N-CSR 1 a10-18695_1ncsr.htm N-CSR

 

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

811-07527

 

Turner Funds

(Exact name of registrant as specified in charter)

 

 

1205 Westlakes Drive, Suite 100
Berwyn, PA

 

19312

(Address of principal executive offices)

 

(Zip code)

 

Michael P. Malloy
Drinker Biddle & Reath LLP
One Logan Square, Suite 2000
Philadelphia, PA 19103

(Name and address of agent for service)

 

Registrant’s telephone number, including area code:

1-800-224-6312

 

 

Date of fiscal year end:

September 30, 2010

 

 

Date of reporting period:

September 30, 2010

 

 


 

Item 1.    Reports to Stockholders.

 


Annual Report

September 30, 2010

Long/short equity fund

Turner Spectrum Fund

U.S. growth equity funds

Turner Concentrated Growth Fund

Turner Core Growth Fund

Turner Emerging Growth Fund

Turner Large Cap Growth Fund

Turner Midcap Growth Fund

Turner New Enterprise Fund

Turner Small Cap Growth Fund

Quantitative equity funds

Turner Quantitative Broad Market Equity Fund

Turner Quantitative Large Cap Value Fund

Global and international equity funds

Turner Global Opportunities Fund

Turner International Core Growth Fund

Core equity fund

Turner Small Cap Equity Fund



Contents

  2     Letter to shareholders  
  6     Total returns of Turner Funds  
  9     Investment review:
Turner Spectrum Fund		  
  10     Investment review:
Turner Concentrated Growth Fund		  
  11     Investment review:
Turner Core Growth Fund		  
  12     Investment review:
Turner Emerging Growth Fund		  
  13     Investment review:
Turner Large Cap Growth Fund		  
  14     Investment review:
Turner Midcap Growth Fund		  
  15     Investment review:
Turner New Enterprise Fund		  
  16     Investment review:
Turner Small Cap Growth Fund		  
  17     Investment review:
Turner Quantitative Broad Market Equity Fund		  
  18     Investment review:
Turner Quantitative Large Cap Value Fund		  
  19     Investment review:
Turner Global Opportunities Fund		  
  20     Investment review:
Turner International Core Growth Fund		  
  21     Investment review:
Turner Small Cap Equity Fund		  
  22     Schedules of investments  
  54     Financial statements  
  74     Notes to financial statements  
  83     Report of independent registered public accounting firm  
  84     Notice to shareholders  
  85     Trustees and officers of the Trust  
  86     Disclosure of fund expenses  

 

Turner Funds

As of September 30, 2010, the Turner Funds offered a series of 13 mutual funds to individual and institutional investors. The minimum initial investment for Institutional Class Shares in a Turner Fund is $250,000 (except for $25,000 for the Turner Quantitative Large Cap Value Fund and $100,000 for the Turner Spectrum Fund) for regular accounts and $100,000 (with the exception of $10,000 for the Turner Quantitative Large Cap Value Fund) for individual retirement accounts. The minimum initial investment for Investor Class Shares, Retirement Class Shares, and Class C Shares of the Turner Spectrum Fund is $2,500 for regular accounts and $2,000 for individual retirement accounts.

Turner Investment Partners, Inc., based in Berwyn, Pennsylvania, serves as the investment adviser for the Funds (other than the Turner Small Cap Equity Fund). Turner Investment Management LLC, a subsidiary of Turner Investment Partners, Inc., serves as the investment adviser for the Turner Small Cap Equity Fund. Turner Investment Partners, Inc., founded in 1990, manages more than $17 billion in stock investments as of September 30, 2010.

Shareholder services

Turner Funds shareholders receive annual and semiannual reports, quarterly account statements, and a quarterly newsletter. Shareholders who have questions about their accounts may call a toll-free telephone number, 1.800.224.6312, may visit our Web site, www.turnerinvestments.com, or may write to Turner Funds, P.O. Box 219805, Kansas City, Missouri 64121-9805.

TURNER FUNDS 2010 ANNUAL REPORT 1


LETTER TO SHAREHOLDERS

To our shareholders

On balance, the stock market in the 21st century has been as underwhelming as our hometown Philadelphia Phillies in the recent National League baseball championship playoffs. In the dreary decade from 2000 to 2009 that we refer to as the Terrible 2000s, the S&P 500 Index uncharacteristically lost 0.95% annualized — an underperformance even worse than the 1930s of the Great Depression. As a result of the Terrible 2000s, the long-term average for stocks since 1926 has eroded to 9.66%, according to Ibbotson Associates. Previously the long-term average had been above 10%.

But as has often been observed, the stock market is what it is. And what the stock market is now, in our judgment, is rebounding from the Terrible 2000s. The bull market that began in March 2009 has started to push stock returns higher, to levels approximating the long-term average. Indeed, in the 12-month period ended September 30, 2010, that's the focus of this report, the S&P 500 generated a 10.16% gain.

During most of the period, macroeconomic events like central-bank actions trumped fundamentals like earnings. The market was especially roiled in the second half of the period by macroeconomic developments such as these: the sovereign-debt crisis in Europe, escalating government-budget deficits in the developed nations, China's slowing economy, the breathless reactions to the Federal Reserve's pronouncements on interest rates, and the possibility of a double-digit recession in the U.S., as reflected in persistently high unemployment, a weak housing market, lackluster consumer spending, and the bad loans still weighing heavily on banks' balance sheets.

Correlations uncommonly high

For us as investment managers, the most significant thing about a market propelled by macroeconomic forces was that stocks — whether of low or high quality, whether with weak or strong earnings — tended to move in lock step. For instance, in mid-August, the correlation of stocks in the S&P 500 Index reached 74%, compared with a correlation of just 27% between 2000 and 2006, according to Barclays Capital. Such unusually high correlations made it difficult for most investment managers to distinguish themselves by picking winning stocks. Morningstar, the mutual-fund research firm, reported in September that only about 24% of large-cap growth funds had beaten the Russell 1000 Growth Index over the past 12 months.

Our own 13 stock funds — be they large-cap, mid-cap, or small-cap funds — fared only slightly better. In the most recent 12-month period, four funds, representing about 31% of the Turner Funds lineup, beat one or more of their benchmarks. The four funds that managed to outperform were the Turner Global Opportunities Fund, the Turner International Core Growth Fund, the Turner New Enterprise Fund, and the Turner Small Cap Growth Fund. They were among the eight funds that delivered double-digit total returns.

Total returns        
12-month period ended September 30, 2010        
Long/short equity fund        
Turner Spectrum Fund,
Institutional Class (TSPEX)		     0.77 %  
S&P 500 Index     10.16    
Barclays Capital U.S. Aggregate Bond Index     8.16    
Lipper Long/Short Equity Funds Classification     3.55    
U.S. growth equity funds        
Turner Concentrated Growth Fund (TTOPX)     7.94    
Russell 1000 Growth Index     12.65    
Turner Core Growth Fund,
Institutional Class (TTMEX)		     6.76    
Russell 1000 Growth Index     12.65    
Turner Emerging Growth Fund,
Investor Class (TMCGX)		     12.22    
Russell 2000 Growth Index     14.79    
Turner Large Cap Growth Fund,
Institutional Class (TSGEX)		     10.00    
Russell Top 200 Growth Index     10.57    
Russell 1000 Growth Index     12.65    
Turner Midcap Growth Fund,
Investor Class (TMGFX)		     14.21    
Russell Midcap Growth Index     18.27    
Turner New Enterprise Fund (TBTBX)     18.25    
NASDAQ Composite Index     12.77    
Turner Small Cap Growth Fund (TSCEX)     15.10    
Russell 2000 Growth Index     14.79    
Quantitative equity funds        
Turner Quantitative Broad Market
Equity Fund, Institutional Class (TBMEX)		     8.30    
Russell 3000 Index     10.96    
S&P 500 Index     10.16    
Turner Quantitative Large Cap
Value Fund, Institutional Class (TLVFX)		     7.24    
Russell 1000 Value Index     8.90    
Global and international equity funds        
Turner Global Opportunities Fund,
Institutional Class (TGLBX)		     15.20 †  
MSCI World Growth Index     9.53 †  
MSCI World Index     8.14 †  
Turner International Core Growth
Fund, Institutional Class (TICGX)		     15.88    
MSCI World Growth ex-U.S. Index     8.69    
Core equity fund        
Turner Small Cap Equity Fund,
Investor Class (TSEIX)		     12.53    
Russell 2000 Index     13.35    

 

†  Returns are from the fund's inception date, May 7, 2010.

2 TURNER FUNDS 2010 ANNUAL REPORT


September 30, 2010

(Please call 1.800.224.6312 or visit our Web site at www.turnerinvestments.com for the most recent month-end performance. For more details on the performance of each fund during the 12-month period, see the Investment review beginning on page 9.)

A tough market to beat

Clearly, it was a tough stock market to beat. It was a market that largely neutralized our growth, core, quantitative, and alternative investment processes, which are geared to fundamentals such as earnings expectations, market-share positions, investment metrics that have proven predictive of outperformance, and balance-sheet strength. We felt a keen sense of frustration about investing in a market in which stock selection was generally of little consequence. We continued to follow the same investment processes as before. But, alas, sometimes even the best investment processes don't generate extra return across the board, and this was one of these times.

We are steadfast in our belief that if we continue to follow our proven investment processes, they will continue to yield good long-term results for our funds. Nine of our 13 funds have outperformed since their inception. We consider that a highly respectable long-term record, but that's not to say we can't do better. As perennial students of the market, we are always learning and open to promising new ideas from any source. And as investment professionals, we are self-critical and intent on improving continuously.

For instance, in our best open and self-critical manner, we recently added four new analysts to our Growth Investing Team. With their combined 65 years of investment experience, they should provide extra depth to our research of sectors, industries, and companies. Altogether, our Growth Investing Team has five teams of 25 portfolio managers/security analysts who cover industries in the five broad market sectors globally. Such a sector orientation is a distinguishing aspect of how we manage our growth funds. By enabling our analysts to conduct vigorous fundamental research in their specific industries, we think their focus, accountability for investment results, and ability to identify the best growth stocks should all improve.

Providing more flexibility

Another example: we modified our sector-neutral approach that we use in managing certain of our growth funds, refining it into what we call a sector-aware approach. We believe this will give us a bit more flexibility in portfolio management and give our growth funds a bit more potential to generate extra return.

With sector neutrality, we were compelled to keep the sector weightings of our holdings equal to the sector weightings of their target indexes. For instance, if the Russell Midcap Growth Index had a 27% weighting in the technology sector, then our Turner Midcap Growth Fund would follow suit and hold a 27% weighting in the technology sector. In contrast, our new sector-aware approach still keeps us invested in all sectors, but it enables us to overweight or underweight sectors typically by up to five percentage points, when our analysis indicates it's warranted by the fundamentals. Also, it permits us to replace a poor-performing stock in one sector with a stock that we consider to have better return potential in another sector, which we wouldn't do before.

We think these are good illustrations of how we are continually fine-tuning our investment processes in the interest of producing better results for you, our shareholders — and for us, I hasten to add, since our portfolio managers and other employees are shareholders in our funds as well.

Stocks out of favor

We believe it's rather unfortunate that more than a few mutual-fund investors outside the Turner Funds find themselves unable to reap any results in stocks at this juncture — for the simple reason that their portfolios are completely divested of stocks. Bonds, not stocks, are the investment du jour by far. According to the Investment Company Institute, since January 2009 bond funds have attracted more than $500 billion in new investment, while stock funds have suffered more than $70 billion in withdrawals. Investors' aversion to stocks is perhaps attributable to this facet of human nature: the pain of investment losses tends to be more acute than the pleasure of investment gains, and many pain-stricken investors are still wincing from the losses inflicted by stocks in the Terrible 2000s. We believe such an aversion could prove costly because, in our estimation, the 2010s should be a decade of generally rising stock prices.

We think better days are ahead for stocks partly because the Terrible 2000s were so terrible, with stocks underperforming the long-term averages by more than 10 percentage points annualized. Like Lady Gaga's meat dress, a losing decade for stocks isn't at all commonplace. In light of a fundamental principle of economics called reversion to the mean — the tendency for investment returns to adjust, or revert, to the long-term average, given enough time — we think the probabilities are that stocks, in light of their highly unusual negative showing in the 2000s, should revert and perform at least reasonably well in the 2010s. According to Morningstar, of the 776 rolling 10-year monthly returns since 1926, only 29 of those returns were negative — less than 4% of the total. But subsequent 10-year returns after those negative 10-year stretches were soundly positive, averaging 9.8%.

In the near term, we think the bull market should continue to advance, especially if investors focus more on

TURNER FUNDS 2010 ANNUAL REPORT 3


LETTER TO SHAREHOLDERS (continued)

favorable earnings fundamentals and less on macroeconomic issues. For example, more than two-thirds of the S&P 500 companies' earnings have beaten Wall Street analysts' expectations for six consecutive quarters — a trend that we expect to remain intact into 2011. To cite investing guru Benjamin Graham's famous metaphor, the market is a weighing machine in the long run . . . and earnings are what ultimately register on the machine.

Also, we think stocks offer compelling valuations. Recently the earnings yield (the inverted price/earnings ratio) of the S&P 500 Index stocks exceeded the average yield of corporate bonds for the first time since the 1970s. Indeed, the earnings yield looks even more appealing in relation to the yield of the entire bond market. As of September 30, the S&P 500's earnings yield was 5.76%, more than double the 2.56% yield of the Barclays Capital U.S. Aggregate Bond Index, a common proxy for the bond market.

Emerging markets promising

We are also optimistic about the near-term return potential of the emerging stock markets, which could in particular help the performance of the Turner International Core Growth Fund and our newest fund, the Turner Global Opportunities Fund. One reason why we think the emerging stock markets represent a compelling investment opportunity is this projection by Bank of America Merrill Lynch: the governments of emerging nations may pour $6.3 trillion into expanding their nations' often-rudimentary infrastructure over the next three years. Also, we think the economies of emerging countries like China, India, Brazil, and Malaysia have the best prospects for years to come — a revved-up engine of economic growth that should help drive earnings and emerging stock markets higher.

In anticipation of generally favorable stock-market prospects worldwide, we have kept our funds positioned basically the same as when I last wrote to you in our Semiannual Report six months ago:

• Our nine U.S. and international/global growth funds hold three types of shares: classic growth stocks in industries such as biotechnology and wireless communications that we think have strong fundamentals, stocks of companies gaining market share in their businesses, and growth-cyclical stocks in industries such as chemicals that have tended to do well historically as the economic cycle progresses.

• Our core fund, the Turner Small Cap Equity Fund, follows an investment approach emphasizing companies with business momentum, cash-rich balance sheets, or undervalued assets.

• Our two quantitative funds, the Turner Quantitative Broad Market Equity Fund and the Turner Quantitative Large Cap Value Fund, are broadly diversified in stocks in each market sector that our proprietary quantitative model has identified as having the best statistical chance of outperforming the market.

• The Turner Spectrum Fund, composed of seven long/short strategies managed by us, is invested in long positions that we think have good return potential and in short positions that we think have below-average return potential.

In closing, we believe patient, long-term investing in stocks is likely to be rewarded more generously in this decade than in the Terrible 2000s. And we believe our funds are primed to share fully in those rewards, to our mutual benefit as shareholders.

Bob Turner

Chairman and Chief Investment Officer
Turner Investments

Past performance is no guarantee of future results. The views expressed are those of Turner Investments as of September 30, 2010, and are not intended as a forecast or investment recommendations. The indexes mentioned are not available for investment.

Bob Turner

4 TURNER FUNDS 2010 ANNUAL REPORT


September 30, 2010

Lipper Inc. peer group performance rankings of mutual funds with at least three years of history

Periods ending September 30, 2010

    One
year		   Two
years		   Three
years		   Four
years		   Five
years		   Seven
years		   Ten
years		  
International Multi-Cap Growth Funds  
Turner International Core Growth Fund
Institutional Class Shares		  
Ranking versus Lipper peers     32/158       57/132       38/108       —       —       —       —    
Percentile Ranking     20       43       35       —       —       —       —    
Large-Cap Growth Funds  
Turner Core Growth Fund,
Institutional Class Shares		  
Ranking versus Lipper peers     735/852       584/792       653/732       567/679       464/614       176/513       —    
Percentile ranking     86       74       89       84       76       34       —    
Investor Class Shares  
Ranking versus Lipper peers     743/852       597/792       660/732       590/679       503/614       —       —    
Percentile Ranking     87       75       90       87       82       —       —    
Turner Large Cap Growth Fund,
Institutional Class Shares		  
Ranking versus Lipper peers     430/852       386/792       691/732       635/679       574/614       497/513       323/344    
Percentile ranking     50       49       94       94       93       97       94    
Investor Class Shares  
Ranking versus Lipper peers     475/852       426/792       698/732       —       —       —       —    
Percentile ranking     56       54       95       —       —       —       —    
Multi-Cap Core Funds  
Turner Quantitative Large
Cap Value Fund
Institutional Class Shares		  
Ranking versus Lipper peers     691/846       764/790       632/736       589/665       —       —       —    
Percentile ranking     82       97       86       89       —       —       —    
Multi-Cap Growth Funds  
Turner Concentrated Growth Fund  
Ranking versus Lipper peers     364/437       289/412       368/375       292/330       256/298       259/270       201/203    
Percentile ranking     83       70       98       88       86       96       99    
Turner Midcap Growth Fund,
Investor Class Shares		  
Ranking versus Lipper peers     170/437       162/412       199/375       124/330       125/298       95/270       146/203    
Percentile ranking     39       39       53       38       42       35       72    
Retirement Class Shares  
Ranking versus Lipper peers     182/437       167/412       210/375       144/330       142/298       122/270       —    
Percentile ranking     42       41       56       44       48       45       —    
Science and Technology Funds  
Turner New Enterprise Fund  
Ranking versus Lipper peers     43/141       62/136       107/135       66/128       62/120       39/109       27/81    
Percentile Ranking     30       46       79       52       52       36       33    
Small-Cap Growth Funds  
Turner Emerging Growth Fund
Investor Class Shares		  
Ranking versus Lipper peers     369/530       472/495       324/467       257/426       232/396       50/331       13/223    
Percentile ranking     70       95       69       60       59       15       6    
Turner Small Cap Growth Fund  
Ranking versus Lipper peers     242/530       246/495       165/467       115/426       99/396       110/331       152/223    
Percentile ranking     46       50       35       27       25       33       68    
Small-Cap Core Funds  
Turner Small Cap Equity Fund
Investor Class Shares		  
Ranking versus Lipper peers     466/755       624/717       583/661       528/594       491/544       394/434       —    
Percentile ranking     62       87       88       89       90       91       —    

 

Source: Lipper Inc.

Total return is ranking criteria. Past performance is no guarantee of future results.

TURNER FUNDS 2010 ANNUAL REPORT 5



PERFORMANCE

Total returns of the Turner Funds

Through September 30, 2010

Current performance may be lower or higher than the performance data quoted. Please call 1.800.224.6312 or visit our website at www.turnerinvestments.com for the most recent month-end performance information.

The performance data quoted represents past performance and the principal value and investment return will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Past performance is no guarantee of future results. Returns shown, unless otherwise indicated, are total returns, with dividends and income reinvested. Returns spanning more than one year are annualized. Fee waivers are in effect; if they had not been in effect, performance would have been lower. The indices mentioned are unmanaged statistical composites of stock-market performance. Investing in an index is not possible.

The holdings and sector weightings of the Funds are subject to change. Forward-earnings projections are not predictors of stock price or investment performance, and do not represent past performance. There is no guarantee that the forward-earnings projections will accurately predict the actual earnings experience of any of the companies involved, and there is no guarantee that owning securities of companies with relatively high price-to-earnings ratios will cause the portfolio to outperform its benchmark or index.

The Turner Funds are distributed by Foreside Fund Services, LLC, Portland, Maine. The investor should consider the investment objectives, risks, charges, and expenses carefully before investing. This and other information can be found in the prospectus. A free prospectus, which contains detailed information, including fees and expenses, and the risks associated with investing in these Funds, can be obtained by calling 1.800.224.6312. Read the prospectus carefully before investing.

Fund name/index   Six
months		   Year
to
date		   One
year		   Three
years		   Five
years		   Ten
years		   (Annualized)
Since
inception		   Total
net assets
($mill)		  
Turner Spectrum Fund —
Institutional Class Shares		     -2.17 %     -0.73 %     0.77 %     n/a       n/a       n/a       6.31 %   $ 179.53    
Investor Class Shares     -2.27       -0.92       0.49       n/a       n/a       n/a       6.03       52.36    
Class C Shares(1)     -2.63       -1.38       -0.07       n/a       n/a       n/a       6.67       7.17    
S&P 500 Index     -1.42       3.89       10.16       n/a       n/a       n/a       20.30            
Barclays Capital U.S. Aggregate
Bond Index		     6.05       7.94       8.16       n/a       n/a       n/a       9.55            
Lipper Long/Short Equity
Funds Classification		     -1.73       0.29       3.55       n/a       n/a       n/a       12.01            
Inception date: 5/7/09  
Turner Concentrated
Growth Fund		     0.45       2.31       7.94       -13.07 %     -1.30 %     -10.18 %     -0.46       42.92    
Russell 1000 Growth Index     -0.27       4.36       12.65       -4.36       2.06       -3.44       -1.56            
Inception date: 6/30/99  
Turner Core Growth Fund —
Institutional Class Shares		     -3.39       0.38       6.76       -9.43       -0.30       n/a       0.77       377.65    
Investor Class Shares(2)     -3.50       0.10       6.51       -9.67       -0.59       n/a       0.06       163.75    
Russell 1000 Growth Index     -0.27       4.36       12.65       -4.36       2.06       n/a       0.10            
Inception date: 2/28/01  
Turner Emerging Growth Fund(8) —
Institutional Class Shares(3)		     -1.41       8.00       12.52       n/a       n/a       n/a       27.20       276.45    
Investor Class Shares     -1.56       7.79       12.22       -7.36       0.86       5.43       18.19       176.82    
Russell 2000 Growth Index     2.43       10.23       14.79       -3.75       2.35       -0.13       2.07            
Inception date: 2/27/98  
Turner Large Cap Growth Fund —
Institutional Class Shares		     -1.22       3.86       10.00       -10.37       -1.93       -6.68       -6.66       118.16    
Investor Class Shares(4)     -1.43       3.66       9.58       -10.66       n/a       n/a       -5.41       1.36    
Russell Top 200 Growth Index     -1.49       2.00       10.57       -4.49       1.81       -4.20       -4.51            
Russell 1000 Growth Index     -0.27       4.36       12.65       -4.36       2.06       -3.44       -3.64            
Inception date: 6/14/00  

 

6 TURNER FUNDS 2010 ANNUAL REPORT


PERFORMANCE (continued)

Fund name/index   Six
months		   Year
to
date		   One
year		   Three
years		   Five
years		   Ten
years		   (Annualized)
Since
inception		   Total
net assets
($mill)		  
Turner Midcap Growth Fund(8) —
Institutional Class Shares(5)		     -0.10 %     7.44 %     14.47 %     n/a       n/a       n/a       -6.26 %   $ 164.99    
Investor Class Shares     -0.20       7.25       14.21       -5.93 %     2.41 %     -3.50 %     9.81       751.12    
Retirement Class Shares(6)     -0.31       7.05       13.93       -6.16       2.09       n/a       5.78       4.58    
Russell Midcap Growth Index     2.95       10.85       18.27       -3.90       2.86       -0.88       6.38            
Inception date: 10/1/96  
Turner New Enterprise Fund(8)     2.48       11.41       18.25       -6.90       3.73       -5.60       -3.37       23.23    
NASDAQ Composite Index     -0.69       5.17       12.77       -3.27       2.92       -3.52       -4.15            
Inception date: 6/30/00  
Turner Small Cap Growth Fund(8)     1.58       10.19       15.10       -4.23       3.26       -0.73       10.78       274.92    
Russell 2000 Growth Index     2.43       10.23       14.79       -3.75       2.35       -0.13       4.91            
Inception date: 2/7/94  
Turner Quantitative Broad
Market Equity Fund —		  
Institutional Class Shares     -4.09       2.18       8.30       n/a       n/a       n/a       -4.19       10.95    
Investor Class Shares     -4.31       2.07       7.98       n/a       n/a       n/a       -4.43       0.02    
Russell 3000 Index     -1.10       4.78       10.96       n/a       n/a       n/a       -2.35            
S&P 500 Index     -1.42       3.89       10.16       n/a       n/a       n/a       -2.72            
Inception date: 6/30/08  
Turner Quantitative
Large Cap Value Fund —		  
Institutional Class Shares     -3.20       3.01       7.24       -9.48       n/a       n/a       -0.24       0.83    
Investor Class Shares(7)     -3.33       2.88       7.07       n/a       n/a       n/a       4.53       —    
Russell 1000 Value Index     -2.14       4.49       8.90       -9.39       n/a       n/a       0.30            
Inception date: 10/10/05  
Turner Global Opportunities Fund —
Institutional Class Shares		     n/a       n/a       n/a       n/a       n/a       n/a       15.20 *     1.15    
Investor Class Shares     n/a       n/a       n/a       n/a       n/a       n/a       15.00 *     —    
MSCI World Growth Index     n/a       n/a       n/a       n/a       n/a       n/a       9.53 *          
MSCI World Index     n/a       n/a       n/a       n/a       n/a       n/a       8.14 *          
Inception date: 5/7/10  
Turner International Core
Growth Fund —
Institutional Class Shares		     4.44       7.91       15.88       -6.98       n/a       n/a       -0.47       5.02    
Investor Class Shares(7)     4.33       7.68       15.61       n/a       n/a       n/a       25.63       0.11    
MSCI World Growth ex-U.S. Index     2.25       4.21       8.69       -8.02       n/a       n/a       -2.51            
Inception date: 1/31/07  
Turner Small Cap Equity Fund(8) —
Institutional Class Shares(3)		     1.84       5.52       12.82       n/a       n/a       n/a       24.14       0.29    
Investor Class Shares     1.66       5.34       12.53       -8.53       -2.34       n/a       5.41       6.16    
Russell 2000 Index     0.25       9.12       13.35       -4.29       1.60       n/a       5.24            
Inception date: 3/4/02  

 

(1)  Commenced operations on July 14, 2009.

(2)  Commenced operations on August 1, 2005.

(3)  Commenced operations on February 1, 2009.

(4)  Commenced operations on January 31, 2007.

(5)  Commenced operations on June 16, 2008.

(6)  Commenced operations on September 24, 2001.

(7)  Commenced operations on October 31, 2008.

(8)  Investing in technology and science companies and small- and mid-capitalization companies may subject the Funds to specific inherent risks, including above-average price fluctuations.

*  Returns of less than one year are cumulative, and not annualized.

Amounts designated as "—" have been rounded to $0 ($mil).

TURNER FUNDS 2010 ANNUAL REPORT 7


Expense Ratio†

    Gross
expense
ratio		   Net
expense
ratio		  
Turner Spectrum Fund  
Institutional Class Shares     2.50 %     1.95 %  
Investor Class Shares     2.75 %     2.20 %  
Class C Shares     3.50 %     2.95 %  
Turner Concentrated
Growth Fund		  
Investor Class Shares     1.34 %     0.82 %  
Turner Core Growth Fund  
Institutional Class Shares     0.92 %     0.69 %  
Investor Class Shares     1.17 %     0.94 %  
Turner Emerging Growth Fund  
Institutional Class Shares     1.35 %     1.17 %  
Investor Class Shares     1.58 %     1.42 %  
Turner Large Cap Growth Fund  
Institutional Class Shares     1.21 %     0.69 %  
Investor Class Shares     1.47 %     0.94 %  
Turner Midcap Growth Fund  
Institutional Class Shares     1.08 %     0.93 %  
Investor Class Shares     1.33 %     1.18 %  
Retirement Class Shares     1.58 %     1.43 %  
Turner New Enterprise Fund  
Investor Class Shares     1.25 %     0.64 %  
    Gross
expense
ratio		   Net
expense
ratio		  
Turner Small Cap Growth Fund  
Investor Class Shares     1.58 %     1.25 %  
Turner Quantitative Broad
Market Equity Fund		  
Institutional Class Shares     20.30 %     0.64 %  
Investor Class Shares     20.60 %     0.89 %  
Turner Quantitative Large Cap
Value Fund		  
Institutional Class Shares     14.51 %     0.69 %  
Investor Class Shares     15.93 %     0.94 %  
Turner Global
Opportunities Fund		  
Institutional Class Shares     1.96 %     1.11 %  
Investor Class Shares     2.21 %     1.36 %  
Turner International Core
Growth Fund		  
Institutional Class Shares     5.24 %     1.10 %  
Investor Class Shares     5.59 %     1.35 %  
Turner Small Cap Equity Fund  
Institutional Class Shares     1.60 %     1.21 %  
Investor Class Shares     1.90 %     1.46 %  

 

†  These expense ratios are based on the most recent prospectus and may differ from those shown in the financial highlights.

8 TURNER FUNDS 2010 ANNUAL REPORT


INVESTMENT REVIEW

Turner Spectrum Fund

Fund profile

September 30, 2010

g  Ticker symbol TSPEX

  Institutional Class Shares

g  CUSIP #900297664

  Institutional Class Shares

g  Top five holdings††

  (1) Hospira

  (2) Pfizer

  (3) Citigroup

  (4) IntercontinentalExchange

  (5) Universal Health Services, Cl B

g  % in five largest holdings 9.1%†

g  Number of holdings 340††

g  Price/earnings ratio 16.7

g  Weighted average market capitalization $4.74 billion

g  % of holdings with positive earnings surprises 66.0%

g  % of holdings with negative earnings surprises 15.1%

g  Net assets $180 million, Institutional Class Shares

Growth of a $100,000 investment in the
Turner Spectrum Fund, Institutional Class Shares:

May 7, 2009-September 30, 2010*,**

Average annual total returns (Periods ending September 30, 2010)

    One
year		   Since
Inception		  
Turner Spectrum Fund, Institutional Class Shares     0.77 %     6.31 %**  
Turner Spectrum Fund, Investor Class Shares     0.49 %     6.03 %**  
Turner Spectrum Fund, Class C Shares     -0.07 %     6.67 %***  
S&P 500 Index     10.16 %     20.30 %**  
Barclays Capital U.S. Aggregate Bond Index     8.16 %     9.55 %**  
Lipper Long/Short Equity Funds Classification     3.55 %     12.01 %**  

 

Sector weightings†:

Manager's discussion and analysis

In the 12 months ended September 30, the Turner Spectrum Fund, Institutional Class Shares (TSPEX) produced a 0.77% gain, diminished by unrewarding short positions in consumer, materials/processing, financial-services, and health-care stocks. The fund underperformed the S&P 500 Index's 10.16% gain, the Barclays Capital U.S. Aggregate Bond Index's 8.16% gain, and the Lipper Long/Short Equity Funds Classification's 3.55% gain.

The fund, which consists of seven Turner long/short strategies that seek to capitalize on both rising and falling stock prices, produced its best relative returns on the long side in the financial-services and health-care sectors. Long positions in producer-durables stocks hurt performance the most. The fund was conservatively positioned, with a net long exposure generally of less than 25%. It held broadly diversified positions in large-cap, mid-cap, and small-cap stocks, most of them traded in the U.S. In general, the smaller stocks performed best.

*  These figures represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate, so an investor's shares, when redeemed, may be worth more or less than their original cost. The performance in the above graph and table does not reflect the deduction of taxes the shareholder will pay on fund distributions or the redemptions of fund shares. Performance of the Institutional, Investor and Class C Shares will differ due to differences in fees.

**  The inception date of the Turner Spectrum Fund (Institutional Class Shares and Investor Class Shares) was May 7, 2009. Index returns are based on Institutional Class Shares inception date.

***  The inception date of the Turner Spectrum Fund (Class C Shares) was July 14, 2009.

†  Percentages based on total investments.

††  Cash equivalents are not being considered a holding for the top five holdings, but are counted in the number of holdings.

Cl — Class

TURNER FUNDS 2010 ANNUAL REPORT 9


INVESTMENT REVIEW

Turner Concentrated Growth Fund

Fund profile

September 30, 2010

g  Ticker symbol TTOPX

g  CUSIP #87252R862

g  Top five holdings††

  (1) Apple

  (2) Baidu ADR

  (3) QUALCOMM

  (4) Halliburton

  (5) Caterpillar

g  % in five largest holdings 28.2%†

g  Number of holdings 23††

g  Price/earnings ratio 19.4

g  Weighted average market capitalization $40.42 billion

g  % of holdings with positive earnings surprises 95.5%

g  % of holdings with negative earnings surprises 4.6%

g  Net assets $43 million

Growth of a $10,000 investment in the
Turner Concentrated Growth Fund:

September 30, 2000-September 30, 2010*

Average annual total returns (Periods ending September 30, 2010)

    One
year		   Three
years		   Five
years		   Ten
years		   Since
inception		  
Turner Concentrated Growth Fund     7.94 %     -13.07 %     -1.30 %     -10.18 %     -0.46 %  
Russell 1000 Growth Index     12.65 %     -4.36 %     2.06 %     -3.44 %     -1.56 %  

 

Sector weightings†:

Manager's discussion and analysis

Significant underperformance in four sectors impaired the total return of the Turner Concentrated Growth Fund (TTOPX) in the 12-month period ended September 30. As a result the fund, which contains a select few stocks that we think have the strongest expected earnings power and return potential, rose 7.94%, markedly lagging the Russell 1000 Growth Index's 12.65% gain.

Materials, financials, industrials, and health-care stocks, a 32% weighting, were the detractors from results. In those sectors, metals, mining, investment-management, insurance, semiconductor-capital-equipment, pharmaceutical, and medical-equipment shares performed poorly. Altogether, three of the fund's seven sector positions beat their corresponding index sectors. Consumer-discretionary and information-technology stocks, a 60% weighting, added the most extra return. Retailing, business-services, gaming, semiconductor, and data-networking shares were among the winning stock selections.

*  These figures represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate, so an investor's shares, when redeemed, may be worth more or less than their original cost. The performance in the above graph and table does not reflect the deduction of taxes the shareholder will pay on fund distributions or the redemptions of fund shares. The inception date of the Turner Concentrated Growth Fund was June 30, 1999.

†  Percentages based on total investments.

††  Cash equivalents are not being considered a holding for the top five holdings, but are counted in the number of holdings.

ADR — American Depositary Receipt

10 TURNER FUNDS 2010 ANNUAL REPORT


INVESTMENT REVIEW

Turner Core Growth Fund

Fund profile

September 30, 2010

g  Ticker symbol TTMEX

  Institutional Class Shares

g  CUSIP #900297847

  Institutional Class Shares

g  Top five holdings†††

  (1) Apple

  (2) PepsiCo

  (3) Halliburton

  (4) American Express

  (5) Lam Research

g  % in 5 largest holdings 17.4%†

g  Number of holdings 72†††

g  Price/earnings ratio 18.2

g  Weighted average market capitalization $44.55 billion

g  % of holdings with positive earnings surprises 80.3%

g  % of holdings with negative earnings surprises 16.9%

g  Net assets $378 million, Institutional Class Shares

Growth of a $250,000 investment in the
Turner Core Growth Fund, Institutional Class Shares:

February 28, 2001-September 30, 2010*,**

Average annual total returns (Periods ending September 30, 2010)

    One
year		   Three
years		   Five
years		   Since
inception		  
Turner Core Growth Fund, Institutional Class Shares     6.76 %     -9.43 %     -0.30 %     0.77 %**  
Turner Core Growth Fund, Investor Class Shares     6.51 %     -9.67 %     -0.59 %     0.06 %***  
Russell 1000 Growth Index     12.65 %     -4.36 %     2.06 %     0.10 %**  

 

Sector weightings†:

Manager's discussion and analysis

Losses in three major sectors contributed notably to the underperformance of the Turner Core Growth Fund, Institutional Class (TTMEX) in the 12-month period ended September 30. Stocks in the energy, financials, and industrials sectors accounted for 32% of the fund's holdings, and their losses, especially in energy-services, investment-management, insurance, metals, and mining shares, hurt results in those sectors. That depressed the overall return of the fund, which was up 6.76% and trailed the Russell 1000 Growth Index's 12.65% return.

Two of the fund's 10 sector positions outperformed their corresponding index sectors; the contributors to results were the information-technology and utilities sectors, a 26% weighting. Semiconductor, data-networking, wireless-communications, and telecommunications holdings produced good relative returns.

*  These figures represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate, so an investor's shares, when redeemed, may be worth more or less than their original cost. The performance in the above graph and table does not reflect the deduction of taxes the shareholder will pay on fund distributions or the redemptions of fund shares. On February 25, 2005, the Constellation TIP Core Growth Fund reorganized into the Turner Core Growth Fund. Performance of the Institutional and Investor Class Shares will differ due to differences in fees.

**  The inception date of the Turner Core Growth Fund (Institutional Class Shares) was February 28, 2001. Index returns are based on Institutional Class Shares inception date.

***  The inception date of the Turner Core Growth Fund (Investor Class Shares) was August 1, 2005.

†  Percentages based on total investments.

††  Cash equivalents include short-term investments held as collateral for securities lending activity. Please see Note 11 in Notes to Financial Statements for more detailed information.

†††  Cash equivalents and short-term investments are not being considered a holding for the top five holdings, but are counted in the number of holdings.

TURNER FUNDS 2010 ANNUAL REPORT 11


INVESTMENT REVIEW

Turner Emerging Growth Fund

Fund profile

September 30, 2010

g  Ticker symbol TMCGX

  Investor Class Shares

g  CUSIP #872524301

  Investor Class Shares

g  Top five holdings†††

  (1) Deckers Outdoor

  (2) Bucyrus International, Cl A

  (3) American Physicians Capital

  (4) Alexion Pharmaceuticals

  (5) Orthofix International

g  % in 5 largest holdings 11.3%†

g  Number of holdings 113†††

g  Price/earnings ratio 16.9

g  Weighted average market capitalization $1.60 billion

g  % of holdings with positive earnings surprises 68.8%

g  % of holdings with negative earnings surprises 23.2%

g  Net assets $177 million, Investor Class Shares

Growth of a $10,000 investment in the
Turner Emerging Growth Fund,
Investor Class Shares:

September 30, 2000-September 30, 2010*,***

Average annual total returns (Periods ending September 30, 2010)

    One
year		   Three
years		   Five
years		   Ten
years		   Since
inception		  
Turner Emerging Growth Fund, Institutional Class Shares     12.52 %     —       —       —       27.20 %**  
Turner Emerging Growth Fund, Investor Class Shares     12.22 %     -7.36 %     0.86 %     5.43 %     18.19 %***  
Russell 2000 Growth Index     14.79 %     -3.75 %     2.35 %     -0.13 %     2.07 %***  

 

Sector weightings†:

Manager's discussion and analysis

In the 12-month period ended September 30, the Turner Emerging Growth Fund, Investor Class Shares (TMCGX) gained 12.22%, underperforming the Russell 2000 Growth Index's 14.79% return. Subpar results in the information-technology sector, a 19% weighting, were the biggest drag on the fund's performance. Detractors here included semiconductor, data-networking, wireless-communications, and data-storage stocks.

Four of the fund's 10 sector positions added value. Health-care and industrials stocks, which amounted to 32% of holdings, outperformed by the largest margin. Pharmaceutical, biotechnology, medical-device, and industrial-equipment shares were relatively strong performers.

*  These figures represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate, so an investor's shares, when redeemed, may be worth more or less than their original cost. The performance in the above graph and table does not reflect the deduction of taxes the shareholder will pay on fund distributions or the redemptions of fund shares. Performance of the Institutional and Investor Class Shares will differ due to differences in fees.

**  The inception date of the Turner Emerging Growth Fund (Institutional Class Shares) was February 1, 2009.

***  The inception date of the Turner Emerging Growth Fund (Investor Class Shares) was February 27, 1998. Index returns are based on Investor Class Shares inception date.

†  Percentages based on total investments.

††  Cash equivalents include short-term investments held as collateral for securities lending activity. Please see Note 11 in Notes to Financial Statements for more detailed information.

†††  Cash equivalents and short-term investments are not being considered a holding for the top five holdings, but are counted in the number of holdings.

Cl — Class

Amounts designated as "—" are not applicable.

12 TURNER FUNDS 2010 ANNUAL REPORT


INVESTMENT REVIEW

Turner Large Cap Growth Fund

Fund profile

September 30, 2010

g  Ticker symbol TSGEX

  Institutional Class Shares

g  CUSIP #87252R839

  Institutional Class Shares

g  Top five holdings†††

  (1) Apple

  (2) PepsiCo

  (3) Broadcom, Cl A

  (4) Halliburton

  (5) QUALCOMM

g  % in 5 largest holdings 19.6%†

g  Number of holdings 65†††

g  Price/earnings ratio 18.1

g  Weighted average market capitalization $46.32 billion

g  % of holdings with positive earnings surprises 89.1%

g  % of holdings with negative earnings surprises 10.9%

g  Net assets $118 million, Institutional Class Shares

Growth of a $250,000 investment in the
Turner Large Cap Growth Fund,
Institutional Class Shares:

September 30, 2000-September 30, 2010*,**

Average annual total returns (Periods ending September 30, 2010)

    One
year		   Three
years		   Five
years		   Ten
years		   Since
inception		  
Turner Large Cap Growth Fund, Institutional Class Shares     10.00 %     -10.37 %     -1.93 %     -6.68 %     -6.66 %**  
Turner Large Cap Growth Fund, Investor Class Shares     9.58 %     -10.66 %     —       —       -5.41 %***  
Russell Top 200 Growth Index     10.57 %     -4.49 %     1.81 %     -4.20 %     -4.51 %**  
Russell 1000 Growth Index     12.65 %     -4.36 %     2.06 %     -3.44 %     -3.64 %**  

 

Sector weightings†:

Manager's discussion and analysis

Strong results in the consumer-discretionary and technology sectors weren't enough to offset weak relative returns in other sectors for the Turner Large Cap Growth Fund, Institutional Class (TSGEX) in the 12-month period ended September 30. Although the fund gained 10.00%, that gain slightly underperformed the Russell Top 200 Growth Index's 10.57% rise.

Consumer discretionary and information technology were the only sectors to beat the corresponding index sectors. Retailing, business-services, apparel, consumer-electronics, data-networking, wireless-communications, and semiconductor shares did especially well; together, they accounted for 49% of the fund's investments. Detracting most from performance was a loss in the industrials sector, which represented 9% of the portfolio. Relatively poor performers in those sectors included metals and mining shares.

*  These figures represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate, so an investor's shares, when redeemed, may be worth more or less than their original cost. The performance in the above graph and table does not reflect the deduction of taxes the shareholder will pay on fund distributions or the redemptions of fund shares. Performance of the Institutional and Investor Class Shares will differ due to differences in fees.

**  The inception date of the Turner Large Cap Growth Fund (Institutional Class Shares) was June 14, 2000. Index returns are based on Institutional Class Shares inception date.

***  The inception date of the Turner Large Cap Growth Fund (Investor Class Shares) was January 31, 2007.

†  Percentages based on total investments.

††  Cash equivalents include short-term investments held as collateral for securities lending activity. Please see Note 11 in Notes to Financial Statements for more detailed information.

†††  Cash equivalents and short-term investments are not being considered a holding for the top five holdings, but are counted in the number of holdings.

Cl — Class

Amounts designated as "—" are not applicable.

TURNER FUNDS 2010 ANNUAL REPORT 13


INVESTMENT REVIEW

Turner Midcap Growth Fund

Fund profile

September 30, 2010

g  Ticker symbol TMGFX

  Investor Class Shares

g  CUSIP #900297409

  Investor Class Shares

g  Top five holdings†††

  (1) F5 Networks

  (2) Cummins

  (3) Starwood Hotels & Resorts Worldwide

  (4) Crown Castle International

  (5) Salesforce.com

g  % in 5 largest holdings 10.5%†

g  Number of holdings 85†††

g  Price/earnings ratio 19.0

g  Weighted average market capitalization $7.50 billion

g  % of holdings with positive earnings surprises 78.6%

g  % of holdings with negative earnings surprises 20.2%

g  Net assets $751 million, Investor Class Shares

Growth of a $10,000 investment in the
Turner Midcap Growth Fund, Investor Class Shares:

September 30, 2000-September 30, 2010*,***

Average annual total returns (Periods ending September 30, 2010)

    One
year		   Three
years		   Five
years		   Ten
years		   Since
inception		  
Turner Midcap Growth Fund, Institutional Class Shares     14.47 %     —       —       —       -6.26 %**  
Turner Midcap Growth Fund, Investor Class Shares     14.21 %     -5.93 %     2.41 %     -3.50 %     9.81 %***  
Turner Midcap Growth Fund, Retirement Class Shares     13.93 %     -6.16 %     2.09 %     —       5.78 %****  
Russell Midcap Growth Index     18.27 %     -3.90 %     2.86 %     -0.88 %     6.38 %***  

 

Sector weightings†:

Manager's discussion and analysis

In the 12-month period ended September 30, the Turner Midcap Growth Fund, Investor Class (TMGFX) advanced 14.21%, a result that underperformed the Russell Midcap Growth Index's 18.27% gain.

The fund's performance was most impaired by unfavorable relative returns in the health-care and industrials sectors, a 22% weighting; the fund's biotechnology, medical-equipment, and industrial-equipment stocks were key detractors. Four of the fund's 10 sector positions trumped their corresponding index sectors, with information technology, utilities, and consumer discretionary, a 43% weighting, adding the most value. Contributing the greatest degree of outperformance were semiconductor, data-networking, telecommunications, retailing, and apparel stocks.

*  These figures represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate, so an investor's shares, when redeemed, may be worth more or less than their original cost. The performance in the above graph and table does not reflect the deduction of taxes the shareholder will pay on fund distributions or the redemptions of fund shares. Performance of the Institutional, Investor and Retirement Class Shares will differ due to differences in fees.

**  The inception date of the Turner Midcap Growth Fund (Institutional Class Shares) was June 16, 2008.

***  The inception date of the Turner Midcap Growth Fund (Investor Class Shares) was October 1, 1996. Index returns are based on Investor Class Shares inception date.

****  The inception date of the Turner Midcap Growth Fund (Retirement Class Shares) was September 24, 2001.

†  Percentages based on total investments.

††  Cash equivalents include short-term investments held as collateral for securities lending activity. Please see Note 11 in Notes to Financial Statements for more detailed information.

†††  Cash equivalents and short-term investments are not being considered a holding for the top five holdings, but are counted in the number of holdings.

Amounts designated as "—" are not applicable.

14 TURNER FUNDS 2010 ANNUAL REPORT


INVESTMENT REVIEW

Turner New Enterprise Fund

Fund profile

September 30, 2010

g  Ticker symbol TBTBX

g  CUSIP #87252R797

g  Top five holdings†††

  (1) F5 Networks

  (2) Apple

  (3) Netlogic Microsystems

  (4) Alexion Pharmaceuticals

  (5) Concho Resources

g  % in 5 largest holdings 22.6%†

g  Number of holdings 31†††

g  Price/earnings ratio 16.8

g  Weighted average market capitalization $22.07 billion

g  % of holdings with positive earnings surprises 93.3%

g  % of holdings with negative earnings surprises 3.3%

g  Net assets $23 million

Growth of a $10,000 investment in the
Turner New Enterprise Fund:

September 30, 2000-September 30, 2010*

Average annual total returns (Periods ending September 30, 2010)

    One
year		   Three
years		   Five
years		   Ten
years		   Since
inception		  
Turner New Enterprise Fund     18.25 %     -6.90 %     3.73 %     -5.60 %     -3.37 %  
NASDAQ Composite Index     12.77 %     -3.27 %     2.92 %     -3.52 %     -4.15 %  

 

Sector weightings†:

Manager's discussion and analysis

Good stock selection powered the Turner New Enterprise Fund (TBTBX) to an 18.25% gain in the 12-month period ended September 30. The fund's return exceeded that of the NASDAQ Composite Index by 5.48 percentage points.

Five of the fund's seven sector positions outperformed their corresponding index sectors. Returns in three sectors — information technology, health care, and materials, a 57% weighting — were responsible for much of the fund's performance premium. Semiconductor, data-networking, wireless-communications, biotechnology, medical-products, metals, and mining shares contributed the most. A 12% position in consumer-discretionary stocks was the main detractor, with restaurant, gaming, and apparel shares recording poor relative returns.

*  These figures represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate, so an investor's shares, when redeemed, may be worth more or less than their original cost. The performance in the above graph and table does not reflect the deduction of taxes the shareholder will pay on fund distributions or the redemptions of fund shares. The inception date of the Turner New Enterprise Fund was June 30, 2000.

†  Percentages based on total investments.

††  Cash equivalents include short-term investments held as collateral for securities lending activity. Please see Note 11 in Notes to Financials for more detailed information.

†††  Cash equivalents and short-term investments are not being considered a holding for the top five holdings, but are counted in the number of holdings.

TURNER FUNDS 2010 ANNUAL REPORT 15


INVESTMENT REVIEW

Turner Small Cap Growth Fund

Fund profile

September 30, 2010

g  Ticker symbol TSCEX

g  CUSIP #900297300

g  Top five holdings†††

  (1) Aruba Networks

  (2) Netlogic Microsystems

  (3) AMERIGROUP

  (4) Genesee & Wyoming, Cl A

  (5) Warnaco Group

g  % in 5 largest holdings 6.7%†

g  Number of holdings 120†††

g  Price/earnings ratio 19.0

g  Weighted average market capitalization $1.63 billion

g  % of holdings with positive earnings surprises 74.0%

g  % of holdings with negative earnings surprises 20.2%

g  Net assets $275 million

Growth of a $10,000 investment in the
Turner Small Cap Growth Fund:

September 30, 2000-September 30, 2010*

Average annual total returns (Periods ending September 30, 2010)

    One
year		   Three
years		   Five
years		   Ten
years		   Since
inception		  
Turner Small Cap Growth Fund     15.10 %     -4.23 %     3.26 %     -0.73 %     10.78 %  
Russell 2000 Growth Index     14.79 %     -3.75 %     2.35 %     -0.13 %     4.91 %  

 

Sector weightings†:

Manager's discussion and analysis

The Turner Small Cap Growth Fund (TSCEX) produced favorable, substantial relative returns in four of the nine market sectors in which it was invested in the 12-month period ended September 30. That was enough to enable the fund to outpace its benchmark, the Russell 2000 Growth Index. The fund recorded a gain of 15.10%, a performance advantage of 0.31 percentage point over the Russell 2000 Growth Index's 14.79% return.

The fund's best relative performers were health-care, energy, and consumer-discretionary stocks, a 35% weighting. Specifically, pharmaceutical, diagnostic-test, medical-equipment, petroleum, energy-services, apparel, retailing, and business-services shares did best in those sectors. Information-technology and financials stocks, a 27% weighting, were drags on performance; semiconductor, data-networking, software, banking, insurance, and diversified-financial shares were among the laggards.

*  These figures represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate, so an investor's shares, when redeemed, may be worth more or less than their original cost. The performance in the above graph and table does not reflect the deduction of taxes the shareholder will pay on fund distributions or the redemptions of fund shares. The inception date of the Turner Small Cap Growth Fund was February 7, 1994.

†  Percentages based on total investments.

††  Cash equivalents include short-term investments held as collateral for securities lending activity. Please see Note 11 in Notes to Financial Statements for more detailed information.

†††  Cash equivalents and short-term investments are not being considered a holding for the top five holdings, but are counted in the number of holdings.

Cl — Class

16 TURNER FUNDS 2010 ANNUAL REPORT


INVESTMENT REVIEW

Turner Quantitative Broad Market Equity Fund

Fund profile

September 30, 2010

g  Ticker symbol TBMEX

  Institutional Class Shares

g  CUSIP #900297730

  Institutional Class Shares

g  Top five holdings††

  (1) Apple

  (2) Microsoft

  (3) Wal-Mart Stores

  (4) Pfizer

  (5) Bristol-Myers Squibb

g  % in 5 largest holdings 8.6%†

g  Number of holdings 110††

g  Price/earnings ratio 13.2

g  Weighted average market capitalization $63.68 billion

g  % of holdings with positive earnings surprises 84.4%

g  % of holdings with negative earnings surprises 13.8%

g  Net assets $11 million, Institutional Class Shares

Growth of a $250,000 investment in the
Turner Quantitative Broad Market Equity Fund,
Institutional Class Shares:

June 30, 2008-September 30, 2010*

Average annual total returns (Periods ending September 30, 2010)

    One
year		   Since
inception		  
Turner Quantitative Broad Market Equity Fund, Institutional Class Shares     8.30 %     -4.19 %  
Turner Quantitative Broad Market Equity Fund, Investor Class Shares     7.98 %     -4.43 %  
Russell 3000 Index     10.96 %     -2.35 %  
S&P 500 Index     10.16 %     -2.72 %  

 

Sector weightings†:

Manager's discussion and analysis

In the 12-month period ended September 30, the Turner Quantitative Broad Market Equity Fund, Institutional Class Shares (TBMEX) rose 8.30%, a performance that fell short of the Russell 3000 Index's 10.96% gain.

The fund recorded good relative returns in three of 10 sectors, whose holdings were selected because they ranked highly in our proprietary quantitative model. Particularly rewarding relative returns were produced by the energy sector, a 10% weighting. Petroleum and energy-services shares were among the best performers in that sector. The model was less effective at selecting good stocks in the other sectors. Impairing results the most were holdings in the health-care and financials sectors, a 28% weighting. Pharmaceutical, medical-device, health-services, banking, insurance, and diversified-financial stocks were the biggest detractors.

*  These figures represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate, so an investor's shares, when redeemed, may be worth more or less than their original cost. The performance in the above graph and table does not reflect the deduction of taxes the shareholder will pay on fund distributions or the redemption of fund shares. The inception date of the Turner Quantitative Broad Market Equity Fund was June 30, 2008. Performance of the Institutional and Investor Class Shares will differ due to the difference in fees.

†  Percentages based on total investments.

††  Cash equivalents are not being considered a holding for the top five holdings, but are counted in the number of holdings.

TURNER FUNDS 2010 ANNUAL REPORT 17


INVESTMENT REVIEW

Turner Quantitative Large Cap Value Fund

Fund profile

September 30, 2010

g  Ticker symbol TLVFX

  Institutional Class Shares

g  CUSIP #900297821

  Institutional Class Shares

g  Top five holdings††

  (1) Exxon Mobil

  (2) AT&T

  (3) Berkshire Hathaway, Cl B

  (4) JPMorgan Chase

  (5) General Electric

g  % in 5 largest holdings 14.5%†

g  Number of holdings 91††

g  Price/earnings ratio 12.9

g  Weighted average market capitalization $63.49 billion

g  % of holdings with positive earnings surprises 77.8%

g  % of holdings with negative earnings surprises 20.0%

g  Net assets $0.8 million, Institutional Class Shares

Growth of a $25,000 investment in the
Turner Quantitative Large Cap Value Fund,
Institutional Class Shares:

October 10, 2005-September 30, 2010*,**

Average annual total returns (Periods ending September 30, 2010)

    One
year		   Three
years		   Since
inception		  
Turner Quantitative Large Cap Value Fund, Institutional Class Shares     7.24 %     -9.48 %     -0.24 %**  
Turner Quantitative Large Cap Value Fund, Investor Class Shares     7.07 %     —       4.53 %***  
Russell 1000 Value Index     8.90 %     -9.39 %     0.30 %**  

 

Sector weightings†:

Manager's discussion and analysis

In the 12 months ended September 30, the Turner Quantitative Large Cap Value Fund, Institutional Class Shares (TLVFX) was up 7.24%. The gain trailed that of the Russell 1000 Value Index, which rose 8.90%.

The fund is invested in large-cap value stocks that rank highly in our proprietary quantitative model. The model had mixed success at picking outperforming stocks: four of the fund's 10 sector investments beat their corresponding index sectors. Positions in the financials and energy sectors, a 37% weighting, enhanced performance to the greatest degree; insurance, securities-exchange, investment-management, petroleum, and energy-services shares did best. Hurting results the most were positions in the health-care and consumer-discretionary sectors, which represented 21% of the portfolio; pharmaceutical, medical-equipment, health-services, apparel, restaurant, and retailing shares were significant detractors.

*  These figures represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate, so an investor's shares, when redeemed, may be worth more or less than their original cost. The performance in the above graph and table does not reflect the deduction of taxes the shareholder will pay on fund distributions or the redemptions of fund shares. Performance of the Institutional and Investor Class Shares will differ due to differences in fees.

**  The inception date of the Turner Quantitative Large Cap Value Fund (Institutional Class Shares) was October 10, 2005. Index returns are based on Institutional Class Shares inception date.

*** The inception date of the Turner Quantitative Large Cap Value Fund (Investor Class Shares) was October 31, 2008.

†  Percentages based on total investments.

††  Cash equivalents are not being considered a holding for the top five holdings, but are counted in the number of holdings.

Cl — Class

Amounts designated as "—" are not applicable.

18 TURNER FUNDS 2010 ANNUAL REPORT


INVESTMENT REVIEW

Turner Global Opportunities Fund

Fund profile

September 30, 2010

g  Ticker symbol TGLBX

  Institutional Class Shares

g  CUSIP #900297623

  Institutional Class Shares

g  Top five holdings††

  (1) Apple

  (2) F5 Networks

  (3) Alexion Pharmaceuticals

  (4) ASML Holding, NY Shares

  (5) Lam Research

g  % in 5 largest holdings  25.5%†

g  Number of holdings 33††

g  Price/earnings ratio 18.0

g  Weighted average market capitalization $36.59 billion

g  % of holdings with positive earnings surprises 70.9%

g  % of holdings with negative earnings surprises 10.1%

g  Net Assets $1 million, Institutional Class Shares

Growth of a $250,000 investment in the
Turner Global Opportunities Fund,
Institutional Class Shares:

May 7, 2010-September 30, 2010*

Cumulative total returns (Period ending September 30, 2010)

    Since
inception		  
Turner Global Opportunities Fund, Institutional Class Shares     15.20 %**  
Turner Global Opportunities Fund, Investor Class Shares     15.00 %**  
MSCI World Growth Index     9.53 %**  
MSCI World Index     8.14 %**  

 

Sector weightings†:

Manager's discussion and analysis

The Turner Global Opportunities Fund, Institutional Class Shares (TGLBX) got off to a strong start in both absolute and relative terms in its first five months of operation. The fund produced a double-digit gain, 15.20%, which beat the MSCI World Growth Index's 9.53% return by 5.67 percentage points.

On balance, stock selection was superior, with five of eight sector positions outperforming their corresponding index sectors. The two sectors that produced the best results were information technology and consumer discretionary, which amounted to 43% of holdings. In those sectors, semiconductor, data-networking, wireless-communications, retailing, business-services, and apparel shares were among the outperformers. The fund's performance was hurt by unsatisfactory relative returns in the industrials, materials, and health-care sectors, with a combined weighting of 24%. Semiconductor-capital-equipment, heavy-equipment, metals, mining, and biotechnology stocks were the biggest laggards.

*  These figures represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate, so an investor's shares, when redeemed, may be worth more or less than their original cost. The performance in the above graph and table does not reflect the deduction of taxes the shareholder will pay on fund distributions or the redemptions of fund shares. The inception date of the Turner Global Opportunities Fund was May 7, 2010. Performance of the Institutional and Investor Class Shares will differ due to differences in fees.

**  Cumulative return, not annualized.

†  Percentages based on total investments.

††  Cash equivalents are not being considered a holding for the top five holdings, but are counted in the number of holdings.

MSCI — Morgan Stanley Capital International

NY — New York

TURNER FUNDS 2010 ANNUAL REPORT 19


INVESTMENT REVIEW

Turner International Core Growth Fund

Fund profile

September 30, 2010

g  Ticker symbol TICGX

  Institutional Class Shares

g  CUSIP #900297771

  Institutional Class Shares

g  Top five holdings††

  (1) Nestle

  (2) Novartis

  (3) Rio Tinto

  (4) BHP Billiton

  (5) ASML Holding

g  % in 5 largest holdings 13.0%†

g  Number of holdings 70††

g  Price/earnings ratio 16.0

g  Weighted average market capitalization $42.07 billion

g  % of holdings with positive earnings surprises 43.5%

g  % of holdings with negative earnings surprises 15.9%

g  Net assets $5 million, Institutional Class Shares

Growth of a $250,000 investment in the
Turner International Core Growth Fund,
Institutional Class Shares:

January 31, 2007-September 30, 2010*,**

Average annual total returns (Periods ending September 30, 2010)

    One
year		   Three
years		   Since
inception		  
Turner International Core Growth Fund, Institutional Class Shares     15.88 %     -6.98 %     -0.47 %**  
Turner International Core Growth Fund, Investor Class Shares     15.61 %     —       25.63 %***  
MSCI World Growth ex-U.S. Index     8.69 %     -8.02 %     -2.51 %**  

 

Sector weightings†:

Manager's discussion and analysis

Generally good stock selection resulted in the Turner International Core Growth Fund, Institutional Class Shares (TICGX) recording a 15.88% gain in the 12-month period ended September 30. That return was good enough to beat the MSCI World Growth ex-U.S. Index's 8.69% return by 7.19 percentage points.

Seven of 10 sector positions contributed to the fund's results. Consumer-staples and energy holdings, a 20% weighting, added the most value; in those sectors, food-processing, beverage, supermarket, petroleum, and energy-services shares performed especially well. Information-technology and industrials positions, a 23% weighting, were the two detractors from performance, with semiconductor, data-networking, and heavy-equipment stocks providing weak relative returns.

*  These figures represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate, so an investor's shares, when redeemed, may be worth more or less than their original cost. The performance in the above graph and table does not reflect the deduction of taxes the shareholder will pay on fund distributions or the redemptions of fund shares. Performance of the Institutional and Investor Class Shares will differ due to differences in fees.

**  The inception date of the Turner International Core Growth Fund (Institutional Class Shares) was January 31, 2007. Index returns are based on Institutional Class Shares inception date.

***  The inception date of the Turner International Core Growth Fund (Investor Class Shares) was October 31, 2008.

†  Percentages based on total investments.

††  Cash equivalents are not being considered a holding for the top five holdings, but are counted in the number of holdings.

MSCI — Morgan Stanley Capital International

Amounts designated as "—" are not applicable.

20 TURNER FUNDS 2010 ANNUAL REPORT


INVESTMENT REVIEW

Turner Small Cap Equity Fund

Fund profile

September 30, 2010

g  Ticker symbol TSEIX

  Investor Class Shares

g  CUSIP #87252R714

  Investor Class Shares

g  Top five holdings†††

  (1) Earthlink

  (2) Sally Beauty Holdings

  (3) 99 Cents Only Stores

  (4) Mentor Graphics

  (5) Syniverse Holdings

g  % in 5 largest holdings 9.3%†

g  Number of holdings 86†††

g  Price/earnings ratio 15.4

g  Weighted average market capitalization $1.45 billion

g  % of holdings with positive earnings surprises 69.4%

g  % of holdings with negative earnings surprises 16.5%

g  Net assets $6 million, Investor Class Shares

Growth of a $10,000 investment in the
Turner Small Cap Equity Fund,
Investor Class Shares:

March 4, 2002-September 30, 2010*,***

Average annual total returns (Periods ending September 30, 2010)

    One
year		   Three
years		   Five
years		   Since
inception		  
Turner Small Cap Equity Fund, Institutional Class Shares     12.82 %     —       —       24.14 %**  
Turner Small Cap Equity Fund, Investor Class Shares     12.53 %     -8.53 %     -2.34 %     5.41 %***  
Russell 2000 Index     13.35 %     -4.29 %     1.60 %     5.24 %***  

 

Sector weightings†:

Manager's discussion and analysis

The Turner Small Cap Equity Fund, Investor Class Shares (TSEIX) returned 12.53% in the 12-month period ended September 30. The fund's gain was less than that of the benchmark, the Russell 2000 Index, which climbed 13.35%.

The fund is invested in both growth and value stocks in the 10 market sectors; five of those sector positions beat their index counterparts, but they didn't represent enough of a portfolio mass to prevent the fund from underperforming. Industrials and health-care shares, which amounted to a 24% position, produced the strongest relative returns. In those sectors, heavy-equipment, construction, health-services, and medical-equipment stocks delivered extra return. Financials and information-technology shares, a 40% weighting, were the biggest drags on performance. Banking, insurance, real-estate, information-services, software, and digital-equipment stocks recorded subpar results.

*  These figures represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate, so an investor's shares, when redeemed, may be worth more or less than their original cost. The performance in the above graph and table does not reflect the deduction of taxes the shareholder will pay on fund distributions or the redemptions of fund shares. Performance of the Institutional and Investor Class Shares will differ due to differences in fees.

**  The inception date of the Turner Small Cap Equity Fund (Institutional Class Shares) was February 1, 2009.

***  The inception date of the Turner Small Cap Equity Fund (Investor Class Shares) was March 4, 2002. Index returns are based on Investor Class Shares inception date.

†  Percentages based on total investments.

††  Cash equivalents include short-term investments held as collateral for securities lending activity. Please see Note 11 in Notes to Financial Statements for more detailed information.

†††  Cash equivalents and short-term investments are not being considered a holding for the top five holdings, but are counted in the number of holdings.

Amounts designated as "—" are not applicable.

TURNER FUNDS 2010 ANNUAL REPORT 21



FINANCIAL STATEMENTS

Schedule of investments

Turner Spectrum Fund

September 30, 2010

    Shares   Value
(000)		  
Common stock—69.3%  
Consumer discretionary—10.5%  
Abercrombie & Fitch, Cl A     22,710     $ 893    
Anta Sports Products     157,000       364    
Belle International Holdings     93,000       187    
Brilliance China Automotive
Holdings*		     345,329       257    
Buffalo Wild Wings*     37,160       1,779    
California Pizza Kitchen*     18,690       319    
Citi Trends*     12,860       312    
Coach     9,300       400    
Columbia Sportswear     6,880       402    
CROCS*     129,450       1,684    
Deckers Outdoor*     18,070       903    
DineEquity*     9,730       438    
Education Management*     25,766       378    
Fossil*     4,910       264    
Gaylord Entertainment*     14,160       432    
Guess?     24,320       988    
Haier Electronics Group*     689,470       581    
Harley-Davidson     11,980       341    
Interpublic Group of Cos.*     50,620       508    
J.C. Penney     40,370       1,097    
Joe's Jeans*     209,360       442    
Li & Fung     72,000       405    
Liberty Media - Starz, Ser A*     10,960       711    
L'Occitane International*     94,250       262    
Maidenform Brands*     33,930       979    
Nordstrom     12,500       465    
Parkson Retail Group     127,000       221    
PF Chang's China Bistro     20,580       951    
Skechers U.S.A., Cl A*     21,300       500    
Starbucks     54,150       1,385    
Starwood Hotels & Resorts
Worldwide		     43,100       2,265    
Talbots*     114,121       1,495    
Tempur-Pedic International*     9,270       287    
True Religion Apparel*     11,274       241    
Unifi*     60,880       274    
Urban Outfitters*     20,910       657    
WMS Industries*     16,100       613    
Wyndham Worldwide     17,260       474    
Total Consumer discretionary             25,154    

 

    Shares   Value
(000)		  
Consumer staples—1.3%  
Alberto-Culver, Cl B     15,230     $ 574    
Green Mountain Coffee Roasters*     26,270       819    
Hengan International Group     26,802       267    
Mead Johnson Nutrition, Cl A     16,990       967    
Prestige Brands Holdings*     44,160       437    
Total Consumer staples             3,064    
Energy—3.1%  
BreitBurn Energy Partners LP     45,540       832    
Cairn Energy*     34,500       246    
Cimarex Energy     8,130       538    
Complete Production Services*     32,670       668    
EXCO Resources     30,620       455    
National Oilwell Varco     32,840       1,460    
Occidental Petroleum     8,760       686    
RPC     25,690       544    
Weatherford International*     114,960       1,966    
Total Energy             7,395    
Financials—15.5%  
Affiliated Managers Group*     23,090       1,801    
Aflac     28,480       1,473    
Alexandria Real Estate Equities     7,495       525    
AMB Property     52,730       1,396    
American Express     44,220       1,859    
Banco Compartamos     29,502       188    
Banco Latinoamericano de
Comercio Exterior, Cl E		     29,670       429    
Bank of Nova Scotia     21,390       1,140    
Bank of the Ozarks     14,120       524    
BlackRock, Cl A     4,570       778    
Blackstone Group LP     23,580       299    
BNP Paribas     11,780       838    
BR Malls Participacoes     150,620       1,243    
Brown & Brown     108,180       2,184    
CB Richard Ellis Group, Cl A*     24,390       446    
Citigroup*     1,026,810       4,004    
Digital Realty Trust     9,020       556    
Discover Financial Services     31,960       533    
Entertainment Properties Trust     14,690       634    
First Horizon National*     2,440       28    
Greenhill     4,940       392    
Highwoods Properties     18,570       603    
Host Hotels & Resorts     69,460       1,006    

 

22 TURNER FUNDS 2010 ANNUAL REPORT


Schedule of investments

Turner Spectrum Fund

    Shares   Value
(000)		  
IntercontinentalExchange*     29,050     $ 3,042    
Invesco     27,050       574    
Julius Baer Group     25,950       945    
Kilroy Realty     13,510       448    
MetLife     10,740       413    
MSCI, Cl A*     23,880       793    
National Financial Partners*     48,880       619    
Och-Ziff Capital Management
Group LLC, Cl A		     96,890       1,444    
Prudential Financial     15,540       842    
Safeguard Scientifics*     37,470       469    
Signature Bank*     18,510       719    
Simon Property Group     8,640       801    
Sun Hung Kai Properties     41,670       720    
Tennessee Commerce Bancorp*     79,399       321    
Travelers     6,400       333    
Validus Holdings     32,910       868    
Ventas     14,870       767    
Total Financials             36,997    
Health care—19.4%  
Abbott Laboratories     30,880       1,613    
Alexion Pharmaceuticals*     12,170       783    
Allergan     18,310       1,218    
Amarin ADR*     80,314       207    
AMERIGROUP*     11,490       488    
Angiodynamics*     18,960       289    
Arqule*     51,600       266    
Arthrocare*     15,000       408    
BioMarin Pharmaceutical*     10,590       237    
Bristol-Myers Squibb     43,150       1,170    
Charles River Laboratories
International*		     60,320       2,000    
Community Health Systems*     43,530       1,348    
Cooper     11,280       521    
DexCom*     13,960       185    
Dynavax Technologies*     56,520       103    
Eli Lilly     55,680       2,034    
Emergency Medical Services, Cl A*     29,820       1,588    
Endo Pharmaceuticals Holdings*     13,190       438    
GlaxoSmithKline ADR     49,070       1,939    
Health Management
Associates, Cl A*		     38,370       294    
HeartWare International*     2,290       157    
Hill-Rom Holdings     6,710       241    

 

    Shares   Value
(000)		  
Hospira*     77,160     $ 4,399    
Human Genome Sciences*     23,230       692    
ICON ADR*     35,610       770    
Impax Laboratories*     13,000       257    
Intuitive Surgical*     4,710       1,336    
King Pharmaceuticals*     30,420       303    
Lincare Holdings     24,450       613    
Medco Health Solutions*     15,720       818    
NPS Pharmaceuticals*     92,800       635    
Onyx Pharmaceuticals*     53,100       1,401    
Orthofix International*     60,650       1,906    
Pfizer     235,480       4,043    
Pharmasset*     6,060       179    
Salix Pharmaceuticals*     4,650       185    
Savient Pharmaceuticals*     55,510       1,269    
Sequenom*     23,640       166    
Shire ADR     34,480       2,320    
United Therapeutics*     32,310       1,810    
UnitedHealth Group     8,570       301    
Universal Health Services, Cl B     75,180       2,921    
Valeant Pharmaceuticals
International*		     48,636       1,218    
Varian Medical Systems*     4,260       258    
Volcano*     32,120       834    
Watson Pharmaceuticals*     3,580       152    
Total Health care             46,313    
Industrials—3.4%  
A123 Systems*     42,070       377    
Bucyrus International, Cl A     18,380       1,275    
Continental Airlines, Cl B*     98,470       2,446    
DryShips*     94,310       454    
Ener1*     77,520       285    
GATX     13,550       397    
HUB Group, Cl A*     11,940       349    
Manpower     8,100       423    
MSC Industrial Direct, Cl A     8,540       462    
SFN Group*     35,940       216    
Union Pacific     8,550       699    
United Parcel Service, Cl B     12,660       844    
Total Industrials             8,227    
Information technology—13.1%  
Adobe Systems*     41,890       1,095    
Apple*     8,880       2,520    

 

TURNER FUNDS 2010 ANNUAL REPORT 23


FINANCIAL STATEMENTS

Schedule of investments

Turner Spectrum Fund

    Shares   Value
(000)		  
Ariba*     17,690     $ 334    
ARM Holdings ADR     22,180       416    
ASML Holding, NY Shares     20,790       618    
Atheros Communications*     19,750       520    
Blackboard*     9,330       336    
Broadcom, Cl A     14,630       518    
Cirrus Logic*     44,370       792    
Cree*     8,950       486    
Cypress Semiconductor*     144,050       1,812    
Digimarc*     25,680       602    
Entropic Communications*     135,730       1,303    
F5 Networks*     4,340       451    
Factset Research Systems     4,430       359    
Fidelity National Information
Services		     53,230       1,444    
GSI Commerce*     36,400       899    
HSW International*     54,339       336    
Hypercom*     136,230       885    
Isilon Systems*     21,450       478    
Juniper Networks*     15,370       466    
Lender Processing Services     12,480       415    
Linear Technology     16,500       507    
LogMeIn*     14,040       505    
Mediamind Technologies*     26,370       364    
Motorola*     131,000       1,117    
Netlogic Microsystems*     84,530       2,331    
Omnivision Technologies*     40,920       943    
Power-One*     37,270       339    
QUALCOMM     16,370       739    
Rackspace Hosting*     13,040       339    
Radiant Systems*     36,580       626    
SanDisk*     14,800       542    
Sonic Solutions*     34,050       388    
Teradata*     11,640       449    
Ultratech*     84,880       1,452    
Varian Semiconductor
Equipment Associates*		     25,990       748    
VeriFone Systems*     33,440       1,039    
VirnetX Holding     80,210       1,178    
VistaPrint*     6,350       245    
ZTE, Cl H     135,000       538    
Total Information technology             31,474    

 

    Shares/
Contracts		   Value
(000)		  
Materials—3.0%  
CF Industries Holdings     14,560     $ 1,391    
Freeport-McMoRan
Copper & Gold		     5,180       442    
General Moly*     96,500       353    
Goldcorp     10,370       451    
Huntsman     59,090       683    
Mosaic     12,010       706    
Schweitzer-Mauduit International     10,050       586    
Temple-Inland     74,620       1,392    
United States Steel     14,860       652    
Walter Energy     5,630       458    
Total Materials             7,114    
Total Common stock
(Cost $157,408)		             165,738    
Exchange traded funds—0.9%  
iShares Dow Jones U.S. Real
Estate Index Fund		     16,720       884    
Market Vectors Junior Gold
Miners ETF		     25,950       867    
ProShares UltraShort Technology     24,080       473    
Total Exchange traded funds
(Cost $1,971)		             2,224    
Exchange traded note—0.7%  
iPATH S&P 500 VIX Short-Term
Futures ETN		     91,490       1,584    
Total Exchange traded note
(Cost $1,544)		             1,584    
Put option contracts*—0.1%  
iShares Russell 2000 Index Fund,
11/10 at $65		     908       142    
NetEase.com, 10/10 at $37     195       8    
Total Put option contracts
(Cost $201)		             150    
Call option contract*—0.0%  
Micron Technologies, 10/10 at $7     456       21    
Total Call option contract
(Cost $12)		             21    

 

24 TURNER FUNDS 2010 ANNUAL REPORT


Schedule of investments

Turner Spectrum Fund

    Shares   Value
(000)		  
Cash equivalent—13.3%  
BlackRock TempCash Fund
Institutional Shares
0.240%**		     31,894,964     $ 31,895    
Total Cash equivalent
(Cost $31,895)		         31,895    
Total Investments—84.3%
(Cost $193,031)		       $ 201,612    

 

As of September 30, 2010, all of the Fund's investments were considered Level 1. Please see Note 2 in Notes to Financial Statements for further information regarding fair value measurements.

Percentages are based on Net Assets of $239,056.***

  *  Non-income producing security.

  **  Rate shown is the 7-day effective yield as of September 30, 2010.

  ***  This number is listed in thousands.

ADR — American Depositary Receipt

Cl — Class

ETF — Exchange Traded Fund

ETN — Exchange Traded Note

LLC — Limited Liability Company

LP — Limited Partnership

NY — New York

Ser — Series

S&P — Standard & Poor's

The accompanying notes are an integral part of the financial statements.

TURNER FUNDS 2010 ANNUAL REPORT 25


FINANCIAL STATEMENTS

Schedule of securities sold short

Turner Spectrum Fund

September 30, 2010

    Shares   Value
(000)		  
Common stock—38.6%  
Consumer discretionary—6.7%  
Adidas     5,063     $ 313    
Advance Auto Parts     5,990       351    
AutoNation*     24,710       575    
Bed Bath & Beyond*     12,590       547    
Buckle     9,730       258    
Chipotle Mexican Grill, Cl A*     5,830       1,003    
Galaxy Entertainment Group*     223,969       200    
Gymboree*     6,010       250    
H&R Block     66,390       860    
Li Ning     69,000       210    
Life Time Fitness*     12,990       513    
MarineMax*     25,210       177    
NetFlix*     3,990       647    
Panera Bread, Cl A*     11,900       1,054    
Peet's Coffee & Tea*     23,550       806    
Polo Ralph Lauren, Cl A     4,430       398    
Ross Stores     43,330       2,367    
Shenzhou International Group
Holdings		     138,263       169    
Strayer Education     2,300       401    
Tiffany     25,100       1,179    
Tractor Supply     7,230       287    
Weight Watchers International     11,910       371    
Williams-Sonoma     17,810       565    
Yum! Brands     52,720       2,428    
Total Consumer discretionary             15,929    
Consumer staples—2.1%  
American Dairy*     33,820       353    
Avon Products     15,080       484    
Campbell Soup     14,290       511    
Colgate-Palmolive     5,950       457    
Kellogg     28,070       1,418    
Ralcorp Holdings*     8,750       512    
Wal-Mart Stores     26,540       1,421    
Total Consumer staples             5,156    
Energy—2.0%  
Chevron     17,310       1,403    
Encana     48,730       1,473    
FMC Technologies*     21,420       1,463    
Noble     13,390       452    
Total Energy             4,791    

 

    Shares   Value
(000)		  
Financials—10.3%  
Apartment Investment &
Management, Cl A		     32,860     $ 703    
Arch Capital Group*     16,780       1,406    
Banco Santander Chile ADR     12,190       1,177    
Bank of Montreal     7,040       407    
CBOE Holdings     40,150       805    
City National     13,230       702    
Cullen/Frost Bankers     11,670       629    
Deutsche Bank     45,400       2,494    
Duke Realty     62,770       727    
Equity One     121,240       2,046    
Legg Mason     44,070       1,336    
Lincoln National     31,980       765    
Morgan Stanley     34,730       857    
optionsXpress Holdings*     40,180       617    
PNC Financial Services Group     22,290       1,157    
Prosperity Bancshares     12,670       411    
Raiffeisen International Bank
Holding		     8,327       388    
Schroders     18,500       418    
SVB Financial Group*     30,060       1,272    
TCF Financial     20,310       329    
TD Ameritrade Holding*     48,010       775    
UBS     125,340       2,135    
Unum Group     115,720       2,563    
Weingarten Realty Investors     20,700       452    
Total Financials             24,571    
Health care—7.9%  
AstraZeneca ADR     22,610       1,146    
athenahealth*     10,810       357    
Auxilium Pharmaceuticals*     20,610       511    
Biogen Idec*     10,900       612    
Cadence Pharmaceuticals*     28,100       234    
Cardinal Health     18,710       618    
Conceptus*     38,690       532    
Covance*     19,490       912    
Genomic Health*     29,700       397    
Isis Pharmaceuticals*     53,630       450    
Johnson & Johnson     76,800       4,758    
MannKind*     32,920       222    
Mednax*     7,650       408    
Medtronic     24,180       812    
MELA Sciences*     23,585       154    

 

26 TURNER FUNDS 2010 ANNUAL REPORT


Schedule of securities sold short

Turner Spectrum Fund

    Shares   Value
(000)		  
Momenta Pharmaceuticals*     11,010     $ 166    
Myriad Genetics*     111,460       1,829    
NuVasive*     21,740       764    
Perrigo     6,300       405    
Quest Diagnostics     12,300       621    
Roche Holding ADR     41,070       1,402    
Somaxon Pharmaceuticals*     194,070       755    
Stryker     16,260       814    
Total Health care             18,879    
Industrials—0.2%  
ITT     6,870       322    
Robert Half International     7,870       204    
Total Industrials             526    
Information technology—8.7%  
Autodesk*     42,180       1,348    
Avago Technologies*     23,510       529    
Celestica*     42,690       360    
Cisco Systems*     21,550       472    
Dolby Laboratories, Cl A*     8,270       470    
Fairchild Semiconductor
International, Cl A*		     49,190       463    
International Rectifier*     22,090       466    
Intersil, Cl A     35,090       410    
Intuit*     10,260       449    
Kulicke & Soffa Industries*     74,750       463    
Logitech International*     13,920       242    
Marvell Technology Group*     81,450       1,426    
Microsoft     23,010       564    
Molex     17,680       370    
Monolithic Power Systems*     20,290       331    
Monster Worldwide*     12,700       165    
NetEase.com ADR*     14,530       573    
Novellus Systems*     18,430       490    
OpenTable*     14,470       985    
Red Hat*     34,470       1,413    
Research In Motion*     45,420       2,212    
SAP ADR     38,320       1,890    
Sohu.com*     9,550       550    
Telefonaktiebolaget LM
Ericsson ADR		     40,510       444    
Tyco Electronics     18,090       528    

 

    Shares   Value
(000)		  
Volterra Semiconductor*     21,790     $ 469    
WebMD Health, Cl A*     55,550       2,771    
Total Information technology             20,853    
Materials—0.7%  
Allegheny Technologies     11,400       529    
Compass Minerals International     4,670       358    
Sherwin-Williams     9,150       688    
Total Materials             1,575    
Total Common stock
(Proceeds $91,411)		             92,280    
Exchange traded funds—10.1%  
Industrial Select Sector SPDR Fund     40,340       1,262    
iShares S&P SmallCap 600/BARRA
Growth Index Fund		     45,820       2,862    
Materials Select Sector SPDR Fund     18,780       616    
Pharmaceutical HOLDRs Trust     36,200       2,344    
Powershares QQQ     32,440       1,592    
Semiconductor HOLDRs Trust     39,780       1,102    
SPDR S&P 500 ETF Trust     54,840       6,259    
SPDR S&P Metals & Mining ETF     15,570       833    
SPDR S&P Retail ETF     72,250       3,019    
Vanguard Small-Cap Growth ETF     62,590       4,180    
Total Exchange traded funds
(Proceeds $23,274)		             24,069    
Total Securities sold short—48.7%
(Proceeds $114,685)		           $ 116,349    

 

As of September 30, 2010, all of the Fund's investments in securities sold short were considered Level 1. Please see Note 2 in Notes to Financial Statements for further information regarding fair value measurements.

Percentages are based on Net Assets of $239,056.**

  *  Non-income producing security.

  **  This number is listed in thousands.

ADR — American Depositary Receipt

Cl — Class

ETF — Exchange Traded Fund

S&P — Standard & Poor's

SPDR — Standard & Poor's Depositary Receipts

The accompanying notes are an integral part of the financial statements.

TURNER FUNDS 2010 ANNUAL REPORT 27


FINANCIAL STATEMENTS

Schedule of open options written

Turner Spectrum Fund

September 30, 2010

    Contracts   Value
(000)		  
Written call options*—0.1%  
Abbott Laboratories, 11/10 at $52.5     344     $ 36    
Bristol-Myers Squibb, 12/10 at $27     413       49    
Eli Lilly, 01/11 at $36     870       91    
GlaxoSmithKline, 11/10 at $39     446       67    
Pfizer, 12/10 at $17     656       53    
Total Open options written
(Premiums received $240)		           $ 296    

 

As of September 30, 2010, all of the Fund's investments in open options written were considered Level 1. Please see Note 2 in Notes to Financial Statements for further information regarding fair value measurements.

Percentages are based on Net Assets of $239,056.**

  *  Non-income producing securities.

  **  This numbers is listed in thousands.

The accompanying notes are an integral part of the financial statements.

28 TURNER FUNDS 2010 ANNUAL REPORT


Schedule of investments

Turner Concentrated Growth Fund

September 30, 2010

    Shares   Value
(000)		  
Common stock—95.1%†  
Consumer discretionary—13.3%  
Guess?     41,600     $ 1,690    
Las Vegas Sands*     58,810       2,050    
Starbucks     77,960       1,994    
Total Consumer discretionary             5,734    
Energy—7.9%  
Cimarex Energy     18,290       1,211    
Halliburton     65,510       2,166    
Total Energy             3,377    
Financials—8.2%  
CB Richard Ellis Group, Cl A*     99,240       1,814    
Citigroup*     436,850       1,704    
Total Financials             3,518    
Health care—8.3%  
Intuitive Surgical*     6,710       1,904    
United Therapeutics*     29,420       1,648    
Total Health care             3,552    
Industrials—5.0%  
Caterpillar     27,330       2,150    
Total Industrials             2,150    
Information technology—43.4%  
Apple*     9,050       2,568    
ASML Holding, NY Shares     44,880       1,335    
Baidu ADR*     23,060       2,366    
Broadcom, Cl A     59,570       2,108    
F5 Networks*     12,650       1,313    
Lam Research*     37,950       1,588    
Micron Technology*     286,260       2,064    
QUALCOMM     51,300       2,315    
Salesforce.com*     13,930       1,557    
VMware, Cl A*     16,890       1,435    
Total Information technology             18,649    

 

    Shares   Value
(000)		  
Materials—9.0%  
Goldcorp     47,930     $ 2,086    
Solutia*     110,250       1,766    
Total Materials             3,852    
Total Common stock
(Cost $33,005)		             40,832    
Cash equivalent—0.3%  
BlackRock TempCash Fund
Institutional Shares
0.240%**		     131,008       131    
Total Cash equivalent
(Cost $131)		             131    
Total Investments—95.4%
(Cost $33,136)		           $ 40,963    

 

As of September 30, 2010, all of the Fund's investments were considered Level 1. Please see Note 2 in Notes to Financial Statements for further information regarding fair value measurements.

Percentages are based on Net Assets of $42,924.***

  *  Non-income producing security.

  **  Rate shown is the 7-day effective yield as of September 30, 2010.

  ***  This number is listed in thousands.

  †  More narrow industries are utilized for compliance purposes, whereas broad sectors are utilized for reporting purposes.

ADR — American Depositary Receipt

Cl — Class

NY — New York

The accompanying notes are an integral part of the financial statements.

TURNER FUNDS 2010 ANNUAL REPORT 29


FINANCIAL STATEMENTS

Schedule of investments

Turner Core Growth Fund

September 30, 2010

    Shares   Value
(000)		  
Common stock—100.4%†  
Consumer discretionary—12.6%  
Amazon.com*     58,840     $ 9,241    
Coach     154,700       6,646    
DIRECTV, Cl A*     144,920       6,033    
Dollar Tree*     78,255       3,816    
Guess?     96,105       3,905    
Las Vegas Sands*     301,910       10,522    
priceline.com*     11,630       4,051    
Pulte Group*     818,190       7,167    
Starbucks     310,440       7,941    
Starwood Hotels & Resorts
Worldwide		     122,640       6,445    
Urban Outfitters*     75,460       2,372    
Total Consumer discretionary             68,139    
Consumer staples—9.2%  
Archer-Daniels-Midland     323,620       10,330    
Mead Johnson Nutrition, Cl A     187,040       10,645    
PepsiCo     336,950       22,387    
Whole Foods Market*     174,869       6,489    
Total Consumer staples             49,851    
Energy—11.2%  
Cimarex Energy     81,370       5,385    
Concho Resources*     80,850       5,350    
ConocoPhillips     208,330       11,964    
First Solar* #     28,700       4,229    
Halliburton     423,390       14,002    
National Oilwell Varco     87,730       3,901    
Occidental Petroleum     137,790       10,789    
QEP Resources     165,100       4,976    
Total Energy             60,596    
Financials—14.1%  
American Express     325,600       13,685    
CB Richard Ellis Group, Cl A*     312,620       5,715    
Citigroup*     2,326,800       9,074    
Digital Realty Trust #     95,830       5,913    
HDFC Bank ADR #     27,020       4,982    
Health Care REIT     59,770       2,829    
Host Hotels & Resorts     393,270       5,695    
IntercontinentalExchange*     71,550       7,493    
MSCI, Cl A*     108,570       3,606    

 

    Shares   Value
(000)		  
Simon Property Group     92,230     $ 8,553    
T. Rowe Price Group     177,620       8,892    
Total Financials             76,437    
Health care—11.3%  
Abbott Laboratories     221,910       11,593    
Alexion Pharmaceuticals*     84,520       5,440    
Allergan     124,580       8,288    
Celgene*     74,560       4,296    
Cerner*     46,380       3,895    
Express Scripts*     112,490       5,478    
Hospira*     75,964       4,331    
Human Genome Sciences*     149,959       4,467    
Intuitive Surgical*     25,278       7,172    
Universal Health Services, Cl B     156,452       6,080    
Total Health care             61,040    
Industrials—7.4%  
Caterpillar     143,630       11,301    
Cummins     137,890       12,490    
Deere     106,850       7,456    
Delta Air Lines*     341,080       3,970    
Fastenal     89,990       4,787    
Total Industrials             40,004    
Information technology—25.0%  
Apple*     116,720       33,119    
ASML Holding, NY Shares     237,750       7,068    
Baidu ADR*     51,030       5,237    
Broadcom, Cl A     288,080       10,195    
F5 Networks*     78,900       8,190    
Factset Research Systems     74,769       6,066    
Fidelity National Information
Services		     322,740       8,756    
Lam Research*     322,930       13,515    
Micron Technology*     393,450       2,837    
Motorola*     659,430       5,625    
NetApp*     90,570       4,510    
QUALCOMM     296,580       13,382    
Salesforce.com*     67,490       7,545    
SanDisk*     99,590       3,650    
VMware, Cl A*     66,930       5,685    
Total Information technology             135,380    

 

30 TURNER FUNDS 2010 ANNUAL REPORT


Schedule of investments

Turner Core Growth Fund

    Shares   Value
(000)		  
Materials—3.1%  
Cliffs Natural Resources     70,970     $ 4,536    
Goldcorp     199,950       8,702    
United States Steel     79,030       3,465    
Total Materials             16,703    
Telecommunication services—5.3%  
America Movil, Ser L ADR     196,610       10,485    
NII Holdings*     224,750       9,237    
Sprint Nextel*     1,938,110       8,974    
Total Telecommunication services             28,696    
Utilities—1.2%  
Questar     391,235       6,858    
Total Utilities             6,858    
Total Common stock
(Cost $442,376)		             543,704    
Cash equivalent—2.0%  
BlackRock TempCash Fund
Institutional Shares
0.240%** (1)		     10,643,165       10,643    
Total Cash equivalent
(Cost $10,643)		             10,643    
Total Investments—102.4%
(Cost $453,019)		           $ 554,347    

 

As of September 30, 2010, all of the Fund's investments were considered Level 1. Please see Note 2 in Notes to Financial Statements for further information regarding fair value measurements.

Percentages are based on Net Assets of $541,400.***

  *  Non-income producing security.

  **  Rate shown is the 7-day effective yield as of September 30, 2010.

  ***  This number is listed in thousands.

  †  More narrow industries are utilized for compliance purposes, whereas broad sectors are utilized for reporting purposes.

  #  Security fully or partially on loan at September 30, 2010. The total value of securities on loan at September 30, 2010, was $10,377.*** Certain of these securities may have been sold prior to period end and are included in receivable for investment securities sold on the Statement of Assets and Liabilities.

  (1)  The Fund lends securities in its portfolio pursuant to a securities lending agreement ("Lending Agreement") with Morgan Stanley. Unless otherwise agreed, security loans made pursuant to the Lending Agreement are required at all times to be secured by collateral equal to at least 100% of the market value of the securities loaned. Cash collateral received is invested pursuant to the terms of the Lending Agreement in the BlackRock TempCash Fund, Institutional Shares, a money market fund. All such investments are made at the risk of the Fund. As such, the Fund is liable for investment losses. The Fund receives an annual fee for its participation in the Lending Agreement based on projected lending activity. This security was purchased with cash collateral received from securities lending. The total value of such security at September 30, 2010 was $10,643.***

ADR — American Depositary Receipt

Cl — Class

NY — New York

REIT — Real Estate Investment Trust

Ser — Series

The accompanying notes are an integral part of the financial statements.

TURNER FUNDS 2010 ANNUAL REPORT 31


FINANCIAL STATEMENTS

Schedule of investments

Turner Emerging Growth Fund

September 30, 2010

    Shares   Value
(000)		  
Common 92.0%  
Consumer discretionary—17.2%  
7 Days Group Holdings ADR*     298,630     $ 5,372    
AnnTaylor Stores*     205,390       4,157    
Asbury Automotive Group*     239,530       3,370    
Boyd Gaming* #     84,630       614    
Buffalo Wild Wings* #     113,330       5,427    
California Pizza Kitchen*     241,630       4,122    
Chico's FAS     72,390       762    
Children's Place Retail Stores*     76,120       3,712    
Citi Trends*     204,730       4,957    
Cooper Tire & Rubber     256,400       5,033    
Cracker Barrel Old Country Store     83,110       4,219    
CROCS*     56,950       741    
Deckers Outdoor*     287,210       14,349    
G-III Apparel Group*     61,180       1,920    
Imax*     128,030       2,159    
Jo-Ann Stores*     58,660       2,613    
JOS A Bank Clothiers*     130,570       5,564    
Ryland Group     199,420       3,574    
Steven Madden*     78,330       3,216    
Ulta Salon Cosmetics & Fragrance*     64,640       1,887    
Total Consumer discretionary             77,768    
Consumer staples—4.6%  
Boston Beer, Cl A*     37,240       2,490    
Green Mountain Coffee Roasters*     148,275       4,625    
TreeHouse Foods*     149,367       6,886    
United Natural Foods*     207,908       6,890    
Total Consumer staples             20,891    
Energy—5.9%  
Brigham Exploration*     269,705       5,057    
Carrizo Oil & Gas*     172,788       4,137    
James River Coal*     193,460       3,391    
Key Energy Services*     407,080       3,871    
Lufkin Industries     42,930       1,885    
Rex Energy*     143,400       1,836    
Swift Energy*     99,980       2,807    
T-3 Energy Services*     137,710       3,601    
Total Energy             26,585    
Financials—5.7%  
American Physicians Capital     215,530       8,936    
Harleysville Group     85,890       2,816    

 

    Shares   Value
(000)		  
IBERIABANK     45,586     $ 2,279    
Oriental Financial Group     198,220       2,636    
Radian Group     684,100       5,350    
Sunstone Hotel Investors*     256,190       2,323    
Umpqua Holdings     135,180       1,533    
Total Financials             25,873    
Health care—17.3%  
Acorda Therapeutics*     70,732       2,335    
AGA Medical Holdings* #     77,267       1,078    
Alexion Pharmaceuticals*     137,620       8,857    
AMERIGROUP*     177,610       7,543    
Ardea Biosciences*     70,630       1,625    
Bio-Reference Labs*     127,170       2,653    
Catalyst Health Solutions*     113,300       3,989    
DexCom*     114,500       1,514    
HeartWare International* #     21,860       1,503    
HMS Holdings*     62,400       3,678    
ICON ADR*     220,670       4,771    
Impax Laboratories*     112,670       2,226    
Kendle International*     204,234       1,903    
Molina Healthcare*     96,580       2,607    
Orthofix International*     266,610       8,377    
Par Pharmaceutical*     52,250       1,520    
Parexel International*     182,214       4,215    
Pharmasset*     87,280       2,575    
PSS World Medical*     76,000       1,625    
Quality Systems #     65,460       4,341    
Questcor Pharmaceuticals*     271,300       2,691    
SXC Health Solutions*     116,194       4,237    
Volcano*     104,530       2,716    
Total Health care             78,579    
Industrials—15.1%  
American Science & Engineering     26,089       1,921    
ArvinMeritor*     325,250       5,054    
Bucyrus International, Cl A     162,591       11,276    
Clean Harbors*     63,930       4,331    
Consolidated Graphics*     59,937       2,484    
Copa Holdings, Cl A     72,421       3,904    
EnPro Industries*     134,010       4,192    
ESCO Technologies     94,340       3,138    
Genesee & Wyoming, Cl A*     155,525       6,748    
HUB Group, Cl A*     152,408       4,460    
Huron Consulting Group*     137,160       3,016    

 

32 TURNER FUNDS 2010 ANNUAL REPORT


Schedule of investments

Turner Emerging Growth Fund

    Shares   Value
(000)		  
Kforce*     302,990     $ 4,157    
Middleby*     28,800       1,826    
Triumph Group     111,866       8,344    
United Stationers*     63,812       3,415    
Total Industrials             68,266    
Information technology—19.6%  
Acme Packet*     93,524       3,548    
ANSYS*     172,350       7,282    
Ariba*     399,180       7,545    
Aruba Networks*     189,110       4,036    
Atheros Communications*     63,510       1,674    
Blue Coat Systems*     157,480       3,789    
Bottomline Technologies*     117,242       1,801    
Camelot Information Systems*     210,940       3,706    
Cavium Networks*     110,200       3,169    
Cirrus Logic*     254,280       4,536    
Cogo Group*     190,460       1,177    
Entropic Communications*     397,960       3,820    
Hittite Microwave*     95,140       4,534    
Kenexa*     148,200       2,596    
Manhattan Associates*     155,610       4,567    
MAXIMUS     54,510       3,357    
Netlogic Microsystems*     109,490       3,020    
Netscout Systems*     124,740       2,558    
Omnivision Technologies*     137,240       3,162    
Plexus*     96,850       2,842    
Power Integrations     79,030       2,512    
Power-One*     394,140       3,583    
Radiant Systems*     195,300       3,340    
RealD*     58,054       1,073    
Synchronoss Technologies*     149,940       2,670    
Terremark Worldwide*     132,170       1,367    
Xyratex*     121,956       1,810    
Total Information technology             89,074    
Materials—6.3%  
A Schulman     66,580       1,342    
Domtar     76,050       4,911    
Globe Specialty Metals     242,450       3,404    
Huntsman     553,627       6,400    
Solutia*     320,245       5,130    
Walter Energy     92,350       7,507    
Total Materials             28,694    

 

    Shares   Value
(000)		  
Utilities—0.3%  
Artesian Resources, Cl A     61,185     $ 1,167    
Total Utilities             1,167    
Total Common stock
(Cost $312,106)		             416,897    
Exchange traded fund—2.5%  
iShares Russell 2000 Growth
Index Fund #		     153,790       11,494    
Total Exchange traded fund
(Cost $10,606)		             11,494    
Cash equivalent—6.4%  
BlackRock TempCash Fund
Institutional Shares
0.240%** (1)		     29,120,974       29,121    
Total Cash equivalent
(Cost $29,121)		             29,121    
Total Investments—100.9%
(Cost $351,833)		           $ 457,512    

 

As of September 30, 2010, all of the Fund's investments were considered Level 1. Please see Note 2 in Notes to Financial Statements for further information regarding fair value measurements.

Percentages are based on Net Assets of $453,268.***

  *  Non-income producing security.

  **  Rate shown is the 7-day effective yield as of September 30, 2010.

  ***  This number is listed in thousands.

  #  Security fully or partially on loan at September 30, 2010. The total value of securities on loan at September 30, 2010, was $15,258.*** Certain of these securities may have been sold prior to period end and are included in receivable for investment securities sold on the Statement of Assets and Liabilities.

  (1)  The Fund lends securities in its portfolio pursuant to a securities lending agreement ("Lending Agreement") with Morgan Stanley. Unless otherwise agreed, security loans made pursuant to the Lending Agreement are required at all times to be secured by collateral equal to at least 100% of the market value of the securities loaned. Cash collateral received is invested pursuant to the terms of the Lending Agreement in the BlackRock TempCash Fund, Institutional Shares, a money market fund. All such investments are made at the risk of the Fund. As such, the Fund is liable for investment losses. The Fund receives an annual fee for its participation in the Lending Agreement based on projected lending activity. A partial position of this security was purchased with cash collateral received from securities lending. The total value of such security at September 30, 2010 was $15,714.***

ADR — American Depositary Receipt

Cl — Class

The accompanying notes are an integral part of the financial statements.

TURNER FUNDS 2010 ANNUAL REPORT 33


FINANCIAL STATEMENTS

Schedule of investments

Turner Large Cap Growth Fund

September 30, 2010

    Shares   Value
(000)		  
Common stock—99.4%†  
Consumer discretionary—15.7%  
Amazon.com*     13,030     $ 2,046    
Coach     38,950       1,673    
DIRECTV, Cl A*     40,180       1,673    
Dollar Tree*     22,195       1,082    
Guess?     35,820       1,455    
Las Vegas Sands*     67,200       2,342    
priceline.com*     3,900       1,359    
Pulte Group*     109,450       959    
Starbucks     99,830       2,554    
Starwood Hotels & Resorts
Worldwide		     44,650       2,346    
Urban Outfitters*     41,000       1,289    
Total Consumer discretionary             18,778    
Consumer staples—9.1%  
Archer-Daniels-Midland     56,880       1,816    
Mead Johnson Nutrition, Cl A     34,320       1,953    
PepsiCo     81,740       5,431    
Whole Foods Market* #     45,790       1,699    
Total Consumer staples             10,899    
Energy—11.2%  
Cimarex Energy     25,480       1,686    
Concho Resources*     20,710       1,370    
ConocoPhillips     45,600       2,619    
First Solar* #     6,310       930    
Halliburton     103,740       3,431    
National Oilwell Varco     25,520       1,135    
Occidental Petroleum     27,390       2,144    
Total Energy             13,315    
Financials—5.6%  
American Express     49,600       2,084    
Bank of Nova Scotia     20,750       1,106    
CB Richard Ellis Group, Cl A*     74,500       1,362    
Citigroup*     259,430       1,012    
IntercontinentalExchange*     10,800       1,131    
Total Financials             6,695    
Health care—9.2%  
Abbott Laboratories     48,580       2,538    
Allergan     23,920       1,591    
Celgene*     19,420       1,119    

 

    Shares   Value
(000)		  
Cerner*     13,070     $ 1,098    
Express Scripts*     24,390       1,188    
Human Genome Sciences*     30,170       899    
Intuitive Surgical*     4,150       1,177    
Universal Health Services, Cl B     34,380       1,336    
Total Health care             10,946    
Industrials—9.0%  
Caterpillar     35,020       2,756    
CSX     24,330       1,346    
Cummins     30,220       2,737    
Deere     22,770       1,589    
Delta Air Lines*     90,800       1,057    
Fastenal #     24,240       1,289    
Total Industrials             10,774    
Information technology—34.9%  
Acme Packet*     15,600       592    
Akamai Technologies*     15,790       792    
Apple*     30,780       8,734    
ASML Holding, NY Shares     54,930       1,633    
Atheros Communications*     31,590       832    
Baidu ADR*     16,440       1,687    
Broadcom, Cl A     103,210       3,653    
Cognizant Technology
Solutions, Cl A*		     40,810       2,631    
Cypress Semiconductor*     109,070       1,372    
F5 Networks*     18,670       1,938    
Lam Research*     64,120       2,684    
Micron Technology*     142,755       1,029    
Motorola*     305,600       2,607    
NetApp*     34,990       1,742    
Netlogic Microsystems*     50,920       1,404    
QUALCOMM     66,000       2,978    
Salesforce.com*     17,440       1,950    
SanDisk*     35,150       1,288    
VMware, Cl A*     25,000       2,124    
Total Information technology             41,670    
Materials—3.5%  
Cliffs Natural Resources     15,590       997    
Goldcorp     46,560       2,026    
United States Steel     27,470       1,204    
Total Materials             4,227    

 

34 TURNER FUNDS 2010 ANNUAL REPORT


Schedule of investments

Turner Large Cap Growth Fund

    Shares   Value
(000)		  
Telecommunication services—1.2%  
American Tower, Cl A*     28,670     $ 1,470    
Total Telecommunication services         1,470    
Total Common stock
(Cost $99,119)		         118,774    
Cash equivalent—4.0%  
BlackRock TempCash Fund
Institutional Shares
0.240%** (1)		     4,759,963       4,760    
Total Cash equivalent
(Cost $4,760)		         4,760    
Total Investments—103.4%
(Cost $103,879)		       $ 123,534    

 

As of September 30, 2010, all of the Fund's investments were considered Level 1. Please see Note 2 in Notes to Financial Statements for further information regarding fair value measurements.

Percentages are based on Net Assets of $119,521.***

  *  Non-income producing security.

  **  Rate shown is the 7-day effective yield as of September 30, 2010.

  ***  This number is listed in thousands.

  †  More narrow industries are utilized for compliance purposes, whereas broad sectors are utilized for reporting purposes.

  #  Security fully or partially on loan at September 30, 2010. The total value of securities on loan at September 30, 2010, was $3,911.*** Certain of these securities may have been sold prior to period end and are included in receivable for investment securities sold on the Statement of Assets and Liabilities.

  (1)  The Fund lends securities in its portfolio pursuant to a securities lending agreement ("Lending Agreement") with Morgan Stanley. Unless otherwise agreed, security loans made pursuant to the Lending Agreement are required at all times to be secured by collateral equal to at least 100% of the market value of the securities loaned. Cash collateral received is invested pursuant to the terms of the Lending Agreement in the BlackRock TempCash Fund, Institutional Shares, a money market fund. All such investments are made at the risk of the Fund. As such, the Fund is liable for investment losses. The Fund receives an annual fee for its participation in the Lending Agreement based on projected lending activity. A partial position of this security was purchased with cash collateral received from securities lending. The total value of such security at September 30, 2010 was $4,028.***

ADR — American Depositary Receipt

Cl — Class

NY — New York

The accompanying notes are an integral part of the financial statements.

TURNER FUNDS 2010 ANNUAL REPORT 35



FINANCIAL STATEMENTS

Schedule of investments

Turner Midcap Growth Fund

September 30, 2010

    Shares   Value
(000)		  
Common stock—99.3%†  
Consumer discretionary—18.6%  
Abercrombie & Fitch, Cl A     331,830     $ 13,048    
BorgWarner*     228,810       12,040    
Coach     345,020       14,822    
Dick's Sporting Goods*     216,090       6,059    
Dollar Tree*     226,824       11,060    
Focus Media Holding ADR*     527,087       12,808    
Guess?     339,872       13,809    
Interpublic Group of Cos.*     1,107,880       11,112    
Nordstrom     375,570       13,971    
PF Chang's China Bistro     129,960       6,004    
Starwood Hotels & Resorts
Worldwide		     393,830       20,696    
Urban Outfitters*     376,064       11,824    
WMS Industries*     290,655       11,065    
Wynn Resorts #     153,185       13,292    
Total Consumer discretionary             171,610    
Consumer staples—5.4%  
Green Mountain Coffee
Roasters* #		     290,830       9,071    
Hansen Natural*     118,502       5,525    
Hershey     187,170       8,907    
Mead Johnson Nutrition, Cl A     247,920       14,109    
Whole Foods Market* #     313,450       11,632    
Total Consumer staples             49,244    
Energy—6.4%  
Alpha Natural Resources*     213,840       8,800    
Cameron International*     183,740       7,894    
Cimarex Energy     156,550       10,360    
Concho Resources*     182,640       12,085    
First Solar* #     41,720       6,147    
QEP Resources     174,736       5,267    
Whiting Petroleum*     84,420       8,063    
Total Energy             58,616    
Financials—8.1%  
CB Richard Ellis Group, Cl A*     642,800       11,750    
Digital Realty Trust #     209,490       12,926    
Discover Financial Services     398,530       6,648    
IntercontinentalExchange*     142,020       14,872    
Invesco     218,190       4,632    

 

    Shares   Value
(000)		  
MSCI, Cl A*     246,740     $ 8,194    
T. Rowe Price Group     305,649       15,302    
Total Financials             74,324    
Health care—12.6%  
Alexion Pharmaceuticals*     246,057       15,836    
AMERIGROUP*     116,825       4,962    
AmerisourceBergen, Cl A     447,268       13,713    
DaVita*     75,469       5,210    
Emergency Medical Services, Cl A*     16,540       881    
Henry Schein*     135,004       7,908    
Hospira*     162,920       9,288    
Human Genome Sciences*     271,790       8,097    
Intuitive Surgical*     45,702       12,967    
Onyx Pharmaceuticals*     174,686       4,608    
United Therapeutics*     230,696       12,922    
Universal Health Services, Cl B     310,340       12,060    
Valeant Pharmaceuticals
International* #		     317,770       7,960    
Total Health care             116,412    
Industrials—10.6%  
Canadian Pacific Railway     152,680       9,303    
Continental Airlines, Cl B*     554,672       13,778    
Cummins     237,600       21,522    
Fastenal #     242,780       12,913    
Goodrich     218,628       16,119    
Joy Global     239,942       16,873    
Parker Hannifin     105,470       7,389    
Total Industrials             97,897    
Information technology—27.0%  
Acme Packet*     195,070       7,401    
Akamai Technologies*     180,950       9,080    
Aruba Networks*     438,050       9,348    
ASML Holding, NY Shares     437,580       13,009    
Atheros Communications*     260,128       6,855    
Broadcom, Cl A     310,931       11,004    
Citrix Systems*     172,450       11,768    
Cypress Semiconductor*     904,630       11,380    
F5 Networks*     249,464       25,897    
Fidelity National Information
Services		     326,910       8,869    
GSI Commerce*     384,645       9,501    
Lam Research*     389,035       16,281    

 

36 TURNER FUNDS 2010 ANNUAL REPORT


Schedule of investments

Turner Midcap Growth Fund

    Shares   Value
(000)		  
LogMeIn*     168,410     $ 6,059    
MercadoLibre* #     77,480       5,592    
Micron Technology*     1,245,890       8,983    
NetApp*     328,490       16,356    
Netlogic Microsystems* #     434,820       11,992    
Salesforce.com*     155,180       17,349    
SanDisk*     304,860       11,173    
SuccessFactors*     311,880       7,831    
Varian Semiconductor
Equipment Associates*		     517,961       14,907    
VeriSign*     240,890       7,646    
Total Information technology             248,281    
Materials—7.7%  
CF Industries Holdings     103,390       9,873    
Cliffs Natural Resources     151,385       9,677    
Ecolab     217,617       11,042    
Silver Wheaton*     258,880       6,899    
United States Steel #     248,360       10,888    
Valspar     280,275       8,927    
Walter Energy     168,935       13,733    
Total Materials             71,039    
Telecommunication services—2.1%  
Crown Castle International*     443,830       19,595    
Total Telecommunication services             19,595    
Utilities—0.8%  
Questar     395,536       6,934    
Total Utilities             6,934    
Total Common stock
(Cost $652,648)		             913,952    
Cash equivalent—9.2%  
BlackRock TempCash Fund
Institutional Shares
0.240%** (1)		     84,571,080       84,571    
Total Cash equivalent
(Cost $84,571)		             84,571    
Total Investments—108.5%
(Cost $737,219)		           $ 998,523    

 

As of September 30, 2010, all of the Fund's investments were considered Level 1. Please see Note 2 in Notes to Financial Statements for further information regarding fair value measurements.

Percentages are based on Net Assets of $920,695.***

  *  Non-income producing security.

  **  Rate shown is the 7-day effective yield as of September 30, 2010.

  ***  This number is listed in thousands.

  †  More narrow industries are utilized for compliance purposes, whereas broad sectors are utilized for reporting purposes.

  #  Security fully or partially on loan at September 30, 2010. The total value of securities on loan at September 30, 2010, was $81,995.*** Certain of these securities may have been sold prior to period end and are included in receivable for investment securities sold on the Statement of Assets and Liabilities.

  (1)  The Fund lends securities in its portfolio pursuant to a securities lending agreement ("Lending Agreement") with Morgan Stanley. Unless otherwise agreed, security loans made pursuant to the Lending Agreement are required at all times to be secured by collateral equal to at least 100% of the market value of the securities loaned. Cash collateral received is invested pursuant to the terms of the Lending Agreement in the BlackRock TempCash Fund, Institutional Shares, a money market fund. All such investments are made at the risk of the Fund. As such, the Fund is liable for investment losses. The Fund receives an annual fee for its participation in the Lending Agreement based on projected lending activity. This security was purchased with cash collateral received from securities lending. The total value of such security at September 30, 2010 was $84,571.***

ADR — American Depositary Receipt

Cl — Class

NY — New York

The accompanying notes are an integral part of the financial statements.

TURNER FUNDS 2010 ANNUAL REPORT 37


FINANCIAL STATEMENTS

Schedule of investments

Turner New Enterprise Fund

September 30, 2010

    Shares   Value
(000)		  
Common stock—97.4%†  
Consumer discretionary—12.4%  
Guess?     21,680     $ 881    
Las Vegas Sands*     20,200       704    
Tenneco*     21,370       619    
WMS Industries*     17,830       679    
Total Consumer discretionary             2,883    
Consumer staples—6.2%  
Green Mountain Coffee
Roasters* #		     29,440       918    
Whole Foods Market* #     13,980       519    
Total Consumer staples             1,437    
Energy—7.9%  
Cimarex Energy     12,880       853    
Concho Resources*     14,950       989    
Total Energy             1,842    
Financials—11.0%  
CB Richard Ellis Group, Cl A*     40,522       741    
Citigroup*     131,050       511    
National Financial Partners*     60,940       772    
Prudential Financial     9,710       526    
Total Financials             2,550    
Health care—8.1%  
Alexion Pharmaceuticals*     15,690       1,010    
Edwards Lifesciences*     13,100       878    
Total Health care             1,888    
Information technology—45.4%  
Apple*     3,990       1,132    
Aruba Networks*     43,500       928    
ASML Holding, NY Shares     27,610       821    
Atheros Communications*     19,350       510    
Broadcom, Cl A     20,330       719    
Cypress Semiconductor*     60,430       760    
Entropic Communications*     30,000       288    
F5 Networks*     13,740       1,426    
Lam Research*     15,390       644    
Micron Technology*     92,300       666    
Motorola*     108,830       929    

 

    Shares/
Contracts		   Value
(000)		  
Netlogic Microsystems* #     36,920     $ 1,018    
Varian Semiconductor
Equipment Associates*		     24,560       707    
Total Information technology             10,548    
Materials—6.4%  
United States Steel     15,020       659    
Walter Energy     10,140       824    
Total Materials             1,483    
Total Common stock
(Cost $15,940)		             22,631    
Put option contract*—0.3%  
iShares Russell 2000 Index Fund,
11/10 at $65		     375       76    
Total Put option contract
(Cost $85)		             76    
Cash equivalent—8.4%  
BlackRock TempCash Fund
Institutional Shares
0.240%** (1)		     1,943,073       1,943    
Total Cash equivalent
(Cost $1,943)		             1,943    
Total Investments—106.1%
(Cost $17,968)		           $ 24,650    

 

As of September 30, 2010, all of the Fund's investments were considered Level 1. Please see Note 2 in Notes to Financial Statements for further information regarding fair value measurements.

Percentages are based on Net Assets of $23,227.***

  *  Non-income producing security.

  **  Rate shown is the 7-day effective yield as of September 30, 2010.

  ***  This number is listed in thousands.

  †  More narrow industries are utilized for compliance purposes, whereas broad sectors are utilized for reporting purposes.

  #  Security fully or partially on loan at September 30, 2010. The total value of securities on loan at September 30, 2010, was $1,273.*** Certain of these securities may have been sold prior to period end and are included in receivable for investment securities sold on the Statement of Assets and Liabilities.

38 TURNER FUNDS 2010 ANNUAL REPORT


Schedule of investments

Turner New Enterprise Fund

  (1)  The Fund lends securities in its portfolio pursuant to a securities lending agreement ("Lending Agreement") with Morgan Stanley. Unless otherwise agreed, security loans made pursuant to the Lending Agreement are required at all times to be secured by collateral equal to at least 100% of the market value of the securities loaned. Cash collateral received is invested pursuant to the terms of the Lending Agreement in the BlackRock TempCash Fund, Institutional Shares, a money market fund. All such investments are made at the risk of the Fund. As such, the Fund is liable for investment losses. The Fund receives an annual fee for its participation in the Lending Agreement based on projected lending activity. A partial position of this security was purchased with cash collateral received from securities lending. The total value of such security at September 30, 2010 was $1,316.***

Cl — Class

NY — New York

The accompanying notes are an integral part of the financial statements.

TURNER FUNDS 2010 ANNUAL REPORT 39


FINANCIAL STATEMENTS

Schedule of investments

Turner Small Cap Growth Fund

September 30, 2010

    Shares   Value
(000)		  
Common stock—99.0%†  
Consumer discretionary—16.9%  
7 Days Group Holdings ADR*     58,340     $ 1,050    
Brunswick     100,580       1,531    
Buffalo Wild Wings* #     50,780       2,432    
Capella Education*     38,370       2,978    
CROCS*     259,760       3,379    
DineEquity* #     77,680       3,494    
Finish Line, Cl A     189,800       2,640    
Gaylord Entertainment* #     70,828       2,160    
hhgregg* #     71,980       1,782    
Orient-Express Hotels, Cl A* #     256,520       2,860    
Saks* #     353,320       3,039    
Sotheby's     64,411       2,372    
Tempur-Pedic International*     83,870       2,600    
Texas Roadhouse, Cl A*     241,640       3,397    
True Religion Apparel* #     119,010       2,540    
Ulta Salon Cosmetics & Fragrance*     86,157       2,516    
Warnaco Group*     77,410       3,958    
WMS Industries*     42,700       1,626    
Total Consumer discretionary             46,354    
Consumer staples—2.1%  
Central European Distribution*     28,430       634    
Diamond Foods     40,170       1,647    
United Natural Foods*     105,193       3,486    
Total Consumer staples             5,767    
Energy—4.2%  
James River Coal* #     121,460       2,129    
Key Energy Services*     270,977       2,577    
Oasis Petroleum*     166,510       3,225    
Resolute Energy* #     70,620       781    
Rex Energy*     71,838       920    
Swift Energy*     69,230       1,944    
Total Energy             11,576    
Financials—4.2%  
Bank of the Ozarks     53,780       1,995    
DuPont Fabros Technology     53,370       1,342    
Green Dot, Cl A*     40,230       1,951    
National Financial Partners*     167,110       2,117    
Sunstone Hotel Investors*     142,670       1,294    
Tanger Factory Outlet Centers     58,380       2,752    
Total Financials             11,451    

 

    Shares   Value
(000)		  
Health care—18.7%  
Acorda Therapeutics*     42,900     $ 1,417    
Align Technology*     54,155       1,060    
AMERIGROUP*     93,567       3,974    
Cepheid*     61,780       1,156    
Cooper     65,650       3,034    
Emergency Medical Services, Cl A*     68,596       3,653    
Healthsouth*     161,510       3,101    
Hill-Rom Holdings     62,540       2,245    
HMS Holdings*     32,800       1,933    
ICON ADR*     96,730       2,091    
Impax Laboratories*     64,020       1,265    
Incyte*     70,500       1,127    
Medicis Pharmaceutical, Cl A     55,890       1,657    
Onyx Pharmaceuticals*     50,870       1,342    
Parexel International*     105,920       2,450    
Pharmasset*     38,210       1,127    
PSS World Medical*     82,110       1,756    
Psychiatric Solutions*     65,060       2,183    
Quality Systems #     46,020       3,052    
Regeneron Pharmaceuticals*     24,950       684    
Salix Pharmaceuticals*     74,460       2,958    
Seattle Genetics*     78,650       1,221    
SXC Health Solutions*     55,700       2,031    
Tenet Healthcare*     588,170       2,776    
Thoratec*     22,960       849    
Volcano*     53,940       1,401    
Total Health care             51,543    
Industrials—18.6%  
Actuant, Cl A     133,370       3,062    
Alaska Air Group*     49,440       2,523    
ArvinMeritor*     227,336       3,533    
Baldor Electric     61,510       2,485    
Clean Harbors*     34,330       2,326    
Copa Holdings, Cl A     32,460       1,750    
EnerNOC*     47,450       1,490    
EnPro Industries*     66,160       2,069    
GATX     45,980       1,348    
Genesee & Wyoming, Cl A*     91,270       3,960    
GrafTech International*     170,740       2,669    
Hexcel*     149,970       2,668    
HUB Group, Cl A*     90,960       2,662    
Kforce*     170,940       2,345    
Knight Transportation     79,450       1,536    

 

40 TURNER FUNDS 2010 ANNUAL REPORT


Schedule of investments

Turner Small Cap Growth Fund

    Shares   Value
(000)		  
Polypore International*     60,847     $ 1,835    
Triumph Group     27,120       2,023    
TrueBlue*     157,772       2,154    
Watsco     44,450       2,475    
WESCO International*     83,230       3,270    
Woodward Governor     91,841       2,977    
Total Industrials             51,160    
Information technology—26.8%  
Acme Packet*     80,340       3,048    
ADTRAN     95,050       3,355    
Applied Micro Circuits*     84,770       848    
Ariba*     146,250       2,764    
Aruba Networks*     239,976       5,121    
Atheros Communications*     66,720       1,758    
BroadSoft*     96,150       832    
Cavium Networks* #     106,960       3,076    
Cirrus Logic*     106,220       1,895    
Concur Technologies*     47,940       2,370    
Entropic Communications*     245,370       2,356    
Finisar* #     157,520       2,960    
GSI Commerce*     109,900       2,715    
Isilon Systems*     76,570       1,706    
Jack Henry & Associates     132,984       3,391    
Netlogic Microsystems* #     146,810       4,049    
Omnivision Technologies*     131,780       3,036    
Rackspace Hosting* #     119,680       3,109    
Riverbed Technology*     85,320       3,889    
Sapient     164,170       1,965    
Semtech*     75,340       1,521    
SuccessFactors* #     118,070       2,965    
Taleo, Cl A*     119,720       3,471    
Teradyne*     318,030       3,543    
TIBCO Software*     91,870       1,630    
Ultratech*     61,660       1,054    
Veeco Instruments* #     69,860       2,436    
VeriFone Systems*     94,385       2,933    
Total Information technology             73,796    
Materials—5.7%  
Allied Nevada Gold*     59,060       1,565    
Georgia Gulf* #     103,440       1,690    
Rock-Tenn, Cl A     46,951       2,339    
Schweitzer-Mauduit International     27,097       1,580    
Solutia*     206,050       3,301    

 

    Shares   Value
(000)		  
Stillwater Mining*     148,580     $ 2,502    
Temple-Inland     45,520       849    
Thompson Creek Metals* #     180,880       1,950    
Total Materials             15,776    
Telecommunication services—1.8%  
Syniverse Holdings*     117,220       2,657    
City Telecom (HK) ADR     8,315       105    
tw telecom, Cl A*     112,940       2,097    
Total Telecommunication services             4,859    
Total Common stock
(Cost $207,282)		             272,282    
Cash equivalent—15.4%  
BlackRock TempCash Fund
Institutional Shares
0.240%** (1)		     42,270,038       42,270    
Total Cash equivalent
(Cost $42,270)		             42,270    
Total Investments—114.4%
(Cost $249,552)		           $ 314,552    

 

As of September 30, 2010, all of the Fund's investments were considered Level 1. Please see Note 2 in Notes to Financial Statements for further information regarding fair value measurements.

Percentages are based on Net Assets of $274,925.***

  *  Non-income producing security.

  **  Rate shown is the 7-day effective yield as of September 30, 2010.

  ***  This number is listed in thousands.

  †  More narrow industries are utilized for compliance purposes, whereas broad sectors are utilized for reporting purposes.

  #  Security fully or partially on loan at September 30, 2010. The total value of securities on loan at September 30, 2010, was $36,548.*** Certain of these securities may have been sold prior to period end and are included in receivable for investment securities sold on the Statement of Assets and Liabilities.

TURNER FUNDS 2010 ANNUAL REPORT 41


FINANCIAL STATEMENTS

Schedule of investments

Turner Small Cap Growth Fund

  (1)  The Fund lends securities in its portfolio pursuant to a securities lending agreement ("Lending Agreement") with Morgan Stanley. Unless otherwise agreed, security loans made pursuant to the Lending Agreement are required at all times to be secured by collateral equal to at least 100% of the market value of the securities loaned. Cash collateral received is invested pursuant to the terms of the Lending Agreement in the BlackRock TempCash Fund, Institutional Shares, a money market fund. All such investments are made at the risk of the Fund. As such, the Fund is liable for investment losses. The Fund receives an annual fee for its participation in the Lending Agreement based on projected lending activity. A partial position of this security was purchased with cash collateral received from securities lending. The total value of such security at September 30, 2010 was $37,726.***

ADR — American Depositary Receipt

Cl — Class

HK — Hong Kong

The accompanying notes are an integral part of the financial statements.

42 TURNER FUNDS 2010 ANNUAL REPORT


Schedule of investments

Turner Quantitative Broad Market Equity Fund

September 30, 2010

    Shares   Value
(000)		  
Common stock—98.4%  
Consumer discretionary—12.0%  
Amazon.com*     450     $ 71    
CBS, Cl B     4,170       66    
Comcast, Cl A     4,560       82    
DIRECTV, Cl A*     2,670       111    
Guess?     2,140       87    
Harley-Davidson     2,670       76    
Interpublic Group of Cos.*     7,950       80    
J.C. Penney     2,810       76    
McDonald's     1,080       80    
Starbucks     3,880       99    
Target     1,800       96    
Tenneco*     3,650       106    
Time Warner     2,990       92    
TJX     2,570       115    
WMS Industries*     2,230       85    
Total Consumer discretionary             1,322    
Consumer staples—10.1%  
Altria Group     2,970       72    
Brown-Forman, Cl B     1,810       112    
Coca-Cola     1,830       107    
CVS Caremark     3,820       120    
Dr. Pepper Snapple Group     2,480       88    
Lorillard     800       64    
PepsiCo     1,596       106    
Philip Morris International     2,130       119    
Procter & Gamble     2,590       155    
Wal-Mart Stores     3,192       171    
Total Consumer staples             1,114    
Energy—10.3%  
Apache     820       80    
Chevron     1,530       124    
ConocoPhillips     2,240       129    
Devon Energy     1,040       67    
EQT     2,800       101    
Exxon Mobil     1,940       120    
First Solar*     790       116    
Spectra Energy     4,150       94    
Transocean*     1,610       104    
Whiting Petroleum*     800       76    
Williams     6,280       120    
Total Energy             1,131    

 

    Shares   Value
(000)		  
Financials—16.0%  
American Express     2,660     $ 112    
Berkshire Hathaway, Cl B*     1,250       103    
BlackRock, Cl A     450       77    
Capital One Financial     1,320       52    
Chubb     1,940       111    
Citigroup*     31,920       124    
Discover Financial Services     4,150       69    
Goldman Sachs Group     550       80    
JPMorgan Chase     3,906       149    
Lincoln National     3,400       81    
MetLife     2,430       94    
MSCI, Cl A*     2,530       84    
NASDAQ OMX Group*     3,750       73    
Progressive     5,190       108    
Raymond James Financial     3,570       90    
SunTrust Banks     3,850       100    
Travelers     2,130       111    
US Bancorp     2,330       50    
Wells Fargo     3,320       83    
Total Financials             1,751    
Health care—11.9%  
Abbott Laboratories     1,660       87    
AMERIGROUP*     2,130       91    
Bristol-Myers Squibb     5,880       159    
Cerner*     1,030       87    
CIGNA     3,020       108    
Express Scripts*     1,790       87    
Healthsouth*     3,610       69    
Intuitive Surgical*     310       88    
Johnson & Johnson     2,531       157    
McKesson     1,770       109    
Pfizer     9,410       161    
WellPoint*     1,790       102    
Total Health care             1,305    
Industrials—9.3%  
3M     740       64    
Boeing     1,030       69    
Caterpillar     1,730       136    
Deere     1,550       108    
General Electric     5,977       97    
Honeywell International     1,680       74    
Norfolk Southern     1,930       115    

 

TURNER FUNDS 2010 ANNUAL REPORT 43


FINANCIAL STATEMENTS

Schedule of investments

Turner Quantitative Broad Market Equity Fund

    Shares   Value
(000)		  
Oshkosh*     2,400     $ 66    
Parker Hannifin     1,340       94    
Union Pacific     1,520       124    
United Parcel Service, Cl B     1,030       69    
Total Industrials             1,016    
Information technology—17.6%  
Amkor Technology*     14,060       93    
Analog Devices     2,450       77    
Apple*     900       255    
ASML Holding, NY Shares     2,700       80    
Automatic Data Processing     2,570       108    
Broadcom, Cl A     1,980       70    
Cisco Systems*     5,977       131    
Cree*     1,290       70    
Dell*     7,900       103    
Google, Cl A*     259       136    
Hewlett-Packard     2,620       110    
Intel     5,200       100    
International Business Machines     820       110    
Juniper Networks*     3,790       115    
Microsoft     7,367       180    
Nuance Communications*     4,010       63    
Salesforce.com*     590       66    
SanDisk*     1,630       60    
Total Information technology             1,927    
Materials—5.6%  
Air Products & Chemicals     850       70    
Ball     2,020       119    
Celanese, Ser A     2,270       73    
Eastman Chemical     1,080       80    
Freeport-McMoRan Copper & Gold     1,440       123    
Greif, Cl A     1,280       75    
Monsanto     1,540       74    
Total Materials             614    
Telecommunication services—3.0%  
AT&T     4,990       143    
MetroPCS Communications*     9,400       98    
Verizon Communications     2,770       90    
Total Telecommunication services             331    

 

    Shares   Value
(000)		  
Utilities—2.6%  
American Electric Power     2,380     $ 86    
Duke Energy     5,190       92    
PG&E     2,400       109    
Total Utilities             287    
Total Common stock
(Cost $10,587)		             10,798    
Cash equivalent—0.2%  
BlackRock TempCash Fund
Institutional Shares
0.240%**		     24,643       25    
Total Cash equivalent
(Cost $25)		             25    
Total Investments—98.6%
(Cost $10,612)		           $ 10,823    

 

As of September 30, 2010, all of the Fund's investments were considered Level 1. Please see Note 2 in Notes to Financial Statements for further information regarding fair value measurements.

Percentages are based on Net Assets of $10,972.***

  *  Non-income producing security.

  **  Rate shown is the 7-day effective yield as of September 30, 2010.

  ***  This number is listed in thousands.

Cl — Class

NY — New York

Ser — Series

The accompanying notes are an integral part of the financial statements.

44 TURNER FUNDS 2010 ANNUAL REPORT


Schedule of investments

Turner Quantitative Large Cap Value Fund

September 30, 2010

    Shares   Value
(000)		  
Common stock—98.6%†  
Consumer discretionary—7.5%  
AutoZone*     50     $ 12    
DIRECTV, Cl A*     270       11    
Dollar Tree*     150       7    
Home Depot     170       5    
Johnson Controls     180       5    
Mattel     180       4    
Stanley Black & Decker     90       6    
Time Warner     160       5    
Viacom, Cl B     190       7    
Total Consumer discretionary             62    
Consumer staples—10.3%  
Archer-Daniels-Midland     180       6    
Avon Products     300       10    
Clorox     80       5    
Coca-Cola     100       6    
Energizer Holdings*     120       8    
Hansen Natural*     160       7    
Lorillard     120       9    
PepsiCo     140       9    
Philip Morris International     140       8    
Procter & Gamble     150       9    
Wal-Mart Stores     140       8    
Total Consumer staples             85    
Energy—12.2%  
Apache     60       6    
Chevron     180       14    
ConocoPhillips     180       10    
Devon Energy     80       5    
Exxon Mobil     512       32    
Hess     220       13    
Occidental Petroleum     100       8    
Spectra Energy     360       8    
Williams     240       5    
Total Energy             101    
Financials—25.1%  
Aflac     180       9    
Allstate     310       10    
AMB Property     310       8    
American Express     180       8    
AON     190       8    

 

    Shares   Value
(000)		  
Berkshire Hathaway, Cl B*     260     $ 21    
CNA Financial*     310       9    
Digital Realty Trust     160       10    
Goldman Sachs Group     30       4    
JPMorgan Chase     550       21    
Lincoln National     380       9    
Mastercard, Cl A     50       11    
MetLife     210       8    
NASDAQ OMX Group*     370       7    
NYSE Euronext     280       8    
People's United Financial     640       8    
Principal Financial Group     410       11    
Prudential Financial     80       4    
Travelers     100       5    
Unum Group     490       11    
US Bancorp     360       8    
Visa, Cl A     130       10    
Total Financials             208    
Health care—13.4%  
Boston Scientific*     1,630       10    
Express Scripts*     220       11    
Henry Schein*     170       10    
Hospira*     200       11    
Johnson & Johnson     230       14    
Laboratory Corp. of America
Holdings*		     110       8    
Life Technologies*     180       8    
Medco Health Solutions*     230       12    
Mylan*     180       3    
PerkinElmer     280       7    
Thermo Fisher Scientific*     160       8    
UnitedHealth Group     240       9    
Total Health care             111    
Industrials—8.0%  
Boeing     130       9    
Caterpillar     120       9    
General Electric     1,140       19    
Honeywell International     160       7    
Norfolk Southern     140       8    
Northrop Grumman     140       8    
Union Pacific     70       6    
Total Industrials             66    

 

TURNER FUNDS 2010 ANNUAL REPORT 45


FINANCIAL STATEMENTS

Schedule of investments

Turner Quantitative Large Cap Value Fund

    Shares   Value
(000)		  
Information technology—4.9%  
Altera     230     $ 7    
Fidelity National
Information Services		     210       6    
Fiserv*     160       8    
Intel     320       6    
Microsoft     350       9    
National Semiconductor     370       5    
Total Information technology             41    
Materials—3.3%  
Air Products & Chemicals     60       5    
Dow Chemical     250       7    
Eastman Chemical     150       11    
EI du Pont de Nemours     110       5    
Total Materials             28    
Telecommunication services—5.5%  
AT&T     980       28    
Verizon Communications     550       18    
Total Telecommunication services             46    
Utilities—8.4%  
AES*     860       10    
American Electric Power     240       9    
CMS Energy     590       11    
Constellation Energy Group     330       11    
Exelon     120       5    
Pepco Holdings     440       8    
Pinnacle West Capital     220       9    
Sempra Energy     140       7    
Total Utilities             70    
Total Common stock
(Cost $751)		             818    
Cash equivalent—1.3%  
BlackRock TempCash Fund
Institutional Shares
0.240%**		     10,636       11    
Total Cash equivalent
(Cost $11)		             11    
Total Investments—99.9%
(Cost $762)		           $ 829    

 

As of September 30, 2010, all of the Fund's investments were considered Level 1. Please see Note 2 in Notes to Financial Statements for further information regarding fair value measurements.

Percentages are based on Net Assets of $830.***

  *  Non-income producing security.

  **  Rate shown is the 7-day effective yield as of September 30, 2010.

  ***  This number is listed in thousands.

  †  More narrow industries are utilized for compliance purposes, whereas broad sectors are utilized for reporting purposes.

Cl — Class

The accompanying notes are an integral part of the financial statements.

46 TURNER FUNDS 2010 ANNUAL REPORT



Schedule of investments

Turner Global Opportunities Fund

September 30, 2010

    Shares   Value
(000)		  
Common stock—98.5%†  
Consumer discretionary—8.6%  
Inditex     315     $ 25    
Intercontinental Hotels Group     1,608       29    
LVMH Moet Hennessy Louis Vuitton     307       45    
Total Consumer discretionary           99    
Consumer staples—13.8%  
Diageo     2,150       37    
FamilyMart     900       32    
Hypermarcas*     2,111       32    
Natura Cosmeticos     1,360       37    
Whole Foods Market*     570       21    
Total Consumer staples           159    
Energy—7.2%  
Cairn Energy*     2,130       15    
Cimarex Energy     520       34    
Niko Resources     340       34    
Total Energy           83    
Financials—10.3%  
HDFC Bank ADR     180       33    
IntercontinentalExchange*     200       21    
Julius Baer Group     819       30    
Sun Hung Kai Properties     2,000       34    
Total Financials           118    
Health care—7.1%  
Alexion Pharmaceuticals*     880       57    
Intuitive Surgical*     90       26    
Total Health care           83    
Industrials—3.5%  
Cummins     450       41    
Total Industrials           41    
Information technology—35.3%  
Apple*     240       68    
ASML Holding, NY Shares     1,770       53    
Baidu ADR*     430       44    
Broadcom, Cl A     980       35    
F5 Networks*     650       67    
Lam Research*     1,200       50    
Micron Technology*     4,220       30    

 

    Shares   Value
(000)		  
Motorola*     3,970     $ 34    
Salesforce.com*     210       23    
Total Information technology           404    
Materials—12.7%  
Silver Wheaton*     1,060       28    
United States Steel     1,040       46    
Walter Energy     590       48    
Yara International     570       26    
Total Materials           148    
Total Common stock
(Cost $980)		           1,135    
Exchange traded fund—2.0%  
iShares MSCI Emerging
Markets Index Fund		     500       23    
Total Exchange traded fund
(Cost $19)		           23    
Cash equivalent—0.0%  
BlackRock TempCash Fund
Institutional Shares
0.240%**		     422       —    
Total Cash equivalent
(Cost $—)		           —    
Total Investments—100.5%
(Cost $999)		         $ 1,158    

 

As of September 30, 2010, all of the Fund's investments were considered Level 1. Please see Note 2 in Notes to Financial Statements for further information regarding fair value measurements.

Percentages are based on Net Assets of $1,153.***

  *  Non-income producing security.

  **  Rate shown is the 7-day effective yield as of September 30, 2010.

  ***  This number is listed in thousands.

  †  More narrow industries are utilized for compliance purposes, whereas broad sectors are utilized for reporting purposes.

ADR — American Depositary Receipt

Cl — Class

NY — New York

Amounts designated as "—" are rounded to $0.

The accompanying notes are an integral part of the financial statements.

TURNER FUNDS 2010 ANNUAL REPORT 47


FINANCIAL STATEMENTS

Schedule of investments

Turner Global Opportunities Fund

Country Allocation as of 9/30/10†  
United States     53.8 %  
United Kingdom     7.0    
Brazil     6.0    
Canada     5.3    
Netherlands     4.5    
France     3.9    
Cayman Islands     3.8    
Hong Kong     3.0    
India     2.9    
Japan     2.8    
Switzerland     2.6    
Norway     2.2    
Spain     2.2    
Total     100.0 %  

 

  †  Percentages are based on total investments.

48 TURNER FUNDS 2010 ANNUAL REPORT


Schedule of investments

Turner International Core Growth Fund

September 30, 2010

    Shares   Value
(000)		  
Common stock—95.8%  
Consumer discretionary—10.9%  
Focus Media Holding ADR*     4,140     $ 100    
Intercontinental Hotels Group     5,190       93    
LVMH Moet Hennessy
Louis Vuitton		     695       102    
Magna International, Cl A     799       65    
Parkson Retail Group     44,092       77    
Sony     2,170       67    
Yamada Denki     900       56    
Total Consumer discretionary           560    
Consumer staples—14.5%  
Anheuser-Busch InBev     1,720       101    
British American Tobacco     2,690       100    
Danone     1,390       83    
Diageo     3,100       54    
FamilyMart     1,900       68    
Hengan International Group     2,500       25    
Hypermarcas*     3,790       58    
Natura Cosmeticos     1,800       49    
Nestle     3,882       207    
Total Consumer staples           745    
Energy—5.6%  
Cairn Energy*     5,900       42    
CNOOC     44,420       86    
Niko Resources     670       66    
OGX Petroleo e Gas Participacoes*     7,231       94    
Total Energy           288    
Financials—12.2%  
Banco Compartamos     10,239       65    
Bank of Nova Scotia     1,282       68    
Barclays     14,300       67    
BNP Paribas     1,130       80    
BR Malls Participacoes     4,590       38    
HDFC Bank ADR     410       76    
Julius Baer Group     2,262       82    
Standard Chartered     2,779       80    
Westpac Banking     3,100       70    
Total Financials           626    

 

    Shares   Value
(000)		  
Health care—8.4%  
Genomma Lab Internacional, Cl B*     10,110     $ 19    
GlaxoSmithKline     2,740       54    
Kalbe Farma     160,500       46    
Novartis     2,190       126    
Novo Nordisk, Cl B     660       65    
Shire     2,170       49    
SXC Health Solutions*     705       26    
Valeant Pharmaceuticals
International*		     1,818       46    
Total Health care           431    
Industrials—12.9%  
Canadian National Railway     1,518       97    
CNH Global     1,110       41    
CSR, Cl H     56,900       54    
JS Group     2,500       49    
Komatsu     4,560       106    
Siemens     880       93    
United Tractors     24,270       55    
Volvo, Cl B     6,610       97    
Wolseley     2,746       69    
Total Industrials           661    
Information technology—9.7%  
ARM Holdings     3,920       24    
ASML Holding     3,620       108    
Baidu ADR*     640       66    
Fujitsu     11,000       77    
Infosys Technologies ADR     850       57    
Omron     3,700       84    
Totvs     350       27    
ZTE, Cl H     13,200       53    
Total Information technology           496    
Materials—17.6%  
Agrium     972       73    
Air Liquide     759       92    
BHP Billiton     2,880       108    
China Molybdenum, Cl H     68,000       49    
China Resources Cement Holdings*     98,000       58    
Givaudan     80       82    
Goldcorp     1,720       75    
Rexam     15,020       72    
Rhodia     3,077       74    

 

TURNER FUNDS 2010 ANNUAL REPORT 49


FINANCIAL STATEMENTS

Schedule of investments

Turner International Core Growth Fund

    Shares   Value
(000)		  
Rio Tinto     1,880     $ 110    
Silver Wheaton*     1,930       51    
Teck Resources, Cl B     1,354       56    
Total Materials           900    
Telecommunication services—1.4%  
America Movil, Ser L     26,730       71    
Total Telecommunication services           71    
Utilities—2.6%  
Tokyo Gas     14,300       65    
Tractebel Energia     4,690       70    
Total Utilities           135    
Total Common stock
(Cost $4,093)		           4,913    
Cash equivalent—3.1%  
BlackRock TempCash Fund
Institutional Shares
0.240%**		     156,516       157    
Total Cash equivalent
(Cost $157)		           157    
Total Investments—98.9%
(Cost $4,250)		         $ 5,070    

 

As of September 30, 2010, all of the Fund's investments were considered Level 1. Please see Note 2 in Notes to Financial Statements for further information regarding fair value measurements.

Percentages are based on Net Assets of $5,129.***

  *  Non-income producing security.

  **  Rate shown is the 7-day effective yield as of September 30, 2010.

  ***  This number is listed in thousands.

ADR — American Depositary Receipt

Cl — Class

Ser — Series

The accompanying notes are an integral part of the financial statements.

Country Allocation as of 9/30/10†  
United Kingdom     15.1 %  
Canada     12.3    
Japan     11.3    
Switzerland     9.8    
France     8.5    
Brazil     6.6    
Cayman Islands     4.8    
Australia     3.5    
Hong Kong     3.3    
China     3.1    
Mexico     3.1    
United States     3.1    
Netherlands     2.9    
India     2.6    
Belgium     2.0    
Indonesia     2.0    
Sweden     1.9    
Germany     1.8    
Denmark     1.3    
Jersey     1.0    
Total     100.0 %  

 

  †  Percentages are based on total investments.

50 TURNER FUNDS 2010 ANNUAL REPORT


Schedule of investments

Turner Small Cap Equity Fund

September 30, 2010

    Shares   Value
(000)		  
Common stock—99.5%  
Consumer discretionary—13.7%  
99 Cents Only Stores*     6,560     $ 124    
Cooper Tire & Rubber     3,090       61    
Dress Barn*     1,290       31    
Jakks Pacific*     6,230       110    
Men's Wearhouse     2,380       56    
Movado Group*     6,100       66    
Oxford Industries     1,960       47    
RC2*     4,430       93    
Sally Beauty Holdings*     11,250       126    
Steven Madden*     2,275       93    
Warnaco Group*     1,530       78    
Total Consumer discretionary           885    
Consumer staples—1.5%  
Andersons     1,850       70    
Diamond Foods     710       29    
Total Consumer staples           99    
Energy—6.0%  
Berry Petroleum, Cl A     2,590       82    
Complete Production Services*     4,960       101    
Regency Energy Partners LP     3,910       96    
Teekay Tankers, Cl A #     2,970       39    
Venoco*     3,370       66    
Total Energy           384    
Financials—20.3%  
Anworth Mortgage Asset     8,190       59    
BioMed Realty Trust     5,850       105    
Brandywine Realty Trust     5,820       71    
Cash America International     1,160       40    
CNO Financial Group*     15,450       86    
Government Properties
Income Trust		     3,100       83    
LaSalle Hotel Properties     3,460       81    
Mid-America Apartment
Communities		     1,740       101    
National Penn Bancshares     14,610       91    
PennantPark Investment     8,020       85    
Platinum Underwriters Holdings     2,000       87    
ProAssurance*     470       27    
Signature Bank*     2,690       105    
Susquehanna Bancshares     3,890       33    

 

    Shares   Value
(000)		  
SVB Financial Group*     2,310     $ 98    
Tanger Factory Outlet Centers     2,170       102    
Tower Group     2,310       54    
Total Financials           1,308    
Health care—10.8%  
American Medical Systems
Holdings*		     2,090       41    
AMERIGROUP*     2,240       95    
Emergent Biosolutions*     2,710       47    
Healthsouth*     4,870       94    
Medicis Pharmaceutical, Cl A     2,600       77    
Nektar Therapeutics*     5,610       83    
Par Pharmaceutical*     960       28    
Salix Pharmaceuticals*     820       32    
Savient Pharmaceuticals*     2,190       50    
Seattle Genetics*     4,390       68    
Viropharma*     5,640       84    
Total Health care           699    
Industrials—13.6%  
Aircastle     7,780       66    
Alaska Air Group*     1,600       82    
ArvinMeritor*     6,730       105    
Atlas Air Worldwide Holdings*     1,400       70    
Esterline Technologies*     1,610       92    
Genesee & Wyoming, Cl A*     1,740       76    
Hexcel*     5,870       104    
Moog, Cl A*     1,870       66    
Titan International     2,490       34    
WESCO International*     2,270       89    
Woodward Governor     2,770       90    
Total Industrials           874    
Information technology—20.7%  
Acxiom*     3,230       51    
ADTRAN     2,230       79    
Applied Micro Circuits*     3,270       33    
Coherent*     1,350       54    
Compuware*     7,470       64    
Earthlink     14,240       130    
Ebix* #     3,120       73    
Entegris*     7,790       36    
GT Solar International*     4,660       39    
j2 Global Communications*     2,960       70    

 

TURNER FUNDS 2010 ANNUAL REPORT 51


FINANCIAL STATEMENTS

Schedule of investments

Turner Small Cap Equity Fund

    Shares   Value
(000)		  
Mentor Graphics*     10,870     $ 115    
Novatel Wireless*     6,230       49    
Omnivision Technologies*     4,050       93    
RF Micro Devices*     9,720       60    
Teradyne*     6,100       68    
TIBCO Software*     5,600       99    
TriQuint Semiconductor*     7,690       74    
ValueClick*     6,420       84    
VeriFone Systems*     2,110       66    
Total Information technology           1,337    
Materials—7.1%  
Ferro*     8,580       111    
Kraton Performance Polymers*     3,690       100    
Novagold Resources*     9,280       81    
Rockwood Holdings*     3,370       106    
TPC Group*     2,570       61    
Total Materials           459    
Telecommunication services—1.8%  
Syniverse Holdings*     5,030       114    
Total Telecommunication services           114    
Utilities—4.0%  
Avista     3,590       75    
Cleco     3,080       91    
Nicor     2,000       92    
Total Utilities           258    
Total Common stock
(Cost $5,185)		           6,417    
Cash equivalent—2.2%  
BlackRock TempCash Fund
Institutional Shares
0.240%** (1)		     139,255       139    
Total Cash equivalent
(Cost $139)		           139    
Total Investments—101.7%
(Cost $5,324)		         $ 6,556    

 

As of September 30, 2010, all of the Fund's investments were considered Level 1. Please see Note 2 in Notes to Financial Statements for further information regarding fair value measurements.

Percentages are based on Net Assets of $6,448.***

  *  Non-income producing security.

  **  Rate shown is the 7-day effective yield as of September 30, 2010.

  ***  This number is listed in thousands.

  #  Security fully or partially on loan at September 30, 2010. The total value of securities on loan at September 30, 2010, was $110.*** Certain of these securities may have been sold prior to period end and are included in receivable for investment securities sold on the Statement of Assets and Liabilities.

  (1)  The Fund lends securities in its portfolio pursuant to a securities lending agreement ("Lending Agreement") with Morgan Stanley. Unless otherwise agreed, security loans made pursuant to the Lending Agreement are required at all times to be secured by collateral equal to at least 100% of the market value of the securities loaned. Cash collateral received is invested pursuant to the terms of the Lending Agreement in the BlackRock TempCash Fund, Institutional Shares, a money market fund. All such investments are made at the risk of the Fund. As such, the Fund is liable for investment losses. The Fund receives an annual fee for its participation in the Lending Agreement based on projected lending activity. A partial position of this security was purchased with cash collateral received from securities lending. The total value of such security at September 30, 2010 was $114.***

Cl — Class

LP — Limited Partnership

The accompanying notes are an integral part of the financial statements.

52 TURNER FUNDS 2010 ANNUAL REPORT



THIS PAGE WAS INTENTIONALLY LEFT BLANK

TURNER FUNDS 2010 ANNUAL REPORT 53


FINANCIAL STATEMENTS

Statements of assets and liabilities (000)

September 30, 2010

    Turner
Spectrum
Fund		   Turner
Concentrated
Growth Fund		   Turner
Core
Growth Fund		   Turner
Emerging
Growth Fund		   Turner
Large Cap
Growth Fund		  
Assets:  
Investment securities, at cost   $ 193,031     $ 33,136     $ 453,019     $ 351,833     $ 103,879    
Investment securities, at value   $ 201,612     $ 40,963     $ 554,347 *   $ 457,512 *   $ 123,534 *  
Deposits with brokers for securities sold short     161,088       —       —       —       —    
Deposits with brokers for options     —       150       150       150       150    
Receivable for investment securities sold     29,757       2,825       18,010       16,263       2,866    
Receivable for capital shares sold     1,813       217       964       88       168    
Prepaid expenses     64       11       54       41       19    
Receivable for dividend income     62       1       290       83       31    
Receivable from investment adviser     19       —       —       —       —    
Reclaim receivable     1       3       24       25       —    
Total assets     394,416       44,170       573,839       474,162       126,768    
Liabilities:  
Securities sold short, at proceeds     114,685       —       —       —       —    
Written options, premiums received     240       —       —       —       —    
Securities sold short, at value     116,349       —       —       —       —    
Written options, at value     296       —       —       —       —    
Cash overdraft     —       —       4,751       —       —    
Payable for investment securities purchased     38,403       1,196       13,466       4,859       2,997    
Dividends payable on securities sold short (Note 2)     58       —       —       —       —    
Broker fees and charges on short sales payable     70       —       —       —       —    
Payable due to shareholder servicing     22       12       120       35       —    
Payable due to distributor     4       —       —       —       —    
Payable due to investment adviser     —       —       —       —       —    
Obligation to return securities lending collateral     —       —       10,643       15,714       4,028    
Payable for capital shares redeemed     93       26       3,321       217       192    
Other accrued expenses     65       12       138       69       30    
Total liabilities     155,360       1,246       32,439       20,894       7,247    
Net assets   $ 239,056     $ 42,924     $ 541,400     $ 453,268     $ 119,521    
*Includes market value of securities on loan   $ —     $ —     $ 10,377     $ 15,258     $ 3,911    
Net assets:  
Portfolio capital   $ 239,810     $ 75,859     $ 707,458     $ 434,982     $ 127,153    
Undistributed net investment income (accumulated net investment loss)     (220 )     —       539       —       153    
Accumulated net realized loss on investments, securities sold
short, written options and foreign currency transactions		     (7,396 )     (40,762 )     (267,925 )     (87,393 )     (27,440 )  
Net unrealized appreciation on investments, written options and
securities sold short		     6,861       7,827       101,328       105,679       19,655    
Net unrealized appreciation on foreign currencies and translation of
other assets and liabilities denominated in foreign currencies		     1       —       —       —       —    
Net assets   $ 239,056     $ 42,924     $ 541,400     $ 453,268     $ 119,521    
Outstanding shares of beneficial interest (1) Institutional Class Shares (2)     16,596,366       —       35,778,341       6,503,330       24,424,395    
Outstanding shares of beneficial interest (1) Investor Class Shares (2)     4,858,881       6,471,122       15,610,829       4,177,903       282,091    
Outstanding shares of beneficial interest (1) Retirement Class Shares (2)     —       —       —       —       —    
Outstanding shares of beneficial interest (1) Class C Shares (2)     668,857       —       —       —       —    
Net assets — Institutional Class Shares (2)   $ 179,526,592     $ —     $ 377,649,736     $ 276,445,247     $ 118,164,010    
Net assets — Investor Class Shares (2)   $ 52,361,159     $ 42,924,300     $ 163,750,027     $ 176,822,937     $ 1,357,462    
Net assets — Retirement Class Shares (2)   $ —     $ —     $ —     $ —     $ —    
Net assets — Class C Shares (2)   $ 7,168,667     $ —     $ —     $ —     $ —    
Net asset value, offering and redemption price per share —
Institutional Class Shares		   $ 10.82     $ —     $ 10.56     $ 42.51     $ 4.84    
Net asset value, offering and redemption price per share —
Investor Class Shares		   $ 10.78     $ 6.63     $ 10.49     $ 42.32     $ 4.81    
Net asset value, offering and redemption price per share —
Retirement Class Shares		   $ —     $ —     $ —     $ —     $ —    
Net asset value, offering and redemption price per share —
Class C Shares		   $ 10.72     $ —     $ —     $ —     $ —    

 

54 TURNER FUNDS 2010 ANNUAL REPORT


    Turner
Midcap
Growth Fund		   Turner
New Enterprise
Fund		   Turner
Small Cap
Growth Fund		   Turner
Quantitative
Broad Market
Equity Fund		   Turner
Quantitative
Large Cap
Value Fund		  
Assets:  
Investment securities, at cost   $ 737,219     $ 17,968     $ 249,552     $ 10,612     $ 762    
Investment securities, at value   $ 998,523 *   $ 24,650 *   $ 314,552 *   $ 10,823     $ 829    
Deposits with brokers for securities sold short     —       —       —       —       —    
Deposits with brokers for options     150       150       150       —       —    
Receivable for investment securities sold     14,615       —       2,577       901       —    
Receivable for capital shares sold     917       37       137       92       —    
Prepaid expenses     73       9       23       12       14    
Receivable for dividend income     339       1       69       13       1    
Receivable from investment adviser     —       —       —       —       —    
Reclaim receivable     16       —       —       —       —    
Total assets     1,014,633       24,847       317,508       11,841       844    
Liabilities:  
Securities sold short, at proceeds     —       —       —       —       —    
Written options, premiums received     —       —       —       —       —    
Securities sold short, at value     —       —       —       —       —    
Written options, at value     —       —       —       —       —    
Cash overdraft     318       —       —       —       —    
Payable for investment securities purchased     6,423       291       4,264       861       —    
Dividends payable on securities sold short (Note 2)     —       —       —       —       —    
Broker fees and charges on short sales payable     —       —       —       —       —    
Payable due to shareholder servicing     153       5       59       —       —    
Payable due to distributor     —       —       —       —       —    
Payable due to investment adviser     —       —       —       —       8    
Obligation to return securities lending collateral     84,571       1,316       37,726       —       —    
Payable for capital shares redeemed     2,316       1       490       —       —    
Other accrued expenses     157       7       44       8       6    
Total liabilities     93,938       1,620       42,583       869       14    
Net assets   $ 920,695     $ 23,227     $ 274,925     $ 10,972     $ 830    
*Includes market value of securities on loan   $ 81,995     $ 1,273     $ 36,548     $ —     $ —    
Net assets:  
Portfolio capital   $ 1,022,906     $ 37,410     $ 280,832     $ 11,347     $ 1,032    
Undistributed net investment income (accumulated net investment loss)     —       —       —       65       8    
Accumulated net realized loss on investments, securities sold
short, written options and foreign currency transactions		     (363,515 )     (20,865 )     (70,907 )     (651 )     (277 )  
Net unrealized appreciation on investments, written options and
securities sold short		     261,304       6,682       65,000       211       67    
Net unrealized appreciation on foreign currencies and translation of
other assets and liabilities denominated in foreign currencies		     —       —       —       —       —    
Net assets   $ 920,695     $ 23,227     $ 274,925     $ 10,972     $ 830    
Outstanding shares of beneficial interest (1) Institutional Class Shares (2)     5,517,482       —       —       1,228,996       104,991    
Outstanding shares of beneficial interest (1) Investor Class Shares (2)     25,264,764       3,303,169       9,489,046       2,299       593    
Outstanding shares of beneficial interest (1) Retirement Class Shares (2)     159,471       —       —       —       —    
Outstanding shares of beneficial interest (1) Class C Shares (2)     —       —       —       —       —    
Net assets — Institutional Class Shares (2)   $ 164,993,499     $ —     $ —     $ 10,951,570     $ 825,418    
Net assets — Investor Class Shares (2)   $ 751,123,572     $ 23,226,523     $ 274,924,577     $ 20,423     $ 4,650    
Net assets — Retirement Class Shares (2)   $ 4,578,085     $ —     $ —     $ —     $ —    
Net assets — Class C Shares (2)   $ —     $ —     $ —     $ —     $ —    
Net asset value, offering and redemption price per share —
Institutional Class Shares		   $ 29.90     $ —     $ —     $ 8.91     $ 7.86    
Net asset value, offering and redemption price per share —
Investor Class Shares		   $ 29.73     $ 7.03     $ 28.97     $ 8.88     $ 7.85 †  
Net asset value, offering and redemption price per share —
Retirement Class Shares		   $ 28.71     $ —     $ —     $ —     $ —    
Net asset value, offering and redemption price per share —
Class C Shares		   $ —     $ —     $ —     $ —     $ —    

 

(1)  Unlimited authorization — par value $0.00001.

(2)  Shares and Net Assets have not been rounded.

†  Difference in net asset value recalculation and net asset value stated is caused by rounding differences.

Amounts designated as "—" are either not applicable, $0 or have been rounded to $0.

The accompanying notes are an integral part of the financial statements.

TURNER FUNDS 2010 ANNUAL REPORT 55


FINANCIAL STATEMENTS

Statements of assets and liabilities (000)

September 30, 2010

    Turner
Global
Opportunities
Fund		   Turner
International
Core Growth
Fund		   Turner
Small Cap
Equity Fund		  
Assets:  
Investment securities, at cost   $ 999     $ 4,250     $ 5,324    
Investment securities, at value   $ 1,158     $ 5,070     $ 6,556 *  
Receivable for investment securities sold     —       79       142    
Receivable for capital shares sold     —       —       1    
Prepaid expenses     5       10       10    
Receivable for dividend income     1       9       19    
Reclaim receivable     —       9       —    
Total assets     1,164       5,177       6,728    
Liabilities:  
Payable for investment securities purchased     —       29       75    
Payable due to shareholder servicing     —       —       2    
Payable due to investment adviser     4       4       —    
Obligation to return securities lending collateral     —       —       114    
Payable for capital shares redeemed     —       —       79    
Other accrued expenses     7       15       10    
Total liabilities     11       48       280    
Net assets   $ 1,153     $ 5,129     $ 6,448    
*Includes market value of securities on loan   $ —     $ —     $ 110    
Net assets:  
Portfolio capital   $ 998     $ 5,495     $ 12,834    
Undistributed net investment income
(distributions in excess of net investment income)		     —       (14 )     20    
Accumulated net realized loss on investments and foreign currency
transactions		     (4 )     (1,173 )     (7,638 )  
Net unrealized appreciation on investments     159       820       1,232    
Net unrealized appreciation on foreign currencies and translation of
other assets and liabilities denominated in foreign currencies		     —       1       —    
Net assets   $ 1,153     $ 5,129     $ 6,448    
Outstanding shares of beneficial interest (1) Institutional Class Shares (2)     100,012       533,600       26,232    
Outstanding shares of beneficial interest (1) Investor Class Shares (2)     22       11,743       557,071    
Net assets — Institutional Class Shares (2)   $ 1,152,584     $ 5,018,885     $ 290,992    
Net assets — Investor Class Shares (2)   $ 257     $ 110,251     $ 6,157,331    
Net asset value, offering and redemption price per share —
Institutional Class Shares		   $ 11.52     $ 9.41     $ 11.09    
Net asset value, offering and redemption price per share —
Investor Class Shares		   $ 11.50 †   $ 9.39     $ 11.05    

 

(1)  Unlimited authorization — par value $0.00001.

(2)  Shares and Net Assets have not been rounded.

†  Difference in net asset value recalculation and net asset value stated is caused by rounding differences.

Amounts designated as "—" are either not applicable, $0 or have been rounded to $0.

The accompanying notes are an integral part of the financial statements.

56 TURNER FUNDS 2010 ANNUAL REPORT


Statements of operations (000)

    Turner
Spectrum
Fund		   Turner
Concentrated
Growth
Fund		   Turner
Core Growth
Fund		  
    year ended
9/30/10		   year ended
9/30/10		   year ended
9/30/10		  
Investment income:  
Dividend   $ 724     $ 148     $ 6,732    
Securities lending     —       7       43    
Foreign taxes withheld     (8 )     —       (86 )  
Total Investment income     716       155       6,689    
Expenses:  
Investment advisory fees     1,600       520       4,495    
Administrator fees     151       58       1,061    
Shareholder service fees (1)     61       103       769    
Shareholder service fees (2)     7       —       —    
Distribution fees (2)     21       —       —    
Chief compliance officer fees     7       3       50    
Dividend expense     478       —       —    
Broker fees and charges on short sales     404       —       —    
Custodian fees     121       7       44    
Transfer agent fees     112       55       256    
Printing fees     48       11       168    
Registration fees     46       20       48    
Professional fees     43       13       242    
Trustees' fees     12       4       75    
Insurance and other fees     19       5       90    
Total expenses     3,130       799       7,298    
Less:  
Investment advisory fee waiver     (1,004 )     (176 )     (1,360 )  
Net expenses     2,126       623       5,938    
Net investment income (loss)     (1,410 )     (468 )     751    
Net realized gain (loss) from securities sold     (2,610 )     4,512       28,303 †  
Net realized loss from securities sold short     (4,251 )     —       —    
Net realized gain on written option contracts     247       —       —    
Net realized loss on foreign currency transactions     (138 )     —       —    
Net change in unrealized appreciation
(depreciation) on investments		     7,804       (1,040 )     6,444    
Net change in unrealized depreciation
on securities sold short		     (1,567 )     —       —    
Net change in unrealized depreciation
on written option contracts		     (56 )     —       —    
Net change in unrealized depreciation on foreign currencies,
and translation of other assets and liabilities denominated
in foreign currencies		     (2 )     —       —    
Net realized and unrealized gain (loss)
on investments and foreign currencies		     (573 )     3,472       34,747    
Net increase (decrease) in net assets resulting
from operations		   $ (1,983 )   $ 3,004     $ 35,498    

 

(1)  Attributable to Investor Class Shares only.

(2)  Attributable to Class C Shares only.

†  Includes realized gains and losses as a result of in-kind transactions (see Note 13 in Notes to Financial Statements).

Amounts designated as "—" are either not applicable, $0 or have been rounded to $0.

The accompanying notes are an integral part of the financial statements.

TURNER FUNDS 2010 ANNUAL REPORT 57


FINANCIAL STATEMENTS

Statements of operations (000)

    Turner
Emerging
Growth Fund		   Turner
Large Cap
Growth Fund		   Turner
Midcap
Growth Fund		   Turner New
Enterprise
Fund		   Turner
Small Cap
Growth Fund		  
    year ended
9/30/10		   year ended
9/30/10		   year ended
9/30/10		   year ended
9/30/10		   year ended
9/30/10		  
Investment income:  
Dividend   $ 1,374     $ 1,062     $ 6,014     $ 51     $ 876    
Securities lending     318       5       333       14       495    
Foreign taxes withheld     (4 )     (6 )     (34 )     (1 )     —    
Total Investment income     1,688       1,061       6,313       64       1,371    
Expenses:  
Investment advisory fees     4,437       728       7,355       347       2,678    
Administrator fees     629       172       1,390       35       379    
Shareholder service fees (2)     452       3       2,078       62       669    
Shareholder service fees (3)     —       —       11       —       —    
Distribution fees (3)     —       —       11       —       —    
Chief compliance officer fees     29       8       64       2       17    
Custodian fees     33       17       44       4       30    
Transfer agent fees     118       138       433       49       66    
Printing fees     100       27       215       6       57    
Registration fees     81       43       70       17       23    
Professional fees     139       37       301       7       84    
Trustees' fees     42       12       93       2       26    
Insurance and other fees     59       16       130       4       36    
Total expenses     6,119       1,201       12,195       535       4,065    
Less:  
Investment advisory fee waiver     (564 )     (361 )     (975 )     (127 )     (718 )  
Reimbursements of other operating expenses     —       —       —       —       —    
Fees paid indirectly (4)     —       —       (1 )     —       —    
Net expenses     5,555       840       11,219       408       3,347    
Net investment income (loss)     (3,867 )     221       (4,906 )     (344 )     (1,976 )  
Net realized gain (loss) from securities sold     31,561       1,898       107,778       3,912       25,168    
Net realized loss on foreign currency transactions     —       —       —       —       —    
Net change in unrealized appreciation
(depreciation) on investments		     22,753       10,470       24,016       261       14,979    
Net realized and unrealized gain (loss)
on investments and foreign currencies		     54,314       12,368       131,794       4,173       40,147    
Net increase (decrease) in net assets resulting
from operations		   $ 50,447     $ 12,589     $ 126,888     $ 3,829     $ 38,171    

 

58 TURNER FUNDS 2010 ANNUAL REPORT


    Turner
Quantitative
Broad Market
Equity Fund		   Turner
Quantitative
Large Cap
Value Fund		   Turner
Global
Opportunities
Fund		   Turner
International
Core Growth
Fund		   Turner
Small Cap
Equity Fund		  
    year ended
9/30/10		   year ended
9/30/10		   5/7/10(1) thru
9/30/10		   year ended
9/30/10		   year ended
9/30/10		  
Investment income:  
Dividend   $ 107     $ 16     $ 3     $ 81     $ 149    
Securities lending     —       —       —       —       144    
Foreign taxes withheld     —       —       —       (8 )     —    
Total Investment income     107       16       3       73       293    
Expenses:  
Investment advisory fees     31       5       3       38       176    
Administrator fees     9       1       1       6       26    
Shareholder service fees (2)     —       —       —       —       32    
Shareholder service fees (3)     —       —       —       —       —    
Distribution fees (3)     —       —       —       —       —    
Chief compliance officer fees     —       —       —       —       1    
Custodian fees     6       2       4       24       18    
Transfer agent fees     55       55       23       55       60    
Printing fees     4       3       2       2       3    
Registration fees     28       33       —       33       34    
Professional fees     2       —       —       1       6    
Trustees' fees     1       —       —       —       2    
Insurance and other fees     4       3       1       17       6    
Total expenses     140       102       34       176       364    
Less:  
Investment advisory fee waiver     (31 )     (5 )     (3 )     (38 )     (109 )  
Reimbursements of other operating expenses     (70 )     (91 )     (27 )     (89 )     —    
Fees paid indirectly (4)     —       —       —       —       —    
Net expenses     39       6       4       49       255    
Net investment income (loss)     68       10       (1 )     24       38    
Net realized gain (loss) from securities sold     (473 )     104       (4 )     465       4,883    
Net realized loss on foreign currency transactions     —       —       (1 )     (12 )     —    
Net change in unrealized appreciation
(depreciation) on investments		     133       (58 )     159       187       (3,478 )  
Net realized and unrealized gain (loss)
on investments and foreign currencies		     (340 )     46       154       640       1,405    
Net increase (decrease) in net assets resulting
from operations		   $ (272 )   $ 56     $ 153     $ 664     $ 1,443    

 

(1)  Commencement of operations.

(2)  Attributable to Investor Class Shares only.

(3)  Attributable to Retirement Class Shares only.

(4)  See Note 4 in Notes to Financial Statements.

Amounts designated as "—" are either not applicable, $0 or have been rounded to $0.

The accompanying notes are an integral part of the financial statements.

TURNER FUNDS 2010 ANNUAL REPORT 59



FINANCIAL STATEMENTS

Statements of changes in net assets (000)

    Turner
Spectrum
Fund		   Turner
Concentrated
Growth
Fund		   Turner
Core Growth
Fund		  
    year ended
9/30/10		   5/7/09(1) thru
9/30/09		   year ended
9/30/10		   year ended
9/30/09		   year ended
9/30/10		   year ended
9/30/09		  
Investment activities:  
Net investment income (loss)   $ (1,410 )   $ (53 )   $ (468 )   $ 120     $ 751     $ 2,669    
Net realized gain (loss) from securities sold and securities sold short     (6,861 )     50       4,512       (15,251 )     28,303 †     (175,116 )  
Net realized gain on written option contracts     247       7       —       —       —       —    
Net realized loss on foreign currency transactions     (138 )     (3 )     —       —       —       —    
Net change in unrealized appreciation (depreciation) on investments and
securities sold short		     6,237       680       (1,040 )     13,260       6,444       146,832    
Net change in unrealized depreciation on written option contracts     (56 )     —       —       —       —       —    
Net change in unrealized appreciation (depreciation) on foreign currencies and translation
of other assets and liabilities denominated in foreign currencies		     (2 )     3       —       —       —       —    
Net increase (decrease) in net assets resulting from operations     (1,983 )     684       3,004       (1,871 )     35,498       (25,615 )  
Dividends and distributions to shareholders:  
Net investment income  
Institutional Class Shares     —       —       —       —       (1,623 )     (1,661 )  
Investor Class Shares     —       —       (121 )^     —       (664 )     (647 )  
Realized capital gains  
Institutional Class Shares     (92 )     —       —       —       —       —    
Investor Class Shares     (47 )     —       —       —       —       —    
Class C Shares     (3 )     —       —       —       —       —    
Total dividends and distributions     (142 )     —       (121 )     —       (2,287 )     (2,308 )  
Capital share transactions:  
Institutional Class Shares  
Proceeds from shares issued     187,039       8,244       —       —       279,938       132,265    
Proceeds from shares issued in lieu of cash distributions     84       —       —       —       1,398       1,393    
Cost of shares redeemed     (14,332 )     (15 )     —       —       (312,150 )†     (95,340 )  
Net increase (decrease) in net assets from Institutional Class Shares transactions     172,791       8,229       —       —       (30,814 )     38,318    
Investor Class Shares  
Proceeds from shares issued     57,936       4,521       12,686       12,446       158,361       52,699    
Proceeds from shares issued in lieu of cash distributions     47       —       119       —       597       587    
Cost of shares redeemed     (10,048 )     (186 )     (12,737 )     (13,183 )     (254,148 )     (50,263 )  
Net increase (decrease) in net assets from Investor Class Shares transactions     47,935       4,335       68       (737 )     (95,190 )     3,023    
Class C Shares  
Proceeds from shares issued     7,401       —       —       —       —       —    
Proceeds from shares issued in lieu of cash distributions     3       —       —       —       —       —    
Cost of shares redeemed     (197 )     —       —       —       —       —    
Net increase in net assets from Class C Shares transactions     7,207       —       —       —       —       —    
Net increase (decrease) in net assets from capital share transactions     227,933       12,564       68       (737 )     (126,004 )     41,341    
Total increase (decrease) in net assets     225,808       13,248       2,951       (2,608 )     (92,793 )     13,418    
Net assets:  
Beginning of period     13,248       —       39,973       42,581       634,193       620,775    
End of period   $ 239,056     $ 13,248     $ 42,924     $ 39,973     $ 541,400     $ 634,193    
Undistributed net investment income (accumulated net investment loss)   $ (220 )   $ (4 )   $ —     $ 121     $ 539     $ 1,903    
Shares issued and redeemed:  
Institutional Class Shares  
Issued     17,118       804       —       —       27,088       15,778    
Issued in lieu of cash distributions     8       —       —       —       132       185    
Redeemed     (1,333 )     (1 )     —       —       (29,854 )†     (12,152 )  
Net increase (decrease) in Institutional Class Shares     15,793       803       —       —       (2,634 )     3,811    
Investor Class Shares  
Issued     5,370       441       2,002       2,606       15,470       6,605    
Issued in lieu of cash distributions     4       —       18       —       56       78    
Redeemed     (938 )     (18 )     (2,036 )     (2,824 )     (25,538 )     (6,266 )  
Net increase (decrease) in Investor Class Shares     4,436       423       (16 )     (218 )     (10,012 )     417    
Class C Shares  
Issued     688       —       —       —       —       —    
Redeemed     (19 )     —       —       —       —       —    
Net increase in Class C Shares     669       —       —       —       —       —    
Net increase (decrease) in share transactions     20,898       1,226       (16 )     (218 )     (12,646 )     4,228    

 

60 TURNER FUNDS 2010 ANNUAL REPORT


    Turner
Emerging
Growth Fund		   Turner
Large Cap
Growth Fund		  
    year ended
9/30/10		   year ended
9/30/09		   year ended
9/30/10		   year ended
9/30/09		  
Investment activities:  
Net investment income (loss)   $ (3,867 )   $ (2,463 )   $ 221     $ 290    
Net realized gain (loss) from securities sold and securities sold short     31,561       (118,692 )     1,898       (7,967 )  
Net realized gain on written option contracts     —       —       —       —    
Net realized loss on foreign currency transactions     —       —       —       —    
Net change in unrealized appreciation (depreciation) on investments and
securities sold short		     22,753       35,521       10,470       11,049    
Net change in unrealized depreciation on written option contracts     —       —       —       —    
Net change in unrealized appreciation (depreciation) on foreign currencies and translation
of other assets and liabilities denominated in foreign currencies		     —       —       —       —    
Net increase (decrease) in net assets resulting from operations     50,447       (85,634 )     12,589       3,372    
Dividends and distributions to shareholders:  
Net investment income  
Institutional Class Shares     —       —       (295 )     (96 )  
Investor Class Shares     —       —       —       (2 )  
Realized capital gains  
Institutional Class Shares     —       —       —       —    
Investor Class Shares     —       (12,445 )     —       —    
Class C Shares     —       —       —       —    
Total dividends and distributions     —       (12,445 )     (295 )     (98 )  
Capital share transactions:  
Institutional Class Shares  
Proceeds from shares issued     44,818       205,712       42,694       70,616    
Proceeds from shares issued in lieu of cash distributions     —       —       293       78    
Cost of shares redeemed     (41,796 )     (8,295 )     (31,649 )     (8,117 )  
Net increase (decrease) in net assets from Institutional Class Shares transactions     3,022       197,417       11,338       62,577    
Investor Class Shares  
Proceeds from shares issued     16,414       71,659       235       938    
Proceeds from shares issued in lieu of cash distributions     —       12,367       —       2    
Cost of shares redeemed     (49,217 )     (280,340 )     (477 )     (297 )  
Net increase (decrease) in net assets from Investor Class Shares transactions     (32,803 )     (196,314 )     (242 )     643    
Class C Shares  
Proceeds from shares issued     —       —       —       —    
Proceeds from shares issued in lieu of cash distributions     —       —       —       —    
Cost of shares redeemed     —       —       —       —    
Net increase in net assets from Class C Shares transactions     —       —       —       —    
Net increase (decrease) in net assets from capital share transactions     (29,781 )     1,103       11,096       63,220    
Total increase (decrease) in net assets     20,666       (96,976 )     23,390       66,494    
Net assets:  
Beginning of period     432,602       529,578       96,131       29,637    
End of period   $ 453,268     $ 432,602     $ 119,521     $ 96,131    
Undistributed net investment income (accumulated net investment loss)   $ —     $ —     $ 153     $ 227    
Shares issued and redeemed:  
Institutional Class Shares  
Issued     1,099       6,697       9,552       17,375    
Issued in lieu of cash distributions     —       —       62       23    
Redeemed     (1,049 )     (244 )     (6,645 )     (2,255 )  
Net increase (decrease) in Institutional Class Shares     50       6,453       2,969       15,143    
Investor Class Shares  
Issued     411       2,324       51       265    
Issued in lieu of cash distributions     —       411       —       —    
Redeemed     (1,240 )     (9,137 )     (103 )     (76 )  
Net increase (decrease) in Investor Class Shares     (829 )     (6,402 )     (52 )     189    
Class C Shares  
Issued     —       —       —       —    
Redeemed     —       —       —       —    
Net increase in Class C Shares     —       —       —       —    
Net increase (decrease) in share transactions     (779 )     51       2,917       15,332    

 

(1)  Commencement of operations.

†  Includes realized gains, losses or redemptions as a result of in-kind transactions (see Note 13 in Notes to Financial Statements.)

^  Includes return of capital of $1 (000).

Amounts designated as "—" are either not applicable, $0 or have been rounded to $0.

The accompanying notes are an integral part of the financial statements.

TURNER FUNDS 2010 ANNUAL REPORT 61


FINANCIAL STATEMENTS

Statements of changes in net assets (000)

    Turner
Midcap
Growth Fund		   Turner New
Enterprise
Fund		   Turner
Small Cap
Growth Fund		  
    year ended
9/30/10		   year ended
9/30/09		   year ended
9/30/10		   year ended
9/30/09		   year ended
9/30/10		   year ended
9/30/09		  
Investment activities:  
Net investment income (loss)   $ (4,906 )   $ (2,161 )   $ (344 )   $ 21     $ (1,976 )   $ (715 )  
Net realized gain (loss) from securities sold     107,778       (312,396 )†     3,912       (9,267 )     25,168       (54,422 )  
Net change in unrealized appreciation (depreciation) on investments     24,016       279,766       261       9,302       14,979       44,425    
Net increase (decrease) in net assets resulting from operations     126,888       (34,791 )     3,829       56       38,171       (10,712 )  
Dividends and distributions to shareholders:  
Net investment income  
Institutional Class Shares     —       —       —       —       —       —    
Investor Class Shares     —       —       (23 )^     —       —       —    
Total dividends and distributions     —       —       (23 )     —       —       —    
Capital share transactions:  
Institutional Class Shares  
Proceeds from shares issued     61,281       41,508       —       —       —       —    
Proceeds from shares issued in lieu of cash distributions     —       —       —       —       —       —    
Cost of shares redeemed     (48,879 )     (43,531 )     —       —       —       —    
Net increase (decrease) in net assets from Institutional Class Shares transactions     12,402       (2,023 )     —       —       —       —    
Investor Class Shares  
Proceeds from shares issued     189,151       224,510       7,014       6,399       56,625       58,406    
Proceeds from shares issued in lieu of cash distributions     —       —       22       —       —       —    
Cost of shares redeemed     (407,498 )     (324,371 )†     (13,939 )     (12,890 )     (70,731 )     (46,268 )  
Net increase (decrease) in net assets from Investor Class Shares transactions     (218,347 )     (99,861 )     (6,903 )     (6,491 )     (14,106 )     12,138    
Retirement Class Shares  
Proceeds from shares issued     793       1,351       —       —       —       —    
Cost of shares redeemed     (642 )     (2,855 )     —       —       —       —    
Net increase (decrease) in net assets from Retirement Class Shares transactions     151       (1,504 )     —       —       —       —    
Net increase (decrease) in net assets from capital share transactions     (205,794 )     (103,388 )     (6,903 )     (6,491 )     (14,106 )     12,138    
Total increase (decrease) in net assets     (78,906 )     (138,179 )     (3,097 )     (6,435 )     24,065       1,426    
Net assets:  
Beginning of year     999,601       1,137,780       26,324       32,759       250,860       249,434    
End of year   $ 920,695     $ 999,601     $ 23,227     $ 26,324     $ 274,925     $ 250,860    
Undistributed net investment income   $ —     $ —     $ —     $ 23     $ —     $ —    
Shares issued and redeemed:  
Institutional Class Shares  
Issued     2,060       2,105       —       —       —       —    
Issued in lieu of cash distributions     —       —       —       —       —       —    
Redeemed     (1,752 )     (2,142 )     —       —       —       —    
Net increase (decrease) in Institutional Class Shares     308       (37 )     —       —       —       —    
Investor Class Shares  
Issued     6,754       11,485       1,076       1,510       2,130       2,877    
Issued in lieu of cash distributions     —       —       4       —       —       —    
Redeemed     (14,508 )     (16,455 )†     (2,198 )     (2,941 )     (2,609 )     (2,338 )  
Net increase (decrease) in Investor Class Shares     (7,754 )     (4,970 )     (1,118 )     (1,431 )     (479 )     539    
Retirement Class Shares  
Issued     29       73       —       —       —       —    
Redeemed     (24 )     (147 )     —       —       —       —    
Net increase (decrease) in Retirement Class Shares     5       (74 )     —       —       —       —    
Net increase (decrease) in share transactions     (7,441 )     (5,081 )     (1,118 )     (1,431 )     (479 )     539    

 

62 TURNER FUNDS 2010 ANNUAL REPORT


    Turner
Quantitative
Broad Market
Equity Fund		   Turner
Quantitative
Large Cap
Value Fund		  
    year ended
9/30/10		   year ended
9/30/09		   year ended
9/30/10		   year ended
9/30/09		  
Investment activities:  
Net investment income (loss)   $ 68     $ 6     $ 10     $ 14    
Net realized gain (loss) from securities sold     (473 )     (141 )     104       (244 )  
Net change in unrealized appreciation (depreciation) on investments     133       114       (58 )     131    
Net increase (decrease) in net assets resulting from operations     (272 )     (21 )     56       (99 )  
Dividends and distributions to shareholders:  
Net investment income  
Institutional Class Shares     (7 )     (4 )     (13 )     (14 )  
Investor Class Shares     —       —       —       —    
Total dividends and distributions     (7 )     (4 )     (13 )     (14 )  
Capital share transactions:  
Institutional Class Shares  
Proceeds from shares issued     12,228       —       1       109    
Proceeds from shares issued in lieu of cash distributions     7       4       13       14    
Cost of shares redeemed     (1,525 )     —       (3 )     —    
Net increase (decrease) in net assets from Institutional Class Shares transactions     10,710       4       11       123    
Investor Class Shares  
Proceeds from shares issued     15       8       —       3    
Proceeds from shares issued in lieu of cash distributions     —       —       —       —    
Cost of shares redeemed     (5 )     —       —       —    
Net increase (decrease) in net assets from Investor Class Shares transactions     10       8       —       3    
Retirement Class Shares  
Proceeds from shares issued     —       —       —       —    
Cost of shares redeemed     —       —       —       —    
Net increase (decrease) in net assets from Retirement Class Shares transactions     —       —       —       —    
Net increase (decrease) in net assets from capital share transactions     10,720       12       11       126    
Total increase (decrease) in net assets     10,441       (13 )     54       13    
Net assets:  
Beginning of year     531       544       776       763    
End of year   $ 10,972     $ 531     $ 830     $ 776    
Undistributed net investment income   $ 65     $ 4     $ 8     $ 11    
Shares issued and redeemed:  
Institutional Class Shares  
Issued     1,338       —       —       16    
Issued in lieu of cash distributions     1       1       2       2    
Redeemed     (173 )     —       —       —    
Net increase (decrease) in Institutional Class Shares     1,166       1       2       18    
Investor Class Shares  
Issued     2       1       —       1    
Issued in lieu of cash distributions     —       —       —       —    
Redeemed     (1 )     —       —       —    
Net increase (decrease) in Investor Class Shares     1       1       —       1    
Retirement Class Shares  
Issued     —       —       —       —    
Redeemed     —       —       —       —    
Net increase (decrease) in Retirement Class Shares     —       —       —       —    
Net increase (decrease) in share transactions     1,167       2       2       19    

 

†  Includes realized gains, losses or redemptions as a result of in-kind transactions (see Note 13 in Notes to Financial Statements).

^  Includes return of capital of $1 (000).

Amounts designated as "—" are either not applicable, $0 or have been rounded to $0.

The accompanying notes are an integral part of the financial statements.

TURNER FUNDS 2010 ANNUAL REPORT 63


FINANCIAL STATEMENTS

Statements of changes in net assets (000)

    Turner
Global
Opportunities
Fund		   Turner
International
Core Growth
Fund		  
    5/7/10(1) thru
9/30/10		   year ended
9/30/10		   year ended
9/30/09		  
Investment activities:  
Net investment income (loss)   $ (1 )   $ 24     $ 38    
Net realized gain (loss) from securities sold     (4 )     465       (1,030 )  
Net realized loss on foreign currency transactions     (1 )     (12 )     (8 )  
Net change in unrealized appreciation (depreciation) on investments     159       187       1,208    
Net change in unrealized appreciation on foreign currencies and
translation of other assets and liabilities denominated in foreign currencies		     —       —       2    
Net increase (decrease) in net assets resulting from operations     153       664       210    
Dividends and distributions to shareholders:  
Net investment income  
Institutional Class Shares     —       (59 )     (42 )  
Investor Class Shares     —       —       —    
Realized capital gains  
Investor Class Shares     —       —       —    
Total dividends and distributions     —       (59 )     (42 )  
Capital share transactions:  
Institutional Class Shares  
Proceeds from shares issued     1,000       518       433    
Proceeds from shares issued in lieu of cash distributions     —       59       42    
Cost of shares redeemed     —       —       (130 )  
Net increase (decrease) in net assets from Institutional Class Shares transactions     1,000       577       345    
Investor Class Shares  
Proceeds from shares issued     —       135       —    
Proceeds from shares issued in lieu of cash distributions     —       —       —    
Cost of shares redeemed     —       (36 )     —    
Net increase (decrease) in net assets from Investor Class Shares transactions     —       99       —    
Net increase (decrease) in net assets from capital share transactions     1,000       676       345    
Total increase (decrease) in net assets     1,153       1,281       513    
Net assets:  
Beginning of period     —       3,848       3,335    
End of period   $ 1,153     $ 5,129     $ 3,848    
Undistributed net investment income (distributions in excess of net investment income)   $ —     $ (14 )   $ 4    
Shares issued and redeemed:  
Institutional Class Shares  
Issued     100       60       77    
Issued in lieu of cash distributions     —       7       7    
Redeemed     —       —       (17 )  
Net increase (decrease) in Institutional Class Shares     100       67       67    
Investor Class Shares  
Issued     —       16       —    
Issued in lieu of cash distributions     —       —       —    
Redeemed     —       (4 )     —    
Net increase (decrease) in Investor Class Shares     —       12       —    
Net increase (decrease) in share transactions     100       79       67    

 

64 TURNER FUNDS 2010 ANNUAL REPORT


    Turner
Small Cap
Equity Fund		  
    year ended
9/30/10		   year ended
9/30/09		  
Investment activities:  
Net investment income (loss)   $ 38     $ 8    
Net realized gain (loss) from securities sold     4,883       (7,158 )  
Net realized loss on foreign currency transactions     —       —    
Net change in unrealized appreciation (depreciation) on investments     (3,478 )     4,120    
Net change in unrealized appreciation on foreign currencies and
translation of other assets and liabilities denominated in foreign currencies		     —       —    
Net increase (decrease) in net assets resulting from operations     1,443       (3,030 )  
Dividends and distributions to shareholders:  
Net investment income  
Institutional Class Shares     —       —    
Investor Class Shares     —       —    
Realized capital gains  
Investor Class Shares     —       (17 )  
Total dividends and distributions     —       (17 )  
Capital share transactions:  
Institutional Class Shares  
Proceeds from shares issued     723       4,588    
Proceeds from shares issued in lieu of cash distributions     —       —    
Cost of shares redeemed     (6,351 )     (212 )  
Net increase (decrease) in net assets from Institutional Class Shares transactions     (5,628 )     4,376    
Investor Class Shares  
Proceeds from shares issued     1,249       16,333    
Proceeds from shares issued in lieu of cash distributions     —       15    
Cost of shares redeemed     (19,715 )     (12,786 )  
Net increase (decrease) in net assets from Investor Class Shares transactions     (18,466 )     3,562    
Net increase (decrease) in net assets from capital share transactions     (24,094 )     7,938    
Total increase (decrease) in net assets     (22,651 )     4,891    
Net assets:  
Beginning of period     29,099       24,208    
End of period   $ 6,448     $ 29,099    
Undistributed net investment income (distributions in excess of net investment income)   $ 20     $ 6    
Shares issued and redeemed:  
Institutional Class Shares  
Issued     69       579    
Issued in lieu of cash distributions     —       —    
Redeemed     (597 )     (25 )  
Net increase (decrease) in Institutional Class Shares     (528 )     554    
Investor Class Shares  
Issued     124       1,861    
Issued in lieu of cash distributions     —       2    
Redeemed     (1,976 )     (1,554 )  
Net increase (decrease) in Investor Class Shares     (1,852 )     309    
Net increase (decrease) in share transactions     (2,380 )     863    

 

(1)  Commencement of operations.

Amounts designated as "—" are either not applicable, $0 or have been rounded to $0.

The accompanying notes are an integral part of the financial statements.

TURNER FUNDS 2010 ANNUAL REPORT 65


FINANCIAL STATEMENTS

Statement of cash flows (000)

    Turner
Spectrum
Fund		  
    year ended
9/30/10		  
Cash flows from operating activities:  
Net decrease in net assets resulting from operations   $ (1,983 )  
Adjustments to reconcile net decrease in net assets resulting
from operations to net cash used in operating activities		  
Purchases of long-term portfolio investments     (1,405,515 )  
Proceeds from sales of long-term portfolio investments     1,252,874    
Purchases of short-term portfolio investments     (38,330 )  
Proceeds from sales of short-term investments     6,287    
Payments to cover securities sold short     (1,039,708 )  
Proceeds from securities sold short     1,143,568    
Realized gain on written option contracts     (247 )  
Realized losses from securities sold and securities sold short     6,861    
Premiums received from written option contracts     1,525    
Premiums paid to closed option contracts     (1,039 )  
Change in unrealized appreciation on investments     (7,804 )  
Change in unrealized depreciation on written option contracts     56    
Change in unrealized depreciation on securities sold short     1,567    
Increase in deposits with brokers for securities sold short     (152,845 )  
Increase in receivable for investment securities sold     (28,223 )  
Decrease in receivable from investment adviser     17    
Increase in prepaid expenses     (63 )  
Decrease in unrealized appreciation on spot foreign currency contracts     38    
Increase in receivable for dividend income     (60 )  
Increase in reclaim receivable     (1 )  
Increase in payable for investment securities purchased     36,753    
Increase in broker fees and charges on short sales payable     66    
Increase in payable due to shareholder servicing     21    
Increase in payable due to distributor     4    
Decrease in payable due to administrator     (1 )  
Increase in dividends payable on securities sold short     52    
Decrease in unrealized depreciation on spot foreign currency contracts     (38 )  
Increase in other accrued expenses     32    
Net cash used in operating activities     (226,136 )  
Cash flows from financing activities:  
Proceeds from shares issued     250,726    
Cost of shares redeemed     (24,484 )  
Distributions from capital gains     (8 )  
Net cash provided by financing activities     226,234    
Net increase in cash     98    
Cash overdraft — beginning of year     (98 )  
Cash — end of year   $ —    
Non-cash
Capital shares sold receivable		   $ (1,650 )  
Capital shares redeemed payable     93    
Reinvestments of distributions     (134 )  

 

The accompanying notes are an integral part of the financial statements.

66 TURNER FUNDS 2010 ANNUAL REPORT



THIS PAGE WAS INTENTIONALLY LEFT BLANK

TURNER FUNDS 2010 ANNUAL REPORT 67


FINANCIAL STATEMENTS

Financial highlights

For a share outstanding throughout each period

    Net asset
value,
beginning
of period		   Net
investment
income
(loss)		   Realized and
unrealized
gains (losses)
on investments		   Total
from
investment
operations		   Dividends
from net
investment
income		   Distributions
from
 capital
gains		   Total
dividends and
distributions		   Net asset
value, end
of period		  
Turner Spectrum Fund — Institutional Class Shares      
  2010     $ 10.81       (0.13 ) (1)     0.21 (5)      0.08       —       (0.07 )     (0.07 )   $ 10.82    
  2009 (3)    $ 10.00       (0.07 ) (1)     0.88       0.81       —       —       —     $ 10.81    
Turner Spectrum Fund — Investor Class Shares      
  2010     $ 10.80       (0.16 ) (1)     0.21 (5)      0.05       —       (0.07 )     (0.07 )   $ 10.78    
  2009 (3)    $ 10.00       (0.09 ) (1)     0.89       0.80       —       —       —     $ 10.80    
Turner Spectrum Fund — Class C Shares      
  2010     $ 10.80       (0.24 ) (1)     0.23 (5)      (0.01 )     —       (0.07 )     (0.07 )   $ 10.72    
  2009 (4)    $ 9.98       (0.07 ) (1)     0.89       0.82       —       —       —     $ 10.80    
Turner Concentrated Growth Fund — Investor Class Shares      
  2010     $ 6.16       (0.07 ) (1)     0.56       0.49       (0.02 )     —       (0.02 )   $ 6.63    
  2009     $ 6.35       0.02 (1)      (0.21 )     (0.19 )     —       —       —     $ 6.16    
  2008     $ 10.12       (0.07 ) (1)     (3.70 )     (3.77 )     —       —       —     $ 6.35    
  2007     $ 7.60       (0.05 ) (1)     2.57       2.52       —       —       —     $ 10.12    
  2006     $ 7.10       (0.08 ) (1)     0.58       0.50       —       —       —     $ 7.60    
Turner Core Growth Fund — Institutional Class Shares      
  2010     $ 9.93       0.02 (1)      0.65       0.67       (0.04 )     —       (0.04 )   $ 10.56    
  2009     $ 10.41       0.05 (1)      (0.48 )     (0.43 )     (0.05 )     —       (0.05 )   $ 9.93    
  2008     $ 14.39       0.06 (1)      (4.01 )     (3.95 )     (0.03 )     —       (0.03 )   $ 10.41    
  2007     $ 11.65       0.02       2.77       2.79       (0.05 )     —       (0.05 )   $ 14.39    
  2006     $ 10.93       0.06       0.69       0.75       (0.03 )     —       (0.03 )   $ 11.65    
Turner Core Growth Fund — Investor Class Shares      
  2010     $ 9.87       — * (1)     0.64       0.64       (0.02 )     —       (0.02 )   $ 10.49    
  2009     $ 10.34       0.03 (1)      (0.47 )     (0.44 )     (0.03 )     —       (0.03 )   $ 9.87    
  2008     $ 14.33       0.02 (1)      (3.99 )     (3.97 )     (0.02 )     —       (0.02 )   $ 10.34    
  2007     $ 11.61       0.02       2.73       2.75       (0.03 )     —       (0.03 )   $ 14.33    
  2006     $ 10.93       0.07       0.64       0.71       (0.03 )     —       (0.03 )   $ 11.61    
Turner Emerging Growth Fund — Institutional Class Shares      
  2010     $ 37.78       (0.31 ) (1)     5.04       4.73       —       —       —     $ 42.51    
  2009 (2)    $ 28.45       (0.12 ) (1)     9.45 (5)      9.33       —       —       —     $ 37.78    
Turner Emerging Growth Fund — Investor Class Shares      
  2010     $ 37.71       (0.41 ) (1)     5.02       4.61       —       —       —     $ 42.32    
  2009     $ 46.42       (0.22 ) (1)     (7.31 )     (7.53 )     —       (1.18 )     (1.18 )   $ 37.71    
  2008     $ 64.06       (0.35 ) (1)     (8.54 )     (8.89 )     (0.25 )     (8.50 )     (8.75 )   $ 46.42    
  2007     $ 55.97       (0.30 ) (1)     13.61       13.31       —       (5.22 )     (5.22 )   $ 64.06    
  2006     $ 56.46       (0.32 ) (1)     3.02       2.70       —       (3.19 )     (3.19 )   $ 55.97    
Turner Large Cap Growth Fund — Institutional Class Shares      
  2010     $ 4.41       0.01 (1)      0.43       0.44       (0.01 )     —       (0.01 )   $ 4.84    
  2009     $ 4.59       0.03 (1)      (0.20 ) (5)     (0.17 )     (0.01 )     —       (0.01 )   $ 4.41    
  2008     $ 6.78       0.01 (1)      (2.19 )     (2.18 )     (0.01 )     —       (0.01 )   $ 4.59    
  2007     $ 5.58       0.01 (1)      1.21       1.22       (0.02 )     —       (0.02 )   $ 6.78    
  2006     $ 5.41       0.01 (1)      0.17       0.18       (0.01 )     —       (0.01 )   $ 5.58    

 

68 TURNER FUNDS 2010 ANNUAL REPORT


    Total
return		   Net
assets end
of period
(000)		   Ratio of
net expenses
to average
net assets††		   Ratio of
net expenses
to average
net assets		   Ratio of total
expenses
to average
net assets		   Ratio of net
investment
income (loss)
to average
net assets††		   Portfolio
turnover
rate†††		  
Turner Spectrum Fund — Institutional Class Shares  
  2010       0.77 %   $ 179,526       1.91 % (7)     1.91 % (7)     2.85 %     (1.23 )%     1,808 %  
  2009 (3)      8.10 %†   $ 8,681       2.44 % (6)     2.44 % (6)     5.63 %     (1.78 )%     663 %  
Turner Spectrum Fund — Investor Class Shares  
  2010       0.49 %   $ 52,361       2.17 % (7)     2.17 % (7)     3.12 %     (1.52 )%     1,808 %  
  2009 (3)      8.00 %†   $ 4,567       2.71 % (6)     2.71 % (6)     5.84 %     (2.09 )%     663 %  
Turner Spectrum Fund — Class C Shares  
  2010       (0.07 )%   $ 7,169       2.92 % (7)     2.92 % (7)     3.82 %     (2.19 )%     1,808 %  
  2009 (4)      8.22 %†   $ —       2.35 % (6)     2.35 % (6)     5.28 %     (3.12 )%     663 %  
Turner Concentrated Growth Fund — Investor Class Shares  
  2010       7.94 %   $ 42,924       1.51 %     1.51 %     1.94 %     (1.14 )%     215 %  
  2009       (2.99 )%   $ 39,973       0.82 %     0.82 %     1.34 %     0.38 %     208 %  
  2008       (37.25 )%   $ 42,581       1.53 %     1.54 %     1.91 %     (0.83 )%     348 %  
  2007       33.16 %   $ 61,401       1.11 %     1.11 %     1.46 %     (0.57 )%     220 %  
  2006       7.04 %   $ 38,180       1.59 %     1.59 %     1.79 %     (1.01 )%     251 %  
Turner Core Growth Fund — Institutional Class Shares  
  2010       6.76 %   $ 377,650       0.69 %     0.69 %     0.87 %     0.20 %     178 %  
  2009       (3.97 )%   $ 381,277       0.69 %     0.69 %     0.92 %     0.65 %     126 %  
  2008       (27.53 )%   $ 360,083       0.69 %     0.69 %     0.90 %     0.42 %     200 %  
  2007       24.00 %   $ 237,778       0.68 %     0.68 %     1.06 %     0.42 %     103 %  
  2006       6.91 %   $ 71,935       0.59 %     0.59 %     1.20 %     0.77 %     124 %  
Turner Core Growth Fund — Investor Class Shares  
  2010       6.51 %   $ 163,750       0.94 %     0.94 %     1.12 %     (0.05 )%     178 %  
  2009       (4.21 )%   $ 252,916       0.94 %     0.94 %     1.17 %     0.41 %     126 %  
  2008       (27.76 )%   $ 260,692       0.94 %     0.94 %     1.15 %     0.15 %     200 %  
  2007       23.68 %   $ 37,541       0.94 %     0.94 %     1.31 %     0.15 %     103 %  
  2006       6.52 %   $ 23,418       0.94 %     0.94 %     1.43 %     0.23 %     124 %  
Turner Emerging Growth Fund — Institutional Class Shares  
  2010       12.52 %   $ 276,445       1.15 %     1.15 %     1.28 %     (0.77 )%     96 %  
  2009 (2)      32.79 %†   $ 243,790       1.15 %     1.15 %     1.33 %     (0.54 )%     78 %  
Turner Emerging Growth Fund — Investor Class Shares  
  2010       12.22 %   $ 176,823       1.40 %     1.40 %     1.53 %     (1.02 )%     96 %  
  2009       (15.58 )%   $ 188,812       1.40 %     1.40 %     1.56 %     (0.71 )%     78 %  
  2008       (16.08 )%   $ 529,578       1.40 %     1.40 %     1.49 %     (0.66 )%     71 %  
  2007       25.08 %   $ 638,037       1.40 %     1.40 %     1.48 %     (0.50 )%     88 %  
  2006       4.95 %   $ 565,227       1.40 %     1.40 %     1.44 %     (0.57 )%     78 %  
Turner Large Cap Growth Fund — Institutional Class Shares  
  2010       10.00 %   $ 118,164       0.69 %     0.69 %     0.99 %     0.19 %     149 %  
  2009       (3.52 )%   $ 94,664       0.69 %     0.69 %     1.21 %     0.75 %     107 %  
  2008       (32.16 )%   $ 28,975       0.69 %     0.69 %     1.09 %     0.21 %     213 %  
  2007       21.86 %   $ 37,814       0.70 %     0.70 %     1.23 %     0.23 %     119 %  
  2006       3.40 %   $ 19,510       0.75 %     0.75 %     1.16 %     0.26 %     194 %  

 

*  Amount represents less than $0.01 per share.
†  Total return is for the period indicated and has not been annualized.
††  Inclusive of fees paid indirectly, waivers and/or reimbursements.
†††  Excludes effect of in-kind transfers and mergers, as applicable.
(1)  Based on average shares outstanding.
(2)  Commenced operations on February 1, 2009. All ratios for the period have been annualized.
(3)  Commenced operations on May 7, 2009. All ratios for the period have been annualized.
(4)  Commenced operations on July 14, 2009. All ratios for the period have been annualized.
(5)  The amount shown for a share outstanding throughout the period does not accord with the aggregate net losses on investments for the period because of the sales and repurchases of fund shares in relation to fluctuating market value of the investments of the Fund.
(6)  Dividend expense totaled 0.70% of average net assets for the period ended September 30, 2009. If dividend expense had not been contractually waived, the ratios of net expenses to average net assets would have been 3.14%, 3.41% and 3.05% for the Institutional, Investor and Class C Shares, respectively. If broker fees and charges on short sales had not been included, the ratios of net expenses to average net assets would have been 1.94%, 2.20% and 1.95% for the Institutional, Investor and Class C Shares, respectively.
(7)  Dividend expense totaled 0.45% of average net assets for the year ended September 30, 2010, 0.42% of which was waived. Broker fees and charges on short sales totaled 0.38% of average net assets for the year ended September 30, 2010, 0.37% of which was waived beginning on January 13, 2010. If dividend expense and broker fees and charges on short sales had not been contractually waived, the ratios of net expenses to average net assets would have been 2.70%, 2.96%, and 3.71% for the Institutional, Investor and Class C Shares, respectively.
Amounts designated as "—" are either $0, not applicable or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.

TURNER FUNDS 2010 ANNUAL REPORT 69


FINANCIAL STATEMENTS

Financial highlights

For a share outstanding throughout each period

    Net asset
value,
beginning
of period		   Net
investment
income
(loss)		   Realized and
unrealized
gains (losses)
on investments		   Total
from
investment
operations		   Dividends
from net
investment
income		   Distributions
from
 capital
gains		   Total
dividends and
distributions		   Net asset
value, end
of period		  
Turner Large Cap Growth Fund — Investor Class Shares      
  2010     $ 4.39       — * (1)     0.42       0.42       — *     —       — *   $ 4.81    
  2009     $ 4.57       0.02 (1)      (0.19 ) (3)     (0.17 )     (0.01 )     —       (0.01 )   $ 4.39    
  2008     $ 6.77       — * (1)     (2.19 )     (2.19 )     (0.01 )     —       (0.01 )   $ 4.57    
  2007 (4)    $ 5.92       0.01 (1)      0.84       0.85       —       —       —     $ 6.77    
Turner Midcap Growth Fund — Institutional Class Shares      
  2010     $ 26.12       (0.08 ) (1)     3.86       3.78       —       —       —     $ 29.90    
  2009     $ 26.20       (0.01 ) (1)     (0.07 )     (0.08 )     —       —       —     $ 26.12    
  2008 (2)    $ 34.67       (0.01 ) (1)     (8.46 )     (8.47 )     —       —       —     $ 26.20    
Turner Midcap Growth Fund — Investor Class Shares      
  2010     $ 26.03       (0.15 ) (1)     3.85       3.70       —       —       —     $ 29.73    
  2009     $ 26.18       (0.06 ) (1)     (0.09 )     (0.15 )     —       —       —     $ 26.03    
  2008     $ 35.71       (0.14 ) (1)     (9.39 )     (9.53 )     —       —       —     $ 26.18    
  2007     $ 27.63       (0.20 ) (1)     8.28       8.08       —       —       —     $ 35.71    
  2006     $ 26.39       (0.08 ) (1)     1.32       1.24       —       —       —     $ 27.63    
Turner Midcap Growth Fund — Retirement Class Shares      
  2010     $ 25.20       (0.21 ) (1)     3.72       3.51       —       —       —     $ 28.71    
  2009     $ 25.40       (0.11 ) (1)     (0.09 )     (0.20 )     —       —       —     $ 25.20    
  2008     $ 34.74       (0.22 ) (1)     (9.12 )     (9.34 )     —       —       —     $ 25.40    
  2007     $ 26.96       (0.30 ) (1)     8.08       7.78       —       —       —     $ 34.74    
  2006     $ 25.89       (0.23 ) (1)     1.30       1.07       —       —       —     $ 26.96    
Turner New Enterprise Fund — Investor Class Shares      
  2010     $ 5.95       (0.09 ) (1)     1.18       1.09       (0.01 )     —       (0.01 )   $ 7.03    
  2009     $ 5.60       — * (1)     0.35       0.35       —       —       —     $ 5.95    
  2008     $ 8.72       (0.07 ) (1)     (3.05 )     (3.12 )     —       —       —     $ 5.60    
  2007     $ 6.26       (0.07 ) (1)     2.53       2.46       —       —       —     $ 8.72    
  2006     $ 5.86       (0.07 ) (1)     0.47 (3)      0.40       —       —       —     $ 6.26    
Turner Small Cap Growth Fund — Investor Class Shares      
  2010     $ 25.17       (0.20 ) (1)     4.00       3.80       —       —       —     $ 28.97    
  2009     $ 26.45       (0.07 ) (1)     (1.21 )     (1.28 )     —       —       —     $ 25.17    
  2008     $ 32.98       (0.15 ) (1)     (6.38 )     (6.53 )     —       —       —     $ 26.45    
  2007     $ 26.17       (0.20 ) (1)     7.01       6.81       —       —       —     $ 32.98    
  2006     $ 24.68       (0.21 ) (1)     1.70       1.49       —       —       —     $ 26.17    
Turner Quantitative Broad Market Equity Fund — Institutional Class Shares      
  2010     $ 8.31       0.10 (1)      0.59 (3)      0.69       (0.09 )     —       (0.09 )   $ 8.91    
  2009     $ 8.73       0.11 (1)      (0.47 )     (0.36 )     (0.06 )     —       (0.06 )   $ 8.31    
  2008 (5)    $ 10.00       0.04 (1)      (1.31 )     (1.27 )     —       —       —     $ 8.73    
Turner Quantitative Broad Market Equity Fund — Investor Class Shares      
  2010     $ 8.30       0.08 (1)      0.58 (3)      0.66       (0.08 )     —       (0.08 )   $ 8.88    
  2009     $ 8.72       0.08 (1)      (0.45 )     (0.37 )     (0.05 )     —       (0.05 )   $ 8.30    
  2008 (5)    $ 10.00       0.03 (1)      (1.31 )     (1.28 )     —       —       —     $ 8.72    

 

70 TURNER FUNDS 2010 ANNUAL REPORT


    Total
return		   Net
assets end
of period
(000)		   Ratio of
net expenses
to average
net assets††		   Ratio of
net expenses
to average
net assets		   Ratio of total
expenses
to average
net assets		   Ratio of net
investment
income (loss)
to average
net assets††		   Portfolio
turnover
rate†††		  
Turner Large Cap Growth Fund — Investor Class Shares  
  2010       9.58 %   $ 1,357       0.94 %     0.94 %     1.24 %     (0.07 )%     149 %  
  2009       (3.73 )%   $ 1,467       0.94 %     0.94 %     1.47 %     0.58 %     107 %  
  2008       (32.40 )%   $ 662       0.94 %     0.94 %     1.36 %     (0.05 )%     213 %  
  2007 (4)      14.36 %†   $ 87       0.94 %     0.94 %     1.51 %     0.13 %     119 %  
Turner Midcap Growth Fund — Institutional Class Shares  
  2010       14.47 %   $ 164,993       0.93 %     0.93 %     1.03 %     (0.29 )%     90 %  
  2009       (0.31 )%   $ 136,069       0.93 %     0.93 %     1.08 %     (0.05 )%     120 %  
  2008 (2)      (24.43 )%†   $ 137,451       0.93 %     0.94 %     1.03 %     (0.09 )%     157 %  
Turner Midcap Growth Fund — Investor Class Shares  
  2010       14.21 %   $ 751,124       1.18 %     1.18 %     1.28 %     (0.54 )%     90 %  
  2009       (0.57 )%   $ 859,640       1.18 %     1.18 %     1.33 %     (0.29 )%     120 %  
  2008       (26.69 )%   $ 994,545       1.18 %     1.18 %     1.25 %     (0.44 )%     157 %  
  2007       29.24 %   $ 1,340,172       1.18 %     1.18 %     1.24 %     (0.63 )%     155 %  
  2006       4.70 %   $ 1,113,201       1.18 %     1.18 %     1.18 %     (0.30 )%     135 %  
Turner Midcap Growth Fund — Retirement Class Shares  
  2010       13.93 %   $ 4,578       1.43 %     1.43 %     1.53 %     (0.79 )%     90 %  
  2009       (0.79 )%   $ 3,892       1.43 %     1.43 %     1.58 %     (0.55 )%     120 %  
  2008       (26.89 )%   $ 5,784       1.43 %     1.43 %     1.50 %     (0.69 )%     157 %  
  2007       28.86 %   $ 6,212       1.49 %     1.49 %     1.56 %     (0.98 )%     155 %  
  2006       4.13 %   $ 2,444       1.68 %     1.68 %     1.68 %     (0.83 )%     135 %  
Turner New Enterprise Fund — Investor Class Shares  
  2010       18.25 %   $ 23,227       1.64 %     1.64 %     2.15 %     (1.38 )%     115 %  
  2009       6.25 %   $ 26,324       0.62 %     0.63 %     1.23 %     0.09 %     220 %  
  2008       (35.78 )%   $ 32,759       1.52 %     1.54 %     1.90 %     (0.89 )%     323 %  
  2007       39.30 %   $ 70,145       1.27 %     1.27 %     1.73 %     (0.98 )%     173 %  
  2006       6.83 %   $ 24,040       1.61 %     1.61 %     2.06 %     (1.02 )%     235 %  
Turner Small Cap Growth Fund — Investor Class Shares  
  2010       15.10 %   $ 274,925       1.25 %     1.25 %     1.52 %     (0.74 )%     89 %  
  2009       (4.84 )%   $ 250,860       1.25 %     1.25 %     1.58 %     (0.36 )%     113 %  
  2008       (19.80 )%   $ 249,434       1.25 %     1.26 %     1.51 %     (0.48 )%     141 %  
  2007       26.02 %   $ 317,930       1.25 %     1.25 %     1.48 %     (0.65 )%     134 %  
  2006       6.04 %   $ 248,271       1.25 %     1.25 %     1.42 %     (0.79 )%     154 %  
Turner Quantitative Broad Market Equity Fund — Institutional Class Shares  
  2010       8.30 %   $ 10,952       0.64 %     0.64 %     2.28 %     1.13 %     164 %  
  2009       (3.95 )%   $ 521       0.64 %     0.65 %     20.30 %     1.56 %     324 %  
  2008 (5)      (12.70 )%†   $ 542       0.64 %     0.66 %     17.95 %     1.60 %     118 %  
Turner Quantitative Broad Market Equity Fund — Investor Class Shares  
  2010       7.98 %   $ 20       0.89 %     0.89 %     6.72 %     0.88 %     164 %  
  2009       (4.09 )%   $ 10       0.89 %     0.90 %     20.60 %     1.15 %     324 %  
  2008 (5)      (12.80 )%†   $ 2       0.89 %     0.91 %     16.99 %     1.28 %     118 %  

 

*  Amount represents less than $0.01 per share.
†  Total return is for the period indicated and has not been annualized.
††  Inclusive of fees paid indirectly, waivers and/or reimbursements.
†††  Excludes effect of in-kind transfers and mergers, as applicable.
(1)  Based on average shares outstanding.
(2)  Commenced operations on June 16, 2008. All ratios for the period have been annualized.
(3)  The amount shown for a share outstanding throughout the period does not accord with the aggregate net losses on investments for the period because of the sales and repurchases of fund shares in relation to fluctuating market value of the investments of the Fund.
(4)  Commenced operations on January 31, 2007. All ratios for the period have been annualized.
(5)  Commenced operations on June 30, 2008. All ratios for the period have been annualized.
Amounts designated as "—" are either $0, not applicable or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.

TURNER FUNDS 2010 ANNUAL REPORT 71


FINANCIAL STATEMENTS

Financial highlights

For a share outstanding throughout each period

    Net asset
value,
beginning
of period		   Net
investment
income
(loss)		   Realized and
unrealized
gains (losses)
on investments		   Total
from
investment
operations		   Dividends
from net
investment
income		   Distributions
from
 capital
gains		   Total
dividends and
distributions		   Net asset
value, end
of period		  
Turner Quantitative Large Cap Value Fund — Institutional Class Shares      
  2010     $ 7.45       0.10 (1)      0.43       0.53       (0.12 )     —       (0.12 )   $ 7.86    
  2009     $ 8.97       0.14 (1)      (1.49 )     (1.35 )     (0.17 )     —       (0.17 )   $ 7.45    
  2008     $ 12.86       0.16 (1)      (2.23 )     (2.07 )     (0.12 )     (1.70 )     (1.82 )   $ 8.97    
  2007     $ 11.44       0.14 (1)      1.65       1.79       (0.15 )     (0.22 )     (0.37 )   $ 12.86    
  2006 (5)    $ 10.00       0.16 (1)      1.33       1.49       (0.05 )     —       (0.05 )   $ 11.44    
Turner Quantitative Large Cap Value Fund — Investor Class Shares      
  2010     $ 7.44       0.08 (1)      0.44       0.52       (0.11 )     —       (0.11 )   $ 7.85    
  2009 (6)    $ 7.50       0.07 (1)      0.04 (2)      0.11       (0.17 )     —       (0.17 )   $ 7.44    
Turner Global Opportunities Fund — Institutional Class Shares      
  2010 (7)    $ 10.00       (0.01 ) (1)     1.53       1.52       —       —       —     $ 11.52    
Turner Global Opportunities Fund — Investor Class Shares      
  2010 (7)    $ 10.00       (0.03 ) (1)     1.53       1.50       —       —       —     $ 11.50    
Turner International Core Growth Fund — Institutional Class Shares      
  2010     $ 8.24       0.04 (1)      1.26       1.30       (0.13 )     —       (0.13 )   $ 9.41    
  2009     $ 8.34       0.08 (1)      (0.07 ) (2)     0.01       (0.11 )     —       (0.11 )   $ 8.24    
  2008     $ 12.21       0.12 (1)      (3.87 )     (3.75 )     (0.02 )     (0.10 )     (0.12 )   $ 8.34    
  2007 (3)    $ 10.00       0.07 (1)      2.14       2.21       —       —       —     $ 12.21    
Turner International Core Growth Fund — Investor Class Shares      
  2010     $ 8.24       0.05 (1)      1.23       1.28       (0.13 )     —       (0.13 )   $ 9.39    
  2009 (6)    $ 6.27       0.07 (1)      2.01       2.08       (0.11 )     —       (0.11 )   $ 8.24    
Turner Small Cap Equity Fund — Institutional Class Shares      
  2010     $ 9.83       0.05 (1)      1.21       1.26       —       —       —     $ 11.09    
  2009 (4)    $ 7.73       — * (1)     2.10 (2)      2.10       —       —       —     $ 9.83    
Turner Small Cap Equity Fund — Investor Class Shares      
  2010     $ 9.82       0.01 (1)      1.22       1.23       —       —       —     $ 11.05    
  2009     $ 11.53       — * (1)     (1.70 )     (1.70 )     —       (0.01 )     (0.01 )   $ 9.82    
  2008     $ 17.31       (0.06 ) (1)     (2.95 )     (3.01 )     —       (2.77 )     (2.77 )   $ 11.53    
  2007     $ 16.94       (0.12 ) (1)     1.79       1.67       —       (1.30 )     (1.30 )   $ 17.31    
  2006     $ 16.06       (0.07 ) (1)     0.95       0.88       —       —       —     $ 16.94    

 

72 TURNER FUNDS 2010 ANNUAL REPORT


    Total
return		   Net
assets end
of period
(000)		   Ratio of
net expenses
to average
net assets††		   Ratio of
net expenses
to average
net assets		   Ratio of total
expenses
to average
net assets		   Ratio of net
investment
income (loss)
to average
net assets††		   Portfolio
turnover
rate†††		  
Turner Quantitative Large Cap Value Fund — Institutional Class Shares  
  2010       7.24 %   $ 825       0.69 %     0.69 %     12.61 %     1.31 %     201 %  
  2009       (14.88 )%   $ 772       0.69 %     0.70 %     14.51 %     2.10 %     241 %  
  2008       (18.76 )%   $ 763       0.69 %     0.72 %     6.13 %     1.54 %     181 %  
  2007       15.91 %   $ 835       0.65 %     0.65 %     5.25 %     1.15 %     271 %  
  2006 (5)      14.92 %†   $ 580       0.59 %     0.59 %     7.71 %     1.52 %     252 %  
Turner Quantitative Large Cap Value Fund — Investor Class Shares  
  2010       7.07 %   $ 5       0.90 %     0.90 %     12.82 %     1.10 %     201 %  
  2009 (6)      1.67 %†   $ 4       0.89 %     0.90 %     15.93 %     1.18 %     241 %  
Turner Global Opportunities Fund — Institutional Class Shares  
  2010 (7)      15.20 %†   $ 1,153       1.10 %     1.10 %     8.33 %     (0.31 )%     37 %  
Turner Global Opportunities Fund — Investor Class Shares  
  2010 (7)      15.00 %†   $ —       1.56 %     1.56 %     8.92 %     (0.77 )%     37 %  
Turner International Core Growth Fund — Institutional Class Shares  
  2010       15.88 %   $ 5,019       1.10 %     1.10 %     3.93 %     0.51 %     120 %  
  2009       0.71 %   $ 3,848       1.10 %     1.10 %     5.24 %     1.31 %     139 %  
  2008       (31.04 )%   $ 3,335       1.10 %     1.11 %     3.05 %     1.10 %     245 %  
  2007 (3)      22.10 %†   $ 2,409       1.10 %     1.10 %     4.63 %     0.99 %     111 %  
Turner International Core Growth Fund — Investor Class Shares  
  2010       15.61 %   $ 110       1.35 %     1.35 %     4.15 %     0.61 %     120 %  
  2009 (6)      33.95 %†   $ —       1.29 %     1.29 %     5.59 %     1.14 %     139 %  
Turner Small Cap Equity Fund — Institutional Class Shares  
  2010       12.82 %   $ 291       1.20 %     1.20 %     1.79 %     0.52 %     189 %  
  2009 (4)      27.17 %†   $ 5,439       1.20 %     1.20 %     1.59 %     0.05 %     280 %  
Turner Small Cap Equity Fund — Investor Class Shares  
  2010       12.53 %   $ 6,157       1.45 %     1.45 %     2.04 %     0.07 %     189 %  
  2009       (14.78 )%   $ 23,660       1.45 %     1.45 %     1.89 %     0.03 %     280 %  
  2008       (20.20 )%   $ 24,208       1.45 %     1.45 %     1.62 %     (0.48 )%     168 %  
  2007       10.14 %   $ 65,292       1.36 %     1.36 %     1.59 %     (0.70 )%     157 %  
  2006       5.48 %   $ 81,340       1.24 %     1.24 %     1.70 %     (0.39 )%     143 %  

 

*  Amount represents less than $0.01 per share.
†  Total return is for the period indicated and has not been annualized.
††  Inclusive of fees paid indirectly, waivers and/or reimbursements.
†††  Excludes effect of in-kind transfers and mergers, as applicable.
(1)  Based on average shares outstanding.
(2)  The amount shown for a share outstanding throughout the period does not accord with the aggregate net gains or losses on investments for the period because of the sales and repurchases of fund shares in relation to fluctuating market value of the investments of the Fund.
(3)  Commenced operations on January 31, 2007. All ratios for the period have been annualized.
(4)  Commenced operations on February 1, 2009. All ratios for the period have been annualized.
(5)  Commenced operations on October 10, 2005. All ratios for the period have been annualized.
(6)  Commenced operations on October 31, 2008. All ratios for the period have been annualized.
(7)  Commenced operations on May 7, 2010. All ratios for the period have been annualized.
Amounts designated as "—" are either $0, not applicable or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.

TURNER FUNDS 2010 ANNUAL REPORT 73



NOTES TO FINANCIAL STATEMENTS

Notes to financial statements

September 30, 2010

1. Organization:

Turner Funds (the "Trust"), a Massachusetts business trust, is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company with thirteen active portfolios as of September 30, 2010. The financial statements included herein are those of the Turner Spectrum Fund (the "Spectrum Fund"), the Turner Concentrated Growth Fund (the "Concentrated Growth Fund"), the Turner Core Growth Fund (the "Core Growth Fund"), the Turner Emerging Growth Fund (the "Emerging Growth Fund"), the Turner Large Cap Growth Fund (the "Large Cap Growth Fund"), the Turner Midcap Growth Fund (the "Midcap Growth Fund"), the Turner New Enterprise Fund (the "New Enterprise Fund"), the Turner Small Cap Growth Fund (the "Small Cap Growth Fund"), the Turner Quantitative Broad Market Equity Fund (the "Quantitative Broad Market Equity Fund"), the Turner Quantitative Large Cap Value Fund (the "Quantitative Large Cap Value Fund"), the Turner Global Opportunities Fund (the "Global Opportunities Fund"), the Turner International Core Growth Fund (the "International Core Growth Fund"), and the Turner Small Cap Equity Fund (the "Small Cap Equity Fund"), each a "Fund" and collectively the "Funds."

Each Fund is registered as a diversified portfolio of the Trust with the exception of the Large Cap Growth Fund and the Concentrated Growth Fund, each of which are non-diversified.

The Funds are registered to offer different classes of shares: Institutional Class Shares, Investor Class Shares, Retirement Class Shares, Class C Shares, or a combination of the four. The assets of each Fund are segregated, and a shareholder's interest is limited to the Fund in which shares are held. The Funds' prospectuses provide a description of each Fund's investment objectives, policies, and strategies along with information on the classes of shares currently being offered.

The Emerging Growth, Small Cap Growth and Small Cap Equity Funds were closed to new investors on March 7, 2000, July 31, 2004 and May 1, 2005, respectively. Effective March 1, 2008 and August 24, 2009, the Small Cap Equity Fund and Small Cap Growth Fund were reopened to new investors and existing shareholders, respectively.

2. Significant accounting policies:

The following is a summary of the significant accounting policies followed by the Funds.

Use of estimates—The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.

Security valuation—Securities listed on a securities exchange, market or automated quotation system for which quotations are readily available (except for securities traded on NASDAQ) are valued at the last quoted sale price on the primary exchange or market (foreign or domestic) on which they are traded, or, if there is no such reported sale, at the most recent quoted bid price for long positions and the most recent quoted ask price for short positions. For securities traded on NASDAQ, the NASDAQ Official Closing Price will be used. The prices for foreign securities are reported in local currency and converted to U.S. dollars using currency exchange rates. Prices for most securities held in the Funds are provided daily by recognized independent pricing agents. If a security price cannot be obtained from an independent, third-party pricing agent, the Funds seek to obtain a bid price or ask price, as applicable, from at least one independent broker.

Securities for which market prices are not "readily available" are valued in accordance with Fair Value Procedures established by the Board of Trustees (the "Board"). The Funds' Fair Value Procedures are implemented through a Fair Value Committee (the "Committee") designated by the Board. Some of the more common reasons that may necessitate that a security be valued using Fair Value Procedures include: the security's trading has been halted or suspended; the security has been delisted from a national exchange; the security's primary trading market is temporarily closed at a time when under normal conditions it would be open; the security has not been traded for an extended period of time; the security's primary pricing source is not able or willing to provide a price; or trading of the security is subject to local government-imposed restrictions. When a security is valued in accordance with the Fair Value Procedures, the Committee will determine the value after taking into consideration relevant information reasonably available to the Committee.

For securities that principally trade on a foreign market or exchange, a significant gap in time can exist between the time of a particular security's last trade and the time at which a Fund calculates its net asset value. The closing prices of such securities may no longer reflect their market value at the time the Fund calculates net asset value if an event that could materially affect the value of those securities (a "Significant Event") has occurred between the time of the security's last close and the time that the Fund calculates net asset value. A Significant Event may relate to a single issuer or to an entire market sector. If the Adviser of a Fund becomes aware of a Significant Event that has occurred with

74 TURNER FUNDS 2010 ANNUAL REPORT


respect to a security or group of securities after the closing of the exchange or market on which the security or securities principally trade, but before the time at which the Fund calculates net asset value, it may request that a Committee meeting be called. In addition, the Fund's Administrator monitors price movements among certain selected indices, securities and/or baskets of securities that may be an indicator that the closing prices received earlier from foreign exchanges or markets may not reflect market value at the time the Fund calculates net asset value. If price movements in a monitored index or security exceed levels established by the Administrator and approved by the Committee, the Administrator notifies the Adviser for any Fund holding the relevant securities that such limits have been exceeded. In such event, the Adviser makes the determination whether a Committee meeting should be called based on the information provided.

The Global Opportunities Fund, International Core Growth Fund and Spectrum Fund use Interactive Data Pricing and Reference Data, Inc. ("Interactive Data") as a third party fair valuation vendor. Interactive Data provides a fair value for foreign securities in the Global Opportunities Fund, International Core Growth Fund and Spectrum Fund based on certain factors and methodologies (involving, generally, tracking valuation correlations between the U.S. market and each non-U.S. security) applied by Interactive Data in the event that there is a movement in the U.S. market that exceeds a specific threshold established by the Committee. The Committee establishes a "confidence interval" which is used to determine the level of correlation between the value of a foreign security and movements in the U.S. market before a particular security is fair valued when the threshold is exceeded. In the event that the threshold established by the Committee is exceeded on a specific day, the Global Opportunities Fund, International Core Growth Fund and Spectrum Fund value their non-U.S. securities that exceed the applicable "confidence interval" based upon the fair values provided by Interactive Data. In such event, it is not necessary to hold a Committee meeting. In the event that the Adviser believes that the fair values provided by Interactive Data are not reliable, the Adviser contacts the Funds' Administrator and may request that a meeting of the Committee be held.

If a local market in which the Funds own securities is closed for one or more days or a portion of a day, the Funds shall value all securities held in that corresponding currency based on the fair value prices provided by Interactive Data using the predetermined confidence interval discussed above.

In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, fair value is defined as the price that a fund would receive upon selling an investment in a timely transaction to an independent buyer in the principal or most advantageous market. The guidance established a three-tier heirarchy to maximize the use of the observable market data and minimize the use of unobservable inputs and to establish classification of the fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing an asset or liability. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

The three-tier hierarchy of inputs is summarized in the three broad Levels listed below:

Level 1 – quoted prices in active markets for identical investments

Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risks, etc.)

Level 3 – significant unobservable inputs (including a fund's own assumptions in determining the fair value of investments)

The valuation techniques used by the Funds to measure fair value in accordance with the guidance, during the year ended September 30, 2010 maximized the use of observable inputs and minimized the use of unobservable inputs. For the year ended September 30, 2010, there have been no significant changes to the Funds' fair valuation methodologies. Fair value measurement classifications are summarized in each Fund's Schedule of investments, Schedule of securities sold short or Schedule of open options written. Changes in valuation techniques may result in transfers in or out of an investment's assigned level within the hierarchy during the reporting period. For each Fund there were no significant transfers between the levels during the reporting period, based on the input levels assigned under the hierarchy at the beginning and end of the reporting period.

Security transactions and related income—Security transactions are accounted for on the date the security is purchased or sold (trade date). Dividend income is recognized on the ex-dividend date. Costs used in determining realized gains and losses on the sales of investment securities are those of the specific securities sold during the respective holding period.

TURNER FUNDS 2010 ANNUAL REPORT 75


NOTES TO FINANCIAL STATEMENTS

Securities sold short—As consistent with each Fund's investment objectives, the Funds may engage in short sales. Short sales are transactions under which a Fund sells a security it does not own. To complete such a transaction, the Fund must borrow the security to make delivery to the buyer. The Fund is then obligated to replace the security borrowed by purchasing the security at the market price at the time of the replacement. The price at such time may be more or less than the price at which the security was sold by the Fund. Until the security is replaced, the Fund is required to pay the lender amounts equal to any dividends that accrue during the period of the loan. Dividends are shown as an expense for financial reporting purposes. To borrow the security, the Fund also may be required to pay a fee, which is shown as an expense for financial reporting purposes. The proceeds of the short sale are retained by the broker, to the extent necessary to meet margin requirements, until the short position is closed out. A gain, limited to the price at which the Fund sold the security short, or a loss, unlimited in size, will be recognized upon the close of a short sale.

Until a Fund closes its short position or replaces the borrowed security, the Fund will: (a) maintain a segregated account containing cash or liquid securities at such a level that (i) the amount deposited in the account plus the amount deposited with the broker as collateral will equal the current value of the security sold short; and (ii) the amount deposited in the segregated account plus the amount deposited with the broker as collateral will not be less than the market value of the security at the time the security was sold short, or (b) otherwise cover the Fund's short positions. The Spectrum Fund is the only Fund that engaged in short sales during the year ended September 30, 2010.

Option transactions—As consistent with each Fund's investment objectives, the Funds may write covered call options as a means of increasing the yield on their portfolios and as a means of providing limited protection against decreases in their market value. The Funds may purchase put and call options to protect against a decline in the market value of the securities in their portfolio or to anticipate an increase in the market value of securities that the Funds may seek to purchase in the future. A put option gives the purchaser of the option the right to sell, and the writer of the option the obligation to buy, the underlying security at any time during the option period. A call option gives the purchaser of the option the right to buy, and the writer of the option the obligation to sell, the underlying security at any time during the option period. The premium paid to the writer is the consideration for undertaking the obligations under the option contract. The initial purchase (sale) of an option contract is an "opening transaction." In order to close out an option position, the Fund may enter into a "closing transaction," which is simply the sale (purchase) of an option contract on the same security with the same exercise price and expiration date as the option contract originally opened. If the Fund is unable to effect a closing purchase transaction with respect to an option it has written, it will not be able to sell the underlying security until the option expires or the Fund delivers the security upon exercise. When the Fund writes (sells) an option, an amount equal to the premium received by the Fund is included in the Statement of Assets and Liabilities as an asset and an equivalent liability. The amount of the liability is subsequently marked-to-market to reflect the current value of the option written. Option contracts are valued at the last quoted sales price. If there is no such reported sale on the valuation date, long positions are valued at the most recent bid price, and short positions are valued at the most recent ask price. When an option expires on its stipulated expiration date or the Fund enters into a closing purchase transaction, the Fund realizes a gain or loss if the cost of the closing purchase transaction differs from the premium received when the option was sold without regard to any unrealized gain or loss on the underlying security, and the liability related to such option is eliminated. When an option is exercised, the premium originally received decreases the cost basis of the security (or increases the proceeds on a sale of the security). Realized and unrealized gains and losses on written option transactions are shown on the Statement of Operations as net realized gain (loss) on written option contracts and net change in unrealized appreciation (depreciation) on written option contracts, respectively. Realized and unrealized gains and (losses) on purchased options in the Spectrum Fund for the year ended September 30, 2010 were $(607,223) and $(27,213), respectively. Realized and unrealized gains and (losses) on purchased options in the New Enterprise Fund for the year ended September 30, 2010 were $76,445 and $(8,250), respectively. These amounts are shown on the Statement of Operations as net realized gain (loss) from securities sold and net change in unrealized appreciation (depreciation) on investments, respectively.

Foreign currency translation—The books and records of the Spectrum Fund, Global Opportunities Fund and the International Core Growth Fund are maintained in U.S. dollars. Investment securities and other assets and liabilities denominated in a foreign currency are translated into U.S. dollars on the date of valuation. The Spectrum Fund, Global Opportunities Fund and the International Core Growth Fund do not isolate that portion of realized or unrealized gains and losses resulting from changes in the foreign exchange rate from fluctuations arising from changes in the market prices of the securities. These gains and losses are included in net realized and unrealized gains and losses on investments in the Statements of Operations. Net realized and unrealized gains and losses on foreign currency transactions represent net foreign exchange gains or losses from foreign currency exchange contracts, disposition of foreign currencies, currency gains or losses realized between trade and settlement dates on securities transactions and

76 TURNER FUNDS 2010 ANNUAL REPORT


the difference between the amount of the investment income and foreign withholding taxes recorded on the Spectrum Fund, Global Opportunities Fund and the International Core Growth Fund's books and the U.S. dollar equivalent amounts actually received or paid.

Expenses—Expenses that are specifically attributed to one of the Funds are charged to that Fund. Certain other expenses of the Funds are prorated among the Funds on the basis of relative daily net assets. Other common expenses of the Trust are allocated among the Funds on the basis of relative daily net assets.

Classes—Class specific expenses are borne by that class. Income, non-class specific expenses and realized/unrealized gains and losses are allocated to the respective classes on the basis of the relative daily net assets.

Dividends and distributions—The Funds declare and distribute net investment income, if any, annually, as a dividend to shareholders. Any net realized capital gains on sales of securities for all Funds are distributed to shareholders at least annually.

3. Transactions with affiliates:

Certain officers and trustees of the Trust are also officers or employees of Turner Investment Partners, Inc. ("Turner") or Citi Fund Services Ohio, Inc. ("Citi"), the Trust's sub-administrator. Prior to October 1, 2010, SEI Global Funds Services provided sub-adminstration services to the Funds. With the exception of the Trust's Chief Compliance Officer, such officers are paid no fees by the Trust for serving as officers and trustees of the Trust.

Foreside Fund Services, LLC (the "Distributor") provides distribution services to the Funds under a Distribution Agreement. Prior to October 1, 2010, SEI Investments Distribution Co. provided distribution services to the Funds.

4. Administration, shareholder servicing, distribution and transfer agent agreements:

Turner provides administrative services to the Funds under Administration Agreements with the Trust. For its services, Turner receives an annual fee of 0.15% of the aggregate average daily net assets of the Trust up to $2 billion and 0.12% of the aggregate average daily net assets of the Trust over $2 billion. Under a separate Sub-Administration Agreement between Turner and Citi, effective October 1, 2010, Citi provides sub-administrative services to the Trust. For the year ended September 30, 2010, SEI Global Funds Services, the Funds' sub-administrator until September 30, 2010, was paid $1,087,904 by Turner.

The Funds have adopted a Distribution Plan for Retirement Class Shares and Class C Shares (the "Distribution Plan") under which firms, including the Distributor, that provide distribution services may receive compensation. Under the Distribution Plan, which was adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended, the Distributor is entitled to receive aggregate fees for distribution services not exceeding seventy-five basis points (0.75%) of the Fund's average daily net assets attributable to Retirement Class or Class C Shares that are subject to the arrangement in return for providing a broad range of distribution services. Currently, the Retirement Class Shares of the Midcap Growth Fund pay the Distributor twenty-five basis points (0.25%) and the Class C Shares of the Spectrum Fund pay the Distributor seventy-five basis points (0.75%) in distribution fees.

The Funds have also adopted Shareholder Services Plans (the "Shareholder Services Plans"). Under the Shareholder Services Plans, service providers are entitled to receive aggregate fees for shareholder services not exceeding twenty-five basis points (0.25%) of each Fund's average daily net assets attributable to Investor Class Shares, Retirement Class Shares and Class C Shares that are subject to the arrangement in return for providing shareholder services. Currently, Investor Class Shares of each Fund, Retirement Class Shares of the Midcap Growth Fund and Class C Shares of the Spectrum Fund pay 0.25% in shareholder servicing fees.

DST Systems, Inc. serves as the transfer agent and dividend disbursing agent for the Funds under a transfer agency agreement with the Trust.

The Funds may earn cash management credits which can be used to offset transfer agent expenses. During the year ended September 30, 2010, each Fund earned less than $1,000 of cash management credits to offset transfer agent expenses and therefore amounts less than $500 do not appear on the Statement of Operations. The following represents the unrounded cash management credits earned by each Fund.

    Amount  
Spectrum Fund   $ 141    
Concentrated Growth Fund     178    
Core Growth Fund     348    
Emerging Growth Fund     166    
Large Cap Growth Fund     171    
Midcap Growth Fund     860    
New Enterprise Fund     213    
Small Cap Growth Fund     132    
Quantitative Broad Market Equity Fund     6    
Quantitative Large Cap Value Fund     7    
Global Opportunities Fund     1    
International Core Growth Fund     8    
Small Cap Equity Fund     23    

 

5. Investment advisory agreement:

The Trust and Turner are parties to an Investment Advisory Agreement dated April 28, 1996 under which Turner receives a fee that is calculated daily and paid monthly, based on the average daily net assets of certain Funds. Pursuant to an Amended and Restated Advisory Agreement dated November 17, 2006, Turner Investment Management LLC, an affiliate of Turner, serves as the investment adviser for the Small Cap Equity Fund.

TURNER FUNDS 2010 ANNUAL REPORT 77


NOTES TO FINANCIAL STATEMENTS

For their services, Turner and Turner Investment Management LLC receive annual fees, which are calculated daily and paid monthly, based on average daily net assets. Turner and Turner Investment Management LLC have contractually agreed to waive all or a portion of their fees and to reimburse expenses in order to limit total Fund operating expenses (excluding acquired fund fees and expenses and interest expenses relating to short sales, except for the Spectrum Fund, for which Turner includes acquired fund fees and expenses and interest expenses relating to short sales in its contractual waiver) to a specified percentage of the average daily net assets of each Fund, except the Concentrated Growth Fund and New Enterprise Fund, on an annualized basis through certain dates as disclosed in the following table:

    Advisory
fee		   Expense
cap		   Date
(through)		  
Spectrum Fund  
Institutional Class     1.50 %     1.95 %   January 31, 2011  
Investor Class     1.50 %     2.20 %   January 31, 2011  
Class C     1.50 %     2.95 %   January 31, 2011  
Core Growth Fund  
Institutional Class     0.60 %     0.69 %   January 31, 2011  
Investor Class     0.60 %     0.94 %   January 31, 2011  
Emerging Growth Fund  
Institutional Class     1.00 %     1.15 %   January 31, 2011  
Investor Class     1.00 %     1.40 %   January 31, 2011  
Large Cap Growth Fund  
Institutional Class     0.60 %     0.69 %   January 31, 2011  
Investor Class     0.60 %     0.94 %   January 31, 2011  
Midcap Growth Fund  
Institutional Class     0.75 %     0.93 %   January 31, 2011  
Investor Class     0.75 %     1.18 %   January 31, 2011  
Retirement Class     0.75 %     1.43 %   January 31, 2011  
Small Cap Growth Fund  
Investor Class     1.00 %     1.25 %   January 31, 2011  
Quantitative Broad Market
Equity Fund		  
Institutional Class     0.50 %     0.64 %   January 31, 2011  
Investor Class     0.50 %     0.89 %   January 31, 2011  
Quantitative Large Cap
Value Fund		  
Institutional Class     0.60 %     0.69 %   January 31, 2011  
Investor Class     0.60 %     0.94 %   January 31, 2011  
Global Opportunities Fund  
Institutional Class     0.75 %     1.10 %   May 5, 2011  
Investor Class     0.75 %     1.35 %   May 5, 2011  
International Core
Growth Fund		  
Institutional Class     0.85 %     1.10 %   January 31, 2011  
Investor Class     0.85 %     1.35 %   January 31, 2011  
Small Cap Equity Fund  
Institutional Class     0.95 %     1.20 %   January 31, 2011  
Investor Class     0.95 %     1.45 %   January 31, 2011  

 

For the remaining Funds, the Concentrated Growth Fund and the New Enterprise Fund, the advisory fee is comprised of a base fee and a performance adjustment that increases or decreases the total fee depending upon the performance of the Fund relative to the Fund's performance benchmark. The Fund's base fee (1.10% for both the Concentrated Growth Fund and the New Enterprise Fund) is accrued daily and paid monthly, based on the Fund's average net assets during the current month.

The performance adjustment is calculated and paid monthly by comparing the Fund's performance to that of the Fund's performance benchmark over the current month plus the previous 11 months (the "performance period"). The annual performance adjustment rate is multiplied by the average net assets of the Fund over the entire performance period, which is then multiplied by a fraction, the numerator of which is the number of days in the month and the denominator of which is 365 (366 in leap years). The resulting amount is then added to (in the case of overperformance) or subtracted from (in the case of underperformance) the Fund's base fee.

In cases where the advisory fee is comprised of a base fee and a performance adjustment, Turner has voluntarily agreed to waive all or a portion of their fees and to reimburse expenses in order to keep such Fund's "other expenses" (excluding distribution fees, acquired fund fees and expenses and interest expenses relating to short sales) from exceeding a specified percentage of the average daily net assets of the Fund on an annualized basis. Accordingly, the base advisory fee, annual adjustment rate, over/under performance relative to the benchmark threshold, and other expense cap are as follows:

    Base
advisory
fee		   Annual
adjustment
rate		   Benchmark
threshold(1)		   Other
expenses
cap		  
Concentrated Growth Fund     1.10 %     +/-0.40%       +/-2.50%       0.25 %  
New Enterprise Fund     1.10       +/-0.40       +/-2.50       0.25    

 

(1)  See the Funds' Prospectus and Statement of Additional Information for more information regarding each Fund's performance benchmark.

During the year ended September 30, 2010, the Funds' advisory fees, before waivers, were adjusted in accordance with the policy described above:

    Base
adviser
fee		   Performance
adjustment		   Net adviser
fee before
waivers		  
Concentrated Growth Fund   $ 451,810     $ 67,799     $ 519,609    
New Enterprise Fund     274,519       72,912       347,431    

 

6. Redemption fees:

Sales or exchanges out of the Core Growth Fund, New Enterprise Fund, Quantitative Large Cap Value Fund, and the Small Cap Equity Fund within 90 days of purchase are not currently subject to a redemption fee of 2.00%, but may be in the future. The Funds will provide notice to shareholders before they implement the redemption fee.

78 TURNER FUNDS 2010 ANNUAL REPORT


7. Contingent deferred sales charge (Turner Spectrum Fund, Class C Shares):

A 1.00% contingent deferred sales charge ("CDSC") will be deducted with respect to the Spectrum Fund, Class C Shares, redeemed within 12 months of purchase. The CDSC will be based on the lower of the original purchase price or the value of the Class C Shares redeemed. The CDSC may be waived for certain investors, as described in the Spectrum Fund's Class C statutory prospectus.

8. Investment transactions:

The cost of security purchases and the proceeds from security sales, other than short-term investments, for the year ended September 30, 2010 were as follows (000):

    Purchases (000)   Sales (000)  
Spectrum Fund   $ 1,405,515     $ 1,252,874    
Concentrated Growth Fund     84,808       86,205    
Core Growth Fund     1,243,122       1,354,545    
Emerging Growth Fund     399,004       445,351    
Large Cap Growth Fund     186,143       173,413    
Midcap Growth Fund     859,593       1,079,829    
New Enterprise Fund     27,697       35,293    
Small Cap Growth Fund     232,236       246,430    
Quantitative Broad Market Equity Fund     20,424       9,804    
Quantitative Large Cap Value Fund     1,592       1,577    
Global Opportunities Fund     1,386       383    
International Core Growth Fund     5,651       5,221    
Small Cap Equity Fund     33,789       57,443    

 

9. Federal tax policies and information:

Each of the Funds is classified as a separate taxable entity for Federal income tax purposes. Each of the Funds intends to continue to qualify as a separate "regulated investment company" under the Internal Revenue Code and make the requisite distributions to shareholders that will be sufficient to relieve it from Federal income tax and Federal excise tax. Therefore, no Federal tax provision is required.

The amounts of dividends from net investment income and distributions from net realized capital gains, if any, are determined in accordance with Federal income tax regulations, which may differ from those amounts determined under accounting principles generally accepted in the United States of America. These book/tax differences are either temporary or permanent in nature. These differences are primarily due to wash sales, REIT adjustments, expired capital loss carryforwards, foreign currency transactions, net operating losses and investments in partnerships and passive foreign investment companies. The character and timing of dividends from net investment income and distributions from net realized gains distributed during the fiscal year may differ from the year that the income or realized gains (losses) were recorded by the Funds. To the extent these differences are permanent, adjustments are made to the appropriate equity accounts in the period that the differences arise.

Accordingly, the following permanent differences have been reclassified to/from the following accounts during the fiscal year ended September 30, 2010 (000):

Fund   Undistributed
net investment
income		   Accumulated
net realized
gain (loss)		   Portfolio
capital		  
Spectrum Fund   $ 1,194     $ (507 )   $ (687 )  
Concentrated
Growth Fund		     468       130,598       (131,066 )  
Core Growth Fund     172       1,321       (1,493 )  
Emerging Growth Fund     3,867       —       (3,867 )  
Midcap Growth Fund     4,906       127,079       (131,985 )  
New Enterprise Fund     344       8,184       (8,528 )  
Small Cap Growth Fund     1,976       25,178       (27,154 )  
Global Opportunities Fund     1       1       (2 )  
International Core
Growth Fund		     17       (17 )     —    
Small Cap Equity Fund     (24 )     24       —    

 

The tax character of dividends and distributions declared during the years ended September 30, 2010 and September 30 2009 were as follows (000):

    Ordinary
income		   Long-term
capital gain		   Return
of capital		   Total  
Spectrum Fund      
  2010     $ 142     $ —     $ —     $ 142    
  2009       —       —       —       —    
Concentrated
Growth Fund		      
  2010     $ 120     $ —     $ 1     $ 121    
  2009       —       —       —       —-    
Core Growth Fund      
  2010     $ 2,287     $ —     $ —     $ 2,287    
  2009       2,308       —       —       2,308    
Emerging Growth Fund      
  2010     $ —     $ —     $ —     $ —    
  2009       —       12,445       —       12,445    
Large Cap Growth Fund      
  2010     $ 295     $ —     $ —     $ 295    
  2009       98       —       —       98    
New Enterprise Fund      
  2010     $ 22     $ —     $ 1     $ 23    
  2009       —       —       —       —    
Quantitative Broad
Market Equity Fund		      
  2010     $ 7     $ —     $ —     $ 7    
  2009       4       —       —       4    
Quantitative Large Cap
Value Fund		      
  2010     $ 13     $ —     $ —     $ 13    
  2009       14       —       —       14    
International Core
Growth Fund		      
  2010     $ 59     $ —     $ —     $ 59    
  2009       42       —       —       42    
Small Cap Equity Fund      
  2010     $ —     $ —     $ —     $ —    
  2009       17       —       —       17    

 

TURNER FUNDS 2010 ANNUAL REPORT 79


NOTES TO FINANCIAL STATEMENTS

As of September 30, 2010, the components of distributable earnings (accumulated losses) on a tax basis were as follows (000):

    Undistributed
ordinary
income		   Capital
loss
carryforward		   Post-
October
losses		   Post-
October
currency
losses		   Unrealized
appreciation		   Other
temporary
differences		   Total
distributable
earnings
(accumulated
losses)		  
Spectrum Fund   $ —     $ (37 )   $ (2,435 )   $ (129 )   $ 1,847     $ —     $ (754 )  
Concentrated Growth Fund     —       (40,745 )     —       —       7,810       —       (32,935 )  
Core Growth Fund     540       (266,157 )     —       —       99,559       —       (166,058 )  
Emerging Growth Fund     —       (86,022 )     —       —       104,308       —       18,286    
Large Cap Growth Fund     154       (27,427 )     —       —       19,641       —       (7,632 )  
Midcap Growth Fund     —       (361,471 )     —       —       259,260       —       (102,211 )  
New Enterprise Fund     —       (20,717 )     —       —       6,534       —       (14,183 )  
Small Cap Growth Fund     —       (70,467 )     —       —       64,560       —       (5,907 )  
Quantitative Broad Market Equity Fund     67       (177 )     (467 )     —       202       —       (375 )  
Quantitative Large Cap Value Fund     8       (277 )     —       —       67       —       (202 )  
Global Opportunities Fund     —       —       (4 )     —       159       —       155    
International Core Growth Fund     49       (1,165 )     —       (3 )     753       —       (366 )  
Small Cap Equity Fund     22       (7,648 )     —       —       1,209       31       (6,386 )  

 

Post-October losses represent losses realized on investment transactions from November 1, 2009 through September 30, 2010 that, in accordance with Federal income tax regulations, a Fund may elect to defer and treat as having arisen in the following year. For Federal income tax purposes, capital loss carryforwards may be carried forward and applied against future capital gains.

At September 30, 2010, the Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates (000):

    Expiring September 30,  
    2011   2013   2014   2015   2016   2017   2018   Total  
Spectrum Fund   $ —     $ —     $ —     $ —     $ —     $ —     $ 37     $ 37    
Concentrated Growth Fund     12,850       —       —       —       172       —       27,723       40,745    
Core Growth Fund     318       —       200       827       —       175,370       89,442       266,157    
Emerging Growth Fund     —       —       —       —       —       41,623       44,399       86,022    
Large Cap Growth Fund     11,642       —       —       —       61       —       15,724       27,427    
Midcap Growth Fund     129,499       —       —       —       —       142,386       89,586       361,471    
New Enterprise Fund     385       247       —       —       —       17,695       2,390       20,717    
Small Cap Growth Fund     25,994       —       —       —       —       27,970       16,503       70,467    
Quantitative Broad Market
Equity Fund		     —       —       —       —       —       48       129       177    
Quantitative Large Cap
Value Fund		     —       —       —       —       —       155       122       277    
International Core
Growth Fund		     —       —       —       —       —       1,089       76       1,165    
Small Cap Equity Fund     —       —       —       —       —       501       7,147       7,648    

 

80 TURNER FUNDS 2010 ANNUAL REPORT


At September 30, 2010, the total cost of securities for Federal income tax purposes and the aggregate gross unrealized appreciation and depreciation for the investments held by the Fund, excluding securities sold short and written options, were as follows (000):

Fund   Federal
tax
cost		   Unrealized
appreciation		   Unrealized
depreciation		   Net
unrealized
appreciation		  
Spectrum Fund   $ 198,045     $ 10,024     $ (6,457 )   $ 3,567    
Concentrated Growth Fund     33,153       8,658       (848 )     7,810    
Core Growth Fund     454,788       106,003       (6,444 )     99,559    
Emerging Growth Fund     353,204       113,919       (9,611 )     104,308    
Large Cap Growth Fund     103,893       21,450       (1,809 )     19,641    
Midcap Growth Fund     739,263       267,527       (8,267 )     259,260    
New Enterprise Fund     18,116       6,643       (109 )     6,534    
Small Cap Growth Fund     249,992       67,555       (2,995 )     64,560    
Quantitative Broad Market Equity Fund     10,621       537       (335 )     202    
Quantitative Large Cap Value Fund     762       80       (13 )     67    
Global Opportunities Fund     999       172       (13 )     159    
International Core Growth Fund     4,317       848       (95 )     753    
Small Cap Equity Fund     5,347       1,271       (62 )     1,209    

 

Management has analyzed the Funds' tax positions taken on Federal income tax returns for all open tax years and has concluded that as of September 30, 2010, no provision for income tax would be required in the Funds' financial statements. The Funds' Federal and State income and Federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state department of revenue.

10. Concentrations/risks:

Certain Funds invest a high percentage of their assets in specific sectors of the market in order to achieve a potentially greater investment return. As a result, the Funds may be more susceptible to economic, political, and regulatory developments in a particular sector of the market, positive or negative, and may experience increased volatility on the Fund's net asset value and magnified effect on the total return.

The Funds enter into contracts that contain a variety of indemnifications. The Funds' maximum exposure under these arrangements is unknown. However, the Funds have not had prior claims or losses pursuant to these contracts and expect the risk of loss to be remote.

11. Loans of portfolio securities:

The Funds may lend securities in their portfolio pursuant to a securities lending agreement ("Lending Agreement") with Morgan Stanley. Unless otherwise agreed, security loans, made pursuant to the Lending Agreement are required at all times to be secured by collateral equal to at least 100% of the market value of the securities loaned. Cash collateral received is invested in the BlackRock TempCash Fund, Institutional Shares, a money market fund. All such investments are made at the risk of the Funds and, as such, the Funds are liable for investment losses. The Funds receive an annual fee for their participation in the Lending Agreement based on projected lending activity.

In the event of bankruptcy of the borrower, realization/ retention of the collateral may be subject to legal proceedings.

12. Derivative contracts:

Written Options—A summary of option contracts written during the year ended September 30, 2010 for the Spectrum Fund is as follows:

    Option
contracts		   Option
premiums
(000)		  
Options outstanding at beginning of year     28     $ —    
Options written     19,376       1,537    
Options canceled in a closing
purchase transaction		     (15,504 )     (1,223 )  
Options exercised     (101 )     (11 )  
Options expired     (1,070 )     (63 )  
Options outstanding at end of year     2,729     $ 240    

 

TURNER FUNDS 2010 ANNUAL REPORT 81


NOTES TO FINANCIAL STATEMENTS

13. In-kind transactions:

During the year ended September 30, 2009, the Midcap Growth Fund distributed securities in lieu of cash for shareholder redemptions. The shareholders received a pro-rata portion of the Midcap Growth Fund's holdings based on shares outstanding. The value of the redemptions were as follows:

Date   Redemption   Securities   Cash   Realized loss   Fund shares redeemed  
  12/22/08     $ 8,209,938     $ 8,167,796     $ 42,142     $ 3,254,486       458,074    
  7/10/09       27,614,859       27,356,692       258,167       4,717,568       1,386,984    

 

During the year ended September 30, 2010, the Core Growth Fund distributed securities in lieu of cash for shareholder redemptions. The shareholders received a pro-rata portion of the Core Growth Fund's holdings based on shares outstanding. The value of the redemption was as follows:

Date   Redemption   Securities   Cash   Realized loss   Fund shares redeemed  
  11/9/09     $ 15,554,214     $ 15,292,016     $ 262,198     $ 1,492,642       1,518,966    

 

These transactions were completed pursuant to procedures adopted by the Board. These procedures are designed to minimize or eliminate any adverse tax implications to the Funds and its shareholders.

14. Subsequent events:

On November 19, 2010, the Board of Trustees approved an agreement and plan of reorganization (the "Plan") pursuant to which the assets and known liabilities of the Large Cap Growth Fund would be transferred to the Core Growth Fund. The Large Cap Growth Fund will be closed to new investors beginning February 1, 2011. Effective January 31, 2011, the Core Growth Fund will be renamed Turner Large Growth Fund. The Plan requires the approval of the shareholders of the Large Cap Growth Fund and will be submitted to the shareholders for their consideration at a meeting to be held in March 2011.

The Trust has evaluated the need for disclosures and/or adjustments resulting from subsequent events through the date the financial statements were issued. Based on this evaluation, no adjustments were required to the financial statements as of September 30, 2010.

82 TURNER FUNDS 2010 ANNUAL REPORT


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Trustees and Shareholders
Turner Funds:

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of the Turner Spectrum Fund, Turner Concentrated Growth Fund, Turner Core Growth Fund, Turner Emerging Growth Fund, Turner Large Cap Growth Fund, Turner Midcap Growth Fund, Turner New Enterprise Fund, Turner Small Cap Growth Fund, Turner Quantitative Broad Market Equity Fund, Turner Quantitative Large Cap Value Fund, Turner Global Opportunities Fund, Turner International Core Growth Fund, and Turner Small Cap Equity Fund, (collectively, the Funds), as of September 30, 2010, and the related statements of operations for the year or period then ended, the changes in net assets for each of the years or periods in the two-year period then ended, the statement of cash flows for the year then ended for the Turner Spectrum Fund and the financial highlights for each of the years or periods in the five-year period then ended. 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. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of September 30, 2010, by correspondence with the custodian and brokers or other appropriate auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the Funds as of September 30, 2010, the results of their operations, the changes in their net assets and the cash flows for the Turner Spectrum Fund, and the financial highlights for the years or periods indicated in the paragraph above, in conformity with U.S. generally accepted accounting principles.

Philadelphia, Pennsylvania
November 29, 2010

TURNER FUNDS 2010 ANNUAL REPORT 83


NOTICE TO SHAREHOLDERS  (Unaudited)

For shareholders that do not have a September 30th, 2010 tax year end, this notice is for informational purposes only. For shareholders with a September 30th, 2010 year end, please consult your tax advisor as to the pertinance of this notice. For the fiscal year ended September 30th, 2010, each portfolio is designating the following items with regard to distributions paid during the year.

    Long
term
capital
gain
distribution		   Ordinary
income
distributions		   Total
distributions		   Dividends
qualifying
for
corporate
dividends
receivable
deduction(1)		   Qualifying
dividend
income(2)		   Qualifying
interest
income(3)		   Qualifying
short-term
capital
gain(4)		  
Turner Spectrum Fund     0.00 %     100.00 %     100.00 %     1.65 %     1.49 %     0.00 %     100.00 %  
Turner Concentrated
Growth Fund		     0.00 %     100.00 %     100.00 %     100.00 %     100.00 %     0.00 %     0.00 %  
Turner Core Growth Fund     0.00 %     100.00 %     100.00 %     100.00 %     100.00 %     0.00 %     0.00 %  
Turner Emerging Growth
Fund		     0.00 %     0.00 %     0.00 %     0.00 %     0.00 %     0.00 %     0.00 %  
Turner Large Cap Growth
Fund		     0.00 %     100.00 %     100.00 %     100.00 %     100.00 %     0.00 %     0.00 %  
Turner Midcap Growth
Fund		     0.00 %     0.00 %     0.00 %     0.00 %     0.00 %     0.00 %     0.00 %  
Turner New Enterprise
Fund		     0.00 %     100.00 %     100.00 %     100.00 %     100.00 %     0.00 %     0.00 %  
Turner Small Cap Growth
Fund		     0.00 %     0.00 %     0.00 %     0.00 %     0.00 %     0.00 %     0.00 %  
Turner Quantitative Broad
Market Equity Fund		     0.00 %     100.00 %     100.00 %     100.00 %     99.10 %     0.00 %     0.00 %  
Turner Quantitative
Large Cap Value Fund		     0.00 %     100.00 %     100.00 %     100.00 %     100.00 %     0.03 %     0.00 %  
Turner Global Opportunities
Fund		     0.00 %     0.00 %     0.00 %     0.00 %     0.00 %     0.00 %     0.00 %  
Turner International Core
Growth Fund*		     0.00 %     100.00 %     100.00 %     3.00 %     100.00 %     0.00 %     0.00 %  
Turner Small Cap Equity
Fund		     0.00 %     0.00 %     0.00 %     0.00 %     0.00 %     0.00 %     0.00 %  

 

(1)  Qualifying dividends represent dividends which qualify for the corporate dividends received deduction and are reflected as a percentage of "Ordinary Income Distributions".

(2)  The percentage in this column represents the amount of "Qualifying Dividend Income" as created by the Jobs and Growth Tax Relief Reconciliation Act of 2003 and is reflected as a percentage of "Ordinary Income Distribuions". It is the intention of each of the aforementioned funds to designate the maximum amount permitted by law.

(3)  The percentage in this column represents the amount of "Qualifying Interest Income" as created by the American Jobs Creation Act of 2004 and is reflected as a percentage of net investment income distributions that is exempt from U.S. withholding tax when paid to foreign investors. This provision of the Internal Revenue Code will be expiring for tax years beginning after December 31, 2009.

(4)  The percentage in this column represents the amount of "Qualifying Short-Term Capital Gain" as created by the American Jobs Creation Act of 2004 and is reflected as a percentage of short-term capital gain distributions that is exempt from U.S. withholding tax when paid to foreign investors. This provision of the Internal Revenue Code will be expiring for tax years beginning after December 31, 2009.

*  The Turner International Core Growth Fund intends to pass through a foreign tax credit to shareholders. For fiscal year ended 2010 the total amount of foreign source income is $35,638. The total amount of foreign tax paid is $6,688. Your allocable share of the foreign tax credit will be reported on Form 1099-DIV.

The information reported herein may differ from the information and distributions taxable to the Shareholders for the calendar year ending December 31, 2010. Complete information will be computed and reported in conjunction with your 2009 Form 1099-DIV.

84 TURNER FUNDS 2010 ANNUAL REPORT


TRUSTEES AND OFFICERS OF THE TRUST

Name, address and age(1)   Position held with
Trust and length
of service(2)		   Principal occupation(s)
during past 5 years		   Number of
portfolios in
complex
overseen
by trustee		   Other
directorships
held		  
Interested Trustee*  
Thomas R. Trala, Jr.
(44)		   Trustee (since 2010); President (since 2004)   Executive Managing Director (since 2010) and Chief Operating Officer (since 2004), Turner.     13     None  
* Mr. Trala is deemed to be an "Interested Trustee" by virtue of his relationship with Turner.  
Non-Interested Trustees  
Alfred C. Salvato
(52)		   Chairman of the Board (since 2004); Trustee (since 1996)   Chief Investment Officer & Treasurer, Thomas Jefferson University (since 2003) Treasurer since 1995.     13     None  
Janet F. Sansone
(65)		   Trustee (since 1997)   Chief Management Officer, United States Government Printing Office (2008-2010); Self-employed Consultant (1999-2007).     13     None  
John T. Wholihan
(72)		   Trustee (since 1996)   Dean Emeritus (since 2007), Professor (since 1984) and Dean (1984-2007), College of Business Administration, Loyola Marymount University.     13     None  
Executive Officers  
Michael Lawson(3)
SEI
One Freedom Valley Drive,
Oaks, PA 19456
(49)		   Controller and Chief Financial Officer (since 2005)   Director, Fund Accounting, SEI Investments (since 2005); Manager, Fund Accounting (since 1998).     N/A     N/A  
Brian F. McNally
(52)		   Vice-President (since 2002), Secretary and Chief Compliance Officer (since 2004)   General Counsel and Chief Compliance Officer (since 2004), Deputy General Counsel (2002-2004), Turner.     N/A     Director, Turner Funds Plc, an Ireland-based UCIT fund family (since August 2008).  
Calvin Fisher
(37)		   Vice-President and Assistant Secretary (since 2006)   Director – Mutual Fund Administration and Compliance (since 2005); Manager, Mutual Fund Administration (since 2001), Turner.     N/A     N/A  

 

(1)  Each Trustee and executive officer, unless noted otherwise, may be contacted by writing to such Trustee or officer c/o Turner Funds, 1205 Westlakes Drive, Suite 100, Berwyn, PA 19312, Attn: Turner Chief Legal Officer.

(2)  Each Trustee serves until his or her respective successor has been duly elected and qualified. Each officer serves a one-year term.

(3)  Effective December 15, 2010, Ty S. Edwards, Senior Vice President, Financial Services, Citi Fund Services, shall replace Mr. Lawson as Controller and Chief Financial Officer of the Trust. Mr. Edwards was elected by the Board of Trustees on September 10, 2010.

The Trust's Statement of Additional Information ("SAI") includes additional information about the Trustees and Officers. The SAI may be obtained without charge by calling 1.800.224.6312.

TURNER FUNDS 2010 ANNUAL REPORT 85


DISCLOSURE OF FUND EXPENSES  (Unaudited)

All mutual funds have operating expenses. As a shareholder of a mutual fund, your investment is affected by these ongoing costs, which include (among others) costs for portfolio management, distribution (12b-1) and/or shareholder services and other expenses. It is important for you to understand the impact of these costs on your investment returns. Operating expenses such as these are deducted from a mutual fund's gross income and directly reduce its final investment return. These expenses are expressed as a percentage of a mutual fund's average net assets; this percentage is known as a mutual fund's expense ratio.

The following examples use the expense ratio and are intended to help you understand the ongoing costs (in dollars) of investing in your Fund and to compare these costs with those of other mutual funds. The examples are based on an investment of $1,000 made at the beginning of the period shown and held for the entire period.

The table below and on the next page illustrates your Fund's costs in two ways:

• Actual Fund Return. This section helps you to estimate the actual expenses after fee waivers that your Fund incurred over the period. The "Expenses Paid During Period" column shows the actual dollar expense cost incurred by a $1,000 investment in the Fund, and the "Ending Account Value" number is derived from deducting that expense cost from the Fund's gross investment return.

You can use this information, together with the actual amount you invested in the Fund, to estimate the expenses you paid over that period. Simply divide your actual account value by $1,000 to arrive at a ratio (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply that ratio by the number shown for your Fund under "Expenses Paid During Period."

• Hypothetical 5% Return. This section helps you compare your Fund's costs with those of other mutual funds. It provides information about hypothetical account values and expenses based on the Fund's actual expense ratio (column 3) and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. This section is useful in making comparisons because the Securities and Exchange Commission requires all mutual funds to make this 5% calculation. You can assess your Fund's comparative cost by comparing the hypothetical result for your Fund in the "Expenses Paid During Period" column with those that appear in the same charts in the shareholder reports for other mutual funds.

Note: Because the return is set at 5% for comparison purposes — NOT your Fund's actual return — the hypothetical account values and expenses may not be used to estimate your actual ending account balance or expenses you paid for the period.

    Beginning
Account
Value
4/1/10		   Ending
Account
Value
9/30/10		   Annualized
Expense
Ratios		   Expenses
Paid
During
Period*		  
Turner Spectrum Fund — Institutional Class Shares  
Actual Fund Return   $ 1,000.00     $ 978.30       1.91 %   $ 9.47    
Hypothetical
5% Return		     1,000.00       1,015.49       1.91       9.65    
Turner Spectrum Fund — Investor Class Shares  
Actual Fund Return     1,000.00       977.30       2.17       10.76    
Hypothetical
5% Return		     1,000.00       1,014.19       2.17       10.96    
Turner Spectrum Fund — Class C Shares  
Actual Fund Return     1,000.00       973.70       2.92       14.45    
Hypothetical
5% Return		     1,000.00       1,010.43       2.92       14.72    
Turner Concentrated Growth Fund — Investor Class Shares  
Actual Fund Return     1,000.00       1,004.50       1.41       7.09    
Hypothetical
5% Return		     1,000.00       1,018.00       1.41       7.13    
Turner Core Growth Fund — Institutional Class Shares  
Actual Fund Return     1,000.00       966.10       0.69       3.40    
Hypothetical
5% Return		     1,000.00       1,021.61       0.69       3.50    
    Beginning
Account
Value
4/1/10		   Ending
Account
Value
9/30/10		   Annualized
Expense
Ratios		   Expenses
Paid
During
Period*		  
Turner Core Growth Fund — Investor Class Shares  
Actual Fund Return   $ 1,000.00     $ 965.00       0.94 %   $ 4.63    
Hypothetical
5% Return		     1,000.00       1,020.36       0.94       4.76    
Turner Emerging Growth Fund — Institutional Class Shares  
Actual Fund Return     1,000.00       985.90       1.15       5.73    
Hypothetical
5% Return		     1,000.00       1,019.30       1.15       5.82    
Turner Emerging Growth Fund — Investor Class Shares  
Actual Fund Return     1,000.00       984.40       1.40       6.96    
Hypothetical
5% Return		     1,000.00       1,018.05       1.40       7.08    
Turner Large Cap Growth Fund — Institutional Class Shares  
Actual Fund Return     1,000.00       987.80       0.69       3.44    
Hypothetical
5% Return		     1,000.00       1,021.61       0.69       3.50    
Turner Large Cap Growth Fund — Investor Class Shares  
Actual Fund Return     1,000.00       985.70       0.94       4.68    
Hypothetical
5% Return		     1,000.00       1,020.36       0.94       4.76    

 

86 TURNER FUNDS 2010 ANNUAL REPORT


DISCLOSURE OF FUND EXPENSES  (Unaudited)

    Beginning
Account
Value
4/1/10		   Ending
Account
Value
9/30/10		   Annualized
Expense
Ratios		   Expenses
Paid
During
Period*		  
Turner Midcap Growth Fund — Institutional Class Shares  
Actual Fund Return   $ 1,000.00     $ 999.00       0.93 %   $ 4.66    
Hypothetical
5% Return		     1,000.00       1,020.41       0.93       4.71    
Turner Midcap Growth Fund — Investor Class Shares  
Actual Fund Return     1,000.00       998.00       1.18       5.91    
Hypothetical
5% Return		     1,000.00       1,019.15       1.18       5.97    
Turner Midcap Growth Fund — Retirement Class Shares  
Actual Fund Return     1,000.00       996.90       1.43       7.16    
Hypothetical
5% Return		     1,000.00       1,017.90       1.43       7.23    
Turner New Enterprise Fund — Investor Class Shares  
Actual Fund Return     1,000.00       1,024.80       1.71       8.68    
Hypothetical
5% Return		     1,000.00       1,016.50       1.71       8.64    
Turner Small Cap Growth Fund — Investor Class Shares  
Actual Fund Return     1,000.00       1,015.80       1.25       6.32    
Hypothetical
5% Return		     1,000.00       1,018.80       1.25       6.33    
Turner Quantitative Broad Market Equity Fund —
Institutional Class Shares		  
Actual Fund Return     1,000.00       959.10       0.64       3.14    
Hypothetical
5% Return		     1,000.00       1,021.86       0.64       3.24    
Turner Quantitative Broad Market Equity Fund —
Investor Class Shares		  
Actual Fund Return     1,000.00       956.90       0.89       4.37    
Hypothetical
5% Return		     1,000.00       1,020.61       0.89       4.51    
Turner Quantitative Large Cap Value Fund —
Institutional Class Shares		  
Actual Fund Return     1,000.00       968.00       0.69       3.40    
Hypothetical
5% Return		     1,000.00       1,021.61       0.69       3.50    
    Beginning
Account
Value
4/1/10		   Ending
Account
Value
9/30/10		   Annualized
Expense
Ratios		   Expenses
Paid
During
Period*		  
Turner Quantitative Large Cap Value Fund — Investor Class Shares  
Actual Fund Return   $ 1,000.00     $ 966.70       0.90 %   $ 4.44    
Hypothetical
5% Return		     1,000.00       1,020.56       0.90       4.56    
Turner Global Opportunities Fund — Institutional Class Shares  
Actual Fund Return     1,000.00       1,152.00       1.10       4.67 **  
Hypothetical
5% Return		     1,000.00       1,019.55       1.10       5.57    
Turner Global Opportunities Fund — Investor Class Shares  
Actual Fund Return     1,000.00       1,150.00       1.56       6.62 **  
Hypothetical
5% Return		     1,000.00       1,017.25       1.56       7.89    
Turner International Core Growth Fund — Institutional Class Shares  
Actual Fund Return     1,000.00       1,044.40       1.10       5.64    
Hypothetical
5% Return		     1,000.00       1,019.55       1.10       5.57    
Turner International Core Growth Fund — Investor Class Shares  
Actual Fund Return     1,000.00       1,043.30       1.35       6.92    
Hypothetical
5% Return		     1,000.00       1,018.30       1.35       6.83    
Turner Small Cap Equity Fund — Institutional Class Shares  
Actual Fund Return     1,000.00       1,018.40       1.20       6.07    
Hypothetical
5% Return		     1,000.00       1,019.05       1.20       6.07    
Turner Small Cap Equity Fund — Investor Class Shares  
Actual Fund Return     1,000.00       1,016.60       1.45       7.33    
Hypothetical
5% Return		     1,000.00       1,017.80       1.45       7.33    

 

  *  Unless otherwise indicated, expenses are equal to the Fund's annualized expense ratio multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period from 4/1/10 - 9/30/10.)

  **  Expenses are equal to the Fund's annualized expense ratio multiplied by the average account value over the period, multiplied by 144/365 (to reflect the period from inception to date, 5/7/10 - 9/30/10.)

TURNER FUNDS 2010 ANNUAL REPORT 87



Turner Funds

Turner Funds' trustees

Alfred C. Salvato

Chief Investment Officer & Treasurer
Thomas Jefferson University

Janet F. Sansone

Chief Management Officer
Office of The Public Printer of the United States

Thomas R. Trala, Jr.

Executive Managing Director &
Chief Operating Officer
Turner Investment Partners, Inc.

Dr. John T. Wholihan

Professor, Dean Emeritus, College of Business
Loyola Marymount University

Investment advisers

Turner Investment Partners, Inc.

Turner Investment Management LLC

Berwyn, Pennsylvania

Distributor

Foreside Fund Services, LLC

Portland, Maine

Administrator

Turner Investment Partners, Inc.

Berwyn, Pennsylvania

Independent Registered Public Accounting Firm

KPMG LLP

Philadelphia, Pennsylvania

This report was prepared for shareholders of the Turner Funds. It may be distributed to others only if preceded or accompanied by a Turner Funds' Prospectus, which contains detailed information. All Turner Funds are offered by prospectus only.

The Funds file their complete schedules of portfolio holdings with the Securities and Exchange Commission (the "Commission") for the first and third quarters of each fiscal year on Form N-Q within sixty days after the end of the period. The Funds' Forms N-Q are available on the Commission's website at http://www.sec.gov, and may be reviewed and copied at the Commission's Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

The Board of Trustees of the Turner Funds has delegated responsibility for decisions regarding proxy voting for securities
held by each Fund to Turner Investment Management LLC ("TIM") (with respect to the Small Cap Equity Fund only) and to Turner Investment Partners, Inc. (with respect to each other Fund). TIM and Turner Investment Partners, Inc., will vote such proxies in accordance with their respective proxy policies and procedures, which are included in Appendix B to the SAI. The Board of Trustees will periodically review each Fund's proxy voting record.

A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities, as well as information relating to how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, is available (i) via the Funds' website, www.turnerinvestments.com; (ii) on the Commission's website at http://www.sec.gov; and (iii) without charge by calling 1.800.224.6312.

88 TURNER FUNDS 2010 ANNUAL REPORT



Turner Funds

P.O. Box 219805

Kansas City, Missouri 64121-9805

Telephone: 1.800.224.6312

Email: mutualfunds@turnerinvestments.com

Web Site: www.turnerinvestments.com

TUR-AR-002-0307



 

Item 2.     Code of Ethics.

 

The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, and principal accounting officer.

 

Item 3.     Audit Committee Financial Expert.

 

The Board of Trustees of the Turner Funds has determined that the Board’s Audit Committee does not have an “audit committee financial expert,” as the Securities and Exchange Commission has defined that term.  After carefully considering all of the factors involved in the definition of “audit committee financial expert,” the Board determined that none of the members of the audit committee possessed all five attributes in the definition, although some members of the Audit Committees possessed some of the attributes.  The Board also determined that the Audit Committee members have general financial expertise, and given the size and types of the Turner Funds and in light of the nature of the accounting and valuation issues presented over the past several years, it did not appear that the Audit Committee members lacked any necessary skill to serve on the Audit Committee.

 

Item 4.     Principal Accountant Fees and Services.

 

Fees billed by KPMG LLP (“KPMG”) Related to the Trust

 

KPMG billed the Trust aggregate fees for services rendered to the Trust for the last two fiscal years as follows:

 

 

 

2010

 

2009

 

 

 

All fees and
services to the
Trust that were
pre-approved

 

All fees and
services to
service
affiliates that
were pre-approved

 

All other fees
and services to
service
affiliates that
did not require
pre-approval

 

All fees and
services to the
Trust that were
pre-approved

 

All fees and
services to
service
affiliates that
were pre-approved

 

All other fees
and services to
service
affiliates that
did not require
pre-approval

 

(a)  Audit Fees (1)

 

$

246,250

 

N/A

 

N/A

 

$

236,000

 

N/A

 

N/A

 

(b)  Audit-Related Fees

 

N/A

 

N/A

 

N/A

 

N/A

 

N/A

 

N/A

 

(c)  Tax Fees (2)

 

$

79,600

 

N/A

 

N/A

 

$

76,150

 

N/A

 

N/A

 

(d)  All Other Fees (3)

 

N/A

 

N/A

 

N/A

 

N/A

 

N/A

 

N/A

 

 

Notes:

 

(1)         Audit fees include fees related to the audit of the registrant’s annual financial statements and services normally provided by the accountant in connection with statutory and regulatory filings.

(2)         Tax fees consist of tax compliance services for the Trust.  These services primarily included review of federal income tax returns and excise tax returns, as well as services relating to excise tax distribution requirements.

(3)         All Other Fees consist of fees for services provided in connection with an assessment of the advisor’s anti-money laundering program.

 


 

(e)(1)      The audit committee does not have pre-approval policies and procedures.  Instead, the audit committee approves on a case-by-case basis each audit or non-audit service before the accountant is engaged by the registrant.

 

(e)(2)      Percentage of fees billed applicable to non-audit services pursuant to waiver of pre-approval requirement were as follows:

 

 

 

2010

 

2009

 

Audit-Related Fees

 

0.00

%

0.00

%

Tax Fees

 

0.00

%

0.00

%

All Other Fees

 

0.00

%

0.00

%

 

(f)            Not applicable.

 

(g)           The aggregate non-audit fees and services billed by KPMG for the last two fiscal years were $79,600 and $76,150 for 2010 and 2009, respectively, as described above.

 

(h)           The registrant’s Audit Committee has considered whether the provision of non-audit services that were rendered to the registrant’s investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.

 

Item 5.  Audit Committee of Listed Registrants.

 

Not applicable to open-end management investment companies.

 

Item 6.  Investments.

 

Schedule of Investments is included as part of the report to shareholders filed under Item 1.

 

Item 7.  Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

 

Not applicable to open-end management investment companies.

 

Item 8.  Portfolio Managers of Closed-End Management Investment Companies.

 

Not applicable to open-end management investment companies.

 

Item 9.  Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

 

Not applicable to open-end management investment companies.

 

Item 10.  Submission of Matters to a Vote of Security Holders.

 

There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant’s Board of Trustees since the registrant’s last proxy solicitation.

 


 

Item 11.  Controls and Procedures.

 

(a) The registrant’s principal executive officer and principal financial officer concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 as amended (the “Act”)) were effective as of a date within 90 days of the filing date of this report, based on their evaluation of the effectiveness of the registrant’s disclosure controls and procedures required by Rule 30a-3(b) under the Act and Rule 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934.

 

(b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) of the Act) that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

Items 12.  Exhibits.

 

(a)(1) Code of Ethics attached hereto.

 

(a)(2) A separate certification for the principal executive officer and the principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(a)), are filed herewith.

 

(b)  Officer certifications as required by Rule 30a-2(b) under the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(b)) also accompany this filing as an Exhibit.

 


 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

(Registrant)

Turner Funds

 

 

 

 

By (Signature and Title)

/s/ Thomas R. Trala, Jr.

 

Thomas R. Trala, Jr., President

 

 

Date: December 8, 2010

 

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

 

By (Signature and Title)

/s/ Thomas R. Trala, Jr.

 

Thomas R. Trala, Jr., President

 

 

Date: December 8, 2010

 

 

 

 

 

By (Signature and Title)

/s/ Michael Lawson

 

Michael Lawson, Controller and CFO

 

 

Date: December 8, 2010