-----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, ILvXHtUbJQG6RYz4Dwpz0JcIAGW78YX/T1oqOSpGxwZqM4MgGAAxL/yNpjyZIFj2 zXOG3X7txg+xtyT8YVgt+w== 0000950123-10-004086.txt : 20100121 0000950123-10-004086.hdr.sgml : 20100121 20100121161222 ACCESSION NUMBER: 0000950123-10-004086 CONFORMED SUBMISSION TYPE: N-CSR/A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20090930 FILED AS OF DATE: 20100121 DATE AS OF CHANGE: 20100121 EFFECTIVENESS DATE: 20100121 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-CSR/A SEC ACT: 1940 Act SEC FILE NUMBER: 811-07923 FILM NUMBER: 10539035 BUSINESS ADDRESS: STREET 1: 400 NORTH ROXBURY DRIVE CITY: BEVERLY HILLS STATE: CA ZIP: 90210 BUSINESS PHONE: (800) 708-8881 MAIL ADDRESS: STREET 1: 400 NORTH ROXBURY DRIVE CITY: BEVERLY HILLS STATE: CA ZIP: 90210 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 N 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 N 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 N CVEAX C000015990 CNI LARGE CAP VALUE EQUITY FUND - INSTITUTIONAL CNLIX 0001026977 S000005831 CNI CHARTER RCB SMALL CAP VALUE FUND C000015993 CNI CHARTER RCB SMALL CAP VALUE FUND - CLASS N 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 N 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 N 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 N 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 N 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 N CCBAX C000016008 CNI CHARTER CORPORATE BOND FUND - INSTITUTIONAL CNCIX 0001026977 S000005837 CNI CHARTER GOVERNMENT BOND FUND C000016009 CNI CHARTER GOVERNMENT BOND FUND - CLASS N CGBAX C000016010 CNI CHARTER GOVERNMENT BOND FUND - INSTITUTIONAL CNBIX 0001026977 S000018801 CNI CHARTER MULTI-ASSET FUND C000052022 Institutional Class C000052023 Class N 0001026977 S000022389 Opportunistic Value Fund C000064397 Class E C000064398 Institutional Class C000064399 Class N N-CSR/A 1 g54646a_cni-ncsra.txt ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------- FORM N-CSR ---------- CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES INVESTMENT COMPANY ACT FILE NUMBER 811-0792 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, 2009 DATE OF REPORTING PERIOD: SEPTEMBER 30, 2009 ================================================================================ EXPLANATORY NOTE ---------------- The purpose of this Amendment on Form N-CSR/A to the CNI Charter Funds Shareholder Report for the fiscal year ended September 30, 2009, which was filed with the Securities and Exchange Commission on December 7, 2009 (Accession Number 0000950123-09-068730), is to amend various share amounts within the CNI Large Cap Growth Fund's Schedule of Investments. The CNI Charter Funds Shareholder Report that was printed and distributed to shareholders was correct and did not need to be amended. ITEM 1. REPORTS TO STOCKHOLDERS. (CNI CHARTER FUNDS(SM)LOGO) (GRAPHIC) 2009 ANNUAL REPORT SEPTEMBER 30, 2009 (GRAPHIC) 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 Annual Report 2 Letter to Our Shareholders 4 Equity and Blended Funds Investment Adviser's Report 7 Equity and Blended Funds Overview 12 Fixed Income Funds Investment Adviser's Report 14 Fixed Income Funds Overview 18 Money Market Funds Investment Adviser's Report 20 Schedules of Investments 62 Statements of Assets & Liabilities 65 Statements of Operations 68 Statements of Changes in Net Assets 72 Financial Highlights 75 Notes to Financial Statements 84 Report of Independent Registered Public Accounting Firm 86 Trustees and Officers 89 Notice to Shareholders 90 Disclosure of Fund Expenses 92 Board Approval of Investment Advisory Agreements
- -------------------------------------------------------------------------- The Funds file their complete schedules 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 Funds' 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 SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- This annual report covers CNI Charter Funds for the fiscal year ended September 30, 2009. On the following pages, you will find the specific details of each Fund's portfolio and investment performance. Despite unprecedented economic and financial market turmoil, our unique philosophy and disciplined approach to capital market investment continued to show well over the last twelve months. Strict adherence to our underlying investment philosophy and continued reliance on the basic fundamentals of prudent investing proved successful once again as we steered through the financial carnage occurring over the past twelve months. The beginning months of our fiscal year witnessed a panic and ensuing "flight to quality" of historic proportion. U.S.Treasury securities represented the sole safe-haven during the final months of 2008 and beginning of 2009.All other risky assets, including high yield and corporate bonds, domestic and international equities, commodities, hedge funds and private equity produced double digit losses. As the global economic crisis deepened and central banks around the world collaborated to prevent a global depression, interest rates, stock prices, housing prices and economic activity in general dropped precipitously. (See table below).
SIX-MONTH MARKET OCT 2008 TO APR 2009 TO PERFORMANCE: MAR 2009 SEPT 2009 Treasury Bill 7.3% -1.0% S&P 500 -30.5% 34.0% Small Cap Stocks (Russell 2000) -37.2% 44.0% International Stocks (MSCI EAFE) -31.1% 49.9% Emerging Markets (MSCI EM) -26.9% 62.9% High Yield Bonds (Barclays Corporate HY) -13.0% 40.6% Commodities (DJ UBS) -34.5% 16.4% Hedge Funds (HFRI Fund of Funds Composite) -9.7% 9.4% Private Equity (Red Rocks Global Listed PE) -58.7% 89.7% Real Estate (NAREIT) -55.4% 67.7%
Then, as quickly and sharply as the markets fell, they began to recover in early March. (See second column of figures above). The "flight-to-quality" witnessed over the prior six-months quickly morphed into a "flight-from-quality." The markets did a virtual about-face in March, with risky assets gaining and treasury bills falling. The economy began to evidence signs of stabilization, and eventually, some promising hints of recovery. Through the second half of our fiscal year, ending September, risky assets recovered most of the value they lost in the first half of the period. City National Asset Management, Inc.'s underlying investment philosophy is to pursue the long-term goals and objectives specified for each of the Funds. With an active yet disciplined style, all Funds are managed to achieve competitive rates of return consistent with their respective, prescribed risk parameters. CNI Charter Funds follow a disciplined investment process that begins with a thorough assessment of the macroeconomic environment and the financial markets. Our broad based research process 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. The final step is to construct and continuously monitor precise portfolios that meet the objectives of the specific Funds, without being swayed by short-term trends and fads.This approach continued to serve shareholders well during the extreme gyrations in the markets and unprecedented economic events encountered in the period ended September 30, 2009. CNI CHARTER FUND PERFORMANCE AND HIGHLIGHTS (ALL RETURNS LISTED REFER TO INSTITUTIONAL CLASS SHARES) By adhering to our basic investment discipline and maintaining the appropriate amount of risk control in the various portfolios, the Funds continued to provide returns that are competitive in their respective investment arenas. CNI CHARTER FUNDS | PAGE 2 - -------------------------------------------------------------------------------- Although three of our four equity funds dropped in value for the year ending September 30, 2009, they all showed significant strength in the latter six-months and all performed relatively well against their respective investment benchmarks. Our LARGE CAP VALUE EQUITY FUND lost 10.0% versus a 11.4% loss for its S&P 500/Citigroup Value Index benchmark.The LARGE CAP GROWTH EQUITY FUND lost 3.4% over the twelve-month period, versus a 2.6% loss for its S&P/Citigroup Growth Index benchmark.The RCB SMALL CAP VALUE EQUITY FUND showed the strongest turnaround and relative out-performance by far, gaining 15.2% for the twelve month period despite a 12.6% loss to its Russell 2000 Value Equity Index benchmark. Lastly, the OPPORTUNISTIC VALUE FUND dropped 6.8% in value compared to its Russell 1000 Value Index benchmark loss of 10.6%. The MULTI-ASSET FUND, which was specifically designed to buffer against the harmful effects of a bear market, did just that during this rocky period sporting a 3.5% gain. All four of the CNI Charter Bond Funds showed positive returns for the year ending September 30, 2009.The HIGH YIELD BOND FUND led the pack by gaining 12.9%, with the CORPORATE BOND FUND not far behind (up 12.5%).The GOVERNMENT BOND FUND and CALIFORNIA TAX-EXEMPT BOND FUND returned 5.2% and 8.5%, respectively. Lastly, all three of the CNI Charter Money Market Funds produced steady, consistent, and competitive returns.These returns were in line with their respective investment mandates. Please read the following pages carefully as they contain important information on the assets and financial condition of the Funds. If you have any questions about this report or CNI Charter Funds, please call your investment professional or (888) 889-0799. Thank you for choosing CNI Charter Funds. Sincerely, /s/ Richard A. Weiss -------------------------------------- Richard A.Weiss CHAIRMAN AND 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. AN INVESTMENT IN THE FUNDS IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. NOTWITHSTANDING THE PRECEDING STATEMENTS, UNTIL SEPTEMBER 18, 2009 SHAREHOLDERS OF THE CNI CHARTER PRIME MONEY MARKET FUND AND CALIFORNIA TAX EXEMPT MONEY MARKET FUND WERE GUARANTEED TO RECEIVE $1.00 PER SHARE FOR AMOUNTS THAT THEY HELD AS OF SEPTEMBER 19, 2009 SUBJECT TO THE TERMS OF THE U.S.TREASURY DEPARTMENT'S TEMPORARY GUARANTEE PROGRAM FOR MONEY MARKET FUNDS. - -------------------------------------------------------------------------------- *NOT FDIC INSURED *NO BANK GUARANTEE *MAY LOSE VALUE CNI CHARTER FUNDS | PAGE 3 investment adviser's report SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- EQUITY AND BLENDED FUNDS For the fiscal year ending September 30, 2009, the U.S. equity market, as measured by the S&P 500 Index, returned -6.9%. Market volatility during the past 12 months was historic.The S&P 500 was down 41.2% from the start of the period through March 9, 2009, the current market low. From that point through the end of September, the market gained 58.2%. However, the market is still down about 34% from the October 2007 market high. The start of the fourth quarter of 2008 found investors in the midst of a severe liquidity crisis. Banks were hoarding cash and not lending to one another and the commercial paper market had ground to a halt.A cloud of fear and uncertainty enveloped investors.The government stepped in to protect the banking sector with its $700 billion Troubled Asset Relief Program (TARP) and helped increase investor confidence with economic stimulus packages.As a result, the market rallied about 25% from its late November 2008 lows to early January as investors turned the page hoping for a better year in 2009. As 2009 started, the market remained clearly within the bear's clutches. Fears abounded with respect to U.S. banks and whether government support would dilute the value of common stockholders. Concern also spread overseas with respect to the effect this crisis was having on European banks. Economic indicators continued to flash warning signs as businesses contracted due to this negative environment.And early March brought clear panic as investors sold stocks to salvage whatever value they could from depressed securities.This clearly was a period that shook investor confidence in the American financial system. Late March 2009 started a market rally, although most investors were not aware of it at the time, as is typically the case.The new U.S. administration was planning to assist banks in the removal of toxic assets from their balance sheets as well as assist frozen credit markets.The market rally continued into the summer on the backs of better-than-expected earning numbers.As we ended this fiscal period, most investors were very happy with the big gains off the March lows, but still very cautious regarding the strength and durability of the economic recovery. EQUITY AND BLENDED FUND PERFORMANCE (ALL RETURNS LISTED FOR CNI CHARTER FUNDS REFER TO INSTITUTIONAL CLASS SHARES) o The LARGE CAP VALUE EQUITY FUND fell 10.0% during the 12 months ending September 30, 2009.This performance outperformed the S&P500/Citigroup Value Index return of -11.4%, but trailed the Lipper Large Cap Value Funds Classification return of -7.9%.Although the financial sector as a whole was the worst performing sector last year, Goldman Sachs' share price managed to gain 46%. Goldman was able to avoid many of the major issues plaguing other banks and generated earnings via their trading unit. Goodrich Corp., a leader in aerospace systems, returned 33.9%. Goodrich beat earnings estimates due to cost costs and increased revenue from the defense and space channel. Perkinelmer, a leading provider of analysis tools and medical imaging, fell 21.3% but continued to beat earnings expectations in this economic downturn. Norfolk Southern, the fourth largest U.S. railroad, lost 32.8% due to decreased volumes in rail traffic, particularly in coal shipments. o The LARGE CAP GROWTH EQUITY FUND lost 3.4% during the 12 months ending September 30, 2009.This performance slightly trailed both the S&P500/Citigroup Growth Index return of -2.6% and the Lipper Large Cap Growth Funds Classification return of -2.7%.Apple Inc. was a standout during this time period, gaining 63.1%. CNI CHARTER FUNDS | PAGE 4 - -------------------------------------------------------------------------------- Sales across all three product lines (iPhone, iPod, and Mac) remain strong even in this tough economic environment. Freeport-McMoran, the largest publicly traded copper producer, gained 22.4%, as the company cut costs and positioned the company well in this tough economic period. Energy service provider Smith International lost 50.1%.This was mainly due to the drop in drilling activity as oil prices dropped from a high of $150 per barrel to a low in the mid $30s, ending the period around the $70 mark. Genzyme, the world's largest maker of drugs for genetic disorders, lost 29.9% due to deficiencies in a major manufacturing unit which limited the supply of certain drugs. o The RCB SMALL CAP VALUE EQUITY FUND gained 15.2% during the 12 months ending September 30, 2009.The Fund outperformed both the Russell 2000 Index return of -9.6% and the Lipper Small-Cap Value Funds Classification return of -6.3%. Liberty Media Interactive, a retailing company, was the largest contributor to the funds overall performance.The stock contributed 6.2% to the Fund's performance and was up 226% during the period.The company benefited from alleviated liquidity fears in conjunction with better then expected QVC results. Central Garden & Pet, a lawn care and pet supply company, benefited from the return to normal weather conditions and lower commodity prices which lifted the stock 79% and contributed 5% to the Fund's overall return.Virgin Media, a UK-based entertainment and communications company, was up 76% due to its strong balance sheet and the declining US dollar. Liberty Media Capital, a media holding company, was up 57% due to significant upside potential in its main holding, Sirius XM. White Mountains Insurance Group, a property and casualty insurer, detracted 34% during the period as a result of its weakening reinsurance business in Japan which the company is looking to sell. Exterran Holdings, the largest provider of natural gas compression services in the United States, declined 26% as a result of the prolonged decline in natural gas prices. o The OPPORTUNISTIC VALUE FUND fell 6.8% during the 12 months ending September 30, 2009.This performance significantly outperformed the Russell 1000 Value at -10.6%, the S&P500/ Citigroup Value Index of -11.4%, bested the Lipper Large Cap Value Funds Classification at -7.9% and also outperformed the broad market as defined by the S&P 500, which declined 6.9%. During this "year of two markets", a precipitous decline followed by a swift rally, the top contributors to performance in the portfolio included Mylan, which increased 40% throughout the fiscal year and Del Monte which increased 52%. The top detractors to performance held throughout the year included ConocoPhillips, down 36% and USBancorp, which was down 38%. o The MULTI-ASSET FUND returned 3.5% during the year ending September 30, 2009.This compares favorably to the Lipper Flexible Portfolio Funds Objective return of 1.0% for the same period.The Fund returns were positively affected by an increasing exposure to the U.S. equity market during the year. Investments made during the year in international equities, global REITs and high yield bonds also boosted Fund returns.As a result of investments made during the year, the Fund ended the fiscal year with a reduced cash position. (CONTINUES) CNI CHARTER FUNDS | PAGE 5 investment adviser's report SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- As we look forward from here, most economists expect the economy to start generating positive real economic growth in the final quarter of 2009 and on into 2010. Consumer sentiment remains in question as job losses are expected to continue rising into 2010, albeit at a slower pace. Balance sheets in certain segments of the economy still need to be adjusted.The Dollar continues to weaken, which should make U.S. goods more attractive for foreign purchasers. Inflation, which appears muted given the recessionary environment, could become an issue sooner rather than later. Short-term interest rates should remain low as the Federal Reserve is not anticipated to raise rates until the economy is clearly in recovery mode. Given all the facts above, the bottom line is that the economic landscape is improving and investors continue to find that encouraging.As always, we will continue to apply our disciplined investment approach with the objective of providing superior investment results across the various strategies we manage. Sincerely, /s/ Brian L. Garbe - ------------------------------------ Brian L. Garbe DIRECTOR OF RESEARCH AND TRADING CITY NATIONAL ASSET MANAGEMENT,INC. THIS MATERIAL REPRESENTS THE MANAGER'S ASSESSMENT OF THE PORTFOLIO AND MARKET ENVIRONMENT AT A SPECIFIC POINT IN TIME AND SHOULD NOT BE RELIED UPON BY THE READER AS RESEARCH OR INVESTMENT ADVICE. CNI CHARTER FUNDS | PAGE 6 fund overview SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- LARGE CAP VALUE EQUITY FUND The Fund seeks to provide capital appreciation and moderate income consistent with current returns available in the marketplace by investing in large U.S. corporations which are undervalued and whose market valuations compare favorably relative to similar companies. - -------------------------------------------------------------------------------- Comparison of Change in the Value of a $10,000 Investment in the CNI Large Cap Value Equity Fund, Institutional Class or Class N Shares, versus the S&P 500/ Citigroup Value Index, and the Lipper Large Cap Value Funds Classification [LINE GRAPH]
Initial Investment Date 1/14/00 SEP 00 SEP 01 SEP 02 SEP 03 SEP 04 SEP 05 SEP 06 SEP 07 SEP 08 SEP 09 ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- CNI Large Cap Value Fund, Institutional $10,000 $10,099 $8,447 $6,852 $8,499 $10,148 $11,608 $13,291 $15,365 $12,051 $10,842 CNI Large Cap Value Fund, Class N $10,000 $10,094 $8,410 $6,814 $8,433 $10,036 $11,455 $13,087 $15,081 $11,806 $10,593 S&P 500/Citigroup Value Index $10,000 $ 9,871 $8,508 $6,989 $8,579 $10,271 $11,951 $13,796 $16,018 $12,093 $10,711 Lipper Large Cap Value Funds Classification $10,000 $10,417 $9,627 $7,920 $9,680 $11,333 $12,943 $14,543 $16,668 $12,748 $11,738
- ---------- (1) The performance in the above graph does not reflect the deduction of taxes the shareholder will pay on Fund distributions or the redemptions of Fund shares. Investment performance reflects fee waivers in effect. In the absence of such waivers, total return would be reduced. Past performance is no indication of future performance. The Fund's comparative benchmarks do not include the annual operating expenses incurred by the Fund. Please note that one cannot invest directly in an unmanaged index. AVERAGE ANNUAL TOTAL RETURNS
Ticker 1-Year 3-Year 5-Year Inception Shares Symbol Return Return Return to Date - -------------------------------------------------------------------------------- Institutional Class (1)# CNLIX -10.03% -6.56% 1.33% 0.84% - -------------------------------------------------------------------------------- Class N (2)+ CVEAX -10.27% -6.80% 1.09% 0.60% - --------------------------------------------------------------------------------
- ---------- (1) Commenced operations on January 14, 2000. (2) Commenced operations on April 13, 2000. # The Fund's Institutional Class Shares are currently offered only to accounts for which City National Bank serves as trustee or in a fiduciary capacity. + Class N Shares' performance for the period prior to April 13, 2000 reflects the performance of the Fund's Institutional Class Shares.The performance of the Institutional Class Shares has not been adjusted to reflect the higher Rule 12b-1 Fees and expenses applicable to Class N Shares. If it had, performance would have been lower than that shown. Top Ten Holdings
% OF PORTFOLIO JPMorgan Chase 4.0 AT&T 3.8 Wells Fargo 3.0 Verizon Communications 2.5 Goldman Sachs Group 2.3 Hewlett-Packard 1.9 Pfizer 1.9 Procter & Gamble 1.8 Wal-Mart Stores 1.7 Occidental Petroleum 1.7
CNI CHARTER FUNDS | PAGE 7 fund overview SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- LARGE CAP GROWTH EQUITY FUND The Fund seeks to provide capital appreciation by investing in large U.S. corporations and with the potential for growth and that possess superior management, strong market position, consistent records of increased earnings and a strong operating and financial position. - -------------------------------------------------------------------------------- Comparison of Change in the Value of a $10,000 Investment in the CNI Large Cap Growth Equity Fund, Institutional Class or Class N Shares, versus the S&P 500/ Citigroup Growth Index, and the Lipper Large Cap Growth Funds Classification (LINE GRAPH)
Initial Investment Date 1/14/00 SEP 00 SEP 01 SEP 02 SEP 03 SEP 04 SEP 05 SEP 06 SEP 07 SEP 08 SEP 09 ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- CNI Large Cap Growth Fund, Institutional $10,000 $9,370 $6,360 $5,250 $6,379 $6,774 $7,489 $7,833 $9,001 $7,525 $7,272 CNI Large Cap Growth Fund, Class N $10,000 $9,350 $6,330 $5,210 $6,320 $6,691 $7,379 $7,714 $8,833 $7,371 $7,093 S&P 500/Citigroup Growth Index $10,000 $9,764 $5,950 $4,538 $5,717 $6,202 $6,709 $7,138 $8,336 $6,715 $6,539 Lipper Large Cap Growth Funds Classification $10,000 $10,356 $6,316 $5,059 $6,122 $6,647 $7,551 $7,853 $9,500 $7,369 $7,169
- ---------- (1) The performance in the above graph does not reflect the deduction of taxes the shareholder will pay on Fund distributions or the redemptions of Fund shares. Investment performance reflects fee waivers in effect. In the absence of such waivers, total return would be reduced. Past performance is no indication of future performance. The Fund's comparative benchmarks do not include the annual operating expenses incurred by the Fund. Please note that one cannot invest directly in an unmanaged index. AVERAGE ANNUAL TOTAL RETURNS
Ticker 1-Year 3-Year 5-Year Inception Shares Symbol Return Return Return to Date - -------------------------------------------------------------------------------- Institutional Class (1)# CNGIX -3.36% -2.45% 1.43% -3.23% - -------------------------------------------------------------------------------- Class N (2)+ CLEAX -3.77% -2.76% 1.17% -3.47% - --------------------------------------------------------------------------------
- ---------- (1) Commenced operations on January 14, 2000. (2) Commenced operations on March 28, 2000. # The Fund's Institutional Class Shares are currently offered only to accounts for which City National Bank serves as trustee or in a fiduciary capacity. + Class N Shares' performance for the period prior to March 28, 2000 reflects the performance of the Fund's Institutional Class Shares.The performance of the Institutional Class Shares has not been adjusted to reflect the higher Rule 12b-1 Fees and expenses applicable to Class N Shares. If it had, performance would have been lower than that shown. Top Ten Holdings
% OF PORTFOLIO Exxon Mobil 5.9 Microsoft 4.3 Google, Cl A 3.5 Chevron 3.4 IBM 3.3 Qualcomm 3.1 Johnson & Johnson 2.7 Oracle 2.4 Wal-Mart Stores 2.4 Procter & Gamble 2.4
CNI CHARTER FUNDS | PAGE 8 fund overview SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- RCB SMALL CAP VALUE FUND The Fund seeks to provide capital appreciation by investing primarily in smaller U.S. corporations which are considered undervalued. - -------------------------------------------------------------------------------- Comparison of Change in the Value of a $10,000 Investment in the CNI RCB Small Cap Value Fund, Institutional Class, Class N or Class R Shares, versus the Russell 2500 Value Index, the Russell 2000 Index, the Russell 2000 Value Index, the Lipper Small Cap Value Funds Classification, and the Lipper Small Cap Core Funds Classification(1) [LINE GRAPH]
Initial Investment Date 9/30/99 SEP 00 SEP 01 SEP 02 SEP 03 SEP 04 SEP 05 SEP 06 SEP 07 SEP 08 SEP 09 ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- CNI RCB Small Cap Value Fund, Synthetic Institutional $10,000 $11,150 $12,166 $10,815 $15,742 $19,672 $21,613 $21,700 $24,012 $15,606 $17,978 CNI RCB Small Cap Value Fund, Synthetic Class N $10,000 $11,150 $12,166 $10,801 $15,685 $19,550 $21,416 $21,453 $23,678 $15,352 $17,641 CNI RCB Small Cap Value Fund, Class R $ 9,650 $10,759 $11,740 $10,409 $15,115 $18,838 $20,639 $20,669 $22,824 $14,832 $17,131 Russell 2500 Value Index $10,000 $11,574 $11,866 $11,792 $15,477 $19,278 $23,387 $25,991 $28,274 $23,809 $21,826 Russell 2000 Index $10,000 $12,339 $ 9,722 $ 8,818 $12,036 $14,296 $16,862 $18,535 $20,823 $17,807 $16,107 Russell 2000 Value Index $10,000 $11,536 $12,183 $12,004 $15,805 $19,861 $23,387 $26,663 $28,285 $24,820 $21,691 Lipper Small Cap Value Funds Classification $10,000 $11,761 $12,159 $12,015 $15,639 $19,412 $23,062 $25,073 $27,640 $23,080 $21,630
- ---------- (1) The performance in the above graph does not reflect the deduction of taxes the shareholder will pay on Fund distributions or the redemptions of Fund shares. Investment performance reflects fee waivers in effect. In the absence of such waivers, total return would be reduced. Past performance is no indication of future performance. The Fund's comparative benchmarks do not include the annual operating expenses incurred by the Fund. Please note that one cannot invest directly in an unmanaged index. AVERAGE ANNUAL TOTAL RETURNS
Ticker 1-Year 3-Year 5-Year 10-Year Inception Shares Symbol Return Return Return Return to Date - ------------------------------------------------------------------------------------- Institutional Class (1)#+ RCBIX 15.20% -6.08% -1.78% 6.04% 9.52% - ------------------------------------------------------------------------------------- Class N (1)+ RCBAX 14.91% -6.31% -2.03% 5.84% 9.33% - ------------------------------------------------------------------------------------- Class R (2) RCBSX 15.50% -6.07% -1.88% 5.91% 9.39% - ------------------------------------------------------------------------------------- Class R with load RCBSX 11.43% -7.17% -2.58% 5.53% 9.04% - -------------------------------------------------------------------------------------
- ---------- (1) Commenced operations on October 3, 2001. (2) Commenced operations on September 30, 1998. # The Fund's Institutional Class Shares are currently offered only to accounts for which City National Bank serves as trustee or in a fiduciary capacity. + The performance of the Institutional Class and Class N Shares for the period prior to October 3, 2001 reflect the performance of the Class R Shares of a predecessor mutual fund.The performance of the predecessor fund's Class R Shares has not been adjusted to reflect the expenses applicable to Institutional and Class N Shares. Fees for the Institutional Class Shares are lower than the fees for the predecessor fund's Class R Shares; correspondingly, Institutional Class performance would have been higher than that shown. Top Ten Holdings*
% OF PORTFOLIO White Mountains Insurance Group 5.3 Liberty Media - Interactive, Ser A 4.4 Washington Post, Cl B 4.4 Liberty Media - Capital, Ser A 4.3 Alleghany 4.3 Nalco Holding 4.2 Actuant, Cl A 4.2 Central Garden & Pet, Cl A 4.2 Chimera Investment 4.1 Wendy's/Arby's Group, Cl A 4.1
- ---------- * Excludes Cash Equivalents CNI CHARTER FUNDS | PAGE 9 fund overview SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- OPPORTUNISTIC VALUE FUND The Fund seeks to achieve long-term capital appreciation by investing in a diversified portfolio of equity securities which are undervalued. - -------------------------------------------------------------------------------- Comparison of Change in the Value of a $10,000 Investment in the CNI Opportunistic Value Fund, Institutional Class, Class E, or Class N Shares, versus the Russell 1000 Value Index, the S&P 500 Index, and the Lipper Multi-Cap Value Funds Classification(1) (LINE GRAPH)
Initial Investment Date 3/31/04 SEP 04 SEP 05 SEP 06 SEP 07 SEP 08 SEP 09 ------- ------- ------ ------- ------- ------- ------- CNI Opportunistic Value Fund, Institutional $10,000 $10,000 $11,873 $12,879 $14,382 $11,860 $11,052 CNI Opportunistic Value Fund, Class E $10,000 $10,026 $11,933 $12,964 $14,523 $11,985 $11,078 CNI Opportunistic Value Fund, Class N $10,000 $ 9,987 $11,841 $12,799 $14,262 $11,740 $10,905 Russell 1000 Value Index $10,000 $10,244 $11,953 $13,701 $15,680 $11,986 $10,714 S&P 500 Index $10,000 $ 9,982 $11,205 $12,414 $14,454 $11,278 $10,499 Lipper Multi-Cap Value Funds Classification $10,000 $10,071 $11,661 $12,944 $14,717 $11,070 $10,527
- ---------- (1) The performance in the above graph does not reflect the deduction of taxes the shareholder will pay on Fund distributions or the redemptions of Fund shares. Investment performance reflects fee waivers in effect. In the absence of such waivers, total return would be reduced. Past performance is no indication of future performance. The Fund's comparative benchmarks do not include the annual operating expenses incurred by the Fund. Please note that one cannot invest directly in an unmanaged index. AVERAGE ANNUAL TOTAL RETURNS
Ticker 1-Year 3-Year 5-Year Inception Shares Symbol Return Return Return to Date - ----------------------------------------------------------------------------- Institutional Class (1)#+ OPVIX -6.81% -4.97% 2.02% 1.84% - ----------------------------------------------------------------------------- Class E (1)+ OPVEX -7.57% -5.11% 2.02% 1.88% - ----------------------------------------------------------------------------- Class N (1)+ OPVNX -7.12% -5.20% 1.77% 1.59% - -----------------------------------------------------------------------------
- ---------- (1) Commenced operations on June 26, 2008. # The Fund's Institutional Class Shares are currently offered only to accounts for which City National Bank serves as trustee or in a fiduciary capacity. + For periods prior to June 26, 2008 the performance data quoted above represents past performance of an institutional account that converted into Class N shares of the Fund (the "Predecessor Account"), adjusted to reflect fees and expenses borne by the Fund.The Predecessor Account was not a registered mutual fund so it was not subject to the same investment and tax restrictions as the Fund. If it had been, the Predecessor Account's performance may have been lower. Top Ten Holdings*
% OF PORTFOLIO Tyco International 3.4 US Bancorp 3.4 HCC Insurance Holdings 3.4 Symantec 3.1 Brookfield Asset Management, CL A 3.0 Unit 3.0 Covidien 2.9 Quest Diagnostics 2.9 Del Monte Foods 2.9 Chubb 2.7
- ---------- * Excludes Cash Equivalents CNI CHARTER FUNDS | PAGE 10 fund overview SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- MULTI-ASSET FUND The Fund seeks to generate a positive total return in excess of inflation in a manner consistent with capital preservation in all market environments. - -------------------------------------------------------------------------------- Comparison of Change in the Value of a $10,000 Investment in the CNI Multi-Asset Fund, Institutional Class or Class N Shares, versus the Barclays U.S. TIPS Index; a 60/40 hybrid of the S&P 500 Index and the Barclays Intermediate U.S. Government/Credit Index; and a CPI +500 Basis Points benchmark; and the Lipper Flexible Portfolio Funds Classification. (LINE GRAPH)
Initial Investment Date 10/1/07 SEP 08 SEP 09 ------- ------- ------- CNI Multi-Asset Fund, Institutional $10,000 $ 9,016 $ 9,335 CNI Multi-Asset Fund, Class N $10,000 $ 8,988 $ 9,284 60/40 Hybrid of the following two indexes: $10,000 $ 8,685 $ 8,727 S&P 500 Index $10,000 $ 7,700 $ 7,168 Barclays Intermediate US Government/Credit Index $10,000 $10,314 $11,346 Barclays US TIPS Index $10,000 $10,620 $11,221 CPI + Annualized 500 basis points $10,000 $11,016 $11,419 Lipper Flexible Portfolio Funds Classification $10,000 $ 8,747 $ 9,009
- ---------- (1) The performance in the above graph does not reflect the deduction of taxes the shareholder will pay on Fund distributions or the redemptions of Fund shares. Investment performance reflects fee waivers in effect. In the absence of such waivers, total return would be reduced. Past performance is no indication of future performance. The Fund's comparative benchmarks do not include the annual operating expenses incurred by the Fund. Please note that one cannot invest directly in an unmanaged index. AVERAGE ANNUAL TOTAL RETURNS
Annualized Ticker 1-Year Inception Shares Symbol Return to Date - --------------------------------------------------------------------------- Institutional Class (1)# CNLIX 3.54% -3.39% - --------------------------------------------------------------------------- Class N (1) CVEAX 3.29% -3.65% - ---------------------------------------------------------------------------
- ---------- (1) Commenced operations on October 1, 2007. # The Fund's Institutional Class Shares are currently offered only to accounts for which City National Bank serves as trustee or in a fiduciary capacity. Top Ten Holdings*
% OF PORTFOLIO SPDR S&P 500 Fund 27.4 iShares Barclays 1-3 Year Credit Bond Fund 8.6 CNI Corporate Bond Fund, Institutional Class 8.5 CNI Government Bond Fund, Institutional Class 6.7 Vanguard Emerging Markets 5.6 iShares MSCI EAFE Index Fund 5.2 iShares S&P MidCap 400 Index Fund 4.9 Cohen & Steers International Realty Fund, Inc. 4.3 Alpine International Real Estate Equity Fund 3.6 FHLB 0.500%, 11/05/09 3.0
- ---------- * Excludes Cash Equivalents CNI CHARTER FUNDS | PAGE 11 investment adviser's report SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- FIXED INCOME FUNDS As the Funds' fiscal year ended, bond investors were weighing a number of seemingly contradictory signs. On one hand, there are historically low yields in short-term U.S.Treasuries due to a weak economy and accommodative monetary policy. Yet, paradoxically, prices of riskier securities such as investment-grade corporate bonds and high-yield debt skyrocketed in the first nine months of 2009 (up 17% and 50%, respectively). Meanwhile,Treasuries are down -2.3% for the same period. The outsized returns of lower grade bonds would not be unusual in a pronounced economic recovery, but they are surprising given today's tentative economic fundamentals and constricted lending standards. It's a bit unnerving to realize that corporate yields spreads over Treasuries are narrower than they were in the spring of 2008 as the financial meltdown began with the collapse of Bear Stearns. As of this writing, municipal bond investors also face conflicting signals. Most cities, counties and states are experiencing the worst budgetary crises of a generation as tax receipts continue to decline due to sharp revenue shortfalls. However, absolute and relative yields (municipal yields versus yields on Treasuries) are at or below historic lows, signaling a significantly more bullish environment ahead. Leaving fundamentals aside for the moment, demand for tax-exempt bonds has far outstripped supply, pushing the absolute yield levels for municipal bonds past 40-year lows. It appears that technical market conditions are outweighing credit fundamentals once again.We expect municipals to return to their longer trend valuations by giving back some of the over-appreciation. The budget woes of California and other states may have disappeared from the front pages, but California's financial problems have not gone away. Politicians have simply postponed the structural budget issues while revenue shortfalls continue to mount. It's important to note, however, that debt servicing of California's General Obligation debt ranks second in priority payments and, in our view, remains a generally suitable investment -- even with BBB average ratings and changing valuations. During the fiscal year, City National Asset Management, Inc. focused on two main themes -- keeping a close eye on risk management and increasing our credit exposure.As the credit crisis thawed in early 2009, we reduced our exposure to treasury/government related securities in favor of higher quality corporate or municipal bonds. Risks remain in the economy so we did not materially increase our exposure to lower investment grade issues (BBB) in our California or Corporate Bond Funds.This stance, while keeping with the objectives of those funds, captured most of the strong returns witnessed in the bond market this year. With the Fed on hold for the foreseeable future, we will keep our maturity positioning near current levels. BOND FUND PERFORMANCE (ALL RETURNS LISTED FOR CNI CHARTER FUNDS REFER TO INSTITUTIONAL CLASS SHARES) o The CORPORATE BOND FUND produced a total return of 12.5% for the last 12 months. For the same period, the Barclays Intermediate U.S. Corporate Index returned 19.2%.The Corporate Bond Fund maintained a cautious stance in the face of elevated unemployment and uncertain economic conditions. Our underweight in lower quality (BBB) issues led to a lower than benchmark return. However, opportunistic trades in finance issuers resulted in stronger performance versus peer funds; where the Lipper Short Intermediate Investment Grade Objective was up 10.3%. o The GOVERNMENT BOND FUND produced a total return 5.2% for the last 12 months. For the same period, the Barclays Intermediate U.S. Government Bond Index returned 6.3%.The fund trailed the benchmark due to our underweight in maturity and agency Mortgage Backed Securities.We maintain our slightly shorter maturity stance versus the benchmarks in CNI CHARTER FUNDS | PAGE 12 - -------------------------------------------------------------------------------- order to keep liquidity higher than normal for our shareholder activities.The fund also trailed its peer group during this period as evidenced by the Lipper Short Intermediate U.S. Government Objective return of 6.5%. o The CALIFORNIA TAX EXEMPT BOND FUND produced a total return of 8.5% for the last 12 months. For the same period, the Barclays CA Intermediate-Short Municipal Index returned 9.1%.The past fiscal year returns were above historical averages as municipals migrated back to the norm after the credit crisis.Absolute performance was strong --but lagged behind the Barclay's index primarily because the Fund had a far smaller concentrated position in California State General Obligation issues.The Fund fared better against its peer group where the Lipper CA Short/Intermediate Municipal Debt Objective returned 7.0% because it had less exposure to lower quality issues by design due to this uncertain economic time. o The HIGH YIELD BOND FUND produced a total return of 12.9% for the last 12 months. For the same period, the Citigroup High-Yield Market Index returned 21.0%.The Fund's focus on BB rated issuers over CCC or defaulted issues resulted in lower returns than the benchmark, as increased risk appetite was handsomely rewarded during this period.The Fund's relative performance vis-a-vis its peer group remained competitive where the Lipper High Current Yield Bond Funds Objective returned 13.1%. STRATEGIC OUTLOOK FOR BOND FUNDS The dominant theme through September 2009 was that investors significantly increased their appetite for risk which drove up bond valuations most for lower quality issues.This can easily reverse itself if the economy takes another dip.Therefore, risk management remains paramount as we examine corporate bond valuations in a choppy economy and credit environment. For our Corporate Bond Fund, we have reduced our overweight in financial corporate bonds by moving some of our exposure to shorter maturity issues and taking other measures that should enable us to protect corporate valuations if credit spreads erode. In our California Tax Exempt Bond Fund, we are moving to increase yield by selectively adding cushion callable bonds (bonds that have an attractive yield to either the call or maturity, along with a higher coupon to protect against extension risk).We are also keeping a tight band on the call/maturity range to better control interest rate risk in the future. We are keeping a close eye on the economy and indicators like consumer spending and employment. Once the economic expansion gains better traction, we will look to incorporate TIPs and international securities where appropriate to hedge against the risk of rising rates and currency devaluations. Sincerely, /s/ Rodney J. Olea - ------------------------------------- Rodney J. Olea DIRECTOR OF FIXED INCOME CITY NATIONAL ASSET MANAGEMENT, INC. THIS MATERIAL REPRESENTS THE MANAGER'S ASSESSMENT OF THE PORTFOLIO AND MARKET ENVIRONMENT AT A SPECIFIC POINT IN TIME AND SHOULD NOT BE RELIED UPON BY THE READER AS RESEARCH OR INVESTMENT ADVICE. CNI CHARTER FUNDS | PAGE 13 fund overview SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- CORPORATE BOND FUND The Fund seeks to provide current income (as the primary component of a total return, intermediate duration strategy) by investing in a diversified portfolio of investment grade fixed income securities, primarily corporate bonds issued by domestic and international companies denominated in U.S. dollars. - -------------------------------------------------------------------------------- Comparison of Change in the Value of a $10,000 Investment in the CNI Corporate Bond Fund, Institutional Class or Class N Shares, versus the Barclays Intermediate U.S. Corporate Index, and the Lipper Short/Intermediate Investment Grade Debt Objective(1) (LINE GRAPH)
Initial Investment Date 1/14/00 SEP 00 SEP 01 SEP 02 SEP 03 SEP 04 SEP 05 SEP 06 SEP 07 SEP 08 SEP 09 ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- CNI Corporate Bond Fund, Institutional $10,000 $10,576 $11,860 $12,578 $13,425 $13,714 $13,887 $14,330 $14,984 $14,990 $16,861 CNI Corporate Bond Fund, Class N $10,000 $10,593 $11,872 $12,548 $13,359 $13,625 $13,749 $14,151 $14,760 $14,744 $16,541 Barclays Intermediate US Corporate Index $10,000 $10,645 $11,993 $12,853 $14,130 $14,687 $14,944 $15,478 $16,161 $15,311 $18,250 Lipper Short/Inter- mediate Investment Grade Debt Objective $10,000 $10,561 $11,727 $12,372 $12,980 $13,253 $13,432 $13,855 $14,452 $14,361 $15,843
- ---------- (1) The performance in the above graph does not reflect the deduction of taxes the shareholder will pay on Fund distributions or the redemptions of Fund shares. Investment performance reflects fee waivers in effect. In the absence of such waivers, total return would be reduced. Past performance is no indication of future performance. The Fund's comparative benchmarks do not include the annual operating expenses incurred by the Fund. Please note that one cannot invest directly in an unmanaged index. AVERAGE ANNUAL TOTAL RETURNS
Ticker 1-Year 3-Year 5-Year Inception Shares Symbol Return Return Return to Date - -------------------------------------------------------------------------------------- Institutional Class (1)# CNCIX 12.48% 5.57% 4.22% 5.53% - -------------------------------------------------------------------------------------- Class N (2)+ CCBAX 12.19% 5.34% 3.96% 5.32% - --------------------------------------------------------------------------------------
- ---------- (1) Commenced operations on January 14, 2000. (2) Commenced operations on April 13, 2000. # The Fund's Institutional Class Shares are currently offered only to accounts for which City National Bank serves as trustee or in a fiduciary capacity. + Class N Shares' performance for the period prior to April 13, 2000 reflects the performance of the Fund's Institutional Class Shares.The performance of the Institutional Class Shares has not been adjusted to reflect the higher Rule 12b-1 fees and expenses applicable to Class N Shares. If it had, performance would have been lower than that shown. Top Ten Holdings*
% OF PORTFOLIO General Electric Capital, FDIC Insured 2.200%, 06/08/12 3.2 Citigroup Funding 2.250%, 12/10/12 2.8 JPMorgan Chase 2.125%, 12/26/12 2.8 GMAC 2.200%, 12/19/12 2.8 General Electric Capital 6.000%, 06/15/12 2.6 Wyeth 6.950%, 03/15/11 2.6 Wells Fargo, FDIC Insured 3.000%, 12/09/11 2.5 Microsoft 4.200%, 06/01/19 2.3 Merrill Lynch 6.050%, 05/16/16 2.3 International Business Machines 7.625%, 10/15/18 2.1
- ---------- * Excludes Cash Equivalents CNI CHARTER FUNDS | PAGE 14 fund overview SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- GOVERNMENT BOND FUND The Fund seeks to provide current income (as the primary component of a total return, intermediate duration strategy) by investing primarily in U.S. government securities either issued or guaranteed by the U.S. government or its agencies or instrumentalities. - -------------------------------------------------------------------------------- Comparison of Change in the Value of a $10,000 Investment in the CNI Government Bond Fund, Institutional Class or Class N Shares, versus the Barclays Intermediate U.S. Government Bond Index, and the Lipper Short/Intermediate U.S. Government Objective(1) (LINE GRAPH)
Initial Investment Date 1/14/00 SEP 00 SEP 01 SEP 02 SEP 03 SEP 04 SEP 05 SEP 06 SEP 07 SEP 08 SEP 09 ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- CNI Government Bond Fund, Institutional $10,000 $10,564 $11,796 $12,685 $13,025 $13,130 $13,317 $13,702 $14,392 $15,093 $15,875 CNI Government Bond Fund, Class N $10,000 $10,534 $11,720 $12,596 $12,937 $13,008 $13,159 $13,505 $14,149 $14,799 $15,525 Barclays Intermediate US Government Bond Index $10,000 $10,659 $12,031 $13,046 $13,501 $13,758 $13,938 $14,431 $15,279 $16,428 $17,456 Lipper Short/Inter mediate US Government Bond Objective $10,000 $10,535 $11,679 $12,446 $12,759 $12,900 $13,016 $13,424 $14,034 $14,720 $15,677
- ---------- (1) The performance in the above graph does not reflect the deduction of taxes the shareholder will pay on Fund distributions or the redemptions of Fund shares. Investment performance reflects fee waivers in effect. In the absence of such waivers, total return would be reduced. Past performance is no indication of future performance. The Fund's comparative benchmarks do not include the annual operating expenses incurred by the Fund. Please note that one cannot invest directly in an unmanaged index. AVERAGE ANNUAL TOTAL RETURNS
Ticker 1-Year 3-Year 5-Year Inception Shares Symbol Return Return Return to Date - -------------------------------------------------------------------------------------- Institutional Class (1)# CNBIX 5.18% 5.03% 3.87% 4.87% - -------------------------------------------------------------------------------------- Class N (2)+ CGBAX 4.91% 4.76% 3.60% 4.63% - --------------------------------------------------------------------------------------
- ---------- (1) Commenced operations on January 14, 2000. (2) Commenced operations on April 13, 2000. # The Fund's Institutional Class Shares are currently offered only to accounts for which City National Bank serves as trustee or in a fiduciary capacity. + Class N Shares' performance for the period prior to April 13, 2000 reflects the performance of the Fund's Institutional Class Shares.The performance of the Institutional Class Shares has not been adjusted to reflect the higher Rule 12b-1 Fees and expenses applicable to Class N Shares. If it had, performance would have been lower than that shown. Top Ten Holdings*
% OF PORTFOLIO FHLB 2.250%, 04/13/12 9.5 FHLB 3.625%, 10/18/13 8.4 FNMA 3.000%, 07/28/14 8.1 FHLMC 2.000%, 12/22/11 8.0 FNMA 2.900%, 04/07/14 7.6 FNMA 6.250%, 02/01/11 7.1 FNMA, Ser 2005-25, Cl VH 5.000%, 04/25/16 6.2 FHLB 5.250%, 06/18/14 6.0 FHLMC REMIC, Ser R016, Cl AM 5.125%, 06/15/18 4.7 FHLMC REMIC, Ser R010, Cl AB 5.500%, 12/15/19 4.5
- ------------------ * Excludes Cash Equivalents CNI CHARTER FUNDS | PAGE 15 fund overview SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT BOND FUND The Fund seeks to provide current income exempt from Federal and California state income tax (as the primary component of a total return strategy) by investing primarily in investment grade California municipal bonds and notes. - -------------------------------------------------------------------------------- Comparison of Change in the Value of a $10,000 Investment in the CNI California Tax Exempt Bond Fund, Institutional Class or Class N Shares, versus the Barclays CA Intermediate-Short Municipal Index, and the Lipper CA Short/Intermediate Municipal Debt Objective(1) (LINE GRAPH)
Initial Investment Date 1/14/00 SEP 00 SEP 01 SEP 02 SEP 03 SEP 04 SEP 05 SEP 06 SEP 07 SEP 08 SEP 09 ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- CNI California Tax-Exempt Bond Fund, Institutional $10,000 $10,543 $11,303 $12,160 $12,480 $12,730 $12,940 $13,351 $13,749 $13,938 $15,116 CNI California Tax-Exempt Bond Fund, Class N $10,000 $10,532 $11,277 $12,112 $12,399 $12,627 $12,803 $13,163 $13,534 $13,685 $14,800 Barclays CA Inter mediate-Short Municipal Index $10,000 $10,545 $11,403 $12,272 $12,633 $13,000 $13,250 $13,677 $14,185 $14,690 $16,020 Lipper CA Short/Inter mediate Municipal Objective $10,000 $10,449 $11,132 $11,810 $12,051 $12,253 $12,667 $13,070 $13,406 $13,424 $14,359
- ---------- (1) The performance in the above graph does not reflect the deduction of taxes the shareholder will pay on Fund distributions or the redemptions of Fund shares. Investment performance reflects fee waivers in effect. In the absence of such waivers, total return would be reduced. Past performance is no indication of future performance. The Fund's comparative benchmarks do not include the annual operating expenses incurred by the Fund. Please note that one cannot invest directly in an unmanaged index. AVERAGE ANNUAL TOTAL RETURNS
Ticker 1-Year 3-Year 5-Year Inception Shares Symbol Return Return Return to Date - -------------------------------------------------------------------------------------- Institutional Class (1)# CNTIX 8.45% 4.22% 3.50% 4.35% - -------------------------------------------------------------------------------------- Class N (2)+ CCTEX 8.15% 3.99% 3.23% 4.12%
- ---------- (1) Commenced operations on January 14, 2000. (2) Commenced operations on April 13, 2000. # The Fund's Institutional Class Shares are currently offered only to accounts for which City National Bank serves as trustee or in a fiduciary capacity. + Class N Shares' performance for the period prior to April 13, 2000 reflects the performance of the Fund's Institutional Class Shares.The performance of the Institutional Class Shares has not been adjusted to reflect the higher Rule 12b-1 Fees and expenses applicable to Class N Shares. If it had, performance would have been lower than that shown.
Top Ten Holdings* % OF PORTFOLIO Golden State, Tobacco Settlement, Ser B, RB Pre-Refunded @ 100 5.500%, 06/01/13 2.8 Orange County, Public Financing Authority, RB, NATL-RE 5.000%, 07/01/17 2.7 Golden State, Tobacco Settlement, Ser A-1, RB Pre-Refunded @ 100 6.750%, 06/01/13 2.5 San Francisco (City & County), Public Utilities Commission, Ser B, RB 5.000%, 11/01/19 2.2 Los Angeles, Wastewater Systems Authority, Ser A, RB 5.000%, 06/01/14 2.1 Gilroy, Unified School District, GO, NATL-RE FGIC Callable 08/01/13 @ 100 5.250%, 08/01/19 2.1 Sacramento, Municipal Utility District Ser T, RB, NATL-RE FGIC Callable 05/15/14 @ 100 5.250%, 5/15/22 2.1 San Diego, Public Facilities Financing Authority Ser B, RB 5.000%, 05/15/14 2.1 California State, Department of Water Resources Power Supply Project, Ser H, RB, FSA Callable 05/01/18 @ 100 5.000%, 05/01/21 2.1 Arizona State, School Facilities Board, Ser C, COP, FSA Callable 09/01/14 @ 100 5.000%, 09/01/15 2.1
- ---------- * Excluding Cash Equivalents CNI CHARTER FUNDS | PAGE 16 fund overview SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- HIGH YIELD BOND FUND The Fund seeks to maximize total return by investing primarily in fixed income securities rated below investment grade including corporate bonds and debentures, convertible and preferred securities, and zero coupon obligations. The Fund may also invest in fixed income securities rated below investment grade issued by governments and agencies, both U.S. and foreign, and in equity securities. The Fund seeks to invest in securities that offer a high current yield as well as total return potential and diversifies across issuers, industries and sectors to control risks. - -------------------------------------------------------------------------------- Comparison of Change in the Value of a $10,000 Investment in the CNI High Yield Bond Fund, Institutional Class or Class N Shares, versus the Citigroup High Yield Market Capped Index and the Lipper High Current Yield Bond Funds Objective(1) (LINE GRAPH)
Initial Investment Date 1/14/00 SEP 00 SEP 01 SEP 02 SEP 03 SEP 04 SEP 05 SEP 06 SEP 07 SEP 08 SEP 09 ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- CNI High Yield Bond Fund, Institutional $10,000 $10,421 $10,165 $10,654 $12,757 $14,349 $15,044 $16,082 $17,251 $15,556 $17,569 CNI High Yield Bond Fund, Class N $10,000 $10,394 $10,109 $10,563 $12,611 $14,142 $14,784 $15,756 $16,852 $15,150 $17,060 Citigroup High Yield Market Capped Index $10,000 $ 9,973 $ 9,372 $ 9,458 $12,390 $13,914 $14,792 $15,793 $16,985 $15,533 $17,685 Citigroup High Yield Market Index $10,000 $ 9,973 $ 9,372 $ 9,058 $12,072 $13,588 $14,470 $15,569 $16,761 $14,807 $17,922 Lipper High Current Yield Objective $10,000 $ 9,921 $ 9,114 $ 8,945 $11,282 $12,571 $13,380 $14,301 $15,360 $13,758 $15,562
- ---------- (1) The performance in the above graph does not reflect the deduction of taxes the shareholder will pay on Fund distributions or the redemptions of Fund shares. Investment performance reflects fee waivers in effect. In the absence of such waivers, total return would be reduced. Past performance is no indication of future performance. The Fund's comparative benchmarks do not include the annual operating expenses incurred by the Fund. Please note that one cannot invest directly in an unmanaged index. AVERAGE ANNUAL TOTAL RETURNS
Ticker 1-Year 3-Year 5-Year Inception Shares Symbol Return Return Return to Date - -------------------------------------------------------------------------------------- Institutional Class (1)# CHYIX 12.94% 2.99% 4.13% 5.97% - -------------------------------------------------------------------------------------- Class N (1) CHBAX 12.61% 2.69% 3.82% 5.65% - --------------------------------------------------------------------------------------
- ---------- (1) Commenced operations on January 14, 2000. # The Fund's Institutional Class Shares are currently offered only to accounts for which City National Bank serves as trustee or in a fiduciary capacity. Top Ten Holdings
% OF PORTFOLIO Torchmark 9.250%, 06/15/19 1.7 Stone Energy 8.250%, 12/15/11 1.4 McMoRan Exploration 11.875%, 11/15/14 1.1 Nuveen Investments 10.500%, 11/15/15 1.1 Douglas Dynamics 7.750%, 01/15/12 1.1 First Data 9.875%, 09/24/15 1.0 VWR Funding 10.250%, 07/15/15 1.0 GMAC 6.750%, 12/01/14 1.0 MetroPCS Wireless 9.250%, 11/01/14 1.0 Energy Future Holdings 10.875%, 11/01/17 1.0
CNI CHARTER FUNDS | PAGE 17 investment adviser's report SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- MONEY MARKET FUNDS In last year's annual report, we reported on the massive flight to quality by investors after a complete seizing of the liquidity and credit markets. Credit conditions deteriorated dramatically after the bankruptcy of Lehman Brothers on September 15, 2008.This deterioration played a major role in underscoring the risks (either absolute or perceived) for all debt instruments.This includes the risks inherent in commercial paper instruments, which are short-term financing instruments used by corporations and purchased by many money market mutual funds. During the fourth quarter of 2008, the Federal Reserve Bank ("Fed") introduced three new lending facilities in order to address the deteriorating credit conditions and illiquidity in the financial markets. Specifically, the (1) Asset Backed Commercial Paper & Money Market Mutual Fund Liquidity Facility; (2) Commercial Paper Funding Facility; and (3) Money Market Investor Funding Facility dramatically assisted in un-seizing the commercial paper markets. In addition to the Fed, the Treasury took unprecedented steps this past year to avert further negative effects from the credit and liquidity crises. One key step created to support ongoing stability in money market mutual funds was the Treasury's Temporary Guarantee Program for Money Market Funds. This expired in September 2009. With all this as a brief backdrop to what is considered by most as the worst financial crisis since the Great Depression, most effects of the liquidity crisis of the past two years are over. Short-term instruments like commercial paper are no longer a major concern -- and most of today's focus for money market funds is on rates. As of this writing, the effective fed funds target rate is at 0 to 0.25% -- where it has remained since late 2008.The Fed lowered its target rate a few times from last year's 2% level in order to lower borrowing costs for banks, corporations and eventually consumers. Since most money market instrument yields are based on the Fed Funds rate, this put downward pressure on the yields for the underlying securities found in money market funds. In fact, according to iMoney, 23% of all Money Market Funds were yielding 0% as of September 30, 2009.This had a negative effect on money market fund balances, which are down 15% year-to-date as investors move money into other asset classes or banking instruments. FUND COMMENTARY o The PRIME MONEY MARKET FUND continued to emphasize high quality liquid issuers as a way to garner yield while keeping an emphasis on risk management.With our strategy focusing primarily on the highest quality and liquid issuers, the Fund fared very well during this period.We've also managed the average life of the Fund to around 40 days in order to maintain higher yielding holdings in this very low interest rate environment. Until we get evidence of sustained economic growth, we will maintain the Fund's 40-50 day average life. o The GOVERNMENT MONEY MARKET FUND was positioned well for changes in Fed policy and the lower economic growth environment.We have maintained the maturity profile to over 45 days average life in the Fund in order to benefit from higher yielding holdings in the face of continued low interest rates for the coming quarters. o Our objective for the CALIFORNIA TAX EXEMPT MONEY MARKET FUND continues to focus on the fundamental objective of safety and liquidity.We have maintained a 30 day average life in the fund by emphasizing high quality short-term assets. Additionally, we continue to watch the state of California very closely as the economic crisis continues to put pressure on the state and local issuers.We have not owned direct issues of California General Obligations due to the uncertainty in their ratings and budgetary imbalances.The size of the state and the diverse CNI CHARTER FUNDS | PAGE 18 nature of its economic makeup should help to weather the poor economic conditions, and we remain confident in our risk management and security selection.We will look to maintain the average days to maturity while participating in new issue opportunities and yields. STRATEGIC OUTLOOK Our outlook remains favorable for the credit and liquidity environments for money market instruments. The measures taken by the Fed and Treasury restored the market and investor confidence relatively quickly, and most of those measures are no longer in place since the markets have been normalized for quite some time. However, due to pressure on growth for the U.S. economy and high unemployment expected for most of 2010, the Fed will most likely keep interest rates at exceptionally low levels which will affect interest rates for all money market mutual funds. Our Money Market Funds are positioned well for a low rate environment and slow economic growth in coming quarters.We remained focused, as always, on safety and liquidity as we have position ourselves for continued economic uncertainty and the eventual rise in interest rates. We will attempt to keep around a 40-50 day average life in our funds in order to maintain an optimal yield until we see signs of sustained rebound to the economy and employment. As always, City National Asset Management, Inc. continues to monitor the objectives of the Funds very closely and seek opportunities in the markets to best serve our shareholders. Sincerely, /s/ Rodney J. Olea - ----------------------------------------- Rodney J. Olea DIRECTOR OF FIXED INCOME CITY NATIONAL ASSET MANAGEMENT, INC. THE ABOVE COMMENTARY EXPRESSES THE PORTFOLIO MANAGERS' VIEWS AS OF THE DATE SHOWN AND SHOULD NOT BE RELIED UPON BY THE READER AS RESEARCH OR ADVICE REGARDING ANY INVESTMENT. THESE VIEWS AND THE PORTFOLIO HOLDINGS ARE SUBJECT TO CHANGE. THERE IS NO GUARANTEE THAT ANY FORECASTS MADE WILL COME TO PASS. CNI CHARTER FUNDS | PAGE 19 schedule of investments SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- LARGE CAP VALUE EQUITY FUND (BAR CHART) SECTOR WEIGHTINGS (UNAUDITED)*: Financials 25.1% Healthcare 12.1% Industrials 11.9% Consumer Staples 11.0% Consumer Discretionary 10.0% Utilities 7.5% Information Technology 6.9% Telecommunication Services 6.3% Materials 4.4% Energy 3.1% Short-Term Investments 1.7%
- ---------- * Percentages based on total investments.
DESCRIPTION SHARES VALUE (000) - ------------------------------------------------------------------------ COMMON STOCK [98.3%] AEROSPACE & DEFENSE [3.7%] General Dynamics 9,000 $ 581 Goodrich 16,400 891 Lockheed Martin 4,400 344 Northrop Grumman 14,500 750 Raytheon 17,400 835 - ------------------------------------------------------------------------ TOTAL AEROSPACE & DEFENSE 3,401 ======================================================================== AIR FREIGHT & LOGISTICS [0.8%] FedEx 9,600 722 ======================================================================== BEVERAGES [3.6%] Coca-Cola 24,700 1,326 Coca-Cola Enterprises 25,200 540 Molson Coors Brewing, Cl B 15,400 750 Pepsi Bottling Group 17,300 630 - ------------------------------------------------------------------------ TOTAL BEVERAGES 3,246 ======================================================================== BIOTECHNOLOGY [1.6%] Amgen* 9,000 542 Genzyme - General Division* 10,000 567 Gilead Sciences* 7,000 326 - ------------------------------------------------------------------------ TOTAL BIOTECHNOLOGY 1,435 ======================================================================== CAPITAL MARKETS [5.9%] Bank of New York Mellon 36,900 1,070 Charles Schwab 17,000 325 Goldman Sachs Group 11,200 2,065
DESCRIPTION SHARES VALUE (000) - ------------------------------------------------------------------------ Morgan Stanley 35,700 $ 1,102 State Street 15,000 789 - ------------------------------------------------------------------------ TOTAL CAPITAL MARKETS 5,351 ======================================================================== CHEMICALS [3.0%] Dow Chemical 36,000 939 EI Du Pont de Nemours 28,500 916 PPG Industries 14,000 815 - ------------------------------------------------------------------------ TOTAL CHEMICALS 2,670 ======================================================================== COMMERCIAL BANKS [5.2%] BB&T 21,100 575 PNC Financial Services Group 7,300 355 US Bancorp 49,000 1,071 Wells Fargo 94,960 2,676 - ------------------------------------------------------------------------ TOTAL COMMERCIAL BANKS 4,677 ======================================================================== COMPUTERS & PERIPHERALS [3.7%] EMC* 12,000 205 Hewlett-Packard 36,600 1,728 IBM 11,600 1,387 - ------------------------------------------------------------------------ TOTAL COMPUTERS & PERIPHERALS 3,320 ======================================================================== CONSTRUCTION & ENGINEERING [0.6%] Fluor 10,100 513 ======================================================================== CONTAINERS & PACKAGING [0.7%] Ball 13,200 649 ======================================================================== DIVERSIFIED FINANCIAL SERVICES [5.2%] Bank of America 48,000 812 JPMorgan Chase 83,200 3,646 Nasdaq OMX Group* 12,000 253 - ------------------------------------------------------------------------ TOTAL DIVERSIFIED FINANCIAL SERVICES 4,711 ======================================================================== DIVERSIFIED TELECOMMUNICATION SERVICES [6.2%] AT&T 126,617 3,420 Verizon Communications 73,509 2,225 - ------------------------------------------------------------------------ TOTAL DIVERSIFIED TELECOMMUNICATION SERVICES 5,645 ======================================================================== ELECTRIC UTILITIES [4.5%] Allegheny Energy 14,000 371 American Electric Power 13,000 403
SEE ACCOMPANYING NOTES TO FINANACIAL STATEMENTS CNI CHARTER FUNDS | PAGE 20 schedule of investments September 30, 2009 - -------------------------------------------------------------------------------- LARGE CAP VALUE EQUITY FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000) - ------------------------------------------------------------------------ Edison International 32,600 $ 1,095 Entergy 6,800 543 FirstEnergy 7,600 348 FPL Group 10,200 563 PPL 24,100 731 - ------------------------------------------------------------------------ TOTAL ELECTRIC UTILITIES 4,054 ======================================================================== ELECTRICAL EQUIPMENT [1.0%] Corning 37,100 568 Emerson Electric 10,200 409 - ------------------------------------------------------------------------ TOTAL ELECTRICAL EQUIPMENT 977 ======================================================================== ENERGY EQUIPMENT & SERVICES [0.3%] National Oilwell Varco* 5,500 237 ======================================================================== FOOD & STAPLES RETAILING [3.7%] CVS 20,700 740 Kroger 30,800 635 Safeway 21,400 422 Wal-Mart Stores 31,000 1,522 - ------------------------------------------------------------------------ TOTAL FOOD & STAPLES RETAILING 3,319 ======================================================================== FOOD PRODUCTS [1.9%] Archer-Daniels-Midland 22,400 654 ConAgra Foods 12,500 271 General Mills 7,500 483 Sara Lee 27,000 301 - ------------------------------------------------------------------------ TOTAL FOOD PRODUCTS 1,709 ======================================================================== HEALTH CARE EQUIPMENT & SUPPLIES [1.8%] Baxter International 12,500 713 Becton Dickinson 5,500 383 Covidien 12,800 554 - ------------------------------------------------------------------------ TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 1,650 ======================================================================== HEALTH CARE PROVIDERS & SERVICES [2.6%] Aetna 27,600 768 Cigna 23,500 660 McKesson 15,000 894 - ------------------------------------------------------------------------ TOTAL HEALTH CARE PROVIDERS & SERVICES 2,322 ========================================================================
DESCRIPTION SHARES VALUE (000) - ------------------------------------------------------------------------ HOTELS, RESTAURANTS & LEISURE [1.2%] Carnival 14,300 $ 476 Darden Restaurants 17,000 580 - ------------------------------------------------------------------------ TOTAL HOTELS, RESTAURANTS & LEISURE 1,056 ======================================================================== HOUSEHOLD DURABLES [0.7%] Whirlpool 8,700 609 ======================================================================== HOUSEHOLD PRODUCTS [1.8%] Procter & Gamble 28,500 1,651 ======================================================================== INDUSTRIAL CONGLOMERATES [2.0%] General Electric 80,500 1,322 Tyco International 13,600 469 - ------------------------------------------------------------------------ TOTAL INDUSTRIAL CONGLOMERATES 1,791 ======================================================================== INSURANCE [8.9%] ACE 24,600 1,315 Aflac 16,000 684 Allstate 17,000 521 Assurant 14,800 475 Chubb 23,000 1,159 MetLife 38,406 1,462 Prudential Financial 7,800 389 Travelers 27,000 1,329 Unum Group 30,000 643 - ------------------------------------------------------------------------ TOTAL INSURANCE 7,977 ======================================================================== IT SERVICES [0.3%] Western Union 16,000 303 ======================================================================== MACHINERY [1.3%] Caterpillar 10,600 544 Eaton 3,900 221 Parker Hannifin 7,700 399 - ------------------------------------------------------------------------ TOTAL MACHINERY 1,164 ======================================================================== MEDIA [4.1%] CBS, Cl B 31,250 376 Comcast, Cl A 48,200 814 Omnicom Group 14,700 543 Time Warner 27,933 804 Viacom, Cl B* 23,000 645 Walt Disney 18,100 497 - ------------------------------------------------------------------------ TOTAL MEDIA 3,679 ========================================================================
SEE ACCOMPANYING NOTES TO FINANACIAL STATEMENTS CNI CHARTER FUNDS | PAGE 21 schedule of investments SEPTEMBER 30, 2009 - ------------------------------------------------------------------------ LARGE CAP VALUE EQUITY FUND (CONCLUDED)
DESCRIPTION SHARES VALUE (000) - ------------------------------------------------------------------------ METALS & MINING [0.2%] United States Steel 4,000 $ 178 ======================================================================== MULTILINE RETAIL [0.8%] Target 15,500 724 ======================================================================== MULTI-UTILITIES [3.0%] Dominion Resources 13,700 473 PG&E 20,300 822 Public Service Enterprise Group 22,100 695 Sempra Energy 14,000 697 - ----------------------------------------------------------------------- TOTAL MULTI-UTILITIES 2,687 ======================================================================== OIL, GAS & CONSUMABLE FUELS [2.8%] Chevron 8,240 580 ConocoPhillips 10,580 478 Occidental Petroleum 19,000 1,490 - ------------------------------------------------------------------------ TOTAL OIL, GAS & CONSUMABLE FUELS 2,548 ======================================================================== PAPER & FOREST PRODUCTS [0.5%] MeadWestvaco 20,400 455 ======================================================================== PHARMACEUTICALS [6.1%] Abbott Laboratories 21,700 1,074 Bristol-Myers Squibb 66,000 1,486 Eli Lilly 16,000 528 Merck 23,100 731 Pfizer 104,000 1,721 - ------------------------------------------------------------------------ TOTAL PHARMACEUTICALS 5,540 ======================================================================== ROAD & RAIL [3.0%] CSX 31,400 1,315 Norfolk Southern 12,600 543 Union Pacific 14,500 846 - ----------------------------------------------------------------------- TOTAL ROAD & RAIL 2,704 ======================================================================== SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT [1.2%] Texas Instruments 44,900 1,063 ======================================================================== SOFTWARE [1.1%] Microsoft 37,500 971 ========================================================================
DESCRIPTION SHARES VALUE (000) - ------------------------------------------------------------------------ SPECIALTY RETAIL [1.9%] Best Buy 12,200 $ 458 Lowe's 22,500 471 RadioShack 21,200 351 Sherwin-Williams 8,200 493 ======================================================================== TOTAL SPECIALTY RETAIL 1,773 ======================================================================== TEXTILES, APPAREL & LUXURY GOODS [1.3%] Nike, Cl B 17,900 1,158 ======================================================================= WIRELESS TELECOMMUNICATION SERVICES [0.1%] Sprint Nextel* 20,000 79 ======================================================================== TOTAL COMMON STOCK (Cost $ 92,437) 88,718 ======================================================================== CASH EQUIVALENTS [1.7%] Fidelity Institutional Domestic Money Market Portfolio, Cl I, 0.270%** 766,710 767 Goldman Sachs Financial Square Funds - Government Fund, 0.080%** 789,008 789 - ------------------------------------------------------------------------ TOTAL CASH EQUIVALENTS (Cost $ 1,556) 1,556 ======================================================================== TOTAL INVESTMENTS [100.0%] (Cost $ 93,993) $ 90,274 ========================================================================
- ---------- Percentages are based on Net Assets of $90,268 ($ Thousands). * Non-income producing security. ** The rate reported is the 7-day current yield as of September 30, 2009. Cl -- Class The following is a summary of the inputs used as of September 30, 2009 in valuing the Fund's investments carried at value ($ Thousands):
Investments in Securities Level 1 Level 2 Level 3 Total -------- ------- ------- ------- Common Stock $ 88,718 $ -- $ -- $88,718 Cash Equivalents 1,556 -- -- 1,556 -------- ------- ------- ------- Total Investments in Securities $ 90,274 $ -- $ -- $90,274 ======== ======= ======= =======
FOR MORE INFORMATION ON VALUATION INPUTS, SEE NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES IN THE NOTES TO FINANCIAL STATEMENTS. See accompanying notes to financial statements. CNI CHARTER FUNDS | PAGE 22 schedule of investments SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- LARGE CAP GROWTH EQUITY FUND SECTOR WEIGHTINGS (UNAUDITED)*: (BAR CHART) Information Technology 28.9% Energy 19.4% Healthcare 13.5% Consumer Staples 11.3% Consumer Discretionary 8.3% Industrials 8.3% Financials 5.7% Materials 2.5% Short-Term Investments 1.9% Utilities 0.2%
- ------------------ * Percentages based on total investments.
- ------------------------------------------------------------------------ DESCRIPTION SHARES VALUE (000) - ------------------------------------------------------------------------ COMMON STOCK [98.1%] AEROSPACE & DEFENSE [2.9%] Boeing 3,900 $ 211 L-3 Communications Holdings, Cl 3 3,000 241 Lockheed Martin 3,300 258 Precision Castparts 3,600 367 - ------------------------------------------------------------------------ TOTAL AEROSPACE & DEFENSE 1,077 ======================================================================== AIR FREIGHT & LOGISTICS [0.7%] Expeditors International of Washington 7,700 271 ======================================================================== BEVERAGES [2.8%] Coca-Cola 5,800 311 PepsiCo 12,200 716 - ------------------------------------------------------------------------ TOTAL BEVERAGES 1,027 ======================================================================== BIOTECHNOLOGY [4.1%] Amgen* 4,000 241 Celgene* 7,000 391 Genzyme - General Division* 6,500 369 Gilead Sciences* 11,400 531 - ------------------------------------------------------------------------ TOTAL BIOTECHNOLOGY 1,532 ======================================================================== CAPITAL MARKETS [4.1%] Franklin Resources 4,500 453 Goldman Sachs Group 4,000 737 T Rowe Price Group 7,000 320 - ------------------------------------------------------------------------ TOTAL CAPITAL MARKETS 1,510 ========================================================================
- ------------------------------------------------------------------------ DESCRIPTION SHARES VALUE (000) - ------------------------------------------------------------------------ CHEMICALS [0.9%] Monsanto 4,200 $ 325 ======================================================================== COMMERCIAL SERVICES & SUPPLIES [0.7%] Pitney Bowes 2,100 52 RR Donnelley & Sons 9,900 211 - ------------------------------------------------------------------------ TOTAL COMMERCIAL SERVICES & SUPPLIES 263 ======================================================================== COMMUNICATIONS EQUIPMENT [4.1%] Cisco Systems* 8,000 188 Harris 5,100 192 Qualcomm 25,500 1,147 - ------------------------------------------------------------------------ TOTAL COMMUNICATIONS EQUIPMENT 1,527 ======================================================================== COMPUTERS & PERIPHERALS [7.3%] Apple* 4,575 848 Hewlett-Packard 13,723 648 IBM 10,200 1,220 ------------------------------------------------------------------- TOTAL COMPUTERS & PERIPHERALS 2,716 ======================================================================== CONSTRUCTION & ENGINEERING [0.9%] Fluor 3,500 178 Jacobs Engineering Group* 3,700 170 ------------------------------------------------------------------- TOTAL CONSTRUCTION & ENGINEERING 348 ======================================================================== DIVERSIFIED CONSUMER SERVICES [0.4%] Apollo Group, Cl A* 2,000 147 ======================================================================== DIVERSIFIED FINANCIAL SERVICES [0.6%] CME Group, Cl A 700 216 ======================================================================== ELECTRIC UTILITIES [0.2%] Edison International 2,200 74 ======================================================================== ENERGY EQUIPMENT & SERVICES [4.7%] Baker Hughes 4,500 192 ENSCO International 10,300 438 Noble 8,000 304 Schlumberger 11,300 673 Smith International 4,700 135 - ------------------------------------------------------------------------ TOTAL ENERGY EQUIPMENT & SERVICES 1,742 ========================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 23 schedule of investments SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- LARGE CAP GROWTH EQUITY FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000) - ------------------------------------------------------------------------ FOOD & STAPLES RETAILING [2.4%] Wal-Mart Stores 18,075 $ 887 ======================================================================== FOOD PRODUCTS [1.1%] Campbell Soup 3,500 114 Kellogg 5,700 281 - ------------------------------------------------------------------------ TOTAL FOOD PRODUCTS 395 ======================================================================== HEALTH CARE EQUIPMENT & SUPPLIES [3.2%] Bard (C.R.) 3,200 252 Baxter International 5,000 285 Stryker 9,300 422 Zimmer Holdings* 4,000 214 - ------------------------------------------------------------------------ TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 1,173 ======================================================================== HEALTH CARE PROVIDERS & SERVICES [2.3%] DaVita* 3,400 193 McKesson 3,300 196 UnitedHealth Group 18,700 468 - ------------------------------------------------------------------------ TOTAL HEALTH CARE PROVIDERS & SERVICES 857 ======================================================================== HOUSEHOLD PRODUCTS [4.3%] Colgate-Palmolive 9,400 717 Procter & Gamble 15,102 875 - ------------------------------------------------------------------------ TOTAL HOUSEHOLD PRODUCTS 1,592 ======================================================================== INSURANCE [0.7%] Aflac 6,600 282 ======================================================================== INTERNET & CATALOG RETAIL [1.1%] Amazon.Com* 4,400 411 ======================================================================== INTERNET SOFTWARE & SERVICES [6.1%] eBay* 30,575 722 Google, Cl A* 2,600 1,289 Yahoo!* 15,000 267 - ------------------------------------------------------------------------ TOTAL INTERNET SOFTWARE & SERVICES 2,278 ======================================================================== IT SERVICES [1.2%] Cognizant Technology Solutions, Cl A* 6,700 259 Western Union 9,600 182 - ------------------------------------------------------------------------ TOTAL IT SERVICES 441 ========================================================================
DESCRIPTION SHARES VALUE (000) - ------------------------------------------------------------------------ MACHINERY [2.2%] Caterpillar 10,700 $ 549 Danaher 4,100 276 - ------------------------------------------------------------------------ TOTAL MACHINERY 825 ======================================================================== MEDIA [1.8%] Comcast, Cl A 18,150 306 DIRECTV Group* 4,900 135 Omnicom Group 6,000 222 - ------------------------------------------------------------------------ TOTAL MEDIA 663 ======================================================================== METALS & MINING [1.6%] Freeport-McMoRan Copper & Gold 6,000 412 Nucor 4,200 197 - ------------------------------------------------------------------------ TOTAL METALS & MINING 609 ======================================================================== MULTILINE RETAIL [0.5%] Target 4,000 187 ======================================================================== OIL, GAS & CONSUMABLE FUELS [14.7%] Apache 3,300 303 Chevron 18,000 1,268 EOG Resources 4,900 409 Exxon Mobil 32,000 2,196 Hess 2,800 150 Occidental Petroleum 7,000 549 Southwestern Energy* 5,000 213 XTO Energy 9,400 388 - ------------------------------------------------------------------------ TOTAL OIL, GAS & CONSUMABLE FUELS 5,476 ======================================================================== PERSONAL PRODUCTS [0.7%] Avon Products 8,300 282 ======================================================================== PHARMACEUTICALS [3.9%] Abbott Laboratories 5,000 248 Allergan 3,600 204 Johnson & Johnson 16,664 1,015 - ------------------------------------------------------------------------ TOTAL PHARMACEUTICALS 1,467 ======================================================================== PROFESSIONAL SERVICES [0.6%] Robert Half International 8,400 210 ========================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 24 schedule of investments SEPTEMBER 30, 2009 - ------------------------------------------------------------------------ LARGE CAP GROWTH EQUITY FUND (CONCLUDED)
DESCRIPTION SHARES VALUE (000) - ------------------------------------------------------------------------ ROAD & RAIL [0.3%] CSX 2,300 $ 96 ======================================================================== SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT [1.6%] Intel 5,000 98 MEMC Electronic Materials* 9,500 158 Texas Instruments 14,400 341 - ------------------------------------------------------------------------ TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 597 ======================================================================== SOFTWARE [8.6%] Adobe Systems* 6,000 198 Autodesk* 5,000 119 Microsoft 62,180 1,610 Oracle 43,265 901 Symantec* 21,300 351 - ------------------------------------------------------------------------ TOTAL SOFTWARE 3,179 ======================================================================== SPECIALTY RETAIL [2.0%] Autozone* 2,500 366 Best Buy 4,900 184 GameStop, Cl A* 8,100 214 - ------------------------------------------------------------------------ TOTAL SPECIALTY RETAIL 764 ======================================================================== TEXTILES, APPAREL & LUXURY GOODS [2.5%] Coach* 18,100 596 Nike, Cl B 5,000 323 - ------------------------------------------------------------------------ TOTAL TEXTILES, APPAREL & LUXURY GOODS 919 ======================================================================== THRIFTS & MORTGAGE FINANCE [0.3%] Hudson City Bancorp 8,000 105 ======================================================================== TOTAL COMMON STOCK (Cost $35,797) 36,470 ========================================================================
DESCRIPTION SHARES VALUE (000) - ------------------------------------------------------------------------ CASH EQUIVALENTS [1.9%] Fidelity Institutional Domestic Money Market Portfolio, Cl I, 0.270%** 561,337 $ 561 Goldman Sachs Financial Square Funds - Government Fund, 0.080%** 151,553 152 - ------------------------------------------------------------------------ TOTAL CASH EQUIVALENTS (Cost $ 713) 713 ======================================================================== TOTAL INVESTMENTS [100.0%] (Cost $ 36,510) $ 37,183 ========================================================================
- ---------- PERCENTAGES ARE BASED ON NET ASSETS OF $37,170 ($ THOUSANDS). * NON-INCOME PRODUCING SECURITY. ** THE RATE REPORTED IS THE 7-DAY CURRENT YIELD AS OF SEPTEMBER 30, 2009. CL -- CLASS The following is a summary of the inputs used as of September 30, 2009 in valuing the Fund's investments carried at value ($ Thousands):
Investments in Securities Level 1 Level 2 Level 3 Total --------- -------- ------- ------- Common Stock $ 36,470 $ -- $ -- $36,470 Cash Equivalents 713 -- -- 713 -------- ------- ------- ------- Total Investments in Securities $ 37,183 $ -- $ -- $37,183 ======== ======= ======= =======
FOR MORE INFORMATION ON VALUATION INPUTS, SEE NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES IN THE NOTES TO FINANCIAL STATEMENTS. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 25 schedule of investments SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- RCB SMALL CAP VALUE FUND (BAR CHART) SECTOR WEIGHTINGS (UNAUDITED)*: Consumer Discretionary 24.3% Financials 20.2% Materials 10.6% Short-Term Investments 10.6% Industrials 10.2% Consumer Staples 9.7% Information Technology 8.9% Healthcare 3.5% Energy 2.0%
- ---------- * Percentages based on total investments.
DESCRIPTION SHARES VALUE (000) - --------------------------------------------------------------- COMMON STOCK [90.7%] CHEMICALS [6.5%] Nalco Holding 48,200 $ 988 Spartech 49,400 532 - --------------------------------------------------------------- TOTAL CHEMICALS 1,520 =============================================================== COMMERCIAL BANKS [2.6%] Wilmington Trust 42,300 600 =============================================================== CONSTRUCTION MATERIALS [2.1%] Eagle Materials 17,000 486 =============================================================== DIVERSIFIED CONSUMER SERVICES [2.0%] Coinstar* 14,300 472 =============================================================== ENERGY EQUIPMENT & SERVICES [2.0%] Exterran Holdings* 19,400 461 =============================================================== FOOD PRODUCTS [3.7%] Ralcorp Holdings* 14,700 859 =============================================================== FOOD, BEVERAGE & TOBACCO [2.0%] Universal 11,300 473 =============================================================== HOTELS, RESTAURANTS & LEISURE [4.1%] Wendy's/Arby's Group, Cl A 200,039 946 =============================================================== HOUSEHOLD PRODUCTS [6.3%] Central Garden & Pet, Cl A* 88,500 967 Scotts Miracle-Gro, Cl A 11,900 511 - --------------------------------------------------------------- TOTAL HOUSEHOLD PRODUCTS 1,478 ===============================================================
DESCRIPTION SHARES VALUE (000) - --------------------------------------------------------------- INSURANCE [13.8%] Alleghany* 3,837 $ 994 First American 17,100 554 Hilltop Holdings* 35,500 435 White Mountains Insurance Group 4,000 1,228 - --------------------------------------------------------------- TOTAL INSURANCE 3,211 =============================================================== INTERNET & CATALOG RETAIL [4.4%] Liberty Media - Interactive, Ser A* 93,900 1,030 =============================================================== INTERNET SOFTWARE & SERVICES [3.2%] United Online 93,000 748 =============================================================== IT SERVICES [2.1%] Global Cash Access Holdings* 67,100 490 =============================================================== LIFE SCIENCES TOOLS & SERVICES [3.6%] PerkinElmer 43,600 839 =============================================================== MACHINERY [10.4%] Actuant, Cl A 60,900 978 Altra Holdings* 50,000 560 Crane 17,700 457 IDEX 15,400 430 =============================================================== TOTAL MACHINERY 2,425 =============================================================== MEDIA [12.0%] Fisher Communications* 9,899 180 Liberty Media - Capital, Ser A* 48,102 1,006 Virgin Media 42,300 589 Washington Post, Cl B 2,200 1,030 - --------------------------------------------------------------- TOTAL MEDIA 2,805 =============================================================== REAL ESTATE INVESTMENT TRUSTS [4.1%] Chimera Investment 251,000 959 =============================================================== SOFTWARE [3.7%] Fair Isaac 21,300 458 PLATO Learning* 92,400 399 - --------------------------------------------------------------- TOTAL SOFTWARE 857 ===============================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 26 schedule of investments SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- RCB SMALL CAP VALUE FUND (CONCLUDED)
SHARES/FACE DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------- SPECIALTY RETAIL [2.1%] Syms* 60,000 $ 485 ========================================================================== TOTAL COMMON STOCK (Cost $ 17,301) 21,144 ========================================================================== REPURCHASE AGREEMENT (A) [10.8%] Morgan Stanley 0.040%, dated 09/30/09, repurchased on 10/01/09, repurchase price $ 2,509,495 (collateralized by a U.S. Treasury Note, par value $1,501,502, 3.875%, 4/15/29; with total market value $2,559,687) $ 2,509 2,509 - -------------------------------------------------------------------------- TOTAL REPURCHASE AGREEMENT (Cost $2,509) 2,509 ========================================================================== TOTAL INVESTMENTS [101.5%] (Cost $19,810) $ 23,653 ==========================================================================
- ---------- PERCENTAGES ARE BASED ON NET ASSETS OF $23,298 ($ THOUSANDS). * NON-INCOME PRODUCING SECURITY. (A) TRI-PARTY REPURCHASE AGREEMENT CL -- CLASS The following is a summary of the inputs used as of September 30, 2009 in valuing the Fund's investments carried at value ($ Thousands):
Investments in Securities Level 1 Level 2 Level 3 Total ------- ------- ------- ------- Common Stock $21,144 $ -- $ -- $21,144 Repurchase Agreement -- 2,509 -- 2,509 ------- ------ ------- ------- Total Investments in Securities $21,144 $2,509 $ -- $23,653 ======= ====== ======= =======
FOR MORE INFORMATION ON VALUATION INPUTS, SEE NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES IN THE NOTES TO FINANCIAL STATEMENTS. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 27 schedule of investments SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- OPPORTUNISTIC VALUE FUND SECTOR WEIGHTINGS (UNAUDITED)*: (BAR CHART) Financials 20.9% Healthcare 17.1% Energy 15.0% Information Technology 12.8% Consumer Staples 9.8% Materials 7.4% Industrials 6.8% Consumer Discretionary 4.3% Short-Term Investments 4.0% Telecommunication Services 1.9%
- ---------- * Percentages based on total investments.
DESCRIPTION SHARES VALUE (000) - ---------------------------------------------------------- COMMON STOCK [96.9%] BEVERAGES [2.3%] PepsiCo 10,200 $ 598 ========================================================== CHEMICALS [1.4%] Potash Corp of Saskatchewan 4,000 361 ========================================================== COMMERCIAL BANKS [7.0%] BB&T 9,300 253 M&T Bank 6,800 424 US Bancorp 41,000 896 Wells Fargo 9,000 254 - ---------------------------------------------------------- TOTAL COMMERCIAL BANKS 1,827 ========================================================== COMMERCIAL SERVICES & SUPPLIES [1.2%] Avery Dennison 8,400 303 ========================================================== COMMUNICATIONS EQUIPMENT [2.7%] Nokia ADR 48,000 702 ========================================================== COMPUTERS & PERIPHERALS [2.7%] Dell* 45,500 694 ========================================================== CONTAINERS & PACKAGING [3.9%] Crown Holdings* 18,100 492 Sealed Air 27,900 548 - ---------------------------------------------------------- TOTAL CONTAINERS & PACKAGING 1,040 ========================================================== DISTRIBUTORS [1.4%] Genuine Parts 10,000 381 ==========================================================
DESCRIPTION SHARES VALUE (000) - ---------------------------------------------------------- DIVERSIFIED FINANCIAL SERVICES [3.1%] IntercontinentalExchange* 2,100 $ 204 Nasdaq OMX Group* 29,000 611 - ---------------------------------------------------------- TOTAL DIVERSIFIED FINANCIAL SERVICES 815 ========================================================== DIVERSIFIED TELECOMMUNICATION SERVICES [1.9%] AT&T 18,500 500 ========================================================== ELECTRICAL EQUIPMENT [2.2%] Baldor Electric 21,400 585 ========================================================== ENERGY EQUIPMENT & SERVICES [5.5%] Exterran Holdings* 27,800 660 Unit* 19,000 784 - ---------------------------------------------------------- TOTAL ENERGY EQUIPMENT & SERVICES 1,444 ========================================================== FOOD & STAPLES RETAILING [4.7%] SUPERVALU 37,900 571 Walgreen 18,000 674 - ---------------------------------------------------------- TOTAL FOOD & STAPLES RETAILING 1,245 ========================================================== FOOD PRODUCTS [2.9%] Del Monte Foods 65,600 760 ========================================================== HEALTH CARE EQUIPMENT & SUPPLIES [2.9%] Covidien 17,900 774 ========================================================== HEALTH CARE PROVIDERS & SERVICES [9.5%] Laboratory Corp of America Holdings* 7,800 513 McKesson 10,900 649 Patterson* 20,300 553 Quest Diagnostics 14,700 767 - ---------------------------------------------------------- TOTAL HEALTH CARE PROVIDERS & SERVICES 2,482 ========================================================== INDUSTRIAL CONGLOMERATES [3.4%] Tyco International 26,200 903 ========================================================== INSURANCE [8.0%] Chubb 14,000 706 HCC Insurance Holdings 32,400 886 Unum Group 24,000 514 - ---------------------------------------------------------- TOTAL INSURANCE 2,106 ==========================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 28 schedule of investments SEPTEMBER 30, 2009 - ------------------------------------------------------------------------------- OPPORTUNISTIC VALUE FUND (CONCLUDED)
DESCRIPTION SHARES VALUE (000) - ----------------------------------------------------------- LEISURE EQUIPMENT & PRODUCTS [1.0%] Mattel 14,300 $ 264 =========================================================== LIFE SCIENCES TOOLS & SERVICES [1.5%] Pharmaceutical Product Development 17,600 386 =========================================================== MEDIA [1.9%] Time Warner 17,166 494 =========================================================== METALS & MINING [2.2%] Cliffs Natural Resources 17,600 570 =========================================================== OFFICE ELECTRONICS [1.7%] Xerox 57,200 443 =========================================================== OIL, GAS & CONSUMABLE FUELS [9.7%] Chesapeake Energy 18,200 517 ConocoPhillips 11,000 497 Newfield Exploration* 13,800 587 Spectra Energy 34,400 651 Valero Energy 14,600 283 - ----------------------------------------------------------- TOTAL OIL, GAS & CONSUMABLE FUELS 2,535 =========================================================== PHARMACEUTICALS [3.3%] Bristol-Myers Squibb 11,100 250 Mylan* 39,100 626 - ----------------------------------------------------------- TOTAL PHARMACEUTICALS 876 =========================================================== REAL ESTATE MANAGEMENT & DEVELOPMENT [3.0%] Brookfield Asset Management, ClA 34,700 788 =========================================================== SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT [1.8%] Applied Materials 35,500 476 =========================================================== SOFTWARE [4.1%] Microsoft 10,800 279 Symantec* 49,000 807 - ----------------------------------------------------------- TOTAL SOFTWARE 1,086 =========================================================== TOTAL COMMON STOCK (Cost $18,237) 25,438 ===========================================================
DESCRIPTION SHARES VALUE (000) - ----------------------------------------------------------- CASH EQUIVALENT [4.0%] First American Prime Obligations Fund, ClY, 0.000%** 1,054,216 $ 1,054 - ----------------------------------------------------------- TOTAL CASH EQUIVALENT (Cost $ 1,054) 1,054 =========================================================== TOTAL INVESTMENTS [100.9%] (Cost $19,291) $ 26,492 ===========================================================
PERCENTAGES ARE BASED ON Net ASSETS OF $26,265 ($ THOUSANDS). - ---------- * NON-INCOME PRODUCING SECURITY. ** THE RATE REPORTED IS THE 7-DAY CURRENT YIELD AS OF SEPTEMBER 30, 2009. ADR -- AMERICAN DEPOSITARY RECEIPT CL -- CLASS The following is a summary of the inputs used as of September 30, 2009 in valuing the Fund's investments carried at value ($ Thousands):
Investments in Securities Leve1 1 Level 2 Level 3 Total ------- ------- ------- ------- Common Stock $25,438 $ -- $ -- $25,438 Cash Equivalent 1,054 -- -- 1,054 ------- ------- ------- ------- Total Investments in Securities $26,492 $ -- $ -- $26,492 ======= ======= ======= =======
FOR MORE INFORMATION ON VALUATION INPUTS, SEE NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES IN THE NOTES TO FINANCIAL STATEMENTS. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 29 schedule of investments SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- MULTI-ASSET FUND (BAR CHART) TYPE OF SECURITY WEIGHTINGS (UNAUDITED)*: Exchange Traded Funds 58.7% Affiliated Investment Funds 15.6% Short-Term Investments 8.6% Registered Investment Company 8.1% U.S. Government Agency Obligations 6.1% Municipal Bond 2.9%
- ---------- * Percentages based on total investments.
SHARES/FACE DESCRIPTION AMOUNT(000) VALUE (000) - ------------------------------------------------------------------------------ EXCHANGE TRADED FUNDS [57.4%] iShares Barclays 1-3 Year Credit Bond Fund 20,861 $ 2,177 iShares MSCI EAFE Index Fund 23,787 1,301 iShares Russell 2000 Growth Index Fund 10,931 716 iShares S&P MidCap 400 Index Fund 17,974 1,240 SPDR S&P 500 Fund 65,600 6,925 Vanguard Emerging Markets 36,365 1,402 Vanguard Small Cap Growth 12,933 743 - ---------------------------------------------------------------------------- TOTAL EXCHANGE TRADED FUNDS (Cost $13,658) 14,504 ============================================================================ AFFILIATED INVESTMENT FUNDS [15.2%] CNI Corporate Bond Fund, Institutional Class 203,774 2,152 CNI Government Bond Fund, Institutional Class 159,667 1,689 - ---------------------------------------------------------------------------- TOTAL AFFILIATED INVESTMENT FUNDS (Cost $3,755) 3,841 ============================================================================ REGISTERED INVESTMENT COMPANIES [7.9%] Alpine International Real Estate Equity Fund 39,587 909 Cohen & Steers International Realty Fund, Inc. 97,581 1,093 - ---------------------------------------------------------------------------- TOTAL REGISTERED INVESTMENT COMPANIES (Cost $1,779) 2,002 ============================================================================ U.S. GOVERNMENT AGENCY OBLIGATIONS [6.0%] FHLB (A) 0.500%, 11/05/09 $ 750 750 FNMA (B) 0.400%, 07/13/10 750 750 - ---------------------------------------------------------------------------- TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (Cost $1,500) 1,500 ============================================================================
FACE AMOUNT DESCRIPTION (000)/SHARES VALUE (000) - ------------------------------------------------------------------------------ MUNICIPAL BOND [2.8%] CALIFORNIA [2.8%] State of California, Sub-Ser A-2, RAN 3.000%, 06/23/10 $ 700 $ 709 - ---------------------------------------------------------------------------- TOTAL MUNICIPAL BONDS (Cost $ 707) 709 ============================================================================ CASH EQUIVALENT [8.5%] Goldman Sachs Financial Square Funds - Government Fund, 0.080%* 2,136,617 $ 2,137 - ---------------------------------------------------------------------------- TOTAL CASH EQUIVALENT (Cost $ 2,137) 2,137 ============================================================================ TOTAL INVESTMENTS [97.8%] (Cost $ 23,536) $ 24,693 ============================================================================
- ---------- PERCENTAGES ARE BASED ON NET ASSETS OF $25,260 ($ THOUSANDS). * THE RATE REPORTED IS THE 7-DAY EFFECTIVE YIELD AS OF SEPTEMBER 30, 2009. (A) FLOATING RATE SECURITY -- THE RATE REFLECTED IS THE RATE IN EFFECT ON SEPTEMBER 30, 2009. (B) STEP BOND -- THE RATE REPORTED IS THE CURRENT YIELD AT TIME OF PURCHASE. EAFE -- EUROPE AUSTRALIASIA AND THE FAR EAST FHLB -- FEDERAL HOME LOAN BANK FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION MSCI -- MORGAN STANLE CAPITAL INTERNATIONAL RAN -- REVENUE ANTICIPATION NOTE SER -- SERIES SPDR -- STANDARD & POOR'S DEPOSITORY RECEIPTS The following is a summary of the inputs used as of September 30, 2009 in valuing the Fund's investments carried at value ($ Thousands):
Investments in Securities Level 1 Level 2 Level 3 Total -------- ------- ------- -------- Exchange Traded Fund $ 14,504 $ -- $ -- $ 14,504 Affiliated Investment Funds 3,841 -- -- 3,841 Registered Investment Companies 2,002 -- -- 2,002 U.S. Government Agency Obligations -- 1,500 -- 1,500 Municipal Bond -- 709 -- 709 Cash Equivalent 2,137 -- -- 2,137 -------- ------- ------- -------- Total Investments in Securities $ 22,484 $ 2,209 $ -- $ 24,693 ======== ======= ======= ========
FOR MORE INFORMATION ON VALUATION INPUTS, SEE NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES IN THE NOTES TO FINANCIAL STATEMENTS. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 30 SCHEDULE OF INVESTMENTS SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- CORPORATE BOND FUND ISSUER INDUSTRY WEIGHTINGS (UNAUDITED)*: (BAR CHART) Financials 37.0% Industrials 29.5% Banks 14.2% Utilities 5.3% Municipal Bonds 3.8% U.S. Government Mortgage-Backed Obligations 3.6% Short-Term Investment 2.5% Telephone 2.3% U.S. Treasury Obligation 0.7% U.S. Government Agency Obligations 0.6% Foreign Governments 0.5%
- ---------- * Percentages based on total investments.
DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------------------- CORPORATE BONDS [87.4%] APPLICATIONS SOFTWARE [2.3%] Microsoft 4.200%, 06/01/19 $ 2,000 $ 2,059 ============================================================================= BANKS [14.0%] Bank of America, MTN 3.125%, 06/15/12 1,500 1,560 Barclays Bank (A) 6.050%, 12/04/17 1,000 1,006 Deutsche Bank 7.250%, 10/15/11 500 527 JPMorgan Chase Bank 6.000%, 10/01/17 1,000 1,052 PNC Funding, FDIC Insured 1.875%, 06/22/11 1,150 1,164 US Bank 6.375%, 08/01/11 1,485 1,604 Wachovia Bank 4.800%, 11/01/14 1,270 1,289 Wells Fargo Bank 7.550%, 06/21/10 1,000 1,046 Wells Fargo Bank 4.625%, 08/09/10 1,000 1,033 Wells Fargo, FDIC Insured 3.000%, 12/09/11 2,200 2,278 - ----------------------------------------------------------------------------- TOTAL BANKS 12,559 ============================================================================= BEAUTY PRODUCTS [0.9%] Avon Products 7.150%, 11/15/09 800 805 =============================================================================
DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------------------- CHEMICALS [1.0%] Dow Chemical 8.550%, 05/15/19 $ 835 $ 939 ============================================================================= COMMUNICATION & MEDIA [3.0%] AOL Time Warner 6.750%, 04/15/11 415 443 Comcast Cable Communications Holdings 8.375%, 03/15/13 160 186 News America Holdings 9.250%, 02/01/13 475 558 Walt Disney, MTN 5.700%, 07/15/11 1,395 1,493 - ----------------------------------------------------------------------------- TOTAL COMMUNICATION & MEDIA 2,680 ============================================================================= COMPUTER SYSTEM DESIGN & SERVICES [6.6%] Cisco Systems 5.500%, 02/22/16 1,250 1,376 Dell 5.625%, 04/15/14 1,000 1,105 Hewlett-Packard 6.125%, 03/01/14 1,475 1,661 International Business Machines 7.625%, 10/15/18 1,500 1,846 - ----------------------------------------------------------------------------- TOTAL COMPUTER SYSTEM DESIGN & SERVICES 5,988 ============================================================================= DIVERSIFIED OPERATIONS [0.6%] 3M, MTN 4.375%, 08/15/13 500 535 ============================================================================= DRUGS [2.6%] Wyeth 6.950%, 03/15/11 2,170 2,332 ============================================================================= ELECTRIC UTILITIES [1.0%] Exelon 4.900%, 06/15/15 889 922 ============================================================================= ELECTRICAL SERVICES [3.4%] Alabama Power 4.850%, 12/15/12 1,430 1,551 American Electric Power 5.250%, 06/01/15 490 513 WPS Resources 7.000%, 11/01/09 1,000 1,004 - ----------------------------------------------------------------------------- TOTAL ELECTRICAL SERVICES 3,068 =============================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 31 SCHEDULE OF INVESTMENTS SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- CORPORATE BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------------------- FINANCE AUTO LOANS [3.2%] American Honda Finance, MTN (A) 5.125%, 12/15/10 $ 1,000 $ 1,028 Toyota Motor Credit 4.350%, 12/15/10 1,800 1,838 - ----------------------------------------------------------------------------- TOTAL FINANCE AUTO LOANS 2,866 ============================================================================= FINANCIAL SERVICES [13.8%] AXA Financial 7.750%, 08/01/10 1,000 1,043 Boeing Capital 6.500%, 02/15/12 930 1,024 General Electric Capital, Ser A, MTN 6.875%, 11/15/10 250 264 6.000%, 06/15/12 2,180 2,335 General Electric Capital, FDIC Insured 2.200%, 06/08/12 2,805 2,848 GMAC, FDIC Insured 2.200%, 12/19/12 2,500 2,527 HSBC Finance 5.250%, 04/15/15 1,250 1,271 National Rural Utilities, Ser C, MTN 7.250%, 03/01/12 1,000 1,105 - ----------------------------------------------------------------------------- TOTAL FINANCIAL SERVICES 12,417 ============================================================================= FOOD, BEVERAGE & TOBACCO [4.4%] Anheuser-Busch 7.500%, 03/15/12 665 732 Bottling Group 5.500%, 04/01/16 1,000 1,093 4.625%, 11/15/12 1,435 1,547 General Mills 6.000%, 02/15/12 560 608 - ----------------------------------------------------------------------------- TOTAL FOOD, BEVERAGE & TOBACCO 3,980 ============================================================================= FOREIGN GOVERNMENTS [0.5%] United Mexican States, MTN 5.875%, 01/15/14 450 482 ============================================================================= INSURANCE [1.7%] Berkshire Hathaway Finance 4.125%, 01/15/10 1,475 1,493 =============================================================================
DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------------------- INVESTMENT BANKER/BROKER DEALER [15.8%] Citigroup 5.850%, 08/02/16 $ 1,000 $ 978 5.500%, 02/15/17 250 233 Citigroup Funding, FDIC Insured 2.250%, 12/10/12 2,500 2,533 Credit Suisse 5.500%, 08/15/13 1,250 1,350 Goldman Sachs Group 5.625%, 01/15/17 1,760 1,773 Jefferies Group 5.500%, 03/15/16 665 626 JPMorgan Chase, FDIC Insured 6.750%, 02/01/11 500 531 2.125%, 12/26/12 2,500 2,534 Merrill Lynch 6.050%, 05/16/16 2,025 2,029 Morgan Stanley 6.750%, 04/15/11 30 32 Morgan Stanley 5.300%, 03/01/13 1,530 1,603 - ----------------------------------------------------------------------------- TOTAL INVESTMENT BANKER/ BROKER DEALER 14,222 ============================================================================= MULTI-LINE INSURANCE [1.9%] MetLife 7.717%, 02/15/19 1,490 1,754 ============================================================================= PETROLEUM & FUEL PRODUCTS [4.9%] ConocoPhillips 4.750%, 02/01/14 1,400 1,506 ConocoPhillips Canada Funding I 5.625%, 10/15/16 600 657 Duke Capital 5.500%, 03/01/14 625 653 Shell International Finance 3.250%, 09/22/15 1,500 1,510 - ----------------------------------------------------------------------------- TOTAL PETROLEUM & FUEL PRODUCTS 4,326 ============================================================================= RETAIL [3.5%] Home Depot 5.250%, 12/16/13 1,000 1,066 Kohl's 6.300%, 03/01/11 1,000 1,042 Kroger 5.500%, 02/01/13 450 480
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 32 schedule of investments SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- CORPORATE BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000) - ---------------------------------------------------------------------------- Target 5.875%, 07/15/16 $ 500 $ 553 - ---------------------------------------------------------------------------- TOTAL RETAIL 3,141 ============================================================================ TELEPHONES & TELECOMMUNICATIONS [2.3%] Deutsche Telekom International Finance 5.250%, 07/22/13 475 507 New Cingular Wireless Services 8.125%, 05/01/12 400 456 Verizon Communications 5.550%, 02/15/16 1,000 1,083 - ---------------------------------------------------------------------------- TOTAL TELEPHONES & TELECOMMUNICATIONS 2,046 ============================================================================ TOTAL CORPORATE BONDS (Cost $ 75,183) 78,614 ============================================================================ MUNICIPAL BONDS [3.7%] CALIFORNIA [2.5%] California State, City of Industry, Sales Tax Project, RB, NATL-RE 5.000%, 01/01/12 955 969 Irvine Ranch Water District, RB, ETM Callable 09/15/11 @ 100 8.180%, 03/15/14 1,200 1,336 - ---------------------------------------------------------------------------- TOTAL CALIFORNIA 2,305 ============================================================================ WISCONSIN [1.2%] De Pere, Unified School District, GO, FGIC (B) Pre-Refunded @ 100 4.500%, 10/01/11 995 1,070 ============================================================================ TOTAL MUNICIPAL BONDS (Cost $ 3,317) 3,375 ============================================================================ U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS [3.5%] FHLMC REMIC, Ser 2982, ClNB 5.500%, 02/15/29 450 471 FHLMC REMIC, Ser R004, ClA1 5.125%, 12/15/13 519 541
DESCRIPTION FACE AMOUNT (000)/SHARES VALUE (000) - ---------------------------------------------------------------------------- FHLMC REMIC, Ser R015, ClAN 3.750%, 02/15/13 $ 564 $ 573 FNMA REMIC, Ser 2002-56, ClMC 5.500%, 09/25/17 619 660 FNMA REMIC, Ser 2006-B1, ClAB 6.000%, 06/25/16 157 165 FNMA REMIC, Ser 2007-B1, ClBE 5.450%, 12/25/20 697 740 - ---------------------------------------------------------------------------- TOTAL U.S. GOVERNMENT MORTGAGE- BACKED OBLIGATIONS (Cost $ 3,015) 3,150 ============================================================================ U.S.TREASURY OBLIGATION [0.7%] U.S.Treasury Inflation Protection Security 2.000%, 01/15/14 583 604 - --------------------------------------------------------------------------- TOTAL U.S.TREASURY OBLIGATION (Cost $593) 604 =========================================================================== U.S. GOVERNMENT AGENCY OBLIGATION [0.6%] FHLMC 5.500%, 09/15/11 460 500 - --------------------------------------------------------------------------- TOTAL U.S. GOVERNMENT AGENCY OBLIGATION (Cost $482) 500 =========================================================================== CASH EQUIVALENT [2.5%] Goldman Sachs Financial Square Funds - Government Fund, 0.080%* 2,229,995 2,230 - --------------------------------------------------------------------------- TOTAL CASH EQUIVALENT (Cost $2,230) 2,230 =========================================================================== TOTAL INVESTMENTS [98.4%] (Cost $84,820) $ 88,473 ===========================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 33 schedule of investments SEPTEMBER 30, 2009 CORPORATE BOND FUND (CONCLUDED) DESCRIPTION - ---------- PERCENTAGES ARE BASED ON NET ASSETS OF $89,892 ($ THOUSANDS). * THE RATE REPORTED IS THE 7-DAY CURRENT YIELD AS OF SEPTEMBER 30, 2009. (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 SEPTEMBER 30, 2009, THE VALUE OF THESE SECURITIES AMOUNTED TO $2,034 (000), REPRESENTING 2.3% OF THE NET ASSETS OF THE FUND. (B) PRE-REFUNDED SECURITY -- THE MATURITY DATE SHOWN IS THE PRE-REFUNDED DATE. CL -- CLASS ETM -- ESCROWED TO MATURITY FDIC -- FEDERAL DEPOSITARY INSURANCE CORPORATION FGIC -- FINANCIAL GUARANTY INSURANCE COMPANY FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION GO -- GENERAL OBLIGATION NATL-RE -- NATIONAL PUBLIC FINANCE GUARANTEE CORPORATION (FORMERLY MUNICIPAL BOND INSURANCE COMPANY 'MBIA') MTN -- MEDIUM TERM NOTE RB -- REVENUE BOND REMIC -- REAL ESTATE MORTGAGE INVESTMENT CONDUIT SER -- SERIES The following is a summary of the inputs used as of September 30, 2009 in valuing the Fund's investments carried at value ($ Thousands) :
Investments in Securities Level 1 Level 2 Level 3 Total ------- -------- ------- -------- Corporate Bonds $ -- $ 78,614 $ -- $ 78,614 Municipal Bonds -- 3,375 -- 3,375 U.S. Government Mortgage- Backed Obligations -- 3,150 -- 3,150 U.S.Treasury Obligation 604 -- 604 U.S. Government Agency Obligation -- 500 -- 500 Cash Equivalent 2,230 -- -- 2,230 ------- -------- ------- -------- Total Investments in Securities $ 2,230 $ 86,243 $ -- $ 88,473 ======= ======== ======= ========
FOR MORE INFORMATION ON VALUATION INPUTS, SEE NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES IN THE NOTES TO FINANCIAL STATEMENTS. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 34 schedule of investments SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- GOVERNMENT BOND FUND TYPE OF SECURITY WEIGHTINGS (UNAUDITED)*: (BAR CHART) U.S. Government Agency Obligations 55.3% U.S. Government Mortgage-Backed Obligations 43.8% Short-Term Investments 0.9%
- ---------- * Percentages based on total investments.
DESCRIPTION FACE AMOUNT(000) VALUE (000) - ------------------------------------------------------------------------------ U.S. GOVERNMENT AGENCY OBLIGATIONS [55.0%] FHLB 5.250%, 06/18/14 $ 4,000 $ 4,485 3.625%, 10/18/13 6,000 6,326 2.250%, 04/13/12 7,000 7,153 FHLMC 2.000%, 12/22/11 6,000 6,021 FNMA 6.250%, 02/01/11 5,000 5,295 3.000%, 07/28/14 6,000 6,060 3.000%, 09/15/14 245 246 2.900%, 04/07/14 5,710 5,707 - ------------------------------------------------------------------------------ TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (Cost $ 40,875) 41,293 ============================================================================== U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS [43.6%] FFCB REMIC, Ser 2007-IA2, Cl 1 (B) 5.220%, 10/21/13 356 356 FFCB REMIC, Ser 2007-IA3, Cl 1 (B) 5.370%, 09/25/13 2,242 2,262 FFCB REMIC, Ser 2007-IA8, Cl 1 4.650%, 01/21/14 2,063 2,067 FHLMC REMIC, Ser R002, Cl AH 4.750%, 07/15/15 1,067 1,097 FHLMC REMIC, Ser R003, Cl AG 5.125%, 10/15/15 1,358 1,399 FHLMC REMIC, Ser R005, Cl AB 5.500%, 12/15/18 717 749 FHLMC REMIC, Ser R007, Cl AC 5.875%, 05/15/16 1,129 1,165
DESCRIPTION FACE AMOUNT(000) VALUE (000) - ------------------------------------------------------------------------------ FHLMC REMIC, Ser R009, Cl AK 5.750%, 12/15/18 $ 1,422 $ 1,484 FHLMC REMIC, Ser R010, Cl AB 5.500%, 12/15/19 3,218 3,357 FHLMC REMIC, Ser R011, Cl AB 5.500%, 12/15/20 1,412 1,477 FHLMC REMIC, Ser R012, Cl AB 5.500%, 12/15/20 1,143 1,190 FHLMC REMIC, Ser R013, Cl AB 6.000%, 12/15/21 1,446 1,510 FHLMC REMIC, Ser R014, Cl AL 5.500%, 10/15/14 596 610 FHLMC REMIC, Ser R015, Cl AN 3.750%, 02/15/13 1,934 1,967 FHLMC REMIC, Ser R016, Cl AM 5.125%, 06/15/18 3,415 3,566 FNMA, Ser 2005-25, Cl VH 5.000%, 04/25/16 4,357 4,620 FNMA ARM (A) 4.545%, 03/01/34 544 565 FNMA REMIC, Ser 2005-119, Cl DG 5.500%, 01/25/36 322 326 FNMA REMIC, Ser R009, Cl AJ 5.750%, 12/15/18 2,076 2,170 GNMA 8.000%, 08/15/22 11 13 7.500%, 06/15/24 6 6 7.500%, 05/15/26 5 6 7.500%, 04/15/32 31 35 7.000%, 12/15/16 13 14 6.000%, 01/15/29 13 13 GNMA ARM (A) 4.000%, 08/20/35 134 136 2.625%, 04/20/35 582 586 - -------------------------------------------------------------------------------- TOTAL U.S. GOVERNMENT MORTGAGE -BACKED OBLIGATIONS (Cost $31,928) 32,746 ==============================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 35 schedule of investments SEPTEMBER 30, 2009 - --------------------------------------------------------- GOVERNMENT BOND FUND(CONCLUDED)
DESCRIPTION SHARES VALUE (000) - ---------------------------------------------------------- CASH EQUIVALENT [0.9%] Goldman Sachs Financial Square Funds - Government Fund, 0.080%* 648,488 $ 648 - ---------------------------------------------------------- TOTAL CASH EQUIVALENT (Cost $648) 648 ========================================================== TOTAL INVESTMENTS [99.5%] (Cost $73,451) $ 74,687 ==========================================================
- ---------- PERCENTAGES ARE BASED ON NET ASSETS $75,075 OF ($ THOUSANDS). * THE RATE REPORTED IS THE 7-DAY CURRENT YIELD AS OF SEPTEMBER 30, 2009. (A) FLOATING RATE SECURITY-- THE RATE REFLECTED IS THE RATE IN EFFECT ON SEPTEMBER 30, 2009. (B) SECURITY IS FAIR VALUED ARM -- ADJUSTABLE RATE MORTGAGE CL -- CLASS 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 INVESTMENT CONDUIT SER -- SERIES The following is a summary of the inputs used as of September 30, 2009 in valuing the Fund's investments carried at value ($ Thousands):
Investments in Securities Level 1 Level 2 Level 3 Total ------- -------- ------- -------- U.S. Government Agency Obligations $ -- $ 41,293 $ -- $ 41,293 U.S. Government Mortgage- Backed Obligations -- 30,128 2,618 32,746 Cash Equivalent 648 -- -- 648 ------- -------- ------ -------- Total Investments in Securities $ 648 $ 71,421 $ 2,618 $ 74,687 ======= ======== ======= ========
The following is a reconciliation of investments in which significant unob- servable inputs (Level 3) were used in determining value:
Investments in Securities ----------- Beginning balance as of October 1, 2008 $ -- Accrued discounts/premiums -- Realized gain/(loss) -- Change in unrealized appreciation/(depreciation) -- Net purchases/sales -- Net transfer in and/or out of Level 3 2,618 ----------- Ending balance as of September 30, 2009 $ 2,618 ===========
FOR MORE INFORMATION ON VALUATION INPUTS, SEE NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES IN THE NOTES TO FINANCIAL STATEMENTS. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 36 schedule of investments SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT BOND FUND ISSUER INDUSTRY WEIGHTINGS (UNAUDITED)*: (BAR CHART) General Revenue 25.4% Education 17.1% Power 11.9% General Obligation 11.2% Public Facilities 9.9% Water 8.7% Short-Term Investments 4.3% Transportation 3.4% Healthcare 3.2% Industrial Development 3.1% Housing 1.8%
- ---------- * Percentages based on total investments.
DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------------- MUNICIPAL BONDS [95.7%] ARIZONA [2.1%] Arizona State, School Facilities Board, Ser C, COP, FSA Callable 09/01/14 @ 100 5.000%, 09/01/15 $ 750 $ 840 ======================================================================= CALIFORNIA [82.2%] Antelope Valley, Unified High School District, Ser A, GO, NATL-RE Callable 08/01/12 @ 101 5.000%, 08/01/23 250 262 Azusa, Redevelopment Agency, Mortgage-Backed Securities Program, Ser A, RB, ETM (B) 6.875%, 10/01/12 200 234 Banning, Financing Authority, Election Systems Project, RB, XLCA Callable 06/01/17 @ 100 5.000%, 06/01/22 805 825 Bay Area, Infrastructure Financing Authority, State Payment Acceleration Project, RB, NATL-RE FGIC Callable 08/01/14 @ 100 5.000%, 08/01/17 350 365 Bay Area, Infrastructure Financing Authority, State Payment Acceleration Project, RB, XLCA Callable 08/01/11 @ 100 5.000%, 08/01/14 500 516
DESCRIPTION FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------------- Burbank, Public Financing Authority, Golden State Redevelopment Project, Ser A,TA, AMBAC (A) Pre-Refunded @ 100 5.250%, 12/01/13 $ 75 $ 87 Burbank, Public Financing Authority, Golden State Redevelopment Project, Ser A,TA, AMBAC Callable 12/01/13 @ 100 5.250%, 12/01/18 100 103 California State, Department of Water Resources, Power Supply Project, Ser H, RB, FSA Callable 05/01/18 @ 100 5.000%, 05/01/21 750 849 California State, Department of Water Resources,Water Systems Project, Ser J-2, RB 7.000%, 12/01/12 500 594 California State, Department of Water Resources,Water Systems Project, Ser Y, RB, NATL-RE FGIC Callable 06/01/13 @ 100 5.250%, 12/01/19 500 552 California State, Economic Recovery Authority, Ser A, GO, NATL-RE Callable 07/01/14 @ 100 5.000%, 07/01/15 500 558 California State, Educational Facilities Authority, Stanford University Project, Ser T-4, RB 5.000%, 03/15/14 350 403 California State, GO (A) Pre-Refunded @ 100 5.250%, 09/01/10 25 26 California State, GO (A) Pre-Refunded @ 100 5.250%, 09/01/10 10 10 California State, GO (A) Pre-Refunded @ 100 5.250%, 10/01/10 20 21 California State, GO (A) Pre-Refunded @ 100 5.000%, 02/01/12 400 439 California State, GO Callable 02/01/12 @ 100 5.000%, 02/01/18 175 182
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 37 schedule of investments SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000) - ---------------------------------------------------------------------- California State, GO 5.500%, 04/01/19 $ 500 $ 577 California State, Infrastructure & Economic Authority, Bay Area Toll Bridges Project, Ser A, RB, FSA (A) Pre-Refunded @ 100 5.250%, 07/01/13 125 144 California State, Public Works Board Lease, Department of Corrections Project, Ser B, RB, NATL-RE Callable 11/02/09 @ 100 5.000%, 09/01/21 100 98 California State, Public Works Board Lease, Department of Corrections-Administration Project, Ser A, RB, AMBAC Callable 03/01/12 @ 100 5.250%, 03/01/18 155 159 California State, Public Works Board Lease, Department of Mental Health Project, Ser A, RB 5.250%, 06/01/13 200 216 California State, Public Works Board Lease,Various University Projects, Ser A, RB, NATL-RE 5.500%, 06/01/14 250 269 Carlsbad, Public Financing Authority, Municipal Golf Course Project, Ser A, RB, AMBAC 4.500%, 09/01/16 350 400 Castaic Lake,Water Agency,Water Systems Improvement Project, Ser A, COP, NATL-RE 7.000%, 08/01/13 300 358 Corona, Public Financing Authority, City Hall Project, Ser B, RB, NATL-RE Callable 09/01/12 @ 100 5.250%, 09/01/16 350 370 Culver City, Redevelopment Finance Authority,TA, AMBAC 5.500%, 11/01/14 75 77 Dry Creek, Joint Elementary School District, Ser A, GO, FSA (C) 3.000%, 08/01/11 200 193 East Bay, Regional Park District, GO 5.000%, 09/01/13 250 285
DESCRIPTION FACE AMOUNT (000) VALUE (000) - ---------------------------------------------------------------------- Escondido, Union School District, Refunding & Financing Project, COP, NATL-RE 4.750%, 07/01/19 $ 735 $ 822 Fresno, Unified School District, Election 2001 Project, Ser D, GO, NATL-RE Callable 08/01/13 @ 102 5.000%, 08/01/17 200 221 Gilroy, Unified School District, GO, NATL-RE FGIC Callable 08/01/13 @ 100 5.250%, 08/01/19 800 861 Golden State,Tobacco Settlement, Ser A, RB, AMBAC Callable 06/01/10 @ 100 5.000%, 06/01/20 500 501 Golden State,Tobacco Settlement, Ser A-1, RB (A) Pre-Refunded @ 100 6.750%, 06/01/13 870 1,030 Golden State,Tobacco Settlement, Ser B, RB (A) Pre-Refunded @ 100 5.625%, 06/01/13 500 572 Golden State,Tobacco Settlement, Ser B, RB (A) Pre-Refunded @ 100 5.500%, 06/01/13 1,000 1,140 Golden State,Tobacco Settlement, Ser B, RB, FGIC (A) Pre-Refunded @ 100 5.500%, 06/01/13 100 114 Hawthorne, School District, COP, FSA (A) Pre-Refunded @ 101 6.000%, 11/01/10 470 491 Kern, High School District, GO, ETM 7.100%, 08/01/12 290 339 Los Angeles , Ser A, GO, FSA-CR MBIA Callable 09/01/12 @ 100 5.000%, 09/01/20 750 809 Los Angeles County, Metropolitan Transportation Authority, Proposition C, Ser A, RB, NATL-RE Callable 07/01/14 @ 100 5.000%, 07/01/16 200 223
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 38 schedule of investments SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE(000) - ----------------------------------------------------------------------- Los Angeles County, Sanitation Districts Financing Authority, Capital Projects (District #14), Sub-Ser B, RB, NATL-RE FGIC 3.750%, 10/01/14 $ 175 $ 186 Los Angeles, Department of Water & Power, Power Systems Project, Ser A Sub-Ser-Ser A-1, RB, NATL-RE 5.000%, 07/01/12 665 737 Los Angeles, Municipal Improvement Authority, Central Library Project, Ser A, RB, NATL-RE 5.250%, 06/01/12 300 328 Los Angeles, Municipal Improvement Authority, Central Library Project, Ser A, RB, NATL-RE Callable 06/01/12 @ 100 5.500%, 06/01/18 500 530 Los Angeles, Ser A, GO 5.000%, 09/01/15 175 203 Los Angeles, Unified School District, COP, AMBAC 5.000%, 10/01/12 750 813 Los Angeles, Unified School District, GO, NATL-RE 5.750%, 07/01/16 500 600 Los Angeles, Unified School District, Ser A-1, GO, NATL-RE Callable 07/01/14 @ 100 5.000%, 07/01/17 125 137 Los Angeles,Wastewater Systems Authority, Ser A, RB 5.000%, 06/01/14 750 861 North Orange County, Community College District, Ser A, GO, NATL-RE (A) Pre-Refunded @ 101 5.375%, 08/01/12 525 593 Northern California, Power Agency, Hydroelectric Project, Ser A, RB, NATL-RE Callable 11/02/09 @ 100 5.125%, 07/01/23 750 756 Northern California,Transmission Resource Authority, Ore Transmission Project, Ser A, RB, NATL-RE 7.000%, 05/01/13 250 271
DESCRIPTION FACE AMOUNT (000) VALUE(000) - ----------------------------------------------------------------------- Oakley, Civic Center Project, COP 4.000%, 05/01/12 $ 230 $ 242 Orange County, Public Financing Authority, RB, NATL-RE 5.000%, 07/01/17 1,000 1,099 Orange County, Sanitation District, Ser A, COP 3.000%, 02/01/17 500 517 Oxnard, School District, Election 2006 Project, Ser A, GO, CIFG 6.750%, 08/01/11 300 331 Pinole, Redevelopment Agency, Pinole Vista Redevelopment Project,TA, FSA Callable 11/02/09 @ 101 5.250%, 08/01/14 100 101 Redwoods, Community College District, 2004 Election Project, Ser A, GO, NATL-RE Callable 08/01/14 @ 100 5.000%, 08/01/23 420 446 Sacramento, City Financing Authority, EPA Building Project, Ser A, RB, AMBAC Callable 11/02/09 @ 100 4.750%, 05/01/17 525 529 Sacramento, Municipal Utility District, RB, NATL-RE Callable 08/15/13 @ 100 5.000%, 08/15/19 500 532 Sacramento, Municipal Utility District, Ser T, RB, NATL-RE FGIC Callable 05/15/14 @ 100 5.250%, 05/15/22 805 859 San Diego, Public Facilities Financing Authority, Ser B, RB 5.000%, 05/15/14 750 853 San Diego, Unified School District, Election 1998 Project, Ser D, GO, FGIC Callable 07/01/12 @ 100 5.000%, 07/01/27 500 545 San Diego, Unified School District, Election 1998 Project, Ser E, GO, FSA Callable 07/01/13 @ 101 5.250%, 07/01/16 100 113
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 39 schedule of investments SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------------------ San Francisco (City & County), Public Utilities Commission, Ser B, RB 5.000%, 11/01/19 $ 750 $ 881 San Francisco, Bay Area Transit Financing Authority, Ser A, RB, NATL-RE Callable 07/01/15 @ 100 5.000%, 07/01/24 550 590 San Jose, Unified School District, Ser A, GO, FSA Callable 08/01/11 @ 101 5.375%, 08/01/19 150 160 San Ysidro, School District, Election 1997 Project, Ser C, GO, NATL-RE 6.000%, 08/01/11 205 223 Santa Margarita, Dana Point Authority, Ser A, RB, AMBAC Callable 08/01/14 @ 100 5.000%, 08/01/15 165 181 Solano County, COP, NATL-RE (A) Pre-Refunded @ 100 5.250%, 11/01/12 100 113 Southern California, Metropolitan Water District Authority, Ser A, RB 5.750%, 07/01/21 280 338 Southern Kern, Unified School District, Ser A, GO, NATL-RE FGIC Callable 11/01/13 @ 100 4.500%, 11/01/18 220 231 Tamalpais, Unified High School District, GO, NATL-RE Callable 08/01/11 @ 101 4.875%, 08/01/17 100 104 University of California, Multiple Purpose Projects, Ser Q, RB, FSA Callable 09/01/11 @ 101 5.000%, 09/01/22 500 529 University of California, Ser B, RB, FSA Callable 05/15/13 @ 101 5.000%, 05/15/20 750 816 University of California, UCLA Medical Center Project, Ser B, RB, AMBAC (A) Pre-Refunded @ 100 5.500%, 05/15/14 500 587 --------------------------------------------------------------------- TOTAL CALIFORNIA 33,230 =====================================================================
DESCRIPTION FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------------------ ILLINOIS [0.5%] Illinois State, Civic Center Authority, RB, FSA Callable 12/15/10 @ 100 5.500%, 12/15/14 $ 200 $ 208 ===================================================================== MISSOURI [0.5%] St Louis, Parking Facilities Authority, Downtown Parking Facilities Project, Sub-Ser A, RB (A) Pre-Refunded @ 100 6.000%, 02/01/12 200 221 ===================================================================== NEW JERSEY [0.9%] New Jersey State,Turnpike Authority, Ser C, RB, NATL-RE, ETM 6.500%, 01/01/16 315 374 ===================================================================== NEW MEXICO [1.0%] Santa Fe, Educational Facilities Authority, College of Santa Fe Project, RB (A) Pre-Refunded @ 100 5.750%, 10/01/14 350 415 ===================================================================== NEW YORK [2.6%] New York City Housing Development, Ser F, RB Callable 05/01/11 @ 100 1.950%, 11/01/12 500 500 New York State, Local Assistance Correction Authority, Ser E, RB 6.000%, 04/01/14 500 564 --------------------------------------------------------------------- TOTAL NEW YORK 1,064 ===================================================================== SOUTH CAROLINA [2.1%] Columbia,Tourism Development Fee Pledge Project, COP, AMBAC Callable 06/01/13 @ 100 5.250%, 06/01/16 350 379 South Carolina, Jobs & Economic Development Authority, Palmetto Health Project, Ser C, RB (A) Pre-Refunded @ 100 6.875%, 08/01/13 400 475 --------------------------------------------------------------------- TOTAL SOUTH CAROLINA 854 =====================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 40 schedule of investments SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT BOND FUND (CONCLUDED)
DESCRIPTION FACE AMOUNT (000)/SHARES VALUE (000) - ------------------------------------------------------------------------------ TEXAS [0.3%] San Angelo,Waterworks & Sewer System Authority, Refunding & Improvements Projects, RB, FSA Callable 04/01/11 @ 100 5.250%, 04/01/19 $ 100 $ 104 ============================================================================== WASHINGTON [0.9%] King County, NJB Properties Project, Ser A, RB 5.000%, 12/01/14 325 374 ============================================================================== WEST VIRGINIA [1.3%] West Virginia State, Economic Development Authority, Correctional Juvenile Project, Ser A, RB, NATL-RE Callable 06/01/12 @ 101 5.500%, 06/01/17 500 529 ============================================================================== PUERTO RICO [1.3%] Puerto Rico Sales Tax Financing, Sub-Ser A, RB 4.000%, 08/01/16 500 545 - ------------------------------------------------------------------------------ TOTAL MUNICIPAL BONDS (Cost $37,326) 38,758 ============================================================================== CASH EQUIVALENT [4.3%] Federated California Municipal Money Market Fund, Cl I, 0.210%* 1,723,803 1,724 - ------------------------------------------------------------------------------ TOTAL CASH EQUIVALENT (Cost $1,724) 1,724 ============================================================================== TOTAL INVESTMENTS [100.0%] (Cost $39,050) $ 40,482 ==============================================================================
DESCRIPTION - ------------------------------------------------------------------------------ PERCENTAGES ARE BASED ON NET ASSETS OF $40,483 ($ THOUSANDS). * THE RATE REPORTED IS THE 7-DAY CURRENT YIELD AS OF SEPTEMBER 30, 2009. (A) PRE-REFUNDED SECURITY -- THE MATURITY DATE SHOWN IS THE PRE-REFUNDED DATE. (B) SECURITIES ARE COLLATERALIZED UNDER AN AGREEMENT FROM FNMA. (C) FLOATING RATE SECURITY -- THE RATE REFLECTED IS THE RATE IN EFFECT ON SEPTEMBER 30, 2009. AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY CIFG -- CDC IXIS FINANCIAL GUARANTEE CL -- CLASS COP -- CERTIFICATE OF PARTICIPATION ETM -- ESCROW TO MATURITY FGIC -- FINANCIAL GUARANTEE INSURANCE COMPANY FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION FSA -- FINANCIAL SECURITY ASSISTANCE FSA-CR -- SECURITY IS SECONDARILY GUARANTEED BY FSA GO -- GENERAL OBLIGATION MBIA -- MUNICIPAL BOND INSURANCE ASSOCIATION NATL-RE -- NATIONAL PUBLIC FINANCE GUARANTEE CORPORATION (FORMERLY MBIA-IL) RB -- REVENUE BOND SER -- SERIES TA -- TAX ALLOCATION XLCA -- XL CAPITAL ASSURANCE The following is a summary of the inputs used as of September 30, 2009 in valuing the Fund's investments carried at value ($ Thousands):
Investments in Securities Level 1 Level 2 Level 3 Total ------- ------- ------- ------- Municipal Bonds $ -- $38,758 $ -- $38,758 Cash Equivalent 1,724 -- -- 1,724 ------- ------- ------- ------- Total Investments in Securities $ 1,724 $38,758 $ -- $40,482 ======= ======= ======= =======
FOR MORE INFORMATION ON VALUATION INPUTS, SEE NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES IN THE NOTES TO FINANCIAL STATEMENTS. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 41 schedule of investments September 30, 2009 - -------------------------------------------------------------------------------- HIGH YIELD BOND FUND (BAR CHART) ISSUER INDUSTRY WEIGHTINGS (UNAUDITED)*: Industrials 73.2% Financials 9.6% Utilities 8.0% Telecommunication Services 5.6% Transportation 2.3% Common Stock 0.7% Short-Term Investments 0.6% Preferred Stock 0.0%
- ---------- * Percentages based on total investments
DESCRIPTION FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------------- CORPORATE BONDS [95.9%] Advertising Agencies [0.1%] Interpublic Group (A) 10.000%, 07/15/17 $ 50 $ 54 =================================================================== AEROSPACE & DEFENSE [1.2%] Esterline Technologies 7.750%, 06/15/13 100 99 Global Aviation Holdings (A) 14.000%, 08/15/13 150 149 L-3 Communications 5.875%, 01/15/15 200 199 - ------------------------------------------------------------------- TOTAL AEROSPACE & DEFENSE 447 =================================================================== AIRLINES [0.3%] DAE Aviation Holdings (A) 11.250%, 08/01/15 150 117 =================================================================== AUTO RENT & LEASE [0.9%] Avis Budget Car Rental 7.750%, 05/15/16 100 87 H&E Equipment Services 8.375%, 07/15/16 100 91 Hertz 10.500%, 01/01/16 150 156 - ------------------------------------------------------------------- TOTAL AUTO RENT & LEASE 334 =================================================================== AUTOMOTIVE [0.2%] UCI Holdco (B) 9.250%, 12/15/13 202 82 =================================================================== AUTOPARTS [0.5%] Accuride (C) 8.500%, 02/01/15 150 87 Asbury Automotive Group 7.625%, 03/15/17 100 89 - ------------------------------------------------------------------- TOTAL AUTOPARTS 176 ===================================================================
DESCRIPTION FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------------- BEAUTY PRODUCTS [0.3%] Chattem 7.000%, 03/01/14 $100 $ 101 =================================================================== BROADCASTING & CABLE [3.2%] Allbritton Communications 7.750%, 12/15/12 72 68 Atlantic Broadband Finance 9.375%, 01/15/14 100 97 Barrington Broadcasting Group 10.500%, 08/15/14 100 57 Bonten Media Acquisition (A) 9.000%, 06/01/15 157 52 Charter Communications Holdings II (C) 10.250%, 09/15/10 300 337 CSC Holdings 7.625%, 07/15/18 100 101 Fisher Communications 8.625%, 09/15/14 150 139 Local TV Finance (A) 9.250%, 06/15/15 105 36 Newport Television (A) 13.000%, 03/15/17 107 37 Nexstar Finance Holdings (D) 11.375%, 04/01/13 128 54 Quebecor Media 7.750%, 03/15/16 75 74 Univision Communications (A) 12.000%, 07/01/14 81 87 - ------------------------------------------------------------------- TOTAL BROADCASTING & CABLE 1,139 =================================================================== BUILDING & CONSTRUCTION [1.0%] Esco (A) 8.625%, 12/15/13 50 49 Interline Brands 8.125%, 06/15/14 50 49 International Utility Structures (C) (F) 10.750%, 02/01/08 100 1 USG (A) 9.750%, 08/01/14 250 261 - ------------------------------------------------------------------- TOTAL BUILDING & CONSTRUCTION 360 =================================================================== BUSINESS SERVICES [0.5%] FTI Consulting 7.625%, 06/15/13 50 50 Geo Group 8.250%, 07/15/13 150 152 - ------------------------------------------------------------------- TOTAL BUSINESS SERVICES 202 ===================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 42 schedule of investments SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- HIGH YIELD BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------------------------ CHEMICALS [2.1%] Innophos 8.875%, 08/15/14 $ 100 $ 101 Momentive Performance Materials 9.750%, 12/01/14 100 78 Nalco 8.875%, 11/15/13 150 154 Nova Chemicals 6.500%, 01/15/12 150 147 Polymer Holdings (D) (E) (F) 18.929%, 07/15/14 250 184 Terra Capital, Ser B 7.000%, 02/01/17 100 104 - ------------------------------------------------------------------------------ TOTAL CHEMICALS 768 ============================================================================== CIRCUIT BOARDS [0.1%] Viasystems 10.500%, 01/15/11 50 49 ============================================================================== COMMERCIAL SERVICES [1.5%] ARAMARK 8.500%, 02/01/15 150 151 DI Finance 9.500%, 02/15/13 150 153 Iron Mountain 8.750%, 07/15/18 150 156 Tube City IMS 9.750%, 02/01/15 100 81 - ------------------------------------------------------------------------------ TOTAL COMMERCIAL SERVICES 541 ============================================================================== COMPUTER SYSTEM DESIGN & SERVICES [2.2%] Activant Solutions 9.500%, 05/01/16 100 89 Compucom Systems (A) 12.500%, 10/01/15 100 93 Stream Global Services (A) 11.250%, 10/01/14 350 334 Terremark Worldwide (A) 12.000%, 06/15/17 200 218 Unisys (A) 14.250%, 09/15/15 32 33 - ------------------------------------------------------------------------------ TOTAL COMPUTER SYSTEM Design & Services 767 ============================================================================== CONGLOMERATE [0.3%] KAR Holdings 8.750%, 05/01/14 100 99 ==============================================================================
DESCRIPTION FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------------------------ CONSUMER PRODUCTS & SERVICES [3.4%] Central Garden & Pet 9.125%, 02/01/13 $ 100 $ 101 Jarden 7.500%, 05/01/17 75 73 Johnsondiversey, Ser B 9.625%, 05/15/12 150 152 Johnsondiversey Holdings (D) 10.670%, 05/15/13 200 192 Libbey Glass (B) 8.260%, 06/01/11 100 90 MSX International (A) 12.500%, 04/01/12 100 45 Sealy Mattress 8.250%, 06/15/14 200 185 Sotheby's 7.750%, 06/15/15 100 86 Southern States Cooperative (A) 11.000%, 11/01/11 200 200 Steinway Musical Instruments (A) 7.000%, 03/01/14 100 85 Yankee Acquisition, Ser B 9.750%, 02/15/17 50 46 - ------------------------------------------------------------------------------ TOTAL CONSUMER PRODUCTS & SERVICES 1,255 ============================================================================== CONTAINERS & PACKAGING [1.0%] Exopack Holding 11.250%, 02/01/14 100 99 Intertape Polymer US (F) 8.500%, 08/01/14 100 77 Solo Cup 8.500%, 02/15/14 200 191 - ------------------------------------------------------------------------------ TOTAL CONTAINERS & PACKAGING 367 ============================================================================== DATA PROCESSING/MGMT [1.0%] First Data 9.875%, 09/24/15 400 369 ============================================================================== DISTRIBUTION/WHOLESALE [1.0%] VWR Funding 10.250%, 07/15/15 400 365 ============================================================================== DIVERSIFIED OPERATIONS [0.6%] Trinity Industries 6.500%, 03/15/14 200 198 ==============================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 43 schedule of investments SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- HIGH YIELD BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000) - --------------------------------------------------------------------- E-COMMERCE/PRODUCTS [0.7%] Vitamin Shoppe Industries (B) 7.940%, 11/15/12 $ 250 $ 250 ===================================================================== EDUCATIONAL SERVICES [0.3%] Education Management 8.750%, 06/01/14 100 106 ===================================================================== ELECTRIC UTILITIES [5.1%] AES 9.375%, 09/15/10 100 103 8.000%, 10/15/17 100 101 8.000%, 06/01/20 50 50 CMS Energy 6.875%, 12/15/15 150 151 CMS Energy 8.750%, 06/15/19 50 54 Edison Mission Energy 7.200%, 05/15/19 150 121 7.000%, 05/15/17 150 125 Energy Future Holdings 10.875%, 11/01/17 465 351 ESI Tractebel Acquisition, Ser B 7.990%, 12/30/11 39 39 KCP&L Greater Missouri Operations 7.950%, 02/01/11 150 158 Mirant North America 7.375%, 12/31/13 150 149 NRG Energy 7.375%, 02/01/16 100 97 PNM Resources 9.250%, 05/15/15 100 101 RRI Energy 7.625%, 06/15/14 200 196 Sierra Pacific Resources 8.625%, 03/15/14 70 72 - --------------------------------------------------------------------- TOTAL ELECTRIC UTILITIES 1,868 ===================================================================== ENTERTAINMENT & GAMING [10.0%] AMC Entertainment 11.000%, 02/01/16 100 107 CCM Merger (A) 8.000%, 08/01/13 175 144 Choctaw Resort Development Enterprise (A) 7.250%, 11/15/19 182 120 Chukchansi Economic Development Authority (A) 8.000%, 11/15/13 250 198
DESCRIPTION FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------------------------ Circus & Eldorado Joint Venture/Silver Legacy Capital 10.125%, 03/01/12 $ 150 $ 130 Gaylord Entertainment 8.000%, 11/15/13 100 102 Harrah's Operating 10.750%, 02/01/16 250 202 Harrahs Operating Escrow (A) 11.250%, 06/01/17 250 257 Indianapolis Downs & Capital (A) 11.000%, 11/01/12 100 59 Inn of the Mountain Gods Resort & Casino (C) 12.000%, 11/15/10 150 69 Isle of Capri Casinos 7.000%, 03/01/14 112 100 Jacobs Entertainment 9.750%, 06/15/14 75 68 Mashantucket Western Pequot Tribe (A) 8.500%, 11/15/15 170 62 MGM Mirage 8.500%, 09/15/10 200 198 6.750%, 09/01/12 100 84 Mohegan Tribal Gaming Authority 7.125%, 08/15/14 100 71 Penn National Gaming (A) 8.750%, 08/15/19 250 250 River Rock Entertainment Authority 9.750%, 11/01/11 300 276 San Pasqual Casino (A) 8.000%, 09/15/13 100 96 Scientific Games 6.250%, 12/15/12 100 97 Seminole Hard Rock Entertainment (A) (B) 2.799%, 03/15/14 100 80 Seneca Gaming 7.250%, 05/01/12 200 185 Shingle Springs Tribal Gaming Authority (A) 9.375%, 06/15/15 100 72 Snoqualmie Entertainment Authority (A) (B) 4.680%, 02/01/14 100 49 Speedway Motorsports 6.750%, 06/01/13 100 99 Tunica-Biloxi Gaming Authority (A) 9.000%, 11/15/15 125 113
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 44 schedule of investments SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- HIGH YIELD BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------------------- VAIL RESORTS 6.750%, 02/15/14 $ 100 $ 99 Waterford Gaming (A) 8.625%, 09/15/14 77 44 Wynn Las Vegas Capital 6.625%, 12/01/14 175 167 - ------------------------------------------------------------------------- TOTAL ENTERTAINMENT & GAMING 3,598 ========================================================================= Financial Services [1.7%] GMAC 6.750%, 12/01/14 425 358 Pinnacle Foods Finance 9.250%, 04/01/15 250 254 - ------------------------------------------------------------------------- TOTAL FINANCIAL SERVICES 612 ========================================================================= Food, Beverage & Tobacco [2.1%] Beverages & More (A) 9.250%, 03/01/12 100 94 Constellation Brands 8.375%, 12/15/14 150 156 Leiner Health Products (C) 11.000%, 06/01/12 100 -- Le-Nature's (A) (C) (F) 9.000%, 06/15/13 150 8 National Beef Packing 10.500%, 08/01/11 100 99 Smithfield Foods (A) 10.000%, 07/15/14 243 255 7.000%, 08/01/11 150 144 - ------------------------------------------------------------------------- TOTAL FOOD, BEVERAGE & TOBACCO 756 ========================================================================= GAS/NATURAL GAS [0.4%] El Paso 7.000%, 06/15/17 150 147 ========================================================================= HOTELS AND MOTELS [0.4%] Wyndham Worldwide 6.000%, 12/01/16 150 135 ========================================================================= INSURANCE [2.8%] National Life Insurance (A) 10.500%, 09/15/39 150 153 Torchmark 9.250%, 06/15/19 550 618 USI Holdings (A) (B) 9.750%, 05/15/15 150 133 4.315%, 11/15/14 125 104 - ------------------------------------------------------------------------- TOTAL INSURANCE 1,008 =========================================================================
DESCRIPTION FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------------------- INVESTMENT BANKER/BROKER DEALER [1.1%] Nuveen Investments (A) (F) 10.500%, 11/15/15 $ 450 $ 389 ======================================================================== INVESTMENT COMPANIES [0.9%] Allied Capital (F) 6.625%, 07/15/11 400 329 ======================================================================== MACHINERY [3.2%] Baldor Electric 8.625%, 02/15/17 125 127 Case New Holland (A) 7.750%, 09/01/13 140 139 7.125%, 03/01/14 100 98 CPM Holdings (A) 10.625%, 09/01/14 130 134 Douglas Dynamics (A) 7.750%, 01/15/12 440 379 Terex 7.375%, 01/15/14 100 99 Terex 8.000%, 11/15/17 75 69 Trimas 9.875%, 06/15/12 115 103 - ------------------------------------------------------------------------- TOTAL MACHINERY 1,148 ========================================================================= MEDICAL PRODUCTS & SERVICES [3.5%] Apria Healthcare Group (A) 12.375%, 11/01/14 150 160 Bausch & Lomb 9.875%, 11/01/15 250 262 Bio-Rad Laboratories 7.500%, 08/15/13 100 102 Community Health Systems 8.875%, 07/15/15 150 154 HCA 9.250%, 11/15/16 50 52 5.750%, 03/15/14 100 88 Omnicare 6.750%, 12/15/13 150 145 Select Medical 7.625%, 02/01/15 186 174 Vanguard Health Holding II 9.000%, 10/01/14 100 102 - ------------------------------------------------------------------------- TOTAL MEDICAL PRODUCTS & SERVICES 1,239 ========================================================================= Metals & Mining [0.7%] Noranda Aluminium Acquisition (B) 5.413%, 05/15/15 156 109
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 45 schedule of investments SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- HIGH YIELD BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT(000) VALUE (000) - -------------------------------------------------------------------------- Novelis 7.250%, 02/15/15 $ 150 $ 130 - -------------------------------------------------------------------------- TOTAL METALS & MINING 239 ========================================================================== MISCELLANEOUS BUSINESS SERVICES [1.4%] Affinion Group 11.500%, 10/15/15 100 103 Carriage Services 7.875%, 01/15/15 200 188 Lamar Media 6.625%, 08/15/15 100 91 MCBC Holdings (A) 8.051%, 10/15/14 50 9 Stewart Enterprises 6.250%, 02/15/13 100 97 - -------------------------------------------------------------------------- TOTAL MISCELLANEOUS BUSINESS SERVICES 488 ========================================================================== MISCELLANEOUS MANUFACTURING [3.2%] AGY Holding 11.000%, 11/15/14 100 80 Altra Industrial Motion 9.000%, 12/01/11 100 102 Buffalo Thunder Development Authority (A) (C) 9.375%, 12/15/14 75 13 CEVA Group (A) 11.625%, 10/01/16 250 243 Coleman Cable 9.875%, 10/01/12 250 231 Dresser-Rand Group 7.375%, 11/01/14 133 130 General Cable 7.125%, 04/01/17 100 98 Koppers Holdings (D) 15.040%, 11/15/09 250 251 - -------------------------------------------------------------------------- TOTAL MISCELLANEOUS MANUFACTURING 1,148 ========================================================================== PAPER & RELATED PRODUCTS [1.0%] Appleton Papers, Ser B 9.750%, 06/15/14 100 45 Domtar 7.125%, 08/15/15 150 147 Norampac Industries 6.750%, 06/01/13 100 97 Verso Paper Holdings 9.125%, 08/01/14 100 74 - -------------------------------------------------------------------------- TOTAL PAPER & RELATED PRODUCTS 363 ==========================================================================
DESCRIPTION FACE AMOUNT(000) VALUE (000) - -------------------------------------------------------------------------- PETROLEUM & FUEL PRODUCTS [11.7%] Atlas Energy Operating 12.125%, 08/01/17 $ 200 $ 216 Atlas Pipeline Partners 8.125%, 12/15/15 200 161 Bill Barrett 9.875%, 07/15/16 250 263 Chesapeake Energy 6.875%, 01/15/16 100 95 Chesapeake Energy 6.250%, 01/15/18 100 90 Cimarex Energy 7.125%, 05/01/17 250 233 Clayton Williams Energy 7.750%, 08/01/13 150 129 Comstock Resources 6.875%, 03/01/12 150 149 Copano Energy 7.750%, 06/01/18 100 95 Dynegy Holdings 7.750%, 06/01/19 100 85 Frontier Oil 6.625%, 10/01/11 150 150 Helix Energy Solutions Group (A) 9.500%, 01/15/16 100 100 Linn Energy 9.875%, 07/01/18 100 102 MarkWest Energy Partners, Ser B 8.500%, 07/15/16 150 149 McMoRan Exploration 11.875%, 11/15/14 400 400 Newfield Exploration 6.625%, 09/01/14 150 147 Parker Drilling 9.625%, 10/01/13 150 149 Petroplus Finance (A) 7.000%, 05/01/17 150 137 Pioneer Natural Resources 5.875%, 07/15/16 100 92 Plains Exploration & Production 7.750%, 06/15/15 150 149 7.625%, 06/01/18 100 98 Southern Star Central 6.750%, 03/01/16 100 95 Southwestern Energy 7.500%, 02/01/18 100 101 Stone Energy 8.250%, 12/15/11 531 499 Swift Energy 7.625%, 07/15/11 100 99
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 46 schedule of investments SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- HIGH YIELD BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------------------- Tesoro 6.625%, 11/01/15 $ 100 $ 92 Williams Partners 7.250%, 02/01/17 100 98 - ------------------------------------------------------------------------- TOTAL PETROLEUM & FUEL PRODUCTS 4,173 ========================================================================= PRINTING & PUBLISHING [1.2%] MediMedia USA (A) 11.375%, 11/15/14 50 36 Scholastic 5.000%, 04/15/13 300 257 Sheridan Group 10.250%, 08/15/11 150 126 - ------------------------------------------------------------------------- TOTAL PRINTING & PUBLISHING 419 ========================================================================= RADIO [1.0%] Cleveland Unlimited (A) (B) 12.000%, 12/15/10 250 247 XM Satellite Radio Holdings (A) 13.000%, 08/01/13 100 98 - ------------------------------------------------------------------------- TOTAL RADIO 345 ========================================================================= REAL ESTATE INVESTMENT TRUSTS [0.7%] Host Marriott, Ser O 6.375%, 03/15/15 150 142 Ventas Realty 6.500%, 06/01/16 100 97 - ------------------------------------------------------------------------- TOTAL REAL ESTATE INVESTMENT TRUSTS 239 ========================================================================= RESEARCH AND DEVELOPMENT [1.0%] Catalent Pharma Solutions 9.500%, 04/15/15 400 348 - ------------------------------------------------------------------------- RETAIL [7.3%] ACE Hardware (A) (F) 9.125%, 06/01/16 100 105 Brunswick (A) 11.250%, 11/01/16 245 267 Claire's Stores 9.625%, 06/01/15 110 66 Dave & Buster's 11.250%, 03/15/14 200 201 Duane Reade (A) 11.750%, 08/01/15 275 289 9.750%, 08/01/11 125 125
DESCRIPTION FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------------------- Ferrellgas Partners 6.750%, 05/01/14 $ 100 $ 95 Group 1 Automotive 8.250%, 08/15/13 100 99 Inergy 8.250%, 03/01/16 200 201 Landry's Restaurants 14.000%, 08/15/11 300 301 Leslie's Poolmart 7.750%, 02/01/13 175 175 Penske Auto Group 7.750%, 12/15/16 100 92 Rare Restaurant Group (A) 9.250%, 05/15/14 100 64 Sally Holdings 10.500%, 11/15/16 200 208 Sbarro 10.375%, 02/01/15 50 39 Sonic Automotive 8.625%, 08/15/13 70 67 True Temper Sports (C) 8.375%, 09/15/11 150 1 Wendy's (A) 10.000%, 07/15/16 200 212 - ------------------------------------------------------------------------- TOTAL RETAIL 2,607 ========================================================================= RUBBER & PLASTIC [0.5%] Cooper Tire & Rubber 8.000%, 12/15/19 100 90 Goodyear Tire & Rubber 9.000%, 07/01/15 98 102 - ------------------------------------------------------------------------- TOTAL RUBBER & PLASTIC 192 ========================================================================= SEMI-CONDUCTORS [0.5%] Amkor Technology 9.250%, 06/01/16 100 103 Sensata Technologies 8.000%, 05/01/14 100 93 - ------------------------------------------------------------------------- TOTAL SEMI-CONDUCTORS 196 ========================================================================= STEEL & STEEL WORKS [0.3%] Ryerson 12.000%, 11/01/15 75 72 Steel Dynamics 7.375%, 11/01/12 50 51 - ------------------------------------------------------------------------- TOTAL STEEL & STEEL WORKS 123 - -------------------------------------------------------------------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 47 schedule of investments SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- HIGH YIELD BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000) - --------------------------------------------------------------------------- TELEPHONES & TELECOMMUNICATIONS [7.5%] Broadview Networks Holdings 11.375%, 09/01/12 $ 100 $ 92 Centennial Communications 10.125%, 06/15/13 100 103 Cincinnati Bell 8.375%, 01/15/14 150 151 Citizens Communications 7.125%, 03/15/19 150 141 Cricket Communications 9.375%, 11/01/14 250 254 Fairpoint Communications 13.125%, 04/02/18 104 13 GeoEye (A) 9.625%, 10/01/15 250 253 MetroPCS Wireless 9.250%, 11/01/14 350 358 Nextel Communications 6.875%, 10/31/13 200 185 Qwest 7.625%, 06/15/15 289 292 Radio One 8.875%, 07/01/11 100 53 Sprint Capital 8.375%, 03/15/12 150 156 Telcordia Technologies (A) (B) 4.259%, 07/15/12 400 345 Time Warner Telecom Holdings 9.250%, 02/15/14 100 103 Virgin Media Finance 9.125%, 08/15/16 150 154 West 11.000%, 10/15/16 50 50 - --------------------------------------------------------------------------- TOTAL TELEPHONES & TELECOMMUNICATIONS 2,703 =========================================================================== TRANSPORTATION SERVICES [3.8%] Delta Airlines (A) 11.750%, 03/15/15 280 261 Kansas City Southern Railway 8.000%, 06/01/15 100 102 Navios Maritime Holdings 9.500%, 12/15/14 100 94 Pegasus Solutions (A) 10.500%, 04/15/15 100 32 Royal Caribbean Cruises 6.875%, 12/01/13 100 93 Ship Finance International 8.500%, 12/15/13 200 191 Stena 7.000%, 12/01/16 150 128
FACE AMOUNT DESCRIPTION (000)/SHARES VALUE (000) - --------------------------------------------------------------------------- Susser Holdings 10.625%, 12/15/13 $ 160 $ 165 Swift Transportation (A) (B) 8.190%, 05/15/15 200 142 Travelport 9.875%, 09/01/14 170 165 - --------------------------------------------------------------------------- TOTAL TRANSPORTATION SERVICES 1,373 =========================================================================== WASTE DISPOSAL [0.5%] Waste Services 9.500%, 04/15/14 100 99 WCA Waste 9.250%, 06/15/14 100 96 - --------------------------------------------------------------------------- TOTAL WASTE DISPOSAL 195 =========================================================================== TOTAL CORPORATE BONDS (Cost $36,526) 34,526 =========================================================================== COMMON STOCK [0.7%] BROADCASTING & CABLE [0.0%] Olympus* (E) (F) 8,500 9 =========================================================================== BUILDING & CONSTRUCTION SUPPLIES [0.0%] Dayton Superior* 149 -- ============================================================================ CHEMICALS [0.6%] Georgia Gulf* (E) (F) 7,095 212 =========================================================================== IT SERVICES [0.1%] Unisys* 10,447 28 =========================================================================== PAPER & FOREST PRODUCTS [0.0%] Tembec* 5,625 5 =========================================================================== TOTAL COMMON STOCK (Cost $320) 254 =========================================================================== PREFERRED STOCK [0.0%] CHEMICALS [0.0%] Georgia Gulf* (E) (F) 317 10 =========================================================================== TOTAL PREFERRED STOCK (Cost $6) 10 ===========================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 48 schedule of investments SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- HIGH YIELD BOND FUND (CONCLUDED)
DESCRIPTION FACE AMOUNT(000)/SHARES VALUE (000) - ------------------------------------------------------------------------------- CONVERTIBLE BONDS [0.5%] PETROLEUM & FUEL PRODUCTS [0.3%] Bill Barrett 5.000%, 03/15/28 $ 100 $ 94 ============================================================================== RETAIL [0.2%] Pantry 3.000%, 11/15/12 100 82 ============================================================================== TOTAL CONVERTIBLE BONDS (Cost $171) 176 ============================================================================== CASH EQUIVALENTS [0.7%] Evergreen Select Money Market Fund, Institutional Class, 0.130%** 116,357 116 Fidelity Institutional Domestic Money Market Portfolio, Cl I, 0.270%** 116,357 117 ============================================================================== TOTAL CASH EQUIVALENTS (Cost $233) 233 ============================================================================== TOTAL INVESTMENTS [97.8%] (Cost $37,256) $ 35,199 ==============================================================================
- ---------- PERCENTAGES ARE BASED ON NET ASSETS OF $35,992 ($ THOUSANDS). * NON-INCOME PRODUCING SECURITY. ** THE RATE REPORTED IS THE 7-DAY CURRENT YIELD AS OF SEPTEMBER 30, 2009. (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 SEPTEMBER 30, 2009, THE VALUE OF THESE SECURITIES AMOUNTED TO $8,562(000), REPRESENTING 23.7% OF THE NET ASSETS OF THE FUND. (B) FLOATING RATE SECURITY -- THE RATE REFLECTED IS THE RATE IN EFFECT ON SEPTEMBER 30, 2009. (C) IN DEFAULT ON INTEREST PAYMENTS. RATE SHOWN REPRESENTS THE LAST COUPON RATE PRIOR TO DEFAULT. (D) STEP BOND -- THE RATE REPORTED IS THE RATE IN EFFECT ON SEPTEMBER 30, 2009.THE COUPON ON A STEP BOND CHANGES ON A SPECIFIC DATE. (E) SECURITY IS FAIR VALUED. (F) SECURITY IS CONSIDERED ILLIQUID. CL -- CLASS MTN -- MEDIUM TERM NOTE SER -- SERIES AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. - -------------------------------------------------------------------------------- The following is a summary of the inputs used as of September 30, 2009 in valuing the Fund's investments carried at value ($ Thousands):
Investments in Securities Level 1 Level 2 Level 3 Total --------- -------- ------- -------- Corporate Bonds $ -- $ 34,333 $ 193 $ 34,526 Common Stock 33 212 9 254 Preferred Stock -- 10 -- 10 Convertible Bonds -- 176 -- 176 Cash Equivalents 233 -- -- 233 --------- -------- ------- -------- Total Investments in Securities $ 266 $ 34,731 $ 202 $ 35,199 ========= ======== ======= ========
The following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining value.
Investment in Investments Corporate in Common Bonds Stock ($Thousands) ($Thousands) ------------- ------------- Beginning balance as of October 1, $ 145 $ 9 2008 Accrued discounts/premiums 8 -- Realized gain/(loss) -- -- Change in unrealized appreciation/ (depreciation) 31 -- Net purchases/sales -- -- Net transfer in and/or out of Level 3 9 -- ------------- ------------- Ending balance as of September 30, 2009 $ 193 $ 9 ============= =============
FOR MORE INFORMATION ON VALUATION INPUTS, SEE NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES IN THE NOTES TO FINANCIAL STATEMENTS. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 49 SCHEDULE OF INVESTMENTS SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- PRIME MONEY MARKET FUND TYPE OF SECURITY WEIGHTINGS (UNAUDITED)*: (BAR CHART) Commercial Paper 53.9% Short-Term Investments 24.7% Certificates of Deposit 12.7% U.S. Government Agency Obligations 7.7% Corporate Obligations 1.0%
- ---------- * Percentages are based on total investments.
DESCRIPTION FACE AMOUNT (000) VALUE (000) - --------------------------------------------------------------------- COMMERCIAL PAPER (A) [54.0%] BANKS [20.7%] Abbey National North America 0.155%, 10/08/09 $ 25,000 $ 24,999 Allied Irish Banks North America (B) 0.570%, 10/01/09 25,000 25,000 ANZ National Int'l (B) 0.310%, 01/04/10 25,000 24,979 Bank of Ireland (B) 0.500%, 10/08/09 25,000 24,997 Bank of Nova Scotia 0.220%, 10/16/09 25,000 24,998 BNZ International Funding (B) 0.300%, 01/20/10 25,000 24,977 Erste Finance Delaware (B) 0.290%, 10/19/09 25,000 24,996 KBC Financial Products International (B) 0.450%, 10/05/09 25,000 24,999 Korea Development Bank 1.708%, 11/03/09 25,000 24,961 Lloyds TSB Bank 0.190%, 10/09/09 25,000 24,999 Societe Generale North America 0.451%, 10/02/09 25,000 25,000 Standard Chartered Bank (B) 0.965%, 12/14/09 25,000 24,951 Toronto-Dominion Holdings USA (B) 0.260%, 01/04/10 25,000 24,983 - -------------------------------------------------------------------- TOTAL BANKS 324,839 ====================================================================
DESCRIPTION FACE AMOUNT (000) VALUE (000) - --------------------------------------------------------------------- FINANCIAL SERVICES [15.9%] ASB Finance (B) 0.340%, 01/25/10 $ 25,000 $ 24,973 Commerzbank US Finance 0.541%, 01/15/10 25,000 24,960 Danske (B) 0.250%, 11/30/09 25,000 24,990 General Electric Capital 0.180%, 10/07/09 25,000 24,999 HSBC Finance 0.501%, 11/10/09 25,000 24,986 HVB US Finance (B) 0.250%, 10/14/09 25,000 24,998 Nordea North America 0.290%, 11/30/09 25,000 24,988 Rabobank USA Financial 0.230%, 12/01/09 25,000 24,990 Toyota Financial Services de Puerto Rico 0.150%, 10/28/09 25,000 24,997 Westpac Securities NZ (B) 0.280%, 01/11/10 25,000 24,980 - -------------------------------------------------------------------- TOTAL FINANCIAL SERVICES 249,861 ==================================================================== FOOD, BEVERAGE & TOBACCO [1.6%] Nestle Capital (B) 0.030%, 10/06/09 25,000 25,000 ==================================================================== FOREIGN GOVERNMENTS [1.6%] Republic of Ireland International Bond 0.622%, 01/04/10 25,000 24,959 ==================================================================== IMPORT/EXPORT [1.6%] Sumitomo Corp of America 0.631%, 10/15/09 25,000 24,994 ==================================================================== INSURANCE [1.6%] MetLife Short Term Funding (B) 0.741%, 10/16/09 25,000 24,992 ====================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 50 schedule of investments SEPTEMBER 30, 2009 - -------------------------------------------------------------------- PRIME MONEY MARKET FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------------------ INVESTMENT BANKER/BROKER DEALER [3.2%] Citigroup Funding 0.300%, 10/06/09 $ 25,000 $ 24,999 ING US Funding 0.240%, 12/04/09 25,000 24,989 - ------------------------------------------------------------------------ TOTAL INVESTMENT BANKER/ BROKER DEALER 49,988 ======================================================================== MACHINERY [1.4%] John Deere Credit (B) 0.130%, 10/15/09 23,000 22,999 ======================================================================== PETROLEUM & FUEL PRODUCTS [1.6%] ConocoPhillips Qatar Funding (B) 0.300%, 10/08/09 25,000 24,999 ======================================================================== SOVEREIGN AGENCY [3.2%] Banque et Caisse d'Epargne de L'Etat 0.280%, 12/15/09 25,000 24,985 Caisse d'Amortissement de la Dette Sociale 0.300%, 02/05/10 25,000 24,974 - ------------------------------------------------------------------------ TOTAL SOVEREIGN AGENCY 49,959 ======================================================================== SPECIAL PURPOSE BANKS [1.6%] Dexia Delaware 0.280%, 10/08/09 25,000 24,999 ======================================================================== TOTAL COMMERCIAL PAPER (Cost $847,589) 847,589 ======================================================================== U.S.GOVERNMENT AGENCY OBLIGATIONS [7.6%] FFCB 0.540%, 09/15/10 25,000 25,000 FHLB (C) 0.500%, 12/15/09 10,000 10,000 3.875%, 01/15/10 25,000 25,252 FHLB DN (D) 0.421%, 10/14/09 25,000 24,996 0.550%, 06/04/10 10,000 10,000 FHLMC DN (D) 0.401%, 03/16/10 25,000 24,954 - ------------------------------------------------------------------------ TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (Cost $120,202) 120,202 ========================================================================
DESCRIPTION FACE AMOUNT (000)/SHARES VALUE (000) - ------------------------------------------------------------------------ CORPORATE OBLIGATION [1.0%] BANKS [1.0%] Wells Fargo 4.200%, 01/15/10 $ 16,000 $ 16,175 ======================================================================== TOTAL CORPORATE OBLIGATION (Cost $16,175) 16,175 ======================================================================== CERTIFICATES OF DEPOSIT [12.7%] BANKS [12.7%] Banco Bilbao Vizcaya Argentaria 0.605%, 12/16/09 25,000 25,000 Barclays Bank 0.950%, 11/04/09 25,000 25,000 BNP Paribas NY 0.260%, 01/19/10 25,000 25,000 DnB Bank 0.270%, 10/23/09 25,000 25,000 National Australia Bank 0.280%, 10/08/09 25,000 25,000 Natixis NY 0.400%, 11/12/09 25,000 25,000 Norinchukin Bank- New York 0.450%, 11/02/09 25,000 25,000 Royal Bank of Scotland 0.230%, 10/29/09 25,000 25,000 - ------------------------------------------------------------------------ TOTAL BANKS 200,000 ======================================================================== TOTAL CERTIFICATES OF DEPOSIT (Cost $200,000) 200,000 ======================================================================== CASH EQUIVALENT [0.1%] Goldman Sachs Financial Square Funds - Government Fund, 0.080%* 1,140,705 1,141 - ------------------------------------------------------------------------ TOTAL CASH EQUIVALENT (Cost $1,141) 1,141 ========================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 51 schedule of investments SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- PRIME MONEY MARKET FUND (CONCLUDED)
DESCRIPTION FACE AMOUNT (000) VALUE (000) - ---------------------------------------------------------------------- REPURCHASE AGREEMENTS (E) [24.6%] Barclays 0.050%, dated 09/30/09, repurchased on 10/01/09, repurchase price $137,600,191 (collateralized by a U.S. Treasury Note, par value $140,022,216, 1.125%, 1/15/12; with total market value $140,352,051) $137,600 $ 137,600 Banc of America 0.040%, dated 09/30/09, repurchased on 10/01/09, repurchase price $125,000,139 (collateralized by U.S. Government obligations, ranging in par value $4,661,000- $45,445,000, 1.250%-4.375%, 9/29/11- 7/17/15; with total market value $127,500,821) 125,000 125,000 Deutsche Bank 0.060%, dated 09/30/09, repurchased on 10/01/09, repurchase price $100,000,167 (collateralized by U.S. Government obligations, ranging in par value $3,643,000-$68,602,000, 0.000%-5.000%, 11/13/09- 9/16/14; with total market value $102,000,137) 100,000 100,000 JPMorgan Chase 0.040%, dated 09/30/09, repurchased on 10/01/09, repurchase price $25,000,028 (collateralized by U.S. Government obligations, ranging in par value $35,000-$23,945,000, 0.000%-3.875%, 7/15/11- 5/28/24; with total market value $25,503,667) 25,000 25,000 - ---------------------------------------------------------------------- TOTAL REPURCHASE AGREEMENTS (Cost$ 387,600) 387,600 ====================================================================== TOTAL INVESTMENTS [100.0%] (Cost$ 1,572,707) $ 1,572,707 ======================================================================
- ---------- PERCENTAGES ARE BASED ON NET ASSETS OF $1,572,857 ($ THOUSANDS). * THE RATE REPORTED IS THE 7-DAY CURRENT YIELD AS OF SEPTEMBER 30, 2009. (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 SEPTEMBER 30, 2009, THE VALUE OF THESE SECURITIES AMOUNTED TO $397,813 (000), REPRESENTING 25.3% OF THE NET ASSETS OF THE FUND. (C) ZERO COUPON SECURITY -- THE RATE REPORTED IS THE EFFECTIVE YIELD AT TIME OF PURCHASE. (D) FLOATING RATE SECURITY -- THE RATE REPORTED IS THE RATE IN EFFECT ON SEPTEMBER 30, 2009. (E) TRI-PARTY REPURCHASE AGREEMENT DN -- DISCOUNT NOTE FFCB -- FEDERAL FARM CREDIT BANK FHLB -- FEDERAL HOME LOAN BANK FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION The following is a summary of the inputs used as of September 30, 2009 in valuing the Fund's investments carried at value ($ Thousands):
Investments in Securities Level 1 Level 2 Level 3 Total ------- ---------- ------- -------- Commercial Paper $ -- $ 847,589 $ -- $ 847,589 U.S. Government Agency Obligations -- 120,202 -- 120,202 Corporate Obligation -- 16,175 -- 16,175 Certificates of Deposit -- 200,000 -- 200,000 Cash Equivalent 1,141 -- -- 1,141 Repurchase Agreements -- 387,600 -- 387,600 ------- ---------- ------- ---------- Total Investments in Securities $ 1,141 $1,571,566 $ -- $1,572,707 ======= ========== ======= ==========
FOR MORE INFORMATION ON VALUATION INPUTS, SEE NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES IN THE NOTES TO FINANCIAL STATEMENTS. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 52 schedule of investments SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- GOVERNMENT MONEY MARKET FUND TYPE OF SECURITY WEIGHTINGS (UNAUDITED)*: (BAR CHART) U.S. Government Agency Obligations 69.8% Repurchase Agreements 28.5% U.S. Treasury Obligation 1.7%
- ---------- * Percentages are based on total investments.
DESCRIPTION FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------------ U.S.GOVERNMENT AGENCY OBLIGATIONS [70.9%] FARMER MAC DN (A) 0.200%, 10/07/09 $ 50,000 $ 50,000 FFCB 0.500%, 10/07/10 50,000 50,000 0.601%, 12/09/10 (B) 50,000 50,178 FHLB 5.000%, 10/02/09 50,000 50,006 0.500%, 11/05/09 (D) 25,000 25,000 0.450%, 11/24/09 25,000 25,002 0.293%, 12/02/09 (B) 25,000 25,011 0.119%, 12/11/09 (B) 25,000 25,021 0.580%, 12/14/09 30,180 30,200 0.166%, 12/28/09 (B) 25,000 24,999 3.100%, 02/04/10 25,000 25,234 0.790%, 03/11/10 (B) 25,000 25,068 0.875%, 04/15/10 25,000 25,000 0.500%, 05/26/10 25,000 24,986 0.380%, 06/15/10 40,700 40,700 0.560%, 06/22/10 25,000 24,998 0.338%, 07/06/10 (B) 50,000 49,999 0.600%, 07/26/10 10,950 10,950 0.625%, 07/29/10 25,000 25,000 0.550%, 07/30/10 20,000 20,000 0.500%, 09/29/10 40,000 40,000 FHLB DN (A) 0.100%, 10/01/09 200,000 200,000 0.128%, 10/02/09 210,000 209,999 0.198%, 10/09/09 100,000 99,996 0.050%, 10/13/09 50,000 49,999 0.421%, 10/14/09 50,000 49,992 0.320%, 10/19/09 25,000 24,996 0.321%, 10/23/09 50,000 49,990 0.300%, 10/28/09 25,000 24,994 0.260%, 11/18/09 25,000 24,991 1.010%, 02/23/10 25,000 24,899 0.550%, 06/04/10 20,000 20,000 FHLMC 4.125%, 11/30/09 33,182 33,393 3.125%, 02/04/10 25,000 25,175 DESCRIPTION FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------------ FHLMC DN (A) 0.078%, 10/05/09 $ 150,000 $ 149,999 0.220%, 10/13/09 51,200 51,196 0.230%, 11/09/09 25,000 24,994 0.190%, 12/15/09 50,000 49,980 0.294%, 01/04/10 75,000 74,942 0.502%, 01/06/10 25,000 24,966 0.210%, 01/20/10 50,000 49,968 FNMA 0.404%, 02/12/10 (B) 25,000 25,031 7.125%, 06/15/10 24,866 26,038 FNMA DN (A) 0.170%, 10/01/09 100,000 100,000 0.381%, 09/01/10 25,000 24,912 - ------------------------------------------------------------------ TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (Cost $2,107,802) 2,107,802 ================================================================== U.S.TREASURY OBLIGATION [1.7%] U.S.Treasury Note 4.625%, 11/15/09 50,000 50,260 - ------------------------------------------------------------------ TOTAL U.S.TREASURY OBLIGATION (Cost $50,260) 50,260 ================================================================== REPURCHASE AGREEMENTS (C) [29.0%] Bank of America 0.040%, dated 09/30/09, repurchased on 10/01/09, repurchase price $375,000,411 (collateralized by U.S. Government obligations, ranging in par value $22,380,000-$104,714,000, 0.000%-5.375%, 3/24/10- 4/15/42; with total market value $382,500,735) 375,000 375,000 Barclays 0.050%, dated 09/30/09, repurchased on 10/01/09, repurchase price $185,700,258 (collateralized by a U.S. Treasury Note, par value $187,999, 2.000%, 11/30/13; with total market value $189,414,006) 185,700 185,700
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 53 schedule of investments SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- GOVERNMENT MONEY MARKET FUND (CONCLUDED)
DESCRIPTION FACE AMOUNT (000) VALUE (000) - --------------------------------------------------------------------- Deutsche Bank 0.060%, dated 09/30/09, repurchased on 10/01/09, repurchase price $150,000,250 (collateralized by U.S. Government obligations, ranging in par value $5,724,000-$80,000,000, 0.000%-6.625%, 1/15/10- 5/06/24;with total market value $153,000,236) $ 150,000 $ 150,000 UBS Warburg 0.060%, dated 09/30/09, repurchased on 10/01/09, repurchase price $100,000,167 (collateralized by a Fannie Mae Note, par value $102,015,000, 0.000%, 12/29/09; with total market value $102,004,797) 100,000 100,000 JPMorgan Chase 0.040%, dated 09/30/09, repurchased on 10/01/09, repurchase price $50,000,056 (collateralized by U.S. Government obligations, ranging in par value $51,000- $37,085,000, 0.000%-3.250%, 1/13/16-1/15/30; with total market value $51,001,759) 50,000 50,000 - --------------------------------------------------------------------- TOTAL REPURCHASE AGREEMENTS (Cost $860,700) 860,700 ===================================================================== TOTAL INVESTMENTS [101.6%] (Cost $3,018,762) $3,018,762 =====================================================================
PERCENTAGES ARE BASED ON NET ASSETS OF $2,971,852 ($ THOUSANDS). - ---------- (A) ZERO COUPON SECURITY -- THE RATE REPORTED IS THE EFFECTIVE YIELD AT TIME OF PURCHASE. (B) FLOATING RATE SECURITY--THE RATE REFLECTED IS THE RATE IN EFFECT ON SEPTEMBER 30, 2009. (C) TRI-PARTY REPURCHASE AGREEMENT (D) STEP BOND -- THE RATE REFLECTED IS THE RATE IN EFFECT ON SEPTEMBER 30, 2009. THE COUPON ON A STEP BOND CHANGES ON A SPECIFIC DATE. DN -- DISCOUNT NOTE FARMER MAC -- FEDERAL AGRICULTURAL MORTGAGE CORPORATION FFCB -- FEDERAL FARM CREDIT BANK FHLB -- FEDERAL HOME LOAN BANK FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION The following is a summary of the inputs used as of September 30, 2009 in valuing the Fund's investments carried at value ($ Thousands):
Investments in Securities Level 1 Level 2 Level 3 Total ------- ----------- ------- ---------- U.S. Government Agency Obligations $ -- $ 2,107,802 $ -- $2,107,802 U.S.Treasury Obligation 50,260 -- 50,260 Repurchase Agreements -- 860,700 -- 860,700 ------- ----------- ------- ---------- Total Investments in Securities $ -- $ 3,018,762 $ -- $3,018,762 ======= =========== ======= ==========
FOR MORE INFORMATION ON VALUATION INPUTS, SEE NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES IN THE NOTES TO FINANCIAL STATEMENTS. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 54 schedule of investments SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT MONEY MARKET FUND ISSUER INDUSTRY WEIGHTINGS (UNAUDITED)*: (BAR CHART) General Revenue 35.2% Water 17.4% General Obligation 13.5% Education 13.1% Power 9.2% Public Facilities 3.3% Healthcare 2.7% Transportation 2.0% Commercial Paper 1.4% Industrial Development 0.9% Nursing Homes 0.8% Utilities 0.5%
- ---------- * Percentages based on total investments.
DESCRIPTION FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------- MUNICIPAL BONDS [98.3%] CALIFORNIA [92.4%] ABAG, Finance Authority for Non-Profit Corporations, Public Policy Institute, Ser A, RB (A) (B) (C) 0.370%, 10/01/09 $ 2,870 $ 2,870 ABAG, Finance Authority for Non-Profit Corporations, Ser C, COP (A) (B) (C) 0.250%, 10/01/09 7,420 7,420 ABAG, Finance Authority for Non-Profit Corporations, Ser D, COP (A) (B) (C) 0.250%, 10/01/09 5,970 5,970 Bay Area Toll Authority, RB (A) (C) 0.300%, 10/01/09 11,000 11,000 Bay Area Toll Authority, Ser E-1, RB (A) (C) 0.350%, 10/01/09 3,560 3,560 Bay Area Toll Authority, Ser E-3, RB (A) (C) 0.370%, 10/01/09 4,000 4,000 California State, Daily Kindergarten University Project, Ser A-3, GO (A) (B) (C) 0.330%, 10/01/09 4,735 4,735 California State, Daily Kindergarten University Project, Ser A-4, GO (A) (B) (C) 0.330%, 10/01/09 1,250 1,250
DESCRIPTION FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------- California State, Daily Kindergarten University Project, Ser B-3, GO (A) (B) (C) 0.280%, 10/01/09 $ 4,320 $ 4,320 California State, Department of Water Resource & Power, Ser B-2, RB (A) (B) (C) 0.270%, 10/01/09 15,000 15,000 California State, Department of Water Resource & Power, Ser C-15, RB (A) (B) (C) 0.250%, 10/01/09 5,000 5,000 California State, Department of Water Resource & Power, Ser C-7, RB, FSA (A) (C) 0.450%, 10/01/09 11,425 11,425 California State, Department of Water Resource & Power, Sub-Ser F-2, RB (A) (B) (C) 0.300%, 10/01/09 17,000 17,000 California State, Department of Water Resource & Power, Sub-Ser G-3, RB, FSA (A) (C) 0.450%, 10/01/09 10,000 10,000 California State, Economic Development Financing Authority, KQED Incorporated Project, RB (A) (B) (C) 0.250%, 10/07/09 1,140 1,140 California State, Economic Recovery Authority, Ser C-11, GO (A) (B) (C) 0.280%, 10/07/09 10,000 10,000 California State, Educational Facilities Authority, Pitzer College Project, Ser B, RB (A) (B) (C) 0.280%, 10/01/09 3,215 3,215 California State, Educational Facilities Authority, Stanford University Project, Ser L-4, RB (C) 0.250%, 10/07/09 515 515
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 55 schedule of investments SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT MONEY MARKET FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------------ California State, Educational Facilities Authority, University of San Francisco Project, RB (A)(B)(C) 0.400%, 10/07/09 $ 4,800 $ 4,800 California State, Health Facilities Financing Authority, Luvile Salter Project, Ser B, RB (A) (C) 0.350%, 10/01/09 11,700 11,700 California State, Infrastructure & Economic Authority, California Academy Project, Ser A, RB (A) (B) (C) 0.270%, 10/01/09 9,900 9,900 California State, Infrastructure & Economic Authority,J Paul Getty Trust Project, Ser A-2, RB (C) 0.500%, 10/071/09 4,000 4,000 California State, Infrastructure & Economic Authority,J Paul Getty Trust Project, Ser B, RB (A) (C) 0.250%, 10/01/09 7,820 7,820 California State, Infrastructure & Economic Authority,J Paul Getty Trust Project, Ser D, RB (A) (C) 0.250%, 10/01/09 3,700 3,700 California State, Infrastructure & Economic Authority, Orange County Performing Project, Ser C, RB (A) (B) (C) 0.400%, 10/01/09 5,855 5,855 California State, Ser A-1, GO (A) (B) (C) 0.330%, 10/01/09 8,350 8,350 California State, Ser A-3, GO (A) (B) (C) 0.280%, 10/01/09 10,500 10,500
DESCRIPTION FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------------ California State, Ser B, Sub-Ser B-7, GO (A) (B) (C) 0.390%, 10/01/09 $ 14,275 $ 14,275 California State, Ser B-1, GO (A) (B) (C) 0.230%, 10/07/09 7,000 7,000 California State, Ser B-4, GO (A) (B) (C) 0.230%, 10/07/09 4,000 4,000 California State, Ser C-2, GO (A) (B) (C) 0.370%, 10/01/09 7,700 7,700 California State, Sub-Ser B-3, GO (A) (B) (C) 0.230%, 10/07/09 3,145 3,145 California State, Sub-Ser B-4, GO (A) (B) (C) 0.300%, 10/07/09 6,880 6,880 California State,Weekly Kindergarten University Project, Ser A-7, GO (A) (B) (C) 0.250%, 10/01/09 3,195 3,195 California State,Weekly Kindergarten University Project, Ser A-8, GO (A) (B) (C) 0.250%, 10/01/09 25,600 25,600 California State,Weekly Kindergarten University Project, Ser B-5, GO (A) (B) (C) 0.300%, 10/01/09 12,725 12,725 California Statewide, Communities Development Authority, Masters College Project, RB (A) (B) (C) 0.170%, 10/01/09 3,000 3,000 California Statewide, Communities Development Authority, Park Century School Project, RB (A) (B) (C) 0.270%, 10/01/09 4,000 4,000 Contra Costa, Transportation Authority, RB 2.500%, 10/01/10 4,200 4,284
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 56 schedule of investments SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT MONEY MARKET FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------------- East Bay, Municipal Utilities District Water Authority, Sub-Ser A-1, RB (A) (C) 0.250%, 10/07/09 $ 10,000 $ 10,000 East Bay, Municipal Utilities District Water Authority, Sub-Ser A-2, RB (A) (C) 0.400%, 10/07/09 4,395 4,395 East Bay, Municipal Utilities District Water Authority, Sub-Ser A-3, RB (A) (C) 0.400%, 10/07/09 10,000 10,000 Glendale, Police Building Project, COP (A) (C) 0.350%, 10/01/09 18,300 18,300 Irvine, Improvement Board, Act 1915 Project, District #03-19, Ser A, SAB (A) (B) (C) 0.270%, 10/01/09 12,040 12,040 Irvine, Improvement Board, Act 1915 Project, District #04-20, Ser A, SAB (A) (B) (C) 0.270%, 10/01/09 8,560 8,560 Irvine, Improvement Board, Act 1915 Project, District #04-20, Ser B, RB (A) (B) (C) 0.270%, 10/01/09 15,843 15,843 Irvine, Improvement Board, Act 1915 Project, District #05-21, Ser A, SAB (A) (B) (C) 0.330%, 10/01/09 10,430 10,430 Irvine, Improvement Board, Act 1915 Project, District #07-22, Ser A, RB (A) (B) (C) 0.270%, 10/01/09 13,950 13,950 Irvine, Improvement Board, Act 1915 Project, District #97-17, SAB (A) (B) (C) 0.270%, 10/01/09 7,150 7,150
DESCRIPTION FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------------- Los Angeles County, Metropolitan Transportation Authority, Ser A1, RB (A) (C) 0.250%, 10/01/09 $ 6,500 $ 6,500 Los Angeles County, Metropolitan Transportation Authority, Ser A1, RB (A) (C) 0.280%, 10/01/09 27,745 27,745 Los Angeles County, Metropolitan Transportation Authority, Ser C4, RB (A) (B) (C) 0.300%, 10/01/09 2,000 2,000 Los Angeles County, Ser A,TRAN 2.500%, 10/01/09 7,000 7,088 Los Angeles County, Ser A,TRAN 2.500%, 10/01/09 7,000 7,085 Los Angeles, Department of Water & Power, Sub-Ser B-1, RB (A) (C) 0.300%, 10/01/09 7,000 7,000 Los Angeles, Department of Water & Power, Sub-Ser B-2, RB (A) (C) 0.280%, 10/01/09 21,500 21,500 Los Angeles, Department of Water & Power, Sub-Ser B-4, RB (A) (C) 0.300%, 10/01/09 1,000 1,000 Los Angeles, Unified School District, Ser B, COP (A) (B) (C) 0.250%, 10/07/09 9,300 9,300 Los Angeles, Unified School District, Ser D, GO, FGIC Pre-Refunded @ 100 (D) 5.375%, 07/01/10 6,000 6,222 Los Angeles, Unified School District,TRAN 2.000%, 08/12/10 10,000 10,118 Los Angeles,Wastewater Systems Authority, Sub-Ser C, RB (A) (B) (C) 0.300%, 10/01/09 2,500 2,500 Los Angeles,Wastewater Systems Authority, Sub-Ser F-2, RB (A) (B) (C) 0.270%, 10/01/09 7,000 7,000
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 57 schedule of investments SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT MONEY MARKET FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Los Angeles,Water & Power Resource Authority, Sub-Ser B-1, RB (A) (C) 0.300%, 07/01/34 $ 4,000 $ 4,000 Los Angeles,Water & Power Resource Authority, Sub-Ser B-2, RB (A) (C) 0.300%, 10/01/09 12,600 12,600 Los Angeles,Water & Power Resource Authority, Sub-Ser B-3, RB (A) (C) 0.300%, 10/01/09 26,400 26,400 Los Angeles,Water & Power Resource Authority, Sub-Ser B-6, RB (A) (C) 0.250%, 10/01/09 10,000 10,000 Oakland-Alameda County, Coliseum Project, Ser C-1, RB (A) (B) (C) 0.310%, 10/07/09 15,000 15,000 Orange County, Sanitation District Authority, Ser A, COP (A) (C) 0.400%, 10/01/09 13,730 13,730 Orange County, Sanitation District Authority, Ser A,TRAN 2.000%, 06/30/10 7,000 7,083 Orange County, Sanitation District Authority, Ser B, COP (A) (C) 0.400%, 10/01/09 27,205 27,205 Orange County,Water District Authority, Ser A, COP (A) (C) 0.200%, 10/07/09 2,800 2,800 Pasadena, Public Financing Authority, Rose Bowl Refinancing & Improvement Project, RB (A) (B) (C) 0.230%, 10/07/09 16,525 16,525 Riverside County, Public Facilities Authority, Ser C, COP (A) (B) (C) 0.250%, 10/07/09 12,300 12,300
DESCRIPTION FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Riverside,Water Authority, Ser A, RB (A) (C) 0.270%, 10/01/09 $ 8,305 $ 8,305 Sacramento County, Sanitation District Authority, Sub-Ser B, RB (A) (B) (C) 0.280%, 10/01/09 2,000 2,000 Sacramento County, Sanitation District Authority, Sub-Ser E, RB (A) (B) (C) 0.230%, 10/07/09 6,500 6,500 San Diego County, Regional Transportation Commission, Ser B, RB (A) (C) 0.300%, 10/01/09 13,350 13,350 San Diego County, Regional Transportation Commission, Ser C, RB (A) (C) 0.350%, 10/01/09 4,900 4,900 San Diego County, School District, Ser A,TRAN 2.000%, 06/30/10 11,000 11,133 San Diego, Unified School District,TRAN 2.000%, 07/08/10 9,075 9,177 San Jose, Redevelopment Agency, Merged Area Redevelopment Project, Ser A, RB (A) (B) (C) 0.210%, 10/07/09 7,150 7,150 Santa Barbara County, Ser A,TRAN 2.500%, 06/30/10 5,715 5,807 Santa Clara County, Financing Authority, Multiple Facilities Projects, Ser M, RB (A) (B) (C) 0.250%, 10/07/09 17,105 17,105 Santa Clara County, Financing Authority, VMC Facility Replacement Project, Ser B, RB (A) (C) 0.300%, 10/07/09 13,475 13,475 Santa Clara Valley, Transportation Authority, Ser C, RB (A) (C) 0.300%, 10/01/09 8,000 8,000
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 58 schedule of investments SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT MONEY MARKET FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Santa Clara Valley, Transportation Authority, Ser D, RB (A) (C) 0.350%, 10/01/09 $ 6,000 $ 6,000 Santa Clara, Electric Authority, Sub-Ser B, RB (A) (B) (C) 0.300%, 10/07/09 4,975 4,975 Santa Cruz County,TRAN 2.000%, 07/08/10 5,000 5,057 Southern California, Metropolitan Water District Authority, Ser A-1, RB (A) (C) 0.250%, 10/01/09 500 500 Southern California, Metropolitan Water District Authority, Ser C-1, RB (A) (C) 0.250%, 10/01/09 7,500 7,500 Southern California, Metropolitan Water District Authority, Water Works Authorization Project, Ser B, RB (A) (C) 0.300%, 10/01/09 10,135 10,135 Southern California, Metropolitan Water District Authority, Ser B-3, RB (A) (C) 0.250%, 10/01/09 4,000 4,000 Southern California, Metropolitan Water District Authority, Ser C-2, RB (A) (C) 0.210%, 10/01/09 20,720 20,720 Turlock, Irrigation District, Capital Improvement & Refunding Project, COP (A) (B) (C) 0.270%, 10/01/09 6,070 6,070 Turlock, Irrigation District, First Priority Project, RB 1.500%, 10/01/09 10,000 10,065 Tustin, Improvement Board Act, Reassessment District No. 95-2-A, Ser A, SAB (A) (B) (C) 0.280%, 10/01/09 8,685 8,685
DESCRIPTION FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- University of California, Regents Medical Center, Ser B-1, RB (A) (C) 0.300%, 10/01/09 $ 6,340 $ 6,340 - -------------------------------------------------------------------------------- TOTAL CALIFORNIA 851,167 ================================================================================ CONNECTICUT [1.8 %] Connecticut State, Health & Educational Facility Authority, Yale University Project, Ser U2, RB (A) (C) 0.230%, 10/07/09 10,000 10,000 Connecticut State, Health & Educational Facility Authority, Yale University Project, Ser X-2, RB (A) (C) 0.300%, 10/01/09 6,000 6,000 - -------------------------------------------------------------------------------- TOTAL CONNECTICUT 16,000 ================================================================================ MASSACHUSETTS [0.6 %] Massachusetts State, Development Finance Agency, Harvard University Project, Ser HH, RB (A) (C) 0.350%, 10/01/09 5,950 5,950 ================================================================================ TEXAS [3.0 %] University of Texas, Ser A, RB (A) (C) 0.230%, 10/07/09 3,795 3,795 University of Texas, Ser B, RB (A) (C) 0.250%, 10/01/09 23,500 23,500 - -------------------------------------------------------------------------------- TOTAL TEXAS 27,295 ================================================================================ VIRGINIA [0.5 %] University of Virginia, Ser A, RB (A) (C) 0.230%, 10/07/09 4,965 4,965 - -------------------------------------------------------------------------------- TOTAL MUNICIPAL BONDS (Cost $905,377) 905,377 ================================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 59 schedule of investments SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT MONEY MARKET FUND (CONCLUDED)
DESCRIPTION FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- COMMERCIAL PAPER [1.4%] CALIFORNIA [1.4%] Contra Costa,Water District Authority 0.250%, 10/05/09 $ 12,700 $ 12,700 - -------------------------------------------------------------------------------- TOTAL COMMERCIAL PAPER (Cost $12,700) 12,700 ================================================================================ TOTAL INVESTMENTS [99.7 %] (Cost $918,077) $ 918,077 ================================================================================
- ---------- PERCENTAGES ARE BASED ON NET ASSETS OF $920,815 ($ THOUSANDS). (A) SECURITIES ARE HELD IN CONJUNCTION WITH A LETTER OF CREDIT FROM A MAJOR BANK OR FINANCIAL INSTITUTION. (B) FLOATING RATE SECURITY -- THE RATE REFLECTED IS THE RATE IN EFFECT ON SEPTEMBER 30, 2009. (C) PUT AND DEMAND FEATURE -- THE DATE REPORTED IS THE NEXT RESET DATE. (D) PREREFUNDED SECURITY -- THE MATURITY DATE SHOWN IS THE PREREFUNDED DATE. ABAG -- ASSOCIATION OF BAY AREA GOVERNMENTS COP -- CERTIFICATE OF PARTICIPATION FGIC -- FINANCIAL GUARANTY INSURANCE COMPANY FSA -- FINANCIAL SECURITY ASSISTANCE GO -- GENERAL OBLIGATION RB -- REVENUE BOND SAB -- SPECIAL ASSESSMENT BOND SER -- SERIES TRAN -- TAX & REVENUE ANTICIPATION NOTE The following is a summary of the inputs used as of September 30, 2009 in valuing the Fund's investments carried at value ($ Thousands):
Investments in Securities Level 1 Level 2 Level 3 Total ------- --------- ------- --------- Municipal Bonds $ -- $ 905,377 $ -- $ 905,377 Commercial Paper -- 12,700 -- 12,700 ------- --------- ------- --------- Total Investments in Securities $ -- $ 918,077 $ -- $ 918,077 ======= ========= ======= =========
FOR MORE INFORMATION ON VALUATION INPUTS, SEE NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES IN THE NOTES TO FINANCIAL STATEMENTS. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 60 THIS PAGE INTENTIONALLY LEFT BLANK. statements of assets and liabilities (000) SEPTEMBER 30, 2009 - --------------------------------------------------------------------------------
Large Cap Value Large Cap Growth RCB Small Cap Opportunistic Equity Fund Equity Fund Value Fund Value Fund ------------------------------------------------------------------- ASSETS: Cost of securities (including repurchase agreements) $ 93,993 $ 36,510 $ 19,810 $ 19,291 - --------------------------------------------------------------------------------------------------------------------------------- Investments in securities at value $ 90,274 $ 37,183 $ 21,144 $ 26,492 Repurchase agreements at value -- -- 2,509 -- Receivable for investment securities sold -- -- 145 468 Income receivable 141 17 38 25 Receivable for capital shares sold 92 27 6 -- Prepaid expenses 1 1 -- 1 - --------------------------------------------------------------------------------------------------------------------------------- Total Assets 90,508 37,228 23,842 26,986 - --------------------------------------------------------------------------------------------------------------------------------- LIABILITIES: Payable for investment securities purchased -- -- 477 707 Payable for capital shares redeemed 69 -- 37 -- Payable for income distributions 93 24 -- -- Investment adviser fees payable 46 20 16 11 Shareholder servicing & distribution fees payable 21 10 2 -- Administrative fees payable 4 1 1 1 Accrued expenses 7 3 11 2 - --------------------------------------------------------------------------------------------------------------------------------- Total Liabilities 240 58 544 721 - --------------------------------------------------------------------------------------------------------------------------------- NET ASSETS $ 90,268 $ 37,170 $ 23,298 $ 26,265 ================================================================================================================================= NET ASSETS: Paid-in Capital (unlimited authorization -- $0.01 par value) $ 104,640 $ 40,558 $ 28,735 $ 36,848 Undistributed (distribution in excess of) net investment income (1) -- 15 (1) Accumulated net realized loss on investments (10,652) (4,061) (9,295) (17,783) Net unrealized appreciation (depreciation) on investments (3,719) 673 3,843 7,201 ================================================================================================================================= NET ASSETS $ 90,268 $ 37,170 $ 23,298 $ 26,265 ================================================================================================================================= Institutional Class Shares ($Dollars): Net Assets $ 81,308,358 $ 28,050,242 $ 2,316,767 $ 156,210 Total shares outstanding at end of year 11,163,741 3,962,847 125,522 23,707 Net asset value, offering and redemption price per share (net assets / shares outstanding) $ 7.28 $ 7.08 $ 18.46 $ 6.59 Class N Shares ($Dollars): Net Assets $ 8,959,681 $ 9,119,445 $ 4,226,217 $ 11,335 Total shares outstanding at end of year 1,232,159 1,301,890 233,265 1,723 Net asset value, offering and redemption price per share (net assets / shares outstanding) $ 7.27 $ 7.00 $ 18.12 $ 6.58 Class E Shares ($Dollars): Net Assets $ -- $ -- $ -- $ 26,097,478 Total shares outstanding at end of year -- -- -- 4,028,360 Net asset value, offering and redemption price per share (net assets / shares outstanding) $ -- $ -- $ -- $ 6.48 Class R Shares ($Dollars): Net Assets $ -- $ -- $ 16,754,628 $ -- Total shares outstanding at end of year -- -- 923,187 -- Net asset value and redemption price per share (net assets / shares outstanding) $ -- $ -- $ 18.15 $ -- Maximum offering price per share (net asset value / 96.50%) $ -- $ -- $ 18.81 $ --
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 62 statements of assets and liabilities (000) SEPTEMBER 30, 2009 - ------------------------------------------------------------------------------
California Multi-Asset Corporate Government Tax Exempt Fund Bond Fund Bond Fund Bond Fund ------------------------------------------------------------- ASSETS: Cost of securities $ 23,536 $ 84,820 $ 73,451 $ 39,050 - ---------------------------------------------------------------------------------------------------------------------------------- Investments in securities at value $ 20,852 $ 88,473 $ 74,687 $ 40,482 Affiliated investments at value 3,841 -- -- -- Receivable for investment securities sold 531 -- -- -- Income receivable 54 1,005 552 504 Receivable for capital shares sold 34 654 208 74 Prepaid expenses -- 1 1 -- - ---------------------------------------------------------------------------------------------------------------------------------- Total Assets 25,312 90,133 75,448 41,060 - ---------------------------------------------------------------------------------------------------------------------------------- LIABILITIES: Payable for income distributions 24 185 116 60 Payable for capital shares redeemed 5 -- 211 -- Payable for investment securities purchased -- -- -- 500 Investment adviser fees payable 11 27 21 4 Shareholder servicing & distribution fees payable 9 18 16 8 Administrative fees payable 1 4 3 2 Accrued expenses 2 7 6 3 - ---------------------------------------------------------------------------------------------------------------------------------- Total Liabilities 52 241 373 577 - ---------------------------------------------------------------------------------------------------------------------------------- NET ASSETS $ 25,260 $ 89,892 $ 75,075 $ 40,483 ================================================================================================================================== NET ASSETS: Paid-in Capital (unlimited authorization -- $0.01 par value) $ 28,327 $ 87,454 $ 73,952 $ 39,238 Undistributed (distribution in excess of) net investment income 11 -- -- -- Accumulated net realized loss on investments and affiliated investments (4,235) (1,215) (113) (187) Net unrealized appreciation on investments and affiliated investments 1,157 3,653 1,236 1,432 ================================================================================================================================== Net Assets $ 25,260 $ 89,892 $ 75,075 $ 40,483 ================================================================================================================================== Institutional Class Shares ($Dollars): Net Assets $ 8,423,278 $ 88,896,992 $ 71,966,153 $ 38,580,985 Total shares outstanding at end of year 853,756 8,417,481 6,805,095 3,651,041 Net asset value, offering and redemption price per share (net assets / shares outstanding) $ 9.87 $ 10.56 $ 10.58 $ 10.57 Class N Shares ($Dollars): Net Assets $ 16,837,181 $ 994,661 $ 3,109,058 $ 1,901,603 Total shares outstanding at end of year 1,707,181 94,115 293,373 179,466 Net asset value, offering and redemption price per share (net assets / shares outstanding) $ 9.86 $ 10.57 $ 10.60 $ 10.60
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 63 statements of assets and liabilities (000) SEPTEMBER 30, 2009 - --------------------------------------------------------------------------------------------------------------------------
California Prime Government Tax Exempt High Yield Money Market Money Market Money Market Bond Fund Fund Fund Fund ------------------------------------------------------------------- ASSETS: Cost of securities (including repurchase agreements) $ 37,256 $ 1,572,707 $ 3,018,762 $ 918,077 - -------------------------------------------------------------------------------------------------------------------------- Investments in securities at value $ 35,199 $ 1,185,107 $ 2,158,062 $ 918,077 Repurchase agreements at value -- 387,600 860,700 -- Cash 585 -- -- 2,259 Income receivable 781 577 3,898 618 Receivable for investment securities sold 1,326 -- -- -- Receivable for capital shares sold 5 -- -- -- Prepaid expenses -- 28 54 18 - -------------------------------------------------------------------------------------------------------------------------- Total Assets 37,896 1,573,312 3,022,714 920,972 - -------------------------------------------------------------------------------------------------------------------------- LIABILITIES: Payable for income distributions 70 82 20 11 Payable for investment securities purchased 1,801 -- 50,000 -- Investment adviser fees payable 18 141 303 21 Shareholder servicing & distribution fees payable 12 55 57 27 Administrative fees payable 1 56 104 33 Payable to custodian -- -- 211 -- Accrued expenses 2 121 167 65 - -------------------------------------------------------------------------------------------------------------------------- Total Liabilities 1,904 455 50,862 157 - -------------------------------------------------------------------------------------------------------------------------- NET ASSETS $ 35,992 $ 1,572,857 $ 2,971,852 $ 920,815 ========================================================================================================================== Net Assets: Paid-in Capital (unlimited authorization -- $0.01 par value) $ 42,606 $ 1,572,653 $ 2,971,831 $ 920,814 Undistributed net investment income -- 87 17 -- Accumulated net realized gain (loss) on investments (4,557) 117 4 1 Net unrealized depreciation on investments (2,057) -- -- -- ========================================================================================================================== NET ASSETS $ 35,992 $ 1,572,857 $ 2,971,852 $ 920,815 ========================================================================================================================== Institutional Class Shares ($Dollars): Net Assets $ 16,354,500 $ 543,326,247 $ 123,863,517 $ 141,578,468 Total shares outstanding at end of year 2,163,152 543,325,213 123,864,394 141,580,604 Net asset value, offering and redemption price per share (net assets / shares outstanding) $ 7.56 $ 1.00 $ 1.00 $ 1.00 Class N Shares ($Dollars): Net Assets $ 19,637,063 $ 656,768,757 $2,549,146,717 $ 704,840,428 Total shares outstanding at end of year 2,597,313 656,744,494 2,549,126,892 704,842,075 Net asset value, offering and redemption price per share (net assets / shares outstanding) $ 7.56 $ 1.00 $ 1.00 $ 1.00 Class S Shares ($ Dollars): Net Assets $ -- $ 372,762,191 $ 298,842,224 $ 74,395,858 Total shares outstanding at end of year -- 372,676,201 298,840,656 74,392,133 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 64 statements of operations FOR THE YEAR ENDED SEPTEMBER 30, 2009 - --------------------------------------------------------------------------------
Large Cap Value Large Cap Growth RCB Small Cap Opportunistic Equity Fund Equity Fund Value Fund Value Fund (000) (000) (000) (000) ------------------------------------------------------------------ INCOME: Dividend Income $ 2,389 $ 561 $ 189 $ 482 Interest Income -- -- 1 -- Less: Foreign Taxes Withheld (1) -- -- (7) - ---------------------------------------------------------------------------------------------------------------------------- Total Investment Income 2,388 561 190 475 - ---------------------------------------------------------------------------------------------------------------------------- EXPENSES: Investment Advisory Fee 482 216 153 108 Shareholder Servicing Fees--Institutional Class 174 62 4 -- Shareholder Servicing Fees--Class N(1) 41 41 16 -- Shareholder Servicing Fees--Class R(1) -- -- 33 -- Administration Fee 36 16 8 10 Transfer Agent Fees 6 3 49 2 Trustee Fees 3 1 1 1 Professional Fees 12 5 3 3 Printing Fees 4 2 1 3 Custody Fees 3 1 -- -- Registration Fees 3 1 1 1 Insurance and Other Expenses 9 4 2 21 - ---------------------------------------------------------------------------------------------------------------------------- Total Expenses 773 352 271 149 - ---------------------------------------------------------------------------------------------------------------------------- Recovery of Investment Advisory Fees Previously Waived(2) -- -- -- 1 Less,Waiver/Reimbursement of: Shareholder Servicing Fees--Class R(1) -- -- (76) -- Investment Advisory Fee -- -- -- (1) Transfer Agent Fees (6) (3) (1) (2) - ---------------------------------------------------------------------------------------------------------------------------- Net Expenses 767 349 194 147 - ---------------------------------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME (LOSS) 1,621 212 (4) 328 - ---------------------------------------------------------------------------------------------------------------------------- Net Realized Loss From Securities Transactions (8,654) (1,908) (8,609) (17,058) Net Change in Unrealized Appreciation (Depreciation) on Investments (2,607) (113) 10,677 12,304 - ---------------------------------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ (9,640) $ (1,809) $ 2,064 $ (4,426) ============================================================================================================================
- ---------- (1) INCLUDES CLASS SPECIFIC DISTRIBUTION EXPENSES. (2) SEE NOTE 4 FOR ADVISORY FEES RECOVERED. AMOUNTS DESIGNATED AS "--" ARE ZERO OR HAVE BEEN ROUNDED TO ZERO. SEE COMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 65 statements of operations FOR THE YEAR ENDED SEPTEMBER 30, 2009 - --------------------------------------------------------------------------------
California Multi-Asset Corporate Government Tax Exempt Fund Bond Fund Bond Fund Bond Fund (000) (000) (000) (000) ----------------------------------------------------- INCOME: Interest Income $ 40 $ 3,489 $ 2,908 $ 1,329 Dividend Income 427 26 19 7 Income from Affiliated Investments 147 -- -- -- ----------------------------------------------------------------------------------------------------------------- Total Investment Income 614 3,515 2,927 1,336 ----------------------------------------------------------------------------------------------------------------- EXPENSES: Investment Advisory Fee 120 304 315 98 Shareholder Servicing Fees--Institutional Class 22 188 176 87 Shareholder Servicing Fees--Class N(1) 76 4 15 7 Administration Fee 11 36 34 17 Transfer Agent Fees 2 6 6 3 Trustee Fees 1 3 3 1 Professional Fees 3 12 10 5 Printing Fees 1 4 4 2 Custody Fees 1 4 3 2 Registration Fees 1 2 2 1 Insurance and Other Expenses 3 8 8 4 ----------------------------------------------------------------------------------------------------------------- Total Expenses 241 571 576 227 ----------------------------------------------------------------------------------------------------------------- Less,Waivers of: Investment Advisory Fees -- (2) (49) (39) Transfer Agent Fees (2) (6) (6) (3) ----------------------------------------------------------------------------------------------------------------- NET EXPENSES 239 563 521 185 ----------------------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME 375 2,952 2,406 1,151 ----------------------------------------------------------------------------------------------------------------- Net Realized Gain (Loss) From Securities Transactions (3,857) (674) 453 (93) Net Realized Gain From Affiliated Investments 1 -- -- -- Net Change in Unrealized Appreciation on Investments 3,782 6,838 805 1,914 Net Change in Unrealized Appreciation on Affiliated Investments 200 -- -- -- ----------------------------------------------------------------------------------------------------------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 501 $ 9,116 $ 3,664 $ 2,972 =================================================================================================================
- ---------- (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 66 statements of operations FOR THE YEAR ENDED SEPTEMBER 30, 2009 - --------------------------------------------------------------------------------
California Prime Government Tax Exempt High Yield Money Market Money Market Money Market Bond Fund Fund Fund Fund (000) (000) (000) (000) ------------------------------------------------------------- INCOME: Interest Income $ 3,005 $ 19,099 $ 22,179 $ 7,505 Dividend Income 22 12 -- -- - ---------------------------------------------------------------------------------------------------------------------- Total Investment Income 3,027 19,111 22,179 7,505 - ---------------------------------------------------------------------------------------------------------------------- EXPENSES: Investment Advisory Fee 211 4,933 8,500 3,042 Shareholder Servicing Fees--Institutional Class 32 1,499 347 489 Shareholder Servicing Fees--Class N(1) 86 6,504 20,704 6,308 Shareholder Servicing Fees--Class S(1) -- 3,797 2,774 676 Administration Fee 13 915 1,519 524 Transfer Agent Fees 2 162 268 92 Trustee Fees 1 79 125 45 Professional Fees 4 263 429 143 Printing Fees 2 112 167 60 Custody Fees 1 94 150 51 Registration Fees 1 77 141 26 Treasury Guarantee Program Fees -- 950 845 482 Insurance and Other Expenses 3 253 359 123 - ---------------------------------------------------------------------------------------------------------------------- Total Expenses 356 19,638 36,328 12,061 - ---------------------------------------------------------------------------------------------------------------------- Less,Waivers of: Investment Advisory Fees (25) (880) (2,210) (1,568) Administration Fees -- (85) (163) (58) Shareholder Servicing Fees--Institutional Class -- (869) (258) (386) Shareholder Servicing Fees--Class N(1) -- (4,173) (15,981) (4,975) Shareholder Servicing Fees--Class S(1) -- (1,862) (1,906) (428) Transfer Agent Fees (2) (162) (268) (92) - ---------------------------------------------------------------------------------------------------------------------- NET EXPENSES 329 11,607 15,542 4,554 - ---------------------------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME 2,698 7,504 6,637 2,951 - ---------------------------------------------------------------------------------------------------------------------- Net Realized Gain (Loss) From Securities Transactions (3,203) 117 4 -- Net Change in Unrealized Appreciation on Investments 4,440 -- -- -- - ---------------------------------------------------------------------------------------------------------------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 3,935 $ 7,621 $ 6,641 $ 2,951 ======================================================================================================================
- ---------- (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 67 statements of changes in net assets FOR THE YEAR ENDED SEPTEMBER 30, 2009 - --------------------------------------------------------------------------------
Large Cap Value Large Cap Growth Equity Fund (000) Equity Fund (000) --------------------- ------------------- 2009 2008 2009 2008 - ----------------------------------------------------------------------------------------------------- ------------------- OPERATIONS: Net Investment Income (Loss) $ 1,621 $ 1,828 $ 212 $ 154 Net Realized Gain (Loss) from Security Transactions and Affiliated Investments (8,654) (2,121) (1,908) 229 Net Change in Unrealized Appreciation (Depreciation) on Investments and Affiliated Investments (2,607) (27,129) (113) (9,483) - ----------------------------------------------------------------------------------------------------- ------------------- Net Increase (Decrease) in Net Assets Resulting from Operations (9,640) (27,422) (1,809) (9,100) - ----------------------------------------------------------------------------------------------------- ------------------- DIVIDENDS AND DISTRIBUTIONS FROM: Net investment income: INSTITUTIONAL CLASS (1,358) (1,637) (182) (138) CLASS N (137) (190) (40) (14) CLASS R -- -- -- -- CLASS E -- -- -- -- Realized Capital Gains: INSTITUTIONAL CLASS -- (4,754) -- -- CLASS N -- (735) -- -- CLASS R -- -- -- -- - ----------------------------------------------------------------------------------------------------- ------------------- Total Dividends & Distributions (1,495) (7,316) (222) (152) - ----------------------------------------------------------------------------------------------------- ------------------- CAPITAL SHARE TRANSACTIONS:(1) INSTITUTIONAL CLASS: Shares issued 20,103 22,976 6,861 5,320 Shares issued in Lieu of Dividends and Distributions 950 4,640 56 47 Shares Redeemed (18,562) (18,936) (8,638) (13,229) - ----------------------------------------------------------------------------------------------------- ------------------- Increase (Decrease) in Net Assets from Institutional Class Share Transactions 2,491 8,680 (1,721) (7,862) - ----------------------------------------------------------------------------------------------------- ------------------- CLASS N: Shares issued 538 623 554 909 Shares issued in Lieu of Dividends and Distributions 93 660 25 9 Shares Redeemed (1,792) (2,366) (2,072) (2,236) - ----------------------------------------------------------------------------------------------------- ------------------- Increase (Decrease) in Net Assets from Class N Share Transactions (1,161) (1,083) (1,493) (1,318) - ----------------------------------------------------------------------------------------------------- ------------------- CLASS R: Shares Issued -- -- -- -- Shares Issued in Lieu of Dividends and Distributions -- -- -- -- Shares Redeemed -- -- -- -- - ----------------------------------------------------------------------------------------------------- ------------------- Decrease in Net Assets from Class R Share Transactions -- -- -- -- - ----------------------------------------------------------------------------------------------------- ------------------- CLASS E: Shares Issued -- -- -- -- Shares Issued in Lieu of Dividends and Distributions -- -- -- -- Shares Redeemed -- -- -- -- - ----------------------------------------------------------------------------------------------------- ------------------- Increase (Decrease) in Net Assets from Class E Share Transactions -- -- -- -- - ----------------------------------------------------------------------------------------------------- ------------------- Net Increase (Decrease) in Net Assets from Share Transactions 1,330 7,597 (3,214) (9,180) - ----------------------------------------------------------------------------------------------------- ------------------- Total Increase (Decrease) in Net Assets (9,805) (27,141) (5,245) (18,432) - ----------------------------------------------------------------------------------------------------- ------------------- NET ASSETS: Beginning of Period 100,073 127,214 42,415 60,847 - ----------------------------------------------------------------------------------------------------- ------------------- End of Period $ 90,268 $ 100,073 $ 37,170 $ 42,415 ===================================================================================================== =================== Undistributed (Distributions in Excess of) Net Investment Income $ (1) $ (127) $ -- $ 10 - ----------------------------------------------------------------------------------------------------- -------------------
- ---------- * FUND COMMENCED OPERATIONS ON OCTOBER 1, 2007. ** FUND COMMENCED OPERATIONS ON JUNE 26, 2008. (1) SEE NOTE 8 FOR SHARES ISSUED AND REDEEMED. (2) INCLUDES SUBSCRIPTIONS AS A RESULT OF AN IN-KIND TRANSFER OF SECURITIES (SEE NOTE 9). AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 68
RCB Small Cap Opportunistic Value Value Fund (000) Fund (000) - --------------------------------------------------------------------------------------------------------------------------- 2009 2008 2009 2008** - --------------------------------------------------------------------------------------------------------------------------- OPERATIONS: Net Investment Income (Loss) $ (4) $ 364 $ 328 $ 174 Net Realized Gain (Loss) from Security Transactions and Affiliated Investments (8,609) 53 (17,058) (725) Net Change in Unrealized Appreciation (Depreciation) on Investments and Affiliated Investments 10,677 (18,035) 12,304 (5,103) - --------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets Resulting from Operations 2,064 (17,618) (4,426) (5,654) - --------------------------------------------------------------------------------------------------------------------------- DIVIDENDS AND DISTRIBUTIONS FROM: Net investment income: INSTITUTIONAL CLASS (29) -- (1) -- CLASS N (69) -- (1) -- CLASS R (341) -- -- -- CLASS E -- -- (501) -- Realized Capital Gains: INSTITUTIONAL CLASS -- (1,426) -- -- CLASS N -- (1,567) -- -- CLASS R -- (6,612) -- -- - --------------------------------------------------------------------------------------------------------------------------- Total Dividends & Distributions (439) (9,605) (503) -- - --------------------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS:(1) INSTITUTIONAL CLASS: Shares issued 750 944 127 -- Shares issued in Lieu of Dividends and Distributions 29 1,255 1 -- Shares Redeemed (537) (6,104) -- -- - --------------------------------------------------------------------------------------------------------------------------- Increase (Decrease) in Net Assets from Institutional Class Share Transactions 242 (3,905) 128 -- - --------------------------------------------------------------------------------------------------------------------------- CLASS N: Shares issued 17 111 5 8 Shares issued in Lieu of Dividends and Distributions 50 1,250 -- -- Shares Redeemed (403) (2,424) -- -- - --------------------------------------------------------------------------------------------------------------------------- Increase (Decrease) in Net Assets from Class N Share Transactions (336) (1,063) 5 8 - --------------------------------------------------------------------------------------------------------------------------- CLASS R: Shares Issued 961 5,853 -- -- Shares Issued in Lieu of Dividends and Distributions 325 6,293 -- -- Shares Redeemed (4,706) (14,527) -- -- - --------------------------------------------------------------------------------------------------------------------------- Decrease in Net Assets from Class R Share Transactions (3,420) (2,381) -- -- - --------------------------------------------------------------------------------------------------------------------------- CLASS E: Shares Issued -- -- 16,515 50,892(2) Shares Issued in Lieu of Dividends and Distributions -- -- 500 -- Shares Redeemed -- -- (31,200) -- - --------------------------------------------------------------------------------------------------------------------------- Increase (Decrease) in Net Assets from Class E Share Transactions -- -- (14,185) 50,892 - --------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Share Transactions (3,514) (7,349) (14,052) 50,900 - --------------------------------------------------------------------------------------------------------------------------- Total Increase (Decrease) in Net Assets (1,889) (34,572) (18,981) 45,246 - --------------------------------------------------------------------------------------------------------------------------- NET ASSETS: Beginning of Period 25,187 59,759 45,246 -- - --------------------------------------------------------------------------------------------------------------------------- End of Period $ 23,298 $ 25,187 $ 26,265 $ 45,246 =========================================================================================================================== Undistributed (Distributions in Excess of) Net Investment Income $ 15 $ 436 $ (1) $ 174 - --------------------------------------------------------------------------------------------------------------------------- Multi-Asset Corporate Bond Fund (000) Fund (000) - --------------------------------------------------------------------------------------------------------------------------- 2009 2008* 2009 2008 - --------------------------------------------------------------------------------------------------------------------------- OPERATIONS: Net Investment Income (Loss) $ 375 $ 474 $ 2,952 $ 2,891 Net Realized Gain (Loss) from Security Transactions and Affiliated Investments (3,856) (369) (674) (66) Net Change in Unrealized Appreciation (Depreciation) on Investments and Affiliated Investments 3,982 (2,825) 6,838 (3,019) - --------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets Resulting from Operations 501 (2,720) 9,116 (194) - --------------------------------------------------------------------------------------------------------------------------- DIVIDENDS AND DISTRIBUTIONS FROM: Net investment income: INSTITUTIONAL CLASS (149) (205) (2,926) (2,857) CLASS N (226) (268) (26) (31) CLASS R -- -- -- -- CLASS E -- -- -- -- Realized Capital Gains: INSTITUTIONAL CLASS -- -- -- -- CLASS N -- -- -- -- CLASS R -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------- Total Dividends & Distributions (375) (473) (2,952) (2,888) - --------------------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS:(1) INSTITUTIONAL CLASS: Shares issued 4,298 13,719 27,853 23,936 Shares issued in Lieu of Dividends and Distributions 90 50 676 605 Shares Redeemed (6,506) (1,732) (15,448) (13,983) - --------------------------------------------------------------------------------------------------------------------------- Increase (Decrease) in Net Assets from Institutional Class Share Transactions (2,118) 12,037 13,081 10,558 - --------------------------------------------------------------------------------------------------------------------------- CLASS N: Shares issued 3,250 20,655 488 39 Shares issued in Lieu of Dividends and Distributions 107 118 13 16 Shares Redeemed (3,554) (2,168) (171) (467) - --------------------------------------------------------------------------------------------------------------------------- Increase (Decrease) in Net Assets from Class N Share Transactions (197) 18,605 330 (412) - --------------------------------------------------------------------------------------------------------------------------- CLASS R: Shares Issued -- -- -- -- Shares Issued in Lieu of Dividends and Distributions -- -- -- -- Shares Redeemed -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------- Decrease in Net Assets from Class R Share Transactions -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------- CLASS E: Shares Issued -- -- -- -- Shares Issued in Lieu of Dividends and Distributions -- -- -- -- Shares Redeemed -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------- Increase (Decrease) in Net Assets from Class E Share Transactions -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Share Transactions (2,315) 30,642 13,411 10,146 - --------------------------------------------------------------------------------------------------------------------------- Total Increase (Decrease) in Net Assets (2,189) 27,449 19,575 7,064 - --------------------------------------------------------------------------------------------------------------------------- NET ASSETS: Beginning of Period 27,449 -- 70,317 63,253 - --------------------------------------------------------------------------------------------------------------------------- End of Period $ 25,260 $ 27,449 $ 89,892 $ 70,317 =========================================================================================================================== Undistributed (Distributions in Excess of) Net Investment Income $ 11 $ 1 $ -- $ 1 - ---------------------------------------------------------------------------------------------------------------------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 69 statements of changes in net assets FOR THE YEAR ENDED SEPTEMBER 30, 2009 - --------------------------------------------------------------------------------
Government California Tax Exempt Bond Fund (000) Bond Fund (000) -------------------- --------------------- 2009 2008 2009 2008 - ----------------------------------------------------------------------------------------------------- --------------------- OPERATIONS: Net Investment Income $ 2,406 $ 2,627 $ 1,151 $ 1,063 Net Realized Gain (Loss) from Security Transactions 453 42 (93) (52) Net Change in Unrealized Appreciation (Depreciation) on Investments 805 250 1,914 (573) - ----------------------------------------------------------------------------------------------------- --------------------- Net Increase (Decrease) in Net Assets Resulting from Operations 3,664 2,919 2,972 438 - ----------------------------------------------------------------------------------------------------- --------------------- DIVIDENDS AND DISTRIBUTIONS FROM: Net Investment Income: INSTITUTIONAL CLASS (2,343) (2,532) (1,110) (1,041) CLASS N (92) (107) (41) (22) CLASS S -- -- -- -- - ----------------------------------------------------------------------------------------------------- --------------------- TOTAL DIVIDENDS AND DISTRIBUTIONS (2,435) (2,639) (1,151) (1,063) - ----------------------------------------------------------------------------------------------------- --------------------- CAPITAL SHARE TRANSACTIONS:(1) INSTITUTIONAL CLASS: Shares Issued 22,819 24,102 12,423 10,565 Shares Issued in Lieu of Dividends and Distributions 677 699 403 369 Shares Redeemed (18,805) (11,579) (10,248) (9,859) - ----------------------------------------------------------------------------------------------------- --------------------- Increase (Decrease) in Net Assets from Institutional Class Share Transactions 4,691 13,222 2,578 1,075 - ----------------------------------------------------------------------------------------------------- --------------------- CLASS N: Shares Issued 1,066 780 1,359 776 Shares Issued in Lieu of Dividends and Distributions 39 44 12 4 Shares Redeemed (808) (706) (598) (643) - ----------------------------------------------------------------------------------------------------- --------------------- Increase (Decrease) in Net Assets from Class N Share Transactions 297 118 773 137 - ----------------------------------------------------------------------------------------------------- --------------------- 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 4,988 13,340 3,351 1,212 - ----------------------------------------------------------------------------------------------------- --------------------- Total Increase (Decrease) in Net Assets 6,217 13,620 5,172 587 - ----------------------------------------------------------------------------------------------------- --------------------- NET ASSETS: Beginning of Period 68,858 55,238 35,311 34,724 - ----------------------------------------------------------------------------------------------------- --------------------- End of Period $ 75,075 $ 68,858 $ 40,483 $ 35,311 ===================================================================================================== ===================== Undistributed (Distribution in Excess of) Net Investment Income $ -- $ (1) $ -- $ -- - ----------------------------------------------------------------------------------------------------- ---------------------
- ---------- (1) SEE NOTE 9 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 70
High Yield Prime Money Bond Fund (000) Market Fund (000) ------------------- -------------------------- 2009 2008 2009 2008 ------------------- -------------------------- OPERATIONS: Net Investment Income $ 2,698 $ 2,807 $ 7,504 $ 61,887 Net Realized Gain (Loss) from Security Transactions (3,203) (526) 117 297 Net Change in Unrealized Appreciation (Depreciation) on Investments 4,440 (5,822) -- -- - ---------------------------------------------------------------------------------------------------- -------------------------- Net Increase (Decrease) in Net Assets Resulting from Operations 3,935 (3,541) 7,621 62,184 - ---------------------------------------------------------------------------------------------------- -------------------------- DIVIDENDS AND DISTRIBUTIONS FROM: Net Investment Income: INSTITUTIONAL CLASS (1,246) (1,258) (2,739) (14,508) CLASS N (1,509) (1,548) (3,352) (30,822) CLASS S -- -- (1,412) (16,569) - ---------------------------------------------------------------------------------------------------- -------------------------- TOTAL DIVIDENDS AND DISTRIBUTIONS (2,755) (2,806) (7,503) (61,899) - ---------------------------------------------------------------------------------------------------- -------------------------- CAPITAL SHARE TRANSACTIONS:(1) INSTITUTIONAL CLASS: Shares Issued 2,072 1,173 1,288,265 1,704,267 Shares Issued in Lieu of Dividends and Distributions 834 862 442 2,772 Shares Redeemed (999) (2,455) (1,278,342) (1,612,805) - ---------------------------------------------------------------------------------------------------- -------------------------- Increase (Decrease) in Net Assets from 1,907 (420) 10,365 94,234 Institutional Class Share Transactions - ----------------------------------------------------------------------------------------------------- -------------------------- CLASS N: Shares Issued 2,628 1,645 2,117,635 3,333,223 Shares Issued in Lieu of Dividends and Distributions 1,002 1,000 1,555 13,996 Shares Redeemed (2,172) (1,689) (2,586,377) (3,093,998) - ---------------------------------------------------------------------------------------------------- -------------------------- Increase (Decrease) in Net Assets from 1,458 956 (467,187) 253,221 Class N Share Transactions - ---------------------------------------------------------------------------------------------------- -------------------------- CLASS S: Shares Issued -- -- 1,140,178 1,657,732 Shares Issued in Lieu of Dividends and Distributions -- -- -- -- Shares Redeemed -- -- (1,401,263) (1,644,197) - ---------------------------------------------------------------------------------------------------- -------------------------- Increase (Decrease) in Net Assets from Class S Share Transactions -- -- (261,085) 13,535 - ---------------------------------------------------------------------------------------------------- -------------------------- Net Increase (Decrease) in Net Assets from Share Transactions 3,365 536 (717,907) 360,990 - ---------------------------------------------------------------------------------------------------- -------------------------- Total Increase (Decrease) in Net Assets 4,545 (5,811) (717,789) 361,275 - ---------------------------------------------------------------------------------------------------- -------------------------- NET ASSETS: Beginning of Period 31,447 37,258 2,290,646 1,929,371 - ---------------------------------------------------------------------------------------------------- -------------------------- End of Period $ 35,992 $ 31,447 $ 1,572,857 $ 2,290,646 ====================================================================================================== ========================= Undistributed (Distribution in Excess of) Net Investment Income $ -- $ 57 $ 87 $ (1) - ---------------------------------------------------------------------------------------------------- -------------------------- Government Money California Tax Exempt Market Fund (000) Money Market Fund (000) ------------------------- ------------------------ 2009 2008 2009 2008 ------------------------- ------------------------ OPERATIONS: Net Investment Income $ 6,637 $ 73,638 $ 2,951 $ 17,077 Net Realized Gain (Loss) from Security Transactions 4 17 -- -- Net Change in Unrealized Appreciation (Depreciation) on Investments -- -- -- -- - ---------------------------------------------------------------------------------------------------- -------------------------- Net Increase (Decrease) in Net Assets Resulting from Operations 6,641 73,655 2,951 17,077 - ---------------------------------------------------------------------------------------------------- -------------------------- DIVIDENDS AND DISTRIBUTIONS FROM: Net Investment Income: INSTITUTIONAL CLASS (356) (1,571) (612) (2,286) CLASS N (5,784) (64,510) (2,109) (12,486) CLASS S (495) (7,574) (232) (2,303) - ---------------------------------------------------------------------------------------------------- -------------------------- TOTAL DIVIDENDS AND DISTRIBUTIONS (6,635) (73,655) (2,953) (17,075) - ---------------------------------------------------------------------------------------------------- -------------------------- CAPITAL SHARE TRANSACTIONS:(1) INSTITUTIONAL CLASS: Shares Issued 655,511 553,021 1,126,167 1,830,572 Shares Issued in Lieu of Dividends and Distributions 8 3 -- -- Shares Redeemed (632,330) (500,209) (1,142,015) (1,762,382) - ---------------------------------------------------------------------------------------------------- -------------------------- Increase (Decrease) in Net Assets from 23,189 52,815 (15,848) 68,190 Institutional Class Share Transactions - ---------------------------------------------------------------------------------------------------- -------------------------- CLASS N: Shares Issued 4,478,647 6,290,498 1,708,583 2,477,610 Shares Issued in Lieu of Dividends and Distributions 4,161 43,391 1,814 9,947 Shares Redeemed (4,940,602) (5,618,090) (1,886,349) (2,302,084) - ---------------------------------------------------------------------------------------------------- -------------------------- Increase (Decrease) in Net Assets from (457,794) 715,799 (175,952) 185,473 Class N Share Transactions - ---------------------------------------------------------------------------------------------------- -------------------------- CLASS S: Shares Issued 659,453 801,055 354,327 409,458 Shares Issued in Lieu of Dividends and Distributions -- -- -- -- Shares Redeemed (769,358) (713,370) (421,688) (446,618) - ---------------------------------------------------------------------------------------------------- -------------------------- Increase (Decrease) in Net Assets from Class S Share Transactions (109,905) 87,685 (67,361) (37,160) - ---------------------------------------------------------------------------------------------------- -------------------------- Net Increase (Decrease) in Net Assets from Share Transactions (544,510) 856,299 (259,161) 216,503 - ---------------------------------------------------------------------------------------------------- -------------------------- Total Increase (Decrease) in Net Assets (544,504) 856,299 (259,163) 216,505 - ---------------------------------------------------------------------------------------------------- -------------------------- NET ASSETS: Beginning of Period 3,516,356 2,660,057 1,179,978 963,473 - ---------------------------------------------------------------------------------------------------- -------------------------- End of Period $ 2,971,852 $ 3,516,356 $ 920,815 $ 1,179,978 ====================================================================================================== ========================= Undistributed (Distribution in Excess of) Net Investment Income $ 17 $ (1) $ -- $ 2 - ---------------------------------------------------------------------------------------------------- --------------------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 71 financial highlights FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD FOR THE YEAR/PERIOD ENDED SEPTEMBER 30, - -------------------------------------------------------------------------------
NET NET REALIZED AND DISTRIBUTIONS NET NET ASSET NET UNREALIZED DIVIDENDS FROM ASSET ASSETS RATIO VALUE INVESTMENT GAINS (LOSSES) FROM NET REALIZED VALUE END OF EXPENSES BEGINNING INCOME ON INVESTMENT CAPITAL END TOTAL OF PERIOD TO AVERAGE OF PERIOD (LOSS)+ SECURITIES I NCOME GAINS OF PERIOD RETURN++ (000) NET ASSETS(1)(2) - ----------------------------------------------------------------------------------------------------------------------------------- LARGE CAP VALUE EQUITY FUND Institutional Class (commenced operations on January 14, 2000) 2009 $ 8.25 $ 0.13 $ (0.98) $ (0.12) $ -- $ 7.28 (10.03)% $ 81,308 0.96% 2008 11.21 0.16 (2.48) (0.15) (0.49) 8.25 (21.57) 88,361 0.95 2007 10.36 0.19 1.38 (0.19) (0.53) 11.21 15.60 110,024 0.96 2006 9.54 0.13 1.21 (0.13) (0.39) 10.36 14.50 92,946 0.96 2005 8.77 0.10 1.13 (0.10) (0.36) 9.54 14.39 42,974 0.96 Class N (commenced operations on April 13, 2000) 2009 $ 8.24 $ 0.12 $ (0.98) $ (0.11) $ -- $ 7.27 (10.27)% $ 8,960 1.21% 2008 11.19 0.13 (2.46) (0.13) (0.49) 8.24 (21.72) 11,712 1.20 2007 10.35 0.16 1.37 (0.16) (0.53) 11.19 15.24 17,190 1.21 2006 9.53 0.11 1.20 (0.10) (0.39) 10.35 14.24 13,104 1.21 2005 8.76 0.09 1.12 (0.08) (0.36) 9.53 14.14 10,664 1.21 - ----------------------------------------------------------------------------------------------------------------------------------- LARGE CAP GROWTH EQUITY FUND Institutional Class (commenced operations on January 14, 2000) 2009 $ 7.38 $ 0.04 $ (0.30) $ (0.04) $ -- $ 7.08 (3.36)% $ 28,050 0.99% 2008 8.86 0.03 (1.48) (0.03) -- 7.38 (16.40) 31,074 0.98 2007 7.75 0.05 1.10 (0.04) -- 8.86 14.91 45,784 0.99 2006 7.43 0.02 0.32 (0.02) -- 7.75 4.59 35,842 0.99 2005 6.76 0.04 0.67 (0.04) -- 7.43 10.55 34,164 0.98 Class N (commenced operations on March 28, 2000) 2009 $ 7.31 $ 0.03 $ (0.31) $ (0.03) $ -- $ 7.00 (3.77)% $ 9,120 1.24% 2008 8.77 0.01 (1.46) (0.01) -- 7.31 (16.55) 11,341 1.23 2007 7.68 0.01 1.10 (0.02) -- 8.77 14.51 15,063 1.24 2006 7.35 -- 0.33 --# -- 7.68 4.55 10,363 1.24 2005 6.69 0.02 0.67 (0.03) -- 7.35 10.28 8,278 1.23 - ----------------------------------------------------------------------------------------------------------------------------------- RCB SMALL CAP VALUE FUND Institutional Class (commenced operations on October 3, 2001) 2009 $ 16.42 $ (0.02) $ 2.35 $ (0.29) $ -- $ 18.46 15.20% $ 2,317 1.19% 2008 30.79 0.19 (9.57) -- (4.99) 16.42 (35.01) 1,742 1.19 2007 28.25 0.02 3.00 (0.01) (0.47) 30.79 10.65 9,062 1.19 2006 28.58 0.06 0.05 (0.07) (0.37) 28.25 0.40 13,435 1.20 2005 27.30 0.07 2.58 -- (1.37) 28.58 9.87 13,975 1.18 Class N (commenced operations on October 3, 2001) 2009 $ 16.14 $ (0.05) $ 2.30 $ (0.27) $ -- $ 18.12 14.91% $ 4,226 1.44% 2008 30.42 0.15 (9.44) -- (4.99) 16.14 (35.16) 4,262 1.44 2007 27.98 (0.05) 2.96 -- (0.47) 30.42 10.37 9,753 1.44 2006 28.31 (0.01) 0.05 --# (0.37) 27.98 0.17 10,470 1.45 2005 27.13 0.00 2.55 -- (1.37) 28.31 9.55 12,754 1.43 Class R (commenced operations on September 30, 1998) 2009 $ 16.15 $ 0.01 $ 2.31 $ (0.32) $ -- $ 18.15 15.50% $ 16,755 0.97% 2008 30.38 0.20 (9.44) -- (4.99) 16.15 (35.02) 19,183 1.23 2007 27.93 (0.05) 2.97 -- (0.47) 30.38 10.43 40,944 1.44 2006 28.27 (0.01) 0.04 --# (0.37) 27.93 0.14 45,836 1.45 2005 27.09 0.01 2.54 -- (1.37) 28.27 9.56 57,787 1.43 - ----------------------------------------------------------------------------------------------------------------------------------- OPPORTUNISTIC VALUE FUND Institutional Class (commenced operations on June 26, 2008) 2009 $ 9.31 $ 0.07 $ (1.11) $ (1.68) $ -- $ 6.59 (6.81)% $ 156 0.93% 2008 10.00 0.05 (0.74) -- -- 9.31 (6.90) -- 0.23(3) Class N (commenced operations on June 26, 2008) 2009 $ 9.31 $ 0.06 $ (1.12) $ (1.67) $ -- $ 6.58 (7.12)% $ 11 1.22% 2008 10.00 0.04 (0.73) -- -- 9.31 (6.90) 7 1.20(3) Class E (commenced operations on June 26, 2008) 2009 $ 9.30 $ 0.09 $ (1.21) $ (1.70) $ -- $ 6.48 (7.57)% $ 26,098 0.68% 2008 10.00 0.04 (0.74) -- -- 9.30 (7.00) 45,239 0.69(3) - ----------------------------------------------------------------------------------------------------------------------------------- MULTI-ASSET FUND Institutional Class (commenced operations on October 1, 2007) 2009 $ 9.70 $ 0.15 $ 0.18 $ (0.16) $ -- $ 9.87 3.54% $ 8,423 0.83% 2008 11.00 0.25 (1.32) (0.23) -- 9.70 (9.84) 10,741 1.29 Class N (commenced operations on October 1, 2007) 2009 $ 9.69 $ 0.13 $ 0.18 $ (0.14) $ -- $ 9.86 3.29% $ 16,837 1.09% 2008 11.00 0.23 (1.33) (0.21) -- 9.69 (10.12) 16,708 1.53 RATIO OF EXPENSES RATIO TO AVERAGE OF NET NET ASSETS INVESTMENT (EXCLUDING INCOME (LOSS) WAIVERS & PORTFOLIO TO AVERAGE RECOVERED TURNOVER NET ASSETS(1) FEES)(1) RATE Large Cap Value Equity Fund Institutional Class (commenced operations on January 14, 2000) 2009 2.11% 0.97% 18% 2008 1.64 0.96 36 2007 1.73 0.97 24 2006 1.36 0.97 31 2005 1.12 0.97 34 Class N (commenced operations on April 13, 2000) 2009 1.89% 1.22% 18% 2008 1.38 1.21 36 2007 1.47 1.22 24 2006 1.13 1.22 31 2005 0.87 1.22 34 - ------------------------------------------------------------- Large Cap Growth Equity Fund Institutional Class (commenced operations on January 14, 2000) 2009 0.70% 1.00% 12% 2008 0.35 0.99 26 2007 0.52 1.00 30 2006 0.27 1.00 34 2005 0.57 1.00 27 Class N (commenced operations on March 28, 2000) 2009 0.45% 1.25% 12% 2008 0.11 1.24 26 2007 0.28 1.25 30 2006 0.03 1.25 34 2005 0.33 1.25 27 - ------------------------------------------------------------- RCB Small Cap Value Fund Institutional Class (commenced operations on October 3, 2001) 2009 (0.13)% 1.20% 62% 2008 0.85 1.20 78 2007 0.08 1.20 57 2006 0.20 1.21 66 2005 0.26 1.20 41 Class N (commenced operations on October 3, 2001) 2009 (0.37)% 1.45% 62% 2008 0.70 1.45 78 2007 (0.16) 1.45 57 2006 (0.04) 1.46 66 2005 0.01 1.45 41 Class R (commenced operations on September 30, 1998) 2009 0.08% 1.55% 62% 2008 0.92 1.55 78 2007 (0.17) 1.45 57 2006 (0.04) 1.46 66 2005 0.02 1.45 41 - ------------------------------------------------------------- Opportunistic Value Fund Institutional Class (commenced operations on June 26, 2008) 2009 1.13% 0.94% 144% 2008 1.83 0.23(3) 5 Class N (commenced operations on June 26, 2008) 2009 0.98% 1.23% 144% 2008 1.50 1.23(3) 5 Class E (commenced operations on June 26, 2008) 2009 1.53% 0.69% 144% 2008 1.44 0.70(3) 5 - ------------------------------------------------------------- Multi-Asset Fund Institutional Class (commenced operations on October 1, 2007) 2009 1.71% 0.84% 94% 2008 2.37 1.30 141 Class N (commenced operations on October 1, 2007) 2009 1.46% 1.10% 94% 2008 2.22 1.54 141
- ---------- + PER SHARE CALCULATIONS ARE BASED ON AVERAGE SHARES OUTSTANDING THROUGHOUT THE PERIOD. ++ 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. # AMOUNT REPRESENTS LESS THAN $0.01 PER SHARE. (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. (3) RATIO REFLECTS THE IMPACT OF THE INITIAL LOW LEVEL OF AVERAGE NET ASSETS ASSOCIATED WITH COMMENCEMENT OF OPERATIONS. AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 72
NET NET REALIZED AND DISTRIBUTNETS NET ASSET UNREALIZD DIVIDENDS FROM ASSETS VALUE NET GAINS (LOSSES) FROM NET REALIZED VALUE BEGINNING INVESTMENT ON INVESTMENT CAPITAL END OF PERIOD INCOME SECURITIIS+ INCOME GAINS OF PERIOD - --------------------------------------------------------------------------------------------- Corporate Bond Fund Institutional Class (commenced operations on January 14, 2000) 2009 $ 9.76 $ 0.39 $ 0.80 $ (0.39) $ -- $ 10.56 2008 10.18 0.43 (0.41) (0.44) -- 9.76 2007 10.17 0.45 -- (0.44) -- 10.18 2006 10.27 0.42 (0.10) (0.42) -- 10.17 2005 10.60 0.40 (0.27) (0.40) (0.06) 10.27 Class N (commenced operations on April 13, 2000) 2009 $ 9.77 $ 0.36 $ 0.81 $ (0.37) $ -- $ 10.57 2008 10.18 0.41 (0.41) (0.41) -- 9.77 2007 10.17 0.42 0.01 (0.42) -- 10.18 2006 10.27 0.39 (0.10) (0.39) -- 10.17 2005 10.61 0.37 (0.28) (0.37) (0.06) 10.27 - --------------------------------------------------------------------------------------------- Government Bond Fund Institutional Class (commenced operations on January 14, 2000) 2009 $ 10.40 $ 0.35 $ 0.18 $ (0.35) $ -- $ 10.58 2008 10.33 0.42 0.08 (0.43) -- 10.40 2007 10.28 0.46 0.05 (0.46) -- 10.33 2006 10.40 0.41 (0.12) (0.41) -- 10.28 2005 10.62 0.31 (0.16) (0.31) (0.06) 10.40 Class N (commenced operations on April 13, 2000) 2009 $ 10.42 $ 0.32 $ 0.18 $ (0.32) $ -- $ 10.60 2008 10.35 0.40 0.07 (0.40) -- 10.42 2007 10.30 0.44 0.04 (0.43) -- 10.35 2006 10.42 0.39 (0.12) (0.39) -- 10.30 2005 10.64 0.29 (0.17) (0.28) (0.06) 10.42 - --------------------------------------------------------------------------------------------- California Tax Exempt Bond Fund Institutional Class (commenced operations on January 14, 2000) 2009 $ 10.06 $ 0.33 $ 0.51 $ (0.33) $ -- $ 10.57 2008 10.24 0.32 (0.18) (0.32) -- 10.06 2007 10.25 0.31 (0.01) (0.31) -- 10.24 2006 10.26 0.29 0.03 (0.29) (0.04) 10.25 2005 10.41 0.28 (0.11) (0.28) (0.04) 10.26 Class N (commenced operations on April 13, 2000) 2009 $ 10.09 $ 0.30 $ 0.51 $ (0.30) $ -- $ 10.60 2008 10.27 0.30 (0.18) (0.30) -- 10.09 2007 10.27 0.28 -- (0.28) -- 10.27 2006 10.29 0.26 0.02 (0.26) (0.04) 10.27 2005 10.44 0.25 (0.11) (0.25) (0.04) 10.29 - --------------------------------------------------------------------------------------------- High Yield Bond Fund Institutional Class (commenced operations on January 14, 2000) 2009 $ 7.40 $ 0.62 $ 0.18 $ (0.64) $ -- $ 7.56 2008 8.91 0.64 (1.47) (0.68) -- 7.40 2007 8.96 0.70 (0.06) (0.69) -- 8.91 2006 9.04 0.68 (0.08) (0.68) -- 8.96 2005 9.31 0.71 (0.27) (0.71) -- 9.04 Class N (commenced operations on January 14, 2000) 2009 $ 7.40 $ 0.60 $ 0.18 $ (0.62) $ -- $ 7.56 2008 8.91 0.62 (1.47) (0.66) -- 7.40 2007 8.96 0.68 (0.07) (0.66) -- 8.91 2006 9.04 0.65 (0.08) (0.65) -- 8.96 2005 9.31 0.69 (0.27) (0.69) -- 9.04 RATIO TO EXPENSES RATIO TO AVERAGE NET OF NET NET ASSET ASSETS RATIO INVESTMENT (EXCLUDING END OF EXPENSES INCOME WAIVERS & PORTFOLIO TOTAL OF PERIOD TO AVERAGE TO AVERAGE RECOVERED TURNOVER RETURN++ (000) NET ASSETS(1)(2) NET ASSETS(1) FEES)(1) RATE - ------------------------------------------------------------------------------------------------ Corporate Bond Fund Institutional Class (commenced operations on January 14, 2000) 2009 12.48% $ 88,897 0.74% 3.88% 0.75% 30% 2008 0.04 69,709 0.73 4.25 0.74 12 2007 4.57 62,210 0.74 4.39 0.75 30 2006 3.19 55,290 0.75 4.14 0.75 25 2005 1.26 51,193 0.75 3.80 0.76 25 Class N (commenced operations on April 13, 2000) 2009 12.19% $ 995 0.99% 3.59% 1.00% 30% 2008 (0.11) 608 0.98 4.02 0.99 12 2007 4.30 1,043 0.99 4.13 1.00 30 2006 2.93 1,332 1.00 3.88 1.00 25 2005 0.91 1,530 1.00 3.55 1.01 25 - ------------------------------------------------------------------------------------------------ Government Bond Fund Institutional Class (commenced operations on January 14, 2000) 2009 5.18% $ 71,966 0.70% 3.29% 0.77% 85% 2008 4.87 66,097 0.70 4.05 0.77 36 2007 5.04 52,606 0.70 4.50 0.77 83 2006 2.89 35,671 0.70 4.04 0.78 62 2005 1.42 28,132 0.70 2.98 0.79 58 Class N (commenced operations on April 13, 2000) 2009 4.91% $ 3,109 0.95% 3.04% 1.02% 85% 2008 4.59 2,761 0.95 3.80 1.02 36 2007 4.77 2,632 0.95 4.25 1.02 83 2006 2.63 1,782 0.95 3.81 1.03 62 2005 1.16 554 0.95 2.70 1.04 58 - ------------------------------------------------------------------------------------------------ California Tax Exempt Bond Fund Institutional Class (commenced operations on January 14, 2000) 2009 8.45% $ 38,581 0.50% 3.18% 0.61% 50% 2008 1.38 34,262 0.50 3.13 0.61 55 2007 2.98 33,804 0.50 3.04 0.62 43 2006 3.18 26,074 0.50 2.85 0.62 43 2005 1.65 22,768 0.50 2.70 0.63 54 Class N (commenced operations on April 13, 2000) 2009 8.15% $ 1,902 0.75% 2.92% 0.87% 50% 2008 1.12 1,049 0.75 2.87 0.86 55 2007 2.82 922 0.75 2.78 0.87 43 2006 2.81 1,134 0.75 2.59 0.87 43 2005 1.39 1,487 0.75 2.43 0.88 54 - ------------------------------------------------------------------------------------------------ High Yield Bond Fund Institutional Class (commenced operations on January 14, 2000) 2009 12.94% $ 16,355 1.00% 9.75% 1.10% 59% 2008 (9.83) 13,926 1.00 7.72 1.09 20 2007 7.27 17,137 1.00 7.73 1.10 26 2006 6.90 20,887 1.00 7.58 1.10 23 2005 4.85 22,588 1.00 7.71 1.11 46 Class N (commenced operations on January 14, 2000) 2009 12.61% $ 19,637 1.30% 9.43% 1.40% 59% 2008 (10.10) 17,521 1.30 7.43 1.39 20 2007 6.95 20,121 1.30 7.44 1.40 26 2006 6.58 20,045 1.30 7.28 1.40 23 2005 4.54 21,028 1.30 7.41 1.41 46
- ---------- + PER SHARE CALCULATIONS ARE BASED ON THE AVERAGE SHARES OUTSTANDING THROUGHOUT THE PERIOD. ++ 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. AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD FOR THE YEAR/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 INVESTMEIT NVESTMENT 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) 2009 $ 1.00 $ 0.005 $ (0.005) $ 1.00 0.46% $ 543,326 0.44% 0.46% 0.65% 2008 1.00 0.030 (0.030) 1.00 3.01 532,931 0.58 2.90 0.58 2007 1.00 0.047 (0.047) 1.00 4.85 438,639 0.59 4.74 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 Class N (commenced operations on October 18, 1999) 2009 $ 1.00 $ 0.003 $ (0.003) $ 1.00 0.33% $ 656,769 0.61% 0.39% 1.15% 2008 1.00 0.027 (0.027) 1.00 2.78 1,123,900 0.80 2.65 1.08 2007 1.00 0.045 (0.045) 1.00 4.62 870,537 0.81 4.52 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 Class S (commenced operations on October 26, 1999) 2009 $ 1.00 $ 0.002 $ (0.002) $ 1.00 0.23% $ 372,762 0.73% 0.28% 1.15% 2008 1.00 0.025 (0.025) 1.00 2.57 633,815 1.00 2.54 1.08 2007 1.00 0.043 (0.043) 1.00 4.41 620,195 1.01 4.32 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 - --------------------------------------------------------------------------------------------------------------------------------- GOVERNMENT MONEY MARKET FUND Institutional Class (commenced operations on April 3, 2000) 2009 $ 1.00 $ 0.003 $ (0.003) $ 1.00 0.27% $ 123,863 0.36% 0.26% 0.65% 2008 1.00 0.027 (0.027) 1.00 2.72 100,674 0.59 2.62 0.59 2007 1.00 0.047 (0.047) 1.00 4.77 47,858 0.60 4.67 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 Class N (commenced operations on June 21, 1999) 2009 $ 1.00 $ 0.002 $ (0.002) $ 1.00 0.19% $2,549,147 0.47% 0.21% 1.13% 2008 1.00 0.025 (0.025) 1.00 2.49 3,006,935 0.81 2.40 1.09 2007 1.00 0.044 (0.044) 1.00 4.54 2,291,138 0.82 4.45 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 Class S (commenced operations on October 6, 1999) 2009 $ 1.00 $ 0.001 $ (0.001) $ 1.00 0.12% $ 298,842 0.54% 0.13% 1.13% 2008 1.00 0.023 (0.023) 1.00 2.29 408,747 1.02 2.23 1.09 2007 1.00 0.042 (0.042) 1.00 4.33 321,061 1.02 4.24 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 - --------------------------------------------------------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT MONEY MARKET FUND Institutional Class (commenced operations on April 3, 2000) 2009 $ 1.00 $ 0.003 $ (0.003) $ 1.00 0.33% $ 141,579 0.30% 0.31% 0.65% 2008 1.00 0.018 (0.018) 1.00 1.80 157,427 0.55 1.69 0.61 2007 1.00 0.030 (0.030) 1.00 3.01 89,237 0.55 2.97 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 Class N (commenced operations on June 21, 1999) 2009 $ 1.00 $ 0.002 $ (0.002) $ 1.00 0.23% $ 704,840 0.41% 0.25% 1.16% 2008 1.00 0.016 (0.016) 1.00 1.57 880,794 0.78 1.47 1.11 2007 1.00 0.027 (0.027) 1.00 2.78 695,318 0.78 2.73 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 Class S (commenced operations on November 12, 1999) 2009 $ 1.00 $ 0.002 $ (0.002) $ 1.00 0.17% $ 74,396 0.54% 0.26% 1.16% 2008 1.00 0.014 (0.014) 1.00 1.37 141,757 0.98 1.40 1.11 2007 1.00 0.025 (0.025) 1.00 2.57 178,918 0.98 2.55 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
- ---------- * 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 74 notes to financial statements SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- 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 17 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, Opportunistic Value 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"); Prime Money Market Fund, Government Money Market Fund, California Tax Exempt Money Market Fund (collectively, the "Money Market Funds"); and Multi-Asset Fund (each a "Fund," collectively, the "Funds").The Equity and Fixed Income Funds and the Multi-Asset Fund are registered to offer Institutional and Class N Shares; in addition, the Opportunistic Value Fund is registered to offer Class E Shares and the RCB Small Cap Value Fund is registered to offer Class R Shares.The Money Market Funds are registered to offer Institutional, Class N 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 descriptions of each Fund's investment objectives, policies and strategies. Class N and Institutional Class shares of the Multi-Asset Fund commenced operations on October 1, 2007. Class E, Class N and Institutional Class shares of the Opportunistic Value Fund commenced operations on June 26, 2008. Effective January 31, 2008, Class A shares of the Funds were redesignated as Class N shares.There were no changes to the rights, fees or expenses of the Class A shares or services provided to Class A shareholders in connection with the change in designation to Class N. 2. SIGNIFICANT ACCOUNTING POLICIES: The following is a summary of significant accounting policies followed by the Funds. FINANCIAL ACCOUNTING STANDARDS BOARD ("FASB") LAUNCHES ACCOUNTING STANDARDS CODIFICATION -- The FASB has issued FASB ASC 105 (formerly FASB Statement No. 168) THE "FASB ACCOUNTING STANDARDS CODIFICATION(TM)" AND THE HIERARCHY OF GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("ASC 105"). ASC 105 established the FASB Accounting Standards Codification(TM) ("Codification" or "ASC") as the single source of authoritative U.S. generally accepted accounting principles ("GAAP") recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission ("SEC") under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants.The Codification supersedes all existing non-SEC accounting and reporting standards.All other non-grandfathered, non-SEC accounting literature not included in the Codification will become non-authoritative. Following the Codification, the FASB will not issue new standards in the form of Statements, FASB Staff Positions or Emerging Issues Task Force Abstracts. Instead, it will issue Accounting Standards Updates, which will serve to update the Codification, provide background information about the guidance and provide the basis for conclusions on the changes to the Codification. GAAP is not intended to be changed as a result of the FASB's Codification project, but it will change the way the guidance is organized and presented.As a result, these changes will have a significant impact on how companies reference GAAP in their financial statements and in their accounting policies for financial statements issued for interim and annual periods ending after September 15, 2009.The Trust has implemented the Codification as of September 30, 2009. USE OF ESTIMATES -- The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period.Actual results could differ from those estimates. SECURITY VALUATION -- Securities listed on a securities exchange, market or automated quotation system for which quotations are readily available (except for securities traded on NASDAQ) are valued at the last quoted sale price on the primary exchange or market (foreign or domestic) on which they are traded, or, if there is no such reported sale, at the most recent quoted bid price. For securities traded on NASDAQ, the NASDAQ Official Closing Price is 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, including money market funds, 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. Investments in registered CNI CHARTER FUNDS | PAGE 75 notes to financial statements SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- investment companies are priced at the Fund's daily net asset value. 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. ASC 820 (formerly known as FAS No. 157 "Fair Value Measurements") establishes a fair value hierarchy and specifies that a valuation technique used to measure fair value shall maximize the use of observable inputs and minimize the use of unobservable inputs.The objective of a fair value measurement is to determine the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). Accordingly, the fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).The three levels of the fair value hierarchy under ASC 820 are described below: o Level 1 -- Unadjusted quoted prices in active markets for identical, unrestricted assets or liabilities that the Funds have the ability to access at the measurement date; o Level 2 -- Quoted prices which are not active, or inputs that are observable (either directly or indirectly) for substantially the full term of the asset or liability; and o Level 3 -- Prices, inputs or exotic modeling techniques which are both significant to the fair value measurement and unobservable (supported by little or no market activity). As required by ASC 820, investments are classified within the level of the lowest significant input considered in determining fair value. Investments classified within Level 3 whose fair value measurement considers several inputs may include Level 1 or Level 2 inputs as components of the overall fair value measurement. For the year ended September 30, 2009, there have been no significant changes to the Funds' fair valuation methodologies. 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 an 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, which approximates the effective interest method over the holding period of a security, except for the Money Market funds which use a straight line basis. REPURCHASE AGREEMENTS -- Securities pledged as collateral for repurchase agreements are held by each Fund's custodian bank, U.S. Bank, N.A., 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. CNI CHARTER FUNDS | PAGE 76 - -------------------------------------------------------------------------------- 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, Opportunistic Value and Multi-Asset 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. DEFERRED OFFERING COSTS -- All offering costs incurred with the start up of a Fund are being amortized on a straight line basis over a period of twelve months from commencement of operations.As of September 30, 2009, the Opportunistic Value Fund deferred offering costs were fully amortized. 3. ADMINISTRATION,TRANSFER AGENT, DISTRIBUTION AND SHAREHOLDER SERVICES AGREEMENTS: Pursuant to an administration agreement dated April 1, 1999, as amended April 1, 2008 (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, 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, 0.025% of aggregate average daily net assets of the Trust exceeding $5 billion but not exceeding $7.5 billion, and 0.02% of aggregate average daily net assets of the Trust exceeding $7.5 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 N, Class S and Class R Shares that allows each Fund to pay distribution and servicing fees. SEI Investments Distribution Co. (the "Distributor") 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 N Shares and Class S Shares of the Money Market Funds and 0.25% of the Class N Shares of the Equity Funds, Fixed Income Funds and the Multi-Asset Fund and the Class R Shares of the RCB Small Cap Value Fund, with the exception of 0.30% charged to the Class N Shares of the High Yield Bond Fund, which may be used by the Distributor to provide compensation for sales support and distribution-related activities. The RCB Small Cap Equity Fund Class R shares ceased accruing 25 basis points in 12b-1 fees from January 1, 2008 to September 30, 2009 in order to use excess 12b-1 fees held by the Fund and its Distributor.The excess 12b-1 fees that were held by the Distributor as of December 31, 2008 were reimbursed to the RCB Small Cap Equity Fund Class R on February 27, 2009. The Trust and the Distributor are parties to a distribution agreement dated April 1, 1999. SEI Institutional Transfer Agency, a division of SEI Investments Fund Management Corporation (the "Transfer Agent"), serves as transfer agent for the Trust and provides services at an annual rate of $15,000 per share class.The Transfer Agent has agreed to waive these fees.The Class R shares of the RCB Small Cap Value Fund began paying the sub-transfer agent, Citigroup Fund Services, LLC, fees commencing February 1, 2008. The Trust has entered into Shareholder Servicing Agreements that permit payment of compensation to City National Bank ("CNB") and its affiliates, which provide certain shareholder support for their customers who own Institutional Class, Class N, 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. CNB has agreed to voluntarily waive portions of its shareholder servicing fees with respect to certain Funds. For the year ended September 30, 2009, CNB received Shareholder Servicing fees from the Trust in the amount of $13,452,291. Certain officers of the Trust are also officers of City National Asset Management, Inc. ("CNAM, Inc." or the "Adviser") or 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, Inc., 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, 0.50% of the average daily net assets of the Opportunistic Value Fund, 0.50% of the average daily net assets of the Multi-Asset 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. CNICHARTER FUNDS | PAGE 77 notes to financial statements SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- REED, CONNER & BIRDWELL, LLC acts as the investment sub-adviser with respect to the RCB Small Cap Value Fund. Effective April 15, 2009, GUGGENHEIM INVESTMENT MANAGEMENT, LLC replaced Halbis Capital Management (USA), Inc. as the investment sub-adviser to the High Yield Bond Fund. SKBA CAPITAL MANAGEMENT, LLC acts as the investment sub-adviser with respect to the Opportunistic Value 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. In the case of the RCB Small Cap Value Fund and the Opportunistic Value Fund, the Fund's sub-adviser has contractually agreed to limit its fees or reimburse expenses to meet the expense limitations.The expense limitations (expressed as percentages of average daily net assets) are as follows:
Large Cap Large Cap RCB Value Growth Small Cap Opportunistic Equity Equity Value Value Fund Fund Fund Fund - ----------------------------------------------------------------------------- Institutional Class 1.00% 1.05% 1.24% 1.00% Class N 1.25% 1.30% 1.49% 1.25% Class E -- -- -- 0.75% Class R -- -- 1.49% -- - -----------------------------------------------------------------------------
California Multi- Corporate Government Tax Exempt Asset Bond Bond Bond Fund Fund Fund Fund - ----------------------------------------------------------------------------- Institutional Class 1.75% 0.75% 0.70% 0.50% Class N 2.00% 1.00% 0.95% 0.75% - -----------------------------------------------------------------------------
California High Yield Prime Government Tax Exempt Bond Money Market Money Market Money Market Fund Fund Fund Fund - -------------------------------------------------------------------------------- Institutional Class 1.00% 0.63% 0.63% 0.55% Class N 1.30% 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 (or relevant sub-adviser, as applicable) 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. During the year ended September 30, 2009, the Board of Trustees approved the reimbursement of previously waived fees by the Adviser in the amount of $1,479 in the Opportunistic Value Fund. As of September 30, 2009, fees which were previously waived by the Adviser (or relevant sub-adviser, as applicable) which may be subject to possible future reimbursement to the Adviser (or relevant sub-adviser, as applicable) were as follows:
Potential Amount of Fund Recovery (000) Expiration - ------------------------------------------------------------------------ Corporate Bond $ 2 2012 Government Bond 31 2010 39 2011 49 2012 California Tax Exempt Bond 34 2010 34 2011 39 2012 High Yield Bond 35 2010 29 2011 25 2012 Prime Money Market 880 2012 Government Money Market 2,210 2012 California Tax Exempt Money Market 494 2010 583 2011 1,568 2012
The Adviser, Administrator and Distributor have voluntarily agreed to further waive and reduce their fees and/or reimburse certain expenses of the Money Market Funds in order to maintain a one-day net income yield (yield floor) of the Funds of not less than 0.01% of the Funds' average daily net assets.The following table shows waivers, with respect to such yield floor, by class for the year ended September 30, 2009:
Shareholder Investment Administration Servicing Fee Advisor Fee Fee Waiver Waiver Waiver (000) (000) (000) - --------------------------------------------------------------------------------- Prime Money Market Institutional Class $ 869 $ 300 $ 29 Class N 1,918 374 37 Class S 1,558 206 19 - --------------------------------------------------------------------------------- Government Money Market Institutional Class 258 101 7 Class N 8,803 1,855 138 Class S 1,684 254 18 - --------------------------------------------------------------------------------- California Tax Exempt Money Market Institutional Class 386 167 11 Class N 2,704 707 43 Class S 365 63 4 - ---------------------------------------------------------------------------------
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 year ended September 30, 2009, were as follows for the Equity Funds, Multi-Asset Fund and Fixed Income Funds:
Purchases Sales and Maturities - ----------------------------------------------------------------------------- U.S. Gov't Other U.S.Gov't Other Fund (000) (000) (000) (000) - ----------------------------------------------------------------------------- Large Cap Value Equity $ -- $ 14,899 $ -- $ 13,903 Large Cap Growth Equity -- 4,096 -- 7,239 RCB Small Cap Value -- 11,055 -- 16,995 Opportunistic Value -- 29,693 -- 41,656 Multi-Asset -- 14,687* 2,145 13,571* Corporate Bond 545 43,348 3,736 17,010 Government Bond 63,456 2,164 51,811 7,114 California Tax Exempt Bond -- 20,585 -- 17,549 High Yield Bond -- 17,687 -- 15,723
* INCLUDES $385(000) AND $986(000) OF PURCHASES AND SALES, RESPECTIVELY, OF AFFILIATED INVESTMENT COMPANIES. CNI CHARTER FUNDS | PAGE 78 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. Management has analyzed the Funds' tax position taken on federal income tax returns for all open tax years and has concluded that as of September 30, 2009, no provision for income tax would be required in the Funds' financial statements.The Funds' federal and state income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue. 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. Accordingly, the following permanent differences, primarily attributable to REIT adjustments, corporate action adjustments, realized gains (losses) on paydowns and timing of distributions and investments in partnerships, were reclassified to/from the following accounts as of September 30, 2009:
Increase Increase (Decrease) (Decrease) Undistributed Accumulated Net Investment Net Realized Income (Loss) Gain (Loss) Fund (000) (000) - ------------------------------------------------------- RCB Small Cap Value $ 22 $ (22) Multi-Asset 10 (10) Corporate Bond (1) 1 Government Bond 30 (30) Prime Money Market 87 (87) Government Money Market 16 (16) - -------------------------------------------------------
These reclassifications had no effect on net assets or net asset value per share. The tax character of dividends and distributions declared during the years ended September 30, 2009 and September 30, 2008 are shown below:
Tax Exempt Ordinary Long-term Income Income Capital Gain Total Fund (000) (000) (000) (000) - ---------------------------------------------------------------------------- Large Cap Value Equity 2009 $ -- $ 1,495 $ -- $ 1,495 2008 -- 1,828 5,488 7,316 Large Cap Growth Equity 2009 -- 222 -- 222 2008 -- 152 -- 152 RCB Small Cap Value 2009 -- 439 -- 439 2008 -- 3,067 6,538 9,605 Opportunistic Value 2009 -- 503 -- 503 2008 -- -- -- -- Multi-Asset 2009 -- 375 -- 375 2008 -- 473 -- 473 Corporate Bond 2009 -- 2,952 -- 2,952 2008 -- 2,888 -- 2,888 Government Bond 2009 -- 2,435 -- 2,435 2008 -- 2,639 -- 2,639 California Tax Exempt Bond 2009 1,151 -- -- 1,151 2008 1,063 -- -- 1,063 High Yield Bond 2009 -- 2,755 -- 2,755 2008 -- 2,806 -- 2,806 Prime Money Market 2009 -- 7,503 -- 7,503 2008 -- 61,899 -- 61,899 Government Money Market 2009 -- 6,635 -- 6,635 2008 -- 73,655 -- 73,655 California Tax Exempt Money Market 2009 2,953 -- -- 2,953 2008 17,064 11 -- 17,075
CNI CHARTER FUNDS | PAGE 79 notes to financial statements SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- As of September 30, 2009, the components of Distributable Earnings/(Accumulated Losses) on a tax basis were as follows:
Total Distributable Undistributed Undistributed Capital Unrealized Other Earnings Tax-Exempt Ordinary Loss Post-October Appreciation Temporary (Accumulated Income Income Carryforwards Losses (Depreciation) Differences Losses) Fund (000) (000) (000) (000) (000) (000) (000) - ---------------------------------------------------------------------------------------------------------------------------------- Large Cap Value Equity $ -- $ 322 $ (2,810) $ (7,763) $ (3,800) $ (321) $ (14,372) Large Cap Growth Equity -- 37 (2,607) (1,454) 673 (37) (3,388) RCB Small Cap Value -- 14 (589) (8,608) 3,746 -- (5,437) Opportunistic Value -- 72 (2,050) (15,678) 7,145 (72) (10,583) Multi-Asset -- 74 (2,309) (1,645) 876 (63) (3,067) Corporate Bond -- 256 (541) (675) 3,654 (256) 2,438 Government Bond -- 167 (113) -- 1,236 (167) 1,123 California Tax Exempt Bond 101 -- (186) -- 1,432 (100) 1,245 High Yield Bond -- 264 (1,621) (2,936) (2,057) (264) (6,614) Prime Money Market -- 321 -- -- -- (117) 204 Government Money Market -- 92 -- -- -- (71) 21 California Tax Exempt Money Market 32 -- -- -- -- (31) 1
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, 2009, the breakdown of capital loss carryforwards was as follows:
Expiring September 30, --------------------------------------------------------------- 2010 2011 2012 2014 2015 2016 2017 Fund (000) (000) (000) (000) (000) (000) (000) - ----------------------------------------------------------------------------------------- Large Cap Value Equity $ -- $ -- $ -- $ -- $ -- $ -- $2,810 Large Cap Growth Equity 82 1,844 227 -- -- -- 454 RCB Small Cap Value -- -- -- -- -- -- 589 Opportunistic Value -- -- -- -- -- -- 2,050 Multi-Asset -- -- -- -- -- -- 2,309 Corporate Bond -- -- -- 64 271 116 90 Government Bond -- -- -- -- 12 101 -- California Tax Exempt Bond -- -- -- -- 34 7 145 High Yield Bond -- 521 -- 268 -- -- 832
During the year ended September 30, 2009, the following Fund utilized capital loss carryforwards to offset capital gains amounting to:
Amount Fund (000) - ---------------------------------- Government Bond $ 422 - ----------------------------------
Post-October losses represent losses realized on investments and foreign currency transactions from November 1, 2008 through September 30, 2009 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 September 30, 2009 for each of the Equity and Fixed Income Funds and Multi-Asset Fund 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 $94,074 $ 8,337 $ (12,137) $ (3,800) Large Cap Growth Equity 36,510 4,488 (3,815) 673 RCB Small Cap Value 19,907 6,146 (2,400) 3,746 Opportunistic Value 19,347 7,359 (214) 7,145 Multi Asset 23,817 1,424 (548) 876 Corporate Bond 84,819 3,721 (67) 3,654 Government Bond 73,451 1,263 (27) 1,236 California Tax Exempt Bond 39,050 1,454 (22) 1,432 High Yield Bond 37,256 1,202 (3,259) (2,057)
At September 30, 2009, the Money Market Funds' cost of securities for Federal income tax purposes approximates the cost disclosed in the Schedule of Investments. 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. The Multi-Asset Fund may invest in exchange-traded notes ("ETNs") as a non-principal investment strategy. ETNs are unsecured debt obligations of investment banks which are traded on exchanges and the returns of which are linked to the performance of market indexes. In addition to trading ETNs on exchanges, investors may redeem ETNs directly with the issuer on a weekly basis, typically in a minimum amount of 50,000 units, or hold the ETNs until maturity. ETNs are riskier than ordinary unsecured debt securities and have no principal protection.The Fund will generally invest in ETNs which are linked to commodities indexes.The Fund's investment in an ETN may be influenced by many unpredictable factors, including highly volatile commodities prices, changes in supply and demand relationships, weather, agriculture, trade, changes in interest rates, and monetary and other governmental policies, action and inaction. Investing in ETNs is not equivalent to investing directly in index CNI CHARTER FUNDS | PAGE 80 components or the relevant index itself. Because ETNs are debt securities, they possess credit risk; if the issuer has financial difficulties or goes bankrupt, the investor may not receive the return it was promised. ASC 815 (formerly known as FAS No. 161 "Disclosures about Derivative Instruments and Hedging Activities") was adopted by the Trust effective April 1, 2009. ASC 815 requires enhanced disclosures about the Funds' derivative and hedging activities, including how such activities are accounted for and their effect on the Funds' financial position, performance, and cash flows. For the year ended September 30, 2009 there was no derivative activity requiring additional disclosure. 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. CAPITAL SHARES ISSUED AND REDEEMED: Capital share activity for the years ended September 30, 2009 and September 30, 2008 were as follows:
Large Cap Value Large Cap Growth RCB Small Cap Opportunistic Equity Fund (000) Equity Fund (000) Value Fund (000) Value Fund (000) ----------------- ----------------- ----------------- ---------------- 2009 2008 2009 2008 2009 2008 2009 2008 - ------------------------------------------------------- ----------------- ----------------- ---------------- CAPITAL SHARES ISSUED AND REDEEMED: INSTITUTIONAL CLASS: Shares issued 3,207 2,441 1,140 638 54 43 24 -- Shares issued in Lieu of Dividends and Distributions 150 469 9 6 3 55 -- -- Shares redeemed (2,904) (2,015) (1,395) (1,601) (37) (286) -- -- - ------------------------------------------------------- ----------------- ----------------- ---------------- Net Institutional Class transactions 453 895 (246) (957) 20 (188) 24 -- ======================================================= ================= ================= ================ CLASS N: Shares issued 86 66 92 107 1 4 1 1 Shares issued in Lieu of Dividends and Distributions 15 66 4 1 4 55 -- -- Shares redeemed (291) (246) (346) (274) (36) (116) -- -- - ------------------------------------------------------- ----------------- ----------------- ---------------- Net Class N transactions (190) (114) (250) (166) (31) (57) 1 1 ======================================================= ================= ================= ================ CLASS R: Shares issued -- -- -- -- 79 264 -- -- Shares issued in Lieu of Dividends and Distributions -- -- -- -- 28 280 -- -- Shares redeemed -- -- -- -- (372) (704) -- -- - ------------------------------------------------------- ----------------- ----------------- ---------------- Net Class R transactions -- -- -- -- (265) (160) -- -- ======================================================= ================= ================= ================ CLASS E: Shares issued -- -- -- -- -- -- 3,743 4,863 Shares issued in Lieu of Dividends and Distributions -- -- -- -- -- -- 93 -- Shares redeemed -- -- -- -- -- -- (4,671) -- - ------------------------------------------------------- ----------------- ----------------- ---------------- Net Class E transactions -- -- -- -- -- -- (835) 4,863 ======================================================= ================= ================= ================
AMOUNTS DESIGNATED AS "--" ARE EITHER 0 OR HAVE BEEN ROUNDED TO 0. CNI CHARTER FUNDS | PAGE 81 notes to financial statements SEPTEMBER 30, 2009 8. CAPITAL SHARES ISSUED AND REDEEMED (CONTINUED):
California Multi-Asset Corporate Bond Government Bond Tax Exempt Bond Fund (000) Fund (000) Fund (000) Fund (000) ------------ --------------- --------------- --------------- 2009 2008 2009 2008 2009 2008 2009 2008 - ------------------------------------------------ --------------- --------------- --------------- CAPITAL SHARES ISSUED AND REDEEMED: INSTITUTIONAL CLASS: Shares issued 481 1,269 2,736 2,342 2,172 2,308 1,204 1,027 Shares issued in Lieu of Dividends and Distributions 10 5 67 59 65 67 39 36 Shares redeemed (744) (167) (1,529) (1,372) (1,789) (1,109) (998) (958) - ------------------------------------------------ --------------- --------------- --------------- Net Institutional Class transactions (253) 1,107 1,274 1,029 448 1,266 245 105 ================================================ =============== =============== =============== CLASS N: Shares issued 359 1,916 48 4 101 74 132 76 Shares issued in Lieu of Dividends and Distributions 12 11 1 2 4 4 1 -- Shares redeemed (387) (204) (17) (46) (77) (67) (58) (62) - ------------------------------------------------ --------------- --------------- --------------- Net Class N transactions (16) 1,723 32 (40) 28 11 75 14 ================================================ =============== =============== ===============
California High-Yield Prime Government Tax Exempt Bond Money Market Money Market Money Market Fund (000) Fund (000) Fund (000) Fund (000) ------------ ----------------------- ----------------------- ----------------------- 2009 2008 2009 2008 2009 2008 2009 2008 - ------------------------------------------------ ----------------------- ----------------------- ----------------------- CAPITAL SHARES ISSUED AND REDEEMED: INSTITUTIONAL CLASS: Shares issued 307 142 1,288,265 1,704,267 655,511 553,021 1,126,167 1,830,572 Shares issued in Lieu of Dividends and Distributions 130 104 442 2,772 8 3 -- -- Shares redeemed (156) (288) (1,278,342) (1,612,805) (632,330) (500,209) (1,142,015) (1,762,382) - ------------------------------------------------ ----------------------- ----------------------- ----------------------- Net Institutional Class transactions 281 (42) 10,365 94,234 23,189 52,815 (15,848) 68,190 ================================================ ======================= ======================= ======================= CLASS N: Shares issued 405 193 2,117,635 3,333,223 4,478,647 6,290,498 1,708,583 2,477,610 Shares issued in Lieu of Dividends and Distributions 158 121 1,555 13,996 4,161 43,391 1,814 9,947 Shares redeemed (334) (205) (2,586,377) (3,093,998) (4,940,602) (5,618,090) (1,886,349) (2,302,084) - ------------------------------------------------ ----------------------- ----------------------- ----------------------- Net Class N transactions 229 109 (467,187) 253,221 (457,794) 715,799 (175,952) 185,473 ================================================ ======================= ======================= ======================= CLASS S: Shares issued -- -- 1,140,178 1,657,732 659,453 801,055 354,327 409,458 Shares issued in Lieu of ividends and Distributions -- -- -- -- -- -- -- -- Shares redeemed -- -- (1,401,263) (1,644,197) (769,358) (713,370) (421,688) (446,618) - ------------------------------------------------ ----------------------- ----------------------- ----------------------- Net Class S transactions -- -- (261,085) 13,535 (109,905) 87,685 (67,361) (37,160) ================================================ ======================= ======================= =======================
AMOUNTS DESIGNATED AS "--" ARE EITHER 0 OR HAVE BEEN ROUNDED TO 0. CNI CHARTER FUNDS | PAGE 82 9. IN-KIND TRANSACTIONS During the year ended September 30, 2008, the Opportunistic Value Fund issued shares of beneficial interest in exchange for securities.The securities were transferred at their current value on June 26, 2008 as follows: Shares Value Issued ($ Thousands) ------------------------------------------- 579,800 $5,979 10. TREASURY GUARANTEE PROGRAM The CNI Charter Funds Board of Trustees approved the participation by the Prime Money Market Fund, Government Money Market Fund and California Money Market Fund (each, a "Fund," and collectively, the "Funds") in the U.S. Department of the Treasury's Temporary Guarantee Program for Money Market Funds (the "Program") for the initial term of the Program, which ended December 18, 2008, and the first extended term of the Program, which ended April 30, 2009. After considering the costs and benefits of continued participation in the Program, the Board of Trustees determined that the Prime Money Market Fund and California Tax Exempt Money Market Fund should continue to participate in the second extended term of the Program, which ended September 18, 2009, but that the Government Money Market Fund should not, since that Fund invests primarily in government securities that are guaranteed by the U.S. Government.The Program insured shares held by money market fund investors as of the close of business on September 19, 2008 against loss in the event that a money market fund liquidated its holdings and shareholders received less than $1.00 per share.The guarantee would have been triggered, and funds set aside by the Treasury made available, if a money market fund's net asset value per share fell below $0.995. The second extended term of the Program covered shareholders of the Prime Money Market Fund and California Tax Exempt Money Market Fund for amounts they held in the respective Fund as of the close of business on September 19, 2008. New accounts opened since September 19, 2008 and any increase in the number of shares held by a shareholder after the close of business on September 19, 2008 were not guaranteed. The Program was designed to address temporary dislocations in the credit markets.The second extended term of the Program operated through September 18, 2009. Participation in the initial term and first extended term of the Program required payments to the U.S. Department of the Treasury in the amount of 0.01% and 0.015%, respectively, of the net asset value of each of Fund as of September 19, 2008. Participation in the second extended term of the Program required a payment to the U.S. Department of the Treasury in the amount of 0.015% of the net asset value of each of the Prime Money Market Fund and California Tax Exempt Money Market Fund as of September 19, 2008.These expenses were borne by each Fund and were not subject to any expense limitation then in effect. Additional information about the Program is available on the U.S. Department of the Treasury's website at www.ustreas.gov. 11. SUBSEQUENT EVENTS The Trust has evaluated the need for disclosure and/or adjustments resulting from subsequent events through November 25, 2009, the date the financial statements were issued. Based on this evaluation, no adjustments were required to the financial statements as of September 30, 2009. CNI CHARTER FUNDS | PAGE 83 report of independent registered public accounting firm - -------------------------------------------------------------------------------- TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF CNI CHARTER FUNDS: We have audited the accompanying statements of assets and liabilities of Large Cap Value Equity Fund, Large Cap Growth Equity Fund, RCB Small Cap Value Fund, Opportunistic Value Fund, Multi-Asset Fund, Corporate Bond Fund, Government Bond Fund, California Tax Exempt Bond Fund, High Yield Bond Fund, Prime Money Market Fund, Government Money Market Fund, and California Tax Exempt Money Market Fund (collectively, the "Funds"), including the schedules of investments, as of September 30, 2009, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the years or periods in the two-year period then ended, and the financial highlights for each of the years or periods in the five-year period then ended.These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement.An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of September 30, 2009, by correspondence with the custodian and brokers or other appropriate auditing procedures.An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the aforementioned Funds of the CNI Charter Funds as of September 30, 2009, the results of their operations for the year then ended, changes in their net assets for each of the years or periods in the two-year period then ended, and the financial highlights for each of the years or periods in the five-year period then ended, in conformity with U.S. generally accepted accounting standards. (KPMG LLP) PHILADELPHIA PENNSYLVANIA NOVEMBER 25, 2009 CNI CHARTER FUNDS | PAGE 84 THIS PAGE INTENTIONALLY LEFT BLANK. trustees and officers (UNAUDITED) SEPTEMBER 30, 2009 - ------------------------------------------------------------------------------- Information pertaining to the Trustees and Officers of the Trust is set forth below as of September 30, 2009.Trustees who are not deemed to be "interested persons" of the Trust as defined in the Investment Company Act of 1940 are referred to as "Independent Trustees."Trustees who are deemed to be "interested persons" of the Trust are referred to as "Interested Trustees."The Trust's Statement of Additional Information ("SAI") includes additional information about the Trustees and Officers.The SAI may be obtained without charge by calling 1-888-889-0799. - -------------------------------------------------------------------------------
TERM OF OFFICE NUMBER OF AND PORTFOLIOS IN OTHER NAME POSITION(s) LENGTH OF FUND COMPLEX DIRECTORSHIPS ADDRESS, HELD WITH TIME PRINCIPAL OCCUPATION(s) OVERSEEN BY HELD BY AND AGE1 TRUST SERVED2 DURING PAST FIVE YEARS BOARD MEMBER3 TRUSTEE4 - ---------------------------------------------------------------------------------------------------------------------------- INTERESTED TRUSTEE - ----------------- Vernon C. Kozlen* Trustee Since President and Chief Executive Officer, 17 None Age: 66 May 2007 CNI Charter Funds (2000-2007). Executive Vice President and Director of Asset Management Development, CNB (1996-2007). Director, Reed, Conner & Birdwell LLC (2000-present), and Convergent Capital Management, LLC (2003-present). Chairman of the Board, CNAM, Inc. (2001-2005). Chairman of the Board, City National Securities, Inc. (1999-2005). Director, CNAM, Inc. (2001-2006), and City National Securities, Inc. (1999-2006). - ---------------------------------------------------------------------------------------------------------------------------- INDEPENDENT TRUSTEES - ----------------- Irwin G. Barnet, Trustee Since 1999 Attorney and partner, Reed Smith LLP, 17 None Esq. a law firm (2003-present).Attorney and Age: 71 principal, Crosby, Heafey, Roach & May P.C., a law firm (2000-2002 ). Attorney and principal, Sanders, Barnet, Goldman, Simons & Mosk, a law firm (1980-2000). - ---------------------------------------------------------------------------------------------------------------------------- Victor Meschures Trustee Since 1999 Certified Public Accountant, Meschures, 17 None Age: 71 Campeas,Thompson, Snyder, Pocras, Levin & Dimaggio, LLP, an accounting firm (1964-present). - ---------------------------------------------------------------------------------------------------------------------------- William R. Sweet Trustee Since 1999 Retired. Executive Vice President, 17 None Age: 72 Union Bank of California (1985-1996). - ---------------------------------------------------------------------------------------------------------------------------- James Wolford Trustee Since 1999 Chief Financial Officer, Bixby Land 17 None Age: 55 Company, a real estate company (2004- present). Regional Financial Officer, AIMCO, a real estate investment trust (2004). Chief Financial Officer, DBM Group, a direct mail marketing company (2001-2004). SeniorVice President and Chief Operating Officer, Forecast Commercial Real Estate Service, Inc. (2000-2001). Senior Vice President and Chief Financial Officer, Bixby Ranch Company (1985-2000). - ----------------------------------------------------------------------------------------------------------------------------
CNI CHARTER FUNDS | PAGE 86
TERM OF OFFICE AND NAME POSITION LENGTH OF ADDRESS, HELD WITH TIME PRINCIPAL OCCUPATION(s) AND AGE TRUST SERVED2 DURING PAST FIVE YEARS - ------------------------------------------------------------------------------------------------------------------------------ OFFICERS - ------------------------ Timothy D. Barto Vice President Since Attorney, Vice President and Assistant Secretary of SEI Investments SEI Investments and Assistant 2000 (1999-Present).Vice President and Assistant Secretary of Administrator One Freedom Valley Drive Secretary (1999-Present). Officer of various investment companies administered by Oaks, PA 19456 Administrator (1999-2004).Assistant Secretary of the Distributor Age: 41 (2003-2004).Vice President of the Distributor (1999-2004). - ------------------------------------------------------------------------------------------------------------------------------ Eric Kleinschmidt Controller and Since Director of Fund Accounting, SEI Investments (2004-Present). Manager SEI Investments Chief Operating 2005 of Fund Accounting, SEI Investments (1999-2004). One Freedom Valley Drive Officer Oaks, PA 19456 Age: 41 - ------------------------------------------------------------------------------------------------------------------------------ Valerie Y. Lewis Vice President Since Chief Compliance Officer, CNAM, Inc. (August, 2005-present). Fund City National Bank and Chief 2005 Boards Specialist - Assistant Secretary, Capital Research and Management 555 S. Flower Street, Compliance and Company Capital International, Inc. (1999-2005). 18th Floor Los Angeles, CA 90071 Officer Age: 53 - ------------------------------------------------------------------------------------------------------------------------------ James Ndiaye Vice President Since Attorney, SEI Investments Company (2004-present).Vice President, SEI Investments and Assistant 2005 Deutsche Asset Management (2003-2004).Associate, Morgan Lewis & One Freedom Valley Drive Secretary Bockius LLP (2000-2003).Assistant Vice President, ING Variable Oaks, PA 19456 Annuities Group (1999-2000). Age: 41 - ------------------------------------------------------------------------------------------------------------------------------ Michael T. Pang Vice President Since Attorney, SEI Investments Company (2005-present). Counsel, Caledonian SEI Investments and Assistant 2005 Bank & Trust's Mutual Funds Group (2004-2005). Counsel, Permal Asset One Freedom Valley Drive Secretary Management (2001-2004).Associate, Schulte, Roth & Zabel's Investment Oaks, PA 19456 Management Group (2000-2001). Age: 37
- ---------- 1 Each trustee may be contacted by writing to the Trustee c/o CNI Charter Funds, One Freedom Valley Drive, Oaks, PA 19456. 2 Each trustee holds office during the lifetime of the Trust until he or she dies, resigns, is declared bankrupt or incompetent by a court of appropriate jurisdiction, or is removed, or, if sooner, until the next meeting of shareholders is called for the purpose of electing trustees and until the election and qualification of his or her successor in accordance with the Trust's Declaration of Trust.The president, treasurer and secretary hold office until their respective successors are chosen or qualified, or until their removal or resignation, or in each case until he or she sooner dies, resigns, is removed, or becomes disqualified in accordance with the Trust's by-laws. 3 The "Fund Complex" consists of all series of the Trust. As of September 30, 2008, the Fund Complex consisted of 17 Funds. 4 Directorships of companies required to report to the Securities and Exchange Commission under the Securities Exchange Act of 1934 (i.e., "public companies") or other investment companies registered under the 1940 Act. * Mr. Kozlen is an "interested person" of the Trust, as defined in the 1940 Act, by virtue of his position with CNB, the parent company of CNAM, Inc. until March 2007. CNI CHARTER FUNDS | PAGE 87 trustees and officers (UNAUDITED) (CONTINUED) SEPTEMBER 30, 2009
TERM OF OFFICE AND NAME POSITION LENGTH OF ADDRESS, HELD WITH TIME PRINCIPAL OCCUPATION(s) AND AGE TRUST SERVED DURING PAST FIVE YEARS - ----------------------------------------------------------------------------------------------------------------------------- OFFICERS (CONCLUDED) - ------------------------ Rodney J. Olea Vice President Since Senior Vice President, CNAM, Inc. (2001-present). Senior Vice President City National Bank 2000 and Director of Fixed Income, CNB (1994-present). 400 N. Roxbury Drive Beverly Hills, CA 90210 Age: 44 - ------------------------------------------------------------------------------------------------------------------------------ Joseph Gallo Vice President Since Attorney for SEI Investments since 2007. Associate Counsel at ICMA--RC SEI Investments and Secretary 2008 from 2004 to 2007. Assistant Secretary of The Vantage Trust Company in One Freedom Valley Drive 2007. Assistant Secretary of The Vantagepoint Funds from 2006 to 2007. Oaks, PA 19456 Investigator, U.S. Department of Labor from 2002 to 2004. Age: 36 - ------------------------------------------------------------------------------------------------------------------------------ Timothy G. Solberg Vice President Since Managing Director and Chief Investment Officer, CCM Advisors CCM Advisors, LLC and Assistant 2005 (2001-present); Director of Marketing and Client Services, Hewitt 190 S. LaSalle Street Secretary Investment Group, a Division of Hewitt Associates LLC (1989-2001). Suite 2800 Chicago, IL 60603 Age: 56 - ------------------------------------------------------------------------------------------------------------------------------ Susan Rudzinski Vice President Since Compliance Director, Convergent Capital Management, LLC CCM Advisors, LLC May (2006-present); Self-employed Investment Advisory Compliance and 190 S. LaSalle Street 2007 Operations Consultant (2005-2006); Manager,Affiliate Contracts, Suite 2800 The Burridge Group LLC (2003-2004). Chicago, IL 60603 Age: 46 - ------------------------------------------------------------------------------------------------------------------------------ Richard A.Weiss President Since President, CNAM, Inc. (2001-present). Executive Vice President and City National Bank and Chief 2008 Chief Investment Officer, CNB (1999-present). Director, City National 400 N. Roxbury Drive Executive Securities (April 2003-present). Executive Vice President and Chief Beverly Hills, CA 90210 Officer Investment Officer. Sanwa Bank California (1994-1999). Age: 49 - ------------------------------------------------------------------------------------------------------------------------------
CNI CHARTER FUNDS | PAGE 88 notice to shareholders (UNAUDITED) SEPTEMBER 30, 2009 - -------------------------------------------------------------------------------- For shareholders that do not have a September 30, 2009 taxable year end, this notice is for informational purposes only. For shareholders with a September 30, 2009 taxable year end, please consult your tax advisor as to the pertinence of this notice. For California income tax purposes, for the fiscal year ended September 30, 2009, each of the California Tax Exempt Bond Fund and California Tax Exempt Money Market Fund is designating 86.57% and 93.32%, respectively, of its distributions paid from net investment income as exempt-interest dividends under Section 17145 of the California Revenue and Taxation Code. For Federal income tax purposes, for the fiscal year ended September 30, 2009 each Fund is designating the following items with regard to distributions paid during the year:
(E) DIVIDENDS (A) (B) QUALIFYING LONG TERM ORDINARY (C) (D) FOR CORPORATE CAPITAL GAIN INCOME TAX EXEMPT TOTAL DIVIDENDS REC. DISTRIBUTIONS DISTRIBUTIONS INTEREST DISTRIBUTIONS DEDUCTION (1) - ----------------------------------------------------------------------------------------------------------- Large Cap Value Equity Fund 0.00% 100.00% 0.00% 100.00% 100.00% Large Cap Growth Equity Fund 0.00% 100.00% 0.00% 100.00% 100.00% RCB Small Cap Value Fund 0.00% 100.00% 0.00% 100.00% 41.94% Opportunistic Value 0.00% 100.00% 0.00% 100.00% 100.00% Multi-Asset Fund 0.00% 100.00% 0.00% 100.00% 5.27% Corporate Bond Fund 0.00% 100.00% 0.00% 100.00% 0.00% Government Bond Fund 0.00% 100.00% 0.00% 100.00% 0.00% California Tax Exempt Bond Fund 0.00% 0.00% 100.00% 100.00% 0.00% High Yield Bond Fund 0.00% 100.00% 0.00% 100.00% 0.00% Prime Money Market Fund 0.00% 100.00% 0.00% 100.00% 0.00% Government Money Market Fund 0.00% 100.00% 0.00% 100.00% 0.00% California Tax Exempt Money Market Fund 0.00% 0.01% 99.99% 100.00% 0.00% - ----------------------------------------------------------------------------------------------------------- (F) QUALIFYING DIVIDEND (G) (H) (I) INCOME U.S. INTEREST SHORT -TERM (15% RATE GOVERNMENT RELATED CAPITAL GAIN FOR QDI)(2) INTEREST(3) DIVIDENDS(4) DIVIDENDS(5) - -------------------------------------------------------------------------------------- Large Cap Value Equity Fund 100.00% 0.00% 0.00% 0.00% Large Cap Growth Equity Fund 100.00% 0.00% 0.00% 0.00% RCB Small Cap Value Fund 41.47% 0.00% 5.27% 100.00% Opportunistic Value 100.00% 0.00% 0.00% 0.00% Multi-Asset Fund 31.78% 7.86% 18.57% 0.00% Corporate Bond Fund 0.00% 0.72% 98.41% 0.00% Government Bond Fund 0.00% 31.13% 99.15% 0.00% California Tax Exempt Bond 0.00% 0.00% 0.00% 0.00% Fund High Yield Bond Fund 0.00% 0.00% 98.57% 0.00% Prime Money Market Fund 0.00% 17.38% 93.18% 0.00% Government Money Market Fund 0.00% 63.95% 98.10% 0.00% California Tax Exempt Money Market Fund 0.00% 0.00% 0.00% 0.00% - --------------------------------------------------------------------------------------
- ---------- (1) "DIVIDENDS RECEIVED DEDUCTION" REPRESENT DIVIDENDS WHICH QUALIFY FOR THE CORPORATE DIVIDENDS RECEIVED DEDUCTION. (2) "QUALIFYING DIVIDEND INCOME" REPRESENT QUALIFYING DIVIDENDS AS CREATED BY THE JOBS AND GROWTH TAX RELIEF RECONCILIATION ACT OF 2003. THE FUND INTENDS TO DESIGNATE THE MAXIMUM AMOUNT PERMITTED BY LAW. (3) "U.S. GOVERNMENT INTEREST" REPRESENT THE AMOUNT OF INTEREST THAT WAS DERIVED FROM DIRECT U.S. GOVERNMENT OBLIGATIONS AND DISTRIBUTED DURING THE FISCAL YEAR.THIS AMOUNT IS REFLECTED AS A PERCENTAGE OF ORDINARY INCOME. GENERALLY, INTEREST FROM DIRECT U.S. GOVERNMENT OBLIGATIONS IS EXEMPT FROM STATE INCOME TAX. HOWEVER, FOR SHAREHOLDERS WHO ARE RESIDENTS OF CALIFORNIA, CONNECTICUT OR NEW YORK, THE STATUTORY THRESHOLD REQUIREMENTS WERE NOT SATISFIED TO PERMIT EXEMPTION OF THESE AMOUNTS FROM STATE INCOME. (4) "INTEREST RELATED DIVIDENDS" REPRESENT QUALIFYING INTEREST THAT IS EXEMPT FROM U.S. WITHHOLDING TAX WHEN PAID TO FOREIGN INVESTORS AS CREATED BY THE AMERICAN JOBS CREATION ACT OF 2004.THIS PROVISION OF THE INTERNAL REVENUE CODE WILL BE EXPIRING FOR YEARS BEGINNING AFTER JANUARY 1, 2010. (5) "SHORT-TERM CAPITAL GAIN DIVIDENDS" REPRESENT QUALIFYING SHORT-TERM CAPITAL GAIN THAT IS EXEMPT FROM U.S. WITHHOLDING TAX WHEN PAID TO FOREIGN INVESTORS AS CREATED BY THE AMERICAN JOBS CREATION ACT OF 2004.THIS PROVISION OF THE INTERNAL REVENUE CODE WILL BE EXPIRING FOR YEARS BEGINNING AFTER JANUARY 1, 2010. ITEMS (A), (B), (C) AND (D) ARE BASED ON THE PERCENTAGE OF EACH FUND'S TOTAL DISTRIBUTION. ITEMS (E) AND (F) ARE BASED ON THE PERCENTAGE OF "ORDINARY INCOME DISTRIBUTIONS." ITEM (G) IS BASED ON THE PERCENTAGE OF GROSS INCOME OF EACH FUND. ITEM (H) IS BASED ON THE PERCENTAGE OF NET INVESTMENT INCOME DISTRIBUTIONS. ITEM (I) IS BASED ON THE PERCENTAGE OF SHORT-TERM CAPITAL GAIN DISTRIBUTIONS. CNI CHARTER FUNDS | PAGE 89 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, class-specific distribution fees 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 4/1/09 9/30/09 RATIOS PERIOD* - ---------------------------------------------------------------------- LARGE CAP VALUE FUND - ---------------------------------------------------------------------- ACTUAL FUND RETURN Institutional Class $1,000.00 $1,322.00 0.96% $ 5.59 Class N 1,000.00 1,321.00 1.21 7.04 HYPOTHETICAL 5% RETURN Institutional Class $1,000.00 $1,020.26 0.96% $ 4.86 Class N 1,000.00 1,019.00 1.21 6.12 - ---------------------------------------------------------------------- LARGE CAP GROWTH FUND - ---------------------------------------------------------------------- ACTUAL FUND RETURN Institutional Class $1,000.00 $1,284.20 0.99% $ 5.67 Class N 1,000.00 1,282.00 1.24 7.09 HYPOTHETICAL 5% RETURN Institutional Class $1,000.00 $1,020.10 0.99% $ 5.01 Class N 1,000.00 1,018.85 1.24 6.28 - ------------------------------------------------------------------------- RCB SMALL CAP VALUE FUND - ------------------------------------------------------------------------- ACTUAL FUND RETURN Institutional Class $1,000.00 $1,692.00 1.19% $ 8.03 Class A 1,000.00 1,690.30 1.44 9.71 Class R 1,000.00 1,691.50 1.21 8.16 HYPOTHETICAL 5% RETURN Institutional Class $1,000.00 $1,019.10 1.19% $ 6.02 Class A 1,000.00 1,017.85 1.44 7.28 Class R 1,000.00 1,019.00 1.21 6.12 - ------------------------------------------------------------------------- OPPORTUNISTIC VALUE FUND - ------------------------------------------------------------------------- ACTUAL FUND RETURN Institutional Class $1,000.00 $1,360.80 0.93% $ 5.50 Class A 1,000.00 1,359.80 1.18 $ 6.98 Class E 1,000.00 1,362.00 0.69 4.09 HYPOTHETICAL 5% RETURN Institutional Class $1,000.00 $1,020.41 0.93% $ 4.71 Class A 1,000.00 1,019.15 1.18 5.97 Class E 1,000.00 1,021.61 0.69 3.50
- ---------- * Expenses are equal to the Fund's annualized expense ratio multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period). CNI CHARTER FUNDS | PAGE 90
BEGINNING ENDING EXPENSES ACCOUNT ACCOUNT ANNUALIZED PAID VALUE VALUE EXPENSE DURING 4/1/09 9/30/09 RATIOS PERIOD* - -------------------------------------------------------------------------------- MULTI-ASSET FUND - -------------------------------------------------------------------------------- ACTUAL FUND RETURN Institutional Class $1,000.00 $1,155.10 0.84% $ 4.54 Class A 1,000.00 1,152.60 1.09 $ 5.88 HYPOTHETICAL 5% RETURN Institutional Class $1,000.00 $1,020.86 0.84% $ 4.26 Class A 1,000.00 1,019.60 1.09 5.52 - -------------------------------------------------------------------------------- CORPORATE BOND FUND - -------------------------------------------------------------------------------- ACTUAL FUND RETURN Institutional Class $1,000.00 $1,082.00 0.74% $ 3.86 Class A 1,000.00 1,080.60 0.99 $ 5.16 HYPOTHETICAL 5% RETURN Institutional Class $1,000.00 $1,021.36 0.74% $ 3.75 Class A 1,000.00 1,020.10 0.99 5.01 - -------------------------------------------------------------------------------- GOVERNMENT BOND FUND - -------------------------------------------------------------------------------- ACTUAL FUND RETURN Institutional Class $1,000.00 $1,019.40 0.70% $ 3.54 Class A 1,000.00 1,017.10 0.95 4.80 HYPOTHETICAL 5% RETURN Institutional Class $1,000.00 $1,021.56 0.70% $ 3.55 Class A 1,000.00 1,020.31 0.95 4.81 - -------------------------------------------------------------------------------- CALIFORNIA TAX-EXEMPT BOND FUND - -------------------------------------------------------------------------------- ACTUAL FUND RETURN Institutional Class $1,000.00 $1,038.70 0.50% $ 2.56 Class A 1,000.00 1,037.20 0.75 3.83 HYPOTHETICAL 5% RETURN Institutional Class $1,000.00 $1,022.56 0.50% $ 2.54 Class A 1,000.00 1,021.31 0.75 3.80 - -------------------------------------------------------------------------------- HIGH YIELD BOND FUND - -------------------------------------------------------------------------------- ACTUAL FUND RETURN Institutional Class $1,000.00 $1,348.80 1.00% $ 5.89 Class A 1,000.00 1,346.80 1.30 7.65 HYPOTHETICAL 5% RETURN Institutional Class $1,000.00 $1,020.05 1.00% $ 5.06 Class A 1,000.00 1,018.55 1.30 6.58
BEGINNING ENDING EXPENSES ACCOUNT ACCOUNT ANNUALIZED PAID VALUE VALUE EXPENSE DURING 4/1/09 9/30/09 RATIOS PERIOD* - ---------------------------------------------------------------------------------- PRIME MONEY MARKET FUND - ---------------------------------------------------------------------------------- ACTUAL FUND RETURN Institutional Class $1,000.00 $ 1,000.90 0.29% $ 1.45 Class A 1,000.00 1,000.50 0.37 1.86 Class S 1,000.00 1,000.30 0.43 2.16 HYPOTHETICAL 5% RETURN Institutional Class $1,000.00 $ 1,023.61 0.29% $ 1.47 Class A 1,000.00 1,023.21 0.37 1.88 Class S 1,000.00 1,022.91 0.43 2.18 - ---------------------------------------------------------------------------------- GOVERNMENT MONEY MARKET FUND - ---------------------------------------------------------------------------------- ACTUAL FUND RETURN Institutional Class $1,000.00 $ 1,000.30 0.23% $ 1.15 Class A 1,000.00 1,000.20 0.25 1.25 Class S 1,000.00 1,000.10 0.27 1.35 HYPOTHETICAL 5% RETURN Institutional Class $1,000.00 $ 1,023.92 0.23% $ 1.17 Class A 1,000.00 1,023.82 0.25 1.27 Class S 1,000.00 1,023.71 0.27 1.37 - ---------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT MONEY MARKET FUND - ---------------------------------------------------------------------------------- ACTUAL FUND RETURN Institutional Class $1,000.00 $ 1,000.70 0.20% $ 1.00 Class A 1,000.00 1,000.30 0.28 1.40 Class S 1,000.00 1,000.20 0.30 1.50 HYPOTHETICAL 5% RETURN Institutional Class $1,000.00 $ 1,024.07 0.20% $ 1.01 Class A 1,000.00 1,023.66 0.28 1.42 Class S 1,000.00 1,023.56 0.30 1.52
- ---------- * Expenses are equal to the Fund's annualized expense ratio multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period). CNI CHARTER FUNDS | PAGE 91 board approval of sub-advisory agreement (UNAUDITED) - -------------------------------------------------------------------------------- The Board of Trustees of CNI Charter Funds (the "Trust") is comprised of five Trustees, four of whom are independent of the Trust's investment advisers and sub-advisers (the "Independent Trustees"). During the six months ended September 30, 2009, the Board and the Independent Trustees approved renewal of the Trust's advisory agreement (the "Management Agreement") with City National Asset Management, Inc. ("CNAM"); renewal of CNAM's sub-advisory agreement (the "RCB Agreement") with Reed, Conner & Birdwell, LLC ("RCB") with respect to the RCB Small Cap Value Fund (the "RCB Fund"); and renewal of CNAM's sub-advisory agreement (the "SKBA Agreement") with SKBA Capital Management, LLC ("SKBA") with respect to the Opportunistic Value Fund.The RCB Agreement and the SKBA Agreement are collectively referred to below as the "Sub-Advisory Agreements" and the Management Agreement and Sub-Advisory Agreements are referred to below as the "Agreements." GENERAL INFORMATION The following information summarizes the Board's considerations associated with its review 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 Agreements were considered separately for each investment portfolio of the Trust (each a "Fund"), although the Board took into account the common interests of the 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, RCB and SKBA. In considering these matters, the Independent Trustees discussed the approval of the Agreements with management and in private sessions with counsel at which no representatives of CNAM, RCB or SKBA were present. The Board reviewed extensive materials regarding investment results of CNAM, RCB and SKBA and advisory fee and expense comparisons, financial 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.They also took into account information they received at past Board meetings with respect to these matters. In deciding to approve the Agreements, the Board and the Independent Trustees did not identify a single factor as controlling and this summary does not describe all of the matters considered. However, the Board and the Independent Trustees 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 CNAM's senior management; its investment philosophy and processes, including sub-adviser oversight processes; its 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 nine-month and one-, three- and five-year and since inception periods ended June 30, 2009 (nine-month, one-year and since inception periods with respect to the Multi-Asset Fund, which commenced operations on October 1, 2007).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: CNI CHARTER FUNDS | PAGE 92 o The annualized total returns of the PRIME MONEY MARKET FUND and CALIFORNIA TAX EXEMPT MONEY MARKET FUND were below the average returns of the relevant Lipper institutional money market fund universes, iMoneyNet institutional fund universes, and bank channel universes for all periods. o The annualized total returns of the GOVERNMENT MONEY MARKET Fund were below the average returns of the relevant Lipper institutional money market fund universe and bank channel universe for all periods, and near or above the average returns of the relevant iMoneyNet institutional fund universe for all periods except for the five-year and since inception periods. o The annualized total returns of the CORPORATE BOND FUND were above the average returns of the Lipper short/intermediate investment-grade universe, the bank channel universe and the Barclays Capital Intermediate US Corporate Index returns for all periods, except for the Index returns for the nine-month and since inception periods. o The annualized total returns of the CALIFORNIA TAX EXEMPT BOND FUND were above the average returns of the Lipper California short/intermediate municipal debt universe for all periods, and below the average returns of the bank channel universe and the Barclays Capital CA Intermediate-Short Municipal Index returns for all periods (except that they were above the average returns of the bank channel universe for the since inception period). o The annualized total returns of the GOVERNMENT BOND FUND were below the average returns of the Lipper short/intermediate US government universe, the bank channel universe and the Barclays Capital US Government Bond Index for all periods (except that they were above the average returns of the bank channel universe for the three-year and since inception periods). o The annualized total returns of the HIGH YIELD BOND FUND were above the average returns of the Lipper high current yield fund universe for the one-year, three-year and since inception periods, but were below the average returns of the Lipper high current yield fund universe for the nine-month and five-year periods and below the average returns of the bank channel universe and Citigroup High-Yield Market Index returns for all periods. o The annualized total returns of the MULTI-ASSET FUND were above the average returns of the Lipper flexible portfolio funds universe and bank channel universe and the returns of a blended index comprised 60% of the S&P 500 Index and 40% of the Barclays Capital Intermediate Government/Credit Index (the "Blended Index") for all periods, but were below the returns of the CPI plus 500 basis points benchmark and the Barclays Capital US Treasury Inflation Protected Securities Index for all periods. o The annualized total returns of the LARGE CAP GROWTH EQUITY FUND were above the average returns of the Lipper large cap growth fund universe, the bank channel universe and the S&P 500/Citigroup Growth Index returns for all periods. o The annualized total returns of the LARGE CAP VALUE EQUITY FUND were above the average returns of the Lipper large cap value funds universe and S&P 500/Citigroup Value Index returns for all periods and were above the average returns of the bank channel universe for the one-, three- and five-year periods, but were below the average returns of the Lipper large cap value funds universe for the nine-month period and slightly below the average returns of the bank channel universe for the nine-month and since inception periods. o The annualized total returns of the RCB FUND were above the average returns of the Lipper small cap core funds universe, bank channel universe and Russell 2000 Index for the nine-month, one-year and since inception periods, but were below all those measures for the three-year and five-year periods. o The annualized total returns of the OPPORTUNISTIC VALUE FUND were above the average returns of the Lipper large-cap value funds universe and Russell 1000 Value Index returns for all periods, and were also above the average returns of the Lipper multi-cap value funds universe for CNI CHARTER FUNDS | PAGE 93 board approval of sub-advisory agreement (UNAUDITED) (CONTINUED) - -------------------------------------------------------------------------------- the since inception period, but were below the average returns of the Lipper multi-cap value funds universe for the nine-month period and below the average returns of the bank channel universe for all periods. The Board concluded that CNAM continued to provide satisfactory management and oversight services to the Funds. They noted that the investment results of the Funds were generally competitive during the past year and, in most cases, during previous periods; that the results for the Money Market Funds compared to their peer groups were acceptable given the special services and investment focuses of those Funds; and that consideration of returns of market indexes needed to take into account that indexes do not reflect the expenses of operating mutual funds. 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 actual investment advisory fees (net of fee waivers) paid by the Funds generally were at or above the relevant Lipper and bank channel averages, but (except for the Government Money Market Fund) were within the middle 60% range for the relevant Lipper universes. In considering the information about advisory fees, the Board noted the relatively small size of the Funds compared to the average sizes of the funds in the relevant Lipper and bank channel universes.As the Funds represent CNAM's sole investment advisory clients, the Board was not able to compare the fees charged to the Funds by CNAM with fees charged to other institutional clients of CNAM. The Board considered that the total expense ratios of the Funds were generally below the relevant Lipper universe averages (except for the Prime Money Market Fund, the Government Money Market Fund and the Multi-Asset Fund) and above the bank channel averages (except for the California Tax Exempt Money Market Fund, the California Tax Exempt Bond Fund and the Opportunistic Value Fund), but were all within the middle 60% range for the relevant Lipper universes. The Board considered information prepared by CNAM relating to its costs and profits with respect to the Funds, noting that because the Trust is CNAM's sole client, all of CNAM's costs are allocable to the Trust.The Board also considered the benefits received by CNAM and its affiliates as a result of CNAM's relationship with the Funds, including investment advisory fees paid to CNAM, fees paid to City National Bank and City National Securities, Inc. for providing certain shareholder servicing and sub-distribution services to the Trust, and the intangible benefits of any favorable publicity arising in connection with the Funds' performance.They also noted that although there were no advisory fee breakpoints, based on CNAM's operations significant economies of scale were not likely to be realized until the asset levels of most of the Funds were significantly higher than their current levels. CONCLUSIONS Based on their review, including their consideration of each of the factors referred to above, the Board and the Independent Trustees concluded that the compensation payable to CNAM pursuant to the Management Agreement is fair and reasonable in light of the nature and quality of the services being provided by CNAM to the respective Funds and their shareholders, and that renewal of the Management Agreement was in the best interest of the 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 its brokerage and trading practices. INVESTMENT PERFORMANCE The Board's observations regarding the RCB Fund's performance are described above. In addition, the Board noted that the RCB Fund's performance had improved significantly CNI CHARTER FUNDS | PAGE 94 within the last six months and that it was in the top 20% of its Lipper universe for the period since its inception, although its results for interim period were not as favorable. 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. 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 Fund, including the sub-advisory fees paid to RCB, fees paid to CNAM as the Fund's adviser, fees paid to City National Bank and City National Securities, Inc. for providing certain shareholder servicing and sub-distribution services to the Trust, and the intangible benefits of any favorable publicity arising in connection with the RCB Fund's performance. CONCLUSIONS Based on their review, including their consideration of each of the factors referred to above, the Board and the Independent Trustees concluded that the compensation payable to RCB pursuant to the RCB Agreement is fair and reasonable in light of the nature and quality of the services being provided by RCB to the RCB Fund and its shareholders, and that renewal of the RCB Agreement was in the best interest of the Fund and its shareholders. SKBA NATURE, EXTENT AND QUALITY OF SERVICES In reviewing the services provided by SKBA to the Opportunistic Value 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 Opportunistic Value Fund; and the overall general quality and depth of its organization.The Board also reviewed SKBA's investment philosophy and processes as well as its brokerage and trading practices. INVESTMENT PERFORMANCE The Board's observations regarding the Opportunistic Value Fund's performance are described above. ADVISORY FEES AND FUND EXPENSES The Board reviewed information regarding the advisory fees charged by SKBA and observed that SKBA's advisory fee with respect to the Opportunistic Value Fund was higher than SKBA's fees with respect to the other series of the Trust for which it serves as sub-adviser.The Trustees considered, however, that SKBA had implemented expense caps for all classes of the Fund, and that any reimbursement of Fund expenses in excess of the caps would be SKBA's responsibility. They also noted that CNAM pays SKBA's sub-advisory fees out of CNAM's advisory fee. The Board considered information prepared by SKBA relating to its costs and profits with respect to the Opportunistic Value 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 SKBA as a result of SKBA's relationship with the Opportunistic Value Fund, including fees paid to SKBA as the Fund's sub-adviser and the intangible benefits of any favorable publicity arising in connection with the Fund's performance. CONCLUSIONS Based on their review, including their consideration of each of the factors referred to above, the Board and the Independent Trustees concluded that the compensation payable to SKBA pursuant to the SKBA Agreement is fair and reasonable in light of the nature and quality of the services being provided by SKBA to the Opportunistic Value Fund and its shareholders, and that renewal of the SKBA Agreement was in the best interest of the Fund and its shareholders. CNI CHARTER FUNDS | PAGE 95 ITEM 2. CODE OF ETHICS. The registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer and principal accounting officer. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. (a)(1) The registrant's board of trustees has determined that the registrant has at least one audit committee financial expert serving on the audit committee. (a)(2) The audit committee financial experts are William R. Sweet and James R. Wolford. Messrs. Sweet and Wolford are independent as defined in Form N-CSR Item 3(a)(2). ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Fees billed by KPMG LLP Related to the Trust KPMG LLP billed the Trust aggregate fees for services rendered to the Trust for the last two fiscal years as follows:
2009 2008 --------------------------------------------------- --------------------------------------------------- All fees and All other fees All fees and All other fees services to and services to services to and services to All fees and service service All fees and service service services to the affiliates that affiliates that services to the affiliates that affiliates that Trust that were were did not require Trust that were were did not require pre-approved pre-approved pre-approval pre-approved pre-approved pre-approval --------------- --------------- --------------- --------------- --------------- --------------- (a) Audit $316,000 N/A N/A $315,000 N/A N/A Fees(1) (b) Audit-Relat N/A N/A N/A N/A N/A N/A Fees (c) Tax Fees $ 60,550 N/A N/A $ 66,400 N/A N/A (d) All N/A N/A N/A N/A N/A N/A Other Fees
- ---------- Notes: (1) Audit fees include amounts related to the audit of the registrant's annual financial statements and services normally provided by the accountant in connection with statutory and regulatory filings. (e)(1) Not Applicable (e)(2) Percentage of fees billed applicable to non-audit services pursuant to waiver of pre-approval requirement were as follows:
2009 2008 ---- ---- Audit-Related Fees N/A N/A Tax Fees N/A N/A All Other Fees N/A N/A
(f) Not Applicable (g) The aggregate non-audit fees and services billed by KPMG LLP for the last two fiscal years were $60,550 and $66,400 for 2009 and 2008, respectively. (h) Not Applicable 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. Effective for closed-end management investment companies for fiscal years ending on or after December 31, 2005 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 registrant's internal control over financial reporting. ITEMS 12. EXHIBITS. (a)(1) Code of Ethics attached hereto. (a)(2) A separate certification for the principal executive officer and the principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(a)), are filed herewith. (b) Officer certifications as required by Rule 30a-2(b) under the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(b)) also accompany this filing as an Exhibit. SIGNATURES Pursuant to the requirements of the securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) CNI Charter Funds By (Signature and Title)* /s/ Richard A. Weiss --------------------------------- Richard A. Weiss, President & CEO Date November 25, 2009 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 A. Weiss --------------------------------- Richard A. Weiss, President & CEO Date November 25, 2009 By (Signature and Title) /s/ Eric Kleinschmidt --------------------------------- Eric Kleinschmidt, Controller and COO Date November 25, 2009 EX-99.CODE ETH 2 g54646a_codofeth.txt CNI CHARTER FUNDS SUPPLEMENTAL CODE OF ETHICS FOR PRINCIPAL OFFICERS AND SENIOR FINANCIAL OFFICERS The Board of Trustees (the "Board") of CNI Charter Funds (the "Trust") has adopted this Supplemental Code of Ethics (the "Code") for the Trust's Principal Officers and Senior Financial Officers (the "Officers") to guide and remind the Officers of their responsibilities to the Trust, other Officers, shareholders of the Trust, and governmental authorities. Officers are expected to act in accordance with the guidance and standards set forth in this Code. For the purposes of this Code, the Trust's Principal Officers and Senior Financial Officers shall include: the Principal Executive Officer; the Principal Financial Officer; the Principal Accounting Officer; the Controller; and any persons performing similar functions on behalf of the Trust, regardless of whether such persons are employed by the Trust or a third party. This Code is intended to serve as the code of ethics described in Section 406 of The Sarbanes-Oxley Act of 2002 and Form N-CSR. To the extent that an Officer is subject to the Trust's code of ethics adopted pursuant to Rule 17j-1 of the Investment Company Act of 1940, as amended (the "Rule 17j-1 Code"), this Code is intended to supplement and be interpreted in the context of the Rule 17j-1 Code. This Code also should be interpreted in the context of all applicable laws, regulations, the Trust's Agreement and Declaration of Trust and Bylaws, as amended, and all other governance and disclosure policies and documents adopted by the Board. All Officers must become familiar and fully comply with this Code. Because this Code cannot and does not cover every applicable law or provide answers to all questions that might arise, all Officers are expected to use common sense about what is right and wrong, including a sense of when it is proper to seek guidance from others on the appropriate course of conduct. The purpose of this Code is to set standards for the Officers that are reasonably designed to deter wrongdoing and are necessary to promote: o honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; o full, fair, accurate, timely, and understandable disclosure in reports and documents that the Trust files with, or submits to, the Securities and Exchange Commission (the "SEC") and in any other public communications by the Trust; o compliance with applicable governmental laws, rules and regulations; o the prompt internal reporting of violations of the Code to the appropriate persons as set forth in the Code; and o accountability for adherence to the Code. 1. HONEST AND ETHICAL CONDUCT A. HONESTY, DILIGENCE AND PROFESSIONAL RESPONSIBILITY Officers are expected to observe both the form and the spirit of the ethical principles contained in this Code. Officers must perform their duties and responsibilities for the Trust: o with honesty, diligence, and a commitment to professional and ethical responsibility; o carefully, thoroughly and in a timely manner; and o in conformity with applicable professional and technical standards. Officers who are certified public accountants are expected carry out their duties and responsibilities in a manner consistent with the principles governing the accounting profession, including any guidelines or principles issued by the Public Company Accounting Oversight Board or the American Institute of Certified Public Accountants from time to time. B. OBJECTIVITY / AVOIDANCE OF UNDISCLOSED CONFLICTS OF INTEREST Officers are expected to maintain objectivity and avoid undisclosed conflicts of interest. In the performance of their duties and responsibilities for the Trust, Officers must not subordinate their judgment to personal gain and advantage, or be unduly influenced by their own interests or by the interests of others. Officers must avoid participation in any activity or relationship that constitutes a conflict of interest unless that conflict has been completely disclosed to affected parties. Further, Officers should avoid participation in any activity or relationship that could create the appearance of a conflict of interest. A conflict of interest would generally arise if an Officer directly or indirectly participated in any investment, interest, association, activity or relationship that may impair or appear to impair the Officer's objectivity. Any Officer who may be involved in a situation or activity that might be a conflict of interest or give the appearance of a conflict of interest should consider reporting such situation or activity using the reporting procedures set forth in Section 4 of this Code. The Audit Committee will not be responsible for monitoring or enforcing this conflict of interest policy, but rather each Officer is responsible for self-compliance with this conflict of interest policy. C. PREPARATION OF FINANCIAL STATEMENTS Officers must not knowingly make any misrepresentations regarding the Trust's financial statements or any facts in the preparation of the Trust's financial statements, and must comply 2 with all applicable laws, standards, principles,guidelines, rules and regulations in the preparation of the Trust's financial statements. This section is intended to prohibit: o making, or permitting or directing another to make, materially false or misleading entries in the Trust's financial statements or records; o failing to correct the Trust's financial statements or records that are materially false or misleading when he or she has the authority to record an entry; and o signing, or permitting or directing another to sign, a document containing materially false or misleading financial information. Officers must be scrupulous in their application of generally accepted accounting principles. No Officer may (i) express an opinion or state affirmatively that the financial statements or other financial data of the Trust are presented in conformity with generally accepted accounting principles, or (ii) state that he or she is not aware of any material modifications that should be made to such statements or data in order for them to be in conformity with generally accepted accounting principles, if such statements or data contain any departure from generally accepted accounting principles then in effect in the United States. Officers must follow the laws, standards, principles, guidelines, rules and regulations established by all applicable governmental bodies, commissions or other regulatory agencies in the preparation of financial statements, records and related information. If an Officer prepares financial statements, records or related information for purposes of reporting to such bodies, commissions or regulatory agencies, the Officer must follow the requirements of such organizations in addition to generally accepted accounting principles. If an Officer and his or her supervisor have a disagreement or dispute relating to the preparation of financial statements or the recording of transactions, the Officer should take the following steps to ensure that the situation does not constitute an impermissible subordination of judgment: o The Officer should consider whether (i) the entry or the failure to record a transaction in the records, or (ii) the financial statement presentation or the nature or omission of disclosure in the financial statements, as proposed by the supervisor, represents the use of an acceptable alternative and does not materially misrepresent the facts or result in an omission of a material fact. If, after appropriate research or consultation, the Officer concludes that the matter has authoritative support and/or does not result in a material misrepresentation, the Officer need do nothing further. o If the Officer concludes that the financial statements or records could be materially misstated as a result of the supervisor's determination, the Officer should follow the reporting procedures set forth in Section 4 of this Code. 3 D. OBLIGATIONS TO THE INDEPENDENT AUDITOR OF THE TRUST In dealing with the Trust's independent auditor, Officers must be candid and not knowingly misrepresent facts or knowingly fail to disclose material facts, and must respond to specific inquiries and requests by the Trust's independent auditor. Officers must not take any action, or direct any person to take any action, to fraudulently influence, coerce, manipulate or mislead the Trust's independent auditor in the performance of an audit of the Trust's financial statements for the purpose of rendering such financial statements materially misleading. 2. FULL, FAIR, ACCURATE, TIMELY AND UNDERSTANDABLE DISCLOSURE It is the Trust's policy to provide full, fair, accurate, timely, and understandable disclosure in reports and documents that the Trust files with, or submits to, the SEC and in any other public communications by the Trust. The Trust has designed and implemented Disclosure Controls and Procedures to carry out this policy. Officers are expected to use their best efforts to promote, facilitate, and prepare full, fair, accurate, timely, and understandable disclosure in all reports and documents that the Trust files with, or submits to, the SEC and in any other public communications by the Trust. Officers must review the Trust's Disclosure Controls and Procedures to ensure they are aware of and carry out their duties and responsibilities in accordance with the Disclosure Controls and Procedures and the public reporting obligations of the Trust. Officers are responsible for monitoring the integrity and effectiveness of the Trust's Disclosure Controls and Procedures. 3. COMPLIANCE WITH APPLICABLE LAWS, RULES AND REGULATIONS Officers are expected to know, respect and comply with all laws, rules and regulations applicable to the conduct of the Trust's business. If an Officer is in doubt about the legality or propriety of an action, business practice or policy, the Officer should seek advice from the Officer's supervisor or the Trust's legal counsel. In the performance of their work, Officers must not knowingly be a party to any illegal activity or engage in acts that are discreditable to the Trust. Officers are expected to promote the Trust's compliance with applicable laws, rules and regulations. To promote such compliance, Officers may establish and maintain mechanisms to educate employees carrying out the finance and compliance functions of the Trust about any applicable laws, rules or regulations that affect the operation of the finance and compliance functions and the Trust generally. 4 4. REPORTING OF ILLEGAL OR UNETHICAL BEHAVIOR Officers should promptly report any conduct or actions by an Officer that do not comply with the law or with this Code. Officers and the Trust shall adhere to the following reporting procedures: o Any Officer who questions whether a situation, activity or practice is acceptable must immediately report such practice to the Principal Executive Officer of the Trust (or to an Officer who is the functional equivalent of this position) or to the Trust's legal counsel. The person receiving the report shall consider the matter and respond to the Officer within a reasonable amount of time. o If the Officer is not satisfied with the response of the Principal Executive Officer or counsel, the Officer must report the matter to the Chairman of the Audit Committee. If the Chairman is unavailable, the Officer may report the matter to any other member of the Audit Committee. The person receiving the report shall consider the matter, refer it to the full Audit Committee if he or she deems appropriate, and respond to the Officer within a reasonable amount of time. o If, after receiving a response, the Officer concludes that appropriate action was not taken, he or she should consider any responsibility that may exist to communicate to third parties, such as regulatory authorities or the Trust's independent auditor. In this matter, the Officer may wish to consult with his or her own legal counsel. o The Audit Committee and the Trust will not be responsible for monitoring or enforcing this reporting of violations policy, but rather each Officer is responsible for self-compliance with this reporting of violations policy. o To the extent possible and as allowed by law, reports will be treated as confidential. o If the Audit Committee determines that an Officer violated this Code, failed to report a known or suspected violation of this Code, or provided intentionally false or malicious information in connection with an alleged violation of this Code, the Trust may take disciplinary action against any such Officer to the extent the Audit Committee deems appropriate. No Officer will be disciplined for reporting a concern in good faith. o The Trust and the Audit Committee may report violations of the law to the appropriate authorities. 5 5. ACCOUNTABILITY AND APPLICABILITY All Officers will be held accountable for adherence to this Code. On an annual basis, within 30 days of the beginning of each calendar year, each Officer shall certify in writing his or her receipt, familiarity and commitment to compliance with this Code, by signing the Acknowledgment Form (APPENDIX A to this Code). This Code is applicable to all Officers, regardless of whether such persons are employed by the Trust or a third party. If an Officer is aware of a person ("Potential Officer") who may be considered an Officer as defined by this Code, the Officer should inform legal counsel to the Trust of such Potential Officer so that a determination can be made regarding whether such Potential Officer has completed or should complete an Acknowledgment Form. However, the absence of such a determination will not be deemed to relieve any person of his or her duties under this Code. 6. DISCLOSURE OF THIS CODE This Code shall be disclosed by at least one of the following methods in the manner prescribed by the SEC, unless otherwise required by law: o by filing a copy of the Code with the SEC; o by posting the text of the Code on the Trust's website; or o by providing, without charge, a copy of the Code to any person upon request. 7. WAIVERS Any waiver of this Code, including an implicit waiver, that has been granted to an Officer, may be made only by the Board or a committee of the Board to which such responsibility has been delegated, and must be disclosed by the Trust in the manner prescribed by law and as set forth above in Section 6 (Disclosure of this Code). 8. AMENDMENTS This Code may be amended by the affirmative vote of a majority of the Board. Any amendment of this Code, must be disclosed by the Trust in the manner prescribed by law and as set forth above in Section 6 (Disclosure of this Code), unless such amendment is deemed to be technical, administrative, or otherwise non-substantive. Any amendments to this Code will be provided to the Officers. Approved by the Board of Trustees on August 14, 2003. 6 APPENDIX A - ---------- CNI CHARTER FUNDS CERTIFICATION AND ACKNOWLEDGMENT OF RECEIPT OF SUPPLEMENTAL CODE OF ETHICS FOR PRINCIPAL OFFICERS AND SENIOR FINANCIAL OFFICERS I acknowledge and certify that I have received a copy of the CNI Charter Funds' Supplemental Code of Ethics for Principal Officers and Senior Financial Officers (the "Code"). I understand and agree that it is my responsibility to read and familiarize myself with the policies and procedures contained in the Code and to abide by those policies and procedures. I acknowledge my commitment to comply with the Code. ------------------------------ -------------------------------------------- Officer Name (Please Print) Officer Signature -------------------------------------------- Date
EX-99.CERT 3 g54646a_302cert.txt CERTIFICATION Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 I, Richard A. Weiss 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: November 25, 2009 /S/ RICHARD A. WEISS - -------------------- Richard A. Weiss President & CEO 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: November 25, 2009 /S/ ERIC KLEINSCHMIDT - ---------------------- Eric Kleinschmidt Controller & COO EX-99.906CERT 4 g54646a_906cert.txt 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 September 30, 2009 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: November 25, 2009 /S/ Richard A. Weiss -------------------- Richard A. Weiss President & CEO 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 September 30, 2009 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: November 25, 2009 /S/ Eric Kleinschmidt --------------------- Eric Kleinschmidt Controller & COO -----END PRIVACY-ENHANCED MESSAGE-----