-----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, FVN8xpDcAyni9MjKYgtw9rrcIZUkcnc7EhfCgAkyJJwgDV+tSLKflEbgB/qh4KUB Dx2s38Ocix7LgajKWmZ0Rg== 0000935069-07-001363.txt : 20070607 0000935069-07-001363.hdr.sgml : 20070607 20070607144940 ACCESSION NUMBER: 0000935069-07-001363 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20070331 FILED AS OF DATE: 20070607 DATE AS OF CHANGE: 20070607 EFFECTIVENESS DATE: 20070607 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CNI CHARTER FUNDS CENTRAL INDEX KEY: 0001026977 IRS NUMBER: 911766001 STATE OF INCORPORATION: DE FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-07923 FILM NUMBER: 07906620 BUSINESS ADDRESS: STREET 1: 650 CALIFORNIA ST STREET 2: STE 2800 CITY: SAN FRANCISCO STATE: CA ZIP: 94108 BUSINESS PHONE: 4153930300 MAIL ADDRESS: STREET 1: 650 CALIFORNIA ST STREET 2: SUITE 2800 CITY: SAN FRANCISCO STATE: CA ZIP: 94108 FORMER COMPANY: FORMER CONFORMED NAME: BERKELEY FUNDS TRUST DATE OF NAME CHANGE: 19980319 FORMER COMPANY: FORMER CONFORMED NAME: BERKELEY CAPITAL MANAGEMENT FUNDS DATE OF NAME CHANGE: 19961113 0001026977 S000005827 CNI CHARTER LARGE CAP GROWTH EQUITY FUND C000015985 CNI CHARTER LARGE CAP GROWTH EQUITY FUND - CLASS A CLEAX C000015986 CNI CHARTER LARGE CAP GROWTH EQUITY FUND - INSTITUTIONAL CNGIX 0001026977 S000005828 CNI CHARTER HIGH YIELD BOND FUND C000015987 CNI CHARTER HIGH YIELD BOND FUND - CLASS A CHBAX C000015988 CNI CHARTER HIGH YIELD BOND FUND - INSTITUTIONAL CHYIX 0001026977 S000005829 CNI LARGE CAP VALUE EQUITY FUND C000015989 CNI LARGE CAP VALUE EQUITY FUND - CLASS A CVEAX C000015990 CNI LARGE CAP VALUE EQUITY FUND - INSTITUTIONAL CNLIX 0001026977 S000005830 CNI CHARTER TECHNOLOGY GROWTH FUND C000015991 CNI CHARTER TECHNOLOGY GROWTH FUND - CLASS A CTGAX C000015992 CNI CHARTER TECHNOLOGY GROWTH FUND - INSTITUTIONAL CTEIX 0001026977 S000005831 CNI CHARTER RCB SMALL CAP VALUE FUND C000015993 CNI CHARTER RCB SMALL CAP VALUE FUND - CLASS A RCBAX C000015994 CNI CHARTER RCB SMALL CAP VALUE FUND - INSTITUTIONAL RCBIX C000015995 CNI CHARTER RCB SMALL CAP VALUE FUND - CLASS R RCBSX 0001026977 S000005832 CNI CHARTER PRIME MONEY MARKET FUND C000015996 CNI CHARTER PRIME MONEY MARKET FUND - CLASS A CNPXX C000015997 CNI CHARTER PRIME MONEY MARKET FUND - INSTITUTIONAL CNMXX C000015998 CNI CHARTER PRIME MONEY MARKET FUND - CLASS S CNSXX 0001026977 S000005833 CNI CHARTER GOVERNMENT MONEY MARKET FUND C000015999 CNI CHARTER GOVERNMENT MONEY MARKET FUND - CLASS A CNGXX C000016000 CNI CHARTER GOVERNMENT MONEY MARKET FUND - INSTITUTIONAL CNIXX C000016001 CNI CHARTER GOVERNMENT MONEY MARKET FUND - CLASS S CNFXX 0001026977 S000005834 CNI CHARTER CALIFORNIA TAX EXEMPT MONEY MARKET FUND C000016002 CNI CHARTER CALIFORNIA TAX EXEMPT MONEY MARKET FUND - CLASS A CNEXX C000016003 CNI CHARTER CALIFORNIA TAX EXEMPT MONEY MARKET FUND - INSTITUTIONAL CNTXX C000016004 CNI CHARTER CALIFORNIA TAX EXEMPT MONEY MARKET FUND - CLASS S CEMXX 0001026977 S000005835 CNI CHARTER CALIFORNIA TAX - EXEMPT BOND FUND C000016005 CNI CHARTER CALIFORNIA TAX - EXEMPT BOND FUND - CLASS A CCTEX C000016006 CNI CHARTER CALIFORNIA TAX - EXEMPT BOND FUND - INSTITUTIONAL CNTIX 0001026977 S000005836 CNI CHARTER CORPORATE BOND FUND C000016007 CNI CHARTER CORPORATE BOND FUND - CLASS A CCBAX C000016008 CNI CHARTER CORPORATE BOND FUND - INSTITUTIONAL CNCIX 0001026977 S000005837 CNI CHARTER GOVERNMENT BOND FUND C000016009 CNI CHARTER GOVERNMENT BOND FUND - CLASS A CGBAX C000016010 CNI CHARTER GOVERNMENT BOND FUND - INSTITUTIONAL CNBIX N-CSRS 1 cniisarcombined3_07.txt CNI COMBED FI 3_07 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 811-07923 CNI CHARTER FUNDS (Exact name of registrant as specified in charter) -------- 400 North Roxbury Drive Beverly Hills, CA 90210 (Address of principal executive offices) (Zip code) SEI Investments Distributors 1 Freedom Valley Drive Oaks, PA 19456 (Name and address of agent for service) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 1-888-889-0799 DATE OF FISCAL YEAR END: SEPTEMBER 30, 2007 DATE OF REPORTING PERIOD: MARCH 31, 2007 ITEM 1. REPORTS TO STOCKHOLDERS. [BACKGROUND GRAPHIC OMITTED] CNI CHARTER FUNDS [LOGO OMITTED] Investment Manager: CITY NATIONAL ASSET MANAGEMENT, INC. Semi-Annual Report March 31, 2007 Large Cap Value Equity Fund Large Cap Growth Equity Fund RCB Small Cap Value Fund Technology Growth Fund Corporate Bond Fund Government Bond Fund California Tax Exempt Bond Fund High Yield Bond Fund Prime Money Market Fund Government Money Market Fund California Tax Exempt Money Market Fund This report and the financial statements contained herein are provided for the general information of the shareholders of the CNI Charter Funds. This report is not authorized for distribution to prospective investors in the CNI Charter Funds unless preceded or accompanied by an effective prospectus. Please remember that past performance is no guarantee of future results. Shares of CNI Charter Funds are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC or any other agency and involve investment risks, including the possible loss of the principal amount invested. TABLE OF CONTENTS CNI Charter Funds Semi-Annual Report 2 Letter to Our Shareholders 4 Equity Funds Investment Adviser's Report 5 Fixed Income Funds Investment Adviser's Report 6 Schedules of Investments 44 Statements of Assets & Liabilities 47 Statements of Operations 50 Statements of Changes in Net Assets 54 Financial Highlights 57 Notes to Financial Statements 64 Disclosure of Fund Expenses 66 Proxy Voting Results 67 Approval of Investment Advisory Agreements - -------------------------------------------------------------------------------- The Funds file their complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q within sixty days after the end of the period. The Funds' Form N-Q is available on the Commission's website at http://www.sec.gov, and may be reviewed and copied at the Commission's Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The most current Form N-Q is also available on the Fund's website at www.cnicharterfunds.com and without charge, upon request, by calling 1-888-889-0799. A description of the policies and procedures that the Funds use to determine how to vote proxies relating to the Funds' portfolio securities, and information on how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ending June 30 is available (1) without charge, upon request, by calling 1-888-889-0799, (2) on the Funds' website at www.cnicharterfunds.com, and (3) on the Securities and Exchange Commission's website at www.sec.gov. CNI CHARTER FUNDS | PAGE 1 letter to our shareholders MARCH 31, 2007 - -------------------------------------------------------------------------------- We are pleased to provide you with the CNI Charter Funds Semi-Annual Report for the six months ended March 31, 2007, a period in which the global economic recovery of the last five years evidenced signs of slowing. Despite this deceleration however, the financial markets continued to produce solid gains for most shareholders. The underlying investment philosophy of CNI Charter Funds is to pursue the long-term goals and objectives specified for each of the Funds without being swayed by short-term trends and fads. All Funds are managed with an active yet disciplined style that seeks to achieve competitive rates of return consistent with their respective, prescribed risk parameters. City National Asset Management, Inc., as Investment Manager to the Funds, utilizes in-depth research that takes advantage of the most advanced investment technology, fundamental valuation, and quantitative tools to determine the most attractive sectors and securities within each Fund's area of concentration. This approach has served shareholders well overall during the complex economic, financial, and geopolitical environment we encountered in the six months ended March 31, 2007. SIX-MONTH MARKET WATCH: OCTOBER 2006 - MARCH 2007 The six months ended March 31, 2007 produced strong gains in most equity markets, both domestically and internationally. Small capitalization stocks continued to outperform larger capitalization issues during the first half of this period, but lagged during the last three months. (Please refer to table that follows.) Fixed income securities, as measured by the Lehman Aggregate and Citigroup High Yield Indices also showed healthy, albeit single digit, gains for the period overall. - -------------------------------------------------------------------------------- Six-Month October 2006 - Index Watch: March 2007 EQUITIES: - --------- S&P 500 Stock Index............................................. + 7.4% Dow Jones Industrials........................................... + 7.0% NASDAQ.......................................................... + 7.6% Russell 2000 Value Index........................................ +10.6% MSCI EAFE Index................................................. +14.9% BONDS: - ------ Lehman Aggregate Bond Index..................................... + 2.8% Citigroup High Yield Index...................................... + 6.9% - -------------------------------------------------------------------------------- The economic recovery began to show signs of slowing and the consensus now expects to see a continuation of the deceleration throughout the rest of this year. Corporate profit growth, in particular, is expected to slow significantly this year, down to a rate of 5% - 7% relative to last year's torrid 18% growth pace. On the plus side -- inflation is widely expected to slow to 2% this coming year. The Federal Open Market Committee made several subtle, but important changes in the text of its monthly statements leading the market to increase the probability of rate decreases down the road. Apparently economic growth, or the lack thereof, has now become equal in priority to the goal inflation containment, in the eyes of the Fed. The major foreign economies (and their associated equity markets) have continued to be the real stars over the last six months, highlighting once again the wisdom of international diversification. Interest rates remained fairly steady throughout this six-month period despite all of the intervening economic and geopolitical turmoil. The U.S. Treasury yield curve remains inverted leading many to keep the bulk of their fixed income investments shorter-term, and therefore higher yielding, at least for now. The U.S. Dollar continued to post marginal losses against most major foreign currencies due to a combination of a large Federal Budget deficit, a large CNI CHARTER FUNDS | PAGE 2 - -------------------------------------------------------------------------------- and growing trade deficit, unfavorable interest rate differentials, and slowing economic growth. SIX-MONTH WATCH: CNI CHARTER FUNDS PERFORMANCE (ALL RETURNS LISTED BELOW ARE FOR INSTITUTIONAL CLASS SHARES) By adhering to our basic investment discipline and maintaining the appropriate amount of risk control in the various portfolios, the Funds continue to provide returns that are competitive in their respective investment arenas. All of the equity-oriented Funds showed strong returns during the six-month period. Leading the pack was the 16.6% gain in the RCB SMALL CAP VALUE FUND. Following close behind was the 9.7% return to the LARGE CAP VALUE EQUITY FUND. The LARGE CAP GROWTH EQUITY FUND rose 5.5%, while the TECHNOLOGY GROWTH FUND gained 4.9% during the six-month period. Returns to the four bond-oriented Funds were mixed with the HIGH YIELD BOND FUND leading the group with a 6.5% gain for the period. The GOVERNMENT BOND FUND returned 2.6%, the CORPORATE BOND FUND returned 2.5%, and the CALIFORNIA TAX EXEMPT BOND FUND followed closely with a 1.1% gain for the six-month period. Lastly, all three Money Market Funds continued to turn in competitive yields for the six months ending March 31, 2007. Both the PRIME MONEY MARKET and the GOVERNMENT MONEY MARKET FUNDS gained 2.4% during the previous six-months, comparable to longer-term bond portfolios. The CALIFORNIA TAX EXEMPT MONEY MARKET FUND rose 1.5%. The following pages contain important information and details on the assets and financial condition of the Funds. Please read them carefully and if you have any questions about this report or CNI Charter Funds, please call your investment professional or contact us at (888) 889-0799. Thank you for choosing CNI Charter Funds. Sincerely, /s/ Richard A. Weiss Richard A. Weiss PRESIDENT CITY NATIONAL ASSET MANAGEMENT, INC. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. CERTAIN SHAREHOLDERS MAY BE SUBJECT TO THE ALTERNATIVE MINIMUM TAX (AMT). FEDERAL INCOME TAX RULES APPLY TO ANY CAPITAL GAIN DISTRIBUTIONS. FUND EXPENSES HAVE BEEN WAIVED DURING THE PERIOD ON WHICH THE PERFORMANCE IS BASED. WITHOUT WAIVERS, PERFORMANCE WOULD BE LOWER. THIS INFORMATION MUST BE PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS. PLEASE READ THE PROSPECTUS CAREFULLY BEFORE INVESTING. INVESTING IN MUTUAL FUNDS INVOLVES RISK, INCLUDING POSSIBLE LOSS OF PRINCIPAL. IN ADDITIONAL TO THE NORMAL RISKS ASSOCIATED WITH INVESTING, INVESTMENTS IN SMALLER COMPANIES TYPICALLY EXHIBIT HIGHER VOLATILITY, AND PRODUCTS OF COMPANIES IN WHICH TECHNOLOGY FUNDS INVEST MAY BE SUBJECT TO SEVERE COMPETITION AND RAPID OBSOLESCENCE. AN INVESTMENT IN THE FUNDS IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. - -------------------------------------------------------------------------------- *NOT FDIC INSURED *NO BANK GUARANTEE *MAY LOSE VALUE - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- AHA Investment Funds, a series of the CNI Charter Funds - -------------------------------------------------------------------------------- Endorsed by the American Hospital Association, the five AHA Investment Funds encourage healthy behavior by having guidelines that prohibit investment in any tobacco-related securities.
The five AHA Funds in the CNI Charter Fund family are: [] AHA Limited Maturity Fixed Income Fund [] AHA Diversified Equity Fund [] AHA Full Maturity Fixed Income Fund [] AHA Socially Responsible Equity Fund [] AHA Balanced Fund
These Funds together with the other eleven CNI Charter Funds provide an unwavering commitment to client satisfaction and quality investments that help successful individuals, families and businesses achieve their financial goals. For more information about the CNI Charter Funds (including the AHA Investment Funds) visit www.cnicharterfunds.com. CNI CHARTER FUNDS | PAGE 3 investment adviser's report MARCH 31, 2007 - -------------------------------------------------------------------------------- EQUITY FUNDS The equity market, as measured by the S&P 500, returned 7.4% over the six months ending March 31, 2007. Investors experienced a smooth and orderly increase in equity prices over most of this time period. Prices dropped in late February and into early March due to a sharp decline in the Chinese equity market. This brief bearish period soon dissipated and the market proceeded higher as the first quarter of 2007 came to a close. During this time period, mid and small cap stocks outperformed large with returns of 13.2% and 11.3%, respectively (as measured by the S&P MidCap 400 and S&P SmallCap 600.) In general, value indices outperformed growth indices with the S&P MidCap 400/Citigroup Value index gaining 14.0%. In general, value indices outperformed growth indices. All of the CNI Charter equity funds produced positive returns over this six month period. ALL RETURNS FOR CNI CHARTER FUNDS STATED BELOW ARE FOR INSTITUTIONAL CLASS SHARES: o The RCB SMALL CAP VALUE FUND returned 16.6%. This performance beat the Russell 2000 Value Index return of 10.6% and the Lipper Small Cap Value Funds Classification of 11.3%. o The LARGE CAP VALUE EQUITY FUND returned 9.7%. This performance beat the S&P 500/Citigroup Value Index return of 9.2% and the Lipper Large Cap Value Funds Classification return of 7.9%. o The LARGE CAP GROWTH EQUITY FUND returned 5.5%. This performance essentially met the S&P 500/Citigroup Growth Index return of 5.6% but lagged the Lipper Large Cap Growth Funds Classification return of 6.4%. o The TECHNOLOGY GROWTH FUND returned 4.9%. This performance trailed the Russell 3000 Technology Index return of 5.2% and the Lipper Science & Technology Funds Objective return of 7.2%. All shares of the Technology Growth Fund have been transferred into shares of the Large Cap Growth Fund on April 16, 2007. LOOKING FORWARD The economy is expected to continue slowing, but not contract. The Federal Reserve Bank, ("Fed") has kept short-term rates constant since last raising them back in June 2006. Most expect the Fed to eventually lower rates as inflation has declined from 2006 levels and economic growth becomes more of a concern. Overall, the equity "bull" market continues from its March 2003 lows. Earnings yields on equities remain attractive relative to fixed income securities. There appears to be a good deal of support in the market as more and more public companies are being purchased by private equity firms. Corporate earnings will be watched closely as companies navigate the slowing economy. The CNI Charter Equity Funds continue to provide a disciplined investment approach with the constant goal of achieving superior investment results. Sincerely, /s/ Brian L. Garbe Brian L. Garbe DIRECTOR OF RESEARCH CNI CHARTER FUNDS | PAGE 4 investment adviser's report MARCH 31, 2007 - -------------------------------------------------------------------------------- FIXED INCOME FUNDS Interest rates were nearly unchanged in the six-month period ending March 31, 2007 as investors mulled over the direction the economy will take in the coming quarters. The U.S. economy continued to show signs of further deceleration as the second quarter began to unfold. First-quarter GDP estimates point to slower growth and economists continue to shave their projections. The consensus forecast for annualized GDP growth for the first quarter is now below 2%, down from earlier estimates and well below the 2006 rate of 3.3%. Increases in sub-prime mortgage defaults and foreclosures threatened to delay the housing sector's recovery, raising the prospects of a prolonged economic slowdown. We are not expecting a recession, but we do expect GDP growth to slow below trend (under a 2.5%-3.5% annual rate.) At March's FOMC meeting, the Federal Reserve Bank ("Fed") dropped its previous "firming" language and moved to a DE FACTO neutral policy stance. This raised the threshold in terms of what it would take to get the Fed to resume the tightening campaign that the central bank halted last June with overnight borrowing rates at 5.25%. The Fed's new stance also gave it more flexibility and opened the door for a possible rate reduction if the economy slows further and/or core inflation recedes in coming months. STRATEGIC OUTLOOK FOR BOND FUNDS In light of the decelerating economic landscape and a higher probability of a Fed ease in rates later in the year, we have been extending our average maturities to our investment grade bond funds to protect against future reinvestment risk. Strategically, in the CORPORATE BOND FUND, we've increased our exposure to the intermediate maturity area as we extended our average maturity of the Fund. We are maintaining a higher average quality posture than the Lehman Intermediate Corporate Index in this decelerating economy. The GOVERNMENT BOND FUND continues to benefit from attractive yields offered by agency securities versus Treasuries. We are utilizing U.S. Government Agency issue mortgages to capture higher yields without taking on credit risk. The CALIFORNIA TAX EXEMPT BOND FUND, similar to our taxable funds, maintains a slightly longer maturity profile than its benchmark while keeping credit quality high. This positioning should continue to be rewarded, given the demand for California municipal bond paper and the possibility of reinvestment risk as rates decline in the coming quarters. Even though this economic expansion cycle is decelerating, the HIGH YIELD BOND FUND continued to benefit from historically narrow yield spreads. This fund retains its strategic posture of excellent sector allocation as well as a quality bias versus its competitors. STRATEGIC OUTLOOK FOR MONEY MARKET FUNDS Our outlook for our investment grade strategies will be to further extend our average maturities on market weakness if the economic picture continues to soften and inflation does not rise from current levels. Sincerely, /s/ Rodney J. Olea Rodney J. Olea DIRECTOR OF FIXED INCOME CITY NATIONAL ASSET MANAGEMENT, INC. CNI CHARTER FUNDS | PAGE 5 schedule of investments MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- LARGE CAP VALUE EQUITY FUND [Bar Graph Omitted] Percentages are as follows: SECTOR WEIGHTINGS*: 31.7% Financials 11.8% Industrials 9.5% Information Technology 9.3% Consumer Discretionary 7.0% Telecommunication 6.7% Healthcare 6.3% Energy 6.2% Utilities 4.9% Consumer Staples 4.2% Materials 2.4% Short-Term Investments *Percentages based on total investments. - ----------------------------------------------------------------- DESCRIPTION SHARES VALUE (000) - ----------------------------------------------------------------- COMMON STOCK [97.9%] AEROSPACE & DEFENSE [4.3%] Goodrich 16,400 $ 844 Honeywell International 21,200 977 Lockheed Martin 13,000 1,261 Northrop Grumman 17,000 1,262 Raytheon 15,200 797 ------------------------------------------------------------ TOTAL AEROSPACE & DEFENSE 5,141 ============================================================ AIR FREIGHT & LOGISTICS [0.6%] FedEx 6,800 730 ============================================================ BEVERAGES [2.0%] Coca-Cola 27,100 1,301 Coca-Cola Enterprises 32,100 650 Molson Coors Brewing, Cl B 4,500 426 ------------------------------------------------------------ TOTAL BEVERAGES 2,377 ============================================================ CAPITAL MARKETS [6.0%] Bank of New York 11,600 470 Goldman Sachs Group 11,200 2,314 Lehman Brothers Holdings 15,000 1,051 Merrill Lynch 5,200 425 Morgan Stanley 27,000 2,127 State Street 11,200 725 ------------------------------------------------------------ TOTAL CAPITAL MARKETS 7,112 ============================================================ CHEMICAL [2.6%] Dow Chemical 36,000 1,651 DESCRIPTION SHARES VALUE (000) - ----------------------------------------------------------------- PPG Industries 14,000 $ 984 Rohm & Haas 8,600 445 ------------------------------------------------------------ TOTAL CHEMICAL 3,080 ============================================================ COMMERCIAL BANKS [7.4%] BB&T 14,500 595 Keycorp 10,400 390 PNC Financial Services Group 14,300 1,029 SunTrust Banks 6,300 523 US Bancorp 48,000 1,679 Wachovia 30,700 1,690 Wells Fargo 84,960 2,925 ------------------------------------------------------------ TOTAL COMMERCIAL BANKS 8,831 ============================================================ COMMERCIAL SERVICES & SUPPLIES [0.3%] Waste Management 11,600 399 ============================================================ COMMUNICATIONS EQUIPMENT [1.3%] Motorola 64,300 1,136 Qualcomm 9,800 418 ------------------------------------------------------------ TOTAL COMMUNICATIONS EQUIPMENT 1,554 ============================================================ COMPUTERS & PERIPHERALS [4.5%] Apple Computer* 7,300 678 Hewlett-Packard 68,700 2,758 IBM 19,900 1,876 ------------------------------------------------------------ TOTAL COMPUTERS & PERIPHERALS 5,312 ============================================================ CONSUMER FINANCE [0.5%] Capital One Financial 8,300 626 ============================================================ DIVERSIFIED FINANCIAL SERVICES [6.8%] Bank of America 75,896 3,872 CIT Group 14,500 768 Citigroup 67,786 3,480 ------------------------------------------------------------ TOTAL DIVERSIFIED FINANCIAL SERVICES 8,120 ============================================================ DIVERSIFIED TELECOMMUNICATION SERVICES [6.0%] AT&T 108,117 4,263 Verizon Communications 77,109 2,924 ------------------------------------------------------------ TOTAL DIVERSIFIED TELECOMMUNICATION SERVICES 7,187 ============================================================ SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 6 schedule of investments MARCH 31, 2007 (UNAUDITED) --------------------------------------------------------------------------- LARGE CAP VALUE EQUITY FUND (CONTINUED) DESCRIPTION SHARES VALUE (000) ------------------------------------------------------------ ELECTRIC UTILITIES [3.4%] Edison International 13,900 $ 683 Entergy 3,500 367 FirstEnergy 15,700 1,040 FPL Group 17,300 1,058 PPL 22,700 929 ------------------------------------------------------------ TOTAL ELECTRIC UTILITIES 4,077 ============================================================ FOOD & STAPLES RETAILING [1.7%] Costco Wholesale 16,200 872 Kroger 19,300 545 Safeway 16,000 587 ------------------------------------------------------------ TOTAL FOOD & STAPLES RETAILING 2,004 ============================================================ FOOD PRODUCTS [0.9%] Archer-Daniels-Midland 15,900 583 Tyson Foods 22,000 427 ------------------------------------------------------------ TOTAL FOOD PRODUCTS 1,010 ============================================================ HEALTH CARE PROVIDERS & SERVICES [2.3%] Aetna 22,100 968 Cigna 4,500 642 Health Management Associates, Cl A 27,000 293 McKesson 14,400 843 ------------------------------------------------------------ TOTAL HEALTH CARE PROVIDERS & SERVICES 2,746 ============================================================ HOTELS RESTAURANTS & LEISURE [0.7%] Starwood Hotels & Resorts Worldwide 13,000 843 ============================================================ HOUSEHOLD DURABLES [0.6%] Whirlpool 8,700 739 ============================================================ INDEPENDENT POWER PRODUCER/ENERGY TRADER [1.0%] Constellation Energy Group 13,400 1,165 ============================================================ INDUSTRIAL CONGLOMERATES [3.1%] General Electric 47,500 1,680 Tyco International 61,600 1,943 ------------------------------------------------------------ TOTAL INDUSTRIAL CONGLOMERATES 3,623 ============================================================ DESCRIPTION SHARES VALUE (000) ------------------------------------------------------------ INSURANCE [7.7%] ACE 17,800 $ 1,016 Aflac 18,800 885 American International Group 29,100 1,956 Chubb 27,100 1,400 Hartford Financial Services Group 12,300 1,176 Metlife 17,100 1,080 Progressive 33,500 731 Prudential Financial 9,700 875 ------------------------------------------------------------ TOTAL INSURANCE 9,119 ============================================================ INSURANCE [1.2%] Travelers 27,000 1,398 ============================================================ IT SERVICES [0.9%] Electronic Data Systems 39,900 1,104 ============================================================ LEISURE EQUIPMENT & PRODUCTS [0.4%] Mattel 18,500 510 ============================================================ LIFE SCIENCES TOOLS & SERVICES [0.5%] PerkinElmer 23,700 574 ============================================================ MACHINERY [1.4%] Caterpillar 18,600 1,247 Illinois Tool Works 7,000 361 ------------------------------------------------------------ TOTAL MACHINERY 1,608 ============================================================ MEDIA [4.8%] CBS, Cl B 25,750 788 Comcast, Cl A* 52,200 1,354 News Corp., Cl A 25,000 578 Time Warner 65,300 1,288 Walt Disney 47,900 1,649 ------------------------------------------------------------ TOTAL MEDIA 5,657 ============================================================ METALS & MINING [0.9%] Alcoa 31,300 1,061 ============================================================ MULTI-UTILITIES & UNREGULATED POWER [1.8%] Dominion Resources 4,900 435 PG&E 19,600 946 Sempra Energy 12,600 769 ------------------------------------------------------------ TOTAL MULTI-UTILITIES & UNREGULATED POWER 2,150 ============================================================ SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 7 schedule of investments MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- LARGE CAP VALUE EQUITY FUND (CONCLUDED) DESCRIPTION SHARES VALUE (000) - ----------------------------------------------------------------- MULTILINE RETAIL [1.9%] Federated Department Stores 23,400 $ 1,054 JC Penney 8,000 657 Target 9,000 534 ------------------------------------------------------------ TOTAL MULTILINE RETAIL 2,245 ============================================================ OFFICE ELECTRONICS [0.6%] Xerox* 43,500 735 ============================================================ OIL & GAS [6.3%] Chevron 26,140 1,933 ConocoPhillips 28,280 1,933 Exxon Mobil 13,100 988 Marathon Oil 14,800 1,463 Occidental Petroleum 24,400 1,203 ------------------------------------------------------------ TOTAL OIL & GAS 7,520 ============================================================ PAPER & FOREST PRODUCTS [0.8%] International Paper 24,500 892 ============================================================ PERSONAL PRODUCTS [0.4%] Alberto-Culver 20,000 458 ============================================================ PHARMACEUTICALS [3.9%] Abbott Laboratories 16,000 893 Bristol-Myers Squibb 66,400 1,843 Merck 22,000 972 Pfizer 37,000 934 ------------------------------------------------------------ TOTAL PHARMACEUTICALS 4,642 ============================================================ ROAD & RAIL [2.2%] CSX 31,400 1,257 Norfolk Southern 17,800 901 Ryder System 9,300 459 ------------------------------------------------------------ TOTAL ROAD & RAIL 2,617 ============================================================ SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT [2.2%] Analog Devices 17,000 586 Applied Materials 15,000 275 Micron Technology 20,000 242 Texas Instruments 50,000 1,505 ------------------------------------------------------------ TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 2,608 ============================================================ DESCRIPTION SHARES VALUE (000) ------------------------------------------------------------ SPECIALTY RETAIL [0.9%] Best Buy 5,700 $ 278 Gap 20,000 344 Officemax 8,500 448 ------------------------------------------------------------ TOTAL SPECIALTY RETAIL 1,070 ============================================================ THRIFTS & MORTGAGE FINANCE [2.2%] Fannie Mae 27,900 1,523 Washington Mutual 26,200 1,058 ------------------------------------------------------------ TOTAL THRIFTS & MORTGAGE FINANCE 2,581 ============================================================ WIRELESS TELECOMMUNICATION SERVICES [0.9%] Alltel 10,600 657 Sprint-Nextel 24,300 461 ------------------------------------------------------------ TOTAL WIRELESS TELECOMMUNICATION SERVICES 1,118 ============================================================ TOTAL COMMON STOCK (Cost $93,362) 116,343 ======================================================== CASH EQUIVALENTS [2.4%] Fidelity Institutional Domestic Money Market Portfolio, Cl I, 5.22%** 2,124,740 2,125 SEI Daily Income Trust, Prime Obligation Fund, Cl A, 5.33%** 773,457 773 ------------------------------------------------------------ TOTAL CASH EQUIVALENTS (Cost $2,898) 2,898 ======================================================== TOTAL INVESTMENTS [100.3%] (Cost $96,260) $119,241 ======================================================== PERCENTAGES ARE BASED ON NET ASSETS OF $118,930 ($ THOUSANDS). * NON-INCOME PRODUCING SECURITY ** RATE SHOWN IS THE 7-DAY EFFECTIVE YIELD AS OF MARCH 31, 2007. CL -- CLASS SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 8 schedule of investments MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- LARGE CAP GROWTH EQUITY FUND [Bar Graph Omitted] Percentages are as follows: SECTOR WEIGHTINGS*: 20.1% Information Technology 16.6% Healthcare 14.6% Consumer Staples 13.5% Energy 11.1% Consumer Discretionary 9.6% Financials 9.3% Industrial 2.2% Short-Term Investments 1.9% Materials 1.1% Utilities * Percentages based on total investments. - ----------------------------------------------------------------- DESCRIPTION SHARES VALUE (000) - ----------------------------------------------------------------- COMMON STOCK [98.1%] AEROSPACE & DEFENSE [2.0%] Boeing 3,300 $ 293 Honeywell International 11,000 507 L-3 Communications Holdings 2,500 219 ------------------------------------------------------------ TOTAL AEROSPACE & DEFENSE 1,019 ============================================================ AIR FREIGHT & LOGISTICS [0.8%] United Parcel Service, Cl B 5,700 400 ============================================================ BEVERAGES [3.3%] Coca-Cola 9,800 470 Pepsi Bottling Group 9,400 300 PepsiCo 14,500 922 ------------------------------------------------------------ TOTAL BEVERAGES 1,692 ============================================================ BIOTECHNOLOGY [4.5%] Amgen* 14,300 799 Biogen Idec* 3,700 164 Genzyme-General Division* 6,500 390 Gilead Sciences* 12,700 972 ------------------------------------------------------------ TOTAL BIOTECHNOLOGY 2,325 ============================================================ CAPITAL MARKETS [3.9%] Franklin Resources 2,100 254 Goldman Sachs Group 2,600 537 Lehman Brothers Holdings 4,800 336 Merrill Lynch 2,600 213 State Street 5,400 350 T Rowe Price Group 7,000 330 ------------------------------------------------------------ TOTAL CAPITAL MARKETS 2,020 ============================================================ DESCRIPTION SHARES VALUE (000) - ----------------------------------------------------------------- COMMERCIAL BANKS [0.5%] Synovus Financial 8,300 $ 268 ============================================================ COMMERCIAL SERVICES & SUPPLIES [1.0%] Robert Half International 8,400 311 RR Donnelley & Sons 6,300 230 ------------------------------------------------------------ TOTAL COMMERCIAL SERVICES & SUPPLIES 541 ============================================================ COMMUNICATIONS EQUIPMENT [1.4%] Qualcomm 17,000 725 ============================================================ COMPUTERS & PERIPHERALS [3.9%] Apple Computer* 8,100 753 Dell* 17,165 398 IBM 9,000 848 ------------------------------------------------------------ TOTAL COMPUTERS & PERIPHERALS 1,999 ============================================================ CONSUMER FINANCE [0.8%] Capital One Financial 1,800 136 SLM 6,400 262 ------------------------------------------------------------ TOTAL CONSUMER FINANCE 398 ============================================================ DIVERSIFIED FINANCIAL SERVICES [0.6%] Chicago Mercantile Exchange Holdings, Cl A 550 293 ============================================================ ELECTRIC UTILITIES [0.2%] Edison International 2,000 98 ============================================================ ENERGY EQUIPMENT & SERVICES [3.0%] Baker Hughes 6,200 410 BJ Services 14,100 394 Nabors Industries* 12,200 362 Transocean* 4,900 400 ------------------------------------------------------------ TOTAL ENERGY EQUIPMENT & SERVICES 1,566 ============================================================ FOOD & STAPLES RETAILING [5.1%] CVS 21,543 735 Sysco 16,100 545 Wal-Mart Stores 29,375 1,379 ------------------------------------------------------------ TOTAL FOOD & STAPLES RETAILING 2,659 ============================================================ SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 9 schedule of investments MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- LARGE CAP GROWTH EQUITY FUND (CONTINUED) DESCRIPTION SHARES VALUE (000) - ----------------------------------------------------------------- FOOD PRODUCTS [1.6%] Campbell Soup 5,200 $ 203 General Mills 4,300 250 Kellogg 7,400 381 ------------------------------------------------------------ TOTAL FOOD PRODUCTS 834 ============================================================ HEALTH CARE EQUIPMENT & SUPPLIES [3.8%] Bard (C.R.) 3,200 254 Stryker 12,800 849 Thermo Electron* 7,100 332 Zimmer Holdings* 6,200 530 ------------------------------------------------------------ TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 1,965 ============================================================ HEALTH CARE PROVIDERS & SERVICES [2.4%] Quest Diagnostics 5,400 269 UnitedHealth Group 18,700 991 ------------------------------------------------------------ TOTAL HEALTH CARE PROVIDERS & SERVICES 1,260 ============================================================ HEALTH CARE TECHNOLOGY [0.4%] IMS Health 7,500 222 ============================================================ HOTELS, RESTAURANTS & LEISURE [2.6%] Carnival 6,600 309 Starbucks* 19,500 612 Yum! Brands 7,400 427 ------------------------------------------------------------ TOTAL HOTELS, RESTAURANTS & LEISURE 1,348 ============================================================ HOUSEHOLD DURABLES [0.4%] Harman International Industries 2,200 211 ============================================================ HOUSEHOLD PRODUCTS [4.6%] Colgate-Palmolive 7,000 468 Procter & Gamble 26,302 1,661 Clorox 4,400 280 ------------------------------------------------------------ TOTAL HOUSEHOLD PRODUCTS 2,409 ============================================================ INDEPENDENT POWER PRODUCERS & ENERGY TRADERS [0.9%] AES* 6,000 129 TXU 5,200 333 ------------------------------------------------------------ TOTAL INDEPENDENT POWER PRODUCERS & ENERGY TRADERS 462 ============================================================ DESCRIPTION SHARES VALUE (000) - ----------------------------------------------------------------- INDUSTRIAL CONGLOMERATES [3.0%] 3M 6,000 $ 458 General Electric 31,075 1,099 ------------------------------------------------------------ TOTAL INDUSTRIAL CONGLOMERATES 1,557 ============================================================ INSURANCE [2.4%] Aflac 6,600 311 American International Group 11,500 773 Progressive 8,000 174 ------------------------------------------------------------ TOTAL INSURANCE 1,258 ============================================================ INTERNET SOFTWARE & SERVICES [4.2%] eBay* 26,800 888 Google, Cl A* 1,300 596 Yahoo!* 22,500 704 ------------------------------------------------------------ TOTAL INTERNET SOFTWARE & SERVICES 2,188 ============================================================ IT SERVICES [0.7%] First Data 7,100 191 Paychex 4,800 182 ------------------------------------------------------------ TOTAL IT SERVICES 373 ============================================================ MACHINERY [2.6%] Caterpillar 12,000 804 Danaher 7,600 543 ------------------------------------------------------------ TOTAL MACHINERY 1,347 ============================================================ MEDIA [2.6%] Comcast, Cl A* 12,150 315 DIRECTV Group* 12,000 277 McGraw-Hill 8,100 509 Time Warner 13,100 259 ------------------------------------------------------------ TOTAL MEDIA 1,360 ============================================================ METALS & MINING [1.5%] Freeport-McMoRan Copper & Gold, Cl B 4,400 291 Goldcorp 9,000 216 Nucor 4,200 274 ------------------------------------------------------------ TOTAL METALS & MINING 781 ============================================================ MULTILINE RETAIL [0.9%] Target 7,500 445 ============================================================ SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 10 schedule of investments MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- LARGE CAP GROWTH EQUITY FUND (CONCLUDED) DESCRIPTION SHARES VALUE (000) - ----------------------------------------------------------------- OIL & GAS [10.5%] Anadarko Petroleum 8,000 $ 344 Chevron 18,000 1,331 Exxon Mobil 32,000 2,414 Sunoco 6,700 472 XTO Energy 16,400 899 ------------------------------------------------------------ TOTAL OIL & GAS 5,460 ============================================================ PAPER & FOREST PRODUCTS [0.4%] International Paper 6,000 218 ============================================================ PHARMACEUTICALS [5.5%] Johnson & Johnson 25,164 1,516 Pfizer 26,400 667 Wyeth 13,850 693 ------------------------------------------------------------ TOTAL PHARMACEUTICALS 2,876 ============================================================ REAL ESTATE INVESTMENT TRUST [1.0%] Simon Property Group 4,700 523 ============================================================ SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT [3.4%] Applied Materials 13,200 242 Broadcom, Cl A* 11,850 380 Intel 12,350 236 Linear Technology 11,700 370 Texas Instruments 17,800 536 ------------------------------------------------------------ TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 1,764 ============================================================ SOFTWARE [6.6%] Adobe Systems* 6,100 254 Autodesk* 9,800 369 Citrix Systems* 7,100 227 Electronic Arts* 3,600 181 Microsoft 49,830 1,389 Oracle* 22,500 408 Symantec* 34,400 595 ------------------------------------------------------------ TOTAL SOFTWARE 3,423 ============================================================ SPECIALTY RETAIL [3.3%] Best Buy 3,500 171 Home Depot 12,000 441 Lowe's 17,600 554 Staples 11,500 297 TJX 8,600 232 ------------------------------------------------------------ TOTAL SPECIALTY RETAIL 1,695 ============================================================ DESCRIPTION SHARES VALUE (000) - ----------------------------------------------------------------- TEXTILES, APPAREL & LUXURY GOODS [1.4%] Coach* 14,000 $ 701 ============================================================ THRIFTS & MORTGAGE FINANCE [0.4%] Countrywide Financial 6,600 222 ============================================================ TOTAL COMMON STOCK (Cost $45,003) 50,905 ======================================================== CASH EQUIVALENTS [2.2%] Fidelity Institutional Domestic Money Market Portfolio, Cl I, 5.22%** 1,086,863 1,087 SEI Daily Income Trust, Prime Obligation Fund, Cl I, 5.33%** 59,502 60 ------------------------------------------------------------ TOTAL CASH EQUIVALENTS (Cost $1,147) 1,147 ======================================================== TOTAL INVESTMENTS [100.3%] (Cost $46,150) $52,052 ======================================================== PERCENTAGES ARE BASED ON NET ASSETS OF $51,912 ($ THOUSANDS). * NON-INCOME PRODUCING SECURITY ** RATE SHOWN IS THE 7-DAY EFFECTIVE YIELD AS OF MARCH 31, 2007. CL -- CLASS SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 11 schedule of investments MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- RCB SMALL CAP VALUE FUND [Bar Graph Omitted] Percentages are as follows: SECTOR WEIGHTINGS*: 27.6% Financials 24.0% Consumer Discretionary 13.6% Consumer Staples 12.2% Energy 6.7% Industrial 5.0% Materials 4.1% Information Technology 3.5% Short-Term Investments 1.9% Utilities 1.4% Healthcare * Percentages based on total investments. - ----------------------------------------------------------------- DESCRIPTION SHARES VALUE (000) - ----------------------------------------------------------------- COMMON STOCK [94.7%] AIR FREIGHT & LOGISTICS [2.0%] Pacer International* 50,000 $ 1,347 ============================================================ BROADCASTING & CABLE [8.8%] Cox Radio, Cl A* 130,450 1,780 Cumulus Media, Cl A* 286,000 2,683 Fisher Communications* 30,000 1,458 ------------------------------------------------------------ TOTAL BROADCASTING & CABLE 5,921 ============================================================ COMMERCIAL SERVICES [2.0%] Coinstar* 42,800 1,340 ============================================================ DIVERSIFIED METALS & MINING [2.4%] Compass Minerals International 48,400 1,616 ============================================================ UTILITIES [1.9%] Sierra Pacific Resources* 74,900 1,302 ============================================================ ELECTRICAL EQUIPMENT [2.2%] LoJack* 76,600 1,454 ============================================================ ENERGY EQUIPMENT & SERVICES [6.5%] Carbo Ceramics 36,000 1,676 Hanover Compressor* 120,500 2,681 ------------------------------------------------------------ TOTAL ENERGY EQUIPMENT & SERVICES 4,357 ============================================================ ENTERTAINMENT [5.0%] Lodgenet Entertainment* 109,500 3,364 ============================================================ FOOD, BEVERAGE & TOBACCO [4.2%] Ralcorp Holdings* 43,500 2,797 ============================================================ DESCRIPTION SHARES VALUE (000) - ----------------------------------------------------------------- HOUSEHOLD PRODUCTS [4.7%] Central Garden & Pet* 62,050 $ 917 Central Garden & Pet, Cl A* 153,900 2,262 ------------------------------------------------------------ TOTAL HOUSEHOLD PRODUCTS 3,179 ============================================================ INSURANCE [20.9%] Alleghany* 10,200 3,811 Conseco* 157,200 2,719 Hilb Rogal & Hobbs 31,925 1,566 Montpelier Re Holdings 140,000 2,428 White Mountains Insurance Group 6,200 3,512 ------------------------------------------------------------ TOTAL INSURANCE 14,036 ============================================================ MACHINERY [4.4%] Actuant, Cl A 26,600 1,351 IDEX 31,800 1,618 ------------------------------------------------------------ TOTAL MACHINERY 2,969 ============================================================ OIL & GAS [5.8%] Alpha Natural Resources* 97,500 1,524 Rosetta Resources* 114,200 2,346 ------------------------------------------------------------ TOTAL OIL & GAS 3,870 ============================================================ PREPACKAGING SOFTWARE [1.9%] PLATO Learning* 307,700 1,292 ============================================================ REAL ESTATE INVESTMENT TRUST [5.2%] Annaly Mortgage Management 225,100 3,484 ============================================================ RETAIL [11.0%] IHOP 27,170 1,594 Smart & Final* 144,600 3,148 Triarc, Cl B 154,400 2,654 ------------------------------------------------------------ TOTAL RETAIL 7,396 ============================================================ RUBBER & PLASTIC [2.5%] Spartech 58,200 1,708 ============================================================ SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT [1.4%] PerkinElmer 40,000 969 ============================================================ SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 12 schedule of investments MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- RCB SMALL CAP VALUE FUND (CONCLUDED) DESCRIPTION SHARES/FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- TEXTILES, APPAREL & LUXURY GOODS [1.9%] Timberland, Cl A* 49,000 $ 1,275 ============================================================ TOTAL COMMON STOCK (Cost $49,256) 63,676 ======================================================== CORPORATE BONDS [1.8%] FINANCIAL SERVICES [1.5%] Labranche (A) 9.500%, 05/15/09 $ 1,000 1,050 ============================================================ LABORATORY EQUIPMENT [0.3%] Sea Containers, Ser B (C) 10.750%, 10/15/06 250 208 ============================================================ TOTAL CORPORATE BONDS (Cost $1,258) 1,258 ======================================================== REPURCHASE AGREEMENT (B) [3.5%] Morgan Stanley, 5.000%, dated 03/30/07, repurchased on 04/02/07, repurchase price $2,327,967 (collateralized by a U.S. Treasury Bond, par value $2,178,304, 2.375%, 1/15/25; with total market value $2,373,587) 2,327 2,327 ------------------------------------------------------------ TOTAL REPURCHASE AGREEMENT (Cost $2,327) 2,327 ======================================================== TOTAL INVESTMENTS [100.0%] (Cost $52,841) $67,261 ======================================================== PERCENTAGES ARE BASED ON NET ASSETS OF $67,254 ($ THOUSANDS). * NON-INCOME PRODUCING SECURITY (A) SECURITY EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT OF 1933. THESE SECURITIES MAY BE RESOLD IN TRANSACTIONS EXEMPT FROM REGISTRATION NORMALLY TO QUALIFIED INSTITUTIONS. ON MARCH 31, 2007, THE VALUE OF THESE SECURITIES AMOUNTED TO $1,050 ($ THOUSANDS), REPRESENTING 1.5% OF THE NET ASSETS OF THE FUND. (B) TRI-PARTY REPURCHASE AGREEMENT (C) IN DEFAULT ON INTEREST PAYMENTS CL -- CLASS SER -- SERIES SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 13 schedule of investments MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- TECHNOLOGY GROWTH FUND [Bar Graph Omitted] Percentages are as follows: SECTOR WEIGHTINGS*: 93.1% Information Technology 2.7% Short-Term Investments 1.6% Industrials 1.5% Healthcare 1.1% Consumer Discretionary * Percentages based on total investments. - ----------------------------------------------------------------- DESCRIPTION SHARES VALUE (000) - ----------------------------------------------------------------- COMMON STOCK [97.3%] AUDIO & VIDEO EQUIPMENT MANUFACTURING [1.1%] Sony, ADR 625 $ 32 ============================================================ COMMUNICATIONS EQUIPMENT MANUFACTURING [8.6%] Harris 700 36 Motorola 2,725 48 Nokia, ADR 2,150 49 Qualcomm 2,600 111 ------------------------------------------------------------ TOTAL COMMUNICATIONS EQUIPMENT MANUFACTURING 244 ============================================================ COMPUTER & PERIPHERAL EQUIPMENT MANUFACTURING [23.3%] Apple Computer* 1,375 128 Dell* 1,525 35 EMC-Mass* 4,505 62 Hewlett-Packard 3,823 154 IBM 2,100 198 NAVTEQ* 800 28 Sandisk* 675 30 Western Digital* 1,750 29 ------------------------------------------------------------ TOTAL COMPUTER & PERIPHERAL EQUIPMENT MANUFACTURING 664 ============================================================ COMPUTER SYSTEMS DESIGN & RELATED SERVICES [6.0%] Autodesk* 800 30 Cerner* 400 22 Cognizant Technology Solutions, Cl A* 800 70 Electronic Data Systems 1,725 48 ------------------------------------------------------------ TOTAL COMPUTER SYSTEMS DESIGN & RELATED SERVICES 170 ============================================================ DESCRIPTION SHARES VALUE (000) - ----------------------------------------------------------------- DATA PROCESSING SERVICES [1.3%] First Data 1,400 $ 38 ============================================================ ELECTRONIC SHOPPING & MAIL-ORDER HOUSES [1.4%] eBay* 1,175 39 ============================================================ FIBER OPTIC CABLE MANUFACTURING [2.2%] Corning* 2,800 64 ============================================================ NAVIGATIONAL/MEASURING/MEDICAL/CONTROL INSTRUMENTS MANUFACTURING [2.3%] L-3 Communications Holdings 500 44 PerkinElmer 875 21 ------------------------------------------------------------ TOTAL NAVIGATIONAL/MEASURING/MEDICAL/CONTROL INSTRUMENTS MANUFACTURING 65 ============================================================ ON-LINE INFORMATION SERVICES [6.7%] Google* 300 137 Yahoo!* 1,725 54 ------------------------------------------------------------ TOTAL ON-LINE INFORMATION SERVICES 191 ============================================================ SEMICONDUCTOR & OTHER ELECTRONIC COMPONENT MANUFACTURING [21.8%] Amphenol, Cl A 500 32 Analog Devices 1,250 43 Applied Materials 3,650 67 Arrow Electronics* 500 19 Broadcom, Cl A* 1,200 39 Cisco Systems* 4,705 120 Intel 4,950 95 Jabil Circuit 850 18 Linear Technology 1,200 38 Maxim Integrated Products 900 27 Micron Technology 1,650 20 QLogic* 900 15 Texas Instruments 2,900 87 ------------------------------------------------------------ TOTAL SEMICONDUCTOR & OTHER ELECTRONIC COMPONENT MANUFACTURING 620 ============================================================ SOFTWARE PUBLISHERS [21.3%] Adobe Systems* 1,000 42 Akamai Technologies* 725 36 Citrix Systems* 1,175 38 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 14 schedule of investments MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- TECHNOLOGY GROWTH FUND (CONCLUDED) DESCRIPTION SHARES VALUE (000) - ----------------------------------------------------------------- Electronic Arts* 1,075 $ 54 Intuit* 900 24 McAfee* 975 28 Microsoft 7,350 205 Oracle* 6,765 123 Symantec* 3,300 57 ------------------------------------------------------------ TOTAL SOFTWARE PUBLISHERS 607 ============================================================ TELECOMMUNICATIONS [1.3%] Amdocs* 1,000 36 ============================================================ TOTAL COMMON STOCK (Cost $2,507) 2,770 ======================================================== CASH EQUIVALENTS [2.7%] Fidelity Institutional Domestic Money Market Portfolio, Cl I, 5.22%** 56,476 56 SEI Daily Income Trust, Prime Obligation Fund, Cl I, 5.33%** 20,205 20 ------------------------------------------------------------ TOTAL CASH EQUIVALENTS (Cost $76) 76 ======================================================== TOTAL INVESTMENTS [100.0%] (Cost $2,583) $2,846 ======================================================== PERCENTAGES ARE BASED ON NET ASSETS OF $2,846 ($ THOUSANDS). * NON-INCOME PRODUCING SECURITY ** RATE SHOWN IS THE 7-DAY EFFECTIVE YIELD AS OF MARCH 31, 2007. ADR -- AMERICAN DEPOSITORY RECEIPT CL -- CLASS SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 15 schedule of investments MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- CORPORATE BOND FUND [Bar Graph Omitted] Percentages are as follows: SECTOR WEIGHTINGS*: 37.1% Financials 27.3% Industrial 9.3% Telephone 7.4% Banks 6.5% U.S. Government Mortgage-Backed Obligations 3.2% Commercial Paper 2.9% Utilities 1.8% U.S. Treasury Obligation 1.6% Municipal Bond 1.0% Gas Transmission 0.8% Foreign Governments 0.5% Mortgage-Backed 0.4% Short-Term Investment 0.2% Transportation * Percentages based on total investments. - ----------------------------------------------------------------- DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- CORPORATE BONDS [85.3%] AIR TRANSPORTATION [0.2%] Federal Express, Ser A2 7.890%, 09/23/08 $ 109 $ 111 ============================================================ AUTOMOTIVE [2.6%] DaimlerChrysler 5.875%, 03/15/11 570 581 Toyota Motor Credit 4.250%, 03/15/10 1,000 985 ------------------------------------------------------------ TOTAL AUTOMOTIVE 1,566 ============================================================ BANKS [10.3%] Bankers Trust 7.250%, 10/15/11 500 539 Crestar Finance 6.500%, 01/15/08 1,035 1,048 Deutsche Bank 7.500%, 04/25/09 500 522 JPMorgan Chase 7.125%, 06/15/09 675 702 Union Planters Bank 5.125%, 06/15/07 1,215 1,214 US Bancorp 6.875%, 09/15/07 350 352 Wachovia Bank 4.800%, 11/01/14 770 741 Wells Fargo 4.625%, 08/09/10 1,000 989 ----------------------------------------------------------- TOTAL BANKS 6,107 ============================================================ BEAUTY PRODUCTS [1.4%] Avon Products 7.150%, 11/15/09 800 839 ============================================================ DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- CHEMICALS [0.4%] Praxair 6.625%, 10/15/07 $ 200 $ 201 ============================================================ COMMUNICATION & MEDIA [4.3%] AOL Time Warner 6.750%, 04/15/11 395 416 Comcast Cable Communications Holdings 8.375%, 03/15/13 440 503 News America Holdings 9.250%, 02/01/13 450 534 Walt Disney 5.700%, 07/15/11 1,100 1,126 ------------------------------------------------------------ TOTAL COMMUNICATION & MEDIA 2,579 ============================================================ COMPUTER SYSTEM DESIGN & SERVICES [3.2%] Cisco Systems 5.500%, 02/22/16 1,000 1,007 IBM, MTN 4.375%, 06/01/09 900 890 ------------------------------------------------------------ TOTAL COMPUTERS SYSTEM DESIGN & SERVICES 1,897 ============================================================ DRUGS [1.7%] Abbott Laboratories 5.375%, 05/15/09 1,000 1,007 ============================================================ ELECTRICAL SERVICES [2.9%] American Electric Power 5.250%, 06/01/15 490 482 Iowa Electric Light & Power 6.000%, 10/01/08 200 202 WPS Resources 7.000%, 11/01/09 1,000 1,042 ------------------------------------------------------------ TOTAL ELECTRICAL SERVICES 1,726 ============================================================ FINANCIAL SERVICES [15.2%] American General Finance, Ser I, MTN 4.625%, 05/15/09 1,000 987 CIT Group 5.400%, 03/07/13 1,000 993 Citigroup 5.850%, 08/02/16 1,000 1,030 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 16 schedule of investments MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- CORPORATE BOND FUND (CONTINUED) DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- General Electric Capital, Ser A, MTN 6.875%, 11/15/10 $ 250 $ 264 6.000%, 06/15/12 1,500 1,558 HSBC Finance 5.250%, 04/15/15 1,000 986 John Deere Capital 4.625%, 04/15/09 750 742 MBNA 4.625%, 09/15/08 410 407 National Rural Utilities, Ser C, MTN 7.250%, 03/01/12 1,000 1,090 SLM, Ser A, MTN 5.440%, 01/25/08 1,000 1,001 ------------------------------------------------------------ TOTAL FINANCIAL SERVICES 9,058 ============================================================ FOOD, BEVERAGE & TOBACCO [6.5%] Anheuser-Busch 7.500%, 03/15/12 1,190 1,306 Bottling Group 5.500%, 04/01/16 1,000 1,005 Diageo Capital 3.375%, 03/20/08 1,000 982 General Mills 6.000%, 02/15/12 560 579 ------------------------------------------------------------ TOTAL FOOD, BEVERAGE & TOBACCO 3,872 ============================================================ FOREIGN GOVERNMENTS [0.8%] United Mexican States 5.875%, 01/15/14 450 464 ============================================================ INSURANCE [6.2%] Aflac 6.500%, 04/15/09 1,150 1,179 AXA Financial 7.750%, 08/01/10 1,000 1,079 Berkshire Hathaway Finance 4.125%, 01/15/10 1,475 1,444 ------------------------------------------------------------ TOTAL INSURANCE 3,702 ============================================================ INVESTMENT BANKER/BROKER DEALER [10.6%] Credit Suisse 5.500%, 08/15/13 1,000 1,012 Goldman Sachs Group 5.625%, 01/15/17 1,020 1,010 Jefferies Group 5.500%, 03/15/16 665 651 DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- JPMorgan Chase 6.750%, 02/01/11 $ 500 $ 526 Lehman Brothers Holdings 8.250%, 06/15/07 1,100 1,106 Merrill Lynch 4.000%, 11/15/07 1,000 991 Morgan Stanley 6.750%, 04/15/11 30 32 3.875%, 01/15/09 1,000 980 ------------------------------------------------------------ TOTAL INVESTMENT BANKER/BROKER DEALER 6,308 ============================================================ PETROLEUM & FUEL PRODUCTS [1.9%] Chevron 8.625%, 06/30/10 200 224 ConocoPhillips 6.375%, 03/30/09 305 313 Duke Capital 5.500%, 03/01/14 625 612 ------------------------------------------------------------ TOTAL PETROLEUM & FUEL PRODUCTS 1,149 ============================================================ REAL ESTATE INVESTMENT TRUST [0.1%] Kimco Realty, Ser B, MTN 7.860%, 11/01/07 67 68 ============================================================ RETAIL [6.7%] Home Depot 5.250%, 12/16/13 1,000 993 Kohl's 6.300%, 03/01/11 1,000 1,041 Kroger 5.500%, 02/01/13 450 449 Target 5.875%, 07/15/16 500 514 Wal-Mart Stores 4.375%, 07/12/07 1,000 998 ------------------------------------------------------------ TOTAL RETAIL 3,995 ============================================================ TELEPHONES & TELECOMMUNICATIONS [9.3%] Bellsouth 4.200%, 09/15/09 1,000 979 Deutsche Telekom International Finance 5.250%, 07/22/13 475 469 New Cingular Wireless Services 8.125%, 05/01/12 400 450 Southwestern Bell 6.625%, 07/15/07 750 752 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 17 schedule of investments MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- CORPORATE BOND FUND (CONCLUDED) DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- Sprint Capital 8.375%, 03/15/12 $ 550 $ 614 Verizon Communications 7.250%, 12/01/10 25 27 5.550%, 02/15/16 1,000 1,000 Vodafone Group 5.350%, 02/27/12 1,205 1,208 ------------------------------------------------------------ TOTAL TELEPHONES & TELECOMMUNICATIONS 5,499 ============================================================ WASTE DISPOSAL [1.0%] Waste Management 6.875%, 05/15/09 575 593 ============================================================ TOTAL CORPORATE BONDS (Cost $50,729) 50,741 ======================================================== U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS [6.5%] FHLMC REMIC, Ser 2982, Cl NB 5.500%, 02/15/29 340 342 FHLMC REMIC, Ser R004, Cl Al 5.125%, 12/15/13 1,077 1,071 FNMA REMIC, Ser 2002-56, Cl MC 5.500%, 09/25/17 1,196 1,204 FNMA REMIC, Ser 2006, Cl AB 6.000%, 06/25/16 189 190 FNMA REMIC, Ser 2007-B1, Cl BE 5.450%, 12/25/20 1,060 1,058 ------------------------------------------------------------ TOTAL U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS (Cost $3,856) 3,865 ======================================================== U.S. TREASURY OBLIGATION [1.8%] U.S. Treasury Inflation Index Note 2.000%, 01/15/14 1,095 1,084 ------------------------------------------------------------ TOTAL U.S. TREASURY OBLIGATION (Cost $1,132) 1,084 ======================================================== DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- MUNICIPAL BOND [1.6%] CALIFORNIA [1.6%] City of Industry, Sales Tax Project, RB, MBIA 5.000%, 01/01/12 $ 955 $ 953 ============================================================ TOTAL MUNICIPAL BOND (Cost $980) 953 ======================================================== MORTGAGE-BACKED SECURITY [0.5%] Residential Asset Mortgage Products, Ser 2003-RS5, Cl AI4 3.700%, 09/25/31 267 264 ------------------------------------------------------------ TOTAL MORTGAGE-BACKED SECURITY (Cost $264) 264 ======================================================== COMMERCIAL PAPER [3.2%] Giro Balanced Funding 5.310%, 04/16/07 1,000 998 Ranger Funding 5.310%, 04/16/07 914 912 ------------------------------------------------------------ TOTAL COMMERCIAL PAPER (Cost $1,910) 1,910 ======================================================== CASH EQUIVALENT [0.4%] Fidelity Institutional Domestic Money Market Portfolio, Cl I, 5.22%* 212,608 213 ------------------------------------------------------------ TOTAL CASH EQUIVALENT (Cost $213) 213 ======================================================== TOTAL INVESTMENTS [99.3%] (Cost $59,084) $59,030 ======================================================== PERCENTAGES ARE BASED ON NET ASSETS OF $59,473 ($ THOUSANDS). *RATE SHOWN IS THE 7-DAY EFFECTIVE YIELD AS OF MARCH 31, 2007. CL -- CLASS FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION MBIA -- MUNICIPAL BOND INSURANCE ASSOCIATION MTN -- MEDIUM TERM NOTE RB -- REVENUE BOND REMIC -- REAL ESTATE MORTGAGE INVESTMENT CONDUIT SER -- SERIES SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 18 schedule of investments MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- GOVERNMENT BOND FUND [Bar Graph Omitted] Percentages are as follows: SECTOR WEIGHTINGS*: 63.9% U.S. Government Mortgage-Backed Obligations 35.4% U.S. Government Agency Obligations 0.7% Short-Term Investment * Percentages based on total investments. - ----------------------------------------------------------------- DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS [63.8%] FFCB CMO, Ser IA2, Cl 1 5.220%, 10/21/13 $1,275 $ 1,275 FFCB CMO, Ser IAB3, Cl 1 5.590%, 12/11/12 2,969 2,979 FHLMC REMIC, Ser R002, Cl AH 4.750%, 07/15/15 3,360 3,317 FHLMC REMIC, Ser R003, Cl AG 5.125%, 10/15/15 2,466 2,452 FHLMC REMIC, Ser R004, Cl Al 5.125%, 12/15/13 2,010 1,999 FHLMC REMIC, Ser R005, Cl AB 5.500%, 12/15/18 2,747 2,753 FHLMC REMIC, Ser R007, Cl AC 5.875%, 05/15/16 2,478 2,494 FHLMC REMIC, Ser R009, Cl AK 5.750%, 12/15/18 2,635 2,644 FHLMC REMIC, Ser R010, Cl AB 5.500%, 12/15/19 2,967 2,974 FNMA REMIC, Ser R009, Cl AJ 5.750%, 12/15/18 3,035 3,054 FNMA REMIC, Ser 119, Cl DG 5.500%, 01/25/36 1,949 1,942 FNMA, Pool 766620 4.573%, 03/01/34 1,019 1,008 GNMA, Pool 81318 4.500%, 04/20/35 1,059 1,052 GNMA, Pool 81447 5.000%, 08/20/35 116 116 ------------------------------------------------------------ TOTAL U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS (Cost $30,016) 30,059 ======================================================== DESCRIPTION FACE AMOUNT (000)/SHARES VALUE (000) ------------------------------------------------------------ U.S. GOVERNMENT AGENCY OBLIGATIONS [35.3%] FHLB 6.200%, 03/22/21 $2,000 $ 1,996 5.250%, 09/13/13 2,500 2,547 5.125%, 09/10/10 1,000 1,010 4.375%, 09/17/10 1,400 1,380 FHLMC 5.500%, 03/05/09 2,000 2,000 FNMA 7.125%, 06/15/10 2,000 2,136 5.500%, 03/15/11 3,000 3,069 5.010%, 11/10/10 2,500 2,483 ------------------------------------------------------------ TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (Cost $16,619) 16,621 ======================================================== CASH EQUIVALENT [0.7%] Fidelity Institutional Domestic Money Market Portfolio, Cl I, 5.22%* 351,696 352 ------------------------------------------------------------ TOTAL CASH EQUIVALENT (Cost $352) 352 ======================================================== TOTAL INVESTMENTS [99.8%] (Cost $46,987) $47,032 ======================================================== PERCENTAGES ARE BASED ON NET ASSETS OF $47,106 ($ THOUSANDS). * RATE SHOWN IS THE 7-DAY EFFECTIVE YIELD AS OF MARCH 31, 2007. CL -- CLASS CMO -- COLLATERALIZED MORTGAGE OBLIGATION FFCB -- FEDERAL FARM CREDIT BANK FHLB -- FEDERAL HOME LOAN BANK FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION GNMA -- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION REMIC -- REAL ESTATE MORTGAGE INSURANCE CONDUIT SER -- SERIES SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 19 schedule of investments MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT BOND FUND [Bar Graph Omitted]= Percentages are as follows: SECTOR WEIGHTINGS*: 28.1% Education 15.1% General Revenue 12.4% Public Facilities 12.1% General Obligation 9.2% Industrial Development 7.1% Water 4.4% Healthcare 4.4% Power 4.1% Utilities 1.8% Transportation 0.9% Airports 0.4% Short-Term Investment * Percentages based on total investments. - ----------------------------------------------------------------- DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- MUNICIPAL BOND [98.1%] ALABAMA [0.8%] Jefferson County, Sewer Authority, Ser B-8, RB, FSA Callable 02/01/10 @ 100 5.250%, 02/01/14 $ 250 $ 260 ============================================================ CALIFORNIA [85.2%] Anaheim, Public Financing Authority, Distribution System Project, Second Lien, RB, MBIA 5.000%, 10/01/08 250 255 Bay Area Infrastructure Financing Authority, State Payment Acceleration Project, RB, XLCA Callable 08/01/11 @ 100 5.000%, 08/01/14 500 526 Berkeley, Ser C, GO, MBIA Callable 05/11/07 @ 101 5.000%, 09/01/10 95 96 Beverly Hills, Unified School District Authority, Ser B, GO Pre-Refunded @ 101 (A) 4.700%, 06/01/08 50 51 Big Bear Lake, Water Authority, RB, MBIA 6.000%, 04/01/11 200 213 Burbank, Public Financing Authority, Golden State Redevelopment Project, Ser A, TA, AMBAC Callable 12/01/13 @ 100 5.250%, 12/01/18 175 188 DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- California State, Daily Kindergarten University Project, Ser A, GO Callable 04/10/07 @ 100 (B) 3.650%, 05/01/34 $ 500 $ 500 California State, Department of Water Resources, Power Supply Project, Ser A, RB, AMBAC Callable 05/01/12 @ 101 5.500%, 05/01/15 600 656 California State, Department of Water Resources, Ser A, RB, AMBAC Callable 05/01/12 @ 101 5.500%, 05/01/14 300 328 California State, Department of Water Resources, Ser W, RB, FSA 5.500%, 12/01/13 400 443 California State, Economic Recovery Authority, Ser A, GO 5.250%, 01/01/11 500 529 California State, Economic Recovery Authority, Ser C, RB Callable 04/10/07 @ 100 3.650%, 07/01/23 400 400 California State, Educational Facilities Authority, Pooled College & University Projects, Ser A, RB 4.300%, 04/01/09 100 101 California State, Educational Facilities Authority, University of San Francisco, RB, MBIA 6.000%, 10/01/08 300 311 California State, GO 5.000%, 04/01/10 215 223 4.750%, 06/01/07 100 100 California State, GO Callable 02/01/12 @ 100 5.000%, 02/01/18 175 183 California State, GO Callable 08/01/13 @ 100 5.250%, 02/01/21 250 268 California State, GO Pre-Refunded @ 100 (A) 5.250%, 09/01/10 200 211 5.250%, 10/01/10 50 53 California State, GO, FGIC 5.500%, 02/01/10 340 358 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 20 schedule of investments MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT BOND FUND (CONTINUED) DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- California State, GO, Pre-Refunded @ 100 (A) 5.250%, 10/01/10 $ 20 $ 21 California State, Health Facilities Financing Authority, Cedars-Sinai Medical Center Project, Ser A, RB Pre-Refunded @ 101 (A) 6.250%, 12/01/09 490 529 California State, Infrastructure & Economic Authority, Bay Area Toll Bridges Project, Ser A, RB, FSA Pre-Refunded @ 100 (A) 5.250%, 07/01/13 125 136 California State, Infrastructure & Economic Authority, Energy Efficiency Master Trust, Ser A, RB 5.000%, 03/01/11 315 331 California State, Infrastructure & Economic Authority, RB, MBIA Pre-Refunded @ 101 (A) 5.500%, 06/01/10 350 374 California State, Public Works Board Lease, California State University, Ser C, RB 5.000%, 10/01/07 100 101 California State, Public Works Board Lease, Department of Corrections Project, Ser B, RB, MBIA Callable 09/01/08 @ 101 5.000%, 09/01/21 100 103 California State, Public Works Board Lease, Department of Corrections, Ser A, RB Callable 09/01/08 @ 101 5.250%, 09/01/15 250 257 California State, Public Works Board Lease, Department of Corrections, Ser D, RB, FSA 5.250%, 06/01/15 500 542 California State, Public Works Board Lease, Department of Corrections-State Prisons Project, Ser A, RB, AMBAC 5.250%, 12/01/13 600 644 DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- California State, Public Works Board Lease, Department of Corrections-Ten Administration, Ser A, RB, AMBAC Callable 03/01/12 @ 100 5.250%, 03/01/18 $ 155 $ 165 California State, Public Works Board Lease, Trustees California State University, Ser A, RB Callable 10/01/08 @ 101 5.250%, 10/01/11 100 103 California State, Public Works Board Lease, Various University Projects, RB, MBIA 5.500%, 06/01/14 250 272 California State, Systemwide Project, Ser A, RB, FSA 4.000%, 11/01/14 300 307 California State, University of California, Ser K, RB, MBIA Pre-Refunded @ 101 (A) 5.000%, 09/01/08 150 154 Capistrano, Unified School District, Special Tax, Pre-Refunded @ 102 (A) 5.750%, 09/01/09 270 289 Coachella Valley, Water District Authority, Flood Control Project, COP, AMBAC Callable 10/01/07 @ 102 5.000%, 10/01/11 250 256 Corona, Public Financing Authority, City Hall Project, Ser B, MBIA, RB Callable 09/01/12 @ 100 5.250%, 09/01/16 350 377 Culver City, Redevelopment Finance Authority, TA, AMBAC 5.500%, 11/01/14 75 81 Escondido, Union School District, Refunding & Financing Project, COP, MBIA 4.750%, 07/01/19 735 783 Evergreen, School District, Ser C, GO, FGIC Pre-Refunded @ 101 (A) 5.250%, 09/01/08 200 207 Fruitvale, School District, GO, FSA Callable 08/01/09 @ 102 5.000%, 08/01/19 200 209 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 21 schedule of investments MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT BOND FUND (CONTINUED) DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- Golden State, Tobacco Settlement, Ser A, RB Callable 06/01/09 @ 100 5.000%, 06/01/19 $ 250 $ 256 Golden State, Tobacco Settlement, Ser A, RB Callable 06/01/10 @ 100 5.000%, 06/01/20 500 518 Golden State, Tobacco Settlement, Ser B, RB Pre-Refunded @ 100 (A) 5.750%, 06/01/08 250 256 Hawthorne, School District, COP, FSA Pre-Refunded @ 101 (A) 6.000%, 11/01/10 500 545 Indio, Public Financing Authority, Public Capital Improvement Project, Ser B, RB, AMBAC 3.800%, 11/01/37 500 501 Irvine, Improvement Board, Act 1915 Project, District #93-14, SAB (B) 3.650%, 09/02/25 500 500 Irwindale, Community Redevelopment Agency, Ser C, TA, AMBAC 4.500%, 12/01/12 685 712 Kern, High School District, GO, ETM 7.100%, 08/01/12 290 339 Los Angeles County, Public Works Finance Authority, Master Refunding Project, Ser A, RB, MBIA 5.000%, 12/01/11 400 424 5.000%, 12/01/12 275 294 Los Angeles County, Public Works Finance Authority, Master Refunding Project, Ser A, RB, MBIA 5.000%, 12/01/15 500 545 Los Angeles County, Public Works Finance Authority, Regional Park & Open Project, Ser A, RB Pre-Refunded @ 101 (A) 5.500%, 10/01/07 325 331 Los Angeles, Municipal Improvement Authority, Central Library Project, Ser A, RB, MBIA 5.250%, 06/01/13 230 250 DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- Los Angeles, Property Tax Project, Ser A, GO, MBIA 4.000%, 09/01/09 $ 250 $ 253 Los Angeles, Wastewater Systems Authority, RB, FSA 4.500%, 06/01/09 250 255 M-S-R Public Power Agency, San Juan Project, Ser G, RB, MBIA Callable 07/01/07 @ 101 5.250%, 07/01/11 100 101 Newport Beach, Hoag Memorial Hospital, Ser C, RB Callable 04/10/07 @ 100 3.650%, 10/01/26 400 400 Northern California, Transmission Resource Authority, Ore Transmission Project, Ser A, RB, MBIA 7.000%, 05/01/13 250 286 Oakland, Joint Powers Financing Authority, Oakland Convention Center Project, RB, AMBAC 5.500%, 10/01/11 300 323 Oakland, Redevelopment Agency, Central District Redevelopment Project, TA, AMBAC 5.500%, 02/01/14 475 505 Oakland, State Building Authority, Elihu M Harris Project, Ser A, RB, AMBAC Pre-Refunded @ 101 (A) 5.500%, 04/01/08 100 103 Oakley, Civic Center Project, COP 4.000%, 05/01/12 230 233 Oxnard, School District, Election 2006 Project, Ser A, GO, CIFG 6.750%, 08/01/11 300 337 Pasadena, Electric Improvements Authority, RB, FSA 4.500%, 06/01/07 160 160 Pinole, Redevelopment Agency Project, TA, FSA Callable 08/01/09 @ 101 5.250%, 08/01/14 100 105 Riverside, RB Callable 10/01/08 @ 101 5.375%, 10/01/12 90 93 Riverside, RB Pre-Refunded @ 101 (A) 5.375%, 10/01/08 10 10 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 22 schedule of investments MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT BOND FUND (CONTINUED) DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- Rowland, Unified School District, Ser A, GO Callable 08/01/16 @ 100 5.000%, 08/01/20 $ 290 $ 312 Sacramento County, Sanitation District Funding Authority, RB, ETM Callable 05/11/07 @ 101 5.000%, 12/01/07 100 101 Sacramento, City Unified School District, Ser A, GO, FSA 4.250%, 07/01/09 75 76 San Bernardio, Community College District, Election 2002 Project, Ser B, GO, MBIA Pre-Refunded @ 100 (A) 5.250%, 08/01/14 500 551 San Diego, Unified School District, Election 1998 Project, Ser B-1, GO, MBIA 5.000%, 07/01/17 1,500 1,646 San Diego, Unified School District, Election 1998 Project, Ser E, GO, FSA Callable 07/01/13 @ 100 5.000%, 07/01/28 400 428 San Diego, University School District, Election 1998 Project, Ser E, GO, FSA Callable 07/01/13 @ 101 5.250%, 07/01/16 100 109 San Francisco (City & County), Airports Commission Authority, Second Ser-27B, RB, FGIC 5.250%, 05/01/12 250 265 San Francisco (City & County), GO Callable 06/15/10 @ 102 5.000%, 06/15/11 235 248 San Jose, University School District, Ser A, GO, FSA Callable 08/01/11 @ 101 5.375%, 08/01/19 150 161 San Ysidro, School District, Election 1997 Project, Ser C, GO, MBIA 6.000%, 08/01/11 205 225 Sanger, Unified School District, GO, MBIA 5.350%, 08/01/15 250 269 Santa Monica, Public Safety Facilities Project, RB Callable 07/01/09 @ 101 5.250%, 07/01/14 100 104 DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- Solano County, COP, MBIA Pre-Refunded @ 100 (A) 5.250%, 11/01/12 $ 100 $ 108 Southern California, Metropolitan Water District Authority, Ser A, RB 5.750%, 07/01/21 280 328 Southern Kern, Unified School District, Ser A, GO, FGIC Callable 11/01/13 @ 100 4.500%, 11/01/18 220 227 Tamalpais, Unified High School District, GO, MBIA Callable 08/01/11 @ 101 4.875%, 08/01/17 100 105 Vallejo, City Unified School District, Election 1997 Project, GO, AMBAC 8.600%, 08/01/10 580 671 Wiseburn, School District, Ser A, GO, FGIC 4.200%, 08/01/07 125 125 ------------------------------------------------------------ TOTAL CALIFORNIA 26,928 ============================================================ FLORIDA [0.9%] Seminole County, Water & Sewer Authority, Refunding Project, RB Callable 10/01/15 @ 100 5.000%, 10/01/19 250 268 ============================================================ GEORGIA [0.6%] Georgia State, Metropolitan Atlanta Rapid Transportation Authority, Second Indenture Project, Ser A, RB, MBIA 6.250%, 07/01/07 200 201 ============================================================ ILLINOIS [0.7%] Illinois State, Civic Center Authority, RB, FSA Callable 12/15/10 @ 100 5.500%, 12/15/14 200 212 ============================================================ MISSOURI [0.7%] St. Louis, Parking Facilities Authority, Downtown Parking Facilities Project, Sub-Ser A, RB Pre-Refunded @ 100 (A) 6.000%, 02/01/12 200 220 ============================================================ SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 23 schedule of investments MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT BOND FUND (CONTINUED) DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- NEW JERSEY [1.2%] New Jersey State, Turnpike Authority, RB, MBIA, ETM 6.500%, 01/01/16 $ 315 $ 364 ============================================================ NEW YORK [3.4%] New York State, Environmental Facilities Authority, Ser D, RB Callable 08/15/14 @ 100 4.750%, 08/15/21 500 522 New York State, Ser E, RB 6.000%, 04/01/14 500 556 ------------------------------------------------------------ TOTAL NEW YORK 1,078 ============================================================ TEXAS [2.4%] Rio Grande, City Consolidated Independent School District, GO Pre-Refunded @ 100 (A) 5.875%, 08/15/10 200 214 San Angelo, Waterworks & Sewer System Authority, Refunding & Improvements Projects, RB, FSA Callable 04/01/11 @ 100 5.250%, 04/01/19 100 105 Travis County, Health Facilities Development Authority, Ascension Health Credit Project, Ser A, RB, MBIA Pre-Refunded @ 101 (A) 6.250%, 11/15/09 400 429 ------------------------------------------------------------ TOTAL TEXAS 748 ============================================================ UTAH [0.5%] Central, Water Conservancy District, Ser D, GO Pre-Refunded @ 100 (A) 4.600%, 04/01/09 140 143 DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- PUERTO RICO [1.7%] Puerto Rico, Electric Power Authority, Power Project, Ser CC, RB, MBIA Callable 07/01/07 @ 101.5 5.250%, 07/01/09 $ 100 $ 102 Puerto Rico, Municipal Finance Agency, Ser A, RB, FSA Callable 07/01/07 @ 101.5 5.250%, 07/01/10 130 133 Puerto Rico, Public Buildings Authority, Government Facilities Project, Ser J, RB, AMBAC Callable 07/01/12 @ 100 5.000%, 07/01/36 300 318 ------------------------------------------------------------ TOTAL PUERTO RICO 553 ============================================================ TOTAL MUNICIPAL BOND (Cost $31,018) 30,975 ======================================================== CASH EQUIVALENT [0.3%] Federated California Municipal Money Market Fund, Cl, 3.41%* 106,886 107 ============================================================ TOTAL CASH EQUIVALENT (Cost $107) 107 ======================================================== TOTAL INVESTMENTS [98.4%] (Cost $31,125) $31,082 ======================================================== PERCENTAGES ARE BASED ON NET ASSETS OF $31,603 ($ THOUSANDS). * RATE SHOWN IS THE 7-DAY EFFECTIVE YIELD AS OF MARCH 31, 2007. (A) PRE-REFUNDED SECURITY -- THE MATURITY DATE SHOWN IS THE PRE-REFUNDED DATE. (B) SECURITIES ARE HELD IN CONJUNCTION WITH A LETTER OF CREDIT FROM A MAJOR BANK OR FINANCIAL INSTITUTION. AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY CIFG -- CDC IXIS FINANCIAL GUARANTY COP -- CERTIFICATE OF PARTICIPATION ETM -- ESCROWED TO MATURITY FGIC -- FINANCIAL GUARANTY INSURANCE COMPANY FSA -- FINANCIAL SECURITY ASSISTANCE GO -- GENERAL OBLIGATION MBIA -- MUNICIPAL BOND INSURANCE ASSOCIATION RB -- REVENUE BOND SAB -- SPECIAL ASSESSMENT BOND SER -- SERIES TA -- TAX ALLOCATION XLCA -- XL CAPITAL ASSURANCE SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 24 schedule of investments MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- HIGH YIELD BOND FUND [Bar Graph Omitted] Percentages are as follows: SECTOR WEIGHTINGS*: 70.8% Industrial 10.8% Financials 5.4% Telephone 5.3% Utilities 4.6% Gas Transmission 1.7% Short-Term Investments 1.0% Transportation 0.4% Common Stock * Percentages based on total investments. DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- CORPORATE BONDS [97.3%] ADVERTISING [0.7%] Advanstar Communications 10.750%, 08/15/10 $100 $ 108 Gray Television 9.250%, 12/15/11 100 105 Olympus Communications (D) 10.625%, 07/15/04 100 -- R.H. Donnelley, Ser A-2 6.875%, 01/15/13 50 49 ------------------------------------------------------------ TOTAL ADVERTISING 262 ============================================================ AEROSPACE & DEFENSE [1.0%] DRS Technologies 6.625%, 02/01/16 100 101 Esterline Technologies 7.750%, 06/15/13 100 103 L-3 Communications 5.875%, 01/15/15 200 194 ------------------------------------------------------------ TOTAL AEROSPACE & DEFENSE 398 ============================================================ AGRICULTURE [0.4%] American Rock Salt 9.500%, 03/15/14 150 152 ============================================================ ALUMINUM [0.1%] Aleris International (A) 10.000%, 12/15/16 50 52 ============================================================ APPAREL/TEXTILES [0.5%] Levi Strauss 9.750%, 01/15/15 100 110 Phillips-Van Heusen 7.250%, 02/15/11 75 76 ------------------------------------------------------------ TOTAL APPAREL/TEXTILES 186 ============================================================ DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- AUTO RENT & LEASE [1.5%] Avis Budget Car Rental (A) 7.750%, 05/15/16 $100 $ 102 Hertz 10.500%, 01/01/16 150 171 Rental Services (A) 9.500%, 12/01/14 100 106 United Rentals North America 6.500%, 02/15/12 100 100 Williams Scotsman 8.500%, 10/01/15 100 105 ------------------------------------------------------------ TOTAL AUTO RENT & LEASE 584 ============================================================ AUTOMOTIVE [2.7%] General Motors 7.125%, 07/15/13 850 795 UCI Holdco (A) 0.000%, 12/15/13 154 153 United Auto (A) 7.750%, 12/15/16 100 101 ------------------------------------------------------------ TOTAL AUTOMOTIVE 1,049 ============================================================ AUTOPARTS [0.6%] Accuride 8.500%, 02/01/15 150 151 Asbury Automotive Group (A) 7.625%, 03/15/17 75 75 ------------------------------------------------------------ TOTAL AUTOPARTS 226 ============================================================ BEAUTY PRODUCTS [0.3%] Chattem 7.000%, 03/01/14 100 99 ============================================================ BROADCASTING & CABLE [6.5%] Albritton Communications 7.750%, 12/15/12 150 154 Barrington Broadcasting Group (A) 10.500%, 08/15/14 100 105 Cablevision Systems, Ser B 8.000%, 04/15/12 250 254 CCO Holdings 8.750%, 11/15/13 250 259 Charter Communications Holdings 10.250%, 09/15/10 400 422 Coleman Cable 9.875%, 10/01/12 100 104 CSC Holdings 7.625%, 07/15/18 100 101 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 25 schedule of investments MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- HIGH YIELD BOND FUND (CONTINUED) DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- Echostar DBS 6.625%, 10/01/14 $200 $ 201 Fisher Communication 8.625%, 09/15/14 150 161 Insight Communications (B) 12.250%, 02/15/11 100 104 Kabel Deutschland 10.625%, 07/01/14 200 223 Mediacom Capital 7.875%, 02/15/11 150 150 Nexstar Finance Holdings (B) 0.000%, 04/01/13 200 193 Videotron Ltee 6.875%, 01/15/14 100 101 ------------------------------------------------------------ TOTAL BROADCASTING & CABLE 2,532 ============================================================ BUILDING & CONSTRUCTION [3.0%] Ainsworth Lumber 7.250%, 10/01/12 100 74 6.750%, 03/15/14 100 69 Beazer Homes USA 8.375%, 04/15/12 100 96 DR Horton 5.625%, 01/15/16 125 116 Esco (A) 8.625%, 12/15/13 50 53 Goodman Global Holdings 7.875%, 12/15/12 75 75 Interline Brands 8.125%, 06/15/14 50 52 International Utility Structures (D) 10.750%, 02/01/08 100 1 KB Home 8.625%, 12/15/08 50 51 Nortek 8.500%, 09/01/14 200 194 Panolam Industries (A) 10.750%, 10/01/13 250 269 Ply Gem Industries 9.000%, 02/15/12 150 130 ------------------------------------------------------------ TOTAL BUILDING & CONSTRUCTION 1,180 ============================================================ BUILDING & CONSTRUCTION SUPPLIES [0.1%] Tube City IMS (A) 9.750%, 02/01/15 25 26 ============================================================ DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- BUSINESS SERVICES [0.8%] Corrections 7.500%, 05/01/11 $100 $ 103 FTI Consulting 7.625%, 06/15/13 50 52 Geo Group 8.250%, 07/15/13 150 156 ------------------------------------------------------------ TOTAL BUSINESS SERVICES 311 ============================================================ CHEMICALS [4.2%] Basell Af SCA (A) 8.375%, 08/15/15 250 261 BCP Crystal US Holdings 9.625%, 06/15/14 45 51 Crystal Holdings, Ser B (B) 0.000%, 10/01/14 73 68 Equistar Chemicals 10.625%, 05/01/11 150 158 Georgia Gulf (A) 9.500%, 10/15/14 150 144 Huntsman International (A) 7.875%, 11/15/14 115 119 Lyondell Chemical 8.250%, 09/15/16 60 64 Mosaic (A) 7.375%, 12/01/14 75 78 Nova Chemicals 6.500%, 01/15/12 250 238 Polymer Holdings (B) 11.043%, 07/15/14 250 221 PolyOne 10.625%, 05/15/10 100 105 Rockwood Specialties Group 10.625%, 05/15/11 73 77 Terra Capital (A) 7.000%, 02/01/17 50 50 ------------------------------------------------------------ TOTAL CHEMICALS 1,634 ============================================================ CHEMICALS [0.3%] Innophos 8.875%, 08/15/14 100 104 ============================================================ CIRCUIT BOARDS [0.1%] Viasystems 10.500%, 01/15/11 50 50 ============================================================ COAL MINING [0.4%] Alpha Natural Resources 10.000%, 06/01/12 150 161 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 27 schedule of investments MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- HIGH YIELD BOND FUND (CONTINUED) DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- COMMERCIAL SERVICES [1.3%] Aramark (A) (C) 8.860%, 02/01/15 $100 $ 103 Iron Mountain 8.750%, 07/15/18 150 161 8.625%, 04/01/13 100 103 Jarden 7.500%, 05/01/17 75 76 Yankee Acquisition (A) 9.750%, 02/15/17 50 50 ------------------------------------------------------------ TOTAL COMMERCIAL SERVICES 493 ============================================================ COMPUTER SYSTEM DESIGN & SERVICES [0.3%] Compucom (A) 12.000%, 11/01/14 125 133 ============================================================ CONSUMER PRODUCTS & SERVICES [4.6%] Ames True Temper (C) 9.360%, 01/15/12 100 102 Central Garden & Pet 9.125%, 02/01/13 100 104 Gregg Appliances 9.000%, 02/01/13 150 158 Johnsondiversey Holdings (B) 0.000%, 05/15/13 200 206 Johnsondiversey, Ser B 9.625%, 05/15/12 150 157 Libbey Glass (C) 12.348%, 06/01/11 100 109 MSX International (A) 12.500%, 04/01/12 100 101 Prestige Brands 9.250%, 04/15/12 90 93 Sealy Mattress 8.250%, 06/15/14 200 210 Southern States Cooperative (A) 10.500%, 11/01/10 200 212 Spectrum Brands 7.375%, 02/01/15 300 240 Steinway Musical (A) 7.000%, 03/01/14 100 99 ------------------------------------------------------------ TOTAL CONSUMER PRODUCTS & SERVICES 1,791 ============================================================ CONTAINERS & PACKAGING [1.9%] Crown Americas 7.750%, 11/15/15 150 156 Graham Packaging 9.875%, 10/15/14 100 102 Intertape Polymer US 8.500%, 08/01/14 50 44 DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- Owens-Brockway Glass Container 6.750%, 12/01/14 $100 $ 99 Plastipak Holdings (A) 8.500%, 12/15/15 100 106 Solo Cup 8.500%, 02/15/14 150 128 Stone Container Finance 7.375%, 07/15/14 100 96 ------------------------------------------------------------ TOTAL CONTAINERS & PACKAGING 731 ============================================================ DIVERSIFIED METALS & MINING [0.3%] MAAX 9.750%, 06/15/12 200 137 ============================================================ DIVERSIFIED OPERATIONS [1.5%] Bombardier (A) 8.000%, 11/15/14 75 77 Kansas City Southern Railway 9.500%, 10/01/08 100 105 Stena 7.000%, 12/01/16 200 198 Trinity Industries 6.500%, 03/15/14 200 198 ------------------------------------------------------------ TOTAL DIVERSIFIED OPERATIONS 578 ============================================================ EDUCATIONAL SERVICES [0.3%] Education Management 10.250%, 06/01/16 60 65 8.750%, 06/01/14 60 63 ------------------------------------------------------------ TOTAL EDUCATIONAL SERVICES 128 ============================================================ UTILITIES [0.3%] NRG Energy 7.375%, 02/01/16 100 103 ============================================================ ELECTRICAL PRODUCTS [5.4%] AES (A) 9.000%, 05/15/15 300 320 7.750%, 03/01/14 100 105 Allegheny Energy Supply 7.800%, 03/15/11 200 212 Aquila 7.625%, 11/15/09 100 105 Calpine Generating (D) 11.070%, 04/01/10 200 207 CMS Energy 7.500%, 01/15/09 100 103 6.875%, 12/15/15 150 156 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 27 schedule of investments MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- HIGH YIELD BOND FUND (CONTINUED) DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- Edison Mission Energy 7.730%, 06/15/09 $200 $ 207 ESI Tractebel Acquisitions, Ser B 7.990%, 12/30/11 58 59 General Cable (A) 7.125%, 04/01/17 100 101 Mirant North America 7.375%, 12/31/13 150 154 Reliant Energy 9.500%, 07/15/13 200 218 Sierra Pacific Resources 8.625%, 03/15/14 70 76 TECO Energy 7.200%, 05/01/11 100 106 ------------------------------------------------------------ TOTAL ELECTRICAL PRODUCTS 2,129 ============================================================ ENERGY & POWER [0.3%] Aventine Renewable Energy Holding (A) 10.000%, 04/01/17 100 103 ============================================================ ENTERTAINMENT [7.9%] AMC Entertainment 11.000%, 02/01/16 100 114 Buffalo Thunder Development Authority (A) 9.375%, 12/15/14 100 102 Choctaw Resort Development Enterprise (A) 7.250%, 11/15/19 194 195 Chukchansi Economic Development Authority (A) 8.000%, 11/15/13 150 155 Circus & Eldorado Joint Venture/ Silver Legacy Capital 10.125%, 03/01/12 150 157 Greektown Holdings (A) 10.750%, 12/01/13 125 134 Herbst Gaming 8.125%, 06/01/12 150 152 Inn of the Mountain Gods Resort & Casino 12.000%, 11/15/10 150 163 Isle of Capri Casinos 7.000%, 03/01/14 200 196 Leslie's Poolmart 7.750%, 02/01/13 100 101 MGM Mirage 8.500%, 09/15/10 200 214 6.750%, 09/01/12 100 99 6.000%, 10/01/09 100 100 DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- Mohegan Tribal Gaming Authority 7.125%, 08/15/14 $150 $ 152 MTR Gaming Group, Ser B 9.750%, 04/01/10 200 209 OED/Diamond Jo 8.750%, 04/15/12 100 99 Penn National Gaming 6.875%, 12/01/11 100 100 Snoqualmie Entertainment Authority (A) 9.150%, 02/01/14 100 102 Speedway Motorsports 6.750%, 06/01/13 100 99 Tunica-Biloxi Gaming Authority (A) 9.000%, 11/15/15 125 133 Waterford Gaming (A) 8.625%, 09/15/12 101 107 Wynn Las Vegas Capital 6.625%, 12/01/14 200 198 ------------------------------------------------------------ TOTAL ENTERTAINMENT 3,081 ============================================================ FINANCIAL SERVICES [3.7%] Atlantic Broadband Finance 9.375%, 01/15/14 100 102 Ford Motor Credit 7.375%, 10/28/09 200 200 7.375%, 02/01/11 350 344 GMAC 6.750%, 12/01/14 675 664 Smurfit Kappa Funding 7.750%, 04/01/15 150 153 ------------------------------------------------------------ TOTAL FINANCIAL SERVICES 1,463 ============================================================ FOOD, BEVERAGE & TOBACCO [3.0%] Alliance One (A) 8.500%, 05/15/12 75 76 Beverages & More (A) 9.250%, 03/01/12 100 102 Chiquita Brands International 7.500%, 11/01/14 100 90 Del Monte 8.625%, 12/15/12 50 52 Friendly Ice Cream 8.375%, 06/15/12 200 196 Land O' Lakes 8.750%, 11/15/11 6 6 Le-Natures (A) (D) 10.000%, 06/15/13 150 54 Leiner Health Products 11.000%, 06/01/12 100 100 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 28 schedule of investments MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- HIGH YIELD BOND FUND (CONTINUED) DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- National Beef Packing 10.500%, 08/01/11 $100 $ 105 Pilgrim's Pride 8.375%, 05/01/17 100 99 Smithfield Foods, Ser B 8.000%, 10/15/09 100 104 Swift 12.500%, 01/01/10 200 210 ------------------------------------------------------------ TOTAL FOOD, BEVERAGE & TOBACCO 1,194 ============================================================ FORESTRY [0.2%] Tembec Industries 7.750%, 03/15/12 150 91 ============================================================ GAS/NATURAL GAS [1.1%] MarkWest Energy Partners, Ser B 8.500%, 07/15/16 150 156 Semgroup (A) 8.750%, 11/15/15 175 178 Williams (A) 7.250%, 02/01/17 100 106 ------------------------------------------------------------ TOTAL GAS/NATURAL GAS 440 ============================================================ GLASS PRODUCTS [0.3%] Advanced Medical Optics (A) 7.500%, 05/01/17 100 101 ============================================================ HOTELS & LODGING [0.3%] Seminole Hard Rock Entertainment (A) (C) 7.848%, 03/15/14 100 102 ============================================================ MACHINERY [0.9%] Case New Holland 9.250%, 08/01/11 100 105 Terex 7.375%, 01/15/14 100 103 Trimas 9.875%, 06/15/12 150 150 ------------------------------------------------------------ TOTAL MACHINERY 358 ============================================================ MEDICAL [2.0%] Bio-Rad Laboratories 7.500%, 08/15/13 100 103 Biovail 7.875%, 04/01/10 100 102 CDRV Investors (B) 0.000%, 01/01/15 200 172 DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- MQ Associates (B) 0.000%, 08/15/12 $150 $ 61 Mylan Laboratories 5.750%, 08/15/10 150 149 Tenet Healthcare 9.250%, 02/01/15 200 198 ------------------------------------------------------------ TOTAL MEDICAL 785 ============================================================ MEDICAL PRODUCTS & SERVICES [0.7%] HCA (A) 9.250%, 11/15/16 50 54 Idearc (A) 8.000%, 11/15/16 125 129 Vanguard Health Holding 9.000%, 10/01/14 100 101 ------------------------------------------------------------ TOTAL MEDICAL PRODUCTS & SERVICES 284 ============================================================ METALS & MINING [0.7%] Freeport-McMoRan Copper & Gold 8.250%, 04/01/15 125 134 Novelis 7.250%, 02/15/15 150 159 ------------------------------------------------------------ TOTAL METALS & MINING 293 ============================================================ MISCELLANEOUS BUSINESS SERVICES [3.3%] Affinion Group 11.500%, 10/15/15 150 165 Allied Security Escrow 11.375%, 07/15/11 150 153 Carriage Services 7.875%, 01/15/15 200 205 CCM Merger (A) 8.000%, 08/01/13 225 226 Compagnie Generale de Geophysique 7.500%, 05/15/15 100 103 Integrated Alarm Services Group (A) 12.000%, 11/15/11 100 99 Jacobs Entertainment 9.750%, 06/15/14 75 77 Mobile Services Group (A) 9.750%, 08/01/14 150 159 Seneca Gaming 7.250%, 05/01/12 100 101 ------------------------------------------------------------ TOTAL MISCELLANEOUS BUSINESS SERVICES 1,288 ============================================================ SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 29 schedule of investments MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- HIGH YIELD BOND FUND (CONTINUED) DESCRIPTION FACE AMOUNT (000) VALUE (000) ------------------------------------------------------------ MISCELLANEOUS MANUFACTURING [1.5%] AGY Holding (A) 11.000%, 11/15/14 $100 $ 104 American Railcar Industries (A) 7.500%, 03/01/14 50 51 Cellu Tissue Holdings 9.750%, 03/15/10 100 100 Dresser-Rand Group 7.375%, 11/01/14 133 136 KI Holdings (B) 0.000%, 11/15/14 250 210 ------------------------------------------------------------ TOTAL MISCELLANEOUS MANUFACTURING 601 ============================================================ PAPER & RELATED PRODUCTS [3.1%] Abitibi-Consolidated 7.750%, 06/15/11 100 96 Appleton Papers, Ser B 9.750%, 06/15/14 100 103 Domtar 7.125%, 08/15/15 150 149 Exopack Holding 11.250%, 02/01/14 100 107 Georgia-Pacific 7.700%, 06/15/15 100 103 JSG Funding 9.625%, 10/01/12 37 39 Newark Group 9.750%, 03/15/14 200 208 Norampac 6.750%, 06/01/13 100 99 Norske Skog Canada 7.375%, 03/01/14 250 242 Verso Paper Holdings (A) 9.125%, 08/01/14 65 68 ------------------------------------------------------------ TOTAL PAPER & RELATED PRODUCTS 1,214 ============================================================ PETROLEUM & FUEL PRODUCTS [9.7%] Atlas Pipeline Partners 8.125%, 12/15/15 200 206 Chesapeake Energy 6.250%, 01/15/18 100 99 Clayton William Energy 7.750%, 08/01/13 150 141 Colorado Interstate Gas 6.800%, 11/15/15 150 160 Comstock Resources 6.875%, 03/01/12 150 145 Dynegy Holdings 6.875%, 04/01/11 100 100 DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- El Paso 7.000%, 05/15/11 $275 $ 289 El Paso Production Holding 7.750%, 06/01/13 200 209 Forest Oil 8.000%, 06/15/08 150 153 8.000%, 12/15/11 100 104 Frontier Oil 6.625%, 10/01/11 150 150 Giant Industries 8.000%, 05/15/14 200 216 Pacific Energy 7.125%, 06/15/14 100 104 6.250%, 09/15/15 250 250 Parker Drilling 9.625%, 10/01/13 150 163 Pogo Producing 6.875%, 10/01/17 300 292 Pride International 7.375%, 07/15/14 100 103 Regency Energy Partners (A) 8.375%, 12/15/13 100 102 Swift Energy 7.625%, 07/15/11 100 103 Targa Resources (A) 8.500%, 11/01/13 200 204 Whiting Petroleum 7.000%, 02/01/14 300 292 Williams 7.625%, 07/15/19 50 54 6.375%, 10/01/10 (A) 150 152 ------------------------------------------------------------ TOTAL PETROLEUM & FUEL PRODUCTS 3,791 ============================================================ PRINTING & PUBLISHING [4.0%] Dex Media (B) 8.738%, 11/15/13 200 186 Dex Media East 9.875%, 11/15/09 100 104 Dex Media West, Ser B 8.500%, 08/15/10 100 105 Haights Cross Operating 11.750%, 08/15/11 200 210 Lyondell Chemical 8.000%, 09/15/14 60 63 MediMedia USA (A) 11.375%, 11/15/14 50 53 Primedia 8.000%, 05/15/13 100 104 Reader's Digest Association (A) 9.000%, 02/15/17 75 72 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 30 schedule of investments MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- HIGH YIELD BOND FUND (CONTINUED) DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- RH Donnelley 6.875%, 01/15/13 $200 $ 194 Sheridan Group 10.250%, 08/15/11 150 157 Valassis Communications (A) 8.250%, 03/01/15 140 138 Visant Holding 8.750%, 12/01/13 100 104 Warner Music Group 7.375%, 04/15/14 100 95 ------------------------------------------------------------ TOTAL PRINTING & PUBLISHING 1,585 ============================================================ REAL ESTATE INVESTMENT TRUST [0.4%] Host Marriott, Ser O 6.375%, 03/15/15 150 149 ============================================================ RETAIL [1.8%] Buffets 12.500%, 11/01/14 100 104 Group 1 Automotive 8.250%, 08/15/13 100 104 Landry's Restaurants, Ser B 7.500%, 12/15/14 100 99 NPC International 9.500%, 05/01/14 100 103 Rite Aid 8.125%, 05/01/10 100 103 Sbarro (A) 10.375%, 02/01/15 50 52 True Temper Sports 8.375%, 09/15/11 150 133 ------------------------------------------------------------ TOTAL RETAIL 698 ============================================================ RUBBER & PLASTIC [0.4%] Goodyear Tire & Rubber 9.000%, 07/01/15 150 165 ============================================================ SEMI-CONDUCTORS [1.1%] Amkor Technology 9.250%, 06/01/16 100 104 Flextronics International 6.250%, 11/15/14 100 97 Freescale Semiconductor (A) 10.125%, 12/15/16 150 151 Sensata Technologies 8.000%, 05/01/14 100 99 ------------------------------------------------------------ TOTAL SEMI-CONDUCTORS 451 ============================================================ DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- SPECIAL PURPOSE ENTITY [0.4%] Hawker Beechcraft Acquision (A) 8.500%, 04/01/15 $100 $ 104 Seitel (A) 9.750%, 02/15/14 50 51 ------------------------------------------------------------ TOTAL SPECIAL PURPOSE ENTITY 155 ============================================================ STEEL & STEEL WORKS [1.2%] AK Steel 7.875%, 02/15/09 58 58 7.750%, 06/15/12 150 153 Gerdau Ameristeel 10.375%, 07/15/11 100 106 International Steel Group 6.500%, 04/15/14 150 156 ------------------------------------------------------------ TOTAL STEEL & STEEL WORKS 473 ============================================================ TELEPHONES & TELECOMMUNICATIONS [8.3%] American Cellular, Ser B 10.000%, 08/01/11 25 26 American Tower 7.125%, 10/15/12 150 154 Centennial Communications 10.125%, 06/15/13 100 108 8.125%, 02/01/14 50 52 Cincinnati Bell 8.375%, 01/15/14 185 189 Dobson Cellular Systems 9.875%, 11/01/12 230 251 Dobson Communications (C) 9.610%, 10/15/12 250 257 Insight Midwest 9.750%, 10/01/09 104 106 IPCS 11.500%, 05/01/12 150 165 Level 3 Financing (A) 9.250%, 11/01/14 125 128 MetroPCS Wireless (A) 9.250%, 11/01/14 100 106 Nordic Telephone (A) 8.875%, 05/01/16 50 54 NTL Cable 9.125%, 08/15/16 150 158 PanAmSat 9.000%, 08/15/14 96 104 Qwest 7.625%, 06/15/15 564 602 5.625%, 11/15/08 100 100 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 31 schedule of investments MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- HIGH YIELD BOND FUND (CONCLUDED) DESCRIPTION FACE AMOUNT (000)/SHARES VALUE (000) - ----------------------------------------------------------------- Rogers Wireless 9.625%, 05/01/11 $100 $ 114 7.250%, 12/15/12 50 53 Rural Cellular 9.750%, 01/15/10 200 206 Telenet Group Holding (A) (B) 9.651%, 06/15/14 22 21 Time Warner Telecom Holdings 9.250%, 02/15/14 100 107 Triton PCS 8.500%, 06/01/13 150 155 West (A) 11.000%, 10/15/16 55 58 ------------------------------------------------------------ TOTAL TELEPHONES & TELECOMMUNICATIONS 3,274 ============================================================ TRANSPORTATION SERVICES [1.0%] Navios Maritime Holdings (A) 9.500%, 12/15/14 100 104 NCL 10.625%, 07/15/14 100 99 Ship Finance International 8.500%, 12/15/13 200 205 ------------------------------------------------------------ TOTAL TRANSPORTATION SERVICES 408 ============================================================ WASTE DISPOSAL [0.3%] Allied Waste North America, Ser B 7.125%, 05/15/16 100 102 ============================================================ WHOLESALE [0.6%] Activant Solutions 9.500%, 05/01/16 100 98 Baldor Electric 8.625%, 02/15/17 50 53 Collins & Aikman Floor Cover, Ser B 9.750%, 02/15/10 100 102 ------------------------------------------------------------ TOTAL WHOLESALE 253 ============================================================ TOTAL CORPORATE BONDS (Cost $37,317) 38,131 ======================================================== COMMON STOCK [0.4%] BROADCASTING & CABLE [0.2%] Olympus* 8,500 9 Time Warner Cable, Cl A* 1,784 67 ------------------------------------------------------------ TOTAL BROADCASTING & CABLE 76 ============================================================ DESCRIPTION SHARES VALUE (000) - ----------------------------------------------------------------- BUILDING & CONSTRUCTION SUPPLIES [0.0%] Dayton Superior* 149 $ 2 ============================================================ RETAIL [0.2%] Crunch Equity Holding* 56 84 ============================================================ TOTAL COMMON STOCK (Cost $143) 162 ======================================================== CASH EQUIVALENTS [1.6%] Evergreen Select Money Market, Institutional Class, 5.34%** 318,132 318 Fidelity Institutional Domestic Money Market Portfolio, Cl I, 5.22%** 318,132 318 ------------------------------------------------------------ TOTAL CASH EQUIVALENTS (Cost $636) 636 ======================================================== WARRANTS [0.0%] Diva Systems*, Expires 03/01/08 (A) 600 -- Pliant*, Expires 06/01/10 (A) 100 -- ------------------------------------------------------------ TOTAL WARRANTS (Cost $0) -- ======================================================== TOTAL INVESTMENTS [99.3%] (Cost $38,096) $38,929 ======================================================== PERCENTAGES ARE BASED ON NET ASSETS OF $39,205 ($ THOUSANDS). * NON-INCOME PRODUCING SECURITY ** RATE SHOWN IS THE 7-DAY EFFECTIVE YIELD AS OF MARCH 31, 2007. (A) SECURITY EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT OF 1933. THESE SECURITIES MAY BE RESOLD IN TRANSACTIONS EXEMPT FROM REGISTRATION NORMALLY TO QUALIFIED INSTITUTIONS. ON MARCH 31, 2007, THE VALUE OF THESE SECURITIES AMOUNTED TO $7,238 ($ THOUSANDS), REPRESENTING 18.5% OF THE NET ASSETS OF THE FUND. (B) STEP BOND -- THE RATE REFLECTED ON THE SCHEDULE OF INVESTMENTS IS THE RATE IN EFFECT ON MARCH 31, 2007. THE COUPON ON A STEP BOND CHANGES ON A SPECIFIC DATE. (C) FLOATING RATE SECURITY -- THE RATE REFLECTED ON THE SCHEDULE OF INVESTMENTS IS THE RATE IN EFFECT ON MARCH 31, 2007. (D) IN DEFAULT ON INTEREST PAYMENTS. CL -- CLASS SER -- SERIES AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 32 schedule of investments MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- PRIME MONEY MARKET FUND [Bar Graph Omitted] Percentages are as follows: SECTOR WEIGHTINGS*: 41.8% Repurchase Agreements 29.0% Commercial Paper 17.3% Corporate Bond 9.5% Certificate of Deposit 2.1% U.S. Government Agency Obligations 0.2% Mortgaged-Backed 0.1% Cash Equivalent * Percentages based on total investments. DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- COMMERCIAL PAPER (A) [29.0%] ASSET BACKED SECURITIES [16.9%] Amsterdam Funding 5.250%, 04/10/07 $ 25,000 $ 24,967 Barton Capital 5.300%, 04/11/07 25,000 24,963 Duke Funding High Grade 5.275%, 04/20/07 35,000 34,903 Kitty Hawk Fund 5.250%, 04/20/07 35,000 34,903 Laguna 5.240%, 06/05/07 35,000 34,669 Ranger Funding 5.250%, 04/18/07 25,000 24,938 Versailles 5.280%, 04/19/07 35,000 34,908 Windmill Funding 5.250%, 04/10/07 25,000 24,967 Yorktown Capital 5.260%, 05/08/07 25,000 24,865 ------------------------------------------------------------ TOTAL ASSET BACKED SECURITIES 264,083 ============================================================ BANKS [1.6%] Lloyds TSB Bank 5.265%, 04/02/07 25,000 24,996 ============================================================ COMPUTER SYSTEM DESIGN & SERVICES [4.5%] Hewlett-Packard 5.250%, 04/24/07 35,000 34,869 IBM Capital 5.250%, 04/24/07 35,000 34,883 ------------------------------------------------------------ TOTAL COMPUTERS SYSTEM DESIGN & SERVICES 69,752 ============================================================ FINANCE AUTO LOANS [2.2%] Toyota Motor Credit 5.235%, 04/12/07 35,000 34,944 DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- INSURANCE [1.6%] Prudential Funding 5.260%, 04/19/07 $ 25,000 $ 24,934 ============================================================ SECURITY BROKERS & DEALERS [2.2%] Bear Stearns 5.240%, 04/13/07 35,000 34,939 ============================================================ TOTAL COMMERCIAL PAPER (Cost $453,648) 453,648 ======================================================== CORPORATE BONDS [17.3%] BANKS [5.5%] Bank of America 5.310%, 04/24/07 35,000 35,000 CIT Group 7.375%, 04/02/07 6,250 6,250 Royal Bank of Canada 5.320%, 03/20/08 19,225 19,227 UBS 5.400%, 11/28/07 25,000 25,000 ------------------------------------------------------------ TOTAL BANKS 85,477 ============================================================ FINANCIAL SERVICES [7.7%] American Honda (B) 5.320%, 01/28/08 35,000 35,000 General Electric 5.388%, 03/04/08 25,000 25,019 Sigma Financial (B) 5.318%, 11/21/07 35,000 35,000 SLM, Ser A, MTN 5.625%, 04/10/07 25,000 25,001 ------------------------------------------------------------ TOTAL FINANCIAL SERVICES 120,020 ============================================================ INSURANCE [0.5%] Prudential Insurance (B) 7.650%, 07/01/07 8,350 8,396 ============================================================ INVESTMENT BANKER/BROKER DEALER [1.3%] Lehman Brothers Holdings 4.000%, 01/22/08 20,000 19,793 ============================================================ SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 33 schedule of investments MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- PRIME MONEY MARKET FUND (CONTINUED) DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- PERSONAL CREDIT INSTITUTIONS [2.3%] American Express Bank 5.290%, 01/22/08 $ 20,000 $ 20,000 Household Finance 5.836%, 02/15/08 16,300 16,381 ------------------------------------------------------------ TOTAL PERSONAL CREDIT INSTITUTIONS 36,381 ============================================================ TOTAL CORPORATE BONDS (Cost $270,067) 270,067 ======================================================== CERTIFICATES OF DEPOSIT [9.5%] Bank of Ireland 5.340%, 08/09/07 29,000 29,000 Barclays Bank 5.330%, 03/26/08 25,000 25,000 Citibank 5.305%, 04/27/07 35,000 35,000 Deutsche Bank 5.260%, 04/05/07 35,000 35,000 Societe Generale 5.290%, 07/26/07 25,000 25,000 ------------------------------------------------------------ TOTAL CERTIFICATES OF DEPOSIT (Cost $149,000) 149,000 ======================================================== U.S. GOVERNMENT AGENCY OBLIGATIONS [2.1%] FHLB 4.250%, 04/16/07 5,000 4,998 5.150%, 06/22/07 5,000 5,000 5.250%, 10/26/07 5,000 5,000 5.300%, 03/19/08 5,000 5,000 FNMA 5.150%, 11/21/07 5,000 4,998 5.150%, 02/04/08 7,984 7,981 ------------------------------------------------------------ TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (Cost $32,977) 32,977 ======================================================== MORTGAGE-BACKED SECURITY [0.2%] Capital Auto Receivable Asset Trust, Ser 06, Cl SN-1 2,780 2,780 ============================================================ TOTAL MORTGAGE-BACKED SECURITY (Cost $2,780) 2,780 ======================================================== DESCRIPTION SHARES/FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- CASH EQUIVALENT [0.1%] Fidelity Institutional Domestic Money Market Portfolio, Cl I, 5.17%* 931,926 $ 932 ------------------------------------------------------------ TOTAL CASH EQUIVALENT (Cost $932) 932 ======================================================== REPURCHASE AGREEMENTS (C) [41.9%] Banc of America 5.380%, date 03/30/07, repurchased on 04/02/07, repurchase price $125,056,042 (collateralized by a U.S. Government obligation, par value $198,729,018, 5.000%, 03/01/34; with total market value $127,500,001) $125,000 125,000 Barclay Bank 5.390%, dated 03/30/07, repurchased on 04/02/07, repurchase price $154,269,262 (collateralized by various U.S. Government obligations, ranging in par value $9,658,139-$46,108,532 5.645%-6.000%, 07/01/36- 03/01/37; with total market value $157,284,000) 154,200 154,200 Bear Stearns 5.380%, dated 03/30/07, repurchased on 04/02/07, repurchase price $150,067,250 (collateralized by various U.S. Government obligations, ranging in par value $29,915,000-$45,084,648, 4.000%-7.500%, 08/01/13- 03/01/36; with total market value $153,002,992) 150,000 150,000 Lehman Brothers 5.370%, dated 03/30/07, repurchased on 04/02/07, repurchase price $100,044,750 (collateralized by various U.S. Government obligations, ranging in par value $22,480,000-$93,500,000, 6.000%-6.500%, 01/01/24- 03/01/37 with total market value $102,001,887) 100,000 100,000 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 34 schedule of investments MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- PRIME MONEY MARKET FUND (CONCLUDED) DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- Nomura 5.410%, dated 03/30/07, repurchased on 04/02/07, repurchase price $125,056,354 (collateralized by various U.S. Government obligations, ranging in par value $41,433,743-$100,001,008, 6.157%-6.885%, 07/01/35- 09/01/36; with total market value $127,500,001) $125,000 $125,000 ------------------------------------------------------------ TOTAL REPURCHASE AGREEMENTS (Cost $654,200) 654,200 ======================================================== TOTAL INVESTMENTS [100.1%] (Cost $1,563,604) $1,563,604 ======================================================== PERCENTAGES ARE BASED ON NET ASSETS OF $1,562,566 ($ THOUSANDS). * RATE SHOWN IS THE 7-DAY EFFECTIVE YIELD AS OF MARCH 31, 2007. (A) THE RATE REPORTED IS THE EFFECTIVE YIELD AT TIME OF PURCHASE. (B) SECURITY EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT OF 1933. THESE SECURITIES MAY BE RESOLD IN TRANSACTIONS EXEMPT FROM REGISTRATION NORMALLY TO QUALIFIED INSTITUTIONS. ON MARCH 31, 2007, THE VALUE OF THESE SECURITIES AMOUNTED TO $78,396 ($ THOUSANDS), REPRESENTING 5.0% OF THE NET ASSETS OF THE FUND. (C) TRI-PARTY REPURCHASE AGREEMENT CL -- CLASS FHLB -- FEDERAL HOME LOAN BANK FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION MTN -- MEDIUM TERM NOTE SER -- SERIES SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 35 schedule of investments MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- GOVERNMENT MONEY MARKET FUND [Bar Graph Omitted] Percentages are as follows: SECTOR WEIGHTINGS*: 50.4% Repurchase Agreements 49.6% U.S. Government Agency Obligations * Percentages based on total investments. DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- U.S. GOVERNMENT AGENCY OBLIGATIONS [49.5%] FAMC 5.250%, 01/11/08 $ 14,725 $ 14,725 FHLB 5.100%, 04/03/07 (A) 50,000 49,986 5.150%, 04/09/07 (A) 75,000 74,914 5.150%, 04/11/07 (A) 100,000 99,857 4.250%, 04/16/07 31,930 31,917 5.170%, 04/20/07 (A) 50,000 49,864 3.500%, 05/15/07 45,000 44,901 4.625%, 05/18/07 36,010 35,984 5.150%, 06/22/07 25,000 25,000 3.125%, 08/15/07 15,530 15,411 4.750%, 08/17/07 21,000 20,961 5.260%, 10/23/07 25,000 25,000 5.250%, 10/26/07 37,060 37,060 4.125%, 10/26/07 20,000 19,875 5.500%, 12/27/07 15,000 15,029 5.290%, 01/10/08 25,500 25,500 5.250%, 01/16/08 9,445 9,445 4.000%, 02/01/08 10,520 10,413 5.280%, 02/07/08 20,000 20,003 5.250%, 02/13/08 10,780 10,795 5.125%, 02/26/08 23,690 23,699 5.300%, 03/05/08 20,000 20,000 5.300%, 03/19/08 25,000 25,000 FHLMC 3.750%, 04/15/07 200,000 199,843 5.150%, 04/30/07 (A) 25,000 24,896 5.248%, 11/30/07 (A) 13,107 12,662 5.350%, 03/26/08 25,000 25,000 FHLMC MTN 5.140%, 12/14/07 38,645 38,637 FNMA 5.250%, 04/15/07 46,383 46,379 3.250%, 04/20/07 5,000 4,995 5.140%, 05/01/07 (A) 50,000 49,786 3.875%, 05/15/07 50,000 49,910 4.250%, 07/15/07 20,024 19,960 5.150%, 11/21/07 25,000 24,989 5.150%, 02/04/08 10,000 9,996 ------------------------------------------------------------ TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (Cost $1,212,392) 1,212,392 ======================================================== DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- REPURCHASE AGREEMENTS (B) [50.2%] Bank of America 5.380%, dated 03/30/07, repurchased on 04/02/07, repurchase price $225,100,875 (collateralized by a U.S. Government obligation, par value $237,925,037, 5.000%, 03/01/35; with total market value $229,500,000) $225,000 $225,000 Barclay Bank 5.390%, dated 03/30/07, repurchased on 04/02/07, repurchase price $229,734,394 (collateralized by U.S. Government obligations, ranging in par value $3,228,203-$67,696,245, 3.791%-6.019%, 04/01/09- 11/01/36; with total market value $234,294,000) 229,700 229,700 Bear Stearns, Inc. & Co. 5.320%, dated 03/30/07, repurchased on 04/02/07, repurchase price $225,033,253 (collateralized by U.S. Treasury obligations, ranging in par value $44,716,780-$54,456,000, 4.500%-6.000%, 04/01/20- 12/01/36, with total market value $229,503,173) 225,000 225,000 Deutsche Bank 5.380%, dated 03/30/07, repurchased on 04/02/07, repurchase price $150,067,250 (collateralized by U.S. Government obligations, ranging in par value $21,755,880-$37,144,000, 5.500%-6.500%, 08/25/15- 08/25/32; with total market value $153,000,000) 150,000 150,000 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 36 schedule of investments MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- GOVERNMENT MONEY MARKET FUND (CONCLUDED) DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- Lehman Brothers 5.280%, dated 03/30/07, repurchased on 04/02/07, repurchase price $100,014,670 (collateralized by U.S. Government obligations, ranging in par value $4,980,000-$50,115,372, 4.500%-5.000%, 09/01/18- 11/01/19; with total market value $102,004,940) $100,000 $100,000 Nomura 5.410%, dated 03/30/07, repurchased on 04/02/07, repurchase price $200,030,059 (collateralized by U.S. Government obligations, ranging in par value $346,369-$66,266,563, 3.725%-8.799%, 12/01/16- 04/01/36; with total market value $204,000,001) 200,000 200,000 UBS Warburg 5.310%, dated 03/30/07, repurchased on 04/02/07, repurchase price $100,059,000 (collateralized by U.S. Government obligations, ranging in par value $26,255,000-$58,885,000, 4.500%-5.000%, 111/01/20- 12/01/36; with total market value $102,001,748) 100,000 100,000 ------------------------------------------------------------ TOTAL REPURCHASE AGREEMENTS (Cost $1,229,700) 1,229,700 ======================================================== TOTAL INVESTMENTS [99.7%] (Cost $2,442,092) $2,442,092 ======================================================== PERCENTAGES ARE BASED ON NET ASSETS OF $2,448,995 ($ THOUSANDS). (A) THE RATE REPORTED IS THE EFFECTIVE YIELD AT TIME OF PURCHASE. (B) TRI-PARTY REPURCHASE AGREEMENT FAMC -- FEDERAL AGRICULTURAL MORTGAGE CORPORATION FHLB -- FEDERAL HOME LOAN BANK FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION MTN -- MEDIUM TERM NOTE SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 37 schedule of investments MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT MONEY MARKET FUND [Bar Graph Omitted] Percentages are as follows: SECTOR WEIGHTINGS*: 15.7% General Obligation 12.5% General Revenue 11.8% Housing 10.2% Water 9.4% Power 8.2% Education 8.0% Industrial Development 7.2% Transportation 5.6% Healthcare 5.2% Utilities 4.9% Public Facilities 0.8% Commercial Paper 0.5% Equipment * Percentages based on total investments. DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- MUNICIPAL BONDS [99.9%] CALIFORNIA [99.3%] ABAG, Finance Authority for Non-Profit Corporations, Hamlin School Project, Ser A, GO (A) (B) (C) 3.550%, 08/01/32 $ 1,500 $ 1,500 ABAG, Finance Authority for Non-Profit Corporations, Public Policy Institute, Ser A, RB (A) (B) (C) 3.550%, 11/01/31 2,915 2,915 ABAG, Finance Authority for Non-Profit Corporations, School of the Sacred Heart, Ser B, RB (A) (B) (C) 3.690%, 06/01/30 8,100 8,100 ABAG, Finance Authority for Non-Profit Corporations, Ser C, COP (A) (B) (C) 3.650%, 10/01/27 9,920 9,920 ABAG, Finance Authority for Non-Profit Corporations, Ser D, COP (A) (B) (C) 3.650%, 10/01/27 2,400 2,400 Anaheim, Multi-Family Housing Authority, Heritage Village Apartments Project, Ser A, RB (A) (B) (D) 3.550%, 07/15/33 4,685 4,685 Berkeley, TRAN 4.000%, 10/31/07 9,550 9,580 Berkeley, YMCA Project, RB (A) (B) (C) 3.550%, 06/01/23 1,850 1,850 DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- California State, Community College Financing Authority, Ser A, TRAN, FSA 4.500%, 06/29/07 $ 4,500 $ 4,509 California State, Daily Kindergarten University, Ser B-1, GO (A) (B) (C) 3.650%, 05/01/34 4,200 4,200 California State, Department of Water Resource & Power, Ser A, RB, MBIA (A) (B) 5.250%, 05/01/07 2,590 2,593 California State, Department of Water Resource & Power, Ser C-15, RB (A) (B) (C) 3.550%, 05/01/22 5,000 5,000 California State, Department of Water Resource & Power, Sub-Ser F-2, RB (A) (B) (C) 3.670%, 05/01/20 8,100 8,100 California State, Department of Water Resource & Power, Sub-Ser G-3, RB, FSA (A) (B) 3.550%, 05/01/16 1,050 1,050 California State, Department of Water Resource & Power, Sub-Ser G-4, RB, FSA (A) (B) 3.490%, 05/01/16 10,000 10,000 California State, Department of Water Resourse & Power, Ser B-6, RB (A) (B) (C) 3.610%, 05/01/22 1,200 1,200 California State, Economic Development Financing Authority, KQED Project, RB (A) (B) (C) 3.550%, 04/01/20 1,300 1,300 California State, Economic Recovery Authority, Ser C, RB Callable 04/10/07 @ 100 (A) (B) 3.650%, 07/01/23 11,135 11,135 California State, Economic Recovery Authority, Ser C-12, RB (A) (B) 3.550%, 07/01/23 1,100 1,100 California State, Economic Recovery Authority, Ser C-13, RB, XLCA (A) (B) 3.550%, 07/01/23 5,000 5,000 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 38 schedule of investments MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT MONEY MARKET FUND (CONTINUED) DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- California State, Economic Recovery Authority, Ser C-4, RB (A) (B) 3.680%, 07/01/23 $ 5,325 $ 5,325 California State, Economic Recovery Authority, Ser C-8, RB (A) (B) (C) 3.550%, 07/01/23 3,000 3,000 California State, Educational Facilities Authority, Chapman University Project, RB (A) (B) (C) 3.550%, 12/01/30 1,000 1,000 California State, Educational Facilities Authority, University San Francisco, RB (A) (B) (C) 3.470%, 05/01/30 5,200 5,200 California State, Health Facilities Finance Authority, Adventist Health Systems Project, Ser B, RB (A) (B) (C) 3.630%, 09/01/25 4,400 4,400 California State, Health Facilities Finance Authority, Adventist Hospital Project, Ser A, RB, MBIA (A) (B) 3.680%, 09/01/28 4,400 4,400 California State, Infrastructure & Economic Authority, Asian Art Museum Foundation Project, RB, MBIA (A) (B) 3.680%, 06/01/34 14,100 14,100 California State, Infrastructure & Economic Authority, Contemporary Jewish Museum Project, RB (A) (B) (C) 3.650%, 12/01/36 5,000 5,000 California State, Kindergarten- University Project, Ser B-3, GO 3.610%, 05/01/34 2,300 2,300 California State, RAN 4.500%, 06/29/07 7,650 7,670 California State, Ser B, Sub-Ser B-1, GO (A) (B) (C) 3.560%, 05/01/40 19,000 19,000 California State, Ser B, Sub-Ser B-7, GO (A) (B) (C) 3.650%, 05/01/40 3,425 3,425 California State, Ser B-1, GO (A) (B) (C) 3.530%, 05/01/33 7,000 7,000 DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- California State, Ser C-2, GO (A) (B) (C) 3.550%, 05/01/33 $ 7,700 $ 7,700 California State, Weekly Kindgarten University, Ser B-5, GO (A) (B) (C) 3.560%, 05/01/34 11,525 11,525 California Statewide, Communities Development Authority, Childrens Hospital Project, Ser A, RB, AMBAC (A) (B) 3.540%, 08/15/32 3,210 3,210 California Statewide, Communities Development Authority, Childrens Hospital Project, Ser B, RB, AMBAC (A) (B) 3.540%, 08/15/32 1,800 1,800 California Statewide, Communities Development Authority, Monterey County Project, Ser A-3, TRAN 4.500%, 06/29/07 5,000 5,011 California Statewide, Communities Development Authority, North Peninsula Jewish Project, RB (A) (B) (C) 3.680%, 07/01/34 6,300 6,300 Contra Costa County, Ser A, TRAN 4.500%, 12/11/07 5,000 5,038 Corona, Multi-Family Housing Authority, Country Hills Project, Ser A, RB (A) (B) (D) 3.540%, 02/01/25 6,355 6,355 East Bay, Municipal Utilities District Authority, Ser A, RB, FSA (A) (B) 3.540%, 06/01/25 8,915 8,915 East Bay, Municipal Utilities District Authority, Sub-Ser 1, RB, XLCA (A) (B) 3.550%, 06/01/38 6,700 6,700 East Bay, Municipal Utilities District Authority, Sub-Ser B-1, RB, XLCA (A) (B) 3.550%, 06/01/38 13,880 13,880 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 39 schedule of investments MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT MONEY MARKET FUND (CONTINUED) DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- East Bay, Municipal Utilities District Authority, Sub-Ser B-3, RB, XLCA (A) (B) 3.500%, 06/01/38 $ 4,985 $ 4,985 Eastern California, Municipal Water District, COP, Ser B, TA, FGIC (A) (B) 3.550%, 07/01/20 5,000 5,000 Fremont, Family Center Finance Project, COP (A) (B) (C) 3.490%, 08/01/28 4,300 4,300 Fremont, Office Building Improvement & Fire Equipment Project, COP (A) (B) (C) 3.490%, 08/01/30 3,345 3,345 Fresno, Multi-Family Housing Authority, Stonepine Apartment Project, Ser A, RB (A) (B) (D) 3.540%, 02/15/31 2,495 2,495 Fresno, Palm Lakes Apartment Project, RB (A) (B) (C) 3.580%, 05/01/15 3,615 3,615 Glendale, Police Building Project, COP (A) (B) 3.540%, 06/01/30 19,600 19,600 Grant, Joint Union High School District, School Facility Bridge Funding Project, COP, FSA (A) (B) 3.550%, 09/01/34 1,000 1,000 Huntington Beach, Union High School District, School Facility Bridge Funding Project, COP, FSA (A) (B) 3.550%, 09/01/28 1,890 1,890 Irvine Ranch, Water District #140-240-105-250, GO (A) (B) (C) 3.610%, 04/01/33 9,125 9,125 Irvine Ranch, Water District, GO (A) (B) (C) 3.650%, 01/01/21 3,300 3,300 Irvine, Improvement Board, Act 1915 Project, District #03-19, Ser A, SAB (A) (B) (C) 3.610%, 09/02/29 5,393 5,393 Irvine, Improvement Board, Act 1915 Project, District #03-19, Ser B, SAB (A) (B) 3.650%, 09/02/29 2,000 2,000 DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- Irvine, Improvement Board, Act 1915 Project, District #05-21, Ser A, RB (A) (B) (C) 3.650%, 09/02/31 $15,500 $ 15,500 Irvine, Improvement Board, Act 1915 Project, District #87-8, SAB (A) (B) (C) 3.630%, 09/02/24 1,100 1,100 Irvine, Improvement Board, Act 1915 Project, District #93-14, SAB (A) (B) (C) 3.650%, 09/02/25 5,267 5,267 Kern County, TRAN 4.500%, 06/29/07 5,000 5,012 Kings County, Multi-Family Housing Authority, Edgewater Isle Apartments Project, Ser A, RB (A) (B) (D) 3.540%, 02/15/31 13,410 13,410 Lemon Grove, Multifamily Housing, Hillside Terrace Project, RB (A) (B) (D) 3.540%, 02/15/31 4,955 4,955 Los Angeles County, Multi- Family Housing Authority, Malibu Canyon Apartments Project, Ser B, RB (A) (B) (C) 3.560%, 06/01/10 8,000 8,000 Los Angeles County, Ser A, TRAN 4.500%, 06/29/07 13,000 13,030 Los Angeles, Department of Water & Power, Sub-Ser B-1, RB (A) (B) 3.540%, 07/01/35 7,000 7,000 Los Angeles, Metropolitan Transit Commission, Ser A, RB, FGIC (A) (B) 3.540%, 07/01/12 8,530 8,530 Los Angeles, Metropolitan Transportation Authority, Proposition C, Ser A, RB, MBIA (A) (B) 3.550%, 07/01/20 11,015 11,015 Los Angeles, Unified School District, Administration Building Project, Ser A, COP, AMBAC (A) (B) 3.500%, 10/01/24 8,365 8,365 Los Angeles, Unified School District, TRAN 4.000%, 12/03/07 3,155 3,164 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 40 schedule of investments MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT MONEY MARKET FUND (CONTINUED) DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- Los Angeles, Wastewater Systems, Sub-Ser B-1, RB, XLCA (A) (B) 3.520%, 06/01/28 $ 4,480 $ 4,480 Los Angeles, Water & Power Resource Authority, Power System Project, Sub-Ser A-7, RB (A) (B) 3.560%, 07/01/35 15,000 15,000 Los Angeles, Water & Power Resource Authority, Sub-Ser B-2, RB (A) (B) 3.500%, 07/01/34 2,000 2,000 Los Angeles, Water & Power Resource Authority, Sub-Ser B-3, RB (A) (B) 3.650%, 07/01/34 5,475 5,475 Moorpark, Unified School District, Ser A, COP, FSA (A) (B) 3.550%, 11/01/28 1,000 1,000 Mount Diablo, Unified School District, TRAN 4.000%, 11/21/07 5,000 5,018 Newport Beach, Hoag Memorial Hospital, Ser A, RB (A) (B) 3.650%, 10/01/26 5,700 5,700 Newport Beach, Hoag Memorial Hospital, Ser B, RB (A) (B) 3.650%, 10/01/26 1,045 1,045 Newport Beach, Hoag Memorial Hospital, Ser C, RB Callable 04/10/07 @ 100 (A) (B) 3.650%, 10/01/26 7,870 7,870 Oakland, Capital Equipment Project, COP (A) (B) (C) 3.550%, 12/01/15 3,590 3,590 Oakland-Alameda County, Coliseum Project, Ser C-1, RB (A) (B) (C) 3.530%, 02/01/25 15,000 15,000 Orange County, Apartment Development Authority, Bear Brand Apartments Project, RB (A) (B) (D) 3.550%, 11/01/07 1,900 1,900 DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- Orange County, Apartment Development Authority, Hidden Hills Project, Ser C, RB (A) (B) 3.560%, 11/01/09 $ 3,200 $ 3,200 Orange County, Apartment Development Authority, Larkspur Canyon Apartments, Ser A, RB (A) (B) (D) 3.570%, 06/15/37 1,200 1,200 Orange County, Apartment Development Authority, Riverbend Apartments Project, Ser B, RB (A) (B) (D) 3.570%, 12/01/29 5,000 5,000 Orange County, Apartment Development Authority, Seaside Meadow Project, Ser C, RB (A) (B) (D) 3.550%, 08/01/08 8,000 8,000 Orange County, Improvement Board District No. 88, RB (A) (B) (C) 3.680%, 09/02/18 1,100 1,100 Orange County, Sanitation District Authority, Ser A, COP (A) (B) 3.630%, 08/01/29 1,755 1,755 Orange County, Sanitation District Authority, Ser B, COP (A) (B) 3.630%, 08/01/30 1,300 1,300 Orange County, Water District Authority, Ser A, COP (A) (B) 3.540%, 08/01/42 2,800 2,800 Pasadena, Public Financing Authority, Rose Bowl Refinancing & Improvement Project, RB (A) (B) (C) 3.440%, 12/01/23 5,000 5,000 Riverside County, Ser C, COP (A) (B) (C) 3.510%, 12/01/15 14,700 14,700 Riverside, Unified School District, Ser C, School Facility Bridge Funding Project, COP, FSA (A) (B) 3.550%, 09/01/27 1,610 1,610 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 41 schedule of investments MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT MONEY MARKET FUND (CONTINUED) DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- Sacramento County, Housing Authority, Bent Tree Apartments Project, Ser A, RB (A) (B) (D) 3.540%, 02/15/31 $ 2,500 $ 2,500 Sacramento County, TRAN 4.500%, 07/17/07 7,000 7,018 San Bernardino County, Housing Authority, Alta Loma Heritage Project, Ser A, RB (A) (B) (C) 3.560%, 02/01/23 1,354 1,354 San Diego County, School District, Ser A, TRAN 4.500%, 07/27/07 6,000 6,015 San Diego, Museum of Art Project, COP (A) (B) (C) 3.690%, 09/01/30 1,400 1,400 San Diego, Unified School District, Ser A, TRAN 4.500%, 07/24/07 4,000 4,010 San Francisco (City & County), Housing Authority, Bayside Village Project D, Ser A, RB (A) (B) (C) 3.560%, 12/01/16 6,000 6,000 San Francisco (City & County), Moscone Center Expansion Project, Ser 2, RB, AMBAC (A) (B) 3.500%, 04/01/30 1,150 1,150 San Francisco Bay Area Toll Authority, Ser A-1, RB, AMBAC (A) (B) 3.460%, 04/01/45 5,000 5,000 San Francisco, Bay Area Toll Authority, Ser A, RB, AMBAC (A) (B) 3.460%, 04/01/36 15,850 15,850 San Francisco, Bay Area Toll Authority, Ser C, RB, AMBAC (A) (B) 3.480%, 04/01/25 5,650 5,650 San Jose, Redevelopment Agency, Merged Area Redevelopment Project, Ser A, RB (A) (B) (C) 3.520%, 07/01/26 3,100 3,100 Santa Barbara County, Schools Financing Authority, TRAN 4.500%, 06/29/07 2,000 2,004 DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- Santa Clara County, Financing Authority, VMC Facility Replacement Project, Ser B, RB (A) (B) 3.500%, 11/15/25 $12,375 $ 12,375 Santa Clara Valley, Transportation Authority, Ser A, RB, AMBAC (A) (B) 3.500%, 06/01/26 6,300 6,300 Santa Cruz County, TRAN 4.500%, 06/29/07 5,000 5,010 South Coast, Local Education Agencies, Ser A, TRAN 4.500%, 06/29/07 2,000 2,005 Southern California, Metropolitan Water District Authority, Ser A, RB (A) (B) 3.540%, 07/01/25 3,800 3,800 Southern California, Metropolitan Water District Authority, Ser B, RB (A) (B) 3.500%, 07/01/27 2,100 2,100 Southern California, Metropolitan Water District Authority, Ser C-1, RB (A) (B) 3.520%, 07/01/30 5,000 5,000 Southern California, Metropolitan Water District Authority, Ser C-3, RB (A) (B) 3.540%, 07/01/30 8,395 8,395 Southern California, Metropolitan Water District Authority, Water Works Authorization, Ser B, RB (A) (B) 3.500%, 07/01/28 5,200 5,200 Southern California, Metropolitan Water District Authority, Waterworks Authorization, Ser B-4 (A) (B) 3.540%, 07/01/35 5,000 5,000 Southern California, Public Power Authority, Southern Transmission Project, Ser A, RB, FSA (A) (B) 3.550%, 07/01/23 6,000 6,000 Southern California, Public Power Authority, Southern Transmission Project, RB, AMBAC (A) (B) (C) 3.550%, 07/01/19 8,000 8,000 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 42 schedule of investments MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT MONEY MARKET FUND (CONTINUED) DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- State of California, Economic Recovery Authority, Ser C-2, RB (A) (B) (D) 3.650%, 07/01/23 $ 4,160 $ 4,160 State of California, Ser B-3, GO (A) (B) (C) 3.500%, 05/01/33 6,100 6,100 Sunnyvale, Government Center Site Acquisition Project, Ser A, COP, AMBAC (A) (B) 3.550%, 04/01/31 4,300 4,300 Three Valleys, Municipal Water District Authority, Miramar Water Treatment Project, COP (A) (B) (C) 3.600%, 11/01/14 4,700 4,700 Turlock, Irrigation District, Capital Improvement & Refunding Project, COP (A) (B) (C) 3.680%, 01/01/31 9,150 9,150 Upland, Community Redevelopment Authority, Sunset Ridge & Village Apartments Project, RB (A) (B) (C) 3.560%, 12/01/29 6,700 6,700 Ventura County, TRAN 4.500%, 07/02/07 2,500 2,505 Westminster, Civic Center Refinancing Program, Ser A, COP, AMBAC (A) (B) 3.550%, 06/01/22 2,900 2,900 Yolo County, Multi-Family Housing Authority, Primero Grove Project, Ser A, RB (A) (B) (C) 3.520%, 11/01/27 10,485 10,485 ------------------------------------------------------------ TOTAL CALIFORNIA 719,766 ============================================================ WASHINGTON [0.6%] Seattle, Municipal Light & Power Authority, RB (A) (B) (C) 3.620%, 06/01/21 4,300 4,300 ============================================================ TOTAL MUNICIPAL BONDS (Cost $724,066) 724,066 ======================================================== COMMERCIAL PAPER (A) [0.8%] Contra Costa 3.510%, 04/04/07 $ 5,800 $ 5,800 ------------------------------------------------------------ TOTAL COMMERCIAL PAPER (Cost $5,800) 5,800 ======================================================== TOTAL INVESTMENTS [100.7%] (Cost $729,866) $729,866 ======================================================== PERCENTAGES ARE BASED ON NET ASSETS OF $725,032 ($ THOUSANDS). (A) FLOATING RATE SECURITY -- THE RATE REFLECTED ON THE SCHEDULE OF INVESTMENTS IS THE RATE IN EFFECT ON MARCH 31, 2007. (B) PUT AND DEMAND FEATURE -- THE DATE REPORTED ON THE SCHEDULE OF INVESTMENTS IS THE FINAL MATURITY, NOT THE NEXT RESET OR PUT DATE. (C) SECURITIES ARE HELD IN CONJUNCTION WITH A LETTER OF CREDIT FROM A MAJOR BANK OR FINANCIAL INSTITUTION. (D) SECURITIES ARE COLLATERALIZED UNDER AN AGREEMENT FROM FHLMC/FNMA. ABAG -- ASSOCIATION OF BAY AREA GOVERNMENTS AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY COP -- CERTIFICATE OF PARTICIPATION FGIC -- FINANCIAL GUARANTY INSURANCE COMPANY FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION FSA -- FINANCIAL SECURITY ASSISTANCE GO -- GENERAL OBLIGATION MBIA -- MUNICIPAL BOND INSURANCE ASSOCIATION RAN -- REVENUE ANTICIPATION NOTE RB -- REVENUE BOND SAB -- SPECIAL ASSESSMENT BOND SER -- SERIES TA -- TAX ALLOCATION TRAN -- TAX & REVENUE ANTICIPATION NOTE XLCA -- XL CAPITAL ASSURANCE SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 43 statements of assets and liabilities (000) MARCH 31, 2007 (UNAUDITED)
- ------------------------------------------------------------------------------------------------------------------------------------ Large Cap Value Large Cap Growth RCB Small Cap Technology Equity Fund Equity Fund Value Fund Growth Fund ---------------------------------------------------------------------------- ASSETS: Cost of securities (including repurchase agreements) $ 96,260 $ 46,150 $ 52,841 $ 2,583 ==================================================================================================================================== Investments in securities, at value $ 119,241 $ 52,052 $ 67,261 $ 2,846 Receivable for capital shares sold 531 97 98 2 Income receivable 166 41 109 1 Prepaid Expenses 3 1 4 -- Cash -- -- 4 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total Assets 119,941 52,191 67,476 2,849 - ------------------------------------------------------------------------------------------------------------------------------------ LIABILITIES: Payable for capital shares redeemed 704 147 106 -- Payable for income distributions 207 87 -- -- Investment adviser fees payable 62 28 51 2 Shareholder servicing fees payable 28 13 58 1 Administrative fees payable 5 2 3 -- Other accrued expenses 4 2 4 -- Cash overdraft 1 -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total Liabilities 1,011 279 222 3 - ------------------------------------------------------------------------------------------------------------------------------------ NET ASSETS $ 118,930 $ 51,912 $ 67,254 $ 2,846 ==================================================================================================================================== NET ASSETS Paid-in-Capital (unlimited authorization -- $0.01 par value) $ 93,034 $ 48,387 $ 43,795 $ 4,024 Distributions in excess of net investment income (2) (1) (63) (9) Accumulated net realized gain (loss) on investments 2,917 (2,376) 9,102 (1,432) Net unrealized appreciation on investments 22,981 5,902 14,420 263 - ------------------------------------------------------------------------------------------------------------------------------------ NET ASSETS $ 118,930 $ 51,912 $ 67,254 $ 2,846 ==================================================================================================================================== Institutional Shares ($Dollars): Net Assets $103,685,597 $39,760,557 $10,119,978 $1,337,870 Total shares outstanding at end of period 9,692,163 4,876,380 312,057 296,385 Net asset value, offering and redemption price per share (net assets / shares outstanding) $ 10.70 $ 8.15 $ 32.43 $ 4.51 Class A Shares ($Dollars): Net Assets $ 15,244,501 $12,151,613 $11,143,491 $1,507,882 Total shares outstanding at end of period 1,427,187 1,505,797 347,326 339,354 Net asset value, offering and redemption price per share (net assets / shares outstanding) $ 10.68 $ 8.07 $ 32.08 $ 4.44 Class R Shares ($Dollars): Net Assets $ -- $ -- $45,990,279 $ -- Total shares outstanding at end of period -- -- 1,435,671 -- Net asset value and redemption price per share (net assets / shares outstanding) $ -- $ -- $ 32.03 $ -- Maximum offering price per share (net asset value / 96.50%) $ -- $ -- $ 33.19 $ --
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 44 statements of assets and liabilities (000) MARCH 31, 2007 (UNAUDITED)
- ------------------------------------------------------------------------------------------------------------------------------------ California Corporate Government Tax Exempt High Yield Bond Fund Bond Fund Bond Fund Bond Fund ---------------------------------------------------------------------------- ASSETS: Cost of securities $ 59,084 $ 46,987 $ 31,125 $ 38,096 ==================================================================================================================================== Investments in securities, at value $ 59,030 $ 47,032 $ 31,082 $ 38,929 Income receivable 705 256 423 818 Receivable for capital shares sold 60 39 376 4 Prepaid Expenses 2 1 1 1 Cash -- -- 3 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total Assets 59,797 47,328 31,885 39,752 - ------------------------------------------------------------------------------------------------------------------------------------ LIABILITIES: Payable for income distributions 173 125 49 101 Payable for capital shares redeemed 112 69 -- 51 Investment adviser fees payable 20 14 4 22 Shareholder servicing fees payable 13 10 7 14 Administrative fees payable 3 2 1 2 Trustees' fees payable -- -- -- -- Payable for investment securities purchased -- -- 220 100 Other accrued expenses 3 2 1 1 Cash overdraft -- -- -- 256 - ------------------------------------------------------------------------------------------------------------------------------------ Total Liabilities 324 222 282 547 - ------------------------------------------------------------------------------------------------------------------------------------ NET ASSETS $ 59,473 $ 47,106 $ 31,603 $ 39,205 ==================================================================================================================================== NET ASSETS Paid-in-Capital (unlimited authorization -- $0.01 par value) $ 59,941 $ 47,598 $ 31,658 $ 39,448 Undistributed net investment income 2 -- 1 -- Accumulated net realized loss on investments (416) (537) (13) (1,076) Net unrealized appreciation (depreciation) on investments (54) 45 (43) 833 - ------------------------------------------------------------------------------------------------------------------------------------ NET ASSETS $ 59,473 $ 47,106 $ 31,603 $ 39,205 ==================================================================================================================================== Institutional Shares ($Dollars): Net Assets $58,296,313 $44,656,557 $30,564,905 $18,189,488 Total shares outstanding at end of period 5,710,753 4,328,435 2,992,232 1,978,299 Net asset value, offering and redemption price per share (net assets / shares outstanding) $ 10.21 $ 10.32 $ 10.21 $ 9.19 Class A Shares ($Dollars): Net Assets $ 1,176,769 $ 2,449,152 $ 1,037,878 $21,015,458 Total shares outstanding at end of period 115,203 236,896 101,340 2,285,710 Net asset value, offering and redemption price per share (net assets / shares outstanding) $ 10.21 $ 10.34 $ 10.24 $ 9.19
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 45 statements of assets and liabilities (000) MARCH 31, 2007 (UNAUDITED)
- ------------------------------------------------------------------------------------------------------------------------------------ California Prime Government Tax Exempt Money Money Money Market Fund Market Fund Market Fund ---------------------------------------------------------------------------- ASSETS: Cost of securities (including repurchase agreements) $ 1,563,604 $ 2,442,092 $ 729,866 ==================================================================================================================================== Investments in securities, at value $ 909,404 $ 1,212,392 $ 729,866 Repurchase agreements, at value 654,200 1,229,700 -- Income receivable 4,685 11,978 4,983 Prepaid Expenses 37 75 27 Cash -- 99 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total Assets 1,568,326 2,454,244 734,876 - ------------------------------------------------------------------------------------------------------------------------------------ LIABILITIES: Payable for income distributions 4,697 3,594 702 Shareholder servicing fees payable 611 956 302 Investment adviser fees payable 329 508 129 Administrative fees payable 70 104 34 Other accrued expenses 53 87 37 Cash overdraft -- -- 8,640 - ------------------------------------------------------------------------------------------------------------------------------------ Total Liabilities 5,760 5,249 9,844 - ------------------------------------------------------------------------------------------------------------------------------------ NET ASSETS $ 1,562,566 $ 2,448,995 $ 725,032 ==================================================================================================================================== NET ASSETS Paid-in-Capital (unlimited authorization -- $0.01 par value) $ 1,562,973 $ 2,448,990 $ 725,031 Undistributed (distributions in excess of) net investment income (5) 6 -- Accumulated net realized gain (loss) on investments (402) (1) 1 - ------------------------------------------------------------------------------------------------------------------------------------ Net Assets $ 1,562,566 $ 2,448,995 $ 725,032 ==================================================================================================================================== Institutional Shares ($Dollars): Net Assets $436,833,772 $ 50,912,968 $ 73,458,220 Total shares outstanding at end of period 436,971,028 50,914,222 73,459,551 Net asset value, offering and redemption price per share (net assets / shares outstanding) $ 1.00 $ 1.00 $ 1.00 Class A Shares ($Dollars): Net Assets $702,482,532 $2,133,333,284 $546,316,718 Total shares outstanding at end of period 702,754,218 2,133,326,194 546,319,214 Net asset value, offering and redemption price per share (net assets / shares outstanding) $ 1.00 $ 1.00 $ 1.00 Class S Shares ($Dollars): Net Assets $423,249,793 $ 264,749,201 $105,257,117 Total shares outstanding at end of period 423,340,950 264,749,391 105,253,361 Net asset value and redemption price per share (net assets / shares outstanding) $ 1.00 $ 1.00 $ 1.00
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 46 statements of operations FOR THE SIX MONTHS ENDED MARCH 31, 2007 (UNAUDITED)
- ------------------------------------------------------------------------------------------------------------------------------------ Large Cap Value Large Cap Growth RCB Small Cap Technology Equity Fund Equity Fund Value Fund Growth Fund (000) (000) (000) (000) ----------------------------------------------------------------------------------- INVESTMENT INCOME: Dividend Income $ 1,806 $ 427 $ 273 $ 10 Interest Income 10 3 153 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total Investment Income 1,816 430 426 10 - ------------------------------------------------------------------------------------------------------------------------------------ EXPENSES: Investment advisory fee 353 163 297 12 Shareholder Servicing Fees--Institutional Class 124 48 15 2 Shareholder Servicing Fees--Class A(1) 36 29 28 4 Shareholder Servicing Fees--Class R(1) -- -- 117 -- Administration fee 30 13 19 1 Trustee Fees 1 1 1 -- Transfer Agent Fees 6 2 3 -- Professional fees 6 3 4 -- Custody fees 3 2 2 -- Printing fees 2 1 2 -- Registration fees 1 1 1 -- Insurance and Other expenses 5 2 4 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total Expenses 567 265 493 19 - ------------------------------------------------------------------------------------------------------------------------------------ Less Waiver of: Transfer Agent Fees (6) (2) (3) -- Net Expenses 561 263 490 19 - ------------------------------------------------------------------------------------------------------------------------------------ NET INVESTMENT INCOME (LOSS) 1,255 167 (64) (9) - ------------------------------------------------------------------------------------------------------------------------------------ Net Realized Gain from Securities Transactions 3,221 623 9,112 73 Net Change in Unrealized Appreciation on Investments 5,763 1,783 1,715 71 - ------------------------------------------------------------------------------------------------------------------------------------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $10,239 $2,573 $10,763 $135 ====================================================================================================================================
(1) INCLUDES CLASS SPECIFIC DISTRIBUTION EXPENSES. AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 47 statements of operations FOR THE SIX MONTHS ENDED MARCH 31, 2007 (UNAUDITED)
- ------------------------------------------------------------------------------------------------------------------------------------ California Corporate Government Tax Exempt High Yield Bond Fund Bond Fund Bond Fund Bond Fund (000) (000) (000) (000) ----------------------------------------------------------------------------------- INVESTMENT INCOME: Interest Income $1,402 $1,016 $507 $1,689 Dividend Income 28 26 9 10 - ------------------------------------------------------------------------------------------------------------------------------------ Total Investment Income 1,430 1,042 516 1,699 - ------------------------------------------------------------------------------------------------------------------------------------ EXPENSES: Investment advisory fee 115 89 40 149 Shareholder Servicing Fees--Institutional Class 70 50 36 24 Shareholder Servicing Fees--Class A(1) 3 5 3 57 Administration fee 15 11 8 11 Trustee Fees 1 1 -- 1 Transfer Agent Fees 3 2 1 2 Professional fees 3 2 2 2 Custody fees 1 1 1 1 Printing fees 1 1 1 1 Registration fees 1 1 -- -- Insurance and Other expenses 3 1 1 2 - ------------------------------------------------------------------------------------------------------------------------------------ Total Expenses 216 164 93 250 - ------------------------------------------------------------------------------------------------------------------------------------ Less Waiver of: Advisory fees -- (14) (16) (18) Transfer Agent Fees (3) (2) (1) (2) - ------------------------------------------------------------------------------------------------------------------------------------ Net Expenses 213 148 76 230 - ------------------------------------------------------------------------------------------------------------------------------------ NET INVESTMENT INCOME 1,217 894 440 1,469 - ------------------------------------------------------------------------------------------------------------------------------------ Net Realized Gain (Loss) from Securities Transactions (80) (122) 30 179 Net Change in Unrealized Appreciation (Depreciation) on Investments 321 277 (120) 870 - ------------------------------------------------------------------------------------------------------------------------------------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $1,458 $1,049 $350 $2,518 ==================================================================================================================================== (1) INCLUDES CLASS SPECIFIC DISTRIBUTION EXPENSES. AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 48 statements of operations FOR THE SIX MONTHS ENDED MARCH 31, 2007 (UNAUDITED)
- ------------------------------------------------------------------------------------------------------------------------------------ California Prime Government Tax Exempt Money Money Money Market Fund Market Fund Market Fund (000) (000) (000) ---------------------------------------------------------------------------- INVESTMENT INCOME: Interest Income $39,271 $62,291 $14,762 Dividend Income 17 -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total Investment Income 39,288 62,291 14,762 - ------------------------------------------------------------------------------------------------------------------------------------ EXPENSES: Investment advisory fee 1,838 3,057 1,158 Shareholder Servicing Fees--Institutional Class 507 56 112 Shareholder Servicing Fees--Class A(1) 2,524 7,660 2,486 Shareholder Servicing Fees--Class S(1) 1,468 990 393 Administration fee 391 626 229 Trustee Fees 22 35 13 Professional fees 80 118 46 Transfer Agent Fees 72 115 42 Custody fees 34 65 24 Printing fees 27 43 16 Registration fees 27 31 14 Insurance and Other expenses 58 110 40 - ------------------------------------------------------------------------------------------------------------------------------------ Total Expenses 7,048 12,906 4,573 - ------------------------------------------------------------------------------------------------------------------------------------ Less Waiver of: Investment Advisory fees -- -- (259) Shareholder Servicing Fees--Class A(1) (942) (2,860) (895) Shareholder Servicing Fees--Class S(1) (156) (106) (37) Transfer Agent Fees (72) (115) (42) - ------------------------------------------------------------------------------------------------------------------------------------ Net Expenses 5,878 9,825 3,340 - ------------------------------------------------------------------------------------------------------------------------------------ NET INVESTMENT INCOME 33,410 52,466 11,422 - ------------------------------------------------------------------------------------------------------------------------------------ Net Realized Loss From Securities Transactions -- (1) -- - ------------------------------------------------------------------------------------------------------------------------------------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $33,410 $52,465 $11,422 ====================================================================================================================================
(1) INCLUDES CLASS SPECIFIC DISTRIBUTION EXPENSES. AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 49
statements of changes in net assets FOR THE SIX MONTHS ENDED MARCH 31, 2007 (UNAUDITED) AND THE YEAR ENDED SEPTEMBER 30, 2006 - ------------------------------------------------------------------------------------------------------------------------- Large Cap Value Large Cap Growth Equity Fund (000) Equity Fund (000) ------------------------------- ---------------------------- 2007 2006 2007 2006 - --------------------------------------------------------------------------------------- ---------------------------- OPERATIONS: Net Investment Income (Loss) $ 1,255 $ 1,250 $ 167 $ 99 Net Realized Gain (Loss) from Security Transactions 3,221 5,205 623 1,412 Net Change in Unrealized Appreciation (Depreciation) on Investments 5,763 6,087 1,783 547 - --------------------------------------------------------------------------------------- ---------------------------- Net Increase in Net Assets Resulting from Operations 10,239 12,542 2,573 2,058 - --------------------------------------------------------------------------------------- ---------------------------- DIVIDENDS AND DISTRIBUTIONS FROM: Net Investment Income: Institutional Class (1,111) (1,124) (139) (96) Class A (144) (128) (28) (5) Class R -- -- -- -- Realized Capital Gains: Institutional Class (4,815) (3,330) -- -- Class A (687) (459) -- -- Class R -- -- -- -- - --------------------------------------------------------------------------------------- ---------------------------- Total Dividends and Distributions (6,757) (5,041) (167) (101) - --------------------------------------------------------------------------------------- ---------------------------- CAPITAL SHARE TRANSACTIONS:(1) INSTITUTIONAL CLASS: Shares Issued 11,927 55,314 5,126 7,916 Shares Issued in Lieu of Dividends and Distributions 4,124 2,902 45 30 Shares Redeemed (8,361) (14,689) (3,114) (7,829) - --------------------------------------------------------------------------------------- ---------------------------- Increase (Decrease) in Net Assets from Institutional Class Share Transactions 7,690 43,527 2,057 117 - --------------------------------------------------------------------------------------- ---------------------------- CLASS A: Shares Issued 1,903 2,656 2,000 3,182 Shares Issued in Lieu of Dividends and Distributions 668 471 19 4 Shares Redeemed (863) (1,743) (775) (1,497) - --------------------------------------------------------------------------------------- ---------------------------- Increase (Decrease) in Net Assets from Class A Share Transactions 1,708 1,384 1,244 1,689 - --------------------------------------------------------------------------------------- ---------------------------- CLASS R: Shares Issued -- -- -- -- Shares Issued in Lieu of Dividends and Distributions -- -- -- -- Shares Redeemed -- -- -- -- - --------------------------------------------------------------------------------------- ---------------------------- Decrease in Net Assets from Class R Share Transactions -- -- -- -- - --------------------------------------------------------------------------------------- ---------------------------- Net Increase (Decrease) in Net Assets from Share Transactions 9,398 44,911 3,301 1,806 - --------------------------------------------------------------------------------------- ---------------------------- Total Increase (Decrease) in Net Assets 12,880 52,412 5,707 3,763 - --------------------------------------------------------------------------------------- ---------------------------- NET ASSETS: Beginning of period 106,050 53,638 46,205 42,442 - --------------------------------------------------------------------------------------- ---------------------------- End of period $118,930 $106,050 $51,912 $46,205 ======================================================================================= ============================ Undistributed (Distributions in Excess of) Net Investment Income $ (2) $ (2) $ (1) $ (1) - --------------------------------------------------------------------------------------- ----------------------------
(1) SEE NOTE 8 FOR SHARES ISSUED AND REDEEMED. AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | 50
statements of changes in net assets FOR THE SIX MONTHS ENDED MARCH 31, 2007 (UNAUDITED) AND THE YEAR ENDED SEPTEMBER 30, 2006 - ------------------------------------------------------------------------------------------------------------------------------------ RCB Small Cap Technology Growth Corporate Bond Value Fund (000) Fund (000) Fund (000) ------------------------ ---------------------- ------------------------ 2007 2006 2007 2006 2007 2006 ------------------------ ---------------------- ------------------------ OPERATIONS: Net Investment Income (Loss) $ (64) $ 1 $ (9) $ (17) $ 1,217 $ 2,227 Net Realized Gain (Loss) from Security Transactions 9,112 1,110 73 103 (80) (276) Net Change in Unrealized Appreciation (Depreciation) on Investments 1,715 (908) 71 81 321 (191) - -------------------------------------------------------------------------------- ---------------------- ------------------------ Net Increase in Net Assets Resulting from Operations 10,763 203 135 167 1,458 1,760 - -------------------------------------------------------------------------------- ---------------------- ------------------------ DIVIDENDS AND DISTRIBUTIONS FROM: Net Investment Income: INSTITUTIONAL CLASS (2) (35) -- (4) (1,192) (2,167) CLASS A -- (1) -- -- (24) (54) CLASS R -- (10) -- -- -- -- Realized Capital Gains: INSTITUTIONAL CLASS (213) (186) -- -- -- -- CLASS A (165) (170) -- -- -- -- CLASS R (730) (785) -- -- -- -- - -------------------------------------------------------------------------------- ---------------------- ------------------------ Total Dividends and Distributions (1,110) (1,187) -- (4) (1,216) (2,221) - -------------------------------------------------------------------------------- ---------------------- ------------------------ CAPITAL SHARE TRANSACTIONS:(1) INSTITUTIONAL CLASS: Shares Issued 1,327 5,422 132 333 6,774 15,662 Shares Issued in Lieu of Dividends and Distributions 196 159 -- 4 225 406 Shares Redeemed (6,537) (5,973) (104) (357) (4,229) (11,526) - -------------------------------------------------------------------------------- ---------------------- ------------------------ Increase (Decrease) in Net Assets from Institutional Class Share Transactions (5,014) (392) 28 (20) 2,770 4,542 - -------------------------------------------------------------------------------- ---------------------- ------------------------ CLASS A: Shares Issued 335 1,155 35 144 135 146 Shares Issued in Lieu of Dividends and Distributions 136 129 -- -- 11 25 Shares Redeemed (1,314) (3,396) (34) (215) (307) (353) - -------------------------------------------------------------------------------- ---------------------- ------------------------ Increase (Decrease) in Net Assets from Class A Share Transactions (843) (2,112) 1 (71) (161) (182) - -------------------------------------------------------------------------------- ---------------------- ------------------------ CLASS R: Shares Issued 2,526 12,077 -- -- -- -- Shares Issued in Lieu of Dividends and Distributions 690 742 -- -- -- -- Shares Redeemed (9,499) (24,106) -- -- -- -- - -------------------------------------------------------------------------------- ---------------------- ------------------------ Decrease in Net Assets from Class R Share Transactions (6,283) (11,287) -- -- -- -- - -------------------------------------------------------------------------------- ---------------------- ------------------------ Net Increase (Decrease) in Net Assets from Share Transactions (12,140) (13,791) 29 (91) 2,609 4,360 - -------------------------------------------------------------------------------- ---------------------- ------------------------ Total Increase (Decrease) in Net Assets (2,487) (14,775) 164 72 2,851 3,899 - -------------------------------------------------------------------------------- ---------------------- ------------------------ NET ASSETS: Beginning of period 69,741 84,516 2,682 2,610 56,622 52,723 - -------------------------------------------------------------------------------- ---------------------- ------------------------ End of period $67,254 $ 69,741 $2,846 $2,682 $59,473 $ 56,622 ================================================================================ ====================== ======================== Undistributed (Distributions in Excess of) Net Investment Income $ (63) $ 3 $ (9) $ -- $ 2 $ 1 - -------------------------------------------------------------------------------- ---------------------- ------------------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | 51
statements of changes in net assets FOR THE SIX MONTHS ENDED MARCH 31, 2007 (UNAUDITED) AND THE YEAR ENDED SEPTEMBER 30, 2006 - ------------------------------------------------------------------------------------------------------------------------------------ Government California Tax Exempt Bond Fund (000) Bond Fund (000) --------------------------------- -------------------------------------- 2007 2006 2007 2006 - ------------------------------------------------------------------------------------------- -------------------------------------- OPERATIONS: Net Investment Income $ 894 $ 1,326 $ 440 $ 723 Net Realized Gain (Loss) from Security Transactions (122) (360) 30 (35) Net Change in Unrealized Appreciation (Depreciation) on Investments 277 48 (120) 122 - ------------------------------------------------------------------------------------------- -------------------------------------- Net Increase in Net Assets Resulting from Operations 1,049 1,014 350 810 - ------------------------------------------------------------------------------------------- -------------------------------------- DIVIDENDS AND DISTRIBUTIONS FROM: Net Investment Income: INSTITUTIONAL CLASS (856) (1,292) (424) (692) CLASS A (39) (32) (15) (31) CLASS S -- -- -- -- Realized Capital Gains: INSTITUTIONAL CLASS -- -- -- (90) CLASS A -- -- -- (5) CLASS S -- -- -- -- - ------------------------------------------------------------------------------------------- -------------------------------------- Total Dividends and Distributions (895) (1,324) (439) (818) - ------------------------------------------------------------------------------------------- -------------------------------------- CAPITAL SHARE TRANSACTIONS:(1) INSTITUTIONAL CLASS: Shares Issued 10,976 13,593 8,581 8,793 Shares Issued in Lieu of Dividends and Distributions 245 338 152 255 Shares Redeemed (2,382) (6,079) (4,156) (5,739) - ------------------------------------------------------------------------------------------- -------------------------------------- Increase (Decrease) in Net Assets from Institutional Class Share Transactions 8,839 7,852 4,577 3,309 - ------------------------------------------------------------------------------------------- -------------------------------------- CLASS A: Shares Issued 690 1,378 5 31 Shares Issued in Lieu of Dividends and Distributions 8 9 3 6 Shares Redeemed (38) (162) (101) (385) - ------------------------------------------------------------------------------------------- -------------------------------------- Increase (Decrease) in Net Assets from Class A Share Transactions 660 1,225 (93) (348) - ------------------------------------------------------------------------------------------- -------------------------------------- CLASS S: Shares Issued -- -- -- -- Shares Issued in Lieu of Dividends and Distributions -- -- -- -- Shares Redeemed -- -- -- -- - ------------------------------------------------------------------------------------------- -------------------------------------- Increase (Decrease) in Net Assets from Class S Share Transactions -- -- -- -- - ------------------------------------------------------------------------------------------- -------------------------------------- Net Increase (Decrease) in Net Assets from Share Transactions 9,499 9,077 4,484 2,961 - ------------------------------------------------------------------------------------------- -------------------------------------- Total Increase (Decrease) in Net Assets 9,653 8,767 4,395 2,953 - ------------------------------------------------------------------------------------------- -------------------------------------- NET ASSETS: Beginning of period 37,453 28,686 27,208 24,255 - ------------------------------------------------------------------------------------------- -------------------------------------- End of period $47,106 $37,453 $31,603 $27,208 =========================================================================================== ====================================== Undistributed (Distributions in excess of) Net Investment Income $ -- $ 1 $ 1 $ -- - ------------------------------------------------------------------------------------------- --------------------------------------
(1)SEE NOTE 8 FOR SHARES ISSUED AND REDEEMED. AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 52
- ----------------------------------------------------------------------------------------------------------------------- High Yield Prime Money Bond Fund (000) Market Fund (000) -------------------------- ----------------------------- 2007 2006 2007 2006 - ------------------------------------------------------------------------------------ ----------------------------- OPERATIONS: Net Investment Income $ 1,469 $ 3,020 $ 33,410 $ 43,644 Net Realized Gain (Loss) from Security Transactions 179 (18) -- -- Net Change in Unrealized Appreciation (Depreciation) on Investments 870 (392) -- -- - ------------------------------------------------------------------------------------ ----------------------------- Net Increase in Net Assets Resulting from Operations 2,518 2,610 33,410 43,644 - ------------------------------------------------------------------------------------ ----------------------------- DIVIDENDS AND DISTRIBUTIONS FROM: Net Investment Income: INSTITUTIONAL CLASS (719) (1,599) (9,645) (14,704) CLASS A (750) (1,421) (15,276) (18,919) CLASS S -- -- (8,495) (10,020) Realized Capital Gains: INSTITUTIONAL CLASS -- -- -- -- CLASS A -- -- -- -- CLASS S -- -- -- -- - ------------------------------------------------------------------------------------ ----------------------------- Total Dividends and Distributions (1,469) (3,020) (33,416) (43,643) - ------------------------------------------------------------------------------------ ----------------------------- CAPITAL SHARE TRANSACTIONS:(1) INSTITUTIONAL CLASS: Shares Issued 512 4,120 615,771 1,690,942 Shares Issued in Lieu of Dividends and Distributions 434 895 1,880 2,507 Shares Redeemed (4,152) (6,503) (568,986) (1,637,671) - ------------------------------------------------------------------------------------ ----------------------------- Increase (Decrease) in Net Assets from Institutional Class Share Transactions (3,206) (1,488) 48,665 55,778 - ------------------------------------------------------------------------------------ ----------------------------- CLASS A: Shares Issued 897 1,822 1,111,495 2,204,941 Shares Issued in Lieu of Dividends and Distributions 426 817 5,424 5,522 Shares Redeemed (893) (3,425) (1,054,800) (1,882,549) - ------------------------------------------------------------------------------------ ----------------------------- Increase (Decrease) in Net Assets from Class A Share Transactions 430 (786) 62,119 327,914 - ------------------------------------------------------------------------------------ ----------------------------- CLASS S: Shares Issued -- -- 743,524 1,261,525 Shares Issued in Lieu of Dividends and Distributions -- -- -- -- Shares Redeemed -- -- (644,626) (1,140,675) - ------------------------------------------------------------------------------------ ----------------------------- Increase (Decrease) in Net Assets from Class S Share Transactions -- -- 98,898 120,850 - ------------------------------------------------------------------------------------ ----------------------------- Net Increase (Decrease) in Net Assets from Share Transactions (2,776) (2,274) 209,682 504,542 - ------------------------------------------------------------------------------------ ----------------------------- Total Increase (Decrease) in Net Assets (1,727) (2,684) 209,676 504,543 - ------------------------------------------------------------------------------------ ----------------------------- NET ASSETS: Beginning of period 40,932 43,616 1,352,890 848,347 - ------------------------------------------------------------------------------------ ----------------------------- End of period $39,205 $40,932 $ 1,562,566 $ 1,352,890 ==================================================================================== ============================= Undistributed (Distributions in excess of) Net Investment Income $ -- $ -- $ (5) $ 1 - ------------------------------------------------------------------------------------ -----------------------------
- ----------------------------------------------------------------------------------------------------------------------------- Government Money California Tax Exempt Market Fund (000) Money Market Fund (000) --------------------------------- ------------------------------- 2007 2006 2007 2006 - ------------------------------------------------------------------------------------------- ------------------------------- OPERATIONS: Net Investment Income $ 52,466 $ 85,646 $ 11,422 $ 19,286 Net Realized Gain (Loss) from Security Transactions (1) 1 -- -- Net Change in Unrealized Appreciation (Depreciation) on Investments -- -- -- -- - ------------------------------------------------------------------------------------------- ------------------------------- Net Increase in Net Assets Resulting from Operations 52,465 85,647 11,422 19,286 - ------------------------------------------------------------------------------------------- ------------------------------- DIVIDENDS AND DISTRIBUTIONS FROM: Net Investment Income: INSTITUTIONAL CLASS (1,053) (2,064) (1,301) (2,080) CLASS A (45,761) (74,663) (8,829) (15,136) CLASS S (5,648) (8,922) (1,292) (2,065) Realized Capital Gains: INSTITUTIONAL CLASS -- -- -- -- CLASS A -- -- -- -- CLASS S -- -- -- -- - ------------------------------------------------------------------------------------------- ------------------------------- Total Dividends and Distributions (52,462) (85,649) (11,422) (19,281) - ------------------------------------------------------------------------------------------- ------------------------------- CAPITAL SHARE TRANSACTIONS:(1) INSTITUTIONAL CLASS: Shares Issued 305,556 635,895 846,084 1,444,514 Shares Issued in Lieu of Dividends and Distributions 2 2 -- -- Shares Redeemed (307,427) (615,154) (857,640) (1,432,711) - ------------------------------------------------------------------------------------------- ------------------------------- Increase (Decrease) in Net Assets from Institutional Class Share Transactions (1,869) 20,743 (11,556) 11,803 - ------------------------------------------------------------------------------------------- ------------------------------- CLASS A: Shares Issued 2,647,781 5,761,555 1,091,054 2,014,013 Shares Issued in Lieu of Dividends and Distributions 31,472 51,511 6,815 12,188 Shares Redeemed (2,486,525) (5,767,874) (1,183,030) (1,964,398) - ------------------------------------------------------------------------------------------- ------------------------------- Increase (Decrease) in Net Assets from Class A Share Transactions 192,728 45,192 (85,161) 61,803 - ------------------------------------------------------------------------------------------- ------------------------------- CLASS S: Shares Issued 363,409 1,013,412 170,453 348,788 Shares Issued in Lieu of Dividends and Distributions -- -- -- -- Shares Redeemed (330,743) (1,009,234) (172,327) (329,840) - ------------------------------------------------------------------------------------------- ------------------------------- Increase (Decrease) in Net Assets from Class S Share Transactions 32,666 4,178 (1,874) 18,948 - ------------------------------------------------------------------------------------------- ------------------------------- Net Increase (Decrease) in Net Assets from Share Transactions 223,525 70,113 (98,591) 92,554 - ------------------------------------------------------------------------------------------- ------------------------------- Total Increase (Decrease) in Net Assets 223,528 70,111 (98,591) 92,559 - ------------------------------------------------------------------------------------------- ------------------------------- NET ASSETS: Beginning of period 2,225,467 2,155,356 823,623 731,064 - ------------------------------------------------------------------------------------------- ------------------------------- End of period $ 2,448,995 $ 2,225,467 $ 725,032 $ 823,623 =========================================================================================== =============================== Undistributed (Distributions in excess of) Net Investment Income $ 6 $ 2 $ -- $ -- - ------------------------------------------------------------------------------------------- -------------------------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 53
financial highlights FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD FOR THE SIX MONTHS ENDED MARCH 31, 2007 (UNAUDITED) AND THE YEAR OR PERIOD ENDED SEPTEMBER 30, - ------------------------------------------------------------------------------------------------------------------------- NET NET REALIZED AND DISTRIBUTIONS NET NET ASSET NET UNREALIZED DIVIDENDS FROM ASSET ASSETS VALUE INVESTMENT GAINS (LOSSES) FROM NET REALIZED VALUE END BEGINNING INCOME ON INVESTMENT CAPITAL END TOTAL OF PERIOD OF PERIOD (LOSS) SECURITIES INCOME GAINS OF PERIOD RETURN++ (000) - ------------------------------------------------------------------------------------------------------------------------- LARGE CAP VALUE EQUITY FUND Institutional Class (commenced operations on January 14, 2000) 2007* $10.36 $ 0.12^ $ 0.87^ $(0.12) $(0.53) $10.70 9.65% $103,686 2006 9.54 0.13^ 1.21^ (0.13) (0.39) 10.36 14.50 92,946 2005 8.77 0.10^ 1.13^ (0.10) (0.36) 9.54 14.39 42,974 2004 7.41 0.08^ 1.36^ (0.08) -- 8.77 19.40 38,344 2003 6.04 0.07 1.37 (0.07) -- 7.41 24.03 33,016 2002 7.63 0.07 (1.47) (0.07) (0.12) 6.04 (18.88) 23,325 Class A (commenced operations on April 13, 2000) 2007* $10.35 $ 0.11^ $ 0.85^ $(0.10) $(0.53) $10.68 9.43% $ 15,244 2006 9.53 0.11^ 1.20^ (0.10) (0.39) 10.35 14.24 13,104 2005 8.76 0.09^ 1.12^ (0.08) (0.36) 9.53 14.14 10,664 2004 7.41 0.05^ 1.36^ (0.06) -- 8.76 19.01 6,281 2003 6.04 0.06 1.37 (0.06) -- 7.41 23.75 1,792 2002 7.62 0.05 (1.46) (0.05) (0.12) 6.04 (18.97) 769 - ------------------------------------------------------------------------------------------------------------------------- LARGE CAP GROWTH EQUITY FUND Institutional Class (commenced operations on January 14, 2000) 2007* $ 7.75 $ 0.03^ $ 0.40^ $(0.03) $ -- $ 8.15 5.53% $ 39,760 2006 7.43 0.02^ 0.32^ (0.02) -- 7.75 4.59 35,842 2005 6.76 0.04^ 0.67^ (0.04) -- 7.43 10.55 34,164 2004 6.37 0.01^ 0.38^ --^^ -- 6.76 6.20 25,575 2003 5.25 0.01^ 1.12^ (0.01) -- 6.37 21.51 22,249 2002 6.36 0.00 (1.11) -- -- 5.25 (17.45) 14,195 Class A (commenced operations on March 28, 2000) 2007* $ 7.68 $ 0.02^ $ 0.39^ $(0.02) $ -- $ 8.07 5.32% $ 12,152 2006 7.35 --^ 0.33^ --^^ -- 7.68 4.55 10,363 2005 6.69 0.02^ 0.67^ (0.03) -- 7.35 10.28 8,278 2004 6.32 (0.01)^ 0.38^ --^^ -- 6.69 5.87 5,223 2003 5.21 (0.01)^ 1.12^ -- -- 6.32 21.31 1,965 2002 6.33 (0.02) (1.10) -- -- 5.21 (17.69) 798 - ------------------------------------------------------------------------------------------------------------------------- RCB SMALL CAP VALUE FUND Institutional Class (commenced operations on October 3, 2001) 2007* $28.25 $ --^ $ 4.66^ $(0.01) $(0.47) $32.43 16.55% $ 10,120 2006 28.58 0.06^ 0.05^ (0.07) (0.37) 28.25 0.40 13,435 2005 27.30 0.07^ 2.58^ -- (1.37) 28.58 9.87 13,975 2004 21.92 0.06^ 5.40^ -- (0.08) 27.30 24.97 8,955 2003 15.06 (0.04)^ 6.90^ -- -- 21.92 45.55 6,236 2002 17.11 (0.07) (1.98) -- -- 15.06 (11.98) 1,768 Class A (commenced operations on October 3, 2001) 2007* $27.98 $(0.03)^ $ 4.60^ $ -- $(0.47) $32.08 16.40% $ 11,144 2006 28.31 (0.01)^ 0.05^ --^^ (0.37) 27.98 0.17 10,470 2005 27.13 0.00^ 2.55^ -- (1.37) 28.31 9.55 12,754 2004 21.84 (0.02)^ 5.39^ -- (0.08) 27.13 24.64 7,551 2003 15.04 (0.08)^ 6.88^ -- -- 21.84 45.21 2,384 2002 17.11 (0.05) (2.02) -- -- 15.04 (12.10) 410 Class R (commenced operations on September 30, 1998)(2) 2007* $27.93 $(0.03)^ $ 4.60^ $ -- $(0.47) $32.03 16.43% $ 45,990 2006 28.27 (0.01)^ 0.04^ --^^ (0.37) 27.93 0.14 45,836 2005 27.09 0.01^ 2.54^ -- (1.37) 28.27 9.56 57,787 2004 21.81 (0.02)^ 5.38^ -- (0.08) 27.09 24.63 36,473 2003 15.02 (0.07)^ 6.86^ -- -- 21.81 45.21 14,267 2002 16.94 (0.12) (1.80) -- -- 15.02 (11.33) 10,174 - ------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY GROWTH FUND Institutional Class (commenced operations on October 3, 2000) 2007* $ 4.30 $(0.01)^ $ 0.22^ $ -- $ -- $ 4.51 4.88% $ 1,338 2006 4.04 (0.02)^ 0.29^ (0.01) -- 4.30 6.77 1,245 2005 3.46 0.01^ 0.57^ -- -- 4.04 16.76 1,187 2004 3.50 (0.03)^ (0.01)^ -- -- 3.46 (1.14) 976 2003 2.26 (0.02) 1.26 -- -- 3.50 54.87 913 2002 3.54 (0.03) (1.25) -- -- 2.26 (36.16) 565 Class A (commenced operations on October 23, 2000) 2007* $ 4.23 $(0.02)^ $ 0.23^ $ -- $ -- $ 4.44 4.96% $ 1,508 2006 3.98 (0.03)^ 0.28^ --^^ -- 4.23 6.30 1,437 2005 3.42 0.00^ 0.56^ -- -- 3.98 16.37 1,423 2004 3.48 (0.04)^ (0.02)^ -- -- 3.42 (1.72) 1,240 2003 2.25 (0.03) 1.26 -- -- 3.48 54.67 950 2002 3.54 (0.04) (1.25) -- -- 2.25 (36.44) 432
RATIO OF EXPENSES RATIO TO AVERAGE OF NET NET ASSETS RATIO INVESTMENT (EXCLUDING OF EXPENSES INCOME (LOSS) WAIVERS & PORTFOLIO TO AVERAGE TO AVERAGE RECOVERED TURNOVER NET ASSETS(1)(3) NET ASSETS(1) FEES)(1) RATE - ---------------------------------------------------------------------------- LARGE CAP VALUE EQUITY FUND Institutional Class (commenced operations on January 14, 2000) 2007* 0.96% 2.24% 0.97% 11% 2006 0.96 1.36 0.97 31 2005 0.96 1.12 0.97 34 2004 0.97 0.92 0.97 36 2003 1.00 1.12 1.00 39 2002 1.00 0.90 1.05 42 Class A (commenced operations on April 13, 2000) 2007* 1.21% 1.99% 1.22% 11% 2006 1.21 1.13 1.22 31 2005 1.21 0.87 1.22 34 2004 1.22 0.64 1.22 36 2003 1.25 0.84 1.25 39 2002 1.25 0.65 1.30 42 - ---------------------------------------------------------------------------- LARGE CAP GROWTH EQUITY FUND Institutional Class (commenced operations on January 14, 2000) 2007* 0.99% 0.72% 1.00% 12% 2006 0.99 0.27 1.00 34 2005 0.98 0.57 1.00 27 2004 1.01 0.10 1.01 50 2003 1.05 0.16 1.03 43 2002 1.05 (0.04) 1.09 31 Class A (commenced operations on March 28, 2000) 2007* 1.24% 0.48% 1.25% 12% 2006 1.24 0.03 1.25 34 2005 1.23 0.33 1.25 27 2004 1.26 (0.14) 1.26 50 2003 1.30 (0.09) 1.29 43 2002 1.30 (0.29) 1.34 31 - ---------------------------------------------------------------------------- RCB SMALL CAP VALUE FUND Institutional Class (commenced operations on October 3, 2001) 2007* 1.19% 0.03% 1.20% 28% 2006 1.20 0.20 1.21 66 2005 1.18 0.26 1.20 41 2004 1.21 0.23 1.20 40 2003 1.24 (0.20) 1.24 65 2002 1.24 (0.46) 1.28 39 Class A (commenced operations on October 3, 2001) 2007* 1.44% (0.22)% 1.45% 28% 2006 1.45 (0.04) 1.46 66 2005 1.43 0.01 1.45 41 2004 1.49 (0.07) 1.48 40 2003 1.49 (0.45) 1.49 65 2002 1.49 (0.74) 1.53 39 Class R (commenced operations on September 30, 1998)(2) 2007* 1.44% (0.22)% 1.45% 28% 2006 1.45 (0.04) 1.46 66 2005 1.43 0.02 1.45 41 2004 1.49 (0.07) 1.48 40 2003 1.49 (0.41) 1.49 65 2002 1.49 (0.70) 1.53 39 - ---------------------------------------------------------------------------- TECHNOLOGY GROWTH FUND Institutional Class (commenced operations on October 3, 2000) 2007* 1.19% (0.51)% 1.19% 19% 2006 1.16 (0.52) 1.10 24 2005 1.20 0.34 1.21 37 2004 1.20 (0.82) 1.28 33 2003 1.20 (0.78) 1.36 29 2002 1.20 (0.88) 1.37 24 Class A (commenced operations on October 23, 2000) 2007* 1.49% (0.81)% 1.49% 19% 2006 1.46 (0.81) 1.40 24 2005 1.50 0.06 1.51 37 2004 1.50 (1.12) 1.58 33 2003 1.50 (1.08) 1.66 29 2002 1.50 (1.18) 1.67 24 * FOR THE SIX MONTHS ENDED MARCH 31, 2007. ++ RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED. FEE WAIVERS ARE IN EFFECT; IF THEY HAD NOT BEEN IN EFFECT, PERFORMANCE WOULD HAVE BEEN LOWER. TOTAL RETURN FIGURES DO NOT INCLUDE APPLICABLE SALES LOADS. RETURNS SHOWN DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. ^ PER SHARE CALCULATIONS ARE BASED ON AVERAGE SHARES OUTSTANDING THROUGHOUT THE PERIOD. ^^ AMOUNT REPRESENTS LESS THAN $0.01 PER SHARE. (1) ANNUALIZED FOR PERIODS LESS THAN ONE YEAR. (2) ON OCTOBER 3, 2001, THE RCB SMALL CAP FUND EXCHANGED ALL OF ITS ASSETS AND LIABILITIES FOR SHARES OF THE CNI CHARTER RCB SMALL CAP VALUE FUND. THE CNI CHARTER RCB SMALL CAP VALUE FUND IS THE ACCOUNTING SURVIVOR IN THIS TRANSACTION, AND AS A RESULT, ITS BASIS OF ACCOUNTING FOR ASSETS AND LIABILITIES AND ITS OPERATING RESULTS FOR THE PERIODS PRIOR TO OCTOBER 3, 2001 HAVE BEEN CARRIED FORWARD IN THESE FINANCIAL HIGHLIGHTS. (3) RATIO INCLUDES WAIVERS AND PREVIOUSLY WAIVED INVESTMENT ADVISORY FEES RECOVERED. THE IMPACT OF THE RECOVERED FEES MAY CAUSE A HIGHER NET EXPENSE RATIO. AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 54
- -------------------------------------------------------------------------------------------------------------------------- NET NET REALIZED AND DISTRIBUTIONS NET NET ASSET UNREALIZED DIVIDENDS FROM ASSET ASSETS VALUE NET GAINS (LOSSES) FROM NET REALIZED VALUE END BEGINNING INVESTMENT ON INVESTMENT CAPITAL END TOTAL OF PERIOD OF PERIOD INCOME SECURITIES INCOME GAINS OF PERIOD RETURN++ (000) - -------------------------------------------------------------------------------------------------------------------------- CORPORATE BOND FUND Institutional Class (commenced operations on January 14, 2000) 2007* $10.17 $ 0.22^ $ 0.04^ $(0.22) $ -- $10.21 2.54% $58,296 2006 10.27 0.42^ (0.10)^ (0.42) -- 10.17 3.19 55,290 2005 10.60 0.40^ (0.27)^ (0.40) (0.06) 10.27 1.26 51,193 2004 10.89 0.41^ (0.18)^ (0.41) (0.11) 10.60 2.15 47,080 2003 10.65 0.46 0.24 (0.46) -- 10.89 6.74 42,256 2002 10.72 0.53 0.09 (0.53) (0.16) 10.65 6.06 40,807 Class A (commenced operations on April 13, 2000) 2007* $10.17 $ 0.20^ $ 0.04^ $(0.20) $ -- $10.21 2.41% $ 1,177 2006 10.27 0.39^ (0.10)^ (0.39) -- 10.17 2.93 1,332 2005 10.61 0.37^ (0.28)^ (0.37) (0.06) 10.27 0.91 1,530 2004 10.89 0.37^ (0.16)^ (0.38) (0.11) 10.61 1.99 1,522 2003 10.65 0.44 0.23 (0.43) -- 10.89 6.47 830 2002 10.73 0.50 0.08 (0.50) (0.16) 10.65 5.69 544 - -------------------------------------------------------------------------------------------------------------------------- GOVERNMENT BOND FUND Institutional Class (commenced operations on January 14, 2000) 2007* $10.28 $ 0.22^ $ 0.04^ $(0.22) $ -- $10.32 2.56% $44,657 2006 10.40 0.41^ (0.12)^ (0.41) -- 10.28 2.89 35,671 2005 10.62 0.31^ (0.16)^ (0.31) (0.06) 10.40 1.42 28,132 2004 10.93 0.25^ (0.17)^ (0.25) (0.14) 10.62 0.81 20,901 2003 11.02 0.36^ (0.07)^ (0.37) (0.01) 10.93 2.68** 15,596 2002 10.80 0.44 0.34 (0.44) (0.12) 11.02 7.53 14,502 Class A (commenced operations on April 13, 2000) 2007* $10.30 $ 0.21^ $ 0.04^ $(0.21) $ -- $10.34 2.43% $ 2,449 2006 10.42 0.39^ (0.12)^ (0.39) -- 10.30 2.63 1,782 2005 10.64 0.29^ (0.17)^ (0.28) (0.06) 10.42 1.16 554 2004 10.95 0.23^ (0.17)^ (0.23) (0.14) 10.64 0.55 436 2003 11.01 0.33^ (0.04)^ (0.34) (0.01) 10.95 2.71** 18 2002 10.77 0.43 0.34 (0.41) (0.12) 11.01 7.47 525 - -------------------------------------------------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT BOND FUND Institutional Class (commenced operations on January 14, 2000) 2007* $10.25 $ 0.15^ $(0.04)^ $(0.15) $ -- $10.21 1.10% $30,565 2006 10.26 0.29^ 0.03^ (0.29) (0.04) 10.25 3.18 26,074 2005 10.41 0.28^ (0.11)^ (0.28) (0.04) 10.26 1.65 22,768 2004 10.60 0.27^ (0.06)^ (0.27) (0.13) 10.41 2.00 17,789 2003 10.83 0.31 (0.04) (0.31) (0.19) 10.60 2.63 14,546 2002 10.50 0.36 0.41 (0.35) (0.09) 10.83 7.58 16,147 Class A (commenced operations on April 13, 2000) 2007* $10.27 $ 0.14^ $(0.03)^ $(0.14) $ -- $10.24 1.07% $ 1,038 2006 10.29 0.26^ 0.02^ (0.26) (0.04) 10.27 2.81 1,134 2005 10.44 0.25^ (0.11)^ (0.25) (0.04) 10.29 1.39 1,487 2004 10.62 0.24^ (0.05)^ (0.24) (0.13) 10.44 1.84 2,439 2003 10.85 0.27 (0.02) (0.29) (0.19) 10.62 2.37 732 2002 10.51 0.33 0.43 (0.33) (0.09) 10.85 7.40 13 - -------------------------------------------------------------------------------------------------------------------------- HIGH YIELD BOND FUND Institutional Class (commenced operations on January 14, 2000) 2007* $ 8.96 $ 0.34^ $ 0.23^ $(0.34) $ -- $ 9.19 6.48% $18,190 2006 9.04 0.68^ (0.08)^ (0.68) -- 8.96 6.90 20,887 2005 9.31 0.71^ (0.27)^ (0.71) -- 9.04 4.85 22,588 2004 8.95 0.72^ 0.36^ (0.72) -- 9.31 12.47 22,860 2003 8.16 0.76 0.79 (0.76) -- 8.95 19.75 13,387 2002 8.57 0.83 (0.40) (0.84) -- 8.16 4.80 10,020 Class A (commenced operations on January 14, 2000) 2007* $ 8.96 $ 0.33^ $ 0.23^ $(0.34) $ -- $ 9.19 6.33% $21,015 2006 9.04 0.65^ (0.08)^ (0.65) -- 8.96 6.58 20,045 2005 9.31 0.69^ (0.27)^ (0.69) -- 9.04 4.54 21,028 2004 8.95 0.70^ 0.35^ (0.69) -- 9.31 12.14 20,655 2003 8.16 0.74 0.78 (0.73) -- 8.95 19.39 16,878 2002 8.57 0.81 (0.40) (0.82) -- 8.16 4.49 9,397
RATIO OF EXPENSES RATIO TO AVERAGE OF NET NET ASSETS RATIO INVESTMENT (EXCLUDING OF EXPENSES INCOME WAIVERS & PORTFOLIO TO AVERAGE TO AVERAGE RECOVERED TURNOVER NET ASSETS(1)(2) NET ASSETS(1) FEES)(1) RATE - ---------------------------------------------------------------------------- CORPORATE BOND FUND Institutional Class (commenced operations on January 14, 2000) 2007* 0.74% 4.26% 0.75% 14% 2006 0.75 4.14 0.75 25 2005 0.75 3.80 0.76 25 2004 0.75 3.82 0.79 57 2003 0.75 4.30 0.78 66 2002 0.75 5.04 0.82 55 Class A (commenced operations on April 13, 2000) 2007* 0.99% 3.99% 1.00% 14% 2006 1.00 3.88 1.00 25 2005 1.00 3.55 1.01 25 2004 1.00 3.51 1.04 57 2003 1.00 4.00 1.03 66 2002 1.00 4.71 1.07 55 - ---------------------------------------------------------------------------- GOVERNMENT BOND FUND Institutional Class (commenced operations on January 14, 2000) 2007* 0.70% 4.31% 0.78% 48% 2006 0.70 4.04 0.78 62 2005 0.70 2.98 0.79 58 2004 0.70 2.39 0.81 169 2003 0.70 3.26 0.81 54 2002 0.70 4.11+ 0.86 70 Class A (commenced operations on April 13, 2000) 2007* 0.95% 4.05% 1.03% 48% 2006 0.95 3.81 1.03 62 2005 0.95 2.70 1.04 58 2004 0.95 2.14 1.06 169 2003 0.95 3.00 1.06 54 2002 0.95 3.70 1.11 70 - ---------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT BOND FUND Institutional Class (commenced operations on January 14, 2000) 2007* 0.50% 2.98% 0.62% 29% 2006 0.50 2.85 0.62 43 2005 0.50 2.70 0.63 54 2004 0.50 2.55 0.65 51 2003 0.50 2.91 0.65 68 2002 0.50 3.33 0.70 90 Class A (commenced operations on April 13, 2000) 2007* 0.75% 2.73% 0.87% 29% 2006 0.75 2.59 0.87 43 2005 0.75 2.43 0.88 54 2004 0.75 2.29 0.90 51 2003 0.75 2.62 0.90 68 2002 0.75 3.05 0.95 90 - ---------------------------------------------------------------------------- HIGH YIELD BOND FUND Institutional Class (commenced operations on January 14, 2000) 2007* 1.00% 7.54% 1.10% 14% 2006 1.00 7.58 1.10 23 2005 1.00 7.71 1.11 46 2004 1.00 7.87 1.14 35 2003 1.00 8.84 1.13 36 2002 1.00 9.48 1.18 30 Class A (commenced operations on January 14, 2000) 2007* 1.30% 7.26% 1.40% 14% 2006 1.30 7.28 1.40 23 2005 1.30 7.41 1.41 46 2004 1.30 7.56 1.44 35 2003 1.30 8.44 1.43 36 2002 1.30 9.03 1.48 30 * FOR THE SIX MONTHS ENDED MARCH 31, 2007. ** TOTAL RETURN FOR CLASS A OF THE GOVERNMENT BOND FUND IS GREATER THAN THE INSTITUTIONAL CLASS'S DUE TO A LARGE REDEMPTION DURING THE YEAR. + RATIOS REFLECT THE IMPACT OF SIGNIFICANT CHANGES IN AVERAGE NET ASSETS AND THE EFFECTS OF ANNUALIZATION. ++ RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED. FEE WAIVERS ARE IN EFFECT; IF THEY HAD NOT BEEN IN EFFECT, PERFORMANCE WOULD HAVE BEEN LOWER. RETURNS SHOWN DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. ^ PER SHARE CALCULATIONS ARE BASED ON THE AVERAGE SHARES OUTSTANDING THROUGHOUT THE PERIOD. (1) ANNUALIZED FOR PERIODS LESS THAN ONE YEAR. (2) RATIO INCLUDES WAIVERS AND PREVIOUSLY WAIVED INVESTMENT ADVISORY FEES RECOVERED. THE IMPACT OF THE RECOVERED FEES MAY CAUSE A HIGHER NET EXPENSE RATIO. AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 55
financial highlights FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD FOR THE SIX MONTHS ENDED MARCH 31, 2007 (UNAUDITED) AND THE YEAR OR PERIOD ENDED SEPTEMBER 30, - ----------------------------------------------------------------------------------------------------------------------------------- RATIO OF EXPENSES RATIO TO AVERAGE NET NET NET OF NET NET ASSETS ASSET DIVIDENDS ASSET ASSETS RATIO INVESTMENT (EXCLUDING VALUE NET FROM NET VALUE END OF EXPENSES INCOME WAIVERS & BEGINNING INVESTMENT INVESTMENT END TOTAL OF PERIOD TO AVERAGE TO AVERAGE RECOVERED OF PERIOD INCOME INCOME OF PERIOD RETURN+++ (000) NET ASSETS(1)(2) NET ASSETS(1) FEES)(1) - ----------------------------------------------------------------------------------------------------------------------------------- PRIME MONEY MARKET FUND Institutional Class (commenced operations on March 23, 1998) 2007* $1.00 $0.024 $(0.024) $1.00 2.40% $ 436,834 0.59% 4.76% 0.60% 2006 1.00 0.041 (0.041) 1.00 4.17 388,171 0.59 4.12 0.60 2005 1.00 0.021 (0.021) 1.00 2.10 332,393 0.60 2.05 0.61 2004 1.00 0.006 (0.006) 1.00 0.58 367,209 0.63 0.59 0.63 2003 1.00 0.007 (0.007) 1.00 0.68 287,087 0.63 0.68 0.64 2002 1.00 0.014 (0.014) 1.00 1.37 290,778 0.63 1.37 0.67 Class A (commenced operations on October 18, 1999) 2007* $1.00 $0.023 $(0.023) $1.00 2.28% $ 702,482 0.81% 4.54% 1.10% 2006 1.00 0.039 (0.039) 1.00 3.94 640,366 0.81 3.95 1.10 2005 1.00 0.019 (0.019) 1.00 1.87 312,452 0.82 1.94 1.11 2004 1.00 0.004 (0.004) 1.00 0.36 201,058 0.85 0.35 1.13 2003 1.00 0.005 (0.005) 1.00 0.46 205,191 0.85 0.47 1.14 2002 1.00 0.011 (0.011) 1.00 1.15 228,807 0.85 1.15 1.17 Class S (commenced operations on October 26, 1999) 2007* $1.00 $0.022 $(0.022) $1.00 2.18% $ 423,250 1.01% 4.34% 1.10% 2006 1.00 0.037 (0.037) 1.00 3.73 324,353 1.01 3.74 1.10 2005 1.00 0.017 (0.017) 1.00 1.67 203,502 1.02 1.70 1.11 2004 1.00 0.002 (0.002) 1.00 0.21 115,761 1.00 0.21 1.13 2003 1.00 0.003 (0.003) 1.00 0.29 118,624 1.03 0.29 1.14 2002 1.00 0.009 (0.009) 1.00 0.95 129,180 1.05 0.95 1.17 - ----------------------------------------------------------------------------------------------------------------------------------- GOVERNMENT MONEY MARKET FUND Institutional Class (commenced operations on April 3, 2000) 2007* $1.00 $0.023 $(0.023) $1.00 2.37% $ 50,913 0.60% 4.70% 0.61% 2006 1.00 0.040 (0.040) 1.00 4.08 52,782 0.60 4.11 0.61 2005 1.00 0.020 (0.020) 1.00 2.05 32,039 0.61 1.97 0.62 2004 1.00 0.006 (0.006) 1.00 0.57 43,608 0.63 0.56 0.64 2003 1.00 0.007 (0.007) 1.00 0.70 56,841 0.63 0.68 0.64 2002 1.00 0.014 (0.014) 1.00 1.38 51,985 0.63 1.43 0.66 Class A (commenced operations on June 21, 1999) 2007* $1.00 $0.022 $(0.022) $1.00 2.26% $2,133,333 0.82% 4.48% 1.11% 2006 1.00 0.038 (0.038) 1.00 3.86 1,940,602 0.82 3.78 1.11 2005 1.00 0.018 (0.018) 1.00 1.82 1,895,412 0.83 1.80 1.12 2004 1.00 0.004 (0.004) 1.00 0.35 1,857,676 0.85 0.35 1.14 2003 1.00 0.005 (0.005) 1.00 0.48 2,060,860 0.85 0.48 1.14 2002 1.00 0.012 (0.012) 1.00 1.16 2,149,151 0.85 1.18 1.16 Class S (commenced operations on October 6, 1999) 2007* $1.00 $0.021 $(0.021) $1.00 2.15% $ 264,749 1.02% 4.28% 1.11% 2006 1.00 0.036 (0.036) 1.00 3.65 232,083 1.02 3.60 1.11 2005 1.00 0.016 (0.016) 1.00 1.62 227,905 1.03 1.61 1.12 2004 1.00 0.002 (0.002) 1.00 0.20 263,086 1.00 0.21 1.14 2003 1.00 0.003 (0.003) 1.00 0.30 191,539 1.03 0.31 1.14 2002 1.00 0.010 (0.010) 1.00 0.96 219,387 1.05 0.93 1.16 - ----------------------------------------------------------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT MONEY MARKET FUND Institutional Class (commenced operations on April 3, 2000) 2007* $1.00 $0.014 $(0.014) $1.00 1.45% $ 73,460 0.55% 2.89% 0.62% 2006 1.00 0.026 (0.026) 1.00 2.62 85,014 0.55 2.60 0.62 2005 1.00 0.015 (0.015)** 1.00 1.51 73,211 0.55 1.46 0.63 2004 1.00 0.005 (0.005) 1.00 0.52 79,413 0.55 0.51 0.65 2003 1.00 0.006 (0.006) 1.00 0.62 87,820 0.55 0.59 0.65 2002 1.00 0.010 (0.010) 1.00 0.98 58,923 0.55 0.96 0.69 Class A (commenced operations on June 21, 1999) 2007* $1.00 $0.013 $(0.013) $1.00 1.34% $ 546,317 0.78% 2.66% 1.12% 2006 1.00 0.024 (0.024) 1.00 2.39 631,478 0.78 2.36 1.12 2005 1.00 0.013 (0.013)** 1.00 1.28 569,671 0.78 1.25 1.13 2004 1.00 0.003 (0.003) 1.00 0.29 505,029 0.78 0.29 1.15 2003 1.00 0.004 (0.004) 1.00 0.41 539,182 0.76 0.41 1.15 2002 1.00 0.007 (0.007) 1.00 0.75 519,269 0.78 0.75 1.19 Class S (commenced operations on November 12, 1999) 2007* $1.00 $0.012 $(0.012) $1.00 1.24% $ 105,257 0.98% 2.47% 1.12% 2006 1.00 0.022 (0.022) 1.00 2.18 107,131 0.98 2.17 1.12 2005 1.00 0.011 (0.011)** 1.00 1.08 88,182 0.98 1.09 1.13 2004 1.00 0.002 (0.002) 1.00 0.15 33,520 0.91 0.15 1.15 2003 1.00 0.003 (0.003) 1.00 0.27 24,002 0.89 0.27 1.15 2002 1.00 0.005 (0.005) 1.00 0.55 29,626 0.98 0.53 1.19
* FOR THE SIX MONTHS ENDED MARCH 31, 2007. ** INCLUDES A REALIZED CAPITAL GAIN DISTRIBUTION OF LESS THAN $0.001. ++ RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED. FEE WAIVERS ARE IN EFFECT; IF THEY HAD NOT BEEN IN EFFECT, PERFORMANCE WOULD HAVE BEEN LOWER. RETURNS SHOWN DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. (1) ANNUALIZED FOR PERIODS LESS THAN ONE YEAR. (2) RATIO INCLUDES WAIVERS AND PREVIOUSLY WAIVED INVESTMENT ADVISORY FEES RECOVERED. THE IMPACT OF THE RECOVERED FEES MAY CAUSE A HIGHER NET EXPENSE RATIO. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 56 notes to financial statements MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- 1. ORGANIZATION: CNI Charter Funds, a Delaware statutory trust (the "Trust"), is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company with sixteen portfolios. The financial statements included herein are those of the Large Cap Value Equity Fund, Large Cap Growth Equity Fund, RCB Small Cap Value Fund, Technology Growth Fund (collectively, the "Equity Funds"); Corporate Bond Fund, Government Bond Fund, California Tax Exempt Bond Fund, High Yield Bond Fund (collectively, the "Fixed Income Funds"); and Prime Money Market Fund, Government Money Market Fund and California Tax Exempt Money Market Fund (collectively, the "Money Market Funds") (each a "Fund", collectively, the "Funds"). The Equity and Fixed Income Funds are registered to offer Institutional and Class A Shares; in addition, the RCB Small Cap Value Fund is registered to offer Class R Shares. The Money Market Funds are registered to offer Institutional, Class A and Class S Shares. The assets of each Fund are segregated, and a shareholder's interest is limited to the Fund in which shares are held. The Funds' prospectuses provide a description of each Fund's investment objectives, policies and strategies. On April 5, 2005, the Board of Trustees of CNI Charter Funds (the "Trust") approved the reorganization of the AHA Limited Maturity Fixed Income Fund, AHA Full Maturity Fixed Income Fund, AHA Balanced Fund, AHA Diversified Equity Fund, and AHA Socially Responsible Equity Fund series of AHA Investment Funds, Inc. ("AHA Funds") into newly established corresponding series of the Trust. The reorganization was approved by shareholders of AHA Funds and was effective on October 3, 2005. Shares of the AHA Funds are offered through separate prospectuses. To request a prospectus for the AHA Funds, shareholders can call 1-800-445-1341 or write to CNI Charter Funds, c/o SEI Investments Distribution Co., One Freedom Valley Drive, Oaks, Pennsylvania 19456. 2. SIGNIFICANT ACCOUNTING POLICIES: The following is a summary of significant accounting policies followed by the Funds. USE OF ESTIMATES -- The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. SECURITY VALUATION -- Securities listed on a securities exchange, market or automated quotation system for which quotations are readily available (except for securities traded on NASDAQ) are valued at the last quoted sale price on the primary exchange or market (foreign or domestic) on which they are traded, or, if there is no such reported sale, at the most recent quoted bid price. For securities traded on NASDAQ, the NASDAQ Official Closing Price will be used. If available, debt securities are priced based upon valuations provided by independent, third-party pricing agents. Such values generally reflect the last reported sales price if the security is actively traded. The third-party pricing agents may also value debt securities at an evaluated bid price by employing methodologies that utilize actual market transactions, broker-supplied valuations, or other methodologies designed to identify the market value for such securities. Debt obligations with remaining maturities of sixty days or less may be valued at their amortized cost, which approximates market value. The prices for foreign securities are reported in local currency and converted to U.S. dollars using currency exchange rates. Prices for most securities held in the Funds are provided daily by recognized independent pricing agents. If a security price cannot be obtained from an independent, third-party pricing agent, the Funds seek to obtain a bid price from at least one independent broker. Securities for which market prices are not "readily available" are valued in accordance with Fair Value Procedures established by the Funds' Board of Trustees. The Funds' Fair Value Procedures are implemented through a Fair Value Committee (the "Committee") designated by the Funds' Board of Trustees. Some of the more common reasons that may necessitate that a security be valued using Fair Value Procedures include: the security's trading has been halted or suspended; the security has been de-listed from a national exchange; the security's primary trading market is temporarily closed at a time when under normal conditions it would be open; for international securities market events occur after the close of the foreign markets that make closing prices not representative of fair value; or the security's primary pricing source is not able or willing to provide a price. When a security is valued in accordance with the Fair Value Procedures, the Committee will determine the value after taking into consideration relevant information reasonably available to the Committee. SECURITY TRANSACTIONS AND RELATED INCOME -- Security transactions are accounted for on the trade date of the security purchase or sale. Costs used in determining net realized capital gains and losses on the sale of securities are those of the specific securities sold. Interest income is recognized on the accrual basis and dividend income is recognized on the ex-dividend date. Purchase discounts and premiums on securities held by the Funds are accreted and amortized to maturity using the scientific method. CNI CHARTER FUNDS | PAGE 57 notes to financial statements MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- REPURCHASE AGREEMENTS -- Securities pledged as collateral for repurchase agreements are held by each Fund's custodian bank until maturity of the repurchase agreements. Provisions of the agreements and procedures adopted by the investment adviser require that the market value of the collateral, including accrued interest thereon, is sufficient in the event of default by the counterparty. The Funds also invest in tri-party repurchase agreements. Securities held as collateral for tri-party repurchase agreements are maintained by the broker's custodian bank in a segregated account until maturity of the repurchase agreement. Provisions of the agreements require that the market value of the collateral, including accrued interest thereon, is sufficient in the event of default. If the counterparty defaults and the value of the collateral declines or if the counterparty enters into an insolvency proceeding, realization of the collateral by the Fund may be delayed or limited. TBA TRANSACTIONS -- The Funds may engage in "to be announced" ("TBA") security transactions. Such transactions involve a commitment by the Funds to purchase or sell securities for a predetermined price or yield, with payment and delivery taking place beyond the customary settlement period. The Funds record TBA securities on the trade date and maintain security positions such that sufficient liquid assets will be available to make payments for the securities purchased. EXPENSE ALLOCATION -- Common expenses incurred by the Funds are allocated among the Funds (i) based upon relative average daily net assets, (ii) as incurred on a specific identification basis, or (iii) equally among the Funds, depending on the nature of the expenditure. CLASSES -- Class-specific expenses are borne by that class. Income, non class-specific expenses, and realized and unrealized gains/losses are allocated to the respective class on the basis of relative net asset value each day. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment income are declared daily and paid to shareholders monthly for the Fixed Income and Money Market Funds. Dividends from net investment income are declared and paid quarterly for the Large Cap Value Equity, Large Cap Growth Equity, and Technology Growth Funds. For the RCB Small Cap Value Fund, dividends from net investment income are declared and paid annually. Distributions from net realized capital gains are distributed to shareholders at least annually. 3. ADMINISTRATION, TRANSFER AGENT, DISTRIBUTION AND SHAREHOLDER SERVICES AGREEMENTS: Pursuant to an administration agreement (the "Agreement"), SEI Investments Global Funds Services (the "Administrator"), a wholly owned subsidiary of SEI Investments Company, acts as the Trust's Administrator. Under the terms of the Agreement dated April 1, 1999, as amended January 1, 2005, the Administrator is entitled to receive an annual fee of 0.065% of aggregate average daily net assets of the Trust not exceeding $2.5 billion, 0.045% of aggregate average daily net assets of the Trust exceeding $2.5 billion but not exceeding $5 billion, and 0.025% of aggregate average daily net assets of the Trust exceeding $5 billion. Each Fund is subject to a minimum annual fee of $90,000, which may be reduced at the sole discretion of the Administrator. The Trust has adopted a Rule 12b-1 Distribution Plan ("the Plan") with respect to Class A, Class S and Class R Shares that allows each Fund to pay distribution and servicing fees. SEI Investments Distribution Co. (the "Distributor"), as compensation for its services under the Plan, receives a distribution fee, computed daily and paid monthly, at the annual rate of 0.50% of the average daily net assets of the Class A Shares and Class S Shares of the Money Market Funds and 0.25% of the Class A Shares of the Equity and Fixed Income Funds and the Class R Shares of the RCB Small Cap Value Fund, with the exception of 0.30% charged to the Class A Shares of the Technology Growth and High Yield Bond Funds, which may be used by the Distributor to provide compensation for sales support and distribution-related activities. The Trust and the Distributor are parties to a Distribution Agreement dated April 1, 1999. The Distributor receives no fees for its distribution services under this agreement. SEI Investments Fund Management serves as Transfer Agent for the Trust whereby it provides services at an annual rate of $15,000 per share class. The Transfer Agent has voluntarily agreed to waive these fees. Citigroup Fund Services, LLC serves as the Sub-Transfer Agent for the RCB Small Cap Value Fund. U.S. Bank, N.A. serves as Custodian for the Trust. The Custodian plays no role in determining the investment policies of the Trust or which securities are to be purchased or sold by the Trust. The Trust has also adopted a Shareholder Servicing Agreement that permits payment of compensation to service providers, that may include City National Bank ("CNB"), that have agreed to provide certain shareholder support for their customers who own Institutional Class, Class A, Class S or Class R Shares. In consideration for such services, a shareholder servicing fee is charged at the annual rate of up to 0.25% of each Fund's average daily net assets. The Trust has agreed to voluntarily waive shareholder servicing fees to the extent necessary to limit the total CNI CHARTER FUNDS | PAGE 58 - -------------------------------------------------------------------------------- operating expenses of the Fund. For the six-months ended March 31, 2007, CNB received Shareholder Servicing fees from the Trust in the amount of $4,737,643. Certain officers of the Trust are also officers of City National Asset Management, Inc. ("CNAM", the "Adviser") and the Administrator. Such officers are paid no fees by the Trust for serving as officers of the Trust. 4. INVESTMENT ADVISORY FEES AND OTHER AGREEMENTS: CNAM, a wholly owned subsidiary of CNB, serves as the Investment Manager for the Funds. Under the terms of the current agreement, the Adviser receives an annual fee equal to 0.62% of the average daily net assets of the Large Cap Value Equity Fund, 0.65% of the average daily net assets of the Large Cap Growth Equity Fund, 0.85% of the average net assets of the RCB Small Cap Value Fund, 0.85% of the average daily net assets of the Technology Growth Fund, 0.40% of the average daily net assets of the Corporate Bond Fund, 0.43% of the average daily net assets of the Government Bond Fund, 0.27% of the average daily net assets of the California Tax Exempt Bond Fund, 0.75% of the average daily net assets of the High Yield Bond Fund, 0.25% of the average daily net assets of the Prime Money Market Fund, 0.26% of the average daily net assets of the Government Money Market Fund, and 0.27% of the average daily net assets of the California Tax Exempt Money Market Fund. REED, CONNER & BIRDWELL, LLC acts as the Investment Sub-Adviser on behalf of the RCB Small Cap Value Fund. HSBC HALBIS PARTNERS (USA), INC. acts as the Investment Sub-Adviser on behalf of the High Yield Bond Fund. Sub-Adviser fees are paid by the Adviser. The Adviser has voluntarily agreed to limit its fees or reimburse expenses to the extent necessary to keep operating expenses at or below certain percentages of the Funds' respective average daily net assets. The Adviser has voluntarily agreed to maintain this limitation until further notice to the Trust. The voluntary expense limitations (expressed as a percentage of average daily net assets) are as follows: Large Cap Large Cap RCB Value Growth Small Cap Technology Equity Equity Value Growth Fund Fund Fund Fund - -------------------------------------------------------------------------------- Institutional Class 1.00% 1.05% 1.24% 1.20% Class A 1.25% 1.30% 1.49% 1.50% Class R -- -- 1.49% -- - -------------------------------------------------------------------------------- California Corporate Government Tax Exempt High Yield Bond Bond Bond Bond Fund Fund Fund Fund - -------------------------------------------------------------------------------- Institutional Class 0.75% 0.70% 0.50% 1.00% Class A 1.00% 0.95% 0.75% 1.30% - -------------------------------------------------------------------------------- Prime California Money Government Tax Exempt Market Money Market Money Market Fund Fund Fund - -------------------------------------------------------------------------------- Institutional Class 0.63% 0.63% 0.55% Class A 0.85% 0.85% 0.78% Class S 1.05% 1.05% 0.98% - -------------------------------------------------------------------------------- Any fee reductions or expense reimbursements may be repaid to the Adviser within three years after occurrence, subject to certain restrictions and only if such repayments do not cause the Funds' expense ratios, at the time of repayment, to exceed the amounts shown in the preceding table. As of March 31, 2007, fees which were previously waived by the Adviser which may be subject to possible future reimbursement to the Adviser were as follows: Potential Amount of Fund Recovery (000) Expiration - -------------------------------------------------------------------------------- Government Bond $ 16 2007 18 2008 23 2009 California Tax Exempt Bond 23 2007 25 2008 28 2009 High Yield Bond 42 2007 42 2008 38 2009 California Tax Exempt Money Market 496 2007 430 2008 516 2009 5. INVESTMENT TRANSACTIONS: The cost of security purchases and proceeds from the sale and maturities of securities, other than temporary investments in short-term securities for the six months ended March 31, 2007, were as follows for the Equity and Fixed Income Funds: Purchases Sales & Maturities - -------------------------------------------------------------------------------- U.S. Gov`t Other U.S. Gov`t Other Fund (000) (000) (000) (000) - -------------------------------------------------------------------------------- Large Cap Value Equity $ -- $15,086 $ -- $12,011 Large Cap Growth Equity -- 9,187 -- 6,018 RCB Small Cap Value -- 18,669 -- 31,023 Technology Growth -- 539 -- 535 Corporate Bond 1,059 8,706 309 7,365 Government Bond 30,097 1,010 16,973 2,132 California Tax Exempt Bond -- 11,298 -- 7,976 High Yield Bond -- 5,279 -- 8,441 - -------------------------------------------------------------------------------- CNI CHARTER FUNDS | PAGE 59 notes to financial statements MARCH 31, 2007 (UNAUDITED) - -------------------------------------------------------------------------------- 6. FEDERAL TAX INFORMATION: It is each Fund's intention to continue to qualify as a regulated investment company for Federal income tax purposes and distribute all of its taxable income and net capital gains. Accordingly, no provisions for Federal income taxes are required. The Funds may be subject to taxes imposed by countries in which they invest, with respect to their investments in issuers existing or operating in such countries. Such taxes are generally based on income earned. The Funds accrue such taxes when the related income is earned. The timing and characterization of certain income and capital gains distributions are determined annually in accordance with Federal tax regulations, which may differ from accounting principles generally accepted in the United States of America. As a result, net investment income (loss) and net realized gain (loss) on investment transactions for a reporting period may differ significantly from distributions during such period. These book/tax differences may be temporary or permanent. To the extent these differences are permanent in nature, they are charged or credited to undistributed net investment income (loss), accumulated net realized gain (loss), or paid-in-capital, as appropriate, in the period that the differences arise. The tax character of dividends and distributions declared during the years ended September 30, 2006 and September 30, 2005 are shown below: Tax Exempt Ordinary Long-term Income Income Capital Gain Total Fund (000) (000) (000) (000) - -------------------------------------------------------------------------------- Large Cap Value Equity 2006 $ -- $ 1,252 $3,789 $ 5,041 2005 -- 535 1,908 2,443 Large Cap Growth Equity 2006 -- 101 -- 101 2005 -- 198 -- 198 RCB Small Cap Value 2006 -- 66 1,121 1,187 2005 -- 521 2,493 3,014 Technology Growth 2006 -- 4 -- 4 2005 -- -- -- -- Corporate Bond 2006 -- 2,221 -- 2,221 2005 -- 1,919 303 2,222 Government Bond 2006 -- 1,324 -- 1,324 2005 -- 739 120 859 California Tax Exempt Bond 2006 724 26 68 818 2005 593 -- 82 675 High Yield Bond 2006 -- 3,020 -- 3,020 2005 -- 3,404 -- 3,404 Prime Money Market 2006 -- 43,643 -- 43,643 2005 -- 14,619 -- 14,619 Government Money Market 2006 -- 85,649 -- 85,649 2005 -- 38,829 -- 38,829 California Tax Exempt Money Market 2006 19,281 -- -- 19,281 2005 9,088 -- 173 9,261 As of September 30, 2006, the components of Distributable Earnings/(Accumulated Losses) on a tax basis were as follows:
Undistributed Undistributed Undistributed Capital Tax-Exempt Ordinary Long-term Loss Post-October Income Income Capital Gain Carryforwards Losses Fund (000) (000) (000) (000) (000) - -------------------------------------------------------------------------------------------------------------------- Large Cap Value Equity $ -- $ 303 $ 5,197 $ -- $ -- Large Cap Growth Equity -- 22 -- (2,998) -- RCB Small Cap Value -- 2 1,108 -- -- Technology Growth -- -- -- (1,504) -- Corporate Bond -- 198 -- (64) (271) Government Bond -- 130 -- (59) (355) California Tax Exempt Bond 65 -- -- -- (42) High Yield Bond -- 245 -- (1,233) (22) Prime Money Market -- 5,059 -- (403) -- Government Money Market -- 8,376 -- -- -- California Tax Exempt Money Market 1,831 -- -- -- -- Unrealized Other Total Appreciation Temporary Distributable Earnings (Depreciation) Differences (Accumulated Losses) Fund (000) (000) (000) - --------------------------------------------------------------------------------------------- Large Cap Value Equity $17,218 $ (304) $22,414 Large Cap Growth Equity 4,119 (24) 1,119 RCB Small Cap Value 12,695 -- 13,806 Technology Growth 191 -- (1,313) Corporate Bond (374) (199) (710) Government Bond (232) (130) (646) California Tax Exempt Bond 77 (66) 34 High Yield Bond (37) (245) (1,292) Prime Money Market -- (5,057) (401) Government Money Market -- (8,374) 2 California Tax Exempt Money Market -- (1,830) 1
CNI CHARTER FUNDS | PAGE 60 - -------------------------------------------------------------------------------- For tax purposes, the losses in the Funds can be carried forward for a maximum of eight years to offset any future net realized capital gains. At September 30, 2006, the breakdown of capital loss carryforwards is as follows: Expiring September 30, ------------------------------------------------------- 2010 2011 2012 2013 2014 Fund (000) (000) (000) (000) (000) - -------------------------------------------------------------------------------- Large Cap Growth Equity $1,482 $1,516 $ -- $ -- $ -- Technology Growth 290 658 328 228 -- Corporate Bond -- -- -- -- 64 Government Bond -- -- -- -- 59 High Yield Bond 33 932 -- -- 268 Prime Money Market 403 -- -- -- -- - -------------------------------------------------------------------------------- During the year ended September 30, 2006, the following Funds had utilized capital loss carryforwards to offset capital gains amounting to: Amount Fund (000) - -------------------------------------------------------------------------------- Large Cap Growth Equity $1,412 Technology Growth 102 - -------------------------------------------------------------------------------- Post-October losses represent losses realized on investments and foreign currency transactions from November 1, 2005 through September 30, 2006 that, in accordance with Federal income tax regulations, the Funds have elected to defer and treat as having arisen in the following fiscal year. The aggregate gross unrealized appreciation on securities, the aggregate gross unrealized (depreciation) on securities and the net unrealized appreciation/ (depreciation) for tax purposes at March 31, 2007 for each of the Equity and Fixed Income Funds were as follows: Aggregate Aggregate Net Gross Gross Unrealized Federal Unrealized Unrealized Appreciation Tax Cost Appreciation Depreciation (Depreciation) Fund (000) (000) (000) (000) - -------------------------------------------------------------------------------- Large Cap Value Equity $ 96,260 $24,092 $(1,111) $22,981 Large Cap Growth Equity 46,150 7,587 (1,685) 5,902 RCB Small Cap Value 52,925 15,839 (1,503) 14,336 Technology Growth 2,585 529 (268) 261 Corporate Bond Fund 59,084 387 (441) (54) Government Bond 46,987 141 (96) 45 California Tax Exempt Bond 31,125 75 (118) (43) High Yield Bond 38,096 1,369 (536) 833 7. CONCENTRATION OF CREDIT RISK: In the normal course of business, the Funds enter into contracts that provide general indemnifications. The Funds' maximum exposure under these arrangements is dependent on future claims that may be made against the Funds and, therefore, cannot be established; however, based on experience, the risk of loss from such claim is considered remote. CALIFORNIA TAX EXEMPT FUNDS -- SPECIFIC RISKS The ability of issuers to pay interest on, and repay principal of, California municipal securities may be affected by economic and political developments in the State of California. Certain securities are backed by letters of credit from various financial institutions and financial guaranty assurance agencies. These letters of credit enhance the credit quality of the individual securities; however, if any of the financial institutions or financial guaranty assurance agencies' credit quality should deteriorate, it could cause the individual security's credit quality to change. Additionally, if any of the Funds concentrate their letters of credit in any one financial institution, the risk of credit quality deterioration increases. 8. SUBSEQUENT EVENT: Effective as of the commencement of business on April 16, 2007, the Technology Growth Fund of the CNI Charter Funds (the "Trust") was reorganized into the Large Cap Growth Fund of the Trust. CNI CHARTER FUNDS | PAGE 61 notes to financial statements MARCH 31, 2007 (UNAUDITED) 9. CAPITAL SHARES ISSUED AND REDEEMED: Capital share activity for the six months ended March 31, 2007 (Unaudited) and the year ended September 30, 2006 were as follows:
LARGE CAP VALUE LARGE CAP GROWTH RCB SMALL CAP TECHNOLOGY EQUITY FUND (000) EQUITY FUND (000) VALUE FUND (000) GROWTH FUND (000) ------------------ ----------------- ------------------ ------------------ 2007 2006 2007 2006 2007 2006 2007 2006 - --------------------------------------------------------- ------------------ ------------------ ------------------ CAPITAL SHARES ISSUED AND REDEEMED: INSTITUTIONAL CLASS: Shares Issued 1,115 5,652 631 1,054 43 192 29 80 Shares Issued in Lieu of Dividends and Distributions 391 304 6 4 6 6 -- 1 Shares Redeemed (785) (1,488) (383) (1,036) (213) (211) (23) (85) - --------------------------------------------------------- ------------------ ------------------ ------------------ Net Institutional Class Transactions 721 4,468 254 22 (164) (13) 6 (4) ========================================================= ================== ================== ================== CLASS A: Shares Issued 178 275 249 425 11 41 8 34 Shares Issued in Lieu of Dividends and Distributions 63 50 2 1 4 5 -- -- Shares Redeemed (81) (177) (95) (202) (42) (122) (8) (52) - --------------------------------------------------------- ------------------ ------------------ ------------------ Net Class A Transactions 160 148 156 224 (27) (76) -- (18) ========================================================= ================== ================== ================== CLASS R: Shares Issued -- -- -- -- 82 433 -- -- Shares Issued in Lieu of Dividends and Distributions -- -- -- -- 23 27 -- -- Shares Redeemed -- -- -- -- (310) (863) -- -- - --------------------------------------------------------- ------------------ ------------------ ------------------ Net Class R Transactions -- -- -- -- (205) (403) -- -- ========================================================= ================== ================== ==================
CALIFORNIA HIGH YIELD CORPORATE BOND GOVERNMENT BOND TAX EXEMPT BOND BOND FUND (000) FUND (000) FUND (000) FUND (000) ---------------- ---------------- ----------------- ------------------- 2007 2006 2007 2006 2007 2006 2007 2006 - --------------------------------------------------------- ------------------ ------------------ ------------------ CAPITAL SHARES ISSUED AND REDEEMED: INSTITUTIONAL CLASS: Shares Issued 666 1,551 1,066 1,325 839 865 56 460 Shares Issued in Lieu of Dividends and Distributions 22 40 24 33 15 25 48 100 Shares Redeemed (416) (1,139) (232) (594) (407) (565) (458) (726) - --------------------------------------------------------- ------------------ ------------------ ------------------ Net Institutional Class Transactions 272 452 858 764 447 325 (354) (166) ========================================================= ================== ================== ================== CLASS A: Shares Issued 13 14 67 135 -- 3 99 204 Shares Issued in Lieu of Dividends and Distributions 1 3 1 1 1 1 47 92 Shares Redeemed (30) (35) (4) (16) (10) (38) (98) (383) - --------------------------------------------------------- ------------------ ------------------ ------------------ Net Class A Transactions (16) (18) 64 120 (9) (34) 48 (87) ========================================================= ================== ================== ==================
AMOUNTS DESIGNATED AS "--" ARE EITHER 0 OR HAVE BEEN ROUNDED TO 0. CNI CHARTER FUNDS | PAGE 62
California PRIME GOVERNMENT TAX EXEMPT MONEY MARKET MONEY MARKET MONEY MARKET FUND (000) FUND (000) FUND (000) ----------------------- ------------------------- ----------------------- 2007 2006 2007 2006 2007 2006 - ------------------------------------------------------------------- ------------------------- ------------------------- CAPITAL SHARES ISSUED AND REDEEMED: INSTITUTIONAL CLASS: Shares Issued 615,771 1,690,942 305,556 635,895 846,084 1,444,514 Shares Issued in Lieu of Dividends and Distributions 1,880 2,507 2 2 -- -- Shares Redeemed (568,986) (1,637,671) (307,427) (615,154) (857,640) (1,432,711) - ------------------------------------------------------------------- ------------------------- ------------------------- Net Institutional Class Transactions 48,665 55,778 (1,869) 20,743 (11,556) 11,803 =================================================================== ========================= ========================= CLASS A: Shares Issued 1,111,495 2,204,941 2,647,781 5,761,555 1,091,054 2,014,013 Shares Issued in Lieu of Dividends and Distributions 5,424 5,522 31,472 51,511 6,815 12,188 Shares Redeemed (1,054,800) (1,882,549) (2,486,525) (5,767,874) (1,183,030) (1,964,398) - ------------------------------------------------------------------- ------------------------- ----------------------- Net Class A Transactions 62,119 327,914 192,728 45,192 (85,161) 61,803 =================================================================== ========================= ========================= CLASS S: Shares Issued 743,524 1,261,525 363,409 1,013,412 170,453 348,788 Shares Issued in Lieu of Dividends and Distributions -- -- -- -- -- -- Shares Redeemed (644,626) (1,140,675) (330,743) (1,009,234) (172,327) (329,840) - ------------------------------------------------------------------- ------------------------- ----------------------- Net Class S Transactions 98,898 120,850 32,666 4,178 (1,874) 18,948 =================================================================== ========================= =========================
AMOUNTS DESIGNATED AS "--" ARE EITHER 0 OR HAVE BEEN ROUNDED TO 0. 10. NEW ACCOUNTING PRONOUNCEMENTS In June 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 for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. At this time, management is evaluating the implications of FIN 48 and its impact on the Funds' financial statements has not yet been determined. In September 2006, FASB issued Statement on Financial Accounting Standards (SFAS) No. 157, "Fair Value Measurements." This standard establishes a single authoritative definition of fair value, sets out a framework for measuring fair value and requires additional disclosures about fair value measurements. SFAS No. 157 applies to fair value measurements already required or permitted by existing standards. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. The changes to current generally accepted accounting principles from the application of this Statement relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurements. As of September 30, 2006, the Funds do not believe the adoption of SFAS No. 157 will impact the amounts reported in the financial statements; however, additional disclosures may be required about the inputs used to develop the measurements and the effect of certain of the measurements reported in the financial statements for a fiscal period. CNI CHARTER FUNDS | PAGE 63 disclosure of fund expenses (UNAUDITED) - -------------------------------------------------------------------------------- All mutual funds have operating expenses. As a shareholder of a Fund, your investment is affected by these ongoing costs, which include (among others) costs for portfolio management, administrative services, and shareholder reports like this one. It is important for you to understand the impact of these costs on your investment returns. Operating expenses such as these are deducted from the Fund's gross income and directly reduce your final investment return. These expenses are expressed as a percentage of the Fund's average net assets; this percentage is known as the Fund's expense ratio. The following examples use the expense ratio and are intended to help you understand the ongoing costs (in dollars) of investing in your Fund and to compare these costs with those of other mutual funds. The examples are based on an investment of $1,000 made at the beginning of the period shown and held for the entire period. The table below illustrates your Fund's costs in two ways: ACTUAL FUND RETURN. This section helps you to estimate the actual expenses that your Fund incurred over the period. The "Expenses Paid During Period" column shows the actual dollar expense cost incurred by a $1,000 investment in the Fund, and the "Ending Account Value" number is derived from deducting that expense cost from the Fund's gross investment return. You can use this information, together with the actual amount you invested in the Fund, to estimate the expenses you paid over that period. Simply divide your actual account value by $1,000 to arrive at a ratio (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply that ratio by the number shown for your Fund under "Expenses Paid During Period." HYPOTHETICAL 5% RETURN. This section helps you compare your Fund's costs with those of other mutual funds. It assumes that the Fund had an annual 5% return before expenses during the year, but that the expense ratio (Column 3) for the period is unchanged. This example is useful in making comparisons because the Securities and Exchange Commission requires all mutual funds to make this 5% calculation. You can assess your Fund's comparative cost by comparing the hypothetical result for your Fund in the "Expenses Paid During Period" column with those that appear in the same charts in the shareholder reports for other funds. NOTE: Because the return is set at 5% for comparison purposes -- NOT your Fund's actual return -- the account values shown do not apply to your specific investment. BEGINNING ENDING EXPENSES ACCOUNT ACCOUNT ANNUALIZED PAID VALUE VALUE EXPENSE DURING 10/1/06 3/31/07 RATIOS PERIOD* - -------------------------------------------------------------------------------- LARGE CAP VALUE FUND - -------------------------------------------------------------------------------- ACTUAL FUND RETURN Institutional Class $1,000.00 $1,096.50 0.96% $5.02 Class A 1,000.00 1,094.30 1.21 6.32 HYPOTHETICAL 5% RETURN Institutional Class 1,000.00 $1,020.14 0.96% $4.84 Class A 1,000.00 1,018.90 1.21 6.09 BEGINNING ENDING EXPENSES ACCOUNT ACCOUNT ANNUALIZED PAID VALUE VALUE EXPENSE DURING 10/1/06 3/31/07 RATIOS PERIOD* - -------------------------------------------------------------------------------- LARGE CAP GROWTH FUND - -------------------------------------------------------------------------------- ACTUAL FUND RETURN Institutional Class $1,000.00 $1,055.30 0.99% $5.07 Class A 1,000.00 1,053.20 1.24 6.35 HYPOTHETICAL 5% RETURN Institutional Class $1,000.00 $1,020.00 0.99% $4.99 Class A 1,000.00 1,018.75 1.24 6.24 * Expenses are equal to the Fund's annualized expense ratio multiplied by the average account value over the period, multiplied by 182/365 (to reflect one-half year period). CNI CHARTER FUNDS | PAGE 64 - -------------------------------------------------------------------------------- BEGINNING ENDING EXPENSES ACCOUNT ACCOUNT ANNUALIZED PAID VALUE VALUE EXPENSE DURING 10/1/06 3/31/07 RATIOS PERIOD* - -------------------------------------------------------------------------------- RCB SMALL CAP VALUE FUND - -------------------------------------------------------------------------------- ACTUAL FUND RETURN Institutional Class $1,000.00 $1,165.50 1.19% $6.42 Class A 1,000.00 1,164.00 1.44 7.77 Class R 1,000.00 1,164.30 1.44 7.77 HYPOTHETICAL 5% RETURN Institutional Class $1,000.00 $1,019.00 1.19% $5.99 Class A 1,000.00 1,017.75 1.44 7.24 Class R 1,000.00 1,017.75 1.44 7.24 - -------------------------------------------------------------------------------- TECHNOLOGY FUND - -------------------------------------------------------------------------------- ACTUAL FUND RETURN Institutional Class $1,000.00 $1,048.80 1.19% $6.08 Class A 1,000.00 1,049.60 1.49 7.61 HYPOTHETICAL 5% RETURN Institutional Class $1,000.00 $1,019.00 1.19% $5.99 Class A 1,000.00 1,017.50 1.49 7.49 - -------------------------------------------------------------------------------- CORPORATE BOND FUND - -------------------------------------------------------------------------------- ACTUAL FUND RETURN Institutional Class $1,000.00 $1,025.40 0.74% $3.74 Class A 1,000.00 1,024.10 0.99 5.00 HYPOTHETICAL 5% RETURN Institutional Class $1,000.00 $1,021.24 0.74% $3.73 Class A 1,000.00 1,020.00 0.99 4.99 - -------------------------------------------------------------------------------- GOVERNMENT BOND FUND - -------------------------------------------------------------------------------- ACTUAL FUND RETURN Institutional Class $1,000.00 $1,025.60 0.70% $3.54 Class A 1,000.00 1,024.30 0.95 4.79 HYPOTHETICAL 5% RETURN Institutional Class $1,000.00 $ 1,021.44 0.70% $3.53 Class A 1,000.00 1,020.19 0.95 4.78 - -------------------------------------------------------------------------------- CALIFORNIA TAX-EXEMPT BOND FUND - -------------------------------------------------------------------------------- ACTUAL FUND RETURN Institutional Class $1,000.00 $1,011.00 0.50% $2.51 Class A 1,000.00 1,010.70 0.75 3.76 HYPOTHETICAL 5% RETURN Institutional Class $1,000.00 $ 1,022.44 0.50% $2.52 Class A 1,000.00 1,021.19 0.75 3.78 BEGINNING ENDING EXPENSES ACCOUNT ACCOUNT ANNUALIZED PAID VALUE VALUE EXPENSE DURING 10/1/06 3/31/07 RATIOS PERIOD* - -------------------------------------------------------------------------------- HIGH YIELD BOND FUND - -------------------------------------------------------------------------------- ACTUAL FUND RETURN Institutional Class $1,000.00 $1,064.80 1.00% $5.15 Class A 1,000.00 1,063.30 1.30 6.69 HYPOTHETICAL 5% RETURN Institutional Class $1,000.00 $1,019.95 1.00% $5.04 Class A 1,000.00 1,018.45 1.30 6.54 - -------------------------------------------------------------------------------- PRIME MONEY MARKET FUND - -------------------------------------------------------------------------------- ACTUAL FUND RETURN Institutional Class $1,000.00 $1,024.00 0.59% $2.98 Class A 1,000.00 1,022.80 0.81 4.08 Class S 1,000.00 1,021.80 1.01 5.09 HYPOTHETICAL 5% RETURN Institutional Class $1,000.00 $ 1,021.99 0.59% $2.97 Class A 1,000.00 1,020.89 0.81 4.08 Class S 1,000.00 1,019.90 1.01 5.09 - -------------------------------------------------------------------------------- GOVERNMENT MONEY MARKET FUND - -------------------------------------------------------------------------------- ACTUAL FUND RETURN Institutional Class $1,000.00 $1,023.70 0.60% $3.03 Class A 1,000.00 1,022.60 0.82 4.13 Class S 1,000.00 1,021.50 1.02 5.14 HYPOTHETICAL 5% RETURN Institutional Class $1,000.00 $1,021.94 0.60% $3.02 Class A 1,000.00 1,020.84 0.82 4.13 Class S 1,000.00 1,019.85 1.02 5.14 - -------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT MONEY MARKET FUND - -------------------------------------------------------------------------------- ACTUAL FUND RETURN Institutional Class $1,000.00 $1,014.40 0.55% $2.76 Class A 1,000.00 1,013.40 0.78 3.92 Class S 1,000.00 1,012.40 0.98 4.92 HYPOTHETICAL 5% RETURN Institutional Class $1,000.00 $ 1,022.19 0.55% $2.77 Class A 1,000.00 1,021.04 0.78 3.93 Class S 1,000.00 1,020.04 0.98 4.94 * Expenses are equal to the Fund's annualized expense ratio multiplied by the average account value over the period, multiplied by 182/365 (to reflect one-half year period). CNI CHARTER FUNDS | PAGE 65 proxy voting results - -------------------------------------------------------------------------------- At a special meeting held on March 28, 2007 the shareholders of the Technology Growth Fund of the CNI Charter Funds (the "Trust") approved an Agreement and Plan of Reorganization whereby the Technology Growth Fund series of the Trust was reorganized into the Large Cap Growth Fund series of the Trust. The result of the vote was as follows: % of % of Outstanding Shares Number of Shares Shares Present - -------------------------------------------------------------------------------- AFFIRMATIVE 390,699.00 60.88% 100% AGAINST 0.00 0.00 0.00 ABSTAIN 0.00 0.00 0.00 CNI CHARTER FUNDS | PAGE 66 approval of investment advisory agreements (UNAUDITED) - -------------------------------------------------------------------------------- The Board of Trustees of CNI Charter Funds (the "Trust") is comprised of four Trustees, all of whom are independent of the Trust's investment advisers and sub-advisers. During the six months ended March 31, 2007, the Board of Trustees approved renewal of the Trust's advisory agreement (the "Management Agreement") with City National Asset Management, Inc. ("CNAM") and CNAM's sub-advisory agreement (the "Sub-Advisory Agreement") with Reed, Conner & Birdwell, LLC ("RCB") with respect to the RCB Small Cap Value Fund (the "RCB Fund"). GENERAL INFORMATION The following information summarizes the Board's considerations associated with its approval of renewal of each of the Agreements. In connection with their deliberations, the Board considered such information and factors as they believed, in light of the legal advice furnished to them and their own business judgment, to be relevant. The Management Agreement and the Sub-Advisory Agreement were considered separately for each relevant investment portfolio of the Trust (each a "Fund"), although the Board took into account the common interests of all the relevant Funds in its review. As described below, the Board considered the nature, quality and extent of the various investment advisory and administrative services performed by CNAM and RCB. In considering these matters, the Board discussed the approval of the Agreements with management and in private sessions with counsel at which no representatives of CNAM or RCB were present. The Board reviewed extensive materials regarding investment results of CNAM and RCB, advisory fee and expense comparisons, financial and profitability information with respect to each entity, descriptions of various functions such as compliance monitoring and portfolio trading practices, and information about the personnel providing investment management and administrative services to the Funds. In deciding to approve renewal of the Agreements, the Board did not identify a single factor as controlling and this summary does not describe all of the matters considered. However, the Board concluded that each of the various factors referred to below favored such approval. CNAM NATURE, EXTENT AND QUALITY OF SERVICES In reviewing the services provided by CNAM, the Board considered a variety of matters, including the background, education and experience of its key portfolio management and operational personnel; its overall financial strength and stability; its resources and efforts to retain, attract and motivate capable personnel to serve the Funds; and the overall general quality and depth of its organization. The Board also took into account the experience, capability and integrity of its senior management; its investment philosophy and processes as well as brokerage, trading and soft dollar practices; its disaster recovery and contingency planning; and its commitment and systems in place with regard to compliance with applicable laws and regulations. INVESTMENT PERFORMANCE The Board assessed the performance of each Fund compared with its respective benchmark and the average of all funds in its respective peer group category (each, a "universe") selected by Lipper, Inc. and iMoneyNet, Inc. (for the money market funds only) for the one-, two-, three- and five-year periods ended December 31, 2006. The Board also reviewed the performance of each Fund compared with the average performance of all funds in its respective "bank channel" universe, which includes only those funds in the Fund's Lipper universe that are distributed through institutional and retail bank channels. The Board made the following observations in reviewing the Funds' performance: o The annualized total returns of the PRIME MONEY MARKET FUND were slightly below but near those of the averages of the Lipper institutional money market fund universe, iMoneyNet prime institutional fund universe, and bank channel universe. o The annualized total returns of the GOVERNMENT MONEY MARKET FUND were slightly below but near those of the averages of the Lipper institutional U.S. government money market fund universe, iMoneyNet government institutional fund universe, and bank channel universe. CNI CHARTER FUNDS | PAGE 67 approval of investment advisory agreements (Unaudited) - -------------------------------------------------------------------------------- o The annualized total returns of the TAX EXEMPT MONEY MARKET FUND were slightly below but near those of the averages of the Lipper California tax exempt money market fund universe, iMoneyNet state specific institutional (California) fund universe, and bank channel universe. o The annualized total returns of the LARGE CAP GROWTH EQUITY FUND were above those of the Lipper large cap growth fund universe, S&P 55/Citigroup Growth Index, and bank channel universe for the one-year period (except the S&P 500/Citigroup Index), below those measures for the two-year period (except the Lipper universe) and the three-year period, and significantly above all those measures for the five-year period. o The annualized total returns of the LARGE CAP VALUE EQUITY FUND were above those of the averages of the Lipper large cap value funds universe and the bank channel universe, and below the S&P 500/Citigroup Value Index, for all periods. o The annualized total returns of the RCB SMALL CAP VALUE FUND were below those of the averages of the Lipper small cap core funds universe, Russell 2000 Index and bank channel universe for the one-year period, below those measures (except for the Lipper universe) for the two- and three-year periods, and above all those measures for the five-year period. o The annualized total returns of the TECHNOLOGY GROWTH FUND were above those of the Russell 3000 Technology Index, Lipper science & technology funds universe and the bank channel universe (except for the Russell Index) for the one-year period, below or near those measures (except for the Lipper universe) for the two-year period, and below those measures for the three- and five-year periods. o The annualized total returns of the CORPORATE BOND FUND were equal to or above those of the averages of the Lipper short/intermediate investment-grade universe and the bank channel universe, and below those of the Lehman Intermediate U.S. Corporate Index, for all periods. o The annualized total returns of the GOVERNMENT BOND FUND were at or above those of the averages of the Lipper short/intermediate U.S. government universe and the bank channel universe for all periods, and below those of the Lehman U.S. Government Bond Index for all periods (except the one-year period). o The annualized total returns of the CALIFORNIA TAX EXEMPT BOND FUND were above those of the averages of the Lipper California short/intermediate debt universe and the bank channel universe for all periods (except the two-year period for the Lipper universe), and below those of the Lehman California Intermediate-Short Municipal Index for all periods. o The annualized total returns of the HIGH YIELD BOND FUND were approximately at those of the averages of the Lipper high current yield bond funds universe and the bank channel universe for the three- and five-year periods, below those measures for the one- and two-year periods and below the Citigroup Bond High-Yield Market Index for all periods. The Board determined that CNAM continued to provide high quality services to the Funds. They noted that the investment results of the Funds during the past year and previous periods were generally good; that in the instances where some of the Funds had below average short-term performance results their longer term results were good; that the results for the Money Market Funds and Technology Fund compared to their peer groups were acceptable given the special services and investment focus of those Funds; and that measurements of performance relative to market indexes needed to recognize that indexes did not reflect the expenses of operating mutual funds. The Board also considered that the Technology Growth Fund would be reorganized into the Large Cap Growth Equity Fund, upon shareholder approval. ADVISORY FEES AND FUND EXPENSES The Board reviewed information regarding the advisory fees charged by CNAM and the total expenses of each of the Funds compared to those of the funds included in the relevant Lipper and bank channel universes, and concluded that the advisory fees and expenses of the Funds continued to be reasonable. The Board observed that the management fees paid by the Funds for the year ended December 31, 2006 were at or below CNI CHARTER FUNDS | PAGE 68 - -------------------------------------------------------------------------------- the averages for relevant Lipper fund universes and bank channel universes except for the fees paid by the RCB Small Cap Value Fund, the Technology Growth Fund, the Money Market Funds and the High Yield Bond Fund, which were slightly above their respective Lipper universe averages. The Board noted that the Funds represented CNAM's sole investment advisory clients, and it would not be able to compare the fees charged to the Funds by CNAM with fees charged to other institutional clients of CNAM. With respect to the total expenses of the Funds, the Board considered that total expenses for the year ended December 31, 2006 were approximately at or below the averages for relevant Lipper universes and bank channel universes except for Class A of the Corporate Bond Fund and of the High Yield Bond Fund, which were slightly above the relevant bank channel averages; the Prime Money Market Fund and the California Tax-Exempt Money Market Fund, each of which were within the middle 60% of comparable funds; and the Government Money Market Fund, which was in the top 20% of comparable funds. The Board noted, however, that the Money Market Funds offered unique features such as automatic sweep functions, late cut-off times for investment, and no minimum transaction size requirements, and as a result had high levels of activity and considerable asset volatility, which created substantial demands on CNAM's portfolio management staff. The Board considered information prepared by CNAM relating to its costs and profits, recognizing that CNAM has no clients other than the Funds. The Board also considered the benefits received by CNAM and its affiliates as a result of CNAM's relationship with the Funds, including fees paid to City National Bank and City National Securities for providing certain shareholder servicing and sub-distribution services to the Trust, and the intangible benefits of the favorable publicity arising in connection with the Funds' performance. They also noted that, although there were no advisory fee breakpoints, the asset levels of most of the Funds were not so substantial that they would lead to significant economies of scale, and that as the majority of CNAM's operating expenses are employee salaries its operating expenses would not decrease significantly if the Funds' asset levels changed. CONCLUSIONS Based on their review, including their consideration of each of the factors referred to above, the Board concluded that the Management Agreement represents fair and reasonable compensation in light of the nature and quality of the services being provided by CNAM to the respective Funds and their shareholders. RCB NATURE, EXTENT AND QUALITY OF SERVICES In reviewing the services provided by RCB to the RCB Fund, the Board considered a variety of matters, including the background, education and experience of its key portfolio management and operational personnel; its overall financial strength and stability; its resources and related efforts to retain, attract and motivate capable personnel to serve the RCB Fund; and the overall general quality and depth of its organization. The Board also reviewed RCB's investment philosophy and processes as well as brokerage, trading and soft dollar practices. INVESTMENT PERFORMANCE The Board's observations regarding the RCB Fund's performance are described above in the "Investment Performance" section under "CNAM." As indicated above, the Board concluded that RCB continued to provide high quality services to the RCB Fund. They noted that the longer-term investment results of the RCB Fund were good, and that measurements of performance relative to market indexes needed to recognize that indexes did not reflect the expenses of operating mutual funds. ADVISORY FEES AND FUND EXPENSES The Board reviewed information regarding the advisory fees charged by RCB and observed that the fees charged by RCB were low compared to the fees it charged to other institutional clients. They noted that CNAM pays RCB's sub-advisory fees out of CNAM's advisory fee. Although RCB's fee schedule has no breakpoints, they also noted that the asset levels of the RCB Fund were not so substantial that they would lead to significant economies of scale. CNI CHARTER FUNDS | PAGE 69 approval of investment advisory agreements (UNAUDITED) - -------------------------------------------------------------------------------- The Board considered information prepared by RCB relating to its costs and profits with respect to the RCB Fund, as well as the methodologies used to determine and allocate such costs to its management of the Fund. The Board also considered the benefits received by RCB and its affiliates as a result of RCB's relationship with the Funds, including the intangible benefits of the favorable publicity arising in connection with the RCB Fund's performance, fees paid to CNAM as the Fund's adviser, and fees paid to City National Bank and City National Securities for providing certain shareholder servicing and sub-distribution services to the Trust. CONCLUSIONS Based on their review, including their consideration of each of the factors referred to above, the Board concluded that the RCB Agreement represents fair and reasonable compensation in light of the nature and quality of the services being provided by RCB to the RCB Fund and its shareholders. CNI CHARTER FUNDS | PAGE 70 notes - -------------------------------------------------------------------------------- notes - -------------------------------------------------------------------------------- ---------------------------------------------------------------- THANK YOU for your investment with CNI Charter Funds. We value the trust you have placed in us to help you achieve your financial goals. - -------------------------------------------------------------------------------- For more information on CNI Charter Funds, including charges and expenses, please call 1-888-889-0799 for a free prospectus. Read it carefully before you invest or send money. CNI CHARTER FUNDS(SM) [LOGO OMITTED] CNI-SA-002-0300 ITEM 2. CODE OF ETHICS. Not applicable for semi-annual report. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable for semi-annual report. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable for semi-annual report. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable to open-end management investment companies. ITEM 6. SCHEDULE OF INVESTMENTS. Not applicable. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable to open-end management investment companies. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable to open-end management investment companies. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable to open-end management investment companies. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. CNI Charter Funds (the "Fund") has adopted the following procedures by which shareholders may recommend nominees to the Fund's Board of Trustees. The Fund has a Nominating Committee comprised solely of persons who are not considered "interested persons" of the Fund within the meaning of the Investment Company Act of 1940. The Committee periodically reviews such issues as the Board's composition, responsibilities, committees, compensation and other relevant issues, and recommends any appropriate changes to the full Board of Trustees. While the Committee normally is able to identify from its own resources an ample number of qualified candidates, it will consider shareholder suggestions of persons to be considered as nominees to fill future vacancies on the Board, so long as the shareholder or shareholder group submitting a proposed nominee: (a) beneficially owns more than 5% of the Fund's voting shares and has held such shares continuously for two years, and (b) is not an adverse holder. No eligible shareholder or shareholder group may submit more than one independent Board member nominee each year. Such suggestions must be sent in writing to the Fund 's Secretary, and must be accompanied by the shareholder's contact information, the nominee's contact information and number of Fund shares owned by the nominee, all information regarding the nominee that would be required to be disclosed in solicitations of proxies for elections of directors required under the Securities Exchange Act of 1934, and a notarized letter from the nominee stating his or her intention to serve as a nominee and be named in the Fund's proxy statement, if so designated by the Committee and the Board of Trustees. ITEM 11. CONTROLS AND PROCEDURES. (a) The certifying officers, whose certifications are included herewith, have evaluated the registrant's disclosure controls and procedures within 90 days of the filing date of this report. In their opinion, based on their evaluation, the registrant's disclosure controls and procedures are adequately designed, and are operating effectively to ensure, that information required to be disclosed by the registrant in the reports it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. (b) There were no significant changes in the registrant's internal control over financial reporting that occurred during the registrant's last fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting. ITEMS 12. EXHIBITS. (a)(1) Not applicable for semi-annual report. (a)(2) A separate certification for the principal executive officer and the principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(a)), are filed herewith. (b) Officer certifications as required by Rule 30a-2(b) under the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(b)) also accompany this filing as an Exhibit. - -------------------------------------------------------------------------------- SIGNATURES Pursuant to the requirements of the securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) CNI Charter Funds By (Signature and Title)* /s/ Richard D. Byrd -------------------------------- Richard D. Byrd, President & CEO Date May 24, 2007 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* /s/ Richard D. Byrd ------------------------------------- Richard D. Byrd, President & CEO Date May 24, 2007 By (Signature and Title)* /s/ Eric Kleinschmidt ------------------------------------- Eric Kleinschmidt, Controller and COO Date May 24, 2007 * Print the name and title of each signing officer under his or her signature. EX-99.CERT 2 cni302cert_rb.txt CNI CERT 302 RB 3_07 CERTIFICATION Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 I, Richard D. Byrd, certify that: 1. I have reviewed this report on Form N-CSR of CNI Charter 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 registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: May 24, 2007 /s/ Richard D. Byrd - ------------------- Richard D. Byrd President & CEO EX-99.CERT 3 cni302cert_ek.txt CNI CERT 302 EK 3_07 CERTIFICATION Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 I, Eric Kleinschmidt, certify that: 1. I have reviewed this report on Form N-CSR of CNI Charter 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 registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: May 24, 2007 /s/ Eric Kleinschmidt - ----------------------- Eric Kleinschmidt Controller & COO EX-99.906CERT 4 cni906cert_rb.txt CNI CERT 906 RB 3_07 CERTIFICATION Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 The undersigned, the Chief Executive Officer of CNI Charter Funds (the "Fund") (the "Fund"), with respect to the Fund's Form N-CSR for the period ended March 31, 2007 as filed with the Securities and Exchange Commission, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge: 1. such Form N-CSR fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. the information contained in such Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Fund. Dated: May 24, 2007 /s/ Richard D. Byrd ----------------------- Richard D. Byrd President & CEO EX-99.906CERT 5 cni906cert_ek.txt CNI CERT 906 EK 3_07 CERTIFICATION Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 The undersigned, the Chief Operating Officer of CNI Charter Funds (the "Fund") (the "Fund"), with respect to the Fund's Form N-CSR for the period ended March 31, 2007 as filed with the Securities and Exchange Commission, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge: 1. such Form N-CSR fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. the information contained in such Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Fund. Dated: May 24, 2007 /s/ Eric Kleinschmidt -------------------------- Eric Kleinschmidt Controller & COO -----END PRIVACY-ENHANCED MESSAGE-----