-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JPv3B44IlKALPjI4oHx4j+TDcZTKbR5SbvhFzDcQcQLFpDOgQajsl4fXAKTKXPPY dH+CYUtmmuQ/9mlOTDrEpg== 0000912057-99-007445.txt : 19991129 0000912057-99-007445.hdr.sgml : 19991129 ACCESSION NUMBER: 0000912057-99-007445 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991126 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ONE HUNDRED FUND INC CENTRAL INDEX KEY: 0000074532 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 840568306 STATE OF INCORPORATION: CO FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-01382 FILM NUMBER: 99764604 BUSINESS ADDRESS: STREET 1: 210 UNIVERSITY BLVD STREET 2: STE 800 CITY: DENVER STATE: CO ZIP: 80206 BUSINESS PHONE: 3033364563 MAIL ADDRESS: STREET 1: 210 UNIVERSITY BLVD STREET 2: SUITE 800 CITY: DENVER STATE: CO ZIP: 80206 FORMER COMPANY: FORMER CONFORMED NAME: ONE HUNDRED FUND INC DATE OF NAME CHANGE: 19901128 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BERGER ONE HUNDRED & ONE FUND INC CENTRAL INDEX KEY: 0000074529 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 840569785 STATE OF INCORPORATION: MD FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-01383 FILM NUMBER: 99764605 BUSINESS ADDRESS: STREET 1: 210 UNIVERSITY BLVD STREET 2: SUITE 800 CITY: DENVER STATE: CO ZIP: 80206 BUSINESS PHONE: 3033364563 MAIL ADDRESS: STREET 1: 210 UNIVERSITY BLVD STREET 2: SUITE 800 CITY: DENVER STATE: CO ZIP: 80206 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BERGER OMNI INVESTMENT TRUST CENTRAL INDEX KEY: 0000765924 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 363344166 STATE OF INCORPORATION: MA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-04273 FILM NUMBER: 99764606 BUSINESS ADDRESS: STREET 1: 210 UNIVERSITY BLVD STREET 2: STE 800 CITY: DENVER STATE: CO ZIP: 80206 BUSINESS PHONE: 3033364563 MAIL ADDRESS: STREET 1: 210 UNIVERSITY BLVD STREET 2: STE 800 CITY: DENVER STATE: CO ZIP: 80206 FORMER COMPANY: FORMER CONFORMED NAME: OMNI INVESTMENT FUND DATE OF NAME CHANGE: 19920703 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BERGER INVESTMENT PORTFOLIO TRUST CENTRAL INDEX KEY: 0000912725 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 841244357 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-08046 FILM NUMBER: 99764607 BUSINESS ADDRESS: STREET 1: 210 UNIVERSITY BLVD STREET 2: SUITE 800 CITY: DENVER STATE: CO ZIP: 80206 BUSINESS PHONE: 303364563 MAIL ADDRESS: STREET 1: 210 UNIVERSITY BLVD STREET 2: SUITE 800 CITY: DENVER STATE: CO ZIP: 80206 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BERGER BIAM WORLDWIDE PORTFOLIOS TRUST CENTRAL INDEX KEY: 0001015852 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-07667 FILM NUMBER: 99764608 BUSINESS ADDRESS: STREET 1: 210 UNIVERSITY BLVD STREET 2: SUITE 800 CITY: DENVER STATE: CO ZIP: 80206 BUSINESS PHONE: 303364563 MAIL ADDRESS: STREET 1: 210 UNIVERSITY BLVD STREET 2: SUITE 800 CITY: DENVER STATE: CO ZIP: 80206 N-30D 1 N-30D BERGER FUNDS ANNUAL REPORT [GRAPHIC] September 30, 1999 BERGER INFORMATION TECHNOLOGY FUND BERGER NEW GENERATION FUND BERGER SELECT FUND BERGER SMALL COMPANY GROWTH FUND BERGER SMALL CAP VALUE FUND BERGER MID CAP GROWTH FUND BERGER MID CAP VALUE FUND BERGER 100 FUND BERGER/BIAM INTERNATIONAL FUND BERGER GROWTH AND INCOME FUND BERGER BALANCED FUND INFORMATION ON YEAR-END DISTRIBUTIONS To help you with tax planning, we provide you with the preliminary capital gains amounts our funds may distribute near year-end. Estimates are now available on our Web site at bergerfunds.com or by calling Investor Services at (800) 551-5849. Please keep in mind that these amounts are not final and may be revised before the December 27 record date. As we approach the record date, you may want to check back with us for updated numbers. And, please remember that a capital gains distribution does not change the total value of your account so long as the distribution is reinvested in additional fund shares. By reinvesting distributions rather than taking them in cash, you put the power of compounding to work for you. Over time, this may increase the value of your investment considerably. Below are several important dates you'll want to remember: DECEMBER 27 -- Record date. All shareholders of record as of close of business will receive the distribution. DECEMBER 28 -- Ex-dividend and reinvestment date. On this date the fund's share price will drop by an amount equal to the capital gains distribution (plus or minus any share price fluctuation that may normally occur that day.) Investors who chose to have their distributions reinvested will receive additional shares of the fund. DECEMBER 30 -- Payable date. Checks are issued to investors who elected to receive their distributions in cash. Berger Distributors LLC ~ Member NASD (11/99) Contents 2 A Message for Berger Investors BERGER FUNDS 4 Berger Information Technology Fund 8 Berger New Generation Fund 13 Berger Select Fund 16 Berger Small Company Growth Fund 20 Berger Small Cap Value Fund 24 Berger Mid Cap Growth Fund 28 Berger Mid Cap Value Fund 32 Berger 100 Fund 36 Berger/BIAM International Fund 38 Berger Growth and Income Fund 42 Berger Balanced Fund 46 STATEMENTS OF ASSETS AND LIABILITIES 48 STATEMENTS OF OPERATIONS 50 STATEMENTS OF CHANGES IN NET ASSETS 54 BERGER/BIAM INTERNATIONAL FUND FINANCIAL STATEMENTS 56 BERGER FUNDS NOTES TO FINANCIAL STATEMENTS 62 BERGER/BIAM INTERNATIONAL PORTFOLIO FINANCIAL STATEMENTS (TO BE READ IN CONJUNCTION WITH THE BERGER/BIAM INTERNATIONAL FUND) 67 BERGER/BIAM INTERNATIONAL PORTFOLIO NOTES TO FINANCIAL STATEMENTS 70 FINANCIAL HIGHLIGHTS 77 REPORT OF INDEPENDENT ACCOUNTANTS [LOGO] To obtain a prospectus for any of the Berger Funds, which contains more complete information, including management fees, charges and expenses, call (800) 333-1001. Please read it carefully before you invest. bergerfunds.com Berger Funds September 30, 1999 Annual Report 2 - -------------------------------------------------------------------------------- A Message for Berger Investors IT'S BEEN SEVERAL MONTHS SINCE THE MANAGEMENT CHANGES AT BERGER, AND I'D LIKE to give you a report on our progress. Following is a report on our growth funds--those most directly affected by the changes. I've also included some good news about fees and a few thoughts on market volatility. Each Berger Fund shares the same goal--to provide consistently competitive performance over the long term--performance that will place it in the top quarter of its peer groups despite short-term market fluctuations that may favor one investment style over another. That's a tall order. Our talented, committed investment team has taken important initial steps toward establishing the kind of long-term competitive records that investors deserve.(1) I'm pleased with our progress after these early months. BUILDING A STRONG FOUNDATION At the top of our priority list has been the Berger 100 Fund. Several years of sub-par performance had left investors feeling frustrated. I'm not going to offer a glowing description of how the fund has done a complete turnaround. I am going to tell you the fund is doing better, and we will strive to continue this trend. Co-managers John Jares and Tino Sellitto, who took over in May, have made steady progress. The fund has gained significant ground among its peers and has pulled ahead of the S&P 500 Index.(2) It's a promising start on strengthening the fund's track record and restoring confidence. An unsung hero is the Berger Growth and Income Fund. It's never been a headline grabber, but the performance of this fund has earned it an Overall Morningstar Rating-TM- of 4 stars among 3,210 domestic equity funds as of September 30, 1999.(3) Manager Tino Sellitto, who took over last November, has guided Growth and Income to the upper echelon of its peer group this year, well ahead of the S&P 500.(2) COMING OF AGE Berger Balanced Fund is a youngster compared with the Berger Growth and Income Fund, but now beginning its third year, manager John Jares has established the foundation for the kind of long-term record we are committed to building for every Berger Fund. An excellent performer last year, the Balanced Fund remains at the top according to Lipper, ranking number 1 of 421 balanced funds for the one-year period ended September 30, 1999.(4) Berger New Generation Fund is also coming of age. It has earned the highest Overall Morningstar Rating-TM- of 5 stars among 3,210 domestic equity funds as of September 30, 1999.(3) Manager Mark Sunderhuse, who took over in February, has kept the fund on a winning track, outdistancing the S&P 500(2) as well as most competitors. Amy Selner continues to build an impressive record with the Berger Mid Cap Growth Fund, and since taking over Berger Small Company Growth Fund last November, she has enhanced an already solid record. Nearing the end of its second year, Berger Mid Cap Growth Fund continues to be one of the most solid performers in its peer group and is well ahead of the S&P Mid Cap 400 Index.(5) Small-company stocks appear to have begun emerging from a prolonged bear market, and Berger Small Company Growth Fund remains very competitive in its peer group and out in front of the Russell 2000 Index.(6) The "Best of Berger" is represented in the Berger Select Fund. Each of our four growth managers contributes a limited number of what he or she considers to be their best current investment opportunities to our only non-diversified or focused fund. John, Tino, Mark and Amy took over in May and have adopted a strategy that has resulted in significantly lower turnover, yet performance has remained strong. The fund is far outpacing the S&P 500(2) and continues to make a good showing among its peers. Annual Report September 30, 1999 Berger Funds 3 - -------------------------------------------------------------------------------- MANAGEMENT FEES REDUCED Another positive change for Berger investors is a reduction in the management and administrative fees on all domestic Berger Funds, effective October 1, 1999. For our small-company-oriented funds the old flat fee of .90% per year has been changed to begin at .85% with new breakpoints when the funds reach $500 million and $1 billion in assets. Funds that have carried a flat fee of .75% will also have breakpoints at $500 million and $1 billion in assets. In addition, the .01% administrative fee has been eliminated on all funds. NERVOUS MARKET CALLS FOR COOL HEAD A bout of market jitters can leave many investors feeling a bit nervous. But at Berger we believe that the best advice can be found in a few time-proven points: - - INVEST FOR THE LONG TERM--Successful investors are patient. Stocks may tend to be more volatile over the short term, but over time, stocks have outperformed other types of investments. Historically, the stock market spends more time going up than down. - - STAND FIRM--It's just human nature--market volatility translates to nervous investors. But it's important to avoid making rash decisions rooted in emotion rather than fact. It isn't always easy, but to reach your financial goals, we believe it's best to resist the temptation to make short-term moves. - - INVEST REGULARLY--Dollar cost averaging--investing at regular intervals can help you put volatility to work for you. During market dips you pay less for your fund shares, which can help to lower the average price you pay for shares over time.(7) Meeting Your Expectations Our goal of achieving consistently competitive performance is matched by a second, equally important goal of meeting your service needs. You can let me know what's on your mind by emailing me at jackthompson@bergerfunds.com. I want your investment experience with us to be successful. As always, we value the trust you have placed in us. In the months to come, I will keep you updated on our progress. We look forward to helping you reach your investment goals through the year 2000 and beyond. Sincerely, /s/ Jack R. Thompson JACK R. THOMPSON PRESIDENT Investment returns and principal value will fluctuate so shares, when redeemed, may be worth more or less than their original cost. The Berger Funds may invest in IPO's that may significantly impact performance. This material must be preceded or accompanied by a prospectus. Berger Distributors LLC -- Member NASD (11/99) (1) Past performance does not guarantee future results. (2) The Standard & Poor's 500 Index is a broad-based measurement of changes in stock market conditions based on the average performance of 500 widely held common stocks. The Index is unmanaged, and investors cannot actually make investments in the Index. All comparisons to the Index are based on year-to-date performance through 9/30/99. (3) Morningstar proprietary ratings reflect historical risk-adjusted performance as of 9/30/99 and are subject to change every month. Ratings are calculated from the funds' 3-, 5- and 10-year average annual returns (if applicable) in excess of 90-day Treasury bill returns with appropriate fee adjust ments and a risk factor that reflects fund performance below 90-day T-bill returns. Berger Growth and Income Fund received 4, 3 and 4 stars among 3,210, 2,010, and 751 domestic equity funds for the 3-, 5- and 10-year periods, respectively. Berger New Generation Fund received a 5-star rating out of 3,210 domestic equity funds for the three-year period. The top 10% of the funds in a broad asset class receive 5 stars, the next 22.5% receive 4 stars, and the next 35% receive 3 stars. Given Berger New Generation Fund's focus on leading-edge companies and those in rapidly changing industries, its investments may involve greater risk and price volatility than those in companies in more stable industries. (4) Lipper, Inc. rankings and fund performance figures are based on total return, including reinvestment of dividends and capital gains for the stated period. (5) The Standard & Poor's 400 Index represents the market for stocks for mid-sized U.S. companies. The Index is unmanaged, and investors cannot actually make investments in the Index. Comparison to the Index is based on year-to-date performance through 9/30/99. (6) The Russell 2000 Index represents small cap U.S. stocks. The Index is unmanaged, and investors cannot actually make investments in the Index. Comparison to the Index is based on year-to-date performance through 9/30/99. (7) Dollar-cost averaging does not assure a profit or protect against a loss in declining markets. You should consider your ability to continue your purchases through periods of low price levels before investing. Berger Funds September 30, 1999 Annual Report 4 - -------------------------------------------------------------------------------- [PHOTO] BERGER INFORMATION TECHNOLOGY FUND Ticker Symbol - Investor Shares N/A - Institutional Shares BINFX Fund Number - Investor Shares 912 - Institutional Shares 913 PORTFOLIO MANAGER COMMENTARY WILLIAM F. K. SCHAFF PERFORMANCE The Berger Information Technology Fund (the "Fund") gained 29.53%(1) (Investor Shares) and 31.30% (Institutional Shares) for the period from March 1, 1999 to September 30, 1999. This performance compared very favorably with that of broader market indices such as the Standard & Poor's (S&P) 500 Index,(2) Russell 2000 Index(3) and Wilshire 5000 Index,(4) which gained 4.38%, 9.94% and 4.56%, respectively. Our returns lagged some of the broader technology indices, however, because our Fund has a heavier weighting in information technology (IT) services, software and hardware. Among our peer group, the highest returns were earned by funds that invest in semiconductors, which have been the best performing technology segment this year. Despite our overweighting in the IT sector, we remain confident with our portfolio positioning and company exposure. The IT industry tends to be more defensive and less cyclical than the semiconductor and related groups. YEAR IN REVIEW The best performers among our larger holdings were LSI Logic, Nextel Communications, Texas Instruments, Siebel Systems and Hewlett-Packard. LSI and Texas Instruments are benefiting from strong chip demand. Wireless and networking applications are the strongest demand pulls. An example of this is Nextel Communications, a strong, independent wireless company that has been the subject of takeover rumors for some time. Siebel Systems continued to show strong revenue growth from sales of its leading customer relations management (CRM) software. Hewlett-Packard's price performance was partly a result of the spin-off of its test and measurement business. Company management has found ways of increasing shareholder value over time. The negative performance of three stocks dragged down Fund performance this period. Compaq was our biggest disappointment. This leading PC vendor continued to struggle with change and management uncertainty. Mindspring, a leading Internet service provider, is facing aggressive pricing competition for its services. AXENT Technologies is one of many struggling security software companies. Their business is focused on corporate security, and we believe this area will rebound in the year 2000. Portfolio turnover this period was very low--just over 50% annualized. This is substantially less than many general technology funds and has helped minimize taxable gains to our shareholders. LOOKING AHEAD With the explosive growth in e-commerce and Web-based business models, it is not surprising that one of the biggest challenges facing most traditional businesses is finding a way to compete in the "new economy." We believe that one of the fastest growing areas for IT-related companies will be the ever-increasing use of IT services and software in traditional businesses. While many projects will be justified by management on a rate of return analysis, many others will be undertaken purely for strategic reasons, such as maintaining or increasing the company's competitive edge. We expect areas of demand to include systems management software like that offered by BMC Software and Computer Associates. We also look for a rebound in enterprise resource planning (ERP) and related vertical applications. ERP is currently led by SAP and Oracle. Vertical applications, such as supply chain management (SCM) and CRM software, should be in strong demand. Companies potentially benefiting from this demand include i2 and Siebel Systems. Another area we see as fast-growing is enterprise applications integration (EAI) software, which is used to tie in multiple platforms and different applications. Many recent Initial Public Offerings (IPOs) have been in this area. We also believe that e-commerce development and services will continue to be hot. The general category is too broad to discuss here, but some of the winners should be the leading networking companies such as Cisco, along with e-commerce vendors such as BEA Systems. We strongly believe that 2000 will be the year for IT companies. Once free of the constraints of Y2K budgets, applications and service firms should see a buildup of backlog and a strong push toward new development projects that enhance corporate productivity. We are optimistic that IT-related companies will be the biggest beneficiaries within the broader technology spectrum. We are still very bullish in our long-term outlook because we believe that IT will remain one of the fastest growing segments in the North American economy. 1. Past performance does not guarantee future results. 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. 2. The S&P 500 Index is an unmanaged index, with dividends reinvested, which consists of the common stocks of 500 publicly traded U.S. companies. It is a generally recognized indicator used to measure overall performance of the U.S. stock market. One cannot invest directly in an index. 3. The Russell 2000 Index is an unmanaged index, with dividends reinvested, which consists of the common stocks of 2000 U.S. companies. It is a generally recognized indicator used to measure overall performance of small company stocks. One cannot invest directly in an index. 4. The Wilshire 5000 Index measures the performance of all U.S.-headquartered equity securities with readily available price data. More than 7,000 capitalization weighted security returns are used to adjust the index. One cannot invest directly in an index. Annual Report September 30, 1999 Berger Funds 5 - -------------------------------------------------------------------------------- BERGER INFORMATION TECHNOLOGY FUND PERFORMANCE OVERVIEW INVESTOR SHARES - ---------------- COMPARISON OF CHANGE IN VALUE OF BERGER INFORMATION TECHNOLOGY FUND; INVESTOR SHARES VS. WILSHIRE 5000 INDEX AND COST OF LIVING INDEX
Berger Information Technology Fund; Wilshire 5000 Cost of Investor Shares Index Living Index 4/8/97 $10,000 $10,000 $10,000 9/30/97 $13,575 $12,293 $10,075 3/31/98 $16,030 $14,157 $10,138 9/30/98 $15,570 $12,698 $10,225 3/31/99 $23,955 $16,013 $10,313 9/30/99 $28,730 $16,123 $10,444
BERGER INFORMATION TECHNOLOGY FUND; INVESTOR SHARES* AVERAGE ANNUAL TOTAL RETURN
As of September 30, 1999 - -------------------------------------- 1 Year 84.49% Life of Fund 53.03% (4/8/97)
INSTITUTIONAL SHARES - -------------------- COMPARISON OF CHANGE IN VALUE OF BERGER INFORMATION TECHNOLOGY FUND; INSTITUTIONAL SHARES VS. WILSHIRE 5000 INDEX AND COST OF LIVING INDEX
Berger Information Technology Fund; Wilshire 5000 Cost of Investor Shares Index Living Index 4/8/97 $250,000 $250,000 $250,000 9/30/97 $339,375 $307,331 $251,875 3/31/98 $400,750 $353,933 $253,437 9/30/98 $389,250 $317,457 $255,625 3/31/99 $598,875 $400,319 $257,813 9/30/99 $728,075 $403,071 $261,094
BERGER INFORMATION TECHNOLOGY FUND; INSTITUTIONAL SHARES* AVERAGE ANNUAL TOTAL RETURN
As of September 30, 1999 - ----------------------------------------- 1 Year 87.05% Life of Fund 53.88% (4/8/97)
*Performance figures are historical and do not represent future results. Investment returns and principal value will vary, and you may have a loss when you sell shares. Performance data for the Investor Shares include periods prior to the adoption of class designations on July 2, 1999, and therefore do not reflect the 0.25% per year 12b-1 fee applicable to the Investor Shares. Annual Report September 30, 1999 Berger Funds 6 - -------------------------------------------------------------------------------- BERGER INFORMATION TECHNOLOGY FUND - ------------------------------------------------------------------------- Schedule of Investments - ------------------------------------------------------------------------- September 30, 1999
- ------------------------------------------------------------------------- SHARES VALUE - ------------------------------------------------------------------------- COMMON STOCK (96.33%) COMMERCIAL - LEASING COMPANIES (0.09%) 1,220 Comdisco, Inc. $ 23,561 - ------------------------------------------------------------------------- COMPUTER - MANUFACTURERS (9.32%) 6,000 Data General Corp.* 126,375 6,800 Dell Computer Corp.* 284,325 1,500 Hewlett-Packard Co. 138,000 4,600 International Business Machines Corp. 558,325 4,795 NCR Corp.* 158,534 11,350 Sun Microsystems, Inc.* 1,055,550 - ------------------------------------------------------------------------- 2,321,109 COMPUTER - INTEGRATED SYSTEMS (0.69%) 4,000 Kronos Inc.* 146,750 600 Policy Management Systems Corp.* 18,975 330 Wind River Systems, Inc.* 6,270 - ------------------------------------------------------------------------- 171,995 COMPUTER - LOCAL NETWORKS (4.56%) 300 3Com Corp.* 8,625 11,600 Cisco Systems, Inc.* 795,325 1,000 Foundry Networks, Inc.* 126,000 10,000 Novell, Inc.* 206,875 - ------------------------------------------------------------------------- 1,136,825 COMPUTER - MAINFRAMES (1.34%) 7,400 Unisys Corp.* 333,925 - ------------------------------------------------------------------------- COMPUTER - MEMORY DEVICES (5.92%) 11,000 EMC Corp.* 785,812 8,800 Network Appliance, Inc.* 630,300 1,700 Seagate Technology, Inc.* 52,381 290 Storage Technology Corp.* 5,582 - ------------------------------------------------------------------------- 1,474,075 COMPUTER - PERIPHERAL EQUIPMENT (0.46%) 6,000 American Power Conversion Corp.* 114,000 - ------------------------------------------------------------------------- COMPUTER - SERVICES (2.69%) 2,000 Affiliated Computer Services, Inc. -Class A* 81,250 280 American Management Systems, Inc.* 7,183 4,480 Automatic Data Processing, Inc. 199,920 1,800 Ceridian Corp.* 44,775 200 Computer Horizons Corp.* 2,325 1,570 Computer Sciences Corp.* 110,390 4,255 Electronic Data Systems Corp. 225,249 - ------------------------------------------------------------------------- 671,092 COMPUTER SOFTWARE - DESKTOP (1.47%) 2,700 Microsoft Corp.* 244,518 1,100 Red Hat, Inc.* 105,600 475 Symantec Corp.* 17,085 - ------------------------------------------------------------------------- 367,203 COMPUTER SOFTWARE - EDUCATIONAL/ENTERTAINMENT (2.56%) 25,900 CBT Group PLC ADR* 637,787 - ------------------------------------------------------------------------- COMMON STOCK (96.33%) - CONTINUED COMPUTER SOFTWARE - ENTERPRISE (20.54%) 170 Adobe Systems Inc. $ 19,295 7,200 BEA Systems, Inc.* 254,250 12,250 BMC Software, Inc.* 876,640 300 Citrix Systems, Inc.* 18,581 5,300 Computer Associates International, Inc. 324,625 16,000 Compuware Corp.* 417,000 2,000 Documentum, Inc.* 43,250 1,000 E.piphany, Inc.* 48,750 593 Hyperion Solutions Corp.* 13,046 200 i2 Technologies, Inc.* 7,762 9,600 Legato Systems, Inc.* 418,500 3,600 Mercury Interactive Corp.* 232,425 15,000 New Era of Networks, Inc.* 324,375 17,100 Oracle Corp.* 778,050 7,300 Rational Software Corp.* 213,753 5,300 SAP AG ADR 200,075 17,200 Saville Systems PLC* 252,625 5,200 Siebel Systems, Inc.* 346,450 6,420 Sterling Software, Inc.* 128,400 2,600 VERITAS Software Corp.* 197,437 - ------------------------------------------------------------------------ 5,115,289 COMPUTER SOFTWARE - FINANCE (2.48%) 3,900 Advent Software, Inc.* 242,775 4,200 Intuit, Inc.* 368,156 205 Transaction Systems Architects, Inc.* 5,522 - ------------------------------------------------------------------------ 616,453 COMPUTER SOFTWARE - Security (1.21%) 21,300 Axent Technologies, Inc.* 275,568 200 Check Point Software Technologies Ltd.* 16,887 200 HNC Software Inc.* 7,937 - ------------------------------------------------------------------------ 300,392 ELECTRICAL - EQUIPMENT (0.06%) 145 Hitachi Ltd. ADR 15,823 - ------------------------------------------------------------------------ ELECTRONIC - SEMICONDUCTOR MANUFACTURING (6.93%) 3,500 Intel Corp. 260,093 9,300 LSI Logic Corp.* 478,950 8,800 Texas Instruments Inc. 723,800 4,000 Xilinx, Inc.* 262,125 - ------------------------------------------------------------------------ 1,724,968 FINANCIAL SERVICES - MISCELLANEOUS (1.59%) 9,050 First Data Corp. 397,068 - ------------------------------------------------------------------------ INTERNET - E*COMMERCE (0.70%) 5,000 PurchasePro.com, Inc.* 173,750 - ------------------------------------------------------------------------
Annual Report September 30, 1999 Berger Funds 7 - -------------------------------------------------------------------------------- BERGER INFORMATION TECHNOLOGY FUND - ------------------------------------------------------------------------ Schedule of Investments - ------------------------------------------------------------------------ September 30, 1999
- ------------------------------------------------------------------------ SHARES VALUE - ------------------------------------------------------------------------ COMMON STOCK (96.33%) - CONTINUED Internet - ISP/Content (4.61%) 4,000 America Online, Inc.* $ 416,000 4,200 At Home Corp.-Series A* 174,037 7,200 Mindspring Enterprises, Inc.* 199,350 2,000 Yahoo, Inc.* 359,000 - ------------------------------------------------------------------------ 1,148,387 INTERNET - NETWORK SECURITY/SOLUTIONS (2.13%) 2,400 Alteon Websystems, Inc.* 225,600 1,000 Inktomi Corp.* 120,031 4,800 Network Associates, Inc.* 91,800 1,000 Sapient Corp.* 94,250 - ------------------------------------------------------------------------ 531,681 INTERNET - SOFTWARE (2.92%) 4,000 Active Software, Inc.* 95,750 9,900 Bluestone Software, Inc.* 228,937 5,000 Kana Communications, Inc.* 249,375 4,700 SilverStream Software, Inc.* 146,287 200 Vitria Technology, Inc.* 7,350 - ------------------------------------------------------------------------ 727,699 MEDIA - CABLE TV (1.57%) 4,100 Cox Communications, Inc.* 171,175 6,000 Telewest Communications PLC ADR* 219,000 - ------------------------------------------------------------------------ 390,175 MEDIA - RADIO/TV (1.74%) 8,800 AT&T Corp. - Liberty Media Group* 326,700 2,480 Viacom Inc. - Class A* 107,260 - ------------------------------------------------------------------------ 433,960 OFFICE EQUIPMENT - EQUIPMENT & AUTOMATION (0.35%) 2,070 Xerox Corp. 86,810 - ------------------------------------------------------------------------ TELECOMMUNICATIONS - CELLULAR (2.79%) 3,200 Orange PLC ADR* 318,400 800 Vodafone Airtouch PLC 190,200 3,000 VoiceStream Wireless Corp.* 185,156 - ------------------------------------------------------------------------ 693,756 TELECOMMUNICATIONS - EQUIPMENT (9.94%) 4,900 ADC Telecommunications Inc.* 205,511 2,300 Comverse Technology, Inc.* 216,918 6,500 General Instrument Corp.* 312,812 9,750 Lucent Technologies, Inc. 632,531 4,000 Motorola, Inc. 352,000 4,000 Nokia Oyj Corp. ADR 359,250 4,440 Nortel Networks Corp. 226,440 460 Telefonaktiebolaget LM Ericsson - Series B 14,375 2,700 Tellabs, Inc.* 153,731 - ------------------------------------------------------------------------ 2,473,568 - ------------------------------------------------------------------------ SHARES/PAR VALUE VALUE - ------------------------------------------------------------------------ COMMON STOCK (96.33%) - CONTINUED TELECOMMUNICATIONS - SERVICES (6.27%) 4,550 MCI WorldCom, Inc.* $ 327,031 6,600 Nextel Communications, Inc.* 447,562 1,000 Nextlink Communications, Inc.* 51,843 11,000 Teligent, Inc. - Class A* 546,562 4,800 Winstar Communications, Inc.* 187,500 - ------------------------------------------------------------------------ 1,560,498 UTILITY - TELEPHONE (1.40%) 6,100 U S WEST, Inc. 348,081 Total Common Stock (cost $16,217,179) 23,989,930 - ------------------------------------------------------------------------ REPURCHASE AGREEMENT (2.78%) $693,000 State Street Repurchase Agreement, 4.85%, dated September 30, 1999, to be repurchased at $693,093 on October 1, 1999, collateralized by FNMA Agency Note, 6.0% - July 16, 2001, with a value of $708,737 693,000 Total Repurchase Agreement (cost $693,000) 693,000 Total Investments (cost $16,910,179) (99.11%) 24,682,930 Total Other Assets, Less Liabilities (0.89%) 221,838 Net Assets (100.00%) $ 24,904,768 - ------------------------------------------------------------------------
* Non-income producing security. PLC - Public Limited Company. ADR - American Depositary Receipt. See notes to financial statements. Berger Funds September 30, 1999 Annual Report 8 - -------------------------------------------------------------------------------- BERGER NEW GENERATION FUND Ticker Symbol - Investor Shares BENGX - Institutional Shares N/A Fund Number - Investor Shares 344 - Institutional Shares 914 PORTFOLIO MANAGER COMMENTARY MARK S. SUNDERHUSE PERFORMANCE The Berger New Generation Fund (the "Fund") had an outstanding year, registering a total return of 110.82%(1) (Investor Shares) and 110.98%(1) (Institutional Shares) for the 12 months ended September 30, 1999. This significantly outpaced the 27.80% gain for the Standard & Poor's (S&P) 500 Index(2) and the 19.07% gain for the Russell 2000 Index(3) for the same period. YEAR IN REVIEW After taking over the Fund in February 1999, we have positioned the Fund in sectors and industries that buffered it from the market doldrums of the last quarter, which greatly enhanced our return over the year. In all sectors, we continue to look for innovative companies with superior management skills, financial strength and a definitive business plan with measurable milestones. Our emphasis on technology has served shareholders well. More than half of total Fund assets have been invested in technology stocks since the Fund's fiscal year began. But, unlike some other aggressive growth funds, we look for potentially high-growth technology companies across all industries in order to broaden and diversify our Fund's technology reach. There are valuable technologies to be found in energy, healthcare and other sectors. New technologies in the steel industry, for example, make the metal harden faster and resist corrosion better. We try to avoid what we call "commodity" technologies. These are technologies that can easily be duplicated allowing competition to drive prices down. Memory chips, for example, are a commodity technology. Within the technology sector, we've seen very strong performance from telecommunications equipment firms, telecommunications service providers and semiconductor companies that produce communication chips. Key contributors over the year included At Home, Citrix Systems and Sun Microsystems. In the Internet arena, we bought very selectively during the year. Although the Internet is here to stay, not every Internet company is. We have focused on what we call the Internet enablers, which are companies that make the technologies that enable the Internet to work. We look for companies that we believe will own their share of the market in the future. In the "dot-com" area, we also selectively seek companies that can achieve market leadership and dominate their market over the next few years. This includes eBay, which provides on-line auctions, and eToys, an on-line retailer of toys. We also saw strong performance in the energy sector. On September 30, 1999, we had 12.1% of Fund net assets invested in energy compared with 1.4% a year earlier. One stock that contributed to performance is the natural gas exploration and transportation company, Western Gas Resources. Another area of strong performance was in the healthcare sector. The Laser Vision Center, a laser vision correction company, and Guidant, a medical device company, boosted Fund performance. Another strong performer during this year has been Genentech, a biotechnology firm that has a strong product pipeline. Initial public offerings (IPO's) also made a positive contribution to the Fund's performance during the year, although it is unclear whether this market for IPO's will continue into next year. LOOKING AHEAD We're cautiously optimistic about the economy and the market going forward. Investors today are very knowledgeable about the market and much more comfortable being in it. We think that means investment capital will continue to flow into and fuel the market. We believe the final quarter of the year will continue to be one of uncertainty. However, we see investment opportunity in the U.S. and internationally once we enter the year 2000, especially for software companies that have languished recently. We've already seen some recovery in the stocks of these companies, and we believe this will continue after the new year. 1. Past performance does not guarantee future results. 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. 2. The S&P 500 Index is an unmanaged index, with dividends reinvested, which consists of the common stocks of 500 publicly traded U.S. companies. It is a generally recognized indicator used to measure overall performance of the U.S. stock market. One cannot invest directly in an index. 3. The Russell 2000 Index is an unmanaged index, with dividends reinvested, which consists of the common stocks of 2000 U.S. companies. It is a generally recognized indicator used to measure overall performance of small company stocks. One cannot invest directly in an index. Annual Report September 30, 1999 Berger Funds 9 - -------------------------------------------------------------------------------- BERGER NEW GENERATION FUND - -------------------------------------------------------------------------------- PERFORMANCE OVERVIEW - -------------------------------------------------------------------------------- INVESTOR SHARES - --------------- COMPARISON OF CHANGE IN VALUE OF BERGER NEW GENERATION FUND; INVESTOR SHARES VS. S&P 500 INDEX AND COST OF LIVING INDEX
Berger New Generation Fund; S&P 500 Cost of Investor Shares Index Living Index 3/29/96 $10,000 $10,000 $10,000 9/30/96 $11,820 $10,791 $10,135 3/31/97 $9,643 $12,004 $10,276 9/30/97 $15,547 $15,153 $10,353 3/31/98 $16,286 $17,762 $10,417 9/30/98 $13,371 $16,526 $10,507 3/31/99 $19,931 $21,041 $10,597 9/30/99 $28,190 $21,119 $10,732
BERGER NEW GENERATION FUND; INVESTOR SHARES* AVERAGE ANNUAL TOTAL RETURN
As of September 30, 1999 - --------------------------------------- 1 Year 110.82% Life of Fund 34.35% (3/29/96)
INSTITUTIONAL SHARES - -------------------- COMPARISON OF CHANGE IN VALUE OF BERGER NEW GENERATION FUND; INSTITUTIONAL SHARES VS. S&P 500 INDEX AND COST OF LIVING INDEX
Berger New Generation Fund; S&P 500 Cost of Investor Shares Index Living Index 3/29/96 $250,000 $250,000 $250,000 9/30/96 $295,500 $269,769 $253,372 3/31/97 $241,076 $300,092 $256,904 9/30/97 $388,679 $378,833 $258,831 3/31/98 $407,162 $444,049 $260,437 9/30/98 $334,285 $413,147 $262,685 3/31/99 $498,268 $526,025 $264,933 9/30/99 $705,287 $527,966 $268,304
BERGER NEW GENERATION FUND; INSTITUTIONAL SHARES* AVERAGE ANNUAL TOTAL RETURN
As of September 30, 1999 - ------------------------------------- 1 Year 110.98% Life of Fund 34.38% (3/29/96)
*PERFORMANCE FIGURES ARE HISTORICAL AND DO NOT REPRESENT FUTURE RESULTS. INVESTMENT RETURNS AND PRINCIPAL VALUE WILL VARY, AND YOU MAY HAVE A LOSS WHEN YOU SELL SHARES. Berger Funds September 30, 1999 Annual Report 10 - -------------------------------------------------------------------------------- BERGER NEW GENERATION FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS - -------------------------------------------------------------------------------- September 30, 1999
- ------------------------------------------------------------------------ SHARES VALUE - ------------------------------------------------------------------------ COMMON STOCK (97.88%) BANKS - WEST/SOUTHWEST (0.33%) 45,000 Silicon Valley Bancshares* $ 1,085,625 - ------------------------------------------------------------------------ BUILDING - HEAVY CONSTRUCTION (1.14%) 90,000 Dycom Industries, Inc.* 3,796,875 - ------------------------------------------------------------------------ COMMERCIAL SERVICES - ADVERTISING (1.74%) 67,500 Lamar Advertising Co. - Class A* 3,341,250 40,000 Tmp Worldwide, Inc.* 2,435,000 - ------------------------------------------------------------------------ 5,776,250 COMMERCIAL SERVICES - MISCELLANEOUS (2.13%) 72,500 Paychex, Inc. 2,474,062 75,000 Profit Recovery Group International, Inc.* 3,346,875 50,000 Sykes Enterprises, Inc. 1,234,375 - ------------------------------------------------------------------------ 7,055,312 COMPUTER - LOCAL NETWORKS (0.83%) 40,000 Cisco Systems, Inc.* 2,742,500 - ------------------------------------------------------------------------ COMPUTER - MANUFACTURERS (1.82%) 65,000 Sun Microsystems, Inc.* 6,045,000 - ------------------------------------------------------------------------ COMPUTER - MEMORY DEVICES (0.86%) 40,000 EMC Corp.* 2,857,500 - ------------------------------------------------------------------------ COMPUTER - SERVICES (2.64%) 75,000 Fiserv, Inc.* 2,437,500 141,700 IMS Health, Inc. 3,232,531 44,000 Internap Network Services Corp.* 1,963,500 80,000 Technology Solutions Co.* 1,130,000 - ------------------------------------------------------------------------ 8,763,531 COMPUTER SOFTWARE - DESKTOP (0.50%) 21,000 Gemstar International Group Ltd.* 1,640,625 - ------------------------------------------------------------------------ COMPUTER SOFTWARE - EDUCATIONAL/ENTERTAINMENT (0.37%) 50,000 CBT Group PLC ADR* 1,231,250 - ------------------------------------------------------------------------ COMPUTER SOFTWARE - ENTERPRISE (6.13%) 85,000 Citrix Systems, Inc.* 5,264,687 13,000 E.piphany, Inc.* 633,750 250,100 New Era of Networks, Inc.* 5,408,412 90,000 SalesLogix Corp.* 1,800,000 70,000 TSI International Software Ltd.* 1,898,750 70,000 VERITAS Software Corp.* 5,315,625 - ------------------------------------------------------------------------ 20,321,224 ELECTRICAL - MILITARY SYSTEMS (1.55%) 89,900 General Motors Corp. - Class H* 5,146,775 - ------------------------------------------------------------------------ ELECTRONIC - LASER SYSTEM/COMPONENT (2.11%) 50,000 Cymer, Inc.* 1,734,375 30,000 Electro Scientific Industries, Inc.* 1,598,437 260,000 Laser Vision Centers, Inc.* 3,648,125 - ------------------------------------------------------------------------ 6,980,937 COMMON STOCK (97.88%) - CONTINUED ELECTRONIC - MISCELLANEOUS COMPONENTS (1.68%) 80,000 RF Micro Devices, Inc.* $ 3,660,000 55,000 Sawtek, Inc.* 1,925,000 - ------------------------------------------------------------------------ 5,585,000 ELECTRONIC - SEMICONDUCTOR EQUIPMENT (2.11%) 45,000 Applied Materials, Inc.* 3,504,375 50,000 Asyst Technologies, Inc.* 1,650,000 30,000 Lam Research Corp.* 1,830,000 - ------------------------------------------------------------------------ 6,984,375 ELECTRONIC - SEMICONDUCTOR MANUFACTURING (7.00%) 120,000 Applied Micro Circuits Corp.* 6,840,000 90,000 Conexant Systems, Inc.* 6,539,062 30,700 Helix Technology Corp. 1,020,775 40,000 SDL Corp.* 3,052,500 45,000 Vitesse Semiconductors Corp.* 3,841,875 70,000 Zoran Corp.* 1,898,750 - ------------------------------------------------------------------------ 23,192,962 ELECTRONIC PRODUCTS - MISCELLANEOUS (1.14%) 60,000 Powerwave Technologies, Inc.* 2,893,125 40,000 Three-Five Systems, Inc.* 885,000 - ------------------------------------------------------------------------ 3,778,125 FINANCE - INVESTMENT BANKERS (0.95%) 106,000 Knight/Trimark Group, Inc.* 3,140,250 - ------------------------------------------------------------------------ FINANCE - SAVINGS & LOANS (0.13%) 22,000 Commercial Federal Corp. 431,750 - ------------------------------------------------------------------------ FINANCIAL SERVICES - MISCELLANEOUS (0.89%) 142,500 Concord EFS, Inc.* 2,939,062 - ------------------------------------------------------------------------ INSURANCE - PROPERTY/CASUALTY/TITLE (0.51%) 100,000 The MIIX Group, Inc. 1,693,750 - ------------------------------------------------------------------------ INTERNET - E*COMMERCE (3.97%) 40,000 Amazon.com, Inc.* 3,197,500 24,900 CareInsite, Inc.* 1,260,562 20,000 eBay, Inc.* 2,821,250 64,900 eToys, Inc.* 4,319,906 63,700 NextCard, Inc.* 1,560,650 - ------------------------------------------------------------------------ 13,159,868 INTERNET - ISP/CONTENT (4.79%) 135,400 At Home Corp. - Series A* 5,610,637 105,700 drkoop.com, Inc.* 1,499,618 40,900 High Speed Access Corp.* 938,143 26,900 Homestore.Com, Inc.* 1,121,393 20,000 InterVU Inc.* 742,500 46,400 NetZero, Inc.* 1,206,400 34,500 Rhythms NetConnections Inc.* 1,190,250 95,000 SoftNet Systems, Inc.* 2,315,625 40,000 Verio, Inc.* 1,240,000 - ------------------------------------------------------------------------ 15,864,566
Annual Report September 30, 1999 Berger Funds 11 - -------------------------------------------------------------------------------- BERGER NEW GENERATION FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS - -------------------------------------------------------------------------------- September 30, 1999
- ------------------------------------------------------------------------ SHARES VALUE - ------------------------------------------------------------------------ COMMON STOCK (97.88%) - CONTINUED INTERNET - NETWORK SECURITY/SOLUTIONS (5.95%) 8,400 eGain Communications Corp.* $ 155,400 23,000 Inktomi Corp.* 2,760,718 22,900 Juniper Networks, Inc.* 4,190,700 38,200 Keynote Systems, Inc.* 955,000 44,000 RADWARE Ltd.* 1,210,000 100,000 Spyglass, Inc.* 1,250,000 50,000 Tumbleweed Communications Corp.* 1,337,500 105,000 USWeb Corp.* 3,602,812 40,000 VeriSign, Inc.* 4,260,000 - ------------------------------------------------------------------------ 19,722,130 INTERNET - SOFTWARE (4.82%) 30,000 CMGI Inc.* 3,075,000 37,100 Digital Insight Corp.* 556,500 49,300 Liquid Audio, Inc.* 1,824,100 30,050 Phone.com, Inc.* 4,552,575 43,000 Quest Software, Inc.* 1,999,500 54,400 SilverStream Software, Inc.* 1,693,200 52,600 Software.com, Inc.* 2,255,225 - ------------------------------------------------------------------------ 15,956,100 LEISURE - SERVICES (0.90%) 45,000 Cheap Tickets, Inc.* 1,456,875 50,000 SFX Entertainment, Inc.* 1,525,000 - ------------------------------------------------------------------------ 2,981,875 MEDIA - CABLE TV (1.83%) 38,200 Comcast Corp. - Class A 1,377,587 38,200 Comcast Corp. - Special Class A 1,523,225 29,600 EchoStar Communications Corp.* 2,688,050 16,200 Insight Communications Company, Inc. - Class A* 463,725 - ------------------------------------------------------------------------ 6,052,587 MEDIA - RADIO/TV (5.04%) 50,000 AMFM Inc.* 3,043,750 219,644 AT&T Corp. - Liberty Media Group* 8,154,283 44,719 Clear Channel Communications, Inc.* 3,571,933 75,700 Salem Communications Corp.* 1,930,350 - ------------------------------------------------------------------------ 16,700,316 MEDICAL - BIOMED/GENETICS (1.56%) 35,200 Genentech, Inc.* 5,150,200 - ------------------------------------------------------------------------ MEDICAL - ETHICAL DRUGS (1.48%) 95,500 Catalytica, Inc.* 1,432,500 85,000 Pharmacyclics, Inc.* 3,474,375 - ------------------------------------------------------------------------ 4,906,875 MEDICAL - GENERIC DRUGS (1.59%) 62,000 Mylan Laboratories, Inc. 1,139,250 135,000 Watson Pharmaceuticals, Inc.* 4,125,952 - ------------------------------------------------------------------------ 5,265,202 COMMON STOCK (97.88%) - CONTINUED Medical - Instruments (1.82%) 150,000 Eclipse Surgical Tech, Inc.* $ 2,475,000 80,000 Novoste Corp.* 1,427,500 125,000 Ventana Medical Systems, Inc.* 2,125,000 - ------------------------------------------------------------------------ 6,027,500 MEDICAL - MEDICAL/DENTAL SERVICES (2.51%) 107,800 Accredo Health, Inc.* 3,395,700 200,000 TLC The Laser Center Inc.* 4,925,000 - ------------------------------------------------------------------------ 8,320,700 MEDICAL - PRODUCTS (1.79%) 85,000 Guidant Corp.* 4,558,125 100,000 Lifecore Biomedical, Inc.* 1,375,000 - ------------------------------------------------------------------------ 5,933,125 MEDICAL - WHOLESALE DRUG/SUNDRIES (0.86%) 179,900 Allscripts, Inc.* 2,855,912 - ------------------------------------------------------------------------ OIL & GAS - DRILLING (2.23%) 190,000 Global Marine* 3,123,125 152,000 Marine Drilling Cos.* 2,403,500 80,000 Precision Drilling Corp.* 1,855,000 - ------------------------------------------------------------------------ 7,381,625 OIL & GAS - FIELD SERVICES (0.42%) 43,300 BJ Services Co.* 1,377,481 - ------------------------------------------------------------------------ OIL & GAS - U.S. EXPLORATION & PRODUCTION (7.77%) 30,000 Apache Corp. 1,295,625 96,000 Barrett Resources Corp.* 3,546,000 143,000 Basin Exploration, Inc.* 3,432,000 58,999 Devon Energy Corp. 2,444,771 124,100 Evergreen Resources, Inc.* 2,986,156 70,000 Forest Oil Corp.* 1,194,375 175,000 Louis Dreyfus Natural Gas Corp.* 3,751,562 75,000 Newfield Exploration Co.* 2,470,312 150,000 Pennaco Energy, Inc.* 1,828,125 207,500 Vintage Petroleum, Inc. 2,801,250 - ------------------------------------------------------------------------ 25,750,176 OIL & GAS - U.S. INTEGRATED (0.91%) 200,000 TransMontaigne Inc.* 3,000,000 - ------------------------------------------------------------------------ OIL & GAS PRODUCTION/PIPELINE (0.79%) 140,000 Western Gas Resources, Inc. 2,616,250 - ------------------------------------------------------------------------ RETAIL - APPAREL/SHOE (0.68%) 55,000 Ann Taylor Stores, Inc.* 2,248,125 - ------------------------------------------------------------------------ RETAIL - MAIL ORDER & DIRECT (0.50%) 25,000 Lands' End, Inc.* 1,650,000 - ------------------------------------------------------------------------ RETAIL - MISCELLANEOUS DIVERSIFIED (0.25%) 75,000 Sharper Image Corp.* 825,000 - ------------------------------------------------------------------------ RETAIL - RESTAURANTS (0.58%) 78,000 Starbucks Corp.* 1,932,937 - ------------------------------------------------------------------------
Berger Funds September 30, 1999 Annual Report 12 - -------------------------------------------------------------------------------- BERGER NEW GENERATION FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS - -------------------------------------------------------------------------------- September 30, 1999
- ------------------------------------------------------------------------ SHARES VALUE - ------------------------------------------------------------------------ COMMON STOCK (97.88%) - CONTINUED RETAIL - SUPER/MINI-MARKETS (0.10%) 10,000 Whole Foods Market, Inc.* $ 327,187 - ------------------------------------------------------------------------ TELECOMMUNICATIONS - CELLULAR (0.75%) 40,000 VoiceStream Wireless Corp.* 2,468,750 - ------------------------------------------------------------------------ TELECOMMUNICATIONS - EQUIPMENT (3.29%) 47,000 American Tower Corp.* 919,437 50,000 Aware, Inc.* 1,434,375 41,800 Catapult Communications Corp.* 647,900 95,000 Crown Castle International Corp.* 1,778,281 22,000 JDS Uniphase Corp.* 2,503,875 40,200 Lucent Technologies, Inc. 2,607,975 20,000 Scientific-Atlanta, Inc. 991,250 - ------------------------------------------------------------------------ 10,883,093 TELECOMMUNICATIONS - SERVICES (3.39%) 133,100 CapRock Communications Corp.* 3,094,575 38,152 Global Crossing Ltd.* 1,011,028 80,000 ITC DeltaCom, Inc.* 2,200,000 115,000 Qwest Communications International, Inc.* 3,399,687 20,000 Teligent, Inc. - Class A* 993,750 25,700 Time Warner Telecom Inc.* 536,487 - ------------------------------------------------------------------------ 11,235,527 UTILITY - WATER SUPPLY (0.75%) 145,000 Azurix Corp.* 2,492,187 Total Common Stock (cost $251,689,647) 324,273,972 - ------------------------------------------------------------------------ September 30, 1999 - ------------------------------------------------------------------------ PAR VALUE VALUE - ------------------------------------------------------------------------ REPURCHASE AGREEMENT (1.19%) $3,922,000 State Street Repurchase Agreement, 4.85% dated September 30, 1999, to be repurchased at $3,922,528 on October 1, 1999, collateralized by FNMA Agency Note, 5.25% - January 10, 2001 with a value of $4,000,605 $ 3,922,000 Total Repurchase Agreement (cost $3,922,000) 3,922,000 Total Investments (cost $255,611,647) (99.07%) 328,195,972 Total Other Assets, Less Liabilities (0.93%) 3,088,688 Net Assets (100.00%) $331,284,660 - ------------------------------------------------------------------------
* Non-income producing security. PLC- Public Limited Company. ADR- American Depositary Receipt. See notes to financial statements. Annual Report September 30, 1999 Berger Funds 13 - ------------------------------------------------------------------------------- [PHOTO] BERGER SELECT FUND Ticker Symbol - BESLX Fund Number - 214 - ------------------------------------------------------------------------------- JOHN B. JARES, TINO R. SELLITTO, PORTFOLIO MANAGER COMMENTARY AMY K. SELNER, MARK S. SUNDERHUSE - ------------------------------------------------------------------------------- PERFORMANCE The Berger Select Fund (the "Fund") had a total return of 53.06%(1) for the year ended September 30, 1999, which significantly outperformed the 27.80% return of the Standard & Poor's (S&P) 500 Index,(2) for the year. Our Fund focuses on growth companies of all market cap sizes. We take larger positions in a smaller number of stocks, generally holding a core portfolio of 20 to 30 stocks. We select stocks using investment ideas that are considered to be the best of Berger--ideas about companies that we believe have the best opportunity and potential to outperform their peers and the market. YEAR IN REVIEW Among the key reasons why our Fund nearly doubled the return of the S&P 500 Index this past year was our stock selection in the technology and energy sectors. We started focusing on the energy sector mid first quarter 1999 and held a strong position in this sector in the quarter ended September 30. Although energy stocks were down during that quarter, they delivered a solid, positive return year-to-date. We believe that there are very strong fundamentals in energy. Oil prices have gone up because of a decrease in oil production and an increase in demand attributable to recovering world economies. We continue to like the growth potential in the energy sector and in energy companies such as ENSCO International and Burlington Resources. Over the year, we substantially increased our weighting in technology--from 27% of Fund net assets on September 30, 1998, to 55% one year later. This heavy weighting boosted Fund performance, particularly during the quarter ended September 30, 1999, when technology stock prices continued on the upward trend that began in June. We believe in the long-term prospects for technology. We remain convinced that growth prospects for the Internet infrastructure are explosive, and we continue to focus on telecommunication and broadband companies. These companies provide the plumbing that enables broad acceptance of Internet applications and services. The Fund benefited from strong performances over the year by technology leaders such as Juniper Networks, Motorola and Cisco Systems. Healthcare is our second largest sector, making up just over 12% of our Fund's total portfolio. Genentech, a biotechnology company, aided fund performance. We believe that this firm has a strong product pipeline and bright prospects for future growth. Among other Fund sectors, the financial sector significantly underperformed. One stock that turned in particularly disappointing results was Charles Schwab. Schwab's decline was primarily due to the market's short-term investor concerns about rising interest rates and year 2000 issues. We believe that the long-term prospects for Schwab are positive, however, and we look for the company to excel in 2000. Initial public offerings (IPO's) also made a positive contribution to the Fund's performance during the year, although it is unclear whether this market for IPO's will continue into next year. LOOKING AHEAD We expect near-term market volatility for two reasons. First, rising interest rates continue to nag the equity market. Second, investors are still somewhat concerned that there will be problems during the transition to the year 2000. As a result of these factors, investors may once again gravitate toward large cap companies, which they perceive to be safer and more stable investments in bumpy markets. Over the long term, however, robust U.S. economic growth and the continuing recovery of international economies should provide a solid backdrop for strong corporate earnings. 1. Performance figures are based on historical results and are not intended to be indicative of future 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. 2. The S&P 500 Index is an unmanaged index, with dividends reinvested, which consists of the common stocks of 500 publicly traded U.S. companies. It is a generally recognized indicator used to measure overall performance of the U.S. stock market. One cannot invest directly in an index. Berger Funds September 30, 1999 Annual Report 14 - ------------------------------------------------------------------------------- BERGER SELECT FUND - ------------------------------------------------------------------------------- PERFORMANCE OVERVIEW - ------------------------------------------------------------------------------- COMPARISON OF CHANGE IN VALUE OF BERGER SELECT FUND VS. S&P 500 INDEX AND COST OF LIVING INDEX [GRAPH]
Cost of Berger S&P 500 Living Select Fund Index Index 12/31/97 $10,000 $10,000 $10,000 3/31/98 $13,710 $11,394 $10,056 6/30/98 $14,220 $11,770 $10,105 9/30/98 $13,260 $10,601 $10,143 12/31/98 $17,226 $12,857 $10,161 3/31/99 $18,475 $13,498 $10,229 6/30/99 $20,719 $14,449 $10,304 9/30/99 $20,296 $13,548 $10,360
BERGER SELECT FUND* AVERAGE ANNUAL TOTAL RETURN As of September 30, 1999 - ---------------------------------------- 1 Year 53.06% -- Life Fund 49.85% (12/31/97) *Performance figures are historical and do not represent future results. Investment returns and principal value will vary, and you may have a loss when you sell shares.
- ------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS - ------------------------------------------------------------------------------- September 30, 1999 - ------------------------------------------------------------------------------- SHARES VALUE - ------------------------------------------------------------------------------- COMMON STOCK (99.37%) BEVERAGE - SOFT DRINKS (3.03%) 180,100 The Pepsi Bottling Group, Inc. $ 3,072,956 - ------------------------------------------------------------------------------- COMMERCIAL SERVICES - ADVERTISING (3.91%) 80,000 Lamar Advertising Co.* 3,960,000 - ------------------------------------------------------------------------------- COMPUTER - LOCAL NETWORKS (5.41%) 80,000 Cisco Systems, Inc.* 5,485,000 - ------------------------------------------------------------------------------- COMPUTER - SERVICES (3.38%) 150,000 IMS Health, Inc. 3,421,875 - ------------------------------------------------------------------------------- COMPUTER SOFTWARE - DESKTOP (1.79%) 20,000 Microsoft Corp.* 1,811,250 - ------------------------------------------------------------------------------- COMPUTER SOFTWARE - ENTERPRISE (4.98%) 72,000 J.D. Edwards & Co.* 1,491,750 164,400 New Era of Networks, Inc.* 3,555,150 - ------------------------------------------------------------------------------- 5,046,900 ELECTRONIC - SEMICONDUCTOR EQUIPMENT (2.41%) 40,000 Lam Research Corp.* 2,440,000 - ------------------------------------------------------------------------------- ELECTRONIC - SEMICONDUCTOR MANUFACTURING (3.79%) 45,000 Vitesse Semiconductors Corp.* 3,841,875 - ------------------------------------------------------------------------------- FINANCE - INVESTMENT BANKERS (1.86%) 56,000 Charles Schwab Corp. 1,886,500 - ------------------------------------------------------------------------------- COMMON STOCK (99.37%) - CONTINUED FINANCIAL SERVICES - MISCELLANEOUS (4.15%) 204,000 Concord EFS, Inc.* $ 4,207,500 - ------------------------------------------------------------------------------- INTERNET - ISP/CONTENT (4.10%) 40,000 America Online, Inc.* 4,160,000 - ------------------------------------------------------------------------------- INTERNET - NETWORK SECURITY/SOLUTIONS (9.66%) 23,500 Juniper Networks, Inc.* 4,300,500 160,000 USWeb Corp.* 5,490,000 - ------------------------------------------------------------------------------- 9,790,500 INTERNET - SOFTWARE (5.37%) 53,100 CMGI Inc.* 5,442,750 - ------------------------------------------------------------------------------- LEISURE - SERVICES (5.93%) 133,600 Royal Caribbean Cruises Ltd. 6,012,000 - ------------------------------------------------------------------------------- MEDIA - RADIO/TV (5.30%) 35,000 AMFM Inc.* 2,130,625 40,600 Clear Channel Communications, Inc.* 3,242,925 - ------------------------------------------------------------------------------- 5,373,550 MEDICAL - BIOMED/GENETICS (6.47%) 44,800 Genentech, Inc.* 6,554,800 - ------------------------------------------------------------------------------- MEDICAL - MEDICAL/DENTAL SERVICES (3.04%) 125,200 TLC The Laser Center Inc.* 3,083,050
Annual Report September 30, 1999 Berger Funds 15 - ------------------------------------------------------------------------------- BERGER SELECT FUND
- ------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS - ------------------------------------------------------------------------------- September 30, 1999 - ------------------------------------------------------------------------------- SHARES VALUE - ------------------------------------------------------------------------------- COMMON STOCK (99.37%) - CONTINUED MEDICAL - PRODUCTS (2.01%) 38,000 Guidant Corp.* $ 2,037,750 - ------------------------------------------------------------------------------- OIL & GAS - DRILLING (4.19%) 235,000 ENSCO International Inc. 4,244,687 - ------------------------------------------------------------------------------- OIL & GAS - U.S. EXPLORATION & PRODUCTION (2.90%) 80,000 Burlington Resources Inc. 2,940,000 - ------------------------------------------------------------------------------- RETAIL - CONSUMER ELECTRONICS (1.53%) 25,000 Best Buy Co., Inc.* 1,551,564 - ------------------------------------------------------------------------------- TELECOMMUNICATIONS - EQUIPMENT (9.99%) 69,200 Motorola, Inc. 6,089,600 37,400 Redback Networks Inc.* 4,039,200 - ------------------------------------------------------------------------------- 10,128,800 TELECOMMUNICATIONS - SERVICES (4.17%) 105,900 CapRock Communications Corp.* 2,462,175 24,500 MCI WorldCom, Inc.* 1,760,937 - ------------------------------------------------------------------------------- 4,223,112 Total Common Stock (cost $92,484,952) 100,716,419 - ------------------------------------------------------------------------------- PAR VALUE VALUE - ------------------------------------------------------------------------------- REPURCHASE AGREEMENT (0.33%) $331,000 State Street Repurchase Agreement, 4.85% dated September 30, 1999 to be repurchased at $331,045 on October 1, 1999, collateralized by FNMA Agency Note, 5.20% - May 6, 2000, with a value of $339,481 $ 331,000 Total Repurchase Agreement (cost $331,000) 331,000 Total Investments (cost $92,815,952) (99.70%) 101,047,419 Total Other Assets, Less Liabilities (0.30%) 304,240 Net Assets (100.00%) $101,351,659 - -------------------------------------------------------------------------------
* Non-income producing security. See notes to financial statements. Berger Funds September 30, 1999 Annual Report 16 - ------------------------------------------------------------------------------- [PHOTO] BERGER SMALL COMPANY GROWTH FUND Ticker Symbol - Investor Shares BESCX - Institutional Shares N/A Fund Number - Investor Shares 345 - Institutional Shares 915 - ------------------------------------------------------------------------------- PORTFOLIO MANAGER COMMENTARY AMY K. SELNER - ------------------------------------------------------------------------------- PERFORMANCE For the fiscal year ended September 30, 1999, the Berger Small Company Growth Fund (the "Fund") had a total return of 62.78%(1) (Investor Shares). This significantly outdistanced the gains registered by the Russell 2000 Index(2) and the Russell 2000 Growth Index(3), which were 19.07% and 32.63%, respectively over this time period. Just eight days into this fiscal year, small cap stocks, which had languished in a bear market, staged an impressive rebound that lasted through the fourth quarter 1998. Technology stocks led the way. As a group, small cap stocks performed in step with large cap stocks from October 8, 1998 until mid-January 1999 when interest rate fears crept into the marketplace. Small caps then dramatically underperformed large caps through March. Between April and June, small caps (as measured by the Russell 2000) outperformed large caps (as measured by the S&P 500 Index(4)) by nearly 8%. This was the best quarterly outperformance of small caps since the fourth quarter 1992 and was attributable to the more attractive relative valuations of small caps compared to large caps after a very difficult first quarter 1999. In the quarter ended September 30, the stock market faltered on renewed interest rate fears, and both small and large cap stocks performed poorly. YEAR IN REVIEW Despite this up and down year for small cap stocks, our Fund was able to considerably outperform its benchmarks mainly due to stock selection. The Fund remains heavily weighted in industries where growth prospects are the most visible and consistent. Technology, our largest sector, continues to have the greatest long-term growth fundamentals. We believe that the growth prospects are explosive for the Internet infrastructure in particular. Therefore, we continue to focus on telecommunication and broadband companies, which provide the plumbing that enables broad acceptance of Internet applications and services. Similarly, companies such as Powerwave Technologies, which supplies components for wireless communications, have been strong holdings. We have seen a pick-up in the information technology services group. We believe some large contract orders for the Internet-related companies may revive this Y2K depressed group. Semiconductor stocks continued to show solid revenue growth and improving Asian economies should help sustain this trend. Our Fund lowered it exposure to the healthcare group over this fiscal year. Uncertainty surrounding prescription drug benefits and the government's impact on drug pricing kept a lid on these stocks. One bright spot in the sector was biotechnology stocks. Emerging biotechnology companies such as Biocryst Pharmaceutical and Cephalon boosted Fund performance. Our energy weighting contributed to the Fund's outperformance in the first six months of 1999. Although there are worries that OPEC will irrationally increase oil production, we remain positive on the long-term supply/demand fundamentals within the sector. Within the consumer group, radio stocks continue to be solid performers. The environment for radio advertising was robust in 1999, and we expect this group's strong fundamentals to carry into next year. LOOKING AHEAD Going forward, we continue to favor the technology sector, particularly the telecommunication and broadband infrastructure companies that support the Internet. We recognize that the fear of Y2K slowdown within the enterprise software group is probably fully discounted and we believe that the Internet-enabler software companies, which are companies that make the technologies that enable the Internet to work, will be strong performers into next year. We expect semiconductors to continue their strong fundamentals into next year as well. We remain cautiously optimistic about the market as we enter the final quarter of 1999. The U.S. economy is undeniably robust and international economies are picking up. We expect productivity to continue to grow and to fuel low inflationary growth into 2000. The Federal Reserve Board left interest rates unchanged at their early October meeting. But, if inflation picks up, the Fed may raise rates again. However, inflation fears have been stemmed year to date. We would need to see a period of greater operating profit growth for small caps in order for them to outperform their large cap peers. We believe our bias towards technology will be beneficial as we enter year 2000. Global economies appear to be strengthening in concert, which will benefit technology stocks since they often garner over 50% of earnings internationally. (1.) Past performance does not guarantee future results. 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. (2.) The Russell 2000 Index is an unmanaged index, with dividends reinvested, which consists of the common stocks of 2000 U.S. companies. It is a generally recognized indicator used to measure overall performance of small company stocks. One cannot invest directly in an index. (3.) The Russell 2000 Growth Index is an unmanaged index, with dividends reinvested, which consists of common growth stocks included in the Russell 2000 Index. Companies in this index tend to exhibit higher price-to-book and price-earnings ratios. It is a generally recognized indicator used to measure overall small company growth stock performance in the U.S. stock market. One cannot invest directly in an index. (4.) The S&P 500 Index is an unmanaged index, with dividends reinvested, which consists of the common stocks of 500 publicly traded U.S. companies. It is a generally recognized indicator used to measure overall performance of the U.S. stock market. One cannot invest directly in an index. Annual Report September 30, 1999 Berger Funds 17 - ------------------------------------------------------------------------------- BERGER SMALL COMPANY GROWTH FUND - ------------------------------------------------------------------------------- PERFORMANCE OVERVIEW - ------------------------------------------------------------------------------- COMPARISON OF CHANGE IN VALUE OF BERGER SMALL COMPANY GROWTH FUND (INVESTOR SHARES) VS. RUSSELL 2000 INDEX AND COST OF LIVING INDEX [GRAPH]
Berger Small Company Russell 2000 Cost of Living Growth Fund Index Index 12/30/93 $10,000 $10,000 $10,000 9/30/94 $10,960 $10,003 $10,247 9/30/95 $14,457 $12,343 $10,508 9/30/96 $18,982 $13,964 $10,823 9/30/97 $22,338 $18,599 $11,056 9/30/98 $16,821 $15,062 $11,221 9/30/99 $27,382 $17,935 $11,461
BERGER SMALL COMPANY GROWTH FUND (INVESTOR SHARES)* AVERAGE ANNUAL TOTAL RETURN As of September 30, 1999 - --------------------------------------------- 1 Year 62.78% 5 Year 20.10% Life of Fund 19.15% (12/30/93) *Performance figures are historical and do not represent future results. Investment returns and principal value will vary, and you may have a loss when you sell shares.
- ------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS - ------------------------------------------------------------------------------- September 30, 1999 - ------------------------------------------------------------------------------- SHARES VALUE - ------------------------------------------------------------------------------- COMMON STOCK (93.51%) BUILDING - HEAVY CONSTRUCTION (1.56%) 250,000 Dycom Industries, Inc.* $ 10,546,875 - ------------------------------------------------------------------------------- COMMERCIAL SERVICES - ADVERTISING (0.16%) 22,100 Lamar Advertising Co. - Class A* 1,093,950 - ------------------------------------------------------------------------------- COMMERCIAL SERVICES - MISCELLANEOUS (0.96%) 144,600 Diamond Technology Partners, Inc.* 6,488,925 - ------------------------------------------------------------------------------- COMMERCIAL SERVICES - SCHOOLS (1.45%) 491,000 Devry, Inc.* 9,820,000 - ------------------------------------------------------------------------------- COMPUTER - SERVICES (5.00%) 255,200 Globix Corp.* 11,930,600 94,800 Internap Network Services Corp.* 4,230,450 310,000 International Integration Inc.* 10,152,500 193,400 Whittman-Hart, Inc.* 7,500,293 - ------------------------------------------------------------------------------- 33,813,843 COMPUTER SOFTWARE - DESKTOP (0.91%) 150,500 Macromedia, Inc.* 6,151,687 - ------------------------------------------------------------------------------- COMPUTER SOFTWARE - EDUCATIONAL/ENTERTAIN (1.82%) 500,000 CBT Group PLC ADR* 12,312,500 - ------------------------------------------------------------------------------- COMMON STOCK (93.51%) - CONTINUED COMPUTER SOFTWARE - ENTERPRISE (7.16%) 345,000 Aspect Development, Inc.* $ 8,732,812 121,800 Mercury Interactive Corp.* 7,863,712 300,000 New Era of Networks, Inc.* 6,487,500 100,000 Peregrine Systems, Inc.* 4,075,000 250,800 SAGA Systems, Inc.* 3,620,925 429,700 TSI International Software Ltd.* 11,655,612 78,300 VERITAS Software Corp.* 5,945,906 - ------------------------------------------------------------------------------- 48,381,467 ELECTRONIC - LASER SYSTEM/COMPONENT (2.08%) 310,100 Cymer, Inc.* 10,756,593 231,600 Laser Vision Centers, Inc.* 3,249,637 - ------------------------------------------------------------------------------- 14,006,230 ELECTRONIC - MISCELLANEOUS COMPONENTS (1.45%) 278,800 Sawtek, Inc.* 9,758,000 - ------------------------------------------------------------------------------- ELECTRONIC - SEMICONDUCTOR EQUIPMENT (5.62%) 196,000 DuPont Photomasks, Inc.* 9,028,250 230,000 Etec Systems, Inc.* 8,653,750 303,000 PRI Automation, Inc.* 10,945,875 165,300 Teradyne, Inc.* 5,826,825 125,000 Veeco Instruments Inc.* 3,500,000 - ------------------------------------------------------------------------------- 37,954,700
Berger Funds September 30, 1999 Annual Report 18 - ------------------------------------------------------------------------------- BERGER SMALL COMPANY GROWTH FUND
- ------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS - ------------------------------------------------------------------------------- September 30, 1999 - ------------------------------------------------------------------------------- SHARES VALUE - ------------------------------------------------------------------------------- COMMON STOCK (93.51%) - CONTINUED ELECTRONIC - SEMICONDUCTOR MANUFACTURING (5.33%) 139,600 Applied Micro Circuits Corp.* $ 7,957,200 337,000 Cree Research Inc.* 11,436,937 59,300 GlobeSpan, Inc.* 3,743,312 208,600 MIPS Technologies, Inc. - Class A 6,636,087 73,400 Vitesse Semiconductors Corp.* 6,266,525 - ------------------------------------------------------------------------------- 36,040,061 ELECTRONIC PRODUCTS - MISCELLANEOUS (5.46%) 314,900 Powerwave Technologies, Inc.* 15,184,084 249,200 Proxim, Inc.* 11,463,200 443,800 Universal Electronics Inc.* # 10,262,875 - ------------------------------------------------------------------------------- 36,910,159 FINANCE - MORTGAGE & RELATED SERVICES (0.37%) 331,700 Resource America, Inc. 2,467,018 - ------------------------------------------------------------------------------- FINANCE - SAVINGS & LOANS (0.57%) 150,000 Webster Financial Corp. 3,825,000 - ------------------------------------------------------------------------------- FINANCIAL SERVICES - MISCELLANEOUS (0.87%) 199,800 Metris Companies Inc. 5,881,612 - ------------------------------------------------------------------------------- INSURANCE - BROKERS (1.46%) 251,000 Pre-Paid Legal Services* 9,883,125 - ------------------------------------------------------------------------------- INTERNET - E*COMMERCE (0.08%) 500 eBay, Inc.* 70,531 5,500 Internet Capital Group, Inc.* 483,312 - ------------------------------------------------------------------------------- 553,843 INTERNET - ISP/CONTENT (2.08%) 53,600 China.com Corp. - Class A* 3,484,000 51,700 Commerce One, Inc.* 5,052,059 114,400 Homestore.Com, Inc.* 4,769,050 11,700 Internet Initiative Japan Inc.* 748,800 - ------------------------------------------------------------------------------- 14,053,909 INTERNET - NETWORK SECURITY/SOLUTIONS (2.67%) 62,100 Sapient Corp.* 5,852,925 400,000 Spyglass, Inc.* 5,000,000 210,000 USWeb Corp.* 7,205,625 - ------------------------------------------------------------------------------- 18,058,550 INTERNET - SOFTWARE (4.07%) 187,900 Agile Software Corp.* 12,025,600 38,700 Ariba, Inc.* 5,592,150 61,700 CMGI Inc.* 6,324,250 23,550 Phone.com, Inc.* 3,567,825 - ------------------------------------------------------------------------------- 27,509,825 MEDIA - CABLE TV (0.39%) 91,200 Insight Communications Co., Inc. - Class A* 2,610,600 - ------------------------------------------------------------------------------- COMMON STOCK (93.51%) - CONTINUED MEDIA - RADIO/TV (7.13%) 275,000 Cox Radio, Inc. - Class A* $ 16,362,500 245,600 Cumulus Media Inc. - Class A* 8,028,050 60,900 Hispanic Broadcasting Corp.* 4,636,012 310,600 Salem Communications Corp.* 7,920,300 290,000 SBS Broadcasting SA* 11,237,500 - ------------------------------------------------------------------------------- 48,184,362 MEDICAL - BIOMED/GENETICS (4.41%) 278,100 BioCryst Pharmaceuticals, Inc.* 6,743,925 420,000 Cephalon, Inc.* 7,546,875 75,000 IDEC Pharmaceuticals Corp.* 7,052,343 84,700 Medimmune, Inc.* 8,440,884 - ------------------------------------------------------------------------------- 29,784,027 MEDICAL - ETHICAL DRUGS (2.17%) 200,300 Jones Pharma Inc. 6,603,640 197,200 Pharmacyclics, Inc.* 8,060,550 - ------------------------------------------------------------------------------- 14,664,190 MEDICAL - INSTRUMENTS (2.13%) 455,000 IDEXX Laboratories, Inc.* 7,834,531 384,300 Ventana Medical Systems, Inc.* 6,533,100 - ------------------------------------------------------------------------------- 14,367,631 MEDICAL - MEDICAL/DENTAL SERVICES (1.69%) 275,900 Accredo Health, Inc.* 8,690,850 262,500 ProVantage Health Services, Inc.* 2,707,031 - ------------------------------------------------------------------------------- 11,397,881 MEDICAL - WHOLESALE DRUG/SUNDRIES (2.18%) 381,900 Allscripts, Inc.* 6,062,662 280,100 Priority Healthcare Corp.* 8,648,087 - ------------------------------------------------------------------------------- 14,710,749 METAL PRODUCTS & FABRICATION (0.80%) 324,300 Maverick Tube Corp.* 5,391,487 - ------------------------------------------------------------------------------- OIL & GAS - DRILLING (1.00%) 444,800 Patterson Energy, Inc.* 6,755,400 - ------------------------------------------------------------------------------- OIL & GAS - FIELD SERVICES (1.77%) 586,300 Paradigm Geophysical Ltd.* # 3,389,546 443,900 Veritas DGC, Inc.* 8,545,075 - ------------------------------------------------------------------------------- 11,934,621 OIL & GAS - U.S. EXPLORATION & PRODUCTION (4.90%) 336,600 Basin Exploration, Inc.* 8,078,400 261,800 Devon Energy Corp. 10,848,337 396,100 Forest Oil Corp.* 6,758,456 146,300 Stone Energy Corp.* 7,443,012 - ------------------------------------------------------------------------------- 33,128,205 POLLUTION CONTROL - SERVICES (1.52%) 615,500 Tetra Tech, Inc.* 10,271,156 - -------------------------------------------------------------------------------
Annual Report September 30, 1999 Berger Funds 19 - ------------------------------------------------------------------------------- BERGER SMALL COMPANY GROWTH FUND
- ------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS - ------------------------------------------------------------------------------- September 30, 1999 - ------------------------------------------------------------------------------- SHARES VALUE - ------------------------------------------------------------------------------- COMMON STOCK (93.51%) - CONTINUED RETAIL - APPAREL/SHOE (0.60%) 100,000 Ann Taylor Stores, Inc.* $ 4,087,500 - ------------------------------------------------------------------------------- RETAIL - HOME FURNISHINGS (0.63%) 225,000 Rent-Way, Inc.* 4,275,000 - ------------------------------------------------------------------------------- RETAIL - MISCELLANEOUS DIVERSIFIED (1.44%) 330,000 Michaels Stores, Corp.* 9,735,000 - ------------------------------------------------------------------------------- RETAIL - SUPER/MINI-MARKETS (0.89%) 182,900 Whole Foods Market, Inc.* 5,984,276 - ------------------------------------------------------------------------------- TELECOMMUNICATIONS - EQUIPMENT (5.96%) 200,000 Adaptive Broadband Corp.* 6,700,000 500,000 Aspect Telecommuncation Corp.* 8,484,375 61,400 Copper Mountain Networks, Inc.* 5,380,175 160,000 Gilat Satellite Networks Ltd.* 8,580,000 49,600 Redback Networks Inc.* 5,356,800 187,000 Research in Motion, Ltd.* 5,785,312 - ------------------------------------------------------------------------------- 40,286,662 TELECOMMUNICATIONS - SERVICES (2.77%) 160,000 Metromedia Fiber Network, Inc.* 3,920,000 500,600 Viatel, Inc.* 14,798,987 - ------------------------------------------------------------------------------- 18,718,987 Total Common Stock (cost $483,092,569) 631,799,013 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- SHARES/PAR VALUE VALUE - ------------------------------------------------------------------------------- PREFERRED STOCK - NON-CONVERTIBLE (0.25%) COMPUTER - PERIPHERAL EQUIPMENT (0.25%) 665,000 Candescent Technologies Corp.* @ x $ 1,662,500 - ------------------------------------------------------------------------------- Total Preferred Stock - Non-Convertible (cost $3,657,500) 1,662,500 - ------------------------------------------------------------------------------- REPURCHASE AGREEMENT (1.88%) - ------------------------------------------------------------------------------- $12,716,000 State Street Repurchase Agreement, 4.85% dated September 30, 1999, to be repurchased at $12,717,713 on October 1, 1999, collateralized by FNMA Agency Note, 5.12% - May 26, 2000, with a value of $12,971,993 12,716,000 - ------------------------------------------------------------------------------- Total Repurchase Agreement (cost $12,716,000) 12,716,000 - ------------------------------------------------------------------------------- Total Investments (cost $499,466,069) (95.64%) 646,177,513 - ------------------------------------------------------------------------------- Total Other Assets, Less Liabilities (4.36%) 29,459,477 - ------------------------------------------------------------------------------- Net Assets (100.00%) $675,636,990 - -------------------------------------------------------------------------------
* Non-income producing security. @ - Valued in good faith. PLC - Public Limited Company. ADR - American Depositary Receipt. # The Investment Company Act of 1940 defines affiliates as those companies in which a fund holds 5% or more of the outstanding voting securities. Following is a summary of the transactions with affiliates for the year ended September 30, 1999:
Universal Paradigm Electronics Inc. Geophysical, Ltd. - ------------------------------------------------------------------------------- Market Value at 9/30/98 -- $ 3,444,512 Purchases at Cost $ 11,366,354 -- Sales at Cost -- -- Change in Unrealized Appreciation/ (Depreciation) (1,103,479) (54,966) Market Value at 9/30/98 $ 10,262,875 $ 3,389,546 Dividend Income -- -- Realized Gain (Loss) -- -- - -------------------------------------------------------------------------------
X SCHEDULE OF RESTRICTED SECURITIES AND ILLIQUID SECURITIES Fair Value as a Date Acquired Cost Fair Value % of Net Assets - ------------------------------------------------------------------------------- Candescent Technologies Corp. - Preferred Stock 5/1/96 $3,657,500 $1,662,500 .25% - -------------------------------------------------------------------------------
See notes to financial statements. Berger Funds September 30, 1999 Annual Report 20 - ------------------------------------------------------------------------------- [PHOTO] BERGER SMALL CAP VALUE FUND Ticker Symbol - Investor Shares BSCVX - Institutional Shares BSVIX Fund Number - Investor Shares 120 - Institutional Shares 403 - ------------------------------------------------------------------------------- ROBERT H. PERKINS AND PORTFOLIO MANAGER COMMENTARY THOMAS M. PERKINS - ------------------------------------------------------------------------------- PERFORMANCE The Berger Small Cap Value Fund (the "Fund") had a total return of 24.69%(1) (Investor Shares) and 25.18%(1) (Institutional Shares) for the year ended September 30, 1999. This outperformed the 19.07% return registered by the Russell 2000 Index(2) over the same period. The year ended September 30, 1999, marked the sixth straight year of relative underperformance of the Russell 2000 versus large cap indices. We believe this disparity is largely a function of excessive market appreciation in the large cap technology stocks that dominate the NASDAQ 100 and in the 50 largest companies in the S&P 500 Index. YEAR IN REVIEW Our best-performing sector this year was energy. Commodity prices rebounded and several issues returned more than 100% over the last 12 months. We used the strength in the sector to reduce holdings in such names as Newfield Exploration and BJ Services and to add names where we saw further upside potential, such as Marine Drilling Companies and Key Energy Services. In the communications sector, we enjoyed strong gains from Centennial Cellular and Jones Intercable, as well as from cellular infrastructure providers REMEC and Sawtek. These stocks rebounded as demand increased for broadband and lower cell phone prices. Since the beginning of our fiscal year, we have decreased our exposure to fallen growth stocks, which are stocks that are trading near or at their all-time lows, because we saw limited investment opportunities. The exceptions were stocks in the information technology (IT) services industry. Many companies delayed large IT projects until early next year in order to prepare for the Y2K changeover. During this period, IT companies corrected as much as 50% to 60%. We viewed this as a buying opportunity because worldwide demand of this service is expected to double by 2003. Names we have added in this sector include Interim Services, Romac International and Computer Horizons. The most disappointing stocks have been in the financial sector, specifically the banks and thrifts industry. Their earnings growth continues to meet or exceed expectations, but their prices do not. Many of these companies are aggressively buying back their stock and raising their dividends, and industry consolidation continues. The one exception is in the real estate investment trusts (REIT) industry, where we continue to find attractive valuations. REITs traditionally sell at yields equivalent to 10-year Treasuries, which are currently 5.9%. The average current yield of REITs held by the Fund is 8.1%. This industry is clearly out of favor, yet many companies boast clean balance sheets, quality assets and trade at a significant discount to their net asset values. We continue to add to names such as Home Properties of New York and Prentiss Properties Trust. Another sector now showing up on our radar screen is healthcare. A cloud of legislation hovering over Washington created uncertainty in this sector and caused a widespread sell-off. But values are beginning to appear. We are unsure as to the exact timing of a resolution of problems in this sector, but we are certain that a number of companies will emerge from the shakeout stronger than ever. In order to capitalize on what we view as temporary issues, we are focusing on finding quality companies with strong balance sheets that are capable of weathering the storm and solidifying their positions as industry leaders. One company we have added is Omnicare. LOOKING AHEAD We reflect on fiscal 1999 with mixed emotions. We are pleased with the Fund's outperformance versus its benchmark, yet we remain frustrated with the continued apathy the market has shown toward the small cap sector. As we enter the seventh year of underperformance by small cap stocks, we reiterate our belief that the best long-term returns are generated by investments in this area. Historically, when the general market turns from larger companies to smaller ones, small cap stocks perform exceedingly well. We are confident that history will repeat itself. We will continue to manage the Fund according to the same small cap value philosophy we have applied for 30 years and await the return of capital to the small cap sector. (1.) Past performance does not guarantee future results. 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. (2.) The Russell 2000 Index is an unmanaged index, with dividends reinvested, which consists of the common stocks of 2000 U.S. companies. It is a generally recognized indicator used to measure overall performance of small company stocks. One cannot invest directly in an index. Annual Report September 30, 1999 Berger Funds 21 - ------------------------------------------------------------------------------- BERGER SMALL CAP VALUE FUND - ------------------------------------------------------------------------------- PERFORMANCE OVERVIEW - ------------------------------------------------------------------------------- INVESTOR SHARES - --------------- COMPARISON OF CHANGE IN VALUE OF BERGER SMALL CAP VALUE FUND; INVESTOR SHARES VS. RUSSELL 2000 INDEX AND COST OF LIVING INDEX [GRAPH]
Berger Small Cap Value Fund; Russell 2000 Cost of Investor Shares Index Living Index 9/30/89 $10,000 $10,000 $10,000 9/30/90 $7,967 $7,287 $10,616 9/30/91 $9,451 $10,574 $10,976 9/30/92 $10,102 $11,518 $11,304 9/30/93 $13,156 $15,341 $11,608 9/30/94 $15,436 $15,742 $11,952 9/30/95 $17,981 $19,420 $12,256 9/30/96 $20,902 $21,978 $12,624 9/30/97 $31,002 $29,272 $12,896 9/30/98 $27,599 $23,705 $13,088 9/30/99 $34,413 $28,226 $13,368
BERGER SMALL CAP VALUE FUND; INVESTOR SHARES* AVERAGE ANNUAL TOTAL RETURN As of September 30, 1999 - --------------------------------------------- 1 Year 24.69% 5 Year 17.39% 10 Year 13.15% INSTITUTIONAL SHARES - -------------------- COMPARISON OF CHANGE IN VALUE OF BERGER SMALL CAP VALUE FUND; INSTITUTIONAL SHARES VS. RUSSELL 2000 INDEX AND COST OF LIVING INDEX
Berger Small Cap Value Fund; Russell 2000 Cost of Institutional Shares Index Living Index 9/30/89 $250,000 $250,000 $250,000 9/30/90 $199,181 $182,166 $265,400 9/30/91 $235,273 $264,351 $274,400 9/30/92 $252,554 $287,945 $282,600 9/30/93 $328,889 $383,528 $290,200 9/30/94 $385,901 $393,562 $298,800 9/30/95 $449,537 $485,657 $306,400 9/30/96 $522,541 $549,442 $315,600 9/30/97 $776,796 $731,796 $322,400 9/30/98 $694,084 $592,634 $327,200 9/30/99 $868,881 $705,650 $334,200
BERGER SMALL CAP VALUE FUND; INSTITUTIONAL SHARES* AVERAGE ANNUAL TOTAL RETURN As of September 30, 1999 - ---------------------------------------------- 1 Year 25.18% 5 Year 17.62% 10 Year 13.27% * Performance figures are historical and do not represent future results. Investment returns and principal value will vary, and you may have a loss when you sell shares. Performance data for the Investor Shares include periods prior to the adoption of class designations on February 14, 1997, and therefore do not reflect the 0.25% per year 12b-1 fee applicable to the Investor Shares. Berger Funds September 30, 1999 Annual Report 22 - ------------------------------------------------------------------------------- BERGER SMALL CAP VALUE FUND
- ------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS - ------------------------------------------------------------------------------- September 30, 1999 - ------------------------------------------------------------------------------- SHARES VALUE - ------------------------------------------------------------------------------- COMMON STOCK (87.03%) BANKS - NORTHEAST (5.93%) 292,100 Community Bank Systems, Inc. $ 7,996,237 370,000 F.N.B. Corp. 8,972,500 190,000 Keystone Financial, Inc. 4,512,500 1,100,000 Peoples Heritage Financial Group, Inc. 18,287,500 700,000 Seacoast Financial Services Corp. 7,000,000 - ------------------------------------------------------------------------------- 46,768,737 BANKS - SOUTHEAST (2.23%) 422,900 CCB Financial Corp. 17,603,212 - ------------------------------------------------------------------------------- BANKS - WEST/SOUTHWEST (2.76%) 348,000 Bank United Corp. - Class A 11,266,500 505,000 InterWest Bancorp, Inc. 10,478,750 - ------------------------------------------------------------------------------- 21,745,250 BUILDING - RESIDENT/COMMERCIAL (0.57%) 206,800 Pulte Corp. 4,497,900 - ------------------------------------------------------------------------------- CHEMICALS - PLASTICS (2.68%) 1,220,000 A. Schulman, Inc. 21,121,250 - ------------------------------------------------------------------------------- COMMERCIAL SERVICES - STAFFING (3.70%) 1,200,000 Interim Services Inc.* 19,650,000 1,150,000 Romac International, Inc.* 9,523,442 - ------------------------------------------------------------------------------- 29,173,442 COMPUTER - INTEGRATED SYSTEMS (0.51%) 500,000 Hypercom Corp.* 4,000,000 - ------------------------------------------------------------------------------- COMPUTER - PERIPHERAL EQUIPMENT (0.54%) 700,000 Splash Technology Holdings, Inc.*# 4,287,500 - ------------------------------------------------------------------------------- COMPUTER - SERVICES (1.92%) 1,300,000 Computer Horizons Corp.* 15,112,500 - ------------------------------------------------------------------------------- COMPUTER SOFTWARE - DESKTOP (0.93%) 800,000 Network Equipment Technologies, Inc.* 7,350,000 - ------------------------------------------------------------------------------- COMPUTER SOFTWARE - ENTERPRISE (0.78%) 528,700 JDA Software Group, Inc.* 6,179,181 - ------------------------------------------------------------------------------- CONSUMER PRODUCTS - MISCELLANEOUS (2.31%) 950,000 Jostens, Inc. 18,168,750 - ------------------------------------------------------------------------------- DIVERSIFIED OPERATIONS (3.43%) 728,300 Federal Signal Corp. 14,474,962 400,000 Pittway Corp. - Class A 12,600,000 - ------------------------------------------------------------------------------- 27,074,962 ELECTRICAL - CONTROL INSTRUMENTS (2.23%) 810,000 Watts Industries, Inc. 17,617,500 - ------------------------------------------------------------------------------- COMMON STOCK (87.03%) - CONTINUED FINANCE - EQUITY REIT (9.97%) 550,000 Gables Residential Trust $ 13,200,000 600,000 Home Properties of New York, Inc. 16,012,500 1,000,000 IRT Property Co. 9,000,000 200,000 Parkway Properties, Inc. 6,450,000 720,000 Prentiss Properties Trust 15,975,000 900,000 Summit Properties, Inc. 17,943,750 - ------------------------------------------------------------------------------- 78,581,250 FINANCE - PUBLIC INVESTMENT FUND - FOREIGN (1.71%) 1,365,000 Morgan Stanley Asia Pacific Fund, Inc.* 13,479,375 - ------------------------------------------------------------------------------- FINANCE - SAVINGS & LOANS (3.93%) 838,100 Republic Security Financial Corp. 7,280,993 230,000 Riverview Bancorp Inc. 2,831,875 336,500 Warren Bancorp, Inc. 3,028,500 700,000 Webster Financial Corp. 17,850,000 - ------------------------------------------------------------------------------- 30,991,368 FOOD - MISCELLANEOUS PREPARATION (0.77%) 879,900 Vlasic Foods International Inc.* 6,104,306 - ------------------------------------------------------------------------------- HOUSEHOLD/OFFICE FURNITURE (0.68%) 280,000 Kimball International, Inc. - Class B 5,390,000 - ------------------------------------------------------------------------------- INSURANCE - PROPERTY/CASUALTY/TITLE (4.01%) 990,000 IPC Holdings Ltd. 18,562,500 - ------------------------------------------------------------------------------- 900,000 Old Republic International Corp. 12,993,750 31,556,250 - ------------------------------------------------------------------------------- MACHINERY - GENERAL/INDUSTRIAL (1.69%) 800,000 Flowserve Corp. 13,300,000 - ------------------------------------------------------------------------------- MEDIA - CABLE TV (2.07%) 160,000 Jones Intercable, Inc.* 8,520,000 145,000 Jones Intercable, Inc. - Class A* 7,839,062 - ------------------------------------------------------------------------------- 16,359,062 MEDICAL - MEDICAL/DENTAL SERVICES (1.71%) 1,400,000 Omnicare, Inc. 13,475,000 - ------------------------------------------------------------------------------- MEDICAL - WHOLESALE DRUG/SUNDRIES (0.89%) 890,000 Perrigo Co.* 7,008,750 - ------------------------------------------------------------------------------- MEDICAL/DENTAL - SUPPLIES (4.48%) 480,000 Ocular Sciences, Inc.* 9,300,000 1,200,000 Sola International, Inc.* 18,600,000 540,000 Steris Corp.* 7,425,000 - ------------------------------------------------------------------------------- 35,325,000 METAL PRODUCTS & FABRICATION (1.09%) 800,000 NS Group, Inc.* 8,600,000 - ------------------------------------------------------------------------------- OFFICE EQUIPMENT - EQUIPMENT & AUTOMATION (1.08%) 441,800 HON Industries, Inc. 8,504,650 - -------------------------------------------------------------------------------
Annual Report September 30, 1999 Berger Funds 23 - ------------------------------------------------------------------------------- BERGER SMALL CAP VALUE FUND
- ------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS - ------------------------------------------------------------------------------- September 30, 1999 - ------------------------------------------------------------------------------- SHARES VALUE - ------------------------------------------------------------------------------- COMMON STOCK (87.03%) - CONTINUED OIL & GAS - DRILLING (1.65%) 820,400 Marine Drilling Companies* $ 12,972,575 - ------------------------------------------------------------------------------- OIL & GAS - FIELD SERVICES (2.25%) 3,600,000 Key Energy Services, Inc.* 17,775,000 - ------------------------------------------------------------------------------- OIL & GAS - U.S. EXPLORATION & PRODUCTION (4.97%) 565,000 Chieftain International, Inc.* 10,735,000 346,200 Evergreen Resources, Inc.* 8,330,437 507,000 Mitchell Energy & Development Corp.* 11,914,500 250,000 Newfield Exploration Co.* 8,234,375 - ------------------------------------------------------------------------------- 39,214,312 RETAIL - APPAREL/SHOE (1.92%) 300,000 Payless ShoeSource, Inc.* 15,150,000 - ------------------------------------------------------------------------------- RETAIL - MAIL ORDER & DIRECT (0.62%) 480,000 Spiegel, Inc. - Class A* 4,860,000 - ------------------------------------------------------------------------------- RETAIL - MISCELLANEOUS DIVERSIFIED (1.84%) 2,150,000 Pier 1 Imports, Inc. 14,512,500 - ------------------------------------------------------------------------------- RETAIL - RESTAURANTS (0.67%) 660,100 Landry's Seafood Restaurants, Inc.* 5,280,800 - ------------------------------------------------------------------------------- SHOES & RELATED APPAREL (2.97%) 2,060,000 Wolverine World Wide, Inc.# 23,432,500 - ------------------------------------------------------------------------------- TELECOMMUNICATIONS - EQUIPMENT (2.60%) 700,000 Aspect Telecommunications Corp.* 11,878,125 625,000 Remec, Inc.* 8,593,750 - ------------------------------------------------------------------------------- 20,471,875 TELECOMMUNICATIONS - SERVICES (0.66%) 1,000,000 General Communication, Inc.* 5,218,750 - ------------------------------------------------------------------------------- TRANSPORTATION - SHIPPING (1.15%) 565,000 Knightsbridge Tankers Ltd. 9,040,000 - ------------------------------------------------------------------------------- TRUCKS & PARTS - HEAVY DUTY (1.13%) 675,000 Stewart & Stevenson Services, Inc. 8,859,375 - ------------------------------------------------------------------------------- Total Common Stock (cost $666,155,981) 686,162,882
September 30, 1999 - ------------------------------------------------------------------------------- PAR VALUE VALUE - ------------------------------------------------------------------------------- U.S. GOVERNMENT AGENCY OBLIGATIONS (10.76%) $15,000,000 FHLMC Discount Note - 5.15% 10/15/1999 $ 14,969,958 - ------------------------------------------------------------------------------- 30,000,000 FNMA Discount Note - 5.12% 10/25/1999 29,897,600 - ------------------------------------------------------------------------------- 40,000,000 FNMA Discount Note - 5.22% 10/8/1999 39,959,400 - ------------------------------------------------------------------------------- Total U.S. Government Agency Obligations (cost $84,826,958) 84,826,958 REPURCHASE AGREEMENT (1.37%) $10,812,000 State Street Repurchase Agreement, 4.85% dated September 30, 1999 to be repurchased at $10,813,457 on October 1, 1999, collateralized by FNMA Agency Note, 5.25% - January 10, 2001 with a value of $11,029,238 10,812,000 Total Repurchase Agreement (cost $10,812,000) 10,812,000 Total Investments (cost $761,794,939) (99.16%) 781,801,840 Total Other Assets, Less Liabilities (0.84%) 6,607,864 Net Assets (100.00%) $788,409,704 - -------------------------------------------------------------------------------
* Non-income producing security. # The Investment Company Act of 1940 defines affiliates as those companies in which a fund holds 5% or more of the outstanding voting securities. Following is a summary of the transactions with affiliates for the year ended September 30, 1999.
Splash Technology Wolverine Holdings, Inc. World Wide, Inc. - ------------------------------------------------------------------------------- Market Value at 9/30/98 $ 2,565,000 $ 3,534,375 Purchases at Cost 4,205,674 19,323,742 Sales at Cost -- -- Change in Unrealized Appreciation/ (Depreciation) (2,483,174) 574,383 Market Value at 9/30/99 4,287,500 $ 23,432,500 Dividend Income -- 155,536 Realized Gain (Loss) -- -- - -------------------------------------------------------------------------------
See notes to financial statements. Berger Funds September 30, 1999 Annual Report 24 - ------------------------------------------------------------------------------- [PHOTO] BERGER MID CAP GROWTH FUND Ticker Symbol - BEMGX Fund Number - 215 - ------------------------------------------------------------------------------- PORTFOLIO MANAGER COMMENTARY AMY K. SELNER - ------------------------------------------------------------------------------- PERFORMANCE For the 12-month period ended September 30, 1999, the Berger Mid Cap Growth Fund (the "Fund") had an outstanding total return of 102.76%,(1) which was four times higher than the 25.44% total return of the Standard & Poor's (S&P) MidCap 400 Index.(2) As we began our fiscal year in October 1998, the price of mid cap stocks was depressed, the result of a summer/fall market correction. Beginning October 8, 1998, and extending through the end of that year, mid caps bounced back in tandem with large caps. Technology stocks led the way. From January through March 1999, only large cap stocks performed well, an echo of 1998 market trends. During this period, stocks in the S&P MidCap 400 Index fell 7%, while larger cap stocks in the S&P 500 Index(3) rose 4%. The market broadened in the second calendar quarter 1999, and both mid and small cap stocks registered solid relative performance. As a group, mid caps had twice the gains of large caps. The S&P MidCap 400 Index gained 14% versus the S&P 500 Index's gain of 7%. In the quarter ended September 30, 1999, the stock market faltered on renewed interest rate fears, and both mid cap and large cap stocks performed poorly. YEAR IN REVIEW Despite this up and down year for mid cap stocks, our Fund was able to considerably outperform its benchmark mainly because of stock selection. The Fund remains heavily weighted in industries in which growth prospects are the most visible and consistent. Technology, our largest sector, continues to have the best long-term growth fundamentals. We believe the growth prospects are explosive for the Internet infrastructure in particular. Therefore, we continue to focus on telecommunication and broadband companies, which provide the plumbing that enables broad acceptance of Internet applications and services. Both Verisign, in Internet infrastructure, and Applied Micro Circuits, in telecommunications, have been strong holdings. We have seen a pick-up in the information technology services group. We believe some large contract orders for Internet-related companies may revive this Y2K-depressed group. Semiconductor stocks continued to show solid revenue growth, and improving Asian economies should help sustain this trend. Our Fund lowered its exposure to the healthcare group over this fiscal year. Uncertainty surrounding prescription drug benefits and the government's impact on drug pric ing kept a lid on these stocks. One bright spot in the sector was biotechnology stocks. Among our holdings, Medimmune and IDEC Pharmaceuticals helped boost Fund performance. Our energy weighting contributed to the Fund's outperformance in the first six months of 1999. Although there are worries that OPEC will irrationally increase oil production, we remain positive on the long-term supply/demand fundamentals within the sector. Initial public offerings (IPO's) also made a positive contribution to the Fund's performance during the year, although it is unclear whether this market for IPO's will continue into next year. LOOKING AHEAD Going forward, we continue to favor the technology sector, particularly the telecommunication and broadband infrastructure companies that support the Internet. We recognize that the fear of Y2K slowdown within the enterprise software group is probably fully discounted and believe the Internet-enabler software companies, which are companies that make the technologies that enable the Internet to work, will be strong performers into next year. We expect semiconductors to continue their strong fundamentals into next year as well. We remain cautiously optimistic about the market as we enter the final quarter of 1999. The U.S. economy is undeniably robust and international economies are picking up. The Federal Reserve Board left interest rates unchanged at their early October meeting. But, if inflation picks up, the Fed may raise rates again. However, inflation fears have been stemmed year to date. The growth prospects, relative valuations and greater liquidity of mid cap stocks make them a very attractive segment of the market going forward. We believe that our Fund's bias toward mid cap technology companies will be beneficial as we enter 2000. Global economies appear to be strengthening in concert, which is a positive sign for technology companies because they often garner more than 50% of earnings internationally. (1.) Past performance does not guarantee future results. 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. (2.) The S&P MidCap 400 Index is an unmanaged index, with dividends reinvested, and is generally representative of the market for mid-sized companies. One cannot invest directly in an index. (3.) The S&P 500 Index is an unmanaged index, with dividends reinvested, which consists of the common stocks of 500 publicly traded U.S. companies. It is a generally recognized indicator used to measure overall performance of the U.S. stock market. One cannot invest directly in an index. Annual Report September 30, 1999 Berger Funds 25 - ------------------------------------------------------------------------------- BERGER MID CAP GROWTH FUND - ------------------------------------------------------------------------------- PERFORMANCE OVERVIEW - ------------------------------------------------------------------------------- COMPARISON OF CHANGE IN VALUE OF BERGER MID CAP GROWTH FUND VS. S&P 400 MIDCAP INDEX AND COST OF LIVING INDEX [GRAPH}
Berger Mid Cap S&P 400 Cost of Growth Fund MidCap Index Living Index 12/31/97 $10,000 $10,000 $10,000 3/31/98 $12,590 $11,099 $10,056 6/30/98 $13,290 $10,062 $10,105 9/30/98 $10,930 $9,293 $10,143 12/31/98 $15,438 $11,907 $10,161 3/31/99 $17,215 $11,147 $10,229 6/30/99 $21,166 $12,723 $10,304 9/30/99 $22,162 $11,657 $10,360
BERGER MID CAP GROWTH FUND* AVERAGE ANNUAL TOTAL RETURN As of September 30, 1999 - ---------------------------------------------- 1 Year 102.76% Life of Fund 57.57% (12/31/97) * Performance figures are historical and do not represent future results. Investment returns and principal value will vary, and you may have a loss when you sell shares.
- ------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS - ------------------------------------------------------------------------------- September 30, 1999 - ------------------------------------------------------------------------------- SHARES VALUE - ------------------------------------------------------------------------------- COMMON STOCK (92.45%) BANKS - NORTHEAST (2.25%) 20,500 Peoples Heritage Financial Group, Inc. $ 340,812 2,900 U.S. Trust Corp. 233,087 - ------------------------------------------------------------------------------- 573,899 BANKS - WEST/SOUTHWEST (1.53%) 7,100 Zions Bancorp. 391,387 - ------------------------------------------------------------------------------- BUILDING - HEAVY CONSTRUCTION (2.15%) 13,000 Dycom Industries, Inc.* 548,437 - ------------------------------------------------------------------------------- COMMERCIAL SERVICES - ADVERTISING (2.67%) 6,400 Lamar Advertising Co. - Class A* 316,800 6,000 TMP Worldwide, Inc.* 365,250 - ------------------------------------------------------------------------------- 682,050 COMMERCIAL SERVICES - SCHOOLS (1.21%) 15,500 Devry, Inc.* 310,000 - ------------------------------------------------------------------------------- COMPUTER - SERVICES (1.10%) 3,600 Internap Network Services Corp.* 160,650 3,200 Whittman-Hart, Inc.* 124,100 - ------------------------------------------------------------------------------- 284,750 COMPUTER SOFTWARE - EDUCATIONAL/ENTERTAIN (0.58%) 6,000 CBT Group PLC ADR* 147,750 - ------------------------------------------------------------------------------- COMMON STOCK (92.45%) COMPUTER SOFTWARE - ENTERPRISE (1.82%) 21,500 New Era of Networks, Inc.* 464,937 - ------------------------------------------------------------------------------- ELECTRONIC - SEMICONDUCTOR EQUIPMENT (5.43%) 7,500 ASM Lithography Holding NV* 502,968 1,100 KLA-Tencor Corp.* 71,500 8,000 Lam Research Corp.* 488,000 9,200 Teradyne, Inc.* 324,300 - ------------------------------------------------------------------------------- 1,386,768 ELECTRONIC - SEMICONDUCTOR MANUFACTURING (6.90%) 7,100 Applied Micro Circuits Corp.* 404,700 2,500 Conexant Systems, Inc.* 181,640 5,640 Linear Technology Corp. 331,526 5,800 SDL, Inc.* 442,612 4,700 Vitesse Semiconductors Corp.* 401,262 - ------------------------------------------------------------------------------- 1,761,740 ELECTRONIC PRODUCTS - MISCELLANEOUS (1.79%) 9,500 Powerwave Technologies, Inc.* 458,078 - ------------------------------------------------------------------------------- INTERNET - E*COMMERCE (1.63%) 3,200 CareInsite, Inc.* 162,000 1,800 eBay, Inc.* 253,912 - ------------------------------------------------------------------------------- 415,912
Berger Funds September 30, 1999 Annual Report 26 - ------------------------------------------------------------------------------- BERGER MID CAP GROWTH FUND
- ------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS - ------------------------------------------------------------------------------- September 30, 1999 - ------------------------------------------------------------------------------- SHARES VALUE - ------------------------------------------------------------------------------- COMMON STOCK (92.45%) - CONTINUED INTERNET - ISP/CONTENT (2.99%) 3,100 Commerce One, Inc.* $ 302,928 6,000 Engage Technologies Inc.* 226,125 4,600 Homestore.Com, Inc.* 191,762 400 Internet Initiative Japan Inc. ADR* 25,600 100 Yahoo! Inc.* 17,950 - ------------------------------------------------------------------------------- 764,365 INTERNET - NETWORK SECURITY/SOLUTIONS (7.27%) 1,800 Inktomi Corporation* 216,056 2,000 Juniper Networks, Inc.* 366,000 4,200 Sapient Corp.* 395,850 15,700 USWeb Corp.* 538,706 3,200 VeriSign, Inc.* 340,800 - ------------------------------------------------------------------------------- 1,857,412 INTERNET - SOFTWARE (6.17%) 2,000 Ariba, Inc.* 289,000 4,100 CMGI Inc.* 420,250 2,900 Digital Insight Corp.* 43,500 5,000 Kana Communications, Inc.* 249,375 11,800 SilverStream Software, Inc.* 367,275 4,800 Software.com, Inc.* 205,800 - ------------------------------------------------------------------------------- 1,575,200 MEDIA - CABLE TV (3.53%) 10,700 Cox Communications, Inc.* 446,725 5,000 EchoStar Communications Corp.* 454,062 - ------------------------------------------------------------------------------- 900,787 MEDIA - RADIO/TV (4.60%) 2,306 Clear Channel Communications, Inc.* 184,191 6,300 Cox Radio, Inc. - Class A* 374,850 3,300 Hispanic Broadcasting Corp.* 251,212 4,500 Univision Communications, Inc. - Class A* 366,187 - ------------------------------------------------------------------------------- 1,176,440 MEDICAL - BIOMED/GENETICS (4.92%) 3,200 Genentech, Inc.* 468,200 5,200 IDEC Pharmaceuticals Corp.* 488,962 3,000 Medimmune, Inc.* 298,968 - ------------------------------------------------------------------------------- 1,256,130 MEDICAL - ETHICAL DRUGS (1.18%) 10,500 Shire Pharmaceuticals Group PLC* 302,531 - ------------------------------------------------------------------------------- MEDICAL - GENERIC DRUGS (3.20%) 22,000 Mylan Laboratories, Inc. 404,250 13,550 Watson Pharmaceuticals, Inc.* 414,121 - ------------------------------------------------------------------------------- 818,371 MEDICAL - MEDICAL/DENTAL SERVICES (2.89%) 13,700 Accredo Health, Inc.* 431,550 12,500 TLC The Laser Center Inc.* 307,812 - ------------------------------------------------------------------------------- 739,362 COMMON STOCK (92.45%) - CONTINUED OIL & GAS - DRILLING (2.53%) 15,200 ENSCO International Inc. 274,550 17,000 Noble Drilling Corp.* 371,875 - ------------------------------------------------------------------------------- 646,425 OIL & GAS - FIELD SERVICES (3.01%) 13,300 BJ Services Co.* 423,106 18,000 Veritas DGC, Inc.* 346,500 - ------------------------------------------------------------------------------- 769,606 OIL & GAS - MACHINERY/EQUIPMENT (1.82%) 14,500 Weatherford International, Inc.* 464,000 - ------------------------------------------------------------------------------- OIL & GAS - U.S. EXPLORATION & PRODUCTION (1.88%) 13,000 Barrett Resources Corp.* 480,187 - ------------------------------------------------------------------------------- RETAIL - APPAREL/SHOE (0.56%) 3,500 Ann Taylor Stores, Inc.* 143,062 - ------------------------------------------------------------------------------- RETAIL - DISCOUNT & VARIETY (1.88%) 12,000 Dollar Tree Stores, Inc.* 479,250 - ------------------------------------------------------------------------------- RETAIL - MAJOR DISCOUNT CHAINS (1.07%) 8,850 Dollar General Corp. 273,243 - ------------------------------------------------------------------------------- TELECOMMUNICATIONS - EQUIPMENT (5.48%) 5,200 Copper Mountain Networks, Inc.* 455,650 4,500 JDS Uniphase Corp.* 512,156 4,000 Redback Networks Inc.* 432,000 - ------------------------------------------------------------------------------- 1,399,806 TELECOMMUNICATIONS - SERVICES (7.34%) 6,500 Covad Communications Group, Inc.* 283,359 12,500 McLeodUSA Inc. - Class A* 532,031 19,000 Metromedia Fiber Network, Inc.* 465,500 20,100 Viatel, Inc.* 594,206 - ------------------------------------------------------------------------------- 1,875,096 UTILITY - WATER SUPPLY (1.07%) 15,900 Azurix Corp.* 273,272 Total Common Stock (cost $19,894,499) 23,620,253 - ------------------------------------------------------------------------------- U.S. GOVERNMENT AGENCY OBLIGATIONS (6.26%) $1,600,000 Federal National Mortgage Association Discount Note - 5.22%, 10/8/1999 1,598,400 Total U.S. Government Agency Obligations (cost $1,598,376) 1,598,400 - -------------------------------------------------------------------------------
Annual Report September 30, 1999 Berger Funds 27 - ------------------------------------------------------------------------------- BERGER MID CAP GROWTH FUND
- ------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS - ------------------------------------------------------------------------------- September 30, 1999 - ------------------------------------------------------------------------------- PAR VALUE VALUE - ------------------------------------------------------------------------------- REPURCHASE AGREEMENT (1.25%) $320,000 State Street Repurchase Agreement, 4.85% dated September 30, 1999 to be repurchased at $320,043 on October 1, 1999, collateralized by FHLMC Agency Note, 6.25% - May 18, 2004, with a value of $330,825 $ 320,000 Total Repurchase Agreement (cost $320,000) 320,000 Total Investments (cost $21,812,875) (99.96%) 25,538,653 Total Other Assets, Less Liabilities (0.04%) 11,459 Net Assets (100.00%) $ 25,550,112 - -------------------------------------------------------------------------------
* Non-income producing security. PLC - Public Limited Company. ADR - American Depositary Receipt. See notes to financial statements. Berger Funds September 30, 1999 Annual Report 28 - -------------------------------------------------------------------------------- BERGER MID CAP VALUE FUND - -------------------------------------------------------------------------------- Ticker Symbol BEMVX Fund Number 216 - -------------------------------------------------------------------------------- PORTFOLIO MANAGER COMMENTARY THOMAS M. PERKINS AND ROBERT H. PERKINS - -------------------------------------------------------------------------------- PERFORMANCE We are pleased to report that in its first full year, which ended September 30, 1999, the Berger Mid Cap Value Fund (the "Fund") gained 31.12%(1) compared with 25.44% for the Standard & Poor's (S&P) MidCap 400 Index,(2) 10.00% for the S&P Midcap Value Index(3) and 27.80% for the S&P 500 Index.(4) Our Fund outperformed these indices primarily because we purchased severely depressed stocks in the technology and energy sectors in late 1998 and early 1999. Subsequently, we had strong appreciation in those stocks. The S&P MidCap indexes underperformed large cap market indices for the year because larger growth stocks continued their multiyear run up in prices. Although the S&P MidCap 400 Index outpaced the S&P 500 Index every year (except 1990) from 1988 through 1993, it has trailed the S&P 500 Index every year since then. This period of underperformance has resulted in the most attractive relative valuation levels for mid cap and small cap value stocks we've seen in this decade. Historically, after similar extended periods of underperformance, value stocks have had several years of relatively good returns. This could occur in the coming year, especially since world economic prospects are positive. YEAR IN REVIEW Since March 31, the biggest change in our sector weighting was the increase of energy holdings from 8.8% of Fund net assets to 11.8%. This increase was due primarily to appreciation in the price of oil and gas producer stocks we purchased in late 1998/early 1999. At that time, energy prices had fallen to about one-half current levels. Prices of some of these stocks, including Mitchell Energy and Development, picked up as much as 90% between March 31 and September 30. The financial sector remains our largest sector, constituting 27.1% of the portfolio. Unfortunately, financial stocks generally underperformed as interest rates unexpectedly continued to rise. Ironically, in almost all cases, earnings have grown in line with expectations, and many of these companies are raising dividends and buying back stock. We expect earnings to be favorable as long as the economy is strong. With valuations depressed to levels not seen in several years, we used the period of weakness to add to our regional bank holdings. Bank stocks haven't been this cheap since 1994. They subsequently outperformed in 1995 and 1996 as interest rate pressure eased. Real estate investment trusts (REITs) also continue to be an area of emphasis as earnings and dividends are growing, current yields are over 9%, and the stocks are selling somewhat below net asset value. Technology is our second-largest sector. Our practice of ferreting out fallen growth stocks has been especially rewarding here. The growth pattern of technology companies can be bumpy. As they recover from the bumps and return to their secular growth paths, the stocks of these companies often regain premium valuations and have explosive appreciation. At this point, we usually liquidate part or all of our positions in the stocks. For example, we reduced holdings in Analog Devices, Tellabs and Methode Electronics and eliminated Sanmina after achieving gains of 100% to 300%. If these companies experience temporary problems again in the future, we could reinvest. In the meantime, some of the proceeds of these sales were deployed to other issues that more recently fell into what we think is only temporary market disfavor such as Andrew, Aspect Telecommunications, Comdisco and Keane. When we purchased these stocks, all were down at least 25% from their recent highs; three were down more than 60%. LOOKING AHEAD Most stocks are down about 20% from their highs of last year and are reflecting more reasonable valuations. Because of this price correction, we have positive, though modest, expectations for the market. Moreover, international economic recovery is more solidly in place, and we still anticipate an end to the rise in interest rates. We are more comfortable with mid and small cap value stocks than we are with the overall market. The poor third-quarter performance of these issues improved their relatively favorable risk/reward relationships. As a reflection of their relative attractiveness, our portfolio companies, as of September 30, were priced under 18 times estimated 1999 earnings compared with 27 times for the S&P 500 Index. And, if we have global economic growth, earnings comparisons for our stocks should be favorable. We remain confident in following our discipline of investing in relatively undervalued, well-financed companies with good growth prospects and above-average dividends. 1. Past performance does not guarantee future results. 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. 2. The S&P MidCap 400 Index is an unmanaged index, with dividends reinvested, and is generally representative of the market for mid-sized companies. One cannot invest directly in an index. 3. The S&P MidCap Value Index is an unmanaged index, with dividends reinvested, and is generally representative of the market for value stocks for mid-sized companies. One cannot invest directly in an index. 4. The S&P 500 Index is an unmanaged index, with dividends reinvested, which consists of the common stocks of 500 publicly traded U.S. companies. It is a generally recognized indicator used to measure overall performance of the U.S. stock market. One cannot invest directly in an index. Annual Report September 30, 1999 Berger Funds 29 - -------------------------------------------------------------------------------- BERGER MID CAP VALUE FUND - -------------------------------------------------------------------------------- PERFORMANCE OVERVIEW - -------------------------------------------------------------------------------- COMPARISON OF CHANGE IN VALUE OF BERGER MID CAP VALUE FUND VS. S&P 400 MIDCAP INDEX AND COST OF LIVING INDEX [GRAPH]
Berger Mid S&P 400 Cost of Cap Value MidCap Living Fund Index Index 8/12/98 $10,000 $10,000 $10,000 9/30/98 $9,330 $8,910 $10,049 12/31/98 $11,440 $11,416 $10,067 3/31/99 $11,218 $10,688 $10,184 6/30/99 13,550 12,199 10,214 9/30/99 $12,234 $11,176 $10,239
BERGER MID CAP VALUE FUND* AVERAGE ANNUAL TOTAL RETURN
As of September 30, 1999 - ------------------------------------- 1 Year 31.12% - ------------------------------------- Life of Fund 19.34% - -------------------------------------
(8/12/98) *Performance figures are historical and do not represent future results. Investment returns and principal value will vary, and you may have a loss when you sell shares. - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS - --------------------------------------------------------------------------------
September 30, 1999 - --------------------------------------------------------------------------- SHARES VALUE - --------------------------------------------------------------------------- COMMON STOCK (92.06%) AEROSPACE/DEFENSE - EQUIPMENT (0.63%) 5,000 The B.F. Goodrich Co. $ 145,000 - --------------------------------------------------------------------------- BANKS - MIDWEST (1.34%) 8,500 Associated Banc-Corp. 307,593 - --------------------------------------------------------------------------- BANKS - MONEY CENTER (1.25%) 6,500 Citigroup Inc. 286,000 - --------------------------------------------------------------------------- BANKS - NORTHEAST (1.16%) 16,000 Peoples Heritage Financial Group, Inc. 266,000 - --------------------------------------------------------------------------- BANKS - SOUTHEAST (3.20%) 8,000 CCB Financial Corp. 333,000 6,000 Compass Bancshares, Inc. 150,000 7,000 SouthTrust Corp. 251,125 - --------------------------------------------------------------------------- 734,125 BANKS - SUPER REGIONAL (1.03%) 6,500 UnionBanCal Corp. 235,625 - --------------------------------------------------------------------------- BANKS - WEST/SOUTHWEST (1.68%) 11,500 City National Corp. 385,968 - --------------------------------------------------------------------------- BUILDING - CEMENT/CONCRETE/AGGREGATES (0.82%) 3,500 Southdown, Inc. 187,250 - ---------------------------------------------------------------------------- September 30, 1999 - --------------------------------------------------------------------------- SHARES VALUE - --------------------------------------------------------------------------- COMMON STOCK (92.06%) - CONTINUED BUILDING - CONSTRUCTION PRODUCTS/MISCELLANEOUS (0.82%) 12,000 U.S. Industries, Inc. $ 189,000 - --------------------------------------------------------------------------- BUILDING - PAINT & ALLIED PRODUCTS (1.14%) 12,500 The Sherwin Williams Co. 261,734 - --------------------------------------------------------------------------- BUILDING - RESIDENT/COMMERCIAL (0.48%) 5,000 Pulte Corp. 108,750 - --------------------------------------------------------------------------- BUILDING PRODUCTS - WOOD (2.45%) 8,000 Georgia-Pacific Corp. (Timber Group) 183,000 9,000 Rayonier Inc. 378,000 - --------------------------------------------------------------------------- 561,000 CHEMICALS - PLASTICS (1.29%) 17,000 A. Schulman, Inc. 294,312 - --------------------------------------------------------------------------- CHEMICALS - SPECIALTY (1.61%) 9,000 Cytec Industries, Inc.* 216,000 7,500 Millennium Chemicals Inc. 153,281 - --------------------------------------------------------------------------- 369,281 COMMERCIAL - LEASING COMPANIES (1.36%) 6,500 Comdisco, Inc. 125,531 6,000 GATX Corp. 186,375 - --------------------------------------------------------------------------- 311,906
Berger Funds September 30, 1999 Annual Report 30 - -------------------------------------------------------------------------------- BERGER MID CAP VALUE FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS - --------------------------------------------------------------------------------
September 30, 1999 - -------------------------------------------------------------------------------- SHARES VALUE - -------------------------------------------------------------------------------- COMMON STOCK (92.06%) - CONTINUED COMMERCIAL SERVICES - MISCELLANEOUS (1.63%) 12,500 The Dun & Bradstreet Corp. $ 373,437 - --------------------------------------------------------------------------- COMMERCIAL SERVICES - STAFFING (1.43%) 20,000 Interim Services Inc.* 327,500 - --------------------------------------------------------------------------- COMPUTER - INTEGRATED SYSTEMS (0.73%) 21,000 Hypercom Corp.* 168,000 - --------------------------------------------------------------------------- COMPUTER - PERIPHERAL EQUIPMENT (1.04%) 6,000 Adaptec, Inc.* 238,125 - --------------------------------------------------------------------------- COMPUTER - SERVICES (3.05%) 26,500 Computer Horizons Corp.* 308,062 15,000 Convergys Corp.* 297,187 2,000 Shared Medical Systems Corp. 93,500 - --------------------------------------------------------------------------- 698,749 COMPUTER SOFTWARE - DESKTOP (0.68%) 17,000 Network Equipment Technologies, Inc.* 156,187 - --------------------------------------------------------------------------- COMPUTER SOFTWARE - ENTERPRISE (0.50%) 5,000 Keane, Inc.* 114,062 - --------------------------------------------------------------------------- CONSUMER PRODUCTS - MISCELLANEOUS (1.29%) 15,500 Jostens, Inc. 296,437 - --------------------------------------------------------------------------- DIVERSIFIED OPERATIONS (1.92%) 14,000 Pittway Corp. - Class A 441,000 - --------------------------------------------------------------------------- ELECTRICAL - CONNECTORS (1.06%) 7,500 Methode Electronics, Inc. 141,562 2,000 Thomas & Betts Corp. 102,000 - --------------------------------------------------------------------------- 243,562 ELECTRONIC - MEASURING INSTRUMENTS (0.95%) 6,500 Tektronix, Inc. 217,750 - --------------------------------------------------------------------------- ELECTRONIC - SEMICONDUCTOR EQUIPMENT (1.67%) 1,500 Novellus Systems, Inc.* 101,156 8,000 Teradyne, Inc.* 282,000 - --------------------------------------------------------------------------- 383,156 ELECTRONIC - SEMICONDUCTOR MANUFACTURING (0.56%) 2,500 Analog Devices, Inc.* 128,125 - --------------------------------------------------------------------------- FINANCE - CONSUMER/COMMERCIAL LOANS (0.88%) 5,000 Household International, Inc. 200,625 - --------------------------------------------------------------------------- FINANCE - EQUITY REIT (6.78%) 9,000 Crescent Real Estate Equities Co. 162,000 19,000 Highwoods Properties, Inc. 491,625 22,000 Liberty Property Trust 499,125 15,000 Mack-Cali Realty Corp. 402,187 - --------------------------------------------------------------------------- 1,554,937 September 30, 1999 - --------------------------------------------------------------------------- SHARES VALUE - --------------------------------------------------------------------------- COMMON STOCK (92.06%) - CONTINUED FINANCE - INVESTMENT BANKERS (1.82%) 7,000 Legg Mason, Inc. $ 268,187 2,200 Merrill Lynch & Co.,Inc. 147,812 - --------------------------------------------------------------------------- 415,999 FINANCE - PUBLIC INVESTMENT FUND - FOREIGN (2.51%) 26,000 Emerging Markets Telecommunications Fund* 268,125 31,000 Morgan Stanley Asia Pacific Fund, Inc.* 306,125 - --------------------------------------------------------------------------- 574,250 FINANCE - PUBLICLY TRADED INVESTMENT FUND (1.20%) 9,000 H & Q Healthcare Investors Fund* 146,812 9,000 H & Q Life Science Investments Fund* 127,125 - --------------------------------------------------------------------------- 273,937 FINANCIAL SERVICES - MISCELLANEOUS (1.97%) 12,500 Heller Financial, Inc. 281,250 7,500 MBNA Corp. 171,093 - --------------------------------------------------------------------------- 452,343 INSURANCE - PROPERTY/CASUALTY/TITLE (2.30%) 5,000 Everest Reinsurance Holdings, Inc. 119,062 11,000 IPC Holdings, Ltd. 206,250 14,000 Old Republic International Corp. 202,125 - --------------------------------------------------------------------------- 527,437 LEISURE - TOYS/GAMES/HOBBY (1.17%) 12,500 Hasbro, Inc. 267,968 - --------------------------------------------------------------------------- MEDIA - NEWSPAPERS (0.41%) 8,000 Hollinger International, Inc. - Class A 95,000 - --------------------------------------------------------------------------- MEDIA - RADIO/TV (1.21%) 6,000 CBS Corp. 277,500 - --------------------------------------------------------------------------- MEDICAL - DENTAL - SUPPLIES (2.14%) 21,000 Sola International, Inc.* 325,500 12,000 Steris Corp.* 165,000 - --------------------------------------------------------------------------- 490,500 MEDICAL - MEDICAL/DENTAL SERVICES (1.26%) 30,000 Omnicare, Inc. 288,750 - --------------------------------------------------------------------------- MEDICAL - OUTPATIENT/HOME CARE (0.58%) 22,000 Healthsouth Corp.* 133,375 - --------------------------------------------------------------------------- MEDICAL - WHOLESALE DRUG/SUNDRIES (1.04%) 9,000 Bergen Brunswig Corp. - Class A 93,375 5,000 McKesson HBOC, Inc. 145,000 - --------------------------------------------------------------------------- 238,375 OFFICE EQUIPMENT - EQUIPMENT & AUTOMATION (1.30%) 15,500 HON Industries, Inc. 298,375 - --------------------------------------------------------------------------- OIL & GAS - DRILLING (1.34%) 14,000 Noble Drilling Corp.* 306,250 - ---------------------------------------------------------------------------
Annual Report September 30, 1999 Berger Funds 31 - -------------------------------------------------------------------------------- BERGER MID CAP VALUE FUND - --------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS - ---------------------------------------------------------------------------
September 30, 1999 - --------------------------------------------------------------------------- SHARES VALUE - --------------------------------------------------------------------------- COMMON STOCK (92.06%) - CONTINUED OIL & GAS - FIELD SERVICES (1.51%) 70,000 Key Energy Group* $ 345,625 - --------------------------------------------------------------------------- OIL & GAS - INTERNATIONAL SPECIALTY (1.77%) 7,500 Murphy Oil Corp. 405,468 - --------------------------------------------------------------------------- OIL & GAS - U.S. EXPLORATION & PRODUCTION (4.92%) 5,000 Barrett Resources Corp.* 184,687 9,000 Devon Energy Corp. 372,937 8,000 Mitchell Energy & Development Corp. - Class A 195,500 14,000 Mitchell Energy & Development Corp. - Class B* 329,000 5,000 Santa Fe Snyder Corp.* 45,000 - --------------------------------------------------------------------------- 1,127,124 OIL & GAS - U.S. INTEGRATED (2.27%) 6,500 Kerr-McGee Corp. 357,906 7,000 Occidental Petroleum Corp. 161,875 - --------------------------------------------------------------------------- 519,781 RETAIL - APPAREL/SHOE (3.78%) 10,000 Payless ShoeSource, Inc.* 505,000 18,000 Ross Stores Inc. 362,250 - --------------------------------------------------------------------------- 867,250 RETAIL - DEPARTMENT STORES (0.30%) 4,500 Saks Inc.* 68,343 - --------------------------------------------------------------------------- RETAIL - DRUG STORES (0.52%) 4,000 Longs Drug Stores Corp. 119,500 - --------------------------------------------------------------------------- RETAIL - MISCELLANEOUS DIVERSIFIED (1.27%) 43,000 Pier 1 Imports, Inc. 290,250 - --------------------------------------------------------------------------- SHOES & RELATED APPAREL (1.54%) 31,000 Wolverine World Wide, Inc. 352,625 - --------------------------------------------------------------------------- TELECOMMUNICATIONS - EQUIPMENT (2.79%) 10,000 Andrew Corp.* 173,750 16,000 Aspect Telecommunications Corp.* 271,500 10,000 Remec, Inc.* 137,500 1,000 Tellabs, Inc.* 56,937 - --------------------------------------------------------------------------- 639,687 September 30, 1999 - --------------------------------------------------------------------------- SHARES/PAR VALUE VALUE - --------------------------------------------------------------------------- COMMON STOCK (92.06%) - CONTINUED TEXTILE - APPAREL MANUFACTURING (0.49%) 4,000 Tommy Hilfiger Corp.* $ 112,750 - --------------------------------------------------------------------------- TRUCKS & PARTS - HEAVY DUTY (1.32%) 23,000 Stewart & Stevenson Services, Inc. 301,875 - --------------------------------------------------------------------------- UTILITY - GAS DISTRIBUTION (1.85%) 9,000 National Fuel Gas Co. 424,687 - --------------------------------------------------------------------------- UTILITY - TELEPHONE (3.05%) 4,000 Telecomunicacoes Brasileiras S.A. - Telebras* 299,750 4,500 Telephone and Data Systems, Inc. 399,656 - --------------------------------------------------------------------------- 699,406 Total Common Stock (cost $19,002,351) 21,099,626 WARRANTS (0.78%) - --------------------------------------------------------------------------- RETAIL - DEPARTMENT STORES (0.78%) 9,500 Federated Department Stores Inc. - C* 178,718 - --------------------------------------------------------------------------- Total Warrants (cost $165,895) 178,718 - --------------------------------------------------------------------------- REPURCHASE AGREEMENT (5.37%) $1,230,000 State Street Repurchase Agreement, 4.85%, dated September 30, 1999, to be repurchased at $1,230,166 on October 1, 1999, collateralized by FNMA Agency Note, 5.65% - April 28, 2000, with a value of $1,259,188 1,230,000 Total Repurchase Agreement (cost $1,230,000) 1,230,000 Total Investments (cost $20,398,246) (98.21%) 22,508,344 Total Other Assets, Less Liabilities (1.79%) 409,663 Net Assets (100.00%) $ 22,918,007 - ---------------------------------------------------------------------------
* Non-income producing security. See notes to financial statements. Berger Funds September 30, 1999 Annual Report 32 - -------------------------------------------------------------------------------- BERGER 100 FUND - -------------------------------------------------------------------------------- Ticker Symbol BEONX Fund Number 43 - -------------------------------------------------------------------------------- PORTFOLIO MANAGER COMMENTARY JOHN B. JARES AND TINO R. SELLITTO - -------------------------------------------------------------------------------- PERFORMANCE The Berger 100 Fund (the "Fund") had a solid total return of 38.96%(1) for the year ended September 30, 1999, which outpaced the 27.80% return for the Standard & Poor's (S&P) 500 Index(2) and the 25.44% gain registered by the S&P MidCap 400 Index(3) for the same period. It has been a roller coaster year for the stock market. During the first few months of our fiscal year (October 1998--early January 1999), the market staged a broad rally that benefited the mid to large cap growth stocks favored by our Fund. In mid-January, however, the market narrowed, and the very largest cap companies once again dominated performance. The market was mixed during the quarter ended June 30, largely as a result of growing concern about rising interest rates and hints of potential inflation. In the last quarter of our fiscal year, the market was nervous about interest rates once again and seemed to lack direction. Most sectors and market indices were down. YEAR IN REVIEW Our Fund was able to perform against this difficult economic backdrop for two reasons. First, we had strong performances from some individual stocks in our portfolio. Second, we were heavily weighted in the technology sector. Our largest sector is the technology sector, which includes telecommunications, Internet, computer software and semiconductor manufacturers. Technology has handily beaten all other sectors for the year and had the best overall performance of any sector in the quarter ended September 30. Several of our technology holdings turned in strong gains for the year, including Microsoft, Intel, Texas Instruments and Xilinx. We continue to believe in the long-term prospects for technology because of the vital role that it plays in the operations of businesses around the world. Energy was our second-best performing sector, even after a late sell-off in the quarter ended September 30, 1999, that was attributable to investors focusing on near-term earnings revisions rather than on industry growth prospects over the next two years. Compared with the S&P 500 Index, we have been slightly overweighted in this sector all year and ended the year with a total of 7.2% of Fund net assets committed to energy stocks. We believe that there are strong fundamentals in energy. Oil prices have gone up because of a decrease in oil production and an increase in demand attributable to recovering world economies. We continue to like the growth potential in the energy sector. Among other Fund sectors, the healthcare and consumer groups had mixed results over the year. We had solid performance from Genentech, a large biomedical company with a strong product pipeline, but had poor performance from American Home Products, a company currently facing litigation surrounding its Fen-Phen drug, which is used to treat obesity. Among the consumer-related stocks in our portfolio, Royal Caribbean Cruises and Best Buy Co. turned in strong performances for the year. Most stocks in the financial sector underperformed over the year primarily because of the market's concerns about rising interest rates and year 2000 issues. Among our financial stocks, leading on-line broker Charles Schwab was hit hard. We believe that the long-term prospects for Schwab are positive, however, and we look for this company to excel in 2000. With our financial holdings reduced to just over 3% of Fund net assets, we are now underweighted in this sector. LOOKING AHEAD We expect that two factors could create market volatility in the near term. The first is rising interest rates, which continue to nag the equity market. The second is the market's focus on year 2000 issues, which we believe will cause investor concern the rest of this year. The result may be that investors crowd into large cap companies, which are perceived to be safer and more stable investments. For the long term, the robust U.S. economic growth and the continuing recovery of international economies should provide a solid backdrop for strong corporate earnings. 1. Performance figures are based on historical results and are not intended to be indicative of future 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. 2. The S&P 500 Index is an unmanaged index, with dividends reinvested, which consists of the common stocks of 500 publicly traded U.S. companies. It is a generally recognized indicator used to measure overall performance of the U.S. stock market. One cannot invest directly in an index. 3. The S&P MidCap 400 Index is an unmanaged index, with dividends reinvested, and is generally representative of the market for mid-sized companies. One cannot invest directly in an index. Annual Report September 30, 1999 Berger Funds 33 - -------------------------------------------------------------------------------- BERGER 100 FUND - -------------------------------------------------------------------------------- PERFORMANCE OVERVIEW - -------------------------------------------------------------------------------- COMPARISON OF CHANGE IN VALUE OF BERGER 100 FUND VS. S&P 500 INDEX AND COST OF LIVING INDEX [GRAPH]
Berger S&P 500 Cost of 100 Fund Index Living Index 9/30/89 $10,000 $10,000 $10,000 9/30/90 $8,316 $9,077 $10,816 9/30/91 $15,218 $11,901 $10,976 9/30/92 $16,279 $13,214 $11,304 9/30/93 $22,954 $14,929 $11,608 9/30/94 $22,149 $15,479 $11,952 9/30/95 $26,215 $20,079 $12,256 9/30/96 $28,668 $24,160 $12,624 9/30/97 $36,249 $33,927 $12,896 9/30/98 $30,422 $37,000 $13,066 9/30/99 $42,273 $47,283 $13,368
BERGER 100 FUND* AVERAGE ANNUAL TOTAL RETURN
As of September 30, 1999 - -------------------------------------- 1 Year 38.96% - -------------------------------------- 5 Year 13.80% - -------------------------------------- 10 Year 15.51% - --------------------------------------
*Performance figures are historical and do not represent future results. Investment returns and principal value will vary, and you may have a loss when you sell shares. - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS - --------------------------------------------------------------------------------
September 30, 1999 - --------------------------------------------------------------------------- SHARES VALUE - --------------------------------------------------------------------------- COMMON STOCK (100.33%) AUTO MANUFACTURERS - FOREIGN (0.79%) 169,000 Toyota Motor Corp. Sponsored ADR $ 10,541,375 - --------------------------------------------------------------------------- BANKS - MONEY CENTER (0.65%) 156,800 Bank of America Corp. 8,731,800 - --------------------------------------------------------------------------- BEVERAGE - SOFT DRINKS (2.80%) 378,600 Pepsico, Inc. 11,452,650 146,800 The Coca-Cola Co. 7,055,575 1,105,000 The Pepsi Bottling Group, Inc. 18,854,062 - --------------------------------------------------------------------------- 37,362,287 BUILDING PRODUCTS - WOOD (0.42%) 130,000 Willamette Industries, Inc. 5,606,250 - --------------------------------------------------------------------------- COMPUTER - LOCAL NETWORKS (2.41%) 469,200 Cisco Systems, Inc.* 32,169,525 - --------------------------------------------------------------------------- COMPUTER - MANUFACTURERS (0.48%) 100,000 Apple Computer, Inc.* 6,331,250 - --------------------------------------------------------------------------- COMPUTER - MEMORY DEVICES (1.02%) 190,000 EMC Corp.* 13,573,125 - --------------------------------------------------------------------------- COMPUTER - SERVICES (0.50%) 290,000 IMS Health, Inc. 6,615,625 - --------------------------------------------------------------------------- September 30, 1999 - --------------------------------------------------------------------------- SHARES VALUE - --------------------------------------------------------------------------- COMMON STOCK (100.33%) - CONTINUED COMPUTER SOFTWARE - DESKTOP (5.01%) 737,300 Microsoft Corp.* $ 66,771,745 - --------------------------------------------------------------------------- COMPUTER SOFTWARE - ENTERPRISE (2.59%) 231,800 J.D. Edwards & Co.* 4,802,606 175,000 Oracle Corp.* 7,962,500 375,000 SAP A.G. ADR 14,156,250 100,000 VERITAS Software Corp.* 7,593,750 - --------------------------------------------------------------------------- 34,515,106 DIVERSIFIED OPERATIONS (2.79%) 360,000 Tyco International Ltd. 37,170,000 - --------------------------------------------------------------------------- ELECTRONIC - MILITARY SYSTEMS (0.81%) 189,300 General Motors Corp. - Class H* 10,837,425 - --------------------------------------------------------------------------- ELECTRONIC - SEMICONDUCTOR EQUIPMENT (5.05%) 260,500 Applied Materials, Inc.* 20,286,437 87,500 ASM Lithography Holding N.V.* 5,867,968 194,600 KLA-Tencor Corp.* 12,649,000 235,000 Lam Research Corp.* 14,335,000 91,900 STMicroelectronics N.V. 6,800,600 208,600 Teradyne, Inc.* 7,353,150 - --------------------------------------------------------------------------- 67,292,155
Berger Funds September 30, 1999 Annual Report 34 - -------------------------------------------------------------------------------- BERGER 100 FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS - --------------------------------------------------------------------------------
September 30, 1999 - --------------------------------------------------------------------------- SHARES VALUE - --------------------------------------------------------------------------- COMMON STOCK (100.33%) - CONTINUED ELECTRONIC - SEMICONDUCTOR MANUFACTURING (8.99%) 202,400 Altera Corp. $ 8,779,100 400,000 Intel Corp. 29,725,000 182,800 Maxim Integrated Products, Inc.* 11,533,537 83,700 SDL, Inc.* 6,387,356 422,000 Texas Instruments Inc. 34,709,500 439,400 Xilinx, Inc.* 28,794,431 - --------------------------------------------------------------------------- 119,928,924 FINANCE - CONSUMER/COMMERCIAL LOANS (0.25%) 94,000 Associates First Capital Corp. - Class A 3,384,000 - --------------------------------------------------------------------------- FINANCE - INVESTMENT BANKERS (0.62%) 243,600 Charles Schwab Corp. 8,206,275 - --------------------------------------------------------------------------- FINANCE - MORTGAGE & RELATED SERVICES (0.77%) 106,800 Fannie Mae 6,695,025 67,900 Freddie Mac 3,530,800 - --------------------------------------------------------------------------- 10,225,825 HOUSEHOLD - AUDIO/VIDEO (0.26%) 23,500 Sony Corp. ADR 3,526,468 - --------------------------------------------------------------------------- INSURANCE - PROPERTY/CASUALTY/TITLE (0.97%) 149,500 American International Group, Inc. 12,997,156 - --------------------------------------------------------------------------- INTERNET - E*COMMERCE (1.16%) 73,500 eBay, Inc.* 10,368,093 398,000 TD Waterhouse Group, Inc.* 5,149,125 - --------------------------------------------------------------------------- 15,517,218 INTERNET - ISP/CONTENT (4.29%) 330,000 America Online, Inc.* 34,320,000 97,700 Homestore.Com, Inc.* 4,072,868 54,300 Internet Initiative Japan Inc.* 3,475,200 125,500 Rhythms NetConnections Inc.* 4,329,750 61,500 Yahoo!, Inc.* 11,039,250 - --------------------------------------------------------------------------- 57,237,068 INTERNET - NETWORK SECURITY/SOLUTIONS (0.79%) 80,000 Internap Network Services Corp.* 3,570,000 37,755 Juniper Networks, Inc.* 6,909,165 - --------------------------------------------------------------------------- 10,479,165 INTERNET - SOFTWARE (1.55%) 83,000 CMGI, Inc.* 8,507,500 80,000 Liquid Audio, Inc.* 2,960,000 61,100 Phone.com, Inc.* 9,256,650 - --------------------------------------------------------------------------- 20,724,150 LEISURE - PRODUCTS (1.61%) 471,600 The Seagram Co. Ltd. 21,457,800 - --------------------------------------------------------------------------- September 30, 1999 - --------------------------------------------------------------------------- SHARES VALUE - --------------------------------------------------------------------------- COMMON STOCK (100.33%) - CONTINUED LEISURE - SERVICES (5.17%) 222,000 Carnival Corp. $ 9,657,000 246,000 Cheap Tickets, Inc.* 7,964,250 850,000 Royal Caribbean Cruises Ltd. 38,250,000 173,000 SFX Entertainment, Inc.* 5,276,500 300,300 The Walt Disney Co. 7,770,262 - --------------------------------------------------------------------------- 68,918,012 MEDIA - CABLE TV (2.25%) 186,900 EchoStar Communications Corp.* 16,972,856 215,000 Time Warner, Inc. 13,061,250 - --------------------------------------------------------------------------- 30,034,106 MEDIA - RADIO/TV (5.11%) 130,000 AMFM, Inc.* 7,913,750 210,000 AT&T Corp. - Liberty Media Group* 7,796,250 454,200 Clear Channel Communications, Inc.* 36,279,225 550,000 Infinity Broadcasting Corp.* 16,121,875 - --------------------------------------------------------------------------- 68,111,100 MEDICAL - BIOMED/GENETICS (3.32%) 76,340 Amgen, Inc.* 6,221,710 260,200 Genentech, Inc.* 38,070,512 - --------------------------------------------------------------------------- 44,292,222 MEDICAL - DRUG/DIVERSIFIED (1.58%) 101,900 Bristol-Myers Squibb Co. 6,878,250 213,400 Warner-Lambert Co. 14,164,425 - --------------------------------------------------------------------------- 21,042,675 MEDICAL - ETHICAL DRUGS (2.91%) 317,400 American Home Products Corp. 13,172,100 400,000 Eli Lilly & Co. 25,600,000 - --------------------------------------------------------------------------- 38,772,100 MEDICAL - MEDICAL/DENTAL SUPPLIES (0.68%) 137,500 Bausch & Lomb, Inc. 9,066,406 - --------------------------------------------------------------------------- MEDICAL - PRODUCTS (2.01%) 500,100 Guidant Corp.* 26,817,862 - --------------------------------------------------------------------------- OIL & GAS - DRILLING (1.55%) 684,000 ENSCO International, Inc. 12,354,750 270,000 Transocean Offshore, Inc. 8,268,750 - --------------------------------------------------------------------------- 20,623,500 OIL & GAS - FIELD SERVICES (1.83%) 310,000 Halliburton Co. 12,710,000 188,200 Schlumberger Ltd. 11,727,212 - --------------------------------------------------------------------------- 24,437,212 OIL & GAS - INTERNATIONAL INTEGRATED (1.11%) 250,000 Royal Dutch Petroleum Co. - NY Shares 14,765,625 - --------------------------------------------------------------------------- OIL & GAS - PRODUCTION/PIPELINE (0.53%) 170,000 Enron Corp. 7,012,500 - ---------------------------------------------------------------------------
Annual Report September 30, 1999 Berger Funds 35 - -------------------------------------------------------------------------------- BERGER 100 FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS - --------------------------------------------------------------------------------
September 30, 1999 - --------------------------------------------------------------------------- SHARES VALUE - --------------------------------------------------------------------------- COMMON STOCK (100.33%) - CONTINUED OIL & GAS - U.S. EXPLORATION & PRODUCTION (1.32%) 480,000 Burlington Resources, Inc. $ 17,640,000 - --------------------------------------------------------------------------- OIL & GAS - U.S. INTEGRATED (0.84%) 385,000 USX-Marathon Group 11,261,250 - --------------------------------------------------------------------------- PAPER & PAPER PRODUCTS (0.84%) 233,600 International Paper Co. 11,227,400 - --------------------------------------------------------------------------- RETAIL - APPAREL/SHOE (0.81%) 93,500 Abercrombie & Fitch Co.* 3,184,843 197,000 Intimate Brands, Inc. 7,670,687 - --------------------------------------------------------------------------- 10,855,530 RETAIL - CONSUMER ELECTRIC (1.88%) 250,000 Best Buy Co., Inc.* 15,515,625 225,600 Circuit City Stores, Inc. 9,517,500 - --------------------------------------------------------------------------- 25,033,125 RETAIL - MAJOR DISCOUNT CHAINS (2.16%) 180,000 Costco Wholesale Corp.* 12,960,000 265,000 Dayton-Hudson Corp. 15,916,562 - --------------------------------------------------------------------------- 28,876,562 RETAIL - SUPER/MINI MARKETS (2.14%) 422,900 Safeway, Inc.* 16,096,631 565,000 The Kroger Co.* 12,465,312 - --------------------------------------------------------------------------- 28,561,943 RETAIL/WHOLESALE - BUILDING PRODUCTS (0.18%) 50,000 Lowes Cos., Inc. 2,437,500 - --------------------------------------------------------------------------- RETAIL/WHOLESALE - COMPUTERS/CELLULAR (0.82%) 211,000 Tandy Corp. 10,906,062 - --------------------------------------------------------------------------- SOAP & CLEANING PREPARATIONS (1.09%) 154,500 Procter & Gamble Co. 14,484,375 - --------------------------------------------------------------------------- TELECOMMUNICATIONS - CELLULAR (2.35%) 523 NTT Mobile Communications Network, Inc. 10,323,338 187,500 Sprint Corp. (PCS Group)* 13,980,468 116,000 VoiceStream Wireless Corp.* 7,159,375 - --------------------------------------------------------------------------- 31,463,181 TELECOMMUNICATIONS - EQUIPMENT (6.74%) 62,500 JDS Uniphase Corp.* 7,113,281 411,990 Lucent Technologies, Inc. 26,727,851 268,825 Motorola, Inc. 23,656,600 201,000 Nokia Corp. ADR 18,052,312 76,000 QUALCOMM Incorp.* 14,378,250 - --------------------------------------------------------------------------- 89,928,294 September 30, 1999 - --------------------------------------------------------------------------- SHARES/PAR VALUE VALUE - --------------------------------------------------------------------------- COMMON STOCK (100.33%) - CONTINUED TELECOMMUNICATIONS - SERVICES (3.57%) 100,000 AT&T Corp. $ 4,350,000 412,700 MCI WorldCom, Inc.* 29,662,812 458,000 Qwest Communications International, Inc.* 13,539,625 - --------------------------------------------------------------------------- 47,552,437 UTILITY - WATER SUPPLY (0.96%) 747,900 Azurix Corp.* 12,854,531 Total Common Stock (cost $1,218,591,060) 1,338,177,227 - --------------------------------------------------------------------------- REPURCHASE AGREEMENT (0.16%) $2,132,000 State Street Repurchase Agreement, 4.85% dated September 30, 1999, to be repurchased at $2,132,287 on October 1, 1999, collateralized by FNMA Agency Note, 5.65% - April 28, 2000 with a value of $2,175,426. 2,132,000 Total Repurchase Agreement (cost $2,132,000) 2,132,000 Total Investments (cost $1,220,723,060) (100.49%) 1,340,309,227 Total Other Assets, Less Liabilities (-0.49%) (6,515,532) Net Assets (100.00%) $1,333,793,695 - ---------------------------------------------------------------------------
* Non-income producing security. ADR - American Depositary Receipt. See notes to financial statements. Berger Funds September 30, 1999 Annual Report 36 - -------------------------------------------------------------------------------- BERGER/BIAM INTERNATIONAL FUND - -------------------------------------------------------------------------------- Ticker Symbol BBINX Fund Number 349 - -------------------------------------------------------------------------------- BANK OF IRELAND ASSET PORTFOLIO MANAGER COMMENTARY MANAGEMENT (U.S.) LTD. - -------------------------------------------------------------------------------- PERFORMANCE The Berger/BIAM International Fund (the "Fund") had a total return of 29.64%(1) for the year ended September 30, 1999 compared to 31.32% for the MSCI EAFE Index.(2) Global equity markets began the fiscal year last October with strong performances, prompted primarily by interest rate reductions in both the U.S. and Europe. In January, European markets benefited from the introduction of the new single currency, the euro, and Japanese markets enjoyed positive investor sentiment as a result of overseas buying. Markets in the rest of the Pacific region turned in mixed results largely due to a pick-up in sentiment towards Japan and the phenomenon of western multinationals seeking stakes in Asian companies. By the second calendar quarter 1999, the new euro currency received negative press following a steady decline against the U.S. dollar and other major currencies. We believe the euro is acting as a catalyst for change, however, and increasing competition across Europe. We remained extremely cautious about investing in Southeast Asia this year, even though the acute financial crisis appears to be over. Although Japanese figures have been strong, we believe Japan is a stock-picker's market because not all companies will deliver on the promises they are making to investors. As a result, we added to our Japanese holdings over the year on a stock-by-stock basis. YEAR IN REVIEW Two groups of stocks led our portfolio higher this fiscal year: those in the Growth in Telecommunications theme and Japanese-quoted stocks, particularly those in our Technological Innovation theme. The most notable performers among Growth in Telecommunications stocks for the year were German-quoted Mannesmann and NTT Mobile Communications Network. NTT Mobile Communications Network was among our strongest contributors during the past six months. The company is Japan's dominant cellular phone operator and its stock rose on the belief that the company will benefit from growing demand for data transmission services through cellular phones. Two holdings - UK-quoted Vodafone AirTouch Group and Telecom Italia - were involved in the merger and acquisition activity that engulfed global telecommunication companies earlier in the year. Japanese-quoted stocks began their comeback early in our fiscal year and have been our leading performers since March 31. Electronics exporters, in particular, did well on the back of buoyant global demand for PCs, copiers, printers, mobile phones and their related components. Leading the way was Murata Manufacturing, which raised its net profit forecast by 25% for the coming year and announced plans to increase its production capacity in response to demand for the electronic components used in cellular phones. Semiconductor manufacturer Rohm also increased its profit projections on the heels of higher-than-expected sales of circuits for mobile communications equipment. The primary reason we slightly lagged our benchmark for the year was the performance of stocks in the Positive Banking Environment theme. After strengthening early in the year, these stocks faltered the second half, largely due to a negative interest rate environment. (Both the U.S. Federal Reserve Board and the Bank of England raised interest rates in response to upward pressure on inflation rates attributable to a stronger global economy.) One example of the impact of interest-rate concerns was the response to National Australia Bank. Even though the bank released results that were greeted positively by analysts, its stock price fell. LOOKING AHEAD The pace of global economic change continues to accelerate and all of the world's major economic regions are expanding. Europe is benefiting from the combined effects of a monetary policy biased towards stimulating growth, a competitive currency and general global recovery. The latest economic data in the UK also reveal a significant acceleration in growth. Surveys show that business confidence is increasing while unemployment is falling. Economic activity in the Pacific Region continues its strong rebound. As global growth gathers pace, we have been paying close attention to developments in Japan. We are gradually beginning to be convinced that this year's economic recovery may be sustainable. But, while many Japanese companies are making very encouraging statements about restructuring, there is significant execution risk for investors who are looking to take advantage of these changes. There is a danger that Japanese companies may avoid making painful decisions simply because their stock prices have recovered from their lows. Having said that, we believe that there is real and substantial restructuring underway in Japan and we are attempting to identify companies that are in the forefront of this change. 1. Performance figures are based on historical results and are not intended to be indicative of future 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. 2. The Morgan Stanley Capital International EAFE Index represents major overseas stock markets. It is an unmanaged index, with dividends reinvested. One cannot invest directly in an index. Annual Report September 30, 1999 Berger Funds 37 - -------------------------------------------------------------------------------- BERGER/BIAM INTERNATIONAL FUND - -------------------------------------------------------------------------------- PERFORMANCE OVERVIEW - -------------------------------------------------------------------------------- COMPARISON OF CHANGE IN VALUE OF BERGER/BIAM INTERNATIONAL FUND VS. MSCI EAFE INDEX AND COST OF LIVING INDEX [GRAPH] Berger/BIAM International Fund $32,984 MSCI EAFE Index $18,135 Cost of Living Index $13,368
BERGER/BIAM INTERNATIONAL FUND* AVERAGE ANNUAL TOTAL RETURN As of September 30, 1999 - ---------------------------------------------------------- 1 Year 29.64% - ---------------------------------------------------------- 5 Year 11.74% - ---------------------------------------------------------- 10 Year 12.68% - ----------------------------------------------------------
*Performance figures are historical and do not represent future results. Investment returns and principal value will vary, and you may have a loss when you sell shares. Performance figures are historical and, in part, reflect the performance of a pool of assets advised by BIAM (Bank of Ireland Asset Management) for periods before the Fund commenced operations on November 7, 1996, adjusted to reflect any increased expenses associated with operating the Fund. The asset pool was not registered with the Securities and Exchange Commission and therefore was not subject to the investment restrictions imposed by law on registered mutual funds. If the pool had been registered, its performance might have been adversely affected. Berger Funds September 30, 1999 Annual Report 38 - -------------------------------------------------------------------------------- BERGER GROWTH AND INCOME FUND - -------------------------------------------------------------------------------- Ticker Symbol BEOOX Fund Number 44 - -------------------------------------------------------------------------------- PORTFOLIO MANAGER COMMENTARY TINO R. SELLITTO - -------------------------------------------------------------------------------- PERFORMANCE The Berger Growth and Income Fund (the "Fund") had a total return of 38.67%(1) for the year ended September 30, 1999. This was significantly higher than the 27.80% gain registered by the Standard & Poor's (S&P) 500 Index(2) for the same period. YEAR IN REVIEW It was a roller coaster year for large, high-quality growth companies. After two Federal Reserve Board interest rate cuts in the fourth calendar quarter 1998, the S&P 500 and the Nasdaq soared to new highs. Strong economic growth and moderate inflation in the first calendar quarter 1999 resulted in double-digit gains for the S&P 500 Index. However, fears of rising interest rates and potential inflation caused investors to move away from large growth stocks in the quarter ended June 30. The third calendar quarter of 1999 was highly volatile, resulting in negative returns for both our Fund and its benchmark index. Nevertheless, the Fund was able to deliver an outstanding gain and significantly outperform the S&P 500 Index for the year. The key reason was our overweighting in the technology sector, which includes telecommunications, cable and computers. We continue to believe in the long-term prospects for technology. Technology is the largest sector in the Fund and, over the year, we increased the percentage of Fund net assets invested in this sector from 27.4% on September 30, 1998, to 44.3% on September 30, 1999. Strong performances were turned in from technology companies such as Intel, Microsoft, Nokia and Sun Microsystems. In the quarter ended September 30, 1999, the Fund benefited particularly from strong performances by companies in other technology industries, especially telecommunication and communication services. These included Sprint PCS Group, EchoStar Communications and Clear Channel Communications, which now owns the largest number of radio stations in the U.S. as well as a number of outdoor advertising displays. Early in the year, we identified signs of expansion in the energy sector, so we increased our weighting. We believe that there are very strong fundamentals in the energy sector. Oil prices have gone up because of a decrease in oil production and an increase in demand attributable to recovering world economies. We continue to like the growth potential in this sector. Among our best performers in this sector were Halliburton and ENSCO International. Despite the healthcare sector's poor performance during the last year, our Fund had success in this sector primarily because of our biotechnology stocks. Late last year, we identified several strong companies. Amgen has been one of the most successful companies in the portfolio because of its strong drug pipeline. Another company we added was Genentech, a biotechnology company that also has a strong pipeline of new drugs, including Herceptin, used to treat metastatic breast cancer, and Rituxan, used to treat non-Hodgkin's lymphoma. American Home Products has been a strong performer for the first half of the year, but the stock was hit hard in the third quarter 1999 because of the litigation surrounding its Fen-Phen drug, which was used to fight obesity. We have continued our underweighting in the Financial sector. This year the sector's performance has been hit hard because of the market's concerns about rising short-term interest rates. In addition, the poor performance in this sector in the third quarter 1999 was attributable to the market's global effects regarding Y2K. Those stocks most affected include First Tennessee National and Charles Schwab. Although we expect some volatility in this sector for the remainder of the year, we believe the long-term prospects of these individual companies are good, and we look for them to excel in 2000. LOOKING AHEAD We expect that two factors could create market volatility over the near term. The first factor is rising interest rates, which continue to nag the equity market. The second factor is the market's focus on year 2000 issues that we believe will cause investor concern the rest of the year. The result may be that investors crowd into large cap companies, which are perceived to be safer and more stable investments. For the long term, the robust U.S. economic growth and the continuing recovery of international economies should provide a solid backdrop for strong corporate earnings. 1. Past performance does not guarantee future results. 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. 2. The S&P 500 Index is an unmanaged index, with dividends reinvested, which consists of the common stocks of 500 publicly traded U.S. companies. It is a generally recognized indicator used to measure overall performance of the U.S. stock market. One cannot invest directly in an index. Annual Report September 30, 1999 Berger Funds 39 - -------------------------------------------------------------------------------- BERGER GROWTH AND INCOME FUND - -------------------------------------------------------------------------------- PERFORMANCE OVERVIEW - -------------------------------------------------------------------------------- COMPARISON OF CHANGE IN VALUE OF BERGER GROWTH AND INCOME FUND VS. S&P 500 INDEX AND COST OF LIVING INDEX [GRAPH]
Berger Growth and S&P 500 Cost of Income Fund Index Living Index 9/30/89 $10,000 $10,000 $10,000 9/30/90 $8,482 $9,077 $10,616 9/30/91 $13,467 $11,901 $10,976 9/30/92 $14,538 $13,214 $11,304 9/30/93 $18,388 $14,929 $11,608 9/30/94 $18,922 $15,479 $11,952 9/30/95 $21,580 $20,079 $12,256 9/30/96 $23,882 $24,160 $12,624 9/30/97 $32,135 $33,927 $12,896 9/30/98 $31,621 $37,000 $13,088 9/30/99 $43,849 $47,283 $13,368
BERGER GROWTH AND INCOME FUND* AVERAGE ANNUAL TOTAL RETURN As of September 30, 1999 - -------------------------------------------------- 1 Year 38.67% - -------------------------------------------------- 5 Year 18.30% - -------------------------------------------------- 10 Year 15.93% - --------------------------------------------------
*Performance figures are historical and do not represent future results. Investment returns and principal value will vary, and you may have a loss when you sell shares. - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS - --------------------------------------------------------------------------------
September 30, 1999 - --------------------------------------------------------------------------- SHARES VALUE - --------------------------------------------------------------------------- COMMON STOCK (81.87%) AUTO MANUFACTURERS - FOREIGN (1.58%) 96,000 Toyota Motor Corp. Sponsored ADR $ 5,988,000 - --------------------------------------------------------------------------- BANKS - SOUTHEAST (1.06%) 142,800 First Tennessee National Corp. 4,016,250 - --------------------------------------------------------------------------- BANKS - SUPER REGIONAL (1.49%) 67,500 Northern Trust Corp. 5,636,250 - --------------------------------------------------------------------------- BANKS - WEST/SOUTHWEST (1.30%) 89,300 Zions Bancorp. 4,922,662 - --------------------------------------------------------------------------- CHEMICALS - BASIC (1.58%) 139,800 Akzo Nobel N.V. ADR* 5,976,450 - --------------------------------------------------------------------------- COMPUTER - LOCAL NETWORKS (2.69%) 148,800 Cisco Systems, Inc.* 10,202,100 - --------------------------------------------------------------------------- COMPUTER - MANUFACTURERS (2.09%) 85,100 Sun Microsystems, Inc.* 7,914,300 - --------------------------------------------------------------------------- COMPUTER - MEMORY DEVICES (1.31%) 69,500 Network Appliance, Inc.* 4,977,937 - --------------------------------------------------------------------------- COMPUTER - SERVICES (1.05%) 174,300 IMS Health, Inc. 3,976,218 - --------------------------------------------------------------------------- September 30, 1999 - --------------------------------------------------------------------------- SHARES VALUE - --------------------------------------------------------------------------- COMMON STOCK (81.87%) - CONTINUED COMPUTER SOFTWARE - DESKTOP (4.19%) 175,600 Microsoft Corp.* $ 15,902,787 - --------------------------------------------------------------------------- COMPUTER SOFTWARE - ENTERPRISE (1.82%) 182,500 SAP A.G. ADR 6,889,375 - --------------------------------------------------------------------------- ELECTRONIC - SEMICONDUCTOR EQUIPMENT (3.42%) 76,000 Applied Materials, Inc.* 5,918,500 51,800 STMicroelectronics N.V. 3,833,200 91,200 Teradyne, Inc.* 3,214,800 - --------------------------------------------------------------------------- 12,966,500 ELECTRONIC - SEMICONDUCTOR MANUFACTURING (5.34%) 126,200 Intel Corp. 9,378,237 73,200 Linear Technology Corp. 4,302,787 80,000 Texas Instruments, Inc. 6,580,000 - --------------------------------------------------------------------------- 20,261,024 FINANCE - INVESTMENT BANKERS (1.90%) 138,000 Charles Schwab Corp. 4,648,875 41,900 The Goldman Sachs Group, Inc. 2,555,900 - --------------------------------------------------------------------------- 7,204,775 FINANCE - INVESTMENT MANAGEMENT (1.13%) 47,900 Morgan Stanley Dean Witter & Co. 4,272,081 - --------------------------------------------------------------------------- HOUSEHOLD - AUDIO/VIDEO (1.05%) 26,500 Sony Corp. ADR 3,976,656 - ---------------------------------------------------------------------------
Berger Funds September 30, 1999 Annual Report 40 - --------------------------------------------------------------------------------
September 30, 1999 - --------------------------------------------------------------------------- SHARES VALUE - --------------------------------------------------------------------------- COMMON STOCK (81.87%) - CONTINUED INTERNET - ISP/CONTENT (0.98%) 37,600 Homestore.Com, Inc.* $ 1,567,450 12,100 Yahoo!, Inc.* 2,171,950 - --------------------------------------------------------------------------- 3,739,400 INTERNET - NETWORK SECURITY/SOLUTIONS (0.51%) 10,500 Juniper Networks, Inc.* 1,921,500 - --------------------------------------------------------------------------- LEISURE - PRODUCTS (0.89%) 74,400 The Seagram Company Ltd. 3,385,200 - --------------------------------------------------------------------------- LEISURE - SERVICES (1.70%) 104,400 Cheap Tickets, Inc.* 3,379,950 101,000 SFX Entertainment, Inc.* 3,080,500 - --------------------------------------------------------------------------- 6,460,450 MEDIA - CABLE TV (2.21%) 111,400 Comcast Corp. 4,442,075 43,500 EchoStar Communications Corp.* 3,950,343 - --------------------------------------------------------------------------- 8,392,418 MEDIA - RADIO/TV (1.94%) 250,800 Infinity Broadcasting Corp.* 7,351,575 - --------------------------------------------------------------------------- MEDICAL - BIOMED/GENETICS (4.84%) 95,000 Amgen, Inc.* 7,742,500 72,600 Genentech, Inc.* 10,622,287 - --------------------------------------------------------------------------- 18,364,787 MEDICAL - DRUG/DIVERSIFIED (1.09%) 61,200 Bristol-Myers Squibb Co. 4,131,000 - --------------------------------------------------------------------------- MEDICAL - ETHICAL DRUGS (2.07%) 105,300 American Home Products Corp. 4,369,950 54,200 Eli Lilly & Co. 3,468,800 - --------------------------------------------------------------------------- 7,838,750 MEDICAL - PRODUCTS (1.70%) 120,000 Guidant Corp.* 6,435,000 - --------------------------------------------------------------------------- OIL & GAS - DRILLING (1.46%) 307,700 ENSCO International, Inc. 5,557,831 - --------------------------------------------------------------------------- OIL & GAS - FIELD SERVICES (2.83%) 130,400 Halliburton Co. 5,346,400 86,460 Schlumberger Ltd. 5,387,538 - --------------------------------------------------------------------------- 10,733,938 OIL & GAS - INTERNATIONAL INTEGRATED (2.51%) 126,200 Royal Dutch Petroleum Co. 7,453,687 32,900 Total Fina S.A. ADR 2,087,093 - --------------------------------------------------------------------------- 9,540,780 OIL & GAS - PRODUCTION/PIPELINE (3.55%) 198,000 Enron Corp. 8,167,500 141,700 The Williams Companies, Inc. 5,304,893 - --------------------------------------------------------------------------- 13,472,393 September 30, 1999 - --------------------------------------------------------------------------- SHARES/PAR VALUE VALUE - --------------------------------------------------------------------------- COMMON STOCK (81.87%) - CONTINUED OIL & GAS - U.S. EXPLORATION & PRODUCTION (2.63%) 186,800 Burlington Resources Inc. $ 6,864,900 129,700 Evergreen Resources, Inc.* 3,120,906 - --------------------------------------------------------------------------- 9,985,806 RETAIL - APPAREL/SHOE (1.41%) 137,340 Intimate Brands, Inc. 5,347,676 - --------------------------------------------------------------------------- RETAIL - MAJOR DISCOUNT CHAINS (3.23%) 69,100 Costco Wholesale Corp.* 4,975,200 121,100 Dayton-Hudson Corp. 7,273,568 - --------------------------------------------------------------------------- 12,248,768 TELECOMMUNICATIONS - CELLULAR (1.00%) 51,200 Sprint Corp. (PCS Group)* 3,817,600 - --------------------------------------------------------------------------- TELECOMMUNICATIONS - EQUIPMENT (7.33%) 125,809 Corning Inc. 8,625,779 109,100 Lucent Technologies, Inc. 7,077,862 134,900 Nokia Corp. ADR 12,115,706 - --------------------------------------------------------------------------- 27,819,347 TELECOMMUNICATIONS - SERVICES (1.28%) 67,700 MCI WorldCom, Inc.* 4,865,937 - --------------------------------------------------------------------------- UTILITY - TELEPHONE (2.45%) 132,400 ALLTEL Corp. 9,317,650 - --------------------------------------------------------------------------- UTILITY - WATER SUPPLY (1.26%) 278,400 Azurix Corp.* 4,785,000 - --------------------------------------------------------------------------- Total Common Stock (cost $257,441,225) 310,596,171 - --------------------------------------------------------------------------- CORPORATE DEBT - CONVERTIBLE (11.75%) COMPUTER - MEMORY DEVICES (2.79%) $1,671,000 EMC Corp. 3.25%, 3/15/2002 10,592,051 - --------------------------------------------------------------------------- COMPUTER SOFTWARE - ENTERPRISE (0.55%) 1,980,000 VERITAS Software Corp. 1.86%, 8/13/2006 2,091,375 - --------------------------------------------------------------------------- ELECTRONIC - SEMICONDUCTOR MANUFACTURING (1.78%) 3,933,000 Conexant Systems - 144A 4.25%, 5/1/2006 6,745,095 - --------------------------------------------------------------------------- INTERNET - ISP/CONTENT (1.87%) 868,000 America Online, Inc. 4.00%, 11/15/2002 7,089,390 - --------------------------------------------------------------------------- MEDIA - RADIO/TV (3.60%) 9,708,000 Clear Channel Communications, Inc. 2.62%, 4/1/2003 13,639,740 - ---------------------------------------------------------------------------
Annual Report September 30, 1999 Berger Funds 41 - -------------------------------------------------------------------------------- BERGER GROWTH AND INCOME FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS - --------------------------------------------------------------------------------
September 30, 1999 - --------------------------------------------------------------------------- SHARES/PAR VALUE VALUE - --------------------------------------------------------------------------- CORPORATE DEBT - CONVERTIBLE (11.75%) - CONTINUED RETAIL/WHOLESALE - BUILDING PRODUCTS (1.16%) $1,488,000 The Home Depot, Inc. 3.25%, 10/1/2001 $ 4,413,780 - --------------------------------------------------------------------------- Total Corporate Debt - Convertible (cost $27,051,929) 44,571,431 - --------------------------------------------------------------------------- PREFERRED STOCK - CONVERTIBLE (6.51%) MEDIA - CABLE TV (2.18%) 81,100 Houston Industries, Inc. - ACES, 7.00% 8,272,200 - --------------------------------------------------------------------------- TELECOMMUNICATIONS - CELLULAR (1.08%) 43,270 Omnipoint Corp., 7.00%* 4,094,423 - --------------------------------------------------------------------------- TELECOMMUNICATIONS - EQUIPMENT (1.07%) 15,275 Qualcomm Financial Trust, 5.75% 4,051,693 - --------------------------------------------------------------------------- TELECOMMUNICATIONS - SERVICES (2.18%) 163,400 Qwest Trends Trust - 144A, 5.75% 8,251,700 - --------------------------------------------------------------------------- Total Preferred Stock - Convertible (cost $24,964,955) 24,670,016 - --------------------------------------------------------------------------- REPURCHASE AGREEMENT (0.03%) $118,000 State Street Repurchase Agreement, 4.85% dated September 30, 1999 to be repurchased at $118,016 on October 1, 1999, collateralized by FNMA Agency Note, 5.60% April 12, 2002 with a value of $121,065 118,000 Total Repurchase Agreement (cost $118,000) 118,000 Total Investments (cost $309,576,109) (100.16%) 379,955,618 Total Other Assets, Less Liabilities (-0.16%) (599,244) Net Assets (100.00%) $ 379,356,374 - ---------------------------------------------------------------------------
* Non-income producing security. ADR - American Depositary Receipt. 144A - Resale is restricted to qualified institutional buyers. See notes to financial statements. Berger Funds September 30, 1999 Annual Report 42 - -------------------------------------------------------------------------------- BERGER BALANCED FUND - -------------------------------------------------------------------------------- Ticker Symbol BEBAX Fund Number 213 - -------------------------------------------------------------------------------- PORTFOLIO MANAGER COMMENTARY JOHN B. JARES - -------------------------------------------------------------------------------- PERFORMANCE The Berger Balanced Fund (the "Fund") had a total return of 39.41%(1) for the year ended September 30, 1999. This significantly outpaced the 27.80% total return registered by the Standard & Poor's (S&P) 500 Index(2) over the same period. We believe this performance is attributable to our bottom-up style of investing (company-by-company stock selection) and to our dynamic asset allocation process, which holds Fund assets in income-producing fixed-income securities as we uncover stocks that offer growth potential. YEAR IN REVIEW It was a roller coaster year for the U.S. stock market. Unfounded fears of a recession in late 1998 caused stock prices to gyrate wildly. Two interest rate cuts by the Federal Reserve Board in the fourth quarter of 1998 helped fuel a powerful rally that carried stocks (as measured by the S&P 500 Index) to record highs by May 1999. Between then and September 30, however, the market was flat to down, largely in response to concerns about an increase in inflation and rising interest rates. Tight labor markets and a weak U.S. dollar added to investor anxiety. In response to a strong U.S. economy and recovering economies overseas, the Federal Reserve Board increased interest rates once during this period. As of September 30, 1999, the Fund's net assets were allocated as follows: 58% equities, 33% fixed income and 9% cash equivalents, which was similar to the allocation we held over the year. Investment-grade corporate bonds make up approximately one-half of the Fund's fixed-income holdings; the other half consists of U.S. Treasuries. The average maturity of our fixed-income investments is between three and four years. The shorter maturity and relatively low duration of the Fund's fixed-income investments has been a benefit to the Fund because they outperformed those of longer duration the past 12 months. The equity portion of our portfolio performed well this past year, led by investments in technology and selected consumer-related issues. Some of the Fund's largest and best-performing holdings were semiconductor companies, including Texas Instruments, Xilinx and Altera. In addition, the Fund benefited from strong performances by semiconductor equipment manufacturers Lam Research, KLA-Tencor and Applied Materials. Among the consumer-related stocks in our portfolio, Royal Caribbean Cruise Lines, Best Buy and Park Place Entertainment turned in strong performances for the year. Laggards early in the year were Elan and Saks Fifth Avenue. We sold our positions in both of these companies late in the first quarter 1999 when we saw the fundamental performance of their businesses begin to degrade. Initial public offerings (IPO's) also made a positive contribution to the Fund's performance during the year, although it is unclear whether this market for IPO's will continue into next year. These companies included Genentech, a biopharmaceutical manufacturer, Juniper Networks, a telecommunications equipment company, and Ariba, a leader in business-to-business electronic commerce. LOOKING AHEAD As we approach the end of 1999 and the beginning of 2000, we remain cautiously optimistic about prospects for the U.S. stock markets. We are optimistic because we believe a strong U.S. economy and improving economic trends internationally bode well for corporate earnings over the near term. We are cautious, however, because we continue to see upward pressure on interest rates. The wild card going forward, of course, is that the turn of the millennium could bring more volatility to the U.S. stock and bond markets. For this reason, the Fund will maintain its focus on short maturity assets on the fixed-income side of the portfolio. For the equity side, we will continue to seek fundamentally sound companies with excellent revenue and earnings growth prospects for the future. 1. Past performance does not guarantee future results. 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. 2. The S&P 500 Index is an unmanaged index, with dividends reinvested, which consists of the common stocks of 500 publicly traded U.S. companies. It is a generally recognized indicator used to measure overall performance of the U.S. stock market. One cannot invest directly in an index. Annual Report September 30, 1999 Berger Funds 43 - -------------------------------------------------------------------------------- BERGER BALANCED FUND PERFORMANCE OVERVIEW COMPARISON OF CHANGE IN VALUE OF BERGER BALANCED FUND VS. S&P 500 INDEX AND COST OF LIVING INDEX [GRAPH]
Berger S&P 500 Cost of Balanced Fund Index Living Index 9/30/97 $10,000 $10,000 $10,000 3/31/98 $15,810 $11,722 $10,062 9/30/98 $16,677 $10,906 $10,149 3/31/99 $19,911 $13,885 $10,236 9/30/99 $21,855 $13,937 $10,366
BERGER BALANCED FUND* AVERAGE ANNUAL TOTAL RETURN As of September 30, 1999 - --------------------------------------- 1 Year 39.41% - --------------------------------------- Life of Fund 47.88% - --------------------------------------- (9/30/97)
*Performance figures are historical and do not represent future results. Investment returns and principal value will vary, and you may have a loss when you sell shares. - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS - --------------------------------------------------------------------------------
September 30, 1999 - --------------------------------------------------------------------------- SHARES VALUE - --------------------------------------------------------------------------- COMMON STOCK (57.28%) BANKS - MONEY CENTER (0.80%) 22,350 Citigroup Inc. $ 983,400 - --------------------------------------------------------------------------- BEVERAGES - SOFT DRINKS (2.03%) 48,300 Pepsico, Inc. 1,461,075 21,400 The Coca-Cola Co. 1,028,537 - --------------------------------------------------------------------------- 2,489,612 BUILDING PRODUCTS - WOOD (1.76%) 18,200 Weyerhaeuser Co. 1,048,775 25,800 Willamette Industries, Inc. 1,112,625 - --------------------------------------------------------------------------- 2,161,400 COMPUTER SOFTWARE - DESKTOP (1.65%) 22,400 Microsoft Corp.* 2,028,600 - --------------------------------------------------------------------------- COMPUTER SOFTWARE - ENTERPRISE (2.57%) 78,000 J.D. Edwards & Co.* 1,616,062 33,700 Oracle Corp.* 1,533,350 - --------------------------------------------------------------------------- 3,149,412 COSMETICS/PERSONAL CARE (1.31%) 63,100 The Dial Corp. 1,609,050 - --------------------------------------------------------------------------- ELECTRICAL - MILITARY SYSTEMS (1.31%) 28,000 General Motors Corp. - Class H* 1,603,000 - --------------------------------------------------------------------------- September 30, 1999 - --------------------------------------------------------------------------- SHARES VALUE - --------------------------------------------------------------------------- COMMON STOCK (57.28%) - CONTINUED Electronic - Semiconductor Equipment (3.62%) 17,800 Applied Materials, Inc.* $ 1,386,175 20,000 KLA-Tencor Corp.* 1,300,000 28,800 Lam Research Corp.* 1,756,800 - --------------------------------------------------------------------------- 4,442,975 ELECTRONIC - SEMICONDUCTOR MANUFACTURING (4.83%) 40,500 Altera Corp.* 1,756,687 34,800 Texas Instruments Inc. 2,862,300 20,000 Xilinx, Inc.* 1,310,634 - --------------------------------------------------------------------------- 5,929,621 FINANCE - INVESTMENT MANAGEMENT (0.80%) 11,000 Morgan Stanley Dean Witter & Co. 981,062 - --------------------------------------------------------------------------- INTERNET - E*COMMERCE (0.69%) 35,000 Ticketmaster Online-CitySearch, Inc.* 846,562 - --------------------------------------------------------------------------- INTERNET - ISP/CONTENT (2.02%) 16,900 America Online, Inc.* 1,757,600 13,800 GoTo.com, Inc.* 719,325 - --------------------------------------------------------------------------- 2,476,925 INTERNET - NETWORK SECURITY/SOLUTIONS (0.25%) 1,700 Juniper Networks, Inc.* 311,100 - ---------------------------------------------------------------------------
Berger Funds September 30, 1999 Annual Report 44 - --------------------------------------------------------------------------------
September 30, 1999 - --------------------------------------------------------------------------- SHARES VALUE - --------------------------------------------------------------------------- COMMON STOCK (57.28%) - CONTINUED Internet - Software (0.74%) 6,300 Ariba, Inc.* $ 910,350 - --------------------------------------------------------------------------- LEISURE - GAMING (1.29%) 126,700 Park Place Entertainment Corp.* 1,583,750 - --------------------------------------------------------------------------- LEISURE - PRODUCTS (1.31%) 35,300 The Seagram Company Ltd. 1,606,150 - --------------------------------------------------------------------------- LEISURE - SERVICES (4.20%) 88,400 Royal Caribbean Cruises Ltd. 3,978,000 45,700 The Walt Disney Co. 1,182,487 - --------------------------------------------------------------------------- 5,160,487 MEDIA - RADIO/TV (1.04%) 16,000 Clear Channel Communications, Inc.* 1,278,000 - --------------------------------------------------------------------------- MEDICAL - BIOMED/GENETICS (1.36%) 11,400 Genentech, Inc.* 1,667,962 - --------------------------------------------------------------------------- MEDICAL - DRUG/DIVERSIFIED (1.10%) 20,000 Bristol-Myers Squibb Co. 1,350,000 - --------------------------------------------------------------------------- MEDICAL - MEDICAL/DENTAL SERVICES (1.27%) 23,600 Bausch & Lomb Inc. 1,556,125 - --------------------------------------------------------------------------- OIL & GAS - FIELD SERVICES (0.86%) 25,900 Halliburton Co. 1,061,900 - --------------------------------------------------------------------------- OIL & GAS - INTERNATIONAL INTEGRATED (0.81%) 35,900 Conoco Inc. - Class A* 996,225 - --------------------------------------------------------------------------- OIL & GAS - U.S. EXPLORATION & PRODUCTION (0.90%) 30,000 Burlington Resources Inc. 1,102,500 - --------------------------------------------------------------------------- OIL & GAS - U.S. INTEGRATED (0.92%) 38,700 USX-Marathon Corp. 1,131,975 - --------------------------------------------------------------------------- PAPER & PAPER PRODUCTS (0.97%) 22,700 Kimberly-Clark Corp. 1,191,750 - --------------------------------------------------------------------------- RETAIL - APPAREL/SHOE (1.28%) 58,300 Nordstrom, Inc. 1,574,100 - --------------------------------------------------------------------------- RETAIL - CONSUMER ELECTRONICS (1.34%) 26,500 Best Buy Co., Inc.* 1,644,656 - --------------------------------------------------------------------------- RETAIL - DRUG STORES (2.25%) 25,400 CVS Corp. 1,036,637 67,800 Walgreen Co. 1,720,425 - --------------------------------------------------------------------------- 2,757,062 RETAIL - SUPER/MINI-MARKETS (2.70%) 45,700 Safeway, Inc.* 1,739,456 71,500 The Kroger Co.* 1,577,468 - --------------------------------------------------------------------------- 3,316,924 September 30, 1999 - --------------------------------------------------------------------------- SHARES/PAR VALUE VALUE - --------------------------------------------------------------------------- COMMON STOCK (57.28%) - CONTINUED SOAP & CLEANING PREPARATIONS (1.57%) 20,500 Procter & Gamble Co. $ 1,921,875 - --------------------------------------------------------------------------- TELECOMMUNICATIONS - EQUIPMENT (4.56%) 25,790 Lucent Technologies, Inc. 1,673,126 30,600 Motorola, Inc. 2,692,800 6,500 QUALCOMM Inc.* 1,229,718 - --------------------------------------------------------------------------- 5,595,644 TELECOMMUNICATIONS - SERVICES (1.90%) 20,000 AT&T Corp. 870,000 20,300 MCI WorldCom, Inc.* 1,459,062 - --------------------------------------------------------------------------- 2,329,062 TEXTILE - APPAREL MANUFACTURING (1.27%) 54,400 Jones Apparel Group, Inc.* 1,564,000 - --------------------------------------------------------------------------- Total Common Stock (cost $63,246,595) 70,313,216 - --------------------------------------------------------------------------- CORPORATE DEBT - CONVERTIBLE (2.68%) ELECTRONIC - SEMICONDUCTOR EQUIPMENT (1.30%) $1,400,000 Lam Research Corp. Reg. - 5.00%, 9/1/2002 1,396,500 200,000 Lam Research Corp. 144A - 5.00%, 9/1/2002 199,500 - --------------------------------------------------------------------------- 1,596,000 RETAIL - APPAREL/SHOE (1.38%) 3,000,000 Ann Taylor Stores, Inc. 144A - 0.55%, 6/18/2019 1,695,000 Total Corporate Debt - Convertible (cost $3,083,771) 3,291,000 - --------------------------------------------------------------------------- CORPORATE DEBT - NON-CONVERTIBLE (18.10%) AEROSPACE/DEFENSE (1.60%) 2,000,000 Boeing Capital Corp. - 6.21%, 8/15/2003 1,967,660 - --------------------------------------------------------------------------- BANKS - FOREIGN (1.30%) 1,600,000 Barclays Bank PLC - 5.95%, 7/15/2001 1,593,312 - --------------------------------------------------------------------------- COMPUTER - MANUFACTURERS (1.57%) 2,000,000 IBM Corp. - 5.63%, 4/12/2004 1,930,918 - --------------------------------------------------------------------------- ELECTRICAL - EQUIPMENT (1.62%) 2,000,000 General Electric Capital Corp. - 5.89%, 5/11/2001 1,992,040 - --------------------------------------------------------------------------- FINANCE - CONSUMER/COMMERCIAL LOANS (3.21%) 2,000,000 Ford Motor Credit Co. - 6.13%, 4/28/2003 1,960,080 1,000,000 General Motors Acceptance Corp. - 5.80%, 8/7/2000 999,500 1,000,000 General Motors Acceptance Corp. - 5.60%, 4/30/2002 978,780 - --------------------------------------------------------------------------- 3,938,360
Annual Report September 30, 1999 Berger Funds 45 - --------------------------------------------------------------------------------
September 30, 1999 - --------------------------------------------------------------------------- SHARES/PAR VALUE VALUE - --------------------------------------------------------------------------- CORPORATE DEBT - NON-CONVERTIBLE (18.10%) - CONTINUED FINANCE - INVESTMENT BANKERS (2.46%) $1,045,000 Bear Stearns Co. Inc. - 6.50%, 8/1/2002 $ 1,036,305 500,000 Merrill Lynch & Co. - 6.47%, 3/1/2000 501,690 1,000,000 Merrill Lynch & Co. - 5.71%, 1/15/2002 985,520 500,000 Merrill Lynch & Co. - 6.02%, 5/11/2001 498,370 - --------------------------------------------------------------------------- 3,021,885 FINANCE - INVESTMENT MANAGEMENT (1.69%) 2,000,000 Morgan Stanley Dean Witter & Co. - 8.10%, 6/24/2002 2,072,660 - --------------------------------------------------------------------------- INSURANCE - DIVERSIFIED (1.02%) 1,275,000 Transamerica Financial Corp. - 6.12%, 11/1/2001 1,255,518 - --------------------------------------------------------------------------- MEDICAL - DRUG/DIVERSIFIED (1.60%) 2,000,000 Warner-Lambert Co. - 5.75%, 1/15/2003 1,964,940 - --------------------------------------------------------------------------- RETAIL - DEPARTMENT STORES (1.62%) 1,500,000 Sears Roebuck & Co. - 6.90%, 8/1/2003 1,491,124 495,000 Sears Roebuck & Co. Acceptance Corp. - 6.69%, 4/30/2001 494,076 - --------------------------------------------------------------------------- 1,985,200 RETAIL - SUPER/MINI-MARKETS (0.41%) 500,000 Albertson's Inc. - 6.55%, 8/1/2004 498,265 Total Corporate Debt - Non-Convertible (cost $22,678,412) 22,220,758 - --------------------------------------------------------------------------- PREFERRED STOCK - CONVERTIBLE (0.58%) TRANSPORTATION - RAIL (0.17%) 4,500 Union Pacific Capital Trust, 6.25% 208,125 - --------------------------------------------------------------------------- UTILITY - ELECTRIC POWER (0.41%) 10,200 Texas Utilities Co. Pfd., 9.25% 503,132 Total Preferred Stock - Convertible (cost $713,062) 711,257 - --------------------------------------------------------------------------- September 30, 1999 - --------------------------------------------------------------------------- PAR VALUE VALUE - --------------------------------------------------------------------------- U.S. TREASURY NOTES (11.40%) $6,000,000 U.S. Treasury Note - 5.88%, 6/30/2000 $ 6,024,378 4,000,000 U.S. Treasury Note - 5.63%, 12/31/1999 4,006,240 4,000,000 U.S. Treasury Note - 4.50%, 9/30/2000 3,963,720 Total U.S. Treasury Notes (cost $14,105,115) 13,994,338 - --------------------------------------------------------------------------- U.S. GOVERNMENT AGENCY OBLIGATIONS (5.29%) $6,500,000 FNMA Discount Note - 5.18%, 10/1/1999 6,500,000 Total U.S. Government Agency Obligations (cost $6,500,000) 6,500,000 - --------------------------------------------------------------------------- REPURCHASE AGREEMENT (4.17%) $5,116,000 State Street Repurchase Agreement, 4.85% dated September 30, 1999 to be repurchased at $5,116,689 on October 1, 1999, collateralized by FNMA Agency Note, 5.30% - January 8, 2001 with a value of $5,218,439 5,116,000 Total Repurchase Agreement (cost $5,116,000) 5,116,000 Total Investments (cost $115,442,955) (99.50%) 122,146,569 Total Other Assets, Less Liabilities (0.50%) 619,561 Net Assets (100.00%) $ 122,766,130 - ---------------------------------------------------------------------------
* Non-income producing security. PLC - Public Limited Company. 144A - Resale is restricted to qualified institutional buyers. See notes to financial statements.BERGER Berger Funds September 30, 1999 Annual Report 46 - -------------------------------------------------------------------------------- FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------------------------------------------------- STATEMENTS OF ASSETS AND LIABILITIES - ------------------------------------------------------------------------------------------------------------------------- Berger Berger Information New Generation Berger September 30, 1999 Technology Fund Fund Select Fund - ------------------------------------------------------------------------------------------------------------------------- ASSETS Investments, at cost $16,910,179 $255,611,647 $ 92,815,952 Investments, at value $24,682,930 $328,195,972 $101,047,419 Cash 560 820 607 Receivables Investment securities sold 218,618 6,291,602 482,483 Fund shares sold 21,059 4,613,896 50,943 Dividends 1,698 13,710 19,304 Interest 93 529 45 Deferred organization costs 9,323 -- -- Due from Advisor 16,753 -- -- Other assets 18,245 -- -- - ------------------------------------------------------------------------------------------------------------------------- Total Assets 24,969,279 339,116,529 101,600,801 LIABILITIES Payables Investment securities purchased 25,000 7,298,368 -- Fund shares redeemed -- 112,685 115,425 Loan payable to Banks -- -- -- Interest -- 3,237 -- Accrued investment advisory fees 17,639 234,191 63,906 Accrued custodian and accounting fees 2,238 7,506 8,817 Accrued transfer agent fees 1,000 25,872 18,120 Accrued 12b-1 fees 888 65,022 21,302 Accrued audit fees 15,300 19,300 17,300 Accrued administrative services fees 196 2,602 852 Accrued shareholder reporting fees 872 63,086 3,420 Other accrued expenses 1,378 -- -- - ------------------------------------------------------------------------------------------------------------------------- Total Liabilities 64,511 7,831,869 249,142 NET ASSETS APPLICABLE TO SHARES OUTSTANDING $24,904,768 $331,284,660 $101,351,659 - ------------------------------------------------------------------------------------------------------------------------- COMPONENTS OF NET ASSETS Capital (par value and paid in surplus) $17,002,711 $191,304,825 $68,740,893 Undistributed net investment income/(Accumulated net investment loss) -- (17,460) 113,316 Undistributed net realized gain on securities 129,306 67,412,970 24,265,983 Net unrealized appreciation of securities 7,772,751 72,584,325 8,231,467 - ------------------------------------------------------------------------------------------------------------------------- $24,904,768 $331,284,660 $101,351,659 - ------------------------------------------------------------------------------------------------------------------------- Shares Outstanding 433,356 12,853,716 5,286,481 Shares Authorized (par value $0.01) Unlimited Unlimited Unlimited - ------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE N/A N/A $19.17 - ------------------------------------------------------------------------------------------------------------------------- NET ASSETS: Investor Shares $4,810,803 $330,938,018 N/A Institutional Shares $20,093,965 $ 346,642 N/A - ------------------------------------------------------------------------------------------------------------------------- SHARES OUTSTANDING: Investor Shares 83,722 12,840,273 N/A Institutional Shares 349,634 13,443 N/A - ------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE: Investor Shares $ 57.46 $ 25.77 N/A Institutional Shares $ 57.47 $ 25.79 N/A - ------------------------------------------------------------------------------------------------------------------------- Annual Report September 30, 1999 Berger Funds 47 - -------------------------------------------------------------------------------- FINANCIAL STATEMENTS - ------------------------------------------------------------------------------------------------------------------------- STATEMENTS OF ASSETS AND LIABILITIES - ------------------------------------------------------------------------------------------------------------------------- Berger Berger Berger Small Company Small Cap Mid Cap September 30, 1999 Growth Fund Value Fund Growth Fund - ------------------------------------------------------------------------------------------------------------------------- ASSETS Investments, at cost $499,466,069 $761,794,939 $21,812,875 Investments, at value $646,177,513 $781,801,840 $25,538,653 Cash 23,642 395,360 256,187 Receivables Investment securities sold 63,166,282 -- 964,525 Fund shares sold 2,198,898 25,043,570 291,810 Dividends 5,008 750,158 4,175 Interest 1,712 1,456 43 Deferred organization costs -- -- -- Due from Advisor -- -- -- Other assets -- -- -- - ------------------------------------------------------------------------------------------------------------------------- Total Assets 711,573,055 807,992,384 27,055,393 LIABILITIES Payables Investment securities purchased 34,048,688 18,660,650 1,404,467 Fund shares redeemed 674,852 233,185 58,316 Loan payable to Banks -- -- -- Interest -- -- -- Accrued investment advisory fees 499,533 538,559 14,744 Accrued custodian and accounting fees 26,549 12,797 4,593 Accrued transfer agent fees 248,227 28,961 2,010 Accrued 12b-1 fees 138,760 72,960 4,914 Accrued audit fees 23,300 23,300 14,800 Accrued administrative services fees 5,551 5,984 196 Accrued shareholder reporting fees 270,605 6,284 1,241 Other accrued expenses -- -- -- - ------------------------------------------------------------------------------------------------------------------------- Total Liabilities 35,936,065 19,582,680 1,505,281 NET ASSETS APPLICABLE TO SHARES OUTSTANDING $675,636,990 $788,409,704 $25,550,112 - ------------------------------------------------------------------------------------------------------------------------- COMPONENTS OF NET ASSETS Capital (par value and paid in surplus) $350,456,267 $751,363,344 $19,449,816 Undistributed net investment income/(Accumulated net investment loss) (84,091) 6,759,547 (405) Undistributed net realized gain on securities 178,553,370 10,279,912 2,374,923 Net unrealized appreciation of securities 146,711,444 20,006,901 3,725,778 - ------------------------------------------------------------------------------------------------------------------------- $675,636,990 $788,409,704 $25,550,112 - ------------------------------------------------------------------------------------------------------------------------- Shares Outstanding 139,003,930 37,596,904 1,170,966 Shares Authorized (par value $0.01) Unlimited Unlimited Unlimited - ------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE N/A N/A $ 21.82 - ------------------------------------------------------------------------------------------------------------------------- NET ASSETS: Investor Shares $675,636,990 $374,063,381 N/A Institutional Shares --(1) $414,346,323 N/A - ------------------------------------------------------------------------------------------------------------------------- SHARES OUTSTANDING: Investor Shares 139,003,930 17,863,752 N/A Institutional Shares --(1) 19,733,152 N/A - ------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE: Investor Shares $ 4.86 $ 20.94 N/A Institutional Shares --(1) $ 21.00 N/A - ------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------------ STATEMENTS OF ASSETS AND LIABILITIES - ------------------------------------------------------------------------------------------------------------------------------ Berger Berger Berger Mid Cap Berger Growth and Balanced September 30, 1999 Value Fund 100 Fund Income Fund Fund - ------------------------------------------------------------------------------------------------------------------------------ ASSETS Investments, at cost $20,398,246 $1,220,723,060 $309,576,109 $115,442,955 Investments, at value $22,508,344 $1,340,309,227 $379,955,618 $122,146,569 Cash 7 872 567,292 646 Receivables Investment securities sold 658,941 5,766,931 2,033,194 -- Fund shares sold 3,203 377,698 123,637 463,184 Dividends 38,403 296,040 237,094 37,007 Interest 166 287 236,583 529,757 Deferred organization costs -- -- -- -- Due from Advisor -- -- -- -- Other assets -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------ Total Assets 23,209,064 1,346,751,055 383,153,418 123,177,163 LIABILITIES Payables Investment securities purchased 236,730 9,481,716 567,017 -- Fund shares redeemed 12,418 1,014,904 185,421 271,216 Loan payable to Banks -- -- 2,400,000 -- Interest -- -- 3,896 -- Accrued investment advisory fees 14,513 854,028 244,611 71,166 Accrued custodian and accounting fees 4,272 69,687 17,041 7,566 Accrued transfer agent fees 3,245 719,473 164,269 13,666 Accrued 12b-1 fees 4,838 284,677 81,537 25,417 Accrued audit fees 14,800 32,333 21,300 17,300 Accrued administrative services fees 194 11,387 3,262 1,016 Accrued shareholder reporting fees 47 489,155 108,690 3,686 Other accrued expenses -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------ Total Liabilities 291,057 12,957,360 3,797,044 411,033 NET ASSETS APPLICABLE TO SHARES OUTSTANDING $22,918,007 $1,333,793,695 $379,356,374 $122,766,130 - ------------------------------------------------------------------------------------------------------------------------------ COMPONENTS OF NET ASSETS Capital (par value and paid in surplus) $18,639,713 $925,186,353 $254,574,484 $103,555,136 Undistributed net investment income/(Accumulated net investment loss) 69,584 (241,972) (64,432) 66,148 Undistributed net realized gain on securities 2,098,612 289,263,151 54,466,813 12,441,232 Net unrealized appreciation of securities 2,110,098 119,586,163 70,379,509 6,703,614 - ------------------------------------------------------------------------------------------------------------------------------ $22,918,007 $1,333,793,695 $379,356,374 $122,766,130 - ------------------------------------------------------------------------------------------------------------------------------ Shares Outstanding 1,883,160 85,745,594 24,761,907 7,388,278 Shares Authorized (par value $0.01) Unlimited 200,000,000 100,000,000 Unlimited - ------------------------------------------------------------------------------------------------------------------------------ NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE $ 12.17 $ 15.56 $ 15.32 $ 16.62 - ------------------------------------------------------------------------------------------------------------------------------ NET ASSETS: Investor Shares N/A N/A N/A N/A Institutional Shares N/A N/A N/A N/A - ------------------------------------------------------------------------------------------------------------------------------ SHARES OUTSTANDING: Investor Shares N/A N/A N/A N/A Institutional Shares N/A N/A N/A N/A - ------------------------------------------------------------------------------------------------------------------------------ NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE: Investor Shares N/A N/A N/A N/A Institutional Shares N/A N/A N/A N/A - ------------------------------------------------------------------------------------------------------------------------------
1. See Note 7 of notes to financial statements for information regarding Berger Small Company Growth Fund - Institutional Shares. See notes to financial statements. Berger Funds September 30, 1999 Annual Report 48 - -------------------------------------------------------------------------------- FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- STATEMENTS OF OPERATIONS - --------------------------------------------------------------------------------
Berger Berger Berger Information Information New Generation For the Year or Period Ended September 30, 1999 (except as indicated) Technology Fund(1) Technology Fund(2) Fund - ------------------------------------------------------------------------------------------------------------------------------------ INVESTMENT INCOME Income Dividends $ 11,950 $ 5,238 $ 108,674 Interest 14,786 16,768 362,951 Total Income 26,736 22,006 471,625 - ------------------------------------------------------------------------------------------------------------------------------------ EXPENSES Investment advisory fees 97,037 68,002 1,714,100 Administrative services fees 10,984 29,917 19,045 Accounting fees 13,169 17,192 22,451 Custodian fees 3,835 8,338 38,665 Transfer agent fees 11,365 19,823 391,547 Registration fees 22,151 12,239 33,984 12b-1 fees (Investor Shares or single-class funds only) 1,889 -- 476,106 Audit fees 21,464 16,639 22,050 Legal fees 12,735 2,770 14,643 Directors'/Trustees' fees and expenses 1,349 5,061 18,268 Shareholder reporting fees 4,445 1,987 170,131 Amortization of deferred organization costs 2,170 3,691 -- Interest expense -- -- 15,380 Other expenses 2,826 6,482 6,779 Gross Expenses 205,419 192,141 2,943,149 Less fees waived and/or reimbursed by Advisor (46,666) (84,244) -- Less fees paid indirectly -- -- (4,500) Less earnings credits (889) -- (9,671) Net Expenses 157,864 107,897 2,928,978 Net Investment Income (Loss) (131,128) (85,891) (2,457,353) - ------------------------------------------------------------------------------------------------------------------------------------ NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS Net realized gain on securities 388,198 123,091 70,131,198 Net realized gain on futures contracts -- -- -- Net realized gain on distributions from investment companies -- -- -- Net change in unrealized appreciation on securities 4,446,738 2,901,441 62,553,374 Net Realized and Unrealized Gain on Investments 4,834,936 3,024,532 132,684,572 - ------------------------------------------------------------------------------------------------------------------------------------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $4,703,808 $2,938,641 $130,227,219 - ------------------------------------------------------------------------------------------------------------------------------------ Annual Report September 30, 1999 Berger Funds 49 - -------------------------------------------------------------------------------- FINANCIAL STATEMENTS Berger Berger Berger Berger Small Company Small Cap Mid Cap For the Year or Period Ended September 30, 1999 (except as indicated) Select Fund Growth Fund Value Fund Growth Fund - ------------------------------------------------------------------------------------------------------------------------------------ INVESTMENT INCOME Income Dividends $ 312,695 $ 220,352 $ 9,304,128 $ 19,665 Interest 1,178,183 2,180,141 2,775,157 66,048 Total Income 1,490,878 2,400,493 12,079,285 85,713 - ------------------------------------------------------------------------------------------------------------------------------------ EXPENSES Investment advisory fees 739,996 5,582,231 3,996,245 88,212 Administrative services fees 9,867 62,025 44,402 1,176 Accounting fees 13,465 66,723 57,202 13,041 Custodian fees 24,644 66,606 52,268 14,074 Transfer agent fees 121,159 1,657,065 254,891 19,730 Registration fees 21,866 49,705 88,251 13,404 12b-1 fees (Investor Shares or single-class funds only) 246,664 1,550,620 544,873 29,404 Audit fees 20,050 26,050 35,950 17,550 Legal fees 6,610 44,308 22,189 1,188 Directors'/Trustees' fees and expenses 10,045 63,144 44,515 1,099 Shareholder reporting fees 56,177 710,622 124,239 9,662 Amortization of deferred organization costs -- -- -- -- Interest expense 3,036 10,589 -- -- Other expenses 2,359 58,451 24,426 492 Gross Expenses 1,275,938 9,948,139 5,289,451 209,032 Less fees waived and/or reimbursed by Advisor -- -- -- -- Less fees paid indirectly (45,973) (4,500) -- -- Less earnings credits (6,845) (29,915) (13,626) (1,507) Net Expenses 1,223,120 9,913,724 5,275,825 207,525 Net Investment Income (Loss) 267,758 (7,513,231) 6,803,460 (121,812) - ------------------------------------------------------------------------------------------------------------------------------------ NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS Net realized gain on securities 26,109,272 189,375,085 11,471,038 2,534,503 Net realized gain on futures contracts 613,845 -- -- -- Net realized gain on distributions from investment companies -- -- 557,430 -- Net change in unrealized appreciation on securities 8,283,724 119,733,366 42,568,780 4,040,333 Net Realized and Unrealized Gain on Investments 35,006,841 309,108,451 54,597,248 6,574,836 - ------------------------------------------------------------------------------------------------------------------------------------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $35,274,599 $301,595,220 $61,400,708 $6,453,024 - ------------------------------------------------------------------------------------------------------------------------------------ Berger Berger Berger Mid Cap Berger Growth and Balanced For the Year or Period Ended September 30, 1999 (except as indicated) Value Fund 100 Fund Income Fund Fund - ------------------------------------------------------------------------------------------------------------------------------------ INVESTMENT INCOME Income Dividends $ 416,655 $ 7,493,797 $ 3,003,562 $ 374,041 Interest 89,146 6,233,304 1,118,018 2,147,393 Total Income 505,801 13,727,101 4,121,580 2,521,434 - ------------------------------------------------------------------------------------------------------------------------------------ EXPENSES Investment advisory fees 176,253 10,834,906 2,740,208 616,424 Administrative services fees 2,351 144,465 36,537 8,806 Accounting fees 9,025 151,938 42,367 15,557 Custodian fees 25,667 140,678 39,147 26,157 Transfer agent fees 54,158 3,073,882 732,249 94,034 Registration fees 14,522 -- 23,070 17,175 12b-1 fees (Investor Shares or single-class funds only) 58,751 3,611,635 913,403 220,152 Audit fees 17,550 36,083 24,050 20,050 Legal fees 3,319 77,184 20,717 6,754 Directors'/Trustees' fees and expenses 2,392 147,422 37,175 8,770 Shareholder reporting fees 16,107 1,347,250 323,625 46,236 Amortization of deferred organization costs -- -- -- -- Interest expense -- -- 3,896 4,184 Other expenses 872 80,809 29,821 4,377 Gross Expenses 380,967 19,646,252 4,966,265 1,088,676 Less fees waived and/or reimbursed by Advisor -- -- -- -- Less fees paid indirectly -- (298,539) (24,178) (864) Less earnings credits (1,325) (67,287) (22,771) (3,409) Net Expenses 379,642 19,280,426 4,919,316 1,084,403 Net Investment Income (Loss) 126,159 (5,553,325) (797,736) 1,437,031 - ------------------------------------------------------------------------------------------------------------------------------------ NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS Net realized gain on securities 2,470,373 296,796,365 65,478,686 12,467,719 Net realized gain on futures contracts 116,325 4,015,058 -- 75,053 Net realized gain on distributions from investment companies 62,909 -- -- -- Net change in unrealized appreciation on securities 3,004,508 181,661,229 46,438,095 6,836,202 Net Realized and Unrealized Gain on Investments 5,654,115 482,472,652 111,916,781 19,378,974 - ------------------------------------------------------------------------------------------------------------------------------------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $5,780,274 $476,919,327 $111,119,045 $20,816,005 - ------------------------------------------------------------------------------------------------------------------------------------
1. For the period March 1, 1999 to September 30, 1999. 2. For the year ended February 28, 1999. See notes to financial statements. Berger Funds September 30, 1999 Annual Report 50 - -------------------------------------------------------------------------------- FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------------------------------------------------------------ STATEMENTS OF CHANGES IN NET ASSETS - ------------------------------------------------------------------------------------------------------------------------------------ Berger Information Technology Fund - ------------------------------------------------------------------------------------------------------------------------------------ Year ended Year or Period Ended September 30 (except as indicated) 1999(1) February 28, 1999 1998(2) - ------------------------------------------------------------------------------------------------------------------------------------ FROM OPERATIONS Net investment income (loss) $ (131,128) $ (85,891) $ (8,898) Net realized gain (loss) on securities 388,198 123,091 (23,156) Net realized gain on futures contracts -- -- -- Net realized gain on distributions from investment companies -- -- -- Net change in unrealized appreciation (depreciation) on securities 4,446,738 2,901,441 424,572 Net Increase (Decrease) in Net Assets Resulting from Operations 4,703,808 2,938,641 392,518 - ------------------------------------------------------------------------------------------------------------------------------------ FROM DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS Distributions from net investment income: Investor Shares and single-class Funds only -- -- -- Institutional Shares -- -- -- Distributions in excess of net investment income: Investor Shares and single-class Funds only -- -- -- Distributions from net realized gains on investments: Investor Shares and single-class Funds only -- -- -- Institutional Shares (240,971) -- -- Net Decrease in Net Assets from Dividends and Distributions to Shareholders (240,971) -- -- - ------------------------------------------------------------------------------------------------------------------------------------ FROM FUND SHARE TRANSACTIONS Proceeds from shares sold 9,473,739 8,406,475 2,313,271 Net asset value of shares issued in reinvestment of dividends and distributions 240,876 -- -- Payments for shares redeemed (1,718,686) (1,572,857) (32,046) Net Increase (Decrease) in Net Assets Derived from Fund Share Transactions 7,995,929 6,833,618 2,281,225 Net Increase (Decrease) in Net Assets 12,458,766 9,772,259 2,673,743 - ------------------------------------------------------------------------------------------------------------------------------------ NET ASSETS Beginning of period 12,446,002 2,673,743 -- End of period $24,904,768 $12,446,002 $2,673,743 Undistributed net investment income/(Accumulated net investment loss) -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ TRANSACTIONS IN FUND SHARES (NOTE 7) - ------------------------------------------------------------------------------------------------------------------------------------ Shares sold 182,321 233,427 89,946 Shares issued to shareholders in reinvestment of dividends and distributions 4,504 -- -- Shares redeemed (34,016) (41,565) (1,261) Net Increase (Decrease) in Shares 152,809 191,862 88,685 Shares outstanding, beginning of period 280,547 88,685 -- Shares outstanding, end of period 433,356 280,547 88,685 - ------------------------------------------------------------------------------------------------------------------------------------ Annual Report September 30, 1999 Berger Funds 51 - -------------------------------------------------------------------------------- FINANCIAL STATEMENTS - ------------------------------------------------------------------------------------------------------------------------------------ STATEMENTS OF CHANGES IN NET ASSETS - ------------------------------------------------------------------------------------------------------------------------------------ Berger New Generation Berger Fund Select Fund - ------------------------------------------------------------------------------------------------------------------------------------ Year or Period Ended September 30 (except as indicated) 1999 1998 1999 - ------------------------------------------------------------------------------------------------------------------------------------ FROM OPERATIONS Net investment income (loss) $ (2,457,353) $ (1,873,013) $ 267,758 Net realized gain (loss) on securities 70,131,198 12,260,073 26,109,272 Net realized gain on futures contracts -- -- 613,845 Net realized gain on distributions from investment companies -- -- -- Net change in unrealized appreciation (depreciation) on securities 62,553,374 (34,407,514) 8,283,724 Net Increase (Decrease) in Net Assets Resulting from Operations 130,227,219 (24,020,454) 35,274,599 - ------------------------------------------------------------------------------------------------------------------------------------ FROM DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS Distributions from net investment income: Investor Shares and single-class Funds only -- -- (267,759) Institutional Shares -- -- -- Distributions in excess of net investment income: Investor Shares and single-class Funds only -- -- (102,138) Distributions from net realized gains on investments: Investor Shares and single-class Funds only (4,495,277) -- (4,692,942) Institutional Shares -- -- -- Net Decrease in Net Assets from Dividends and Distributions to Shareholders (4,495,277) -- (5,062,839) - ------------------------------------------------------------------------------------------------------------------------------------ FROM FUND SHARE TRANSACTIONS Proceeds from shares sold 266,445,474 136,968,651 135,890,110 Net asset value of shares issued in reinvestment of dividends and distributions 4,318,823 -- 4,474,373 Payments for shares redeemed (178,904,170) (189,419,648) (110,795,590) Net Increase (Decrease) in Net Assets Derived from Fund Share Transactions 91,860,127 (52,450,997) 29,568,893 Net Increase (Decrease) in Net Assets 217,592,069 (76,471,451) 59,780,653 - ------------------------------------------------------------------------------------------------------------------------------------ NET ASSETS Beginning of period 113,692,591 190,164,042 41,571,006 End of period $ 331,284,660 $ 113,692,591 $ 101,351,659 Undistributed net investment income/(Accumulated net investment loss) $(17,460) $(12,177) $113,316 - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ TRANSACTIONS IN FUND SHARES (NOTE 7) - ------------------------------------------------------------------------------------------------------------------------------------ Shares sold 12,508,663 9,617,032 8,477,635 Shares issued to shareholders in reinvestment of dividends and distributions 305,888 -- 290,230 Shares redeemed (8,938,999) (13,557,048) (6,617,655) Net Increase (Decrease) in Shares 3,875,552 (3,940,016) 2,150,210 Shares outstanding, beginning of period 8,978,164 12,918,180 3,136,271 Shares outstanding, end of period 12,853,716 8,978,164 5,286,481 - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ STATEMENTS OF CHANGES IN NET ASSETS - ------------------------------------------------------------------------------------------------------------------------------------ Berger Berger Small Company Select Fund Growth Fund - ------------------------------------------------------------------------------------------------------------------------------------ Year or Period Ended September 30 (except as indicated) 1998(3) 1999 1998 - ------------------------------------------------------------------------------------------------------------------------------------ FROM OPERATIONS Net investment income (loss) $ 215,455 $ (7,513,231) $ (7,848,181) Net realized gain (loss) on securities 2,235,808 189,375,085 121,247,337 Net realized gain on futures contracts -- -- -- Net realized gain on distributions from investment companies -- -- -- Net change in unrealized appreciation (depreciation) on securities (52,257) 119,733,366 (310,416,907) Net Increase (Decrease) in Net Assets Resulting from Operations 2,399,006 301,595,220 (197,017,751) - ------------------------------------------------------------------------------------------------------------------------------------ FROM DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS Distributions from net investment income: Investor Shares and single-class Funds only -- -- -- Institutional Shares -- -- -- Distributions in excess of net investment income: Investor Shares and single-class Funds only -- -- -- Distributions from net realized gains on investments: Investor Shares and single-class Funds only -- (105,864,218) (77,784,883) Institutional Shares -- -- -- Net Decrease in Net Assets from Dividends and Distributions to Shareholders -- (105,864,218) (77,784,883) - ------------------------------------------------------------------------------------------------------------------------------------ FROM FUND SHARE TRANSACTIONS Proceeds from shares sold 70,190,167 237,959,062 215,916,354 Net asset value of shares issued in reinvestment of dividends and distributions -- 102,148,841 75,634,304 Payments for shares redeemed (31,018,167) (421,943,412) (357,691,265) Net Increase (Decrease) in Net Assets Derived from Fund Share Transactions 39,172,000 (81,835,509) (66,140,607) Net Increase (Decrease) in Net Assets 41,571,006 113,895,493 (340,943,241) - ------------------------------------------------------------------------------------------------------------------------------------ NET ASSETS Beginning of period -- 561,741,497 902,684,738 End of period $ 41,571,006 $ 675,636,990 $ 561,741,497 Undistributed net investment income/(Accumulated net investment loss) $215,455 $(84,091) $(65,655) - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ TRANSACTIONS IN FUND SHARES (NOTE 7) - ------------------------------------------------------------------------------------------------------------------------------------ Shares sold 5,378,776 59,395,752 45,416,641 Shares issued to shareholders in reinvestment of dividends and distributions -- 30,583,466 17,507,928 Shares redeemed (2,242,505) (106,782,836) (76,360,381) Net Increase (Decrease) in Shares 3,136,271 (16,803,618) (13,435,812) Shares outstanding, beginning of period -- 155,807,548 169,243,360 Shares outstanding, end of period 3,136,271 139,003,930 155,807,548 - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ STATEMENTS OF CHANGES IN NET ASSETS - ------------------------------------------------------------------------------------------------------------------------------------ Berger Small Cap Value Fund - ------------------------------------------------------------------------------------------------------------------------------------ Year or Period Ended September 30 (except as indicated) 1999 1998 - ------------------------------------------------------------------------------------------------------------------------------------ FROM OPERATIONS Net investment income (loss) $ 6,803,460 $ 1,763,834 Net realized gain (loss) on securities 11,471,038 8,773,953 Net realized gain on futures contracts -- -- Net realized gain on distributions from investment companies 557,430 1,525,046 Net change in unrealized appreciation (depreciation) on securities 42,568,780 (38,226,428) Net Increase (Decrease) in Net Assets Resulting from Operations 61,400,708 (26,163,595) - ------------------------------------------------------------------------------------------------------------------------------------ FROM DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS Distributions from net investment income: Investor Shares and single-class Funds only (554,980) (589,238) Institutional Shares (1,033,592) (706,938) Distributions in excess of net investment income: Investor Shares and single-class Funds only -- -- Distributions from net realized gains on investments: Investor Shares and single-class Funds only (6,307,111) (7,188,217) Institutional Shares (4,874,484) (6,438,165) Net Decrease in Net Assets from Dividends and Distributions to Shareholders (12,770,167) (14,922,558) - ------------------------------------------------------------------------------------------------------------------------------------ FROM FUND SHARE TRANSACTIONS Proceeds from shares sold 740,240,947 202,677,074 Net asset value of shares issued in reinvestment of dividends and distributions 9,947,049 12,934,335 Payments for shares redeemed (211,660,639) (86,934,213) Net Increase (Decrease) in Net Assets Derived from Fund Share Transactions 538,527,357 128,677,196 Net Increase (Decrease) in Net Assets 587,157,898 87,591,043 - ------------------------------------------------------------------------------------------------------------------------------------ NET ASSETS Beginning of period 201,251,806 113,660,763 End of period $ 788,409,704 $201,251,806 Undistributed net investment income/(Accumulated net investment loss) $6,759,547 $3,106,054 - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ TRANSACTIONS IN FUND SHARES (NOTE 7) - ------------------------------------------------------------------------------------------------------------------------------------ Shares sold 36,191,725 9,984,182 Shares issued to shareholders in reinvestment of dividends and distributions 532,011 648,894 Shares redeemed (10,560,918) (4,295,128) Net Increase (Decrease) in Shares 26,162,818 6,337,948 Shares outstanding, beginning of period 11,434,086 5,096,138 Shares outstanding, end of period 37,596,904 11,434,086 - ------------------------------------------------------------------------------------------------------------------------------------
1. For the period March 1, 1999 to September 30, 1999. 2. For the period April 8, 1997 (commencement of investment operations) to February 28, 1998. 3. For the period December 31, 1997 (commencement of investment operations) to September 30, 1998. See notes to financial statements. Berger Funds September 30, 1999 Annual Report 52 - -------------------------------------------------------------------------------- FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------------------------------------------------------------ STATEMENTS OF CHANGES IN NET ASSETS - ------------------------------------------------------------------------------------------------------------------------------------ Berger Berger Mid Cap Mid Cap Growth Fund Value Fund - ------------------------------------------------------------------------------------------------------------------------------------ Year or Period Ended September 30, 1999 1998(1) 1999 1998(2) - ------------------------------------------------------------------------------------------------------------------------------------ FROM OPERATIONS Net investment income (loss) $ (121,812) $ (22,353) $ 126,159 $ 62,607 Net realized gain (loss) on securities 2,534,503 71,188 2,470,373 (122,356) Net realized gain (loss) on futures contracts -- -- 116,325 (431,756) Net realized gain on distributions from investment companies -- -- 62,909 -- Net change in unrealized appreciation (depreciation) on securities 4,040,333 (314,555) 3,004,508 (894,410) Net Increase (Decrease) in Net Assets Resulting from Operations 6,453,024 (265,720) 5,780,274 (1,385,915) - ------------------------------------------------------------------------------------------------------------------------------------ FROM DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS Distributions from net investment income -- -- (116,337) -- Distributions in excess of net investment income -- -- -- -- Distributions from net realized gains on investments (87,008) -- -- -- Net Decrease in Net Assets from Dividends and Distributions to Shareholders (87,008) -- (116,337) -- - ------------------------------------------------------------------------------------------------------------------------------------ FROM FUND SHARE TRANSACTIONS Proceeds from shares sold 23,393,763 8,005,977 9,641,513 21,855,353 Net asset value of shares issued in reinvestment of dividends and distributions 84,722 -- 114,595 -- Payments for shares redeemed (8,577,110) (3,457,536) (12,212,494) (758,982) Net Increase (Decrease) in Net Assets Derived from Fund Share Transactions 14,901,375 4,548,441 (2,456,386) 21,096,371 Net Increase (Decrease) in Net Assets 21,267,391 4,282,721 3,207,551 19,710,456 - ------------------------------------------------------------------------------------------------------------------------------------ NET ASSETS Beginning of period 4,282,721 -- 19,710,456 -- End of period $25,550,112 $ 4,282,721 $ 22,918,007 $19,710,456 Undistributed net investment income/(Accumulated net investment loss) $ (405) $ (88) $ 69,584 $ 62,607 - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ TRANSACTIONS IN FUND SHARES (NOTE 7) - ------------------------------------------------------------------------------------------------------------------------------------ Shares sold 1,247,919 670,860 792,667 2,193,503 Shares issued to shareholders in reinvestment of dividends and distributions 6,375 -- 10,513 -- Shares redeemed (475,129) (279,059) (1,032,615) (80,908) Net Increase (Decrease) in Shares 779,165 391,801 (229,435) 2,112,595 Shares outstanding, beginning of period 391,801 -- 2,112,595 -- Shares outstanding, end of period 1,170,966 391,801 1,883,160 2,112,595 - ------------------------------------------------------------------------------------------------------------------------------------ Annual Report September 30, 1999 Berger Funds 53 - -------------------------------------------------------------------------------- FINANCIAL STATEMENTS - ------------------------------------------------------------------------------------------------------------------------------------ STATEMENTS OF CHANGES IN NET ASSETS - ------------------------------------------------------------------------------------------------------------------------------------ Berger 100 Fund - ------------------------------------------------------------------------------------------------------------------------------------ Year or Period Ended September 30, 1999 1998 - ------------------------------------------------------------------------------------------------------------------------------------ FROM OPERATIONS Net investment income (loss) $ (5,553,325) $ (6,562,949) Net realized gain (loss) on securities 296,796,365 104,647,304 Net realized gain (loss) on futures contracts 4,015,058 -- Net realized gain on distributions from investment companies -- -- Net change in unrealized appreciation (depreciation) on securities 181,661,229 (344,876,495) Net Increase (Decrease) in Net Assets Resulting from Operations 476,919,327 (246,792,140) - ------------------------------------------------------------------------------------------------------------------------------------ FROM DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS Distributions from net investment income -- -- Distributions in excess of net investment income -- -- Distributions from net realized gains on investments (100,312,667) (600,637,304) Net Decrease in Net Assets from Dividends and Distributions to Shareholders (100,312,667) (600,637,304) - ------------------------------------------------------------------------------------------------------------------------------------ FROM FUND SHARE TRANSACTIONS Proceeds from shares sold 125,981,311 290,185,487 Net asset value of shares issued in reinvestment of dividends and distributions 97,500,281 585,186,009 Payments for shares redeemed (553,122,803) (640,161,573) Net Increase (Decrease) in Net Assets Derived from Fund Share Transactions (329,641,211) 235,209,923 Net Increase (Decrease) in Net Assets 46,965,449 (612,219,521) - ------------------------------------------------------------------------------------------------------------------------------------ NET ASSETS Beginning of period 1,286,828,246 1,899,047,767 End of period $1,333,793,695 $1,286,828,246 Undistributed net investment income/(Accumulated net investment loss) $ (241,972) $ (157,522) - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ TRANSACTIONS IN FUND SHARES (NOTE 7) - ------------------------------------------------------------------------------------------------------------------------------------ Shares sold 8,690,069 19,158,620 Shares issued to shareholders in reinvestment of dividends and distributions 7,075,507 42,594,228 Shares redeemed (37,344,829) (42,694,648) Net Increase (Decrease) in Shares (21,579,253) 19,058,200 Shares outstanding, beginning of period 107,324,847 88,266,647 Shares outstanding, end of period 85,745,594 107,324,847 - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ STATEMENTS OF CHANGES IN NET ASSETS - ------------------------------------------------------------------------------------------------------------------------------------ Berger Growth and Income Fund - ------------------------------------------------------------------------------------------------------------------------------------ Year or Period Ended September 30, 1999 1998 - ------------------------------------------------------------------------------------------------------------------------------------ FROM OPERATIONS Net investment income (loss) $ (797,736) $ 849,370 Net realized gain (loss) on securities 65,478,686 55,262,003 Net realized gain (loss) on futures contracts -- -- Net realized gain on distributions from investment companies -- -- Net change in unrealized appreciation (depreciation) on securities 46,438,095 (60,354,177) Net Increase (Decrease) in Net Assets Resulting from Operations 111,119,045 (4,242,804) - ------------------------------------------------------------------------------------------------------------------------------------ FROM DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS Distributions from net investment income -- (810,870) Distributions in excess of net investment income (257,511) (117,492) Distributions from net realized gains on investments (61,153,780) (59,593,140) Net Decrease in Net Assets from Dividends and Distributions to Shareholders (61,411,291) (60,521,502) - ------------------------------------------------------------------------------------------------------------------------------------ FROM FUND SHARE TRANSACTIONS Proceeds from shares sold 72,124,316 42,707,097 Net asset value of shares issued in reinvestment of dividends and distributions 58,191,986 57,969,279 Payments for shares redeemed (101,997,289) (91,605,461) Net Increase (Decrease) in Net Assets Derived from Fund Share Transactions 28,319,013 9,070,915 Net Increase (Decrease) in Net Assets 78,026,767 (55,693,391) - ------------------------------------------------------------------------------------------------------------------------------------ NET ASSETS Beginning of period 301,329,607 357,022,998 End of period $ 379,356,374 $301,329,607 Undistributed net investment income/(Accumulated net investment loss) $ (64,432) $ (88,579) - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ TRANSACTIONS IN FUND SHARES (NOTE 7) - ------------------------------------------------------------------------------------------------------------------------------------ Shares sold 4,849,258 2,928,438 Shares issued to shareholders in reinvestment of dividends and distributions 4,775,021 4,248,233 Shares redeemed (7,022,370) (6,365,416) Net Increase (Decrease) in Shares 2,601,909 811,255 Shares outstanding, beginning of period 22,159,998 21,348,743 Shares outstanding, end of period 24,761,907 22,159,998 - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ STATEMENTS OF CHANGES IN NET ASSETS - ------------------------------------------------------------------------------------------------------------------------------------ Berger Balanced Fund - ------------------------------------------------------------------------------------------------------------------------------------ Year or Period Ended September 30, 1999 1998 - ------------------------------------------------------------------------------------------------------------------------------------ FROM OPERATIONS Net investment income (loss) $ 1,437,031 $ 434,179 Net realized gain (loss) on securities 12,467,719 6,207,143 Net realized gain (loss) on futures contracts 75,053 -- Net realized gain on distributions from investment companies -- -- Net change in unrealized appreciation (depreciation) on securities 6,836,202 (132,588) Net Increase (Decrease) in Net Assets Resulting from Operations 20,816,005 6,508,734 - ------------------------------------------------------------------------------------------------------------------------------------ FROM DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS Distributions from net investment income (1,397,262) (407,800) Distributions in excess of net investment income -- -- Distributions from net realized gains on investments (3,773,574) (2,535,109) Net Decrease in Net Assets from Dividends and Distributions to Shareholders (5,170,836) (2,942,909) - ------------------------------------------------------------------------------------------------------------------------------------ FROM FUND SHARE TRANSACTIONS Proceeds from shares sold 170,043,914 38,583,031 Net asset value of shares issued in reinvestment of dividends and distributions 4,755,161 2,636,258 Payments for shares redeemed (98,398,671) (21,526,401) Net Increase (Decrease) in Net Assets Derived from Fund Share Transactions 76,400,404 19,692,888 Net Increase (Decrease) in Net Assets 92,045,573 23,258,713 - ------------------------------------------------------------------------------------------------------------------------------------ NET ASSETS Beginning of period 30,720,557 7,461,844 End of period $ 122,766,130 $ 30,720,557 Undistributed net investment income/(Accumulated net investment loss) $ 66,148 $ 26,379 - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ TRANSACTIONS IN FUND SHARES (NOTE 7) - ------------------------------------------------------------------------------------------------------------------------------------ Shares sold 10,911,427 2,988,884 Shares issued to shareholders in reinvestment of dividends and distributions 333,300 220,731 Shares redeemed (6,169,658) (1,642,590) Net Increase (Decrease) in Shares 5,075,069 1,567,025 Shares outstanding, beginning of period 2,313,209 746,184 Shares outstanding, end of period 7,388,278 2,313,209 - ------------------------------------------------------------------------------------------------------------------------------------
1. For the period December 31, 1997 (commencement of investment operations) to September 30, 1998. 2. For the period August 12, 1998 (commencement of investment operations) to September 30, 1998. See notes to financial statements. Berger Funds September 30, 1999 Annual Report 54 - -------------------------------------------------------------------------------- BERGER/BIAM INTERNATIONAL FUND
- ------------------------------------------------------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES - ------------------------------------------------------------------------------------------------------------------------------- September 30, 1999 - ------------------------------------------------------------------------------------------------------------------------------- Assets Investment in Berger/BIAM International Portfolio ("Portfolio"), at value $19,531,939 Receivable from fund shares sold 3,504,392 Total Assets 23,036,331 - ------------------------------------------------------------------------------------------------------------------------------- LIABILITIES Payable for fund shares redeemed 11,259 Accrued 12b-1 fees 4,102 Accrued administrative services fee 7,385 Total Liabilities 22,746 - ------------------------------------------------------------------------------------------------------------------------------- NET ASSETS APPLICABLE TO SHARES OUTSTANDING $23,013,585 - ------------------------------------------------------------------------------------------------------------------------------- COMPONENTS OF NET ASSETS Capital (par value and paid in surplus) $17,949,781 Accumulated net investment loss (91,381) Undistributed net realized loss from investments and foreign currency transactions (675,279) Net unrealized appreciation of securities and foreign currency transactions 5,830,464 - ------------------------------------------------------------------------------------------------------------------------------- $23,013,585 - ------------------------------------------------------------------------------------------------------------------------------- Shares Outstanding (par value $0.01, unlimited shares authorized) 1,839,826 Net Asset Value, Offering and Redemption Price Per Share $ 12.51 - ------------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------------- STATEMENT OF OPERATIONS - ------------------------------------------------------------------------------------------------------------------------------- Year Ended September 30, 1999 - ------------------------------------------------------------------------------------------------------------------------------- Net Investment Income Allocated from Portfolio Dividends (net of foreign withholding taxes of $42,724) $ 315,316 Interest 31,212 Portfolio expenses (net of earnings credits and fee waivers totaling $3,488) (196,716) Net Investment Income Allocated from Portfolio 149,812 - ------------------------------------------------------------------------------------------------------------------------------- Fund Expenses Administrative services fee 87,241 Registration fees 11,947 12b-1 fees 49,679 Legal fees 1,965 Total Fund Expenses 150,832 Net Investment Loss (1,020) - ------------------------------------------------------------------------------------------------------------------------------- NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS ALLOCATED FROM PORTFOLIO Net realized loss on securities and foreign currency transactions (480,189) Net change in unrealized appreciation on securities and foreign currency transactions 5,758,774 Net Realized and Unrealized Gain on Investments and Foreign Currency Transactions Allocated from Portfolio 5,278,585 NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 5,277,565 - -------------------------------------------------------------------------------------------------------------------------------
See notes to financial statements. Annual Report September 30, 1999 Berger Funds 55 - -------------------------------------------------------------------------------- BERGER/BIAM INTERNATIONAL FUND
- ------------------------------------------------------------------------------------------------------------------------------------ STATEMENT OF CHANGES IN NET ASSETS - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended September 30, 1999 1998 - ------------------------------------------------------------------------------------------------------------------------------------ FROM OPERATIONS Net investment income (loss) $ (1,020) $ 412,713 Net realized loss on securities and foreign currency transactions allocated from Portfolio (480,189) (566,046) Net change in unrealized appreciation (depreciation) on securities and foreign currency transactions allocated from Portfolio 5,758,774 (1,417,196) - ------------------------------------------------------------------------------------------------------------------------------------ Net Increase (Decrease) in Net Assets Resulting from Operations 5,277,565 (1,570,529) - ------------------------------------------------------------------------------------------------------------------------------------ FROM DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS Net investment income (768,790) (98,586) In excess of net realized gains on investments and foreign currency transactions (31,977) (595,013) Net Decrease in Net Assets from Dividends and Distributions to Shareholders (800,767) (693,599) - ------------------------------------------------------------------------------------------------------------------------------------ FROM FUND SHARE TRANSACTIONS Proceeds from shares sold 64,254,931 14,273,535 Net asset value of shares issued in reinvestment of dividends and distributions 784,624 671,358 Payments for shares redeemed (63,014,956) (14,841,862) Net Increase in Net Assets Derived from Fund Share Transactions 2,024,599 103,031 Net Increase (Decrease) in Net Assets 6,501,397 (2,161,097) - ------------------------------------------------------------------------------------------------------------------------------------ NET ASSETS Beginning of period 16,512,188 18,673,285 End of period $23,013,585 $16,512,188 Undistributed net investment income/(Accumulated net investment loss) $ (91,381) $ 807,948 - ------------------------------------------------------------------------------------------------------------------------------------ TRANSACTIONS IN FUND SHARES Shares sold 5,362,766 1,257,896 Shares issued to shareholders in reinvestment of dividends and distributions 68,500 64,871 Shares redeemed (5,233,010) (1,310,950) Net Increase in Shares 198,256 11,817 Shares outstanding, beginning of period 1,641,570 1,629,753 Shares outstanding, end of period 1,839,826 1,641,570 - ------------------------------------------------------------------------------------------------------------------------------------
See notes to financial statements. Berger Funds September 30, 1999 Annual Report 56 - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 1 ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES - -------------------------------------------------------------------------------- ORGANIZATION Berger Information Technology Fund ("TECH"), Berger New Generation Fund ("BNG"), Berger Select Fund ("BSEL"), Berger Small Company Growth Fund ("BSCG"), Berger Small Cap Value Fund ("BSCV"), Berger Mid Cap Growth Fund ("BMCG"), Berger Mid Cap Value Fund ("BMCV"), Berger 100 Fund ("100"), Berger Growth and Income Fund ("BG&I"), Berger Balanced Fund ("BBAL"), and Berger/BIAM International Fund ("BBIF") (individually the "Fund" and collectively, the "Funds") are open-end management investment companies registered under the Investment Company Act of 1940, as amended (the "1940 Act"). Shares of each fund are fully paid and non-assessable when issued. All shares issued by a particular Fund participate equally in dividends and other distributions by that Fund. The investment objective of each Fund is capital appreciation, including the BG&I and BBAL, which also pursue current income. 100 and BG&I are corporations registered in the State of Maryland. TECH, BNG, BSEL, BSCG, BMCG, BMCV and BBAL are separate series established under the Berger Investment Portfolio Trust ("BIP Trust"), a Delaware business trust. BSCV is the only series established under the Berger Omni Investment Trust ("OMNI Trust"), a Massachusetts business trust. Prior to July 2, 1999, TECH was known as the InformationTech 100 Fund ("InfoTech"). On July 2, 1999, all of the outstanding shares of InfoTech were designated Institutional Shares ("TECH; Inst") and a separate class of shares, Investor Shares ("TECH; Inv"), was offered. BNG, BSCG and BSCV each also offer two separate classes of shares; Investor Shares ("BNG; Inv", "BSCG; Inv", and "BSCV; Inv", respectively) and Institutional Shares ("BNG; Inst", "BSCG; Inst", and "BSCV; Inst", respectively). Both classes of each Fund have identical rights to earnings, assets and voting privileges. BNG; Inst and BSCG; Inst each commenced operations on August 16, 1999. BBIF is one of three series established under the Berger/BIAM Worldwide Funds Trust ("BBWF Trust"), a Delaware business trust. Other series or portfolios may be added under each trust in the future. All costs in organizing the trusts were borne by Berger LLC ("Berger"), formerly Berger Associates, Inc., or BBOI Worldwide LLC ("BBOI"). Effective September 30, 1999, Berger Associates, Inc. transferred its operating assets and business to Berger. Accordingly, Berger now serves as investment advisor and administrator to the Funds. The transfer did not result in any change to the investment objectives or principal investment strategies of the Funds, or result in any change to the day-to-day management of the Funds' investments. BBIF invests all of its investable assets in the Berger/BIAM International Portfolio (the "Portfolio"), a series of Berger/BIAM Worldwide Portfolios Trust ("BBWP Trust"). The value of such investment reflects BBIF's proportionate interest in the net assets of the Portfolio (9% at September 30, 1999). The Portfolio is an open-end management investment company and has the same investment objective and policies as BBIF. The performance of BBIF will be derived from the investment performance of the Portfolio. The financial statements of the Portfolio, including the schedule of investments, are included elsewhere in this report and should be read in conjunction with BBIF's financial statements. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements. The policies are in conformity with generally accepted accounting principles. INVESTMENT VALUATION Securities are valued at the close of the regular trading session of the New York Stock Exchange (the "Exchange") on each day that the Exchange is open. Securities listed on national exchanges, the Nasdaq Stock Market and foreign exchanges are valued at the last sale price on such markets, or, if no last sale price is available, they are valued using the mean between their current bid and ask prices. Securities traded in the over-the-counter market are valued at the mean between their current bid and ask prices. Short-term obligations maturing within sixty days are valued at amortized cost, which approximates market value. Prices of foreign securities are converted to U.S. dollars using exchange rates determined prior to the close of the Exchange. Securities for which quotations are not readily available are valued at fair values as determined in good faith pursuant to consistently applied procedures established by the directors/trustees of the Funds. Generally, trading in foreign securities markets is substantially completed each day at various times prior to the close of the Exchange. The values of foreign securities are determined as of the earlier of such market close or the closing time of the Exchange. Occasionally, events affecting the value of such securities may occur between the times at which they are determined and the close of the Exchange, or when the foreign market on which such securities trade is closed but the Exchange is open. If during such periods, events occur that materially affect the value of such securities, the securities will be valued at their fair market value as determined in good faith pursuant to consistently applied procedures established by the directors/trustees of the Funds. Annual Report September 30, 1999 Berger Funds 57 - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 1 ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES - CONTINUED - -------------------------------------------------------------------------------- Since BBIF invests all of its investable assets in the Portfolio, the value of BBIF's investable assets will be equal to the value of its beneficial interest in the Portfolio. Valuation of securities by the Portfolio is discussed in Note 1 of the Portfolio's Notes to Financial Statements, which are included elsewhere in this report. CALCULATION OF NET ASSET VALUE Each Fund's per share calculation of net asset value for each share class is determined by dividing the net assets applicable to each share class by the total number of shares outstanding for that class. FEDERAL INCOME TAX STATUS It is the Funds' policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of their taxable income to shareholders. Therefore, no income tax provision is required. FOREIGN CURRENCY TRANSLATION Assets and liabilities initially expressed in terms of foreign currencies are translated into U.S. dollars at the prevailing market rates as quoted by one or more banks or dealers on the date of valuation. The cost of securities is translated into U.S. dollars at the rates of exchange prevailing when such securities were acquired. Income and expenses are translated into U.S. dollars at rates of exchange prevailing when accrued. INVESTMENT TRANSACTIONS AND INVESTMENT INCOME Investment transactions are accounted for on the date investments are purchased or sold. Dividend income is recorded on the ex-dividend date with the exception that certain dividends from foreign securities are recorded as soon as a Fund is informed of the ex-dividend date if such information is obtained subsequent to the ex-dividend date. Interest income is recorded on the accrual basis and includes accretion of discount and amortization of premium. Gains and losses are computed on the identified cost basis for both financial statement and federal income tax purposes for all securities. ALLOCATION OF INCOME, EXPENSES AND GAINS AND LOSSES Income, expenses (other than those attributable to a specific share class) and gains and losses of TECH, BNG, BSCG and BSCV are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets of each of the aforementioned Funds. Expenses directly attributable to a specific class of shares are charged against the operations of such class. As an investor in the Portfolio, BBIF is allocated its pro rata share of the aggregate investment income, realized and unrealized gains or losses and annual operating expenses (including the investment advisory fee, custodian fees, independent accountants' fees, recordkeeping and pricing agent fees) of the Portfolio. Income, realized and unrealized gains or losses and expenses are allocated on the day incurred in proportion to the prior day's net assets of BBIF relative to the other investors in the Portfolio. COMMON EXPENSES Certain expenses that are not directly allocable to a specific Fund are allocated to each of the Funds on the basis of relative net assets. ORGANIZATION COSTS Expenses incurred in connection with the organization of TECH are being amortized over sixty months from April 8, 1997, the commencement of investment operations of TECH. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results may differ from those estimates. - -------------------------------------------------------------------------------- 2 AGREEMENTS - -------------------------------------------------------------------------------- Berger renders investment advisory services to TECH, BNG, BSEL, BSCG, BSCV, BMCG, BMCV, 100, BG&I and BBAL pursuant to agreements that provide for an investment advisory fee to be paid to Berger at the following annual rates as a percentage of average daily net assets: TECH, BNG, BSCG and BSCV -- .90%; 100, BSEL, BMCG, BMCV and BG&I -- .75%; and BBAL -- .70%. All investment advisory fees are accrued daily and paid monthly. Berger has delegated the day-to-day investment management of BSCV and BMCV to Perkins, Wolf & McDonnell and Company ("PWM"). Additionally, Berger has delegated the day-to-day investment management of TECH to Bay Isle Financial Corporation ("BIFC"). Berger pays PWM and BIFC sub-advisory fees from the investment advisory fee it receives from BSCV, BMCV and TECH. Berger has agreed to voluntarily waive its advisory fee for TECH; Inv. and TECH; Inst. to the extent that each class' normal operating expenses Berger Funds September 30, 1999 Annual Report 58 - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 2 AGREEMENTS - CONTINUED - -------------------------------------------------------------------------------- (including the advisory fee and the 12b-1 fee, but excluding brokerage commissions, interest, taxes and extraordinary expenses) in any fiscal year exceed 2.00% and 1.50%, respectively, for that fiscal year. Effective October 1, 1999, the investment advisory fee charged to the Funds will be reduced according to the following schedule:
Average Daily Fund Net Assets Annual Rate - -------------------------------------------------------------------------------- BSEL, BMCG, BMCV, First $500 million .75% 100, BG&I Next $500 million .70% Over $1 billion .65% - -------------------------------------------------------------------------------- TECH, BNG, First $500 million .85% BSCG, BSCV Next $500 million .80% Over $1 billion .75% - -------------------------------------------------------------------------------- BBAL First $1 billion .70% Over $1 billion .65% - --------------------------------------------------------------------------------
Pursuant to an Administrative Services Agreement, whereby BBOI serves as the administrator to BBIF, BBIF pays BBOI a fee at an annual rate equal to the lesser of 0.45% of its average daily net assets or BBOI's annual cost to provide or procure such services plus 0.02% of BBIF's average daily net assets. Under the Agreement, BBOI is responsible at its own expense, for providing or procuring administrative services reasonably necessary for the operation of BBIF, including recordkeeping and pricing services, custodian services, transfer agency and dividend disbursing services, tax and audit services, insurance, printing and mailing to shareholders of prospectuses and other required communication and certain other administrative services. BBOI has delegated the administration of BBIF to Berger. TECH, BNG, BSEL, BSCG, BSCV, BMCG, BMCV, 100, BG&I and BBAL have each entered into an administrative services agreement with Berger. The administrative services agreement provides for an annual fee of .01% of the average daily net assets of each Fund, computed daily and payable monthly. Effective October 1, 1999, Berger has agreed to eliminate the 0.01% administrative services fee charged to the Funds. Berger will continue providing the same administrative services it currently provides to the Funds at no cost to the Funds. The Funds have adopted plans pursuant to Rule 12b-1 under the 1940 Act (the "Plans"). The TECH, BNG, BSCG and BSCV Plans apply only to the Investor Shares class of each Fund. The Plans provide for the payment to Berger of a 12b-1 fee of .25% per annum of each Fund's average daily net assets (or the net assets of a particular class of shares, where applicable) to finance activities primarily intended to result in the sale of Fund shares. The Plans provide that such payments will be made to Berger as compensation rather than as reimbursements for actual expenses incurred to promote the sale of shares of the Funds. The Funds (except BBIF) have also entered into recordkeeping and pricing agreements with Investors Fiduciary Trust Company ("IFTC"), which also serves as the Funds' custodian and transfer agent. The recordkeeping and pricing agreements provide for the monthly payment of a base fee plus a fee computed as a percentage of average daily net assets on a total relationship basis with other Berger Funds. IFTC's fees for custody, recordkeeping, pricing and transfer agency services are subject to reduction by credits earned by each Fund, based on the cash balances of each Fund held by IFTC as custodian, and by credits received from directed brokerage transactions. DST Systems, Inc. ("DST"), an affiliate of Berger through a degree of common ownership, provides shareholder accounting services to the Funds as a sub-transfer agent. DST Securities, Inc., a wholly-owned subsidiary of DST, is designated as an introductory broker on certain portfolio transactions. The Funds receive an amount equal to the brokerage commissions paid to DST Securities, Inc. as credits against transfer agent fees and expenses. Such credits are presented as fees paid indirectly on the Statement of Operations. For the periods ended September 30, 1999, the following credits were earned:
Fund Credits - -------------------------------------------------------------------------------- TECH $ -- - -------------------------------------------------------------------------------- BNG 4,500 - -------------------------------------------------------------------------------- BSEL 45,973 - -------------------------------------------------------------------------------- BSCG 4,500 - -------------------------------------------------------------------------------- BSCV -- - -------------------------------------------------------------------------------- BMCG -- - -------------------------------------------------------------------------------- BMCV -- - -------------------------------------------------------------------------------- 100 298,539 - -------------------------------------------------------------------------------- BG&I 24,178 - -------------------------------------------------------------------------------- BBAL 864 - -------------------------------------------------------------------------------- BBIF -- - --------------------------------------------------------------------------------
Certain officers and/or directors of Berger and BBOI are also officers and/or directors/trustees of the Funds. Directors/Trustees who are not affiliated with Berger or BBOI are compensated for their services according to a fee schedule which includes an annual fee component and a per meeting fee component. For the period ended September 30, 1999, such directors'/trustees' fees and expenses totaled $334,179 for the Funds. The Funds adopted a director/trustee fee deferral plan (the "Plan") which allows the non-affiliated directors/trustees to defer the receipt of all or a portion of the directors'/trustees' fees payable. The deferred fees are invested in certain of the Funds until distribution in accordance with the Plan. Annual Report September 30, 1999 Berger Funds 59 - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 3 INVESTMENT TRANSACTIONS - -------------------------------------------------------------------------------- PURCHASES AND SALES Purchases and sales proceeds of investment securities (excluding short-term securities) during the periods ended September 30, 1999, were as follows:
Fund Purchases Sales - -------------------------------------------------------------------------------- TECH $ 12,606,770 $ 5,511,675 - -------------------------------------------------------------------------------- BNG 400,721,496 314,997,030 - -------------------------------------------------------------------------------- BSEL 566,920,700 526,587,529 - -------------------------------------------------------------------------------- BSCG 736,674,231 890,208,490 - -------------------------------------------------------------------------------- BSCV 720,712,830 259,305,987 - -------------------------------------------------------------------------------- BMCG 32,762,443 19,218,181 - -------------------------------------------------------------------------------- BMCV 34,718,400 32,843,234 - -------------------------------------------------------------------------------- 100 3,630,247,395 3,958,490,835 - -------------------------------------------------------------------------------- BG&I 608,220,431 607,436,741 - -------------------------------------------------------------------------------- BBAL 242,841,075 178,159,886 - -------------------------------------------------------------------------------- BBIF(1) N/A N/A - --------------------------------------------------------------------------------
1. See the Portfolio's Notes to Financial Statements for information regarding purchases and sales proceeds of investment securities. BBAL had purchases of $19,154,688 and sales of $12,182,103 of long-term U.S. government securities during the year ended September 30, 1999. No other Funds purchased or sold long-term U.S. government securities. UNREALIZED APPRECIATION, UNREALIZED DEPRECIATION AND FEDERAL TAX COST OF SECURITIES At September 30, 1999, the federal tax cost of securities and the composition of net unrealized appreciation (depreciation) of investment securities were as follows:
Gross Gross Net Federal Unrealized Unrealized Appreciation/ Fund Tax Cost Appreciation Depreciation (Depreciation) - -------------------------------------------------------------------------------- TECH $ 16,910,179 $ 8,095,519 $ (322,768) $ 7,772,751 - -------------------------------------------------------------------------------- BNG 255,611,647 87,831,800 (15,247,475) 72,584,325 - -------------------------------------------------------------------------------- BSEL 92,973,161 15,948,497 (7,874,239) 8,074,258 - -------------------------------------------------------------------------------- BSCG 502,532,431 177,456,026 (33,810,944) 143,645,082 - -------------------------------------------------------------------------------- BSCV 761,669,726 68,898,082 (48,765,968) 20,132,114 - -------------------------------------------------------------------------------- BMCG 21,851,508 4,534,427 (847,282) 3,687,145 - -------------------------------------------------------------------------------- BMCV 20,526,453 3,013,814 (1,031,923) 1,981,891 - -------------------------------------------------------------------------------- 100 1,225,775,649 193,179,859 (78,646,281) 114,533,578 - -------------------------------------------------------------------------------- BG&I 311,501,454 83,611,598 (15,157,434) 68,454,164 - -------------------------------------------------------------------------------- BBAL 115,622,049 11,009,314 (4,484,794) 6,524,520 - -------------------------------------------------------------------------------- BBIF(1) N/A N/A N/A N/A - --------------------------------------------------------------------------------
1. See the Portfolio's Notes to Financial Statements for federal tax cost of investment securities and the composition of net unrealized appreciation or unrealized depreciation of investment securities. FUTURES CONTRACTS Each Fund may enter futures contracts for hedging purposes. Upon entering a contract, a Fund deposits and maintains as collateral such initial margin as may be required by the exchanges on which the transaction is affected. Pursuant to the contracts, a Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in the value of the contract. Such receipts or payments are known as "variation margin" and are recorded by a Fund as variation margin receivable or payable on futures contracts. During the period the futures contracts are open, changes in the value of the contracts are recognized on a daily basis to reflect the market value of the contracts at the end of each day's trading and are recorded as realized or unrealized gain or loss, as appropriate. A Fund's use of futures contracts may subject it to certain risks as a result of unanticipated movements in the market. A lack of correlation between the value of an instrument underlying a futures contract and the asset being hedged, or unexpected adverse price movements, could render a Fund's hedging strategy unsuccessful and result in losses. In addition, there can be no assurance that a liquid secondary market will exist for any contract purchased or sold. Realized gains or losses on these contracts are presented as a separate component of Net Realized Gain (Loss) on Investments and Foreign Currency Transactions in the Statement of Operations. At September 30, 1999, the Funds had no outstanding futures contracts. FORWARD CONTRACTS AND OPTIONS Each Fund may hold certain types of forward contracts and/or options for the purpose of hedging each portfolio against exposure to market value fluctuations. The use of such instruments may involve certain risks as a result of unanticipated movements in the market. A lack of correlation between the value of such instruments and the assets being hedged, or unexpected adverse price movements, could render a Fund's hedging strategy unsuccessful and result in losses. In addition, there can be no assurance that a liquid secondary market will exist for the instrument. Realized gains or losses on these investments are included in Net Realized Gain (Loss) on Investments and Foreign Currency Transactions in the Statement of Operations. At September 30, 1999, the Funds held no options or open forward contracts. REPURCHASE AGREEMENTS Repurchase agreements held by a Fund are fully collateralized by U.S. government securities and such collateral is in the possession of the Fund's custodian. The collateral is evaluated daily to ensure its market value exceeds the current market value of the repurchase agreements including accrued interest. In the event of default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the other party to the agreement, realization and/or retention of the collateral or proceeds may be subject to legal proceedings. CONCENTRATION OF RISK The Funds may have elements of risk due to concentrated investments in specific industries or foreign issuers located in a specific country. Such concentrations may subject Berger Funds September 30, 1999 Annual Report 60 - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 3 INVESTMENT TRANSACTIONS - CONTINUED - -------------------------------------------------------------------------------- the Fund to additional risk resulting from future political or economic conditions and/or possible impositions of adverse foreign governmental laws or currency exchange restrictions. Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency Transactions in the Statement of Operations includes fluctuations from currency exchange rates and fluctuations in market value. FEDERAL INCOME TAXES Dividends paid by the Funds from net investment income and distributions of net realized short-term capital gains are, for federal income tax purposes, taxable as ordinary income to shareholders. For the fiscal year ended September 30, 1999, 1%, 48%, 6%, 16%, 19%, and 2% of the ordinary income distributions declared by BSEL, BSCV, BMCG, BMCV, BG&I and BBAL, respectively, qualified for the dividends received deduction available to corporate shareholders. For the fiscal year or period ended September 30, 1999, the following percentages of capital gain distributions were considered long-term capital gains:
Fund % - -------------------------------------------------------------------------------- TECH 100 - -------------------------------------------------------------------------------- BNGF 100 - -------------------------------------------------------------------------------- BSCG 100 - -------------------------------------------------------------------------------- BSCV 66 - -------------------------------------------------------------------------------- 100 100 - -------------------------------------------------------------------------------- BG&I 81 - -------------------------------------------------------------------------------- BBIF 11 - --------------------------------------------------------------------------------
The Funds distribute net realized capital gains, if any, to their shareholders at least annually, if not offset by capital loss carryovers. Income distributions and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. These differences are primarily due to the differing treatment of net operating losses, foreign currency and tax allocations. Accordingly, these permanent differences in the character of income and distributions between financial statements and tax basis have been reclassified to paid-in-capital. During the periods ended September 30, 1999, the following reclassifications were made:
Undistributed Undistributed Paid-in Net Investment Net Realized Fund Capital Income Gains - -------------------------------------------------------------------------------- TECH $(14,980) 131,128 (116,148) - -------------------------------------------------------------------------------- BNG -- 2,452,070 (2,452,070) - -------------------------------------------------------------------------------- BSEL N/A N/A N/A - -------------------------------------------------------------------------------- BSCG -- 7,494,795 (7,494,795) - -------------------------------------------------------------------------------- BSCV (13,792) (1,561,395) 1,575,187 - -------------------------------------------------------------------------------- BMCG -- 121,495 (121,495) - -------------------------------------------------------------------------------- BMCV (272) (2,845) 3,117 - -------------------------------------------------------------------------------- 100 -- 5,468,875 (5,468,875) - -------------------------------------------------------------------------------- BG&I -- 1,079,394 (1,079,394) - -------------------------------------------------------------------------------- BBAL N/A N/A N/A - -------------------------------------------------------------------------------- BBIF (292,119) (129,519) 421,638 - --------------------------------------------------------------------------------
During the year ended September 30, 1999, BBIF paid $42,724 of foreign taxes on $1,129,447 of foreign source income. The Fund will make the foreign tax credit election to pass through these taxes to shareholders. At September 30, 1999, BBIF had capital loss carryovers in the amount of $593,333, expiring on September 30, 2007, which may be used to offset future realized gains for federal income tax purposes. 100, BBAL, and BBIF incurred and elected to defer post-October 31 net capital and/or currency losses of $12,732, $165,238, and $234,056, respectively, to the year ended September 30, 2000. - -------------------------------------------------------------------------------- 4 TRANSACTIONS WITH AFFILIATES - -------------------------------------------------------------------------------- During February, 1999, pursuant to a policy adopted by the Funds' directors/trustees, Berger reimbursed BSCV $534,000 as a result of an error regarding an investment restriction. - -------------------------------------------------------------------------------- 5 LINE OF CREDIT - -------------------------------------------------------------------------------- BNG, BSEL, BSCG, BSCV, BMCG, BMCV, 100, BG&I, BBAL and the Portfolio are party to an ongoing agreement with certain banks that allows the Funds, collectively, to borrow up to $150 million for temporary or emergency purposes. Interest on the borrowings, if any, is charged to the specific Fund at the Federal Funds Rate plus 50 basis points. In addition, the line of credit requires a quarterly payment of a commitment fee based on the average daily unused portion of the line of credit. At September 30, 1999, BG&I had borrowings outstanding of $2,400,000. No other Funds had borrowings outstanding at September 30, 1999. - -------------------------------------------------------------------------------- 6 CHANGE OF FISCAL YEAR AND INDEPENDENT ACCOUNTANTS - -------------------------------------------------------------------------------- Effective April 15, 1999, the trustees of BIP Trust approved changing TECH's fiscal year end from February 28 to September 30. Additionally, the trustees appointed PricewaterhouseCoopers LLP as independent accountants for the Fund for the fiscal period ended September 30, 1999. Annual Report September 30, 1999 Berger Funds 61 - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 7 CAPITAL SHARE TRANSACTIONS - -------------------------------------------------------------------------------- The following Funds are authorized to issue an unlimited number of shares of each share class with a par value of $0.01 per share.* Transactions in capital shares for the periods presented were as follows: BERGER INFORMATION TECHNOLOGY FUND
Period from July 2, 1999(1) to September 30, 1999 - -------------------------------------------------------------------------------- INVESTOR SHARES Shares sold 85,821 $ 4,639,114 - -------------------------------------------------------------------------------- Shares issued to shareholders in reinvestment of dividends and distributions -- -- - -------------------------------------------------------------------------------- Shares redeemed (2,099) (115,896) - -------------------------------------------------------------------------------- 83,722 4,523,218 - -------------------------------------------------------------------------------- Period from March 1, 1999 Year Ended Period from April 8, 1997(1) to September 30, 1999 February 28, 1999 to February 28, 1998 - ------------------------------------------------------------------------------------------------------------------------------------ INSTITUTIONAL SHARES Shares sold 96,500 4,834,625 233,427 $ 8,406,475 89,946 $2,313,271 - ------------------------------------------------------------------------------------------------------------------------------------ Shares issued to shareholders in reinvestment of dividends and distributions 4,504 240,876 -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Shares redeemed (31,917) (1,602,790) (41,565) (1,572,857) (1,261) (32,046) - ------------------------------------------------------------------------------------------------------------------------------------ 69,087 3,472,711 191,862 6,833,618 88,685 2,281,225 - ------------------------------------------------------------------------------------------------------------------------------------ Total Increase from Capital Share Transactions 152,809 $ 7,995,929 191,862 $ 6,833,618 88,685 $2,281,225 - ------------------------------------------------------------------------------------------------------------------------------------
BERGER NEW GENERATION FUND
Year Ended Year Ended September 30, 1999 September 30, 1998 - ---------------------------------------------------------------------------------------------------------------- INVESTOR SHARES Shares sold 12,495,220 $ 266,105,602 9,617,032 $ 136,968,651 - ---------------------------------------------------------------------------------------------------------------- Shares issued to shareholders in reinvestment of dividends and distributions 305,888 4,318,823 -- -- - ---------------------------------------------------------------------------------------------------------------- Shares redeemed (8,938,999) (178,904,170) (13,557,048) (189,419,648) - ---------------------------------------------------------------------------------------------------------------- 3,862,109 91,520,255 (3,940,016) $ (52,450,997) - ---------------------------------------------------------------------------------------------------------------- Period from August 16, 1999(1) to September 30, 1999 - -------------------------------------------------------------------------------- INSTITUTIONAL SHARES Shares sold 13,443 339,872 - -------------------------------------------------------------------------------- Total Increase (Decrease) from Capital Share Transactions 3,875,552 $ 91,860,127 - --------------------------------------------------------------------------------
BERGER SMALL CAP VALUE FUND
Year Ended Year Ended September 30, 1999 September 30, 1998 - ----------------------------------------------------------------------------------------------------------------------- INVESTOR SHARES Shares sold 18,450,177 $ 379,815,718 6,176,175 $ 126,575,125 - ----------------------------------------------------------------------------------------------------------------------- Shares issued to shareholders in reinvestment of dividends and distributions 305,000 5,696,711 365,158 7,272,450 - ----------------------------------------------------------------------------------------------------------------------- Shares redeemed (7,062,053) (141,792,819) (2,848,965) (57,717,019) - ----------------------------------------------------------------------------------------------------------------------- 11,693,124 243,719,610 3,692,368 76,130,556 - ----------------------------------------------------------------------------------------------------------------------- INSTITUTIONAL SHARES Shares sold 17,741,548 360,425,229 3,808,007 76,101,949 - ----------------------------------------------------------------------------------------------------------------------- Shares issued to shareholders in reinvestment of dividends and distributions 227,011 4,250,338 283,736 5,661,885 - ----------------------------------------------------------------------------------------------------------------------- Shares redeemed (3,498,865) (69,867,820) (1,446,163) (29,217,194) - ----------------------------------------------------------------------------------------------------------------------- 14,469,694 294,807,747 2,645,580 52,546,640 - ----------------------------------------------------------------------------------------------------------------------- Total Increase from Capital Share Transactions 26,162,818 $ 538,527,357 6,337,948 $ 128,677,196 - -----------------------------------------------------------------------------------------------------------------------
1. Commencement of operations for the share class. * BSCG; Inst had no capital share transactions for the period ended September 30, 1999. Berger Funds September 30, 1999 Annual Report 62 - -------------------------------------------------------------------------------- BERGER/BIAM INTERNATIONAL PORTFOLIO
- ------------------------------------------------------------------------------------------------------------ SCHEDULE OF INVESTMENTS - ------------------------------------------------------------------------------------------------------------ September 30, 1999 - ------------------------------------------------------------------------------------------------------------ COUNTRY/SHARES COMPANY INDUSTRY VALUE - ------------------------------------------------------------------------------------------------------------ COMMON STOCK (96.51%) AUSTRALIA (4.40%) 36,425 Brambles Industries Ltd. Business & Industrial Services $ 1,055,363 236,150 National Australia Bank Ltd.* Commercial Banks & Other Banks 3,458,993 487,006 News Corp. Ltd.* Media 3,419,296 467,695 Telstra Corp. Ltd.* Utilities 2,425,525 212,370 Westpac Banking Corp. Ltd.* Commercial Banks & Other Banks 1,310,919 - ------------------------------------------------------------------------------------------------------------ 11,670,096 DENMARK (0.55%) 24,375 Tele Danmark A.S.* Utilities 1,455,746 - ------------------------------------------------------------------------------------------------------------ FRANCE (7.79%) 18,626 Alcatel Alsthom* Computer/Commercial/Office Equipment 2,568,434 40,932 AXA-UAP* Insurance - Multi/Property/Casualty 5,181,959 34,250 Michelin - Class B* Automobile Components 1,617,614 41,322 Total S.A. - Class B* Oil 5,196,105 86,557 Vivendi* Diversified Holding Companies 6,083,212 - ------------------------------------------------------------------------------------------------------------ 20,647,324 GERMANY (9.25%) 105,742 Bayerische Motoren Werk A.G. DM Automobiles 2,992,886 41,060 Bayerische HypoVereinsbank A.G. Commercial Banks & Other Banks 2,397,806 85,935 Hoechst A.G. Chemicals 3,742,736 68,855 Mannesmann A.G.* Machinery & Engineering Services 11,006,341 57,121 Veba A.G. Diversified Industrials 3,131,812 67,080 Viag A.G. DM* Utilities 1,272,411 - ------------------------------------------------------------------------------------------------------------ 24,543,992 HONG KONG (0.63%) 148,000 Cheung Kong (Holdings) Ltd. Real Estate 1,233,682 144,500 Hong Kong Electric Holdings Utilities 448,318 - ------------------------------------------------------------------------------------------------------------ 1,682,000 ITALY (2.44%) 306,353 ENI S.p.A.* Oil 1,922,879 524,257 Telecom Italia S.p.A.* Utilities 4,558,783 - ------------------------------------------------------------------------------------------------------------ 6,481,662 JAPAN (18.41%) 5,400 ACOM Co. Ltd.* Insurance - Multi/Property/Casualty 709,070 83,000 Bank of Tokyo-Mitsubishi Ltd.+ Commercial Banks & Other Banks 1,275,542 207,000 Canon, Inc.+ Computer/Commercial/Office Equipment 6,031,581 65,000 Fuji Photo Film Co. Ltd. Photo Equipment & Supplies 2,230,002 53,000 Honda Motor Co. Ltd. Automobiles 2,221,825 9,000 Hoya Corp. Electronics & Instruments 544,788 112,000 Kao Corp. Food & Grocery Products 3,168,718 5,200 Keyence Corp. Electronics & Instruments 1,392,988 4,700 Mabuchi Motor Co. Ltd. Electronics & Instruments 612,294 47,000 Murata Manufacturing Co. Ltd.+ Electronics & Instruments 4,726,948 325 NTT Mobile Communications Utilities 6,415,076 Network, Inc.+ 11,700 Rohm Company Ltd. Electronics & Instruments 2,446,893 104,000 Shiseido Co. Ltd. Health & Personal Care 1,554,281 50,100 Sony Corp. Household Durables & Appliances 7,492,160 137,000 Takeda Chemical Industries Health & Personal Care 7,404,361 3,600 Takefuji Corp. Insurance - Multi/Property/Casualty 599,943 - ------------------------------------------------------------------------------------------------------------ 48,826,470 Annual Report September 30, 1999 Berger Funds 63 - -------------------------------------------------------------------------------- BERGER/BIAM INTERNATIONAL PORTFOLIO - ------------------------------------------------------------------------------------------------------------ SCHEDULE OF INVESTMENTS - ------------------------------------------------------------------------------------------------------------ September 30, 1999 - ------------------------------------------------------------------------------------------------------------ COUNTRY/SHARES COMPANY INDUSTRY VALUE - ------------------------------------------------------------------------------------------------------------ COMMON STOCK (96.51%) - CONTINUED MALAYSIA (0.13%) 103,000 Hume Industries Malaysia Bhd Construction & Building Materials $ 81,315 219,400 Sime Darby Bhd Diversified Holding Companies 254,042 - ------------------------------------------------------------------------------------------------------------ 335,357 NETHERLANDS (9.21%) 131,580 ABN Amro Holdings N.V. Commercial Banks & Other Banks 2,958,604 71,000 Elsevier N.V.* Media 730,130 38,877 Fortis N.V. Commercial Banks & Other Banks 1,257,378 157,167 ING Groep N.V.* Insurance - Multi/Property/Casualty 8,541,735 107,280 Koninklijke Ahold N.V.* Retail Trade 3,532,578 70,365 Koninklijke KPN N.V.* Utilities 3,085,610 48,480 Royal Dutch Petroleum Co. Oil 2,815,617 58,840 TNT Post Group N.V. Utilities 1,498,598 - ------------------------------------------------------------------------------------------------------------ 24,420,250 NEW ZEALAND (0.15%) 101,787 Telecom Corp. of New Zealand* Utilities 401,364 - ------------------------------------------------------------------------------------------------------------ PORTUGAL (0.28%) 46,450 Electricidade de Portugal S.A. Utilities 733,581 - ------------------------------------------------------------------------------------------------------------ SINGAPORE (2.17%) 300,027 Development Bank of Singapore Commercial Banks & Other Banks 3,355,215 Ltd. 89,000 Oversea-Chinese Banking Corp. Commercial Banks & Other Banks 691,465 Ltd.+ 109,000 Singapore Press Holdings Ltd.* Media 1,719,364 - ------------------------------------------------------------------------------------------------------------ 5,766,044 SOUTH KOREA (0.79%) 29,125 Korea Telecom Corp. ADR* Utilities 1,077,625 32,700 Pohang Iron & Steel Company Mining, Metals & Minerals 1,023,918 Ltd. ADR - ------------------------------------------------------------------------------------------------------------ 2,101,543 SPAIN (2.29%) 322,472 Banco De Santander S.A.* Commercial Banks & Other Banks 3,336,766 170,109 Telefonica S.A.* Utilities 2,724,588 - ------------------------------------------------------------------------------------------------------------ 6,061,354 SWEDEN (0.22%) 18,800 Telefonaktiebolaget LM Ericsson Utilities 585,038 - B Shares - ------------------------------------------------------------------------------------------------------------ SWITZERLAND (10.15%) 2,052 Alusuisse Lonza Group A.G.* Fabricated Metal Products 2,364,376 2,870 Nestle S.A.* Food & Grocery Products 5,396,679 3,221 Novartis A.G. Reg.* Health & Personal Care 4,780,920 448 Roche Holding A.G.* Health & Personal Care 5,187,384 2,492 Schweizerische Insurance - Multi/Property/Casualty 4,976,688 Rueckversicherungs* 14,921 Union Bank of Switzerland Commercial Banks & Other Banks 4,208,563 A.G. Reg. - ------------------------------------------------------------------------------------------------------------ 26,914,610 THAILAND (0.11%) 143,000 Bangkok Bank PLC* Commercial Banks & Other Banks 281,351 - ------------------------------------------------------------------------------------------------------------ Berger Funds September 30, 1999 Annual Report 64 - -------------------------------------------------------------------------------- BERGER/BIAM INTERNATIONAL PORTFOLIO - ------------------------------------------------------------------------------------------------------------ SCHEDULE OF INVESTMENTS - ------------------------------------------------------------------------------------------------------------ September 30, 1999 - ------------------------------------------------------------------------------------------------------------ COUNTRY/SHARES PAR VALUE COMPANY INDUSTRY VALUE - ------------------------------------------------------------------------------------------------------------ COMMON STOCK (96.51%) - CONTINUED UNITED KINGDOM (27.54%) 320,220 Allied Zurich PLC Insurance - Multi/Property/Casualty $ 3,758,095 101,630 AstraZeneca PLC Health & Personal Care 4,260,697 179,100 Barclays PLC Commercial Banks & Other Banks 5,256,259 309,767 British American Tobacco PLC Beverage Industry/Tobacco Manufacturing 2,656,456 314,030 Cable & Wireless PLC Utilities 3,416,665 357,310 Cadbury Schweppes PLC Beverage Industry/Tobacco Manufacturing 2,480,447 347,260 Diageo Ordinary PLC Beverage Industry/Tobacco Manufacturing 3,546,715 100,276 Emi Group PLCOrd - Class B* Media 732,841 204,675 Glaxo Wellcome PLC Health & Personal Care 5,336,417 428,232 Granada Group PLC Entertainment/Leisure/Toys 3,665,323 402,200 Hilton Group PLC Entertainment/Leisure/Toys 1,396,864 120,000 HSBC Holdings PLC Commercial Banks & Other Banks 1,374,906 620,164 Invensys PLC Machinery & Engineering Services 3,021,538 20,701 Kingfisher PLC Retail Trade 221,820 331,680 Lloyds TSB Group PLC Commercial Banks & Other Banks 4,121,886 55,017 National Power PLC Utilities 428,792 113,520 National Westminster Bank PLC Commercial Banks & Other Banks 2,645,851 241,350 Old Mutual PLC* Insurance - Multi/Property/Casualty 514,454 77,520 Pearson PLC Media 1,662,600 369,765 Prudential PLC Insurance - Life & Agents/Brokers 5,678,547 51,760 Railtrack Group PLC Road & Rail 1,088,817 651,232 Shell Transport & Trading Co. Oil 4,866,552 PLC 185,300 TI Group PLC Machinery & Engineering Services 1,354,216 376,400 Vodafone AirTouch Group PLC Utilities 8,909,192 68,163 WPP Group PLC Media 633,909 - ------------------------------------------------------------------------------------------------------------ 73,029,859 - ------------------------------------------------------------------------------------------------------------ Total Common Stock (cost $205,584,576) 255,937,641 - ------------------------------------------------------------------------------------------------------------ REPURCHASE AGREEMENT (1.58%) U.S.A. - ------------------------------------------------------------------------------------------------------------ $4,197,000 State Street Repurchase Agreement, 4.85% dated September 30, 1999, to be repurchased at $4,197,565 on October 1, 1999, collateralized by FNMA Agency Note, 5.25% - January 10, 2001, with a value of $4,281,350 4,197,000 - ------------------------------------------------------------------------------------------------------------ Total Repurchase Agreement (cost $4,197,000) 4,197,000 Total Investments (cost $209,781,576) (98.09%) 260,134,641 Total Other Assets, Less Liabilities (1.91%) 5,076,729 Net Assets (100.00%) $265,211,370 - ------------------------------------------------------------------------------------------------------------
* Non-income producing security. + - Security is designated as collateral for forward foreign currency contracts. ADR - American Depositary Receipt. PLC - Public Limited Company.
OUTSTANDING FORWARD FOREIGN CURRENCY CONTRACTS Unrealized Contract Maturity Value on Appreciation/ Currency Amount Date September 30, 1999 (Depreciation) - ----------------------------------------------------------------------------------------------------------- Sell Japanese Yen 269,978,000 10/21/1999 $ 2,547,852 $(287,487) Sell Japanese Yen 270,196,000 11/9/1999 2,558,412 (97,610) Sell Japanese Yen 347,845,000 11/18/1999 3,306,350 (234,733) Sell Japanese Yen 292,626,000 11/24/1999 2,777,469 (113,600) Sell Japanese Yen 222,954,000 11/30/1999 2,118,259 (89,560) Sell Japanese Yen 508,714,000 1/18/2000 4,873,933 (70,801) - ------------------------------------------------------------------------------------------------------------ $ 18,182,275 $(893,791) - ------------------------------------------------------------------------------------------------------------
See notes to financial statements. Annual Report September 30, 1999 Berger Funds 65 - -------------------------------------------------------------------------------- BERGER/BIAM INTERNATIONAL PORTFOLIO
- ----------------------------------------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES - ----------------------------------------------------------------------------------------------------------------- September 30, 1999 - ----------------------------------------------------------------------------------------------------------------- ASSETS Investments, at cost $209,781,576 Investments, at value $260,134,641 Cash 1,577 Foreign cash (cost $2,981,614) 3,003,561 Receivables Investment securities sold 189,943 Contributions 4,813,729 Dividends 801,571 Interest 565 Due from Advisor 16,469 - ----------------------------------------------------------------------------------------------------------------- Total Assets 268,962,056 LIABILITIES Payables Investment securities purchased 1,553,600 Withdrawals 1,059,298 Accrued investment advisory fees 192,775 Accrued custodian fees 22,722 Accrued audit fees 28,500 Net unrealized depreciation on forward foreign currency contracts 893,791 - ----------------------------------------------------------------------------------------------------------------- Total Liabilities 3,750,686 NET ASSETS $265,211,370 - ----------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------- STATEMENT OF OPERATIONS - ----------------------------------------------------------------------------------------------------------------- Year Ended September 30, 1999 - ----------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME Income Dividends (net of foreign tax withholding of $482,012) $ 3,523,283 Interest 355,089 - ----------------------------------------------------------------------------------------------------------------- Total Income 3,878,372 EXPENSES Investment advisory fees 2,010,034 Accounting fees 48,561 Custodian fees 96,448 Registration fees 3,535 Audit fees 37,500 Legal fees 6,863 Trustees' fees and expenses 22,213 Shareholder reporting fees 9,233 Other expenses 13,735 Gross Expenses 2,248,122 Less fees waived by Advisor (16,581) Less earnings credits (22,800) Net Expenses 2,208,741 Net Investment Income 1,669,631 - ----------------------------------------------------------------------------------------------------------------- NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS Net realized loss on investments and foreign currency transactions (5,205,587) Net change in unrealized appreciation on investments and foreign currency transactions 58,159,547 Net Realized and Unrealized Gain on Investments and Foreign Currency Transactions 52,953,960 NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $54,623,591 - -----------------------------------------------------------------------------------------------------------------
See notes to financial statements. Berger Funds September 30, 1999 Annual Report 66 - -------------------------------------------------------------------------------- BERGER/BIAM INTERNATIONAL PORTFOLIO
- ------------------------------------------------------------------------------------------------------------------------ STATEMENT OF CHANGES IN NET ASSETS - ------------------------------------------------------------------------------------------------------------------------ Year Ended September 30, 1999 1998 - ------------------------------------------------------------------------------------------------------------------------ FROM OPERATIONS: Net investment income $ 1,669,631 $ 5,874,066 Net realized loss on investments and foreign currency transactions (5,205,587) (4,726,150) Net change in unrealized appreciation (depreciation) on investments and foreign currency transactions 58,159,547 (15,953,893) Net Increase (Decrease) in Net Assets Resulting from Operations 54,623,591 (14,805,977) - ------------------------------------------------------------------------------------------------------------------------ FROM INVESTORS' BENEFICIAL INTEREST TRANSACTIONS Contributions 161,557,439 103,931,701 Withdrawals (128,565,460) (33,746,924) Net Increase in Net Assets Derived From Investors' Beneficial Interest Transactions 32,991,979 70,184,777 Net Increase in Net Assets 87,615,570 55,378,800 - ------------------------------------------------------------------------------------------------------------------------ NET ASSETS Beginning of period 177,595,800 122,217,000 End of period $265,211,370 $177,595,800 - ------------------------------------------------------------------------------------------------------------------------ Year Ended September 30, Period from ------------------------ October 11, 1996(1) 1999 1998 to September 30, 1997 - ------------------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTARY DATA Net assets, end of period (in thousands) $265,211 $177,596 $122,217 Net expense ratio to average net assets(3) 1.00% 1.00% 0.89%(2) Ratio of net income to average net assets 0.75% 3.45% 1.63%(2) Gross expense ratio to average net assets 1.01% 1.04% 1.10%(2) Portfolio turnover rate(4) 16% 17% 17% - ------------------------------------------------------------------------------------------------------------------------
1. Commencement of investment operations. 2. Annualized. 3. Net expenses represent gross expenses reduced by fees waived and/or reimbursed by the Advisor. 4. Not annualized. See notes to financial statements. Annual Report September 30, 1999 Berger Funds 67 - -------------------------------------------------------------------------------- BERGER/BIAM INTERNATIONAL PORTFOLIO NOTES TO FINANCIAL STATEMENTS 1 ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES ORGANIZATION The Berger/BIAM International Portfolio (the "Portfolio") is registered under the Investment Company Act of 1940, as amended, as a diversified open-end management investment company. The Portfolio is a series of the Berger/BIAM Worldwide Portfolios Trust (the "Trust"), which was organized as a Delaware business trust on May 31, 1996. All costs in organizing the Trust were borne by BBOI Worldwide LLC ("BBOI"), the investment advisor of the Portfolio. The Portfolio commenced investment operations with the sale of 448,161 shares of beneficial interest to the International Equity Fund, formerly known as the Berger/BIAM International Institutional Fund, in exchange for portfolio assets with an aggregate value of $4,481,609, which were transferred from the Pooled Trust of Citizens Bank of New Hampshire ("Citizens NH") to the International Equity Fund and, in turn, transferred to the Portfolio. Such transaction was a tax-free exchange. Citizens NH was an affiliate of Bank of Ireland Asset Management (U.S.) Limited ("BIAM"), which was the investment sub-advisor to the Pooled Trust and is the investment sub-advisor to the Portfolio. Citizens NH sold their 23.5% interest on September 4, 1998. Currently there are three investors in the Portfolio, the Berger/BIAM International Fund, the International Equity Fund and the Berger/BIAM International CORE Fund. The investment objective of the Portfolio is long-term capital appreciation. The Portfolio invests primarily in common stocks of well-established companies located outside of the United States. The Portfolio is advised by BBOI, which has delegated daily investment management of the Portfolio to BIAM. Berger LLC ("Berger"), formerly Berger Associates, Inc., and BIAM each own 50% of BBOI. Effective September 30, 1999, Berger Associates, Inc. transferred its operating assets and business to Berger. The transfer did not result in any change to the investment objective or principal investment strategies of the Portfolio, or result in any change to the day-to-day management of the Portfolio's investments. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies consistently followed by the Portfolio in the preparation of its financial statements. The policies are in conformity with generally accepted accounting principles. INVESTMENT VALUATION Securities are valued at the close of the regular trading session of the New York Stock Exchange (the "Exchange") on each day that the Exchange is open. Securities listed on national exchanges, the Nasdaq Stock Market and foreign exchanges are valued at the last sale price on such markets, or, if no last sale price is available, they are valued using the mean between their current bid and ask prices. Securities traded in the over-the-counter market are valued at the mean between their current bid and ask prices. Short-term obligations maturing within sixty days are valued at amortized cost, which approximates market value. Prices of foreign securities are converted to U.S. dollars using exchange rates determined prior to the close of the Exchange. Securities for which quotations are not readily available are valued at fair values as determined in good faith pursuant to consistently applied procedures established by the trustees of the Portfolio. Generally, trading in foreign securities markets is substantially completed each day at various times prior to the close of the Exchange. The values of foreign securities are determined as of the earlier of such market close or the closing time of the Exchange. Occasionally, events affecting the value of such securities may occur between the times at which they are determined and the close of the Exchange, or when the foreign market on which such securities trade is closed but the Exchange is open. If during such periods, events occur that materially affect the value of such securities, the securities will be valued at their fair market value as determined in good faith pursuant to consistently applied procedures established by the trustees of the Portfolio. FOREIGN CURRENCY TRANSLATION Assets and liabilities initially expressed in terms of foreign currencies are translated into U.S. dollars at the prevailing market rates as quoted by one or more banks or dealers on the date of valuation. The cost of securities is translated into U.S. dollars at the rates of exchange prevailing when such securities were acquired. Income and expenses are translated into U.S. dollars at rates of exchange prevailing when accrued. FEDERAL INCOME TAXES The Portfolio is considered a partnership for federal income tax purposes. As such, each investor in the Portfolio will be taxed on its share of the Portfolio's ordinary income and capital gains. It is intended that the Portfolio's assets will be managed in such a way that an investor in the Portfolio will be able to satisfy the requirements of Sub-Chapter M of the Internal Revenue Code. INVESTMENT TRANSACTIONS AND INVESTMENT INCOME Investment transactions are accounted for on the date investments are purchased or sold. Dividend income is recorded on the ex-dividend date except that certain dividends from foreign securities are reported as soon as the Portfolio is informed of the ex-dividend date if such information is obtained subsequent to the ex-dividend date. Berger Funds September 30, 1999 Annual Report 68 - -------------------------------------------------------------------------------- BERGER/BIAM INTERNATIONAL PORTFOLIO 1 ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES - CONTINUED Dividend income is recorded net of foreign taxes withheld. Interest income is recorded on the accrual basis and includes accretion of discount and amortization of premium. Gains and losses are computed on the identified cost basis for both financial statement and federal income tax purposes for all securities. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires manage ment to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results may differ from those estimates. 2 AGREEMENTS BBOI renders investment advisory services to the Portfolio pursuant to an agreement that provides for an investment advisory fee to be paid to BBOI at the annual rate of .90% of the Portfolio's average daily net assets. BBOI has agreed to waive its advisory fee to the extent that the Portfolio's normal operating expenses in any fiscal year (including the investment advisory fee and custodian fees, but excluding brokerage commissions, interest, taxes and extraordinary expenses) exceed 1.00% of the Portfolio's average daily net assets for that fiscal year. BBOI is also responsible for providing for or arranging for all managerial and administrative services necessary for the operations of the Portfolio. BBOI pays BIAM a sub-advisory fee from the investment advisory fee it receives from the Portfolio. The Portfolio has also entered into recordkeeping and pricing agreements with Investors Fiduciary Trust Company ("IFTC"), which also serves as the Portfolio's custodian and transfer agent. The recordkeeping and pricing agreements provide for the monthly payment of a base fee plus a fee computed as a percentage of average daily net assets on a total relationship basis with other Berger Funds (which consists of Berger Information Technology Fund, Berger New Generation Fund, Berger Select Fund, Berger Small Company Growth Fund, Berger Small Cap Value Fund, Berger Mid Cap Growth Fund, Berger Mid Cap Value Fund, Berger 100 Fund, Berger Growth & Income Fund and Berger Balanced Fund) (collectively, the "Funds"). IFTC's fees for custody, recordkeeping, pricing and transfer agency services are subject to reduction by credits earned by the Portfolio, based on the cash balances of the Portfolio held by IFTC as custodian and by credits received from directed brokerage transactions. Certain officers and trustees of the Trust are officers and directors of Berger, BBOI or BIAM. Trustees who are not affiliated with Berger, BBOI or BIAM are compensated for their services according to a fee schedule, allocated among the Berger Funds and the Portfolio, which includes an annual fee component and a per meeting component. The Portfolio's portion of the trustees' fees and expenses for the year ended September 30, 1999, totaled $22,213. The Trust adopted a Trustee Fee Deferral Plan (the "Plan") which allows the non-affiliated trustees to defer the receipt of all or a portion of the trustee fees payable. The deferred fees are invested in various Berger Funds until distribution in accordance with the Plan. Annual Report September 30, 1999 Berger Funds 69 - -------------------------------------------------------------------------------- BERGER/BIAM INTERNATIONAL PORTFOLIO 3 INVESTMENT TRANSACTIONS PURCHASES AND SALES Purchases and sales proceeds of investment securities (excluding short-term securities) during the year ended September 30, 1999 were as follows:
Purchases Sales - -------------------------------------------- $65,551,376 $33,821,723
There were no purchases or sales of long-term U.S. government securities during the year ended September 30, 1999. UNREALIZED APPRECIATION, UNREALIZED DEPRECIATION AND FEDERAL TAX COST OF SECURITIES At September 30, 1999, the federal tax cost of securities and the composition of net unrealized appreciation (depreciation) of investment securities held was as follows:
Gross Unrealized Gross Unrealized Federal Tax Cost Appreciation Depreciation Net - -------------------------------------------------------------------------------- $209,783,264 $59,176,867 $(8,825,490) $50,351,377
FORWARD CURRENCY CONTRACTS The Portfolio may enter into forward foreign currency exchange contracts for the purpose of hedging the Portfolio against exposure to market value fluctuations in foreign currencies. The use of such instruments may involve risks such as the possibility of illiquid markets or imperfect correlation between the value of the contracts and the underlying securities, or that the counterparty will fail to perform its obligations. Forward currency contracts and foreign denominated assets may involve more risks than domestic transactions, including currency risk, political and economic risk, regulatory risk and market risk. Risk may arise from the potential inability of a counterparty to meet the terms of a contract and from unanticipated movements in the value of foreign currencies relative to the U.S. dollar. The forward foreign currency exchange contracts are adjusted to the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement purposes as unrealized gains or losses until the contract settlement date. Realized gains or losses on these securities are included in Net Realized Gain (Loss) on Investments and Foreign Currency Transactions in the Statement of Operations. REPURCHASE AGREEMENTS Repurchase agreements held by the Portfolio are fully collateralized by U.S. government securities and such collateral is in the possession of the Portfolio's custodian. The collateral is evaluated daily to ensure its market value exceeds the current market value of the repurchase agreements including accrued interest. In the event of default on the obligation to repurchase, the Portfolio has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the other party to the agreement, realization and/or retention of the collateral or proceeds may be subject to legal proceedings. CONCENTRATION OF RISK The Portfolio may have elements of risk due to concentrated investments in specific industries or foreign issuers located in a specific country. Such concentrations may subject the Portfolio to additional risk resulting from future political or economic conditions and/or possible impositions of adverse foreign governmental laws or currency exchange restrictions. Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency Transactions in the Statement of Operations includes fluctuations from currency exchange rates and fluctuations in market value. 4 LINE OF CREDIT The Portfolio, along with certain of the Berger Funds, is party to an ongoing agreement with certain banks that allows these Funds and the Portfolio, collectively, to borrow up to $150 million, subject to certain conditions, for temporary or emergency purposes. Interest on borrowings, if any, is charged to the specific Fund or Portfolio that executes the borrowing at the Federal Funds Rate plus 50 basis points. In addition, the unsecured line of credit requires a quarterly payment of a commitment fee based on the average daily unused portion of the line of credit. At September 30, 1999, the Portfolio had no borrowings outstanding on the line of credit. Berger Funds September 30, 1999 Annual Report 70 - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS
- ----------------------------------------------------------------------------------------------------------- BERGER INFORMATION TECHNOLOGY FUND - INVESTOR SHARES For a Share Outstanding Throughout the Period - ----------------------------------------------------------------------------------------------------------- Period from July 2, 1999(1) to September 30, 1999 - ----------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $53.47 From investment operations Net investment income (loss) (0.00)(5) Net realized and unrealized gains (losses) from investments and foreign currency transactions 3.99 Total from investment operations 3.99 Net asset value, end of period $57.46 Total Return(2) 7.46% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $4,811 Net expense ratio to average net assets(3) 1.83%(4) Ratio of net income (loss) to average net assets (1.58)%(4) Gross expense ratio to average net assets 2.16%(4) Portfolio turnover rate(2) 31%
1. Commencement of investment operations for Investor Shares. 2. Not annualized. 3. Net expenses represent gross expenses reduced by fees waived and/or reimbursed by the Advisor. 4. Annualized. 5. Amount represents less than $0.01 per share.
- ------------------------------------------------------------------------------------------------------------------------------- BERGER INFORMATION TECHNOLOGY FUND - INSTITUTIONAL SHARES For a Share Outstanding Throughout the Period - ------------------------------------------------------------------------------------------------------------------------------- Period from Period from March 1, 1999 to Year Ended April 8, 1997(1) September 30, 1999 February 28, 1999 to February 28, 1998 - ------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 44.36 $ 30.15 $20.00 From investment operations Net investment income (loss) (0.00)(5) (0.31) (0.10) Net realized and unrealized gains (losses) from investments and foreign currency transactions 13.83 14.52 10.25 Total from investment operations 13.83 14.21 10.15 Less dividends and distributions Distributions (from capital gains) (0.72) -- -- Total dividends and distributions (0.72) -- -- Net asset value, end of period $ 57.47 $ 44.36 $30.15 Total Return(2) 31.30% 47.13% 50.75% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $20,094 $12,446 $2,674 Net expense ratio to average net assets(3) 1.49% 1.50% 1.50%(4) Ratio of net income (loss) to average net assets (1.22)% (1.19)% (1.01)%(4) Gross expense ratio to average net assets 1.94% 2.67% 12.17%(4) Portfolio turnover rate(2) 31% 35% 33%
1. Commencement of investment operations for Institutional Shares. 2. Not annualized. 3. Net expenses represent gross expenses reduced by fees waived and/or reimbursed by the Advisor. 4. Annualized. 5. Amount represents less than $0.01 per share. See notes to financial statements. Annual Report September 30, 1999 Berger Funds 71 - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS
- ----------------------------------------------------------------------------------------------------------------------- BERGER NEW GENERATION FUND - INVESTOR SHARES For a Share Outstanding Throughout the Period - ----------------------------------------------------------------------------------------------------------------------- Years Ended September 30, Period from ------------------------- March 29, 1996(1) to 1999 1998 1997 September 30, 1996 - ----------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 12.66 $ 14.72 $ 11.82 $ 10.00 From investment operations Net investment income (loss) (0.00)(6) -- (0.13) 0.56 Net realized and unrealized gains (losses) from investments and foreign currency transactions 13.61 (2.06) 3.64 1.26 Total from investment operations 13.61 (2.06) 3.51 1.82 Less dividends and distributions Dividends (from net investment income) -- -- (0.61) -- Distributions (from capital gains) (0.50) -- -- -- Total dividends and distributions (0.50) -- (0.61) -- Net asset value, end of period $ 25.77 $ 12.66 $ 14.72 $ 11.82 Total Return(2) 110.82% (13.99)% 31.53% 18.20% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $330,938 $113,693 $190,164 $116,912 Net expense ratio to average net assets(3) 1.54% 1.72% 1.89% 1.90%(4) Ratio of net income (loss) to average net assets (1.29)% (1.37)% (1.51)% 12.35%(4) Gross expense ratio to average net assets 1.54% 1.72% 1.89% 2.09%(4) Portfolio turnover rate(2) 168% 243% 184% 474%(5)
1. Commencement of investment operations for Investor Shares. 2. Not annualized. 3. Net expenses represent gross expenses reduced by fees waived and/or reimbursed by the Advisor. 4. Annualized. 5. Portfolio turnover was greater than expected during this period due to active trading undertaken in response to market conditions at a time when the Fund's assets were still relatively small and before the Fund was fully invested. 6. Amount represents less than $0.01 per share.
- --------------------------------------------------------------------------------------------------------- BERGER NEW GENERATION FUND - INSTITUTIONAL SHARES For a Share Outstanding Throughout the Period - --------------------------------------------------------------------------------------------------------- Period from August 16, 1999(1) to September 30, 1999 - --------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $23.29 From investment operations Net investment income (loss) (0.00)(5) Net realized and unrealized gains (losses) from investments and foreign currency transactions 2.50 Total from investment operations 2.50 Net asset value, end of period $25.79 Total Return(2) 10.73% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 347 Net expense ratio to average net assets(3) 1.02%(4) Ratio of net income (loss) to average net assets (0.85)%(4) Gross expense ratio to average net assets 1.02%(4) Portfolio turnover rate(2) 168%
1. Commencement of investment operations for Institutional Shares. 2. Not annualized. 3. Net expenses represent gross expenses reduced by fees waived and/or reimbursed by the Advisor. 4. Annualized. 5. Amount represents less than $0.01 per share. See notes to financial statements. Berger Funds September 30, 1999 Annual Report 72 - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------------------------------- BERGER SELECT FUND For a Share Outstanding Throughout the Period - -------------------------------------------------------------------------------------------------------- Period from Year ended December 31, 1997(1) September 30, 1999 to September 30, 1998 - -------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 13.26 $ 10.00 From investment operations Net investment income (loss) 0.01 0.07 Net realized and unrealized gains (losses) from investments and foreign currency transactions 6.80 3.19 Total from investment operations 6.81 3.26 Less dividends and distributions Dividends (from net investment income) (0.05) -- Dividends (in excess of net investment income) (0.01) -- Distributions (from capital gains) (0.84) -- Total dividends and distributions (0.90) -- Net asset value, end of period $ 19.17 $ 13.26 Total Return(2) 53.06% 32.60% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $101,352 $41,571 Net expense ratio to average net assets(3) 1.29% 1.48%(5) Ratio of net income (loss) to average net assets 0.27% 1.13%(5) Gross expense ratio to average net assets 1.29% 1.48%(5) Portfolio turnover rate(2) 696% 1486%(4)
1. Commencement of investment operations. 2. Not annualized. 3. Net expenses represent gross expenses reduced by fees waived and/or reimbursed by the Advisor. 4. Portfolio turnover was greater than expected during this period due to active trading undertaken in response to market conditions at a time when the Fund's assets were still relatively small and before the Fund was fully invested. 5. Annualized.
- ------------------------------------------------------------------------------------------------------------------------------ BERGER SMALL COMPANY GROWTH FUND - INVESTOR SHARES For a Share Outstanding Throughout the Period - ------------------------------------------------------------------------------------------------------------------------------ Years Ended September 30, ------------------------ 1999 1998 1997 1996 1995 - ------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 3.61 $ 5.33 $ 4.74 $ 3.61 $ 2.74 From investment operations Net investment income (loss) (0.00)(1) -- (0.05) (0.03) (0.02) Net realized and unrealized gains (losses) from investments and foreign currency transactions 1.95 (1.24) 0.84 1.16 0.89 Total from investment operations 1.95 (1.24) 0.79 1.13 0.87 Less dividends and distributions Dividends (from net investment income) -- -- -- -- (0.00)(1) Distributions (from capital gains) (0.70) (0.48) (0.20) -- -- Total dividends and distributions (0.70) (0.48) (0.20) -- -- Net asset value, end of period $ 4.86 $ 3.61 $ 5.33 $ 4.74 $ 3.61 Total Return 62.78% (24.70)% 17.68% 31.30% 31.90% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $675,637 $561,741 $902,685 $871,467 $522,667 Net expense ratio to average net assets(2) 1.60% 1.48% 1.67% 1.68% 1.89% Ratio of net income (loss) to average net assets (1.21)% (1.01)% (1.09)% (0.97)% (0.74)% Gross expense ratio to average net assets 1.60% 1.59% 1.67% 1.68% 1.89% Portfolio turnover rate 128% 97% 111% 91% 109%
1. Amount represents less than $0.01 per share. 2. Net expenses represent gross expenses reduced by fees waived and/or reimbursed by the Advisor. See notes to financial statements. Annual Report September 30, 1999 Berger Funds 73 - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------------------------------------- BERGER SMALL CAP VALUE FUND - INVESTOR SHARES For a Share Outstanding Throughout the Period - --------------------------------------------------------------------------------------------------------------- Years Ended September 30, Period from ------------------------ February 14, 1997(1) 1999 1998 to September 30, 1997 - --------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 17.58 $ 22.28 $ 17.24 From investment operations Net investment income (loss) (0.02) 0.42 0.03 Net realized and unrealized gains (losses) from investments and foreign currency transactions 4.26 (2.58) 5.01 Total from investment operations 4.24 (2.16) 5.04 Less dividends and distributions Dividends (from net investment income) (0.07) (0.17) -- Distributions (from capital gains) (0.81) (2.37) -- Total dividends and distributions (0.88) (2.54) -- Net asset value, end of period $ 20.94 $ 17.58 $ 22.28 Total Return(2) 24.69% (10.98)% 29.23% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $374,063 $108,465 $55,211 Net expense ratio to average net assets(3) 1.37% 1.56% 1.66%(4) Ratio of net income (loss) to average net assets 1.36% 0.87% 0.60%(4) Gross expense ratio to average net assets 1.37% 1.56% 1.66%(4) Portfolio turnover rate(2) 66% 69% 81%
1. Commencement of investment operations for Investor Shares. 2. Not annualized. 3. Net expenses represent gross expenses reduced by fees waived and/or reimbursed by the Advisor. 4. Annualized.
- ------------------------------------------------------------------------------------------------------------------------------------ BERGER SMALL CAP VALUE FUND - INSTITUTIONAL SHARES For a Share Outstanding Throughout the Period - ------------------------------------------------------------------------------------------------------------------------------------ Years Ended September 30, Period from Years Ended December 31, ------------------------ January 1, 1997 to ----------------------- 1999 1998 September 30, 1997 1996 1995 1994 - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 17.63 $ 22.33 $ 16.48 $ 14.57 $ 12.75 $ 13.99 From investment operations Net investment income (loss) 0.04 0.45 0.07 0.12 0.09 (0.01) Net realized and unrealized gains (losses) from investments and foreign currency transactions 4.28 (2.55) 5.78 3.62 3.23 0.91 Total from investment operations 4.32 (2.10) 5.85 3.74 3.32 0.90 Less dividends and distributions Dividends (from net investment income) (0.14) (0.23) -- (0.11) (0.09) -- Distributions (from capital gains) (0.81) (2.37) -- (1.72) (1.41) (2.14) Total dividends and distributions (0.95) (2.60) -- (1.83) (1.50) (2.14) Net asset value, end of period $ 21.00 $ 17.63 $ 22.33 $ 16.48 $ 14.57 $ 12.75 Total Return(2) 25.18% (10.65)% 33.50% 25.58% 26.07% 6.74% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $414,347 $92,787 $58,450 $36,041 $31,833 $18,270 Net expense ratio to average net assets(3) 1.01% 1.19% 1.34%(1) 1.48% 1.64% 1.43% Ratio of net income (loss) to average net assets 1.69% 1.26% 0.63%(1) 0.69% 0.64% (0.04)% Gross expense ratio to average net assets 1.01% 1.19% 1.34%(1) 1.48% 1.64% 1.43% Portfolio turnover rate(2) 66% 69% 81% 69% 90% 125%
1. Annualized. 2. Not annualized. 3. Net expenses represent gross expenses reduced by fees waived and/or reimbursed by the Advisor. See notes to financial statements. Berger Funds September 30, 1999 Annual Report 74 - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS
- ---------------------------------------------------------------------------------------------------------------------- BERGER MID CAP GROWTH FUND For a Share Outstanding Throughout the Period - ---------------------------------------------------------------------------------------------------------------------- Period from Year Ended December 31, 1997(1) September 30, 1999 to September 30, 1998 - ---------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 10.93 $ 10.00 From investment operations Net investment income (loss) (0.00)(5) -- Net realized and unrealized gains (losses) from investments and foreign currency transactions 11.10 0.93 Total from investment operations 11.10 0.93 Less dividends and distributions Distributions (from capital gains) (0.21) -- Total dividends and distributions (0.21) -- Net asset value, end of period $ 21.82 $ 10.93 Total Return(2) 102.76% 9.30% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $25,550 $4,283 Net expense ratio to average net assets(3) 1.78% 2.00%(4) Ratio of net income (loss) to average net assets (1.03)% (0.82%)(4) Gross expense ratio to average net assets 1.78% 2.46%(4) Portfolio turnover rate(2) 178% 262%
1. Commencement of investment operations. 2. Not annualized. 3. Net expenses represents gross expenses reduced by fees waived and/or reimbursed by the Advisor. 4. Annualized. 5. Amount represents less than $0.01 per share.
- ---------------------------------------------------------------------------------------------------------------------- BERGER MID CAP VALUE FUND For a Share Outstanding Throughout the Period - ---------------------------------------------------------------------------------------------------------------------- Period from Year Ended August 12, 1998(1) September 30, 1999 to September 30, 1998 - ---------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 9.33 $ 10.00 From investment operations Net investment income (loss) 0.07 0.03 Net realized and unrealized gains (losses) from investments and foreign currency transactions 2.83 (0.70) Total from investment operations 2.90 (0.67) Less dividends and distributions Dividends (from net investment income) (0.06) -- Total dividends and distributions (0.06) -- Net asset value, end of period $ 12.17 $ 9.33 Total Return(2) 31.12% (6.70)% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 22,918 $ 19,710 Net expense ratio to average net assets(3) 1.62% 1.68%(4) Ratio of net income (loss) to average net assets 0.54% 2.30%(4) Gross expense ratio to average net assets 1.62% 1.68%(4) Portfolio turnover rate(2) 154% 25%
1. Commencement of investment operations. 2. Not annualized. 3. Net expenses represents gross expenses reduced by fees waived and/or reimbursed by the Advisor. 4. Annualized. See notes to financial statements. Annual Report September 30, 1999 Berger Funds 75 - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS
- ---------------------------------------------------------------------------------------------------------------------------------- BERGER 100 FUND For a Share Outstanding Throughout the Period - ---------------------------------------------------------------------------------------------------------------------------------- Years Ended September 30, ----------------------------------------------------------------------- 1999 1998 1997(1) 1996(1) 1995(1) - ---------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 11.99 $ 21.51 $ 19.64 $ 18.89 $ 15.96 From investment operations Net investment income (loss) (0.00)(2) -- (0.09) (0.08) (0.04) Net realized and unrealized gains (losses) from investments and foreign currency transactions 4.55 (2.57) 4.73 1.76 2.97 Total from investment operations 4.55 (2.57) 4.64 1.68 2.93 Less dividends and distributions Distributions (from capital gains) (0.98) (6.95) (2.77) (0.93) -- Total dividends and distributions (0.98) (6.95) (2.77) (0.93) -- Net asset value, end of period $ 15.56 $ 11.99 $ 21.51 $ 19.64 $ 18.89 Total Return 38.96% (16.08)% 26.50% 9.36% 18.36% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $1,333,794 $1,286,828 $1,889,048 $2,012,706 $ 2,205,678 Net expense ratio to average net assets(3) 1.36% 1.38% 1.41% 1.42% 1.49% Ratio of net income (loss) to average net assets (0.38)% (0.38)% (0.40)% (0.43)% (0.28)% Gross expense ratio to average net assets 1.36% 1.38% 1.41% 1.42% 1.49% Portfolio turnover rate 274% 280% 200% 122% 114%
1. Per share calculations for the period were based on average shares outstanding. 2. Amount represents less than $0.01 per share. 3. Net expenses represent gross expenses reduced by fees waived and/or reimbursed by the Advisor.
- ---------------------------------------------------------------------------------------------------------------------------------- BERGER GROWTH AND INCOME FUND For a Share Outstanding Throughout the Period - ---------------------------------------------------------------------------------------------------------------------------------- Years Ended September 30, ----------------------------------------------------------------------- 1999 1998 1997 1996 1995 - ---------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 13.60 $ 16.72 $ 14.06 $ 12.89 $ 11.48 From investment operations Net investment income (loss) (0.00)(3) 0.04 0.14 0.20 0.16 Net realized and unrealized gains (losses) from investments and foreign currency transactions 4.53 (0.30) 4.28 1.17 1.43 Total from investment operations 4.53 (0.26) 4.42 1.37 1.59 Less dividends and distributions Dividends (from net investment income) -- (0.03) (0.13) (0.20) (0.18) Dividends (in excess of net investment income) (0.01) (0.01) -- -- -- Distributions (from capital gains) (2.80) (2.82) (1.63) -- -- Total dividends and distributions (2.81) (2.86) (1.76) (0.20) (0.18) Net asset value, end of period $ 15.32 $ 13.60 $ 16.72 $ 14.06 $ 12.89 Total Return 38.67% (1.60)% 34.56% 10.66% 14.05% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $379,356 $301,330 $357,023 $315,538 $354,396 Net expense ratio to average net assets(1) 1.35% 1.44% 1.51% 1.56% 1.64% Ratio of net income (loss) to average net assets (0.22)% 0.25% 0.87% 1.39% 1.33% Gross expense ratio to average net assets 1.35% 1.44% 1.51% 1.56% 1.64% Portfolio turnover rate 173% 417%(2) 173% 112% 85%
1. Net expenses represent gross expenses reduced by fees waived and/or reimbursed by the Advisor. 2. Portfolio turnover was greater than anticipated during this period as a result of higher than normal trading activity undertaken in response to market conditions that existed at that time. 3. Amount represents less than $0.01 per share. See notes to financial statements. Berger Funds September 30, 1999 Annual Report 76 - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------------------------------ BERGER BALANCED FUND For a Share Outstanding Throughout the Period - ------------------------------------------------------------------------------------------------ Years Ended September 30, ------------------------- 1999 1998(1) - ------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 13.28 $ 10.00 From investment operations Net investment income 0.23 0.22 Net realized and unrealized gains from investments and foreign currency transactions 4.69 5.17 Total from investment operations 4.92 5.39 Less dividends and distributions Dividends (from net investment income) (0.23) (0.21) Distributions (from capital gains) (1.35) (1.90) Total dividends and distributions (1.58) (2.11) Net asset value, end of period $ 16.62 $ 13.28 Total Return 39.41% 56.77% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $122,766 $30,721 Net expense ratio to average net assets(2) 1.23% 1.50% Ratio of net income to average net assets 1.63% 1.81% Gross expense ratio to average net assets 1.23% 1.57% Portfolio turnover rate 227% 658%(3)
1. The Fund had no financial highlights for the one day of operations during the period ended September 30, 1997. 2. Net expenses represent gross expenses reduced by fees waived and/or reimbursed by the Advisor. 3. Portfolio turnover was greater than expected during this period due to higher than normal trading activity undertaken in response to market conditions at a time when the Fund's assets were still relatively small and before the Fund was fully invested.
- ------------------------------------------------------------------------------------------------------------------- BERGER/BIAM INTERNATIONAL FUND For a Share Outstanding Throughout the Period - ------------------------------------------------------------------------------------------------------------------- Years Ended September 30, Period from ------------------------ November 7, 1996(1) to 1999 1998 September 30, 1997 - ------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 10.06 $ 11.46 $ 10.00 From investment operations Net investment income (loss) (0.07) 0.50(2) 0.05 Net realized and unrealized gains (losses) from investments 3.01 (1.46)(2) 1.41 Total from investment operations 2.94 (0.96) 1.46 Less dividends and distributions Dividends (from net investment income) (0.47) (0.06) -- Distributions (in excess of capital gains) (0.02) (0.38) -- Total dividends and distributions (0.49) (0.44) -- Net asset value, end of period $ 12.51 $ 10.06 $ 11.46 Total Return(3) 29.64% (8.46)% 14.60% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $23,014 $16,515 $18,673 Net expense ratio to average net assets(4,5) 1.76% 1.80% 1.90%(6) Ratio of net income (loss) to average net assets (0.01)% 2.20% 0.61%(6) Gross expense ratio to average net assets(5) 1.77% 1.83% 1.99%(6) Portfolio turnover rate(3,7) 16% 17% 17%
1. Commencement of investment operations. 2. Restated. 3. Not annualized. 4. Net expenses represent gross expenses reduced by fees waived and/or reimbursed by the Portfolio's Advisor. 5. Reflects the Fund's expenses plus the Fund's pro rata share of the Portfolio's expenses. 6. Annualized. 7. Represents the portfolio turnover rate of the Portfolio. All of the investable assets of the Fund are invested in the Portfolio. See notes to financial statements. Annual Report September 30, 1999 Berger Funds 77 - -------------------------------------------------------------------------------- REPORT OF INDEPENDENT ACCOUNTANTS To the Boards of Directors/Trustees and Shareholders of Berger One Hundred Fund, Inc., Berger Growth and Income Fund, Inc., Berger Omni Investment Trust, Berger Investment Portfolio Trust, and Berger/BIAM Worldwide Funds Trust, and to the Board of Trustees and Investors of Berger/BIAM Worldwide Portfolios Trust - -------------------------------------------------------------------------------- In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights or ratios/supplemental data, as applicable, present fairly, in all material respects, the financial position of Berger One Hundred Fund, Inc., Berger Growth and Income Fund, Inc., Berger Small Cap Value Fund (the sole fund comprising Berger Omni Investment Trust), Berger Information Technology Fund, Berger New Generation Fund, Berger Select Fund, Berger Small Company Growth Fund, Berger Mid Cap Growth Fund, Berger Mid Cap Value Fund, and Berger Balanced Fund (constituting Berger Investment Portfolio Trust), Berger/BIAM International Portfolio (the sole portfolio comprising Berger/BIAM Worldwide Portfolios Trust), and Berger/BIAM International Fund (one of the funds constituting Berger/BIAM Worldwide Funds Trust) (collectively, the "Funds") at September 30, 1999, the results of each of their operations for the periods indicated, the changes in each of their net assets for each of the periods indicated and the financial highlights or ratios/supplemental data for each of the periods indicated, in conformity with generally accepted accounting principles. These financial statements and financial highlights or ratios/supplemental data (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 generally accepted auditing standards, 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 September 30, 1999 by correspondence with the custodian and brokers, provide a reasonable basis for the opinion expressed above. The financial statements of The Omni Investment Fund (now known as Berger Omni Investment Trust) and InformationTech 100 Fund (now known as Berger Information Technology Fund) for the years ended December 31, 1996 and February 28, 1999, respectively, were audited by other independent accountants whose reports dated January 24, 1997 and March 26, 1999, respectively, expressed unqualified opinions on those financial statements. /s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP Denver, Colorado November 4, 1999 ---------------- [LOGO] Shareholders with questions should write Bulk Rate to: Berger Funds, P.O. Box 5005, U.S. Postage Denver, CO 80217, or call (800) 551-5849. PAID Visit our website at bergerfunds.com. Berger Funds ---------------- BERGER FUNDS 210 University Blvd Denver, CO 80206 COMAR -----END PRIVACY-ENHANCED MESSAGE-----