Capital Markets PLC
0.500%, 08/02/10 125,500,000 125,498,257
---------------
TOTAL OIL-INTEGRATED
(Cost $125,498,257) 125,498,257
---------------
TOTAL COMMERCIAL PAPER - DISCOUNTED
(Cost $1,333,577,248) 1,333,577,248
---------------
- --------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT - YANKEE - 34.5%
- --------------------------------------------------------------------------------
Allied Irish Banks PLC NY,
Government of Ireland Guaranteed
1.499%, 09/27/10 (B) 40,000,000 40,000,000
1.336%, 11/29/10 (B) 80,000,000 80,000,000
Banco Santander NY
1.160%, 01/14/11 120,000,000 120,005,501
Bank of Ireland CT,
Government of Ireland Guaranteed
1.479%, 09/24/10 (B) 50,000,000 50,000,000
1.175%, 04/28/11 (B) 75,000,000 75,000,000
Credit Suisse NY
0.428%, 12/03/10 (B) 50,000,000 50,000,000
Dexia Credit Local SA NY
0.440%, 08/04/10 120,000,000 120,000,000
Natixis NY
0.818%, 04/21/11 (B) 50,000,000 50,000,000
1.045%, 07/11/11 (B) 75,000,000 75,000,000
Societe Generale NY
0.418%, 12/03/10 (B) 150,000,000 150,000,000
UBS AG CT
0.791%, 12/16/10 (B) 75,000,000 75,000,000
---------------
TOTAL CERTIFICATES OF DEPOSIT - YANKEE
(Cost $885,005,501) 885,005,501
---------------
The accompanying notes are an integral part of the financial statements.
10 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
DIVERSIFIED MONEY MARKET FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - 9.7%
- --------------------------------------------------------------------------------
BANKING - 9.7%
Bank of Montreal Chicago,
MTN (A) (C)
0.888%, 08/05/11 $150,000,000 $ 150,000,000
Credit Agricole London,
MTN (A) (C)
0.808%, 07/22/11 100,000,000 100,000,000
---------------
TOTAL CORPORATE OBLIGATIONS
(Cost $250,000,000) 250,000,000
---------------
- --------------------------------------------------------------------------------
FOREIGN BANK NOTE - 1.9%
- --------------------------------------------------------------------------------
BANKING - 1.9%
Westpac Banking Corp. (A) (C)
0.398%, 08/04/11 50,000,000 50,000,000
---------------
TOTAL FOREIGN BANK NOTE
(Cost $50,000,000) 50,000,000
---------------
- --------------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES - 0.4%
- --------------------------------------------------------------------------------
BANKING - 0.4% (D)
Albany NY, Industrial Development
Agency, Civic Facility Revenue,
St. Rose, Ser B, RB, National-RE Insured,
LOC: Bank of America
0.300%, 07/01/31 5,850,000 5,850,000
Washington State, Housing Finance
Commission, Multi-Family Housing,
The Lodge at Eagle Ridge,
Ser B, RB, LOC: Bank of America
0.300%, 08/01/41 3,425,000 3,425,000
---------------
TOTAL VARIABLE RATE DEMAND NOTES
(Cost $9,275,000) 9,275,000
---------------
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 1.5%
- --------------------------------------------------------------------------------
Credit Suisse Securities (USA)
0.200%, dated 07/30/10,
matures on 08/02/10,
repurchase price $38,242,571
(collateralized by a U.S. Treasury
Note Obligation, par value
$38,755,000, 0.875%, 04/30/11,
total market value $39,009,763) $ 38,241,934 $ 38,241,934
---------------
TOTAL REPURCHASE AGREEMENT
(Cost $38,241,934) 38,241,934
---------------
TOTAL INVESTMENTS - 100.0%
(Cost $2,566,099,683) ** 2,566,099,683
---------------
OTHER ASSETS & LIABILITIES, NET - (0.0)%
(967,826)
---------------
NET ASSETS - 100.0% $ 2,565,131,857
===============
- -------------------------------------------------------------------------------
* RATE SHOWN REPRESENTS THE MONEY MARKET EQUIVALENT YIELD TO MATURITY AT
PURCHASE.
** AT JULY 31, 2010, COST IS IDENTICAL FOR BOOK AND FEDERAL INCOME TAX
PURPOSES.
(A) SECURITIES SOLD WITHIN THE TERMS OF A PRIVATE PLACEMENT MEMORANDUM, EXEMPT
FROM REGISTRATION UNDER SECTION 3(A), 4(2) OR RULE 144A OF THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY BE SOLD ONLY TO THE DEALERS IN THAT
PROGRAM OR OTHER "ACCREDITED INVESTORS." THE VALUE OF THESE SECURITIES AS
OF JULY 31, 2010 WAS $1,513,578,181 AND REPRESENTED 59.0% OF NET ASSETS.
(B) VARIABLE RATE SECURITY WHOSE INTEREST RATE IS RESET PERIODICALLY BASED ON
AN INDEX. THE RATE REFLECTED IS THE RATE IN EFFECT ON JULY 31, 2010. THE
DATE REPORTED IS THE FINAL MATURITY.
(C) VARIABLE RATE/EXTENDABLE SECURITY - THE RATE REFLECTED IS THE RATE IN
EFFECT ON JULY 31, 2010. THE MATURITY DATE REFLECTS THE NEXT DATE ON WHICH
THE PRINCIPAL CAN BE RECOVERED.
(D) DEMAND FEATURE - THE ADJUSTABLE RATE REFLECTED IS THE RATE IN EFFECT ON
JULY 31, 2010. THE DATE REPORTED IS THE FINAL MATURITY, NOT THE DATE ON
WHICH PRINCIPAL COULD BE RECOVERED.
CT - CONNECTICUT
LLC - LIMITED LIABILITY COMPANY
LOC - LETTER OF CREDIT
MTN - MEDIUM TERM NOTE
NY - NEW YORK
PLC - PUBLIC LIABILITY COMPANY
RB - REVENUE BOND
SER - SERIES
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 11
SCHEDULE OF INVESTMENTS
JULY 31, 2010
DIVERSIFIED MONEY MARKET FUND (CONCLUDED)
A summary of the inputs used to value the Fund's net assets as of July 31, 2010
is as follows (see Note 2 - significant accounting policies in the notes to
financial statements):
LEVEL 2 LEVEL 3
TOTAL FAIR LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
07/31/10 PRICE INPUTS INPUTS
-------------- --------- -------------- ------------
Investments in Securities * $2,566,099,683 $ -- $2,566,099,683 $ --
============== ========= ============== ============
* See schedule of investments detail for security type breakout.
The accompanying notes are an integral part of the financial statements.
12 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
TREASURY PLUS MONEY MARKET FUND
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
U.S. GOVERNMENT GUARANTEED OBLIGATION* - 3.7%
- --------------------------------------------------------------------------------
Straight-A Funding, Series 1, FFBLL
0.345%, 09/27/10 (A) $ 7,000,000 $ 6,996,232
------------
TOTAL U.S. GOVERNMENT
GUARANTEED OBLIGATION
(Cost $6,996,232) 6,996,232
------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 96.3%
- --------------------------------------------------------------------------------
Barclays Capital
0.21%, dated 07/30/10, matures on
08/02/10, repurchase price $88,420,047
(collateralized by various U.S. Treasury
Notes, ranging in par value from
$34,773,500 - 53,260,700, 1.375% - 3.125%,
02/15/13 - 05/15/19, total market value
$90,186,946) 88,418,500 88,418,500
Credit Suisse Securities (USA)
0.20%, dated 07/30/10,
matures on 08/02/10,
repurchase price $46,000,767
(collateralized by a U.S. Treasury
Note, par value $46,615,000,
0.875%, 04/30/11, total market
value $46,921,432) 46,000,000 46,000,000
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - (CONTINUED)
- --------------------------------------------------------------------------------
Deutsche Bank Securities
0.20%, dated 07/30/10,
matures on 08/02/10,
repurchase price $46,000,767
(collateralized by a U.S. Treasury Bill,
par value $46,931,700,
0.000%, 09/23/10, total market
value $46,920,014) $ 46,000,000 $ 46,000,000
------------
TOTAL REPURCHASE AGREEMENTS
(Cost $180,418,500) 180,418,500
------------
TOTAL INVESTMENTS - 100.0%
(Cost $187,414,732) ** 187,414,732
------------
OTHER ASSETS & LIABILITIES, NET - (0.0)% (36,775)
------------
NET ASSETS - 100.0% $187,377,957
============
- --------------------------------------------------------------------------------
* RATE SHOWN REPRESENTS THE MONEY MARKET EQUIVALENT YIELD TO MATURITY AT
PURCHASE.
** AT JULY 31, 2010, COST IS IDENTICAL FOR BOOK AND FEDERAL INCOME TAX
PURPOSES.
(A) SECURITY SOLD WITHIN THE TERMS OF A PRIVATE PLACEMENT MEMORANDUM, EXEMPT
FROM REGISTRATION UNDER SECTION 3(A), 4(2) OR RULE 144A OF THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY BE SOLD ONLY TO THE DEALERS IN THAT
PROGRAM OR OTHER "ACCREDITED INVESTORS." THE VALUE OF THESE SECURITIES AS
OF JULY 31, 2010 WAS $6,996,232 AND REPRESENTED 3.7% OF NET ASSETS.
FFBLL - FEDERAL FINANCING BANK LIQUIDITY LOAN
A summary of the inputs used to value the Fund's net assets as of July 31, 2010
is as follows (see Note 2 - significant accounting policies in notes to
financial statements):
LEVEL 2 LEVEL 3
TOTAL FAIR LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
07/31/10 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Investments in Securities* $187,414,732 $ -- $187,414,732 $ --
============ ============ ============ ============
* See schedule of investments detail for security type breakout.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 13
SCHEDULE OF INVESTMENTS
JULY 31, 2010
U.S. GOVERNMENT MONEY MARKET FUND
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 20.8%
- --------------------------------------------------------------------------------
FFCB
0.431%, 05/18/11 (A) $ 50,000,000 $ 50,004,228
0.271%, 05/19/11 (A) 50,000,000 49,991,907
0.428%, 07/20/11 (A) 30,000,000 30,000,000
FHLB
0.251%, 08/01/11 (A) 30,000,000 29,989,432
FHLMC
0.464%, 08/24/10 (A) 25,000,000 24,999,868
0.299%, 09/26/11 (A) 25,000,000 24,985,420
FNMA
0.253%, 08/11/11 (A) 30,000,000 29,987,554
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $239,958,409) 239,958,409
------------
- --------------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES - 15.6%
- --------------------------------------------------------------------------------
California, Milpitas Multi-Family
Housing Revenue Crossing, Ser A, RB
Guarantee: FNMA (B)
0.300%, 08/15/33 4,800,000 4,800,000
California, Sacramento County,
Multi-Family Housing Development
Authority, Deer Park Apartments, RB
Guarantee: FNMA (B)
0.320%, 07/15/35 1,350,000 1,350,000
California, San Francisco, City &
County Redevelopment, Ser D, RB
Guarantee: FNMA (B)
0.300%, 06/15/34 26,050,000 26,050,000
California, Simi Valley, Multi-Family
Housing Revenue, Parker Ranch, RB
Guarantee: FNMA (B)
0.330%, 07/15/36 1,250,000 1,250,000
California, Statewide Community
Development Authority,
Palms Apartments, Ser C, RB
Guarantee: FNMA (B)
0.300%, 05/15/35 3,810,000 3,810,000
Goldleaf Mortgage, Ser 2007A
Guarantee: FHLB (B)
0.360%, 11/01/37 14,305,000 14,305,000
New York City Housing Development,
Multi-Family Mortgage Revenue,
Pearl Street Development, Ser B, RB
Guarantee: FNMA (B)
0.310%, 10/15/41 14,225,000 14,225,000
New York City Housing Development,
Multi-Family Rent Housing Revenue, (B)
Gold Street, Ser B, RB
Guarantee: FNMA
0.310%, 04/15/36 2,570,000 2,570,000
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES - (CONTINUED)
- --------------------------------------------------------------------------------
Nicole, Ser B, RB
Guarantee: FNMA
0.300%, 11/15/35 $ 5,470,000 $ 5,470,000
West Street, Ser B, RB
Guarantee: FNMA
0.310%, 03/15/36 7,100,000 7,100,000
Westport Development, Ser B, RB
Guarantee: FNMA
0.300%, 06/15/34 6,800,000 6,800,000
New York State, Dormitory
Authority Revenue, Ser B, RB
Guarantee: FNMA (B)
0.300%, 11/15/36 20,540,000 20,540,000
New York State, Housing Finance
Agency Revenue, (B)
11th Avenue Housing, Ser B, RB
Guarantee: FNMA
0.310%, 05/15/41 5,100,000 5,100,000
38th Street, Ser B, RB
Guarantee: FNMA
0.300%, 05/15/33 10,900,000 10,900,000
Biltmore Tower Housing, Ser B, RB
Guarantee: FNMA
0.310%, 05/15/34 1,540,000 1,540,000
Chelsea Apartments, Ser B, RB
Guarantee: FNMA
0.300%, 11/15/36 2,000,000 2,000,000
North End, Ser B, RB
Guarantee: FNMA
0.310%, 11/15/36 2,500,000 2,500,000
Ser B, RB
Guarantee: FNMA
0.310%, 05/15/33 14,600,000 14,600,000
Tower 31 Housing, Ser A, RB
Guarantee: FHLMC
0.310%, 11/01/36 3,700,000 3,700,000
Victory Housing 2000, Ser B, RB
Guarantee: FHLMC
0.310%, 11/01/33 1,100,000 1,100,000
West 33rd Street, Ser B, RB
Guarantee: FNMA
0.300%, 11/15/36 5,400,000 5,400,000
Pennsylvania, Montgomery County,
Redevelopment Authority,
Kingswood Apartments Project,
Ser A, RB
Guarantee: FNMA (B)
0.280%, 08/15/31 6,705,000 6,705,000
The accompanying notes are an integral part of the financial statements.
14 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
U.S. GOVERNMENT MONEY MARKET FUND (CONTINUED)
- -----------------------------------------------------------------------------------
Description Par Value
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES - (CONTINUED)
- -----------------------------------------------------------------------------------
Virginia, Chesapeake,
Redevelopment & Housing
Authority, Multi-Family Housing
Revenue, Alta Great Bridge, Ser A, RB
Guarantee: FNMA (B)
0.320%, 01/15/41 $ 2,100,000 $ 2,100,000
Washington State Housing Finance
Commission, Multi-Family
Housing Revenue, (B)
Ballard Landmark, Ser B, RB
Guarantee: FNMA
0.320%, 12/15/41 3,510,000 3,510,000
Bridgewood Project, Ser B, RB
Guarantee: FNMA
0.320%, 09/01/34 3,340,000 3,340,000
Highland Park Apartments, Ser B, RB
Guarantee: FNMA
0.330%, 07/15/38 1,960,000 1,960,000
Pinehurst Apartments Project,
Ser B, RB
Guarantee: FNMA
0.330%, 03/15/39 1,780,000 1,780,000
Ranier Court Project, Ser B, RB
Guarantee: FNMA
0.300%, 12/15/36 3,525,000 3,525,000
Rolling Hills Project, Ser B, RB
Guarantee: FNMA
0.320%, 06/15/37 2,225,000 2,225,000
--------------
TOTAL VARIABLE RATE DEMAND NOTES
(Cost $180,255,000) 180,255,000
--------------
- -----------------------------------------------------------------------------------
U.S. GOVERNMENT GUARANTEED OBLIGATION* - 5.2%
- -----------------------------------------------------------------------------------
Straight-A Funding, Series 1, FFBLL (C)
0.355%, 09/27/10 60,000,000 59,966,750
--------------
TOTAL U.S. GOVERNMENT
GUARANTEED OBLIGATION
(Cost $59,966,750) 59,966,750
--------------
- -----------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 58.4%
- -----------------------------------------------------------------------------------
Barclays Capital
0.210%, dated 07/30/10,
matures on 08/02/10,
repurchase price $275,004,812
(collateralized by various
U.S. Treasury Note obligations,
ranging in par value from
$56,595,100 - $208,667,200,
1.125% - 3.625%, 12/15/11 -
02/15/20, total market value
$280,500,094) 275,000,000 275,000,000
- -----------------------------------------------------------------------------------
Description Par Value
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - (CONTINUED)
- -----------------------------------------------------------------------------------
Credit Suisse Securities (USA)
0.210%, dated 07/30/10, matures
on 08/02/10, repurchase price
$285,758,753 (collateralized
by various U.S. agency obligations,
ranging in par value from
$16,225,000 - $250,000,000,
0.000%, 10/25/10 - 02/22/11,
total market value
$291,469,683) $ 285,753,752 $ 285,753,752
Deutsche Bank Securities
0.200%, dated 07/30/10,
matures on 08/02/10, repurchase
price $56,000,933 (collateralized
by various U.S. agency obligations,
ranging in par value from
$6,112,000 - $27,929,000,
0.000% - 3.250%, 10/27/10 -
04/09/13, total market value
$57,120,954) 56,000,000 56,000,000
Goldman Sachs
0.200%, dated 07/30/10,
matures on 08/02/10, repurchase
price $56,000,933 (collateralized
by various U.S. agency obligations,
ranging in par value from
$4,279,000 - $14,496,000,
4.500% - 5.450%,
04/25/17 - 02/22/40, total market
value $57,120,517) 56,000,000 56,000,000
--------------
TOTAL REPURCHASE AGREEMENTS
(Cost $672,753,752) 672,753,752
--------------
TOTAL INVESTMENTS - 100.0%
(Cost $1,152,933,911) ** 1,152,933,911
--------------
OTHER ASSETS & LIABILITIES, NET - (0.0)% (147,084)
--------------
NET ASSETS - 100.0% $1,152,786,827
==============
- --------------------------------------------------------------------------------
* RATE SHOWN REPRESENTS THE MONEY MARKET EQUIVALENT YIELD TO
MATURITY AT PURCHASE.
** AT JULY 31, 2010, COST IS IDENTICAL FOR BOOK AND FEDERAL INCOME TAX
PURPOSES.
(A) VARIABLE RATE SECURITY WHOSE INTEREST RATE IS RESET PERIODICALLY BASED
ON AN INDEX. THE RATE REFLECTED IS THE RATE IN EFFECT ON JULY 31, 2010.
THE DATE REPORTED IS THE FINAL MATURITY.
(B) DEMAND FEATURE - RATE SHOWN IS AS OF REPORT DATE AND MATURITIES SHOWN
ARE THE FINAL MATURITIES, NOT THE DATE ON WHICH PRINCIPAL COULD BE
RECOVERED THROUGH THE DEMAND FEATURE.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 15
SCHEDULE OF INVESTMENTS
JULY 31, 2010
U.S. GOVERNMENT MONEY MARKET FUND (CONCLUDED)
(C) SECURITIES SOLD WITHIN THE TERMS OF A PRIVATE PLACEMENT MEMORANDUM, EXEMPT
FROM REGISTRATION UNDER SECTION 3(A), 4(2) OR RULE 144A OF THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY BE SOLD ONLY TO THE DEALERS IN THAT
PROGRAM OR OTHER "ACCREDITED INVESTORS." THE TOTAL VALUE OF THESE
SECURITIES AS OF JULY 31, 2010 WAS $59,966,750 AND REPRESENTED 5.2% OF NET
ASSETS.
FFBLL - FEDERAL FINANCING BANK LIQUIDITY LOAN
FFCB - FEDERAL FARM CREDIT BANK
FHLB - FEDERAL HOME LOAN BANK
FHLMC - FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA - FEDERAL NATIONAL MORTGAGE ASSOCIATION
RB - REVENUE BOND
SER - SERIES
A summary of the inputs used to value the Fund's net assets as of July 31, 2010
is as follows (see Note 2 - significant accounting policies in notes to
financial statements):
LEVEL 2 LEVEL 3
TOTAL FAIR LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
07/31/10 PRICE INPUTS INPUTS
-------------- ------------ --------------- ------------
Investments in Securities * $1,152,933,911 $ -- $ 1,152,933,911 $ --
============== ============ =============== ============
* See schedule of investments detail for security type breakout.
The accompanying notes are an integral part of the financial statements.
16 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2010
100% U.S. TREASURY MONEY MARKET FUND
- --------------------------------------------------------------------------------
Description Par Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
U.S. TREASURY BILLS* - 100.0%
- --------------------------------------------------------------------------------
U.S. Treasury Bills
0.158%, 08/05/10 $ 57,182,000 $ 57,181,009
0.136%, 08/19/10 250,000,000 249,983,250
0.157%, 08/26/10 216,601,000 216,577,699
0.162%, 09/09/10 125,000,000 124,978,333
0.162%, 09/16/10 75,000,000 74,984,667
0.158%, 09/23/10 151,850,000 151,815,120
------------
TOTAL U.S. TREASURY BILLS
(Cost $875,520,078) 875,520,078
------------
TOTAL INVESTMENTS - 100.0%
(Cost $875,520,078) ** 875,520,078
------------
OTHER ASSETS & LIABILITIES, NET - (0.0)% (136,869)
------------
NET ASSETS - 100.0% $875,383,209
============
- --------------------------------------------------------------------------------
* RATE SHOWN REPRESENTS THE BOND EQUIVALENT YIELD TO MATURITY AT PURCHASE.
** AT JULY 31, 2010, COST IS IDENTICAL FOR BOOK AND FEDERAL INCOME TAX
PURPOSES.
A summary of the inputs used to value the Fund's net assets as of July 31, 2010
is as follows (see Note 2 - significant accounting policies in notes to
financial statements):
LEVEL 2 LEVEL 3
TOTAL FAIR LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
07/31/10 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
U.S. Treasury Bills $875,520,078 $ -- $875,520,078 $ --
============ ============ ============ ============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 17
This Page Left Blank Intentionally.
18 HIGHMARK(R) FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
JULY 31, 2010
CALIFORNIA U.S. 100% U.S.
TAX-FREE DIVERSIFIED TREASURY GOVERNMENT TREASURY
MONEY MONEY PLUS MONEY MONEY MONEY
MARKET MARKET MARKET MARKET MARKET
FUND FUND FUND FUND FUND
------------ -------------- ------------ --------------- ------------
ASSETS:
Investments, at Value + ............................ $462,766,146 $2,527,857,749 $ 6,996,232 $ 480,180,159 $875,520,078
Repurchase Agreements, at Value + .................. -- 38,241,934 180,418,500 672,753,752 --
Receivable for Investments Sold .................... 61,106,676 -- -- -- --
Receivable for Fund Shares Sold .................... -- 562,134 -- 1,525 10,367
Accrued Income ..................................... 287,587 652,207 2,054 89,843 --
Prepaid Expenses ................................... 21,179 83,833 12,376 55,622 38,973
Deferred Compensation .............................. 36,263 154,835 9,977 65,609 49,834
------------ -------------- ------------ --------------- ------------
TOTAL ASSETS ..................................... 524,217,851 2,567,552,692 187,439,139 1,153,146,510 875,619,252
============ ============== ============ =============== ============
LIABILITIES:
Payable for Fund Shares Redeemed ................... -- 675,485 -- -- 44,011
Income Distribution Payable ........................ 4,189 186,527 3,912 36,841 3,415
Due to Custodian ................................... -- -- -- -- 556
Investment Adviser Fees Payable .................... 126,070 657,525 -- 9,994 6,500
Administration Fees Payable ........................ 76,997 328,761 7,313 134,812 44,148
Chief Compliance Officer Fees Payable .............. 1,038 1,038 1,038 1,038 1,038
Custodian Fees Payable ............................. 3,208 13,698 883 5,805 4,409
Audit Fees Payable ................................. 25,560 34,906 25,001 28,708 27,241
Deferred Compensation Payable ...................... 36,263 154,835 9,977 65,609 49,834
Shareholder Servicing Fees Payable ................. 22,212 101,252 -- -- --
Transfer Agent Fees Payable ........................ 9,694 38,780 2,958 16,960 11,120
Printing Fees Payable .............................. 28,415 116,778 6,356 39,274 28,597
Trustees Fees Payable .............................. 5,687 20,441 667 5,449 4,290
Accrued Distribution Fees .......................... 1,847 48,786 -- -- --
Accrued Expenses and Other Payables ................ 12,593 42,023 3,077 15,193 10,884
------------ -------------- ------------ --------------- ------------
TOTAL LIABILITIES ................................ 353,773 2,420,835 61,182 359,683 236,043
------------ -------------- ------------ --------------- ------------
NET ASSETS ..................................... $523,864,078 $2,565,131,857 $187,377,957 $ 1,152,786,827 $875,383,209
============ ============== ============ =============== ============
NET ASSETS:
Paid-in Capital (unlimited authorized - no
par value) ....................................... $523,814,149 $2,565,053,346 $187,377,782 $ 1,152,803,409 $875,566,070
Undistributed Net Investment Income ................ 49,929 78,511 175 -- --
Accumulated Net Realized Gain (Loss) on
Investments ...................................... -- -- -- (16,582) (182,861)
------------ -------------- ------------ --------------- ------------
NET ASSETS ..................................... $523,864,078 $2,565,131,857 $187,377,957 $ 1,152,786,827 $875,383,209
============ ============== ============ =============== ============
+ Cost of Investments and Repurchase
Agreements ....................................... $462,766,146 $2,566,099,683 $187,414,732 $ 1,152,933,911 $875,520,078
Amounts designated as "--" are either not applicable or less than $1.00.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 19
STATEMENTS OF ASSETS AND LIABILITIES
JULY 31, 2010
CALIFORNIA U.S. 100% U.S.
TAX-FREE DIVERSIFIED TREASURY GOVERNMENT TREASURY
MONEY MONEY PLUS MONEY MONEY MONEY
MARKET MARKET MARKET MARKET MARKET
FUND FUND FUND FUND FUND
------------ -------------- ------------ --------------- ------------
FIDUCIARY SHARES:
Net Assets ......................................... $200,245,277 $1,932,701,972 $172,705,945 $ 932,369,507 $405,744,515
Shares of beneficial interest outstanding .......... 200,227,914 1,932,658,314 172,705,945 932,391,768 405,847,798
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE .................................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============ ============== ============ =============== ============
CLASS A SHARES:
Net Assets ......................................... $299,723,700 $ 450,044,731 $ 14,672,011 $ 40,888,122 $144,867,304
Shares of beneficial interest outstanding .......... 299,698,714 450,017,418 14,672,011 40,889,812 144,918,596
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE .................................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============ ============== ============ =============== ============
CLASS B SHARES:
Net Assets ......................................... $ -- $ -- $ -- $ 174,901 $ --
Shares of beneficial interest outstanding .......... -- -- -- 174,906 --
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE (A) ................................ $ N/A $ N/A $ N/A $ 1.00 $ N/A
============ ============== ============ =============== ============
CLASS C SHARES:
Net Assets ......................................... $ N/A $ N/A $ N/A $ 320,794 $ --
Shares of beneficial interest outstanding .......... N/A N/A N/A 320,799 --
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE (A) ................................ $ N/A $ N/A $ N/A $ 1.00 $ N/A
============ ============== ============ =============== ============
CLASS S SHARES:
Net Assets ......................................... $ 23,895,101 $ 182,385,154 $ 1 $ 179,033,503 $324,771,390
Shares of beneficial interest outstanding .......... 23,893,601 182,377,728 1 179,037,411 324,801,255
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE .................................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============ ============== ============ =============== ============
N/A Not applicable.
(A) Class B and Class C Shares have contingent deferred sales charges (see Note
3 in the notes to financial statements).
Amounts designated as "--" are either not applicable or less than $1.00.
The accompanying notes are an integral part of the financial statements.
20 HIGHMARK(R) FUNDS
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JULY 31, 2010
CALIFORNIA U.S. 100% U.S.
TAX-FREE DIVERSIFIED TREASURY GOVERNMENT TREASURY
MONEY MONEY PLUS MONEY MONEY MONEY
MARKET MARKET MARKET MARKET MARKET
FUND FUND FUND FUND FUND
------------ -------------- ------------ --------------- ------------
Interest Income ....................................... $ 2,997,435 $ 24,107,878 $ 333,105 $ 2,581,896 $ 1,109,107
Dividend Income ....................................... 4,580 -- -- -- --
------------ -------------- ------------ --------------- ------------
Total Investment Income ........................ 3,002,015 24,107,878 333,105 2,581,896 1,109,107
------------ -------------- ------------ --------------- ------------
Expenses:
Investment Adviser Fees ............................ 2,058,645 8,767,809 523,803 3,239,827 2,274,398
Shareholder Servicing Fees Fiduciary Shares ........ 626,927 5,222,774 413,061 2,195,971 1,139,464
Shareholder Servicing Fees Class A Shares .......... 1,015,322 1,557,318 23,442 121,568 375,358
Shareholder Servicing Fees Class B Shares .......... -- -- -- 546 --
Administration Fees ................................ 1,026,763 4,373,802 261,370 1,616,590 1,134,797
Custodian Fees ..................................... 42,991 182,663 10,913 67,497 47,383
Trustees Fees ...................................... 46,753 178,782 9,932 60,201 43,442
Chief Compliance Officer Fees ...................... 7,052 7,052 7,052 7,052 7,052
Distribution Fees Class A Shares ................... 1,015,322 1,557,318 23,442 121,568 375,358
Distribution Fees Class B Shares ................... -- -- -- 1,636 --
Distribution Fees Class C Shares ................... -- -- -- 2,139 --
Distribution Fees Class S Shares ................... 161,234 1,158,115 -- 838,326 837,121
Registration Fees .................................. 15,897 48,108 13,793 59,982 38,401
Transfer Agent Fees ................................ 93,256 378,567 24,801 149,521 103,604
Printing Fees ...................................... 109,778 445,700 24,706 153,587 107,375
Audit Fees ......................................... 27,346 44,237 25,069 31,259 29,160
Legal Fees ......................................... 64,966 281,226 16,622 100,421 71,189
Money Market Government Insurance
Expense (Note 7) ................................. 65,130 188,855 1 38,945 40,634
Miscellaneous Fees ................................. 58,864 139,063 35,440 104,511 44,705
------------ -------------- ------------ --------------- ------------
Total Expenses ................................. 6,436,246 24,531,389 1,413,447 8,911,147 6,669,441
------------ -------------- ------------ --------------- ------------
Less: Waivers, Reimbursements and Reduction of
Expenses
Investment Adviser Fee Waiver .................. (925,985) -- (523,803) (3,169,300) (2,274,398)
Shareholder Servicing Fee Waiver -
Fiduciary Shares ............................. (588,519) (4,181,539) (412,977) (2,195,968) (1,139,446)
Shareholder Servicing Fee Waiver -
Class A Shares ............................... (947,923) (1,245,854) (23,440) (113,540) (375,357)
Shareholder Servicing Fee Waiver -
Class B Shares ............................... -- -- -- (511) --
Distribution Fee Waiver - Class A Shares
(Note 3) ..................................... (959,892) (527,694) (21,830) (121,567) (375,354)
Distribution Fee Waiver - Class B Shares
(Note 3) ..................................... -- -- -- (1,636) --
Distribution Fee Waiver - Class C Shares
(Note 3) ..................................... -- -- -- (2,102) --
Distribution Fee Waiver - Class S Shares
(Note 3) ..................................... (153,313) (652,966) -- (798,243) (837,115)
Administration Fee Waiver ...................... -- -- (170,284) (646,835) (611,051)
Reimbursement of Expenses by Adviser ........... -- -- (216) -- --
Reduction of Expenses by Administrator ......... (27,477) (117,322) (7,560) (49,713) (37,760)
------------ -------------- ------------ --------------- ------------
Total Waivers and Reduction of Expenses ............... (3,603,109) (6,725,375) (1,160,110) (7,099,415) (5,650,481)
------------ -------------- ------------ --------------- ------------
Total Net Expenses .................................... 2,833,137 17,806,014 253,337 1,811,732 1,018,960
------------ -------------- ------------ --------------- ------------
Net Investment Income ................................. 168,878 6,301,864 79,768 770,164 90,147
------------ -------------- ------------ --------------- ------------
Net Realized Gain on Investments ...................... -- 1,597 -- -- 5,081
------------ -------------- ------------ --------------- ------------
Increase in Net Assets Resulting from Operations ...... $ 168,878 $ 6,303,461 $ 79,768 $ 770,164 $ 95,228
============ ============== ============ =============== ============
Amounts designated as "--" are either not applicable or less than $1.00.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 21
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS OR PERIODS ENDED JULY 31
CALIFORNIA TAX-FREE
MONEY MARKET FUND
------------------------------
2010 2009
------------------------------
Investment Activities:
Net Investment Income .................................................. $ 168,878 $ 12,417,334
Net Realized Gain on Investments ....................................... -- 49,628
------------- --------------
Net Increase in Net Assets Resulting From Operations ...................... 168,878 12,466,962
------------- --------------
Dividends and Distributions to Shareholders:
Net Investment Income:
Fiduciary Shares .................................................... (81,804) (5,473,489)
Class A Shares ...................................................... (81,211) (6,650,655)
Class B Shares ...................................................... -- --
Class C Shares ...................................................... -- --
Class S Shares ...................................................... (5,863) (293,504)
------------- --------------
Total Dividends and Distributions ................................ (168,878) (12,417,648)
------------- --------------
Net Increase (Decrease) in Net Assets From Share Transactions (2) ...... (462,603,673) (183,464,174)
------------- --------------
Total Increase (Decrease) in Net Assets .......................... (462,603,673) (183,414,860)
------------- --------------
Net Assets:
Beginning of Year ...................................................... 986,467,751 1,169,882,611
------------- --------------
End of Year ............................................................ $ 523,864,078 $ 986,467,751
============= ==============
Undistributed Net Investment Income/(Accumulated Net Investment Loss) ..... $ 49,929 $ 301
============= ==============
Amounts designated as "--" are either $0 or have been rounded to $0.
(1) Commenced operations on August 14, 2008.
(2) For details on share transaction by class, see statement of changes in net
assets - capital stock activity on pages 24 - 27.
The accompanying notes are an integral part of the financial statements.
22 HIGHMARK(R) FUNDS
TREASURY PLUS
DIVERSIFIED MONEY MARKET MONEY MARKET
FUND FUND
------------------------------- ---------------------------
2010 2009 2010 2009(1)
------------------------------- ---------------------------
Investment Activities:
Net Investment Income .......................................... $ 6,301,864 $ 47,718,812 $ 79,768 $ 258,914
Net Realized Gain on Investments ............................... 1,597 66,058 -- --
-------------- -------------- ------------ ------------
Net Increase in Net Assets Resulting From Operations .............. 6,303,461 47,784,870 79,768 258,914
-------------- -------------- ------------ ------------
Dividends and Distributions to Shareholders:
Net Investment Income:
Fiduciary Shares ............................................ (5,467,391) (32,026,561) (76,405) (241,416)
Class A Shares .............................................. (680,925) (12,179,555) (3,363) (17,498)
Class B Shares .............................................. -- -- -- --
Class C Shares .............................................. -- -- -- --
Class S Shares .............................................. (153,548) (3,512,696) -- --
-------------- -------------- ------------ ------------
Total Dividends and Distributions ........................ (6,301,864) (47,718,812) (79,768) (258,914)
-------------- -------------- ------------ ------------
Net Increase (Decrease) in Net Assets From Share
Transactions (2) ............................................ (943,763,155) (286,706) 34,297,790 153,080,167
-------------- -------------- ------------ ------------
Total Increase (Decrease) in Net Assets .................. (943,761,558) (220,648) 34,297,790 153,080,167
-------------- -------------- ------------ ------------
Net Assets:
Beginning of Year .............................................. 3,508,893,415 3,509,114,063 153,080,167 --
-------------- -------------- ------------ ------------
End of Year .................................................... $2,565,131,857 $3,508,893,415 $187,377,957 $153,080,167
============== ============== ============ ============
Undistributed Net Investment Income/(Accumulated Net
Investment Loss) ............................................... $ 78,511 $ 10,857 $ 175 $ 6,796
============== ============== ============ ============
100%
U.S. GOVERNMENT MONEY U.S. TREASURY MONEY
MARKET FUND MARKET FUND
------------------------------- ---------------------------
2010 2009 2010 2009
------------------------------- ---------------------------
Investment Activities:
Net Investment Income .......................................... $ 770,164 $ 8,075,912 $ 90,147 $ 1,599,214
Net Realized Gain on Investments ............................... -- 4,809 5,081 57,950
-------------- -------------- ------------ ------------
Net Increase in Net Assets Resulting From Operations .............. 770,164 8,080,721 95,228 1,657,164
-------------- -------------- ------------ ------------
Dividends and Distributions to Shareholders:
Net Investment Income:
Fiduciary Shares ............................................ (661,441) (6,100,320) (54,385) (1,061,703)
Class A Shares .............................................. (32,239) (800,188) (18,362) (291,845)
Class B Shares .............................................. (140) (948) -- --
Class C Shares .............................................. (174) (1,874) -- --
Class S Shares .............................................. (76,170) (1,172,582) (17,400) (245,666)
-------------- -------------- ------------ ------------
Total Dividends and Distributions ........................ (770,164) (8,075,912) (90,147) (1,599,214)
-------------- -------------- ------------ ------------
Net Increase (Decrease) in Net Assets From Share
Transactions (2) ............................................ 54,531,113 280,307,127 139,057,440 (22,791,727)
-------------- -------------- ------------ ------------
Total Increase (Decrease) in Net Assets .................. 54,531,113 280,311,936 139,062,521 (22,733,777)
-------------- -------------- ------------ ------------
Net Assets:
Beginning of Year .............................................. 1,098,255,714 817,943,778 736,320,688 759,054,465
-------------- -------------- ------------ ------------
End of Year .................................................... $1,152,786,827 $1,098,255,714 875,383,209 $736,320,688
============== ============== ============ ============
Undistributed Net Investment Income/(Accumulated Net
Investment Loss) ............................................... $ -- $ -- $ -- $ --
============== ============== ============ ============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 23
STATEMENTS OF CHANGES IN NET ASSETS
(CAPITAL STOCK ACTIVITY)
FOR THE YEARS OR PERIODS ENDED JULY 31
CALIFORNIA TAX-FREE MONEY MARKET FUND
----------------------------------------------------------------------
2010 2009
SHARES DOLLARS SHARES DOLLARS
----------------------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ..................... 290,787,104 $ 290,787,104 816,608,895 $ 816,608,895
Reinvestment of Dividends and Distributions ..... 351 351 20,714 20,714
Cost of Shares Redeemed ......................... (433,617,326) (433,617,326) (933,848,749) (933,848,749)
-------------- --------------- -------------- ---------------
Total Fiduciary Share Transactions ............ (142,829,871) (142,829,871) (117,219,140) (117,219,140)
-------------- --------------- -------------- ---------------
Class A Shares:
Proceeds from Shares Issued ..................... 763,102,936 763,102,936 1,072,115,583 1,072,115,583
Reinvestment of Dividends and Distributions ..... 81,208 81,208 6,649,969 6,649,969
Cost of Shares Redeemed ......................... (1,067,624,817) (1,067,624,817) (1,149,274,829) (1,149,274,829)
-------------- --------------- -------------- ---------------
Total Class A Share Transactions .............. (304,440,673) (304,440,673) (70,509,277) (70,509,277)
-------------- --------------- -------------- ---------------
Class S Shares:
Proceeds from Shares Issued ..................... 80,120,610 80,120,610 170,241,248 170,241,247
Reinvestment of Dividends and Distributions ..... 5,863 5,863 293,504 293,504
Cost of Shares Redeemed ......................... (95,459,602) (95,459,602) (166,270,508) (166,270,508)
-------------- --------------- -------------- ---------------
Total Class S Share Transactions .............. (15,333,129) (15,333,129) 4,264,244 4,264,243
-------------- --------------- -------------- ---------------
Net Increase (Decrease) from Capital Stock
Activity ...................................... (462,603,673) $ (462,603,673) (183,464,173) $ (183,464,174)
============== =============== ============== ===============
Amounts designated as "--" are either $0 or have been rounded to $0.
(1) Commenced operations on August 14, 2008.
The accompanying notes are an integral part of the financial statements.
24 HIGHMARK(R) FUNDS
DIVERSIFIED MONEY MARKET FUND
----------------------------------------------------------------------
2010 2009
SHARES DOLLARS SHARES DOLLARS
----------------------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ..................... 2,824,103,317 $ 2,824,103,317 3,673,507,711 $ 3,673,507,711
Reinvestment of Dividends and Distributions ..... 947,131 947,131 6,995,499 6,995,499
Cost of Shares Redeemed ......................... (3,308,122,951) (3,308,122,951) (3,458,895,692) (3,458,895,692)
-------------- --------------- -------------- ---------------
Total Fiduciary Share Transactions ............ (483,072,503) (483,072,503) 221,607,518 221,607,518
-------------- --------------- -------------- ---------------
Class A Shares:
Proceeds from Shares Issued ..................... 387,787,168 387,787,168 663,815,274 663,815,274
Reinvestment of Dividends and Distributions ..... 678,589 678,589 12,137,722 12,137,722
Cost of Shares Redeemed ......................... (797,078,083) (797,078,083) (798,977,752) (798,977,752)
-------------- --------------- -------------- ---------------
Total Class A Share Transactions .............. (408,612,326) (408,612,326) (123,024,756) (123,024,756)
-------------- --------------- -------------- ---------------
Class S Shares:
Proceeds from Shares Issued ..................... 720,255,934 720,255,934 763,693,507 763,693,507
Reinvestment of Dividends and Distributions ..... 153,477 153,477 3,512,696 3,512,696
Cost of Shares Redeemed ......................... (772,487,737) (772,487,737) (866,075,671) (866,075,671)
-------------- --------------- -------------- ---------------
Total Class S Share Transactions .............. (52,078,326) (52,078,326) (98,869,468) (98,869,468)
-------------- --------------- -------------- ---------------
Net Increase (Decrease) from Capital Stock
Activity ...................................... (943,763,155) $ (943,763,155) (286,706) $ (286,706)
============== =============== ============== ===============
TREASURY PLUS MONEY MARKET FUND
----------------------------------------------------------------------
2010 2009(1)
SHARES DOLLARS SHARES DOLLARS
----------------------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ..................... 924,237,730 $ 924,237,730 761,238,502 $ 761,238,502
Reinvestment of Dividends and Distributions ..... -- -- -- --
Cost of Shares Redeemed ......................... (890,764,850) (890,764,850) (622,005,437) (622,005,437)
-------------- --------------- -------------- ---------------
Total Fiduciary Share Transactions ............ 33,472,880 33,472,880 139,233,065 139,233,065
-------------- --------------- -------------- ---------------
Class A Shares:
Proceeds from Shares Issued ..................... 28,097,674 28,097,674 70,861,264 70,861,264
Reinvestment of Dividends and Distributions ..... 3,363 3,363 17,498 17,498
Cost of Shares Redeemed ......................... (27,276,127) (27,276,127) (57,031,661) (57,031,661)
-------------- --------------- -------------- ---------------
Total Class A Share Transactions .............. 824,910 824,910 13,847,101 13,847,101
-------------- --------------- -------------- ---------------
Class S Shares:
Proceeds from Shares Issued ..................... -- -- 1 1
Reinvestment of Dividends and Distributions ..... -- -- -- --
Cost of Shares Redeemed ......................... -- -- -- --
-------------- --------------- -------------- ---------------
Total Class S Share Transactions .............. -- -- 1 1
-------------- --------------- -------------- ---------------
Net Increase (Decrease) from Capital Stock
Activity ...................................... 34,297,790 $ 34,297,790 153,080,167 $ 153,080,167
============== =============== ============== ===============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 25
STATEMENTS OF CHANGES IN NET ASSETS
(CAPITAL STOCK ACTIVITY)
FOR THE YEARS OR PERIODS ENDED JULY 31
U.S. GOVERNMENT MONEY MARKET FUND
-------------------------------------------------------------------
2010 2009
SHARES DOLLARS SHARES DOLLARS
-------------------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ..................... 5,631,634,038 $ 5,631,634,038 3,324,645,757 $ 3,324,645,757
Reinvestment of Dividends and Distributions ..... 14,833 14,833 100,001 100,001
Cost of Shares Redeemed ......................... (5,572,519,920) (5,572,519,920) (3,027,773,735) (3,027,773,735)
-------------- --------------- -------------- ---------------
Total Fiduciary Share Transactions ........... 59,128,951 59,128,951 296,972,023 296,972,023
-------------- --------------- -------------- ---------------
Class A Shares:
Proceeds from Shares Issued ..................... 82,720,179 82,720,179 167,145,668 167,145,668
Reinvestment of Dividends and Distributions ..... 32,225 32,225 800,037 800,037
Cost of Shares Redeemed ......................... (108,184,052) (108,184,052) (181,865,566) (181,865,566)
-------------- --------------- -------------- ---------------
Total Class A Share Transactions ............. (25,431,648) (25,431,648) (13,919,861) (13,919,861)
-------------- --------------- -------------- ---------------
Class B Shares:
Proceeds from Shares Issued ..................... 303,485 303,485 299,578 299,578
Reinvestment of Dividends and Distributions ..... 134 134 948 948
Cost of Shares Redeemed ......................... (364,426) (364,426) (192,286) (192,286)
-------------- --------------- -------------- ---------------
Total Class B Share Transactions ............. (60,807) (60,807) 108,240 108,240
-------------- --------------- -------------- ---------------
Class C Shares:
Proceeds from Shares Issued ..................... 370,161 370,161 1,105,244 1,105,244
Reinvestment of Dividends and Distributions ..... 169 169 1,672 1,672
Cost of Shares Redeemed ......................... (357,577) (357,577) (1,050,144) (1,050,144)
-------------- --------------- -------------- ---------------
Total Class C Share Transactions ............. 12,753 12,753 56,772 56,772
-------------- --------------- -------------- ---------------
Class S Shares:
Proceeds from Shares Issued ..................... 769,695,167 769,695,167 812,763,913 812,763,913
Reinvestment of Dividends and Distributions ..... 76,170 76,170 1,172,582 1,172,582
Cost of Shares Redeemed ......................... (748,889,473) (748,889,473) (816,846,542) (816,846,542)
-------------- --------------- -------------- ---------------
Total Class S Share Transactions ............. 20,881,864 20,881,864 (2,910,047) (2,910,047)
-------------- --------------- -------------- ---------------
Net Increase (Decrease) from Capital Stock
Activity ...................................... 54,531,113 $ 54,531,113 280,307,127 $ 280,307,127
============== =============== ============== ===============
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
26 HIGHMARK(R) FUNDS
100% U.S. TREASURY MONEY MARKET FUND
-------------------------------------------------------------------
2010 2009
SHARES DOLLARS SHARES DOLLARS
-------------------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ..................... 1,207,768,792 $ 1,207,768,792 1,361,713,859 $ 1,361,713,859
Reinvestment of Dividends and Distributions ..... 1,988 1,988 59,436 59,436
Cost of Shares Redeemed ......................... (1,254,622,489) (1,254,622,489) (1,374,695,348) (1,374,695,348)
-------------- --------------- -------------- ---------------
Total Fiduciary Share Transactions ........... (46,851,709) (46,851,709) (12,922,053) (12,922,053)
-------------- --------------- -------------- ---------------
Class A Shares:
Proceeds from Shares Issued ..................... 166,495,073 166,495,073 426,619,124 426,619,124
Reinvestment of Dividends and Distributions ..... 18,359 18,359 291,836 291,836
Cost of Shares Redeemed ......................... (184,970,150) (184,970,150) (388,632,425) (388,632,425)
-------------- --------------- -------------- ---------------
Total Class A Share Transactions ............. (18,456,718) (18,456,718) 38,278,535 38,278,535
-------------- --------------- -------------- ---------------
Class B Shares:
Proceeds from Shares Issued ..................... -- -- -- --
Reinvestment of Dividends and Distributions ..... -- -- -- --
Cost of Shares Redeemed ......................... -- -- -- --
-------------- --------------- -------------- ---------------
Total Class B Share Transactions ............. -- -- -- --
-------------- --------------- -------------- ---------------
Class C Shares:
Proceeds from Shares Issued ..................... -- -- -- --
Reinvestment of Dividends and Distributions ..... -- -- -- --
Cost of Shares Redeemed ......................... -- -- -- --
-------------- --------------- -------------- ---------------
Total Class C Share Transactions ............. -- -- -- --
-------------- --------------- -------------- ---------------
Class S Shares:
Proceeds from Shares Issued ..................... 1,084,081,013 1,084,081,013 750,909,872 750,909,872
Reinvestment of Dividends and Distributions ..... 17,400 17,400 245,666 245,666
Cost of Shares Redeemed ......................... (879,732,546) (879,732,546) (799,303,747) (799,303,747)
-------------- --------------- -------------- ---------------
Total Class S Share Transactions ............. 204,365,867 204,365,867 (48,148,209) (48,148,209)
-------------- --------------- -------------- ---------------
Net Increase (Decrease) from Capital Stock
Activity ...................................... 139,057,440 $ 139,057,440 (22,791,727) $ (22,791,727)
============== =============== ============== ===============
HIGHMARK(R) FUNDS 27
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FOR THE YEARS OR PERIODS ENDED JULY 31
DIVIDENDS AND
INVESTMENT ACTIVITIES DISTRIBUTIONS
--------------------------- --------------------
NET
ASSET NET REALIZED TOTAL
VALUE, NET AND UNREALIZED TOTAL NET FROM
BEGINNING INVESTMENT GAIN (LOSS) ON FROM INVESTMENT CAPITAL DIVIDENDS AND
OF PERIOD INCOME+ INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------
CALIFORNIA TAX-FREE MONEY MARKET FUND
- -------------------------------------
FIDUCIARY SHARES
2010 $1.00 $ --++ $ --++ $ --++ $ --++ $-- $ --++
2009 1.00 0.011 -- 0.011 (0.011) -- (0.011)
2008 1.00 0.024 0.001 0.025 (0.025) -- (0.025)
2007 1.00 0.031 -- 0.031 (0.031) -- (0.031)
2006 1.00 0.025 -- 0.025 (0.025) -- (0.025)
CLASS A SHARES
2010 $1.00 $ --++ $ --++ $ --++ $ --++ $-- $ --++
2009 1.00 0.009 -- 0.009 (0.009) -- (0.009)
2008 1.00 0.022 0.001 0.023 (0.023) -- (0.023)
2007 1.00 0.028 -- 0.028 (0.028) -- (0.028)
2006 1.00 0.023 -- 0.023 (0.023) -- (0.023)
CLASS S SHARES
2010 $1.00 $ --++ $ --++ $ --++ $ --++ $-- $ --++
2009 1.00 0.007 -- 0.007 (0.007) -- (0.007)
2008 1.00 0.019 0.001 0.020 (0.020) -- (0.020)
2007 1.00 0.026 -- 0.026 (0.026) -- (0.026)
2006 1.00 0.020 -- 0.020 (0.020) -- (0.020)
- -----------------------------
DIVERSIFIED MONEY MARKET FUND
- -----------------------------
FIDUCIARY SHARES
2010 $1.00 $ 0.003 $ --++ $0.003 $(0.003) $-- $(0.003)
2009 1.00 0.015 -- 0.015 (0.015) -- (0.015)
2008 1.00 0.037 -- 0.037 (0.037) -- (0.037)
2007 1.00 0.049 -- 0.049 (0.049) -- (0.049)
2006 1.00 0.039 -- 0.039 (0.039) -- (0.039)
CLASS A SHARES
2010 $1.00 $ 0.001 $ --++ $0.001 $(0.001) $-- $(0.001)
2009 1.00 0.013 -- 0.013 (0.013) -- (0.013)
2008 1.00 0.034 0.001 0.035 (0.035) -- (0.035)
2007 1.00 0.046 -- 0.046 (0.046) -- (0.046)
2006 1.00 0.037 -- 0.037 (0.037) -- (0.037)
CLASS S SHARES
2010 $1.00 $ 0.001 $ --++ $0.001 $(0.001) $-- $(0.001)
2009 1.00 0.010 -- 0.010 (0.010) -- (0.010)
2008 1.00 0.032 -- 0.032 (0.032) -- (0.032)
2007 1.00 0.044 -- 0.044 (0.044) -- (0.044)
2006 1.00 0.033 0.001 0.034 (0.034) -- (0.034)
- -------------------------------
TREASURY PLUS MONEY MARKET FUND
- -------------------------------
FIDUCIARY SHARES
2010 $1.00 $ 0.001 $ -- $0.001 $(0.001) $-- $(0.001)
2009 (1) 1.00 0.004^ -- 0.004 (0.004) -- (0.004)
CLASS A SHARES
2010 $1.00 $ --++ $ -- $ -- $ --++ $-- $ --++
2009 (1) 1.00 0.001^ -- 0.001 (0.001) -- (0.001)
CLASS S SHARES
2010 (2) $1.00 $ -- $ -- $ -- $ -- $-- $ --
2009 (1)(2) 1.00 --^ -- -- -- -- --
RATIO
OF EXPENSES
TO AVERAGE RATIO OF
NET NET NET ASSETS NET
ASSET ASSETS, RATIO EXCLUDING INVESTMENT
VALUE, END OF EXPENSES FEE WAIVERS INCOME
END TOTAL OF PERIOD TO AVERAGE AND REDUCTION TO AVERAGE
OF PERIOD RETURN** (000) NET ASSETS OF EXPENSES NET ASSETS
- ---------------------------------------------------------------------------------------------------------------------
- -------------------------------------
CALIFORNIA TAX-FREE MONEY MARKET FUND
- -------------------------------------
FIDUCIARY SHARES
2010 $1.00 0.03% $ 200,245 0.40%+++ 0.78% 0.03%
2009 1.00 1.15 343,075 0.54+++ 0.79 1.14
2008 1.00 2.55 460,265 0.49 0.76 2.42
2007 1.00 3.13 226,583 0.48 0.79 3.08
2006 1.00 2.57 176,711 0.48 0.79 2.53
CLASS A SHARES
2010 $1.00 0.02% $ 299,724 0.42%+++ 1.03% 0.02%
2009 1.00 0.93 604,164 0.78+++ 1.04 0.90
2008 1.00 2.30 674,650 0.74 1.01 2.17
2007 1.00 2.87 329,718 0.72 1.04 2.83
2006 1.00 2.32 278,442 0.73 1.03 2.30
CLASS S SHARES
2010 $1.00 0.02% $ 23,895 0.42%+++ 1.08% 0.02%
2009 1.00 0.73 39,228 0.97+++ 1.09 0.71
2008 1.00 2.04 34,968 0.99 1.06 1.92
2007 1.00 2.61 56,721 0.98 1.09 2.60
2006 1.00 2.05 40,753 0.99 1.09 2.03
- -----------------------------
DIVERSIFIED MONEY MARKET FUND
- -----------------------------
FIDUCIARY SHARES
2010 $1.00 0.25% $1,932,702 0.56%+++ 0.76% 0.26%
2009 1.00 1.55 2,415,777 0.58+++ 0.80 1.53
2008 1.00 3.81 2,193,518 0.54 0.76 3.66
2007 1.00 4.98 1,764,559 0.52 0.78 4.87
2006 1.00 4.02 1,923,511 0.52 0.79 3.93
CLASS A SHARES
2010 $1.00 0.10% $ 450,045 0.73%+++ 1.01% 0.10%
2009 1.00 1.30 858,653 0.83+++ 1.05 1.28
2008 1.00 3.55 981,601 0.79 1.01 3.41
2007 1.00 4.72 792,969 0.78 1.03 4.62
2006 1.00 3.76 724,910 0.77 1.04 3.74
CLASS S SHARES
2010 $1.00 0.07% $ 182,385 0.75%+++ 1.06% 0.07%
2009 1.00 1.05 234,462 1.08+++ 1.10 1.03
2008 1.00 3.29 333,995 1.04 1.06 3.16
2007 1.00 4.47 372,409 1.03 1.08 4.37
2006 1.00 3.49 464,413 1.05 1.10 3.29
- -------------------------------
TREASURY PLUS MONEY MARKET FUND
- -------------------------------
FIDUCIARY SHARES
2010 $1.00 0.05% $ 172,706 0.14%+++ 0.80% 0.05%
2009 (1) 1.00 0.41 139,233 0.15*+++ 0.80* 0.23*
CLASS A SHARES
2010 $1.00 0.03% $ 14,672 0.16%+++ 1.05% 0.03%
2009 (1) 1.00 0.10 13,847 0.30*+++ 1.05* 0.08*
CLASS S SHARES
2010 (2) $1.00 0.00% $ -- 0.14%+++ 1.10% 0.05%
2009 (1)(2) 1.00 0.00 -- 0.15*+++ 0.55* 0.23*
The accompanying notes are an integral part of the financial statements.
28 HIGHMARK(R) FUNDS
DIVIDENDS AND
INVESTMENT ACTIVITIES DISTRIBUTIONS
--------------------------- --------------------
NET
ASSET NET REALIZED TOTAL
VALUE, NET AND UNREALIZED TOTAL NET FROM
BEGINNING INVESTMENT GAIN (LOSS) ON FROM INVESTMENT CAPITAL DIVIDENDS AND
OF PERIOD INCOME+ INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS
- -----------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------
U.S. GOVERNMENT MONEY MARKET FUND
- ---------------------------------
FIDUCIARY SHARES
2010 $1.00 $0.001 $ -- $0.001 $(0.001) $ -- $(0.001)
2009 1.00 0.009^ -- 0.009 (0.009) -- (0.009)
2008 1.00 0.031 0.001 0.032 (0.032) -- (0.032)
2007 1.00 0.048 -- 0.048 (0.048) -- (0.048)
2006 1.00 0.039 -- 0.039 (0.039) -- (0.039)
CLASS A SHARES
2010 $1.00 $0.001 $ -- $0.001 $(0.001) $ -- $(0.001)
2009 1.00 0.008^ -- 0.008 (0.008) -- (0.008)
2008 1.00 0.029 0.001 0.030 (0.030) -- (0.030)
2007 1.00 0.045 -- 0.045 (0.045) -- (0.045)
2006 1.00 0.036 -- 0.036 (0.036) -- (0.036)
CLASS B SHARES
2010 $1.00 $0.001 $ -- $0.001 $(0.001) $ -- $(0.001)
2009 1.00 0.005^ -- 0.005 (0.005) -- (0.005)
2008 1.00 0.022 0.001 0.023 (0.023) -- (0.023)
2007 1.00 0.038 -- 0.038 (0.038) -- (0.038)
2006 1.00 0.028 0.001 0.029 (0.029) -- (0.029)
CLASS C SHARES
2010 $1.00 $0.001 $ -- $0.001 $(0.001) $ -- $(0.001)
2009 1.00 0.006^ -- 0.006 (0.006) -- (0.006)
2008 1.00 0.024 0.001 0.025 (0.025) -- (0.025)
2007 1.00 0.041 -- 0.041 (0.041) -- (0.041)
2006 (3) 1.00 0.025 (0.001) 0.024 (0.024) -- (0.024)
CLASS S SHARES
2010 $1.00 $ --++ $ -- $ --++ $ --++ $ --++ $ --++
2009 1.00 0.007^ -- 0.007 (0.007) -- (0.007)
2008 1.00 0.026 0.001 0.027 (0.027) -- (0.027)
2007 1.00 0.043 -- 0.043 (0.043) -- (0.043)
2006 1.00 0.034 (0.001) 0.033 (0.033) -- (0.033)
RATIO
OF EXPENSES
TO AVERAGE RATIO OF
NET NET NET ASSETS NET
ASSET ASSETS, RATIO EXCLUDING INVESTMENT
VALUE, END OF EXPENSES FEE WAIVERS INCOME
END TOTAL OF PERIOD TO AVERAGE AND REDUCTION TO AVERAGE
OF PERIOD RETURN** (000) NET ASSETS OF EXPENSES NET ASSETS
- -------------------------------------------------------------------------------------------------------------------
- ---------------------------------
U.S. GOVERNMENT MONEY MARKET FUND
- ---------------------------------
FIDUCIARY SHARES
2010 $1.00 0.08% $932,370 0.16%+++ 0.77% 0.08%
2009 1.00 0.95 873,242 0.49+++ 0.80 0.88
2008 1.00 3.25 576,230 0.54 0.78 3.14
2007 1.00 4.90 456,802 0.53 0.79 4.80
2006 1.00 3.93 506,572 0.53 0.79 3.88
CLASS A SHARES
2010 $1.00 0.06% $ 40,888 0.18%+++ 1.02% 0.06%
2009 1.00 0.79 66,319 0.67+++ 1.05 0.70
2008 1.00 2.99 80,235 0.79 1.05 2.89
2007 1.00 4.64 33,560 0.78 1.04 4.55
2006 1.00 3.67 32,754 0.78 1.04 3.61
CLASS B SHARES
2010 $1.00 0.06% $ 175 0.18%+++ 1.52% 0.06%
2009 1.00 0.47 236 0.94+++ 1.55 0.43
2008 1.00 2.30 127 1.48 1.51 2.20
2007 1.00 3.91 432 1.48 1.54 3.85
2006 1.00 2.93 780 1.50 1.54 2.83
CLASS C SHARES
2010 $1.00 0.06% $ 321 0.18%+++ 1.27% 0.06%
2009 1.00 0.58 308 0.82+++ 1.30 0.55
2008 1.00 2.53 251 1.24 1.28 2.44
2007 1.00 4.16 29 1.23 1.29 4.09
2006 (3) 1.00 2.40 61 1.23* 1.29* 3.80*
CLASS S SHARES
2010 $1.00 0.05% $179,034 0.19%+++ 1.07% 0.05%
2009 1.00 0.67 158,151 0.78+++ 1.10 0.59
2008 1.00 2.74 161,100 1.04 1.08 2.64
2007 1.00 4.38 128,681 1.03 1.09 4.30
2006 1.00 3.40 93,026 1.04 1.09 3.41
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. FOR NET
ASSETS, "--" IS AN AMOUNT LESS THAN $1,000.
* ANNUALIZED.
** TOTAL RETURN DOES NOT REFLECT ANY APPLICABLE SALES CHARGE. TOTAL RETURN IS
FOR THE PERIOD INDICATED AND HAS NOT BEEN ANNUALIZED.
+ PER SHARE AMOUNTS CALCULATED USING AVERAGE SHARES METHOD, UNLESS OTHERWISE
INDICATED.
++ AMOUNT REPRESENTS LESS THAN $0.001.
+++ THE EFFECT OF PARTICIPATING IN THE TREASURY'S TEMPORARY GUARANTEE PROGRAM
EXPENSE FOR THE YEARS ENDED 07/31/10 AND 07/31/09, RESPECTIVELY, WAS 0.01%
AND 0.04% FOR THE CALIFORNIA TAX-FREE MONEY MARKET FUND, 0.01% AND 0.04%
FOR THE DIVERSIFIED MONEY MARKET FUND, 0.00% AND 0.00% FOR THE TREASURY
PLUS MONEY MARKET FUND AND 0.00% AND 0.03% FOR THE U.S. GOVERNMENT MONEY
MARKET FUND.
^ PER SHARE AMOUNTS CALCULATED USING SEC METHOD.
(1) COMMENCED OPERATIONS ON AUGUST 14, 2008.
(2) THIS CLASS HAD ONLY ONE SHARE OUTSTANDING THROUGHOUT THE PERIODS SHOWN,
THEREFORE INVESTMENT ACTIVITIES WERE NOT GENERATED OR WERE LESS THAN
$0.001.
(3) COMMENCED OPERATIONS ON DECEMBER 1, 2005.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 29
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FOR THE YEARS OR PERIODS ENDED JULY 31
DIVIDENDS AND
INVESTMENT ACTIVITIES DISTRIBUTIONS
NET --------------------------- --------------------
ASSET NET REALIZED TOTAL
VALUE, NET AND UNREALIZED TOTAL NET FROM
BEGINNING INVESTMENT GAIN (LOSS) ON FROM INVESTMENT CAPITAL DIVIDENDS AND
OF PERIOD INCOME+ INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS
- --------------------------------------------------------------------------------------------------------------------------
- ------------------------------------
100% U.S. TREASURY MONEY MARKET FUND
- ------------------------------------
FIDUCIARY SHARES
2010 $1.00 $ --++ $ --++ $ -- $ --++ $-- $ --++
2009 1.00 0.003 -- 0.003 (0.003) -- (0.003)
2008 1.00 0.023 -- 0.023 (0.023) -- (0.023)
2007 1.00 0.045 -- 0.045 (0.045) -- (0.045)
2006 1.00 0.035 -- 0.035 (0.035) -- (0.035)
CLASS A SHARES
2010 $1.00 $ --++ $ --++ $ -- $ --++ $-- $ --++
2009 1.00 0.002 -- 0.002 (0.002) -- (0.002)
2008 1.00 0.020 -- 0.020 (0.020) -- (0.020)
2007 1.00 0.042 -- 0.042 (0.042) -- (0.042)
2006 1.00 0.032 0.001 0.033 (0.033) -- (0.033)
CLASS S SHARES
2010 $1.00 $ --++ $ --++ $ -- $ --++ $-- $ --++
2009 1.00 0.001 -- 0.001 (0.001) -- (0.001)
2008 1.00 0.018 -- 0.018 (0.018) -- (0.018)
2007 1.00 0.040 -- 0.040 (0.040) -- (0.040)
2006 1.00 0.030 -- 0.030 (0.030) -- (0.030)
RATIO
OF EXPENSES
TO AVERAGE RATIO OF
NET NET NET ASSETS NET
ASSET ASSETS, RATIO EXCLUDING INVESTMENT
VALUE, END OF EXPENSES FEE WAIVERS INCOME
END TOTAL OF PERIOD TO AVERAGE AND REDUCTION TO AVERAGE
OF PERIOD RETURN* (000) NET ASSETS OF EXPENSES NET ASSETS
- ----------------------------------------------------------------------------------------------------------
- ------------------------------------
100% U.S. TREASURY MONEY MARKET FUND
- ------------------------------------
FIDUCIARY SHARES
2010 $1.00 0.01% $405,745 0.13%+++ 0.77% 0.01%
2009 1.00 0.27 452,594 0.36+++ 0.80 0.25
2008 1.00 2.27 465,490 0.54 0.76 2.21
2007 1.00 4.56 334,211 0.53 0.78 4.47
2006 1.00 3.58 391,906 0.52 0.78 3.54
CLASS A SHARES
2010 $1.00 0.01% $144,867 0.13%+++ 1.02% 0.01%
2009 1.00 0.19 163,323 0.42+++ 1.05 0.19
2008 1.00 2.02 125,056 0.79 1.01 1.96
2007 1.00 4.30 151,880 0.78 1.03 4.22
2006 1.00 3.32 177,512 0.78 1.04 3.20
CLASS S SHARES
2010 $1.00 0.01% $324,771 0.13%+++ 1.07% 0.01%
2009 1.00 0.14 120,404 0.52+++ 1.10 0.09
2008 1.00 1.77 168,509 1.04 1.06 1.71
2007 1.00 4.04 228,905 1.03 1.08 3.97
2006 1.00 3.04 231,826 1.04 1.09 3.01
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. FOR NET
ASSETS, "--" IS AN AMOUNT LESS THAN $1,000.
* TOTAL RETURN DOES NOT REFLECT ANY APPLICABLE SALES CHARGE. TOTAL RETURN IS
FOR THE PERIOD INDICATED AND HAS NOT BEEN ANNUALIZED.
+ PER SHARE AMOUNTS CALCULATED USING AVERAGE SHARES METHOD, UNLESS OTHERWISE
INDICATED.
++ AMOUNT REPRESENTS LESS THAN $0.001.
+++ THE EFFECT OF PARTICIPATING IN THE TREASURY'S TEMPORARY GUARANTEE PROGRAM
EXPENSE FOR THE YEARS ENDED 07/31/10 AND 07/31/09 WAS 0.01% AND 0.04%,
RESPECTIVELY FOR THE 100% U.S. TREASURY MONEY MARKET FUND.
The accompanying notes are an integral part of the financial statements.
30 HIGHMARK(R) FUNDS
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2010
1. ORGANIZATION
HighMark(R) Funds ("HighMark" or the "Trust") was organized as a Massachusetts
business trust under a Declaration of Trust dated March 10, 1987.
The Trust is registered under the Investment Company Act of 1940 (the "1940
Act"), as amended, as an open-end investment company with twenty-nine separate
funds. The following funds of the Trust are included in these financial
statements: California Tax-Free Money Market Fund, Diversified Money Market
Fund, Treasury Plus Money Market Fund, U.S. Government Money Market Fund and
100% U.S. Treasury Money Market Fund (collectively, the "Money Market Funds").
The Money Market Funds are collectively the "Funds" and each is a "Fund."
Pursuant to HighMark's multiple class plan, the Funds may offer up to six
classes of shares, Class A Shares, Class B Shares and Class C Shares
(collectively, the "Retail Shares"), Fiduciary Shares, Class S Shares and Class
M Shares. The Funds' prospectuses provide a description of each Fund's
investment objectives, policies and strategies.
Class B Shares of the Funds are closed to purchases by new and existing
investors. Existing investors, however, may still exchange shares and reinvest
distributions in Class B Shares of the Funds.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Funds.
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS -- The preparation
of financial statements in accordance with accounting principles generally
accepted in the United States of America require 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 increases and
decreases in net assets from operations during the reporting period. Actual
results could differ from those estimates and assumptions.
SECURITY VALUATION -- All securities, with the exception of repurchase
agreements, held by the Money Market Funds are stated at amortized cost, which
approximates market value pursuant to Rule 2a-7 of the 1940 Act. Under this
valuation method, purchase discounts and premium are accreted and amortized
ratably to maturity and are included in interest income. Repurchase agreements
are valued at cost, which approximates market or fair value.
FAIR VALUE MEASUREMENTS - The inputs and valuations techniques used to measure
fair value of the Funds' net assets are summarized into three levels as
described in the hierarchy below:
o Level 1 - unadjusted quoted prices in active markets for identical
assets or liabilities
o Level 2 - other significant observable inputs (including quoted
prices for similar securities, interest rates, prepayment
speeds, credit risk, etc.)
o Level 3 - significant unobservable inputs (including the Fund's own
assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities.
A summary of the levels for each of Fund's investments as of July 31, 2010 is
included with each Fund's schedule of investments.
SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are
accounted for on the date the security is purchased or sold (trade date). Costs
used in determining realized gains and losses on the sale of investment
securities are those of the specific securities sold, adjusted for the accretion
and amortization of purchase discounts and premiums, if any, during the
respective holding periods. Interest income is recorded on the accrual basis;
dividend income is recorded on the ex-dividend date, or in the case of certain
foreign investments, as soon as the Fund is made aware of it.
REPURCHASE AGREEMENTS -- Securities pledged as collateral for repurchase
agreements are held by the custodian bank until the respective agreements
mature. Provisions of repurchase agreements and procedures adopted by HighMark
Capital Management, Inc. (the "Adviser" or the "Administrator") are designed to
ensure that the market value of the collateral is sufficient in the event of
default by the counterparty. If the counterparty defaults and the value of the
collateral declines or if the counterparty enters an insolvency proceeding,
realization of the collateral by a Fund may be delayed or limited.
CLASSES -- Class specific expenses are borne by that class. Income, non-class
specific expenses and realized/unrealized gains and losses are allocated to the
respective classes on the basis of the relative daily net assets.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment
income for the Funds are declared daily and paid monthly. None of the Funds has
a targeted dividend rate, and none of the Funds guarantees that it will pay any
dividends or other distributions. Any net realized capital gains, if any, will
be distributed at least annually by all Funds.
DEFERRED COMPENSATION PLAN -- Under the deferred compensation plan approved by
HighMark's Board of Trustees (the "Board"), members of the Board (the
"Trustees") who are not officers or employees of Union Bank, N.A. (the "Bank")
or any subsidiary of the Bank are permitted to defer a portion of their annual
compensation. Deferred amounts earn an approximate return as though equivalent
dollar amounts had been invested in shares of Funds selected by the Trustees,
which has the same
HIGHMARK(R) FUNDS 31
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JULY 31, 2010
economic effect for the Trustees as if the Trustees had invested the deferred
amounts in such Funds.
The deferred compensation plan is not funded and obligations thereunder
represent general unsecured claims against the general assets of HighMark.
However, HighMark has elected to invest in shares of those Funds selected by the
Trustees in order to match the deferred compensation obligation. The deferred
compensation is allocated to the Funds based on average net assets.
3. AGREEMENTS AND TRANSACTIONS WITH AFFILIATES
HighMark and the Adviser are parties to an investment advisory agreement. For
its services, the Adviser is entitled to receive a fee with respect to each
Fund, which is calculated daily and paid monthly, based on the daily net assets
of each Fund, at an annual rate of:
California Tax-Free Money Market ... 0.30%
Diversified Money Market ........... 0.30%
Treasury Plus Money Market ......... 0.30%
U.S. Government Money Market ....... 0.30%
100% U.S. Treasury Money Market .... 0.30%
Effective December 1, 2009, the Adviser contractually agreed to reduce its fees
throughout the period December 1, 2009 through November 30, 2010 and to the
extent necessary to reimburse the Funds in order to limit the Funds from
exceeding certain expense limitations as follows:
FIDUCIARY CLASS A CLASS B CLASS C CLASS M CLASS S
SHARES SHARES SHARES SHARES SHARES SHARES
--------- ------- ------- ------- ------- -------
California Tax-Free Money Market ... 0.55% 0.80% n/a n/a n/a 1.05%
Diversified Money Market ........... 0.57 0.82 n/a n/a n/a 1.07
Treasury Plus Money Market ......... 0.55 0.80 n/a n/a n/a 1.05
U.S. Government Money Market ....... 0.57 0.82 1.52 1.27 n/a 1.07
100% U.S. Treasury Money Market .... 0.55 0.80 n/a n/a n/a 1.05
n/a -- not applicable
Effective December 1, 2009, the Adviser may recoup from the Fund any of the fees
and expenses it has waived and/or reimbursed until the end of the third fiscal
year after the end of the fiscal year in which such waiver and/or reimbursement
occurs, subject to certain limitations. This recoupment could reduce the Fund's
future total return.
The total amount of fees waived and/or assumed by the Adviser during the last
fiscal year ended July 31, and is therefore currently eligible for recoupment
provided that the total recoupment does not exceed the Funds' respective
limitation, is as follows:
FOR THE PERIOD
DECEMBER 1, 2009
- JULY 31, 2010
----------------
CA Tax-Free Money Market .............. $ 647,577
Treasury Plus Money Market ............ 362,876
U.S. Government Money Market .......... 2,147,285
100% US Treasury Money Market ......... 1,508,719
These amounts will expire on July 31, 2013.
Effective August 1, 2009 through November 30, 2009, the Adviser contractually
agreed to reduce its fees and to the extent necessary to reimburse the Funds in
order to limit the Funds from exceeding certain expense limitations as follows:
FIDUCIARY CLASS A CLASS B CLASS C CLASS M CLASS S
SHARES SHARES SHARES SHARES SHARES SHARES
--------- ------- ------- ------- ------- -------
California Tax-Free Money Market ... 0.55% 0.80% n/a n/a n/a 1.05%
Diversified Money Market ........... 0.55 0.80 n/a n/a n/a 1.05
Treasury Plus Money Market ......... 0.55 0.80 n/a n/a n/a 1.05
U.S. Government Money Market ....... 0.55 0.80 1.50 1.25 n/a 1.05
100% U.S. Treasury Money Market .... 0.55 0.80 n/a n/a n/a 1.05
n/a -- not applicable
The Fund's total actual annual operating expense ratio may be less than the
amount shown for such Fund above due to additional waivers/reimbursements
described below.
Effective December 10, 2007, the Administrator and HighMark are parties to an
administrative services agreement ("Administrative Services Agreement") under
which the Administrator provides the Funds with administrative services for an
annual fee of 0.15% of the first $8 billion of the average daily net assets of
the Funds and 0.14% of such average daily net assets in excess of $8 billion
allocated to each Fund based on its respective net assets. Prior to December 10,
2007, the Administrator and HighMark were parties to an administrative services
agreement under which the Administrator provided the Funds with management and
administrative services for an annual fee of 0.15% of the first $10 billion of
the average daily net assets of the Funds and 0.145% of such average daily net
assets in excess of $10 billion allocated to each Fund based on its respective
net assets, possibly subject to certain minimum fees. The Administrator may
voluntarily waive its fee, subject to termination at any time by the
Administrator. For the period, the Administrator voluntarily waived such portion
of its administration fee for the Treasury Plus Money Market Fund, the U.S.
Government Money Market Fund and the 100% U.S. Treasury Money Market Fund, which
provided investors with a higher yield during the period.
Effective December 10, 2007 for the Money Market Funds, pursuant to a separate
agreement with the Administrator, BNY Mellon Investment Servicing (US) Inc.,
(the "Sub-Administrator") formerly known as PNC Global Investment Servicing
(U.S.) Inc., performs sub-administration services on behalf of each Fund, for
which it receives a fee paid by the Administrator at the annual rate of 0.025%
of the first $8 billion of the aggregate average net assets of the Funds and
32 HIGHMARK(R) FUNDS
0.015% of such assets in excess of $8 billion. For the year ended July 31, 2010,
the Sub-Administrator earned sub-administration fees in the amount of
$1,386,664.
Prior to December 1, 2009, the Administrator was responsible for certain fees
charged by HighMark Funds' transfer agent and certain routine legal expenses
incurred by the Trust. These expenses are included in "Reduction of Expenses by
the Administrator" on the statement of operations.
Certain officers of HighMark and Trustees who are deemed to be "interested
persons" of HighMark as defined in the 1940 Act ("Interested Trustees") are also
officers of the Adviser, the Adviser's parent and the Sub-Administrator. Such
officers and Interested Trustees, except for the Funds' Chief Compliance
Officer, are paid no fees by the Funds for serving as officers of HighMark.
The Trustees who are not "interested persons" of HighMark ("Independent
Trustees") receive quarterly retainer fees and fees and expenses for each
meeting of the Board attended, which is paid by the Funds.
Effective August 1, 2009, Boston Financial Data Services, Inc. ("BFDS") serves
as the transfer agent, dividend disbursing agent and shareholder servicing agent
for the Funds. Prior to August 1, 2009, State Street Bank and Trust Company
("State Street") served as the transfer agent, dividend disbursing agent and
shareholder servicing agent for the Funds. State Street had sub-contracted such
services to its affiliate, BFDS.
Effective December 1, 2008, HighMark Funds Distributors, Inc. (the
"Distributor"), a wholly owned subsidiary of BNY Mellon Distributors Inc.,
formerly known as PFPC Distributors, Inc., and HighMark are parties to an
underwriting agreement dated December 1, 2008. HighMark has adopted 12b-1 Plans
(the "Plans") with respect to Class A, Class B, Class C and Class S Shares that
allow each Fund to pay distribution and service fees to the Distributor as
compensation for its services under the Plans. The Distributor receives a
distribution fee computed daily and paid monthly, at the annual rate of 0.25% of
the daily net assets attributable to each Fund's Class A Shares, 0.75% of the
daily net assets attributable to each Fund's Class B Shares, 0.75% of the daily
net assets attributable to each Fund's Class C Shares and 0.55% of the daily net
assets attributable to each Fund's Class S Shares, which may be used by the
Distributor to provide compensation for sales support and distribution
activities.
The Distributor voluntarily agreed to waive up to 0.25% of the distribution fee
attributable to Class A Shares, up to 0.75% of the distribution fee attributable
to Class B Shares, up to 0.75% of the distribution fee attributable to Class C
Shares, up to 0.55% of the distribution fee attributable to Class S Shares for
the Money Market Funds during the year ended July 31, 2010. The Distributor
waived the following amounts during the period:
FUND CLASS A CLASS B CLASS C CLASS S
- -------------------------------- --------- ------- ------- ---------
California Tax-Free Money Market .......... $ 959,892 N/A N/A $ 153,313
Diversified Money Market .................. 527,694 N/A N/A 652,966
Treasury Plus Money Market ................ 21,830 N/A N/A --
U.S. Government Money Market .............. 121,567 1,636 2,102 798,243
100% U.S. Treasury Money Market ........... 375,354 N/A N/A 837,115
HighMark has also adopted shareholder services plans/agreements permitting
payment of compensation to service providers, that may include the Bank, or its
affiliates, that have agreed to provide certain shareholder support services for
its customers who own Fiduciary, Class A or Class B Shares. In consideration for
such services, a service provider is entitled to receive compensation at the
annual rate of up to 0.25% of the average daily net assets of the applicable
class or classes of shares of the Funds. The service providers have agreed to
waive a portion of their fees for certain classes of all Funds for the year
ended July 31, 2010. For the year ended July 31, 2010, the Bank, or its
affiliates earned shareholder servicing fees, net of waivers, from the Funds in
the amount of approximately $1,466,677, which is included in the shareholder
servicing fees and the related waivers on the statement of operations.
A contingent deferred sales charge ("CDSC") is imposed on certain redemptions of
Class B Shares. The CDSC varies depending on the number of years from the
purchase of Class B Shares until the redemption of such shares.
YEARS SINCE CONTINGENT DEFERRED
PURCHASE MADE SALES CHARGE
-----------------------------------------------------------
First ........................... 5%
Second .......................... 4%
Third ........................... 3%
Fourth .......................... 3%
Fifth ........................... 2%
Sixth ........................... 1%
Seventh and Eighth .............. None
A CDSC of 1% is imposed when Class C Shares are redeemed within the first year
of purchase.
Union Bank, N.A. acts as custodian (the "Custodian") for the Funds. The
Custodian, as compensation for its services, receives a fee at the annual rate
of 0.00625% of each Fund's daily net assets. The Custodian plays no role in
determining the investment policies of the Funds or which securities are to be
purchased or sold in the Funds.
4. FEDERAL INCOME TAXES
It is each Fund's intention to continue to qualify as a regulated investment
company for federal income tax purposes and distribute all of its taxable income
and net capital gains. Accordingly, no provision for federal income taxes is
required.
HIGHMARK(R) FUNDS 33
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
JULY 31, 2010
The Funds have analyzed their tax positions taken on federal income tax returns
for all open tax years (tax years ended July 31, 2007 through 2009) and have
concluded that no provision for income tax is required in their financial
statements.
The timing and characterization of certain income and capital gains
distributions are determined annually in accordance with federal tax
regulations, which may differ from accounting principles generally accepted in
the United States of America. As a result, the net investment income (loss) and
net realized gain (loss) on investment transactions for a reporting period may
differ significantly from distributions during such period. These book/tax
differences may be temporary or permanent in nature. To the extent these
differences are permanent, they are charged or credited to paid-in capital,
undistributed realized gains or undistributed net investment income or
accumulated net realized gain, as appropriate, in the period that the
differences arise.
Permanent differences, primarily attributable to net operating losses and the
characterization of income and capital gain distributions have been reclassified
to/from the following accounts:
UNDISTRIBUTED UNDISTRIBUTED
NET INVESTMENT NET REALIZED PAID-IN
INCOME GAIN CAPITAL
-------------- ------------- -----------
California Tax-Free Money Market .................................. $ 49,628 $ (49,628) $ --
Diversified Money Market .......................................... 67,654 (67,655) 1
Treasury Plus Money Market ........................................ (6,621) -- 6,621
U.S. Government Money Market ...................................... -- 11,280 (11,280)
These reclassifications have no effect on net assets or net asset value per
share of the Funds.
The tax character of dividends and distributions paid on a tax basis during the
years or periods ended July 31, 2010 and July 31, 2009 (unless otherwise
indicated) were as follows:
LONG-TERM
TAX-EXEMPT ORDINARY CAPITAL RETURN OF
INCOME INCOME GAIN CAPITAL TOTAL
------------ ------------ --------- --------- -------------
California Tax-Free Money Market
2010 .................................... $ 168,843 $ 35 $ -- $ -- $ 168,878
2009 .................................... 12,357,513 60,135 -- -- 12,417,648
Diversified Money Market
2010 .................................... -- 6,301,864 -- -- 6,301,864
2009 .................................... -- 47,718,812 -- -- 47,718,812
Treasury Plus Money Market
2010 .................................... -- 79,768 -- -- 79,768
2009 (1) ................................ -- 258,914 -- -- 258,914
U.S. Government Money Market
2010 .................................... -- 770,164 -- -- 770,164
2009 .................................... -- 8,075,912 -- -- 8,075,912
100% U.S. Treasury Money Market
2010 .................................... -- 90,147 -- -- 90,147
2009 .................................... -- 1,599,214 -- -- 1,599,214
(1) Commenced operations on August 14, 2008.
As of July 31, 2010, the components of distributable earnings (accumulated
losses) on a tax basis were as follows:
UNDISTRIBUTED UNDISTRIBUTED UNDISTRIBUTED CAPITAL
ORDINARY TAX-EXEMPT LONG-TERM LOSS
INCOME INCOME CAPITAL GAIN CARRYFORWARD
------------- -------------- ------------- -------------
California Tax-Free Money Market ................ $ -- $ 54,118 $ -- $ --
Diversified Money Market ........................ 265,038 -- -- --
Treasury Plus Money Market ...................... 4,087 -- -- --
U.S. Government Money Market .................... 36,839 -- -- (16,581)
100% U.S. Treasury Money Market ................. 3,416 -- -- (115,585)
TOTAL
DISTRIBUTABLE
POST- UNREALIZED OTHER EARNINGS
OCTOBER APPRECIATION TEMPORARY (ACCUMULATED
LOSSES (DEPRECIATION) DIFFERENCES LOSSES)
------------- -------------- ------------- -------------
California Tax-Free Money Market ................ $ -- $ -- $ (4,189) $ 49,929
Diversified Money Market ........................ -- -- (186,527) 78,511
Treasury Plus Money Market ...................... -- -- (3,912) 175
U.S. Government Money Market .................... -- -- (36,840) (16,582)
100% U.S. Treasury Money Market ................. (67,276) -- (3,416) (182,861)
AMOUNTS DESIGNATED AS "--" ARE EITHER NOT APPLICABLE OR LESS THAN $1.00.
Post-October losses represent losses realized on investment transactions from
November 1, 2009 through July 31, 2010, that, in accordance with federal income
tax regulations, a Fund may elect to defer and treat as having arisen in the
following year.
34 HIGHMARK(R) FUNDS
For federal income tax purposes, capital loss carryforwards represent net
realized losses of a Fund that may be carried forward for a maximum period of
eight years and applied against future net capital gains. At July 31, 2010, the
Funds had capital loss carryforwards available to offset future realized capital
gains through the indicated expiration dates:
2011 2012 2013 2014 2015 2016 2017 2018 TOTAL
-------- ------ ------- ------ -------- ------- ------ ------ --------
U.S. Government Money Market ....... $ 14,850 $ -- $ 1,112 $ 618 $ -- $ -- $ -- $ 1 $ 16,581
100% U.S. Treasury Money Market .... 87,431 -- -- -- 16,174 11,980 -- -- 115,585
AMOUNTS DESIGNATED AS "--" ARE EITHER NOT APPLICABLE OR LESS THAN $1.00.
During the year ended July 31, 2010, capital loss carryforwards that were
utilized and/or expired are as follows:
U.S. Government Money Market ............ $ 11,280
100% U.S. Treasury Money Market ......... 1,362
5. CONCENTRATION OF CREDIT RISK
The California Tax-Free Money Market Fund invest in debt securities issued by
the State of California and its political subdivisions. The ability of the
issuers of the securities held by this Fund to meet their obligations may be
affected by economic and political developments in their respective states.
6. OTHER
At July 31, 2010, the percentage of total shares outstanding held by
shareholders of record (comprised of omnibus accounts held on behalf of
individual shareholders) owning 10% or greater of the aggregate total shares
outstanding for each Fund is as follows:
NO. OF %
SHAREHOLDERS OWNERSHIP
------------ ---------
California Tax-Free Money Market ................... 2 95%
Diversified Money Market ........................... 2 80%
Treasury Plus Money Market ......................... 1 92%
US Government Money Market ......................... 3 98%
100% US Treasury Money Market ...................... 2 61%
7. TEMPORARY GUARANTEE PROGRAM
On October 3, 2008, the Board approved the participation of each of the Money
Market Funds (the "Participating Funds") in the U.S. Department of the
Treasury's Temporary Guarantee Program (the "Program") for money market funds.
The Program was designed to protect the net asset value of certain shares of a
shareholder of record in the Participating Funds at the close of business on
September 19, 2008. The number of covered shares was the lesser of the number of
shares owned on September 19, 2008 or the number of shares owned on the date
when the payment was triggered. Payment was triggered if a Participating Fund's
net asset value fell below $0.995 and the Fund liquidated. Eligible shareholders
would receive a payment from the Program in the amount of the shortfall between
the Fund's net asset value and $1.00 per share for each covered share. Guarantee
payments under the Program would not exceed the amount available within the U.S.
Department of the Treasury's Exchange Stabilization Fund ("ESF") on the date of
payment. At the initial time of offering, ESF assets were approximately $50
billion.
Each Participating Fund incurred the expense of its participation in the Program
without regard to any expense caps currently in place. The fee for participating
in the Program ranged from 0.01% to 0.015%.
The Treasury twice extended the Program from December 1, 2008 through April 30,
2009 and from May 1, 2009 through September 18, 2009. The Program expired on
September 18, 2009.
The following table represents the expense charged to each Participating Fund
for the year ended July 31, 2010:
AMOUNT
CHARGED EXPENSE RATIO
---------- -------------
California Tax-Free Money Market ............ $ 65,130 0.009%
Diversified Money Market .................... 188,855 0.006%
Treasury Plus Money Market .................. 1 0.000%
U.S. Government Money Market ................ 38,945 0.004%
100% U.S. Treasury Money Market ............. 40,634 0.005%
8. NEW ACCOUNTING PRONOUNCEMENT
In January 2010, the Financial Accounting Standards Board ("FASB") issued
Accounting Standards Update ("ASU") No. 2010-06 "Improving Disclosures about
Fair Value Measurements." ASU No. 2010-06 amends FASB Accounting Standards
Codification Topic 820, Fair Value Measurements and Disclosures, to require
additional disclosures regarding fair value measurements. Certain disclosures
required by ASU No. 2010-06 are currently effective for interim and annual
reporting periods beginning after December 15, 2009, and other required
disclosures are effective for fiscal years beginning after December 15, 2010 and
for interim periods within those fiscal years. Management has evaluated the
impact and has incorporated the appropriate disclosures required by ASU No.
2010-06 in its financial statement disclosures.
9. SUBSEQUENT EVENTS
Management has evaluated the impact of all subsequent events on the Funds
through the date the financial statements were issued and has determined there
are no subsequent events that would require disclosure in or adjustment to the
financial statements.
HIGHMARK(R) FUNDS 35
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF THE HIGHMARK FUNDS:
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of the California Tax-Free Money Market Fund,
Diversified Money Market Fund, Treasury Plus Money Market Fund, U.S. Government
Money Market Fund, and 100% U.S. Treasury Money Market Fund (collectively, the
"Funds"), five of the twenty-nine portfolios constituting the HighMark Funds
(the "Trust") as of July 31, 2010, and the related statements of operations, the
statements of changes in net assets and the financial highlights for each of the
periods presented. 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 the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. The Trust
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Trust's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of July 31, 2010, by correspondence with the custodian
and brokers. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
California Tax-Free Money Market Fund, Diversified Money Market Fund, Treasury
Plus Money Market Fund, U.S. Government Money Market Fund, and 100% U.S.
Treasury Money Market Fund as of July 31, 2010, the results of their operations,
the changes in their net assets, and the financial highlights for each of the
periods presented, in conformity with accounting principles generally accepted
in the United States of America.
DELOITTE & TOUCHE LLP
Philadelphia, Pennsylvania
September 27, 2010
36 HIGHMARK(R) FUNDS
NOTICE TO SHAREHOLDERS (UNAUDITED)
For shareholders that do not have a July 31, 2010 tax year end, this notice is
for informational purposes only. For shareholders with a July 31, 2010 tax year
end, please consult your tax adviser as to the pertinence of this notice.
For the fiscal year ended July 31, 2010, each Fund is designating the following
items with regard to distributions paid during the year.
QUALIFIED
DIVIDENDS
AND QUALIFYING
CORPORATE DIVIDEND
15% RATE ORDINARY DIVIDENDS INCOME
LONG-TERM INCOME TAX EXEMPT RECEIVED (15% TAX U.S. QUALIFIED QUALIFIED
CAPITAL GAIN DISTRIBUTIONS INCOME DEDUCTION RATE FOR GOVERNMENT INTEREST SHORT-TERM
FUND DISTRIBUTION (TAX BASIS) DISTRIBUTIONS TOTAL (1) QDI) (2) INTEREST (3) INCOME CAPITAL GAIN
- ------------------------------------------------------------------------------------------------------------------------------------
California Tax-Free
Money Market (4) .... 0.00% 0.02% 99.98% 100.00% 0.00% 0.00% 0.00% 100.00% 0.00%
Diversified Money
Market .............. 0.00% 100.00% 0.00% 100.00% 0.00% 0.00% 0.00% 99.96% 0.00%
Treasury Plus Money
Market .............. 0.00% 100.00% 0.00% 100.00% 0.00% 0.00% 100.00% 99.99% 0.00%
U.S. Government Money
Market .............. 0.00% 100.00% 0.00% 100.00% 0.00% 0.00% 100.00% 100.00% 0.00%
100% U.S. Treasury Money
Market (5) .......... 0.00% 100.00% 0.00% 100.00% 0.00% 0.00% 100.00% 100.00% 0.00%
- --------------------
(1) QUALIFYING DIVIDENDS REPRESENT DIVIDENDS THAT QUALIFY FOR THE CORPORATE
DIVIDENDS RECEIVED DEDUCTION AND IS REFLECTED AS A PERCENTAGE OF "ORDINARY
INCOME DISTRIBUTIONS."
(2) THE PERCENTAGE IN THIS COLUMN REPRESENTS THE AMOUNT OF "QUALIFYING
DIVIDEND INCOME" AS CREATED BY THE JOBS AND GROWTH TAX RELIEF
RECONCILIATION ACT OF 2003 AND IS REFLECTED AS A PERCENTAGE OF "ORDINARY
INCOME DISTRIBUTIONS." IT IS THE INTENTION OF EACH OF THE AFOREMENTIONED
FUNDS TO DESIGNATE THE MAXIMUM AMOUNT PERMITTED BY THE LAW.
(3) "U.S. GOVERNMENT INTEREST" REPRESENTS THE AMOUNT OF INTEREST THAT WAS
DERIVED FROM DIRECT U.S. GOVERNMENT OBLIGATIONS AND DISTRIBUTED DURING THE
FISCAL YEAR. THIS AMOUNT IS REFLECTED AS A PERCENTAGE OF TOTAL ORDINARY
INCOME DISTRIBUTIONS (THE TOTAL OF SHORT-TERM CAPITAL GAIN AND NET
INVESTMENT INCOME DISTRIBUTIONS). GENERALLY, INTEREST FROM DIRECT U.S.
GOVERNMENT OBLIGATIONS IS EXEMPT FROM STATE INCOME TAX. HOWEVER, FOR
SHAREHOLDERS OF EACH FUND, EXCEPT FOR THE 100% U.S. TREASURY MONEY MARKET
FUND, WHO ARE RESIDENTS OF CALIFORNIA, CONNECTICUT AND NEW YORK, THE
STATUTORY THRESHOLD REQUIREMENTS WERE NOT SATISFIED TO PERMIT EXEMPTION OF
THESE AMOUNTS FROM STATE INCOME.
(4) FOR RESIDENTS OF CALIFORNIA: THE CALIFORNIA TAX-FREE MONEY MARKET FUND MET
THE QUARTERLY DIVERSIFICATION TEST FOR THE FISCAL YEAR ENDED JULY 31,
2010.
(5) FOR RESIDENTS OF CALIFORNIA, CONNECTICUT AND NEW YORK: THE 100% U.S.
TREASURY MONEY MARKET FUND MET THE QUARTERLY DIVERSIFICATION TEST FOR THE
FISCAL YEAR ENDED JULY 31, 2010. ALL INCOME EARNED BY THE 100% U.S.
TREASURY MONEY MARKET FUND IS DESIGNATED TAX EXEMPT INCOME FOR STATE
INCOME TAX PURPOSES.
HIGHMARK(R) FUNDS 37
TRUSTEES AND OFFICERS (UNAUDITED)
Information pertaining to the Trustees and officers of the Trust is set forth
below. The Statement of Additional Information ("SAI") includes additional
information about Fund directors. The SAI is available, without charge, upon
request, by calling 1-800-433-6884. The following trustees and officers list is
current as of September 21, 2010.
- ------------------------------------------------------------------------------------------------------------------------------------
TERM OF NUMBER OF PORTFOLIOS OTHER
OFFICE IN HIGHMARK DIRECTORSHIPS
AND PRINCIPAL FUNDS HELD BY
POSITION(S) LENGTH OF OCCUPATION(S) COMPLEX TRUSTEE
NAME, HELD WITH TIME DURING PAST OVERSEEN DURING PAST
ADDRESS(1) AND AGE THE TRUST SERVED(2) 5 YEARS BY TRUSTEE(3) 5 YEARS(4)
- ------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
David Benkert Trustee, Since 3/04 From April 1, 1992 to present, 29 None
53 Chairman Director, Navigant Consulting, Inc.
(financial consulting).
Thomas L. Braje Trustee Since 6/87 Prior to retirement in October 1996, 29 None
67 Vice President and Chief Financial
Officer of Bio Rad Laboratories, Inc.
Evelyn S. Dilsaver Trustee, Audit Since 1/08 Since January 2010, Member, Board of 29 Longs Drug
55 Committee Directors of Tempur-Pedic Corporation
Chairman International Inc. (mattress (LDG)(5);
manufacturer). Since November 2009, Aeropostale,
Member, Board of Directors of Blue Inc. (ARO);
Shield of California (health Tamalpais
insurance). Formerly Executive Vice Bancorp
President for The Charles Schwab (TAMB);
Corporation, and President and Chief Tempur-Pedic
Executive Officer of Charles Schwab International
Investment Management, Inc. Prior to Inc. (TPX)
July 2004, Senior Vice President,
Asset Management Products and
Services, Charles Schwab Investment
Management, Inc. Prior to July 2003,
Executive Vice President - Chief
Financial Officer and Chief
Administrative Officer for U.S.
Trust Company, then a subsidiary of
The Charles Schwab Corporation.
David A. Goldfarb Trustee Since 6/87 Since January 2010, owner of David A. 29 None
68 Goldfarb, CPA. From 1987 to 2009,
Partner, Goldfarb & Simens Certified
Public Accountants.
Michael L. Noel Trustee, Since 12/98 President, Noel Consulting Company 29 Avista Corp.
69 Vice Chairman, since 1998. Member, Saber Partners (AVA)
Governance (financial advisory firm) since
Committee 2002. Member, Board of Directors,
Chairman Avista Corp. (utility company),
since January 2004. Member, Board of
Directors, SCAN Health Plan, since
1997. From April 1997 to December
1998, Member of HighMark Funds
Advisory Board.
Robert M. Whitler(6) Trustee Since 12/98 Retired from Union Bank, N.A. 29 None
72 (formerly Union Bank of California,
N.A.) in 1996. Served as Executive
Vice President, Chief Trust Officer
and Head of the Trust Investments
Group.
INTERESTED TRUSTEES AND OFFICERS
Earl A. Malm II(7) Trustee, Since 12/05 President, Chief Executive Officer 29 N/A
350 California Street President (President) and Director of the Adviser since
San Francisco, CA 94104 Since 1/08 October 2002. Chairman of the Board
61 (Trustee) of the Adviser since February 2005.
Colleen Cummings Assistant Since 6/10 Vice President and Director, Client N/A N/A
4400 Computer Drive Treasurer Services Administration, BNY Mellon
Westborough, MA 01581 Investment Servicing (US) Inc.
39 (formerly known as PNC Global
Investment Servicing (U.S.) Inc.)
since 2004.
38 HIGHMARK(R) FUNDS
- ------------------------------------------------------------------------------------------------------------------------------------
TERM OF NUMBER OF PORTFOLIOS OTHER
OFFICE IN HIGHMARK DIRECTORSHIPS
AND PRINCIPAL FUNDS HELD BY
POSITION(S) LENGTH OF OCCUPATION(S) COMPLEX TRUSTEE
NAME, HELD WITH TIME DURING PAST OVERSEEN DURING PAST
ADDRESS(1) AND AGE THE TRUST SERVED(2) 5 YEARS BY TRUSTEE(3) 5 YEARS(4)
- ------------------------------------------------------------------------------------------------------------------------------------
Pamela O'Donnell Vice President, Since 12/05 Vice President and Director of Mutual N/A N/A
350 California Street Treasurer and (Treasurer) Fund Administration of the Adviser
San Francisco, CA 94104 Chief Financial Since 3/09 since 2005. Vice President of
46 Officer (Vice Operations and Client Service of the
President) Adviser from 2003 to 2005.
Since 6/10
(Chief
Financial
Officer)
Catherine M. Vacca Chief Since 9/04 Senior Vice President and Chief N/A N/A
350 California Street Compliance Compliance Officer of the Adviser
San Francisco, CA 94104 Officer since July 2004.
53
Helen Robichaud Secretary Since 3/10 Vice President and Counsel, BNY N/A N/A
99 High Street, 27th Floor Mellon Investment Servicing (US)
Boston, MA 02110 Inc. (formerly known as PNC Global
58 Investment Servicing (U.S.) Inc.)
since January 2010. Director of Fund
Regulatory Services of J.P. Morgan
from June 2008 to December 2009.
Associate General Counsel of J.P.
Morgan from August 1995 to June
2008.
Carol Gould Vice President Since 9/08 Assistant Vice President and Manager N/A N/A
99 High Street, 27th Floor and Assistant of BNY Mellon Investment Servicing
Boston, MA 02110 Secretary (US) Inc. (formerly known as PNC
49 Global Investment Servicing (U.S.)
Inc.) since November 2004.
- --------------------
(1) Each Trustee may be contacted by writing to the Trustee c/o HighMark
Funds, 350 California Street, San Francisco, CA 94104.
(2) Each Trustee shall hold office during the lifetime of the Trust until he
or she dies, resigns, retires or is removed or, if sooner, until the next
meeting of shareholders following his election or appointment as Trustee
at which Trustees are elected and until his successor shall have been
elected and qualified in accordance with the Trust's Declaration of Trust.
(3) The "HighMark Funds Complex" consists of all registered investment
companies for which the Adviser serves as investment adviser. As of July
31, 2010, the HighMark Funds Complex consisted of 29 Funds.
(4) Directorships of companies required to report to the Securities and
Exchange Commission under the Securities Exchange Act of 1934 (i.e.,
"public companies") or other investment companies registered under the
1940 Act.
(5) Ms. Dilsaver ceased being a director of Longs Drug Corporation in
connection with the acquisition of the company by CVS Caremark in 2008.
(6) Mr. Whitler is expected to retire on December 31, 2010.
(7) Earle Malm is an Interested Trustee by virtue of his position with the
Adviser.
HIGHMARK(R) FUNDS 39
BOARD APPROVAL OF THE EXISTING ADVISORY AND SUB-ADVISORY AGREEMENTS (UNAUDITED)
The Board of Trustees, including all of the trustees who are not "interested
persons" (as defined in the 1940 Act) of HighMark or the Adviser ("Independent
Trustees"), considers matters bearing on the advisory agreement between HighMark
and the Adviser (the "Investment Advisory Agreement") at most of its meetings
throughout the year.
Once a year, usually in the summer, the Board of Trustees meets to extensively
review the Investment Advisory Agreement to determine whether to approve the
continuation of the agreement with respect to the Funds and other series of
HighMark for an additional one-year period. In connection with this annual
determination, the Trustees receive materials that the Adviser believes to be
reasonably necessary for the Trustees to evaluate the agreement. With respect to
the Funds, these materials generally include, among other items,
o information on the investment performance of the Funds and the
performance of peer groups of mutual funds and the Funds'
performance benchmarks,
o information on the Funds' advisory fees and other expenses,
including information comparing the Funds' expenses to those of peer
groups of mutual funds and information about any applicable expense
caps and fee "breakpoints" (fee rates that decline as a percentage
of Fund assets as Fund assets reach higher levels),
o sales and redemption data for the Funds,
o information about the profitability of the Adviser with respect to
its provision of services to the Funds and
o other information obtained through the completion of an
informational questionnaire sent to the Adviser by the Trustees.
The Board of Trustees may also consider other matters such as:
o the Adviser's financial results and financial condition,
o the size, education and experience of the Adviser's investment staff
and its use of technology, external research and trading cost
measurement tools,
o the procedures employed to determine the value of the Funds' assets,
o the allocation of the Funds' brokerage including allocations, if
any, to brokers affiliated with the Adviser and the use of "soft"
commission dollars to pay for research services for the Adviser,
o the Adviser's resources devoted to, and record of compliance with,
the Funds' investment policies and restrictions, policies on
personal securities transactions and other compliance policies and
o the outlook for the economy generally and for the mutual fund
industry in particular.
Throughout the process, the Trustees are afforded the opportunity to ask
questions of and request additional materials from the Adviser. The Trustees
also meet with, and ask questions of, representatives of the Adviser, either in
person or by conference telephone.
The Board of Trustees most recently approved the continuation of the Investment
Advisory Agreement with respect to all of the Funds at meetings held on June
23-24, 2010.
In considering whether to approve the continuation of the Investment Advisory
Agreement with respect to the Funds at the meetings held on June 23-24, 2010,
the Board of Trustees did not identify any single factor as determinative.
Matters considered by the Trustees in connection with their approval of the
Investment Advisory Agreement as it relates to the Funds included the following:
THE NATURE, EXTENT AND QUALITY OF THE SERVICES PROVIDED TO THE FUNDS UNDER THE
INVESTMENT ADVISORY AGREEMENT. The Trustees considered the nature, extent and
quality of the services provided by the Adviser and its affiliates to the Funds
and the resources dedicated to the Funds by the Adviser and its affiliates. For
each Fund, the Trustees also considered the benefits to shareholders of
investing in a mutual fund that is part of a family of funds offering a variety
of investment disciplines and providing for a variety of fund and shareholder
services. After reviewing these and related factors and discussions with Fund
management, the Trustees concluded, within the context of their overall
conclusions regarding the Investment Advisory Agreement, that the nature, extent
and quality of services provided supported the renewal of the Investment
Advisory Agreement with respect to the Funds.
INVESTMENT PERFORMANCE OF THE FUNDS AND THE ADVISER. As noted above, the
Trustees received information about the performance of the Funds over various
time periods, including information comparing the performance of the Funds to
the performance of peer groups of funds and the Funds' respective performance
benchmarks. In addition, the Trustees held various discussions with the Adviser
about Fund performance at each regular board meeting throughout the year. With
respect to each Fund, the Board of Trustees concluded that the Fund's
performance supported the renewal of the Investment Advisory Agreement relating
to that
40 HIGHMARK(R) FUNDS
Fund. In the case of each Fund that had performance that lagged that of a
relevant peer group for certain (although not necessarily all) periods
considered, the Board of Trustees concluded that other factors relevant to
performance supported renewal of the Investment Advisory Agreement with respect
to such Fund. These factors varied from Fund to Fund, but included one or more
of the following: (1) that the Fund's performance, although lagging in certain
recent periods, was strong over the longer term; (2) that the underperformance
was attributable, to a significant extent, to investment decisions by the
Adviser that were reasonable and consistent with the Fund's investment objective
and policies; (3) that the Fund's performance was competitive when compared to
other relevant performance benchmarks or peer groups; and (4) that the Adviser
has taken or is taking or formulating steps designed to help improve the Fund's
investment performance. The Trustees also considered the Adviser's performance
and reputation generally, the Funds' performance as a fund family generally, and
the historical responsiveness of the Adviser to Trustee concerns about
performance and the willingness of the Adviser to take steps intended to improve
performance. After reviewing these and related factors and discussions with Fund
management, the Trustees concluded, within the context of their overall
conclusions regarding the Investment Advisory Agreement with respect to the
Funds, that the performance of the Funds and the Adviser supported the renewal
of the Agreement with respect to the Funds.
THE COSTS OF THE SERVICES TO BE PROVIDED AND PROFITS TO BE REALIZED BY THE
ADVISER AND ITS AFFILIATES FROM ITS RELATIONSHIPS WITH THE FUNDS. The Trustees
considered and had discussions with Fund management regarding the fees charged
to the Funds for advisory services as well as the total expense levels of the
Funds. This information included comparisons of the Funds' advisory fees and
total expense levels to those of their peer groups and information about the
advisory fees charged by the Adviser to other funds and accounts with similar
investment programs, if any. In considering the fees charged to such other funds
or accounts, the Trustees considered, among other things, the differences
between managing mutual funds as compared to other types of accounts, including
the additional resources required to manage mutual fund assets effectively. In
evaluating each Fund's advisory fees, the Trustees also took into account the
demands, complexity and quality of the investment management of such Fund. The
Trustees also considered any compensation received by the Adviser and its
affiliates from the Funds for providing services other than advisory services.
The Trustees reviewed information provided by the Adviser as to the
profitability of the Adviser and its affiliates' relationships with the Funds,
and information about the allocation of expenses used to calculate
profitability. When reviewing profitability, the Trustees also considered
information about the performance of the relevant Funds, the expense levels of
the Funds, and whether the Adviser had implemented breakpoints in its fee
schedules and/or expense caps with respect to such Funds. After reviewing these
and related factors and discussions with Fund management, the Trustees
concluded, within the context of their overall conclusions regarding the
Investment Advisory Agreement, that the advisory fees charged to each of the
Funds were fair and reasonable, and that the costs of these services generally
and the related profitability of the Adviser and its affiliates in respect of
their relationships with the Funds supported the renewal of the Investment
Advisory Agreement with respect to the Funds.
ECONOMIES OF SCALE. The Trustees considered the existence of any economies of
scale (i.e. decreasing per unit costs as a fund increases in asset size) in the
provision of services by the Adviser and whether those economies are shared with
the Funds through breakpoints in their investment advisory fees or other means,
such as expense waivers. The Trustees noted that all of the share classes of all
of the Funds benefited from expense caps. In considering these issues, the
Trustees also took note of the costs of the services provided (both on an
absolute and a relative basis) and the profitability to the Adviser and its
affiliates of their relationships with the Funds, as discussed above. After
reviewing these and related factors and discussions with Fund management, the
Trustees concluded, within the context of their overall conclusions regarding
the Investment Advisory Agreement, that the extent to which any economies of
scale are shared with the Funds supported the renewal of the Investment Advisory
Agreement with respect to the Funds.
The Trustees also considered other factors, which included but were not limited
to the following:
o whether each Fund has operated in accordance with its investment
objective and the Fund's record of compliance with its investment
policies and restrictions, and the compliance programs of the Funds
and the Adviser.
o the nature, quality, cost and extent of administrative, custody,
securities lending and shareholder services performed by the Adviser
and its affiliates, both under the Investment Advisory Agreement and
under other separate agreements with or with respect to HighMark.
o so-called "fallout benefits" to the Adviser, such as the engagement
of affiliates of the Adviser to provide custody, securities lending,
administration and other services to the Funds, and the benefits of
investment research provided to the Adviser by reason of brokerage
commissions generated by the Funds' securities transactions. The
Trustees considered the possible conflicts of interest associated
with these fallout and other benefits, and the reporting, disclosure
and other processes in place to disclose and monitor such possible
conflicts of interest.
Based on their evaluation of all factors that they deemed to be material,
including those factors described above, and assisted by the advice of
independent counsel, the Trustees concluded that the Investment Advisory
Agreement should be continued with respect to the Funds through July 31, 2011.
HIGHMARK(R) FUNDS 41
FUND INFORMATION (UNAUDITED)
JULY 31, 2010
HighMark Funds is committed to managing our mutual funds in the best interests
of our shareholders. The Board of Trustees of HighMark Funds has delegated the
authority to vote proxies on behalf of the Funds that own voting securities to
the Adviser. The Board has authorized the Adviser to delegate proxy voting
authority with respect to a Fund to that Fund's sub-adviser. A description of
the proxy voting guidelines and policies that the Funds use to determine how to
vote proxies relating to portfolio securities is available (i) without charge,
upon request by calling our investor services desk at 1-800-433-6884; (ii) on
the SEC's website at http://www.sec.gov; and (iii) on HighMark Funds' website at
http://www.highmarkfunds.com. Information relating to how a Fund voted proxies
relating to portfolio securities during the most recent 12-month period ended
June 30 is available (i) without charge, upon request by calling our investor
services desk at 1-800-433-6884; (ii) on the SEC's website at
http://www.sec.gov; and (iii) on the HighMark Funds' website at
http://www.highmarkfunds.com. The Trust files its complete schedule of portfolio
holdings with the Securities and Exchange Commission for the first and third
quarters of each fiscal year on Form N-Q within sixty days after the end of the
period. The Funds' Forms N-Q are (i) available without charge upon request by
calling our investor services desk at 1-800-433-6884; (ii) available on the
SEC's website at http://www.sec.gov; (iii) available on the HighMark Funds'
website at http://www.highmarkfunds.com; and (iv) may be reviewed and copied at
the SEC's Public Reference Room in Washington, DC. Information on the operation
of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
FIDUCIARY SHARES INFORMATION
FUND CUSIP TICKER FUND #
CA TAX-FREE MONEY MARKET 431114842 HMCXX 487
DIVERSIFIED MONEY MARKET 431114883 HMDXX 484
TREASURY PLUS MONEY MARKET 431123108 HMFXX 2219
U.S. GOVERNMENT MONEY MARKET 431114701 HMGXX 485
100% U.S. TREASURY MONEY MARKET 431114503 HMTXX 486
RETAIL SHARES INFORMATION
FUND CUSIP TICKER FUND #
CA TAX-FREE MONEY MARKET
CLASS A SHARES 431114859 HMAXX 476
DIVERSIFIED MONEY MARKET
CLASS A SHARES 431114800 HMVXX 473
TREASURY PLUS MONEY MARKET
CLASS A SHARES 431123306 HMPXX 2218
U.S. GOVERNMENT MONEY MARKET
CLASS A SHARES 431114602 HMUXX 474
CLASS B SHARES 431114495 HGBXX 450
CLASS C SHARES 431112531 HGTXX 1499
100% U.S. TREASURY MONEY MARKET
CLASS A SHARES 431114404 HMRXX 475
CLASS S SHARES INFORMATION
CA TAX-FREE MONEY MARKET 431112705 HCSXX 1727
DIVERSIFIED MONEY MARKET 431112408 HDSXX 1728
TREASURY PLUS MONEY MARKET 431123207 HMSXX 2220
42 HIGHMARK(R) FUNDS
CLASS S SHARES INFORMATION (CONTINUED)
U.S. GOVERNMENT MONEY MARKET 431112507 HGSXX 1729
100% U.S. TREASURY MONEY MARKET 431112606 HUSXX 1730
HIGHMARK(R) FUNDS 43
SERVICE PROVIDERS & BOARD OF TRUSTEES
INVESTMENT ADVISER & ADMINISTRATOR
HighMark Capital Management, Inc.
350 California Street, Suite 1600
San Francisco, CA 94104
CUSTODIAN
Union Bank, N.A.
350 California Street
San Francisco, CA 94104
DISTRIBUTOR
HighMark Funds Distributors, Inc.
760 Moore Road
King of Prussia, PA 19406
LEGAL COUNSEL
Ropes & Gray LLP
Three Embarcadero Center
San Francisco, CA 94111-4006
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Deloitte & Touche LLP
1700 Market Street
Philadelphia, PA 19103
TRANSFER AGENT
Boston Financial Data Services
PO Box 8416
Boston, MA 02266
BOARD OF TRUSTEES
David E. Benkert, Chairman
Thomas L. Braje
Evelyn S. Dilsaver
David A. Goldfarb
Michael L. Noel
Robert M. Whitler
Earle A. Malm, II
44 HIGHMARK(R) FUNDS
- --------------------------------------------------------------------------------
TO LEARN MORE ABOUT HIGHMARK, VISIT US AT
WWW.HIGHMARKFUNDS.COM OR CALL:
INVESTOR SERVICES DESK
1.800.433.6884
INVESTMENT PROFESSIONAL SUPPORT DESK
1.800.455.5609
THANK YOU FOR YOUR INVESTMENT.
[HIGHMARK FUNDS LOGO](R)
-----------------------------
Mutual Funds:
o are not FDIC insured
o have no bank guarantee
o may lose value
-----------------------------
[HIGHMARK FUNDS LOGO](R)
445 South Figueroa Street o Suite 306 o Los Angeles o California o 90071
WWW.HIGHMARKFUNDS.COM
HMK-AR-003-0100
84806-A (07/10)
Item 2. Code of Ethics.
(a) The registrant, as of the end of the period covered by this report,
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.
(c) There have been no amendments, during the period covered by this
report, to a provision of the code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing
similar functions, regardless of whether these individuals are employed
by the registrant or a third party, and that relates to any element of
the code of ethics description.
(d) The registrant has not granted any waivers, including an implicit
waiver, from a provision of the code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing
similar functions, regardless of whether these individuals are employed
by the registrant or a third party, that relates to one or more of the
items set forth in paragraph (b) of this item's instructions.
Item 3. Audit Committee Financial Expert.
As of the end of the period covered by the report, the registrant's Board of
Trustees has determined that David A. Goldfarb, Evelyn S. Dilsaver and Robert M.
Whitler are each qualified to serve as an audit committee financial expert
serving on its audit committee and that they are each "independent," as defined
by Item 3 of Form N-CSR.
Item 4. Principal Accountant Fees and Services.
Audit Fees
(a) 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 are
$592,100 for 2009 and $595,500 for 2010.
Audit-Related Fees
(b) 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 are $33,200 for 2009 and $36,600 for 2010.
The above "Audit-Related Fees" were billed for the three security
count verifications for the Funds as required under sections (f) of
Rule 17f-2 of the Investment Company Act of 1940 (the "Act").
Tax Fees
(c) 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 are $90,200 for 2009 and
$94,650 for 2010.
Tax fees represent fees paid for the review of Federal and state income
and excise tax returns for certain Funds within the Trust.
All Other Fees
(d) 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 are
$44,802 for 2009 and $39,607 for 2010.
(e)(1) To the extent required by applicable law, the Trust's audit
committee approves, in advance, the engagement of all audit and
non-audit services rendered to the Trust by the Trust's independent
registered public accounting firm and all non-audit services rendered
by the Trust's independent registered public accounting firm to the
investment adviser and to certain of the investment adviser's
affiliates; provided, however, that the audit committee may implement
policies and procedures pursuant to which such services are
pre-approved other than by the full audit committee, subject to
subsequent reporting of any such pre-approvals to the audit committee
(generally at the audit committee's next regular meeting).
(e)(2) Percentage of services described in each of paragraphs (b) through
(d) of this Item that were approved by the audit committee pursuant to
the de minimis exception in paragraph (c)(7)(i)(C) of Rule 2-01 of
Regulation S-X are as follows:
(b) 0%
(c) 0%
(d) 0%
(f) 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
was no greater than fifty percent.
(g) 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 was $168,202 for 2009 and $615,857 for 2010.
(h) The registrant's audit committee of the board of directors has
considered whether the provision of non-audit services that were
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
investment adviser that provides ongoing services to the registrant
that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.
Item 5. Audit Committee of Listed registrants.
Not applicable.
Item 6. Investments.
(a) Schedule of Investments in securities of unaffiliated issuers as of
the close of the reporting period is included as part of the report to
shareholders filed under Item 1 of this form.
(b) Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which the shareholders
may recommend nominees to the registrant's Board of Trustees, where those
changes were implemented after the registrant last provided disclosure in
response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR
229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)),
or this Item.
Item 11. Controls and Procedures.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of the report that includes the disclosure
required by this paragraph, based on their evaluation of these
controls and procedures required by Rule 30a-3(b) under the 1940 Act
(17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the
Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or
240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the registrant's second
fiscal quarter of the period covered by this report that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
Item 12. Exhibits.
(a)(1) Code of ethics, or any amendment thereto, that is the subject of
disclosure required by Item 2 is attached hereto.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(3) Not applicable.
(b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and
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) HighMark Funds
--------------------------------------------------------------------
By (Signature and Title)* /s/ Earle A. Malm II
-------------------------------------------------------
Earle A. Malm II, President
(principal executive officer)
Date 9/29/10
----------------------------------------------------------------------------
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/ Earle A. Malm II
-------------------------------------------------------
Earle A. Malm II, President
(principal executive officer)
Date 9/29/10
----------------------------------------------------------------------------
By (Signature and Title)* /s/ Pamela O'Donnell
-------------------------------------------------------
Pamela O'Donnell, Chief Financial Officer
(principal financial officer)
Date 9/29/10
----------------------------------------------------------------------------
- ----------
* Print the name and title of each signing officer under his or her signature.