-----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, MHifao7MsO6liWK5lESZADLeN1soT2IkkvZpRGJIBDsNFwksqas6deo5w8kJrLEK M5KjRg3VjJCoXTBfmuqgJQ== 0000909012-05-000373.txt : 20050509 0000909012-05-000373.hdr.sgml : 20050509 20050509164437 ACCESSION NUMBER: 0000909012-05-000373 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20050228 FILED AS OF DATE: 20050509 DATE AS OF CHANGE: 20050509 EFFECTIVENESS DATE: 20050509 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PURISIMA FUNDS CENTRAL INDEX KEY: 0001019946 IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-07737 FILM NUMBER: 05812338 BUSINESS ADDRESS: STREET 1: C/O FISHER INVESTMENTS STREET 2: 13100 SKYLINE BLVD CITY: WOODSIDE STATE: CA ZIP: 94062 BUSINESS PHONE: 8088410199 MAIL ADDRESS: STREET 1: C/O FISHER INVESTMENTS STREET 2: 13100 SKYLINE BLVD CITY: WOODSIDE STATE: CA ZIP: 94062 N-CSRS 1 t301783.txt 2/28/05 As filed with the Securities and Exchange Commission on [date] 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 811-07737 THE PURISIMA FUNDS (Exact name of registrant as specified in charter) 13100 SKYLINE BLVD. WOODSIDE, CALIFORNIA 94062 (Address of principal executive offices) (Zip code) U.S. BANCORP FUND SERVICES, LLC 2020 EAST FINANCIAL WAY, SUITE 100 GLENDORA, CA 91741 (Name and address of agent for service) (650) 851-3334 Registrant's telephone number, including area code Date of fiscal year end: AUGUST 31, 2005 Date of reporting period: FEBRUARY 28, 2005 ITEM 1. REPORT TO STOCKHOLDERS. Semi-Annual report February 28, 2005. - -------------------------------------------------------------------------------- THE PURISIMA FUNDS - -------------------------------------------------------------------------------- SEMI-ANNUAL REPORT (UNAUDITED) FEBRUARY 28, 2005 The Purisima Total Return Fund The Purisima Pure American Fund The Purisima Pure Foreign Fund - -------------------------------------------------------------------------------- TABLE OF CONTENTS A Letter to Our Shareholders 2 Sector Breakdown 6 Expense Example 7 Schedule of Investments Total Return Fund 9 Pure American Fund 13 Pure Foreign Fund 17 Statements of Assets and Liabilities 21 Statements of Operations 22 Statement of Changes in Net Assets Total Return Fund 23 Pure American Fund 24 Pure Foreign Fund 25 Financial Highlights Total Return Fund 26 Pure American Fund 27 Pure Foreign Fund 28 Notes to Financial Statements 29 Other Information 36 Privacy Notice 40 - -------------------------------------------------------------------------------- INVESTMENT OBJECTIVES PURISIMA TOTAL RETURN FUND Seeks to provide investors with a high level of total return by considering both domestic and foreign securities. PURISIMA PURE AMERICAN FUND Seeks to provide investors with a high level of total return, while concentrating its holdings in U.S. securities. PURISIMA PURE FOREIGN FUND Seeks to provide investors with a high level of total return, while concentrating its holdings in securities outside the U.S. EACH FUND RESERVES THE RIGHT TO REJECT ANY ORDER FOR THE PURCHASE OF ITS SHARES OR TO LIMIT OR SUSPEND, WITHOUT PRIOR NOTICE, THE OFFERING OF ITS SHARES. THE REQUIRED MINIMUM INVESTMENTS MAY BE WAIVED IN THE CASE OF CERTAIN QUALIFIED RETIREMENT PLANS. THE FUNDS WILL NOT ACCEPT YOUR ACCOUNT IF YOU ARE INVESTING FOR ANOTHER PERSON AS ATTORNEY-IN-FACT. THE FUNDS ALSO WILL NOT ACCEPT ACCOUNTS WITH A "POWER OF ATTORNEY" IN THE REGISTRATION SECTION OF THE PURCHASE APPLICATION. 1 - -------------------------------------------------------------------------------- A LETTER TO OUR SHAREHOLDERS We are pleased to bring you the semi-annual report for the Purisima Funds for the six-month period ended February 28, 2005. MARKET REVIEW AND OUTLOOK: Global equity markets appreciated significantly during the period, ending what had been a docile 2004 before a fourth quarter rally began. Investors appeared to be waiting out the uncertainty of the US Presidential elections but responded positively once the result was known. Continued economic growth provided a strong backdrop. Each of the Funds remained fully invested in equities during the period, benefiting from our bullish posture. Prior to the last period, we had anticipated significant gains in the major developed equity markets. This forecast was based largely on beliefs that GDP growth and corporate earnings would exceed expectations, interest rates would remain benign, the outcome of the Presidential election would not be debated, the dollar would rise, and that geopolitical/terrorism concerns would ease. These proved mostly correct. For the six months, foreign markets rose over 20% in dollar terms (as measured by the Morgan Stanley EAFE index (the benchmark for the Pure Foreign Fund)), while domestically the S&P 500 (the benchmark for the Pure American Fund) gained just about 10%. Most of these gains occurred in the fourth quarter of 2004. Growth in economic activity and a boost to consumer confidence allowed economically sensitive industries in general to lead during the period, although technology shares lagged as negative sentiment continued to surround the sector. Energy and materials were the top performers. Each of the Funds benefited from high exposure to cyclical industries but also suffered from the poor relative performance in information technology, where they were each overweight. Small caps again outperformed large caps in the US and in most other major markets. A rally in the euro relative to the dollar late in 2004 helped foreign markets to outperform the US in dollar terms. The yen and British pound also appreciated relative to the dollar, but to a lesser extent. Regionally, within the developed foreign markets, continental Europe showed the most strength during the period, followed by Japan, while the UK posted slightly smaller gains. Strong economic growth in Europe remains elusive, but companies there are finding ways to increase profits, and pro-business reforms continue to progress. In the Funds with global exposure, our foreign regional weightings added value relative to their respective benchmarks, though this was offset in the Total Return Fund because of an overweight to the US, which lagged. Our outlook for the immediate future remains bullish. We expect strong returns for the remainder of 2005 for both the US and global markets. In contrast to last year, we expect increased volatility, however. 2 - -------------------------------------------------------------------------------- This forecast is consistent with historical precedent. First years of President's terms have typically been either negative or very positive - middle ground is rare - and more pronounced for reelected presidents. If stocks rise, we anticipate they will rise big. We are very bullish primarily because we believe: o Stocks are undervalued relative to bonds (based on expected earnings yields compared to interest rates) o Sentiment is guarded o Earnings expectations are ripe for upside surprise o Exceptionally strong corporate balance sheets provide significant optimization opportunities through re-leveraging o Monetary and fiscal conditions globally are conducive to rapid economic growth Stocks today are exceptionally attractive in our estimation compared to fixed income securities and cash. Earnings yields on major global stock indices are generally above comparable long term bond yields, an unusual but highly bullish condition. It is hard to find an outright screaming bull. Judging by our surveying efforts, professional forecasters agree that 2005 stock market returns should be boring at best -most likely delivering middling single-digit returns. In our view, this guarded sentiment presents an excellent opportunity for above average gains as strong corporate and economic conditions are realized. One near-universal misperception, we think, is that corporate earnings will decelerate dramatically. Forecasters generally believe profit margins can't expand and earnings growth will be limited to revenue growth. We see further productivity gains and resilient top line expansion, enabling earnings to surpass relatively modest consensus expectations. Corporate re-leveraging should also contribute to sizable stock gains. Overall, company balance sheets are perhaps healthier than they have been in the last century. Firms have the flexibility to redeploy cash and exercise unused borrowing capacity to optimize their capital structures and improve returns on invested capital. Methods will include buying back stock, paying higher dividends, and pursuing acquisitions - all bullish moves. Economic growth globally should continue responding to the huge amount of fiscal and monetary stimulus remaining in force. The US government, for instance, has been re-leveraging in the last several years, as evidenced by its big budget deficits. Contrary to popular belief, periods following extreme federal budget deficits have been above average for stock returns. While short-term interest rates may increase, longer term bond yields should stay near current levels over the coming months, a bullish surprise. We believe inflation pressures are more contained than consensus expectations and will remain so as the Fed tightens appropriately as expected. 3 - -------------------------------------------------------------------------------- FUND POSITIONING In the Total Return Fund, we are retaining an overweight to the US equity market relative to the MSCI World Index. The three year streak of foreign dominance should soon end, especially if the US dollar rebounds. The US economy is better positioned than most other major regions to lead in terms of economic growth immediately ahead, which will support corporate earnings growth. In both the Total Return Fund and the Pure Foreign Fund, continental European and Japanese stocks continue to also be favored. The UK and Australia are facing more of an inflation headwind and are underweighted. Stylistically, the Funds feature a value oriented tilt relative to their benchmarks. To the extent global yield curves flatten and the dollar strengthens, we anticipate rotating toward larger and more growth-oriented stocks. Already, each of the Funds is overweight economically sensitive sectors such as Information Technology and Energy. Financials is the largest sector in each of the Funds' respective benchmarks and will likely play a large role in determining returns in the coming year. We ended the period overweight based on our views that the world economy should exceed growth expectations, yield curves generally remain steep, and long-term interest rates should stay relatively low. Each of these suggests a good environment for financials stocks. However, we also suspect that yield curves will flatten over the coming months and quarters. In this scenario, we are likely to decrease our financials weight, especially for yield curve sensitive categories such as commercial banks. As the year progresses, we expect to make certain other style, sector, and country shifts reflective of the evolution of the market cycle. CLOSING REMARKS For the period, the Funds all participated in a strong move upwards after more flattish returns during the first three quarters of 2004. The posture of the portfolio compositions remain largely unchanged. While our stylistic allocations had mixed results during the period, for now the major themes in place from last period are still of consequence. Sectors leveraged to continued economic growth should witness relatively higher returns. Our holdings in these areas are companies with strong operating results but are also frequently selected for demonstrating an ability to gain more than their peer group in a rising market environment. 4 - -------------------------------------------------------------------------------- We are excited for what we believe should be another rewarding, albeit bumpier, period for equity investors. Each of the Funds is positioned to benefit from a strong market environment. We believe each will appreciate beyond its respective benchmark if our market outlook proves correct. Thank you for your continued interest and support. Sincerely, Kenneth L. Fisher Chairman and Chief Investment Officer Fisher Investments OPINIONS EXPRESSED ABOVE ARE THOSE OF KENNETH L. FISHER AND ARE SUBJECT TO CHANGE, ARE NOT GUARANTEED AND SHOULD NOT BE CONSIDERED RECOMMENDATIONS TO BUY OR SELL ANY SECURITY. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. FUND HOLDINGS AND SECTOR ALLOCATIONS ARE SUBJECT TO CHANGE AND ARE NOT RECOMMENDATIONS TO BUY OR SELL ANY SECURITY. THE MSCI WORLD INDEX IS A BROAD-BASED UNMANAGED CAPITALIZATION-WEIGHTED STOCK INDEX DESIGNED TO MEASURE GLOBAL DEVELOPED MARKET EQUITY PERFORMANCE. IT CONSISTS OF 23 DEVELOPED MARKET COUNTRY INDICES. THE S&P 500 INDEX IS A BROAD-BASED UNMANAGED INDEX OF 500 STOCKS, WHICH IS WIDELY RECOGNIZED AS REPRESENTATIVE OF THE EQUITY MARKET IN GENERAL. THE MSCI EAFE INDEX CONSISTS OF THE MORGAN STANLEY WORLD INDEX COMPONENTS WITHOUT THE UNITED STATES AND CANADA. ONE CANNOT INVEST DIRECTLY IN AN INDEX. MUTUAL FUND INVESTING INVOLVES RISK OF LOSS. PRINCIPAL LOSS IS POSSIBLE. FOREIGN INVESTING INVOLVES SPECIAL RISKS, INCLUDING A GREATER VOLATILITY AND POLITICAL, ECONOMIC AND CURRENCY RISKS AND DIFFERENCES IN ACCOUNTING METHODS. SMALL- AND MEDIUM-CAPITALIZATION COMPANIES TEND TO HAVE LIMITED LIQUIDITY AND GREATER PRICE VOLATILITY THAN LARGE-CAPITALIZATION COMPANIES. GROWTH STOCKS TYPICALLY ARE MORE VOLATILE THAN VALUE STOCKS; HOWEVER, VALUE STOCKS HAVE A LOWER EXPECTED GROWTH RATE IN EARNINGS AND SALES. THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY A PROSPECTUS. PLEASE READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY. QUASAR DISTRIBUTORS, LLC, DISTRIBUTOR 04/05 PRIVACY NOTICE LISTED ON PAGE 40 5 - -------------------------------------------------------------------------------- SECTOR BREAKDOWN(1) PURISIMA TOTAL RETURN FUND - -------------------------------------------------------------------------------- Basic Materials 2.6% Communications 6.3% Consumer, Cyclical 10.0% Consumer, Non-cyclical 10.9% Energy 12.4% Financial 28.3% Industrial 14.1% Technology 11.7% Utilities 3.3% Short-Term Investment 0.4% - -------------------------------------------------------------------------------- PURISIMA PURE AMERICAN FUND - -------------------------------------------------------------------------------- Basic Materials 3.2% Communications 6.1% Consumer, Cyclical 12.2% Consumer, Non-cyclical 12.8% Energy 13.8% Financial 24.4% Industrial 11.6% Technology 14.1% Utilities 1.5% Short-Term Investment 0.3% - -------------------------------------------------------------------------------- PURISIMA PURE FOREIGN FUND - -------------------------------------------------------------------------------- Basic Materials 7.6% Communications 6.6% Consumer, Cyclical 13.9% Consumer, Non-cyclical 8.8% Energy 13.8% Financial 30.7% Industrial 10.6% Technology 5.0% Utilities 3.0% - -------------------------------------------------------------------------------- - ----------- (1) % of Total Investments as of February 28, 2005. 6 - -------------------------------------------------------------------------------- IMPORTANT INFORMATION The following disclosure provides important information regarding the Funds' Expense Example. Please refer to this information when reviewing the Expense Example for the Funds. EXPENSE EXAMPLE As a shareholder of the Funds, you incur two types of costs: (1) transaction costs, including exchange fees; and (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees (Total Return Fund only); and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period indicated and held for the entire period from September 1, 2004 to February 28, 2005. ACTUAL EXPENSES The information in the table under the heading "Actual Performance" provides information about actual account values and actual expenses. You may use the information in these columns together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the row entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The information in the table under the heading "Hypothetical Performance (5% return before expenses)" provides information about hypothetical account values and hypothetical expenses based on the Funds' actual expense ratios and assumed rates of return of 5% per year before expenses, which are not the Funds' actual returns. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the information under the heading "Hypothetical Performance (5% return before expenses)" is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. 7 - -------------------------------------------------------------------------------- PURISIMA TOTAL RETURN FUND ACTUAL HYPOTHETICAL PERFORMANCE PERFORMANCE (5% RETURN BEFORE EXPENSES) - -------------------------------------------------------------------------------- Beginning Account Value (09/01/04) $ 1,000 $ 1,000 Ending Account Value (02/28/05) $ 1,131 $ 1,017 Expenses Paid During Period(1) $ 7.92 $ 7.50 - -------------------------------------------------------------------------------- PURISIMA PURE AMERICAN FUND ACTUAL HYPOTHETICAL PERFORMANCE PERFORMANCE (5% RETURN BEFORE EXPENSES) - -------------------------------------------------------------------------------- Beginning Account Value (09/01/04) $ 1,000 $ 1,000 Ending Account Value (02/28/05) $ 1,116 $ 1,017 Expenses Paid During Period(1) $ 7.87 $ 7.50 - -------------------------------------------------------------------------------- PURISIMA PURE FOREIGN FUND ACTUAL HYPOTHETICAL PERFORMANCE PERFORMANCE (5% RETURN BEFORE EXPENSES) - -------------------------------------------------------------------------------- Beginning Account Value (09/01/04) $ 1,000 $ 1,000 Ending Account Value (02/28/05) $ 1,200 $ 1,017 Expenses Paid During Period(1) $ 8.18 $ 7.50 - -------------------------------------------------------------------------------- - ------- (1) Expenses are equal to the Fund's annualized expense ratio of 1.50% multiplied by the average account value over the period, multiplied by 181 days in most recent fiscal half-year /365 (to reflect the one-half year period). 8 - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS PURISIMA TOTAL RETURN FUND FEBRUARY 28, 2005 (UNAUDITED) SHARES VALUE - -------------------------------------------------------------------------------- COMMON STOCKS: 99.6% AEROSPACE/DEFENSE EQUIPMENT: 2.4% 49,600 Lockheed Martin Corp. $ 2,937,312 50,500 United Technologies Corp. 5,043,940 ------------ 7,981,252 ------------ AIRLINES: 0.6% 134,500 Japan Airlines Corp. - ADR* 2,031,327 ------------ AUTOMOTIVE: 2.2% 38,100 Fuji Heavy Industries Ltd. - ADR 1,782,882 246,000 Nissan Motor Co. Ltd. - ADR 5,271,780 ------------ 7,054,662 ------------ BANKING: 15.8% 437,100 Banco Santander Central - ADR 5,376,330 100,700 Barclays Plc - ADR 4,425,765 39,500 Comerica, Inc. 2,254,660 158,500 Credit Suisse Group - ADR 6,894,750 52,000 HSBC Holdings Plc - ADR 4,341,480 425,600 Mitsubishi Tokyo Finance - ADR 3,902,752 52,275 National City Corp. 1,869,877 126,996 San Paolo - IMI SpA - ADR 3,705,743 374,000 Sumitomo Mitsui - ADR 2,603,676 38,100 SunTrust Banks, Inc. 2,759,964 48,600 UBS AG 4,216,050 79,800 Wachovia Corp. 4,230,198 118,300 Washington Mutual, Inc. 4,963,868 ------------ 51,545,113 ------------ BIOMEDICINE: 1.0% 52,000 Amgen, Inc.* 3,203,720 ------------ BIOTECHNOLOGY: 0.7% 48,000 Genentech, Inc.* 2,265,600 COMPUTERS: 3.7% 125,700 Dell Computer Corp.* 5,039,313 110,400 Electronic Data Systems Corp. 2,351,520 368,100 EMC Corp.* 4,660,146 ------------ 12,050,979 ------------ See accompanying Notes to Financial Statements. 9 - -------------------------------------------------------------------------------- SHARES VALUE - -------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT: 3.4% 71,700 General Electric Co. $ 2,523,840 79,800 Hitachi Ltd. - ADR 5,051,340 240,700 Matsushita Electric Industrial Co., Ltd - ADR 3,596,058 ------------ 11,171,238 ------------ FINANCIAL SERVICES: 8.0% 78,000 American Express Co. 4,223,700 43,600 Goldman Sachs Group, Inc. 4,743,680 137,771 ING Groep N.V. - ADR 4,226,814 71,600 Lehman Brothers Holdings, Inc. 6,528,488 234,000 Nomura Holdings, Inc. - ADR 3,240,900 47,700 Orix Corp. - ADR 3,112,425 ------------ 26,076,007 ------------ FOODS: 1.1% 155,800 Sara Lee Corp. 3,489,920 ------------ HOUSEHOLD AUDIO & VIDEO EQUIPMENT: 0.8% 66,200 Sony Corp. - ADR 2,501,698 ------------ HOUSEHOLD PRODUCTS: 1.9% 54,700 Kimberly-Clark Corp. 3,609,106 49,200 Procter & Gamble Co. 2,612,028 ------------ 6,221,134 ------------ IMPORT & EXPORT: 0.8% 11,900 Mitsui & Co. Ltd. - ADR 2,450,686 ------------ INSURANCE: 4.5% 94,900 Allstate Corp. 5,094,232 81,544 American International Group, Inc. 5,447,139 159,600 Axa S.A. - ADR 4,280,472 ------------ 14,821,843 ------------ MACHINERY: 2.5% 86,100 Caterpillar, Inc. 8,183,805 ------------ MEDIA: 2.7% 40,000 Gannett Co. 3,150,000 201,900 Walt Disney Co. 5,641,086 ------------ 8,791,086 ------------ MISCELLANEOUS MANUFACTURING: 5.2% 83,500 Honeywell International, Inc. 3,170,495 55,200 Illinois Tool Works 4,954,200 208,500 Lafarge S.A. - ADR 5,437,680 42,800 Siemens AG - ADR 3,340,112 ------------ 16,902,487 ------------ 10 See accompanying Notes to Financial Statements. - -------------------------------------------------------------------------------- SHARES VALUE - -------------------------------------------------------------------------------- OIL & GAS: 14.1% 77,000 Anadarko Petroleum Corp. $ 5,918,220 124,900 Baker Hughes, Inc. 5,905,272 74,600 BASF AG - ADR 5,587,540 68,400 ChevronTexaco Corp. 4,246,272 54,100 ConocoPhillips 5,999,149 63,600 Occidental Petroleum Corp. 4,469,172 114,600 Royal Dutch Petroleum Co. - ADR 7,230,114 56,857 Total Fina S.A. - ADR 6,777,354 ------------ 46,133,093 ------------ PAPER & FOREST PRODUCTS: 0.9% 77,600 International Paper Co. 2,898,360 ------------ PHARMACEUTICALS: 5.4% 81,500 Astrazeneca Plc - ADR 3,238,810 90,400 GlaxoSmithKline Plc - ADR 4,359,088 57,100 Johnson & Johnson 3,745,760 42,200 Merck & Co., Inc. 1,337,740 121,280 Sanofi-Aventis - ADR* 4,840,285 ------------ 17,521,683 ------------ RETAIL: 5.5% 126,900 Albertson's, Inc. 2,841,291 91,600 Costco Wholesale Corp. 4,267,644 175,000 Gap, Inc. 3,732,750 68,200 Ito Yokado Co., Ltd. - ADR 2,825,178 72,400 Lowe's Companies, Inc. 4,255,672 ------------ 17,922,535 ------------ SEMICONDUCTORS: 3.7% 167,400 Intel Corp. 4,014,252 111,200 KLA-Tencor Corp.* 5,494,392 217,500 Micron Technology, Inc.* 2,501,250 ------------ 12,009,894 ------------ SOFTWARE: 4.3% 108,400 First Data Corp. 4,446,568 115,200 Microsoft Corp. 2,900,736 324,200 Oracle Corp.* 4,185,422 308,000 Siebel Systems, Inc.* 2,627,240 ------------ 14,159,966 ------------ TELECOMMUNICATIONS: 3.5% 59,700 Alltel Corp. 3,414,840 155,350 Bellsouth Corp. 4,008,030 103,600 BT Group Plc - ADR 4,171,972 ------------ 11,594,842 ------------ TRANSPORTATION: 1.6% 53,400 Fedex Corp. 5,221,452 ------------ See accompanying Notes to Financial Statements. 11 - -------------------------------------------------------------------------------- SHARES VALUE - -------------------------------------------------------------------------------- UTILITIES: 3.3% 93,400 Duke Energy Corp. $ 2,520,866 47,200 E. ON AG -ADR 4,248,000 85,700 Enel SpA - ADR 4,133,311 ------------ 10,902,177 ------------ TOTAL COMMON STOCKS (cost $270,182,600) 325,106,559 ------------ SHORT-TERM INVESTMENT: 0.4% 1,308,376 SEI Daily Income Trust Government Class B (cost $1,308,377) 1,308,377 ------------ TOTAL INVESTMENTS IN SECURITIES (cost $271,490,977): 100.0% 326,414,936 Other Assets less Liabilities: 0.0% 11,110 ------------ NET ASSETS: 100.0% $326,426,046 ============ - ------------- ADR- American depositary receipt. * Non-income producing security. 12 See accompanying Notes to Financial Statements. - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS PURISIMA PURE AMERICAN FUND FEBRUARY 28, 2005 (UNAUDITED) SHARES VALUE - -------------------------------------------------------------------------------- COMMON STOCKS: 98.5% AEROSPACE/DEFENSE EQUIPMENT: 2.8% 300 Lockheed Martin Corp. $ 17,766 1,050 Northrop Grumman Corp. 55,545 ---------- 73,311 ---------- BANKING: 10.4% 1,125 Bank of America Corp. 52,481 900 Banknorth Group, Inc. 32,481 900 Comerica, Inc. 51,372 1,750 National City Corp 62,597 600 UnionBanCal Corp. 37,140 750 Wachovia Corp. 39,757 ---------- 275,828 ---------- BIOMEDICINE: 1.2% 525 Amgen, Inc.* 32,345 ---------- BIOTECHNOLOGY: 0.8% 450 Genentech, Inc.* 21,240 ---------- CHEMICALS: 1.4% 750 Rohm & Haas Co. 36,127 ---------- COMPUTER COMPONENTS & SOFTWARE: 5.3% 1,800 BMC Software, Inc.* 26,910 2,475 Cisco Systems, Inc.* 43,114 1,000 Microsoft Corp. 25,180 2,500 Siebel Systems, Inc.* 21,325 1,000 Veritas Software Corp.* 24,220 ---------- 140,749 ---------- COMPUTERS: 6.2% 825 Dell Computer Corp.* 33,074 1,350 Electronic Data Systems Corp. 28,755 3,200 EMC Corp.* 40,512 400 IBM Corp. 37,032 5,900 Sun Microsystems, Inc.* 24,898 ---------- 164,271 ---------- See accompanying Notes to Financial Statements. 13 - -------------------------------------------------------------------------------- SHARES VALUE - -------------------------------------------------------------------------------- CONSUMER PRODUCTS: 3.9% 725 Clorox Co. (The) $ 43,529 575 Coca-Cola Co. (The) 24,610 400 Nike, Inc. - Class B 34,780 ---------- 102,919 ---------- DIVERSIFIED COMMERCIAL SERVICES: 0.9% 575 Cintas Corp. 25,173 ---------- ELECTRICAL EQUIPMENT: 1.0% 450 Johnson Controls, Inc. 26,595 ---------- ELECTRONICS: 1.0% 5,300 Solectron Corp.* 26,235 ---------- FINANCIAL SERVICES: 9.4% 725 American Express Co. 39,259 891 Citigroup, Inc. 42,519 350 Goldman Sachs Group, Inc. 38,080 325 Lehman Brothers Holdings, Inc. 29,633 550 Merrill Lynch & Co., Inc. 32,219 1,125 T Rowe Price Group, Inc. 69,064 ---------- 250,774 ---------- FOODS: 1.2% 1,400 Sara Lee Corp. 31,360 ---------- HEALTH CARE EQUIPMENT: 0.9% 450 Medtronic, Inc. 23,454 ---------- HOUSEHOLD PRODUCTS: 1.4% 700 Procter & Gamble Co. 37,163 ---------- INSURANCE: 4.3% 412 American International Group 27,522 19 Berkshire Hathaway, Inc. - Class B* 57,285 600 Safeco Corp. 28,614 ---------- 113,421 ---------- MACHINERY: 1.8% 500 Caterpillar, Inc. 47,525 ---------- MEDIA: 2.0% 1,950 Walt Disney Co 54,483 ---------- MISCELLANEOUS MANUFACTURING: 1.3% 425 3M Co. 35,675 ---------- OFFICE SUPPLIES: 1.8% 1,550 Staples, Inc. 48,856 ---------- 14 See accompanying Notes to Financial Statements. - -------------------------------------------------------------------------------- SHARES VALUE - -------------------------------------------------------------------------------- OIL & GAS: 13.6% 825 BJ Services Co. $ 41,217 1,200 Burlington Resources, Inc. 59,556 950 ChevronTexaco Corp. 58,976 775 ConocoPhillips 85,940 1,100 Ensco International, Inc. 44,308 1,125 Exxon Mobil Corp. 71,224 ---------- 361,221 ---------- PAPER & FOREST PRODUCTS: 1.8% 1,250 International Paper Co. 46,688 ---------- PHARMACEUTICALS: 4.6% 600 Johnson & Johnson 39,360 575 Lilly (Eli) & Co. 32,200 650 Merck & Co., Inc. 20,605 750 Wyeth 30,615 ---------- 122,780 ---------- RESTAURANTS: 2.4% 1,900 McDonald's Corp. 62,852 ---------- RETAIL: 4.6% 6675 Costco Wholesale Corp. 31,448 600 Federated Department Stores 33,870 2,400 Limited Brands 57,072 ---------- 122,390 ---------- SEMICONDUCTORS: 4.1% 1,900 Intel Corp. 45,562 625 KLA-Tencor Corp. 30,881 2,825 Micron Technology, Inc.* 32,488 ---------- 108,931 ---------- TELECOMMUNICATIONS: 2.3% 1,175 BellSouth Corp. 30,315 1,000 Scientific-Atlanta, Inc. 30,900 ---------- 61,215 ---------- TRANSPORTATION: 4.6% 1,500 Burlington Northern Santa Fe Corp. 75,405 475 Fedex Corp 46,446 ---------- 121,851 ---------- UTILITIES: 1.5% 1,250 Southern Co. 40,150 ---------- See accompanying Notes to Financial Statements. 15 - -------------------------------------------------------------------------------- SHARES VALUE - -------------------------------------------------------------------------------- TOTAL COMMON STOCKS (cost $2,220,198) $2,615,582 ---------- SHORT-TERM INVESTMENT: 0.2% 6,516 SEI Daily Income Trust Government Class B (cost $6,516) 6,516 ---------- TOTAL INVESTMENTS IN SECURITIES (cost $2,226,714): 98.7% 2,622,098 Other Assets less Liabilities: 1.3% 34,195 ---------- NET ASSETS: 100.0% $2,656,293 ========== - -------------- * Non-income producing security. 16 See accompanying Notes to Financial Statements. - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS PURISIMA PURE FOREIGN FUND FEBRUARY 28, 2005 (UNAUDITED) SHARES VALUE - -------------------------------------------------------------------------------- COMMON STOCKS: 98.4% AUSTRALIA: 5.3% 5,925 BHP Billiton Ltd. - ADR $ 182,253 450 National Australia Bank Ltd. - ADR 51,390 ---------- 233,643 ---------- FRANCE: 11.3% 4,150 Axa S.A. - ADR 111,303 950 Dassault Systemes S.A. - ADR 44,650 4,300 Groupe Danone - ADR 85,570 1,100 Publicis Groupe - ADR 33,275 1,740 Sanofi-Synthelabo SA - ADR* 69,443 1,272 Total Fina S.A. - ADR 151,622 ---------- 495,863 ---------- GERMANY: 9.0% 900 BASF AG - ADR 67,410 3,200 Bayerische Hypo-Und Vereinsbank AG - ADR 77,815 675 DaimlerChrysler AG 31,117 1,600 Deutsche Telekom AG - ADR* 33,392 4,500 Infineon Technologies AG - ADR* 46,530 1,325 SAP AG - ADR 53,729 1,025 Siemens AG - ADR 79,991 ---------- 389,984 ---------- HONG KONG: 0.9% 2,400 China Mobile HK Ltd. - ADR 38,880 ---------- ITALY: 6.5% 2,000 Enel SpA - ADR 96,460 600 Eni SpA - ADR 78,600 2,506 San Paolo - IMI SpA - ADR 73,125 965 Telecom Italia SpA - ADR 37,413 ---------- 285,598 ---------- JAPAN: 24.8% 1,350 Canon, Inc. - ADR 71,199 375 Fuji Heavy Industries Ltd. - ADR 17,548 1,675 Hitachi, Ltd. - ADR 106,027 1,800 Ito Yokado Co., Ltd. - ADR 74,565 1,300 Japan Airlines Corp. - ADR 19,634 4,000 Komatsu Ltd. - ADR 120,286 See accompanying Notes to Financial Statements. 17 - -------------------------------------------------------------------------------- SHARES VALUE - -------------------------------------------------------------------------------- JAPAN: 24.8% (CONTINUED) 750 Kyocera Corp. - ADR $ 55,950 6,500 Matsushita Electric Industrial Co., Ltd. - ADR 97,110 1,350 Millea Holdings, Inc. - ADR 99,049 100 Mitsui & Co. Ltd. - ADR 20,594 5,100 NEC Corp. - ADR 32,895 3,400 Nissan Motor Co. Ltd. - ADR 72,862 3,000 Nomura Holdings, Inc. - ADR 41,550 1,475 Orix Corp. - ADR 96,244 2,275 Sony Corp. - ADR 85,972 11,100 Sumitomo Mitsui - ADR 77,275 ---------- 1,088,760 ---------- NETHERLANDS: 7.9% 3,970 ABN Amro Holding N.V. - ADR 109,493 2,206 ING Groep N.V. - ADR 67,680 1,700 Royal Dutch Petroleum Co. - ADR 107,253 2,300 TPG N.V. - ADR 64,147 ---------- 348,573 ---------- NORWAY: 1.7% 850 Norsk Hydro A/S - ADR 73,363 ---------- PORTUGAL: 1.0% 3,632 Portugal Telecom S.A. - ADR 44,129 ---------- SPAIN: 6.2% 4,500 Banco Bilbao Vizcaya Argentaria S.A. - ADR 77,805 6,375 Banco Santander Central Hispano S.A. - ADR 78,412 2,650 Repsol S.A. - ADR 72,424 801 Telefonica S.A. - ADR 44,175 ---------- 272,816 ---------- SWEDEN: 3.2% 3,050 Volvo AB - ADR 139,934 ---------- SWITZERLAND: 5.4% 1,250 Novartis AG - ADR 62,463 2,000 UBS AG - ADR 173,500 ---------- 235,963 ---------- 18 See accompanying Notes to Financial Statements. - -------------------------------------------------------------------------------- SHARES VALUE - -------------------------------------------------------------------------------- UNITED KINGDOM: 15.2% 500 AstraZeneca Plc - ADR $ 19,870 2,350 Barclays Plc - ADR 103,283 1,700 BP Plc - ADR 110,364 1,325 BT Group Plc - ADR 53,358 2,950 Cadbury Schweppes Plc - ADR 117,027 550 GlaxoSmithKline Plc - ADR 26,521 1,025 HSBC Holdings Plc - ADR 85,577 700 National Grid Group - ADR 34,391 550 Rio Tinto Plc - ADR 77,864 1,800 Signet Group Plc - ADR 39,600 ---------- 667,855 ---------- TOTAL COMMON STOCKS (cost $3,359,731) 4,315,361 ---------- TOTAL INVESTMENTS IN SECURITIES (cost $3,359,731): 98.4% 4,315,361 Other Assets less Liabilities: 1.6% 72,330 ---------- NET ASSETS: 100.0% $4,387,691 ========== - ----------- ADR - American depositary receipt. * Non-income producing security. See accompanying Notes to Financial Statements. 19 SCHEDULE OF INVESTMENTS BY INDUSTRY PURISIMA PURE FOREIGN FUND FEBRUARY 28, 2005 (UNAUDITED) INDUSTRY % OF NET ASSETS - -------------------------------------------------------------------------------- Advertising 0.8% Airlines 0.5% Automobile Manufacturers 6.0% Banks 20.7% Chemicals 1.6% Diversified Manufacturing 1.8% Electric 5.4% Electronics 3.1% Finance 3.1% Food 4.6% Home Furnishings 4.2% Import & Export 0.5% Insurance 6.3% Machinery 2.7% Mining 5.9% Office/Business Equipment 1.6% Oil & Gas 13.5% Pharmaceuticals 4.1% Retail 2.6% Software 2.2% Telecommunications 5.7% Transportation 1.5% ------ TOTAL COMMON STOCKS 98.4% ------ TOTAL INVESTMENTS IN SECURITIES 98.4% Other Assets less Liabilities 1.6% ------ NET ASSETS 100.0% ====== 20 See accompanying Notes to Financial Statements.
- -------------------------------------------------------------------------------- PURISIMA FUNDS STATEMENTS OF ASSETS AND LIABILITIES FEBRUARY 28, 2005 (UNAUDITED) TOTAL RETURN PURE AMERICAN PURE FOREIGN FUND FUND FUND ------------ ------------- ------------ ASSETS Investments in securities, at cost $ 271,490,977 $ 2,226,714 $ 3,359,731 ============= ============= ============= Investments in securities, at value $ 326,414,936 $ 2,622,098 $ 4,315,361 Receivables: Securities sold -- -- 92,903 Dividends and interest 662,142 4,264 7,704 Fund shares sold 276,990 32,924 49,386 Other assets 70,410 -- -- ------------- ------------- ------------- Total Assets 327,424,478 2,659,286 4,465,354 ------------- ------------- ------------- LIABILITIES Cash overdraft -- -- 72,710 Payables for fund shares 389,501 -- -- redeemed Accrued advisory fees (Note 3) 253,179 2,993 4,953 Accrued distribution fees 230,732 -- -- (Note 4) Accrued administration fees 21,197 -- -- (Note 3) Accrued transfer agent fees 25,850 -- -- Other accrued expenses 77,973 -- -- ------------- ------------- ------------- Total Liabilities 998,432 2,993 77,663 ------------- ------------- ------------- NET ASSETS $ 326,426,046 $ 2,656,293 $ 4,387,691 ============= ============= ============= Number of shares issued and outstanding (unlimited shares authorized, $0.01 par value) 17,471,311 203,521 230,096 ============= ============= ============= NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE $ 18.68 $ 13.05 $ 19.07 ============= ============= ============= COMPONENTS OF NET ASSETS Paid-in capital $ 282,955,555 $ 2,463,020 $ 3,710,112 Accumulated net investment income 550,951 8,050 (26,668) Accumulated net realized loss on investments (12,004,419) (210,161) (251,383) Net unrealized appreciation on investments 54,923,959 395,384 955,630 ------------- ------------- ------------- Net assets $ 326,426,046 $ 2,656,293 $ 4,387,691 ============= ============= =============
See accompanying Notes to Financial Statements. 21
- -------------------------------------------------------------------------------- PURISIMA FUNDS STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED FEBRUARY 28, 2005 (UNAUDITED) TOTAL RETURN PURE AMERICAN PURE FOREIGN FUND FUND FUND ------------ ------------- ----------- INVESTMENT INCOME Income Dividends (net of foreign taxes witheld of $136,986, $0, and $2,407, respectively) $ 2,892,421 $ 27,316 $ 30,892 Interest & other income 5,964 84 256 ----------- ----------- ----------- Total income 2,898,385 27,400 31,148 ----------- ----------- ----------- Expenses Advisory fees 1,566,732 19,350 29,209 Distribution fees 391,683 -- -- Administration fees 127,926 -- -- Transfer agent fees 64,782 -- -- Fund accounting fees 43,639 -- -- Custody fees 30,944 -- -- Insurance expense 31,858 -- -- Reports to shareholders 16,581 -- -- Registration fees 12,470 -- -- Audit fees 9,421 -- -- Legal fees 8,107 -- -- Trustee fees 1,653 -- -- Miscellaneous 207 -- -- ----------- ----------- ----------- Total expenses 2,306,003 19,350 29,209 Add: expenses recouped by Adviser (Note 3) 44,095 -- -- ----------- ----------- ----------- Net expenses 2,350,098 19,350 29,209 ----------- ----------- ----------- NET INVESTMENT INCOME 548,287 8,050 1,939 ----------- ----------- ----------- CHANGE IN REALIZED AND UNREALIZED GAIN ON INVESTMENTS Net realized gain on 253,361 20,001 31,860 investments Net unrealized appreciation on investments 37,957,132 259,956 671,893 ----------- ----------- ----------- Net realized and unrealized gain on investments 38,210,493 279,957 703,753 ----------- ----------- ----------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $38,758,780 $ 288,007 $ 705,692 =========== =========== ===========
22 See accompanying Notes to Financial Statements.
- -------------------------------------------------------------------------------- PURISIMA FUNDS STATEMENT OF CHANGES IN NET ASSETS TOTAL RETURN FUND SIX MONTHS ENDED YEAR ENDED FEBRUARY 28, 2005* AUGUST 31, 2004 ------------------ --------------- INCREASE IN NET ASSETS FROM: OPERATIONS Net investment income $ 548,287 $ 1,193,740 Net realized gain on investments Securities 251,442 1,326,029 Other 1,919 -- Net unrealized appreciation on 37,957,132 18,232,293 ------------- ------------- investments NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 38,758,780 20,752,0620 ------------- ------------- DISTRIBUTION TO SHAREHOLDERS From net investment income (1,194,233) (1,073,580) ------------- ------------- TOTAL DISTRIBUTIONS TO SHAREHOLDERS (1,194,233) (1,073,580) ------------- ------------- CAPITAL SHARE TRANSACTIONS Net increase (decrease) in net assets derived from net change in outstanding shares (a) (9,760,719) 34,807,495 ------------- ------------- TOTAL INCREASE IN NET ASSETS 27,803,828 54,485,977 NET ASSETS Beginning of period 298,622,218 244,136,241 ------------- ------------- END OF PERIOD $ 326,426,046 $ 298,622,218 ============= ============= Accumulated net investment income $ 550,951 $ 1,196,897 ============= ============= (a) A summary of capital share transactions is as follows: SIX MONTHS ENDED YEAR ENDED FEBRUARY 28, 2005* AUGUST 31, 2004 ------------------------- -------------------------- SHARES VALUE SHARES VALUE Shares sold 1,394,478 $ 24,833,089 5,098,409 $ 85,836,402 Shares issued on reinvestment of distributions 63,323 1,149,948 62,124 1,035,611 Shares redeemed (1,998,046) (35,743,756) (3,094,870) (52,064,518) ---------- ------------ ---------- ------------ Net increase (decrease) (540,245) $ (9,760,719) 2,065,663 $ 34,807,495 ========== ============ ========== ============ - ----------- * Unaudited.
See accompanying Notes to Financial Statements. 23
- -------------------------------------------------------------------------------- PURISIMA FUNDS STATEMENT OF CHANGES IN NET ASSETS PURE AMERICAN FUND SIX MONTHS ENDED YEAR ENDED FEBRUARY 28, 2005* AUGUST 31, 2004 ----------------- --------------- INCREASE IN NET ASSETS FROM: OPERATIONS Net investment income $ 8,050 $ 4,631 Net realized gain on investments Securities 20,001 4,726 Net unrealized appreciation on 259,956 217,852 investments ----------- ----------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 288,007 227,209 ----------- ----------- DISTRIBUTION TO SHAREHOLDERS From net investment income (4,632) (12,757) ----------- ----------- TOTAL DISTRIBUTIONS TO SHAREHOLDERS (4,632) (12,757) ----------- ----------- CAPITAL SHARE TRANSACTIONS Net decrease in net assets derived from net change in outstanding shares (a) (199,097) (461,116) ----------- ----------- TOTAL INCREASE (DECREASE) IN NET ASSETS 84,278 (246,664) NET ASSETS Beginning of period 2,572,015 2,818,679 ----------- ----------- END OF PERIOD $ 2,656,293 $ 2,572,015 =========== =========== Accumulated net investment income $ 8,050 $ 4,632 =========== =========== (a) A summary of capital share transactions is as follows: SIX MONTHS ENDED YEAR ENDED FEBRUARY 28, 2005* AUGUST 31, 2004 ------------------ --------------------- SHARES VALUE SHARES VALUE ------ ----- ------ ----- Shares sold 5,796 $ 75,263 22,297 $ 257,872 Shares issued on reinvestment of distributions 358 4,631 1,094 12,756 Shares redeemed (22,250) (278,991) (61,309) (731,744) ------- --------- ------- --------- Net increase (decrease) (16,096) $(199,097) (37,918) $(461,116) ======= ========= ======= =========
* Unaudited. 24 See accompanying Notes to Financial Statements.
- -------------------------------------------------------------------------------- PURISIMA FUNDS STATEMENT OF CHANGES IN NET ASSETS PURE FOREIGN FUND SIX MONTHS ENDED YEAR ENDED FEBRUARY 28, 2005* AUGUST 31, 2004 ----------------- --------------- INCREASE IN NET ASSETS FROM: OPERATIONS Net investment income $ 1,939 $ 66,706 Net realized gain on investments Securities 31,860 82,432 Net unrealized appreciation on 671,893 312,226 investments ----------- ----------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 705,692 461,364 ----------- ----------- DISTRIBUTION TO SHAREHOLDERS From net investment income (70,648) (79,025) ----------- ----------- TOTAL DISTRIBUTIONS TO SHAREHOLDERS (70,648) (79,025) ----------- ----------- CAPITAL SHARE TRANSACTIONS Net increase in net assets derived from net change in outstanding shares (a) 351,025 293,757 ----------- ----------- TOTAL INCREASE IN NET 986,069 676,096 ASSETS NET ASSETS Beginning of period 3,401,622 2,725,526 ----------- ----------- END OF PERIOD $ 4,387,691 $ 3,401,622 =========== =========== Accumulated net investment $ (26,668) $ 42,041 income (loss) =========== =========== (a) A summary of capital share transactions is as follows: SIX MONTHS ENDED YEAR ENDED FEBRUARY 28, 2005* AUGUST 31, 2004 -------------------- --------------------- SHARES VALUE SHARES VALUE ------ ----- ------ ----- Shares sold 23,964 $ 434,701 36,377 $ 591,470 Shares issued on reinvestment of distributions 3,917 70,357 5,041 78,733 Shares redeemed (8,263) (154,033) (24,217) (376,446) ------ --------- ------- --------- Net increase 19,618 $ 351,025 17,201 $ 293,757 ====== ========= ======= ========= - -------- * Unaudited.
See accompanying Notes to Financial Statements. 25
- -------------------------------------------------------------------------------- PURISIMA FUNDS FINANCIAL HIGHLIGHTS FOR A CAPITAL SHARE OUTSTANDING THROUGHOUT EACH PERIOD. The following information should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this Semi-Annual Report. TOTAL RETURN FUND ---------------------------------------------------------------------- SIX YEAR ENDED AUGUST 31, MONTHS ENDED ----------------------------------------------------- FEB. 28, 2005++ 2004 2003 2002 2001 2000 --------------- ---- ---- ---- ---- ---- Net asset value, beginning of period $ 16.58 $ 15.31 $ 14.06 $ 18.73 $ 19.65 $ 17.46 ------- ------- ------- ------- ------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment 0.03 0.07 0.07 0.09 0.31^ (0.01) income (loss) Net realized and unrealized gain (loss) on 2.14 1.27 1.34 (2.91) (0.61)^ 2.22 investments ------- ------- ------- ------- ------- ------- Total from investment operations 2.17 1.34 1.41 (2.82) (0.30)^ 2.21 ------- ------- ------- ------- ------- ------- LESS DISTRIBUTIONS: From net investment (0.07) (0.07) (0.05) (0.19) -- (0.02) income From net realized -- -- (0.11) (1.66) (0.62) -- gain ------- ------- ------- ------- ------- ------- Total distributions (0.07) (0.07) (0.16) (1.85) (0.62) (0.02) ------- ------- ------- ------- ------- ------- Net asset value, $ 18.68 $ 16.58 $ 15.31 $ 14.06 $ 18.73 $ 19.65 ======= ======= ======= ======= ======= ======= end of period Total return 13.08%** 8.72% 10.22% (16.72%) (1.33%) 12.64% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (millions) $ 326.4 $ 298.6 $ 244.1 $ 181.6 $ 122.4 $89.8 RATIO OF EXPENSES TO AVERAGE NET ASSETS: Before fees waived and expenses absorbed or recouped 1.47%* 1.49% 1.56% 1.51%+ 1.61%+ 1.62% After fees waived and expenses absorbed or recouped 1.50%* 1.50% 1.50% 1.50%+ 1.50%+ 1.50% RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS # 0.35%* 0.42% 0.55% 1.03% 1.68% (0.04%) Portfolio turnover 2.21%** 19.50% 12.57% 60.76% 105.90% 38.42% rate - ---------- * Annualized. ** Not annualized. ++ Unaudited. # Net of fees waived. ^ Calculations are based on average shares outstanding for the period. + With dividend expense on securities sold short, which was 0.10% for 2002 and 0.05% for 2001. Otherwise, ratio of net expenses to average net assets would be 1.50% for 2002 and 2001.
26 See accompanying Notes to Financial Statements.
- -------------------------------------------------------------------------------- PURISIMA FUNDS FINANCIAL HIGHLIGHTS FOR A CAPITAL SHARE OUTSTANDING THROUGHOUT EACH PERIOD. The following information should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this Semi-Annual Report. PURE AMERICAN FUND ---------------------------------------------------------------------- SIX YEAR ENDED AUGUST 31, MONTHS ENDED ----------------------------------------------------- FEB. 28, 2005++ 2004 2003 2002 2001 2000 --------------- ---- ---- ---- ---- ---- Net asset value, beginning of period $ 11.71 $ 10.94 $ 10.21 $ 12.45 $ 13.49 $ 13.00 --------- --------- --------- --------- ---------- --------- INCOME FROM INVESTMENT OPERATIONS: Net investment 0.04 0.02 0.05 0.43 0.28^ (0.03) income (loss) Net realized and unrealized gain (loss) on 1.32 0.80 0.84 (2.07) (0.02)^ 0.52 investments --------- --------- --------- --------- ---------- --------- Total from investment operations 1.36 0.82 0.89 (1.64) 0.26^ 0.49 --------- --------- --------- --------- ---------- --------- LESS DISTRIBUTIONS: From net (0.02) (0.05) (0.16) (0.58) (0.28) -- investment income From net realized -- -- -- (0.02) (1.02) (0.00)++ gain --------- --------- --------- --------- ---------- --------- Total distributions (0.02) (0.05) (0.16) (0.60) (1.30) (0.00)++ --------- --------- --------- --------- ---------- --------- Net asset value, $ 13.05 $ 11.71 $ 10.94 $ 10.21 $ 12.45 $ 13.49 end of period ========= ========= ========= ========= ========== ========= Total return 11.64%** 7.49% 8.91% (13.90%) 1.96% (13.79% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (millions) $ 2.7 $ 2.6 $ 2.8 $ 2.6 $ 4.5 $ 1.1 RATIO OF EXPENSES TO AVERAGE NET ASSETS: Before fees waived 1.50%* 1.50% 1.50% 1.56%+ 1.58%+ 1.50% After fees waived n/a n/a n/a 1.19%+(1) 0.08%+ n/a RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS # 0.62%* 0.16% 0.52% 1.35% 4.09% (0.13%) Portfolio turnover 1.10%** 34.99% 31.47% 75.54% 265.29% 45.48% rate - ---------- * Annualized. ** Not annualized. ++ Unaudited. ++ Amount represents less than $0.01 per share. ^ Calculations are based on average shares outstanding for the period. + With dividend expense on securities sold short, which was Otherwise, 0.06% for 2002 and 0.08% for 2001. ratio of expenses (before fees waived) to average net assets would be 1.50% for 2002 and 2001. 1 The Adviser voluntarily waived all of its management fees for the period December 21, 2000 to December 1, 2001.
See accompanying Notes to Financial Statements. 27
- -------------------------------------------------------------------------------- PURISIMA FUNDS FINANCIAL HIGHLIGHTS FOR A CAPITAL SHARE OUTSTANDING THROUGHOUT EACH PERIOD. The following information should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this Semi-Annual Report. PURE FOREIGN FUND ---------------------------------------------------------------------- SIX YEAR ENDED AUGUST 31, MONTHS ENDED ----------------------------------------------------- FEB. 28, 2005++ 2004 2003 2002 2001 2000 --------------- ---- ---- ---- ---- ---- Net asset value, beginning of period $ 16.16 $ 14.10 $ 13.07 $ 15.37 $ 16.39 $ 13.52 --------- --------- --------- --------- ---------- --------- INCOME FROM INVESTMENT OPERATIONS: Net investment (0.12) 0.35 0.28 0.84 0.33^ 0.01 income (loss) Net realized and unrealized gain (loss) on 3.34 2.14 1.21 (2.47) (0.45)^ 3.69 investments --------- --------- --------- --------- ---------- --------- Total from investment operations 3.22 2.49 1.49 (1.63) (0.12)^ 3.70 --------- --------- --------- --------- ---------- --------- LESS DISTRIBUTIONS: From net (0.31) (0.43) (0.46) (0.67) (0.35) (0.03) investment income From net realized -- -- -- -- (0.55) (0.80) gain --------- --------- --------- --------- ---------- --------- Total distributions (0.31) (0.43) (0.46) (0.67) (0.90) (0.83) --------- --------- --------- --------- ---------- --------- Net asset value, $ 19.07 $ 16.16 $ 14.10 $ 13.07 $ 15.37 $ 16.39 end of period ========= ========= ========= ========= ========== ========= Total return 20.04%** 17.76% 10.95% (11.14%) (0.45%) 28.04% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (millions) $ 4.4 $ 3.4 $ 2.7 $ 3.4 $ 8.9 $ 2.8 RATIO OF EXPENSES TO AVERAGE NET ASSETS: Before fees waived 1.50%* 1.50% 1.50% 1.50%+ 1.50%+ 1.50% After fees waived n/a n/a n/a 1.07%+ 0.00%+ n/a RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 0.10%* 2.09% 2.06% 4.02% 4.21% 0.26% Portfolio turnover 3.62%** 34.02% 22.02% 69.59% 258.66% 51.60% rate - -------- * Annualized. ** Not annualized. ++ Unaudited. ^ Calculations are based on average shares outstanding for the period. + With dividend expense on securities sold short, which was 0.05% for 2002 and 0.08% for 2001. Otherwise, ratio of expense average net assets would be 1.50% for 2002 (before fees waived) to and 2001. 1 The Adviser voluntarily waived all of its management fees for the period December 21, 2000 to December 1, 2001.
28 See accompanying Notes to Financial Statements. - -------------------------------------------------------------------------------- PURISIMA FUNDS NOTES TO FINANCIAL STATEMENTS FEBRUARY 28, 2005 (UNAUDITED) NOTE 1 - ORGANIZATION The Purisima Funds (the "Trust") was organized as a Delaware business trust on June 27, 1996 and is registered under the Investment Company Act of 1940, as amended (the "1940 Act") as an open-end management investment company issuing its shares in series. Each series represents a distinct portfolio with its own investment objectives and policies. The Trust consists of three diversified series (the "Funds"): Purisima Total Return Fund (the "Total Return Fund"), representing the initial series of the Trust which commenced operations on October 28, 1996, and Purisima Pure American Fund (the "Pure American Fund") and Purisima Pure Foreign Fund (the "Pure Foreign Fund") both of which commenced operations on September 29, 1998. Fisher Asset Management, LLC (formerly, Fisher Investments, Inc.) (the "Adviser") serves as the investment adviser to the Funds. The investment objectives of the Funds are as follows: The Total Return Fund seeks to produce a high level of total return. It invests primarily in common stocks and other equity-type securities, or securities acquired primarily to produce income, or a combination of both depending on the assessment of market conditions. The Pure American Fund seeks to provide investors with a high level of total return. The Fund may emphasize investments in common stocks and other equity-type securities acquired primarily to produce income, or a combination of both, depending on the assessment of market conditions by the Fund's Investment Adviser. The Fund will concentrate its portfolio holdings to those securities issued by issuers domiciled in the United States. The Pure Foreign Fund seeks to provide investors with a high level of total return. The Fund may emphasize investments in common stocks and other equity-type securities acquired primarily to produce income, or a combination of both, depending on the assessment of market conditions by the Fund's Investment Adviser. Under normal market conditions, the Fund will concentrate its portfolio holdings to those securities issued by issuers domiciled outside of the United States. 29 - -------------------------------------------------------------------------------- NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements. These policies are in conformity with accounting principles generally accepted in the United States of America. A. Security Valuation. Investments in securities traded on a national securities exchange are valued at the last sales price on the business day as of which such value is being determined. Investments in securities traded on the Nasdaq Stock Market, Inc. ("Nasdaq") will be valued at the Nasdaq Official Closing Price, which may not necessarily represent the last sale price. Securities traded on an exchange or Nasdaq for which there have been no sales and other over-the- counter securities are valued at the closing bid. Securities for which quotations are not readily available are valued at their respective fair values as determined in good faith by the Board of Trustees or their designee, taking into consideration: (I) fundamental analytical data relating to the investment; (II) the nature and duration of restrictions on disposition of the securities; and (III) an evaluation of the forces which influence the market in which these securities are purchased and sold. Debt securities with remaining maturities of 60 days or less are valued at cost which, when combined with accrued interest, approximates market value. Discounts and Premiums on securities purchased are amortized over the lives of the respective securities using the straight-line method. B. Federal Income and Excise Taxes. The Funds intend to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of their income to its shareholders. Therefore, no federal income or excise tax provision is required. The Funds may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. The Funds will accrue such taxes and recoveries as applicable based upon their current interpretations of the tax rules and regulation that exist in the markets in which they invest. As of August 31, 2004, the Total Return Fund has a capital loss carryforward available to offset future capital gains, if any, of $11,958,728, of which $11,619,847 expires in 2011 and $338,881 expires in 2012. The Pure American Fund has a capital loss carryforward available to offset future capital gains, if any, of $205,896, of which $174,478 expires in 2012, $19,013 expires in 2011 and $12,405 expires in 2010, and the Pure Foreign Fund has a capital loss 30 - -------------------------------------------------------------------------------- carryforward available to offset future capital gains, if any, of $280,093, of which $135,135 expires in 2012, $144,188 expires in 2011 and $770 expires in 2010. In addition, the Pure American Fund had net realized capital losses of $9,421 during the period November 1, 2003 through August 31, 2004, which are treated for federal income tax purposes as arising during the Fund's tax year ending August 31, 2005. These "post-October" losses may be utilized in future years to offset net realized capital gains prior to distributing such gains to shareholders. C. Security Transactions, Investment Income and Distributions. Security transactions are accounted for on the trade date. Dividend income and distributions to shareholders are recorded on the ex-dividend date and interest income is recognized on the accrual basis. Realized gains and losses are evaluated on the bases of identified costs. D. Use of estimates. The presentation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates and assumptions. E. Concentration of Risk. Investments in securities of non-U.S. issues in certain countries involve special investment risks. These risks may include but are not limited to, investment restrictions, adverse political, social and economic developments, government involvement in the private sector, limited and less reliable investor information, lack of liquidity, certain local tax law considerations, and limited regulation of the securities markets. F. Options. Exchange traded options are valued at the last reported sale price at the close of the exchange on which the security is primarily traded. Certain markets are not closed at the time that a Fund prices portfolio securities. In these situations, snapshot prices are provided by the individual pricing services or other alternate sources at the close of the NYSE as appropriate. If no sales are reported, the mean between the last reported bid and asked prices will be used. Non- exchange traded options will also be valued at the mean between bid and asked prices. "Fair value" of other private options are valued after consulting with the Adviser using a mathematical model. Options purchased are recorded as investments; options written (sold) are accounted for as liabilities. When an option expires, the premium (original option value) is realized as a gain if the option was 31 - -------------------------------------------------------------------------------- written or as a loss if the option was purchased. When the exercise of an option result in a cash settlement, the difference between the premium and the settlement proceeds is realized as a gain or loss. When securities are acquired or delivered upon exercise of an option, the acquisition cost or sale proceeds are adjusted by the amount of the premium. When an option is closed, the difference between the premium and the cost to close the position is realized as a gain or loss. The Trust may purchase options which are included in the Trust's Schedules of Investments and subsequently marked to market to reflect the current value of the option. At February 28, 2005, the Trust had no options outstanding. G. Securities Sold Short. To the extent the Funds engage in selling securities short, they are obligated to replace a security borrowed by purchasing the same security at the current market value. The Funds would incur a loss if the price of the security increases between the date of the short sale and the date on which the Funds replace the borrowed security. The Funds would realize a gain if the price of the security declines between those dates. The Funds are required to establish a margin account with the broker lending the security sold short. While the short sale is outstanding, the broker retains the proceeds of the short sale and the Funds must also maintain a deposit with the broker consisting of cash having a value equal to a specified percentage of the value of the securities sold short. NOTE 3 - COMMITMENTS AND OTHER RELATED PARTY TRANSACTIONS The Total Return Fund (the "Fund") has an Investment Management Agreement with the Adviser to provide investment advisory services to the Fund. The Adviser furnishes all investment advice, office space, facilities, and most of the personnel needed by the Funds. As compensation for its services, the Adviser is entitled to a monthly fee at the annual rate of 1.00% of the Fund's average daily net assets. The Fund is responsible for its own operating expenses. The Adviser has agreed to limit the Fund's total expenses (exclusive of brokerage, interest, taxes, dividends on securities sold short and extraordinary expenses) to not more than 1.50% of the average daily net assets. Any fee withheld or voluntarily reduced and/or any Fund expense absorbed by the Adviser pursuant to an agreed upon expense cap shall be reimbursed by the Fund to the Adviser, if so requested by the Adviser, anytime before the end of the third fiscal year following the year to which the fee reduction, waiver, or expense absorption relates, provided the aggregate amount of the Fund's current operating expenses for such fiscal 32 - -------------------------------------------------------------------------------- year does not exceed the applicable limitation on Fund expenses. Any such reimbursement is also contingent upon Board of Trustees review and approval prior to the time the reimbursement is also initiated. The Fund must pay its current ordinary operating expenses before the Adviser is entitled to any reimbursement of fees and/or expenses. For the six months ended February 28, 2005, the Adviser recouped fees previously waived and expenses absorbed of $44,095. At February 28, 2005, the cumulative unreimbursed amount paid and/or waived by the Adviser on behalf of the Fund is $51,712 which the Adviser may recapture no later than August 31, 2006. The Pure American and Pure Foreign Funds have a Comprehensive Management Agreement with the Adviser to provide advisory and other ordinary services, including administration, transfer agency, custody and auditing services. For providing these services, the Pure American and Pure Foreign Funds each pay the Adviser a monthly fee at the annual rate of 1.50% of the respective Funds' average daily net assets. This comprehensive fee arrangement requires the Adviser to absorb and pay out of its own resources all operating expenses of the Pure American and Pure Foreign Funds. U.S. Bancorp Fund Services, LLC (the "Administrator") acts as the Trust's Administrator under an Administration Agreement. The Administrator prepares various federal and state regulatory filings, reports and returns for the Funds; prepares reports and materials to be supplied to the trustees; monitors the activities of the Funds' custodian, transfer agent and accountants; coordinates the preparation and payment of Fund expenses and reviews the Funds' expense accruals. For its services, the Administrator receives a monthly fee based on the value of the total average net assets of the Trust at an annual rate of 0.10% of the first $200 million of such net assets, 0.05% of the next $300 million, and 0.03% thereafter, subject to a minimum fee of $40,000 per Fund. The Pure American and Pure Foreign Funds' administration fees are paid by the Adviser under the Comprehensive Management Agreement. NOTE 4 - SERVICE AND DISTRIBUTION PLAN The Trust has adopted a Service and Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act. Under the Plan, the Total Return Fund is authorized to pay expenses incurred for the purpose of financing activities, including the employment of other dealers, intended to result in the sale of shares of the Fund. The fee accrues at an annual rate not to exceed 0.25% of the Fund's average daily net assets. For the six months ended February 28, 2005, the Fund incurred $391,683 in distribution fees. Quasar Distributors, LLC, an affiliate of the Administrator, serves as distributor of the Funds pursuant to a Distribution Agreement with the Trust. 33 - -------------------------------------------------------------------------------- NOTE 5 - INVESTMENT TRANSACTIONS The cost of purchases and the proceeds from sales of securities, excluding U.S. Government securities and short-term investments, for the six months ended February 28, 2005 were as follows: FUND PURCHASES SALES ---- --------- ----- Total Return Fund $ 6,927,738 $17,456,028 Pure American Fund 28,445 247,270 Pure Foreign Fund 373,036 141,041 NOTE 6 - DISTRIBUTION TO SHAREHOLDERS The difference between the book and tax basis components of the distributable earnings relate principally to the timing of recognition of income and gains for federal income tax purposes. Short-term gains distributions reported in the Statements of Changes of Net Assets, if any, are reported as ordinary income for federal tax purposes. As of February 28, 2005, the components of distributable earnings on a tax basis were as follows: TOTAL RETURN PURE AMERICAN PURE FOREIGN ------------ ------------- ------------ Cost of investments for tax purposes $ 271,790,029 $ 2,241,238 $ 3,362,881 ------------- ------------- ------------- Gross tax unrealized appreciation $ 65,639,073 $ 475,984 $ 1,015,640 Gross tax unrealized depreciation $ (11,014,166) $ (95,124) $ (63,160) ------------- ------------- ------------- Net tax unrealized appreciation $ 54,624,907 $ 380,860 $ 952,480 ------------- ------------- ------------- 34 - -------------------------------------------------------------------------------- NOTE 7 - PROXY VOTING PROCEDURES The Adviser votes proxies relating to portfolio securities in accordance with procedures that have been approved by the Trust's Board of Trustees. You may obtain a description of these procedures, free of charge, by calling toll-free 800-841-0199. This information is also available through the Securities and Exchange Commission's website at http://www.sec.gov. NOTE 8 - FORM N-Q DISCLOSURE Beginning with its first and third fiscal quarters ending on or after July 9, 2004, Purisima Funds will file the Funds' complete schedules of portfolio holdings with the SEC on form N-Q. The Funds' Form N-Q will be available without charge, upon request, by calling 1-800-841-0199. Furthermore, you can obtain the Form N-Q on the SEC's website at www.sec.gov. 35 - -------------------------------------------------------------------------------- OTHER INFORMATION - TRUSTEES AND OFFICER INFORMATION (UNAUDITED) Position(s) Held Name, Address, Age with Trust Year Elected(1) - -------------------------------------------------------------------------------- Kenneth L. Fisher* (54) President and Trustee 1996 Fisher Investments, Inc. 13100 Skyline Blvd. Woodside, CA 94062 - -------------------------------------------------------------------------------- Michelle Bryan Senior Vice President 2004 Oroschakoff* (44) and Chief Fisher Investments, Inc. Compliance Officer 13100 Skyline Blvd. Woodside, CA 94062 - -------------------------------------------------------------------------------- Rita Dam (38) Treasurer 2004 615 E. Michigan Street Milwaukee, WI 53202 - -------------------------------------------------------------------------------- Joy Ausili (38) Secretary 2004 615 E. Michigan Street Milwaukee, WI 53202 - -------------------------------------------------------------------------------- Pierson E. Clair III (56) Trustee 1996 Fisher Investments, Inc. 13100 Skyline Blvd. Woodside, CA 94062 - -------------------------------------------------------------------------------- Bryan F. Morse (52) Trustee 1996 Fisher Investments, Inc. 13100 Skyline Blvd. Woodside, CA 94062 - -------------------------------------------------------------------------------- 36 - -------------------------------------------------------------------------------- Number of Portfolios in Fund Complex Other Principal Occupation(s) Overseen by Directorships During Past Five Years Director Held - -------------------------------------------------------------------------------- Chief Executive Officer and majority 3 None shareholder of the Adviser, and has served in such capacities since the incorporation of the Adviser in 1986. Prior thereto, he was the founder of Fisher Investments, a sole proprietorship which commenced operations in 1978. - -------------------------------------------------------------------------------- Senior Vice President and Chief Legal N/A None Officer of the Adviser. Executive Director/Senior Vice President of Morgan Stanley from 2001 to 2004, Vice President & Compliance Manager of Morgan Stanley Dean Witter from 1999 to 2001. From 1994 to Present, Vice President N/A None of U.S. Bancorp Fund Services, LLC. - -------------------------------------------------------------------------------- From 1997 to Present, Vice President N/A None of U.S. Bancorp Fund Services, LLC. - -------------------------------------------------------------------------------- President and Chief Executive Officer 3 Signature of Brown & Haley since 1998 Foods, Inc. (fine confectioners); Vice President of Blummer Chocolate Company from 1980 to 1997, where he had been employed since 1970. - -------------------------------------------------------------------------------- Sole proprietor of Bryan F. Morse, RIA, 3 None a registered investment adviser since 1990. - -------------------------------------------------------------------------------- 37 - -------------------------------------------------------------------------------- Position(s) Held Name, Address, Age with Trust Year Elected(1) - -------------------------------------------------------------------------------- Grover T. Wickersham (55) Trustee 1996 Fisher Investments, Inc. 13100 Skyline Blvd. Woodside, CA 94062 - -------------------------------------------------------------------------------- Scott LeFevre (47) Trustee 2001 Fisher Investments, Inc. 13100 Skyline Blvd. Woodside, CA 94062 - -------------------------------------------------------------------------------- Alfred D. McKelvy, Jr. (55) Trustee 2003 Fisher Investments, Inc. 13100 Skyline Blvd. Woodside, CA 94062: - -------------------------------------------------------------------------------- - ------- 1 Trustees and officers of the Funds serve until their resignation, removal or retirement. * "Interested person" of the Trust, as defined in the 1940 Act. 38 - -------------------------------------------------------------------------------- Number of Portfolios in Fund Complex Other Principal Occupation(s) Overseen by Directorships During Past Five Years Director Held - -------------------------------------------------------------------------------- Attorney in private practice in Palo Alto, 3 None California. Prior to entering private practice in June of 1981, served as a Branch Chief of the Los Angeles Regional Office of the U.S. Securities and Exchange Commission. - -------------------------------------------------------------------------------- Sole proprietor of LeFevre 3 None Capital Management. - -------------------------------------------------------------------------------- Executive Director of the law firm 3 Diablo of Berding & Weil, LLP since 1990. Valley Bank; East Bay BOMA. - -------------------------------------------------------------------------------- 39 - -------------------------------------------------------------------------------- PRIVACY NOTICE FISHER ASSET MANAGEMENT, LLC (formerly, Fisher Investments, Inc.) and THE PURISIMA FUNDS may collect non-public information about you from the following sources: o Information we receive about you on applications or other forms; o Information you give us orally; and o Information about your transactions with us. We do not disclose any non-public personal information about our shareholders or former shareholders without the shareholder's authorization, except as required by law or in response to inquiries from governmental authorities. We restrict access to your personal and account information to those employees who need to know that information to provide products and services to you. We also may disclose that information to unaffiliated third parties (such as to brokers or custodians) only as permitted by law and only as needed for us to provide agreed services to you. We maintain physical, electronic and procedural safeguards to guard your non-public personal information. 40 This page is intentionally left blank. ITEM 2. CODE OF ETHICS. NOT APPLICABLE FOR SEMI-ANNUAL REPORTS. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. NOT APPLICABLE FOR SEMI-ANNUAL REPORTS. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. NOT APPLICABLE FOR SEMI-ANNUAL REPORTS. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable to open-end investment companies. ITEM 6. SCHEDULE OF INVESTMENTS. Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this Form. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable to open-end investment companies. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES Not applicable to open-end investment companies. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASES. Not applicable to open-end 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. ITEM 11. CONTROLS AND PROCEDURES. (a) The Registrant's President/Chief Executive Officer and Treasurer/Chief Financial Officer have concluded that the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the "1940 Act")) are effective as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rules 15d-15(b) under the Securities Exchange Act of 1934, as amended. (b) There were no significant changes in the Registrant's internal controls over financial reporting that occurred during the Registrant's last fiscal half-year that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting. ITEM 12. EXHIBITS. (a) (1) Not applicable. (2) CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002. Filed herewith. (3) ANY WRITTEN SOLICITATION TO PURCHASE SECURITIES UNDER RULE 23C-1 UNDER THE ACT SENT OR GIVEN DURING THE PERIOD COVERED BY THE REPORT BY OR ON BEHALF OF THE REGISTRANT TO 10 OR MORE PERSONS. Not applicable to open-end investment companies. (B) CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002. Furnished herewith. 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) THE PURISIMA FUNDS By (Signature and Title) /S/ KENNETH L. FISHER ---------------------- Kenneth L. Fisher, President Date May 6, 2005 ------------ 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/ KENNETH L. FISHER ---------------------- Kenneth L. Fisher, President Date May 6, 2005 ------------ By (Signature and Title)* /S/ RITA DAM ------------ Rita Dam, Treasurer Date May 9, 2005 ----------- * PRINT THE NAME AND TITLE OF EACH SIGNING OFFICER UNDER HIS OR HER SIGNATURE. EX-99.CERT 2 cert-99.txt EX.99.CERT CERTIFICATIONS I, Kenneth L. Fisher, certify that: 1. I have reviewed this report on Form N-CSR of The Purisima 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) 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) [Omit]; (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; (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: May 6, 2005 /S/ KENNETH L. FISHER --------------------- Kenneth L. Fisher President CERTIFICATIONS I, Rita Dam, certify that: 1. I have reviewed this report on Form N-CSR of The Purisima 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) 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) [Omit]; (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: May 9, 2005 /S/ RITA DAM ------------ Rita Dam Treasurer EX-99.906 3 cert-906.txt EX.99.906CERT CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of the Purisima Funds, does hereby certify, to such officer's knowledge, that the report on Form N-CSR of the Purisima Funds, for the period ended February 28, 2005 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as applicable, and that the information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Purisima Funds for the stated period. /S/ KENNETH L. FISHER /S/ RITA DAM - --------------------- ------------ Kenneth L. Fisher Rita Dam President, Purisima Funds Treasurer, Purisima Funds Dated: May 6, 2005 This statement accompanies this report on Form N-CSR pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed as filed by Purisima Funds for purposes of the Securities Exchange Act of 1934. -----END PRIVACY-ENHANCED MESSAGE-----