-----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, N54gIQeFA9F6B4WuhbB49AU1CUthZgUwv61lgLOYjjghBbc8j2DinPbaGBdmSHpK 3t/abee+wWdRRKSLlsZG7Q== 0000909012-08-001118.txt : 20081112 0000909012-08-001118.hdr.sgml : 20081111 20081112094532 ACCESSION NUMBER: 0000909012-08-001118 CONFORMED SUBMISSION TYPE: N-CSR/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20080831 FILED AS OF DATE: 20081112 DATE AS OF CHANGE: 20081112 EFFECTIVENESS DATE: 20081112 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-CSR/A SEC ACT: 1940 Act SEC FILE NUMBER: 811-07737 FILM NUMBER: 081178560 BUSINESS ADDRESS: STREET 1: C/O FISHER INVESTMENTS STREET 2: 13100 SKYLINE BLVD CITY: WOODSIDE STATE: CA ZIP: 94062 BUSINESS PHONE: 650-851-3334 MAIL ADDRESS: STREET 1: C/O FISHER INVESTMENTS STREET 2: 13100 SKYLINE BLVD CITY: WOODSIDE STATE: CA ZIP: 94062 0001019946 S000005935 The Purisima Total Return Fund C000016365 The Purisima Total Return Fund PURIX 0001019946 S000005936 The Purisima All-Purpose Fund C000016366 The Purisima All-Purpose Fund PURLX N-CSR/A 1 t304687.txt As filed with the Securities and Exchange Commission on November xx, 2008 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, CALIFORNIA 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 --------- Date of reporting period: AUGUST 31, 2008 --------------- ITEM 1. REPORTS TO STOCKHOLDERS. The Purisima Funds - -------------------------------------------------------------------------------- Annual Report August 31, 2008 The Purisima Total Return Fund - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Table of Contents A Letter to Our Shareholders 2 Performance Summary 5 Sector Breakdown 6 Expense Example 6 Schedule of Investments 8 Statement of Assets and Liabilities 18 Statement of Operations 19 Statement of Changes in Net Assets 20 Financial Highlights 21 Notes to Financial Statements 22 Report of Independent Registered Public Accounting Firm 29 Other Information 30 Trustees and Officer Information 32 Privacy Notice 36 - -------------------------------------------------------------------------------- INVESTMENT OBJECTIVES PURISIMA TOTAL RETURN FUND Seeks to provide investors with a high level of total return by considering both domestic and foreign securities. 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 Welcome to the annual report for the Purisima Total Return Fund for the twelve-month period ending August 31, 2008. The primary investment objective of the Fund is achieving high total return for shareholders. MARKET REVIEW AND OUTLOOK: Global equities finished the period down, with the MSCI World Index posting a decline of -12.07%. Looking forward, however, we firmly believe remaining fully invested in equities is the proper portfolio positioning. The current bear market has reached historical averages in duration and magnitude. History shows there is the potential for the markets to see a significant recovery in the next 12 to 18 months. Trying to time additional downside from here can be fraught with peril for investors who miss participating in what we expect to be a steep recovery. Our research shows the period directly after bear market bottoms usually sees fast and huge bounces off the trough. Unquestionably there are problems today, but in our view sentiment tied to the world economy remains overly dour. "Grow-cession" might best describe today. The global economy is growing, yet people's moods are recessionary. For instance, despite marked weakness in the financial sector, housing, and autos, the US economy accelerated in Q1 and Q2 2008. While there are also pockets of weakness in Europe, overall the non-US developed world should continue modest growth. Meanwhile, emerging markets (representing nearly a third of the global economy by GDP) continue to expand at a fast clip, and countries like Brazil, China, and India continue to expand at a pace well ahead of the developed world. People everywhere seem to be confusing slow global growth with a contraction, but a global recession from here appears to us as a very low probability--despite it being much discussed. At some point, investors will likely realize economic Armageddon isn't upon us, and we believe stocks should respond dramatically. A legitimate market risk is undue and harmful government intervention. In our view, the US government's recent tactics attempting to shore up financial markets have been often unfavorable to capital markets. In response to fears that capital-constraining losses resulting from subprime mortgage defaults and other risky forms of collateralized debt would cause a financial meltdown, both the Federal Reserve and Treasury Department moved to nationalize assets as opposed to traditional tactics including expanding the money supply, lowering reserve requirements, brokering more "shotgun wedding" mergers between distressed firms, and markedly increasing discount window activity. To be sure, government involvement in extremely distressed financial markets is occasionally necessary to prevent systemic failure. However, it remains to be seen if recent unprecedented federal actions will ultimately help the financial industry recover or produce further unintended negative consequences. Lastly, fear tied to the upcoming US presidential election is also real but largely overwrought. No matter the victor, neither Senators Obama nor McCain are likely to have a super-majority in Congress, making the possibility of overreaching legislation in their tenure unlikely. And while many fear severe negative consequences should capital gains and dividend taxes revert upwards in 2010, our analysis shows such tax changes rarely have the toxic economic effects many expect. 2 - -------------------------------------------------------------------------------- This year's volatility has undoubtedly caused discomfort, and we understand it's often difficult to bear. Unemotional analysis shows conditions appear ripe for stocks to advance in the period ahead. We strongly believe staying invested at this juncture is the best course of action to capture expected upside while bailing out now puts long-term objectives at the greatest risk. FUND POSITIONING The upcoming months will likely see lingering uncertainty, but we maintain a positive outlook for the global equity markets. We believe staying fully invested in equities should capture the inevitable market bounce. For the twelve-month period ending August 31, 2008, the Fund's country over- and underweight decisions had a mildly overall positive effect on the portfolio relative to the benchmark. Our underweight to the United Kingdom and overweight to Brazil helped returns, while our overweight to South Korea and underweight to Canada detracted from returns. Our sector positioning this period took advantage of heightened global demand for raw materials. Overall, our sector over- and underweight decisions outperformed the benchmark. Our overweight to Energy and Materials contributed positively to returns. In addition, our underweight to Financials and to Consumer Discretionary also benefited the portfolio relative to the benchmark. Our underweight to Consumer Staples, however, detracted from returns. Stock selection in aggregate detracted from the Fund's returns. Stock selection within the United States, the United Kingdom, and Energy boosted returns, while decisions within Information Technology, Health Care, Switzerland, and Japan hurt returns. CLOSING REMARKS Though the Fund outperformed the MSCI World benchmark over the twelve-month period ending August 31, 2008, markets were subject to increased volatility over uncertainties surrounding the health of the US financial system. At some point, uncertainty should subside and the better than widely thought of global economy will likely push shares higher. As it does, the Fund will hopefully be positioned to take advantage of the bounce. Thank you for your continued interest and support. Sincerely, /s/ KENNETH L. FISHER - ----------------------- 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. FUND HOLDINGS AND SECTOR ALLOCATIONS ARE SUBJECT TO CHANGE AND ARE NOT RECOMMENDATIONS TO BUY OR SELL ANY SECURITY. 3 - -------------------------------------------------------------------------------- MUTUAL FUND INVESTING INVOLVES RISK. PRINCIPAL LOSS IS POSSIBLE. THE FUND MAY USE SHORT SALES OF SECURITIES, WHICH INVOLVE THE RISK THAT LOSSES MAY EXCEED THE ORIGINAL AMOUNT INVESTED. THE FUND MAY ALSO USE OPTIONS AND FUTURES CONTRACTS, WHICH HAVE THE RISKS OF UNLIMITED LOSSES OF THE UNDERLYING HOLDINGS DUE TO UNANTICIPATED MARKET MOVEMENTS AND FAILURE TO CORRECTLY PREDICT THE DIRECTION OF SECURITIES PRICES, INTEREST RATES AND CURRENCY EXCHANGE RATES. THE FUND MAY INVEST IN FOREIGN SECURITIES WHICH INVOLVE GREATER VOLATILITY AND POLITICAL, ECONOMIC AND CURRENCY RISKS AND DIFFERENCES IN ACCOUNTING METHODS. THE FUND MAY INVEST IN DEBT SECURITIES WHICH TYPICALLY DECREASE IN VALUE WHEN I NT EREST RATES RISE. THIS RISK IS GREATER FOR LONGER-TERM DEBT SECURITIES. 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. ONE CANNOT INVEST DIRECTLY IN AN INDEX. THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY A PROSPECTUS. FISHER INVESTMENTS IS THE ADVISER TO THE PURISIMA FUNDS. THE PURISIMA FUNDS ARE DISTRIBUTED BY QUASAR DISTRIBUTORS, LLC. 10/08 4 - -------------------------------------------------------------------------------- PERFORMANCE SUMMARY FOR YEAR ENDED AUGUST 31, 2008 PURISIMA TOTAL RETURN FUND GROWTH OF $10,000 PURISIMA TOTAL RETURN FUND CUMULATIVE TOTAL RETURN VERSUS MSCI WORLD INDEX $10,000 INVESTED FROM 9/1/98 TO 8/31/08* 9/1998 10,000 10,000 2/1999 13,051 12,255 8/1999 14,005 13,305 2/2000 15,365 14,550 8/2000 15,775 15,051 2/2001 15,183 12,472 8/2001 15,566 11,230 2/2002 15,683 10,686 8/2002 12,963 9,299 2/2003 11,507 8,485 8/2003 14,288 10,314 2/2004 16,489 12,248 8/2004 15,533 11,925 2/2005 17,566 13,717 8/2005 17,895 14,084 2/2006 20,002 15,534 8/2006 20,497 16,305 2/2007 22,000 17,997 8/2007 23,702 19,072 2/2008 22,684 17,902 8/2008 20,918 16,770 PURISIMA TOTAL RETURN FUND MSCI WORLD INDEX*
ONE-YEAR ONE-YEAR Average Annual Total Return(2)** -11.75% Average Annual Total Return(2)** -12.07% FIVE-YEAR FIVE-YEAR Average Annual Total Return(2)** 7.92% Average Annual Total Return(2)** 10.21% TEN-YEAR TEN-YEAR Cumulative Total Return(1)** 109.18% Cumulative Total Return(1)** 67.70% Average Annual Total Return(2)** 7.66% Average Annual Total Return(2)** 5.31%
PLEASE NOTE PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. SHARE PRICE AND RETURN WILL FLUCTUATE, AND INVESTORS MAY EXPERIENCE A GAIN OR LOSS WHEN THEY SELL THEIR SHARES. TO OBTAIN A PROSPECTUS ON THE PURISIMA FUNDS PLEASE CALL 1-800-841-0199. THE PROSPECTUS CONTAINS MORE INFORMATION, INCLUDING THE POLITICAL, ECONOMIC, CURRENCY RISKS AND POTENTIAL VOLATILITY OF FOREIGN INVESTING. READ THE PROSPECTUS CAREFULLY BEFORE INVESTING. (1) Cumulative total return measures the change in value of an investment over the periods indicated and reflects all fund fees and expenses. (2) Average annual total return represents the average annual change in value of an investment over the periods indicated and reflects all fund fees and expenses. Average annual total return and cumulative total return for the one-year period would be identical. * The MSCI World Index is an unmanaged global stock index comprised of various world stock markets, including the U.S. The total return of a $10,000 investment includes all expenses. ** The total returns shown do not reflect the deduction of taxes a shareholder would pay on fund distributions or redemption of fund shares. The total return reflects the rate an investment would have earned (or lost) on an investment in the Fund, assuming reinvestment of all dividends and distributions. 5 - -------------------------------------------------------------------------------- SECTOR BREAKDOWN(1) (UNAUDITED) PURISIMA TOTAL RETURN FUND -------------------------------------------------------------------- Consumer Discretionary ..................................... 2.3% Consumer Staples ........................................... 7.7% Energy ..................................................... 21.0% Financials ................................................. 14.5% Health Care ................................................ 7.0% Industrials ................................................ 13.0% Information Technology ..................................... 12.1% Materials .................................................. 12.6% Telecommunication Services ................................. 6.3% Utilities .................................................. 2.2% Mutual Funds ............................................... 1.3% -------------------------------------------------------------------- Total ...................................................... 100.0% - --------- (1) Percentage of Total Investments as of August 31, 2008. IMPORTANT INFORMATION The following disclosure provides important information regarding the Fund's Expense Example. Please refer to this information when reviewing the Expense Example for the Fund. EXPENSE EXAMPLE (UNAUDITED) As a shareholder of the Fund, you incur two types of costs: (1) transaction costs; and (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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 March 1, 2008 to August 31, 2008, for the Total Return Fund. 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. 6 - -------------------------------------------------------------------------------- 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 Fund's actual expense ratios and assumed rates of return of 5% per year before expenses, which are not the Fund's 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 Fund 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), or redemption 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. ACTUAL HYPOTHETICAL PERFORMANCE PURISIMA TOTAL RETURN FUND PERFORMANCE (5% RETURN BEFORE EXPENSES) - -------------------------------------------------------------------------------- Beginning Account Value (03/01/08) $ 1,000.00 $ 1,000.00 Ending Account Value (08/31/08) $ 922.10 $ 1,018.05 Expenses Paid During Period(1) $ 6.81 $ 7.15 - -------------------------------------------------------------------------------- - ----------- (1) Expenses are equal to the Fund's expense ratio for the six month period of 1.41% for the Total Return Fund multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period). 7
- -------------------------------------------------------------------------------- PURISIMA TOTAL RETURN FUND SCHEDULE OF INVESTMENTS AUGUST 31, 2008 SHARES OR PRINCIPAL VALUE VALUE - -------------------------------------------------------------------------------- COMMON STOCKS: 98.8% ARGENTINA: 0.1% 8,000 Tenaris SA - ADR $ 437,520 ----------- AUSTRALIA: 1.8% 114,800 BHP Billiton Ltd. - ADR 8,094,548 ----------- BRAZIL: 4.0% 10,800 Banco Bradesco SA 198,828 11,222 Companhia Energetica de Minas Gerais - ADR 242,171 15,300 Companhia Siderurgica Nacional SA - ADR 531,063 27,100 Companhia Vale do Rio Doce 644,167 205,900 Companhia Vale do Rio Doce - ADR 5,466,645 7,800 Empresa Brasileira de Aeronautica SA (Embraer) - ADR 264,810 25,800 Gerdau SA - ADR 482,718 188,000 Petroleo Brasileiro SA - ADR 9,915,120 40,200 Weg SA 441,460 ----------- 18,186,982 ----------- CANADA: 2.6% 70,000 Canadian Natural Resources, Ltd. 5,953,500 80,500 EnCana Corporation 6,029,450 ----------- 11,982,950 ----------- CHINA: 2.7% 1,600 Aluminum Corporation of China, Ltd. - ADR 35,360 12,000 Anhui Conch Cement Company, Ltd. 62,732 650 Baidu.com - ADR (a) 203,918 35,000 China Communications Construction Company, Ltd. 59,913 183,500 China Cosco Holdings Company, Ltd. 353,617 5,500 China Life Insurance Company, Ltd. - ADR 315,150 165,500 China Mobile Hong Kong, Ltd. - ADR 9,387,160 86,000 China Oilfield Services, Ltd. 115,701 4,750 China Petroleum & Chemical Corporation - ADR 462,128 4,550 CNOOC, Ltd. - ADR 708,708 96,000 Datang International Power Generation Company, Ltd. 63,962 458,000 Industrial & Commercial Bank Of China, Ltd. 317,477 90,000 Lenovo Group, Ltd. 61,118 180,000 Shanghai Electric Company, Ltd. 74,956 47,000 Weichai Power Company, Ltd. 216,795 ----------- 12,438,695 ----------- 8 The accompanying notes are an integral part of these financial statements. - -------------------------------------------------------------------------------- SHARES OR PRINCIPAL VALUE VALUE - -------------------------------------------------------------------------------- CZECH REPUBLIC - 0.1% 3,000 Cez AS $ 226,870 ----------- DENMARK: 0.1% 1,900 Vestas Wind System AS(a) 258,628 ----------- FINLAND: 1.7% 5,600 Konecranes Oyj 185,752 296,400 Nokia Oyj - ADR 7,460,388 ----------- 7,646,140 ----------- FRANCE: 4.3% 1,700 ArcelorMittal 133,977 25,700 AXA 824,192 173,550 AXA - ADR 5,537,981 45,600 BNP Paribas SA 4,112,857 2,300 Dassault Systemes SA 139,423 2,500 Electricite de France 214,189 375 Eramet 206,639 5,350 Groupe Danone - ADR 74,969 1,100 Lafarge SA 133,328 2,550 Technip SA 210,056 105,608 Total SA - ADR 7,591,103 900 Vallourec SA 251,975 1,400 Veolia Environnement 75,274 2,600 Vivendi Universal SA 100,851 ----------- 19,606,814 ----------- GERMANY: 6.1% 3,300 Adidas AG 193,893 150,000 BASF AG - ADR 8,698,815 1,000 DaimlerChrysler AG 58,535 9,600 E.ON AG 561,235 129,900 E.ON AG - ADR 7,607,762 2,500 Q-Cells AG (a) 251,856 4,600 SAP AG 257,790 90,900 Siemens AG - ADR 9,889,920 2,400 Stada Arzneimittel AG 131,260 ----------- 27,651,066 ----------- HONG KONG: 1.0% 253,800 Cheung Kong Holdings, Ltd. - ADR 3,648,603 21,500 CLP Holdings, Ltd. 174,929 32,000 Hang Lung Properties, Ltd. 102,504 9,500 Hang Seng Bank, Ltd. 188,792 7,200 MTR Corporation, Ltd. - ADR 233,397 106,000 Sun Hung Kai Company, Ltd. 80,268 ----------- 4,428,493 ----------- The accompanying notes are an integral part of these financial statements. 9 - -------------------------------------------------------------------------------- SHARES OR PRINCIPAL VALUE VALUE - -------------------------------------------------------------------------------- INDIA: 0.2% 3,000 HDFC Bank, Ltd. - ADR $ 271,470 8,500 ICICI Bank, Ltd. - ADR 263,670 1,700 Reliance Industries, Ltd. - ADR 165,314 1,800 Reliance Industries, Ltd. - GDR 144A 173,340 18,300 Sterlite Industries India, Ltd. - ADR (a) 260,226 ----------- 1,134,020 ----------- INDONESIA: 0.4% 379,500 Bank Rakyat Tbk PT 242,631 881,900 Bumi Resources Tbk PT 530,104 560,000 International Nickel Indonesia Tbk PT 227,978 632,000 Medco Energi Internasional Tbk PT 338,448 11,500 Telekomunikasi Indonesia Tbk PT - ADR 400,430 ----------- 1,739,591 ----------- ISRAEL: 0.1% 6,200 Teva Pharmaceutical Industries, Ltd. - ADR 293,508 ----------- ITALY: 1.0% 4,200 ENI SpA 136,973 126,532 Intesa Sanpaolo SpA - ADR 4,104,837 4,500 Italcementi SpA 63,244 5,200 Saipem SpA 206,813 ----------- 4,511,867 ----------- JAPAN: 6.4% 5,100 Aeon Company, Ltd. 59,143 20,000 Asics Corporation 177,716 3,100 Astellas Pharmaceutical, Incorporated 141,291 6,500 Bridgestone Corporation 111,096 5,400 Canon, Incorporated 245,624 14 Central Japan Railway Company 146,272 23,000 Daiwa Securities Group, Incorporated 180,280 27 East Japan Railway Company 215,851 1,700 Electric Power Development Company, Ltd. 62,798 3,200 Fanuc, Ltd. 241,709 8,500 Fujitsu, Ltd. - ADR 298,018 5,500 Hitachi Construction Machinery Company, Ltd. 130,898 30,000 Hitachi Metals, Ltd. 449,621 4,200 Hoya Corporation - ADR 86,883 1,700 Ibiden Company, Ltd. 50,770 68,000 IHI Corporation 117,473 27 Inpex Holdings, Incorporated 295,245 10,800 Isetan Mitsukoshi Holdings, Ltd. (a) 121,671 2,000 Japan Petroleum Exploration Company 133,425 15,000 JGC Corporation 290,145 5,000 Kao Corporation 142,430 29 KDDI Corporation 170,549 10 The accompanying notes are an integral part of these financial statements. - -------------------------------------------------------------------------------- SHARES OR PRINCIPAL VALUE VALUE - -------------------------------------------------------------------------------- JAPAN: 6.4% (CONTINUED) 18,900 Kobe Steel, Ltd. - ADR (a) $ 229,883 2,450 Komatsu, Ltd. - ADR (a) 209,049 7,100 Kyushu Electric Power Company, Incorporated 156,908 6,900 Makita Corporation 180,703 237,900 Matsushita Electric Industrial Company, Ltd. - ADR 4,881,708 9,100 Mitsubishi Corporation 253,370 11,000 Mitsubishi Estate Company, Ltd. 246,129 34,000 Mitsubishi Heavy Industries, Ltd. 164,337 454,200 Mitsubishi UFJ Financial Group, Incorporated - ADR (a) 3,470,088 715 Mitsui & Company, Ltd. - ADR (a) 243,164 38,000 Mitsui Engineering & Shipbuilding Company, Ltd. 77,519 10,000 Mitsui Fudosan Company, Ltd. 211,808 18,000 Mitsui OSK Lines, Ltd. 216,347 66 Mizuho Financial Group, Incorporated 285,045 4,100 Modec, Incorporated 131,110 26,000 Nippon Mining Holdings, Incorporated 146,933 49,000 Nippon Steel Corporation 235,488 283,800 Nomura Holdings, Incorporated 3,820,510 4,000 Olympus Corporation 131,220 2,450 ORIX Corporation - ADR 150,528 4,600 Seven & I Holdings Company, Ltd. 135,263 5,400 Shin-Etsu Chemical Company, Ltd. 304,176 4,000 Shiseido Company, Ltd. 94,464 1,000 SMC Corporation 103,745 86,200 Sony Corporation 3,358,493 15,000 Sumitomo Metal Mining Company, Ltd. 193,246 525 Sumitomo Mitsui Financial Group, Incorporated - ADR 3,232,254 48,400 Sumitomo Mitsui Financial Group, Incorporated - ADR (a) 298,807 7,000 Sumitomo Realty & Development Company, Ltd. 141,833 10,200 Suzuki Motor Corporation 216,981 2,900 Terumo Corporation 162,821 7,500 Tokio Marine Holdings, Incorporated - ADR 257,775 2,900 Tokyo Electron, Ltd. 166,285 4,100 Toray Industries, Incorporated - ADR 182,852 26,000 Toshiba Corporation 146,694 7,000 Toyota Motor Corporation 317,115 469 Yahoo Japan Corporation 181,222 10,000 Yamato Holdings Company, Ltd. 118,631 ----------- 28,923,412 ----------- MALAYSIA: 0.1% 81,900 Bumiputra - Commerce Holdings BHD 201,522 13,200 Digi.com BHD 89,465 The accompanying notes are an integral part of these financial statements. 11 - -------------------------------------------------------------------------------- SHARES OR PRINCIPAL VALUE VALUE - -------------------------------------------------------------------------------- MALAYSIA: 0.1% (CONTINUED) 47,300 Genting BHD $ 81,540 335,600 MMC Corporation BHD 207,679 29,200 Telekom Malaysia BHD 30,805 29,200 TM International BHD (a) 53,779 ----------- 664,790 ----------- MEXICO: 1.2% 91,900 America Movil SA de CV - ADR 4,721,822 207,475 Grupo Mexico SA de CV 342,000 17,700 Industrias Penoles SA de CV 291,782 6,000 Wal-Mart De Mexico SA de CV - ADR 218,713 ----------- 5,574,317 ----------- NETHERLANDS: 2.3% 2,850 Heineken NV 133,962 122,827 ING Groep NV - ADR 3,826,061 240,400 Unilever NV - ADR 6,635,040 ----------- 10,595,063 ----------- NORWAY: 0.1% 5,000 SeaDrill, Ltd. 137,154 4,397 Statoil ASA 135,823 ----------- 272,977 ----------- PHILIPPINES: 0.1% 8,900 Philippine Long Distance Telephone - ADR 527,681 ----------- POLAND: 0.1% 1,900 Bank Pekao SA - GDR 151,648 900 Bre Bank SA (a) 140,675 2,800 KGHM Polska Miedz SA - GDR 188,160 ----------- 480,483 ----------- PORTUGAL: 0.0% 16,700 Jeronimo Martins 142,833 ----------- RUSSIAN FEDERATION - 0.1% 3,000 LUKOIL - ADR 224,250 1,400 OAO Gazprom - ADR 54,110 9,900 OAO Gazprom Spon ADR 386,100 ----------- 664,460 ----------- SINGAPORE - 0.1% 30,000 Capitaland, Ltd. 92,728 43,000 Cosco Corporation Singapore, Ltd. 69,793 13,000 DBS Group Holdings, Ltd. 165,866 73,000 Singapore Telecommunications, Ltd. 181,849 ----------- 510,236 ----------- 12 The accompanying notes are an integral part of these financial statements. - -------------------------------------------------------------------------------- SHARES OR PRINCIPAL VALUE VALUE - -------------------------------------------------------------------------------- SOUTH AFRICA: 0.2% 2,550 Anglo Platinum, Ltd - ADR $ 323,177 15,300 MTN Group Ltd 235,816 5,500 Sasol, Ltd. - ADR 302,445 ----------- 861,438 ----------- SOUTH KOREA: 1.0% 10,700 Daewoo Securities Company, Ltd. 162,136 3,900 Daewoo Shipbuilding & Marine Engineering Company, Ltd. 125,177 3,500 Daewoo Shipbuilding & Marine Engineering Company, Ltd. - GDR 224,700 1,200 Daewoo Shipbuilding & Marine Engineering Company, Ltd. - Sponsored GDR 144A (a) 77,032 2,800 Dongkuk Steel Mill Company, Ltd. 100,799 4,500 Doosan Infracore Company, Ltd. 87,818 1,050 GS Engineering & Construction Corporation 81,963 10,100 Hynix Semiconductor - GDR 144A (a) 178,952 1,825 Hyundai Heavy Industries Company, Ltd. 401,403 5,200 Kookmin Bank - ADR 284,960 2,200 Korea Electric Power Corporation 66,875 4,200 LG Chemical, Ltd. - GDR 144A 183,343 800 LG Electronics, Incorporated 74,571 350 NHN Corporation (a) 48,214 4,625 POSCO - ADR 495,338 1,200 Samsung Electronic Company, Ltd. 282,000 500 Samsung Electronics Company, Ltd. - GDR 144A 118,468 1,700 Samsung Fire & Marine Insurance Company 310,680 3,500 Samsung Securities Company, Ltd. 191,891 3,100 Shinhan Financial Group Company, Ltd. - ADR 279,465 125 Shinsegae Company, Ltd. 62,448 4,600 SK Energy Company, Ltd. 363,302 2,400 Woori Finance Holdings Company, Ltd. - ADR 95,352 11,300 Woori Investment & Securities Company, Ltd. 198,209 ----------- 4,495,096 ----------- SPAIN: 2.6% 3,300 Banco Bilbao Vizcaya Argentaria SA 55,965 445,675 Banco Santander Central Hispano SA - ADR 7,567,562 59,700 Telefonica SA - ADR 4,421,979 ----------- 12,045,506 ----------- SWEDEN: 0.0% 9,000 Volvo AB-B Shares 102,547 ----------- SWITZERLAND: 7.4% 321,400 Abb, Ltd. - ADR 7,896,798 166,800 Credit Suisse Group - ADR 7,736,184 1,800 Julius Baer Holding AG 110,012 The accompanying notes are an integral part of these financial statements. 13 - -------------------------------------------------------------------------------- SHARES OR PRINCIPAL VALUE VALUE - -------------------------------------------------------------------------------- SWITZERLAND: 7.4% (CONTINUED) 158,050 Nestle SA $ 6,975,644 1,900 Novartis AG - ADR 105,716 49,900 Roche Holding AG 8,428,824 108,833 UBS AG 2,382,344 ----------- 33,635,522 ----------- TAIWAN: 0.3% 65,217 Advanced Semiconductor Engineering, Incorporated - ADR 232,825 10,117 Asustek Computer, Incorporated - GDR 118,371 36,740 Hon Hai Precision - GDR 365,563 35,997 Siliconware Precision Industries, Ltd. - ADR 247,662 58,091 Taiwan Semiconductor Manufacturing Company, Ltd. - ADR 564,064 ----------- 1,528,485 ----------- TURKEY: 0.0% 10,000 Turkcell Iletisim Hizmet AS - ADR 165,500 ----------- UNITED KINGDOM: 4.0% 13,003 Anglo American Plc 694,960 140,000 Anglo American Plc - ADR 3,724,000 1,700 AstraZeneca Plc - ADR 82,790 14,500 BG Group Plc 322,199 88,250 GlaxoSmithKline Plc - ADR 4,145,102 9,150 Man Group Plc 94,904 21,625 Rio Tinto Plc - ADR 8,211,445 5,100 Royal Dutch Shell Plc A Shares 178,258 8,700 Schroders Plc 160,967 7,200 Standard Chartered Plc 195,687 39,300 Vodafone Group Plc 101,046 4,300 Vodafone Group Plc - ADR 109,865 2,800 Xstrata Plc 156,488 ----------- 18,177,711 ----------- UNITED STATES: 46.6% 5,000 AGCO Corporation (a) 308,150 7,925 Ameriprise Financial, Incorporated 356,229 148,550 Anadarko Petroleum Corporation 9,169,991 4,800 Apache Corporation 549,024 248,100 AT&T, Incorporated 7,936,719 50 Berkshire Hathaway, Incorporated (a) 195,100 7,900 Biogen Idec, Incorporated (a) 402,347 113,500 Caterpillar, Incorporated 8,027,855 11,800 Chesapeake Energy Corporation 571,120 394,000 Cisco Systems, Incorporated (a) 9,475,700 154,000 The Coca-Cola Company 8,018,780 103,900 ConocoPhillips 8,572,789 14 The accompanying notes are an integral part of these financial statements. - -------------------------------------------------------------------------------- SHARES OR PRINCIPAL VALUE VALUE - -------------------------------------------------------------------------------- UNITED STATES: 46.6% (CONTINUED) 5,000 Deere & Company $ 352,850 68,000 Devon Energy Corporation 6,939,400 352,550 EMC Corporation (a) 5,386,964 5,650 Emerson Electric Company 264,420 79,700 Exxon Mobil Corporation 6,376,797 5,700 FirstEnergy Corporation 414,048 105,300 Freeport-McMoRan Copper & Gold, Incorporated 9,405,396 271,150 General Electric Company 7,619,315 5,400 Genzyme Corporation (a) 422,820 46,325 Goldman Sachs Group, Incorporated 7,595,910 131,900 Hewlett-Packard Company 6,188,748 89,900 Honeywell International, Incorporated 4,510,283 310,700 Intel Corporation 7,105,709 11,100 Invitrogen Corporation (a) 471,306 4,900 Jacobs Engineering Group, Incorporated (a) 361,718 16,150 Janus Capital Group, Incorporated 435,566 94,800 Johnson & Johnson 6,676,764 63,400 Lockheed Martin Corporation 7,382,296 122,800 Merck & Company, Incorporated 4,380,276 278,500 Microsoft Corporation 7,600,265 101,500 Nucor Corporation 5,328,750 131,900 Occidental Petroleum Corporation 10,467,584 5,400 Oceaneering International, Incorporated (a) 337,014 336,400 Oracle Corporation (a) 7,377,252 297,600 Pfizer, Incorporated 5,687,136 5,900 PNC Financial Services Group 424,505 89,225 Procter & Gamble Company 6,225,228 10,400 Qualcomm, Incorporated 547,560 119,500 Schlumberger Ltd. 11,259,290 6,250 Sigma-Aldrich Corporation 354,750 30,300 Southern Copper Corporation 773,559 5,700 Techne Corporation (a) 439,869 6,550 Terex Corporation (a) 329,400 8,750 Tiffany & Company 386,488 44,806 Transocean, Incorporated (a) 5,699,323 3,900 United States Steel Corporation 518,973 90,600 United Technologies Corporation 5,942,454 13,225 Verizon Communications, Incorporated 464,462 100,900 Wal-Mart Stores, Incorporated 5,960,163 6,875 XTO Energy, Incorporated 346,569 ----------- 212,344,984 ----------- TOTAL COMMON STOCKS (Cost $401,001,768) 450,350,733 ----------- The accompanying notes are an integral part of these financial statements. 15 - -------------------------------------------------------------------------------- SHARES OR PRINCIPAL VALUE VALUE - -------------------------------------------------------------------------------- PREFERRED STOCKS: 0.2% BRAZIL: 0.2% 13,250 Banco Itau Holding Financeira SA $ 251,750 3,100 Companhia de Bebidas das Americas (AmBev) - ADR 191,859 21,000 Lojas Americanas SA 133,086 2,000 Uniao de Bancos Brasileiros SA 239,120 ------------ 815,815 ------------ GERMANY: 0.0% 2,900 Henkel AG & Company KGAA 113,849 ------------ TOTAL PREFERRED STOCKS (Cost $1,104,543) 929,664 ------------ MUTUAL FUNDS: 1.3% 5,825,442 SEI Daily Income Trust Government Fund 5,825,442 ------------ TOTAL MUTUAL FUNDS (Cost $5,825,442) 5,825,442 ------------ TOTAL INVESTMENTS (Cost $407,931,753): 100.3% 457,105,839 Liabilities in Excess of Other Assets: (0.3)% (1,493,613) ------------ TOTAL NET ASSETS: 100.0% $455,612,226 ============ - -------- ADR - American depositary receipt. GDR - Global Depository Receipt. (a) Non-income producing security. INDUSTRY % OF NET ASSETS - -------------------------------------------------------------------------------- Oil, Gas & Consumable Fuels 17.0% Metals & Mining 10.5% Pharmaceuticals 6.6% Commercial Banks 5.9% Capital Markets 5.2% Energy Equipment & Services 4.1% Aerospace & Defense 4.0% Industrial Conglomerates 3.9% Communications Equipment 3.8% Wireless Telecommunication Services 3.4% Software 3.4% 16 The accompanying notes are an integral part of these financial statements. - -------------------------------------------------------------------------------- INDUSTRY (CONTINUED % OF NET ASSETS - -------------------------------------------------------------------------------- Food Products 3.0% Diversified Telecommunication Services 2.9% Machinery 2.7% Computers & Peripherals 2.7% Chemicals 2.1% Electric Utilities 2.1% Semiconductors & Semiconductor Equipment 2.0% Electrical Equipment 1.9% Household Durables 1.9% Beverages 1.8% Insurance 1.6% Food & Staples Retailing 1.4% Household Products 1.4% Real Estate Management & Development 1.0% Diversified Financial Services 0.9% Life Sciences Tools & Services 0.2% Biotechnology 0.2% Construction & Engineering 0.2% Road & Rail 0.1% Automobiles 0.1% Marine 0.1% Electronic Equipment & Instruments 0.1% Trading Companies & Distributors 0.1% Internet Software & Services 0.1% Specialty Retail 0.1% Textiles, Apparel & Luxury Goods 0.1% Health Care Equipment & Supplies 0.1% Construction Materials 0.1% Multiline Retail 0.1% Office Electronics 0.1% Consumer Finance 0.0% Independent Power Producers & Energy Traders 0.0% Air Freight & Logistics 0.0% Auto Components 0.0% Media 0.0% Personal Products 0.0% Hotels Restaurants & Leisure 0.0% Multi-Utilities 0.0% ------ TOTAL INVESTMENT IN SECURITIES 99.0% Cash Equivalent 1.3% Liabilities in Excess of Other Assets (0.3)% ------ TOTAL NET ASSETS 100.0% ===== The accompanying notes are an integral part of these financial statements. 17
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PURISIMA TOTAL RETURN FUND STATEMENT OF ASSETS AND LIABILITIES AUGUST 31, 2008 ASSETS Investments in securities, at cost $ 407,931,753 ============= Investments in securities, at value $ 457,105,839 Receivables: Dividends and interest 678,052 Fund shares sold 671,181 Investments sold 281,286 Other assets 34,081 ------------- Total Assets 458,770,439 ------------- LIABILITIES Payables for fund shares redeemed 311,383 Payables for investments purchased 2,008,674 Accrued advisory fees (Note 3) 384,409 Accrued distribution fees (Note 4) 264,124 Accrued fund administration, fund accounting, transfer agent and custody fees 123,425 Other accrued expenses and liabilities 66,198 ------------- Total Liabilities 3,158,213 ------------- NET ASSETS $ 455,612,226 ============= Number of shares issued and outstanding (unlimited shares authorized, $0.01 par value) 22,500,371 NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE $ 20.25 ============= COMPONENTS OF NET ASSETS Paid-in capital $ 398,387,062 Undistributed net investment income 2,083,758 Accumulated net realized gain on investments 5,969,937 Net unrealized appreciation on investments 49,174,086 Net unrealized depreciation on foreign currency (2,617) ------------- Net assets $ 455,612,226 ============= 18 The accompanying notes are an integral part of these financial statements.
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PURISIMA TOTAL RETURN FUND STATEMENT OF OPERATIONS FOR THE YEAR ENDED AUGUST 31, 2008 INVESTMENT INCOME Income Dividends (net of foreign taxes withheld of $1,040,357) $ 9,528,117 Interest income 169,800 ------------ Total income 9,697,917 ------------ Expenses Advisory fees (Note 3) 4,788,244 Distribution fees (Note 4) 895,404 Administration fees (Note 3) 339,381 Transfer agent fees 219,710 Fund accounting fees 147,194 Custody fees 146,235 Insurance expense 86,642 Reports to shareholders 37,006 Registration fees 33,810 Audit fees 20,961 Legal fees 22,375 Trustee fees 23,810 Miscellaneous 12,938 ------------ Total operating expenses 6,773,710 Interest expense 337 ------------ Total expenses 6,774,047 ------------ NET INVESTMENT INCOME 2,923,870 ------------ REALIZED AND UNREALIZED GAIN ON INVESTMENTS Net realized gain on investments 22,416,081 Net realized loss on foreign currency (141,008) Change in net unrealized depreciation on investments (84,190,652) Change in net unrealized depreciation on foreign currency (2,617) ------------ Net loss on investments (61,918,196) ------------ NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(58,994,326) ============ The accompanying notes are an integral part of these financial statements. 19
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PURISIMA TOTAL RETURN FUND STATEMENT OF CHANGES IN NET ASSETS YEAR ENDED YEAR ENDED AUGUST 31, 2008 AUGUST 31, 2007 --------------- --------------- INCREASE IN NET ASSETS FROM: OPERATIONS Net investment income $ 2,923,870 $ 1,589,923 Net realized gain (loss) on investments and foreign currency 22,275,073 22,935,435 Change in net unrealized depreciation on investments (84,190,652) 36,347,412 Change in net unrealized depreciation on foreign currency (2,617) -- ------------- ------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (58,994,326) 60,872,770 ------------- ------------- DISTRIBUTION TO SHAREHOLDERS From net investment income (1,298,261) (1,378,881) From net realized gain on investments (34,522,389) -- ------------- ------------- TOTAL DISTRIBUTIONS TO SHAREHOLDERS (35,820,650) (1,378,881) ------------- ------------- CAPITAL SHARE TRANSACTIONS Net increase in net assets derived from net change in outstanding shares (a) 84,703,220 18,931,734 ------------- ------------- TOTAL INCREASE (DECREASE) IN NET ASSETS (10,111,756) 78,425,623 ------------- ------------- NET ASSETS Beginning of year 465,723,982 387,298,359 ------------- ------------- END OF YEAR $ 455,612,226 $ 465,723,982 ============= ============= Undistributed net investment income (loss) $ 2,083,758 $ (1,276,122) ============= ============= (a) A summary of capital share transactions is as follows: YEAR ENDED YEAR ENDED AUGUST 31, 2008 AUGUST 31, 2007 ------------------------- ------------------------ SHARES VALUE SHARES VALUE ------ ----- ------ ----- Shares sold 5,193,681 $ 118,169,093 3,607,216 $ 85,489,850 Shares issued on reinvestment of distributions 1,428,514 $ 33,170,091 56,352 $ 1,288,215 Shares redeemed (2,906,534) (66,635,964) (2,884,946) (67,846,331) ---------- ------------- --------- ------------- Net increase (decrease) 3,715,661 $ 84,703,220 778,622 $ 18,931,734 ========== ============= ========= ============= 20 The accompanying notes are an integral part of these financial statements.
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PURISIMA TOTAL RETURN FUND FINANCIAL HIGHLIGHTS FOR A CAPITAL SHARE OUTSTANDING THROUGHOUT EACH YEAR. The following information should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this Annual Report. YEAR ENDED AUGUST 31, ---------------------------------------------------------- 2008 2007 2006 2005 2004 ---------- ---------- ---------- ---------- ---------- Net asset value, beginning of year $ 24.79 $ 21.51 $ 19.03 $ 16.58 $ 15.31 ---------- ---------- ---------- ---------- ---------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.15 0.09 0.04 0.10 0.07 Net realized and unrealized gain (loss) on investments (2.82) 3.27 2.72 2.42 1.27 ---------- ---------- ---------- ---------- ---------- Total from investment (2.67) 3.36 2.76 2.52 1.34 ---------- ---------- ---------- ---------- ---------- operations LESS DISTRIBUTIONS: From net investment income (0.07) (0.08) (0.28) (0.07) (0.07) From net realized gain (1.80) -- -- -- -- ---------- ---------- ---------- ---------- ---------- Total distributions (1.87) (0.08) (0.28) (0.07) (0.07) ---------- ---------- ---------- ---------- ---------- Net asset value, end of year $ 20.25 $ 24.79 $ 21.51 $ 19.03 $ 16.58 ========== ========== ========== ========== ========== Total return (11.75%) 15.63% 14.54% 15.20% 8.72% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period $ 455.6 $ 465.7 $ 387.3 $ 325.4 $ 298.6 (millions) RATIO OF EXPENSES TO AVERAGE NET ASSETS: Before fees waived and expenses absorbed or recouped 1.41% 1.39% 1.49% 1.46% 1.49% After fees waived and expenses absorbed or recouped 1.41% 1.39% 1.49% 1.49% 1.50% RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS # 0.61% 0.37% 0.21% 0.52% 0.42% Portfolio turnover rate 62.96% 16.38% 43.47% 16.68% 19.50% # Net of fees waived. The accompanying notes are an integral part of these financial statements. 21
- -------------------------------------------------------------------------------- PURISIMA TOTAL RETURN FUND NOTES TO FINANCIAL STATEMENTS AUGUST 31, 2008 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 accompanying financial statements include the Total Return Fund (the "Fund"), which commenced operations on October 28, 1996, one of the two portfolios comprising the Trust. Fisher Asset Management, LLC (doing business as Fisher Investments) (the "Adviser") serves as the investment adviser to the Funds. The investment objective of the Total Return Fund is as follows: The Fund seeks a high total return. The Fund seeks to achieve its objective by investing in a portfolio allocated between domestic and foreign common stocks, fixed-income securities, money market instruments and other equity-type securities. The Fund's investments in different types of securities may vary significantly. NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its 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. If on a particular day, an exchange-listed security does not trade, then the mean between the bid and asked prices will be used. Foreign exchange traded equity securities are valued based upon the price on the exchange or market on which they trade as of the close of business of such market or exchange immediately preceding the time the Fund's net asset value is determined. Investments in securities traded on the NASDAQ Global Market, the NASDAQ Global Select Market and the NASDAQ Capital Market will be valued at the NASDAQ Official Closing Price ("NOCP"), 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 price. 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 amortized cost which, when combined with accrued interest, approximates market value. 22 - -------------------------------------------------------------------------------- B. FOREIGN CURRENCY TRANSLATION. The Fund's records are maintained in U.S. dollars. The value of securities, currencies and other assets and liabilities denominated in currencies other than U.S. dollars are translated into U.S. dollars based upon foreign exchange rates prevailing at the end of the reporting period. Purchases and sales of investment securities, income and expenses are translated on the respective dates of such transactions. The Fund does not isolate that portion of their net realized and unrealized gains and losses on investments resulting from changes in foreign exchange rates from the impact arising from changes in market prices. Such fluctuations are included with net realized and unrealized gain or loss from investments and foreign currency. Net realized foreign currency transaction gains and losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the differences between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency translation gains and losses arise from changes in the value of assets and liabilities, other than investments in securities, resulting from changes in the exchange rates. C. FEDERAL INCOME AND EXCISE TAXES. The Fund intends to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its income to its shareholders. Therefore, no federal income or excise tax provision is required. The Fund may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries as applicable based upon its current interpretations of the tax rules and regulation that exist in the markets in which it invests. On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" ("FIN 48"). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Fund's tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required as of the date of the last Net Asset Value ("NAV") calculation in the first required financial statement reporting period for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. The Fund adopted FIN 48 effective February 29, 2008. Management of the Fund has reviewed the tax positions for the fiscal years ending August 31, 2005 through 2008 and has determined that the adoption of FIN 48 did not have a material impact on the Fund's financial statements. 23 - -------------------------------------------------------------------------------- D. SECURITY TRANSACTIONS, INVESTMENT INCOME AND DISTRIBUTIONS. Security transactions are accounted for on 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. E. 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. F. 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. G. SECURITIES SOLD SHORT. To the extent the Fund engages in selling securities short, it is obligated to replace a security borrowed by purchasing the same security at the current market value. The Fund would incur a loss if the price of the security increases between the date of the short sale and the date on which the Fund replaces the borrowed security. The Fund would realize a gain if the price of the security declines between those dates. The Fund is 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 Fund 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. H. RECLASSIFICATION OF CAPITAL ACCOUNTS. Accounting principles generally accepted in the United States of America require that certain components of net assets relating to permanent difference be reclassified between financial and tax reporting. These reclassifications have no effect on net assets or net asset value per share. For the year ended August 31, 2008, the Total Return Fund increased accumulated undistributed net investment income by $1,734,271, decreased accumulated net realized gain on investments by $1,796,718, and increased paid-in capital by $62,447. I. INDEMNIFICATION OBLIGATIONS. Under the Fund's organizational documents, its current and former officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, in the normal course of business, the Fund enters into contracts that contain a variety of representations and warranties that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred or that would be covered by other parties. 24 - -------------------------------------------------------------------------------- J. LINE OF CREDIT. The Fund has a Loan Agreement with U.S. Bank N.A. Under the terms of the Loan Agreement, the Fund's borrowings cannot exceed the lesser of $8,000,000 or 33 1/3% of the net assets of the Fund. The interest rate paid on the Loan equals the prime rate per annum, payable monthly. Borrowing activity under the Loan Agreement for the year ended August 31, 2008, was as follows: MAXIMUM AMOUNT AVERAGE AVERAGE AMOUNT INTEREST OUTSTANDING AT AMOUNT INTEREST OUTSTANDING EXPENSE AUGUST 31, 2008 OUTSTANDING RATE - ----------- ------- --------------- ----------- ---- $ 454,000 $ 337 $ 0 $ 4,653 6.750% NOTE 3 - COMMITMENTS, OTHER RELATED PARTY TRANSACTIONS AND OTHER SERVICE PROVIDERS 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 Fund. 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 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 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 year ended August 31, 2008, the Adviser had previously recouped all fees previously waived and expenses absorbed from the Total Return Fund. U.S. Bank, N.A. serves as the Fund's Custodian. U.S. Bancorp Fund Services, LLC ("USBFS"), an affiliate of U.S. Bank, N.A., serves as the Administrator, Fund Accountant and Transfer Agent. Certain officers of the Trust, including the Trust's Treasurer, are employees of the Administrator. In its capacity as the Fund's Administrator, USBFS provides general fund management including corporate secretarial services, coordinates the preparation of materials for the Board of Trustees, assists with the annual audit of the Fund's financial statements, monitors the Fund's compliance with federal and state regulations as well as investment restrictions, coordinates the payment of Fund expenses and monitors expense accruals, prepares financial statements and non-investment related statistical data and makes required tax reporting calculations. During the year ended August 31, 2008, Purisima Total Return Fund paid USBFS $339,381 for services rendered in its capacity as the Trust's Administrator. 25 - -------------------------------------------------------------------------------- Quasar Distributors, LLC, an affiliate of U.S. Bank, N.A., and USBFS serves as principal underwriter of the Fund and acts as the Fund's distributor in a continuous public offering of the Fund's shares. 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 year ended August 31, 2008, the Fund incurred $895,404 in distribution fees. Quasar Distributors, LLC, an affiliate of the Administrator, serves as distributor of the Fund pursuant to a Distribution Agreement with the Trust. 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 year ended August 31, 2008 were as follows: FUND PURCHASES SALES ---- --------- ----- Total Return Fund $350,038,111 $298,801,980 NOTE 6 - FEDERAL INCOME TAX MATTERS 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. These differences are primarily attributable to the tax deferral of losses on wash sales, the realization for tax purposes of unrealized gains on passive foreign investment companies and return of capital distributions and income adjustments recognized for tax purposes on real estate investment trusts. 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 August 31, 2008, the components of distributable earnings on a tax basis were as follows: TOTAL RETURN ------------- Cost of investments for tax purposes $ 408,276,580 ============= Gross tax unrealized appreciation $ 88,671,810 Gross tax unrealized depreciation (39,842,551) ------------- Net tax unrealized appreciation 48,829,259 ------------- Undistributed ordinary income 2,197,327 Undistributed Long Term Capital Gains 6,295,144 ------------- Total distributable earnings 8,492,471 ------------- Other accumulated earnings (96,566) ------------- Total accumulated earnings $ 57,225,164 ============= 26 - -------------------------------------------------------------------------------- Under current tax law, capital losses realized after October 31 may be deferred and treated as occurring on the first day of the following fiscal year. At August 31, 2008, the Fund deferred, on a tax basis, $93,949 of Post-October losses. The tax composition of dividends are as follows: ORDINARY LONG TERM INCOME CAPITAL GAINS ------ ------------- Total Return Fund 8/31/2008 $ 1,298,261 $ 34,522,389 8/31/2007 $ 1,378,881 -- The Fund designated as long-term capital gain dividend, pursuant to Internal Revenue Code Section 852(b)(3), the amount necessary to reduce the earnings and profits of the Fund related to net capital gain to zero for the tax year ended August 31, 2008. NOTE 7 - RECENT ACCOUNTING PRONOUNCEMENTS In September, 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards ("SFAS") No. 157, "Fair Value Measurements", which will expand the disclosure requirements for fair value measurements. The new standard defines fair value as the price that would be received upon the sale of an asset or transfer of a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, this Statement also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) the reporting entity's own assumptions about marketing participant assumptions developed based on the best information available in the circumstances (unobservable inputs). SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and earlier adoption is permitted. (Management is currently evaluating the impact of adoption of SFAS No. 157 on its financial statements.) In March 2008, Statement of Financial Accounting Standards No. 161, "Disclosures about Derivative Instruments and Hedging Activities" ("SFAS 161") was issued and is effective for fiscal years beginning after November 15, 2008. SFAS 161 is intended to improve financial reporting for derivative instruments by requiring enhanced disclosure that enables investors to understand how and why an entity uses derivatives, how derivatives are accounted for, and how derivative instruments affect an entity's results of operation and financial position. Management is currently evaluating the implications of SFAS 161. The impact on the Fund's financial statement disclosures, if any, is currently being assessed. 27 This page is intentionally left blank. REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM TO THE SHAREHOLDERS AND BOARD OF TRUSTEES THE PURISIMA FUNDS WOODSIDE, CALIFORNIA We have audited the accompanying statement of assets and liabilities of the Purisima Total Return Fund, a series of The Purisima Funds (the "Trust"), including the schedule of investments as of August 31, 2008, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Trust is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trust's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of August 31, 2008, by correspondence with the custodian and brokers or by other auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly in all material respects, the financial position of the Purisima Total Return Fund as of August 31, 2008, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. TAIT, WELLER & BAKER LLP Philadelphia, Pennsylvania October 29, 2008 29 - -------------------------------------------------------------------------------- PURISIMA TOTAL RETURN FUND OTHER INFORMATION PROXY VOTING PROCEDURES (UNAUDITED) 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 1-800-841-0199. This information is also available through the Securities and Exchange Commission's website at http://www.sec.gov. Information regarding how the Fund voted proxies relating to the portfolio securities during the most recent 12-month period ended June 30 is available without charge, upon request, by calling toll-free 1-800-841-0199. This information is also available through the Securities and Exchange Commission's website at http://www.sec.gov. FORM N-Q DISCLOSURE (UNAUDITED) The Fund files its complete schedule of portfolio holdings with the SEC for the first and third fiscal quarters on Form N-Q. The Fund's Form N-Q is 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. TAX NOTICE (UNAUDITED) For the fiscal year ended August 31, 2008, certain dividends paid by the Fund may be subject to a maximum tax rate of 15%, as provided by the Jobs and Growth Tax Relief Reconciliation Act of 2003. The Fund designates 100% of dividends declared from ordinary income as qualified dividend income. 30 - -------------------------------------------------------------------------------- (UNAUDITED) The percentage of dividend income distributed for the year ended August 31, 2008 designated as qualified dividends received deduction available to corporate shareholders is 94.4% for the Total Return Fund. For the year ended August 31, 2008, the Total Return Fund earned foreign source income and paid foreign taxes, which they intend to pass through to their shareholders pursuant to Section 853 of the Internal Revenue Code as follows: GROSS DIVIDENDS TAXES WITHHELD --------------- -------------- Australia 110,104.00 -- Brazil 195,724.55 20,156.55 Canada 160,744.97 24,111.75 Chile 865.02 -- China 18,647.54 859.08 Czech 7,450.32 1,117.55 Denmark 6,767.93 1,015.19 France 937,842.27 208,952.56 Finland 223,827.58 33,574.14 Germany 1,027,733.78 212,834.12 Hong Kong 234,648.03 5,364.00 India 25,451.63 3,112.34 Indonesia 62,733.70 9,410.05 Italy 462,420.02 123,579.26 Israel 2,777.36 458.27 Japan 748,798.31 83,928.90 Luxembourg 6,717.50 95.63 Malaysia 27,533.05 3,418.97 Mexico 114,372.61 -- Netherlands 460,708.16 71,288.32 Netherlands Antellies 96,197.50 -- Norway 23,418.60 3,512.79 Philippines 40,362.58 6,276.90 Poland 31,440.20 4,829.10 Portugal 2,517.90 377.69 Republic of Korea 92,517.36 14,447.41 Singapore 17,613.87 -- South Africa 13,359.83 86.00 Spain 629,846.82 112,860.28 Sweden 12,017.93 3,047.20 Switzerland 451,746.76 68,285.97 Taiwan 77,321.03 18,668.74 Turkey 5,898.81 -- 31 - -------------------------------------------------------------------------------- PURISIMA TOTAL RETURN FUND TRUSTEES AND OFFICER INFORMATION (UNAUDITED) The Board of Trustees is responsible for the overall management of the Trust's business. The Board of Trustees approves all significant agreements between the Trust and persons or companies furnishing services to it, including all agreements with the Adviser, Administrator, Custodian and Transfer Agent. The Board of Trustees delegates the day-to-day operations of the Trust to its Officers, subject to the Fund's investment objective and policies and to general supervision by the Board of Trustees. The Statement of Additional Information includes additional information about the Trust's Trustees and is available, without charge, by calling 1-800-841-0199. The Trustees and Officers of the Trust, their business addresses and principal occupations during the past five years are: Name, Address, Position(s) Held Date of Birth with Trust Year Elected(1) Kenneth L. Fisher* (born 1950) President and Trustee 1996 13100 Skyline Blvd. Woodside, CA 94062 - -------------------------------------------------------------------------------- Pierson E. Clair III (born 1948) Trustee 1996 13100 Skyline Blvd. Woodside, CA 94062 - -------------------------------------------------------------------------------- Scott LeFevre (born 1957) Trustee 2001 13100 Skyline Blvd. Woodside, CA 94062 - -------------------------------------------------------------------------------- Alfred D. McKelvy, Jr. (born 1948) Trustee 2003 13100 Skyline Blvd. Woodside, CA 94062: - -------------------------------------------------------------------------------- Bryan F. Morse (born 1952) Trustee 1996 13100 Skyline Blvd. Woodside, CA 94062 - -------------------------------------------------------------------------------- Grover T. Wickersham (born 1949) Trustee 1996 13100 Skyline Blvd. Woodside, CA 94062 - -------------------------------------------------------------------------------- 32 - -------------------------------------------------------------------------------- Number of Portfolios in Fund Complex Other Principal Occupation(s) Overseen by Directorships During Past Five Years Director Held - -------------------------------------------------------------------------------- Chief Executive Officer and majority 2 None shareholder of Fisher Investment, Inc., the sole 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 1979. - -------------------------------------------------------------------------------- President and Chief Executive Officer of 2 Signature Brown & Haley since 1998 (fine confectioners); Foods, Inc. Vice President of Blummer Chocolate Company from 1980 to 1997, where he had been employed since 1970. - -------------------------------------------------------------------------------- Sole proprietor of LeFevre Capital 2 None Management, a registered investment adviser. - -------------------------------------------------------------------------------- Executive Director of the law firm of 2 Bay BOMA; Berding & Weil, LLP since 1990. BOMA California; Heritage Bank (Advisory Board). - -------------------------------------------------------------------------------- Sole proprietor of Bryan F. Morse, RIA, 2 None a registered investment adviser since 1990. - -------------------------------------------------------------------------------- Attorney in private practice in Palo Alto, 2 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. - -------------------------------------------------------------------------------- 33 - -------------------------------------------------------------------------------- Position(s) Held Name, Address, Age with Trust Year Elected(1) - -------------------------------------------------------------------------------- Tom Fishel (born 1960) Chief 2005 13100 Skyline Blvd. Compliance Woodside, CA 94062 Officer - -------------------------------------------------------------------------------- Keith Shintani (born 1963) Secretary and 2006 2020 East Financial Way Assistant Glendora, CA 91741 Treasurer - -------------------------------------------------------------------------------- Michael Ricks (born 1977) Treasurer 2006 2020 East Financial Way Glendora, CA 91741 - -------------------------------------------------------------------------------- - ---------- (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. 34 - -------------------------------------------------------------------------------- Number of Portfolios in Fund Complex Other Principal Occupation(s) Overseen by Directorships During Past Five Years Director Held - -------------------------------------------------------------------------------- Vice President and Chief Compliance N/A None Officer of the Adviser. Vice President of Charles Schwab & Co., Inc. from 1995 to 2004, where he had been employed since 1983. - -------------------------------------------------------------------------------- Vice President of U.S. Bancorp Fund N/A None Services, LLC and its predecessor, Investment Company Administration, LLC since 1998. - -------------------------------------------------------------------------------- Assistant Vice President of U.S. Bancorp Fund N/A None Services, LLC since 2001. - -------------------------------------------------------------------------------- 35 - -------------------------------------------------------------------------------- PRIVACY NOTICE FISHER ASSET MANAGEMENT, LLC (doing business as Fisher Investments) and THE PURISIMA FUNDS 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 or others. We are committed to protecting your privacy and your non-public personal information. We do not sell or market your non-public personal information to unaffiliated organizations. We maintain physical, electronic and procedural safeguards to guard your non-public personal information. We hold our employees to strict standards of conduct regarding confidentiality, and employees who violate our Privacy Policy are subject to disciplinary process. We restrict access to your information to those employees who need to know that information to carry out their duties. We do not disclose any non-public personal information about our clients or former clients without the client's authorization, except as permitted by law. We may disclose the non-public information we collect to employees and affiliates, and unaffiliated third parties as permitted by law. Third parties may include law enforcement agencies, government and regulatory authorities, and professionals such as our legal counsel and auditors, and we may disclose information for reasons such as audit purposes, prevention of fraud or money laundering, protection of confidentiality, compliance with laws, and to provide agreed upon products and services to you. Third parties may also include service providers performing financial services for us (such as brokers and custodians) and service providers performing non-financial services for us (such as third parties performing computer related or data maintenance, marketing or other services for us or to assist us in offering our products and services to you). It is our policy to require all third party service providers that will receive information to sign strict confidentiality agreements agreeing to safeguard such information and use it only for the purpose it was provided. 36 This page is intentionally left blank. The Purisima Funds - -------------------------------------------------------------------------------- Annual Report August 31, 2008 The Purisima All-Purpose Fund - -------------------------------------------------------------------------------- A LETTER TO OUR SHAREHOLDERS Welcome to the annual report for the Purisima All-Purpose Fund for the twelve-month period ending August 31, 2008. The Fund seeks to provide protection against declines in the value of the U.S. and foreign equity markets. During the period, the Fund was primarily invested in US government securities. Thank you for your continued interest and support. Sincerely, /s/ KENNETH L. FISHER - ---------------------- 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. FUND HOLDINGS AND SECTOR ALLOCATIONS ARE SUBJECT TO CHANGE AND ARE NOT RECOMMENDATIONS TO BUY OR SELL ANY SECURITY. MUTUAL FUND INVESTING INVOLVES RISK. PRINCIPAL LOSS IS POSSIBLE. THE FUND MAY USE SHORT SALES OF SECURITIES, WHICH INVOLVE THE RISK THAT LOSSES MAY EXCEED THE ORIGINAL AMOUNT INVESTED. THE FUND MAY ALSO USE OPTIONS AND FUTURES CONTRACTS, WHICH HAVE THE RISKS OF UNLIMITED LOSSES OF THE UNDERLYING HOLDINGS DUE TO UNANTICIPATED MARKET MOVEMENTS AND FAILURE TO CORRECTLY PREDICT THE DIRECTION OF SECURITIES PRICES, INTEREST RATES AND CURRENCY EXCHANGE RATES. THE FUND MAY INVEST IN FOREIGN SECURITIES WHICH INVOLVE GREATER VOLATILITY AND POLITICAL, ECONOMIC AND CURRENCY RISKS AND DIFFERENCES IN ACCOUNTING METHODS. THE FUND MAY INVEST IN DEBT SECURITIES WHICH TYPICALLY DECREASE IN VALUE WHEN INTEREST RATES RISE. THIS RISK IS GREATER FOR LONGER-TERM DEBT SECURITIES. THE FUND IS NON-DIVERSIFIED, MEANING IT MAY CONCENTRATE ITS ASSETS IN FEWER INDIVIDUAL HOLDINGS THAN A DIVERSIFIED FUND. THEREFORE, THE FUND IS MORE EXPOSED TO INDIVIDUAL STOCK VOLATILITY THAN A DIVERSIFIED FUND. AN INVESTMENT IN THE FUND IS NOT SUITABLE FOR ALL INVESTORS. THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY A PROSPECTUS. FISHER INVESTMENTS IS THE ADVISER TO THE PURISIMA FUNDS. THE PURISIMA FUNDS ARE DISTRIBUTED BY QUASAR DISTRIBUTORS, LLC. 10/08 - -------------------------------------------------------------------------------- PERFORMANCE SUMMARY FOR YEAR ENDED AUGUST 31, 2008 PURISIMA ALL-PURPOSE FUND GROWTH OF $10,000. PURISIMA ALL-PURPOSE FUND CUMULATIVE TOTAL RETURN VERSES MERRILL LYNCH U.S. TREASURY BILLS 0-3 MONTHS INDEX $10,000 INVESTED FROM FUND INCEPTION ON 11/01/05 TO 8/31/08 * MONTH PURISIMA ALL-PURPOSE FUND MERRILL LYNCH U.S. TREASURY BILLS PURISIMA ALL-PURPOSE FUND 0-3 MONTHS INDEX - ---------- ------------------------- ---------------- 11/1/2005 10,000 10,000 2/28/2006 10,160 10,129 5/31/2006 10,351 10,247 8/31/2006 10,562 10,375 11/30/2006 10,743 10,507 2/28/2007 10,908 10,637 5/31/2007 11,103 10,780 8/31/2007 11,330 10,924 11/30/2007 11,481 11,050 2/29/2008 11,692 11,154 5/31/2008 11,749 11,194 8/31/2008 11,818 11,251
ONE-YEAR ONE-YEAR Average Annual Total Return(2)** 4.31% Average Annual Total Return(2)** 2.99% SINCE INCEPTION (11/01/2005) SINCE FUND INCEPTION (11/01/2005) Cumulative Total Return1** 18.18% Cumulative Total Return1** 12.50% Average Annual Total Return(2)** 6.08% Average Annual Total Return(2)** 4.25%
PLEASE NOTE PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. SHARE PRICE AND RETURN WILL FLUCTUATE, AND INVESTORS MAY EXPERIENCE A GAIN OR LOSS WHEN THEY SELL THEIR SHARES. TO OBTAIN A PROSPECTUS ON THE PURISIMA FUNDS PLEASE CALL 1-800-841-0199. THE PROSPECTUS CONTAINS MORE INFORMATION, INCLUDING THE POLITICAL, ECONOMIC, CURRENCY RISKS AND POTENTIAL VOLATILITY OF FOREIGN INVESTING. READ THE PROSPECTUS CAREFULLY BEFORE INVESTING. 1. Cumulative total return measures the change in value of an investment over the periods indicated and reflects all fund fees and expenses. 2. Average annual total return represents the average annual change in value of an investment over the periods indicated and reflects all fund fees and expenses. Average annual total return and cumulative total return for the one-year period would be identical. * The Merrill Lynch US Treasury Bills 0-3 Months Index is an unmanaged index of Treasury securities that assumes reinvestment of all income. ** The total returns shown do not reflect the deduction of taxes a shareholder would pay on fund distributions or redemption of fund shares. The total return reflects the rate an investment would have earned (or lost) on an investment in the Fund, assuming reinvestment of all dividends and distributions. -2- SECTOR BREAKDOWN(1) (Unaudited) PURISIMA ALL-PURPOSE FUND - -------------------------------------------------------------------------------- U.S. Treasury Obligations 86.2% Mutual Funds 13.8% - -------------------------------------------------------------------------------- Total 100.0% (1)Percentage of Total Investments as of August 31, 2008. -3- IMPORTANT INFORMATION The following disclosure provides important information regarding the Fund's Expense Example. Please refer to this information when reviewing the Expense Example for the Fund. EXPENSE EXAMPLE (UNAUDITED) As a shareholder of the Fund, you incur two types of costs: (1) transaction costs; and (2) ongoing costs, i n cluding management fees; and other fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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 March 1, 2008 to August 31, 2008 for the Purisima All-Purpose Fund. 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 Fund's actual expense ratios and assumed rates of return of 5% per year before expenses, which are not the Fund's 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 Fund 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), or redemption fees. Therefore, the n i formation 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. -4- EXPENSE EXAMPLE (UNAUDITED) PURISIMA ALL-PURPOSE FUND ACUTAL HYPOTHETICAL PERFORMANCE (Inception date: 11/01/2005) PERFORMANCE (5% RETURN BEFORE EXPENSES) - -------------------------------------------------------------------------------- Beginning Account Value (03/01/08) $1,000.00 $1,000.00 Ending Account Value (08/31/08) $1,010.80 $1,017.60 Expenses Paid During Period(1) $7.58 $7.61 - -------------------------------------------------------------------------------- (1) Expenses are equal to the Fund's expense ratio for the four month period of 1.50% for the Purisima All-Purpose Fund multiplied by the average account value over the period, multiplied by 184/366 (to reflect the four month period). -5- SCHEDULE OF INVESTMENTS AUGUST 31, 2008 PRINCIPAL AMOUNT VALUE - -------------------------------------------------------------------------------- U.S. TREASURY BILLS: 84.4% 25,000 1.772%, 10/09/2008 TOTAL U.S. TREASURY BILLS (COST $24,952) $ 24,952 --------- U.S. TREASURY NOTES: 33.9% 10,000 4.875%, 08/31/2008 TOTAL U.S. TREASURY NOTES (COST $10,000) 10,000 --------- SHARES - ------ MUTUAL FUNDS: 18.9% 5,577 SEI Daily Income Trust Government Fund 5,577 --------- TOTAL MUTUAL FUNDS (COST $5,577) TOTAL INVESTMENTS (COST $40,529): 137.2% $ 40,529 LIABILITIES IN EXCESS OF OTHER ASSETS: (37.2)% (10,990) --------- TOTAL NET ASSETS: 100.0% $ 29,539 ========= The accompanying notes are an integral part of these financial statements. -6-
PURISIMA ALL-PURPOSE FUND STATEMENT OF ASSETS AND LIABILITIES AUGUST 31, 2008 ================================================================================ ALL-PURPOSE FUND ---------------- ASSETS Investments in securities, at cost $ 40,529 ============ Investments in securities, at value $ 40,529 Receivables: Dividends and interest 273 Due from Adviser (Note 3) 16,523 Prepaid expenses 16,547 ------------ Total Assets 73,872 ------------ LIABILITIES Accrued administration fees (Note 3) 3,262 Accrued transfer agent fees 404 Accrued audit fees 33,540 Accrued fund accounting fees 5,197 Accrued reports to shareholders 505 Other accrued expenses 1,425 ------------ Total Liabilities 44,333 ------------ NET ASSETS $ 29,539 ============ Number of shares issued and outstanding (unlimited shares authorized, $0.01 par value) 2,877 ============ NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE $ 10.27 ============ COMPONENTS OF NET ASSETS Paid-in capital $ 28,764 Accumulated net investment income 767 Accumulated net realized gain on investments 8 ------------ Net assets $ 29,539 ============ THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
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PURISIMA ALL-PURPOSE FUND STATEMENT OF OPERATIONS FOR THE YEAR ENDED AUGUST 31, 2008 ================================================================================ ALL-PURPOSE FUND ----------- INVESTMENT INCOME Income Interest $ 1,725 --------- Total income 1,725 --------- Expenses Advisory fees 291 Administration fees 39,559 Transfer agent fees 13,730 Fund accounting fees 29,947 Custody fees 2,992 Reports to shareholders 3,302 Registration fees 12,691 Audit fees 20,328 Legal fees 35 Trustee fees 22,176 Miscellaneous 289 --------- Total expenses 145,340 Less: Reimbursement by Adviser (Note 3) (144,904) --------- Net expenses 436 --------- NET INVESTMENT INCOME 1,289 --------- REALIZED AND UNREALIZED GAIN ON INVESTMENTS Net realized gain on investments 9 Change in net unrealized appreciation on investments (96) --------- Net loss on investments (87) --------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 1,202 ========= THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
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PURISIMA ALL-PURPOSE FUND STATEMENT OF CHANGES IN NET ASSETS ================================================================================ YEAR ENDED YEAR ENDED AUGUST 31, 2008 AUGUST 31, 2007 --------------- --------------- DECREASE IN NET ASSETS FROM: OPERATIONS Net investment income $ 1,289 $ 1,820 Net realized gain on investments 9 5 Change in net unrealized appreciation on investments (96) 96 -------- -------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 1,202 1,921 -------- -------- DISTRIBUTION TO SHAREHOLDERS From net investment income (1,717) (1,899) -------- -------- TOTAL DISTRIBUTIONS TO SHAREHOLDERS (1,717) (1,899) -------- -------- CAPITAL SHARE TRANSACTIONS Net increase in net assets derived from net change in outstanding shares (a) 1,717 1,899 -------- -------- TOTAL INCREASE IN NET ASSETS 1,202 1,921 -------- -------- NET ASSETS Beginning of period 28,337 26,416 -------- -------- END OF PERIOD $ 29,539 $ 28,337 ======== ======== Undistributed net investment income $ 767 $ 1,195 ======== ======== (a) A summary of capital share transactions is as follows: YEAR ENDED YEAR ENDED AUGUST 31, 2008 AUGUST 31, 2007 --------------- ----------------- SHARES VALUE SHARES VALUE ------ ----- ------ ----- Shares sold -- $ -- -- $ -- Shares issued on reinvestment of distributions 172 1,717 190 1,899 Shares redeemed -- -- -- -- ------ ------ ------ ------ Net increase 172 $1,717 190 $1,899 ====== ====== ====== ====== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
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PURISIMA ALL-PURPOSE FUND 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 ANNUAL REPORT. FOR THE FOR THE NOVEMBER 1, 2005^ YEAR ENDED YEAR ENDED THRU AUGUST 31, 2008 AUGUST 31, 2007 AUGUST 31, 2006 --------------- --------------- --------------- Net asset value, beginning of period $ 10.47 $ 10.50 $ 10.00 ------- ------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.46 0.69 0.56 Net realized and unrealized gain (loss) on investments (0.03) 0.04 0.00 ------- ------- ------- Total from investment operations 0.43 0.73 0.56 ------- ------- ------- LESS DISTRIBUTIONS: From net investment income (0.63) (0.76) (0.06) ------- ------- ------- Total distributions (0.63) (0.76) (0.06) ------- ------- ------- Net asset value, end of period $ 10.27 $ 10.47 $ 10.50 ======= ======= ======= Total return 4.31% 7.27% 5.62%** RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $ 29.5 $ 28.3 $ 26.4 RATIO OF EXPENSES TO AVERAGE NET ASSETS: Before fees waived 500.20% 545.57% 620.25%* After fees waived 1.50% 1.50% 1.50%* RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS # 4.44% 6.66% 6.71%* Portfolio turnover rate 0.00% 0.00% 0.00%** # Net of fees waived. * Annualized. ** Not annualized. ^ Commencement of operations. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
-10- PURISIMA ALL-PURPOSE FUND NOTES TO FINANCIAL STATEMENTS AUGUST 31, 2008 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 a series. Each series represents a distinct portfolio with its own investment objectives and policies. The accompanying financial statements n i clude the Purisima All-Purpose Fund (the "Fund"), a non-diversified fund which commenced operations on November 1, 2005. The Fund is one of the two portfolios comprising the Trust. Fisher Asset Management, LLC (doing business as Fisher Investments) (the "Adviser") serves as the investment adviser to the Fund. The investment objective of the Purisima All-Purpose Fund is as follows: The Fund seeks to provide protection against declines in the value of the U.S. and foreign equity markets. It invests in derivative securities, money market instruments and other securities, including U.S. and foreign common stocks, and fixed income securities. NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of the 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. If on a particular day, an exchange-listed security does not trade, then the mean between the bid and asked prices will be used. Foreign exchange traded equity securities are valued based upon the price on the exchange or market on which they trade as of the close of business of such market or exchange immediately preceding the time the Fund's net asset value is determined. Investments in securities traded on the NASDAQ Global Market, the NASDAQ Global Select Market and the NASDAQ Capital Market will be valued at the NASDAQ Official Closing Price ("NOCP"), 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 price. 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 amortized cost which, when combined with accrued interest, approximates market value. -11- PURISIMA ALL-PURPOSE FUND B. FOREIGN CURRENCY TRANSLATION. The Fund's records are maintained in U.S. dollars. The value of securities, currencies and other assets and liabilities denominated in currencies other than U.S. dollars are translated into U.S. dollars based upon foreign exchange rates prevailing at the end of the reporting period. Purchases and sales of investment securities, income and expenses are translated on the respective dates of such transactions. The Fund does not isolate that portion of their net realized and unrealized gains and losses on investments resulting from changes in foreign exchange rates from the impact arising from changes in market prices. Such fluctuations are included with net realized and unrealized gain or loss from investments and foreign currency. Net realized foreign currency transaction gains and losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the differences between the amounts of dividends, interest, and f o reign withholding taxes recorded on the Fund books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency translation gains and losses arise from changes in the value of assets and liabilities, other than investments in securities, resulting from changes in the exchange rates. C. FEDERAL INCOME AND EXCISE TAXES. The Fund has elected to be taxed as a "regulated i nv estment company" and intends to distribute substantially all taxable income to its shareholders and otherwise comply with the provisions of the Internal Revenue Code applicable to regulated investment companies. Therefore, no federal income or excise tax provision is required. In order to avoid imposition of the excise tax applicable to regulated investment companies, the Fund intends to declare each year as dividends in each calendar year at least 98% of its net investment income (earned during the calendar year) and 98% of its net realized capital gains (earned during the twelve months ended October 31) plus undistributed amounts, if any, from prior years. The Fund may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries as applicable based upon its current interpretations of the tax rules and regulation t h at exist in the markets in which it invests. On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" ("FIN 48"). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions t a ken or expected to be taken in the course of preparing the Fund's tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required as of t h e date of the last Net Asset Value ("NAV") calculation in the first required financial -12- PURISIMA ALL-PURPOSE FUND statement reporting period for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. The Fund adopted FIN 48 effective February 29, 2008. Management of the Fund has reviewed the tax positions for the fiscal years ending August 31, 2005 through 2008 and has determined that the adoption of FIN 48 did not have a material impact on the Fund's financial statements. D. 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. E. 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. F. 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 l o cal tax law considerations, and limited regulation of the securities markets. G. 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 i f the option was 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 Fund may purchase options which are n i cluded in the Fund's Schedules of Investments and subsequently marked to market to reflect the current value of the option. At August 31, 2008, the Fund had no options outstanding. -13- PURISIMA ALL-PURPOSE FUND H. SECURITIES SOLD SHORT. To the extent the Fund engages in selling securities short, they are obligated to replace a security borrowed by purchasing the same security at the current market value. The Fund would incur a loss if the price of the security increases between the date of the short sale and the date on which the Fund replaces the borrowed security. The Fund would realize a gain if the price of the security declines between those dates. The Fund is 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 Fund 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. I. INDEMNIFICATION OBLIGATIONS. Under the Fund's organizational documents, its current and former officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, in the normal course of business, the Fund enters into contracts that contain a variety of representations and warranties that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred or that would be covered by other parties. NOTE 3 - COMMITMENTS, OTHER RELATED PARTY TRANSACTIONS AND OTHER SERVICE PROVIDERS 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 h t e personnel needed by the Fund. 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 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 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 year ended August 31, 2008, the Fund paid the Adviser $291. As of August 31, 2008, the Adviser has reimbursed the Fund $144,904 to limit its total expenses to not more than 1.50% of the average daily net assets. -14- PURISIMA ALL-PURPOSE FUND At August 31, 2008 the Adviser may recapture a portion of the following amounts that have been paid and/or waived on behalf of the Fund no later than the date as stated below: FUND AUGUST 31, 2009 AUGUST 31, 2010 AUGUST 31, 2011 - -------------------------------------------------------------------------------- Purisima All-Purpose Fund $ 131,092 $ 148,574 $ 144,904 U.S. Bank, N.A. serves as the Fund's Custodian. U.S. Bancorp Fund Services, LLC ("USBFS"), an affiliate of U.S. Bank, N.A., serves as the Administrator, Fund Accountant and Transfer Agent. Certain officers of the Trust, including the Trust's Treasurer, are employees of the Administrator. In its capacity as the Fund's Administrator, USBFS provides general fund management including corporate secretarial services, coordinates the preparation of materials for the Board of Trustees, assists with the annual audit of the Fund's financial statements, monitors the Fund's compliance with federal and state regulations as well as investment restrictions, coordinates the payment of Fund expenses and monitors expense accruals, prepares financial statements and non-investment related statistical data and makes required tax reporting calculations. During the year ended August 31, 2008, Purisima All-Purpose Fund paid USBFS $39,559 for services rendered in its capacity as the Fund's Administrator. Quasar Distributors, LLC, an affiliate of U.S. Bank, N.A., and USBFS serves as principal underwriter of the Fund and acts as the Fund's distributor, pursuant to a Distribution Agreement with the Trust, in a continuous public offering of the Fund's shares. 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 Fund is authorized to pay expenses incurred for the purpose of distribution activities, including the engagement 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 year ended August 31, 2008, the Fund did not utilize the Plan. NOTE 5 - INVESTMENT TRANSACTIONS The cost of purchases and the proceeds from sales of securities, excluding short-term investments, for the year ended August 31, 2008, were as follows: FUND PURCHASES SALES - -------------------------------------------------------------------------------- Purisima All-Purpose Fund $ 0 $ 0 NOTE 6 - FEDERAL INCOME TAX MATTERS The difference between the book and tax basis components of the distributable earnings relates principally to the timing of recognition of income and gains for federal income tax purposes. These differences, if any, are primarily attributable to the tax deferral of losses on wash sales, the realization of r tax purposes of unrealized gains on passive foreign investment companies and return of capital distributions and income adjustments recognized for tax purposes on real estate investment trusts. Short-term gains distributions reported in the Statements of Changes of Net Assets, if any, are reported as ordinary income for federal tax purposes. -15- PURISIMA ALL-PURPOSE FUND As of August 31, 2008, the components of distributable earnings on a tax basis were as follows: All-Purpose ----------- Cost of investments for tax purposes $ 40,529 ======== Gross tax unrealized appreciation $ -- Gross tax unrealized depreciation $ -- -------- Net tax unrealized appreciation $ -- Undistributed ordinary income $ 776 Other accumulated losses * $ (1) -------- Total accumulated earnings (losses) $ 775 ======== The tax compositions of dividends are as follows: Ordinary Long Term Income Capital Gains ------ ------------- Purisima All-Purpose Fund 8/31/2008 $1,717 -- 8/31/2007 $1,899 -- * Under current tax law capital losses realized after October 31 and prior to the Fund's fiscal year end may be deferred as occurring on the first day of the following fiscal year. NOTE 7 - RECENT ACCOUNTING PRONOUNCEMENTS In September, 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards ("SFAS") No. 157, "Fair Value Measurements", which will expand the disclosure requirements for fair value measurements. The new standard defines fair value as the price that would be received upon the sale of an asset or transfer of a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, this Statement also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) the reporting entity's own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and earlier adoption is permitted. Management is currently evaluating the impact of adoption of SFAS No. 157 on its financial statements. -16- PURISIMA ALL-PURPOSE FUND In March 2008, Statement of Financial Accounting Standards No. 161, "Disclosures about Derivative Instruments and Hedge Activities" ("SFAS 161") was issued and is effective for fiscal years beginning after November 15, 2008. SFAS 161 is intended to improve financial reporting for derivative instruments by requiring enhanced disclosure that enables investors to understand how and why an entity uses derivatives, how derivatives are accounted for, and how derivative instruments affect an entity's results of operation and financial position. Management is currently evaluating the implications of SFAS 161. The impact on the Fund's financial statement disclosures, if any, is currently being assessed. -17- REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM TO THE SHAREHOLDERS AND BOARD OF TRUSTEES THE PURISIMA FUNDS WOODSIDE, CALIFORNIA We have audited the accompanying statement of assets and liabilities of the Purisima All-Purpose Fund, a series of The Purisima Funds (the "Trust"), including the schedule of investments as of August 31, 2008, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the two years in the period then ended and for the period November 1, 2005 (commencement of operations) to August 31, 2006. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Trust is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for t h e purpose of expressing an opinion on the effectiveness of the Trust's internal control over financial reporting. Accordingly, we express no such opinion. An audit also n i cludes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of August 31, 2008, by correspondence with the custodian. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Purisima All-Purpose Fund as of August 31, 2008, the results of its operations, the changes in its net assets, and the financial highlights for the periods indicated above, in conformity with accounting principles generally accepted in the United States of America. TAIT, WELLER & BAKER LLP PHILADELPHIA, PENNSYLVANIA OCTOBER 29, 2008 -18- OTHER INFORMATION - PROXY VOTING PROCEDURES (UNAUDITED) 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 1-800-841-0199. This information is also available through the Securities and Exchange Commission's website at http://www.sec.gov. Information regarding how the Fund voted proxies relating to the portfolio securities during the most recent 12-month period ended June 30 is available without charge, upon request, by calling t o ll-free 1-800-841-0199. This information is also available through the Securities and Exchange Commission's website at HTTP://WWW.SEC.GOV. FORM N-Q DISCLOSURE (UNAUDITED) The Fund files its complete schedule of portfolio holdings with the SEC for the first and third fiscal quarters on Form N-Q. The Fund's Form N-Q is 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. TAX NOTICE (UNAUDITED) Additional Information applicable to foreign shareholders only: The percentage of income distributed for the year ended August 31, 2008, designated qualified interest income under Internal Revenue Code Section 871(k)(1)(C), is 100% for the Fund. -19- TRUSTEES AND OFFICER INFORMATION (Unaudited) The Board of Trustees is responsible for the overall management of the Trust's business. The Board of Trustees approves all significant agreements between the Trust and persons or companies furnishing services to it, including all agreements with the Adviser, Administrator, Custodian and Transfer Agent. The Board of Trustees delegates the day-to-day operations of the Trust to its Officers, subject to the Fund's investment objective and policies and to general supervision by the Board of Trustees. The Statement of Additional Information includes additional information about the Trust's Trustees and is available, without charge, by calling 1-800-841-0199. The Trustees and Officers of the Trust, their business addresses and principal occupations during the past five years are:
NUMBER OF PORTFOLIOS IN FUND COMPLEX OTHER NAME, ADDRESS, POSITION(S) HELD YEAR PRINCIPAL OCCUPATION(S) OVERSEEN BY DIRECTORSHIPS DATE OF BIRTH WITH TRUST ELECTED(1) DURING PAST FIVE YEARS DIRECTOR HELD - ------------------------------------------------------------------------------------------------------------------------------------ Kenneth L. Fisher* President 1996 Chief Executive Officer and majority 2 NONE (born 1950) and Trustee shareholder of Fisher Investments, Inc., 13100 Skyline Blvd. the sole shareholder of the Adviser, Woodside, CA 94062 and has served insuch 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 1979. Pierson E. Clair III Trustee 1996 President and Chief Executive Officer 2 Signature (born 1948) of Brown & Haley since 1998 (fine Foods, Inc. 13100 Skyline Blvd. confectioners); Vice President of Blummer Woodside, CA 94062 Chocolate Company from 1980 to 1997, where he had been employed since 1970. Scott LeFevre Trustee 2001 Sole proprietor of LeFevre Capital 2 NONE (born 1957) Management, a registered investment 13100 Skyline Blvd. adviser. Woodside, CA 94062 Alfred D. McKelvy, Jr. Trustee 2003 Executive Director of the law firm of 2 East Bay (born 1948) Berding & Weil, LLP since 1990. BOMA; BOMA 13100 Skyline Blvd. California; Woodside, CA 94062: Heritage Bank (Advisory Board). Bryan F. Morse Trustee 1996 Sole Bryan F.Morse,RIA, a proprietor of 2 NONE (born 1952) registered investment adviser since 13100 Skyline Blvd. 1990. Woodside, CA 94062 Grover T. Wickersham Trustee 1996 Attorney in private practice in Palo Alto, 2 NONE (born 1949) California. Prior to entering private 13100 Skyline Blvd. practice in June of 1981, served as a Branch Woodside, CA 94062 Chief of the Los Angeles Regional Office of the U.S. Securities and Exchange Commission. Tom Fishel Chief Compliance 2005 Vice President and Chief Compliance Officer N/A NONE (born 1960) Officer of the Adviser. Vice President of Charles Schwab 13100 Skyline Blvd. & Co., Inc. from 1995 to 2004, where he had Woodside, CA 94062 been employed since 1983. Keith Shintani Secretary and 2006 Vice President of U.S. Bancorp Fund Services, N/A NONE (born 1963) Assistant LLC and its predecessor, Investment Company 2020 East Financial Way Treasurer Administration, LLC since 1998. Glendora, CA 91741 - ----------------- (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. -22- NUMBER OF PORTFOLIOS IN FUND COMPLEX OTHER NAME, ADDRESS, POSITION(S) HELD YEAR PRINCIPAL OCCUPATION(S) OVERSEEN BY DIRECTORSHIPS DATE OF BIRTH WITH TRUST ELECTED(1) DURING PAST FIVE YEARS DIRECTOR HELD - ------------------------------------------------------------------------------------------------------------------------------------ Michael Ricks (born Treasurer 2006 Assistant Vice President of U.S. Bancorp Fund N/A None 1977) Services, LLC since 2001. 2020 East Financial Way Glendora, CA 91741 (2) Trustees and officers of the Funds serve until their resignation, removal or retirement.
-21- PRIVACY NOTICE Fisher Asset Management, LLC (doing business as Fisher Investments) and the Purisima Funds 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 or others. We are committed to protecting your privacy and your non-public personal information. We do not sell or market your non-public personal information to unaffiliated organizations. We maintain physical, electronic and procedural safeguards to guard your non-public personal information. We hold our employees to strict standards of conduct regarding confidentiality, and employees who violate our Privacy Policy are subject to disciplinary process. We restrict access to your information to those employees who need to know that information to carry out their duties. We do not disclose any non-public personal information about our clients or former clients without the client's authorization, except as permitted by law. We may disclose t h e non-public information we collect to employees and affiliates, and unaffiliated third parties as permitted by law. Third parties may include law enforcement agencies, government and regulatory authorities, and professionals such as our legal counsel and auditors, and we may disclose information for reasons such as audit purposes, prevention of fraud or money laundering, protection of confidentiality, compliance with laws, and to provide agreed upon products and services to you. Third parties may also include service providers performing financial services for us (such as brokers and custodians) and service providers performing non-financial services for us (such as third parties performing computer related or data maintenance, marketing or other services for us or to assist us in offering our products and services to you). It is our policy to require all third party service providers that will receive information to sign strict confidentiality agreements agreeing to safeguard such information and use it only for the purpose it was provided. -22- ITEM 2. CODE OF ETHICS. The registrant has adopted a code of ethics that applies to the registrant's principal executive officer and principal financial officer. The registrant has not made any amendments to its code of ethics during the period covered by this report. The registrant has not granted any waivers from any provisions of the code of ethics during the period covered by this report. The registrant undertakes to provide to any person without charge, upon request, a copy of its code of ethics by mail when they call the registrant at 1-800-851-8845. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. The registrant's board of trustees has determined that it does not have an audit committee financial expert serving on its audit committee. At this time, the registrant believes that the experience provided by each member of the audit committee together offers the registrant adequate oversight for the registrant's level of financial complexity.] ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. The registrant has engaged its principal accountant to perform audit services, audit-related services, tax services and other services during the past two fiscal years. "Audit services" refer to performing an audit of the registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years. "Audit-related services" refer to the assurance and related services by the principal accountant that are reasonably related to the performance of the audit. "Tax services" refer to professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning. There were no "Other services" provided by the principal accountant . The following table details the aggregate fees billed or expected to be billed for each of the last two fiscal years for audit fees, audit-related fees, tax fees and other fees by the principal accountant. - ----------------------------- ----------------------- ----------------------- FYE 8/31/2008 FYE 8/31/2007 - ----------------------------- ----------------------- ----------------------- Audit Fees $36,000 $34,000 Audit-Related Fees - - Tax Fees $6,000 $6,000 All Other Fees - - - ----------------------------- ----------------------- ----------------------- The audit committee has adopted pre-approval policies and procedures that require the audit committee to pre-approve all audit and non-audit services of the registrant, including services provided to any entity affiliated with the registrant. The percentage of fees billed by TAIT, WELLER AND BAKER LLP applicable to non-audit services pursuant to waiver of pre-approval requirement were as follows: - ----------------------------- ----------------------- ----------------------- FYE 12/31/2008 FYE 12/31/2007 - ----------------------------- ----------------------- ----------------------- Audit-Related Fees 0% 0% Tax Fees 0% 0% All Other Fees 0% 0% - ----------------------------- ----------------------- ----------------------- All of the principal accountant's hours spent on auditing the registrant's financial statements were attributed to work performed by full-time permanent employees of the principal accountant. The following table indicates the non-audit fees billed or expected to be billed by the registrant's accountant for services to the registrant and to the registrant's investment adviser (and any other controlling entity, etc.--not sub-adviser) for the last two years. The audit committee of the board of trustees has considered whether the provision of non-audit services that were rendered to the registrant's investment adviser is compatible with maintaining the principal accountant's independence and has concluded that the provision of such non-audit services by the accountant has not compromised the accountant's independence. - ------------------------------------ ------------------------ ------------------ Non-Audit Related Fees FYE 12/31/2008 FYE 12/31/2007 - ------------------------------------ ------------------------ ------------------ Registrant - - Registrant's Investment Adviser - - - ------------------------------------ ------------------------ ------------------ ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable to registrants who are not listed issuers (as defined in Rule 10A-3 under the Securities Exchange Act of 1934). ITEM 6. INVESTMENTS. (a) Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this Form. (b) Not applicable. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable 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 PURCHASERS. 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 and Treasurer have reviewed the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the "Act")) as of a date within 90 days of the filing of this report, as required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934. Based on their review, such officers have concluded that the disclosure controls and procedures are effective in ensuring that information required to be disclosed in this report is appropriately recorded, processed, summarized and reported and made known to them by others within the Registrant and by the Registrant's service provider. (b) There were no changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) 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. ITEM 12. EXHIBITS. (a) (1) Incorporated by reference to the Registrant's Form N-CSR filed November 10, 2003. (2) A SEPARATE CERTIFICATION FOR EACH PRINCIPAL EXECUTIVE AND PRINCIPAL FINANCIAL OFFICER 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) CERTIFICATIONS 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 /s/ KENNETH L FISHER ---------------------------------------------- Kenneth L. Fisher, President Date 11/07/08 ------------------------------------------- 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 /S/ KENNETH L. FISHER --------------------------------------------- Kenneth L. Fisher, President Date 11/7/08 ------------------------------------------- By /S/ MICHAEL RICKS --------------------------------------------- Michael Ricks, Treasurer Date 11/7/08 -------------------------------------------- EX-99.CERT 2 cert99.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) 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 trustees (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: 11/7/08 /S/ KENNETH L. FISHER ---------------------------- ---------------------------------- Kenneth L. Fisher President CERTIFICATIONS I, Michael Ricks, 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) 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 trustees (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: 11/7/08 /S/ MICHAEL RICKS ---------------------------- ---------------------------------- Michael Ricks Treasurer EX-99.906CERT 3 cert906.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 year ended August 31, 2008 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/ MICHAEL RICKS - ------------------------------ -------------------------------------- Kenneth L. Fisher Michael Ricks President, The Purisima Funds Treasurer, The Purisima Funds Dated: 11/7/08 -------------------- 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 The Purisima Funds for purposes of Section 18 of the Securities Exchange Act of 1934. -----END PRIVACY-ENHANCED MESSAGE-----