-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NYJO5t8/NUsmSoCn0YJWwIiHlxKVxSFY+sU1cqPtVxvY+7EwKdkXZPSnqACdBnAj xrzRO14J1y8++Qujcm77LA== 0001135428-08-000241.txt : 20080609 0001135428-08-000241.hdr.sgml : 20080609 20080609113422 ACCESSION NUMBER: 0001135428-08-000241 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20080331 FILED AS OF DATE: 20080609 DATE AS OF CHANGE: 20080609 EFFECTIVENESS DATE: 20080609 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TURNER FUNDS CENTRAL INDEX KEY: 0001006783 IRS NUMBER: 000000000 STATE OF INCORPORATION: MA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-07527 FILM NUMBER: 08887340 BUSINESS ADDRESS: STREET 1: 1235 WESTLAKES DRIVE, SUITE 350 CITY: BERWYN STATE: PA ZIP: 19312 BUSINESS PHONE: 6106763097 MAIL ADDRESS: STREET 1: 1235 WESTLAKES DRIVE, SUITE 350 CITY: BERWYN STATE: PA ZIP: 19312 FORMER COMPANY: FORMER CONFORMED NAME: TIP FUNDS DATE OF NAME CHANGE: 19970618 0001006783 S000006684 TURNER CORE GROWTH FUND C000018210 Institutional TTMEX C000029560 Investor TCGFX 0001006783 S000006685 TURNER LARGE CAP VALUE FUND C000018211 Institutional 0001006783 S000006686 TURNER NEW ENTERPRISE FUND C000018212 Investor TBTBX 0001006783 S000006687 TURNER CONCENTRATED GROWTH FUND C000018213 Investor TTOPX 0001006783 S000006689 TURNER LARGE CAP GROWTH FUND C000018215 Institutional TSGEX C000043336 Investor 0001006783 S000006690 TURNER MID CAP GROWTH C000018216 Retirement C000018217 Investor TMGFX C000063529 Institutional 0001006783 S000006691 TURNER SMALL CAP GROWTH FUND C000018218 Investor TSCEX 0001006783 S000006692 Turner Emerging Growth Fund C000018219 Investor TMCGX 0001006783 S000006693 TURNER SMALL CAP EQUITY FUND C000018220 Investor TSEIX 0001006783 S000015700 Turner Midcap Equity Fund C000042882 Institutional C000042883 Investor 0001006783 S000015701 Turner International Core Growth Fund C000042887 Institutional 0001006783 S000022339 Turner Core Growth 130/30 Fund C000064221 Investor Class C000064222 Institutional Class 0001006783 S000022340 Turner Quantitative Broad Market Equity Fund C000064223 Investor Class C000064224 Institutional Class N-CSRS 1 turner_ncsrs.txt 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) Turner Funds P.O. Box 219805 Kansas City, MO 64121-9805 (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, 2008 DATE OF REPORTING PERIOD: MARCH 31, 2008 ITEM 1. REPORTS TO STOCKHOLDERS. - -------------------------------------------------------------------------------- [TURNER FUNDS LOGO] SEMIANNUAL REPORT - -------------------------------------------------------------------------------- March 31, 2008 (unaudited) Turner Concentrated Growth Fund Turner Core Growth Fund Turner Emerging Growth Fund Turner International Core Growth Fund Turner Large Cap Growth Fund Turner Midcap Equity Fund Turner Midcap Growth Fund Turner New Enterprise Fund Turner Quantitative Large Cap Value Fund Turner Small Cap Equity Fund Turner Small Cap Growth Fund - -------------------------------------------------------------------------------- CONTENTS 2 Letter to shareholders 5 Total returns of Turner Funds 7 Investment review: Turner Concentrated Growth Fund 8 Investment review: Turner Core Growth Fund 9 Investment review: Turner Emerging Growth Fund 10 Investment review: Turner International Core Growth Fund 11 Investment review: Turner Large Cap Growth Fund 12 Investment review: Turner Midcap Equity Fund 13 Investment review: Turner Midcap Growth Fund 14 Investment review: Turner New Enterprise Fund 15 Investment review: Turner Quantitative Large Cap Value Fund 16 Investment review: Turner Small Cap Equity Fund 17 Investment review: Turner Small Cap Growth Fund 18 Financial statements 50 Notes to financial statements 57 Board of Trustees considerations in approving the Advisory Agreements 58 Disclosure of fund expenses
TURNER FUNDS As of March 31, 2008, the Turner Funds offered a series of 11 mutual funds to individual and institutional investors. The minimum initial investment for Institutional Class Shares in a Turner Fund is $250,000 ($25,000 for Turner Quantitative Large Cap Value Fund) for regular accounts and $100,000 ($10,000 for Turner Quantitative Large Cap Value Fund) for individual retirement accounts. The minimum initial investment for Investor Class Shares and Retirement Class Shares 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 and Turner Midcap Equity Fund). Turner Investment Partners, Inc., founded in 1990, manages more than $25 billion in stock investments as of March 31, 2008. Turner Investment Management LLC, a subsidiary of Turner Investment Partners, Inc., serves as the investment adviser for the Turner Small Cap Equity Fund and Turner Midcap Equity Fund. 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 2008 SEMIANNUAL REPORT | 1 LETTER TO SHAREHOLDERS - -------------------------------------------------------------------------------- TO OUR SHAREHOLDERS Drip, drip, drip. That was the sound of the steady sequence of bad economic news heard by stock investors in the six-month period ended March 31, 2008. The bad news originated with the subprime-mortgage mess and proceeded to cascade with increasing force throughout the economy and the global financial system, helping to bring about a severe contraction of credit, the worst housing slump in modern times, a weaker dollar, an earnings debacle in the financial-services sector, and the collapse of Bear Stearns, one of the largest U.S. investment banks. Other drips of bad news included a slowdown in consumer spending, historically high gasoline and commodity prices, a rise in inflation, and a drop in employment. The problems begat by subprime mortgages were based on a simplistic notion that proved misguided: the American home "seemed like such a sure bet that a huge portion of the global financial system ended up owning a piece of it," as THE NEW YORK TIMES observed. As Americans with spotty credit histories fell behind on their subprime mortgages, though, the drips related to this supposedly sure bet began to pick up in frequency and severity. SECURITIZATION: THE S WORD The problems were compounded when subprime loans with low credit ratings, through modern financial alchemy, were repackaged as high-rated, exotic securities, such as collateralized debt obligations, sold to institutional investors -- a process known as "securitization." In theory, securitization REDUCES risk, but in this instance it mainly served to SPREAD risk more broadly. In many cases, investors heightened their risk by buying those securities with lots of leverage (that is, they used lots of borrowed money). Once those securities began losing money, the losses became magnified because the investments were so highly leveraged -- and so difficult to sell. Net-net, trust -- the glue that holds together the global financial system -- began to dissolve on a massive scale, to the point where the banks and investment banks harbored doubts that much of the debt was really what it was supposed to be. As a result they largely stopped extending credit. A high tolerance for risk in subprime lending at the start of the period morphed into a high level of risk aversion in ALL types of lending by the end of it. In effect, the drip, drip, drip of bad news became such that by March the entire financial system was in danger of seizing up. Both the Treasury Department and the Federal Reserve acted decisively to address that danger. The Treasury forced the sale of Bear Stearns. And the Fed agreed to assume any losses of up to $29 billion in Bear Stearns' portfolios, offered to lend as much as $200 billion directly to Wall Street firms to loosen up credit, and cut short-term interest rates for the sixth time in six months (which amounted to the sharpest and fastest cuts in decades). So extraordinary were the Treasury and the Fed's moves over a highly eventful 10-day stretch in March that THE WALL STREET JOURNAL called them the "10 days that changed capitalism." THE DRIP PERVADES STOCKS The drip, drip, drip permeated the stock market as well. Investor sentiment turned negative, and the stock market, as represented by the S&P 500 Index, recorded a 12.46% loss for the six-month period. In the period the growth style of investing outperformed value investing -- that is to say, growth did less worse. The broad-based Russell 3000 Growth Index lost 11.18%, while the Russell 3000 Value Index fell 13.96%. Value's underperformance can mainly be attributed to the large weightings in financial-services stocks in the value indexes; financial stocks declined more than 20%. Overall, it was one of the worst periods for the stock market since the bear market of 2000-2002. Alas, all 11 of the Turner funds reflected the market's weakness to varying degrees, recording negative returns ranging from 6.23% to 17.89%. However, in relative terms (performance versus a benchmark), there was some cause for cheer: five funds outperformed. The best performers were our international growth fund, the Turner International Core Growth Fund; our quantitative fund, the Turner Quantitative Large Cap Value Fund; and three funds that specialize in smaller stocks, the Turner Emerging Growth Fund, the Turner Midcap Growth Fund, and the Turner Small Cap Equity Fund. Here are the returns for each of our funds and their benchmarks in the past six months. (Please call 1.800.224.6312 or visit our Web site at www.turnerinvestments.com for the most recent month-end performance information.) 2 | TURNER FUNDS 2008 SEMIANNUAL REPORT - -------------------------------------------------------------------------------- March 31, 2008 - -------------------------------------------------------------------------------- TOTAL RETURNS Six-month period ended March 31, 2008 TURNER CONCENTRATED GROWTH FUND (TTOPX) (17.79)% S&P 500 Index (12.46) NASDAQ 100 Index* (14.54) Russell 1000 Growth Index (10.87) TURNER CORE GROWTH FUND, INSTITUTIONAL CLASS (TTMEX) (12.49) S&P 500 Index (12.46) Russell 1000 Growth Index (10.87) TURNER EMERGING GROWTH FUND (TMCGX) (11.20) Russell 2000 Growth Index (14.66) TURNER INTERNATIONAL CORE GROWTH FUND (TICGX) (6.23) MSCI World Growth ex-U.S. Index (7.78) TURNER LARGE CAP GROWTH FUND, INSTITUTIONAL CLASS (TSGEX) (15.32) Russell Top 200 Growth Index (10.11) Russell 1000 Growth Index (10.87) TURNER MIDCAP EQUITY FUND, INVESTOR CLASS (TMCFX) (14.23) Russell Midcap Index (13.17) TURNER MIDCAP GROWTH FUND, INVESTOR CLASS (TMGFX) (11.65) Russell Midcap Growth Index (12.46) TURNER NEW ENTERPRISE FUND (TBTBX) (17.89) NASDAQ Composite Index (15.27) TURNER QUANTITATIVE LARGE CAP VALUE FUND (TLVFX, FORMERLY TURNER LARGE CAP VALUE FUND) (8.97) Russell 1000 Value Index (14.01) TURNER SMALL CAP EQUITY FUND (TSEIX) (13.97) Russell 2000 Index (14.02) TURNER SMALL CAP GROWTH FUND (TSCEX) (14.86) Russell 2000 Growth Index (14.66) - --------------------------------------------------------------------------------
* Effective September 30, 2008, we intend to remove this benchmark, based on our view that the other benchmarks for this fund are more appropriate. For more details on the performance of each fund during the six-month period, see the INVESTMENT REVIEW beginning on page 7. WE SHARE THE PAIN It's safe to say that neither you nor we are pleased with the losses of our funds in particular and the stock market in general during the past six months. Be that as it may, one consolation we can offer when the stock market endures such a downbeat time is that the pain is shared by you and us; our portfolio managers invest along with you in the funds they manage. In Turner's Wide World of Investing, we share with you the thrill of victory (gains) and the agony of defeat (losses). Happily, the equity balance has been slanted toward victory for both of us; since our firm was founded in 1990, the stock market, as represented by the S&P 500 Index, has recorded up years 78% of the time, with a compound annual return of 10.5%, according to Ibbotson Associates. In the past six months, our seven growth funds were stymied by a market that was not only negative but also punished most harshly the stocks of companies reporting the best earnings. Our growth-investing process is designed to identify the shares of precisely those kind of corporate earnings leaders, so during the period our process was of limited help. Many of our holdings were characterized by above-average valuations, which shrank. Suffice it to say that our growth funds have tended to perform best in periods when growth investing is flourishing. The past six months were clearly not one of those times. The results of our two core funds, the Turner Midcap Equity Fund and the Turner Small Cap Equity Fund, which invest in both growth and value stocks, were impaired by losses in certain major sectors, especially the producer-durables sector. Even so, the Small Cap Equity Fund, as noted, managed to outperform, and the Midcap Equity Fund trailed its target index only marginally, by about one percentage point. BEST MEASURE: THE LONG RUN Of course, investment results of only six months' duration, whether positive or negative, reveal little. As we never tire of emphasizing, the best measure of a mutual fund is its long-term performance. And by that measure, our 11 funds look good indeed: all 11 have beaten their benchmarks since inception, which we think says something about the ability of our teams of portfolio managers. Each of our funds is headed by a lead portfolio manager, backed by a team of comanagers and analysts. As chairman and chief investment officer, I lead three of our growth funds. But my duties involve more than that. One of my prime responsibilities is to keep our teams of talented portfolio managers happy in their jobs. As a result I think I have some idea what Miller Huggins felt like managing the Murderer's Row lineup of sluggers on the New York Yankees of 1927 - -- Babe Ruth, Lou Gehrig, Earle Combs, Bob Meusel, et al. I count my lucky stars to have a Murderer's Row of lead TURNER FUNDS 2008 SEMIANNUAL REPORT | 3 LETTER TO SHAREHOLDERS (continued) - -------------------------------------------------------------------------------- March 31, 2008 portfolio managers who have helped make possible the long-term record of investment excellence at the Turner Funds: Tom DiBella, Steve Gold, David Kovacs, Chris McHugh, Bill McVail, Frank Sustersic, and Mark Turner. I gain more than a little satisfaction that they evidently are happy enough in their jobs to stick around here; they have an average tenure of 12 years at our firm. We want them to continue doing what they do so well for many more years to come. Unlike baseball players, many portfolio managers seem to get better with age. Investing whizzes like John Templeton, Warren Buffett, and Bill Ruane were only hitting their stride in their 40s and 50s. IS THE WORST OVER? As for the near-term investment outlook, no one knows what the market will do. All we have to go on are the probabilities. And in our estimation, the probabilities are that the stock market has already largely discounted the worst of the drips, and corporate earnings in aggregate may be up for 2008 (although earnings estimates are likely to be reduced in the near term). According to Thomson Financial, earnings of the companies in the S&P 500 are expected to rebound by 16% in the third quarter and 63% in the fourth (helped by a dismal fourth quarter of 2007). That should help provide a supportive backdrop for stocks in the remainder of the year. We say that knowing full well that most key indicators are flashing signals suggesting that the economy is slipping into a recession. But we think it's still possible that a recession may not materialize. (A recession is only evident in 20-20 hindsight, after the economy has had two or more quarters of negative growth.) Any recession is likely to be brief and shallow, in our estimation, especially in light of the government's professed resolve to administer a solid dose of fiscal and monetary medicine to revive flagging consumer confidence and the economy. About that resolve, FORTUNE magazine noted that Ben Bernanke's Fed is "cutting rates rapidly and throwing everything but the kitchen sink at today's problems. (Bernanke will probably throw that in too, if the Fed's plumbers can unbolt it.)" Whatever course the market, the economy, and Mr. Bernanke may take, our growth funds, as always, are invested in stocks with the strongest earnings prospects. The Turner Quantitative Large Cap Value Fund, employing our proprietary quantitative model, is finding what we perceive as attractive values in both the cyclical and non-cyclical sectors of the market. And our core funds, as usual, are focused on owning stocks that we think have either undervalued assets or strong prospective earnings power. In closing, we thank you for the ultimate gesture of confidence in us: placing your money in our funds. Shareholders can be notoriously fickle, eager to chase the latest hot-performing fund. In contrast, our shareholders have been notably loyal, by the standards of the mutual-fund industry: about 90% of the assets in our funds have been invested there for one year or longer -- in most cases, MUCH longer. Rest assured that we remain committed to doing our best for you (and for us) to produce superior long-term results for the Turner Funds. And we look forward to discussing in future reports how well we are meeting that commitment. /s/ Bob Turner Bob Turner CHAIRMAN AND CHIEF INVESTMENT OFFICER TURNER INVESTMENT PARTNERS PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE VIEWS EXPRESSED ARE THOSE OF TURNER INVESTMENT PARTNERS AS OF MARCH 31, 2008, AND ARE NOT INTENDED AS A FORECAST OR INVESTMENT RECOMMENDATIONS. THE INDEXES MENTIONED ARE NOT AVAILABLE FOR INVESTMENT. [PHOTO OF BOB TURNER] BOB TURNER - -------------------------------------------------------------------------------- 4 | TURNER FUNDS 2008 SEMIANNUAL REPORT PERFORMANCE - -------------------------------------------------------------------------------- TOTAL RETURNS OF TURNER FUNDS Through March 31, 2008 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 SEI INVESTMENTS DISTRIBUTION COMPANY, OAKS, PENNSYLVANIA 19456. 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.
Year (Annualized) Total Six to One Three Five Ten Since net assets Fund name/index months date year years years years inception ($mil) - ----------------------------------------------------------------------------------------------------------------------- TURNER CONCENTRATED GROWTH FUND (17.79)% (21.58)% 2.84% 10.78% 14.87% N/A 1.99% $ 36.76 S&P 500 Index (12.46) (9.44) (5.08) 5.85 11.32 n/a 1.23 NASDAQ 100 Index (14.54) (14.42) 1.04 6.82 12.27 n/a (2.61) Russell 1000 Growth Index (10.87) (10.18) (0.75) 6.33 9.96 n/a (1.79) INCEPTION DATE: 6/30/99 - ----------------------------------------------------------------------------------------------------------------------- TURNER CORE GROWTH FUND -- INSTITUTIONAL CLASS SHARES (12.49) (15.98) 1.06 9.49 13.95 N/A 3.41 363.78 INVESTOR CLASS SHARES* (12.60) (15.98) 0.85 N/A N/A N/A 6.73 235.02 S&P 500 Index (12.46) (9.44) (5.08) 5.85 11.32 n/a 2.70 Russell 1000 Growth Index (10.87) (10.18) (0.75) 6.33 9.96 n/a 0.39 INCEPTION DATE: 2/28/01 - ----------------------------------------------------------------------------------------------------------------------- TURNER EMERGING GROWTH FUND(1) (11.20) (13.08) (0.92) 9.53 20.18 23.83 24.55 556.42 Russell 2000 Growth Index (14.66) (12.83) (8.94) 5.74 14.24 1.75 2.15 INCEPTION DATE: 2/27/98 - ----------------------------------------------------------------------------------------------------------------------- TURNER INTERNATIONAL CORE GROWTH FUND (6.23) (10.85) 12.47 N/A N/A N/A 12.30 4.53 MSCI World Growth ex-U.S. Index (7.78) (7.84) 3.76 n/a n/a n/a 6.78 INCEPTION DATE: 1/31/07 - ----------------------------------------------------------------------------------------------------------------------- TURNER LARGE CAP GROWTH FUND -- INSTITUTIONAL CLASS SHARES (15.32) (16.11) (2.19) 4.77 9.05 N/A (6.79) 37.53 INVESTOR CLASS SHARES** (15.53) (16.15) (2.58) N/A N/A N/A (2.92) 0.82 Russell Top 200 Growth Index (10.11) (9.83) 1.15 5.90 8.50 n/a (5.54) Russell 1000 Growth Index (10.87) (10.18) (0.75) 6.33 9.96 n/a (4.55) INCEPTION DATE: 6/14/00 - ----------------------------------------------------------------------------------------------------------------------- TURNER MIDCAP EQUITY FUND -- INSTITUTIONAL CLASS SHARES (13.95) (12.23) (9.46) N/A N/A N/A (6.98) 0.10 INVESTOR CLASS SHARES (14.23) (12.25) (10.17) N/A N/A N/A (7.77) 0.48 Russell Midcap Index (13.17) (9.98) (8.92) n/a n/a n/a (6.95) INCEPTION DATE: 1/31/07 - -----------------------------------------------------------------------------------------------------------------------
TURNER FUNDS 2008 SEMIANNUAL REPORT | 5 PERFORMANCE (continued) - --------------------------------------------------------------------------------
Year (Annualized) Total Six to One Three Five Ten Since net assets Fund name/index months date year years years years inception ($mil) - -------------------------------------------------------------------------------------------------------------------- TURNER MIDCAP GROWTH FUND(1) -- INVESTOR CLASS SHARES (11.65)% (13.20)% 4.61% 9.84% 16.24% 9.07% 12.64% $ 1,254.11 RETIREMENT CLASS SHARES*** (11.74) (13.24) 4.39 9.41 15.73 N/A 9.18 6.16 Russell Midcap Growth Index (12.46) (10.95) (4.55) 7.77 15.20 5.16 7.69 INCEPTION DATE: 10/1/96 - -------------------------------------------------------------------------------------------------------------------- TURNER NEW ENTERPRISE FUND(1) (17.89) (19.00) 4.83 12.42 21.81 N/A (4.22) 56.05 NASDAQ Composite Index (15.27) (13.88) (5.12) 5.28 11.94 n/a (6.37) INCEPTION DATE: 6/30/00 - -------------------------------------------------------------------------------------------------------------------- TURNER QUANTITATIVE LARGE CAP VALUE FUND (8.97) (8.39) (2.93) N/A N/A N/A 8.10 0.85 Russell 1000 Value Index (14.01) (8.72) (9.99) n/a n/a n/a 6.67 INCEPTION DATE: 10/10/05 - -------------------------------------------------------------------------------------------------------------------- TURNER SMALL CAP EQUITY FUND(1) (13.97) (11.28) (13.07) 2.51 13.78 N/A 9.81 43.74 Russell 2000 Index (14.02) (9.90) (13.00) 5.06 14.90 n/a 7.13 INCEPTION DATE: 3/4/02 - -------------------------------------------------------------------------------------------------------------------- TURNER SMALL CAP GROWTH FUND(1) (14.86) (14.57) (5.87) 8.11 16.60 5.43 12.56 260.83 Russell 2000 Growth Index (14.66) (12.83) (8.94) 5.74 14.24 1.75 5.48 INCEPTION DATE: 2/7/94 - --------------------------------------------------------------------------------------------------------------------
(1) 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. * Commenced operations on August 1, 2005. ** Commenced operations on January 31, 2007. *** Commenced operations on September 24, 2001. EXPENSE RATIO+ - --------------------------------------------------------------------------------
Gross Net expense expense ratio ratio - -------------------------------------------------------------------------------- TURNER CONCENTRATED GROWTH FUND Investor Class Shares 1.45% 1.11% TURNER CORE GROWTH FUND Institutional Class Shares 1.07% 0.69% Investor Class Shares 1.32% 0.94% TURNER EMERGING GROWTH FUND Investor Class Shares 1.55% 1.40% TURNER INTERNATIONAL CORE GROWTH FUND Institutional Class Shares 4.65% 1.10% TURNER LARGE CAP GROWTH FUND Institutional Class Shares 1.24% 0.69% Investor Class Shares 1.49% 0.94%
Gross Net expense expense ratio ratio - -------------------------------------------------------------------------------- TURNER MIDCAP EQUITY FUND Institutional Class Shares 31.28% 0.90% Investor Class Shares 22.29% 1.15% TURNER MIDCAP GROWTH FUND Investor Class Shares 1.25% 1.18% Retirement Class Shares 1.50% 1.43% TURNER NEW ENTERPRISE FUND Investor Class Shares 1.69% 1.27% TURNER QUANTITATIVE LARGE CAP VALUE FUND Institutional Class Shares 5.28% 0.69% TURNER SMALL CAP EQUITY FUND Investor Class Shares 1.60% 1.45% TURNER SMALL CAP GROWTH FUND Investor Class Shares 1.49% 1.25%
- -------------------------------------------------------------------------------- + These expense ratios are based on the most recent prospectus and may differ from those shown in the financial highlights. 6 | TURNER FUNDS 2008 SEMIANNUAL REPORT INVESTMENT REVIEW - -------------------------------------------------------------------------------- TURNER CONCENTRATED GROWTH FUND - -------------------------------------------------------------------------------- FUND PROFILE MARCH 31, 2008 o Ticker symbol TTOPX o CUSIP #87252R862 o Top five holdings++ (1) Cisco Systems (2) Gilead Sciences (3) Charles River Laboratories International (4) Corning (5) CME Group o % in five largest holdings 24.4%+ o Number of holdings 26 o Price/earnings ratio 21.2 o Weighted average market capitalization $47.03 billion o % of holdings with positive earnings surprises 71.6% o % of holdings with negative earnings surprises 24.2% o Net assets $37 million ------------------------- LARGE X MARKET | ------------------------- CAPITALIZATION | | ------------------------- SMALL ------------------------- VALUE ------------ GROWTH INVESTMENT STYLE - -------------------------------------------------------------------------------- GROWTH OF A $10,000 INVESTMENT IN THE TURNER CONCENTRATED GROWTH FUND: JUNE 30, 1999-MARCH 31, 2008* [LINE GRAPH]
INITIAL INVESTMENT DATE TURNER CONCENTRATED GROWTH FUND S&P 500 Index NASDAQ 100 Index Russell 1000 Growth Index - ---------------------- ------------------------------- ------------- ---------------- ------------------------- 6/30/99 $10,000 $10,000 $10,000 $10,000 Sep. 99 $13,990 $ 9,376 $10,485 $ 9,633 Sep. 00 $27,782 $10,622 $15,553 $11,890 Sep. 01 $ 8,223 $ 7,794 $ 5,092 $ 6,464 Sep. 02 $ 5,754 $ 6,197 $ 3,631 $ 5,009 Sep. 03 $ 8,638 $ 7,709 $ 5,696 $ 6,307 Sep. 04 $ 8,310 $ 8,778 $ 6,190 $ 6,780 Sep. 05 $10,137 $ 9,853 $ 7,044 $ 7,567 Sep. 06 $10,850 $10,916 $ 7,308 $ 8,024 Sep. 07 $14,448 $12,711 $ 9,283 $ 9,577 Mar. 08 $11,878 $11,127 $ 7,933 $ 8,536
- -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDING MARCH 31, 2008)
SIX ONE THREE FIVE SINCE MONTHS YEAR YEARS YEARS INCEPTION - --------------------------------------------------------------------------------- TURNER CONCENTRATED GROWTH FUND (17.79)% 2.84% 10.78% 14.87% 1.99% S&P 500 Index (12.46)% (5.08)% 5.85% 11.32% 1.23% NASDAQ 100 Index** (14.54)% 1.04% 6.82% 12.27% (2.61)% Russell 1000 Growth Index (10.87)% (0.75)% 6.33% 9.96% (1.79)% - ---------------------------------------------------------------------------------
SECTOR WEIGHTINGS+: [BAR CHART] Information Technology 29.9% Health Care 20.9% Consumer discretionary 19.1% Industrials 12.1% Financials 8.4% Cash equivalents 4.2% Materials 3.0% Energy 2.4%
MANAGER'S DISCUSSION AND ANALYSIS Poor results in two major sectors were largely responsible for the Turner Concentrated Growth Fund (TTOPX) producing a 17.79% loss in the six-month period ended March 31. That return underperformed the benchmark S&P 500 Index's 12.46% decline by 5.33 percentage points. Nearly 50% of the fund's holdings were concentrated in two sectors, consumer discretionary and information technology, whose returns detracted most from performance. In those sectors, Internet, retailing, semiconductor, and wireless stocks declined sharply. Three sector positions, health care, materials, and energy, added extra return. Biotechnology, specialty-pharmaceutical, mining, and energy-services stocks fared 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. The inception date of the Turner Concentrated Growth Fund was June 30, 1999. ** The NASDAQ 100 Index tracks NASDAQ's largest companies across major industry groups, including computer hardware and software, telecommunications, retail/wholesale, and biotechnology. + Percentages based on total investments. ++ 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 2008 SEMIANNUAL REPORT | 7 INVESTMENT REVIEW - -------------------------------------------------------------------------------- TURNER CORE GROWTH FUND - -------------------------------------------------------------------------------- FUND PROFILE MARCH 31, 2008 o Ticker symbol TTMEX Institutional Class Shares o CUSIP #900297847 Institutional Class Shares o Top five holdings+++ (1) General Electric (2) Coca-Cola (3) Cisco Systems (4) Petroleo Brasileiro ADR (5) Corning o % in five largest holdings 15.4%+ o Number of holdings 76 o Price/earnings ratio 17.5 o Weighted average market capitalization $60.60 billion o % of holdings with positive earnings surprises 75.9% o % of holdings with negative earnings surprises 19.1% o Net assets $364 million, Institutional Class Shares ------------------------- LARGE X MARKET | ------------------------- CAPITALIZATION | | ------------------------- SMALL ------------------------- VALUE ------------ GROWTH INVESTMENT STYLE - -------------------------------------------------------------------------------- GROWTH OF A $250,000 INVESTMENT IN THE TURNER CORE GROWTH FUND, INSTITUTIONAL CLASS SHARES: FEBRUARY 28, 2001-MARCH 31, 2008*,** [LINE GRAPH]
TURNER CORE GROWTH FUND, Russell 1000 INITIAL INVESTMENT DATE INSTITUTIONAL CLASS SHARES S&P 500 Index Growth Index - ----------------------- -------------------------- ------------- ------------ 2/28/01 $250,000 $250,000 $250,000 Sep 01 $204,530 $211,479 $194,671 Sep 02 $157,263 $168,147 $150,851 Sep 03 $201,014 $209,158 $189,951 Sep 04 $221,015 $238,168 $204,216 Sep 05 $273,263 $267,343 $227,906 Sep 06 $292,145 $296,190 $241,671 Sep 07 $362,260 $344,883 $288,434 Mar 08 $317,014 $301,911 $257,082
- -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDING MARCH 31, 2008)
SIX ONE THREE FIVE SINCE MONTHS YEAR YEARS YEARS INCEPTION - ---------------------------------------------------------------------------------------------------- TURNER CORE GROWTH FUND, INSTITUTIONAL CLASS SHARES (12.49)% 1.06% 9.49% 13.95% 3.41%** TURNER CORE GROWTH FUND, INVESTOR CLASS SHARES (12.60)% 0.85% -- -- 6.73%*** S&P 500 Index (12.46)% (5.08)% 5.85% 11.32% 2.70%** Russell 1000 Growth Index (10.87)% (0.75)% 6.33% 9.96% 0.39%** - ----------------------------------------------------------------------------------------------------
SECTOR WEIGHTINGS+: [BAR CHART] Information Technology 17.3% Financials 15.2% Energy 12.6% Health Care 12.2% Industrials 10.1% Consumer discretionary 9.8% Consumer staples 8.1% Cash equivalents/short-term investments++ 5.5% Telecommunication services 4.1% Materials 3.7% Utilities 1.4%
MANAGER'S DISCUSSION AND ANALYSIS Some good stock selection tempered the 12.49% loss of the Turner Core Growth Fund, Institutional Class (TTMEX) in the six-month period ended March 31. As a result the fund's results nearly equaled that of the S&P 500 Index but underperformed the Russell 1000 Growth Index's 10.87% drop by 1.62 percentage points. Six of the fund's 10 sector positions beat their index sectors. Energy and health-care stocks, which amounted to a 25% weighting, boosted the fund's results the most. Winners here included energy-services, drilling, biotechnology, and specialty-pharmaceutical stocks. A 10% position in the consumer-discretionary, producer-durables, and information-technology sectors were the prime detractors from performance. Internet, retailing, semiconductor-capital-equipment, semiconductor, data-networking, and wireless-communications shares were particularly weak. - -------------------------------------------------------------------------------- * 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 10 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. 8 | TURNER FUNDS 2008 SEMIANNUAL REPORT INVESTMENT REVIEW - -------------------------------------------------------------------------------- TURNER EMERGING GROWTH FUND - -------------------------------------------------------------------------------- FUND PROFILE MARCH 31, 2008 o Ticker symbol TMCGX o CUSIP #872524301 o Top five holdings+++ (1) Bucyrus International, Cl A (2) Deckers Outdoor (3) Terra Industries (4) iShares Russell 2000 Index Fund (5) Parexel International o % in five largest holdings 15.1%+ o Number of holdings 89 o Price/earnings ratio 16.7 o Weighted average market capitalization $1.49 billion o % of holdings with positive earnings surprises 73.0% o % of holdings with negative earnings surprises 26.2% o Net assets $556 million ------------------------- LARGE MARKET | ------------------------- CAPITALIZATION | | ------------------------- SMALL X ------------------------- VALUE ------------ GROWTH INVESTMENT STYLE - -------------------------------------------------------------------------------- GROWTH OF A $10,000 INVESTMENT IN THE TURNER EMERGING GROWTH FUND: FEBRUARY 27, 1998-MARCH 31, 2008* [LINE GRAPH]
Russell 2000 INITIAL INVESTMENT DATE TURNER EMERGING GROWTH FUND Growth Index - ----------------------- --------------------------- ------------ 2/27/98 $ 10,000 $10,000 Sep 98 $ 9,882 $ 7,625 Sep 99 $ 21,093 $10,113 Sep 00 $ 48,308 $13,113 Sep 01 $ 38,535 $ 7,528 Sep 02 $ 38,489 $ 6,161 Sep 03 $ 49,709 $ 8,731 Sep 04 $ 61,410 $ 9,772 Sep 05 $ 78,544 $11,528 Sep 06 $ 82,432 $12,206 Sep 07 $103,105 $14,518 Mar 08 $ 91,558 $12,390
- -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDING MARCH 31, 2008)
SIX ONE THREE FIVE TEN SINCE MONTHS YEAR YEARS YEARS YEARS INCEPTION - -------------------------------------------------------------------------------------- TURNER EMERGING GROWTH FUND (11.20)% (0.92)% 9.53% 20.18% 23.83% 24.55% Russell 2000 Growth Index (14.66)% (8.94)% 5.74% 14.24% 1.75% 2.15% - --------------------------------------------------------------------------------------
SECTOR WEIGHTINGS+: [BAR CHART] Cash equivalents/short-term investments++ 22.3% Industrials 20.2% Energy 16.8% Health Care 13.6% Information Technology 7.3% Financials 7.1% Consumer discretionary 6.7% Materials 4.3% Telecommunication services 1.2% Consumer staples 0.3% Utilities 0.2%
MANAGER'S DISCUSSION AND ANALYSIS The six months ended March 31 were an unfavorable period of performance for small-cap stocks. However, the Turner Emerging Growth Fund (TMCGX) produced a good relative return, an 11.20% loss, which beat its benchmark, the Russell 2000 Growth Index. The fund's margin of outperformance versus the index's 14.66% loss amounted to 3.46 percentage points. Four of the fund's 10 sector positions outperformed their corresponding index sectors. Health-care, industrials, and energy holdings, a 51% weighting in aggregate, contributed the most to performance. Biotechnology, specialty-pharmaceutical, medical-device, heavy-equipment, and energy-services shares were especially strong. The primary detractors from performance were the fund's materials, utilities, and telecommunications-services holdings, an 11% weighting. Underperformers here included metals and utility 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. The inception date of the Turner Emerging Growth Fund was February 27, 1998. + Percentages based on total investments. ++ Cash equivalents include short-term investments held as collateral for securities lending activity. Please see Note 10 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 2008 SEMIANNUAL REPORT | 9 INVESTMENT REVIEW - -------------------------------------------------------------------------------- TURNER INTERNATIONAL CORE GROWTH FUND - -------------------------------------------------------------------------------- FUND PROFILE MARCH 31, 2008 o Ticker symbol TICGX o CUSIP #900297771 o Top five holdings++ (1) Nintendo (2) Potash Corp. of Saskatchewan (3) Nestle (4) BG Group (5) International Power o % in five largest holdings 11.1%+ o Number of holdings 65 o Price/earnings ratio 15.5 o Weighted average market capitalization $39.87 billion o % of holdings with positive earnings surprises 46.4% o % of holdings with negative earnings surprises 24.2% o Net assets $5 million ------------------------- LARGE X MARKET | ------------------------- CAPITALIZATION | | ------------------------- SMALL ------------------------- VALUE ------------ GROWTH INVESTMENT STYLE - -------------------------------------------------------------------------------- GROWTH OF A $250,000 INVESTMENT IN THE TURNER INTERNATIONAL CORE GROWTH FUND: JANUARY 31, 2007-MARCH 31, 2008* [LINE GRAPH]
TURNER INTERNATIONAL MSCI World Growth ex-U.S. INITIAL INVESTMENT DATE CORE GROWTH FUND Index - ----------------------- -------------------- ------------------------- 1/31/07 $250,000 $250,000 Mar 07 $254,500 $260,084 Jun 07 $274,750 $278,971 Sep 07 $305,250 $292,634 Dec 07 $321,073 $292,818 Mar 08 $286,240 $269,859
- -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDING MARCH 31, 2008)
SIX ONE SINCE MONTHS YEAR INCEPTION - -------------------------------------------------------------------------------- TURNER INTERNATIONAL CORE GROWTH FUND (6.23)% 12.47% 12.30% MSCI World Growth ex-U.S. Index (7.78)% 3.76% 6.78% - --------------------------------------------------------------------------------
SECTOR WEIGHTINGS+: [BAR CHART] Industrials 14.8% Consumer staples 14.1% Materials 13.9% Information technology 11.1% Financials 10.1% Health care 9.5% Consumer discretionary 9.2% Energy 5.5% Telecommunication services 4.6% Utilities 3.9% Cash equivalents 3.3%
MANAGER'S DISCUSSION AND ANALYSIS In the six months ended March 31, the Turner International Core Growth Fund (TICGX) recorded a loss of 6.23%, which outperformed the MSCI World Growth ex-U.S. Index's 7.78% drop by 1.55 percentage points. It was the best return of any Turner fund in the period, and the world stock markets in aggregate also performed better than their U.S. counterparts. Six of 10 sector positions beat their corresponding index sectors. Adding the most value to results were holdings in four sectors, materials, information technology, financials, and consumer staples, which totaled a 49% weighting. Mining, wireless-communications, international-banking, investment-exchange, and food-processing stocks performed best. Conversely, consumer-discretionary shares, which constituted 9% of the portfolio, impaired performance the most. Retailing, business-services, and diversified industrial stocks produced losses. - -------------------------------------------------------------------------------- * 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 International Core Growth Fund was January 31, 2007. + 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. 10 | TURNER FUNDS 2008 SEMIANNUAL REPORT INVESTMENT REVIEW - -------------------------------------------------------------------------------- TURNER LARGE CAP GROWTH FUND - -------------------------------------------------------------------------------- FUND PROFILE MARCH 31, 2008 o Ticker symbol TSGEX Institutional Class Shares o CUSIP #87252R839 Institutional Class Shares o Top five holdings+++ (1) Cisco Systems (2) Coca-Cola (3) Corning (4) Gilead Sciences (5) QUALCOMM o % in five largest holdings 23.6%+ o Number of holdings 50 o Price/earnings ratio 18.1 o Weighted average market capitalization $63.88 billion o % of holdings with positive earnings surprises 84.6% o % of holdings with negative earnings surprises 12.4% o Net assets $38 million, Institutional Class Shares ------------------------- LARGE X MARKET | ------------------------- CAPITALIZATION | | ------------------------- SMALL ------------------------- VALUE ------------ GROWTH INVESTMENT STYLE - -------------------------------------------------------------------------------- GROWTH OF A $250,000 INVESTMENT IN THE TURNER LARGE CAP GROWTH FUND, INSTITUTIONAL CLASS SHARES: JUNE 14, 2000-MARCH 31, 2008*,** [LINE GRAPH]
TURNER LARGE CAP GROWTH FUND, INITIAL INVESTMENT DATE INSTITUTIONAL CLASS SHARES Russell Top 200 Growth Index Russell 1000 Growth Index ------------------------ ---------------------------- ----------------------------- ------------------------- 6/14/00 $250,000 $250,000 $250,000 Sep 00 $245,248 $238,641 $242,266 Sep 01 $117,498 $132,947 $131,696 Sep 02 $ 87,501 $101,319 $102,051 Sep 03 $115,510 $124,440 $128,503 Sep 04 $120,870 $131,819 $138,153 Sep 05 $135,483 $142,075 $154,179 Sep 06 $140,089 $150,315 $163,491 Sep 07 $170,713 $178,379 $195,127 Mar 08 $144,560 $160,345 $173,917
- -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDING MARCH 31, 2008)
SIX ONE THREE FIVE SINCE MONTHS YEAR YEARS YEARS INCEPTION - -------------------------------------------------------------------------------------------------------- TURNER LARGE CAP GROWTH FUND, INSTITUTIONAL CLASS SHARES (15.32)% (2.19)% 4.77% 9.05% (6.79)%** TURNER LARGE CAP GROWTH FUND, INVESTOR CLASS SHARES (15.53)% (2.58)% -- -- (2.92)%*** Russell Top 200 Growth Index (10.11)% 1.15% 5.90% 8.50% (5.54)%** Russell 1000 Growth Index (10.87)% (0.75)% 6.33% 9.96% (4.55)%** - --------------------------------------------------------------------------------------------------------
SECTOR WEIGHTINGS+: [BAR CHART] Information technology 29.3% Health care 17.7% Consumer discretionary 12.2% Industrials 11.2% Consumer staples 10.7% Financials 6.6% Energy 5.1% Materials 3.0% Cash equivalents/short-term investments++ 2.9% Telecommunication services 1.3%
MANAGER'S DISCUSSION AND ANALYSIS In the six-month period ended March 31, double-digit losses in two large sectors were particularly detrimental to the performance of the Turner Large Cap Growth Fund, Institutional Class (TSGEX). The fund lost 15.32%, which lagged the Russell Top 200 Growth Index's 10.11% decline by 5.21 percentage points. The fund's information-technology and consumer-discretionary positions, representing 42% of the portfolio, hurt results the most. Semiconductor, wireless-communications, data-networking, Internet, and retailing stocks were especially negative. Altogether, five of the fund's nine sector positions outperformed the index sectors. Health-care and energy stocks, a 23% weighting, added the greatest extra return; biotechnology, medical-device, pharmaceutical, and energy-services stocks did well. - -------------------------------------------------------------------------------- * 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 10 in Notes to Financial Statements for more detailed information. +++ Cash equivalents 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 2008 SEMIANNUAL REPORT | 11 INVESTMENT REVIEW - ------------------------------------------------------------------------------- TURNER MIDCAP EQUITY FUND - -------------------------------------------------------------------------------- FUND PROFILE MARCH 31, 2008 o Ticker symbol TMCFX Investor Class Shares o CUSIP #900297797 Investor Class Shares o Top five holdings++ (1) iShares Russell Midcap Index Fund (2) Covanta Holding (3) Range Resources (4) Pediatrix Medical Group (5) Sigma-Aldrich o % in five largest holdings 10.4%+ o Number of holdings 76 o Price/earnings ratio 15.4 o Weighted average market capitalization $4.51 billion o % of holdings with positive earnings surprises 77.0% o % of holdings with negative earnings surprises 23.0% o Net assets $0.5 million, Investor Class Shares ------------------------- LARGE MARKET | ------------------------- CAPITALIZATION | X | ------------------------- SMALL ------------------------- VALUE ------------ GROWTH INVESTMENT STYLE - -------------------------------------------------------------------------------- GROWTH OF A $10,000 INVESTMENT IN THE TURNER MIDCAP EQUITY FUND, INVESTOR CLASS SHARES: JANUARY 31, 2007-MARCH 31, 2008* [LINE GRAPH]
TURNER MIDCAP EQUITY FUND, INITIAL INVESTMENT DATE INVESTOR CLASS SHARES Russell Midcap Index - ------------------------ -------------------------- --------------------- 1/31/07 $10,000 $10,000 Mar 07 $10,130 $10,096 Jun 07 $10,860 $10,631 Sep 07 $10,610 $10,590 Dec 07 $10,370 $10,215 Mar 08 $ 9,100 $ 9,196
- -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDING MARCH 31, 2008)
SIX ONE SINCE MONTHS YEAR INCEPTION - ---------------------------------------------------------------------------------------- TURNER MIDCAP EQUITY FUND, INSTITUTIONAL CLASS SHARES (13.95)% (9.46)% (6.98)% TURNER MIDCAP EQUITY FUND, INVESTOR CLASS SHARES (14.23)% (10.17)% (7.77)% Russell Midcap Index (13.17)% (8.92)% (6.95)% - ----------------------------------------------------------------------------------------
SECTOR WEIGHTINGS+: [BAR CHART] Industrials 18.7% Information technology 15.8% Financials 15.7% Health care 7.9% Materials 7.8% Consumer discretionary 7.3% Consumer staples 6.9% Energy 6.8% Utilities 6.3% Cash equivalents 5.5% Telecommunication services 1.3%
MANAGER'S DISCUSSION AND ANALYSIS The Turner Midcap Equity Fund, Investor Class (TMCFX) recorded a negative return, 14.23%, in the six-month period ended March 31. That return underperformed its benchmark, the Russell Midcap Index, by 1.06 percentage points. Good relative returns in the consumer-discretionary, financials, and health-care sectors, a 31% weighting, added the most value to the fund's results. Retailing, apparel, insurance, managed-care, and pharmaceutical stocks were notable contributors. Altogether, four of the fund's 10 sector positions outperformed their corresponding index sectors. A 26% position in energy and industrials stocks, especially in the energy-production and capital-equipment industries, detracted most from the fund's 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. The inception date of the Turner Midcap Equity Fund was January 31, 2007. Performance of the Institutional and Investor Class Shares will differ due to differences 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. 12 | TURNER FUNDS 2008 SEMIANNUAL REPORT INVESTMENT REVIEW - -------------------------------------------------------------------------------- TURNER MIDCAP GROWTH FUND - -------------------------------------------------------------------------------- FUND PROFILE MARCH 31, 2008 o Ticker symbol TMGFX Investor Class Shares o CUSIP #900297409 Investor Class Shares o Top five holdings+++ (1) Range Resources (2) Weatherford International (3) Flowserve (4) T. Rowe Price Group (5) Owens-Illinois o % in five largest holdings 9.3%+ o Number of holdings 102 o Price/earnings ratio 20 o Weighted average market capitalization $9.75 billion o % of holdings with positive earnings surprises 74.8% o % of holdings with negative earnings surprises 23.6% o Net assets $1 billion, Investor Class Shares ------------------------- LARGE MARKET | ------------------------- CAPITALIZATION | X | ------------------------- SMALL ------------------------- VALUE ------------ GROWTH INVESTMENT STYLE - -------------------------------------------------------------------------------- GROWTH OF A $10,000 INVESTMENT IN THE TURNER MIDCAP GROWTH FUND, INVESTOR CLASS SHARES: SEPTEMBER 30, 1997-MARCH 31, 2008*,** [LINE GRAPH]
TURNER MIDCAP GROWTH FUND, INITIAL INVESTMENT DATE INVESTOR CLASS SHARES Russell Midcap Growth Index - ------------------------ -------------------------- --------------------------- 9/30/97 $10,000 $10,000 Sep 98 $10,124 $ 9,063 Sep 99 $18,635 $12,434 Sep 00 $36,777 $19,940 Sep 01 $15,078 $ 9,617 Sep 02 $11,942 $ 8,126 Sep 03 $16,934 $11,287 Sep 04 $18,190 $12,831 Sep 05 $22,871 $15,843 Sep 06 $23,946 $16,957 Sep 07 $30,947 $20,555 Mar 08 $27,342 $17,994
- -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDING MARCH 31, 2008)
SIX ONE THREE FIVE TEN SINCE MONTHS YEAR YEARS YEARS YEARS INCEPTION - ------------------------------------------------------------------------------------------------------------ TURNER MIDCAP GROWTH FUND, INVESTOR CLASS SHARES (11.65)% 4.61% 9.84% 16.24% 9.07% 12.64%** TURNER MIDCAP GROWTH FUND, RETIREMENT CLASS SHARES (11.74)% 4.39% 9.41% 15.73% -- 9.18%*** Russell Midcap Growth Index (12.46)% (4.55)% 7.77% 15.20% 5.16% 7.69%** - ------------------------------------------------------------------------------------------------------------
SECTOR WEIGHTINGS+: [BAR CHART] Information technology 16.1% Consumer discretionary 15.3% Industrials 15.3% Energy 11.4% Health care 11.2% Financials 9.0% Cash equivalents/short-term investments++ 8.5% Materials 5.8% Consumer staples 3.6% Utilities 2.4% Telecommunication services 1.4%
MANAGER'S DISCUSSION AND ANALYSIS The Turner Midcap Growth Fund, Investor Class (TMGFX) fell 11.65% in the six-month period ended March 31. The fund beat the Russell Midcap Growth Index's 12.46% loss by 0.81 percentage point. Good relative returns in the energy and materials sectors, a 17% weighting, added the most value to the fund's results. Energy-services, metals, and mining stocks were notable contributors. Altogether, seven of 10 sector positions outperformed their corresponding index sectors. A 16% position in information-technology stocks, especially in the wireless-equipment, digital-networking, and semiconductor industries, was the prime detractor from performance. - -------------------------------------------------------------------------------- * 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 Investor and Retirement Class Shares will differ due to differences in fees. ** 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 10 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 2008 SEMIANNUAL REPORT | 13 INVESTMENT REVIEW - -------------------------------------------------------------------------------- TURNER NEW ENTERPRISE FUND - -------------------------------------------------------------------------------- FUND PROFILE MARCH 31, 2008 o Ticker symbol TBTBX o CUSIP #87252R797 o Top five holdings+++ (1) Gilead Sciences (2) Guess? (3) Genzyme (4) Monsanto (5) BioMarin Pharmaceutical o % in five largest holdings 20.9%+ o Number of holdings 38 o Price/earnings ratio 21.9 o Weighted average market capitalization $20.07 billion o % of holdings with positive earnings surprises 71.4% o % of holdings with negative earnings surprises 28.6% o Net assets $56 million ------------------------- LARGE MARKET | ------------------------- CAPITALIZATION | X | ------------------------- SMALL ------------------------- VALUE ------------ GROWTH INVESTMENT STYLE - -------------------------------------------------------------------------------- GROWTH OF A $10,000 INVESTMENT IN THE TURNER NEW ENTERPRISE FUND: JUNE 30, 2000-MARCH 31, 2008* [LINE GRAPH]
INITIAL INVESTMENT DATE TURNER NEW ENTERPRISE FUND NASDAQ Composite Index - ------------------------ -------------------------- ---------------------- 6/30/00 $10,000 $10,000 Sep 00 $12,520 $ 9,264 Sep 01 $ 3,290 $ 3,792 Sep 02 $ 2,270 $ 2,976 Sep 03 $ 4,340 $ 4,556 Sep 04 $ 4,521 $ 4,862 Sep 05 $ 5,861 $ 5,552 Sep 06 $ 6,261 $ 5,875 Sep 07 $ 8,722 $ 7,081 Mar 08 $ 7,162 $ 6,000
- -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDING MARCH 31, 2008)
SIX ONE THREE FIVE SINCE MONTHS YEAR YEARS YEARS INCEPTION - ------------------------------------------------------------------------------- TURNER NEW ENTERPRISE FUND (17.89)% 4.83% 12.42% 21.81% (4.22)% NASDAQ Composite Index (15.27)% (5.12)% 5.28% 11.94% (6.37)% - -------------------------------------------------------------------------------
SECTOR WEIGHTINGS+: [BAR CHART] Information technology 28.9% Health care 21.1% Consumer discretionary 17.6% Industrials 12.2% Cash equivalents/short-term investments++ 8.9% Energy 5.5% Materials 3.6% Financials 2.2%
MANAGER'S DISCUSSION AND ANALYSIS Sizable losses in two principal sectors -- information technology and financials - -- contributed to the Turner New Enterprise Fund (TBTBX) recording a 17.89% loss in the six months ended March 31. The fund trailed the NASDAQ Composite Index's 15.27% loss by 2.62 percentage points. Stocks in the two sectors accounted for 31% of the fund's holdings; weak-performing stocks included semiconductor, data-networking, software, insurance, and investment-exchange shares. Enhancing performance was a 37% position in the health-care, materials, and industrials sectors. Stocks in those sectors that produced good relative returns included biotechnology, specialty-pharmaceutical, health-care-products, metals, mining, and heavy-equipment shares. Four of the fund's seven sector holdings outperformed their corresponding index sectors. - -------------------------------------------------------------------------------- * 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 10 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. 14 | TURNER FUNDS 2008 SEMIANNUAL REPORT INVESTMENT REVIEW - -------------------------------------------------------------------------------- TURNER QUANTITATIVE LARGE CAP VALUE FUND (FORMERLY TURNER LARGE CAP VALUE FUND) - -------------------------------------------------------------------------------- FUND PROFILE MARCH 31, 2008 o Ticker symbol TLVFX o CUSIP #900297821 o Top five holdings++ (1) ExxonMobil (2) AT&T (3) General Electric (4) Chevron (5) Verizon Communications o % in five largest holdings 19.1%+ o Number of holdings 92 o Price/earnings ratio 12.9 o Weighted average market capitalization $90.42 billion o % of holdings with positive earnings surprises 67.1% o % of holdings with negative earnings surprises 28.1% o Net assets $0.9 million ------------------------- LARGE X MARKET | ------------------------- CAPITALIZATION | | ------------------------- SMALL ------------------------- VALUE ------------ GROWTH INVESTMENT STYLE - -------------------------------------------------------------------------------- GROWTH OF A $25,000 INVESTMENT IN THE TURNER QUANTITATIVE LARGE CAP VALUE FUND: OCTOBER 10, 2005-MARCH 31, 2008* [LINE GRAPH]
TURNER QUANTITATIVE INITIAL INVESTMENT DATE LARGE CAP VALUE FUND Russell 1000 Value Index - ----------------------- -------------------- ------------------------ 10/10/05 $25,000 $25,000 Dec 05 $26,068 $26,330 Mar 06 $27,600 $27,891 Jun 06 $27,526 $28,056 Sep 06 $28,731 $29,801 Dec 06 $30,585 $32,185 Mar 07 $31,233 $32,584 Jun 07 $33,254 $34,191 Sep 07 $33,307 $34,109 Dec 07 $33,092 $32,130 Mar 08 $30,314 $29,328
- -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDING MARCH 31, 2008)
SIX ONE SINCE MONTHS YEAR INCEPTION - -------------------------------------------------------------------------------- TURNER QUANTITATIVE LARGE CAP VALUE FUND (8.97)% (2.93)% 8.10% Russell 1000 Value Index (14.01)% (9.99)% 6.67% - --------------------------------------------------------------------------------
SECTOR WEIGHTINGS+: [BAR CHART] Financials 26.0% Energy 16.1% Industrials 12.0% Consumer staples 8.9% Health care 7.4% Utilities 6.9% Consumer discretionary 5.8% Telecommunication services 5.7% Information technology 4.9% Materials 4.8% Cash equivalents 1.5%
MANAGER'S DISCUSSION AND ANALYSIS In the six-month period ended March 31, the Turner Quantitative Large Cap Value Fund (TLVFX) fell 8.97%. But that return was good enough to outdistance the Russell 1000 Value Index, which declined 14.01%, by 5.04 percentage points. The fund's proprietary quantitative model selected stocks that did well in relative terms in eight of 10 market sectors. Financials and materials stocks, a 31% weighting, enhanced performance to the greatest degree. Winners here included investment-management, financial-transaction-processing, insurance, metals, and mining shares. Hurting results the most were consumer-staples stocks, which represented 9% of the portfolio; diversified industrial, food, and beverage stocks were among the 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. The inception date of the Turner Quantitative Large Cap Value Fund was October 10, 2005. + 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 2008 SEMI ANNUAL REPORT | 15 INVESTMENT REVIEW - -------------------------------------------------------------------------------- TURNER SMALL CAP EQUITY FUND - -------------------------------------------------------------------------------- FUND PROFILE MARCH 31, 2008 o Ticker symbol TSEIX o CUSIP #87252R714 o Top five holdings+++ (1) Petroleum Development (2) Clean Harbors (3) Trico Marine Services (4) THQ (5) Plexus o % in five largest holdings 7.3%+ o Number of holdings 100 o Price/earnings ratio 17.2 o Weighted average market capitalization $1.34 billion o % of holdings with positive earnings surprises 73.1% o % of holdings with negative earnings surprises 25.1% o Net assets $44 million ------------------------- LARGE MARKET | ------------------------- CAPITALIZATION | | ------------------------- SMALL X ------------------------- VALUE ------------ GROWTH INVESTMENT STYLE - -------------------------------------------------------------------------------- GROWTH OF A $10,000 INVESTMENT IN THE TURNER SMALL CAP EQUITY FUND: MARCH 4, 2002-MARCH 31, 2008* [LINE GRAPH]
INITIAL INVESTMENT DATE TURNER SMALL CAP EQUITY FUND Russell 2000 Index - ----------------------- ---------------------------- ------------------ 3/4/02 $10,000 $10,000 Sep 02 $ 9,299 $ 7,485 Sep 03 $12,278 $10,217 Sep 04 $15,317 $12,134 Sep 05 $17,671 $14,313 Sep 06 $18,639 $15,732 Sep 07 $20,518 $17,674 Mar 08 $17,652 $15,196
- -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDING MARCH 31, 2008)
SIX ONE THREE FIVE SINCE MONTHS YEAR YEARS YEARS INCEPTION - --------------------------------------------------------------------------------- TURNER SMALL CAP EQUITY FUND (13.97)% (13.07)% 2.51% 13.78% 9.81% Russell 2000 Index (14.02)% (13.00)% 5.06% 14.90% 7.13% - ---------------------------------------------------------------------------------
SECTOR WEIGHTINGS+: [BAR CHART] Information technology 15.9% Industrials 15.5% Financials 12.6% Health care 12.0% Cash equivalents/short-term investments++ 11.4% Energy 8.2% Consumer discretionary 7.5% Materials 6.5% Consumer staples 5.5% Utilities 4.9%
MANAGER'S DISCUSSION AND ANALYSIS The Turner Small Cap Equity Fund (TSEIX) lost 13.97% in the six-month period ended March 31. That return beat the Russell 2000 Index's 14.02% decline by 0.05 percentage point. The fund is invested in both growth and value stocks. Six of the fund's nine sector positions beat their corresponding index sectors. The greatest degree of outperformance was supplied by materials, energy, health-care, and industrials stocks, which represented 42% of the portfolio. Winners included mining, energy-services, biotechnology, and railroad shares. A 16% position in information-technology stocks hurt results the most; aerospace, software, data-networking, and information-services holdings performed poorly. - -------------------------------------------------------------------------------- * 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 Equity Fund was March 4, 2002. + Percentages based on total investments. ++ Cash equivalents include short-term investments held as collateral for securities lending activity. Please see Note 10 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. 16 | TURNER FUNDS 2008 SEMIANNUAL REPORT INVESTMENT REVIEW - -------------------------------------------------------------------------------- TURNER SMALL CAP GROWTH FUND - -------------------------------------------------------------------------------- FUND PROFILE MARCH 31, 2008 o Ticker symbol TSCEX o CUSIP #900297300 o Top five holdings+++ (1) United Therapeutics (2) FTI Consulting (3) Parexel International (4) Perrigo (5) BioMarin Pharmaceutical o % in five largest holdings 7.9%+ o Number of holdings 109 o Price/earnings ratio 19.4 o Weighted average market capitalization $2.12 billion o % of holdings with positive earnings surprises 78.4% o % of holdings with negative earnings surprises 19.2% o Net assets $261 million ------------------------- LARGE MARKET | ------------------------- CAPITALIZATION | | ------------------------- SMALL X ------------------------- VALUE ------------ GROWTH INVESTMENT STYLE - -------------------------------------------------------------------------------- GROWTH OF A $10,000 INVESTMENT IN THE TURNER SMALL CAP GROWTH FUND: SEPTEMBER 30, 1997-MARCH 31, 2008* [LINE GRAPH]
TURNER SMALL CAP Russell 2000 INITIAL INVESTMENT DATE GROWTH FUND Growth Index - ------------------------ ---------------- ------------ 9/30/97 $10,000 $10,000 Sep 98 $ 8,310 $ 7,517 Sep 99 $13,225 $ 9,970 Sep 00 $20,640 $12,927 Sep 01 $10,359 $ 7,421 Sep 02 $ 8,353 $ 6,074 Sep 03 $12,497 $ 8,607 Sep 04 $14,119 $ 9,634 Sep 05 $16,337 $11,365 Sep 06 $17,324 $12,033 Sep 07 $21,831 $14,312 Mar 08 $18,587 $12,214
- -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDING MARCH 31, 2008)
SIX ONE THREE FIVE TEN SINCE MONTHS YEAR YEARS YEARS YEARS INCEPTION - ---------------------------------------------------------------------------------------- TURNER SMALL CAP GROWTH FUND (14.86)% (5.87)% 8.11% 16.60% 5.43% 12.56% Russell 2000 Growth Index (14.66)% (8.94)% 5.74% 14.24% 1.75% 5.48% - ----------------------------------------------------------------------------------------
SECTOR WEIGHTINGS+: [BAR CHART] Health care 17.1% Consumer discretionary 17.0% Information technology 15.0% Industrials 14.1% Cash equivalents/short-term investments++ 13.0% Energy 7.6% Financials 6.4% Materials 5.6% Consumer staples 2.2% Telecommunication services 1.3% Utilities 0.7%
MANAGER'S DISCUSSION AND ANALYSIS In the six-month period ended March 31, the Turner Small Cap Growth Fund (TSCEX) declined 14.86%. The fund's loss represented a modest margin of underperformance, 0.20 percentage point, to that of the Russell 2000 Growth Index, which fell 14.66%. Five of the fund's 10 sector positions beat their index-sector counterparts. The fund's health-care, financials, and industrials stocks, a 38% weighting, performed best in relative terms, recording substantial margins of outperformance over their index counterparts. Winners included biotechnology, medical-device, investment-management, and shipping stocks. A 15% position in information-technology stocks, particularly semiconductor and network-equipment shares, were a drag on performance. - -------------------------------------------------------------------------------- * 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 10 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 2008 SEMIANNUAL REPORT | 17 FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS TURNER CONCENTRATED GROWTH FUND March 31, 2008
Value Shares (000) - -------------------------------------------------------------------------------- COMMON STOCK--95.9%+ - -------------------------------------------------------------------------------- CONSUMER DISCRETIONARY--19.1% - -------------------------------------------------------------------------------- Chipotle Mexican Grill, Cl A* 11,890 $ 1,349 Coach* 37,830 1,141 Focus Media Holding ADR* 15,280 537 GameStop, Cl A* 25,980 1,343 International Game Technology 33,220 1,336 Pulte Homes 91,710 1,334 ---------- Total Consumer discretionary 7,040 ---------- - -------------------------------------------------------------------------------- ENERGY--2.4% - -------------------------------------------------------------------------------- Ultra Petroleum* 11,380 882 ---------- Total Energy 882 ---------- - -------------------------------------------------------------------------------- FINANCIALS--8.5% - -------------------------------------------------------------------------------- CME Group 3,625 1,700 State Street 17,810 1,407 ---------- Total Financials 3,107 ---------- - -------------------------------------------------------------------------------- HEALTH CARE--20.9% - -------------------------------------------------------------------------------- Baxter International 19,390 1,121 BioMarin Pharmaceutical* 39,290 1,390 Charles River Laboratories International* 29,930 1,764 Gilead Sciences* 35,300 1,819 Intuitive Surgical* 4,960 1,609 ---------- Total Health care 7,703 ---------- - -------------------------------------------------------------------------------- INDUSTRIALS--12.1% - -------------------------------------------------------------------------------- Deere 17,840 1,435 First Solar* 6,510 1,505 General Electric 40,450 1,497 ---------- Total Industrials 4,437 ---------- - -------------------------------------------------------------------------------- INFORMATION TECHNOLOGY--29.9% - -------------------------------------------------------------------------------- Applied Materials 79,910 1,559 Cisco Systems* 80,170 1,931 Corning 72,490 1,743 Juniper Networks* 59,130 1,478 MEMC Electronic Materials* 16,840 1,194 QUALCOMM 41,430 1,699 Research In Motion* 12,350 1,386 ---------- Total Information technology 10,990 ---------- Value Shares (000) - -------------------------------------------------------------------------------- MATERIALS--3.0% - -------------------------------------------------------------------------------- Monsanto 9,770 $ 1,089 ---------- Total Materials 1,089 ---------- - -------------------------------------------------------------------------------- TOTAL COMMON STOCK (COST $33,041) 35,248 ================================================================================ - -------------------------------------------------------------------------------- CASH EQUIVALENT--4.2% - -------------------------------------------------------------------------------- BlackRock TempCash Fund Institutional Shares, 3.238%** 1,536,050 1,536 - -------------------------------------------------------------------------------- TOTAL CASH EQUIVALENT (COST $1,536) 1,536 ================================================================================ - -------------------------------------------------------------------------------- TOTAL INVESTMENTS--100.1% (COST $34,577) $ 36,784 ================================================================================
Percentages are based on Net Assets of $36,762.*** * Non-income producing security. ** Rate shown is the 7-day effective yield as of March 31, 2008. *** This number has been rounded to the nearest thousand. + More narrow industries are utilized for compliance purposes, whereas broad sectors are utilized for reporting purposes. ADR -- American Depositary Receipt Cl -- Class The accompanying notes are an integral part of the financial statements. 18 | TURNER FUNDS 2008 SEMIANNUAL REPORT (Unaudited) - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS TURNER CORE GROWTH FUND March 31, 2008
Value Shares (000) - -------------------------------------------------------------------------------- COMMON STOCK--97.7% - -------------------------------------------------------------------------------- CONSUMER DISCRETIONARY--10.2% - -------------------------------------------------------------------------------- Chipotle Mexican Grill, Cl A* 46,990 $ 5,330 Coach* 180,641 5,446 GameStop, Cl A* 125,550 6,492 Guess ? 123,350 4,992 International Game Technology 115,490 4,644 Lowe's 247,920 5,687 Nike, Cl B 56,620 3,850 Nordstrom 146,930 4,790 NVR* # 10,048 6,004 priceline.com* 36,620 4,426 TJX 140,130 4,634 Urban Outfitters* 144,850 4,541 ---------- Total Consumer discretionary 60,836 ---------- - -------------------------------------------------------------------------------- CONSUMER STAPLES--8.3% - -------------------------------------------------------------------------------- Coca-Cola 340,670 20,737 Colgate-Palmolive 132,970 10,360 CVS Caremark 168,020 6,806 Fomento Economico Mexicano ADR 136,950 5,722 Molson Coors Brewing, Cl B 121,020 6,362 ---------- Total Consumer staples 49,987 ---------- - -------------------------------------------------------------------------------- ENERGY--13.0% - -------------------------------------------------------------------------------- Cameron International* 190,730 7,942 Consol Energy 122,050 8,445 Petroleo Brasileiro ADR 149,590 15,275 Range Resources 99,810 6,333 Southwestern Energy* 195,820 6,597 Weatherford International* 194,760 14,114 Williams 212,860 7,020 XTO Energy 194,202 12,013 ---------- Total Energy 77,739 ---------- - -------------------------------------------------------------------------------- FINANCIALS--15.8% - -------------------------------------------------------------------------------- Aflac 162,380 10,547 BlackRock, Cl A # 35,830 7,316 Charles Schwab 531,120 10,001 Chubb 189,420 9,372 CME Group 22,210 10,419 Goldman Sachs Group 56,290 9,310 Value Shares (000) - -------------------------------------------------------------------------------- Northern Trust 118,960 $ 7,907 People's United Financial 139,930 2,422 PNC Financial Services Group 120,750 7,918 Public Storage^ 27,240 2,414 State Street 103,870 8,206 T. Rowe Price Group 169,790 8,489 ---------- Total Financials 94,321 ---------- - -------------------------------------------------------------------------------- HEALTH CARE--12.6% - -------------------------------------------------------------------------------- Allergan 125,740 7,091 Baxter International 184,770 10,683 Becton Dickinson 46,920 4,028 BioMarin Pharmaceutical* 63,530 2,247 Genentech* 76,360 6,199 Genzyme* 78,670 5,864 Gilead Sciences* 280,070 14,432 Intuitive Surgical* 18,030 5,848 Teva Pharmaceutical Industries 93,190 4,304 Thermo Fisher Scientific* 130,900 7,440 Zimmer Holdings* 91,940 7,159 ---------- Total Health care 75,295 ---------- - -------------------------------------------------------------------------------- INDUSTRIALS--10.4% - -------------------------------------------------------------------------------- Deere 150,120 12,076 Expeditors International of Washington 94,550 4,272 First Solar* 28,980 6,698 General Electric 760,770 28,156 SPX 45,980 4,823 Union Pacific 51,540 6,462 ---------- Total Industrials 62,487 ---------- - -------------------------------------------------------------------------------- INFORMATION TECHNOLOGY--17.9% - -------------------------------------------------------------------------------- Activision* 177,150 4,838 Akamai Technologies* 74,100 2,087 Apple* 100,020 14,353 Applied Materials 670,150 13,075 Cisco Systems* 693,300 16,702 Corning 612,570 14,726 Dolby Laboratories, Cl A* 44,380 1,609 Fiserv* 14,170 681 MEMC Electronic Materials* 48,450 3,435
TURNER FUNDS 2008 SEMIANNUAL REPORT | 19 FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS TURNER CORE GROWTH FUND
Value Shares (000) - -------------------------------------------------------------------------------- Microchip Technology 97,200 $ 3,181 QUALCOMM 334,570 13,717 Research In Motion* 88,930 9,981 VeriSign* 119,870 3,984 Visa, Cl A* 81,460 5,080 ---------- Total Information technology 107,449 ---------- - -------------------------------------------------------------------------------- MATERIALS--3.8% - -------------------------------------------------------------------------------- Monsanto 113,950 12,705 Mosaic* 53,460 5,485 Owens-Illinois* 79,280 4,474 ---------- Total Materials 22,664 ---------- - -------------------------------------------------------------------------------- TELECOMMUNICATION SERVICES--4.2% - -------------------------------------------------------------------------------- America Movil ADR, Ser L 182,310 11,611 Millicom International Cellular* 64,448 6,094 Tele Norte Leste Participacoes ADR # 289,490 7,683 ---------- Total Telecommunication services 25,388 ---------- - -------------------------------------------------------------------------------- UTILITIES--1.5% - -------------------------------------------------------------------------------- Constellation Energy Group 101,660 8,974 ---------- Total Utilities 8,974 ---------- - -------------------------------------------------------------------------------- TOTAL COMMON STOCK (COST $566,753) 585,140 ================================================================================ Value Shares (000) - -------------------------------------------------------------------------------- CASH EQUIVALENT--5.7% - -------------------------------------------------------------------------------- BlackRock TempCash Fund Institutional Shares, 3.238%** (1) 34,144,636 $ 34,145 - -------------------------------------------------------------------------------- TOTAL CASH EQUIVALENT (COST $34,145) 34,145 ================================================================================ - -------------------------------------------------------------------------------- TOTAL INVESTMENTS--103.4% (COST $600,898) $ 619,285 ================================================================================
Percentages are based on Net Assets of $598,797.*** * Non-income producing security. ** Rate shown is the 7-day effective yield as of March 31, 2008. *** This number has been rounded to the nearest thousand. ^ Real Estate Investment Trust # Security fully or partially on loan at March 31, 2008. The total value of securities on loan at March 31, 2008, was $13,624,042. (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 pooled investment 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 or a partial position of this security was purchased with cash collateral received from securities lending. The total value of such security at March 31, 2008 was $13,761,773. ADR -- American Depositary Receipt Cl -- Class Ser -- Series The accompanying notes are an integral part of the financial statements. 20 | TURNER FUNDS 2008 SEMIANNUAL REPORT (Unaudited) - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS TURNER EMERGING GROWTH FUND March 31, 2008
Value Shares (000) - -------------------------------------------------------------------------------- COMMON STOCK--81.4% - -------------------------------------------------------------------------------- CONSUMER DISCRETIONARY--7.4% - -------------------------------------------------------------------------------- American Public Education* 28,420 $ 863 California Pizza Kitchen* 241,830 3,170 Deckers Outdoor* 206,780 22,295 DG FastChannel* 114,890 2,204 Great Wolf Resorts* 248,286 1,584 New Oriental Education & Technology Group ADR* 54,570 3,540 Red Robin Gourmet Burgers* 84,140 3,161 Volcom* 202,230 4,087 ---------- Total Consumer discretionary 40,904 ---------- - -------------------------------------------------------------------------------- CONSUMER STAPLES--0.4% - -------------------------------------------------------------------------------- Boston Beer, Cl A* 40,924 1,945 ---------- Total Consumer staples 1,945 ---------- - -------------------------------------------------------------------------------- ENERGY--18.5% - -------------------------------------------------------------------------------- Bolt Technology* # 141,825 2,614 Carrizo Oil & Gas* 145,170 8,604 Dawson Geophysical* 82,820 5,590 ION Geophysical* 354,730 4,895 Lufkin Industries 55,260 3,527 NATCO Group, Cl A* 217,385 10,163 Oceaneering International* 155,930 9,824 Penn Virginia 190,740 8,410 PetroHawk Energy* 530,454 10,699 Petroleum Development* 73,540 5,094 StealthGas 143,010 2,224 T-3 Energy Services* 121,040 5,151 Trico Marine Services* 79,990 3,117 W-H Energy Services* 166,710 11,478 Willbros Group* 372,092 11,386 ---------- Total Energy 102,776 ---------- - -------------------------------------------------------------------------------- FINANCIALS--3.9% - -------------------------------------------------------------------------------- American Physicians Capital 133,760 6,201 Harleysville Group 96,680 3,489 IBERIABANK 57,480 2,544 Meadowbrook Insurance Group 334,740 2,614 National Interstate 54,100 1,263 Navigators Group* 107,460 5,846 ---------- Total Financials 21,957 ---------- Value Shares (000) - -------------------------------------------------------------------------------- HEALTH CARE--14.9% - -------------------------------------------------------------------------------- Acorda Therapeutics* # 271,740 $ 4,878 Air Methods* 80,442 3,891 Alexion Pharmaceuticals* 59,350 3,519 Cepheid* 30,838 752 HMS Holdings* 131,900 3,766 Hologic* 164,570 9,150 Icon ADR* 152,810 9,916 IPC The Hospitalist* 153,354 3,033 Kendle International* # 145,860 6,552 MWI Veterinary Supply* 109,620 3,865 Omnicell* 282,970 5,688 Parexel International* 466,854 12,185 PharmaNet Development Group* 241,370 6,090 Rigel Pharmaceuticals* 154,260 2,879 XenoPort* 169,340 6,853 ---------- Total Health care 83,017 ---------- - -------------------------------------------------------------------------------- INDUSTRIALS--22.1% - -------------------------------------------------------------------------------- AAR* 275,120 7,503 Barnes Group 233,570 5,360 Bucyrus International, Cl A 236,200 24,010 CBIZ* 563,340 4,574 Clean Harbors* 88,970 5,783 EnPro Industries* 158,980 4,959 Genesee & Wyoming, Cl A* 107,335 3,692 Genesis Lease ADR 111,900 1,628 GeoEye* 63,360 1,647 Heico # 133,480 6,507 HUB Group, Cl A* 82,694 2,720 Hurco* 51,143 2,393 II-VI* 187,210 7,110 Kenexa* 276,900 5,117 Ladish* 197,790 7,121 LMI Aerospace* 184,940 3,582 Middleby* # 153,210 9,559 Powell Industries* 80,360 3,164 Robbins & Myers 127,240 4,154 Titan International 118,960 3,641 Triumph Group # 155,190 8,835 ---------- Total Industrials 123,059 ----------
TURNER FUNDS 2008 SEMIANNUAL REPORT | 21 FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS TURNER EMERGING GROWTH FUND
Value Shares (000) - -------------------------------------------------------------------------------- INFORMATION TECHNOLOGY--8.0% - -------------------------------------------------------------------------------- Actuate* 401,870 $ 1,648 Advanced Analogic Technologies* 337,410 1,896 Ansys* 276,860 9,557 Blue Coat Systems* 99,130 2,185 comScore* 82,710 1,659 Comtech Group* 244,090 2,634 Comtech Telecommunications* 100,365 3,914 Cybersource* 250,236 3,656 Network Equipment Technologies* # 279,530 1,836 Phoenix Technologies* 149,440 2,340 Rofin-Sinar Technologies* 93,160 4,183 SPSS* 86,170 3,342 Stratasys* # 238,330 4,242 Yucheng Technologies* # 93,690 1,551 ---------- Total Information technology 44,643 ---------- - -------------------------------------------------------------------------------- MATERIALS--4.7% - -------------------------------------------------------------------------------- Calgon Carbon* # 147,070 2,214 RTI International Metals* 108,647 4,912 Terra Industries* 530,040 8,832 ---------- Total Materials 25,958 ---------- - -------------------------------------------------------------------------------- TELECOMMUNICATION SERVICES--1.3% - -------------------------------------------------------------------------------- NTELOS Holdings 150,650 3,646 PAETEC Holding* 575,050 3,830 ---------- Total Telecommunication services 7,476 ---------- - -------------------------------------------------------------------------------- UTILITIES--0.2% - -------------------------------------------------------------------------------- Artesian Resources, Cl A 57,705 1,069 ---------- Total Utilities 1,069 ---------- - -------------------------------------------------------------------------------- TOTAL COMMON STOCK (COST $340,608) 452,804 ================================================================================ - -------------------------------------------------------------------------------- REGISTERED INVESTMENT COMPANY--3.9% - -------------------------------------------------------------------------------- iShares Russell 2000 Growth Index Fund # 94,150 6,858 iShares Russell 2000 Index Fund # 215,550 14,767 - -------------------------------------------------------------------------------- TOTAL REGISTERED INVESTMENT COMPANY (COST $22,333) 21,625 ================================================================================ Value Shares (000) - -------------------------------------------------------------------------------- CASH EQUIVALENT--24.4% - -------------------------------------------------------------------------------- BlackRock TempCash Fund Institutional Shares, 3.238%** (1) 135,811,453 $ 135,811 - -------------------------------------------------------------------------------- TOTAL CASH EQUIVALENT (COST $135,811) 135,811 ================================================================================ - -------------------------------------------------------------------------------- TOTAL INVESTMENTS--109.7% (COST $498,752) $ 610,240 ================================================================================
Percentages are based on Net Assets of $556,421.*** * Non-income producing security. ** Rate shown is the 7-day effective yield as of March 31, 2008. *** This number has been rounded to the nearest thousand. # Security fully or partially on loan at March 31, 2008. The total value of securities on loan at March 31, 2008, was $55,809,083. (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 pooled investment 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 or a partial position of this security was purchased with cash collateral received from securities lending. The total value of such security at March 31, 2008 was $57,492,362. ADR -- American Depositary Receipt Cl -- Class The accompanying notes are an integral part of the financial statements. 22 | TURNER FUNDS 2008 SEMIANNUAL REPORT (Unaudited) - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS TURNER INTERNATIONAL CORE GROWTH FUND March 31, 2008
Value Shares (000) - -------------------------------------------------------------------------------- COMMON STOCK--95.2% - -------------------------------------------------------------------------------- CONSUMER DISCRETIONARY--8.2% - -------------------------------------------------------------------------------- Central European Media Enterprises, Cl A* 770 $ 65 CTC Media GDR* 2,050 57 Daimler 691 59 Focus Media Holding ADR* 1,700 60 Gafisa 2,540 42 Matsushita Electric Industrial 4,000 87 ---------- Total Consumer discretionary 370 ---------- - -------------------------------------------------------------------------------- CONSUMER STAPLES--14.3% - -------------------------------------------------------------------------------- Beiersdorf 838 70 British American Tobacco 2,390 90 Coca-Cola Femsa 11,300 64 Coca-Cola Hellenic Bottling 1,600 75 Cosan, Cl A* 5,070 62 Diageo 3,590 72 L'Oreal 422 54 Nestle 194 97 Shiseido 2,320 61 ---------- Total Consumer staples 645 ---------- - -------------------------------------------------------------------------------- ENERGY--5.6% - -------------------------------------------------------------------------------- Acergy 3,737 80 BG Group 4,090 95 Transocean 570 77 ---------- Total Energy 252 ---------- - -------------------------------------------------------------------------------- FINANCIALS--10.2% - -------------------------------------------------------------------------------- Arch Capital Group* 1,090 75 Banco Santander Chile 1,203,365 61 Deutsche Boerse 480 77 Julius Baer Holding 980 72 Standard Bank Group 1 -- Standard Chartered 2,581 88 Sumitomo Mitsui Financial Group 7 46 Unibanco - Uniao de Bancos Brasileiros 3,658 43 ---------- Total Financials 462 ---------- Value Shares (000) - -------------------------------------------------------------------------------- HEALTH CARE--9.6% - -------------------------------------------------------------------------------- Alcon 520 $ 74 CSL 2,520 85 Icon ADR* 1,060 69 Novo Nordisk, Cl B 1,140 78 Roche Holding 360 68 Teva Pharmaceutical Industries 1,320 61 ---------- Total Health care 435 ---------- - -------------------------------------------------------------------------------- INDUSTRIALS--14.9% - -------------------------------------------------------------------------------- Alstom 310 67 Canadian National Railway 1,060 51 CNH Global 1,280 67 Empresa Brasileira de Aeronautica 5,249 52 Grupo Aeroportuario del Pacifico ADR 1,230 55 Intertek Group 1,810 37 Koninklijke Philips Electronics 1,627 62 Kuehne & Nagel International 748 75 McDermott International* 1,210 66 Tyco International 1,600 71 Vestas Wind Systems 636 70 ---------- Total Industrials 673 ---------- - -------------------------------------------------------------------------------- INFORMATION TECHNOLOGY--11.1% - -------------------------------------------------------------------------------- High Tech Computer 4,000 90 Hitachi 12,190 72 Nintendo 216 112 Research In Motion* 554 62 Samsung Electronics 100 63 Tyco Electronics 1,780 61 UBISOFT Entertainment* 520 45 ---------- Total Information technology 505 ---------- - -------------------------------------------------------------------------------- MATERIALS--14.0% - -------------------------------------------------------------------------------- Agnico-Eagle Mines 1,260 86 ArcelorMittal 928 76 Cia Vale do Rio Doce 2,010 70 First Quantum Minerals 912 74 Mechel 530 60 Potash Corp. of Saskatchewan 712 111 Syngenta 250 73 Xstrata 1,220 85 ---------- Total Materials 635 ----------
TURNER FUNDS 2008 SEMIANNUAL REPORT | 23 FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS TURNER INTERNATIONAL CORE GROWTH FUND
Value Shares (000) - -------------------------------------------------------------------------------- TELECOMMUNICATION SERVICES--3.4% - -------------------------------------------------------------------------------- America Movil, Ser L 29,310 $ 93 Millicom International Cellular* 660 63 ---------- Total Telecommunication services 156 ---------- - -------------------------------------------------------------------------------- UTILITIES--3.9% - -------------------------------------------------------------------------------- Iberdrola Renovables* 11,734 82 International Power 11,976 94 ---------- Total Utilities 176 ---------- - -------------------------------------------------------------------------------- TOTAL COMMON STOCK (COST $4,077) 4,309 ================================================================================ - -------------------------------------------------------------------------------- PREFERRED STOCK--2.3% - -------------------------------------------------------------------------------- CONSUMER DISCRETIONARY--1.1% - -------------------------------------------------------------------------------- Lojas Americanas 6,618 49 ---------- Total Consumer discretionary 49 ---------- - -------------------------------------------------------------------------------- TELECOMMUNICATION SERVICES--1.2% - -------------------------------------------------------------------------------- Brasil Telecom Participacoes 4,109 54 ---------- Total Telecommunication services 54 ---------- - -------------------------------------------------------------------------------- TOTAL PREFERRED STOCK (COST $112) 103 ================================================================================ - -------------------------------------------------------------------------------- CASH EQUIVALENT--3.3% - -------------------------------------------------------------------------------- BlackRock TempCash Fund Institutional Shares, 3.238%** 151,187 151 - -------------------------------------------------------------------------------- TOTAL CASH EQUIVALENT (COST $151) 151 ================================================================================ - -------------------------------------------------------------------------------- TOTAL INVESTMENTS--100.8% (COST $4,340) $ 4,563 ================================================================================
Percentages are based on Net Assets of $4,526.*** * Non-income producing security. ** Rate shown is the 7-day effective yield as of March 31, 2008. *** This number has been rounded to the nearest thousand. ADR -- American Depositary Receipt Cl -- Class GDR -- Global Depositary Receipt Ser -- Series The accompanying notes are an integral part of the financial statements. 24 | TURNER FUNDS 2008 SEMIANNUAL REPORT (Unaudited) - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS TURNER LARGE CAP GROWTH FUND March 31, 2008
Value Shares (000) - -------------------------------------------------------------------------------- COMMON STOCK--97.8%+ - -------------------------------------------------------------------------------- CONSUMER DISCRETIONARY--12.3% - -------------------------------------------------------------------------------- Coach* 21,630 $ 652 GameStop, Cl A* 16,650 861 International Game Technology 15,400 619 Lowe's 22,280 511 Nike, Cl B 5,180 352 Nordstrom 16,730 546 TJX 19,160 634 Viacom, Cl B* 13,520 536 ---------- Total Consumer discretionary 4,711 ---------- - -------------------------------------------------------------------------------- CONSUMER STAPLES--10.8% - -------------------------------------------------------------------------------- Coca-Cola 33,780 2,056 Colgate-Palmolive 12,000 935 CVS Caremark 16,690 676 Fomento Economico Mexicano ADR 11,100 464 ---------- Total Consumer staples 4,131 ---------- - -------------------------------------------------------------------------------- ENERGY--5.2% - -------------------------------------------------------------------------------- Petroleo Brasileiro ADR 5,930 606 Transocean 2,960 400 Weatherford International* 5,690 412 XTO Energy 9,122 564 ---------- Total Energy 1,982 ---------- - -------------------------------------------------------------------------------- FINANCIALS--6.6% - -------------------------------------------------------------------------------- Aflac 4,090 266 BlackRock, Cl A # 1,940 396 CME Group 1,175 551 Goldman Sachs Group 2,290 379 PNC Financial Services Group 5,140 337 State Street 3,380 267 T. Rowe Price Group 7,190 359 ---------- Total Financials 2,555 ---------- - -------------------------------------------------------------------------------- HEALTH CARE--17.8% - -------------------------------------------------------------------------------- Alcon 3,130 445 Allergan 11,280 636 Baxter International 15,330 886 Value Shares (000) - -------------------------------------------------------------------------------- Becton Dickinson 6,510 $ 559 Genentech* 8,940 726 Genzyme* 7,530 561 Gilead Sciences* 30,310 1,562 Thermo Fisher Scientific* 15,210 865 Zimmer Holdings* 7,570 590 ---------- Total Health care 6,830 ---------- - -------------------------------------------------------------------------------- INDUSTRIALS--11.3% - -------------------------------------------------------------------------------- Deere 14,410 1,159 Expeditors International of Washington 15,160 685 First Solar* 3,320 768 General Electric 30,500 1,129 Union Pacific 4,700 589 ---------- Total Industrials 4,330 ---------- - -------------------------------------------------------------------------------- INFORMATION TECHNOLOGY--29.5% - -------------------------------------------------------------------------------- Accenture, Cl A 12,120 426 Apple* 10,080 1,446 Applied Materials 63,740 1,244 Cisco Systems* 91,330 2,200 Corning 74,310 1,786 Juniper Networks* 31,980 800 MEMC Electronic Materials* 14,110 1,000 QUALCOMM 37,070 1,520 Research In Motion* 8,070 906 ---------- Total Information technology 11,328 ---------- - -------------------------------------------------------------------------------- MATERIALS--3.0% - -------------------------------------------------------------------------------- Monsanto 7,300 814 Mosaic* 3,480 357 ---------- Total Materials 1,171 ---------- - -------------------------------------------------------------------------------- TELECOMMUNICATION SERVICES--1.3% - -------------------------------------------------------------------------------- America Movil ADR, Ser L 7,630 486 ---------- Total Telecommunication services 486 ---------- - -------------------------------------------------------------------------------- TOTAL COMMON STOCK (COST $35,000) 37,524 ================================================================================
TURNER FUNDS 2008 SEMIANNUAL REPORT | 25 FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS TURNER LARGE CAP GROWTH FUND
Value Shares (000) - -------------------------------------------------------------------------------- CASH EQUIVALENT--2.9% - -------------------------------------------------------------------------------- BlackRock TempCash Fund Institutional Shares, 3.238%** (1) 1,110,443 $ 1,110 - -------------------------------------------------------------------------------- TOTAL CASH EQUIVALENT (COST $1,110) 1,110 ================================================================================ - -------------------------------------------------------------------------------- TOTAL INVESTMENTS--100.7% (COST $36,110) $ 38,634 ================================================================================
Percentages are based on Net Assets of $38,352.*** * Non-income producing security. ** Rate shown is the 7-day effective yield as of March 31, 2008. *** This number has been rounded to the nearest thousand. + More narrow industries are utilized for compliance purposes, whereas broad sectors are utilized for reporting purposes. # Security fully or partially on loan at March 31, 2008. The total value of securities on loan at March 31, 2008, was $378,860. (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 pooled investment 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 or a partial position of this security was purchased with cash collateral received from securities lending. The total value of such security at March 31, 2008 was $392,484. ADR--American Depositary Receipt Cl--Class Ser--Series The accompanying notes are an integral part of the financial statements. 26 | TURNER FUNDS 2008 SEMIANNUAL REPORT (Unaudited) - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS TURNER MIDCAP EQUITY FUND March 31, 2008
Value Shares (000) - -------------------------------------------------------------------------------- COMMON STOCK--91.8% - -------------------------------------------------------------------------------- CONSUMER DISCRETIONARY--7.2% - -------------------------------------------------------------------------------- American Eagle Outfitters 240 $ 4 CTC Media GDR* 300 8 Goodyear Tire & Rubber* 175 5 Hanesbrands* 290 8 PetSmart 170 3 Sally Beauty Holdings* 805 6 WABCO Holdings 170 8 ---------- Total Consumer discretionary 42 ---------- - -------------------------------------------------------------------------------- CONSUMER STAPLES--6.9% - -------------------------------------------------------------------------------- Alberto-Culver, Cl B 310 8 Church & Dwight 160 9 Hormel Foods 190 8 Molson Coors Brewing, Cl B 165 9 PepsiAmericas 260 6 ---------- Total Consumer staples 40 ---------- - -------------------------------------------------------------------------------- ENERGY--6.7% - -------------------------------------------------------------------------------- Denbury Resources* 280 8 Exterran Holdings* 80 5 Mariner Energy* 280 8 Range Resources 180 11 Superior Energy Services* 180 7 ---------- Total Energy 39 ---------- - -------------------------------------------------------------------------------- FINANCIALS--13.2% - -------------------------------------------------------------------------------- Alexandria Real Estate Equities 60 6 Arch Capital Group* 130 9 Douglas Emmett 280 6 Everest Re Group 45 4 Federated Investors, Cl B 215 8 Hanover Insurance Group 160 7 IntercontinentalExchange* 60 8 NASDAQ OMX Group* 210 8 Nymex Holdings 60 6 Rayonier 170 7 SLM 265 4 Washington Federal 190 4 ---------- Total Financials 77 ---------- Value Shares (000) - -------------------------------------------------------------------------------- HEALTH CARE--7.9% - -------------------------------------------------------------------------------- AmerisourceBergen, Cl A 100 $ 4 BioMarin Pharmaceutical* 215 8 Charles River Laboratories International* 105 6 Henry Schein* 135 8 Hospira* 220 9 Pediatrix Medical Group* 160 11 ---------- Total Health care 46 ---------- - -------------------------------------------------------------------------------- INDUSTRIALS--18.6% - -------------------------------------------------------------------------------- Alliant Techsystems* 70 7 Armstrong World Industries 175 6 Brink's 130 9 Corrections Corp. of America* 310 8 Covanta Holding* 480 13 FTI Consulting* 135 9 Harsco 145 8 Hexcel* 250 5 Kansas City Southern* 70 3 Kirby* 170 10 Lincoln Electric Holdings 90 6 Manitowoc 220 9 Republic Services, Cl A 270 8 Roper Industries 115 7 ---------- Total Industrials 108 ---------- - -------------------------------------------------------------------------------- INFORMATION TECHNOLOGY--15.8% - -------------------------------------------------------------------------------- Alliance Data Systems* 155 7 Amphenol, Cl A 195 7 BMC Software* 265 9 Ciena* 180 5 Convergys* 460 7 Global Payments 185 8 Hewitt Associates, Cl A* 140 6 Intersil, Cl A 210 5 Itron* 90 8 McAfee* 290 10 Novell* 1,075 7 Sybase* 385 10 Synopsys* 130 3 ---------- Total Information technology 92 ----------
TURNER FUNDS 2008 SEMIANNUAL REPORT | 27 FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS TURNER MIDCAP EQUITY FUND
Value Shares (000) - -------------------------------------------------------------------------------- MATERIALS--7.7% - -------------------------------------------------------------------------------- Allegheny Technologies 70 $ 5 Carpenter Technology 120 7 Celanese, Ser A 235 9 Fording Canadian Coal Trust 140 7 Sigma-Aldrich 180 11 Steel Dynamics 190 6 ---------- Total Materials 45 ---------- - -------------------------------------------------------------------------------- TELECOMMUNICATION SERVICES--1.4% - -------------------------------------------------------------------------------- SBA Communications, Cl A* 250 8 ---------- Total Telecommunication services 8 ---------- - -------------------------------------------------------------------------------- UTILITIES--6.4% - -------------------------------------------------------------------------------- Allegheny Energy 115 6 Equitable Resources 110 6 MDU Resources Group 280 7 National Fuel Gas 205 10 NSTAR 250 8 ---------- Total Utilities 37 ---------- - -------------------------------------------------------------------------------- TOTAL COMMON STOCK (COST $533) 534 ================================================================================ - -------------------------------------------------------------------------------- REGISTERED INVESTMENT COMPANY--2.4% - -------------------------------------------------------------------------------- iShares Russell Midcap Index Fund 150 14 - -------------------------------------------------------------------------------- TOTAL REGISTERED INVESTMENT COMPANY (COST $13) 14 ================================================================================ - -------------------------------------------------------------------------------- CASH EQUIVALENT--5.5% - -------------------------------------------------------------------------------- BlackRock TempCash Fund Institutional Shares, 3.238%** 31,863 32 - -------------------------------------------------------------------------------- TOTAL CASH EQUIVALENT (COST $32) 32 ================================================================================ - -------------------------------------------------------------------------------- TOTAL INVESTMENTS--99.7% (COST $578) $ 580 ================================================================================
Percentages are based on Net Assets of $582.*** * Non-income producing security. ** Rate shown is the 7-day effective yield as of March 31, 2008. *** This number has been rounded to the nearest thousand. Cl -- Class GDR -- Global Depositary Reciept Ser -- Series The accompanying notes are an integral part of the financial statements. 28 | TURNER FUNDS 2008 SEMIANNUAL REPORT (Unaudited) - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS TURNER MIDCAP GROWTH FUND March 31, 2008
Value Shares (000) - -------------------------------------------------------------------------------- COMMON STOCK--97.0% - -------------------------------------------------------------------------------- CONSUMER DISCRETIONARY--16.2% - -------------------------------------------------------------------------------- Central European Media Enterprises, Cl A* 93,632 $ 7,980 Chipotle Mexican Grill, Cl A* # 84,020 9,530 Coach* 437,220 13,182 Darden Restaurants 246,980 8,039 Dick's Sporting Goods* 204,390 5,474 DR Horton 535,802 8,439 Focus Media Holding ADR* # 224,982 7,908 GameStop, Cl A* 328,030 16,962 Guess ? 477,207 19,313 International Game Technology 416,742 16,757 Nordstrom 429,710 14,009 priceline.com* # 107,690 13,015 Pulte Homes 830,100 12,078 TJX 498,648 16,490 Urban Outfitters* 389,050 12,197 WMS Industries* 410,605 14,770 Wynn Resorts 81,957 8,248 ---------- Total Consumer discretionary 204,391 ---------- - -------------------------------------------------------------------------------- CONSUMER STAPLES--3.8% - -------------------------------------------------------------------------------- Alberto-Culver, Cl B 598,770 16,412 Central European Distribution* # 159,140 9,260 Chattem* # 119,120 7,903 Molson Coors Brewing, Cl B 270,020 14,195 ---------- Total Consumer staples 47,770 ---------- - -------------------------------------------------------------------------------- ENERGY--12.1% - -------------------------------------------------------------------------------- Consol Energy 254,160 17,585 Denbury Resources* 289,920 8,277 Diamond Offshore Drilling 105,380 12,266 National Oilwell Varco* 140,840 8,222 Quicksilver Resources* 431,910 15,778 Range Resources 449,935 28,549 Southwestern Energy* 383,380 12,916 Ultra Petroleum* 127,340 9,869 Weatherford International* 369,130 26,751 Williams 372,070 12,271 ---------- Total Energy 152,484 ---------- Value Shares (000) - -------------------------------------------------------------------------------- FINANCIALS--9.6% - -------------------------------------------------------------------------------- AON 234,080 $ 9,410 Assurant 160,170 9,748 BlackRock, Cl A # 101,420 20,708 Federated Investors, Cl B 178,412 6,987 Hudson City Bancorp 802,110 14,181 Interactive Brokers Group, Cl A* 247,753 6,360 IntercontinentalExchange* 69,080 9,015 Northern Trust 217,326 14,446 Public Storage 81,060 7,183 T. Rowe Price Group 456,802 22,840 ---------- Total Financials 120,878 ---------- - -------------------------------------------------------------------------------- HEALTH CARE--11.8% - -------------------------------------------------------------------------------- Alexion Pharmaceuticals* 130,990 7,768 Allergan 321,420 18,125 BioMarin Pharmaceutical* 334,833 11,843 Charles River Laboratories International* 196,860 11,603 Covance* 75,200 6,239 CR Bard 83,740 8,072 Dentsply International 242,950 9,378 Express Scripts* 338,070 21,745 Henry Schein* 200,769 11,524 Hologic* 137,600 7,651 Intuitive Surgical* 54,330 17,622 Shire ADR 143,450 8,314 United Therapeutics* # 104,650 9,073 ---------- Total Health care 148,957 ---------- - -------------------------------------------------------------------------------- INDUSTRIALS--16.2% - -------------------------------------------------------------------------------- AGCO* 329,120 19,708 Ametek 374,410 16,440 Covanta Holding* 256,330 7,049 CSX 239,330 13,419 Expeditors International of Washington 345,200 15,596 First Solar* 63,680 14,719 Flowserve 231,960 24,212 Fluor 67,940 9,590 FTI Consulting* 176,470 12,537 Harsco 217,100 12,023
TURNER FUNDS 2008 SEMIANNUAL REPORT | 29 FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS TURNER MIDCAP GROWTH FUND
Value Shares (000) - -------------------------------------------------------------------------------- Joy Global 178,850 $ 11,654 Precision Castparts 74,580 7,613 Ryder System 120,550 7,343 Shaw Group* 190,300 8,971 SPX 117,300 12,305 Stericycle* 205,030 10,559 ---------- Total Industrials 203,738 ---------- - -------------------------------------------------------------------------------- INFORMATION TECHNOLOGY--17.0% - -------------------------------------------------------------------------------- Activision* 427,630 11,679 Akamai Technologies* 322,480 9,081 Altera 683,070 12,589 Atheros Communications* 288,956 6,022 Cavium Networks* # 420,449 6,895 Dolby Laboratories, Cl A* 110,358 4,002 Informatica* 739,280 12,612 Juniper Networks* 596,140 14,903 Mastercard, Cl A 83,730 18,671 McAfee* 490,650 16,236 MEMC Electronic Materials* 224,930 15,948 Microchip Technology # 491,790 16,096 Micros Systems* 31,910 1,074 Omniture* # 315,260 7,317 Salesforce.com* 259,840 15,037 Varian Semiconductor Equipment Associates* 472,040 13,288 VeriSign* 460,954 15,322 VistaPrint* # 275,860 9,641 Websense* 433,701 8,132 ---------- Total Information technology 214,545 ---------- - -------------------------------------------------------------------------------- MATERIALS--6.2% - -------------------------------------------------------------------------------- Agnico-Eagle Mines # 70,990 4,807 Air Products & Chemicals 194,680 17,911 Celanese, Ser A 161,800 6,318 Mosaic* 131,580 13,500 Owens-Illinois* 388,800 21,940 Steel Dynamics 405,040 13,382 ---------- Total Materials 77,858 ---------- - -------------------------------------------------------------------------------- TELECOMMUNICATION SERVICES--1.5% - -------------------------------------------------------------------------------- Crown Castle International* 262,800 9,064 Millicom International Cellular* 107,265 10,142 ---------- Total Telecommunication services 19,206 ---------- Value Shares (000) - -------------------------------------------------------------------------------- UTILITIES--2.6% - -------------------------------------------------------------------------------- Constellation Energy Group 115,120 $ 10,161 NRG Energy* 146,490 5,712 Questar 171,380 9,693 Reliant Energy* 288,950 6,834 ----------- Total Utilities 32,400 ----------- - -------------------------------------------------------------------------------- TOTAL COMMON STOCK (COST $1,044,379) 1,222,227 ================================================================================ - -------------------------------------------------------------------------------- CASH EQUIVALENT--9.0% - -------------------------------------------------------------------------------- BlackRock TempCash Fund Institutional Shares, 3.238%** (1) 113,229,409 113,229 - -------------------------------------------------------------------------------- TOTAL CASH EQUIVALENT (COST $113,229) 113,229 ================================================================================ - -------------------------------------------------------------------------------- TOTAL INVESTMENTS--106.0% (COST $1,157,608) $1,335,456 ================================================================================
Percentages are based on Net Assets of $1,260,268.*** * Non-income producing security. ** Rate shown is the 7-day effective yield as of March 31, 2008. *** This number has been rounded to the nearest thousand. # Security fully or partially on loan at March 31, 2008. The total value of securities on loan at March 31, 2008, was $75,396,991. (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 pooled investment 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 or a partial position of this security was purchased with cash collateral received from securities lending. The total value of such security at March 31, 2008 was $77,902,804. ADR -- American Depositary Receipt Cl -- Class Ser -- Series The accompanying notes are an integral part of the financial statements. 30 | TURNER FUNDS 2008 SEMIANNUAL REPORT (Unaudited) - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS TURNER NEW ENTERPRISE FUND March 31, 2008
Value Shares (000) - -------------------------------------------------------------------------------- COMMON STOCK--98.6%+ - -------------------------------------------------------------------------------- CONSUMER DISCRETIONARY--19.1% - -------------------------------------------------------------------------------- Coach* 29,120 $ 878 DR Horton 55,000 866 Focus Media Holding ADR* # 19,430 683 Guess ? 73,830 2,988 International Game Technology 21,430 862 Nordstrom 29,400 958 priceline.com* 8,270 1,000 Pulte Homes 51,290 746 TJX 51,480 1,703 ---------- Total Consumer discretionary 10,684 ---------- - -------------------------------------------------------------------------------- ENERGY--6.0% - -------------------------------------------------------------------------------- Consol Energy 23,020 1,593 Ultra Petroleum* 22,500 1,744 ---------- Total Energy 3,337 ---------- - -------------------------------------------------------------------------------- FINANCIALS--2.4% - -------------------------------------------------------------------------------- BlackRock, Cl A # 6,560 1,339 ---------- Total Financials 1,339 ---------- - -------------------------------------------------------------------------------- HEALTH CARE--22.8% - -------------------------------------------------------------------------------- BioMarin Pharmaceutical* 60,289 2,133 Genentech* 20,160 1,637 Genzyme* 29,290 2,183 Gilead Sciences* 61,970 3,193 Intuitive Surgical* 4,810 1,560 United Therapeutics* 24,120 2,091 ---------- Total Health care 12,797 ---------- - -------------------------------------------------------------------------------- INDUSTRIALS--13.2% - -------------------------------------------------------------------------------- Bucyrus International, Cl A 19,820 2,015 CSX 19,860 1,114 Deere 16,520 1,329 First Solar* 3,280 758 Flowserve 10,820 1,129 Stericycle* 21,020 1,082 ---------- Total Industrials 7,427 ---------- - -------------------------------------------------------------------------------- INFORMATION TECHNOLOGY--31.2% - -------------------------------------------------------------------------------- Cavium Networks* # 75,080 1,231 Corning 85,930 2,066 Informatica* 111,500 1,902 Juniper Networks* 51,010 1,275 McAfee* 32,200 1,065 Value Shares (000) - -------------------------------------------------------------------------------- MEMC Electronic Materials* 17,700 $ 1,255 Microchip Technology 50,100 1,640 QUALCOMM 30,920 1,268 Research In Motion* 16,150 1,813 Salesforce.com* 20,320 1,176 VeriSign* 36,410 1,210 Websense* 85,100 1,596 ---------- Total Information technology 17,497 ---------- - -------------------------------------------------------------------------------- MATERIALS--3.9% - -------------------------------------------------------------------------------- Monsanto 19,510 2,175 ---------- Total Materials 2,175 ---------- - -------------------------------------------------------------------------------- TOTAL COMMON STOCK (COST $52,908) 55,256 ================================================================================ - -------------------------------------------------------------------------------- CASH EQUIVALENT--9.6% - -------------------------------------------------------------------------------- BlackRock TempCash Fund Institutional Shares, 3.238%** (1) 5,401,413 5,401 - -------------------------------------------------------------------------------- TOTAL CASH EQUIVALENT (COST $5,401) 5,401 ================================================================================ - -------------------------------------------------------------------------------- TOTAL INVESTMENTS--108.2% (COST $58,309) $ 60,657 ================================================================================
Percentages are based on Net Assets of $56,051.*** * Non-income producing security. ** Rate shown is the 7-day effective yield as of March 31, 2008. *** This number has been rounded to the nearest thousand. + More narrow industries are utilized for compliance purposes, whereas broad sectors are utilized for reporting purposes. # Security fully or partially on loan at March 31, 2008. The total value of securities on loan at March 31, 2008, was $4,401,897. (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 pooled investment 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 or a partial position of this security was purchased with cash collateral received from securities lending. The total value of such security at March 31, 2008 was $4,537,813. ADR -- American Depositary Receipt Cl -- Class The accompanying notes are an integral part of the financial statements. TURNER FUNDS 2008 SEMIANNUAL REPORT | 31 FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS TURNER QUANTITATIVE LARGE CAP VALUE FUND March 31, 2008
Value Shares (000) - -------------------------------------------------------------------------------- COMMON STOCK--98.1%+ - -------------------------------------------------------------------------------- CONSUMER DISCRETIONARY--5.8% - -------------------------------------------------------------------------------- DIRECTV Group* 240 $ 6 Gap 330 7 Johnson Controls 200 7 News, Cl A 290 5 Time Warner 480 7 Walt Disney 310 10 Wyndham Worldwide 410 8 ---------- Total Consumer discretionary 50 ---------- - -------------------------------------------------------------------------------- CONSUMER STAPLES--8.8% - -------------------------------------------------------------------------------- Altria Group 150 3 Archer-Daniels-Midland 230 9 Coca-Cola 90 6 Constellation Brands, Cl A* 230 4 CVS Caremark 220 9 Molson Coors Brewing, Cl B 110 6 Philip Morris International* 150 8 Procter & Gamble 100 7 Reynolds American 160 9 SUPERVALU 280 8 Wal-Mart Stores 110 6 ---------- Total Consumer staples 75 ---------- - -------------------------------------------------------------------------------- ENERGY--16.0% - -------------------------------------------------------------------------------- Apache 60 7 Chevron 290 25 ConocoPhillips 110 8 Exxon Mobil 690 58 Hess 80 7 Murphy Oil 90 8 Occidental Petroleum 110 8 Pioneer Natural Resources 160 8 Williams 240 8 ---------- Total Energy 137 ---------- - -------------------------------------------------------------------------------- FINANCIALS--26.0% - -------------------------------------------------------------------------------- Aflac 160 10 AMB Property 210 12 American Capital Strategies 270 9 Ameriprise Financial 170 9 AON 260 11 Assurant 120 7 Value Shares (000) - -------------------------------------------------------------------------------- Bank of New York Mellon 240 $ 10 Boston Properties 110 10 Chubb 140 7 Citigroup 540 12 Fidelity National Financial, Cl A 590 11 Invesco 300 7 Legg Mason 150 8 MetLife 150 9 Principal Financial Group 170 10 Rayonier 140 6 Regency Centers 160 10 State Street 150 12 TD Ameritrade Holding* 370 6 Torchmark 140 8 Travelers 230 11 Unum Group 400 9 Vornado Realty Trust 110 10 WR Berkley 290 8 ---------- Total Financials 222 ---------- - -------------------------------------------------------------------------------- HEALTH CARE--7.4% - -------------------------------------------------------------------------------- AmerisourceBergen, Cl A 200 8 Applera - Applied Biosystems Group 210 7 Biogen Idec* 130 8 Eli Lilly 120 6 Pfizer 640 13 Shire ADR 80 5 Thermo Fisher Scientific* 170 10 Watson Pharmaceuticals* 210 6 ---------- Total Health care 63 ---------- - -------------------------------------------------------------------------------- INDUSTRIALS--11.9% - -------------------------------------------------------------------------------- Cummins 120 5 First Solar* 30 7 Flowserve 80 8 General Electric 840 31 Honeywell International 140 8 ITT 170 9 Northrop Grumman 90 7 Raytheon 150 10 Union Pacific 70 9 Waste Management 240 8 ---------- Total Industrials 102 ----------
32 | TURNER FUNDS 2008 SEMIANNUAL REPORT (Unaudited) - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS TURNER QUANTITATIVE LARGE CAP VALUE FUND
Value Shares (000) - -------------------------------------------------------------------------------- INFORMATION TECHNOLOGY--4.9% - -------------------------------------------------------------------------------- Automatic Data Processing 210 $ 9 Fidelity National Information Services 220 8 Hewlett-Packard 90 4 Intel 220 5 MEMC Electronic Materials* 80 6 Seagate Technology 190 4 Texas Instruments 220 6 ---------- Total Information technology 42 ---------- - -------------------------------------------------------------------------------- MATERIALS--4.8% - -------------------------------------------------------------------------------- Air Products & Chemicals 90 8 EI Du Pont de Nemours 90 4 Freeport-McMoRan Copper & Gold 70 7 Nucor 100 7 Reliance Steel & Aluminum 120 7 Sigma-Aldrich 130 8 ---------- Total Materials 41 ---------- - -------------------------------------------------------------------------------- TELECOMMUNICATION SERVICES--5.6% - -------------------------------------------------------------------------------- AT&T 890 34 Verizon Communications 390 14 ---------- Total Telecommunication services 48 ---------- - -------------------------------------------------------------------------------- UTILITIES--6.9% - -------------------------------------------------------------------------------- Centerpoint Energy 540 8 Dominion Resources 290 12 DPL 280 7 Edison International 170 8 Entergy 80 9 NRG Energy* 190 7 Public Service Enterprise Group 190 8 ---------- Total Utilities 59 ---------- - -------------------------------------------------------------------------------- TOTAL COMMON STOCK (COST $840) 839 ================================================================================ Value Shares (000) - -------------------------------------------------------------------------------- CASH EQUIVALENT--1.5% - -------------------------------------------------------------------------------- BlackRock TempCash Fund Institutional Shares, 3.238%** 12,878 $ 13 - -------------------------------------------------------------------------------- TOTAL CASH EQUIVALENT (COST $13) 13 ================================================================================ - -------------------------------------------------------------------------------- TOTAL INVESTMENTS--99.6% (COST $853) $ 852 ================================================================================
Percentages are based on Net Assets of $855.*** * Non-income producing security. ** Rate shown is the 7-day effective yield as of March 31, 2008. *** This number has been rounded to the nearest thousand. + More narrow industries are utilized for compliance purposes, whereas broad sectors are utilized for reporting purposes. ADR -- American Depositary Receipt Cl -- Class The accompanying notes are an integral part of the financial statements. TURNER FUNDS 2008 SEMIANNUAL REPORT | 33 FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS TURNER SMALL CAP EQUITY FUND March 31, 2008
Value Shares (000) - -------------------------------------------------------------------------------- COMMON STOCK--96.0% - -------------------------------------------------------------------------------- CONSUMER DISCRETIONARY--8.2% - -------------------------------------------------------------------------------- Bob Evans Farms 17,820 $ 492 Bright Horizons Family Solutions* 11,320 487 Callaway Golf 38,950 572 Ihop # 3,320 159 Lions Gate Entertainment* 46,270 451 Matthews International, Cl A 12,140 586 Tupperware Brands 13,890 537 Zale* # 14,210 281 ---------- Total Consumer discretionary 3,565 ---------- - -------------------------------------------------------------------------------- CONSUMER STAPLES--5.9% - -------------------------------------------------------------------------------- BJ's Wholesale Club* 17,340 619 Cal-Maine Foods # 3,120 104 Chiquita Brands International* 20,760 480 Darling International* 36,240 469 Flowers Foods 17,590 435 Imperial Sugar # 9,180 173 Longs Drug Stores 7,460 317 ---------- Total Consumer staples 2,597 ---------- - -------------------------------------------------------------------------------- ENERGY--8.9% - -------------------------------------------------------------------------------- Alpha Natural Resources* 10,710 465 Bill Barrett* 9,660 457 BPZ Resources* # 14,540 316 El Paso Pipeline Partners LP 14,090 319 International Coal Group* # 54,530 346 Penn Virginia 11,160 492 Petroleum Development* 11,560 801 Trico Marine Services* 17,540 684 ---------- Total Energy 3,880 ---------- - -------------------------------------------------------------------------------- FINANCIALS--13.7% - -------------------------------------------------------------------------------- Amtrust Financial Services # 23,880 387 BioMed Realty Trust 24,920 595 Digital Realty Trust 12,830 456 Extra Space Storage 15,990 259 GFI Group 4,330 248 Interactive Brokers Group, Cl A* 17,890 459 Investment Technology Group* 11,530 533 Investors Bancorp* 14,180 218 IPC Holdings 17,000 476 Omega Healthcare Investors 17,390 302 Value Shares (000) - -------------------------------------------------------------------------------- Potlatch 9,260 $ 382 ProAssurance* 11,091 597 Strategic Hotels & Resorts 25,230 331 SVB Financial Group* # 8,840 386 UMB Financial 8,480 349 ---------- Total Financials 5,978 ---------- - -------------------------------------------------------------------------------- HEALTH CARE--13.0% - -------------------------------------------------------------------------------- Air Methods* 5,930 287 Amedisys* 13,990 550 Analogic 7,426 494 Haemonetics* 8,210 489 HealthExtras* 13,020 323 inVentiv Health* 12,140 350 Kendle International* 11,860 533 Martek Biosciences* 18,530 567 Owens & Minor 10,150 399 Savient Pharmaceuticals* 15,910 318 STERIS 20,540 551 Sun Healthcare Group* 10,550 139 Varian* 8,380 485 Zoll Medical* 7,700 205 ---------- Total Health care 5,690 ---------- - -------------------------------------------------------------------------------- INDUSTRIALS--16.8% - -------------------------------------------------------------------------------- AAR* 19,480 531 ABM Industries 4,710 106 Astec Industries* 7,450 289 Atlas Air Worldwide Holdings* 8,780 483 AZZ* # 13,430 478 Barnes Group 15,760 362 Briggs & Stratton # 17,040 305 China Security & Surveillance Technology* 20,570 365 Clean Harbors* 10,710 696 EnerSys* 24,290 581 Geo Group* 16,470 468 GrafTech International* 16,370 265 Kaydon 12,130 532 Kirby* 9,960 568 Moog, Cl A* 10,090 426 Seaspan # 15,680 447 Teledyne Technologies* 9,870 464 ---------- Total Industrials 7,366 ----------
34 | TURNER FUNDS 2008 SEMIANNUAL REPORT (Unaudited) - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS TURNER SMALL CAP EQUITY FUND
Value Shares (000) - -------------------------------------------------------------------------------- INFORMATION TECHNOLOGY--17.2% - -------------------------------------------------------------------------------- Ariba* 43,460 $ 420 Bankrate* 11,510 574 Checkpoint Systems* 21,980 590 Electro Scientific Industries* 15,680 258 Exar* 52,840 435 Interwoven* 28,110 300 Mantech International, Cl A* 6,260 284 MercadoLibre GDR* 10,120 402 Microsemi* 20,440 466 Nice Systems ADR* 11,920 336 Plexus* 22,910 643 Progress Software* 17,060 511 S1* 39,990 284 Silicon Laboratories* 10,600 334 SonicWALL* 42,600 348 THQ* 29,570 645 Verigy* 14,990 283 Wright Express* 13,980 430 ---------- Total Information technology 7,543 ---------- - -------------------------------------------------------------------------------- MATERIALS--7.0% - -------------------------------------------------------------------------------- Calgon Carbon* # 30,920 465 Coeur d'Alene Mines* 137,450 555 Kaiser Aluminum 6,230 432 Koppers Holdings 13,570 601 Minerals Technologies 6,560 412 Schnitzer Steel Industries, Cl A 6,020 428 Sensient Technologies 6,070 179 ---------- Total Materials 3,072 ---------- - -------------------------------------------------------------------------------- UTILITIES--5.3% - -------------------------------------------------------------------------------- Allete 7,870 304 El Paso Electric* 23,500 502 ITC Holdings 12,090 629 New Jersey Resources 15,165 471 Southwest Gas 14,270 399 ---------- Total Utilities 2,305 ---------- - -------------------------------------------------------------------------------- TOTAL COMMON STOCK (COST $40,612) 41,996 ================================================================================ Value Shares (000) - -------------------------------------------------------------------------------- CASH EQUIVALENT--12.4% - -------------------------------------------------------------------------------- BlackRock TempCash Fund Institutional Shares, 3.238%** (1) 5,424,233 $ 5,424 ================================================================================ TOTAL CASH EQUIVALENT (COST $5,424) 5,424 ================================================================================ - -------------------------------------------------------------------------------- TOTAL INVESTMENTS--108.4% (COST $46,036) $ 47,420 ================================================================================
Percentages are based on Net Assets of $43,741.*** * Non-income producing security. ** Rate shown is the 7-day effective yield as of March 31, 2008. *** This number has been rounded to the nearest thousand. # Security fully or partially on loan at March 31, 2008. The total value of securities on loan at March 31, 2008, was $3,485,845. (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 pooled investment 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 or a partial position of this security was purchased with cash collateral received from securities lending. The total value of such security at March 31, 2008 was $3,579,166. ADR -- American Depositary Receipt Cl -- Class GDR -- Global Depositary Reciept LP -- Limited Partnership The accompanying notes are an integral part of the financial statements. TURNER FUNDS 2008 SEMIANNUAL REPORT | 35 FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS TURNER SMALL CAP GROWTH FUND March 31, 2008
Value Shares (000) - -------------------------------------------------------------------------------- COMMON STOCK--98.7% - -------------------------------------------------------------------------------- CONSUMER DISCRETIONARY--19.3% - -------------------------------------------------------------------------------- Aeropostale* 101,970 $ 2,764 AirMedia Group ADR* # 110,860 1,763 Buckle 38,020 1,701 Capella Education* 44,540 2,432 Chipotle Mexican Grill, Cl A* 33,930 3,849 Deckers Outdoor* 27,550 2,970 Fossil* 78,920 2,410 Gymboree* 66,030 2,633 Interactive Data 119,360 3,398 J Crew Group* # 61,140 2,701 Lennar, Cl A # 87,170 1,640 LKQ* 131,970 2,965 Lululemon Athletica* # 33,850 962 NetFlix* # 58,500 2,027 New Oriental Education & Technology Group ADR* 19,080 1,237 priceline.com* # 32,640 3,945 Red Robin Gourmet Burgers* # 87,730 3,296 Strayer Education 15,750 2,402 True Religion Apparel* # 82,510 1,531 WMS Industries* 102,130 3,674 ---------- Total Consumer discretionary 50,300 ---------- - -------------------------------------------------------------------------------- CONSUMER STAPLES--2.5% - -------------------------------------------------------------------------------- Central European Distribution* 38,700 2,252 Chattem* # 33,130 2,198 Flowers Foods 80,975 2,004 ---------- Total Consumer staples 6,454 ---------- - -------------------------------------------------------------------------------- ENERGY--8.6% - -------------------------------------------------------------------------------- Alpha Natural Resources* 45,990 1,998 Arena Resources* 66,200 2,563 Atwood Oceanics* 22,830 2,094 Concho Resources* 118,920 3,049 Core Laboratories* 24,880 2,968 Hornbeck Offshore Services* # 53,700 2,453 PetroHawk Energy* 170,020 3,429 W-H Energy Services* 25,360 1,746 Willbros Group* 68,630 2,100 ---------- Total Energy 22,400 ---------- Value Shares (000) - -------------------------------------------------------------------------------- FINANCIALS--7.2% - -------------------------------------------------------------------------------- Digital Realty Trust^ 78,350 $ 2,781 Dime Community Bancshares 72,659 1,270 Extra Space Storage 129,265 2,093 Greenhill # 54,043 3,759 Investment Technology Group* 62,890 2,904 MSCI, Cl A* 65,370 1,945 Waddell & Reed Financial, Cl A 122,800 3,946 Westamerica Bancorporation 3,890 205 ---------- Total Financials 18,903 ---------- - -------------------------------------------------------------------------------- HEALTH CARE--19.4% - -------------------------------------------------------------------------------- Acorda Therapeutics* 88,990 1,597 Alexion Pharmaceuticals* 24,124 1,431 AMERIGROUP* 56,720 1,550 Auxilium Pharmaceuticals* # 60,200 1,610 BioMarin Pharmaceutical* 124,630 4,408 Cepheid* 54,500 1,329 Haemonetics* 47,470 2,828 Hologic* 61,920 3,443 Icon ADR* 51,201 3,322 Illumina* 18,180 1,380 KV Pharmaceutical, Cl A* # 134,050 3,346 NuVasive* 69,350 2,393 Parexel International* 171,520 4,477 Pediatrix Medical Group* 38,290 2,581 Perrigo 117,850 4,446 Rigel Pharmaceuticals* 68,880 1,285 Savient Pharmaceuticals* 67,480 1,350 TomoTherapy* # 54,560 783 United Therapeutics* # 59,020 5,117 XenoPort* 51,560 2,087 ---------- Total Health care 50,763 ---------- - -------------------------------------------------------------------------------- INDUSTRIALS--16.0% - -------------------------------------------------------------------------------- Actuant, Cl A 102,940 3,110 Aecom Technology* 71,230 1,853 American Superconductor* # 61,030 1,415 Bucyrus International, Cl A 29,410 2,989 FTI Consulting* 70,970 5,042 IHS, Cl A* 47,800 3,074 JA Solar Holdings ADR* 94,580 1,759 Landstar System 45,190 2,357
36 | TURNER FUNDS 2008 SEMIANNUAL REPORT (Unaudited) - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS TURNER SMALL CAP GROWTH FUND
Value Shares (000) - -------------------------------------------------------------------------------- Middleby* 25,240 $ 1,575 Mobile Mini* 87,056 1,654 Orbital Sciences* 84,270 2,031 RBC Bearings* 71,450 2,653 Robbins & Myers 88,140 2,878 Teledyne Technologies* 31,750 1,492 Tetra Tech* 57,170 1,115 TransDigm Group* 54,790 2,030 Wabtec 57,960 2,183 Woodward Governor 94,100 2,514 ---------- Total Industrials 41,724 ---------- - -------------------------------------------------------------------------------- INFORMATION TECHNOLOGY--17.0% - -------------------------------------------------------------------------------- Ansys* 103,690 3,579 Atheros Communications* 73,400 1,530 Cavium Networks* 72,758 1,193 comScore* 49,690 997 Comtech Telecommunications* 30,120 1,175 Concur Technologies* 74,050 2,299 Constant Contact* # 36,974 535 EMS Technologies* 67,290 1,826 Flir Systems* 117,380 3,532 Informatica* 183,580 3,132 Jack Henry & Associates 123,340 3,043 Micros Systems* 108,140 3,640 Net 1 UEPS Technologies* 61,980 1,398 Omniture* 116,177 2,696 Plexus* 102,990 2,889 Sybase* 76,780 2,019 Take-Two Interactive Software* 39,560 1,010 VistaPrint* # 84,440 2,951 Vocus* 62,190 1,642 Websense* 169,160 3,172 ---------- Total Information technology 44,258 ---------- - -------------------------------------------------------------------------------- MATERIALS--6.4% - -------------------------------------------------------------------------------- Century Aluminum* 59,840 3,964 CF Industries Holdings 15,750 1,632 Compass Minerals International 36,510 2,153 Greif, Cl A 39,470 2,681 Hecla Mining* # 178,480 1,992 Koppers Holdings 49,220 2,181 Terra Industries* 59,180 2,103 ---------- Total Materials 16,706 ---------- Value Shares (000) - -------------------------------------------------------------------------------- TELECOMMUNICATION SERVICES--1.5% - -------------------------------------------------------------------------------- Cellcom Israel 43,970 $ 1,382 Syniverse Holdings* 146,550 2,441 ---------- Total Telecommunication services 3,823 ---------- - -------------------------------------------------------------------------------- UTILITIES--0.8% - -------------------------------------------------------------------------------- ITC Holdings 41,340 2,152 ---------- Total Utilities 2,152 ---------- - -------------------------------------------------------------------------------- TOTAL COMMON STOCK (COST $228,607) 257,483 ================================================================================ - -------------------------------------------------------------------------------- CASH EQUIVALENT--14.8% - -------------------------------------------------------------------------------- BlackRock TempCash Fund Institutional Shares, 3.238%** (1) 38,635,422 38,635 - -------------------------------------------------------------------------------- TOTAL CASH EQUIVALENT (COST $38,635) 38,635 ================================================================================ - -------------------------------------------------------------------------------- TOTAL INVESTMENTS--113.5% (COST $267,242) $ 296,118 ================================================================================
Percentages are based on Net Assets of $260,834.*** * Non-income producing security. ** Rate shown is the 7-day effective yield as of March 31, 2008. *** This number has been rounded to the nearest thousand. ^ Real Estate Investment Trust # Security fully or partially on loan at March 31, 2008. The total value of securities on loan at March 31, 2008, was $34,363,223. (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 pooled investment 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 or a partial position of this security was purchased with cash collateral received from securities lending. The total value of such security at March 31, 2008 was $35,568,774. ADR -- American Depositary Receipt Cl -- Class The accompanying notes are an integral part of the financial statements. TURNER FUNDS 2008 SEMIANNUAL REPORT | 37 FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- STATEMENTS OF ASSETS AND LIABILITIES (000) March 31, 2008
Turner Turner Turner Turner Concentrated Core Growth Emerging International Growth Fund Fund Growth Fund Core Growth Fund - ------------------------------------------------------------------------------------------------------------------------------------ Assets: - ------------------------------------------------------------------------------------------------------------------------------------ Investment securities, at cost $ 34,577 $ 600,898 $ 498,752 $ 4,340 Foreign currency, at cost -- -- -- 10 ==================================================================================================================================== Investment securities, at value $ 36,784 $ 619,285* $ 610,240* $ 4,563 Foreign currency, at value -- -- -- 9 Receivable for capital shares sold 29 3,460 140 -- Receivable for investment securities sold -- 12,357 4,064 9 Receivable from investment adviser -- -- -- 6 Receivable for dividend income 28 563 406 16 - ------------------------------------------------------------------------------------------------------------------------------------ Total assets 36,841 635,665 614,850 4,603 ==================================================================================================================================== Liabilities: Payable due to investment adviser 39 259 428 -- Payable due to shareholder servicing 18 110 118 -- Payable for capital shares redeemed 5 1,156 242 -- Payable due to administrator 4 70 66 1 Payable due to Chief Compliance Officer 1 10 7 -- Payable for investment securities purchased -- 21,483 -- 72 Obligation to return securities lending collateral -- 13,762 57,492 -- Payable due to distributor -- -- -- -- Other accrued expenses 12 18 76 4 - ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 79 36,868 58,429 77 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets $ 36,762 $ 598,797 $ 556,421 $ 4,526 ==================================================================================================================================== *Includes market value of securities on loan $ -- $ 13,624 $ 55,809 $ -- ==================================================================================================================================== Net assets: Portfolio capital of Institutional Class Shares $ -- $ 374,685 $ -- $ 4,450 Portfolio capital of Investor Class Shares 188,618 264,155 465,483 -- Portfolio capital of Retirement Class Shares -- -- -- -- Undistributed net investment income/(Accumulated net investment loss)/(Distributions in excess of net investment income) (278) 655 (1,245) 19 Accumulated net realized loss on investments (153,785) (59,085) (19,305) (166) Net unrealized appreciation (depreciation) on investments 2,207 18,387 111,488 223 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets $ 36,762 $ 598,797 $ 556,421 $ 4,526 ==================================================================================================================================== Outstanding shares of beneficial interest (1) Institutional Class Shares (2) -- 28,935,520 -- 399,051 - ------------------------------------------------------------------------------------------------------------------------------------ Outstanding shares of beneficial interest (1) Investor Class Shares (2) 4,418,855 18,786,223 11,326,738 -- - ------------------------------------------------------------------------------------------------------------------------------------ Outstanding shares of beneficial interest (1) Retirement Class Shares (2) -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net Assets -- Institutional Class Shares (2) $ -- $ 363,781,725 $ -- $ 4,525,802 - ------------------------------------------------------------------------------------------------------------------------------------ Net Assets -- Investor Class Shares (2) $ 36,762,030 $ 235,015,198 $ 556,420,954 $ -- - ------------------------------------------------------------------------------------------------------------------------------------ Net Assets -- Retirement Class Shares (2) $ -- $ -- $ -- $ -- - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, offering and redemption price per share -- Institutional Class Shares $ -- $ 12.57 $ -- $ 11.34 - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, offering and redemption price per share -- Investor Class Shares $ 8.32 $ 12.51 $ 49.12 $ -- - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, offering and redemption price per share -- Retirement Class Shares $ -- $ -- $ -- $ -- ====================================================================================================================================
(Unaudited) - --------------------------------------------------------------------------------
Turner Turner Turner Large Cap Midcap Midcap Growth Fund Equity Fund Growth Fund - ----------------------------------------------------------------------------------------------------------------- Assets: - ----------------------------------------------------------------------------------------------------------------- Investment securities, at cost $ 36,110 $ 578 $ 1,157,608 Foreign currency, at cost -- -- -- ================================================================================================================= Investment securities, at value $ 38,634* $ 580 $ 1,335,456* Foreign currency, at value -- -- -- Receivable for capital shares sold 99 -- 3,603 Receivable for investment securities sold 1,111 3 12,641 Receivable from investment adviser -- 7 -- Receivable for dividend income 28 -- 645 - ----------------------------------------------------------------------------------------------------------------- Total assets 39,872 590 1,352,345 ================================================================================================================= Liabilities: Payable due to investment adviser 5 -- 724 Payable due to shareholder servicing -- -- 265 Payable for capital shares redeemed 1 -- 837 Payable due to administrator 5 -- 150 Payable due to Chief Compliance Officer 1 -- 17 Payable for investment securities purchased 1,107 8 11,964 Obligation to return securities lending collateral 392 -- 77,903 Payable due to distributor -- -- 10 Other accrued expenses 9 -- 207 - ----------------------------------------------------------------------------------------------------------------- Total liabilities 1,520 8 92,077 - ----------------------------------------------------------------------------------------------------------------- Net assets $ 38,352 $ 582 $ 1,260,268 ================================================================================================================= *Includes market value of securities on loan $ 379 $ -- $ 75,397 ================================================================================================================= Net assets: Portfolio capital of Institutional Class Shares $ 53,305 $ 100 $ -- Portfolio capital of Investor Class Shares 871 559 1,359,508 Portfolio capital of Retirement Class Shares -- -- 5,320 Undistributed net investment income/(Accumulated net investment loss)/(Distributions in excess of net investment income) 4 (1) (2,322) Accumulated net realized loss on investments (18,352) (78) (280,086) Net unrealized appreciation (depreciation) on investments 2,524 2 177,848 - ----------------------------------------------------------------------------------------------------------------- Net assets $ 38,352 $ 582 $ 1,260,268 ================================================================================================================= Outstanding shares of beneficial interest (1) Institutional Class Shares (2) 6,555,081 10,788 -- - ----------------------------------------------------------------------------------------------------------------- Outstanding shares of beneficial interest (1) Investor Class Shares (2) 144,268 53,121 39,745,431 - ----------------------------------------------------------------------------------------------------------------- Outstanding shares of beneficial interest (1) Retirement Class Shares (2) -- -- 200,778 - ----------------------------------------------------------------------------------------------------------------- Net Assets -- Institutional Class Shares (2) $ 37,528,588 $ 99,184 $ -- - ----------------------------------------------------------------------------------------------------------------- Net Assets -- Investor Class Shares (2) $ 823,320 $ 483,142 $ 1,254,113,282 - ----------------------------------------------------------------------------------------------------------------- Net Assets -- Retirement Class Shares (2) $ -- $ -- $ 6,154,975 - ----------------------------------------------------------------------------------------------------------------- Net asset value, offering and redemption price per share -- Institutional Class Shares $ 5.73 $ 9.19 $ -- - ----------------------------------------------------------------------------------------------------------------- Net asset value, offering and redemption price per share -- Investor Class Shares $ 5.71 $ 9.10 $ 31.55 - ----------------------------------------------------------------------------------------------------------------- Net asset value, offering and redemption price per share -- Retirement Class Shares $ -- $ -- $ 30.66 ================================================================================================================= Turner Turner Quantitative Turner Turner New Enterprise Large Cap Small Cap Small Cap Fund Value Fund Equity Fund Growth Fund - --------------------------------------------------------------------------------------------------------------------------------- Assets: - --------------------------------------------------------------------------------------------------------------------------------- Investment securities, at cost $ 58,309 $ 853 $ 46,036 $ 267,242 Foreign currency, at cost -- -- -- -- ================================================================================================================================= Investment securities, at value $ 60,657* $ 852 $ 47,420* $ 296,118* Foreign currency, at value -- -- -- -- Receivable for capital shares sold 51 -- 5 429 Receivable for investment securities sold -- -- 781 1,755 Receivable from investment adviser -- 4 -- -- Receivable for dividend income 20 2 48 199 - --------------------------------------------------------------------------------------------------------------------------------- Total assets 60,728 858 48,254 298,501 ================================================================================================================================= Liabilities: Payable due to investment adviser 52 -- 29 163 Payable due to shareholder servicing 12 -- 9 63 Payable for capital shares redeemed 57 -- 28 81 Payable due to administrator 7 -- 5 31 Payable due to Chief Compliance Officer 1 -- 1 4 Payable for investment securities purchased -- -- 842 1,709 Obligation to return securities lending collateral 4,538 -- 3,579 35,569 Payable due to distributor -- -- -- -- Other accrued expenses 10 3 20 47 - --------------------------------------------------------------------------------------------------------------------------------- Total liabilities 4,677 3 4,513 37,667 - --------------------------------------------------------------------------------------------------------------------------------- Net assets $ 56,051 $ 855 $ 43,741 $ 260,834 ================================================================================================================================= *Includes market value of securities on loan $ 4,402 $ -- $ 3,486 $ 34,363 ================================================================================================================================= Net assets: Portfolio capital of Institutional Class Shares $ -- $ 895 $ -- $ -- Portfolio capital of Investor Class Shares 73,793 -- 46,439 307,409 Portfolio capital of Retirement Class Shares -- -- -- -- Undistributed net investment income/(Accumulated net investment loss)/(Distributions in excess of net investment income) (307) 3 (126) (400) Accumulated net realized loss on investments (19,783) (42) (3,956) (75,051) Net unrealized appreciation (depreciation) on investments 2,348 (1) 1,384 28,876 - --------------------------------------------------------------------------------------------------------------------------------- Net assets $ 56,051 $ 855 $ 43,741 $ 260,834 ================================================================================================================================= Outstanding shares of beneficial interest (1) Institutional Class Shares (2) -- 85,051 -- -- - --------------------------------------------------------------------------------------------------------------------------------- Outstanding shares of beneficial interest (1) Investor Class Shares (2) 7,830,404 -- 3,519,997 9,289,005 - --------------------------------------------------------------------------------------------------------------------------------- Outstanding shares of beneficial interest (1) Retirement Class Shares (2) -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------------- Net Assets -- Institutional Class Shares (2) $ -- $ 854,938 $ -- $ -- - --------------------------------------------------------------------------------------------------------------------------------- Net Assets -- Investor Class Shares (2) $ 56,051,180 $ -- $ 43,740,688 $ 260,833,972 - --------------------------------------------------------------------------------------------------------------------------------- Net Assets -- Retirement Class Shares (2) $ -- $ -- $ -- $ -- - --------------------------------------------------------------------------------------------------------------------------------- Net asset value, offering and redemption price per share -- Institutional Class Shares $ -- $ 10.05 $ -- $ -- - --------------------------------------------------------------------------------------------------------------------------------- Net asset value, offering and redemption price per share -- Investor Class Shares $ 7.16 $ -- $ 12.43 $ 28.08 - --------------------------------------------------------------------------------------------------------------------------------- Net asset value, offering and redemption price per share -- Retirement Class Shares $ -- $ -- $ -- $ -- =================================================================================================================================
(1) Unlimited authorization -- par value $0.00001. (2) Shares and Net Assets have not been rounded. 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 2008 SEMIANNUAL REPORT | 38 & 39 FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- STATEMENTS OF OPERATIONS (000)
Turner Turner Turner Concentrated Core Turner International Growth Growth Emerging Core Growth Fund Fund Growth Fund Fund ----------------------------------------------------------- 10/1/07 thru 10/1/07 thru 10/1/07 thru 10/1/07 thru 3/31/08 3/31/08 3/31/08 3/31/08 - ------------------------------------------------------------------------------------------------------------------------- Investment Income: Dividend $ 179 $ 2,979 $ 2,433 $ 44 Securities lending 9 55 358 -- Foreign taxes withheld -- (75) (20) (3) - ------------------------------------------------------------------------------------------------------------------------- Total Investment income 188 2,959 2,771 41 - ------------------------------------------------------------------------------------------------------------------------- Expenses: Investment advisory fees 399 1,726 3,061 16 Shareholder service fees (1) 72 226 765 -- Shareholder service fees (2) -- -- -- -- Distribution fees (2) -- -- -- -- Administrator fees 40 350 429 3 Chief Compliance Officer fees 3 19 11 -- Transfer agent fees 17 51 47 14 Custodian fees 11 51 55 18 Professional fees 5 48 62 -- Registration fees 5 27 34 3 Printing fees 5 49 43 -- Trustees' fees 2 16 22 -- Insurance and other fees 3 11 26 2 - ------------------------------------------------------------------------------------------------------------------------- Total expenses 562 2,574 4,555 56 Less: Investment advisory fee waiver (82) (374) (257) (16) Fees paid indirectly (3) (8) (1) (8) -- Administrator fee waiver -- (250) -- -- Reimbursements of other operating expenses -- -- -- (19) - ------------------------------------------------------------------------------------------------------------------------- Net expenses 472 1,949 4,290 21 - ------------------------------------------------------------------------------------------------------------------------- Net investment income (loss) (284) 1,010 (1,519) 20 - ------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) from securities sold (4,971) (54,753) (1,544) (89) Net realized loss on foreign currency transactions -- -- -- (15) Net change in unrealized depreciation on investments, foreign currencies, and translation of other assets and liabilities denominated in foreign currencies (6,683) (29,818) (68,518) (181) - ------------------------------------------------------------------------------------------------------------------------- Net realized and unrealized loss on investments (11,654) (84,571) (70,062) (285) - ------------------------------------------------------------------------------------------------------------------------- Net decrease in net assets resulting from operations $ (11,938) $ (83,561) $ (71,581) $ (265) =========================================================================================================================
(Unaudited) - --------------------------------------------------------------------------------
Turner Turner Turner Large Cap Midcap Midcap Growth Fund Equity Fund Growth Fund - --------------------------------------------------------------------------------------------------------- 10/1/07 thru 10/1/07 thru 10/1/07 thru 3/31/08 3/31/08 3/31/08 - --------------------------------------------------------------------------------------------------------- Investment Income: Dividend $ 192 $ 3 $ 5,194 Securities lending 2 -- 191 Foreign taxes withheld (5) -- (6) - --------------------------------------------------------------------------------------------------------- Total Investment income 189 3 5,379 - --------------------------------------------------------------------------------------------------------- Expenses: Investment advisory fees 120 2 5,021 Shareholder service fees (1) -- 1 1,666 Shareholder service fees (2) -- -- 8 Distribution fees (2) -- -- 8 Administrator fees 28 -- 938 Chief Compliance Officer fees 2 -- 34 Transfer agent fees 28 27 186 Custodian fees 17 7 69 Professional fees 4 -- 135 Registration fees 7 7 64 Printing fees 3 -- 97 Trustees' fees 1 -- 48 Insurance and other fees 4 1 53 - --------------------------------------------------------------------------------------------------------- Total expenses 214 45 8,327 Less: Investment advisory fee waiver (75) (2) (399) Fees paid indirectly (3) (1) -- (26) Administrator fee waiver -- -- -- Reimbursements of other operating expenses -- (39) -- - --------------------------------------------------------------------------------------------------------- Net expenses 138 4 7,902 - --------------------------------------------------------------------------------------------------------- Net investment income (loss) 51 (1) (2,523) - --------------------------------------------------------------------------------------------------------- Net realized gain (loss) from securities sold (2,806) (57) 4,358 Net realized loss on foreign currency transactions -- -- -- Net change in unrealized depreciation on investments, foreign currencies, and translation of other assets and liabilities denominated in foreign currencies (4,041) (24) (165,413) - --------------------------------------------------------------------------------------------------------- Net realized and unrealized loss on investments (6,847) (81) (161,055) - --------------------------------------------------------------------------------------------------------- Net decrease in net assets resulting from operations $ (6,796) $ (82) $ (163,578) ========================================================================================================= Turner Turner Quantitative Turner Turner New Enterprise Large Cap Small Cap Small Cap Fund Value Fund Equity Fund Growth Fund - ------------------------------------------------------------------------------------------------------------------------- 10/1/07 thru 10/1/07 thru 10/1/07 thru 10/1/07 thru 3/31/08 3/31/08 3/31/08 3/31/08 - ------------------------------------------------------------------------------------------------------------------------- Investment Income: Dividend $ 289 $ 9 $ 204 $ 749 Securities lending 10 -- 36 379 Foreign taxes withheld -- -- -- (23) - ------------------------------------------------------------------------------------------------------------------------- Total Investment income 299 9 240 1,105 - ------------------------------------------------------------------------------------------------------------------------- Expenses: Investment advisory fees 530 3 248 1,480 Shareholder service fees (1) 103 -- 65 370 Shareholder service fees (2) -- -- -- -- Distribution fees (2) -- -- -- -- Administrator fees 58 1 37 207 Chief Compliance Officer fees 3 -- 2 7 Transfer agent fees 30 13 16 33 Custodian fees 11 4 28 44 Professional fees 8 -- 5 30 Registration fees 10 5 8 17 Printing fees 8 -- 3 20 Trustees' fees 3 -- 2 11 Insurance and other fees 3 -- 2 14 - ------------------------------------------------------------------------------------------------------------------------- Total expenses 767 26 416 2,233 Less: Investment advisory fee waiver (121) (3) (37) (371) Fees paid indirectly (3) (12) -- (1) (12) Administrator fee waiver -- -- -- -- Reimbursements of other operating expenses -- (20) -- -- - ------------------------------------------------------------------------------------------------------------------------- Net expenses 634 3 378 1,850 - ------------------------------------------------------------------------------------------------------------------------- Net investment income (loss) (335) 6 (138) (745) - ------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) from securities sold (9,797) (13) (3,112) (21,333) Net realized loss on foreign currency transactions -- -- -- -- Net change in unrealized depreciation on investments, foreign currencies, and translation of other assets and liabilities denominated in foreign currencies (7,775) (75) (4,000) (24,513) - ------------------------------------------------------------------------------------------------------------------------- Net realized and unrealized loss on investments (17,572) (88) (7,112) (45,846) - ------------------------------------------------------------------------------------------------------------------------- Net decrease in net assets resulting from operations $ (17,907) $ (82) $ (7,250) $ (46,591) =========================================================================================================================
(1) Attributable to Investor Class Shares only. (2) Attributable to Retirement Class Shares only. (3) 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 2008 SEMIANNUAL REPORT | 40 & 41 FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS (000)
Turner Concentrated Growth Fund --------------------------------- 10/1/07 thru year ended 3/31/08 (unaudited) 9/30/07 - -------------------------------------------------------------------------------------------------------------------- Investment activities: Net investment income (loss) $ (284) $ (209) Net realized gain (loss) from securities sold (4,971) 7,682 Net realized loss on foreign currency transactions -- -- Net change in unrealized appreciation (depreciation) on investments, foreign currencies, and translation of other assets and liabilities denominated in foreign currencies (6,683) 3,552 - -------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (11,938) 11,025 - -------------------------------------------------------------------------------------------------------------------- Dividends and distributions to shareholders: Net investment income Institutional Class Shares -- -- Investor Class Shares -- -- Realized capital gains Institutional Class Shares -- -- Investor Class Shares -- -- - -------------------------------------------------------------------------------------------------------------------- Total dividends and distributions -- -- - -------------------------------------------------------------------------------------------------------------------- Capital share transactions: Institutional Class Shares Proceeds from shares issued -- -- Proceeds from shares issued in lieu of cash distributions -- -- Cost of shares redeemed -- -- - -------------------------------------------------------------------------------------------------------------------- Net increase in net assets from Institutional Class Shares transactions -- -- - -------------------------------------------------------------------------------------------------------------------- Investor Class Shares Proceeds from shares issued 22,607 30,295 Proceeds from shares issued in lieu of cash distributions -- -- Cost of shares redeemed (35,308) (18,099) - -------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from Investor Class Shares transactions (12,701) 12,196 - -------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from capital share transactions (12,701) 12,196 - -------------------------------------------------------------------------------------------------------------------- Total increase (decrease) in net assets (24,639) 23,221 - -------------------------------------------------------------------------------------------------------------------- Net assets: Beginning of period 61,401 38,180 - -------------------------------------------------------------------------------------------------------------------- End of period $ 36,762 $ 61,401 ==================================================================================================================== Undistributed net investment income (Accumulated net investment loss) (Distributions in excess of net investment income) $ (278) $ 6 ==================================================================================================================== Shares issued and redeemed: Institutional Class Shares Issued -- -- Issued in lieu of cash distributions -- -- Redeemed -- -- - -------------------------------------------------------------------------------------------------------------------- Net increase in Institutional Class Shares -- -- - -------------------------------------------------------------------------------------------------------------------- Investor Class Shares Issued 2,234 3,178 Issued in lieu of cash distributions -- -- Redeemed (3,882) (2,136) - -------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in Investor Class Shares (1,648) 1,042 - -------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in share transactions (1,648) 1,042 ====================================================================================================================
- --------------------------------------------------------------------------------
Turner Core Turner Emerging Growth Fund Growth Fund ----------------------------------------------------------------- 10/1/07 thru year ended 10/1/07 thru year ended 3/31/08 (unaudited) 9/30/07 3/31/08 (unaudited) 9/30/07 - ----------------------------------------------------------------------------------------------------------------------------------- Investment activities: Net investment income (loss) $ 1,010 $ 646 $ (1,519) $ (3,011) Net realized gain (loss) from securities sold (54,753) (1,620) (1,544) 71,394 Net realized loss on foreign currency transactions -- -- -- -- Net change in unrealized appreciation (depreciation) on investments, foreign currencies, and translation of other assets and liabilities denominated in foreign currencies (29,818) 39,771 (68,518) 65,475 - ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (83,561) 38,797 (71,581) 133,858 - ----------------------------------------------------------------------------------------------------------------------------------- Dividends and distributions to shareholders: Net investment income Institutional Class Shares (612) (444) -- -- Investor Class Shares (273) (52) (2,912) -- Realized capital gains Institutional Class Shares -- -- -- -- Investor Class Shares -- -- (84,525) (50,964) - ----------------------------------------------------------------------------------------------------------------------------------- Total dividends and distributions (885) (496) (87,437) (50,964) - ----------------------------------------------------------------------------------------------------------------------------------- Capital share transactions: Institutional Class Shares Proceeds from shares issued 193,600 147,804 -- -- Proceeds from shares issued in lieu of cash distributions 503 444 -- -- Cost of shares redeemed (19,208) (14,649) -- -- - ----------------------------------------------------------------------------------------------------------------------------------- Net increase in net assets from Institutional Class Shares transactions 174,895 133,599 -- -- - ----------------------------------------------------------------------------------------------------------------------------------- Investor Class Shares Proceeds from shares issued 250,073 13,619 47,664 84,795 Proceeds from shares issued in lieu of cash distributions 271 52 86,908 50,559 Cost of shares redeemed (17,315) (5,605) (57,170) (145,438) - ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from Investor Class Shares transactions 233,029 8,066 77,402 (10,084) - ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from capital share transactions 407,924 141,665 77,402 (10,084) - ----------------------------------------------------------------------------------------------------------------------------------- Total increase (decrease) in net assets 323,478 179,966 (81,616) 72,810 - ----------------------------------------------------------------------------------------------------------------------------------- Net assets: Beginning of period 275,319 95,353 638,037 565,227 - ----------------------------------------------------------------------------------------------------------------------------------- End of period $ 598,797 $ 275,319 $ 556,421 $ 638,037 =================================================================================================================================== Undistributed net investment income (Accumulated net investment loss) (Distributions in excess of net investment income) $ 655 $ 530 $ (1,245) $ 3,186 =================================================================================================================================== Shares issued and redeemed: Institutional Class Shares Issued 13,794 11,444 -- -- Issued in lieu of cash distributions 33 36 -- -- Redeemed (1,413) (1,132) -- -- - ----------------------------------------------------------------------------------------------------------------------------------- Net increase in Institutional Class Shares 12,414 10,348 -- -- - ----------------------------------------------------------------------------------------------------------------------------------- Investor Class Shares Issued 17,443 1,038 856 1,420 Issued in lieu of cash distributions 18 4 1,563 898 Redeemed (1,295) (439) (1,051) (2,458) - ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in Investor Class Shares 16,166 603 1,368 (140) - ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in share transactions 28,580 10,951 1,368 (140) =================================================================================================================================== Turner International Turner Large Cap Core Growth Fund Growth Fund ----------------------------------------------------------------------- 10/1/07 thru 1/31/07 (1) thru 10/1/07 thru year ended 3/31/08 (unaudited) 9/30/07 3/31/08 (unaudited) 9/30/07 - ----------------------------------------------------------------------------------------------------------------------------------- Investment activities: Net investment income (loss) $ 20 $ 11 $ 51 $ 54 Net realized gain (loss) from securities sold (89) (34) (2,806) 755 Net realized loss on foreign currency transactions (15) (7) -- -- Net change in unrealized appreciation (depreciation) on investments, foreign currencies, and translation of other assets and liabilities denominated in foreign currencies (181) 404 (4,041) 4,190 - ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (265) 374 (6,796) 4,999 - ----------------------------------------------------------------------------------------------------------------------------------- Dividends and distributions to shareholders: Net investment income Institutional Class Shares (5) -- (89) (66) Investor Class Shares -- -- -- -- Realized capital gains Institutional Class Shares (28) -- -- -- Investor Class Shares -- -- -- -- - ----------------------------------------------------------------------------------------------------------------------------------- Total dividends and distributions (33) -- (89) (66) - ----------------------------------------------------------------------------------------------------------------------------------- Capital share transactions: Institutional Class Shares Proceeds from shares issued 3,531 2,035 12,987 19,850 Proceeds from shares issued in lieu of cash distributions 33 -- 75 54 Cost of shares redeemed (1,149) -- (6,513) (6,530) - ----------------------------------------------------------------------------------------------------------------------------------- Net increase in net assets from Institutional Class Shares transactions 2,415 2,035 6,549 13,374 - ----------------------------------------------------------------------------------------------------------------------------------- Investor Class Shares Proceeds from shares issued -- -- 834 86 Proceeds from shares issued in lieu of cash distributions -- -- -- -- Cost of shares redeemed -- -- (47) (2) - ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from Investor Class Shares transactions -- -- 787 84 - ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from capital share transactions 2,415 2,035 7,336 13,458 - ----------------------------------------------------------------------------------------------------------------------------------- Total increase (decrease) in net assets 2,117 2,409 451 18,391 - ----------------------------------------------------------------------------------------------------------------------------------- Net assets: Beginning of period 2,409 -- 37,901 19,510 - ----------------------------------------------------------------------------------------------------------------------------------- End of period $ 4,526 $ 2,409 $ 38,352 $ 37,901 =================================================================================================================================== Undistributed net investment income (Accumulated net investment loss) (Distributions in excess of net investment income) $ 19 $ 4 $ 4 $ 42 =================================================================================================================================== Shares issued and redeemed: Institutional Class Shares Issued 294 197 1,976 3,159 Issued in lieu of cash distributions 3 -- 11 9 Redeemed (95) -- (1,007) (1,089) - ----------------------------------------------------------------------------------------------------------------------------------- Net increase in Institutional Class Shares 202 197 980 2,079 - ----------------------------------------------------------------------------------------------------------------------------------- Investor Class Shares Issued -- -- 138 13 Issued in lieu of cash distributions -- -- -- -- Redeemed -- -- (7) -- - ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in Investor Class Shares -- -- 131 13 - ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in share transactions 202 197 1,111 2,092 ===================================================================================================================================
(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 2008 SEMIANNUAL REPORT | 42 & 43 FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS (000)
Turner Midcap Turner Midcap Equity Fund Growth Fund -------------------------------------------------------------------------- 10/1/07 thru 1/31/07 (1) thru 10/1/07 thru year ended 3/31/08 (unaudited) 9/30/07 3/31/08(unaudited) 9/30/07 - ----------------------------------------------------------------------------------------------------------------------------------- Investment activities: Net investment income (loss) $ (1) $ (1) $ (2,523) $ (7,435) Net realized gain (loss) from securities sold (57) (21) 4,358 133,836 Net change in unrealized appreciation (depreciation) on investments (24) 26 (165,413) 178,581 - ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (82) 4 (163,578) 304,982 - ----------------------------------------------------------------------------------------------------------------------------------- Dividends and distributions to shareholders: Net investment income Institutional Class Shares -- -- -- -- Investor Class Shares -- -- -- -- Retirement Class Shares -- -- -- -- Realized capital gains Institutional Class Shares -- -- -- -- Investor Class Shares -- -- -- -- Retirement Class Shares -- -- -- -- - ----------------------------------------------------------------------------------------------------------------------------------- Total dividends and distributions -- -- -- -- - ----------------------------------------------------------------------------------------------------------------------------------- Capital share transactions: Institutional Class Shares Proceeds from shares issued 100 -- -- -- Proceeds from shares issued in lieu of cash distributions -- -- -- -- Cost of shares redeemed -- -- -- -- - ----------------------------------------------------------------------------------------------------------------------------------- Net increase in net assets from Institutional Class Shares transactions 100 -- -- -- - ----------------------------------------------------------------------------------------------------------------------------------- Investor Class Shares Proceeds from shares issued 122 629 272,942 327,209 Proceeds from shares issued in lieu of cash distributions -- -- -- -- Cost of shares redeemed (90) (101) (196,212) (404,010) - ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from Investor Class Shares transactions 32 528 76,730 (76,801) - ----------------------------------------------------------------------------------------------------------------------------------- Retirement Class Shares Proceeds from shares issued -- -- 1,405 4,134 Proceeds from shares issued in lieu of cash distributions -- -- -- -- Cost of shares redeemed -- -- (673) (1,576) - ----------------------------------------------------------------------------------------------------------------------------------- Net increase in net assets from Retirement Class Shares transactions -- -- 732 2,558 - ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from capital share transactions 132 528 77,462 (74,243) - ----------------------------------------------------------------------------------------------------------------------------------- Total increase (decrease) in net assets 50 532 (86,116) 230,739 - ----------------------------------------------------------------------------------------------------------------------------------- Net assets: Beginning of period 532 -- 1,346,384 1,115,645 - ----------------------------------------------------------------------------------------------------------------------------------- End of period $ 582 $ 532 $ 1,260,268 $ 1,346,384 =================================================================================================================================== Undistributed net investment income (Accumulated net investment loss) $ (1) $ -- $ (2,322) $ 201 =================================================================================================================================== Shares issued and redeemed: Institutional Class Shares Issued 11 -- -- -- Issued in lieu of cash distributions -- -- -- -- Redeemed -- -- -- -- - ----------------------------------------------------------------------------------------------------------------------------------- Net increase in Institutional Class Shares 11 -- -- -- - ----------------------------------------------------------------------------------------------------------------------------------- Investor Class Shares Issued 12 60 7,990 10,387 Issued in lieu of cash distributions -- -- -- -- Redeemed (9) (10) (5,776) (13,149) - ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in Investor Class Shares 3 50 2,214 (2,762) - ----------------------------------------------------------------------------------------------------------------------------------- Retirement Class Shares Issued -- -- 42 140 Issued in lieu of cash distributions -- -- -- -- Redeemed -- -- (20) (52) - ----------------------------------------------------------------------------------------------------------------------------------- Net increase in Retirement Class Shares -- -- 22 88 - ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in share transactions 14 50 2,236 (2,674) ===================================================================================================================================
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Turner New Turner Quantitative Enterprise Fund Large Cap Value Fund -------------------------------------------------------------------- 10/1/07 thru year ended 10/1/07 thru year ended 3/31/08 (unaudited) 9/30/07 3/31/08 (unaudited) 9/30/07 - ------------------------------------------------------------------------------------------------------------------------------- Investment activities: Net investment income (loss) $ (335) $ (248) $ 6 $ 9 Net realized gain (loss) from securities sold (9,797) 3,615 (13) 81 Net change in unrealized appreciation (depreciation) on investments (7,775) 5,954 (75) 19 - ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (17,907) 9,321 (82) 109 - ------------------------------------------------------------------------------------------------------------------------------- Dividends and distributions to shareholders: Net investment income Institutional Class Shares -- -- (8) (9) Investor Class Shares -- -- -- -- Retirement Class Shares -- -- -- -- Realized capital gains Institutional Class Shares -- -- (110) (12) Investor Class Shares -- -- -- -- Retirement Class Shares -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------- Total dividends and distributions -- -- (118) (21) - ------------------------------------------------------------------------------------------------------------------------------- Capital share transactions: Institutional Class Shares Proceeds from shares issued -- -- 102 230 Proceeds from shares issued in lieu of cash distributions -- -- 118 21 Cost of shares redeemed -- -- -- (84) - ------------------------------------------------------------------------------------------------------------------------------- Net increase in net assets from Institutional Class Shares transactions -- -- 220 167 - ------------------------------------------------------------------------------------------------------------------------------- Investor Class Shares Proceeds from shares issued 52,542 50,438 -- -- Proceeds from shares issued in lieu of cash distributions -- -- -- -- Cost of shares redeemed (48,729) (13,654) -- -- - ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from Investor Class Shares transactions 3,813 36,784 -- -- - ------------------------------------------------------------------------------------------------------------------------------- Retirement Class Shares Proceeds from shares issued -- -- -- -- Proceeds from shares issued in lieu of cash distributions -- -- -- -- Cost of shares redeemed -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------- Net increase in net assets from Retirement Class Shares transactions -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from capital share transactions 3,813 36,784 220 167 - ------------------------------------------------------------------------------------------------------------------------------- Total increase (decrease) in net assets (14,094) 46,105 20 255 - ------------------------------------------------------------------------------------------------------------------------------- Net assets: Beginning of period 70,145 24,040 835 580 - ------------------------------------------------------------------------------------------------------------------------------- End of period $ 56,051 $ 70,145 $ 855 $ 835 =============================================================================================================================== Undistributed net investment income (Accumulated net investment loss) $ (307) $ 28 $ 3 $ 5 =============================================================================================================================== Shares issued and redeemed: Institutional Class Shares Issued -- -- 9 19 Issued in lieu of cash distributions -- -- 11 2 Redeemed -- -- -- (7) - ------------------------------------------------------------------------------------------------------------------------------- Net increase in Institutional Class Shares -- -- 20 14 - ------------------------------------------------------------------------------------------------------------------------------- Investor Class Shares Issued 6,054 6,123 -- -- Issued in lieu of cash distributions -- -- -- -- Redeemed (6,271) (1,917) -- -- - ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in Investor Class Shares (217) 4,206 -- -- - ------------------------------------------------------------------------------------------------------------------------------- Retirement Class Shares Issued -- -- -- -- Issued in lieu of cash distributions -- -- -- -- Redeemed -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------- Net increase in Retirement Class Shares -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in share transactions (217) 4,206 20 14 =============================================================================================================================== Turner Small Cap Turner Small Cap Equity Fund Growth Fund -------------------------------------------------------------------- 10/1/07 thru year ended 10/1/07 thru year ended 3/31/08 (unaudited) 9/30/07 3/31/08 (unaudited) 9/30/07 - --------------------------------------------------------------------------------------------------------------------------------- Investment activities: Net investment income (loss) $ (138) $ (513) $ (745) $ (1,930) Net realized gain (loss) from securities sold (3,112) 9,940 (21,333) 38,846 Net change in unrealized appreciation (depreciation) on investments (4,000) (1,650) (24,513) 28,720 - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (7,250) 7,777 (46,591) 65,636 - --------------------------------------------------------------------------------------------------------------------------------- Dividends and distributions to shareholders: Net investment income Institutional Class Shares -- -- -- -- Investor Class Shares -- -- -- -- Retirement Class Shares -- -- -- -- Realized capital gains Institutional Class Shares -- -- -- -- Investor Class Shares (9,517) (5,701) -- -- Retirement Class Shares -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------------- Total dividends and distributions (9,517) (5,701) -- -- - --------------------------------------------------------------------------------------------------------------------------------- Capital share transactions: Institutional Class Shares Proceeds from shares issued -- -- -- -- Proceeds from shares issued in lieu of cash distributions -- -- -- -- Cost of shares redeemed -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------------- Net increase in net assets from Institutional Class Shares transactions -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------------- Investor Class Shares Proceeds from shares issued 3,844 7,445 30,476 80,195 Proceeds from shares issued in lieu of cash distributions 9,456 5,671 -- -- Cost of shares redeemed (18,084) (31,240) (40,981) (76,172) - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from Investor Class Shares transactions (4,784) (18,124) (10,505) 4,023 - --------------------------------------------------------------------------------------------------------------------------------- Retirement Class Shares Proceeds from shares issued -- -- -- -- Proceeds from shares issued in lieu of cash distributions -- -- -- -- Cost of shares redeemed -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------------- Net increase in net assets from Retirement Class Shares transactions -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from capital share transactions (4,784) (18,124) (10,505) 4,023 - --------------------------------------------------------------------------------------------------------------------------------- Total increase (decrease) in net assets (21,551) (16,048) (57,096) 69,659 - --------------------------------------------------------------------------------------------------------------------------------- Net assets: Beginning of period 65,292 81,340 317,930 248,271 - --------------------------------------------------------------------------------------------------------------------------------- End of period $ 43,741 $ 65,292 $ 260,834 $ 317,930 ================================================================================================================================= Undistributed net investment income (Accumulated net investment loss) $ (126) $ 12 $ (400) $ 345 ================================================================================================================================= Shares issued and redeemed: Institutional Class Shares Issued -- -- -- -- Issued in lieu of cash distributions -- -- -- -- Redeemed -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------------- Net increase in Institutional Class Shares -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------------- Investor Class Shares Issued 280 430 975 2,703 Issued in lieu of cash distributions 676 336 -- -- Redeemed (1,207) (1,796) (1,327) (2,547) - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in Investor Class Shares (251) (1,030) (352) 156 - --------------------------------------------------------------------------------------------------------------------------------- Retirement Class Shares Issued -- -- -- -- Issued in lieu of cash distributions -- -- -- -- Redeemed -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------------- Net increase in Retirement Class Shares -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in share transactions (251) (1,030) (352) 156 =================================================================================================================================
(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 2008 SEMIANNUAL REPORT | 44 & 45 FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
Realized and Net asset Net unrealized value, investment gains beginning income (losses) on of period (loss) investments - --------------------------------------------------------------------- Turner Concentrated Growth Fund -- Investor Class Shares - -------------------------------------------------------- 2008* $ 10.12 (0.05) (3) (1.75) 2007 $ 7.60 (0.05) (3) 2.57 2006 $ 7.10 (0.08) (3) 0.58 2005 $ 5.82 (0.02) 1.30 2004 $ 6.05 (0.07) (0.16) 2003 $ 4.03 (0.04) 2.06 - ----------------------------------------------------- Turner Core Growth Fund -- Institutional Class Shares - ----------------------------------------------------- 2008* $ 14.39 0.03 (3) (1.82) 2007 $ 11.65 0.02 2.77 2006 $ 10.93 0.06 0.69 2005 (4) $ 8.84 0.02 2.07 2004 $ 8.04 (0.03) 0.83 2003 $ 6.29 (0.03) 1.78 - ------------------------------------------------ Turner Core Growth Fund -- Investor Class Shares - ------------------------------------------------ 2008* $ 14.33 0.02 (3) (1.82) 2007 $ 11.61 0.02 2.73 2006 $ 10.93 0.07 0.64 2005 (2)(4) $ 10.58 -- 0.35 - ---------------------------------------------------- Turner Emerging Growth Fund -- Investor Class Shares - ---------------------------------------------------- 2008* $ 64.06 (0.14) (3) (6.05) 2007 $ 55.97 (0.30) (3) 13.61 2006 $ 56.46 (0.32) (3) 3.02 2005 $ 50.02 (0.46) (3) 13.35 2004 $ 41.38 (0.39) 10.04 2003 $ 32.04 (0.25) 9.59 - ------------------------------------------------------------------- Turner International Core Growth Fund -- Institutional Class Shares - ------------------------------------------------------------------- 2008* $ 12.21 0.06 (3) (0.81) 2007 (5) $ 10.00 0.07 (3) 2.14 - ---------------------------------------------------------- Turner Large Cap Growth Fund -- Institutional Class Shares - ---------------------------------------------------------- 2008* $ 6.78 0.01 (3) (1.05) 2007 $ 5.58 0.01 (3) 1.21 2006 $ 5.41 0.01 (3) 0.17 2005 $ 4.83 0.01 (3) 0.57 2004 $ 4.62 -- 0.21 2003 $ 3.50 -- 1.12 - ----------------------------------------------------- Turner Large Cap Growth Fund -- Investor Class Shares - ----------------------------------------------------- 2008* $ 6.77 --** (3) (1.05) 2007 (5) $ 5.92 0.01 (3) 0.84 - ------------------------------------------------------- Turner Midcap Equity Fund -- Institutional Class Shares - ------------------------------------------------------- 2008* $ 10.68 0.05 (3)(6) (1.54) 2007 (5) $ 10.00 0.04 (3)(6) 0.64 - -------------------------------------------------- Turner Midcap Equity Fund -- Investor Class Shares - -------------------------------------------------- 2008* $ 10.61 (0.01) (3) (1.50) 2007 (5) $ 10.00 (0.02) (3) 0.63 Total Dividends Distributions from from net from Total investment investment capital dividends and operations income gains distributions - --------------------------------------------------------------------- Turner Concentrated Growth Fund -- Investor Class Shares - -------------------------------------------------------- 2008* (1.80) -- -- -- 2007 2.52 -- -- -- 2006 0.50 -- -- -- 2005 1.28 -- -- -- 2004 (0.23) -- -- -- 2003 2.02 -- -- -- - ----------------------------------------------------- Turner Core Growth Fund -- Institutional Class Shares - ----------------------------------------------------- 2008* (1.79) (0.03) -- (0.03) 2007 2.79 (0.05) -- (0.05) 2006 0.75 (0.03) -- (0.03) 2005 (4) 2.09 -- -- -- 2004 0.80 -- -- -- 2003 1.75 -- -- -- - ------------------------------------------------ Turner Core Growth Fund -- Investor Class Shares - ------------------------------------------------ 2008* (1.80) (0.02) -- (0.02) 2007 2.75 (0.03) -- (0.03) 2006 0.71 (0.03) -- (0.03) 2005 (2)(4) 0.35 -- -- -- - ---------------------------------------------------- Turner Emerging Growth Fund -- Investor Class Shares - ---------------------------------------------------- 2008* (6.19) (0.25) (8.50) (8.75) 2007 13.31 -- (5.22) (5.22) 2006 2.70 -- (3.19) (3.19) 2005 12.89 -- (6.45) (6.45) 2004 9.65 -- (1.01) (1.01) 2003 9.34 -- -- -- - ------------------------------------------------------------------- Turner International Core Growth Fund -- Institutional Class Shares - ------------------------------------------------------------------- 2008* (0.75) (0.02) (0.10) (0.12) 2007 (5) 2.21 -- -- -- - ---------------------------------------------------------- Turner Large Cap Growth Fund -- Institutional Class Shares - ---------------------------------------------------------- 2008* (1.04) (0.01) -- (0.01) 2007 1.22 (0.02) -- (0.02) 2006 0.18 (0.01) -- (0.01) 2005 0.58 --** -- -- 2004 0.21 --** -- -- 2003 1.12 --** -- -- - ----------------------------------------------------- Turner Large Cap Growth Fund -- Investor Class Shares - ----------------------------------------------------- 2008* (1.05) (0.01) -- (0.01) 2007 (5) 0.85 -- -- -- - ------------------------------------------------------- Turner Midcap Equity Fund -- Institutional Class Shares - ------------------------------------------------------- 2008* (1.49) -- -- -- 2007 (5) 0.68 -- -- -- - -------------------------------------------------- Turner Midcap Equity Fund -- Investor Class Shares - -------------------------------------------------- 2008* (1.51) -- -- -- 2007 (5) 0.61 -- -- --
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Net Ratio of Net asset assets end net expenses value, end Total of period to average of period return (000) net assets++ - ---------------------------------------------------------------- Turner Concentrated Growth Fund -- Investor Class Shares - -------------------------------------------------------- 2008* $ 8.32 (17.79)%+ $ 36,762 1.65% 2007 $ 10.12 33.16% $ 61,401 1.11% 2006 $ 7.60 7.04% $ 38,180 1.59% 2005 $ 7.10 21.99% $ 30,779 1.15% 2004 $ 5.82 (3.80)% $ 39,109 1.42% 2003 $ 6.05 50.12% $ 47,004 1.23% - ----------------------------------------------------- Turner Core Growth Fund -- Institutional Class Shares - ----------------------------------------------------- 2008* $ 12.57 (12.49)%+ $ 363,782 0.69% 2007 $ 14.39 24.00% $ 237,778 0.68% 2006 $ 11.65 6.91% $ 71,935 0.59% 2005 (4) $ 10.93 23.64% $ 40,857 0.69% (1) 2004 $ 8.84 9.95% $ 5,080 1.25% 2003 $ 8.04 27.82% $ 5,528 1.25% - ------------------------------------------------ Turner Core Growth Fund -- Investor Class Shares - ------------------------------------------------ 2008* $ 12.51 (12.60)%+ $ 235,015 0.94% 2007 $ 14.33 23.68% $ 37,541 0.94% 2006 $ 11.61 6.52% $ 23,418 0.94% 2005 (2)(4) $ 10.93 3.31%+ $ 1 0.83% - ---------------------------------------------------- Turner Emerging Growth Fund -- Investor Class Shares - ---------------------------------------------------- 2008* $ 49.12 (11.20)%+ $ 556,421 1.40% 2007 $ 64.06 25.08% $ 638,037 1.40% 2006 $ 55.97 4.95% $ 565,227 1.40% 2005 $ 56.46 27.90% $ 502,108 1.40% 2004 $ 50.02 23.54% $ 366,692 1.40% 2003 $ 41.38 29.15% $ 253,840 1.40% - ------------------------------------------------------------------- Turner International Core Growth Fund -- Institutional Class Shares - ------------------------------------------------------------------- 2008* $ 11.34 (6.23)%+ $ 4,526 1.10% 2007 (5) $ 12.21 22.10%+ $ 2,409 1.10% - ---------------------------------------------------------- Turner Large Cap Growth Fund -- Institutional Class Shares - ---------------------------------------------------------- 2008* $ 5.73 (15.32)%+ $ 37,529 0.69% 2007 $ 6.78 21.86% $ 37,814 0.70% 2006 $ 5.58 3.40% $ 19,510 0.75% 2005 $ 5.41 12.09% $ 43,025 0.75% 2004 $ 4.83 4.64% $ 67,991 0.75% 2003 $ 4.62 32.01% $ 79,416 0.75% - ----------------------------------------------------- Turner Large Cap Growth Fund -- Investor Class Shares - ----------------------------------------------------- 2008* $ 5.71 (15.53)%+ $ 823 0.94% 2007 (5) $ 6.77 14.36%+ $ 87 0.94% - ------------------------------------------------------- Turner Midcap Equity Fund -- Institutional Class Shares - ------------------------------------------------------- 2008* $ 9.19 (13.95)%+ $ 99 0.90% 2007 (5) $ 10.68 6.80%+ $ -- 0.90% - -------------------------------------------------- Turner Midcap Equity Fund -- Investor Class Shares - -------------------------------------------------- 2008* $ 9.10 (14.23)%+ $ 483 1.15% 2007 (5) $ 10.61 6.10%+ $ 532 1.15% Ratio of net Ratio of total investment expenses income (loss) Portfolio to average to average turnover net assets net assets++ rate+++ - -------------------------------------------------------------- Turner Concentrated Growth Fund -- Investor Class Shares - -------------------------------------------------------- 2008* 1.96% (0.99)% 191.19% 2007 1.46% (0.57)% 219.62% 2006 1.79% (1.01)% 250.81% 2005 1.41% (0.57)% 329.52% 2004 1.57% (0.99)% 498.78% 2003 1.60% (0.90)% 762.18% - ----------------------------------------------------- Turner Core Growth Fund -- Institutional Class Shares - ----------------------------------------------------- 2008* 0.94% 0.50% 108.58% 2007 1.06% 0.42% 102.71% 2006 1.20% 0.77% 123.67% 2005 (4) 1.60% 0.46% 136.36% 2004 1.97% (0.27)% 104.00% 2003 2.14% (0.34)% 187.00% - ------------------------------------------------ Turner Core Growth Fund -- Investor Class Shares - ------------------------------------------------ 2008* 1.19% 0.24% 108.58% 2007 1.31% 0.15% 102.71% 2006 1.43% 0.23% 123.67% 2005 (2)(4) 2.50% 0.33% 136.36% - ---------------------------------------------------- Turner Emerging Growth Fund -- Investor Class Shares - ---------------------------------------------------- 2008* 1.49% (0.50)% 31.35% 2007 1.48% (0.50)% 87.53% 2006 1.44% (0.57)% 77.87% 2005 1.44% (0.90)% 73.50% 2004 1.42% (0.85)% 122.45% 2003 1.44% (0.81)% 147.77% - -------------------------------------------------------------------- Turner International Core Growth Fund -- Institutional Class Shares - -------------------------------------------------------------------- 2008* 2.94% 1.06% 118.93% 2007 (5) 4.63% 0.99% 111.08% - ----------------------------------------------------------- Turner Large Cap Growth Fund -- Institutional Class Shares - ----------------------------------------------------------- 2008* 1.07% 0.26% 107.63% 2007 1.23% 0.23% 118.85% 2006 1.16% 0.26% 194.17% 2005 1.10% 0.16% 154.66% 2004 0.94% 0.11% 165.94% 2003 0.97% 0.03% 201.35% - ----------------------------------------------------- Turner Large Cap Growth Fund -- Investor Class Shares - ----------------------------------------------------- 2008* 1.36% 0.03% 107.63% 2007 (5) 1.51% 0.13% 118.85% - ------------------------------------------------------- Turner Midcap Equity Fund -- Institutional Class Shares - ------------------------------------------------------- 2008* 16.55% 1.05% 77.07% 2007 (5) 31.25% 0.60% 97.57% - -------------------------------------------------- Turner Midcap Equity Fund -- Investor Class Shares - -------------------------------------------------- 2008* 16.32% (0.50)% 77.07% 2007 (5) 22.26% (0.26)% 97.57%
* For the six-month period ended March 31, 2008, unless otherwise indicated (unaudited). All ratios for the period have been annualized. ** 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) For the period October 1, 2004 through February 25, 2005, the total expense cap was 1.25%. Effective February 26, 2005, the total expense cap was changed to 0.59%. (2) Commenced operations on August 1, 2005. All ratios for the period have been annualized. (3) Based on average shares outstanding. (4) Effective February 25, 2005, the Constellation TIP Core Growth Fund reorganized with and into a newly-created series of the Turner Funds, the Turner Core Growth Fund. (5) Commenced operations on January 31, 2007. All ratios for the period have been annualized. (6) 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. Amounts designated as "--" are either $0, or have been rounded to $0. The accompanying notes are an integral part of the financial statements. TURNER FUNDS 2008 SEMIANNUAL REPORT | 46 & 47 FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
Net asset Net Realized and Total value, investment unrealized from beginning income gains (losses) investment of period (loss) on investments operations - -------------------------------------------------------------------------- Turner Midcap Growth Fund -- Investor Class Shares - -------------------------------------------------- 2008* $35.71 (0.06) (1) (4.10) (4.16) 2007 $27.63 (0.20) (1) 8.28 8.08 2006 $26.39 (0.08) (1) 1.32 1.24 2005 $20.99 (0.19) (1) 5.59 5.40 2004 $19.54 (0.18) (1) 1.63 1.45 2003 $13.78 (0.14) (1) 5.90 5.76 - ---------------------------------------------------- Turner Midcap Growth Fund -- Retirement Class Shares - ---------------------------------------------------- 2008* $34.74 (0.10) (1) (3.98) (4.08) 2007 $26.96 (0.30) (1) 8.08 7.78 2006 $25.89 (0.23) (1) 1.30 1.07 2005 $20.69 (0.30) (1) 5.50 5.20 2004 $19.36 (0.28) (1) 1.61 1.33 2003 $13.72 (0.23) (1) 5.87 5.64 - --------------------------------------------------- Turner New Enterprise Fund -- Investor Class Shares - --------------------------------------------------- 2008* $ 8.72 (0.03) (1) (1.53) (1.56) 2007 $ 6.26 (0.07) (1) 2.53 2.46 2006 $ 5.86 (0.07) (1) 0.47 (2) 0.40 2005 $ 4.52 (0.03) 1.37 1.34 2004 $ 4.34 (0.06) 0.24 (2) 0.18 2003 $ 2.27 (0.02) 2.09 2.07 - ---------------------------------------------------------------------- Turner Quantitative Large Cap Value Fund -- Institutional Class Shares - ---------------------------------------------------------------------- 2008* $12.86 0.08 (1) (1.07) (0.99) 2007 $11.44 0.14 (1) 1.65 1.79 2006 (3) $10.00 0.16 (1) 1.33 1.49 - ----------------------------------------------------- Turner Small Cap Equity Fund -- Investor Class Shares - ----------------------------------------------------- 2008* $17.31 (0.04) (1) (2.07) (2.11) 2007 $16.94 (0.12) (1) 1.79 1.67 2006 $16.06 (0.07) (1) 0.95 0.88 2005 $13.92 (0.11) (1) 2.25 2.14 2004 $12.27 (0.02) 2.95 2.93 2003 $ 9.30 (0.02) 3.00 2.98 - ----------------------------------------------------- Turner Small Cap Growth Fund -- Investor Class Shares - ----------------------------------------------------- 2008* $32.98 (0.08) (1) (4.82) (4.90) 2007 $26.17 (0.20) (1) 7.01 6.81 2006 $24.68 (0.21) (1) 1.70 1.49 2005 $21.33 (0.01) 3.36 3.35 2004 $18.88 (0.19) 2.64 2.45 2003 $12.62 (0.12) 6.38 6.26 Dividends Distributions Tax from net from Return Total investment capital of dividends and income gains Capital distributions - -------------------------------------------------------------------------- Turner Midcap Growth Fund -- Investor Class Shares - -------------------------------------------------- 2008* -- -- -- -- 2007 -- -- -- -- 2006 -- -- -- -- 2005 -- -- -- -- 2004 -- -- -- -- 2003 -- -- -- -- - ---------------------------------------------------- Turner Midcap Growth Fund -- Retirement Class Shares - ---------------------------------------------------- 2008* -- -- -- -- 2007 -- -- -- -- 2006 -- -- -- -- 2005 -- -- -- -- 2004 -- -- -- -- 2003 -- -- -- -- - --------------------------------------------------- Turner New Enterprise Fund -- Investor Class Shares - --------------------------------------------------- 2008* -- -- -- -- 2007 -- -- -- -- 2006 -- -- -- -- 2005 -- -- -- -- 2004 -- -- -- -- 2003 -- -- -- -- - ---------------------------------------------------------------------- Turner Quantitative Large Cap Value Fund -- Institutional Class Shares - ---------------------------------------------------------------------- 2008* (0.12) (1.70) -- (1.82) 2007 (0.15) (0.22) -- (0.37) 2006 (3) (0.05) -- -- (0.05) - ----------------------------------------------------- Turner Small Cap Equity Fund -- Investor Class Shares - ----------------------------------------------------- 2008* -- (2.77) -- (2.77) 2007 -- (1.30) -- (1.30) 2006 -- -- -- -- 2005 -- -- -- -- 2004 -- (1.23) (0.05) (1.28) 2003 (0.01) -- -- (0.01) - ----------------------------------------------------- Turner Small Cap Growth Fund -- Investor Class Shares - ----------------------------------------------------- 2008* -- -- -- -- 2007 -- -- -- -- 2006 -- -- -- -- 2005 -- -- -- -- 2004 -- -- -- -- 2003 -- -- -- --
- --------------------------------------------------------------------------------
Net Ratio of Net asset assets end net expenses value, end Total of period to average of period return (000) net assets++ - ----------------------------------------------------------------------------- Turner Midcap Growth Fund -- Investor Class Shares - -------------------------------------------------- 2008* $31.55 (11.65)%+ $1,254,113 1.18% 2007 $35.71 29.24% $1,340,172 1.18% 2006 $27.63 4.70% $1,113,201 1.18% 2005 $26.39 25.73% $ 955,730 1.20% 2004 $20.99 7.42% $ 857,899 1.16% 2003 $19.54 41.80% $ 773,788 1.15% - ---------------------------------------------------- Turner Midcap Growth Fund -- Retirement Class Shares - ---------------------------------------------------- 2008* $30.66 (11.74)%+ $ 6,155 1.43% 2007 $34.74 28.86% $ 6,212 1.49% 2006 $26.96 4.13% $ 2,444 1.68% 2005 $25.89 25.13% $ 1,833 1.70% 2004 $20.69 6.87% $ 1,395 1.66% 2003 $19.36 41.11% $ 423 1.65% - --------------------------------------------------- Turner New Enterprise Fund -- Investor Class Shares - --------------------------------------------------- 2008* $ 7.16 (17.89)%+ $ 56,051 1.54% 2007 $ 8.72 39.30% $ 70,145 1.27% 2006 $ 6.26 6.83% $ 24,040 1.61% 2005 $ 5.86 29.65% $ 9,144 1.36% 2004 $ 4.52 4.15% $ 10,805 1.18% 2003 $ 4.34 91.19% $ 13,468 1.16% - ---------------------------------------------------------------------- Turner Quantitative Large Cap Value Fund -- Institutional Class Shares - ---------------------------------------------------------------------- 2008* $10.05 (8.97)%+ $ 855 0.69% 2007 $12.86 15.91% $ 835 0.65% 2006 (3) $11.44 14.92%+ $ 580 0.59% - ----------------------------------------------------- Turner Small Cap Equity Fund -- Investor Class Shares - ----------------------------------------------------- 2008* $12.43 (13.97)%+ $ 43,741 1.45% 2007 $17.31 10.14% $ 65,292 1.36% 2006 $16.94 5.48% $ 81,340 1.24% 2005 $16.06 15.37% $ 67,713 1.43% 2004 $13.92 24.75% $ 29,171 1.35% 2003 $12.27 32.04% $ 12,557 1.32% - ----------------------------------------------------- Turner Small Cap Growth Fund -- Investor Class Shares - ----------------------------------------------------- 2008* $28.08 (14.86)%+ $ 260,834 1.25% 2007 $32.98 26.02% $ 317,930 1.25% 2006 $26.17 6.04% $ 248,271 1.25% 2005 $24.68 15.71% $ 257,149 1.25% 2004 $21.33 12.98% $ 237,213 1.25% 2003 $18.88 49.60% $ 192,791 1.25% Ratio of net Ratio of total investment expenses income (loss) Portfolio to average to average turnover net assets net assets++ rate+++ - ---------------------------------------------------------------------- Turner Midcap Growth Fund -- Investor Class Shares - -------------------------------------------------- 2008* 1.24% (0.38)% 75.69% 2007 1.24% (0.63)% 155.27% 2006 1.18% (0.30)% 134.55% 2005 1.20% (0.78)% 151.63% 2004 1.16% (0.84)% 167.17% 2003 1.18% (0.87)% 208.80% - ---------------------------------------------------- Turner Midcap Growth Fund -- Retirement Class Shares - ---------------------------------------------------- 2008* 1.49% (0.64)% 75.69% 2007 1.56% (0.98)% 155.27% 2006 1.68% (0.83)% 134.55% 2005 1.70% (1.28)% 151.63% 2004 1.66% (1.35)% 167.17% 2003 1.68% (1.36)% 208.80% - --------------------------------------------------- Turner New Enterprise Fund -- Investor Class Shares - --------------------------------------------------- 2008* 1.87% (0.82)% 163.56% 2007 1.73% (0.98)% 173.48% 2006 2.06% (1.02)% 234.62% 2005 1.87% (1.14)% 226.82% 2004 1.51% (0.83)% 382.08% 2003 1.99% (0.95)% 451.37% - ---------------------------------------------------------------------- Turner Quantitative Large Cap Value Fund -- Institutional Class Shares - ---------------------------------------------------------------------- 2008* 6.17% 1.51% 106.77% 2007 5.25% 1.15% 270.76% 2006 (3) 7.71% 1.52% 251.67% - ----------------------------------------------------- Turner Small Cap Equity Fund -- Investor Class Shares - ----------------------------------------------------- 2008* 1.60% (0.53)% 74.87% 2007 1.59% (0.70)% 156.55% 2006 1.70% (0.39)% 143.43% 2005 1.67% (0.71)% 170.22% 2004 1.94% (0.25)% 221.99% 2003 2.05% (0.26)% 287.39% - ----------------------------------------------------- Turner Small Cap Growth Fund -- Investor Class Shares - ----------------------------------------------------- 2008* 1.51% (0.50)% 70.76% 2007 1.48% (0.65)% 134.34% 2006 1.42% (0.79)% 154.27% 2005 1.44% (0.91)% 152.96% 2004 1.41% (0.95)% 151.02% 2003 1.41% (0.79)% 187.95%
* For the six-month period ended March 31, 2008, unless otherwise indicated (unaudited). All ratios for the period have been annualized. + 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 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 October 10, 2005. All ratios for the period have been annualized. Amounts designated as "--" are either $0, or have been rounded to $0. The accompanying notes are an integral part of the financial statements. TURNER FUNDS 2008 SEMIANNUAL REPORT | 48 & 49 NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS March 31, 2008 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 eleven active portfolios as of March 31, 2008. The financial statements included herein are those of 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 International Core Growth Fund (the "International Core Growth Fund"), the Turner Large Cap Growth Fund (the "Large Cap Growth Fund"), the Turner Midcap Equity Fund (the "Midcap Equity Fund"), the Turner Midcap Growth Fund (the "Midcap Growth Fund"), the Turner New Enterprise Fund (the "New Enterprise Fund"), the Turner Quantitative Large Cap Value Fund (the "Quantitative Large Cap Value Fund" (formerly the Turner Large Cap Value Fund)), the Turner Small Cap Equity Fund (the "Small Cap Equity Fund") and the Turner Small Cap Growth Fund (the "Small Cap Growth Fund"), each a "Fund" and collectively the "Funds." The Quantitative Large Cap Value Fund commenced operations on October 10, 2005. The International Core Growth Fund and the Midcap Equity Fund commenced operations on January 31, 2007. 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, or a combination of the three. The assets of each Fund are segregated, and a shareholder's interest is limited to the Fund in which shares are held. The Funds' prospectus provides a description of each Fund's investment objectives, policies, and strategies along with information on the classes of shares currently being offered. On September 27, 2006, the assets of the Turner Technology Fund (the "Technology Fund") were reorganized into the New Enterprise Fund. Under the Agreement and Plan of Reorganization, 1,589,625 shares of the Technology Fund were exchanged for 1,674,572 shares of the New Enterprise Fund in a tax-free exchange. Upon the business combination of such Funds on September 27, 2006, the net assets of the Technology Fund, which included paid-in-capital of $137,747,073, accumulated realized losses of $129,088,165 and unrealized gains of $1,786,570, combined with the New Enterprise Fund were $24,141,573. The aggregate net assets of the Technology and New Enterprise Funds immediately before the reorganization were $10,445,478 and $13,696,095, respectively. The Emerging Growth, Small Cap Equity and Small Cap Growth Funds were closed to new investors on March 7, 2000, May 1, 2005 and July 31, 2004, 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 generally accepted accounting principles in the United States of America 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 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 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. 50 | TURNER FUNDS 2008 SEMIANNUAL REPORT (Unaudited) - -------------------------------------------------------------------------------- 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 the Fund becomes aware of a Significant Event that has occurred with respect to a security or group of securities after the closing of the exchange or market on which the security or securities principally trade, but before the time at which the Fund calculates 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 Fund uses FT Interactive Data Corp. ("FT") as a third party fair valuation vendor. FT provides a fair value for foreign securities in the International Core Growth 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 FT 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 International Core Growth Fund values its non-U.S. securities that exceed the applicable "confidence interval" based upon the fair values provided by FT. 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 FT are not reliable, the Adviser contacts the International Core Growth Fund's Administrator and may request that a meeting of the Committee be held. If a local market in which the International Core Growth Fund owns securities is closed for one or more days or a portion of a day, the International Core Growth Fund shall value all securities held in that corresponding currency based on the fair value prices provided by FT using the predetermined confidence interval discussed above. 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. FOREIGN CURRENCY TRANSLATION--The books and records of 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 International Core Growth Fund does 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 on 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 the difference between the amount of the investment income and foreign withholding taxes recorded on 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. TURNER FUNDS 2008 SEMIANNUAL REPORT | 51 NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 3. TRANSACTIONS WITH AFFILIATES: Certain officers and trustees of the Trust are also officers or employees of Turner Investment Partners, Inc. ("Turner") or SEI Global Funds Services ("SEI"), the Trust's sub-administrator. 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. SEI Investments Distribution Co. (the "Distributor") provides distribution services to the Funds under a Distribution Agreement. Prior to January 1, 2006, Constellation Investment Distribution Company, Inc. 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. Prior to February 1, 2007, Turner had contractually agreed to limit its administrator fee in the Core Growth Fund, Institutional Class Shares to 0.05% through January 31, 2007. Effective February 1, 2007, Turner has discontinued this arrangement. Under a separate Sub-Administration Agreement between Turner and SEI, SEI provides sub-administrative services to the Trust. For the six months ended March 31, 2008, SEI was paid $570,527 by Turner. The Funds have adopted a Distribution Plan for Investor Class and Retirement Class 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 Investor Class or Retirement Class 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 0.25% 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 and Retirement Class Shares that are subject to the arrangement in return for providing shareholder services. Currently, Investor Class Shares of the Concentrated Growth Fund, Core Growth Fund, Emerging Growth Fund, Large Cap Growth Fund, Midcap Equity Fund, Midcap Growth Fund, New Enterprise Fund, Small Cap Equity Fund, and Small Cap Growth Fund, and Retirement Class Shares of the Midcap Growth 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 six months ended March 31, 2008, the following Funds earned cash management credits which were used to offset transfer agent expenses. These amounts are labeled as "Fees Paid Indirectly" on the Statements of Operations.
AMOUNT -------- Concentrated Growth Fund $ 7,704 Core Growth Fund 1,168 Emerging Growth Fund 8,324 International Core Growth Fund 155 Large Cap Growth Fund 527 Midcap Equity Fund 209 Midcap Growth Fund 25,764 New Enterprise Fund 11,578 Quantitative Large Cap Value Fund 195 Small Cap Equity Fund 1,314 Small Cap Growth Fund 11,798
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 and Midcap Equity Fund. 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 operating expenses to a specified percentage of the average daily net assets of certain Funds on an annualized basis through January 31, 2009. 52 | TURNER FUNDS 2008 SEMIANNUAL REPORT (Unaudited) - -------------------------------------------------------------------------------- Accordingly, the advisory fee and expense caps for certain Funds are as follows:
ADVISORY FEES TOTAL EXPENSE CAP(8) -------------- -------------------- Core Growth Fund 0.60%(9) 0.69%(1)(3) Emerging Growth Fund 1.00 1.40 International Core Growth Fund 0.85 1.10 Large Cap Growth Fund 0.60 0.69(1)(4) Midcap Equity Fund 0.75 0.90(1) Midcap Growth Fund 0.75 1.18(2)(6) Quantitative Large Cap Value Fund 0.60 0.69(5) Small Cap Equity Fund 0.95 1.45(7) Small Cap Growth Fund 1.00 1.25
(1) REPRESENTS MAXIMUM EXPENSE CAP FOR INSTITUTIONAL CLASS SHARES WHERE FUNDS OFFER BOTH INSTITUTIONAL CLASS SHARES AND INVESTOR CLASS SHARES. (2) REPRESENTS MAXIMUM EXPENSE CAP FOR INVESTOR CLASS SHARES WHERE FUNDS OFFER BOTH INVESTOR CLASS SHARES AND RETIREMENT CLASS SHARES. (3) PRIOR TO FEBRUARY 1, 2007, THE MAXIMUM EXPENSE CAP FOR THE FUND WAS 0.59%. PRIOR TO THE REORGANIZATION OF THE CONSTELLATION TIP CORE GROWTH FUND ON FEBRUARY 25, 2005, THE MAXIMUM EXPENSE CAP FOR THE FUND WAS 1.25%. (4) PRIOR TO FEBRUARY 1, 2007, THE MAXIMUM EXPENSE CAP FOR THE FUND WAS 0.75%. (5) PRIOR TO FEBRUARY 1, 2007, THE MAXIMUM EXPENSE CAP FOR THE FUND WAS 0.59%. (6) PRIOR TO FEBRUARY 1, 2007, THE MAXIMUM EXPENSE CAP FOR THE FUND WAS 1.25%. (7) PRIOR TO FEBRUARY 1, 2007, THE MAXIMUM EXPENSE CAP FOR THE FUND WAS 1.20%. PRIOR TO DECEMBER 1, 2005, THE MAXIMUM EXPENSE CAP FOR THE FUND WAS 1.45%. (8) TURNER INVESTMENT PARTNERS, INC. HAS CONTRACTUALLY AGREED TO WAIVE FUND EXPENSES TO KEEP THE NET TOTAL OPERATING EXPENSES FOR THE CORE GROWTH FUND, EMERGING GROWTH FUND, INTERNATIONAL CORE GROWTH FUND, LARGE CAP GROWTH FUND, MIDCAP GROWTH FUND, QUANTITATIVE LARGE CAP VALUE FUND, AND THE SMALL CAP GROWTH FUND FROM EXCEEDING 0.69%, 1.40%, 1.10%, 0.69%, 1.18%, 0.69%, AND 1.25%, RESPECTIVELY, THROUGH JANUARY 31, 2009. TURNER INVESTMENT MANAGEMENT LLC HAS CONTRACTUALLY AGREED TO WAIVE FUND EXPENSES TO KEEP THE NET TOTAL OPERATING EXPENSES FOR THE MIDCAP EQUITY FUND AND THE SMALL CAP EQUITY FUND FROM EXCEEDING 0.90% AND 1.45%, RESPECTIVELY, THROUGH JANUARY 31, 2009. (9) PRIOR TO FEBRUARY 1, 2008, THE ADVISORY FEE FOR THE FUND WAS 0.75%. For the remaining Funds, 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 all Funds) 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) 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 ANNUAL OTHER ADVISORY ADJUSTMENT BENCHMARK EXPENSES FEE RATE THRESHOLD(1) 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 FUND'S PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION FOR MORE INFORMATION REGARDING THE FUNDS' PERFORMANCE BENCHMARK. During the six months ended March 31, 2008, the Funds' advisory fees, before waivers, were adjusted in accordance with the policy described above:
NET BASE ADVISER ADVISER PERFORMANCE FEE BEFORE FEE ADJUSTMENT WAIVERS --------- ----------- ----------- Concentrated Growth Fund $ 314,773 $ 84,037 $ 398,810 New Enterprise Fund 451,759 78,114 529,873
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. 7. INVESTMENT TRANSACTIONS: The cost of security purchases and the proceeds from security sales, other than short-term investments, for the six months ended March 31, 2008 were as follows (000):
PURCHASES SALES (000) (000) ---------- ---------- Concentrated Growth Fund $ 102,044 $ 115,020 Core Growth Fund 925,646 518,435 Emerging Growth Fund 166,795 184,354 International Core Growth Fund 6,882 4,535 Large Cap Growth Fund 49,380 42,474 Midcap Equity Fund 524 408 Midcap Growth Fund 1,066,422 989,035 New Enterprise Fund 143,765 124,585 Quantitative Large Cap Value Fund 994 889 Small Cap Equity Fund 38,080 53,254 Small Cap Growth Fund 205,742 215,505
TURNER FUNDS 2008 SEMIANNUAL REPORT | 53 NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 8. 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 and net operating losses. 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. The tax character of dividends and distributions declared during the years ended September 30, 2007 and September 30, 2006 were as follows (000):
ORDINARY LONG-TERM INCOME CAPITAL GAIN TOTAL -------- ------------ -------- Core Growth Fund 2007 $ 496 $ -- $ 496 2006 163 -- 163 Emerging Growth Fund 2007 $ -- $ 50,964 $ 50,964 2006 8,774 20,741 29,515 Large Cap Growth Fund 2007 $ 66 $ -- $ 66 2006 109 -- 109 Quantitative Large Cap Value Fund 2007 $ 21 $ -- $ 21 2006* 2 -- 2 Small Cap Equity Fund 2007 $ 128 $ 5,573 $ 5,701 2006 -- -- --
* PERIOD FROM INCEPTION OCTOBER 10, 2005 THROUGH SEPTEMBER 30, 2006. As of September 30, 2007, the components of distributable earnings (accumulated losses) on a tax basis were as follows (000):
TOTAL DISTRIBUTABLE UNDISTRIBUTED UNDISTRIBUTED CAPITAL POST- OTHER EARNINGS ORDINARY LONG-TERM LOSS OCTOBER UNREALIZED TEMPORARY (ACCUMULATED INCOME CAPITAL GAIN CARRYFORWARD LOSSES APPRECIATION DIFFERENCES LOSSES) ------------- ------------- ------------ ------- ------------ ----------- ------------- Concentrated Growth Fund $ -- $ -- $(148,814) $ -- $ 8,890 $ 6 $ (139,918) Core Growth Fund 530 -- (2,605) (1,111) 47,589 -- 44,403 Emerging Growth Fund 2,911 67,356 -- -- 179,208 481 249,956 International Core Growth Fund 4 -- -- (31) 401 -- 374 Large Cap Growth Fund 41 -- (15,534) -- 6,553 1 (8,939) Midcap Equity Fund -- -- -- (19) 24 -- 5 Midcap Growth Fund -- -- (284,254) -- 343,070 202 59,018 New Enterprise Fund -- -- (9,902) -- 10,040 27 165 Quantitative Large Cap Value Fund 46 40 -- -- 74 -- 160 Small Cap Equity Fund 3,122 5,838 -- -- 5,096 13 14,069 Small Cap Growth Fund -- -- (53,609) -- 53,282 343 16
Post-October losses represent losses realized on investment transactions from November 1, 2006 through September 30, 2007 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. 54 | TURNER FUNDS 2008 SEMIANNUAL REPORT (Unaudited) - -------------------------------------------------------------------------------- At September 30, 2007, the Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates (000):
EXPIRING SEPTEMBER 30, ------------------------------------------------------------------- 2009 2010 2011 2013 2014 2015 TOTAL ------- --------- --------- ----- ------ ----- --------- Concentrated Growth Fund $ 3,435 $ 132,529 $ 12,850 $ -- $ -- $ -- $ 148,814 Core Growth Fund -- -- 1,578 -- 200 827 2,605 Large Cap Growth Fund -- 396 15,138 -- -- -- 15,534 Midcap Growth Fund -- 154,754 129,500 -- -- -- 284,254 New Enterprise Fund -- 9,269 386 247 -- -- 9,902 Small Cap Growth Fund -- 27,615 25,994 -- -- -- 53,609
During the year ended September 30, 2007, the Concentrated Growth Fund, Large Cap Growth Fund, Midcap Growth Fund, New Enterprise Fund, and the Small Cap Growth Fund utilized capital loss carryforwards of $7,618,820, $718,537, $132,793,380, $2,181,351, $38,612,061 respectively, to offset capital gains. At March 31, 2008, the total cost of securities for Federal income tax purposes and the aggregate gross unrealized appreciation and depreciation for the securities held by the Funds were as follows (000):
NET FEDERAL UNREALIZED TAX UNREALIZED UNREALIZED APPRECIATION FUND COST APPRECIATION DEPRECIATION (DEPRECIATION) - ---- ----------- ------------ ------------ -------------- Concentrated Growth Fund $ 34,644 $ 3,473 $ (1,333) $ 2,140 Core Growth Fund 601,893 41,696 (24,304) 17,392 Emerging Growth Fund 498,971 142,114 (30,845) 111,269 International Core Growth Fund 4,340 384 (161) 223 Large Cap Growth Fund 36,166 3,692 (1,224) 2,468 Midcap Equity Fund 582 29 (31) (2) Midcap Growth Fund 1,159,484 219,120 (43,148) 175,972 New Enterprise Fund 58,780 4,636 (2,759) 1,877 Quantitative Large Cap Value Fund 854 42 (44) (2) Small Cap Equity Fund 46,187 3,017 (1,784) 1,233 Small Cap Growth Fund 267,330 39,093 (10,305) 28,788
9. 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. 10. 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 pursuant to the terms of the Lending Agreement in the BlackRock TempCash Fund, Institutional Shares, a pooled investment 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. 11. NEW ACCOUNTING PRONOUNCEMENTS: In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB interpretation 48 ("FIN 48"), "Accounting for Uncertainty in Income Taxes." This standard defines the threshold for recognizing the benefits of tax-return positions in the financial statements as "more-likely-than-not" to be sustained by the taxing authority and requires measurement of a tax position meeting the more-likely-than-not criterion, based on the largest benefit that is more than 50 percent likely to TURNER FUNDS 2008 SEMIANNUAL REPORT | 55 NOTES TO FINANCIAL STATEMENTS (Unaudited) - -------------------------------------------------------------------------------- be realized. FIN 48 is effective as of the beginning of the first fiscal year beginning after December 15, 2006. At adoption, companies must adjust their financial statements to reflect only those tax positions that are more-likely-than-not to be sustained as of the adoption date. Based on its analysis, management has determined that the adoption of FIN 48 will not have a material impact to the Funds' financial statements upon adoption. The International Core Growth Fund and the Midcap Equity Fund adopted FIN 48 and management has determined that the adoption of FIN 48 did not have a material impact to the financial statements of the International Core Growth Fund and the Midcap Equity Fund, respectively. However, management's conclusions regarding FIN 48 may be subject to review and adjustment at a later date based on factors including, but not limited to, further implementation guidance expected from the FASB, and on-going analyses of and changes to tax laws, regulations and interpretations thereof. In September 2006, the FASB issued Statement on Financial Accounting Standards ("SFAS") No. 157, "Fair Value Measurements." This standard establishes a single authoritative definition of fair value, sets out a framework for measuring fair value and requires additional disclosures about fair value measurements. SFAS No. 157 applies to fair value measurements already required or permitted by existing standards. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. The changes to current generally accepted accounting principles from the application of this Statement relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurements. As of March 31, 2008 the Funds do not believe the adoption of SFAS No. 157 will impact the financial statement amounts, however, additional disclosures may be required about the inputs used to develop the measurements and the effect of certain of the measurements on changes in net assets for the period. 56 | TURNER FUNDS 2008 SEMIANNUAL REPORT BOARD OF TRUSTEES CONSIDERATIONS IN APPROVING THE ADVISORY AGREEMENTS (Unaudited) - -------------------------------------------------------------------------------- BOARD OF TRUSTEES CONSIDERATIONS IN APPROVING THE ADVISORY AGREEMENTS On February 21, 2008, the Board of Trustees (the "Board" or "Trustees") of the Turner Funds (the "Funds" or "Trust") held a meeting to decide whether to renew the advisory agreements (the "Advisory Agreements") with Turner Investment Partners, Inc. and Turner Investment Management LLC (collectively, the "Adviser") for the upcoming year (and whether to approve the Advisory Agreement with respect to two new Funds). In preparation for the meeting, the Board requested and reviewed a wide variety of information from the Adviser. The information described, among other things: the Adviser's business; its organizational structure and personnel; the Funds' performance; and advisory fees and expenses paid by the Funds for the fiscal year ended September 30, 2007. At the meeting, representatives of the Adviser discussed, and answered Board members' questions about, among other things, a chart of advisory fees received by the Adviser for the various Funds; a schedule of the commissions paid to the Trust's top 10 brokers; a soft dollar commission usage report for the fiscal year ended September 30, 2007; the Adviser's Form ADVs; and an Adviser profitability report for the fiscal year ended September 30, 2007. The Board, including all of the independent Trustees, considered, among other things: (1) the nature, extent and quality of the services provided by the Adviser; (2) the performance of the Funds over the past one, three and five years versus each Fund's respective peer group; (3) the contractual and actual compensation to be paid under the agreements as compared to the compensation paid to relevant Morningstar peer groups (except with respect to the new Funds, where the peer groups were selected by the Adviser); (4) the expense ratios of the Funds, with expense waivers, as compared to expense ratios for relevant Morningstar peer groups (or selected peer groups with respect to the new Funds); (5) the qualifications of the Adviser's personnel, portfolio management capabilities and investment methodologies; (6) the Adviser's operations, compliance program and policies; (7) the financial condition of the Adviser; (8) the cost of services to be provided by the Adviser and the Adviser's profitability from each Fund for the year ended September 30, 2007; (9) "fall-out" benefits to the Adviser and its affiliates from the relationship with the Funds; and (10) the extent to which economies of scale are relevant given the Funds' current asset size and current asset growth potential. The independent Trustees, in executive session, reached the following conclusions, among others, regarding the Adviser and the Advisory Agreements: the performance of the Funds was generally competitive (in most cases performance was higher than the median); the advisory fees were generally competitive (in most cases they were above the median); and the gross and net total expense ratios of the Funds were generally competitive. The independent Trustees also concluded that: they were satisfied with the quality of services provided by the Adviser in advising the Funds; the profits earned by the Adviser seemed reasonable in light of the nature, extent and quality of the services provided to each Fund; and that each Fund was not large enough to attain significant economies of scale. With respect to the new Funds, the Trustees considered the viability of the proposed strategies, the Adviser's experience, qualifications and track record in managing those strategies in limited partnership vehicles and the length of that record as well as the quality of that performance. The Trustees also considered the proposed fees for the new Funds, as compared to those of their competitors, including both the net and total expense ratios. They discussed the need for establishment of prime brokerage arrangements for the new Turner Core Growth 130/30 Fund with the Funds' service providers and considered the Adviser's experience in handling similar prime brokerage arrangements with respect to the limited partnerships, as well as the assurances they received that, although not technically required, the Funds' CCO would periodically review these arrangements. Based on the Board's deliberations and its evaluation of the information described above, the Trustees, including all of the independent Trustees, unanimously: (a) agreed to renew the Advisory Agreements for another year (and approve the Advisory Agreement with respect to two new Funds) and (b) determined that the compensation payable by the Trust's Funds under the Advisory Agreements is fair and reasonable. TURNER FUNDS 2008 SEMIANNUAL REPORT | 57 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 illustrates your Fund's costs in two ways: o 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." o 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 ENDING EXPENSES ACCOUNT ACCOUNT ANNUALIZED PAID VALUE VALUE EXPENSE DURING 10/1/07 3/31/08 RATIOS PERIOD* - --------------------------------------------------------------------------------------------------------------------------------- Turner Concentrated Growth Fund -- Investor Class Shares - --------------------------------------------------------------------------------------------------------------------------------- Actual Fund Return $ 1,000.00 $ 822.10 1.65% $ 7.52 Hypothetical 5% Return 1,000.00 1,016.75 1.65 8.32 - --------------------------------------------------------------------------------------------------------------------------------- Turner Core Growth Fund -- Institutional Class Shares - --------------------------------------------------------------------------------------------------------------------------------- Actual Fund Return 1,000.00 875.10 0.69 3.23 Hypothetical 5% Return 1,000.00 1,021.55 0.69 3.49 - --------------------------------------------------------------------------------------------------------------------------------- Turner Core Growth Fund -- Investor Class Shares - --------------------------------------------------------------------------------------------------------------------------------- Actual Fund Return 1,000.00 874.00 0.94 4.40 Hypothetical 5% Return 1,000.00 1,020.30 0.94 4.75 - --------------------------------------------------------------------------------------------------------------------------------- Turner Emerging Growth Fund -- Investor Class Shares - --------------------------------------------------------------------------------------------------------------------------------- Actual Fund Return 1,000.00 888.00 1.40 6.61 Hypothetical 5% Return 1,000.00 1,018.00 1.40 7.06 - --------------------------------------------------------------------------------------------------------------------------------- Turner International Core Growth Fund -- Institutional Class Shares - --------------------------------------------------------------------------------------------------------------------------------- Actual Fund Return 1,000.00 937.70 1.10 5.33 Hypothetical 5% Return 1,000.00 1,019.50 1.10 5.55 - --------------------------------------------------------------------------------------------------------------------------------- Turner Large Cap Growth Fund -- Institutional Class Shares - --------------------------------------------------------------------------------------------------------------------------------- Actual Fund Return 1,000.00 846.80 0.69 3.19 Hypothetical 5% Return 1,000.00 1,021.55 0.69 3.49 - --------------------------------------------------------------------------------------------------------------------------------- Turner Large Cap Growth Fund -- Investor Class Shares - --------------------------------------------------------------------------------------------------------------------------------- Actual Fund Return 1,000.00 844.70 0.94 4.34 Hypothetical 5% Return 1,000.00 1,020.30 0.94 4.75 - --------------------------------------------------------------------------------------------------------------------------------- Turner Midcap Equity Fund -- Institutional Class Shares - --------------------------------------------------------------------------------------------------------------------------------- Actual Fund Return 1,000.00 860.50 0.90 4.19 Hypothetical 5% Return 1,000.00 1,020.50 0.90 4.55 - --------------------------------------------------------------------------------------------------------------------------------- BEGINNING ENDING EXPENSES ACCOUNT ACCOUNT ANNUALIZED PAID VALUE VALUE EXPENSE DURING 10/1/07 3/31/08 RATIOS PERIOD* - --------------------------------------------------------------------------------------------------------------------------------- Turner Midcap Equity Fund -- Investor Class Shares - --------------------------------------------------------------------------------------------------------------------------------- Actual Fund Return $ 1,000.00 $ 857.70 1.15% $ 5.34 Hypothetical 5% Return 1,000.00 1,019.25 1.15 5.81 - --------------------------------------------------------------------------------------------------------------------------------- Turner Midcap Growth Fund -- Investor Class Shares - --------------------------------------------------------------------------------------------------------------------------------- Actual Fund Return 1,000.00 883.50 1.18 5.56 Hypothetical 5% Return 1,000.00 1,019.10 1.18 5.96 - --------------------------------------------------------------------------------------------------------------------------------- Turner Midcap Growth Fund -- Retirement Class Shares - --------------------------------------------------------------------------------------------------------------------------------- Actual Fund Return 1,000.00 882.60 1.43 6.73 Hypothetical 5% Return 1,000.00 1,017.85 1.43 7.21 - --------------------------------------------------------------------------------------------------------------------------------- Turner New Enterprise Fund -- Investor Class Shares - --------------------------------------------------------------------------------------------------------------------------------- Actual Fund Return 1,000.00 821.10 1.54 7.01 Hypothetical 5% Return 1,000.00 1,017.30 1.54 7.77 - --------------------------------------------------------------------------------------------------------------------------------- Turner Quantitative Large Cap Value Fund -- Institutional Class Shares - --------------------------------------------------------------------------------------------------------------------------------- Actual Fund Return 1,000.00 910.30 0.69 3.30 Hypothetical 5% Return 1,000.00 1,021.55 0.69 3.49 - --------------------------------------------------------------------------------------------------------------------------------- Turner Small Cap Equity Fund -- Investor Class Shares - --------------------------------------------------------------------------------------------------------------------------------- Actual Fund Return 1,000.00 860.30 1.45 6.74 Hypothetical 5% Return 1,000.00 1,017.75 1.45 7.31 - --------------------------------------------------------------------------------------------------------------------------------- Turner Small Cap Growth Fund -- Investor Class Shares - --------------------------------------------------------------------------------------------------------------------------------- Actual Fund Return 1,000.00 851.40 1.25 5.79 Hypothetical 5% Return 1,000.00 1,018.75 1.25 6.31 - ---------------------------------------------------------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized expense ratio multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period from 10/1/07 - 3/31/08) 58 | TURNER FUNDS 2008 SEMIANNUAL REPORT THIS PAGE WAS INTENTIONALLY LEFT BLANK TURNER FUNDS 2008 SEMIANNUAL REPORT | 59 - -------------------------------------------------------------------------------- TURNER FUNDS TURNER FUNDS' TRUSTEES ALFRED C. SALVATO Treasurer Thomas Jefferson University Health Care Pension Fund JANET F. SANSONE Chief Management Officer Office of The Public Printer of the United States ROBERT E. TURNER Chairman and Chief Investment Officer Turner Investment Partners, Inc. DR. JOHN T. WHOLIHAN Professor and Dean Emeritus, College of Business Loyola Marymount University INVESTMENT ADVISERS TURNER INVESTMENT PARTNERS, INC. TURNER INVESTMENT MANAGEMENT LLC Berwyn, Pennsylvania DISTRIBUTOR SEI INVESTMENTS DISTRIBUTION COMPANY Oaks, Pennsylvania 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 and Midcap 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 and (ii) on the Commission's website at http://www.sec.gov. 60 | TURNER FUNDS 2008 SEMIANNUAL REPORT [TURNER FUNDS LOGO] - -------------------------------------------------------------------------------- TURNER FUNDS P.O. Box 219805 Kansas City, MO 64121-9805 Telephone: 1-800-224-6312 Email: mutualfunds@turnerinvestments.com Web Site:www.turnerinvestments.com TUR-SA-002-0502 ITEM 2. CODE OF ETHICS. Not applicable for semi-annual report. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable for semi-annual report. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable for semi-annual report. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. 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 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) 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 Investment Company Act of 1940 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 Investment Company Act of 1940) 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) Not applicable for semi-annual report. (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: June 6, 2008 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: June 6, 2008 By (Signature and Title) /s/ Michael Lawson -------------------------------------------- Michael Lawson, Controller and CFO Date: June 6, 2008 EX-99.CERT 2 ex-cert.txt CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Thomas R. Trala, Jr., certify that: 1. I have reviewed this report on Form N-CSR of the Turner Funds; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: June 6, 2008 /s/ Thomas R. Trala, Jr. - ----------------------------- Thomas R. Trala, Jr. President CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Michael Lawson, certify that: 1. I have reviewed this report on Form N-CSR of the Turner Funds; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: June 6, 2008 /s/ Michael Lawson - ----------------------------- Michael Lawson Controller and CFO EX-99.906CERT 3 ex-906.txt CERTIFICATION Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 The undersigned, the President and Chief Executive Officer of the Turner Funds (the "Fund"), with respect to the Fund's Form N-CSR for the period ended March 31, 2008 as filed with the Securities and Exchange Commission, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge: 1. such Form N-CSR fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. the information contained in such Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Fund. Dated: June 6, 2008 /s/ Thomas R. Trala, Jr. ----------------------------- Thomas R. Trala, Jr. President CERTIFICATION Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 The undersigned, the Controller and Chief Financial Officer of the Turner Funds (the "Fund"), with respect to the Fund's Form N-CSR for the period ended March 31, 2008 as filed with the Securities and Exchange Commission, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge: 1. such Form N-CSR fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. the information contained in such Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Fund. Dated: June 6, 2008 /s/ Michael Lawson ----------------------------- Michael Lawson Controller and CFO -----END PRIVACY-ENHANCED MESSAGE-----