UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-05059
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HighMark Funds
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(Exact name of registrant as specified in charter)
350 California Street, Suite 1600
San Francisco, CA 94104
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(Address of principal executive offices) (Zip code)
John M. Loder, Esq.
Ropes & Gray LLP
Three Embarcadero Center
San Francisco, CA 94111
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(Name and address of agent for service)
registrant's telephone number, including area code: 1-800-582-4734
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Date of fiscal year end: July 31, 2012
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Date of reporting period: July 31, 2012
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 100 F Street, NE,
Washington, DC 20549. The OMB has reviewed this collection of information under
the clearance requirements of 44 U.S.C. ss. 3507.
Item 1. Reports to Stockholders.
The Report to Shareholders is attached herewith.
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JULY 31, 2012
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HIGHMARK
The smarter approach to investing.
EQUITY
ASSET ALLOCATION
FIXED-INCOME
ANNUAL
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report
[GRAPHIC OMITTED]
[HIGHMARK FUNDS(R) LOGO]
TABLE OF CONTENTS
management's discussion of fund performance
balanced fund .......................................................... 2
cognitive value fund ................................................... 4
enhanced growth fund ................................................... 6
equity income fund ..................................................... 8
geneva mid cap growth fund ............................................. 10
geneva small cap growth fund ........................................... 12
international opportunities fund ....................................... 14
large cap core equity fund ............................................. 16
(formerly core equity fund)
large cap growth fund .................................................. 18
nyse arca tech 100 index fund .......................................... 20
small cap core fund .................................................... 22
(formerly small cap advantage fund)
value fund ............................................................. 24
(formerly value momentum fund)
tactical capital growth allocation fund ................................ 26
(formerly capital growth allocation fund)
tactical growth & income allocation fund ............................... 28
(formerly growth & income allocation fund)
bond fund .............................................................. 30
california intermediate tax-free bond fund ............................. 32
national intermediate tax-free bond fund ............................... 34
short term bond fund ................................................... 36
wisconsin tax-exempt fund .............................................. 38
disclosure of fund expenses ............................................... 40
schedules of investments .................................................. 43
statements of assets and liabilities ...................................... 104
statements of operations .................................................. 116
statements of changes in net assets ....................................... 122
financial highlights ...................................................... 138
notes to financial statements ............................................. 149
report of independent registered public accounting firm ................... 163
notice to shareholders .................................................... 165
trustees and officers ..................................................... 166
board approval of the existing advisory and sub-advisory agreements ....... 168
fund information .......................................................... 171
service providers & board of trustees ..................................... 176
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, LLC 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
APPLE 4.4%
PRAXAIR 3.4
WELLS FARGO 3.0
EXXONMOBIL 2.9
DANAHER 2.7
ECOLAB 2.3
US BANCORP 2.3
EMC 1.8
AMERICAN TOWER REIT 1.7
OCCIDENTAL PETROLEUM 1.7
FUND SECTORS
% OF
SECTOR PORTFOLIO
INFORMATION TECHNOLOGY 12.7%
FINANCIALS 12.7
ENERGY 10.3
CONSUMER DISCRETIONARY 9.9
INDUSTRIAL 9.1
CONSUMER STAPLES 9.1
REPURCHASE AGREEMENT 8.3
MATERIALS 8.0
HEALTH CARE 5.9
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS 4.3
MORTGAGE-BACKED SECURITIES 3.6
ASSET-BACKED SECURITIES 1.9
UTILITIES 1.7
TAXABLE MUNICIPAL BONDS 1.4
TELECOMMUNICATION SERVICES 0.9
FOREIGN GOVERNMENT 0.2
* Excludes short-term securities.
Current and future portfolio holdings are subject to change and risk.
BALANCED FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2012, HighMark Balanced Fund (the "Fund")
produced a total return of 9.94% (Class A Shares without load). In comparison,
the Fund's benchmarks, the unmanaged S&P 500 Index, the Barclays U.S. Aggregate
Bond Index and the unmanaged blended index of 60% S&P 500 Index and 40% Barclays
U.S. Aggregate Bond Index, returned 9.13%, 7.25% and 8.81%, respectively, for
the same period.
FACTORS AFFECTING PERFORMANCE
The Fund's reporting period was generally marked by market volatility,
challenging global conditions and a slow-growth economic recovery. Concerns over
the European sovereign debt crisis, particularly in relation to Greece, Italy
and Spain, persisted due to the possibility that a systemic event similar to the
Lehman Brothers collapse in 2008 would occur. These fears were exacerbated by a
downward revision in expectations for growth in the United States, as well as
fears that the country would once again enter a recession.
At the beginning of the Fund's reporting period, a volatile domestic political
situation led to a historic downgrade of United States government debt.
Nonetheless, Treasury bonds were still regarded as a "safe haven" for investors
amidst global uncertainty, and a flight to quality occurred despite the
downgrade. Further quantitative easing by the Federal Reserve, known as
"Operation Twist," combined with this flight to quality, led to lower rates
across the yield curve, particularly on the so-called long end of the curve.
Market volatility reached a peak and then subsided in November 2011 after news
that European financial institutions would have access to additional government
funds and that the United States potentially avoided a recession. However, fears
resurfaced over the fiscal solvency of Italy and Spain in May 2012, and
volatility returned to global markets toward the latter part of the reporting
period.
The two largest contributors by sector to the Fund's equity performance were
industrials and consumer discretionary. The Fund's largest equity detractor on a
sector basis was information technology.
Specific stocks that contributed to performance were transportation logistics
company J.B. Hunt, filtration systems maker Donaldson and industrial supplier
W.W. Grainger. In the consumer discretionary sector, contributors included
Petsmart, Sally Beauty Holdings and Dick's Sporting Goods.
The Fund's largest detractors from its equity performance included Acme Packet,
ARM Holdings and Riverbed Technologies in the information technology sector.
Positions in Acme Packet and Riverbed Technologies were sold during the
reporting period.
The Fund's fixed income performance was marked by the outperformance of Treasury
bonds in relation to both corporate bonds and mortgage bonds. The Fund was
overweight to corporate bonds and underweight to Treasury bonds relative to its
benchmark, which contributed to the Fund's underperformance. The duration of the
portfolio, which is shorter than its benchmark, was another reason for its
underperformance, as longer maturities outperformed shorter maturities for the
period. Although the Fund's allocation to asset-backed securities contributed to
performance, it was not enough to overcome these negative factors, and the
Fund's fixed income portion underperformed its benchmark for the reporting
period.
However, the Fund outperformed its blended benchmark for the reporting period.
2 HIGHMARK(R) FUNDS
HIGHMARK BALANCED FUND INVESTMENT OBJECTIVE
HIGHMARK BALANCED FUND SEEKS CAPITAL APPRECIATION AND INCOME; CONSERVATION OF
CAPITAL IS A SECONDARY CONSIDERATION.
[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 U.S. AGGREGATE BOND INDEX, AN
UNMANAGED BLENDED INDEX OF 60% S&P 500 INDEX AND 40% BARCLAYS U.S. AGGREGATE
BOND INDEX AND THE MORNINGSTAR MODERATE ALLOCATION CATEGORY.
[LINE GRAPH]
HighMark Morningstar 60/40 Hybrid
Balanced Moderate of the Barclays U.S.
Fund Class A Allocation following two S&P 500 Aggregate
Shares Category indices Index++ Bond Index++
Jul-02 $ 9,450 $ 10,000 $ 10,000 $ 10,000 $ 10,000
Jul-03 $ 10,126 $ 10,761 $ 10,912 $ 11,064 $ 10,542
Jul-04 $ 10,901 $ 11,735 $ 11,992 $ 12,521 $ 11,052
Jul-05 $ 11,890 $ 13,156 $ 13,236 $ 14,280 $ 11,582
Jul-06 $ 12,307 $ 13,805 $ 13,745 $ 15,049 $ 11,751
Jul-07 $ 13,678 $ 15,501 $ 15,380 $ 17,476 $ 12,404
Jul-08 $ 12,763 $ 14,546 $ 14,719 $ 15,538 $ 13,167
Jul-09 $ 11,684 $ 12,833 $ 13,402 $ 12,437 $ 14,201
Jul-10 $ 13,114 $ 14,359 $ 15,041 $ 14,158 $ 15,466
Jul-11 $ 14,753 $ 16,354 $ 17,087 $ 16,940 $ 16,152
Jul-12 $ 16,219 $ 16,866 $ 18,593 $ 18,486 $ 17,324
++ 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 10.19% 11.83% 3.71% 5.80% 1.54% 0.99%
-----------------------------------------------------------------------------------------------------------------
Class A Shares 9.94% 11.55% 3.46% 5.55% 1.79% 1.24%
-----------------------------------------------------------------------------------------------------------------
Class A Shares w/load* 3.88% 9.46% 2.30% 4.96% 1.79% 1.24%
-----------------------------------------------------------------------------------------------------------------
Class B Shares 9.23% 10.88% 2.84% 4.89% 2.29% 1.84%
-----------------------------------------------------------------------------------------------------------------
Class B Shares w/load** 4.23% 10.06% 2.48% 4.89% 2.29% 1.84%
-----------------------------------------------------------------------------------------------------------------
Class C Shares 9.27% 10.89% 2.83% 4.88% 2.29% 1.84%
-----------------------------------------------------------------------------------------------------------------
Class C Shares w/load*** 8.27% 10.89% 2.83% 4.88% 2.29% 1.84%
-----------------------------------------------------------------------------------------------------------------
S&P 500 Index 9.13% 14.13% 1.13% 6.34% -- --
-----------------------------------------------------------------------------------------------------------------
Barclays U.S. Aggregate Bond Index 7.25% 6.85% 6.91% 5.65% -- --
-----------------------------------------------------------------------------------------------------------------
Blend of 60% S&P 500 Index and 40%
Barclays U.S. Aggregate Bond Index 8.81% 11.53% 3.87% 6.40% -- --
-----------------------------------------------------------------------------------------------------------------
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. CURRENT PERFORMANCE MAY BE
LOWER OR HIGHER THAN THE RETURNS QUOTED. 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, 2011 and ending on November 30, 2012. 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
RYDEX S&P SMALLCAP 600 PURE VALUE ETF 1.1%
HELIX ENERGY SOLUTIONS GROUP 1.1
MAXIMUS 1.0
BARRETT BUSINESS SERVICES 1.0
CVR ENERGY 1.0
WESTERN REFINING 1.0
MENTOR GRAPHICS 1.0
CABELA'S 1.0
ENERSYS 1.0
MTS SYSTEMS 0.9
FUND SECTORS
% OF
SECTOR PORTFOLIO
FINANCIALS 25.8%
INDUSTRIAL 17.7
CONSUMER DISCRETIONARY 12.9
INFORMATION TECHNOLOGY 12.6
HEALTH CARE 6.8
MATERIALS 6.7
ENERGY 5.9
UTILITIES 3.9
REGISTERED INVESTMENT COMPANIES 3.5
CONSUMER STAPLES 3.1
REPURCHASE AGREEMENT 0.7
TELECOMMUNICATION SERVICES 0.4
* Excludes short-term securities.
Current and future portfolio holdings are subject to change and risk.
COGNITIVE VALUE FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2012, HighMark Cognitive Value Fund (the
"Fund") produced a total return of 0.21% (Class A Shares without load). In
comparison, the Fund's benchmark, the unmanaged S&P SmallCap 600/Citigroup Value
Index, returned 4.26% for the same period.
FACTORS AFFECTING PERFORMANCE
The Fund uses its proprietary Behavioral Ranking Model (BRM) (a composite of the
Fund's factor signals) to help make stock selection decisions. While the BRM's
top quintile of stocks outperformed the Fund's benchmark, differing sector
weights, sub-par stock selection and an overweight position in micro-cap stocks
all detracted from the Fund's return.
The Fund's reporting period was not a particularly strong one for the BRM.
Earnings sustainability was the only component factor to outperform the Fund's
benchmark. Two components of the BRM lagged the Fund's benchmark, and three
components were actually negative for the reporting period. A seventh component
factor was added to the model in May 2012. Results have been positive since that
time, but were not a major contributor to overall BRM return.
The Fund neutralizes economic sector and sub-sector weights to a composite of
small value mutual fund competitors rather than to its benchmark. As a result,
when competitor sector weights deviate from the benchmark's sector weights,
differences in performance will occur. During the reporting period, the Fund's
benchmark generally had higher weights in outperforming sectors and lower
weights in underperforming sectors than did small value competitors. This
contributed to the Fund's shortfall in performance.
In addition, due to risk control and transaction cost considerations, the Fund
does not hold all of the approximately 600 stocks that comprise the BRM's top
quintile. While almost all stocks are in the top quintile at the time of
purchase, typically only 75% to 85% of the Fund's holdings are in the top
quintile at any one time. During the reporting period, the stocks held by the
Fund underperformed the top quintile as stock selection adversely impacted the
Fund's returns.
Finally, the Fund's large weighting in micro-cap stocks was a drag on
performance for the reporting period, underperforming the small cap portion of
the Fund's portfolio by approximately 2%. The Fund has recently implemented a
new micro-cap timing model that seeks to improve the risk-adjusted contribution
of micro-cap stocks to the Fund's overall performance.
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
Cognitive Value S&P SmallCap Morningstar
Fund Class A 600/Citigroup Small Value
Shares+ Value Index++ Category
Jul-02 $ 9,450 $ 10,000 $ 10,000
Jul-03 $ 10,277 $ 11,539 $ 11,351
Jul-04 $ 12,139 $ 14,002 $ 12,371
Jul-05 $ 14,971 $ 17,622 $ 13,791
Jul-06 $ 16,125 $ 18,841 $ 14,305
Jul-07 $ 17,985 $ 21,283 $ 15,919
Jul-08 $ 15,967 $ 18,915 $ 14,048
Jul-09 $ 12,395 $ 15,429 $ 11,560
Jul-10 $ 14,825 $ 18,254 $ 14,017
Jul-11 $ 18,390 $ 21,895 $ 16,837
Jul-12 $ 18,429 $ 22,828 $ 16,748
++ 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 0.60% 14.51% 0.81% 7.23%+ 1.34% 1.23%
-----------------------------------------------------------------------------------------------------------------
Class A Shares 0.21% 14.13% 0.48% 6.90%+ 1.59% 1.48%
-----------------------------------------------------------------------------------------------------------------
Class A Shares w/load* -5.30% 12.00% -0.64% 6.30%+ 1.59% 1.48%
-----------------------------------------------------------------------------------------------------------------
Class C Shares -0.27% 13.50% -0.12% 6.29%+ 2.09% 2.08%
-----------------------------------------------------------------------------------------------------------------
Class C Shares w/load** -1.27% 13.50% -0.12% 6.29%+ 2.09% 2.08%
-----------------------------------------------------------------------------------------------------------------
Class M Shares 0.71% 14.63% 0.89% 7.36% 1.09% 1.08%
-----------------------------------------------------------------------------------------------------------------
S&P Small Cap 600/Citigroup Value Index 4.26% 13.95% 1.41% 8.59% -- --
-----------------------------------------------------------------------------------------------------------------
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. CURRENT PERFORMANCE MAY BE
LOWER OR HIGHER THAN THE RETURNS QUOTED. 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, 2011 and ending on November 30, 2012. 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 10.9%
MICROSOFT 4.3
GOOGLE, CL A 4.1
INTERNATIONAL BUSINESS MACHINES 3.3
QUALCOMM 2.9
ORACLE 2.7
INTEL 2.6
EMC 1.7
CISCO SYSTEMS 1.7
SAMSUNG ELECTRONICS, GDR 1.7
FUND SECTORS
% OF
SECTOR PORTFOLIO
INFORMATION TECHNOLOGY 85.4%
HEALTH CARE 7.4
CONSUMER DISCRETIONARY 4.0
REPURCHASE AGREEMENT 1.6
REGISTERED INVESTMENT COMPANIES 1.3
TELECOMMUNICATION SERVICES 0.3
* Excludes short-term securities.
Current and future portfolio holdings are subject to change and risk.
ENHANCED GROWTH FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2012, HighMark Enhanced Growth Fund (the
"Fund") produced a total return of 5.28% (Class A Shares without load). In
comparison, the Fund's benchmarks, the NASDAQ 100 Index and the S&P North
American Technology Sector Index, returned 13.05% and 7.25% respectively for the
same period.
FACTORS AFFECTING PERFORMANCE
The global stock markets have gone through periods of fear and exuberance over
the Fund's reporting period. Last August, as the risks of global economies
falling back into a recession started to rise, investors began to shun all risky
assets, selling equities around the world. Markets began to stabilize and then
moved dramatically higher in the month of October 2011, only to falter once
again in the month of November 2011. After a relatively stable December 2011,
the month of January 2012 saw equity indices move higher once again. All of this
resulted in a mid-single digit return for both the Fund and its benchmarks for
the first six months of the reporting period.
The second six months of the reporting period were marked by a similar pattern
of volatility in the stock markets. Markets generally moved higher in the first
part of this six-month period, but investor sentiment changed dramatically in
the last few months of the reporting period, when investors suddenly began to
pay more attention to global macro events. As a result, similar to the first
part of the reporting period, the Fund and its benchmarks ended the second six
months of the reporting period with single digit gains.
During the Fund's reporting period, the Fund focused on certain sub-sectors,
particularly in the information technology sector. The Fund also invested in the
healthcare sector, focusing on biotech, medical devices and pharmaceutical
companies. In addition, the Fund held small positions in the consumer
discretionary, industrials and telecommunication sectors.
The biotechnology, computer hardware, internet software and services, and
technology distribution subsectors were positive contributors to the Fund's
return over the Fund's reporting period. Certain sub-sectors within the consumer
discretionary sector (such as cable and satellite and consumer electronics) also
contributed positively to the Fund's performance. On the negative side, the
application software, communications equipment, semiconductor equipment, and
semiconductors industry groups detracted from the Fund's performance. The IT
consulting and services and the electric manufacturing services sub-sectors had
a neutral impact on the Fund's performance.
6 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 Morningstar S&P North
Enhanced Growth Specialty - American
Fund Class A NASDAQ 100 Technology Technology
Shares+ Index++ Category Sector Index++
Jul-02 $ 9,450 $ 10,000 $ 10,000 $ 10,000
Jul-03 $ 12,295 $ 13,294 $ 11,350 $ 12,777
Jul-04 $ 13,360 $ 14,613 $ 12,370 $ 13,946
Jul-05 $ 15,066 $ 16,811 $ 13,792 $ 15,568
Jul-06 $ 13,719 $ 15,878 $ 13,415 $ 14,569
Jul-07 $ 17,334 $ 20,420 $ 17,099 $ 19,184
Jul-08 $ 15,630 $ 19,544 $ 15,307 $ 17,854
Jul-09 $ 13,567 $ 16,947 $ 13,620 $ 15,965
Jul-10 $ 15,427 $ 19,831 $ 15,833 $ 18,239
Jul-11 $ 18,718 $ 25,340 $ 19,436 $ 21,936
Jul-12 $ 19,706 $ 28,647 $ 19,360 $ 23,526
++ 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 5.63% 13.65% 2.96%+ 8.04%+ 1.34% 1.21%
-----------------------------------------------------------------------------------------------------------------
Class A Shares 5.28% 13.25% 2.60% 7.63%+ 1.59% 1.46%
-----------------------------------------------------------------------------------------------------------------
Class A Shares w/load* -0.52% 11.15% 1.45% 7.01%+ 1.59% 1.46%
-----------------------------------------------------------------------------------------------------------------
Class C Shares 4.60% 12.55% 1.96% 7.03%+ 2.09% 2.06%
-----------------------------------------------------------------------------------------------------------------
Class C Shares w/load** 3.60% 12.55% 1.96% 7.03%+ 2.09% 2.06%
-----------------------------------------------------------------------------------------------------------------
Class M Shares 5.71% 13.67% 3.00% 8.11% 1.09% 1.06%
-----------------------------------------------------------------------------------------------------------------
NASDAQ 100 Index 13.05% 19.13% 7.27% 11.23% -- --
-----------------------------------------------------------------------------------------------------------------
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. CURRENT PERFORMANCE MAY BE
LOWER OR HIGHER THAN THE RETURNS QUOTED. 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 September 26, 2007. 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, 2011 and ending on November 30, 2012. 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 7
TOP TEN HOLDINGS
% OF
COMPANY* PORTFOLIO
EXXONMOBIL 5.2%
CHEVRON 3.6
VERIZON COMMUNICATIONS 3.5
US BANCORP 3.0
PFIZER 3.0
JOHNSON & JOHNSON 2.9
AT&T 2.9
BRISTOL-MYERS SQUIBB 2.7
WELLS FARGO 2.7
ALTRIA 2.5
FUND SECTORS
% OF
SECTOR PORTFOLIO
FINANCIALS 27.5%
ENERGY 13.3
INDUSTRIAL 13.0
UTILITIES 10.5
HEALTH CARE 8.6
TELECOMMUNICATION SERVICES 7.8
INFORMATION TECHNOLOGY 6.7
CONSUMER STAPLES 4.6
CONSUMER DISCRETIONARY 4.2
MATERIALS 2.7
REGISTERED INVESTMENT COMPANY 1.1
* Excludes short-term securities.
Current and future portfolio holdings are subject to change and risk.
EQUITY INCOME
FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2012, HighMark Equity Income Fund (the
"Fund") produced a total return of 13.12% (Class A Shares without load). In
comparison, the Fund's benchmark, the unmanaged Russell 1000 Value Index,
returned 7.64% for the same period.
FACTORS AFFECTING PERFORMANCE
The Fund's reporting period was generally marked by volatility, challenging
global conditions and a slow-growth economic recovery. Concerns over the
European sovereign debt crisis, particularly in relation to Greece, Italy and
Spain, persisted due to the possibility that a systemic event similar to the
Lehman Brothers collapse in 2008 would occur. These fears were exacerbated by a
downward revision in expectations for growth in the United States, as well as
fears that the country would once again enter a recession.
At the beginning of the Fund's reporting period, a volatile domestic political
situation led to a historic downgrade of United States government debt. Market
volatility reached a peak and then subsided in November 2011 on news that
European financial institutions would have access to additional government funds
and that the United States potentially avoided a recession. However, fears
resurfaced in May 2012 over the fiscal solvency of Italy and Spain, and
volatility returned to global markets toward the latter part of the reporting
period.
Sector allocations that contributed most to performance include an overweight to
telecommunications, which was 1.81% greater than the Fund's benchmark and added
0.44% to the Fund's relative performance. The Fund carried an average allocation
to the financial sector that was 1.01% less than the Fund's benchmark (Russell
1000 Value Index). The financial sector's performance was relatively flat
(+0.61%) when compared with the benchmark, and the underweight added 0.18% to
the Fund's relative performance.
Top sector detractors include an underweight to consumer staples, which rose
16.18% and detracted 0.29% from the Fund's performance relative to its
benchmark. The Fund carried an average overweight of 1.10% to the materials
sector, which fell 5.90% and detracted 0.28% from performance. Lastly, the Fund
carried a 1.92% average underweight to the health care sector, which rose 15.63%
and detracted 0.21% from performance.
Companies that contributed most to performance include hard drive manufacturer
Seagate Technology, which added 0.99% to performance. Shares of the natural gas
pipeline operator Williams Cos. increased in value 27.10% over the reporting
period, contributing 0.57% to the Fund's performance. Shares of the tobacco
producer Altria Group Inc. increased in value 44.50% over the reporting period
and contributed 0.51% to the Fund's performance.
Companies that detracted from performance include National Presto Industries
Inc., an industrial manufacturer of household appliances, defense and absorbent
products. The stock declined 18.17% and was removed from the portfolio in early
March 2012, but the position subtracted 0.46% from the Fund's performance during
the reporting period. Mortgage REIT Chimera Investment Corp. lost 17.72% and
detracted 0.35% from the Fund's performance during the reporting period.
Canadian energy exploration and producer Pengrowth Energy Corp. fell 39.78% and
subtracted 0.31% from the Fund's performance during the reporting period.
Despite these slight drags on performance, the Fund outperformed its benchmark
for the reporting period.
8 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 LOTSOFF CAPITAL MANAGEMENT, LLC
[PHOTO OF MIKHAIL ALKHAZOV]
PORTFOLIO MANAGER
MIKHAIL ALKHAZOV
ZIEGLER LOTSOFF CAPITAL MANAGEMENT, LLC
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK EQUITY
INCOME FUND VERSUS THE RUSSELL 1000 VALUE INDEX AND THE MORNINGSTAR LARGE VALUE
CATEGORY.
[LINE GRAPH]
HighMark
Equity Income Morningstar
Fund Class A Russell 1000 Large Value
Shares Value Index++ Category
3/31/2005 $ 9,450 $ 10,000 $ 10,000
Jul-05 $ 9,943 $ 10,497 $ 10,449
Jul-06 $ 10,421 $ 11,713 $ 11,312
Jul-07 $ 11,810 $ 13,291 $ 12,935
Jul-08 $ 10,062 $ 11,277 $ 10,976
Jul-09 $ 7,833 $ 8,690 $ 8,764
Jul-10 $ 9,091 $ 10,028 $ 9,881
Jul-11 $ 10,908 $ 11,708 $ 11,514
Jul-12 $ 12,339 $ 12,603 $ 12,085
++ 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 13.38% 16.48% 0.95%+ 16.81%+ 1.75% 0.90%
--------------------------------------------------------------------------------------------------------------
Class A Shares 13.12% 16.35% 0.88% 3.70% 2.00% 1.15%
--------------------------------------------------------------------------------------------------------------
Class A Shares w/load* 6.95% 14.16% -0.25% 2.91% 2.00% 1.15%
--------------------------------------------------------------------------------------------------------------
Class B Shares 12.47% 15.64% 0.23% 2.99% 2.50% 1.75%
--------------------------------------------------------------------------------------------------------------
Class B Shares w/load** 7.47% 14.89% -0.12% 2.99% 2.50% 1.75%
--------------------------------------------------------------------------------------------------------------
Class C Shares 12.40% 15.63% 0.21% 3.14% 2.50% 1.75%
--------------------------------------------------------------------------------------------------------------
Class C Shares w/load*** 11.40% 15.63% 0.21% 3.14% 2.50% 1.75%
--------------------------------------------------------------------------------------------------------------
Russell 1000 Value Index 7.64% 13.19% -1.06% 3.21% -- --
--------------------------------------------------------------------------------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. RETURNS SHOWN IN THE GRAPH
AND THE TABLE DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY
ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. THE RETURNS FOR CERTAIN
PERIODS REFLECT FEE WAIVERS AND/OR REIMBURSEMENTS IN EFFECT FOR THAT PERIOD;
ABSENT FEE WAIVERS AND REIMBURSEMENTS, PERFORMANCE WOULD HAVE BEEN LOWER.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, SO SHARES, WHEN REDEEMED,
MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE
LOWER OR HIGHER THAN THE RETURNS QUOTED. 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, 2011 and ending on November 30, 2012. 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 9
TOP TEN HOLDINGS
% OF
COMPANY* PORTFOLIO
DICK'S SPORTING GOODS 3.0%
IHS, CL A 2.8
PANERA BREAD, CL A 2.8
CHURCH & DWIGHT 2.8
LKQ 2.6
TRACTOR SUPPLY 2.6
STERICYCLE 2.6
INTUIT 2.5
CERNER 2.5
O'REILLY AUTOMOTIVE 2.4
FUND SECTORS
% OF
SECTOR PORTFOLIO
INFORMATION TECHNOLOGY 22.2%
INDUSTRIAL 20.6
CONSUMER DISCRETIONARY 18.9
HEALTH CARE 14.2
ENERGY 8.2
FINANCIALS 6.3
CONSUMER STAPLES 5.4
REGISTERED INVESTMENT COMPANY 2.6
MATERIALS 1.6
* Excludes short-term securities.
Current and future portfolio holdings are subject to change and risk.
GENEVA MID CAP GROWTH FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2012, HighMark Geneva Mid Cap Growth Fund
(the "Fund") produced a total return of 4.46% (Class A Shares without load). In
comparison, the Fund's benchmark, the unmanaged Russell Mid Cap Growth index,
returned 0.67% for the same period.
FACTORS AFFECTING PERFORMANCE
The Fund's reporting period was generally marked by volatility, challenging
global conditions and a slow-growth economic recovery. Concerns over the
European sovereign debt crisis, particularly in relation to Greece, Italy and
Spain, persisted due to the possibility that a systemic event similar to the
Lehman Brothers collapse in 2008 would occur. These fears were exacerbated by a
downward revision in expectations for growth in the United States, as well as
fears that the country would once again enter a recession.
At the beginning of the Fund's reporting period, a volatile domestic political
situation led to a historic downgrade of United States government debt. Market
volatility reached a peak and then subsided in November 2011 on news that
European financial institutions would have access to additional government funds
and that the United States potentially avoided a recession. However, fears
resurfaced in May 2012 over the fiscal solvency of Italy and Spain, and
volatility returned to global markets toward the latter part of the reporting
period.
Sectors that contributed to performance include an equal weight to the consumer
discretionary sector, as well as an overweight to the industrials sector. An
overweight to the underperforming energy sector detracted from performance.
The Fund benefited from several stocks that performed extremely well in the
consumer discretionary sector, including O'Reilly Automotive, Tractor Supply
Co., Panera Bread, Dick's Sporting Goods and recycled auto parts supplier LKQ
Corp. In each case, their execution was excellent and resulted in a very
diversified portfolio.
Performance was hurt by CARBO Ceramics in the energy sector and Illumina in the
health care sector, (both of which were sold within the reporting period).
However, the Fund was able to overcome these factors and outperformed its
benchmark for the reporting period.
10 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 MIDCAP GROWTH INDEX AND MORNINGSTAR MIDCAP
GROWTH CATEGORY.
[LINE GRAPH]
Geneva Mid
Cap Growth Morningstar
Fund Class A Russell Midcap Midcap Growth
Shares Growth Index++ Category
Jul-02 $ 9,450 $ 10,000 $ 10,000
Jul-03 $ 10,414 $ 12,315 $ 11,563
Jul-04 $ 12,053 $ 14,136 $ 12,799
Jul-05 $ 15,043 $ 17,762 $ 15,665
Jul-06 $ 15,423 $ 18,292 $ 16,038
Jul-07 $ 17,548 $ 22,206 $ 19,491
Jul-08 $ 17,325 $ 20,447 $ 17,943
Jul-09 $ 14,395 $ 15,976 $ 13,854
Jul-10 $ 17,162 $ 19,198 $ 16,374
Jul-11 $ 21,765 $ 24,763 $ 20,741
Jul-12 $ 22,736 $ 24,929 $ 22,392
++ 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 4.70% 16.78% 5.49%+ 9.27%+ 1.29% 1.13%
--------------------------------------------------------------------------------------------------------------
Class A Shares 4.46% 16.45% 5.32% 9.18% 1.54% 1.38%
--------------------------------------------------------------------------------------------------------------
Class A Shares w/load* -1.28% 14.27% 4.13% 8.56% 1.54% 1.38%
--------------------------------------------------------------------------------------------------------------
Class B Shares 3.77% 15.77% 4.63% 8.41% 2.04% 1.98%
--------------------------------------------------------------------------------------------------------------
Class B Shares w/load** -1.23% 15.02% 4.30% 8.41% 2.04% 1.98%
--------------------------------------------------------------------------------------------------------------
Class C Shares 3.77% 15.76% 4.62% 8.41% 2.04% 1.98%
--------------------------------------------------------------------------------------------------------------
Class C Shares w/load*** 2.77% 15.76% 4.62% 8.41% 2.04% 1.98%
--------------------------------------------------------------------------------------------------------------
Russell Mid Cap Growth Index 0.67% 15.99% 2.34% 9.57% -- --
--------------------------------------------------------------------------------------------------------------
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. CURRENT PERFORMANCE MAY BE
LOWER OR HIGHER THAN THE RETURNS QUOTED. 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, 2011 and ending on November 30, 2012. 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
TEXAS CAPITAL BANCSHARES 3.0%
TYLER TECHNOLOGIES 3.0
HIBBETT SPORTS 2.9
MEDIDATA SOLUTIONS 2.8
VITAMIN SHOPPE 2.5
HMS HOLDINGS 2.5
ULTIMATE SOFTWARE GROUP 2.4
ALLEGIANT TRAVEL 2.4
HEALTHCARE SERVICES GROUP 2.4
MWI VETERINARY SUPPLY 2.3
FUND SECTORS
% OF
SECTOR PORTFOLIO
HEALTH CARE 21.4%
INDUSTRIAL 19.9
INFORMATION TECHNOLOGY 19.5
CONSUMER DISCRETIONARY 15.5
FINANCIALS 7.0
ENERGY 6.6
REGISTERED INVESTMENT COMPANY 3.5
MATERIALS 3.5
CONSUMER STAPLES 3.1
* Excludes short-term securities.
Current and future portfolio holdings are subject to change and risk.
GENEVA SMALL CAP GROWTH FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2012, HighMark Geneva Small Cap Growth Fund
(the "Fund") produced a total return of 4.69% (Class A Shares without load). In
comparison, the Fund's benchmark, the unmanaged Russell 2000 Growth Index,
returned -0.51% for the same period.
FACTORS AFFECTING PERFORMANCE
The Fund's reporting period was generally marked by volatility, challenging
global conditions and a slow-growth economic recovery. Concerns over the
European sovereign debt crisis, particularly in relation to Greece, Italy and
Spain, persisted due to the possibility that a systemic event similar to the
Lehman Brothers collapse in 2008 would occur. These fears were exacerbated by a
downward revision in expectations for growth in the United States, as well as
fears that the country would once again enter a recession.
At the beginning of the Fund's reporting period, a volatile domestic political
situation led to a historic downgrade of United States government debt. Market
volatility reached a peak and then subsided in November 2011 on news that
European financial institutions would have access to additional government funds
and that the United States potentially avoided a recession. However, fears
resurfaced in May 2012 over the fiscal solvency of Italy and Spain, and
volatility returned to global markets toward the latter part of the reporting
period.
An overweight to the consumer discretionary and industrial sectors, as well as a
slight overweight to the health care sector, contributed to the Fund's
performance. An overweight to the underperforming information technology sector,
as well as an underweight to the consumer staples sector, detracted from
performance.
Interestingly, the Fund's top contributor by company was Ultimate Software in
the information technology sector, even though the sector hurt performance
overall. Ulta Salon and Hibbett Sports in the consumer discretionary sector also
contributed to performance, as did Allegiant Travel Company in industrials and
Medidata Solutions in the health care sector.
Companies that detracted most from performance include Acme Packet in the
information technology sector. Although the health care sector contributed to
performance overall, electronic health records provider Quality Systems was the
Fund's worst stock performer, which reflected market volatility during the
period.
Despite this slight drag on performance, the Fund outperformed its benchmark for
the reporting period.
12 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 Fund Russell 2000 Small Growth
Class A Shares Growth Index++ Category
Jun-09 $ 9,450 $ 10,000 $ 10,000
Jul-09 $ 9,781 $ 10,483 $ 10,491
Aug-09 $ 9,771 $ 10,586 $ 10,665
Sep-09 $ 10,338 $ 11,281 $ 11,381
Oct-09 $ 9,941 $ 10,497 $ 10,709
Nov-09 $ 10,224 $ 10,822 $ 11,071
Dec-09 $ 10,829 $ 11,748 $ 11,938
Jan-10 $ 10,305 $ 11,223 $ 11,413
Jul-10 $ 11,524 $ 12,236 $ 12,281
Jan-11 $ 14,509 $ 15,081 $ 15,240
Jul-11 $ 15,085 $ 15,823 $ 15,906
Jan-12 $ 15,450 $ 15,826 $ 15,607
Jul-12 $ 16,175 $ 15,745 $ 15,257
++ 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 4.99% 17.64% 18.12% 2.01% 1.38%
-----------------------------------------------------------------------------------------------
Class A Shares 4.69% 17.32% 17.81% 2.26% 1.63%
-----------------------------------------------------------------------------------------------
Class A Shares w/load* -1.08% 15.14% 15.70% 2.26% 1.63%
-----------------------------------------------------------------------------------------------
Class C Shares 4.09% 16.64% 17.13% 2.76% 2.23%
-----------------------------------------------------------------------------------------------
Class C Shares w/load** 3.09% 16.64% 17.13% 2.76% 2.23%
-----------------------------------------------------------------------------------------------
Russell 2000 Growth Index -0.51% 14.51% 15.58% -- --
-----------------------------------------------------------------------------------------------
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. CURRENT PERFORMANCE MAY BE
LOWER OR HIGHER THAN THE RETURNS QUOTED. 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, 2011 and ending on November 30, 2012. 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 13
TOP TEN HOLDINGS
% OF
COMPANY* PORTFOLIO
ANHEUSER-BUSCH INBEV NV 1.9%
ROYAL DUTCH SHELL, CL B 1.4
TURKIYE HALK BANKASI 1.4
ECOPETROL, SP ADR 1.2
UNILEVER 1.1
PETROFAC 1.1
NESTLE 1.0
COMMONWEALTH BANK OF AUSTRALIA 1.0
ASTRAZENECA 0.9
ROCHE HOLDING 0.9
FUND SECTORS
% OF
SECTOR PORTFOLIO
FINANCIALS 22.5%
INDUSTRIAL 12.5
CONSUMER DISCRETIONARY 11.3
CONSUMER STAPLES 10.7
MATERIALS 8.6
ENERGY 7.7
HEALTH CARE 7.4
TELECOMMUNICATION SERVICES 6.6
INFORMATION TECHNOLOGY 5.0
REPURCHASE AGREEMENT 4.0
UTILITIES 2.8
REGISTERED INVESTMENT COMPANY 0.9
* Excludes short-term securities.
Current and future portfolio holdings are subject to change and risk.
INTERNATIONAL OPPORTUNITIES FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2012, HighMark International Opportunities
Fund (the "Fund") produced a total return of -13.57% (Class A Shares without
load). In comparison, the Fund's benchmarks, the unmanaged MSCI All-Country
World ex-U.S. Index Gross and the unmanaged MSCI EAFE Index Net, ("EAFE")
returned -11.73% and -11.45% respectively for the same period.
FACTORS AFFECTING PERFORMANCE
A turbulent twelve months for global equity markets started off on the wrong
foot with Standard and Poor's downgrade of U.S. government debt in early August
2011. Selling pressure intensified during the fall as concern over the European
sovereign debts crisis- and the likelihood of a Greek default - occupied
investors' attention. The market's tone improved markedly in the early part of
2012 on the back of the European Central Bank's change in leadership and
initiation of its Long-Term Refinancing Operation. The markets took Greece's
March 2012 default on its debts in stride because the default was handled in an
orderly fashion and holders of credit default swaps were properly paid. Spain
and its banking system then replaced Greece for a while at the top of the
anxiety list. However, the reporting period ended on an optimistic note as the
president of the European Central Bank vowed to preserve the euro and expand the
purchase of member nations' government bonds.
With relatively few exceptions, global equity markets ended the reporting period
with losses (as measured by each country or geographic region's respective MSCI
index given in U.S. dollar terms, net dividends). For most, severe losses in
August to September 2011 were followed by partial recovery. Nearly all foreign
currencies weakened against the U.S. dollar as capital fled Europe and sought
safe harbor in U.S. treasuries.
The dispersion of country returns within overseas developed markets was again
(as in the prior reporting period) influenced by perceived sovereign risk.
Denmark, Ireland (rewarded for its austerity efforts) and Belgium were among the
best performing developed markets. Portugal, Italy, Greece, Spain, Austria and
Finland were the weakest performing developed markets. All of these poor
performing countries' stock markets were down 25% to 40% during the reporting
period, except for Greece. Eastern Europe, facing banking and contagion risk
from the west, was well represented among the emerging markets' bottom
performers.
The Fund underperformed its benchmarks at the end of the reporting period.
Country allocation contributed positively to the Fund's return (thanks to very
strong results in 2012), but not enough to compensate for negative stock
selection. Within the developed markets, the Fund tended to overweight the
better performing Pacific ex-Japan countries at the expense of the Eurozone. The
Fund's models also distinguished well between "good" and "bad" Europe, favoring
Belgium and Ireland over Portugal, Italy, Greece and Spain. Among emerging
markets, an overweight position in Turkey and a well-timed switch from Brazil to
Colombia added value. With global volatility rising from a below-average to
slightly above-average level, the Fund's country models came to place less
emphasis on momentum and more on valuation and risk characteristics.
The Fund's stock selection factors had an extremely difficult time handling last
year's sharp August to September 2011 downturn. While earnings quality and price
momentum held steady, neither hurting nor helping much, value factors
contributed to the Fund's shortfall in performance. Perceived value represented
a trap to the investor rather than an opportunity; smaller capitalization,
higher volatility, and pro-cyclical names were also severely punished. As the
Fund's stock selection process places a particular emphasis on value in Asian
markets, this was the region - primarily Hong Kong and Japan, but also China and
Korea - where the negative impact on performance was the greatest. Stock
selection results were better in the first seven months of 2012. Although value
continued to underperform, earnings quality and momentum were strong enough to
add value in Europe, where the stock selection process places more emphasis on
quality and momentum than on valuation.
14 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 MSCI EAFE INDEX NET AND THE MORNINGSTAR FOREIGN LARGE BLEND CATEGORY.
[LINE GRAPH]
HighMark
International
Opportunities MCSI All Country Morningstar
Fund Class A World ex-U.S. MCSI EAFE Foreign Large
Shares+ Index Gross++ Index Net++ Blend Category++
Jul-02 $ 9,450 $ 10,000 $ 10,000 $ 10,000
Jul-03 $ 10,415 $ 10,852 $ 10,630 $ 10,777
Jul-04 $ 12,856 $ 13,549 $ 13,293 $ 13,373
Jul-05 $ 16,227 $ 16,853 $ 16,092 $ 16,534
Jul-06 $ 20,704 $ 21,000 $ 19,956 $ 20,366
Jul-07 $ 26,708 $ 26,869 $ 24,728 $ 25,171
Jul-08 $ 23,957 $ 24,370 $ 21,713 $ 22,309
Jul-09 $ 17,783 $ 19,277 $ 16,806 $ 17,180
Jul-10 $ 19,213 $ 21,228 $ 17,858 $ 18,428
Jul-11 $ 23,065 $ 25,019 $ 20,924 $ 21,610
Jul-12 $ 19,935 $ 22,084 $ 18,529 $ 19,095
++ Indexes are unmanaged and do not incur fees, expenses or other
costs.
^ Index does not reflect deduction for taxes.
------------------------------------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED GROSS NET
ONE YEAR 3 YEAR 5 YEAR 10 YEAR EXPENSE EXPENSE
RETURN RETURN RETURN RETURN RATIO++ RATIO++
------------------------------------------------------------------------------------------------------------------------
Fiduciary Shares -13.35% 4.02% -5.53% 7.96%+ 1.52% 1.27%
------------------------------------------------------------------------------------------------------------------------
Class A Shares -13.57% 3.88% -5.69% 7.75%+ 1.77% 1.42%
------------------------------------------------------------------------------------------------------------------------
Class A Shares w/load* -18.28% 1.93% -6.76% 7.15%+ 1.77% 1.42%
------------------------------------------------------------------------------------------------------------------------
Class C Shares -14.07% 3.21% -6.31% 7.07%+ 2.27% 2.12%
------------------------------------------------------------------------------------------------------------------------
Class C Shares w/load** -14.92% 3.21% -6.31% 7.07%+ 2.27% 2.12%
------------------------------------------------------------------------------------------------------------------------
Class M Shares -13.28% 4.18% -5.41% 8.11% 1.27% 1.12%
------------------------------------------------------------------------------------------------------------------------
MSCI All Country World ex-U.S. Index Gross -11.73% 4.63% -3.85% 8.46% -- --
------------------------------------------------------------------------------------------------------------------------
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. CURRENT PERFORMANCE MAY BE
LOWER OR HIGHER THAN THE RETURNS QUOTED. 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, 2011 and ending on November 30, 2012. 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 15
TOP TEN HOLDINGS
% OF
COMPANY* PORTFOLIO
APPLE 4.9%
EXXONMOBIL 4.3
PROCTER & GAMBLE 3.6
COCA-COLA 3.3
WELLS FARGO 3.3
CHEVRON 2.8
PHILIP MORRIS INTERNATIONAL 2.7
GENERAL ELECTRIC 2.7
HOME DEPOT 2.4
PFIZER 2.3
FUND SECTORS
% OF
SECTOR PORTFOLIO
INFORMATION TECHNOLOGY 19.9%
FINANCIALS 15.5
CONSUMER STAPLES 13.1
HEALTH CARE 12.5
ENERGY 12.4
CONSUMER DISCRETIONARY 8.6
INDUSTRIAL 8.2
MATERIALS 4.2
UTILITIES 3.2
TELECOMMUNICATION SERVICES 1.6
REPURCHASE AGREEMENT 0.8
* Excludes short-term securities.
Current and future portfolio holdings are subject to change and risk.
LARGE CAP CORE EQUITY FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2012, HighMark Large Cap Core Equity Fund
(the "Fund") produced a total return of 9.12% (Class A Shares without load). In
comparison, the Fund's benchmark, the unmanaged S&P 500 Index, returned 9.13%
over the same period.
FACTORS AFFECTING PERFORMANCE
The Fund's reporting period was generally marked by volatility, challenging
global conditions and a slow-growth economic recovery. Concerns over the
European sovereign debt crisis, particularly in relation to Greece, Italy and
Spain, persisted due to the possibility that a systemic event similar to the
Lehman Brothers collapse in 2008 would occur. These fears were exacerbated by a
downward revision in expectations for growth in the United States, as well as
fears that the country would once again enter a recession.
At the beginning of the Fund's reporting period, a volatile domestic political
situation led to a historic downgrade of United States government debt. Market
volatility reached a peak and then subsided in November 2011 on news that
European financial institutions would have access to additional government funds
and that the United States potentially avoided a recession. However, fears
resurfaced in May 2012 over the fiscal solvency of Italy and Spain, and
volatility returned to global markets toward the latter part of the reporting
period.
An overweight and underweight to the materials sector at opportune moments
throughout the Fund's reporting period contributed to performance, as did an
underweight to the consumer discretionary sector, which underperformed relative
to the benchmark.
An overweight to the consumer staples sector, which underperformed relative to
the benchmark, detracted from the Fund's performance, as did an underweight to
the strongly performing financial sector.
Companies that contributed to performance include Apple, EBay and IBM. The top
detractor from performance was electronic payment processing company GPN Global
Payment.
Unfortunately, the Fund was not able to overcome these drags on performance, and
it underperformed its benchmark for the reporting period.
16 HIGHMARK(R) FUNDS
HIGHMARK LARGE CAP CORE EQUITY FUND INVESTMENT OBJECTIVE
HIGHMARK LARGE CAP 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 LARGE CAP
CORE EQUITY FUND VERSUS THE S&P 500 INDEX AND THE MORNINGSTAR LARGE VALUE
CATEGORY.
[LINE GRAPH]
HighMark Large
Cap Core Equity
Fund Class A S&P 500 Morningstar Large
Shares Index++ Value Category
Jul-02 $ 9,450 $ 10,000 $ 10,000
Jul-03 $ 10,292 $ 11,064 $ 10,864
Jul-04 $ 11,267 $ 12,521 $ 12,533
Jul-05 $ 12,542 $ 14,285 $ 14,527
Jul-06 $ 13,690 $ 15,054 $ 15,727
Jul-07 $ 15,639 $ 17,484 $ 17,983
Jul-08 $ 13,379 $ 15,545 $ 15,259
Jul-09 $ 10,726 $ 12,442 $ 12,184
Jul-10 $ 12,257 $ 14,164 $ 13,738
Jul-11 $ 14,481 $ 16,947 $ 16,007
Jul-12 $ 15,802 $ 18,494 $ 16,713
++ 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 9.39% 14.13% 0.47% 5.55% 1.23% 0.97%
------------------------------------------------------------------------------------------------
Class A Shares 9.12% 13.78% 0.21% 5.28% 1.48% 1.22%
------------------------------------------------------------------------------------------------
Class A Shares w/load* 3.15% 11.66% -0.93% 4.68% 1.48% 1.22%
------------------------------------------------------------------------------------------------
Class C Shares 8.47% 13.09% -0.47% 4.72%+ 1.98% 1.82%
------------------------------------------------------------------------------------------------
Class C Shares w/load** 7.47% 13.09% -0.47% 4.72%+ 1.98% 1.82%
------------------------------------------------------------------------------------------------
S&P 500 Index 9.13% 14.13% 1.13% 6.34% -- --
------------------------------------------------------------------------------------------------
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. CURRENT PERFORMANCE MAY BE
LOWER OR HIGHER THAN THE RETURNS QUOTED. 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, 2011 and ending on November 30, 2012. 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
APPLE 10.6%
COCA-COLA 5.5
PRAXAIR 4.6
ECOLAB 4.4
ANHEUSER-BUSCH INBEV NV, SP ADR 4.0
QUALCOMM 3.7
EMC 3.4
PHILIP MORRIS INTERNATIONAL 3.2
DANAHER 3.0
AMERICAN TOWER REIT 2.9
FUND SECTORS
% OF
SECTOR PORTFOLIO
INFORMATION TECHNOLOGY 27.9%
CONSUMER STAPLES 15.6
CONSUMER DISCRETIONARY 13.6
INDUSTRIAL 13.4
MATERIALS 8.9
ENERGY 8.9
HEALTH CARE 5.7
FINANCIALS 2.9
UTILITIES 2.1
REGISTERED INVESTMENT COMPANY 1.0
* Excludes short-term securities.
Current and future portfolio holdings are subject to change and risk.
LARGE CAP GROWTH FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2012, HighMark Large Cap Growth Fund (the
"Fund") produced a total return of 10.97% (Class A Shares without load). In
comparison, the Fund's benchmark, the unmanaged Russell 1000 Growth Index,
returned 8.26% over the same period.
FACTORS AFFECTING PERFORMANCE
The Fund's reporting period was generally marked by volatility, challenging
global conditions and a slow-growth economic recovery. Concerns over the
European sovereign debt crisis, particularly in relation to Greece, Italy and
Spain, persisted due to the possibility that a systemic event similar to the
Lehman Brothers collapse in 2008 would occur. These fears were exacerbated by a
downward revision in expectations for growth in the United States, as well as
fears that the country would once again enter a recession.
At the beginning of the Fund's reporting period, a volatile domestic political
situation led to a historic downgrade of United States government debt. Market
volatility reached a peak and then subsided in November 2011 on news that
European financial institutions would have access to additional government funds
and that the United States potentially avoided a recession. However, fears
resurfaced in May 2012 over the fiscal solvency of Italy and Spain, and
volatility returned to global markets toward the latter part of the reporting
period.
The two largest contributors by sector to the Fund's performance were
industrials and consumer discretionary. The largest detractor from the Fund's
performance on a sector basis was information technology.
Specific stocks that contributed to performance were transportation logistics
company J.B. Hunt, filtration systems maker Donaldson and industrial supplier
W.W. Grainger. In the consumer discretionary sector, contributors include
Petsmart, Sally Beauty Holdings and Dick's Sporting Goods.
The Fund's largest detractors from performance include Acme Packet, ARM Holdings
and Riverbed Technologies in the information technology sector, and positions in
Acme Packet and Riverbed were sold during the reporting period. Despite these
slight drags on performance, the Fund outperformed its benchmark.
18 HIGHMARK(R) FUNDS
HIGHMARK LARGE CAP GROWTH FUND INVESTMENT OBJECTIVE
HIGHMARK LARGE CAP GROWTH FUND SEEKS LONG-TERM CAPITAL APPRECIATION THROUGH
INVESTMENTS IN U.S. EQUITY SECURITIES; CURRENT INCOME IS INCIDENTAL.
[PHOTO OF KEN WEMER]
CO-PORTFOLIO MANAGER
KEN WEMER
HIGHMARK CAPITAL MANAGEMENT, INC.
[PHOTO OF GEORGE ROKAS]
CO-PORTFOLIO MANAGER
GEORGE ROKAS
HIGHMARK CAPITAL MANAGEMENT, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK LARGE CAP
GROWTH FUND VERSUS THE RUSSELL 1000 GROWTH INDEX AND THE MORNINGSTAR LARGE
GROWTH CATEGORY.
[LINE GRAPH]
HighMark Large
Cap Growth
Fund Class A Russell 1000 Morningstar Large
Shares Growth Index++ Growth Category
Jul-02 $ 9,450 $ 10,000 $ 10,000
Jul-03 $ 10,444 $ 11,163 $ 11,127
Jul-04 $ 10,794 $ 12,113 $ 11,889
Jul-05 $ 12,398 $ 13,695 $ 13,655
Jul-06 $ 12,623 $ 13,591 $ 13,607
Jul-07 $ 14,407 $ 16,236 $ 16,058
Jul-08 $ 13,122 $ 15,215 $ 14,978
Jul-09 $ 11,388 $ 12,542 $ 11,981
Jul-10 $ 12,810 $ 14,254 $ 13,394
Jul-11 $ 15,136 $ 17,783 $ 16,487
Jul-12 $ 16,796 $ 19,252 $ 16,909
++ 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 11.25% 14.12% 3.38% 6.21% 1.25% 1.03%
-------------------------------------------------------------------------------------------------
Class A Shares 10.97% 13.83% 3.12% 5.92% 1.50% 1.28%
-------------------------------------------------------------------------------------------------
Class A Shares w/load* 4.86% 11.70% 1.96% 5.32% 1.50% 1.28%
-------------------------------------------------------------------------------------------------
Class B Shares 10.35% 13.12% 2.51% 5.29% 2.00% 1.88%
-------------------------------------------------------------------------------------------------
Class B Shares w/load** 5.35% 12.33% 2.15% 5.29% 2.00% 1.88%
-------------------------------------------------------------------------------------------------
Class C Shares 10.34% 13.15% 2.51% 5.29% 2.00% 1.88%
-------------------------------------------------------------------------------------------------
Class C Shares w/load*** 9.34% 13.15% 2.51% 5.29% 2.00% 1.88%
-------------------------------------------------------------------------------------------------
Russell 1000 Growth Index 8.26% 15.35% 3.46% 6.77% -- --
-------------------------------------------------------------------------------------------------
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. CURRENT PERFORMANCE MAY BE
LOWER OR HIGHER THAN THE RETURNS QUOTED. 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, 2011 and ending on November 30, 2012. 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 19
TOP TEN HOLDINGS
% OF
COMPANY* PORTFOLIO
INTERNATIONAL BUSINESS MACHINES 5.3%
BIOGEN IDEC 3.9
SALESFORCE.COM 3.4
F5 NETWORKS 2.5
VMWARE, CL A 2.4
LOCKHEED MARTIN 2.4
AMGEN 2.2
CITRIX SYSTEMS 2.0
SCHLUMBERGER 1.9
TERADATA 1.8
FUND SECTORS
% OF
SECTOR PORTFOLIO
INFORMATION TECHNOLOGY 70.2%
HEALTH CARE 21.5
INDUSTRIAL 3.9
ENERGY 1.9
TELECOMMUNICATION SERVICES 1.7
REGISTERED INVESTMENT COMPANY 0.8
* Excludes short-term securities.
Current and future portfolio holdings are subject to change and risk.
NYSE ARCA TECH 100 INDEX FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2012, HighMark NYSE Arca Tech 100 Index Fund
(the "Fund") produced a total return of 7.05% (Class A Shares without load). In
comparison, the Fund's benchmark, the NYSE Arca Tech 100 Index, returned 8.17%
for the same period.
FACTORS AFFECTING PERFORMANCE
The Fund's reporting period was generally marked by volatility, challenging
global conditions and a slow-growth economic recovery. Concerns over the
European sovereign debt crisis, particularly in relation to Greece, Italy and
Spain, persisted due to the possibility that a systemic event similar to the
Lehman Brothers collapse in 2008 would occur. These fears were exacerbated by a
downward revision in expectations for growth in the United States, as well as
fears that the country would once again enter a recession.
At the beginning of the Fund's reporting period, a volatile domestic political
situation led to a historic downgrade of United States government debt. Market
volatility reached a peak and then subsided in November 2011 on news that
European financial institutions would have access to additional government funds
and that the United States potentially avoided a recession. However, fears
resurfaced in May 2012 over the fiscal solvency of Italy and Spain, and
volatility returned to global markets toward the latter part 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.
Top contributors by sector include computer and peripherals, which contributed
4.18% to the Fund's performance. Biotechnology contributed 2.30% to the Fund's
performance. Aerospace and defense contributed 1.75% to the Fund's performance.
Top detractors by sector include communications equipment, which subtracted
1.22% from the Fund's performance. The software sector detracted 0.72% from the
Fund's performance. Lastly, life science tools and services subtracted 0.20%
from the Fund's performance.
Companies that contributed to performance include Apple Inc., which contributed
4.56% to the Fund's performance. Biogen Idec Inc. contributed 1.17% to the
Fund's performance, and Goodrich Corp. contributed 0.93% to the Fund's
performance.
Companies that detracted from performance include wireless communications
technology provider Interdigital Inc., which subtracted 1.04% from the Fund's
performance. Software provider Salesforce.com Inc. subtracted 0.70% from the
Fund's performance. Lastly, Open Text Corp. subtracted 0.61% from the Fund's
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.
20 HIGHMARK(R) FUNDS
HIGHMARK NYSE ARCA TECH 100 INDEX FUND INVESTMENT OBJECTIVE
HIGHMARK NYSE ARCA TECH 100 INDEX FUND SEEKS TO TRACK THE TOTAL RETURN OF THE
NYSE ARCA TECH 100 INDEX, BEFORE DEDUCTING FOR FUND EXPENSES.
[PHOTO OF DONALD NESBITT]
LEAD PORTFOLIO MANAGER
DONALD NESBITT
ZIEGLER LOTSOFF CAPITAL MANAGEMENT, LLC
[PHOTO OF MIKHAIL ALKHAZOV]
PORTFOLIO MANAGER
MIKHAIL ALKHAZOV
ZIEGLER LOTSOFF 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 Fund Class NYSE Arca Tech Technology
A Shares 100 Index++ Category
Jul-02 $ 9,450 $ 10,000 $ 10,000
Jul-03 $ 12,274 $ 13,127 $ 12,673
Jul-04 $ 13,843 $ 14,965 $ 13,327
Jul-05 $ 16,435 $ 17,952 $ 15,575
Jul-06 $ 15,610 $ 17,226 $ 15,167
Jul-07 $ 18,921 $ 21,080 $ 19,334
Jul-08 $ 17,746 $ 19,956 $ 17,298
Jul-09 $ 15,535 $ 17,701 $ 15,331
Jul-10 $ 18,048 $ 20,741 $ 17,822
Jul-11 $ 22,591 $ 26,399 $ 21,877
Jul-12 $ 24,184 $ 28,566 $ 21,791
++ 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 7.35% 16.22% 5.21%+ 9.94%+ 1.02% 0.83%
-----------------------------------------------------------------------------------------------------------------
Class A Shares 7.05% 15.90% 5.03% 9.85% 1.27% 1.08%
-----------------------------------------------------------------------------------------------------------------
Class A Shares w/load* 1.15% 13.74% 3.85% 9.23% 1.27% 1.08%
-----------------------------------------------------------------------------------------------------------------
Class B Shares 6.40% 15.21% 4.33% 9.08% 1.77% 1.68%
-----------------------------------------------------------------------------------------------------------------
Class B Shares w/load** 1.40% 14.45% 3.99% 9.08% 1.77% 1.68%
-----------------------------------------------------------------------------------------------------------------
Class C Shares 6.42% 15.21% 4.34% 9.08% 1.77% 1.68%
-----------------------------------------------------------------------------------------------------------------
Class C Shares w/load*** 5.42% 15.21% 4.34% 9.08% 1.77% 1.68%
-----------------------------------------------------------------------------------------------------------------
NYSE Arca Tech 100 Index 8.21% 17.30% 6.27% 11.07% -- --
-----------------------------------------------------------------------------------------------------------------
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. CURRENT PERFORMANCE MAY BE
LOWER OR HIGHER THAN THE RETURNS QUOTED. 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, 2011 and ending on November 30, 2012. 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 21
TOP TEN HOLDINGS
% OF
COMPANY* PORTFOLIO
PIER 1 IMPORTS 2.1%
PRIMERICA 2.1
AUXILIUM PHARMACEUTICALS 1.9
PNM RESOURCES 1.9
MANHATTAN ASSOCIATES 1.8
EXTRA SPACE STORAGE REIT 1.8
POST PROPERTIES REIT 1.6
CLEAN HARBORS 1.6
MONTPELIER RE HOLDINGS 1.5
SUNSTONE HOTEL INVESTORS REIT 1.3
FUND SECTORS
% OF
SECTOR PORTFOLIO
FINANCIALS 24.0%
INFORMATION TECHNOLOGY 18.7
CONSUMER DISCRETIONARY 14.4
INDUSTRIAL 14.4
HEALTH CARE 11.0
ENERGY 6.0
MATERIALS 5.3
UTILITIES 3.0
REPURCHASE AGREEMENT 1.7
CONSUMER STAPLES 1.5
* Excludes short-term securities.
Current and future portfolio holdings are subject to change and risk.
SMALL CAP CORE FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2012, HighMark Small Cap Core Fund (the
"Fund") produced a total return of -0.52% (Class A Shares without load). In
comparison, the Fund's benchmark, the unmanaged Russell 2000 Index, returned
0.19% for the same period.
FACTORS AFFECTING PERFORMANCE
The Fund's reporting period was generally marked by market volatility,
challenging global conditions and a slow-growth economic recovery. Concerns over
the European sovereign debt crisis, particularly in relation to Greece, Italy
and Spain, persisted due to the possibility that a systemic event similar to the
Lehman Brothers collapse in 2008 would occur. These fears were exacerbated by a
downward revision in expectations for growth in the United States, as well as
fears that the country would once again enter a recession.
At the beginning of the Fund's reporting period, a volatile domestic political
situation led to a historic downgrade of United States government debt. Market
volatility reached a peak and then subsided in November 2011 after news that
European financial institutions would have access to additional government funds
and that the United States potentially avoided a recession. However, fears
resurfaced in May 2012 over the fiscal solvency of Italy and Spain, and
volatility returned to global markets toward the latter part of the reporting
period.
Sectors that contributed most to performance include an overweight to the
consumer discretionary and financials sectors.
An underweight to the outperforming health care sector, as well as an overweight
to the underperforming technology sector, detracted from performance.
Auxilium Pharmaceuticals Inc., Smith and Wesson and Extra Space Storage were top
contributing companies to performance, while freight transportation provider
Arkansas Best Corp., as well as Arbitron Radio Ratings and Media Research, were
top detractors from performance.
Unfortunately, the Fund was not able to overcome these drags on performance, and
it underperformed its benchmark for the reporting period.
22 HIGHMARK(R) FUNDS
HIGHMARK SMALL CAP CORE FUND INVESTMENT OBJECTIVE
HIGHMARK SMALL CAP CORE 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 SMALL CAP
CORE FUND VERSUS THE RUSSELL 2000 INDEX AND THE MORNINGSTAR SMALL BLEND
CATEGORY.
[LINE GRAPH]
HighMark Small Morningstar
Cap Core Fund Small Blend Russell 2000
Class A Shares Category Index++
3/1/2007 $ 9,452 $ 10,000 $ 10,000
Jul-07 $ 8,894 $ 10,038 $ 9,861
Jul-08 $ 7,850 $ 8,934 $ 9,199
Jul-09 $ 5,646 $ 7,110 $ 7,293
Jul-10 $ 6,936 $ 8,433 $ 8,637
Jul-11 $ 9,156 $ 10,460 $ 10,703
Jul-12 $ 9,109 $ 10,335 $ 12,737
++ 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 -0.21% 17.65% 0.77% -0.40% 1.77% 1.38%
-----------------------------------------------------------------------------------------------------------------
Class A Shares -0.52% 17.28% 0.48% -0.68% 2.02% 1.63%
-----------------------------------------------------------------------------------------------------------------
Class A Shares w/load* -5.99% 15.08% -0.66% -1.71% 2.02% 1.63%
-----------------------------------------------------------------------------------------------------------------
Class C Shares -1.07% 16.60% -0.23% -1.34% 2.52% 2.23%
-----------------------------------------------------------------------------------------------------------------
Class C Shares w/load** -2.06% 16.60% -0.23% -1.34% 2.52% 2.23%
-----------------------------------------------------------------------------------------------------------------
Russell 2000 Index 0.19% 13.71% 1.69% 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. CURRENT PERFORMANCE MAY BE
LOWER OR HIGHER THAN THE RETURNS QUOTED. 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, 2011 and ending on November 30, 2012. 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 23
TOP TEN HOLDINGS
% OF
COMPANY* PORTFOLIO
MICROSOFT 5.0%
BERKSHIRE HATHAWAY, CL B 3.4
PHILIP MORRIS INTERNATIONAL 3.1
WELLS FARGO 2.9
CHEVRON 2.8
ORACLE 2.8
JPMORGAN CHASE 2.6
COMCAST, CL A 2.5
INTEL 2.5
TARGET 2.4
FUND SECTORS
% OF
SECTOR PORTFOLIO
FINANCIALS 17.9%
INFORMATION TECHNOLOGY 17.1
INDUSTRIAL 15.2
ENERGY 14.2
HEALTH CARE 12.1
CONSUMER DISCRETIONARY 11.7
CONSUMER STAPLES 8.4
MATERIALS 2.1
TELECOMMUNICATION SERVICES 0.8
REGISTERED INVESTMENT COMPANY 0.5
* Excludes short-term securities.
Current and future portfolio holdings are subject to change and risk.
VALUE FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2012, HighMark Value Fund (the "Fund")
produced a total return of 3.28% (Class A Shares without load). In comparison,
the Fund's benchmark, the unmanaged S&P 500 Index, returned 9.13% for the same
period.
FACTORS AFFECTING PERFORMANCE
The Fund's reporting period was marked by high correlation of stocks, driven by
domestic and global macroeconomic events such as the European sovereign debt
crisis and uncertainty in the Middle East. These macroeconomic events
contributed to higher market volatility. Typically, the Fund's performance has
been less favorable when macroeconomic events were a primary driver of portfolio
returns.
Equally important was the defensive nature of the market, as well as the sector
positioning of market participants. Given the economic uncertainty and the low
interest rate environment during the reporting period, investors sought safety
and income in defensive sectors like utilities, telecom services and consumer
staples. This resulted in extremely high valuations relative to both history and
the market. Artificially low interest rates caused unintended consequences,
including a scarcity of yield. Consequently, investors sought high income and
dividend producing equities over fixed income alternatives. Based on weak
fundamentals, low growth prospects and high valuations, the Fund was underweight
to these three sectors of the market, even though these sectors performed well,
which hurt performance overall.
The Fund maintained a higher exposure to European companies than its benchmark.
The securities of these companies were typically cheaper than their U.S.
counterparts and had greater exposure to emerging market growth. Unfortunately,
many of these companies were negatively impacted by the ongoing sovereign debt
crisis and the economic turbulence in Europe.
Stock selection in energy company Williams, as well as media companies Comcast,
Disney and News Corp., contributed most to performance. Williams and News Corp.
successfully embarked upon shareholder-friendly strategies and broke apart their
respective companies. This unlocked hidden value and, as a consequence,
investors were rewarded. Disney and Comcast benefitted from improving business
fundamentals and a recovery in relative valuation.
The main detractors from performance were Apple, Hewlett Packard and Peabody
Energy. Not owning Apple had the biggest impact on the Fund's performance
relative to its benchmark, as it was a key driver of the benchmark's performance
and, consequently, the main reason for the Fund's underperformance. Coal
producer Peabody Energy was negatively impacted by a period of low natural gas
prices and an economic slowdown in China, which is a major importer of Peabody's
Australian coal. The Fund was not able to overcome these factors and it
underperformed its benchmark for the reporting period.
24 HIGHMARK(R) FUNDS
HIGHMARK VALUE FUND INVESTMENT OBJECTIVE
HIGHMARK VALUE FUND SEEKS LONG-TERM CAPITAL GROWTH; CURRENT INCOME IS A
SECONDARY OBJECTIVE.
[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 FUND
VERSUS THE S&P 500 INDEX, THE RUSSELL 1000 VALUE INDEX AND THE MORNINGSTAR LARGE
VALUE CATEGORY.
HighMark Value Morningstar
Fund Class A Large Value Russell 1000
Shares Category Value Index++ S&P 500 Index++
Jul-02 $ 9,450 $ 10,000 $ 10,000 $ 10,000
Jul-03 $ 10,370 $ 10,849 $ 11,075 $ 11,064
Jul-04 $ 11,963 $ 12,508 $ 13,033 $ 12,521
Jul-05 $ 13,955 $ 14,484 $ 15,513 $ 14,280
Jul-06 $ 15,220 $ 15,673 $ 17,311 $ 15,049
Jul-07 $ 17,667 $ 17,914 $ 19,645 $ 17,476
Jul-08 $ 15,331 $ 15,224 $ 16,669 $ 15,538
Jul-09 $ 11,759 $ 12,156 $ 12,845 $ 12,437
Jul-10 $ 13,309 $ 13,706 $ 14,822 $ 14,158
Jul-11 $ 15,987 $ 15,970 $ 17,306 $ 16,940
Jul-12 $ 16,511 $ 16,762 $ 18,628 $ 18,486
++ 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 3.50% 12.26% -1.09% 6.01% 1.13% 1.00%
-----------------------------------------------------------------------------------------------------------------
Class A Shares 3.28% 11.98% -1.34% 5.74% 1.38% 1.25%
-----------------------------------------------------------------------------------------------------------------
Class A Shares w/load* -2.38% 9.88% -2.46% 5.14% 1.38% 1.25%
-----------------------------------------------------------------------------------------------------------------
Class B Shares 2.70% 11.31% -1.93% 5.09% 1.88% 1.85%
-----------------------------------------------------------------------------------------------------------------
Class B Shares w/load** -2.19% 10.50% -2.21% 5.09% 1.88% 1.85%
-----------------------------------------------------------------------------------------------------------------
Class C Shares 2.70% 11.34% -1.91% 5.10% 1.88% 1.85%
-----------------------------------------------------------------------------------------------------------------
Class C Shares w/load*** 1.72% 11.34% -1.91% 5.10% 1.88% 1.85%
-----------------------------------------------------------------------------------------------------------------
Class U Shares 3.65%+ 12.31%+ -1.06%+ 6.02%+ 0.88% 0.87%
-----------------------------------------------------------------------------------------------------------------
S&P 500 Index 9.13% 14.13% 1.13% 6.34% -- --
-----------------------------------------------------------------------------------------------------------------
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. CURRENT PERFORMANCE MAY BE
LOWER OR HIGHER THAN THE RETURNS QUOTED. 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 U Shares, which commenced
investment operations on January 4, 2012. Fiduciary Share performance has
not been adjusted to reflect expenses applicable to Class U 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 March 26, 2012 and ending on November 30, 2013. 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
FUND SECTORS
% OF
SECTOR PORTFOLIO
AFFILIATED EQUITY REGISTERED
INVESTMENT COMPANIES 81.3%
AFFILIATED FIXED INCOME REGISTERED
INVESTMENT COMPANIES 7.0
EQUITY REGISTERED INVESTMENT
COMPANIES 6.0
FIXED INCOME REGISTERED
INVESTMENT COMPANY 3.0
REPURCHASE AGREEMENT 2.7
Current and future portfolio holdings are subject to change and risk.
TACTICAL CAPITAL GROWTH ALLOCATION FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2012, HighMark Tactical Capital Growth
Allocation Fund (the "Fund") produced a total return of 1.52% (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 U.S. Aggregate Bond Index and the Citigroup 3-Month
U.S. Treasury Bill Index, respectively, returned 8.66% for the same period.
FACTORS AFFECTING PERFORMANCE
Domestic equities rose during the Fund's reporting period, with the S&P 500
Index returning 9.1%. Telecommunications (30.6%), Consumer Staples (19.7%) and
Utilities (19.3%) led equity indexes higher. Materials (-5.2%), Energy (-5.0%)
and Financials (1.1%) were the worst performing sectors of the equity index.
International stocks (MSCI EAFE) trailed domestic equities losing 11.0% for the
same period and emerging market equities (MSCI EM) lost 13.6% for the same
period. Fixed income returns were positive for the period, with the Barclays
U.S. Aggregate Bond Index returning 7.3% and the Bank of America Merrill Lynch
U.S. High Yield Master II Index returning 7.3%. Continuing global macroeconomic
and geopolitical uncertainties, including the European sovereign debt crisis,
slowing growth in China, and the economic impact of tax increases and spending
cuts associated with the so-called "fiscal cliff", fueled investor concerns
about U.S. economic growth and earnings. High investor risk aversion continued
to be observed in mutual fund flows and other investor preferences.
During the period, the Fund maintained a tactical asset allocation that was
overweight global equities and underweight bonds, compared to the Fund's
benchmark weights. These tactical decisions contributed to the underperformance
of the Fund versus its custom benchmark. This underperformance was primarily
driven by international equity and currency exposure, as well as small-cap
exposure. For the reporting period, international developed (MSCI EAFE),
emerging market (MSCI EM), and small-cap (Russell 2000) equities substantially
underperformed the S&P 500 Index. The Fund maintained an underweight position in
developed international equities as compared to the Fund's benchmark, but this
was partially offset by overweighting emerging market and small-cap equities.
The Fund was overweight U.S. equities during the reporting period, with specific
tilts favoring small-cap stocks, as well as healthcare, technology, real estate
investment trusts ("REITs") and industrial sectors. Notable changes to the
Fund's tactical allocations over the period included reducing exposure to global
equities overall, as well as to REITs and healthcare sectors, while increasing
exposure to small-cap equities, technology, and cash. The Fund has maintained
its modest tilt towards value equities. The Fund added healthcare exposure in
July 2011, by investing in Vanguard Healthcare Fund, but such holding has
recently been removed from the portfolio.
The Fund benefited from an overweight to domestic equities (9.1%), REITs
(13.7%), healthcare (15.4%) and a relative underweight to the MSCI EAFE
(-11.0%). Large growth stocks slightly led large value stocks outperforming by
-0.6%. Emerging market MSCI EM (-13.6%) stocks underperformed developed markets,
which detracted from performance. Within the fixed income allocation,
intermediate income and high yield bonds were in line with each index, returning
7.3%, while shorter maturity fixed income holdings detracted from performance.
The performance of the underlying funds held in the portfolio during the Fund's
reporting period was mixed. Holdings in HighMark Large Cap Growth Fund, HighMark
Large Cap Core Equity Fund, HighMark Equity Income Fund, HighMark Geneva Mid Cap
Growth, HighMark Geneva Small Cap Growth Fund, HighMark Short Term Bond Fund and
Lazard Emerging Markets Equity Portfolio outperformed their benchmarks. HighMark
Value Fund, HighMark Small Cap Core Fund, HighMark Cognitive Value Fund,
HighMark International Opportunities Fund, HighMark Enhanced Growth Fund,
HighMark Bond Fund, Morgan Stanley Institutional U.S. Real Estate Portfolio,
Fidelity Advisor Industrial Fund, Eaton Vance Income Fund of Boston and Vanguard
Health Care Fund underperformed their benchmarks.
26 HIGHMARK(R) FUNDS
HIGHMARK TACTICAL CAPITAL GROWTH ALLOCATION FUND INVESTMENT OBJECTIVE
HIGHMARK TACTICAL 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 TACTICAL
CAPITAL GROWTH ALLOCATION FUND VERSUS THE S&P 500 INDEX; THE BARCLAYS U.S.
AGGREGATE BOND INDEX; THE CITIGROUP 3-MONTH TREASURY BILL INDEX; AN UNMANAGED
BLENDED INDEX OF 80% S&P 500 INDEX, 15% BARCLAYS U.S. AGGREGATE BOND INDEX AND
5% CITIGROUP 3-MONTH TREASURY BILL INDEX AND THE MORNINGSTAR LARGE BLEND
CATEGORY.
[LINE GRAPH]
HighMark
Tactical Capital
Growth Morningstar 80/15/5 Hybrid^ of Barclays U.S. Citigroup 3-
Allocation Fund Large Blend the following Aggregate Bond Month Treasury
Class A Shares Category indexes: S&P 500 Index++ Index++ Bill Index++^
10/12/2004 $ 9,450 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000
Jul-05 $ 10,511 $ 11,268 $ 10,971 $ 11,159 $ 10,226 $ 10,192
Jul-06 $ 11,071 $ 11,827 $ 11,493 $ 11,759 $ 10,375 $ 10,613
Jul-07 $ 12,643 $ 13,697 $ 13,101 $ 13,656 $ 10,954 $ 11,150
Jul-08 $ 11,276 $ 12,219 $ 12,074 $ 12,142 $ 11,628 $ 11,490
Jul-09 $ 9,282 $ 9,812 $ 10,293 $ 9,718 $ 12,541 $ 11,565
Jul-10 $ 10,567 $ 11,046 $ 11,592 $ 11,063 $ 13,658 $ 11,579
Jul-11 $ 12,460 $ 13,087 $ 13,565 $ 13,237 $ 14,265 $ 11,594
Jul-12 $ 12,649 $ 13,665 $ 14,740 $ 14,446 $ 15,299 $ 11,599
++ 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 1.79% 11.16% 0.28% 1.19%+ 1.97% 1.37%
--------------------------------------------------------------------------------------------------------------------
Class A Shares 1.52% 10.87% 0.01% 3.81% 2.22% 1.62%
--------------------------------------------------------------------------------------------------------------------
Class A Shares w/load* -4.05% 8.80% -1.11% 3.06% 2.22% 1.62%
--------------------------------------------------------------------------------------------------------------------
Class C Shares 0.80% 10.10% -0.68% 3.08% 2.72% 2.32%
--------------------------------------------------------------------------------------------------------------------
Class C Shares w/load** -0.20% 10.10% -0.68% 3.08% 2.72% 2.32%
--------------------------------------------------------------------------------------------------------------------
Blend of 80% S&P 500 Index, 15% Barclays
U.S. Aggregate Bond Index and 5% Citigroup
Bond 3-Month Treasury Bill Index 8.66% 12.51% 2.27% 5.07% -- --
--------------------------------------------------------------------------------------------------------------------
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. CURRENT PERFORMANCE MAY BE
LOWER OR HIGHER THAN THE RETURNS QUOTED. 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, 2011 and ending on November 30, 2012. 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
FUND SECTORS
% OF
SECTOR PORTFOLIO
AFFILIATED EQUITY REGISTERED
INVESTMENT COMPANIES 62.8%
AFFILIATED FIXED INCOME REGISTERED
INVESTMENT COMPANIES 21.2
REPURCHASE AGREEMENT 6.7
FIXED INCOME REGISTERED
INVESTMENT COMPANY 4.7
EQUITY REGISTERED INVESTMENT
COMPANIES 4.6
Current and future portfolio holdings are subject to change and risk.
TACTICAL GROWTH & INCOME ALLOCATION FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2012, HighMark Tactical Growth & Income
Allocation Fund (the "Fund") produced a total return of 2.40% (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 U.S. Aggregate Bond Index and the Citigroup 3-Month
U.S. Treasury Bill Index, respectively, returned 8.43% for the same period.
FACTORS AFFECTING PERFORMANCE
Domestic equities rose during the Fund's reporting period, with the S&P 500
Index returning 9.1%. Telecommunications (30.6%), Consumer Staples (19.7%) and
Utilities (19.3%) led equity indexes higher. Materials (-5.2%), Energy (-5.0%)
and Financials (1.1%) were the worst performing sectors of the equity index.
International stocks (MSCI EAFE) trailed domestic equities losing 11.0% for the
same period and emerging market equities (MSCI EM) lost 13.6% for the same
period. Fixed income returns were positive for the period, with the Barclays
U.S. Aggregate Bond Index returning 7.3% and the Bank of America Merrill Lynch
U.S. High Yield Master II Index returning 7.3%. Continuing global macroeconomic
and geopolitical uncertainties, including the European sovereign debt crisis,
slowing growth in China, and the economic impact of tax increases and spending
cuts associated with the so-called "fiscal cliff", fueled investor concerns
about U.S. economic growth and earnings. High investor risk aversion continued
to be observed in mutual fund flows and other investor preferences.
During the period, the Fund maintained a tactical asset allocation that was
overweight global equities and underweight bonds, compared to the Fund's
benchmark weights. These tactical decisions contributed to the underperformance
of the Fund versus its custom benchmark. This underperformance was primarily
driven by international equity and currency exposure, as well as small-cap
exposure. For the reporting period, international developed (MSCI EAFE),
emerging market (MSCI EM), and small-cap (Russell 2000) equities substantially
underperformed the S&P 500 Index. The Fund maintained an underweight position in
developed international equities as compared to the Fund's benchmark, but this
was partially offset by overweighting emerging market and small-cap equities.
The Fund was overweight U.S. equities during the reporting period, with specific
tilts favoring small-cap stocks, as well as healthcare, technology, real estate
investment trusts ("REITs") and industrial sectors. Notable changes to the
Fund's tactical allocations over the period included reducing exposure to global
equities overall, as well as to REITs and healthcare sectors, while increasing
exposure to small-cap equities, technology, and cash. The Fund has maintained
its modest tilt towards value equities. The Fund added healthcare exposure in
July 2011, by investing in Vanguard Healthcare Fund, but such holding has
recently been removed from the portfolio.
The Fund benefited from an overweight to domestic equities (9.1%), REITs
(13.7%), healthcare (15.4%) and a relative underweight to the MSCI EAFE
(-11.0%). Large growth stocks slightly led large value stocks outperforming by
-0.6%. Emerging market MSCI EM (-13.6%) stocks underperformed developed markets,
which detracted from performance. Within the fixed income allocation,
intermediate income and high yield bonds were in line with each index, returning
7.3%, while shorter maturity fixed income holdings detracted from performance.
The performance of the underlying funds held in the portfolio during the Fund's
reporting period was mixed. Holdings in HighMark Large Cap Growth Fund, HighMark
Large Cap Core Equity Fund, HighMark Equity Income Fund, HighMark Geneva Mid Cap
Growth, HighMark Geneva Small Cap Growth Fund, HighMark Short Term Bond Fund and
Lazard Emerging Markets Equity Portfolio outperformed their benchmarks. HighMark
Value Fund, HighMark Small Cap Core Fund, HighMark Cognitive Value Fund,
HighMark International Opportunities Fund, HighMark Enhanced Growth Fund,
HighMark Bond Fund, Morgan Stanley Institutional U.S. Real Estate Portfolio,
Fidelity Advisor Industrial Fund, Eaton Vance Income Fund of Boston and Vanguard
Health Care Fund underperformed their benchmarks.
28 HIGHMARK(R) FUNDS
HIGHMARK TACTICAL GROWTH & INCOME ALLOCATION FUND INVESTMENT OBJECTIVE
HIGHMARK TACTICAL 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 TACTICAL
GROWTH & INCOME ALLOCATION FUND VERSUS THE S&P 500 INDEX; THE BARCLAYS 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 U.S. AGGREGATE BOND
INDEX AND 5% CITIGROUP 3-MONTH U.S. TREASURY BILL INDEX AND THE MORNINGSTAR
MODERATE ALLOCATION CATEGORY.
[LINE GRAPH]
HighMark
Tactical Growth Morningstar
& Income Moderate 60/35/5 Hybrid^ of Barclays U.S. Citigroup 3-Month
Allocation Fund Allocation the following Aggregate Bond U.S. Treasury Bill
Class A Shares Category indexes S&P 500 Index++ Index++ Index++^
10/12/2004 $ 9,450 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000
Jul-05 $ 10,286 $ 10,992 $ 10,784 $ 11,159 $ 10,226 $ 10,192
Jul-06 $ 10,740 $ 11,534 $ 11,214 $ 11,759 $ 10,375 $ 10,613
Jul-07 $ 12,039 $ 12,953 $ 12,545 $ 13,656 $ 10,952 $ 11,150
Jul-08 $ 11,146 $ 12,155 $ 11,990 $ 12,142 $ 11,626 $ 11,490
Jul-09 $ 9,776 $ 10,723 $ 10,883 $ 9,718 $ 12,538 $ 11,565
Jul-10 $ 11,008 $ 11,998 $ 12,162 $ 11,063 $ 13,656 $ 11,579
Jul-11 $ 12,634 $ 13,666 $ 13,851 $ 13,237 $ 14,262 $ 11,594
Jul-12 $ 12,937 $ 14,093 $ 15,019 $ 14,446 $ 15,296 $ 11,599
++ 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 2.65% 10.06% 1.70% 4.30%+ 1.83% 1.29%
-------------------------------------------------------------------------------------------------------------------
Class A Shares 2.40% 9.79% 1.45% 4.11% 2.08% 1.54%
-------------------------------------------------------------------------------------------------------------------
Class A Shares w/load* -3.24% 7.74% 0.30% 3.36% 2.08% 1.54%
-------------------------------------------------------------------------------------------------------------------
Class C Shares 1.67% 9.02% 0.75% 3.38% 2.58% 2.24%
-------------------------------------------------------------------------------------------------------------------
Class C Shares w/load** 0.67% 9.02% 0.75% 3.38% 2.58% 2.24%
-------------------------------------------------------------------------------------------------------------------
Blend of 60% S&P 500 Index, 35% Barclays
U.S. Aggregate Bond Index and 5% Citigroup
3-Month U.S. Treasury Bill Index 8.43% 11.16% 3.56% 5.33% -- --
-------------------------------------------------------------------------------------------------------------------
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. CURRENT PERFORMANCE MAY BE
LOWER OR HIGHER THAN THE RETURNS QUOTED. 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, 2011 and ending on November 30, 2012. 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 29
TOP TEN HOLDINGS
% OF
HOLDING* PORTFOLIO
U.S. TREASURY NOTE
3.000%, 09/30/16 4.3%
TIME WARNER ENTERTAINMENT
8.375%, 03/15/23 1.8
FNMA
3.500%, 10/01/26 1.7
GEORGIA-PACIFIC
8.000%, 01/15/24 1.6
VERIZON NEW ENGLAND
7.875%, 11/15/29 1.6
GENERAL ELECTRIC CAPITAL, MTN
2.300%, 04/27/17 1.6
AEP TEXAS CENTRAL TRANSITION
FUNDING, SER 2012-1, CL A1
0.880%, 12/01/18 1.6
FNMA
3.500%, 09/01/25 1.5
METROPOLITAN WATER DISTRICT OF
SOUTHERN CALIFORNIA, BUILD
AMERICA BONDS, TAXABLE, RB
6.947%, 07/01/40 1.5
CS FIRST BOSTON MORTGAGE
SECURITIES, SER 2005-C1, CL A4
5.014%, 02/15/38 1.4
FUND SECTORS
% OF
SECTOR PORTFOLIO
U.S. GOVERNMENT AGENCY
MORTGAGE-BACKED OBLIGATIONS 15.7%
FINANCIALS 13.8
MORTGAGE-BACKED SECURITIES 11.9
U.S. TREASURY OBLIGATION 9.1
ASSET-BACKED SECURITIES 8.7
ENERGY 6.7
MATERIALS 5.6
CONSUMER DISCRETIONARY 5.0
HEALTH CARE 4.7
MUNICIPAL BONDS 4.4
TELECOMMUNICATION SERVICES 3.6
UTILITIES 3.5
INDUSTRIAL 2.9
FOREIGN GOVERNMENTS 1.9
INFORMATION TECHNOLOGY 1.6
REGISTERED INVESTMENT COMPANY 0.9
* Excludes short-term securities.
Current and future portfolio holdings are subject to change and risk.
BOND FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2012, HighMark Bond Fund (the "Fund")
produced a total return of 6.87% (Class A Shares without load). In comparison,
the Fund's benchmark, the unmanaged Barclays U.S. Aggregate Bond Index, returned
7.25% for the same period.
FACTORS AFFECTING PERFORMANCE
The Fund's reporting period was generally marked by market volatility,
challenging global conditions and a slow-growth economic recovery. Concerns over
the European sovereign debt crisis, particularly in relation to Greece, Italy
and Spain, persisted due to the possibility that a systemic event similar to the
Lehman Brothers collapse in 2008 would occur. These fears were exacerbated by a
downward revision in expectations for growth in the United States, as well as
fears that the country would once again enter a recession.
At the beginning of the Fund's reporting period, a volatile domestic political
situation led to a historic downgrade of United States government debt.
Nonetheless, Treasury bonds were still regarded as a "safe haven" for investors
amidst global uncertainty, and a flight to quality occurred despite the
downgrade. Further quantitative easing by the Federal Reserve, known as
"Operation Twist," combined with this flight to quality, led to lower rates
across the yield curve, particularly on the so-called long end of the curve.
Market volatility reached a peak and then subsided in November 2011 after news
that European financial institutions would have access to additional government
funds and that the United States potentially avoided a recession. However, fears
resurfaced over the fiscal solvency of Italy and Spain in May 2012, and
volatility returned to global markets toward the latter part of the reporting
period.
Overall, Treasury bonds outperformed both corporate bonds and mortgage bonds
during the reporting period. The Fund was overweight corporate bonds and
underweight Treasury bonds relative to its benchmark, which contributed to the
Fund's underperformance. The duration of the portfolio, which was shorter than
its benchmark, was another reason for the Fund's underperformance, as longer
maturities outperformed shorter maturities for the period. Although the Fund's
allocation to asset-backed securities contributed to overall performance, it was
not enough to overcome these negative factors, and the Fund underperformed its
benchmark for the reporting period.
30 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 U.S. AGGREGATE BOND INDEX AND THE MORNINGSTAR
INTERMEDIATE-TERM BOND CATEGORY.
[LINE GRAPH]
Morningstar
HighMark Bond Intermediate- Barclays
Fund Class A Term Bond U.S. Aggregate
Shares Category Bond Index++
Jul-02 $ 9,775 $ 10,000 $ 10,000
Jul-03 $ 10,394 $ 10,601 $ 10,542
Jul-04 $ 10,858 $ 11,079 $ 11,052
Jul-05 $ 11,309 $ 11,562 $ 11,582
Jul-06 $ 11,394 $ 11,689 $ 11,751
Jul-07 $ 11,976 $ 12,260 $ 12,404
Jul-08 $ 12,604 $ 12,510 $ 13,167
Jul-09 $ 13,559 $ 13,163 $ 14,201
Jul-10 $ 14,926 $ 14,679 $ 15,466
Jul-11 $ 15,685 $ 15,465 $ 16,152
Jul-12 $ 16,763 $ 16,515 $ 17,324
++ 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 7.11% 7.60% 7.23% 5.80% 1.01% 0.72%
--------------------------------------------------------------------------------------------------------
Class A Shares 6.87% 7.33% 6.96% 5.54% 1.26% 0.97%
--------------------------------------------------------------------------------------------------------
Class A Shares w/load* 4.46% 6.53% 6.46% 5.30% 1.26% 0.97%
--------------------------------------------------------------------------------------------------------
Class B Shares 6.13% 6.63% 6.23% 4.80% 1.76% 1.65%
--------------------------------------------------------------------------------------------------------
Class B Shares w/load** 1.13% 5.74% 5.92% 4.80% 1.76% 1.65%
--------------------------------------------------------------------------------------------------------
Class C Shares 6.36% 6.88% 6.55% 5.19%+ 1.51% 1.40%
--------------------------------------------------------------------------------------------------------
Class C Shares w/load*** 5.36% 6.88% 6.55% 5.19%+ 1.51% 1.40%
--------------------------------------------------------------------------------------------------------
Barclays U.S. Aggregate Bond Index 7.25% 6.85% 6.91% 5.65% -- --
--------------------------------------------------------------------------------------------------------
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. CURRENT PERFORMANCE MAY BE
LOWER OR HIGHER THAN THE RETURNS QUOTED. 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, 2011 and ending on November 30, 2012. 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 31
TOP TEN HOLDINGS
% OF
HOLDING* PORTFOLIO
SAN FRANCISCO CITY & COUNTY,
PUBLIC UTILITIES COMMISSION,
WATER REVENUE, SER D, RB
5.000%, 11/01/26 2.3%
CALIFORNIA STATE, ECONOMIC
RECOVERY, SER A, GO, STATE
GUARANTEED
5.250%, 07/01/21 1.9
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 1.5
CALIFORNIA STATE, DEPARTMENT OF
WATER RESOURCES, CENTRAL VALLEY
PROJECT, SER A, RB
5.000%, 12/01/22 1.5
CLAREMONT, UNIFIED SCHOOL
DISTRICT, GO
5.000%, 08/01/28 1.4
LOS ANGELES, SER A, GO,
NATIONAL-RE INSURED
5.000%, 09/01/12 1.4
CALIFORNIA STATE, DEPARTMENT OF
TRANSPORTATION, FEDERAL
HIGHWAY GRANT, ANTICIPATION
BONDS, SER A, RB, NATIONAL-RE
FGIC INSURED
5.000%, 02/01/14 1.3
SOUTHERN CALIFORNIA, PUBLIC POWER
AUTHORITY, POWER PROJECT
REVENUE, CANYON POWER,
SER A, RB
5.000%, 07/01/25 1.3
IRVINE RANCH WATER DISTRICT, SER B,
GO, LOC BANK OF AMERICA NA
0.160%, 10/01/41 1.3
FUND SECTORS
% OF
SECTOR PORTFOLIO
GENERAL OBLIGATIONS 48.8%
REVENUE BONDS 41.8
CERTIFICATE OF PARTICIPATION 6.6
SPECIAL ASSESSMENT 2.0
REGISTERED INVESTMENT COMPANY 0.8
* Excludes short-term securities. Current and future portfolio holdings are
subject to change and risk.
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2012, HighMark California Intermediate
Tax-Free Bond Fund (the "Fund") produced a total return of 6.40% (Class A Shares
without load). In comparison, the Fund's benchmark, the unmanaged Barclays
7-Year Municipal Bond Index, returned 7.97% for the same period.
FACTORS AFFECTING PERFORMANCE
The Fund's reporting period was generally marked by volatility, challenging
global conditions and a slow-growth economic recovery. Concerns over the
European sovereign debt crisis, particularly in relation to Greece, Italy and
Spain, persisted due to the possibility that a systemic event similar to the
Lehman Brothers collapse in 2008 would occur. These fears were exacerbated by a
downward revision in expectations for growth in the United States, as well as
fears that the country would once again enter a recession.
At the beginning of the Fund's reporting period, a volatile domestic political
situation led to a historic downgrade of United States government debt.
Nonetheless, Treasury bonds were still regarded as a "safe haven" for investors
amidst global uncertainty, and a flight to quality occurred despite the
downgrade. Further quantitative easing by the Federal Reserve, known as
"Operation Twist," combined with this flight to quality, led to lower rates
across the yield curve, particularly on the so-called long end of the curve.
Market volatility reached a peak and then subsided in November 2011 after news
that European financial institutions would have access to additional government
funds and that the United States potentially avoided a recession. However, fears
resurfaced over the fiscal solvency of Italy and Spain in May 2012 and
volatility returned to global markets toward the latter part of the reporting
period.
New York was the nation's largest state of issuance of municipal debt during the
Fund's reporting period. California came in as the second largest issuer, and
Texas was the third largest issuer during the reporting period.
The reporting period experienced low yields, as well as concerns about
countries' and municipalities' abilities to pay their debts. 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.
32 HIGHMARK(R) FUNDS
HIGHMARK CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND INVESTMENT OBJECTIVE
HIGHMARK CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND SEEKS HIGH CURRENT INCOME
THAT IS EXEMPT FROM FEDERAL INCOME TAX AND 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 7-YEAR MUNICIPAL BOND INDEX
AND THE MORNINGSTAR MUNICIPAL CALIFORNIA INTERMEDIATE/SHORT CATEGORY.
[LINE GRAPH]
HighMark Morningstar
California Municipal
Intermediate Tax- California Barclays 7-Year
Free Bond Fund Intermediate/Short Municipal Bond
Class A Shares Category Index++
Jul-02 $ 9,775 $ 10,000 $ 10,000
Jul-03 $ 10,011 $ 10,195 $ 10,387
Jul-04 $ 10,356 $ 10,607 $ 10,923
Jul-05 $ 10,615 $ 11,012 $ 11,356
Jul-06 $ 10,763 $ 11,232 $ 11,600
Jul-07 $ 11,086 $ 11,602 $ 12,057
Jul-08 $ 11,599 $ 11,825 $ 12,760
Jul-09 $ 12,245 $ 12,136 $ 13,782
Jul-10 $ 12,889 $ 13,055 $ 14,828
Jul-11 $ 13,163 $ 13,414 $ 15,489
Jul-12 $ 14,006 $ 14,540 $ 16,723
++ 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 6.73% 4.85% 5.06% 3.91% 1.02% 0.54%
--------------------------------------------------------------------------------------------------------------
Class A Shares 6.40% 4.58% 4.79% 3.66% 1.27% 0.79%
--------------------------------------------------------------------------------------------------------------
Class A Shares w/load* 4.05% 3.79% 4.32% 3.43% 1.27% 0.79%
--------------------------------------------------------------------------------------------------------------
Class C Shares 5.96% 4.11% 4.30% 3.26%+ 1.52% 1.24%
--------------------------------------------------------------------------------------------------------------
Class C Shares w/load** 4.96% 4.11% 4.30% 3.26%+ 1.52% 1.24%
--------------------------------------------------------------------------------------------------------------
Barclays 7-Year Municipal Bond Index 7.97% 6.66% 6.76% 5.28% -- --
--------------------------------------------------------------------------------------------------------------
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. CURRENT PERFORMANCE MAY BE
LOWER OR HIGHER THAN THE RETURNS QUOTED. 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, 2011 and ending on November 30, 2012. 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 33
TOP TEN HOLDINGS
% OF
HOLDINGS* PORTFOLIO
CLARK COUNTY, LIMITED TAX-BOND
BANK, GO
5.000%, 06/01/25 2.8%
LOS ANGELES, SER A, GO,
5.000%, 09/01/23 2.5
MASSACHUSETTS STATE, SCHOOL
BUILDING AUTHORITY, SALES TAX
REVENUE, SER A, RB, AGM
INSURED
5.000%, 08/15/14 2.4
ALASKA STATE, INTERNATIONAL
AIRPORTS SYSTEM, SER D, RB,
NATIONAL-RE INSURED
5.000%, 10/01/22 2.3
IDAHO STATE, HOUSING & FINANCE
ASSOCIATION, GRANT & REVENUE
ANTICIPATION, FEDERAL HIGHWAY
TRUST, SER A, RB
5.250%, 07/15/24 2.1
HONOLULU CITY AND COUNTY, SER A,
GO, NATIONAL-RE INSURED
5.000%, 07/01/25 2.0
CHICAGO, O'HARE INTERNATIONAL
AIRPORT, SER B, RB, AGM INSURED
5.000%, 01/01/19 2.0
HOUSTON, TEXAS UTILITY SYSTEM
REVENUE, FIRST LIEN, SER A, RB,
AGM INSURED
5.250%, 11/1517 1.9
SAN RAMON VALLEY, UNIFIED SCHOOL
DISTRICT, ELECTION 2002, GO,
AGM INSURED
5.250%, 08/01/18 1.8
CHICO, UNIFIED SCHOOL DISTRICT,
SER B, GO, AGM INSURED
5.000%, 08/01/25 1.8
FUND SECTORS
% OF
SECTOR PORTFOLIO
GENERAL OBLIGATIONS 52.6%
REVENUE BONDS 43.7
CERTIFICATE OF PARTICIPATION 2.0
TAX ALLOCATION 1.4
REGISTERED INVESTMENT COMPANY 0.3
* Excludes short-term securities.
Current and future portfolio holdings are subject to change and risk.
NATIONAL INTERMEDIATE TAX-FREE BOND FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2012, HighMark National Intermediate Tax-Free
Bond Fund (the "Fund") produced a total return of 5.70% (Class A Shares without
load). In comparison, the Fund's benchmark, the unmanaged Barclays 7-Year
Municipal Bond Index, returned 7.97% for the same period.
FACTORS AFFECTING PERFORMANCE
The Fund's reporting period was generally marked by volatility, challenging
global conditions and a slow-growth economic recovery. Concerns over the
European sovereign debt crisis, particularly in relation to Greece, Italy and
Spain, persisted due to the possibility that a systemic event similar to the
Lehman Brothers collapse in 2008 would occur. These fears were exacerbated by a
downward revision in expectations for growth in the United States, as well as
fears that the country would once again enter a recession.
At the beginning of the Fund's reporting period, a volatile domestic political
situation led to a historic downgrade of United States government debt.
Nonetheless, Treasury bonds were still regarded as a "safe haven" for investors
amidst global uncertainty, and a flight to quality occurred despite the
downgrade. Further quantitative easing by the Federal Reserve, known as
"Operation Twist," combined with this flight to quality, led to lower rates
across the yield curve, particularly on the so-called long end of the curve.
Market volatility reached a peak and then subsided in November 2011 after news
that European financial institutions would have access to additional government
funds and that the United States potentially avoided a recession. However, fears
resurfaced over the fiscal solvency of Italy and Spain in May 2012 and
volatility returned to global markets toward the latter part of the reporting
period.
New York was the nation's largest state of issuance of municipal debt during the
Fund's reporting period. California came in as the second largest issuer, and
Texas was the third largest issuer during the reporting period.
The reporting period experienced low yields, as well as concerns about
countries' and municipalities' abilities to pay their debts. 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.
34 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 7-YEAR MUNICIPAL BOND INDEX
AND THE MORNINGSTAR MUNICIPAL NATIONAL INTERMEDIATE CATEGORY.
[LINE GRAPH]
HighMark Morningstar
National Municipal
Intermediate Tax- National Barclays 7-Year
Free Bond Fund Intermediate Municipal Bond
Class A Shares+ Category Index++
Jul-02 $ 9,775 $ 10,000 $ 10,000
Jul-03 $ 10,016 $ 10,220 $ 10,387
Jul-04 $ 10,310 $ 10,670 $ 10,923
Jul-05 $ 10,534 $ 11,073 $ 11,356
Jul-06 $ 10,712 $ 11,267 $ 11,600
Jul-07 $ 11,073 $ 11,633 $ 12,057
Jul-08 $ 11,616 $ 11,947 $ 12,760
Jul-09 $ 12,267 $ 12,450 $ 13,782
Jul-10 $ 12,921 $ 13,436 $ 14,828
Jul-11 $ 13,189 $ 13,824 $ 15,489
Jul-12 $ 13,941 $ 14,980 $ 16,723
++ 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 5.87% 4.62% 4.95% 3.87%+ 1.08% 0.52%
--------------------------------------------------------------------------------------------------------------
Class A Shares 5.70% 4.36% 4.71% 3.61%+ 1.33% 0.77%
--------------------------------------------------------------------------------------------------------------
Class A Shares w/load* 3.35% 3.56% 4.24% 3.38%+ 1.33% 0.77%
--------------------------------------------------------------------------------------------------------------
Class C Shares 5.22% 3.99%^ 3.78%^ 3.17%+^ 1.58% 1.22%
--------------------------------------------------------------------------------------------------------------
Class C Shares w/load** 4.22% 3.99%^ 3.78%^ 3.17%+^ 1.58% 1.22%
--------------------------------------------------------------------------------------------------------------
Barclays 7-Year Municipal Bond Index 7.97% 6.66% 6.76% 5.28% -- --
--------------------------------------------------------------------------------------------------------------
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. CURRENT PERFORMANCE MAY BE
LOWER OR HIGHER THAN THE RETURNS QUOTED. 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 the 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. With those adjustments, performance would be lower
than that shown. 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, 2011 and ending on November 30, 2012. 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 35
TOP TEN HOLDINGS
% OF
HOLDING* PORTFOLIO
FNMA
3.000%, 04/01/27 1.9%
SEARIVER MARITIME
ZERO COUPON, 09/01/12 1.9
AEP TEXAS CENTRAL TRANSITION
FUNDING, SER 2012-1, CL A1
0.880%, 12/01/18 1.6
FNMA
3.500%, 09/01/25 1.5
CELLCO PARTNERSHIP/VERIZON
WIRELESS CAPITAL
5.550%, 02/01/14 1.3
WACHOVIA
4.875%, 02/15/14 1.3
PETROBRAS INTERNATIONAL FINANCE
3.875%, 01/27/16 1.3
HEWLETT-PACKARD
3.000%, 09/15/16 1.3
AMGEN
1.875%, 11/15/14 1.3
TEVA PHARMACEUTICAL FINANCE IV
1.700%, 11/10/14 1.3
FUND SECTORS
% OF
SECTOR PORTFOLIO
U.S. GOVERNMENT AGENCY
MORTGAGE-BACKED OBLIGATIONS 19.5%
FINANCIALS 14.5
ASSET-BACKED SECURITIES 12.9
ENERGY 8.3
MORTGAGE-BACKED SECURITIES 5.6
HEALTH CARE 5.6
MATERIALS 4.9
CONSUMER DISCRETIONARY 4.3
REGISTERED INVESTMENT COMPANY 4.0
TELECOMMUNICATION SERVICES 3.7
UTILITIES 3.5
INDUSTRIAL 3.2
FOREIGN GOVERNMENTS 3.1
INFORMATION TECHNOLOGY 2.5
TAXABLE MUNICIPAL BONDS 2.1
CONSUMER STAPLES 2.0
U.S. TREASURY OBLIGATION 0.3
* Excludes short-term securities.
Current and future portfolio holdings are subject to change and risk.
SHORT TERM BOND FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2012, HighMark Short Term Bond Fund (the
"Fund") produced a total return of 2.18% (Class A Shares without load). In
comparison, the Fund's benchmark, the unmanaged Barclays 1-3 Year U.S.
Government/Credit Bond Index, returned 1.15% for the same period.
FACTORS AFFECTING PERFORMANCE
The Fund's reporting period was generally marked by market volatility,
challenging global conditions and a slow-growth economic recovery. Concerns over
the European sovereign debt crisis, particularly in relation to Greece, Italy
and Spain, persisted due to the possibility that a systemic event similar to the
Lehman Brothers collapse in 2008 would occur. These fears were exacerbated by a
downward revision in expectations for growth in the United States, as well as
fears that the country would once again enter a recession.
At the beginning of the Fund's reporting period, a volatile domestic political
situation led to a historic downgrade of United States government debt.
Nonetheless, Treasury bonds were still regarded as a "safe haven" for investors
amidst global uncertainty, and a flight to quality occurred despite the
downgrade. Further quantitative easing by the Federal Reserve, known as
"Operation Twist," combined with this flight to quality, led to lower rates
across the yield curve, particularly on the so-called long end of the curve.
Market volatility reached a peak and then subsided in November 2011 after news
that European financial institutions would have access to additional government
funds and that the United States potentially avoided a recession. However, fears
resurfaced over the fiscal solvency of Italy and Spain in May 2012, and
volatility returned to global markets toward the latter part of the reporting
period.
Overall, Treasury bonds outperformed both corporate bonds and mortgage bonds
during the reporting period. However, this rally had a minimal impact on the
Fund's performance due to the shorter duration of its portfolio relative to its
benchmark. The Fund also experienced a significant yield duration advantage,
particularly at the beginning of the reporting period. An overweight to
corporate bonds detracted from performance, but was offset by positive security
selection and an overweight to the asset-backed security and corporate
mortgage-backed security sectors. These two sectors, the asset-backed security
and corporate mortgage-backed security sectors, drove the Fund's performance
from both an income and price perspective, and the Fund outperformed its
benchmark for the reporting period.
36 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 JEFFREY KLEIN]
PORTFOLIO MANAGER
JEFFREY 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 1-3 YEAR U.S. GOVERNMENT/CREDIT BOND INDEX AND THE
MORNINGSTAR SHORT BOND CATEGORY.
[LINE GRAPH]
Barlcays 1-3 Year
HighMark Short Morningstar U.S.
Term Bond Fund Short Bond Government/Credit
Class A Shares Category Bond Index++
11/2/2004 $ 9,775 $ 10,000 $ 10,000
Jul-05 $ 9,792 $ 10,063 $ 10,086
Jul-06 $ 10,033 $ 10,306 $ 10,388
Jul-07 $ 10,478 $ 10,782 $ 10,943
Jul-08 $ 10,995 $ 10,916 $ 11,624
Jul-09 $ 11,531 $ 11,262 $ 12,217
Jul-10 $ 11,976 $ 11,969 $ 12,670
Jul-11 $ 12,224 $ 12,287 $ 12,896
Jul-12 $ 12,491 $ 12,565 $ 13,044
++ 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 2.55% 2.98% 3.87% 3.51% 0.99% 0.61%
-------------------------------------------------------------------------------------------------------------------
Class A Shares 2.18% 2.70% 3.58% 3.21% 1.24% 0.86%
-------------------------------------------------------------------------------------------------------------------
Class A Shares w/load* -0.10% 1.92% 3.10% 2.91% 1.24% 0.86%
-------------------------------------------------------------------------------------------------------------------
Class C Shares 1.79% 2.24% 3.12% 2.83%+ 1.49% 1.31%
-------------------------------------------------------------------------------------------------------------------
Class C Shares w/load** 0.79% 2.24% 3.12% 2.83%+ 1.49% 1.31%
-------------------------------------------------------------------------------------------------------------------
Barclays 1-3 Year U.S. Government/Credit
Bond Index 1.15% 2.21% 3.57% 3.44% -- --
-------------------------------------------------------------------------------------------------------------------
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. CURRENT PERFORMANCE MAY BE
LOWER OR HIGHER THAN THE RETURNS QUOTED. 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
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, 2011 and ending on November 30, 2012. 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 37
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 3.2%
MADISON, COMMUNITY
DEVELOPMENT AUTHORITY
REVENUE, WISCONSIN ALUMNI
RESEARCH FUND PROJECT, RB
5.000%, 10/01/34 3.0
PUERTO RICO SALES TAX FINANCING,
CORPORATE SALES TAX REVENUE,
FIRST SUB-SER A, RB
6.375%, 08/01/39 2.1
GLENDALE COMMUNITY
DEVELOPMENT AUTHORITY, LEASE
REVENUE, RB
2.600%, 09/01/21 1.9
MONROE, REDEVELOPMENT
AUTHORITY, DEVELOPMENT
REVENUE, MONROE CLINIC INC, RB,
AGM INSURED
5.875%, 02/15/39 1.9
WISCONSIN CENTER DISTRICT,
SER 1998A, JUNIOR DEDICATED
TAX REVENUE, RB, AGM INSURED
5.250%, 12/15/23 1.8
SOUTHEAST WISCONSIN PROFESSIONAL
BASEBALL PARK DISTRICT, SALES TAX
REVENUE, REFUNDING, SER A, RB,
EDTM, NATIONAL-RE INSURED
5.500%, 12/15/19 1.7
GLENDALE COMMUNITY
DEVELOPMENT AUTHORITY, LEASE
REVENUE, RB
2.750%, 09/01/22 1.6
PUERTO RICO SALES TAX FINANCING,
CORPORATE SALES TAX REVENUE,
FIRST SUB-SER A, RB
5.500%, 08/01/37 1.6
VIRGIN ISLANDS PUBLIC FINANCE
AUTHORITY, GROSS RECEIPTS TAXES
LOAN NOTES, RB NATIONAL-RE
FGIC INSURED
5.000%, 10/01/24 1.6
FUND SECTORS
% OF
SECTOR PORTFOLIO
REVENUE BONDS 85.9%
REGISTERED INVESTMENT COMPANY 7.3
GENERAL OBLIGATIONS 5.7
CERTIFICATE OF PARTICIPATION 1.1
* Excludes short-term securities.
Current and future portfolio holdings are subject to change and risk.
WISCONSIN TAX-EXEMPT FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2012, HighMark Wisconsin Tax-Exempt Fund (the
"Fund") produced a total return of 8.30% (Class A Shares without load). In
comparison, the Fund's benchmark, the unmanaged Barclays Municipal Bond Index,
returned 10.51% for the same period.
FACTORS AFFECTING PERFORMANCE
The Fund's reporting period was generally marked by market volatility,
challenging global conditions and a slow-growth economic recovery. Concerns over
the European sovereign debt crisis, particularly in relation to Greece, Italy
and Spain, persisted due to the possibility that a systemic event similar to the
Lehman Brothers collapse in 2008 would occur. These fears were exacerbated by a
downward revision in expectations for growth in the United States, as well as
fears that the country would once again enter a recession.
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 and
indicated it would remain at this level until 2014. The positive effects of
"Operation Twist," a program undertaken by the Federal Reserve to sell shorter
duration issues and purchase longer duration issues, were felt during the Fund's
reporting period, driving yields to record low levels across the yield curve.
This created a "risk-on" environment that resulted in a rally in the municipal
sector. Specifically, longer duration issues outperformed shorter duration
issues during the period. The Fund continued to execute on its strategy of
improving the quality of its portfolio investments, which meant investing in
issues that were more liquid, as well as in territory issues with stronger
ratings.
The Fund's investments in municipal instruments issued by the territory of
Puerto Rico contributed to performance during the reporting period, as did its
overweight position relative to its benchmark in Wisconsin BBB-rated
investments.
The Fund's investments in municipal bonds issued by the U.S. Virgin Islands hurt
performance, as did the Fund's higher quality and shorter duration relative to
its benchmark. Lower quality issues outperformed during the period. Therefore,
the Fund's strategy of improving the quality of its investments negatively
impacted performance.
Because of these drags on performance, the Fund underperformed its benchmark for
the reporting period.
38 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 LOTSOFF CAPITAL MANAGEMENT, LLC
[PHOTO OF RICHARD SCARGILL]
CO-PORTFOLIO MANAGER
RICHARD SCARGILL
ZIEGLER LOTSOFF CAPITAL MANAGEMENT, LLC
[PHOTO OF PAULA HORN]
CO-PORTFOLIO MANAGER
PAULA HORN
ZIEGLER LOTSOFF CAPITAL MANAGEMENT, LLC
[PHOTO OF MICHAEL SANDERS]
CO-PORTFOLIO MANAGER
MICHAEL SANDERS
ZIEGLER LOTSOFF CAPITAL MANAGEMENT, LLC
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK WISCONSIN
TAX-EXEMPT FUND VERSUS THE BARCLAYS MUNICIPAL BOND INDEX AND THE MORNINGSTAR
MUNICIPAL SINGLE STATE INTERMEDIATE CATEGORY.
[LINE GRAPH]
Morningstar
HighMark Wisconsin Municipal Single
Tax-Exempt Fund State Intermediate Barclays Municipal
Class A Shares Category Bond Index++
Jul-02 9,775 10,000 10,000
Jul-03 10,191 10,253 10,360
Jul-04 10,642 10,705 10,960
Jul-05 11,144 11,141 11,656
Jul-06 11,368 11,335 11,953
Jul-07 11,768 11,723 12,463
Jul-08 12,006 11,876 12,816
Jul-09 12,354 12,384 13,471
Jul-10 13,336 13,265 14,704
Jul-11 13,640 13,606 15,180
Jul-12 14,773 14,723 16,775
++ 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 8.57% 6.32%+ 4.76%+ 4.27%+ 1.07% 0.66%
-------------------------------------------------------------------------------------------------------------------
Class A Shares 8.30% 6.14% 4.65% 4.21% 1.32% 0.91%
-------------------------------------------------------------------------------------------------------------------
Class A Shares w/load* 5.85% 5.34% 4.17% 3.97% 1.32% 0.91%
-------------------------------------------------------------------------------------------------------------------
Class B Shares 7.62% 5.43% 3.92% 3.50%+ 1.82% 1.61%
-------------------------------------------------------------------------------------------------------------------
Class B Shares w/load** 2.62% 4.52% 3.58% 3.50%+ 1.82% 1.61%
-------------------------------------------------------------------------------------------------------------------
Class C Shares 7.82% 5.67% 4.08% 3.58%+ 1.57% 1.36%
-------------------------------------------------------------------------------------------------------------------
Class C Shares w/load*** 6.82% 5.67% 4.08% 3.58%+ 1.57% 1.36%
-------------------------------------------------------------------------------------------------------------------
Barclays Municipal Bond Index 10.51% 7.59% 6.12% 5.31% -- --
-------------------------------------------------------------------------------------------------------------------
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. CURRENT PERFORMANCE MAY BE
LOWER OR HIGHER THAN THE RETURNS QUOTED. 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 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 B and Class C Share
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, 2011 and ending on November 30, 2012. 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 39
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
2/1/12 7/31/12 RATIOS PERIOD*
--------------------------------------------------------------------------------
BALANCED FUND
-------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $1,072.60 0.99% $ 5.10
Class A Shares ................ 1,000.00 1,071.70 1.24% 6.39
Class B Shares ................ 1,000.00 1,068.40 1.84% 9.46
Class C Shares ................ 1,000.00 1,068.10 1.84% 9.46
HYPOTHETICAL
Fiduciary Shares .............. $1,000.00 $1,019.94 0.99% $ 4.97
Class A Shares ................ 1,000.00 1,018.70 1.24% 6.22
Class B Shares ................ 1,000.00 1,015.71 1.84% 9.22
Class C Shares ................ 1,000.00 1,015.71 1.84% 9.22
-------------------------------------------------------------------------------
COGNITIVE VALUE FUND
-------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $ 985.40 1.16% $ 5.73
Class A Shares ................ 1,000.00 983.70 1.47% 7.25
Class C Shares ................ 1,000.00 981.50 2.07% 10.20
Class M Shares ................ 1,000.00 986.20 1.07% 5.28
HYPOTHETICAL
Fiduciary Shares .............. $1,000.00 $1,019.10 1.16% $ 5.82
Class A Shares ................ 1,000.00 1,017.55 1.47% 7.37
Class C Shares ................ 1,000.00 1,014.57 2.07% 10.37
Class M Shares ................ 1,000.00 1,019.54 1.07% 5.37
BEGINNING ENDING NET EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE AT VALUE AT EXPENSE DURING
2/1/12 7/31/12 RATIOS PERIOD*
--------------------------------------------------------------------------------
ENHANCED GROWTH FUND
--------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $1,023.40 1.11% $ 5.58
Class A Shares ................ 1,000.00 1,022.10 1.45% 7.29
Class C Shares ................ 1,000.00 1,018.30 2.05% 10.29
Class M Shares ................ 1,000.00 1,024.20 1.05% 5.28
HYPOTHETICAL
Fiduciary Shares .............. $1,000.00 $1,019.34 1.11% $ 5.57
Class A Shares ................ 1,000.00 1,017.65 1.45% 7.27
Class C Shares ................ 1,000.00 1,014.67 2.05% 10.27
Class M Shares ................ 1,000.00 1,019.64 1.05% 5.27
--------------------------------------------------------------------------------
EQUITY INCOME FUND
--------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $1,080.30 0.88% $ 4.55
Class A Shares ................ 1,000.00 1,079.10 1.15% 5.94
Class B Shares ................ 1,000.00 1,076.50 1.75% 9.04
Class C Shares ................ 1,000.00 1,076.40 1.75% 9.03
HYPOTHETICAL
Fiduciary Shares .............. $1,000.00 $1,020.49 0.88% $ 4.42
Class A Shares ................ 1,000.00 1,019.14 1.15% 5.77
Class B Shares ................ 1,000.00 1,016.16 1.75% 8.77
Class C Shares ................ 1,000.00 1,016.16 1.75% 8.77
40 HIGHMARK(R) FUNDS
BEGINNING ENDING NET EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE AT VALUE AT EXPENSE DURING
2/1/12 7/31/12 RATIOS PERIOD*
--------------------------------------------------------------------------------
GENEVA MID CAP GROWTH FUND
--------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $ 997.90 1.14% $ 5.66
Class A Shares ................ 1,000.00 997.00 1.39% 6.90
Class B Shares ................ 1,000.00 993.90 1.99% 9.87
Class C Shares ................ 1,000.00 993.90 1.99% 9.87
HYPOTHETICAL
Fiduciary Shares .............. $1,000.00 $1,019.19 1.14% $ 5.72
Class A Shares ................ 1,000.00 1,017.95 1.39% 6.97
Class B Shares ................ 1,000.00 1,014.97 1.99% 9.97
Class C Shares ................ 1,000.00 1,014.97 1.99% 9.97
--------------------------------------------------------------------------------
GENEVA SMALL CAP GROWTH FUND
--------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $1,023.60 1.35% $ 6.79
Class A Shares ................ 1,000.00 1,022.20 1.62% 8.15
Class C Shares ................ 1,000.00 1,019.20 2.22% 11.15
HYPOTHETICAL
Fiduciary Shares .............. $1,000.00 $1,018.15 1.35% $ 6.77
Class A Shares ................ 1,000.00 1,016.81 1.62% 8.12
Class C Shares ................ 1,000.00 1,013.82 2.22% 11.12
--------------------------------------------------------------------------------
INTERNATIONAL OPPORTUNITIES FUND
--------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $ 998.40 1.31% $ 6.51
Class A Shares ................ 1,000.00 998.40 1.49% 7.40
Class C Shares ................ 1,000.00 995.20 2.17% 10.76
Class M Shares ................ 1,000.00 998.40 1.17% 5.81
HYPOTHETICAL
Fiduciary Shares .............. $1,000.00 $1,018.35 1.31% $ 6.57
Class A Shares ................ 1,000.00 1,017.45 1.49% 7.47
Class C Shares ................ 1,000.00 1,014.07 2.17% 10.87
Class M Shares ................ 1,000.00 1,019.05 1.17% 5.87
--------------------------------------------------------------------------------
LARGE CAP CORE EQUITY FUND
--------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $1,062.90 0.93% $ 4.77
Class A Shares ................ 1,000.00 1,061.50 1.23% 6.30
Class C Shares ................ 1,000.00 1,059.40 1.83% 9.37
HYPOTHETICAL
Fiduciary Shares .............. $1,000.00 $1,020.24 0.93% $ 4.67
Class A Shares ................ 1,000.00 1,018.75 1.23% 6.17
Class C Shares ................ 1,000.00 1,015.76 1.83% 9.17
--------------------------------------------------------------------------------
LARGE CAP GROWTH FUND
--------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $1,095.70 1.01% $ 5.26
Class A Shares ................ 1,000.00 1,094.50 1.27% 6.61
Class B Shares ................ 1,000.00 1,092.00 1.87% 9.73
Class C Shares ................ 1,000.00 1,091.80 1.87% 9.73
HYPOTHETICAL
Fiduciary Shares .............. $1,000.00 $1,019.84 1.01% $ 5.07
Class A Shares ................ 1,000.00 1,018.55 1.27% 6.37
Class B Shares ................ 1,000.00 1,015.56 1.87% 9.37
Class C Shares ................ 1,000.00 1,015.56 1.87% 9.37
BEGINNING ENDING NET EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE AT VALUE AT EXPENSE DURING
2/1/12 7/31/12 RATIOS PERIOD*
--------------------------------------------------------------------------------
NYSE ARCA TECH 100 INDEX FUND
--------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $1,036.50 0.81% $ 4.10
Class A Shares ................ 1,000.00 1,035.00 1.08% 5.46
Class B Shares ................ 1,000.00 1,032.10 1.68% 8.49
Class C Shares ................ 1,000.00 1,032.10 1.68% 8.49
HYPOTHETICAL
Fiduciary Shares .............. $1,000.00 $1,020.84 0.81% $ 4.07
Class A Shares ................ 1,000.00 1,019.49 1.08% 5.42
Class B Shares ................ 1,000.00 1,016.51 1.68% 8.42
Class C Shares ................ 1,000.00 1,016.51 1.68% 8.42
--------------------------------------------------------------------------------
SMALL CAP CORE FUND
--------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $1,022.90 1.33% $ 6.69
Class A Shares ................ 1,000.00 1,021.50 1.62% 8.14
Class C Shares ................ 1,000.00 1,018.80 2.22% 11.14
HYPOTHETICAL
Fiduciary Shares .............. $1,000.00 $1,018.25 1.33% $ 6.67
Class A Shares ................ 1,000.00 1,016.81 1.62% 8.12
Class C Shares ................ 1,000.00 1,013.82 2.22% 11.12
--------------------------------------------------------------------------------
VALUE FUND**
--------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $1,036.10 1.00% $ 5.06
Class A Shares ................ 1,000.00 1,034.70 1.26% 6.37
Class B Shares ................ 1,000.00 1,031.70 1.86% 9.40
Class C Shares ................ 1,000.00 1,032.10 1.86% 9.40
Class U Shares ................ 1,000.00 1,037.00 0.86% 5.03
HYPOTHETICAL
Fiduciary Shares .............. $1,000.00 $1,019.89 1.00% $ 5.02
Class A Shares ................ 1,000.00 1,018.60 1.26% 6.32
Class B Shares ................ 1,000.00 1,015.61 1.86% 9.32
Class C Shares ................ 1,000.00 1,015.61 1.86% 9.32
Class U Shares ................ 1,000.00 1,023.75 0.86% 4.99
--------------------------------------------------------------------------------
TACTICAL CAPITAL GROWTH ALLOCATION FUND
--------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $1,028.10 0.33% $ 1.66
Class A Shares ................ 1,000.00 1,027.00 0.58% 2.92
Class C Shares ................ 1,000.00 1,023.10 1.28% 6.44
HYPOTHETICAL
Fiduciary Shares .............. $1,000.00 $1,023.22 0.33% $ 1.66
Class A Shares ................ 1,000.00 1,021.98 0.58% 2.92
Class C Shares ................ 1,000.00 1,018.50 1.28% 6.42
--------------------------------------------------------------------------------
TACTICAL GROWTH & INCOME ALLOCATION FUND
--------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $1,027.10 0.33% $ 1.66
Class A Shares ................ 1,000.00 1,025.90 0.58% 2.92
Class C Shares ................ 1,000.00 1,022.10 1.28% 6.44
HYPOTHETICAL
Fiduciary Shares .............. $1,000.00 $1,023.22 0.33% $ 1.66
Class A Shares ................ 1,000.00 1,021.98 0.58% 2.92
Class C Shares ................ 1,000.00 1,018.50 1.28% 6.42
HIGHMARK(R) FUNDS 41
DISCLOSURE OF FUND EXPENSES (UNAUDITED) (CONCLUDED)
BEGINNING ENDING NET EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE AT VALUE AT EXPENSE DURING
2/1/12 7/31/12 RATIOS PERIOD*
--------------------------------------------------------------------------------
BOND FUND
--------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $1,034.30 0.74% $ 3.74
Class A Shares ................ 1,000.00 1,032.70 0.99% 5.00
Class B Shares ................ 1,000.00 1,030.10 1.67% 8.43
Class C Shares ................ 1,000.00 1,030.70 1.42% 7.17
HYPOTHETICAL
Fiduciary Shares .............. $1,000.00 $1,021.18 0.74% $ 3.72
Class A Shares ................ 1,000.00 1,019.94 0.99% 4.97
Class B Shares ................ 1,000.00 1,016.56 1.67% 8.37
Class C Shares ................ 1,000.00 1,017.80 1.42% 7.12
--------------------------------------------------------------------------------
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND
--------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $1,016.30 0.54% $ 2.71
Class A Shares ................ 1,000.00 1,014.20 0.79% 3.96
Class C Shares ................ 1,000.00 1,012.00 1.24% 6.20
HYPOTHETICAL
Fiduciary Shares .............. $1,000.00 $1,022.18 0.54% $ 2.72
Class A Shares ................ 1,000.00 1,020.93 0.79% 3.97
Class C Shares ................ 1,000.00 1,018.70 1.24% 6.22
--------------------------------------------------------------------------------
NATIONAL INTERMEDIATE TAX-FREE BOND FUND
--------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $1,014.10 0.52% $ 2.60
Class A Shares ................ 1,000.00 1,012.80 0.77% 3.85
Class C Shares ................ 1,000.00 1,010.50 1.22% 6.10
HYPOTHETICAL
Fiduciary Shares .............. $1,000.00 $1,022.28 0.52% $ 2.61
Class A Shares ................ 1,000.00 1,021.03 0.77% 3.87
Class C Shares ................ 1,000.00 1,018.80 1.22% 6.12
--------------------------------------------------------------------------------
SHORT TERM BOND FUND
--------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $1,015.70 0.61% $ 3.06
Class A Shares ................ 1,000.00 1,013.40 0.88% 4.41
Class C Shares ................ 1,000.00 1,011.90 1.33% 6.65
HYPOTHETICAL
Fiduciary Shares .............. $1,000.00 $1,021.83 0.61% $ 3.07
Class A Shares ................ 1,000.00 1,020.49 0.88% 4.42
Class C Shares ................ 1,000.00 1,018.25 1.33% 6.67
--------------------------------------------------------------------------------
WISCONSIN TAX-EXEMPT FUND
--------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares .............. $1,000.00 $1,019.40 0.65% $ 3.26
Class A Shares ................ 1,000.00 1,018.10 0.90% 4.52
Class B Shares ................ 1,000.00 1,015.40 1.60% 8.02
Class C Shares ................ 1,000.00 1,016.80 1.36% 6.82
HYPOTHETICAL
Fiduciary Shares .............. $1,000.00 $1,021.63 0.65% $ 3.27
Class A Shares ................ 1,000.00 1,020.39 0.90% 4.52
Class B Shares ................ 1,000.00 1,016.91 1.60% 8.02
Class C Shares ................ 1,000.00 1,018.10 1.36% 6.82
----------
* Expenses are equal to the fund's annualized expense ratio multiplied by
the average account value over the period, multiplied by 182/366 (to
reflect the one half year period).
** Value Fund Class U commenced operations on January 4, 2012.
42 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2012
BALANCED FUND
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
COMMON STOCK - 64.0%+
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 7.8%
Bed Bath & Beyond * 3,220 $ 196,259
Dick's Sporting Goods 5,855 287,598
Dollar Tree * 5,100 256,734
PetSmart 4,805 317,659
Sally Beauty Holdings * 10,710 282,958
TJX Companies 6,575 291,141
Yum! Brands 4,080 264,547
------------
1,896,896
------------
CONSUMER STAPLES - 9.1%
Altria Group 11,080 398,548
Anheuser-Busch InBev NV, SP ADR 4,385 347,380
Coca-Cola 3,530 285,224
Costco Wholesale 2,330 224,099
Kraft Foods, Cl A 9,290 368,906
Philip Morris International 4,085 373,532
Procter & Gamble 3,500 225,890
------------
2,223,579
------------
ENERGY - 7.4%
BG Group PLC, SP ADR 10,755 213,057
Chevron 2,785 305,180
ExxonMobil 8,290 719,987
Occidental Petroleum 4,690 408,171
Royal Dutch Shell PLC, ADR 2,435 166,067
------------
1,812,462
------------
FINANCIALS - 7.8%
American Tower REIT 5,890 425,906
Arch Capital Group * ++ 5,300 205,640
US Bancorp 16,775 561,963
Wells Fargo 21,425 724,379
------------
1,917,888
------------
HEALTH CARE - 4.7%
Covidien ++ 3,405 190,271
Fresenius Medical Care, ADR 2,295 165,309
Johnson & Johnson 4,450 308,029
Merck 4,880 215,550
Pfizer 11,287 271,339
------------
1,150,498
------------
INDUSTRIAL - 8.1%
Danaher 12,685 669,895
Donaldson 7,480 255,292
JB Hunt Transport Services 5,450 299,859
Stericycle * 3,120 289,692
United Parcel Service, Cl B 2,295 173,525
WW Grainger 1,430 292,907
------------
1,981,170
------------
--------------------------------------------------------------------------------
Description Shares/Par Value
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
INFORMATION TECHNOLOGY - 12.2%
Accenture, Cl A ++ 2,715 $ 163,714
Analog Devices 8,090 316,157
ANSYS * 2,385 143,005
Apple * 1,750 1,068,830
Broadcom, Cl A 6,310 213,783
EMC * 16,830 441,114
International Business Machines 1,635 320,427
Qualcomm 5,490 327,643
------------
2,994,673
------------
MATERIALS - 5.7%
Ecolab 8,725 571,051
Praxair 8,040 834,230
------------
1,405,281
------------
UTILITIES - 1.2%
ITC Holdings 1,975 146,525
Wisconsin Energy 3,435 139,942
------------
286,467
------------
TOTAL COMMON STOCK
(Cost $11,373,055) 15,668,914
------------
--------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - 16.7%
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 2.1%
CCO Holdings / CCO Holdings Capital
7.375%, 06/01/20 $ 50,000 55,500
Comcast
5.700%, 07/01/19 50,000 60,733
DIRECTV Holdings / DIRECTV
Financing
2.400%, 03/15/17 50,000 51,329
Gap
5.950%, 04/12/21 45,000 47,525
Iron Mountain
7.750%, 10/01/19 25,000 27,750
Levi Strauss
6.875%, 05/01/22 50,000 51,437
Sally Holdings / Sally Capital
5.750%, 06/01/22 30,000 32,063
Staples
9.750%, 01/15/14 50,000 55,702
Time Warner Entertainment
8.375%, 03/15/23 100,000 139,870
------------
521,909
------------
ENERGY - 2.9%
Cimarex Energy
5.875%, 05/01/22 35,000 37,275
El Paso Pipeline Partners
Operating
5.000%, 10/01/21 60,000 65,448
Energy Transfer Partners
9.700%, 03/15/19 100,000 129,797
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 43
SCHEDULE OF INVESTMENTS
JULY 31, 2012
BALANCED FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - (CONTINUED)
--------------------------------------------------------------------------------
ENERGY - (CONTINUED)
Kinder Morgan Energy Partners
3.950%, 09/01/22 $ 75,000 $ 79,129
Magellan Midstream Partners
6.550%, 07/15/19 50,000 61,099
Newfield Exploration
5.625%, 07/01/24 35,000 37,319
Petrobras International Finance
3.875%, 01/27/16 75,000 77,969
Petrohawk Energy
7.875%, 06/01/15 61,000 63,440
Transocean
5.050%, 12/15/16 50,000 55,358
Weatherford International
4.500%, 04/15/22 40,000 41,849
Williams Partners
4.125%, 11/15/20 50,000 54,364
------------
703,047
------------
FINANCIALS - 4.9%
American International Group
4.250%, 09/15/14 100,000 104,492
Bank of America, MTN
5.650%, 05/01/18 100,000 110,399
BB&T, MTN
2.150%, 03/22/17 50,000 51,566
Berkshire Hathaway Finance
5.400%, 05/15/18 50,000 60,371
Boston Properties
4.125%, 05/15/21 50,000 54,072
Capital One Bank USA
8.800%, 07/15/19 30,000 38,640
Capital One Financial
4.750%, 07/15/21 25,000 27,850
Citigroup
4.750%, 05/19/15 75,000 79,441
Ford Motor Credit
5.000%, 05/15/18 100,000 106,586
GE Global Insurance
7.750%, 06/15/30 90,000 114,403
General Electric Capital, MTN
2.300%, 04/27/17 100,000 102,226
JPMorgan Chase
4.250%, 10/15/20 100,000 108,342
Lehman Brothers Holdings, MTN (B)
5.625%, 01/24/13 125,000 30,313
NASDAQ OMX Group
5.250%, 01/16/18 50,000 53,930
SLM, MTN
6.000%, 01/25/17 40,000 41,900
Wells Fargo
5.625%, 12/11/17 100,000 118,729
------------
1,203,260
------------
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - (CONTINUED)
--------------------------------------------------------------------------------
FOREIGN GOVERNMENT - 0.2%
Export-Import Bank of Korea
4.000%, 01/11/17 $ 50,000 $ 53,573
------------
HEALTH CARE - 1.3%
Amgen
3.875%, 11/15/21 50,000 54,622
3.625%, 05/15/22 50,000 53,301
Gilead Sciences
4.400%, 12/01/21 25,000 28,401
Laboratory Corp of America Holdings
4.625%, 11/15/20 50,000 55,764
Teva Pharmaceutical Finance
3.650%, 11/10/21 50,000 54,470
Wellpoint
6.000%, 02/15/14 58,000 62,319
------------
308,877
------------
INDUSTRIAL - 1.1%
Continental Airlines Pass
Through
Trust Ser 2010-1, Cl A
4.750%, 01/12/21 71,576 75,155
Delta Air Lines, Ser 11-1A
5.300%, 04/15/19 32,582 34,863
L-3 Communications, Ser B
6.375%, 10/15/15 51,000 52,084
Masco
5.950%, 03/15/22 40,000 41,814
Republic Services
3.550%, 06/01/22 30,000 31,551
United Technologies
3.100%, 06/01/22 25,000 26,887
------------
262,354
------------
INFORMATION TECHNOLOGY - 0.5%
Hewlett-Packard
4.375%, 09/15/21 75,000 77,186
Xerox
2.950%, 03/15/17 50,000 50,545
------------
127,731
------------
MATERIALS - 2.3%
Alcoa
5.400%, 04/15/21 50,000 51,251
ArcelorMittal
4.500%, 02/25/17 50,000 49,497
Ball
7.375%, 09/01/19 65,000 72,150
Dow Chemical
4.250%, 11/15/20 75,000 83,633
Ecolab
4.350%, 12/08/21 40,000 45,348
Georgia-Pacific
8.000%, 01/15/24 75,000 103,010
The accompanying notes are an integral part of the financial statements.
44 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2012
BALANCED FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - (CONTINUED)
--------------------------------------------------------------------------------
MATERIALS - (CONTINUED)
Rio Tinto Finance USA
6.500%, 07/15/18 $ 25,000 $ 31,205
Teck Resources
10.250%, 05/15/16 75,000 82,875
Vale Overseas
4.375%, 01/11/22 35,000 36,583
------------
555,552
------------
TELECOMMUNICATION SERVICES - 0.9%
Telefonica Emisiones SAU
3.992%, 02/16/16 60,000 56,129
Verizon Maryland
8.000%, 10/15/29 75,000 97,459
Verizon New England
7.875%, 11/15/29 50,000 62,679
------------
216,267
------------
UTILITIES - 0.5%
Exelon Generation 50,000 58,647
6.200%, 10/01/17
Sempra Energy 50,000 61,440
6.150%, 06/15/18
------------
120,087
------------
TOTAL CORPORATE OBLIGATIONS
(Cost $3,881,331) 4,072,657
------------
--------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS - 4.3%
--------------------------------------------------------------------------------
FHLMC Gold
6.000%, 09/01/17 29,823 31,879
5.000%, 10/01/20 12,333 13,269
4.500%, 03/01/18 10,854 11,549
4.500%, 05/01/19 15,514 16,665
4.500%, 07/01/23 27,630 29,551
FNMA
8.000%, 05/01/25 9,993 10,387
7.000%, 07/01/26 12,211 14,041
7.000%, 12/01/27 10,482 12,067
6.500%, 05/01/14 7,489 7,818
6.500%, 01/01/28 8,425 9,696
6.000%, 02/01/17 33,059 35,325
6.000%, 03/01/28 12,482 14,048
5.500%, 12/01/17 34,371 37,233
5.000%, 12/01/17 8,522 9,259
5.000%, 04/01/18 46,016 49,994
5.000%, 11/01/18 5,244 5,697
5.000%, 09/01/25 60,360 65,343
5.000%, 03/01/34 87,539 95,883
4.500%, 02/01/19 42,577 46,031
4.500%, 05/01/19 106,567 115,146
4.500%, 06/01/19 14,646 15,825
4.000%, 09/01/18 10,491 11,301
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED
--------------------------------------------------------------------------------
OBLIGATIONS - (CONTINUED)
FNMA (continued)
4.000%, 01/01/26 $ 67,458 $ 72,182
3.500%, 09/01/25 99,814 106,165
3.500%, 10/01/26 109,190 116,138
GNMA
7.000%, 02/15/26 13,546 16,158
7.000%, 10/15/27 12,019 14,402
7.000%, 03/15/29 14,112 16,894
6.500%, 05/15/28 10,531 12,446
6.500%, 01/15/29 10,909 12,736
6.000%, 04/15/29 30,875 35,245
------------
TOTAL U.S. GOVERNMENT AGENCY
MORTGAGE-BACKED OBLIGATIONS
(Cost $999,515) 1,060,373
------------
--------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES - 3.6%
--------------------------------------------------------------------------------
Chase Mortgage Finance,
Ser 2004-S1, CI A3
5.500%, 02/25/19 47,191 48,948
Citicorp Mortgage Securities,
Ser 2003-10, Cl A1
4.500%, 11/25/18 44,912 46,165
CS First Boston Mortgage
Securities,
Ser 2005-C1, Cl A4 (C)
5.014%, 02/15/38 150,000 162,897
DBUBS Mortgage Trust,
Ser 2011-LC1A, Cl A1 (A)
3.742%, 11/10/46 72,765 78,806
Lehman Mortgage Trust,
Ser 2007-8, Cl 1A1
6.000%, 09/25/37 140,792 122,272
Morgan Stanley Capital I,
Ser 2003-T11, Cl A4
5.150%, 06/13/41 95,377 98,124
Sequoia Mortgage Trust,
Ser 2012-2, Cl A2 (C)
3.500%, 04/25/42 72,785 76,312
Ser 2012-1, Cl 2A1 (C)
3.474%, 01/25/42 45,399 46,718
Wells Fargo Mortgage Backed
Securities Trust,
Ser 2007-7, Cl A1
6.000%, 06/25/37 133,555 124,172
Ser 2004-2, Cl A1
5.000%, 02/25/19 56,938 58,232
Ser 2003-M, Cl A1 (C)
4.692%, 12/25/33 17,709 17,978
------------
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $877,136) 880,624
------------
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 45
SCHEDULE OF INVESTMENTS
JULY 31, 2012
BALANCED FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
ASSET-BACKED SECURITIES - 1.9%
--------------------------------------------------------------------------------
AEP Texas Central Transition Funding,
Ser 2012-1, Cl A1
0.880%, 12/01/18 $ 100,000 $ 100,647
Avis Budget Rental Car Funding
AESOP, Ser 2011-1A, Cl A (A)
1.850%, 11/20/14 100,000 100,750
Hertz Vehicle Financing,
Ser 2011-1A, Cl A1 (A)
2.200%, 03/25/16 100,000 102,497
SLM Student Loan Trust,
Ser 2011-A, Cl A1 (A) (C)
1.249%, 10/15/24 77,867 78,004
World Omni Auto Receivables Trust,
Ser 2011-A, Cl A4
1.910%, 04/15/16 75,000 76,862
------------
TOTAL ASSET-BACKED SECURITIES
(Cost $452,867) 458,760
------------
--------------------------------------------------------------------------------
TAXABLE MUNICIPAL BONDS - 1.4%
--------------------------------------------------------------------------------
CALIFORNIA - 1.3%
California State, Public School
Improvements, Taxable, GO
6.200%, 10/01/19 50,000 59,904
Los Angeles, Department of
Water & Power Revenue,
Build America Bonds,
Taxable, RB
6.574%, 07/01/45 50,000 74,727
Metropolitan Water District of
Southern California, Build
America Bonds, Taxable, RB
6.947%, 07/01/40 100,000 122,528
University of California
Revenue, Build America Bonds,
Taxable, RB (C)
1.988%, 05/15/50 50,000 50,556
------------
307,715
------------
NEW JERSEY - 0.1%
New Jersey State, Turnpike
Authority Turnpike Revenue,
Build America Bonds,
Taxable, RB
7.102%, 01/01/41 25,000 36,495
------------
TOTAL TAXABLE MUNICIPAL BONDS
(Cost $283,473) 344,210
------------
--------------------------------------------------------------------------------
Description Shares/Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 0.0%
--------------------------------------------------------------------------------
Dreyfus Cash Management 3,247 $ 3,247
------------
TOTAL REGISTERED INVESTMENT COMPANY
(Cost $3,247) 3,247
------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 8.3%
--------------------------------------------------------------------------------
Credit Suisse Securities (USA)
0.150%, dated 07/31/12,
mature on 08/01/12,
repurchase price $2,035,481
(collateralized by a U.S. Treasury
obligation, par value
$2,030,000, 1.0%, 03/31/17,
total market value $2,079,666) $ 2,035,472 2,035,472
------------
TOTAL REPURCHASE AGREEMENT
(Cost $2,035,472) 2,035,472
------------
TOTAL INVESTMENTS - 100.2%
(Cost $19,906,096) 24,524,257
------------
OTHER ASSETS & LIABILITIES, NET - (0.2)% (47,211)
------------
NET ASSETS - 100.0% $ 24,477,046
============
--------------------------------------------------------------------------------
* 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 VALUES OF THESE
SECURITIES AS OF JULY 31, 2012 WERE $360,057 AND REPRESENTED 1.5% OF NET
ASSETS.
(B) THE ISSUER IS IN DEFAULT OF CERTAIN DEBT COVENANTS. INCOME IS NOT BEING
ACCRUED. AS OF JULY 31, 2012, THE VALUE OF THESE SECURITIES AMOUNTED TO
$30,313, WHICH REPRESENTS 0.1% OF NET ASSETS.
(C) FLOATING RATE SECURITY. RATE DISCLOSED IS AS OF JULY 31, 2012.
ADR - AMERICAN DEPOSITARY RECEIPT
CL - CLASS
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
SER - SERIES
SP ADR - SPONSORED AMERICAN DEPOSITARY RECEIPT
The accompanying notes are an integral part of the financial statements.
46 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2012
BALANCED FUND (CONCLUDED)
A summary of the inputs used to value the Fund's net assets as of July 31, 2012
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
07/31/12 PRICE INPUTS INPUTS
------------ ------------- ------------ -------------
Common Stock ** $ 15,668,914 $ 15,668,914 $ -- $ --
Corporate Obligations 4,072,657 -- 4,072,657 --
U.S. Government Agency Mortgage-Backed Obligations 1,060,373 -- 1,060,373 --
Mortgage-Backed Securities 880,624 -- 880,624 --
Asset-Backed Securities 458,760 -- 458,760 --
Taxable Municipal Obligations 344,210 -- 344,210 --
Repurchase Agreement 2,035,472 -- 2,035,472 --
Registered Investment Company 3,247 3,247 -- --
------------ ------------- ------------ -------------
Total: $ 24,524,257 $ 15,672,161 $ 8,852,096 $ --
============ ============= ============ =============
** See schedule of investments detail for industry breakout.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 47
SCHEDULE OF INVESTMENTS
JULY 31, 2012
COGNITIVE VALUE FUND
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - 95.0%+
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 12.8%
Aaron's * 12,100 $ 354,893
Ark Restaurants 11,700 174,447
Ascena Retail Group * 30,600 561,204
Ballantyne Strong * 14,500 77,575
Belo, Cl A 65,000 445,250
Bluegreen * 75,600 362,124
Blyth 11,800 404,504
Cabela's * 17,100 785,574
Chico's FAS 28,400 435,088
Coinstar * 9,300 441,657
Cooper Tire & Rubber 17,500 305,725
Crown Crafts 29,200 160,892
CSS Industries 15,600 292,344
Dillard's, Cl A 7,200 469,656
Flexsteel Industries 14,700 314,433
Gannett 32,500 458,575
Harman International Industries 6,200 250,170
Hot Topic 51,200 520,192
LeapFrog Enterprises * 27,800 319,422
Luby's * 3,000 19,890
Marriott Vacations Worldwide * 3,200 99,264
Movado Group 13,300 311,752
Multimedia Games Holding * 9,100 128,765
Nautilus * 98,149 314,077
Penn National Gaming * 5,400 210,168
Rent-A-Center 16,900 600,964
RG Barry 12,700 169,164
Rick's Cabaret International * 47,100 397,524
Saga Communications, Cl A * 2,300 77,970
Skechers U.S.A., Cl A * 1,300 25,922
Texas Roadhouse 15,700 271,767
Thor Industries 12,400 356,252
True Religion Apparel 12,100 317,504
Unifi * 6,200 68,696
------------
10,503,404
------------
CONSUMER STAPLES - 3.1%
Andersons 11,500 436,655
Cal-Maine Foods 16,900 637,637
Cott (Canada) * 15,000 126,450
John B Sanfilippo & Son * 12,100 205,216
Oil-Dri 7,600 166,668
Orchids Paper Products 9,000 153,000
Snyders-Lance 11,000 257,730
Susser Holdings * 4,500 162,495
Universal 4,700 214,038
USANA Health Sciences * 4,000 179,920
------------
2,539,809
------------
ENERGY - 5.8%
Adams Resources & Energy 7,000 290,920
Cloud Peak Energy * 29,400 486,570
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
ENERGY - (CONTINUED)
Contango Oil & Gas * 5,100 $ 302,175
CVR Energy * 28,800 822,528
Helix Energy Solutions Group * 49,400 883,272
McDermott International * 39,200 458,640
Natural Gas Services Group * 18,800 272,600
Parker Drilling * 40,800 188,904
Vaalco Energy * 37,011 271,291
Western Refining 34,800 818,844
------------
4,795,744
------------
FINANCIALS - 25.6%
1st Source 32,200 715,484
Allied World Assurance Co
Holdings AG ++ 9,550 720,357
American Assets Trust REIT 11,500 299,000
AMERISAFE * 25,700 641,600
Associated Bancorp 31,500 393,435
Bar Harbor Bankshares 2,300 80,109
Berkshire Bancorp * 9,600 79,392
C&F Financial 3,100 126,883
Calamos Asset Management, Cl A 26,600 281,162
Center Bancorp 17,900 197,795
Central Pacific Financial * 41,900 561,460
Century Bancorp, Cl A 3,200 96,256
Citizens & Northern 31,000 573,190
Citizens Republic Bancorp * 33,100 595,800
CoBiz Financial 25,300 169,510
Commerce Bancshares 5,300 208,714
Douglas Emmett REIT 10,300 242,153
Dupont Fabros Technology REIT 14,900 400,810
Extra Space Storage REIT 22,300 730,102
Farmers National Banc 13,300 78,204
Financial Institutions 26,700 459,240
First Merchants 42,800 609,044
Government Properties Income
Trust REIT 3,700 84,730
Granite Real Estate (Canada) 6,100 217,038
Hanmi Financial * 15,400 168,630
HCC Insurance Holdings 10,500 321,720
Heartland Financial USA 6,500 169,845
Highwoods Properties REIT 9,700 328,539
Home Properties REIT 6,700 439,587
Lexington Realty Trust REIT 25,100 224,394
Mack-Cali Realty REIT 8,500 227,715
MainSource Financial Group 12,800 149,504
Meadowbrook Insurance Group 21,900 154,176
Mercantile Bank * 8,842 146,423
Mercury General 12,600 456,372
MicroFinancial 37,200 358,980
Mission West Properties REIT 45,500 400,855
Monmouth Real Estate Investment
REIT, Cl A 30,100 335,314
The accompanying notes are an integral part of the financial statements.
48 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2012
COGNITIVE VALUE FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
FINANCIALS - (CONTINUED)
Montpelier Re Holdings ++ 31,600 $ 640,216
National Retail Properties REIT 10,100 297,950
Nelnet, Cl A 18,400 432,584
Peapack Gladstone Financial 1,800 27,540
Peoples Bancorp 14,200 310,412
Post Properties REIT 9,800 506,170
Primerica 20,900 572,033
ProAssurance 5,400 483,678
Protective Life 26,700 745,197
Republic Bancorp, Cl A 27,700 653,997
RLI 5,400 347,814
Southside Bancshares 3,600 75,096
SVB Financial Group * 11,600 670,596
UMB Financial 5,900 283,554
UMH Properties REIT 14,700 164,346
United Fire Group 25,800 505,680
Urstadt Biddle Properties, Cl A REIT 12,900 244,971
Validus Holdings ++ 21,500 699,395
Webster Financial 28,700 588,924
White River Capital 3,900 87,555
World Acceptance * 3,400 242,318
------------
21,023,548
------------
HEALTH CARE - 6.8%
Almost Family * 13,800 303,738
Amsurg * 11,500 339,710
Analogic 10,000 640,200
Cambrex * 34,200 315,666
Community Health Systems * 7,000 172,270
CONMED 17,700 485,688
Hill-Rom Holdings 10,500 274,575
Impax Laboratories * 4,800 106,656
LifePoint Hospitals * 9,500 362,140
Mediware Information Systems * 17,400 239,946
NuVasive * 6,100 127,429
Omnicell * 24,200 315,810
PerkinElmer 18,400 470,120
Pozen * 26,500 167,215
RTI Biologics * 98,000 348,880
Universal American * 21,100 189,056
WellCare Health Plans * 5,400 350,028
West Pharmaceutical Services 4,200 209,076
Young Innovations 3,500 126,315
------------
5,544,518
------------
INDUSTRIAL - 17.5%
Aircastle 21,400 253,162
Alaska Air Group * 17,400 606,390
Allied Motion Technologies 11,400 66,690
AO Smith 4,800 237,216
Argan 43,000 679,830
AZZ 11,300 347,023
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
INDUSTRIAL - (CONTINUED)
Barrett Business Services 32,000 $ 835,840
Beacon Roofing Supply * 8,200 217,382
Brink's 16,300 378,160
Cascade 5,100 240,261
Con-way 13,200 470,184
Deluxe 6,100 172,752
Encore Capital Group * 8,300 232,400
EnerSys * 23,000 785,450
Espey Manufacturing & Electronics 15,900 453,786
Exelis 12,800 120,320
FreightCar America 19,900 404,766
Huntington Ingalls Industries * 19,000 740,810
Intersections 36,800 524,032
Kadant * 22,900 474,259
Lincoln Electric Holdings 4,800 191,424
Lydall * 18,200 232,232
Mine Safety Appliances 14,800 507,936
Mueller Industries 4,900 208,887
NACCO Industries, Cl A 6,700 671,005
On Assignment * 11,000 171,490
Oshkosh * 9,400 211,688
Park-Ohio Holdings * 15,800 271,286
Portfolio Recovery Associates * 200 16,936
Powell Industries * 8,700 298,149
Safe Bulkers ++ 28,800 171,648
Sauer-Danfoss 10,300 372,757
Spirit Airlines * 12,700 273,177
Steelcase, Cl A 28,500 244,245
Supreme Industries, Cl A * 38,900 155,211
Sypris Solutions 31,100 193,131
TAL International Group 4,200 143,430
Triumph Group 4,200 262,626
TrueBlue * 20,200 307,444
U.S. Home Systems 24,900 226,839
UniFirst 5,400 338,148
Universal Truckload Services 2,999 44,655
URS 17,800 624,246
------------
14,379,303
------------
INFORMATION TECHNOLOGY - 12.5%
Actuate * 52,354 338,207
Dice Holdings * 39,900 300,846
Diebold 8,400 271,740
Electronics for Imaging * 26,200 383,044
Entegris * 64,300 517,615
Forrester Research 6,000 171,240
Global Cash Access Holdings * 61,500 397,290
IEC Electronics * 27,100 170,459
Ingram Micro, Cl A * 25,900 388,241
Itron * 8,200 319,554
Key Tronic * 38,400 284,928
Kulicke & Soffa Industries * 38,200 422,874
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 49
SCHEDULE OF INVESTMENTS
JULY 31, 2012
COGNITIVE VALUE FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
INFORMATION TECHNOLOGY - (CONTINUED)
Magnachip Semiconductor * ++ 40,600 $ 413,308
MAXIMUS 16,900 853,450
Mentor Graphics * 52,000 794,560
MKS Instruments 15,500 409,200
MTS Systems 17,400 756,378
Netgear * 7,200 249,336
Plexus * 12,200 350,384
Power Integrations 6,900 243,156
SS&C Technologies Holdings * 6,500 157,950
Tech Data * 9,000 450,900
Tessco Technologies 16,100 301,875
Tucows * ++ 175,600 214,232
Veeco Instruments * 7,700 274,967
Vishay Intertechnology * 28,800 284,256
Wayside Technology Group 15,000 191,850
Xyratex Ltd ++ 27,700 327,691
------------
10,239,531
------------
MATERIALS - 6.6%
Bemis 18,900 581,175
Cabot 5,400 210,600
Chemtura * 11,900 160,888
Core Molding Technologies * 41,700 333,600
Domtar 1,900 140,334
Friedman Industries 40,800 372,096
Haynes International 4,200 202,398
HB Fuller 6,700 195,774
Huntsman 45,300 573,045
KMG Chemicals 9,900 177,012
Methanex (Canada) 8,200 226,074
Minerals Technologies 1,600 102,304
Myers Industries 14,500 238,380
Neenah Paper 18,700 502,282
Omnova Solutions * 47,700 347,256
PH Glatfelter 39,000 620,490
Schweitzer-Mauduit International 3,500 238,350
Westlake Chemical 3,900 231,504
------------
5,453,562
------------
TELECOMMUNICATION SERVICES - 0.4%
USA Mobility 26,700 297,438
------------
UTILITIES - 3.9%
El Paso Electric 12,400 419,740
Great Plains Energy 7,300 161,914
Hawaiian Electric Industries 9,000 256,410
PNM Resources 19,100 397,280
Portland General Electric 25,900 705,257
TECO Energy 8,700 158,253
Unitil 6,000 159,360
UNS Energy 5,000 203,500
--------------------------------------------------------------------------------
Description Shares/Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
UTILITIES - (CONTINUED)
Vectren 23,600 $ 704,460
------------
3,166,174
------------
TOTAL COMMON STOCK
(Cost $73,459,708) 77,943,031
------------
--------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANIES - 3.5%
--------------------------------------------------------------------------------
iShares Russell 2000 Value Index
Fund ETF 10,600 736,806
iShares S&P SmallCap 600 Value
Index Fund ETF 9,900 730,818
Rydex S&P SmallCap 600 Pure
Value ETF 24,300 898,857
Vanguard S&P Small-Cap 600
Value ETF 7,500 474,450
------------
TOTAL REGISTERED INVESTMENT COMPANIES
(Cost $2,462,911) 2,840,931
------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 0.7%
--------------------------------------------------------------------------------
Credit Suisse Securities (USA)
0.150%, dated 07/31/12,
mature on 08/01/12,
repurchase price $599,636
(collateralized by a U.S.
Treasury obligation, par
value $600,000, 1.00%,
03/31/17, total market
value $614,680) $ 599,633 599,633
------------
TOTAL REPURCHASE AGREEMENT
(Cost $599,633) 599,633
------------
TOTAL INVESTMENTS - 99.2%
(Cost $76,522,252) 81,383,595
------------
OTHER ASSETS & LIABILITIES, NET - 0.8% 682,210
------------
NET ASSETS - 100.0% $ 82,065,805
============
--------------------------------------------------------------------------------
* 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
ETF - EXCHANGE TRADED FUND
REIT - REAL ESTATE INVESTMENT TRUST
S&P - STANDARD & POOR'S
The accompanying notes are an integral part of the financial statements.
50 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2012
COGNITIVE VALUE FUND (CONCLUDED)
A summary of the inputs used to value the Fund's net assets as of July 31, 2012
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
07/31/12 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Common Stock ** $ 77,943,031 $ 77,943,031 $ -- $ --
Registered Investment Companies 2,840,931 2,840,931 -- --
Repurchase Agreement 599,633 -- 599,633 --
------------ ------------ ------------ ------------
Total: $ 81,383,595 $ 80,783,962 $ 599,633 $ --
============ ============ ============ ============
** See schedule of investments detail for industry breakout.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 51
SCHEDULE OF INVESTMENTS
JULY 31, 2012
ENHANCED GROWTH FUND
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - 97.3%+
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 4.1%
Amazon.com * 3,660 $ 853,878
Comcast, Cl A 20,000 651,000
Expedia 10,480 597,255
Garmin ++ 10,500 405,405
Netflix * 1,900 108,015
Priceline.com * 1,000 661,740
------------
3,277,293
------------
HEALTH CARE - 7.4%
Affymax * 10,000 162,300
Agilent Technologies 9,760 373,710
Alexion Pharmaceuticals * 5,000 524,250
Alkermes * ++ 5,000 92,950
Amarin PLC ADR * 8,000 93,680
Amgen 5,000 413,000
Ariad Pharmaceuticals * 4,000 76,520
Biogen Idec * 2,200 320,826
Celgene * 6,000 410,760
Cubist Pharmaceuticals * 4,000 172,240
Endo Pharmaceuticals Holdings * 3,000 89,190
Gilead Sciences * 6,000 325,980
Illumina * 5,000 207,350
Impax Laboratories * 5,000 111,100
Incyte * 6,000 149,940
InterMune * 12,000 105,960
Life Technologies * 3,000 131,640
Medivation * 1,500 149,550
Myriad Genetics * 4,000 99,400
NuPathe * 29,000 112,810
Onyx Pharmaceuticals * 2,000 149,940
Optimer Pharmaceuticals * 10,000 136,600
Perrigo 2,200 250,844
QIAGEN * ++ 6,000 105,660
Questcor Pharmaceuticals * 2,000 73,740
Rigel Pharmaceuticals * 10,000 109,400
Salix Pharmaceuticals * 1,500 67,230
Shire PLC ADR 4,000 344,720
United Therapeutics * 3,000 164,340
Vertex Pharmaceuticals * 5,000 242,550
Vivus * 2,000 42,060
Warner Chilcott, Cl A * ++ 12,000 204,000
------------
6,014,240
------------
INFORMATION TECHNOLOGY - 85.5%
Accenture, Cl A ++ 22,350 1,347,705
ACI Worldwide * 4,400 193,644
Activision Blizzard 37,100 446,313
Adobe Systems * 14,000 432,320
Advanced Micro Devices * 50,600 205,436
Akamai Technologies * 8,000 281,440
Alliance Data Systems * 4,000 520,000
Altera 9,000 319,050
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
INFORMATION TECHNOLOGY - (CONTINUED)
Amdocs 16,100 $ 478,975
Amphenol, Cl A 8,500 500,480
Analog Devices 12,150 474,822
Apple 14,420 8,807,159
Applied Materials 45,250 492,772
ASML Holding ++ 6,047 347,703
Autodesk * 19,900 675,008
Automatic Data Processing 12,000 678,600
Avago Technologies ++ 7,000 259,000
Avnet * 8,590 270,585
Baidu, SP ADR * 3,500 421,820
BMC Software * 19,300 764,280
Broadcom, Cl A * 28,000 948,640
CA 20,500 493,435
Check Point Software Technologies * ++ 17,000 825,690
Cisco Systems 85,000 1,355,750
Citrix Systems * 11,800 857,624
Cognizant Technology Solutions, Cl A * 19,170 1,088,281
Computer Sciences 6,000 147,720
Corning 37,610 429,130
Cypress Semiconductor * 11,600 124,004
Dell 38,000 451,440
eBay * 25,000 1,107,500
Electronic Arts * 10,550 116,261
EMC * 52,720 1,381,791
Equinix * 1,200 213,816
F5 Networks * 8,300 775,054
Facebook, Cl A * 1,800 39,078
Fairchild Semiconductor International * 15,000 207,900
Fiserv * 7,800 547,014
Flextronics International * ++ 40,000 256,400
Google, Cl A * 5,200 3,291,444
GT Advanced Technologies * 42,200 216,064
Harris 8,230 342,779
Hewlett-Packard 21,710 395,990
Hitachi, ADR 9,500 559,075
IAC/InterActiveCorp 9,125 480,066
Informatica * 10,000 295,100
Intel 82,000 2,107,400
International Business Machines 13,550 2,655,529
Intersil, Cl A 12,650 116,507
Intuit 8,650 501,873
Juniper Networks * 19,600 343,588
KLA-Tencor 15,000 763,650
Lam Research * 20,550 707,126
Lexmark International, Cl A 8,000 139,920
Linear Technology 12,350 398,288
Marvell Technology Group ++ 57,650 649,139
Maxim Integrated Products 15,000 408,450
Microchip Technology 13,000 433,940
Micron Technology * 50,100 311,121
MICROS Systems * 4,250 202,895
The accompanying notes are an integral part of the financial statements.
52 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2012
ENHANCED GROWTH FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
INFORMATION TECHNOLOGY - (CONTINUED)
Microsoft 119,500 $ 3,521,665
NetApp * 22,020 719,393
Netease.com, ADR * 5,300 279,893
Nuance Communications * 14,500 295,075
NVIDIA * 33,425 452,575
ON Semiconductor * 60,700 421,258
Open Text (Canada) * 5,000 225,000
Oracle 73,300 2,213,660
Paychex 10,100 330,169
Polycom * 14,000 122,360
Qualcomm 39,600 2,363,328
Red Hat * 15,200 815,632
Research In Motion (Canada) * 17,000 121,550
Riverbed Technology * 18,300 322,812
Salesforce.com * 9,000 1,119,240
Samsung Electronics, GDR ++ 2,350 1,354,775
SanDisk * 20,000 822,600
SAP, ADR 6,300 399,168
Seagate Technology ++ 35,000 1,050,700
Siliconware Precision Industries, ADR 24,309 131,998
Sohu.com * 4,900 171,745
Symantec * 25,000 393,750
SYNNEX * 12,400 419,492
Taiwan Semiconductor Manufacturing,
SP ADR 31,506 440,139
TE Connectivity ++ 14,300 472,043
Teradata * 12,850 868,917
Teradyne * 20,000 294,200
Texas Instruments 36,000 980,640
TIBCO Software * 13,500 379,215
Trimble Navigation * 5,600 247,856
VeriSign * 14,000 621,880
VMware, Cl A * 6,700 608,092
Western Digital * 16,000 636,320
Xilinx 18,000 583,200
Yahoo! * 27,000 427,680
------------
69,231,604
------------
TELECOMMUNICATION SERVICES - 0.3%
Millicom International Cellular ++ 2,450 222,754
------------
TOTAL COMMON STOCK
(Cost $49,581,064) 78,745,891
------------
--------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANIES - 1.2%
--------------------------------------------------------------------------------
Dreyfus Cash Management 12,536 12,536
PowerShares Trust Series I 15,700 1,017,360
------------
TOTAL REGISTERED INVESTMENT COMPANIES
(Cost $972,435) 1,029,896
------------
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 1.6%
--------------------------------------------------------------------------------
Credit Suisse Securities (USA)
0.150%, dated 07/31/12,
matures on 08/01/12,
repurchase price $1,256,486
(collateralized by a U.S. Treasury
obligation, par $1,260,000,
1.000%, 03/31/17, total value
$1,290,827) $ 1,259,481 $ 1,259,481
------------
TOTAL REPURCHASE AGREEMENT
(Cost $1,259,481) 1,259,481
------------
TOTAL INVESTMENTS - 100.1%
(Cost $51,812,980) 81,035,268
------------
OTHER ASSETS & LIABILITIES, NET - (0.1)% (81,470)
------------
NET ASSETS - 100.0% $ 80,953,798
============
--------------------------------------------------------------------------------
* 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
PLC - PUBLIC LIABILITY COMPANY
SP ADR - SPONSORED AMERICAN DEPOSITARY RECEIPT
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 53
SCHEDULE OF INVESTMENTS
JULY 31, 2012
ENHANCED GROWTH FUND (CONCLUDED)
A summary of the inputs used to value the Fund's net assets as of July 31, 2012
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
07/31/12 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Common Stock ** $ 78,745,891 $ 78,745,891 $ -- $ --
Registered Investment Company 1,029,896 1,029,896 -- --
Repurchase Agreement 1,259,481 -- 1,259,481 --
------------ ------------ ------------ ------------
Total: $ 81,035,268 $ 79,775,787 $ 1,259,481 $ --
============ ============ ============ ============
** See schedule of investments detail for industry breakout.
The accompanying notes are an integral part of the financial statements.
54 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2012
EQUITY INCOME FUND
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - 98.7%+
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 4.2%
Brinker International 7,682 $ 248,974
Interpublic Group 14,447 142,592
Target 4,478 271,591
Time Warner 7,010 274,231
------------
937,388
------------
CONSUMER STAPLES - 4.6%
Altria Group 15,529 558,578
Campbell Soup 5,762 190,780
PepsiCo 3,865 281,102
------------
1,030,460
------------
ENERGY - 13.2%
Chevron 7,308 800,811
ConocoPhillips 6,035 328,545
ExxonMobil 13,247 1,150,502
Spectra Energy 10,676 327,646
Williams 10,618 337,546
------------
2,945,050
------------
FINANCIALS - 27.5%
ACE ++ 5,377 395,210
Allstate 6,457 221,475
American Express 5,066 292,359
American Financial Group 7,438 280,487
Annaly Capital Management REIT 23,309 406,276
Assurant 6,914 250,356
Bank of Hawaii 6,685 312,256
BB&T 12,948 406,179
Chimera Investment REIT 131,495 284,029
Chubb 4,126 299,919
CVB Financial 16,888 199,278
FirstMerit 19,014 308,027
Home Properties REIT 4,140 271,625
JPMorgan Chase 10,736 386,496
Macerich REIT 3,780 220,790
Rayonier REIT 6,649 317,091
US Bancorp 19,917 667,220
Wells Fargo 17,492 591,405
------------
6,110,478
------------
HEALTH CARE - 8.6%
Bristol-Myers Squibb 16,909 601,960
Johnson & Johnson 9,436 653,160
Pfizer 27,266 655,475
------------
1,910,595
------------
INDUSTRIAL - 12.9%
Boeing 3,651 269,845
Deluxe 13,885 393,223
Eaton 5,216 228,669
General Electric 24,866 515,970
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
INDUSTRIAL - (CONTINUED)
Lockheed Martin 3,849 $ 343,600
Northrop Grumman 3,801 251,626
Raytheon 5,516 306,028
Textainer Group Holdings 6,266 235,727
WW Grainger 1,640 335,921
------------
2,880,609
------------
INFORMATION TECHNOLOGY - 6.7%
Intel 10,800 277,560
International Business Machines 1,220 239,096
Microsoft 13,219 389,564
Motorola Solutions 5,327 257,507
Seagate Technology ++ 10,516 315,690
------------
1,479,417
------------
MATERIALS - 2.7%
EI Du Pont de Nemours 5,042 250,587
International Paper 10,377 340,469
------------
591,056
------------
TELECOMMUNICATION SERVICES - 7.8%
AT&T 16,678 632,430
BCE (Canada) 7,749 329,642
Verizon Communications 16,971 766,071
------------
1,728,143
------------
UTILITIES - 10.5%
CMS Energy 14,726 363,143
DTE Energy 4,034 247,567
Duke Energy 6,405 434,131
Edison International 9,436 435,755
Exelon 9,326 364,833
Southwest Gas 4,967 221,826
Xcel Energy 9,198 269,501
------------
2,336,756
------------
TOTAL COMMON STOCK
(Cost $18,001,621) 21,949,952
------------
--------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANIES - 1.1%
--------------------------------------------------------------------------------
Dreyfus Cash Management 54,387 54,387
SPDR S&P 500 ETF Trust 1,469 202,296
------------
TOTAL REGISTERED INVESTMENT COMPANIES
(Cost $242,975) 256,683
------------
TOTAL INVESTMENTS - 99.8%
(Cost $18,244,596) 22,206,635
------------
OTHER ASSETS & LIABILITIES, NET - 0.2% 39,999
------------
NET ASSETS - 100.0% $ 22,246,634
============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 55
SCHEDULE OF INVESTMENTS
JULY 31, 2012
EQUITY INCOME FUND (CONCLUDED)
--------------------------------------------------------------------------------
++ THIS COMPANY IS DOMICILED OUTSIDE OF THE UNITED STATES. THE SECURITY'S
FUNCTIONAL CURRENCY IS THE UNITED STATES DOLLAR.
+ NARROW INDUSTRIES ARE UTILIZED FOR COMPLIANCE PURPOSES, WHEREAS BROAD
SECTORS ARE UTILIZED FOR REPORTING.
ETF - EXCHANGE TRADED FUND
REIT - REAL ESTATE INVESTMENT TRUST
S&P - STANDARD & POOR'S
SPDR - STANDARD & POOR'S DEPOSITARY RECEIPTS
A summary of the inputs used to value the Fund's net assets as of July 31, 2012
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
07/31/12 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Investment in Securities * $ 22,206,635 $ 22,206,635 $ -- $ --
============ ============ ============ ============
* See schedule of investments detail for industry and security type
breakouts.
The accompanying notes are an integral part of the financial statements.
56 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2012
GENEVA MID CAP GROWTH FUND
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - 97.5%+
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 18.9%
Chipotle Mexican Grill * 45,880 $ 13,412,100
Coach 277,700 13,698,941
Dick's Sporting Goods 518,115 25,449,809
Gentex 273,623 4,380,704
LKQ * 632,650 22,351,525
O'Reilly Automotive * 242,725 20,811,242
Panera Bread, Cl A * 148,820 23,437,662
Polaris Industries 196,665 14,781,341
Tractor Supply 244,790 22,244,067
------------
160,567,391
------------
CONSUMER STAPLES - 5.5%
Church & Dwight 405,900 23,383,899
JM Smucker 210,688 16,180,838
McCormick 111,143 6,766,386
------------
46,331,123
------------
ENERGY - 8.2%
Concho Resources * 189,690 16,171,072
FMC Technologies * 356,715 16,094,981
Oasis Petroleum * 423,445 11,085,790
Oil States International * 205,495 14,939,487
Range Resources 175,465 10,984,109
------------
69,275,439
------------
FINANCIALS - 6.3%
Affiliated Managers Group * 124,850 13,932,011
East West Bancorp 497,055 10,835,799
IntercontinentalExchange * 109,525 14,371,871
Signature Bank * 227,490 14,673,105
------------
53,812,786
------------
HEALTH CARE - 14.2%
Catamaran * 183,165 15,479,274
Cerner * 288,860 21,352,531
CR Bard 98,530 9,583,028
DENTSPLY International 224,140 8,145,248
Edwards Lifesciences * 120,545 12,199,154
IDEXX Laboratories * 224,065 19,755,811
Perrigo 161,004 18,357,676
Varian Medical Systems * 293,265 16,006,404
------------
120,879,126
------------
INDUSTRIAL - 20.6%
AMETEK 478,710 14,840,010
CH Robinson Worldwide 178,085 9,411,792
Clean Harbors * 200,965 12,166,421
Copart * 496,255 11,791,019
Expeditors International of
Washington 221,140 7,865,950
Fastenal 445,650 19,216,428
Genesee & Wyoming, Cl A * 195,835 12,153,520
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
INDUSTRIAL - (CONTINUED)
IDEX 272,327 $ 10,389,275
IHS, Cl A * 216,395 23,861,877
Lincoln Electric Holdings 318,385 12,697,194
Roper Industries 185,554 18,453,345
Stericycle * 235,825 21,896,351
------------
174,743,182
------------
INFORMATION TECHNOLOGY - 22.2%
Amphenol, Cl A 325,480 19,164,262
ANSYS * 264,569 15,863,557
Citrix Systems * 233,890 16,999,125
Cognizant Technology Solutions, Cl A * 301,375 17,109,059
F5 Networks * 95,340 8,902,849
FactSet Research Systems 160,570 14,926,587
Fiserv * 209,875 14,718,534
Intuit 372,355 21,604,037
MICROS Systems * 374,695 17,887,939
Red Hat * 285,930 15,343,004
Teradata * 212,605 14,376,350
Trimble Navigation * 269,579 11,931,567
------------
188,826,870
------------
MATERIALS - 1.6%
Sigma-Aldrich 194,580 13,464,936
------------
TOTAL COMMON STOCK
(Cost $707,419,082) 827,900,853
------------
--------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 2.6%
--------------------------------------------------------------------------------
Dreyfus Cash Management 21,854,120 21,854,120
------------
TOTAL REGISTERED INVESTMENT COMPANY
(Cost $21,854,120) 21,854,120
------------
TOTAL INVESTMENTS - 100.1%
(Cost $729,273,202) 849,754,973
------------
OTHER ASSETS & LIABILITIES, NET - (0.1)% (728,561)
------------
NET ASSETS - 100.0% $849,026,412
============
--------------------------------------------------------------------------------
* 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.
HIGHMARK(R) FUNDS 57
SCHEDULE OF INVESTMENTS
JULY 31, 2012
GENEVA MID CAP GROWTH FUND (CONCLUDED)
A summary of the inputs used to value the Fund's net assets as of July 31, 2012
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
07/31/12 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Investment in Securities ** $849,754,973 $849,754,973 $ -- $ --
============ ============ ============ ============
** See schedule of investments detail for industry and security type
breakout.
The accompanying notes are an integral part of the financial statements.
58 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2012
GENEVA SMALL CAP GROWTH FUND
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - 96.0%+
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 15.4%
BJ's Restaurants * 16,225 $ 642,186
Hibbett Sports * 18,742 1,138,951
JOS A Bank Clothiers * 10,770 455,140
LKQ * 16,430 580,472
Monro Muffler Brake 17,207 569,035
Panera Bread, Cl A * 5,065 797,687
Peet's Coffee & Tea * 3,210 242,034
Ulta Salon, Cosmetics & Fragrance 7,210 611,985
Vitamin Shoppe * 17,745 974,555
------------
6,012,045
------------
CONSUMER STAPLES - 3.1%
J & J Snack Foods 9,872 570,503
TreeHouse Foods * 11,395 638,006
------------
1,208,509
------------
ENERGY - 6.6%
Dril-Quip * 12,455 913,076
Gulfport Energy * 25,685 529,111
Rosetta Resources * 15,465 645,200
SM Energy 10,115 476,315
------------
2,563,702
------------
FINANCIALS - 7.0%
Affiliated Managers Group * 3,830 427,390
Bank of the Ozarks 11,172 359,627
MarketAxess Holdings 24,955 754,140
Texas Capital Bancshares * 27,605 1,189,499
------------
2,730,656
------------
HEALTH CARE - 21.3%
Cantel Medical 31,713 828,331
Catamaran (Canada) * 7,835 662,136
Haemonetics * 9,385 674,875
HMS Holdings * 27,890 959,695
IDEXX Laboratories * 6,555 577,954
IPC The Hospitalist * 13,401 576,243
Medidata Solutions * 30,465 1,078,766
MWI Veterinary Supply * 10,070 917,276
Neogen * 13,540 520,884
PAREXEL International * 32,325 889,584
Techne 9,475 654,533
------------
8,340,277
------------
INDUSTRIAL - 19.7%
Acuity Brands 14,525 841,578
Allegiant Travel * 12,963 921,151
Barnes Group 22,853 545,273
Chart Industries * 3,517 228,113
Donaldson 16,120 550,176
Genesee & Wyoming, Cl A * 14,181 880,073
Healthcare Services Group 42,485 921,075
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
INDUSTRIAL - (CONTINUED)
Marten Transport 32,030 $ 574,939
Middleby * 8,270 809,798
RBC Bearings * 19,130 896,049
Team * 17,745 552,579
------------
7,720,804
------------
INFORMATION TECHNOLOGY - 19.4%
Bottomline Technologies * 30,390 577,106
Concur Technologies * 13,410 905,711
Constant Contact * 11,097 186,097
ExlService Holdings * 22,214 547,575
Factset Research Systems 6,110 567,986
Interactive Intelligence Group * 25,505 665,170
Liquidity Services * 16,535 755,980
Opnet Technologies 15,285 404,135
Pegasystems 14,225 395,171
Riverbed Technology * 26,830 473,281
Tyler Technologies * 30,240 1,179,965
Ultimate Software Group * 10,442 934,246
------------
7,592,423
------------
MATERIALS - 3.5%
Balchem 21,707 723,494
Sensient Technologies 17,700 627,465
------------
1,350,959
------------
TOTAL COMMON STOCK
(Cost $33,537,163) 37,519,375
------------
--------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 3.5%
--------------------------------------------------------------------------------
Dreyfus Cash Management 1,368,612 1,368,612
------------
TOTAL REGISTERED INVESTMENT COMPANY
(Cost $1,368,612) 1,368,612
------------
TOTAL INVESTMENTS - 99.5%
(Cost $34,905,775) 38,887,987
------------
OTHER ASSETS & LIABILITIES, NET - 0.5% 206,585
------------
NET ASSETS - 100.0% $ 39,094,572
============
--------------------------------------------------------------------------------
* 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.
HIGHMARK(R) FUNDS 59
SCHEDULE OF INVESTMENTS
JULY 31, 2012
GENEVA SMALL CAP GROWTH FUND (CONCLUDED)
A summary of the inputs used to value the Fund's net assets as of July 31, 2012
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
07/31/12 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Investment in Securities ** $ 38,887,987 $ 38,887,987 $ -- $ --
============ ============ ============ ============
** See schedule of investments detail for industry and security type
breakout.
The accompanying notes are an integral part of the financial statements.
60 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2012
INTERNATIONAL OPPORTUNITIES FUND
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - 94.7%
--------------------------------------------------------------------------------
AUSTRALIA - 6.1%
Amcor ^ 80,000 $ 631,577
Ansell ^ 40,000 556,145
Arrium ^ 500,000 373,660
Ausdrill ^ 250,000 870,663
Beach Energy ^ 562,500 644,744
Commonwealth Bank of Australia ^ 30,000 1,806,145
Flight Centre ^ 30,000 666,629
Goodman Group REIT ^ 160,000 629,270
GrainCorp ^ 100,000 963,293
Insurance Australia Group ^ 160,000 630,944
Lend Lease Group ^ 80,000 676,662
NRW Holdings ^ 150,000 451,100
Ramsay Health Care ^ 30,000 746,432
Spark Infrastructure Group ^ 400,000 683,775
Suncorp Group ^ 70,000 620,867
Telstra ^ 170,000 713,956
------------
11,665,862
------------
BELGIUM - 3.3%
Anheuser-Busch InBev NV ^ 45,000 3,560,556
Groupe Bruxelles Lambert ^ 10,000 653,184
Solvay ^ 6,000 622,954
Telenet Group Holding NV *^ 20,000 880,846
Umicore ^ 12,000 530,969
------------
6,248,509
------------
BERMUDA - 0.7%
Catlin Group ^ 100,000 677,818
Lancashire Holdings ^ 50,000 612,214
------------
1,290,032
------------
CHINA - 0.4%
Yangzijiang Shipbuilding Holdings ^ 1,000,000 793,308
------------
COLOMBIA - 2.0%
BanColombia, SP ADR 25,000 1,546,000
Ecopetrol, SP ADR 40,000 2,289,200
------------
3,835,200
------------
FRANCE - 5.9%
Arkema ^ 12,000 883,301
AtoS ^ 17,000 954,685
BNP Paribas ^ 20,000 738,797
Casino Guichard-Perrachon ^ 12,000 1,006,355
Christian Dior ^ 9,000 1,242,840
Eiffage ^ 20,000 528,739
Sanofi ^ 20,000 1,631,758
SCOR ^ 25,000 592,423
Total ^ 30,000 1,382,294
Valeo ^ 20,000 856,846
Vinci (France) ^ 18,000 762,252
Vivendi ^ 41,333 783,910
------------
11,364,200
------------
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)
--------------------------------------------------------------------------------
GERMANY - 6.1%
BASF ^ 22,000 $ 1,606,109
Bayer ^ 15,000 1,139,293
Bayerische Motoren Werke ^ 8,000 595,390
Bilfinger Berger ^ 6,000 491,810
Celesio ^ 30,000 545,744
Continental ^ 6,000 542,504
Deutsche Post ^ 60,000 1,077,201
E.ON ^ 35,000 744,873
Freenet ^ 60,000 878,031
Hannover Rueckversicherung ^ 20,000 1,195,088
Infineon Technologies ^ 80,000 581,307
Leoni ^ 12,000 444,433
Muenchener Rueckversicherungs-
Gesellschaft ^ 5,000 708,464
ProSiebenSat.1 Media ^ 20,000 418,610
Suedzucker ^ 20,000 689,075
------------
11,657,932
------------
HONG KONG - 6.0%
BOC Hong Kong Holdings ^ 250,000 764,644
Cheung Kong Holdings ^ 80,000 1,046,684
CLP Holdings ^ 150,000 1,294,283
Foxconn International Holdings * ^ 1,000,000 297,842
Giordano International ^ 1,500,000 1,042,436
Hutchison Whampoa ^ 60,000 537,841
Johnson Electric Holdings ^ 1,200,000 701,094
New World Development ^ 1,100,000 1,398,722
Orient Overseas International ^ 80,000 453,628
Sino Land ^ 500,000 849,574
SJM Holdings ^ 250,000 443,918
SmarTone Telecommunications Holding ^ 400,000 840,985
Sun Hung Kai Properties ^ 90,000 1,117,949
Television Broadcasts ^ 100,000 714,711
------------
11,504,311
------------
HUNGARY - 1.5%
Magyar Telekom Telecommunications ^ 300,000 554,435
MOL Hungarian Oil and Gas ^ 10,000 719,355
OTP Bank ^ 50,000 765,468
Richter Gedeon Nyrt ^ 4,500 761,627
------------
2,800,885
------------
IRELAND - 2.0%
CRH ^ 60,000 1,088,940
Experian ^ 70,000 1,037,962
Kerry Group ^ 25,000 1,128,309
Smurfit Kappa Group ^ 70,000 522,745
------------
3,777,956
------------
JAPAN - 17.9%
Aeon ^ 60,000 722,440
Aisin Seiki ^ 20,000 607,949
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 61
SCHEDULE OF INVESTMENTS
JULY 31, 2012
INTERNATIONAL OPPORTUNITIES FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)
--------------------------------------------------------------------------------
JAPAN - (CONTINUED)
Aozora Bank ^ 170,000 $ 389,497
Asahi Glass ^ 100,000 587,091
Asahi Kasei ^ 120,000 636,016
Daikyo ^ 200,000 500,570
Daiwa House Industry ^ 70,000 994,463
DCM Holdings ^ 70,000 485,593
DIC ^ 300,000 516,094
East Japan Railway ^ 12,000 767,602
Electric Power Development ^ 20,000 470,445
Heiwa ^ 40,000 722,713
Hitachi ^ 150,000 884,317
Idemitsu Kosan ^ 6,500 544,465
Isuzu Motors ^ 150,000 764,711
IT Holdings ^ 40,000 413,920
Itochu ^ 100,000 1,035,180
JVC Kenwood ^ 120,000 366,181
KDDI ^ 100 688,520
Marubeni ^ 120,000 800,457
Medipal Holdings ^ 70,000 1,006,932
Melco Holdings ^ 25,000 508,386
Mitsui ^ 45,000 664,500
Mizuho Financial Group ^ 600,000 988,173
Namco Bandai Holdings ^ 35,000 502,654
NHK Spring ^ 100,000 1,047,596
Nippon Express ^ 200,000 814,378
Nippon Shokubai ^ 50,000 608,282
Nippon Telegraph and Telephone ^ 12,000 557,034
Nishi-Nippon City Bank ^ 250,000 546,489
Nissan Motor ^ 100,000 940,222
Nomura Research Institute ^ 40,000 826,279
NTT Data ^ 200 604,104
Oki Electric Industry *^ 400,000 625,670
ORIX ^ 10,000 945,374
OTSUKA ^ 10,000 878,649
Press Kogyo ^ 100,000 442,182
Resona Holdings ^ 200,000 814,264
SANKYU ^ 240,000 897,910
SCSK ^ 32,000 432,471
Shionogi ^ 50,000 712,193
Sumitomo ^ 60,000 840,545
Sumitomo Heavy Industries ^ 150,000 601,072
Sumitomo Mitsui Financial Group ^ 40,000 1,259,652
Sumitomo Mitsui Trust Holdings ^ 250,000 714,058
Toyota Tsusho ^ 25,000 462,249
UNY ^ 70,000 630,034
YAMADA DENKI ^ 13,000 673,743
Zeon ^ 100,000 819,149
------------
34,262,468
------------
MALAYSIA - 1.1%
AMMB Holdings ^ 250,000 511,398
Kuala Lumpur Kepong ^ 70,000 530,036
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)
--------------------------------------------------------------------------------
MALAYSIA - (CONTINUED)
Sime Darby ^ 150,000 $ 470,101
UMW Holdings ^ 200,000 603,164
------------
2,114,699
------------
NETHERLANDS - 4.9%
AEGON ^ 200,000 907,879
ASML Holding ^ 12,000 693,089
Heineken ^ 15,000 812,703
Koninklijke Ahold ^ 100,000 1,217,233
Koninklijke DSM ^ 15,000 738,339
PostNL ^ 300,000 1,219,966
Royal Dutch Shell, Cl B ^ 75,000 2,638,314
SBM Offshore ^ 40,000 487,503
Wolters Kluwer ^ 35,000 581,392
------------
9,296,418
------------
NEW ZEALAND - 1.4%
Chorus *^ 220,000 552,525
SKYCITY Entertainment Group ^ 200,000 575,240
Telecom ^ 750,000 1,608,249
------------
2,736,014
------------
NORWAY - 0.3%
STX OSV Holdings ^ 400,000 502,319
------------
POLAND - 2.5%
Bank Pekao ^ 15,000 625,899
KGHM Polska Miedz ^ 15,000 566,645
PGE Grupa Energetyczna ^ 120,000 667,470
Polski Koncern Naftowy Orlen *^ 65,000 694,514
Powszechna Kasa Oszczednosci
Bank Polski ^ 175,000 1,698,574
Synthos ^ 300,000 474,810
------------
4,727,912
------------
SINGAPORE - 3.8%
ComfortDelGro ^ 450,000 606,494
DBS Group Holdings ^ 150,000 1,769,614
Golden Agri-Resources ^ 1,700,000 1,006,738
Hutchison Port Holdings Trust 900,000 684,000
Jardine Cycle & Carriage ^ 14,651 548,172
SembCorp Industries ^ 150,000 635,378
StarHub ^ 250,000 769,023
UOL Group ^ 300,000 1,245,066
------------
7,264,485
------------
SOUTH KOREA - 1.9%
Daelim Industrial ^ 5,000 383,305
Hana Financial Group ^ 15,000 475,060
Hyundai Marine & Fire Insurance ^ 20,000 493,601
Kia Motors ^ 10,000 685,507
Samsung Electronics ^ 1,000 1,149,521
The accompanying notes are an integral part of the financial statements.
62 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2012
INTERNATIONAL OPPORTUNITIES FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)
--------------------------------------------------------------------------------
SOUTH KOREA - (CONTINUED)
SK Networks ^ 60,000 $ 468,658
------------
3,655,652
------------
SWITZERLAND - 5.3%
Clariant *^ 40,000 422,158
Georg Fischer *^ 1,500 519,755
Nestle ^ 30,000 1,843,087
Novartis ^ 30,000 1,761,572
OC Oerlikon *^ 70,000 570,385
Roche Holding ^ 10,000 1,770,756
Sika *^ 400 746,099
Swiss Life Holding *^ 8,000 763,203
Swiss Re *^ 12,000 751,183
Zurich Insurance Group *^ 4,000 887,770
------------
10,035,968
------------
THAILAND - 1.8%
Advanced Info Service, NVDR ^ 100,000 632,335
Bangkok Bank, NVDR ^ 200,000 1,238,899
Charoen Pokphand Foods, NVDR ^ 500,000 525,933
PTT, NVDR ^ 60,000 618,128
Thai Oil, NVDR ^ 250,000 464,680
------------
3,479,975
------------
TURKEY - 3.6%
Arcelik ^ 200,000 989,207
Eregli Demir ve Celik Fabrikalari ^ 500,000 546,932
KOC Holding ^ 231,000 896,219
Turk Telekomunikasyon ^ 170,000 655,378
Turkiye Halk Bankasi ^ 300,000 2,565,889
Turkiye Is Bankasi, Cl C ^ 400,000 1,168,041
------------
6,821,666
------------
UNITED KINGDOM - 16.2%
Aberdeen Asset Management ^ 300,000 1,212,613
AstraZeneca ^ 38,085 1,778,637
BP ^ 250,000 1,659,973
British American Tobacco ^ 30,000 1,593,426
BT Group ^ 450,000 1,530,989
Centrica ^ 150,000 744,524
Compass Group ^ 110,000 1,179,940
Croda International ^ 30,000 1,103,369
Daily Mail & General Trust ^ 80,000 566,875
Drax Group ^ 100,000 743,594
DS Smith ^ 200,000 469,072
EnQuest *^ 250,000 440,441
GlaxoSmithKline ^ 70,000 1,610,673
HSBC Holdings ^ 168,000 1,403,482
IG Group Holdings ^ 120,000 842,963
Imperial Tobacco Group ^ 30,000 1,164,135
ITV ^ 400,000 471,999
Micro Focus International ^ 80,000 671,409
Mondi ^ 60,000 510,452
Petrofac ^ 90,000 2,093,531
--------------------------------------------------------------------------------
Description Shares/Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)
--------------------------------------------------------------------------------
UNITED KINGDOM - (CONTINUED)
Rexam ^ 120,000 $ 815,593
Rio Tinto ^ 25,000 1,151,290
Rolls-Royce Holdings *^ 70,000 930,484
Rolls-Royce Holdings, CL C *^^ 7,420,000 11,633
Stagecoach Group ^ 150,000 662,635
Tate & Lyle ^ 70,000 723,081
Unilever ^ 60,000 2,151,373
Vodafone Group ^ 300,000 858,575
WH Smith ^ 120,000 1,034,317
William Hill ^ 150,000 737,232
------------
30,868,310
------------
TOTAL COMMON STOCK
(Cost $169,694,097) 180,704,081
------------
--------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 0.8%
--------------------------------------------------------------------------------
iShares MSCI Peru Capped
Index Fund 40,000 1,618,800
------------
TOTAL REGISTERED INVESTMENT COMPANY
(Cost $1,767,118) 1,618,800
------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 4.0%
--------------------------------------------------------------------------------
Credit Suisse Securities (USA)
0.150%, dated 07/31/12,
matures on 08/01/12,
repurchase price $7,563,016
(collateralized by a U.S. Treasury
obligation, par value
$7,545,000, 1.000%, 03/31/17,
total
market value $7,729,597) $ 7,562,985 7,562,985
------------
TOTAL REPURCHASE AGREEMENT
(Cost $7,562,985) 7,562,985
------------
TOTAL INVESTMENTS - 99.5%
(Cost $179,024,200) 189,885,866
------------
OTHER ASSETS & LIABILITIES, NET - 0.5% 930,662
------------
NET ASSETS - 100.0% $190,816,528
============
--------------------------------------------------------------------------------
* NON-INCOME PRODUCING SECURITY.
^ SECURITY FAIR VALUED USING A THIRD-PARTY FAIR VALUATION VENDOR. THE TOTAL
VALUE OF THESE SECURITIES AS OF JULY 31, 2012 IS $176,173,248.
^^ SECURITY FAIR VALUED USING METHODS DETERMINED IN GOOD FAITH BY THE
VALUATION COMMITTEE OF THE BOARD OF TRUSTEES. THE TOTAL VALUE OF THIS
SECURITY AS OF JULY 31, 2012 IS $11,633.
ADR - AMERICAN DEPOSITARY RECEIPT
CL - CLASS
NVDR - NON VOTING DEPOSITARY RECEIPT
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 63
SCHEDULE OF INVESTMENTS
JULY 31, 2012
INTERNATIONAL OPPORTUNITIES FUND (CONCLUDED)
FOREIGN CURRENCY CONTRACTS OUTSTANDING AS OF JULY 31, 2012 WERE AS FOLLOWS:
PRINCIPAL NET
CONTRACTS AMOUNT UNREALIZED
TO BUY OR COVERED BY COUNTER- APPRECIATION/
TO SELL CURRENCY CONTRACTS EXPIRATION PARTY (DEPRECIATION)**
-------------------------------------------------------------------------------
SELL EUR 11,000,000 10/12 BBH $ (52,426)
BUY JPY 475,000,000 08/12 BBH 20,167
SELL JPY 475,000,000 08/12 BBH (159,152)
----------------
$ (191,411)
================
** THE PRIMARY RISK EXPOSURE IS FOREIGN EXCHANGE RATE FLUCTUATION.
BBH - BROWN BROTHERS HARRIMAN & CO.
EUR - EUROPEAN EURO
JPY - JAPANESE YEN
FUTURES - A SUMMARY OF THE OPEN FUTURES HELD BY THE FUND AT JULY 31, 2012 IS AS
FOLLOWS:
LONG FUTURES NUMBER OF EXPIRATION UNREALIZED
OUTSTANDING CONTRACTS DATE APPRECIATION***
--------------------------------------------------------------------------------
FTSE 100 INDEX FUTURES 40 SEPTEMBER 2012 $ 140,478
*** THE PRIMARY RISK EXPOSURE IS THE PRICE MOVEMENT OF THE UNDERLYING BASKET
OF EQUITY SECURITIES. SEE NOTE 2 FOR ADDITIONAL DETAILS.
A summary of the inputs used to value the Fund's net assets as of July 31, 2012
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
07/31/12 PRICE INPUTS INPUTS
------------- ----------- ------------- ------------
Assets:
Common Stocks
Colombia $ 3,835,200 $ 3,835,200 $ -- $ --
Singapore 7,264,485 684,000 6,580,485 --
United Kingdom 30,868,310 -- 30,856,677 11,633
All Other Countries **** 138,736,086 -- 138,736,086 --
------------- ----------- ------------- ------------
Total Common Stocks: $ 180,704,081 $ 4,519,200 $ 176,173,248 $ 11,633
------------- ----------- ------------- ------------
Registered Investment Company 1,618,800 1,618,800 -- --
Repurchase Agreement 7,562,985 -- 7,562,985 --
Derivative Contracts (1)
Equity Contracts 140,478 140,478 -- --
Foreign Exchange Contracts 20,167 -- 20,167 --
Liabilities:
Derivative Contracts (1)
Foreign Exchange Contracts (211,578) -- (211,578) --
------------- ----------- ------------- ------------
Total: $ 189,834,933 $ 6,278,478 $ 183,544,822 $ 11,633
============= =========== ============= ============
**** See schedule of investments detail for country breakout.
(1) Investments in derivatives include open futures contracts and open foreign
currency contracts.
The accompanying notes are an integral part of the financial statements.
64 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2012
LARGE CAP CORE EQUITY FUND
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - 99.2%+
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 8.6%
Amazon.com * 900 $ 209,970
Dollar General * 5,100 260,151
Home Depot 29,595 1,544,267
Las Vegas Sands 7,400 269,508
Liberty Interactive, Cl A * 9,800 183,554
Lowe's 9,800 248,626
Macy's 20,400 731,136
McDonald's 6,400 571,904
Sally Beauty Holdings * 9,180 242,536
Starbucks 6,000 271,680
Target 6,200 376,030
Walt Disney 6,870 337,592
Yum! Brands 3,475 225,319
------------
5,472,273
------------
CONSUMER STAPLES - 13.1%
Altria Group 33,210 1,194,564
Beam 7,400 465,312
Coca-Cola 25,960 2,097,568
Molson Coors Brewing, Cl B 6,700 283,544
Philip Morris International 18,723 1,712,031
Procter & Gamble 35,500 2,291,170
Wal-Mart Stores 3,700 275,391
------------
8,319,580
------------
ENERGY - 12.4%
Anadarko Petroleum 4,700 326,368
Chevron 16,400 1,797,112
EOG Resources 6,000 588,060
EQT 7,100 400,440
ExxonMobil 31,462 2,732,475
Occidental Petroleum 7,971 693,716
Schlumberger 3,357 239,220
Tesoro 38,300 1,058,995
------------
7,836,386
------------
FINANCIALS - 15.5%
Allied World Assurance Co Holdings
AG ++ 7,200 543,096
Allstate 8,900 305,270
Ameriprise Financial 5,400 279,288
Citigroup 21,900 594,147
Fifth Third Bancorp 28,700 396,634
General Growth Properties REIT 30,800 558,096
JPMorgan Chase 19,965 718,740
Regions Financial 37,700 262,392
Reinsurance Group of America 16,400 912,988
TD Ameritrade Holding 46,500 740,280
Travelers 22,700 1,422,155
Vornado Realty Trust REIT 10,100 843,350
Wells Fargo 60,945 2,060,550
White Mountains Insurance Group 300 153,177
------------
9,790,163
------------
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
HEALTH CARE - 12.5%
Agilent Technologies 4,300 $ 164,647
Baxter International 13,300 778,183
Biogen Idec * 2,600 379,158
Cardinal Health 4,300 185,287
Charles River Laboratories International * 8,200 279,046
Cigna 6,100 245,708
Eli Lilly 4,000 176,120
Humana 2,700 166,320
McKesson 8,000 725,840
Merck 13,190 582,602
Pfizer 61,617 1,481,272
Stryker 4,800 249,744
Thermo Fisher Scientific 20,400 1,135,668
UnitedHealth Group 3,780 193,120
Watson Pharmaceuticals * 12,600 980,658
WellPoint 3,960 211,028
------------
7,934,401
------------
INDUSTRIAL - 8.2%
3M 2,200 200,706
Babcock & Wilcox * 9,000 225,900
Caterpillar 4,500 378,945
CSX 29,700 681,318
Delta Air Lines * 82,300 794,195
General Electric 81,455 1,690,191
KBR 8,000 209,920
Masco 27,400 329,622
Rockwell Automation 3,000 202,080
Textron 8,500 221,425
Tyco International ++ 4,300 236,242
------------
5,170,544
------------
INFORMATION TECHNOLOGY - 19.9%
Analog Devices 4,520 176,642
Apple * 5,115 3,124,037
Applied Materials 32,700 356,103
Brocade Communications Systems * 94,600 470,162
Cisco Systems 29,700 473,715
Citrix Systems * 3,600 261,648
eBay * 23,600 1,045,480
Global Payments 27,800 1,190,396
Google, Cl A * 700 443,079
International Business Machines 1,300 254,774
Maxim Integrated Products 13,100 356,713
Microsoft 35,025 1,032,187
Motorola Solutions 11,700 565,578
NetApp * 7,160 233,917
NVIDIA * 14,500 196,330
Oracle 16,638 502,468
Qualcomm 19,675 1,174,204
Tellabs 145,400 478,366
Visa Inc, Cl A 2,000 258,140
------------
12,593,939
------------
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 65
SCHEDULE OF INVESTMENTS
JULY 31, 2012
LARGE CAP CORE EQUITY FUND (CONCLUDED)
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
MATERIALS - 4.2%
Airgas 8,100 $ 642,492
LyondellBasell Industries, Cl A ++ 6,200 276,086
Monsanto 5,100 436,662
PPG Industries 7,000 766,220
Praxair 5,467 567,256
------------
2,688,716
------------
TELECOMMUNICATION SERVICES - 1.6%
Verizon Communications 22,600 1,020,164
------------
UTILITIES - 3.2%
Calpine * 11,000 187,990
CenterPoint Energy 39,800 838,188
DTE Energy 14,100 865,317
Edison International 3,300 152,394
------------
2,043,889
------------
TOTAL COMMON STOCK
(Cost $55,642,972) 62,870,055
------------
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 0.8%
--------------------------------------------------------------------------------
Credit Suisse Securities (USA)
0.150%, dated 07/31/12,
mature on 08/01/12,
repurchase price $494,993
(collateralized by a U.S. Treasury
obligation, par value
$495,000, 1.00%, 03/31/17,
total market value $507,111) $ 494,991 $ 494,991
------------
TOTAL REPURCHASE AGREEMENT
(Cost $494,991) 494,991
------------
TOTAL INVESTMENTS - 100.0%
(Cost $56,137,963) 63,365,046
------------
OTHER ASSETS & LIABILITIES, NET - 0.0% (20,569)
------------
NET ASSETS - 100.0% $ 63,344,477
============
--------------------------------------------------------------------------------
* 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,
2012 IS AS FOLLOWS:
LONG FUTURES NUMBER OF EXPIRATION UNREALIZED
OUTSTANDING CONTRACTS DATE APPRECIATION**
-------------------------------------------------------------
S&P 500 E-MINI 7 SEPTEMBER 2012 $ 9,678
** THE PRIMARY RISK EXPOSURE IS THE PRICE MOVEMENT OF THE UNDERLYING BASKET
OF EQUITY SECURITIES. SEE NOTE 2 FOR ADDITIONAL DETAILS.
S&P - STANDARD & POOR'S
A summary of the inputs used to value the Fund's net assets as of July 31, 2012
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
07/31/12 PRICE INPUTS INPUTS
-------------- -------------- ----------- ------------
Assets:
Common Stock *** $ 62,870,055 $ 62,870,055 $ -- $ --
Repurchase Agreement 494,991 -- 494,991 --
Derivatives (1)
Equity Contracts 9,678 9,678 -- --
-------------- -------------- ----------- ------------
Total: $ 63,374,724 $ 62,879,733 $ 494,991 $ --
============= ============== =========== ============
*** 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.
66 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2012
LARGE CAP GROWTH FUND
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - 99.2%+
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 13.7%
Bed Bath & Beyond * 15,035 $ 916,383
Dick's Sporting Goods 32,720 1,607,206
Dollar Tree * 24,095 1,212,942
PetSmart 24,575 1,624,653
Sally Beauty Holdings * 73,030 1,929,453
TJX Companies 31,325 1,387,071
Yum! Brands 19,935 1,292,585
------------
9,970,293
------------
CONSUMER STAPLES - 15.6%
Anheuser-Busch InBev NV, SP ADR 36,992 2,930,506
Coca-Cola 49,642 4,011,074
Costco Wholesale 11,015 1,059,423
Kraft Foods, Cl A 26,875 1,067,206
Philip Morris International 25,739 2,353,574
------------
11,421,783
------------
ENERGY - 8.9%
BG Group PLC, SP ADR 58,010 1,149,178
Chevron 9,680 1,060,734
ExxonMobil 22,065 1,916,345
Occidental Petroleum 20,485 1,782,810
Royal Dutch Shell PLC, ADR 9,095 620,279
------------
6,529,346
------------
FINANCIALS - 2.9%
American Tower REIT 29,265 2,116,152
------------
HEALTH CARE - 5.7%
Covidien ++ 15,835 884,860
Fresenius Medical Care, ADR 11,545 831,586
Johnson & Johnson 20,635 1,428,355
Merck 23,120 1,021,210
------------
4,166,011
------------
INDUSTRIAL - 13.4%
Danaher 41,151 2,173,184
Donaldson 47,173 1,610,015
JB Hunt Transport Services 28,670 1,577,423
Stericycle * 20,079 1,864,335
United Parcel Service, Cl B 12,220 923,954
WW Grainger 8,075 1,654,002
------------
9,802,913
------------
INFORMATION TECHNOLOGY - 27.9%
Accenture, Cl A ++ 16,965 1,022,990
Analog Devices 41,524 1,622,758
ANSYS * 11,085 664,657
Apple * 12,697 7,754,820
ARM Holdings PLC, SP ADR 66,620 1,730,788
Broadcom, Cl A 19,675 666,589
EMC * 93,848 2,459,756
International Business Machines 9,265 1,815,755
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
INFORMATION TECHNOLOGY - (CONTINUED)
Qualcomm 44,772 $ 2,671,993
------------
20,410,106
------------
MATERIALS - 9.0%
Ecolab 48,895 3,200,178
Praxair 32,356 3,357,259
------------
6,557,437
------------
UTILITIES - 2.1%
ITC Holdings 10,187 755,774
Wisconsin Energy 18,174 740,409
------------
1,496,183
------------
TOTAL COMMON STOCK
(Cost $52,767,752) 72,470,224
------------
--------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 0.9%
--------------------------------------------------------------------------------
Dreyfus Cash Management 692,203 692,203
------------
TOTAL REGISTERED INVESTMENT COMPANY
(Cost $692,203) 692,203
------------
TOTAL INVESTMENTS - 100.1%
(Cost $53,459,955) 73,162,427
------------
OTHER ASSETS & LIABILITIES, NET - (0.1)% (77,320)
------------
NET ASSETS - 100.0% $ 73,085,107
============
--------------------------------------------------------------------------------
* 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
ARM - ADJUSTABLE RATE MORTGAGE
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 67
SCHEDULE OF INVESTMENTS
JULY 31, 2012
LARGE CAP GROWTH FUND (CONCLUDED)
A summary of the inputs used to value the Fund's net assets as of July 31, 2012
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
07/31/12 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Investments in Securities ** $ 73,162,427 $ 73,162,427 $ -- $ --
============ ============ ============ ============
** See schedule of investments detail for industry and security type
breakouts.
The accompanying notes are an integral part of the financial statements.
68 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2012
NYSE ARCA TECH 100 INDEX FUND
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - 99.3%+
--------------------------------------------------------------------------------
ENERGY - 1.9%
Schlumberger 52,010 $ 3,706,233
---------------
HEALTH CARE - 21.5%
Agilent Technologies 52,010 1,991,463
Amgen 52,010 4,296,026
AstraZeneca PLC, SP ADR 52,010 2,434,588
Baxter International 52,010 3,043,105
Biogen Idec * 52,010 7,584,618
Boston Scientific * 52,010 268,892
Bristol-Myers Squibb 52,010 1,851,556
CONMED 52,010 1,427,154
Gilead Sciences * 52,010 2,825,703
Life Technologies * 52,010 2,282,199
Medtronic 52,010 2,050,234
Novartis AG, ADR 52,010 3,048,826
St. Jude Medical 52,010 1,943,094
Thermo Fisher Scientific 52,010 2,895,397
Valeant Pharmaceuticals
International * ++ 52,010 2,473,596
ViroPharma * 52,010 1,129,137
---------------
41,545,588
---------------
INDUSTRIAL - 3.9%
Lockheed Martin 52,010 4,642,933
Raytheon 52,010 2,885,515
---------------
7,528,448
---------------
INFORMATION TECHNOLOGY - 70.3%
Adobe Systems * 52,010 1,606,069
Akamai Technologies * 52,010 1,829,712
Altera 52,010 1,843,754
Amdocs * ++ 52,010 1,547,298
Amphenol, Cl A 52,010 3,062,349
Analog Devices 52,010 2,032,551
Applied Materials 52,010 566,389
Arris Group * 52,010 660,007
Autodesk * 52,010 1,764,179
Automatic Data Processing 52,010 2,941,165
BMC Software * 52,010 2,059,596
Broadcom, Cl A * 52,010 1,762,099
CA 52,010 1,251,881
Check Point Software Technologies * ++ 52,010 2,526,126
Ciena * 52,010 833,720
Cisco Systems 52,010 829,559
Citrix Systems * 52,010 3,780,087
Computer Sciences 52,010 1,280,486
Compuware * 52,010 479,012
Comtech Telecommunications 52,010 1,420,913
Corning 52,010 593,434
Cypress Semiconductor * 52,010 555,987
Dell * 52,010 617,879
Digital River * 52,010 925,258
DST Systems 52,010 2,803,339
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
INFORMATION TECHNOLOGY - (CONTINUED)
eBay * 52,010 $ 2,304,043
EMC * 52,010 1,363,182
Emulex * 52,010 336,505
F5 Networks * 52,010 4,856,694
Harmonic * 52,010 220,522
Harris 52,010 2,166,217
Hewlett-Packard 52,010 948,662
Intel 52,010 1,336,657
InterDigital 52,010 1,419,873
International Business Machines 52,010 10,192,920
Intuit 52,010 3,017,620
Ixia * 52,010 806,155
j2 Global 52,010 1,556,659
JDS Uniphase * 52,010 511,778
Juniper Networks * 52,010 911,735
KLA-Tencor 52,010 2,647,829
Lam Research * 52,010 1,789,664
Linear Technology 52,010 1,677,323
LSI * 52,010 358,869
MEMC Electronic Materials * 52,010 99,859
Microsoft 52,010 1,532,735
Motorola Solutions 52,010 2,514,163
NetApp * 52,010 1,699,167
Nokia, SP ADR 52,010 125,344
NVIDIA * 52,010 704,215
Open Text (Canada) * 52,010 2,340,450
Oracle 52,010 1,570,702
Parametric Technology * 52,010 1,120,295
Polycom * 52,010 454,567
Progress Software * 52,010 1,011,074
QLogic * 52,010 600,195
QUALCOMM 52,010 3,103,957
RealNetworks * 52,010 403,598
Red Hat * 52,010 2,790,857
Salesforce.com * 52,010 6,467,964
SanDisk * 52,010 2,139,171
SAP, SP ADR 52,010 3,295,354
Seagate Technology ++ 52,010 1,561,340
Standard Microsystems * 52,010 1,919,689
Symantec * 52,010 819,158
Synopsys * 52,010 1,575,383
Tellabs 52,010 171,113
Teradata * 52,010 3,516,916
Teradyne * 52,010 765,067
Tessera Technologies 52,010 751,545
Texas Instruments 52,010 1,416,752
VASCO Data Security International * 52,010 481,093
VeriSign 52,010 2,310,284
VMware, Cl A * 52,010 4,720,428
Websense * 52,010 780,670
Western Digital * 52,010 2,068,438
Xerox Corp 52,010 360,429
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 69
SCHEDULE OF INVESTMENTS
JULY 31, 2012
NYSE ARCA TECH 100 INDEX FUND (CONCLUDED)
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
INFORMATION TECHNOLOGY - (CONTINUED)
Xilinx 52,010 $ 1,685,124
Yahoo! * 52,010 823,838
---------------
135,696,690
---------------
TELECOMMUNICATION SERVICES - 1.7%
AT&T 52,010 1,972,219
Telephone and Data Systems 52,010 1,260,202
---------------
3,232,421
---------------
TOTAL COMMON STOCK
(Cost $141,180,766) 191,709,380
---------------
--------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANIES - 0.8%
--------------------------------------------------------------------------------
Dreyfus Cash Management 456,604 456,604
PowerShares QQQ Trust Series 1 15,652 1,014,250
---------------
TOTAL REGISTERED INVESTMENT COMPANIES
(Cost $1,420,531) 1,470,854
---------------
TOTAL INVESTMENTS - 100.1%
(Cost $142,601,297) 193,180,234
---------------
OTHER ASSETS & LIABILITIES, NET - (0.1)% (120,276)
---------------
NET ASSETS - 100.0% $ 193,059,958
===============
--------------------------------------------------------------------------------
* NON-INCOME PRODUCING SECURITY.
++ THIS COMPANY IS DOMICILED OUTSIDE OF THE UNITED STATES. THE SECURITY'S
FUNCTIONAL CURRENCY IS THE UNITED STATES DOLLAR.
+ NARROW INDUSTRIES ARE UTILIZED FOR COMPLIANCE PURPOSES, WHEREAS BROAD
SECTORS ARE UTILIZED FOR REPORTING.
ADR - AMERICAN DEPOSITARY RECEIPT
CL - CLASS
PLC - PUBLIC LIABILITY COMPANY
SP ADR - SPONSORED AMERICAN DEPOSITARY RECEIPT
A summary of the inputs used to value the Fund's net assets as of July 31, 2012
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
07/31/12 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Investments in Securities ** $193,180,234 $193,180,234 $ -- $ --
============ ============ ============ ============
** See schedule of investments detail for industry and security type
breakouts.
The accompanying notes are an integral part of the financial statements.
70 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2012
SMALL CAP CORE FUND
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - 98.5%+
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 14.4%
AFC Enterprises * 11,100 $ 245,199
Ameristar Casinos 8,700 146,769
Arbitron 14,200 497,994
Beazer Homes USA * 136,700 317,144
bebe stores 40,700 244,200
Bob Evans Farms 14,100 543,132
Brunswick 16,800 369,432
Capella Education * 7,500 198,900
Citi Trends * 9,600 144,288
Columbia Sportswear 5,900 298,481
Cooper Tire & Rubber 18,200 317,954
Dillard's, Cl A 5,700 371,811
Domino's Pizza 10,900 372,126
EW Scripps, Cl A * 16,700 155,143
Gordmans Stores * 8,100 137,214
Grand Canyon Education * 18,800 312,832
MDC Holdings 13,400 426,924
Oxford Industries 8,100 350,244
Papa John's International * 12,100 617,221
Pier 1 Imports 78,600 1,296,114
Pinnacle Entertainment * 28,000 303,800
Smith & Wesson Holding * 71,200 719,120
Sonic * 15,200 150,480
True Religion Apparel 9,700 254,528
---------------
8,791,050
---------------
CONSUMER STAPLES - 1.5%
Fresh Del Monte Produce ++ 10,100 247,450
Revlon, Cl A * 10,100 146,955
TreeHouse Foods * 5,400 302,346
United Natural Foods * 4,200 228,060
---------------
924,811
---------------
ENERGY - 6.0%
Alon USA Energy 16,200 176,904
Berry Petroleum, Cl A 5,300 201,506
Delek US Holdings 21,900 432,306
Exterran Holdings * 44,000 649,880
Frontline ++ 38,000 140,600
GasLog * ++ 19,800 196,218
Helix Energy Solutions Group * 42,800 765,264
OYO Geospace * 1,800 170,604
W&T Offshore 17,800 329,122
Western Refining 12,800 301,184
Willbros Group * 41,900 287,015
---------------
3,650,603
---------------
FINANCIALS - 24.0%
Alterra Capital Holdings ++ 19,100 444,457
Anworth Mortgage Asset REIT 37,900 251,656
Banco Latinoamericano de Comercio
Exterior SA, Cl E ++ 14,700 298,704
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
FINANCIALS - (CONTINUED)
CBL & Associates Properties REIT 31,300 $ 617,549
Colonial Properties Trust REIT 9,200 208,380
Cousins Properties REIT 84,750 643,253
Dime Community Bancshares 14,700 213,150
Extra Space Storage REIT 33,300 1,090,242
First American Financial 29,300 536,776
First Industrial Realty Trust REIT * 54,900 699,426
Forestar Group * 9,200 104,696
Healthcare Realty Trust REIT 19,700 483,832
Huntington Bancshares 53,200 330,638
International Bancshares 33,100 606,723
Lexington Realty Trust REIT 33,000 295,020
Montpelier Re Holdings ++ 45,800 927,908
Nationstar Mortgage Holdings * 8,900 195,978
PacWest Bancorp 6,300 144,333
Pinnacle Financial Partners * 6,600 129,030
Post Properties REIT 19,100 986,515
Primerica 45,800 1,253,546
PrivateBancorp 28,600 438,152
Select Income REIT 15,100 379,916
Sovran Self Storage REIT 11,200 639,520
Strategic Hotels & Resorts REIT * 41,400 250,884
Sunstone Hotel Investors REIT * 79,800 798,798
Trustmark 9,100 220,038
Validus Holdings ++ 12,700 413,131
Webster Financial 23,400 480,168
WesBanco 8,400 173,964
Westamerica Bancorporation 4,200 193,200
Wilshire Bancorp * 36,200 229,508
---------------
14,679,091
---------------
HEALTH CARE - 11.0%
Acorda Therapeutics * 6,300 151,641
Affymetrix * 76,100 318,859
Alnylam Pharmaceuticals * 8,100 151,389
Array Biopharma * 34,500 177,330
Auxilium Pharmaceuticals * 42,400 1,142,256
Cepheid * 8,200 262,728
Clovis Oncology * 10,300 182,207
Computer Programs & Systems 3,600 178,200
Conceptus * 11,800 219,243
Cyberonics * 6,300 272,790
Depomed * 27,000 149,040
Hi-Tech Pharmacal * 5,300 182,108
Horizon Pharma * 30,600 174,726
Lumenis * ++ 13 --
Magellan Health Services * 10,600 510,920
MedAssets * 36,200 477,478
Medicis Pharmaceutical, Cl A 7,100 233,732
NuVasive * 6,200 129,518
Providence Service * 10,400 134,160
Sirona Dental Systems * 5,800 250,734
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 71
SCHEDULE OF INVESTMENTS
JULY 31, 2012
SMALL CAP CORE FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
HEALTH CARE - (CONTINUED)
Synergy Pharmaceuticals * 38,000 $ 155,420
Vocera Communications * 5,400 144,936
Volcano * 13,000 343,850
WellCare Health Plans * 8,600 557,452
XenoPort * 28,100 221,428
---------------
6,722,145
---------------
INDUSTRIAL - 14.4%
AAR 18,600 264,306
Aircastle 14,400 170,352
Alaska Air Group * 12,600 439,110
American Railcar Industries * 10,200 310,386
AO Smith 2,150 106,253
Applied Industrial Technologies 5,100 189,516
Arkansas Best 28,000 383,320
Cascade 2,600 122,486
CDI 6,800 109,888
Clean Harbors * 16,000 968,640
Columbus McKinnon * 11,300 166,223
Dycom Industries * 24,200 421,564
Encore Capital Group * 6,600 184,800
Ennis 10,800 154,872
Flow International * 42,300 135,360
FreightCar America 18,400 374,256
Huron Consulting Group * 4,500 151,560
Insperity 5,200 136,448
Knight Transportation 22,500 344,925
Knoll 7,100 97,199
Mueller Industries 12,200 520,086
Resources Connection 37,500 423,375
Saia * 16,200 366,120
Sauer-Danfoss 17,400 629,706
Seaboard * 110 242,000
Swift Transportation Co * 33,600 278,880
Taser International * 63,400 342,994
US Airways Group * 43,400 497,364
USG * 17,100 277,704
---------------
8,809,693
---------------
INFORMATION TECHNOLOGY - 18.8%
Acxiom * 7,900 132,483
Angie's List * 10,900 141,700
Aspen Technology * 22,600 528,388
Blackbaud 10,000 269,800
Cirrus Logic * 5,600 205,912
CommVault Systems * 7,400 359,048
Comtech Telecommunications 29,000 792,280
Cornerstone OnDemand * 13,800 328,164
Emulex * 62,000 401,140
Entropic Communications * 39,100 234,600
Fair Isaac 15,400 666,666
Fairchild Semiconductor International * 34,000 471,240
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
INFORMATION TECHNOLOGY - (CONTINUED)
Formfactor * 70,600 $ 432,072
Imperva * 6,200 163,680
Infoblox * 7,500 157,575
Integrated Device Technology * 56,400 284,256
Intermolecular * 20,700 137,862
Kulicke & Soffa Industries * 51,500 570,105
M/A-Com Technology Solutions
Holdings * 8,800 155,672
Manhattan Associates * 23,800 1,111,222
Micrel 30,400 283,936
MicroStrategy, Cl A * 1,300 151,398
MoneyGram International * 14,700 228,732
Monolithic Power Systems * 29,500 571,710
MTS Systems 3,400 147,798
NetSuite * 12,200 675,148
Novatel Wireless * 46,900 110,684
Parametric Technology * 10,000 215,400
Rosetta Stone * 10,900 142,027
Sigma Designs * 50,400 342,720
TIBCO Software * 13,900 390,451
Tyler Technologies * 12,800 499,456
XO Group * 17,700 152,397
---------------
11,455,722
---------------
MATERIALS - 5.4%
A. Schulman 12,000 262,320
AEP Industries * 6,600 310,068
Boise 29,900 221,260
Deltic Timber 4,700 290,507
Domtar ++ 2,300 169,878
Eagle Materials 13,700 476,075
Minerals Technologies 2,100 134,274
Neenah Paper 8,400 225,624
Rockwood Holdings 2,200 97,284
Sensient Technologies 8,235 291,931
Stepan 2,800 248,248
Worthington Industries 19,000 412,300
Zoltek * 14,300 119,262
---------------
3,259,031
---------------
UTILITIES - 3.0%
El Paso Electric 13,900 470,515
NorthWestern 2,600 96,018
PNM Resources 54,400 1,131,520
Unitil 5,200 138,112
---------------
1,836,165
---------------
TOTAL COMMON STOCK
(Cost $52,807,107) 60,128,311
---------------
The accompanying notes are an integral part of the financial statements.
72 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2012
SMALL CAP CORE FUND (CONCLUDED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 1.6%
--------------------------------------------------------------------------------
Credit Suisse Securities (USA)
0.150%, dated 07/31/12,
matures on 08/01/12,
repurchase price $1,003,554
(collateralized by a U.S. Treasury
obligation, par value from
$1,005,000, 1.00% 03/31/17,
total market value $1,029,588) $ 1,003,549 $ 1,003,549
---------------
TOTAL REPURCHASE AGREEMENT
(Cost $1,003,549) 1,003,549
---------------
TOTAL INVESTMENTS - 100.1%
(Cost $53,810,656) 61,131,860
---------------
OTHER ASSETS & LIABILITIES, NET - (0.1)% (59,196)
---------------
NET ASSETS - 100.0% $ 61,072,664
===============
--------------------------------------------------------------------------------
* 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,
2012 IS AS FOLLOWS:
NUMBER OF EXPIRATION UNREALIZED
LONG FUTURES OUTSTANDING CONTRACTS DATE DEPRECIATION**
------------------------------------------------------------------------------
RUSSELL 2000 MINI INDEX
FUTURES 13 SEPTEMBER 2012 $(23,317)
** THE PRIMARY RISK EXPOSURE IS THE PRICE MOVEMENT OF THE UNDERLYING BASKET
OF EQUITY SECURITIES. SEE NOTE 2 FOR ADDITIONAL DETAILS
A summary of the inputs used to value the Fund's net assets as of July 31, 2012
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
07/31/12 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Assets:
Common Stock *** $ 60,128,311 $ 60,128,311 $ -- $ --
Repurchase Agreement 1,003,549 -- 1,003,549 --
Liabilities:
Derivatives (1)
Equity Contracts (23,317) (23,317) -- --
------------ ------------ ------------ ------------
Total: $ 61,108,543 $ 60,104,994 $ 1,003,549 $ --
============ ============ ============ ============
*** 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 73
SCHEDULE OF INVESTMENTS
JULY 31, 2012
VALUE FUND
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - 98.6%+
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 11.6%
Autoliv 64,500 $ 3,648,765
Comcast, Cl A 264,500 8,445,485
DIRECTV, Cl A * 108,000 5,363,280
McGraw-Hill 102,550 4,815,748
News, Cl A 160,000 3,683,200
Target 133,700 8,108,905
Walt Disney 98,200 4,825,548
------------
38,890,931
------------
CONSUMER STAPLES - 8.3%
Diageo, SP ADR 30,000 3,207,000
Heineken, ADR 199,300 5,414,981
Henkel KGaA, SP ADR 60,700 3,581,300
Philip Morris International 113,500 10,378,440
Unilever, NY Shares ++ 100,000 3,465,000
Walgreen 50,000 1,818,000
------------
27,864,721
------------
ENERGY - 14.1%
Apache 63,500 5,468,620
Chevron 85,000 9,314,300
Ensco PLC ++ 35,000 1,901,550
Halliburton 81,700 2,706,721
National Oilwell Varco 26,500 1,915,950
Occidental Petroleum 88,500 7,702,155
Peabody Energy 137,400 2,868,912
Royal Dutch Shell PLC, ADR 91,300 6,442,128
Suncor Energy (Canada) 102,350 3,125,769
Williams 130,000 4,132,700
WPX Energy * 107,000 1,706,650
------------
47,285,455
------------
FINANCIALS - 17.8%
ACE ++ 49,600 3,645,600
Berkshire Hathaway, Cl B * 132,200 11,215,848
Charles Schwab 265,100 3,348,213
CIT Group * 119,300 4,356,836
Citigroup 204,000 5,534,520
Goldman Sachs Group 34,050 3,435,645
JPMorgan Chase 237,500 8,550,000
Lazard, Cl A ++ 73,489 1,973,179
MetLife 127,600 3,926,252
Wells Fargo 285,000 9,635,850
Weyerhaeuser REIT 170,000 3,969,500
------------
59,591,443
------------
HEALTH CARE - 12.0%
Agilent Technologies 86,500 3,312,085
Baxter International 66,500 3,890,915
Covidien ++ 79,850 4,462,018
Merck 167,000 7,376,390
Novartis AG, ADR 75,500 4,425,810
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
--------------------------------------------------------------------------------
HEALTH CARE - (CONTINUED)
Roche Holding, SP ADR 78,500 $ 3,482,260
St. Jude Medical 121,950 4,556,052
Teva Pharmaceutical Industries, SP ADR 48,200 1,970,898
UnitedHealth Group 131,600 6,723,444
------------
40,199,872
------------
INDUSTRIAL - 15.0%
ABB, SP ADR 131,950 2,289,333
Canadian Pacific Railway ++ 21,600 1,752,840
Honeywell International 130,600 7,581,330
Jardine Matheson Holdings, ADR 80,000 4,188,000
Joy Global 41,200 2,139,928
Lockheed Martin 42,750 3,816,292
Rolls-Royce Holdings PLC, SP ADR 49,000 3,258,500
Schindler Holding AG, COP
(Switzerland) ^ 28,700 3,351,067
Siemens AG, SP ADR 28,674 2,428,401
Tyco International ++ 104,600 5,746,724
United Parcel Service, Cl B 86,900 6,570,509
United Technologies 63,150 4,700,886
Vinci (France) ^ 63,300 2,680,585
------------
50,504,395
------------
INFORMATION TECHNOLOGY - 16.9%
CA 91,000 2,190,370
Hewlett-Packard 208,600 3,804,864
Hitachi, ADR 29,800 1,753,730
Intel 322,000 8,275,400
Microsoft 558,450 16,457,522
Motorola Solutions 83,900 4,055,726
Oracle 306,000 9,241,200
Texas Instruments 138,150 3,763,206
Western Union 229,450 3,999,314
Xerox 451,500 3,128,895
------------
56,670,227
------------
MATERIALS - 2.1%
BHP Billiton PLC, ADR 45,300 2,639,178
Crown Holdings * 72,600 2,606,340
LyondellBasell Industries, Cl A ++ 42,400 1,888,072
------------
7,133,590
------------
TELECOMMUNICATION SERVICES - 0.8%
Vodafone Group PLC, SP ADR 89,000 2,558,750
------------
TOTAL COMMON STOCK
(Cost $294,636,066) 330,699,384
------------
--------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 0.5%
--------------------------------------------------------------------------------
Dreyfus Cash Management 1,559,206 1,559,206
------------
TOTAL REGISTERED INVESTMENT COMPANY
(Cost $1,559,206) 1,559,206
------------
The accompanying notes are an integral part of the financial statements.
74 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2012
VALUE FUND (CONCLUDED)
--------------------------------------------------------------------------------
Value
--------------------------------------------------------------------------------
TOTAL INVESTMENTS - 99.1%
(Cost $296,195,272) $332,258,590
------------
OTHER ASSETS & LIABILITIES, NET - 0.9% 3,067,248
------------
NET ASSETS - 100.0% $335,325,838
============
--------------------------------------------------------------------------------
* NON-INCOME PRODUCING SECURITY.
^ SECURITY FAIR VALUED USING METHODS DETERMINED IN GOOD FAITH BY THE
VALUATION COMMITTEE OF THE BOARD OF TRUSTEES. THE TOTAL VALUE OF THESE
SECURITIES AS OF JULY 31, 2012 IS $6,031,652.
++ 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
NY - NEW YORK
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, 2012
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
07/31/12 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Common Stock
Consumer Discretionary $ 38,890,931 $ 38,890,931 $ -- $ --
Consumer Staples 27,864,721 27,864,721 -- --
Energy 47,285,455 47,285,455 -- --
Financials 59,591,443 59,591,443 -- --
Health Care 40,199,872 40,199,872 -- --
Industrial 50,504,395 44,472,743 6,031,652 --
Information Technology 56,670,227 56,670,227 -- --
Materials 7,133,590 7,133,590 -- --
Telecommunication Services 2,558,750 2,558,750 -- --
------------ ------------ ------------ ------------
Total Common Stocks: $330,699,384 $324,667,732 $ 6,031,652 $ --
------------ ------------ ------------ ------------
Registered Investment Company 1,559,206 1,559,206 -- --
------------ ------------ ------------ ------------
Total: $332,258,590 $326,226,938 $ 6,031,652 $ --
============ ============ ============ ============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 75
SCHEDULE OF INVESTMENTS
JULY 31, 2012
TACTICAL CAPITAL GROWTH ALLOCATION FUND
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
AFFILIATED EQUITY REGISTERED INVESTMENT COMPANIES - 81.4%
--------------------------------------------------------------------------------
HighMark Cognitive Value Fund,
Fiduciary Shares - 3.3% 130,750 $ 1,498,398
HighMark Enhanced Growth Fund,
Fiduciary Shares - 1.9% * 72,484 857,480
HighMark Equity Income Fund,
Fiduciary Shares - 0.6% 29,127 295,641
HighMark Geneva Mid Cap Growth
Fund, Fiduciary Shares - 4.7% 93,020 2,182,240
HighMark Geneva Small Cap Growth Fund,
Fiduciary Shares - 3.2% 46,544 1,471,706
HighMark International Opportunities Fund,
Fiduciary Shares - 11.9% 875,775 5,482,352
HighMark Large Cap Core Equity Fund,
Fiduciary Shares - 20.2% 1,013,140 9,310,761
HighMark Large Cap Growth Fund,
Fiduciary Shares - 4.1% 163,226 1,868,943
HighMark NYSE Arca Tech 100 Index Fund,
Fiduciary Shares - 2.2% * 29,226 1,012,097
HighMark Small Cap Core Fund,
Fiduciary Shares - 14.1% * 338,032 6,490,219
HighMark Value Fund,
Fiduciary Shares - 15.2% 445,156 6,993,404
------------
TOTAL AFFILIATED EQUITY REGISTERED
INVESTMENT COMPANIES
(Cost $35,317,570) 37,463,241
------------
--------------------------------------------------------------------------------
AFFILIATED FIXED INCOME REGISTERED INVESTMENT COMPANIES - 7.0%
--------------------------------------------------------------------------------
HighMark Bond Fund,
Fiduciary Shares - 0.0% 1,452 16,874
HighMark Short Term Bond Fund,
Fiduciary Shares - 7.0% 317,677 3,218,072
------------
TOTAL AFFILIATED FIXED INCOME
REGISTERED INVESTMENT COMPANIES
(Cost $3,215,708) 3,234,946
------------
--------------------------------------------------------------------------------
EQUITY REGISTERED INVESTMENT COMPANIES - 6.0%
--------------------------------------------------------------------------------
Fidelity Advisor Industrials Fund,
Institutional Class - 0.7% 11,073 300,970
Lazard Emerging Markets Equity
Portfolio, Institutional Class - 4.9% 122,858 2,270,422
Morgan Stanley Institutional Fund -
U.S. Real Estate Portfolio,
Institutional Class - 0.4% 10,935 187,978
------------
TOTAL EQUITY REGISTERED
INVESTMENT COMPANIES
(Cost $2,848,628) 2,759,370
------------
--------------------------------------------------------------------------------
Description Shares/Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FIXED INCOME REGISTERED INVESTMENT COMPANY - 3.0%
--------------------------------------------------------------------------------
Eaton Vance Income Fund of Boston,
Institutional Class - 3.0% 231,848 $ 1,358,632
------------
TOTAL FIXED INCOME REGISTERED
INVESTMENT COMPANY
(Cost $1,331,142) 1,358,632
------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 2.7%
--------------------------------------------------------------------------------
Credit Suisse Securities (USA)
0.150%, dated 07/31/12, matures
on 08/01/12, repurchase price
$1,243,679 (collateralized by a U.S.
Treasury obligation, par value
$1,245,000,1.000%, 03/31/17, total
market value $1,275,460) $ 1,243,674 1,243,674
------------
TOTAL REPURCHASE AGREEMENT
(Cost $1,243,674) 1,243,674
------------
TOTAL INVESTMENTS - 100.1%
(Cost $43,956,722) 46,059,863
------------
OTHER ASSETS & LIABILITIES, NET - (0.1)% (55,245)
------------
NET ASSETS - 100.0% $ 46,004,618
============
--------------------------------------------------------------------------------
* NON-INCOME PRODUCING SECURITY.
FUTURES - A SUMMARY OF THE OPEN FUTURES CONTRACTS HELD BY THE FUND AT JULY 31,
2012 IS AS FOLLOWS:
NUMBER OF EXPIRATION UNREALIZED
SHORT FUTURES OUTSTANDING CONTRACTS DATE DEPRECIATION**
--------------------------------------------------------------------------------
JAPANESE YEN 3 SEPTEMBER 2012 $ (9,104)
** THE PRIMARY RISK EXPOSURE IS FOREIGN CURRENCY EXCHANGE RISK. SEE NOTE 2
FOR ADDITIONAL DETAILS.
The accompanying notes are an integral part of the financial statements.
76 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2012
TACTICAL CAPITAL GROWTH ALLOCATION FUND (CONCLUDED)
A summary of the inputs used to value the Fund's net assets as of July 31, 2012
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
07/31/12 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Assets:
Investments in Registered Investment Companies *** $ 44,816,189 $ 44,816,189 $ -- $ --
Repurchase Agreement 1,243,674 -- 1,243,674 --
Liabilities:
Derivatives (1)
Foreign Exchange Futures (9,104) (9,104) -- --
------------ ------------ ------------ ------------
Total: $ 46,050,759 $ 44,807,085 $ 1,243,674 $ --
============ ============ ============ ============
*** 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 77
SCHEDULE OF INVESTMENTS
JULY 31, 2012
TACTICAL GROWTH & INCOME ALLOCATION FUND
--------------------------------------------------------------------------------
Description Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
AFFILIATED EQUITY REGISTERED INVESTMENT COMPANIES - 63.0%
--------------------------------------------------------------------------------
HighMark Cognitive Value Fund,
Fiduciary Shares - 2.6% 137,722 $ 1,578,294
HighMark Enhanced Growth Fund,
Fiduciary Shares - 1.4% * 71,990 851,647
HighMark Equity Income Fund,
Fiduciary Shares - 0.5% 30,640 310,993
HighMark Geneva Mid Cap Growth Fund,
Fiduciary Shares - 3.6% * 93,086 2,183,799
HighMark Geneva Small Cap Growth
Fund,
Fiduciary Shares - 2.6% 49,839 1,575,898
HighMark International Opportunities
Fund,
Fiduciary Shares - 9.7% 937,181 5,866,753
HighMark Large Cap Core Equity Fund,
Fiduciary Shares - 14.0% 923,929 8,490,905
HighMark Large Cap Growth Fund,
Fiduciary Shares - 3.7% 193,493 2,215,493
HighMark NYSE Arca Tech 100 Index
Fund,
Fiduciary Shares - 1.6% * 28,942 1,002,261
HighMark Small Cap Core Fund,
Fiduciary Shares - 11.2% * 352,253 6,763,263
HighMark Value Fund,
Fiduciary Shares - 12.1% 466,909 7,335,144
------------
TOTAL AFFILIATED EQUITY REGISTERED
INVESTMENT COMPANIES
(Cost $35,843,044) 38,174,450
------------
--------------------------------------------------------------------------------
AFFILIATED FIXED INCOME REGISTERED INVESTMENT
COMPANIES - 21.2%
--------------------------------------------------------------------------------
HighMark Bond Fund,
Fiduciary Shares - 7.3% 381,818 4,436,730
HighMark Short Term Bond Fund,
Fiduciary Shares - 13.9% 832,506 8,433,282
------------
TOTAL AFFILIATED FIXED INCOME
REGISTERED INVESTMENT COMPANIES
(Cost $12,698,635) 12,870,012
------------
--------------------------------------------------------------------------------
EQUITY REGISTERED INVESTMENT COMPANIES - 4.6%
--------------------------------------------------------------------------------
Fidelity Advisor Industrials Fund,
Institutional Class - 0.5% 11,228 305,177
Lazard Emerging Markets Equity
Portfolio,
Institutional Class - 3.8% 123,702 2,286,019
Morgan Stanley Institutional Fund -
U.S. Real Estate Portfolio,
Institutional Class - 0.3% 10,780 185,303
------------
TOTAL EQUITY REGISTERED
INVESTMENT COMPANIES
(Cost $2,828,381) 2,776,499
------------
--------------------------------------------------------------------------------
Description Shares/Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FIXED INCOME REGISTERED INVESTMENT COMPANY - 4.7%
--------------------------------------------------------------------------------
Eaton Vance Income Fund of
Boston,
Institutional Class - 4.7% 481,893 $ 2,823,891
------------
TOTAL FIXED INCOME REGISTERED
INVESTMENT COMPANY
(Cost $2,744,970) 2,823,891
------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 6.8%
--------------------------------------------------------------------------------
Credit Suisse Securities (USA)
0.150%, dated 07/31/12, matures on 08/01/12, repurchase price $4,099,739
(collateralized by a U.S.
Treasury
obligation, par value
$4,090,000,
1.000%, 03/31/17, total
market
value $4,190,067) $4,099,722 4,099,722
------------
TOTAL REPURCHASE AGREEMENT
(Cost $4,099,722) 4,099,722
------------
TOTAL INVESTMENTS - 100.3%
(Cost $58,214,752) 60,744,574
------------
OTHER ASSETS & LIABILITIES, NET - (0.3)% (178,902)
------------
NET ASSETS - 100.0% $ 60,565,672
============
--------------------------------------------------------------------------------
* NON-INCOME PRODUCING SECURITY.
FUTURES - A SUMMARY OF THE OPEN FUTURES HELD BY THE FUND AT JULY 31, 2012 IS AS
FOLLOWS:
NUMBER OF EXPIRATION UNREALIZED
SHORT FUTURES OUTSTANDING CONTRACTS DATE DEPRECIATION**
------------------------------------------------------------------------------------------------------------------------
JAPANESE YEN 4 SEPTEMBER 2012 $ (12,139)
** THE PRIMARY RISK EXPOSURE IS FOREIGN CURRENCY EXCHANGE RISK. SEE NOTE 2
FOR ADDITIONAL DETAILS.
The accompanying notes are an integral part of the financial statements.
78 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2012
TACTICAL GROWTH & INCOME ALLOCATION FUND (CONCLUDED)
A summary of the inputs used to value the Fund's net assets as of July 31, 2012
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
07/31/12 PRICE INPUTS INPUTS
------------ ------------ ----------- ------------
Assets:
Investment in Registered Investment Companies *** $ 56,644,852 $ 56,644,852 $ -- $ --
Repurchase Agreement 4,099,722 -- 4,099,722 --
Liabilities:
Derivatives (1)
Foreign Exchange Futures (12,139) (12,139) -- --
------------ ------------ ----------- ------------
Total: $ 60,732,435 $ 56,632,713 $ 4,099,722 $ --
============ ============ =========== ============
*** 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 79
SCHEDULE OF INVESTMENTS
JULY 31, 2012
BOND FUND
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - 48.9%
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 5.0%
Comcast
5.700%, 07/01/19 $ 3,500,000 $ 4,251,314
DIRECTV Holdings / DIRECTV
Financing
2.400%, 03/15/17 2,100,000 2,155,839
Gap
5.950%, 04/12/21 2,650,000 2,798,713
News America Holdings
7.750%, 02/01/24 1,000,000 1,282,929
Staples
9.750%, 01/15/14 1,500,000 1,671,068
Time Warner Entertainment
8.375%, 03/15/23 5,000,000 6,993,525
------------
19,153,388
------------
ENERGY - 6.6%
Cimarex Energy
5.875%, 05/01/22 1,700,000 1,810,500
Energy Transfer Partners
9.700%, 03/15/19 2,000,000 2,595,936
Kinder Morgan Energy Partners
3.950%, 09/01/22 3,750,000 3,956,441
Magellan Midstream Partners
6.550%, 07/15/19 3,000,000 3,665,922
4.250%, 02/01/21 500,000 550,894
Newfield Exploration
5.625%, 07/01/24 865,000 922,306
Petrobras International
Finance
3.875%, 01/27/16 4,000,000 4,158,348
Transcontinental Gas Pipe
Line
7.250%, 12/01/26 2,250,000 3,104,433
Transocean
5.050%, 12/15/16 2,500,000 2,767,880
Weatherford International
4.500%, 04/15/22 860,000 899,746
Williams Partners
5.250%, 03/15/20 1,000,000 1,152,892
------------
25,585,298
------------
FINANCIALS - 13.7%
American International Group
4.250%, 09/15/14 4,000,000 4,179,688
Bank of America, MTN
5.650%, 05/01/18 3,000,000 3,311,979
BB&T, MTN
2.150%, 03/22/17 3,750,000 3,867,416
Berkshire Hathaway Finance
5.400%, 05/15/18 850,000 1,026,310
Boston Properties
4.125%, 05/15/21 3,000,000 3,244,338
Capital One Bank USA
8.800%, 07/15/19 2,000,000 2,576,012
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - (CONTINUED)
--------------------------------------------------------------------------------
FINANCIALS - (CONTINUED)
Capital One Financial
4.750%, 07/15/21 $ 1,350,000 $ 1,503,926
Citigroup
4.750%, 05/19/15 3,500,000 3,707,263
Ford Motor Credit
5.000%, 05/15/18 2,700,000 2,877,814
GE Global Insurance
7.750%, 06/15/30 3,300,000 4,194,782
General Electric Capital, MTN
2.300%, 04/27/17 6,000,000 6,133,536
JPMorgan Chase
4.250%, 10/15/20 4,400,000 4,767,057
Lehman Brothers Holdings, MTN
(B)
5.625%, 01/24/13 4,000,000 970,000
NASDAQ OMX Group
5.250%, 01/16/18 2,750,000 2,966,147
SLM, MTN
6.000%, 01/25/17 860,000 900,850
Wells Fargo
5.625%, 12/11/17 4,000,000 4,749,156
MTN
1.250%, 02/13/15 2,000,000 2,006,958
------------
52,983,232
------------
FOREIGN GOVERNMENTS - 1.9%
Export-Import Bank of Korea
4.000%, 01/11/17 2,800,000 3,000,108
Hydro-Quebec
1.375%, 06/19/17 1,100,000 1,110,814
Ser IO
8.050%, 07/07/24 1,125,000 1,685,583
Province of Saskatchewan
9.375%, 12/15/20 1,000,000 1,526,796
------------
7,323,301
------------
HEALTH CARE - 4.7%
Amgen
3.875%, 11/15/21 3,350,000 3,659,691
2.125%, 05/15/17 1,925,000 1,981,485
Gilead Sciences
4.400%, 12/01/21 1,000,000 1,136,052
Laboratory Corp of America
Holdings
4.625%, 11/15/20 3,000,000 3,345,861
Teva Pharmaceutical Finance
3.650%, 11/10/21 4,000,000 4,357,636
Wellpoint
7.000%, 02/15/19 2,000,000 2,506,470
6.000%, 02/15/14 1,000,000 1,074,471
------------
18,061,666
------------
The accompanying notes are an integral part of the financial statements.
80 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2012
BOND FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - (CONTINUED)
--------------------------------------------------------------------------------
INDUSTRIAL - 2.9%
Continental Airlines Pass Through Trust
Ser 98-1B (C)
6.748%, 09/15/18 $ 564,542 $ 564,542
Ser 2010-1, Cl A
4.750%, 07/12/22 2,863,032 3,006,184
Delta Air Lines, Ser 11-1A
5.300%, 10/15/20 1,722,190 1,842,744
L-3 Communications, Ser B
6.375%, 10/15/15 1,452,000 1,482,855
Masco
5.950%, 03/15/22 860,000 898,995
Republic Services
3.550%, 06/01/22 1,625,000 1,709,013
United Technologies
3.100%, 06/01/22 1,500,000 1,613,199
------------
11,117,532
------------
INFORMATION TECHNOLOGY - 1.5%
Hewlett-Packard
4.375%, 09/15/21 3,800,000 3,910,751
International Business Machines
6.500%, 01/15/28 1,500,000 2,090,666
------------
6,001,417
------------
MATERIALS - 5.6%
Alcoa
5.400%, 04/15/21 1,400,000 1,435,034
ArcelorMittal
4.500%, 02/25/17 2,500,000 2,474,873
Ball
7.375%, 09/01/19 2,750,000 3,052,500
Ecolab
4.350%, 12/08/21 1,950,000 2,210,727
Georgia-Pacific
8.000%, 01/15/24 4,500,000 6,180,597
Rio Tinto Finance USA
6.500%, 07/15/18 2,250,000 2,808,466
Teck Resources
10.250%, 05/15/16 1,100,000 1,215,500
Vale Overseas
4.375%, 01/11/22 2,000,000 2,090,456
------------
21,468,153
------------
TELECOMMUNICATION SERVICES - 3.6%
Telefonica Emisiones SAU
3.992%, 02/16/16 4,000,000 3,741,932
Verizon Maryland
8.000%, 10/15/29 2,980,000 3,872,361
Verizon New England
7.875%, 11/15/29 4,925,000 6,173,842
------------
13,788,135
------------
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - (CONTINUED)
--------------------------------------------------------------------------------
UTILITIES - 3.4%
Exelon Generation
6.200%, 10/01/17 $ 4,000,000 $ 4,691,760
MidAmerican Energy Holdings, Ser D
5.000%, 02/15/14 400,000 425,747
Oklahoma Gas & Electric
6.650%, 07/15/27 2,500,000 3,320,465
Sempra Energy
6.150%, 06/15/18 4,000,000 4,915,228
------------
13,353,200
------------
TOTAL CORPORATE OBLIGATIONS
(Cost $172,291,790) 188,835,322
------------
--------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES - 11.8%
--------------------------------------------------------------------------------
Banc of America Mortgage Securities,
Ser 2003-7, Cl A2
4.750%, 09/25/18 2,339,429 2,424,502
Chase Mortgage Finance,
Ser 2004-S1, CI A3
5.500%, 02/25/19 1,368,546 1,419,513
Ser 2003-S10, Cl A1
4.750%, 11/25/18 263,049 271,299
Citicorp Mortgage Securities,
Ser 2003-10, Cl A1
4.500%, 11/25/18 2,739,644 2,816,063
CS First Boston Mortgage Securities,
Ser 2005-C1, Cl A4 (D)
5.014%, 02/15/38 5,000,000 5,429,890
DBUBS Mortgage Trust,
Ser 2011-LC1A, Cl A1 (A)
3.742%, 11/10/46 3,298,698 3,572,543
GE Capital Commercial Mortgage,
Ser 2004-C3, Cl A3 (D)
4.865%, 07/10/39 53,335 53,600
JPMorgan Chase Commercial
Mortgage Securities,
Ser 2004-PNC1, Cl A4 (D)
5.367%, 06/12/41 5,000,000 5,325,015
Lehman Mortgage Trust,
Ser 2007-8, Cl 1A1
6.000%, 09/25/37 4,082,975 3,545,884
Morgan Stanley Capital I,
Ser 2003-T11, Cl A4
5.150%, 06/13/41 4,768,877 4,906,182
Morgan Stanley Dean Witter
Capital I, Ser 2001-TOP3, Cl A4
6.390%, 07/15/33 25,983 25,962
Residential Funding Mortgage
Securities I, Ser 2004-S3, Cl A1
4.750%, 03/25/19 1,399,605 1,436,210
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 81
SCHEDULE OF INVESTMENTS
JULY 31, 2012
BOND FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES - (CONTINUED)
--------------------------------------------------------------------------------
Sequoia Mortgage Trust, (D)
Ser 2012-2, Cl A2
3.500%, 04/25/42 $ 4,124,509 $ 4,324,366
Ser 2012-1, Cl 2A1
3.474%, 01/25/42 2,269,938 2,335,923
Wells Fargo Mortgage Backed
Securities Trust,
Ser 2007-7, Cl A1
6.000%, 06/25/37 4,318,270 4,014,907
Ser 2004-2, Cl A1
5.000%, 01/25/19 1,878,939 1,921,652
Ser 2003-M, Cl A1 (D)
4.694%, 12/25/33 949,943 964,405
Ser 2003-13, Cl A1
4.500%, 11/25/18 599,090 615,616
------------
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $43,505,826) 45,403,532
------------
--------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS - 15.6%
--------------------------------------------------------------------------------
FHLMC Gold
6.000%, 06/01/13 58,147 59,519
6.000%, 09/01/13 79,734 84,673
6.000%, 09/01/17 674,534 721,023
6.000%, 11/01/17 246,908 268,455
5.500%, 03/01/17 185,908 200,155
5.000%, 10/01/20 380,564 409,453
4.500%, 05/01/19 484,266 520,208
4.500%, 07/01/19 1,687,460 1,812,706
4.500%, 04/01/20 205,298 220,535
4.500%, 07/01/23 1,430,403 1,529,864
4.000%, 05/01/26 3,421,990 3,645,025
FHLMC, ARM (D)
3.666%, 06/01/39 829,349 884,827
2.370%, 12/01/34 1,864,892 1,979,709
FHLMC, CMO REMIC
Ser 1666, Cl J
6.250%, 01/15/24 1,460,069 1,637,590
FNMA
8.500%, 05/01/25 13,644 16,708
8.000%, 08/01/24 1,806 1,823
8.000%, 09/01/24 405 419
8.000%, 06/01/30 6,148 6,856
7.500%, 12/01/26 110,026 132,399
7.000%, 05/01/30 37,284 44,358
6.500%, 04/01/14 59,731 61,028
6.500%, 05/01/26 58,600 68,678
6.500%, 03/01/28 6,048 7,143
6.500%, 04/01/28 91,105 107,600
6.500%, 01/01/29 333,805 394,242
6.500%, 06/01/29 69,022 81,155
6.500%, 06/01/29 172,176 202,443
6.500%, 07/01/29 163,337 192,050
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED
OBLIGATIONS - (CONTINUED)
--------------------------------------------------------------------------------
FNMA (continued)
6.500%, 08/01/29 $ 61,871 $ 72,747
6.500%, 05/01/30 215,679 253,593
6.000%, 03/01/13 2,248 2,259
6.000%, 05/01/16 173,912 185,829
6.000%, 10/01/16 246,482 263,372
6.000%, 11/01/17 515,486 550,810
6.000%, 12/01/27 12,240 13,737
6.000%, 12/01/27 6,841 7,678
6.000%, 12/01/27 1,007 1,130
6.000%, 07/01/28 242,951 272,675
6.000%, 08/01/28 50,544 56,728
6.000%, 10/01/28 112,032 126,088
6.000%, 10/01/28 31,956 35,965
6.000%, 12/01/28 261,222 293,998
6.000%, 12/01/28 197,834 222,162
6.000%, 12/01/28 52,439 59,018
5.500%, 01/01/17 122,820 133,569
5.500%, 02/01/17 64,393 70,230
5.500%, 12/01/17 738,076 799,529
5.500%, 03/01/20 3,711,218 4,068,500
5.000%, 11/01/17 834,634 906,802
5.000%, 12/01/17 266,947 290,029
5.000%, 02/01/18 885,028 961,553
5.000%, 11/01/18 167,593 182,084
5.000%, 09/01/25 3,380,157 3,659,222
5.000%, 11/01/33 3,621,956 3,967,174
5.000%, 03/01/34 1,203,662 1,318,385
4.500%, 04/01/18 4,754,515 5,140,225
4.000%, 05/01/25 1,152,770 1,233,500
3.500%, 09/01/25 5,504,892 5,855,140
3.500%, 10/01/25 2,538,238 2,699,734
3.500%, 10/01/26 6,119,037 6,508,360
FNMA, ARM (D)
2.589%, 01/01/36 3,058,709 3,245,843
GNMA
8.000%, 05/15/17 2,239 2,246
8.000%, 11/15/26 130,235 158,444
8.000%, 12/15/26 40,828 48,830
7.500%, 05/15/23 54,681 63,735
7.500%, 01/15/24 1,029 1,032
7.500%, 01/15/24 590 616
7.500%, 01/15/24 20,634 24,528
7.500%, 02/15/27 15,085 18,324
7.500%, 02/15/27 4,343 4,471
7.500%, 07/15/27 11,507 12,700
7.500%, 08/15/27 11,558 12,591
7.500%, 08/15/27 1,090 1,163
7.500%, 08/15/27 607 661
7.500%, 08/15/27 8,031 9,755
7.500%, 08/15/27 3,489 3,620
7.000%, 01/15/24 3,780 4,460
The accompanying notes are an integral part of the financial statements.
82 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2012
BOND FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED
OBLIGATIONS - (CONTINUED)
--------------------------------------------------------------------------------
GNMA (continued)
7.000%, 04/15/24 $ 13,608 $ 16,057
6.500%, 12/15/23 22,136 25,681
6.500%, 12/15/23 3,853 4,449
6.500%, 01/15/24 6,045 7,020
6.500%, 02/15/24 45,312 52,540
6.500%, 04/15/26 22,537 26,430
6.500%, 01/15/29 148,384 174,582
6.500%, 05/15/29 345,396 409,774
6.500%, 06/15/29 26,062 30,701
6.000%, 08/15/28 66,825 75,760
6.000%, 09/15/28 49,477 56,572
6.000%, 09/15/28 131,042 149,833
------------
TOTAL U.S. GOVERNMENT AGENCY
MORTGAGE-BACKED OBLIGATIONS
(Cost $57,367,792) 60,144,887
------------
--------------------------------------------------------------------------------
U.S. TREASURY OBLIGATION - 9.0%
--------------------------------------------------------------------------------
U.S. Treasury Notes
3.125%, 05/15/21 1,150,000 1,324,746
3.000%, 09/30/16 15,000,000 16,557,420
2.000%, 01/31/16 3,150,000 3,329,648
2.000%, 04/30/16 950,000 1,006,480
1.875%, 06/30/15 3,750,000 3,922,853
1.875%, 10/31/17 2,000,000 2,124,844
1.750%, 05/15/22 3,000,000 3,070,782
1.500%, 06/30/16 1,850,000 1,926,457
0.875%, 01/31/17 1,500,000 1,522,968
------------
TOTAL U.S. TREASURY OBLIGATION
(Cost $32,332,784) 34,786,198
------------
--------------------------------------------------------------------------------
ASSET-BACKED SECURITIES - 8.6%
--------------------------------------------------------------------------------
AEP Texas Central Transition Funding,
Ser 2012-1, Cl A1
0.880%, 12/01/18 6,000,000 6,038,792
Ally Master Owner Trust,
Ser 2011-1, Cl A2
2.150%, 01/15/16 2,500,000 2,547,442
Avis Budget Rental Car Funding AESOP, (A)
Ser 2011-2A, Cl A
2.370%, 11/20/14 3,000,000 3,064,682
Ser 2011-1A, Cl A
1.850%, 11/20/14 1,400,000 1,410,503
BMW Vehicle Owner Trust,
Ser 2010-A, Cl A3
1.390%, 04/25/13 866,503 869,297
Centerpoint Energy Transition Bond,
Ser 2005-A, Cl A3
5.090%, 08/01/15 1,075,000 1,117,037
--------------------------------------------------------------------------------
Description Par/Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
ASSET-BACKED SECURITIES - (CONTINUED)
--------------------------------------------------------------------------------
Hertz Vehicle Financing,
Ser 2011-1A, Cl A1 (A)
2.200%, 03/25/16 $ 3,500,000 $ 3,587,391
Oncor Electric Delivery Transition
Bond, Ser 2004-1, Cl A3
5.290%, 05/15/18 3,120,000 3,457,337
SLM Student Loan Trust,
Ser 2011-2, Cl A1 (D)
0.846%, 11/25/27 4,686,382 4,705,649
Volkswagen Auto Loan Enhanced
Trust, Ser 2011-1, Cl A4
1.980%, 09/20/17 2,425,000 2,495,538
World Omni Auto Receivables Trust,
Ser 2011-A, Cl A4
1.910%, 04/15/16 3,800,000 3,894,354
------------
TOTAL ASSET-BACKED SECURITIES
(Cost $32,384,727) 33,188,022
------------
--------------------------------------------------------------------------------
TAXABLE MUNICIPAL BONDS - 4.4%
--------------------------------------------------------------------------------
CALIFORNIA - 3.9%
California State, Public School
Improvements, Taxable, GO
6.200%, 10/01/19 2,750,000 3,294,720
Los Angeles, Department of
Water &
Power Revenue, Build America
Bonds, Taxable, RB
6.574%, 07/01/45 2,900,000 4,334,166
Metropolitan Water District of
Southern California, Build America
Bonds, Taxable, RB
6.947%, 07/01/40 4,750,000 5,820,080
University of California Revenue,
Build America Bonds, Taxable,
RB (D)
1.988%, 05/15/50 1,750,000 1,769,443
------------
15,218,409
------------
NEW JERSEY - 0.5%
New Jersey State, Turnpike Authority
Turnpike Revenue, Build America
Bonds, Taxable, RB
7.102%, 01/01/41 1,250,000 1,824,725
------------
TOTAL TAXABLE MUNICIPAL BONDS
(Cost $13,841,718) 17,043,134
------------
--------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 0.9%
--------------------------------------------------------------------------------
Dreyfus Cash Management 3,365,895 3,365,895
------------
TOTAL REGISTERED INVESTMENT
COMPANY
(Cost $3,365,895) 3,365,895
------------
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 83
SCHEDULE OF INVESTMENTS
JULY 31, 2012
BOND FUND (CONCLUDED)
--------------------------------------------------------------------------------
Value
--------------------------------------------------------------------------------
TOTAL INVESTMENTS - 99.2%
(Cost $355,090,532) $382,766,990
------------
OTHER ASSETS & LIABILITIES, NET - 0.8% 3,223,356
------------
NET ASSETS - 100.0% $385,990,346
============
--------------------------------------------------------------------------------
(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, 2012 WAS $11,635,119 AND REPRESENTED 3% OF NET
ASSETS.
(B) THE ISSUER IS IN DEFAULT OF CERTAIN DEBT COVENANTS. INCOME IS NOT BEING
ACCRUED. AS OF JULY 31, 2012, THE VALUE OF THIS SECURITY AMOUNTED TO
$970,000, WHICH REPRESENTS 0.3% OF NET ASSETS.
(C) SECURITY CONSIDERED ILLIQUID. THE TOTAL VALUE OF SUCH SECURITY AS OF JULY
31, 2012 WAS $564,542 AND REPRESENTED 0.1% OF NET ASSETS.
(D) FLOATING RATE SECURITY. RATE DISCLOSED IS AS OF JULY 31, 2012.
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
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, 2012
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
07/31/12 PRICE INPUTS INPUTS
------------- ------------ -------------- ------------
Corporate Obligations $ 188,835,322 $ -- $ 188,835,322 $ --
Mortgage-Backed Securities 45,403,532 -- 45,403,532 --
U.S. Government Agency Mortgage-Backed Obligations 60,144,887 -- 60,144,887 --
U.S. Treasury Obligation 34,786,198 -- 34,786,198 --
Asset-Backed Securities 33,188,022 -- 33,188,022 --
Taxable Municipal Bonds 17,043,134 -- 17,043,134 --
Registered Investment Company 3,365,895 3,365,895 -- --
------------- ------------ -------------- ------------
Total: $ 382,766,990 $ 3,365,895 $ 379,401,095 $ --
============= ============ ============== ============
The accompanying notes are an integral part of the financial statements.
84 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2012
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - 97.7%
--------------------------------------------------------------------------------
CALIFORNIA - 97.7%
Alhambra, Unified School District,
Election 2004, Ser B, GO
5.250%, 08/01/23 (A) $ 1,150,000 $ 1,355,827
Ser A, GO
5.000%, 08/01/20 490,000 594,880
5.000%, 08/01/21 425,000 518,143
Atascadero Unified School District,
Election 2010, Ser A, GO
AGM Insured
5.250%, 08/01/25 (A) 345,000 403,426
Bay Area Toll Authority,
San Francisco Bay Area,
Ser F-1, RB,
5.250%, 04/01/23 (A) 1,015,000 1,228,191
Burlingame, Elementary School
District, GO, AGM Insured
5.250%, 07/15/16 795,000 927,892
California State, Department of
Transportation, Federal Highway
Grant, Anticipation Bonds, Ser A,
RB, National-RE FGIC Insured
5.000%, 02/01/14 3,230,000 3,454,194
California State,
Department of Water
Resources, Central Valley Project,
Ser AC, RB, National-RE Insured
5.000%, 12/01/21 (A) 1,470,000 1,618,205
Prerefunded @ 100
5.000%, 12/01/14 (A) (B) 85,000 94,239
Central Valley Project, Ser AE, RB,
5.000%, 12/01/22 (A) 3,085,000 3,717,826
Central Valley Project, Ser Z,
ETM, RB, FGIC Insured
5.000%, 12/01/12 10,000 10,160
RB, National-RE FGIC Insured
5.000%, 12/01/12 1,075,000 1,092,039
ETM, RB, AGM Insured
5.500%, 12/01/14 10,000 11,190
Power Supply Revenue, RB,
Ser H, AGM Insured
5.000%, 05/01/21 (A) 1,485,000 1,756,547
5.000%, 05/01/22 (A) 1,645,000 1,939,866
Subuser F5
5.000%, 05/01/22 (A) 875,000 1,031,844
RB, AGM Insured
5.500%, 12/01/14 1,415,000 1,581,673
Ser M, RB
5.000%, 05/01/14 3,000,000 3,240,720
California State, Economic Recovery,
Ser A, GO
5.250%, 07/01/14 1,635,000 1,786,139
5.000%, 07/01/20 (A) 480,000 588,130
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
Ser A, GO, ETM
5.250%, 07/01/14 $ 200,000 $ 218,810
Ser A, GO, National-RE Insured
5.250%, 07/01/13 435,000 454,862
5.000%, 07/01/15 (A) 1,250,000 1,356,350
Ser A, GO, State Guaranteed
5.250%, 07/01/21 (A) 4,000,000 4,933,920
California State,
Educational Facilities Authority,
Santa Clara University, RB
5.250%, 04/01/23 (A) 250,000 289,937
5.250%, 04/01/24 (A) 670,000 775,103
Stanford University,
Ser P, RB
5.250%, 12/01/13 900,000 959,607
California State, GO
5.000%, 12/01/17 (A) 1,545,000 1,807,526
5.000%, 11/01/24 (A) 2,000,000 2,344,340
AMBAC Insured
5.000%, 11/01/17 1,000,000 1,188,650
Various Purposes
5.250%, 10/01/21 (A) 1,000,000 1,203,970
5.625%, 04/01/25 (A) 1,975,000 2,336,840
California State, Public Works Board,
Regents of the University of
California
Ser G, RB
5.000%, 12/01/17 1,500,000 1,813,995
5.000%, 12/01/21 1,000,000 1,268,710
California State, University,
Systemwide, Ser A, RB
5.250%, 11/01/22 (A) 255,000 299,821
5.000%, 11/01/25 (A) 910,000 1,070,642
5.000%, 11/01/26 (A) 1,500,000 1,756,725
Campbell, Unified High School
District, GO
5.250%, 08/01/25 (A) 695,000 820,858
Cerritos Community College District,
Election 2004, Ser C, GO
5.250%, 08/01/24 (A) 450,000 532,125
5.250%, 08/01/25 (A) 750,000 880,020
Chaffey, Unified High School
District, GO, National-RE
FGIC Insured
5.000%, 08/01/15 1,000,000 1,123,080
Citrus Community College
District, Election 2004,
Ser C, GO
5.250%, 06/01/25 (A) 505,000 587,179
Claremont, Unified School
District, GO
5.000%, 08/01/28 (A) 3,050,000 3,520,554
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 85
SCHEDULE OF INVESTMENTS
JULY 31, 2012
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
Coast Community College, GO,
National-RE Insured
5.250%, 08/01/15 $ 1,055,000 $ 1,193,975
Corona-Norca Unified School
District, Election 2006,
Ser A, GO, AGM Insured
5.000%, 08/01/17 505,000 592,936
Ser E, GO
5.000%, 08/01/16 920,000 1,060,622
Desert Sands Unified School District,
Election 2001, GO
5.750%, 08/01/19 (A) 700,000 864,514
5.250%, 08/01/20 (A) 610,000 730,225
5.250%, 08/01/22 (A) 650,000 767,572
5.500%, 08/01/25 (A) 300,000 354,021
Dublin, Unified School District,
Election 2004, Ser A, GO,
AGM Insured
5.000%, 08/01/21 (A) 720,000 749,016
5.000%, 08/01/26 (A) 1,580,000 1,618,552
El Camino, Community College,
GO, AGM Insured
5.000%, 08/01/16 (A) 1,000,000 1,132,940
Fallbrook, Unified High School
District, GO, National-RE
FGIC Insured
5.375%, 09/01/12 250,000 251,007
Fallbrook, Union Elementary School
District, Election 2002, Ser A, GO
5.000%, 08/01/23 (A) 720,000 905,141
Fontana, Unified School District,
Ser A, GO, AGM Insured
5.250%, 08/01/19 (A) 980,000 1,060,419
Gavilan, Joint Community College
District, GO
5.000%, 08/01/21 1,000,000 1,259,900
Gilroy, Unified School District,
Election 2008, Ser A, GO
5.250%, 08/01/22 (A) 1,800,000 2,128,500
6.000%, 08/01/25 (A) 1,400,000 1,707,622
Grant, Joint Union High School
District, Election 2006, GO,
AGM Insured
5.000%, 08/01/21 (A) 975,000 1,111,656
Hayward, Unified School District, GO
5.000%, 08/01/25 (A) 1,000,000 1,068,150
Imperial Irrigation District,
Ser B, RB
5.000%, 11/01/26 (A) 1,000,000 1,145,080
Ser C, RB
5.000%, 11/01/26 (A) 1,600,000 1,832,128
Irvine Ranch Water District, Ser B,
GO, LOC Bank of America NA
0.160%, 10/01/41 (A) (C) 3,400,000 3,400,000
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
Kern High School District, GO
5.000%, 08/01/22 $ 500,000 $ 611,425
Lodi, Unified School District,
Election 2002, GO, AGM Insured
5.250%, 08/01/22 (A) 1,000,000 1,049,940
Long Beach, Community College
District, Election 2008, Ser A, GO
5.000%, 06/01/24 (A) 465,000 524,706
Long Beach, Harbor Revenue,
Ser B, RB,
5.000%, 05/15/24 (A) 1,470,000 1,772,247
Long Beach, Unified School District,
Election 2008, Ser A, GO
4.000%, 08/01/14 180,000 192,710
5.250%, 08/01/24 (A) 200,000 235,234
5.250%, 08/01/25 (A) 1,640,000 1,918,587
Ser B, GO
5.250%, 08/01/24 (A) 1,070,000 1,258,502
Los Angeles County, Metropolitan
Transportation Authority,
Sales Tax Project,
Ser A, AGM Insured
5.000%, 07/01/18 (A) 1,280,000 1,334,093
Sales Tax Revenue, Proposition C,
Ser A, RB, National-RE Insured
5.250%, 07/01/13 200,000 209,114
Los Angeles County, Public Works
Financing Authority,
Regional Park & Open Space,
Special Assessment,
AGM Insured
5.000%, 10/01/12 1,060,000 1,068,045
5.000%, 10/01/15 230,000 261,795
National-RE Insured
5.000%, 10/01/12 300,000 302,277
Los Angeles County, Sanitation
Districts Financing Authority,
Capital Project, Ser A, RB,
AGM Insured
5.000%, 10/01/21 (A) 245,000 257,453
Los Angeles County, Sanitation
Equipment, Ser A, RB, AGM Insured
5.000%, 02/01/14 (A) 750,000 766,455
Los Angeles Harbor Department,
Ser A, RB
5.000%, 08/01/20 (A) 2,000,000 2,452,740
5.250%, 08/01/21 (A) 350,000 429,796
Los Angeles,
Ser A, GO,
5.000%, 09/01/23 (A) 2,180,000 2,681,771
National-RE Insured
5.000%, 09/01/24 (A) 1,430,000 1,621,177
Ser A, GO, National-RE Insured,
Prerefunded @ 100
5.000%, 09/01/12 (A) (B) 3,500,000 3,513,125
The accompanying notes are an integral part of the financial statements.
86 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2012
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
Ser B, GO, AGM Insured
5.000%, 09/01/16 (A) $ 1,080,000 $ 1,228,252
Los Angeles, Community College
District, Election 2001, Ser A, GO,
National-RE FGIC Insured
5.000%, 08/01/23 (A) 500,000 584,955
Election 2003, Ser E, GO,
AGM Insured
5.000%, 08/01/17 (A) 1,000,000 1,167,800
5.000%, 08/01/23 (A) 1,360,000 1,557,540
Election 2008, Ser A, GO
5.500%, 08/01/22 (A) 1,500,000 1,874,400
5.500%, 08/01/24 (A) 1,000,000 1,217,190
Los Angeles, Department of Airports,
RB International Airport,
Ser A
5.000%, 05/15/23 (A) 665,000 807,044
Ser C
5.250%, 05/15/21 (A) 1,000,000 1,160,620
Ser D
5.000%, 05/15/24 (A) 860,000 1,025,937
Ser A
5.250%, 05/15/22 (A) 500,000 605,410
Los Angeles, Department of Water &
Power,
Ser A, RB
5.000%, 07/01/18 1,245,000 1,519,734
5.000%, 07/01/22 (A) 2,360,000 2,957,104
Ser A, Sub Ser A-2, RB,
National-RE Insured
5.000%, 07/01/19 (A) 2,500,000 2,598,375
Ser A-2, RB,
AGM Insured
5.000%, 07/01/25 (A) 2,000,000 2,243,060
Ser B, RB,
National-RE Insured
5.000%, 07/01/13 455,000 474,829
Sub Ser A-2, RB
5.000%, 07/01/15 575,000 648,790
Los Angeles, Unified School
District, GO,
Election 2004, Ser F,
FGIC Insured
5.000%, 07/01/19 (A) 595,000 690,033
Ser B,
AGM Insured
5.000%, 07/01/16 2,230,000 2,593,668
Ser D
5.250%, 07/01/24 (A) 1,000,000 1,185,380
Ser I
5.000%, 07/01/25 (A) 1,900,000 2,197,122
Los Angeles, Waste Water System, RB,
AGM Insured
5.000%, 06/01/22 (A) 920,000 954,150
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
Sub Ser A,
National-RE Insured
5.000%, 06/01/26 (A) $ 600,000 $ 618,156
Metropolitan Water District of
Southern California,
Ser A, RB
5.000%, 01/01/26 (A) 500,000 585,885
Ser B-3, RB
0.100%, 07/01/35 (A) (C) 3,400,000 3,400,000
Modesto Irrigation District, COP,
Capital Improvements, Ser A
5.500%, 10/01/25 (A) 1,500,000 1,675,860
Mount Diablo, Unified School
District, GO
5.000%, 08/01/26 (A) 300,000 347,505
Election 2002, Ser B
5.000%, 07/01/20 1,025,000 1,257,357
Election 2002, Ser B-2
5.000%, 07/01/24 (A) 2,000,000 2,386,100
North Orange County, Community
College District,
GO, National-RE Insured
5.000%, 08/01/15 1,070,000 1,215,327
5.000%, 08/01/23 (A) 2,880,000 3,174,970
Northern California Transmission
Agency Revenue, California-Oregon
Transmission Project, Ser A, RB
5.000%, 05/01/22 (A) 1,060,000 1,229,918
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 1,885,428
Orange County, Sanitation District,
Ser B, COP, AGM Insured
5.000%, 02/01/17 510,000 609,358
5.000%, 02/01/23 (A) 2,615,000 2,960,232
5.000%, 02/01/25 (A) 1,200,000 1,352,352
Orange County, Water District, Ser B,
COP, National-RE Insured
5.000%, 08/15/24 (A) 750,000 820,703
Pajaro Valley Unified School District,
GO, AGM Insured
5.250%, 08/01/21 (A) 500,000 562,375
Paramount, Unified School District,
GO, AGM Insured
5.000%, 09/01/15 1,000,000 1,106,790
Peralta, Community College
District, GO
5.000%, 08/01/20 2,240,000 2,690,218
Petaluma City, Elementary School
District, GO
4.000%, 08/01/15 705,000 766,589
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 87
SCHEDULE OF INVESTMENTS
JULY 31, 2012
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
Port of Oakland, RB,
Ser B, National-RE Insured
5.000%, 11/01/18 (A) $ 1,250,000 $ 1,439,825
Ser M, FGIC Insured,
Prerefunded @ 100
5.250%, 11/01/12 (A) (B) 1,000,000 1,012,410
Redding, Electric System Revenue,
Ser A, COP, AGM Insured
5.000%, 06/01/22 (A) 1,500,000 1,724,070
5.000%, 06/01/24 (A) 1,110,000 1,264,101
Redwood City, Elementary School
District, GO, National-RE
FGIC Insured
5.500%, 08/01/14 960,000 1,034,189
Riverside, Community College,
GO, AGM Insured
5.000%, 08/01/19 (A) 1,750,000 1,982,085
Sacramento, Municipal Utility
District, RB Electric Power & Light
Revenues,
Ser R, National-RE Insured
5.000%, 08/15/16 300,000 314,280
5.000%, 08/15/22 (A) 325,000 339,397
Prerefunded @ 100
5.000%, 08/15/13 (A) (B) 700,000 734,517
5.000%, 08/15/13 (A) (B) 795,000 834,201
Ser U, AGM Insured
5.000%, 08/15/24 (A) 265,000 309,806
Sacramento, Municipal Utility
District, RB, Electric Power & Light
Revenues,
Ser R, National-RE Insured
5.000%, 08/15/15 1,790,000 2,016,578
Ser U, AGM Insured
5.000%, 08/15/23 (A) 1,660,000 1,956,161
Sacramento, Unified School
District, GO
5.000%, 07/01/19 1,115,000 1,330,686
San Bernardino County, Community
College District, GO,
AGM Insured
5.000%, 08/01/15 1,000,000 1,127,200
Election 2002, Ser A
6.250%, 08/01/24 (A) 1,055,000 1,316,566
San Diego County, Water
Authority, COP,
Ser A, AGM Insured
5.000%, 05/01/20 (A) 1,000,000 1,184,660
Water Revenues, Ser 2008A,
National-RE FGIC Insured
5.250%, 05/01/16 1,310,000 1,525,128
Water Revenues, Ser A,
AGM Insured
5.000%, 05/01/26 (A) 3,520,000 3,781,958
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
San Diego, Community College
District, GO
5.000%, 08/01/20 $ 500,000 $ 629,660
5.000%, 08/01/21 400,000 509,280
5.000%, 08/01/24 (A) 2,000,000 2,504,040
San Diego, Public Facilities Financing
Authority,
RB, National-RE Insured
5.000%, 08/01/14 (A) 1,100,000 1,100,000
Sewer Authority, Ser A, RB
5.250%, 05/15/26 (A) 1,675,000 2,039,899
Sewer Authority, Ser B, RB
5.500%, 05/15/23 (A) 3,355,000 4,158,757
Water Authority, Ser B, RB
5.000%, 08/01/21 (A) 1,000,000 1,217,490
San Francisco City & County,
Airport Commission,
International Airport,
Second Series, Issue 32F, RB,
National-RE FGIC Insured
5.000%, 05/01/22 (A) 2,000,000 2,257,820
International Airport, Second
Series, Issue 32F, RB,
National-RE FGIC Insured
5.250%, 05/01/19 2,100,000 2,559,627
Earthquake Safety,
Ser E, GO
5.000%, 06/15/26 (A) 2,815,000 3,288,399
General Hospital,
Ser A, GO
5.250%, 06/15/24 (A) 250,000 296,418
Public Utilities Commission,
Water Revenue,
Ser A, RB, AGM Insured
5.000%, 11/01/23 (A) 1,000,000 1,139,900
Ser B, RB, National-RE Insured
5.000%, 11/01/15 (A) 1,250,000 1,264,750
Ser C, RB
5.000%, 11/01/12 525,000 531,153
Ser D, RB
5.000%, 11/01/26 (A) 5,075,000 6,125,576
Ser R1, GO
5.000%, 06/15/24 (A) 375,000 459,870
San Francisco Unified School District,
Prop A, Election 2006, Ser B, GO
5.250%, 06/15/23 (A) 925,000 1,098,031
San Francisco, Bay Area Rapid Transit,
Sales Tax Revenue, RB,
AMBAC Insured
5.250%, 07/01/14 (A) 300,000 301,164
San Francisco, Community College
District, Election 2001, Ser B, GO,
National-RE Insured
5.000%, 06/15/20 (A) 2,085,000 2,133,914
The accompanying notes are an integral part of the financial statements.
88 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2012
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
San Joaquin County, Delta Community
College District, Election 2004,
Ser A, GO, AGM Insured
4.500%, 08/01/15 $ 1,000,000 $ 1,101,750
San Juan, Unified School District,
Election 2002, GO, AGM Insured
5.000%, 08/01/26 (A) 1,560,000 1,786,278
Election 2002, Ser A, GO,
National-RE Insured
5.000%, 08/01/25 (A) 2,200,000 2,334,640
San Lorenzo, Unified School District,
Election 2008, Ser A, GO,
Assured Guaranty Insured
5.000%, 08/01/22 (A) 325,000 367,266
San Mateo, County, Transit District,
Sales Tax Revenue, Ser A, RB,
National-RE Insured
5.250%, 06/01/16 2,150,000 2,496,687
San Mateo, Joint Powers Financing
Authority, Lease Revenue, Capital
Projects, Ser A, RB
5.250%, 07/15/24 (A) 1,000,000 1,182,880
San Rafael, Elementary School
District, GO
5.000%, 08/01/24 (A) 325,000 386,623
5.000%, 08/01/27 (A) 875,000 1,027,889
San Ramon Valley, Unified School
District, Election 2002, GO,
AGM Insured
5.250%, 08/01/18 (A) 1,290,000 1,416,613
Santa Clara, Valley Transportation
Authority, Measure A, Ser A, RB,
AMBAC Insured
5.000%, 04/01/25 (A) 400,000 453,524
Santa Maria, Joint Unified High
School District, Ser A, ETM, GO,
AGM Insured
5.500%, 08/01/15 510,000 570,792
Santa Rosa, High School District, GO,
5.000%, 08/01/24 (A) 1,090,000 1,260,705
Shasta-Tehama-Trinity, Joint
Community College District, GO
5.000%, 08/01/26 (A) 560,000 637,302
5.000%, 08/01/27 (A) 500,000 568,185
Solano County, Community College,
Election 2002, Ser A, GO,
National-RE Insured,
Prerefunded @ 100
5.000%, 08/01/13 (A) (B) 1,865,000 1,952,543
Southern California, Public Power
Authority, Power Project Revenue,
Canyon Power, Ser A, RB
5.000%, 07/01/25 (A) 2,950,000 3,452,562
Transmission Project Revenue,
Sub Southern Transmission,
Ser A, RB
5.000%, 07/01/23 (A) 1,200,000 1,400,652
--------------------------------------------------------------------------------
Description Par/Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
State Center Community College
District, GO
5.000%, 08/01/20 $ 1,000,000 $ 1,229,750
Stockton, Unified School District,
Election 2005, GO, AGM Insured
5.000%, 08/01/16 645,000 705,424
Torrance, Unified School District,
Election 2008, Measure Z, GO
5.500%, 08/01/25 (A) 1,000,000 1,180,870
University of California,
Ser A, RB,
AMBAC Insured
5.125%, 05/15/18 (A) 705,000 729,943
5.000%, 05/15/22 (A) 1,500,000 1,556,325
5.000%, 05/15/25 (A) 600,000 620,448
Ser B, RB,
AMBAC Insured
5.250%, 05/15/23 (A) 1,500,000 1,559,985
Ser O, RB
5.500%, 05/15/22 (A) 2,000,000 2,456,140
------------
TOTAL MUNICIPAL BONDS
(Cost $238,555,368) 255,105,781
------------
--------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 0.8%
--------------------------------------------------------------------------------
BlackRock Liquidity Funds, California
Money Fund 2,115,182 2,115,182
------------
TOTAL REGISTERED INVESTMENT COMPANY
(Cost $2,115,182) 2,115,182
------------
TOTAL INVESTMENTS - 98.5%
(Cost $240,670,550) 257,220,963
------------
OTHER ASSETS & LIABILITIES, NET - 1.5% 4,010,703
------------
NET ASSETS - 100.0% $261,231,666
============
--------------------------------------------------------------------------------
(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, 2012.
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
NA - NATIONAL ASSOCIATION
RB - REVENUE BOND
SER - SERIES
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 89
SCHEDULE OF INVESTMENTS
JULY 31, 2012
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND (CONCLUDED)
A summary of the inputs used to value the Fund's net assets as of July 31, 2012
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
07/31/12 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Municipal Bonds $255,105,781 $ -- $255,105,781 $ --
Registered Investment Company 2,115,182 2,115,182 -- --
------------ ------------ ------------ ------------
Total: $257,220,963 $ 2,115,182 $255,105,781 $ --
============ ============ ============ ============
The accompanying notes are an integral part of the financial statements.
90 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2012
NATIONAL INTERMEDIATE TAX-FREE BOND FUND
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - 99.4%
--------------------------------------------------------------------------------
ALASKA - 4.2%
Alaska State, International Airports
System, (A) Ser B, RB, AMBAC
Insured, Prerefunded @ 100 (B)
5.750%, 10/01/12 $ 150,000 $ 151,347
Ser D, RB, National-RE Insured
5.000%, 10/01/22 2,000,000 2,273,500
Anchorage, City of Anchorage
Schools, Ser B, GO,
5.000%, 08/01/24 (A) 1,000,000 1,162,540
National-RE FGIC Insured
5.000%, 09/01/17 545,000 653,864
------------
4,241,251
------------
ARIZONA - 2.2%
Phoenix, GO, Ser A
6.250%, 07/01/17 1,000,000 1,255,900
Tucson, Water System Revenue, RB
5.000%, 07/01/21 (A) 775,000 922,157
------------
2,178,057
------------
CALIFORNIA - 22.6%
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 1,069,410
California State, Department of
Water Resources, Central Valley
Project, Ser X, RB, National-RE
FGIC Insured
5.500%, 12/01/15 625,000 729,131
Power Supply Revenue, RB,
Ser H, AGM Insured
5.000%, 05/01/22 (A) 1,000,000 1,179,250
California State, GO Various Purposes
5.250%, 10/01/21 (A) 1,000,000 1,203,970
5.625%, 04/01/25 (A) 1,250,000 1,479,013
Chico, Unified School District,
Ser B, GO, AGM Insured
5.000%, 08/01/25 (A) 1,625,000 1,820,065
Contra Costa, Water District,
Ser E, RB, AMBAC Insured
6.250%, 10/01/12 190,000 191,860
Elsinore Valley, Municipal Water
District, COP, National-RE
FGIC Insured
5.375%, 07/01/18 750,000 895,523
Long Beach, Unified School District,
Election 2008, Ser A, GO
5.250%, 08/01/24 (A) 525,000 617,489
5.250%, 08/01/25 (A) 1,000,000 1,169,870
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
Los Angeles, Ser A, GO,
5.000%, 09/01/23 (A) $ 2,000,000 $ 2,460,340
Ser A, GO, National-RE Insured
5.250%, 09/01/12 675,000 677,653
Los Angeles, Unified School District,
GO, Ser I
5.000%, 07/01/25 (A) 1,000,000 1,156,380
Redding, Electric System Revenue,
Ser A, COP, AGM Insured
5.000%, 06/01/22 (A) 1,000,000 1,149,380
Sacramento Municipal Utility District,
Ser R, RB, National-RE Insured
5.000%, 08/15/23 (A) 500,000 522,045
San Bernardino County, Community
College District, GO,
Election 2002, Ser A
6.250%, 08/01/24 (A) 850,000 1,060,741
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 1,218,870
San Jose, Redevelopment Agency, TA,
ETM, National-RE Insured,
6.000%, 08/01/15 430,000 501,604
National-RE Insured
6.000%, 08/01/15 775,000 842,270
San Ramon Valley, Unified School
District, Election 2002,
GO, AGM Insured
5.250%, 08/01/18 (A) 1,670,000 1,833,911
Torrance, Unified School District,
Election of 2008, Measure Y, GO
5.500%, 08/01/25 (A) 750,000 885,653
------------
22,664,428
------------
COLORADO - 0.6%
Regional Transportation District, Sales
Tax, Ser B, RB, AMBAC Insured
5.250%, 11/01/12 625,000 632,737
------------
CONNECTICUT - 3.8%
Connecticut State, Ser C, GO
5.000%, 06/01/14 1,600,000 1,733,280
Ser D, GO
5.000%, 11/01/19 1,000,000 1,245,610
Ser F, GO
5.000%, 12/01/20 (A) 660,000 775,520
------------
3,754,410
------------
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 91
SCHEDULE OF INVESTMENTS
JULY 31, 2012
NATIONAL INTERMEDIATE TAX-FREE BOND FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
FLORIDA - 0.9%
Jacksonville, Local Government, Sales
Tax Revenue, RB, National-RE FGIC
Insured
5.500%, 10/01/13 $ 865,000 $ 914,902
------------
GEORGIA - 1.1%
Atlanta, Water & Wastewater
Revenue, Ser A, RB, National-RE
FGIC Insured
5.500%, 11/01/13 1,000,000 1,062,460
------------
HAWAII - 6.8%
Hawaii State Highway Revenue,
Ser B, RB, AGM Insured
5.000%, 07/01/15 1,025,000 1,155,585
Ser EA, GO
5.000%, 12/01/19 1,000,000 1,253,030
Honolulu City and County, Ser A, GO
5.000%, 04/01/25 (A) 1,000,000 1,173,260
Ser A, GO, National-RE Insured
5.000%, 07/01/25 (A) 1,895,000 2,040,365
University of Hawaii Revenue,
Ser A, RB,
5.500%, 10/01/22 (A) 500,000 613,585
5.500%, 10/01/23 (A) 500,000 608,755
------------
6,844,580
------------
IDAHO - 5.0%
Idaho State, Housing & Finance
Association, Grant & Revenue
Anticipation, Federal Highway
Trust, RB, National-RE Insured
5.000%, 07/15/15 1,000,000 1,116,610
Ser A, RB
5.000%, 07/15/22 (A) 580,000 679,232
5.250%, 07/15/24 (A) 1,750,000 2,067,485
Twin Falls County, School District No.
411, GO, National-RE Insured
5.000%, 09/15/16 1,000,000 1,165,760
------------
5,029,087
------------
ILLINOIS - 7.4%
Chicago, Ser A, GO, AGM Insured
5.000%, 01/01/23 (A) 1,075,000 1,180,812
Ser C, GO
5.000%, 01/01/23 (A) 1,285,000 1,473,368
Chicago, Board of Education,
Dedicated Revenues, Ser B, GO,
AMBAC Insured
5.000%, 12/01/23 (A) 1,375,000 1,548,346
Chicago, O'Hare International Airport
Revenue, Ser B, RB, AGM Insured
5.000%, 01/01/19 (A) 1,780,000 2,033,472
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
ILLINOIS - (CONTINUED)
Chicago, Project & Refunding,
Ser A, GO 5.250%, 01/01/21 (A) $ 1,020,000 $ 1,184,648
------------
7,420,646
------------
MASSACHUSETTS - 5.4%
Massachusetts State, Consolidated
Loan, Ser D, GO,
5.500%, 11/01/14 220,000 245,148
School Building Authority,
Sales Tax Revenue,
Ser A, RB, AGM Insured
5.000%, 08/15/14 2,175,000 2,376,013
Water Resources Authority, Ser A,
RB, National-RE Insured
5.250%, 08/01/15 1,055,000 1,202,742
5.250%, 08/01/16 1,310,000 1,544,385
------------
5,368,288
------------
NEVADA - 4.7%
Clark County, Limited Tax-Bond
Bank, GO
5.000%, 06/01/25 (A) 2,440,000 2,777,330
School District, Ser A, GO, AGM
Insured
5.500%, 06/15/16 (A) 1,250,000 1,310,575
Nevada State, Prerefunded Ser B, GO,
AGM Insured
5.000%, 08/01/24 (A) (B) 525,000 573,589
------------
4,661,494
------------
NEW JERSEY - 3.0%
New Jersey State,
Ser L, GO, AMBAC Insured
5.250%, 07/15/16 1,300,000 1,528,930
Transportation Trust Fund
Authority, Ser A, RB
5.250%, 12/15/21 655,000 814,473
5.500%, 12/15/22 525,000 661,469
------------
3,004,872
------------
NEW YORK - 6.0%
New York City, Ser C-1, GO, AGM
Insured
5.000%, 10/01/24 (A) 1,055,000 1,223,473
Ser M, GO, AGM Insured
5.000%, 04/01/15 1,000,000 1,119,090
New York City, Transitional Finance
Authority Subordinated Future Tax
Secured ETM, RB, Prerefunded
5.000%, 11/01/13 285,000 301,735
RB, Unrefunded
5.000%, 11/01/13 640,000 677,747
The accompanying notes are an integral part of the financial statements.
92 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2012
NATIONAL INTERMEDIATE TAX-FREE BOND FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
NEW YORK - (CONTINUED)
Ser C, RB,
5.000%, 11/01/17 $ 250,000 $ 302,530
New York State, Thruway Authority,
Second Highway and Bridge Trust
Fund, Ser A, RB, National-RE
Insured, Prerefunded @ 100 (B)
5.000%, 04/01/14 1,075,000 1,158,087
Second Highway and Bridge Trust
Fund, Ser B, RB
5.000%, 04/01/21 (A) 1,025,000 1,220,078
------------
6,002,740
------------
NORTH CAROLINA - 1.3%
North Carolina State, Public
Improvement, Ser A, GO,
5.000%, 03/01/23 (A) 1,000,000 1,023,740
North Carolina State, Highway, GO
5.000%, 05/01/15 (A) 250,000 270,978
------------
1,294,718
------------
OHIO - 0.2%
Ohio State, Common Schools
Facilities, Ser B, GO
4.300%, 09/15/12 200,000 200,968
------------
OREGON - 5.2%
Portland, Sewer System Revenue, First
Lien, Ser A, RB, AGM Insured
5.000%, 06/15/14 1,000,000 1,085,070
First Lien, Ser A, RB,
National-RE Insured
5.000%, 06/01/14 515,000 557,900
Second Lien, Ser B, RB,
AGM Insured
5.000%, 06/15/23 (A) 1,160,000 1,337,816
Washington County, School District
Authority No. 15, GO, AGM School
Board Guarantee Insured
5.000%, 06/15/14 1,000,000 1,085,650
Yamill County, School District
Authority No. 29J, GO, National-RE
FGIC Insured
5.250%, 06/15/16 1,000,000 1,168,670
------------
5,235,106
------------
PENNSYLVANIA - 0.9%
Commonwealth of Pennsylvania,
First Ser, GO,
5.000%, 07/01/17 325,000 390,780
Pennsylvania State, Refunding &
Projects, First Ser, GO,
National-RE Insured
5.250%, 02/01/14 500,000 536,565
------------
927,345
------------
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
TEXAS - 10.0%
Denton, Utilities System Revenue, RB,
National-RE Insured
5.250%, 12/01/23 (A) $ 1,065,000 $ 1,129,795
Houston, Texas Utility System
Revenue, Combined First Lien,
Ser A, RB, National-RE Insured
5.250%, 05/15/14 535,000 581,764
First Lien, Ser A, RB, AGM Insured
5.250%, 11/15/17 1,550,000 1,890,845
Lamar Consolidated Independent
School District, Schoolhouse, GO,
PSF Insured
5.000%, 02/15/17 800,000 950,864
Lower Colorado River Authority, RB
5.000%, 05/15/21 (A) 990,000 1,159,676
5.000%, 05/15/22 (A) 805,000 930,363
5.000%, 05/15/23 (A) 90,000 103,470
RB, Prerefunded @ 100 (B)
5.000%, 05/15/19 5,000 6,275
5.000%, 05/15/19 40,000 50,050
5.000%, 05/15/19 35,000 43,794
5.000%, 05/15/19 5,000 6,256
5.000%, 05/15/19 5,000 6,256
5.000%, 05/15/19 5,000 6,256
North East Independent School
District, Ser A, GO, PSF Insured
5.000%, 08/01/17 500,000 602,070
San Antonio, Water Revenue, RB,
National-RE FGIC Insured
5.000%, 05/15/17 1,000,000 1,197,750
Texas State, University Systems
Financing Revenue, RB
5.250%, 03/15/21 (A) 1,125,000 1,356,795
------------
10,022,279
------------
UTAH - 1.7%
Utah State, Board of Regents
Auxilliary & Campus Facilities
Revenue, Ser A, RB,
National-RE Insured
5.000%, 04/01/17 (A) 1,500,000 1,652,565
------------
VIRGINIA - 0.9%
City of Newport News Ser A, GO
5.000%, 07/01/24 (A) 735,000 896,788
------------
WASHINGTON - 5.5%
King & Pierce County School District
No. 408, GO
5.000%, 12/01/21 (A) 1,000,000 1,229,360
Pierce County, GO, AMBAC Insured
5.125%, 08/01/16 (A) 1,375,000 1,551,055
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 93
SCHEDULE OF INVESTMENTS
JULY 31, 2012
NATIONAL INTERMEDIATE TAX-FREE BOND FUND (CONCLUDED)
--------------------------------------------------------------------------------
Description Par/Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
WASHINGTON - (CONTINUED)
Seattle, Municipal Light & Power
Revenue, RB, AGM Insured,
5.000%, 08/01/17 (A) $ 1,000,000 $ 1,085,850
Washington State, Ser A, GO,
5.000%, 07/01/19 (A) 1,375,000 1,654,029
------------
5,520,294
------------
TOTAL MUNICIPAL BONDS
(Cost $91,904,355) 99,530,015
------------
--------------------------------------------------------------------------------
REGULATED INVESTMENT COMPANY - 0.3%
--------------------------------------------------------------------------------
Fidelity Institutional Tax-Exempt
Portfolio 294,333 294,333
------------
TOTAL REGULATED INVESTMENT COMPANY
(Cost $294,333) 294,333
------------
TOTAL INVESTMENTS - 99.7%
(Cost $92,198,688) 99,824,348
------------
OTHER ASSETS & LIABILITIES, NET - 0.3% 333,924
------------
NET ASSETS - 100.0% $100,158,272
============
--------------------------------------------------------------------------------
(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.
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
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, 2012
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
07/31/12 PRICE INPUTS INPUTS
----------- ---------- ----------- ------------
Municipal Bonds $99,530,015 $ -- $99,530,015 $ --
Registered Investment Company 294,333 294,333 -- --
----------- ---------- ----------- ------------
Total: $99,824,348 $ 294,333 $99,530,015 $ --
=========== ========== =========== ============
The accompanying notes are an integral part of the financial statements.
94 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2012
SHORT TERM BOND FUND
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - 55.5%
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 4.3%
Comcast
5.300%, 01/15/14 $ 1,150,000 $ 1,224,122
Georgia-Pacific (A)
8.250%, 05/01/16 1,500,000 1,628,664
JC Penney
9.000%, 08/01/12 500,000 500,000
Macy's Retail Holdings
7.875%, 07/15/15 1,000,000 1,180,413
Staples
9.750%, 01/15/14 1,000,000 1,114,045
Time Warner Cable
7.500%, 04/01/14 400,000 443,007
Walt Disney, MTN
1.125%, 02/15/17 750,000 756,577
------------
6,846,828
------------
CONSUMER STAPLES - 2.0%
Anheuser-Busch Inbev Worldwide
0.800%, 07/15/15 1,200,000 1,204,549
Coca-Cola
3.625%, 03/15/14 250,000 262,775
Kellogg
1.125%, 05/15/15 1,700,000 1,715,643
------------
3,182,967
------------
ENERGY - 8.3%
Energy Transfer Partners
8.500%, 04/15/14 522,000 577,766
6.000%, 07/01/13 1,350,000 1,406,345
Enterprise Products Operating, Ser M
5.650%, 04/01/13 1,300,000 1,338,054
Kinder Morgan Energy Partners
5.000%, 12/15/13 1,332,000 1,404,518
Petrobras International Finance
3.875%, 01/27/16 2,000,000 2,079,174
Petrohawk Energy
7.875%, 06/01/15 1,800,000 1,872,000
SeaRiver Maritime (B)
0.000%, 09/01/12 3,000,000 2,995,875
Transocean
5.050%, 12/15/16 1,400,000 1,550,013
------------
13,223,745
------------
FINANCIALS - 14.5%
American Express Credit, MTN
1.750%, 06/12/15 1,750,000 1,791,876
American International Group
4.250%, 09/15/14 1,500,000 1,567,383
BB&T, MTN
2.150%, 03/22/17 1,750,000 1,804,794
BP Capital Markets PLC
3.875%, 03/10/15 1,250,000 1,347,798
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - (CONTINUED)
--------------------------------------------------------------------------------
FINANCIALS - (CONTINUED)
Capital One Financial
2.150%, 03/23/15 $ 1,750,000 $ 1,777,487
Caterpillar Financial Services, MTN
1.100%, 05/29/15 1,000,000 1,013,688
Citigroup
4.750%, 05/19/15 1,500,000 1,588,827
Ford Motor Credit
3.875%, 01/15/15 1,450,000 1,501,381
General Electric Capital (D)
1.336%, 05/09/16 2,000,000 1,978,782
Goldman Sachs Group
5.700%, 09/01/12 1,000,000 1,003,998
JPMorgan Chase
5.125%, 09/15/14 500,000 536,865
4.750%, 05/01/13 1,000,000 1,030,150
Lehman Brothers Holdings, MTN (C)
0.000%, 12/01/49 500,000 121,250
NASDAQ OMX Group
5.250%, 01/16/18 750,000 808,949
Toyota Motor Credit, MTN
1.000%, 02/17/15 1,650,000 1,667,021
Wachovia
4.875%, 02/15/14 2,000,000 2,102,898
WCI Finance/WEA Finance (A)
5.400%, 10/01/12 1,420,000 1,430,552
------------
23,073,699
------------
FOREIGN GOVERNMENTS - 3.1%
Export-Import Bank of Korea
4.000%, 01/11/17 1,000,000 1,071,467
Hydro-Quebec
1.375%, 06/19/17 1,500,000 1,514,746
Mexico Government International
Bond
5.875%, 02/17/14 750,000 800,625
Province of Ontario Canada
0.950%, 05/26/15 1,500,000 1,513,783
------------
4,900,621
------------
HEALTH CARE - 5.6%
Amgen
1.875%, 11/15/14 2,000,000 2,045,380
Boston Scientific
5.450%, 06/15/14 1,000,000 1,073,019
Gilead Sciences
3.050%, 12/01/16 1,500,000 1,605,064
2.400%, 12/01/14 350,000 362,566
Sanofi
1.625%, 03/28/14 750,000 764,506
Teva Pharmaceutical Finance IV
1.700%, 11/10/14 2,000,000 2,039,400
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 95
SCHEDULE OF INVESTMENTS
JULY 31, 2012
SHORT TERM BOND FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - (CONTINUED)
--------------------------------------------------------------------------------
HEALTH CARE - (CONTINUED)
Wellpoint
6.800%, 08/01/12 $ 500,000 $ 500,000
6.000%, 02/15/14 475,000 510,374
------------
8,900,309
------------
INDUSTRIAL - 3.2%
Continental Airlines Pass Through
Trust, Ser 2010-1, Cl A
4.750%, 01/12/21 954,344 1,002,061
L-3 Communications, Ser B
6.375%, 10/15/15 640,000 653,600
Northwest Airlines, Ser 02-1G
6.264%, 11/20/21 1,335,225 1,378,619
Union Pacific
5.450%, 01/31/13 935,000 957,449
United Technologies
1.200%, 06/01/15 1,100,000 1,117,544
------------
5,109,273
------------
INFORMATION TECHNOLOGY - 2.4%
Hewlett-Packard
3.000%, 09/15/16 2,000,000 2,056,486
Xerox (D)
1.868%, 09/13/13 850,000 855,647
1.286%, 05/16/14 1,000,000 996,755
------------
3,908,888
------------
MATERIALS - 4.9%
ArcelorMittal
4.500%, 02/25/17 1,150,000 1,138,441
Ball
7.375%, 09/01/19 1,570,000 1,742,700
Ecolab
2.375%, 12/08/14 1,225,000 1,271,254
Rio Tinto Alcan
5.200%, 01/15/14 1,250,000 1,322,229
Teck Resources
10.250%, 05/15/16 500,000 552,500
7.000%, 09/15/12 1,743,000 1,754,913
------------
7,782,037
------------
TELECOMMUNICATION SERVICES - 3.7%
Cellco Partnership/Verizon Wireless
Capital
5.550%, 02/01/14 2,000,000 2,138,704
Telefonica Emisiones SAU
3.992%, 02/16/16 1,500,000 1,403,224
Thomson Reuters
5.950%, 07/15/13 1,000,000 1,050,060
Verizon Communications, Inc.
1.950%, 03/28/14 1,200,000 1,228,220
------------
5,820,208
------------
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - (CONTINUED)
--------------------------------------------------------------------------------
UTILITIES - 3.5%
Consolidated Natural Gas
5.000%, 03/01/14 $ 1,000,000 $ 1,059,708
Exelon Generation
5.350%, 01/15/14 1,482,000 1,568,611
MidAmerican Energy Holdings,
5.875%, 10/01/12 500,000 504,315
Ser D
5.000%, 02/15/14 1,750,000 1,862,644
Southern California Edison
5.750%, 03/15/14 500,000 540,778
------------
5,536,056
------------
TOTAL CORPORATE OBLIGATIONS
(Cost $87,124,958) 88,284,631
------------
--------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED
OBLIGATIONS - 19.5%
--------------------------------------------------------------------------------
FHLMC Gold
6.000%, 01/01/13 9,110 9,563
6.000%, 09/01/13 4,018 4,267
6.000%, 04/01/14 10,756 11,325
6.000%, 05/01/14 4,673 4,859
6.000%, 05/01/14 7,657 7,962
6.000%, 05/01/14 10,107 10,510
6.000%, 05/01/14 44,355 46,721
6.000%, 07/01/14 45,268 47,209
6.000%, 10/01/16 59,186 63,265
6.000%, 04/01/17 194,886 210,736
6.000%, 04/01/29 63,780 71,528
6.000%, 04/01/38 353,735 393,388
5.500%, 07/01/15 104,141 112,329
5.500%, 03/01/17 58,717 63,217
5.500%, 12/01/17 6,017 6,535
5.500%, 02/01/18 73,966 80,092
5.500%, 11/01/18 7,796 8,449
5.500%, 10/01/32 424,263 467,514
5.500%, 12/01/34 262,881 289,023
5.000%, 10/01/18 218,090 234,187
5.000%, 07/01/20 91,593 99,082
5.000%, 06/01/25 455,497 490,675
3.500%, 12/01/25 939,728 993,938
FHLMC, ARM
3.567%, 06/01/39 331,740 353,931
3.031%, 03/01/35 185,440 199,244
2.598%, 11/01/35 1,281,366 1,369,906
2.459%, 09/01/36 1,158,453 1,241,759
2.433%, 10/01/36 1,433,055 1,526,135
2.367%, 01/01/34 240,928 254,283
2.355%, 12/01/34 1,317,015 1,398,100
FNMA
8.000%, 06/01/30 3,299 4,101
8.000%, 11/01/30 2,338 2,903
The accompanying notes are an integral part of the financial statements.
96 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2012
SHORT TERM BOND FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED
OBLIGATIONS - CONTINUED
--------------------------------------------------------------------------------
FNMA (continued)
6.500%, 06/01/16 $ 26,939 $ 28,827
6.500%, 07/01/16 19,350 20,826
6.500%, 11/01/16 17,605 18,948
6.500%, 01/01/17 20,427 21,985
6.500%, 02/01/17 7,651 8,234
6.500%, 04/01/17 29,619 32,288
6.500%, 07/01/17 27,124 29,569
6.000%, 04/01/16 93,567 99,979
6.000%, 04/01/16 202,623 214,275
6.000%, 05/01/16 218,002 232,940
6.000%, 05/01/16 64,455 65,712
6.000%, 06/01/16 10,752 11,488
6.000%, 08/01/16 19,466 20,799
6.000%, 10/01/16 49,296 52,674
6.000%, 05/01/18 140,446 150,070
5.500%, 07/01/14 39,446 42,874
5.500%, 09/01/14 56,817 61,754
5.500%, 08/01/15 135,700 147,492
5.500%, 12/01/16 23,893 25,984
5.500%, 01/01/17 172,855 187,984
5.500%, 09/01/17 261,160 282,479
5.500%, 09/01/17 28,745 31,351
5.500%, 10/01/17 41,768 45,212
5.500%, 11/01/17 69,456 75,063
5.500%, 12/01/17 41,026 44,476
5.500%, 02/01/18 5,155 5,651
5.500%, 04/01/18 11,449 12,552
5.500%, 10/01/18 13,141 14,332
5.500%, 12/01/18 475,427 517,037
5.500%, 09/01/34 565,235 624,535
5.500%, 01/01/35 401,050 445,381
5.140%, 01/01/16 937,446 1,033,568
5.000%, 07/01/14 10,510 11,376
5.000%, 05/01/18 12,559 13,645
5.000%, 06/01/18 47,184 51,264
5.000%, 05/01/23 1,376,505 1,490,149
4.000%, 09/01/20 1,445,543 1,548,221
3.500%, 09/01/25 2,223,129 2,364,576
3.500%, 12/01/25 1,136,511 1,208,822
3.500%, 04/01/26 599,756 637,916
3.500%, 07/01/26 761,771 810,239
3.000%, 04/01/27 2,931,994 3,096,186
FNMA, ARM
2.719%, 06/01/34 1,155,996 1,237,270
2.589%, 01/01/36 768,448 815,462
2.483%, 08/01/27 20,812 21,595
2.398%, 09/01/33 141,189 150,268
2.291%, 01/01/35 428,042 455,718
2.268%, 09/01/35 1,783,614 1,896,098
FNMA, CMO REMIC,
Ser 2002-18, Cl PC
5.500%, 04/25/17 43,472 44,540
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED
OBLIGATIONS - CONTINUED
--------------------------------------------------------------------------------
GNMA, CMO
Ser 2004-43, Cl C (D)
4.994%, 12/16/25 $ 467,877 $ 478,612
------------
TOTAL U.S. GOVERNMENT AGENCY
MORTGAGE-BACKED OBLIGATIONS
(Cost $30,303,047) 31,015,032
------------
--------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES - 5.6%
--------------------------------------------------------------------------------
Banc of America Commercial
Mortgage, Ser 2005-1, Cl A3
4.877%, 11/10/42 18,452 18,439
Bear Stearns Commercial Mortgage
Securities, Ser 2003-T12, Cl A3 (D)
4.240%, 08/13/39 99,485 99,562
Chase Mortgage Finance,
Ser 2003-S10, Cl A1
4.750%, 11/25/18 263,049 271,299
Ser 2004-S1, CI A3
5.500%, 02/25/19 194,900 202,158
Citicorp Mortgage Securities,
Ser 2003-10, Cl A1
4.500%, 11/25/18 314,385 323,155
DBUBS Mortgage Trust,
Ser 2011-LC1A, Cl A1 (A)
3.742%, 11/10/46 1,309,777 1,418,510
Master Asset Securitization Trust,
Ser 2003-10, Cl 2A1
4.500%, 11/25/13 21,137 21,338
Merrill Lynch Mortgage Investors
Trust, Ser 2005-A2, Cl A4 (D)
2.535%, 02/25/35 115,076 115,118
Morgan Stanley Capital I,
Ser 2003-T11, Cl A4
5.150%, 06/13/41 295,670 304,183
Morgan Stanley Dean Witter
Capital I, Ser 2001-TOP3, Cl A4
6.390%, 07/15/33 17,148 17,135
Nomura Asset Securities (D)
Ser 1998-D6, Cl A3
7.263%, 03/15/30 1,225,000 1,256,222
Residential Funding Mortgage
Securities I, Ser 2004-S3, Cl A1
4.750%, 03/25/19 527,299 541,090
Sequoia Mortgage Trust, (D)
Ser 2012-1, Cl 2A1
3.474%, 01/25/42 907,975 934,369
Ser 2012-2, Cl A2
3.500%, 03/25/42 1,940,946 2,034,996
Washington Mutual, Ser 2005-8,
Cl 1A 8
5.500%, 10/25/35 50,418 43,881
Wells Fargo Mortgage Backed
Securities Trust, Ser 2003-13, Cl A1
4.500%, 11/25/18 599,090 615,616
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 97
SCHEDULE OF INVESTMENTS
JULY 31, 2012
SHORT TERM BOND FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES - (CONTINUED)
--------------------------------------------------------------------------------
Ser 2003-M, Cl A1(D)
4.692%, 12/25/33 $ 311,166 $ 315,904
Ser 2004-2, Cl A1
5.000%, 01/25/19 341,625 349,391
------------
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $8,708,254) 8,882,366
------------
--------------------------------------------------------------------------------
ASSET-BACKED SECURITIES - 13.0%
--------------------------------------------------------------------------------
AEP Texas Central Transition Funding,
Ser 2012-1, Cl A1
0.880%, 12/01/18 2,500,000 2,516,163
Ally Master Owner Trust,
Ser 2011-4, Cl A2
1.540%, 09/15/16 300,000 303,663
Ser 2011-1, Cl A2
2.150%, 01/15/16 1,075,000 1,095,400
Avis Budget Rental Car Funding
AESOP, (A) Ser 2011-2A, Cl A
2.370%, 11/20/14 750,000 766,171
Ser 2011-1A, Cl A
1.850%, 11/20/14 1,500,000 1,511,254
BMW Vehicle Owner Trust,
Ser 2010-A, Cl A3
1.390%, 04/25/13 346,601 347,719
Centerpoint Energy Transition Bond,
Ser 2005-A, Cl A2
4.970%, 08/01/14 28,254 28,254
Ser 2008-A, Cl A1
4.192%, 02/01/20 1,229,506 1,323,245
Ford Credit Auto Owner Trust
Ser 2008-A, Cl A1
0.840%, 08/15/16 1,400,000 1,408,214
Hertz Vehicle Financing,
Ser 2011-1A, Cl A1 (A)
2.200%, 03/25/16 1,400,000 1,434,956
Honda Auto Receivables Owner Trust,
Ser 2012-1, Cl A3
0.770%, 01/15/16 2,000,000 2,010,444
PG&E Energy Recovery Funding,
Ser 2005-1, Cl A5
4.470%, 12/25/14 803,530 812,527
Public Service New Hampshire
Funding,
Ser 2001-1, Cl A3
6.480%, 05/01/15 410,095 417,931
SLM Student Loan Trust, (D)
Ser 2011-2, Cl A1
0.846%, 11/25/27 1,768,446 1,775,717
Ser 2011-A, Cl A1 (A)
1.249%, 10/15/24 1,868,805 1,872,107
--------------------------------------------------------------------------------
Description Par/Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
ASSET-BACKED SECURITIES - (CONTINUED)
--------------------------------------------------------------------------------
Volkswagen Auto Loan Enhanced
Trust, Ser 2011-1, Cl A3
1.220%, 06/22/15 $ 1,500,000 $ 1,511,055
World Omni Auto Receivables Trust,
Ser 2011-A, Cl A4
1.910%, 04/15/16 1,425,000 1,460,383
------------
TOTAL ASSET-BACKED SECURITIES
(Cost $20,455,668) 20,595,203
------------
--------------------------------------------------------------------------------
U.S. TREASURY OBLIGATION - 0.3%
--------------------------------------------------------------------------------
U.S. Treasury Note
0.875%, 01/31/17 550,000 558,422
------------
TOTAL U.S. TREASURY OBLIGATION
(Cost $553,029) 558,422
------------
--------------------------------------------------------------------------------
TAXABLE MUNICIPAL BONDS - 2.2%
--------------------------------------------------------------------------------
CALIFORNIA - 2.2%
California State, GO (D)
5.650%, 04/01/39 1,850,000 1,913,806
University of California Revenue, Build
America Bonds, Taxable, RB (D)
1.988%, 05/15/50 1,500,000 1,516,665
------------
TOTAL TAXABLE MUNICIPAL BONDS
(Cost $3,443,518) 3,430,471
------------
--------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 4.1%
--------------------------------------------------------------------------------
Dreyfus Cash Management 6,470,933 6,470,933
------------
TOTAL REGISTERED INVESTMENT
COMPANY
(Cost $6,470,933) 6,470,933
------------
TOTAL INVESTMENTS - 100.2%
(Cost $157,059,407) 159,237,058
------------
OTHER ASSETS & LIABILITIES, NET - (0.2)% (330,916)
------------
NET ASSETS - 100.0% $158,906,142
============
--------------------------------------------------------------------------------
(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, 2012 WAS $10,062,214 AND REPRESENTED 6.3% 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, 2012, THE VALUE OF THESE SECURITIES AMOUNTED TO
$121,250, WHICH REPRESENTS 0.1% OF NET ASSETS.
(D) FLOATING RATE SECURITY. RATE DISCLOSED IS AS OF JULY 31, 2012.
The accompanying notes are an integral part of the financial statements.
98 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2012
SHORT TERM BOND FUND (CONCLUDED)
--------------------------------------------------------------------------------
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, 2012
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
07/31/12 PRICE INPUTS INPUTS
------------ ------------ ------------ ------------
Corporate Obligations $ 88,284,631 $ -- $ 88,284,631 $ --
U.S. Government Agency Mortgage-Backed Obligations 31,015,032 -- 31,015,032 --
Mortgage-Backed Securities 8,882,366 -- 8,882,366 --
Asset-Backed Securities 20,595,203 -- 20,595,203 --
U.S. Treasury Obligation 558,422 -- 558,422 --
Taxable Municipal Bonds 3,430,471 -- 3,430,471 --
Registered Investment Company 6,470,933 6,470,933 -- --
------------ ------------ ------------ ------------
Total: $159,237,058 $ 6,470,933 $152,766,125 $ --
============ ============ ============ ============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 99
SCHEDULE OF INVESTMENTS
JULY 31, 2012
WISCONSIN TAX-EXEMPT FUND
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - 95.0%
--------------------------------------------------------------------------------
GUAM - 0.5%
Guam Government Business Privilege,
Ser A, RB
5.000%, 01/01/19 $ 750,000 $ 874,912
------------
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 1,253,297
------------
PUERTO RICO - 25.0%
Commonwealth of Puerto Rico,
Public Improvement, GO,
AGM Insured, Unrefunded
Balance
5.125%, 07/01/30 (A) 750,000 750,780
GO, National-RE Insured
5.650%, 07/01/15 2,240,000 2,388,982
Ser A, GO
5.500%, 07/01/13 2,000,000 2,085,140
Ser A, GO, National-RE Insured
5.500%, 07/01/20 1,020,000 1,156,864
Ser A, GO, XLCA Insured
5.500%, 07/01/17 1,130,000 1,271,261
Puerto Rico Commonwealth Highway
& Transportation Authority,
Grant Anticipation Revenue,
RB,
National-RE Insured
5.000%, 09/15/20 (A) 780,000 810,186
Transportation Revenue,
Ser AA-1, RB, AGM Insured,
Unrefunded Balance
4.950%, 07/01/26 (A) 880,000 961,761
Transportation Revenue,
Ser E, RB, AGM Insured
5.500%, 07/01/23 1,120,000 1,334,010
Transportation Revenue, Ser
N, RB
5.500%, 07/01/23 1,120,000 1,277,976
Puerto Rico Commonwealth
Infrastructure Financing
Authority,
Special Tax Revenue, Ser A,
BHAC Credit, FGIC Insured
5.500%, 07/01/22 1,385,000 1,654,978
FGIC Insured
5.500%, 07/01/21 945,000 1,073,860
Puerto Rico Electric Power
Authority,
Ser TT, RB
5.000%, 07/01/22 (A) 300,000 324,069
5.000%, 07/01/37 (A) 1,700,000 1,737,009
Ser UU, RB, AGM Insured
5.000%, 07/01/20 (A) 1,000,000 1,122,220
Ser WW, RB
5.500%, 07/01/38 (A) 2,500,000 2,653,675
Ser XX, RB
4.625%, 07/01/25 (A) 2,100,000 2,211,489
--------------------------------------------------------------------------------
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 $ 911,891
Ser C, GO, CIFG Insured
5.250%, 08/01/23 1,000,000 1,139,940
Puerto Rico Public Buildings
Authority,
Revenue Refunding,
Government Facilities, Ser H, RB,
AMBAC, Commonwealth Guaranteed
5.500%, 07/01/17 1,250,000 1,403,213
Government Facilities, Ser U, RB
5.000%, 07/01/20 2,000,000 2,164,020
Ser L, RB, XLCA, Commonwealth
Guaranteed
5.500%, 07/01/21 500,000 556,135
Puerto Rico Sales Tax Financing,
Corporate Sales Tax Revenue,
First
Sub-Ser A, RB
5.500%, 08/01/37 (A) 2,500,000 2,715,475
5.750%, 08/01/37 (A) 1,400,000 1,563,562
6.375%, 08/01/39 (A) 3,000,000 3,553,470
6.000%, 08/01/42 (A) 1,000,000 1,134,010
6.500%, 08/01/44 (A) 2,000,000 2,354,460
Puerto Rico Sales Tax Financing,
Corporate Sales Tax Revenue,
Ser C
5.000%, 08/01/22 (A) 1,000,000 1,202,940
------------
41,513,376
------------
VIRGIN ISLANDS - 4.8%
Virgin Islands Public Finance
Authority,
Gross Receipts Taxes Loan Notes, RB,
National-RE FGIC Insured
5.000%, 10/01/21 (A) 2,000,000 2,164,260
5.000%, 10/01/23 (A) 1,000,000 1,076,030
5.000%, 10/01/24 (A) 2,500,000 2,684,000
5.000%, 10/01/27 (A) 2,000,000 2,118,320
------------
8,042,610
------------
WISCONSIN - 63.9%
Beloit, Community Development
Authority, Lease Revenue, RB
4.700%, 03/01/21 (A) 345,000 384,471
4.750%, 03/01/22 (A) 300,000 332,460
Ser A, RB
1.820%, 06/01/18 (A) 475,000 476,967
Burlington, Community Development
Authority, Lease Revenue, RB
4.000%, 04/01/16 (A) 200,000 211,540
4.100%, 04/01/17 (A) 750,000 789,405
City of Appleton, Fox Cities
Performing Arts, RB
2.200%, 09/01/18 355,000 356,608
2.400%, 09/01/19 290,000 291,125
2.600%, 09/01/20 355,000 357,059
The accompanying notes are an integral part of the financial statements.
100 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2012
WISCONSIN TAX-EXEMPT FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
WISCONSIN - (CONTINUED)
Cudahy Community Development
Authority, Lease Revenue,
Ser A, RB
1.950%, 06/01/19 $ 145,000 $ 146,390
2.200%, 06/01/20 250,000 253,240
2.400%, 06/01/21 (A) 360,000 365,926
2.600%, 06/01/22 (A) 245,000 249,528
Cudahy, Community Development
Authority, Redevelopment Lease
Revenue, RB
3.650%, 06/01/13 200,000 204,860
4.250%, 06/01/17 (A) 500,000 540,095
Delafield, Community Development
Authority, Redevelopment
Revenue, St. Johns
Northwestern
Military, RB, LOC Town
Bank/FHLB
4.150%, 06/01/25 (A) 250,000 281,927
4.250%, 06/01/26 (A) 330,000 371,771
4.600%, 06/01/30 (A) 600,000 680,232
Eau Claire, Housing Authority,
Housing Revenue, London Hill
Townhouses Project, Ser A, RB
6.250%, 05/01/15 225,000 225,176
Glendale, Community Development
Authority, Lease Revenue, RB
2.600%, 09/01/21 (A) (D) 3,250,000 3,280,745
2.750%, 09/01/22 (A) (D) 2,750,000 2,789,902
Bayshore Public Parking
Facility, Ser A
5.000%, 10/01/24 (A) 1,500,000 1,570,290
4.750%, 10/01/27 (A) 1,000,000 1,057,630
Tax Increment District No. 7
4.350%, 09/01/16 (A) 1,000,000 1,003,250
4.500%, 09/01/18 (A) 2,000,000 2,006,720
Tax Increment District No. 7,
Ser B
3.850%, 09/01/20 (A) 2,250,000 2,445,390
Green Bay, Redevelopment
Authority,
Bellin Memorial Hospital
Project, RB
6.000%, 12/01/29 (A) 1,000,000 1,143,800
6.150%, 12/01/32 (A) 1,000,000 1,151,640
Lease Revenue, Refunding,
Convention Center Project, RB
4.200%, 06/01/25 (A) 1,000,000 1,068,070
4.300%, 06/01/29 (A) 1,000,000 1,058,160
Madison, Community Development
Authority Revenue, Wisconsin
Alumni Research Fund Project,
RB
5.000%, 10/01/22 (A) 1,065,000 1,300,195
5.000%, 10/01/27 (A) 925,000 1,100,426
5.000%, 10/01/28 (A) 250,000 296,320
5.000%, 10/01/34 (A) 4,500,000 5,185,485
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
WISCONSIN - (CONTINUED)
Middleton, Community Development
Authority, Lease Revenue, Ser
A, RB,
Prerefunded 12/01/12 @ 100 (B)
4.350%, 10/01/12 $ 1,630,000 $ 1,640,970
4.550%, 10/01/12 500,000 503,525
Milwaukee Redevelopment
Authority,
Milwaukee School of Engineers,
RB, AGM Insured
2.750%, 04/01/21 1,080,000 1,097,518
3.000%, 04/01/22 375,000 381,300
3.200%, 04/01/23 (A) 1,000,000 1,019,170
3.750%, 04/01/28 (A) 950,000 981,113
4.100%, 04/01/32 (A) 2,500,000 2,574,350
Milwaukee, Redevelopment
Authority, Summerfest
Project, RB
4.500%, 08/01/23 (A) 110,000 123,362
4.700%, 08/01/25 (A) 110,000 123,713
5.000%, 08/01/30 (A) 2,000,000 2,269,580
Milwaukee, Redevelopment
Authority, Development
Revenue, Refunding, Marquette
University
Project, RB, XLCA Insured
4.150%, 11/01/16 (A) 1,275,000 1,281,158
4.250%, 11/01/17 (A) 1,000,000 1,004,680
4.350%, 11/01/18 (A) 500,000 502,175
Milwaukee, Redevelopment
Authority, Lease Revenue,
Milwaukee Public Schools,
Congress School, Ser A, RB
4.500%, 08/01/20 (A) 500,000 513,345
4.600%, 08/01/22 (A) 500,000 535,795
RB, AMBAC Insured
3.650%, 08/01/13 2,000,000 2,054,940
3.800%, 08/01/14 (A) 1,000,000 1,023,920
4.000%, 08/01/16 (A) 1,000,000 1,023,680
4.100%, 08/01/17 (A) 1,000,000 1,022,970
4.125%, 08/01/18 (A) 2,010,000 2,051,446
Monroe, Redevelopment Authority,
Development Revenue,
Monroe Clinic Inc. RB
5.875%, 02/15/39 (A) 2,850,000 3,198,014
Neenah, Community Development
Authority, Lease Revenue, Ser
A, RB
4.300%, 12/01/20 (A) 1,000,000 1,042,270
5.125%, 12/01/23 (A) 1,000,000 1,060,600
4.625%, 12/01/28 (A) 600,000 665,646
4.700%, 12/01/28 (A) 1,250,000 1,302,250
4.750%, 12/01/32 (A) 400,000 441,268
Onalaska, Community Development
Authority, Lease Revenue, RB
3.650%, 10/01/12 100,000 100,560
3.900%, 10/01/14 (A) 100,000 104,241
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 101
SCHEDULE OF INVESTMENTS
JULY 31, 2012
WISCONSIN TAX-EXEMPT FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
WISCONSIN - (CONTINUED)
4.000%, 10/01/15 (A) $ 100,000 $ 104,357
4.150%, 10/01/16 (A) 200,000 209,062
Osceola Redevelopment Authority,
Lease Revenue, Refunding, Ser
A, RB
1.000%, 12/01/12 200,000 200,208
1.350%, 12/01/13 175,000 175,852
1.650%, 12/01/14 200,000 201,324
1.900%, 12/01/15 175,000 177,548
Oshkosh, Housing Authority, VNA
Apartments Inc. Project, RB,
GNMA
Collateralized
5.450%, 09/20/17 (A) 80,000 80,078
5.750%, 09/20/38 (A) 1,260,000 1,261,399
Southeast Wisconsin Professional
Baseball Park District,
League, Capital Appreciation,
COP, ETM, National-RE Insured
0.000%, 12/15/15 970,000 944,906
0.000%, 12/15/17 1,000,000 942,830
Sales Tax Revenue, Refunding,
Ser A, RB, EDTM,
National-RE Insured
5.500%, 12/15/18 250,000 315,525
5.500%, 12/15/19 2,200,000 2,822,138
5.500%, 12/15/21 1,500,000 1,970,340
Ser A, RB, National-RE Insured
5.500%, 12/15/26 4,510,000 5,517,263
Ser A, RB, National-RE
Insured,
Crossover Refunding
5.100%, 12/15/29 (A) 285,000 288,830
Sun Prairie, Community
Development
Authority, Lease Revenue, RB
4.400%, 08/01/20 (A) 150,000 154,579
4.500%, 08/01/21 (A) 150,000 154,515
Tax Incremental District No.
8, RB
4.300%, 08/01/21 (A) 975,000 1,017,588
4.350%, 08/01/22 (A) 975,000 1,014,985
Waukesha, Redevelopment
Authority,
Avalon Square Project, Ser A,
RB,
GNMA Collateralized
5.000%, 06/20/21 (A) 925,000 936,340
Waukesha, Redevelopment
Authority,
Weldall Manufacturing Inc.
Project, RB, LOC Harris N.A.
4.200%, 12/01/24 (A) 150,000 163,276
4.500%, 12/01/30 (A) 1,200,000 1,318,236
West Bend, Redevelopment
Authority,
Lease Revenue, RB
4.500%, 10/01/23 (A) 250,000 264,005
4.550%, 10/01/24 (A) 250,000 263,915
4.600%, 10/01/25 (A) 150,000 158,109
4.650%, 10/01/28 (A) 250,000 262,343
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
WISCONSIN - (CONTINUED)
Weston, Community Development
Authority, Lease Revenue, Ser
A, RB
4.100%, 10/01/16 (A) $ 500,000 $ 521,550
4.250%, 10/01/17 (A) 200,000 208,516
4.350%, 10/01/18 (A) 500,000 509,985
4.400%, 10/01/18 (A) 500,000 520,495
5.250%, 10/01/20 (A) 445,000 469,706
4.500%, 10/01/21 (A) 100,000 109,472
4.700%, 10/01/21 (A) 1,230,000 1,281,525
4.625%, 10/01/25 (A) 825,000 880,490
Guaranty Agreement:
Associated Trust Co.
4.450%, 10/01/19 (A) 500,000 509,745
Ser B, RB
4.750%, 10/01/22 (A) 130,000 135,082
4.750%, 10/01/23 (A) 140,000 145,085
Wisconsin Center District,
Capital Appreciation,
Senior Dedicated Tax Revenue,
Ser A, RB, National-RE Insured
0.000%, 12/15/26 2,500,000 1,459,800
Ser 1998A, Junior Dedicated
Tax
Revenue, RB, AGM Insured
5.250%, 12/15/23 2,585,000 3,102,439
Wisconsin Dells, Community
Development Authority,
Lease Revenue, RB
5.000%, 03/01/22 (A) 1,500,000 1,594,215
4.600%, 03/01/25 (A) 1,200,000 1,235,520
Ser A
4.300%, 03/01/22 (A) 225,000 236,142
4.450%, 03/01/25 (A) 300,000 313,371
Wisconsin Housing & Economic
Development Authority,
Multi-Family Housing, Ser A,
RB
4.250%, 12/01/35 (A) (C) 1,500,000 1,585,650
GO of Authorization
5.375%, 11/01/30 (A) 2,135,000 2,300,697
Ser B, RB, GO of Authorization
4.300%, 05/01/27 (A) 1,000,000 1,020,400
4.400%, 05/01/37 (A) 500,000 504,955
Ser E, RB, GO of Authorization
4.700%, 11/01/25 (A) 275,000 284,499
4.900%, 11/01/35 (A) 1,650,000 1,681,251
Wisconsin Housing Finance
Authority, RB, FHA Mortgages Insured,
Prerefunded 12/01/17 @ 100 (B)
6.100%, 12/01/17 845,000 1,006,725
The accompanying notes are an integral part of the financial statements.
102 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2012
WISCONSIN TAX-EXEMPT FUND (CONCLUDED)
--------------------------------------------------------------------------------
Description Par/Shares Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
WISCONSIN - (CONTINUED)
RB, National-RE FHA Mortgages
Insured, Prerefunded
12/01/17 @ 100 (B)
6.100%, 12/01/17 $ 805,000 $ 959,069
------------
106,116,297
------------
TOTAL MUNICIPAL BONDS
(Cost $148,042,282) 157,800,492
------------
--------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 7.5%
--------------------------------------------------------------------------------
TFIT Tax-Free Cash Reserve Portfolio 12,388,440 12,388,440
------------
TOTAL REGISTERED INVESTMENT COMPANY
(Cost $12,388,440) 12,388,440
------------
TOTAL INVESTMENTS - 102.5%
(Cost $160,430,722) 170,188,932
------------
OTHER ASSETS & LIABILITIES, NET - (2.5)% (4,179,724)
------------
NET ASSETS - 100.0% $166,009,208
============
--------------------------------------------------------------------------------
(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, 2012.
(D) SECURITY PURCHASED ON A WHEN-ISSUED BASIS.
AGM - ASSURED GUARANTY MUNICIPAL CORPORATION
AMBAC - AMERICAN MUNICIPAL BOND ASSURANCE CORPORATION
BHAC - BERKSHIRE HATHAWAY ASSURANCE CORP.
COP - CERTIFICATES OF PARTICIPATION
EDTM - ECONOMIC DEFEASED TO MATURITY
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
LOC - LETTER OF CREDIT
RB - REVENUE BOND
SER - SERIES
XLCA - XL CAPITAL ASSURANCE
A summary of the inputs used to value the Fund's net assets as of July 31, 2012
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
07/31/12 PRICE INPUTS INPUTS
------------- ------------ ------------- ------------
Municipal Bonds $ 157,800,492 $ -- $ 157,800,492 $ --
Registered Investment Company 12,388,440 12,388,440 -- --
------------- ------------ ------------- ------------
Total: $ 170,188,932 $ 12,388,440 $ 157,800,492 $ --
============= ============ ============= ============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 103
STATEMENTS OF ASSETS AND LIABILITIES
JULY 31, 2012
COGNITIVE
BALANCED VALUE
FUND FUND
------------ -------------
ASSETS:
Investments, at Value + ....................................................... $ 22,488,785 $ 80,783,962
Repurchase Agreements, at Value + ............................................. 2,035,472 599,633
Cash .......................................................................... -- --
Receivable for Investments Sold ............................................... -- 2,465,799
Receivable for Fund Shares Sold ............................................... 104,570 3,772
Accrued Income ................................................................ 61,654 45,533
Prepaid Expenses .............................................................. 10,778 13,074
Deferred Compensation ......................................................... 1,989 7,020
Reclaims Receivable ........................................................... 1,088 --
Due from Affiliates ........................................................... 598 598
Unrealized Appreciation of Foreign Currency Contracts (1) ..................... -- --
------------ ------------
TOTAL ASSETS ............................................................... 24,704,934 83,919,391
------------ ------------
LIABILITIES:
Payable for Investments Purchased ............................................. -- 1,729,176
Payable for Fund Shares Redeemed .............................................. 170,113 5,000
Due to Custodian .............................................................. -- --
Investment Adviser Fees Payable ............................................... 1,561 51,353
Foreign Currency, Due to Custodian ............................................ -- --
Administration Fees Payable ................................................... 3,107 10,523
Custodian Fees Payable ........................................................ 130 438
Audit Fees Payable ............................................................ 29,779 28,072
Deferred Compensation Payable ................................................. 1,989 7,020
Shareholder Servicing Fees Payable ............................................ 2,945 315
Transfer Agent Fees Payable ................................................... 4,028 4,591
Printing Fees Payable ......................................................... 1,898 6,708
Trustees Fees Payable ......................................................... 155 547
Accrued Distribution Fees ..................................................... 2,489 479
Accrued Expenses and Other Payables ........................................... 9,694 9,364
Unrealized Depreciation on Foreign Currency Contracts (1) ..................... -- --
------------ ------------
TOTAL LIABILITIES .......................................................... 227,888 1,853,586
------------ ------------
NET ASSETS .............................................................. $ 24,477,046 $ 82,065,805
============ ============
NET ASSETS:
Paid-in Capital (unlimited authorized--no par value) .......................... $ 19,597,212 $ 81,218,600
Undistributed Net Investment Income/(Accumulated Net Investment Loss) ......... 28,750 101,855
Accumulated Net Realized Gain (Loss) on Investments, Futures Contracts
and Foreign Currency Transactions .......................................... 232,923 (4,115,993)
Net Unrealized Appreciation (Depreciation) on Investments, Forward Foreign
Currency Contracts, Futures Contracts and Foreign Currency Transactions .... 4,618,161 4,861,343
------------ ------------
NET ASSETS .............................................................. $ 24,477,046 $ 82,065,805
============ ============
+ Cost of Investments and Repurchase Agreements ............................... $ 19,906,096 $ 76,522,252
* Represents margin deposits for future contracts.
** Cost of foreign currency is $(351,131).
Amounts designated as "--" are either not applicable or less than $1.00.
(1) The primary risk exposure is foreign exchange rate fluctuation (See Note
2).
The accompanying notes are an integral part of the financial statements.
104 HIGHMARK(R) FUNDS
GENEVA GENEVA
ENHANCED EQUITY MID CAP SMALL CAP INTERNATIONAL
GROWTH INCOME GROWTH GROWTH OPPORTUNITIES
FUND FUND FUND FUND FUND
------------- ------------- ------------- ------------- -------------
ASSETS:
Investments, at Value + ........................... $ 79,775,787 $ 22,206,635 $ 849,754,973 $ 38,887,987 $ 182,322,881
Repurchase Agreements, at Value + ................. 1,259,481 -- -- -- 7,562,985
Cash .............................................. -- -- -- -- 1,500,000*
Receivable for Investments Sold ................... -- -- -- 833,444 --
Receivable for Fund Shares Sold ................... 2,773 41,594 3,055,797 326,757 69,649
Accrued Income .................................... 19,396 35,338 105,530 8,856 213,803
Prepaid Expenses .................................. 13,140 13,843 35,555 14,998 16,376
Deferred Compensation ............................. 7,156 1,121 22,727 1,190 18,667
Reclaims Receivable ............................... 1,601 -- -- -- 71,304
Due from Affiliates ............................... 598 1,460 598 598 598
Unrealized Appreciation of Foreign Currency
Contracts (1) .................................. -- -- -- -- 20,167
------------- ------------- ------------- ------------- -------------
TOTAL ASSETS ................................... 81,079,932 22,299,991 852,975,180 40,073,830 191,796,430
------------- ------------- ------------- ------------- -------------
LIABILITIES:
Payable for Investments Purchased ................. -- -- 2,435,765 891,011 --
Payable for Fund Shares Redeemed .................. 12,020 -- 457,242 8,908 100,170
Due to Custodian .................................. -- -- -- -- 18,960
Investment Adviser Fees Payable ................... 48,246 -- 492,862 23,749 123,333
Foreign Currency, Due to Custodian ................ -- -- -- -- 361,720**
Administration Fees Payable ....................... 10,130 2,793 108,155 4,872 24,084
Custodian Fees Payable ............................ 422 116 4,506 203 15,979
Audit Fees Payable ................................ 28,064 27,745 31,049 27,798 45,336
Deferred Compensation Payable ..................... 7,156 1,121 22,727 1,190 18,667
Shareholder Servicing Fees Payable ................ 300 2,469 99,427 3,995 4,528
Transfer Agent Fees Payable ....................... 4,387 5,979 99,440 3,763 8,019
Printing Fees Payable ............................. 6,537 1,650 45,503 2,336 16,163
Trustees Fees Payable ............................. 533 134 3,681 190 1,319
Accrued Distribution Fees ......................... 393 5,527 132,824 5,336 1,702
Accrued Expenses and Other Payables ............... 7,946 5,823 15,587 5,907 28,344
Unrealized Depreciation on Foreign
Currency Contracts (1) ......................... -- -- -- -- 211,578
------------- ------------- ------------- ------------- -------------
TOTAL LIABILITIES .............................. 126,134 53,357 3,948,768 979,258 979,902
------------- ------------- ------------- ------------- -------------
NET ASSETS .................................. $ 80,953,798 $ 22,246,634 $ 849,026,412 $ 39,094,572 $ 190,816,528
============= ============= ============= ============= =============
NET ASSETS:
Paid-in Capital (unlimited authorized--no
par value) $ 63,636,189 $ 26,814,092 $ 727,337,069 $ 34,340,891 $ 231,796,244
Undistributed Net Investment ...................... (148,181) 61,066 (4,906,760) (345,825) 3,702,393
Income/(Accumulated Net Investment Loss)
Accumulated Net Realized Gain (Loss) on
Investments, Futures Contracts and
Foreign Currency Transactions .................. (11,756,498) (8,590,563) 6,114,332 1,117,294 (55,482,073)
Net Unrealized Appreciation (Depreciation) on
Investments, Forward Foreign Currency Contracts,
Futures Contracts and Foreign Currency
Transactions ................................... 29,222,288 3,962,039 120,481,771 3,982,212 10,799,964
------------- ------------- ------------- ------------- -------------
NET ASSETS .................................. $ 80,953,798 $ 22,246,634 $ 849,026,412 $ 39,094,572 $ 190,816,528
============= ============= ============= ============= =============
+ Cost of Investments and Repurchase Agreements ... $ 51,812,980 $ 18,244,596 $ 729,273,202 $ 34,905,775 $ 179,024,200
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 105
STATEMENTS OF ASSETS AND LIABILITIES
JULY 31, 2012
COGNITIVE
BALANCED VALUE
FUND FUND
-------------- -------------
FIDUCIARY SHARES:
Net Assets .......................................................... $ 16,517,048 $ 5,050,836
Shares of beneficial interest outstanding ........................... 1,090,171 440,673
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE (A) ........... $ 15.15 $ 11.46
============== =============
CLASS A SHARES:
Net Assets .......................................................... $ 6,590,640 $ 615,772
Shares of beneficial interest outstanding ........................... 436,013 53,629
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE (A) ..................... $ 15.12 $ 11.48
-------------- -------------
Maximum Offering Price Per Share (B) ............................. $ 16.00 $ 12.15
============== =============
CLASS B SHARES:
Net Assets .......................................................... $ 39,280 N/A
Shares of beneficial interest outstanding ........................... 2,605 N/A
NET ASSET VALUE AND OFFERING PRICE PER SHARE (A) ....................... $ 15.08 N/A
============== =============
CLASS C SHARES:
Net Assets .......................................................... $ 1,330,078 $ 408,689
Shares of beneficial interest outstanding ........................... 88,547 36,603
NET ASSET VALUE AND OFFERING PRICE PER SHARE (A) ....................... $ 15.02 $ 11.17
============== =============
CLASS M SHARES:
Net Assets .......................................................... N/A $ 75,990,508
Shares of beneficial interest outstanding ........................... N/A 6,627,732
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE (A) ........... N/A $ 11.47
============== =============
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.
106 HIGHMARK(R) FUNDS
GENEVA GENEVA
ENHANCED EQUITY MID CAP SMALL CAP INTERNATIONAL
GROWTH INCOME GROWTH GROWTH OPPORTUNITIES
FUND FUND FUND FUND FUND
------------ ------------ ------------- ------------ -------------
FIDUCIARY SHARES:
Net Assets ............................................. $ 2,767,525 $ 6,777,074 $ 431,911,298 $ 25,370,929 $ 62,889,462
Shares of beneficial interest outstanding .............. 233,870 667,434 18,410,700 802,214 10,050,652
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER
SHARE (A) .............................................. $ 11.83 $ 10.15 $ 23.46 $ 31.63 $ 6.26
============ ============ ============= ============ ============
CLASS A SHARES:
Net Assets ............................................. $ 1,397,618 $ 11,518,605 $ 346,311,494 $ 9,925,067 $ 3,306,852
Shares of beneficial interest outstanding .............. 120,920 1,137,797 14,891,826 316,472 527,769
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE (A) ........ $ 11.56 $ 10.12 $ 23.26 $ 31.36 $ 6.27
------------ ------------ ------------- ------------ ------------
Maximum Offering Price Per Share (B) ................ $ 12.23 $ 10.71 $ 24.61 $ 33.19 $ 6.63
============ ============ ============= ============ ============
CLASS B SHARES:
Net Assets ............................................. N/A $ 1,277,811 $ 3,559,157 N/A N/A
Shares of beneficial interest outstanding .............. N/A 125,821 169,237 N/A N/A
NET ASSET VALUE AND OFFERING PRICE PER SHARE (A) .......... N/A $ 10.16 $ 21.03 N/A N/A
============ ============ ============= ============ ============
CLASS C SHARES:
Net Assets ............................................. $ 118,946 $ 2,673,144 $ 67,244,463 $ 3,798,576 $ 1,181,621
Shares of beneficial interest outstanding .............. 10,668 265,424 3,158,456 123,408 190,090
NET ASSET VALUE AND OFFERING PRICE PER SHARE (A) .......... $ 11.15 $ 10.07 $ 21.29 $ 30.78 $ 6.22
============ ============ ============= ============ ============
CLASS M SHARES:
Net Assets ............................................. $ 76,669,709 N/A N/A N/A $123,438,593
Shares of beneficial interest outstanding .............. 6,471,474 N/A N/A N/A 19,712,681
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER
SHARE (A) .............................................. $ 11.85 N/A N/A N/A $ 6.26
============ ============ ============= ============ ============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 107
STATEMENTS OF ASSETS AND LIABILITIES
JULY 31, 2012
LARGE CAP LARGE CAP
CORE EQUITY GROWTH
FUND FUND
------------ ------------
ASSETS:
Investments, at Value + ....................................................................... $ 62,870,055 $ 73,162,427
Repurchase Agreements, at Value + ............................................................. 494,991 --
Affiliated Investments, at Value ++ ........................................................... -- --
Cash .......................................................................................... 24,500* --
Foreign Currency .............................................................................. -- --
Receivable for Investments Sold ............................................................... -- --
Receivable for Fund Shares Sold ............................................................... 18,500 41,259
Accrued Income ................................................................................ 45,770 13,517
Prepaid Expenses .............................................................................. 18,575 12,265
Deferred Compensation ......................................................................... 4,875 7,035
Reclaims Receivable ........................................................................... 163 10,365
Due from Affiliates ........................................................................... 1,108 598
------------ ------------
TOTAL ASSETS ............................................................................... 63,478,537 73,247,466
------------ ------------
LIABILITIES:
Payable for Investments Purchased ............................................................. -- --
Payable for Fund Shares Redeemed .............................................................. 31,400 47,652
Investment Adviser Fees Payable ............................................................... 22,322 31,084
Administration Fees Payable ................................................................... 8,098 9,349
Custodian Fees Payable ........................................................................ 337 390
Audit Fees Payable ............................................................................ 31,326 28,019
Deferred Compensation Payable ................................................................. 4,875 7,035
Shareholder Servicing Fees Payable ............................................................ 5,631 8,505
Transfer Agent Fees Payable ................................................................... 7,552 10,786
Printing Fees Payable ......................................................................... 5,789 5,871
Trustees Fees Payable ......................................................................... 509 479
Accrued Distribution Fees ..................................................................... 1,366 6,317
Variation Margin Payable ...................................................................... 2,065 --
Accrued Expenses and Other Payables ........................................................... 12,790 6,872
------------ ------------
TOTAL LIABILITIES .......................................................................... 134,060 162,359
------------ ------------
NET ASSETS .............................................................................. $ 63,344,477 $ 73,085,107
============ ============
NET ASSETS:
Paid-in Capital (unlimited authorized--no par value) .......................................... $ 73,492,466 $ 63,455,240
Undistributed Net Investment Income/(Accumulated Net Investment Loss) ......................... -- 244,543
Accumulated Net Realized Gain (Loss) on Investments, Investments in Affiliated Funds,
Futures Contracts, Foreign Currency Transactions and Capital Gain Distributions Received ... (17,384,750) (10,317,148)
Net Unrealized Appreciation (Depreciation) on Investments, Investments in Affiliated Funds,
Futures Contracts and Foreign Currency Transactions ........................................ 7,236,761 19,702,472
------------ ------------
NET ASSETS .............................................................................. $ 63,344,477 $ 73,085,107
============ ============
+ Cost of Investments and Repurchase Agreements .............................................. $ 56,137,963 $ 53,459,955
++ Cost of Affiliated Investments ............................................................. $ -- $ --
* Represents margin deposits for future contracts.
** Cost of foreign currency is $155,356.
Amounts designated as "--" are either not applicable or less than $1.00.
The accompanying notes are an integral part of the financial statements.
108 HIGHMARK(R) FUNDS
TACTICAL TACTICAL
NYSE ARCA CAPITAL GROWTH &
TECH 100 SMALL CAP GROWTH INCOME
INDEX CORE VALUE ALLOCATION ALLOCATION
FUND FUND FUND FUND FUND
------------- ------------- ------------- ------------- -----------
ASSETS:
Investments, at Value + .......................... $ 193,180,234 $ 60,128,311 $ 332,258,590 $ 4,118,002 $ 5,600,390
Repurchase Agreements, at Value + ................ -- 1,003,549 -- 1,243,674 4,099,722
Affiliated Investments, at Value ++ .............. -- -- -- 40,698,187 51,044,462
Cash ............................................. -- 78,000* -- 9,000* 12,000*
Foreign Currency ................................. -- -- 151,823** -- --
Receivable for Investments Sold .................. -- -- 3,424,800 -- --
Receivable for Fund Shares Sold .................. 229,348 193 76,037 2,826 851
Accrued Income ................................... 91,008 40,133 231,709 8,260 16,535
Prepaid Expenses ................................. 22,538 10,199 15,488 11,899 16,737
Deferred Compensation ............................ 16,645 2,099 24,717 3,368 3,748
Reclaims Receivable .............................. 60,698 251 94,628 -- --
Due from Affiliates .............................. 598 1,108 465 10,398 9,023
------------- ------------- ------------- ------------- -----------
TOTAL ASSETS .................................. 193,601,069 61,263,843 336,278,257 46,105,614 60,803,468
------------- ------------- ------------- ------------- -----------
LIABILITIES:
Payable for Investments Purchased ................ -- -- 398,733 8,255 16,518
Payable for Fund Shares Redeemed ................. 314,070 48,732 176,549 7,871 126,540
Investment Adviser Fees Payable .................. 12,074 38,291 153,471 -- --
Administration Fees Payable ...................... 24,333 7,806 42,648 5,847 7,725
Custodian Fees Payable ........................... 1,014 325 1,777 244 322
Audit Fees Payable ............................... 28,689 31,280 32,359 23,214 23,310
Deferred Compensation Payable .................... 16,645 2,099 24,717 3,368 3,748
Shareholder Servicing Fees Payable ............... 22,970 5,572 27,744 1,081 1,479
Transfer Agent Fees Payable ...................... 40,143 23,629 30,611 16,153 14,806
Printing Fees Payable ............................ 15,615 7,128 24,541 4,042 5,378
Trustees Fees Payable ............................ 1,272 722 1,917 351 472
Accrued Distribution Fees ........................ 47,760 5,597 21,801 22,601 29,133
Variation Margin Payable ......................... -- 5,330 -- 187 250
Accrued Expenses and Other Payables .............. 16,526 14,668 15,551 7,782 8,115
------------- ------------- ------------- ------------- -----------
TOTAL LIABILITIES ............................. 541,111 191,179 952,419 100,996 237,796
------------- ------------- ------------- ------------- -----------
NET ASSETS ................................. $ 193,059,958 $ 61,072,664 $ 335,325,838 $ 46,004,618 $60,565,672
============= ============= ============= ============= ===========
NET ASSETS:
Paid-in Capital (unlimited authorized--no
par value) .................................... $ 228,504,656 $ 91,031,891 $ 297,837,310 $ 55,862,053 $64,609,525
Undistributed Net Investment
Income/(Accumulated Net Investment Loss) ...... (217,447) 9,624 7,058 135,280 178,520
Accumulated Net Realized Gain (Loss) on
Investments, Investments in Affiliated
Funds, Futures Contracts, Foreign
Currency Transactions and Capital Gain
Distributions Received ........................ (85,806,188) (37,266,738) 1,427,336 (12,086,752) (6,740,056)
Net Unrealized Appreciation (Depreciation)
on Investments, Investments in Affiliated
Funds, Futures Contracts and Foreign
Currency Transactions ......................... 50,578,937 7,297,887 36,054,134 2,094,037 2,517,683
------------- ------------- ------------- ------------- -----------
NET ASSETS ................................. $ 193,059,958 $ 61,072,664 $ 335,325,838 $ 46,004,618 $60,565,672
============= ============= ============= ============= ===========
+ Cost of Investments and Repurchase Agreements .. $ 142,601,297 $ 53,810,656 $ 296,195,272 $ 5,423,444 $ 9,673,073
++ Cost of Affiliated Investments ................ $ -- $ -- $ -- $ 38,533,278 $48,541,679
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 109
STATEMENTS OF ASSETS AND LIABILITIES
JULY 31, 2012
LARGE CAP LARGE CAP
CORE EQUITY GROWTH
FUND FUND
----------- -----------
FIDUCIARY SHARES:
Net Assets .................................................... $59,041,609 $53,069,738
Shares of beneficial interest outstanding ..................... 6,423,798 4,634,999
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE (A)...... $ 9.19 $ 11.45
=========== ===========
CLASS A SHARES:
Net Assets .................................................... $ 3,537,695 $16,721,772
Shares of beneficial interest outstanding ..................... 385,815 1,489,538
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE (A) ............... $ 9.17 $ 11.23
----------- -----------
Maximum Offering Price Per Share (B) ....................... $ 9.70 $ 11.88
=========== ===========
CLASS B SHARES:
Net Assets .................................................... N/A $ 664,258
Shares of beneficial interest outstanding ..................... N/A 63,589
NET ASSET VALUE AND OFFERING PRICE PER SHARE (A) ................. N/A $ 10.45
=========== ===========
CLASS C SHARES:
Net Assets .................................................... $ 765,173 $ 2,629,339
Shares of beneficial interest outstanding ..................... 85,790 254,134
NET ASSET VALUE AND OFFERING PRICE PER SHARE (A) ................. $ 8.92 $ 10.35
=========== ===========
CLASS U SHARES:
Net Assets .................................................... N/A N/A
Shares of beneficial interest outstanding ..................... N/A N/A
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE ......... N/A N/A
=========== ===========
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 class is 5.5%
The accompanying notes are an integral part of the financial statements.
110 HIGHMARK(R) FUNDS
TACTICAL TACTICAL
NYSE ARCA CAPITAL GROWTH &
TECH 100 SMALL CAP GROWTH INCOME
INDEX CORE VALUE ALLOCATION ALLOCATION
FUND FUND FUND FUND FUND
------------ ----------- ------------ ----------- -----------
FIDUCIARY SHARES:
Net Assets ............................................. $ 7,575,853 $46,390,420 $147,100,903 $ 774,931 $ 691,560
Shares of beneficial interest outstanding .............. 218,781 2,415,604 9,360,737 36,065 31,478
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER
SHARE (A) .............................................. $ 34.63 $ 19.20 $ 15.71 $ 21.49 $ 21.97
============ =========== ============ =========== ===========
CLASS A SHARES:
Net Assets ............................................. $170,515,922 $10,869,386 $ 83,338,902 $24,753,361 $34,053,141
Shares of beneficial interest outstanding .............. 4,965,481 572,125 5,317,670 1,153,682 1,555,626
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE (A) ........ $ 34.34 $ 19.00 $ 15.67 $ 21.46 $ 21.89
------------ ----------- ------------ ----------- -----------
Maximum Offering Price Per Share (B) ................ $ 36.34 $ 20.11 $ 16.58 $ 22.71 $ 23.16
============ =========== ============ =========== ===========
CLASS B SHARES:
Net Assets ............................................. $ 3,857,076 N/A $ 1,164,023 N/A N/A
Shares of beneficial interest outstanding .............. 124,753 N/A 75,982 N/A N/A
NET ASSET VALUE AND OFFERING PRICE PER SHARE (A) .......... $ 30.92 N/A $ 15.32 N/A N/A
============ =========== ============ =========== ===========
CLASS C SHARES:
Net Assets ............................................. $ 11,111,107 $ 3,812,858 $ 3,792,235 $20,476,326 $25,820,971
Shares of beneficial interest outstanding .............. 352,892 206,693 248,732 965,034 1,186,852
NET ASSET VALUE AND OFFERING PRICE PER SHARE (A) .......... $ 31.49 $ 18.45 $ 15.25 $ 21.22 $ 21.76
============ =========== ============ =========== ===========
CLASS U SHARES:
Net Assets ............................................. N/A N/A $ 99,929,775 N/A N/A
Shares of beneficial interest outstanding .............. N/A N/A 6,357,711 N/A N/A
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE .. N/A N/A $ 15.72 N/A N/A
============ =========== ============ =========== ===========
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 111
STATEMENTS OF ASSETS AND LIABILITIES
JULY 31, 2012
CALIFORNIA
INTERMEDIATE
BOND TAX-FREE BOND
FUND FUND
------------ -------------
ASSETS:
Investments, at Value + .................................................................... $382,766,990 $ 257,220,963
Receivable for Investments Sold ............................................................ 113,533 --
Receivable for Fund Shares Sold ............................................................ 1,752,633 2,777,701
Accrued Income ............................................................................. 2,752,298 3,378,680
Prepaid Expenses ........................................................................... 16,076 5,901
Deferred Compensation ...................................................................... 27,672 16,760
Due from Affiliates ........................................................................ 598 598
------------ -------------
TOTAL ASSETS ............................................................................ 387,429,800 263,400,603
------------ -------------
LIABILITIES:
Payable for Investments Purchased .......................................................... 818,593 1,797,003
Payable for Fund Shares Redeemed ........................................................... 272,065 138,616
Investment Adviser Fees Payable ............................................................ 129,451 46,962
Administration Fees Payable ................................................................ 48,801 32,853
Custodian Fees Payable ..................................................................... 2,033 1,369
Audit Fees Payable ......................................................................... 32,287 31,060
Deferred Compensation Payable .............................................................. 27,672 16,760
Shareholder Servicing Fees Payable ......................................................... 21,316 9,465
Transfer Agent Fees Payable ................................................................ 15,349 10,548
Printing Fees Payable ...................................................................... 30,390 19,379
Trustees Fees Payable ...................................................................... 2,483 1,580
Accrued Distribution Fees .................................................................. 19,113 41,314
Accrued Expenses and Other Payables ........................................................ 19,901 22,028
------------ -------------
TOTAL LIABILITIES ....................................................................... 1,439,454 2,168,937
------------ -------------
NET ASSETS ........................................................................... $385,990,346 $ 261,231,666
============ =============
NET ASSETS:
Paid-in Capital (unlimited authorized--no par value) ....................................... $354,520,084 $ 244,874,902
Undistributed Net Investment Income/(Accumulated Net Investment Loss) ...................... 230,500 42,639
Accumulated Net Realized Gain (Loss) on Investments and Capital Gains Distributions
Received ................................................................................ 3,563,304 (236,288)
Net Unrealized Appreciation (Depreciation) on Investments .................................. 27,676,458 16,550,413
------------ -------------
NET ASSETS ........................................................................... $385,990,346 $ 261,231,666
============ =============
+ Cost of Investments ..................................................................... $355,090,532 $ 240,670,550
Amounts designated as "--" are either not applicable or less than $1.00.
The accompanying notes are an integral part of the financial statements.
112 HIGHMARK(R) FUNDS
NATIONAL
INTERMEDIATE SHORT TERM WISCONSIN
TAX-FREE BOND BOND TAX-EXEMPT
FUND FUND FUND
------------- ------------ ------------
ASSETS:
Investments, at Value + ................................................. $ 99,824,348 $159,237,058 $170,188,932
Receivable for Investments Sold ......................................... -- 87,503 --
Receivable for Fund Shares Sold ......................................... 28,000 496,050 174,034
Accrued Income .......................................................... 1,187,653 1,082,542 1,846,784
Prepaid Expenses ........................................................ 5,609 6,994 6,301
Deferred Compensation ................................................... 8,410 10,352 11,389
Due from Affiliates ..................................................... 598 598 598
------------- ------------ ------------
TOTAL ASSETS ......................................................... 101,054,618 160,921,097 172,228,038
------------- ------------ ------------
LIABILITIES:
Payable for Investments Purchased ....................................... 28,259 1,754,870 5,986,903
Payable for Fund Shares Redeemed ........................................ 765,000 104,031 38,294
Investment Adviser Fees Payable ......................................... 12,522 32,668 40,820
Administration Fees Payable ............................................. 13,043 20,060 20,840
Custodian Fees Payable .................................................. 543 836 868
Audit Fees Payable ...................................................... 30,247 30,934 30,525
Deferred Compensation Payable ........................................... 8,410 10,352 11,389
Shareholder Servicing Fees Payable ...................................... 4,009 4,098 6,413
Transfer Agent Fees Payable ............................................. 4,826 8,879 13,029
Printing Fees Payable ................................................... 8,443 11,249 12,177
Trustees Fees Payable ................................................... 691 919 995
Accrued Distribution Fees ............................................... 9,380 22,165 42,233
Accrued Expenses and Other Payables ..................................... 10,973 13,894 14,344
------------- ------------ ------------
TOTAL LIABILITIES .................................................... 896,346 2,014,955 6,218,830
------------- ------------ ------------
NET ASSETS ........................................................ $ 100,158,272 $158,906,142 $166,009,208
============= ============ ============
NET ASSETS:
Paid-in Capital (unlimited authorized--no par value) .................... $ 92,241,224 $157,002,213 $156,616,071
Undistributed Net Investment Income/(Accumulated Net Investment Loss) ... 24,780 9,172 13,463
Accumulated Net Realized Gain (Loss) on Investments and Capital Gains
Distributions Received ............................................... 266,608 (282,894) (378,536)
Net Unrealized Appreciation (Depreciation) on Investments ............... 7,625,660 2,177,651 9,758,210
------------- ------------ ------------
NET ASSETS ........................................................ $ 100,158,272 $158,906,142 $166,009,208
============= ============ ============
+ Cost of Investments .................................................. $ 92,198,688 $157,059,407 $160,430,722
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 113
STATEMENTS OF ASSETS AND LIABILITIES
JULY 31, 2012
CALIFORNIA
INTERMEDIATE
BOND TAX-FREE BOND
FUND FUND
-------------- -------------
FIDUCIARY SHARES:
Net Assets ................................................. $ 325,475,420 $ 133,142,578
Shares of beneficial interest outstanding .................. 28,000,286 12,565,206
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE (A) .. $ 11.62 $ 10.60
============== =============
CLASS A SHARES:
Net Assets ................................................. $ 44,658,869 $ 92,569,680
Shares of beneficial interest outstanding .................. 3,909,162 8,781,236
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE (A) ............ $ 11.42 $ 10.54
-------------- -------------
Maximum Offering Price Per Share (B) .................... $ 11.68 $ 10.78
============== =============
CLASS B SHARES:
Net Assets ................................................. $ 217,537 N/A
Shares of beneficial interest outstanding .................. 19,117 N/A
NET ASSET VALUE AND OFFERING PRICE PER SHARE (A) .............. $ 11.38 N/A
============== =============
CLASS C SHARES:
Net Assets ................................................. $ 15,638,520 $ 35,519,408
Shares of beneficial interest outstanding .................. 1,376,306 3,381,305
NET ASSET VALUE AND OFFERING PRICE PER SHARE (A) .............. $ 11.36 $ 10.50
============== =============
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 class is 2.25%.
The accompanying notes are an integral part of the financial statements.
114 HIGHMARK(R) FUNDS
NATIONAL
INTERMEDIATE SHORT TERM WISCONSIN
TAX-FREE BOND BOND TAX-EXEMPT
FUND FUND FUND
------------- ------------- -------------
FIDUCIARY SHARES:
Net Assets ................................................. $ 73,230,424 $ 102,448,607 $ 705,422
Shares of beneficial interest outstanding .................. 6,214,538 10,118,104 64,818
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE (A) .. $ 11.78 $ 10.13 $ 10.88
============= ============= =============
CLASS A SHARES:
Net Assets ................................................. $ 18,949,616 $ 31,888,147 $ 146,648,612
Shares of beneficial interest outstanding .................. 1,608,971 3,153,904 13,472,620
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE (A) ............ $ 11.78 $ 10.11 $ 10.88
------------- ------------- -------------
Maximum Offering Price Per Share (B) .................... $ 12.05 $ 10.34 $ 11.13
============= ============= =============
CLASS B SHARES:
Net Assets ................................................. N/A N/A $ 1,059,703
Shares of beneficial interest outstanding .................. N/A N/A 97,442
NET ASSET VALUE AND OFFERING PRICE PER SHARE (A) .............. N/A N/A $ 10.88
============= ============= =============
CLASS C SHARES:
Net Assets ................................................. $ 7,978,232 $ 24,569,388 $ 17,595,471
Shares of beneficial interest outstanding .................. 676,760 2,400,439 1,618,817
NET ASSET VALUE AND OFFERING PRICE PER SHARE (A) .............. $ 11.79 $ 10.24 $ 10.87
============= ============= =============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 115
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JULY 31, 2012
COGNITIVE
BALANCED VALUE
FUND FUND
------------ ------------
Interest Income ..................................................................................... $ 291,017 $ 1,111
Securities Lending Income ........................................................................... -- --
Dividend Income ..................................................................................... 270,484 1,425,093
Less: Foreign Taxes Withheld ........................................................................ (3,058) (619)
------------ ------------
Total Investment Income ....................................................................... 558,443 1,425,585
------------ ------------
Expenses:
Investment Adviser Fees .......................................................................... 143,122 630,073
Shareholder Servicing Fees Fiduciary Shares ...................................................... 41,820 14,688
Shareholder Servicing Fees Class A Shares ........................................................ 15,218 1,692
Shareholder Servicing Fees Class B Shares ........................................................ 178 --
Administration Fees .............................................................................. 35,770 125,978
Custodian Fees ................................................................................... 1,491 5,250
Trustees Fees .................................................................................... 1,598 5,719
Chief Compliance Officer Fees .................................................................... 8,860 8,860
Distribution Fees Class A Shares ................................................................. 15,218 1,692
Distribution Fees Class B Shares ................................................................. 534 --
Distribution Fees Class C Shares ................................................................. 9,674 3,952
Registration Fees ................................................................................ 44,911 39,683
Transfer Agent Fees .............................................................................. 22,989 26,585
Printing Fees .................................................................................... 4,538 16,540
Audit Fees ....................................................................................... 29,818 28,183
Legal Fees ....................................................................................... 3,245 9,347
Miscellaneous Fees ............................................................................... 33,716 29,361
------------ ------------
Total Expenses ................................................................................ 412,700 947,603
------------ ------------
Less: Waivers and Reimbursements
Investment Adviser Fee Waiver ................................................................. (129,687) (26,676)
Shareholder Servicing Fee Waiver--Fiduciary Shares (Note 3) ................................... (16,728) (9,551)
Shareholder Servicing Fee Waiver--Class A Shares (Note 3) ..................................... (6,087) (677)
Reimbursement of Expenses by Adviser .......................................................... -- --
------------ ------------
Total Waivers and Reimbursements .................................................................... (152,502) (36,904)
------------ ------------
Total Net Expenses .................................................................................. 260,198 910,699
------------ ------------
Net Investment Income (Loss) ........................................................................ 298,245 514,886
------------ ------------
Net Realized Gain (Loss) on Investments ............................................................. 1,315,403 (1,113,785)
Net Realized Gain on Foreign Currency Transactions .................................................. -- --
Net Realized Gain (Loss) on Futures Contracts (1) ................................................... -- --
Change in Unrealized Appreciation (Depreciation) on Investments ..................................... 558,659 384,797
Change in Unrealized Appreciation (Depreciation) on Foreign Currency Transactions ................... -- --
Change in Unrealized Appreciation (Depreciation) on Foreign Currency Contracts (2) .................. -- --
Change in Unrealized Appreciation (Depreciation) on Futures Contracts (1) ........................... -- --
------------ ------------
Net Realized and Unrealized Gain (Loss) on Investments .............................................. 1,874,062 (728,988)
------------ ------------
Increase (Decrease) in Net Assets Resulting from Operations ......................................... $ 2,172,307 $ (214,102)
============ ============
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).
(2) The primary risk exposure is foreign exchange contracts (See Note 2).
The accompanying notes are an integral part of the financial statements.
116 HIGHMARK(R) FUNDS
GENEVA GENEVA
ENHANCED EQUITY MID CAP SMALL CAP INTERNATIONAL
GROWTH INCOME GROWTH GROWTH OPPORTUNITIES
FUND FUND FUND FUND FUND
------------ ------------ ------------ ------------ -------------
Interest Income ........................................... $ 1,152 $ -- $ -- $ -- $ 5,033
Securities Lending Income ................................. -- -- -- -- 136,516
Dividend Income ........................................... 732,374 784,952 3,060,412 108,468 7,526,815
Less: Foreign Taxes Withheld .............................. (12,751) (4,768) -- -- (540,629)
------------ ------------ ------------ ------------ ------------
Total Investment Income ............................. 720,775 780,184 3,060,412 108,468 7,127,735
------------ ------------ ------------ ------------ ------------
Expenses:
Investment Adviser Fees ................................ 613,366 114,390 4,348,774 300,561 1,650,816
Shareholder Servicing Fees Fiduciary Shares ............ 5,499 16,531 790,929 45,417 181,077
Shareholder Servicing Fees Class A Shares .............. 4,353 25,579 611,324 22,790 9,437
Shareholder Servicing Fees Class B Shares .............. -- 3,422 11,303 -- --
Administration Fees .................................... 122,637 31,190 918,723 45,074 302,270
Custodian Fees ......................................... 5,111 1,483 38,288 2,084 101,106
Trustees Fees .......................................... 5,518 1,371 36,294 1,881 14,006
Chief Compliance Officer Fees .......................... 8,860 8,860 8,860 8,860 8,860
Distribution Fees Class A Shares ....................... 4,353 25,579 611,324 22,790 9,437
Distribution Fees Class B Shares ....................... -- 10,264 33,909 -- --
Distribution Fees Class C Shares ....................... 1,883 25,857 471,866 27,732 14,597
Registration Fees ...................................... 39,935 46,523 66,210 37,255 40,720
Transfer Agent Fees .................................... 25,326 34,875 550,852 21,384 47,495
Printing Fees .......................................... 15,364 4,098 110,961 5,881 38,689
Audit Fees ............................................. 28,176 27,778 31,542 27,811 45,734
Legal Fees ............................................. 8,244 2,268 60,374 3,171 23,583
Miscellaneous Fees ..................................... 24,011 18,278 33,330 18,010 76,490
------------ ------------ ------------ ------------ ------------
Total Expenses ...................................... 912,636 398,346 8,734,863 590,701 2,564,317
------------ ------------ ------------ ------------ ------------
Less: Waivers and Reimbursements
Investment Adviser Fee Waiver ....................... (37,836) (114,390) (200,637) (105,288) --
Shareholder Servicing Fee Waiver--Fiduciary Shares
(Note 3) ......................................... (4,103) (7,965) (322,525) (22,004) (73,967)
Shareholder Servicing Fee Waiver--Class A Shares
(Note 3) ......................................... (1,741) (10,231) (244,529) (9,116) (6,716)
Reimbursement of Expenses by Adviser ................ -- (20,738) -- -- --
------------ ------------ ------------ ------------ ------------
Total Waivers and Reimbursements .......................... (43,680) (153,324) (767,691) (136,408) (80,683)
------------ ------------ ------------ ------------ ------------
Total Net Expenses ........................................ 868,956 245,022 7,967,172 454,293 2,483,634
------------ ------------ ------------ ------------ ------------
Net Investment Income (Loss) .............................. (148,181) 535,162 (4,906,760) (345,825) 4,644,101
------------ ------------ ------------ ------------ ------------
Net Realized Gain (Loss) on Investments ................... 3,178,170 656,773 6,960,943 1,194,740 (9,700,498)
Net Realized Gain on Foreign Currency Transactions ........ -- -- -- -- 380,923
Net Realized Gain (Loss) on Futures Contracts (1) ......... -- (10,258) -- -- (508,356)
Change in Unrealized Appreciation (Depreciation)
on Investments ......................................... 1,023,365 1,594,472 17,794,137 885,871 (29,119,295)
Change in Unrealized Appreciation (Depreciation) on
Foreign Currency Transactions .......................... -- -- -- -- (25,807)
Change in Unrealized Appreciation (Depreciation) on
Foreign Currency Contracts (2) ......................... -- -- -- -- (189,123)
Change in Unrealized Appreciation (Depreciation) on
Futures Contracts (1) .................................. -- 4,693 -- -- 140,478
------------ ------------ ------------ ------------ ------------
Net Realized and Unrealized Gain (Loss) on Investments .... 4,201,535 2,245,680 24,755,080 2,080,611 (39,021,678)
------------ ------------ ------------ ------------ ------------
Increase (Decrease) in Net Assets Resulting
from Operations ........................................ $ 4,053,354 $ 2,780,842 $ 19,848,320 $ 1,734,786 $(34,377,577)
============ ============ ============ ============ ============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 117
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JULY 31, 2012
LARGE CAP LARGE CAP
CORE EQUITY GROWTH
FUND FUND
------------ ------------
Interest Income ..................................................................................... $ 1,115 $ --
Income from Investments in Affiliated Funds ......................................................... -- --
Dividend Income ..................................................................................... 1,225,043 1,074,927
Less: Foreign Taxes Withheld ........................................................................ (372) (13,416)
------------ ------------
Total Investment Income ....................................................................... 1,225,786 1,061,511
------------ ------------
Expenses:
Investment Adviser Fees .......................................................................... 377,879 441,747
Shareholder Servicing Fees Fiduciary Shares ...................................................... 147,797 134,466
Shareholder Servicing Fees Class A Shares ........................................................ 7,723 39,861
Shareholder Servicing Fees Class B Shares ........................................................ 70 2,793
Administration Fees .............................................................................. 94,448 110,405
Custodian Fees ................................................................................... 4,134 4,601
Trustees Fees .................................................................................... 4,345 4,958
Chief Compliance Officer Fees .................................................................... 8,860 8,860
Distribution Fees Class A Shares ................................................................. 7,723 39,861
Distribution Fees Class B Shares ................................................................. 210 8,378
Distribution Fees Class C Shares ................................................................. 7,441 27,768
Registration Fees ................................................................................ 51,251 45,807
License Fees ..................................................................................... -- --
Transfer Agent Fees .............................................................................. 30,584 64,369
Printing Fees .................................................................................... 13,346 13,910
Audit Fees ....................................................................................... 28,131 28,179
Legal Fees ....................................................................................... 10,557 8,542
Miscellaneous Fees ............................................................................... 23,594 20,404
------------ ------------
Total Expenses ................................................................................ 818,093 1,004,909
------------ ------------
Less: Waivers and Reimbursements
Investment Adviser Fee Waiver ................................................................. (126,910) (111,298)
Shareholder Servicing Fee Waiver--Fiduciary Shares (Note 3) ................................... (85,416) (61,035)
Shareholder Servicing Fee Waiver--Class A Shares (Note 3) ..................................... (3,089) (15,944)
Reimbursement of Expenses by Adviser .......................................................... -- --
------------ ------------
Total Waivers and Reimbursements .................................................................... (215,415) (188,277)
------------ ------------
Total Net Expenses .................................................................................. 602,678 816,632
------------ ------------
Net Investment Income (Loss) ........................................................................ 623,108 244,879
------------ ------------
Net Realized Gain (Loss) on Investments ............................................................. 2,872,801 5,416,333
Net Realized Gain on Investments in Affiliated Funds ................................................ -- --
Net Realized Gain (Loss) on Foreign Currency Transactions ........................................... -- --
Net Realized Gain (Loss) on Futures Contracts (1) ................................................... (155,151) --
Capital Gain Distributions Received from Affiliated Funds ........................................... -- --
Change in Unrealized Appreciation (Depreciation) on Investments ..................................... 2,168,198* 1,945,137
Change in Unrealized Appreciation (Depreciation) on Investments in Affiliated Funds ................. -- --
Change in Unrealized Appreciation (Depreciation) on Foreign Currency Transactions ................... -- --
Change in Unrealized Appreciation (Depreciation) on Futures Contracts (1) ........................... 38,769 --
------------ ------------
Net Realized and Unrealized Gain on Investments ..................................................... 4,924,617 7,361,470
------------ ------------
Increase in Net Assets Resulting from Operations .................................................... $ 5,547,725 $ 7,606,349
============ ============
* Change in unrealized appreciation (depreciation) does not include
unrealized appreciation (depreciation) in connection with the
reorganization (See Note 8 in the notes to financial statements).
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.
118 HIGHMARK(R) FUNDS
TACTICAL TACTICAL
NYSE ARCA CAPITAL GROWTH &
TECH 100 SMALL CAP GROWTH INCOME
INDEX CORE VALUE ALLOCATION ALLOCATION
FUND FUND FUND FUND FUND
------------ ------------ ------------ ------------ ------------
Interest Income .......................................... $ -- $ 1,597 $ -- $ 512 $ 3,301
Income from Investments in Affiliated Funds .............. -- -- -- 499,333 783,740
Dividend Income .......................................... 1,996,414 737,462 7,743,491 163,677 268,177
Less: Foreign Taxes Withheld ............................. (29,511) (2,017) (175,460) -- --
------------ ------------ ------------ ------------ ------------
Total Investment Income ............................ 1,966,903 737,042 7,568,031 663,522 1,055,218
------------ ------------ ------------ ------------ ------------
Expenses:
Investment Adviser Fees ............................... 686,330 517,447 1,842,177 80,093 103,371
Shareholder Servicing Fees Fiduciary Shares ........... 20,578 106,591 435,657 1,528 2,483
Shareholder Servicing Fees Class A Shares ............. 427,719 21,920 179,211 63,869 84,743
Shareholder Servicing Fees Class B Shares ............. 12,822 -- 3,771 -- --
Administration Fees ................................... 293,083 81,691 460,421 68,635 88,584
Custodian Fees ........................................ 14,609 3,779 20,008 2,873 3,692
Trustees Fees ......................................... 13,163 3,862 20,645 3,201 4,074
Chief Compliance Officer Fees ......................... 8,860 8,860 8,860 8,860 8,860
Distribution Fees Class A Shares ...................... 427,719 21,920 179,211 63,869 84,743
Distribution Fees Class B Shares ...................... 38,468 -- 11,314 -- --
Distribution Fees Class C Shares ...................... 109,957 30,638 28,408 196,085 241,789
Registration Fees ..................................... 49,875 37,552 51,382 30,012 38,134
License Fees .......................................... 78,177 -- -- -- --
Transfer Agent Fees ................................... 241,461 60,633 150,527 73,663 64,267
Printing Fees ......................................... 37,699 13,915 79,153 9,832 12,581
Audit Fees ............................................ 29,009 28,099 29,911 19,975 20,063
Legal Fees ............................................ 21,741 11,428 29,984 5,669 6,812
Miscellaneous Fees .................................... 27,622 26,465 32,724 16,647 17,035
------------ ------------ ------------ ------------ ------------
Total Expenses ..................................... 2,538,892 974,800 3,563,364 644,811 781,231
------------ ------------ ------------ ------------ ------------
Less: Waivers and Reimbursements
Investment Adviser Fee Waiver ...................... (173,232) (129,221) (76,910) (80,093) (103,371)
Shareholder Servicing Fee Waiver--Fiduciary
Shares (Note 3) ................................. (10,223) (61,686) (185,188) (1,223) (1,986)
Shareholder Servicing Fee Waiver--Class A
Shares (Note 3) ................................. (171,087) (8,768) (71,684) (51,095) (67,794)
Reimbursement of Expenses by Adviser ............... -- -- -- (113,505) (101,664)
------------ ------------ ------------ ------------ ------------
Total Waivers and Reimbursements ......................... (354,542) (199,675) (333,782) (245,916) (274,815)
------------ ------------ ------------ ------------ ------------
Total Net Expenses ....................................... 2,184,350 775,125 3,229,582 398,895 506,416
------------ ------------ ------------ ------------ ------------
Net Investment Income (Loss) ............................. (217,447) (38,083) 4,338,449 264,627 548,802
------------ ------------ ------------ ------------ ------------
Net Realized Gain (Loss) on Investments .................. 37,247,593 (4,327,517) 20,880,528 346,344 397,991
Net Realized Gain on Investments in Affiliated Funds ..... -- -- -- 1,709,434 3,817,614
Net Realized Gain (Loss) on Foreign Currency
Transactions .......................................... -- -- (5,806) -- --
Net Realized Gain (Loss) on Futures Contracts (1) ........ (49,408) (113,051) -- 107,307 130,891
Capital Gain Distributions Received from
Affiliated Funds ...................................... -- -- -- 180,429 282,432
Change in Unrealized Appreciation (Depreciation)
on Investments ........................................ (24,433,860) 6,635,923* (17,232,540)* (151,283)* (952,209)*
Change in Unrealized Appreciation (Depreciation)
on Investments in Affiliated Funds .................... -- -- -- (1,862,392) (2,787,426)
Change in Unrealized Appreciation (Depreciation)
on Foreign Currency Transactions ...................... -- -- (12,702) -- --
Change in Unrealized Appreciation (Depreciation)
on Futures Contracts (1) .............................. 25,355 (22,933) -- (9,104) (12,139)
------------ ------------ ------------ ------------ ------------
Net Realized and Unrealized Gain on Investments .......... 12,789,680 2,172,422 3,629,480 320,735 877,154
------------ ------------ ------------ ------------ ------------
Increase in Net Assets Resulting from Operations ......... $ 12,572,233 $ 2,134,339 $ 7,967,929 $ 585,362 $ 1,425,956
============ ============ ============ ============ ============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 119
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JULY 31, 2012
CALIFORNIA
INTERMEDIATE
BOND TAX-FREE BOND
FUND FUND
------------ -------------
Interest Income .............................................................. $ 15,399,410 $ 7,543,440
Dividend Income .............................................................. 6,126 654
------------ -------------
Total Investment Income ................................................ 15,405,536 7,544,094
------------ -------------
Expenses:
Investment Adviser Fees ................................................... 1,906,764 1,221,661
Shareholder Servicing Fees Fiduciary Shares ............................... 831,244 329,014
Shareholder Servicing Fees Class A Shares ................................. 93,525 207,829
Shareholder Servicing Fees Class B Shares ................................. 615 59
Administration Fees ....................................................... 571,867 366,398
Custodian Fees ............................................................ 23,970 15,271
Trustees Fees ............................................................. 25,146 15,879
Chief Compliance Officer Fees ............................................. 8,860 8,860
Distribution Fees Class A Shares .......................................... 93,525 207,829
Distribution Fees Class B Shares .......................................... 1,846 177
Distribution Fees Class C Shares .......................................... 83,994 221,785
Registration Fees ......................................................... 48,551 35,357
Transfer Agent Fees ....................................................... 89,895 60,585
Printing Fees ............................................................. 72,435 45,850
Audit Fees ................................................................ 32,855 31,213
Legal Fees ................................................................ 38,846 24,208
Miscellaneous Fees ........................................................ 57,436 54,845
------------ -------------
Total Expenses ......................................................... 3,981,374 2,846,820
------------ -------------
Less: Waivers and Reimbursements
Investment Adviser Fee Waiver .......................................... (311,037) (682,900)
Shareholder Servicing Fee Waiver--Fiduciary Shares (Note 3) ............ (606,856) (263,211)
Shareholder Servicing Fee Waiver--Class A Shares (Note 3) .............. (67,338) (166,263)
------------ -------------
Total Waivers and Reimbursements ............................................. (985,231) (1,112,374)
------------ -------------
Total Net Expenses ........................................................... 2,996,143 1,734,446
------------ -------------
Net Investment Income ........................................................ 12,409,393 5,809,648
------------ -------------
Net Realized Gain (Loss) on Investments ...................................... 4,729,214 (120,541)
Capital Gain Distributions Received .......................................... -- 6,137
Change in Unrealized Appreciation (Depreciation) on Investments .............. 9,109,333 9,391,099
------------ -------------
Net Realized and Unrealized Gain on Investments .............................. 13,838,547 9,276,695
------------ -------------
Increase in Net Assets Resulting from Operations ............................. $ 26,247,940 $ 15,086,343
============ =============
Amounts designated as "--" are either not applicable or less than $1.00.
The accompanying notes are an integral part of the financial statements.
120 HIGHMARK(R) FUNDS
NATIONAL
INTERMEDIATE SHORT TERM WISCONSIN
TAX-FREE BOND BOND TAX-EXEMPT
FUND FUND FUND
------------- ----------- -----------
Interest Income .................................................... $ 3,405,569 $ 3,689,590 $ 6,244,103
Dividend Income .................................................... 152 3,326 4,594
------------- ----------- -----------
Total Investment Income ...................................... 3,405,721 3,692,916 6,248,697
------------- ----------- -----------
Expenses:
Investment Adviser Fees ......................................... 528,010 569,958 768,296
Shareholder Servicing Fees Fiduciary Shares ..................... 192,026 237,741 1,055
Shareholder Servicing Fees Class A Shares ....................... 56,145 63,532 345,873
Shareholder Servicing Fees Class B Shares ....................... -- -- 3,541
Administration Fees ............................................. 158,356 213,675 230,425
Custodian Fees .................................................. 6,600 8,906 9,604
Trustees Fees ................................................... 7,001 9,194 9,936
Chief Compliance Officer Fees ................................... 8,860 8,860 8,860
Distribution Fees Class A Shares ................................ 56,145 63,532 345,873
Distribution Fees Class B Shares ................................ -- -- 10,623
Distribution Fees Class C Shares ................................ 47,503 164,851 101,038
Registration Fees ............................................... 37,857 42,293 11,011
Transfer Agent Fees ............................................. 27,168 51,924 75,928
Printing Fees ................................................... 20,082 26,387 28,553
Audit Fees ...................................................... 30,378 30,984 30,774
Legal Fees ...................................................... 13,170 14,699 18,624
Miscellaneous Fees .............................................. 36,987 45,657 46,955
------------- ----------- -----------
Total Expenses ............................................... 1,226,288 1,552,193 2,046,969
------------- ----------- -----------
Less: Waivers and Reimbursements
Investment Adviser Fee Waiver ................................ (378,140) (194,093) (317,011)
Shareholder Servicing Fee Waiver--Fiduciary Shares (Note 3) .. (153,621) (208,931) (844)
Shareholder Servicing Fee Waiver--Class A Shares (Note 3) .... (44,916) (50,826) (276,698)
------------- ----------- -----------
Total Waivers and Reimbursements ................................... (576,677) (453,850) (594,553)
------------- ----------- -----------
Total Net Expenses ................................................. 649,611 1,098,343 1,452,416
------------- ----------- -----------
Net Investment Income .............................................. 2,756,110 2,594,573 4,796,281
------------- ----------- -----------
Net Realized Gain (Loss) on Investments ............................ 266,608 277,851 60,134
Capital Gain Distributions Received ................................ -- -- --
Change in Unrealized Appreciation (Depreciation) on Investments .... 2,979,698 465,255 7,262,822
------------- ----------- -----------
Net Realized and Unrealized Gain on Investments .................... 3,246,306 743,106 7,322,956
------------- ----------- -----------
Increase in Net Assets Resulting from Operations ................... $ 6,002,416 $ 3,337,679 $12,119,237
============= =========== ===========
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 121
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED JULY 31 (UNLESS OTHERWISE INDICATED)
BALANCED COGNITIVE VALUE ENHANCED GROWTH
FUND FUND FUND
------------------------- ------------------------- -------------------------
2012 2011 2012 2011 2012 2011
----------- ----------- ----------- ----------- ----------- -----------
Investment Activities:
Net Investment Income (Loss) ................ $ 298,245 $ 285,151 $ 514,886 $ 878,936 $ (148,181) $ (194,706)
Net Realized Gain (Loss) on Investments,
Foreign Currency Transactions and Futures
Contracts .. ............................. 1,315,403 1,629,414 (1,113,785) 20,628,659 3,178,170 2,495,354
Change in Unrealized Appreciation
(Depreciation) on Investments, Foreign
Currency Transactions, Foreign Currency
Contracts and Futures Contracts .......... 558,659 1,063,326 384,797 (2,268,107) 1,023,365 14,025,216
----------- ----------- ----------- ----------- ----------- -----------
Net Increase (Decrease) in Net Assets
Resulting From Operations ................ 2,172,307 2,977,891 (214,102) 19,239,488 4,053,354 16,325,864
----------- ----------- ----------- ----------- ----------- -----------
Dividends and Distributions to Shareholders:
Net Investment Income:
Fiduciary Shares ......................... (218,657) (299,157) (50,485) (37,861) -- --
Class A Shares ........................... (64,347) (84,654) (2,869) (9,261) -- --
Class B Shares ........................... (221) (3,030) -- -- -- --
Class C Shares ........................... (4,817) (6,439) -- (1,346) -- --
Class M Shares ........................... -- -- (763,086) (1,174,219) -- --
Capital Gains:
Fiduciary Shares ......................... -- -- -- -- -- --
Class A Shares ........................... -- -- -- -- -- --
Class B Shares ........................... -- -- -- -- -- --
Class C Shares ........................... -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Total Dividends and Distributions ..... (288,042) (393,280) (816,440) (1,222,687) -- --
----------- ----------- ----------- ----------- ----------- -----------
Net Increase (Decrease) in Net Assets From:
Share Transactions (1) ................... (3,000,113) (1,165,270) (11,429,783) 2,713,496 (13,506,993) 5,539,967
Redemption Fees (Note 2) ................. -- -- 610 11 -- --
----------- ----------- ----------- ----------- ----------- -----------
Total Increase (Decrease) in Net
Assets ............................. (1,115,848) 1,419,341 (12,459,715) 20,730,308 (9,453,639) 21,865,831
----------- ----------- ----------- ----------- ----------- -----------
Net Assets:
Beginning of Year ........................... 25,592,894 24,173,553 94,525,520 73,795,212 90,407,437 68,541,606
----------- ----------- ----------- ----------- ----------- -----------
End of Year ................................. $24,477,046 $25,592,894 $82,065,805 $94,525,520 $80,953,798 $90,407,437
=========== =========== =========== =========== =========== ===========
Undistributed Net Investment Income/(Accumulated
Net Investment Loss) ........................ $ 28,750 $ 12,964 $ 101,855 $ 260,195 $ (148,181) $ (60,079)
=========== =========== =========== =========== =========== ===========
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 128 - 137.
The accompanying notes are an integral part of the financial statements.
122 HIGHMARK(R) FUNDS
EQUITY INCOME GENEVA MID CAP GROWTH
FUND FUND
--------------------------- ---------------------------
2012 2011 2012 2011
------------ ------------ ------------ ------------
Investment Activities:
Net Investment Income (Loss) ............................... $ 535,162 $ 451,702 $ (4,906,760) $ (3,043,801)
Net Realized Gain (Loss) on Investments, Foreign Currency
Transactions and Futures Contracts ...................... 646,515 1,040,035 6,960,943 13,116,117
Change in Unrealized Appreciation (Depreciation) on
Investments, Foreign Currency Transactions, Foreign
Currency Contracts and Futures Contracts ................ 1,599,165 1,146,910 17,794,137 47,839,217
------------ ------------ ------------ ------------
Net Increase (Decrease) in Net Assets Resulting From
Operations .............................................. 2,780,842 2,638,647 19,848,320 57,911,533
------------ ------------ ------------ ------------
Dividends and Distributions to Shareholders:
Net Investment Income:
Fiduciary Shares ........................................ (188,573) (89,195) -- --
Class A Shares .......................................... (265,758) (299,908) -- --
Class B Shares .......................................... (26,247) (43,296) -- --
Class C Shares .......................................... (51,928) (57,629) -- --
Class M Shares .......................................... -- -- -- --
Capital Gains:
Fiduciary Shares ........................................ -- -- (5,139,133) (50,987)
Class A Shares .......................................... -- -- (4,256,868) (272,612)
Class B Shares .......................................... -- -- (107,568) (9,247)
Class C Shares .......................................... -- -- (790,213) (33,609)
------------ ------------ ------------ ------------
Total Dividends and Distributions .................... (532,506) (490,028) (10,293,782) (366,455)
------------ ------------ ------------ ------------
Net Increase (Decrease) in Net Assets From:
Share Transactions (1) .................................. 1,203,677 2,654,507 389,741,378 170,567,798
Redemption Fees (Note 2) ................................ -- -- -- --
------------ ------------ ------------ ------------
Total Increase (Decrease) in Net Assets .............. 3,452,013 4,803,126 399,295,916 228,112,876
------------ ------------ ------------ ------------
Net Assets:
Beginning of Year .......................................... 18,794,621 13,991,495 449,730,496 221,617,620
------------ ------------ ------------ ------------
End of Year ................................................ $ 22,246,634 $ 18,794,621 $849,026,412 $449,730,496
============ ============ ============ ============
Undistributed Net Investment Income/(Accumulated Net
Investment Loss) ........................................... $ 61,066 $ 1,714 $ (4,906,760) $ --
============ ============ ============ ============
GENEVA SMALL CAP GROWTH INTERNATIONAL OPPORTUNITIES
FUND FUND
--------------------------- ---------------------------
2012 2011 2012 2011
------------ ------------ ------------ ------------
Investment Activities:
Net Investment Income (Loss) ............................... $ (345,825) $ (199,858) $ 4,644,101 $ 4,362,210
Net Realized Gain (Loss) on Investments, Foreign Currency
Transactions and Futures Contracts ...................... 1,194,740 1,297,244 (9,827,931) 28,470,335
Change in Unrealized Appreciation (Depreciation) on
Investments, Foreign Currency Transactions, Foreign
Currency Contracts and Futures Contracts ................ 885,871 2,220,064 (29,193,747) 10,771,070
------------ ------------ ------------ ------------
Net Increase (Decrease) in Net Assets Resulting From
Operations .............................................. 1,734,786 3,317,450 (34,377,577) 43,603,615
------------ ------------ ------------ ------------
Dividends and Distributions to Shareholders:
Net Investment Income:
Fiduciary Shares ........................................ -- -- (2,207,341) (1,660,836)
Class A Shares .......................................... -- -- (99,266) (115,447)
Class B Shares .......................................... -- -- -- --
Class C Shares .......................................... -- -- (24,778) (27,269)
Class M Shares .......................................... -- -- (3,847,310) (3,099,328)
Capital Gains:
Fiduciary Shares ........................................ (567,521) (324,668) -- --
Class A Shares .......................................... (274,486) (158,545) -- --
Class B Shares .......................................... -- -- -- --
Class C Shares .......................................... (78,033) (13,819) -- --
------------ ------------ ------------ ------------
Total Dividends and Distributions .................... (920,040) (497,032) (6,178,695) (4,902,880)
------------ ------------ ------------ ------------
Net Increase (Decrease) in Net Assets From:
Share Transactions (1) .................................. 14,668,102 11,057,444 (19,972,580) (8,581,549)
Redemption Fees (Note 2) ................................ 677 875 585 135
------------ ------------ ------------ ------------
Total Increase (Decrease) in Net Assets .............. 15,483,525 13,878,737 (60,528,267) 30,119,321
------------ ------------ ------------ ------------
Net Assets:
Beginning of Year .......................................... 23,611,047 9,732,310 251,344,795 221,225,474
------------ ------------ ------------ ------------
End of Year ................................................ $ 39,094,572 $ 23,611,047 $190,816,528 $251,344,795
============ ============ ============ ============
Undistributed Net Investment Income/(Accumulated Net
Investment Loss) ........................................... $ (345,825) $ -- $ 3,702,393 $ 4,383,125
============ ============ ============ ============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 123
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED JULY 31 (UNLESS OTHERWISE INDICATED)
LARGE CAP CORE EQUITY LARGE CAP GROWTH NYSE ARCA TECH 100 INDEX
FUND FUND FUND
-------------------------- --------------------------- ---------------------------
2012 2011 2012 2011 2012 2011
----------- ------------ ------------ ------------ ------------ ------------
Investment Activities:
Net Investment Income (Loss) ......... $ 623,108 $ 651,647 $ 244,879 $ 88,925 $ (217,447) $ (423,563)
Net Realized Gain (Loss) on
Investments, Affiliated Funds,
Foreign Currency Transactions,
Futures Contracts and Capital Gains
Distributions Received ............ 2,717,650 4,922,475 5,416,333 6,490,574 37,198,185 9,528,381
Change in Unrealized Appreciation
(Depreciation) on Investments,
Affiliated Funds, Foreign Currency
Transactions and Futures
Contracts ......................... 2,206,967 5,078,473 1,945,137 8,714,295 (24,408,505) 35,644,081
----------- ------------ ------------ ------------ ------------ ------------
Net Increase in Net Assets Resulting
From Operations ................... 5,547,725 10,652,595 7,606,349 15,293,794 12,572,233 44,748,899
----------- ------------ ------------ ------------ ------------ ------------
Dividends and Distributions to
Shareholders:
Net Investment Income:
Fiduciary Shares .................. (616,152) (668,420) (88,008) (793,194) -- --
Class A Shares .................... (23,617) (24,627) -- (159,002) -- --
Class B Shares .................... (45) (621) -- -- -- --
Class C Shares .................... (1,224) (1,319) -- (10,657) -- --
Class U Shares .................... -- -- -- -- -- --
Capital Gains:
Fiduciary Shares .................. -- -- -- -- -- --
Class A Shares .................... -- -- -- -- -- --
Class B Shares .................... -- -- -- -- -- --
Class C Shares .................... -- -- -- -- -- --
----------- ------------ ------------ ------------ ------------ ------------
Total Dividends and
Distributions ............... (641,038) (694,987) (88,008) (962,853) -- --
----------- ------------ ------------ ------------ ------------ ------------
Net Increase (Decrease) in Net Assets
From:
Share Transactions (1) ............ 1,315,815 (11,961,278) (13,003,285) (22,096,558) (26,282,979) (21,125,211)
Redemption Fees (Note 2) .......... -- -- -- -- -- --
----------- ------------ ------------ ------------ ------------ ------------
Total Increase (Decrease) in Net
Assets ...................... 6,222,502 (2,003,670) (5,484,944) (7,765,617) (13,710,746) 23,623,688
----------- ------------ ------------ ------------ ------------ ------------
Net Assets:
Beginning of Year .................... 57,121,975 59,125,645 78,570,051 86,335,668 206,770,704 183,147,016
----------- ------------ ------------ ------------ ------------ ------------
End of Year .......................... $63,344,477 $ 57,121,975 $ 73,085,107 $ 78,570,051 $193,059,958 $206,770,704
=========== ============ ============ ============ ============ ============
Undistributed Net Investment
Income/(Accumulated Net Investment
Loss) ................................ $ -- $ 10,804 $ 244,543 $ 87,672 $ (217,447) $ --
=========== ============ ============ ============ ============ ============
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 128 - 137.
The accompanying notes are an integral part of the financial statements.
124 HIGHMARK(R) FUNDS
SMALL CAP CORE
FUND VALUE FUND
--------------------------- ---------------------------
2012 2011 2012 2011
------------ ------------ ------------ ------------
Investment Activities:
Net Investment Income (Loss) ............................. $ (38,083) $ (85,902) $ 4,338,449 $ 3,728,139
Net Realized Gain (Loss) on Investments, Affiliated Funds,
Foreign Currency Transactions, Futures Contracts and
Capital Gains Distributions Received .................. (4,440,568) 4,957,295 20,874,722 25,675,541
Change in Unrealized Appreciation (Depreciation) on
Investments, Affiliated Funds, Foreign Currency
Transactions and Futures Contracts .................... 6,612,990 2,539,022 (17,245,242) 28,857,353
------------ ------------ ------------ ------------
Net Increase in Net Assets Resulting From Operations ..... 2,134,339 7,410,415 7,967,929 58,261,033
------------ ------------ ------------ ------------
Dividends and Distributions to Shareholders:
Net Investment Income:
Fiduciary Shares ...................................... -- -- (2,660,622) (4,901,329)
Class A Shares ........................................ -- -- (844,996) (1,351,277)
Class B Shares ........................................ -- -- (7,745) (40,417)
Class C Shares ........................................ -- -- (15,584) (34,583)
Class U Shares ........................................ -- -- (792,883) --
Capital Gains:
Fiduciary Shares ...................................... -- -- (9,387,522) --
Class A Shares ........................................ -- -- (2,784,426) --
Class B Shares ........................................ -- -- (73,291) --
Class C Shares ........................................ -- -- (94,859) --
------------ ------------ ------------ ------------
Total Dividends and Distributions .................. -- -- (16,661,928) (6,327,606)
------------ ------------ ------------ ------------
Net Increase (Decrease) in Net Assets From:
Share Transactions (1) ................................ 31,048,902 (3,435,221) 33,355,611 (47,550,109)
Redemption Fees (Note 2) .............................. 118 63 -- --
------------ ------------ ------------ ------------
Total Increase (Decrease) in Net Assets ............ 33,183,359 3,975,257 24,661,612 4,383,318
------------ ------------ ------------ ------------
Net Assets:
Beginning of Year ........................................ 27,889,305 23,914,048 310,664,226 306,280,908
------------ ------------ ------------ ------------
End of Year .............................................. $ 61,072,664 $ 27,889,305 $335,325,838 $310,664,226
============ ============ ============ ============
Undistributed Net Investment Income/(Accumulated Net
Investment Loss) ......................................... 9,624 $ -- $ 7,058 $ (3,755)
============ ============ ============ ============
TACTICAL CAPITAL TACTICAL GROWTH &
GROWTH ALLOCATION INCOME ALLOCATION
FUND FUND
--------------------------- ---------------------------
2012 2011 2012 2011
------------ ------------ ------------ ------------
Investment Activities:
Net Investment Income (Loss) ............................. $ 264,627 $ 213,303 $ 548,802 $ 427,577
Net Realized Gain (Loss) on Investments, Affiliated Funds,
Foreign Currency Transactions, Futures Contracts and
Capital Gains Distributions Received .................. 2,343,514 406,698 4,628,928 2,684,792
Change in Unrealized Appreciation (Depreciation) on
Investments, Affiliated Funds, Foreign Currency
Transactions and Futures Contracts .................... (2,022,779) 6,162,702 (3,751,774) 3,027,599
------------ ------------ ------------ ------------
Net Increase in Net Assets Resulting From Operations ..... 585,362 6,782,703 1,425,956 6,139,968
------------ ------------ ------------ ------------
Dividends and Distributions to Shareholders:
Net Investment Income:
Fiduciary Shares ...................................... (6,832) (1,522) (15,952) (4,986)
Class A Shares ........................................ (243,112) (200,051) (429,290) (341,717)
Class B Shares ........................................ -- -- -- --
Class C Shares ........................................ (48,261) (5,745) (146,408) (98,550)
Class U Shares ........................................ -- -- -- --
Capital Gains:
Fiduciary Shares ...................................... -- -- -- --
Class A Shares ........................................ -- -- -- --
Class B Shares ........................................ -- -- -- --
Class C Shares ........................................ -- -- -- --
------------ ------------ ------------ ------------
Total Dividends and Distributions .................. (298,205) (207,318) (591,650) (445,253)
------------ ------------ ------------ ------------
Net Increase (Decrease) in Net Assets From:
Share Transactions (1) ................................ 1,501,369 (2,204,054) 7,931,215 2,857,620
Redemption Fees (Note 2) .............................. -- -- -- --
------------ ------------ ------------ ------------
Total Increase (Decrease) in Net Assets ............ 1,788,526 4,371,331 8,765,521 8,552,335
------------ ------------ ------------ ------------
Net Assets:
Beginning of Year ........................................ 44,216,092 39,844,761 51,800,151 43,247,816
------------ ------------ ------------ ------------
End of Year .............................................. $ 46,004,618 $ 44,216,092 $ 60,565,672 $ 51,800,151
============ ============ ============ ============
Undistributed Net Investment Income/(Accumulated Net
Investment Loss) ......................................... $ 135,280 $ 49,148 $ 178,520 $ 54,908
============ ============ ============ ============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 125
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED JULY 31 (UNLESS OTHERWISE INDICATED)
CALIFORNIA INTERMEDIATE
BOND FUND TAX-FREE BOND FUND
----------------------------- ----------------------------
2012 2011 2012 2011
------------- ------------- ------------ -------------
Investment Activities:
Net Investment Income (Loss) ................................. $ 12,409,393 $ 13,534,592 $ 5,809,648 $ 5,808,105
Net Realized Gain (Loss) on Investments and Capital
Gains Distributions Received .............................. 4,729,214 8,249,013 (114,404) (115,747)
Change in Unrealized Appreciation (Depreciation) on
Investments ............................................... 9,109,333 (2,381,071) 9,391,099 (1,501,496)
------------- ------------- ------------ -------------
Net Increase in Net Assets Resulting From Operations ......... 26,247,940 19,402,534 15,086,343 4,190,862
------------- ------------- ------------ -------------
Dividends and Distributions to Shareholders:
Net Investment Income:
Fiduciary Shares .......................................... (11,255,126) (12,484,462) (3,385,518) (3,238,236)
Class A Shares ............................................ (1,199,266) (1,053,646) (1,939,756) (2,059,561)
Class B Shares ............................................ (5,968) (28,497) (353) (5,440)
Class C Shares ............................................ (311,057) (208,572) (560,659) (419,488)
Capital Gains:
Fiduciary Shares .......................................... (6,824,662) (2,773,259) -- --
Class A Shares ............................................ (682,404) (256,107) -- --
Class B Shares ............................................ (6,043) (10,059) -- --
Class C Shares ............................................ (215,416) (57,758) -- --
------------- ------------- ------------ -------------
Total Dividends and Distributions ...................... (20,499,942) (16,872,360) (5,886,286) (5,722,725)
------------- ------------- ------------ -------------
Net Increase (Decrease) in Net Assets From:
Share Transactions (2) .................................... 5,550,827 7,382,882 27,449,603 22,100,554
------------- ------------- ------------ -------------
Total Increase (Decrease) in Net Assets ................ 11,298,825 9,913,056 36,649,660 20,568,691
------------- ------------- ------------ -------------
Net Assets:
Beginning of Year ............................................ 374,691,521 364,778,465 224,582,006 204,013,315
------------- ------------- ------------ -------------
End of Year .................................................. $ 385,990,346 $ 374,691,521 $261,231,666 $ 224,582,006
============= ============= ============ =============
Undistributed Net Investment Income/(Accumulated Net
Investment Loss) ............................................. $ 230,500 $ 229,716 $ 42,639 $ 113,140
============= ============= ============ =============
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 128 - 137.
The accompanying notes are an integral part of the financial statements.
126 HIGHMARK(R) FUNDS
NATIONAL INTERMEDIATE SHORT TERM BOND
TAX-FREE BOND FUND FUND
----------------------------- ----------------------------
2012 2011 2012 2011
------------- ------------- ------------ -------------
Investment Activities:
Net Investment Income (Loss) ................................. $ 2,756,110 $ 2,972,472 $ 2,594,573 $ 2,615,279
Net Realized Gain (Loss) on Investments and
Capital Gains Distributions Received ....................... 266,608 75 277,851 399,316
Change in Unrealized Appreciation (Depreciation)
on Investments ............................................. 2,979,698 (744,306) 465,255 (250,248)
------------- ------------- ------------ -------------
Net Increase in Net Assets Resulting From Operations ......... 6,002,416 2,228,241 3,337,679 2,764,347
------------- ------------- ------------ -------------
Dividends and Distributions to Shareholders:
Net Investment Income:
Fiduciary Shares .......................................... (2,067,526) (2,302,774) (2,114,209) (2,029,877)
Class A Shares ............................................ (549,948) (600,737) (493,102) (547,080)
Class B Shares ............................................ -- -- -- --
Class C Shares ............................................ (126,155) (81,894) (322,166) (359,850)
Capital Gains:
Fiduciary Shares .......................................... -- (11,297) -- --
Class A Shares ............................................ -- (3,232) -- --
Class B Shares ............................................ -- -- -- --
Class C Shares ............................................ -- (490) -- --
------------- ------------- ------------ -------------
Total Dividends and Distributions ...................... (2,743,629) (3,000,424) (2,929,477) (2,936,807)
------------- ------------- ------------ -------------
Net Increase (Decrease) in Net Assets From:
Share Transactions (2) .................................... (10,838,286) 2,691,721 25,792,846 21,609,236
------------- ------------- ------------ -------------
Total Increase (Decrease) in Net Assets ................ (7,579,499) 1,919,538 26,201,048 21,436,776
------------- ------------- ------------ -------------
Net Assets:
Beginning of Year ............................................ 107,737,771 105,818,233 132,705,094 111,268,318
------------- ------------- ------------ -------------
End of Year .................................................. $ 100,158,272 $ 107,737,771 $158,906,142 $ 132,705,094
============= ============= ============ =============
Undistributed Net Investment Income/(Accumulated Net
Investment Loss) ........................................... $ 24,780 $ 12,299 $ 9,172 $ 16,757
============= ============= ============ =============
WISCONSIN
TAX-EXEMPT
FUND
-----------------------------
2012 2011(1)
------------- -------------
Investment Activities:
Net Investment Income (Loss) ................................. $ 4,796,281 $ 5,318,948
Net Realized Gain (Loss) on Investments and
Capital Gains Distributions Received ....................... 60,134 (438,670)
Change in Unrealized Appreciation (Depreciation)
on Investments ............................................. 7,262,822 (1,833,800)
------------- -------------
Net Increase in Net Assets Resulting From Operations ......... 12,119,237 3,046,478
------------- -------------
Dividends and Distributions to Shareholders:
Net Investment Income:
Fiduciary Shares .......................................... (14,130) (5,272)
Class A Shares ............................................ (4,382,703) (4,947,628)
Class B Shares ............................................ (34,240) (71,503)
Class C Shares ............................................ (365,570) (338,374)
Capital Gains:
Fiduciary Shares .......................................... -- (158)
Class A Shares ............................................ -- (166,152)
Class B Shares ............................................ -- (3,169)
Class C Shares ............................................ -- (12,982)
------------- -------------
Total Dividends and Distributions ...................... (4,796,643) (5,545,238)
------------- -------------
Net Increase (Decrease) in Net Assets From:
Share Transactions (2) ....................................... 15,308,659 (13,843,312)
------------- -------------
Total Increase (Decrease) in Net Assets ................ 22,631,253 (16,342,072)
------------- -------------
Net Assets:
Beginning of Year ............................................ 143,377,955 159,720,027
------------- -------------
End of Year .................................................. $ 166,009,208 $ 143,377,955
============= =============
Undistributed Net Investment Income/(Accumulated Net
Investment Loss) ............................................. $ 13,463 $ 13,825
============= =============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 127
STATEMENTS OF CHANGES IN NET ASSETS - CAPITAL STOCK ACTIVITY
FOR THE YEARS ENDED JULY 31 (UNLESS OTHERWISE INDICATED)
BALANCED FUND
---------------------------------------------------
2012 2011
SHARES DOLLARS SHARES DOLLARS
---------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ..................... 190,942 $ 2,671,930 174,457 $ 2,406,987
Reinvestment of Dividends and
Distributions ................................ 15,602 218,622 21,931 299,089
Cost of Shares Redeemed ......................... (427,640) (5,933,412) (282,838) (3,856,590)
---------- ----------- ---------- -----------
Total Fiduciary Share Transactions ........... (221,096) (3,042,860) (86,450) (1,150,514)
---------- ----------- ---------- -----------
Class A Shares:
Proceeds from Shares Issued ..................... 86,347 1,229,925 79,620 1,101,253
Reinvestment of Dividends and
Distributions ................................ 4,185 58,737 5,716 77,812
Cost of Shares Redeemed ......................... (110,783) (1,548,172) (80,459) (1,098,427)
---------- ----------- ---------- -----------
Total Class A Share Transactions ............. (20,251) (259,510) 4,877 80,638
---------- ----------- ---------- -----------
Class B Shares:
Proceeds from Shares Issued ..................... -- -- 1,390 19,259
Reinvestment of Dividends and
Distributions ................................ 16 221 222 3,002
Cost of Shares Redeemed ......................... (6,816) (93,405) (28,578) (395,314)
---------- ----------- ---------- -----------
Total Class B Share Transactions ............. (6,800) (93,184) (26,966) (373,053)
---------- ----------- ---------- -----------
Class C Shares:
Proceeds from Shares Issued ..................... 37,322 537,001 23,965 319,781
Reinvestment of Dividends and
Distributions ................................ 271 3,875 454 6,154
Cost of Shares Redeemed ......................... (10,879) (145,435) (3,536) (48,276)
---------- ----------- ---------- -----------
Total Class C Share Transactions ............. 26,714 395,441 20,883 277,659
---------- ----------- ---------- -----------
Class M Shares:
Proceeds from Shares Issued ..................... -- -- -- --
Reinvestment of Dividends ....................... -- -- -- --
Cost of Shares Redeemed ......................... -- -- -- --
---------- ----------- ---------- -----------
Total Class M Share Transactions ............. -- -- -- --
---------- ----------- ---------- -----------
Net Increase (Decrease) from Capital
Stock Activity ............................... (221,433) $(3,000,113) (87,656) $(1,165,270)
========== =========== ========== ===========
COGNITIVE VALUE FUND
-----------------------------------------------------
2012 2011
SHARES DOLLARS SHARES DOLLARS
-----------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ..................... 293,310 $ 3,109,031 275,045 $ 3,060,849
Reinvestment of Dividends and
Distributions ................................ 3,314 34,435 983 10,639
Cost of Shares Redeemed ......................... (297,232) (3,280,154) (72,900) (805,243)
---------- ------------ ---------- ------------
Total Fiduciary Share Transactions ........... (608) (136,688) 203,128 2,266,245
---------- ------------ ---------- ------------
Class A Shares:
Proceeds from Shares Issued ..................... 17,477 191,503 58,672 623,737
Reinvestment of Dividends and
Distributions ................................ 260 2,717 834 9,046
Cost of Shares Redeemed ......................... (47,641) (512,563) (45,806) (492,114)
---------- ------------ ---------- ------------
Total Class A Share Transactions ............. (29,904) (318,343) 13,700 140,669
---------- ------------ ---------- ------------
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 ..................... 5,944 62,849 32,385 350,167
Reinvestment of Dividends and
Distributions ................................ -- -- 116 1,231
Cost of Shares Redeemed ......................... (20,034) (204,335) (38,890) (414,758)
---------- ------------ ---------- ------------
Total Class C Share Transactions ............. (14,090) (141,486) (6,389) (63,360)
---------- ------------ ---------- ------------
Class M Shares:
Proceeds from Shares Issued ..................... 459,343 4,916,768 1,057,545 10,575,434
Reinvestment of Dividends ....................... 61,733 641,409 84,977 919,625
Cost of Shares Redeemed ......................... (1,533,137) (16,391,443) (1,018,124) (11,125,117)
---------- ------------ ---------- ------------
Total Class M Share Transactions ............. (1,012,061) (10,833,266) 124,398 369,942
---------- ------------ ---------- ------------
Net Increase (Decrease) from Capital
Stock Activity ............................... (1,056,663) $(11,429,783) 334,837 $ 2,713,496
========== ============ ========== ============
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
128 HIGHMARK(R) FUNDS
ENHANCED GROWTH FUND
-----------------------------------------------------
2012 2011
SHARES DOLLARS SHARES DOLLARS
-----------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ..................... 147,507 $ 1,641,786 169,363 $ 1,844,966
Reinvestment of Dividends and
Distributions ................................ -- -- -- --
Cost of Shares Redeemed ......................... (90,489) (985,585) (174,741) (1,840,560)
---------- ------------ ---------- ------------
Total Fiduciary Share Transactions ........... 57,018 656,201 (5,378) 4,406
---------- ------------ ---------- ------------
Class A Shares:
Proceeds from Shares Issued ..................... 48,349 510,437 130,470 1,430,829
Reinvestment of Dividends and
Distributions ................................ -- -- -- --
Cost of Shares Redeemed ......................... (107,195) (1,193,110) (202,217) (2,058,081)
---------- ------------ ---------- ------------
Total Class A Share Transactions ............. (58,846) (682,673) (71,747) (627,252)
---------- ------------ ---------- ------------
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 ..................... 18 173 13,856 151,321
Reinvestment of Dividends and
Distributions ................................ -- -- -- --
Cost of Shares Redeemed ......................... (14,853) (156,819) (8,677) (94,826)
---------- ------------ ---------- ------------
Total Class C Share Transactions ............. (14,835) (156,646) 5,179 56,495
---------- ------------ ---------- ------------
Class M Shares:
Proceeds from Shares Issued ..................... 429,850 4,687,492 1,468,918 14,555,580
Reinvestment of Dividends ....................... -- -- -- --
Cost of Shares Redeemed ......................... (1,648,432) (18,011,367) (777,133) (8,449,262)
---------- ------------ ---------- ------------
Total Class M Share Transactions ............. (1,218,582) (13,323,875) 691,785 6,106,318
---------- ------------ ---------- ------------
Net Increase (Decrease) from Capital
Stock Activity ............................... (1,235,245) $(13,506,993) 619,839 $ 5,539,967
========== ============ ========== ============
EQUITY INCOME FUND
-----------------------------------------------------
2012 2011
SHARES DOLLARS SHARES DOLLARS
-----------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ..................... 436,687 $ 4,037,140 620,012 $ 5,645,421
Reinvestment of Dividends and
Distributions ................................ 19,810 184,890 9,680 89,163
Cost of Shares Redeemed ......................... (389,890) (3,720,868) (30,039) (273,584)
---------- ------------ ---------- ------------
Total Fiduciary Share Transactions ........... 66,607 501,162 599,653 5,461,000
---------- ------------ ---------- ------------
Class A Shares:
Proceeds from Shares Issued ..................... 288,715 2,627,642 113,305 1,038,229
Reinvestment of Dividends and
Distributions ................................ 23,655 220,242 30,663 269,203
Cost of Shares Redeemed ......................... (183,126) (1,692,180) (400,198) (3,486,854)
---------- ------------ ---------- ------------
Total Class A Share Transactions ............. 129,244 1,155,704 (256,230) (2,179,422)
---------- ------------ ---------- ------------
Class B Shares:
Proceeds from Shares Issued ..................... 5,859 51,234 447 3,842
Reinvestment of Dividends and
Distributions ................................ 2,672 24,792 4,537 39,939
Cost of Shares Redeemed ......................... (53,474) (500,032) (63,428) (568,898)
---------- ------------ ---------- ------------
Total Class B Share Transactions ............. (44,943) (424,006) (58,444) (525,117)
---------- ------------ ---------- ------------
Class C Shares:
Proceeds from Shares Issued ..................... 49,018 451,198 32,010 294,463
Reinvestment of Dividends and
Distributions ................................ 4,646 43,004 5,698 49,855
Cost of Shares Redeemed ......................... (54,364) (523,385) (51,059) (446,272)
---------- ------------ ---------- ------------
Total Class C Share Transactions ............. (700) (29,183) (13,351) (101,954)
---------- ------------ ---------- ------------
Class M Shares:
Proceeds from Shares Issued ..................... -- -- -- --
Reinvestment of Dividends ....................... -- -- -- --
Cost of Shares Redeemed ......................... -- -- -- --
---------- ------------ ---------- ------------
Total Class M Share Transactions ............. -- -- -- --
---------- ------------ ---------- ------------
Net Increase (Decrease) from Capital
Stock Activity ............................... 150,208 $ 1,203,677 271,628 $ 2,654,507
========== ============ ========== ============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 129
STATEMENTS OF CHANGES IN NET ASSETS -
CAPITAL STOCK ACTIVITY
FOR THE YEARS ENDED JULY 31 (UNLESS OTHERWISE INDICATED)
GENEVA MID CAP GROWTH FUND
---------------------------------------------------------
2012 2011
SHARES DOLLARS SHARES DOLLARS
---------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ...................................... 11,476,172 $ 269,452,620 9,147,106 $ 210,427,421
Subscriptions from Reorganizations Fiduciary Class (Note 8) ...... -- -- -- --
Reinvestment of Dividends and Distributions ...................... 178,714 4,094,335 2,022 44,653
Cost of Shares Redeemed .......................................... (2,683,801) (62,511,731) (798,702) (18,347,466)
----------- ------------- ----------- -------------
Total Fiduciary Share Transactions ............................. 8,971,085 211,035,224 8,350,426 192,124,608
----------- ------------- ----------- -------------
Class A Shares:
Proceeds from Shares Issued ...................................... 9,618,234 223,703,756 3,740,041 82,372,045
Subscriptions from Reorganizations Class A (Note 8) .............. -- -- -- --
Reinvestment of Dividends and Distributions ...................... 166,619 3,788,913 11,340 249,371
Cost of Shares Redeemed .......................................... (3,517,152) (81,682,821) (4,997,597) (110,875,703)
----------- ------------- ----------- -------------
Total Class A Share Transactions ............................... 6,267,701 145,809,848 (1,246,216) (28,254,287)
----------- ------------- ----------- -------------
Class B Shares:
Proceeds from Shares Issued ...................................... 1,205 24,684 6,269 130,443
Reinvestment of Dividends and Distributions ...................... 4,123 85,131 358 7,211
Cost of Shares Redeemed .......................................... (105,553) (2,200,757) (114,894) (2,240,830)
----------- ------------- ----------- -------------
Total Class B Share Transactions ............................... (100,225) (2,090,942) (108,267) (2,103,176)
----------- ------------- ----------- -------------
Class C Shares:
Proceeds from Shares Issued ...................................... 1,817,992 39,561,022 560,886 11,614,224
Subscriptions from Reorganizations Class C (Note 8) .............. -- -- -- --
Reinvestment of Dividends and Distributions ...................... 34,877 728,924 1,588 32,328
Cost of Shares Redeemed .......................................... (249,142) (5,302,698) (143,411) (2,845,899)
----------- ------------- ----------- -------------
Total Class C Share Transactions ............................... 1,603,727 34,987,248 419,063 8,800,653
----------- ------------- ----------- -------------
Class M Shares:
Proceeds from Shares Issued ...................................... -- -- -- --
Reinvestment of Dividends ........................................ -- -- -- --
Cost of Shares Redeemed .......................................... -- -- -- --
----------- ------------- ----------- -------------
Total Class M Share Transactions ............................... -- -- -- --
----------- ------------- ----------- -------------
Net Increase (Decrease) from Capital Stock Activity .............. 16,742,288 $ 389,741,378 7,415,006 $ 170,567,798
=========== ============= =========== =============
GENEVA SMALL CAP GROWTH FUND
---------------------------------------------------------
2012 2011
SHARES DOLLARS SHARES DOLLARS
---------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ...................................... 469,180 $ 14,337,205 209,987 $ 6,295,748
Subscriptions from Reorganizations Fiduciary Class (Note 8) ...... -- -- -- --
Reinvestment of Dividends and Distributions ...................... 14,118 426,935 7,629 229,808
Cost of Shares Redeemed .......................................... (83,072) (2,467,799) (71,317) (2,238,124)
----------- ------------- ----------- -------------
Total Fiduciary Share Transactions ............................. 400,226 12,296,341 146,299 4,287,432
----------- ------------- ----------- -------------
Class A Shares:
Proceeds from Shares Issued ...................................... 165,961 5,087,750 173,388 5,373,313
Subscriptions from Reorganizations Class A (Note 8) .............. -- -- -- --
Reinvestment of Dividends and Distributions ...................... 8,796 264,220 5,285 158,544
Cost of Shares Redeemed .......................................... (149,863) (4,599,642) (19,142) (593,879)
----------- ------------- ----------- -------------
Total Class A Share Transactions ............................... 24,894 752,328 159,531 4,937,978
----------- ------------- ----------- -------------
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 ...................................... 64,560 1,939,575 63,155 1,953,328
Subscriptions from Reorganizations Class C (Note 8) .............. -- -- -- --
Reinvestment of Dividends and Distributions ...................... 2,625 77,680 465 13,819
Cost of Shares Redeemed .......................................... (13,753) (397,822) (4,367) (135,113)
----------- ------------- ----------- -------------
Total Class C Share Transactions ............................... 53,432 1,619,433 59,253 1,832,034
----------- ------------- ----------- -------------
Class M Shares:
Proceeds from Shares Issued ...................................... -- -- -- --
Reinvestment of Dividends ........................................ -- -- -- --
Cost of Shares Redeemed .......................................... -- -- -- --
----------- ------------- ----------- -------------
Total Class M Share Transactions ............................... -- -- -- --
----------- ------------- ----------- -------------
Net Increase (Decrease) from Capital Stock Activity .............. 478,552 $ 14,668,102 365,083 $ 11,057,444
=========== ============= =========== =============
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
130 HIGHMARK(R) FUNDS
INTERNATIONAL OPPORTUNITIES FUND
---------------------------------------------------------
2012 2011
SHARES DOLLARS SHARES DOLLARS
---------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ...................................... 2,205,434 $ 13,789,137 2,921,932 $ 21,283,106
Subscriptions from Reorganizations Fiduciary Class (Note 8) ...... -- -- -- --
Reinvestment of Dividends and Distributions ...................... 184,054 1,041,747 107,779 758,762
Cost of Shares Redeemed .......................................... (4,814,728) (29,682,060) (3,062,608) (22,011,828)
----------- ------------- ----------- -------------
Total Fiduciary Share Transactions ............................. (2,425,240) (14,851,176) (32,897) 30,040
----------- ------------- ----------- -------------
Class A Shares:
Proceeds from Shares Issued ...................................... 81,427 499,120 217,725 1,543,650
Subscriptions from Reorganizations Class A (Note 8) .............. -- -- -- --
Reinvestment of Dividends and Distributions ...................... 15,497 88,021 14,522 102,237
Cost of Shares Redeemed .......................................... (248,818) (1,568,759) (611,967) (4,396,489)
----------- ------------- ----------- -------------
Total Class A Share Transactions ............................... (151,894) (981,618) (379,720) (2,750,602)
----------- ------------- ----------- -------------
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 ...................................... 5,933 36,315 48,871 339,457
Subscriptions from Reorganizations Class C (Note 8) .............. -- -- -- --
Reinvestment of Dividends and Distributions ...................... 3,834 21,698 3,296 23,042
Cost of Shares Redeemed .......................................... (130,335) (787,963) (57,186) (409,953)
----------- ------------- ----------- -------------
Total Class C Share Transactions ............................... (120,568) (729,950) (5,019) (47,454)
----------- ------------- ----------- -------------
Class M Shares:
Proceeds from Shares Issued ...................................... 1,252,318 7,850,315 1,331,063 9,688,116
Reinvestment of Dividends ........................................ 545,684 3,088,570 325,121 2,288,850
Cost of Shares Redeemed .......................................... (2,277,084) (14,348,721) (2,492,008) (17,790,499)
----------- ------------- ----------- -------------
Total Class M Share Transactions ............................... (479,082) (3,409,836) (835,824) (5,813,533)
----------- ------------- ----------- -------------
Net Increase (Decrease) from Capital Stock Activity .............. (3,176,784) $ (19,972,580) (1,253,460) $ (8,581,549)
=========== ============= =========== =============
LARGE CAP CORE EQUITY FUND
---------------------------------------------------------
2012 2011
SHARES DOLLARS SHARES DOLLARS
---------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ...................................... 719,970 $ 6,355,422 764,345 $ 6,325,393
Subscriptions from Reorganizations Fiduciary Class (Note 8) ...... 1,836,177 15,503,279 -- --
Reinvestment of Dividends and Distributions ...................... 27,526 232,776 33,012 267,792
Cost of Shares Redeemed .......................................... (2,445,550) (20,988,863) (2,186,481) (18,173,729)
----------- ------------- ----------- -------------
Total Fiduciary Share Transactions ............................. 138,123 1,102,614 (1,389,124) (11,580,544)
----------- ------------- ----------- -------------
Class A Shares:
Proceeds from Shares Issued ...................................... 76,374 668,492 72,209 611,978
Subscriptions from Reorganizations Class A (Note 8) .............. 4,544 38,269 -- --
Reinvestment of Dividends and Distributions ...................... 2,679 22,525 2,842 23,172
Cost of Shares Redeemed .......................................... (55,125) (474,549) (83,095) (683,839)
----------- ------------- ----------- -------------
Total Class A Share Transactions ............................... 28,472 254,737 (8,044) (48,689)
----------- ------------- ----------- -------------
Class B Shares:
Proceeds from Shares Issued ...................................... -- -- 5,376 44,031
Reinvestment of Dividends and Distributions ...................... 6 45 78 621
Cost of Shares Redeemed .......................................... (10,326) (83,324) (59,059) (490,364)
----------- ------------- ----------- -------------
Total Class B Share Transactions ............................... (10,320) (83,279) (53,605) (445,712)
----------- ------------- ----------- -------------
Class C Shares:
Proceeds from Shares Issued ...................................... 71,442 584,104 21,758 167,546
Subscriptions from Reorganizations Class C (Note 8) .............. 3,269 26,758 -- --
Reinvestment of Dividends and Distributions ...................... 102 757 114 918
Cost of Shares Redeemed .......................................... (66,596) (569,876) (7,026) (54,797)
----------- ------------- ----------- -------------
Total Class C Share Transactions ............................... 8,217 41,743 14,846 113,667
----------- ------------- ----------- -------------
Class M Shares:
Proceeds from Shares Issued ...................................... -- -- -- --
Reinvestment of Dividends ........................................ -- -- -- --
Cost of Shares Redeemed .......................................... -- -- -- --
----------- ------------- ----------- -------------
Total Class M Share Transactions ............................... -- -- -- --
----------- ------------- ----------- -------------
Net Increase (Decrease) from Capital Stock Activity .............. 164,492 $ 1,315,815 (1,435,927) $ (11,961,278)
=========== ============= =========== =============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 131
STATEMENTS OF CHANGES IN NET ASSETS -
CAPITAL STOCK ACTIVITY
FOR THE YEARS ENDED JULY 31 (UNLESS OTHERWISE INDICATED)
LARGE CAP GROWTH FUND
---------------------------------------------------------
2012 2011
SHARES DOLLARS SHARES DOLLARS
---------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ...................................... 749,226 $ 7,591,441 977,734 $ 9,511,489
Subscriptions from Reorganizations Fiduciary Class (Note 8) ...... -- -- -- --
Reinvestment of Dividends and Distributions ...................... 4,957 47,937 44,280 446,785
Cost of Shares Redeemed .......................................... (1,666,855) (17,309,065) (2,293,189) (23,232,239)
----------- ------------- ----------- -------------
Total Fiduciary Share Transactions ............................. (912,672) (9,669,687) (1,271,175) (13,273,965)
----------- ------------- ----------- -------------
Class A Shares:
Proceeds from Shares Issued ...................................... 149,183 1,494,200 209,610 2,085,029
Subscriptions from Reorganizations Class A (Note 8) .............. -- -- -- --
Reinvestment of Dividends and Distributions ...................... -- -- 14,810 146,913
Cost of Shares Redeemed .......................................... (302,056) (3,057,274) (882,030) (8,436,350)
----------- ------------- ----------- -------------
Total Class A Share Transactions ............................... (152,873) (1,563,074) (657,610) (6,204,408)
----------- ------------- ----------- -------------
Class B Shares:
Proceeds from Shares Issued ...................................... 1,326 12,429 407 3,907
Subscriptions from Reorganizations Class B (Note 8) .............. -- -- -- --
Reinvestment of Dividends and Distributions ...................... -- -- -- --
Cost of Shares Redeemed .......................................... (136,345) (1,273,568) (189,171) (1,749,901)
----------- ------------- ----------- -------------
Total Class B Share Transactions ............................... (135,019) (1,261,139) (188,764) (1,745,994)
----------- ------------- ----------- -------------
Class C Shares:
Proceeds from Shares Issued ...................................... 9,066 85,784 24,388 233,921
Subscriptions from Reorganizations Class C (Note 8) .............. -- -- -- --
Reinvestment of Dividends and Distributions ...................... -- -- 1,093 10,102
Cost of Shares Redeemed .......................................... (59,796) (595,169) (125,833) (1,116,214)
----------- ------------- ----------- -------------
Total Class C Share Transactions ............................... (50,730) (509,385) (100,352) (872,191)
----------- ------------- ----------- -------------
Class U Shares:
Proceeds from Shares Issued ...................................... -- -- -- --
Reinvestment of Dividends and Distributions ...................... -- -- -- --
Cost of Shares Redeemed .......................................... -- -- -- --
----------- ------------- ----------- -------------
Total Class U Share Transactions ............................... -- -- -- --
----------- ------------- ----------- -------------
Net Increase (Decrease) from Capital Stock Activity .............. (1,251,294) $ (13,003,285) (2,217,901) $ (22,096,558)
=========== ============= =========== =============
NYSE ARCA TECH 100 INDEX FUND
---------------------------------------------------------
2012 2011
SHARES DOLLARS SHARES DOLLARS
---------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ...................................... 205,295 $ 6,543,657 221,631 $ 6,946,480
Subscriptions from Reorganizations Fiduciary Class (Note 8) ...... -- -- -- --
Reinvestment of Dividends and Distributions ...................... -- -- -- --
Cost of Shares Redeemed .......................................... (172,211) (5,963,096) (48,071) (1,569,230)
----------- ------------- ----------- -------------
Total Fiduciary Share Transactions ............................. 33,084 580,561 173,560 5,377,250
----------- ------------- ----------- -------------
Class A Shares:
Proceeds from Shares Issued ...................................... 941,982 30,839,608 1,164,336 35,997,236
Subscriptions from Reorganizations Class A (Note 8) .............. -- -- -- --
Reinvestment of Dividends and Distributions ...................... -- -- -- --
Cost of Shares Redeemed .......................................... (1,663,528) (53,421,084) (1,809,690) (55,819,075)
----------- ------------- ----------- -------------
Total Class A Share Transactions ............................... (721,546) (22,581,476) (645,354) (19,821,839)
----------- ------------- ----------- -------------
Class B Shares:
Proceeds from Shares Issued ...................................... -- -- 3,029 88,954
Subscriptions from Reorganizations Class B (Note 8) .............. -- -- -- --
Reinvestment of Dividends and Distributions ...................... -- -- -- --
Cost of Shares Redeemed .......................................... (119,666) (3,452,058) (182,041) (5,008,569)
----------- ------------- ----------- -------------
Total Class B Share Transactions ............................... (119,666) (3,452,058) (179,012) (4,919,615)
----------- ------------- ----------- -------------
Class C Shares:
Proceeds from Shares Issued ...................................... 27,160 840,483 36,553 1,045,906
Subscriptions from Reorganizations Class C (Note 8) .............. -- -- -- --
Reinvestment of Dividends and Distributions ...................... -- -- -- --
Cost of Shares Redeemed .......................................... (55,196) (1,670,489) (104,785) (2,806,913)
----------- ------------- ----------- -------------
Total Class C Share Transactions ............................... (28,036) (830,006) (68,232) (1,761,007)
----------- ------------- ----------- -------------
Class U Shares:
Proceeds from Shares Issued ...................................... -- -- -- --
Reinvestment of Dividends and Distributions ...................... -- -- -- --
Cost of Shares Redeemed .......................................... -- -- -- --
----------- ------------- ----------- -------------
Total Class U Share Transactions ............................... -- -- -- --
----------- ------------- ----------- -------------
Net Increase (Decrease) from Capital Stock Activity .............. (836,164) $ (26,282,979) (719,038) $ (21,125,211)
=========== ============= =========== =============
Amounts designated as "--" are either $0 or have been rounded to $0.
(1) The Fund began issuing Class U shares on January 4, 2012.
The accompanying notes are an integral part of the financial statements.
132 HIGHMARK(R) FUNDS
SMALL CAP CORE FUND
---------------------------------------------------------
2012 2011
SHARES DOLLARS SHARES DOLLARS
---------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued .......... ........................... 434,992 $ 7,667,113 264,971 $ 4,880,502
Subscriptions from Reorganizations Fiduciary Class (Note 8) ...... 1,458,617 26,344,563 -- --
Reinvestment of Dividends and Distributions ...................... -- -- -- --
Cost of Shares Redeemed .............. ........................... (888,418) (16,068,947) (473,170) (8,581,732)
----------- ------------- ----------- -------------
Total Fiduciary Share Transactions ............................. 1,005,191 17,942,729 (208,199) (3,701,230)
----------- ------------- ----------- -------------
Class A Shares:
Proceeds from Shares Issued ...................................... 23,074 414,547 20,758 394,043
Subscriptions from Reorganizations Class A (Note 8) .............. 663,271 11,877,890 -- --
Reinvestment of Dividends and Distributions ...................... -- -- -- --
Cost of Shares Redeemed .......................................... (142,300) (2,593,593) (14,085) (239,173)
----------- ------------- ----------- -------------
Total Class A Share Transactions ............................... 544,045 9,698,844 6,673 154,870
----------- ------------- ----------- -------------
Class B Shares:
Proceeds from Shares Issued ...................................... -- -- -- --
Subscriptions from Reorganizations Class B (Note 8) .............. -- -- -- --
Reinvestment of Dividends and Distributions ...................... -- -- -- --
Cost of Shares Redeemed .......................................... -- -- -- --
----------- ------------- ----------- -------------
Total Class B Share Transactions ............................... -- -- -- --
----------- ------------- ----------- -------------
Class C Shares:
Proceeds from Shares Issued ...................................... 764 13,724 7,353 133,337
Subscriptions from Reorganizations Class C (Note 8) .............. 232,398 4,059,148 -- --
Reinvestment of Dividends and Distributions ...................... -- -- -- --
Cost of Shares Redeemed .......................................... (38,081) (665,543) (1,168) (22,198)
----------- ------------- ----------- -------------
Total Class C Share Transactions ............................... 195,081 3,407,329 6,185 111,139
----------- ------------- ----------- -------------
Class U Shares:
Proceeds from Shares Issued ...................................... -- -- -- --
Reinvestment of Dividends and Distributions ...................... -- -- -- --
Cost of Shares Redeemed .......................................... -- -- -- --
----------- ------------- ----------- -------------
Total Class U Share Transactions ............................... -- -- -- --
----------- ------------- ----------- -------------
Net Increase (Decrease) from Capital Stock Activity .............. 1,744,317 $ 31,048,902 (195,341) $ (3,435,221)
=========== ============= =========== =============
VALUE FUND
---------------------------------------------------------
2012(1) 2011
SHARES DOLLARS SHARES DOLLARS
---------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ...................................... 1,415,703 $ 21,074,280 2,267,702 $ 34,910,783
Subscriptions from Reorganizations Fiduciary Class (Note 8) ...... 2,435,210 39,492,211 -- --
Reinvestment of Dividends and Distributions ...................... 767,380 11,148,663 258,336 3,903,824
Cost of Shares Redeemed .......................................... (9,845,388) (147,601,190) (4,663,578) (71,093,569)
----------- ------------- ----------- -------------
Total Fiduciary Share Transactions ............................. (5,227,095) (75,886,036) (2,137,540) (32,278,962)
----------- ------------- ----------- -------------
Class A Shares:
Proceeds from Shares Issued ...................................... 107,084 1,607,698 143,154 2,205,404
Subscriptions from Reorganizations Class A (Note 8) .............. 1,177,892 19,050,615 -- --
Reinvestment of Dividends and Distributions ...................... 230,662 3,356,390 82,262 1,236,042
Cost of Shares Redeemed .......................................... (632,564) (9,563,164) (1,092,462) (16,480,347)
----------- ------------- ----------- -------------
Total Class A Share Transactions ............................... 883,074 14,451,539 (867,046) (13,038,901)
----------- ------------- ----------- -------------
Class B Shares:
Proceeds from Shares Issued ...................................... 39 775 527 8,020
Subscriptions from Reorganizations Class B (Note 8) .............. 23,042 364,271 -- --
Reinvestment of Dividends and Distributions ...................... 5,049 71,422 2,627 38,127
Cost of Shares Redeemed .......................................... (93,133) (1,368,207) (120,433) (1,814,414)
----------- ------------- ----------- -------------
Total Class B Share Transactions ............................... (65,003) (931,739) (117,279) (1,768,267)
----------- ------------- ----------- -------------
Class C Shares:
Proceeds from Shares Issued ...................................... 7,859 118,037 11,760 179,954
Subscriptions from Reorganizations Class C (Note 8) .............. 126,909 1,996,965 -- --
Reinvestment of Dividends and Distributions ...................... 7,529 106,284 2,297 33,441
Cost of Shares Redeemed .......................................... (53,775) (797,877) (45,991) (677,374)
----------- ------------- ----------- -------------
Total Class C Share Transactions ............................... 88,522 1,423,409 (31,934) (463,979)
----------- ------------- ----------- -------------
Class U Shares:
Proceeds from Shares Issued ...................................... 6,903,343 102,880,404 -- --
Reinvestment of Dividends and Distributions ...................... 50,642 792,883 -- --
Cost of Shares Redeemed .......................................... (596,274) (9,374,849) -- --
----------- ------------- ----------- -------------
Total Class U Share Transactions ............................... 6,357,711 94,298,438 -- --
----------- ------------- ----------- -------------
Net Increase (Decrease) from Capital Stock Activity .............. 2,037,209 $ 33,355,611 (3,153,799) $ (47,550,109)
=========== ============= =========== =============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 133
STATEMENTS OF CHANGES IN NET ASSETS - CAPITAL STOCK ACTIVITY
FOR THE YEARS ENDED JULY 31 (UNLESS OTHERWISE INDICATED)
TACTICAL CAPITAL GROWTH ALLOCATION FUND
-----------------------------------------------------
2012 2011
SHARES DOLLARS SHARES DOLLARS
-----------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ............ 8,595 $ 179,425 6,593 $ 142,825
Subscriptions from Reorganizations
Fiduciary Class (Note 8) ............ 21,079 435,876 -- --
Reinvestment of Dividends and
Distributions ....................... 315 6,409 76 1,522
Cost of Shares Redeemed ................ (3,875) (77,229) (7,134) (140,759)
----------- ----------- ----------- -----------
Total Fiduciary Share
Transactions ..................... 26,114 544,481 (465) 3,588
----------- ----------- ----------- -----------
Class A Shares:
Proceeds from Shares Issued ............ 84,213 1,725,354 251,627 5,263,068
Subscriptions from Reorganizations
Class A (Note 8) .................... 152,654 3,154,388 -- --
Reinvestment of Dividends and
Distributions ....................... 11,161 224,495 9,003 183,924
Cost of Shares Redeemed ................ (328,176) (6,772,765) (331,912) (6,838,965)
----------- ----------- ----------- -----------
Total Class A Share Transactions .... (80,148) (1,668,528) (71,282) (1,391,973)
----------- ----------- ----------- -----------
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 ............ 97,258 2,004,740 132,589 2,737,277
Subscriptions from Reorganizations
Class C (Note 8) .................... 270,025 5,520,422 -- --
Reinvestment of Dividends and
Distributions ....................... 2,214 44,166 246 5,097
Cost of Shares Redeemed ................ (242,227) (4,943,912) (174,017) (3,558,043)
----------- ----------- ----------- -----------
Total Class C Share Transactions .... 127,270 2,625,416 (41,182) (815,669)
----------- ----------- ----------- -----------
Net Increase (Decrease) from Capital
Stock Activity ...................... 73,236 $ 1,501,369 (112,929) $(2,204,054)
=========== =========== =========== ===========
TACTICAL GROWTH & INCOME ALLOCATION FUND
-----------------------------------------------------
2012 2011
SHARES DOLLARS SHARES DOLLARS
-----------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ............ 32,515 $ 692,648 44,224 $ 970,704
Subscriptions from Reorganizations
Fiduciary Class (Note 8) ............ 17,234 365,388 -- --
Reinvestment of Dividends and
Distributions ....................... 727 15,297 232 4,986
Cost of Shares Redeemed ................ (66,446) (1,385,918) (3,642) (73,705)
----------- ----------- ----------- -----------
Total Fiduciary Share
Transactions ..................... (15,970) (312,585) 40,814 901,985
----------- ----------- ----------- -----------
Class A Shares:
Proceeds from Shares Issued ............ 197,070 4,053,184 360,708 7,725,982
Subscriptions from Reorganizations
Class A (Note 8) .................... 362,847 7,665,765 -- --
Reinvestment of Dividends and
Distributions ....................... 17,605 369,792 14,438 302,979
Cost of Shares Redeemed ................ (426,998) (8,965,530) (333,709) (7,039,957)
----------- ----------- ----------- -----------
Total Class A Share Transactions .... 150,524 3,123,211 41,437 989,004
----------- ----------- ----------- -----------
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 ............ 135,012 2,830,934 214,856 4,531,850
Subscriptions from Reorganizations
Class C (Note 8) .................... 387,105 8,131,971 -- --
Reinvestment of Dividends and
Distributions ....................... 6,462 134,372 4,390 91,216
Cost of Shares Redeemed ................ (286,994) (5,976,688) (174,572) (3,656,435)
----------- ----------- ----------- -----------
Total Class C Share Transactions .... 241,585 5,120,589 44,674 966,631
----------- ----------- ----------- -----------
Net Increase (Decrease) from Capital
Stock Activity ...................... 376,139 $ 7,931,215 126,925 $ 2,857,620
=========== =========== =========== ===========
Amounts designated as " --" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
134 HIGHMARK(R) FUNDS
BOND FUND
-----------------------------------------------------
2012 2011
SHARES DOLLARS SHARES DOLLARS
-----------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ............ 4,839,535 $55,339,623 5,158,803 $58,522,672
Subscriptions from Reorganizations
Fiduciary Class (Note 8) ............ -- -- -- --
Reinvestment of Dividends and
Distributions ....................... 1,141,202 12,920,986 875,197 9,885,466
Cost of Shares Redeemed ................ (7,397,282) (84,742,988) (5,631,964) (63,951,496)
----------- ----------- ----------- -----------
Total Fiduciary Share
Transactions ..................... (1,416,545) (16,482,379) 402,036 4,456,642
----------- ----------- ----------- -----------
Class A Shares:
Proceeds from Shares Issued ............ 1,753,421 19,643,229 802,116 8,984,591
Subscriptions from Reorganizations
Class A (Note 8) .................... -- -- -- --
Reinvestment of Dividends and
Distributions ....................... 133,793 1,491,921 85,104 946,795
Cost of Shares Redeemed ................ (589,899) (6,635,844) (858,564) (9,566,185)
----------- ----------- ----------- -----------
Total Class A Share Transactions .... 1,297,315 14,499,306 28,656 365,201
----------- ----------- ----------- -----------
Class B Shares:
Proceeds from Shares Issued ............ 14,300 160,520 7,967 89,327
Reinvestment of Dividends and
Distributions ....................... 916 10,153 2,936 32,495
Cost of Shares Redeemed ................ (25,125) (279,879) (102,344) (1,138,194)
----------- ----------- ----------- -----------
Total Class B Share Transactions .... (9,909) (109,206) (91,441) (1,016,372)
----------- ----------- ----------- -----------
Class C Shares:
Proceeds from Shares Issued ............ 863,108 9,655,490 469,376 5,233,750
Subscriptions from Reorganizations
Class C (Note 8) .................... -- -- -- --
Reinvestment of Dividends and
Distributions ....................... 30,323 336,053 17,519 193,808
Cost of Shares Redeemed ................ (210,105) (2,348,437) (167,258) (1,850,147)
----------- ----------- ----------- -----------
Total Class C Share Transactions .... 683,326 7,643,106 319,637 3,577,411
----------- ----------- ----------- -----------
Net Increase (Decrease) from Capital
Stock Activity ...................... 554,187 $ 5,550,827 658,888 $ 7,382,882
=========== =========== =========== ===========
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND
-----------------------------------------------------
2012 2011
SHARES DOLLARS SHARES DOLLARS
-----------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ............ 3,457,438 $36,064,795 4,254,632 $43,276,898
Subscriptions from Reorganizations
Fiduciary Class (Note 8) ............ -- -- -- --
Reinvestment of Dividends and
Distributions ....................... 115,867 1,207,094 102,781 1,038,597
Cost of Shares Redeemed .................. (3,141,157) (32,818,246) (3,207,975) (32,429,167)
----------- ----------- ----------- -----------
Total Fiduciary Share
Transactions ........................ 432,148 4,453,643 1,149,438 11,886,328
----------- ----------- ----------- -----------
Class A Shares:
Proceeds from Shares Issued ............ 3,986,762 41,437,996 4,953,242 49,999,762
Subscriptions from Reorganizations
Class A (Note 8) .................... -- -- -- --
Reinvestment of Dividends and
Distributions ....................... 120,544 1,249,936 134,368 1,352,065
Cost of Shares Redeemed ................ (3,022,819) (31,238,214) (4,864,450) (48,690,431)
----------- ----------- ----------- -----------
Total Class A Share Transactions .... 1,084,487 11,449,718 223,160 2,661,396
----------- ----------- ----------- -----------
Class B Shares:
Proceeds from Shares Issued ............ -- -- 12 122
Reinvestment of Dividends and
Distributions ....................... 34 350 449 4,523
Cost of Shares Redeemed ................ (9,313) (96,406) (53,577) (542,096)
----------- ----------- ----------- -----------
Total Class B Share Transactions .... (9,279) (96,056) (53,116) (537,451)
----------- ----------- ----------- -----------
Class C Shares:
Proceeds from Shares Issued ............ 1,656,902 17,144,885 1,286,266 13,020,136
Subscriptions from Reorganizations
Class C (Note 8) .................... -- -- -- --
Reinvestment of Dividends and
Distributions ....................... 37,642 389,098 29,598 296,522
Cost of Shares Redeemed ................ (570,149) (5,891,685) (522,817) (5,226,377)
----------- ----------- ----------- -----------
Total Class C Share Transactions .... 1,124,395 11,642,298 793,047 8,090,281
----------- ----------- ----------- -----------
Net Increase (Decrease) from Capital
Stock Activity ...................... 2,631,751 $27,449,603 2,112,529 $22,100,554
=========== =========== =========== ===========
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 135
STATEMENTS OF CHANGES IN NET ASSETS - CAPITAL STOCK ACTIVITY
FOR THE YEARS ENDED JULY 31 (UNLESS OTHERWISE INDICATED)
NATIONAL INTERMEDIATE TAX-FREE BOND FUND
---------------------------------------------------------
2012 2011
SHARES DOLLARS SHARES DOLLARS
---------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ..................................... 980,697 $ 11,408,620 1,541,839 $ 17,607,549
Reinvestment of Dividends and Distributions ..................... 35,649 414,753 41,971 476,263
Cost of Shares Redeemed ......................................... (1,793,092) (20,877,538) (1,656,828) (18,753,751)
------------ ------------ ------------ ------------
Total Fiduciary Share Transactions ........................... (776,746) (9,054,165) (73,018) (669,939)
------------ ------------ ------------ ------------
Class A Shares:
Proceeds from Shares Issued ..................................... 495,526 5,774,713 1,183,836 13,475,764
Reinvestment of Dividends and Distributions ..................... 27,317 317,486 28,243 320,793
Cost of Shares Redeemed ......................................... (986,425) (11,520,396) (1,085,272) (12,249,809)
------------ ------------ ------------ ------------
Total Class A Share Transactions ............................. (463,582) (5,428,197) 126,807 1,546,748
------------ ------------ ------------ ------------
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 ..................................... 432,763 5,043,075 232,773 2,662,240
Reinvestment of Dividends and Distributions ..................... 6,827 79,582 4,172 47,354
Cost of Shares Redeemed ......................................... (126,756) (1,478,581) (78,750) (894,682)
------------ ------------ ------------ ------------
Total Class C Share Transactions ............................. 312,834 3,644,076 158,195 1,814,912
------------ ------------ ------------ ------------
Net Increase (Decrease) from Capital Stock Activity ............. (927,494) $(10,838,286) 211,984 $ 2,691,721
============ ============ ============ ============
Amounts designated as "--" are either $0 or have been rounded to $0.
(1) The Fund began issuing Fiduciary Shares on August 3, 2010.
The accompanying notes are an integral part of the financial statements.
136 HIGHMARK(R) FUNDS
SHORT TERM BOND FUND
---------------------------------------------------------
2012 2011
SHARES DOLLARS SHARES DOLLARS
---------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ..................................... 5,304,337 $ 53,415,374 4,176,814 $ 42,189,118
Reinvestment of Dividends and Distributions ..................... 105,759 1,063,159 124,196 1,252,459
Cost of Shares Redeemed ......................................... (3,950,706) (39,773,082) (2,673,363) (26,971,606)
------------ ------------ ------------ ------------
Total Fiduciary Share Transactions ........................... 1,459,390 14,705,451 1,627,647 16,469,971
------------ ------------ ------------ ------------
Class A Shares:
Proceeds from Shares Issued ..................................... 2,172,579 21,853,127 1,734,488 17,495,454
Reinvestment of Dividends and Distributions ..................... 40,264 404,419 39,008 392,879
Cost of Shares Redeemed ......................................... (1,472,797) (14,796,441) (1,595,156) (16,090,113)
------------ ------------ ------------ ------------
Total Class A Share Transactions ............................. 740,046 7,461,105 178,340 1,798,220
------------ ------------ ------------ ------------
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 ..................................... 1,027,060 10,451,859 1,091,164 11,140,438
Reinvestment of Dividends and Distributions ..................... 22,220 225,818 24,988 254,743
Cost of Shares Redeemed ......................................... (693,620) (7,051,387) (790,260) (8,054,136)
------------ ------------ ------------ ------------
Total Class C Share Transactions ............................. 355,660 3,626,290 325,892 3,341,045
------------ ------------ ------------ ------------
Net Increase (Decrease) from Capital Stock Activity ............. 2,555,096 $ 25,792,846 2,131,879 $ 21,609,236
============ ============ ============ ============
WISCONSIN TAX-EXEMPT FUND
---------------------------------------------------------
2012 2011(1)
SHARES DOLLARS SHARES DOLLARS
---------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued ..................................... 41,898 $ 450,400 28,157 $ 295,583
Reinvestment of Dividends and Distributions ..................... 954 10,206 212 2,190
Cost of Shares Redeemed ......................................... (5,192) (55,055) (1,211) (12,075)
------------ ------------ ------------ ------------
Total Fiduciary Share Transactions ........................... 37,660 405,551 27,158 285,698
------------ ------------ ------------ ------------
Class A Shares:
Proceeds from Shares Issued ..................................... 1,556,370 16,608,846 881,822 9,177,740
Reinvestment of Dividends and Distributions ..................... 297,974 3,179,979 350,375 3,611,323
Cost of Shares Redeemed ......................................... (930,516) (9,912,519) (2,625,569) (27,023,594)
------------ ------------ ------------ ------------
Total Class A Share Transactions ............................. 923,828 9,876,306 (1,393,372) (14,234,531)
------------ ------------ ------------ ------------
Class B Shares:
Proceeds from Shares Issued ..................................... -- -- 3,434 35,993
Reinvestment of Dividends and Distributions ..................... 1,687 17,960 3,499 36,031
Cost of Shares Redeemed ......................................... (106,909) (1,132,232) (80,178) (820,873)
------------ ------------ ------------ ------------
Total Class B Share Transactions ............................. (105,222) (1,114,272) (73,245) (748,849)
------------ ------------ ------------ ------------
Class C Shares:
Proceeds from Shares Issued ..................................... 712,767 7,625,728 328,526 3,420,852
Reinvestment of Dividends and Distributions ..................... 27,403 292,419 24,648 253,531
Cost of Shares Redeemed ......................................... (167,070) (1,777,073) (274,258) (2,820,013)
------------ ------------ ------------ ------------
Total Class C Share Transactions ............................. 573,100 6,141,074 78,916 854,370
------------ ------------ ------------ ------------
Net Increase (Decrease) from Capital Stock Activity ............. 1,429,366 $ 15,308,659 (1,360,543) $(13,843,312)
============ ============ ============ ============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 137
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
2012 $13.93 $ 0.190 $ 1.214 $ 1.404 $(0.184) $ -- $(0.184) $ --
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) --
CLASS A SHARES
2012 $13.90 $ 0.155 $ 1.214 $ 1.369 $(0.149) $ -- $(0.149) $ --
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) --
CLASS B SHARES
2012 $13.86 $ 0.069 $ 1.208 $ 1.277 $(0.057) $ -- $(0.057) $ --
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) --
CLASS C SHARES
2012 $13.81 $ 0.071 $ 1.206 $ 1.277 $(0.067) $ -- $(0.067) $ --
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) --
--------------------
COGNITIVE VALUE FUND
--------------------
FIDUCIARY SHARES
2012 $11.50 $ 0.060 $(0.001) $ 0.059 $(0.099) $ -- $(0.099) $ --#
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) --#
CLASS A SHARES
2012 $11.51 $ 0.025 $(0.006) $ 0.019 $(0.049) $ -- $(0.049) $ --#
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) --#
CLASS C SHARES
2012 $11.20 $(0.040) $ 0.010 $(0.030) $ -- $ -- $ -- $ --#
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) --#
CLASS M SHARES
2012 $11.51 $ 0.069 $ 0.001 $ 0.070 $(0.110) $ -- $(0.110) $ --#
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) --#
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
2012 $15.15 10.19% $ 16,517 0.99% 1.63% 1.35% 46%
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
CLASS A SHARES
2012 $15.12 9.94% $ 6,591 1.24% 1.88% 1.10% 46%
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
CLASS B SHARES
2012 $15.08 9.23% $ 39 1.84% 2.38% 0.50% 46%
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
CLASS C SHARES
2012 $15.02 9.27% $ 1,330 1.84% 2.38% 0.50% 46%
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
--------------------
COGNITIVE VALUE FUND
--------------------
FIDUCIARY SHARES
2012 $11.46 0.60% $ 5,051 1.16% 1.35% 0.54% 268%
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
CLASS A SHARES
2012 $11.48 0.21% $ 616 1.47% 1.60% 0.23% 268%
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
CLASS C SHARES
2012 $11.17 (0.27)% $ 409 2.07% 2.10% (0.37)% 268%
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
CLASS M SHARES
2012 $11.47 0.71% $ 75,990 1.07% 1.10% 0.63% 268%
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
The accompanying notes are an integral part of the financial statements.
138 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
-----------------------------------------------------------------------------------------------------------------------------------
--------------------
ENHANCED GROWTH FUND
--------------------
FIDUCIARY SHARES
2012 $11.20 $(0.026) $ 0.656 $ 0.630 $ -- $ -- $ -- $--
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
2012 $10.98 $(0.062) $ 0.642 $ 0.580 $ -- $ -- $ -- $--
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) -- -- -- --
CLASS C SHARES
2012 $10.66 $(0.124) $ 0.614 $ 0.490 $ -- $ -- $ -- $--
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) -- -- -- --
CLASS M SHARES
2012 $11.21 $(0.019) $ 0.659 $ 0.640 $ -- $ -- $ -- $--
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) -- -- -- --
------------------
EQUITY INCOME FUND
------------------
FIDUCIARY SHARES
2012 $ 9.21 $ 0.270 $ 0.935 $ 1.205 $(0.265) $ -- $(0.265) $--
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 (2) 6.89 0.003 0.077 0.080 -- -- -- --
CLASS A SHARES
2012 $ 9.18 $ 0.243 $ 0.938 $ 1.181 $(0.241) $ -- $(0.241) $--
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 (3) 7.37 0.150 (0.386) (0.236) (0.164) -- (0.164)++ --
2008 (4) 12.01 0.30^ (4.31) (4.01) (0.28) (0.35) (0.63) --
2007 (4) 11.43 0.29^ 0.85 1.14 (0.26) (0.30) (0.56) --
RATIO
OF EXPENSES
TO AVERAGE RATIO OF
NET NET NET ASSETS NET
ASSET ASSETS, RATIO EXCLUDING INVESTMENT
VALUE, END OF EXPENSES FEE WAIVERS INCOME (L0SS) PORTFOLIO
END TOTAL OF PERIOD TO AVERAGE AND REDUCTION TO AVERAGE TURNOVER
OF PERIOD RETURN** (000) NET ASSETS OF EXPENSES NET ASSETS RATE
-------------------------------------------------------------------------------------------------------------------
--------------------
ENHANCED GROWTH FUND
--------------------
FIDUCIARY SHARES
2012 $11.83 5.63% $ 2,767 1.11% 1.35% (0.23)% 11%
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
2012 $11.56 5.28% $ 1,398 1.45% 1.60% (0.57)% 11%
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
CLASS C SHARES
2012 $11.15 4.60% $ 119 2.05% 2.10% (1.17)% 11%
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
CLASS M SHARES
2012 $11.85 5.71% $ 76,670 1.05% 1.10% (0.17)% 11%
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
------------------
EQUITY INCOME FUND
------------------
FIDUCIARY SHARES
2012 $10.15 13.38% $ 6,777 0.88% 1.65% 2.87% 79%
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 (2) 6.97 1.16 76 0.90*^^ 2.53*^^ 3.43* 32
CLASS A SHARES
2012 $10.12 13.12% $ 11,519 1.15% 1.90% 2.60% 79%
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 (3) 6.97 (2.93) 11,793 1.16*^^ 2.47*^^ 3.17* 32
2008 (4) 7.37 (34.84) 13,298 1.15 1.68 2.95 83
2007 (4) 12.01 10.23 28,991 1.15 1.42 2.51 85
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, UNLESS OTHERWISE
INDICATED.
++ INCLUDES RETURN OF CAPITAL OF $0.005 FOR CLASS A SHARES.
^ PER SHARE AMOUNTS CALCULATED USING SEC METHOD.
^^ 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.
(1) COMMENCED OPERATIONS ON SEPTEMBER 26, 2007.
(2) COMMENCED OPERATIONS ON JULY 24, 2009.
(3) 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.
(4) FOR THE YEAR ENDED OCTOBER 31.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 139
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 (CONTINUED)
------------------------------
CLASS B SHARES
2012 $ 9.21 $ 0.186 $0.945 $ 1.131 $(0.181) $ -- $(0.181) $ --
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 (1) 7.35 0.116 (0.368) (0.252) (0.108) -- (0.108)++ --
2008 (2) 11.95 0.24^ (4.33) (4.09) (0.16) (0.35) (0.51) --
2007 (2) 11.38 0.22^ 0.83 1.05 (0.20) (0.28) (0.48) --
CLASS C SHARES
2012 $ 9.14 $ 0.186 $0.930 $ 1.116 $(0.186) $ -- $(0.186) $ --
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 (1) 7.33 0.115 (0.379) (0.264) (0.126) -- (0.126)++ --
2008 (2) 11.95 0.21^ (4.28) (4.07) (0.20) (0.35) (0.55) --
2007 (2) 11.40 0.22^ 0.82 1.04 (0.21) (0.28) (0.49) --
--------------------------
GENEVA MID CAP GROWTH FUND
--------------------------
FIDUCIARY SHARES
2012 $22.85 $(0.147) $1.209 $ 1.062 $ -- $(0.452) $(0.452) $ --
2011 17.98 (0.151) 5.050 4.899 -- (0.029) (0.029) --
2010 15.04 (0.110) 3.050 2.940 -- -- -- --
2009 (3) 14.07 (0.006) 0.976 0.970 -- -- -- --
CLASS A SHARES
2012 $22.71 $(0.204) $1.206 $ 1.002 $ -- $(0.452) $(0.452) $ --
2011 17.92 (0.200) 5.019 4.819 -- (0.029) (0.029) --
2010 15.03 (0.152) 3.042 2.890 -- -- -- --
2009 (1) 13.53 (0.103) 1.603 1.500 -- -- -- --
2008 (2) 21.80 (0.17)^ (6.94) (7.11) -- (1.16) (1.16) --
2007 (2) 18.37 (0.18)^ 3.68 3.50 -- (0.07) (0.07) --
CLASS B SHARES
2012 $20.70 $(0.308) $1.090 $ 0.782 $ -- $(0.452) $(0.452) $ --
2011 16.44 (0.299) 4.588 4.289 -- (0.029) (0.029) --
2010 13.87 (0.233) 2.803 2.570 -- -- -- --
2009 (1) 12.55 (0.158) 1.478 1.320 -- -- -- --
2008 (2) 20.45 (0.34)^ (6.40) (6.74) -- (1.16) (1.16) --
2007 (2) 17.37 (0.38)^ 3.53 3.15 -- (0.07) (0.07) --
CLASS C SHARES
2012 $20.96 $(0.316) $1.098 $ 0.782 $ -- $(0.452) $(0.452) $ --
2011 16.64 (0.307) 4.656 4.349 -- (0.029) (0.029) --
2010 14.04 (0.237) 2.837 2.600 -- -- -- --
2009 (1) 12.70 (0.160) 1.500 1.340 -- -- -- --
2008 (2) 20.69 (0.28)^ (6.55) (6.83) -- (1.16) (1.16) --
2007 (2) 17.57 (0.31)^ 3.50 3.19 -- (0.07) (0.07) --
----------------------------
GENEVA SMALL CAP GROWTH FUND
----------------------------
FIDUCIARY SHARES
2012 $31.04 $(0.303) $1.820 $ 1.517 $ -- $(0.928) $(0.928) $0.001
2011 24.45 (0.309) 7.926 7.617 -- (1.027) (1.027) --#
2010 20.70 (0.204) 3.954 3.750 -- -- -- --#
2009 (4) 20.00 (0.018) 0.718 0.700 -- -- -- --
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 (CONTINUED)
------------------------------
CLASS B SHARES
2012 $10.16 12.47% $ 1,278 1.75% 2.40% 2.00% 79%
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 (1) 6.99 (3.24) 2,341 1.87*~ 3.17*~ 2.45* 32
2008 (2) 7.35 (35.44) 3,121 1.90 2.42 2.23 83
2007 (2) 11.95 9.41 8,590 1.90 2.16 1.87 85
CLASS C SHARES
2012 $10.07 12.40% $ 2,673 1.75% 2.40% 2.00% 79%
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 (1) 6.94 (3.39) 2,832 1.87*~ 3.17*~ 2.45* 32
2008 (2) 7.33 (35.38) 4,057 1.90 2.44 2.18 83
2007 (2) 11.95 9.39 7,171 1.90 2.16 1.81 85
--------------------------
GENEVA MID CAP GROWTH FUND
--------------------------
FIDUCIARY SHARES
2012 $23.46 4.70% $431,911 1.13% 1.26% (0.63)% 17%
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 (3) 15.04 6.89 1,459 1.13*~ 1.25*~ (0.50)* 24
CLASS A SHARES
2012 $23.26 4.46% $346,312 1.38% 1.51% (0.88)% 17%
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 (1) 15.03 11.16 148,670 1.70*~ 1.72*~ (1.07)* 24
2008 (2) 13.53 (34.29) 132,592 1.38 1.38 (0.91) 22
2007 (2) 21.80 19.11 211,653 1.37 1.37 (0.90) 36
CLASS B SHARES
2012 $21.03 3.77% $ 3,559 1.98% 2.01% (1.48)% 17%
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 (1) 13.87 10.52 7,420 2.42*~ 2.42*~ (1.78)* 24
2008 (2) 12.55 (34.77) 8,143 2.13 2.13 (1.66) 22
2007 (2) 20.45 18.19 17,627 2.11 2.11 (1.65) 36
CLASS C SHARES
2012 $21.29 3.77% $ 67,244 1.98% 2.01% (1.48)% 17%
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 (1) 14.04 10.55 14,708 2.42*~ 2.42*~ (1.79)* 24
2008 (2) 12.70 (34.80) 14,433 2.13 2.13 (1.66) 22
2007 (2) 20.69 18.21 21,790 2.12 2.12 (1.65) 36
----------------------------
GENEVA SMALL CAP GROWTH FUND
----------------------------
FIDUCIARY SHARES
2012 $31.63 4.99% $ 25,371 1.35% 1.82% (0.99)% 45%
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 (4) 20.70 3.50 1,598 1.37* 8.34* (0.73)* 7
The accompanying notes are an integral part of the financial statements.
140 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 SMALL CAP GROWTH FUND (CONTINUED)
---------------------------------------
CLASS A SHARES
2012 $30.87 $(0.382) $ 1.799 $ 1.417 $ -- $(0.928) $(0.928) $0.001
2011 24.39 (0.392) 7.899 7.507 -- (1.027) (1.027) --#
2010 20.70 (0.264) 3.954 3.690 -- -- -- --#
2009 (4) 20.00 (0.025) 0.725 0.700 -- -- -- --
CLASS C SHARES
2012 $30.49 $(0.557) $ 1.774 $ 1.217 $ -- $(0.928) $(0.928) $0.001
2011 24.23 (0.580) 7.867 7.287 -- (1.027) (1.027) --#
2010 20.69 (0.401) 3.941 3.540 -- -- -- --#
2009 (4) 20.00 (0.039) 0.729 0.690 -- -- -- --
--------------------------------
INTERNATIONAL OPPORTUNITIES FUND
--------------------------------
FIDUCIARY SHARES
2012 $ 7.46 $ 0.139 $(1.155) $(1.016) $(0.184) $ -- $(0.184) $ --#
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) --#
CLASS A SHARES
2012 $ 7.45 $ 0.128 $(1.147) $(1.019) $(0.161) $ -- $(0.161) $ --#
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) --#
CLASS C SHARES
2012 $ 7.37 $ 0.085 $(1.132) $(1.047) $(0.103) $ -- $(0.103) $ --#
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) --#
CLASS M SHARES
2012 $ 7.47 $ 0.148 $(1.161) $(1.013) $(0.197) $ -- $(0.197) $ --#
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) --#
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 SMALL CAP GROWTH FUND (CONTINUED)
----------------------------------------
CLASS A SHARES
2012 $31.36 4.69% $ 9,925 1.62% 2.07% (1.26)% 45%
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 (4) 20.70 3.50 1,988 1.62* 8.59* (0.98)* 7
CLASS C SHARES
2012 $30.78 4.09% $ 3,799 2.22% 2.57% (1.86)% 45%
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 (4) 20.69 3.45 36 2.22* 9.09* (1.58)* 7
--------------------------------
INTERNATIONAL OPPORTUNITIES FUND
--------------------------------
FIDUCIARY SHARES
2012 $ 6.26 (13.35)% $ 62,889 1.31% 1.42% 2.21% 102%
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
CLASS A SHARES
2012 $ 6.27 (13.57)% $ 3,307 1.49% 1.67% 2.04% 102%
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
CLASS C SHARES
2012 $ 6.22 (14.07)% $ 1,182 2.17% 2.17% 1.36% 102%
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
CLASS M SHARES
2012 $ 6.26 (13.28)% $123,439 1.17% 1.17% 2.36% 102%
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
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 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 $0.004 FOR CLASS B SHARES AND CLASS C
SHARES.
^ PER SHARE AMOUNTS CALCULATED USING SEC METHOD.
(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 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.
(2) FOR THE YEAR ENDED OCTOBER 31.
(3) COMMENCED OPERATIONS ON JUNE 26, 2009.
(4) COMMENCED OPERATIONS ON JUNE 12, 2009.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 141
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
------------------------------------------------------------------------------------------------------------------------------------
--------------------------
LARGE CAP CORE EQUITY FUND
--------------------------
FIDUCIARY SHARES
2012 $ 8.49 $ 0.087 $ 0.702 $ 0.789 $(0.089) $ -- $(0.089) $ --
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) --
CLASS A SHARES
2012 $ 8.47 $ 0.062 $ 0.704 $ 0.766 $(0.066) $ -- $(0.066) $ --
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) --
CLASS C SHARES
2012 $ 8.24 $ 0.010 $ 0.685 $ 0.695 $(0.015) $ -- $(0.015) $ --
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) --
--------------------------
LARGE CAP GROWTH FUND
--------------------------
FIDUCIARY SHARES
2012 $10.31 $ 0.045 $ 1.112 $ 1.157 $(0.017) $ -- $(0.017) $ --
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) --
CLASS A SHARES
2012 $10.12 $ 0.018 $ 1.092 $ 1.110 $ -- $ -- $ -- $ --
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) --
CLASS B SHARES
2012 $ 9.47 $(0.040) $ 1.020 $ 0.980 $ -- $ -- $ -- $ --
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) -- -- -- --
CLASS C SHARES
2012 $ 9.38 $(0.041) $ 1.011 $ 0.970 $ -- $ -- $ -- $ --
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) -- -- -- --
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 CORE EQUITY FUND
--------------------------
FIDUCIARY SHARES
2012 $ 9.19 9.39% $ 59,041 0.93% 1.28% 1.02% 78%###
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
CLASS A SHARES
2012 $ 9.17 9.12% $ 3,538 1.23% 1.53% 0.72% 78%###
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
CLASS C SHARES
2012 $ 8.92 8.47% $ 765 1.83% 2.03% 0.12% 78%###
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
----------------------
LARGE CAP GROWTH FUND
----------------------
FIDUCIARY SHARES
2012 $11.45 11.25% $ 53,070 1.01% 1.27% 0.43% 53%
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
CLASS A SHARES
2012 $11.23 10.97% $ 16,722 1.27% 1.52% 0.17% 53%
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
CLASS B SHARES
2012 $10.45 10.35% $ 664 1.87% 2.02% (0.43)% 53%
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
CLASS C SHARES
2012 $10.35 10.34% $ 2,629 1.87% 2.02% (0.43)% 53%
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
The accompanying notes are an integral part of the financial statements.
142 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
------------------------------------------------------------------------------------------------------------------------------------
-----------------------------
NYSE ARCA TECH 100 INDEX FUND
-----------------------------
FIDUCIARY SHARES
2012 $32.26 $ 0.065 $ 2.305 $ 2.370 $ -- $ -- $ -- $ --
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
2012 $32.07 $(0.024) $ 2.294 $ 2.270 $ -- $ -- $ -- $ --
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 -- -- -- --
CLASS B SHARES
2012 $29.05 $(0.196) $ 2.066 $ 1.870 $ -- $ -- $ -- $ --
2011 23.35 (0.206) 5.906 5.700 -- -- -- --
2010 20.22 (0.191) 3.321 3.130 -- -- -- --
2009 (2) 17.08 (0.115) 3.255 3.140 -- -- -- --
2008 (3) 27.06 (0.37)^^ (9.61) (9.98) -- -- -- --
2007 (3) 23.09 (0.37)^^ 4.34 3.97 -- -- -- --
CLASS C SHARES
2012 $29.58 $(0.201) $ 2.111 $ 1.910 $ -- $ -- $ -- $ --
2011 23.78 (0.212) 6.012 5.800 -- -- -- --
2010 20.59 (0.196) 3.386 3.190 -- -- -- --
2009 (2) 17.39 (0.117) 3.317 3.200 -- -- -- --
2008 (3) 27.55 (0.30)^^ (9.86) (10.16) -- -- -- --
2007 (3) 23.51 (0.32)^^ 4.36 4.04 -- -- -- --
-------------------
SMALL CAP CORE FUND
-------------------
FIDUCIARY SHARES
2012 $19.24 $ 0.005 $(0.045) $(0.040) $ -- $ -- $ -- $ --+++
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) --
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
-----------------------------
FIDUCIARY SHARES
2012 $34.63 7.35% $ 7,576 0.81% 1.02% 0.20% 30%
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
2012 $34.34 7.05% $ 170,516 1.08% 1.27% (0.07)% 30%
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
CLASS B SHARES
2012 $30.92 6.40% $ 3,857 1.68% 1.77% (0.67)% 30%
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 (2) 20.22 18.38 14,422 1.99*~# 2.11*~ (0.92)*# 10
2008 (3) 17.08 (36.88) 17,314 1.82++ 1.82 (1.10)++ 19
2007 (3) 27.06 17.19 54,103 1.74++ 1.74 (1.20)++ 14
CLASS C SHARES
2012 $31.49 6.42% $ 11,111 1.68% 1.77% (0.67)% 30%
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 (2) 20.59 18.40 10,620 1.99*~# 2.11*~ (0.92)*# 10
2008 (3) 17.39 (36.88) 12,839 1.82++ 1.82 (1.12)++ 19
2007 (3) 27.55 17.18 26,946 1.74++ 1.74 (1.20)++ 14
-------------------
SMALL CAP CORE FUND
-------------------
FIDUCIARY SHARES
2012 $19.20 (0.21)% $ 46,391 1.33% 1.71% 0.03% 106%###
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
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%.
^ INCLUDES $0.017 OF FAIR FUNDS SETTLEMENT.
^^ PER SHARE AMOUNTS CALCULATED USING SEC METHODS.
### Portfolio turnover excludes the purchases and sales of the Merging Funds.
If these transactions were included, portfolio turnover would have been
higher.
(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.
HIGHMARK(R) FUNDS 143
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
------------------------------------------------------------------------------------------------------------------------------------
-------------------------------
SMALL CAP CORE FUND (CONTINUED)
-------------------------------
CLASS A SHARES
2012 $19.09 $(0.049) $(0.041) $(0.090) $ -- $ -- $ -- $ --++
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) --
CLASS C SHARES
2012 $18.65 $(0.156) $(0.044) $(0.200) $ -- $ -- $ -- $ --++
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) --
----------
VALUE FUND
----------
FIDUCIARY SHARES
2012 $16.09 $ 0.220 $ 0.275 $ 0.495 $(0.222) $(0.653) $(0.875) $ --
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) --
CLASS A SHARES
2012 $16.05 $ 0.182 $ 0.271 $ 0.453 $(0.180) $(0.653) $(0.833) $ --
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) --
CLASS B SHARES
2012 $15.69 $ 0.089 $ 0.270 $ 0.359 $(0.076) $(0.653) $(0.729) $ --
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
2012 $15.63 $ 0.089 $ 0.268 $ 0.357 $(0.084) $(0.653) $(0.737) $ --
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) --
CLASS U SHARES
2012 (1) $14.85 $ 0.142 $ 0.852 $ 0.994 $(0.124) $ -- $(0.124) $ --
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
-------------------------------------------------------------------------------------------------------------------
-------------------------------
SMALL CAP CORE FUND (CONTINUED)
-------------------------------
CLASS A SHARES
2012 $19.00 (0.52)% $ 10,869 1.62% 1.96% (0.27)% 106%###
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
CLASS C SHARES
2012 $18.45 (1.07)% $ 3,813 2.22% 2.46% (0.87)% 106%###
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
----------
VALUE FUND
----------
FIDUCIARY SHARES
2012 $15.71 3.50% $ 147,101 1.00% 1.14% 1.46% 44%###
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
CLASS A SHARES
2012 $15.67 3.28% $ 83,339 1.26% 1.39% 1.20% 44%###
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
CLASS B SHARES
2012 $15.32 2.70% $ 1,164 1.86% 1.89% 0.60% 44%###
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
2012 $15.25 2.70% $ 3,792 1.86% 1.89% 0.60% 44%###
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
CLASS U SHARES
2012 (1) $15.72 6.70% $ 99,930 0.86%* 0.89%* 1.60%* 44%###
The accompanying notes are an integral part of the financial statements.
144 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
------------------------------------------------------------------------------------------------------------------------------------
---------------------------------------
TACTICAL CAPITAL GROWTH ALLOCATION FUND
---------------------------------------
FIDUCIARY SHARES
2012 $21.37 $ 0.235 $ 0.130 $ 0.365 $(0.245) $ -- $(0.245) $ --
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) --
CLASS A SHARES
2012 $21.34 $ 0.180 $ 0.131 $ 0.311 $(0.191) $ -- $(0.191) $ --
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) --
CLASS C SHARES
2012 $21.10 $ 0.036 $ 0.131 $ 0.167 $(0.047) $ -- $(0.047) $ --
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) --
----------------------------------------
TACTICAL GROWTH & INCOME ALLOCATION FUND
----------------------------------------
FIDUCIARY SHARES
2012 $21.73 $ 0.310 $ 0.250 $ 0.560 $(0.320) $ -- $(0.320) $ --
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) --
CLASS A SHARES
2012 $21.65 $ 0.256 $ 0.250 $ 0.506 $(0.266) $ -- $(0.266) $ --
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) --
CLASS C SHARES
2012 $21.52 $ 0.108 $ 0.255 $ 0.363 $(0.123) $ -- $(0.123) $ --
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) --
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
-------------------------------------------------------------------------------------------------------------------
---------------------------------------
TACTICAL CAPITAL GROWTH ALLOCATION FUND
---------------------------------------
FIDUCIARY SHARES
2012 $21.49 1.79% $ 775 0.32% 0.95% 1.13% 40%###
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
CLASS A SHARES
2012 $21.46 1.52% $24,754 0.58% 1.20% 0.87% 40%###
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
CLASS C SHARES
2012 $21.22 0.80% $20,476 1.28% 1.70% 0.17% 40%###
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
----------------------------------------
TACTICAL GROWTH & INCOME ALLOCATION FUND
----------------------------------------
FIDUCIARY SHARES
2012 $21.97 2.65% $ 692 0.33% 0.87% 1.46% 49%###
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
CLASS A SHARES
2012 $21.89 2.40% $34,053 0.58% 1.12% 1.21% 49%###
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
CLASS C SHARES
2012 $21.76 1.67% $25,821 1.28% 1.62% 0.51% 49%###
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
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.
+ PER SHARE AMOUNTS CALCULATED USING AVERAGE SHARES METHOD, UNLESS OTHERWISE
INDICATED.
++ AMOUNT REPRESENTS LESS THAN $0.001.
# RATIOS DO NOT INCLUDE INCOME AND EXPENSES OF THE UNDERLYING FUNDS IN WHICH
THE FUND INVESTS FOR THE TACTICAL CAPITAL GROWTH ALLOCATION FUND AND
TACTICAL GROWTH & INCOME ALLOCATION FUND.
### Portfolio turnover excludes the purchases and sales of the Merging Funds.
If these transactions were included, portfolio turnover would have been
higher.
(1) COMMENCED OPERATIONS ON JANUARY 4, 2012.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 145
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
------------------------------------------------------------------------------------------------------------------------------------
---------
BOND FUND
---------
FIDUCIARY SHARES
2012 $11.46 $0.377 $ 0.408 $0.785 $(0.388) $(0.237) $(0.625) $ --
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) --
CLASS A SHARES
2012 $11.28 $0.342 $ 0.395 $0.737 $(0.360) $(0.237) $(0.597) $ --
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) --
CLASS B SHARES
2012 $11.23 $0.265 $ 0.401 $0.666 $(0.279) $(0.237) $(0.516) $ --
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) --
CLASS C SHARES
2012 $11.22 $0.292 $ 0.397 $0.689 $(0.312) $(0.237) $(0.549) $ --
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) --
------------------------------------------
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND
------------------------------------------
FIDUCIARY SHARES
2012 $10.19 $0.266 $ 0.412 $0.678 $(0.268) $ -- $(0.268) $ --
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) --
CLASS A SHARES
2012 $10.14 $0.238 $ 0.405 $0.643 $(0.243) $ -- $(0.243) $ --
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) --
CLASS C SHARES
2012 $10.10 $0.190 $ 0.407 $0.597 $(0.197) $ -- $(0.197) $ --
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) --
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
-------------------------------------------------------------------------------------------------------------------
---------
BOND FUND
---------
FIDUCIARY SHARES
2012 $11.62 7.11% $ 325,475 0.74% 1.00% 3.30% 44%
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
CLASS A SHARES
2012 $11.42 6.87% $ 44,659 0.99% 1.25% 3.05% 44%
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
CLASS B SHARES
2012 $11.38 6.13% $ 218 1.67% 1.75% 2.37% 44%
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
CLASS C SHARES
2012 $11.36 6.36% $ 15,638 1.42% 1.50% 2.62% 44%
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
------------------------------------------
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND
------------------------------------------
FIDUCIARY SHARES
2012 $10.60 6.73% $ 133,143 0.54% 1.02% 2.55% 34%
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
CLASS A SHARES
2012 $10.54 6.40% $ 92,570 0.79% 1.27% 2.30% 34%
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
CLASS C SHARES
2012 $10.50 5.96% $ 35,519 1.24% 1.52% 1.85% 34%
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
The accompanying notes are an integral part of the financial statements.
146 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
--------------------------------------------------------------------------------------------------------------------------------
----------------------------------------
NATIONAL INTERMEDIATE TAX-FREE BOND FUND
----------------------------------------
FIDUCIARY SHARES
2012 $11.43 $0.315 $ 0.348 $0.663 $(0.313) $ -- $(0.313) $ --
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) --
CLASS A SHARES
2012 $11.42 $0.286 $ 0.358 $0.644 $(0.284) $ -- $(0.284) $ --
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) --
CLASS C SHARES
2012 $11.43 $0.233 $ 0.359 $0.592 $(0.232) $ -- $(0.232) $ --
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) --
--------------------
SHORT TERM BOND FUND
--------------------
FIDUCIARY SHARES
2012 $10.10 $0.199 $ 0.055 $0.254 $(0.224) $ -- $(0.224) $ --
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) --
CLASS A SHARES
2012 $10.09 $0.172 $ 0.044 $0.216 $(0.196) $ -- $(0.196) $ --
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) --
CLASS C SHARES
2012 $10.21 $0.128 $ 0.052 $0.180 $(0.150) $ -- $(0.150) $ --
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) --
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
------------------------------------------------------------------------------------------------------------------
----------------------------------------
NATIONAL INTERMEDIATE TAX-FREE BOND FUND
----------------------------------------
FIDUCIARY SHARES
2012 $11.78 5.87% $ 73,230 0.52% 1.08% 2.71% 20%
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
CLASS A SHARES
2012 $11.78 5.70% $ 18,950 0.77% 1.33% 2.46% 20%
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
CLASS C SHARES
2012 $11.79 5.22% $ 7,978 1.22% 1.58% 2.01% 20%
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
--------------------
SHORT TERM BOND FUND
--------------------
FIDUCIARY SHARES
2012 $10.13 2.55% $102,449 0.61% 0.97% 1.98% 45%
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
CLASS A SHARES
2012 $10.11 2.18% $ 31,888 0.88% 1.22% 1.71% 45%
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
CLASS C SHARES
2012 $10.24 1.79% $ 24,569 1.33% 1.47% 1.26% 45%
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
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 BEEN ANNUALIZED.
+ PER SHARE AMOUNTS CALCULATED USING AVERAGE SHARES 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.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 147
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
--------------------------------------------------------------------------------------------------------------------------------
-------------------------
WISCONSIN TAX-EXEMPT FUND
-------------------------
FIDUCIARY SHARES
2012 $10.37 $0.360 $ 0.515 $0.875 $(0.365) $ -- $(0.365) $--
2011 (1) 10.52 0.384 (0.127) 0.257 (0.395) (0.012) (0.407) --
CLASS A SHARES
2012 $10.37 $0.338 $ 0.511 $0.849 $(0.339) $ -- $(0.339) $--
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 (2) 9.61 0.267 0.481 0.748 (0.258) -- (0.258) --
2008 (3) 10.35 0.37^ (0.74) (0.37) (0.37) -- (0.37) --
2007 (3) 10.49 0.37^ (0.14) 0.23 (0.37) -- (0.37) --
CLASS B SHARES
2012 $10.36 $0.264 $ 0.517 $0.781 $(0.261) $ -- $(0.261) $--
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 (2) 9.60 0.212 0.482 0.694 (0.204) -- (0.204) --
2008 (3) 10.34 0.29^ (0.74) (0.45) (0.29) -- (0.29) --
2007 (3) 10.48 0.29^ (0.14) 0.15 (0.29) -- (0.29) --
CLASS C SHARES
2012 $10.36 $0.288 $ 0.513 $0.801 $(0.291) $ -- $(0.291) $--
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 (2) 9.60 0.216 0.481 0.697 (0.207) -- (0.207) --
2008 (3) 10.34 0.29^ (0.74) (0.45) (0.29) -- (0.29) --
2007 (3) 10.48 0.30^ (0.15) 0.15 (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
------------------------------------------------------------------------------------------------------------------
-------------------------
WISCONSIN TAX-EXEMPT FUND
-------------------------
FIDUCIARY SHARES
2012 $10.88 8.57% $ 705 0.65% 1.06% 3.42% 13%
2011 (1) 10.37 2.45 282 0.65* 1.06* 3.78* 10
CLASS A SHARES
2012 $10.88 8.30% $146,649 0.90% 1.31% 3.17% 13%
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 (2) 10.10 7.76 140,399 1.03* 1.28* 3.61* 9
2008 (3) 9.61 (3.72) 143,533 0.95 1.06 3.59 9
2007 (3) 10.35 2.24 157,899 0.99 1.04 3.56 9
CLASS B SHARES
2012 $10.88 7.62% $ 1,060 1.60% 1.81% 2.47% 13%
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 (2) 10.09 7.18 3,142 1.77* 1.98* 2.87* 9
2008 (3) 9.60 (4.43) 3,319 1.70 1.81 2.84 9
2007 (3) 10.34 1.51 3,562 1.74 1.79 2.81 9
CLASS C SHARES
2012 $10.87 7.82% $ 17,595 1.35% 1.56% 2.71% 13%
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 (2) 10.09 7.22 6,406 1.72* 1.93* 2.92* 9
2008 (3) 9.60 (4.33) 6,009 1.70 1.81 2.84 9
2007 (3) 10.34 1.51 6,640 1.74 1.79 2.81 9
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.
+ PER SHARE AMOUNTS CALCULATED USING AVERAGE SHARES METHOD, UNLESS OTHERWISE
INDICATED.
^ PER SHARE AMOUNTS CALCULATED USING SEC METHOD.
(1) COMMENCED OPERATIONS ON AUGUST 3, 2010.
(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.
148 HIGHMARK(R) FUNDS
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2012
1. ORGANIZATION
HighMark(R) Funds ("HighMark" or the "Trust") was organized as a Massachusetts
business trust under a Declaration of Trust dated March 10, 1987.
HighMark is registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), as an open-end investment company with twenty-six separate funds.
All the series of Highmark Funds included in the Trust, except for Wisconsin
Tax-Exempt Fund, are diversified investment companies. The following funds of
the Trust are included in these financial statements: Balanced Fund, Cognitive
Value Fund, Enhanced Growth Fund, Equity Income Fund, Geneva Mid Cap Growth
Fund, Geneva Small Cap Growth Fund, International Opportunities Fund, Large Cap
Core Equity Fund (formerly Core Equity Fund), Large Cap Growth Fund, NYSE Arca
Tech 100 Index Fund, Small Cap Core Fund (formerly Small Cap Advantage Fund),
Value Fund (formerly 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"), Tactical Capital Growth Allocation
Fund (formerly Capital Growth Allocation Fund) and Tactical Growth & Income
Allocation Fund (formerly Growth & Income 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 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.
Effective March 26, 2012, Class B Shares of Large Cap Core Equity Fund and
California Intermediate Tax-Free Bond Fund were terminated, and any outstanding
Class B Shares of such Funds were converted into Class A Shares of such Funds as
of such date.
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
HIGHMARK(R) FUNDS 149
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JULY 31, 2012
has been de-listed from a national exchange; the security's primary trading
market is temporarily closed at a time when under normal conditions it would be
open; the security has not been traded for a significant amount of time; or the
security's primary pricing source is not able or willing to provide a price.
When a security is valued in accordance with the Fair Value Procedures, the
Committee will determine the value after taking into consideration relevant
information reasonably available to the Committee.
For securities held by the Funds that principally trade on a foreign market or
exchange, a significant gap in time can exist between the time of a particular
security's last trade and the time at which the Fund calculates its net asset
value. The closing prices of securities may no longer reflect their market value
at the time the Fund calculates its net asset value if an event that could
materially affect the value of those securities (a "Significant Event") has
occurred between the time of the security's last close and the time that the
Fund calculates its net asset value. A Significant Event may relate to a single
issuer or to an entire market sector. If HighMark Capital Management, Inc. (the
"Adviser" or the "Administrator"), a wholly owned subsidiary of Union Bank, N.A.
(the "Bank") (a wholly owned subsidiary of UnionBanCal Corporation), or the
sub-adviser of a Fund becomes aware of a Significant Event that has occurred
with respect to a security or group of securities after the closing of the
exchange or market on which the security or securities principally trade, but
before the time at which the Fund calculates its net asset value, it shall
request that a Committee meeting be called.
The International Opportunities Fund also uses a third-party fair valuation
vendor. The vendor provides a fair value for foreign securities held by the Fund
based on certain factors and methodologies (involving, generally, tracking
valuation correlations between the U.S. market and each non-U.S. security).
Values from the fair value vendor are applied in the event that there is a
movement in the U.S. market that exceeds a specific threshold that has been
established by the Committee. The Committee has also established a "confidence
interval", which is used to determine the level of historical correlation
between the value of a specific foreign security and movements in the U.S.
market. In the event that the threshold established by the Committee is exceeded
on a specific day, the Fund will value the non-U.S. securities in its portfolio
that exceed the applicable "confidence interval" based upon the adjusted prices
provided by the fair valuation vendor.
FAIR VALUE MEASUREMENTS -- The inputs and valuations techniques used to measure
fair value of the Funds' net assets are summarized into three levels as
described in the hierarchy below:
o Level 1 - unadjusted quoted prices in active markets for identical
assets or liabilities
o Level 2 - other significant observable inputs (including quoted
prices for similar securities, interest rates, prepayment
speeds, credit risk, etc.)
o Level 3 - significant unobservable inputs (including the Fund's own
assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities.
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. For the
year ended July 31, 2012, there were no Level 3 transfers.
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.
Certain foreign equity securities that are fair value adjusted through an
independent pricing service, which considers statistically relevant trading
patterns, may periodically move from input valuation Level 2 to input valuation
Level 1 when not meeting the fair value adjustment trigger requirements. The
International Opportunities Fund and the Value Fund held securities valued at
$91,637,766 and $7,968,228, respectively, as of July 31, 2011 that were
transferred from Level 1 to Level 2 of the valuation hierarchy during the fiscal
year ended July 31, 2012. The common stocks transferred from Level 1 to Level 2
did so as a result of foreign equities that were valued based on quoted prices
as of July 31, 2011 that are now being fair value adjusted as of July 31,2012.
The value of securities held by the International Opportunities Fund and the
Value Fund that was transferred to Level 2 as of July 31, 2012 is $76,833,761
and $6,031,652, respectively.
A summary of the levels for each of the Fund's investments as of July 31, 2012
is included with each Fund's schedule of investments.
150 HIGHMARK(R) FUNDS
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 spot or forward contracts are extinguished. Unrealized gains or losses
on outstanding positions in spot and forward foreign currency contracts held at
the close of the period are recognized as ordinary income or loss for federal
income tax purposes. The International Opportunities Fund could be exposed to
risk if the counterparties to the contracts are unable to meet the terms of the
contract and from unanticipated movements in the value of a foreign currency
relative to the U.S. dollar. Also, the risk exists that losses could exceed
amounts disclosed on the statement of assets and liabilities. The only Fund to
have engaged in foreign currency contracts was the International Opportunities
Fund. During the year ended July 31, 2012, the average number of foreign
currency contracts outstanding held by the International Opportunities Fund,
based on a quarterly average was 1. The unrealized appreciation and depreciation
on foreign currency contracts at July 31, 2012, and the net realized gain (loss)
and change in unrealized appreciation (depreciation) on foreign currency
contracts for the year ended July 31, 2012, 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 counterparty enters
an insolvency proceeding, realization of the collateral by a Fund may be delayed
or limited. Repurchase agreements held by the Funds are generally backed by U.S.
Treasury and U.S. Government agency obligations except when the Funds enter into
repurchase agreements in connection with the reinvestment of security lending
collateral, in which case, corporate obligations may also be used as collateral
for repurchase agreement investments.
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.
There were no written options during the year ended July 31, 2012.
FUTURES CONTRACTS -- The Equity Income Fund, the International Opportunities
Fund, the Large Cap Core Equity Fund, the NYSE Arca Tech 100 Index Fund, the
Small Cap Core Fund, the Tactical Capital Growth Allocation Fund and the
Tactical Growth & Income Allocation Fund utilized futures contracts during the
HIGHMARK(R) FUNDS 151
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JULY 31, 2012
year ended July 31, 2012. 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.
As of July 31, 2012, the International Opportunities Fund, the Large Cap Core
Equity Fund, the Small Cap Core Fund, the Tactical Capital Growth Allocation
Fund and the Tactical Growth & Income Allocation Fund were the only Funds to
have open futures contracts. During the year ended July 31, 2012, the average
number of futures contracts outstanding, based on a quarterly average, was 1,
20, 13, 17, 17, 2 and 3 for the Equity Income Fund, the International
Opportunities Fund, the Large Cap Core Equity Fund, the NYSE Arca Tech 100 Index
Fund, the Small Cap Core Fund, the Tactical Capital Growth Allocation Fund and
the Tactical Growth & Income Allocation Fund, respectively. The unrealized
appreciation and depreciation on futures contracts at July 31, 2012, and the net
realized gain (loss) and change in unrealized appreciation (depreciation) on
futures contracts for the year ended July 31, 2012, 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 obligation 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 30 days or less
and exchange fees after purchase
International Opportunities 2% redemption 30 days or less
and exchange fees after purchase
Small Cap Core 2% redemption 30 days or less
and exchange fees after purchase
152 HIGHMARK(R) FUNDS
CURRENT, EFFECTIVE OCTOBER 16, 2006
--------------------------------------------------------------------------------
CLASS A
------------------------------------
Cognitive Value 2% redemption 30 days or less
and exchange fees after purchase
Geneva Small Cap Growth 2% redemption 30 days or less
and exchange fees after purchase
International Opportunities 2% redemption 30 days or less
and exchange fees after purchase
Small Cap Core 2% redemption 30 days or less
and exchange fees after purchase
CLASS M
------------------------------------
Cognitive Value 2% redemption 30 days or less
and exchange fees after purchase
International Opportunities 2% redemption 30 days or less
and exchange fees after purchase
For the year ended July 31, 2012, the Cognitive Value Fund, the Geneva Small Cap
Growth Fund, the International Opportunities Fund and the Small Cap Core Fund
received redemption fees of $610, $677, $585 and $118, respectively. A Fund's
redemption fees are allocated to all classes in that Fund based on relative net
assets.
3. AGREEMENTS AND TRANSACTIONS WITH AFFILIATES
HighMark and the Adviser are parties to an Investment Advisory agreement. For
its services, the Adviser is entitled to receive a fee with respect to each
Fund, which is calculated daily and paid monthly, based on the daily net assets
of each Fund, at an annual rate of:
Balanced ................................. 0.60%
Cognitive Value .......................... 0.75% on the first $500 million
0.70% on assets over $500 million
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
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 .............. 0.75% on the first $1 billion
0.70% on assets over $1 billion
Large Cap Core Equity .................... 0.60%
Large Cap Growth ......................... 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 Core ........................... 0.95%
Value .................................... 0.60%
Tactical Capital Growth Allocation ....... 0.175%
Tactical Growth & Income 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
Effective December 1, 2011, the Adviser contractually agreed to reduce its fees
(excluding portfolio brokerage and transaction costs, taxes relating to
transacting in foreign securities, if any, extraordinary expenses and any
expenses indirectly incurred by a Fund through investments in pooled investment
vehicles (collectively, the "Excluded Costs")) through November 30, 2012 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 U CLASS M
SHARES SHARES SHARES SHARES SHARES SHARES
--------- ------- ------- ------- ------- -------
Balanced .......................... 0.99% 1.24% 1.84% 1.84% n/a n/a
Cognitive Value ................... 1.22 1.47 n/a 2.07 n/a 1.07%
Enhanced Growth ................... 1.20 1.45 n/a 2.05 n/a 1.05
Equity Income ..................... 0.90 1.15 1.75 1.75 n/a n/a
Geneva Mid Cap Growth ............. 1.13 1.38 1.98 1.98 n/a n/a
Geneva Small Cap Growth ........... 1.37 1.62 n/a 2.22 n/a n/a
International Opportunities ....... 1.27 1.42 n/a 2.12 n/a 1.12
Large Cap Core Equity ............. 0.97 1.22 n/a 1.82 n/a n/a
Large Cap Growth .................. 1.02 1.27 1.87 1.87 n/a n/a
NYSE Arca Tech 100 Index .......... 0.83 1.08 1.68 1.68 n/a n/a
Small Cap Core .................... 1.37 1.62 n/a 2.22 n/a n/a
Value (1) ......................... 1.00 1.25 1.85 1.85 0.87% n/a
Tactical Capital Growth
Allocation ..................... 0.33 0.58 n/a 1.28 n/a n/a
Tactical Growth & Income
Allocation ..................... 0.33 0.58 n/a 1.28 n/a n/a
Bond .............................. 0.72 0.97 1.65 1.40 n/a n/a
California Intermediate
Tax-Free Bond .................. 0.54 0.79 n/a 1.24 n/a n/a
National Intermediate
Tax-Free Bond .................. 0.52 0.77 n/a 1.22 n/a n/a
Short Term Bond ................... 0.60 0.85 n/a 1.30 n/a n/a
Wisconsin Tax-Exempt .............. 0.65 0.90 1.60 1.35 n/a n/a
----------
(1) Expense limitations shown above for Fiduciary, Class A, Class B, and Class
C Shares are in effect for the period March 26, 2012 through November 30,
2013. From December 1, 2011 through March 26, 2012, the expense
limitations in effect for Fiduciary, Class A, Class B and Class C Shares
were 1.02%, 1.27%, 1.87% and 1.87%, respectively.
n/a -- not applicable
Effective August 1, 2011 through November 30, 2011, the Adviser contractually
agreed to reduce its fees (excluding Excluded Costs) 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 U CLASS M
SHARES SHARES SHARES SHARES SHARES SHARES
--------- ------- ------- ------- ------- -------
Balanced .......................... 0.99% 1.24% 1.84% 1.84% n/a n/a
Cognitive Value ................... 1.22 1.47 n/a 2.07 n/a 1.07%
Enhanced Growth ................... 1.20 1.45 n/a 2.05 n/a 1.05
Equity Income ..................... 0.90 1.15 1.75 1.75 n/a n/a
Geneva Mid Cap Growth ............. 1.13 1.38 1.98 1.98 n/a n/a
Geneva Small Cap Growth ........... 1.37 1.62 n/a 2.22 n/a n/a
International Opportunities ....... 1.47 1.62 n/a 2.32 n/a 1.32
Large Cap Core Equity ............. 1.00 1.25 1.85 1.85 n/a n/a
Large Cap Growth .................. 1.02 1.27 1.87 1.87 n/a n/a
NYSE Arca Tech 100 Index .......... 0.83 1.08 1.68 1.68 n/a n/a
Small Cap Core .................... 1.37 1.62 n/a 2.22 n/a n/a
HIGHMARK(R) FUNDS 153
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JULY 31, 2012
FIDUCIARY CLASS A CLASS B CLASS C CLASS U CLASS M
SHARES SHARES SHARES SHARES SHARES SHARES
--------- ------- ------- ------- ------- -------
Value 1.02% 1.27% 1.87% 1.87% 0.87% n/a
Tactical Capital Growth
Allocation ...................... 0.33 0.58 n/a 1.28 n/a n/a
Tactical Growth & Income
Allocation ...................... 0.33 0.58 n/a 1.28 n/a n/a
Bond 0.79 1.04 1.72 1.47 n/a n/a
California Intermediate
Tax-Free Bond ................... 0.54 0.79 1.49 1.24 n/a n/a
National Intermediate
Tax-Free Bond ................... 0.52 0.77 n/a 1.22 n/a n/a
Short Term Bond ................... 0.70 0.95 n/a 1.40 n/a n/a
Wisconsin Tax-Exempt .............. 0.65 0.90 1.60 1.35 n/a n/a
* Class U Shares were effective October 7, 2011.
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. The Funds will make such payment only if
the annual operating expenses of each Fund share class (exclusive of the
Excluded Costs), at the time of such payment, are below the contractual fee
limit in effect at the time the waiver/expense reimbursement occurs. This
recoupment could reduce a Fund's future total return. For the year ended July
31, 2012, the Funds did not recoup any fees or expenses.
The total amount of fees waived and/or assumed by the Adviser during the last
fiscal year ended July 31, and is therefore currently eligible for recoupment
provided that the total recoupment does not exceed the Funds' respective
limitation, is as follows:
EXPIRING EXPIRING EXPIRING
2013 2014 2015
--------- --------- ---------
Balanced ................................. $ 73,760 $ 115,433 $ 129,687
Cognitive Value .......................... -- 9,308 26,676
Enhanced Growth .......................... 3,996 28,031 37,836
Equity Income ............................ 73,275 126,695 135,128
Geneva Mid Cap Growth .................... 122,334 210,531 200,637
Geneva Small Cap Growth .................. 47,565 89,482 105,288
Large Cap Core Equity .................... 48,012 79,695 126,910
Large Cap Growth ......................... 66,315 104,813 111,298
NYSE Arca Tech 100 Index ................. 68,245 185,874 173,232
Small Cap Core ........................... 48,889 78,535 129,221
Value .................................... 6,388 27,483 76,910
Tactical Capital Growth
Allocation ............................. 113,246 178,836 193,598
Tactical Growth & Income
Allocation ............................. 99,056 168,054 205,035
Bond ..................................... 53,629 133,816 311,037
California Intermediate
Tax-Free Bond .......................... 334,529 628,741 682,900
National Intermediate
Tax-Free Bond .......................... 239,461 391,114 378,140
Short Term Bond .......................... 57,114 105,854 194,093
Wisconsin Tax-Exempt ..................... 200,279 322,056 317,011
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. Effective December 1, 2011, Bailard
is entitled to receive a fee at the annual rate of 0.375% of the daily net
assets on the first $1 billion and 0.350% of the daily net assets over $1
billion of the International Opportunities Fund. Prior to December 1, 2011,
Bailard was entitled to receive a fee at the annual rate of 0.475% of the 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 pre-December 1, 2011
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 High-Mark 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
154 HIGHMARK(R) FUNDS
(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 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.
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, 2012, the Sub-Administrator earned
sub-administration fees in the amount of $735,441.
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, LLC (formerly known as HighMark Funds Distributors,
Inc.) (the "Distributor"), a wholly owned subsidiary of Foreside Funds
Distributors LLC (formerly known as BNY Mellon Distributors LLC), 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(R) FUNDS 155
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JULY 31, 2012
HighMark has also adopted shareholder service plans/ agreements permitting
payment of compensation to service providers, which 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, 2012. For the year ended July 31, 2012, the Bank, or its
affiliates earned shareholder servicing fees, net of waivers, from the Funds in
the amount of approximately $2,485,396, which is included in the shareholder
servicing fees and the related waivers on the statements of operations. The
shareholder servicing fee waivers by the Bank, or its affiliates, are voluntary
and not subject to recoupment.
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
Enhanced Growth .............................................. 5.50
Equity Income ................................................ 5.50
Geneva Mid Cap Growth ........................................ 5.50
Geneva Small Cap Growth ...................................... 5.50
International Opportunities .................................. 5.50
Large Cap Core Equity ........................................ 5.50
Large Cap Growth ............................................. 5.50
NYSE Arca Tech 100 Index ..................................... 5.50
Small Cap Core ............................................... 5.50
Value ........................................................ 5.50
Tactical Capital Growth Allocation ........................... 5.50
Tactical Growth & Income Allocation .......................... 5.50
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 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 except for the International
Opportunities Fund, which pays fees based on transactions and assets. The
Custodian plays no role in determining the investment policies of the Funds or
which securities are to be purchased or sold in the Funds.
4. INVESTMENT TRANSACTIONS
The purchases and sales (including maturities) of investment securities by the
Equity Funds and Fixed Income Funds, excluding short-term investments and U.S.
government securities, for the year ended July 31, 2012 are as follows:
INVESTMENT SECURITIES
----------------------------
PURCHASES SALES
------------- ------------
Balanced ................................ $ 9,666,684 $ 12,091,504
Cognitive Value ......................... 224,900,664 235,861,057
Enhanced Growth ......................... 9,175,273 23,491,089
Equity Income ........................... 17,542,600 16,172,074
Geneva Mid Cap Growth ................... 463,492,377 104,613,470
Geneva Small Cap Growth ................. 25,513,868 13,193,879
International Opportunities ............. 204,004,287 229,897,347
Large Cap Core Equity* .................. 48,837,642 61,720,615
Large Cap Growth ........................ 38,094,678 50,010,120
NYSE Arca Tech 100 Index ................ 58,354,179 83,669,916
Small Cap Core* ......................... 57,248,629 68,305,027
Value* .................................. 135,254,458 174,658,906
Tactical Capital Growth Allocation* ..... 18,192,399 24,954,743
Tactical Growth & Income Allocation* .... 28,176,473 37,556,718
Bond .................................... 130,467,952 130,788,975
California Intermediate Tax-Free Bond ... 111,034,589 82,208,044
National Intermediate Tax-Free Bond ..... 20,799,491 25,361,565
Short Term Bond ......................... 70,379,910 53,640,856
Wisconsin Tax-Exempt .................... 27,935,382 18,914,563
* The cost of purchases excludes $13,489,672, $46,052,732, $53,805,559,
$9,377,589 and $15,316,064 on the Large Cap Core Equity Fund, the Small Cap
Core Fund, the Value Fund, the Tactical Capital Growth Allocation Fund and
the Tactical Growth & Income Allocation Fund, respectively, from securities
received from the Reorganization (see Note 8).
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, 2012 are as
follows:
INVESTMENT SECURITIES
---------------------------
PURCHASES SALES
----------- -------------
Balanced ................................. $ 440,673 $ 880,385
Bond ..................................... 34,740,103 31,098,176
Short Term Bond .......................... 17,832,093 8,867,692
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.
156 HIGHMARK(R) FUNDS
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:
TACTICAL CAPITAL GROWTH ALLOCATION
--------------------------------------------------------------------------------------------------
NET REALIZED INCOME FROM
AFFILIATED REGISTERED GAINS AFFILIATED
INVESTMENT COMPANY SUBSCRIPTIONS REDEMPTIONS (LOSSES)(1) INVESTMENTS
--------------------- ------------ ------------ ------------ -----------
Cognitive Value ........................ $ 1,397,845 $ 771,565 $ (14,971) $ 14,705
Enhanced Growth ........................ 536,013 269,029 55,221 --
Equity Income .......................... 1,170,664 898,955 62,302 14,422
Geneva Mid Cap Growth .................. 1,232,364 316,508 218,015 --
Geneva Small Cap Growth ................ 1,285,291 469,381 139,184 --
International Opportunities ............ 2,948,603 1,559,751 45,724 178,145
Large Cap Core Equity (2) .............. 8,618,799 9,120,070 380,665 109,116
Large Cap Growth ....................... 557,696 1,211,377 93,859 3,534
NYSE Arca Tech 100 Index ............... 714,661 136,778 30,739 --
Small Cap Core (2) ..................... 3,422,831 2,004,743 867,577 17,601
Value (2) .............................. 10,505,639 11,544,572 (16,680) 96,068
Bond ................................... 234,858 478,323 8,498 1,258
Short Term Bond ........................ 2,112,685 1,851,499 19,730 64,484
Diversified Money Market ............... 1,006,029 1,032,842 -- --
------------- ------------ ------------ -----------
$ 35,743,978 $ 31,665,393 $ 1,889,863 $ 499,333
============= ============ ============ ===========
TACTICAL GROWTH & INCOME ALLOCATION
-------------------------------------------------------------------------------------------------
NET REALIZED INCOME FROM
AFFILIATED REGISTERED GAINS AFFILIATED
INVESTMENT COMPANY SUBSCRIPTIONS REDEMPTIONS (LOSSES)(1) INVESTMENTS
--------------------- ------------ ------------ ------------ -----------
Cognitive Value ........................ $ 1,760,153 $ 1,051,435 $ (24,620) $ 15,793
Enhanced Growth ........................ 554,154 231,833 47,493 --
Equity Income .......................... 1,207,530 921,719 65,806 15,133
Geneva Mid Cap Growth .................. 1,538,779 670,907 294,032 --
Geneva Small Cap Growth ................ 1,474,663 593,510 117,545 --
International Opportunities ............ 3,886,827 2,055,611 (24,955) 195,462
Large Cap Core Equity (2) .............. 7,674,825 7,113,503 1,331,752 99,089
Large Cap Growth ....................... 1,108,215 1,176,264 344,215 3,814
NYSE Arca Tech
100 Index ........................... 724,066 115,332 26,919 --
Small Cap Core (2) ..................... 4,789,506 2,832,694 952,006 5,355
Value (2) .............................. 12,708,454 12,311,997 653,511 110,053
Bond ................................... 4,305,671 4,627,419 283,250 154,234
Short Term Bond ........................ 7,277,915 6,708,958 33,092 184,807
Diversified Money Market ............... -- 17,902 -- --
------------- ------------ ------------ -----------
$ 49,010,758 $ 40,429,084 $ 4,100,046 $ 783,740
============= ============ ============ ===========
(1) Net realized gain or loss includes distributions from capital gains, if
any.
(2) Includes values in connection with the Reorganization (see Note 8).
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, 2009 through July
31, 2012) 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 are 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 ........................ $ 5,583 $ (5,583) $ --
Cognitive Value ................. 143,214 (143,214) --
Enhanced Growth ................. 60,079 (60,079) --
Equity Income ................... 56,696 (56,611) (85)
International Opportunities ..... 853,862 (853,862) --
Large Cap Core Equity ........... 7,126 (676,693) 669,567
Small Cap Core .................. 47,707 (27,437,289) 27,389,582
Value ........................... (5,806) (15,129,542) 15,135,348
Tactical Capital Growth
Allocation ................... 119,710 (650,111) 530,401
Tactical Growth & Income
Allocation ................... 166,460 (519,415) 352,955
Bond ............................ 362,808 (362,808) --
California Intermediate Tax-
Free Bond .................... 6,137 (6,137) --
Short Term Bond ................. 327,319 (327,319) --
These reclassifications have no effect on net assets or net asset value per
share of the Funds.
HIGHMARK(R) FUNDS 157
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JULY 31, 2012
The tax character of dividends and distributions paid on a tax basis during the
years or periods ended July 31, 2012 and July 31, 2011 were as follows:
LONG-TERM RETURN
TAX-EXEMPT ORDINARY CAPITAL OF
INCOME INCOME (1) GAIN CAPITAL TOTAL
---------- ----------- ----------- ------- -----------
Balanced
2012 ........................ $ -- $ 288,042 $ -- $ -- $ 288,042
2011 ........................ -- 393,280 -- -- 393,280
Cognitive Value
2012 ........................ -- 816,440 -- -- 816,440
2011 ........................ -- 1,222,687 -- -- 1,222,687
Equity Income
2012 ........................ -- 532,506 -- -- 532,506
2011 ........................ -- 490,028 -- -- 490,028
Geneva Mid Cap
Growth
2012 ........................ -- -- 10,293,782 -- 10,293,782
2011 ........................ -- -- 366,455 -- 366,455
Geneva Small
Cap Growth
2012 ........................ -- -- 920,040 -- 920,040
2011 ........................ -- 228,722 268,310 -- 497,032
International
Opportunities
2012 ........................ -- 6,178,695 -- -- 6,178,695
2011 ........................ -- 4,902,880 -- -- 4,902,880
Large Cap Core
Equity.
2012 ........................ -- 641,038 -- -- 641,038
2011 ........................ -- 694,987 -- -- 694,987
Large Cap
Growth
2012 ........................ -- 88,008 -- -- 88,008
2011 ........................ -- 962,853 -- -- 962,853
Value
2012 ........................ -- 4,321,830 12,340,098 16,661,928
2011 ........................ -- 6,256,107 71,499 -- 6,327,606
LONG-TERM RETURN
TAX-EXEMPT ORDINARY CAPITAL OF
INCOME INCOME (1) GAIN CAPITAL TOTAL
---------- ----------- ----------- ------- -----------
Tactical Capital
Growth
Allocation
2012 ........................ $ -- $ 298,205 $ -- $ -- $ 298,205
2011 ........................ -- 207,318 -- -- 207,318
Tactical Growth
& Income
Allocation
2012 ........................ -- 591,650 -- -- 591,650
2011 ........................ -- 445,253 -- -- 445,253
Bond
2012 ........................ -- 14,745,977 5,753,965 -- 20,499,942
2011 ........................ -- 13,824,027 3,048,333 -- 16,872,360
California
Intermediate
Tax-Free Bond
2012 ........................ 5,881,176 5,110 -- -- 5,886,286
2011 ........................ 5,722,725 -- -- -- 5,722,725
National
Intermediate
Tax-Free
Bond
2012 ........................ 2,743,629 -- -- -- 2,743,629
2011 ........................ 2,986,280 -- 14,144 -- 3,000,424
Short Term Bond
2012 ........................ -- 2,929,477 -- -- 2,929,477
2011 ........................ -- 2,936,807 -- -- 2,936,807
Wisconsin Tax-
Exempt
2012 ........................ 4,790,401 6,242 -- -- 4,796,643
2011 ........................ 5,355,376 8,551 181,311 -- 5,545,238
(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, 2012, 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 .................................. $ 28,750 $ -- $ 236,141 $ --
Cognitive Value ........................... 126,340 -- -- (3,764,904)
Enhanced Growth ........................... -- -- -- (11,611,334)
Equity Income ............................. 61,066 -- -- (8,295,398)
Geveva Mid Cap Growth ..................... -- -- 7,203,361 --
Geneva Small Cap Growth ................... -- -- 1,218,948 --
International Opportunities ............... 3,880,641 -- -- (48,066,857)
Large Cap Core Equity ..................... -- -- -- (16,999,414)
Large Cap Growth .......................... 244,543 -- -- (9,601,427)
NYSE Arca Tech 100 Index .................. -- -- -- (76,057,967)
Small Cap Core ............................ 18,691 -- -- (33,161,745)
Value ..................................... 7,058 -- 13,817,267 (11,748,662)
Tactical Capital Growth Allocation ........ 126,176 -- -- (9,466,601)
Tactical Growth & Income Allocation ....... 166,381 -- -- (4,622,503)
Bond ...................................... 1,900,416 -- 1,818,323 --
California Intermediate Tax-Free Bond ..... -- 27,437 -- (231,179)
National Intermediate Tax-Free Bond ....... -- 23,696 266,608 --
Short Term Bond ........................... 9,172 -- -- (262,667)
Wisconsin Tax-Exempt ...................... -- 13,463 -- (374,469)
TOTAL
DISTRIBUTABLE
LATE- UNREALIZED OTHER EARNINGS
YEAR APPRECIATION TEMPORARY (ACCUMULATED
LOSSES (DEPRECIATION) DIFFERENCES LOSSES)
------------- -------------- ------------- -------------
Balanced .................................. $ -- $ 4,614,943 $ -- $ 4,879,834
Cognitive Value ........................... -- 4,485,769 -- 847,205
Enhanced Growth ........................... (147,861) 29,076,804 -- 17,317,609
Equity Income ............................. -- 3,666,874 -- (4,567,458)
Geveva Mid Cap Growth ..................... (4,906,760) 119,392,742 -- 121,689,343
Geneva Small Cap Growth ................... (345,825) 3,880,558 -- 4,753,681
International Opportunities ............... (7,153,846) 10,360,346 -- (40,979,716)
Large Cap Core Equity ..................... -- 6,851,425 -- (10,147,989)
Large Cap Growth .......................... (668,327) 19,655,078 -- 9,629,867
NYSE Arca Tech 100 Index .................. (217,447) 40,830,716 -- (35,444,698)
Small Cap Core ............................ (4,127,622) 7,311,449 -- (29,959,227)
Value ..................................... -- 35,412,865 -- 37,488,528
Tactical Capital Growth Allocation ........ -- (517,010) -- (9,857,435)
Tactical Growth & Income Allocation ....... -- 412,269 -- (4,043,853)
Bond ...................................... -- 27,751,523 -- 31,470,262
California Intermediate Tax-Free Bond ..... (5,109) 16,565,615 -- 16,356,764
National Intermediate Tax-Free Bond ....... -- 7,626,744 -- 7,917,048
Short Term Bond ........................... (20,227) 2,177,651 -- 1,903,929
Wisconsin Tax-Exempt ...................... (4,067) 9,758,210 -- 9,393,137
Amounts designated as "--" are either not applicable or less than $1.00.
158 HIGHMARK(R) FUNDS
Late-year capital losses represent losses realized on investment transactions
from November 1, 2011 through July 31, 2012, 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. Net capital losses
earned in taxable years beginning after December 22, 2010 ("post-2010 losses")
may be carried forward indefinitely and must retain the character of the
original loss. Such post-2010 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, 2012, the Funds had capital
loss carryforwards available to offset future realized capital gains through the
indicated expiration dates:
2013 2014 2015 2016 2017 2018 2019
---- ---------- ----------- ----------- ----------- ----------- ----------
Cognitive Value .......................... $ -- $ -- $ -- $ -- $ -- $ 2,838,432 $ --
Enhanced Growth .......................... -- -- -- -- -- 11,611,334 --
Equity Income ............................ -- -- -- 4,218,899 3,822,036 254,463 --
International Opportunities .............. -- -- -- -- 10,968,850 33,710,538 --
Large Cap Core Equity .................... -- -- -- -- 4,766,289* 12,233,125 --
Large Cap Growth ......................... -- -- -- -- 5,211,579 4,389,848 --
NYSE Arca Tech 100 Index ................. -- 6,421,577 38,357,084 14,282,341 16,996,965 -- --
Small Cap Core ........................... -- -- -- -- 27,581,125* 5,197,714 --
Value .................................... -- -- -- 937,872** 9,620,451* -- --
Tactical Capital Growth Allocation ....... -- -- -- -- 2,163,713 4,958,426 2,321,302
Tactical Growth & Income Allocation ...... -- -- -- -- -- 3,967,026 655,477
California Intermediate Tax-Free Bond .... -- -- -- -- -- -- 4,425
Short Term Bond .......................... -- -- -- -- -- 233,426 --
Wisconsin Tax-Exempt ..................... -- -- -- -- -- -- --
NO
EXPIRATION TOTAL
----------- -------------
Cognitive Value .......................... $ 926,472 $ 3,764,904
Enhanced Growth .......................... -- 11,611,334
Equity Income ............................ -- 8,295,398
International Opportunities .............. 3,387,469 48,066,857
Large Cap Core Equity .................... -- 16,999,414
Large Cap Growth ......................... -- 9,601,427
NYSE Arca Tech 100 Index ................. -- 76,057,967
Small Cap Core ........................... 382,906 33,161,745
Value .................................... 1,190,339 11,748,662
Tactical Capital Growth Allocation ....... 23,160 9,466,601
Tactical Growth & Income Allocation ...... -- 4,622,503
California Intermediate Tax-Free Bond .... 226,754 231,179
Short Term Bond .......................... 29,241 262,667
Wisconsin Tax-Exempt ..................... 374,469 374,469
* Capital loss carryforward amounts of $77,540, $27,389,574 and $9,620,451
were inherited from the Fundamental Equity Fund, the Small Cap Value Fund
and the Large Cap Value Fund, respectively, and may be subject to IRS
limitations in a given year.
** Capital loss carryforward amount was inherited from the North Track Large
Cap Equity 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, 2012, capital loss carryforwards that were
utilized and/or expired are as follows:
Balanced ................................. $ 816,997
Enhanced Growth .......................... 3,027,452
Equity Income ............................ 690,135
Large Cap Core Equity .................... 2,647,420
Large Cap Growth ......................... 5,998,917
NYSE Arca Tech 100 Index ................. 37,726,165
Value .................................... 34,123,964
Tactical Capital Growth Allocation ....... 68,615
Tactical Growth & Income Allocation ...... 1,066,445
At July 31, 2012, 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 ................................. $ 19,909,314 $ 4,798,862 $ (183,919) $ 4,614,943
Cognitive Value .......................... 76,897,826 6,876,611 (2,390,842) 4,485,769
Enhanced Growth .......................... 51,958,464 32,653,901 (3,577,097) 29,076,804
Equity Income ............................ 18,539,761 4,241,046 (574,172) 3,666,874
Geneva Mid Cap Growth .................... 730,362,231 130,639,258 (11,246,516) 119,392,742
Geneva Small Cap Growth .................. 35,007,429 5,163,529 (1,282,971) 3,880,558
International Opportunities .............. 179,514,752 23,470,007 (13,098,893) 10,371,114
Large Cap Core Equity .................... 56,513,621 9,143,111 (2,291,686) 6,851,425
Large Cap Growth ......................... 53,507,349 20,025,476 (370,398) 19,655,078
NYSE Arca Tech 100 Index ................. 152,349,518 60,857,452 (20,026,736) 40,830,716
Small Cap Core ........................... 53,820,411 9,889,842 (2,578,393) 7,311,449
Value .................................... 296,836,541 47,039,331 (11,617,282) 35,422,049
Tactical Capital Growth Allocation ....... 46,576,873 2,531,609 (3,048,619) (517,010)
HIGHMARK(R) FUNDS 159
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JULY 31, 2012
NET
FEDERAL APPRECIATION
TAX COST APPRECIATION DEPRECIATION (DEPRECIATION)
------------ ------------ ------------ --------------
Tactical Growth & Income Allocation ..... $ 60,332,305 $ 2,927,880 $(2,515,611) $ 412,269
Bond .................................... 355,015,467 31,522,071 (3,770,548) 27,751,523
California Intermediate Tax-Free Bond ... 240,655,348 16,607,308 (41,693) 16,565,615
National Intermediate Tax-Free Bond ..... 92,197,604 7,640,115 (13,371) 7,626,744
Short Term Bond ......................... 157,059,408 2,778,192 (600,541) 2,177,651
Wisconsin Tax-Exempt .................... 160,430,722 9,760,361 (2,151) 9,758,210
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,
2012, securities lending income, net of Custodian rebates is $144,389. Security
lending income, netted of Custodian rebates and fees, is listed in the statement
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. There were no securities on loan at July 31, 2012
and the net income after Custodian rebates and fees generated from the program
during the period ended July 31, 2012, with respect to such loans for the
International Opportunities Fund was $136,516.
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. FUND REORGANIZATION
On September 1, 2011, the Trust's Board of Trustees approved plans of
reorganization that provided for the transfer of all of the assets and
liabilities of the HighMark Fundamental Equity Fund ("Fundamental Equity Fund"),
the HighMark Small Cap Value Fund ("Small Cap Value Fund"), the HighMark
Diversified Equity Allocation Fund ("Diversified Equity Allocation Fund") and
the HighMark Income Plus Allocation Fund ("Income Plus Allocation Fund"),
collectively the Merging Funds, for shares of the HighMark Large Cap Core Equity
Fund ("Large Cap Core Equity Fund"), the HighMark Small Cap Core Fund ("Small
Cap Core Fund"), the HighMark Tactical Capital Growth Allocation Fund ("Tactical
Capital Growth Allocation Fund") and the HighMark Tactical Growth & Income
Allocation Fund ("Tactical Growth & Income Allocation Fund"), collectively the
Acquiring Funds, respectively. The consummation of the tax-free reorganizations
took place on October 28, 2011.
CLASS F CLASS F CLASS A CLASS A CLASS C CLASS C
SHARES NET ASSET SHARES NET ASSET SHARES NET ASSET
MERGING FUNDS ACQUIRING FUNDS ISSUED VALUE ISSUED VALUE ISSUED VALUE
-----------------------------------------------------------------------------------------------------------------------------
Fundamental Equity Fund Large Cap Core Equity Fund 1,836,177 $ 8.44 4,544 $ 8.42 3,269 $ 8.19
-----------------------------------------------------------------------------------------------------------------------------
Small Cap Value Fund* Small Cap Core Fund 1,458,617 $ 18.06 663,271 $ 17.91 232,398 $ 17.47
-----------------------------------------------------------------------------------------------------------------------------
Diversified Equity Tactical Capital Growth
Allocation Fund Allocation Fund 21,079 $ 20.68 152,654 $ 20.66 270,025 $ 20.44
-----------------------------------------------------------------------------------------------------------------------------
Income Plus Allocation Fund Tactical Growth & Income
Allocation Fund 17,234 $ 21.20 362,847 $ 21.13 387,105 $ 21.01
-----------------------------------------------------------------------------------------------------------------------------
* This Fund had Class B shares outstanding immediately prior to the
reorganization, which were exchanged for Class A shares.
160 HIGHMARK(R) FUNDS
The conversion ratios for each Share class issued in the reorganization were as
follows:
MERGING FUNDS ACQUIRING FUNDS CLASS F CLASS A CLASS B* CLASS C
----------------------------------------------------------------------------------------------------------------------
Fundamental Equity Fund Large Cap Core Equity Fund 2.4152 2.4112 N/A 2.4739
----------------------------------------------------------------------------------------------------------------------
Small Cap Value Fund* Small Cap Core Fund 0.7275 0.7147 0.6797 0.6865
----------------------------------------------------------------------------------------------------------------------
Diversified Equity Allocation Fund Tactical Capital Growth Allocation Fund 0.8681 0.8669 N/A 0.8586
----------------------------------------------------------------------------------------------------------------------
Income Plus Allocation Fund Tactical Growth & Income Allocation Fund 0.9399 0.9434 N/A 0.9421
----------------------------------------------------------------------------------------------------------------------
* Class B shares were exchanged for Class A shares.
The following information relates to the Merging and Acquiring Funds immediately
prior and immediately after the consummation of the reorganization:
SHARES UNREALIZED
MERGING FUND/ACQUIRING FUND NET ASSETS OUTSTANDING APP/(DEP)
----------------------------------------------------------------------------------------------------------
Fundamental Equity Fund (before reorganization) $15,568,306 763,465 $ 1,851,290
Large Cap Core Equity Fund (before reorganization) 53,946,635 6,392,682 N/A
Large Cap Core Equity Fund (after reorganization) 69,514,941 8,236,672 N/A
----------------------------------------------------------------------------------------------------------
Small Cap Value Fund (before reorganization) 42,281,601 3,273,200 (4,223,966)
Small Cap Core Fund (before reorganization) 27,032,261 1,497,360 N/A
Small Cap Core Fund (after reorganization) 69,313,862 3,851,646 N/A
----------------------------------------------------------------------------------------------------------
Diversified Equity Allocation Fund (before reorganization) 9,110,686 514,867 (411,625)
Tactical Capital Growth Allocation Fund (before reorganization) 40,958,109 1,990,590 N/A
Tactical Capital Growth Allocation Fund (after reorganization) 50,068,795 2,434,348 N/A
----------------------------------------------------------------------------------------------------------
Income Plus Allocation Fund (before reorganization) 16,163,124 813,848 493,861
Tactical Growth & Income Allocation Fund (before reorganization) 49,458,645 2,346,103 N/A
Tactical Growth & Income Allocation Fund (after reorganization) 65,621,769 3,113,289 N/A
On December 6, 2011, the Trust's Board of Trustees approved a plan of
reorganization that provided for the transfer of all of the assets and
liabilities of the HighMark Large Cap Value Fund ("Large Cap Value Fund"), the
Merging Fund, for shares of the High-Mark Value Fund ("Value Fund"), the
Acquiring Fund. On March 16, 2012, the shareholders of the Large Cap Value Fund
approved the reorganization. The consummation of the reorganization took place
on March 26, 2012.
CLASS F CLASS F CLASS A CLASS A CLASS B CLASS B CLASS C CLASS C
SHARES NET ASSET SHARES NET ASSET SHARES NET ASSET SHARES NET ASSET
MERGING FUND ACQUIRING FUND ISSUED VALUE ISSUED VALUE ISSUED VALUE ISSUED VALUE
---------------------------------------------------------------------------------------------------------------------------------
Large Cap Value Fund Value Fund 2,435,210 $16.22 1,177,892 $16.17 23,042 $15.81 126,909 $15.74
The conversion ratios for each Share class issued in the reorganization were as
follows:
MERGING FUND ACQUIRING FUND CLASS F CLASS A CLASS B CLASS C
-----------------------------------------------------------------------------
Large Cap Value Fund Value Fund 0.7183 0.7222 0.7257 0.7263
The following information relates to the Merging and Acquiring Funds immediately
prior and immediately after the consummation of the reorganization:
SHARES UNREALIZED
MERGING FUND/ACQUIRING FUND NET ASSETS OUTSTANDING APP/(DEP)
----------------------------------------------------------------------------------------------------------
Large Cap Value Fund (before reorganization) $ 60,904,062 5,227,464 $4,137,673
Value Fund (before reorganization) $311,680,994 19,235,836 N/A
Value Fund (after reorganization) $372,585,056 22,998,889 N/A
Assuming each reorganization discussed above had been completed on August 1,
2011, the Acquiring Funds' results of operations for the year ended July 31,
2012 would have been as follows:
NET NET
REALIZED AND INCREASE
NET UNREALIZED (DECREASE)
INVESTMENT GAIN (LOSS) IN ASSETS
INCOME (LOSS) ON INVESTMENTS FROM OPERATIONS
------------- -------------- ---------------
Large Cap Core Fund ......................... $ 653,875 $ 4,515,020 $ 5,168,895
Small Cap Core Fund ......................... 132,128 (111,591) 20,537
Value Fund .................................. 4,958,104 2,503,452 7,461,556
Tactical Capital Growth Allocation Fund ..... 264,580 (696,099) (431,519)
Tactical Growth & Income Allocation Fund .... 591,987 649,114 1,241,101
HIGHMARK(R) FUNDS 161
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
JULY 31, 2012
Because the combined investment portfolios have been managed as single
portfolios since the Reorganization was completed, it is not practicable to
separate the amounts of revenue and earnings of the Large Cap Core Equity Fund,
the Small Cap Core Fund, Tactical Capital Growth Allocation Fund and Tactical
Growth & Income Allocation Fund statements of operations since October 28, 2011,
and Value Fund's statement of operations since March 23, 2012.
During the year ended July 31, 2012, in connection with the reorganizations, the
Adviser reimbursed the Large Cap Core Equity Fund and the Small Cap Core Fund
for trading costs associated with the restructuring of the portfolios in the
amounts of $12,550 and $38,322, respectively. These reimbursements are included
in Net Realized Gain (Loss) on Investments on the Statement of Operations.
9. NEW ACCOUNTING PRONOUNCEMENT
In December 2011, the Financial Accounting Standards Board ("FASB") issued
Accounting Standards Update ("ASU") No. 2011-11, "Disclosures about Offsetting
Assets and Liabilities". ASU No. 2011-11 requires disclosures to make financial
statements that are prepared under U.S. Generally Accepted Accounting Principles
more comparable to those prepared under International Financial Reporting
Standards. The new disclosure requirements mandate that entities disclose both
gross and net information about instruments and transactions eligible for offset
in the statements of assets and liabilities as well as instruments and
transactions subject to an agreement similar to a master netting arrangement. In
addition, ASU No. 2011-11 requires disclosure of collateral received and posted
in connection with master netting agreements or similar arrangements. New
disclosures are required for annual reporting periods beginning on or after
January 1, 2013, and interim periods within those annual periods. Management is
evaluating the impact of ASU No. 2011-11 on the financial statements and
disclosures.
10. 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.
162 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,
Enhanced Growth Fund, Equity Income Fund, Geneva Mid Cap Growth Fund, Geneva
Small Cap Growth Fund, International Opportunities Fund, Large Cap Core Equity
Fund (formerly Core Equity Fund), Large Cap Growth Fund, NYSE Arca Tech 100
Index Fund, Small Cap Core Fund (formerly Small Cap Advantage Fund), Value Fund
(formerly Value Momentum Fund), Tactical Capital Growth Allocation Fund
(formerly Capital Growth Allocation Fund), Tactical Growth & Income Allocation
Fund (formerly Growth & Income 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"),
nineteen of the twenty-six Portfolios constituting the HighMark Funds (the
"Trust") as of July 31, 2012, 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, 2012, 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, Enhanced Growth Fund, Equity Income Fund,
Geneva Mid Cap Growth Fund, Geneva Small Cap Growth Fund, International
Opportunities Fund, Large Cap Core Equity Fund, Large Cap Growth Fund, NYSE Arca
Tech 100 Index Fund, Small Cap Core Fund, Value Fund, Tactical Capital Growth
Allocation Fund, Tactical Growth & Income 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, 2012, 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 25, 2012
HIGHMARK(R) FUNDS 163
ADDITIONAL INFORMATION (UNAUDITED)
JULY 31, 2012
1. SHAREHOLDER PROXY VOTE
At a special meeting of shareholders held on March 16, 2012 shares were voted as
follows on the proposals presented to the shareholders:
Proposal 1. To consider approving the Agreement and Plan of Reorganization by
and among HighMark Funds, on behalf of High-Mark Large Cap Value Fund and
HighMark Value Momentum Fund and HighMark Capital Management, Inc.
NO. OF
SHARES
-------------
Large Cap Value Fund
For ............................................................ 3,863,580.405
Against ........................................................ 12,166.712
Abstain ........................................................ 96,990.207
-------------
Total .......................................................... 3,972,737.324
164 HIGHMARK(R) FUNDS
NOTICE TO SHAREHOLDERS (UNAUDITED)
For shareholders that do not have a July 31, 2012 tax year end, this notice is
for informational purposes only. For shareholders with a July 31, 2012 tax year
end, please consult your tax adviser as to the pertinence of this notice.
For the fiscal year ended July 31, 2012, each Fund is designating the following
items with regard to distributions paid during the year.
QUALIFIED
DIVIDENDS
AND CORPORATE
15% RATE ORDINARY DIVIDENDS
LONG-TERM INCOME TAX EXEMPT RECEIVED
CAPITAL GAIN DISTRIBUTIONS INCOME DEDUCTION
FUND DISTRIBUTIONS (TAX BASIS) DISTRIBUTIONS TOTAL (1)
-----------------------------------------------------------------------------------------------------------------
Balanced (4) .......................... 0.00% 100.00% 0.00% 100.00% 78.52%
Cognitive Value ....................... 0.00% 100.00% 0.00% 100.00% 95.56%
Equity Income ......................... 0.00% 100.00% 0.00% 100.00% 100.00%
Geneva Mid Cap Growth (4) ............. 100.00% 0.00% 0.00% 100.00% 0.00%
Geneva Small Cap Growth (4) ........... 100.00% 0.00% 0.00% 100.00% 0.00%
International Opportunities (5) ....... 0.00% 100.00% 0.00% 100.00% 0.00%
Large Cap Core Equity ................. 0.00% 100.00% 0.00% 100.00% 100.00%
Large Cap Growth ...................... 0.00% 100.00% 0.00% 100.00% 100.00%
Value (4) ............................. 74.06% 25.94% 0.00% 100.00% 100.00%
Tactical Capital Growth Allocation .... 0.00% 100.00% 0.00% 100.00% 88.71%
Tactical Growth & Income
Allocation ......................... 0.00% 100.00% 0.00% 100.00% 47.67%
Bond (4) .............................. 28.07% 71.93% 0.00% 100.00% 0.00%
California Intermediate
Tax-Free Bond (6) .................. 0.00% 0.09% 99.91% 100.00% 0.00%
National Intermediate
Tax-Free Bond (4) .................. 0.00% 0.00% 100.00% 100.00% 0.00%
Short Term Bond ....................... 0.00% 100.00% 0.00% 100.00% 0.00%
Wisconsin Tax-Exempt .................. 0.00% 0.13% 99.87% 100.00% 0.00%
QUALIFYING
DIVIDEND
INCOME
(15% TAX U.S. QUALIFIED QUALIFIED
RATE FOR GOVERNMENT INTEREST SHORT-TERM
FUND QDI) (2) INTEREST (3) INCOME CAPITAL GAIN
----------------------------------------------------------------------------------------------
Balanced (4) .......................... 88.01% 0.15% 52.28% 0.00%
Cognitive Value ....................... 100.00% 0.00% 0.06% 0.00%
Equity Income ......................... 100.00% 0.00% 0.00% 0.00%
Geneva Mid Cap Growth (4) ............. 0.00% 0.00% 0.00% 0.00%
Geneva Small Cap Growth (4) ........... 0.00% 0.00% 0.00% 0.00%
International Opportunities (5) ....... 94.86% 0.00% 0.00% 0.00%
Large Cap Core Equity ................. 100.00% 0.00% 0.00% 0.00%
Large Cap Growth ...................... 100.00% 0.00% 0.00% 0.00%
Value (4) ............................. 100.00% 0.00% 0.00% 0.00%
Tactical Capital Growth Allocation .... 100.00% 0.00% 0.07% 0.00%
Tactical Growth & Income
Allocation ......................... 73.32% 0.00% 0.24% 0.00%
Bond (4) .............................. 0.00% 5.62% 99.08% 12.17%
California Intermediate
Tax-Free Bond (6) .................. 0.00% 0.00% 0.00% 0.00%
National Intermediate
Tax-Free Bond (4) .................. 0.00% 0.00% 0.00% 0.00%
Short Term Bond ....................... 0.00% 0.50% 96.59% 0.00%
Wisconsin Tax-Exempt .................. 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 2012, THE BALANCED FUND, THE GENEVA MID CAP
GROWTH FUND, THE GENEVA SMALL CAP GROWTH FUND, THE VALUE FUND, THE BOND
FUND AND THE NATIONAL INTERMEDIATE TAX-FREE BOND FUND HAD LONG-TERM
CAPITAL GAIN DISTRIBUTION DESIGNATIONS OF $236,141, $10,293,782,
$1,291,756, $16,589,475, $5,753,965 AND $266,608, RESPECTIVELY.
(5) THE FUND INTENDS TO PASS THROUGH A FOREIGN TAX CREDIT TO THE SHAREHOLDERS.
FOR THE FISCAL YEAR ENDED 2012, THE TOTAL AMOUNT OF FOREIGN SOURCE INCOME
IS $7,498,591. THE TOTAL AMOUNT OF FOREIGN TAX TO BE PAID IS $436,455.
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, 2012.
HIGHMARK(R) FUNDS 165
TRUSTEES AND OFFICERS (UNAUDITED)
Information pertaining to the Trustees and officers of the Trust is set forth
below. The Statement of Additional Information ("SAI") includes additional
information about Fund directors. The SAI is available, without charge, upon
request, by calling 1-800-433-6884.
The following trustees and officers list is current as of September 21, 2012.
------------------------------------------------------------------------------------------------------------------------------------
TERM OF NUMBER OF PORTFOLIOS OTHER
OFFICE IN HIGHMARK DIRECTORSHIPS
AND PRINCIPAL FUNDS HELD BY
POSITION(S) LENGTH OF OCCUPATION(S) COMPLEX TRUSTEE
NAME, HELD WITH TIME DURING PAST OVERSEEN DURING
ADDRESS(1) AND AGE THE TRUST SERVED(2) 5 YEARS BY TRUSTEE(3) PAST 5 YEARS(4)
------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
David E. Benkert Trustee, Since 3/04 From April 1, 1992 to present, 24 None
55 Chairman Director, Navigant Consulting,
Inc. (financial consulting).
Thomas L. Braje Trustee, Vice Since 6/87 Prior to retirement in October 24 None
69 Chairman, 1996, Vice President and Chief
Governance Financial Officer of Bio-Rad
Committee Laboratories, Inc.
Chairman
Evelyn S. Dilsaver Trustee, Audit Since 1/08 Since April 2011, Member, Board 24 Aeropostale, Inc.
57 Committee of Trustees of Russell Exchange (ARO); Longs Drug
Chairman Traded Funds Trust. Since Corporation
January 2010, Member, Board of (LDG)(5); Russell
Directors of Tempur-Pedic Exchange Traded
International Inc. (mattress Funds Trust (26
manufacturer). Since November portfolios);
2009, Member, Board of Directors Tamalpais Bancorp
of Blue Shield of California (TAMB); Tempur-
(health insurance). Since Pedic
October 2007, Member, Board of International
Directors of Aeropostale, Inc. Inc. (TPX)
From 2004 to 2007, Executive
Vice President for The Charles
Schwab Corporation, and
President and Chief Executive
Officer of Charles Schwab
Investment Management, Inc.
David A. Goldfarb Trustee Since 6/87 Since January 2010, owner of 24 None
70 David A. Goldfarb, CPA. From
1987 to 2009, Partner, Goldfarb
& Simens, Certified Public
Accountants.
Michael L. Noel Trustee Since 12/98 President, Noel Consulting 24 Avista Corp. (AVA)
71 Company since 1998. Senior
Managing Director, Saber
Partners (financial advisory
firm) since 2002. Member, Board
of Directors, Avista Corp.
(utility company), since January
2004. Member, Board of
Directors, SCAN Health
Plan, since 1997.
Mindy M. Posoff Trustee Since 10/10 Managing Director, Golden Seeds, 24 None
56 LLC (investment group) since
January 2011. Managing Director,
Traversent Capital Partners
(financial consulting) since
January 2010. From January 2003
to December 2009, Managing
Director, NewMarket Capital
Partners, LLC (asset management).
166 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
ADDRESS(1) AND AGE THE TRUST SERVED(2) 5 YEARS BY TRUSTEE(3) PAST 5 YEARS(4)
------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OFFICERS
Dennis Mooradian President Since 8/12 Chairman of the Board, President N/A N/A
350 California Street and Chief Executive Officer of
San Francisco, CA the Adviser since August 2012.
94104 Executive Vice President, Union
64 Bank, N.A. since 2011. From June
2009 to June 2011, affiliated
with LECG Corporation
(consulting and expert testimony
on fiduciary, investment
management, brokerage and
private banking issues). From
November 2003 to February 2009,
Executive Vice President, Wealth
and Institutional Management,
Comerica Bank. Chairman and
President of World Asset
Management.
Pamela O'Donnell Vice Since Vice President and Director of N/A N/A
350 California Street President, 12/05 Mutual Fund Administration of
San Francisco, CA Treasurer and (Treasurer) the Adviser since 2005.
94104 Chief Since 3/09
48 Financial (Vice
Officer President)
Since 6/10
(Chief
Financial
Officer)
Kevin Rowell Vice President Since 9/10 Senior Vice President and N/A N/A
350 California Street and Assistant Managing Director of the Adviser
San Francisco, CA Secretary since June 2010. From 2008 to
94104 2010, President, Hennessy Funds.
52 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
San Francisco, CA Officer Adviser since July 2004.
94104
55
Helen Robichaud Secretary Since 3/10 Managing Director and Senior N/A N/A
201 Washington Street, Counsel, BNY Mellon Investment
34th Floor Servicing (US) Inc. since
Boston, MA January 2010. Director of Fund
02108 Regulatory Services of J.P.
60 Morgan from June 2008 to
December 2009. Associate General
Counsel of J.P. Morgan from
August 1995 to June 2008.
----------
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 or her 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.
HIGHMARK(R) FUNDS 167
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 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 (the
Investment Advisory Agreement, collectively with the sub-advisory agreements
relating to each of the Funds that has a sub-adviser, the "Agreements") at
meetings held on June 19-20, 2012.
In considering whether to approve the continuation of the Agreements with
respect to the Funds at the meetings held on June 19-20, 2012, the Board of
Trustees did not identify any single factor as determinative. Matters considered
by the Trustees in connection with their approval of the Agreements as they
relate to the Funds included the following:
THE NATURE, EXTENT AND QUALITY OF THE SERVICES PROVIDED TO THE FUNDS UNDER THE
AGREEMENTS. The Trustees considered the nature, extent and quality of the
services provided by the Adviser, Bailard, Inc., Geneva Capital Management, Ltd.
and 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
168 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 (both as advisers and sub-advisers, if applicable) 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. The Trustees also considered differences between providing
advisory and sub-advisory services to a fund. 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, recent Fund mergers 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
HIGHMARK(R) FUNDS 169
BOARD APPROVAL OF THE EXISTING ADVISORY AND SUB-ADVISORY AGREEMENTS (UNAUDITED)
(CONCLUDED)
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.
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.
o recent business initiatives of the Adviser.
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, 2013.
170 HIGHMARK(R) FUNDS
FUND INFORMATION (UNAUDITED)
JULY 31, 2012
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
ENHANCED GROWTH 431112358 HEGFX 2210
EQUITY INCOME 431113109 NJPFX 2643
GENEVA MID CAP GROWTH 431113505 PNMFX 2647
GENEVA SMALL CAP GROWTH 431113885 HGFSX 2650
INTERNATIONAL OPPORTUNITIES 431112341 HIOFX 2211
LARGE CAP CORE EQUITY 431112788 HMCFX 1627
LARGE CAP GROWTH 431114818 HMGRX 492
NYSE ARCA TECH 100 INDEX 431113844 PTSFX 2654
SMALL CAP CORE 431112465 HSAFX 2214
VALUE 431114677 HMVMX 871
TACTICAL CAPITAL GROWTH ALLOCATION 431112283 HGAFX 2198
TACTICAL GROWTH & INCOME ALLOCATION 431112325 HGIFX 2197
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 171
FUND INFORMATION (UNAUDITED) (CONTINUED)
JULY 31, 2012
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
ENHANCED GROWTH
CLASS A SHARES 431112382 HEHAX 2204
CLASS C SHARES 431112374 HEGCX 2207
EQUITY INCOME
CLASS A SHARES 431113208 NJPAX 2640
CLASS B SHARES 431113307 NJPBX 2641
CLASS C SHARES 431113406 NJPCX 2642
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 CORE EQUITY
CLASS A SHARES 431112770 HCEAX 1626
CLASS C SHARES 431112754 HCECX 1632
LARGE CAP GROWTH
CLASS A SHARES 431114768 HMRGX 481
CLASS B SHARES 431114511 HMGBX 455
CLASS C SHARES 431112879 HGRCX 1755
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 CORE
CLASS A SHARES 431112457 HSAAX 2212
CLASS C SHARES 431112440 HSCAX 2213
VALUE
CLASS A SHARES 431114628 HMVLX 870
CLASS B SHARES 431114529 HVMBX 456
CLASS C SHARES 431112812 HVMCX 1753
172 HIGHMARK(R) FUNDS
RETAIL SHARES INFORMATION (CONTINUED)
FUND CUSIP TICKER FUND #
TACTICAL CAPITAL GROWTH ALLOCATION
CLASS A SHARES 431112564 HMAAX 1494
CLASS C SHARES 431112556 HMACX 1497
TACTICAL GROWTH & INCOME ALLOCATION
CLASS A SHARES 431112580 HMRAX 1493
CLASS C SHARES 431112572 HMRCX 1496
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 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
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
CLASS U SHARES INFORMATION
VALUE 431113752 HVMUX 2248
HIGHMARK(R) FUNDS 173
NOTES
174 HIGHMARK(R) FUNDS
NOTES
HIGHMARK(R) FUNDS 175
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
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
20 North Clark Street
Suite 3400
Chicago, IL 60602
CUSTODIAN
Union Bank, N.A.
350 California Street
San Francisco, CA 94104
DISTRIBUTOR
HighMark Funds Distributors, LLC
400 Berwyn Park
899 Cassatt Road
Berwyn, PA 19312
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
176 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.HIGHMARK FUNDS.COM
HMKAR0040300
84806-B (07/12)
--------------------------------------------------------------------------------
JULY 31, 2012
--------------------------------------------------------------------------------
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 ...................................... 18
statements of operations .................................................. 20
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, LLC 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 78.1%
GENERAL OBLIGATIONS 12.2
SPECIAL TAX 6.9
CERTIFICATES OF PARTICIPATION 2.8
CALIFORNIA TAX-FREE MONEY MARKET FUND* (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2012, 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 41.70%, 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 Board announced it would
maintain its historically low short-term interest rates of between 0.00% and
0.25% until 2014. Well-publicized sovereign debt and banking issues in Europe
continued to play out, leading to increased volatility in global debt markets.
Domestically, municipal note yields decreased from 0.30% to 0.23%, reflecting a
demand for new issuance of annual cash flow notes from municipalities.
California continued to experience budget deficits and fiscal challenges.
California's unemployment rate of 10.7% remained above the national average of
8.2%, and the state experienced a muted recovery in the housing sector.
As of July 31, 2012, California's long-term ratings from the three major rating
agencies are A1/A-/A-.
The Fund maintained a shorter weighted average maturity than its peer group
during the period. The Fund's weighted average maturity was eight days. The
Fund's weighted average maturity for the first half of the reporting period was
fifteen days, which then fell to eight days in the second half of the reporting
period.
* 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, 2012, 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 -0.80% -0.85% -0.56%
+ 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, 2011 and ending on November 30, 2012. 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 period ended July 31, 2012, HighMark 100% U.S. Treasury Money Market
Fund posted a seven-day effective yield of 0.00% (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
Diversified Money Market Fund posted a seven-day effective yield of 0.02%
(Fiduciary Shares)**. (These funds are collectively the "Funds," and each is a
"Fund.")
FACTORS AFFECTING PERFORMANCE
Worldwide economic growth slowed during the Fund's reporting period, despite
repeated and sizable monetary stimuli by central banks across the globe.
Short-term interest rates in the United States remained just above zero percent,
which was the level set by the Federal Reserve in late 2008. Yields on certain
short-term instruments did temporarily increase, specifically late in the
reporting period, due to stimulus action by the Federal Reserve, known as
"Operation Twist," wherein the Federal Reserve sold short-term Treasury
securities and reinvested the proceeds in longer term investments further out on
the yield curve.
Turmoil in Europe continued to negatively affect money markets, as regulators
responded to each market spasm with just enough stimulus or support to
temporarily calm investor fears. Consequently, U.S. Treasury and U.S. agency
securities markets experienced periodic price spikes in response to investor
fears. Despite these intermittent challenges, Operation Twist generally held
short-term Treasury yields in positive territory, which benefited HighMark 100%
U.S. Treasury Money Market Fund.
With collateral in plentiful supply, overnight repurchase agreement transaction
yields were under upward pressure, especially in the second half of the Fund's
reporting period. Both HighMark Treasury Plus Money Market Fund and HighMark
U.S. Government Money Market Fund continued to overweight overnight repurchase
agreements, as they provided both enhanced yield and liquidity. Supply of other
eligible securities shrank and spreads tightened dramatically during the last
three months of the reporting period, as a sizable dollar amount of Federal
Deposit Insurance Corp. guaranteed securities, issued in 2008 and 2009, matured
in June 2012.
The HighMark Diversified Money Market Fund retained its focus on both credit
quality and reducing its exposure to euro zone issuers believed to be most
likely impacted by fiscal uncertainty. As the crisis continued to unfold and the
shortage of quality investment choices became more acute, the Fund increased
liquidity by purchasing overnight U.S. Treasury collateralized repurchase
agreements. This caused the weighted average maturity of the portfolio to
decline and further impacted near term performance.
* 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 HIGHMARK-FUNDS.COM.
** The seven-day effective yields, which are equal to the seven-day current
yields at July 31, 2012, 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 -0.68% n/a n/a -0.73% -0.44%
Treasury Plus Money Market Fund
Subsidized+ 0.00% n/a n/a 0.00% 0.00%
Non-Subsidized -1.06% n/a n/a -0.52% -0.90%
U.S. Government Money Market Fund
Subsidized+ 0.00% 0.00% 0.00% 0.00% 0.00%
Non-Subsidized -0.80% -1.26% -1.05% -0.85% -0.55%
100% U.S. Treasury Money Market Fund
Subsidized+ 0.00% n/a n/a 0.00% 0.00%
Non-Subsidized -0.91% n/a n/a -0.96% -0.66%
+ 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, 2011 and ending on November 30, 2012. 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
REPURCHASE AGREEMENTS 36.0%
COMMERCIAL PAPER 31.7
CERTIFICATES OF DEPOSIT 19.0
CORPORATE OBLIGATIONS 6.2
U.S. TREASURY BILL 3.4
FOREIGN BANK NOTE 2.3
U.S. GOVERNMENT AGENCY OBLIGATION 1.1
VARIABLE RATE DEMAND NOTES 0.3
TREASURY PLUS MONEY
MARKET FUND
% OF
SECTOR PORTFOLIO
U.S. TREASURY BILLS 49.1%
REPURCHASE AGREEMENTS 30.2
U.S. GOVERNMENT AGENCY OBLIGATIONS 13.1
U.S. GOVERNMENT GUARANTEED OBLIGATIONS 7.6
U.S. GOVERNMENT MONEY
MARKET FUND
% OF
SECTOR PORTFOLIO
REPURCHASE AGREEMENTS 62.3%
U.S. GOVERNMENT AGENCY OBLIGATIONS 19.8
VARIABLE RATE DEMAND NOTES 12.8
U.S. GOVERNMENT GUARANTEED OBLIGATIONS 5.1
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
2/1/12 7/31/12 RATIOS PERIOD*
--------------------------------------------------------------------------------------
CALIFORNIA TAX-FREE MONEY MARKET FUND
--------------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares $1,000.00 $1,000.10 0.22% $ 1.09
Class A Shares 1,000.00 1,000.10 0.22% 1.09
Class S Shares 1,000.00 1,000.10 0.22% 1.09
HYPOTHETICAL
Fiduciary Shares $1,000.00 $1,023.77 0.22% $ 1.11
Class A Shares 1,000.00 1,023.77 0.22% 1.11
Class S Shares 1,000.00 1,023.77 0.22% 1.11
--------------------------------------------------------------------------------------
DIVERSIFIED MONEY MARKET FUND
--------------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares $1,000.00 $1,000.10 0.34% $ 1.68
Class A Shares 1,000.00 1,000.10 0.34% 1.68
Class S Shares 1,000.00 1,000.10 0.34% 1.68
HYPOTHETICAL
Fiduciary Shares $1,000.00 $1,023.19 0.34% $ 1.70
Class A Shares 1,000.00 1,023.19 0.34% 1.70
Class S Shares 1,000.00 1,023.19 0.34% 1.70
BEGINNING ENDING NET EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE AT VALUE AT EXPENSE DURING
2/1/12 7/31/12 RATIOS PERIOD*
--------------------------------------------------------------------------------------
TREASURY PLUS MONEY MARKET FUND
--------------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares $1,000.00 $1,000.00 0.13% $ 0.65
Class A Shares 1,000.00 1,000.00 0.13% 0.65
Class S Shares 1,000.00 1,000.00 1.03% 5.12
HYPOTHETICAL
Fiduciary Shares $1,000.00 $1,024.22 0.13% $ 0.65
Class A Shares 1,000.00 1,024.22 0.13% 0.65
Class S Shares 1,000.00 1,024.52 1.03% 5.17
--------------------------------------------------------------------------------------
U.S. GOVERNMENT MONEY MARKET FUND
--------------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares $1,000.00 $1,000.10 0.15% $ 0.75
Class A Shares 1,000.00 1,000.10 0.15% 0.75
Class B Shares 1,000.00 1,000.10 0.16% 0.80
Class C Shares 1,000.00 1,000.10 0.15% 0.75
Class S Shares 1,000.00 1,000.10 0.15% 0.75
HYPOTHETICAL
Fiduciary Shares $1,000.00 $1,024.12 0.15% $ 0.75
Class A Shares 1,000.00 1,024.12 0.15% 0.75
Class B Shares 1,000.00 1,024.07 0.16% 0.81
Class C Shares 1,000.00 1,024.12 0.15% 0.75
Class S Shares 1,000.00 1,024.12 0.15% 0.75
4 HIGHMARK(R) FUNDS
BEGINNING ENDING NET EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE AT VALUE AT EXPENSE DURING
2/1/12 7/31/12 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 1,000.00 0.07% 0.35
Class S Shares 1,000.00 1,000.00 0.07% 0.35
HYPOTHETICAL
Fiduciary Shares $1,000.00 $1,024.52 0.07% $ 0.35
Class A Shares 1,000.00 1,024.52 0.07% 0.35
Class S Shares 1,000.00 1,024.52 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 182/366 (to
reflect the one half year period).
HIGHMARK(R) FUNDS 5
SCHEDULE OF INVESTMENTS
JULY 31, 2012
CALIFORNIA TAX-FREE MONEY MARKET FUND
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - 100.0%
--------------------------------------------------------------------------------
CALIFORNIA - 90.1%
ABAG, Multi-Family Housing Finance
Authority, Non-Profit, Episcopal
Homes Foundation, COP, LOC Wells
Fargo Bank N.A. (A) (B) (C)
0.120%, 02/01/25 $ 4,410,000 $ 4,410,000
Alameda County, Industrial
Development Authority Revenue,
Ettore Products Company Project,
Ser A, RB, AMT, LOC Comerica
Bank (A) (B) (C)
0.220%, 12/01/30 4,000,000 4,000,000
Bay Area Toll Authority,
Ser B-2, RB, LOC JPMorgan Chase
Bank NA (A) (B) (C)
0.110%, 04/01/47 8,000,000 8,000,000
Ser C-4, RB, LOC Lloyds TSB Bank PLC
0.120%, 04/01/45 6,600,000 6,600,000
California Infrastructure & Economic
Development Bank, California
Academy, Ser E, RB LOC Northern
Trust Co. (A) (B) (C)
0.120%, 09/01/38 7,220,000 7,220,000
Jewish Community Center, Ser A,
RB, LOC Bank of America N.A. (C)
0.190%, 12/01/31 12,605,000 12,605,000
Los Angeles Museum, Ser A, RB,
LOC Wells Fargo Bank N.A. (C)
0.120%, 09/01/37 1,700,000 1,700,000
Pacific Gas & Electric, Ser C, RB
0.120%, 12/01/16 8,700,000 8,700,000
California Municipal Finance
Authority Westmont College,
Ser A, RB, LOC Comerica
Bank (A) (B) (C)
0.210%, 01/01/40 5,000,000 5,000,000
California Pollution Control Financing
Authority, (A) (B) (C)
Pacific Gas & Electric, Ser B, RB,
AMT, LOC JPMorgan Chase Bank
0.200%, 11/01/26 5,800,000 5,800,000
Ser C, RB, LOC JPMorgan Chase Bank
0.160%, 11/01/26 18,300,000 18,300,000
Resource Recovery, Wadham Energy,
Ser C, RB, AMT, LOC BNP Paribas
0.590%, 11/01/17 11,500,000 11,500,000
California State Ser A,
Sub-Ser A-1-2, GO, LOC Royal
Bank of Canada (A) (B) (C)
0.110%, 05/01/40 23,000,000 23,000,000
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
Ser A, Sub-Ser A-2-2, GO, LOC Royal
Bank of Canada
0.110%, 05/01/40 $23,900,000 $ 23,900,000
California State Health Facilities
Financing Authority,
Ser B, RB, LOC JPMorgan
Chase Bank (A) (B) (C)
0.130%, 10/01/40 1,100,000 1,100,000
California State,
Kindergarten, (A) (B) (C)
Ser B-1, GO, LOC Citibank N.A.
0.120%, 05/01/34 3,750,000 3,750,000
Ser B-2, GO, LOC Citibank N.A.
0.130%, 05/01/34 1,300,000 1,300,000
Ser B-4, GO, LOC Citibank N.A.
0.140%, 05/01/34 6,900,000 6,900,000
California State, Educational
Facilities
Authority, California Institute of
Technology, RB, Institute
Guaranteed (A) (B) (C)
0.120%, 01/01/24 19,000,000 19,000,000
California State, Housing Finance
Agency, Multi-Family Housing,
Ser B, RB, FNMA Insured (A) (B) (C)
0.140%, 02/01/35 9,700,000 9,700,000
California Statewide, Communities
Development Authority, Redlands
Community Hospital,
Ser B, RB, LOC JPMorgan
Chase Bank (A) (B) (C)
0.160%, 04/01/29 3,250,000 3,250,000
Chino Basin Regional Financing
Authority, Inland Empire Utilities,
Ser B, RB LOC Lloyds TSB Bank
PLC (A) (B) (C)
0.180%, 06/01/32 17,030,000 17,030,000
Contra Costa County, Multi-Family
Mortgage Revenue, RB, FNMA
Insured (A) (B) (C)
0.140%, 11/15/22 8,100,000 8,100,000
Irvine Ranch Water District,
District Nos. 140-240-105-250,
Special Assignment, LOC Bank of
New York Mellon (A) (B) (C)
0.090%, 04/01/33 1,400,000 1,400,000
Special Assignment, LOC Bank of
New York Mellon (A) (B) (C)
0.100%, 08/01/16 1,100,000 1,100,000
Irvine, Improvement Bond Act 1915,
Special Assessment, Assessment
District 94-13, LOC State Street
Bank & Trust Co. (A) (B) (C)
0.110%, 09/02/22 500,000 500,000
The accompanying notes are an integral part of the financial statements.
6 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2012
CALIFORNIA TAX-FREE MONEY MARKET FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
Irvine, Ranch Water District,
Consolidated Improvement District,
GO, Ser A LOC U.S. Bank
N.A. (A) (B) (C)
0.100%, 10/01/41 $ 4,000,000 $ 4,000,000
Livermore, COP, Capital Projects, LOC
U.S. Bank N.A. (A) (B) (C)
0.140%, 10/01/30 4,715,000 4,715,000
Livermore, Multi-Family Housing
Authority, Mortgage Portola, RB,
AMT, FHLMC Insured (A) (B) (C)
0.170%, 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)
0.130%, 04/15/28 7,000,000 7,000,000
Los Angeles County Metropolitan
Transportation Authority (A) (B) (C)
Ser A-2, RB, LOC MizuHo Corp.
0.140%, 07/01/23 27,850,000 27,850,000
Los Angeles County, TRAN, Ser C, GO
2.000%, 06/28/13 4,000,000 4,065,136
Los Angeles, Wastewater System
Revenue Sub-Ser C, RB, LOC
JP Morgan Chase Bank NA (A) (B) (C)
0.140%, 06/01/28 940,000 940,000
Los Angeles, Department of Water &
Power, (A) (B) (C)
Sub-Ser B-3, SPA Wells Fargo
Bank, N.A. 0.150%, 07/01/34 6,200,000 6,200,000
Waterworks Revenue, Sub-Ser B-4,
RB, SPA Wells Fargo Bank N.A.
0.130%, 07/01/35 7,500,000 7,500,000
Los Angeles, Multi-Family Housing
Authority, Fountain Park Phase II,
Ser B, RB, AMT, FNMA
Insured (A) (B) (C)
0.150%, 03/15/34 1,000,000 1,000,000
Manhattan Beach, COP, LOC Bank of
America N.A. (A) (B) (C)
0.220%, 08/01/32 3,480,000 3,480,000
Metropolitan, Water District of
Southern California, (A) (B) (C)
Waterworks Revenue, Ser B, RB, SPA
Landesbank Hessen
0.150%, 07/01/28 16,000,000 15,999,491
Waterworks Revenue, Ser C, RB, SPA
Landesbank Hessen
0.140%, 07/01/28 23,100,000 23,100,000
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
Orange County, Apartment
Development Revenue, WLCO LF
Partners, Ser G-1, RB, FNMA
Insured (A) (B) (C)
0.130%, 11/15/28 $ 9,300,000 $ 9,300,000
Pittsburg, Public Financing
Authority,
RB, LOC Bank of the
West (A) (B) (C)
0.310%, 06/01/35 16,245,000 16,245,000
Rancho, Water District Community
Facilities District No. 89-5, Special
Tax (A) (B) (C), LOC Wells Fargo, N.A.
0.120%, 09/01/28 6,100,000 6,100,000
Riverside County Transportation
Commission Tax Ser B, RB (A) (B) (C),
LOC JPMorgan Chase
0.150%, 06/01/29 5,775,000 5,775,000
Riverside County, Public Facilities, Ser
B, COP, LOC State Street Bank &
Trust Co. (A) (B) (C)
0.140%, 12/01/15 1,950,000 1,950,000
Sacramento County,
Sanitation District, Financing
Authority, Subordinate Lien, Ser E,
RB, LOC U.S. Bank N.A. (A)(B) (C)
0.150%, 12/01/40 5,500,000 5,500,000
Special Facilities Airport Revenue,
Cessna Aircraft Company Project,
RB, LOC Bank of America N.A.
0.330%, 11/02/28 7,000,000 7,000,000
San Diego County, Regional
Transportation Commission,
Limited Tax, Ser B, RB, SPA
JPMorgan Chase Bank (A) (B) (C)
0.160%, 04/01/38 8,275,000 8,275,000
San Francisco City &
County, (A) (B) (C)
Finance Corporation Lease,
Moscone Center, Ser 2008-2, RB,
LOC State Street Bank & Trust Co.
0.130%, 04/01/30 5,280,000 5,280,000
Folsom-Dore Apartment Project,
RB, AMT LOC Citibank N.A.
0.230%, 12/01/34 2,700,000 2,700,000
San Francisco City & County, Airports
Commission, Ser 36-C, RB, LOC
U.S. Bank N.A. (A) (B) (C)
0.150%, 05/01/26 5,875,000 5,875,000
San Jose, Redevelopment Agency,
Merged Area Redevelopment
Project, Ser B, RB LOC JPMorgan
Chase Bank (A) (B) (C)
0.150%, 08/01/32 2,600,000 2,600,000
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 7
SCHEDULE OF INVESTMENTS
JULY 31, 2012
CALIFORNIA TAX-FREE MONEY MARKET FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
CALIFORNIA - (CONTINUED)
San Rafael Redevelopment Agency,
Fairfax Standard Apartments,
Ser A, RB, LOC Citibank N.A. (A) (B) (C)
0.280%, 09/01/31 $ 1,500,000 $ 1,500,000
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)
0.140%, 08/01/15 350,000 350,000
Southern California, Public Power
Authority, Electric Power and Light
Revenue, Magnolia Power Project,
Ser A, RB, LOC U.S. Bank
N.A. (A) (B) (C) 0.140%, 07/01/36 31,770,000 31,770,000
Tustin Unified School District
Community Facility District No.
07-1, LOC Bank of
America, N.A. (A) (B) (C)
0.160%, 09/01/50 23,700,000 23,700,000
University of California Regents
Medical Center Pooled,
Ser B-1, RB (A) (B)
0.130%, 05/15/32 500,000 500,000
Vallejo, Multi-Family Housing
Authority, RB, FNMA
Insured (A) (B) (C)
0.190%, 05/15/22 4,000,000 4,000,000
Vallejo, Water Revenue, Ser A, RB, LOC
JPMorgan Chase
Bank (A) (B) (C)
0.190%, 06/01/31 16,980,000 16,980,000
Whittier, Healthcare Facilities,
Presbyterian Intercommunity,
Ser B, RB, LOC U.S. Bank
N.A. (A) (B) (C)
0.120%, 06/01/36 2,800,000 2,800,000
------------
478,289,627
------------
NEW JERSEY - 3.3%
New Jersey Housing & Mortgage
Finance Agency
AMT, Ser A, RB SPA, Lloyds Bank,
PLC, (A) (B) (C)
0.450%, 05/01/28 17,500,000 17,500,000
------------
PENNSYLVANIA - 4.2%
Pennsylvania Turnpike
Commission,
AGM Insured, SPA JPMorgan
Chase (A) (B) (C)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
--------------------------------------------------------------------------------
PENNSYLVANIA -(CONTINUED)
Ser B, RB
0.350%, 07/15/41 12,600,000 12,600,000
Ser D, RB
0.320%, 07/15/41 9,800,000 9,800,000
------------
22,400,000
------------
PUERTO RICO - 0.4%
Puerto Rico Commonwealth, Public
Improvement, Series C-5-2, RB,
AGM Insured, LOC Barclays Bank PLC
(A) (B) (C)
0.160%, 07/01/20 $ 2,000,000 $ 2,000,000
------------
WISCONSIN - 2.0%
Wisconsin Housing & Economic
Development Authority Ser C, RB,
AMT, SPA BNP
Paribas (A) (B) (C)
1.000%, 09/01/23 10,500,000 10,500,000
------------
TOTAL MUNICIPAL BONDS
(Cost $530,689,627) 530,689,627
------------
--------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANIES - 0.0%
--------------------------------------------------------------------------------
BlackRock Liquidity Funds,
California Money Fund 113,155 113,155
Goldman Sachs Institutional Liquid
Assets Tax-Exempt
California Portfolio 6,450 6,450
------------
TOTAL REGISTERED INVESTMENT COMPANIES
(Cost $119,605) 119,605
------------
TOTAL INVESTMENTS - 100.0%
(Cost $530,809,232) + 530,809,232
------------
OTHER ASSETS & LIABILITIES, NET - 0.0% 15,722
------------
NET ASSETS - 100.0% $530,824,954
============
--------------------------------------------------------------------------------
+ AT JULY 31, 2012, COST IS IDENTICAL FOR BOOK AND FEDERAL INCOME TAX
PURPOSES.
(A) FLOATING RATE SECURITY. RATE DISCLOSED IS AS OF JULY 31, 2012.
(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, 2012.
(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
The accompanying notes are an integral part of the financial statements.
8 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2012
CALIFORNIA TAX-FREE MONEY MARKET FUND (CONCLUDED)
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
NA - NATIONAL ASSOCIATION
PLC - PUBLIC LIABILITY COMPANY
RB - REVENUE BOND
SER - SERIES
SPA - STANDBY PURCHASE AGREEMENT
TRAN - TAX AND REVENUE ANTICIPATION NOTE
A summary of the inputs used to value the Fund's net assets as of July 31, 2012
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
07/31/12 PRICE INPUTS INPUTS
------------- ------------ -------------- ------------
Municipal Bonds $ 530,689,627 $ -- $ 530,689,627 $ --
Registered Investment Companies 119,605 119,605 -- --
------------- ------------ -------------- ------------
Total: $ 530,809,232 $ 119,605 $ 530,689,627 $ --
============= ============ ============== ============
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 9
SCHEDULE OF INVESTMENTS
JULY 31, 2012
DIVERSIFIED MONEY MARKET FUND
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMERCIAL PAPER - DISCOUNTED* - 31.7%
--------------------------------------------------------------------------------
ASSET-BACKED SECURITY - DIVERSIFIED FINANCIAL ASSETS - 4.5% (A)
Mountcliff Funding LLC
0.400%, 08/01/12 $100,000,000 $ 100,000,000
---------------
TOTAL ASSET-BACKED SECURITY - DIVERSIFIED
FINANCIAL ASSETS
(Cost $100,000,000) 100,000,000
---------------
ASSET-BACKED SECURITIES - CREDIT CARD - 3.7% (A)
White Point Funding Inc.
0.200%, 08/01/12 20,360,000 20,360,000
0.511%, 10/03/12 62,299,000 62,243,398
---------------
TOTAL ASSET-BACKED SECURITIES - CREDIT CARD
(Cost $82,603,398) 82,603,398
---------------
ASSET-BACKED SECURITIES - TRADE RECEIVABLES - 18.0% (A)
Atlantic Asset Securitization LLC
0.200%, 08/01/12 69,937,000 69,937,000
Autobahn Funding Co. LLC
0.200%, 08/01/12 25,000,000 25,000,000
0.491%, 10/03/12 60,000,000 59,948,550
Mont Blanc Capital Corp.
0.270%, 08/07/12 60,000,000 59,997,300
Regency Markets No1. LLC
0.240%, 08/16/12 60,000,000 59,994,000
Sheffield Receivables
0.180%, 08/01/12 15,928,000 15,928,000
Sydney Capital Corp.
0.300%, 09/14/12 35,000,000 34,987,167
0.300%, 10/03/12 30,000,000 29,984,250
Thunder Bay Funding LLC
0.150%, 08/02/12 43,002,000 43,001,821
---------------
TOTAL ASSET-BACKED SECURITIES - TRADE
RECEIVABLES
(Cost $398,778,088) 398,778,088
---------------
BANKING - 3.2%
Louis Dreyfus Commodities LOC:
Barclays Bank
0.350%, 08/01/12 14,000,000 14,000,000
Working Capital Management
0.200%, 08/01/12 (A) 33,100,000 33,100,000
0.230%, 08/20/12 (A) 23,000,000 22,997,208
---------------
TOTAL BANKING
(Cost $70,097,208) 70,097,208
---------------
MULTIPLE INDUSTRY - 2.3%
General Electric Capital Corp.
0.300%, 08/06/12 50,000,000 49,997,917
---------------
TOTAL MULTIPLE INDUSTRY
(Cost $49,997,917) 49,997,917
---------------
TOTAL COMMERCIAL PAPER - DISCOUNTED
(Cost $701,476,611) 701,476,611
---------------
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT - YANKEE - 19.0%
--------------------------------------------------------------------------------
Bank of Nova Scotia Houston
0.496%, 01/04/13 (B) $ 70,000,000 $ 70,000,000
Canadian Imperial Bank of
Commerce NY
0.390%, 08/29/12 (B) 75,000,000 74,999,708
Mizuho Corporate Bank NY
0.400%, 08/01/12 65,000,000 65,000,000
Norinchukin Bank NY
0.400%, 10/10/12 60,000,000 60,000,000
Sumitomo Mitsui Banking NY
0.440%, 09/07/12 (B) (C) 100,000,000 100,000,000
Westpac Banking Corp. NY
0.346%, 08/08/12 (B) 50,000,000 50,000,000
---------------
TOTAL CERTIFICATES OF DEPOSIT - YANKEE
(Cost $419,999,708) 419,999,708
---------------
--------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - 6.2%
--------------------------------------------------------------------------------
AUTOMOTIVE - 3.0%
Toyota Motor Credit Corp., MTN
0.611%, 04/03/13 (B) 66,500,000 66,500,000
---------------
TOTAL AUTOMOTIVE
(Cost $66,500,000) 66,500,000
---------------
BANKING - 3.2%
Bank of Montreal Chicago, MTN
0.819%, 08/05/13 (A) (D) 70,000,000 70,000,000
---------------
TOTAL BANKING
(Cost $70,000,000) 70,000,000
---------------
TOTAL CORPORATE OBLIGATIONS
(Cost $136,500,000) 136,500,000
---------------
--------------------------------------------------------------------------------
FOREIGN BANK NOTE - 2.3%
--------------------------------------------------------------------------------
BANKING - 2.3%
Westpac Banking Corp.,
0.396%, 05/03/13 (A)(B) 50,000,000 50,000,000
---------------
TOTAL FOREIGN BANK NOTE
(Cost $50,000,000) 50,000,000
---------------
--------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATION - 1.1%
--------------------------------------------------------------------------------
FNMA
0.239%, 08/12/13 (B) 25,000,000 24,992,174
---------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATION
(Cost $24,992,174) 24,992,174
---------------
The accompanying notes are an integral part of the financial statements.
10 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2012
DIVERSIFIED MONEY MARKET FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES - 0.3%
--------------------------------------------------------------------------------
U.S. GOVERNMENT - 0.3%
Washington State, Housing
Finance Commission, Multi-
Family Housing, The Lodge at
Eagle Ridge, Ser B, RB, LOC:
FHLB
0.220%, 08/01/41 (C) $ 3,425,000 $ 3,425,000
Winston Salem, NC, COP
0.260%, 11/01/12 (C) (E) 3,000,000 3,000,000
---------------
TOTAL U.S. GOVERNMENT
(Cost $6,425,000) 6,425,000
---------------
TOTAL VARIABLE RATE DEMAND NOTES
(Cost $6,425,000) 6,425,000
---------------
--------------------------------------------------------------------------------
U.S. TREASURY BILL - 3.4%
--------------------------------------------------------------------------------
U.S. Treasury Bill
0.105%, 08/02/12 75,000,000 74,999,781
---------------
TOTAL U.S. TREASURY BILL
(Cost $74,999,781) 74,999,781
---------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 36.0%
--------------------------------------------------------------------------------
Barclays Capital Inc.
0.170%, dated 07/31/12,
matures on 08/01/12,
repurchase price $120,000,567
(collateralized by three U.S.
Treasury obligations, ranging in
par value from $7,100,100 -
$68,080,000, 1.000% - 2.750%,
05/15/14 - 11/30/16, total
market value $122,400,029) 120,000,000 120,000,000
Credit Suisse Securities (USA)
0.150%, dated 07/31/12,
matures on 08/01/12,
repurchase price $90,000,375
(collateralized by a U.S. Treasury
obligation, par value
$91,870,000, 0.250%, 05/15/15,
total market value $91,803,216) 90,000,000 90,000,000
Deuteche Bank Securities
0.170%, dated 07/31/12,
matures on 08/01/12, repurchase
price $286,270,126 (collateralized
by two U.S. Treasury obligations,
par value from $41,248,600 -
$250,455,500, 0.250% - 0.625%,
05/31/14 - 05/31/17, total
market value $291,994,164) 286,268,774 286,268,774
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - (CONTINUED)
--------------------------------------------------------------------------------
Merrill Lynch, Fenner Pierce
& Smith
0.160%, dated 07/31/12,
matures on 08/01/12,
repurchase price $300,001,333
(collateralized by two
U.S. Treasury obligations, par
value from $8,020,500 -
$184,153,700, 1.250% -
6.875%, 02/15/14 - 08/15/25,
total market value
$306,000,005) $300,000,000 $ 300,000,000
---------------
TOTAL REPURCHASE AGREEMENTS
(Cost $796,268,774) 796,268,774
---------------
TOTAL INVESTMENTS - 100.0%
(Cost $2,210,662,048) + 2,210,662,048
---------------
OTHER ASSETS & LIABILITIES, NET - 0.0% 784,992
---------------
NET ASSETS - 100.0% $ 2,211,447,040
===============
--------------------------------------------------------------------------------
* RATE SHOWN REPRESENTS THE MONEY MARKET EQUIVALENT YIELD TO MATURITY AT
PURCHASE.
+ AT JULY 31, 2012, 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, 2012 WAS $757,478,694 AND REPRESENTED 34.3% 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, 2012. THE
DATE REPORTED IS THE FINAL MATURITY.
(C) DEMAND FEATURE - THE ADJUSTABLE RATE REFLECTED IS THE RATE IN EFFECT ON
JULY 31, 2012. THE DATE REPORTED IS THE FINAL MATURITY, NOT THE DATE ON
WHICH PRINCIPAL COULD BE RECOVERED.
(D) VARIABLE RATE/EXTENDABLE SECURITY - THE RATE REFLECTED IS THE RATE IN
EFFECT ON JULY 31, 2012. THE MATURITY DATE REFLECTS THE NEXT DATE ON WHICH
THE PRINCIPAL CAN BE RECOVERED.
(E) SECURITY IS ESCROWED TO MATURITY IN U.S. TREASURIES.
COP - CERTIFICATES OF PARTICIPATION
FHLB - FEDERAL HOME LOAN BANK
FNMA - FEDERAL NATIONAL MORTGAGE ASSOCIATION
LLC - LIMITED LIABILITY COMPANY
LOC - LETTER OF CREDIT
MTN - MEDIUM TERM NOTE
NC - NORTH CAROLINA
NY - NEW YORK
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, 2012
DIVERSIFIED MONEY MARKET FUND (CONCLUDED)
A summary of the inputs used to value the Fund's net assets as of July 31, 2012
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
07/31/12 PRICE INPUTS INPUTS
-------------- --------- -------------- ------------
Investments in Securities ** $2,210,662,048 $ -- $2,210,662,048 $ --
============== ========= ============== ============
** 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, 2012
TREASURY PLUS MONEY MARKET FUND
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 13.1%
--------------------------------------------------------------------------------
FFCB
0.244%, 11/27/12 (A) $ 5,000,000 $ 5,000,000
FNMA
0.239%, 08/12/13 (A) 7,000,000 6,997,809
---------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $11,997,809) 11,997,809
---------------
--------------------------------------------------------------------------------
U.S. GOVERNMENT GUARANTEED OBLIGATIONS - 7.7%
--------------------------------------------------------------------------------
Straight-A Funding, Series 1, FFBLL
0.18%, 10/11/12 * (B) 7,000,000 6,997,515
---------------
TOTAL U.S. GOVERNMENT GUARANTEED OBLIGATIONS
(Cost $6,997,515) 6,997,515
---------------
--------------------------------------------------------------------------------
U.S. TREASURY BILLS ** - 49.1%
--------------------------------------------------------------------------------
U.S. Treasury Bills
0.105%, 08/02/12 25,000,000 24,999,927
0.097%, 10/18/12 10,000,000 9,997,941
0.097%, 10/25/12 10,000,000 9,997,757
---------------
TOTAL U.S. TREASURY BILLS
(Cost $44,995,625) 44,995,625
---------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 30.2%
--------------------------------------------------------------------------------
Barclays Capital
0.170%, dated 07/31/12,
matures on 08/01/12, repurchase
price $15,000,071 (collateralized by a
U.S. Treasury obligation, par value
$12,479,491, 4.750%, 08/15/17, total
market value $15,300,001) 15,000,000 15,000,000
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - (CONTINUED)
--------------------------------------------------------------------------------
Deutsche Bank Securities
0.170%, dated 07/31/12,
matures on 08/01/12, repurchase
price $12,686,251 (collateralized by a
U.S. Treasury obligation, par value
$13,014,100, 0.500%, 07/31/17, total
market value $12,939,920) $ 12,686,191 $ 12,686,191
---------------
TOTAL REPURCHASE AGREEMENTS
(Cost $27,686,191) 27,686,191
---------------
TOTAL INVESTMENTS - 100.1%
(Cost $91,677,140) + 91,677,140
---------------
OTHER ASSETS & LIABILITIES, NET - (0.1)% (49,990)
---------------
NET ASSETS - 100.0% $ 91,627,150
===============
--------------------------------------------------------------------------------
* RATE SHOWN REPRESENTS THE MONEY MARKET EQUIVALENT YIELD TO MATURITY AT
PURCHASE.
** RATE SHOWN REPRESENTS THE BOND EQUIVALENT YIELD TO MATURITY AT PURCHASE.
+ AT JULY 31, 2012, 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, 2012. 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, 2012 WAS $6,997,515 AND REPRESENTED 7.7% OF NET ASSETS.
FFBLL - FEDERAL FINANCING BANK LIQUIDITY LOAN
FFCB - FEDERAL FARM CREDIT BANK
FNMA - FEDERAL NATIONAL MORTGAGE ASSOCIATION
A summary of the inputs used to value the Fund's net assets as of July 31, 2012
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
07/31/12 PRICE INPUTS INPUTS
-------------- --------- -------------- ------------
Investments in Securities *** $ 91,677,140 $ -- $ 91,677,140 $ --
============== ========= ============== ============
*** 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, 2012
U.S. GOVERNMENT MONEY MARKET FUND
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 19.8%
--------------------------------------------------------------------------------
FFCB
0.244%, 11/27/12 (A) $50,000,000 $ 50,000,000
0.229%, 08/15/14 (A) 50,000,000 49,979,877
FHLMC
0.196%, 06/03/13 (A) 50,000,000 49,983,093
FNMA
0.239%, 08/12/13 (A) 75,000,000 74,976,522
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $224,939,492) 224,939,492
------------
--------------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES - 12.8%
--------------------------------------------------------------------------------
California, Milpitas Multi-Family
Housing Revenue Crossing,
Ser A, RB Guarantee: FNMA (B)
0.150%, 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)
0.190%, 07/15/35 1,150,000 1,150,000
California, San Francisco, City &
County Redevelopment, Ser D,
RB Guarantee: FNMA (B)
0.170%, 06/15/34 26,050,000 26,050,000
California, Simi Valley, Multi-
Family Housing Revenue,
Parker Ranch, Ser A, RB
Guarantee: FNMA (B)
0.200%, 07/15/36 500,000 500,000
California, Statewide Community
Development Authority, Palms
Apartments, Ser C, RB
Guarantee: FNMA (B)
0.180%, 05/15/35 3,200,000 3,200,000
New York City Housing
Development, Multi-Family
Mortgage Revenue, Pearl
Street Development, Ser B, RB
Guarantee: FNMA (B)
0.180%, 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
0.180%, 04/15/36 2,435,000 2,435,000
Nicole, Ser B, RB
Guarantee: FNMA
0.160%, 11/15/35 4,570,000 4,570,000
West Street, Ser B, RB
Guarantee: FNMA
0.180%, 03/15/36 7,100,000 7,100,000
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES - (CONTINUED)
--------------------------------------------------------------------------------
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 16,180,000 16,180,000
New York State, Housing
Finance
Agency Revenue, (B)
11th Avenue Housing, Ser B,
RB Guarantee: FNMA
0.180%, 05/15/41 5,100,000 5,100,000
38th Street, Ser B, RB
Guarantee: FNMA
0.200%, 05/15/33 9,000,000 9,000,000
Biltmore Tower Housing,
Ser B, RB Guarantee: FNMA
0.180%, 05/15/34 805,000 805,000
North End, Ser B, RB
Guarantee: FNMA
0.180%, 11/15/36 2,500,000 2,500,000
Ser B, RB Guarantee: FNMA
0.180%, 05/15/33 12,400,000 12,400,000
Tower 31 Housing, Ser A, RB
Guarantee: FHLMC
0.180%, 11/01/36 2,700,000 2,700,000
West 33rd Street, Ser B, RB
Guarantee: FNMA
0.160%, 11/15/36 4,200,000 4,200,000
Pennsylvania, Montgomery
County, Redevelopment
Authority, Kingswood
Apartments Project, Ser A, RB
Guarantee: FNMA (B)
0.220%, 08/15/31 5,505,000 5,505,000
Virginia, Chesapeake,
Redevelopment & Housing
Authority, Multi-Family
Housing Revenue, Alta Great
Bridge, Ser A, RB Guarantee:
FNMA (B)
0.240%, 01/15/41 1,625,000 1,625,000
Washington State Housing
Finance Commission, Multi-
Family Housing Revenue, (B)
Ballard Landmark, Ser B, RB
Guarantee: FHLB
0.210%, 12/15/41 3,510,000 3,510,000
Bridgewood Project, Ser B, RB
Guarantee: FNMA
0.190%, 09/01/34 3,060,000 3,060,000
Highland Park Apartments,
Ser B, RB Guarantee: FNMA
0.190%, 07/15/38 1,650,000 1,650,000
The accompanying notes are an integral part of the financial statements.
14 HIGHMARK(R) FUNDS
SCHEDULE OF INVESTMENTS
JULY 31, 2012
U.S. GOVERNMENT MONEY MARKET FUND (CONTINUED)
--------------------------------------------------------------------------------
Description Par Value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES - (CONTINUED)
--------------------------------------------------------------------------------
Pinehurst Apartments Project,
Ser B, RB Guarantee: FNMA
0.190%, 03/15/39 $ 1,360,000 $ 1,360,000
Ranier Court Project, Ser B, RB
Guarantee: FNMA
0.180%, 12/15/36 3,210,000 3,210,000
Rolling Hills Project, Ser B, RB
Guarantee: FNMA
0.190%, 06/15/37 1,915,000 1,915,000
------------
TOTAL VARIABLE RATE DEMAND NOTES
(Cost $145,550,000) 145,550,000
------------
--------------------------------------------------------------------------------
U.S. GOVERNMENT GUARANTEED OBLIGATIONS - 5.1%
--------------------------------------------------------------------------------
Citibank N.A., Guarantee: FDIC (A)
0.467%, 11/15/12 12,000,000 12,012,156
Straight-A Funding,
Series 1, FFBLL * (C)
0.18%, 10/11/12 45,311,000 45,294,915
------------
TOTAL U.S. GOVERNMENT GUARANTEED OBLIGATIONS
(Cost $57,307,071) 57,307,071
------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 62.3%
--------------------------------------------------------------------------------
Barclays Capital
0.170%, dated 07/31/12,
matures on 08/01/12,
repurchase price $120,000,567
(collateralized by two
U.S. Treasury obligations, par
value from $47,379,100, -
$66,518,800, 1.000% -
3.125%, 05/15/14 - 05/15/21,
total market value
$ 122,400,062) 120,000,000 120,000,000
Credit Suisse Securities (USA)
0.150%, dated 07/31/12,
matures on 08/01/12,
repurchase price
$90,000,375
(collateralized by a
U.S. Treasury obligation, par
value $91,870,000, 0.250%,
05/15/15, total market value
$91,803,216) 90,000,000 90,000,000
Deutsche Bank Securities
0.170%, dated 07/31/12,
matures on 08/01/12,
repurchase price
$220,440,109
(collateralized by a
U.S. Treasury obligation, par
value $213,164,400, 2.000%,
11/15/21, total market value
$224,847,894) 220,439,068 220,439,068
----------------------------------------------------------------------------------
Description Par Value
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - (CONTINUED)
----------------------------------------------------------------------------------
Deutsche Bank Securities
0.180% dated 07/31/12,
matures on 08/01/12,
repurchase price $220,001,100
(collateralized by a U.S. agency
obligation, par value
$219,523,000, 1.250%,
02/27/14, total market value
$224,400,191) $220,000,000 $ 220,000,000
Goldman, Sachs
0.170%, dated 07/31/12,
matures on 08/01/12,
repurchase price $55,000,260
(collateralized by a U.S. agency
obligation, par value
$56,134,000, 0.000%,
01/23/13, total market value
$56,100,881) 55,000,000 55,000,000
--------------
TOTAL REPURCHASE AGREEMENTS
(Cost $705,439,068) 705,439,068
--------------
TOTAL INVESTMENTS - 100.0%
(Cost $1,133,235,631) + 1,133,235,631
--------------
OTHER ASSETS & LIABILITIES, NET - 0.0% (459,162)
--------------
NET ASSETS - 100.0% $1,132,776,469
==============
--------------------------------------------------------------------------------
* RATE SHOWN REPRESENTS THE MONEY MARKET EQUIVALENT YIELD TO MATURITY AT
PURCHASE.
+ AT JULY 31, 2012, 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, 2012. THE
DATE REPORTED IS THE FINAL MATURITY.
(B) DEMAND FEATURE--RATE SHOWN IS AS OF REPORT DATE AND MATURITIES SHOWN ARE
THE FINAL MATURITIES, NOT THE DATE ON WHICH PRINCIPAL COULD BE RECOVERED
THROUGH THE DEMAND FEATURE.
(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, 2012 WAS $45,294,915 AND REPRESENTED 4.0% 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
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 15
SCHEDULE OF INVESTMENTS
JULY 31, 2012
U.S. GOVERNMENT MONEY MARKET FUND (CONCLUDED)
A summary of the inputs used to value the Fund's net assets as of July 31, 2012
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
07/31/12 PRICE INPUTS INPUTS
-------------- ------------ -------------- ------------
Investments in Securities ** $1,133,235,631 $ -- $1,133,235,631 $ --
============== ============ ============== ============
** 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, 2012
100% U.S. TREASURY MONEY MARKET FUND
------------------------------------------------------------------
Description Par Value
------------------------------------------------------------------
------------------------------------------------------------------
U.S. TREASURY BILLS* - 126.6%
------------------------------------------------------------------
U.S. Treasury Bills
0.052%, 08/02/12 $ 207,425,000 $ 207,424,706
0.071%, 08/09/12 50,000,000 49,999,222
0.076%, 08/16/12 65,000,000 64,997,968
0.087%, 08/23/12 150,000,000 149,992,178
0.080%, 08/30/12 200,000,000 199,987,573
0.086%, 09/13/12 25,000,000 24,997,462
0.097%, 09/27/12 75,000,000 74,988,719
0.097%, 10/18/12 75,000,000 74,984,562
0.097%, 10/25/12 30,000,000 29,993,271
0.112%, 11/01/12 75,000,000 74,979,146
-------------
TOTAL U.S. TREASURY BILLS
(Cost $952,344,807) 952,344,807
-------------
TOTAL INVESTMENTS - 126.6%
(Cost $952,344,807) + 952,344,807
-------------
OTHER ASSETS & LIABILITIES, NET - (26.6)% (200,036,941)
-------------
NET ASSETS - 100.0% $ 752,307,866
=============
--------------------------------------------------------------------------------
* RATE SHOWN REPRESENTS THE BOND EQUIVALENT YIELD TO MATURITY AT PURCHASE.
+ AT JULY 31, 2012, COST IS IDENTICAL FOR BOOK AND FEDERAL INCOME TAX
PURPOSES.
A summary of the inputs used to value the Fund's net assets as of July 31, 2012
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
07/31/12 PRICE INPUTS INPUTS
------------- ------------ -------------- ------------
Investments in Securities ** $ 952,344,807 $ -- $ 952,344,807 $ --
============= ============ ============== ============
** See schedule of investments detail for security type breakout.
The accompanying notes are an integral part of the financial statements.
HIGHMARK(R) FUNDS 17
STATEMENTS OF ASSETS AND LIABILITIES
JULY 31, 2012
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 + ................ $ 530,809,232 $1,414,393,274 $ 63,990,949 $ 427,796,563 $ 952,344,807
Repurchase Agreements, at Value + ...... -- 796,268,774 27,686,191 705,439,068 --
Cash ................................... -- -- -- -- 146
Receivable for Fund Shares Sold ........ -- 1,182,317 -- 79,276 161
Accrued Income ......................... 139,977 571,116 1,229 53,132 --
Prepaid Expenses ....................... 13,709 53,150 8,389 38,760 27,391
Deferred Compensation .................. 39,000 208,984 10,570 78,279 85,986
Due from Affiliates .................... 4,053 3,523 1,016 1,801 1,269
-------------- -------------- -------------- -------------- --------------
TOTAL ASSETS ........................ 531,005,971 2,212,681,138 91,698,344 1,133,486,879 952,459,760
-------------- -------------- -------------- -------------- --------------
LIABILITIES:
Payable for Fund Shares Redeemed ....... -- 332,016 -- 386,958 199,971,854
Income Distribution Payable ............ 1,977 26,869 340 2,870 829
Investment Adviser Fees Payable ........ -- 149,134 6,522 3,253 4,939
Administration Fees Payable ............ 57,578 275,651 -- 93,170 --
Custodian Fees Payable ................. 2,862 11,475 904 5,642 3,371
Audit Fees Payable ..................... 30,955 41,195 29,031 34,687 31,620
Deferred Compensation Payable .......... 39,000 208,984 10,570 78,279 85,986
Transfer Agent Fees Payable ............ 8,102 30,471 3,008 17,516 10,108
Printing Fees Payable .................. 18,305 81,914 6,447 40,971 21,156
Trustees Fees Payable .................. 3,381 15,439 1,134 7,708 3,913
Accrued Distribution Fees .............. -- -- -- 5 --
Accrued Expenses and Other Payables .... 18,857 60,950 13,238 39,351 18,118
-------------- -------------- -------------- -------------- --------------
TOTAL LIABILITIES ................... 181,017 1,234,098 71,194 710,410 200,151,894
-------------- -------------- -------------- -------------- --------------
NET ASSETS ....................... $ 530,824,954 $2,211,447,040 $ 91,627,150 $1,132,776,469 $ 752,307,866
============== ============== ============== ============== ==============
NET ASSETS:
Paid-in Capital (unlimited authorized--
no par value) ....................... $ 530,775,077 $2,211,468,087 $ 91,626,933 $1,132,778,146 $ 752,390,967
Undistributed Net Investment Income .... 49,877 -- 217 -- --
Accumulated Net Realized Gain (Loss) on
Investments ......................... -- (21,047) -- (1,677) (83,101)
-------------- -------------- -------------- -------------- --------------
NET ASSETS ....................... $ 530,824,954 $2,211,447,040 $ 91,627,150 $1,132,776,469 $ 752,307,866
============== ============== ============== ============== ==============
+ Cost of Investments and Repurchase
Agreements .......................... $ 530,809,232 $2,210,662,048 $ 91,677,140 $1,133,235,631 $ 952,344,807
Amounts designated as "--" are either not applicable or less than $1.00.
The accompanying notes are an integral part of the financial statements.
18 HIGHMARK(R) FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
JULY 31, 2012
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 ............................. $ 225,544,480 $1,755,369,988 $ 88,019,479 $ 926,242,463 $ 496,224,283
Shares of beneficial interest
outstanding ......................... 225,523,792 1,755,390,229 88,019,439 926,264,674 496,327,381
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE ........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============== ============== ============== ============== ==============
CLASS A SHARES:
Net Assets ............................. $ 290,442,590 $ 363,289,054 $ 3,607,571 $ 43,337,099 $ 179,088,284
Shares of beneficial interest
outstanding ......................... 290,420,391 363,289,476 3,607,569 43,338,235 179,136,062
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 $ 9,070 N/A
Shares of beneficial interest
outstanding ......................... N/A N/A N/A 9,070 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 $ 1,508,894 N/A
Shares of beneficial interest
outstanding ......................... N/A N/A N/A 1,508,915 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 ............................. $ 14,837,884 $ 92,787,998 $ 100 $ 161,678,943 $ 76,995,299
Shares of beneficial interest
outstanding ......................... 14,836,336 92,788,496 100 161,682,655 77,016,534
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.
HIGHMARK(R) FUNDS 19
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JULY 31, 2012
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 ........................... $ 1,275,622 $ 9,018,800 $ 195,234 $ 1,670,001 $ 253,721
-------------- -------------- -------------- -------------- --------------
Total Investment Income ............. 1,275,622 9,018,800 195,234 1,670,001 253,721
-------------- -------------- -------------- -------------- --------------
Expenses:
Investment Adviser Fees ................ 1,555,443 7,029,797 517,011 3,493,594 1,806,767
Shareholder Servicing Fees Fiduciary
Shares .............................. 591,333 4,662,680 414,707 2,431,565 941,599
Shareholder Servicing Fees Class A
Shares .............................. 668,204 962,233 16,136 119,222 310,080
Shareholder Servicing Fees Class B
Shares .............................. -- -- -- 160 --
Administration Fees .................... 777,529 3,513,988 257,495 1,746,223 900,510
Custodian Fees ......................... 32,405 146,454 10,771 72,783 37,641
Trustees Fees .......................... 34,710 160,489 12,377 79,056 37,536
Chief Compliance Officer Fees .......... 8,860 8,860 8,860 8,860 8,860
Distribution Fees Class A Shares ....... 668,204 962,233 16,136 119,222 310,080
Distribution Fees Class B Shares ....... -- -- -- 481 --
Distribution Fees Class C Shares ....... -- -- -- 3,549 --
Distribution Fees Class S Shares ....... 80,667 513,153 -- 792,014 558,713
Registration Fees ...................... 12,751 42,846 12,847 61,466 39,786
Transfer Agent Fees .................... 51,054 191,309 19,297 119,540 60,054
Printing Fees .......................... 54,735 229,749 22,793 114,418 57,958
Audit Fees ............................. 32,861 47,178 29,502 37,351 31,420
Legal Fees ............................. 60,080 270,304 21,025 141,813 60,054
Miscellaneous Fees ..................... 49,857 135,950 46,973 94,821 44,293
-------------- -------------- -------------- -------------- --------------
Total Expenses ...................... 4,678,693 18,877,223 1,405,930 9,436,138 5,205,351
-------------- -------------- -------------- -------------- --------------
Less: Waivers and Reimbursements
Investment Adviser Fee Waiver ....... (1,370,214) (3,147,718) (515,782) (3,335,756) (1,806,767)
Shareholder Servicing Fee Waiver--
Fiduciary Shares (Note 3) ........ (591,277) (4,662,680) (414,707) (2,431,290) (941,599)
Shareholder Servicing Fee Waiver--
Class A Shares (Note 3) .......... (668,141) (962,233) (16,136) (119,215) (310,080)
Shareholder Servicing Fee Waiver--
Class B Shares (Note 3) .......... -- -- -- (159) --
Distribution Fee Waiver--Class A
Shares (Note 3) .................. (668,204) (962,233) (16,136) (119,205) (310,080)
Distribution Fee Waiver--Class B
Shares (Note 3) .................. -- -- -- (481) --
Distribution Fee Waiver--Class C
Shares (Note 3) .................. -- -- -- (3,549) --
Distribution Fee Waiver--Class S
Shares (Note 3) .................. (80,663) (513,153) -- (791,981) (558,713)
Administration Fee
Waiver ........................... (76,436) -- (252,233) (1,010,313) (900,510)
Reimbursement of Expenses by
Adviser .......................... -- -- -- -- (138,990)
-------------- -------------- -------------- -------------- --------------
Total Waivers and Reimbursements .......... (3,454,935) (10,248,017) (1,214,994) (7,811,949) (4,966,739)
-------------- -------------- -------------- -------------- --------------
Total Net Expenses ........................ 1,223,758 8,629,206 190,936 1,624,189 238,612
-------------- -------------- -------------- -------------- --------------
Net Investment Income ..................... 51,864 389,594 4,298 45,812 15,109
-------------- -------------- -------------- -------------- --------------
Net Realized Gain (Loss) on Investments ... 22 (21,047) 42 54 (4,089)
-------------- -------------- -------------- -------------- --------------
Increase in Net Assets Resulting from
Operations ............................. $ 51,886 $ 368,547 $ 4,340 $ 45,866 $ 11,020
============== ============== ============== ============== ==============
Amounts designated as "--" are either not applicable or less than $1.00.
The accompanying notes are an integral part of the financial statements.
20 HIGHMARK(R) FUNDS
This Page Left Blank Intentionally.
HIGHMARK(R) FUNDS 21
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED JULY 31,
CALIFORNIA TAX-FREE
MONEY MARKET FUND
-----------------------------
2012 2011
------------- --------------
Investment Activities:
Net Investment Income ......................................................... $ 51,864 $ 190,167
Net Realized Gain (Loss) on Investments ....................................... 22 564
------------- --------------
Net Increase in Net Assets Resulting From Operations .......................... 51,886 190,731
------------- --------------
Dividends and Distributions to Shareholders:
Net Investment Income:
Fiduciary Shares ............................................................ (23,656) (128,868)
Class A Shares .............................................................. (26,739) (58,278)
Class B Shares .............................................................. -- --
Class C Shares .............................................................. -- --
Class S Shares .............................................................. (1,469) (3,021)
------------- --------------
Total Dividends and Distributions ......................................... (51,864) (190,167)
------------- --------------
Net Increase (Decrease) in Net Assets From:
Share Transactions (A) ...................................................... (22,243,718) 29,204,008
------------- --------------
Total Increase (Decrease) in Net Assets ................................... (22,243,696) 29,204,572
------------- --------------
Net Assets:
Beginning of Year ........................................................... 553,068,650 523,864,078
------------- --------------
End of Year ................................................................. $ 530,824,954 $ 553,068,650
============= ==============
Undistributed Net Investment Income .............................................. $ 49,877 $ 50,493
============= ==============
Amounts designated as "--" are either not applicable or less than $1.00.
(A) For details on share transaction by class, see statements of changes in net
assets -- capital stock activity on pages 24 - 27.
The accompanying notes are an integral part of the financial statements.
22 HIGHMARK(R) FUNDS
DIVERSIFIED MONEY MARKET TREASURY PLUS MONEY MARKET
FUND FUND
------------------------------- -------------------------------
2012 2011 2012 2011
-------------- -------------- --------------- -------------
Investment Activities:
Net Investment Income ................................. $ 389,594 $ 1,364,246 $ 4,298 $ 27,509
Net Realized Gain (Loss) on Investments ............... (21,047) 2,097 42 --
-------------- -------------- --------------- -------------
Net Increase in Net Assets Resulting From Operations .. 368,547 1,366,343 4,340 27,509
-------------- -------------- --------------- -------------
Dividends and Distributions to Shareholders:
Net Investment Income:
Fiduciary Shares .................................... (374,311) (1,107,284) (4,138) (25,751)
Class A Shares ...................................... (77,183) (184,091) (160) (1,758)
Class B Shares ...................................... -- -- -- --
Class C Shares ...................................... -- -- -- --
Class S Shares ...................................... (18,708) (72,871) -- --
-------------- -------------- --------------- -------------
Total Dividends and Distributions ................. (470,202) (1,364,246) (4,298) (27,509)
-------------- -------------- --------------- -------------
Net Increase (Decrease) in Net Assets From:
Share Transactions (A) .............................. (333,975,140) (19,610,119) (104,231,416) 8,480,567
-------------- -------------- --------------- -------------
Total Increase (Decrease) in Net Assets ........... (334,076,795) (19,608,022) (104,231,374) 8,480,567
-------------- -------------- --------------- -------------
Net Assets:
Beginning of Year ................................... 2,545,523,835 2,565,131,857 195,858,524 187,377,957
-------------- -------------- --------------- -------------
End of Year ......................................... $2,211,447,040 $2,545,523,835 $ 91,627,150 $ 195,858,524
============== ============== =============== =============
Undistributed Net Investment Income ...................... $ -- $ 80,608 $ 217 $ 175
============== ============== =============== =============
U.S. GOVERNMENT MONEY 100% U.S. TREASURY MONEY
MARKET FUND MARKET FUND
------------------------------- -------------------------------
2012 2011 2012 2011
-------------- -------------- --------------- -------------
Investment Activities:
Net Investment Income ................................. $ 45,812 $ 333,064 $ 15,109 $ 70,042
Net Realized Gain (Loss) on Investments ............... 54 735 (4,089) 16,418
-------------- -------------- --------------- -------------
Net Increase in Net Assets Resulting From Operations .. 45,866 333,799 11,020 86,460
-------------- -------------- --------------- -------------
Dividends and Distributions to Shareholders:
Net Investment Income:
Fiduciary Shares .................................... (38,249) (271,288) (9,440) (30,405)
Class A Shares ...................................... (1,877) (12,747) (3,112) (9,094)
Class B Shares ...................................... (1) (46) -- --
Class C Shares ...................................... (19) (94) -- --
Class S Shares ...................................... (5,666) (48,889) (2,557) (30,543)
-------------- -------------- --------------- -------------
Total Dividends and Distributions ................. (45,812) (333,064) (15,109) (70,042)
-------------- -------------- --------------- -------------
Net Increase (Decrease) in Net Assets From:
Share Transactions (A) .............................. (209,076,975) 189,065,828 178,718,917 (301,806,589)
-------------- -------------- --------------- -------------
Total Increase (Decrease) in Net Assets ........... (209,076,921) 189,066,563 178,714,828 (301,790,171)
-------------- -------------- --------------- -------------
Net Assets:
Beginning of Year ................................... 1,341,853,390 1,152,786,827 573,593,038 875,383,209
-------------- -------------- --------------- -------------
End of Year ......................................... $1,132,776,469 $1,341,853,390 $ 752,307,866 $ 573,593,038
============== ============== =============== =============
Undistributed Net Investment Income ...................... $ -- $ -- $ -- $ --
============== ============== =============== =============
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
-----------------------------------------------------------------
2012 2011
SHARES DOLLARS SHARES DOLLARS
-----------------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued .......................... 407,141,567 $ 407,141,567 512,725,924 $ 512,725,924
Reinvestment of Dividends and Distributions .......... 51 51 628 628
Cost of Shares Redeemed .............................. (421,992,729) (421,992,729) (472,579,563) (472,579,563)
-------------- -------------- -------------- --------------
Total Fiduciary Share Transactions ................ (14,851,111) (14,851,111) 40,146,989 40,146,989
-------------- -------------- -------------- --------------
Class A Shares:
Proceeds from Shares Issued .......................... 324,123,839 324,123,839 556,886,909 556,886,909
Reinvestment of Dividends and Distributions .......... 26,701 26,701 58,258 58,258
Cost of Shares Redeemed .............................. (329,739,401) (329,739,401) (560,634,629) (560,634,629)
-------------- -------------- -------------- --------------
Total Class A Share Transactions .................. (5,588,861) (5,588,861) (3,689,462) (3,689,462)
-------------- -------------- -------------- --------------
Class S Shares:
Proceeds from Shares Issued .......................... 40,176,000 40,176,000 76,797,492 76,797,492
Reinvestment of Dividends and Distributions .......... 1,469 1,469 2,846 2,846
Cost of Shares Redeemed .............................. (41,981,215) (41,981,215) (84,053,857) (84,053,857)
-------------- -------------- -------------- --------------
Total Class S Share Transactions .................. (1,803,746) (1,803,746) (7,253,519) (7,253,519)
-------------- -------------- -------------- --------------
Net Increase (Decrease) from Capital Stock Activity .. (22,243,718) $ (22,243,718) 29,204,008 $ 29,204,008
============== ============== ============== ==============
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
-------------------------------------------------------------------
2012 2011
SHARES DOLLARS SHARES DOLLARS
-------------------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued .......................... 4,023,675,491 $ 4,023,675,491 3,802,266,917 $ 3,802,266,917
Reinvestment of Dividends and Distributions .......... 38,130 38,130 168,287 168,287
Cost of Shares Redeemed .............................. (4,252,590,642) (4,252,590,642) (3,750,826,268) (3,750,826,268)
-------------- --------------- -------------- ---------------
Total Fiduciary Share Transactions ................ (228,877,021) (228,877,021) 51,608,936 51,608,936
-------------- --------------- -------------- ---------------
Class A Shares:
Proceeds from Shares Issued .......................... 427,376,857 427,376,857 596,354,791 596,354,791
Reinvestment of Dividends and Distributions .......... 76,739 76,739 183,242 183,242
Cost of Shares Redeemed .............................. (518,231,461) (518,231,461) (592,488,110) (592,488,110)
-------------- --------------- -------------- ---------------
Total Class A Share Transactions .................. (90,777,865) (90,777,865) 4,049,923 4,049,923
-------------- --------------- -------------- ---------------
Class S Shares:
Proceeds from Shares Issued .......................... 297,964,725 297,964,725 833,912,760 833,912,760
Reinvestment of Dividends and Distributions .......... 18,708 18,708 68,266 68,266
Cost of Shares Redeemed .............................. (312,303,687) (312,303,687) (909,250,004) (909,250,004)
-------------- --------------- -------------- ---------------
Total Class S Share Transactions .................. (14,320,254) (14,320,254) (75,268,978) (75,268,978)
-------------- --------------- -------------- ---------------
Net Increase (Decrease) from Capital Stock Activity .. (333,975,140) $ (333,975,140) (19,610,119) $ (19,610,119)
============== =============== ============== ===============
TREASURY PLUS MONEY MARKET FUND
-------------------------------------------------------------------
2012 2011
SHARES DOLLARS SHARES DOLLARS
-------------------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued .......................... 1,509,899,341 $ 1,509,899,341 966,631,663 $ 966,631,663
Reinvestment of Dividends and Distributions .......... -- -- -- --
Cost of Shares Redeemed .............................. (1,606,359,592) (1,606,359,592) (954,857,918) (954,857,918)
-------------- --------------- -------------- ---------------
Total Fiduciary Share Transactions ................ (96,460,251) (96,460,251) 11,773,745 11,773,745
-------------- --------------- -------------- ---------------
Class A Shares:
Proceeds from Shares Issued .......................... 76,608,297 76,608,297 22,301,296 22,301,296
Reinvestment of Dividends and Distributions .......... 160 160 1,758 1,758
Cost of Shares Redeemed .............................. (84,379,721) (84,379,721) (25,596,232) (25,596,232)
-------------- --------------- -------------- ---------------
Total Class A Share Transactions .................. (7,771,264) (7,771,264) (3,293,178) (3,293,178)
-------------- --------------- -------------- ---------------
Class S Shares:
Proceeds from Shares Issued .......................... 100 100 -- --
Reinvestment of Dividends and Distributions .......... -- -- -- --
Cost of Shares Redeemed .............................. (1) (1) -- --
-------------- --------------- -------------- ---------------
Total Class S Share Transactions .................. 99 99 -- --
-------------- --------------- -------------- ---------------
Net Increase (Decrease) from Capital Stock Activity .. (104,231,416) $ (104,231,416) 8,480,567 $ 8,480,567
============== =============== ============== ===============
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 ENDED JULY 31,
U.S. GOVERNMENT MONEY MARKET FUND
-----------------------------------------------------------------
2012 2011
SHARES DOLLARS SHARES DOLLARS
-----------------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued .......................... 3,932,802,203 $3,932,802,203 6,751,644,991 $6,751,644,991
Reinvestment of Dividends and Distributions .......... 1,843 1,843 4,862 4,862
Cost of Shares Redeemed .............................. (4,188,384,537) (4,188,384,537) (6,502,196,456) (6,502,196,456)
-------------- -------------- -------------- --------------
Total Fiduciary Share Transactions ................ (255,580,491) (255,580,491) 249,453,397 249,453,397
-------------- -------------- -------------- --------------
Class A Shares:
Proceeds from Shares Issued .......................... 46,374,511 46,374,511 80,741,580 80,741,580
Reinvestment of Dividends and Distributions .......... 1,831 1,831 12,680 12,680
Cost of Shares Redeemed .............................. (57,692,730) (57,692,730) (66,989,449) (66,989,449)
-------------- -------------- -------------- --------------
Total Class A Share Transactions .................. (11,316,388) (11,316,388) 13,764,811 13,764,811
-------------- -------------- -------------- --------------
Class B Shares:
Proceeds from Shares Issued .......................... -- -- 36,896 36,896
Reinvestment of Dividends and Distributions .......... 1 1 46 46
Cost of Shares Redeemed .............................. (138,526) (138,526) (64,253) (64,253)
-------------- -------------- -------------- --------------
Total Class B Share Transactions .................. (138,525) (138,525) (27,311) (27,311)
-------------- -------------- -------------- --------------
Class C Shares:
Proceeds from Shares Issued .......................... 2,246,979 2,246,979 1,314,608 1,314,608
Reinvestment of Dividends and Distributions .......... 10 10 88 88
Cost of Shares Redeemed .............................. (1,008,495) (1,008,495) (1,365,074) (1,365,074)
-------------- -------------- -------------- --------------
Total Class C Share Transactions .................. 1,238,494 1,238,494 (50,378) (50,378)
-------------- -------------- -------------- --------------
Class S Shares:
Proceeds from Shares Issued .......................... 1,011,390,966 1,011,390,966 1,089,861,082 1,089,861,082
Reinvestment of Dividends and Distributions .......... 5,666 5,666 45,509 45,509
Cost of Shares Redeemed .............................. (954,676,697) (954,676,697) (1,163,981,282) (1,163,981,282)
-------------- -------------- -------------- --------------
Total Class S Share Transactions .................. 56,719,935 56,719,935 (74,074,691) (74,074,691)
-------------- -------------- -------------- --------------
Net Increase (Decrease) from Capital Stock Activity .. (209,076,975) $ (209,076,975) 189,065,828 $ 189,065,828
============== ============== ============== ==============
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
-------------------------------------------------------------------
2012 2011
SHARES DOLLARS SHARES DOLLARS
-------------------------------------------------------------------
Share Transactions:
Fiduciary Shares:
Proceeds from Shares Issued .......................... 1,213,196,723 $ 1,213,196,723 1,217,901,265 $ 1,217,901,265
Reinvestment of Dividends and Distributions .......... 94 94 795 795
Cost of Shares Redeemed .............................. (1,111,603,511) (1,111,603,511) (1,229,015,783) (1,229,015,783)
-------------- --------------- -------------- ---------------
Total Fiduciary Share Transactions ................ 101,593,306 101,593,306 (11,113,723) (11,113,723)
-------------- --------------- -------------- ---------------
Class A Shares:
Proceeds from Shares Issued .......................... 404,194,151 404,194,151 166,236,480 166,236,480
Reinvestment of Dividends and Distributions .......... 3,105 3,105 9,090 9,090
Cost of Shares Redeemed .............................. (318,177,470) (318,177,470) (218,047,890) (218,047,890)
-------------- --------------- -------------- ---------------
Total Class A Share Transactions ................... 86,019,786 86,019,786 (51,802,320) (51,802,320)
-------------- --------------- -------------- ---------------
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 .......................... 594,547,913 594,547,913 1,533,379,319 1,533,379,319
Reinvestment of Dividends and Distributions .......... 2,545 2,545 28,040 28,040
Cost of Shares Redeemed .............................. (603,444,633) (603,444,633) (1,772,297,905) (1,772,297,905)
-------------- --------------- -------------- ---------------
Total Class S Share Transactions .................. (8,894,175) (8,894,175) (238,890,546) (238,890,546)
-------------- --------------- -------------- ---------------
Net Increase (Decrease) from Capital Stock Activity .. 178,718,917 $ 178,718,917 (301,806,589) $ (301,806,589)
============== =============== ============== ===============
The accompanying notes are an integral part of the financial statements.
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 TOTAL
VALUE, NET NET REALIZED 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
2012 $1.00 $ --++ $ --++ $ --++ $ --++ $ -- $ --++
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)
CLASS A SHARES
2012 $1.00 $ --++ $ --++ $ --++ $ --++ $ -- $ --++
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)
CLASS S SHARES
2012 $1.00 $ --++ $ --++ $ --++ $ --++ $ -- $ --++
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)
-----------------------------
DIVERSIFIED MONEY MARKET FUND
-----------------------------
FIDUCIARY SHARES
2012 $1.00 $0.001 $ --++ $0.001 $(0.001) $ -- $ 0.001
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)
CLASS A SHARES
2012 $1.00 $0.001 $ --++ $0.001 $(0.001) $ -- $ (0.001)
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)
CLASS S SHARES
2012 $1.00 $0.001 $ --++ $0.001 $(0.001) $ -- $ (0.001)
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)
-------------------------------
TREASURY PLUS MONEY MARKET FUND
-------------------------------
FIDUCIARY SHARES
2012 $1.00 $ --++ $ --++ $ --++ $ --++ $ -- $ --++
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
2012 $1.00 $ --++ $ --++ $ --++ $ --++ $ -- $ --++
2011 1.00 --++ -- --++ --++ -- --++
2010 1.00 --++ -- -- --++ -- --++
2009 (1) 1.00 (0.001)^ -- 0.001 (0.001) -- (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
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
2012 $1.00 0.01% $ 225,544 0.24% 0.77% 0.01%
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
CLASS A SHARES
2012 $1.00 0.01% $ 290,443 0.24% 1.02% 0.01%
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
CLASS S SHARES
2012 $1.00 0.01% $ 14,838 0.24% 1.07% 0.01%
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
-----------------------------
DIVERSIFIED MONEY MARKET FUND
-----------------------------
FIDUCIARY SHARES
2012 $1.00 0.02% $1,755,370 0.37% 0.75% 0.02%
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
CLASS A SHARES
2012 $1.00 0.02% $ 363,289 0.37% 1.00% 0.02%
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
CLASS S SHARES
2012 $1.00 0.02% $ 92,788 0.37% 1.05% 0.02%
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
-------------------------------
TREASURY PLUS MONEY MARKET FUND
-------------------------------
FIDUCIARY SHARES
2012 $1.00 0.00% $ 88,019 0.11% 0.81% 0.00%++
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 0.41 139,2330 0.15**+++ 0.80** 0.23**
CLASS A SHARES
2012 $1.00 0.00% $ 3,608 0.11% 1.06% 0.00%++
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**
The accompanying notes are an integral part of the financial statements.
28 HIGHMARK(R) FUNDS
DIVIDENDS AND
INVESTMENT ACTIVITIES DISTRIBUTIONS
----------------------------- --------------------
NET
ASSET TOTAL
VALUE, NET NET REALIZED TOTAL NET FROM
BEGINNING INVESTMENT GAIN (LOSS) ON FROM INVESTMENT CAPITAL DIVIDENDS AND
OF PERIOD INCOME+ INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS
-----------------------------------------------------------------------------------------------------------------------
-------------------------------------------
TREASURY PLUS MONEY MARKET FUND (CONTINUED)
-------------------------------------------
CLASS S SHARES
2012 $1.00 $ --++ $ --++ $ --++ $ -- $ -- $ --
2011 (2) 1.00 --++ -- -- -- -- --
2010 (2) 1.00 -- -- -- -- -- --
2009 (1) (2) 1.00 --^ -- -- -- -- --
---------------------------------
U.S. GOVERNMENT MONEY MARKET FUND
---------------------------------
FIDUCIARY SHARES
2012 $1.00 $ --++ $ --++ $ --++ $ --++ $ -- $ --++
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)
CLASS A SHARES
2012 $1.00 $ --++ $ --++ $ --++ $ --++ $ -- $ --++
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)
CLASS B SHARES
2012 $1.00 $ --++ $ --++ $ --++ $ --++ $ -- $ --++
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)
CLASS C SHARES
2012 $1.00 $ --++ $ --++ $ --++ $ --++ $ -- $ --++
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)
CLASS S SHARES
2012 $1.00 $ --++ $ --++ $ --++ $ --++ $ -- $ --++
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)
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
------------------------------------------------------------------------------------------------------
-------------------------------------------
TREASURY PLUS MONEY MARKET FUND (CONTINUED)
-------------------------------------------
CLASS S SHARES
2012 $1.00 0.00% $ -- 0.55% 1.00% 0.00%++
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**
---------------------------------
U.S. GOVERNMENT MONEY MARKET FUND
---------------------------------
FIDUCIARY SHARES
2012 $1.00 0.00% $ 926,242 0.14% 0.76% 0.00%++
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
CLASS A SHARES
2012 $1.00 0.00% $ 43,337 0.14% 1.01% 0.00%++
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
CLASS B SHARES
2012 $1.00 0.00% $ 9 0.14% 1.51% 0.00%++
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
CLASS C SHARES
2012 $1.00 0.00% $ 1,509 0.14% 1.26% 0.00%++
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
CLASS S SHARES
2012 $1.00 0.00% $ 161,679 0.14% 1.06% 0.00%++
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
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 REPRESNTS LESS THAN $0.001 OR 0.005%.
+++ 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 TOTAL
VALUE, NET NET REALIZED 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
2012 $1.00 $ --++ $ --++ $ --++ $ --++ $ -- $ --++
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)
CLASS A SHARES
2012 $1.00 $ --++ $ --++ $ --++ $ --++ $ -- $ --++
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)
CLASS S SHARES
2012 $1.00 $ --++ $ --++ $ --++ $ --++ $ -- $ --++
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)
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
2012 $1.00 0.00% $496,224 0.04% 0.76% 0.00%++
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
CLASS A SHARES
2012 $1.00 0.00% $179,088 0.04% 1.01% 0.00%++
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
CLASS S SHARES
2012 $1.00 0.00% $ 76,995 0.04% 1.06% 0.00%++
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
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 OR 0.005%.
+++ 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, 2012
1. ORGANIZATION
HighMark(R) Funds ("HighMark" or the "Trust") was organized as a Massachusetts
business trust under a Declaration of Trust dated March 10, 1987.
The Trust is registered under the Investment Company Act of 1940 (the "1940
Act"), as amended, as an open-end investment company with twenty-six 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." All of
the series of HighMark Funds included in the Trust, except for HighMark
Wisconsin Tax-Exempt Fund, are diversified investment companies. 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 premiums 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 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, 2012 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, 2012
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,
HIGHMARK(R) FUNDS 31
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JULY 31, 2012
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 a Fund is made aware of it.
REPURCHASE AGREEMENTS -- Securities pledged as collateral for repurchase
agreements are held by the custodian bank until the respective agreements
mature. Provisions of repurchase agreements and procedures adopted by HighMark
Capital Management, Inc. (the "Adviser" or the "Administrator") are designed to
ensure that the market value of the collateral is sufficient in the event of
default by the counterparty. If the counterparty defaults and the value of the
collateral declines or if the counterparty enters an insolvency proceeding,
realization of the collateral by a Fund may be delayed or limited. Repurchase
agreements held by the Funds are generally backed by U.S. Treasury and U.S.
Government agency obligations.
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 obligation 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 (excluding portfolio
brokerage and transaction costs, taxes relating to transacting in foreign
securities, if any, extraordinary expenses and any expenses indirectly incurred
by the Fund through investments in pooled investment vehicles (collectively, the
"Excluded Costs")) through November 30, 2012 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. The Funds will make
such payment only if the annual operating expenses of each Fund share class
(exclusive of the Excluded Costs), at the time of such payment, are below the
contractual fee limit in effect at the time the waiver/expense reimbursement
occurs. This recoupment could reduce a Fund's future total return. For the year
ended July 31, 2012 the Funds did not recoup any fees or expenses.
The total amount of fees waived and/or assumed by the Adviser during the last
fiscal year ended July 31, and is therefore currently eligible for recoupment
provided that the total recoupment does not exceed the Funds' respective
limitation, is as follows:
EXPIRING EXPIRING EXPIRING
2013 2014 2015
---------- ---------- ----------
California Tax-Free Money Market ... $ 647,577 $ 359,676 $1,370,214
Diversified Money Market ........... -- 886,489 3,147,718
Treasury Plus Money Market ......... 362,876 546,346 515,782
U.S. Government Money Market ....... 2,147,285 3,014,215 3,335,756
100% US Treasury Money Market ...... 1,508,719 2,649,621 1,945,757
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%
32 HIGHMARK(R) FUNDS
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, 2012, the Administrator voluntarily waived a portion of its
administration fee for the California Tax-Free Money Market Fund, 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"), 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, 2012, the Sub-Administrator earned
sub-administration fees in the amount of $1,198,391.
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, LLC (formerly known as Highmark Funds Distributors,
Inc.) (the "Distributor"), a wholly owned subsidiary of Foreside Funds
Distributors LLC (formerly known as BNY Mellon Distributors LLC), 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, 2012. The Distributor
waived the following amounts during the period:
FUND CLASS A CLASS B CLASS C CLASS S
---- -------- ------- ------- ---------
California Tax-Free Money Market ... $668,204 N/A N/A $ 80,663
Diversified Money Market ........... 962,233 N/A N/A 513,153
Treasury Plus Money Market ......... 16,136 N/A N/A N/A
U.S. Government Money Market ....... 119,205 481 3,549 791,981
100% US Treasury Money Market ...... 310,080 N/A N/A 558,713
HighMark has also adopted shareholder service plans/ agreements permitting
payment of compensation to service providers, that may include the Bank, or its
affiliates, which 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, 2012. For the year ended July 31, 2012, the Bank, or its
affiliates earned shareholder servicing fees, net of waivers, from the Funds in
the amount of approximately $402, which is included in the shareholder servicing
fees and the related waivers on the statements of operations. The shareholder
servicing fee waivers by the Bank, or its affiliates, are voluntary and not
subject to recoupment.
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.
HIGHMARK(R) FUNDS 33
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JULY 31, 2012
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, 2009 through July 31, 2012) 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 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 ... $ (616) $ (22) $ 638
Treasury Plus Money Market ......... 42 (42) --
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, 2012 and July 31, 2011 were as follows:
LONG-TERM RETURN
TAX-EXEMPT ORDINARY CAPITAL OF
INCOME INCOME GAIN CAPITAL TOTAL
---------- ---------- --------- ------- ---------
California Tax-Free Money
Market
2012 ..................... $ 54,591 $ 32 $ -- $ -- 54,623
2011 ..................... 189,596 571 -- -- 190,167
Diversified Money
Market
2012 ..................... -- 472,305 -- -- 472,305
2011 ..................... -- 1,364,246 -- -- 1,364,246
Treasury Plus
Money Market
2012 ..................... -- 4,407 -- -- 4,407
2011 ..................... -- 27,509 -- -- 27,509
U.S. Government
Money Market
2012 ..................... -- 47,893 -- -- 47,893
2011 ..................... -- 333,064 -- -- 333,064
100% U.S. Treasury
Money Market
2012...................... -- 15,092 -- -- 15,092
2011 ..................... -- 70,042 -- -- 70,042
As of July 31, 2012, the components of distributable earnings (accumulated
losses) on a tax basis were as follows:
TOTAL
DISTRIBUTABLE
UNDISTRIBUTED UNDISTRIBUTED UNREALIZED EARNINGS
UNDISTRIBUTED TAX-EXEMPT LONG-TERM CAPITAL LOSS LATE YEAR APPRECIATION OTHER TEMPORARY (ACCUMULATED
ORDINARY INCOME INCOME CAPITAL GAIN CARRYFORWARD LOSSES (DEPRECIATION) DIFFERENCES LOSSES)
--------------- ------------- ------------- ------------ --------- -------------- --------------- -------------
California Tax-Free
Money Market ... $ -- $ 51,854 $ -- $ -- $ -- $ -- $ (1,977)$ 49,877
Diversified
Money Market ... 26,869 -- -- (21,047) -- -- (26,869) (21,047)
Treasury Plus
Money Market ... 557 -- -- -- -- -- (340) 217
U.S. Government
Money Market ... 2,870 -- -- (1,677) -- -- (2,870) (1,677)
100% U.S. Treasury
Money Market ... 829 -- -- (78,703) (4,398) -- (829) (83,101)
AMOUNTS DESIGNATED AS "--" ARE EITHER NOT APPLICABLE OR LESS THAN $1.00.
Late-year capital losses represent losses realized on investment transactions
from November 1, 2011 through July 31, 2012, 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. Net capital losses
earned in taxable years beginning after December 22, 2010 ("post-2010 losses")
may be carried forward indefinitely and must retain the character of the
34 HIGHMARK(R) FUNDS
original loss. Such post-2010 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, 2012, the Funds had capital
loss carryforwards available to offset future realized capital gains through the
indicated expiration dates:
2013 2014 2015 2016 2017 2018 2019 NO EXPIRATION TOTAL
------ ---- ------- ------- ---- ----- ------- ------------- -------
Diversified Money Market .......... $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ 21,047 $21,047
U.S. Government Money Market ...... 1,058 618 -- -- -- 1 -- -- 1,677
100% U.S. Treasury Money Market ... -- -- 16,174 11,980 -- -- 48,879 1,670 78,703
AMOUNTS DESIGNATED AS "--" ARE EITHER NOT APPLICABLE OR LESS THAN $1.00.
During the year ended July 31, 2012, capital loss carryforwards that were
utilized and/or expired are as follows:
U.S. Government Money Market ...... $ 54
5. CONCENTRATION OF CREDIT RISK
The California Tax-Free Money Market Fund invests 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 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 Fund's 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 December 2011, the Financial Accounting Standards Board ("FASB") issued
Accounting Standards Update ("ASU") No. 2011-11, "Disclosures about Offsetting
Assets and Liabilities". ASU No. 2011-11 requires disclosures to make financial
statements that are prepared under U.S. Generally Accepted Accounting Principles
more comparable to those prepared under International Financial Reporting
Standards. The new disclosure requirements mandate that entities disclose both
gross and net information about instruments and transactions eligible for offset
in the statements of assets and liabilities as well as instruments and
transactions subject to an agreement similar to a master netting arrangement. In
addition, ASU No. 2011-11 requires disclosure of collateral received and posted
in connection with master netting agreements or similar arrangements. New
disclosures are required for annual reporting periods beginning on or after
January 1, 2013, and interim periods within those annual periods. Management is
evaluating the impact of ASU No. 2011-11 on the financial statements and
disclosures.
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 twenty-six portfolios constituting the HighMark Funds (the
"Trust") as of July 31, 2012, 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, 2012, 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, 2012, 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 25, 2012
36 HIGHMARK(R) FUNDS
NOTICE TO SHAREHOLDERS (UNAUDITED)
For shareholders that do not have a July 31, 2012 tax year end, this notice is
for informational purposes only. For shareholders with a July 31, 2012 tax year
end, please consult your tax adviser as to the pertinence of this notice.
For the fiscal year ended July 31, 2012, each Fund is designating the following
items with regard to distributions paid during the year.
QUALIFIED
DIVIDENDS QUALIFYING
AND 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% 0.06% 99.94% 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% 99.97% 0.00%
Treasury Plus
Money Market ...... 0.00% 100.00% 0.00% 100.00% 0.00% 0.00% 100.00% 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,
2012.
(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, 2012. ALL INCOME EARNED BY THE 100% U.S.
TREASURY MONEY MARKET FUND IS DESIGNATED TAX EXEMPT INCOME FOR STATE
INCOME TAX PURPOSES.
HIGHMARK(R) FUNDS 37
TRUSTEES AND OFFICERS (UNAUDITED)
Information pertaining to the Trustees and officers of the Trust is set forth
below. The Statement of Additional Information ("SAI") includes additional
information about Fund directors. The SAI is available, without charge, upon
request, by calling 1-800-433-6884. The following trustees and officers list is
current as of September 21, 2012.
------------------------------------------------------------------------------------------------------------------------------------
TERM OF NUMBER OF PORTFOLIOS OTHER
OFFICE IN HIGHMARK DIRECTORSHIPS
AND PRINCIPAL FUNDS HELD BY
POSITION(S) LENGTH OF OCCUPATION(S) COMPLEX TRUSTEE
NAME, HELD WITH TIME DURING PAST OVERSEEN DURING PAST
ADDRESS(1) AND AGE THE TRUST SERVED(2) 5 YEARS BY TRUSTEE(3) 5 YEARS(4)
------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
David Benkert Trustee, Since From April 1, 1992 to present, 24 None
55 Chairman 3/04 Director, Navigant Consulting, Inc.
(financial consulting).
Thomas L. Braje Trustee, Vice Since Prior to retirement in October 1996, 24 None
69 Chairman, 6/87 Vice President and Chief Financial
Governance Officer of Bio- Rad Laboratories,
Committee Inc.
Chairman
Evelyn S. Dilsaver Trustee, Audit Since Since April 2011, Member, Board of 24 Aeropostale,
57 Committee 1/08 Trustees of Russell Exchange Traded Inc. (ARO);
Chairman Funds Trust. Since January 2010, Longs Drug
Member, Board of Directors of Corporation
Tempur-Pedic International Inc. (LDG)(5);
(mattress manufacturer). Since Russell
November 2009, Member, Board of Exchange
Directors of Blue Shield of Traded Funds
California (health insurance). Since Trust (26
October 2007, Member, Board of portfolios);
Directors of Aeropostale, Inc. From Tamalpais
2004 to 2007, Executive Vice Bancorp
President for The Charles Schwab (TAMB);
Corporation, and President and Chief Tempur-Pedic
Executive Officer of Charles Schwab International
Investment Management, Inc. Inc. (TPX)
David A. Goldfarb Trustee Since Since January 2010, owner of David 24 None
70 6/87 A. Goldfarb, CPA. From 1987 to 2009,
Partner, Goldfarb & Simens Certified
Public Accountants.
Michael L. Noel Trustee Since President, Noel Consulting Company 24 Avista Corp.
71 12/98 since 1998. Senior Managing (AVA)
Director, Saber Partners (financial
advisory firm) since 2002. Member,
Board of Directors, Avista Corp.
(utility company), since January
2004. Member, Board of Directors,
SCAN Health Plan, since 1997.
Mindy M. Posoff Trustee Since Managing Director, Golden Seeds, LLC 24 None
56 10/10 (investment group) since January
2011. Managing Director, Traversent
Capital Partners (financial
consulting) since January 2010. From
January 2003 to December 2009,
Managing Director, NewMarket Capital
Partners, LLC (asset management).
38 HIGHMARK(R) FUNDS
------------------------------------------------------------------------------------------------------------------------------------
TERM OF NUMBER OF PORTFOLIOS OTHER
OFFICE IN HIGHMARK DIRECTORSHIPS
AND PRINCIPAL FUNDS HELD BY
POSITION(S) LENGTH OF OCCUPATION(S) COMPLEX TRUSTEE
NAME, HELD WITH TIME DURING PAST OVERSEEN DURING PAST
ADDRESS(1) AND AGE THE TRUST SERVED(2) 5 YEARS BY TRUSTEE(3) 5 YEARS(4)
------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OFFICERS
Dennis Mooradian President Since Chairman of the Board, President and N/A N/A
350 California Street 8/12 Chief Executive Officer of the
San Francisco, CA 94104 Adviser since August 2012. Executive
64 Vice President, Union Bank, N.A.
since June 2011. From June 2009 to
June 2011, affiliated with LECG
Corporation (consulting and expert
testimony on fiduciary, investment
management, brokerage and private
banking issues). From November 2003
to February 2009, Executive Vice
President, Wealth and Institutional
Management, Comerica Bank. Chairman
and President of World Asset
Management.
Pamela O'Donnell Vice President, Since Vice President and Director of Mutual N/A N/A
350 California Street Treasurer and 12/05 Fund Administration of the Adviser
San Francisco, CA 94104 Chief Financial (Treasurer) since 2005.
48 Officer Since
3/09 (Vice
President)
Since
6/10
(Chief
Financial
Officer)
Kevin Rowell Vice President, Since Senior Vice President and Managing N/A N/A
350 California Street Treasurer and 9/10 Director of the Adviser since June
San Francisco, CA 94104 Assistant 2010. From 2008 to 2010, President,
52 Secretary Hennessy Funds. From 2006 to 2007,
Executive Vice President, head of
U.S. Distribution, Pioneer
Investments.
Catherine M. Vacca Chief Since Senior Vice President and Chief N/A N/A
350 California Street Compliance 9/04 Compliance Officer of the Adviser
San Francisco, CA 94104 Officer since July 2004.
55
Helen Robichaud Secretary Since Managing Director and Senior Counsel, N/A N/A
201 Washington Street 34th 3/10 BNY Mellon Investment Servicing (US)
Floor Inc. since January 2010. Director of
Boston, MA 02108 Fund Regulatory Services of J.P.
60 Morgan from June 2008 to December
2009. Associate General Counsel of
J.P. Morgan from August 1995 to June
2008.
----------
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 or her 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.
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 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
19-20, 2012.
In considering whether to approve the continuation of the Investment Advisory
Agreement with respect to the Funds at the meetings held on June 19-20, 2012,
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
40 HIGHMARK(R) FUNDS
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 necessarily all) periods considered, the Board of Trustees
concluded that other factors relevant to performance supported renewal of the
Investment Advisory Agreement with respect to such Fund. These factors 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.
o recent business initiatives of the Adviser.
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, 2013.
HIGHMARK(R) FUNDS 41
FUND INFORMATION (UNAUDITED)
JULY 31, 2012
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
U.S. GOVERNMENT MONEY MARKET 431112507 HGSXX 1729
100% U.S. TREASURY MONEY MARKET 431112606 HUSXX 1730
42 HIGHMARK(R) FUNDS
NOTES
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, LLC
400 Berwyn Park
899 Cassatt Road
Berwyn, PA 19312
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
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(R) FUNDS LOGO]
-----------------------------
Mutual Funds:
o are not FDIC insured
o have no bank guarantee
o may lose value
-----------------------------
[HIGHMARK(R) FUNDS LOGO]
445 South Figueroa Street o Suite 306 o Los Angeles o California o 90071
WWW.HIGHMARKFUNDS.COM
HMKAR0030300
84806-A (07/12)
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
$603,000 for 2011 and $603,000 for 2012.
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 2011 and $36,600 for 2012.
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 2011 and
$94,650 for 2012.
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 $0
for 2011 and $0 for 2012.
(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) All services described in each of paragraphs (b) through (d) of this
Item were pre-approved by the audit committee. None of the services
described in paragraphs (b) through (d) of this Item were approved
pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(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 $598,000 for 2011 and $188,000 for 2012.
(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/ Dennis Mooradian
-------------------------------------------------------
Dennis Mooradian, President
(principal executive officer)
Date 10/5/12
----------------------------------------------------------------------------
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/ Dennis Mooradian
-------------------------------------------------------
Dennis Mooradian, President
(principal executive officer)
Date 10/5/12
----------------------------------------------------------------------------
By (Signature and Title)* /s/ Pamela O'Donnell
-------------------------------------------------------
Pamela O'Donnell, Chief Financial Officer
(principal financial officer)
Date 10/5/12
----------------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.