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
---------
HighMark Funds
--------------------------------------------------
(Exact name of registrant as specified in charter)
350 California Street, Suite 1600
San Francisco, CA 94104
--------------------------------------------------
(Address of principal executive offices) (Zip code)
John M. Loder, Esq.
Ropes & Gray LLP
Three Embarcadero Center
San Francisco, CA 94111
--------------------------------------------------
(Name and address of agent for service)
registrant's telephone number, including area code: 1-800-433-6884
--------------
Date of fiscal year end: July 31, 2011
-------------
Date of reporting period: July 31, 2011
--------------
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.
--------------------------------------------------------------------------------
JULY 31, 2011
--------------------------------------------------------------------------------
HIGHMARK
The smarter approach to investing.
EQUITY
ASSET ALLOCATION
FIXED-INCOME
ANNUAL
--------------------------------------------------------
report
[GRAPHIC OMITTED]
[HIGHMARK FUNDS(R) LOGO]
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
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 ...................................... 126
statements of operations .................................................. 138
statements of changes in net assets ....................................... 144
financial highlights ...................................................... 164
notes to financial statements ............................................. 176
report of independent registered public accounting firm ................... 189
notice to shareholders .................................................... 190
trustees and officers ..................................................... 192
board approval of the existing advisory and sub-advisory agreements ....... 194
fund information .......................................................... 199
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 3.7%
PRAXAIR 3.0
EXXONMOBIL 2.5
APPLE 2.4
OCCIDENTAL PETROLEUM 2.1
GOOGLE, CL A 2.0
ORACLE 1.9
JPMORGAN CHASE 1.9
WELLS FARGO 1.9
PHILIP MORRIS INTERNATIONAL 1.7
FUND SECTORS
% OF
SECTOR PORTFOLIO
------ ---------
INFORMATION TECHNOLOGY 13.4%
ENERGY 11.6
INDUSTRIAL 11.0
FINANCIALS 9.6
CONSUMER STAPLES 8.3
REPURCHASE AGREEMENT 7.6
CONSUMER DISCRETIONARY 7.0
MATERIALS 6.8
HEALTH CARE 6.7
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS 3.9
ASSET-BACKED SECURITIES 3.8
MORTGAGE-BACKED SECURITIES 3.7
U.S. TREASURY OBLIGATIONS 2.0
UTILITIES 1.5
MUNICIPAL BONDS 1.2
TELECOMMUNICATION SERVICES 1.1
REGISTERED INVESTMENT COMPANY 0.5
FOREIGN GOVERNMENT 0.3
* EXCLUDES SHORT-TERM SECURITIES.
BALANCED FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2011, HighMark Balanced Fund (the "Fund")
produced a total return of 12.72% (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 19.65%, 4.44% and 13.61%,
respectively, for the same period.
FACTORS AFFECTING PERFORMANCE
The first half of the Fund's reporting period was generally marked by improving
economic conditions, with positive GDP growth and legislative action to extend
the current level of taxation. Fears of a double-dip recession that existed at
the beginning of the Fund's reporting period subsided as the Federal Reserve
instituted its quantitative easing program commonly known as QE2. The market
rally that ensued had a brief pull-back in October over concerns about European
sovereign debt, but the economy continued its rebound during the reporting
period overall.
After a strong start to the second half of the Fund's reporting period, the
economy and financial markets became much more volatile. The Japanese
earthquake, renewed fears over European sovereign debt, the expiration of QE2
and a potential slowdown in emerging market countries all negatively impacted
the U.S. stock market toward the end of the reporting period.
The Fund's relative underperformance during the reporting period was due largely
to adverse stock selection, primarily in the energy, materials, consumer
discretionary and financial sectors. The impact from stock selection was
partially offset by the Fund's overweight position in the energy sector and its
underweight position in the financial sector.
Specific stocks that detracted from performance included Ecolab, Staples and The
Hanover Group. In the case of Ecolab, in spite of the relative underperformance,
the fundamental investment case remained strong during the period, and the Fund
continues to own a significant position in the stock. However, with regard to
both Staples and The Hanover Group, poor relative performance was an indication
of materially adverse changes to the underlying investment theses of why we held
these stocks. As a result, both stocks were sold during the reporting period.
Although the Fund had a number of strong stock performances during the reporting
period, including Danaher in the industrial sector and EMC and Apple in the
information technology sector, the Fund's equity portion underperformed its
benchmark for the reporting period.
With respect to the Fund's fixed income portion, while the short duration of the
Fund's fixed income holdings was a slight detractor from performance relative to
its benchmark, corporate earnings in particular were strong during the reporting
period, as the business and manufacturing sectors took advantage of low
financing rates and utilized cost cutting measures to repair balance sheets. As
a result, credit quality was again a factor in the Fund's fixed income
performance, as investment-grade corporate bonds outperformed U.S. Treasuries by
nearly 3% during the reporting period. The Fund was overweight in corporate
bonds, and this was a major contributor to the Fund's fixed income
outperformance relative to its benchmark.
The outperformance of the Fund's fixed income investments was not enough to
overcome the underperformance of the Fund's equity investments, and the Fund
underperformed its benchmark as a whole for 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]
Highmark
Highmark Balanced 60/40 Hybrid Barclays Morningstar
Balanced Fund of the Capital U.S. Moderate
Fund Class A Fiduciary following two S&P 500 Aggregate Allocation
Shares Shares indices: Index++ Bond Index++ Category
------------- --------- ------------- -------- ------------ -----------
7/01 $ 9,450 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000
7/02 $ 8,083 $ 8,576 $ 8,810 $ 7,637 $ 10,753 $ 8,795
7/03 $ 8,660 $ 9,202 $ 9,613 $ 8,450 $ 11,336 $ 9,464
7/04 $ 9,324 $ 9,939 $ 10,565 $ 9,562 $ 11,884 $ 10,321
7/05 $ 10,170 $ 10,864 $ 11,660 $ 10,906 $ 12,454 $ 11,571
7/06 $ 10,527 $ 11,274 $ 12,109 $ 11,493 $ 12,636 $ 12,141
7/07 $ 11,699 $ 12,567 $ 13,550 $ 13,346 $ 13,338 $ 13,633
7/08 $ 10,916 $ 11,748 $ 12,967 $ 11,866 $ 14,158 $ 12,793
7/09 $ 9,993 $ 10,780 $ 11,807 $ 9,498 $ 15,270 $ 11,286
7/10 $ 11,216 $ 12,138 $ 13,250 $ 10,812 $ 16,630 $ 12,628
7/11 $ 12,618 $ 13,682 $ 15,053 $ 12,937 $ 17,369 $ 14,384
++ Indexes are unmanaged and do not incur fees, expenses or other costs.
----------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR 5 YEAR 10 YEAR EXPENSE EXPENSE
RETURN RETURN RETURN RETURN RATIO++ RATIO++
----------------------------------------------------------------------------------------------
Fiduciary Shares 12.72% 5.21% 3.95% 3.18% 1.60% 0.99%
----------------------------------------------------------------------------------------------
Class A Shares 12.50% 4.95% 3.69% 2.93% 1.85% 1.24%
----------------------------------------------------------------------------------------------
Class A Shares w/load* 6.30% 2.99% 2.52% 2.35% 1.85% 1.24%
----------------------------------------------------------------------------------------------
Class B Shares 11.80% 4.32% 3.07% 2.29% 2.35% 1.84%
----------------------------------------------------------------------------------------------
Class B Shares w/load** 6.80% 3.39% 2.72% 2.29% 2.35% 1.84%
----------------------------------------------------------------------------------------------
Class C Shares 11.80% 4.31% 3.06% 2.28% 2.35% 1.84%
----------------------------------------------------------------------------------------------
Class C Shares w/load*** 10.80% 4.31% 3.06% 2.28% 2.35% 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.
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, 2010 and ending on November 30, 2011. 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
-------- ---------
CVR ENERGY 1.2%
COMPLETE PRODUCTION SERVICES 1.1
WESTERN REFINING 1.1
INNOSPEC 1.1
APPLIED INDUSTRIAL TECHNOLOGIES 1.0
MAGELLAN HEALTH SERVICES 1.0
ALLIED WORLD ASSURANCE COMPANY HOLDINGS 1.0
CUBIC 1.0
FINISH LINE, CL A 1.0
SEACOR HOLDINGS 0.9
FUND SECTORS
% OF
SECTOR PORTFOLIO
------ ---------
FINANCIALS 22.3%
INDUSTRIAL 18.1
INFORMATION TECHNOLOGY 13.2
CONSUMER DISCRETIONARY 12.8
ENERGY 7.6
MATERIALS 7.4
HEALTH CARE 6.4
UTILITIES 4.1
CONSUMER STAPLES 4.0
REGISTERED INVESTMENT COMPANIES 2.8
REPURCHASE AGREEMENT 0.9
TELECOMMUNICATION SERVICES 0.4
* EXCLUDES SHORT-TERM SECURITIES.
COGNITIVE VALUE FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2011, HighMark Cognitive Value Fund (the
"Fund") produced a total return of 24.54% (Class M Shares). In comparison, the
Fund's benchmark, the unmanaged S&P Small Cap 600/Citigroup Value Index returned
19.95% for the same period.
FACTORS AFFECTING PERFORMANCE
Micro-cap stocks struggled in the first half of the reporting period due in part
to a decline in bank lending throughout the period. During the second half of
the reporting period, a rebound in bank lending occurred.
The Fund uses a Behavorial Ranking Model (BRM) (a composite of the Fund's factor
signals) to help it make stock selection decisions. The BRM had very good
results for the twelve-month period, with five of the six components
contributing positively to performance. The Analyst Herding Bias and Anchoring
Bias factors produced the best results, while the Analyst Expectation Bias
factor performed the least well.
As would be expected, the very good BRM results translated into strong relative
outperformance for the Fund. The Fund's generally low allocation to cash
continued to help limit losses relative to the Fund's benchmark (since the
Fund's benchmark holds no cash) and during the period when stock returns were
dramatically higher than cash returns.
For the fiscal year overall, micro-cap stocks trailed small cap stocks within
the Fund. During the second half of the reporting period, coincident with
increases in bank lending, micro-cap stocks outperformed small cap stocks. As
the strength and robustness of the factor models in the BRM has improved, the
need for relatively large micro-cap exposure to potentially enhance returns has
decreased. This may result in a lower exposure to micro-cap stocks in the
future, regardless of their perceived attractiveness.
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
Cognitive Value Cognitive Value S&P SmallCap
Fund Class M Fund Class A 600/Citigroup Morningstar Small
Shares Shares+ Value Index++ Value Category
--------------- --------------- ------------- -----------------
7/01 $ 10,000 $ 9,446 $ 10,000 $ 10,000
7/02 $ 9,462 $ 8,895 $ 9,115 $ 8,770
7/03 $ 10,340 $ 9,674 $ 10,518 $ 9,955
7/04 $ 12,272 $ 11,426 $ 12,763 $ 10,849
7/05 $ 15,211 $ 14,092 $ 16,063 $ 12,094
7/06 $ 16,437 $ 15,179 $ 17,174 $ 12,545
7/07 $ 18,406 $ 16,929 $ 19,401 $ 13,960
7/08 $ 16,385 $ 15,030 $ 17,241 $ 12,320
7/09 $ 12,777 $ 11,668 $ 14,064 $ 10,138
7/10 $ 15,342 $ 13,955 $ 16,639 $ 12,293
7/11 $ 19,107 $ 17,311 $ 19,958 $ 14,766
++ Indexes are unmanaged and do not incur fees, expenses or other
costs.
-----------------------------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR 5 YEAR 10 YEAR EXPENSE EXPENSE
RETURN RETURN RETURN RETURN RATIO++ RATIO++
-----------------------------------------------------------------------------------------------------------------
Fiduciary Shares 24.32% 5.15% 2.99% 6.55%+ 1.33% 1.22%
-----------------------------------------------------------------------------------------------------------------
Class A Shares 24.05% 4.81% 2.66% 6.24%+ 1.58% 1.47%
-----------------------------------------------------------------------------------------------------------------
Class A Shares w/load* 17.18% 2.86% 1.50% 5.64%+ 1.58% 1.47%
-----------------------------------------------------------------------------------------------------------------
Class C Shares 23.30% 4.16% 2.00% 5.63%+ 2.08% 2.07%
-----------------------------------------------------------------------------------------------------------------
Class C Shares w/load** 22.30% 4.16% 2.00% 5.63%+ 2.08% 2.07%
-----------------------------------------------------------------------------------------------------------------
Class M Shares 24.54% 5.26% 3.06% 6.69% 1.08% 1.07%
-----------------------------------------------------------------------------------------------------------------
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 ten
years ago 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 to reflect higher expenses applicable to these Classes.
Without 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, 2010 and ending on November 30, 2011. 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
-------- ---------
APPLE 5.3%
EXXONMOBIL 4.5
COCA-COLA 3.8
GENERAL ELECTRIC 3.1
CHEVRON 2.9
UNITED PARCEL SERVICE, CL B 2.6
PROCTER & GAMBLE 2.3
WELLS FARGO 2.3
THERMO FISHER SCIENTIFIC 2.1
DISCOVER FINANCIAL SERVICES 2.1
FUND SECTORS
% OF
SECTOR PORTFOLIO
------ ---------
INFORMATION TECHNOLOGY 17.0%
FINANCIALS 15.6
ENERGY 12.6
INDUSTRIAL 12.6
CONSUMER STAPLES 12.5
CONSUMER DISCRETIONARY 10.2
HEALTH CARE 9.9
UTILITIES 2.9
TELECOMMUNICATIONS SERVICES 2.6
MATERIALS 2.4
REPURCHASE AGREEMENT 1.7
* EXCLUDES SHORT-TERM SECURITIES.
CORE EQUITY FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2011, HighMark Core Equity Fund (the "Fund")
produced a total return of 18.63% (Fiduciary Shares). In comparison, the Fund's
benchmark, the unmanaged S&P 500 Index, returned 19.65% over the same period.
FACTORS AFFECTING PERFORMANCE
The first half of the Fund's reporting period was generally marked by improving
economic conditions, with positive GDP growth and legislative action to extend
the current level of taxation. Fears of a double-dip recession that existed at
the beginning of the Fund's reporting period subsided as the Federal Reserve
instituted its quantitative easing program commonly known as QE2. The market
rally that ensued had a brief pull-back in October over concerns about European
sovereign debt, but the economy continued its rebound during the reporting
period overall.
Moderate volatility characterized the second half of the Fund's reporting
period, as renewed concerns over the European sovereign debt crisis, the
disaster in Japan and the unrest in the Middle East took hold. The
characteristics of the stock market's performance in the second half of the
reporting period were typical of a market concerned about future rates of
economic growth. This included the underperformance of higher volatility stocks,
small cap stocks and economically sensitive stocks.
As is typical for the Fund's portfolio, performance contribution was marginal
from the overweight and underweight relative to the Fund's benchmark of industry
sectors. However, the Fund did adjust from a "barbell" strategy of cyclical and
stable sectors to a more strictly cyclical tilt toward the end of the reporting
period.
Specific stocks that contributed to performance include DuPont in the
industrials sector and Nabors Industries in the oil services sector. Liberty
Media in the media sector also positively contributed to performance.
Specific stocks that detracted from performance include underweights to Exxon
Mobil in the energy sector and Target in the retail sector.
The Fund was not able to overcome the abovementioned drags on performance, and
it underperformed 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 HighMark Core
Equity Fund Equity Fund S&P 500 Morningstar Large
Fiduciary Shares Class A Shares Index++ Value Category
---------------- --------------- ------------- -----------------
7/01 $ 10,000 $ 9,450 $ 10,000 $ 10,000
7/02 $ 7,575 $ 7,139 $ 7,637 $ 8,086
7/03 $ 8,268 $ 7,775 $ 8,450 $ 8,785
7/04 $ 9,079 $ 8,511 $ 9,562 $ 10,134
7/05 $ 10,120 $ 9,474 $ 10,910 $ 11,746
7/06 $ 11,084 $ 10,341 $ 11,497 $ 12,717
7/07 $ 12,703 $ 11,814 $ 13,352 $ 14,541
7/08 $ 10,881 $ 10,107 $ 11,871 $ 12,338
7/09 $ 8,749 $ 8,102 $ 9,502 $ 9,852
7/10 $ 10,023 $ 9,259 $ 10,817 $ 11,108
7/11 $ 11,890 $ 10,939 $ 12,943 $ 12,943
++ Indexes are unmanaged and do not incur fees, expenses or other
costs.
-----------------------------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR 5 YEAR 10 YEAR EXPENSE EXPENSE
RETURN RETURN RETURN RETURN RATIO++ RATIO++
-----------------------------------------------------------------------------------------------------------------
Fiduciary Shares 18.63% 3.00% 1.41% 1.74% 1.22% 1.00%
-----------------------------------------------------------------------------------------------------------------
Class A Shares 18.15% 2.67% 1.13% 1.47% 1.47% 1.25%
-----------------------------------------------------------------------------------------------------------------
Class A Shares w/load* 11.66% 0.76% -0.01% 0.90% 1.47% 1.25%
-----------------------------------------------------------------------------------------------------------------
Class B Shares 17.62% 2.09% 0.52% 0.84% 1.97% 1.85%
-----------------------------------------------------------------------------------------------------------------
Class B Shares w/load** 12.62% 1.12% 0.14% 0.84% 1.97% 1.85%
-----------------------------------------------------------------------------------------------------------------
Class C Shares 17.48% 1.96% 0.45% 1.03%+ 1.97% 1.85%
-----------------------------------------------------------------------------------------------------------------
Class C Shares w/load*** 16.48% 1.96% 0.45% 1.03%+ 1.97% 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
ten years ago with the performance of Class C Shares on November 28, 2003.
Fiduciary Share performance does not reflect higher expenses applicable to
this Class. 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, 2010 and ending on November 30, 2011. 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 9.0%
GOOGLE, CL A 4.6
MICROSOFT 3.9
INTERNATIONAL BUSINESS MACHINES 3.1
ORACLE 3.0
QUALCOMM 2.7
INTEL 2.2
CISCO SYSTEMS 1.8
COGNIZANT TECHNOLOGY SOLUTIONS, CL A 1.7
EMC 1.7
FUND SECTORS
% OF
SECTOR PORTFOLIO
------ ---------
INFORMATION TECHNOLOGY 86.1%
HEALTH CARE 7.1
CONSUMER DISCRETIONARY 3.9
REGISTERED INVESTMENT COMPANY 1.6
TELECOMMUNICATION SERVICES 1.0
REPURCHASE AGREEMENT 0.2
ENERGY 0.1
* EXCLUDES SHORT-TERM SECURITIES.
ENHANCED GROWTH FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2011, HighMark Enhanced Growth Fund (the
"Fund") produced a total return of 21.85% (Class M Shares). In comparison, the
Fund's benchmark, the NASDAQ 100 index, returned 27.78% for the same period.
FACTORS AFFECTING PERFORMANCE
The global stock markets continued their upward march in the first half of the
reporting period, albeit with some bumps along the road. However, all of that
changed quickly in the beginning of the second half of the reporting period when
the global equity markets faced numerous unforeseen events, including massive
regime upheavals in Africa and the Middle East, a tragic earthquake and tsunami
in Japan and the raising of rates by various central banks in emerging
countries. Markets faltered in March but managed to regain their footing.
Although April brought with it some upward momentum, May and June of 2011 saw
substantial sell-offs once again. The sovereign debt crisis, the growing U.S.
deficit, the stubbornly high rate of unemployment and an economy that is
signaling signs of a tremendous slowdown have been some of the main factors
leading to the most recent sell-off.
As noted above, the first six months of the reporting period was a particularly
good one for stocks in general. In keeping with these trends, the Fund, over
this time period, had a total return of 23.37% (Class M shares). The following
six months were not as positive for equities, and the same was true for the
Fund. For the period between January 31 and July 31, 2011, the Fund had a total
return of - 1.23% (Class M shares).
During the twelve-month reporting period, the Fund focused on certain
sub-sectors, particularly in the information technology sector. The Fund also
was invested in the healthcare sector, especially in biotech, medical devices
and pharmaceutical companies. In addition, the Fund held small positions in the
consumer discretionary, industrials and telecommunication sectors.
Sub-sectors within the Fund that contributed positively to performance within
the information technology sector during the twelve-month period were
application software, internet software and services, computer hardware and IT
consulting and services. Other standout performers were the retail internet
subsector as well as the Fund's small weighting in the industrials sector.
Subsectors that underperformed in general were communications equipment,
electronic components, computer storage and peripherals, semiconductors and
systems software.
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, THE S&P NORTH AMERICAN TECHNOLOGY
SECTOR INDEX AND THE MORNINGSTAR SPECIALTY-TECHNOLOGY CATEGORY.
[LINE GRAPH]
HighMark Enhanced HighMark Enhanced Morningstar S&P North American
Growth Fund Class M Growth Fund Class A Specialty - Technology Sector
Shares Shares+ NASDAQ 100 Index++ Technology Category Index++
------------------- ------------------- ------------------ ------------------- ------------------
7/01 $ 10,000 $ 9,450 $ 10,000 $ 10,000 $ 10,000
7/02 $ 5,891 $ 5,540 $ 5,413 $ 6,185 $ 5,575
7/03 $ 7,704 $ 7,208 $ 7,196 $ 7,020 $ 7,123
7/04 $ 8,412 $ 7,832 $ 7,910 $ 7,651 $ 7,775
7/05 $ 9,534 $ 8,832 $ 9,100 $ 8,530 $ 8,679
7/06 $ 8,733 $ 8,042 $ 8,595 $ 8,298 $ 8,122
7/07 $ 11,082 $ 10,161 $ 11,053 $ 10,576 $ 10,695
7/08 $ 10,032 $ 9,163 $ 10,579 $ 9,468 $ 9,954
7/09 $ 8,744 $ 7,953 $ 9,173 $ 8,391 $ 8,901
7/10 $ 9,972 $ 9,043 $ 10,735 $ 9,755 $ 10,168
7/11 $ 12,151 $ 10,972 $ 13,717 $ 11,974 $ 12,229
++ Indexes are unmanaged and do not incur fees, expenses or other
costs.
--------------------------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR 5 YEAR 10 YEAR EXPENSE EXPENSE
RETURN RETURN RETURN RETURN RATIO++ RATIO++
--------------------------------------------------------------------------------------------------------------
Fiduciary Shares 21.74% 6.60% 6.81% 1.88%+ 1.33% 1.20%
--------------------------------------------------------------------------------------------------------------
Class A Shares 21.33% 6.19% 6.41% 1.50%+ 1.58% 1.45%
--------------------------------------------------------------------------------------------------------------
Class A Shares w/load* 14.61% 4.22% 5.21% 0.93%+ 1.58% 1.45%
--------------------------------------------------------------------------------------------------------------
Class C Shares 20.59% 5.53% 5.75% 0.96%+ 2.08% 2.05%
--------------------------------------------------------------------------------------------------------------
Class C Shares w/load** 19.59% 5.53% 5.75% 0.96%+ 2.08% 2.05%
--------------------------------------------------------------------------------------------------------------
Class M Shares 21.85% 6.59% 6.83% 1.97% 1.08% 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 ten
years ago 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 to reflect higher expenses applicable to these Classes.
Without 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, 2010 and ending on November 30, 2011. 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
-------- ---------
EXXON MOBIL 3.7%
INTERNATIONAL BUSINESS MACHINES 3.3
GENERAL ELECTRIC 2.9
VERIZON COMMUNICATIONS 2.6
JOHNSON & JOHNSON 2.6
BRISTOL-MYERS SQUIBB 2.4
CHEVRON 2.2
RAYONIER REIT 2.2
PFIZER 2.2
LIMITED BRANDS 2.1
FUND SECTORS
% OF
SECTOR PORTFOLIO
------ ---------
FINANCIALS 23.9%
INDUSTRIAL 15.2
ENERGY 12.8
HEALTH CARE 10.6
INFORMATION TECHNOLOGY 7.8
CONSUMER DISCRETIONARY 7.2
MATERIALS 6.5
TELECOMMUNICATION SERVICES 6.0
UTILITIES 5.2
CONSUMER STAPLES 4.1
REGISTERED INVESTMENT COMPANY 0.7
* EXCLUDES SHORT-TERM SECURITIES.
EQUITY INCOME FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2011, HighMark Equity Income Fund (the
"Fund") produced a total return of 19.98% (Class A Shares without load). In
comparison, the Fund's benchmark, the unmanaged Russell 1000 Value Index,
returned 16.76% for the same period.
FACTORS AFFECTING PERFORMANCE
The first half of the Fund's reporting period was generally marked by improving
economic conditions, with positive GDP growth and legislative action to extend
the current level of taxation. Fears of a double-dip recession that existed at
the beginning of the Fund's reporting period subsided as the Federal Reserve
instituted its quantitative easing program commonly known as QE2. The market
rally that ensued had a brief pull-back in October over concerns about European
sovereign debt, but the economy continued its rebound during the reporting
period overall.
After a strong start to the second half of the Fund's reporting period, the
economy and financial markets became much more volatile. The Japanese
earthquake, renewed fears over European sovereign debt, the expiration of QE2
and a potential slowdown in emerging market countries all negatively impacted
the U.S. stock market toward the end of the reporting period.
Energy stocks performed well during the reporting period. The Fund's overweight
relative to its benchmark to the energy sector was a top contributor to
performance, led by its investment in Exxon Mobil Corp.
In the retail sector, the Fund's position in Limited Brands contributed 0.87% to
performance. In the materials sector, chemical manufacturer Eastman Chemical
Corp. contributed 0.69% to the Fund's performance. International Business
Machines contributed 0.77% to the Fund's performance.
In the REIT sector, Chimera Investment Corp., which invests in residential
mortgage-backed securities, detracted 0.50% from the Fund's performance. In the
financials sector, investment manager Federated Investors detracted 0.27% from
the Fund's performance.
Despite the abovementioned drags on performance, 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.
HighMark
Equity Income
Fund Class A Russell 1000 Morningstar Large
Shares Value Index++ Value Category
------------- ------------- -----------------
3/31/2005 $ 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 $ 9,091 $ 10,028 $ 9,881
7/11 $ 10,908 $ 11,708 $ 11,514
++ 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 20.68% 2.76%+ 0.94%+ 2.30%+ 1.80% 0.90%
--------------------------------------------------------------------------------------------------------------
Class A Shares 19.98% 2.73% 0.92% 2.29% 2.05% 1.15%
--------------------------------------------------------------------------------------------------------------
Class A Shares w/load* 13.37% 0.80% -0.22% 1.38% 2.05% 1.15%
--------------------------------------------------------------------------------------------------------------
Class B Shares 19.31% 2.10% 0.24% 1.57% 2.55% 1.75%
--------------------------------------------------------------------------------------------------------------
Class B Shares w/load** 14.31% 1.13% -0.10% 1.57% 2.55% 1.75%
--------------------------------------------------------------------------------------------------------------
Class C Shares 19.37% 2.08% 0.23% 1.74% 2.55% 1.75%
--------------------------------------------------------------------------------------------------------------
Class C Shares w/load*** 18.37% 2.08% 0.23% 1.74% 2.55% 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 not been adjusted to reflect 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, 2010 and ending on November 30, 2011. 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 5.5%
APPLE 4.5
PRAXAIR 4.3
EXXONMOBIL 3.8
ORACLE 3.1
GOOGLE, CL A 3.0
JPMORGAN CHASE 2.9
OCCIDENTAL PETROLEUM 2.9
WELLS FARGO 2.9
PHILIP MORRIS INTERNATIONAL 2.7
FUND SECTORS
% OF
SECTOR PORTFOLIO
------ ---------
INFORMATION TECHNOLOGY 21.1%
ENERGY 15.1
INDUSTRIAL 14.9
CONSUMER STAPLES 13.0
HEALTH CARE 9.9
CONSUMER DISCRETIONARY 8.3
MATERIALS 8.0
FINANCIALS 5.9
REGISTERED INVESTMENT COMPANY 2.5
UTILITIES 1.3
* EXCLUDES SHORT-TERM SECURITIES.
FUNDAMENTAL EQUITY FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2011, HighMark Fundamental Equity Fund (the
"Fund") produced a total return of 16.17% (Fiduciary Shares). In comparison, the
Fund's benchmark, the unmanaged S&P 500 Index, returned 19.65% for the same
period.
FACTORS AFFECTING PERFORMANCE
The first half of the Fund's reporting period was generally marked by improving
economic conditions, with positive GDP growth and legislative action to extend
the current level of taxation. Fears of a double-dip recession that existed at
the beginning of the Fund's reporting period subsided as the Federal Reserve
instituted its quantitative easing program commonly known as QE2. The market
rally that ensued had a brief pull-back in October over concerns about European
sovereign debt, but the economy continued its rebound during the reporting
period overall.
After a strong start to the second half of the Fund's reporting period, the
economy and financial markets became much more volatile. The Japanese
earthquake, renewed fears over European sovereign debt, the expiration of QE2
and a potential slowdown in emerging market countries all negatively impacted
the U.S. stock market toward the end of the reporting period.
The Fund's relative underperformance during the reporting period was due largely
to adverse stock selection, primarily in the energy, materials, consumer
discretionary and financial sectors. The impact from sector selection was
partially offset by the Fund's overweight position relative to its benchmark in
the energy sector and its underweight position relative to its benchmark in the
financial sector.
Specific stocks that detracted from performance include Ecolab, Staples and The
Hanover Group. In the case of Ecolab, in spite of the relative underperformance,
the fundamental investment case remained strong through the end of the reporting
period, and the Fund continues to own a significant position in the stock.
However, with regard to both Staples and The Hanover Group, poor relative
performance was an indication of materially adverse changes to the underlying
investment theses of why we held these stocks. As a result, both stocks were
sold during the reporting period.
The Fund also had a number of strong stock performances during the reporting
period, including Danaher in the industrial sector and EMC and Apple in the
information technology sector.
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 Class A
Fiduciary Shares Shares S&P 500 Index++
-------------------- -------------------- -------------
8/1/2008 $ 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 $ 9,163 $ 8,605 $ 9,112
7/11 $ 10,645 $ 9,964 $ 10,903
++ 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 16.17% 2.11% 1.68% 0.98%
-------------------------------------------------------------------------------------
Class A Shares 15.80% 1.78% 1.93% 1.23%
-------------------------------------------------------------------------------------
Class A Shares w/load* 9.43% -0.11% 1.93% 1.23%
-------------------------------------------------------------------------------------
Class C Shares 15.31% 1.30% 2.43% 1.83%
-------------------------------------------------------------------------------------
Class C Shares w/load** 14.31% 1.30% 2.43% 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, 2010 and ending on November 30, 2011. 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
-------- ---------
CERNER 2.8%
COACH 2.5
TRACTOR SUPPLY 2.5
O'REILLY AUTOMOTIVE 2.5
FASTENAL 2.4
STERICYCLE 2.4
PANERA BREAD, CL A 2.4
DICK'S SPORTING GOODS 2.3
SXC HEALTH SOLUTIONS 2.3
ROPER INDUSTRIES 2.3
FUND SECTORS
% OF
SECTOR PORTFOLIO
------ ---------
INDUSTRIAL 22.1%
INFORMATION TECHNOLOGY 20.8
CONSUMER DISCRETIONARY 20.5
HEALTH CARE 14.7
ENERGY 10.2
FINANCIALS 5.8
CONSUMER STAPLES 2.9
MATERIALS 1.6
REGISTERED INVESTMENT COMPANY 1.4
* EXCLUDES SHORT-TERM SECURITIES.
GENEVA MID CAP GROWTH FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2011, HighMark Geneva Mid Cap Growth Fund
(the "Fund") produced a total return of 26.82% (Class A Shares without load). In
comparison, the Fund's benchmark, the unmanaged Russell Mid Cap Growth Index,
returned 28.99% for the same period.
FACTORS AFFECTING PERFORMANCE
The first half of the Fund's reporting period was generally marked by improving
economic conditions, with positive GDP growth and legislative action to extend
the current level of taxation. Fears of a double-dip recession that existed at
the beginning of the Fund's reporting period subsided as the Federal Reserve
instituted its quantitative easing program commonly known as QE2. The market
rally that ensued had a brief pull-back in October over concerns about European
sovereign debt, but the economy continued its rebound during the reporting
period overall.
After a strong start to the second half of the Fund's reporting period, the
economy and financial markets became much more volatile. The Japanese
earthquake, renewed fears over European sovereign debt, the expiration of QE2
and a potential slowdown in emerging market countries all negatively impacted
the U.S. stock market towards the end of the reporting period.
From a sector standpoint, the Fund's overweight relative to its benchmark in the
industrials sector positively impacted performance, as did its overweight
relative to its benchmark in the energy sector.
Chipotle Mexican Grill and Tractor Supply Co. in the consumer discretionary
sector were the leading contributors to the Fund's performance. FMC Technologies
and Oil States International in the energy sector also performed particularly
well.
An underweight relative to its benchmark to the materials and consumer staples
sectors detracted from performance, as both sectors performed well during the
Fund's reporting period.
Strayer Education, a for-profit college in the consumer discretionary sector,
was the Fund's worst performing stock.
As a result of these factors, the Fund underperformed its benchmark for the
reporting period.
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 Morningstar Mid-
Fund Class A Russell Mid-Cap Cap Growth
Shares Growth Index++ Category
------------ --------------- ----------------
7/01 $ 9,450 $ 10,000 $ 10,000
7/02 $ 8,254 $ 7,132 $ 7,177
7/03 $ 9,096 $ 8,783 $ 8,299
7/04 $ 10,527 $ 10,082 $ 9,186
7/05 $ 13,139 $ 12,668 $ 11,243
7/06 $ 13,470 $ 13,046 $ 11,510
7/07 $ 15,326 $ 15,837 $ 13,988
7/08 $ 15,132 $ 14,583 $ 12,878
7/09 $ 12,573 $ 11,394 $ 9,943
7/10 $ 14,989 $ 13,692 $ 11,751
7/11 $ 19,009 $ 17,661 $ 14,886
++ Indexes are unmanaged and do not incur fees, expenses or other
costs.
---------------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR 5 YEAR 10 YEAR EXPENSE EXPENSE
RETURN RETURN RETURN RETURN RATIO++ RATIO++
---------------------------------------------------------------------------------------------------
Fiduciary Shares 27.25% 8.12%+ 7.27%+ 7.31%+ 1.32% 1.13%
---------------------------------------------------------------------------------------------------
Class A Shares 26.82% 7.90% 7.13% 7.24% 1.57% 1.38%
---------------------------------------------------------------------------------------------------
Class A Shares w/load* 19.87% 5.89% 5.92% 6.63% 1.57% 1.38%
---------------------------------------------------------------------------------------------------
Class B Shares 26.15% 7.23% 6.41% 6.48% 2.07% 1.98%
---------------------------------------------------------------------------------------------------
Class B Shares w/load** 21.15% 6.35% 6.10% 6.48% 2.07% 1.98%
---------------------------------------------------------------------------------------------------
Class C Shares 26.14% 7.24% 6.40% 6.47% 2.07% 1.98%
---------------------------------------------------------------------------------------------------
Class C Shares w/load*** 25.14% 7.24% 6.40% 6.47% 2.07% 1.98%
---------------------------------------------------------------------------------------------------
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 ten
years ago with the performance of Fiduciary Shares on June 26, 2009. Class
A Share performance has not been adjusted to reflect 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, 2010 and ending on November 30, 2011. 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
-------- ---------
SXC HEALTH SOLUTIONS 2.8%
BALCHEM 2.7
INTERACTIVE INTELLIGENCE GROUP 2.7
ULTIMATE SOFTWARE GROUP 2.6
BRIGHAM EXPLORATION 2.6
MONRO MUFFLER BRAKE 2.6
GENESEE & WYOMING, CL A 2.6
DIAMOND FOODS 2.5
MWI VETERINARY SUPPLY 2.4
ULTA SALON, COSMETICS & FRAGRANCE 2.4
FUND SECTORS
% OF
SECTOR PORTFOLIO
------ ---------
INFORMATION TECHNOLOGY 26.1%
HEALTH CARE 20.4
INDUSTRIAL 18.0
CONSUMER DISCRETIONARY 15.3
ENERGY 8.8
CONSUMER STAPLES 4.1
MATERIALS 2.7
FINANCIALS 2.7
REGISTERED INVESTMENT COMPANY 1.9
* EXCLUDES SHORT-TERM SECURITIES.
GENEVA SMALL CAP GROWTH FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2011, HighMark Geneva Small Cap Growth Fund
(the "Fund") produced a total return of 30.90% (Class A Shares without load). In
comparison, the Fund's benchmark, the unmanaged Russell 2000 Growth Index,
returned 29.32% for the same period.
FACTORS AFFECTING PERFORMANCE
The first half of the Fund's reporting period was generally marked by improving
economic conditions, with positive GDP growth and legislative action to extend
the current level of taxation. Fears of a double-dip recession that existed at
the beginning of the Fund's reporting period subsided as the Federal Reserve
instituted its quantitative easing program commonly known as QE2. The market
rally that ensued had a brief pull-back in October over concerns about European
sovereign debt, but the economy continued its rebound during the reporting
period overall.
After a strong start to the second half of the Fund's reporting period, the
economy and financial markets became much more volatile. The Japanese
earthquake, renewed fears over European sovereign debt, the expiration of QE2
and a potential slowdown in emerging market countries all negatively impacted
the U.S. stock market towards the end of the reporting period.
From a sector standpoint, the Fund's equal-weighted position relative to its
benchmark in the information technology sector and its slight overweight
relative to its benchmark to the health care sector were top contributors to
performance.
Ulta Salon in the consumer discretionary sector was the greatest contributing
stock to performance. Interactive Intelligence in the information technology
sector and SXC Health Solutions in the health care sector were also top
performers.
The Fund's slight underweight relative to its benchmark in the consumer
discretionary sector negatively impacted performance. Capella Education and
Grand Canyon Education, both for-profit colleges in the consumer discretionary
sector, also negatively impacted performance.
Despite the abovementioned slight drag on performance, the Fund outperformed its
benchmark for the reporting period.
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 Small Morningstar
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
1/10 $ 10,905 $ 11,223 $ 11,413
7/10 $ 12,849 $ 13,098 $ 13,355
1/11 $ 16,177 $ 16,143 $ 16,573
7/11 $ 21,175 $ 20,877 $ 21,485
++ 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 31.28% 24.81% 2.49% 1.38%
-------------------------------------------------------------------------------
Class A Shares 30.90% 24.50% 2.74% 1.63%
-------------------------------------------------------------------------------
Class A Shares w/load* 23.70% 21.26% 2.74% 1.63%
-------------------------------------------------------------------------------
Class C Shares 30.18% 23.80% 3.24% 2.23%
-------------------------------------------------------------------------------
Class C Shares w/load** 29.18% 23.80% 3.24% 2.23%
-------------------------------------------------------------------------------
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.
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, 2010 and ending on November 30, 2011. 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
-------- ---------
STATOIL 1.4%
SIEMENS 1.3
BAYER 1.2
CHEUNG KONG HOLDINGS 1.2
DAIMLER 1.1
NESTLE 1.1
BASF 1.1
BP 1.0
ALLIANZ 0.9
GLAXOSMITHKLINE 0.9
FUND SECTORS+
% OF
SECTOR PORTFOLIO
------ ---------
FINANCIALS 21.7%
INDUSTRIAL 12.1
CONSUMER DISCRETIONARY 12.0
MATERIALS 11.9
ENERGY 9.8
CONSUMER STAPLES 8.0
HEALTH CARE 6.6
INFORMATION TECHNOLOGY 5.2
TELECOMMUNICATION SERVICES 5.1
UTILITIES 3.4
REGISTERED INVESTMENT COMPANIES 3.0
REPURCHASE AGREEMENTS 1.2
* 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, 2011, HighMark International Opportunities
Fund (the "Fund") produced a total return of 20.39% (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 17.86% for the same period.
FACTORS AFFECTING PERFORMANCE
Despite the upheaval caused by Western Europe's debt crisis, natural disasters
and the weak economic recovery, the Federal Reserve's quantitative easing
program commonly known as QE2 appears to have succeeded in supporting global
stock and commodity prices over most of the fiscal year. West Texas Intermediate
Crude oil prices rose from $79 per barrel to over $95, while the price of gold
rose from under $1200 an ounce to over $1600. As risky assets appreciated, the
U.S. dollar slid. Corporate earnings remained in their cyclical upturn and
continued to surpass analyst expectations more often than not.
With only a few exceptions, the global equity markets turned in very strong
results over the twelve-month period (as measured by each country or geographic
region's respective MSCI index given in U.S. dollar terms, net dividends). Even
earthquake-ravaged Japan ended with a 13% gain. Within Europe, the dispersion of
index returns was mostly along the spectrum of perceived sovereign risk. The
best performers were Germany and Norway, both up 28% as they combined an
export-led economic recovery with fiscal responsibility. The worst performers
were the countries hardest hit by the sovereign debt crisis: Greece (down 27%),
as well as Italy, Spain and Ireland (each with gains of under 5%). The Arab
Spring upheavals left Egypt with a 22% loss, which was worst among emerging
markets; the upheavals also left Turkey with negative returns, where a
worryingly large current account deficit led to a flat local stock index and a
weakened currency. With the exception of Russia, the BRIC nations (Brazil,
Russia, India and China) were underperformers. The other markets of emerging
Asia were standouts, all returning over 25%, while Thailand shot up 50%.
The Fund comfortably outperformed its benchmark over the period, with country
allocation accounting for about one-third of added value and stock selection the
other two-thirds. Country decisions were most beneficial in developed Europe
(due to large overweight positions in Germany and Sweden), emerging Asia (where
the underweight positions in India and China and an overweight in Thailand
served the Fund well) and Latin America (due to an underweight position in
Brazil). However, the Fund's weighting in Turkey detracted from its relative
performance.
Stock selection added value as the Fund's stock selection factors enjoyed a
broad-based resurgence over the fiscal year. On a global basis, the most
effective stock selection factors were analyst revisions and price momentum,
followed by earnings quality and value factors. As expected, value factors were
disproportionately helpful in Asia (namely in Japan, Korea, and the Philippines,
where most of the value added by the Fund's stock selection was found). Earnings
quality was also unexpectedly helpful in the region, and Japan saw additional
benefit from the long-term price reversal factor used in that market.
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, THE MCSI EAFE INDEX AND THE MORNINGSTAR FOREIGN LARGE BLEND CATEGORY.
[LINE GRAPH]
HighMark HighMark
International International
Opportunities Opportunities MCSI All-Country Morningstar
Fund Class M Fund Class A World ex-US Index Foreign Large
Shares Shares+ Gross++ MCSI EAFE Index++ Blend Category
------------- ------------- ----------------- ----------------- --------------
7/01 $ 10,000 $ 9,450 $ 10,000 $ 10,000 $ 10,000
7/02 $ 8,539 $ 8,019 $ 8,452 $ 8,308 $ 8,377
7/03 $ 9,443 $ 8,838 $ 9,172 $ 8,831 $ 9,028
7/04 $ 11,708 $ 10,910 $ 11,451 $ 11,044 $ 11,202
7/05 $ 14,838 $ 13,770 $ 14,243 $ 13,369 $ 13,850
7/06 $ 18,989 $ 17,569 $ 17,748 $ 16,579 $ 17,060
7/07 $ 24,587 $ 22,665 $ 22,709 $ 20,544 $ 21,085
7/08 $ 22,116 $ 20,330 $ 20,597 $ 18,039 $ 18,688
7/09 $ 16,465 $ 15,091 $ 16,292 $ 13,962 $ 14,391
7/10 $ 17,833 $ 16,304 $ 17,941 $ 14,837 $ 15,436
7/11 $ 21,470 $ 19,573 $ 21,145 $ 17,384 $ 18,102
++ Indexes are unmanaged and do not incur fees, expenses or other
costs.
---------------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR 5 YEAR 10 YEAR EXPENSE EXPENSE
RETURN RETURN RETURN RETURN RATIO++ RATIO++
---------------------------------------------------------------------------------------------------
Fiduciary Shares 20.25% -1.15% 2.35% 7.79%+ 1.54% 1.48%
---------------------------------------------------------------------------------------------------
Class A Shares 20.05% -1.26% 2.18% 7.55%+ 1.79% 1.63%
---------------------------------------------------------------------------------------------------
Class A Shares w/load* 13.41% -3.10% 1.02% 6.96%+ 1.79% 1.63%
---------------------------------------------------------------------------------------------------
Class C Shares 19.16% -1.95% 1.47% 6.90%+ 2.29% 2.29%
---------------------------------------------------------------------------------------------------
Class C Shares w/load** 18.16% -1.95% 1.47% 6.90%+ 2.29% 2.29%
---------------------------------------------------------------------------------------------------
Class M Shares 20.39% -0.99% 2.49% 7.94% 1.29% 1.29%
---------------------------------------------------------------------------------------------------
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 ten
years ago 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 to reflect higher expenses applicable to these Classes.
Without 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, 2010 and ending on November 30, 2011. 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 7.2%
GOOGLE, CL A 5.0
ORACLE 3.9
PRAXAIR 3.7
PHILIP MORRIS INTERNATIONAL 3.7
COCA-COLA 3.4
DANAHER 3.3
SCHLUMBERGER 3.2
ECOLAB 2.7
QUALCOMM 2.6
FUND SECTORS
% OF
SECTOR PORTFOLIO
------ ---------
INFORMATION TECHNOLOGY 31.0%
INDUSTRIAL 15.8
ENERGY 11.3
CONSUMER DISCRETIONARY 10.9
CONSUMER STAPLES 10.5
HEALTH CARE 9.2
MATERIALS 7.9
UTILITIES 1.4
FINANCIALS 1.0
REGISTERED INVESTMENT COMPANY 1.0
* EXCLUDES SHORT-TERM SECURITIES.
LARGE CAP
GROWTH FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2011, HighMark Large Cap Growth Fund (the
"Fund") produced a total return of 18.41% (Fiduciary Shares). In comparison, the
Fund's benchmark, the unmanaged Russell 1000 Growth Index, returned 24.76% over
the same period.
FACTORS AFFECTING PERFORMANCE
The first half of the Fund's reporting period was generally marked by improving
economic conditions, with positive GDP growth and legislative action to extend
the current level of taxation. Fears of a double-dip recession that existed at
the beginning of the Fund's reporting period subsided as the Federal Reserve
instituted its quantitative easing program commonly known as QE2. The market
rally that ensued had a brief pull-back in October over concerns about European
sovereign debt, but the economy continued its rebound during the reporting
period overall.
After a strong start to the second half of the Fund's reporting period, the
economy and financial markets became much more volatile. The Japanese
earthquake, renewed fears over European sovereign debt, the expiration of QE2
and a potential slowdown in emerging market countries all negatively impacted
the U.S. stock market toward the end of the reporting period.
The Fund's relative underperformance during the reporting period was due largely
to adverse stock selection, primarily in the energy, materials, consumer
discretionary and financial sectors. The impact from sector selection was
partially offset by the Fund's overweight position relative to its benchmark in
the energy sector and its underweight position relative to its benchmark in the
financial sector.
Specific stocks that detracted from performance include Ecolab, Staples and The
Hanover Group. In the case of Ecolab, in spite of the relative underperformance,
the fundamental investment case remained strong through the end of the reporting
period, and the Fund continues to own a significant position in the stock.
However, with regard to both Staples and The Hanover Group, poor relative
performance was an indication of materially adverse changes to the underlying
investment theses of why we held these stocks. As a result, both stocks were
sold during the reporting period.
The Fund also had a number of strong stock performances during the reporting
period, including Danaher in the industrial sector and EMC and Apple in the
information technology sector.
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 HighMark Large
Cap Growth Cap Growth
Fund Fiduciary Fund Class A Morningstar Large Russell 1000
Shares Shares Growth Category Growth Index++
--------------- -------------- ----------------- --------------
7/01 $ 10,000 $ 9,450 $ 10,000 $ 10,000
7/02 $ 7,523 $ 7,102 $ 7,152 $ 7,125
7/03 $ 8,359 $ 7,848 $ 7,958 $ 7,954
7/04 $ 8,647 $ 8,112 $ 8,503 $ 8,631
7/05 $ 9,958 $ 9,317 $ 9,766 $ 9,758
7/06 $ 10,165 $ 9,486 $ 9,732 $ 9,684
7/07 $ 11,639 $ 10,827 $ 11,485 $ 11,569
7/08 $ 10,626 $ 9,861 $ 10,712 $ 10,841
7/09 $ 9,248 $ 8,558 $ 8,569 $ 8,936
7/10 $ 10,434 $ 9,626 $ 9,580 $ 10,156
7/11 $ 12,354 $ 11,375 $ 11,792 $ 12,671
++ Indexes are unmanaged and do not incur fees, expenses or other costs.
--------------------------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR 5 YEAR 10 YEAR EXPENSE EXPENSE
RETURN RETURN RETURN RETURN RATIO++ RATIO++
--------------------------------------------------------------------------------------------------------------
Fiduciary Shares 18.41% 5.15% 3.98% 2.14% 1.21% 1.02%
--------------------------------------------------------------------------------------------------------------
Class A Shares 18.16% 4.88% 3.70% 1.87% 1.46% 1.27%
--------------------------------------------------------------------------------------------------------------
Class A Shares w/load* 11.70% 2.92% 2.54% 1.30% 1.46% 1.27%
--------------------------------------------------------------------------------------------------------------
Class B Shares 17.35% 4.28% 3.10% 1.25% 1.96% 1.87%
--------------------------------------------------------------------------------------------------------------
Class B Shares w/load** 12.35% 3.36% 2.74% 1.25% 1.96% 1.87%
--------------------------------------------------------------------------------------------------------------
Class C Shares 17.36% 4.23% 3.07% 1.24% 1.96% 1.87%
--------------------------------------------------------------------------------------------------------------
Class C Shares w/load*** 16.36% 4.23% 3.07% 1.24% 1.96% 1.87%
--------------------------------------------------------------------------------------------------------------
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, 2010 and ending on November 30, 2011. 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
-------- ---------
JPMORGAN CHASE 4.6%
PFIZER 4.2
CHEVRON 3.7
MICROSOFT 3.6
BANK OF AMERICA 3.3
BERKSHIRE HATHAWAY, CL B 3.2
CITIGROUP 3.2
BP PLC, SP ADR 3.1
MERCK & CO 3.0
APACHE 2.8
FUND SECTORS
% OF
SECTOR PORTFOLIO
------ ---------
FINANCIALS 22.1%
INDUSTRIAL 11.4
ENERGY 14.1
HEALTH CARE 10.8
CONSUMER STAPLES 11.9
INFORMATION TECHNOLOGY 12.2
CONSUMER DISCRETIONARY 8.2
MATERIALS 4.6
TELECOMMUNICATION SERVICES 3.3
UTILITIES 1.2
REPURCHASE AGREEMENT 0.2
* EXCLUDES SHORT-TERM SECURITIES.
LARGE CAP
VALUE FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2011, HighMark Large Cap Value Fund (the
"Fund") produced a total return of 13.27% (Fiduciary Shares). In comparison, the
Fund's benchmark, the unmanaged Russell 1000 Value Index, returned 16.76% for
the same period.
FACTORS AFFECTING PERFORMANCE
The first half of the Fund's reporting period was generally marked by improving
economic conditions, with positive GDP growth and legislative action to extend
the current level of taxation. Fears of a double-dip recession that existed at
the beginning of the Fund's reporting period subsided as the Federal Reserve
instituted its quantitative easing program commonly known as QE2. The market
rally that ensued had a brief pull-back in October over concerns about European
sovereign debt, but the economy continued its rebound during the reporting
period overall.
After a strong start to the second half of the Fund's reporting period, the
economy and financial markets became much more volatile. The Japanese
earthquake, renewed fears over European sovereign debt, the expiration of QE2
and a potential slowdown in emerging market countries all negatively impacted
the U.S. stock market towards the end of the reporting period.
An overweight relative to its benchmark to the industrials sector positively
contributed to performance, as did an overweight to the consumer staples sector.
Specific stocks that contributed to performance include multinational firm
Jardine Matheson and health insurance company Wellpoint.
The financial sector was the top detractor from performance, as was the energy
sector. Specific stocks that detracted from performance include MGIC Investment
Corp. and Bank of America in the financial sector and British Petroleum in the
energy sector.
The Fund was unable to overcome these drags on performance and underperformed
its benchmark 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 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 Value HighMark Large
Fund Class A Cap Value Fund Russell 1000 Morningstar Large
Shares Fiduciary Shares Value Index++ Value Category
-------------- ---------------- -------------- -----------------
7/01 $ 9,450 $ 10,000 $ 10,000 $ 10,000
7/02 $ 7,130 $ 7,568 $ 8,276 $ 8,102
7/03 $ 7,638 $ 8,117 $ 9,165 $ 8,790
7/04 $ 9,165 $ 9,767 $ 10,786 $ 10,134
7/05 $ 11,098 $ 11,853 $ 12,838 $ 11,735
7/06 $ 12,267 $ 13,136 $ 14,326 $ 12,698
7/07 $ 13,750 $ 14,763 $ 16,258 $ 14,514
7/08 $ 11,572 $ 12,453 $ 13,795 $ 12,334
7/09 $ 9,293 $ 10,033 $ 10,630 $ 9,849
7/10 $ 10,307 $ 11,149 $ 12,266 $ 11,104
7/11 $ 11,642 $ 12,628 $ 14,322 $ 12,939
++ Indexes are unmanaged and do not incur fees, expenses or other
costs.
-----------------------------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR 5 YEAR 10 YEAR EXPENSE EXPENSE
RETURN RETURN RETURN RETURN RATIO++ RATIO++
-----------------------------------------------------------------------------------------------------------------
Fiduciary Shares 13.27% 0.47% -0.79% 2.36% 1.16% 1.00%
-----------------------------------------------------------------------------------------------------------------
Class A Shares 12.95% 0.20% -1.04% 2.11% 1.41% 1.25%
-----------------------------------------------------------------------------------------------------------------
Class A Shares w/load* 6.73% -1.67% -2.16% 1.53% 1.41% 1.25%
-----------------------------------------------------------------------------------------------------------------
Class B Shares 12.28% -0.41% -1.64% 1.47% 1.91% 1.85%
-----------------------------------------------------------------------------------------------------------------
Class B Shares w/load** 7.28% -1.39% -2.00% 1.47% 1.91% 1.85%
-----------------------------------------------------------------------------------------------------------------
Class C Shares 12.24% -0.42% -1.65% 1.47% 1.91% 1.85%
-----------------------------------------------------------------------------------------------------------------
Class C Shares w/load*** 11.24% -0.42% -1.65% 1.47% 1.91% 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.
++ 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, 2010 and ending on November 30, 2011. 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 9.6%
INTERNATIONAL BUSINESS MACHINES 4.5
SALESFORCE.COM 3.6
BIOGEN IDEC 2.5
VMWARE, CL A 2.5
GOODRICH 2.3
F5 NETWORKS 2.3
LOCKHEED MARTIN 1.9
CITRIX SYSTEMS 1.8
INTERDIGITAL 1.7
FUND SECTORS
% OF
SECTOR PORTFOLIO
------ ---------
INFORMATION TECHNOLOGY 75.7%
HEALTH CARE 18.3
INDUSTRIAL 5.3
TELECOMMUNICATION SERVICES 0.7
* EXCLUDES SHORT-TERM SECURITIES.
NYSE ARCA TECH 100
INDEX FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2011, HighMark NYSE Arca Tech 100 Index Fund
(the "Fund") produced a total return of 25.17% (Class A Shares without load). In
comparison, the Fund's benchmark, the NYSE Arca Tech 100 Index, returned 27.04%
for the same period.
FACTORS AFFECTING PERFORMANCE
The first half of the Fund's reporting period was generally marked by improving
economic conditions, with positive GDP growth and legislative action to extend
the current level of taxation. Fears of a double-dip recession that existed at
the beginning of the Fund's reporting period subsided as the Federal Reserve
instituted its quantitative easing program commonly known as QE2. The market
rally that ensued had a brief pull-back in October over concerns about European
sovereign debt, but the economy continued its rebound during the reporting
period overall.
After a strong start to the second half of the Fund's reporting period, the
economy and financial markets became much more volatile. The Japanese
earthquake, renewed fears over European sovereign debt, the expiration of QE2
and a potential slowdown in emerging market countries all negatively impacted
the U.S. stock market toward the end of 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 4.84% exposure to the pharmaceuticals sector contributed 1.64% to
performance and a 4.18% investment in the biotechnology sector contributed 1.43%
to performance.
The Fund's largest single stock exposure was an 8.4% investment in Apple Inc.,
which contributed 4% to the Fund's performance. InterDigital Inc., a wireless
technology provider in the communications equipment sector, was also a top stock
performer, as was Valeant Pharmaceuticals in the pharmaceuticals sector.
Equipment, software and service supplier Hewlett-Packard and IT service provider
Computer Sciences Corp. were top detractors from performance.
License Information
"Archipelago(R)", "ARCA(R)", "ARCAEX(R)", "NYSE(R)", "NYSE ARCASM" and "NYSE
Arca Tech 100SM" 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 Tech 100 Morningstar
Index Class A NYSE Arca Tech Technology
Shares 100 Index++ Category
------------- -------------- -----------
7/01 $ 9,450 $ 10,000 $ 10,000
7/02 $ 6,169 $ 6,592 $ 5,468
7/03 $ 8,012 $ 8,627 $ 6,930
7/04 $ 9,037 $ 9,804 $ 7,287
7/05 $ 10,729 $ 11,716 $ 8,517
7/06 $ 10,190 $ 11,190 $ 8,293
7/07 $ 12,351 $ 13,623 $ 10,572
7/08 $ 11,584 $ 12,818 $ 9,458
7/09 $ 10,141 $ 11,266 $ 8,383
7/10 $ 11,782 $ 13,087 $ 9,745
7/11 $ 14,747 $ 16,626 $ 11,962
++ Indexes are unmanaged and do not incur fees, expenses or other
costs.
-----------------------------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR 5 YEAR 10 YEAR EXPENSE EXPENSE
RETURN RETURN RETURN RETURN RATIO++ RATIO++
-----------------------------------------------------------------------------------------------------------------
Fiduciary Shares 25.58% 8.58%+ 7.79%+ 4.61%+ 1.00% 0.83%
-----------------------------------------------------------------------------------------------------------------
Class A Shares 25.17% 8.38% 7.67% 4.55% 1.25% 1.08%
-----------------------------------------------------------------------------------------------------------------
Class A Shares w/load* 18.29% 6.35% 6.46% 3.96% 1.25% 1.08%
-----------------------------------------------------------------------------------------------------------------
Class B Shares 24.46% 7.69% 6.93% 3.80% 1.75% 1.68%
-----------------------------------------------------------------------------------------------------------------
Class B Shares w/load** 19.46% 6.82% 6.62% 3.80% 1.75% 1.68%
-----------------------------------------------------------------------------------------------------------------
Class C Shares 24.43% 7.69% 6.93% 3.80% 1.75% 1.68%
-----------------------------------------------------------------------------------------------------------------
Class C Shares w/load*** 23.43% 7.69% 6.93% 3.80% 1.75% 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 ten
years ago with the performance of Fiduciary Shares on July 23, 2009. Class
A Share performance has not been adjusted to reflect 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, 2010 and ending on November 30, 2011. 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
-------- ---------
EXTRA SPACE STORAGE REIT 2.7%
AMERISTAR CASINOS 2.4
MANHATTAN ASSOCIATES 2.2
CASEY'S GENERAL STORES 2.1
AMERICAN SCIENCE & ENGINEERING 1.9
WEBSTER FINANCIAL 1.8
SOVRAN SELF STORAGE REIT 1.7
COLUMBIA SPORTSWEAR 1.6
DYCOM INDUSTRIES 1.6
SYNTEL 1.5
FUND SECTORS
% OF
SECTOR PORTFOLIO
------ ---------
INFORMATION TECHNOLOGY 20.2%
FINANCIALS 18.2
INDUSTRIAL 14.3
HEALTH CARE 14.2
CONSUMER DISCRETIONARY 12.7
ENERGY 7.8
MATERIALS 5.4
CONSUMER STAPLES 3.0
REPURCHASE AGREEMENT 1.7
UTILITIES 1.5
TELECOMMUNICATION SERVICES 1.0
* EXCLUDES SHORT-TERM SECURITIES.
SMALL CAP ADVANTAGE FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2011, HighMark Small Cap Advantage Fund (the
"Fund") produced a total return of 32.33% (Fiduciary Shares). In comparison, the
Fund's benchmark, the unmanaged Russell 2000 Index, returned 23.92% for the same
period.
FACTORS AFFECTING PERFORMANCE
The first half of the Fund's reporting period was generally marked by improving
economic conditions, with positive GDP growth and legislative action to extend
the current level of taxation. Fears of a double-dip recession that existed at
the beginning of the Fund's reporting period subsided as the Federal Reserve
instituted its quantitative easing program commonly known as QE2. The market
rally that ensued had a brief pull-back in October over concerns about European
sovereign debt, but the economy continued its rebound during the reporting
period overall.
Moderate volatility characterized the second half of the Fund's reporting
period, as renewed concerns over the European sovereign debt crisis, the
disaster in Japan and the unrest in the Middle East took hold. The
characteristics of the stock market's performance in the second half of the
reporting period were typical of a market concerned about future rates of
economic growth. This included the underperformance higher volatility stocks,
small cap stocks and economically sensitive stocks.
The consumer staples and health care sectors outperformed, while the financials,
industrials and materials sectors underperformed.
As is typical for the Fund's portfolio, performance contribution was marginal
from the overweighting and underweighting relative to the Fund's benchmark of
industry sectors, with an overweight to the information technology sector
contributing slightly to performance.
Specific stocks that contributed to performance include Timberland and Dillard's
in the retail sector, Verifone Systems in the consumer goods sector and Tibco
Software in the software sector.
Specific stocks that detracted from performance include Savient Pharmaceuticals
and Par Pharmaceuticals in the pharmaceutical sector and Skechers in the
consumer discretionary sector.
Despite the abovementioned slight drags on performance, 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 HighMark Small
Cap Advantage Cap Advantage
Fund, Class A Fund, Fiduciary Russell 2000 Morningstar Small Morningstar Small
Shares Shares Index++ Value Category+ Blend Category
-------------- --------------- ------------ ----------------- -----------------
3/1/07 $ 9,452 $ 10,000 $ 10,000 $ 10,000 $ 10,000
7/07 $ 8,894 $ 9,415 $ 9,861 $ 9,842 $ 10,038
7/08 $ 7,850 $ 8,334 $ 9,199 $ 9,660 $ 8,934
7/09 $ 5,646 $ 6,009 $ 7,293 $ 7,949 $ 7,110
7/10 $ 6,936 $ 7,410 $ 8,637 $ 9,638 $ 8,433
7/11 $ 9,156 $ 9,806 $ 10,703 $ 11,578 $ 10,460
+ Benchmark changed from Morningstar Small Value Category to Morningstar
Small Blend Category effective July 30, 2011.
++ 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 32.33% 5.57% -0.44% 1.79% 1.37%
---------------------------------------------------------------------------------
Class A Shares 32.00% 5.26% -0.72% 2.04% 1.62%
---------------------------------------------------------------------------------
Class A Shares w/load* 24.76% 3.29% -1.98% 2.04% 1.62%
---------------------------------------------------------------------------------
Class C Shares 31.15% 4.46% -1.40% 2.54% 2.22%
---------------------------------------------------------------------------------
Class C Shares w/load** 30.15% 4.46% -1.40% 2.54% 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, 2010 and ending on November 30, 2011. 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
-------- ---------
MAGELLAN HEALTH SERVICES 1.3%
ALASKA AIR GROUP 1.3
FRESH DEL MONTE PRODUCE 1.3
W&T OFFSHORE 1.3
SCHOLASTIC 1.3
COMMONWEALTH REIT 1.2
HOSPITALITY PROPERTIES TRUST REIT 1.2
AAR 1.2
TESORO 1.2
CBL & ASSOCIATES PROPERTIES REIT 1.2
FUND SECTORS+
% OF
SECTOR PORTFOLIO
------ ---------
FINANCIALS 35.6%
INFORMATION TECHNOLOGY 13.0
INDUSTRIAL 12.0
CONSUMER DISCRETIONARY 10.7
MATERIALS 7.4
HEALTH CARE 6.3
ENERGY 4.8
CONSUMER STAPLES 4.7
UTILITIES 4.0
TELECOMMUNICATION SERVICES 1.3
REGISTERED INVESTMENT COMPANY 0.2
* 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, 2011, HighMark Small Cap Value Fund (the
"Fund") produced a total return of 18.29% (Fiduciary Shares). In comparison, the
Fund's benchmark, the unmanaged Russell 2000 Value Index, returned 18.55% for
the same period.
FACTORS AFFECTING PERFORMANCE
The first half of the Fund's reporting period was generally marked by improving
economic conditions, with positive GDP growth and legislative action to extend
the current level of taxation. However, although lending action occurred in the
banking sector and hiring began once again in the small business sector, high
unemployment continued to weigh on economic recovery. Additionally, U.S. GDP
growth was revised downward in the latter half of the reporting period, and
sovereign debt issues were once again raised in Europe.
Within the small cap sector specifically, growth outperformed value for the
reporting period, and the Fund's so-called "deep value" focus detracted from
performance. As a result, the Fund underperformed its benchmark, the Russell
2000 Value Index, for the reporting period.
The Fund's overweight relative to its benchmark in the health care sector had
the most significant positive impact on sector performance, and an overweight
relative to its benchmark in consumer discretionary also added to performance.
Stock selection in the materials sector was also positive. Skilled Healthcare in
the health care sector was a top performer for the Fund, as was Cubist
Pharmaceutical. NewMarket Corp., a specialty chemical company in the materials
sector, also contributed to performance.
Rising oil prices meant the Fund's underweight relative to its benchmark to the
energy sector detracted from performance. A rise in oil prices was also a factor
in the industrial sector, and PAM Transportation Services negatively impacted
performance, as did Advanced Battery Systems.
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 HighMark Small
Cap Value Fund, Cap Value Fund, Russell 2000 Morningstar Small
Class A Shares Fiduciary Shares Value Index++ Value Category
--------------- ---------------- ------------- -----------------
7/01 $ 9,450 $ 10,000 $ 10,000 $ 10,000
7/02 $ 9,434 $ 10,010 $ 9,449 $ 9,485
7/03 $ 11,336 $ 12,061 $ 11,208 $ 11,079
7/04 $ 13,652 $ 14,560 $ 13,767 $ 13,589
7/05 $ 17,581 $ 18,797 $ 17,446 $ 16,917
7/06 $ 17,544 $ 18,795 $ 18,655 $ 17,546
7/07 $ 18,698 $ 20,079 $ 20,086 $ 19,527
7/08 $ 15,720 $ 16,931 $ 18,087 $ 17,233
7/09 $ 13,318 $ 14,377 $ 14,349 $ 14,181
7/10 $ 16,638 $ 18,002 $ 16,993 $ 17,194
7/11 $ 19,629 $ 21,295 $ 20,145 $ 20,654
++ Indexes are unmanaged and do not incur fees, expenses or other costs.
--------------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR 5 YEAR 10 YEAR EXPENSE EXPENSE
RETURN RETURN RETURN RETURN RATIO++ RATIO++
--------------------------------------------------------------------------------------------------
Fiduciary Shares 18.29% 7.95% 2.53% 7.85% 1.66% 1.37%
--------------------------------------------------------------------------------------------------
Class A Shares 17.98% 7.68% 2.27% 7.58% 1.91% 1.62%
--------------------------------------------------------------------------------------------------
Class A Shares w/load* 11.52% 5.68% 1.13% 6.98% 1.91% 1.62%
--------------------------------------------------------------------------------------------------
Class B Shares 17.32% 7.04% 1.65% 6.90% 2.41% 2.22%
--------------------------------------------------------------------------------------------------
Class B Shares w/load** 12.32% 6.16% 1.37% 6.90% 2.41% 2.22%
--------------------------------------------------------------------------------------------------
Class C Shares 17.27% 7.06% 1.67% 6.91% 2.41% 2.22%
--------------------------------------------------------------------------------------------------
Class C Shares w/load*** 16.27% 7.06% 1.67% 6.91% 2.41% 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, 2010 and ending on November 30, 2011. 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 3.8
WELLS FARGO 3.6
INTERNATIONAL BUSINESS MACHINES 3.1
WAL-MART STORES 2.9
ROYAL DUTCH SHELL PLC, ADR 2.7
CHEVRON 2.7
PHILIP MORRIS INTERNATIONAL 2.5
UNITEDHEALTH GROUP 2.4
MERCK 2.3
FUND SECTORS
% OF
SECTOR PORTFOLIO
------ ---------
INDUSTRIAL 15.8%
FINANCIALS 15.5
CONSUMER STAPLES 15.2
INFORMATION TECHNOLOGY 14.8
ENERGY 14.1
CONSUMER DISCRETIONARY 10.2
HEALTH CARE 10.1
MATERIALS 2.4
REGISTERED INVESTMENT COMPANY 1.2
UTILITIES 0.7
* EXCLUDES SHORT-TERM SECURITIES.
VALUE MOMENTUM FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2011, HighMark Value Momentum Fund (the
"Fund") produced a total return of 20.50% (Fiduciary Shares). In comparison, the
Fund's benchmark, the unmanaged S&P 500 Index, returned 19.65% for the same
period.
FACTORS AFFECTING PERFORMANCE
The first half of the Fund's reporting period was generally marked by improving
economic conditions, with positive GDP growth and legislative action to extend
the current level of taxation. Fears of a double-dip recession that existed at
the beginning of the Fund's reporting period subsided as the Federal Reserve
instituted its quantitative easing program commonly known as QE2. The market
rally that ensued had a brief pull-back in October over concerns about European
sovereign debt, but the economy continued its rebound during the reporting
period overall.
After a strong start to the second half of the Fund's reporting period, the
economy and financial markets became much more volatile. The Japanese
earthquake, renewed fears over European sovereign debt, the expiration of QE2
and a potential slowdown in emerging market countries all negatively impacted
the U.S. stock market towards the end of the reporting period.
The Fund's overweight relative to its benchmark to the consumer staples sector
positively contributed to performance, as did the overweight relative to its
benchmark to the industrials sector.
Specific stocks that contributed to performance include Walgreens in the
consumer staples sector, UnitedHealth Group in the health care sector and
Weyerhaeuser in the industrials sector.
An overweight relative to its benchmark to the financial sector was a top
detractor from performance, as was an underweight relative to its benchmark to
the information technology sector.
Specific stocks that detracted performance include Bank of America in the
financial sector and Merck in the pharmaceuticals sector.
Despite the abovementioned drags on performance, the Fund outperformed 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 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 Momentum
Fund Class A Fund Fiduciary Russell 1000 Morningstar Large
Shares Shares S&P 500 Index Value Index++ Value Category
-------------- -------------- ------------- ------------- -----------------
7/01 $ 9,450 $ 10,000 $ 10,000 $ 10,000 $ 10,000
7/02 $ 7,536 $ 7,994 $ 7,638 $ 8,276 $ 8,102
7/03 $ 8,270 $ 8,793 $ 8,451 $ 9,165 $ 8,790
7/04 $ 9,541 $ 10,173 $ 9,564 $ 10,786 $ 10,134
7/05 $ 11,129 $ 11,898 $ 10,907 $ 12,838 $ 11,735
7/06 $ 12,138 $ 13,007 $ 11,494 $ 14,326 $ 12,698
7/07 $ 14,089 $ 15,138 $ 13,348 $ 16,258 $ 14,514
7/08 $ 12,227 $ 13,171 $ 11,868 $ 13,795 $ 12,334
7/09 $ 9,378 $ 10,128 $ 9,499 $ 10,630 $ 9,849
7/10 $ 10,614 $ 11,488 $ 10,814 $ 12,266 $ 11,105
7/11 $ 12,749 $ 13,843 $ 12,939 $ 14,322 $ 12,939
++ Indexes are unmanaged and do not incur fees, expenses or other
costs.
-----------------------------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR 5 YEAR 10 YEAR EXPENSE EXPENSE
RETURN RETURN RETURN RETURN RATIO++ RATIO++
-----------------------------------------------------------------------------------------------------------------
Fiduciary Shares 20.50% 1.67% 1.25% 3.31% 1.11% 1.02%
-----------------------------------------------------------------------------------------------------------------
Class A Shares 20.12% 1.41% 0.99% 3.04% 1.36% 1.27%
-----------------------------------------------------------------------------------------------------------------
Class A Shares w/load* 13.53% -0.49% -0.15% 2.46% 1.36% 1.27%
-----------------------------------------------------------------------------------------------------------------
Class B Shares 19.37% 0.80% 0.38% 2.41% 1.86% 1.86%
-----------------------------------------------------------------------------------------------------------------
Class B Shares w/load** 14.37% -0.11% 0.11% 2.41% 1.86% 1.86%
-----------------------------------------------------------------------------------------------------------------
Class C Shares 19.48% 0.82% 0.41% 2.40% 1.86% 1.86%
-----------------------------------------------------------------------------------------------------------------
Class C Shares w/load*** 18.48% 0.82% 0.41% 2.40% 1.86% 1.86%
-----------------------------------------------------------------------------------------------------------------
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, 2010 and ending on November 30, 2011. 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 79.6%
EQUITY REGISTERED INVESTMENT COMPANIES 8.0
AFFILIATED FIXED INCOME REGISTERED INVESTMENT COMPANIES 7.3
REPURCHASE AGREEMENT 3.6
FIXED INCOME REGISTERED INVESTMENT COMPANY 1.4
AFFILIATED MONEY MARKET REGISTERED INVESTMENT COMPANY 0.1
CAPITAL GROWTH ALLOCATION FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2011, HighMark Capital Growth Allocation Fund
(the "Fund") produced a total return of 17.91% (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 16.40% over the same time period.
FACTORS AFFECTING PERFORMANCE
Domestic equities rose during the Fund's reporting period, with the S&P 500
Index returning 19.7%. The energy sector (42.4%), consumer discretionary sector
(28.5%) and materials sector (25.1%) led equity indices higher. International
stocks rose 17.2% for the period and led emerging markets, which returned 14.8%
for the reporting period. Fixed income returns were also positive for the
period, with the Barclays Capital Aggregate Index returning 4.4% and the Credit
Suisse High Yield Index returning 12.7%.
During the Fund's reporting period, the Fund maintained a tactical overweight to
global equities and an underweight to bonds when compared with the Fund's
blended benchmark. Overweights to U.S. equities (19.7%), small-cap stocks
(23.9%), emerging market equities (17.2%), technology (27.8%), REITs (22.4%), as
well as equal weight to industrials contributed to the Fund's relative
outperformance for the period. Large growth stocks outperformed large value
stocks by 8%, and emerging market stocks underperformed developed markets, both
of which detracted from performance. Within the fixed income allocation, excess
return was derived from an overweight relative to the Barclays Capital U.S.
Aggregate Bond Index to high-yield bonds (12.7%), and the shorter maturity of
fixed income holdings relative to the Barclays Capital U.S. Aggregate Bond Index
detracted from performance.
Notable changes to the tactical allocations over the period include a modest
reduction of equity exposure, as well as an increased exposure to small-cap
equities and a tilt towards value versus growth. The Fund added a new sector
allocation to health care by investing in Vanguard Healthcare Fund and
eliminated its relatively brief exposure to the materials sector.
All of the underlying funds held in the portfolio during the reporting period
had positive returns. Holdings in HighMark Core Equity Fund, HighMark Value
Momentum Fund, HighMark Cognitive Value Fund, HighMark Small Cap Advantage Fund,
HighMark Geneva Small Cap Growth Fund, JP Morgan Small Cap Growth Fund, HighMark
Small Cap Advantage Fund, HighMark International Opportunities Fund, Morgan
Stanley U.S. Real Estate Portfolio, HighMark Bond Fund, HighMark Short Term Bond
Fund and Eaton Vance Income Fund of Boston outperformed their benchmarks.
HighMark Large Cap Growth Fund, HighMark Fundamental Equity Fund, HighMark Large
Cap Value Fund, HighMark Enhanced Growth Fund, HighMark NYSE Arca Tech 100 Fund,
HighMark Geneva Mid Cap Growth Fund, HighMark Small Cap Value Fund, Fidelity
Advisor Industrial Fund and Lazard Emerging Markets Equity Portfolio
underperformed their benchmarks. Vanguard Healthcare Fund was not held as 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
Capital Growth 80/15/5 Hybrid^ of Barclays Capital Citigroup Bond 3-
Allocation Fund, the following U.S. Aggregate Month Treasury Morningstar Large
Class A Shares indexes: S&P 500 Index++ Bond Index++ Bill Index++^ Blend Category
---------------- ------------------ --------------- ---------------- ----------------- -----------------
10/12/04 $ 9,450 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000
7/05 $ 10,511 $ 10,971 $ 11,159 $ 10,226 $ 10,192 $ 11,268
7/06 $ 11,071 $ 11,493 $ 11,759 $ 10,375 $ 10,613 $ 11,827
7/07 $ 12,643 $ 13,101 $ 13,656 $ 10,954 $ 11,150 $ 13,697
7/08 $ 11,276 $ 12,074 $ 12,142 $ 11,628 $ 11,490 $ 12,219
7/09 $ 9,282 $ 10,293 $ 9,718 $ 12,541 $ 11,565 $ 9,812
7/10 $ 10,567 $ 11,592 $ 11,063 $ 13,658 $ 11,579 $ 11,046
7/11 $ 12,460 $ 13,565 $ 13,237 $ 14,265 $ 11,594 $ 13,087
++ Indexes are unmanaged and do not incur fees, expenses or other
costs.
^ The since-inception return shown for the index is calculated from
October 31, 2004.
-----------------------------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR 5 YEAR SINCE EXPENSE EXPENSE
RETURN RETURN RETURN INCEPTION RATIO++ RATIO++
-----------------------------------------------------------------------------------------------------------------
Fiduciary Shares 18.18% 3.65% 2.64%+ 4.34%+ 1.96% 1.37%
-----------------------------------------------------------------------------------------------------------------
Class A Shares 17.91% 3.39% 2.39% 4.15% 2.21% 1.62%
-----------------------------------------------------------------------------------------------------------------
Class A Shares w/load* 11.44% 1.45% 1.24% 3.29% 2.21% 1.62%
-----------------------------------------------------------------------------------------------------------------
Class C Shares 17.07% 2.67% 1.68% 3.42% 2.71% 2.32%
-----------------------------------------------------------------------------------------------------------------
Class C Shares w/load** 16.07% 2.67% 1.68% 3.42% 2.71% 2.32%
-----------------------------------------------------------------------------------------------------------------
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.
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
not been adjusted to reflect 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, 2010 and ending on November 30, 2011. 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 9.7
Affiliated Money Market Registered Investment Company 0.2
DIVERSIFIED EQUITY ALLOCATION FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2011, HighMark Diversified Equity Allocation
Fund (the "Fund") produced a total return of 18.70% (Class A Shares without
load). In comparison, the Fund's benchmark, the S&P 500 Index, returned 19.65%
over the same time period.
FACTORS AFFECTING PERFORMANCE
Domestic equities rose during the Fund's reporting period, with the S&P 500
Index returning 19.7%. The energy sector (42.4%), consumer discretionary sector
(28.5%) and materials sector (25.1%) led equity indices higher. International
stocks rose 17.2% for the period and led emerging markets, which returned 14.8%
for the reporting period.
The Fund maintained a tactical overweight to global equities when compared to
the Fund's benchmark. Overweights to U.S. equities (19.7%), small-cap stocks
(23.9%), emerging market equities (17.2%), technology (27.8%), REITs (22.4%), as
well as equal weight to industrials contributed to the Fund's outperformance for
the period. Large growth stocks outperformed large value stocks by 8%, and
emerging market stocks underperformed developed markets, both of which detracted
from performance.
Notable changes to the tactical allocations over the period included a modest
reduction of equity exposure, while more recently increasing exposure to
small-cap equities and a tilt towards value versus growth. The Fund added a new
sector allocation to health care by investing in the Vanguard Healthcare Fund
and eliminated its relatively brief exposure to the materials sector.
All of the underlying funds held in the portfolio during the reporting period
had positive returns. Holdings in HighMark Core Equity Fund, HighMark Value
Momentum Fund, HighMark Cognitive Value Fund, HighMark Small Cap Advantage Fund,
HighMark Geneva Small Cap Growth Fund, JP Morgan Small Cap Growth Fund, HighMark
Small Cap Advantage Fund, HighMark International Opportunities Fund and Morgan
Stanley U.S. Real Estate Portfolio outperformed their benchmarks. HighMark Large
Cap Growth Fund, HighMark Fundamental Equity Fund, HighMark Large Cap Value
Fund, HighMark Enhanced Growth Fund, HighMark NYSE Arca Tech 100 Fund, HighMark
Geneva Mid Cap Growth Fund, HighMark Small Cap Value Fund, Fidelity Advisor
Industrial Fund and Lazard Emerging Markets Equity Portfolio underperformed
their benchmarks. Vanguard Healthcare Fund was not held as 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
Equity Allocation
Fund Class A Morningstar Large
Shares Blend Category S&P 500 Index+
----------------- ----------------- -------------
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 $ 8,035 $ 8,546 $ 8,557
7/11 $ 9,538 $ 10,225 $ 10,139
+ 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 18.93% 3.09% 0.41% 2.87% 1.40%
----------------------------------------------------------------------------------------------------
Class A Shares 18.70% 2.88% 0.20% 3.12% 1.65%
----------------------------------------------------------------------------------------------------
Class A Shares w/load* 12.16% 0.96% -1.00% 3.12% 1.65%
----------------------------------------------------------------------------------------------------
Class C Shares 17.85% 2.16% -0.51% 3.62% 2.35%
----------------------------------------------------------------------------------------------------
Class C Shares w/load** 16.85% 2.16% -0.51% 3.62% 2.35%
----------------------------------------------------------------------------------------------------
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, 2010 and ending on November 30, 2011. 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 62.8%
Affiliated Fixed Income Registered Investment Companies 24.5
Equity Registered Investment Companies 6.1
Repurchase Agreement 3.8
Fixed Income Registered Investment Company 2.7
Money Market Registered Investment Company 0.1
GROWTH & INCOME ALLOCATION FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2011, HighMark Growth & Income Allocation
Fund (the "Fund") produced a total return of 14.77% (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, respectively, returned 13.37% over the same time
period.
FACTORS AFFECTING PERFORMANCE
Domestic equities rose during the Fund's reporting period, with the S&P 500
Index returning 19.7%. The energy sector (42.4%), consumer discretionary sector
(28.5%) and materials sector (25.1%) led equity indices higher. International
stocks rose 17.2% for the period and led emerging markets, which returned 14.8%
for the reporting period. Fixed income returns were also positive for the
period, with the Barclays Capital Aggregate Index returning 4.4% and the Credit
Suisse High Yield Index returning 12.7%.
During the Fund's reporting period, the Fund maintained a tactical overweight to
global equities and an underweight to bonds when compared with the Fund's
blended benchmark. Overweights to U.S. equities (19.7%), small-cap stocks
(23.9%), emerging market equities (17.2%), technology (27.8%), REITs (22.4%), as
well as equal weight to industrials contributed to the Fund's relative
outperformance for the period. Large growth stocks outperformed large value
stocks by 8%, and emerging market stocks underperformed developed markets, both
of which detracted from performance. Within the fixed income allocation, excess
return was derived from an overweight relative to the Barclays Capital U.S.
Aggregate Bond Index to high-yield bonds (12.7%), and the shorter maturity of
fixed income holdings relative to the Barclays Capital U.S. Aggregate Bond Index
detracted from performance.
Notable changes to the tactical allocations over the period include a modest
reduction of equity exposure, as well as an increased exposure to small-cap
equities and a tilt towards value versus growth. The Fund added a new sector
allocation to health care by investing in Vanguard Healthcare Fund and
eliminated its relatively brief exposure to the materials sector.
All of the underlying funds held in the portfolio during the reporting period
had positive returns. Holdings in HighMark Core Equity Fund, HighMark Value
Momentum Fund, HighMark Cognitive Value Fund, HighMark Small Cap Advantage Fund,
HighMark Geneva Small Cap Growth Fund, JP Morgan Small Cap Growth Fund, HighMark
Small Cap Advantage Fund, HighMark International Opportunities Fund, Morgan
Stanley U.S. Real Estate Portfolio, HighMark Bond Fund, HighMark Short Term Bond
Fund and Eaton Vance Income Fund of Boston outperformed their benchmarks.
HighMark Large Cap Growth Fund, HighMark Fundamental Equity Fund, HighMark Large
Cap Value Fund, HighMark Enhanced Growth Fund, HighMark NYSE Arca Tech 100 Fund,
HighMark Geneva Mid Cap Growth Fund, HighMark Small Cap Value Fund, Fidelity
Advisor Industrial Fund and Lazard Emerging Markets Equity Portfolio
underperformed their benchmarks. Vanguard Healthcare Fund was not held as 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 & Morningstar
Income Allocation 60/35/5 Hybrid^ of Barclays Capital Citigroup 3-Month Moderate
Fund, Class A the following U.S. Aggregate U.S. Treasury Bill Allocation
Shares indexes: S&P 500 Index++ Bond Index++ Index++^ Category
----------------- ------------------ ---------------- ---------------- ------------------ -----------
10/12/04 $ 9,450 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000
7/05 $ 10,286 $ 10,784 $ 11,159 $ 10,226 $ 10,192 $ 10,992
7/06 $ 10,740 $ 11,214 $ 11,759 $ 10,375 $ 10,613 $ 11,534
7/07 $ 12,039 $ 12,545 $ 13,656 $ 10,952 $ 11,150 $ 12,953
7/08 $ 11,146 $ 11,990 $ 12,142 $ 11,626 $ 11,490 $ 12,155
7/09 $ 9,776 $ 10,883 $ 9,718 $ 12,538 $ 11,565 $ 10,723
7/10 $ 11,008 $ 12,162 $ 11,063 $ 13,656 $ 11,579 $ 11,998
7/11 $ 12,634 $ 13,851 $ 13,237 $ 14,262 $ 11,594 $ 13,666
++ Indexes are unmanaged and do not incur fees, expenses or other
costs.
^ The since-inception return shown for the index is calculated from
October 31, 2004.
---------------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR 5 YEAR SINCE EXPENSE EXPENSE
RETURN RETURN RETURN INCEPTION RATIO++ RATIO++
---------------------------------------------------------------------------------------------------
Fiduciary Shares 15.12% 4.52% 3.55%+ 4.55%+ 1.83% 1.30%
---------------------------------------------------------------------------------------------------
Class A Shares 14.77% 4.27% 3.30% 4.36% 2.08% 1.55%
---------------------------------------------------------------------------------------------------
Class A Shares w/load* 8.46% 2.32% 2.14% 3.50% 2.08% 1.55%
---------------------------------------------------------------------------------------------------
Class C Shares 14.02% 3.54% 2.59% 3.63% 2.58% 2.25%
---------------------------------------------------------------------------------------------------
Class C Shares w/load** 13.02% 3.54% 2.59% 3.63% 2.58% 2.25%
---------------------------------------------------------------------------------------------------
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
not been adjusted to reflect 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, 2010 and ending on November 30, 2011. 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 46.4%
AFFILIATED EQUITY REGISTERED INVESTMENT COMPANIES 40.4
REPURCHASE AGREEMENT 4.9
FIXED INCOME REGISTERED INVESTMENT COMPANY 4.8
EQUITY REGISTERED INVESTMENT COMPANIES 3.5
INCOME PLUS ALLOCATION FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2011, HighMark Income Plus Allocation Fund
(the "Fund") produced a total return of 9.62% (Class A Shares without load). In
comparison, the Fund's benchmark of a 35/55/10% blend of the S&P 500 Index, the
Barclays Capital U.S. Aggregate Bond Index, and the Citigroup Bond 3-Month
Treasury Bill Index, respectively, returned 8.36% over the same time period.
FACTORS AFFECTING PERFORMANCE
Domestic equities rose during the Fund's reporting period, with the S&P 500
Index returning 19.7%. The energy sector (42.4%), consumer discretionary sector
(28.5%) and materials sector (25.1%) led equity indices higher. International
stocks rose 17.2% for the period and led emerging markets, which returned 14.8%
for the reporting period. Fixed income returns were also positive for the
period, with the Barclays Capital Aggregate Index returning 4.4% and the Credit
Suisse High Yield Index returning 12.7%.
During the Fund's reporting period, the Fund maintained a tactical overweight to
global equities and an underweight to bonds when compared with the Fund's
blended benchmark. Overweights to U.S. equities (19.7%), small-cap stocks
(23.9%), emerging market equities (17.2%), technology (27.8%), REITs (22.4%), as
well as equal weight to industrials contributed to the Fund's relative
outperformance for the period. Large growth stocks outperformed large value
stocks by 8%, and emerging market stocks underperformed developed markets, both
of which detracted from performance. Within the fixed income allocation, excess
return was derived from an overweight relative to the Barclays Capital U.S.
Aggregate Bond Index to high-yield bonds (12.7%), and the shorter maturity of
fixed income holdings relative to the Barclays Capital U.S. Aggregate Bond Index
detracted from performance.
Notable changes to the tactical allocations over the period include a modest
reduction of equity exposure, as well as an increased exposure to small-cap
equities and a tilt towards value versus growth. The Fund added a new sector
allocation to health care by investing in Vanguard Healthcare Fund and
eliminated its relatively brief exposure to the materials sector.
All of the underlying funds held in the portfolio during the reporting period
had positive returns. Holdings in HighMark Core Equity Fund, HighMark Value
Momentum Fund, HighMark Cognitive Value Fund, HighMark Small Cap Advantage Fund,
HighMark Geneva Small Cap Growth Fund, JP Morgan Small Cap Growth Fund, HighMark
Small Cap Advantage Fund, HighMark International Opportunities Fund, Morgan
Stanley U.S. Real Estate Portfolio, HighMark Bond Fund, HighMark Short Term Bond
Fund and Eaton Vance Income Fund of Boston outperformed their benchmarks.
HighMark Large Cap Growth Fund, HighMark Fundamental Equity Fund, HighMark Large
Cap Value Fund, HighMark Enhanced Growth Fund, HighMark NYSE Arca Tech 100 Fund,
HighMark Geneva Mid Cap Growth Fund, HighMark Small Cap Value Fund, Fidelity
Advisor Industrial Fund and Lazard Emerging Markets Equity Portfolio
underperformed their benchmarks. Vanguard Healthcare Fund was not held as 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 35% S&P 500 INDEX, 55% 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 Plus Citigroup 3- Morningstar
Allocation 35/55/10 Hybrid^ Barclays Capital Month U.S. Conservative
Fund Class of the following U.S. Aggregate Treasury Bill Allocation
A Shares indexes:(1) S&P 500 Index++ Bond Index++ Index++^ Category
------------- ---------------- --------------- ---------------- ------------- ------------
10/12/04 $ 9,550 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000
7/05 $ 9,999 $ 10,503 $ 11,159 $ 10,226 $ 10,192 $ 10,581
7/06 $ 10,310 $ 10,812 $ 11,759 $ 10,375 $ 10,613 $ 10,955
7/07 $ 11,176 $ 11,751 $ 13,656 $ 10,952 $ 11,150 $ 11,830
7/08 $ 10,879 $ 11,824 $ 12,142 $ 11,626 $ 11,490 $ 11,528
7/09 $ 10,415 $ 11,682 $ 9,718 $ 12,538 $ 11,565 $ 10,940
7/10 $ 11,479 $ 12,825 $ 11,063 $ 13,656 $ 11,579 $ 12,249
7/11 $ 12,583 $ 13,935 $ 13,237 $ 14,262 $ 11,594 $ 13,498
++ Indexes are unmanaged and do not incur fees, expenses or other costs.
^ The since-inception return shown for the index is calculated from October
31, 2004.
(1) Prior to March 1, 2011, the blended index was 30% S&P 500 Index, 60%
Barclays Capital U.S. Aggregate Bond Index and 10% Citigroup 3-Month U.S.
Treasury Bill Index.
---------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR 5 YEAR SINCE EXPENSE EXPENSE
RETURN RETURN RETURN INCEPTION RATIO++ RATIO++
---------------------------------------------------------------------------------------------
Fiduciary Shares 9.95% 5.26% 4.32%+ 4.33%+ 2.10% 1.17%
---------------------------------------------------------------------------------------------
Class A Shares 9.62% 4.97% 4.06% 4.14% 2.35% 1.42%
---------------------------------------------------------------------------------------------
Class A Shares w/load* 4.69% 3.37% 3.11% 3.44% 2.35% 1.42%
---------------------------------------------------------------------------------------------
Class C Shares 8.86% 4.25% 3.35% 3.42% 2.85% 2.12%
---------------------------------------------------------------------------------------------
Class C Shares w/load** 7.86% 4.25% 3.35% 3.42% 2.85% 2.12%
---------------------------------------------------------------------------------------------
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
not been adjusted to reflect 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, 2010 and ending on November 30, 2011. 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 4.3%
FNMA
4.500%, 04/01/18 2.3
U.S. TREASURY NOTE
1.875%, 06/30/15 1.9
TIME WARNER ENTERTAINMENT
8.375%, 03/15/23 1.8
CENTERPOINT ENERGY TRANSITION BOND
SER 2005-A, CL A3
5.090%, 08/01/15 1.7
GENERAL ELECTRIC CAPITAL
2.250%, 11/09/15 1.6
GE GLOBAL INSURANCE
7.750%, 06/15/30 1.6
VERIZON NEW ENGLAND
7.875%, 11/15/29 1.6
U.S. TREASURY NOTE
3.125%, 05/15/21 1.6
FNMA
5.000%, 11/01/33 1.5
FUND SECTORS
% OF
SECTOR PORTFOLIO
------ ---------
FINANCIALS 14.4%
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS 14.1
MORTGAGE-BACKED SECURITIES 13.0
ASSET-BACKED SECURITIES 10.4
U.S. TREASURY OBLIGATIONS 10.3
CONSUMER DISCRETIONARY 5.6
ENERGY 5.0
UTILITIES 4.6
INDUSTRIAL 4.3
TELECOMMUNICATION SERVICES 3.9
MUNICIPAL BONDS 3.9
MATERIALS 3.9
HEALTH CARE 1.8
FOREIGN GOVERNMENTS 1.8
REGISTERED INVESTMENT COMPANY 1.3
COMMERCIAL PAPER - DISCOUNTED 1.2
INFORMATION TECHNOLOGY 0.5
* EXCLUDES SHORT-TERM SECURITIES.
BOND FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2011, HighMark Bond Fund (the "Fund")
produced a total return of 5.45% (Fiduciary Shares). In comparison, the Fund's
benchmark, the unmanaged Barclays Capital U.S. Aggregate Bond Index, returned
4.44% for the same period.
FACTORS AFFECTING PERFORMANCE
The Fund's reporting period was generally marked by improving economic
conditions, with positive GDP growth and legislative action to extend the
current levels of taxation. Although lending began to improve somewhat,
particularly in the hard-hit small business sector, high unemployment continued
to weigh on the economic recovery. The effect of government stimulus enacted by
the Federal Reserve in the first half of the Fund's reporting period was felt at
the beginning of the second half of the reporting period. However, issues with
the sovereign debt of certain European countries surfaced, and U.S. GDP growth
soon slowed in the latter half of the reporting period.
While the short duration of the Fund's holdings was a slight detractor from the
Fund's performance relative to the Fund's benchmark, corporate earnings in
particular were strong during the reporting period, as the business and
manufacturing sectors took advantage of low financing rates and utilized cost
cutting measures to repair balance sheets. As a result, credit quality was again
a factor in the Fund's performance, as investment-grade corporate bonds
outperformed U.S. Treasuries by nearly 3% during the reporting period. The Fund
was overweight in corporate bonds, and this was a major contributor to the
Fund's outperformance relative to its benchmark.
The Fund's defensive duration stance was a slight detractor from performance,
but as a result of solid investments in the corporate and Treasury bond space,
the Fund outperformed its benchmark for 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.
[PHOTO OF JEFFREY KLEIN]
PORTFOLIO MANAGER
JEFFREY KLEIN
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]
HighMark Bond HighMark Bond Barclays Capital Morningstar
Fund Class A Fund Fiduciary U.S. Aggregate Intermediate-Term
Shares Shares Bond Index++ Bond Category
-------------- -------------- ---------------- -----------------
7/01 $ 9,775 $ 10,000 $ 10,000 $ 10,000
7/02 $ 10,169 $ 10,409 $ 10,753 $ 10,482
7/03 $ 10,813 $ 11,087 $ 11,336 $ 11,112
7/04 $ 11,296 $ 11,605 $ 11,884 $ 11,613
7/05 $ 11,765 $ 12,110 $ 12,454 $ 12,119
7/06 $ 11,853 $ 12,241 $ 12,636 $ 12,253
7/07 $ 12,459 $ 12,902 $ 13,338 $ 12,851
7/08 $ 13,111 $ 13,601 $ 14,158 $ 13,113
7/09 $ 14,105 $ 14,680 $ 15,270 $ 13,797
7/10 $ 15,527 $ 16,191 $ 16,630 $ 15,387
7/11 $ 16,317 $ 17,073 $ 17,369 $ 16,210
++ Indexes are unmanaged and do not incur fees, expenses or other costs.
--------------------------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR 5 YEAR 10 YEAR EXPENSE EXPENSE
RETURN RETURN RETURN RETURN RATIO++ RATIO++
--------------------------------------------------------------------------------------------------------------
Fiduciary Shares 5.45% 7.87% 6.88% 5.50% 1.01% 0.80%
--------------------------------------------------------------------------------------------------------------
Class A Shares 5.09% 7.56% 6.60% 5.26% 1.26% 1.05%
--------------------------------------------------------------------------------------------------------------
Class A Shares w/load* 2.71% 6.74% 6.11% 5.02% 1.26% 1.05%
--------------------------------------------------------------------------------------------------------------
Class B Shares 4.44% 6.87% 5.89% 4.49% 1.76% 1.73%
--------------------------------------------------------------------------------------------------------------
Class B Shares w/load** -0.56% 5.99% 5.57% 4.49% 1.76% 1.73%
--------------------------------------------------------------------------------------------------------------
Class C Shares 4.77% 7.19% 6.20% 4.96%+ 1.51% 1.48%
--------------------------------------------------------------------------------------------------------------
Class C Shares w/load*** 3.77% 7.19% 6.20% 4.96%+ 1.51% 1.48%
--------------------------------------------------------------------------------------------------------------
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
ten years ago with the performance of Class C Shares on November 28, 2003.
Fiduciary Share performance does not reflect higher expenses applicable to
this Class. 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, 2010 and ending on November 30, 2011. 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
-------- ---------
SAN DIEGO COUNTY,
REGIONAL TRANSPORTATION
COMMISSION, SALES TAX REVENUE,
LIMITED TAX, SER C, RB,
SPA DEXIA CREDIT LOCAL
2.000%, 04/01/38 2.3%
SAN DIEGO COUNTY,
REGIONAL TRANSPORTATION
COMMISSION, SALES TAX REVENUE,
LIMITED TAX, SER D, RB,
SPA DEXIA CREDIT LOCAL
2.000%, 04/01/38 1.8
LOS ANGELES,
SER A, GO
NATIONAL-RE FGIC INSURED
5.000%, 09/01/21 1.6
SAN DIEGO, PUBLIC FACILITIES
FINANCING AUTHORITY,
SEWER AUTHORITY, SER B, RB
5.500%, 05/15/23 1.6
SAN DIEGO COUNTY,
WATER AUTHORITY,
COP, WATER REVENUES,
SER A, AGM INSURED
5.000%, 05/01/26 1.6
CALIFORNIA STATE, DEPARTMENT OF
TRANSPORTATION,
FEDERAL HIGHWAY GRANT,
ANTICIPATION BONDS,
SER A, RB, NATIONAL-RE
FGIC INSURED
5.000%, 02/01/14 1.5
SOUTHERN CALIFORNIA, PUBLIC
POWER AUTHORITY,
POWER PROJECT REVENUE,
CANYON POWER, SER A, RB,
5.000%, 07/01/25 1.4
SAN FRANCISCO CITY & COUNTY,
EARTHQUAKE SAFETY,
SER E, GO
5.000%, 06/15/26 1.3
ORANGE COUNTY, SANITATION DISTRICT,
SER B, COP, AGM INSURED
5.000%, 02/01/23 1.3
LOS ANGELES, DEPARTMENT OF
WATER & POWER,
SER A, SUB SER A-2, RB,
NATIONAL-RE INSURED
5.000%, 07/01/19 1.2
FUND SECTORS
% OF
SECTOR PORTFOLIO
------ ---------
REVENUE BONDS 43.7%
GENERAL OBLIGATIONS 42.9
CERTIFICATE OF PARTICIPATION 10.1
REGISTERED INVESTMENT COMPANY 2.1
SPECIAL ASSESSMENT 1.2
* EXCLUDES SHORT-TERM SECURITIES.
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2011, HighMark California Intermediate
Tax-Free Bond Fund (the "Fund") produced a total return of 2.38% (Fiduciary
Shares). In comparison, the Fund's benchmark, the unmanaged Barclays 7-Year
Municipal Bond Index, returned 4.46% for the same period.
FACTORS AFFECTING PERFORMANCE
The low interest rate environment and other quantitative easing measures
undertaken by the Federal Reserve resulted in a bifurcated economic recovery
during the first half of the Fund's reporting period. While the business and
manufacturing sectors took advantage of low financing rates and utilized cost
cutting measures to generate strong earnings to repair balance sheets, consumer
activity remained somewhat muted as high unemployment hindered recovery in other
sectors, especially housing. European peripheral states continued to cause
instability and impact liquidity markets during the reporting period, as
Ireland, Spain and Portugal faced budget and sovereign debt challenges.
The Federal Reserve left the federal funds rate, the rate banks charge to lend
to each other, unchanged from its beginning level in the 0%-0.25% range. New
issuance volume, which increased in the first half of the Fund's reporting
period, decreased significantly in its second half. Municipal credit downgrades
outnumbered upgrades during the Fund's reporting period. However, the actual
number of defaults declined significantly during the Fund's reporting period
from 2010 levels.
California was the nation's largest state of issuance of municipal debt during
the first half of the Fund's reporting period. In the second half of the
reporting period, California was replaced by New York as the largest issuer, and
California dropped to the second largest issuer. Texas was the third largest
issuer throughout the full reporting period.
The reporting period was characterized by low yields, concerns about countries'
and municipalities' ability to pay their debts, and volatile markets that
alternated between the risk-on and risk-off trade. The Fund managed to protect
assets in down markets by limiting potential price risk. As risk-taking returned
to the municipal market and default rates fell, lower quality, longer duration
assets outperformed. The high-quality nature of the Fund's investments and their
shorter duration relative to the Fund's benchmark negatively impacted
performance.
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 HighMark
California California Morningstar
Intermediate Intermediate Barclays Municipal
Tax-Free Tax-Free Capital 7-Year California
Bond Fund Bond Fund Municipal Intermediate/
Class A Shares Fiduciary Shares Bond Index++ Short Category
-------------- ---------------- -------------- --------------
7/01 $ 9,775 $ 10,000 $ 10,000 $ 10,000
7/02 $ 10,353 $ 10,588 $ 10,714 $ 10,561
7/03 $ 10,602 $ 10,858 $ 11,129 $ 10,767
7/04 $ 10,968 $ 11,258 $ 11,703 $ 11,202
7/05 $ 11,242 $ 11,566 $ 12,166 $ 11,630
7/06 $ 11,400 $ 11,757 $ 12,428 $ 11,862
7/07 $ 11,742 $ 12,137 $ 12,918 $ 12,253
7/08 $ 12,284 $ 12,739 $ 13,671 $ 12,488
7/09 $ 12,968 $ 13,477 $ 14,766 $ 12,816
7/10 $ 13,650 $ 14,217 $ 15,886 $ 13,788
7/11 $ 13,941 $ 14,556 $ 16,595 $ 14,167
++ Indexes are unmanaged and do not incur fees, expenses or other costs.
--------------------------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR 5 YEAR 10 YEAR EXPENSE EXPENSE
RETURN RETURN RETURN RETURN RATIO++ RATIO++
--------------------------------------------------------------------------------------------------------------
Fiduciary Shares 2.38% 4.54% 4.37% 3.83% 1.03% 0.55%
--------------------------------------------------------------------------------------------------------------
Class A Shares 2.13% 4.31% 4.11% 3.61% 1.28% 0.80%
--------------------------------------------------------------------------------------------------------------
Class A Shares w/load* -0.12% 3.50% 3.65% 3.38% 1.28% 0.80%
--------------------------------------------------------------------------------------------------------------
Class B Shares 1.36% 3.58% 3.38% 2.83% 1.78% 1.50%
--------------------------------------------------------------------------------------------------------------
Class B Shares w/load** -3.62% 2.64% 3.03% 2.83% 1.78% 1.50%
--------------------------------------------------------------------------------------------------------------
Class C Shares 1.59% 3.80% 3.62% 3.26%+ 1.53% 1.25%
--------------------------------------------------------------------------------------------------------------
Class C Shares w/load*** 0.59% 3.80% 3.62% 3.26%+ 1.53% 1.25%
--------------------------------------------------------------------------------------------------------------
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
ten years ago with the performance of Class C Shares on November 28, 2003.
Fiduciary Share performance does not reflect higher expenses applicable to
this Class. 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, 2010 and ending on November 30, 2011. 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
-------- ---------
MASSACHUSETTS STATE, SCHOOL BUILDING AUTHORITY, SALES TAX REVENUE,
SER A, RB, AGM INSURED
5.000%, 08/15/14 3.3%
CLARK COUNTY, LIMITED TAX-BOND BANK, GO
5.000%, 06/01/25 2.3
ALASKA STATE, INTERNATIONAL AIRPORTS SYSTEM,
SER D, RB, NATIONAL-RE INSURED
5.000%, 10/01/22 2.0
HONOLULU CITY AND COUNTY,
SER A, GO, NATIONAL-RE INSURED
5.000%, 07/01/25 1.9
IDAHO STATE, HOUSING & FINANCE ASSOCIATION, GRANT & REVENUE
ANTICIPATION, FEDERAL HIGHWAY TRUST,
SER A, RB
5.250%, 07/15/24 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 B, RB, AGM INSURED
5.000%, 01/01/19 1.7
SAN RAMON VALLEY, UNIFIED
SCHOOL DISTRICT,
ELECTION 2002, GO, AGM INSURED
5.250%, 08/01/18 1.7
CHICO, UNIFIED SCHOOL DISTRICT,
SER B, GO, AGM INSURED
5.000%, 08/01/25 1.6
CONNECTICUT STATE,
SER C, GO
5.000%, 06/01/14 1.6
FUND SECTORS
% OF
SECTOR PORTFOLIO
------ ---------
REVENUE BONDS 49.0%
GENERAL OBLIGATIONS 43.9
REGISTERED INVESTMENT COMPANY 4.1
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, 2011, HighMark National Intermediate Tax-Free
Bond Fund (the "Fund") produced a total return of 2.43% (Fiduciary Shares). In
comparison, the Fund's benchmark, the unmanaged Barclays 7-Year Municipal Bond
Index, returned 4.46% for the same period.
FACTORS AFFECTING PERFORMANCE
The low interest rate environment and other quantitative easing measures
undertaken by the Federal Reserve resulted in a bifurcated economic recovery
during the first half of the Fund's reporting period. While the business and
manufacturing sectors took advantage of low financing rates and utilized cost
cutting measures to generate strong earnings to repair balance sheets, consumer
activity remained somewhat muted as high unemployment hindered recovery in other
sectors, especially housing. European peripheral states continued to cause
instability and impact liquidity markets during the reporting period, as
Ireland, Spain and Portugal faced budget and sovereign debt challenges.
The Federal Reserve left the federal funds rate, the rate banks charge to lend
to each other, unchanged from its beginning level in the 0%-0.25% range. New
issuance volume, which increased in the first half of the Fund's reporting
period, decreased significantly in its second half. Municipal credit downgrades
outnumbered upgrades during the Fund's reporting period. However, the actual
number of defaults declined significantly during the Fund's reporting period
from 2010 levels.
The reporting period was characterized by low yields, concerns about countries'
and municipalities' ability to pay their debts, and volatile markets that
alternated between the risk-on and risk-off trade. The Fund managed to protect
assets in down markets by limiting potential price risk. As risk-taking returned
to the municipal market and default rates fell, lower quality, longer duration
assets outperformed. The high-quality nature of the Fund's investments and their
shorter duration relative to the Fund's benchmark negatively impacted
performance.
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 HighMark
National National
Intermediate Intermediate Morningstar
Tax Free Bond Tax Free Bond Barclays Capital Municipal National
Fund Class A Fund Fiduciary 7-Year Municipal Intermediate
Shares+ Shares+ Bond Index++ Category
------------- -------------- ---------------- ------------------
7/01 $ 9,775 $ 10,000 $ 10,000 $ 10,000
7/02 $ 10,270 $ 10,542 $ 10,714 $ 10,519
7/03 $ 10,523 $ 10,827 $ 11,129 $ 10,750
7/04 $ 10,832 $ 11,171 $ 11,703 $ 11,223
7/05 $ 11,067 $ 11,441 $ 12,166 $ 11,648
7/06 $ 11,254 $ 11,663 $ 12,428 $ 11,852
7/07 $ 11,633 $ 12,097 $ 12,918 $ 12,237
7/08 $ 12,204 $ 12,709 $ 13,671 $ 12,567
7/09 $ 12,888 $ 13,453 $ 14,766 $ 13,096
7/10 $ 13,574 $ 14,206 $ 15,886 $ 14,133
7/11 $ 13,857 $ 14,551 $ 16,595 $ 14,542
++ Indexes are unmanaged and do not incur fees, expenses or other costs.
--------------------------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR 5 YEAR 10 YEAR EXPENSE EXPENSE
RETURN RETURN RETURN RETURN RATIO++ RATIO++
--------------------------------------------------------------------------------------------------------------
Fiduciary Shares 2.43% 4.61% 4.52% 3.82%+ 1.08% 0.53%
--------------------------------------------------------------------------------------------------------------
Class A Shares 2.08% 4.33% 4.25% 3.55%+ 1.33% 0.78%
--------------------------------------------------------------------------------------------------------------
Class A Shares w/load* -0.18% 3.54% 3.78% 3.31%+ 1.33% 0.78%
--------------------------------------------------------------------------------------------------------------
Class C Shares 1.71% 3.97%^ 3.30%^ 3.19%+^ 1.58% 1.23%
--------------------------------------------------------------------------------------------------------------
Class C Shares w/load** 0.71% 3.97%^ 3.30%^ 3.19%+^ 1.58% 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 STARTING TEN YEARS AGO 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 starting ten years ago 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). The performance of the
Fiduciary Shares during this period does not reflect Class C Shares'
expenses. With those adjustments, performance would be lower than that
shown. 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 and does reflect Class
C Shares' expenses. Class C Shares reopened on December 1, 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, 2010 and ending on November 30, 2011. 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 2.2%
CENTERPOINT ENERGY TRANSITION BOND, SER 2005-A, CL A3 5.090%,
08/01/15 1.8
SLM STUDENT LOAN TRUST, SER 2011-A, CL A1 1.187%, 10/15/24 1.7
CELLCO PARTNERSHIP/VERIZON WIRELESS CAPITAL 5.550%, 02/01/14 1.7
ALLY MASTER OWNER TRUST, SER 2011-1, CL A2 2.150%, 01/15/16 1.6
U.S. TREASURY NOTE 1.375%, 09/15/12 1.5
GENERAL ELECTRIC CAPITAL CORP 1.138%, 05/09/16 1.5
SLM STUDENT LOAN TRUST, SER 2011-2, CL A1 0.787%, 11/25/27 1.5
BANC OF AMERICA COMMERCIAL MORTGAGE, SER 2005-2, CL A4 4.783%,
07/10/43 1.5
TECK RESOURCES 7.000%, 09/15/12 1.4
FUND SECTORS
% OF
SECTOR PORTFOLIO
------ ---------
ASSET-BACKED SECURITIES 17.7%
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS 14.6
FINANCIALS 13.6
ENERGY 9.1
MORTGAGE-BACKED SECURITIES 8.1
TELECOMMUNICATION SERVICES 5.6
INDUSTRIAL 5.0
CONSUMER DISCRETIONARY 4.4
MATERIALS 4.1
UTILITIES 3.7
HEALTH CARE 3.4
U.S. TREASURY OBLIGATION 2.9
TAXABLE MUNICIPAL BONDS 2.4
REGISTERED INVESTMENT COMPANIES 2.1
CONSUMER STAPLES 1.5
INFORMATION TECHNOLOGY 1.2
FOREIGN GOVERNMENTS 0.6
* EXCLUDES SHORT-TERM SECURITIES.
SHORT TERM BOND FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2011, HighMark Short Term Bond Fund (the
"Fund") produced a total return of 2.35% (Fiduciary Shares). In comparison, the
Fund's benchmark, the unmanaged Barclays Capital 1-3 Year U.S. Government/Credit
Index, returned 1.78% for the same period.
FACTORS AFFECTING PERFORMANCE
The Fund's reporting period was generally marked by improving economic
conditions, with positive GDP growth and legislative action to extend the
current levels of taxation. Although lending began to improve somewhat,
particularly in the hard-hit small business sector, high unemployment continued
to weigh on the economic recovery. The effect of government stimulus enacted by
the Federal Reserve in the first half of the Fund's reporting period was felt at
the beginning of the second half of the reporting period. However, issues with
the sovereign debt of certain European countries surfaced, and U.S. GDP growth
soon slowed in the latter half of the reporting period.
While the short duration of the Fund's holdings was a slight detractor from the
Fund's performance relative to its benchmark, corporate earnings in particular
were strong during the reporting period, as the business and manufacturing
sectors took advantage of low financing rates and utilized cost cutting measures
to repair balance sheets. As a result, credit quality was again a factor in the
Fund's performance, as investment-grade corporate bonds outperformed U.S.
Treasuries by nearly 3% during the reporting period. The Fund was overweight in
corporate bonds, and this was a major contributor to the Fund's outperformance
relative to its benchmark.
The Fund's defensive duration stance was a slight detractor from performance,
but as a result of solid investments in the corporate and Treasury bond space,
the Fund outperformed its benchmark for 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.
[PHOTO OF JEFFERY KLEIN]
PORTFOLIO MANAGER
JEFFERY KLEIN
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]
HighMark Short Term HighMark Short Term Barclays Capital 1-3 Year
Bond Fund Class A Bond Fund Fiduciary U.S. Government/Credit Morningstar Short
Shares Shares Bond Index++ Bond Category
------------------- ------------------- ------------------------- -----------------
11/2/04 $ 9,775 $ 10,000 $ 10,000 $ 10,000
7/05 $ 9,792 $ 10,034 $ 10,086 $ 10,063
7/06 $ 10,033 $ 10,306 $ 10,388 $ 10,306
7/07 $ 10,478 $ 10,801 $ 10,943 $ 10,782
7/08 $ 10,995 $ 11,363 $ 11,624 $ 10,916
7/09 $ 11,531 $ 11,959 $ 12,217 $ 11,262
7/10 $ 11,976 $ 12,442 $ 12,670 $ 11,969
7/11 $ 12,224 $ 12,734 $ 12,896 $ 12,287
++ 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 2.35% 3.87% 4.33% 3.65% 1.01% 0.72%
--------------------------------------------------------------------------------------------------------------
Class A Shares 2.07% 3.60% 4.03% 3.37% 1.26% 0.97%
--------------------------------------------------------------------------------------------------------------
Class A Shares w/load* -0.20% 2.81% 3.57% 3.02% 1.26% 0.97%
--------------------------------------------------------------------------------------------------------------
Class C Shares 1.59% 3.14% 3.59% 2.99%+ 1.51% 1.42%
--------------------------------------------------------------------------------------------------------------
Class C Shares w/load** 0.59% 3.14% 3.59% 2.99%+ 1.51% 1.42%
--------------------------------------------------------------------------------------------------------------
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 does not reflect the higher 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, 2010 and ending on November 30, 2011. 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
-------- ---------
SOUTHEAST WISCONSIN PROFESSIONAL BASEBALL PARK DISTRICT,
SALES TAX REVENUE, REFUNDING, SER A, RB, NATIONAL-RE
INSURED 5.500%, 12/15/26 3.4%
MADISON, COMMUNITY DEVELOPMENT AUTHORITY REVENUE, WISCONSIN
ALUMNI RESEARCH FUND PROJECT, RB 5.000%, 10/01/34 3.3
PUERTO RICO SALES TAX FINANCING, CORPORATE SALES TAX
REVENUE, FIRST SUB-SER A, RB 6.375%, 08/01/39 2.2
WISCONSIN CENTER DISTRICT, SER 1998A, JUNIOR DEDICATED TAX
REVENUE, RB 5.250%, 12/15/23 2.0
PUERTO RICO SALES TAX FINANCING, CORPORATE SALES TAX
REVENUE, FIRST SUB-SER A, RB 5.500%, 08/01/37 1.8
VIRGIN ISLANDS PUBLIC FINANCE AUTHORITY, GROSS RECEIPTS
TAXES LOAN NOTES, RB NATIONAL-RE FGIC INSURED 5.000%,
10/01/24 1.7
PUERTO RICO ELECTRIC POWER AUTHORITY, SER WW, RB 5.500%,
07/01/38 1.7
COMMONWEALTH OF PUERTO RICO, PUBLIC IMPROVEMENT, GO,
NATIONAL-RE INSURED, 6.650%, 07/01/15 1.7
SOUTHEAST WISCONSIN PROFESSIONAL BASEBALL PARK DISTRICT,
SALES TAX REVENUE, REFUNDING, SER A, RB, NATIONAL-RE
INSURED 5.500%, 12/15/19 1.7
GLENDALE, COMMUNITY DEVELOPMENT AUTHORITY, LEASE REVENUE,
TAX INCREMENT DISTRICT NO. 7, RB 3.850%, 09/01/20 1.6
FUND SECTORS
% OF
SECTOR PORTFOLIO
------ ---------
REVENUE BONDS 90.9%
GENERAL OBLIGATIONS 6.0
REGISTERED INVESTMENT COMPANY 1.9
CERTIFICATE OF PARTICIPATION 1.2
* EXCLUDES SHORT-TERM SECURITIES.
WISCONSIN TAX-EXEMPT FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2011, HighMark Wisconsin Tax-Exempt Fund (the
"Fund") produced a total return of 2.28% (Class A Shares without load). In
comparison, the Fund's benchmark, the unmanaged Barclays Capital Municipal Bond
Index, returned 3.24% for the same period.
FACTORS AFFECTING PERFORMANCE
The Fund's reporting period began with strong performance in the municipal bond
market. Longer maturity and lower quality issuers outperformed as investors
reached for additional yield. November brought a different market as state
budget shortfalls grabbed investors' attention and concerns that the Build
America Bond Program ("BAB") would expire at the end of 2010 caused yields to
move higher. The expectation was that the BAB program would be extended for at
least one year, but with a lower subsidy. This concern caused a tremendous
amount of supply to be issued, putting pressure on the secondary market. The BAB
program had replaced as much as one-third of the tax-exempt issuance over the
past two years with taxable municipal bond issuance, and investors worried that
future supply would come in exclusively tax-exempt form. President Obama also
extended the Bush-era tax cuts for two additional years, making municipal bonds
less attractive to investors. This large amount of new issuance, combined with
thin liquidity conditions during the holiday season and renewed concern over
state budgets, caused municipal yields to rise sharply in December and January.
In the second half of the Fund's reporting period, new projects and associated
financings slowed due to fiscal belt tightening and austerity measures at state
and local levels. At the federal level, Congressional leaders began negotiations
to resolve issues over the country's debt ceiling. The search for budgetary
savings included a review of the "cost" of the municipal market's tax-exempt
status. Retail municipal mutual funds saw positive inflows toward the end of the
reporting period after 30 straight weeks of outflows. However, even though
massive municipal bond defaults predicted by pundits failed to materialize,
extreme levels of uncertainty among individual investors regarding the potential
risks and rewards available in municipal bonds continued through much of the
reporting period.
To combat this uncertainty at the state level, the Fund continued to execute its
long-term strategy of improving overall liquidity and quality by selling
non-rated Wisconsin and territory paper. The Fund took advantage of the large
amount of new issuance in the first half of the reporting period and the market
sell-off to add highly rated, Wisconsin state double-exempt names to the
portfolio. This strategy enhanced the overall yield and liquidity of the Fund.
The Fund also continued to look for opportunities in territory paper,
specifically from the Virgin Islands and Puerto Rico, which are triple
tax-exempt.
From a credit perspective, one highlight of the reporting period was the upgrade
of Puerto Rico from BBB- to BBB. Puerto Rico reduced its budget deficit by more
than one-third. Since Puerto Rican credit investments account for 23% of the
Fund's assets, this positively affected performance.
However, the investment strategy executed during the reporting period was not
enough to overcome the macro-environment in the municipal bond market, and 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 Wisconsin Barclays Capital Municipal Single
Tax-Exempt Fund Municipal Bond State Intermediate
Class A Shares Index++ Category
- -- ------------------ ---------------- ------------------
7/01 $ 9,775 $ 10,000 $ 10,000
7/02 $ 10,349 $ 10,671 $ 10,568
7/03 $ 10,790 $ 11,055 $ 10,835
7/04 $ 11,267 $ 11,695 $ 11,313
7/05 $ 11,798 $ 12,438 $ 11,774
7/06 $ 12,035 $ 12,755 $ 11,979
7/07 $ 12,459 $ 13,300 $ 12,389
7/08 $ 12,711 $ 13,676 $ 12,550
7/09 $ 13,079 $ 14,375 $ 13,088
7/10 $ 14,119 $ 15,690 $ 14,018
7/11 $ 14,441 $ 16,199 $ 14,378
++ Indexes are unmanaged and do not incur fees, expenses or other costs.
--------------------------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR 5 YEAR 10 YEAR EXPENSE EXPENSE
RETURN RETURN RETURN RETURN RATIO++ RATIO++
--------------------------------------------------------------------------------------------------------------
Fiduciary Shares 2.45%+ 4.43%+ 3.76%+ 4.00%+ 1.06% 0.67%
--------------------------------------------------------------------------------------------------------------
Class A Shares 2.28% 4.34% 3.71% 3.98% 1.31% 0.92%
--------------------------------------------------------------------------------------------------------------
Class A Shares w/load* 0.00% 3.57% 3.24% 3.74% 1.31% 0.92%
--------------------------------------------------------------------------------------------------------------
Class B Shares 1.66% 3.61% 2.97% 3.33%+ 1.81% 1.62%
--------------------------------------------------------------------------------------------------------------
Class B Shares w/load** -3.27% 2.67% 2.61% 3.33%+ 1.81% 1.62%
--------------------------------------------------------------------------------------------------------------
Class C Shares 1.93% 3.80% 3.09% 3.39%+ 1.56% 1.37%
--------------------------------------------------------------------------------------------------------------
Class C Shares w/load*** 0.94% 3.80% 3.09% 3.39%+ 1.56% 1.37%
--------------------------------------------------------------------------------------------------------------
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
ten years ago with the performance of Class B and Class C Shares on
January 6, 2003 and Fiduciary Shares on August 3, 2010. Class A Share
performance, Class B and Class C Shares performance does not reflect the
higher expenses applicable to these Classes. With these adjustments,
performance would be lower than that shown. Class A Share performance has
not been adjusted to reflect expenses applicable to Fiduciary Shares. With
these 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, 2010 and ending on November 30, 2011. 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 ("SEC") 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
2/1/11 7/31/11 RATIOS PERIOD*
--------------------------------------------------------------------------------
BALANCED FUND
--------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares ............... $1,000.00 $1,008.00 0.99% $ 4.93
Class A Shares ................. 1,000.00 1,007.00 1.24% 6.17
Class B Shares ................. 1,000.00 1,003.50 1.84% 9.14
Class C Shares ................. 1,000.00 1,003.80 1.84% 9.14
HYPOTHETICAL 5% RETURN
Fiduciary Shares ............... $1,000.00 $1,019.89 0.99% $ 4.96
Class A Shares ................. 1,000.00 1,018.65 1.24% 6.21
Class B Shares ................. 1,000.00 1,015.67 1.84% 9.20
Class C Shares ................. 1,000.00 1,015.67 1.84% 9.20
--------------------------------------------------------------------------------
COGNITIVE VALUE FUND
--------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares ............... $1,000.00 $1,040.70 1.21% $ 6.12
Class A Shares ................. 1,000.00 1,039.70 1.47% 7.43
Class C Shares ................. 1,000.00 1,036.10 2.07% 10.45
Class M Shares ................. 1,000.00 1,041.60 1.07% 5.42
HYPOTHETICAL 5% RETURN
Fiduciary Shares ............... $1,000.00 $1,018.79 1.21% $ 6.06
Class A Shares ................. 1,000.00 1,017.50 1.47% 7.35
Class C Shares ................. 1,000.00 1,014.53 2.07% 10.34
Class M Shares ................. 1,000.00 1,019.49 1.07% 5.36
BEGINNING ENDING NET EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE AT VALUE AT EXPENSE DURING
2/1/11 7/31/11 RATIOS PERIOD*
--------------------------------------------------------------------------------
CORE EQUITY FUND
--------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares ............... $1,000.00 $1,007.90 0.96% $ 4.78
Class A Shares ................. 1,000.00 1,006.50 1.25% 6.22
Class B Shares ................. 1,000.00 1,004.40 1.85% 9.19
Class C Shares ................. 1,000.00 1,003.80 1.85% 9.19
HYPOTHETICAL 5% RETURN
Fiduciary Shares ............... $1,000.00 $1,020.03 0.96% $ 4.81
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
--------------------------------------------------------------------------------
ENHANCED GROWTH FUND
--------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares ............... $1,000.00 $ 987.60 1.09% $ 5.37
Class A Shares ................. 1,000.00 985.60 1.45% 7.14
Class C Shares ................. 1,000.00 982.50 2.05% 10.08
Class M Shares ................. 1,000.00 987.70 1.05% 5.17
HYPOTHETICAL 5% RETURN
Fiduciary Shares ............... $1,000.00 $1,019.39 1.09% $ 5.46
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
50 HIGHMARK(R) FUNDS
BEGINNING ENDING NET EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE AT VALUE AT EXPENSE DURING
2/1/11 7/31/11 RATIOS PERIOD*
--------------------------------------------------------------------------------
EQUITY INCOME FUND
--------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares ............... $1,000.00 $1,025.50 0.90% $ 4.52
Class A Shares ................. 1,000.00 1,024.20 1.15% 5.77
Class B Shares ................. 1,000.00 1,020.70 1.75% 8.77
Class C Shares ................. 1,000.00 1,021.20 1.75% 8.77
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 $ 992.40 0.89% $ 4.40
Class A Shares ................. 1,000.00 990.40 1.22% 6.02
Class C Shares ................. 1,000.00 989.00 1.82% 8.98
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 $1,030.70 1.13% $ 5.69
Class A Shares ................. 1,000.00 1,029.00 1.38% 6.94
Class B Shares ................. 1,000.00 1,026.30 1.98% 9.95
Class C Shares ................. 1,000.00 1,026.50 1.98% 9.95
HYPOTHETICAL 5% RETURN
Fiduciary Shares ............... $1,000.00 $1,019.19 1.13% $ 5.66
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 $1,041.30 1.35% $ 6.83
Class A Shares ................. 1,000.00 1,039.70 1.62% 8.19
Class C Shares ................. 1,000.00 1,036.70 2.22% 11.21
HYPOTHETICAL 5% RETURN
Fiduciary Shares ............... $1,000.00 $1,018.10 1.35% $ 6.76
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 $1,023.30 1.45% $ 7.27
Class A Shares ................. 1,000.00 1,023.30 1.62% 8.13
Class C Shares ................. 1,000.00 1,019.40 2.27% 11.37
Class M Shares ................. 1,000.00 1,023.30 1.27% 6.37
HYPOTHETICAL 5% RETURN
Fiduciary Shares ............... $1,000.00 $1,017.60 1.45% $ 7.25
Class A Shares ................. 1,000.00 1,016.76 1.62% 8.10
Class C Shares ................. 1,000.00 1,013.54 2.27% 11.33
Class M Shares ................. 1,000.00 1,018.50 1.27% 6.36
BEGINNING ENDING NET EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE AT VALUE AT EXPENSE DURING
2/1/11 7/31/11 RATIOS PERIOD*
--------------------------------------------------------------------------------
LARGE CAP GROWTH FUND
--------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares ............... $1,000.00 $1,002.90 1.01% $ 5.02
Class A Shares ................. 1,000.00 1,002.00 1.27% 6.30
Class B Shares ................. 1,000.00 998.90 1.87% 9.27
Class C Shares ................. 1,000.00 998.90 1.87% 9.27
HYPOTHETICAL 5% RETURN
Fiduciary Shares ............... $1,000.00 $1,019.79 1.01% $ 5.06
Class A Shares ................. 1,000.00 1,018.50 1.27% 6.36
Class B Shares ................. 1,000.00 1,015.52 1.87% 9.35
Class C Shares ................. 1,000.00 1,015.52 1.87% 9.35
--------------------------------------------------------------------------------
LARGE CAP VALUE FUND
--------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares ............... $1,000.00 $ 970.10 0.97% $ 4.74
Class A Shares ................. 1,000.00 969.60 1.25% 6.10
Class B Shares ................. 1,000.00 966.30 1.85% 9.02
Class C Shares ................. 1,000.00 966.30 1.85% 9.02
HYPOTHETICAL 5% RETURN
Fiduciary Shares ............... $1,000.00 $1,019.98 0.97% $ 4.86
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
--------------------------------------------------------------------------------
NYSE ARCA TECH 100 INDEX FUND
--------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares ............... $1,000.00 $1,023.50 0.77% $ 3.86
Class A Shares ................. 1,000.00 1,022.00 1.08% 5.41
Class B Shares ................. 1,000.00 1,018.90 1.68% 8.41
Class C Shares ................. 1,000.00 1,018.90 1.68% 8.41
HYPOTHETICAL 5% RETURN
Fiduciary Shares ............... $1,000.00 $1,020.98 0.77% $ 3.86
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 $1,045.10 1.31% $ 6.64
Class A Shares ................. 1,000.00 1,043.70 1.62% 8.21
Class C Shares ................. 1,000.00 1,040.20 2.22% 11.23
HYPOTHETICAL 5% RETURN
Fiduciary Shares ............... $1,000.00 $1,018.30 1.31% $ 6.56
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
--------------------------------------------------------------------------------
SMALL CAP VALUE FUND
--------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares ............... $1,000.00 $ 997.80 1.23% $ 6.09
Class A Shares ................. 1,000.00 997.00 1.50% 7.43
Class B Shares ................. 1,000.00 994.50 2.10% 10.39
Class C Shares ................. 1,000.00 994.40 2.10% 10.38
HYPOTHETICAL 5% RETURN
Fiduciary Shares ............... $1,000.00 $1,018.70 1.23% $ 6.16
Class A Shares ................. 1,000.00 1,017.36 1.50% 7.50
Class B Shares ................. 1,000.00 1,014.38 2.10% 10.49
Class C Shares ................. 1,000.00 1,014.38 2.10% 10.49
HIGHMARK(R) FUNDS 51
DISCLOSURE OF FUND EXPENSES (UNAUDITED) (CONCLUDED)
BEGINNING ENDING NET EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE AT VALUE AT EXPENSE DURING
2/1/11 7/31/11 RATIOS PERIOD*
--------------------------------------------------------------------------------
VALUE MOMENTUM
--------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares ............... $1,000.00 $1,013.40 1.02% $5.09
Class A Shares ................. 1,000.00 1,011.80 1.27% 6.33
Class B Shares ................. 1,000.00 1,008.20 1.87% 9.31
Class C Shares ................. 1,000.00 1,009.00 1.87% 9.31
HYPOTHETICAL 5% RETURN
Fiduciary Shares ............... $1,000.00 $1,019.74 1.02% $5.11
Class A Shares ................. 1,000.00 1,018.50 1.27% 6.36
Class B Shares ................. 1,000.00 1,015.52 1.87% 9.35
Class C Shares ................. 1,000.00 1,015.52 1.87% 9.35
--------------------------------------------------------------------------------
CAPITAL GROWTH ALLOCATION FUND
--------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares ............... $1,000.00 $1,009.00 0.32% $1.59
Class A Shares ................. 1,000.00 1,007.90 0.57% 2.84
Class C Shares ................. 1,000.00 1,004.30 1.27% 6.31
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 1,018.50 1.27% 6.36
--------------------------------------------------------------------------------
DIVERSIFIED EQUITY ALLOCATION FUND
--------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares ............... $1,000.00 $1,003.70 0.33% $1.64
Class A Shares ................. 1,000.00 1,002.70 0.57% 2.83
Class C Shares ................. 1,000.00 999.50 1.27% 6.30
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 $1,012.80 0.33% $1.65
Class A Shares ................. 1,000.00 1,011.60 0.57% 2.84
Class C Shares ................. 1,000.00 1,008.10 1.27% 6.32
HYPOTHETICAL 5% RETURN
Fiduciary Shares ............... $1,000.00 $1,023.16 0.33% $1.66
Class A Shares ................. 1,000.00 1,021.92 0.58% 2.91
Class C Shares ................. 1,000.00 1,018.50 1.27% 6.36
--------------------------------------------------------------------------------
INCOME PLUS ALLOCATION FUND
--------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares ............... $1,000.00 $1,014.20 0.33% $1.65
Class A Shares ................. 1,000.00 1,012.40 0.57% 2.84
Class C Shares ................. 1,000.00 1,009.10 1.28% 6.38
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
2/1/11 7/31/11 RATIOS PERIOD*
--------------------------------------------------------------------------------
BOND FUND
--------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares ............... $1,000.00 $1,040.10 0.79% $4.00
Class A Shares ................. 1,000.00 1,038.50 1.04% 5.26
Class B Shares ................. 1,000.00 1,035.60 1.72% 8.68
Class C Shares ................. 1,000.00 1,036.50 1.47% 7.42
HYPOTHETICAL 5% RETURN
Fiduciary Shares ............... $1,000.00 $1,020.88 0.79% $3.96
Class A Shares ................. 1,000.00 1,019.64 1.04% 5.21
Class B Shares ................. 1,000.00 1,016.27 1.72% 8.60
Class C Shares ................. 1,000.00 1,017.50 1.47% 7.35
--------------------------------------------------------------------------------
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND
--------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares ............... $1,000.00 $1,041.00 0.54% $2.73
Class A Shares ................. 1,000.00 1,039.90 0.79% 4.00
Class B Shares ................. 1,000.00 1,035.80 1.49% 7.52
Class C Shares ................. 1,000.00 1,036.70 1.24% 6.26
HYPOTHETICAL 5% RETURN
Fiduciary Shares ............... $1,000.00 $1,022.12 0.54% $2.71
Class A Shares ................. 1,000.00 1,020.88 0.79% 3.96
Class B Shares ................. 1,000.00 1,017.41 1.49% 7.45
Class C Shares ................. 1,000.00 1,018.65 1.24% 6.21
--------------------------------------------------------------------------------
NATIONAL INTERMEDIATE TAX-FREE BOND FUND
--------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares ............... $1,000.00 $1,040.60 0.52% $2.63
Class A Shares ................. 1,000.00 1,038.40 0.77% 3.89
Class C Shares ................. 1,000.00 1,036.00 1.22% 6.16
HYPOTHETICAL 5% RETURN
Fiduciary Shares ............... $1,000.00 $1,022.22 0.52% $2.61
Class A Shares ................. 1,000.00 1,020.98 0.77% 3.86
Class C Shares ................. 1,000.00 1,018.74 1.22% 6.11
--------------------------------------------------------------------------------
SHORT TERM BOND FUND
--------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares ............... $1,000.00 $1,013.40 0.67% $3.34
Class A Shares ................. 1,000.00 1,012.00 0.95% 4.74
Class C Shares ................. 1,000.00 1,010.50 1.40% 6.98
HYPOTHETICAL 5% RETURN
Fiduciary Shares ............... $1,000.00 $1,021.47 0.67% $3.36
Class A Shares ................. 1,000.00 1,020.08 0.95% 4.76
Class C Shares ................. 1,000.00 1,017.85 1.40% 7.00
--------------------------------------------------------------------------------
WISCONSIN TAX-EXEMPT FUND
--------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares ............... $1,000.00 $1,054.10 0.65% $3.31
Class A Shares ................. 1,000.00 1,052.90 0.90% 4.58
Class B Shares ................. 1,000.00 1,049.20 1.60% 8.13
Class C Shares ................. 1,000.00 1,050.60 1.35% 6.86
HYPOTHETICAL 5% RETURN
Fiduciary Shares ............... $1,000.00 $1,021.57 0.65% $3.26
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 the fund's 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, 2011
BALANCED FUND
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - 63.1%+
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 5.3%
Dick's Sporting Goods * 5,240 $ 193,880
Hasbro 4,100 162,196
Las Vegas Sands * 4,420 208,536
PetSmart 4,360 187,567
Starwood Hotels & Resorts Worldwide 3,750 206,100
Walt Disney 6,515 251,609
Yum! Brands 2,550 134,691
------------
1,344,579
------------
CONSUMER STAPLES - 8.3%
Altria Group 9,880 259,844
Anheuser-Busch InBev NV, SP ADR 3,795 218,516
Coca-Cola 5,835 396,838
Kraft Foods, Cl A 7,905 271,774
Mead Johnson Nutrition 1,790 127,752
Philip Morris International 5,950 423,462
Procter & Gamble 6,855 421,514
------------
2,119,700
------------
ENERGY - 10.1%
BG Group PLC, SP ADR 2,730 323,778
EOG Resources 1,585 161,670
ExxonMobil 7,920 631,937
Occidental Petroleum 5,390 529,190
QEP Resources 6,405 280,731
Schlumberger 3,895 351,991
Suncor Energy (Canada) 8,080 308,818
------------
2,588,115
------------
FINANCIALS - 3.8%
JPMorgan Chase 12,015 486,007
Wells Fargo 17,360 485,038
------------
971,045
------------
HEALTH CARE - 6.2%
DaVita * 2,700 225,558
Fresenius Medical Care, ADR 1,695 130,413
Gilead Sciences * 4,935 209,047
Johnson & Johnson 3,610 233,892
Merck 3,730 127,305
Pfizer 8,912 171,467
UnitedHealth Group 7,290 361,803
WellPoint 1,970 133,074
------------
1,592,559
------------
INDUSTRIAL - 9.8%
3M 3,190 277,977
Danaher 19,205 943,158
Donaldson 5,390 298,498
Emerson Electric 2,245 110,207
General Electric 6,245 111,848
Rockwell Collins 4,385 241,570
Stericycle * 2,850 234,042
--------------------------------------------------------------------------------
Description Shares/Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
INDUSTRIAL - (CONTINUED)
United Parcel Service, Cl B 4,250 $ 294,185
------------
2,511,485
------------
INFORMATION TECHNOLOGY - 13.3%
Accenture, Cl A ++ 2,450 144,893
Analog Devices 5,920 203,648
Apple * 1,585 618,911
Autodesk * 4,520 155,488
Broadcom, Cl A * 5,595 207,407
EMC * 15,400 401,632
Google, Cl A * 855 516,155
NetApp * 4,870 231,422
Oracle 16,140 493,561
Qualcomm 5,015 274,722
Riverbed Technology * 5,370 153,743
------------
3,401,582
------------
MATERIALS - 5.4%
Ecolab 7,940 397,000
Praxair 7,330 759,681
Weyerhaeuser, REIT 11,594 231,764
------------
1,388,445
------------
UTILITIES - 0.9%
ITC Holdings 1,815 127,522
Wisconsin Energy 3,200 98,080
------------
225,602
------------
TOTAL COMMON STOCK
(Cost $12,305,774) 16,143,112
------------
--------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - 14.0%
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 1.8%
Comcast
5.700%, 07/01/19 $ 100,000 114,468
Gap
5.950%, 04/12/21 90,000 88,800
Georgia-Pacific (A)
8.250%, 05/01/16 50,000 56,911
Staples
9.750%, 01/15/14 50,000 59,484
Time Warner Entertainment
8.375%, 03/15/23 100,000 131,091
------------
450,754
------------
ENERGY - 1.4%
BP Capital Markets PLC
4.742%, 03/11/21 75,000 81,501
Energy Transfer Partners
9.700%, 03/15/19 100,000 129,658
Magellan Midstream Partners
6.550%, 07/15/19 50,000 59,611
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 53
SCHEDULE OF INVESTMENTS
JULY 31, 2011
BALANCED FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - (CONTINUED)
--------------------------------------------------------------------------------
ENERGY - (CONTINUED)
Petrobras International Finance
3.875%, 01/27/16 $ 50,000 $ 51,848
Williams Partners
4.125%, 11/15/20 50,000 49,967
------------
372,585
------------
FINANCIALS - 5.7%
American International Group
3.650%, 01/15/14 75,000 77,215
Bank of America, MTN
5.650%, 05/01/18 100,000 105,826
Berkshire Hathaway Finance
5.400%, 05/15/18 50,000 56,843
Boston Properties
4.125%, 05/15/21 50,000 49,371
Capital One Financial
4.750%, 07/15/21 25,000 25,271
Citigroup
4.750%, 05/19/15 75,000 80,456
Ford Motor Credit
5.000%, 05/15/18 100,000 100,545
GE Global Insurance
7.750%, 06/15/30 200,000 241,057
General Electric Capital
2.250%, 11/09/15 100,000 100,453
HSBC Holdings PLC
5.100%, 04/05/21 75,000 78,775
JPMorgan Chase
3.125%, 12/01/11 100,000 100,985
4.250%, 10/15/20 100,000 99,746
Lehman Brothers Holdings, MTN (B)
5.625%, 01/24/13 125,000 33,750
NASDAQ OMX Group
5.250%, 01/16/18 50,000 52,236
Wells Fargo
3.000%, 12/09/11 150,000 151,499
5.625%, 12/11/17 100,000 113,608
------------
1,467,636
------------
FOREIGN GOVERNMENT - 0.3%
Export-Import Bank of Korea
3.750%, 10/20/16 75,000 77,007
------------
HEALTH CARE - 0.5%
Laboratory Corp of America Holdings
4.625%, 11/15/20 50,000 52,148
Wellpoint
6.000%, 02/15/14 58,000 64,694
------------
116,842
------------
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - (CONTINUED)
--------------------------------------------------------------------------------
INDUSTRIAL - 1.2%
American Airlines, Ser 11-1A
5.250%, 01/31/21 $ 50,000 $ 49,125
Continental Airlines, Ser 10-1A
4.750%, 01/12/21 100,000 97,500
Delta Air Lines, Ser 11-1A
5.300%, 04/15/19 100,000 100,380
L-3 Communications, Ser B
6.375%, 10/15/15 50,000 51,313
------------
298,318
------------
INFORMATION TECHNOLOGY - 0.1%
International Business Machines
6.500%, 01/15/28 25,000 31,043
------------
MATERIALS - 1.3%
Alcoa
5.400%, 04/15/21 50,000 51,975
ArcelorMittal
5.500%, 03/01/21 25,000 25,610
Dow Chemical
4.250%, 11/15/20 75,000 76,830
Rio Tinto Finance USA
6.500%, 07/15/18 100,000 120,949
Teck Resources
10.250%, 05/15/16 50,000 60,000
------------
335,364
------------
TELECOMMUNICATION SERVICES - 1.1%
AT&T
4.450%, 05/15/21 25,000 26,435
Telefonica Emisiones SAU
3.992%, 02/16/16 100,000 100,427
Verizon Maryland
8.000%, 10/15/29 75,000 90,365
Verizon New England
7.875%, 11/15/29 50,000 59,897
------------
277,124
------------
UTILITIES - 0.6%
Exelon Generation
6.200%, 10/01/17 50,000 57,457
Great River Energy (A)
4.478%, 07/01/30 50,000 50,219
Virginia Electric & Power, Ser A
4.750%, 03/01/13 50,000 53,046
------------
160,722
------------
TOTAL CORPORATE OBLIGATIONS
(Cost $3,535,492) 3,587,395
------------
The accompanying notes are an integral part of the financial statements.
54 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2011
BALANCED FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS - 3.9%
--------------------------------------------------------------------------------
FHLMC Gold
6.000%, 09/01/17 $ 42,114 $ 45,841
5.000%, 10/01/20 18,162 19,640
4.500%, 03/01/18 16,450 17,477
4.500%, 05/01/19 25,023 26,802
4.500%, 07/01/23 47,941 51,004
FNMA
8.000%, 05/01/25 10,423 12,227
7.000%, 07/01/26 12,733 14,709
7.000%, 12/01/27 12,740 14,742
6.500%, 05/01/14 12,200 12,962
6.500%, 01/01/28 12,347 14,089
6.000%, 02/01/17 47,666 51,799
6.000%, 03/01/28 17,846 19,872
5.500%, 12/01/17 47,644 51,443
5.000%, 12/01/17 13,188 14,259
5.000%, 04/01/18 67,791 73,296
5.000%, 11/01/18 7,242 7,830
5.000%, 03/01/34 124,892 134,045
4.500%, 02/01/19 60,697 65,107
4.500%, 05/01/19 150,739 161,644
4.500%, 06/01/19 20,568 22,056
4.000%, 09/01/18 15,046 15,975
FNMA, CMO REMIC
Ser 2003-25, Cl CD
3.500%, 03/25/17 9,179 9,203
GNMA
7.000%, 02/15/26 14,967 17,404
7.000%, 10/15/27 13,737 16,003
7.000%, 03/15/29 14,581 17,036
6.500%, 05/15/28 16,555 18,990
6.500%, 01/15/29 24,503 28,106
6.000%, 04/15/29 45,451 51,197
------------
TOTAL U.S. GOVERNMENT AGENCY
MORTGAGE-BACKED OBLIGATIONS
(Cost $931,555) 1,004,758
------------
--------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES - 3.6%
--------------------------------------------------------------------------------
Chase Mortgage Finance,
Ser 2004-S1, CI A3
5.500%, 02/25/19 69,583 72,223
Citicorp Mortgage Securities,
Ser 2003-10, Cl A1
4.500%, 11/25/18 74,822 76,739
CS First Boston Mortgage Securities,
Ser 2005-C1, Cl A4 (C)
5.014%, 02/15/38 150,000 162,298
DBUBS Mortgage Trust,
Ser 2011-LC1A, Cl A1
3.742%, 11/10/46 74,332 76,709
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES - (CONTINUED)
--------------------------------------------------------------------------------
Lehman Mortgage Trust,
Ser 2007-8, Cl 1A1
6.000%, 09/25/37 $ 172,794 $ 137,877
Morgan Stanley Capital I,
Ser 2003-T11, Cl A4
5.150%, 06/13/41 100,000 105,711
Residential Funding Mortgage
Securities I, Ser 2004-S3, Cl A1
4.750%, 03/25/19 37,186 38,089
Wells Fargo Mortgage Backed
Securities Trust, Ser 2003-M,
Cl A1 (C)
4.687%, 12/25/33 26,066 26,291
Ser 2004-2, Cl A1
5.000%, 01/25/19 89,016 91,921
Ser 2007-7, Cl A1
6.000%, 06/25/37 161,344 151,288
------------
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $954,177) 939,146
------------
--------------------------------------------------------------------------------
ASSET-BACKED SECURITIES - 3.8%
--------------------------------------------------------------------------------
Ally Master Owner Trust,
Ser 2011-1, Cl A2
2.150%, 01/15/16 75,000 76,329
Avis Budget Rental Car Funding
AESOP, Ser 2011-1A, Cl A
1.850%, 09/20/13 100,000 100,755
Centerpoint Energy Transition Bond,
Ser 2001-1, Cl A4
5.630%, 09/15/15 58,568 61,978
Centerpoint Energy Transition Bond,
Ser 2005-A, Cl A3
5.090%, 08/01/15 125,000 134,529
Hertz Vehicle Financing,
Ser 2011-1A, Cl A1
2.200%, 03/25/16 100,000 100,635
SLM Student Loan Trust,
Ser 2011-A, Cl A1 (C)
1.187%, 10/15/24 93,915 94,177
SLM Student Loan Trust,
Ser 2011-2, Cl A1 (C)
0.787%, 11/25/27 108,505 108,366
TXU Electric Delivery Transition Bond,
Ser 2004-1, Cl A3
5.290%, 05/15/18 120,000 135,319
Volkswagen Auto Loan Enhanced Trust,
Ser 2011-1, Cl A4
1.980%, 09/20/17 75,000 76,558
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 55
SCHEDULE OF INVESTMENTS
JULY 31, 2011
BALANCED FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par/Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
ASSET-BACKED SECURITIES - (CONTINUED)
--------------------------------------------------------------------------------
World Omni Auto Receivables Trust,
Ser 2011-A, Cl A4
1.910%, 04/15/16 $ 75,000 $ 76,327
------------
TOTAL ASSET-BACKED SECURITIES
(Cost $942,454) 964,973
------------
--------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS - 2.0%
--------------------------------------------------------------------------------
U.S. Treasury Notes
1.500%, 06/30/16 75,000 75,575
3.000%, 09/30/16 200,000 215,750
3.125%, 05/15/21 150,000 154,101
3.625%, 02/15/21 60,000 64,383
------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $488,431) 509,809
------------
--------------------------------------------------------------------------------
TAXABLE MUNICIPAL BONDS - 1.2%
--------------------------------------------------------------------------------
CALIFORNIA - 1.1%
California State, Public School
Improvements, Taxable, GO
6.200%, 10/1/19 50,000 56,759
Los Angeles, Department of
Water & Power Revenue,
Build America Bonds,
Taxable, RB
6.574%, 07/01/45 50,000 58,959
Metropolitan Water District of
Southern California, Build
America Bonds, Taxable, RB
6.947%, 07/01/40 100,000 110,424
University of California
Revenue, Build America
Bonds, Taxable, RB (C)
1.988%, 05/15/50 50,000 50,948
------------
277,090
------------
NEW JERSEY - 0.1%
New Jersey State, Turnpike
Authority Turnpike Revenue,
Build America Bonds,
Taxable, RB
7.102%, 01/01/41 25,000 30,904
------------
TOTAL TAXABLE MUNICIPAL BONDS
(Cost $284,389) 307,994
------------
--------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 0.5%
--------------------------------------------------------------------------------
Financial Select Sector SPDR ETF 9,155 135,494
------------
TOTAL REGISTERED INVESTMENT COMPANY
(Cost $90,907) 135,494
------------
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 7.6%
--------------------------------------------------------------------------------
Credit Suisse Securities (USA)
0.140%, dated 07/29/11,
matures on 08/01/11,
repurchase price $1,935,026
(collateralized by a U.S.
Treasury Note obligation, par
value $1,880,000, 2.75%,
10/31/13, total market value
$1,992,519) $ 1,935,003 $ 1,935,003
------------
TOTAL REPURCHASE AGREEMENT
(Cost $1,935,003) 1,935,003
------------
TOTAL INVESTMENTS - 99.7%
(Cost $21,468,182) 25,527,684
------------
OTHER ASSETS & LIABILITIES, NET - 0.3% 65,210
------------
NET ASSETS - 100.0% $ 25,592,894
============
--------------------------------------------------------------------------------
* 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) SECURITIES SOLD WITHIN THE TERMS OF A PRIVATE PLACEMENT MEMORANDUM, EXEMPT
FROM REGISTRATION UNDER SECTION 3(A)-4, 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, 2011 WERE $107,130 AND REPRESENTED 0.4% OF NET
ASSETS.
(B) THE ISSUER IS IN DEFAULT OF CERTAIN DEBT COVENANTS. INCOME IS NOT BEING
ACCRUED. AS OF JULY 31, 2011, THE VALUE OF THESE SECURITIES AMOUNTED TO
$33,750, WHICH REPRESENTS 0.1% OF NET ASSETS.
(C) FLOATING RATE SECURITY. RATE DISCLOSED IS AS OF JULY 31, 2011.
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
GO - GENERAL OBLIGATION
MTN - MEDIUM TERM NOTE
PLC - PUBLIC LIABILITY COMPANY
RB - REVENUE BOND
REIT - REAL ESTATE INVESTMENT TRUST
REMIC - REAL ESTATE MORTGAGE INVESTMENT CONDUIT
SER - SERIES
SP ADR - SPONSORED AMERICAN DEPOSITARY RECEIPT
SPDR - STANDARD & POOR'S DEPOSITARY RECEIPTS
The accompanying notes are an integral part of the financial statements.
56 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2011
BALANCED FUND (CONCLUDED)
A summary of the inputs used to value the Fund's net assets as of July 31, 2011
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
07/31/11 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Common Stock ** $ 16,143,112 $ 16,143,112 $ -- $ --
Corporate Obligations 3,587,395 -- 3,587,395 --
U.S. Government Agency Mortgage-Backed Obligations 1,004,758 -- 1,004,758 --
Mortgage-Backed Securities 939,146 -- 939,146 --
Asset-Backed Securities 964,973 -- 964,973 --
U.S. Treasury Obligations 509,809 -- 509,809 --
Taxable Municipal Obligations 307,994 -- 307,994 --
Registered Investment Company 135,494 135,494 -- --
Repurchase Agreement 1,935,003 -- 1,935,003 --
------------ ------------ ------------ ------------
Total: $ 25,527,684 $ 16,278,606 $ 9,249,078 $ --
============ ============ ============ ============
** See schedule of investments detail for industry breakout.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 57
SCHEDULE OF INVESTMENTS
JULY 31, 2011
COGNITIVE VALUE FUND
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - 95.1%+
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 13.0%
Amcon Distributing 2,900 $ 189,544
American Greetings, Cl A 13,100 290,427
Ameristar Casinos 11,100 246,420
Ark Restaurants 13,100 198,465
Ascena Retail Group * 27,400 885,568
Biglari Holdings * 1,060 390,260
Brinker International 31,400 754,228
Cato, Cl A 17,300 481,286
Chico's FAS 27,400 413,466
Cinemark Holdings 13,700 267,013
Collectors Universe 26,900 420,716
Dana Holding * 13,200 220,044
Dillard's, Cl A 5,000 281,300
Dixie Group * 27,413 118,698
Emerson Radio * 213,100 377,187
Finish Line, Cl A 42,200 898,860
GameStop * 12,300 290,034
Gannett 46,000 586,960
Harman International Industries 20,200 840,320
Iconix Brand Group * 4,400 102,652
Lifetime Brands 42,420 466,620
Men's Wearhouse 8,300 272,157
Motorcar Parts of America * 33,800 436,358
Movado Group 16,500 266,970
Papa John's International * 6,200 193,502
Pier 1 Imports * 27,900 306,621
Rick's Cabaret International * 72,800 596,960
Rocky Brands * 35,300 449,369
Standard Motor Products 31,800 451,560
Sturm Ruger 9,700 265,004
True Religion Apparel * 10,500 353,745
------------
12,312,314
------------
CONSUMER STAPLES - 4.0%
B&G Foods, Cl A 15,100 283,729
Corn Products International 3,800 193,382
Energizer Holdings * 2,300 185,472
Imperial Sugar 6,300 145,404
Ingles Markets, Cl A 12,700 195,580
Inter Parfums 11,700 234,468
Nature's Sunshine Products * 1,600 26,704
Omega Protein * 52,000 630,240
Pantry * 10,900 194,238
Physicians Formula Holdings * 20,500 77,900
Smithfield Foods * 39,500 869,790
SUPERVALU 34,400 295,840
Village Super Market, Cl A 17,000 456,960
------------
3,789,707
------------
ENERGY - 7.5%
Adams Resources & Energy 5,800 149,640
Alon USA Energy 34,700 421,952
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
ENERGY - (CONTINUED)
Complete Production Services * 27,500 $ 1,069,200
CVR Energy 41,000 1,100,850
Delek US Holdings 36,800 611,616
Helix Energy Solutions Group * 23,400 458,172
HollyFrontier 1 54
Newpark Resources * 39,500 366,955
REX American Resources * 10,100 174,023
SEACOR Holdings 8,900 893,204
Stone Energy * 25,400 824,484
Western Refining * 50,200 1,025,586
------------
7,095,736
------------
FINANCIALS - 22.0%
1st Source 32,200 742,210
Advance America Cash Advance
Centers 56,090 395,434
Allied World Assurance Company
Holdings ++ 16,750 912,038
Ashford Hospitality Trust REIT 29,900 325,910
Assurant 24,600 876,252
Astoria Financial 15,700 182,905
B of I Holding * 16,510 231,057
BBVA Banco Frances SA, ADR 74,300 736,313
Brown & Brown 8,900 194,109
Cape Bancorp * 9,800 92,218
Citizens & Northern 41,700 686,382
Community Bank System 9,800 246,568
Compass Diversified Holdings 28,500 426,645
Delphi Financial Group, Cl A 13,400 360,728
Dime Community Bancshares 47,400 665,970
Doral Financial * ++ 118,000 206,500
East West Bancorp 18,550 344,288
Encore Capital Group * 15,100 412,985
Endurance Specialty Holdings ++ 18,900 769,986
Extra Space Storage REIT 13,900 295,514
Ezcorp, Cl A * 7,500 249,600
First Busey 37,900 196,701
First Citizens BancShares, Cl A 1,100 198,132
First Commonwealth Financial 59,400 305,316
Flushing Financial 61,800 761,376
Fortegra Financial * 8,800 68,200
Getty Realty REIT 22,100 512,720
Hospitality Properties Trust REIT 24,400 616,100
Interactive Brokers Group, Cl A 18,400 278,576
Intl FCStone * 19,600 450,408
Maiden Holdings ++ 72,700 673,929
Meadowbrook Insurance Group 6,700 62,980
Mercury General 13,700 508,818
MFA Financial REIT 29,600 221,704
Mission West Properties REIT 58,600 474,660
New Hampshire Thrift Bancshares 11,600 152,192
One Liberty Properties REIT 56,600 875,036
The accompanying notes are an integral part of the financial statements.
58 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2011
COGNITIVE VALUE FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
FINANCIALS - (CONTINUED)
Pacific Premier Bancorp * 30,500 $ 201,300
Primerica 13,600 294,032
Protective Life 15,900 338,034
PS Business Parks REIT 12,800 727,168
Republic Bancorp, Cl A 36,800 666,448
Safety Insurance Group 15,200 617,120
Senior Housing Properties Trust REIT 26,000 622,440
Union First Market Bankshares 39,200 488,040
Universal Insurance Holdings 91,000 388,570
WesBanco 36,700 754,185
------------
20,807,797
------------
HEALTH CARE - 6.3%
AMERIGROUP * 9,200 506,000
Centene * 10,900 357,629
Healthspring * 18,100 742,824
Hill-Rom Holdings 7,600 283,404
Integramed America * 19,700 180,255
Magellan Health Services * 17,700 922,170
Medicines * 30,300 453,894
Mediware Information Systems * 45,000 512,550
Molina Healthcare * 10,900 246,885
Par Pharmaceutical * 6,900 223,491
PerkinElmer 9,200 225,032
Sun Healthcare Group * 50,500 353,500
Triple-S Management, Cl B * ++ 22,300 481,011
Viropharma * 10,700 193,456
WellCare Health Plans * 5,900 258,715
------------
5,940,816
------------
INDUSTRIAL - 17.9%
Aircastle ++ 15,200 174,040
Alaska Air Group * 8,700 531,744
Allied Motion Technologies * 56,600 297,150
Applied Industrial Technologies 30,700 979,944
Atlas Air Worldwide Holdings * 10,300 539,617
Barrett Business Services 40,600 605,752
Briggs & Stratton 18,400 315,376
CAE ++ 27,100 357,720
Ceradyne * 13,100 424,571
CRA International * 28,400 763,392
Crane 9,700 449,304
Cubic 18,700 907,698
DXP Enterprises * 14,500 394,255
Ecology and Environment, Cl A 21,800 372,998
EMCOR Group * 15,100 421,592
Espey Manufacturing & Electronics 12,900 323,919
Fly Leasing, ADR 39,400 444,432
Global Ship Lease, Cl A * ++ 33,200 130,476
GP Strategies * 15,509 200,842
Hurco * 14,700 432,474
ICF International * 22,000 513,920
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
INDUSTRIAL - (CONTINUED)
Kadant * 31,700 $ 834,027
Kelly Services, Cl A * 35,530 556,045
Kennametal 5,900 232,637
Key Technology * 28,500 462,840
Lincoln Electric Holdings 6,900 236,118
MasTec * 25,700 536,616
Miller Industries 34,200 560,196
NACCO Industries, Cl A 8,700 790,656
RCM Technologies * 121,600 672,448
SL Industries * 20,600 501,816
Snap-on 5,700 324,102
Steelcase, Cl A 35,700 354,501
Textainer Group Holdings 9,700 251,715
Thomas & Betts * 6,500 317,070
Watsco 11,300 668,734
------------
16,880,737
------------
INFORMATION TECHNOLOGY - 12.6%
ACI Worldwide * 11,500 415,840
Agilysys * 8,000 76,560
Amtech Systems * 20,300 364,385
Anixter International 9,800 611,716
ASM International NV ++ 11,200 318,304
Brightpoint * 53,700 488,133
BTU International * 2,082 14,928
CACI International, Cl A * 6,600 389,928
Ciber * 25,100 126,002
Coherent * 12,100 581,163
Communications Systems 12,900 230,652
CSG Systems International * 41,300 733,488
Entegris * 36,400 311,948
Fairchild Semiconductor
International * 27,000 405,270
Forrester Research 18,200 575,120
Insight Enterprises * 39,600 666,468
Kemet * 26,800 326,960
Kulicke & Soffa Industries * 53,400 491,280
Lattice Semiconductor * 82,500 511,500
Lexmark International, Cl A * 4,700 157,779
Littelfuse 9,500 485,355
MAXIMUS 5,900 227,917
NAM TAI Electronics ++ 42,100 246,285
Newport * 45,300 703,962
Technical Communications 29,100 232,509
TeleNav * 24,700 247,741
TeleTech Holdings * 25,100 496,729
VASCO Data Security International * 27,900 270,072
Viasystems Group * 20,600 462,264
Vishay Intertechnology * 53,400 735,318
------------
11,905,576
------------
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 59
SCHEDULE OF INVESTMENTS
JULY 31, 2011
COGNITIVE VALUE FUND (CONCLUDED)
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
MATERIALS - 7.3%
Boise 98,000 $ 679,140
Buckeye Technologies 22,300 599,647
Cabot 11,500 449,650
Chase 23,000 322,460
Domtar ++ 4,200 335,790
Ferro * 47,500 618,450
Georgia Gulf * 27,900 559,116
Innophos Holdings 5,300 255,460
Innospec * 31,800 1,021,416
Neenah Paper 13,900 280,641
OM Group * 9,000 326,520
PolyOne 30,000 465,000
Rock-Tenn, Cl A 3,200 196,672
UFP Technologies * 26,400 497,640
Westlake Chemical 5,300 274,275
------------
6,881,877
------------
TELECOMMUNICATION SERVICES - 0.4%
USA Mobility 21,700 358,267
------------
UTILITIES - 4.1%
Chesapeake Utilities 15,400 594,594
Delta Natural Gas 6,300 203,994
MGE Energy 14,700 603,876
Pepco Holdings 12,600 235,368
Southwest Gas 9,900 369,171
TECO Energy 18,200 337,246
Transportadora de Gas del Sur SA ++ 65,400 237,402
UGI 15,200 460,560
Unisource Energy 23,200 854,224
------------
3,896,435
------------
TOTAL COMMON STOCK
(Cost $85,683,904) 89,869,262
------------
--------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANIES - 2.8%
--------------------------------------------------------------------------------
iShares Russell 2000 Value
Index Fund ETF 12,000 848,760
iShares S&P SmallCap 600 Value
Index Fund ETF 12,000 866,520
--------------------------------------------------------------------------------
Description Shares/Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANIES - (CONTINUED)
--------------------------------------------------------------------------------
Rydex S&P SmallCap 600 Pure
Value ETF 17,000 $ 658,410
Vanguard S&P Small-Cap 600
Value ETF 4,500 276,795
------------
TOTAL REGISTERED INVESTMENT COMPANIES
(Cost $2,359,297) 2,650,485
------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 0.9%
--------------------------------------------------------------------------------
Credit Suisse Securities (USA)
0.140%, dated 07/29/11,
matures on 08/01/11,
repurchase price $843,840
(collateralized by a U.S.
Treasury Note obligation, par
value $815,000, 2.750%,
10/31/13, total market value
$863,778) $ 843,830 $ 843,830
------------
TOTAL REPURCHASE AGREEMENT
(Cost $843,830) 843,830
------------
TOTAL INVESTMENTS - 98.8%
(Cost $88,887,031) 93,363,577
------------
OTHER ASSETS & LIABILITIES, NET - 1.2% 1,161,943
------------
NET ASSETS - 100.0% $ 94,525,520
============
--------------------------------------------------------------------------------
* 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
A summary of the inputs used to value the Fund's net assets as of July 31, 2011
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
07/31/11 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Common Stock ** $ 89,869,262 $ 89,869,262 $ -- $ --
Registered Investment Companies 2,650,485 2,650,485 -- --
Repurchase Agreement 843,830 -- 843,830 --
------------ ------------ ------------ ------------
Total: $ 93,363,577 $ 92,519,747 $ 843,830 $ --
============ ============ ============ ============
** See schedule of investments detail for industry breakout.
The accompanying notes are an integral part of the financial statements.
60 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2011
CORE EQUITY FUND
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - 98.2%+
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 10.2%
Coach 3,300 $ 213,048
DIRECTV, Cl A * 2,900 146,972
Harman International Industries 5,200 216,320
Home Depot 31,995 1,117,585
Liberty Capital, Cl A * 13,700 1,093,397
Macy's 22,100 638,027
McDonald's 10,600 916,688
Starbucks 6,500 260,585
Target 6,800 350,132
Weight Watchers International 4,800 370,512
Wynn Resorts 3,300 507,144
---------------
5,830,410
---------------
CONSUMER STAPLES - 12.5%
Coca-Cola 31,600 2,149,116
Coca-Cola Enterprises 41,100 1,155,321
Colgate-Palmolive 12,000 1,012,560
General Mills 20,500 765,675
Hansen Natural * 3,200 245,184
Mead Johnson Nutrition 6,700 478,179
Procter & Gamble 21,500 1,322,035
---------------
7,128,070
---------------
ENERGY - 12.6%
Anadarko Petroleum 5,100 421,056
Chevron 16,000 1,664,320
ConocoPhillips 15,030 1,082,010
Denbury Resources * 12,200 235,704
ExxonMobil 32,300 2,577,217
Nabors Industries * ++ 20,922 552,550
Occidental Petroleum 3,100 304,358
Schlumberger 1,800 162,666
Valero Energy 7,600 190,912
---------------
7,190,793
---------------
FINANCIALS - 15.6%
Alleghany * 1,300 428,233
American National Insurance 1,900 142,386
Assurant 13,700 487,994
CapitalSource 46,900 302,974
Citigroup 11,540 442,444
CNA Financial 13,900 382,806
CommonWealth REIT 34,200 807,804
Discover Financial Services 45,700 1,170,377
Fifth Third Bancorp 31,000 392,150
Franklin Resources 2,300 292,008
Goldman Sachs Group 2,210 298,284
Interactive Brokers Group, Cl A 8,400 127,176
JPMorgan Chase 27,020 1,092,959
Popular * ++ 123,900 297,360
Prudential Financial 3,800 222,984
State Street 6,500 269,555
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
FINANCIALS - (CONTINUED)
SunTrust Banks 18,500 $ 453,065
Wells Fargo 46,600 1,302,004
---------------
8,912,563
---------------
HEALTH CARE - 9.9%
Aetna 12,500 518,625
Amgen * 4,600 251,620
CIGNA 6,600 328,482
Coventry Health Care * 24,700 790,400
Covidien ++ 5,000 253,950
Life Technologies * 2,600 117,078
McKesson 8,600 697,632
Merck 10,000 341,300
Pfizer 31,309 602,385
Quest Diagnostics 8,100 437,481
Thermo Fisher Scientific * 19,800 1,189,782
WellPoint 1,800 121,590
---------------
5,650,325
---------------
INDUSTRIAL - 12.6%
3M 1,600 139,424
BE Aerospace * 8,600 342,280
Boeing 1,800 126,846
Caterpillar 4,900 484,071
CSX 11,700 287,469
Cummins 2,300 241,224
Deere 2,300 180,573
Eaton 12,200 584,990
FedEx 1,600 139,008
Gardner Denver 4,700 400,863
General Electric 98,355 1,761,538
Tyco International ++ 4,700 208,163
United Parcel Service, Cl B 21,400 1,481,308
Verisk Analytics, Cl A * 24,200 805,860
---------------
7,183,617
---------------
INFORMATION TECHNOLOGY - 17.0%
Accenture, Cl A ++ 2,600 153,764
Akamai Technologies * 3,900 94,458
Apple * 7,800 3,045,744
Applied Materials 35,400 436,128
Cisco Systems 32,100 512,637
eBay * 28,900 946,475
Google, Cl A * 700 422,583
Hewlett-Packard 13,200 464,112
Intel 32,580 727,511
Intuit * 3,700 172,790
Mastercard, Cl A 900 272,925
Microsoft 37,925 1,039,145
Oracle 12,000 366,960
Qualcomm 6,500 356,070
Seagate Technology ++ 10,300 143,067
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 61
SCHEDULE OF INVESTMENTS
JULY 31, 2011
CORE EQUITY FUND (CONCLUDED)
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
INFORMATION TECHNOLOGY - (CONTINUED)
Solera Holdings 7,800 $ 435,864
Zebra Technologies, Cl A * 3,400 136,000
---------------
9,726,233
---------------
MATERIALS - 2.4%
Domtar ++ 1,500 119,925
EI Du Pont de Nemours 13,600 699,312
FMC 1,700 148,869
Freeport-McMoRan Copper & Gold 2,800 148,288
Mosaic 3,500 247,520
---------------
1,363,914
---------------
TELECOMMUNICATION SERVICES - 2.6%
American Tower, Cl A * 4,200 220,626
AT&T 4,700 137,522
Sprint Nextel * 60,400 255,492
Verizon Communications 24,400 861,076
---------------
1,474,716
---------------
UTILITIES - 2.8%
DTE Energy 15,300 762,552
Questar 47,500 875,425
---------------
1,637,977
---------------
TOTAL COMMON STOCK
(Cost $52,891,023)
56,098,618
---------------
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 1.7%
--------------------------------------------------------------------------------
Credit Suisse Securities (USA)
0.140%, dated 07/29/11,
matures on 08/01/11,
repurchase price $952,672
(collateralized by a U.S.
Treasury Note obligation,
par value $920,000, 2.750%,
10/31/13, total market value
$975,063) $ 952,661 $ 952,661
---------------
TOTAL REPURCHASE AGREEMENT
(Cost $952,661)
952,661
---------------
TOTAL INVESTMENTS - 99.9%
(Cost $53,843,684) 57,051,279
---------------
OTHER ASSETS & LIABILITIES, NET - 0.1% 70,696
---------------
NET ASSETS - 100.0% $ 57,121,975
===============
--------------------------------------------------------------------------------
* 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,
2011 IS AS FOLLOWS:
LONG FUTURES NUMBER OF EXPIRATION COUNTER- UNREALIZED
OUTSTANDING CONTRACTS DATE PARTY DEPRECIATION**
--------------------------------------------------------------------------------
S&P 500 E-MINI 16 SEPTEMBER 2011 GSC $(29,091)
** THE PRIMARY RISK EXPOSURE IS THE PRICE MOVEMENT OF THE UNDERLYING BASKET
OF EQUITY SECURITIES. SEE NOTE 2 FOR ADDITIONAL DETAILS.
GSC - GOLDMAN SACHS COMPANY
S&P - STANDARD & POOR'S
A summary of the inputs used to value the Fund's net assets as of July 31, 2011
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
07/31/11 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Assets:
Common Stock*** $ 56,098,618 $ 56,098,618 $ -- $ --
Repurchase Agreement 952,661 -- 952,661 --
Liabilities:
Derivatives (1)
Equity Contracts (29,091) (29,091) -- --
------------ ------------ ------------ ------------
Total: $ 57,022,188 $ 56,069,527 $ 952,661 $ --
============ ============ ============ ============
*** See schedule of investments detail for industry and security type
breakouts.
(1) Investments in derivatives include futures contracts.
The accompanying notes are an integral part of the financial statements.
62 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2011
ENHANCED GROWTH FUND
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - 97.9%+
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 3.9%
Amazon.com * 5,200 $ 1,157,104
Comcast, Cl A 22,800 547,656
Garmin ++ 7,050 230,042
Netflix * 2,900 771,371
Priceline.com * 1,500 806,475
------------
3,512,648
------------
ENERGY - 0.1%
Amyris * 5,000 115,750
------------
HEALTH CARE - 7.0%
Agilent Technologies * 5,000 210,800
Alexion Pharmaceuticals * 5,000 284,000
Alkermes * 12,000 206,880
Allscripts-Misys Healthcare Solutions * 7,000 127,050
Amgen * 9,000 492,300
Amylin Pharmaceuticals * 20,000 238,200
Ariad Pharmaceuticals * 25,000 297,250
athenahealth * 4,000 235,160
Baxter International 2,000 116,340
Biogen Idec * 3,000 305,610
Bristol-Myers Squibb 10,000 286,600
Celgene * 7,000 415,100
Cephalon * 2,000 159,880
Dendreon * 4,000 147,600
Endo Pharmaceuticals Holdings * 6,000 223,500
Gilead Sciences * 9,500 402,420
Human Genome Sciences * 3,000 63,030
Illumina * 3,000 187,350
Incyte * 10,000 174,400
Life Technologies * 4,000 180,120
Merck 4,000 136,520
Myriad Genetics * 4,000 85,080
NuPathe * 10,000 69,000
QIAGEN * ++ 8,000 135,520
Salix Pharmaceuticals * 6,000 232,680
Teva Pharmaceutical Industries,
SP ADR 6,000 279,840
United Therapeutics * 4,000 229,520
Vertex Pharmaceuticals * 6,000 311,160
Warner Chilcott, CL A ++ 6,000 126,120
------------
6,359,030
------------
INFORMATION TECHNOLOGY - 85.9%
Accenture, Cl A ++ 22,350 1,321,779
ACI Worldwide * 9,100 329,056
Activision Blizzard 37,100 439,264
Adobe Systems * 14,000 388,080
Advanced Micro Devices * 50,600 371,404
Akamai Technologies * 8,000 193,760
Alcatel-Lucent, SP ADR * 84,000 340,200
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
INFORMATION TECHNOLOGY - (CONTINUED)
Altera 10,300 $ 421,064
Amdocs * ++ 16,100 507,633
Amphenol, Cl A 8,500 415,565
Analog Devices 12,150 417,960
Apple * 20,745 8,100,508
Applied Materials 35,250 434,280
ASML Holding ++ 12,847 457,996
Atmel * 15,000 181,500
Autodesk * 19,900 684,560
Automatic Data Processing 14,000 720,860
Avnet * 8,590 251,687
Baidu, SP ADR * 5,000 785,350
BMC Software * 19,300 834,146
Broadcom, Cl A * 26,010 964,191
CA 20,500 457,150
Check Point Software Technologies * ++ 19,000 1,095,350
Cisco Systems 100,040 1,597,639
Citrix Systems * 12,800 922,112
Cognizant Technology Solutions, Cl A * 22,500 1,572,075
Computer Sciences 8,000 282,240
Corning 45,010 716,109
Cree * 5,000 164,300
Cypress Semiconductor * 11,600 238,728
Dell * 31,300 508,312
eBay * 37,300 1,221,575
Electronic Arts * 10,550 234,737
EMC * 59,970 1,564,018
Equinix * 4,500 470,115
F5 Networks * 11,900 1,112,412
Fairchild Semiconductor
International * 15,000 225,150
First Solar * 1,600 189,168
Fiserv * 7,800 470,808
Flextronics International * ++ 30,000 193,500
Google, Cl A * 6,925 4,180,553
GT Solar International * 51,200 698,368
Harris 10,000 398,700
Hewlett-Packard 37,000 1,300,920
Hitachi, ADR 9,500 587,765
IAC/InterActiveCorp * 9,125 377,684
Intel 90,920 2,030,244
International Business Machines 15,350 2,791,397
Intersil, Cl A 18,150 218,707
Intuit * 8,650 403,955
Juniper Networks * 19,600 458,444
KLA-Tencor 15,000 597,300
Lam Research * 11,550 472,164
Lexmark International, Cl A * 8,000 268,560
Linear Technology 12,350 361,855
Marvell Technology Group * ++ 57,650 854,373
Maxim Integrated Products 18,700 429,352
Microchip Technology 15,100 509,625
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 63
SCHEDULE OF INVESTMENTS
JULY 31, 2011
ENHANCED GROWTH FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
INFORMATION TECHNOLOGY - (CONTINUED)
Micron Technology * 95,100 $ 700,887
Microsoft 128,310 3,515,694
Motricity * 15,000 89,100
National Semiconductor 30,800 761,376
NetApp * 23,450 1,114,344
Netease.com, ADR * 5,300 267,756
Nintendo, ADR 17,100 341,145
Nokia, SP ADR 29,000 168,200
Novellus Systems * 8,000 248,320
Nuance Communications * 22,000 440,220
NVIDIA * 33,425 462,268
ON Semiconductor * 60,700 527,483
Open Text (Canada) * 7,500 506,700
Oracle 88,000 2,691,040
Paychex 10,100 285,123
Polycom * 14,000 378,420
Qualcomm 45,000 2,465,100
Rambus * 13,500 187,380
Red Hat * 15,200 639,616
Research In Motion (Canada) * 8,780 219,500
Riverbed Technology * 19,700 564,011
Salesforce.com * 10,750 1,555,632
Samsung Electronics, GDR ++ 2,350 935,535
SanDisk * 20,000 850,600
SAP, ADR 6,300 393,183
Seagate Technology ++ 42,000 583,380
Siliconware Precision Industries, ADR 34,309 169,143
Sohu.com * ++ 2,900 261,290
SuccessFactors * 13,200 356,400
SYNNEX * 12,400 351,168
Taiwan Semiconductor Manufacturing,
SP ADR 31,506 389,414
TE Connectivity ++ 14,300 492,349
Teradata * 12,850 706,236
Teradyne * 20,000 269,800
Texas Instruments 38,700 1,151,325
TIBCO Software * 13,500 351,540
Trimble Navigation * 5,600 199,248
Varian Semiconductor Equipment
Associates * 4,500 273,330
VeriSign 18,400 574,264
VMware, Cl A * 6,700 672,278
Western Digital * 16,000 551,360
Xilinx 25,000 802,500
Yahoo! * 32,835 430,138
------------
77,630,103
------------
--------------------------------------------------------------------------------
Description Shares/Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES - 1.0%
American Tower, Cl A * 7,050 $ 370,336
Millicom International Cellular ++ 2,450 292,775
Tele Norte Leste Participacoes, ADR 14,700 205,506
------------
868,617
------------
TOTAL COMMON STOCK
(Cost $60,537,575) 88,486,148
------------
--------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 1.6%
--------------------------------------------------------------------------------
PowerShares QQQ 25,000 1,449,250
------------
TOTAL REGISTERED INVESTMENT COMPANY
(Cost $1,198,900) 1,449,250
------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 0.2%
--------------------------------------------------------------------------------
Credit Suisse Securities (USA)
0.140%, dated 07/29/11,
matures on 08/01/11,
repurchase price $184,950
(collateralized by a U.S.
Treasury Note obligation, par value
$180,000, 2.750%, 10/31/13,
total market value $190,773) $ 184,948 184,948
------------
TOTAL REPURCHASE AGREEMENT
(Cost $184,948) 184,948
------------
TOTAL INVESTMENTS - 99.7%
(Cost $61,921,423) 90,120,346
------------
OTHER ASSETS & LIABILITIES, NET - 0.3% 287,091
------------
NET ASSETS - 100.0% $ 90,407,437
============
--------------------------------------------------------------------------------
* NON-INCOME PRODUCING SECURITY.
++ THIS SECURITY 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
The accompanying notes are an integral part of the financial statements.
64 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2011
ENHANCED GROWTH FUND (CONCLUDED)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TRANSACTIONS IN WRITTEN COVERED CALL OPTIONS DURING THE YEAR ENDED JULY 31, 2011
ARE SUMMARIZED AS FOLLOWS:
NUMBER OF
CONTRACTS PREMIUM
--------- -----------
OPTIONS WRITTEN AND OUTSTANDING AT BEGINNING OF YEAR -- $ --
CALL OPTIONS WRITTEN DURING YEAR 113 49,806
CALL OPTIONS CLOSED OR EXPIRED DURING YEAR (113) (49,806)
--------- -----------
OPTIONS WRITTEN AND OUTSTANDING AT END OF YEAR -- $ --
========= ===========
A summary of the inputs used to value the Fund's net assets as of July 31, 2011
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
07/31/11 PRICE INPUTS INPUTS
------------- ------------- ----------- -------------
Common Stock ** $ 88,486,148 $ 88,486,148 $ -- $ --
Registered Investment
Company 1,449,250 1,449,250 -- --
Repurchase Agreement 184,948 -- 184,948 --
------------- ------------- ----------- -------------
Total: $ 90,120,346 $ 89,935,398 $ 184,948 $ --
============= ============= =========== =============
** See schedule of investments detail for industry breakout.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 65
SCHEDULE OF INVESTMENTS
JULY 31, 2011
EQUITY INCOME FUND
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - 98.8%+
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 7.1%
Darden Restaurants 5,580 $ 283,464
Foot Locker 9,295 201,980
Home Depot 6,265 218,836
Limited Brands 10,445 395,448
Time Warner Cable 3,245 237,891
------------
1,337,619
------------
CONSUMER STAPLES - 4.1%
Altria Group 12,325 324,147
JM Smucker 2,560 199,475
PepsiCo 3,765 241,111
------------
764,733
------------
ENERGY - 12.8%
Chevron 4,030 419,201
ConocoPhillips 3,765 271,042
ExxonMobil 8,700 694,173
Marathon Oil 3,765 116,602
Marathon Petroleum * 1,895 82,982
Pengrowth Energy (Canada) 14,408 186,584
Spectra Energy 10,345 279,522
Williams 10,945 346,956
------------
2,397,062
------------
FINANCIALS - 23.8%
American Express 6,515 326,011
Annaly Capital Management REIT 21,685 363,874
Bank of Hawaii 4,030 180,584
BlackRock 1,035 184,706
Brandywine Realty Trust REIT 16,495 197,775
Chimera Investment REIT 121,185 373,250
Chubb 5,275 329,582
Commerce Bancshares 5,660 231,551
Federated Investors, Cl B 10,345 221,073
Home Properties REIT 4,030 264,046
JPMorgan Chase 6,095 246,543
Macerich REIT 3,785 201,097
Rayonier REIT 6,365 410,224
Trustmark 14,545 316,935
U.S. Bancorp 12,410 323,405
Wells Fargo 10,595 296,024
------------
4,466,680
------------
HEALTH CARE - 10.5%
Bristol-Myers Squibb 15,710 450,248
Johnson & Johnson 7,410 480,094
Merck 10,645 363,314
Pfizer 21,090 405,772
UnitedHealth Group 5,710 283,387
------------
1,982,815
------------
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
INDUSTRIAL - 15.2%
Boeing 3,565 $ 251,225
Deluxe 9,950 234,223
Eaton 6,685 320,546
General Electric 30,515 546,524
Lockheed Martin 3,565 269,977
National Presto Industries 3,245 330,146
Northrop Grumman 2,075 125,558
Textainer Group Holdings 6,265 162,577
Tyco International ++ 8,330 368,936
WW Grainger 1,610 238,876
------------
2,848,588
------------
INFORMATION TECHNOLOGY - 7.7%
Intel 9,640 215,261
International Business Machines 3,375 613,744
Jabil Circuit 14,460 264,763
Microsoft 12,980 355,652
------------
1,449,420
------------
MATERIALS - 6.5%
Eastman Chemical 4,050 391,189
EI Du Pont de Nemours 7,270 373,823
International Paper 6,760 200,772
PPG Industries 3,020 254,284
------------
1,220,068
------------
TELECOMMUNICATION SERVICES - 6.0%
AT&T 8,895 260,268
BCE (Canada) 9,920 378,646
Verizon Communications 13,900 490,531
------------
1,129,445
------------
UTILITIES - 5.1%
CMS Energy 14,540 278,296
Duke Energy 10,000 186,000
NV Energy 13,950 207,018
Portland General Electric 11,945 295,997
------------
967,311
------------
TOTAL COMMON STOCK
(Cost $16,196,174) 18,563,741
------------
--------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 0.6%
--------------------------------------------------------------------------------
Dreyfus Cash Management 121,577 121,577
------------
TOTAL REGISTERED INVESTMENT COMPANY
(Cost $121,577) 121,577
------------
TOTAL INVESTMENTS - 99.4%
(Cost $16,317,751) 18,685,318
------------
OTHER ASSETS & LIABILITIES, NET - 0.6% 109,303
------------
NET ASSETS - 100.0% $ 18,794,621
============
The accompanying notes are an integral part of the financial statements.
66 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2011
EQUITY INCOME 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,
2011 IS AS FOLLOWS:
LONG FUTURES NUMBER OF EXPIRATION COUNTER- UNREALIZED
OUTSTANDING CONTRACTS DATE PARTY DEPRECIATION**
--------------------------------------------------------------------------------
S&P 500 E-MINI 2 SEPTEMBER 2011 MCQ $ (4,693)
** THE PRIMARY RISK EXPOSURE IS THE PRICE MOVEMENT OF THE UNDERLYING BASKET
OF EQUITY SECURITIES. SEE NOTE 2 FOR ADDITIONAL DETAILS.
MCQ - MACQUARIE FUTURES USA INC., SUBSIDIARY OF MACQUARIE GROUP LTD.
S&P - STANDARD & POOR'S
A summary of the inputs used to value the Fund's net assets as of July 31, 2011
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
07/31/11 PRICE INPUTS INPUTS
------------ ------------ ------------ -----------
Assets:
Investment in Securities*** $ 18,685,318 $ 18,685,318 $ -- $ --
Liabilities:
Derivatives (1)
Equity Contracts (4,693) (4,693) -- --
------------ ------------ ------------ -----------
Total: $ 18,680,625 $ 18,680,625 $ -- $ --
============ ============ ============ ===========
*** See schedule of investments detail for industry and security type
breakouts.
(1) Investments in derivatives include futures contracts.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 67
SCHEDULE OF INVESTMENTS
JULY 31, 2011
FUNDAMENTAL EQUITY FUND
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - 95.8%+
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 8.1%
Dick's Sporting Goods * 5,795 $ 214,415
Hasbro 4,455 176,240
Las Vegas Sands * 4,835 228,115
PetSmart 4,785 205,851
Starwood Hotels & Resorts Worldwide 4,115 226,160
Walt Disney 7,240 279,609
Yum! Brands 2,790 147,368
---------------
1,477,758
---------------
CONSUMER STAPLES - 12.8%
Altria Group 10,375 272,862
Anheuser-Busch InBev NV, SP ADR 4,160 239,533
Coca-Cola 6,535 444,445
Kraft Foods, Cl A 8,880 305,294
Mead Johnson Nutrition 1,860 132,748
Philip Morris International 6,773 482,034
Procter & Gamble 7,370 453,181
---------------
2,330,097
---------------
ENERGY - 14.8%
BG Group PLC, SP ADR 2,745 325,557
EOG Resources 1,585 161,670
ExxonMobil 8,597 685,955
Occidental Petroleum 5,361 526,343
QEP Resources 6,645 291,250
Schlumberger 4,142 374,313
Suncor Energy++ 8,784 335,724
---------------
2,700,812
---------------
FINANCIALS - 5.8%
JPMorgan Chase 13,030 527,064
Wells Fargo 18,835 526,250
---------------
1,053,314
---------------
HEALTH CARE - 9.7%
DaVita * 3,015 251,873
Fresenius Medical Care, ADR 1,865 143,493
Gilead Sciences * 5,505 233,192
Johnson & Johnson 4,030 261,104
Merck 4,025 137,373
Pfizer 9,723 187,071
UnitedHealth Group 7,970 395,551
WellPoint 2,365 159,756
---------------
1,769,413
---------------
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
INDUSTRIAL - 14.7%
3M 3,625 $ 315,883
Danaher 19,998 982,102
Donaldson 5,680 314,558
Emerson Electric 2,349 115,312
General Electric 6,605 118,296
Rockwell Collins 4,615 254,240
Stericycle * 3,015 247,592
United Parcel Service, Cl B 4,755 329,141
---------------
2,677,124
---------------
INFORMATION TECHNOLOGY - 20.8%
Accenture, Cl A ++ 2,480 146,667
Analog Devices 6,070 208,808
Apple * 2,050 800,484
Autodesk * 4,970 170,968
Broadcom, Cl A * 5,960 220,937
EMC * 17,050 444,664
Google, Cl A * 896 540,906
NetApp * 5,310 252,331
Oracle 17,953 549,003
Qualcomm 5,220 285,952
Riverbed Technology * 5,885 168,488
---------------
3,789,208
---------------
MATERIALS - 7.8%
Ecolab 8,175 408,750
Praxair 7,422 769,216
Weyerhaeuser, REIT 12,481 249,495
---------------
1,427,461
---------------
UTILITIES - 1.3%
ITC Holdings 1,879 132,019
Wisconsin Energy 3,375 103,444
---------------
235,463
---------------
TOTAL COMMON STOCK
(Cost $14,960,339) 17,460,650
---------------
--------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANIES - 2.5%
--------------------------------------------------------------------------------
Dreyfus Cash Management 316,098 316,098
Financial Select Sector SPDR ETF 9,433 139,608
---------------
TOTAL REGISTERED INVESTMENT COMPANIES
(Cost $436,057) 455,706
---------------
TOTAL INVESTMENTS - 98.3%
(Cost $15,396,396) 17,916,356
---------------
OTHER ASSETS & LIABILITIES, NET - 1.7% 305,391
---------------
NET ASSETS - 100.0% $ 18,221,747
===============
The accompanying notes are an integral part of the financial statements.
68 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2011
FUNDAMENTAL EQUITY 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
ETF - EXCHANGE TRADED FUND
PLC - PUBLIC LIABILITY COMPANY
REIT - REAL ESTATE INVESTMENT TRUST
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, 2011
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
07/31/11 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Investment in Securities ** $ 17,916,356 $ 17,916,356 $ -- $ --
============ ============ ============ ============
** 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 69
SCHEDULE OF INVESTMENTS
JULY 31, 2011
GENEVA MID CAP GROWTH FUND
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - 98.8%+
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 20.6%
Chipotle Mexican Grill * 30,850 $ 10,013,293
Coach 177,570 11,463,919
Deckers Outdoor * 77,370 7,678,973
Dick's Sporting Goods * 285,620 10,567,940
Gentex 227,405 6,444,658
LKQ * 266,755 6,554,170
O'Reilly Automotive * 190,715 11,347,543
Panera Bread, Cl A * 92,740 10,693,849
Tractor Supply 172,675 11,382,736
Urban Outfitters * 195,350 6,356,689
---------------
92,503,770
---------------
CONSUMER STAPLES - 2.9%
Church & Dwight 204,080 8,232,587
JM Smucker 59,860 4,664,291
---------------
12,896,878
---------------
ENERGY - 10.2%
CARBO Ceramics 45,255 7,062,948
Concho Resources * 95,760 8,961,221
FMC Technologies * 173,870 7,928,472
Oil States International * 113,285 9,142,100
Range Resources 121,840 7,939,094
Whiting Petroleum * 85,115 4,987,739
---------------
46,021,574
---------------
FINANCIALS - 5.8%
Affiliated Managers Group * 68,825 7,180,512
East West Bancorp 290,850 5,398,176
IntercontinentalExchange * 62,210 7,670,493
Signature Bank * 100,805 5,963,624
---------------
26,212,805
---------------
HEALTH CARE - 14.7%
Cerner * 189,050 12,569,934
CR Bard 56,475 5,572,953
DENTSPLY International 128,955 4,886,105
IDEXX Laboratories * 125,135 10,378,697
Illumina * 106,355 6,641,870
ResMed * 255,510 7,739,398
SXC Health Solutions * 167,245 10,558,177
Varian Medical Systems * 124,230 7,796,675
---------------
66,143,809
---------------
INDUSTRIAL - 22.2%
AMETEK 177,635 7,549,487
CH Robinson Worldwide 98,480 7,121,089
Copart * 180,675 7,850,329
Expeditors International of Washington 202,940 9,684,297
Fastenal 326,485 10,986,220
Flowserve 83,225 8,270,901
Genesee & Wyoming, Cl A * 111,345 6,128,429
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
INDUSTRIAL - (CONTINUED)
IDEX 134,780 $ 5,590,674
IHS, Cl A * 123,455 9,097,399
Lincoln Electric Holdings 180,520 6,177,394
Roper Industries 128,915 10,523,331
Stericycle * 130,545 10,720,355
---------------
99,699,905
---------------
INFORMATION TECHNOLOGY - 20.8%
Amphenol, Cl A 184,610 9,025,583
ANSYS * 184,445 9,332,917
Citrix Systems * 134,050 9,656,962
Cognizant Technology Solutions, Cl A * 143,070 9,996,301
F5 Networks * 55,780 5,214,314
FactSet Research Systems 90,545 8,338,289
Fiserv * 94,690 5,715,488
Intuit * 213,595 9,974,887
MICROS Systems * 210,395 10,303,043
Red Hat * 119,095 5,011,518
Riverbed Technology * 137,360 3,932,617
Trimble Navigation * 196,480 6,990,758
---------------
93,492,677
---------------
MATERIALS - 1.6%
Sigma-Aldrich 108,725 7,295,448
---------------
TOTAL COMMON STOCK
(Cost $341,579,232) 444,266,866
---------------
--------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 1.4%
--------------------------------------------------------------------------------
Dreyfus Cash Management 6,161,591 6,161,591
---------------
TOTAL REGISTERED INVESTMENT COMPANY
(Cost $6,161,591) 6,161,591
---------------
TOTAL INVESTMENTS - 100.2%
(Cost $347,740,823) 450,428,457
---------------
OTHER ASSETS & LIABILITIES, NET - (0.2)% (697,961)
---------------
NET ASSETS - 100.0% $ 449,730,496
===============
--------------------------------------------------------------------------------
* 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, 2011
GENEVA MID CAP GROWTH FUND (CONCLUDED)
A summary of the inputs used to value the Fund's net assets as of July 31, 2011
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
07/31/11 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Investment in Securities** $450,428,457 $450,428,457 $ -- $ --
============ ============ ============ ============
** 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, 2011
GENEVA SMALL CAP GROWTH FUND
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - 97.9%+
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 15.3%
BJ's Restaurants * 3,640 $ 168,787
Dick's Sporting Goods * 6,250 231,250
Hibbett Sports * 14,115 553,873
JOS A Bank Clothiers * 6,940 356,091
LKQ * 13,920 342,014
Monro Muffler Brake 17,282 618,004
Panera Bread, Cl A * 3,265 376,487
Rentrak * 7,635 126,283
Ulta Salon, Cosmetics & Fragrance * 8,930 562,858
WMS Industries * 10,130 279,284
---------------
3,614,931
---------------
CONSUMER STAPLES - 4.1%
Diamond Foods 8,150 583,458
Treehouse Foods * 7,345 379,296
---------------
962,754
---------------
ENERGY - 8.7%
Brigham Exploration * 19,480 619,464
Dril-Quip * 6,395 450,911
Rosetta Resources * 9,965 515,888
SM Energy 6,335 477,342
---------------
2,063,605
---------------
FINANCIALS - 2.7%
Affiliated Managers Group * 2,465 257,173
Texas Capital Bancshares * 13,845 378,384
---------------
635,557
---------------
HEALTH CARE - 20.3%
Haemonetics * 6,050 396,275
HMS Holdings * 7,200 544,320
IDEXX Laboratories * 4,225 350,422
Masimo 12,800 355,584
Medidata Solutions * 13,895 283,875
MWI Veterinary Supply * 6,490 577,999
Neogen * 11,675 482,878
PAREXEL International * 15,795 324,271
Quality Systems 5,090 465,022
SXC Health Solutions * 10,560 666,653
Techne 4,610 349,392
---------------
4,796,691
---------------
INDUSTRIAL - 18.0%
Acuity Brands 9,360 455,738
Aerovironment * 6,825 196,765
Allegiant Travel * 6,865 295,401
CIRCOR International 9,820 424,715
Donaldson 6,815 377,415
Genesee & Wyoming, Cl A * 11,040 607,642
Healthcare Services Group 21,035 330,039
Kaydon 10,620 378,603
Marten Transport 16,170 332,617
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
INDUSTRIAL - (CONTINUED)
Middleby * 5,330 $ 450,278
RBC Bearings * 10,415 395,458
---------------
4,244,671
---------------
INFORMATION TECHNOLOGY - 26.1%
Acme Packet * 8,015 472,244
Blackboard * 9,315 405,761
Bottomline Technologies * 19,585 456,135
Concur Technologies * 8,640 392,602
Constant Contact * 16,170 306,098
DTS * 10,080 349,978
FactSet Research Systems 3,935 362,374
Interactive Intelligence Group * 16,435 624,694
Liquidity Services * 12,700 307,086
LogMeIn * 8,890 316,040
OpenTable * 4,195 297,258
Pegasystems 9,170 370,101
Riverbed Technology * 13,060 373,908
Tyler Technologies * 19,490 496,800
Ultimate Software Group * 11,475 624,011
---------------
6,155,090
---------------
MATERIALS - 2.7%
Balchem 14,747 645,476
---------------
TOTAL COMMON STOCK
(Cost $20,022,434) 23,118,775
---------------
--------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 1.9%
--------------------------------------------------------------------------------
Dreyfus Cash Management 435,455 435,455
---------------
TOTAL REGISTERED INVESTMENT COMPANY
(Cost $435,455) 435,455
---------------
TOTAL INVESTMENTS - 99.8%
(Cost $20,457,889) 23,554,230
---------------
OTHER ASSETS & LIABILITIES, NET - 0.2% 56,817
---------------
NET ASSETS - 100.0% $ 23,611,047
===============
--------------------------------------------------------------------------------
* 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.
72 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2011
GENEVA SMALL CAP GROWTH FUND (CONCLUDED)
A summary of the inputs used to value the Fund's net assets as of July 31, 2011
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
07/31/11 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Investments in Securities ** $ 23,554,230 $ 23,554,230 $ -- $ --
============ ============ ============ ============
** 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 73
SCHEDULE OF INVESTMENTS
JULY 31, 2011
INTERNATIONAL OPPORTUNITIES FUND
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - 97.9%
--------------------------------------------------------------------------------
AUSTRALIA - 0.8%
BHP Billiton 20,000 $ 910,079
Challenger Financial Services Group 200,000 1,074,430
------------
1,984,509
------------
AUSTRIA - 1.9%
Andritz 10,000 972,641
OMV 25,000 999,008
Raiffeisen Bank International (A) 20,000 1,003,966
Vienna Insurance Group 15,000 798,560
Voestalpine 20,000 1,038,308
------------
4,812,483
------------
BRAZIL - 1.1%
Banco do Brasil 40,000 675,501
Companhia de Bebidas das Americas
(AmBev), ADR (A) 15,000 450,300
Petroleo Brasileiro, ADR 20,000 679,400
Vale, SP ADR (A) 30,000 973,200
------------
2,778,401
------------
CANADA - 2.2%
AGF Management, Cl B 35,000 636,663
Barrick Gold 17,000 810,456
Baytex Energy 15,000 837,249
Magna International 10,000 487,728
Royal Bank of Canada 12,000 645,560
SXC Health Solutions * 16,000 1,012,633
Talisman Energy 30,000 546,339
Teck Resources, Cl B 10,000 495,473
------------
5,472,101
------------
CHINA - 0.9%
Agile Property Holdings 500,000 808,340
China Construction Bank, Cl H 800,000 644,619
Tingyi (Cayman Islands) Holding 250,000 776,263
------------
2,229,222
------------
FRANCE - 5.9%
Arkema 12,000 1,175,101
AXA 44,311 834,723
BNP Paribas 12,000 783,947
Cap Gemini 12,000 592,723
Casino Guichard-Perrachon 12,000 1,096,301
Christian Dior 9,000 1,441,934
L'Oreal 5,000 603,572
Natixis 200,000 913,297
Sanofi 20,000 1,560,191
Schneider Electric 8,000 1,162,744
Total 30,000 1,628,588
Valeo 12,000 739,201
Veolia Environnement 30,000 681,309
Vinci 18,000 1,048,021
Vivendi 25,000 600,087
------------
14,861,739
------------
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)
--------------------------------------------------------------------------------
GERMANY - 13.6%
Adidas 15,000 $ 1,116,260
Aixtron (A) 20,000 539,702
Allianz 18,000 2,355,202
BASF 30,000 2,725,234
Bayer 40,000 3,214,644
Bayerische Motoren Werke 20,000 2,006,494
Celesio 24,000 462,626
Daimler 40,000 2,911,744
Deutsche Bank 30,000 1,660,487
Deutsche Lufthansa 40,000 807,541
Deutsche Post 35,000 619,593
Deutsche Telekom 50,000 778,803
E.ON 55,000 1,518,952
Hannover Rueckversicherung 12,000 624,795
Henkel AG & Co. KGaA 10,000 675,633
Infineon Technologies 180,000 1,812,311
K+S 15,000 1,202,043
Lanxess 20,000 1,613,932
MAN 8,000 952,266
Metro 10,000 553,711
Muenchener Rueckversicherungs-
Gesellschaft 7,000 1,036,511
Rheinmetall 8,000 671,437
RWE 14,000 735,164
Siemens 27,000 3,467,625
------------
34,062,710
------------
HONG KONG - 7.9%
ASM Pacific Technology 50,000 549,158
BOC Hong Kong Holdings 500,000 1,494,787
Cathay Pacific Airways 500,000 1,158,621
Cheung Kong Holdings 200,000 3,056,295
CNOOC 400,000 894,050
Giordano International 1,500,000 1,143,224
Great Eagle Holdings 400,000 1,319,006
Johnson Electric Holdings 1,200,000 706,720
Kerry Properties 350,000 1,697,514
New World Development 800,000 1,178,380
Newton Resources * 4,762 1,088
Orient Overseas International 90,000 512,141
Power Assets Holdings 200,000 1,655,172
Singamas Container Holdings 1,500,000 519,647
Sino Land 900,000 1,526,608
SJM Holdings 700,000 1,762,181
Swire Pacific, Cl A 50,000 704,411
------------
19,879,003
------------
HUNGARY - 1.0%
MOL Hungarian Oil and Gas * 9,000 968,678
OTP Bank 50,000 1,451,952
------------
2,420,630
------------
The accompanying notes are an integral part of the financial statements.
74 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2011
INTERNATIONAL OPPORTUNITIES FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)
--------------------------------------------------------------------------------
IRELAND - 0.6%
Experian 70,000 $ 922,081
Shire 20,000 695,644
------------
1,617,725
------------
ITALY - 0.9%
Azimut Holding SpA 80,000 655,229
Enel SpA 120,000 693,163
Pirelli SpA 80,000 832,255
------------
2,180,647
------------
JAPAN - 17.3%
Aisin Seiki 20,000 772,618
Ajinomoto 60,000 743,521
Asahi Glass 100,000 1,159,966
Asahi Kasei 120,000 849,516
Canon 20,000 974,216
Daito Trust Construction 10,000 963,824
Daiwa House Industry 70,000 941,092
Eisai (A) 27,000 1,097,746
Fuji Heavy Industries 100,000 805,352
FUJI OIL 50,000 763,785
Fujitsu 120,000 707,670
Hitachi 300,000 1,866,597
Idemitsu Kosan 6,500 754,822
Isuzu Motors 150,000 748,198
Itochu 100,000 1,156,069
Japan Tobacco 150 681,951
JGC 30,000 937,196
K's Holdings 20,000 936,546
Kao 20,000 566,604
KDDI 100 743,002
Komatsu 20,000 625,317
KURARAY 50,000 757,290
Makino Milling Machine 65,000 641,683
Miraca Holdings 12,000 504,254
Mitsubishi 35,000 937,910
Mitsui 45,000 850,490
Mizuho Financial Group 600,000 989,803
Nippon Telegraph and Telephone 12,000 592,323
Nissan Motor 100,000 1,067,740
Nitto Denko 13,000 628,174
Nomura Research Institute 40,000 954,991
ORIX 6,000 649,997
OTSUKA 10,000 665,065
Resona Holdings 200,000 992,401
SANKYU 240,000 1,159,706
Sega Sammy Holdings 40,000 860,947
Sekisui Chemical 70,000 648,308
Softbank 20,000 781,971
Sumitomo 60,000 847,957
Sumitomo Metal Mining 35,000 621,485
Sumitomo Mitsui Financial Group 40,000 1,264,662
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)
--------------------------------------------------------------------------------
JAPAN - (CONTINUED)
Sumitomo Mitsui Trust Holdings 279,000 $ 1,029,239
Takeda Pharmaceutical 20,000 954,731
TOKIO Marine Holdings 25,000 738,780
Tokyo Gas 150,000 715,074
Toshiba 200,000 1,039,163
Toyota Motor 22,000 901,604
YAMADA DENKI 13,000 1,038,514
Yamaha Motor * 40,000 775,736
Zeon 100,000 1,088,524
------------
43,494,130
------------
MEXICO - 2.4%
Alfa, Ser A 55,000 805,978
America Movil, ADR, Ser L 70,000 1,806,000
Coca-Cola Femsa, SP ADR 8,000 770,400
Corporacion GEO, Ser B * 350,000 701,056
Grupo Mexico, Ser B 300,000 1,106,728
Kimberly-Clark de Mexico, Ser A 125,000 777,436
------------
5,967,598
------------
NETHERLANDS - 0.7%
Royal Dutch Shell, Cl B 50,000 1,838,006
------------
NEW ZEALAND - 1.5%
Auckland International Airport 400,000 794,523
Fletcher Building 150,000 1,071,815
Sky City Entertainment Group 240,000 776,242
Telecom 530,000 1,222,765
------------
3,865,345
------------
NORWAY - 4.8%
DnB NOR 110,000 1,605,780
Fred Olsen Energy 25,000 969,485
Statoil 150,000 3,708,003
Storebrand 75,000 625,987
Telenor 120,000 2,010,289
TGS Nopec Geophysical 60,000 1,759,560
Yara International 25,000 1,432,870
------------
12,111,974
------------
PHILIPPINES - 1.5%
Aboitiz Power 1,000,000 771,239
DMCI Holdings 700,000 747,508
Metropolitan Bank & Trust 600,000 1,095,634
Philippine Long Distance Telephone 20,000 1,139,060
------------
3,753,441
------------
POLAND - 1.4%
Eurocash 50,000 488,787
KGHM Polska Miedz 10,000 686,098
PGE Grupa Energetyczna 70,000 583,920
Polski Koncern Naftowy Orlen * 40,000 672,513
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 75
SCHEDULE OF INVESTMENTS
JULY 31, 2011
INTERNATIONAL OPPORTUNITIES FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)
--------------------------------------------------------------------------------
POLAND - (CONTINUED)
Powszechna Kasa Oszczednosci
Bank Polski 75,000 $ 1,108,396
------------
3,539,714
------------
RUSSIA - 1.2%
Gazprom, SP ADR * 75,000 1,099,500
Lukoil, SP ADR 15,000 1,007,250
Mechel, SP ADR (A) 35,000 870,800
------------
2,977,550
------------
SOUTH KOREA - 5.3%
Honam Petrochemical 4,000 1,639,002
Hynix Semiconductor 50,000 1,150,052
Hyundai Heavy Industries 3,000 1,160,960
Hyundai Motor 5,000 1,114,484
Kia Motors 20,000 1,468,273
Korea Zinc 2,000 829,935
POSCO 1,500 660,865
Samsung Electronics 2,500 2,001,328
Samsung Engineering 6,000 1,479,655
Shinhan Financial Group 40,000 1,915,963
------------
13,420,517
------------
SPAIN - 0.9%
Banco Santander (A) 60,000 631,520
Gas Natural SDG 30,000 605,009
Mapfre (A) 133,333 474,944
Telefonica 20,000 446,877
------------
2,158,350
------------
SWITZERLAND - 4.4%
ABB * 60,000 1,446,922
Clariant * 50,000 790,293
Credit Suisse Group * 20,000 723,207
Nestle 45,000 2,873,070
Novartis 35,000 2,156,788
Roche Holding 7,000 1,259,386
Swiss Life Holding * 5,000 745,823
UBS * 60,000 999,428
------------
10,994,917
------------
TURKEY - 2.5%
Akbank 200,000 873,709
Arcelik 150,000 685,471
Emlak Konut Gayrimenkul
Yatirim Ortakligi, REIT 350,000 534,525
Tupras Turkiye Petrol Rafinerileri 30,000 729,867
Turk Hava Yollari Anonim Ortakligi * 274,285 511,438
Turk Telekomunikasyon 200,000 852,399
Turkiye Halk Bankasi 120,000 841,744
Turkiye Is Bankasi, Cl C 450,000 1,291,917
------------
6,321,070
------------
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)
--------------------------------------------------------------------------------
UNITED KINGDOM - 17.2%
Admiral Group 30,000 $ 762,779
AMEC 40,000 692,032
Anglo American 20,000 952,037
AstraZeneca 38,085 1,858,552
Barclays 300,000 1,098,125
BHP Billiton 35,000 1,305,850
BP 350,000 2,648,468
British American Tobacco 47,170 2,183,825
Britvic 120,000 691,179
BT Group 400,000 1,319,720
Burberry Group 30,000 735,695
Compass Group 110,000 1,037,310
Croda International 60,000 1,877,154
Drax Group 100,000 878,172
GlaxoSmithKline 100,000 2,238,928
HSBC Holdings 168,000 1,639,408
IMI 40,000 689,406
Imperial Tobacco Group 30,000 1,042,480
Inmarsat 80,000 709,103
Investec 100,000 789,042
John Wood Group 77,777 853,451
Kazakhmys 35,000 774,433
Old Mutual 600,000 1,251,764
Petrofac 90,000 2,069,696
Reckitt Benckiser Group 18,000 1,021,404
Rentokil Initial * 600,000 904,107
Rio Tinto 25,000 1,764,551
Rolls-Royce Holdings * 70,000 749,729
SABMiller 25,000 937,674
Sage Group 150,000 675,618
Standard Chartered 70,000 1,790,158
Tesco 150,000 944,117
Unilever 60,000 1,918,519
Vodafone Group 300,000 846,985
WH Smith 120,000 999,639
WPP Group 60,000 683,989
------------
43,335,099
------------
TOTAL COMMON STOCK
(Cost $206,232,217)
246,076,881
------------
--------------------------------------------------------------------------------
PREFERRED STOCK - 0.4%
--------------------------------------------------------------------------------
GERMANY - 0.4%
Volkswagen 5,000 1,001,882
------------
TOTAL PREFERRED STOCK
(Cost $865,585)
1,001,882
------------
The accompanying notes are an integral part of the financial statements.
76 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2011
INTERNATIONAL OPPORTUNITIES FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Shares/Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANIES - 3.0%
--------------------------------------------------------------------------------
Dreyfus Cash Management 4,930,261 $ 4,930,261
Invesco AIM Government & Agency
Portfolio (B) 1,393,349 1,393,349
RBC U.S. Government Money
Market (B) 1,285,850 1,285,850
------------
TOTAL REGISTERED INVESTMENT COMPANIES
(Cost $7,609,460) 7,609,460
------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 1.2%
--------------------------------------------------------------------------------
BNP Paribas (B)
0.210%, dated 07/29/11,
matures on 08/01/11,
repurchase price $1,000,018
(collateralized by a corporate
obligation, par value $1,031,153,
3.750%, 01/15/16, total market
value $1,050,001) $ 1,000,000 1,000,000
HSBC Securities (B)
0.260%, dated 07/29/11,
matures on 08/01/11,
repurchase price $1,000,022
(collateralized by a corporate
obligation, par value $1,045,000,
1.375%, 05/20/14, total market
value $1,055,017) 1,000,000 1,000,000
JP Morgan Chase (B)
0.220%, dated 07/29/11,
matures on 08/01/11,
repurchase price $1,000,018
(collateralized by various
corporate obligations,
ranging in par value from
$455,000 - $520,000,
3.625% - 5.500%,
09/17/12 - 03/15/16, total
market value $1,052,969) 1,000,000 1,000,000
------------
TOTAL REPURCHASE AGREEMENTS
(Cost $3,000,000)
3,000,000
------------
TOTAL INVESTMENTS - 102.5%
(Cost $217,707,262)
257,688,223
------------
OTHER ASSETS & LIABILITIES, NET - (2.5)%
(6,343,428)
------------
NET ASSETS - 100.0% $251,344,795
============
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
* NON-INCOME PRODUCING SECURITY.
(A) THIS SECURITY OR PARTIAL POSITION OF THIS SECURITY IS ON LOAN AT JULY 31,
2011. THE TOTAL VALUE OF SECURITIES ON LOAN AT JULY 31, 2011 IS
$5,415,122.
(B) THIS SECURITY WAS PURCHASED WITH CASH COLLATERAL RECEIVED FROM SECURITIES
LENDING.
ADR - AMERICAN DEPOSITARY RECEIPT
CL - CLASS
REIT - REAL ESTATE INVESTMENT TRUST
SER - SERIES
SP ADR - SPONSORED AMERICAN DEPOSITARY RECEIPT
FOREIGN CURRENCY CONTRACTS OUTSTANDING AS OF JULY 31, 2011 WERE AS FOLLOWS:
PRINCIPAL
CONTRACTS AMOUNT NET
TO BUY OR COVERED BY COUNTER- UNREALIZED
TO SELL CURRENCY CONTRACTS EXPIRATION PARTY DEPRECIATION**
--------------------------------------------------------------------------------
Buy MXN 3,794,542 08/11 BBH $ (2,288)
==============
** The primary risk exposure is foreign exchange contracts.
BBH - BROWN BROTHERS HARRIMAN & CO.
MXN - MEXICAN PESO
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 77
SCHEDULE OF INVESTMENTS
JULY 31, 2011
INTERNATIONAL OPPORTUNITIES FUND (CONCLUDED)
A summary of the inputs used to value the Fund's net assets as of July 31, 2011
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
07/31/11 PRICE INPUTS INPUTS
------------- ------------- ----------- ------------
Assets:
Common Stock *** $ 246,076,881 $ 246,076,881 $ -- $ --
Preferred Stock 1,001,882 1,001,882 -- --
Registered Investment Companies 7,609,460 7,609,460 -- --
Repurchase Agreements 3,000,000 -- 3,000,000 --
Liabilities:
Derivatives (1)
Foreign Exchange Contracts (2,288) -- (2,288) --
------------- ------------- ----------- ------------
Total: $ 257,685,935 $ 254,688,223 $ 2,997,712 $ --
============= ============= =========== ============
*** 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.
78 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2011
LARGE CAP GROWTH FUND
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - 98.1%+
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 10.8%
Dick's Sporting Goods * 28,365 $ 1,049,505
Hasbro 19,010 752,036
Las Vegas Sands * 33,057 1,559,629
PetSmart 20,805 895,031
Sally Beauty Holdings * 64,240 1,104,928
Starwood Hotels & Resorts Worldwide 25,208 1,385,432
Walt Disney 21,395 826,275
Yum! Brands 17,240 910,617
------------
8,483,453
------------
CONSUMER STAPLES - 10.4%
Anheuser-Busch InBev NV, SP ADR 22,327 1,285,589
Coca-Cola 39,382 2,678,370
Mead Johnson Nutrition 8,380 598,081
Philip Morris International 40,389 2,874,485
Procter & Gamble 12,450 765,551
------------
8,202,076
------------
ENERGY - 11.2%
BG Group PLC, SP ADR 12,632 1,498,155
EOG Resources 5,560 567,120
ExxonMobil 19,955 1,592,209
Occidental Petroleum 19,770 1,941,019
QEP Resources 14,913 653,637
Schlumberger 27,872 2,518,793
------------
8,770,933
------------
FINANCIALS - 1.0%
JPMorgan Chase 20,206 817,333
------------
HEALTH CARE - 9.2%
DaVita * 13,455 1,124,031
Fresenius Medical Care, ADR 8,280 637,063
Gilead Sciences * 23,335 988,471
Johnson & Johnson 16,670 1,080,049
Merck 16,855 575,261
Mylan * 43,625 993,778
UnitedHealth Group 36,235 1,798,343
------------
7,196,996
------------
INDUSTRIAL - 15.6%
3M 20,096 1,751,165
Danaher 51,726 2,540,264
Donaldson 28,824 1,596,273
Emerson Electric 10,722 526,343
Expeditors International of
Washington 38,851 1,853,970
Rockwell Collins 21,369 1,177,218
Stericycle * 17,519 1,438,660
United Parcel Service, Cl B 20,045 1,387,515
------------
12,271,408
------------
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
INFORMATION TECHNOLOGY - 30.7%
Accenture, Cl A ++ 12,265 $ 725,352
Analog Devices 29,674 1,020,786
Apple * 14,257 5,567,073
ARM Holdings PLC, SP ADR 57,250 1,648,228
Autodesk * 23,244 799,594
Broadcom, Cl A * 24,755 917,668
EMC * 75,408 1,966,641
Google, Cl A * 6,446 3,891,386
NetApp * 27,750 1,318,680
Oracle 100,081 3,060,477
Qualcomm 36,897 2,021,218
Riverbed Technology * 26,560 760,413
Taleo * 12,865 425,832
------------
24,123,348
------------
MATERIALS - 7.8%
Ecolab 42,765 2,138,250
Praxair 28,041 2,906,168
Weyerhaeuser, REIT 53,665 1,072,762
------------
6,117,180
------------
UTILITIES - 1.4%
ITC Holdings 8,942 628,264
Wisconsin Energy 16,134 494,506
------------
1,122,770
------------
TOTAL COMMON STOCK
(Cost $59,348,162) 77,105,497
------------
--------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 1.0%
--------------------------------------------------------------------------------
Dreyfus Cash Management 741,952 741,952
------------
TOTAL REGISTERED INVESTMENT COMPANY
(Cost $741,952) 741,952
------------
TOTAL INVESTMENTS - 99.1%
(Cost $60,090,114) 77,847,449
------------
OTHER ASSETS & LIABILITIES, NET - 0.9% 722,602
------------
NET ASSETS - 100.0% $ 78,570,051
============
--------------------------------------------------------------------------------
* 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
REIT - REAL ESTATE INVESTMENT TRUST
SP ADR - SPONSORED AMERICAN DEPOSITARY RECEIPT
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 79
SCHEDULE OF INVESTMENTS
JULY 31, 2011
LARGE CAP GROWTH FUND (CONCLUDED)
A summary of the inputs used to value the Fund's net assets as of July 31, 2011
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
07/31/11 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Investments in Securities ** $ 77,847,449 $ 77,847,449 $ -- $ --
============ ============ ============ ============
** See schedule of investments detail for industry and security type breakouts.
The accompanying notes are an integral part of the financial statements.
80 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2011
LARGE CAP VALUE FUND
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - 99.7%+
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 8.2%
Autoliv ++ 13,000 $ 860,080
Cooper Tire & Rubber 57,900 976,194
H&R Block 47,850 715,836
Office Depot * 193,000 729,540
Pulte Group * 85,900 590,133
Time Warner Cable 24,900 1,825,419
Viacom, Cl B 26,250 1,271,025
Visteon * 15,000 940,500
------------
7,908,727
------------
CONSUMER STAPLES - 11.9%
Altria Group 65,400 1,720,020
Archer-Daniels-Midland 23,750 721,525
Carrefour SA (France) 47,800 1,414,892
CVS Caremark 62,450 2,270,057
Distribuidora Internacional de
Alimentacion SA (Spain) * 50,000 211,943
Heineken, ADR 65,100 1,928,913
Kraft Foods, Cl A 61,000 2,097,180
Unilever NV ++ 32,200 1,045,856
------------
11,410,386
------------
ENERGY - 14.0%
Apache 21,400 2,647,608
BP PLC, SP ADR 65,400 2,971,776
Chevron 34,150 3,552,283
CONSOL Energy 28,800 1,543,680
Ensco PLC, SP ADR 14,439 768,877
Williams 63,450 2,011,365
------------
13,495,589
------------
FINANCIALS - 22.1%
ACE ++ 36,100 2,417,978
Bank of America 328,000 3,184,880
Berkshire Hathaway, Cl B * 41,700 3,092,889
CIT Group * 53,000 2,106,220
Citigroup 79,500 3,048,030
JPMorgan Chase 109,300 4,421,185
MetLife 57,100 2,353,091
MGIC Investment * 159,000 632,820
------------
21,257,093
------------
HEALTH CARE - 10.8%
Merck 83,950 2,865,213
Pfizer 210,350 4,047,134
Teva Pharmaceutical Industries,
SP ADR 26,850 1,252,284
WellPoint 32,200 2,175,110
------------
10,339,741
------------
INDUSTRIAL - 11.4%
Avis Budget Group * 47,850 723,013
Harsco 32,200 882,602
--------------------------------------------------------------------------------
Description Shares/Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
INDUSTRIAL - (CONTINUED)
Honeywell International 41,500 $ 2,203,650
Jardine Matheson Holdings, ADR 24,400 1,390,800
Northrop Grumman 19,150 1,158,766
Schindler Holding AG, COP
(Switzerland) 11,700 1,381,018
Siemens AG, SP ADR 16,600 2,113,014
Tyco International ++ 25,850 1,144,897
------------
10,997,760
------------
INFORMATION TECHNOLOGY - 12.2%
CA 68,350 1,524,205
Hewlett-Packard 52,850 1,858,206
Hitachi, ADR 20,950 1,296,177
Microsoft 125,000 3,425,000
Texas Instruments 85,400 2,540,650
Western Union 54,250 1,052,993
------------
11,697,231
------------
MATERIALS - 4.6%
Anglo American PLC, ADR 59,400 1,404,216
Crown Holdings * 29,300 1,125,413
Vulcan Materials 26,000 891,540
Weyerhaeuser, REIT 48,200 963,518
------------
4,384,687
------------
TELECOMMUNICATION SERVICES - 3.3%
Sprint Nextel * 248,450 1,050,944
Vodafone Group PLC, SP ADR 75,250 2,114,525
------------
3,165,469
------------
UTILITIES - 1.2%
Questar 63,250 1,165,697
------------
TOTAL COMMON STOCK
(Cost $94,814,071) 95,822,380
------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 0.2%
--------------------------------------------------------------------------------
Credit Suisse Securities (USA)
0.140%, dated 07/29/11,
matures on 08/01/11,
repurchase price $223,206
(collateralized by a U.S.
Treasury Note obligation,
par value $220,000, 2.750%,
10/31/13, total market value
$233,167) $ 223,203 223,203
------------
TOTAL REPURCHASE AGREEMENT
(Cost $223,203) 223,203
------------
TOTAL INVESTMENTS - 99.9%
(Cost $95,037,274) 96,045,583
------------
OTHER ASSETS & LIABILITIES, NET - 0.1% 55,135
------------
NET ASSETS - 100.0% $ 96,100,718
============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 81
SCHEDULE OF INVESTMENTS
JULY 31, 2011
LARGE CAP VALUE 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
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, 2011
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
07/31/11 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Common Stock** $ 95,822,380 $ 95,822,380 $ -- $ --
Repurchase Agreement 223,203 -- 223,203 --
------------ ------------ ------------ ------------
Total: $ 96,045,583 $ 95,822,380 $ 223,203 $ --
============ ============ ============ ============
** See schedule of investments detail for industry type breakout.
The accompanying notes are an integral part of the financial statements.
82 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2011
NYSE ARCA TECH 100 INDEX FUND
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - 99.4%+
--------------------------------------------------------------------------------
HEALTH CARE - 18.2%
Agilent Technologies * 50,740 $ 2,139,199
Amgen 50,740 2,775,478
AstraZeneca PLC, SP ADR 50,740 2,461,397
Biogen Idec * 50,740 5,168,884
Boston Scientific * 50,740 363,299
Bristol-Myers Squibb 50,740 1,454,209
CONMED * 50,740 1,319,240
Gilead Sciences * 50,740 2,149,346
Kinetic Concepts * 50,740 3,396,536
Life Technologies * 50,740 2,284,822
Medtronic 50,740 1,829,177
Novartis AG, ADR 50,740 3,105,288
St. Jude Medical 50,740 2,359,410
Thermo Fisher Scientific * 50,740 3,048,967
Valeant Pharmaceuticals
International * ++ 50,740 2,792,222
ViroPharma * 50,740 917,379
---------------
37,564,853
---------------
INDUSTRIAL - 5.3%
Goodrich 50,740 4,827,404
Lockheed Martin 50,740 3,842,540
Raytheon 50,740 2,269,600
---------------
10,939,544
---------------
INFORMATION TECHNOLOGY - 75.2%
Adobe Systems * 50,740 1,406,513
Altera 50,740 2,074,251
Amdocs * ++ 50,740 1,599,832
Amphenol, Cl A 50,740 2,480,679
Analog Devices 50,740 1,745,456
Apple * 50,740 19,812,955
Applied Materials 50,740 625,117
Arris Group * 50,740 608,880
Autodesk * 50,740 1,745,456
Automatic Data Processing 50,740 2,612,603
BMC Software * 50,740 2,192,983
Broadcom, Cl A * 50,740 1,880,932
CA 50,740 1,131,502
Check Point Software Technologies * ++ 50,740 2,925,161
Ciena * 50,740 784,440
Cisco Systems 50,740 810,318
Citrix Systems * 50,740 3,655,310
Computer Sciences 50,740 1,790,107
Compuware * 50,740 490,148
Comtech Telecommunications 50,740 1,367,443
Corning 50,740 807,274
Cypress Semiconductor * 50,740 1,044,229
Dell * 50,740 824,018
Digital River * 50,740 1,293,870
DST Systems 50,740 2,597,381
eBay * 50,740 1,661,735
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
INFORMATION TECHNOLOGY - (CONTINUED)
EMC * 50,740 $ 1,323,299
Emulex * 50,740 428,753
F5 Networks * 50,740 4,743,175
Harmonic * 50,740 275,518
Harris 50,740 2,023,004
Hewlett-Packard 50,740 1,784,018
Intel 50,740 1,133,024
InterDigital 50,740 3,463,005
International Business Machines 50,740 9,227,069
Intuit * 50,740 2,369,558
Ixia * 50,740 507,400
j2 Global Communications * 50,740 1,356,788
JDS Uniphase * 50,740 667,231
Juniper Networks * 50,740 1,186,809
KLA-Tencor 50,740 2,020,467
Lam Research * 50,740 2,074,251
Linear Technology 50,740 1,486,682
LSI * 50,740 373,446
MEMC Electronic Materials * 50,740 376,491
Microsoft 50,740 1,390,276
Motorola Solutions * 50,739 2,277,674
NetApp * 50,740 2,411,165
Nokia, SP ADR 50,740 294,292
Novellus Systems * 50,740 1,574,970
NVIDIA * 50,740 701,734
Open Text * ++ 50,740 3,427,994
Oracle 50,740 1,551,629
Parametric Technology * 50,740 1,054,885
Polycom * 50,740 1,371,502
Progress Software * 50,740 1,222,834
QLogic * 50,740 769,726
QUALCOMM 50,740 2,779,537
RealNetworks * 50,740 171,501
Red Hat * 50,740 2,135,139
Salesforce.com * 50,740 7,342,585
SanDisk * 50,740 2,157,972
SAP, SP ADR 50,740 3,166,683
Seagate Technology ++ 50,740 704,779
Standard Microsystems * 50,740 1,200,508
Symantec * 50,740 967,104
Synopsys * 50,740 1,216,238
Tellabs 50,740 210,064
Teradata * 50,740 2,788,670
Teradyne * 50,740 684,483
Tessera Technologies * 50,740 797,125
Texas Instruments 50,740 1,509,515
VASCO Data Security International * 50,740 491,163
VeriSign * 50,740 1,583,595
VMware, Cl A * 50,740 5,091,252
Websense * 50,740 1,150,783
Western Digital * 50,740 1,748,500
Xerox Corp 50,740 473,404
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 83
SCHEDULE OF INVESTMENTS
JULY 31, 2011
NYSE ARCA TECH 100 INDEX FUND (CONCLUDED)
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
INFORMATION TECHNOLOGY - (CONTINUED)
Xilinx 50,740 $ 1,628,754
Yahoo! * 50,740 664,694
---------------
155,501,310
---------------
TELECOMMUNICATION SERVICES - 0.7%
Telephone and Data Systems 50,740 1,438,986
---------------
TOTAL COMMON STOCK
(Cost $130,431,896) 205,444,693
---------------
TOTAL INVESTMENTS - 99.4%
(Cost $130,431,896) 205,444,693
---------------
OTHER ASSETS & LIABILITIES, NET - 0.6% 1,326,011
---------------
NET ASSETS - 100.0% $ 206,770,704
===============
--------------------------------------------------------------------------------
* 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
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FUTURES - A SUMMARY OF THE OPEN FUTURES CONTRACTS HELD BY THE FUND AT JULY 31,
2011 IS AS FOLLOWS:
LONG FUTURES NUMBER OF EXPIRATION COUNTER- UNREALIZED
OUTSTANDING CONTRACTS DATE PARTY DEPRECIATION**
--------------------------------------------------------------------------------
NASDAQ 100 E-MINI 35 SEPTEMBER 2011 MCQ $(25,355)
** THE PRIMARY RISK EXPOSURE IS THE PRICE MOVEMENT OF THE UNDERLYING BASKET
OF EQUITY SECURITIES. SEE NOTE 2 FOR ADDITIONAL DETAILS.
MCQ - MACQUARIE FUTURES USA INC., SUBSIDIARY OF MACQUARIE GROUP LTD.
A summary of the inputs used to value the Fund's net assets as of July 31, 2011
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
07/31/11 PRICE INPUTS INPUTS
------------- ------------- ----------- ------------
Assets:
Investments in Securities*** $ 205,444,693 $ 205,444,693 $ -- $ --
Liabilities:
Derivatives (1)
Equity Contracts (25,355) (25,355) -- --
------------- ------------- ----------- ------------
Total: $ 205,419,338 $ 205,419,338 $ -- $ --
============= ============= =========== ============
*** See schedule of investments detail for industry and security type
breakouts.
(1) Investments in derivatives include open futures contracts.
The accompanying notes are an integral part of the financial statements.
84 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2011
SMALL CAP ADVANTAGE FUND
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - 97.4%+
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 12.4%
AFC Enterprises * 25,000 $ 386,250
Ameristar Casinos 30,000 666,000
Bebe Stores 43,000 318,630
Biglari Holdings * 200 73,634
Body Central * 3,300 70,917
Columbia Sportswear 7,900 453,460
Dillard's, Cl A 6,000 337,560
Harte-Hanks 14,400 117,648
HOT Topic 18,300 136,701
Movado Group 8,400 135,912
Red Robin Gourmet Burgers * 4,100 141,122
Select Comfort * 10,500 176,610
Smith & Wesson Holding * 18,500 62,160
Sonic * 15,900 170,130
Sotheby's 1,600 67,760
Stein Mart 14,300 135,850
---------------
3,450,344
---------------
CONSUMER STAPLES - 2.9%
Casey's General Stores 13,000 585,000
Imperial Sugar 4,300 99,244
Revlon, Cl A * 4,800 80,832
USANA Health Sciences * 2,100 57,435
---------------
822,511
---------------
ENERGY - 7.7%
Alon USA Energy 9,800 119,168
Basic Energy Services * 4,300 139,277
Complete Production Services * 3,400 132,192
Goodrich Petroleum * 21,000 416,430
Helix Energy Solutions Group * 16,800 328,944
Hercules Offshore * 10,500 49,350
ION Geophysical * 16,800 170,352
OYO Geospace * 2,700 273,861
Patriot Coal * 3,100 58,621
Stone Energy * 4,600 149,316
Western Refining * 15,600 318,708
---------------
2,156,219
---------------
FINANCIALS - 18.4%
Cedar Shopping Centers REIT 22,000 109,120
Cohen & Steers 5,800 229,274
Colonial Properties Trust REIT 9,700 209,035
Cousins Properties REIT 11,650 99,141
Extra Space Storage REIT 35,200 748,352
First Cash Financial Services * 2,300 99,521
Flagstone Reinsurance Holdings ++ 17,900 159,489
Hilltop Holdings * 32,900 287,875
ICG Group * 30,300 334,815
Infinity Property & Casualty 2,300 116,541
Intl FCStone * 3,100 71,238
Investors Bancorp * 6,400 88,576
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
FINANCIALS - (CONTINUED)
Nelnet, Cl A 6,900 $ 139,104
Pinnacle Financial Partners * 7,000 106,750
Piper Jaffray * 4,400 129,712
Platinum Underwriters Holdings ++ 2,400 82,440
Sabra Health Care REIT 16,300 234,883
Sovran Self Storage REIT 11,900 482,545
Summit Hotel Properties 7,100 80,088
Sunstone Hotel Investors REIT * 35,000 311,850
Trustmark 9,600 209,184
United Bankshares 3,400 81,124
Webster Financial 24,700 504,374
Westamerica Bancorporation 4,400 206,492
---------------
5,121,523
---------------
HEALTH CARE - 14.0%
Accuray * 15,000 103,500
Alnylam Pharmaceuticals * 10,700 100,366
AMAG Pharmaceuticals * 13,900 205,859
CardioNet * 36,100 181,944
Complete Genomics * 4,700 58,233
Computer Programs & Systems 4,700 344,980
CONMED * 2,500 65,000
Cyberonics * 6,600 179,124
InterMune * 5,900 196,942
Jazz Pharmaceuticals * 4,700 190,209
Ligand Pharmaceuticals, Cl B * 7,500 102,150
Magellan Health Services * 1,700 88,570
Medicis Pharmaceutical, Cl A 7,500 278,850
Medidata Solutions * 2,200 44,946
Medivation * 2,400 50,928
Molina Healthcare * 2,700 61,155
NuPathe * 13,000 89,700
Osiris Therapeutics * 14,100 100,815
Par Pharmaceutical * 5,900 191,101
Sirona Dental Systems * 6,300 318,654
Spectrum Pharmaceuticals * 28,000 296,800
Sun Healthcare Group * 8,000 56,000
Team Health Holdings * 3,200 70,432
Transcept Pharmaceuticals * 8,200 33,292
WellCare Health Plans * 6,700 293,795
XenoPort * 29,900 211,991
---------------
3,915,336
---------------
INDUSTRIAL - 14.1%
AAR 5,800 170,172
Aerovironment * 2,300 66,309
Alaska Air Group * 4,600 281,152
Amerco * 800 72,112
American Science & Engineering 6,500 527,345
AO Smith 2,250 93,308
Applied Industrial Technologies 5,400 172,368
Atlas Air Worldwide Holdings * 3,600 188,604
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 85
SCHEDULE OF INVESTMENTS
JULY 31, 2011
SMALL CAP ADVANTAGE FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
INDUSTRIAL - (CONTINUED)
Blount International * 10,100 $ 167,963
Cascade 2,700 134,973
CDI 7,200 93,312
Ceradyne * 2,400 77,784
Douglas Dynamics * 14,100 214,179
Dycom Industries * 25,900 441,336
Encore Wire 3,600 79,236
GeoEye * 1,500 59,940
Insperity 5,400 157,788
Knoll 7,600 138,700
Korn/Ferry International * 9,300 200,322
Layne Christensen * 3,300 96,723
LSI Industries 7,300 60,736
NCI Building Systems * 9,700 109,513
RSC Holdings * 8,300 99,102
Sauer-Danfoss * 2,900 137,750
Sykes Enterprises * 5,500 106,150
---------------
3,946,877
---------------
INFORMATION TECHNOLOGY - 20.0%
Acxiom * 8,400 115,416
Anaren * 7,700 154,077
Aspen Technology * 24,200 375,100
ATMI * 9,300 173,445
Aviat Networks * 12,500 48,375
Benchmark Electronics * 26,100 382,365
Blackbaud 2,700 68,580
BroadSoft * 3,400 99,314
Cognex 5,700 193,515
Comtech Telecommunications 2,300 61,985
Diodes * 7,100 167,205
Electro Rent 5,000 80,800
FEI * 1,900 62,776
Formfactor * 7,500 68,925
Interactive Intelligence Group * 2,700 102,627
IntraLinks Holdings * 4,800 73,344
Kulicke & Soffa Industries * 21,200 195,040
Manhattan Associates * 16,100 600,530
MicroStrategy, Cl A * 1,400 223,118
Monolithic Power Systems * 13,000 175,370
Netgear * 1,600 52,656
OmniVision Technologies * 2,700 78,948
Oplink Communications * 3,100 52,328
Opnext * 29,000 54,810
QLIK Technologies * 4,400 133,364
RealNetworks 36,300 122,694
Riverbed Technology * 2,300 65,849
S1 * 8,700 81,780
Silicon Graphics International * 5,000 71,350
Silicon Image * 8,400 48,132
Stamps.com 2,900 48,575
--------------------------------------------------------------------------------
Description Shares/Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
INFORMATION TECHNOLOGY - (CONTINUED)
Syntel 7,600 $ 417,772
TeleNav * 4,200 42,126
TeleTech Holdings * 20,800 411,632
TIBCO Software * 14,800 385,392
VeriFone Systems * 2,600 102,362
---------------
5,591,677
---------------
MATERIALS - 5.4%
AEP Industries * 2,500 67,700
Century Aluminum * 7,000 91,140
Coeur d'Alene Mines * 2,500 68,225
Domtar ++ 2,400 191,880
Headwaters * 27,400 62,746
Hecla Mining * 9,000 69,930
Innospec * 6,300 202,356
LSB Industries * 7,300 290,102
Metals USA Holdings * 4,600 70,748
Minerals Technologies 2,200 142,516
Noranda Aluminum Holding * 7,800 108,264
Rockwood Holdings * 2,400 145,128
---------------
1,510,735
---------------
TELECOMMUNICATION SERVICES - 1.0%
Consolidated Communications
Holdings 10,000 180,200
Neutral Tandem * 1,600 24,528
Vonage Holdings * 15,300 61,353
---------------
266,081
---------------
UTILITIES - 1.5%
NorthWestern 2,700 86,454
Portland General Electric 13,000 322,140
---------------
408,594
---------------
TOTAL COMMON STOCK
(Cost $22,280,650) 27,189,897
---------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 1.7%
--------------------------------------------------------------------------------
Credit Suisse Securities (USA)
0.140%, dated 07/29/11,
matures on 08/01/11,
repurchase price $461,947
(collateralized by a U.S.
Treasury Note obligation,
par value $450,000, 2.75%,
10/31/13, total market value
$476,933) $ 461,942 461,942
---------------
TOTAL REPURCHASE AGREEMENT
(Cost $461,942) 461,942
---------------
The accompanying notes are an integral part of the financial statements.
86 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2011
SMALL CAP ADVANTAGE FUND (CONCLUDED)
--------------------------------------------------------------------------------
Description Value
--------------------------------------------------------------------------------
TOTAL INVESTMENTS - 99.1%
(Cost $22,742,592) $ 27,651,839
---------------
OTHER ASSETS & LIABILITIES, NET - 0.9% 237,466
---------------
NET ASSETS - 100.0% $ 27,889,305
===============
--------------------------------------------------------------------------------
* 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,
2011 IS AS FOLLOWS:
LONG FUTURES NUMBER OF EXPIRATION COUNTER- UNREALIZED
OUTSTANDING CONTRACTS DATE PARTY DEPRECIATION**
--------------------------------------------------------------------------------
RUSSELL 2000
MINI INDEX FUTURES 15 SEPTEMBER 2011 GSC $ (384)
** THE PRIMARY RISK EXPOSURE IS THE PRICE MOVEMENT OF THE UNDERLYING BASKET
OF EQUITY SECURITIES. SEE NOTE 2 FOR ADDITIONAL DETAILS.
GSC - GOLDMAN SACHS COMPANY
A summary of the inputs used to value the Fund's net assets as of July 31, 2011
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
07/31/11 PRICE INPUTS INPUTS
------------- ------------- ----------- ------------
Assets:
Common Stock*** $ 27,189,897 $ 27,189,897 $ -- $ --
Repurchase Agreement 461,942 -- 461,942 --
Liabilities:
Derivatives (1)
Equity Contracts (384) (384) -- --
------------- ------------- ----------- ------------
Total: $ 27,651,455 $ 27,189,513 $ 461,942 $ --
============= ============= =========== ============
*** 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.
HIGHMARK(R) FUNDS 87
SCHEDULE OF INVESTMENTS
JULY 31, 2011
SMALL CAP VALUE FUND
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - 98.4%+
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 10.6%
American Greetings, Cl A 26,400 $ 585,288
Arctic Cat * 25,300 416,944
Blyth 4,600 290,996
Bob Evans Farms 15,000 518,100
Career Education * 9,300 211,017
Cooper Tire & Rubber 19,100 322,026
Journal Communications, Cl A * 70,900 351,664
RadioShack 22,600 314,592
Rent-A-Center 16,000 432,800
Ruby Tuesday * 39,600 359,964
Scholastic 21,500 617,480
Sinclair Broadcast Group, Cl A 32,400 321,084
Stage Stores 29,900 532,220
---------------
5,274,175
---------------
CONSUMER STAPLES - 4.7%
Cal-Maine Foods 7,900 267,099
Chiquita Brands International * 23,900 282,976
Corn Products International 11,000 559,790
Fresh Del Monte Produce 25,600 627,456
Nash Finch 6,200 221,960
Universal 10,100 370,872
---------------
2,330,153
---------------
ENERGY - 4.7%
Green Plains Renewable Energy * 37,900 415,005
Tesoro * 24,600 597,534
USEC * 97,000 330,770
VAALCO Energy * 61,100 406,926
W&T Offshore 22,900 620,590
---------------
2,370,825
---------------
FINANCIALS - 35.1%
Alterra Capital Holdings ++ 20,000 435,800
American Equity Investment
Life Holding 41,200 489,044
Anworth Mortgage Asset REIT 40,200 278,586
Ashford Hospitality Trust REIT 49,400 538,460
Banco Latinoamericano de Comercio
Exterior SA, Cl E ++ 27,500 486,475
Calamos Asset Management, Cl A 22,000 299,640
Camden National 11,554 369,381
Capstead Mortgage REIT 45,500 575,120
CBL & Associates Properties REIT 33,400 593,184
CNO Financial Group * 76,600 563,010
CommonWealth REIT 25,700 607,034
Dime Community Bancshares 27,200 382,160
Dynex Capital REIT 21,100 192,010
Encore Capital Group * 9,100 248,885
F.N.B. 21,400 214,000
First Bancorp 38,629 380,495
First Bancorp/Puerto Rico * 3,606 15,866
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
FINANCIALS - (CONTINUED)
First Financial Holdings 11,000 $ 91,410
Flushing Financial 35,800 441,056
GFI Group 53,200 241,528
Horace Mann Educators 33,800 492,128
Hospitality Properties Trust REIT 24,000 606,000
Huntington Bancshares 55,900 337,916
Independent Bank * 4,967 10,828
Infinity Property & Casualty 9,470 479,845
Integra Bank * (A) 51,000 3,264
International Bancshares 35,200 592,064
Lakeland Bancorp 18,745 186,513
MFA Financial REIT 69,000 516,810
Montpelier Re Holdings ++ 19,895 343,388
Nelnet, Cl A 29,400 592,704
One Liberty Properties REIT 24,400 377,224
Oriental Financial Group 42,100 522,882
Parkway Properties REIT 21,500 379,045
Pennantpark Investment 33,896 359,976
Presidential Life 28,351 322,067
Protective Life 21,100 448,586
Rait Financial Trust REIT 12,733 70,796
Republic Bancorp, Cl A 20,218 366,148
Safety Insurance Group 9,200 373,520
Selective Insurance Group 23,500 385,165
Sierra Bancorp 18,000 207,360
StanCorp Financial Group 13,600 452,336
Validus Holdings ++ 13,500 358,965
Walter Investment Management REIT 24,100 582,979
Washington Trust Bancorp 11,300 257,414
WesBanco 23,200 476,760
---------------
17,545,827
---------------
HEALTH CARE - 6.2%
Endo Pharmaceuticals Holdings * 14,300 532,675
Kindred Healthcare * 23,400 440,856
Lumenis * ++ 13 --
Magellan Health Services * 12,500 651,250
Par Pharmaceutical * 18,100 586,259
PDL BioPharma 56,000 346,640
PharMerica * 16,600 211,982
Skilled Healthcare Group, Cl A * 18,400 161,920
Sun Healthcare Group * 22,000 154,000
---------------
3,085,582
---------------
INDUSTRIAL - 11.8%
AAR 20,600 604,404
Alaska Air Group * 10,400 635,648
Ampco-Pittsburgh 16,500 429,825
Deluxe 24,800 583,792
Ennis 23,600 413,944
EnPro Industries * 4,900 226,576
Mueller Industries 4,800 180,144
The accompanying notes are an integral part of the financial statements.
88 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2011
SMALL CAP VALUE FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
INDUSTRIAL - (CONTINUED)
NACCO Industries, Cl A 5,400 $ 490,752
NN * 15,100 177,878
PAM Transportation Services * (A) 43,452 421,484
Ryder System 6,200 349,184
Seaboard 110 287,650
TAL International Group 16,000 495,040
Tutor Perini 21,100 332,958
US Airways Group * 41,700 260,208
---------------
5,889,487
---------------
INFORMATION TECHNOLOGY - 12.8%
Arris Group * 27,900 334,800
Benchmark Electronics * 19,700 288,605
Black Box 11,036 314,415
Brightpoint * 40,900 371,781
Convergys * 46,900 583,436
CSG Systems International * 26,700 474,192
Entegris * 41,100 352,227
Fairchild Semiconductor
International * 36,300 544,863
GT Solar International * 26,500 361,460
Imation * 29,100 242,112
Integrated Device Technology * 59,700 408,348
Multi-Fineline Electronix * 25,644 520,830
Photronics * 41,000 306,680
Tech Data * 12,700 592,709
Telecommunication Systems, Cl A * 42,500 215,900
United Online 82,000 489,540
---------------
6,401,898
---------------
MATERIALS - 7.3%
A. Schulman 23,400 518,310
Boise 33,000 228,690
Glatfelter 32,700 493,443
Innospec * 15,900 510,708
Neenah Paper 15,900 321,021
NewMarket 3,300 541,266
OM Group * 11,100 402,708
Rock-Tenn, Cl A 3,500 215,110
Stepan 5,000 396,500
---------------
3,627,756
---------------
TELECOMMUNICATION SERVICES - 1.3%
Cincinnati Bell * 82,500 285,450
Frontier Communications 1 7
USA Mobility 21,300 351,663
---------------
637,120
---------------
UTILITIES - 3.9%
Avista 23,300 587,393
El Paso Electric 6,700 224,115
NorthWestern 6,800 217,736
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
UTILITIES - (CONTINUED)
Portland General Electric 23,700 $ 587,286
Unisource Energy 9,519 350,490
---------------
1,967,020
---------------
TOTAL COMMON STOCK
(Cost $50,851,809) 49,129,843
---------------
--------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 0.2%
--------------------------------------------------------------------------------
Invesco AIM Government & Agency
Portfolio (B) 98,150 98,150
---------------
TOTAL REGISTERED INVESTMENT COMPANY
(Cost $98,150) 98,150
---------------
TOTAL INVESTMENTS - 98.6%
(Cost $50,949,959) 49,227,993
---------------
OTHER ASSETS & LIABILITIES, NET - 1.4% 721,621
---------------
NET ASSETS - 100.0% $ 49,949,614
===============
--------------------------------------------------------------------------------
* 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,
2011. THE TOTAL VALUE OF SECURITIES ON LOAN AT JULY 31, 2011 IS $47,884.
(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.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 89
SCHEDULE OF INVESTMENTS
JULY 31, 2011
SMALL CAP VALUE FUND (CONCLUDED)
A summary of the inputs used to value the Fund's net assets as of July 31, 2011
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
07/31/11 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Investments in Securities ** $ 49,227,993 $ 49,227,993 $ -- $ --
============ ============ ============ ============
** See schedule of investments detail for industry and security type
breakouts.
The accompanying notes are an integral part of the financial statements.
90 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2011
VALUE MOMENTUM FUND
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - 99.3%+
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 10.2%
Comcast, Cl A 283,000 $ 6,605,220
Daimler ++ 37,200 2,683,980
Home Depot 118,600 4,142,698
McGraw-Hill 105,500 4,388,800
News, Cl A 274,500 4,397,490
Time Warner 106,900 3,758,604
Time Warner Cable 79,000 5,791,490
---------------
31,768,282
---------------
CONSUMER STAPLES - 15.3%
Altria Group 138,800 3,650,440
Diageo, SP ADR 54,000 4,386,960
Heineken, ADR 158,000 4,681,540
Henkel KGaA, SP ADR 65,000 3,544,450
Kraft Foods, Cl A 136,000 4,675,680
Nestle, SP ADR 74,000 4,717,500
Philip Morris International 108,900 7,750,413
Wal-Mart Stores 170,000 8,960,700
Walgreen 130,800 5,106,432
---------------
47,474,115
---------------
ENERGY - 14.1%
Chevron 80,000 8,321,600
Halliburton 84,000 4,597,320
Marathon Oil 155,000 4,800,350
Marathon Petroleum * 78,000 3,415,620
Peabody Energy 33,000 1,896,510
QEP Resources 79,000 3,462,570
Royal Dutch Shell PLC, ADR 114,500 8,432,925
Suncor Energy 74,000 2,828,280
Williams 196,500 6,229,050
---------------
43,984,225
---------------
FINANCIALS - 15.6%
Bank of America 528,500 5,131,735
Bank of New York Mellon 150,350 3,775,289
Berkshire Hathaway, Cl B * 65,800 4,880,386
Goldman Sachs Group 35,000 4,723,950
JPMorgan Chase 289,800 11,722,410
MetLife 171,000 7,046,910
Wells Fargo 397,000 11,092,180
---------------
48,372,860
---------------
HEALTH CARE - 10.1%
Baxter International 61,400 3,571,638
Covidien ++ 88,500 4,494,915
Hospira * 41,500 2,121,480
Merck 212,500 7,252,625
Pfizer 345,000 6,637,800
UnitedHealth Group 148,500 7,370,055
---------------
31,448,513
---------------
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
INDUSTRIAL - 15.9%
ABB, SP ADR * 135,800 $ 3,251,052
Assa Abloy AB, ADR 300,000 3,837,000
Dun & Bradstreet 46,500 3,373,575
Honeywell International 88,400 4,694,040
Jardine Matheson Holdings, ADR 43,500 2,479,500
Lockheed Martin 44,000 3,332,120
Rolls-Royce Holdings PLC, SP ADR 70,000 3,720,500
Schindler Holding AG, COP
(Switzerland) 31,005 3,659,697
Tyco International ++ 89,000 3,941,810
United Parcel Service, Cl B 66,750 4,620,435
United Technologies 65,000 5,384,600
Vinci 74,000 4,308,531
Waste Management 88,000 2,771,120
---------------
49,373,980
---------------
INFORMATION TECHNOLOGY - 14.9%
Corning 218,000 3,468,380
Hewlett-Packard 105,000 3,691,800
Intel 301,000 6,721,330
International Business Machines 53,000 9,638,050
Microsoft 495,000 13,563,000
Motorola Solutions * 70,000 3,142,300
Texas Instruments 80,000 2,380,000
Western Union 197,000 3,823,770
---------------
46,428,630
---------------
MATERIALS - 2.4%
BHP Billiton, SP ADR 27,500 2,517,625
Dow Chemical 55,000 1,917,850
Weyerhaeuser, REIT 148,500 2,968,515
---------------
7,403,990
---------------
UTILITIES - 0.8%
Questar 128,500 2,368,254
---------------
TOTAL COMMON STOCK
(Cost $259,464,664) 308,622,849
---------------
--------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 1.3%
--------------------------------------------------------------------------------
Dreyfus Cash Management 3,912,674 3,912,674
---------------
TOTAL REGISTERED INVESTMENT COMPANY
(Cost $3,912,674) 3,912,674
---------------
TOTAL INVESTMENTS - 100.6%
(Cost $263,377,338) 312,535,523
---------------
OTHER ASSETS & LIABILITIES, NET - (0.6)% (1,871,297)
---------------
NET ASSETS - 100.0% $ 310,664,226
===============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 91
SCHEDULE OF INVESTMENTS
JULY 31, 2011
VALUE MOMENTUM 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
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, 2011
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
07/31/11 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Investments in Securities ** $312,535,523 $312,535,523 $ -- $ --
============ ============ ============ ============
** See schedule of investments detail for industry breakout.
The accompanying notes are an integral part of the financial statements.
92 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2011
CAPITAL GROWTH ALLOCATION FUND
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
AFFILIATED EQUITY REGISTERED INVESTMENT COMPANIES - 79.6%
--------------------------------------------------------------------------------
HighMark Cognitive Value Fund,
Fiduciary Shares - 1.7% 66,763 $ 767,775
HighMark Core Equity Fund,
Fiduciary Shares - 13.7% 715,311 6,072,991
HighMark Enhanced Growth Fund,
Fiduciary Shares - 1.4% * 57,008 638,493
HighMark Fundamental Equity Fund,
Fiduciary Shares - 8.2% 175,410 3,646,768
HighMark Geneva Mid Cap Growth Fund,
Fiduciary Shares - 3.2% * 61,053 1,395,064
HighMark Geneva Small Cap Growth Fund,
Fiduciary Shares - 1.6% * 22,820 708,317
HighMark International Opportunities Fund,
Fiduciary Shares - 11.5% 680,878 5,079,350
HighMark Large Cap Growth Fund,
Fiduciary Shares - 5.5% 235,354 2,426,499
HighMark Large Cap Value Fund,
Fiduciary Shares - 16.1% 626,373 7,140,648
HighMark NYSE Arca Tech 100 Index Fund,
Fiduciary Shares - 1.0% * 13,162 424,606
HighMark Small Cap Advantage Fund,
Fiduciary Shares - 10.9% * 250,008 4,810,158
HighMark Small Cap Value Fund,
Fiduciary Shares - 2.6% 84,386 1,156,934
HighMark Value Momentum Fund,
Fiduciary Shares - 2.2% 59,298 954,704
---------------
TOTAL AFFILIATED EQUITY REGISTERED
INVESTMENT COMPANIES
(Cost $31,229,894) 35,222,307
---------------
--------------------------------------------------------------------------------
AFFILIATED FIXED INCOME REGISTERED INVESTMENT COMPANIES - 7.3%
--------------------------------------------------------------------------------
HighMark Bond Fund,
Fiduciary Shares - 0.6% 23,318 267,222
HighMark Short Term Bond Fund,
Fiduciary Shares - 6.7% 293,629 2,965,653
---------------
TOTAL AFFILIATED FIXED INCOME REGISTERED
INVESTMENT COMPANIES
(Cost $3,197,987) 3,232,875
---------------
--------------------------------------------------------------------------------
AFFILIATED MONEY MARKET REGISTERED INVESTMENT COMPANY - 0.1%
--------------------------------------------------------------------------------
HighMark Diversified Money Market Fund,
Fiduciary Shares, 0.02% (A) 26,814 26,814
---------------
TOTAL AFFILIATED MONEY MARKET
REGISTERED INVESTMENT COMPANY
(Cost $26,814) 26,814
---------------
--------------------------------------------------------------------------------
Description Shares/Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EQUITY REGISTERED INVESTMENT COMPANIES - 8.0%
--------------------------------------------------------------------------------
Fidelity Advisor Industrials Fund,
Institutional Class - 1.9% 32,196 $ 859,322
JPMorgan Small Cap Growth Fund,
Institutional Class - 0.7% * 25,047 307,828
Lazard Emerging Markets Equity Portfolio,
Institutional Class - 4.1% 83,109 1,803,466
Morgan Stanley Institutional Fund -
U.S. Real Estate Portfolio,
Institutional Class - 0.8% 22,927 360,189
Vanguard Health Care Fund,
Institutional Shares - 0.5% 3,683 211,662
---------------
TOTAL EQUITY REGISTERED INVESTMENT
COMPANIES
(Cost $3,104,490) 3,542,467
---------------
--------------------------------------------------------------------------------
FIXED INCOME REGISTERED INVESTMENT COMPANY - 1.4%
--------------------------------------------------------------------------------
Eaton Vance Income Fund of Boston,
Institutional Class - 1.4% 105,434 623,113
---------------
TOTAL FIXED INCOME REGISTERED
INVESTMENT COMPANY
(Cost $559,950) 623,113
---------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 3.6%
--------------------------------------------------------------------------------
Credit Suisse Securities (USA)
0.140%, dated 07/29/11,
matures on 08/01/11,
repurchase price $1,588,421
(collateralized by a U.S.
Treasury Note obligation,
par value $1,535,000, 2.750%,
10/31/13, total market value
$1,626,871) $ 1,588,402 1,588,402
---------------
TOTAL REPURCHASE AGREEMENT
(Cost $1,588,402) 1,588,402
---------------
TOTAL INVESTMENTS - 100.0%
(Cost $39,707,537) 44,235,978
---------------
OTHER ASSETS & LIABILITIES, NET - 0.0% (19,886)
---------------
NET ASSETS - 100.0% $ 44,216,092
===============
--------------------------------------------------------------------------------
* NON-INCOME PRODUCING SECURITY.
(A) THE RATE SHOWN REPRESENTS THE 7-DAY EFFECTIVE YIELD AS OF JULY 31, 2011.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 93
SCHEDULE OF INVESTMENTS
JULY 31, 2011
CAPITAL GROWTH ALLOCATION FUND (CONCLUDED)
A summary of the inputs used to value the Fund's net assets as of July 31, 2011
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
07/31/11 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Investments in Registered Investment Companies ** $ 42,647,576 $ 42,647,576 $ -- $ --
Repurchase Agreement 1,588,402 -- 1,588,402 --
------------ ------------ ------------ ------------
Total: $ 44,235,978 $ 42,647,576 $ 1,588,402 $ --
============ ============ ============ ============
** See schedule of investments detail for industry and security type
breakout.
The accompanying notes are an integral part of the financial statements.
94 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2011
DIVERSIFIED EQUITY ALLOCATION FUND
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
AFFILIATED EQUITY REGISTERED INVESTMENT COMPANIES - 89.8%
--------------------------------------------------------------------------------
HighMark Cognitive Value Fund,
Fiduciary Shares - 1.9% 26,131 $ 300,507
HighMark Core Equity Fund,
Fiduciary Shares - 16.8% 308,633 2,620,292
HighMark Enhanced Growth Fund,
Fiduciary Shares - 1.8% * 24,868 278,523
HighMark Fundamental Equity Fund,
Fiduciary Shares - 12.2% 91,480 1,901,870
HighMark Geneva Mid Cap Growth Fund,
Fiduciary Shares - 3.5% * 23,577 538,743
HighMark Geneva Small Cap Growth Fund,
Fiduciary Shares - 1.8% * 9,191 285,296
HighMark International Opportunities Fund,
Fiduciary Shares - 12.4% 259,293 1,934,324
HighMark Large Cap Growth Fund,
Fiduciary Shares - 4.3% 64,922 669,347
HighMark Large Cap Value Fund,
Fiduciary Shares - 16.2% 221,103 2,520,580
HighMark NYSE Arca Tech 100 Index Fund,
Fiduciary Shares - 1.2% * 5,741 185,205
HighMark Small Cap Advantage Fund,
Fiduciary Shares - 12.1% * 97,878 1,883,173
HighMark Small Cap Value Fund,
Fiduciary Shares - 2.9% 33,029 452,832
HighMark Value Momentum Fund,
Fiduciary Shares - 2.7% 25,614 412,389
---------------
TOTAL AFFILIATED EQUITY REGISTERED
INVESTMENT COMPANIES
(Cost $13,084,086) 13,983,081
---------------
--------------------------------------------------------------------------------
AFFILIATED MONEY MARKET REGISTERED INVESTMENT COMPANY - 0.2%
--------------------------------------------------------------------------------
HighMark Diversified Money Market Fund,
Fiduciary Shares, 0.02% (A) 32,217 32,217
---------------
TOTAL AFFILIATED MONEY MARKET
REGISTERED INVESTMENT COMPANY
(Cost $32,217) 32,217
---------------
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EQUITY REGISTERED INVESTMENT COMPANIES - 9.7%
--------------------------------------------------------------------------------
Fidelity Advisor Industrials Fund,
Institutional Class - 2.5% 14,351 $ 383,012
JPMorgan Small Cap Growth Fund,
Institutional Class - 0.8% * 9,782 120,215
Lazard Emerging Markets Equity Portfolio,
Institutional Class - 4.8% 34,640 751,686
Morgan Stanley Institutional Fund -
U.S. Real Estate Portfolio,
Institutional Class - 1.0% 9,972 156,660
Vanguard Health Care Fund,
Admiral Shares - 0.6% * 1,594 91,607
---------------
TOTAL EQUITY REGISTERED
INVESTMENT COMPANIES
(Cost $1,444,539) 1,503,180
---------------
TOTAL INVESTMENTS - 99.7%
(Cost $14,560,842) 15,518,478
---------------
OTHER ASSETS & LIABILITIES, NET - 0.3% 46,291
---------------
NET ASSETS - 100.0% $ 15,564,769
===============
--------------------------------------------------------------------------------
* NON-INCOME PRODUCING SECURITY.
(A) THE RATE SHOWN REPRESENTS THE 7-DAY EFFECTIVE YIELD AS OF JULY 31, 2011.
A summary of the inputs used to value the Fund's net assets as of July 31, 2011
is as follows (see Note 2 - significant accounting policies in the notes to
finincial statements):
LEVEL 2 LEVEL 3
TOTAL FAIR LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
07/31/11 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Investments in Registered Investment Companies ** $ 15,518,478 $ 15,518,478 $ -- $ --
============ ============ ============ ============
** 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 95
SCHEDULE OF INVESTMENTS
JULY 31, 2011
GROWTH & INCOME ALLOCATION FUND
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
AFFILIATED EQUITY REGISTERED INVESTMENT COMPANIES - 62.8%
--------------------------------------------------------------------------------
HighMark Cognitive Value Fund,
Fiduciary Shares - 1.4% 63,227 $ 727,111
HighMark Core Equity Fund,
Fiduciary Shares - 9.7% 588,357 4,995,152
HighMark Enhanced Growth Fund,
Fiduciary Shares - 1.1% * 49,709 556,746
HighMark Fundamental Equity Fund,
Fiduciary Shares - 7.0% 173,745 3,612,162
HighMark Geneva Mid Cap Growth Fund,
Fiduciary Shares - 2.8% * 63,102 1,441,879
HighMark Geneva Small Cap Growth Fund,
Fiduciary Shares - 1.3% * 22,239 690,306
HighMark International Opportunities Fund,
Fiduciary Shares - 9.3% 648,124 4,835,001
HighMark Large Cap Growth Fund,
Fiduciary Shares - 4.5% 226,911 2,339,456
HighMark Large Cap Value Fund,
Fiduciary Shares - 12.8% 581,886 6,633,502
HighMark NYSE Arca Tech 100 Index Fund,
Fiduciary Shares - 0.7% * 11,476 370,216
HighMark Small Cap Advantage Fund,
Fiduciary Shares - 8.6% * 231,741 4,458,689
HighMark Small Cap Value Fund,
Fiduciary Shares - 2.1% 79,916 1,095,644
HighMark Value Momentum Fund,
Fiduciary Shares - 1.5% 49,185 791,883
---------------
TOTAL AFFILIATED EQUITY REGISTERED
INVESTMENT COMPANIES
(Cost $27,490,677) 32,547,747
---------------
--------------------------------------------------------------------------------
AFFILIATED FIXED INCOME REGISTERED INVESTMENT COMPANIES - 24.5%
--------------------------------------------------------------------------------
HighMark Bond Fund,
Fiduciary Shares - 9.3% 419,376 4,806,055
HighMark Short Term Bond Fund,
Fiduciary Shares - 15.2% 780,050 7,878,509
---------------
TOTAL AFFILIATED FIXED INCOME
REGISTERED INVESTMENT COMPANIES
(Cost $12,451,425) 12,684,564
---------------
--------------------------------------------------------------------------------
AFFILIATED MONEY MARKET REGISTERED INVESTMENT COMPANY - 0.0%
--------------------------------------------------------------------------------
HighMark Diversified Money Market
Fund, Fiduciary Shares, 0.02% (A) 17,903 17,902
---------------
TOTAL AFFILIATED MONEY MARKET
REGISTERED INVESTMENT COMPANY
(Cost $17,902) 17,902
---------------
--------------------------------------------------------------------------------
Description Shares/Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EQUITY REGISTERED INVESTMENT COMPANIES - 6.1%
--------------------------------------------------------------------------------
Fidelity Advisor Industrials Fund,
Institutional Class - 1.4% 28,207 $ 752,854
JPMorgan Small Cap Growth Fund,
Institutional Class - 0.6% * 23,894 293,660
Lazard Emerging Markets Equity Portfolio,
Institutional Class - 3.1% 73,573 1,596,530
Morgan Stanley Institutional Fund -
U.S. Real Estate Portfolio,
Institutional Class - 0.6% 19,884 312,371
Vanguard Health Care Fund,
Admiral Shares - 0.4% * 3,243 186,375
---------------
TOTAL EQUITY REGISTERED
INVESTMENT COMPANIES
(Cost $2,821,164) 3,141,790
---------------
--------------------------------------------------------------------------------
FIXED INCOME REGISTERED INVESTMENT COMPANY - 2.7%
--------------------------------------------------------------------------------
Eaton Vance Income Fund of Boston,
Institutional Class - 2.7% 240,608 1,421,990
---------------
TOTAL FIXED INCOME REGISTERED
INVESTMENT COMPANY
(Cost $1,257,229) 1,421,990
---------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 3.8%
--------------------------------------------------------------------------------
Credit Suisse Securities (USA)
0.140%, dated 07/29/11,
matures on 08/01/11,
repurchase price $1,947,274
(collateralized by a U.S.
Treasury Note obligation,
par value $1,870,000, 1.375%,
10/31/13, total market value
$ 1,981,921) $ 1,947,251 1,947,251
---------------
TOTAL REPURCHASE AGREEMENT
(Cost $1,947,251) 1,947,251
---------------
TOTAL INVESTMENTS - 99.9%
(Cost $45,985,648) 51,761,244
---------------
OTHER ASSETS & LIABILITIES, NET - 0.1% 38,907
---------------
NET ASSETS - 100.0% $ 51,800,151
===============
--------------------------------------------------------------------------------
* NON-INCOME PRODUCING SECURITY.
(A) THE RATE SHOWN REPRESENTS THE 7-DAY EFFECTIVE YIELD AS OF JULY 31, 2011.
The accompanying notes are an integral part of the financial statements.
96 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2011
GROWTH & INCOME ALLOCATION FUND (CONCLUDED)
A summary of the inputs used to value the Fund's net assets as of July 31, 2011
is as follows (see Note 2 - significant accounting policies in the notes to
finincial statements):
LEVEL 2 LEVEL 3
TOTAL FAIR LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
07/31/11 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Investments in Registered Investment Companies ** $ 49,813,993 $ 49,813,993 $ -- $ --
Repurchase Agreement 1,947,251 -- 1,947,251 --
------------ ------------ ------------ ------------
Total: $ 51,761,244 $ 49,813,993 $ 1,947,251 $ --
============ ============ ============ ============
** 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 97
SCHEDULE OF INVESTMENTS
JULY 31, 2011
INCOME PLUS ALLOCATION FUND
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
AFFILIATED FIXED INCOME REGISTERED INVESTMENT COMPANIES - 46.3%
--------------------------------------------------------------------------------
HighMark Bond Fund,
Fiduciary Shares - 17.0% 259,054 $ 2,968,756
HighMark Short Term Bond Fund,
Fiduciary Shares - 29.3% 507,629 5,127,054
---------------
TOTAL AFFILIATED FIXED INCOME
REGISTERED INVESTMENT COMPANIES
(Cost $7,962,505) 8,095,810
---------------
--------------------------------------------------------------------------------
AFFILIATED EQUITY REGISTERED INVESTMENT COMPANIES - 40.3%
--------------------------------------------------------------------------------
HighMark Cognitive Value Fund,
Fiduciary Shares - 0.8% 12,699 146,039
HighMark Core Equity Fund,
Fiduciary Shares - 7.5% 154,207 1,309,217
HighMark Enhanced Growth Fund,
Fiduciary Shares - 0.6% * 9,745 109,144
HighMark Fundamental Equity Fund,
Fiduciary Shares - 5.5% 45,880 953,839
HighMark Geneva Mid Cap Growth Fund,
Fiduciary Shares - 1.2% 9,268 211,763
HighMark Geneva Small Cap Growth Fund,
Fiduciary Shares - 0.8% 4,404 136,706
HighMark International Opportunities Fund,
Fiduciary Shares - 2.1% 49,542 369,587
HighMark Large Cap Growth Fund,
Fiduciary Shares - 4.9% 82,910 854,803
HighMark Large Cap Value Fund,
Fiduciary Shares - 8.7% 133,530 1,522,238
HighMark NYSE Arca Tech 100 Index Fund,
Fiduciary Shares - 0.4% * 2,215 71,456
HighMark Small Cap Advantage Fund,
Fiduciary Shares - 5.4% 49,466 951,720
HighMark Small Cap Value Fund,
Fiduciary Shares - 1.3% 16,051 220,063
HighMark Value Momentum Fund,
Fiduciary Shares - 1.1% 12,210 196,582
---------------
TOTAL AFFILIATED EQUITY REGISTERED
INVESTMENT COMPANIES
(Cost $6,313,628) 7,053,157
---------------
--------------------------------------------------------------------------------
Description Shares/Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FIXED INCOME REGISTERED INVESTMENT COMPANY - 4.8%
--------------------------------------------------------------------------------
Eaton Vance Income Fund of Boston,
Institutional Class - 4.8% 141,761 $ 837,810
---------------
TOTAL FIXED INCOME REGISTERED
INVESTMENT COMPANY
(Cost $747,338) 837,810
---------------
--------------------------------------------------------------------------------
EQUITY REGISTERED INVESTMENT COMPANIES - 3.5%
--------------------------------------------------------------------------------
Fidelity Advisor Industrials Fund,
Institutional Class - 0.7% 4,791 127,884
JPMorgan Small Cap Growth Fund,
Institutional Class - 0.3% * 4,522 55,571
Lazard Emerging Markets Equity Portfolio,
Institutional Class - 1.9% 15,327 332,596
Morgan Stanley Institutional Fund -
U.S. Real Estate Portfolio,
Institutional Class - 0.4% 3,910 61,423
Vanguard Health Care Fund,
Admiral Shares - 0.2% 535 30,746
---------------
TOTAL EQUITY REGISTERED
INVESTMENT COMPANIES
(Cost $541,386) 608,220
---------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 4.9%
--------------------------------------------------------------------------------
Credit Suisse Securities (USA)
0.140%, dated 07/29/11,
matures on 08/01/11,
repurchase price $851,580
(collateralized by a U.S.
Treasury Note obligation, par value
$825,000, 2.750%, 10/31/13,
total market value $874,377) $ 851,570 851,570
---------------
TOTAL REPURCHASE AGREEMENT
(Cost $851,570) 851,570
---------------
TOTAL INVESTMENTS - 99.8%
(Cost $16,416,427) 17,446,567
---------------
OTHER ASSETS & LIABILITIES, NET - 0.2% 31,022
---------------
NET ASSETS - 100.0% $ 17,477,589
===============
--------------------------------------------------------------------------------
* NON-INCOME PRODUCING SECURITY.
A summary of the inputs used to value the Fund's net assets as of July 31, 2011
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
07/31/11 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Investments in Registered Investment Companies ** $ 16,594,997 $ 16,594,997 $ -- $ --
Repurchase Agreement 851,570 -- 851,570 --
------------ ------------ ------------ ------------
Total: $ 17,446,567 $ 16,594,997 $ 851,570 $ --
============ ============ ============ ============
** See schedule of investments detail for industry and security type
breakouts.
The accompanying notes are an integral part of the financial statements.
98 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2011
BOND FUND
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - 45.6%
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 5.6%
Comcast
5.700%, 07/01/19 $ 3,500,000 $ 4,006,377
Gap
5.950%, 04/12/21 3,750,000 3,700,016
Georgia-Pacific (A)
8.250%, 05/01/16 1,450,000 1,650,432
5.400%, 11/01/20 1,950,000 2,062,788
News America Holdings
7.750%, 02/01/24 1,000,000 1,206,154
Staples
9.750%, 01/15/14 1,500,000 1,784,533
Time Warner Entertainment
8.375%, 03/15/23 5,000,000 6,554,560
---------------
20,964,860
---------------
ENERGY - 4.9%
BP Capital Markets PLC
4.742%, 03/11/21 4,000,000 4,346,708
Energy Transfer Partners
9.700%, 03/15/19 2,000,000 2,593,152
Magellan Midstream Partners
6.550%, 07/15/19 3,000,000 3,576,642
Petrobras International Finance
3.875%, 01/27/16 2,000,000 2,073,914
Rockies Express Pipeline (A)
3.900%, 04/15/15 2,000,000 2,074,040
Transcontinental Gas Pipe Line
7.250%, 12/01/26 2,250,000 2,750,999
Williams Partners
5.250%, 03/15/20 1,000,000 1,093,127
---------------
18,508,582
---------------
FINANCIALS - 14.3%
American International Group
3.650%, 01/15/14 3,600,000 3,706,322
Bank of America, MTN
5.650%, 05/01/18 3,000,000 3,174,765
Berkshire Hathaway Finance
5.400%, 05/15/18 850,000 966,336
Boston Properties
4.125%, 05/15/21 3,000,000 2,962,278
Capital One Financial
4.750%, 07/15/21 1,350,000 1,364,607
Citigroup
4.750%, 05/19/15 3,500,000 3,754,635
Ford Motor Credit
5.000%, 05/15/18 2,700,000 2,714,701
GE Global Insurance
7.750%, 06/15/30 5,000,000 6,026,420
General Electric Capital
2.250%, 11/09/15 6,000,000 6,027,174
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - (CONTINUED)
--------------------------------------------------------------------------------
FINANCIALS - (CONTINUED)
HSBC Bank PLC (A)
2.000%, 01/19/14 $ 2,350,000 $ 2,384,902
HSBC Holdings PLC
5.100%, 04/05/21 3,250,000 3,413,589
JPMorgan Chase
4.250%, 10/15/20 4,400,000 4,388,815
3.125%, 12/01/11 3,000,000 3,029,553
Lehman Brothers Holdings, MTN (B)
5.625%, 01/24/13 4,000,000 1,080,000
NASDAQ OMX Group
5.250%, 01/16/18 2,000,000 2,089,438
NB Capital Trust IV
8.250%, 04/15/27 2,000,000 2,047,500
Wells Fargo
5.625%, 12/11/17 4,000,000 4,544,316
---------------
53,675,351
---------------
FOREIGN GOVERNMENTS - 1.8%
Export-Import Bank of Korea
3.750%, 10/20/16 3,500,000 3,593,674
Hydro Quebec, Ser IO
8.050%, 07/07/24 1,125,000 1,587,989
Province of Saskatchewan
9.375%, 12/15/20 1,000,000 1,435,552
---------------
6,617,215
---------------
HEALTH CARE - 1.8%
Laboratory Corp of America Holdings
4.625%, 11/15/20 3,000,000 3,128,895
Wellpoint
7.000%, 02/15/19 2,000,000 2,441,766
6.000%, 02/15/14 1,000,000 1,115,418
---------------
6,686,079
---------------
INDUSTRIAL - 4.3%
American Airlines, Ser 11-1A
5.250%, 01/31/21 2,000,000 1,965,000
Continental Airlines, Ser 07-1A
5.983%, 04/19/22 1,894,034 1,948,582
Continental Airlines, Ser 10-1A
4.750%, 01/12/21 3,650,000 3,558,750
Continental Airlines, Ser 98-1B (C)
6.748%, 03/15/17 618,009 609,542
Delta Air Lines, Ser 11-1A
5.300%, 04/15/19 4,500,000 4,517,100
L-3 Communications, Ser B
6.375%, 10/15/15 3,500,000 3,591,875
---------------
16,190,849
---------------
INFORMATION TECHNOLOGY - 0.5%
International Business Machines
6.500%, 01/15/28 1,500,000 1,862,562
---------------
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 99
SCHEDULE OF INVESTMENTS
JULY 31, 2011
BOND FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - (CONTINUED)
--------------------------------------------------------------------------------
MATERIALS - 3.9%
Alcoa
5.400%, 04/15/21 $ 1,400,000 $ 1,455,299
ArcelorMittal
5.500%, 03/01/21 1,900,000 1,946,383
Dow Chemical
4.250%, 11/15/20 3,750,000 3,841,519
Rio Tinto Finance USA
6.500%, 07/15/18 4,000,000 4,837,976
Teck Resources
10.250%, 05/15/16 1,950,000 2,340,000
---------------
14,421,177
---------------
TELECOMMUNICATION SERVICES - 3.9%
AT&T
4.450%, 05/15/21 1,000,000 1,057,403
Telefonica Emisiones SAU
3.992%, 02/16/16 4,000,000 4,017,096
Verizon Maryland
8.000%, 10/15/29 2,980,000 3,590,507
Verizon New England
7.875%, 11/15/29 4,925,000 5,899,869
---------------
14,564,875
---------------
UTILITIES - 4.6%
Exelon Generation
6.200%, 10/01/17 4,000,000 4,596,536
Great River Energy (A)
4.478%, 07/01/30 2,450,000 2,460,707
MidAmerican Energy Holdings, Ser D
5.000%, 02/15/14 400,000 435,192
Oklahoma Gas & Electric
6.650%, 07/15/27 2,500,000 2,929,330
Sempra Energy
6.150%, 06/15/18 4,000,000 4,641,068
Virginia Electric & Power, Ser A
4.750%, 03/01/13 2,000,000 2,121,844
---------------
17,184,677
---------------
TOTAL CORPORATE OBLIGATIONS
(Cost $160,940,294) 170,676,227
---------------
--------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES - 12.9%
--------------------------------------------------------------------------------
Banc of America Mortgage Securities,
Ser 2003-7, Cl A2
4.750%, 09/25/18 3,723,464 3,846,484
Chase Mortgage Finance,
Ser 2004-S1, CI A3
5.500%, 02/25/19 2,017,925 2,094,483
Ser 2003-S10, Cl A1
4.750%, 11/25/18 472,688 487,207
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES - (CONTINUED)
--------------------------------------------------------------------------------
Citicorp Mortgage Securities,
Ser 2003-10, Cl A1
4.500%, 11/25/18 $ 4,564,169 $ 4,681,107
CS First Boston Mortgage Securities,
Ser 2005-C1, Cl A4 (D)
5.014%, 02/15/38 5,000,000 5,409,928
DBUBS Mortgage Trust,
Ser 2011-LC1A, Cl A1 (A)
3.742%, 11/10/46 3,369,738 3,477,494
GE Capital Commercial Mortgage,
Ser 2004-C3, Cl A3 (D)
4.865%, 07/10/39 522,069 523,208
JPMorgan Chase Commercial
Mortgage Securities,
Ser 2004-PNC1, Cl A4 (D)
5.364%, 06/12/41 5,000,000 5,394,522
Lehman Mortgage Trust,
Ser 2007-8, Cl 1A1
6.000%, 09/25/37 5,011,015 3,998,429
Morgan Stanley Capital I,
Ser 2003-T11, Cl A4
5.150%, 06/13/41 5,000,000 5,285,558
Morgan Stanley Dean Witter
Capital I, Ser 2001-TOP3, Cl A4
6.390%, 07/15/33 120,009 119,967
Residential Funding Mortgage
Securities I, Ser 2004-S3, Cl A1
4.750%, 03/25/19 2,278,212 2,333,536
Wachovia Bank Commercial
Mortgage Trust,
Ser 2005-C17, Cl A2
4.782%, 03/15/42 376,147 376,635
Wells Fargo Mortgage Backed
Securities Trust,
Ser 2007-7, Cl A1
6.000%, 06/25/37 5,216,790 4,891,638
Ser 2004-2, Cl A1
5.000%, 01/25/19 2,937,535 3,033,384
Ser 2003-M, Cl A1(D)
4.687%, 12/25/33 1,398,239 1,410,327
Ser 2003-13, Cl A1
4.500%, 11/25/18 1,010,291 1,033,951
---------------
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $46,954,582) 48,397,858
---------------
--------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS - 14.0%
--------------------------------------------------------------------------------
FHLMC Gold
6.000%, 06/01/13 177,339 184,035
6.000%, 09/01/13 196,672 211,236
The accompanying notes are an integral part of the financial statements.
100 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2011
BOND FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS - (CONTINUED)
--------------------------------------------------------------------------------
FHLMC Gold (continued)
6.000%, 09/01/17 $ 952,521 $ 1,036,824
6.000%, 11/01/17 345,531 372,551
5.500%, 03/01/17 279,583 300,401
5.000%, 10/01/20 560,441 606,040
4.500%, 05/01/19 781,081 836,611
4.500%, 07/01/19 2,463,094 2,638,205
4.500%, 04/01/20 297,848 319,024
4.500%, 07/01/23 2,481,924 2,640,534
FHLMC, ARM (D)
4.983%, 06/01/39 1,434,924 1,530,353
2.489%, 12/01/34 2,111,908 2,215,343
FHLMC, CMO REMIC
Ser 1666, Cl J
6.250%, 01/15/24 1,890,150 2,080,346
FNMA
8.500%, 05/01/25 16,549 19,458
8.000%, 08/01/24 1,898 2,221
8.000%, 09/01/24 427 499
8.000%, 06/01/30 12,458 14,683
7.500%, 12/01/26 128,597 150,198
7.000%, 05/01/30 38,348 44,473
6.500%, 04/01/14 138,551 144,757
6.500%, 05/01/26 61,079 69,694
6.500%, 03/01/28 22,793 26,007
6.500%, 04/01/28 94,466 107,790
6.500%, 01/01/29 404,091 461,088
6.500%, 06/01/29 115,396 131,672
6.500%, 06/01/29 228,977 261,274
6.500%, 07/01/29 211,906 241,795
6.500%, 08/01/29 83,224 94,962
6.500%, 05/01/30 282,788 322,675
6.000%, 01/01/12 855 862
6.000%, 01/01/12 2,265 2,285
6.000%, 03/01/13 11,650 12,638
6.000%, 05/01/16 255,997 278,197
6.000%, 10/01/16 359,117 390,259
6.000%, 11/01/17 757,641 823,343
6.000%, 12/01/27 107 108
6.000%, 12/01/27 30,725 34,232
6.000%, 12/01/27 10,929 12,177
6.000%, 12/01/27 1,206 1,343
6.000%, 07/01/28 315,389 351,189
6.000%, 08/01/28 72,111 80,296
6.000%, 10/01/28 116,455 129,674
6.000%, 10/01/28 40,018 44,561
6.000%, 12/01/28 431,658 480,656
6.000%, 12/01/28 192,718 214,594
6.000%, 12/01/28 220,452 245,476
5.500%, 01/01/17 184,012 199,636
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS - (CONTINUED)
--------------------------------------------------------------------------------
FNMA (continued)
5.500%, 02/01/17 $ 96,154 $ 104,379
5.500%, 12/01/17 1,023,102 1,104,684
5.500%, 03/01/20 5,167,410 5,619,097
5.000%, 11/01/17 1,231,373 1,331,367
5.000%, 12/01/17 413,100 446,646
5.000%, 02/01/18 1,336,053 1,444,547
5.000%, 11/01/18 231,462 250,257
5.000%, 11/01/33 5,276,721 5,663,465
5.000%, 03/01/34 1,717,258 1,843,120
4.500%, 04/01/18 7,835,548 8,404,850
FNMA, ARM (D)
2.390%, 01/01/36 3,804,471 4,000,794
FNMA, CMO REMIC
Ser 2003-25, Cl CD
3.500%, 03/25/17 201,940 202,461
GNMA
8.000%, 05/15/17 3,065 3,098
8.000%, 11/15/26 147,215 174,038
8.000%, 12/15/26 44,672 52,916
7.500%, 05/15/23 66,473 77,643
7.500%, 01/15/24 14,354 14,423
7.500%, 01/15/24 1,082 1,267
7.500%, 01/15/24 628 735
7.500%, 01/15/24 21,783 25,506
7.500%, 02/15/27 15,644 18,346
7.500%, 02/15/27 4,500 5,278
7.500%, 07/15/27 11,898 13,953
7.500%, 08/15/27 3,605 4,030
7.500%, 08/15/27 11,941 14,004
7.500%, 08/15/27 1,127 1,321
7.500%, 08/15/27 629 738
7.500%, 08/15/27 10,348 12,135
7.000%, 01/15/24 23,917 27,796
7.000%, 04/15/24 14,655 17,032
6.500%, 12/15/23 25,736 29,129
6.500%, 12/15/23 4,070 4,606
6.500%, 01/15/24 6,376 7,231
6.500%, 02/15/24 60,030 68,080
6.500%, 04/15/26 23,607 27,078
6.500%, 01/15/29 156,199 179,165
6.500%, 05/15/29 408,112 468,133
6.500%, 06/15/29 41,237 47,300
6.000%, 08/15/28 73,101 82,344
6.000%, 09/15/28 82,959 93,448
6.000%, 09/15/28 136,286 153,517
---------------
TOTAL U.S. GOVERNMENT AGENCY
MORTGAGE-BACKED OBLIGATIONS
(Cost $49,356,039) 52,406,232
---------------
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 101
SCHEDULE OF INVESTMENTS
JULY 31, 2011
BOND FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS - 10.3%
--------------------------------------------------------------------------------
U.S. Treasury Notes
3.625%, 02/15/21 $ 1,200,000 $ 1,287,656
3.125%, 05/15/21 5,725,000 5,881,522
3.000%, 09/30/16 15,000,000 16,181,250
2.000%, 01/31/16 3,150,000 3,267,388
2.000%, 04/30/16 950,000 982,509
1.875%, 06/30/15 6,750,000 7,003,651
1.875%, 10/31/17 2,000,000 2,003,124
1.500%, 06/30/16 1,850,000 1,864,171
---------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $36,670,689) 38,471,271
---------------
--------------------------------------------------------------------------------
ASSET-BACKED SECURITIES - 10.3%
--------------------------------------------------------------------------------
Ally Master Owner Trust,
Ser 2011-1, Cl A2
2.150%, 01/15/16 2,500,000 2,544,289
Avis Budget Rental Car Funding
AESOP, Ser 2011-1A, Cl A (A)
1.850%, 09/20/13 1,400,000 1,410,570
BMW Vehicle Owner Trust,
Ser 2010-A, Cl A3
1.390%, 04/25/13 2,500,000 2,516,760
Centerpoint Energy Transition
Bond, Ser 2005-A, Cl A3
5.090%, 08/01/15 5,825,000 6,269,040
Chase Issuance Trust,
Ser 2005-A2, Cl A2 (D)
0.257%, 12/15/14 5,500,000 5,497,539
Hertz Vehicle Financing,
Ser 2011-1A, Cl A1 (A)
2.200%, 03/25/16 3,500,000 3,522,241
SLM Student Loan Trust,
Ser 2011-2, Cl A1 (D)
0.787%, 11/25/27 5,227,946 5,221,286
TXU Electric Delivery Transition
Bond, Ser 2004-1, Cl A3
5.290%, 05/15/18 4,000,000 4,510,617
Volkswagen Auto Loan Enhanced
Trust, Ser 2011-1, Cl A4
1.980%, 09/20/17 3,350,000 3,419,607
World Omni Auto Receivables Trust,
Ser 2011-A, Cl A4
1.910%, 04/15/16 3,800,000 3,867,245
---------------
TOTAL ASSET-BACKED SECURITIES
(Cost $37,468,101) 38,779,194
---------------
--------------------------------------------------------------------------------
Description Par/Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TAXABLE MUNICIPAL BONDS - 3.9%
--------------------------------------------------------------------------------
CALIFORNIA - 3.5%
California State, Public School
Improvements, Taxable, GO
6.200%, 10/01/19 $ 2,250,000 $ 2,554,155
Los Angeles, Department of
Water & Power Revenue,
Build America Bonds,
Taxable, RB
6.574%, 07/01/45 2,900,000 3,419,622
Metropolitan Water District of
Southern California, Build
America Bonds, Taxable, RB
6.947%, 07/01/40 4,750,000 5,245,140
University of California Revenue,
Build America Bonds,
Taxable, RB (D)
1.988%, 05/15/50 1,750,000 1,783,180
---------------
13,002,097
---------------
NEW JERSEY - 0.4%
New Jersey State, Turnpike
Authority Turnpike Revenue,
Build America Bonds,
Taxable, RB
7.102%, 01/01/41 1,250,000 1,545,187
---------------
TOTAL TAXABLE MUNICIPAL BONDS
(Cost $13,321,333) 14,547,284
---------------
--------------------------------------------------------------------------------
COMMERCIAL PAPER - DISCOUNTED* - 1.2%
--------------------------------------------------------------------------------
ASSET-BACKED SECURITIES - AUTOMOBILE - 0.7%
Silver Tower US (A)
0.400%, 08/08/11 2,500,000 2,499,861
---------------
ASSET-BACKED SECURITIES-DIVERSIFIED FINANCIAL ASETS - 0.5%
Rheingold Securitization (A)
0.370%, 08/10/11 2,000,000 1,999,867
---------------
TOTAL COMMERCIAL PAPER - DISCOUNTED
(Cost $4,499,631) 4,499,728
---------------
--------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 1.2%
--------------------------------------------------------------------------------
Dreyfus Cash Management 4,669,146 4,669,146
---------------
TOTAL REGISTERED INVESTMENT COMPANY
(Cost $4,669,146) 4,669,146
---------------
TOTAL INVESTMENTS - 99.4%
(Cost $353,879,815) 372,446,940
---------------
OTHER ASSETS & LIABILITIES, NET - 0.6% 2,244,581
---------------
NET ASSETS - 100.0% $ 374,691,521
===============
The accompanying notes are an integral part of the financial statements.
102 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2011
BOND FUND (CONCLUDED)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
* RATE SHOWN REPRESENTS THE MONEY MARKET EQUIVALENT YIELD TO MATURITY AT
PURCHASE.
(A) SECURITIES SOLD WITHIN THE TERMS OF A PRIVATE PLACEMENT MEMORANDUM, EXEMPT
FROM REGISTRATION UNDER SECTION 3A-4, 4(2) OR 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, 2011 WAS $23,542,602 AND REPRESENTED 6.3% OF NET ASSETS.
(B) THE ISSUER IS IN DEFAULT OF CERTAIN DEBT COVENANTS. INCOME IS NOT BEING
ACCRUED. AS OF JULY 31, 2011, THE VALUE OF THIS SECURITY AMOUNTED TO
$1,080,000, WHICH REPRESENTS 0.3% OF NET ASSETS.
(C) SECURITY CONSIDERED ILLIQUID. THE TOTAL VALUE OF SUCH SECURITY AS OF JULY
31, 2011 WAS $609,542 AND REPRESENTED 0.2% OF NET ASSETS.
(D) FLOATING RATE SECURITY. RATE DISCLOSED IS AS OF JULY 31, 2011.
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
GO - GENERAL OBLIGATION
MTN - MEDIUM TERM NOTE
PLC - PUBLIC LIABILITY COMPANY
RB - REVENUE BOND
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, 2011
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
07/31/11 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Corporate Obligations $170,676,227 $ -- $170,676,227 $ --
Mortgage-Backed Securities 48,397,858 -- 48,397,858 --
U.S. Government Agency Mortgage-Backed Obligations 52,406,232 -- 52,406,232 --
U.S. Treasury Obligations 38,471,271 -- 38,471,271 --
Asset-Backed Securities 38,779,194 -- 38,779,194 --
Taxable Municipal Bonds 14,547,284 -- 14,547,284 --
Commercial Paper - Discounted 4,499,728 -- 4,499,728 --
Registered Investment Company 4,669,146 4,669,146 -- --
------------ ------------ ------------ ------------
Total: $372,446,940 $ 4,669,146 $367,777,794 $ --
============ ============ ============ ============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 103
SCHEDULE OF INVESTMENTS
JULY 31, 2011
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - 97.5%
--------------------------------------------------------------------------------
CALIFORNIA - 97.5%
Alhambra, Unified School District,
Election 2004, Ser B, GO
5.250%, 08/01/23 (A) $ 1,150,000 $ 1,253,281
Berryessa, Unified School District,
GO, National-RE Insured
5.375%, 03/01/12 460,000 472,457
Brentwood, Unified School District,
Election 1997, Ser B, GO,
National-RE FGIC Insured
4.850%, 08/01/14 (A) 410,000 410,783
Burlingame, Elementary School
District, GO, AGM Insured
5.250%, 07/15/16 795,000 933,386
California State, Department of
Transportation,
Federal Highway Grant,
Anticipation Bonds,
Ser A, RB, National-RE
FGIC Insured
5.000%, 02/01/14 3,005,000 3,320,014
California State, Department of
Water Resources,
Central Valley
Project, Ser Z, ETM,
RB, FGIC Insured
5.000%, 12/01/12 10,000 10,636
RB, National-RE FGIC Insured
5.000%, 12/01/12 1,050,000 1,115,047
Central Valley, RB,
National-RE Insured
5.000%, 12/01/21 (A) 1,450,000 1,609,123
Power Supply Revenue, RB,
Ser A, AMBAC Insured,
Prerefunded @ 101
5.500%, 05/01/12 (A) (B) 1,225,000 1,285,980
Ser H, AGM Insured
5.000%, 05/01/21 (A) 1,175,000 1,323,591
5.000%, 05/01/22 (A) 1,645,000 1,824,321
Subuser F5
5.000%, 05/01/22 (A) 865,000 959,294
RB, AGM Insured
5.500%, 12/01/14 10,000 11,598
RB, ETM, AGM Insured
5.500%, 12/01/14 1,365,000 1,563,116
Ser M, RB
5.000%, 05/01/14 2,000,000 2,224,660
California State, Economic Recovery,
Ser A, GO
5.250%, 07/01/12 390,000 407,367
5.250%, 07/01/14 1,565,000 1,765,476
Ser A, GO, ETM
5.250%, 07/01/14 200,000 227,358
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
Ser A, GO, National-RE Insured
3.800%, 07/01/12 $ 450,000 $ 464,107
5.250%, 07/01/13 305,000 332,212
5.000%, 07/01/15 (A) 1,200,000 1,339,944
California State, Educational
Facilities Authority,
Loyola-Marymount University,
Ser A, RB, National-RE Insured
4.500%, 10/01/12 (A) 1,760,000 1,788,336
Santa Clara University, RB
5.250%, 04/01/23 (A) 250,000 269,618
5.250%, 04/01/24 (A) 670,000 714,877
Stanford University,
Ser P, RB
5.250%, 12/01/13 850,000 943,950
Ser R, RB
5.000%, 11/01/11 1,310,000 1,325,392
California State, GO,
5.000%, 12/01/17 (A) 1,545,000 1,772,208
AMBAC Insured
5.000%, 11/01/17 1,000,000 1,161,870
Various Purposes
5.250%, 10/01/21 (A) 1,000,000 1,131,590
5.625%, 04/01/25 (A) 1,975,000 2,195,884
California State, University,
Systemwide Ser A, RB
4.000%, 11/01/11 500,000 504,555
5.250%, 11/01/22 (A) 230,000 252,340
5.000%, 11/01/25 (A) 655,000 683,231
5.000%, 11/01/26 (A) 1,500,000 1,552,530
Campbell, Union High School
District, GO, National-RE
FGIC Insured
4.000%, 08/01/11 250,000 250,000
Cerritos Community College District,
Election 2004, Ser C, GO
5.250%, 08/01/24 (A) 450,000 493,974
5.250%, 08/01/25 (A) 750,000 814,140
Chaffey, Unified High School District,
GO, National-RE FGIC Insured
5.000%, 08/01/15 1,000,000 1,123,210
Citrus Community College District,
Election 2004,
Ser C, GO
5.250%, 06/01/25 (A) 505,000 549,869
Coast Community College, GO,
National-RE Insured
5.250%, 08/01/15 1,030,000 1,189,609
The accompanying notes are an integral part of the financial statements.
104 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2011
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
Corona-Norca Unified School
District, Election 2006,
Ser A, GO, AGM Insured
5.000%, 08/01/17 $ 500,000 $ 569,785
Cupertino, Unified School
District, GO, AGM Insured
5.250%, 08/01/13 (A) 595,000 595,000
Desert Sands Unified School District,
Election 2001, GO
5.750%, 08/01/19 (A) 650,000 769,678
5.250%, 08/01/20 (A) 610,000 692,313
5.250%, 08/01/22 (A) 650,000 723,437
5.500%, 08/01/25 (A) 300,000 328,368
Dublin, Unified School District,
Election 2004, Ser A, GO,
AGM Insured
5.000%, 08/01/21 (A) 720,000 762,754
5.000%, 08/01/26 (A) 1,580,000 1,616,387
Eastern Municipal Water District,
Ser A, COP,
National-RE FGIC Insured
5.250%, 07/01/12 (A) 300,000 300,807
5.250%, 07/01/13 (A) 1,000,000 1,002,690
5.375%, 07/01/16 (A) 2,120,000 2,125,851
5.375%, 07/01/17 (A) 2,410,000 2,416,652
El Camino Community College,
GO, AGM Insured
5.000%, 08/01/16 (A) 1,000,000 1,116,660
Fallbrook, Unified High School
District, GO, National-RE
FGIC Insured
5.375%, 09/01/12 250,000 263,502
Fontana, Unified School District,
Ser A, GO,
AGM Insured
5.250%, 08/01/19 (A) 980,000 1,069,739
Gilroy, Unified School District,
Election 2008, Ser A, GO
5.250%, 08/01/22 (A) 1,800,000 1,983,708
6.000%, 08/01/25 (A) 1,400,000 1,591,002
Grant, Joint Union High School
District, Election 2006, GO,
AGM Insured
5.000%, 08/01/21 (A) 975,000 1,065,041
Hayward, Unified School
District, GO
5.000%, 08/01/25 (A) 1,000,000 1,012,770
Imperial Irrigation District,
Ser B, RB,
5.000%, 11/01/26 (A) 1,000,000 1,055,990
Ser C, RB,
5.000%, 11/01/26 (A) 1,600,000 1,690,848
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
Irvine, Improvement Bond Act 1915,
Special Assessment, Limited
Obligation Reassessment,
Ser 85-7-A, AGM Insured,
SPA Dexia Credit
1.500%, 09/02/32 (A) (C) $ 1,000,000 $ 1,000,000
Livermore-Amador Valley, Water
Management Authority,
Ser A, RB, AMBAC Insured
5.000%, 08/01/13 (A) 410,000 411,431
5.250%, 08/01/14 (A) 750,000 752,753
Lodi, Unified School District,
Election 2002, GO, AGM Insured
5.250%, 08/01/22 (A) 1,000,000 1,035,580
Long Beach, Community College
District, Election 2008, Ser A, GO
5.000%, 06/01/24 (A) 465,000 493,374
Long Beach, Harbor Revenue,
Ser B, RB,
5.000%, 05/15/24 (A) 1,440,000 1,569,067
Long Beach, Unified School District,
Election of 2008, Ser A, GO
4.000%, 08/01/14 100,000 108,828
5.250%, 08/01/24 (A) 200,000 225,114
5.250%, 08/01/25 (A) 1,615,000 1,798,690
Ser B, GO,
5.250%, 08/01/24 (A) 1,045,000 1,176,221
Los Angeles County, Metropolitan
Transportation Authority,
Sales Tax Project,
Ser A, AGM Insured
5.000%, 07/01/18 (A) 1,255,000 1,344,080
Sales Tax Revenue,
Proposition C, Ser A, RB,
National-RE Insured
5.250%, 07/01/13 200,000 217,644
Los Angeles County, Public Works
Financing Authority,
Regional Park & Open Space,
Special Assessment,
AGM Insured
5.000%, 10/01/11 150,000 151,111
5.000%, 10/01/12 995,000 1,048,083
5.000%, 10/01/15 230,000 265,266
National-RE Insured
5.000%, 10/01/12 300,000 315,969
Los Angeles County, Sanitation
Districts Financing Authority,
Capital Project, Ser A, RB,
AGM Insured
5.000%, 10/01/21 (A) 245,000 258,649
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 105
SCHEDULE OF INVESTMENTS
JULY 31, 2011
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
Los Angeles County, Sanitation
Equipment, Ser A, RB,
AGM Insured
5.000%, 02/01/14 (A) $ 750,000 $ 797,047
Los Angeles Harbor Department,
Ser A, RB
5.000%, 08/01/20 (A) 2,000,000 2,252,160
5.250%, 08/01/21 (A) 350,000 397,352
Los Angeles,
Ser A, GO,
National-RE FGIC Insured
5.250%, 09/01/11 300,000 301,173
National-RE Insured
5.250%, 09/01/11 985,000 988,822
5.000%, 09/01/21 (A) 3,500,000 3,680,775
Ser B, GO,
AGM Insured
5.000%, 09/01/16 (A) 1,000,000 1,147,760
Los Angeles, Community
College District,
Election 2001,
Ser A, GO, National-RE
FGIC Insured
5.000%, 08/01/23 (A) 500,000 534,935
Election 2003, Ser E, GO,
AGM Insured
5.000%, 08/01/17 (A) 1,000,000 1,143,450
5.000%, 08/01/23 (A) 1,360,000 1,440,580
Election 2008, Ser A, GO
5.500%, 08/01/22 (A) 1,500,000 1,735,935
5.500%, 08/01/24 (A) 1,000,000 1,116,990
Los Angeles, Department of Airports,
Airport Revenue, Los Angeles
International Airport, Ser A, RB,
5.000%, 05/15/23 (A) 450,000 495,630
Los Angeles International Airport,
Ser C, RB
5.250%, 05/15/21 (A) 1,000,000 1,105,440
Los Angeles International Airport,
Ser D, RB,
5.000%, 05/15/24 (A) 565,000 613,878
Ser A, RB,
5.250%, 05/15/22 (A) 500,000 563,130
Los Angeles, Department of
Water & Power,
Ser A, Sub Ser A-2, RB,
National-RE Insured
5.000%, 07/01/19 (A) 2,500,000 2,637,475
Ser A-2, RB,
AGM Insured
5.000%, 07/01/25 (A) 2,000,000 2,097,520
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
Ser B, RB,
National-RE Insured
5.000%, 07/01/13 $ 430,000 $ 465,552
Sub Ser A-2, RB,
5.000%, 07/01/15 575,000 662,043
Los Angeles, Unified School
District, GO,
Election 1997, Ser E,
National-RE Insured,
Prerefunded @ 100
5.500%, 07/01/12 (A) (B) 1,390,000 1,457,026
National-RE Insured,
5.500%, 07/01/12 1,730,000 1,811,621
Ser D
5.250%, 07/01/24 (A) 1,000,000 1,099,670
Ser I
5.000%, 07/01/25 (A) 1,750,000 1,873,743
Los Angeles, Waste Water System,
RB, AGM Insured
5.000%, 06/01/22 (A) 920,000 975,421
Ser C, RB, National-RE Insured
5.375%, 06/01/12 1,220,000 1,271,252
Sub Ser A, RB,
National-RE Insured
5.000%, 06/01/26 (A) 580,000 603,084
Modesto Irrigation District, COP,
Capital Improvements, Ser A
5.500%, 10/01/25 (A) 1,500,000 1,566,540
Mount Diablo Unified School
District, GO,
5.000%, 08/01/26 300,000 318,669
North Orange County, Community
College District, GO, National-RE
Insured
5.000%, 08/01/15 1,050,000 1,199,867
Northern California Transmission
Agency Revenue, California-
Oregon Transmission Project,
Ser A, RB
5.000%, 05/01/22 (A) 1,060,000 1,161,718
Norwalk, La Mirada Unified School
District, Election 2002, Ser A, GO,
FGIC Insured, Prerefunded @ 100
5.000%, 08/01/13 (A) (B) 1,800,000 1,966,212
Orange County, Sanitation District,
Ser B, COP, AGM Insured
5.000%, 02/01/17 450,000 519,912
5.000%, 02/01/23 (A) 2,615,000 2,802,757
5.000%, 02/01/25 (A) 1,200,000 1,273,248
The accompanying notes are an integral part of the financial statements.
106 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2011
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
Orange County, Water District,
Ser B, COP, National-RE Insured
5.000%, 08/15/24 (A) $ 700,000 $ 751,212
Pajaro Valley Unified School District,
GO, AGM Insured
5.250%, 08/01/21 (A) 500,000 544,015
Paramount, Unified School District,
GO, AGM Insured
5.000%, 09/01/15 1,000,000 1,129,040
Port of Oakland, RB,
Ser B, National-RE Insured
5.000%, 11/01/18 (A) 1,250,000 1,370,450
Ser M, FGIC Insured,
Prerefunded @ 100
5.250%, 11/01/12 (A) (B) 1,000,000 1,062,730
Redding, Electric System Revenue,
Ser A, COP, AGM Insured
5.000%, 06/01/22 (A) 1,500,000 1,606,350
5.000%, 06/01/24 (A) 1,010,000 1,065,449
Redwood City, Elementary School
District, GO, National-RE
FGIC Insured
5.500%, 08/01/14 960,000 1,053,370
Riverside, Community College, GO,
AGM Insured
5.000%, 08/01/19 (A) 1,750,000 1,902,828
Sacramento, Municipal Utility
District, RB,
Electric Power &
Light Revenues,
Ser P, AGM Insured
5.250%, 08/15/13 (A) 1,635,000 1,637,779
Ser R, National-RE Insured
5.000%, 08/15/15 1,500,000 1,709,775
5.000%, 08/15/16 (A) 1,000,000 1,075,680
5.000%, 08/15/22 (A) 1,065,000 1,104,139
Ser U, AGM Insured
5.000%, 08/15/23 (A) 1,610,000 1,726,194
San Bernardino County, Community
College District, GO,
AGM Insured
5.000%, 08/01/15 1,000,000 1,133,960
Election 2002, Ser A
6.250%, 08/01/24 (A) 1,025,000 1,184,101
San Diego County, Regional
Transportation Commission,
Sales Tax Revenue,
Limited Tax, Ser C, RB,
SPA Dexia Credit Local
2.000%, 04/01/38 (C) 5,095,000 5,095,000
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
Limited Tax, Ser D, RB,
SPA Dexia Credit Local
2.000%, 04/01/38 (C) $ 4,000,000 $ 4,000,000
San Diego County, Water
Authority, COP,
Ser A, AGM Insured
5.000%, 05/01/20 (A) 1,000,000 1,101,360
Water Revenues, Ser 2008A,
National-RE FGIC Insured
5.250%, 05/01/16 1,310,000 1,519,783
Water Revenues, Ser A,
AGM Insured
5.000%, 05/01/26 (A) 3,520,000 3,647,283
National-RE FGIC Insured
5.000%, 05/01/12 775,000 801,466
San Diego, Public Facilities
Financing Authority,
RB, National-RE Insured
5.000%, 08/01/14 (A) 1,100,000 1,145,111
Sewer Authority, Ser B, RB
5.500%, 05/15/23 (A) 3,210,000 3,665,050
Water Authority, Ser B, RB
5.000%, 08/01/21 (A) 1,000,000 1,129,850
San Francisco City & County,
Academy Sciences
Improvement, Ser E, GO,
National-RE Insured
5.000%, 06/15/24 (A) 2,040,000 2,124,762
Airport Commission,
International Airport,
Second Series, Issue 32F, RB,
National-RE FGIC Insured
5.000%, 05/01/22 (A) 2,000,000 2,099,640
International Airport, Second
Series, Issue 32F, RB, National-RE
FGIC Insured
5.250%, 05/01/19 2,000,000 2,252,860
Earthquake Saftey,
Ser E, GO
5.000%, 06/15/26 (A) 2,815,000 3,005,941
General Hospital,
Ser A, GO
5.250%, 06/15/24 (A) 250,000 272,310
Public Utilities Commission,
Ser A, RB
4.000%, 11/01/11 765,000 772,023
Water Revenue,
Ser A, RB, AGM Insured,
5.000%, 11/01/11 1,000,000 1,011,620
5.000%, 11/01/23 (A) 1,000,000 1,070,410
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 107
SCHEDULE OF INVESTMENTS
JULY 31, 2011
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
Ser B, RB, National-RE Insured
5.000%, 11/01/15 (A) $ 1,250,000 $ 1,315,500
Unified School District, Prop A,
Ser B, GO, Election 2003,
AGM Insured
5.000%, 06/15/20 (A) 1,895,000 1,985,202
5.000%, 06/15/22 (A) 975,000 1,014,741
Ser B, GO, Election 2006
5.250%, 06/15/23 (A) 820,000 907,207
San Francisco, Bay Area Rapid
Transit, Sales Tax Revenue, RB,
AMBAC Insured
5.250%, 07/01/14 (A) 300,000 300,972
San Francisco, Bay Area Toll
Authority, RB
5.250%, 04/01/23 (A) 850,000 948,557
San Francisco, Community College
District, Election 2001, Ser B, GO,
National-RE Insured
5.000%, 06/15/20 (A) 2,085,000 2,188,916
San Joaquin County, Delta
Community College District,
Election 2004, Ser A, GO,
AGM Insured
4.500%, 08/01/15 1,000,000 1,123,750
San Jose, Financing Authority,
Convention Center Project,
Ser F, RB, National-RE Insured
4.250%, 09/01/11 2,015,000 2,021,287
San Jose, Financing Authority,
Lease Revenue, Ser B, RB,
AMBAC Insured
4.000%, 06/01/12 250,000 255,390
San Juan, Unified School District,
GO, Election 2002, AGM Insured
5.000%, 08/01/26 (A) 1,560,000 1,649,092
Ser A, GO, Election 2002,
National-RE Insured
5.000%, 08/01/25 (A) 2,200,000 2,259,620
San Lorenzo, Unified School District,
Election 2008, Ser A, GO, Assured
Guaranty Insured
5.000%, 08/01/22 (A) 325,000 345,677
San Mateo, County, Transit District,
Sales Tax Revenue, Ser A, RB,
National-RE Insured
5.250%, 06/01/16 2,125,000 2,460,346
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
San Mateo, Joint Powers Financing
Authority, Lease Revenue, Capital
Projects, Ser A, RB
5.250%, 07/15/24 (A) $ 1,000,000 $ 1,076,230
San Mateo, Unified High School
District, Election 2000, Ser A,
GO, FGIC Insured,
Prerefunded @ 100
5.375%, 09/01/11 (A) (B) 2,195,000 2,203,999
San Rafael, Elementary School
District, GO,
5.000%, 08/01/24 (A) 325,000 355,765
5.000%, 08/01/27 (A) 875,000 936,819
San Ramon Valley, Unified School
District, Election 2002, GO,
AGM Insured
5.250%, 08/01/18 (A) 1,290,000 1,396,786
Santa Clara, Valley Transportation
Authority, Measure A, Ser A, RB,
AMBAC Insured
5.000%, 04/01/25 (A) 400,000 426,112
Santa Maria, Joint Unified High
School District, Ser A, ETM, GO,
AGM Insured
5.500%, 08/01/15 510,000 590,738
Santa Rosa, High School District, GO,
5.000%, 08/01/24 (A) 1,090,000 1,169,112
Solano County, Community College,
Election 2002, Ser A, GO,
National-RE Insured,
Prerefunded @ 100
5.000%, 08/01/13 (A) (B) 1,865,000 2,035,256
Southern California, Public
Power Authority,
Power Project Revenue,
Canyon Power, Ser A, RB,
5.000%, 07/01/25 (A) 2,950,000 3,180,690
Transmission Project Revenue,
Sub Southern
Transmission, Ser A, RB
5.000%, 07/01/23 (A) 1,200,000 1,288,200
State of California, GO,
5.000%, 11/01/24 (A) 2,000,000 2,157,980
Stockton, Unified School District,
Election 2005, GO, AGM Insured
5.000%, 08/01/16 645,000 729,327
Torrance, Unified School District,
Election 2008, Measure Z, GO
5.500%, 08/01/25 (A) 1,000,000 1,109,710
The accompanying notes are an integral part of the financial statements.
108 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2011
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND (CONCLUDED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
University of California,
Limited Project, Ser A, RB,
National-RE Insured,
Prerefunded @ 101
5.000%, 05/15/12 (A) (B) $ 590,000 $ 617,807
Ser A, RB,
AMBAC Insured
5.125%, 05/15/18 (A) 705,000 755,090
5.000%, 05/15/22 (A) 1,500,000 1,592,010
5.000%, 05/15/25 (A) 600,000 616,236
Ser O, RB
5.500%, 05/15/22 (A) 2,000,000 2,298,260
Ventura, Unified School District,
GO, AGM Insured
2.000%, 08/01/11 230,000 230,000
------------
TOTAL MUNICIPAL BONDS
(Cost $211,728,774) 218,888,088
============
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 2.1%
--------------------------------------------------------------------------------
BlackRock Liquidity Funds,
California Money Fund 4,744,134 $ 4,744,134
------------
TOTAL REGISTERED INVESTMENT COMPANY
(Cost $4,744,134) 4,744,134
------------
TOTAL INVESTMENTS - 99.6%
(Cost $216,472,908) 223,632,222
------------
OTHER ASSETS & LIABILITIES, NET - 0.4% 949,784
------------
NET ASSETS - 100.0% $224,582,006
============
--------------------------------------------------------------------------------
(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) FLOATING RATE SECURITY. RATE DISCLOSED IS AS OF JULY 31, 2011.
AGM - ASSURED GUARANTY MUNICIPAL CORPORATION
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
A summary of the inputs used to value the Fund's net assets as of July 31, 2011
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
07/31/11 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Municipal Bonds $218,888,088 $ -- $218,888,088 $ --
Registered Investment Company 4,744,134 4,744,134 -- --
------------ ------------ ------------ ------------
Total: $223,632,222 $ 4,744,134 $218,888,088 $ --
============ ============ ============ ============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 109
SCHEDULE OF INVESTMENTS
JULY 31, 2011
NATIONAL INTERMEDIATE TAX-FREE BOND FUND
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - 94.8%
--------------------------------------------------------------------------------
ALASKA - 3.7%
Alaska State, International
Airports System,
Ser B, RB, AMBAC Insured,
Prerefunded @ 100 (B)
5.750%, 10/01/12 $ 150,000 $ 159,558
Ser D, RB, National-RE Insured
5.000%, 10/01/22 (A) 2,000,000 2,102,800
Anchorage, City of Anchorage
Schools, Ser B, GO,
5.000%, 08/01/24 (A) 1,000,000 1,088,470
National-RE FGIC Insured
5.000%, 09/01/17 500,000 592,035
------------
3,942,863
------------
ARIZONA - 2.9%
Arizona State, Transportation
Board & Highway Revenue,
Ser A, RB
5.250%, 07/01/17 (A) 1,015,000 1,076,742
Phoenix, GO, Ser A
6.250%, 07/01/17 1,000,000 1,247,820
Tucson, Water Revenue, RB
5.000%, 07/01/21 (A) 765,000 858,843
------------
3,183,405
------------
CALIFORNIA - 19.3%
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 1,104,830
California State, Department of
Water Resources, Central Valley
Project, Ser X, RB, National-RE
FGIC Insured
5.500%, 12/01/15 625,000 745,581
Central Valley Project, Ser Z,
RB, National-RE FGIC Insured
5.000%, 12/01/12 500,000 530,975
Power Supply Revenue, RB,
Ser H, AGM Insured
5.000%, 05/01/22 (A) 1,000,000 1,109,010
California State, Educational
Facilities Authority, Loyola-
Marymount University,
Ser A, RB, National-RE Insured
4.500%, 10/01/12 (A) 1,000,000 1,016,100
California State, GO,
Various Purposes
5.250%, 10/01/21 (A) 1,000,000 1,131,590
5.625%, 04/01/25 (A) 1,000,000 1,111,840
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
Chico, Unified School District,
Ser B, GO, AGM Insured
5.000%, 08/01/25 (A) $ 1,625,000 $ 1,713,156
Contra Costa, Water District,
Ser E, RB, AMBAC Insured
6.250%, 10/01/12 375,000 388,125
Elsinore Valley, Municipal Water
District, COP, National-RE
FGIC Insured
5.375%, 07/01/18 750,000 861,428
Long Beach, Unified School District,
Election of 2008, Ser A, GO
5.250%, 08/01/24 (A) 525,000 590,924
5.250%, 08/01/25 (A) 1,000,000 1,113,740
Los Angeles, Ser A, GO,
National-RE Insured
5.250%, 09/01/12 675,000 710,545
Los Angeles, Unified School
District, GO, Ser I
5.000%, 07/01/25 (A) 1,000,000 1,070,710
Redding, Electric System Revenue,
Ser A, COP, AGM Insured
5.000%, 06/01/22 (A) 1,000,000 1,070,900
Sacramento Municipal Utility
District, Ser R, RB,
National-RE Insured
5.000%, 08/15/23 (A) 500,000 517,175
San Bernardino County,
Community College District,
GO, Election 2002, Ser A
6.250%, 08/01/24 (A) 850,000 981,937
San Francisco City & County,
Airport Commission,
International Airport, Second
Series, Issue 32F, RB,
National-RE FGIC Insured
5.250%, 05/01/19 1,000,000 1,126,430
San Jose, Redevelopment Agency,
TA, ETM, National-RE Insured,
6.000%, 08/01/15 430,000 518,296
National-RE Insured
6.000%, 08/01/15 775,000 814,757
San Ramon Valley, Unified School
District, Election 2002, GO,
AGM Insured
5.250%, 08/01/18 (A) 1,670,000 1,808,243
Torrance, Unified School District,
Election of 2008, Measure Y, GO
5.500%, 08/01/25 (A) 750,000 816,158
------------
20,852,450
------------
The accompanying notes are an integral part of the financial statements.
110 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2011
NATIONAL INTERMEDIATE TAX-FREE BOND FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
COLORADO - 0.7%
Denver, City & County Board of
Water Commissioners, Ser B,
RB, AGM Insured
4.000%, 12/01/12 $ 100,000 $ 104,844
Regional Transportation District,
Sales Tax, Ser B, RB, AMBAC
Insured
5.250%, 11/01/12 600,000 636,630
------------
741,474
------------
CONNECTICUT - 1.6%
Connecticut State, Ser C, GO
5.000%, 06/01/14 1,500,000 1,678,020
------------
FLORIDA - 1.9%
Florida State, Municipal Power
Agency Revenue, All
Requirements Supply, Ser C,
RB, LOC Bank of America (C)
0.230%, 10/01/35 (A) 1,000,000 1,000,000
Jacksonville, Local Government,
Sales Tax Revenue, RB,
National-RE FGIC Insured
5.500%, 10/01/13 835,000 916,446
Orlando, Utilities Commission Utility
System Revenue, Ser A, RB,
National-RE Insured
3.500%, 10/01/11 100,000 100,540
------------
2,016,986
------------
GEORGIA - 1.3%
Atlanta, Water & Wastewater
Revenue, Ser A, RB, National-RE
FGIC Insured
5.500%, 11/01/13 1,000,000 1,102,200
Georgia State, Road & Tollway
Authority, Reimbursement
Revenue, Ser A, RB, AGM Insured
5.000%, 06/01/14 250,000 279,820
------------
1,382,020
------------
HAWAII - 6.8%
Hawaii State, Highway Revenue,
Ser B, RB, AGM Insured
5.000%, 07/01/15 1,000,000 1,149,720
Honolulu City and County,
Ser A, GO
5.000%, 04/01/25 (A) 1,000,000 1,099,290
Ser A, GO, AGM Insured,
Prerefunded @ 100 (B)
5.375%, 09/01/11 1,150,000 1,154,669
Ser A, GO, National-RE Insured
5.000%, 07/01/25 (A) 1,895,000 2,001,480
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
HAWAII - (CONTINUED)
Kauai County, Ser A, GO,
National-RE Insured
5.625%, 08/01/13 (A) $ 440,000 $ 440,334
Kauai County, Ser A, GO,
National-RE Insured,
Prerefunded @ 100 (B)
5.625%, 08/01/11 60,000 60,000
University of Hawaii Revenue,
Ser A, RB,
3.000%, 10/01/13 300,000 312,399
5.500%, 10/01/22 (A) 500,000 576,570
5.500%, 10/01/23 (A) 500,000 570,050
------------
7,364,512
------------
IDAHO - 4.5%
Idaho State, Housing & Finance
Association, Grant & Revenue
Anticipation, Federal Highway
Trust, RB, National-RE Insured
5.000%, 07/15/15 1,000,000 1,134,560
Ser A, RB
5.000%, 07/15/22 (A) 580,000 636,115
5.250%, 07/15/24 (A) 1,750,000 1,910,125
Twin Falls County, School District
No. 411, GO, National-RE Insured
5.000%, 09/15/16 1,000,000 1,131,150
------------
4,811,950
------------
ILLINOIS - 6.9%
Chicago,
Ser A, GO, AGM Insured
5.000%, 01/01/23 (A) 1,075,000 1,104,466
Ser C, GO
5.000%, 01/01/23 (A) 1,285,000 1,325,053
Chicago, Board of Education,
Dedicated Revenues, Ser B, GO,
AMBAC Insured
5.000%, 12/01/23 (A) 1,375,000 1,398,018
Chicago, O'Hare International
Airport, Ser B, RB, AGM Insured
5.000%, 01/01/19 (A) 1,705,000 1,835,262
Chicago, Project & Refunding,
Ser A, GO
5.250%, 01/01/21 (A) 1,020,000 1,094,419
Illinois State, GO,
National-RE Insured
5.000%, 08/01/26 (A) 700,000 701,029
------------
7,458,247
------------
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 111
SCHEDULE OF INVESTMENTS
JULY 31, 2011
NATIONAL INTERMEDIATE TAX-FREE BOND FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
MASSACHUSETTS - 6.1%
Massachusetts State,
Consolidated Loan, Ser D, GO,
5.500%, 11/01/14 $ 120,000 $ 138,026
National-RE Insured,
Prerefunded @ 100 (B)
5.375%, 08/01/12 120,000 125,981
School Building Authority,
Sales Tax Revenue, Ser A, RB,
AGM Insured
5.000%, 08/15/14 3,145,000 3,549,164
Water Resources Authority,
Ser A, RB, National-RE Insured
5.250%, 08/01/15 1,040,000 1,214,429
5.250%, 08/01/16 1,310,000 1,557,341
------------
6,584,941
------------
NEVADA - 6.1%
Clark County,
Limited Tax-Bond Bank, GO
5.000%, 06/01/25 (A) 2,300,000 2,424,867
School District, Ser A, GO, AGM
Insured
5.500%, 06/15/16 (A) 1,250,000 1,358,250
Las Vegas, Valley Water District,
Refunding & Water Improvement,
Ser A, GO, National-RE FGIC
Insured
5.250%, 06/01/18 (A) 1,305,000 1,370,485
Las Vegas, Water District Revenue,
Ser B, GO, National-RE Insured
5.250%, 06/01/14 (A) 300,000 317,964
Nevada State,
Capital Improvements, Ser A, GO,
National-RE Insured,
Prerefunded @ 100 (B)
5.000%, 05/01/12 500,000 518,035
Ser B, GO, AGM Insured
5.000%, 08/01/24 (A) 525,000 546,446
------------
6,536,047
------------
NEW JERSEY - 3.0%
Cape May County, General
Improvement, GO
2.500%, 07/15/12 100,000 102,028
Environmental Infrastructure Trust,
Ser A, RB, Prerefunded @ 101 (B)
4.750%, 09/01/11 100,000 101,361
New Jersey State,
Ser L, GO, AMBAC Insured
5.250%, 07/15/16 1,100,000 1,296,647
Transportation Trust Fund
Authority, Ser A, RB
5.250%, 12/15/21 515,000 574,725
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
NEW JERSEY - (CONTINUED)
Transportation Trust Fund
Authority, Ser C, ETM, RB,
National-RE Insured
5.250%, 06/15/15 $ 1,000,000 $ 1,170,340
------------
3,245,101
------------
NEW YORK - 6.1%
New York City, Transitional Finance
Authority, Subordinated Future
Tax Secured, Ser B, RB
5.000%, 11/01/13 780,000 856,206
New York State,
Power Authority, Ser A, RB,
FGIC Insured
3.400%, 11/15/11 100,000 100,911
Ser C-1, GO, AGM Insured
5.000%, 10/01/24 (A) 1,000,000 1,076,700
Ser M, GO, AGM Insured
5.000%, 04/01/15 1,000,000 1,141,100
New York State, Environmental
Facilities Corp., State Clean
Water and Drinking, Ser L, RB
5.000%, 11/15/11 730,000 740,045
New York State, Thruway Authority,
Highway and Bridge Trust
Fund, Ser B, RB, AGM Insured
5.000%, 04/01/12 200,000 206,312
Personal Income Tax Revenue
Transportation, Ser A, RB
5.000%, 03/15/12 175,000 180,218
Second Highway and Bridge
Trust Fund, Ser A, RB,
National-RE Insured,
Prerefunded @ 100 (B)
5.000%, 04/01/14 1,075,000 1,196,346
Second Highway and Bridge
Trust Fund, Ser B, RB
5.000%, 04/01/21 (A) 1,000,000 1,133,750
------------
6,631,588
------------
NORTH CAROLINA - 0.3%
North Carolina State, Highway, GO
5.000%, 05/01/15 (A) 250,000 279,678
------------
OHIO - 0.6%
Ohio State University, General
Receipts, Ser A, RB
5.250%, 12/01/11 400,000 406,600
Ohio State, Common Schools
Facilities, Ser B, GO
4.300%, 09/15/12 200,000 208,912
------------
615,512
------------
The accompanying notes are an integral part of the financial statements.
112 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2011
NATIONAL INTERMEDIATE TAX-FREE BOND FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
OREGON - 6.3%
Chemeketa, Community College
District, ETM, GO, FGIC Insured
5.500%, 06/01/12 $ 1,060,000 $ 1,102,358
Deschutes County, Administrative
School District No. 1, GO, AGM
School Board Guarantee Insured
5.000%, 12/15/11 100,000 101,777
Oregon State, Department of
Administrative Services, RB,
AGM Insured
5.000%, 09/01/11 150,000 150,558
Oregon State, Department of
Transportation, Highway User
Tax Revenue, Ser A, RB,
Prerefunded @ 100 (B)
5.000%, 11/15/14 140,000 159,947
Portland, Sewer System Revenue,
First Lien, Ser A, RB,
AGM Insured
5.000%, 06/15/14 1,000,000 1,121,510
First Lien, Ser A, RB,
National-RE Insured
5.000%, 06/01/14 490,000 548,741
Second Lien, Ser B, RB,
AGM Insured
5.000%, 06/15/23 (A) 1,160,000 1,272,021
Washington County, School District
Authority No. 15, GO, AGM
School Board Guarantee Insured
5.000%, 06/15/14 1,000,000 1,113,050
Yamill County, School District
Authority No. 29J, GO,
National-RE FGIC Insured
5.250%, 06/15/16 1,000,000 1,177,920
------------
6,747,882
------------
PENNSYLVANIA - 0.5%
Pennsylvania State, Refunding &
Projects, First Ser, GO,
National-RE Insured
5.250%, 02/01/14 500,000 556,160
------------
TEXAS - 8.7%
Denton, Utilities System Revenue,
RB, National-RE Insured
5.250%, 12/01/23 (A) 1,065,000 1,132,659
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
TEXAS - (CONTINUED)
Houston, Texas Utility System
Revenue, Combined First Lien,
Ser A, RB, National-RE Insured
5.250%, 05/15/14 $ 445,000 $ 496,780
First Lien, Ser A, RB, AGM Insured
5.250%, 11/15/17 1,150,000 1,368,868
Lamar Consolidated Independent
School District, Schoolhouse,
GO, PSF Insured
5.000%, 02/15/17 800,000 944,416
Lower Colorado River Authority, RB
5.000%, 05/15/21 (A) 935,000 1,049,304
5.000%, 05/15/22 (A) 805,000 883,158
5.000%, 05/15/23 (A) 95,000 103,147
RB, Prerefunded @ 100 (B)
5.000%, 05/15/19 5,000 6,024
North East Independent School
District, Ser A, GO, PSF Insured
5.000%, 08/01/17 500,000 593,345
San Antonio, Water Revenue,
RB, AGM Insured
5.500%, 05/15/15 (A) 500,000 518,870
RB, National-RE FGIC Insured
5.000%, 05/15/17 1,000,000 1,171,990
Texas State, University Systems
Financing Revenue, RB
5.250%, 03/15/21 (A) 1,000,000 1,139,880
------------
9,408,441
------------
UTAH - 1.5%
Utah State, Board of Regents
Auxiliary & Campus Facilities
Revenue, Ser A, RB,
National-RE Insured
5.000%, 04/01/17 (A) 1,500,000 1,643,595
------------
WASHINGTON - 6.0%
Energy Northwest, Electric Revenue,
Project No. 1, Ser A, RB,
AGM Insured
5.500%, 07/01/14 (A) 400,000 417,816
Project No. 1, Ser B, RB,
National-RE Insured
6.000%, 07/01/17 (A) 1,805,000 1,892,904
RB, AMBAC Insured
6.000%, 07/01/18 (A) 510,000 534,694
RB, AMBAC Insured,
Prerefunded @ 100, (B)
6.000%, 07/01/12 525,000 552,704
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 113
SCHEDULE OF INVESTMENTS
JULY 31, 2011
NATIONAL INTERMEDIATE TAX-FREE BOND FUND (CONCLUDED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
WASHINGTON - (CONTINUED)
King County, School District No. 210,
GO, School Board Guarantee
Insured, Prerefunded @ 100 (B)
5.000%, 06/01/12 $ 155,000 $ 161,150
Pierce County, GO, AMBAC Insured
5.125%, 08/01/16 (A) 1,375,000 1,567,555
Washington State,
Ser A, GO,
5.000%, 07/01/19 (A) 1,000,000 1,142,470
Variable Purpose, Ser 2003A,
GO, National-RE FGIC Insured,
Prerefunded @ 100 (B)
5.000%, 07/01/12 200,000 208,734
------------
6,478,027
------------
TOTAL MUNICIPAL BONDS
(Cost $97,512,937) 102,158,899
------------
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 4.0%
Fidelity Institutional Tax-Exempt
Portfolio 4,317,559 $ 4,317,559
------------
TOTAL REGISTERED INVESTMENT COMPANY
(Cost $4,317,559) 4,317,559
------------
TOTAL INVESTMENTS - 98.8%
(Cost $101,830,496) 106,476,458
------------
OTHER ASSETS & LIABILITIES, NET - 1.2% 1,261,313
------------
NET ASSETS - 100.0% $107,737,771
============
--------------------------------------------------------------------------------
(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, 2011.
AGM - ASSURED GUARANTY MUNICIPAL CORPORATION
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, 2011
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
07/31/11 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Municipal Bonds $102,158,899 $ -- $102,158,899 $ --
Registered Investment Company 4,317,559 4,317,559 -- --
------------ ------------ ------------ ------------
Total: $106,476,458 $ 4,317,559 $102,158,899 $ --
============ ============ ============ ============
The accompanying notes are an integral part of the financial statements.
114 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2011
SHORT TERM BOND FUND
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - 51.4%
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 4.3%
Comcast
5.300%, 01/15/14 $ 1,150,000 $ 1,265,843
Georgia-Pacific (A)
8.250%, 05/01/16 1,000,000 1,138,229
JC Penney
9.000%, 08/01/12 500,000 535,000
Macy's Retail Holdings
5.350%, 03/15/12 500,000 511,254
Staples
9.750%, 01/15/14 1,000,000 1,189,689
Time Warner Cable
5.400%, 07/02/12 1,000,000 1,042,795
------------
5,682,810
------------
CONSUMER STAPLES - 1.5%
Anheuser-Busch InBev
Worldwide
3.000%, 10/15/12 1,000,000 1,026,685
Coca-Cola
3.625%, 03/15/14 250,000 267,644
General Mills
6.000%, 02/15/12 500,000 514,693
Kraft Foods
6.250%, 06/01/12 183,000 191,721
------------
2,000,743
------------
ENERGY - 9.0%
ConocoPhillips
4.750%, 10/15/12 1,000,000 1,050,265
Energy Transfer Partners
6.000%, 07/01/13 1,000,000 1,079,440
8.500%, 04/15/14 650,000 757,932
Enterprise Products Operating,
Ser M
5.650%, 04/01/13 1,300,000 1,391,530
Kinder Morgan Energy Partners
5.000%, 12/15/13 1,132,000 1,226,011
Petrobras International Finance
3.875%, 01/27/16 1,000,000 1,036,957
Rockies Express Pipeline (A)
6.250%, 07/15/13 805,000 863,160
SeaRiver Maritime (B)
0.000%, 09/01/12 3,000,000 2,938,245
Transcontinental Gas Pipeline,
Ser B
7.000%, 08/15/11 500,000 501,077
Transocean
5.250%, 03/15/13 1,000,000 1,059,591
------------
11,904,208
------------
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - (CONTINUED)
--------------------------------------------------------------------------------
FINANCIALS - 13.4%
American International Group
3.650%, 01/15/14 $ 1,500,000 $ 1,544,301
BankAmerica Capital II, Ser 2
8.000%, 12/15/26 1,500,000 1,531,875
BB&T
2.050%, 04/28/14 1,250,000 1,273,049
BP Capital Markets
3.125%, 03/10/12 1,000,000 1,014,895
Capital One Financial Corp
2.125%, 07/15/14 775,000 778,646
Citigroup
4.750%, 05/19/15 1,500,000 1,609,129
Ford Motor Credit (D)
2.996%, 01/13/12 1,000,000 1,003,860
General Electric Capital Corp (D)
1.138%, 05/09/16 2,000,000 1,997,226
Goldman Sachs Group
5.700%, 09/01/12 1,000,000 1,049,318
HSBC Bank PLC (A)
2.000%, 01/19/14 1,500,000 1,522,278
John Deere Capital, MTN
5.400%, 10/17/11 510,000 515,381
JPMorgan Chase
5.125%, 09/15/14 500,000 540,667
4.750%, 05/01/13 1,000,000 1,060,119
Lehman Brothers Holdings,
MTN (C)
5.625%, 01/24/13 500,000 135,000
NB Capital Trust IV
8.250%, 04/15/27 200,000 204,750
WCI Finance/WEA Finance (A)
5.400%, 10/01/12 1,420,000 1,489,520
Wells Fargo
3.000%, 12/09/11 500,000 504,998
------------
17,775,012
------------
FOREIGN GOVERNMENT - 0.6%
Mexico Government
International Bond
5.875%, 02/17/14 750,000 832,125
------------
HEALTH CARE - 3.4%
Boston Scientific
5.450%, 06/15/14 1,000,000 1,097,095
Eli Lilly
3.550%, 03/06/12 500,000 509,501
Pfizer
4.450%, 03/15/12 500,000 512,492
Sanofi
1.625%, 03/28/14 750,000 764,616
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 115
SCHEDULE OF INVESTMENTS
JULY 31, 2011
SHORT TERM BOND FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - (CONTINUED)
--------------------------------------------------------------------------------
HEALTH CARE - (CONTINUED)
Wellpoint
6.800%, 08/01/12 $ 500,000 $ 529,191
6.000%, 02/15/14 475,000 529,824
Wyeth
5.500%, 03/15/13 500,000 538,434
------------
4,481,153
------------
INDUSTRIAL - 4.9%
Burlington Northern Santa Fe
5.900%, 07/01/12 1,560,000 1,630,025
CSX
5.300%, 02/15/14 1,000,000 1,096,730
L-3 Communications, Ser B
6.375%, 10/15/15 1,300,000 1,334,125
Northwest Airlines, Ser 02-1G
6.264%, 11/20/21 1,423,841 1,429,252
Union Pacific
5.450%, 01/31/13 935,000 998,417
------------
6,488,549
------------
INFORMATION TECHNOLOGY - 1.2%
International Business Machines
7.500%, 06/15/13 500,000 561,940
Xerox (D)
1.081%, 05/16/14 1,000,000 1,006,053
------------
1,567,993
------------
MATERIALS - 4.0%
Dow Chemical
4.850%, 08/15/12 1,000,000 1,041,411
Praxair
3.950%, 06/01/13 1,040,000 1,102,677
Rio Tinto Alcan
5.200%, 01/15/14 1,250,000 1,370,291
Teck Resources
7.000%, 09/15/12 1,743,000 1,845,832
------------
5,360,211
------------
TELECOMMUNICATION SERVICES - 5.5%
AT&T
5.875%, 08/15/12 1,250,000 1,316,429
Cellco Partnership/Verizon
Wireless Capital
5.550%, 02/01/14 2,000,000 2,208,480
Telefonica Emisiones SAU
3.992%, 02/16/16 1,500,000 1,506,411
Thomson Reuters
5.950%, 07/15/13 1,000,000 1,091,190
Verizon Communications, Inc.
1.950%, 03/28/14 1,200,000 1,230,401
------------
7,352,911
------------
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - (CONTINUED)
--------------------------------------------------------------------------------
UTILITIES - 3.6%
Consolidated Natural Gas
5.000%, 03/01/14 $ 1,000,000 $ 1,094,825
Exelon Generation
5.350%, 01/15/14 1,482,000 1,609,390
Firstenergy, Ser B
6.450%, 11/15/11 500,000 507,746
MidAmerican Energy Holdings,
5.875%, 10/01/12 500,000 528,944
Ser D
5.000%, 02/15/14 500,000 543,990
Southern California Edison
5.750%, 03/15/14 500,000 561,044
------------
4,845,939
------------
TOTAL CORPORATE OBLIGATIONS
(Cost $67,449,805) 68,291,654
------------
--------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS - 14.4%
--------------------------------------------------------------------------------
FHLMC Gold
6.000%, 01/01/13 39,815 42,525
6.000%, 09/01/13 9,912 10,646
6.000%, 04/01/14 21,933 23,308
6.000%, 05/01/14 91,504 97,257
6.000%, 05/01/14 20,589 22,373
6.000%, 05/01/14 15,683 17,042
6.000%, 05/01/14 11,640 12,648
6.000%, 07/01/14 84,846 89,184
6.000%, 10/01/16 80,831 87,985
6.000%, 04/01/17 282,396 307,918
6.000%, 04/01/29 80,841 89,970
6.000%, 04/01/38 464,515 515,083
5.500%, 07/01/15 225,049 242,997
5.500%, 03/01/17 88,304 94,879
5.500%, 12/01/17 8,516 9,211
5.500%, 02/01/18 105,976 114,409
5.500%, 11/01/18 10,103 10,914
5.500%, 10/01/32 598,988 654,274
5.500%, 12/01/34 385,322 420,887
5.000%, 10/01/18 305,167 327,437
5.000%, 07/01/20 131,336 142,022
5.000%, 06/01/25 727,775 781,075
FHLMC, ARM
4.983%, 06/01/39 573,970 612,141
2.657%, 03/01/35 214,789 227,313
2.652%, 11/01/35 1,442,534 1,519,105
2.569%, 10/01/36 1,554,581 1,632,505
2.489%, 01/01/34 294,274 308,463
2.489%, 12/01/34 1,491,461 1,564,508
FNMA
8.000%, 06/01/30 4,043 4,757
8.000%, 11/01/30 2,757 3,249
The accompanying notes are an integral part of the financial statements.
116 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2011
SHORT TERM BOND FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED
OBLIGATIONS - (CONTINUED)
--------------------------------------------------------------------------------
FNMA (continued)
6.500%, 06/01/16 39,416 43,271
6.500%, 07/01/16 $ 27,317 $ 29,989
6.500%, 11/01/16 25,515 28,011
6.500%, 01/01/17 29,141 31,991
6.500%, 02/01/17 10,911 11,979
6.500%, 04/01/17 41,960 46,064
6.500%, 07/01/17 36,610 40,191
6.000%, 04/01/16 136,584 148,428
6.000%, 04/01/16 307,177 333,239
6.000%, 05/01/16 320,898 348,726
6.000%, 05/01/16 130,568 141,646
6.000%, 06/01/16 16,039 17,430
6.000%, 08/01/16 29,191 31,723
6.000%, 10/01/16 71,824 78,052
6.000%, 05/01/18 205,748 223,590
5.500%, 07/01/14 83,003 89,999
5.500%, 09/01/14 123,526 133,937
5.500%, 08/01/15 286,114 310,229
5.500%, 12/01/16 35,940 38,992
5.500%, 01/01/17 259,146 281,150
5.500%, 09/01/17 363,321 392,093
5.500%, 09/01/17 42,331 45,952
5.500%, 10/01/17 60,405 65,188
5.500%, 11/01/17 101,714 109,703
5.500%, 12/01/17 61,585 66,496
5.500%, 02/01/18 7,291 7,928
5.500%, 04/01/18 16,089 17,496
5.500%, 10/01/18 18,913 20,530
5.500%, 12/01/18 695,295 754,333
5.500%, 09/01/34 775,566 846,787
5.500%, 01/01/35 500,656 546,788
5.000%, 07/01/14 22,041 23,680
5.000%, 05/01/18 17,922 19,378
5.000%, 06/01/18 67,580 73,068
FNMA, ARM
2.781%, 09/01/33 159,571 167,793
2.768%, 08/01/27 26,567 26,912
2.413%, 06/01/34 1,302,397 1,367,318
2.390%, 01/01/36 955,808 1,005,131
1.983%, 01/01/35 458,348 479,666
FNMA, CMO REMIC,
Ser 2002-18, Cl PC
5.500%, 04/25/17 99,465 103,832
GMNA, CMO
Ser 2004-43, Cl C (D)
5.008%, 12/16/25 500,000 537,062
------------
TOTAL U.S. GOVERNMENT AGENCY
MORTGAGE-BACKED OBLIGATIONS
(Cost $18,425,077) 19,071,856
------------
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES - 8.0%
--------------------------------------------------------------------------------
Banc of America
Commercial Mortgage,
Ser 2003-2, Cl A2
4.342%, 03/11/41 $ 13,068 $ 13,070
Ser 2005-1, Cl A3
4.877%, 11/10/42 44,658 44,734
Ser 2005-2, Cl A4 (D)
4.783%, 07/10/43 1,894,395 1,927,331
Bear Stearns Commercial
Mortgage Securities,
Ser 2003-T12, Cl A3 (D)
4.240%, 08/13/39 393,742 397,601
Ser 2004-PWR5, Cl A3
4.565%, 07/11/42 503,448 503,760
Chase Mortgage Finance,
Ser 2003-S10, Cl A1
4.750%, 11/25/18 472,688 487,207
Ser 2004-S1, CI A3
5.500%, 02/25/19 287,380 298,283
Citicorp Mortgage Securities,
Ser 2003-10, Cl A1
4.500%, 11/25/18 523,757 537,176
DBUBS Mortgage Trust,
Ser 2011-LC1A, Cl A1 (A)
3.742%, 11/10/46 1,337,984 1,380,770
Greenwich Capital Commercial
Funding,
Ser 2004-GG1, Cl A5
4.883%, 06/10/36 2,442 2,440
Master Asset Securitization Trust,
Ser 2003-10, Cl 2A1
4.500%, 11/25/13 52,807 53,765
Merrill Lynch Mortgage Investors
Trust, Ser 2005-A2, Cl A4 (D)
2.622%, 02/25/35 180,267 173,735
Morgan Stanley Capital I,
Ser 2003-T11, Cl A4
5.150%, 06/13/41 310,000 327,705
Morgan Stanley Dean Witter
Capital I,
Ser 2001-TOP3, Cl A4
6.390%, 07/15/33 79,206 79,178
Ser 2002-IQ2, Cl A4
5.740%, 12/15/35 477,009 487,867
Residential Funding Mortgage
Securities I, Ser 2004-S3, Cl A1
4.750%, 03/25/19 858,314 879,157
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 117
SCHEDULE OF INVESTMENTS
JULY 31, 2011
SHORT TERM BOND FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES - (CONTINUED)
--------------------------------------------------------------------------------
Wachovia Bank Commercial
Mortgage Trust,
Ser 2004-C15, Cl A2
4.039%, 10/15/41 $ 452,242 $ 451,922
Ser 2005-C17, Cl A2
4.782%, 03/15/42 376,147 376,635
Washington Mutual,
Ser 2005-8, Cl 1A8
5.500%, 10/25/35 133,510 120,718
Wells Fargo Mortgage Backed
Securities Trust,
Ser 2003-13, Cl A1
4.500%, 11/25/18 1,010,291 1,033,951
Ser 2003-M, Cl A1 (D)
4.688%, 12/25/33 458,012 461,971
Ser 2004-2, Cl A1
5.000%, 01/25/19 534,097 551,524
------------
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $10,540,228) 10,590,500
------------
--------------------------------------------------------------------------------
ASSET-BACKED SECURITIES - 17.4%
--------------------------------------------------------------------------------
Ally Master Owner Trust,
Ser 2011-1, Cl A2
2.150%, 01/15/16 2,000,000 2,035,431
Avis Budget Rental Car Funding
AESOP, Ser 2011-1A, Cl A (A)
1.850%, 09/20/13 1,500,000 1,511,325
BMW Vehicle Owner Trust,
Ser 2010-A, Cl A3
1.390%, 04/25/13 1,000,000 1,006,704
Centerpoint Energy Transition Bond,
Ser 2005-A, Cl A2
4.970%, 08/01/14 238,912 243,040
Ser 2005-A, Cl A3
5.090%, 08/01/15 2,200,000 2,367,706
Ser 2008-A, Cl A1
4.192%, 02/01/20 1,459,610 1,579,369
Chase Issuance Trust,
Ser 2005-A2, Cl A2 (D)
0.257%, 12/15/14 1,500,000 1,499,329
FPL Recovery Funding,
Ser 2007-A, Cl A2
5.044%, 08/01/15 851,541 889,513
Hertz Vehicle Financing,
Ser 2011-1A, Cl A1 (A)
2.200%, 03/25/16 1,400,000 1,408,896
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
ASSET-BACKED SECURITIES - (CONTINUED)
--------------------------------------------------------------------------------
Massachusetts RRB Special
Purpose Trust,
Ser 2001-1, Cl A
6.530%, 06/01/15 $ 989,506 $ 1,044,971
Ser 2005-1, Cl A3
4.130%, 09/15/13 155,132 155,862
PG&E Energy Recovery Funding,
Ser 2005-1, Cl A5
4.470%, 12/25/14 1,000,000 1,041,908
Ser 2005-2, Cl A2
5.030%, 03/25/14 289,743 294,465
PSE&G Transition Funding,
Ser 2005-1, Cl A2
4.340%, 06/16/14 49,120 50,011
Public Service New Hampshire
Funding,
Ser 2001-1, Cl A3
6.480%, 05/01/15 780,128 819,781
SLM Student Loan Trust, (D)
Ser 2011-2, Cl A1
0.787%, 11/25/27 1,972,810 1,970,297
Ser 2011-A, Cl A1 (A) (D)
1.187%, 10/15/24 2,253,949 2,260,246
Volkswagen Auto Loan Enhanced
Trust, Ser 2011-1, Cl A3
1.220%, 06/22/15 1,500,000 1,511,053
World Omni Auto Receivables
Trust, Ser 2011-A, Cl A4
1.910%, 04/15/16 1,425,000 1,450,217
------------
TOTAL ASSET-BACKED SECURITIES
(Cost $23,057,802) 23,140,124
------------
--------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS - 2.8%
--------------------------------------------------------------------------------
U.S. Treasury Notes
1.500%, 06/30/16 750,000 755,745
1.375%, 09/15/12 2,000,000 2,024,062
1.000%, 10/31/11 1,000,000 1,002,031
------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $3,750,776) 3,781,838
------------
--------------------------------------------------------------------------------
TAXABLE MUNICIPAL BONDS - 2.4%
--------------------------------------------------------------------------------
CALIFORNIA - 2.4%
California State, GO (D)
5.650%, 04/01/39 1,500,000 1,610,970
University of California Revenue,
Build America Bonds,
Taxable, RB (D)
1.988%, 05/15/50 1,500,000 1,528,440
------------
TOTAL TAXABLE MUNICIPAL BONDS
(Cost $3,079,298) 3,139,410
------------
The accompanying notes are an integral part of the financial statements.
118 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2011
SHORT TERM BOND FUND (CONCLUDED)
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 2.1%
--------------------------------------------------------------------------------
Dreyfus Cash Management 2,752,054 $ 2,752,054
-------------
TOTAL REGISTERED INVESTMENT COMPANY
(Cost $2,752,054) 2,752,054
-------------
TOTAL INVESTMENTS - 98.5%
(Cost $129,055,040) 130,767,436
-------------
OTHER ASSETS & LIABILITIES, NET - 1.5% 1,937,658
-------------
NET ASSETS - 100.0% $ 132,705,094
=============
--------------------------------------------------------------------------------
(A) SECURITIES SOLD WITHIN THE TERMS OF A PRIVATE PLACEMENT MEMORANDUM, EXEMPT
FROM REGISTRATION UNDER SECTION 3(A), 4(2) OR 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, 2011 WAS $11,574,424 AND REPRESENTED 8.7% 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, 2011, THE VALUE OF THESE SECURITIES AMOUNTED TO
$135,000, WHICH REPRESENTS 0.1% OF NET ASSETS.
(D) FLOATING RATE SECURITY. RATE DISCLOSED IS AS OF JULY 31, 2011.
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
GO - GENERAL OBLIGATION
MTN - MEDIUM TERM NOTE
PLC - PUBLIC LIABILITY COMPANY
RB - REVENUE BOND
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, 2011
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
07/31/11 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Corporate Obligations $ 68,291,654 $ -- $ 68,291,654 $ --
U.S. Government Agency Mortgage-Backed Obligations 19,071,856 -- 19,071,856 --
Mortgage-Backed Securities 10,590,500 -- 10,590,500 --
Asset-Backed Securities 23,140,124 -- 23,140,124 --
U.S. Treasury Obligations 3,781,838 -- 3,781,838 --
Taxable Municipal Bonds 3,139,410 -- 3,139,410 --
Registered Investment Company 2,752,054 2,752,054 -- --
------------ ------------ ------------ ------------
Total: $130,767,436 $ 2,752,054 $128,015,382 $ --
============ ============ ============ ============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 119
SCHEDULE OF INVESTMENTS
JULY 31, 2011
WISCONSIN TAX-EXEMPT FUND
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - 98.9%
--------------------------------------------------------------------------------
MASSACHUSETTS - 0.8%
Massachusetts State Housing
Finance Agency, Multi-Family
Housing Authority, ETM, RB,
HUD Section 8
7.000%, 04/01/21 (A) $ 910,000 $ 1,206,032
---------------
PUERTO RICO - 24.8%
Commonwealth of Puerto Rico,
Public Improvement,
GO, AGM Insured, Unrefunded
Balance
5.250%, 07/01/27 (A) 755,000 755,076
5.125%, 07/01/30 (A) 1,215,000 1,208,390
GO, National-RE Insured
5.650%, 07/01/15 2,240,000 2,467,024
Ser A, GO, National-RE Insured
5.500%, 07/01/20 1,020,000 1,082,618
Ser A, GO, XLCA Insured
5.500%, 07/01/17 1,130,000 1,230,807
Puerto Rico Commonwealth
Highway & Transportation
Authority, Grant Anticipation
Revenue, RB, National-RE Insured
5.000%, 09/15/20 (A) 780,000 787,379
Highway Revenue, Ser AA, RB,
AGM Insured (A)
4.950%, 07/01/26 1,500,000 1,512,840
Transportation Revenue, Ser E,
RB, AGM Insured
5.500%, 07/01/23 1,120,000 1,198,848
Transportation Revenue,
Ser N, RB
5.500%, 07/01/23 1,120,000 1,165,662
Puerto Rico Commonwealth
Infrastructure Financing
Authority, Special Tax
Revenue, Ser A,
BHAC Credit, FGIC Insured
5.500%, 07/01/22 1,385,000 1,542,530
FGIC Insured
5.500%, 07/01/21 945,000 1,000,471
Puerto Rico Electric Power Authority,
Ser TT, RB
5.000%, 07/01/22 (A) 300,000 307,230
5.000%, 07/01/37 (A) 1,700,000 1,592,169
Ser UU, RB, AGM Insured
5.000%, 07/01/20 (A) 1,000,000 1,065,690
Ser WW, RB
5.500%, 07/01/38 (A) 2,500,000 2,509,850
Ser XX, RB (A)
4.625%, 07/01/25 2,100,000 2,050,440
--------------------------------------------------------------------------------
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 $ 862,039
Ser C, GO, CIFG Insured
5.250%, 08/01/23 1,000,000 1,018,730
Puerto Rico Public Buildings
Authority, Revenue Refunding,
Government Facilities, Ser H,
RB, AMBAC, Commonwealth
Guaranteed
5.500%, 07/01/17 1,250,000 1,361,512
Ser L, RB, XLCA, Commonwealth
Guaranteed
5.500%, 07/01/21 500,000 525,310
Puerto Rico Sales Tax Financing,
Corporate Sales Tax Revenue,
First Sub-Ser A, RB
5.500%, 08/01/37 (A) 2,500,000 2,528,725
5.750%, 08/01/37 (A) 1,400,000 1,437,870
6.375%, 08/01/39 (A) 3,000,000 3,199,890
6.000%, 08/01/42 (A) 1,000,000 1,044,470
6.500%, 08/01/44 (A) 2,000,000 2,139,960
---------------
35,595,530
---------------
VIRGIN ISLANDS - 5.4%
Virgin Islands Public Finance
Authority, Gross Receipts Taxes
Loan Notes, RB, National-RE
FGIC Insured
5.000%, 10/01/21 (A) 2,000,000 2,063,140
5.000%, 10/01/23 (A) 1,000,000 1,014,000
5.000%, 10/01/24 (A) 2,500,000 2,521,325
5.000%, 10/01/27 (A) 2,000,000 1,984,540
Virgin Islands Water & Power
Authority, Water Systems
Revenue, Refunding, Asset
Guarantee, RB, National-RE-
IBC Bank MBIA Insured
5.250%, 07/01/12 (A) 85,000 85,246
---------------
7,668,251
---------------
WISCONSIN - 67.9%
Appleton, Redevelopment Authority,
Fox Cities Performing Arts
Project, Ser A, RB, LOC
Associated Bank N.A.
4.750%, 09/01/17 (A) 360,000 360,544
4.850%, 09/01/19 (A) 435,000 435,513
The accompanying notes are an integral part of the financial statements.
120 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2011
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 $ 516,265
5.050%, 06/01/19 (A) 1,030,000 1,056,924
5.200%, 06/01/22 (A) 500,000 512,640
5.000%, 06/01/23 (A) 925,000 945,406
Beloit, Community Development
Authority, Lease Revenue, RB
4.700%, 03/01/21 (A) 345,000 364,765
4.750%, 03/01/22 (A) 300,000 314,838
5.000%, 03/01/25 (A) 650,000 681,499
Burlington, Community
Development Authority,
Lease Revenue, RB
4.000%, 04/01/16 (A) 200,000 211,506
4.100%, 04/01/17 (A) 750,000 779,700
Cudahy, Community Development
Authority, Redevelopment Lease
Revenue, RB
4.000%, 06/01/12 100,000 101,947
3.650%, 06/01/13 200,000 205,636
4.250%, 06/01/17 (A) 500,000 529,030
Delafield, Community Development
Authority, Redevelopment
Revenue, St. Johns
Northwestern Military, RB
4.150%, 06/01/25 (A) 250,000 261,383
4.250%, 06/01/26 (A) 330,000 345,424
4.600%, 06/01/30 (A) 600,000 627,246
Eau Claire, Housing Authority,
Housing Revenue, London Hill
Townhouses Project, Ser A, RB
6.250%, 05/01/15 290,000 281,868
Glendale, Community Development
Authority, Lease Revenue,
Bayshore Public Parking Facility,
Ser A, RB
5.000%, 10/01/24 (A) 1,500,000 1,540,905
4.750%, 10/01/27 (A) 1,000,000 1,013,880
Tax Increment District No. 7, RB
4.350%, 09/01/16 (A) 1,000,000 1,020,610
4.750%, 09/01/17 (A) 1,250,000 1,254,475
4.500%, 09/01/18 (A) 2,000,000 2,028,780
4.875%, 09/01/19 (A) 1,000,000 1,003,670
Tax Increment District No. 7,
Ser B, RB
3.850%, 09/01/20 (A) 2,250,000 2,301,772
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
WISCONSIN - (CONTINUED)
Green Bay, Redevelopment
Authority, Bellin Memorial
Hospital Project, RB
6.000%, 12/01/29 (A) $ 1,000,000 $ 1,038,890
6.150%, 12/01/32 (A) 1,000,000 1,038,680
Ser A
5.500%, 02/15/21 (A) 400,000 402,496
Lease Revenue, Refunding,
Convention Center Project, RB
4.200%, 06/01/25 (A) 1,000,000 1,016,560
4.300%, 06/01/29 (A) 1,000,000 1,009,500
Madison, Community
Development Authority
Revenue, Wisconsin
Alumni Research Fund
Project, RB
5.000%, 10/01/27 (A) 925,000 1,021,339
5.000%, 10/01/28 (A) 250,000 274,178
5.000%, 10/01/34 (A) 4,500,000 4,733,595
Middleton, Community
Development Authority,
Lease Revenue, Ser A, RB
4.350%, 10/01/12 (A) 1,630,000 1,708,403
4.550%, 10/01/12 (A) 500,000 525,210
Milwaukee, Redevelopment
Authority,
Summerfest Project, RB
4.700%, 08/01/15 (A) 500,000 500,000
4.800%, 08/01/16 (A) 500,000 500,000
4.850%, 08/01/17 (A) 500,000 500,000
4.950%, 08/01/20 (A) 1,250,000 1,250,000
4.500%, 08/01/23 (A) 110,000 113,807
4.700%, 08/01/25 (A) 110,000 114,156
5.000%, 08/01/30 (A) 2,000,000 2,078,780
Milwaukee, Redevelopment
Authority, Development
Revenue, Refunding,
Marquette University Project,
RB, XLCA Insured
4.150%, 11/01/16 (A) 1,275,000 1,296,802
4.250%, 11/01/17 (A) 1,000,000 1,013,160
4.350%, 11/01/18 (A) 500,000 505,045
Milwaukee, Redevelopment
Authority, Lease Revenue,
Milwaukee Public Schools,
Congress School, Ser A, RB
4.500%, 08/01/20 (A) 500,000 505,320
4.600%, 08/01/22 (A) 500,000 509,125
RB, AMBAC Insured
3.250%, 08/01/11 500,000 500,000
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 121
SCHEDULE OF INVESTMENTS
JULY 31, 2011
WISCONSIN TAX-EXEMPT FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
WISCONSIN - (CONTINUED)
3.650%, 08/01/13 $ 2,000,000 $ 2,090,220
3.800%, 08/01/14 (A) 1,000,000 1,042,410
4.000%, 08/01/16 (A) 1,000,000 1,035,530
4.100%, 08/01/17 (A) 1,000,000 1,027,790
4.125%, 08/01/18 (A) 2,010,000 2,052,672
Milwaukee, Redevelopment
Authority, Redevelopment
Revenue, YMCA Greater
Milwaukee, Ser A, RB, LOC
Marshall & Ilsley Bank
5.250%, 06/01/19 (A) 360,000 360,169
5.300%, 06/01/29 (A) 1,800,000 1,781,442
Ser B, RB, LOC FHLB
5.150%, 06/01/19 (A) 175,000 178,342
5.200%, 06/01/29 (A) 355,000 352,554
Monroe, Redevelopment Authority,
Development Revenue,
Monroe Clinic, Inc., RB
5.875%, 02/15/39 (A) 1,350,000 1,351,188
Neenah, Community Development
Authority, Lease Revenue,
Ser A, RB
4.300%, 12/01/20 (A) 1,000,000 1,023,930
5.125%, 12/01/23 (A) 1,000,000 1,065,470
4.625%, 12/01/28 (A) 600,000 615,528
4.700%, 12/01/28 (A) 1,250,000 1,268,763
4.750%, 12/01/32 (A) 400,000 404,912
Onalaska, Community Development
Authority, Lease Revenue, RB
3.650%, 10/01/12 (A) 100,000 102,301
3.900%, 10/01/14 (A) 100,000 103,395
4.000%, 10/01/15 100,000 103,262
4.150%, 10/01/16 (A) 200,000 206,042
Oshkosh, Housing Authority, VNA
Apartments Inc. Project, RB,
GNMA Collateralized
5.450%, 09/20/17 (A) 90,000 90,046
5.750%, 09/20/38 (A) 1,260,000 1,260,403
Sheboygan, Housing Authority,
Multifamily Revenue Refunding,
Lake Shore Apartments Project,
Ser A, RB, GNMA Collateralized
5.100%, 11/20/26 (A) 1,000,000 1,000,200
Southeast Wisconsin Professional
Baseball Park District, League,
Capital Appreciation, COP, ETM,
National-RE Insured
0.000%, 12/15/15 970,000 921,025
0.000%, 12/15/17 1,000,000 885,450
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
WISCONSIN - (CONTINUED)
Sales Tax Revenue, Refunding,
Ser A, RB, National-RE Insured
5.500%, 12/15/11 $ 525,000 $ 534,287
5.500%, 12/15/18 250,000 302,037
5.500%, 12/15/19 2,000,000 2,411,820
5.500%, 12/15/26 4,510,000 4,884,330
5.100%, 12/15/29 (A) 285,000 291,854
Sun Prairie, Community
Development Authority,
Lease Revenue, RB
4.400%, 08/01/20 (A) 150,000 151,828
4.500%, 08/01/21 (A) 150,000 151,710
Tax Incremental District
No. 8, RB
4.300%, 08/01/21 (A) 975,000 986,778
4.350%, 08/01/22 (A) 975,000 982,469
Waukesha, Redevelopment
Authority, Avalon Square
Project, Ser A, RB, GNMA
Collateralized
5.000%, 06/20/21 (A) 1,000,000 1,020,950
Waukesha, Redevelopment
Authority, Weldall
Manufacturing Inc. Project,
RB, LOC Harris N.A.
4.200%, 12/01/24 (A) 150,000 151,883
4.500%, 12/01/30 (A) 1,200,000 1,218,660
West Bend, Redevelopment
Authority, Lease Revenue, RB
4.500%, 10/01/23 (A) 250,000 255,603
4.550%, 10/01/24 (A) 250,000 255,018
4.600%, 10/01/25 (A) 150,000 152,663
4.650%, 10/01/28 (A) 250,000 252,435
Weston, Community Development
Authority, Lease Revenue,
Ser A, RB
4.100%, 10/01/16 (A) 500,000 521,830
4.250%, 10/01/17 (A) 200,000 206,868
4.350%, 10/01/18 (A) 500,000 507,915
4.400%, 10/01/18 (A) 500,000 514,390
5.250%, 10/01/20 (A) 445,000 464,567
4.500%, 10/01/21 (A) 100,000 104,143
4.700%, 10/01/21 (A) 1,230,000 1,258,942
4.625%, 10/01/25 (A) 825,000 829,125
Guaranty Agreement:
Associated Trust Co.
4.450%, 10/01/19 (A) 500,000 506,035
Ser B, RB
4.750%, 10/01/22 (A) 130,000 132,475
4.750%, 10/01/23 (A) 140,000 141,960
The accompanying notes are an integral part of the financial statements.
122 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2011
WISCONSIN TAX-EXEMPT FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
WISCONSIN - (CONTINUED)
Winnebago County, Housing
Authority, Housing Revenue,
Ser A, RB
6.875%, 03/01/12 (A) $ 25,000 $ 25,090
7.125%, 03/01/22 (A) 380,000 381,372
Wisconsin Center District,
Capital Appreciation, Senior
Dedicated Tax Revenue, Ser A,
RB, National-RE Insured
0.000%, 12/15/26 2,500,000 1,166,625
Ser 1998A, Junior Dedicated
Tax Revenue, RB, AGM Insured
5.250%, 12/15/23 2,585,000 2,903,343
Wisconsin Dells, Community
Development Authority,
Lease Revenue, RB
5.000%, 03/01/22 (A) 1,500,000 1,538,775
5.000%, 09/01/24 (A) 110,000 110,028
4.600%, 03/01/25 (A) 1,200,000 1,184,460
Ser A
4.300%, 03/01/22 (A) 225,000 223,670
4.450%, 03/01/25 (A) 300,000 291,645
Wisconsin Housing & Economic
Development Authority,
Multi-Family Housing,
Ser A, RB
GO of Authorization
5.375%, 11/01/30 (A) 2,145,000 2,181,486
Ser A, RB (C)
4.250%, 12/01/35 (A) 1,500,000 1,525,470
Ser B, RB,
GO of Authorization
4.300%, 05/01/27 (A) 1,000,000 962,250
4.400%, 05/01/37 (A) 500,000 446,465
Ser E, RB, GO of Authorization
4.700%, 11/01/25 (A) 275,000 278,751
4.900%, 11/01/35 (A) 1,650,000 1,604,246
Wisconsin Housing Finance
Authority, RB, FHA
Mortgages Insured,
Prerefunded 12/01/17 @ 100 (B)
6.100%, 12/01/17 925,000 1,076,774
RB, National-RE FHA
Mortgages Insured,
Prerefunded 12/01/17 @ 100 (B)
6.100%, 12/01/17 875,000 1,018,570
---------------
97,285,911
---------------
TOTAL MUNICIPAL BONDS
(Cost $139,260,336) 141,755,724
---------------
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 1.9%
--------------------------------------------------------------------------------
TFIT Tax-Free Cash Reserve
Portfolio 2,714,308 $ 2,714,308
---------------
TOTAL REGISTERED INVESTMENT
COMPANY
(Cost $2,714,308) 2,714,308
---------------
TOTAL INVESTMENTS - 100.8%
(Cost $141,974,644) 144,470,032
---------------
OTHER ASSETS & LIABILITIES, NET - (0.8)% (1,092,077)
---------------
NET ASSETS - 100.0% $ 143,377,955
===============
--------------------------------------------------------------------------------
(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) FLOATING RATE SECURITY. RATE DISCLOSED IS AS OF JULY 31, 2011.
AGM - ASSURED GUARANTY MUNICIPAL CORPORATION
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
RB - REVENUE BOND
SER - SERIES
XLCA - XL CAPITAL ASSURANCE
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 123
SCHEDULE OF INVESTMENTS
JULY 31, 2011
WISCONSIN TAX-EXEMPT FUND (CONCLUDED)
A summary of the inputs used to value the Fund's net assets as of July 31, 2011
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
07/31/11 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Municipal Bonds $141,755,724 $ -- $141,755,724 $ --
Registered Investment Company 2,714,308 2,714,308 -- --
------------ ------------ ------------ ------------
Total: $144,470,032 $ 2,714,308 $141,755,724 $ --
============ ============ ============ ============
The accompanying notes are an integral part of the financial statements.
124 HIGHMARK(R) FUNDS
This Page Left Blank Intentionally.
HIGHMARK(R) FUNDS 125
STATEMENTS OF ASSETS AND LIABILITIES
JULY 31, 2011
COGNITIVE
BALANCED VALUE
FUND FUND
------------- -------------
ASSETS:
Investments, at Value + ......................................................... $ 23,592,681 $ 92,519,747
Repurchase Agreements, at Value + ............................................... 1,935,003 843,830
Cash ............................................................................ -- --
Receivable for Investments Sold ................................................. 285,307 3,187,732
Receivable for Fund Shares Sold ................................................. 24,445 1,463,119
Accrued Income .................................................................. 72,025 50,554
Prepaid Expenses ................................................................ 24,148 19,384
Reclaims Receivable ............................................................. 162 1,196
Deferred Compensation ........................................................... 1,887 7,025
Due from Adviser, net ........................................................... -- --
------------- -------------
TOTAL ASSETS ................................................................. 25,935,658 98,092,587
------------- -------------
LIABILITIES:
Payable for Investments Purchased ............................................... -- 3,445,608
Payable for Fund Shares Redeemed ................................................ 293,335 --
Investment Adviser Fees Payable ................................................. 3,576 61,967
Administration Fees Payable ..................................................... 3,363 12,520
Chief Compliance Officer Fees Payable ........................................... 334 334
Custodian Fees Payable .......................................................... 140 522
Audit Fees Payable .............................................................. 26,140 24,182
Deferred Compensation Payable ................................................... 1,887 7,025
Shareholder Servicing Fees Payable .............................................. 3,268 629
Transfer Agent Fees Payable ..................................................... 3,441 4,542
Printing Fees Payable ........................................................... 1,176 4,092
Trustees Fees Payable ........................................................... 150 523
Accrued Distribution Fees ....................................................... 2,214 719
Variation Margin Payable ........................................................ -- --
Accrued Expenses and Other Payables ............................................. 3,740 4,404
------------- -------------
TOTAL LIABILITIES ............................................................ 342,764 3,567,067
------------- -------------
NET ASSETS ................................................................ $ 25,592,894 $ 94,525,520
============= =============
NET ASSETS:
Paid-in Capital (unlimited authorized--no par value) ............................ $ 22,597,325 $ 92,647,773
Undistributed Net Investment Income/(Accumulated Net Investment Loss) ........... 12,964 260,195
Accumulated Net Realized Gain (Loss) on Investments, Written Option Contracts and
Futures Contracts ............................................................ (1,076,897) (2,858,994)
Net Unrealized Appreciation (Depreciation) on Investments and Futures
Contracts ..................................................................... 4,059,502 4,476,546
------------- -------------
NET ASSETS ................................................................ $ 25,592,894 $ 94,525,520
============= =============
+ Cost of Investments and Repurchase Agreements ................................. $ 21,468,182 $ 88,887,031
* 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.
126 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 + ................. $ 56,098,618 $ 89,935,398 $ 18,685,318 $17,916,356 $450,428,457 $ 23,554,230
Repurchase Agreements, at Value + ....... 952,661 184,948 -- -- -- --
Cash .................................... 64,000* -- 8,000* -- -- --
Receivable for Investments Sold ......... -- 348,887 -- 308,300 2,834,502 --
Receivable for Fund Shares Sold ......... 26,861 32,217 93,761 -- 769,692 84,727
Accrued Income .......................... 66,157 23,811 27,191 12,124 63,987 4,988
Prepaid Expenses ........................ 23,427 19,564 22,002 20,946 32,873 19,377
Reclaims Receivable ..................... -- 609 -- 739 -- --
Deferred Compensation ................... 4,425 6,728 1,383 1,505 33,518 1,804
Due from Adviser, net ................... -- -- 2,567 -- -- --
------------ ------------ ------------ ----------- ------------ ------------
TOTAL ASSETS ......................... 57,236,149 90,552,162 18,840,222 18,259,970 454,163,029 23,665,126
------------ ------------ ------------ ----------- ------------ ------------
LIABILITIES:
Payable for Investments Purchased ....... -- -- -- -- 3,463,611 --
Payable for Fund Shares Redeemed ........ 29,329 30,000 -- 957 354,885 --
Investment Adviser Fees Payable ......... 23,946 56,361 -- 2,728 279,840 12,711
Administration Fees Payable ............. 7,886 11,990 2,465 2,682 59,733 3,214
Chief Compliance Officer Fees Payable ... 334 334 334 334 334 334
Custodian Fees Payable .................. 329 500 103 112 2,491 134
Audit Fees Payable ...................... 24,003 24,173 23,771 23,795 25,631 23,786
Deferred Compensation Payable ........... 4,425 6,728 1,383 1,505 33,518 1,804
Shareholder Servicing Fees Payable ...... 5,946 349 2,286 1,211 55,569 2,710
Transfer Agent Fees Payable ............. 3,507 4,491 5,996 1,528 49,743 2,481
Printing Fees Payable ................... 2,793 4,427 762 894 14,696 755
Trustees Fees Payable ................... 364 567 97 114 1,877 96
Accrued Distribution Fees ............... 1,301 651 5,209 27 82,907 3,837
Variation Margin Payable ................ 6,720 -- 840 -- -- --
Accrued Expenses and Other Payables ..... 3,291 4,154 2,355 2,336 7,698 2,217
------------ ------------ ------------ ----------- ------------ ------------
TOTAL LIABILITIES .................... 114,174 144,725 45,601 38,223 4,432,533 54,079
------------ ------------ ------------ ----------- ------------ ------------
NET ASSETS ........................ $ 57,121,975 $ 90,407,437 $ 18,794,621 $18,221,747 $449,730,496 $ 23,611,047
============ ============ ============ =========== ============ ============
NET ASSETS:
Paid-in Capital (unlimited
authorized--no par value) ............ $ 73,358,374 $ 77,143,182 $ 25,610,500 $16,596,519 $337,595,691 $ 19,672,112
Undistributed Net Investment
Income/(Accumulated Net
Investment Loss) ..................... 10,804 (60,079) 1,714 48,166 -- --
Accumulated Net Realized Gain
(Loss) on Investments,
Written Option Contracts and
Futures Contracts .................... (19,425,707) (14,874,589) (9,180,467) (942,898) 9,447,171 842,594
Net Unrealized Appreciation
(Depreciation) on Investments
and Futures Contracts ................ 3,178,504 28,198,923 2,362,874 2,519,960 102,687,634 3,096,341
------------ ------------ ------------ ----------- ------------ ------------
NET ASSETS ........................ $ 57,121,975 $ 90,407,437 $ 18,794,621 $18,221,747 $449,730,496 $ 23,611,047
============ ============ ============ =========== ============ ============
+ Cost of Investments and Repurchase
Agreements ............................ $ 53,843,684 $ 61,921,423 $ 16,317,751 $15,396,396 $347,740,823 $ 20,457,889
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 127
STATEMENTS OF ASSETS AND LIABILITIES
JULY 31, 2011
COGNITIVE
BALANCED VALUE
FUND FUND
-------------- --------------
FIDUCIARY SHARES:
Net Assets ................................................... $ 18,267,117 $ 5,075,223
Shares of beneficial interest outstanding .................... 1,311,267 441,281
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE (A) .... $ 13.93 $ 11.50
============== ==============
CLASS A SHARES:
Net Assets ................................................... $ 6,341,488 $ 961,056
Shares of beneficial interest outstanding .................... 456,264 83,533
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE (A) .............. $ 13.90 $ 11.51
-------------- --------------
Maximum Offering Price Per Share (B) ...................... $ 14.71 $ 12.18
============== ==============
CLASS B SHARES:
Net Assets ................................................... $ 130,321 N/A
Shares of beneficial interest outstanding .................... 9,405 N/A
NET ASSET VALUE AND OFFERING PRICE PER SHARE (A) ................ $ 13.86 N/A
============== ==============
CLASS C SHARES:
Net Assets ................................................... $ 853,968 $ 567,831
Shares of beneficial interest outstanding .................... 61,833 50,693
NET ASSET VALUE AND OFFERING PRICE PER SHARE (A) ................ $ 13.81 $ 11.20
============== ==============
CLASS M SHARES:
Net Assets ................................................... N/A $ 87,921,410
Shares of beneficial interest outstanding .................... N/A 7,639,793
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE (A) .... N/A $ 11.51
============== ==============
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
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 ...................................... $ 53,369,484 $ 1,980,407 $ 5,532,039 $18,182,021 $215,698,880 $12,477,289
Shares of beneficial interest outstanding ....... 6,285,675 176,852 600,827 874,109 9,439,615 401,988
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE
PER SHARE (A) ................................... $ 8.49 $ 11.20 $ 9.21 $ 20.80 $ 22.85 $ 31.04
============ =========== =========== =========== ============ ===========
CLASS A SHARES:
Net Assets ...................................... $ 3,027,452 $ 1,973,765 $ 9,259,221 $ 12,601 $195,872,031 $ 9,000,251
Shares of beneficial interest outstanding ....... 357,343 179,766 1,008,553 609 8,624,125 291,578
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
(A) .............................................. $ 8.47 $ 10.98 $ 9.18 $ 20.71 $ 22.71 $ 30.87
------------ ----------- ----------- ----------- ------------ -----------
Maximum Offering Price Per Share (B) ......... $ 8.96 $ 11.62 $ 9.71 $ 21.92 $ 24.03 $ 32.67
============ =========== =========== =========== ============ ===========
CLASS B SHARES:
Net Assets ...................................... $ 85,532 N/A $ 1,572,309 N/A $ 5,579,204 N/A
Shares of beneficial interest outstanding ....... 10,320 N/A 170,764 N/A 269,462 N/A
NET ASSET VALUE AND OFFERING PRICE PER SHARE (A) ... $ 8.29 N/A $ 9.21 N/A $ 20.70 N/A
============ =========== =========== =========== ============ ===========
CLASS C SHARES:
Net Assets ...................................... $ 639,507 $ 271,742 $ 2,431,052 $ 27,125 $ 32,580,381 $ 2,133,507
Shares of beneficial interest outstanding ....... 77,573 25,503 266,124 1,317 1,554,729 69,976
NET ASSET VALUE AND OFFERING PRICE PER SHARE (A) ... $ 8.24 $ 10.66 $ 9.14 $ 20.60 $ 20.96 $ 30.49
============ =========== =========== =========== ============ ===========
CLASS M SHARES:
Net Assets ...................................... N/A $86,181,523 N/A N/A N/A N/A
Shares of beneficial interest outstanding ....... N/A 7,690,056 N/A N/A N/A N/A
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE
PER SHARE (A) ................................... N/A $ 11.21 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, 2011
INTERNATIONAL LARGE CAP
OPPORTUNITIES GROWTH
FUND FUND
------------- -------------
ASSETS:
Investments, at Value + ............................................................... $ 254,688,223* $ 77,847,449
Repurchase Agreements, at Value + ..................................................... 3,000,000 --
Affiliated Investments, at Value ++ ................................................... -- --
Cash .................................................................................. -- --
Foreign Currency ...................................................................... 51,142*** --
Receivable for Investments Sold ....................................................... -- 755,124
Receivable for Fund Shares Sold ....................................................... 3,208 170,906
Accrued Income ........................................................................ 208,075 31,517
Prepaid Expenses ...................................................................... 23,081 25,062
Reclaims Receivable ................................................................... 103,694 --
Deferred Compensation ................................................................. 18,214 6,049
Due from Adviser, net ................................................................. -- --
------------- -------------
TOTAL ASSETS ....................................................................... 258,095,637 78,836,107
------------- -------------
LIABILITIES:
Payable Upon Return of Securities Loaned .............................................. 5,679,199 --
Payable for Investments Purchased ..................................................... 323,289 --
Payable for Fund Shares Redeemed ...................................................... 80,674 152,261
Due to Custodian ...................................................................... -- --
Investment Adviser Fees Payable ....................................................... 208,162 34,269
Administration Fees Payable ........................................................... 32,459 10,781
Chief Compliance Officer Fees Payable ................................................. 334 334
Custodian Fees Payable ................................................................ 18,414 450
Audit Fees Payable .................................................................... 40,018 24,144
Deferred Compensation Payable ......................................................... 18,214 6,049
Shareholder Servicing Fees Payable .................................................... 14,859 9,778
Transfer Agent Fees Payable ........................................................... 10,015 12,163
Printing Fees Payable ................................................................. 11,818 4,046
Trustees Fees Payable ................................................................. 1,513 525
Accrued Distribution Fees ............................................................. 3,116 7,704
Variation Margin Payable .............................................................. -- --
Accrued Expenses and Other Payables ................................................... 306,470 3,552
Unrealized Depreciation on Foreign Currency Contracts (1) ............................. 2,288 --
------------- -------------
TOTAL LIABILITIES .................................................................. 6,750,842 266,056
------------- -------------
NET ASSETS ...................................................................... $ 251,344,795 $ 78,570,051
============= =============
NET ASSETS:
Paid-in Capital (unlimited authorized--no par value) .................................. $ 251,768,239 $ 76,458,525
Undistributed Net Investment Income/(Accumulated Net Investment Loss) ................. 4,383,125 87,672
Accumulated Net Realized Gain (Loss) on Investments, Investments in Affiliated
Funds, Forward Foreign Currency Contracts, Futures Contracts, Foreign Currency
Transactions and Capital Gain Distributions Received ............................... (44,800,280) (15,733,481)
Net Unrealized Appreciation (Depreciation) on Investments, Investments in
Affiliated Funds, Forward Foreign Currency Contracts, Futures Contracts and
Foreign Currency Transactions ...................................................... 39,993,711 17,757,335
------------- -------------
NET ASSETS ......................................................................... $ 251,344,795 $ 78,570,051
============= =============
+ Cost of Investments and Repurchase Agreements ..................................... $ 217,707,262 $ 60,090,114
++ Cost of Affiliated Investments .................................................... $ -- $ --
* Includes Market Value of Securities on Loan ....................................... $ 5,415,122 $ --
** Represents margin deposits for futures contracts.
*** Cost of foreign currency is $51,135.
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.
130 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 + ........... $ 95,822,380 $ 205,444,693 $ 27,189,897 $ 49,227,993* $ 312,535,523 $ 4,165,580
Repurchase Agreements, at
Value + ........................ 223,203 -- 461,942 -- -- 1,588,402
Affiliated Investments, at
Value ++ ....................... -- -- -- -- -- 38,481,996
Cash .............................. -- 126,000** 28,000** -- -- --
Foreign Currency .................. -- -- -- -- -- --
Receivable for
Investments Sold ............... -- 1,895,066 -- 2,490,399 -- --
Receivable for Fund
Shares Sold .................... 56,000 103,683 240,216 4,525 2,161,322 14,176
Accrued Income .................... 106,470 61,555 8,800 54,424 143,010 4,127
Prepaid Expenses .................. 26,600 28,693 15,105 25,055 31,436 19,670
Reclaims Receivable ............... 22,861 5,002 -- -- 66,680 --
Deferred Compensation ............. 7,459 15,511 2,077 3,952 22,886 3,270
Due from Adviser, net ............. -- -- -- -- -- 8,642
------------- ------------- ------------ ------------ --------------- --------------
TOTAL ASSETS ................... 96,264,973 207,680,203 27,946,037 51,806,348 314,960,857 44,285,863
------------- ------------- ------------ ------------ --------------- --------------
LIABILITIES:
Payable Upon Return of
Securities Loaned .............. -- -- -- 98,150 -- --
Payable for Investments
Purchased ...................... -- -- -- 5,104 3,572,280 4,097
Payable for Fund Shares
Redeemed ....................... 31,480 232,372 -- 54,952 363,452 1,669
Due to Custodian .................. -- 390,579 -- 1,601,706 -- --
Investment Adviser Fees
Payable ........................ 47,037 54,491 16,543 29,603 159,870 --
Administration Fees Payable ....... 13,292 27,641 3,702 7,044 40,786 5,828
Chief Compliance Officer
Fees Payable ................... 334 334 334 334 334 334
Custodian Fees Payable ............ 554 1,153 154 294 1,701 243
Audit Fees Payable ................ 24,142 24,824 23,827 24,035 25,365 17,595
Deferred Compensation
Payable ........................ 7,459 15,511 2,077 3,952 22,886 3,270
Shareholder Servicing Fees
Payable ........................ 10,862 26,639 2,172 5,960 40,639 1,169
Transfer Agent Fees Payable ....... 10,867 47,761 1,775 10,721 25,878 10,370
Printing Fees Payable ............. 5,171 9,522 1,249 3,171 14,591 2,007
Trustees Fees Payable ............. 662 1,225 160 413 1,873 256
Accrued Distribution Fees ......... 7,080 55,458 312 7,402 19,195 21,314
Variation Margin Payable .......... -- 8,615 1,360 -- -- --
Accrued Expenses and Other
Payables ....................... 5,315 13,374 3,067 3,893 7,781 1,619
Unrealized Depreciation on
Foreign Currency Contracts
(1) .......................... -- -- -- -- -- --
------------- ------------- ------------ ------------ --------------- --------------
TOTAL LIABILITIES .............. 164,255 909,499 56,732 1,856,734 4,296,631 69,771
------------- ------------- ------------ ------------ --------------- --------------
NET ASSETS .................. $ 96,100,718 $ 206,770,704 $ 27,889,305 $ 49,949,614 $ 310,664,226 $ 44,216,092
============= ============= ============ ============ =============== ==============
NET ASSETS:
Paid-in Capital
(unlimited authorized--
no par value) .................. $ 139,869,452 $ 254,787,635 $ 28,369,323 $ 79,147,503 $ 253,484,024 $ 53,418,658
Undistributed Net
Investment
Income/(Accumulated Net
Investment Loss) ............... (2,497) -- -- 187,479 (3,755) 49,148
Accumulated Net Realized
Gain (Loss) on
Investments,
Investments in
Affiliated Funds,
Forward Foreign
Currency Contracts,
Futures Contracts,
Foreign Currency
Transactions and
Capital Gain
Distributions Received ......... (44,776,735) (123,004,373) (5,388,881) (27,663,402) 8,022,254 (13,780,155)
Net Unrealized Appreciation
(Depreciation) on
Investments,
Investments in
Affiliated Funds,
Forward Foreign
Currency Contracts,
Futures Contracts and
Foreign Currency
Transactions ................... 1,010,498 74,987,442 4,908,863 (1,721,966) 49,161,703 4,528,441
------------- ------------- ------------ ------------ --------------- --------------
NET ASSETS $ 96,100,718 $ 206,770,704 $ 27,889,305 $ 49,949,614 $ 310,664,226 $ 44,216,092
============= ============= ============ ============ =============== ==============
+ Cost of Investments and
Repurchase
Agreements .................. $ 95,037,274 $ 130,431,896 $ 22,742,592 $ 50,949,959 $ 263,377,338 $ 5,252,842
++ Cost of Affiliated
Investments ................. $ -- $ -- $ -- $ -- $ -- $ 34,454,695
* Includes Market Value
of Securities on
Loan ........................ $ -- $ -- $ -- $ 47,884 $ -- $ --
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 131
STATEMENTS OF ASSETS AND LIABILITIES
JULY 31, 2011
INTERNATIONAL LARGE CAP
OPPORTUNITIES GROWTH
FUND FUND
------------- ------------
FIDUCIARY SHARES:
Net Assets ............................................................ $ 93,100,614 $ 57,206,982
Shares of beneficial interest outstanding ............................. 12,475,892 5,547,671
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE (A) ............. $ 7.46 $ 10.31
============= ============
CLASS A SHARES:
Net Assets ............................................................ $ 5,066,564 $ 16,620,770
Shares of beneficial interest outstanding ............................. 679,663 1,642,411
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE (A) ....................... $ 7.45 $ 10.12
------------- ------------
Maximum Offering Price Per Share (B) ............................... $ 7.88 $ 10.71
============= ============
CLASS B SHARES:
Net Assets ............................................................ N/A $ 1,881,490
Shares of beneficial interest outstanding ............................. N/A 198,608
NET ASSET VALUE AND OFFERING PRICE PER SHARE (A) ......................... N/A $ 9.47
============= ============
CLASS C SHARES:
Net Assets ............................................................ $ 2,289,773 $ 2,860,809
Shares of beneficial interest outstanding ............................. 310,658 304,864
NET ASSET VALUE AND OFFERING PRICE PER SHARE (A) ......................... $ 7.37 $ 9.38
============= ============
CLASS M SHARES
Net Assets ............................................................ $ 150,887,844 N/A
Shares of beneficial interest outstanding ............................. 20,191,763 N/A
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE (A) ............. $ 7.47 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.
132 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 .............................. $ 73,026,151 $ 5,989,789 $ 27,136,559 $ 31,966,968 $ 234,784,893 $ 212,638
Shares of beneficial interest
outstanding .......................... 6,403,746 185,697 1,410,413 2,330,994 14,587,832 9,951
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE (A) ..................... $ 11.40 $ 32.26 $ 19.24 $ 13.71 $ 16.09 $ 21.37
============ ============= ============ ============ ============= ============
CLASS A SHARES:
Net Assets .............................. $ 20,159,740 $ 182,410,113 $ 536,163 $ 12,810,510 $ 71,163,994 $ 26,327,131
Shares of beneficial interest
outstanding .......................... 1,763,820 5,687,027 28,080 961,971 4,434,596 1,233,830
NET ASSET VALUE AND REDEMPTION PRICE PER
SHARE (A) ............................... $ 11.43 $ 32.07 $ 19.09 $ 13.32 $ 16.05 $ 21.34
------------ ------------- ------------ ------------ ------------- ------------
Maximum Offering Price Per
Share (B) ......................... $ 12.10 $ 33.94 $ 20.20 $ 14.10 $ 16.98 $ 22.58
============ ============= ============ ============ ============= ============
CLASS B SHARES:
Net Assets .............................. $ 746,579 $ 7,101,519 N/A $ 627,797 $ 2,212,054 N/A
Shares of beneficial interest
outstanding .......................... 66,593 244,419 N/A 49,837 140,985 N/A
NET ASSET VALUE AND OFFERING PRICE PER
SHARE (A) ............................... $ 11.21 $ 29.05 N/A $ 12.60 $ 15.69 N/A
============ ============= ============ ============ ============= ============
CLASS C SHARES:
Net Assets .............................. $ 2,168,248 $ 11,269,283 $ 216,583 $ 4,544,339 $ 2,503,285 $ 17,676,323
Shares of beneficial interest
outstanding .......................... 194,068 380,928 11,612 365,077 160,210 837,764
NET ASSET VALUE AND OFFERING PRICE PER
SHARE (A) ............................... $ 11.17 $ 29.58 $ 18.65 $ 12.45 $ 15.63 $ 21.10
============ ============= ============ ============ ============= ============
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 133
STATEMENTS OF ASSETS AND LIABILITIES
JULY 31, 2011
DIVERSIFIED GROWTH &
EQUITY INCOME
ALLOCATION ALLOCATION
FUND FUND
------------ ------------
ASSETS:
Investments, at Value + ......................................................................... $ 1,503,180 $ 4,563,780
Repurchase Agreements, at Value + ............................................................... -- 1,947,251
Affiliated Investments, at Value ++ ............................................................. 14,015,298 45,250,213
Receivable for Investments Sold ................................................................. -- --
Receivable for Fund Shares Sold ................................................................. 54,446 124,951
Accrued Income .................................................................................. 1 9,609
Prepaid Expenses ................................................................................ 15,891 20,105
Deferred Compensation ........................................................................... 1,152 3,808
Due from Adviser, net ........................................................................... 8,010 7,269
------------ ------------
TOTAL ASSETS ................................................................................. 15,597,978 51,926,986
------------ ------------
LIABILITIES:
Payable for Investments Purchased ............................................................... -- 9,567
Payable for Fund Shares Redeemed ................................................................ -- 50,259
Investment Adviser Fees Payable ................................................................. -- --
Administration Fees Payable ..................................................................... 2,052 6,786
Chief Compliance Officer Fees Payable ........................................................... 334 334
Custodian Fees Payable .......................................................................... 85 283
Audit Fees Payable .............................................................................. 17,420 17,628
Deferred Compensation Payable ................................................................... 1,152 3,808
Shareholder Servicing Fees Payable .............................................................. 420 1,376
Transfer Agent Fees Payable ..................................................................... 2,904 8,121
Printing Fees Payable ........................................................................... 489 2,233
Trustees Fees Payable ........................................................................... 63 285
Accrued Distribution Fees ....................................................................... 7,271 24,446
Accrued Expenses and Other Payables ............................................................. 1,019 1,709
------------ ------------
TOTAL LIABILITIES ............................................................................ 33,209 126,835
------------ ------------
NET ASSETS ................................................................................ $ 15,564,769 $ 51,800,151
============ ============
NET ASSETS:
Paid-in Capital (unlimited authorized--no par value) ............................................ $ 15,398,469 $ 56,819,216
Undistributed Net Investment Income/(Accumulated Net Investment Loss) ........................... 9,884 54,908
Accumulated Net Realized Gain (Loss) on Investments, Investments in Affiliated Funds and
Capital Gain Distributions Received .......................................................... (801,220) (10,849,569)
Net Unrealized Appreciation (Depreciation) on Investments and Investments in Affiliated Funds ... 957,636 5,775,596
------------ ------------
NET ASSETS ................................................................................ $ 15,564,769 $ 51,800,151
============ ============
+ Cost of Investments and Repurchase Agreements ................................................ $ 1,444,539 $ 6,025,644
++ Cost of Affiliated Investments ............................................................... $ 13,116,303 $ 39,960,004
Amounts designated as "--" are either not applicable or less than $1.00.
The accompanying notes are an integral part of the financial statements.
134 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 + ................ $ 1,446,030 $372,446,940 $ 223,632,222 $ 106,476,458 $ 130,767,436 $ 144,470,032
Repurchase Agreements, at Value + ...... 851,570 -- -- -- -- --
Affiliated Investments, at Value ++ .... 15,148,967 -- -- -- -- --
Receivable for Investments Sold ........ -- 142,404 -- -- 83,703 --
Receivable for Fund Shares Sold ........ 45,019 254,217 821,773 143,471 858,442 6,500
Accrued Income ......................... 5,562 3,010,579 3,013,648 1,249,423 1,130,304 1,887,381
Prepaid Expenses ....................... 19,201 28,991 13,599 24,161 13,805 6,581
Deferred Compensation .................. 1,259 26,886 16,035 7,621 9,627 10,459
Due from Adviser, net .................. 6,691 -- -- -- -- --
----------- ------------ ------------- ------------- ------------- -------------
TOTAL ASSETS ........................ 17,524,299 375,910,017 227,497,277 107,901,134 132,863,317 146,380,953
----------- ------------ ------------- ------------- ------------- -------------
LIABILITIES:
Payable for Investments Purchased ...... 5,543 -- 2,355,135 -- -- 2,300,644
Payable for Fund Shares Redeemed ....... 5,160 889,470 375,463 75,488 22,719 539,854
Investment Adviser Fees Payable ........ -- 146,570 41,168 11,108 36,285 33,705
Administration Fees Payable ............ 2,244 47,914 28,575 13,581 17,156 18,639
Chief Compliance Officer Fees Payable .. 334 334 334 334 334 334
Custodian Fees Payable ................. 93 1,998 1,191 566 715 777
Audit Fees Payable ..................... 17,455 28,492 27,281 26,605 27,253 26,773
Deferred Compensation Payable .......... 1,259 26,886 16,035 7,621 9,627 10,459
Shareholder Servicing Fees Payable ..... 385 21,011 8,614 4,347 2,911 6,118
Transfer Agent Fees Payable ............ 3,097 13,803 8,622 3,987 7,927 12,541
Printing Fees Payable .................. 790 16,933 10,115 5,027 6,025 6,995
Trustees Fees Payable .................. 101 2,174 1,302 644 770 903
Accrued Distribution Fees .............. 9,110 11,307 31,291 7,646 18,572 36,534
Accrued Expenses and Other Payables .... 1,139 11,604 10,145 6,409 7,929 8,722
----------- ------------ ------------- ------------- ------------- -------------
TOTAL LIABILITIES ................... 46,710 1,218,496 2,915,271 163,363 158,223 3,002,998
----------- ------------ ------------- ------------- ------------- -------------
NET ASSETS ....................... $17,477,589 $374,691,521 $ 224,582,006 $ 107,737,771 $ 132,705,094 $ 143,377,955
=========== ============ ============= ============= ============= =============
NET ASSETS:
Paid-in Capital (unlimited authorized
--no par value) ..................... $16,289,679 $348,969,257 $ 217,425,299 $ 103,079,510 $ 131,209,367 $ 141,307,412
Undistributed Net Investment
Income/(Accumulated Net Investment
Loss) ............................... 18,373 229,716 113,140 12,299 16,757 13,825
Accumulated Net Realized Gain (Loss) on
Investments, Investments in
Affiliated Funds and Capital Gain
Distributions Received .............. 139,397 6,925,423 (115,747) -- (233,426) (438,670)
Net Unrealized Appreciation
(Depreciation) on Investments and
Investments in Affiliated Funds ..... 1,030,140 18,567,125 7,159,314 4,645,962 1,712,396 2,495,388
----------- ------------ ------------- ------------- ------------- -------------
NET ASSETS ....................... $17,477,589 $374,691,521 $ 224,582,006 $ 107,737,771 $ 132,705,094 $ 143,377,955
=========== ============ ============= ============= ============= =============
+ Cost of Investments and Repurchase
Agreements .......................... $ 2,140,294 $353,879,815 $ 216,472,908 $ 101,830,496 $ 129,055,040 $ 141,974,644
++ Cost of Affiliated Investments ...... $14,276,133 $ -- $ -- $ -- $ -- $ --
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 135
STATEMENTS OF ASSETS AND LIABILITIES
JULY 31, 2011
DIVERSIFIED GROWTH &
EQUITY INCOME
ALLOCATION ALLOCATION
FUND FUND
------------ ------------
FIDUCIARY SHARES:
Net Assets ..................................................... $ 551,801 $ 1,031,043
Shares of beneficial interest outstanding ...................... 29,021 47,448
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE (A) ...... $ 19.01 $ 21.73
============ ============
CLASS A SHARES:
Net Assets ..................................................... $ 8,983,308 $ 30,422,311
Shares of beneficial interest outstanding ...................... 474,743 1,405,102
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE (A) ................ $ 18.92 $ 21.65
------------ ------------
Maximum Offering Price Per Share (B) ........................ $ 20.02 $ 22.91
============ ============
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 ..................................................... $ 6,029,660 $ 20,346,797
Shares of beneficial interest outstanding ...................... 326,110 945,267
NET ASSET VALUE AND OFFERING PRICE PER SHARE (A) .................. $ 18.49 $ 21.52
============ ============
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 5.5%. 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%.
The accompanying notes are an integral part of the financial statements.
136 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 .......................... $ 659,787 $337,142,952 $ 123,643,818 $ 79,902,327 $87,476,317 $ 281,684
Shares of beneficial interest
outstanding ...................... 31,128 29,416,831 12,133,058 6,991,284 8,658,714 27,158
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE (A) ................. $ 21.20 $ 11.46 $ 10.19 $ 11.43 $ 10.10 $ 10.37
========== ============ ============= ============= =========== ============
CLASS A SHARES:
Net Assets .......................... $8,303,918 $ 29,448,806 $ 78,038,152 $ 23,674,401 $24,352,508 $130,165,154
Shares of beneficial interest
outstanding ...................... 391,798 2,611,847 7,696,749 2,072,553 2,413,858 12,548,792
NET ASSET VALUE AND REDEMPTION PRICE PER
SHARE (A) ........................... $ 21.19 $ 11.28 $ 10.14 $ 11.42 $ 10.09 $ 10.37
---------- ------------ ------------- ------------- ----------- ------------
Maximum Offering Price Per
Share (B) ..................... $ 22.19 $ 11.54 $ 10.37 $ 11.68 $ 10.32 $ 10.61
========== ============ ============= ============= =========== ============
CLASS B SHARES:
Net Assets .......................... N/A $ 325,967 $ 94,133 N/A N/A $ 2,099,706
Shares of beneficial interest
outstanding ...................... N/A 29,026 9,279 N/A N/A 202,664
NET ASSET VALUE AND OFFERING PRICE PER
SHARE (A) ........................... N/A $ 11.23 $ 10.14 N/A N/A $ 10.36
========== ============ ============= ============= =========== ============
CLASS C SHARES:
Net Assets .......................... $8,513,884 $ 7,773,796 $ 22,805,903 $ 4,161,043 $20,876,269 $ 10,831,411
Shares of beneficial interest
outstanding ...................... 404,631 692,980 2,256,910 363,926 2,044,779 1,045,717
NET ASSET VALUE AND OFFERING PRICE PER
SHARE (A) ........................... $ 21.04 $ 11.22 $ 10.10 $ 11.43 $ 10.21 $ 10.36
========== ============ ============= ============= =========== ============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 137
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JULY 31, 2011
COGNITIVE
BALANCED VALUE
FUND FUND
--------------- --------------
Interest Income ........................................................................ $ 311,848 $ 1,727
Dividend Income ........................................................................ 252,919 1,857,225
Less: Foreign Taxes Withheld ........................................................... (1,994) (7,628)
--------------- --------------
Total Investment Income .......................................................... 562,773 1,851,324
--------------- --------------
Expenses:
Investment Adviser Fees ............................................................. 153,621 672,386
Shareholder Servicing Fees Fiduciary Shares ......................................... 46,205 7,234
Shareholder Servicing Fees Class A Shares ........................................... 15,160 2,211
Shareholder Servicing Fees Class B Shares ........................................... 795 --
Administration Fees ................................................................. 38,372 134,358
Custodian Fees ...................................................................... 1,600 5,610
Trustees Fees ....................................................................... 1,670 5,589
Chief Compliance Officer Fees ....................................................... 6,388 6,388
Distribution Fees Class A Shares .................................................... 15,160 2,211
Distribution Fees Class B Shares .................................................... 2,385 --
Distribution Fees Class C Shares .................................................... 7,394 5,668
Registration Fees ................................................................... 44,422 40,095
Transfer Agent Fees ................................................................. 21,854 28,079
Printing Fees ....................................................................... 5,203 17,463
Audit Fees .......................................................................... 26,265 24,354
Legal Fees .......................................................................... 3,106 10,319
Miscellaneous Fees .................................................................. 28,001 23,937
--------------- --------------
Total Expenses ................................................................... 417,601 985,902
--------------- --------------
Less: Waivers and Reimbursements
Investment Adviser Fee Waiver .................................................... (115,433) (9,308)
Shareholder Servicing Fee Waiver--Fiduciary Shares ............................... (18,482) (3,322)
Shareholder Servicing Fee Waiver--Class A Shares ................................. (6,064) (884)
Reimbursement of Expenses by Adviser ............................................. -- --
--------------- --------------
Total Waivers and Reimbursements .......................................................... (139,979) (13,514)
--------------- --------------
Total Net Expenses ........................................................................ 277,622 972,388
--------------- --------------
Net Investment Income (Loss) .............................................................. 285,151 878,936
--------------- --------------
Net Realized Gain on Investments .......................................................... 1,629,414 20,628,659
Net Realized Gain (Loss) on Futures Contracts (1) ......................................... -- --
Net Realized Gain on Written Option Contracts (1) ......................................... -- --
Change in Unrealized Appreciation (Depreciation) on Investments ........................... 1,063,326 (2,268,107)
Change in Unrealized Appreciation (Depreciation) on Futures Contracts (1) ................. -- --
--------------- --------------
Net Realized and Unrealized Gain on Investments ........................................... 2,692,740 18,360,552
--------------- --------------
Increase in Net Assets Resulting from Operations .......................................... $ 2,977,891 $ 19,239,488
=============== ==============
Amounts designated as "--" are either not applicable or less than $1.00.
(1) The primary risk exposure is the price movement of the underlying basket of
equity securities (see Note 2).
The accompanying notes are an integral part of the financial statements.
138 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 ................ $ 1,810 $ 1,538 $ -- $ -- $ -- $ --
Dividend Income ................ 1,260,811 762,966 665,791 287,005 1,522,108 53,646
Less: Foreign Taxes Withheld ... -- (15,138) (3,377) (1,540) -- --
------------- -------------- ------------ -------------- ------------- -------------
Total Investment Income .. 1,262,621 749,366 662,414 285,465 1,522,108 53,646
------------- -------------- ------------ -------------- ------------- -------------
Expenses:
Investment Adviser Fees ..... 371,095 666,066 92,375 117,367 2,446,682 169,862
Shareholder Servicing Fees .. 145,029 5,104 7,303 48,820 207,002 25,367
Fiduciary Shares
Shareholder Servicing Fees .. 7,262 5,241 24,325 34 542,041 14,566
Class A Shares
Shareholder Servicing Fees .. 890 -- 4,477 -- 15,675 --
Class B Shares
Administration Fees ......... 92,692 133,093 25,171 29,316 497,648 25,458
Custodian Fees .............. 4,020 5,551 1,075 1,223 20,752 1,062
Trustees Fees ............... 4,027 5,541 1,006 1,227 18,747 954
Chief Compliance
Officer Fees .............. 6,388 6,388 6,388 6,388 6,388 6,388
Distribution Fees Class A
Shares .................... 7,262 5,241 24,325 35 542,041 14,566
Distribution Fees Class B
Shares .................... 2,669 -- 13,430 -- 47,026 --
Distribution Fees Class C
Shares .................... 5,772 2,388 23,537 191 261,509 10,129
Registration Fees ........... 41,762 41,870 45,297 35,481 57,485 35,468
Transfer Agent Fees ......... 22,171 28,124 36,850 9,855 273,467 13,489
Printing Fees ............... 12,475 17,761 2,996 3,835 57,548 2,966
Audit Fees .................. 24,187 24,378 23,890 23,893 25,856 23,885
Legal Fees .................. 7,388 10,194 1,875 2,300 35,178 1,792
Miscellaneous Fees .......... 19,207 21,557 15,738 16,007 24,755 15,391
------------- -------------- ------------ -------------- ------------- -------------
Total Expenses ........... 774,296 978,497 350,058 295,972 5,079,800 361,343
------------- -------------- ------------ -------------- ------------- -------------
Less: Waivers and Reimbursements
Investment Adviser Fee
Waiver ................. (79,695) (28,031) (92,375) (86,489) (210,531) (89,482)
Shareholder Servicing Fee
Waiver--Fiduciary
Shares ................. (80,722) (4,298) (2,921) (35,485) (86,544) (12,530)
Shareholder Servicing Fee
Waiver--Class A
Shares ................. (2,905) (2,096) (9,730) (14) (216,816) (5,827)
Reimbursement of Expenses
by Adviser ............. -- -- (34,320) -- -- --
------------- -------------- ------------ -------------- ------------- -------------
Total Waivers and
Reimbursements ................. (163,322) (34,425) (139,346) (121,988) (513,891) (107,839)
------------- -------------- ------------ -------------- ------------- -------------
Total Net Expenses ................ 610,974 944,072 210,712 173,984 4,565,909 253,504
------------- -------------- ------------ -------------- ------------- -------------
Net Investment Income (Loss) ...... 651,647 (194,706) 451,702 111,481 (3,043,801) (199,858)
------------- -------------- ------------ -------------- ------------- -------------
Net Realized Gain on
Investments ................... 4,595,857 2,459,798 938,543 886,885 13,116,117 1,297,244
Net Realized Gain (Loss) on Futures
Contracts (1) .................. 326,618 -- 101,492 (15,354) -- --
Net Realized Gain on Written Option
Contracts (1) .................. -- 35,556 -- -- -- --
Change in Unrealized Appreciation
Depreciation) on Investments ... 5,134,348 14,025,216 1,151,603 1,669,684 47,839,217 2,220,064
Change in Unrealized Appreciation
(Depreciation) on Futures
Contracts (1) .................. (55,875) -- (4,693) -- -- --
------------- -------------- ------------ -------------- ------------- -------------
Net Realized and Unrealized Gain on
Investments .................... 10,000,948 16,520,570 2,186,945 2,541,215 60,955,334 3,517,308
------------- -------------- ------------ -------------- ------------- -------------
Increase in Net Assets Resulting
from Operations ................ $ 10,652,595 $ 16,325,864 $ 2,638,647 $ 2,652,696 $ 57,911,533 $ 3,317,450
============= ============== ============ ============== ============= =============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 139
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JULY 31, 2011
INTERNATIONAL LARGE CAP
OPPORTUNITIES GROWTH
FUND FUND
--------------- --------------
Interest Income ........................................................................ $ 4,779 $ --
Income from Investments in Affiliated Funds ............................................ -- --
Securities Lending Income .............................................................. 274,058 --
Dividend Income ........................................................................ 8,115,921 1,091,218
Less: Foreign Taxes Withheld ........................................................... (729,021) (11,714)
--------------- --------------
Total Investment Income .......................................................... 7,665,737 1,079,504
--------------- --------------
Expenses:
Investment Adviser Fees ............................................................. 2,316,267 531,968
Shareholder Servicing Fees Fiduciary Shares ......................................... 218,517 161,077
Shareholder Servicing Fees Class A Shares ........................................... 16,062 45,888
Shareholder Servicing Fees Class B Shares ........................................... -- 6,750
Administration Fees ................................................................. 365,592 132,874
Custodian Fees ...................................................................... 106,224 5,647
Trustees Fees ....................................................................... 15,391 5,826
Chief Compliance Officer Fees ....................................................... 6,388 6,388
Distribution Fees Class A Shares .................................................... 16,062 45,888
Distribution Fees Class B Shares .................................................... -- 20,251
Distribution Fees Class C Shares .................................................... 22,811 31,757
Registration Fees ................................................................... 42,814 46,907
License Fees ........................................................................ -- --
Transfer Agent Fees ................................................................. 59,983 74,493
Printing Fees ....................................................................... 49,369 18,088
Audit Fees .......................................................................... 39,489 24,354
Legal Fees .......................................................................... 28,957 10,734
Miscellaneous Fees .................................................................. 70,744 18,993
--------------- --------------
Total Expenses ................................................................... 3,374,670 1,187,883
--------------- --------------
Less: Waivers and Reimbursements
Investment Adviser Fee Waiver .................................................... -- (104,813)
Shareholder Servicing Fee Waiver--Fiduciary Shares ............................... (61,454) (74,136)
Shareholder Servicing Fee Waiver--Class A Shares ................................. (9,689) (18,355)
Reimbursement of Expenses by Adviser ............................................. -- --
--------------- --------------
Total Waivers and Reimbursements .......................................................... (71,143) (197,304)
--------------- --------------
Total Net Expenses ........................................................................ 3,303,527 990,579
--------------- --------------
Net Investment Income (Loss) .............................................................. 4,362,210 88,925
--------------- --------------
Net Realized Gain on Investments .......................................................... 28,446,567 6,507,034
Net Realized Gain (Loss) on Investments in Affiliated Funds ............................... -- --
Net Realized Gain on Foreign Currency Contracts (1) ....................................... 323,722 --
Net Realized Gain (Loss) on Foreign Currency Transactions ................................. (299,954) --
Net Realized Gain (Loss) on Futures Contracts (2) ......................................... -- (16,460)
Capital Gain Distributions Received from Affiliated Funds ................................. -- --
Change in Unrealized Appreciation (Depreciation) on Investments ........................... 11,093,888 8,714,295
Change in Unrealized Appreciation (Depreciation) on Investments in Affiliated Funds ....... -- --
Change in Unrealized Appreciation (Depreciation) on Foreign Currency Transactions ......... 25,038 --
Change in Unrealized Appreciation (Depreciation) on Foreign Currency Contracts (1) ........ (347,856) --
Change in Unrealized Appreciation (Depreciation) on Futures Contracts (2) ................. -- --
--------------- --------------
Net Realized and Unrealized Gain on Investments ........................................... 39,241,405 15,204,869
--------------- --------------
Increase in Net Assets Resulting from Operations .......................................... $ 43,603,615 $ 15,293,794
=============== ==============
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 the price movement of the underlying basket of
equity securities (see Note 2).
The accompanying notes are an integral part of the financial statements.
140 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 ................ $ 1,457 $ -- $ 857 $ 795 $ -- $ 692
Income from Investments in
Affiliated Funds ............ -- -- -- -- -- 508,603
Securities Lending Income ...... -- -- -- 23,293 -- --
Dividend Income ................ 2,308,798 2,009,456 272,357 1,722,938 7,353,762 78,524
Less: Foreign Taxes Withheld ... (88,460) (65,701) -- (860) (151,784) --
------------- -------------- ------------ -------------- ------------- -------------
Total Investment Income .. 2,221,795 1,943,755 273,214 1,746,166 7,201,978 587,819
------------- -------------- ------------ -------------- ------------- -------------
Expenses:
Investment Adviser Fees ..... 669,413 726,187 259,109 687,811 1,909,079 76,567
Shareholder Servicing Fees
Fiduciary Shares .......... 213,246 7,469 66,966 92,054 597,609 372
Shareholder Servicing Fees
Class A Shares ............ 55,987 463,451 902 64,591 184,060 64,971
Shareholder Servicing Fees
Class B Shares ............ 2,585 22,651 -- 3,124 7,344 --
Administration Fees ......... 167,209 312,814 40,876 103,073 476,852 65,572
Custodian Fees .............. 10,655 14,442 1,705 4,767 20,731 2,735
Trustees Fees ............... 7,457 13,256 1,750 4,668 20,618 2,804
Chief Compliance
Officer Fees ............. 6,388 6,388 6,388 6,388 6,388 6,388
Distribution Fees Class A
Shares .................... 55,987 463,446 902 64,591 184,060 64,971
Distribution Fees Class B
Shares .................... 7,754 67,954 -- 9,373 22,032 --
Distribution Fees Class C
Shares .................... 28,416 113,023 1,278 48,734 25,745 176,156
Registration Fees ........... 45,795 48,530 37,917 46,362 49,213 38,234
License Fees ................ -- 83,492 -- -- -- --
Transfer Agent Fees ......... 62,758 283,335 11,103 64,659 155,301 61,736
Printing Fees ............... 21,463 41,504 5,359 14,696 63,785 8,702
Audit Fees .................. 24,420 25,105 23,948 24,206 25,782 17,659
Legal Fees .................. 13,286 24,824 3,207 8,588 38,227 5,179
Miscellaneous Fees .......... 20,892 25,355 19,924 22,107 29,430 13,581
------------- -------------- ------------ -------------- ------------- -------------
Total Expenses ........... 1,413,711 2,743,226 481,334 1,269,792 3,816,256 605,627
------------- -------------- ------------ -------------- ------------- -------------
Less: Waivers and Reimbursements
Investment Adviser Fee
Waiver ................. (101,382) (185,874) (78,535) (232,587) (27,483) (76,567)
Shareholder Servicing Fee
Waiver--Fiduciary
Shares ................. (109,712) (4,651) (43,323) (42,693) (241,310) (298)
Shareholder Servicing Fee
Waiver--Class A
Shares ................. (22,395) (185,383) (360) (25,836) (73,624) (51,977)
Reimbursement of Expenses
by Adviser ............. -- -- -- -- -- (102,269)
------------- -------------- ------------ -------------- ------------- -------------
Total Waivers and
Reimbursements ................. (233,489) (375,908) (122,218) (301,116) (342,417) (231,111)
------------- -------------- ------------ -------------- ------------- -------------
Total Net Expenses ................ 1,180,222 2,367,318 359,116 968,676 3,473,839 374,516
------------- -------------- ------------ -------------- ------------- -------------
Net Investment Income (Loss) ...... 1,041,573 (423,563) (85,902) 777,490 3,728,139 213,303
------------- -------------- ------------ -------------- ------------- -------------
Net Realized Gain on
Investments .................... 2,610,320 9,138,468 4,897,795 7,241,466 25,679,296 630,259
Net Realized Gain (Loss) on
Investments in Affiliated
Funds .......................... -- -- -- -- -- (248,054)
Net Realized Gain on Foreign
Currency Contracts (1) ......... -- -- -- -- -- --
Net Realized Gain (Loss) on Foreign
Currency Transactions .......... (2,315) -- -- -- (3,755) --
Net Realized Gain (Loss) on Futures
Contracts (2) .................. -- 389,913 59,500 -- -- --
Capital Gain Distributions Received
from Affiliated Funds .......... -- -- -- -- -- 24,493
Change in Unrealized Appreciation
(Depreciation) on
Investments .................... 10,751,864 35,669,436 2,537,512 5,164,400 28,853,939 (65,035)
Change in Unrealized Appreciation
(Depreciation) on Investments in
Affiliated Funds ............... -- -- -- -- -- 6,227,737
Change in Unrealized
Appreciation (Depreciation) on
Foreign Currency
Transactions ................... 2,189 -- -- -- 3,414 --
Change in Unrealized Appreciation
(Depreciation) on Foreign
Currency Contracts (1) ......... -- -- -- -- -- --
Change in Unrealized Appreciation
(Depreciation) on Futures
Contracts (2) .................. -- (25,355) 1,510 -- -- --
------------- -------------- ------------ -------------- ------------- -------------
Net Realized and Unrealized Gain on
Investments .................... 13,362,058 45,172,462 7,496,317 12,405,866 54,532,894 6,569,400
------------- -------------- ------------ -------------- ------------- -------------
Increase in Net Assets Resulting
from Operations ................ $ 14,403,631 $ 44,748,899 $ 7,410,415 $ 13,183,356 $ 58,261,033 $ 6,782,703
============= ============== ============ ============== ============= =============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 141
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JULY 31, 2011
DIVERSIFIED GROWTH &
EQUITY INCOME
ALLOCATION ALLOCATION
FUND FUND
----------- -----------
Interest Income ................................................................ $ -- $ 1,822
Income from Investments in Affiliated Funds .................................... 99,866 709,511
Dividend Income ................................................................ 7,825 132,529
----------- -----------
Total Investment Income .................................................. 107,691 843,862
----------- -----------
Expenses:
Investment Adviser Fees ..................................................... 19,418 85,570
Shareholder Servicing Fees Fiduciary Shares ................................. 1,445 889
Shareholder Servicing Fees Class A Shares ................................... 12,781 72,778
Shareholder Servicing Fees Class B Shares ................................... -- --
Administration Fees ......................................................... 16,631 73,282
Custodian Fees .............................................................. 714 3,056
Trustees Fees ............................................................... 592 3,103
Chief Compliance Officer Fees ............................................... 6,388 6,388
Distribution Fees Class A Shares ............................................ 12,781 72,778
Distribution Fees Class B Shares ............................................ -- --
Distribution Fees Class C Shares ............................................ 54,056 194,306
Registration Fees ........................................................... 41,842 37,015
Transfer Agent Fees ......................................................... 17,624 47,317
Printing Fees ............................................................... 1,873 9,652
Audit Fees .................................................................. 17,449 17,693
Legal Fees .................................................................. 1,150 5,752
Miscellaneous Fees .......................................................... 12,150 13,694
----------- -----------
Total Expenses ........................................................... 216,894 643,273
----------- -----------
Less: Waivers and Reimbursements
Investment Adviser Fee Waiver ............................................ (19,418) (85,570)
Shareholder Servicing Fee Waiver--Fiduciary Shares ....................... (1,157) (711)
Shareholder Servicing Fee Waiver--Class A Shares ......................... (10,225) (58,223)
Reimbursement of Expenses by Adviser ..................................... (85,899) (82,484)
----------- -----------
Total Waivers and Reimbursements .................................................. (116,699) (226,988)
----------- -----------
Total Net Expenses ................................................................ 100,195 416,285
----------- -----------
Net Investment Income ............................................................. 7,496 427,577
----------- -----------
Net Realized Gain (Loss) on Investments ........................................... 182,428 609,843
Net Realized Gain on Investments in Affiliated Funds .............................. 868,502 2,021,111
Capital Gain Distributions Received from Affiliated Funds ......................... 5,318 53,838
Change in Unrealized Appreciation (Depreciation) on Investments ................... (63,346) (102,309)
Change in Unrealized Appreciation (Depreciation) on Investments in
Affiliated Funds ............................................................... 196,219 3,129,908
----------- -----------
Net Realized and Unrealized Gain (Loss) on Investments ............................ 1,189,121 5,712,391
----------- -----------
Increase in Net Assets Resulting from Operations .................................. $ 1,196,617 $ 6,139,968
=========== ===========
Amounts designated as "--" are either not applicable or less than $1.00.
The accompanying notes are an integral part of the financial statements.
142 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 .......................... $ 861 $ 16,559,332 $ 7,348,083 $ 3,622,980 $ 3,719,355 $ 6,756,162
Income from Investments in Affiliated
Funds ................................. 318,105 -- -- -- -- --
Dividend Income .......................... 71,029 10,370 5,285 1,476 5,592 838
------------ ------------ ------------- ------------- ------------ ------------
Total Investment Income ............ 389,995 16,569,702 7,353,368 3,624,456 3,724,947 6,757,000
------------ ------------ ------------- ------------- ------------ ------------
Expenses:
Investment Adviser Fees ............... 30,081 1,847,092 1,105,543 544,541 524,549 762,309
Shareholder Servicing Fees
Fiduciary Shares ................... 640 830,910 294,476 204,089 210,299 319
Shareholder Servicing Fees Class A
Shares ............................. 23,547 73,647 207,104 58,469 63,811 347,540
Shareholder Servicing Fees Class B
Shares ............................. -- 2,512 836 -- -- 6,283
Administration Fees ................... 25,761 553,657 331,382 163,222 196,534 228,499
Custodian Fees ........................ 1,074 23,089 13,819 6,807 8,196 9,529
Trustees Fees ......................... 1,138 24,439 14,525 7,237 8,632 10,279
Chief Compliance Officer Fees ......... 6,388 6,388 6,388 6,388 6,388 6,388
Distribution Fees Class A Shares ...... 23,547 73,647 207,104 58,469 63,811 347,540
Distribution Fees Class B Shares ...... -- 7,536 2,506 -- -- 18,848
Distribution Fees Class C Shares ...... 75,139 49,431 151,068 29,135 161,200 81,037
Registration Fees ..................... 36,364 48,895 32,719 48,087 47,970 12,026
Transfer Agent Fees ................... 19,293 85,471 54,110 25,373 49,789 77,978
Printing Fees ......................... 3,605 76,779 46,410 22,934 27,262 32,417
Audit Fees ............................ 17,489 29,015 27,551 26,822 27,392 27,054
Legal Fees ............................ 2,144 46,055 27,241 13,544 16,115 22,399
Miscellaneous Fees .................... 12,478 52,749 52,486 38,028 45,420 47,950
------------ ------------ ------------- ------------- ------------ ------------
Total Expenses ..................... 278,688 3,831,312 2,575,268 1,253,145 1,457,368 2,038,395
------------ ------------ ------------- ------------- ------------ ------------
Less: Waivers and Reimbursements
Investment Adviser Fee Waiver ...... (30,081) (133,816) (628,741) (391,114) (105,854) (322,056)
Shareholder Servicing Fee
Waiver--Fiduciary Shares ........ (512) (609,360) (235,581) (163,272) (190,797) (255)
Shareholder Servicing Fee
Waiver--Class A Shares .......... (18,838) (53,026) (165,683) (46,775) (51,049) (278,032)
Reimbursement of Expenses by
Adviser ......................... (78,464) -- -- -- -- --
------------ ------------ ------------- ------------- ------------ ------------
Total Waivers and Reimbursements ............ (127,895) (796,202) (1,030,005) (601,161) (347,700) (600,343)
------------ ------------ ------------- ------------- ------------ ------------
Total Net Expenses .......................... 150,793 3,035,110 1,545,263 651,984 1,109,668 1,438,052
------------ ------------ ------------- ------------- ------------ ------------
Net Investment Income ....................... 239,202 13,534,592 5,808,105 2,972,472 2,615,279 5,318,948
------------ ------------ ------------- ------------- ------------ ------------
Net Realized Gain (Loss) on Investments ..... 133,748 8,249,013 (115,747) 75 399,316 (438,670)
Net Realized Gain on Investments in
Affiliated Funds ......................... 1,268,576 -- -- -- -- --
Capital Gain Distributions Received from
Affiliated Funds ......................... 30,589 -- -- -- -- --
Change in Unrealized Appreciation
(Depreciation) on Investments ............ (11,618) (2,381,071) (1,501,496) (744,306) (250,248) (1,833,800)
Change in Unrealized Appreciation
(Depreciation) on Investments in
Affiliated Funds ......................... (149,956) -- -- -- -- --
------------ ------------ ------------- ------------- ------------ ------------
Net Realized and Unrealized Gain (Loss)
on Investments ........................... 1,271,339 5,867,942 (1,617,243) (744,231) 149,068 (2,272,470)
------------ ------------ ------------- ------------- ------------ ------------
Increase in Net Assets Resulting from
Operations ............................... $ 1,510,541 $ 19,402,534 $ 4,190,862 $ 2,228,241 $ 2,764,347 $ 3,046,478
============ ============ ============= ============= ============ ============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 143
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED JULY 31 (UNLESS OTHERWISE INDICATED)
BALANCED COGNITIVE VALUE CORE EQUITY
FUND FUND FUND
-------------------------- ------------------------- --------------------------
2011 2010 2011 2010 2011 2010
------------ ------------ ----------- ------------ ------------ ------------
Investment Activities:
Net Investment Income ....................... $ 285,151 $ 411,543 $ 878,936 $ 537,314 $ 651,647 $ 706,748
Net Realized Gain (Loss) on
Investments, Written Option
Contracts and Futures Contracts .......... 1,629,414 957,744 20,628,659 10,699,824 4,922,475 1,304,879
Change in Unrealized Appreciation
(Depreciation) on Investments and
Futures contracts ........................ 1,063,326 1,315,614 (2,268,107) 2,288,843 5,078,473 6,970,091
------------ ------------ ----------- ------------ ------------ ------------
Net Increase in Net Assets Resulting
From Operations .......................... 2,977,891 2,684,901 19,239,488 13,525,981 10,652,595 8,981,718
------------ ------------ ----------- ------------ ------------ ------------
Dividends and Distributions to Shareholders:
Net Investment Income:
Fiduciary Shares ......................... (299,157) (244,672) (37,861) (25,991) (668,420) (674,084)
Class A Shares ........................... (84,654) (58,773) (9,261) (2,842) (24,627) (20,034)
Class B Shares ........................... (3,030) (2,575) -- -- (621) (1,754)
Class C Shares ........................... (6,439) (2,064) (1,346) (1,244) (1,319) (1,208)
Class M Shares ........................... -- -- (1,174,219) (584,923) -- --
Capital Gains:
Fiduciary Shares ......................... -- -- -- -- -- --
Class A Shares ........................... -- -- -- -- -- --
Class B Shares ........................... -- -- -- -- -- --
Class C Shares ........................... -- -- -- -- -- --
------------ ------------ ----------- ------------ ------------ ------------
Total Dividends and Distributions ..... (393,280) (308,084) (1,222,687) (615,000) (694,987) (697,080)
------------ ------------ ----------- ------------ ------------ ------------
Net Increase (Decrease) in Net Assets
From:
Share Transactions (1) ................... (1,165,270) (394,912) 2,713,496 (9,409,888) (11,961,278) (12,962,338)
Redemption Fees (Note 2) ................. -- -- 11 7 -- --
------------ ------------ ----------- ------------ ------------ ------------
Total Increase (Decrease) in Net
Assets ............................. 1,419,341 1,981,905 20,730,308 3,501,100 (2,003,670) (4,677,700)
------------ ------------ ----------- ------------ ------------ ------------
Net Assets:
Beginning of Year ........................... 24,173,553 22,191,648 73,795,212 70,294,112 59,125,645 63,803,345
------------ ------------ ----------- ------------ ------------ ------------
End of Year ................................. 25,592,894 $ 24,173,553 $94,525,520 $ 73,795,212 $ 57,121,975 $ 59,125,645
============ ============ =========== ============ ============ ============
Undistributed Net Investment
Income/(Accumulated Net Investment Loss) .... $ 12,964 $ 119,649 $ 260,195 $ 216,682 $ 10,804 $ 54,144
============ ============ =========== ============ ============ ============
Amounts designated as "--" are either not applicable or less than $1.00.
(1) For details on share transaction by class, see statements of changes in net
assets - capital stock activity on pages 152 - 163.
The accompanying notes are an integral part of the financial statements.
144 HIGHMARK(R) FUNDS
ENHANCED GROWTH EQUITY INCOME
FUND FUND
--------------------------- ---------------------------
2011 2010 2011 2010
------------ ------------ ------------ ------------
Investment Activities:
Net Investment Income ................................. $ (194,706) $ (53,656) $ 451,702 $ 446,154
Net Realized Gain (Loss) on Investments, Written Option
Contracts and Futures Contracts .................... 2,495,354 4,306,876 1,040,035 (541,787)
Change in Unrealized Appreciation (Depreciation) on
Investments and Futures contracts .................. 14,025,216 4,891,765 1,146,910 2,551,009
------------ ------------ ------------ ------------
Net Increase in Net Assets Resulting From Operations .. 16,325,864 9,144,985 2,638,647 2,455,376
------------ ------------ ------------ ------------
Dividends and Distributions to Shareholders:
Net Investment Income:
Fiduciary Shares ................................... -- (779) (89,195) (592)
Class A Shares ..................................... -- (160) (299,908) (273,829)
Class B Shares ..................................... -- -- (43,296) (39,506)
Class C Shares ..................................... -- (2) (57,629) (45,525)
Class M Shares ..................................... -- (108,244) -- --
Capital Gains:
Fiduciary Shares ................................... -- -- -- --
Class A Shares ..................................... -- -- -- --
Class B Shares ..................................... -- -- -- --
Class C Shares ..................................... -- -- -- --
------------ ------------ ------------ ------------
Total Dividends and Distributions ............... -- (109,185) (490,028) (359,452)
------------ ------------ ------------ ------------
Net Increase (Decrease) in Net Assets From:
Share Transactions (1) ............................. 5,539,967 (9,354,852) 2,654,507 (5,146,256)
Redemption Fees (Note 2) ........................... -- -- -- --
------------ ------------ ------------ ------------
Total Increase (Decrease) in Net Assets ......... 21,865,831 (319,052) 4,803,126 (3,050,332)
------------ ------------ ------------ ------------
Net Assets:
Beginning of Year ..................................... 68,541,606 68,860,658 13,991,495 17,041,827
------------ ------------ ------------ ------------
End of Year ........................................... $ 90,407,437 $ 68,541,606 $ 18,794,621 $ 13,991,495
============ ============ ============ ============
Undistributed Net Investment Income/(Accumulated Net
Investment Loss) ...................................... $ (60,079) $ (63,500) $ 1,714 $ 49,869
============ ============ ============ ============
FUNDAMENTAL EQUITY GENEVA MID CAP GROWTH
FUND FUND
--------------------------- ---------------------------
2011 2010 2011 2010
------------ ------------ ------------ ------------
Investment Activities:
Net Investment Income ................................. $ 111,481 $ 189,677 $ (3,043,801) $ (1,932,099)
Net Realized Gain (Loss) on Investments, Written
Option Contracts and Futures Contracts ............. 871,531 182,285 13,116,117 10,973,440
Change in Unrealized Appreciation (Depreciation) on
Investments and Futures contracts .................. 1,669,684 1,038,585 47,839,217 25,160,888
------------ ------------ ------------ ------------
Net Increase in Net Assets Resulting From Operations .. 2,652,696 1,410,547 57,911,533 34,202,229
------------ ------------ ------------ ------------
Dividends and Distributions to Shareholders:
Net Investment Income:
Fiduciary Shares ................................... (210,691) (83,773) -- --
Class A Shares ..................................... (100) (21) -- --
Class B Shares ..................................... -- -- -- --
Class C Shares ..................................... (49) (19) -- --
Class M Shares ..................................... -- -- -- --
Capital Gains:
Fiduciary Shares ................................... -- -- (50,987) --
Class A Shares ..................................... -- -- (272,612) --
Class B Shares ..................................... -- -- (9,247) --
Class C Shares ..................................... -- -- (33,609) --
------------ ------------ ------------ ------------
Total Dividends and Distributions ............... (210,840) (83,813) (366,455) --
------------ ------------ ------------ ------------
Net Increase (Decrease) in Net Assets From:
Share Transactions (1) ............................. 171,382 2,829,031 170,567,798 15,157,990
Redemption Fees (Note 2) ........................... -- -- -- --
------------ ------------ ------------ ------------
Total Increase (Decrease) in Net Assets ......... 2,613,238 4,155,765 228,112,876 49,360,219
------------ ------------ ------------ ------------
Net Assets:
Beginning of Year ..................................... 15,608,509 11,452,744 221,617,620 172,257,401
------------ ------------ ------------ ------------
End of Year ........................................... $ 18,221,747 $ 15,608,509 $449,730,496 $221,617,620
============ ============ ============ ============
Undistributed Net Investment Income/(Accumulated Net
Investment Loss) ...................................... $ 48,166 $ 147,525 $ -- $ --
============ ============ ============ ============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 145
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED JULY 31 (UNLESS OTHERWISE INDICATED)
GENEVA SMALL
CAP GROWTH INTERNATIONAL OPPORTUNITIES LARGE CAP GROWTH
FUND FUND FUND
------------------------- -------------------------- --------------------------
2011 2010 2011 2010 2011 2010
----------- ------------ ------------ ------------ ------------ ------------
Investment Activities:
Net Investment Income ....................... $ (199,858) $ (67,492) $ 4,362,210 $ 3,382,027 $ 88,925 $ 963,265
Net Realized Gain (Loss) on Investments,
Foreign Currency Transactions, Foreign
Currency Contracts and
Futures Contracts ........................ 1,297,244 309,993 28,470,335 20,456,519 6,490,574 3,597,327
Change in Unrealized Appreciation
(Depreciation) on Investments, Foreign
Currency Transactions, Foreign Currency
Contracts and Futures Contracts .......... 2,220,064 716,135 10,771,070 (6,315,968) 8,714,295 6,921,645
----------- ------------ ------------ ------------ ------------ ------------
Net Increase in Net Assets Resulting From
Operations ................................ 3,317,450 958,636 43,603,615 17,522,578 15,293,794 11,482,237
----------- ------------ ------------ ------------ ------------ ------------
Dividends and Distributions to Shareholders:
Net Investment Income:
Fiduciary Shares ......................... -- -- (1,660,836) (1,712,157) (793,194) (528,202)
Class A Shares ........................... -- -- (115,447) (240,267) (159,002) (165,268)
Class B Shares ........................... -- -- -- -- -- --
Class C Shares ........................... -- -- (27,269) (31,067) (10,657) (20,349)
Class M Shares ........................... -- -- (3,099,328) (3,358,353) -- --
Capital Gains:
Fiduciary Shares ......................... (324,668) -- -- -- -- --
Class A Shares ........................... (158,545) -- -- -- -- --
Class C Shares ........................... (13,819) -- -- -- -- --
----------- ------------ ------------ ------------ ------------ ------------
Total Dividends and Distributions ..... (497,032) -- (4,902,880) (5,341,844) (962,853) (713,819)
----------- ------------ ------------ ------------ ------------ ------------
Net Increase (Decrease) in Net Assets From:
Share Transactions (1) ................... 11,057,444 5,151,518 (8,581,549) (1,043,692) (22,096,558) (17,800,771)
Redemption Fees (Note 2) ................. 875 50 135 3,405 -- --
----------- ------------ ------------ ------------ ------------ ------------
Total Increase (Decrease) in Net
Assets ............................. 13,878,737 6,110,204 30,119,321 11,140,447 (7,765,617) (7,032,353)
----------- ------------ ------------ ------------ ------------ ------------
Net Assets:
Beginning of Year ........................... 9,732,310 3,622,106 221,225,474 210,085,027 86,335,668 93,368,021
----------- ------------ ------------ ------------ ------------ ------------
End of Year ................................. 23,611,047 $ 9,732,310 $251,344,795 $221,225,474 $ 78,570,051 $ 86,335,668
=========== ============ ============ ============ ============ ============
Undistributed Net Investment Income/(Accumulated
Net Investment Loss) ........................ $ -- $ -- $ 4,383,125 $ 4,220,837 $ 87,672 $ 961,600
=========== ============ ============ ============ ============ ============
Amounts designated as "--" are either not applicable or less than $1.00.
(1) For details on share transaction by class, see statements of changes in
net assets - capital stock activity on pages 152 - 163.
The accompanying notes are an integral part of the financial statements.
146 HIGHMARK(R) FUNDS
LARGE CAP VALUE NYSE ARCA TECH 100 INDEX
FUND FUND
--------------------------- ---------------------------
2011 2010 2011 2010
------------ ------------ ------------ ------------
Investment Activities:
Net Investment Income ................................. $ 1,041,573 $ 3,208,143 $ (423,563) $ (641,766)
Net Realized Gain (Loss) on Investments, Foreign Currency
Transactions, Foreign Currency Contracts and Futures
Contracts .......................................... 2,608,005 17,633,560 9,528,381 5,095,461
Change in Unrealized Appreciation (Depreciation) on
Investments, Foreign Currency Transactions, Foreign
Currency Contracts and Futures Contracts ........... 10,754,053 501,588 35,644,081 24,552,907
------------ ------------ ------------ ------------
Net Increase in Net Assets Resulting From Operations .. 14,403,631 21,343,291 44,748,899 29,006,602
------------ ------------ ------------ ------------
Dividends and Distributions to Shareholders:
Net Investment Income:
Fiduciary Shares ................................... (1,707,470) (1,862,693) -- --
Class A Shares ..................................... (393,474) (269,979) -- --
Class B Shares ..................................... (13,709) (7,285) -- --
Class C Shares ..................................... (37,219) (16,247) -- --
Class M Shares ..................................... -- -- -- --
Capital Gains:
Fiduciary Shares ................................... -- -- -- --
Class A Shares ..................................... -- -- -- --
Class C Shares ..................................... -- -- -- --
------------ ------------ ------------ ------------
Total Dividends and Distributions ............... (2,151,872) (2,156,204) -- --
------------ ------------ ------------ ------------
Net Increase (Decrease) in Net Assets From:
Share Transactions (1) ............................. (40,402,669) (80,535,260) (21,125,211) (37,821,926)
Redemption Fees (Note 2) ........................... -- -- -- --
------------ ------------ ------------ ------------
Total Increase (Decrease) in Net Assets ......... (28,150,910) (61,348,173) 23,623,688 (8,815,324)
------------ ------------ ------------ ------------
Net Assets:
Beginning of Year ..................................... 124,251,628 185,599,801 183,147,016 191,962,340
------------ ------------ ------------ ------------
End of Year ........................................... $ 96,100,718 $124,251,628 $206,770,704 $183,147,016
============ ============ ============ ============
Undistributed Net Investment Income/(Accumulated Net
Investment Loss) ...................................... $ (2,497) $ 1,102,153 $ -- $ --
============ ============ ============ ============
SMALL CAP ADVANTAGE SMALL CAP VALUE
FUND FUND
--------------------------- ---------------------------
2011 2010 2011 2010
------------ ------------ ------------ ------------
Investment Activities:
Net Investment Income ................................. $ (85,902) $ (74,293) $ 777,490 $ 652,503
Net Realized Gain (Loss) on Investments, Foreign Currency
Transactions, Foreign Currency Contracts and Futures
Contracts .......................................... 4,957,295 1,926,003 7,241,466 (7,526,496)
Change in Unrealized Appreciation (Depreciation) on
Investments, Foreign Currency Transactions, Foreign
Currency Contracts and Futures Contracts ........... 2,539,022 3,270,830 5,164,400 24,817,284
------------ ------------ ------------ ------------
Net Increase in Net Assets Resulting From Operations .. 7,410,415 5,122,540 13,183,356 17,943,291
------------ ------------ ------------ ------------
Dividends and Distributions to Shareholders:
Net Investment Income:
Fiduciary Shares ................................... -- (96,482) (458,665) (392,325)
Class A Shares ..................................... -- (600) (326,767) (413,599)
Class B Shares ..................................... -- -- -- (13,921)
Class C Shares ..................................... -- -- (25,539) (29,210)
Class M Shares ..................................... -- -- -- --
Capital Gains:
Fiduciary Shares ................................... -- -- -- --
Class A Shares ..................................... -- -- -- --
Class C Shares ..................................... -- -- -- --
------------ ------------ ------------ ------------
Total Dividends and Distributions ............... -- (97,082) (810,971) (849,055)
------------ ------------ ------------ ------------
Net Increase (Decrease) in Net Assets From:
Share Transactions (1) ............................. (3,435,221) (3,509,495) (32,810,128) (22,904,102)
Redemption Fees (Note 2) ........................... 63 -- 387 1,051
------------ ------------ ------------ ------------
Total Increase (Decrease) in Net Assets ......... 3,975,257 1,515,963 (20,437,356) (5,808,815)
------------ ------------ ------------ ------------
Net Assets:
Beginning of Year ..................................... 23,914,048 22,398,085 70,386,970 76,195,785
------------ ------------ ------------ ------------
End of Year ........................................... $ 27,889,305 $ 23,914,048 $ 49,949,614 $ 70,386,970
============ ============ ============ ============
Undistributed Net Investment Income/(Accumulated Net
Investment Loss) ...................................... $ -- $ -- $ 187,479 $ 220,960
============ ============ ============ ============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 147
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED JULY 31 (UNLESS OTHERWISE INDICATED)
VALUE MOMENTUM CAPITAL GROWTH ALLOCATION DIVERSIFIED EQUITY ALLOCATION
FUND FUND FUND
---------------------------- ---------------------------- -----------------------------
2011 2010 2011 2010 2011 2010
---------------------------- ---------------------------- -----------------------------
Investment Activities:
Net Investment Income ............... $ 3,728,139 $ 6,109,913 $ 213,303 $ 188,267 $ 7,496 $ 6,750
Net Realized Gain (Loss) on
Investments, Affiliated Funds,
Foreign Currency Transactions
and Capital Gains Distributions
Received ......................... 25,675,541 9,071,167 406,698 (3,547,749) 1,056,248 (300,184)
Change in Unrealized Appreciation
(Depreciation) on Investments,
Affiliated Funds and Foreign
Currency Transactions ............ 28,857,353 26,098,625 6,162,702 8,482,645 132,873 1,089,862
------------- ------------- ------------- ------------- -------------- -------------
Net Increase in Net Assets
Resulting From Operations ........ 58,261,033 41,279,705 6,782,703 5,123,163 1,196,617 796,428
------------- ------------- ------------- ------------- -------------- -------------
Dividends and Distributions to
Shareholders:
Net Investment Income:
Fiduciary Shares ................. (4,901,329) (2,884,929) (1,522) (2,035) (2,078) (182)
Class A Shares ................... (1,351,277) (733,393) (200,051) (187,322) (4,188) (9,513)
Class B Shares ................... (40,417) (15,094) -- -- -- --
Class C Shares ................... (34,583) (10,088) (5,745) (47,557) -- (2,010)
Capital Gains:
Fiduciary Shares ................. -- -- -- -- -- --
Class A Shares ................... -- -- -- -- -- --
Class B Shares ................... -- -- -- -- -- --
Class C Shares ................... -- -- -- -- -- --
------------- ------------- ------------- ------------- -------------- -------------
Total Dividends and
Distributions ........... (6,327,606) (3,643,504) (207,318) (236,914) (6,266) (11,705)
------------- ------------- ------------- ------------- -------------- -------------
Net Increase (Decrease) in Net
Assets From:
Share Transactions (2) ........... (47,550,109) (45,061,793) (2,204,054) (3,101,568) 6,864,131 920,905
------------- ------------- ------------- ------------- -------------- -------------
Total Increase (Decrease)
in Net Assets ........... 4,383,318 (7,425,592) 4,371,331 1,784,681 8,054,482 1,705,628
------------- ------------- ------------- ------------- -------------- -------------
Net Assets:
Beginning of Year ................... 306,280,908 313,706,500 39,844,761 38,060,080 7,510,287 5,804,659
------------- ------------- ------------- ------------- -------------- -------------
End of Year ......................... $ 310,664,226 $ 306,280,908 $ 44,216,092 $ 39,844,761 $ 15,564,769 $ 7,510,287
============= ============= ============= ============= ============== =============
Undistributed Net Investment
Income/(Accumulated Net Investment
Loss) ............................... $ (3,755) $ 2,527,968 $ 49,148 $ 32,115 $ 9,884 $ 6,248
============= ============= ============= ============= ============== =============
Amounts designated as "--" are either not applicable or less than $1.00.
(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 152 - 163.
The accompanying notes are an integral part of the financial statements.
148 HIGHMARK(R) FUNDS
GROWTH &
INCOME ALLOCATION INCOME PLUS ALLOCATION BOND
FUND FUND FUND
--------------------------- --------------------------- -----------------------------
2011 2010 2011 2010 2011 2010
--------------------------- --------------------------- -----------------------------
Investment Activities:
Net Investment Income ............... $ 427,577 $ 401,824 $ 239,202 $ 219,240 $ 13,534,592 $ 14,683,027
Net Realized Gain (Loss) on
Investments, Affiliated Funds,
Foreign Currency Transactions
and Capital Gains Distributions
Received ......................... 2,684,792 (1,583,273) 1,432,913 466,506 8,249,013 4,420,896
Change in Unrealized Appreciation
(Depreciation) on Investments,
Affiliated Funds and Foreign
Currency Transactions ............ 3,027,599 5,842,837 (161,574) 429,549 (2,381,071) 15,381,721
------------ ------------ ------------ ------------ ------------- -------------
Net Increase in Net Assets
Resulting From Operations ........ 6,139,968 4,661,388 1,510,541 1,115,295 19,402,534 34,485,644
------------ ------------ ------------ ------------ ------------- -------------
Dividends and Distributions to
Shareholders:
Net Investment Income:
Fiduciary Shares ................. (4,986) (1,949) (4,815) (4,562) (12,484,462) (13,688,181)
Class A Shares ................... (341,717) (331,804) (165,251) (143,402) (1,053,646) (1,055,075)
Class B Shares ................... -- -- -- -- (28,497) (69,625)
Class C Shares ................... (98,550) (110,753) (79,844) (57,376) (208,572) (94,383)
Capital Gains:
Fiduciary Shares ................. -- -- (826) -- (2,773,259) --
Class A Shares ................... -- -- (33,929) -- (256,107) --
Class B Shares ................... -- -- -- -- (10,059) --
Class C Shares ................... -- -- (26,211) -- (57,758) --
------------ ------------ ------------ ------------ ------------- -------------
Total Dividends and
Distributions ........... (445,253) (444,506) (310,876) (205,340) (16,872,360) (14,907,264)
------------ ------------ ------------ ------------ ------------- -------------
Net Increase (Decrease) in Net
Assets From:
Share Transactions (2) ........... 2,857,620 95,438 562,973 5,018,238 7,382,882 11,362,016
------------ ------------ ------------ ------------ ------------- -------------
Total Increase (Decrease)
in Net Assets ........... 8,552,335 4,312,320 1,762,638 5,928,193 9,913,056 30,940,396
------------ ------------ ------------ ------------ ------------- -------------
Net Assets:
Beginning of Year ................... 43,247,816 38,935,496 15,714,951 9,786,758 364,778,465 333,838,069
------------ ------------ ------------ ------------ ------------- -------------
End of Year ......................... $ 51,800,151 $ 43,247,816 $ 17,477,589 $ 15,714,951 $ 374,691,521 $ 364,778,465
============ ============ ============ ============ ============= =============
Undistributed Net Investment
Income/(Accumulated Net Investment
Loss) ............................... $ 54,908 $ 62,168 $ 18,373 $ 26,677 $ 229,716 $ 235,062
============ ============ ============ ============ ============= =============
CALIFORNIA INTERMEDIATE NATIONAL INTERMEDIATE
TAX-FREE BOND FUND TAX-FREE BOND FUND
--------------------------- ---------------------------
2011 2010 2011 2010(1)
--------------------------- ---------------------------
Investment Activities:
Net Investment Income ............... $ 5,808,105 $ 5,343,670 $ 2,972,472 $ 2,914,872
Net Realized Gain (Loss) on
Investments, Affiliated Funds,
Foreign Currency Transactions
and Capital Gains Distributions
Received ......................... (115,747) 34 75 10,186
Change in Unrealized Appreciation
(Depreciation) on Investments,
Affiliated Funds and Foreign
Currency Transactions ............ (1,501,496) 3,719,978 (744,306) 2,398,839
------------ ------------ ------------ ------------
Net Increase in Net Assets
Resulting From Operations ........ 4,190,862 9,063,682 2,228,241 5,323,897
------------ ------------ ------------ ------------
Dividends and Distributions to
Shareholders:
Net Investment Income:
Fiduciary Shares ................. (3,238,236) (3,319,982) (2,302,774) (2,278,065)
Class A Shares ................... (2,059,561) (1,744,847) (600,737) (607,623)
Class B Shares ................... (5,440) (24,470) -- --
Class C Shares ................... (419,488) (242,758) (81,894) (17,674)
Capital Gains:
Fiduciary Shares ................. -- (169,020) (11,297) --
Class A Shares ................... -- (90,864) (3,232) --
Class B Shares ................... -- (2,029) -- --
Class C Shares ................... -- (14,001) (490) --
------------ ------------ ------------ ------------
Total Dividends and
Distributions ........... (5,722,725) (5,607,971) (3,000,424) (2,903,362)
------------ ------------ ------------ ------------
Net Increase (Decrease) in Net
Assets From:
Share Transactions (2) ........... 22,100,554 48,745,858 2,691,721 9,113,103
------------ ------------ ------------ ------------
Total Increase (Decrease)
in Net Assets ........... 20,568,691 52,201,569 1,919,538 11,533,638
------------ ------------ ------------ ------------
Net Assets:
Beginning of Year ................... 204,013,315 151,811,746 105,818,233 94,284,595
------------ ------------ ------------ ------------
End of Year ......................... $224,582,006 $204,013,315 $107,737,771 $105,818,233
============ ============ ============ ============
Undistributed Net Investment
Income/(Accumulated Net Investment
Loss) ............................... $ 113,140 $ 27,760 $ 12,299 $ 26,106
============ ============ ============ ============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 149
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED JULY 31 (UNLESS OTHERWISE INDICATED)
SHORT TERM BOND WISCONSIN
FUND TAX-EXEMPT FUND
----------------------------- -----------------------------
2011 2010 2011(1) 2010
----------------------------- -----------------------------
Investment Activities:
Net Investment Income ............... $ 2,615,279 $ 2,350,051 $ 5,318,948 $ 5,281,965
Net Realized Gain (Loss) on
Investments ....................... 399,316 122,909 (438,670) 396,712
Change in Unrealized Appreciation
(Depreciation) on Investments .... (250,248) 1,031,230 (1,833,800) 5,855,281
------------- ------------- ------------- -------------
Net Increase in Net Assets
Resulting From Operations ........ 2,764,347 3,504,190 3,046,478 11,533,958
------------- ------------- ------------- -------------
Dividends and Distributions to
Shareholders:
Net Investment Income:
Fiduciary Shares ................. (2,029,877) (1,833,809) (5,272) --
Class A Shares ................... (547,080) (454,749) (4,947,628) (5,009,291)
Class B Shares ................... -- -- (71,503) (84,091)
Class C Shares ................... (359,850) (214,811) (338,374) (231,262)
Capital Gains:
Fiduciary Shares ................. -- -- (158) --
Class A Shares ................... -- -- (166,152) --
Class B Shares ................... -- -- (3,169) --
Class C Shares ................... -- -- (12,982) --
------------- ------------- ------------- -------------
Total Dividends and
Distributions ........... (2,936,807) (2,503,369) (5,545,238) (5,324,644)
------------- ------------- ------------- -------------
Net Increase (Decrease) in Net
Assets From:
Share Transactions (2) ........... 21,609,236 46,284,631 (13,843,312) 3,562,948
------------- ------------- ------------- -------------
Total Increase (Decrease)
in Net Assets ........... 21,436,776 47,285,452 (16,342,072) 9,772,262
------------- ------------- ------------- -------------
Net Assets:
Beginning of Year ................... 111,268,318 63,982,866 159,720,027 149,947,765
------------- ------------- ------------- -------------
End of Year ......................... $ 132,705,094 $ 111,268,318 $ 143,377,955 $ 159,720,027
============= ============= ============= =============
Undistributed Net Investment
Income/(Accumulated Net Investment
Loss) ............................... $ 16,757 $ 15,737 $ 13,825 $ 58,804
============= ============= ============= =============
Amounts designated as "--" are either not applicable or less than $1.00.
(1) The Fund began issuing Fiduciary Shares on August 3, 2010.
(2) For details on share transaction by class, see statements of changes in
net assets - capital stock activity on pages 152 - 163.
The accompanying notes are an integral part of the financial statements.
150 HIGHMARK(R) FUNDS
This Page Left Blank Intentionally.
HIGHMARK(R) FUNDS 151
STATEMENTS OF CHANGES IN NET ASSETS - CAPITAL STOCK ACTIVITY
FOR THE YEARS ENDED JULY 31 (UNLESS OTHERWISE INDICATED)
BALANCED FUND
-----------------------------------------------------
2011 2010
SHARES DOLLARS SHARES DOLLARS
-----------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ..................... 174,457 $ 2,406,987 190,125 $ 2,348,826
Reinvestment of Dividends and Distributions ..... 21,931 299,089 19,915 244,672
Cost of Shares Redeemed ......................... (282,838) (3,856,590) (297,254) (3,623,346)
---------- ------------ ---------- ------------
Total Fiduciary Share Transactions ........... (86,450) (1,150,514) (87,214) (1,029,848)
---------- ------------ ---------- ------------
Class A Shares:
Proceeds from Shares Issued ..................... 79,620 1,101,253 94,813 1,178,505
Reinvestment of Dividends and Distributions ..... 5,716 77,812 4,424 54,301
Cost of Shares Redeemed ......................... (80,459) (1,098,427) (47,879) (588,062)
---------- ------------ ---------- ------------
Total Class A Share Transactions ............. 4,877 80,638 51,358 644,744
---------- ------------ ---------- ------------
Class B Shares:
Proceeds from Shares Issued ..................... 1,390 19,259 19,472 241,656
Reinvestment of Dividends and Distributions ..... 222 3,002 209 2,558
Cost of Shares Redeemed ......................... (28,578) (395,314) (31,679) (393,892)
---------- ------------ ---------- ------------
Total Class B Share Transactions ............. (26,966) (373,053) (11,998) (149,678)
---------- ------------ ---------- ------------
Class C Shares:
Proceeds from Shares Issued ..................... 23,965 319,781 18,985 234,788
Reinvestment of Dividends and Distributions ..... 454 6,154 164 1,999
Cost of Shares Redeemed (3,536) (48,276) (7,870) (96,917)
---------- ------------ ---------- ------------
Total Class C Share Transactions ............. 20,883 277,659 11,279 139,870
---------- ------------ ---------- ------------
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 ..................................... (87,656) $ (1,165,270) (36,575) $ (394,912)
========== ============ ========== ============
COGNITIVE VALUE FUND
-----------------------------------------------------
2011 2010
SHARES DOLLARS SHARES DOLLARS
-----------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ..................... 275,045 $ 3,060,849 155,302 $ 1,262,448
Reinvestment of Dividends and Distributions ..... 983 10,639 1,819 15,500
Cost of Shares Redeemed ......................... (72,900) (805,243) (152,405) (1,384,099)
---------- ------------ ---------- ------------
Total Fiduciary Share Transactions ........... 203,128 2,266,245 4,716 (106,151)
---------- ------------ ---------- ------------
Class A Shares:
Proceeds from Shares Issued ..................... 58,672 623,737 36,911 325,652
Reinvestment of Dividends and Distributions ..... 834 9,046 326 2,792
Cost of Shares Redeemed ......................... (45,806) (492,114) (9,602) (87,308)
---------- ------------ ---------- ------------
Total Class A Share Transactions ............. 13,700 140,669 27,635 241,136
---------- ------------ ---------- ------------
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 ..................... 32,385 350,167 13,975 119,610
Reinvestment of Dividends and Distributions ..... 116 1,231 149 1,244
Cost of Shares Redeemed ......................... (38,890) (414,758) (10,870) (97,611)
---------- ------------ ---------- ------------
Total Class C Share Transactions ............. (6,389) (63,360) 3,254 23,243
---------- ------------ ---------- ------------
Class M Shares:
Proceeds from Shares Issued ..................... 1,057,545 10,575,434 300,051 2,620,564
Reinvestment of Dividends and Distributions ..... 84,977 919,625 54,209 461,856
Cost of Shares Redeemed ......................... (1,018,124) (11,125,117) (1,447,057) (12,650,536)
---------- ------------ ---------- ------------
Total Class M Share Transactions ............. 124,398 369,942 (1,092,797) (9,568,116)
---------- ------------ ---------- ------------
Net Increase (Decrease) from Capital Stock
Activity ..................................... 334,837 $ 2,713,496 (1,057,192) $ (9,409,888)
========== ============ ========== ============
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
152 HIGHMARK(R) FUNDS
CORE EQUITY FUND
-----------------------------------------------------
2011 2010
SHARES DOLLARS SHARES DOLLARS
-----------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ..................... 764,345 $ 6,325,393 600,079 $ 4,331,484
Reinvestment of Dividends and Distributions ..... 33,012 267,792 38,237 274,898
Cost of Shares Redeemed ......................... (2,186,481) (18,173,729) (2,420,542) (17,309,113)
---------- ------------ ---------- ------------
Total Fiduciary Share Transactions ........... (1,389,124) (11,580,544) (1,782,226) (12,702,731)
---------- ------------ ---------- ------------
Class A Shares:
Proceeds from Shares Issued ..................... 72,209 611,978 99,094 722,925
Reinvestment of Dividends and Distributions ..... 2,842 23,172 2,543 18,295
Cost of Shares Redeemed ......................... (83,095) (683,839) (50,295) (367,373)
---------- ------------ ---------- ------------
Total Class A Share Transactions ............. (8,044) (48,689) 51,342 373,847
---------- ------------ ---------- ------------
Class B Shares:
Proceeds from Shares Issued ..................... 5,376 44,031 20,019 144,738
Reinvestment of Dividends and Distributions ..... 78 621 244 1,692
Cost of Shares Redeemed ......................... (59,059) (490,364) (100,741) (717,645)
---------- ------------ ---------- ------------
Total Class B Share Transactions ............. (53,605) (445,712) (80,478) (571,215)
---------- ------------ ---------- ------------
Class C Shares:
Proceeds from Shares Issued ..................... 21,758 167,546 5,622 39,615
Reinvestment of Dividends and Distributions ..... 114 918 147 1,023
Cost of Shares Redeemed ......................... (7,026) (54,797) (14,846) (102,877)
---------- ------------ ---------- ------------
Total Class C Share Transactions ............. 14,846 113,667 (9,077) (62,239)
---------- ------------ ---------- ------------
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 ..................................... (1,435,927) $(11,961,278) (1,820,439) $(12,962,338)
========== ============ ========== ============
ENHANCED GROWTH FUND
-----------------------------------------------------
2011 2010
SHARES DOLLARS SHARES DOLLARS
-----------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ..................... 169,363 $ 1,844,966 142,824 $ 1,269,119
Reinvestment of Dividends and Distributions ..... -- -- 65 606
Cost of Shares Redeemed ......................... (174,741) (1,840,560) (207,977) (1,866,375)
---------- ------------ ---------- ------------
Total Fiduciary Share Transactions ........... (5,378) 4,406 (65,088) (596,650)
---------- ------------ ---------- ------------
Class A Shares:
Proceeds from Shares Issued ..................... 130,470 1,430,829 305,773 2,800,369
Reinvestment of Dividends and Distributions ..... -- -- 9 83
Cost of Shares Redeemed ......................... (202,217) (2,058,081) (164,217) (1,511,394)
---------- ------------ ---------- ------------
Total Class A Share Transactions ............. (71,747) (627,252) 141,565 1,289,058
---------- ------------ ---------- ------------
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 ..................... 13,856 151,321 11,168 92,399
Reinvestment of Dividends and Distributions ..... -- -- -- 2
Cost of Shares Redeemed ......................... (8,677) (94,826) (6,439) (56,484)
---------- ------------ ---------- ------------
Total Class C Share Transactions ............. 5,179 56,495 4,729 35,917
---------- ------------ ---------- ------------
Class M Shares:
Proceeds from Shares Issued ..................... 1,468,918 14,555,580 277,982 2,494,622
Reinvestment of Dividends and Distributions ..... -- -- 9,093 84,199
Cost of Shares Redeemed ......................... (777,133) (8,449,262) (1,445,795) (12,661,998)
---------- ------------ ---------- ------------
Total Class M Share Transactions ............. 691,785 6,106,318 (1,158,720) (10,083,177)
---------- ------------ ---------- ------------
Net Increase (Decrease) from Capital Stock
Activity ..................................... 619,839 $ 5,539,967 (1,077,514) $ (9,354,852)
========== ============ ========== ============
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 ENDED JULY 31 (UNLESS OTHERWISE INDICATED)
EQUITY INCOME FUND
--------------------------------------------------------
2011 2010
SHARES DOLLARS SHARES DOLLARS
--------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ..................... 620,012 $ 5,645,421 1,165 $ 9,347
Reinvestment of Dividends and
Distributions ................................. 9,680 89,163 9 74
Cost of Shares Redeemed ......................... (30,039) (273,584) (10,885) (74,904)
---------- ------------- ----------- -------------
Total Fiduciary Share Transactions ........... 599,653 5,461,000 (9,711) (65,483)
---------- ------------- ----------- -------------
Class A Shares:
Proceeds from Shares Issued ..................... 113,305 1,038,229 112,276 883,860
Transfer from Fiduciary Shares .................. -- -- 10,885 74,904
Reinvestment of Dividends and
Distributions ................................. 30,663 269,203 31,237 245,221
Cost of Shares Redeemed ......................... (400,198) (3,486,854) (580,701) (4,476,212)
---------- ------------- ----------- -------------
Total Class A Share Transactions ............. (256,230) (2,179,422) (426,303) (3,272,227)
---------- ------------- ----------- -------------
Class B Shares:
Proceeds from Shares Issued ..................... 447 3,842 3,644 28,861
Reinvestment of Dividends and
Distributions ................................. 4,537 39,939 4,494 35,434
Cost of Shares Redeemed ......................... (63,428) (568,898) (113,992) (892,257)
---------- ------------- ----------- -------------
Total Class B Share Transactions ............. (58,444) (525,117) (105,854) (827,962)
---------- ------------- ----------- -------------
Class C Shares:
Proceeds from Shares Issued ..................... 32,010 294,463 8,614 69,103
Reinvestment of Dividends and
Distributions ................................. 5,698 49,855 5,103 39,930
Cost of Shares Redeemed ......................... (51,059) (446,272) (142,522) (1,089,617)
---------- ------------- ----------- -------------
Total Class C Share Transactions ............. (13,351) (101,954) (128,805) (980,584)
---------- ------------- ----------- -------------
Net Increase (Decrease) from Capital
Stock Activity ................................ 271,628 $ 2,654,507 (670,673) $ (5,146,256)
========== ============= =========== =============
FUNDAMENTAL EQUITY FUND
--------------------------------------------------------
2011 2010
SHARES DOLLARS SHARES DOLLARS
--------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ..................... 321,949 $ 6,614,421 297,275 $ 5,295,068
Reinvestment of Dividends and
Distributions ................................. 6,794 138,664 2,625 47,886
Cost of Shares Redeemed ......................... (316,774) (6,601,856) (141,278) (2,528,089)
---------- ------------- ----------- -------------
Total Fiduciary Share Transactions ........... 11,969 151,229 158,622 2,814,865
---------- ------------- ----------- -------------
Class A Shares:
Proceeds from Shares Issued ..................... 1,283 26,395 165 2,730
Transfer from Fiduciary Shares .................. -- -- -- --
Reinvestment of Dividends and
Distributions ................................. 4 89 1 11
Cost of Shares Redeemed ......................... (968) (20,202) (39) (665)
---------- ------------- ----------- -------------
Total Class A Share Transactions ............. 319 6,282 127 2,076
---------- ------------- ----------- -------------
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 ..................... 763 16,064 898 16,448
Reinvestment of Dividends and
Distributions ................................. 2 49 1 19
Cost of Shares Redeemed ......................... (104) (2,242) (244) (4,377)
---------- ------------- ----------- -------------
Total Class C Share Transactions ............. 661 13,871 655 12,090
---------- ------------- ----------- -------------
Net Increase (Decrease) from Capital
Stock Activity ................................ 12,949 $ 171,382 159,404 $ 2,829,031
========== ============= =========== =============
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
154 HIGHMARK(R) FUNDS
GENEVA MID CAP GROWTH FUND
--------------------------------------------------------
2011 2010
SHARES DOLLARS SHARES DOLLARS
--------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ..................... 9,147,106 $ 210,427,421 1,063,746 $ 18,037,809
Reinvestment of Dividends and
Distributions ................................. 2,022 44,653 -- --
Cost of Shares Redeemed ......................... (798,702) (18,347,466) (71,522) (1,283,574)
---------- ------------- ----------- -------------
Total Fiduciary Share Transactions ........... 8,350,426 192,124,608 992,224 16,754,235
---------- ------------- ----------- -------------
Class A Shares:
Proceeds from Shares Issued ..................... 3,740,041 82,372,045 3,052,834 51,229,685
Transfer from Fiduciary Shares .................. -- -- -- --
Reinvestment of Dividends and
Distributions ................................. 11,340 249,371 -- --
Cost of Shares Redeemed ......................... (4,997,597) (110,875,703) (3,071,020) (51,710,749)
---------- ------------- ----------- -------------
Total Class A Share Transactions ............. (1,246,216) (28,254,287) (18,186) (481,064)
---------- ------------- ----------- -------------
Class B Shares:
Proceeds from Shares Issued ..................... 6,269 130,443 6,456 100,681
Reinvestment of Dividends and
Distributions ................................. 358 7,211 -- --
Cost of Shares Redeemed ......................... (114,894) (2,240,830) (163,704) (2,553,951)
---------- ------------- ----------- -------------
Total Class B Share Transactions ............. (108,267) (2,103,176) (157,248) (2,453,270)
---------- ------------- ----------- -------------
Class C Shares:
Proceeds from Shares Issued ..................... 560,886 11,614,224 246,143 3,835,951
Reinvestment of Dividends and
Distributions ................................. 1,588 32,328 -- --
Cost of Shares Redeemed ......................... (143,411) (2,845,899) (157,964) (2,497,862)
---------- ------------- ----------- -------------
Total Class C Share Transactions ............. 419,063 8,800,653 88,179 1,338,089
---------- ------------- ----------- -------------
Net Increase (Decrease) from Capital
Stock Activity ................................ 7,415,006 $ 170,567,798 904,969 $ 15,157,990
========== ============= =========== =============
GENEVA SMALL CAP GROWTH FUND
--------------------------------------------------------
2011 2010
SHARES DOLLARS SHARES DOLLARS
--------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ..................... 209,987 $ 6,295,748 189,403 $ 4,337,162
Reinvestment of Dividends and
Distributions ................................. 7,629 229,808 -- --
Cost of Shares Redeemed ......................... (71,317) (2,238,124) (10,902) (242,021)
---------- ------------- ----------- -------------
Total Fiduciary Share Transactions ........... 146,299 4,287,432 178,501 4,095,141
---------- ------------- ----------- -------------
Class A Shares:
Proceeds from Shares Issued ..................... 173,388 5,373,313 44,423 1,054,768
Transfer from Fiduciary Shares .................. -- -- -- --
Reinvestment of Dividends and
Distributions ................................. 5,285 158,544 -- --
Cost of Shares Redeemed ......................... (19,142) (593,879) (8,420) (209,691)
---------- ------------- ----------- -------------
Total Class A Share Transactions ............. 159,531 4,937,978 36,003 845,077
---------- ------------- ----------- -------------
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 ..................... 63,155 1,953,328 10,681 248,815
Reinvestment of Dividends and
Distributions ................................. 465 13,819 -- --
Cost of Shares Redeemed ......................... (4,367) (135,113) (1,711) (37,515)
---------- ------------- ----------- -------------
Total Class C Share Transactions ............. 59,253 1,832,034 8,970 211,300
---------- ------------- ----------- -------------
Net Increase (Decrease) from Capital
Stock Activity ................................ 365,083 $ 11,057,444 223,474 $ 5,151,518
========== ============= =========== =============
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 ENDED JULY 31 (UNLESS OTHERWISE INDICATED)
INTERNATIONAL OPPORTUNITIES FUND
--------------------------------------------------------
2011 2010
SHARES DOLLARS SHARES DOLLARS
--------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued .................... 2,921,932 $ 21,283,106 3,760,312 $ 23,813,144
Reinvestment of Dividends and Distributions .... 107,779 758,762 113,810 729,525
Cost of Shares Redeemed ........................ (3,062,608) (22,011,828) (1,971,883) (12,616,751)
---------- ------------ ---------- ------------
Total Fiduciary Share Transactions .......... (32,897) 30,040 1,902,239 11,925,918
---------- ------------ ---------- ------------
Class A Shares:
Proceeds from Shares Issued .................... 217,725 1,543,650 350,341 2,242,538
Reinvestment of Dividends and Distributions .... 14,522 102,237 35,328 226,098
Cost of Shares Redeemed ........................ (611,967) (4,396,489) (998,450) (6,357,947)
---------- ------------ ---------- ------------
Total Class A Share Transactions ............ (379,720) (2,750,602) (612,781) (3,889,311)
---------- ------------ ---------- ------------
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 .................... 48,871 339,457 61,757 384,258
Reinvestment of Dividends and Distributions .... 3,296 23,042 3,892 24,789
Cost of Shares Redeemed ........................ (57,186) (409,953) (124,689) (783,287)
---------- ------------ ---------- ------------
Total Class C Share Transactions ............ (5,019) (47,454) (59,040) (374,240)
---------- ------------ ---------- ------------
Class M Shares:
Proceeds from Shares Issued .................... 1,331,063 9,688,116 1,043,818 6,586,676
Reinvestment of Dividends and Distributions .... 325,121 2,288,850 399,678 2,561,935
Cost of Shares Redeemed ........................ (2,492,008) (17,790,499) (2,776,194) (17,854,670)
---------- ------------ ---------- ------------
Total Class M Share Transactions ............ (835,824) (5,813,533) (1,332,698) (8,706,059)
---------- ------------ ---------- ------------
Net Decrease from Capital Stock Activity ....... (1,253,460) $ (8,581,549) (102,280) $ (1,043,692)
========== ============ ========== ============
LARGE CAP GROWTH FUND
--------------------------------------------------------
2011 2010
SHARES DOLLARS SHARES DOLLARS
--------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued .................... 977,734 $ 9,511,489 566,488 $ 4,933,367
Reinvestment of Dividends and Distributions .... 44,280 446,785 32,425 288,256
Cost of Shares Redeemed ........................ (2,293,189) (23,232,239) (2,297,086) (19,868,860)
---------- ------------ ---------- ------------
Total Fiduciary Share Transactions .......... (1,271,175) (13,273,965) (1,698,173) (14,647,237)
---------- ------------ ---------- ------------
Class A Shares:
Proceeds from Shares Issued .................... 209,610 2,085,029 732,918 6,144,306
Reinvestment of Dividends and Distributions .... 14,810 146,913 17,622 154,014
Cost of Shares Redeemed ........................ (882,030) (8,436,350) (716,185) (6,089,897)
---------- ------------ ---------- ------------
Total Class A Share Transactions ............ (657,610) (6,204,408) 34,355 208,423
---------- ------------ ---------- ------------
Class B Shares:
Proceeds from Shares Issued .................... 407 3,907 2,163 16,874
Reinvestment of Dividends and Distributions .... -- -- -- --
Cost of Shares Redeemed ........................ (189,171) (1,749,901) (348,107) (2,779,204)
---------- ------------ ---------- ------------
Total Class B Share Transactions ............ (188,764) (1,745,994) (345,944) (2,762,330)
---------- ------------ ---------- ------------
Class C Shares:
Proceeds from Shares Issued .................... 24,388 233,921 33,352 271,904
Reinvestment of Dividends and Distributions .... 1,093 10,102 2,401 19,546
Cost of Shares Redeemed ........................ (125,833) (1,116,214) (113,009) (891,077)
---------- ------------ ---------- ------------
Total Class C Share Transactions ............ (100,352) (872,191) (77,256) (599,627)
---------- ------------ ---------- ------------
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 ....... (2,217,901) $(22,096,558) (2,087,018) $(17,800,771)
========== ============ ========== ============
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
LARGE CAP VALUE FUND
--------------------------------------------------------
2011 2010
SHARES DOLLARS SHARES DOLLARS
--------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued .................... 1,273,932 $ 14,431,261 1,463,448 $ 14,891,474
Reinvestment of Dividends and Distributions .... 117,118 1,297,976 147,204 1,518,985
Cost of Shares Redeemed ........................ (4,463,391) (49,412,316) (8,297,929) (86,255,700)
---------- ------------ ---------- ------------
Total Fiduciary Share Transactions .......... (3,072,341) (33,683,079) (6,687,277) (69,845,241)
---------- ------------ ---------- ------------
Class A Shares:
Proceeds from Shares Issued .................... 79,396 914,077 274,566 2,829,136
Reinvestment of Dividends and Distributions .... 32,997 366,743 24,655 254,321
Cost of Shares Redeemed ........................ (524,678) (5,958,855) (1,130,400) (11,555,215)
---------- ------------ ---------- ------------
Total Class A Share Transactions ............ (412,285) (4,678,035) (831,179) (8,471,758)
---------- ------------ ---------- ------------
Class B Shares:
Proceeds from Shares Issued .................... 276 3,253 503 5,002
Reinvestment of Dividends and Distributions .... 1,215 13,098 661 6,642
Cost of Shares Redeemed ........................ (59,998) (671,018) (104,165) (1,056,789)
---------- ------------ ---------- ------------
Total Class B Share Transactions ............ (58,507) (654,667) (103,001) (1,045,145)
---------- ------------ ---------- ------------
Class C Shares:
Proceeds from Shares Issued .................... 6,431 69,836 15,719 156,531
Reinvestment of Dividends and Distributions .... 3,235 34,737 1,537 15,424
Cost of Shares Redeemed ........................ (136,344) (1,491,461) (134,731) (1,345,071)
---------- ------------ ---------- ------------
Total Class C Share Transactions ............ (126,678) (1,386,888) (117,475) (1,173,116)
---------- ------------ ---------- ------------
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 ....... (3,669,811) $(40,402,669) (7,738,932) $(80,535,260)
========== ============ ========== ============
NYSE ARCA TECH 100 INDEX FUND
--------------------------------------------------------
2011 2010
SHARES DOLLARS SHARES DOLLARS
--------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued .................... 221,631 $ 6,946,480 16,327 $ 417,533
Reinvestment of Dividends and Distributions .... -- -- -- --
Cost of Shares Redeemed ........................ (48,071) (1,569,230) (5,111) (125,391)
---------- ------------ ---------- ------------
Total Fiduciary Share Transactions .......... 173,560 5,377,250 11,216 292,142
---------- ------------ ---------- ------------
Class A Shares:
Proceeds from Shares Issued .................... 1,164,336 35,997,236 1,007,872 24,788,795
Reinvestment of Dividends and Distributions .... -- -- -- --
Cost of Shares Redeemed ........................ (1,809,690) (55,819,075) (2,241,848) (54,851,874)
---------- ------------ ---------- ------------
Total Class A Share Transactions ............ (645,354) (19,821,839) (1,233,976) (30,063,079)
---------- ------------ ---------- ------------
Class B Shares:
Proceeds from Shares Issued .................... 3,029 88,954 926 21,890
Reinvestment of Dividends and Distributions .... -- -- -- --
Cost of Shares Redeemed ........................ (182,041) (5,008,569) (290,604) (6,562,068)
---------- ------------ ---------- ------------
Total Class B Share Transactions ............ (179,012) (4,919,615) (289,678) (6,540,178)
---------- ------------ ---------- ------------
Class C Shares:
Proceeds from Shares Issued .................... 36,553 1,045,906 39,875 914,050
Reinvestment of Dividends and Distributions .... -- -- -- --
Cost of Shares Redeemed ........................ (104,785) (2,806,913) (106,455) (2,424,861)
---------- ------------ ---------- ------------
Total Class C Share Transactions ............ (68,232) (1,761,007) (66,580) (1,510,811)
---------- ------------ ---------- ------------
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 ....... (719,038) $(21,125,211) (1,579,018) $(37,821,926)
========== ============ ========== ============
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 ENDED JULY 31 (UNLESS OTHERWISE INDICATED)
SMALL CAP ADVANTAGE FUND
--------------------------------------------------------
2011 2010
SHARES DOLLARS SHARES DOLLARS
--------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued .................... 264,971 $ 4,880,502 311,157 $ 4,189,969
Reinvestment of Dividends and Distributions .... -- -- 3,174 42,430
Cost of Shares Redeemed ........................ (473,170) (8,581,732) (560,001) (7,738,957)
---------- ------------ ---------- ------------
Total Fiduciary Share Transactions .......... (208,199) (3,701,230) (245,670) (3,506,558)
---------- ------------ ---------- ------------
Class A Shares:
Proceeds from Shares Issued .................... 20,758 394,043 5,829 77,893
Reinvestment of Dividends and Distributions .... -- -- 44 587
Cost of Shares Redeemed ........................ (14,085) (239,173) (3,675) (53,481)
---------- ------------ ---------- ------------
Total Class A Share Transactions ............ 6,673 154,870 2,198 24,999
---------- ------------ ---------- ------------
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 .................... 7,353 133,337 1,464 19,495
Reinvestment of Dividends and Distributions .... -- -- -- --
Cost of Shares Redeemed ........................ (1,168) (22,198) (3,514) (47,431)
---------- ------------ ---------- ------------
Total Class C Share Transactions ............ 6,185 111,139 (2,050) (27,936)
---------- ------------ ---------- ------------
Net Decrease from Capital Stock Activity ....... (195,341) $ (3,435,221) (245,522) $ (3,509,495)
========== ============ ========== ============
SMALL CAP VALUE FUND
--------------------------------------------------------
2011 2010
SHARES DOLLARS SHARES DOLLARS
--------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued .................... 505,262 $ 6,553,452 558,388 $ 6,254,693
Reinvestment of Dividends and Distributions .... 23,654 320,513 23,696 254,734
Cost of Shares Redeemed ........................ (999,776) (13,524,587) (1,180,392) (12,936,459)
---------- ------------ ---------- ------------
Total Fiduciary Share Transactions .......... (470,860) (6,650,622) (598,308) (6,427,032)
---------- ------------ ---------- ------------
Class A Shares:
Proceeds from Shares Issued .................... 132,657 1,733,632 333,646 3,724,968
Reinvestment of Dividends and Distributions .... 9,357 123,331 12,588 131,670
Cost of Shares Redeemed ........................ (1,922,567) (25,936,830) (1,523,816) (17,000,290)
---------- ------------ ---------- ------------
Total Class A Share Transactions ............ (1,780,553) (24,079,867) (1,177,582) (13,143,652)
---------- ------------ ---------- ------------
Class B Shares:
Proceeds from Shares Issued .................... 1,668 22,028 14,739 149,738
Reinvestment of Dividends and Distributions .... -- -- 1,321 13,069
Cost of Shares Redeemed ........................ (110,326) (1,352,489) (190,059) (1,983,886)
---------- ------------ ---------- ------------
Total Class B Share Transactions ............ (108,658) (1,330,461) (173,999) (1,821,079)
---------- ------------ ---------- ------------
Class C Shares:
Proceeds from Shares Issued .................... 31,482 382,137 23,462 232,821
Reinvestment of Dividends and Distributions .... 1,896 23,433 2,775 27,254
Cost of Shares Redeemed ........................ (94,102) (1,154,748) (173,958) (1,772,414)
---------- ------------ ---------- ------------
Total Class C Share Transactions ............ (60,724) (749,178) (147,721) (1,512,339)
---------- ------------ ---------- ------------
Net Decrease from Capital Stock Activity ....... (2,420,795) $(32,810,128) (2,097,610) $(22,904,102)
========== ============ ========== ============
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
158 HIGHMARK(R) FUNDS
VALUE MOMENTUM FUND
--------------------------------------------------------
2011 2010
SHARES DOLLARS SHARES DOLLARS
--------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued .................... 2,267,702 $ 34,910,783 2,010,995 $ 27,393,741
Reinvestment of Dividends and Distributions .... 258,336 3,903,824 165,801 2,261,189
Cost of Shares Redeemed ........................ (4,663,578) (71,093,569) (4,325,937) (58,876,842)
---------- ------------ ---------- ------------
Total Fiduciary Share Transactions .......... (2,137,540) (32,278,962) (2,149,141) (29,221,912)
---------- ------------ ---------- ------------
Class A Shares:
Proceeds from Shares Issued .................... 143,154 2,205,404 202,680 2,757,666
Reinvestment of Dividends and Distributions .... 82,262 1,236,042 49,603 673,628
Cost of Shares Redeemed ........................ (1,092,462) (16,480,347) (1,140,055) (15,420,514)
---------- ------------ ---------- ------------
Total Class A Share Transactions ............ (867,046) (13,038,901) (887,772) (11,989,220)
---------- ------------ ---------- ------------
Class B Shares:
Proceeds from Shares Issued .................... 527 8,020 -- --
Reinvestment of Dividends and Distributions .... 2,627 38,127 1,122 14,411
Cost of Shares Redeemed ........................ (120,433) (1,814,414) (224,343) (3,005,311)
---------- ------------ ---------- ------------
Total Class B Share Transactions ............ (117,279) (1,768,267) (223,221) (2,990,900)
---------- ------------ ---------- ------------
Class C Shares:
Proceeds from Shares Issued .................... 11,760 179,954 15,078 201,967
Reinvestment of Dividends and Distributions .... 2,297 33,441 745 9,603
Cost of Shares Redeemed ........................ (45,991) (677,374) (82,054) (1,071,331)
---------- ------------ ---------- ------------
Total Class C Share Transactions ............ (31,934) (463,979) (66,231) (859,761)
---------- ------------ ---------- ------------
Net Decrease from Capital Stock Activity ....... (3,153,799) $(47,550,109) (3,326,365) $(45,061,793)
========== ============ ========== ============
CAPITAL GROWTH ALLOCATION
--------------------------------------------------------
2011 2010
SHARES DOLLARS SHARES DOLLARS
--------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued .................... 6,593 $ 142,825 1,274 $ 21,363
Reinvestment of Dividends and Distributions .... 76 1,522 112 2,035
Cost of Shares Redeemed ........................ (7,134) (140,759) (2,047) (35,702)
---------- ------------ ---------- ------------
Total Fiduciary Share Transactions .......... (465) 3,588 (661) (12,304)
---------- ------------ ---------- ------------
Class A Shares:
Proceeds from Shares Issued .................... 251,627 5,263,068 275,110 4,942,782
Reinvestment of Dividends and Distributions .... 9,003 183,924 9,509 173,229
Cost of Shares Redeemed ........................ (331,912) (6,838,965) (453,287) (8,195,630)
---------- ------------ ---------- ------------
Total Class A Share Transactions ............ (71,282) (1,391,973) (168,668) (3,079,619)
---------- ------------ ---------- ------------
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 .................... 132,589 2,737,277 168,565 3,011,984
Reinvestment of Dividends and Distributions .... 246 5,097 2,489 44,921
Cost of Shares Redeemed ........................ (174,017) (3,558,043) (174,042) (3,066,550)
---------- ------------ ---------- ------------
Total Class C Share Transactions ............ (41,182) (815,669) (2,988) (9,645)
---------- ------------ ---------- ------------
Net Decrease from Capital Stock Activity ....... (112,929) $ (2,204,054) (172,317) $ (3,101,568)
========== ============ ========== ============
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 ENDED JULY 31 (UNLESS OTHERWISE INDICATED)
DIVERSIFIED EQUITY ALLOCATION FUND
-------------------------------------------------------
2011 2010
SHARES DOLLARS SHARES DOLLARS
-------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ................................. 4,484 $ 78,250 30,157 $ 471,245
Reinvestment of Dividends and Distributions ................. 112 2,077 12 182
Cost of Shares Redeemed ..................................... (6,596) (125,085) (999) (15,845)
----------- ------------ ----------- ------------
Total Fiduciary Share Transactions ....................... (2,000) (44,758) 29,170 455,582
----------- ------------ ----------- ------------
Class A Shares:
Proceeds from Shares Issued ................................. 364,593 7,044,144 46,949 752,397
Reinvestment of Dividends and Distributions ................. 203 3,777 514 8,105
Cost of Shares Redeemed ..................................... (55,885) (1,040,039) (45,379) (711,877)
----------- ------------ ----------- ------------
Total Class A Share Transactions ......................... 308,911 6,007,882 2,084 48,625
----------- ------------ ----------- ------------
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 ................................. 83,514 1,538,667 54,439 859,412
Reinvestment of Dividends and Distributions ................. -- -- 127 1,983
Cost of Shares Redeemed ..................................... (35,642) (637,660) (29,284) (444,697)
----------- ------------ ----------- ------------
Total Class C Share Transactions ......................... 47,872 901,007 25,282 416,698
----------- ------------ ----------- ------------
Net Increase (Decrease) from Capital Stock Activity ......... 354,783 $ 6,864,131 56,536 $ 920,905
=========== ============ =========== ============
GROWTH & INCOME ALLOCATION FUND
-------------------------------------------------------
2011 2010
SHARES DOLLARS SHARES DOLLARS
-------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ................................. 44,224 $ 970,704 -- $ --
Reinvestment of Dividends and Distributions ................. 232 4,986 103 1,948
Cost of Shares Redeemed ..................................... (3,642) (73,705) (55) (1,000)
----------- ------------ ----------- ------------
Total Fiduciary Share Transactions ....................... 40,814 901,985 48 948
----------- ------------ ----------- ------------
Class A Shares:
Proceeds from Shares Issued ................................. 360,708 7,725,982 322,699 6,090,425
Reinvestment of Dividends and Distributions ................. 14,438 302,979 15,481 291,400
Cost of Shares Redeemed ..................................... (333,709) (7,039,957) (318,698) (5,921,378)
----------- ------------ ----------- ------------
Total Class A Share Transactions ......................... 41,437 989,004 19,482 460,447
----------- ------------ ----------- ------------
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 ................................. 214,856 4,531,850 163,293 3,035,161
Reinvestment of Dividends and Distributions ................. 4,390 91,216 5,460 102,279
Cost of Shares Redeemed ..................................... (174,572) (3,656,435) (188,909) (3,503,397)
----------- ------------ ----------- ------------
Total Class C Share Transactions ......................... 44,674 966,631 (20,156) (365,957)
----------- ------------ ----------- ------------
Net Increase (Decrease) from Capital Stock Activity ......... 126,925 $ 2,857,620 (626) $ 95,438
=========== ============ =========== ============
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
160 HIGHMARK(R) FUNDS
INCOME PLUS ALLOCATION FUND
-------------------------------------------------------
2011 2010
SHARES DOLLARS SHARES DOLLARS
-------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ................................. 19,582 $ 418,865 902 $ 17,500
Reinvestment of Dividends and Distributions ................. 263 5,462 224 4,359
Cost of Shares Redeemed ..................................... (643) (12,931) (268) (5,268)
----------- ------------ ----------- ------------
Total Fiduciary Share Transactions ....................... 19,202 411,396 858 16,591
----------- ------------ ----------- ------------
Class A Shares:
Proceeds from Shares Issued ................................. 118,723 2,468,378 268,147 5,199,289
Reinvestment of Dividends and Distributions ................. 7,510 155,831 6,062 117,980
Cost of Shares Redeemed ..................................... (220,840) (4,626,904) (121,885) (2,351,233)
----------- ------------ ----------- ------------
Total Class A Share Transactions ......................... (94,607) (2,002,695) 152,324 2,966,036
----------- ------------ ----------- ------------
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 ................................. 182,306 3,750,718 151,534 2,896,971
Reinvestment of Dividends and Distributions ................. 4,463 92,016 2,454 47,464
Cost of Shares Redeemed ..................................... (81,778) (1,688,462) (47,070) (908,824)
----------- ------------ ----------- ------------
Total Class C Share Transactions ......................... 104,991 2,154,272 106,918 2,035,611
----------- ------------ ----------- ------------
Net Increase (Decrease) from Capital Stock Activity ......... 29,586 $ 562,973 260,100 $ 5,018,238
=========== ============ =========== ============
BOND FUND
-------------------------------------------------------
2011 2010
SHARES DOLLARS SHARES DOLLARS
-------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ................................. 5,158,803 $ 58,522,672 5,574,740 $ 61,688,835
Reinvestment of Dividends and Distributions ................. 875,197 9,885,466 677,296 7,489,780
Cost of Shares Redeemed ..................................... (5,631,964) (63,951,496) (5,751,601) (63,781,540)
----------- ------------ ----------- ------------
Total Fiduciary Share Transactions ....................... 402,036 4,456,642 500,435 5,397,075
----------- ------------ ----------- ------------
Class A Shares:
Proceeds from Shares Issued ................................. 802,116 8,984,591 977,218 10,658,953
Reinvestment of Dividends and Distributions ................. 85,104 946,795 67,090 730,602
Cost of Shares Redeemed ..................................... (858,564) (9,566,185) (603,596) (6,576,638)
----------- ------------ ----------- ------------
Total Class A Share Transactions ......................... 28,656 365,201 440,712 4,812,917
----------- ------------ ----------- ------------
Class B Shares:
Proceeds from Shares Issued ................................. 7,967 89,327 8,791 96,035
Reinvestment of Dividends and Distributions ................. 2,936 32,495 5,214 56,427
Cost of Shares Redeemed ..................................... (102,344) (1,138,194) (157,571) (1,706,948)
----------- ------------ ----------- ------------
Total Class B Share Transactions ......................... (91,441) (1,016,372) (143,566) (1,554,486)
----------- ------------ ----------- ------------
Class C Shares:
Proceeds from Shares Issued ................................. 469,376 5,233,750 293,071 3,181,597
Reinvestment of Dividends and Distributions ................. 17,519 193,808 6,797 73,817
Cost of Shares Redeemed ..................................... (167,258) (1,850,147) (50,502) (548,904)
----------- ------------ ----------- ------------
Total Class C Share Transactions ......................... 319,637 3,577,411 249,366 2,706,510
----------- ------------ ----------- ------------
Net Increase (Decrease) from Capital Stock Activity ......... 658,888 $ 7,382,882 1,046,947 $ 11,362,016
=========== ============ =========== ============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 161
STATEMENTS OF CHANGES IN NET ASSETS - CAPITAL STOCK ACTIVITY
FOR THE YEARS ENDED JULY 31 (UNLESS OTHERWISE INDICATED)
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND
-----------------------------------------------------
2011 2010
SHARES DOLLARS SHARES DOLLARS
-----------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ........................... 4,254,632 $ 43,276,898 3,688,083 $ 37,392,969
Reinvestment of Dividends and Distributions ........... 102,781 1,038,597 82,682 839,016
Cost of Shares Redeemed ............................... (3,207,975) (32,429,167) (2,399,811) (24,338,568)
---------- ------------ ---------- ------------
Total Fiduciary Share Transactions ................. 1,149,438 11,886,328 1,370,954 13,893,417
---------- ------------ ---------- ------------
Class A Shares:
Proceeds from Shares Issued ........................... 4,953,242 49,999,762 3,689,289 37,294,890
Reinvestment of Dividends and Distributions ........... 134,368 1,352,065 105,392 1,064,003
Cost of Shares Redeemed ............................... (4,864,450) (48,690,431) (1,212,513) (12,244,600)
---------- ------------ ---------- ------------
Total Class A Share Transactions ................... 223,160 2,661,396 2,582,168 26,114,293
---------- ------------ ---------- ------------
Class B Shares:
Proceeds from Shares Issued ........................... 12 122 -- --
Reinvestment of Dividends and Distributions ........... 449 4,523 1,992 20,097
Cost of Shares Redeemed ............................... (53,577) (542,096) (102,055) (1,028,213)
---------- ------------ ---------- ------------
Total Class B Share Transactions ................... (53,116) (537,451) (100,063) (1,008,116)
---------- ------------ ---------- ------------
Class C Shares:
Proceeds from Shares Issued ........................... 1,286,266 13,020,136 1,049,800 10,572,230
Reinvestment of Dividends and Distributions ........... 29,598 296,522 17,578 176,943
Cost of Shares Redeemed ............................... (522,817) (5,226,377) (99,602) (1,002,909)
---------- ------------ ---------- ------------
Total Class C Share Transactions ................... 793,047 8,090,281 967,776 9,746,264
---------- ------------ ---------- ------------
Net Increase (Decrease) from Capital Stock Activity ... 2,112,529 $ 22,100,554 4,820,835 $ 48,745,858
=========== ============ ========== ============
NATIONAL INTERMEDIATE TAX-FREE BOND FUND
-----------------------------------------------------
2011 2010(1)
SHARES DOLLARS SHARES DOLLARS
-----------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ........................... 1,541,839 $ 17,607,549 1,577,838 $ 17,912,769
Reinvestment of Dividends and Distributions ........... 41,971 476,263 38,588 437,757
Cost of Shares Redeemed ............................... (1,656,828) (18,753,751) (1,245,952) (14,108,536)
---------- ------------ ---------- ------------
Total Fiduciary Share Transactions ................. (73,018) (669,939) 370,474 4,241,990
---------- ------------ ---------- ------------
Class A Shares:
Proceeds from Shares Issued ........................... 1,183,836 13,475,764 1,122,311 12,713,768
Reinvestment of Dividends and Distributions ........... 28,243 320,793 34,099 386,698
Cost of Shares Redeemed ............................... (1,085,272) (12,249,809) (932,435) (10,563,632)
---------- ------------ ---------- ------------
Total Class A Share Transactions ................... 126,807 1,546,748 223,975 2,536,834
---------- ------------ ---------- ------------
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 ........................... 232,773 2,662,240 204,826 2,323,977
Reinvestment of Dividends and Distributions ........... 4,172 47,354 914 10,402
Cost of Shares Redeemed ............................... (78,750) (894,682) (9) (100)
---------- ------------ ---------- ------------
Total Class C Share Transactions ................... 158,195 1,814,912 205,731 2,334,279
---------- ------------ ---------- ------------
Net Increase (Decrease) from Capital Stock Activity ... 211,984 $ 2,691,721 800,180 $ 9,113,103
=========== ============ ========== ============
Amounts designated as "--" are either $0 or have been rounded to $0.
(1) Class C Shares resumed operations on December 4, 2009.
(2) The Fund began issuing Fiduciary Shares on August 3, 2010.
The accompanying notes are an integral part of the financial statements.
162 HIGHMARK(R) FUNDS
SHORT TERM BOND FUND
------------------------------------------------------
2011 2010
SHARES DOLLARS SHARES DOLLARS
------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ........................... 4,176,814 $ 42,189,118 3,666,010 $ 36,907,146
Reinvestment of Dividends and Distributions ........... 124,196 1,252,459 101,725 1,024,311
Cost of Shares Redeemed ............................... (2,673,363) (26,971,606) (1,885,497) (19,007,646)
----------- ------------ ---------- ------------
Total Fiduciary Share Transactions ................. 1,627,647 16,469,971 1,882,238 18,923,811
----------- ------------ ---------- ------------
Class A Shares:
Proceeds from Shares Issued ........................... 1,734,488 17,495,454 2,281,098 22,943,512
Reinvestment of Dividends and Distributions ........... 39,008 392,879 25,811 259,610
Cost of Shares Redeemed ............................... (1,595,156) (16,090,113) (1,013,278) (10,202,619)
----------- ------------ ---------- ------------
Total Class A Share Transactions ................... 178,340 1,798,220 1,293,631 13,000,503
----------- ------------ ---------- ------------
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 ........................... 1,091,164 11,140,438 1,546,664 15,742,015
Reinvestment of Dividends and Distributions ........... 24,988 254,743 14,855 151,159
Cost of Shares Redeemed ............................... (790,260) (8,054,136) (150,532) (1,532,857)
----------- ------------ ---------- ------------
Total Class C Share Transactions ................... 325,892 3,341,045 1,410,987 14,360,317
----------- ------------ ---------- ------------
Net Increase (Decrease) from Capital Stock Activity ... 2,131,879 $ 21,609,236 4,586,856 $ 46,284,631
=========== ============ ========== ============
WISCONSIN TAX-EXEMPT FUND
------------------------------------------------------
2011(2) 2010
SHARES DOLLARS SHARES DOLLARS
------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ........................... 28,157 $ 295,583 -- $ --
Reinvestment of Dividends and Distributions ........... 212 2,190 -- --
Cost of Shares Redeemed ............................... (1,211) (12,075) -- --
----------- ------------ ---------- ------------
Total Fiduciary Share Transactions ................. 27,158 285,698 -- --
----------- ------------ ---------- ------------
Class A Shares:
Proceeds from Shares Issued ........................... 881,822 9,177,740 1,258,261 13,085,247
Reinvestment of Dividends and Distributions ........... 350,375 3,611,323 335,617 3,487,869
Cost of Shares Redeemed ............................... (2,625,569) (27,023,594) (1,550,661) (16,109,882)
----------- ------------ ---------- ------------
Total Class A Share Transactions ................... (1,393,372) (14,234,531) 43,217 463,234
----------- ------------ ---------- ------------
Class B Shares:
Proceeds from Shares Issued ........................... 3,434 35,993 6,723 68,395
Reinvestment of Dividends and Distributions ........... 3,499 36,031 4,307 44,676
Cost of Shares Redeemed ............................... (80,178) (820,873) (46,583) (482,545)
----------- ------------ ---------- ------------
Total Class B Share Transactions ................... (73,245) (748,849) (35,553) (369,474)
----------- ------------ ---------- ------------
Class C Shares:
Proceeds from Shares Issued ........................... 328,526 3,420,852 449,614 4,686,551
Reinvestment of Dividends and Distributions ........... 24,648 253,531 15,182 157,657
Cost of Shares Redeemed ............................... (274,258) (2,820,013) (132,988) (1,375,020)
----------- ------------ ---------- ------------
Total Class C Share Transactions ................... 78,916 854,370 331,808 3,469,188
----------- ------------ ---------- ------------
Net Increase (Decrease) from Capital Stock Activity ... (1,360,543) $(13,843,312) 339,472 $ 3,562,948
=========== ============ ========== ============
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
------------------------------------------------------------------------------------------------------------------------------------
-------------
BALANCED FUND
-------------
FIDUCIARY SHARES
2011 $12.56 $ 0.165 $ 1.427 $ 1.592 $(0.222) $ -- $(0.222) $ --
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) --
CLASS A SHARES
2011 $12.53 $ 0.131 $ 1.430 $ 1.561 $(0.191) $ -- $(0.191) $ --
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) --
CLASS B SHARES
2011 $12.50 $ 0.048 $ 1.424 $ 1.472 $(0.112) $ -- $(0.112) $ --
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) --
CLASS C SHARES
2011 $12.46 $ 0.049 $ 1.418 $ 1.467 $(0.117) $ -- $(0.117) $ --
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) --
--------------------
COGNITIVE VALUE FUND
--------------------
FIDUCIARY SHARES
2011 $ 9.36 $ 0.093 $ 2.187 $ 2.280 $(0.140) $ -- $(0.140) $ --#
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) --
CLASS A SHARES
2011 $ 9.37 $ 0.065 $ 2.194 $ 2.259 $(0.119) $ -- $(0.119) $ --#
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) --
CLASS C SHARES
2011 $ 9.11 $(0.001) $ 2.122 $ 2.121 $(0.031) $ -- $(0.031) $ --#
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) --
CLASS M SHARES
2011 $ 9.37 $ 0.108 $ 2.182 $ 2.290 $(0.150) $ -- $(0.150) $ --#
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) --
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
2011 $13.93 12.72% $ 18,267 0.99% 1.54% 1.21% 50%
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
CLASS A SHARES
2011 $13.90 12.50% $ 6,341 1.24% 1.79% 0.96% 50%
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
CLASS B SHARES
2011 $13.86 11.80% $ 130 1.84% 2.29% 0.36% 50%
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
CLASS C SHARES
2011 $13.81 11.80% $ 854 1.84% 2.29% 0.36% 50%
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
--------------------
COGNITIVE VALUE FUND
--------------------
FIDUCIARY SHARES
2011 $11.50 24.32% $ 5,075 1.21% 1.33% 0.86% 216%
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
CLASS A SHARES
2011 $11.51 24.05% $ 961 1.47% 1.58% 0.60% 216%
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
CLASS C SHARES
2011 $11.20 23.30% $ 568 2.07% 2.08% (0.00)% 216%
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
CLASS M SHARES
2011 $11.51 24.54% $ 87,921 1.07% 1.08% 1.00% 216%
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
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
------------------------------------------------------------------------------------------------------------------------------------
----------------
CORE EQUITY FUND
----------------
FIDUCIARY SHARES
2011 $ 7.24 $ 0.088 $ 1.256 $ 1.344 $(0.094) $ -- $(0.094) $ --
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) --
CLASS A SHARES
2011 $ 7.23 $ 0.065 $ 1.244 $ 1.309 $(0.069) $ -- $(0.069) $ --
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) --
CLASS B SHARES
2011 $ 7.06 $ 0.015 $ 1.229 $ 1.244 $(0.014) $ -- $(0.014) $ --
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) --
CLASS C SHARES
2011 $ 7.03 $ 0.015 $ 1.213 $ 1.228 $(0.018) $ -- $(0.018) $ --
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) --
--------------------
ENHANCED GROWTH FUND
--------------------
FIDUCIARY SHARES
2011 $ 9.20 $(0.027) $ 2.027 $ 2.000 $ -- $ -- $ -- $ --
2010 8.07 (0.008) 1.151 1.143 (0.013) -- (0.013) --
2009 9.26 0.009 (1.199) (1.190) -- -- -- --
2008 (1) 9.29 (0.022) (0.008) (0.030) -- -- -- --
CLASS A SHARES
2011 $ 9.05 $(0.064) $ 1.994 $ 1.930 $ -- $ -- $ -- $ --
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 -- -- -- --
CLASS C SHARES
2011 $ 8.84 $(0.126) $ 1.946 $ 1.820 $ -- $ -- $ -- $ --
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 -- -- -- --
CLASS M SHARES
2011 $ 9.20 $(0.022) $ 2.032 $ 2.010 $ -- $ -- $ -- $ --
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 -- -- -- --
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
2011 $ 8.49 18.63% $ 53,369 0.96% 1.23% 1.09% 68%
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
CLASS A SHARES
2011 $ 8.47 18.15% $ 3,027 1.25% 1.48% 0.79% 68%
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
CLASS B SHARES
2011 $ 8.29 17.62% $ 86 1.85% 1.98% 0.19% 68%
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
CLASS C SHARES
2011 $ 8.24 17.48% $ 640 1.85% 1.98% 0.19% 68%
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
--------------------
ENHANCED GROWTH FUND
--------------------
FIDUCIARY SHARES
2011 $11.20 21.74% $ 1,980 1.09% 1.33% (0.25)% 16%
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 (1) 9.26 (9.57) 1,655 0.99* 1.26* (0.27)* 21
CLASS A SHARES
2011 $10.98 21.33% $ 1,974 1.45% 1.58% (0.61)% 16%
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
CLASS C SHARES
2011 $10.66 20.59% $ 272 2.05% 2.08% (1.21)% 16%
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
CLASS M SHARES
2011 $11.21 21.85% $ 86,182 1.05% 1.08% (0.21)% 16%
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
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.
(1) COMMENCED OPERATIONS ON SEPTEMBER 26, 2007.
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
------------------------------------------------------------------------------------------------------------------------------------
------------------
EQUITY INCOME FUND
------------------
FIDUCIARY SHARES
2011 $ 7.88 $ 0.284 $ 1.331 $ 1.615 $(0.285) $ -- $(0.285) $ --
2010 6.97 0.245 0.834 1.079 (0.169) -- (0.169) --
2009 (1) 6.89 0.003 0.077 0.080 -- -- -- --
CLASS A SHARES
2011 $ 7.89 $ 0.248 $ 1.314 $ 1.562 $(0.272) $ -- $(0.272) $ --
2010 6.97 0.234 0.883 1.117 (0.197) -- (0.197) --
2009 (2) 7.37 0.150 (0.386) (0.236) (0.164) -- (0.164)++ --
2008 (3) 12.01 0.30^ (4.31) (4.01) (0.28) (0.35) (0.63) --
2007 (3) 11.43 0.29^ 0.85 1.14 (0.26) (0.30) (0.56) --
2006 (3) 9.77 0.29^ 1.70 1.99 (0.27) (0.06) (0.33) --
CLASS B SHARES
2011 $ 7.91 $ 0.195 $ 1.321 $ 1.516 $(0.216) $ -- $(0.216) $ --
2010 6.99 0.188 0.877 1.065 (0.145) -- (0.145) --
2009 (2) 7.35 0.116 (0.368) (0.252) (0.108) -- (0.108)++ --
2008 (3) 11.95 0.24^ (4.33) (4.09) (0.16) (0.35) (0.51) --
2007 (3) 11.38 0.22^ 0.83 1.05 (0.20) (0.28) (0.48) --
2006 (3) 9.74 0.22^ 1.69 1.91 (0.21) (0.06) (0.27) --
CLASS C SHARES
2011 $ 7.85 $ 0.194 $ 1.315 $ 1.509 $(0.219) $ -- $(0.219) $ --
2010 6.94 0.187 0.868 1.055 (0.145) -- (0.145) --
2009 (2) 7.33 0.115 (0.379) (0.264) (0.126) -- (0.126)++ --
2008 (3) 11.95 0.21^ (4.28) (4.07) (0.20) (0.35) (0.55) --
2007 (3) 11.40 0.22^ 0.82 1.04 (0.21) (0.28) (0.49) --
2006 (3) 9.74 0.21^ 1.71 1.92 (0.20) (0.06) (0.26) --
-----------------------
FUNDAMENTAL EQUITY FUND
-----------------------
FIDUCIARY SHARES
2011 $18.08 $ 0.117 $ 2.823 $ 2.940 $(0.220) $ -- $(0.220) $ --
2010 16.28 0.238 1.671 1.909 (0.109) -- (0.109) --
2009 (4) 20.00 0.181 (3.803) (3.622) (0.098) -- (0.098) --
CLASS A SHARES
2011 $18.04 $ 0.049 $ 2.808 $ 2.857 $(0.187) $ -- $(0.187) $ --
2010 16.25 0.179 1.680 1.859 (0.069) -- (0.069) --
2009 (4) 20.00 0.114 (3.786) (3.672) (0.078) -- (0.078) --
CLASS C SHARES
2011 $17.91 $(0.074) $ 2.826 $ 2.752 $(0.062) $ -- $(0.062) $ --
2010 16.14 0.072 1.767 1.839 (0.069) -- (0.069) --
2009 (4) 20.00 0.023 (3.845) (3.822) (0.038) -- (0.038) --
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
-------------------------------------------------------------------------------------------------------------------
------------------
EQUITY INCOME FUND
------------------
FIDUCIARY SHARES
2011 $ 9.21 20.68% $ 5,532 0.90% 1.75% 3.04% 78%
2010 7.88 15.50 9 0.90 1.80 3.28 46
2009 (1) 6.97 1.16 76 0.90*~ 2.53*~ 3.43* 32
CLASS A SHARES
2011 $ 9.18 19.98% $ 9,259 1.15% 2.00% 2.79% 78%
2010 7.89 16.06 9,976 1.15 2.05 3.03 46
2009 (2) 6.97 (2.93) 11,793 1.16*~ 2.47*~ 3.17* 32
2008 (3) 7.37 (34.84) 13,298 1.15 1.68 2.95 83
2007 (3) 12.01 10.23 28,991 1.15 1.42 2.51 85
2006 (3) 11.43 20.75 18,437 1.15 1.74 2.83 38
CLASS B SHARES
2011 $ 9.21 19.31% $ 1,572 1.75% 2.50% 2.19% 78%
2010 7.91 15.25 1,813 1.75 2.55 2.43 46
2009 (2) 6.99 (3.24) 2,341 1.87*~ 3.17*~ 2.45* 32
2008 (3) 7.35 (35.44) 3,121 1.90 2.42 2.23 83
2007 (3) 11.95 9.41 8,590 1.90 2.16 1.87 85
2006 (3) 11.38 19.91 7,613 1.90 2.48 2.05 38
CLASS C SHARES
2011 $ 9.14 19.37% $ 2,431 1.75% 2.50% 2.19% 78%
2010 7.85 15.22 2,194 1.75 2.55 2.43 46
2009 (2) 6.94 (3.39) 2,832 1.87*~ 3.17*~ 2.45* 32
2008 (3) 7.33 (35.38) 4,057 1.90 2.44 2.18 83
2007 (3) 11.95 9.39 7,171 1.90 2.16 1.81 85
2006 (3) 11.40 19.96 5,338 1.90 2.45 2.02 38
-----------------------
FUNDAMENTAL EQUITY FUND
-----------------------
FIDUCIARY SHARES
2011 $20.80 16.17% $ 18,182 0.89% 1.51% 0.57% 62%
2010 18.08 11.78 15,592 0.89 1.67 1.33 26
2009 (4) 16.28 (18.02) 11,450 0.82* 1.81* 1.22* 62
CLASS A SHARES
2011 $20.71 15.80% $ 13 1.22% 1.76% 0.24% 62%
2010 18.04 11.44 5 1.22 1.92 1.00 26
2009 (4) 16.25 (18.29) 3 1.22* 2.06* 0.82* 62
CLASS C SHARES
2011 $20.60 15.31% $ 27 1.82% 2.26% (0.36)% 62%
2010 17.91 11.39 12 1.82 2.42 0.40 26
2009 (4) 16.14 (19.08) -- 1.82* 2.56* 0.22* 62
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
------------------------------------------------------------------------------------------------------------------------------------
--------------------------
GENEVA MID CAP GROWTH FUND
--------------------------
FIDUCIARY SHARES
2011 $17.98 $(0.151) $ 5.050 $ 4.899 $ -- $(0.029) $(0.029) $ --
2010 15.04 (0.110) 3.050 2.940 -- -- -- --
2009 (5) 14.07 (0.006) 0.976 0.970 -- -- -- --
CLASS A SHARES
2011 $17.92 $(0.200) $ 5.019 $ 4.819 $ -- $(0.029) $(0.029) $ --
2010 15.03 (0.152) 3.042 2.890 -- -- -- --
2009 (2) 13.53 (0.103) 1.603 1.500 -- -- -- --
2008 (3) 21.80 (0.17)^ (6.94) (7.11) -- (1.16) (1.16) --
2007 (3) 18.37 (0.18)^ 3.68 3.50 -- (0.07) (0.07) --
2006 (3) 16.57 (0.11)^ 1.91 1.80 -- -- -- --
CLASS B SHARES
2011 $16.44 $(0.299) $ 4.588 $ 4.289 $ -- $(0.029) $(0.029) $ --
2010 13.87 (0.233) 2.803 2.570 -- -- -- --
2009 (2) 12.55 (0.158) 1.478 1.320 -- -- -- --
2008 (3) 20.45 (0.34)^ (6.40) (6.74) -- (1.16) (1.16) --
2007 (3) 17.37 (0.38)^ 3.53 3.15 -- (0.07) (0.07) --
2006 (3) 15.79 (0.28)^ 1.86 1.58 -- -- -- --
CLASS C SHARES
2011 $16.64 $(0.307) $ 4.656 $ 4.349 $ -- $(0.029) $(0.029) $ --
2010 14.04 (0.237) 2.837 2.600 -- -- -- --
2009 (2) 12.70 (0.160) 1.500 1.340 -- -- -- --
2008 (3) 20.69 (0.28)^ (6.55) (6.83) -- (1.16) (1.16) --
2007 (3) 17.57 (0.31)^ 3.50 3.19 -- (0.07) (0.07) --
2006 (3) 15.97 (0.23)^ 1.83 1.60 -- -- -- --
----------------------------
GENEVA SMALL CAP GROWTH FUND
----------------------------
FIDUCIARY SHARES
2011 $24.45 $(0.309) $ 7.926 $ 7.617 $ -- $(1.027) $(1.027) $ --#
2010 20.70 (0.204) 3.954 3.750 -- -- -- --#
2009 (6) 20.00 (0.018) 0.718 0.700 -- -- -- --
CLASS A SHARES
2011 $24.39 $(0.392) $ 7.899 $ 7.507 $ -- $(1.027) $(1.027) $ --#
2010 20.70 (0.264) 3.954 3.690 -- -- -- --#
2009 (6) 20.00 (0.025) 0.725 0.700 -- -- -- --
CLASS C SHARES
2011 $24.23 $(0.580) $ 7.867 $ 7.287 $ -- $(1.027) $(1.027) $ --#
2010 20.69 (0.401) 3.941 3.540 -- -- -- --#
2009 (6) 20.00 (0.039) 0.729 0.690 -- -- -- --
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
--------------------------
FIDUCIARY SHARES
2011 $22.85 27.25% $215,699 1.13% 1.29% (0.67)% 23%
2010 17.98 19.55 19,588 1.11 1.32 (0.63) 26
2009 (5) 15.04 6.89 1,459 1.13*~ 1.25*~ (0.50)* 24
CLASS A SHARES
2011 $22.71 26.82% $195,872 1.38% 1.54% (0.92)% 23%
2010 17.92 19.22 176,924 1.38 1.57 (0.90) 26
2009 (2) 15.03 11.16 148,670 1.70*~ 1.72*~ (1.07)* 24
2008 (3) 13.53 (34.29) 132,592 1.38 1.38 (0.91) 22
2007 (3) 21.80 19.11 211,653 1.37 1.37 (0.90) 36
2006 (3) 18.37 10.86 184,239 1.36 1.36 (0.76) 22
CLASS B SHARES
2011 $20.70 26.15% $ 5,579 1.98% 2.04% (1.52)% 23%
2010 16.44 18.53 6,209 1.98 2.07 (1.50) 26
2009 (2) 13.87 10.52 7,420 2.42*~ 2.42*~ (1.78)* 24
2008 (3) 12.55 (34.77) 8,143 2.13 2.13 (1.66) 22
2007 (3) 20.45 18.19 17,627 2.11 2.11 (1.65) 36
2006 (3) 17.37 10.01 23,823 2.11 2.11 (1.49) 22
CLASS C SHARES
2011 $20.96 26.14% $ 32,580 1.98% 2.04% (1.52)% 23%
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
----------------------------
GENEVA SMALL CAP GROWTH FUND
----------------------------
FIDUCIARY SHARES
2011 $31.04 31.28% $12,477 1.35% 2.00% (1.03)% 45%
2010 24.45 18.12 6,252 1.37 2.48 (0.89) 62
2009 (6) 20.70 3.50 1,598 1.37* 8.34* (0.73)* 7
CLASS A SHARES
2011 $30.87 30.90% $ 9,000 1.62% 2.25% (1.30)% 45%
2010 24.39 17.83 3,220 1.62 2.73 (1.15) 62
2009 (6) 20.70 3.50 1,988 1.62* 8.59* (0.98)* 7
CLASS C SHARES
2011 $30.49 30.18% $ 2,134 2.22% 2.75% (1.90)% 45%
2010 24.23 17.11% 260 2.22 3.23 (1.75) 62
2009 (6) 20.69 3.45 36 2.22* 9.09* (1.58)* 7
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) COMMENCED OPERATIONS ON JULY 24, 2009.
(2) 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.
(3) FOR THE YEAR ENDED OCTOBER 31.
(4) COMMENCED OPERATIONS ON AUGUST 1, 2008.
(5) COMMENCED OPERATIONS ON JUNE 26, 2009.
(6) COMMENCED OPERATIONS ON JUNE 12, 2009.
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
------------------------------------------------------------------------------------------------------------------------------------
--------------------------------
INTERNATIONAL OPPORTUNITIES FUND
--------------------------------
FIDUCIARY SHARES
2011 $ 6.33 $ 0.122 $ 1.151 $ 1.273 $(0.143) $ -- $(0.143) $ --+++
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) --
CLASS A SHARES
2011 $ 6.32 $ 0.109 $ 1.141 $ 1.250 $(0.120) $ -- $(0.120) $ --+++
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) --
CLASS C SHARES
2011 $ 6.26 $ 0.062 $ 1.133 $ 1.195 $(0.085) $ -- $(0.085) $ --+++
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) --
CLASS M SHARES
2011 $ 6.34 $ 0.135 $ 1.148 $ 1.283 $(0.153) $ -- $(0.153) $ --+++
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) --
---------------------
LARGE CAP GROWTH FUND
---------------------
FIDUCIARY SHARES
2011 $ 8.81 $ 0.021 $ 1.598 $ 1.619 $(0.119) $ -- $(0.119) $ --
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) --
CLASS A SHARES
2011 $ 8.64 $ (0.005) $ 1.572 $ 1.567 $(0.087) $ -- $(0.087) $ --
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 -- -- -- --
CLASS B SHARES
2011 $ 8.07 $ (0.060) $ 1.460 $ 1.400 $ -- $ -- $ -- $ --
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 -- -- -- --
CLASS C SHARES
2011 $ 8.02 $ (0.059) $ 1.451 $ 1.392 $(0.032) $ -- $(0.032) $ --
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 -- -- -- --
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
--------------------------------
FIDUCIARY SHARES
2011 $ 7.46 20.25% $ 93,101 1.45% 1.52% 1.69% 95%
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
CLASS A SHARES
2011 $ 7.45 20.05% $ 5,067 1.62% 1.77% 1.52% 95%
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
CLASS C SHARES
2011 $ 7.37 19.16% $ 2,290 2.27% 2.27% 0.87% 95%
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
CLASS M SHARES
2011 $ 7.47 20.39% $150,888 1.27% 1.27% 1.87% 95%
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
---------------------
LARGE CAP GROWTH FUND
---------------------
FIDUCIARY SHARES
2011 $10.31 18.41% $ 57,207 1.01% 1.24% 0.21% 41%
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
CLASS A SHARES
2011 $10.12 18.16% $ 16,621 1.27% 1.49% (0.05)% 41%
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
CLASS B SHARES
2011 $ 9.47 17.35% $ 1,881 1.87% 1.99% (0.65)% 41%
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
CLASS C SHARES
2011 $ 9.38 17.36% $ 2,861 1.87% 1.99% (0.65)% 41%
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
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
------------------------------------------------------------------------------------------------------------------------------------
--------------------
LARGE CAP VALUE FUND
--------------------
FIDUCIARY SHARES
2011 $10.27 $ 0.116 $ 1.240 $ 1.356 $(0.226) $ -- $(0.226) $ --
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) --
CLASS A SHARES
2011 $10.30 $ 0.085 $ 1.242 $ 1.327 $(0.197) $ -- $(0.197) $ --
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) --
CLASS B SHARES
2011 $10.11 $ 0.016 $ 1.220 $ 1.236 $(0.136) $ -- $(0.136) $ --
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) --
CLASS C SHARES
2011 $10.08 $ 0.016 $ 1.212 $ 1.228 $(0.138) $ -- $(0.138) $ --
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) --
-----------------------------
NYSE ARCA TECH 100 INDEX FUND
-----------------------------
FIDUCIARY SHARES
2011 $25.69 $ 0.050 $ 6.520 $ 6.570 $ -- $ -- $ -- $ --
2010 22.06 (0.002) 3.632 3.630 -- -- -- --
2009 (1) 22.04 0.001 0.019 0.020 -- -- -- --
CLASS A SHARES
2011 $25.62 $(0.046) $ 6.496 $ 6.450 $ -- $ -- $ -- $ --
2010 22.06 (0.063) 3.623 3.560 -- -- -- --
2009 (2) 18.53 (0.029) 3.559 3.530 -- -- -- --
2008 (3) 29.13 (0.10)^^ (10.50) (10.60) -- -- -- --
2007 (3) 24.67 (0.12)^^ 4.58 4.46 -- -- -- --
2006 (3) 23.10 (0.12)^^ 1.69 1.57 -- -- -- --
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
--------------------
FIDUCIARY SHARES
2011 $11.40 13.27% $ 73,026 0.97% 1.19% 1.02% 47%
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
CLASS A SHARES
2011 $11.43 12.95% $ 20,160 1.25% 1.44% 0.74% 47%
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
CLASS B SHARES
2011 $11.21 12.28% $ 747 1.85% 1.94% 0.14% 47%
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
CLASS C SHARES
2011 $11.17 12.24% $ 2,168 1.85% 1.94% 0.14% 47%
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
-----------------------------
NYSE ARCA TECH 100 INDEX FUND
-----------------------------
FIDUCIARY SHARES
2011 $32.26 25.58% $ 5,990 0.77% 1.02% 0.16% 11%
2010 25.69 16.46 312 0.83 1.00 (0.01) 9
2009 (1) 22.06 0.09 20 0.83*~# 0.97*~# 0.24*# 10
CLASS A SHARES
2011 $32.07 25.17% $182,410 1.08% 1.27% (0.15)% 11%
2010 25.62 16.18 162,267 1.08 1.25 (0.26) 9
2009 (2) 22.06 19.05 166,899 1.27*~# 1.42*~ (0.21)*# 10
2008 (3) 18.53 (36.39) 157,076 1.08++ 1.08 (0.37)++ 19
2007 (3) 29.13 18.08 279,501 0.99++ 0.99 (0.45)++ 14
2006 (3) 24.67 6.80 275,177 0.99## 0.99 (0.47)## 11
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 METHODS.
(1) COMMENCED OPERATIONS ON JULY 23, 2009.
(2) 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.
(3) FOR THE YEAR ENDED OCTOBER 31. The accompanying notes are an integral part
of the financial statements.
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
------------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------
NYSE ARCA TECH 100 INDEX FUND (CONTINUED)
-----------------------------------------
CLASS B SHARES
2011 $23.35 $(0.206) $ 5.906 $ 5.700 $ -- $ -- $ -- $ --
2010 20.22 (0.191) 3.321 3.130 -- -- -- --
2009 (1) 17.08 (0.115) 3.255 3.140 -- -- -- --
2008 (2) 27.06 (0.37)^ (9.61) (9.98) -- -- -- --
2007 (2) 23.09 (0.37)^ 4.34 3.97 -- -- -- --
2006 (2) 21.78 (0.31)^ 1.62 1.31 -- -- -- --
CLASS C SHARES
2011 $23.78 $(0.212) $ 6.012 $ 5.800 $ -- $ -- $ -- $ --
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 -- -- -- --
------------------------
SMALL CAP ADVANTAGE FUND
------------------------
FIDUCIARY SHARES
2011 $14.54 $(0.055) $ 4.755 $ 4.700 $ -- $ -- $ -- $ --+++
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
2011 $14.47 $(0.111) $ 4.731 $ 4.620 $ -- $ -- $ -- $ --+++
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
2011 $14.22 $(0.216) $4.646 $ 4.430 $ -- $ -- $ -- $ --+++
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
2011 $11.73 $ 0.175 $ 1.969 $ 2.144 $(0.164) $ -- $(0.164) $ --+++
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
CLASS A SHARES
2011 $11.40 $ 0.133 $ 1.915 $ 2.048 $(0.128) $ -- $(0.128) $ --+++
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
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 B SHARES
2011 $29.05 24.46% $ 7,102 1.68% 1.77% (0.75)% 11%
2010 23.35 15.48 9,889 1.68 1.75 (0.86) 9
2009 (1) 20.22 18.38 14,422 1.99*~# 2.11*~ (0.92)*# 10
2008 (2) 17.08 (36.88) 17,314 1.82++ 1.82 (1.10)++ 19
2007 (2) 27.06 17.19 54,103 1.74++ 1.74 (1.20)++ 14
2006 (2) 23.09 6.01 74,106 1.74## 1.74 (1.22)## 11
CLASS C SHARES
2011 $29.58 24.43% $ 11,269 1.68% 1.77% (0.75)% 11%
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
------------------------
SMALL CAP ADVANTAGE FUND
------------------------
FIDUCIARY SHARES
2011 $19.24 32.33% $ 27,137 1.31% 1.76% (0.31)% 67%
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
2011 $19.09 32.00% $ 536 1.62% 2.01% (0.62)% 67%
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
2011 $18.65 31.15% $ 217 2.22% 2.51% (1.22)% 67%
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
2011 $13.71 18.29% $ 31,967 1.23% 1.69% 1.31% 22%
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
CLASS A SHARES
2011 $13.32 17.98% $ 12,811 1.50% 1.94% 1.04% 22%
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
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
------------------------------------------------------------------------------------------------------------------------------------
--------------------------------
SMALL CAP VALUE FUND (CONTINUED)
--------------------------------
CLASS B SHARES
2011 $10.74 $0.053 $ 1.807 $ 1.860 $ -- $ -- $ -- $ --+++
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
CLASS C SHARES
2011 $10.67 $0.054 $ 1.788 $ 1.842 $(0.062) $ -- $(0.062) $ --+++
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
-------------------
VALUE MOMENTUM FUND
-------------------
FIDUCIARY SHARES
2011 $13.64 $0.192 $ 2.572 $ 2.764 $(0.314) $ -- $(0.314) $ --
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) --
CLASS A SHARES
2011 $13.61 $0.153 $ 2.566 $ 2.719 $(0.279) $ -- $(0.279) $ --
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) --
CLASS B SHARES
2011 $13.32 $0.059 $ 2.506 $ 2.565 $(0.195) $ -- $(0.195) $ --
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) --
CLASS C SHARES
2011 $13.26 $0.059 $ 2.509 $ 2.568 $(0.198) $ -- $(0.198) $ --
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) --
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
------------------------------------------------------------------------------------------------------------------
--------------------------------
SMALL CAP VALUE FUND (CONTINUED)
--------------------------------
CLASS B SHARES
2011 $12.60 17.32% $ 628 2.10% 2.44% 0.44% 22%
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
CLASS C SHARES
2011 $12.45 17.27% $ 4,544 2.10% 2.44% 0.44% 22%
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
-------------------
VALUE MOMENTUM FUND
-------------------
FIDUCIARY SHARES
2011 $16.09 20.50% $234,785 1.02% 1.13% 1.24% 26%
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
CLASS A SHARES
2011 $16.05 20.12% $ 71,164 1.27% 1.38% 0.99% 26%
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
CLASS B SHARES
2011 $15.69 19.37% $ 2,212 1.87% 1.88% 0.39% 26%
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
CLASS C SHARES
2011 $15.63 19.48% $ 2,503 1.87% 1.88% 0.39% 26%
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
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%.
^ 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.
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 (LOSS) ON FROM INVESTMENT CAPITAL DIVIDENDS AND REDEMPTION
OF PERIOD INCOME (LOSS)+ INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS FEES
------------------------------------------------------------------------------------------------------------------------------------
------------------------------
CAPITAL GROWTH ALLOCATION FUND
------------------------------
FIDUCIARY SHARES
2011 $18.27 $ 0.210 $ 3.100 $ 3.310 $(0.210) $ -- $(0.210) $ --
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 (1) 25.10 0.140 1.218 1.358 (0.419) (0.319) (0.738) --
CLASS A SHARES
2011 $18.24 $ 0.163 $ 3.097 $ 3.260 $(0.160) $ -- $(0.160) $ --
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) --
CLASS C SHARES
2011 $18.03 $ 0.014 $ 3.063 $ 3.077 $(0.007) $ -- $(0.007) $ --
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) --
----------------------------------
DIVERSIFIED EQUITY ALLOCATION FUND
----------------------------------
FIDUCIARY SHARES
2011 $16.04 $ 0.119 $ 2.916 $ 3.035 $(0.065) $ -- $(0.065) $ --
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
2011 $15.96 $ 0.074 $ 2.909 $ 2.983 $(0.023) $ -- $(0.023) $ --
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
2011 $15.69 $(0.055) $ 2.855 $ 2.800 $ -- $ -- $ -- $ --
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
2011 $19.15 $ 0.303 $ 2.580 $ 2.883 $(0.303) $ -- $(0.303) $ --
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
2011 $19.09 $ 0.243 $ 2.567 $ 2.810 $(0.250) $ -- $(0.250) $ --
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) --
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
------------------------------
FIDUCIARY SHARES
2011 $21.37 18.18% $ 213 0.32% 0.93% 1.02% 37%
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 (1) 25.72 5.50 770 0.31* 0.70* 0.75* 16
CLASS A SHARES
2011 $21.34 17.91% $26,327 0.57% 1.18% 0.77% 37%
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
CLASS C SHARES
2011 $21.10 17.07% $17,676 1.27% 1.68% 0.07% 37%
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
----------------------------------
DIVERSIFIED EQUITY ALLOCATION FUND
----------------------------------
FIDUCIARY SHARES
2011 $19.01 18.93% $ 552 0.33% 1.47% 0.65% 42%
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
2011 $18.92 18.70% $ 8,983 0.57% 1.72% 0.40% 42%
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
2011 $18.49 17.85% $ 6,030 1.27% 2.22% (0.30)% 42%
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
2011 $21.73 15.12% $ 1,031 0.33% 0.87% 1.40% 39%
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
2011 $21.65 14.77% $30,422 0.57% 1.12% 1.15% 39%
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
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 (LOSS) ON FROM INVESTMENT CAPITAL DIVIDENDS AND REDEMPTION
OF PERIOD INCOME+ INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS FEES
------------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------
GROWTH & INCOME ALLOCATION FUND (CONTINUED)
-------------------------------------------
CLASS C SHARES
2011 $18.98 $0.095 $ 2.552 $ 2.647 $(0.107) $ -- $(0.107) $ --
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) --
---------------------------
INCOME PLUS ALLOCATION FUND
---------------------------
FIDUCIARY SHARES
2011 $19.74 $0.405 $ 1.544 $ 1.949 $(0.416) $(0.073) $(0.489) $ --
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
2011 $19.74 $0.354 $ 1.533 $ 1.887 $(0.364) $(0.073) $(0.437) $ --
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) --
CLASS C SHARES
2011 $19.61 $0.206 $ 1.523 $ 1.729 $(0.226) $(0.073) $(0.299) $ --
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) --
---------
BOND FUND
---------
FIDUCIARY SHARES
2011 $11.38 $0.420 $ 0.182 $ 0.602 $(0.427) $(0.095) $(0.522) $ --
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) --
CLASS A SHARES
2011 $11.21 $0.385 $ 0.179 $ 0.564 $(0.399) $(0.095) $(0.494) $ --
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) --
CLASS B SHARES
2011 $11.16 $0.308 $ 0.174 $ 0.482 $(0.317) $(0.095) $(0.412) $ --
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) --
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
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------
GROWTH & INCOME ALLOCATION FUND (CONTINUED)
-------------------------------------------
CLASS C SHARES
2011 $21.52 14.02% $ 20,347 1.27% 1.62% 0.45% 39%
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
---------------------------
INCOME PLUS ALLOCATION FUND
---------------------------
FIDUCIARY SHARES
2011 $21.20 9.95% $ 660 0.33% 1.16% 1.94% 41%
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
2011 $21.19 9.62% $ 8,304 0.57% 1.41% 1.69% 41%
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
CLASS C SHARES
2011 $21.04 8.86% $ 8,514 1.28% 1.91% 0.99% 41%
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
---------
BOND FUND
---------
FIDUCIARY SHARES
2011 $11.46 5.45% $337,143 0.79% 1.01% 3.70% 58%
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
CLASS A SHARES
2011 $11.28 5.09% $ 29,449 1.04% 1.26% 3.45% 58%
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
CLASS B SHARES
2011 $11.23 4.44% $ 326 1.72% 1.76% 2.77% 58%
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
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 173
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+ INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS FEES
------------------------------------------------------------------------------------------------------------------------------------
---------------------
BOND FUND (CONTINUED)
---------------------
CLASS C SHARES
2011 $11.15 $0.334 $ 0.183 $0.517 $(0.352) $(0.095) $(0.447) $ --
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) --
------------------------------------------
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND
------------------------------------------
FIDUCIARY SHARES
2011 $10.23 $0.282 $(0.044) $0.238 $(0.278) $ -- $(0.278) $ --
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) --
CLASS A SHARES
2011 $10.18 $0.256 $(0.044) $0.212 $(0.252) $ -- $(0.252) $ --
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) --
CLASS B SHARES
2011 $10.18 $0.186 $(0.050) $0.136 $(0.176) $ -- $(0.176) $ --
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) --
CLASS C SHARES
2011 $10.15 $0.209 $(0.051) $0.158 $(0.208) $ -- $(0.208) $ --
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) --
----------------------------------------
NATIONAL INTERMEDIATE TAX-FREE BOND FUND
----------------------------------------
FIDUCIARY SHARES
2011 $11.48 $0.319 $(0.046) $0.273 $(0.321) $(0.002) $(0.323) $ --
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) --
CLASS A SHARES
2011 $11.48 $0.291 $(0.057) $ 0.234 $(0.292) $(0.002) $(0.294) $ --
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) --
CLASS C SHARES
2011 $11.49 $0.239 $(0.056) $0.183 $(0.241) $(0.002) $(0.243) $ --
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) --
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
-------------------------------------------------------------------------------------------------------------------
---------------------
BOND FUND (CONTINUED)
---------------------
CLASS C SHARES
2011 $11.22 4.77% $ 7,774 1.47% 1.51% 3.02% 58%
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
------------------------------------------
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND
------------------------------------------
FIDUCIARY SHARES
2011 $10.19 2.38% $123,644 0.54% 1.02% 2.79% 32%
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
CLASS A SHARES
2011 $10.14 2.13% $ 78,038 0.79% 1.27% 2.54% 32%
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
CLASS B SHARES
2011 $10.14 1.36% $ 94 1.49% 1.77% 1.84% 32%
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
CLASS C SHARES
2011 $10.10 1.59% $ 22,806 1.24% 1.52% 2.09% 32%
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
----------------------------------------
NATIONAL INTERMEDIATE TAX-FREE BOND FUND
----------------------------------------
FIDUCIARY SHARES
2011 $11.43 2.43% $ 79,902 0.52% 1.08% 2.81% 22%
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
CLASS A SHARES
2011 $11.42 2.08% $ 23,674 0.77% 1.33% 2.56% 22%
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
CLASS C SHARES
2011 $11.43 1.71% $ 4,161 1.22% 1.58% 2.11% 22%
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
The accompanying notes are an integral part of the financial statements.
174 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+ INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS FEES
------------------------------------------------------------------------------------------------------------------------------------
--------------------
SHORT TERM BOND FUND
--------------------
FIDUCIARY SHARES
2011 $10.12 $0.219 $ 0.006 $0.225 $(0.245) $ -- $(0.245) $ --
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) --
CLASS A SHARES
2011 $10.10 $0.191 $ 0.016 $0.207 $(0.217) $ -- $(0.217) $ --
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) --
CLASS C SHARES
2011 $10.22 $0.147 $ 0.014 $0.161 $(0.171) $ -- $(0.171) $ --
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) --
-------------------------
WISCONSIN TAX-EXEMPT FUND
-------------------------
FIDUCIARY SHARES
2011 (4) $10.52 $0.384 $(0.127) $0.257 $(0.395) $(0.012) $(0.407) $ --
CLASS A SHARES
2011 $10.52 $0.365 $(0.134) $0.231 $(0.369) $(0.012) $(0.381) $ --
2010 10.10 0.359 0.422 0.781 (0.361) -- (0.361) --
2009 (5) 9.61 0.267 0.481 0.748 (0.258) -- (0.258) --
2008 (6) 10.35 0.37^ (0.74) (0.37) (0.37) -- (0.37) --
2007 (6) 10.49 0.37^ (0.14) 0.23 (0.37) -- (0.37) --
2006 (6) 10.36 0.37^ 0.13 0.50 (0.37) -- (0.37) --
CLASS B SHARES
2011 $10.51 $0.293 $(0.135) $0.158 $(0.296) $(0.012) $(0.308) $ --
2010 10.09 0.285 0.423 0.708 (0.288) -- (0.288) --
2009 (5) 9.60 0.212 0.482 0.694 (0.204) -- (0.204) --
2008 (6) 10.34 0.29^ (0.74) (0.45) (0.29) -- (0.29) --
2007 (6) 10.48 0.29^ (0.14) 0.15 (0.29) -- (0.29) --
2006 (6) 10.35 0.29^ 0.13 0.42 (0.29) -- (0.29) --
CLASS C SHARES
2011 $10.51 $0.318 $(0.133) $0.185 $(0.323) $(0.012) $(0.335) $ --
2010 10.09 0.311 0.424 0.735 (0.315) -- (0.315) --
2009 (5) 9.60 0.216 0.481 0.697 (0.207) -- (0.207) --
2008 (6) 10.34 0.29^ (0.74) (0.45) (0.29) -- (0.29) --
2007 (6) 10.48 0.30^ (0.15) 0.15 (0.29) -- (0.29) --
2006 (6) 10.35 0.29^ 0.13 0.42 (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 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
--------------------
FIDUCIARY SHARES
2011 $10.10 2.35% $ 87,476 0.67% 0.98% 2.17% 48%
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
CLASS A SHARES
2011 $10.09 2.07% $ 24,353 0.95% 1.23% 1.89% 48%
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
CLASS C SHARES
2011 $10.21 1.59% $ 20,876 1.40% 1.48% 1.44% 48%
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
-------------------------
WISCONSIN TAX-EXEMPT FUND
-------------------------
FIDUCIARY SHARES
2011 (4) $10.37 2.45% $ 282 0.65%* 1.06%* 3.78%* 10%
CLASS A SHARES
2011 $10.37 2.28% $130,165 0.90% 1.31% 3.53% 10%
2010 10.52 7.95 146,665 0.90 1.29 3.45 13
2009 (5) 10.10 7.76 140,399 1.03* 1.28* 3.61* 9
2008 (6) 9.61 (3.72) 143,533 0.95 1.06 3.59 9
2007 (6) 10.35 2.24 157,899 0.99 1.04 3.56 9
2006 (6) 10.49 4.89 154,008 1.08 1.08 3.54 6
CLASS B SHARES
2011 $10.36 1.66% $ 2,100 1.60% 1.81% 2.83% 10%
2010 10.51 7.10 2,898 1.60 1.79 2.75 13
2009 (5) 10.09 7.18 3,142 1.77* 1.98* 2.87* 9
2008 (6) 9.60 (4.43) 3,319 1.70 1.81 2.84 9
2007 (6) 10.34 1.51 3,562 1.74 1.79 2.81 9
2006 (6) 10.48 4.14 3,630 1.83 1.83 2.79 6
CLASS C SHARES
2011 $10.36 1.93% $ 10,831 1.35% 1.56% 3.08% 10%
2010 10.51 7.37 10,157 1.35 1.54 3.00 13
2009 (5) 10.09 7.22 6,406 1.72* 1.93* 2.92* 9
2008 (6) 9.60 (4.33) 6,009 1.70 1.81 2.84 9
2007 (6) 10.34 1.51 6,640 1.74 1.79 2.81 9
2006 (6) 10.48 4.14 4,631 1.83 1.83 2.79 6
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.
** 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.
^ 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) COMMENCED OPERATIONS ON AUGUST 3, 2010.
(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 175
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2011
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 thirty-one 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, 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
U 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.
176 HIGHMARK(R) FUNDS
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 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 (includ- ing 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 determin- ing 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.
At the end of each calendar quarter, management evaluates the classification of
Levels 1, 2 and 3 assets and liabilities. Various factors are considered, such
as changes in liquidity from the prior reporting period; whether or not a broker
is willing to execute at the quoted price; the depth and consistency of prices
from third party pricing services; and the existence of contemporaneous,
observable trades in the market. Additionally, management evaluates the
classification of Level 1 and Level 2 assets and liabilities on a quarterly
basis for changes in listings or delistings on national exchanges. Transfers in
and out of Level 1, 2 and 3 are based on values at the end of period.
Due to the inherent uncertainty of determining the fair value of investments
that do not have a readily available market value, the fair value of the Funds'
investments may fluctuate from period to period. Additionally, the fair value of
investments may differ significantly from the values that would have been used
had a ready market existed for such investments and may differ materially from
the values the Funds may ultimately realize. Further, such investments may be
subject to legal and other restrictions on resale or otherwise less liquid than
publicly traded securities.
For the year ended July 31, 2011, there were no transfers between Levels 1, 2
and 3 for the Funds.
A summary of the levels for each of the Fund's investments as of July 31, 2011
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 are
translated to U.S. dollars at the current rate of exchange; and
(II) purchases and sales of investment securities, income and expenses
are translated to U.S. dollars 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
HIGHMARK(R) FUNDS 177
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JULY 31, 2011
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 Funds did not engage
in forward contracts during the year ended July 31, 2011. The only Fund to have
engaged in foreign currency contracts was the International Opportunities Fund,
which used foreign currency contracts in connection with settling planned
purchases or sales of investments. During the year ended July 31, 2011, 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, 2011, and the net realized gain (loss) and change in unrealized appreciation
(depreciation) on foreign currency contracts for the year ended July 31, 2011,
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.
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 coun-terparty enters
an insolvency proceeding, realization of the collateral by a Fund may be delayed
or limited.
OPTIONS TRANSACTIONS -- In the normal course of pursuing their 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.
The Enhanced Growth Fund was the only Fund in which options were traded during
the year ended July 31, 2011. During the year ended July 31, 2011, the average
number of options contracts outstanding, based on a quarterly average, was 13
with respect to the Enhanced Growth Fund. The net realized gain (loss) on
written option contracts for the year ended July 31, 2011 are presented in a
separate line on the statement of operations.
FUTURES CONTRACTS - The Core Equity Fund, the Equity Income Fund, the
Fundamental Equity Fund, the Large Cap Growth Fund, the NYSE Arca Tech 100 Index
Fund and the Small Cap Advantage Fund utilized futures contracts during the year
ended July 31, 2011. 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 Funds record 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.
178 HIGHMARK(R) FUNDS
As of July 31, 2011, the Core Equity Fund, the Equity Income Fund, the NYSE Arca
Tech 100 Index Fund and the Small Cap Advantage Fund were the only Funds to have
open futures contracts. During the year ended July 31, 2011, the average number
of futures contracts outstanding, based on a quarterly average, was 22, 5, 26
and 9 on the Core Equity Fund, the Equity Income Fund, the NYSE Arca Tech 100
Index Fund and the Small Cap Advantage Fund, respectively. The unrealized
appreciation and depreciation on futures contracts at July 31, 2011, and the net
realized gain (loss) and change in unrealized appreciation (depreciation) on
futures contracts for the year ended July 31, 2011, 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. The Funds
may maintain, in a segregated account with their 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.
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, 2011, the Cognitive Value Fund, the Geneva Small Cap
Growth Fund, the International Opportunities Fund, the Small Cap Advantage Fund
and the Small Cap Value Fund received redemption fees of $11, $875, $135, $63
and $387, 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
HIGHMARK(R) FUNDS 179
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JULY 31, 2011
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
The Adviser contractually agreed to reduce its fees through November 30, 2011
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
FIDUCIARY CLASS A CLASS B CLASS C CLASS M
SHARES SHARES SHARES SHARES SHARES
--------- ------- ------- ------- -------
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 a Fund's
future total return.
On July 31, 2011, the amounts subject to possible future recoupment under the
Funds' expense limitation agreement are as follows:
EXPIRING EXPIRING
2013 2014
-------- --------
Balanced ................................................ $ 73,760 $115,433
Cognitive Value ......................................... -- 9,308
Core Equity ............................................. 48,012 79,695
Enhanced Growth ......................................... 3,996 28,031
Equity Income ........................................... 73,275 126,695
Fundamental Equity ...................................... 61,786 86,489
Geneva Mid Cap Growth ................................... 122,334 210,531
Geneva Small Cap Growth ................................. 47,565 89,482
Large Cap Growth ........................................ 66,315 104,813
Large Cap Value ......................................... 93,692 101,382
NYSE Arca Tech 100 Index ................................ 68,245 185,874
Small Cap Advantage ..................................... 48,889 78,535
Small Cap Value ......................................... 166,746 232,587
Value Momentum .......................................... 6,388 27,483
Capital Growth Allocation ............................... 113,246 178,836
Diversified Equity Allocation ........................... 60,394 105,317
Growth & Income Allocation .............................. 99,056 168,054
Income Plus Allocation .................................. 66,595 108,545
Bond .................................................... 53,629 133,816
California Intermediate Tax-Free Bond ................... 334,529 628,741
National Intermediate Tax-Free Bond ..................... 239,461 391,114
Short Term Bond ......................................... 57,114 105,854
Wisconsin Tax-Exempt .................................... 200,279 322,056
A 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 June 1, 2011, the Adviser and Bailard, Inc. ("Bailard") are parties to
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, 0.35% 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
180 HIGHMARK(R) FUNDS
daily net assets on the first $250 million, 0.45% on the
daily net assets on the next $250 million, 0.425% on the daily net assets on the
next $500 million and 0.4% on the daily net assets over $1 billion of the
International Opportunities Fund. Bailard's fee is paid from the Adviser's fee.
Previously, Bailard had an investment sub-advisory agreement, with the same
compensation structure disclosed above, with the Adviser from April 3, 2006 to
May 31, 2011.
Effective October 8, 2010, the Adviser and Ziegler Lotsoff Capital Management,
LLC ("Ziegler") entered into a new investment sub-advisory agreement relating to
the 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 interim investment sub-advisory agreement, with
the same compensation structure disclosed above, with the Adviser from May 21,
2010 to October 7, 2010 relating to the Equity Income Fund.
Effective October 18, 2010, the Adviser and Ziegler entered into a new
investment sub-advisory agreement relating to the 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. Previously, Ziegler had an interim
investment sub-advisory agreement, with the same compensation structure
disclosed above, with the Adviser from May 21, 2010 to October 17, 2010 relating
to the NYSE Arca Tech 100 Index Fund.
Effective October 8, 2010, the Adviser and Ziegler entered into a new investment
sub-advisory agreement relating to the 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 interim
investment sub-advisory agreement, with the same compensation structure
disclosed above, with the Adviser from May 21, 2010 to October 7, 2010 relating
to the Wisconsin Tax-Exempt Fund.
The Adviser and Geneva Capital Management Ltd. ("Geneva") entered into two
investment sub-advisory agreements relating to the Geneva Mid Cap Growth Fund
and the 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
the Geneva Mid Cap Growth Fund and the 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.
The Adviser and LSV Asset Management ("LSV") are parties to 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.
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. The Administrator may voluntarily
waive its fee, subject to termination at any time by the Administrator.
HIGHMARK(R) FUNDS 181
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JULY 31, 2011
Pursuant to a separate agreement with the Administrator, BNY Mellon Investment
Servicing (US) Inc. (the "Sub-Administrator") 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, 2011, the Sub-Administrator earned
sub-administration fees in the amount of $692,598.
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.
Boston Financial Data Services, Inc. serves as the transfer agent,
dividend disbursing agent and shareholder servicing agent for the
Funds.
HighMark Funds Distributors, Inc. (the "Distributor"), a wholly owned subsidiary
of BNY Mellon Distributors Inc., and HighMark are parties to an underwriting
agreement dated July 1, 2010. 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.
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 a portion of their fees for certain classes of all Funds for the year
ended July 31, 2011. For the year ended July 31, 2011, the Bank, or its
affiliates earned shareholder servicing fees, net of waivers, from the Funds in
the amount of approximately $2,495,460, 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.
182 HIGHMARK(R) 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, 2011 are as follows:
INVESTMENT SECURITIES
-----------------------------
PURCHASES SALES
------------- -------------
Balanced ....................................... $ 10,960,565 $ 12,181,547
Cognitive Value ................................ 192,213,048 190,647,358
Core Equity .................................... 40,490,323 51,674,890
Enhanced Growth ................................ 19,883,215 13,712,678
Equity Income .................................. 15,313,007 12,754,581
Fundamental Equity ............................. 11,701,344 11,365,580
Geneva Mid Cap Growth .......................... 240,607,664 76,338,091
Geneva Small Cap Growth ........................ 17,564,701 7,429,939
International Opportunities .................... 226,899,832 237,674,219
Large Cap Growth ............................... 34,791,990 53,673,116
Large Cap Value ................................ 50,806,309 90,179,842
NYSE Arca Tech 100 Index ....................... 23,180,656 45,465,380
Small Cap Advantage ............................ 17,792,063 21,294,009
Small Cap Value ................................ 14,986,929 48,137,263
Value Momentum ................................. 80,274,955 125,689,986
Capital Growth Allocation ...................... 16,036,280 19,557,558
Diversified Equity Allocation .................. 11,562,089 4,751,901
Growth & Income Allocation ..................... 20,360,315 18,276,598
Income Plus Allocation ......................... 7,034,600 6,638,210
Bond ........................................... 177,832,618 183,235,206
California Intermediate Tax-Free Bond .......... 91,221,149 68,057,150
National Intermediate Tax-Free Bond ............ 26,407,079 23,473,045
Short Term Bond ................................ 76,651,889 50,444,852
Wisconsin Tax-Exempt ........................... 13,967,071 20,418,226
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, 2011 are as
follows:
INVESTMENT SECURITIES
-----------------------------
PURCHASES SALES
------------- -------------
Balanced ....................................... $ 659,382 $ 530,236
Bond ........................................... 34,175,594 26,055,247
Short Term Bond ................................ 5,938,006 9,209,810
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 SUBSCRIPTIONS REDEMPTIONS (LOSSES) INVESTMENTS
-------------------------------- ------------- ----------- ------------ -----------
Cognitive Value ................ $ 778,249 $ 202,331 $ 86,704 $ 2,245
Core Equity .................... 848,496 3,338,634 (698,635) 76,258
Enhanced Growth ................ 508,320 471,325 131,491 --
Fundamental Equity ............. 2,019,780 2,272,480 102,766 51,624
Geneva Mid Cap Growth .......... 855,592 107,837 58,033 --
Geneva Small Cap Growth ........ 494,270 304,447 93,736 --
International Opportunities .... 1,911,443 3,598,391 (501,534) 100,040
Large Cap Growth ............... 796,982 1,609,276 (161,455) 32,161
CAPITAL GROWTH ALLOCATION (CONTINUED)
-------------------------------------------------------------------------------------------
REALIZED INCOME FROM
AFFILIATED REGISTERED GAINS AFFILIATED
INVESTMENT COMPANY SUBSCRIPTIONS REDEMPTIONS (LOSSES) INVESTMENTS
-------------------------------- ------------- ----------- ------------ -----------
Large Cap Value ................ $ 1,333,847 $ 1,111,551 $ (198,167) $ 136,832
NYSE Arca Tech 100 Index ....... 596,050 221,437 42,060 --
Small Cap Advantage ............ 779,627 1,255,695 186,591 --
Small Cap Value ................ 372,150 541,742 335,514 18,964
Value Momentum ................. 899,775 1,751,775 278,071 18,460
Bond ........................... 304,978 53,670 1,135 6,091
Short Term Bond ................ 1,042,511 405,202 20,129 65,928
Diversified Money Market ....... 3,300,580 3,536,290 -- --
------------- ----------- ------------ -----------
TOTAL: ......................... $ 16,842,650 $20,782,083 $ (223,561) $ 508,603
============= =========== ============ ===========
DIVERSIFIED EQUITY ALLOCATION
-------------------------------------------------------------------------------------------
REALIZED INCOME FROM
AFFILIATED REGISTERED GAINS AFFILIATED
INVESTMENT COMPANY SUBSCRIPTIONS REDEMPTIONS (LOSSES) INVESTMENTS
-------------------------------- ------------- ----------- ------------ -----------
Cognitive Value ................ $ 304,228 $ 38,740 $ 21,678 $ 504
Core Equity .................... 1,529,100 538,741 105,018 22,572
Enhanced Growth ................ 303,045 159,434 32,439 --
Fundamental Equity ............. 1,519,727 372,113 101,447 12,513
Geneva Mid Cap Growth .......... 419,693 15,584 8,311 --
Geneva Small Cap Growth ........ 266,246 78,856 25,609 --
International Opportunities .... 1,574,097 692,863 198,848 21,437
Large Cap Growth ............... 523,303 200,903 95,142 5,228
Large Cap Value ................ 1,562,706 203,839 (3,338) 29,224
NYSE Arca Tech 100 Index ....... 257,062 78,261 14,764 --
Small Cap Advantage ............ 1,062,378 171,714 116,471 --
Small Cap Value ................ 412,849 195,903 90,226 4,155
Value Momentum ................. 417,788 392,377 67,205 4,233
Diversified Money Market ....... 1,850,989 1,848,495 -- --
------------- ----------- ------------ -----------
TOTAL: ......................... $ 12,003,211 $ 4,987,823 $ 873,820 $ 99,866
============= =========== ============ ===========
GROWTH & INCOME ALLOCATION
-------------------------------------------------------------------------------------------
REALIZED INCOME FROM
AFFILIATED REGISTERED GAINS AFFILIATED
INVESTMENT COMPANY SUBSCRIPTIONS REDEMPTIONS (LOSSES) INVESTMENTS
-------------------------------- ------------- ----------- ------------ -----------
Cognitive Value ................ $ 750,007 $ 171,055 $ 93,414 $ 2,112
Core Equity .................... 976,038 2,225,583 (36,271) 61,019
Enhanced Growth ................ 465,324 396,356 108,878 --
Fundamental Equity ............. 1,564,674 1,079,240 41,839 40,854
Geneva Mid Cap Growth .......... 919,232 117,339 58,230 --
Geneva Small Cap Growth ........ 521,084 287,843 90,171 --
International Opportunities .... 2,091,692 2,293,652 580,150 90,124
Large Cap Growth ............... 850,210 1,374,614 (51,118) 29,359
Large Cap Value ................ 1,707,799 1,130,776 (199,177) 121,342
NYSE Arca Tech 100 Index ....... 508,412 179,094 34,703 --
Small Cap Advantage ............ 1,057,211 802,626 594,306 --
Small Cap Value ................ 454,347 508,835 307,744 17,018
Value Momentum ................. 765,698 1,322,210 278,099 13,936
Bond ........................... 2,092,972 782,981 116,104 159,914
Short Term Bond ................ 2,979,276 1,219,787 57,878 173,833
Diversified Money Market ....... 4,378,993 5,585,826 -- --
------------- ----------- ------------ -----------
TOTAL: ......................... $ 22,082,969 $19,477,817 $ 2,074,950 $ 709,511
============= =========== ============ ===========
INCOME PLUS ALLOCATION
-------------------------------------------------------------------------------------------
REALIZED INCOME FROM
AFFILIATED REGISTERED GAINS AFFILIATED
INVESTMENT COMPANY SUBSCRIPTIONS REDEMPTIONS (LOSSES) INVESTMENTS
-------------------------------- ------------- ----------- ------------ -----------
Cognitive Value ................ $ 148,007 $ 29,891 $ 17,431 $ 420
HIGHMARK(R) FUNDS 183
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JULY 31, 2011
INCOME PLUS ALLOCATION (CONTINUED)
-------------------------------------------------------------------------------------------
REALIZED INCOME FROM
AFFILIATED REGISTERED GAINS AFFILIATED
INVESTMENT COMPANY SUBSCRIPTIONS REDEMPTIONS (LOSSES) INVESTMENTS
-------------------------------- ------------- ----------- ------------ -----------
Core Equity .................... $ 553,321 $ 522,894 $ 266,444 $ 15,455
Enhanced Growth ................ 103,114 85,317 14,878 --
Fundamental Equity ............. 510,118 215,323 124,756 9,786
Geneva Mid Cap Growth .......... 138,974 9,085 5,672 --
Geneva Small Cap Growth ........ 102,025 56,404 16,875 --
International Opportunities .... 326,133 443,651 100,245 5,802
Large Cap Growth ............... 363,030 251,248 149,924 10,130
Large Cap Value ................ 659,737 285,389 126,492 27,451
NYSE Arca Tech 100 Index ....... 91,018 27,460 5,270 --
Small Cap Advantage ............ 387,573 261,087 182,279 --
Small Cap Value ................ 143,939 143,605 67,381 3,315
Value Momentum ................. 171,708 365,858 57,481 4,629
Bond ........................... 1,080,556 871,836 124,861 114,803
Short Term Bond ................ 1,610,081 1,251,356 39,176 126,314
Diversified Money Market ....... 2,988,164 3,621,673 -- --
------------- ----------- ------------ -----------
TOTAL: ......................... $ 9,377,498 $ 8,442,077 $ 1,299,165 $ 318,105
============= =========== ============ ===========
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, 2008 through 2011) 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, 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 losses on paydowns of
mortgage- and asset-backed securities, different treatment for income, gains and
losses from partnership securities, capital loss carryforwards expiring,
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 ............................... $ 1,444 $ (1,444) $ --
Cognitive Value ........................ 387,264 (387,264) --
Enhanced Growth ........................ 198,127 (3,421) (194,706)
Equity Income .......................... (9,829) 9,829 --
Geneva Mid Cap Growth .................. 3,043,801 -- (3,043,801)
Geneva Small Cap Growth ................ 199,858 (199,858) --
International Opportunities ............ 702,958 (702,958) --
Large Cap Growth ....................... -- 32,717,402 (32,717,402)
Large Cap Value ........................ 5,649 2,315 (7,964)
NYSE Arca Tech 100 Index ............... 423,563 -- (423,563)
Small Cap Advantage .................... 85,902 -- (85,902)
Value Momentum ......................... 67,744 (67,744) --
Capital Growth Allocation .............. 11,048 (11,048) --
Diversified Equity Allocation .......... 2,406 (2,406) --
Growth & Income Allocation ............. 10,416 (10,416) --
Income Plus Allocation ................. 2,404 (2,404) --
Bond ................................... 235,239 (235,239) --
National Intermediate Tax-Free Bond .... (874) 874 --
Short Term Bond ........................ 322,548 (322,548) --
Wisconsin Tax-Exempt ................... (1,150) 1,150 --
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, 2011 and July 31, 2010 were as follows:
LONG-TERM RETURN
TAX-EXEMPT ORDINARY CAPITAL OF
INCOME INCOME (1) GAIN CAPITAL TOTAL
---------- ----------- ----------- ------- -----------
Balanced
2011 $ -- $ 393,280 $ -- $ -- $ 393,280
2010 -- 308,084 -- -- 308,084
Cognitive Value
2011 -- 1,222,687 -- -- 1,222,687
2010 -- 615,000 -- -- 615,000
Core Equity
2011 -- 694,987 -- -- 694,987
2010 -- 697,080 -- -- 697,080
Enhanced Growth
2011 -- -- -- -- --
2010 -- 109,185 -- -- 109,185
Equity Income
2011 -- 490,028 -- -- 490,028
2010 -- 359,452 -- -- 359,452
Fundamental Equity
2011 -- 210,840 -- -- 210,840
2010 -- 83,813 -- -- 83,813
Geneva Mid Cap
Growth
2011 -- -- 366,455 -- 366,455
2010 -- -- -- -- --
Geneva Small
Cap Growth
2011 -- 228,722 268,310 -- 497,032
2010 -- -- -- -- --
International
Opportunities
2011 -- 4,902,880 -- -- 4,902,880
2010 -- 5,341,844 -- -- 5,341,844
Large Cap Growth
2011 -- 962,853 -- -- 962,853
2010 -- 713,819 -- -- 713,819
184 HIGHMARK(R) FUNDS
LONG-TERM RETURN
TAX-EXEMPT ORDINARY CAPITAL OF
INCOME INCOME (1) GAIN CAPITAL TOTAL
---------- ----------- ----------- ------- -----------
Large Cap Value
2011 ........................ $ -- $ 2,151,872 $ -- $ -- $ 2,151,872
2010 ........................ -- 2,156,204 -- -- 2,156,204
Small Cap Advantage
2011 ........................ -- -- -- -- --
2010 ........................ -- 97,082 -- -- 97,082
Small Cap Value
2011 ........................ -- 810,971 -- -- 810,971
2010 ........................ -- 849,055 -- -- 849,055
Value Momentum
2011 ........................ -- 6,256,107 71,499 -- 6,327,606
2010 ........................ -- 3,643,504 -- -- 3,643,504
Capital Growth Allocation
2011 ........................ -- 207,318 -- -- 207,318
2010 ........................ -- 236,914 -- -- 236,914
Diversified Equity Allocation
2011 ........................ -- 6,266 -- -- 6,266
2010 ........................ -- 11,705 -- -- 11,705
Growth & Income Allocation
2011 ........................ -- 445,253 -- -- 445,253
2010 ........................ -- 444,506 -- -- 444,506
Income Plus Allocation
2011 ........................ -- 249,910 60,966 -- 310,876
2010 ........................ -- 205,340 -- -- 205,340
LONG-TERM RETURN
TAX-EXEMPT ORDINARY CAPITAL OF
INCOME INCOME (1) GAIN CAPITAL TOTAL
---------- ----------- ----------- ------- -----------
Bond
2011 ........................ $ -- $13,824,027 $ 3,048,333 $ -- $16,872,360
2010 ........................ -- 14,907,264 -- -- 14,907,264
California Intermediate Tax-Free
Bond
2011 ........................ 5,722,725 -- -- -- 5,722,725
2010 ........................ 5,333,413 21 274,537 -- 5,607,971
National Intermediate Tax-Free
Bond
2011 ........................ 2,986,280 -- 14,144 -- 3,000,424
2010 ........................ 2,903,362 -- -- -- 2,903,362
Short Term Bond
2011 ........................ -- 2,936,807 -- -- 2,936,807
2010 ........................ -- 2,503,369 -- -- 2,503,369
Wisconsin Tax-Exempt
2011 ........................ 5,355,376 8,551 181,311 -- 5,545,238
2010 ........................ 5,298,364 21,671 4,609 -- 5,324,644
(1) For tax purposes, short-term capital gain distributions, if any, are
considered ordinary income distributions.
Amounts designated as "--" are $0.
As of July 31, 2011, 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 .................................. $ 12,964 $ -- $ -- $ (816,997)
Cognitive Value ........................... 358,505 -- -- (2,838,432)
Core Equity ............................... 10,804 -- -- (19,119,596)
Enhanced Growth ........................... -- -- -- (14,638,786)
Equity Income ............................. 18,552 -- -- (8,985,533)
Fundamental Equity ........................ 48,166 -- -- (751,560)
Geveva Mid Cap Growth ..................... -- -- 10,291,995 --
Geneva Small Cap Growth ................... -- -- 847,232 --
International Opportunities ............... 6,174,887 -- -- (44,679,388)
Large Cap Growth .......................... 87,672 -- -- (15,600,344)
Large Cap Value ........................... -- -- -- (43,462,075)
NYSE Arca Tech 100 Index .................. -- -- -- (113,784,132)
Small Cap Advantage ....................... -- -- -- (5,389,265)
Small Cap Value ........................... 187,479 -- -- (27,663,394)
Value Momentum ............................ -- -- 9,567,890 (1,220,212)
Capital Growth Allocation ................. 49,148 -- -- (9,512,056)
Diversified Equity Allocation ............. 9,884 -- 54,344 --
Growth & Income Allocation ................ 54,908 -- -- (5,688,948)
Income Plus Allocation .................... 65,635 -- 540,241 --
Bond ...................................... 1,553,937 -- 5,475,656 --
California Intermediate
Tax-Free Bond .......................... -- 102,513 -- (4,425)
National Intermediate
Tax-Free Bond .......................... -- 11,546 -- --
Short Term Bond ........................... 16,757 -- -- (233,426)
Wisconsin Tax-Exempt ...................... -- 13,825 -- --
TOTAL
DISTRIBUTABLE
POST- UNREALIZED OTHER EARNINGS
OCTOBER APPRECIATION TEMPORARY (ACCUMULATED
LOSSES (DEPRECIATION) DIFFERENCES LOSSES)
------------- -------------- ------------- -------------
Balanced .................................. $ -- $ 3,799,602 $ -- $ 2,995,569
Cognitive Value ........................... -- 4,357,674 -- 1,877,747
Core Equity ............................... -- 2,872,393 -- (16,236,399)
Enhanced Growth ........................... -- 27,903,041 -- 13,264,255
Equity Income ............................. -- 2,151,102 -- (6,815,879)
Fundamental Equity ........................ -- 2,328,622 -- 1,625,228
Geveva Mid Cap Growth ..................... -- 101,842,810 -- 112,134,805
Geneva Small Cap Growth ................... -- 3,091,703 -- 3,938,935
International Opportunities ............... (229,810) 38,310,867 -- (423,444)
Large Cap Growth .......................... -- 17,624,198 -- 2,111,526
Large Cap Value ........................... (2,497) (304,162) -- (43,768,734)
NYSE Arca Tech 100 Index .................. -- 65,767,201 -- (48,016,931)
Small Cap Advantage ....................... -- 4,909,247 -- (480,018)
Small Cap Value ........................... -- (1,721,974) -- (29,197,889)
Value Momentum ............................ (3,755) 48,836,279 -- 57,180,202
Capital Growth Allocation ................. (16,487) 276,829 -- (9,202,566)
Diversified Equity Allocation ............. -- 102,072 -- 166,300
Growth & Income Allocation ................ -- 614,975 -- (5,019,065)
Income Plus Allocation .................... -- 582,034 -- 1,187,910
Bond ...................................... -- 18,692,671 -- 25,722,264
California Intermediate
Tax-Free Bond .......................... (111,322) 7,169,941 -- 7,156,707
National Intermediate
Tax-Free Bond .......................... -- 4,646,715 -- 4,658,261
Short Term Bond ........................... -- 1,712,396 -- 1,495,727
Wisconsin Tax-Exempt ...................... (438,670) 2,495,388 -- 2,070,543
AMOUNTS DESIGNATED AS "--" ARE EITHER NOT APPLICABLE OR LESS THAN $1.00.
Post-October losses represent losses realized on investment transactions from
November 1, 2010 through July 31, 2011, that, in accordance with Federal income
tax regulations, a Fund may elect to defer and treat as having arisen in the
following year.
HIGHMARK(R) FUNDS 185
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JULY 31, 2011
For federal income tax purposes, capital loss carryforwards represent net
capital losses of a Fund that may be carried forward for a maximum period of
eight years and applied against future net realized gains. On December 22, 2010,
the Regulated Investment Company Modernization Act of 2010 was enacted to
modernize several of the federal income and excise tax provisions related to
regulated investment companies. Under pre-enactment law, capital losses could be
carried forward for eight years, and carried forward as short-term capital
losses, irrespective of the character of the original loss. New net capital
losses (those earned in taxable years beginning after December 22, 2010) may be
carried forward indefinitely and must retain the character of the original loss.
Such new net capital losses generally must be used by a regulated investment
company before it uses any net capital losses incurred in taxable years
beginning on or before December 22, 2010. This increases the likelihood that net
capital losses incurred in taxable years beginning on or before December 22,
2010 will expire unused. At July 31, 2011, the Funds had capital loss
carryforwards available to offset future realized capital gains through the
indicated expiration dates:
2012 2013 2014 2015 2016 2017 2018 2019 TOTAL
------- -------- ----------- ----------- ----------- ----------- ---------- ---------- ------------
Balanced .................... $ -- $ -- $ -- $ -- $ -- $ -- $ 816,997 $ -- $ 816,997
Cognitive Value ............. -- -- -- -- -- -- 2,838,432 -- 2,838,432
Core Equity ................. -- -- -- -- -- 6,886,471 12,233,125 -- 19,119,596
Enhanced Growth ............. 60,191 761,621 -- -- -- 2,060,779 11,756,195 -- 14,638,786
Equity Income ............... -- -- -- -- 4,909,034 3,822,036 254,463 -- 8,985,533
Fundamental Equity .......... -- -- -- -- -- -- 751,560 -- 751,560
International
Opportunities ............ -- -- -- -- -- 10,968,850 33,710,538 -- 44,679,388
Large Cap Growth ............ -- -- -- -- 943,708* 10,266,788 4,389,848 -- 15,600,344
Large Cap Value ............. -- -- -- 1,573,100* 393,275* 21,011,655 20,484,045 -- 43,462,075
NYSE Arca Tech 100 Index .... -- -- 44,147,742 38,357,084 14,282,341 16,996,965 -- -- 113,784,132
Small Cap Advantage ......... -- -- -- -- -- 191,551 5,197,714 -- 5,389,265
Small Cap Value ............. -- -- -- -- -- -- 27,663,394 -- 27,663,394
Value Momentum .............. -- -- -- 159,199* 1,061,013* -- -- -- 1,220,212
Capital Growth Allocation ... -- -- -- -- -- 2,232,328 4,958,426 2,321,302 9,512,056
Growth & Income Allocation .. -- -- -- -- -- 936,922 4,096,549 655,477 5,688,948
California Intermediate
Tax-Free Bond ............ -- -- -- -- -- -- -- 4,425 4,425
Short Term Bond ............. -- -- -- -- -- -- 233,426 -- 233,426
* Capital loss carryforward amount was inherited from a merging Fund and may
be subject to IRS limitations in a given year.
AMOUNTS DESIGNATED AS "--" ARE EITHER NOT APPLICABLE OR LESS THAN $1.00.
During the year ended July 31, 2011, capital loss carryforwards that were
utilized and/or expired are as follows:
Balanced ........................ $ 1,564,968
Cognitive Value ................. 20,075,125
Core Equity ..................... 4,868,905
Enhanced Growth ................. 2,490,659
Equity Income ................... 524,898
Fundamental Equity .............. 845,533
Geneva Mid Cap Growth ........... 2,277,681
International Opportunities ..... 27,504,572
Large Cap Growth ................ 39,025,017
Large Cap Value ................. 1,921,863
NYSE Arca Tech 100 Index ........ 9,992,076
Small Cap Advantage ............. 4,958,805
Small Cap Value ................. 3,316,352
Value Momentum .................. 15,858,944
Diversified Equity Allocation ... 501,728
Income Plus Allocation .......... 84,165
Short Term Bond ................. 32,767
At July 31, 2011, 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 ................................... $ 21,728,082 $ 4,396,991 $ (597,389) $ 3,799,602
Cognitive Value ............................ 89,005,903 8,576,819 (4,219,145) 4,357,674
Core Equity ................................ 54,178,885 5,929,719 (3,057,325) 2,872,394
Enhanced Growth ............................ 62,217,305 31,753,368 (3,850,327) 27,903,041
Equity Income .............................. 16,534,216 2,654,647 (503,545) 2,151,102
Fundamental Equity ......................... 15,587,734 2,713,910 (385,288) 2,328,622
Geneva Mid Cap Growth ...................... 348,585,647 105,923,649 (4,080,839) 101,842,810
Geneva Small Cap Growth .................... 20,462,527 3,750,886 (659,183) 3,091,703
International Opportunities ................ 219,390,106 46,835,163 (8,537,046) 38,298,117
Large Cap Growth ........................... 60,223,251 18,788,740 (1,164,542) 17,624,198
Large Cap Value ............................ 96,351,934 9,048,637 (9,354,988) (306,351)
NYSE Arca Tech 100 Index ................... 139,677,492 85,574,892 (19,807,691) 65,767,201
Small Cap Advantage ........................ 22,742,592 5,970,672 (1,061,425) 4,909,247
Small Cap Value ............................ 50,949,967 7,901,361 (9,623,335) (1,721,974)
Value Momentum ............................. 263,702,762 58,871,846 (10,039,085) 48,832,761
186 HIGHMARK(R) FUNDS
NET
FEDERAL APPRECIATION
TAX COST APPRECIATION DEPRECIATION (DEPRECIATION)
------------ ------------ ------------ --------------
Capital Growth Allocation .................. $ 43,959,149 $ 4,541,201 $ (4,264,372 $ 276,829
Diversified Equity Allocation .............. 15,416,406 970,547 (868,475) 102,072
Growth & Income Allocation ................. 51,146,269 5,787,349 (5,172,374) 614,975
Income Plus Allocation ..................... 16,864,533 1,032,346 (450,312) 582,034
Bond ....................................... 353,754,269 22,981,896 (4,289,225) 18,692,671
California Intermediate Tax-Free Bond ...... 216,462,281 7,558,168 (388,227) 7,169,941
National Intermediate Tax-Free Bond ........ 101,829,743 4,757,202 (110,487) 4,646,715
Short Term Bond ............................ 129,055,040 2,230,075 (517,679) 1,712,396
Wisconsin Tax-Exempt ....................... 141,974,644 3,402,882 (907,494) 2,495,388
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 period ended July 31,
2011, these fees totaled $320,045. 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, 2011 and the income generated from the program during the period ended July
31, 2011, with respect to such loans are as follows:
MARKET VALUE MARKET INCOME RECEIVED
OF SECURITIES VALUE OF FROM SECURITIES
LOANED COLLATERAL LENDING
------------- ------------ ---------------
International Opportunities ... $ 5,415,122 $ 5,679,199 $ 274,058
Small Cap Value ............... 47,884 98,150 23,293
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. NEW ACCOUNTING PRONOUNCEMENT
In May 2011, the Financial Accounting Standards Board issued Accounting
Standards Update ("ASU") No. 2011-04 "Amendments to Achieve Common Fair Value
Measurement and Disclosure Requirements in U.S. GAAP and IFRSs". ASU 2011-04
includes common requirements for measurement of and disclosure about fair value
between U.S. GAAP and IFRS. ASU 2011-04 will require reporting entities to
disclose the following information for fair value measurements categorized
within Level 3 of the fair value hierarchy: quantitative information about the
unobservable inputs used in the fair value measurement, the valuation processes
used by the reporting entity and a narrative description of the sensitivity of
the fair value measurement to changes in unobservable inputs and the
interrelationships between those unobservable inputs. In addition, ASU 2011-04
will require reporting entities to make disclosures about amounts and reasons
for all transfers in and out of Level 1 and Level 2 fair value measurements. The
new and revised disclosures are effective for interim and annual reporting
periods beginning after December 15, 2011. Management is currently evaluating
the implications of ASU No. 2011-04 and its impact on the financial statements.
HIGHMARK(R) FUNDS 187
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
JULY 31, 2011
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 that
there are no subsequent events that would require disclosure in or adjustment to
the financial statements with the exception of the following:
On September 1, 2011, the Trust's Board of Trustees approved the reorganization
of eight Funds and the name change of four Funds within the Trust as listed in
the table below. It is anticipated that each reorganization will be completed on
or around October 31, 2011.
ACQUIRING FUND
ACQUIRED FUND ACQUIRING FUND NAME CHANGE
-------------------- ------------------ ------------------
HighMark HighMark Core HighMark Large Cap
Fundamental Equity Fund Core Equity Fund
Equity Fund
HighMark Small HighMark Small Cap HighMark Small Cap
Cap Value Fund Advantage Fund Core Fund
HighMark Diversified HighMark Capital HighMark Tactical
Equity Allocation Growth Allocation Capital Growth
Fund Fund Allocation Fund
HighMark Income HighMark Growth & HighMark Tactical
Plus Allocation Fund Income Allocation Growth & Income
Fund Allocation Fund
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, 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 thirty-one Portfolios constituting the HighMark Funds (the
"Trust") as of July 31, 2011, 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, 2011, 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, 2011, 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.
As discussed in note 9, on September 1, 2011, the Trust's Board of Trustees
approved the reorganization of eight of the portfolios of the Trust, which is
expected to be completed on or around October 31, 2011.
DELOITTE & TOUCHE LLP
Philadelphia, Pennsylvania
September 23, 2011
HIGHMARK(R) FUNDS 189
ADDITIONAL INFORMATION (UNAUDITED)
JULY 31, 2011
1. SHAREHOLDER PROXY VOTE
At a special meeting of shareholders held on May 31, 2011 shares were voted as
follows on the proposals presented to the shareholders:
Proposal 1. To consider approving new sub-advisory agreements for HighMark
Cognitive Value Fund, HighMark Enhanced Growth Fund and HighMark International
Opportunities Fund between the Adviser and Bailard.
NO. OF
SHARES
--------------
Cognitive Value
For ............................................... 6,947,555.081
Against ........................................... 348.221
Abstain ........................................... 494.614
--------------
Total ............................................. 6,948,397.916
NO. OF
SHARES
--------------
Enhanced Growth
For ............................................... 6,907,803.663
Against ........................................... --
Abstain ........................................... 3,268.075
--------------
Total ............................................. 6,911,071.738
NO. OF
SHARES
--------------
International Opportunities
For ............................................... 27,797,832.482
Against ........................................... 8,902.971
Abstain ........................................... 31,214.948
--------------
Total ............................................. 27,837,950.401
190 HIGHMARK(R) FUNDS
NOTICE TO SHAREHOLDERS (UNAUDITED)
For shareholders that do not have a July 31, 2011 tax year end, this notice is
for informational purposes only. For shareholders with a July 31, 2011 tax year
end, please consult your tax adviser as to the pertinence of this notice.
For the fiscal year ended July 31, 2011, 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% 79.94% 87.02% 2.43% 53.00% 0.00%
Cognitive Value ............ 0.00% 100.00% 0.00% 100.00% 92.02% 100.00% 0.00% 0.07% 0.00%
Core Equity ................ 0.00% 100.00% 0.00% 100.00% 100.00% 100.00% 0.00% 0.13% 0.00%
Enhanced Growth ............ 0.00% 0.00% 0.00% 0.00% 0.00% 100.00% 0.00% 0.00% 0.00%
Equity Income .............. 0.00% 100.00% 0.00% 100.00% 100.00% 100.00% 0.00% 0.00% 0.00%
Fundamental Equity ......... 0.00% 100.00% 0.00% 100.00% 100.00% 100.00% 0.00% 0.19% 0.00%
Geneva Mid Cap Growth ...... 100.00% 0.00% 0.00% 100.00% 0.00% 100.00% 0.00% 0.00% 0.00%
Geneva Small Cap
Growth (4) .............. 53.98% 46.02% 0.00% 100.00% 23.49% 55.97% 0.00% 0.00% 0.00%
International
Opportunities (5) ....... 0.00% 100.00% 0.00% 100.00% 0.00% 100.00% 0.00% 0.00% 0.00%
Large Cap Growth ........... 0.00% 100.00% 0.00% 100.00% 100.00% 100.00% 0.00% 0.00% 0.00%
Large Cap Value ............ 0.00% 100.00% 0.00% 100.00% 100.00% 100.00% 0.00% 0.06% 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% 0.00% 0.00% 0.00% 0.00% 100.00% 0.00% 0.00% 0.00%
Small Cap Value ............ 0.00% 100.00% 0.00% 100.00% 100.00% 100.00% 0.00% 0.05% 0.00%
Value Momentum (4) ......... 1.13% 98.87% 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% 0.09% 0.00%
Diversified Equity
Allocation(4 ) .......... 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% 67.93% 92.62% 0.00% 0.18% 0.00%
Income Plus Allocation ..... 19.61% 80.39% 0.00% 100.00% 25.46% 30.05% 0.00% 0.00% 0.00%
Bond (4) ................... 18.07% 81.93% 0.00% 100.00% 0.00% 0.00% 4.90% 91.69% 8.24%
California Intermediate
Tax-Free Bond (6) ....... 0.00% 0.00% 100.00% 100.00% 0.00% 0.00% 0.00% 0.00% 0.00%
National Intermediate
Tax-Free Bond (4) ....... 0.47% 0.00% 99.53% 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% 1.60% 96.61% 0.00%
Wisconsin Tax-Exempt (4) ... 3.27% 0.15% 96.58% 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 2011, THE GENEVA MID CAP GROWTH FUND, THE GENEVA
SMALL CAP GROWTH FUND, THE VALUE MOMENTUM FUND, THE DIVERSIFIED EQUITY
ALLOCATION FUND, THE INCOME PLUS ALLOCATION FUND, THE BOND FUND, THE
NATIONAL INTERMEDIATE TAX-FREE BOND FUND AND THE WISCONSIN TAX-EXEMPT FUND
HAD LONG-TERM CAPITAL GAIN DISTRIBUTION DESIG-NATIONS OF $10,658,450,
$936,029, $9,639,389, $54,344, $601,207, $6,503,563, $14,144 AND $181,311,
RESPECTIVELY.
(5) THE FUND INTENDS TO PASS THROUGH A FOREIGN TAX CREDIT TO THE SHAREHOLDERS.
FOR THE FISCAL YEAR ENDED 2011, THE TOTAL AMOUNT OF FOREIGN SOURCE INCOME
IS $8,116,497. THE TOTAL AMOUNT OF FOREIGN TAX TO BE PAID IS $910,971.
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, 2011.
HIGHMARK(R) FUNDS 191
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 20 , 2011.
------------------------------------------------------------------------------------------------------------------------------------
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 Trustee, Since 3/04 From April 1, 1992 to present, 29 None
David E. Benkert Chairman Director, Navigant Consulting, Inc.
54 (financial consulting).
Thomas L. Braje Trustee Since 6/87 Prior to retirement in October 1996, 29 None
68 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 Aeropostale,
56 Committee Directors of Tempur-Pedic Inc. (ARO);
Chairman International Inc. (mattress Longs Drug
manufacturer). Since November 2009, Corporation
Member, Board of Directors of Blue (LDG)(5);
Shield of California (health Russell
insurance). Formerly Executive Vice Exchange
President for The Charles Schwab Traded Funds
Corporation, and President and Chief Trust;
Executive Officer of Charles Schwab Tamalpais
Investment Management, Inc. Prior to Bancorp
July 2004, Senior Vice President, (TAMB);
Asset Management Products and Tempur-Pedic
Services, Charles Schwab Investment International
Management, Inc. Prior to July 2003, Inc. (TPX)
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
69 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.
70 Vice Chairman, since 1998. Member, Saber Partners (AVA)
Governance (financial advisory firm) since 2002.
Committee Member, Board of Directors, Avista
Chairman Corp. (utility company), since
January 2004. Member, Board of
Directors, SCAN Health Plan, since
1997.
Mindy M. Posoff Trustee Since 10/10 Managing Director, Traversent Capital 29 None
55 Partners (financial consulting) since
January 2010. From January 2003 to
December 2009, Managing Director,
NewMarket Capital Partners, LLC
(asset management).
192 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)
------------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE AND OFFICERS
-------------------------------
Earl A. Malm II(6) Trustee, Since 12/05 President, Chief Executive Officer 29 None
350 California Street President (President) and Director of the Adviser since
San Francisco, CA 94104 Since 1/08 October 2002. Chairman of the Board
62 (Trustee) of the Adviser since February 2005.
Colleen Cummings Assistant Since 6/10 Vice President and Senior Director, N/A N/A
4400 Computer Drive Treasurer Client Services Administration, BNY
Westborough, MA 01581 Mellon Investment Servicing (US) Inc.
40
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.
47 Officer (Vice
President)
Since 6/10
(Chief
Financial
Officer)
Kevin Rowell Vice President, Since 9/10 Senior Vice President and Managing N/A N/A
350 California Street and Assistant Director of the Adviser since June
San Francisco, CA 94104 Secretary 2010. From 2008 to 2010, President,
Age: 51 Hennessy Funds. From 2006 to 2007,
Executive Vice President, head of
U.S. Distribution, Pioneer
Investments.
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.
54
Helen Robichaud Secretary Since 3/10 Managing Director and Senior Counsel, N/A N/A
201 Washington Street, BNY Mellon Investment Servicing (US)
34th Floor Inc. since January 2010. Director of
Boston, MA 02108 Fund Regulatory Services of J.P.
Age: 59 Morgan from June 2008 to December
2009. Associate General Counsel of
J.P. Morgan from August 1995 to June
2008.
Julie M. Powers Assistant Since 12/10 Vice President and Senior Manager of N/A N/A
201 Washington Street, Secretary BNY Mellon Investment Servicing (US)
34th Floor Inc. since August 2005.
Boston, MA 02108
Age: 42
--------------------
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 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.
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 Earle Malm is an Interested Trustee by virtue of his position with the
Adviser.
HIGHMARK(R) FUNDS 193
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 Cognitive Value Fund, HighMark Enhanced Growth Fund and HighMark
International Opportunities Fund (the Investment Advisory Agreement,
collectively with the sub-advisory agreements relating to each of the Funds
other than HighMark Cognitive Value Fund, HighMark Enhanced Growth Fund and
HighMark International Opportunities Fund, the "Agreements") at meetings held on
June 29-30, 2011.
In considering whether to approve the continuation of the Agreements with
respect to the Funds at the meetings held on June 29-30, 2011, the Board of
Trustees did not identify any single factor as determinative. Matters considered
by the Trustees in connec- tion 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, Geneva Capital Management, Ltd., LSV Asset
Management and Ziegler Lotsoff Capital Management, LLC (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
194 HIGHMARK(R) FUNDS
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
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 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 are 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 which any economies of scale are
shared with the Funds supported the renewal of the Agreements with respect to
the Funds.
HIGHMARK(R) FUNDS 195
BOARD APPROVAL OF THE EXISTING ADVISORY AND SUB-ADVISORY AGREEMENTS (UNAUDITED)
(CONTINUED)
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, 2012.
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 of Trustees held on March 16-17,
2011, three new sub-advisory agreements between the Adviser and Bailard, Inc.
("Bailard") relating to HighMark Cognitive Value Fund, HighMark Enhanced Growth
Fund and HighMark International Opportunities Fund (the "Bailard Sub-Advised
Funds"), (each a "New Sub-Advisory Agreement," and collectively, the "New
Sub-Advisory Agreements").
Prior to June 1, 2011, Thomas Bailard, together with his affiliates, owned
approximately 41% of the outstanding voting securities of Bailard's parent
company. As part of a recapitalization of the parent company of Bailard, Mr.
Bailard, together with his affiliates and one other founder, sold a portion of
their shares in the parent company to the parent company on or about June 1,
2011 (the "Transaction"), which resulted in Mr. Bailard, together with his
affiliates, reducing their collective ownership of Bailard's parent company to
approximately 10% of such company's outstanding voting securities. The
Transaction is the type of event considered to be a "change of control" of
Bailard 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 June 1, 2011, the then existing
sub-advisory agreements between the Adviser and Bailard relating to the Bailard
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 of Trustees held on March 16-17, 2011, as mentioned above, the Board of
Trustees, including the Independent Trustees, approved the New Sub-Advisory
Agreements (the New Sub-Advisory Agreements were approved by shareholders of the
Bailard Sub-Advised Funds on May 31, 2011).
At the meeting of the Board of Trustees held on March 16-17, 2011, the Trustees
conferred with representatives of Bailard and the Adviser to consider the
Transaction and its effect on the Bailard Sub-Advised Funds. Independent legal
counsel assisted the Board of Trustees, and provided advice on, among other
things, the Board of Trustees' fiduciary obligations in considering the proposed
New Sub-Advisory Agreements.
In evaluating the proposed New Sub-Advisory Agreements, the Board of Trustees
reviewed materials furnished by the Adviser and Bailard. Representatives of
Bailard were present at the meeting and described in detail the Transaction and
its effect on Bailard's provision of sub-advisory services to the Bailard
Sub-Advised Funds. After considering the information presented to it at the
meeting, the Board of Trustees, 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 of Trustees 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:
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 Bailard on January 12, 2006, and the initial
shareholder of the Bailard Sub-Advised Funds approved the Prior Sub-Advisory
Agreements on March 20, 2006. 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
have different effective dates.
196 HIGHMARK(R) FUNDS
THE IMPACT OF THE TRANSACTION ON BAILARD'S PROVISION OF SUB-ADVISORY SERVICES TO
THE BAILARD 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 proposed 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 Bailard that Bailard anticipated that there would be no changes in
the personnel who provide the portfolio management services to the Bailard
Sub-Advised Funds. The Trustees reviewed information regarding the Transaction
and information regarding Bailard, including financial statements of Bailard pre
and post Transaction and Bailard's business plan. The Trustees noted that, in
connection with the Transaction, Mr. Bailard intended to retire from Bailard,
including from his roles as Executive Chairman of Bailard and as a director of
Bailard's parent company, and that Mr. Bailard agreed to provide consulting
services to Bailard's parent company for a period of three years following his
retirement. Bailard informed the Board of Trustees that Bailard does not expect
any other changes to Bailard's management structure in connection with the
proposed Transaction. The Trustees further noted that Bailard agreed to bear
substantially all expenses incurred by the Bailard Sub-Advised Funds in
connection with the proposed Transaction.
THE NATURE, EXTENT AND QUALITY OF THE SERVICES TO BE PROVIDED TO THE BAILARD
SUB-ADVISED FUNDS UNDER THE NEW SUB-ADVISORY AGREEMENTS. The Trustees considered
the nature, extent and quality of the services provided by Bailard to the
Bailard Sub-Advised Funds and the resources dedicated to the Bailard Sub-Advised
Funds by Bailard. 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 Bailard supported approval of the New
Sub-Advisory Agreements.
INVESTMENT PERFORMANCE OF THE BAILARD SUB-ADVISED FUNDS AND BAILARD. The
Trustees received and considered information about the performance of the
Bailard Sub-Advised Funds relative to their peers over various time periods. The
Trustees also considered Bailard'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 Bailard in managing the Bailard
Sub-Advised Funds when compared to products with similar investment objectives
and strategies as the Bailard 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 BAILARD
FROM ITS RELATIONSHIP WITH THE BAILARD SUB-ADVISED FUNDS. The Trustees
considered and had discussions with Fund management regarding the fees charged
by Bailard relating to its services to the Bailard Sub-Advised Funds. The
Trustees observed that the fee rates under the New Sub-Advisory Agreements are
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 Bailard Sub-Advised Funds' sub-advisory fees, the Trustees
also took into account the demands of Bailard's approach to the investment
management of the Bailard Sub-Advised Funds. The Trustees also considered any
other compensation received by Bailard from the Bailard Sub-Advised Funds, any
other series of HighMark or the Adviser. The Trustees also reviewed information
relating to the profitability of Bailard's relationship with the Bailard
Sub-Advised Funds. Bailard informed the Trustees that no Bailard affiliate would
receive compensation from the Bailard Sub-Advised Funds. 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 Bailard relating
to its services provided to the Bailard Sub-Advised Funds are fair and
reasonable, and that the costs of these services generally and the related
profitability of Bailard in respect of its relationship with the Bailard
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 Bailard and whether those economies of scale are
shared with the Bailard Sub-Advised Funds. The Trustees noted that all of the
share classes of the Bailard Sub-Advised Funds benefit from expense caps and
that Bailard had implemented breakpoints in its fee schedules. In considering
these issues, the Trustees also took note of the profitability to Bailard of its
relationship with the Bailard 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 Bailard Sub-Advised Funds supported the approval of the New
Sub-Advisory Agreements with respect to the Bailard Sub-Advised Funds.
HIGHMARK(R) FUNDS 197
BOARD APPROVAL OF THE EXISTING ADVISORY AND SUB-ADVISORY AGREEMENTS (UNAUDITED)
(CONCLUDED)
The Trustees also considered other factors, which included but were not limited
to the following:
o the compliance programs of Bailard;
o so-called "fallout benefits" to Bailard such as the benefits of
investment research provided to Bailard by reason of brokerage
commissions ("soft dollar" benefits) generated by the Bailard
Sub-Advised Funds' securities transactions.
Based on their evaluation of all factors that they deemed to be material and
assisted by the advice of independent counsel, the Trustees, including the
Independent Trustees, unanimously approved the New Sub-Advisory Agreements.
198 HIGHMARK(R) FUNDS
FUND INFORMATION (UNAUDITED)
JULY 31, 2011
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 SEC 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
CALIFORNIA 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
HIGHMARK(R) FUNDS 199
FUND INFORMATION (UNAUDITED) (CONTINUED)
JULY 31, 2011
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
200 HIGHMARK(R) FUNDS
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
CALIFORNIA 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
HIGHMARK(R) FUNDS 201
FUND INFORMATION (UNAUDITED) (CONCLUDED)
JULY 31, 2011
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
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
155 North Wacker Drive, Suite 4600
Chicago, IL 60606
Geneva Mid Cap Growth Fund and
Geneva Small Cap Growth Fund:
Geneva Capital Management Ltd.
100 East Wisconsin Avenue, Suite 2550
Milwaukee, WI 53202
Equity Income Fund,
NYSE Arca Tech 100 Index Fund
and Wisconsin Tax-Exempt Fund:
Ziegler Lotsoff 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
Earle A. Malm, II
Michael L. Noel
Mindy M. Posoff
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
HMKAR0040200
84806-B (07/11)
--------------------------------------------------------------------------------
JULY 31, 2011
--------------------------------------------------------------------------------
HIGHMARK
The smarter approach to investing.
MONEY MARKET
ANNUAL
--------------------------------------------------------
report
[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 70.7%
SPECIAL TAX 12.8
GENERAL OBLIGATIONS 7.5
TAX EXEMPT COMMERCIAL PAPER 3.9
CERTIFICATES OF PARTICIPATION 3.3
TAX AND REVENUE ANTICIPATION NOTES 1.8
CALIFORNIA TAX-FREE MONEY MARKET FUND* (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2011, HighMark California Tax-Free Money
Market Fund (the "Fund") produced a seven-day effective yield of 0.01%
(Fiduciary Shares)**. Using a combined federal and California state income tax
rate of 34.90%, the seven-day effective yield is equivalent to a 0.02% taxable
yield.
FACTORS AFFECTING PERFORMANCE
During the Fund's reporting period, the Federal Reserve maintained historically
low short-term interest rates of between 0% and 0.25% as a way to foster the
economic recovery. Modest increases in household and business spending were
constrained by high unemployment, low income growth and tight credit. Municipal
note yields decreased from 0.54% to 0.30%, reflecting the demand for the new
issuance of annual cash flow notes from municipal issuers.
As of July 31, 2011, California's long-term ratings from the three major rating
agencies were A1/A-/A-. The state's budget deficit was $15.4 billion. The state
budget was passed prior to its June 30, 2011 deadline and included more
mandatory spending cuts to social and education programs if revenues were less
than projected.
The Fund maintained a shorter weighted average maturity than its peer group, and
utilized variable rate notes to provide a higher level of liquidity. The Fund's
weighted average maturity was 12 days.
* AN INVESTMENT IN THE HIGHMARK MONEY MARKET FUNDS IS NEITHER INSURED NOR
GUARANTEED BY THE U.S. GOVERNMENT. 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 FUND. THE QUOTED YIELDS
REPRESENT PAST PERFORMANCE, WHICH DOES NOT GUARANTEE FUTURE RESULTS.
INVESTMENT RETURN WILL FLUCTUATE. CURRENT PERFORMANCE MAY BE LOWER OR
HIGHER THAN THE YIELDS QUOTED. PERFORMANCE DATA CURRENT TO THE MOST RECENT
MONTH-END IS AVAILABLE AT HIGHMARKFUNDS.COM.
** The seven-day effective yields, which are equal to the seven-day current
yields at July 31, 2011, are as follows:
CLASS A CLASS S FIDUCIARY
SHARES SHARES SHARES
--------------------------------------------------------------------------------
California Tax-Free Money Market Fund
Subsidized+ 0.01% 0.01% 0.01%
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, 2010 and ending on November 30, 2011. 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, 2011, HighMark Diversified Money Market Fund
posted a seven-day effective yield of 0.02% (Fiduciary Shares)**, HighMark
Treasury Plus Money Market Fund posted a seven-day effective yield of 0.00%
(Fiduciary Shares)**, HighMark U.S. Government Money Market Fund posted a
seven-day effective yield of 0.00% (Fiduciary Shares)** and HighMark 100% U.S.
Treasury Money Market Fund posted a seven-day effective yield of 0.00%
(Fiduciary Shares)**. (These funds are collectively the "Funds," and each is a
"Fund.")
FACTORS AFFECTING PERFORMANCE
The low interest rate environment and quantitative easing measures undertaken by
the Federal Reserve since late 2008 have resulted in a bifurcated economic
recovery. The business and manufacturing sectors took advantage of low financing
rates and utilized cost cutting measures to generate strong earnings to repair
balance sheets, but consumer activity remained somewhat muted over the past year
as high unemployment hindered recovery in other sectors, especially housing.
Strong demand for U.S. Treasury and agency securities continued throughout the
reporting period, driven by widespread risk avoidance and lack of supply ahead
of the eventual increase in the debt ceiling late in the reporting period.
HighMark 100% U.S. Treasury Money Market Fund was negatively affected by the
unrelenting demand for short-term U.S. Treasury securities, which held market
rates at or close to zero for most of the period.
HighMark Treasury Plus Money Market Fund sought to balance lower market rates on
direct securities and the shrinking supply of U.S. Treasury securities available
as collateral. Technical distortions further impacted supply as banks withdrew
portfolio securities from the collateral market in April 2011, as they adjusted
to the implementation of the new FDIC assessment calculations.
Within prospectus limits, HighMark Treasury Plus Money Market Fund and HighMark
U.S. Government Money Market Fund continued investing in U.S. Government agency
guaranteed issues as a means of increasing returns, as well as to balance
overweight positions in overnight repurchase agreements.
Money market funds were challenged by the prevailing low rates and a general
lack of high-quality investment options. European peripheral states instability
continued to impact liquidity markets during the reporting period, as Ireland,
Spain and Portugal faced budget and sovereign debt challenges. Specific to money
market funds, concerns grew in the second half of the Funds' reporting period
over potential exposure to certain European debt issues. As HighMark Diversified
Money Market Fund reduced exposure to this area and generally shortened
maturities to provide additional liquidity, portfolio returns drifted lower.
* AN INVESTMENT IN THE HIGHMARK MONEY MARKET FUNDS IS NEITHER INSURED NOR
GUARANTEED BY THE U.S. GOVERNMENT. 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 QUOTED YIELDS REPRESENT PAST PERFORMANCE, WHICH DOES NOT GUARANTEE
FUTURE RESULTS. INVESTMENT RETURN WILL FLUCTUATE. CURRENT PERFORMANCE MAY
BE LOWER OR HIGHER THAN THE YIELDS QUOTED. PERFORMANCE DATA CURRENT TO THE
MOST RECENT MONTH-END IS AVAILABLE AT HIGHMARKFUNDS.COM.
** The seven-day effective yields, which are equal to the seven-day current
yields at July 31, 2011, are as follows:
CLASS A CLASS B CLASS C CLASS S FIDUCIARY
SHARES SHARES SHARES SHARES SHARES
------------------------------------------------------------------------------------------
Diversified Money Market Fund
Subsidized+ 0.02% n/a n/a 0.02% 0.02%
Non-Subsidized -0.63% n/a n/a -0.68% -0.38%
Treasury Plus Money Market Fund
Subsidized+ 0.00% n/a n/a 0.00% 0.00%
Non-Subsidized -0.99% n/a n/a 0.00% -0.74%
U.S. Government Money Market Fund
Subsidized+ 0.00% 0.00% 0.00% 0.00% 0.00%
Non-Subsidized -0.91% -1.41% -1.16% -0.96% -0.66%
100% U.S. Treasury Money Market Fund
Subsidized+ 0.00% n/a n/a 0.00% 0.00%
Non-Subsidized -0.97% n/a n/a -1.02% -0.72%
+ 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, 2010 and ending on November 30, 2011. 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 52.6%
CERTIFICATES OF DEPOSIT 26.3
CORPORATE OBLIGATIONS 11.0
REPURCHASE AGREEMENT 8.0
FOREIGN BANK NOTE 1.9
VARIABLE RATE DEMAND NOTES 0.2
TREASURY PLUS MONEY
MARKET FUND
% OF
SECTOR PORTFOLIO
REPURCHASE AGREEMENTS 40.0%
U.S. TREASURY BILL 45.9
U.S. GOVERNMENT GUARANTEED OBLIGATIONS 11.5
U.S. GOVERNMENT AGENCY OBLIGATION 2.6
U.S. GOVERNMENT MONEY
MARKET FUND
% OF
SECTOR PORTFOLIO
REPURCHASE AGREEMENTS 48.5%
U.S. GOVERNMENT AGENCY OBLIGATIONS 18.4
U.S. TREASURY BILL 14.9
VARIABLE RATE DEMAND NOTES 11.5
U.S. GOVERNMENT GUARANTEED OBLIGATIONS 6.7
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 ("SEC") 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
2/01/11 7/31/11 RATIOS PERIOD*
CALIFORNIA TAX-FREE MONEY MARKET FUND
--------------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .................... $1,000.00 $1,000.10 0.45% $ 2.23
Class A Shares ...................... 1,000.00 1,000.10 0.46% 2.28
Class S Shares ...................... 1,000.00 1,000.10 0.46% 2.28
HYPOTHETICAL 5% RETURN
Fiduciary Shares .................... $1,000.00 $1,022.56 0.45% $ 2.26
Class A Shares ...................... 1,000.00 1,022.51 0.46% 2.31
Class S Shares ...................... 1,000.00 1,022.51 0.46% 2.31
--------------------------------------------------------------------------------------
DIVERSIFIED MONEY MARKET FUND
--------------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .................... $1,000.00 $1,000.20 0.43% $ 2.13
Class A Shares ...................... 1,000.00 1,000.20 0.43% 2.13
Class S Shares ...................... 1,000.00 1,000.20 0.43% 2.13
HYPOTHETICAL 5% RETURN
Fiduciary Shares .................... $1,000.00 $1,022.66 0.43% $ 2.16
Class A Shares ...................... 1,000.00 1,022.66 0.43% 2.16
Class S Shares ...................... 1,000.00 1,022.66 0.43% 2.16
BEGINNING ENDING NET EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE AT VALUE AT EXPENSE DURING
2/01/11 7/31/11 RATIOS PERIOD*
TREASURY PLUS MONEY MARKET FUND
--------------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .................... $1,000.00 $1,000.00 0.07% $ 0.35
Class A Shares ...................... 1,000.00 1,000.00 0.07% 0.35
Class S Shares ...................... 1,000.00 1,000.00 0.07% 0.35
HYPOTHETICAL 5% RETURN
Fiduciary Shares .................... $1,000.00 $1,024.45 0.07% $ 0.35
Class A Shares ...................... 1,000.00 1,024.45 0.07% 0.35
Class S Shares ...................... 1,000.00 1,024.45 0.07% 0.35
--------------------------------------------------------------------------------------
U.S. GOVERNMENT MONEY MARKET FUND
--------------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .................... $1,000.00 $1,000.10 0.13% $ 0.64
Class A Shares ...................... 1,000.00 1,000.10 0.13% 0.64
Class B Shares ...................... 1,000.00 1,000.10 0.13% 0.64
Class C 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 B Shares ...................... 1,000.00 1,024.15 0.13% 0.65
Class C Shares ...................... 1,000.00 1,024.15 0.13% 0.65
Class S Shares ...................... 1,000.00 1,024.15 0.13% 0.65
4 HIGHMARK(R) FUNDS
BEGINNING ENDING NET EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE AT VALUE AT EXPENSE DURING
2/01/11 7/31/11 RATIOS PERIOD*
--------------------------------------------------------------------------------------
100% U.S. TREASURY MONEY MARKET FUND
--------------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .................... $1,000.00 $1,000.00 0.07% $ 0.35
Class A Shares ...................... 1,000.00 1,000.10 0.07% 0.35
Class S Shares ...................... 1,000.00 1,000.10 0.07% 0.35
HYPOTHETICAL 5% RETURN
Fiduciary Shares .................... $1,000.00 $1,024.45 0.07% $ 0.35
Class A Shares ...................... 1,000.00 1,024.45 0.07% 0.35
Class S Shares ...................... 1,000.00 1,024.45 0.07% 0.35
--------------------
* Expenses are equal to the fund's annualized expense ratio multiplied by
the average account value over the period, multiplied by 181/365 (to
reflect the one half year period).
HIGHMARK(R) FUNDS 5
SCHEDULE OF INVESTMENTS
JULY 31, 2011
CALIFORNIA TAX-FREE MONEY MARKET FUND
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - 100.0%
--------------------------------------------------------------------------------
CALIFORNIA - 89.3%
ABAG, Multi-Family Housing
Finance Authority,
Non-Profit,(A) (B) (C)
Colma Bart Apartments, RB, Ser A,
AMT, LOC Bank of America N.A.
0.130%, 11/15/35 $ 10,830,000 $ 10,830,000
Episcopal Homes Foundation, COP,
LOC Wells Fargo Bank N.A.
0.040%, 02/01/25 4,740,000 4,740,000
Oshman Family Jewish Community,
RB, LOC LaSalle Bank N.A
0.230%, 06/01/37 9,700,000 9,700,000
Alameda County, Industrial
Development Authority Revenue,
Ettore Products Company Project,
Ser A, RB, AMT,
LOC Comerica Bank (A) (B) (C)
0.150%, 12/01/30 4,000,000 4,000,000
Bay Area Toll Authority,(A) (B) (C)
San Francisco Bay Area,
Ser A-1, RB, LOC JPMorgan Chase Bank
0.050%, 04/01/45 4,800,000 4,800,000
Ser B-1, RB, LOC Bank of America N.A.
0.090%, 04/01/45 3,300,000 3,300,000
Ser B-2, RB, LOC JPMorgan Chase Bank
0.090%, 04/01/47 5,070,000 5,070,000
California Infrastructure & Economic
Development Bank,(A) (B) (C)
California Academy, Ser E, RB,
LOC Northern Trust Co.
0.180%, 09/01/38 5,600,000 5,600,000
Los Angeles Museum, Ser A, RB,
LOC JPMorgan Chase
0.180%, 09/01/37 4,300,000 4,300,000
California Pollution Control Financing
Authority,(A) (B) (C)
Pacific Gas & Electric,
Ser B, RB, AMT, LOC JPMorgan
Chase Bank
0.310%, 11/01/26 400,000 400,000
Ser C, RB, LOC JPMorgan Chase Bank
0.300%, 11/01/26 1,800,000 1,800,000
California Pollution Control, TECP,
BP PLC Insured
0.070%, 08/04/11 15,000,000 15,000,000
California State Economic Recovery,
Ser C-11, GO, LOC BNP Paribas
(A) (B) (C)
0.080%, 07/01/23 10,000,000 10,000,000
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
California State,(A) (B) (C)
Kindergarten,
Ser B-1, GO, LOC FNMA
0.270%, 05/01/34 $ 1,150,000 $ 1,150,000
Ser B-2, GO, LOC Citibank N.A.
0.180%, 05/01/34 2,400,000 2,400,000
Ser B-5, GO, LOC Citibank N.A.
0.160%, 05/01/34 8,600,000 8,600,000
Ser B, Sub-Ser B-6, GO,
LOC BNP Paribas
Bank NV
0.280%, 05/01/40 200,000 200,000
California State, Department of Water
Resources, Power Supply Revenue,
Ser C-7, RB, AGM Insured SPA-Dexia
Credit Local (A) (B) (C)
2.000%, 05/01/22 35,525,000 35,525,000
California State, Educational Facilities
Authority,(A) (B) (C)
California Institute of Technology, RB,
Institute Guaranteed
0.050%, 01/01/24 19,000,000 19,000,000
Chapman University,
Ser A, RB, LOC Bank of America N.A.
0.230%, 10/01/36 11,700,000 11,700,000
Ser C, RB, LOC Northern Trust
0.230%, 10/01/26 3,300,000 3,300,000
Chapman University, RB,
LOC Wells Fargo Bank N.A.
0.060%, 12/01/30 7,750,000 7,750,000
Charles R Drew University, RB, LOC
Sovereign Bank FSB
0.200%, 11/01/42 8,500,000 8,500,000
Life Chiropractic College, RB, LOC
Bank of the West
0.060%, 01/01/25 4,535,000 4,535,000
California State, Health Facilities
Financing Authority, Catholic
Healthcare, Ser H, RB, LOC Citibank
N.A. (A) (B) (C)
0.060%, 07/01/33 2,000,000 2,000,000
California State, Housing Finance
Agency, Multi-Family Housing,
Ser B, RB, FNMA Insured (A) (B) (C)
0.040%, 02/01/35 13,300,000 13,300,000
California Statewide, Communities
Development Authority, Redlands
Community Hospital,
Ser B, RB, LOC KBC Bank
Bank (A) (B) (C)
0.050%, 04/01/29 400,000 400,000
The accompanying notes are an integral part of the financial statements.
6 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2011
CALIFORNIA TAX-FREE MONEY MARKET FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
Chino Basin Regional Financing
Authority, Inland Empire Utilities, Ser B
LOC Lloyds TSB Bank (A) (B) (C)
0.050%, 06/01/32 $ 10,100,000 $ 10,100,000
Contra Costa County, Multi-Family
Mortgage Revenue, RB, FNMA
Insured (A) (B) (C)
0.060%, 11/15/22 6,600,000 6,600,000
Hemet Unified School District, COP,
School Facilities Project, LOC State
Street Bank & Trust Co. (A) (B) (C)
0.050%, 10/01/36 6,000,000 6,000,000
Irvine, Improvement Bond Act 1915,
Special Assessment,(A) (B) (C)
Assessment District 94-13,
LOC State Street Bank & Trust Co.
0.220%, 09/02/22 500,000 500,000
District 04-20, Ser A,
LOC KBC Bank NV
0.290%, 09/02/30 17,700,000 17,700,000
District 87-8
LOC KBC Bank NV
0.290%, 09/02/24 8,400,000 8,400,000
Limited Obligation Assessment,
Ser 07-22-A, RB,
LOC KBC Bank NV
0.290%, 09/02/32 11,200,000 11,200,000
Limited Obligation Reassessment,
Ser 85-7-A,
AGM Insured, SPA Dexia Credit
1.500%, 09/02/32 42,319,000 42,319,000
Irvine, Ranch Water District,
Consolidated Improvement District,
GO, Ser A
LOC U.S. Bank N.A. (A) (B) (C)
0.030%, 10/01/41 4,000,000 4,000,000
Livermore, COP, Capital Projects,
LOC U.S. Bank N.A. (A) (B) (C)
0.050%, 10/01/30 4,900,000 4,900,000
Livermore, Multi-Family Housing
Authority, Mortgage Portola, RB, AMT,
FHLMC Insured (A) (B) (C)
0.120%, 05/01/19 375,000 375,000
Los Angeles County Housing Authority,
Multi-Family Housing Authority, Malibu
Meadows II, Ser C, RB, FNMA Insured
(A) (B) (C)
0.150%, 04/15/28 7,000,000 7,000,000
Los Angeles County, TRAN, GO
2.500%, 04/30/12
LOC State Street Bank 5,000,000 5,080,642
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
Los Angeles County, TRAN, GO, Ser C
FNMA Insured
2.500%, 06/29/12 $ 5,000,000 $ 5,095,143
Los Angeles, Department of Water &
Power, Waterworks Revenue,
Sub-Ser B-4, RB, SPA Wells Fargo
Bank N.A. (A) (B) (C)
0.030%, 07/01/35 26,075,000 26,075,000
Los Angeles, Multi-Family Housing
Authority, Fountain Park Phase II,
Ser B, RB, Citibank N.A. (A) (B) (C)
0.150%, 03/15/34 1,000,000 1,000,000
Los Angeles, TECP,
0.120%, 10/07/11, LOC Barclays Bank 6,450,000 6,450,000
Manhattan Beach, COP,
LOC JPMorgan Chase (A) (B) (C)
0.110%, 08/01/32 700,000 700,000
Metropolitan, Water District of Southern
California,(A) (B) (C)
Waterworks Revenue, Ser A-2, RB
SPA JP Morgan Chase Bank
0.050%, 07/01/23 6,850,000 6,850,000
Waterworks Revenue, Ser B, RB, SPA
Landesbank Hessen
0.080%, 07/01/28 16,000,000 15,999,459
Waterworks Revenue, Ser B-3, RB
SPA BNP Paribas
0.240%, 07/01/35 1,000,000 1,000,000
Waterworks Revenue, Ser C, RB, SPA
Landesbank Hessen
0.100%, 07/01/28 9,900,000 9,900,000
Northern California Transmission Agency
Revenue, California-Oregon
Transmission Project,
Ser A, RB, AGM Insured, SPA Dexia
Credit (A) (B) (C)
2.100%, 05/01/24 20,555,000 20,555,000
Orange County, Apartment
Development Revenue, Harbor Pointe,
Ser D, RB, FHLMC Insured (A) (B) (C)
0.160%, 12/01/22 3,000,000 3,000,000
Pittsburgh, Public Financing Authority,
RB, LOC Bank of the West (A) (B) (C)
0.060%, 06/01/35 5,900,000 5,900,000
Pleasanton, Multi-Family Housing
Authority, Busch Senior Housing, Ser A,
RB, AMT, LOC Barclays Bank (A) (B) (C)
0.180%, 06/15/37 2,000,000 2,000,000
Riverside County, Public Facilities,
Ser B, COP, LOC State Street Bank &
Trust Co. (A) (B) (C)
0.040%, 12/01/15 2,250,000 2,250,000
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 7
SCHEDULE OF INVESTMENTS
JULY 31, 2011
CALIFORNIA TAX-FREE MONEY MARKET FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
Sacramento County, Sanitation District,
Financing Authority, Subordinate Lien,
Ser E, RB, LOC U.S. Bank N.A. (A) (B) (C)
0.050%, 12/01/40 $ 5,200,000 $ 5,200,000
San Diego County, Regional Transportation
Commission, Sales Tax Revenue, Ser D,
RB, SPA Dexia Credit Local (A) (B) (C)
2.000%, 04/01/38 600,000 600,000
San Francisco City & County, (A) (B) (C)
Airport Commission,
International Airport, Second Series,
Issue 32F, Ser D, RB, Citibank N.A.
1.950%, 05/01/26 4,945,000 4,945,000
Airport Commission, International
Airport, Ser 37D, RB, AGM Insured,
SPA Dexia Credit
2.000%, 05/01/30 19,090,000 19,090,000
Community Facilities District No. 4,
LOC Citibank N.A.
0.070%, 08/01/32 1,640,000 1,640,000
Finance Corporation Lease, Revenue,
Moscone Center,
Ser 2008-2, RB, LOC State Street Bank
& Trust Co.
0.070%, 04/01/30 5,430,000 5,430,000
Folsom-Dore Apartment Project, RB,
LOC State Street Bank
0.070%, 12/01/34 3,700,000 3,700,000
San Rafael Redevelopment Agency,
Fairfax Standard Apartments, Ser A, RB,
LOC KBC Bank (A) (B) (C)
0.100%, 09/01/31 500,000 500,000
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)
0.050%, 08/01/15 450,000 450,000
Torrance, Torrance Memorial Medical
Center, Ser B, RB, LOC Citibank N.A.
(A) (B) (C)
0.060%, 09/01/45 2,000,000 2,000,000
Vallejo, Multi-Family Housing Authority,
RB, FNMA Insured (A) (B) (C)
0.100%, 05/15/22 4,000,000 4,000,000
Vallejo, Water Revenue, Ser A, RB, LOC
JPMorgan Chase Bank (A) (B) (C)
0.100%, 06/01/31 14,700,000 14,700,000
--------------------------------------------------------------------------------
Description Par/Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
Whittier, Healthcare Facilities, Presbyterian
Intercommunity, Ser B, RB, LOC U.S.
Bank N.A. (A) (B) (C)
0.040%, 06/01/36 $ 2,800,000 $ 2,800,000
------------
493,904,244
------------
ILLINOIS - 3.1%
Chicago, Ser F, GO, SPA Banco
Bilbao Vizcaya (A) (B) (C)
0.350%, 01/01/42 17,000,000 17,000,000
------------
INDIANA - 4.5%
Indiana State, Financing Authority,
Environmental Revenue,
AMT Mittal Steel USA,
RB, LOC Banco Bilbao Vizcaya
(A) (B) (C)
0.310%, 08/01/30 25,000,000 25,000,000
------------
KENTUCKY - 2.7%
Carroll County, Solid Waste Disposal
Revenue, AMT, North American
Project, RB, LOC PNC Bank N.A.
(A) (B) (C)
0.120%, 07/01/30 15,000,000 15,000,000
------------
PUERTO RICO - 0.4%
Puerto Rico Commonwealth, Public
Improvement, Series C-5-2, RB,
FHLMC Insured (A) (B) (C)
0.040%, 07/01/20 2,000,000 2,000,000
------------
TOTAL MUNICIPAL BONDS
(Cost $552,904,244) 552,904,244
------------
--------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANIES - 0.0%
--------------------------------------------------------------------------------
BlackRock Liquidity Funds,
California Money Fund 150,478 150,478
Goldman Sachs Institutional
Liquid Assets Tax-Exempt
California Portfolio 6,450 6,450
------------
TOTAL REGISTERED INVESTMENT COMPANIES
(Cost $156,928) 156,928
------------
TOTAL INVESTMENTS - 100.0%
(Cost $553,061,172) + 553,061,172
------------
OTHER ASSETS & LIABILITIES, NET - 0.0% 7,478
------------
NET ASSETS - 100.0% $553,068,650
============
The accompanying notes are an integral part of the financial statements.
8 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2011
CALIFORNIA TAX-FREE MONEY MARKET FUND (CONCLUDED)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
+ AT JULY 31, 2011, COST IS IDENTICAL FOR BOOK AND FEDERAL INCOME TAX
PURPOSES.
(A) FLOATING RATE SECURITY. RATE DISCLOSED IS AS OF JULY 31, 2011.
(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, 2011.
(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
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
A summary of the inputs used to value the Fund's net assets as of July 31, 2011
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
07/31/11 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Municipal Bonds $552,904,244 $ -- $552,904,244 $ --
Registered Investment Companies 156,928 156,928 -- --
------------ ------------ ------------ ------------
Total: $553,061,172 $ 156,928 $552,904,244 $ --
============ ============ ============ ============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 9
SCHEDULE OF INVESTMENTS
JULY 31, 2011
DIVERSIFIED MONEY MARKET FUND
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMERCIAL PAPER - DISCOUNTED* - 54.1%
--------------------------------------------------------------------------------
ASSET-BACKED SECURITIES - AUTOMOBILE - 4.9% (A)
Silver Tower U.S. Funding
0.380%, 08/01/11 $ 29,000,000 $ 29,000,000
0.500%, 08/25/11 20,000,000 19,993,333
0.884%, 09/08/11 75,000,000 74,930,333
---------------
TOTAL ASSET-BACKED SECURITIES - AUTOMOBILE
(Cost $123,923,666) 123,923,666
---------------
ASSET-BACKED SECURITIES - CREDIT CARD - 4.7% (A)
White Point Funding Inc.
0.400%, 08/19/11 40,000,000 39,993,000
0.320%, 08/29/11 50,000,000 49,987,555
0.471%, 10/05/11 30,000,000 29,974,542
---------------
TOTAL ASSET-BACKED SECURITIES - CREDIT CARD
(Cost $119,955,097) 119,955,097
---------------
ASSET-BACKED SECURITIES - DIVERSIFIED FINANCIAL ASSETS - 9.3% (A)
Rhein-Main Securitisation Ltd.
0.420%, 08/15/11 21,050,000 21,046,562
0.370%, 08/26/11 45,000,000 44,988,437
0.450%, 09/20/11 50,000,000 49,968,750
Rheingold Securitisation
0.390%, 08/05/11 120,000,000 119,994,878
---------------
TOTAL ASSET-BACKED SECURITIES -
DIVERSIFIED FINANCIAL ASSETS
(Cost $235,998,627) 235,998,627
---------------
ASSET-BACKED SECURITIES - GOVERNMENT - 1.7% (A)
Royal Park Investment Funding
Corp./Guarantee-Kingdom of Belgium
0.350%, 08/04/11 45,000,000 44,998,688
---------------
TOTAL ASSET-BACKED SECURITIES - GOVERNMENT
(Cost $44,998,688) 44,998,688
---------------
ASSET-BACKED SECURITIES - TRADE RECEIVABLES - 23.1% (A)
Arabella Finance LLC
0.300%, 08/01/11 111,550,000 111,550,000
Atlantic Asset Securitisation Corp.
0.220%, 08/02/11 16,000,000 15,999,902
0.220%, 08/05/11 100,000,000 99,997,556
Autobahn Funding Co. LLC
0.300%, 08/01/11 120,000,000 120,000,000
Romulus Funding Corp.
0.370%, 08/01/11 120,000,000 120,000,000
Sydney Capital Corp.
0.350%, 09/12/11 120,850,000 120,800,653
---------------
TOTAL ASSET-BACKED SECURITIES -
TRADE RECEIVABLES
(Cost $588,348,111) 588,348,111
---------------
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMERCIAL PAPER - DISCOUNTED* - (CONTINUED)
--------------------------------------------------------------------------------
BANKING - 10.4%
Beethoven Funding Corp./
Commerzbank (A)
0.410%, 08/15/11 $ 30,003,000 $ 29,998,216
Louis Dreyfus Commodities/
Credit Agricole
0.260%, 08/01/11 120,000,000 120,000,000
PB Finance (Delaware) (A)
0.551%, 08/26/11 65,000,000 64,975,174
0.511%, 09/26/11 50,000,000 49,960,333
---------------
TOTAL BANKING
(Cost $264,933,723) 264,933,723
---------------
TOTAL COMMERCIAL PAPER - DISCOUNTED
(Cost $1,378,157,912) 1,378,157,912
---------------
--------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT - YANKEE - 27.1%
--------------------------------------------------------------------------------
Barclays Bank PLC NY
0.687%, 09/22/11 (B) 100,000,000 100,000,000
Canadian Imperial Bank of Commerce NY
0.005%, 08/29/12 (B) 75,000,000 74,995,890
Dexia Credit Local SA NY
0.250%, 08/04/11 120,000,000 120,000,000
Norinchukin Bank NY
0.210%, 08/08/11 120,000,000 120,000,000
Societe Generale NY
0.536%, 01/11/12 (B) 75,000,000 75,000,000
0.696%, 02/10/12 (B) 50,000,000 50,000,000
UBS AG Stamford CT
0.252%, 01/23/12 (B) 100,000,000 100,000,000
Westpac Banking Corp. NY
0.286%, 08/08/12 (B) 50,000,000 50,000,000
---------------
TOTAL CERTIFICATES OF Deposit - YANKEE
(Cost $689,995,890) 689,995,890
---------------
--------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - 11.4%
--------------------------------------------------------------------------------
AUTOMOTIVE - 1.6% (B)
Toyota Motor Credit Corp., MTN
0.310%, 01/13/12 39,000,000 39,000,000
---------------
TOTAL AUTOMOTIVE
(Cost $39,000,000) 39,000,000
---------------
BANKING - 9.8% (A) (C)
Bank of Montreal Chicago,
MTN
0.745%, 08/03/12 150,000,000 150,000,000
The accompanying notes are an integral part of the financial statements.
10 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2011
DIVERSIFIED MONEY MARKET FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - (CONTINUED)
--------------------------------------------------------------------------------
BANKING - (CONTINUED) (A) (C)
Credit Agricole London,
MTN
0.527%, 07/20/12 $100,000,000 $ 100,000,000
---------------
TOTAL BANKING
(Cost $250,000,000) 250,000,000
---------------
TOTAL CORPORATE OBLIGATIONS
(Cost $289,000,000) 289,000,000
---------------
--------------------------------------------------------------------------------
FOREIGN BANK NOTE - 2.0%
--------------------------------------------------------------------------------
BANKING - 2.0% (A) (C)
Westpac Banking Corp.
0.265%, 08/03/12 50,000,000 50,000,000
---------------
TOTAL FOREIGN BANK NOTE
(Cost $50,000,000) 50,000,000
---------------
--------------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES - 0.2%
--------------------------------------------------------------------------------
BANKING - 0.1% (D)
Washington State, Housing Finance
Commission, Multi-Family Housing,
The Lodge at Eagle Ridge, Ser B,
RB, LOC: Bank of America
0.140%, 08/01/41 3,425,000 3,425,000
---------------
TOTAL BANKING
(Cost $3,425,000) 3,425,000
---------------
U.S. GOVERNMENT - 0.1% (D) (E)
Winston Salem, NC, COP,
SPA:Branch Banking & Trust
0.210%, 11/01/12 3,000,000 3,000,000
---------------
TOTAL U.S. GOVERNMENT
(Cost $3,000,000) 3,000,000
---------------
TOTAL VARIABLE RATE DEMAND NOTES
(Cost $6,425,000) 6,425,000
---------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 8.2%
--------------------------------------------------------------------------------
Barclays Capital Inc.
0.130%, dated 07/29/11,
matures on 08/01/11,
repurchase price $30,000,325
(collateralized by a U.S. Treasury
Note, par value $30,450,700,
1.000%, 07/31/11, total market
value $30,600,053) 30,000,000 30,000,000
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - (CONTINUED)
--------------------------------------------------------------------------------
Credit Suisse Securities (USA)
0.140%, dated 07/29/11,
matures on 08/01/11,
repurchase price $18,373,103
(collateralized by a U.S. Treasury
Note, par value $17,720,000,
2.75%, 10/31/13, total market
value $18,740,415) $ 18,372,889 $ 18,372,889
Deutsche Bank Securities
0.140%, dated 07/29/11,
matures on 08/01/11,
repurchase price $160,001,867
(collateralized by a U.S. Treasury
Note, par value $161,409,900,
2.375%, 06/30/18, total market
value $163,200,033) 160,000,000 160,000,000
---------------
TOTAL REPURCHASE AGREEMENT
(Cost $208,372,889) 208,372,889
---------------
TOTAL INVESTMENTS - 103.0%
(Cost $2,621,951,691) + 2,621,951,691
---------------
OTHER ASSETS & LIABILITIES, NET - (3.0)% (76,427,856)
---------------
NET ASSETS - 100.0% $2,545,523,835
===============
--------------------------------------------------------------------------------
* RATE SHOWN REPRESENTS THE BOND EQUIVALENT YIELD TO MATURITY AT PURCHASE.
+ AT JULY 31, 2011, 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 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, 2011 WERE $1,678,157,912 AND REPRESENTED 65.9% 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, 2011. THE
DATE REPORTED IS THE FINAL MATURITY.
(C) VARIABLE RATE/EXTENDABLE SECURITY - THE RATE REFLECTED IS THE RATE IN
EFFECT ON JULY 31, 2011. 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, 2011. THE DATE REPORTED IS THE FINAL MATURITY, NOT THE DATE ON
WHICH PRINCIPAL COULD BE RECOVERED.
(E) SECURITY IS ESCROWED TO MATURITY IN U.S. TREASURIES.
COP - CERTIFICATES OF PARTICIPATION
CT - CONNECTICUT
LLC - LIMITED LIABILITY COMPANY
LOC - LETTER OF CREDIT
MTN - MEDIUM TERM NOTE
NC - NORTH CAROLINA
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, 2011
DIVERSIFIED MONEY MARKET FUND (CONCLUDED)
A summary of the inputs used to value the Fund's net assets as of July 31, 2011
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
07/31/11 PRICE INPUTS INPUTS
-------------- --------- -------------- ------------
Investments in Securities * $2,621,951,691 $ -- $2,621,951,691 $ --
============== ========= ============== ============
* 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, 2011
TREASURY PLUS MONEY MARKET FUND
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATION - 2.6%
--------------------------------------------------------------------------------
FFCB
0.187%, 11/27/12 (A) $ 5,000,000 $ 5,000,000
---------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATION
(Cost $5,000,000) 5,000,000
---------------
--------------------------------------------------------------------------------
U.S. GOVERNMENT GUARANTEED OBLIGATIONS - 11.5%
--------------------------------------------------------------------------------
American Express Bank FSB, FDIC
1.166%, 12/09/11 (A) 7,500,000 7,528,045
Citigroup, FDIC
0.986%, 12/09/11 (A) 5,000,000 5,015,207
Straight-A-Funding, Series 1, FFBLL
0.153%, 09/23/11 *(B) 10,000,000 9,997,792
---------------
TOTAL U.S. GOVERNMENT GUARANTEED OBLIGATIONS
(Cost $22,541,044) 22,541,044
---------------
--------------------------------------------------------------------------------
U.S. TREASURY BILLS* - 45.9%
--------------------------------------------------------------------------------
U.S. Treasury Bills
0.010%, 08/04/11 50,000,000 49,999,958
0.005%, 08/18/11 39,920,000 39,919,906
---------------
TOTAL U.S. TREASURY BILLS
(Cost $89,919,864) 89,919,864
---------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 40.0%
--------------------------------------------------------------------------------
Credit Suisse Securities (USA)
0.140%, dated 07/29/11,
matures on 08/01/11, repurchase
price $38,407,446 (collateralized
by a U.S. Treasury obligation,
par value $38,230,000, 1.500%,
12/31/13, total market
value 39,180,093) 38,406,998 38,406,998
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - (CONTINUED)
--------------------------------------------------------------------------------
Deutsche Bank Securities
0.140%, dated 07/29/11,
matures on 08/01/11,
repurchase price $40,000,467
(collateralized by a U.S. Treasury
obligation, par value $40,636,400,
0.075%, 06/15/14, total market
value $40,800,028) $ 40,000,000 $ 40,000,000
---------------
TOTAL REPURCHASE AGREEMENT
(Cost $78,406,998) 78,406,998
---------------
TOTAL INVESTMENTS - 100.0%
(Cost $195,867,906) + 195,867,906
---------------
OTHER ASSETS & LIABILITIES, NET - 0.0% (9,382)
---------------
NET ASSETS - 100.0% $ 195,858,524
===============
--------------------------------------------------------------------------------
* RATE SHOWN REPRESENTS THE BOND EQUIVALENT YIELD TO MATURITY AT PURCHASE.
+ AT JULY 31, 2011, 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, 2011. THE
DATE REPORTED IS THE FINAL MATURITY.
(B) 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, 2011 WAS $9,997,792 AND REPRESENTED 5.1% OF NET ASSETS.
FDIC - FEDERAL DEPOSIT INSURANCE CORPORATION
FFBLL - FEDERAL FINANCING BANK LIQUIDITY LOAN
FFCB - FEDERAL FARM CREDIT BANK
A summary of the inputs used to value the Fund's net assets as of July 31, 2011
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
07/31/11 PRICE INPUTS INPUTS
-------------- --------- -------------- ------------
Investments in Securities* $ 195,867,906 $ -- $ 195,867,906 $ --
============== ========= ============== ============
* 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, 2011
U.S. GOVERNMENT MONEY MARKET FUND
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 18.3%
--------------------------------------------------------------------------------
FFCB
0.146%, 12/20/11 (A) $ 61,000,000 $ 60,995,263
0.187%, 11/27/12 (A) 50,000,000 50,000,000
FHLB
0.091%, 08/01/11 (A) 30,000,000 30,000,000
FHLMC
0.157%, 09/26/11 (A) 25,000,000 24,998,061
0.136%, 06/03/13 (A) 50,000,000 49,962,871
FNMA
0.096%, 08/11/11 (A) 30,000,000 29,999,668
---------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $245,955,863) 245,955,863
---------------
--------------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES - 11.5%
--------------------------------------------------------------------------------
California, Milpitas Multi-Family
Housing Revenue Crossing, Ser A, RB
Guarantee: FNMA (B)
0.140%, 08/15/33 4,800,000 4,800,000
California, Sacramento County,
Multi-Family Housing Development
Authority, Deer Park Apartments,
Ser A, RB
Guarantee: FNMA (B)
0.160%, 07/15/35 1,250,000 1,250,000
California, San Francisco, City & County
Redevelopment, Ser D, RB
Guarantee: FNMA (B)
0.160%, 06/15/34 26,050,000 26,050,000
California, Simi Valley, Multi-Family
Housing Revenue, Parker Ranch, Ser A, RB
Guarantee: FNMA (B)
0.170%, 07/15/36 900,000 900,000
California, Statewide Community
Development Authority, Palms
Apartments, Ser C, RB
Guarantee: FNMA (B)
0.140%, 05/15/35 3,500,000 3,500,000
New York City Housing Development,
Multi-Family Mortgage Revenue,
Pearl Street Development, Ser B, RB
Guarantee: FNMA (B)
0.130%, 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
0.130%, 04/15/36 2,505,000 2,505,000
Nicole, Ser B, RB
Guarantee: FNMA
0.160%, 11/15/35 4,970,000 4,970,000
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES - (CONTINUED)
--------------------------------------------------------------------------------
West Street, Ser B, RB
Guarantee: FNMA
0.130%, 03/15/36 $ 7,100,000 $ 7,100,000
Westport Development, Ser B, RB
Guarantee: FNMA
0.160%, 06/15/34 6,800,000 6,800,000
New York State, Dormitory Authority
Revenue, Ser B, RB
Guarantee: FNMA (B)
0.160%, 11/15/36 18,435,000 18,435,000
New York State, Housing Finance
Agency Revenue, (B)
11th Avenue Housing, Ser B, RB
Guarantee: FNMA
0.130%, 05/15/41 5,100,000 5,100,000
38th Street, Ser B, RB
Guarantee: FNMA
0.130%, 05/15/33 10,100,000 10,100,000
Biltmore Tower Housing, Ser B, RB
Guarantee: FNMA
0.130%, 05/15/34 1,185,000 1,185,000
Chelsea Apartments, Ser B, RB
Guarantee: FNMA
0.140%, 11/15/36 400,000 400,000
North End, Ser B, RB
Guarantee: FNMA
0.130%, 11/15/36 2,500,000 2,500,000
Ser B, RB
Guarantee: FNMA
0.130%, 05/15/33 13,400,000 13,400,000
Tower 31 Housing, Ser A, RB
Guarantee: FHLMC
0.130%, 11/01/36 3,100,000 3,100,000
West 33rd Street, Ser B, RB
Guarantee: FNMA
0.160%, 11/15/36 4,900,000 4,900,000
Pennsylvania, Montgomery County,
Redevelopment Authority,
Kingswood Apartments Project,
Ser A, RB
Guarantee: FNMA (B)
0.170%, 08/15/31 6,205,000 6,205,000
Virginia, Chesapeake,
Redevelopment & Housing
Authority, Multi-Family Housing
Revenue, Alta Great Bridge,
Ser A, RB
Guarantee: FNMA (B)
0.190%, 01/15/41 1,625,000 1,625,000
The accompanying notes are an integral part of the financial statements.
14 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2011
U.S. GOVERNMENT MONEY MARKET FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES - (CONTINUED)
--------------------------------------------------------------------------------
Washington State Housing Finance
Commission, Multi-Family Housing
Revenue, (B)
Ballard Landmark, Ser B, RB
Guarantee: FNMA
0.160%, 12/15/41 $ 3,510,000 $ 3,510,000
Bridgewood Project, Ser B, RB
Guarantee: FNMA
0.160%, 09/01/34 3,205,000 3,205,000
Highland Park Apartments, Ser B, RB
Guarantee: FNMA
0.160%, 07/15/38 1,750,000 1,750,000
Pinehurst Apartments Project, Ser B, RB
Guarantee: FNMA
0.160%, 03/15/39 1,570,000 1,570,000
Ranier Court Project, Ser B, RB
Guarantee: FNMA
0.140%, 12/15/36 3,420,000 3,420,000
Rolling Hills Project, Ser B, RB
Guarantee: FNMA
0.160%, 06/15/37 2,020,000 2,020,000
---------------
TOTAL VARIABLE RATE DEMAND NOTES
(Cost $154,525,000) 154,525,000
---------------
--------------------------------------------------------------------------------
U.S. GOVERNMENT GUARANTEED OBLIGATIONS - 6.7%
--------------------------------------------------------------------------------
Citigroup, FDIC (A)
0.986%, 12/09/11 50,000,000 50,152,064
Straight-A-Funding, Series 1, FFBLL * (C)
0.153%, 09/23/11 40,135,000 40,126,137
---------------
TOTAL U.S. GOVERNMENT GUARANTEED OBLIGATIONS
(Cost $90,278,201) 90,278,201
---------------
--------------------------------------------------------------------------------
U.S. TREASURY BILL* - 14.9%
--------------------------------------------------------------------------------
U.S. Treasury Bills
0.005%, 08/04/11 200,000,000 199,999,833
---------------
TOTAL U.S. TREASURY BILL
(Cost $199,999,833) 199,999,833
---------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 48.5%
--------------------------------------------------------------------------------
Barclays Capital
0.130%, dated 07/29/11,
matures on 08/01/11,
repurchase price $100,001,083
(collateralized by a U.S. Treasury
Note, par value $97,237,900,
2.750%, 02/28/13, total market
value $102,000,026) 100,000,000 100,000,000
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - (CONTINUED)
--------------------------------------------------------------------------------
Credit Suisse Securities (USA)
0.140%, dated 07/29/11,
matures on 08/01/11,
repurchase price $90,305,475
(collateralized a U.S. Treasury
obligation, par value $84,970,000,
3.250%, 12/31/16, total market
value $92,110,974) $ 90,304,421 $ 90,304,421
Deutsche Bank Securities
0.180%, dated 07/29/11,
matures on 08/01/11,
repurchase price $65,000,975
(collateralized by various U.S.
agency obligations, ranging in
par value from $16,235,000 -
$44,358,000, 0.320% - 4.625%,
12/09/11 - 10/15/14, total market
value $66,301,300) 65,000,000 65,000,000
Goldman Sachs
0.180%, dated 07/29/11,
matures on 08/01/11,
repurchase price $330,004,950
(collateralized by various U.S.
agency obligations, ranging in
par value from $144,109,000 -
$156,637,000, 0.000% - 6.250%,
10/24/11 - 05/15/29, total market
value $336,600,860) 330,000,000 330,000,000
Merrill Lynch, Fenner Pierce & Smith
0.140%, dated 07/29/11,
matures on 08/01/11,
repurchase price $65,000,758
(collateralized by a U.S. agency
obligation, par value $66,318,000,
0.000%, 10/26/11, total market
value $66,300,094) 65,000,000 65,000,000
---------------
TOTAL REPURCHASE AGREEMENTS
(Cost $650,304,421) 650,304,421
---------------
TOTAL INVESTMENTS - 99.9%
(Cost $1,341,063,318) + 1,341,063,318
---------------
OTHER ASSETS & LIABILITIES, NET - 0.1% 790,072
---------------
NET ASSETS - 100.0% $ 1,341,853,390
===============
--------------------------------------------------------------------------------
* RATE SHOWN REPRESENTS THE BOND EQUIVALENT YIELD TO MATURITY AT PURCHASE.
+ AT JULY 31, 2011, 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, 2011. THE
DATE REPORTED IS THE FINAL MATURITY.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 15
SCHEDULE OF INVESTMENTS
JULY 31, 2011
U.S. GOVERNMENT MONEY MARKET FUND (CONCLUDED)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(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.
(C) SECURITIES SOLD WITHIN THE TERMS OF A PRIVATE PLACEMENT MEMORANDUM, EXEMPT
FROM REGISTRATION UNDER SECTION 3A-4, 4(2) OR 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 THIS SECURITY AS OF
JULY 31, 2011 WAS 40,126,137 AND REPRESENTED 3.0% OF NET ASSETS.
FDIC - FEDERAL DEPOSIT INSURANCE CORPORATION
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, 2011
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
07/31/11 PRICE INPUTS INPUTS
-------------- --------- -------------- ------------
Investments in Securities* $1,341,063,318 $ -- $1,341,063,318 $ --
============== ========= ============== ============
* 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, 2011
100% U.S. TREASURY MONEY MARKET FUND
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
U.S. TREASURY BILLS* - 100.0%
--------------------------------------------------------------------------------
U.S. Treasury Bills
0.025%, 08/04/11 $ 72,298,000 $ 72,297,852
0.024%, 08/11/11 354,248,000 354,245,673
0.007%, 08/18/11 45,137,000 45,136,855
0.056%, 08/25/11 100,000,000 99,996,333
0.010%, 09/08/11 1,905,000 1,904,980
---------------
TOTAL U.S. TREASURY BILLS
(Cost $573,581,693) 573,581,693
---------------
TOTAL INVESTMENTS - 100.0%
(Cost $573,581,693) + 573,581,693
---------------
OTHER ASSETS & LIABILITIES, NET - 0.0% 11,345
---------------
NET ASSETS - 100.0% $ 573,593,038
===============
--------------------------------------------------------------------------------
* RATE SHOWN REPRESENTS THE BOND EQUIVALENT YIELD TO MATURITY AT PURCHASE.
+ AT JULY 31, 2011, COST IS $573,583,672 FOR FEDERAL INCOME TAX PURPOSES.
A summary of the inputs used to value the Fund's net assets as of July 31, 2011
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
07/31/11 PRICE INPUTS INPUTS
-------------- --------- -------------- ------------
U.S. Treasury Bills $ 573,581,693 $ -- $ 573,581,693 $ --
============== ========= ============== ============
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, 2011
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 + ................ $ 553,061,172 $2,413,578,802 $ 117,460,908 $ 690,758,897 $ 573,581,693
Repurchase Agreements, at Value + ...... -- 208,372,889 78,406,998 650,304,421 --
Receivable for Fund Shares Sold ........ -- 1,659,334 -- 897,821 16,466
Accrued Income ......................... 289,915 262,112 9,020 62,786 --
Prepaid Expenses ....................... 18,060 77,486 11,419 56,963 43,120
Deferred Compensation .................. 40,952 179,370 15,721 87,278 39,724
Due from Adviser, net .................. -- -- 7,243 -- 24,887
-------------- -------------- -------------- -------------- --------------
TOTAL ASSETS ........................ 553,410,099 2,624,129,993 195,911,309 1,342,168,166 573,705,890
============== ============== ============== ============== ==============
LIABILITIES:
Payable for Investments Purchased ...... -- 74,995,890 -- -- --
Payable for Fund Shares Redeemed ....... -- 2,540,837 -- 104,261 --
Income Distribution Payable ............ 4,098 28,972 449 4,951 812
Due to Custodian ....................... -- -- -- -- 669
Investment Adviser Fees Payable ........ 147,888 372,502 -- 18,698 --
Administration Fees Payable ............ 72,985 319,673 3 12,305 --
Chief Compliance Officer Fees Payable .. 334 334 334 334 334
Custodian Fees Payable ................. 3,043 13,329 1,168 6,486 2,952
Audit Fees Payable ..................... 26,989 37,598 25,451 29,993 29,474
Deferred Compensation Payable .......... 40,952 179,370 15,721 87,278 39,724
Shareholder Servicing Fees Payable ..... 15,347 -- -- 4 --
Transfer Agent Fees Payable ............ 7,402 33,967 2,772 15,135 9,203
Printing Fees Payable .................. 4,666 20,943 1,879 8,769 7,537
Trustees Fees Payable .................. 3,074 15,138 1,025 6,115 5,210
Accrued Distribution Fees .............. 2,878 -- -- 2 --
Accrued Expenses and Other Payables .... 11,793 47,605 3,983 20,445 16,937
-------------- -------------- -------------- -------------- --------------
TOTAL LIABILITIES ................... 341,449 78,606,158 52,785 314,776 112,852
-------------- -------------- -------------- -------------- --------------
NET ASSETS ....................... $ 553,068,650 $2,545,523,835 $ 195,858,524 $1,341,853,390 $ 573,593,038
============== ============== ============== ============== ==============
NET ASSETS:
Paid-in Capital (unlimited authorized -
no par value) ....................... $ 553,018,157 $2,545,443,227 $ 195,858,349 $1,341,855,121 $ 573,672,050
Undistributed Net Investment Income .... 50,493 80,608 175 -- --
Accumulated Net Realized (Loss) on
Investments ......................... -- -- -- (1,731) (79,012)
-------------- -------------- -------------- -------------- --------------
NET ASSETS ....................... $ 553,068,650 $2,545,523,835 $ 195,858,524 $1,341,853,390 $ 573,593,038
============== ============== ============== ============== ==============
+ Cost of Investments and Repurchase
Agreements .......................... $ 553,061,172 $2,621,951,691 $ 195,867,906 $1,341,063,318 $ 573,581,693
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, 2011
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 ............................. $ 240,392,501 $1,984,330,191 $ 184,479,690 $1,181,823,444 $ 394,617,634
Shares of beneficial interest
outstanding ......................... 240,374,903 1,984,267,250 184,479,690 1,181,845,165 394,734,075
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE ........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============== ============== ============== ============== ==============
CLASS A SHARES:
Net Assets ............................. $ 296,034,547 $ 454,081,549 $ 11,378,833 $ 54,652,972 $ 93,086,995
Shares of beneficial interest
outstanding ......................... 296,009,252 454,067,341 11,378,833 54,654,623 93,116,276
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE ........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============== ============== ============== ============== ==============
CLASS B SHARES:
Net Assets ............................. $ N/A $ N/A $ N/A $ 147,590 $ N/A
Shares of beneficial interest
outstanding ......................... N/A N/A N/A 147,595 N/A
NET ASSET VALUE AND OFFERING 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 $ 270,415 $ N/A
Shares of beneficial interest
outstanding ......................... N/A N/A N/A 270,421 N/A
NET ASSET VALUE AND OFFERING PRICE PER
SHARE(A) ............................... $ N/A $ N/A $ N/A $ 1.00 $ N/A
============== ============== ============== ============== ==============
CLASS S SHARES:
Net Assets ............................. $ 16,641,602 $ 107,112,095 $ 1 $ 104,958,969 $ 85,888,409
Shares of beneficial interest
outstanding ......................... 16,640,082 107,108,750 1 104,962,720 85,910,709
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 have contingent deferred sales charges (See Note 3 in
the notes to financial statements).
The accompanying notes are an integral part of the financial statements.
20 HIGHMARK(R) FUNDS
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JULY 31, 2011
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 ........................... $ 2,725,642 $ 13,783,527 $ 248,216 $ 1,996,158 $ 978,763
Dividend Income ........................... 2,003 -- -- -- --
-------------- -------------- -------------- -------------- --------------
Total Investment Income ............. 2,727,645 13,783,527 248,216 1,996,158 978,763
-------------- -------------- -------------- -------------- --------------
Expenses:
Investment Adviser Fees ................ 1,576,814 7,692,197 531,430 3,154,528 2,550,813
Shareholder Servicing Fees Fiduciary
Shares .............................. 574,704 5,032,850 418,995 2,158,797 1,013,022
Shareholder Servicing Fees Class A
Shares .............................. 696,004 1,004,056 23,863 105,784 301,669
Shareholder Servicing Fees Class B
Shares .............................. -- -- -- 365 --
Administration Fees .................... 787,703 3,842,470 265,511 1,575,739 1,273,948
Custodian Fees ......................... 32,850 160,254 11,072 65,719 53,142
Trustees Fees .......................... 33,338 158,565 11,221 67,121 55,715
Chief Compliance Officer Fees .......... 6,388 6,388 6,388 6,388 6,388
Distribution Fees Class A Shares ....... 696,004 1,004,056 23,863 105,784 301,669
Distribution Fees Class B Shares ....... -- -- -- 1,093 --
Distribution Fees Class C Shares ....... -- -- -- 2,015 --
Distribution Fees Class S Shares ....... 95,270 821,169 -- 798,943 1,784,170
Registration Fees ...................... 14,587 43,720 14,771 60,835 40,352
Transfer Agent Fees .................... 46,321 196,074 17,012 87,682 72,664
Printing Fees .......................... 42,254 192,766 18,723 89,605 89,921
Audit Fees ............................. 29,539 43,384 25,677 31,560 30,709
Legal Fees ............................. 59,609 298,477 21,308 129,837 108,248
Miscellaneous Fees ..................... 47,845 133,295 30,505 85,969 53,725
-------------- -------------- -------------- -------------- --------------
Total Expenses ...................... 4,739,230 20,629,721 1,420,339 8,527,764 7,736,155
-------------- -------------- -------------- -------------- --------------
Less: Waivers and Reimbursements and
Reduction of Expenses
Investment Adviser Fee Waiver ....... (359,676) (886,489) (531,430) (3,014,215) (2,550,813)
Shareholder Servicing Fee Waiver -
Fiduciary Shares ................. (528,268) (4,675,493) (418,995) (2,158,682) (1,013,022)
Shareholder Servicing Fee Waiver -
Class A Shares ................... (636,160) (924,563) (23,863) (105,771) (301,669)
Shareholder Servicing Fee Waiver -
Class B Shares ................... -- -- -- (364) --
Distribution Fee Waiver - Class A
Shares (Note 3) .................. (591,652) (956,957) (23,863) (105,768) (301,669)
Distribution Fee Waiver - Class B
Shares (Note 3) .................. -- -- -- (1,093) --
Distribution Fee Waiver - Class C
Shares (Note 3) .................. -- -- -- (2,013) --
Distribution Fee Waiver - Class S
Shares (Note 3) .................. (85,996) (766,938) -- (798,922) (1,784,170)
Administration Fee Waiver ........... -- -- (186,565) (677,842) (777,283)
Reimbursement of Expenses by
Adviser .......................... -- -- (14,916) -- (98,808)
-------------- -------------- -------------- -------------- --------------
Total Waivers and Reimbursements .......... (2,201,752) (8,210,440) (1,199,632) (6,864,670) (6,827,434)
-------------- -------------- -------------- -------------- --------------
Total Net Expenses ........................ 2,537,478 12,419,281 220,707 1,663,094 908,721
-------------- -------------- -------------- -------------- --------------
Net Investment Income ..................... 190,167 1,364,246 27,509 333,064 70,042
-------------- -------------- -------------- -------------- --------------
Net Realized Gain on Investments .......... 564 2,097 -- 735 16,418
-------------- -------------- -------------- -------------- --------------
Increase in Net Assets Resulting from
Operations ............................. $ 190,731 $ 1,366,343 $ 27,509 $ 333,799 $ 86,460
============== ============== ============== ============== ==============
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 ENDED JULY 31, 2011
CALIFORNIA TAX-FREE
MONEY MARKET FUND
------------------------------
2011 2010
------------------------------
Investment Activities:
Net Investment Income .................................................................. $ 190,167 $ 168,878
Net Realized Gain on Investments ....................................................... 564 --
------------- -------------
Net Increase in Net Assets Resulting From Operations ...................................... 190,731 168,878
------------- -------------
Dividends and Distributions to Shareholders:
Net Investment Income:
Fiduciary Shares .................................................................... (128,868) (81,804)
Class A Shares ...................................................................... (58,278) (81,211)
Class B Shares ...................................................................... -- --
Class C Shares ...................................................................... -- --
Class S Shares ...................................................................... (3,021) (5,863)
------------- -------------
Total Dividends and Distributions ................................................ (190,167) (168,878)
------------- -------------
Net Increase (Decrease) in Net Assets From:
Share Transactions (A) .............................................................. 29,204,008 (462,603,673)
------------- -------------
Total Increase (Decrease) in Net Assets .......................................... 29,204,572 (462,603,673)
------------- -------------
Net Assets:
Beginning of Year ...................................................................... 523,864,078 986,467,751
------------- -------------
End of Year ............................................................................ $ 553,068,650 $ 523,864,078
============= =============
Undistributed Net Investment Income/(Accumulated Net Investment Loss) ..................... $ 50,493 $ 49,929
============= =============
Amounts designated as " -" are either $0 or have been rounded to $0.
(A) For details on share transaction, on by class, see statement of changes
net assets capital stock activity on page 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
------------------------------- -------------------------------
2011 2010 2011 2010
------------------------------- -------------------------------
Investment Activities:
Net Investment Income ................................ $ 1,364,246 $ 6,301,864 $ 27,509 $ 79,768
Net Realized Gain on Investments ..................... 2,097 1,597 -- --
-------------- -------------- -------------- --------------
Net Increase in Net Assets Resulting From Operations .... 1,366,343 6,303,461 27,509 79,768
-------------- -------------- -------------- --------------
Dividends and Distributions to Shareholders:
Net Investment Income:
Fiduciary Shares .................................. (1,107,284) (5,467,391) (25,751) (76,405)
Class A Shares .................................... (184,091) (680,925) (1,758) (3,363)
Class B Shares .................................... -- -- -- --
Class C Shares .................................... -- -- -- --
Class S Shares .................................... (72,871) (153,548) -- --
-------------- -------------- -------------- --------------
Total Dividends and Distributions .............. (1,364,246) (6,301,864) (27,509) (79,768)
-------------- -------------- -------------- --------------
Net Increase (Decrease) in Net Assets From:
Share Transactions (A) ............................ (19,610,119) (943,763,155) 8,480,567 34,297,790
-------------- -------------- -------------- --------------
Total Increase (Decrease) in Net Assets ........ (19,608,022) (943,761,558) 8,480,567 34,297,790
-------------- -------------- -------------- --------------
Net Assets:
Beginning of Year .................................... 2,565,131,857 3,508,893,415 187,377,957 153,080,167
-------------- -------------- -------------- --------------
End of Year .......................................... $2,545,523,835 $2,565,131,857 $ 195,858,524 $ 187,377,957
============== ============== ============== ==============
Undistributed Net Investment Income/(Accumulated Net
Investment Loss) ..................................... $ 80,608 $ 78,511 $ 175 $ 175
============== ============== ============== ==============
100%
U.S. GOVERNMENT MONEY U.S. TREASURY MONEY
MARKET FUND MARKET FUND
------------------------------- -------------------------------
2011 2010 2011 2010
------------------------------- -------------------------------
Investment Activities:
Net Investment Income ................................ $ 333,064 $ 770,164 $ 70,042 $ 90,147
Net Realized Gain on Investments ..................... 735 -- 16,418 5,081
-------------- -------------- -------------- --------------
Net Increase in Net Assets Resulting From Operations .... 333,799 770,164 86,460 95,228
-------------- -------------- -------------- --------------
Dividends and Distributions to Shareholders:
Net Investment Income:
Fiduciary Shares .................................. (271,288) (661,441) (30,405) (54,385)
Class A Shares .................................... (12,747) (32,239) (9,094) (18,362)
Class B Shares .................................... (46) (140) -- --
Class C Shares .................................... (94) (174) -- --
Class S Shares .................................... (48,889) (76,170) (30,543) (17,400)
-------------- -------------- -------------- --------------
Total Dividends and Distributions .............. (333,064) (770,164) (70,042) (90,147)
-------------- -------------- -------------- --------------
Net Increase (Decrease) in Net Assets From:
Share Transactions (A) ............................ 189,065,828 54,531,113 (301,806,589) 139,057,440
-------------- -------------- -------------- --------------
Total Increase (Decrease) in Net Assets ........ 189,066,563 54,531,113 (301,790,171) 139,062,521
-------------- -------------- -------------- --------------
Net Assets:
Beginning of Year .................................... 1,152,786,827 1,098,255,714 875,383,209 736,320,688
-------------- -------------- -------------- --------------
End of Year .......................................... $1,341,853,390 $1,152,786,827 $ 573,593,038 $ 875,383,209
============== ============== ============== ==============
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 ENDED JULY 31
CALIFORNIA TAX-FREE MONEY MARKET FUND
-----------------------------------------------------------------
2011 2010
SHARES DOLLARS SHARES DOLLARS
-----------------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued .......................... 512,725,924 $ 512,725,924 290,787,104 $ 290,787,104
Reinvestment of Dividends and Distributions .......... 628 628 351 351
Cost of Shares Redeemed .............................. (472,579,563) (472,579,563) (433,617,326) (433,617,326)
-------------- -------------- -------------- --------------
Total Fiduciary Share Transactions ................ 40,146,989 40,146,989 (142,829,871) (142,829,871)
-------------- -------------- -------------- --------------
Class A Shares:
Proceeds from Shares Issued .......................... 556,886,909 556,886,909 763,102,936 763,102,936
Reinvestment of Dividends and Distributions .......... 58,258 58,258 81,208 81,208
Cost of Shares Redeemed .............................. (560,634,629) (560,634,629) (1,067,624,817) (1,067,624,817)
-------------- -------------- -------------- --------------
Total Class A Share Transactions .................. (3,689,462) (3,689,462) (304,440,673) (304,440,673)
-------------- -------------- -------------- --------------
Class S Shares:
Proceeds from Shares Issued .......................... 76,797,492 76,797,492 80,120,610 80,120,610
Reinvestment of Dividends and Distributions .......... 2,846 2,846 5,863 5,863
Cost of Shares Redeemed .............................. (84,053,857) (84,053,857) (95,459,602) (95,459,602)
-------------- -------------- -------------- --------------
Total Class S Share Transactions .................. (7,253,519) (7,253,519) (15,333,129) (15,333,129)
-------------- -------------- -------------- --------------
Net Increase (Decrease) from Capital Stock Activity .. 29,204,008 $ 29,204,008 (462,603,673) $ (462,603,673)
============== ============== ============== ==============
Amounts designated as " -" are either $0 or have been rounded to $0
The accompanying notes are an integral part of the financial statements.
24 HIGHMARK(R) FUNDS
DIVERSIFIED MONEY MARKET FUND
-------------------------------------------------------------------
2011 2010
SHARES DOLLARS SHARES DOLLARS
-------------------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued .......................... 3,802,266,917 $ 3,802,266,917 2,824,103,317 $ 2,824,103,317
Reinvestment of Dividends and Distributions .......... 168,287 168,287 947,131 947,131
Cost of Shares Redeemed .............................. (3,750,826,268) (3,750,826,268) (3,308,122,951) (3,308,122,951)
-------------- --------------- -------------- ---------------
Total Fiduciary Share Transactions ................ 51,608,936 51,608,936 (483,072,503) (483,072,503)
-------------- --------------- -------------- ---------------
Class A Shares:
Proceeds from Shares Issued .......................... 596,354,791 596,354,791 387,787,168 387,787,168
Reinvestment of Dividends and Distributions .......... 183,242 183,242 678,589 678,589
Cost of Shares Redeemed .............................. (592,488,110) (592,488,110) (797,078,083) (797,078,083)
-------------- --------------- -------------- ---------------
Total Class A Share Transactions .................. 4,049,923 4,049,923 (408,612,326) (408,612,326)
-------------- --------------- -------------- ---------------
Class S Shares:
Proceeds from Shares Issued .......................... 833,912,760 833,912,760 720,255,934 720,255,934
Reinvestment of Dividends and Distributions .......... 68,266 68,266 153,477 153,477
Cost of Shares Redeemed .............................. (909,250,004) (909,250,004) (772,487,737) (772,487,737)
-------------- --------------- -------------- ---------------
Total Class S Share Transactions .................. (75,268,978) (75,268,978) (52,078,326) (52,078,326)
-------------- --------------- -------------- ---------------
Net Increase (Decrease) from Capital Stock Activity .. (19,610,119) $ (19,610,119) (943,763,155) $ (943,763,155)
============== =============== ============== ===============
TREASURY PLUS MONEY MARKET FUND
-------------------------------------------------------------------
2011 2010
SHARES DOLLARS SHARES DOLLARS
-------------------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued .......................... 966,631,663 $ 966,631,663 924,237,730 $ 924,237,730
Reinvestment of Dividends and Distributions .......... -- -- -- --
Cost of Shares Redeemed .............................. (954,857,918) (954,857,918) (890,764,850) (890,764,850)
-------------- --------------- -------------- ---------------
Total Fiduciary Share Transactions ................ 11,773,745 11,773,745 33,472,880 33,472,880
-------------- --------------- -------------- ---------------
Class A Shares:
Proceeds from Shares Issued .......................... 22,301,296 22,301,296 28,097,674 28,097,674
Reinvestment of Dividends and Distributions .......... 1,758 1,758 3,363 3,363
Cost of Shares Redeemed .............................. (25,596,232) (25,596,232) (27,276,127) (27,276,127)
-------------- --------------- -------------- ---------------
Total Class A Share Transactions .................. (3,293,178) (3,293,178) 824,910 824,910
-------------- --------------- -------------- ---------------
Class S Shares:
Proceeds from Shares Issued .......................... -- -- -- --
Reinvestment of Dividends and Distributions .......... -- -- -- --
Cost of Shares Redeemed .............................. -- -- -- --
-------------- --------------- -------------- ---------------
Total Class S Share Transactions .................. -- -- -- --
-------------- --------------- -------------- ---------------
Net Increase (Decrease) from Capital Stock Activity .. 8,480,567 $ 8,480,567 34,297,790 $ 34,297,790
============== =============== ============== ===============
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
-------------------------------------------------------------------
2011 2010
SHARES DOLLARS SHARES DOLLARS
-------------------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued .......................... 6,751,644,991 $ 6,751,644,991 5,631,634,038 $ 5,631,634,038
Reinvestment of Dividends and Distributions .......... 4,862 4,862 14,833 14,833
Cost of Shares Redeemed .............................. (6,502,196,456) (6,502,196,456) (5,572,519,920) (5,572,519,920)
-------------- --------------- -------------- ---------------
Total Fiduciary Share Transactions ................ 249,453,397 249,453,397 59,128,951 59,128,951
-------------- --------------- -------------- ---------------
Class A Shares:
Proceeds from Shares Issued .......................... 80,741,580 80,741,580 82,720,179 82,720,179
Reinvestment of Dividends and Distributions .......... 12,680 12,680 32,225 32,225
Cost of Shares Redeemed .............................. (66,989,449) (66,989,449) (108,184,052) (108,184,052)
-------------- --------------- -------------- ---------------
Total Class A Share Transactions .................. 13,764,811 13,764,811 (25,431,648) (25,431,648)
-------------- --------------- -------------- ---------------
Class B Shares:
Proceeds from Shares Issued .......................... 36,896 36,896 303,485 303,485
Reinvestment of Dividends and Distributions .......... 46 46 134 134
Cost of Shares Redeemed .............................. (64,253) (64,253) (364,426) (364,426)
-------------- --------------- -------------- ---------------
Total Class B Share Transactions .................. (27,311) (27,311) (60,807) (60,807)
-------------- --------------- -------------- ---------------
Class C Shares:
Proceeds from Shares Issued .......................... 1,314,608 1,314,608 370,161 370,161
Reinvestment of Dividends and Distributions .......... 88 88 169 169
Cost of Shares Redeemed .............................. (1,365,074) (1,365,074) (357,577) (357,577)
-------------- --------------- -------------- ---------------
Total Class C Share Transactions .................. (50,378) (50,378) 12,753 12,753
-------------- --------------- -------------- ---------------
Class S Shares:
Proceeds from Shares Issued .......................... 1,089,861,082 1,089,861,082 769,695,167 769,695,167
Reinvestment of Dividends and Distributions .......... 45,509 45,509 76,170 76,170
Cost of Shares Redeemed .............................. (1,163,981,282) (1,163,981,282) (748,889,473) (748,889,473)
-------------- --------------- -------------- ---------------
Total Class S Share Transactions .................. (74,074,691) (74,074,691) 20,881,864 20,881,864
-------------- --------------- -------------- ---------------
Net Increase (Decrease) from Capital Stock Activity .. 189,065,828 $ 189,065,828 54,531,113 $ 54,531,113
============== =============== ============== ===============
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
-------------------------------------------------------------------
2011 2010
SHARES DOLLARS SHARES DOLLARS
-------------------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued .......................... 1,217,901,265 $ 1,217,901,265 1,207,768,792 $ 1,207,768,792
Reinvestment of Dividends and Distributions .......... 795 795 1,988 1,988
Cost of Shares Redeemed .............................. (1,229,015,783) (1,229,015,783) (1,254,622,489) (1,254,622,489)
-------------- --------------- -------------- ---------------
Total Fiduciary Share Transactions ................ (11,113,723) (11,113,723) (46,851,709) (46,851,709)
-------------- --------------- -------------- ---------------
Class A Shares:
Proceeds from Shares Issued .......................... 166,236,480 166,236,480 166,495,073 166,495,073
Reinvestment of Dividends and Distributions .......... 9,090 9,090 18,359 18,359
Cost of Shares Redeemed .............................. (218,047,890) (218,047,890) (184,970,150) (184,970,150)
-------------- --------------- -------------- ---------------
Total Class A Share Transactions .................. (51,802,320) (51,802,320) (18,456,718) (18,456,718)
-------------- --------------- -------------- ---------------
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 .......................... 1,533,379,319 1,533,379,319 1,084,081,013 1,084,081,013
Reinvestment of Dividends and Distributions .......... 28,040 28,040 17,400 17,400
Cost of Shares Redeemed .............................. (1,772,297,905) (1,772,297,905) (879,732,546) (879,732,546)
-------------- --------------- -------------- ---------------
Total Class S Share Transactions .................. (238,890,546) (238,890,546) 204,365,867 204,365,867
-------------- --------------- -------------- ---------------
Net Increase (Decrease) from Capital Stock Activity .. (301,806,589) $ (301,806,589) 139,057,440 $ 139,057,440
============== =============== ============== ===============
HIGHMARK(R) FUNDS 27
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FOR THE YEARS 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
2011 $1.00 $ 0.001 $ --++ $0.001 $(0.001) $-- $ (0.001)
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)
CLASS A SHARES
2011 $1.00 $ --++ $ -- $ --++ $ --++ $-- $ --++
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)
CLASS S SHARES
2011 $1.00 $ --++ $ --++ $ --++ $ --++ $-- $ --++
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)
-----------------------------
DIVERSIFIED MONEY MARKET FUND
-----------------------------
FIDUCIARY SHARES
2011 $1.00 $ 0.001 $ --++ $0.001 $(0.001) $-- $(0.001)
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)
CLASS A SHARES
2011 $1.00 $ 0.001 $ --++ $0.001 $(0.001) $-- $(0.001)
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)
CLASS S SHARES
2011 $1.00 $ 0.001 $ --++ $0.001 $(0.001) $-- $(0.001)
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)
-------------------------------
TREASURY PLUS MONEY MARKET FUND
-------------------------------
FIDUCIARY SHARES
2011 $1.00 $ --++ $ -- $ --++ $ --++ $--++ $ --++
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
2011 $1.00 $ --++ $ -- $ --++ $ --++ $--++ $ --++
2010 1.00 --++ -- -- --++ -- --++
2009 (1) 1.00 0.001^ -- 0.001 (0.001) -- (0.001)
CLASS S SHARES
2011 (2) $1.00 $ --++ $ -- $ -- $ -- $-- $ --
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
2011 $1.00 0.06% $ 240,393 0.46% 0.76% 0.06%
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
CLASS A SHARES
2011 $1.00 0.02% $ 296,035 0.50% 1.01% 0.02%
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
CLASS S SHARES
2011 $1.00 0.02% $ 16,642 0.49% 1.06% 0.03%
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
-----------------------------
DIVERSIFIED MONEY MARKET FUND
-----------------------------
FIDUCIARY SHARES
2011 $1.00 0.06% $1,984,330 0.48% 0.75% 0.06%
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
CLASS A SHARES
2011 $1.00 0.05% $ 454,082 0.49% 1.00% 0.04%
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
CLASS S SHARES
2011 $1.00 0.05% $ 107,112 0.50% 1.05% 0.04%
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
-------------------------------
TREASURY PLUS MONEY MARKET FUND
-------------------------------
FIDUCIARY SHARES
2011 $1.00 0.02% $ 184,480 0.13% 0.79% 0.01%
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
2011 $1.00 0.02% $ 11,379 0.12% 1.04% 0.02%
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
2011 (2) $1.00 0.00% $ -- 0.12% 0.54% 0.02%
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
2011 $1.00 $ --++ $ --++ $ --++ $ --++ $ -- $ --++
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)
CLASS A SHARES
2011 $1.00 $ --++ $ --++ $ --++ $ --++ $ -- $ --++
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)
CLASS B SHARES
2011 $1.00 $ --++ $ --++ $ --++ $ --++ $ -- $ --++
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)
CLASS C SHARES
2011 $1.00 $ --++ $ --++ $ --++ $ --++ $ -- $ --++
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)
CLASS S SHARES
2011 $1.00 $ --++ $ --++ $ --++ $ --++ $ -- $ --++
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)
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
2011 $1.00 0.03% $1,181,823 0.16% 0.76% 0.03%
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
CLASS A SHARES
2011 $1.00 0.03% $ 54,653 0.16% 1.01% 0.03%
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
CLASS B SHARES
2011 $1.00 0.03% $ 148 0.16% 1.51% 0.03%
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
CLASS C SHARES
2011 $1.00 0.03% $ 270 0.16% 1.26% 0.03%
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
CLASS S SHARES
2011 $1.00 0.03% $ 104,959 0.16% 1.06% 0.03%
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
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.
** 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.
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 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
2011 $1.00 $ --++ $ --++ $ --++ $ --++ $-- $ --++
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)
CLASS A SHARES
2011 $1.00 $ --++ $ --++ $ --++ $ --++ $-- $ --++
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)
CLASS S SHARES
2011 $1.00 $ --++ $ --++ $ --++ $ --++ $-- $ --++
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)
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
2011 $1.00 0.01% $ 394,618 0.11% 0.76% 0.01%
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
CLASS A SHARES
2011 $1.00 0.01% $ 93,087 0.11% 1.01% 0.01%
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
CLASS S SHARES
2011 $1.00 0.01% $ 85,888 0.11% 1.06% 0.01%
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
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, 2011
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 thirty-one 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 five
classes of shares, Class A Shares, Class B Shares and Class C Shares
(collectively, the "Retail Shares"), Fiduciary Shares and Class S 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.
At the end of each calendar quarter, management evaluates the classification of
Levels 1, 2 and 3 assets and liabilities. Various factors are considered, such
as changes in liquidity from the prior reporting period; whether or not a broker
is willing to execute at the quoted price; the depth and consistency of prices
from third party pricing services; and the existence of contemporaneous,
observable trades in the market. Additionally, management evaluates the
classification of Level 1 and Level 2 assets and liabilities on a quarterly
basis for changes in listings or delistings on national exchanges.
Due to the inherent uncertainty of determining the fair value of investments
that do not have a readily available market value, the fair value of the Fund's
investments may fluctuate from period to period. Additionally, the fair value of
investments may differ significantly from the values that would have been used
had a ready market existed for such investments and may differ materially from
the values the Fund may ultimately realize. Further, such investments may be
subject to legal and other restrictions on resale or otherwise less liquid than
publicly traded securities.
For the year ended July 31, 2011, there were no transfers between Levels 1, 2
and 3 for the Funds.
A summary of the levels for each of Fund's investments as of July 31, 2011 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
HIGHMARK(R) FUNDS 31
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JULY 31, 2011
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. 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 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%
The Adviser contractually agreed to reduce its fees through November 30, 2011
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 S
SHARES SHARES SHARES SHARES SHARES
--------- ------- ------- ------- -------
California Tax-Free Money Market .. 0.55% 0.80% n/a n/a 1.05%
Diversified Money Market .......... 0.57 0.82 n/a n/a 1.07
Treasury Plus Money Market ........ 0.55 0.80 n/a n/a 1.05
U.S. Government Money Market ...... 0.57 0.82 1.52 1.27 1.07
100% U.S. Treasury Money Market ... 0.55 0.80 n/a n/a 1.05
n/a -- not applicable
Effective December 1, 2009, the Adviser may recoup from the Fund(s) 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 occur(ed), subject to certain limitations. This recoupment could
reduce a Fund's future total return. For the year ended July 31, 2011 the Funds
did not recoup any fees or expenses.
On July 31, 2011, the amounts subject to possible future recoupment under the
Funds' expense limitation agreement are as follows:
EXPIRING EXPIRING
2013 2014
---------- ----------
CA Tax-Free Money Market ............................ $ 647,577 $ 359,676
Diversified Money Market ............................ -- 886,489
Treasury Plus Money Market .......................... 362,876 546,346
U.S. Government Money Market ........................ 2,147,285 3,014,215
100% US Treasury Money Market ....................... 1,508,719 2,649,621
A 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.
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. The Administrator may voluntarily waive its
fee, subject to termination at any time by the Administrator. For the year ended
July 31, 2011, the Administrator voluntarily waived a 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.
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 0.015% of such assets in excess of $8 billion. For the
year ended July 31, 2011, the Sub-Administrator earned sub-administration fees
in the amount of $1,289,592.
32 HIGHMARK(R) FUNDS
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.
Boston Financial Data Services, Inc. serves as the transfer agent, dividend
disbursing agent and shareholder servicing agent for the Funds.
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 July 1, 2010. 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, 2011. The Distributor
waived the following amounts during the period:
FUND CLASS A CLASS B CLASS C CLASS S
-------------------------------- --------- ------- ------- ---------
California Tax-Free Money Market ........ $ 591,652 N/A N/A $ 85,996
Diversified Money Market ................ 956,957 N/A N/A 766,938
Treasury Plus Money Market .............. 23,863 N/A N/A N/A
U.S. Government Money Market ............ 105,768 1,093 2,013 798,922
100% U.S. Treasury Money Market ......... 301,669 N/A N/A 1,784,170
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 a portion of their fees for certain classes of all Funds for the year
ended July 31, 2011. For the year ended July 31, 2011, the Bank, or its
affiliates earned shareholder servicing fees, net of waivers, from the Funds in
the amount of approximately $543,259, 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.
The Funds have analyzed their tax positions taken on federal income tax returns
for all open tax years (tax years ended July 31, 2008 through 2011) 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, undistributed net investment income or accumulated
net realized gain, as appropriate, in the period that the differences arise.
HIGHMARK(R) FUNDS 33
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JULY 31, 2011
Permanent differences, primarily attributable to net capital loss carry
forward(s) expiring 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 .......... $ 564 $ (564) $ --
Diversified Money Market .................. 2,097 (2,097) --
Treasury Plus Money Market ................ -- -- --
U.S. Government Money Market .............. -- 14,116 (14,116)
100% U.S. Treasury Money Market ........... -- 87,431 (87,431)
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, 2011 and July 31, 2010 were as follows:
LONG-TERM
TAX-EXEMPT ORDINARY CAPITAL RETURN OF
INCOME INCOME GAIN CAPITAL TOTAL
------------ ------------ --------- --------- -------------
California Tax-Free Money Market
2011 .................................... $ 189,596 $ 571 $ -- $ -- $ 190,167
2010 .................................... 168,843 35 -- -- 168,878
Diversified Money Market
2011 .................................... -- 1,364,246 -- -- 1,364,246
2010 .................................... -- 6,301,864 -- -- 6,301,864
Treasury Plus Money Market
2011 .................................... -- 27,509 -- -- 27,509
2010 .................................... -- 79,768 -- -- 79,768
U.S. Government Money Market
2011 .................................... -- 333,064 -- -- 333,064
2010 .................................... -- 770,164 -- -- 770,164
100% U.S. Treasury Money Market
2011 .................................... -- 70,042 -- -- 70,042
2010 .................................... -- 90,147 -- -- 90,147
As of July 31, 2011, the components of distributable earnings (accumulated
losses) on a tax basis were as follows: TOTAL DISTRIBUTABLE
UNDISTRIBUTED UNDISTRIBUTED UNDISTRIBUTED CAPITAL
ORDINARY TAX-EXEMPT LONG-TERM LOSS
INCOME INCOME CAPITAL GAIN CARRYFORWARD
------------- -------------- ------------- -------------
California Tax-Free Money Market ............... $ -- $ 54,591 $ -- $ --
Diversified Money Market ....................... 109,580 -- -- --
Treasury Plus Money Market ..................... 624 -- -- --
U.S. Government Money Market ................... 4,951 -- -- (1,731)
100% U.S. Treasury Money Market ................ 812 -- -- (77,033)
TOTAL
DISTRIBUTABLE
POST- UNREALIZED OTHER EARNINGS
OCTOBER APPRECIATION TEMPORARY (ACCUMULATED
LOSSES (DEPRECIATION) DIFFERENCES LOSSES)
------------- -------------- ------------- -------------
California Tax-Free Money Market ............... $ -- $ -- $ (4,098) $ 50,493
Diversified Money Market ....................... -- -- (28,972) 80,608
Treasury Plus Money Market ..................... -- -- (449) 175
U.S. Government Money Market ................... -- -- (4,951) (1,731)
100% U.S. Treasury Money Market ................ -- (1,979) (812) (79,012)
AMOUNTS DESIGNATED AS "--" ARE EITHER NOT APPLICABLE OR LESS THAN $1.00.
34 HIGHMARK(R) FUNDS
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
JULY 31, 2011
Post-October losses represent losses realized on investment transactions from
November 1, 2010 through July 31, 2011, 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
capital losses of a Fund that may be carried forward for a maximum period of
eight years and applied against future net realized gains. On December 22, 2010,
the Regulated Investment Company Modernization Act of 2010 was enacted to
modernize several of the federal income and excise tax provisions related to
regulated investment companies. Under pre-enactment law, capital losses could be
carried forward for eight years, and carried forward as short-term capital
losses, irrespective of the character of the original loss. New net capital
losses (those earned in taxable years beginning after December 22, 2010) may be
carried forward indefinitely and must retain the character of the original loss.
Such new net capital losses generally must be used by a regulated investment
company before it uses any net capital losses incurred in taxable years
beginning on or before December 22, 2010. This increases the likelihood that net
capital losses incurred in taxable years beginning on or before December 22,
2010 will expire unused. At July 31, 2011, the Funds had capital loss
carryforwards available to offset future realized capital gains through the
indicated expiration dates:
2012 2013 2014 2015 2016 2017 2018 2019 TOTAL
-------- ------ ------- ------- -------- ------- ------ ------- --------
U.S. Government Money Market ....... $ -- $1,112 $ 618 $ -- $ -- $ -- $ 1 $ -- $ 1,731
100% U.S. Treasury Money Market .... -- -- -- 16,174 11,980 -- -- 48,879 77,033
AMOUNTS DESIGNATED AS "--" ARE EITHER NOT APPLICABLE OR LESS THAN $1.00.
During the year ended July 31, 2011, capital loss carryforwards that were
utilized and/or expired are as follows:
U.S. Government Money Market ....... $14,850
100% U.S. Treasury Money Market .... 87,431
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 California.
6. MARKET
On August 5, 2011, Standard & Poor's ("S&P") lowered the long-term sovereign
credit rating of U.S. Government debt obligations from AAA to AA+. Shortly
thereafter, S&P also downgraded the long-term credit ratings of U.S.
Government-sponsored enterprises. These actions initially have had an adverse
effect on financial markets. It is possible that the downgrade of the U.S.
Government's credit rating may create broader financial turmoil and uncertainty,
which would weigh heavily on the global financial system. The downgrade could,
for example, disrupt money markets, long-term or short-term fixed income
markets, foreign exchange markets, commodities markets and equity markets. These
adverse consequences could extend to the borrowers of the loans held by a Fund
and, as a result, could materially and adversely affect returns on a Fund's
investments, the ability of borrowers to continue to pay their debt service or
refinance and repay their loans as they become due and a Funds' ability to
continue to acquire targeted assets on attractive terms. While it is not
possible to precisely predict the longer-term impact of the downgrade on the
financial markets and the participants therein, it might be material and adverse
to a Fund(s).
7. NEW ACCOUNTING PRONOUNCEMENT
In May 2011, the Financial Accounting Standards Board issued Accounting
Standards Update ("ASU") No. 2011-04 "Amendments to Achieve Common Fair Value
Measurement and Disclosure Requirements in U.S. GAAP and IFRSs". ASU 2011-04
includes common requirements for measurement of and disclosure about fair value
between U.S. GAAP and IFRS. ASU 2011-04 will require reporting entities to
disclose the following information for fair value measurements categorized
within Level 3 of the fair value hierarchy: quantitative information about the
unobservable inputs used in the fair value measurement, the valuation processes
used by the reporting entity and a narrative description of the sensitivity of
the fair value measurement to changes in unobservable inputs and the
interrelationships between those unobservable inputs. In addition, ASU 2011-04
will require reporting entities to make disclosures about amounts and reasons
for all transfers in and out of Level 1 and Level 2 fair value measurements. The
new and revised disclosures are effective for interim and annual reporting
periods beginning after December 15, 2011. Management is currently evaluating
the implications of ASU No. 2011-04 and its impact on the financial statements.
8. 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 thirty-one portfolios constituting the HighMark Funds (the
"Trust") as of July 31, 2011, 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, 2011, 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, 2011, 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 23, 2011
36 HIGHMARK(R) FUNDS
NOTICE TO SHAREHOLDERS (UNAUDITED)
For shareholders that do not have a July 31, 2011 tax year end, this notice is
for informational purposes only. For shareholders with a July 31, 2011 tax year
end, please consult your tax adviser as to the pertinence of this notice. For
the fiscal year ended July 31, 2011, 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% 0.30% 99.70% 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% 99.87% 0.00%
Treasury Plus Money
Market .............. 0.00% 100.00% 0.00% 100.00% 0.00% 0.00% 54.70% 100.00% 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,
2011.
(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, 2011. 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 23, 2011.
------------------------------------------------------------------------------------------------------------------------------------
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 Trustee, Since 3/04 From April 1, 1992 to present, 29 None
David Benkert Chairman Director, Navigant Consulting, Inc.
54 (financial consulting).
Thomas L. Braje Trustee Since 6/87 Prior to retirement in October 1996, 29 None
68 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 Aeropostale,
56 Committee Directors of Tempur-Pedic Inc. (ARO);
Chairman International Inc. (mattress Longs Drug
manufacturer). Since November 2009, Corporation
Member, Board of Directors of Blue (LDG)(5);
Shield of California (health Russell
insurance). Formerly Executive Vice Exchange
President for The Charles Schwab Traded Funds
Corporation, and President and Chief Trust;
Executive Officer of Charles Schwab Tamalpais
Investment Management, Inc. Prior to Bancorp
July 2004, Senior Vice President, (TAMB);
Asset Management Products and Tempur-Pedic
Services, Charles Schwab Investment International
Management, Inc. Prior to July 2003, Inc. (TPX)
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
69 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.
70 Vice Chairman, since 1998. Member, Saber Partners (AVA)
Governance (financial advisory firm) since 2002.
Committee Member, Board of Directors, Avista
Chairman Corp. (utility company), since
January 2004. Member, Board of
Directors, SCAN Health Plan, since
1997.
Mindy M. Posoff Trustee Since 10/10 Managing Director, Traversent Capital 29 None
Age: 55 Partners (financial consulting) since
January 2010. From January 2003 to
December 2009, Managing Director,
NewMarket Capital Partners, LLC
(asset management).
INTERESTED TRUSTEE AND OFFICERS
Earl A. Malm II(6) Trustee, Since 12/05 President, Chief Executive Officer 29 None
350 California Street President (President) and Director of the Adviser since
San Francisco, CA 94104 Since 1/08 October 2002. Chairman of the Board
62 (Trustee) of the Adviser since February 2005.
Colleen Cummings Assistant Since 6/10 Vice President and Senior Director, N/A N/A
4400 Computer Drive Treasurer Client Services Administration, BNY
Westborough, MA 01581 Mellon Investment Servicing (US) Inc.
40
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 TRUSTEES
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.
47 Officer (Vice
President)
Since 6/10
(Chief
Financial
Officer)
Kevin Rowell Vice President, Since 09/10 Senior Vice President and Managing N/A N/A
350 California Street Treasurer and Director of the Adviser since June
San Francisco, CA 94104 Assistant 2010. From 2008 to 2010, President,
Age: 51 Secretary Hennessy Funds. From 2006 to 2007,
Executive Vice President, head of
U.S. Distribution, Pioneer
Investments.
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.
54
Helen Robichaud Secretary Since 03/10 Managing Director and Senior Counsel, N/A N/A
201 Washington Street, BNY Mellon Investment Servicing (US)
34th Floor Inc. since January 2010. Director of
Boston, MA 02108 Fund Regulatory Services of J.P.
Age: 59 Morgan from June 2008 to December
2009. Associate General Counsel of
J.P. Morgan from August 1995 to June
2008.
Julie M. Powers Assistant Since 12/10 Vice President and Senior Manager of N/A N/A
201 Washington Street, Secretary BNY Mellon Investment Servicing (US)
34th Floor Inc. since August 2005.
Boston, MA 02108
Age: 42
--------------------
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.
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 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 the 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,
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
29-30, 2011.
In considering whether to approve the continuation of the Investment Advisory
Agreement with respect to the Funds at the meetings held on June 29-30, 2011,
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 Fund. In the case of each Fund that had performance that lagged that of
a relevant peer group for certain (although not necessar-
40 HIGHMARK(R) FUNDS
ily 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 included one or more of the following:
(1) 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; and (2) 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 Investment Advisory 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. 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 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 are 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. The Trustees noted that, although there are not any fee breakpoints,
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, 2012.
HIGHMARK(R) FUNDS 41
FUND INFORMATION (UNAUDITED)
JULY 31, 2011
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 SEC 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 #
CALIFORNIA 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 #
CALIFORNIA 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
CALIFORNIA 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
Mindy M. Posoff
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
HMKAR0030200
84806-A (07/11)
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 and Evelyn S. Dilsaver are
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
$595,500 for 2010 and $603,000 for 2011.
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 $36,600 for 2010 and $36,600 for 2011.
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 $94,650 for 2010 and
$94,650 for 2011.
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
$39,607 for 2010 and $0 for 2011.
(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) The percentage of services described in each of paragraphs (b) through
(d) of this Item that were approved by the audit committee pursuant to
paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X 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 less 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 $615,857 for 2010 and $598,000 for 2011.
(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 October 7, 2011
----------------------------------------------------------------------------
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 October 7, 2011
---------------------------------------------------------------------------
By (Signature and Title)* /s/ Pamela O'Donnell
-------------------------------------------------------
Pamela O'Donnell, Chief Financial Officer
(principal financial officer)
Date October 7, 2011
---------------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.