N-CSR 1 amf-ncsra.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES 811-10267 (Investment Company Act File Number) ASSETMARK FUNDS (Exact Name of Registrant as Specified in Charter) 2300 CONTRA COSTA BOULEVARD, SUITE 425, PLEASANT HILL, CA 945230-3967 (Address of Principal Executive Offices) (800) 664-5345 (Registrant's Telephone Number) CARRIE HANSEN ASSETMARK INVESTMENT SERVICES, INC. 2300 CONTRA COSTA BOULEVARD, SUITE 425 PLEASANT HILL, CA 94523-3967 (Name and Address of Agent for Service) COPIES TO: MICHAEL P. O'HARE, ESQ. ELAINE RICHARDS, ESQ. STRADLEY, RONON, STEVENS & YOUNG, LLP U.S. BANCORP FUND SERVICES, LLC 2600 ONE COMMERCE SQUARE 615 EAST MICHIGAN STREET PHILADELPHIA, PA 19103-7098 MILWAUKEE, WISCONSIN 5320 DATE OF FISCAL YEAR END: JUNE 30, 2003 DATE OF REPORTING PERIOD: FISCAL PERIOD ENDED JUNE 30, 2003 ITEM 1: REPORT TO SHAREHOLDERS (ASSETMARK FUNDS(R) LOGO) Annual Report June 30, 2003 Annual Report June 30, 2003 (ASSETMARK FUNDS(R) LOGO) INVESTMENT ADVISOR AssetMark Investment Services, Inc. ASSETMARK LARGE CAP GROWTH FUND ASSETMARK LARGE CAP VALUE FUND ASSETMARK SMALL/MID CAP GROWTH FUND ASSETMARK SMALL/MID CAP VALUE FUND ASSETMARK INTERNATIONAL EQUITY FUND ASSETMARK REAL ESTATE SECURITIES FUND ASSETMARK TAX-EXEMPT FIXED INCOME FUND ASSETMARK CORE PLUS FIXED INCOME FUND (ASSETMARK FUNDS(R) LOGO) August 2003 Dear Shareholder: Following their volatile performance in the second half of 2002, the major stock markets encompassed a positive reversal in the first half of 2003, with several important catalysts contributing to an upswing that began in late March. Markets were weighed down in the First Quarter by weak earnings reports from Wall Street and by fears of prolonged conflict in Iraq. Economic reports during the quarter deteriorated1 while unemployment continued to climb. However, the tide turned with the conclusion of the War and a rebound in many important economic metrics. Corporate profit reports during the Second Quarter showed improvement, giving analysts hope for a second half recovery. In addition, the U.S. economy received both fiscal and monetary stimulus during the Second Quarter, with Congress' passage of tax relief in May and the Fed's decision to cut rates by 25 basis points in June. The Fed's decision sparked a sell-off in the bond market, but not enough to erase the strong gains accumulated earlier in the quarter. The AssetMark Funds have generally performed in accordance with their sectors and style-orientation during this incredibly challenging period. In consultation with Wilshire Associates, an institutional investment research and consulting firm, AssetMark Investment Services, Inc. ("AssetMark") strives to identify highly skilled investment managers as Sub-Advisors for each Fund. When appropriate, AssetMark seeks to combine the skills of multiple managers with complementary investment strategies to attempt to reduce volatility and achieve more consistent investment results. During this ongoing process, AssetMark leverages Wilshire's experienced investment staff, due diligence, and proprietary research capabilities. THE ASSETMARK LARGE CAP GROWTH FUND rose 4.26% for the 12 months ended 6/30/03, outperforming the Russell 1000 Growth Index2, a widely accepted unmanaged benchmark for Large Cap Growth portfolios, which rose 2.94%. Atlanta Capital trailed the benchmark during the period, returning -2.82%., while on the other hand TCW Investment Management outperformed the benchmark by a wide margin, returning 12.08% during the period. THE ASSETMARK LARGE CAP VALUE FUND declined slightly for the 12 months ended 6/30/03, as did the Russell 1000 Value Index, a widely accepted unmanaged benchmark for Large Cap Value portfolios. Brandes Investment Partners and Davis Advisors trailed the benchmark during the period, returning -4.79% and -3.25% respectively. For the 12 months ended 6/30/03, the AssetMark Large Cap Value Fund returned -3.89%, as compared to -1.02% for the Russell 1000 Value Index. THE ASSETMARK SMALL/MID CAP GROWTH FUND rose 6.11% for the 12 months ended 6/30/03, beating its benchmark, the Russell 2500 Growth Index, a widely accepted unmanaged benchmark for portfolios of Small-to-Mid Cap Growth stocks, which gained 4.11%. TCW Investment Management's aggressive growth strategy, propelled by its allocation to the technology sector, outperformed the benchmark by a wide margin returning 25.60%. On the other hand, William Blair & Co.' s more moderate investment strategy, returned -11.11%, trailing the benchmark. THE ASSETMARK SMALL/MID CAP VALUE FUND declined slightly, returning -0.20%, modestly beating its Russell 2500 Value benchmark, which returned -0.60%. This unmanaged index is a widely accepted benchmark for portfolios of Small-to-Mid Cap Value stocks. Ariel Capital Management trailed the benchmark during the period, returning -1.52%, while Cramer Rosenthal McGlynn, LLC beat the benchmark, returning 1.23%. THE ASSETMARK INTERNATIONAL EQUITY FUND returned -7.92% for the 12 months ended 6/30/03, slightly trailing the MSCI EAFE Index of developed country non- U.S. stocks, which returned -6.06%. This unmanaged benchmark is widely accepted for International Equity portfolios. Both of the Fund's sub-advisors, Clay Finlay Inc. and Oppenheimer Capital, Inc. were retained in December of 2002. THE ASSETMARK REAL ESTATE SECURITIES FUND, sub-advised by Lend Lease Rosen Real Estate Securities, rose 4.87% for the 12 months ended 6/30/03, beating the Wilshire REIT benchmark, which gained 3.73%. THE ASSETMARK TAX-EXEMPT INCOME FUND, sub-advised by Weiss, Peck & Greer, posted a return of 7.78% for the 12 months ended 6/30/03, slightly lagging the benchmark. Lehman Brothers Municipal Bond Index, a widely accepted unmanaged benchmark for municipal bond portfolios, returned 8.74%. THE ASSETMARK CORE PLUS FIXED INCOME FUND, a fund that purchases shares of other institutional fixed income funds, outperformed the Lehman Brothers Aggregate Bond Index for the 12 months ended 6/30/2003, returning 10.47% versus 10.40% for the benchmark. The Lehman Brothers Aggregate Bond Index is a widely accepted unmanaged benchmark for Core U.S. Fixed Income portfolios. The International and High Yield portions of the Fund had a positive contribution to the Fund's returns during the first half of 2003. In consultation with Wilshire Associates, AssetMark continues to research and monitor a broad universe of investment managers in our endeavor to provide shareholders with superior investment results. We thank you for the opportunity to shepherd your investments in what has been, on many levels, a difficult environment. We believe the AssetMark Funds are well positioned to meet the challenges and opportunities that lie ahead. Sincerely, /s/ Ronald D. Cordes Ronald D. Cordes, President AssetMark Funds 1 Including the Conference Board's consumer confidence reading, the ISM manufacturing surveys, and US government reports on consumer spending. 2 Source: All benchmark return data provided by Lipper Inc. One cannot invest directly in an index, nor is an index representative of any Fund's portfolio. The indexes provided are widely accepted benchmarks for the associated portfolios. The performance data quoted represents past performance. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. AssetMark Large Cap Growth Fund PERFORMANCE DATA TOTAL RETURN BASED ON A $10,000 INVESTMENT AssetMark Large Lipper Large-Cap Russell 1000 Date Cap Growth Fund Growth Funds Index Growth Index ---- --------------- ------------------ ------------ 6/29/2001 $10,000.00 $10,000.00 $10,000.00 9/30/2001 $7,380.00 $8,013.00 $8,059.00 12/31/2001 $8,990.00 $9,152.00 $9,279.00 3/31/2002 $8,930.00 $8,919.00 $9,039.00 6/30/2002 $7,280.00 $7,508.00 $7,351.00 9/30/2002 $5,890.00 $6,305.00 $6,245.00 12/31/2002 $6,530.00 $6,578.00 $6,691.00 3/31/2003 $6,551.00 $6,477.00 $6,620.00 6/30/2003 $7,590.00 $7,352.00 $7,567.00 This chart assumes an initial gross investment of $10,000 made on 6/29/01 (commencement of operations). Returns shown include the reinvestment of all dividends. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. In the absence of fee waivers and reimbursements, total return would be reduced. Past performance is not predictive of future performance. Investment return and principal value will fluctuate, so that your shares, when redeemed, may be worth more or less than the original cost. RUSSELL 1000 GROWTH INDEX - An unmanaged index which measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values. The Russell 1000 Index is an unmanaged index which measures the performance of the 1,000 largest companies in the Russell 3000 Index. The Russell 3000 Index is an unmanaged index which measures the performance of the 3,000 largest U.S. Companies, based on total market capitalization, which represents approximately 98% of the investable U.S. equity market. LIPPER LARGE-CAP GROWTH FUNDS INDEX - An unmanaged index which measures the composite performance of the 30 largest "large-cap growth" mutual funds, as categorized by Lipper Inc. AVERAGE ANNUAL TOTAL RETURN (FOR THE PERIODS ENDED JUNE 30, 2003) ----------------------------------------------------------------- ONE YEAR SINCE INCEPTION (6/29/01) -------- ------------------------- AssetMark Large Cap Growth Fund 4.26% -12.86% Russell 1000 Growth Index 2.94% -13.01% Lipper Large-Cap Growth Funds Index -2.08% -14.25% AssetMark Large Cap Growth Fund SCHEDULE OF INVESTMENTS June 30, 2003 NUMBER OF MARKET SHARES VALUE --------- ------ COMMON STOCK 93.95% MINING 1.16% OIL AND GAS EXTRACTION 1.16% 20,985 Apache Corporation $ 1,365,284 ------------ Total Mining 1,365,284 ------------ MANUFACTURING 49.60% FOOD AND KINDRED PRODUCTS 0.88% 22,500 The Coca-Cola Company 1,044,225 ------------ PRINTING, PUBLISHING AND ALLIED INDUSTRIES 1.54% 10,400 The New York Times Company 473,200 30,900 Viacom Inc. # 1,349,094 ------------ 1,822,294 ------------ CHEMICALS AND ALLIED PRODUCTS 18.08% 27,400 Air Products and Chemicals, Inc. 1,139,840 73,650 Amgen Inc. # 4,893,306 14,200 Colgate-Palmolive Company 822,890 37,600 Ecolab Inc. 962,560 46,650 Eli Lilly and Company 3,217,451 25,200 The Estee Lauder Companies Inc. 844,956 54,610 Genentech, Inc. # 3,938,473 54,700 MedImmune, Inc. # 1,990,533 8,900 Merck & Co. Inc. 538,895 54,500 Pfizer Inc. 1,861,175 63,700 Schering-Plough Corporation 1,184,820 ------------ 21,394,899 ------------ PETROLEUM REFINING AND RELATED INDUSTRIES 0.68% 22,400 Exxon Mobil Corporation 804,384 ------------ FABRICATED METAL PRODUCTS, EXCEPT MACHINERY AND TRANSPORTATION EQUIPMENT 0.97% 17,500 Illinois Tool Works Inc. 1,152,375 ------------ INDUSTRIAL AND COMMERCIAL MACHINERY AND COMPUTER EQUIPMENT 10.72% 114,900 Applied Materials, Inc. # 1,820,016 187,900 Cisco Systems, Inc. # 3,154,841 132,850 Dell Computer Corporation 4,229,944 37,100 Dover Corporation 1,111,516 113,100 EMC Corporation # 1,184,157 9,200 3M Co. 1,186,616 ------------ 12,687,090 ------------ ELECTRONIC AND OTHER ELECTRICAL EQUIPMENT AND COMPONENTS, EXCEPT COMPUTER EQUIPMENT 12.88% 30,800 American Power Conversion Corporation 480,788 28,000 Emerson Electric Co. 1,430,800 34,950 General Electric Company 1,002,366 110,600 Intel Corporation 2,298,710 17,000 Linear Technology Corporation 550,290 68,200 Maxim Integrated Products, Inc. 2,325,620 43,900 Microchip Technology Incorporated 1,086,525 33,100 Molex Incorporated 893,038 159,300 Network Appliance, Inc. # 2,561,544 32,450 QUALCOMM Inc. 1,166,253 57,400 Xilinx, Inc. # 1,452,220 ------------ 15,248,154 ------------ TRANSPORTATION EQUIPMENT 0.86% 25,600 Harley-Davidson, Inc. 1,020,416 ------------ MEASURING, ANALYZING AND CONTROLLING INSTRUMENTS; PHOTOGRAPHIC, MEDICAL AND OPTICAL GOODS; WATCHES AND CLOCKS 2.12% 21,900 DENTSPLY International Inc. 897,462 33,700 Medtronic, Inc. 1,616,589 ------------ 2,514,051 ------------ MISCELLANEOUS MANUFACTURING INDUSTRIES 0.87% 31,300 Tiffany & Co. 1,022,884 ------------ Total Manufacturing 58,710,772 ------------ TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS AND SANITARY SERVICES 2.67% TRANSPORTATION BY AIR 1.27% 87,300 Southwest Airlines Co. 1,501,560 ------------ COMMUNICATIONS 1.40% 23,100 ALLTEL Corporation 1,113,882 13,800 Verizon Communications Inc. 544,410 ------------ 1,658,292 ------------ Total Transportation, Communications, Electric, Gas and Sanitary Services 3,159,852 ------------ WHOLESALE TRADE 1.59% WHOLESALE TRADE - DURABLE GOODS 0.69% 15,800 Johnson & Johnson 816,860 ------------ WHOLESALE TRADE - NON-DURABLE GOODS 0.90% 35,400 Sysco Corporation 1,063,416 ------------ Total Wholesale Trade 1,880,276 ------------ RETAIL TRADE 12.17% BUILDING MATERIALS, HARDWARE, GARDEN SUPPLY AND MOBILE HOME DEALERS 1.04% 28,700 Lowe's Companies, Inc. 1,232,665 ------------ GENERAL MERCHANDISE STORES 1.30% 28,600 Wal-Mart Stores, Inc. 1,534,962 ------------ APPAREL AND ACCESSORY STORES 0.98% 22,600 Kohl's Corporation # 1,161,188 ------------ HOME FURNITURE, FURNISHINGS AND EQUIPMENT STORES 0.79% 24,000 Bed Bath & Beyond Inc. # 931,680 ------------ EATING AND DRINKING PLACES 0.85% 28,100 Brinker International, Inc. # 1,012,162 ------------ MISCELLANEOUS RETAIL 7.21% 92,000 Amazon.com, Inc. # 3,341,440 27,500 eBay Inc. # 2,860,000 77,500 Walgreen Co. 2,332,750 ------------ 8,534,190 ------------ Total Retail Trade 14,406,847 ------------ FINANCE, INSURANCE AND REAL ESTATE 14.94% DEPOSITORY INSTITUTIONS 1.79% 26,500 BB&T Corporation 908,950 15,300 Bank of America Corporation 1,209,159 ------------ 2,118,109 ------------ NON-DEPOSITORY CREDIT INSTITUTIONS 0.99% 28,000 American Express Company 1,170,680 ------------ SECURITY AND COMMODITY BROKERS, DEALERS, EXCHANGES AND SERVICES 2.70% 127,300 The Charles Schwab Corporation 1,284,457 27,400 Franklin Resources, Inc. 1,070,518 26,500 SEI Investments Company 848,000 ------------ 3,202,975 ------------ INSURANCE CARRIERS 9.46% 80,600 AFLAC INCORPORATED 2,478,450 47,400 American International Group, Inc. 2,615,532 66,150 The Progressive Corporation 4,835,565 15,000 WellPoint Health Networks Inc. # 1,264,500 ------------ 11,194,047 ------------ Total Finance, Insurance and Real Estate 17,685,811 ------------ SERVICES 11.82% BUSINESS SERVICES 11.00% 12,700 Adobe Systems Incorporated 407,416 51,800 Concord EFS, Inc. # 762,496 18,000 Fiserv, Inc. # 640,980 135,700 Microsoft Corporation 3,479,348 12,300 Omnicom Group Inc. 881,910 32,450 Pixar, Inc. # 1,965,821 126,600 Siebel Systems, Inc. # 1,200,548 38,600 SunGard Data Systems Inc. # 1,000,126 82,000 Yahoo! Inc. # 2,681,400 ------------ 13,020,045 ------------ HEALTH SERVICES 0.82% 52,500 Health Management Associates, Inc. 968,625 ------------ Total Services 13,988,670 ------------ TOTAL COMMON STOCK (COST $104,895,161) 111,197,512 ------------ SHORT TERM INVESTMENTS 4.92% MONEY MARKET FUND 4.92% 5,822,872 Federated Prime Obligations Fund 5,822,872 ------------ TOTAL SHORT-TERM INVESTMENTS (COST $5,822,872) 5,822,872 ------------ TOTAL INVESTMENTS 98.87% (COST $110,718,033) 117,020,384 ------------ OTHER ASSETS, LESS LIABILITIES 1.13% 1,342,942 ------------ NET ASSETS 100% $118,363,326 ------------ ------------ # Non-income producing security. See notes to financial statements. AssetMark Large Cap Value Fund PERFORMANCE DATA TOTAL RETURN BASED ON A $10,000 INVESTMENT AssetMark Large Russell 1000 Lipper Large-Cap Date Cap Value Fund Value Index Value Funds Index ---- -------------- ----------- ----------------- 6/29/2001 $10,000.00 $10,000.00 $10,000.00 9/30/2001 $9,140.00 $8,905.00 $8,729.00 12/31/2001 $10,067.00 $9,561.00 $9,490.00 3/31/2002 $10,338.00 $9,952.00 $9,672.00 6/30/2002 $9,224.00 $9,104.00 $8,626.00 9/30/2002 $7,058.00 $7,395.00 $7,016.00 12/31/2002 $7,815.00 $8,076.00 $7,622.00 3/31/2003 $7,230.00 $7,683.00 $7,250.00 6/30/2003 $8,865.00 $9,010.00 $8,442.00 This chart assumes an initial gross investment of $10,000 made on 6/29/01 (commencement of operations). Returns shown include the reinvestment of all dividends. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. In the absence of fee waivers and reimbursements, total return would be reduced. Past performance is not predictive of future performance. Investment return and principal value will fluctuate, so that your shares, when redeemed, may be worth more or less than the original cost. RUSSELL 1000 VALUE INDEX - An unmanaged index which measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values. The Russell 1000 Index is an unmanaged index which measures the performance of the 1,000 largest companies in the Russell 3000 Index. The Russell 3000 Index is an unmanaged index which measures the performance of the 3,000 largest U.S. Companies, based on total market capitalization, which represents approximately 98% of the investable U.S. equity market. LIPPER LARGE-CAP VALUE FUNDS INDEX - An unmanaged index which measures the composite performance of the 30 largest "large-cap value" mutual funds, as categorized by Lipper Inc. AVERAGE ANNUAL TOTAL RETURN (FOR THE PERIODS ENDED JUNE 30, 2003) ----------------------------------------------------------------- ONE YEAR SINCE INCEPTION (6/29/01) -------- ------------------------- AssetMark Large Cap Value Fund -3.89% -5.84% Russell 1000 Value Index -1.02% -0.19% Lipper Large-Cap Value Funds Index -2.13% -8.12% AssetMark Large Cap Value Fund SCHEDULE OF INVESTMENTS June 30, 2003 NUMBER OF MARKET SHARES VALUE --------- ------ COMMON STOCK 93.87% MINING 2.19% OIL AND GAS EXTRACTION 1.81% 25,300 Devon Energy Corporation $ 1,351,020 18,700 EOG Resources, Inc. 782,408 ------------ 2,133,428 ------------ MINING AND QUARRYING OF NONMETALLIC MINERALS, EXCEPT FUELS 0.38% 12,200 Vulcan Materials Company 452,254 ------------ Total Mining 2,585,682 ------------ MANUFACTURING 31.81% FOOD AND KINDRED PRODUCTS 2.77% 90,430 Archer-Daniels-Midland Company 1,163,834 23,300 Diageo PLC 1,019,608 9,100 Hershey Foods Corporation 633,906 13,800 Kraft Foods Inc. 449,190 ------------ 3,266,538 ------------ TOBACCO PRODUCTS 5.31% 113,500 Altria Group, Inc. 5,157,440 16,390 R.J. Reynolds Tobacco Holdings, Inc. 609,872 14,100 UST Inc. 493,923 ------------ 6,261,235 ------------ FURNITURE AND FIXTURES 0.52% 13,360 Lear Corporation # 614,827 ------------ PAPER AND ALLIED PRODUCTS 0.65% 14,720 Kimberly-Clark Corporation 767,501 ------------ PRINTING, PUBLISHING AND ALLIED INDUSTRIES 0.93% 30,100 American Greetings Corporation # 591,164 6,600 Gannett Co., Inc. 506,946 ------------ 1,098,110 ------------ CHEMICALS AND ALLIED PRODUCTS 4.42% 50,350 Bristol-Myers Squibb Company 1,367,002 15,900 Eli Lilly and Company 1,096,623 13,500 Great Lakes Chemical Corporation 275,400 5,600 Merck & Co. Inc. 339,080 21,300 Pfizer Inc. 727,395 75,190 Schering-Plough Corporation 1,398,534 ------------ 5,204,034 ------------ PETROLEUM REFINING AND RELATED INDUSTRIES 1.97% 27,552 ConocoPhillips 1,509,850 30,900 Marathon Oil Corporation 814,215 ------------ 2,324,065 ------------ RUBBER AND MISCELLANEOUS PLASTICS PRODUCTS 2.84% 95,500 The Goodyear Tire & Rubber Company # 501,375 49,000 Sealed Air Corporation # 2,335,340 35,800 Tupperware Corporation 514,088 ------------ 3,350,803 ------------ PRIMARY METAL INDUSTRIES 0.76% 54,830 United States Steel Corporation 897,567 ------------ INDUSTRIAL AND COMMERCIAL MACHINERY AND COMPUTER EQUIPMENT 2.45% 22,900 Dover Corporation 686,084 66,986 Hewlett-Packard Company 1,426,802 7,100 Lexmark International, Inc. # 502,467 71,000 Solectron Corporation # 265,540 ------------ 2,880,893 ------------ ELECTRONIC AND OTHER ELECTRICAL EQUIPMENT AND COMPONENTS, EXCEPT COMPUTER EQUIPMENT 3.38% 605,690 Lucent Technologies Inc. # 1,229,551 101,330 Micron Technology, Inc. # 1,178,468 166,810 Motorola, Inc. 1,573,018 ------------ 3,981,037 ------------ TRANSPORTATION EQUIPMENT 3.14% 41,200 The Boeing Company 1,413,984 106,740 Ford Motor Company 1,173,073 30,850 General Motors Corporation 1,110,600 ------------ 3,697,657 ------------ MEASURING, ANALYZING AND CONTROLLING INSTRUMENTS; PHOTOGRAPHIC, MEDICAL AND OPTICAL GOODS; WATCHES AND CLOCKS 1.23% 136,700 Xerox Corporation # 1,447,653 ------------ MISCELLANEOUS MANUFACTURING INDUSTRIES 1.44% 89,200 Tyco International Ltd. 1,693,016 ------------ Total Manufacturing 37,484,936 ------------ TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS AND SANITARY SERVICES 12.95% MOTOR FREIGHT TRANSPORTATION AND WAREHOUSING 0.63% 11,600 United Parcel Service, Inc. 738,920 ------------ TRANSPORTATION BY AIR 1.10% 82,540 AMR Corporation # 907,940 26,500 Delta Air Lines, Inc. 389,020 ------------ 1,296,960 ------------ COMMUNICATIONS 6.19% 168,600 Avaya Inc. # 1,089,156 55,520 BellSouth Corporation 1,478,498 70,620 SBC Communications Inc. 1,804,341 102,380 Sprint Corporation 1,474,272 36,850 Verizon Communications Inc. 1,453,732 ------------ 7,299,999 ------------ ELECTRIC, GAS AND SANITARY SERVICES 5.03% 66,960 Duke Energy Corporation 1,335,852 48,200 Edison International # 791,926 115,420 EL Paso Corporation 932,594 10,000 FirstEnergy Corp. 384,500 62,430 PG&E Corporation # 1,320,394 48,090 Waste Management, Inc. 1,158,488 ------------ 5,923,754 ------------ Total Transportation, Communications, Electric, Gas and Sanitary Services 15,259,633 ------------ WHOLESALE TRADE 2.03% WHOLESALE TRADE - NON-DURABLE GOODS 2.03% 116,940 Safeway Inc. # 2,392,592 ------------ Total Wholesale Trade 2,392,592 ------------ RETAIL TRADE 9.92% BUILDING MATERIALS, HARDWARE, GARDEN SUPPLY AND MOBILE HOME DEALERS 0.71% 31,300 The Sherwin-Williams Company 841,344 ------------ GENERAL MERCHANDISE STORES 3.69% 65,900 Costco Wholesale Corporation # 2,411,940 22,830 Federated Department Stores, Inc. 841,285 49,100 The May Department Stores Company 1,092,966 ------------ 4,346,191 ------------ FOOD STORES 2.79% 91,670 Albertson's, Inc. 1,760,064 91,270 The Kroger Co. # 1,522,384 ------------ 3,282,448 ------------ HOME FURNITURE, FURNISHINGS AND EQUIPMENT STORES 0.43% 19,400 RadioShack Corporation 510,414 ------------ EATING AND DRINKING PLACES 1.39% 74,380 McDonald's Corporation 1,640,823 ------------ MISCELLANEOUS RETAIL 0.91% 87,920 Toys "R" Us, Inc. # 1,065,590 ------------ Total Retail Trade 11,686,810 ------------ FINANCE, INSURANCE AND REAL ESTATE 27.62% DEPOSITORY INSTITUTIONS 11.99% 60,500 Bank One Corporation 2,249,390 61,800 Citigroup Inc. 2,645,040 23,400 FleetBoston Financial Corporation 695,214 25,500 Golden West Financial Corporation 2,040,255 39,769 HSBC Holdings PLC 2,350,746 29,600 J.P. Morgan Chase & Co. 1,011,728 23,200 Lloyds TSB Group PLC 673,032 48,800 Wells Fargo & Company 2,459,520 ------------ 14,124,925 ------------ NON-DEPOSITORY CREDIT INSTITUTIONS 4.15% 80,100 American Express Company 3,348,981 62,480 CIT Group Inc. 1,540,132 ------------ 4,889,113 ------------ SECURITY AND COMMODITY BROKERS, DEALERS, EXCHANGES AND SERVICES 0.80% 22,100 Morgan Stanley 944,775 ------------ 944,775 ------------ INSURANCE CARRIERS 7.97% 61,200 American International Group, Inc. 3,377,016 2,900 American National Insurance Company 250,067 53,940 Loews Corporation 2,550,823 60,780 The Phoenix Companies, Inc. 548,843 22,900 The Progressive Corporation 1,673,990 14,400 Transatlantic Holdings, Inc. 995,760 ------------ 9,396,499 ------------ INSURANCE AGENTS, BROKERS AND SERVICES 0.62% 30,400 Aon Corporation 732,032 ------------ HOLDING AND OTHER INVESTMENT OFFICES 2.09% 1,014 Berkshire Hathaway Inc. # 2,464,020 ------------ Total Finance, Insurance, and Real Estate 32,551,364 ------------ SERVICES 7.35% HOTELS, ROOMING HOUSES, CAMPS AND OTHER LODGING PLACES 0.44% 13,500 Marriott International, Inc. 518,670 ------------ PERSONAL SERVICES 0.42% 127,610 Service Corporation International # 493,851 ------------ BUSINESS SERVICES 4.29% 15,600 D&B Corporation # 641,160 54,850 Electronic Data Systems Corporation 1,176,532 23,900 Microsoft Corporation 612,796 41,190 NCR Corporation # 1,055,288 127,970 Unisys Corporation # 1,571,472 ------------ 5,057,248 ------------ HEALTH SERVICES 1.52% 153,940 Tenet Healthcare Corporation # 1,793,401 ------------ ENGINEERING, ACCOUNTING, RESEARCH, MANAGEMENT AND RELATED SERVICES 0.68% 15,200 Moody's Corporation 801,192 ------------ Total Services 8,664,362 ------------ TOTAL COMMON STOCK (COST $104,930,167) 110,625,379 ------------ SHORT TERM INVESTMENTS 7.15% MONEY MARKET FUND 7.15% 8,421,383 Federated Prime Obligations Fund 8,421,383 ------------ TOTAL SHORT-TERM INVESTMENTS (COST $8,421,383) 8,421,383 ------------ TOTAL INVESTMENTS 101.02% (COST $113,351,550) 119,046,762 ------------ LIABILITIES, LESS OTHER ASSETS (1.02)% (1,199,515) ------------ NET ASSETS 100% $117,847,247 ------------ ------------ # Non-income producing security. See notes to financial statements. AssetMark Small/Mid Cap Growth Fund PERFORMANCE DATA TOTAL RETURN BASED ON A $10,000 INVESTMENT AssetMark Small/Mid Russell 2500 Lipper Small-Cap Date Cap Growth Fund Growth Index Growth Funds Index ---- --------------- ------------ ------------------ 6/29/2001 $10,000.00 $10,000.00 $10,000.00 9/30/2001 $7,170.00 $7,293.00 $7,497.00 12/31/2001 $9,300.00 $9,182.00 $9,195.00 3/31/2002 $8,960.00 $8,911.00 $9,063.00 6/30/2002 $7,200.00 $7,429.00 $7,840.00 9/30/2002 $5,800.00 $6,013.00 $6,311.00 12/31/2002 $6,420.00 $6,511.00 $6,656.00 3/31/2003 $6,361.00 $6,303.00 $6,407.00 6/30/2003 $7,640.00 $7,735.00 $7,903.00 This chart assumes an initial gross investment of $10,000 made on 6/29/01 (commencement of operations). Returns shown include the reinvestment of all dividends. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. In the absence of fee waivers and reimbursements, total return would be reduced. Past performance is not predictive of future performance. Investment return and principal value will fluctuate, so that your shares, when redeemed, may be worth more or less than the original cost. RUSSELL 2500 GROWTH INDEX - An unmanaged index which measures the performance of those Russell 2500 Index companies with higher price-to-book ratios and higher forecasted growth values. The Russell 2500 Index measures the performance of the 2,500 smallest companies in the Russell 3000 Index. The Russell 3000 Index is an unmanaged index which measures the performance of the 3,000 largest U.S. companies based on total market capitalization, which represents approximately 98% of the investable U.S. equity market. LIPPER SMALL-CAP GROWTH FUNDS INDEX - An unmanaged index which measures the composite performance of the 30 largest "small-cap growth" mutual funds, as categorized by Lipper Inc. AVERAGE ANNUAL TOTAL RETURN (FOR THE PERIODS ENDED JUNE 30, 2003) ----------------------------------------------------------------- ONE YEAR SINCE INCEPTION (6/29/01) -------- ------------------------- AssetMark Small/Mid Cap Growth Fund 6.11% -12.58% Russell 2500 Growth Index 4.11% -12.06% Lipper Small-Cap Growth Funds Index 0.80% -11.10% AssetMark Small/Mid Cap Growth Fund SCHEDULE OF INVESTMENTS June 30, 2003 NUMBER OF MARKET SHARES VALUE --------- ------ COMMON STOCK 96.83% MANUFACTURING 26.10% CHEMICALS AND ALLIED PRODUCTS 6.43% 30,975 Axcan Pharma Inc. # $ 388,736 4,200 Genentech, Inc. # 302,904 17,800 Gilead Sciences, Inc. # 988,790 9,500 MedImmune, Inc. # 345,705 ----------- 2,026,135 ----------- STONE, CLAY, GLASS AND CONCRETE PRODUCTS 0.97% 9,950 Gentex Corporation # 304,968 ----------- PRIMARY METAL INDUSTRIES 1.08% 13,750 Matthews International Corporation 340,450 ----------- ELECTRONIC AND OTHER ELECTRICAL EQUIPMENT AND COMPONENTS, EXCEPT COMPUTER EQUIPMENT 13.89% 11,900 Altera Corporation # 195,160 26,000 Applied Micro Circuits Corporation # 157,300 22,500 CIENA Corporation # 116,325 10,600 GlobespanVirata, Inc. # 88,616 7,011 Harris Corporation 210,681 7,600 Intersil Corporation # 202,236 27,500 Maxim Integrated Products, Inc. 937,750 14,187 Microchip Technology Incorporated 351,128 20,560 Monolithic System Technology, Inc. # 187,302 17,800 Network Appliance, Inc. # 286,224 6,400 Novellus Systems, Inc. # 234,374 13,625 OSI Systems, Inc. # 218,000 8,500 Research In Motion Limited # 183,770 6,075 Semtech Corporation # 86,569 36,500 Xilinx, Inc. # 923,450 ----------- 4,378,885 ----------- MEASURING, ANALYZING, AND CONTROLLING INSTRUMENTS; PHOTOGRAPHIC, MEDICAL AND OPTICAL GOODS; WATCHES AND CLOCKS 3.73% 3,700 Biosite Incorporated # 178,266 82,050 CardioDynamics International Corporation # 278,970 11,000 Integra LifeSciences Holdings # 289,960 10,975 ResMed Inc. # 430,220 ----------- 1,177,416 ----------- Total Manufacturing 8,227,854 ----------- TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS, AND SANITARY SERVICES 18.66% TRANSPORTATION BY AIR 1.11% 7,800 Ryanair Holdings PLC # 350,376 ----------- TRANSPORTATION SERVICES 3.33% 7,025 C.H. Robinson Worldwide, Inc. 248,685 10,200 Expedia, Inc. - Class A # 776,628 422 Expedia, Inc. - Warrant # 23,016 ----------- 1,048,329 ----------- COMMUNICATIONS 13.39% 12,600 Cablevision Systems New York Group # 261,576 8,100 Clear Channel Communications, Inc. # 343,359 13,400 Cox Radio, Inc. # 309,674 29,200 EchoStar Communications Corporation # 1,010,904 11,225 Emmis Communications Corporation # 257,614 24,400 Entravision Communications Corporation # 276,940 7,675 Global Payments Inc. 272,463 7,450 Hispanic Broadcasting Corporation # 189,603 37,500 Mediacom Communications Corporation # 366,000 36,000 Sprint Corp (PCS Group) # 207,000 13,100 Time Warner Telecom Inc. # 80,434 21,200 Univision Communications Inc. # 644,480 ----------- 4,220,047 ----------- ELECTRIC, GAS AND SANITARY SERVICES 0.83% 6,825 Stericycle, Inc. # 261,807 ----------- Total Transportation, Communications, Electric, Gas and Sanitary Services 5,880,559 ----------- WHOLESALE TRADE 2.36% WHOLESALE TRADE - DURABLE GOODS 0.94% 11,850 Knight Transportation, Inc. # 295,420 ----------- WHOLESALE TRADE - NON-DURABLE GOODS 1.42% 26,750 Airgas, Inc. 448,063 ----------- Total Wholesale Trade 743,483 ----------- RETAIL TRADE 15.34% BUILDING MATERIALS, HARDWARE, GARDEN SUPPLY AND MOBILE HOME DEALERS 1.08% 10,000 Fastenal Company 339,400 ----------- GENERAL MERCHANDISE STORES 1.37% 11,575 Fred's, Inc. 433,021 ----------- FOOD STORES 0.74% 4,925 Whole Foods Market, Inc. # 234,085 ----------- HOME FURNITURE, FURNISHINGS AND EQUIPMENT STORES 4.01% 22,400 Bed Bath & Beyond Inc. # 869,568 13,525 Williams-Sonoma, Inc. # 394,930 ----------- 1,264,498 ----------- MISCELLANEOUS RETAIL 8.14% 15,300 Amazon.com, Inc. # 555,696 16,200 eBay Inc. # 1,684,800 8,550 Michaels Stores, Inc. 325,413 ----------- 2,565,909 ----------- Total Retail Trade 4,836,913 ----------- FINANCE, INSURANCE AND REAL ESTATE 5.62% DEPOSITORY INSTITUTIONS 3.12% 16,225 Boston Private Financial Holdings, Inc. 342,672 30,575 Euronet Worldwide, Inc. # 328,681 10,750 Investors Financial Services Corp. 311,212 ----------- 982,565 ----------- SECURITY AND COMMODITY BROKERS, DEALERS, EXCHANGES AND SERVICES 2.28% 1,800 The Chicago Mercantile Exchange 125,334 7,600 SEI Investments Company 243,200 9,300 T. Rowe Price Group Inc. 351,261 ----------- 719,795 ----------- INSURANCE CARRIERS 0.22% 1,900 Cincinnati Financial Corporation 70,376 ----------- Total Finance, Insurance, and Real Estate 1,772,736 ----------- SERVICES 28.75% PERSONAL SERVICES 2.66% 24,025 FirstService Corporation # 372,339 15,875 Regis Corporation 461,169 100 Weight Watchers International, Inc. # 4,549 ----------- 838,057 ----------- BUSINESS SERVICES 14.87% 21,225 Activision, Inc. # 276,562 19,700 Agile Software Corporation # 189,908 17,900 BEA Systems, Inc. # 194,931 15,350 The BISYS Group, Inc. # 281,979 9,800 CheckFree Corp. # 274,400 6,300 Cognex Corporation # 140,679 9,287 Iron Mountain Incorporated # 344,455 31,100 Juniper Networks, Inc. # 387,817 34,050 OPNET Technologies, Inc. # 415,069 6,100 Robert Half International, Inc. # 115,534 36,500 Siebel Systems, Inc. # 346,130 66,307 SkillSoft PLC # 334,850 14,675 StarTek, Inc. # 385,953 2,600 Symantec Corporation # 114,166 15,100 webMethods, Inc. # 122,461 23,300 Yahoo! Inc. # 761,910 ----------- 4,686,804 ----------- AMUSEMENT AND RECREATION SERVICES 3.64% 13,975 Speedway Motorsports, Inc. 374,530 22,800 Westwood One, Inc. 773,604 ----------- 1,148,134 ----------- HEALTH SERVICES 2.45% 5,510 American Healthways, Inc. # 198,470 17,050 Cross Country Healthcare, Inc. # 224,378 5,100 Express Scripts, Inc. # 347,769 ----------- 770,617 ----------- LEGAL SERVICES 0.80% 10,325 Pre-Paid Legal Services, Inc. # 253,272 ----------- EDUCATIONAL SERVICES 2.12% 8,325 Education Management Corporation # 442,724 38,325 The Princeton Review, Inc. # 226,117 ----------- 668,841 ----------- ENGINEERING, ACCOUNTING, RESEARCH, MANAGEMENT AND RELATED SERVICES 2.21% 14,700 Paychex, Inc. 432,033 9,775 Kroll Inc. # 263,827 ----------- 695,860 ----------- Total Services 9,061,585 ----------- TOTAL COMMON STOCK (COST $27,110,632) 30,523,130 ----------- SHORT TERM INVESTMENTS 4.32% MONEY MARKET FUND 4.32% 1,360,816 Federated Prime Obligations Fund 1,360,816 ----------- TOTAL SHORT-TERM INVESTMENTS (COST $1,360,816) 1,360,816 ----------- TOTAL INVESTMENTS 101.15% (COST $28,471,448) 31,883,946 ----------- LIABILITIES, LESS OTHER ASSETS (1.15)% (363,100) ----------- NET ASSETS 100% $31,520,846 ----------- ----------- # Non-income producing security. See notes to financial statements. AssetMark Small/Mid Cap Value Fund PERFORMANCE DATA TOTAL RETURN BASED ON A $10,000 INVESTMENT AssetMark Small/Mid Russell 2500 Lipper Small-Cap Date Cap Value Fund Value Index Value Funds Index ---- -------------- ----------- ----------------- 6/29/2001 $10,000.00 $10,000.00 $10,000.00 9/30/2001 $8,840.00 $8,755.00 $8,560.00 12/31/2001 $10,330.00 $10,179.00 $10,148.00 3/31/2002 $10,990.00 $11,045.00 $10,959.00 6/30/2002 $10,150.00 $10,659.00 $10,510.00 9/30/2002 $8,500.00 $8,700.00 $8,530.00 12/31/2002 $8,960.00 $9,173.00 $9,010.00 3/31/2003 $8,510.00 $8,736.00 $8,491.00 6/30/2003 $10,130.00 $10,595.00 $10,428.00 This chart assumes an initial gross investment of $10,000 made on 6/29/01 (commencement of operations). Returns shown include the reinvestment of all dividends. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. In the absence of fee waivers and reimbursements, total return would be reduced. Past performance is not predictive of future performance. Investment return and principal value will fluctuate, so that your shares, when redeemed, may be worth more or less than the original cost. RUSSELL 2500 VALUE INDEX - An unmanaged index which measures the performance of those Russell 2500 Index companies with lower price-to-book ratios and lower forecasted growth values. The Russell 2500 Index is an unmanaged index which measures the performance of the 2,500 smallest companies in the Russell 3000 Index. The Russell 3000 Index is an unmanaged index which measures the performance of the 3,000 largest U.S. companies based on total market capitalization, which represents approximately 98% of the investable U.S. equity market. LIPPER SMALL-CAP VALUE FUNDS INDEX - An unmanaged index which measures the composite performance of the 30 largest "small-cap value" mutual funds, as categorized by Lipper Inc. AVERAGE ANNUAL TOTAL RETURN (FOR THE PERIODS ENDED JUNE 30, 2003) ----------------------------------------------------------------- ONE YEAR SINCE INCEPTION (6/29/01) -------- ------------------------- AssetMark Small/Mid Cap Value Fund -0.20% 0.65% Russell 2500 Value Index -0.60% 2.93% Lipper Small-Cap Value Funds Index -0.78% 2.12% AssetMark Small/Mid Cap Value Fund SCHEDULE OF INVESTMENTS June 30, 2003 NUMBER OF MARKET SHARES VALUE --------- ------ COMMON STOCK 95.28% MINING 1.75% OIL AND GAS EXTRACTION 1.75% 8,700 Forest Oil Corporation # $ 218,544 16,000 Pride International, Inc. # 301,120 ----------- 519,664 ----------- Total Mining 519,664 ----------- MANUFACTURING 26.28% FOOD AND KINDRED PRODUCTS 1.30% 4,100 Adolph Coors Company 200,818 6,850 McCormick & Company, Incorporated 186,320 ----------- 387,138 ----------- FURNITURE AND FIXTURES 2.17% 14,600 Herman Miller, Inc. 292,876 6,500 La-Z-Boy Incorporated 145,470 17,600 Steelcase Inc. 206,976 ----------- 645,322 ----------- PAPER AND ALLIED PRODUCTS 0.80% 12,900 Packaging Corp of America # 237,747 ----------- PRINTING, PUBLISHING AND ALLIED INDUSTRIES 3.28% 9,100 Belo Corp. 203,476 9,700 Harte-Hanks, Inc. 184,300 6,515 The McClatchy Company 375,394 8,200 Valassis Communications, Inc. # 210,904 ----------- 974,074 ----------- CHEMICALS AND ALLIED PRODUCTS 4.74% 6,900 The Clorox Company 294,285 23,400 The Dial Corporation 455,130 13,300 Georgia Gulf Corporation 263,340 8,500 International Flavors & Fragrances Inc. 271,405 2,900 The Valspar Corporation 122,438 ----------- 1,406,598 ----------- INDUSTRIAL AND COMMERCIAL MACHINERY AND COMPUTER EQUIPMENT 6.08% 7,625 The Black & Decker Corporation 331,306 10,225 IDEX Corporation 370,554 8,900 Kennametal Inc. 301,176 11,375 Pitney Bowes Inc. 436,914 13,300 The Stanley Works 367,080 ----------- 1,807,030 ----------- ELECTRONIC AND OTHER ELECTRICAL EQUIPMENT AND COMPONENTS, EXCEPT COMPUTER EQUIPMENT 3.47% 58,400 Agere Systems Inc. # 134,320 5,300 AMETEK, Inc. 194,245 17,600 Andrew Corporation # 164,384 7,700 Energizer Holdings, Inc. # 241,780 8,800 Fairchild Semiconductor International, Inc. # 112,552 7,500 Rockwell Collins, Inc. 184,725 ----------- 1,032,006 ----------- TRANSPORTATION EQUIPMENT 1.07% 15,200 Goodrich Corporation 319,200 ----------- MEASURING, ANALYZING AND CONTROLLING INSTRUMENTS; PHOTOGRAPHIC, MEDICAL AND OPTICAL GOODS; WATCHES AND CLOCKS 2.34% 10,900 Baxter International Inc. 283,400 2,800 C.R. Bard, Inc. 199,668 6,400 Invacare Corporation 211,200 ----------- 694,268 ----------- MISCELLANEOUS MANUFACTURING INDUSTRIES 1.03% 17,475 Hasbro, Inc. 305,638 ----------- Total Manufacturing 7,809,021 ----------- TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS AND SANITARY SERVICES 9.20% MOTOR FREIGHT TRANSPORTATION AND WAREHOUSING 0.76% 8,900 CNF Inc. 225,882 ----------- WATER TRANSPORTATION 0.93% 11,900 Royal Caribbean Cruises Ltd. 275,604 ----------- COMMUNICATIONS 2.84% 7,400 Anixter International Inc. # 173,382 8,255 Cablevision Systems New York Group # 171,374 9,300 CenturyTel, Inc. 324,105 18,000 Mediacom Communications Corporation # 175,680 ----------- 844,541 ----------- ELECTRIC, GAS AND SANITARY SERVICES 4.67% 6,200 Peoples Energy Corporation 265,918 19,100 PG&E Corporation # 403,965 6,600 PPL Corporation 283,800 22,600 Reliant Resources, Inc. # 138,538 10,200 Wisconsin Energy Corporation 295,800 ----------- 1,388,021 ----------- Total Transportation, Communications, Electric, Gas and Sanitary Services 2,734,048 ----------- WHOLESALE TRADE 3.89% WHOLESALE TRADE-DURABLE GOODS 3.29% 14,600 Apogent Technologies Inc. # 292,000 23,000 IKON Office Solutions, Inc. 204,700 14,200 Omnicare, Inc. 479,818 ----------- 976,518 ----------- WHOLESALE TRADE- NON-DURABLE GOODS 0.60% 8,700 Safeway Inc. # 178,002 ----------- Total Wholesale Trade 1,154,520 ----------- RETAIL TRADE 8.08% GENERAL MERCHANDISE STORES 1.21% 9,700 J.C. Penney Company, Inc. 163,445 5,325 The Neiman Marcus Group, Inc. # 194,895 ----------- 358,340 ----------- EATING AND DRINKING PLACES 3.75% 11,200 AFC Enterprises, Inc. # 183,344 14,400 ARAMARK Corporation # 322,848 3,800 Outback Steakhouse, Inc. 148,200 15,500 Yum! Brands, Inc # 458,180 ----------- 1,112,572 ----------- MISCELLANEOUS RETAIL 3.12% 7,200 Dollar Tree Stores, Inc. # 228,744 5,800 Jo-Ann Stores, Inc. # 146,740 15,600 Office Depot, Inc. # 226,356 26,900 Toys "R" Us, Inc. # 326,028 ----------- 927,868 ----------- Total Retail Trade 2,398,780 ----------- FINANCE, INSURANCE AND REAL ESTATE 23.70% DEPOSITORY INSTITUTIONS 4.14% 9,500 Hibernia Corporation 172,520 11,600 Northern Trust Corporation 482,560 13,600 North Fork Bancorporation, Inc. 463,216 2,800 TCF Financial Corporation 111,552 ----------- 1,229,848 ----------- SECURITY AND COMMODITY BROKERS, DEALERS, EXCHANGES AND SERVICES 3.33% 8,100 Franklin Resources, Inc. 316,467 5,700 Investment Technology Group, Inc. # 106,020 20,400 Janus Capital Group Inc. 334,560 6,175 T. Rowe Price Group Inc. 233,230 ----------- 990,277 ----------- INSURANCE CARRIERS 12.04% 18,000 Allmerica Financial Corporation # 323,820 4,300 Amabac Financial Group, Inc. 284,875 8,100 Everest Re Group, Ltd. 619,650 11,400 HCC Insurance Holdings, Inc. 337,098 10,050 Horace Mann Educators Corporation 162,107 1,335 Markel Corporation # 341,760 10,200 MBIA Inc. 497,250 9,800 Oxford Health Plans, Inc. # 411,894 8,700 The St. Paul Companies, Inc. 317,637 3,375 XL Capital Ltd. 280,125 ----------- 3,576,216 ----------- INSURANCE AGENTS, BROKERS AND SERVICES 1.40% 13,500 Willis Group Holdings Limited 415,125 ----------- HOLDING AND OTHER INVESTMENT OFFICES 2.79% 13,500 iStar Financial Inc. 492,750 8,825 The Rouse Company 336,232 ----------- 828,982 ----------- Total Finance, Insurance, and Real Estate 7,040,448 ----------- SERVICES 22.38% HOTELS, ROOMING HOUSES, CAMPS AND OTHER LODGING PLACES 1.71% 16,200 Extended Stay America, Inc. # 218,538 8,500 MGM MIRAGE # 290,530 ----------- 509,068 ----------- PERSONAL SERVICES 0.75% 5,150 H&R Block, Inc. 222,738 ----------- BUSINESS SERVICES 13.08% 5,800 ADVO, Inc. # 257,520 9,000 Amdocs Limited # 216,000 6,900 Brady Corporation 230,115 15,775 Cendant Corporation # 288,998 6,775 Certegy Inc. # 188,006 9,675 D&B Corporation # 397,642 12,550 Equifax Inc. 326,300 457 Grey Global Group Inc. 353,284 25,300 IMS Health Incorporated 455,147 24,410 The Interpublic Group of Companies, Inc. 326,606 6,900 Manpower Inc. 255,921 15,300 Sotheby's Holdings, Inc. # 113,832 12,350 SunGard Data Systems Inc. # 319,988 7,000 Viad Corp. 156,730 ----------- 3,886,089 ----------- MOTION PICTURES 0.61% 14,500 Metro-Goldwyn-Mayer Inc. # 180,090 ----------- AMUSEMENT AND RECREATION SERVICES 1.23% 5,700 Alliance Gaming Corporation # 107,787 6,500 International Speedway Corporation 256,815 ----------- 364,602 ----------- HEALTH SERVICES 1.91% 8,900 Caremark Rx, Inc. # 228,552 4,000 Edwards Lifesciences Corporation # 128,560 9,900 LifePoint Hospitals, Inc. # 208,989 ----------- 566,101 ----------- EDUCATIONAL SERVICES 0.18% 2,250 DeVry, Inc. # 52,402 ----------- ENGINEERING, ACCOUNTING, RESEARCH, MANAGEMENT AND RELATED SERVICES 2.91% 20,700 Accenture Ltd. # 374,463 27,300 BearingPoint, Inc. # 263,445 21,100 The ServiceMaster Company 225,770 ----------- 863,678 ----------- Total Service 6,644,768 ----------- TOTAL COMMON STOCK (COST $25,131,788) 28,301,249 ----------- SHORT TERM INVESTMENTS 6.63% MONEY MARKET FUND 6.63% 1,968,735 Federated Prime Obligations Fund 1,968,735 ----------- TOTAL SHORT-TERM INVESTMENTS (COST $1,968,735) 1,968,735 ----------- TOTAL INVESTMENTS 101.91% (COST $27,100,523) 30,269,984 ----------- LIABILITIES, LESS OTHER ASSETS (1.91)% (566,614) ----------- NET ASSETS 100% $29,703,370 ----------- ----------- # Non-income producing security. See notes to financial statements. AssetMark International Equity Fund PERFORMANCE DATA TOTAL RETURN BASED ON A $10,000 INVESTMENT Assetmark Morgan Stanley Lipper International Capital International International Date Equity Fund EAFE Index Funds Index ---- ----------- --------------------- ----------- 6/29/2001 $10,000.00 $10,000.00 $10,000.00 9/30/2001 $8,630.00 $8,605.00 $8,504.00 12/31/2001 $9,460.00 $9,206.00 $9,222.00 3/31/2002 $9,331.00 $9,258.00 $9,448.00 6/30/2002 $8,960.00 $9,078.00 $9,269.00 9/30/2002 $7,240.00 $7,291.00 $7,451.00 12/31/2002 $7,588.00 $7,763.00 $7,946.00 3/31/2003 $6,966.00 $7,132.00 $7,247.00 6/30/2003 $8,250.00 $8,528.00 $8,676.00 This chart assumes an initial gross investment of $10,000 made on 6/29/01 (commencement of operations). Returns shown include the reinvestment of all dividends. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. In the absence of fee waivers and reimbursements, total return would be reduced. Past performance is not predictive of future performance. Investment return and principal value will fluctuate, so that your shares, when redeemed, may be worth more or less than the original cost. MORGAN STANLEY CAPITAL INTERNATIONAL EAFE INDEX - An unmanaged market- capitalization-weighted index composed of companies representative of the market structure of 20 Developed Market countries in Europe, Australia, Asia and the Far East. LIPPER INTERNATIONAL FUNDS INDEX - An unmanaged index which measures the composite performance of the 30 largest "international" mutual funds, as categorized by Lipper Inc. AVERAGE ANNUAL TOTAL RETURN (FOR THE PERIODS ENDED JUNE 30, 2003) ----------------------------------------------------------------- ONE YEAR SINCE INCEPTION (6/29/01) -------- ------------------------- AssetMark International Equity Fund -7.92% -9.16% Morgan Stanley Capital International EAFE Index -6.06% -7.65% Lipper International Funds Index -6.40% -6.86% AssetMark International Equity Fund SCHEDULE OF INVESTMENTS June 30, 2003 NUMBER OF MARKET SHARES VALUE --------- ------ COMMON STOCK 95.42%* AUSTRALIA 3.32% 37,800 Boral Limited $ 513,101 266,200 Coca-Cola Amatil Limited 2,038,799 ----------- 2,551,900 ----------- BRAZIL 1.84% 13,600 Banco Itau Holding Financeira SA 461,040 48,500 Petroleo Brasileiro SA - Petrobras 958,360 ----------- 1,419,400 ----------- BRITAIN 19.92% 42,636 Amvescap PLC 596,051 15,200 AstraZeneca PLC 619,704 30,000 BAE SYSTEMS PLC 282,174 17,100 BOC Group PLC 448,704 23,700 BP PLC 995,874 33,900 Barclays PLC 1,014,288 53,000 Boots Group PLC 1,134,322 21,000 Cadbury Schweppes PLC 507,780 67,500 Compass Group PLC 363,947 19,500 Diageo PLC 853,320 20,100 Galen Holdings PLC 703,500 13,100 HSBC Holdings PLC 774,341 25,700 HBOS PLC 998,085 41,700 Lloyds TSB Group PLC 1,209,717 136,600 Pearson PLC 1,311,360 16,300 Rio Tinto PLC 1,247,765 115,300 Vodafone Group PLC 2,265,645 ----------- 15,326,577 ----------- CANADA 2.40% 8,300 Alcan Inc. 259,707 16,000 Canadian National Railway Company 772,160 14,000 Inco Limited # 295,960 18,500 Manulife Financial Corporation 521,885 ----------- 1,849,712 ----------- DENMARK 1.21% 47,600 Danske Bank A/S 926,972 ----------- FINLAND 3.13% 102,008 Nokia Oyj 1,675,991 50,200 UPM-Kymmene Oyj 730,410 ----------- 2,406,401 ----------- FRANCE 13.86% 71,710 Alcatel SA 641,805 37,500 Axa 585,375 61,800 BNP Paribas SA 1,570,140 48,100 France Telecom SA 1,185,665 45,800 Groupe Danone 1,270,950 58,750 Pernod-Ricard SA 1,310,495 17,145 PSA Peugeot Citroen 832,806 34,400 Sanofi-Synthelabo SA 1,002,760 55,000 Societe Generale 697,268 20,594 Total SA 1,561,025 ----------- 10,658,289 ----------- GERMANY 4.42% 13,000 Continental AG 272,890 61,900 Deutsche Telekom AG 940,880 5,900 Puma AG Rudolf Dassler Sport 580,630 26,900 SAP AG 786,018 16,700 Siemens AG 815,795 ----------- 3,396,213 ----------- HONG KONG 2.06% 12,000 CNOOC Limited 356,400 67,000 Hang Seng Bank Limited 708,820 119,000 Swire Pacific Limited 520,363 ----------- 1,585,583 ----------- INDIA 1.64% 25,000 Dr. Reddy's Laboratories Limited 582,750 12,700 Infosys Technologies Limited 681,355 ----------- 1,264,105 ----------- IRELAND 2.20% 29,200 CRH PLC 460,659 27,500 Ryanair Holdings PLC # 1,235,300 ----------- 1,695,959 ----------- ISRAEL 0.53% 7,200 Teva Pharmaceutical Industries Ltd. 409,896 ----------- ITALY 1.62% 9,100 Eni SPA 691,964 40,000 Luxottica Group SPA 556,000 ----------- 1,247,964 ----------- JAPAN 19.16% 39,268 Canon Inc. 1,792,584 25,900 Fuji Photo Film Co., Ltd. 746,179 38,800 Honda Motor Co., Ltd. 739,140 2,200 Kao Corporation 409,494 15,600 Konica Corporation 1,775,990 100,000 Matsushita Electric Industrial Co., Ltd. 1,005,000 108,200 Mitsubishi Corporation 1,501,243 48,200 NTT DoCoMo, Inc. 1,059,436 89,600 Nintendo Co., Ltd. 804,966 45,600 Nippon Telegraph And Telephone Corporation (NTT) 902,880 132,900 Nissan Motor Co., Ltd. 2,518,455 2,000 Nitto Denko Corporation 654,591 33,200 Seven-Eleven Japan Co., Ltd. 826,717 ----------- 14,736,675 ----------- MEXICO 0.41% 17,000 America Movil SA de CV 318,750 ----------- NETHERLANDS 4.05% 76,700 Aegon NV 770,068 20,000 Akzo Nobel NV 533,000 63,200 ING Groep NV 1,107,896 15,039 Royal Dutch Petroleum Company 701,118 ----------- 3,112,082 ----------- PERU 0.37% 9,400 Compania de Minas Buenaventura SAU 282,846 ----------- SINGAPORE 1.25% 41,000 DBS Group Holdings Limited 959,216 ----------- SOUTH AFRICA 0.80% 66,000 ABSA Group Limited 617,641 ----------- SOUTH KOREA 0.66% 19,300 POSCO 505,467 ----------- SWEDEN 5.16% 50,000 AB SKF 1,459,500 37,400 Atlas Copco AB 946,104 21,000 Electrolux AB 834,540 21,600 Sandvik AB 565,300 8,100 TeliaSonera AB 167,176 ----------- 3,972,620 ----------- SWITZERLAND 3.80% 32,100 Novartis AG 1,277,901 10,000 Roche Holding AG 784,399 15,500 Swiss Re 858,798 ----------- 2,921,098 ----------- TAIWAN 0.77% 58,600 Taiwan Semiconductor Manufacturing Company Ltd. 590,688 ----------- THAILAND 0.83% 348,000 Shin Corporation Public Company Limited 635,726 ----------- TOTAL COMMON STOCK (COST $67,646,154) 73,391,780 ----------- SHORT TERM INVESTMENTS 4.41% MONEY MARKET FUND 4.41% 3,391,776 Federated Prime Obligations Fund 3,391,776 ----------- TOTAL SHORT-TERM INVESTMENTS (COST $3,391,776) 3,391,776 ----------- TOTAL INVESTMENTS 99.83% (COST $71,037,930) 76,783,556 ----------- OTHER ASSETS, LESS LIABILITIES 0.17% 131,840 ----------- NET ASSETS 100% $76,915,396 ----------- ----------- * All common stocks listed are American Depository Receipts (ADRs). # Non-income producing security. See notes to financial statements. AssetMark Real Estate Securities Fund PERFORMANCE DATA TOTAL RETURN BASED ON A $10,000 INVESTMENT AssetMark Lipper Real Estate Wilshire Real Estate Date Securities Fund REIT Index Funds Index ---- --------------- ---------- ----------- 6/29/2001 $10,000.00 $10,000.00 $10,000.00 9/30/2001 $9,960.00 $9,760.00 $9,644.00 12/31/2001 $10,250.00 $10,238.00 $10,134.00 3/31/2002 $10,927.00 $11,095.00 $10,975.00 6/30/2002 $11,460.00 $11,606.00 $11,466.00 9/30/2002 $10,600.00 $10,552.00 $10,446.00 12/31/2002 $10,696.00 $10,606.00 $10,503.00 3/31/2003 $10,888.00 $10,739.00 $10,625.00 6/30/2003 $12,018.00 $12,039.00 $12,020.00 This chart assumes an initial gross investment of $10,000 made on 6/29/01 (commencement of operations). Returns shown include the reinvestment of all dividends. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. In the absence of fee waivers and reimbursements, total return would be reduced. Past performance is not predictive of future performance. Investment return and principal value will fluctuate, so that your shares, when redeemed, may be worth more or less than the original cost. WILSHIRE REIT INDEX - An unmanaged index considered representative of U.S. publicly traded Real Estate Investment Trusts. LIPPER REAL ESTATE FUNDS INDEX - An unmanaged index which measures the composite performance of the 30 largest "real estate" mutual funds, as categorized by Lipper Inc. AVERAGE ANNUAL TOTAL RETURN (FOR THE PERIODS ENDED JUNE 30, 2003) ----------------------------------------------------------------- ONE YEAR SINCE INCEPTION (6/29/01) -------- ------------------------- AssetMark Real Estate Securities Fund 4.87% 9.61% Wilshire REIT Index 3.73% 9.72% Lipper Real Estate Funds Index 4.83% 9.64% AssetMark Real Estate Securities Fund SCHEDULE OF INVESTMENTS June 30, 2003 NUMBER OF MARKET SHARES VALUE --------- ------ REAL ESTATE INVESTMENT TRUSTS 97.56% COMMON STOCK 89.32% APARTMENTS 23.75% 14,280 Apartment Investment & Management Company $ 494,088 31,815 Archstone-Smith Trust 763,560 16,880 Avalonbay Communities, Inc. 719,763 7,520 BRE Properties, Inc. 249,664 12,810 Camden Property Trust 447,710 50,940 Equity Residential 1,321,893 9,730 Essex Property Trust, Inc. 557,042 4,360 Gables Residential Trust 131,803 17,660 Home Properties of New York, Inc. 622,338 52,960 United Dominion Realty Trust, Inc. 911,971 ----------- 6,219,832 ----------- DIVERSIFIED 9.01% 5,420 Colonial Properties Trust 190,730 16,920 Liberty Property Trust 585,432 33,450 Vornado Realty Trust 1,458,420 4,610 Washington Real Estate Investment Trust 125,392 ----------- 2,359,974 ----------- OFFICE PROPERTY 16.83% 6,760 Alexandria Real Estate Equities, Inc. 304,200 3,600 American Financial Realty Trust 53,676 17,390 Arden Realty, Inc. 451,271 22,180 Boston Properties, Inc. 971,484 5,260 Brandywine Realty Trust 129,501 16,300 CarrAmerica Realty Corporation 453,303 4,620 Cousins Properties, Inc. 128,898 13,630 Crescent Real Estate Equities Company 226,394 15,150 Equity Office Properties Trust 409,201 5,400 Glenborough Realty Trust Incorporated 103,410 2,340 Kilroy Realty Corporation 64,350 7,280 Mack-Cali Realty Corporation 264,846 7,000 Maguire Properties, Inc. # 134,750 8,700 Prentiss Properties Trust 260,913 3,180 Reckson Associates Realty Corporation 66,335 11,040 SL Green Realty Corp. 385,186 ----------- 4,407,718 ----------- REGIONAL MALLS 18.09% 5,740 CBL & Associates Properties, Inc. 246,820 13,240 General Growth Properties, Inc. 826,706 29,140 The Macerich Company 1,023,688 18,590 The Rouse Company 708,279 49,510 Simon Property Group, Inc. 1,932,375 ----------- 4,737,868 ----------- SHOPPING CENTERS 11.05% 7,850 Developers Diversified Realty Corporation 223,254 15,490 Federal Realty Investment Trust 495,680 6,870 Kimco Realty Corporation 260,373 9,130 New Plan Excel Realty Trust 194,926 22,710 Pan Pacific Retail Properties, Inc. 893,638 15,020 Regency Centers Corporation 525,400 7,160 Weingarten Realty Investors 300,004 ----------- 2,893,275 ----------- WAREHOUSE/INDUSTRIAL 10.59% 29,300 AMB Property Corporation 825,381 4,210 CenterPoint Properties Trust 257,863 11,520 Duke Realty Corporation 317,376 46,570 ProLogis 1,271,361 2,850 PS Business Parks, Inc. 100,605 ----------- 2,772,586 ----------- TOTAL COMMON STOCK (COST $21,186,257) 23,391,253 ----------- PREFERRED STOCK 8.24% DIVERSIFIED 1.27% 12,900 Lexington Corporate Properties Trust, 8.05% 332,240 ----------- OFFICE PROPERTY 4.13% 39,200 Equity Office Properties Trust, 7.75% 1,082,116 ----------- REGIONAL MALLS 0.75% 7,100 The Mills Corp., 9.00% 195,250 ----------- SHOPPING CENTERS 2.09% 11,500 Developers Diversified Realty, 8.00% 300,725 9,300 New Plan Excel Realty Trust, 7.625% 246,915 ----------- 547,640 ----------- TOTAL PREFERRED STOCK (COST $2,021,305) 2,157,246 ----------- SHORT TERM INVESTMENTS 3.83% MONEY MARKET FUND 3.83% 1,004,566 Federated Prime Obligations Fund 1,004,566 ----------- TOTAL SHORT-TERM INVESTMENTS (COST $1,004,566) 1,004,566 ----------- TOTAL INVESTMENTS 101.39% (COST $24,212,128) 26,553,065 ----------- LIABILITIES, LESS OTHER ASSETS (1.39)% (364,457) ----------- NET ASSETS 100% $26,188,608 ----------- ----------- # Non-income producing security. See notes to financial statements. AssetMark Tax-Exempt Fixed Income Fund PERFORMANCE DATA AssetMark Lehman Lipper General Tax-Exempt Fixed Brothers Municipal Municipal Debt Date Income Fund Bond Index Funds Index ---- ----------- ---------- ----------- 6/29/2001 $10,000.00 $10,000.00 $10,000.00 9/30/2001 $10,260.00 $10,281.00 $10,256.00 12/31/2001 $10,135.00 $10,218.00 $10,148.00 3/31/2002 $10,205.00 $10,314.00 $10,234.00 6/30/2002 $10,647.00 $10,692.00 $10,585.00 9/30/2002 $11,132.00 $11,200.00 $11,056.00 12/31/2002 $11,100.00 $11,200.00 $11,023.00 3/31/2003 $11,199.00 $11,334.00 $11,103.00 6/30/2003 $11,475.00 $11,627.00 $11,410.00 This chart assumes an initial gross investment of $10,000 made on 6/29/01 (commencement of operations). Returns shown include the reinvestment of all dividends. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. In the absence of fee waivers and reimbursements, total return would be reduced. Past performance is not predictive of future performance. Investment return and principal value will fluctuate, so that your shares, when redeemed, may be worth more or less than the original cost. LEHMAN BROTHERS MUNICIPAL BOND INDEX - An unmanaged index which measures the performance of investment-grade, tax-exempt and fixed-rate bonds with long-term maturities (greater than two years) selected from issues larger than $50 million. LIPPER GENERAL MUNICIPAL DEBT FUNDS INDEX - An unmanaged index which measures the composite performance of the 30 largest "general municipal debt" mutual funds, as categorized by Lipper Inc. AVERAGE ANNUAL TOTAL RETURN (FOR THE PERIODS ENDED JUNE 30, 2003) ----------------------------------------------------------------- ONE YEAR SINCE INCEPTION (6/29/01) -------- ------------------------- AssetMark Tax-Exempt Fixed Income Fund 7.78% 7.11% Lehman Brothers Municipal Bond Index 8.74% 7.83% Lipper General Municipal Debt Funds Index 7.80% 6.82% AssetMark Tax-Exempt Fixed Income Fund SCHEDULE OF INVESTMENTS June 30, 2003 PRINCIPAL MARKET AMOUNT VALUE --------- ------ MUNICIPAL BONDS 92.79% ALABAMA 1.38% $125,000 Alabama State Public School & College Authority, 5.00%, 02-01-2012 $ 140,004 195,000 Birmingham, Alabama, 5.00%, 04-01-2008 218,997 ----------- 359,001 ----------- ARIZONA 4.05% 135,000 Maricopa County Arizona School District No. 3 Tempe Elementary, 5.00%, 07-01-2012 154,202 500,000 Maricopa County Arizona Unified School District No. 48 Scottsdale, 4.75%, 07-01-2010 561,205 300,000 Navajo County Arizona Unified School District No. 32 Blue Ridge, 5.00%, 07-01-2014 342,543 ----------- 1,057,950 ----------- CALIFORNIA 7.12% 750,000 California State, 5.25%, 02-01-2014 827,760 100,000 Fallbrook California High School District San Diego County, 5.375%, 09-01-2014 117,297 350,000 Los Angeles County California Metropolitan Transportation Authority Sales Tax Revenue, 5.00%, 07-01-2014 395,217 500,000 Los Angeles California School District, 4.00%, 07-01-2014 518,365 ----------- 1,858,639 ----------- CONNECTICUT 1.87% 425,000 Connecticut State, 5.25%, 06-15-2009 487,972 ----------- DISTRICT OF COLUMBIA 1.32% 100,000 District of Columbia, 5.50%, 06-01-2007 112,740 200,000 District of Columbia, 5.50%, 06-01-2009 231,110 ----------- 343,850 ----------- FLORIDA 1.29% 100,000 Dade County Florida Water & Sewer Systems, 6.25%, 10-01-2007 117,253 100,000 Jacksonville Florida Excise Taxes, 5.65%, 10-01-2005 109,496 100,000 Mary Esther Florida Water & Sewer, 4.95%, 01-01-2007 110,300 ----------- 337,049 ----------- GEORGIA 2.20% 500,000 Atlanta Georgia Water & Wastewater, 5.00%, 11-01-2038 574,645 ----------- HAWAII 0.45% 100,000 Honolulu Hawaii City & County, 6.00%, 01-01-2009 118,428 ----------- IOWA 1.94% 480,000 Polk County Iowa, 4.00%, 06-01-2012 506,640 ----------- ILLINOIS 10.45% 305,000 Chicago Illinois, 5.50%, 01-01-2015 359,470 750,000 Chicago Illinois Neighborhoods, 5.00%, 01-01-2010 844,042 500,000 Chicago Illinois Wastewater Transmission, 5.50%, 01-01-2010 577,410 100,000 Chicago Illinois Wastewater Transmission, 5.375%, 01-01-2013 116,264 100,000 Chicago Illinois Metropolitan Water Reclamation District Greater Chicago, 6.05%, 12-01-2009 120,250 100,000 Chicago Illinois Metropolitan Water Reclamation District Greater Chicago, 5.50%, 12-01-2012 117,893 100,000 Du Page & Cook Counties Illinois, 4.375%, 01-01-2009 109,140 100,000 Illinois State, 5.25%, 08-01-2012 114,335 100,000 Illinois State Sales Tax, 5.375%, 06-15-2007 112,675 220,000 Illinois State Sales Tax, 5.50%, 06-15-2009 254,826 ----------- 2,726,305 ----------- INDIANA 4.34% 200,000 Purdue University Indiana, 4.25%, 07-01-2008 218,104 500,000 Purdue University Indiana, 5.25%, 07-01-2008 568,715 300,000 Sunman Dearborn Indiana Intermediate School Building Corp, 5.375%, 07-15-2012 346,689 ----------- 1,133,508 ----------- MASSACHUSETTS 0.99% 95,000 Massachusetts Bay Transportation Authority, 5.50%, 03-01-2012 110,941 120,000 Massachusetts State Water Resources Authority, 6.25%, 12-01-2011 148,094 ----------- 259,035 ----------- MICHIGAN 0.67% 150,000 Dundee Michigan Community School District, 5.375%, 05-01-2010 173,444 ----------- MINNESOTA 2.99% 400,000 Osseo Minnesota Independent School District 279, 5.00%, 02-01-2013 451,388 295,000 Prior Lake Minnesota Independent School District No 719, 4.75%, 02-01-2010 328,583 ----------- 779,971 ----------- MISSOURI 1.30% 300,000 Kansas City Missouri Municipal Assistance Corp, 5.00%, 03-01-2012 338,337 ----------- MARYLAND 0.34% 75,000 Maryland State, 5.50%, 03-01-2013 89,372 ----------- NEBRASKA 0.44% 100,000 Omaha Nebraska Special Obligations, 5.375%, 02-01-2013 115,819 ----------- NEVADA 0.59% 135,000 Clark County Nevada School District, 6.00%, 06-15-2007 153,842 ----------- NEW JERSEY 4.69% 425,000 Gateway New Jersey Housing Development Corporation, 10.50%, 08-01-2025 425,578 700,000 New Jersey State Turnpike Authority, 6.75%, 01-01-2009 799,064 ----------- 1,224,642 ----------- NEW YORK 9.55% 560,000 Long Island Power Authority New York Electric System, 4.00%, 12-01-2010 575,546 300,000 Metropolitan Transportation Authority New York Service Contract, 5.25%, 07-01-2007 334,683 100,000 Metropolitan Transportation Authority New York Dedicated Tax Fund, 5.25%, 04-01-2009 112,865 100,000 New York, New York, 5.25%, 08-01-2011 113,954 500,000 New York City Transit Authority, Metropolitan Transportation Authority Triborough, 5.625%, 01-01-2012 573,395 500,000 New York State Dormitory Authority, 5.25%, 11-15-2023 557,305 200,000 New York State Tollway Authority, 5.25%, 01-01-2010 224,396 ----------- 2,492,144 ----------- NORTH CAROLINA 2.61% 500,000 North Carolina Municipal Power Agency No 1 Catawba Electric, 5.25%, 01-01-2009 569,355 100,000 North Carolina State, 4.60%, 04-01-2008 111,183 ----------- 680,538 ----------- OHIO 0.43% 100,000 Bowling Green State University of Ohio, 5.00%, 06-01-2008 113,114 ----------- OREGON 0.68% 175,000 Oregon State Housing & Community Services Department, 5.40%, 07-01-2005 178,048 ----------- PENNSYLVANIA 3.53% 100,000 Pennsylvania Housing Finance Agency, 4.95%, 10-01-2004 102,654 125,000 Pennsylvania State, 5.00%, 02-01-2009 141,381 500,000 Pennsylvania State, 5.00%, 01-01-2014 564,450 100,000 Philadelphia Pennsylvania Gas Works, 5.00%, 08-01-2010 113,279 ----------- 921,764 ----------- TENNESSEE 2.43% 250,000 Knoxville Tennessee Water, 5.00%, 03-01-2009 282,370 300,000 Memphis Tennessee, 5.50%, 11-01-2010 351,579 ----------- 633,949 ----------- TEXAS 14.76% 100,000 Austin Texas, 5.25%, 09-01-2007 112,784 515,000 Denton Texas Utility System Revenue, 5.25%, 12-01-2013 589,830 100,000 Flower Mound Texas Waterworks & Sewer, 5.375%, 09-01-2006 111,622 145,000 Frisco Texas, 5.875%, 02-15-2010 170,510 165,000 Frisco Texas, 5.00%, 02-15-2012 184,812 750,000 Harris County Texas, 5.25%, 10-01-2013 852,225 150,000 Mansfield Texas, 5.50%, 02-15-2008 170,764 370,000 Marble Falls Texas Independent School District, 5.00%, 08-15-2015 418,933 80,000 San Antonio Texas Electric & Gas Pre-Refunded - 2002, 5.50%, 02-01-2013 90,842 70,000 San Antonio Texas Electric & Gas Unrefunded Balance - 2002, 5.50%, 02-01-2013 78,630 200,000 Socorro Texas Independent School District, 5.375%, 08-15-2013 228,720 125,000 Spring Texas Independent School District, 5.875%, 08-15-2010 148,754 400,000 Texas State Public Finance Authority, 5.50%, 10-01-2009 465,944 100,000 Texas State University Systems, 5.25%, 03-15-2010 114,016 100,000 University of Texas, 5.25%, 08-15-2008 113,798 ----------- 3,852,184 ----------- UTAH 0.44% 100,000 Jordan Utah School District, 5.125%, 06-15-2008 113,495 ----------- VIRGINIA 2.10% 100,000 Norfolk Virginia, 5.00%, 01-01-2009 113,034 400,000 Virginia State Housing Development Authority, 4.85%, 07-01-2009 435,948 ----------- 548,982 ----------- WASHINGTON 5.18% 100,000 King County Washington, 5.50%, 12-01-2010 116,861 100,000 Seattle Washington, 5.00%, 08-01-2012 112,018 200,000 Seattle Washington, 5.00%, 07-01-2013 223,960 100,000 Snohomish County Washington, 5.00%, 12-01-2006 110,820 700,000 Washington State Motor Vehicle Fuel Tax, 5.00%, 01-01-2010 787,332 ----------- 1,350,991 ----------- WEST VIRGINIA 1.24% 300,000 West Virginia Economic Development, 4.00%, 06-01-2007 323,400 ----------- WISCONSIN 1.42% 75,000 Douglas County Wisconsin, 5.50%, 02-01-2014 86,209 150,000 Wisconsin State, 5.00%, 05-01-2008 168,183 100,000 Wisconsin State, 5.50%, 05-01-2009 115,468 ----------- 369,860 ----------- TOTAL MUNICIPAL BONDS (COST $23,028,252) 24,216,917 ----------- SHORT TERM INVESTMENTS 4.60% IOWA 0.77% 100,000 Iowa Higher Education Loan Authority, 1.00%, 11-01-2032 100,000 100,000 Iowa Finance Authority, 1.05%, 06-01-2027 100,000 ----------- 200,000 ----------- NEBRASKA 0.77% 200,000 Nebraska Educational Finance Authority, 1.00%, 08-01-2031 200,000 ----------- NEW YORK 1.92% 500,000 New York, New York, 1.00%, 08-01-2021 500,000 ----------- MICHIGAN 0.38% 100,000 Northern Michigan University, 1.05%, 06-01-2031 100,000 ----------- SOUTH DAKOTA 0.38% 100,000 South Dakota State Health & Educational Facilities Authority, 1.00%, 09-01-2027 100,000 ----------- WISCONSIN 0.38% 100,000 Wisconsin State Health & Educational Facilities Authority, 1.05%, 12-01-2029 100,000 ----------- TOTAL SHORT-TERM INVESTMENTS (COST $1,200,000) 1,200,000 ----------- NUMBER OF SHARES --------- MONEY MARKET FUND 0.07% 19,344 First American Tax Free Obligations Fund 19,344 ----------- TOTAL MONEY MARKET FUNDS (COST $19,344) 19,344 ----------- TOTAL INVESTMENTS 97.44% (COST $24,247,596) 25,436,261 ----------- OTHER ASSETS, LESS LIABILITIES 2.56% 663,839 ----------- NET ASSETS 100% $26,100,100 ----------- ----------- See notes to financial statements. AssetMark Core Plus Fixed Income Fund PERFORMANCE DATA TOTAL RETURN BASED ON A $10,000 INVESTMENT AssetMark Core Lehman Lipper Plus Fixed Brothers Aggregate General Bond Date Income Fund Bond Index Funds Index ---- ----------- ---------- ----------- 6/29/2001 $10,000.00 $10,000.00 $10,000.00 9/30/2001 $10,347.00 $10,461.00 $10,243.00 12/31/2001 $10,342.00 $10,466.00 $10,259.00 3/31/2002 $10,383.00 $10,476.00 $10,254.00 6/30/2002 $10,603.00 $10,863.00 $10,470.00 9/30/2002 $10,887.00 $11,360.00 $10,698.00 12/31/2002 $11,140.00 $11,539.00 $10,885.00 3/31/2003 $11,354.00 $11,699.00 $11,020.00 6/30/2003 $11,713.00 $11,991.00 $11,404.00 This chart assumes an initial gross investment of $10,000 made on 6/29/01 (commencement of operations). Returns shown include the reinvestment of all dividends. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. In the absence of fee waivers and reimbursements, total return would be reduced. Past performance is not predictive of future performance. Investment return and principal value will fluctuate, so that your shares, when redeemed, may be worth more or less than the original cost. LEHMAN BROTHERS AGGREGATE BOND INDEX - An unmanaged index which measures the performance of securities from the Lehman Brothers Government/Corporate Bond Index, Mortgage-Backed Securities Index and the Asset-Backed Securities Index. The Lehman Brothers Aggregate Bond Index is a broad representation of the investment-grade fixed-income market in the U.S. and includes U.S. Government and corporate debt securities, mortgage- and asset-backed securities and international U.S. dollar-denominated bonds. All securities contained in the Lehman Brothers Aggregate Bond Index have a minimum term to maturity of one year. LIPPER GENERAL BOND FUNDS INDEX - An unmanaged index which measures the composite performance of the 10 largest "general bond" mutual funds, as categorized by Lipper Inc. AVERAGE ANNUAL TOTAL RETURN (FOR THE PERIODS ENDED JUNE 30, 2003) ----------------------------------------------------------------- ONE YEAR SINCE INCEPTION (6/29/01) -------- ------------------------- AssetMark Core Plus Fixed Income Fund 10.47% 8.21% Lehman Brothers Aggregate Bond Index 10.40% 9.51% Lipper General Bond Funds Index 8.92% 6.79% AssetMark Core Plus Fixed Income Fund SCHEDULE OF INVESTMENTS June 30, 2003 NUMBER OF MARKET SHARES VALUE --------- ------ INVESTMENT COMPANIES 99.19% 1,593,553 BlackRock Core Bond Total Return Portfolio $ 16,190,499 202,751 FFTW International Portfolio 1,786,237 1,417,913 PIMCO Total Return Fund II 15,001,517 170,192 Salomon Brothers Institutional Emerging Markets Debt Fund 1,288,356 60,185 Salomon Brothers Institutional High Yield Bond Fund 415,275 602,662 T. Rowe Price High Yield Fund 4,098,104 575,816 T. Rowe Price High Yield Fund - Advisor Class 3,909,794 4,452,823 Vanguard Total Bond Market Index Fund 46,843,699 1,424,085 Western Asset Core Portfolio 16,775,724 304,097 Western Asset High Yield Portfolio 3,077,460 ------------ Total Investment Companies 109,386,665 ------------ TOTAL INVESTMENTS 99.19% (COST $105,321,016) 109,386,665 ------------ OTHER ASSETS, LESS LIABILITIES 0.81% 893,367 ------------ NET ASSETS 100% $110,280,032 ------------ ------------ See notes to financial statements. AssetMark Funds STATEMENTS OF ASSETS & LIABILITIES June 30, 2003 LARGE CAP LARGE CAP SMALL/MID CAP SMALL/MID CAP GROWTH FUND VALUE FUND GROWTH FUND VALUE FUND ----------- ---------- ----------- ---------- ASSETS: Investments, at value (cost $110,718,033, $113,351,550, $28,471,448 and $27,100,523, respectively) $117,020,384 $119,046,762 $31,883,946 $30,269,984 Cash 180,440 -- -- 1,620 Receivable for investment securities sold -- -- 95,147 137,880 Income receivable 49,376 169,197 3,798 24,868 Receivable for fund shares sold 1,400,121 1,305,528 343,815 311,955 Other assets 13,656 13,532 9,566 8,756 ------------ ------------ ----------- ----------- Total Assets 118,663,977 120,535,019 32,336,272 30,755,063 ------------ ------------ ----------- ----------- LIABILITIES: Payable to Investment Advisor 80,127 81,179 21,956 13,254 Payable for investment securities purchased 54,567 2,443,342 742,628 986,144 Payable for fund shares redeemed 6,683 7,049 2,059 2,440 Other accrued expenses 159,274 156,202 48,783 49,855 ------------ ------------ ----------- ----------- Total Liabilities 300,651 2,687,772 815,426 1,051,693 ------------ ------------ ----------- ----------- NET ASSETS $118,363,326 $117,847,247 $31,520,846 $29,703,370 ------------ ------------ ----------- ----------- ------------ ------------ ----------- ----------- NET ASSETS CONSIST OF: Capital stock 120,397,404 117,187,138 31,746,827 28,062,861 Unrealized appreciation on investments 6,302,351 5,695,212 3,412,498 3,169,461 Accumulated undistributed net investment income -- 212,885 -- -- Accumulated undistributed net realized loss (8,336,429) (5,247,988) (3,638,479) (1,528,952) ------------ ------------ ----------- ----------- Total Net Assets $118,363,326 $117,847,247 $31,520,846 $29,703,370 ------------ ------------ ----------- ----------- ------------ ------------ ----------- ----------- Shares outstanding (unlimited shares of no par value authorized) 15,598,820 13,418,800 4,125,548 2,931,155 Net asset value, offering and redemption price per share $ 7.59 $ 8.78 $ 7.64 $ 10.13 ------------ ------------ ----------- ----------- ------------ ------------ ----------- -----------
See notes to financial statements. INTERNATIONAL REAL ESTATE TAX-EXEMPT CORE PLUS EQUITY SECURITIES FIXED INCOME FIXED INCOME FUND FUND FUND FUND ------------- ----------- ------------ ------------ ASSETS: Investments, at value (cost $71,037,930, $24,212,128, $24,247,596 and $105,321,016, respectively) $76,783,556 $26,553,065 $25,436,261 $109,386,665 Cash 20,561 -- -- -- Income receivable 208,120 122,032 370,878 373,919 Receivable for fund shares sold 663,895 287,020 395,178 1,062,408 Other assets 12,840 9,619 8,188 14,892 ----------- ----------- ----------- ------------ Total Assets 77,688,972 26,971,736 26,210,505 110,837,884 ----------- ----------- ----------- ------------ LIABILITIES: Payable to Investment Advisor 74,106 14,981 12,876 67,763 Payable to Custodian -- -- -- 2,070 Payable for investment securities purchased 587,343 723,952 -- 327,427 Payable for fund shares redeemed 8,908 2,376 55,836 10,488 Other accrued expenses 103,219 41,819 41,693 150,104 ----------- ----------- ----------- ------------ Total Liabilities 773,576 783,128 110,405 557,852 ----------- ----------- ----------- ------------ NET ASSETS $76,915,396 $26,188,608 $26,100,100 $110,280,032 ----------- ----------- ----------- ------------ ----------- ----------- ----------- ------------ NET ASSETS CONSIST OF: Capital stock 84,773,064 23,804,480 24,817,310 106,690,282 Unrealized appreciation on investments 5,745,626 2,340,937 1,188,665 4,065,649 Accumulated undistributed net investment income 545,775 409,879 7,245 21,833 Accumulated undistributed net realized gain/(loss) (14,149,069) (366,688) 86,880 (497,732) ----------- ----------- ----------- ------------ Total Net Assets $76,915,396 $26,188,608 $26,100,100 $110,280,032 ----------- ----------- ----------- ------------ ----------- ----------- ----------- ------------ Shares outstanding (unlimited shares of no par value authorized) 9,355,324 2,323,699 2,361,799 10,294,962 Net asset value, offering and redemption price per share $ 8.22 $ 11.27 $ 11.05 $ 10.71 ----------- ----------- ----------- ------------ ----------- ----------- ----------- ------------
See notes to financial statements. AssetMark Funds STATEMENTS OF OPERATIONS For the Year Ended June 30, 2003 LARGE CAP LARGE CAP SMALL/MID CAP SMALL/MID CAP GROWTH FUND VALUE FUND GROWTH FUND VALUE FUND ----------- ---------- ----------- ---------- INVESTMENT INCOME: Dividend income (net of foreign withholding tax of $0, $4,803, $0 and $49, respectively) $ 493,552 $ 1,413,910 $ 25,184 $ 196,985 Interest income 41,137 62,150 16,940 16,950 ----------- ----------- ----------- ----------- Total investment income 534,689 1,476,060 42,124 213,935 ----------- ----------- ----------- ----------- EXPENSES: Investment advisory fees 644,347 643,902 170,548 173,650 Distribution (12b-1) fees 169,565 169,448 44,881 43,412 Federal and state registration fees 27,758 27,224 18,258 17,733 Custody fees 27,935 18,965 14,887 34,354 Audit fees 33,628 33,504 8,794 8,786 Shareholder servicing fees 33,913 33,890 8,976 8,683 Fund accounting fees 32,523 33,944 33,117 33,759 Administration fees 39,264 39,126 28,600 28,617 Transfer agent fees and expenses 22,060 22,281 14,249 14,172 Reports to shareholders 7,771 7,115 2,130 1,984 Directors' fees and expenses 17,065 15,374 4,528 4,321 Legal fees 42,767 42,803 11,009 10,442 Insurance fees 5,938 5,694 1,524 1,524 ----------- ----------- ----------- ----------- Total expenses before Advisor reimbursement 1,104,534 1,093,270 361,501 381,437 Less fees and expenses reimbursed and waived by the Advisor (93,927) (83,388) (76,062) (105,333) ----------- ----------- ----------- ----------- Net expenses 1,010,607 1,009,882 285,439 276,104 ----------- ----------- ----------- ----------- Net investment income/(loss) (475,918) 466,178 (243,315) (62,169) ----------- ----------- ----------- ----------- NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS: Net realized loss on investments (5,959,169) (4,632,059) (2,286,404) (1,195,149) Net change in unrealized appreciation on investments 14,155,611 8,934,293 5,300,542 2,910,061 ----------- ----------- ----------- ----------- Net realized and unrealized gains 8,196,442 4,302,234 3,014,138 1,714,912 ----------- ----------- ----------- ----------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 7,720,524 $ 4,768,412 $ 2,770,823 $ 1,652,743 ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
See notes to financial statements. INTERNATIONAL REAL ESTATE TAX-EXEMPT CORE PLUS EQUITY SECURITIES FIXED INCOME FIXED INCOME FUND FUND FUND FUND ------------- ----------- ------------ ------------ INVESTMENT INCOME: Dividend income (net of withholding tax of $214,583, $0, $0 and $0, respectively) $ 1,457,523 $1,118,214 $ -- $4,597,328 Interest income 51,890 8,555 679,043 5,674 ----------- ---------- ---------- ---------- Total investment income 1,509,413 1,126,769 679,043 4,603,002 ----------- ---------- ---------- ---------- EXPENSES: Investment advisory fees 556,171 161,439 155,909 566,381 Distribution (12b-1) fees 146,361 42,484 48,721 188,793 Federal and state registration fees 24,211 17,473 18,037 27,574 Custody fees 20,936 13,679 8,711 30,623 Audit fees 18,196 7,951 9,174 38,504 Shareholder servicing fees 29,272 8,497 9,744 37,759 Fund accounting fees 36,948 31,503 44,598 39,868 Administration fees 34,411 28,625 28,610 44,214 Transfer agent fees and expenses 20,948 14,084 14,440 22,970 Reports to shareholders 2,810 2,913 1,847 6,571 Directors' fees and expenses 12,472 4,050 4,098 17,209 Legal fees 30,517 9,703 9,488 38,178 Insurance fees 6,304 1,487 1,855 6,237 ----------- ---------- ---------- ---------- Total expenses before Advisor reimbursement 939,557 343,888 355,232 1,064,881 Less fees and expenses reimbursed and waived by the Advisor (8,702) (90,683) (103,830) (90,706) ----------- ---------- ---------- ---------- Net expenses 930,855 253,205 251,402 974,175 ----------- ---------- ---------- ---------- Net investment income 578,558 873,564 427,641 3,628,827 ----------- ---------- ---------- ---------- NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS: Net realized gain/(loss) on investments (10,442,783) (390,870) 86,881 (310,078) Net change in unrealized appreciation on investments 6,033,009 1,091,440 898,953 4,279,623 ----------- ---------- ---------- ---------- Net realized and unrealized gains/(losses) (4,409,774) 700,570 985,834 3,969,545 ----------- ---------- ---------- ---------- NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $(3,831,216) $ 1,574,134 $1,413,475 $7,598,372 ----------- ---------- ---------- ---------- ----------- ---------- ---------- ----------
See notes to financial statements. AssetMark Funds STATEMENTS OF CHANGES IN NET ASSETS LARGE CAP GROWTH FUND LARGE CAP VALUE FUND ------------------------ ----------------------- YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED JUNE 30, JUNE 30, JUNE 30, JUNE 30, 2003 2002 2003 2002 -------- -------- -------- -------- OPERATIONS: Net investment income/(loss) $ (475,918) $ (292,983) $ 466,178 $ 183,207 Net realized loss on investment transactions (5,959,169) (2,377,260) (4,632,059) (533,400) Change in unrealized appreciation/(depreciation) on investments 14,155,611 (7,853,260) 8,934,293 (3,239,081) ------------ ----------- ------------ ----------- Net increase/(decrease) in net assets resulting from operations 7,720,524 (10,523,503) 4,768,412 (3,589,274) ------------ ----------- ------------ ----------- CAPITAL SHARE TRANSACTIONS: Shares sold 87,403,436 68,589,092 85,812,272 65,218,838 Shares issued to holders in reinvestment of dividends -- -- 266,539 68,345 Shares redeemed (26,425,348) (8,400,885) (25,881,069) (8,297,797) ------------ ----------- ------------ ----------- Net increase 60,978,088 60,188,207 60,197,742 56,989,386 ------------ ----------- ------------ ----------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Net investment income -- -- (340,527) (82,795) From net realized gains -- -- (95,707) -- ------------ ----------- ------------ ----------- Total dividends and distributions -- -- (436,234) (82,795) ------------ ----------- ------------ ----------- INCREASE IN NET ASSETS 68,698,612 49,664,704 64,529,920 53,317,317 NET ASSETS: Beginning of year 49,664,714 10 53,317,327 10 ------------ ----------- ------------ ----------- End of year (including undistributed net investment income of ($0, $0, $212,885 and $97,122, respectively) $118,363,326 $49,664,714 $117,847,247 $53,317,327 ------------ ----------- ------------ ----------- ------------ ----------- ------------ ----------- CHANGES IN SHARES OUTSTANDING Shares sold 12,829,109 7,827,187 10,993,720 6,635,312 Shares issued to holders in reinvestment of dividends -- -- 34,571 6,883 Shares redeemed (4,049,236) (1,008,241) (3,402,574) (849,113) ------------ ----------- ------------ ----------- Net increase 8,779,873 6,818,946 7,625,717 5,793,082 ------------ ----------- ------------ ----------- ------------ ----------- ------------ -----------
See notes to financial statements. SMALL/MID CAP GROWTH FUND SMALL/MID CAP VALUE FUND ------------------------- ------------------------ YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED JUNE 30, JUNE 30, JUNE 30, JUNE 30, 2003 2002 2003 2002 -------- -------- -------- -------- OPERATIONS: Net investment loss $ (243,315) $ (116,064) $ (62,169) $ (29,630) Net realized loss on investment transactions (2,286,404) (1,352,075) (1,195,149) (334,114) Change in unrealized appreciation/(depreciation) on investments 5,300,542 (1,888,044) 2,910,061 259,400 ----------- ----------- ----------- ----------- Net increase/(decrease) in net assets resulting from operations 2,770,823 (3,356,183) 1,652,743 (104,344) ----------- ----------- ----------- ----------- CAPITAL SHARE TRANSACTIONS: Shares sold 23,612,052 20,818,661 24,155,354 19,564,741 Shares issued to holders in reinvestment of dividends -- -- -- -- Shares redeemed (7,779,200) (4,545,317) (9,415,911) (6,149,223) ----------- ----------- ----------- ----------- Net increase 15,832,852 16,273,344 14,739,443 13,415,518 ----------- ----------- ----------- ----------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Net investment income -- -- -- -- From net realized gains -- -- -- -- ----------- ----------- ----------- ----------- Total dividends and distributions -- -- -- -- ----------- ----------- ----------- ----------- INCREASE IN NET ASSETS 18,603,675 12,917,161 16,392,186 13,311,174 NET ASSETS: Beginning of year 12,917,171 10 13,311,184 10 ----------- ----------- ----------- ----------- End of year (including undistributed net investment income of $0, $0, $0 and $0, respectively) $31,520,846 $12,917,171 $29,703,370 $13,311,184 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- CHANGES IN SHARES OUTSTANDING Shares sold 3,563,425 2,346,846 2,697,263 1,935,647 Shares issued to holders in reinvestment of dividends -- -- -- -- Shares redeemed (1,231,939) (552,785) (1,077,324) (624,432) ----------- ----------- ----------- ----------- Net increase 2,331,486 1,794,061 1,619,939 1,311,215 ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
See notes to financial statements. INTERNATIONAL EQUITY FUND REAL ESTATE SECURITIES FUND ------------------------- --------------------------- YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED JUNE 30, JUNE 30, JUNE 30, JUNE 30, 2003 2002 2003 2002 -------- -------- -------- -------- OPERATIONS: Net investment income $ 578,558 $ 188,595 $ 873,564 $ 458,511 Net realized loss on investment transactions (10,442,783) (3,706,286) (390,870) (99,478) Change in unrealized appreciation/(depreciation) on investments 6,033,009 (287,383) 1,091,440 1,249,497 ------------- ------------ ----------- ----------- Net increase/(decrease) in net assets resulting from operations (3,831,216) (3,805,074) 1,574,134 1,608,530 ------------- ------------ ----------- ----------- CAPITAL SHARE TRANSACTIONS: Shares sold 162,199,383 87,696,946 19,161,329 19,089,012 Shares issued to holders in reinvestment of dividends 130,931 -- 370,198 156,755 Shares redeemed (138,663,722) (26,590,484) (8,494,953) (6,477,871) ------------- ------------ ----------- ----------- Net increase 23,666,592 61,106,462 11,036,574 12,767,896 ------------- ------------ ----------- ----------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Net investment income (221,378) -- (493,081) (189,715) From net realized gains -- -- (115,740) -- ------------- ------------ ----------- ----------- Total dividends and distributions (221,378) -- (608,821) (189,715) ------------- ------------ ----------- ----------- INCREASE IN NET ASSETS 19,613,998 57,301,388 12,001,887 14,186,711 NET ASSETS: Beginning of year 57,301,398 10 14,186,721 10 ------------- ------------ ----------- ----------- End of year (including undistributed net investment income of $545,775, $188,595, $409,879 and $154,887, respectively) $ 76,915,396 $ 57,301,398 $26,188,608 $14,186,721 ------------- ------------ ----------- ----------- ------------- ------------ ----------- ----------- CHANGES IN SHARES OUTSTANDING Shares sold 21,438,768 9,339,571 1,851,300 1,879,402 Shares issued to holders in reinvestment of dividends 17,342 -- 37,020 15,866 Shares redeemed (18,495,861) 2,944,497 (833,112) (626,778) ------------- ------------ ----------- ----------- Net increase 2,960,249 12,284,068 1,055,208 1,268,490 ------------- ------------ ----------- ----------- ------------- ------------ ----------- -----------
See notes to financial statements. TAX-EXEMPT FIXED CORE PLUS FIXED INCOME FUND INCOME FUND ----------------------- ------------------------ YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED JUNE 30, JUNE 30, JUNE 30, JUNE 30, 2003 2002 2003 2002 -------- -------- -------- -------- OPERATIONS: Net investment income $ 427,641 $ 178,276 $ 3,628,827 $ 1,548,681 Net realized gain/(loss) on investment transactions 86,881 1,883 (310,078) (147,815) Change in unrealized appreciation/(depreciation) on investments 898,953 289,712 4,279,623 (213,974) ----------- ----------- ------------ ----------- Net increase in net assets resulting from operations 1,413,475 469,871 7,598,372 1,186,892 ----------- ----------- ------------ ----------- CAPITAL SHARE TRANSACTIONS: Shares sold 25,716,868 16,976,396 118,369,226 61,846,685 Shares issued to holders in reinvestment of dividends 198,541 97,753 2,116,165 1,227,091 Shares redeemed (14,891,002) (3,381,246) (66,998,079) (9,921,472) ----------- ----------- ------------ ----------- Net increase 11,024,407 13,692,903 53,487,312 53,152,304 ----------- ----------- ------------ ----------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Net investment income (424,443) (174,229) (3,611,163) (1,521,932) From net realized gains (1,884) -- (11,763) -- ----------- ----------- ------------ ----------- Total dividends and distributions (426,327) (174,229) (3,622,926) (1,521,932) ----------- ----------- ------------ ----------- INCREASE IN NET ASSETS 12,011,555 13,988,545 57,462,758 52,817,264 NET ASSETS: Beginning of year 14,088,545 100,000 52,817,274 10 ----------- ----------- ------------ ----------- End of year (including undistributed net investment income of $7,245, $4,047, $21,833 and $26,749, respectively) $26,100,100 $14,088,545 $110,280,032 $52,817,274 ----------- ----------- ------------ ----------- ----------- ----------- ------------ ----------- CHANGES IN SHARES OUTSTANDING Shares sold 2,374,118 1,657,374 11,317,528 6,054,884 Shares issued to holders in reinvestment of dividends 18,249 9,546 202,609 121,189 Shares redeemed (1,376,854) (330,634) (6,431,139) (970,110) ----------- ----------- ------------ ----------- Net increase 1,015,513 1,336,286 5,088,998 5,205,963 ----------- ----------- ------------ ----------- ----------- ----------- ------------ -----------
See notes to financial statements. AssetMark Funds FINANCIAL HIGHLIGHTS LARGE CAP GROWTH FUND LARGE CAP VALUE FUND --------------------- -------------------- YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED JUNE 30, JUNE 30, JUNE 30, JUNE 30, 2003 2002 2003 2002 -------- -------- -------- -------- Per share data for a share of capital stock outstanding for the entire period and selected information for the period are as follows: Net asset value, beginning of year $ 7.28 $10.00 $ 9.20 $10.00 Income from investment operations: Net investment income/(loss) -- (0.04) 0.06 0.05 Net realized and unrealized gains/(losses) on investments 0.31 (2.68) (0.42) (0.82) ------ ------ ------ ------ Total from investment operations 0.31 (2.72) (0.37) (0.77) ------ ------ ------ ------ Less distributions: Dividends from net investment income -- -- (0.04) (0.03) Dividends from net realized gains -- -- (0.01) -- ------ ------ ------ ------ Total distributions -- -- (0.05) (0.03) ------ ------ ------ ------ Net asset value, end of year $ 7.59 $ 7.28 $ 8.78 $ 9.20 ------ ------ ------ ------ ------ ------ ------ ------ Total return 4.26% -27.20% -3.89% -7.76% Supplemental data and ratios: Net assets, end of year $118,363,326 $49,664,714 $117,847,247 $53,317,327 Ratio of expenses to average net assets Before Expense Reimbursement 1.63% 1.75% 1.61% 1.78% After Expense Reimbursement 1.49% 1.49% 1.49% 1.49% Ratio of net investment income/(loss) to average net assets Before Expense Reimbursement -0.84% -1.19% 0.56% 0.28% After Expense Reimbursement -0.70% -0.93% 0.69% 0.57% Portfolio turnover rate 30.47% 82.84% 49.79% 94.61%
See notes to financial statements. SMALL/MID CAP GROWTH FUND SMALL/MID CAP VALUE FUND ------------------------- ------------------------ YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED JUNE 30, JUNE 30, JUNE 30, JUNE 30, 2003 2002 2003 2002 -------- -------- -------- -------- Per share data for a share of capital stock outstanding for the entire period and selected information for the period are as follows: Net asset value, beginning of year $ 7.20 $10.00 $10.15 $10.00 Income from investment operations: Net investment loss -- (0.06) -- (0.02) Net realized and unrealized gains/(losses) on investments 0.44 (2.74) (0.02) 0.17 ------ ------ ------ ------ Total from investment operations 0.44 (2.80) (0.02) 0.15 ------ ------ ------ ------ Less distributions: Dividends from net investment income -- -- -- -- Dividends from net realized gains -- -- -- -- ------ ------ ------ ------ Total distributions -- -- -- -- ------ ------ ------ ------ Net asset value, end of year $ 7.64 $ 7.20 $10.13 $10.15 ------ ------ ------ ------ ------ ------ ------ ------ Total return 6.11% -28.00% -0.20% 1.50% Supplemental data and ratios: Net assets, end of year $31,520,846 $12,917,171 $29,703,370 $13,311,184 Ratio of expenses to average net assets Before Expense Reimbursement 2.01% 2.30% 2.20% 2.40% After Expense Reimbursement 1.59% 1.59% 1.59% 1.59% Ratio of net investment loss to average net assets Before Expense Reimbursement -1.78% -2.01% -0.96% -1.14% After Expense Reimbursement -1.36% -1.30% -0.36% -0.33% Portfolio turnover rate 19.02% 51.57% 64.32% 84.19%
See notes to financial statements. INTERNATIONAL EQUITY FUND REAL ESTATE SECURITIES FUND ------------------------- --------------------------- YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED JUNE 30, JUNE 30, JUNE 30, JUNE 30, 2003 2002 2003 2002 -------- -------- -------- -------- Per share data for a share of capital stock outstanding for the entire period and selected information for the period are as follows: Net asset value, beginning of year $ 8.96 $10.00 $11.18 $10.00 Income from investment operations: Net investment income 0.09 0.03 0.56 0.46 Net realized and unrealized gains/(losses) on investments (0.80) (1.07) (0.06) 0.97 ------ ------ ------ ------ Total from investment operations (0.71) (1.04) 0.49 1.43 ------ ------ ------ ------ Less distributions: Dividends from net investment income (0.03) -- (0.33) (0.25) Dividends from net realized gains -- -- (0.08) -- ------ ------ ------ ------ Total distributions (0.03) -- (0.40) (0.25) ------ ------ ------ ------ Net asset value, end of year $ 8.22 $ 8.96 $11.27 $11.18 ------ ------ ------ ------ ------ ------ ------ ------ Total return -7.92% -10.40% 4.87% 14.60% Supplemental data and ratios: Net assets, end of year $76,915,396 $57,301,398 $26,188,608 $14,186,721 Ratio of expenses to average net assets Before Expense Reimbursement 1.60% 1.71% 2.02% 2.28% After Expense Reimbursement 1.59% 1.59% 1.49% 1.49% Ratio of net investment income to average net assets Before Expense Reimbursement 0.97% 0.36% 4.61% 4.36% After Expense Reimbursement 0.99% 0.48% 5.14% 5.15% Portfolio turnover rate 148.87% 76.83% 28.71% 68.04%
See notes to financial statements. TAX-EXEMPT FIXED CORE PLUS FIXED INCOME FUND INCOME FUND --------------------- --------------------- YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED JUNE 30, JUNE 30, JUNE 30, JUNE 30, 2003 2002 2003 2002 -------- -------- -------- -------- Per share data for a share of capital stock outstanding for the entire period and selected information for the period are as follows: Net asset value, beginning of year $10.46 $10.00 $10.15 $10.00 Income from investment operations: Net investment income 0.22 0.18 0.48 0.45 Net realized and unrealized gains on investments 0.59 0.46 0.56 0.15 ------ ------ ------ ------ Total from investment operations 0.81 0.64 1.04 0.60 ------ ------ ------ ------ Less distributions: Dividends from net investment income (0.22) (0.18) (0.48) (0.45) Dividends from net realized gains -- -- -- -- ------ ------ ------ ------ Total distributions (0.22) (0.18) (0.48) (0.45) ------ ------ ------ ------ Net asset value, end of year $11.05 $10.46 $10.71 $10.15 ------ ------ ------ ------ ------ ------ ------ ------ Total return 7.78% 6.47% 10.47% 6.03% Supplemental data and ratios: Net assets, end of year $26,100,100 $14,088,545 $110,280,032 $52,817,274 Ratio of expenses to average net assets Before Expense Reimbursement 1.82% 2.28% 1.41% 1.62% After Expense Reimbursement 1.29% 1.29% 1.29% 1.29% Ratio of net investment income to average net assets Before Expense Reimbursement 1.66% 1.42% 4.69% 5.04% After Expense Reimbursement 2.19% 2.41% 4.81% 5.37% Portfolio turnover rate 19.18% 11.02% 52.99% 39.01%
See notes to financial statements. AssetMark Funds NOTES TO FINANCIAL STATEMENTS June 30, 2003 1. ORGANIZATION AssetMark Funds (the "Trust") was organized as a Delaware business trust under a Declaration of Trust dated January 2, 2001. The Trust is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company with eight non- diversified funds (the "Funds"): AssetMark Large Cap Growth Fund, AssetMark Large Cap Value Fund, AssetMark Small/Mid Cap Growth Fund, AssetMark Small/Mid Cap Value Fund, AssetMark International Equity Fund, AssetMark Real Estate Securities Fund, AssetMark Tax-Exempt Fixed Income Fund and AssetMark Core Plus Fixed Income Fund. Each Fund represents a distinct portfolio with its own investment objectives and policies. The assets of the AssetMark Core Plus Fixed Income Fund consist of shares of underlying mutual funds. The assets of each Fund are segregated, and a shareholder's interest is limited to the Fund in which shares are held. The Funds commenced operations on June 29, 2001. 2. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of the financial statements. These policies are in conformity with accounting principles generally accepted in the United States of America ("GAAP"). (a) Investment Valuation Portfolio securities which are traded on stock exchanges are valued at the last sale price as of the close of business on the day the securities are being valued, or, lacking any sales, at the mean between the most recent quoted bid and asked price. Each over-the- counter security for which the last sale price on the day of valuation is available from NASDAQ and falls within the latest bid and asked quotations is valued at that price. All other securities traded in the over-the-counter market are valued at the mean between the most recent bid and asked price. Securities that are traded on both the over-the-counter market and on a stock exchange are valued according to the broadest and most representative market. Investments in open- end investment companies are valued at the closing net asset value per share of each mutual fund on the day of valuation. Securities for which quotations are not readily available will be valued at their fair market value as determined by the Board of Trustees. Effective September 15, 2003, portfolio securities listed on a national or foreign securities exchange, except those listed on NASDAQ, for which market quotations are available are valued at the last quoted sale price on each business day. Portfolio securities traded on NASDAQ will be valued at the NASDAQ Official Closing Price ("NOCP") on each business day. If there is no reported sale on an exchange or NASDAQ, the portfolio security will be valued at the mean between the most recent quoted bid and asked price. Price information on listed securities is taken from the exchange where the security is primarily traded. (b) Organization and Prepaid Initial Registration Expense Expenses incurred by the Trust in connection with the organization and initial public offering were expensed as incurred. These expenses were advanced by the Advisor, and the Advisor has agreed to reimburse the Funds for these expenses, subject to potential recovery (see Note 3). (c) Federal Income Taxes The Funds intend to comply with the requirements of the Internal Revenue Code necessary to qualify as regulated investment companies and to make the requisite distributions of income and capital gains to their shareholders sufficient to relieve them from all or substantially all Federal income taxes. Therefore, no Federal income tax provision is required. The tax character of distributions paid during the year ended June 30, 2003 were the same for financial statement and tax purposes. GAAP requires that permanent differences between financial reporting and tax reporting be reclassified between various components of net assets. As a result of permanent book-to- tax differences relating to net operating losses, accumulated net investment loss has been increased and capital stock has been decreased by $475,918, $243,315 and $62,174 for the Large Cap Growth Fund, Small/Mid Cap Growth Fund and Small/Mid Cap Value Fund, respectively. Additionally, as a result of permanent book-to-tax differences relating to security transactions in real estate investment trusts, accumulated net investment income has been decreased and accumulated net realized loss has been decreased by $9,888, $5 and $125,491 for the Large Cap Value Fund, Small/Mid Cap Value Fund and the Real Estate Securities Fund, respectively. The Funds intend to utilize provisions of the federal income tax laws which allow the Funds to carry realized capital losses forward for eight years following the year of loss and offset such losses against any future realized capital gains. Capital loss carryforwards available for federal income tax purposes are as follows: CAPITAL LOSSES EXPIRING: ------------------------ 6/30/10 6/30/11 ------- ------- Large Cap Growth Fund $858,517 $1,841,558 Large Cap Value Fund -- 3,936,721 Small/Mid Cap Growth Fund 319,848 1,785,504 Small/Mid Cap Value Fund 106,060 320,715 International Equity Fund 410,578 5,891,452 Real Estate Securities Fund -- 70,883 Tax-Exempt Fixed Income Fund -- -- Core Plus Fixed Income Fund -- 163,100 Additionally, at June 30, 2003, the Funds deferred on a tax basis post-October losses as follows: Large Cap Growth Fund $5,199,871 Large Cap Value Fund 950,132 Small/Mid Cap Growth Fund 1,245,359 Small/Mid Cap Value Fund 494,371 International Equity Fund 7,441,350 Real Estate Securities Fund 36,633 Tax-Exempt Fixed Income Fund -- Core Plus Fixed Income Fund 199,982 (d) Use of Estimates The preparation of financial statements in conformity with GAAP 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 revenues and expenses during the reporting period. Actual results could differ from those estimates. (e) Indemnifications Under the Funds' organizational documents, its officers and trustees are indemnified against certain liability arising out of the performance of their duties to the Funds. In addition, in the normal course of business the Funds enter into contracts that contain a variety of representations and warranties which provide general indemnifications. The Funds' maximum exposure under these arrangements are unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, the Funds expect the risk of loss to be remote. (f) Distribution to Shareholders The Funds, with the exception of the Tax-Exempt Fixed Income Fund and Core Plus Fixed Income Fund, will distribute any net investment income at least annually. The Tax-Exempt Fixed Income Fund and Core Plus Fixed Income Fund will distribute any net investment income quarterly. All of the Funds will distribute any net realized long or short-term capital gains at least annually. Distributions to shareholders are recorded on the ex-dividend date. The Funds may also pay a special distribution at the end of the calendar year to comply with federal tax requirements. The tax components of dividends paid during the fiscal years ended June 30, 2003 and 2002 are as follows: JUNE 30, 2003 ------------------------------ ORDINARY LONG-TERM INCOME CAPITAL GAINS DISTRIBUTIONS DISTRIBUTIONS ------------- ------------- Large Cap Growth Fund $ -- $ -- Large Cap Value Fund 435,442 792 Small/Mid Cap Growth Fund -- -- Small/Mid Cap Value Fund -- -- International Equity Fund 221,378 -- Real Estate Securities Fund 595,223 13,598 Tax-Exempt Fixed Income Fund 426,327 -- Core Plus Fixed Income Fund 3,616,590 6,336 JUNE 30, 2002 ------------------------------ ORDINARY LONG-TERM INCOME CAPITAL GAINS DISTRIBUTIONS DISTRIBUTIONS ------------- ------------- Large Cap Growth Fund $ -- $ -- Large Cap Value Fund 82,795 -- Small/Mid Cap Growth Fund -- -- Small/Mid Cap Value Fund -- -- International Equity Fund -- -- Real Estate Securities Fund 189,715 -- Tax-Exempt Fixed Income Fund 174,229 -- Core Plus Fixed Income Fund 1,521,932 -- 3. INVESTMENT ADVISOR The Trust has an Investment Advisory Agreement (the "Agreement") with AssetMark Investment Services, Inc. (the "Advisor"), with whom certain officers and directors of the Trust are affiliated, to furnish investment advisory services to the Funds. Under the terms of the Agreement, the Trust, on behalf of the Funds, compensates the Advisor for its management services at the following rates, based on each Fund's average daily net assets: Large Cap Growth Fund 0.95% Large Cap Value Fund 0.95% Small/Mid Cap Growth Fund 0.95% Small/Mid Cap Value Fund 1.00% International Equity Fund 0.95% Real Estate Securities Fund 0.95% Tax-Exempt Fixed Income Fund 0.80% Core Plus Fixed Income Fund 0.75% The Advisor has agreed to waive, through October 31, 2004, its management fee and/or reimburse the Fund's other expenses, including organization expenses, to the extent necessary to ensure that the Funds' operating expenses do not exceed the following rates, based on each Fund's average daily net assets: Large Cap Growth Fund 1.49% Large Cap Value Fund 1.49% Small/Mid Cap Growth Fund 1.59% Small/Mid Cap Value Fund 1.59% International Equity Fund 1.59% Real Estate Securities Fund 1.49% Tax-Exempt Fixed Income Fund 1.29% Core Plus Fixed Income Fund 1.29% Any such waiver or reimbursement is subject to later adjustment to allow the Advisor to recoup amounts waived or reimbursed to the extent actual fees and expenses for a fiscal period are less than each Fund's expense limitation cap, provided, however, that the Advisor shall only be entitled to recoup such amounts for a period of three years from the date such amount was waived or reimbursed. Waived/reimbursed expenses subject to potential recovery by year of expiration are as follows: YEAR OF EXPIRATION ------------------------------------- 6/30/04 6/30/05 6/30/06 ------- ------- ------- Large Cap Growth Fund $22,772 $80,252 $93,927 Large Cap Value Fund 22,772 93,986 83,388 Small/Mid Cap Growth Fund 11,898 63,245 76,062 Small/Mid Cap Value Fund 11,898 72,099 105,333 International Equity Fund 45,839 46,594 8,702 Real Estate Securities Fund 10,614 69,912 90,683 Tax-Exempt Fixed Income Fund 4,751 73,116 103,830 Core Plus Fixed Income Fund 9,507 94,633 90,706 The waived/reimbursed amounts expiring on June 30, 2004 represent organization expenses incurred by the Trust, and advanced by the Advisor, in connection with the organization and initial public offering of the Funds. Pursuant to sub-advisory agreements between the Advisor and various sub- advisors, sub-advisors provide sub-advisory services to the Funds. Under the terms of these sub-advisory agreements, the Advisor compensates the sub-advisors based on each Fund's average daily net assets. 4. DISTRIBUTION PLAN The Trust, on behalf of the Funds, has adopted a distribution plan pursuant to Rule 12b-1 under the 1940 Act (the "12b-1 Plan"), which provides that the Funds will pay distribution fees to AssetMark Capital Corporation, an affiliate of the Advisor, at an annual rate of up to 0.25% of the average daily net assets of the Funds. Quasar Distributors, LLC serves as sub- distributor to each of the Funds. Payments under the distribution plan shall be used to compensate persons who provide support services in connection with the distribution of the Fund's shares and servicing of the Fund's shareholders. Quasar Distributors, LLC is an affiliated company of U.S. Bank, N.A. 5. SERVICE AND CUSTODY AGREEMENTS The Trust has entered into Service Agreements with U.S. Bancorp Fund Services, LLC ("USBFS") and a Custody Agreement with U.S. Bank, N.A., an affiliate of USBFS. Under these agreements, USBFS and U.S. Bank, N.A. provide certain custody, transfer agency, administrative and accounting services. 6. SECURITIES LENDING Effective July 1, 2003 the Funds entered into a securities lending arrangement with U.S. Bank, N.A. (the "Custodian"). Under the terms of the agreement, the Custodian is authorized to loan securities on behalf of the Funds to approved brokers against the receipt of cash collateral at least 102% of the value of the securities loaned. The cash collateral is invested by the Custodian in a money market pooled account approved by the Advisor. Although risk is mitigated by the collateral, the Funds could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them. The agreement provides that after predetermined rebates to brokers, 60% of the net securities lending revenue shall be solely paid as credits to the Funds to be used as an offset against Custody Costs and other charges incurred by the Funds from the Custodian and shall not, in any event, be paid as cash to the Funds. The Custodian shall be paid a fee for administering a securities lending program for the Funds, which shall equal 40% of the net securities lending revenues generated under the agreement as compensation for its securities lending services. 7. INVESTMENT TRANSACTIONS The aggregate purchases and sales of securities, excluding short-term investments, for the year ended June 30, 2003 are summarized below. There were no purchases or sales of long-term U.S. Government Securities. PURCHASES SALES --------- ----- Large Cap Growth Fund $75,408,122 $20,223,589 Large Cap Value Fund 88,282,089 32,613,414 Small/Mid Cap Growth Fund 18,643,646 3,295,093 Small/Mid Cap Value Fund 24,726,246 10,767,248 International Equity Fund 105,601,590 81,587,373 Real Estate Securities Fund 16,034,132 4,813,829 Tax-Exempt Fixed Income Fund 13,898,890 3,560,666 Core Plus Fixed Income Fund 91,295,706 40,118,537 At June 30, 2003, the components of accumulated earnings/(losses) on a tax basis were as follows: LARGE CAP LARGE CAP SMALL/MID SMALL/MID INTERNATIONAL REAL ESTATE TAX-EXEMPT CORE PLUS GROWTH VALUE CAP GROWTH CAP VALUE EQUITY SECURITIES FIXED INCOME FIXED INCOME FUND FUND FUND FUND FUND FUND FUND FUND --------- --------- ---------- --------- ------------- ----------- ------------ ------------ Cost of investments $111,154,516 $113,712,685 $28,759,216 $27,708,329 $ 71,497,383 $24,471,300 $24,247,596 $105,455,666 ------------ ------------ ----------- ----------- ------------ ----------- ----------- ------------ Gross unrealized appreciation 13,085,242 12,827,247 5,211,841 3,807,199 7,516,494 2,591,670 1,201,157 4,107,820 Gross unrealized depreciation (7,219,374) (7,493,170) (2,087,111) (1,245,544) (2,230,321) (509,905) (12,492) (176,821) ------------ ------------ ----------- ----------- ------------ ----------- ----------- ------------ Net unrealized appreciation $ 5,865,868 $ 5,334,077 $ 3,124,730 $ 2,561,655 $ 5,286,173 $ 2,081,765 $ 1,188,665 $ 3,930,999 ------------ ------------ ----------- ----------- ------------ ----------- ----------- ------------ ------------ ------------ ----------- ----------- ------------ ----------- ----------- ------------ Cumulative tax cost adjustments $ 436,483 $ 361,135 $ 287,768 $ 607,806 $ 459,453 $ 259,172 $ -- $ 134,650 ------------ ------------ ----------- ----------- ------------ ----------- ----------- ------------ Undistributed tax-exempt ordinary income $ -- $ -- $ -- $ -- $ -- $ -- $ 7,245 $ -- Undistributed ordinary income -- 212,885 -- -- 599,539 409,879 25,482 21,833 Undistributed long-term capital gain -- -- -- -- -- -- 61,398 -- ------------ ------------ ----------- ----------- ------------ ----------- ----------- ------------ Total distributable earnings $ -- $ 212,885 $ -- $ -- $ 599,539 $ 409,879 $ 94,125 $ 21,833 ------------ ------------ ----------- ----------- ------------ ----------- ----------- ------------ ------------ ------------ ----------- ----------- ------------ ----------- ----------- ------------ Other accumulated losses $ (8,336,429) $ (5,247,988) $(3,638,479) $(1,528,952) $(14,202,833) $ (366,688) $ -- $ (497,732) ------------ ------------ ----------- ----------- ------------ ----------- ----------- ------------ Total accumulated earnings/ (losses) $ (2,034,078) $ 660,109 $ (225,981) $ 1,640,509 $ (7,857,668) $ 2,384,128 $ 1,282,790 $ 3,589,750 ------------ ------------ ----------- ----------- ------------ ----------- ----------- ------------ ------------ ------------ ----------- ----------- ------------ ----------- ----------- ------------
AssetMark Funds REPORT OF INDEPENDENT AUDITORS To the Board of Trustees and Shareholders of AssetMark Funds In our opinion, the accompanying statements of assets and liabilities, including the statements of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of each of the funds comprising the AssetMark Funds, (hereafter referred to as the "Funds") at June 30, 2003, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Funds' management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2003 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. PricewaterhouseCoopers LLP San Francisco, California August 26, 2003 AssetMark Funds ADDITIONAL INFORMATION June 30, 2003 1. SHAREHOLDER NOTIFICATION OF FEDERAL TAX STATUS (UNAUDITED) The Large Cap Value Fund designates fifty-six percent of dividends declared during the fiscal year ended June 30, 2003 as dividends qualifying for the dividends received deduction available to corporate shareholders. 2. FOREIGN TAX CREDIT (UNAUDITED) For the year ended June 30, 2003, the International Equity Fund earned foreign source income and paid foreign taxes, which they intend to pass through to their shareholders pursuant to Section 853 of the Internal Revenue Code as follows: Foreign Source Income Earned Foreign Taxes Paid ---------------------------- ------------------ Australia $ 21,773 $ -- Brazil 73,513 5,194 Canada 19,550 2,928 Denmark 28,052 8,649 Finland 84,948 12,742 France 266,011 41,036 Germany 5,674 976 Hong Kong 58,447 4,125 India 1,636 301 Ireland 17,549 555 Israel 1,241 239 Italy 54,165 14,624 Japan 79,609 12,683 Mexico 5,267 -- Netherlands 98,451 20,601 Peru 1,718 -- Singapore 18,072 2,514 South Africa 38,558 6,784 South Korea 20,430 3,371 Spain 47,905 -- Sweden 145,562 22,017 Switzerland 35,849 5,377 Thailand 13,399 1,340 United Kingdom 538,088 48,527 ---------- -------- Total $1,675,467 $214,583 ---------- -------- ---------- -------- 3. DISCLOSURE REGARDING FUND TRUSTEES AND OFFICERS (UNAUDITED) # OF PORTFOLIOS IN FUND OTHER POSITION(S) TERM OF OFFICE COMPLEX DIRECTOR/ NAME, AGE HELD WITH AND LENGTH OF PRINCIPAL OVERSEEN TRUSTEE AND ADDRESS THE TRUST TIME SERVED OCCUPATION DURING PAST FIVE YEARS BY TRUSTEE POSITIONS ----------- ----------- -------------- --------------------------------- ---------- --------- INDEPENDENT TRUSTEES R. Thomas DeBerry, 61 Trustee Indefinite Term President, DeBerry Consulting (a 8 None c/o AssetMark since January a securities consulting firm) (1988- Investment Services, Inc. 2001. present); Director, Investment Manager 2300 Contra Costa Services Division of Resources Trust Boulevard, Suite 425 Company (1998-2000). Pleasant Hill, CA 94523 William J. Klipp, 47 Trustee Indefinite Term Retired; President and Chief Operating 8 Trustee of the c/o AssetMark since January Officer, Charles Schwab Investment Lend Lease Investment Services, Inc. 2001. Management, Inc. and Executive Vice Rosen Funds 2300 Contra Costa President, Schwab Funds (1993-1999). (2000-present); Boulevard, Suite 425 Director of Pleasant Hill, CA 94523 SaveDaily.com (2000-present). Leonard H. Rossen, 71 Trustee Indefinite Term President, Len Rossen Consulting (a legal 8 None c/o AssetMark since January consulting firm) (1999-present); Corporate Investment Services, Inc. 2001. Counsel, Franklin Templeton Mutual Funds 2300 Contra Costa and Distributors, Inc. (1996-1999); Regional Boulevard, Suite 425 Counsel and Vice President, Equitable Life Pleasant Hill, CA 94523 Insurance Society (1987-1996); Various key legal positions Securities and Exchange Commission (1973-1987). INTERESTED TRUSTEES Ronald Cordes*, 44 President, Indefinite Term Principal, AssetMark Investment Services, 8 None AssetMark Investment Chairperson, since January Inc. (1994-present). 2300 Contra Costa Trustee 2001. Boulevard, Suite 425 Pleasant Hill, CA 94523 Richard Steiny*, 46 Trustee Indefinite Term Principal, AssetMark Investment Services, 8 None AssetMark Investment since January Inc. (1994-present). 2300 Contra Costa 2001. Boulevard, Suite 425 Pleasant Hill, CA 94523 OFFICERS John Whittaker, 34 Vice President 1-Year Term Vice President and Chief Operating N/A N/A AssetMark since January Officer, AssetMark Investment Investment Services, Inc. 2001 Services, 2000 to present; Director 2300 Contra Costa of Operations, AssetMark Investment Boulevard, Suite 425 Services, Inc., 1997 to 2000; Regional Pleasant Hill, CA 94523 Consultant, AssetMark Investment Services, Inc., 1994 to 1997. Carrie E. Hansen, 33 Treasurer 1-Year Term Director of Operations, AssetMark N/A N/A AssetMark since January Investment Services, Inc., 2000 to Investment Services, Inc. 2001 present; Director of Operations, 2300 Contra Costa Barclays Global Investors, Japan, 1998 Boulevard, Suite 425 to 2000; Principal, Domestic Fund Pleasant Hill, CA 94523 Accounting, Barclays Global Investors, 1997-1998, Manager, Coopers & Lybrand, 1996 to 1997. Teresa Escano, 41 Secretary 1-Year Term Director of Advisor Services Group, N/A N/A AssetMark since January AssetMark Investment Services, Inc., Investment Services, Inc. 2001 2000 to present; Manager of Advisor 2300 Contra Costa Services Group, 1997 to 2000; Portfolio Boulevard, Suite 425 Manager Administrator for The Pleasant Hill, CA 94523 Headlands Group, Inc. (an investment adviser), 1992 to 1997.
The Statement of Additional Information includes additional information about the Fund's Trustees and is available free of charge upon request by calling the Fund toll free at (888) 278-5809. * Ronald Cordes and Richard Steiny are considered "interested persons" of the Funds as defined in the 1940 Act due to their relationship with the Advisor. ASSETMARK FUNDS ASSETMARK LARGE CAP GROWTH FUND ASSETMARK LARGE CAP VALUE FUND ASSETMARK SMALL/MID CAP GROWTH FUND ASSETMARK SMALL/MID CAP VALUE FUND ASSETMARK INTERNATIONAL EQUITY FUND ASSETMARK REAL ESTATE SECURITIES FUND ASSETMARK TAX-EXEMPT FIXED INCOME FUND ASSETMARK CORE PLUS FIXED INCOME FUND INVESTMENT ADVISOR AssetMark Investment Services, Inc. 2300 Contra Costa Blvd., Suite 425 Pleasant Hill, CA 94523 LEGAL COUNSEL Stradley Ronon Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103 INDEPENDENT AUDITORS PricewaterhouseCoopers LLP 333 Market Street San Francisco, CA 94105 TRANSFER AGENT, FUND ACCOUNTANT AND FUND ADMINISTRATOR U.S. Bancorp Fund Services, LLC 615 East Michigan Street Milwaukee, WI 53202 CUSTODIAN U.S. Bank, N.A. 425 Walnut Street Cincinnati, OH 45202 DISTRIBUTOR AssetMark Capital Corporation 2300 Contra Costa Blvd., Suite 425 Pleasant Hill, CA 94523 ITEM 2: CODE OF ETHICS -- Item not required at this time; applicable only to annual reports with periods ending on or after July 15, 2003. ITEM 3: AUDIT COMMITTEE FINANCIAL EXPERT -- Item not required at this time; applicable only to annual reports with periods ending on or after July 15, 2003. ITEM 4: PRINCIPAL ACCOUNTANT FEES AND SERVICES -- Item not required at this time; applicable only to annual reports with periods ending on or after December 15, 2003. ITEM 5: AUDIT COMMITTEE OF LISTED REGISTRANTS -- Item not applicable to registrant, which is an open-end management investment company. ITEM 6: [RESERVED]. ITEM 7: DISCLOSURE of PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES -- Item not applicable to registrant, which is an open-end management investment company. ITEM 8: [RESERVED]. ITEM 9: CONTROLS AND PROCEDURES (a) Based on their evaluation of the Registrant's disclosure controls and procedures ("Procedures") as of a date within 90 days of the filing date of this Form N-CSR (the "Report"), the Registrant's President/Chief Executive Officer and Treasurer/Chief Financial Officer believe that the disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940, as amended) are effectively designed to ensure that information required to be disclosed by the Registrant in the Report is recorded, processed, summarized and reported by the filing date, including ensuring that the information required to be disclosed in the Report is accumulated and communicated to the Registrant's principal executive and financial officers that are making certifications in the Report, as appropriate, to allow timely decisions regarding required disclosure. (b) There were no significant changes in the Registrant's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, and there were no corrective actions with regard to significant deficiencies and material weaknesses. ITEM 10: EXHIBITS (a) Item not required at this time; applicable only to annual reports with periods ending on or after July 15, 2003. (b) The certifications required by Rule 30a-2 under the Investment Company Act of 1940, as amended, and Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are attached as exhibits hereto. 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: AssetMark Funds By: /s/ Ronald D. Cordes ------------------------------- Name: Ronald D. Cordes Title: President Date: September 4, 2003 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. Registrant: AssetMark Funds By: /s/ Ronald D. Cordes ------------------------------- Name: Ronald D. Cordes Title: President (Principal Executive Officer) Date: September 4, 2003 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. Registrant: AssetMark Funds By: /s/ Carrie E. Hansen ------------------------------- Name: Carrie E. Hansen Title: Treasurer (Principal Financial Officer) Date: September 4, 2003