-----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, FE5uqLxW82FDpRpKWBSFZkXNvb2PjmhSa6YfBpQHSSavtvY87qzn4iwqQ9jGOmn0 pgG72u7ACZ07B++LqhKupA== /in/edgar/work/0001035704-00-000946/0001035704-00-000946.txt : 20001130 0001035704-00-000946.hdr.sgml : 20001130 ACCESSION NUMBER: 0001035704-00-000946 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001129 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BERGER OMNI INVESTMENT TRUST CENTRAL INDEX KEY: 0000765924 STANDARD INDUSTRIAL CLASSIFICATION: [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: 780311 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 N-30D 1 d81163dn-30d.txt ANNUAL REPORT 1 September 30, 2000 ANNUAL REPORT [BERGER FUNDS LOGO] 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 GROWTH FUND BERGER INTERNATIONAL FUND BERGER GROWTH AND INCOME FUND BERGER BALANCED FUND 2 Berger Funds are presenting a combined annual report which includes 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 Growth Fund, Berger International Fund, Berger Growth and Income Fund and Berger Balanced Fund. This report reflects the financial position of each Fund at September 30, 2000 and the results of their operations and changes in their net assets and financial highlights for the periods indicated, in a single document. 3 Berger Funds 3 Berger Funds o September 30, 2000 Combined Annual Report Table of Contents - -------------------------------------------------------------------------------- A Message To Our Shareholders ............................................. 4 BERGER FUNDS Berger Information Technology Fund ........................................ 6 Berger New Generation Fund ................................................ 10 Berger Select Fund ........................................................ 15 Berger Small Company Growth Fund .......................................... 18 Berger Small Cap Value Fund ............................................... 23 Berger Mid Cap Growth Fund ................................................ 28 Berger Mid Cap Value Fund ................................................. 32 Berger Growth Fund ........................................................ 36 Berger International Fund ................................................. 40 Berger Growth and Income Fund ............................................. 42 Berger Balanced Fund ...................................................... 46 FINANCIAL STATEMENTS AND NOTES Statements of Assets and Liabilities ...................................... 50 Statements of Operations .................................................. 52 Statements of Changes in Net Assets ....................................... 54 Berger International Fund Financial Statements ............................ 58 Berger Funds Notes to Financial Statements ................................ 60 Berger International Portfolio Financial Statements ....................... 67 (to be read in conjunction with the Berger International Fund) Berger International Portfolio Notes to Financial Statements .............. 72 FINANCIAL HIGHLIGHTS ...................................................... 74 Report of Independent Accountants ......................................... 82 Other Matters (Unaudited) ................................................. 83
To obtain a prospectus for any of the Berger Funds, which contains more complete information, including risks, fees and expenses, call (800) 551-5849. Please read it carefully before you invest. Berger Distributors LLC - Distributor www.bergerfunds.com 4 4 Berger Funds o September 30, 2000 Combined Annual Report A Message To Our Shareholders - -------------------------------------------------------------------------------- Dear Berger Investor: With apologies to Charles Dickens, this past fiscal year, which ended September 30, was "the best of times and it was the worst of times." The period began with the December quarter of 1999, during which the U.S. stock market moved smartly higher, led by substantial gains in technology stocks. Investor enthusiasm for tech stocks was fueled by accelerating revenue and earnings growth, which were driven by the rapid build-out of the Internet and aggressive deployment of e-commerce initiatives by both new-economy companies and established Fortune 1000 "brick and mortar" companies. Repeated increases in interest rates and warnings from the Federal Reserve Board that above-trend economic growth was increasing the risk of inflation were no deterrent through most of the first quarter of 2000. A correction finally got under way in March, gathered steam and ultimately took the tech-heavy NASDAQ Composite Index down 37% by the end of May. Then, on increasing evidence that economic growth was slowing, a consensus developed that the Federal Reserve had largely completed the cycle of raising interest rates. Stocks were able to rally, with fits and starts, through the end of August. After Labor Day, though, sentiment deteriorated because of earnings concerns. High energy prices also added to fears that the slowdown in the economy might end in recession rather than a soft landing. The correction in technology stocks resumed and continued through the September fiscal year-end, exacerbated by negative earnings pre-announcements from some high-profile tech companies such as Intel and Lucent. The Main Event Technology has been so much the main event in the stock market over the past two years that it seems as if it is the only event, and with good reason. The current, record-setting economic expansion that began early in the decade, accelerated in the later 1990s and continues today, has been driven by capital spending, and the share of that spending going to investment in technology has been increasing. These trends have culminated in substantial productivity gains, enabling the economy to grow more rapidly without provoking inflation than at any other time in the post-war era. Deregulation here and abroad, democratization and privatization around the globe and freer trade have stimulated global economic growth and opportunities for businesses everywhere. These factors have also intensified the level of competition that businesses face, leaving companies with little or no pricing power. This is driving investment in technology to improve efficiency and results. These investments are continuing at a rapid rate as companies strive to gain any possible competitive advantage. Valuation Correction We see the correction we have experienced in technology stocks as largely a correction in valuations. Even though we have seen some evidence of slowing growth in some areas of technology, such as sales of wireless handsets, PC's and some semiconductor equipment and components, we believe that the correction is not a reflection of a significant deterioration in the fundamentals that drove the prior advance. Many key areas of technology are still exhibiting very strong growth. The larger issue is that valuations of tech stocks became very high as the market discounted their high growth rates and bright futures. At high valuation levels, any real or perceived weakness in earnings or future growth prospects has a pronounced negative effect on prices. Any general uncertainty about the economy, or the outcome of the elections or in the direction of interest rates also may cause investors to shorten their time horizons. This too, has a negative effect on growth stock prices since growth stocks in general, and technology stocks in particular, are priced to a great extent on future as opposed to present sales and earnings. This is why we have written in the past that we expect a higher level of volatility in the market and that a correction can be a healthy thing for the long-term investor. Corrections return great, leading growth stocks to attractive valuation levels and purge the market of excessive speculation, which can reset the stage for a renewed and sustainable advance. Capital Gains A side effect of the market volatility we have experienced during the last year will be apparent in the capital gains investors will see in 2000. With the dramatic appreciation in many stocks during the year, portfolio managers often recognized that selling a stock was prudent. Despite lowering overall turnover, our managers occasionally found it necessary to sell stocks when some investors redeemed shares during market downturns. The result has been larger than normal capital gains for some of the funds. For more information on your fund's estimated capital gains, visit our Website at www.bergerfunds.com or call (800) 551-5849. Regardless of the short-term volatility in the market, we at Berger remain committed to the same investment philosophy 5 Berger Funds 5 Berger Funds o September 30, 2000 Combined Annual Report - -------------------------------------------------------------------------------- pioneered by Bill Berger more than 25 years ago. We know that achieving our goal of providing investors with consistently competitive performance in every Berger Fund can only be reached by adhering to our disciplined, fundamental, stock-by-stock approach to investing and remaining focused on the long term. Optimistic Outlook We remain constructive on the outlook for the economy and the markets. The economy has slowed to a healthy, sustainable growth rate. We believe the technology-driven productivity revolution is alive and well. Inflation appears to be very much under control, and interest rates may be poised to moderate. Corporate earnings performance remains at a generally high level. In this context, we view corrections as buying opportunities, and we encourage investors to take a long-term approach by employing dollar-cost-averaging as a technique to help smooth the effect of short-term market swings on their long-term results. Time-proven Basics For more than 25 years we have advocated basic investment principles to our investors: o Time and diversification are an investor's greatest allies against risk. o Those who take a long-term view are often the most successful investors. o Investing regularly is an excellent way to reach one's financial goals. o It's time in the market, not market timing, that counts most. Sincerely, /s/ JACK R. THOMPSON /s/ JAY W. TRACEY Jack R. Thompson Jay W. Tracey President Chief Investment Officer Past performance is no guarantee of future results. Dollar-cost-averaging does not assure a profit or protect against a loss in declining markets. This material must be preceded or accompanied by a prospectus. Berger Distributors LLC - Member NASD. (11/00) 6 6 Berger Funds o September 30, 2000 Combined Annual Report Ticker Symbol - Investor Shares BINVX - Institutional Shares BINFX Fund Number - Investor Shares 912 - Institutional Shares 913 Berger Information Technology Fund PORTFOLIO MANAGER COMMENTARY WILLIAM F. K. SCHAFF - -------------------------------------------------------------------------------- Performance The Berger Information Technology Fund (the "Fund") gained 114.97% (investor shares) and 115.86% (institutional shares) for the fiscal year ended September 30, 2000. Its benchmark, the Wilshire 5000 Index,(1) gained 17.56% over the same period. The technology sector outshone all others for the first half of the fiscal year, before high volatility roiled the sector, shaking the confidence of many technology investors and driving down prices. Since that time, Internet and e-commerce companies have taken the biggest hit. On the upside, technologies that drive corporate Information Technology (IT), including optical networking technology and wireless components, infrastructure and applications continued to experience strong growth. Last year--1999--was a time of euphoria when the stock of almost any technology-related company with an exciting story would rise unconditionally. Next year is likely to be a year when investors get back to solid fundamentals and valuations. It appears that 2000 will be remembered as a time of confusion as investors deal with the transition. Period in Review Clearly, technology is a much stronger force in the economy than ever before, but speculation is still speculation, whether in real estate or the stock market. Having said that, there are still many technology companies that are not overpriced. Now that more of the nonprofitable technology companies using acronyms such as B2C, B2B and B2B2C are filing with their local bankruptcy court, we can focus on more profitable businesses. We always look for the start of IBM's new upgrade cycle because the economic benefits seem to trickle down to many other companies. One group of potential beneficiaries are mainframe software vendors. Stocks of these companies have been beaten down tremendously but still generate solid cash flows and have pristine balance sheets--not bad defensive characteristics. The Fund experienced strong gains by investing primarily in profitable companies with longer performance track records. Applied Micro Circuits was a strong performer all year, in addition to storage vendors Network Appliance and EMC. Our largest position, BEA Systems, the leading middleware applications integrator, also performed well. We maintained large positions in e-commerce application integrators and supply chain software vendors such as i2 and Manugistics. We think of this as the glue that makes e-commerce work and that has contributed much to the productivity gains seen to date. We believe some of these investments will be both short- and long-term, as e-commerce will continue to be a growing part of our lives. Though the Fund has few direct Internet plays, it does contain many of the software companies that produce the required nuts and bolts of e-commerce infrastructure, such as Oracle and Siebel Systems. The Fund benefited greatly over the fiscal year from their presence. On the downside, the few chips stocks we own were the weakest performers, but not unexpectedly because they had been the best performers the first half of the year. The biggest disappointment was Computer Associates, the largest independent mainframe software vendor, which preannounced a weak quarter once again. Another negative contributor to performance was Lucent Technologies, one of the few "value" plays in technology, which continues to get cheaper. Despite some of these performance setbacks, we continued to have more winners than losers, and our top 10 positions, representing more than 30% of the portfolio, were up strongly. Summary Looking ahead, we see signs that the economy will continue to slow. However, technology will remain the largest weapon for businesses to increase productivity and enhance their competitive position in the global marketplace. One of the best-performing sectors for 2001 could be security and related security vendors. As e-commerce grows, so will all the related security issues. With the advent of digital certification, there will be greater concern for privacy, authentication, authorization and certification. Leading-edge biometric technologies will also finally become broadly commercially viable in 2001--expect to see some big announcements. However, given the confusion that is likely to be rampant, homework will have to be done to differentiate winners and losers once again. Past performance is no guarantee of future results. (1) 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. 7 Berger Funds 7 Berger Funds o September 30, 2000 Combined Annual Report Performance Overview - -------------------------------------------------------------------------------- Berger Information Technology Fund - Investor Shares* Comparison of Change in Value of Berger Information Technology Fund; Investor Shares vs. Wilshire 5000 Index [GRAPH] AVERAGE ANNUAL TOTAL RETURNS AS OF SEPTEMBER 30, 2000 One Year 114.97% Three Year 65.70% Life of Fund (4/8/97) 68.74% Berger Information Technology Fund- Investor Shares $61,762 Wilshire 5000 Index $19,502 Berger Information Technology Fund - Institutional Shares* Comparison of Change in Value of Berger Information Technology Fund; Institutional Shares vs. Wilshire 5000 Index AVERAGE ANNUAL TOTAL RETURNS AS OF SEPTEMBER 30, 2000 One Year 115.86% Three Year 66.68% Life of Fund (4/8/99) 69.60% [GRAPH] Berger Information Technology Fund- Institutional Shares $1,571,631 Wilshire 5000 Index $487,555 * Past performance is no guarantee of future results. Fund performance shown reflects the unusually favorable market conditions that existed in 1999 which likely are not sustainable as market conditions change. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. IPO's have made a significant contribution to the Fund's recent performance. There can be no assurance that such contribution will continue. 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. This would have reduced the Investor Shares' return. 8 8 Berger Funds o September 30, 2000 Combined Annual Report Berger Information Technology Fund - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS
September 30, 2000 ------------------ Shares Value - ------ ------------------ Common Stock (95.16%) Commercial Services - Advertising (2.07%) 34,400 TMP Worldwide, Inc.* $ 2,769,200 ------------ Commercial Services - Security/Safety (0.32%) 35,000 Indentix, Inc.* 425,250 ------------ Computer - Integrated Systems (0.24%) 7,000 Henry (Jack) & Associates, Inc. 303,625 330 Wind River Systems, Inc.* 15,819 ------------ 319,444 ------------ Computer - Local Networks (2.86%) 4,600 Brocade Communication Systems, Inc.* 1,085,600 73,380 Cabletron Systems, Inc.* 2,155,537 2,500 Cobalt Networks,Inc.* 144,687 3,630 Finisar Corp.* 175,601 2,000 Foundry Networks, Inc.* 133,875 1,430 JNI Corp.* 127,270 ------------ 3,822,570 ------------ Computer - Manufacturers (5.20%) 6,800 Dell Computer Corp.* 209,525 1,500 Hewlett-Packard Co. 145,500 12,800 International Business Machines Corp. 1,440,000 26,015 Palm,Inc.* 1,377,169 32,460 Sun Microsystems, Inc.* 3,789,705 ------------ 6,961,899 ------------ Computer - Memory Devices (9.02%) 56,230 EMC Corp.* 5,573,798 47,360 Network Appliance, Inc.* 6,032,480 6,900 Sandisk Corp.* 460,575 ------------ 12,066,853 ------------ Computer - Peripheral Equipment (0.13%) 6,000 American Power Conversion Corp.* 115,125 4,000 SmartDisk Corp.* 57,500 ------------ 172,625 ------------ Computer - Services (2.00%) 4,480 Automatic Data Processing, Inc. 299,600 14,800 Cognizant Technology Solutions Corp. - Class A* 577,200 1,570 Computer Sciences Corp.* 116,572 22,255 Electronic Data Systems Corp. 923,582 6,170 McDATA Corp. - Class B* 758,235 ------------ 2,675,189 ------------ Computer Software - Desktop (0.83%) 5,700 Macromedia, Inc.* 460,631 2,700 Microsoft Corp.* 162,675 2,200 Red Hat, Inc.* 37,537 10,275 Symantec Corp.* 452,100 ------------ 1,112,943 ------------ Computer Software - Educational/Entertainment (1.98%) 56,000 Smartforce PLC - Spon. ADR* 2,653,000 ------------
September 30, 2000 ------------------ Shares Value - ------ ------------------ Common Stock (95.16%) - continued Computer Software - Enterprise (15.91%) 20,800 Actuate Software Corp.* $ 718,575 5,640 Adobe Systems, Inc. 875,610 32,016 Computer Associates International, Inc. 806,403 25,000 Compuware Corp.* 209,375 1,000 E.piphany, Inc.* 77,062 13,593 Hyperion Solutions Corp.* 351,745 7,100 i2 Technologies, Inc.* 1,328,143 7,500 Manugistics Group, Inc.* 735,937 14,000 Mercury Interactive Corp.* 2,194,500 38,930 New Era of Networks, Inc.* 947,093 41,470 Oracle Corp.* 3,265,762 13,500 Peregrine Systems, Inc.* 255,656 14,600 Rational Software Corp.* 1,012,875 15,000 SAGA Systems, Inc.* 157,500 22,000 Seachange International, Inc.* 734,250 19,500 SERENA Software, Inc.* 898,218 27,800 Siebel Systems, Inc.* 3,094,487 25,495 VERITAS Software Corp.* 3,620,290 ------------ 21,283,481 ------------ Computer Software - Finance (1.77%) 7,800 Advent Software, Inc.* 545,025 31,980 Intuit, Inc.* 1,822,860 ------------ 2,367,885 ------------ Computer Software - Security (1.89%) 62,000 Axent Technologies, Inc.* 1,336,875 7,600 Check Point Software Technologies Ltd.* 1,197,000 ------------ 2,533,875 ------------ Diversified Operations (0.39%) 10,572 Agilent Technologies, Inc.* 517,367 ------------ Electronics - Military Systems (0.13%) 4,500 General Motors Corp. - Class H* 167,310 ------------ Electronics - Miscellaneous Components (0.77%) 32,800 RF Micro Devices, Inc.* 1,029,100 ------------ Electronics - Semiconductor Manufacturing (12.61%) 10,200 Analog Devices, Inc.* 842,137 25,400 Applied Micro Circuits Corp.* 5,259,387 1,600 Broadcom Corp. - Class A* 390,000 19,000 Conexant Systems, Inc.* 795,625 7,000 Cypress Semiconductor Corp.* 290,937 7,000 Intel Corp. 290,937 38,000 LSI Logic Corp.* 1,111,500 48,600 Plexus Corp.* 3,426,300 3,400 PMC-Sierra, Inc.* 731,850 5,000 Silicon Image, Inc.* 124,062 39,640 Texas Instruments, Inc. 1,870,512 16,800 Triquint Semiconductor, Inc. 612,150 13,000 Xilinx, Inc.* 1,113,125 ------------ 16,858,522 ------------
9 Berger Funds 9 Berger Funds o September 30, 2000 Combined Annual Report - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS
September 30, 2000 ------------------ Shares Value - ------ ------------------ Common Stock (95.16%) - continued Financial Services - Miscellaneous (1.79%) 30,000 CheckFree Corp.* $ 1,256,718 29,150 First Data Corp. 1,138,671 ------------ 2,395,389 ------------ Internet - E*Commerce (0.49%) 7,500 PurchasePro.com, Inc.* 659,062 ------------ Internet - ISP/Content (1.01%) 4,060 Commerce One, Inc.* 318,710 3,400 Ibasis, Inc.* 53,975 1,000 Navisite, Inc.* 26,937 10,460 Yahoo!, Inc.* 951,860 ------------ 1,351,482 ------------ Internet - Network Security/Solutions (9.04%) 5,000 724 Solutions, Inc.* 237,500 2,400 Alteon Websystems, Inc.* 260,137 45,500 Baltimore Technologies PLC - ADR* 898,625 20,000 Breakaway Solutions, Inc.* 178,125 650 CacheFlow, Inc.* 92,950 47,500 Cisco Systems, Inc.* 2,624,375 14,000 Exodus Communications, Inc.* 691,250 14,600 Juniper Networks, Inc.* 3,196,487 15,000 Network Associates, Inc.* 339,375 8,400 RSA Security, Inc.* 362,250 11,000 Sapient Corp.* 447,562 13,600 VeriSign, Inc.* 2,754,850 ------------ 12,083,486 ------------ Internet - Software (9.02%) 5,200 Ariba, Inc.* 744,981 95,260 BEA Systems, Inc.* 7,418,372 30,300 Bluestone Software, Inc.* 526,462 4,155 BroadVision, Inc.* 106,212 11,000 Interwoven, Inc.* 1,243,687 14,000 Kana Communications, Inc.* 311,500 5,000 PC-Tel, Inc.* 116,250 6,650 Portal Software, Inc.* 266,000 4,700 SilverStream Software, Inc.* 141,587 11,733 Vignette Corp.* 350,523 7,270 Webmethods, Inc.* 836,958 ------------ 12,062,532 ------------ Media - Cable TV (0.24%) 17,600 AT&T Corp. - Liberty Media Group - Class A* 316,800 ------------ Telecommunications - Cellular (0.75%) 21,460 Nextel Communications, Inc. - Class A* 1,003,255 ------------
September 30, 2000 ------------------ Shares/Par Value Value - ---------------- ------------------ Common Stock (95.16%) - continued Telecommunications - Equipment (12.84%) 57,428 ADC Telecommunications, Inc.* $ 1,544,274 520 Avanex Corp.* 55,997 39,560 Ciena Corp.* 4,858,462 4,600 Comverse Technology, Inc.* 496,800 8,200 Copper Mountain Networks, Inc.* 307,500 8,100 Corvis Corp.* 494,479 8,800 JDS Uniphase Corp.* 833,250 31,100 Lucent Technologies, Inc. 950,493 46,411 Motorola, Inc. 1,311,110 310 Next Level Communications, Inc. - Class A* 20,498 40,560 Nokia Corp. - Spon. ADR 1,614,795 8,880 Nortel Networks Corp. 528,915 3,800 Redback Networks, Inc.* 622,962 11,200 Stratos Lightwave,Inc.* 361,200 9,871 Sycamore Networks, Inc.* 1,066,068 5,600 Turnstone Systems, Inc.* 259,700 27,920 Virata Corp.* 1,846,210 ------------ 17,172,713 ------------ Telecommunications - Services (1.86%) 5,000 Illuminet Holdings, Inc.* 138,750 44,000 Intermedia Communications, Inc.* 1,298,000 10,548 Qwest Communications International, Inc.* 506,962 10,300 Sonera Corp. - Spon. ADR 260,075 18,000 Winstar Communications, Inc.* 279,000 ------------ 2,482,787 ------------ Total Common Stock (Cost $81,001,749) 127,264,019 ------------ Repurchase Agreement (4.65%) $6,216,000 State Street Repurchase Agreement, 6.32% dated September 29, 2000, to be repurchased at $6,219,274 on October 2, 2000, collateralized by FNMA Agency Note, 5.96% - October 18, 2000 with a value of $6,345,067 6,216,000 ------------ Total Repurchase Agreement (Cost $6,216,000) 6,216,000 ------------ Total Investments (Cost $87,217,749) (99.81%) 133,480,019 Total Other Assets, Less Liabilities (0.19%) 258,850 ------------ Net Assets (100.00%) $133,738,869 ------------
* Non-income producing security. ADR - American Depositary Receipt. FNMA - Federal National Mortgage Association. PLC - Public Limited Company. See notes to financial statements. 10 10 Berger Funds o September 30, 2000 Combined Annual Report Ticker Symbol - Investor Shares BENGX - Institutional Shares N/A Fund Number - Investor Shares 344 Berger New - Institutional Shares 914 Generation Fund PORTFOLIO MANAGER COMMENTARY MARK S. SUNDERHUSE - -------------------------------------------------------------------------------- Performance The Berger New Generation Fund ("the Fund") had a very good fiscal year ended September 30, 2000, gaining 67.16% (Investor Shares) and 65.68% (Institutional Shares) compared with 13.27% for the Standard & Poor's (S&P) 500 Index(1) and 23.39% for the Russell 2000 Index.(2) This solid performance was primarily driven by stock selection, although our relatively aggressive weightings in technology, healthcare and energy also helped. Period in Review We remain focused on selecting those companies that have a fit in this ever-changing world of business. When evaluating securities we first look for growth, both in terms of revenues and earnings. Second, we look for companies that have a defensible business plan. Finally, we seek signs of assurance that a company's competitive position is strong and that its product or service can add meaningful value to the end customer. In technology, the Fund benefited from holdings in companies that supply infrastructure for the Internet build-out. Component suppliers Applied Micro Circuits, SDL Inc. and JDS Uniphase, and equipment supplier, Juniper Networks, all did very well. We remain bullish on many of the component and equipment companies that are supplying innovative, market-leading solutions to service providers, which are, in turn, aggressively deploying those solutions to meet an insatiable demand for increased bandwidth. Companies supplying leading-edge software solutions that take advantage of the Internet to deliver competitive advantages to their customers also contributed to the Fund's good results. Among the better performers were i2 Technologies and Ariba. These companies are in business-to-business software that helps users expand their margins through better inventory control and purchasing. i2 and Ariba are generalists that help a variety of businesses. Surveys of information technology managers at major companies confirm that e-commerce spending, which has been strong all year, should continue to grow rapidly for the foreseeable future. We remain, therefore, optimistic about the outlook for select vendors of e-commerce solutions. We continue to favor business-to-business e-commerce companies, staying clear of the business-to-consumer companies that were hurt most of the year. The Fund's energy stocks, particularly in the oil field services area, were good performers, including Enron, Grey Wolf, Anadarko Petroleum and Newfield Exploration. Compared with our index, we continue to overweight this sector because of the strong supply/demand fundamentals and the growth in "new economy-type" utility companies. We continue to believe that capital spending will be strong next year, especially with fiber-optics companies. Communications service providers must continue to spend if they wish to remain competitive. And the competitive pressure has increased as the stock market has become more selective, favoring those services companies that have proven growth prospects, such as Qwest Communications International and Level 3 Communications. In healthcare, our notable winners included leading-edge biotechnology companies that have emerged, or are about to emerge, from the development phase with successful new products that we believe will generate significant sales and shareholder value. Strong performers over the year include Genentech, Immunex and Invitrogen. Overall, we continue to remain positive on the outlook for this sector. Generally, the consumer sector was disappointing. In particular, the Fund's radio broadcasting stocks were down as advertising revenues slowed over the latter half of the fiscal year. Because of this, we sold Clear Channel Communications. Stocks in the telecommunications industry were also down, including Caprock, Teligent and Nextlink. The latter two companies were recently sold. In addition, significant prior gains were given up in holdings such as Next Level and Foundry Networks toward the end of the fiscal year. Summary Again, the Fund's good results were driven more by individual stock selection than by the weighting given to various sectors. Because we employ a fundamentally research-driven, bottom-up approach to portfolio management, the Fund's results are consistent with our aggressive growth-oriented investment philosophy. Every day presents us with new opportunities among small, mid- and large-cap emerging growth stocks. Rarely have there been so many companies addressing such open-ended business opportunities as there are today. So, whether or not small-cap stocks outperform large caps, we look forward each day to the prospect of identifying and investing in those that are on their way to becoming widely recognized, established growth stocks in the future. Past performance is no guarantee of future results. (1) 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. (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. 11 Berger Funds 11 Berger Funds o September 30, 2000 Combined Annual Report PERFORMANCE OVERVIEW - -------------------------------------------------------------------------------- Berger New Generation Fund - Investor Shares(*) Comparison of Change in Value of Berger New Generation Fund; Investor Shares vs. S&P 500 Index AVERAGE ANNUAL TOTAL RETURNS AS OF SEPTEMBER 30, 2000 One Year 67.16% Three Year 44.72% Life of Fund (3/29/96) 41.02% Berger New Generation Fund - Investor Shares $47,122 S&P 500 Index $23,919 [GRAPH] Berger New Generation Fund - Institutional Shares(*) Comparison of Change in Value of Berger New Generation Fund; Institutional Shares vs. S&P 500 Index AVERAGE ANNUAL TOTAL RETURNS AS OF SEPTEMBER 30, 2000 One Year 65.68% Three Year 44.33% Life of Fund (3/29/96) 40.76% Berger New Generation Fund - Institutional Shares $1,168,486 S&P 500 Index $597,962 [GRAPH] * Past performance is no guarantee of future results. Fund performance shown reflects the unusually favorable market conditions that existed in 1999 which likely are not sustainable as market conditions change. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. IPO's have made a significant contribution to the Fund's recent performance. There can be no assurance that such contribution will continue. 12 12 Berger Funds o September 30, 2000 Combined Annual Report Berger New Generation Fund - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS
September 30, 2000 ------------------ Shares Value - ------ ------------------ Common Stock (98.20%) Agricultural Operations (0.11%) 29,880 Eden Bioscience Corp.* $ 986,040 ------------ Banks - West/Southwest (1.10%) 163,000 Silicon Valley Bancshares* 9,492,203 ------------ Computer - Local Networks (2.42%) 26,840 Brocade Communication Systems, Inc.* 6,334,240 183,770 Foundry Networks, Inc.* 12,301,104 149,580 Tricord Systems, Inc.* 2,234,351 ------------ 20,869,695 ------------ Computer - Manufacturers (1.73%) 24,930 Avici Systems, Inc.* 2,371,466 107,610 Sun Microsystems, Inc.* 12,563,467 ------------ 14,934,933 ------------ Computer - Memory Devices (1.79%) 104,370 EMC Corp.* 10,345,676 49,870 StorageNetworks, Inc.* 5,096,090 ------------ 15,441,766 ------------ Computer - Services (0.96%) 255,260 Internap Network Services* 8,248,088 ------------ Computer Software - Enterprise (4.49%) 51,610 i2 Technologies, Inc.* 9,654,295 539,490 Intertrust Technologies Corp.* 6,507,598 212,770 SeaChange International, Inc.* 7,101,198 78,880 SpeechWorks International,Inc.* 4,890,560 73,900 VERITAS Software Corp.* 10,493,800 ------------ 38,647,451 ------------ Computer Software - Finance (0.38%) 86,820 Bottomline Technologies, Inc.* 3,239,471 ------------ Computer Software - Medical (0.47%) 209,130 Genomica Corp.* 4,065,487 ------------ Computer Software - Security (0.70%) 79,800 Internet Security Systems, Inc.* 5,994,975 ------------ Electronics - Military Systems (1.04%) 240,530 General Motors Corp. - Class H* 8,942,905 ------------ Electronics - Miscellaneous Components (1.40%) 149,040 CoorsTek, Inc. 5,700,780 203,810 RF Micro Devices, Inc.* 6,394,538 ------------ 12,095,318 ------------
September 30, 2000 ------------------ Shares Value - ------ ------------------ Common Stock (98.20%) - continued Electronics - Miscellaneous Products (2.33%) 88,840 American Superconductor Corp.* $ 4,367,041 129,264 Gemstar - TV Guide International, Inc.* 11,270,205 102,000 Symyx Technologies* 4,424,250 ------------ 20,061,496 ------------ Electronics - Scientific Instruments (2.71%) 77,850 Newport Corp.* 12,398,828 93,760 PE Corp. - PE Biosystems Group 10,923,040 ------------ 23,321,868 ------------ Electronics - Semiconductor Manufacturing (6.51%) 80,000 Applied Micro Circuits Corp.* 16,565,000 38,170 Broadcom Corp. - Class A* 9,303,937 218,200 Galileo Technology Ltd.* 6,927,850 261,500 Vitesse Semiconductor Corp.* 23,257,156 ------------ 56,053,943 ------------ Energy - Other (0.08%) 23,050 Proton Energy Systems, Inc.* 659,806 ------------ Finance - Investment Brokers (1.19%) 285,820 Knight Trading Group, Inc.* 10,289,520 ------------ Financial Services - Miscellaneous (1.15%) 236,140 Checkfree Corp.* 9,892,052 ------------ Internet - E*Commerce (1.20%) 739,190 NextCard, Inc.* 6,722,009 210,980 Ticketmaster Online - CitySearch, Inc. - Class B* 3,573,473 ------------ 10,295,482 ------------ Internet - ISP/Content (4.76%) 140,960 Akamai Technologies, Inc.* 7,402,602 603,010 Evoke Communications, Inc.* 3,957,253 288,120 InfoSpace, Inc.* 8,715,630 144,350 KPNQwest NV - NY Reg.* 4,186,150 190,290 RealNetworks, Inc.* 7,564,027 767,620 VIA NET.WORKS, Inc.* 7,388,342 19,920 Yahoo!, Inc.* 1,812,720 ------------ 41,026,724 ------------ Internet - Network Security/Solutions (5.17%) 65,560 Cacheflow, Inc.* 9,375,080 31,380 Inktomi Corp.* 3,577,320 81,040 Juniper Networks, Inc.* 17,742,695 124,620 Tvia, Inc.* 2,235,371 57,190 VeriSign, Inc.* 11,584,582 ------------ 44,515,048 ------------
13 Berger Funds 13 Berger Funds o September 30, 2000 Combined Annual Report - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS
September 30, 2000 ------------------ Shares Value - ------ ------------------ Common Stock (98.20%) - continued Internet - Software (10.29%) 112,250 Agile Software Corp.* $ 10,095,484 41,680 Ariba,Inc.* 5,971,311 59,760 AvantGo, Inc.* 1,195,200 84,620 Click Commerce, Inc.* 3,617,505 181,076 Cosine Communications, Inc.* 10,061,035 152,670 Docent, Inc.* 2,795,769 59,450 FreeMarkets, Inc.* 3,396,081 332,770 Liberate Technologies, Inc.* 9,629,531 361,760 Net2Phone, Inc.* 8,139,600 118,580 Phone.com, Inc.* 13,473,652 119,890 Quest Software, Inc.* 7,446,292 427,090 Vignette Corp.* 12,759,313 ------------ 88,580,773 ------------ Media - Cable TV (3.38%) 473,848 AT&T Corp. - Liberty Media Group - Class A* 8,529,264 117,430 Comcast Corp. - Class A* 4,777,933 38,200 Comcast Corp. - Special Class A* 1,563,812 208,640 EchoStar Communications Corp. - Class A* 11,005,760 300,000 Liberty Satellite & Technology, Inc. - Class A* 3,187,500 ------------ 29,064,269 ------------ Media - Radio/TV (1.12%) 200,200 Pegasus Communications Corp. - Class A* 9,672,162 ------------ Medical - Biomedical/Genetics (7.60%) 124,050 Cephalon, Inc.* 6,016,425 490,930 Curis,Inc.* 9,787,916 373,730 Diversa Corp.* 10,090,710 50,300 Genentech, Inc.* 9,340,081 118,040 Illumina,Inc.* 5,356,065 187,170 Immunex Corp. 8,141,895 234,580 Invitrogen Corp.* 16,684,502 ------------ 65,417,594 ------------ Medical - Ethical Drugs (1.03%) 178,360 Pharmacyclics, Inc.* 8,851,115 ------------ Medical - Instruments (2.61%) 161,490 Aclara BioSciences, Inc.* 4,905,258 208,640 Discovery Partners International, Inc.* 4,238,000 524,700 Ventana Medical Systems, Inc.* 13,314,262 ------------ 22,457,520 ------------ Medical - Products (1.60%) 269,460 Argonaut Technologies, Inc.* 5,001,851 117,150 Caliper Technologies Corp. 6,787,378 37,250 Caliper Technologies Corp.*@o 2,011,416 ------------ 13,800,645 ------------
September 30, 2000 ------------------ Shares Value - ------ ------------------ Common Stock (98.20%) - continued Medical - Wholesale Drugs/Sundries (1.12%) 680,060 Allscripts, Inc.* $ 9,605,847 ------------ Metal - Processing & Fabrication (0.84%) 267,210 Maverick Tube Corp.* 7,197,969 ------------ Oil & Gas - Drilling (4.67%) 285,260 Global Marine, Inc.* 8,807,402 2,063,030 Grey Wolf, Inc.* 11,862,422 327,230 Marine Drilling Co., Inc.* 9,346,506 175,500 Precision Drilling Corp.* 6,252,187 141,380 R&B Falcon Corp.* 3,940,967 ------------ 40,209,484 ------------ Oil & Gas - Production/Pipeline (0.85%) 83,680 Enron Corp. 7,332,460 ------------ Oil & Gas - U.S. Exploration & Production (1.58%) 99,690 Anadarko Petroleum Corp. 6,625,397 149,430 Newfield Exploration Co.* 6,976,513 ------------ 13,601,910 ------------ Retail - Consumer Electronics (0.26%) 62,220 Tweeter Home Entertainment Group, Inc.* 2,259,363 ------------ Telecommunications - Cellular (0.53%) 224,400 OmniSky Corp.* 4,558,125 ------------ Telecommunications - Equipment (16.16%) 127,780 Celeritek, Inc.* 4,815,708 119,480 Ciena Corp.* 14,673,637 107,230 Corvis Corp.* 6,546,056 382,640 DMC Stratex Networks, Inc.* 6,146,155 68,550 JDS Uniphase Corp.* 6,490,828 102,010 New Focus, Inc.* 8,065,165 149,200 Next Level Communications, Inc. - Class A* 9,865,850 86,760 Oni Systems Corp.* 7,488,472 130,120 Redback Networks, Inc.* 21,331,547 32,910 SDL, Inc.* 10,136,280 139,032 Sycamore Networks, Inc.* 15,015,456 100,000 Terayon Communications Systems, Inc.* 3,393,750 112,160 Turnstone Systems, Inc.* 5,201,420 139,790 Tycom Ltd.* 5,364,441 123,790 Virata Corp.* 8,185,613 398,800 Western Multiplex Corp. - Class A* 6,405,725 ------------ 139,126,103 ------------
14 14 Berger Funds o September 30, 2000 Combined Annual Report Berger New Generation Fund - ------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS
September 30, 2000 ------------------ Shares/Par Value Value - ---------------- ------------------ Common Stock (98.20%) - continued Telecommunications - Services (2.87%) 1,787,290 Caprock Communications Corp.*# $ 9,104,008 59,340 Level 3 Communications, Inc.* 4,576,597 120,130 P.T. Pasifik Satelit Nusantara - ADR* 1,396,511 200,530 Qwest Communications International, Inc.* 9,637,972 ------------ 24,715,088 ------------ Total Common Stock (Cost $711,328,151) 845,524,698 ------------ Corporate Debt - Convertible (0.95%) Computer - Services (0.95%) $4,984,000 Cyras Systems, Inc. - 144A 4.50%, 8/15/2005 6,005,720 2,000,000 Kestrel Solutions - 144A 5.50%, 7/15/2005 2,170,000 ------------ 8,175,720 ------------ Total Corporate Debt - Convertible (Cost $7,577,640) 8,175,720 ------------ Preferred Stock - Convertible (1.07%) Internet - ISP/Content (0.69%) 396,417 netLibrary, Inc. - Series C*@o 6,001,753 ------------ Telecommunications - Equipment (0.38%) 371,550 Cidera, Inc.*@o 3,250,876 ------------ Total Preferred Stock - Convertible (Cost $8,250,881) 9,252,629 ------------
September 30, 2000 ------------------ Shares/Par Value Value - ---------------- ------------------ Repurchase Agreement (0.57%) $4,943,000 State Street Repurchase Agreement, 6.32% dated September 29, 2000, to be repurchased at $4,945,603 on October 2, 2000, collateralized by FNMA Agency Note, 6.40% - September 27, 2001 with a value of $5,042,006 $ 4,943,000 ------------ Total Repurchase Agreement (Cost $4,943,000) 4,943,000 ------------ Total Investments (Cost $732,099,672) (100.79%) 867,896,047 Total Other Assets, Less Liabilities (-0.79%) (6,845,112) ------------ Net Assets (100.00%) $861,050,935 ------------
o Schedule of Restricted Securities and/or Illiquid Securities
Fair Value Date Fair as a % Acquired Cost Value of Net Assets -------- ---- ----- ------------- netLibrary, Inc. - Preferred Stock 10/12/1999 $5,000,005 $6,001,753 0.69% Caliper Technologies Corp. - Common Stock 8/23/2000 $1,788,000 $2,011,416 0.23% Cidera , Inc. - Preferred Stock 9/1/2000 $3,250,876 $3,250,876 0.38%
* Non-income producing security. ADR - American Depositary Receipt. FNMA - Federal National Mortgage Association. 144A - Resale is restricted to qualified institutional buyers. @ - Security valued at fair value determined in good faith pursuant to procedures established by and under the supervision of the Fund's trustees. # 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, 2000:
Change in Market Value Purchases Sales Unrealized Market Value Dividend Realized 9/30/1999 at Cost at Cost Appr./(Depr.) 9/30/2000 Income Gain/(Loss) ------------ ----------- ----------- ------------- ------------ --------- ----------- Caprock Communications Corp. $ 3,094,575 $20,039,671 $(4,684,428) $(9,345,810) $9,104,008 -- $4,598,439
See notes to financial statements. 15 Berger Funds 15 Berger Funds o September 30, 2000 Combined Annual Report Ticker Symbol BESLX Fund Number 214 PORTFOLIO MANAGER COMMENTARY JAY W. TRACEY III Berger STEVEN L. FOSSEL Select Fund MARK S. SUNDERHUSE - -------------------------------------------------------------------------------- Performance The Berger Select Fund (the "Fund") had a very good fiscal year ended September 30, 2000, gaining 55.73% compared with 13.27% for the Standard & Poor's (S&P) 500 Index(1) and 43.22% for the S&P MidCap 400 Index.(2) This solid performance was driven primarily by stock selection, although our relatively aggressive weighting in the technology sector also helped. Period in Review In technology, the Fund benefited from investments in companies that supply infrastructure for the Internet build-out. Equipment vendors Juniper Networks, Sycamore Networks, Cisco Systems and Redback Networks did very well serving the rapidly-growing market for high-speed data networking. We remain bullish on many of these companies because they are among the leading suppliers of innovative solutions to service providers, which are, in turn, aggressively deploying those solutions to meet an insatiable demand for increased bandwidth. Companies supplying leading-edge software solutions that take advantage of the Internet to deliver competitive advantages to their customers also contributed to the Fund's good results. Among the Fund's better performers were VeriSign, which provides digital certificate services that secure e-commerce and communications over the Internet, and Agile Software, whose collaborative products help automate commerce between manufacturers and their suppliers and customers. Surveys of information technology managers at major companies confirm that e-commerce spending, which has been strong all year, should continue to grow rapidly for the foreseeable future. We remain, therefore, optimistic about the outlook for select vendors of e-commerce solutions. Technology is an exciting, but risky, area in which to invest because the pace of change is so fast, the market is so competitive and the stocks are so volatile. We will continue to focus on innovative companies with strong, forward-looking management teams, leading products or services, defensible barriers to competition and rapidly growing, sustainable revenues and earnings. In healthcare, Genentech, a leading biotechnology company with seven products on the market and more in development, was a significant contributor to Fund performance this year. In financial services, Schwab did well, but Nextcard was a disappointment. Our investment in the utility Constellation Energy also aided Fund performance. The Fund's energy holdings did well over the year, particularly ENSCO International and Nabors Industries, two oil services companies. Despite strong stock performance over the past year, we remain positive on the outlook for this sector because the earnings outlook is only getting brighter. Generally, performance in the consumer groups was disappointing. Compared with our index, we have been underweighted in the sector. The Fund's radio broadcasting stocks were down as advertising revenues slowed over the latter half of the fiscal year. Because this trend is likely to persist for another quarter or two, we eliminated our positions in Spanish Broadcasting and Clear Channel Communications. Summary Again, the Fund's good results were driven more by individual stock selection than by the weighting given to various sectors. Because we employ a fundamentally research-driven, bottom-up approach to portfolio management, the Fund's results are consistent with our aggressive growth-oriented investment philosophy. Every day presents us with new opportunities among rapidly growing companies. Rarely have there been so many companies addressing such open-ended business opportunities as there are today. Regardless of the stock market's short-term ups and downs, we are excited about the fundamental outlook for the great growth companies that are leading us into the future. Because ours is a concentrated Fund, our mandate and our continuing focus are to identify and invest in the best of these companies. Past performance is no guarantee of future results. (1) 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. (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. 16 16 Berger Funds o September 30, 2000 Combined Annual Report PERFORMANCE OVERVIEW - -------------------------------------------------------------------------------- Berger Select Fund Comparison of Change in Value of Berger Select Fund vs. S&P 500 Index AVERAGE ANNUAL TOTAL RETURNS AS OF SEPTEMBER 30, 2000 One Year 55.73% Life of Fund (12/31/97) 51.96% Berger Select Fund $31,608 S&P 500 Index $15,346 [GRAPH] Past performance is no guarantee of future results. Fund performance shown reflects the unusually favorable market conditions that existed in 1999 which likely are not sustainable as market conditions change. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS
September 30, 2000 ------------------ Shares Value - ------ ------------------ Common Stock (85.36%) Diversified Operations (4.24%) 100,000 Tyco International Ltd. $ 5,187,500 ------------ Electronics - Miscellaneous Products (1.26%) 17,670 Gemstar - TV Guide International, Inc.* 1,540,603 ------------ Electronics - Semiconductor Manufacturing (1.94%) 11,480 Applied Micro Circuits Corp.* 2,377,077 ------------ Internet - E*Commerce (2.88%) 387,000 NextCard, Inc.* 3,519,281 ------------ Internet - ISP/Content (6.29%) 254,160 InfoSpace, Inc.* 7,688,340 ------------ Internet - Network Security/Solutions (12.06%) 30,400 Juniper Networks, Inc.* 6,655,700 40,000 VeriSign, Inc.* 8,102,500 ------------ 14,758,200 ------------
September 30, 2000 ------------------ Shares Value - ------ ------------------ Common Stock (85.36%) - continued Internet - Software (8.62%) 110,000 Agile Software Corp.* $ 9,893,125 11,677 Cosine Communications, Inc.* 648,803 ------------ 10,541,928 ------------ Media - Cable TV (3.68%) 250,000 AT&T Corp. - Liberty Media Group - Class A* 4,500,000 ------------ Medical - Biomedical/Genetics (10.09%) 66,500 Genentech, Inc.* 12,348,220 ------------ Oil & Gas - Drilling (8.62%) 123,700 ENSCO International, Inc. 4,731,525 111,000 Nabors Industries, Inc.* 5,816,400 ------------ 10,547,925 ------------ Telecommunications - Equipment (15.41%) 36,800 Redback Networks, Inc.* 6,032,900 118,636 Sycamore Networks, Inc. 12,812,688 ------------ 18,845,588 ------------
17 Berger Funds 17 Berger Funds o September 30, 2000 Combined Annual Report Berger Select Fund - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS
September 30, 2000 ------------------ Shares/Par Value Value - ---------------- ------------------ Common Stock (85.36%) - continued Telecommunications - Services (3.93%) 100,000 Qwest Communications International, Inc.* $ 4,806,250 ------------ Utility - Electric Power (6.34%) 150,000 Constellation Energy Group, Inc. 7,462,500 9,400 Southern Energy, Inc.* 294,925 ------------ 7,757,425 ------------ Total Common Stock (Cost $74,027,248) 104,418,337 ------------ U.S. Government Agency Obligations (8.83%) $10,800,000 FHLMA Discount Note - 6.20%, 10/02/2000 10,798,140 ------------ Total U.S. Government Agency Obligations (Cost $10,798,140) 10,798,140 ------------ Repurchase Agreement (4.49%) $5,498,000 State Street Repurchase Agreement, 6.32% dated September 29, 2000, to be repurchased at $5,500,896 on October 2, 2000, collateralized by FNMA Agency Note, 6.50% - August 15, 2004 with a value of $5,612,925 5,498,000 ------------ Total Repurchase Agreement (Cost $5,498,000) 5,498,000 ------------ Total Investments (Cost $90,323,388) (98.68%) 120,714,477 Total Other Assets, Less Liabilities (1.32%) 1,616,768 ------------ Net Assets (100.00%) $122,331,245 ------------
* Non-income producing security. FNMA - Federal National Mortgage Association. FHLMA - Federal Home Loan Mortgage Association. See notes to financial statements. 18 18 Berger Funds o September 30, 2000 Combined Annual Report Ticker Symbol - Investor Shares BESCX - Institutional Shares N/A Fund Number - Investor Shares 345 Berger Small Company - Institutional Shares 915 Growth Fund PORTFOLIO MANAGER COMMENTARY JAY W. TRACEY III - -------------------------------------------------------------------------------- Performance The Berger Small Company Growth Fund ("the Fund") had a very good fiscal year ended September 30, 2000, gaining 84.27% (Investor Shares) and 85.25% (Institutional Shares) compared with 23.39% and 29.66% for the Russell 2000 Index(1) and Russell 2000 Growth Index(2) respectively. This solid performance was driven by stock selection, primarily, although our relatively aggressive weightings in technology, healthcare and energy also helped. Period in Review In technology, the Fund benefited from holdings in companies that supply infrastructure for the Internet build-out. Applied Micro Circuits, which makes integrated circuits, Redback Networks, which makes high-speed access systems, and Newport Corp., which makes components and systems for fiber-optic communications, were some of the Fund's stocks that did well. We remain bullish on many of the component and equipment companies that are supplying innovative, market-leading solutions to service providers, which are, in turn, aggressively deploying those solutions to meet an insatiable demand for increased bandwidth. Companies supplying leading-edge software solutions that take advantage of the Internet to deliver competitive advantages to their customers also contributed to the Fund's good results. Among the better performers were Agile Software, whose collaborative software products help automate commerce between manufacturers and their suppliers and customers; Mercury Interactive, whose software products automate Internet and other business application testing; and Ariba, whose e-commerce software products automate the management of business operating resources. Surveys of Information Technology managers at major companies confirm that e-commerce spending, which has been strong all year, should continue to grow rapidly for the foreseeable future. We remain, therefore, optimistic about the outlook for select vendors of e-commerce solutions. Elsewhere in technology, semiconductor equipment stocks, strong early in the year, weakened considerably in the last few months as the market became concerned about the durability of the semiconductor manufacturing cycle. Also, in software, companies whose products focus on customer relationship management were weak toward the end of the fiscal year because of concerns that this area had become too competitive. Two holdings in this area, ONYX Software and Primus Knowledge Solutions, were disappointing. Technology is an exciting but risky area in which to invest because the pace of change is so fast, the market is so competitive and the stocks are so volatile. We will continue to focus on innovative technology companies with strong, forward-looking management teams, leading products or services, defensible barriers to competition and rapidly growing, sustainable revenues and earnings. In healthcare, our notable winners included IDEC Pharmaceuticals, which has a good cancer product on the market and an exciting pipeline of new compounds in development; Cephalon, whose success in treating neurological disorders with its lead compound, Provigil, led to significant stock appreciation this past year; and Invitrogen, who sells research tool kits to the biotech and pharmaceutical industries. Most of the Fund's healthcare holdings produced gains, except for Visible Genetics, which was down because of a delay in the commercial launch of its TRUGENE HIV-1 Genotyping Kit. Overall, we remain positive on the outlook for this sector. Our emphasis has been on biotechnology, in which a number of companies have emerged, or are about to emerge, from the development phase with successful new products that we believe will generate significant sales and shareholder value. The Fund's energy stocks, particularly in the oil field services area, were good performers, including Pride International, National-Oilwell and Patterson Energy. Basin Exploration was disappointing and was sold. Despite the gains generated in this sector, we have elected to maintain our overweighting because the earnings outlook is only getting brighter. Generally, the consumer services area was disappointing. In particular, the Fund's radio broadcasting stocks were down as advertising revenues slowed over the latter half of the fiscal year. Because this trend is likely to persist for another quarter or two, we reduced our exposure, but are holding on to higher-quality companies such as Cox Radio and Hispanic Broadcasting, which now offer good value. Positions were initiated in two restaurant companies: California Pizza Kitchen and P.F. Chang's China Bistro. The restaurant industry as a whole has shown modest improvement, but our interest in these companies was driven by their own merits. Summary Again, the Fund's good results were driven more by individual stock selection than by the weighting given to various sectors. Because we employ a fundamentally research-driven, bottom-up approach to portfolio management, the Fund's results are consistent with our aggressive growth-oriented investment philosophy. Every day presents us with new opportunities among small, emerging growth stocks. Rarely have there been so many companies addressing such open-ended business opportunities as there are today. So, whether or not small-cap stocks outperform large caps, we look forward each day to the prospect of identifying and investing in those that are on their way to becoming the widely recognized, established growth stocks of the future. Past performance is no guarantee of future results. (1) 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. (2) 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. 19 Berger Funds 19 Berger Funds o September 30, 2000 Combined Annual Report PERFORMANCE OVERVIEW - -------------------------------------------------------------------------------- Berger Small Company Growth Fund - Investor Shares(*) Comparison of Change in Value of Berger Small Company Growth Fund; Investor Shares vs. Russell 2000 Index AVERAGE ANNUAL TOTAL RETURNS AS OF SEPTEMBER 30, 2000 One Year 84.27% Five Year 28.40% Life of Fund (12/30/93) 27.10% Berger Small Company Growth Fund - Investor Shares $50,456 Russell 2000 Index $22,130 [GRAPH] - -------------------------------------------------------------------------------- Berger Small Company Growth Fund - Institutional Shares(*) Comparison of Change in Value of Berger Small Company Growth Fund; Institutional Shares vs. Russell 2000 Index AVERAGE ANNUAL TOTAL RETURNS AS OF SEPTEMBER 30, 2000 One Year 85.25% Five Year 28.54% Life of Fund (12/30/93) 27.20% Berger Small Company Growth Fund - Institutional Shares $1,268,107 Russell 2000 Index $553,238 [GRAPH] * Past performance is no guarantee of future results. Fund performance shown reflects the unusually favorable market conditions that existed in 1999 which likely are not sustainable as market conditions change. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. 20 20 Berger Funds o September 30, 2000 Combined Annual Report Berger Small Company Growth Fund - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS
September 30, 2000 ------------------ Shares Value - ------ ------------------ Common Stock (91.00%) Banks - West/Southwest (1.27%) 322,690 Silicon Valley Bancshares* $ 18,791,650 ------------ Building - Heavy Construction (1.19%) 420,490 Dycom Industries, Inc.* 17,502,896 ------------ Commercial Services - Miscellaneous (7.63%) 1,289,010 Corporate Executive Board Co.* 51,882,652 290,930 Diamond Technology Partners, Inc. - Class A* 21,601,552 612,620 Forrester Research, Inc.*# 39,054,525 ------------ 112,538,729 ------------ Commercial Services - Schools (1.12%) 440,430 DeVry, Inc.* 16,568,545 ------------ Computer - Local Networks (1.38%) 455,430 Proxim, Inc.* 20,266,635 ------------ Computer Software - Desktop (1.34%) 243,720 Macromedia, Inc.* 19,695,622 ------------ Computer Software - Educational/Entertainment (1.05%) 327,130 Smartforce PLC - Spon. ADR* 15,497,783 ------------ Computer Software - Enterprise (4.12%) 233,000 Mercury Interactive Corp.* 36,522,750 1,174,320 ONYX Software Corp.*# 24,220,350 ------------ 60,743,100 ------------ Electronics - Laser System/Component (3.06%) 596,100 Cymer, Inc.* 18,292,818 563,210 Lightpath Technologies, Inc. - Class A*# 26,752,475 ------------ 45,045,293 ------------ Electronics - Scientific Instruments (2.07%) 191,910 Newport Corp.* 30,564,666 ------------ Electronics - Semiconductor Equipment (4.45%) 295,800 AXT, Inc.* 12,368,137 502,920 DuPont Photomasks, Inc.* 29,546,550 222,700 Veeco Instruments, Inc.* 23,665,354 ------------ 65,580,041 ------------ Electronics - Semiconductor Manufacturing (3.16%) 152,000 Applied Micro Circuits Corp.* 31,473,500 561,430 PLX Technology, Inc.* 15,088,431 ------------ 46,561,931 ------------ Electronic Products - Miscellaneous (3.69%) 477,630 American Superconductor Corp.* 23,478,499 1,275,730 Universal Electronics, Inc.* # 30,856,719 ------------ 54,335,218 ------------
September 30, 2000 ------------------ Shares Value - ------ ------------------ Common Stock (91.00%) - continued Financial Services - Miscellaneous (2.74%) 357,370 Investors Financial Services Corp. $ 22,558,981 215,620 Metris Companies, Inc. 8,516,990 289,010 Prepaid Legal Services, Inc.* 9,338,635 ------------ 40,414,606 ------------ Internet - E*Commerce (0.35%) 462,270 Ebenx, Inc.* 5,229,455 ------------ Internet - Network Security/Solutions (0.66%) 239,250 Sapient Corp.* 9,734,484 ------------ Internet - Software (5.45%) 326,230 Agile Software Corp.* 29,340,310 174,350 Ariba, Inc.* 24,978,361 271,320 Primus Knowledge Solutions, Inc.* 4,018,927 1,001,300 ScreamingMedia, Inc.* 9,387,187 410,760 Support.com, Inc.* 12,579,525 ------------ 80,304,310 ------------ Media - Radio/TV (3.13%) 1,299,090 Cox Radio, Inc. - Class A* 22,652,881 280,500 Hispanic Broadcasting Corp.* 7,818,937 395,480 SBS Broadcasting SA* 15,745,047 ------------ 46,216,865 ------------ Medical - Biomedical/Genetics (12.85%) 628,260 BioCryst Pharmaceuticals, Inc.* 13,075,661 766,530 Cephalon, Inc.* 37,176,705 860,540 Curis, Inc.* 17,157,016 450,820 Diversa Corp.* 12,172,140 419,750 Genencor International,Inc.* 12,435,093 82,700 IDEC Pharmaceuticals Corp.* 14,502,220 147,460 Illumina, Inc.* 6,690,997 580,620 Invitrogen Corp.* 41,296,597 95,200 Medimmune, Inc.* 7,354,200 568,880 Regeneron Pharmaceuticals, Inc.* 18,559,710 224,620 Visible Genetics,Inc.* 9,069,032 ------------ 189,489,371 ------------ Medical - Ethical Drugs (1.33%) 394,850 Pharmacyclics, Inc.* 19,594,431 ------------ Medical - Instruments (4.03%) 274,690 Aclara BioSciences, Inc.* 8,343,708 668,130 American Medical Systems Holdings,Inc.* 10,439,531 774,510 IDEXX Laboratories, Inc.* 20,718,142 785,320 Ventana Medical Systems, Inc.*# 19,927,495 ------------ 59,428,876 ------------
21 Berger Funds 21 Berger Funds o September 30, 2000 Combined Annual Report - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS
September 30, 2000 ------------------ Shares Value - ------ ------------------ Common Stock (91.00%) - continued Medical - Products (0.71%) 150,000 Caliper Technologies Corp.*@o $ 8,099,662 154,690 Durect Corp.* 2,320,350 ------------ 10,420,012 ------------ Medical/Dental/Services (0.90%) 271,860 Accredo Health, Inc.*# 13,287,157 ------------ Medical - Wholesale Drugs/Sundries (2.50%) 793,780 Allscripts, Inc.* 11,212,142 337,000 Priority Healthcare Corp. - Class B* 25,696,250 ------------ 36,908,392 ------------ Metal - Processing & Fabrication (1.15%) 630,520 Maverick Tube Corp.* 16,984,632 ------------ Oil & Gas - Drilling (5.50%) 833,300 Marine Drilling Co., Inc.* 23,801,131 433,150 Patterson Energy, Inc.* 14,889,531 444,930 Precision Drilling Corp.* 15,850,631 1,002,640 Pride International, Inc.* 26,569,960 ------------ 81,111,253 ------------ Oil & Gas - Field Services (1.68%) 853,980 Veritas DGC, Inc.* 24,712,046 ------------ Oil & Gas - Machinery & Equipment (0.80%) 377,730 National-Oilwell, Inc.* 11,804,062 ------------ Retail - Consumer Electronics (1.04%) 421,360 Tweeter Home Entertainment Group, Inc.* 15,300,635 ------------ Retail - Miscellaneous/Diversified (0.92%) 340,000 Michaels Stores, Inc.* 13,600,000 ------------ Retail - Restaurants (1.20%) 357,190 California Pizza Kitchen, Inc.* 10,001,320 221,750 P.F. Chang's China Bistro, Inc.* 7,664,234 ------------ 17,665,554 ------------ Retail - Super/Mini-Markets (1.26%) 347,010 Whole Foods Market, Inc.* 18,630,099 ------------ Telecommunications - Cellular (0.76%) 549,530 OmniSky Corp.* 11,162,328 ------------ Telecommunications - Equipment (5.13%) 448,200 DMC Stratex Networks, Inc.* 7,199,212 396,300 Powerwave Technologies, Inc.* 15,047,015 49,200 Redback Networks, Inc.* 8,065,725 267,400 Tollgrade Communications, Inc.* 37,118,462 643,110 Triton Network Systems, Inc.* 8,138,812 ------------ 75,569,226 ------------
September 30, 2000 ------------------ Shares Par Value Value - ---------------- ------------------ Common Stock (91.00%) - continued Telecommunications - Services (0.21%) 370,620 Advanced Radio Telecom Corp.* $ 3,150,270 -------------- Transportation - Services (1.17%) 337,410 SkyWest,Inc. 17,292,262 -------------- Total Common Stock (Cost $947,334,723) 1,341,702,435 -------------- Preferred Stock - Convertible (0.49%) Computer - Peripheral Equipment (0.11%) 665,000 Candescent Technologies Corp. - Series E*@o 1,662,500 -------------- Telecommunications - Equipment (0.38%) 644,462 Cidera, Inc.*@o 5,638,720 -------------- Total Preferred Stock - Convertible (Cost $9,296,220) 7,301,220 -------------- U.S. Government Agency Obligations (3.39%) $25,000,000 FNMA Discount Note - 6.43%, 10/10/2000 24,959,812 25,000,000 FNMA Discount Note - 6.435%, 10/12/2000 24,950,843 -------------- Total U.S. Government Agency Obligations (Cost $49,910,655) 49,910,655 -------------- Repurchase Agreement (3.91%) $57,637,000 State Street Repurchase Agreement, 6.32% dated September 29, 2000, to be repurchased at $57,667,355 on October 2, 2000, collateralized by FNMA Agency Note, 6.40% - September 27, 2001 with a value of $48,962,370 and FNMA Agency Note, 6.40% - December 14, 2001 with a value of $9,832,578 57,637,000 -------------- Total Repurchase Agreement (Cost $57,637,000) 57,637,000 -------------- Total Investments (Cost $1,064,178,598) (98.79%) 1,456,551,310 Total Other Assets, Less Liabilities (1.21%) 17,875,514 -------------- Net Assets (100.00%) $1,474,426,824 --------------
* Non-income producing security. ADR - American Depositary Receipt. PLC - Public Limited Company. FNMA - Federal National Mortgage Association. @ - Security valued at fair value determined in good faith pursuant to procedures established by and under the supervision of the Fund's trustees. 22 22 Berger Funds o September 30, 2000 Combined Annual Report Berger Small Company Growth Fund - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS # 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, 2000:
Change in Market Value Purchases Sales Unrealized Market Value Dividend Realized 9/30/1999 at Cost at Cost Appr./(Depr.) 9/30/2000 Income Gain/(Loss) ------------ ----------- ----------- ------------- ------------ --------- ----------- Accredo Health, Inc. $8,690,850 $ 3,861,838 $(6,429,490) $7,163,959 $13,287,157 -- $5,657,664 Forrester Research, Inc. -- 31,410,372 (1,799,592) 9,443,745 39,054,525 -- (470,657) LightPath Technologies,Inc. - Class A -- 21,014,624 -- 5,737,851 26,752,475 -- -- Onyx Software Corp. -- 33,987,915 -- (9,767,565) 24,220,350 -- -- Paradigm Geophysical Ltd. 3,389,546 -- (4,104,100) 714,554 -- -- (787,461) PathoGenesis Corp. -- 23,225,657 (23,225,657) -- -- -- 11,345,950 The Right Start, Inc. -- 6,485,403 (6,485,403) -- -- -- (5,884,984) Universal Electronics, Inc. 10,262,875 8,459,042 -- 12,134,802 30,856,719 -- -- Ventana Medical Systems,Inc. 6,533,100 12,345,599 -- 1,048,796 19,927,495 -- --
o Schedule of Restricted Securities and/or Illiquid Securities
Fair Value Date Fair as a % Acquired Cost Value of Net Assets -------- ---- ----- ------------- Candescent Technologies Corp. - Preferred Stock 5/1/1996 $3,657,500 $1,662,500 0.11% Caliper Technologies Corp. - Common Stock 8/23/2000 $7,200,000 $8,099,662 0.55% Cidera, Inc. - Preferred Stock 9/1/2000 $5,638,720 $5,638,720 0.38%
See notes to financial statements. 23 Berger Fund 23 Berger Funds o September 30, 2000 Combined Annual Report Ticker Symbol - Investor Shares BSCVX - Institutional Shares BSVIX Fund Number - Investor Shares 120 - Institutional Shares 403 Berger Small Cap PORTFOLIO MANAGER COMMENTARY ROBERT H. PERKINS Value Fund THOMAS M. PERKINS - -------------------------------------------------------------------------------- Performance The Berger Small Cap Value Fund (the "Fund") had a total return of 20.77% (Investor Shares) and 21.09% (Institutional Shares) for the year ended September 30, 2000, compared with 23.39% for the Russell 2000 Index(1) and 15.36% for the Russell 2000 Value Index.(2) After six straight years of underperformance, the Russell 2000 Index outgained large-cap indexes this fiscal year. And, while the Russell 2000 Growth Index3 outperformed its value counterpart by more than 14%, all of the outperformance occurred between September and December 1999. Since January 2000, value has outpaced growth by 17%. We believe this marks a turning point that will lead to strong relative performance of value versus growth for the foreseeable future. Period in Review Our best-performing sector this year was energy. As crude and natural gas prices continued to reach levels not seen since the Gulf War, stock prices climbed to new highs. Consistent with our philosophy of buying these stocks when commodity prices are at new lows and selling when they reach new highs, we were net sellers of energy stocks this year. We eliminated Evergreen Resources and Barrett Resources but continue to like Key Energy, Noble Affiliates and Mitchell Energy. We continued to pare back our Real Estate Investment Trust (REIT) holdings. As spreads between REIT yields and 10-year Treasuries continue to narrow, we believe many stocks in the group are now fairly valued, and we have reduced our exposure accordingly. We remain focused, however, on those names that trade at a discount to net asset value and their peer group, such as Home Properties of New York and Highwoods Properties. Other industries that performed well included homebuilders, banks and insurance. As the Federal Reserve Board increased interest rates in the first half of the year, investors shunned industries most directly impacted by higher rates, namely homebuilders and financial institutions. We used this weakness to build positions in homebuilding companies. As investors gained confidence that rate hikes were nearing an end, money began to flow into these beaten down industries. Homebuilders more than doubled off their lows, and financial stocks rallied more than 30% off their lows. We then decreased our exposure, eliminating Lennar and reducing Pulte, and used the proceeds to initiate a position in Fleetwood Enterprises, which had a more attractive valuation. Healthcare stocks contributed positively in the second half of the year. Legislative relief for skilled nursing facilities benefited holdings such as Manor Care and Omnicare, both of which more than doubled off their lows. Generally, stocks in the consumer industries were disappointing. Specifically, our holdings in retailers AnnTaylor Stores, Ross and La-Z-boy struggled through most of the year. While we feel each of these companies' problems are short-term in nature and will eventually reverse course, we believe that near-term caution is warranted and selectivity is of the utmost importance. We took advantage of market conditions and purchased new positions in companies such as Briggs & Stratton, Tecumseh Products, Manitowoc and A.O. Smith. All of these companies were 30--60% off their 52-week highs yet had strong balance sheets and excellent earnings recovery probability. One group that proved challenging was fallen growth stocks, particularly those in the technology sector. After being our best-performing group first quarter, technology stocks had a negative effect on Fund performance for the year. We attribute this to a noticeable slowdown in information technology spending by major corporations as they struggled to digest Web-enabling projects. We believe spending will pick up as these companies seek to integrate Web applications with existing systems, thereby benefiting IT staffing companies. Despite the negative returns during this period, we continue to add to our holdings in companies such as Computer Horizons, Spherion and Kronos, which should benefit from the next wave of spending. Summary We are encouraged by the recent resurgence in small-cap stocks and value investing. We remain optimistic that the renewed emphasis on valuation marks the beginning of a longer-term trend toward the value style. While small caps as a group have been closing the valuation gap with their large-cap peers, we continue to believe that risk/reward characteristics still favor small caps. This is evidenced by the growing rate of merger and acquisition activity in the small-cap arena. In the past year, 10% of the Fund's holdings were taken over by larger corporate entities or taken private at significant premiums. We believe heightened merger and acquisition activity highlights how inexpensive these stocks have become and that one way or another value will be realized. Past performance is no guarantee of future results. (1) 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. (2) The Russell 2000 Value Index is an unmanaged index, with dividends reinvested, which consists of common value stocks included in the Russell 2000 Index. Companies in this index tend to exhibit lower price-to-book and price-earnings ratios. It is a generally recognized indicator used to measure overall small company value stock performance in the U.S. stock market. 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-to-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. 24 24 Berger Funds o September 30, 2000 Combined Annual Report PERFORMANCE OVERVIEW - -------------------------------------------------------------------------------- Berger Small Cap Value Fund - Investor Shares* Comparison of Change in Value of Berger Small Cap Value Fund; Investor Shares vs. Russell 2000 Index AVERAGE ANNUAL TOTAL RETURNS AS OF SEPTEMBER 30, 2000 One Year 20.77% Five Year 18.24% Ten Year 17.96% Berger Small Cap Value Fund - Investor Shares $52,167 Russell 2000 Index $47,797 [GRAPH] - -------------------------------------------------------------------------------- Berger Small Cap Value Fund - Institutional Shares* Comparison of Change in Value of Berger Small Cap Value Fund; Institutional Shares vs. Russell 2000 Index AVERAGE ANNUAL TOTAL RETURNS AS OF SEPTEMBER 30, 2000 One Year 21.09% Five Year 18.54% Ten Year 18.11% Berger Small Cap Value Fund - Institutional Shares $1,320,603 Russell 2000 Index $1,194,932 [GRAPH] * Past performance is no guarantee of future results. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. 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. This would have reduced the Investor Shares' return. 25 Berger Funds 25 Berger Funds o September 30, 2000 Combined Annual Report Berger Small Cap Value Fund - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS
September 30, 2000 ------------------ Shares Value - ------ ------------------ Common Stock (90.21%) Auto/Truck - Original Equipment (1.28%) 525,000 Tecumseh Products Co. - Class A $ 21,984,375 -------------- Banks - Midwest (3.26%) 1,275,000 Associated Banc-Corp. 33,468,750 400,000 Citizens Banking Corp. 9,200,000 770,000 Community First Bankshares, Inc. 13,523,125 -------------- 56,191,875 -------------- Banks - Northeast (4.09%) 1,600,000 Banknorth Group, Inc. 28,600,000 1,000,000 F.N.B. Corp.# 21,375,000 1,850,000 Seacoast Financial Services Corp.# 20,350,000 -------------- 70,325,000 -------------- Building - Mobile/Manufactured/RV (0.65%) 1,000,000 Champion Enterprises, Inc.* 4,250,000 509,530 Fleetwood Enterprises, Inc. 6,910,500 -------------- 11,160,500 -------------- Building - Paint & Allied Products (1.24%) 2,350,000 RPM, Inc. 21,296,875 -------------- Building - Residential/Commercial (2.20%) 1,150,000 Pulte Corp. 37,950,000 -------------- Building Products - Wood (2.99%) 1,430,000 Rayonier, Inc.# 51,390,625 -------------- Chemicals - Plastics (1.41%) 2,200,000 Schulman (A.), Inc.# 24,200,000 -------------- Commercial Services - Staffing (2.64%) 2,592,460 kforce.com, Inc.*# 9,073,610 3,050,000 Spherion Corp.* 36,409,375 -------------- 45,482,985 -------------- Computer - Graphics (1.23%) 1,886,230 Pinnacle Systems, Inc.* 21,220,087 -------------- Computer - Integrated Systems (0.19%) 108,940 Kronos, Inc.* 3,268,200 -------------- Computer - Memory Devices (0.63%) 712,180 Advanced Digital Information Corp.* 10,816,233 -------------- Computer - Services (1.32%) 885,000 Complete Business Solutions, Inc.* 11,947,500 1,575,000 Computer Horizons Corp.*# 10,729,695 -------------- 22,677,195 --------------
September 30, 2000 ------------------ Shares Value - ------ ------------------ Common Stock (90.21%) - continued Computer Software - Enterprise (4.10%) 2,400,000 AVT Corp.*# $ 13,350,000 1,500,000 JDA Software Group, Inc.*# 19,125,000 1,353,360 Progress Software Corp.* 18,439,530 1,200,000 Structural Dynamics Research Corp.* 19,650,000 -------------- 70,564,530 -------------- Computer Software - Finance (0.90%) 950,000 Transaction Systems Architects, Inc. - Class A* 15,437,500 -------------- Cosmetics/Personal Care (1.27%) 3,200,000 Perrigo Co.* 21,900,000 -------------- Diversified Operations (4.45%) 2,400,000 Federal Signal Corp.# 47,700,000 1,500,000 The Manitowoc Co., Inc.# 28,875,000 -------------- 76,575,000 -------------- Electrical - Control Instruments (1.10%) 1,900,000 Watts Industries, Inc. - Class A# 19,000,000 -------------- Electrical - Equipment (0.14%) 189,920 A.O. Smith Corp. 2,385,870 -------------- Finance - Equity REIT (10.34%) 840,000 Gables Residential Trust 22,837,500 650,000 Highwoods Properties, Inc. 15,356,250 1,200,000 Home Properties of New York, Inc.# 35,850,000 1,000,000 IRT Property Co. 8,750,000 1,131,320 JDN Realty Corp. 12,798,057 300,000 Parkway Properties, Inc. 9,150,000 1,500,000 Plum Creek Timber Co., Inc. 33,468,750 880,000 Prentiss Properties Trust 22,990,000 700,000 Summit Properties, Inc. 16,843,750 -------------- 178,044,307 -------------- Finance - Public Investment Funds/Foreign (0.75%) 1,365,000 MSDW Asia Pacific Fund 12,882,187 -------------- Finance - Savings & Loans (2.06%) 1,175,960 Republic Security Financial Corp. 5,806,302 336,500 Warren Bancorp, Inc. 2,692,000 1,000,000 Webster Financial Corp. 26,937,500 -------------- 35,435,802 -------------- Household/Office Furniture (1.44%) 1,700,000 La-Z-Boy, Inc. 24,756,250 --------------
26 26 Berger Funds o September 30, 2000 Combined Annual Report Berger Small Cap Value Fund - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS
September 30, 2000 ------------------ Shares Value - ------ ------------------ Common Stock (90.21%) - continued Insurance - Property/Casualty/Title (6.18%) 1,600,000 Horace Mann Educators, Inc. $ 26,200,000 1,685,470 IPC Holdings Ltd.# 31,181,195 2,035,000 Old Republic International Corp. 48,967,187 ------------ 106,348,382 ------------ Machinery - General Industrial (2.20%) 1,000,000 Briggs & Stratton Corp. 37,812,500 ------------ Medical/Dental/Services (2.25%) 2,400,000 Omnicare, Inc. 38,700,000 ------------ Medical - Nursing Homes (2.84%) 3,125,000 Manor Care, Inc.* 49,023,437 ------------ Medical/Dental - Supplies (1.47%) 2,104,600 Steris Corp.* 25,255,200 ------------ Metal - Processing & Fabrication (1.28%) 958,030 Kaydon Corp. 22,034,690 ------------ Office - Equipment & Automation (1.57%) 1,098,560 HON Industries, Inc. 27,052,040 ------------ Oil & Gas - Field Services (2.64%) 4,628,800 Key Energy Services, Inc.*# 45,420,100 ------------ Oil & Gas - U.S. Exploration & Production (5.90%) 1,200,000 Chieftain International, Inc.*# 24,825,000 851,540 Mitchell Energy & Development Corp. - Class A 39,703,052 1,000,000 Noble Affiliates, Inc. 37,125,000 ------------ 101,653,052 ------------ Paper & Paper Products (0.41%) 582,890 Longview Fibre Co. 6,994,680 ------------ Retail - Apparel/Shoe (3.45%) 800,000 AnnTaylor Stores Corp.* 30,750,000 2,000,000 Ross Stores, Inc. 28,750,000 ------------ 59,500,000 ------------ Retail - Mail Order & Direct (0.44%) 359,100 Lands' End, Inc.* 7,541,100 ------------ Retail - Miscellaneous/Diversified (1.05%) 1,338,690 Pier 1 Imports, Inc. 18,155,984 ------------ Retail - Super/Mini-Markets (0.91%) 1,200,000 Casey's General Stores, Inc. 15,600,000 ------------
September 30, 2000 ------------------ Shares/Par Value Value - ---------------- ------------------ Common Stock (90.21%) - continued Shoes & Related Apparel (1.79%) 3,300,000 Wolverine World Wide, Inc.# $ 30,731,250 -------------- Transportation - Equipment Manufacturing (1.59%) 429,710 Trinity Industries, Inc. 10,044,471 1,900,000 Wabash National Corp.# 17,337,500 -------------- 27,381,971 -------------- Transportation - Rail (1.26%) 2,500,000 Kansas City Southern Industries,Inc.* 21,718,750 -------------- Transportation - Truck (3.30%) 2,000,000 CNF Transportation,Inc. 44,500,000 792,000 Knight Transportation, Inc.*# 12,325,500 -------------- 56,825,500 -------------- Total Common Stock (Cost $1,437,663,769) 1,552,694,032 -------------- U.S. Government Agency Obligations (5.92%) $33,041,000 FHLMA Discount Note - 6.20%, 10/2/2000 33,035,309 25,000,000 FNMA Discount Note - 6.43%, 10/10/2000 24,959,812 25,000,000 FNMA Discount Note - 6.435%, 10/12/2000 24,950,843 18,959,000 SLMA Discount Note - 6.28%, 10/2/2000 18,955,692 -------------- Total U.S. Government Agency Obligations (Cost $101,901,656) 101,901,656 -------------- Repurchase Agreement (4.53%) $78,058,000 State Street Repurchase Agreement, 6.32% dated September 29, 2000, to be repurchased at $78,099,110 on October 2, 2000, collateralized by FHLB Agency Note, 5.75% - April 15, 2008 with a value of $31,042,388 and FNMA Agency Note, 6.35% - February 1, 2001 with a value of $48,581,400 78,058,000 -------------- Total Repurchase Agreement (Cost $78,058,000) 78,058,000 -------------- Total Investments (Cost $1,617,623,425) (100.66%) 1,732,653,688 Total Other Assets, Less Liabilities (-0.66%) (11,305,357) -------------- Net Assets (100.00%) $1,721,348,331 --------------
* Non-income producing security. FHLB - Federal Home Loan Bank. FHLMA - Federal Home Loan Mortgage Association. FNMA - Federal National Mortgage Association. REIT - Real Estate Investment Trust. SLMA - Student Loan Marketing Association. 27 Berger Funds 27 Berger Funds o September 30, 2000 Combined Annual Report - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS # 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, 2000.
Change in Market Value Purchases Sales Unrealized Market Value Dividend Realized 9/30/1999 at Cost at Cost Appr./(Depr.) 9/30/2000 Income Gain/(Loss) ------------ ---------- ----------- ------------- ------------ ----------- ----------- AVT Corp. -- $22,975,187 -- $(9,625,187) $13,350,000 -- -- Chieftain International,Inc $10,735,000 12,349,769 -- 1,740,231 24,825,000 -- -- Circor International, Inc.(1) -- 8,352,971(2) $(8,352,971) -- -- $ 53,179 $ (591,292) Computer Horizons Corp. -- 7,178,524 (5,032,662) 8,583,833 10,729,695 -- 2,743,436 F.N.B. Corp. 8,972,500 13,597,821 -- (1,195,321) 21,375,000 532,800 -- Federal Signal Corp. 14,474,962 33,289,404 (6,411,051) 6,346,685 47,700,000 1,758,500 149,460 Home Properties of New York, Inc. 16,012,500 17,294,328 -- 2,543,172 35,850,000 1,566,150 -- IPC Holdings Ltd. 18,562,500 10,278,646 -- 2,340,049 31,181,195 158,400 -- JDA Software Group, Inc. 6,179,181 19,663,997 (6,861,081) 142,903 19,125,000 -- 4,844,814 Key Energy Services, Inc. 17,775,000 25,167,761 (8,363,454) 10,840,793 45,420,100 -- 10,475,560 kforce.com, Inc.(3) 9,523,442 11,755,486 (811,135) (11,394,183) 9,073,610 -- 67,636 Knight Transportation, Inc. -- 10,341,638 -- 1,983,862 12,325,500 -- -- Landry's Seafood Restaurants, Inc. 5,280,800 7,428,915 (14,252,847) 1,543,132 -- 77,000 (3,074,459) The Manitowoc Co., Inc. -- 32,745,625 -- (3,870,625) 28,875,000 7,018 -- Rayonier,Inc -- 57,694,646 -- (6,304,021) 51,390,625 1,137,600 -- Schulman (A.),Inc 21,121,250 13,383,554 -- (10,304,804) 24,200,000 -- -- Seacoast Financial Services Corp. 7,000,000 11,617,921 -- 1,732,079 20,350,000 345,866 -- Sola International, Inc. 18,600,000 746,056 (18,781,957) (564,099) -- -- (11,797,099) Splash Technology Holdings, Inc. 4,287,500 -- (6,575,744) 2,288,244 -- -- (24,751) Stewart & Stevenson Services, Inc. 8,859,375 11,528,615 (17,439,657) (2,948,333) -- 431,375 9,974,457 Wabash National Corp. -- 23,880,251 (964,013) 17,337,500 68,000 (3,736) Watts Industries, Inc. - Class A 17,617,500 12,740,483 (3,425,667)(2) (7,932,316) 19,000,000 299,362 -- Wolverine World Wide, Inc. 23,432,500 13,890,825 -- (6,592,075) 30,731,250 344,874 --
(1) Spun off from Watts Industries,Inc., effective 10/19/99. (2) Amount includes allocation of cost resulting from the spin-off of Circor International, Inc. from Watts Industries, Inc. (3) Name change from Romac International, Inc. to kforce.com, Inc., effective 5/16/00. See notes to financial statements. 28 28 Berger Funds o September 30, 2000 Combined Annual Report Ticker Symbol BEMGX Berger Mid Cap Fund Number 215 Growth Fund PORTFOLIO MANAGER COMMENTARY JAY W. TRACEY III - -------------------------------------------------------------------------------- Performance The Berger Mid Cap Growth Fund ("the Fund") had a very good fiscal year ended September 30, 2000, gaining 95.98% compared with 43.22% for the Standard & Poor's (S&P) MidCap 400 Index(1). This solid performance was driven almost entirely by stock selection, although our relative overweighting in certain technology, healthcare and energy groups, as well as our underweighting in some consumer groups, also helped. Period in Review In technology, the Fund benefited from holdings in companies that supply infrastructure for the Internet build-out. Component suppliers Applied Micro Circuits, SDL Inc., PMC-Sierra and JDS Uniphase, and equipment suppliers Juniper Networks, Sycamore Networks and Redback Networks, all did very well serving the rapidly-growing market for high-speed data networking. We remain bullish on many of the component and equipment companies that are supplying innovative, market-leading solutions to service providers, which are, in turn, aggressively deploying those solutions to meet an insatiable demand for increased bandwidth. Companies supplying leading-edge software solutions that take advantage of the Internet to deliver competitive advantages to their customers also contributed to the Fund's good results. Among the better performers were Verisign, which provides digital certificate services that secure e-commerce and communications over the Internet; Software.com, which provides messaging software applications for Internet service providers (ISPs); and Ariba, whose e-commerce software products automate the management of business operating resources. Surveys of information technology managers at major companies confirm that e-commerce spending, which has been strong all year, should continue to grow rapidly for the foreseeable future. We remain, therefore, optimistic about the outlook for select vendors of e-commerce solutions and view corrections as buying opportunities. Elsewhere in technology, semiconductor equipment stocks, strong early in the year, weakened considerably in the last few months as the market became concerned about the durability of the semiconductor manufacturing cycle. Holdings such as KLA-Tencor were weak, but were sold in a relatively timely fashion. Internet Security Systems, a somewhat recent addition to our portfolio, was down, caught in the September correction. Technology is an exciting, but risky, area in which to invest because the pace of change is so fast, the market is so competitive and the stocks are so volatile. We will continue to focus on innovative technology companies with strong, forward-looking management teams, leading products or services, defensible barriers to competition and rapidly growing, sustainable revenues and earnings. In healthcare, our notable winners included IDEC Pharmaceuticals, which has a good cancer product on the market and an exciting pipeline of new compounds in development; Medimmune, a biotechnology company with six products on the market and many more in development; Genentech, another biotech company with seven products on the market; and PE Corp.-PE Biosystems Group, which markets biochemical instrument systems and associated consumable products to the life sciences industry. There were relatively few disappointments in the sector, but two on the downside were Gene Logic (sold during the quarter) and Antigenics. Overall, we remain positive on the outlook for this sector. Our emphasis has been on biotechnology, in which a number of companies have emerged, or are about to emerge, from the development phase with successful new products that we believe will generate significant sales and shareholder value. The Fund's energy holdings did very well. ENSCO International, Weatherford International, Noble Drilling and BJ Services, which are benefiting from favorable supply/demand dynamics in their businesses, were among the Fund's winners. Despite the gains that have been generated in this sector, we are continuing our overweighting because the earnings outlook is only getting brighter. Generally, our holdings in the consumer services area were disappointing. In particular, the Fund's radio broadcasting stocks were down as advertising revenues slowed over the latter half of the fiscal year. Because this trend is likely to persist for another quarter or two, we reduced our exposure but are holding on to higher-quality companies such as Cox Radio and Hispanic Broadcasting, which now offer good value. There were some bright spots, however. EchoStar Communications, a direct broadcast satellite television service, contributed to performance, as did DeVry Inc., a provider of career-oriented technology-based education programs. Summary Again, the Fund's good results were driven more by individual stock selection than by the weighting given to various sectors. Because we employ a fundamentally research-driven, bottom-up approach to portfolio management, the Fund's results are consistent with our aggressive growth-oriented investment philosophy. Every day presents us with new opportunities among medium-size emerging growth stocks. Rarely have there been so many companies addressing such open-ended business opportunities as there are today. So, whether or not mid-cap stocks continue to outperform as they have over the past year, we look forward each day to the prospect of identifying and investing in those that are on their way to becoming the widely recognized, large, established growth stocks of the future. Past performance is no guarantee of future results. (1) The S&P Mid Cap 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. 29 Berger Funds 29 Berger Funds o September 30, 2000 Combined Annual Report PERFORMANCE OVERVIEW - -------------------------------------------------------------------------------- Berger Mid Cap Growth Fund Comparison of Change in Value of Berger Mid Cap Growth Fund vs. S&P Mid Cap 400 Index AVERAGE ANNUAL TOTAL RETURNS AS OF SEPTEMBER 30, 2000 One Year 95.98% Life of Fund (8/12/98) 70.58% Berger Mid Cap Value Fund $43,430 S&P Mid Cap 400 Index $16,683 [GRAPH] Past performance is no guarantee of future results. Fund performance shown reflects the unusually favorable market conditions that existed in 1999 which likely are not sustainable as market conditions change. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. IPO's have made a significant contribution to the Fund's recent performance. There can be no assurance that such contribution will continue. - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS
September 30, 2000 ------------------ Shares Value - ------ ------------------ Common Stock (93.94%) Banks - West/Southwest (1.26%) 26,530 Silicon Valley Bancshares* $ 1,544,957 -------------- Commercial Services - Advertising (0.52%) 7,910 TMP Worldwide, Inc.* 636,755 -------------- Commercial Services - Miscellaneous (1.09%) 26,940 Young & Rubicam, Inc. 1,333,530 -------------- Commercial Services - Schools (1.49%) 48,470 DeVry, Inc.* 1,823,683 -------------- Computer - Services (1.52%) 57,890 Internap Network Services Corp.* 1,870,570 -------------- Computer Software - Desktop (1.31%) 19,870 Macromedia,Inc.* 1,605,744 -------------- Computer Software - Educational/Entertainment (1.74%) 45,050 Smartforce PLC - Spon. ADR* 2,134,243 --------------
September 30, 2000 ------------------ Shares Value - ------ ------------------ Common Stock (93.94%) - continued Computer Software - Enterprise (3.69%) 20,970 Intertrust Technologies Corp.* $ 252,950 20,300 Mercury Interactive Corp.* 3,182,025 10,000 Resonate, Inc.* 395,000 7,500 SignalSoft Corp.* 304,687 20,000 Talarian Corp.* 383,750 -------------- 4,518,412 -------------- Computer Software - Security (1.71%) 27,930 Internet Security Systems, Inc.* 2,098,241 -------------- Electronics - Laser Systems/Components (1.22%) 35,000 Bookman Technology PLC - Spon. ADR* 1,500,625 -------------- Electronics - Scientific Instruments (4.71%) 25,000 Newport Corp.* 3,981,640 15,370 PE Corp. - PE Biosystems Group 1,790,605 -------------- 5,772,245 --------------
30 30 Berger Funds o September 30, 2000 Combined Annual Report Berger Mid Cap Growth Fund - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS
September 30, 2000 ------------------ Shares Value - ------ ------------------ Common Stock (93.94%) - continued Electronics - Semiconductor Equipment (0.93%) 13,250 ASM Lithography Holding NV - NY Reg.* $ 428,140 34,080 Lam Research Corp.* 713,550 -------------- 1,141,690 -------------- Electronics - Semiconductor Manufacturing (4.24%) 7,820 Applied Micro Circuits Corp.* 1,619,228 15,000 Globalspan, Inc.* 1,830,000 12,500 Linear Technology Corp. 809,375 4,340 PMC-Sierra, Inc.* 934,185 -------------- 5,192,788 -------------- Energy - Other (0.48%) 20,400 Proton Energy Systems, Inc.* 583,950 -------------- Finance - Investment Brokers (0.88%) 30,000 Knight Trading Group, Inc.* 1,080,000 -------------- Financial Services - Miscellaneous (1.45%) 25,000 CheckFree Corp.* 1,047,265 18,510 Metris Companies, Inc. 731,145 -------------- 1,778,410 -------------- Internet - ISP/Content (1.88%) 9,990 Akamai Technologies,Inc. 524,631 70,190 Evoke Communications, Inc.* 460,621 33,350 RealNetworks, Inc.* 1,325,662 -------------- 2,310,914 -------------- Internet - Network Security/Solutions (3.87%) 10,000 Cacheflow, Inc.* 1,430,000 41,620 Sapient Corp.* 1,693,413 7,990 VeriSign, Inc.* 1,618,474 -------------- 4,741,887 -------------- Internet - Software (12.34%) 49,030 Agile Software Corp.* 4,409,635 9,770 Ariba, Inc.* 1,399,705 18,690 Blue Martini Software, Inc.* 633,123 25,542 Cosine Communications, Inc.* 1,419,177 21,700 Docent, Inc.* 397,381 92,740 Evolve Software, Inc.* 2,225,760 24,000 Quest Software, Inc.* 1,490,625 9,360 Software.com, Inc.* 1,698,255 48,440 Vignette Corp.* 1,447,145 -------------- 15,120,806 -------------- Media - Cable TV (2.02%) 24,190 Cox Communications, Inc.* - Class A 925,267 29,400 EchoStar Communications Corp. - Class A* 1,550,850 -------------- 2,476,117 --------------
September 30, 2000 ------------------ Shares Value - ------ ------------------ Common Stock (93.94%) - continued Media - Radio/TV (6.04%) 15,836 Clear Channel Communications, Inc.* $ 894,734 129,900 Cox Radio, Inc. - Class A* 2,265,131 64,890 Hispanic Broadcasting Corp.* 1,808,808 50,370 Pegasus Communications Corp.* 2,433,500 -------------- 7,402,173 -------------- Medical - Biomedical/Genetics (11.72%) 79,280 Antigenics, Inc.* 1,169,380 47,670 Cephalon, Inc.* 2,311,995 26,900 Genencor International, Inc.* 796,938 13,270 Genentech, Inc.* 2,464,073 7,150 IDEC Pharmaceuticals Corp.* 1,253,819 5,630 Illumina, Inc.* 255,461 45,720 Invitrogen Corp.* 3,251,835 19,230 Medarex, Inc.* 2,255,919 7,880 Medimmune, Inc.* 608,730 -------------- 14,368,150 -------------- Medical - Drugs/Diversified (1.67%) 60,000 Medicines Co.* 2,051,250 -------------- Medical - Instruments (2.55%) 32,770 Alcara BioSciences, Inc.* 995,388 83,810 Ventana Medical Systems, Inc.* 2,126,678 -------------- 3,122,066 -------------- Medical - Products (1.33%) 12,000 Caliper Technologies Corp.*@o 647,973 65,070 Durect Corp.* 976,050 -------------- 1,624,023 -------------- Medical - Wholesale Drugs/Sundries (0.88%) 76,170 Allscripts, Inc.* 1,075,901 -------------- Oil & Gas - Drilling (4.97%) 63,040 ENSCO International, Inc. 2,411,280 40,000 Nabors Industries, Inc.* 2,096,000 31,550 Noble Drilling Corp.* 1,585,387 -------------- 6,092,667 -------------- Oil & Gas - Field Services (2.10%) 17,830 BJ Services Co.* 1,089,858 51,420 Veritas DGC, Inc.* 1,487,966 -------------- 2,577,824 -------------- Oil & Gas - Machinery/Equipment (2.05%) 51,230 Grant Prideco, Inc.* 1,123,858 32,160 Weatherford International, Inc.* 1,382,880 -------------- 2,506,738 --------------
31 Berger Funds 31 Berger Funds o September 30, 2000 Combined Annual Report - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS
September 30, 2000 ------------------ Shares/Par Value Value - ---------------- ------------------ Common Stock (93.94%) - continued Retail - Discount & Variety (1.37%) 41,270 Dollar Tree Stores, Inc.* $ 1,674,014 -------------- Telecommunications - Equipment (9.41%) 22,480 Corvis Corp.* 1,372,333 20,000 New Focus, Inc.* 1,581,250 10,000 Oni Systems Corp.* 863,125 31,950 Powerwave Technologies, Inc.* 1,213,101 7,340 Redback Networks, Inc.* 1,203,301 3,950 SDL, Inc.* 1,216,600 8,586 Sycamore Networks, Inc.* 927,288 44,250 Triton Network Systems, Inc.* 580,781 12,140 Tycom Ltd.* 465,872 31,850 Virata Corp.* 2,106,081 -------------- 11,529,732 -------------- Telecommunications - Services (1.24%) 30,000 Floware Wireless Systems Ltd.* 747,187 54,130 McLeodUSA, Inc. - Class A* 774,735 -------------- 1,521,922 -------------- Utility - Electric Power (0.26%) 10,240 Southern Energy, Inc.* 321,280 -------------- Total Common Stock (Cost $94,387,870) 115,133,307 -------------- Preferred Stock - Convertible (0.38%) Telecommunications - Equipment (0.38%) 53,521 Cidera, Inc.*@o 468,281 -------------- Total Preferred Stock - Convertible (Cost $468,282) 468,281 -------------- U.S. Government Agency Obligations (1.14%) $1,400,000 FHLMA Discount Note - 6.20%, 10/2/2000 1,399,758 -------------- Total U.S. Government Agency Obligations (Cost $1,399,758) 1,399,758 --------------
September 30, 2000 ------------------ Par Value Value - --------- ------------------ Repurchase Agreement (4.58%) $5,610,000 State Street Repurchase Agreement, 6.32% dated September 29, 2000, to be repurchased at $5,612,955 on October 2, 2000, collateralized by FNMA Agency Note, 6.50% - August 15, 2004 with a value of $5,723,475 $ 5,610,000 -------------- Total Repurchase Agreement (Cost $5,610,000) 5,610,000 -------------- Total Investments (Cost $101,865,910) (100.04%) 122,611,346 Total Other Assets, Less Liabilities (-0.04%) (47,050) -------------- Net Assets (100.00%) $ 122,564,296 --------------
*Non-income producing security. ADR - American Depositary Receipt. PLC - Public Limited Company. FHLMA - Federal Home Loan Mortgage Association. FNMA - Federal National Mortgage Association. @ - Security valued at fair value determined in good faith pursuant to procedures established by and under the supervision of the Fund's trustees. o Schedule of Restricted Securities and/or Illiquid Securities
Fair Value Date Fair as a % Acquired Cost Value of Net Assets -------- ---- ----- ------------- Caliper Technologies Corp. - Common Stock 8/23/2000 $576,000 $647,973 0.53% Cidera, Inc. - Preferred Stock 9/1/2000 $468,282 $468,281 0.38%
See notes to financial statements. 32 32 Berger Funds o September 30, 2000 Combined Annual Report Ticker Symbol BEMVX Fund Number 216 Berger Mid Cap PORTFOLIO MANAGER COMMENTARY THOMAS M. PERKINS Value Fund ROBERT H. PERKINS - -------------------------------------------------------------------------------- Performance For the year ended September 30, 2000, the Berger Mid Cap Value Fund (the "Fund") gained 31.11%, compared with 43.22% for the Standard & Poor's (S&P) MidCap 400 Index(1) 25.46% for the S&P MidCap Value Index(2) and 13.27% for the S&P 500 Index(3). The Fund outpaced most of these indexes primarily because we purchased severely depressed technology and energy stocks in late 1998 and early 1999 and we subsequently had strong appreciation in those stocks. The Fund underperformed the S&P MidCap 400 Index because it has a larger weighting in growth stocks. After six years of underperformance, mid-cap and small-cap stocks outdistanced large caps during the past 12 months. Additionally, as the performance of high-momentum growth stocks is waning, investor interest is returning to value stocks. This observation is buttressed by the historically large valuation differential that exists between growth and value and between large- and small-cap stocks. The attractive valuations of smaller stocks have generated a record level of corporate acquisitions. During the year, about 8% of our portfolio had acquisitions announced. With the economy and earnings growth slowing, we believe the risk/reward prospects for our portfolio, which sells at less than 15 times 2000 estimated earnings and 2.2 times book value, are considerably better than those of the major market benchmarks. Period in Review Over the past six months, we increased our consumer cyclical weighting by adding new positions in Briggs & Stratton, Tecumseh Products and RPM and registering substantial appreciation in existing homebuilder stocks. Our new positions sell at less than 10 times 2000 estimated earnings and 2 times book value, are more than 40% off their 12-month high prices and have good balance sheets. Our largest sector weighting has always been financials, and our patience was well rewarded this year. Insurance stocks had been selling below book value, but, with an apparent upswing in industry pricing, our three insurance holdings appreciated more than 40% this year. REITs and brokerage stocks were also strong, and we used this strength to reduce our holdings. While technology stocks penalized Fund performance recently, they were positive over the last 12 months. We have been consistent sellers in this area all year as many stocks appreciated to what we believed were fully valued levels. Since the end of March, we eliminated Novellus, Tektronix, Convergys, Complete Business Solutions, Silicon Graphics and Loral. The first three were up more than 100% from when we purchased them; we had relatively small losses in the latter three companies due to fundamental shortfalls. As a result of these transactions, our technology exposure dropped to its lowest level since the Fund's inception. Toward the end of the year, with many technology stocks down more than 50% from their highs and selling at 10 times expected earnings, we began to reinvest in this area once again. Some of these purchases might be premature, as they were in 1998 and early 1999, but we believe the long-term risk/reward relationship is very favorable. Energy stocks continued to be strong. Because we believe the price of oil has risen at an unsustainable pace, we also believe risk levels in these stocks have risen. Therefore, we eliminated our positions in Devon, Nobel and Barrett. We used some of these sale proceeds to establish a position in USX Marathon Group, which sells at about 10 times earnings, is up less than 20% this year and has promising new management. Among the weakest stocks in the portfolio were the IT staffing companies, especially Spherion and Computer Horizons. Also down this period were some consumer stocks such as Federated Department Stores and Hasbro. Although these companies have had disappointing earnings as a group, they are selling at less than 10 times estimated 2001 earnings, have good balance sheets and have active stock buy back programs. Although they have been disappointing, we are maintaining positions in these stocks. Summary Since January, our Fund has had positive returns while major market averages have declined. We believe this could continue for some time as earnings growth subsides and historically high valuation differentials compress to more normal levels. The major risk to mid cap and smaller cap stocks is a greater-than-projected economic slowdown. However, even in that scenario, we are more comfortable with smaller value stocks than with much more expensive large cap growth equities. We believe mid cap value stocks will continue to benefit as investors redeploy cash flows away from large cap stocks. We will remain selective in our investing, taking advantage of opportunities created by temporary dislocations. With patience, these good quality stocks that are temporarily out of favor provide the possibility of long-term gain. Past performance is no guarantee of future results. (1) 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. (2) The S&P MidCap Value Index is an unmanaged index, with dividends reinvested, and is generally representative of the market for value stocks of 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. 33 Berger Funds 33 Berger Funds o September 30, 2000 Combined Annual Report PERFORMANCE OVERVIEW - -------------------------------------------------------------------------------- Berger Mid Cap Value Fund Comparison of Change in Value of Berger Mid Cap Value Fund vs. S&P Mid Cap 400 Index AVERAGE ANNUAL TOTAL RETURNS AS OF September 30, 2000 One Year 31.11% Life of Fund (8/12/98) 24.71% Berger Mid Cap Value Fund $16,040 S&P Mid Cap 400 Index $15,996 [GRAPH] Past performance is no guarantee of future results. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS
September 30, 2000 ------------------ Shares Value - ------ ------------------ Common Stock (95.69%) Aerospace/Defense (1.77%) 9,000 Litton Industries,Inc. $ 402,187 2,000 Northrop Grumman Corp. 181,750 -------------- 583,937 -------------- Auto/Truck - Original Equipment (1.14%) 9,000 Tecumseh Products Co. - Class A 376,875 -------------- Banks - Midwest (1.49%) 18,750 Associated Banc-Corp. 492,187 -------------- Banks - Northeast (1.46%) 9,000 Wilmington Trust Corp. 482,625 -------------- Banks - Southeast (2.21%) 17,000 Compass Bancshares, Inc. 331,500 20,000 National Commerce Bancorp. 398,750 -------------- 730,250 -------------- Banks - West/Southwest (0.47%) 4,000 City National Corp. 154,500 --------------
September 30, 2000 ------------------ Shares Value - ------ ------------------ Common Stock (95.69%) - continued Building - Cement/Concrete/Aggregates (0.76%) 3,500 Southdown, Inc. $ 249,375 -------------- Building - Construction Products/Miscellaneous (0.62%) 11,000 Masco Corp. 204,875 -------------- Building - Hand Tools (1.21%) 17,000 Snap-On, Inc. 400,562 -------------- Building - Paint & Allied Products (3.04%) 33,000 RPM, Inc. 299,062 33,000 Sherwin-Williams Co. 705,375 -------------- 1,004,437 -------------- Building - Residential/Commercial (3.74%) 22,000 Centex Corp. 706,750 16,000 Pulte Corp. 528,000 -------------- 1,234,750 -------------- Building Products - Wood (2.86%) 15,000 Georgia-Pacific Corp. (Timber Group) 403,125 15,000 Rayonier, Inc. 539,062 -------------- 942,187 --------------
34 34 Berger Funds o September 30, 2000 Combined Annual Report Berger Mid Cap Value Fund - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS
September 30, 2000 ------------------ Shares Value - ------ ------------------ Common Stock (95.69%) - continued Chemicals - Plastics (0.93%) 28,000 Schulman (A.), Inc. $ 308,000 -------------- Chemicals - Specialty (1.27%) 15,000 Hercules, Inc. 211,875 14,000 Millennium Chemicals, Inc. 207,375 -------------- 419,250 -------------- Commercial - Leasing Companies (1.27%) 22,000 Comdisco, Inc. 419,375 -------------- Commercial Services - Security/Safety (1.01%) 12,500 Diebold, Inc. 332,031 -------------- Commercial Services - Staffing (1.59%) 16,890 kforce.com, Inc.* 59,115 39,000 Spherion Corp.* 465,562 -------------- 524,677 -------------- Computer - Graphics (1.23%) 16,000 Autodesk, Inc. 406,000 -------------- Computer - Peripheral Equipment (1.15%) 19,000 Adaptec, Inc. 380,000 -------------- Computer - Services (2.08%) 40,000 Computer Horizons Corp.* 272,500 20,000 IMS Health, Inc. 415,000 -------------- 687,500 -------------- Computer Software - Enterprise (3.52%) 45,000 AVT Corp.* 250,312 15,000 Keane, Inc.* 261,000 25,000 Progress Software Corp.* 340,625 19,000 Structural Dynamics Research Corp.* 311,125 -------------- 1,163,062 -------------- Containers (0.32%) 10,000 Crown Cork & Seal Co., Inc. 106,875 -------------- Diversified Operations (0.84%) 14,000 Federal Signal Corp. 278,250 -------------- Electrical - Connectors (0.87%) 6,500 Methode Electronics, Inc. - Class A 288,031 -------------- Electronics - Semiconductor Equipment (1.17%) 11,000 Teradyne, Inc.* 385,000 --------------
September 30, 2000 ------------------ Shares Value - ------ ------------------ Common Stock (95.69%) - continued Finance - Equity REIT (7.28%) 19,000 Archstone Communities Trust $ 466,687 11,000 First Industrial Realty Trust, Inc. 338,250 18,000 Highwoods Properties, Inc. 425,250 18,500 Liberty Property Trust 508,750 14,000 Mack-Cali Realty Corp. 394,625 12,000 Plum Creek Timber Co., Inc. 267,750 -------------- 2,401,312 -------------- Finance - Investment Brokers (2.83%) 10,500 Legg Mason, Inc. 610,312 2,200 Lehman Brothers Holdings, Inc. 325,050 -------------- 935,362 -------------- Finance - Public Investment Funds/Foreign (1.63%) 20,000 Emerging Markets Telecom Fund* 245,000 31,000 MSDW Asia Pacific Fund 292,562 -------------- 537,562 -------------- Financial Services - Miscellaneous (1.30%) 15,000 Heller Financial, Inc. 428,437 -------------- Household/Office Furniture (1.02%) 23,000 La-Z-Boy, Inc. 334,937 -------------- Insurance - Property/Casualty/Title (5.46%) 14,000 Everest Re Group Ltd. 693,000 30,000 IPC Holdings Ltd. 555,000 23,000 Old Republic International Corp. 553,437 -------------- 1,801,437 -------------- Leisure - Toys/Games/Hobby (1.01%) 14,500 Hasbro, Inc. 165,843 15,000 Mattel, Inc. 167,812 -------------- 333,655 -------------- Machinery - General Industrial (1.60%) 14,000 Briggs & Stratton Corp. 529,375 -------------- Media - Newspapers (0.64%) 12,500 Hollinger International, Inc. 209,375 -------------- Medical - Ethical Drugs (1.00%) 6,000 Elan Corp. PLC - Spon. ADR 328,500 -------------- Medical - Hospitals (0.69%) 11,000 Health Management Associates, Inc. - Class A* 228,937 -------------- Medical - Nursing Homes (1.85%) 39,000 Manor Care, Inc.* 611,812 --------------
35 Berger Funds 35 Berger Funds o September 30, 2000 Combined Annual Report - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS
September 30, 2000 ------------------ Shares Value - ------ ------------------ Common Stock (95.69%) - continued Medical - Outpatient/Home Care (1.23%) 50,000 Heathsouth Corp.* $ 406,250 ------------ Medical/Dental/Services (1.95%) 40,000 Omnicare, Inc. 645,000 ------------ Medical/Dental - Supplies (0.95%) 26,180 Steris Corp.* 314,160 ------------ Office - Equipment & Automation (0.82%) 11,000 HON Industries, Inc. 270,875 ------------ Office Supplies Manufacturing (1.51%) 25,000 The Reynolds & Reynolds Co. - Class A 496,875 ------------ Oil & Gas - Field Services (2.17%) 73,000 Key Energy Services, Inc.* 716,325 ------------ Oil & Gas - International Specialty (1.18%) 6,000 Murphy Oil Corp. 388,875 ------------ Oil & Gas - Production/Pipeline (1.41%) 11,000 Williams Cos., Inc. 464,750 ------------ Oil & Gas - U.S. Exploration & Production (2.70%) 8,000 Mitchell Energy & Development Corp. - Class A 373,000 14,000 Noble Affiliates,Inc. 519,750 ------------ 892,750 ------------ Oil & Gas - U.S. Integrated (3.55%) 7,000 Kerr-McGee Corp. 463,750 25,000 USX - Marathon Group, Inc. 709,375 ------------ 1,173,125 ------------ Retail - Apparel/Shoe (1.44%) 33,000 Ross Stores, Inc. 474,375 ------------ Retail - Department Stores (0.99%) 12,500 Federated Department Stores, Inc.* 326,562 ------------ Retail - Major Discount Chains (0.44%) 9,000 Toys R Us, Inc.* 146,250 ------------ Shoes & Related Apparel (1.27%) 45,000 Wolverine World Wide, Inc. 419,062 ------------ Telecommunications - Equipment (0.53%) 8,500 Aspect Communications Corp.* 175,312 ------------ Telecommunications - Services (1.27%) 3,800 Telephone & Data Systems, Inc.* 420,660 ------------ September 30, 2000 ------------------ Shares/Par Value Value - ---------------- ------------------ Common Stock (95.69%) - continued Transportation - Rail (1.85%) 18,000 CSX Corp. $ 392,625 25,000 Kansas City Southern Industries, Inc.* 217,187 ------------ 609,812 ------------ Transportation - Truck (1.75%) 26,000 CNF Transportation, Inc. 578,500 ------------ Trucks & Parts - Heavy Duty (0.63%) 12,000 Stewart & Stevenson Services, Inc. 209,250 ------------ Utility - Electric Power (0.89%) 11,000 Kansas City Power & Light Co. 293,562 ------------ Utility - Gas Distribution (2.04%) 12,000 National Fuel Gas Co. 672,750 ------------ Utility - Telephone (0.79%) 3,300 Telecomunicacoes Brasileiras SA - ADR* 261,112 ------------ Total Common Stock (Cost $27,883,891) 31,591,504 ------------ Rights (0.00%) Utility - Telephone (0.00%) 132 Telesp Celular Participacoes SA* -- ------------ Total Rights (Cost $0) -- ------------ Warrants (0.32%) Retail - Department Stores (0.32%) 23,000 Federated Department Stores, Inc. - D* 104,937 ------------ Total Warrants (Cost $224,552) 104,937 ------------ Repurchase Agreement (4.50%) $1,484,000 State Street Repurchase Agreement, 6.32% dated September 29, 2000, to be repurchased at $1,484,782 on October 2, 2000, collateralized by FNMA Agency Note, 6.25% - May 15, 2029 with a value of $1,516,000 1,484,000 ------------ Total Repurchase Agreement (Cost $1,484,000) 1,484,000 ------------ Total Investments (Cost $29,592,443) (100.51%) 33,180,441 Total Other Assets, Less Liabilities (-0.51%) (167,666) ------------ Net Assets (100.00%) $ 33,012,775 ------------
* Non-income producing security. ADR - American Depositary Receipt. FNMA - Federal National Mortgage Association. PLC - Public Limited Company. REIT - Real Estate Investment Trust. See notes to financial statements. 36 36 Berger Funds o September 30, 2000 Combined Annual Report Ticker Symbol BEONX Berger Fund Number 43 Growth Fund PORTFOLIO MANAGER COMMENTARY JAY W. TRACEY III - -------------------------------------------------------------------------------- Performance The Berger Growth Fund ("the Fund") had a very good fiscal year ended September 30, 2000, gaining 60.93% compared with 13.27% and 33.74% for the Standard & Poor's (S&P) 500 Index(1) and the Nasdaq Composite Index,(2) respectively. This solid performance was driven primarily by stock selection, although our relatively aggressive weighting in technology also helped. Period in Review The Fund's technology holdings contributed more than any other sector to the Fund's good results. The Fund benefited from the performance of companies that supply infrastructure for the Internet build-out. Component suppliers Applied Micro Circuits, SDL Inc., Corning and JDS Uniphase and equipment suppliers Cisco Systems, Juniper Networks and Sycamore Networks all did very well. We remain bullish on many of the component and equipment companies that are supplying innovative, market-leading solutions to service providers, which are, in turn, aggressively deploying those solutions to meet an insatiable demand for increased bandwidth. Companies meeting the rapidly growing demand for data storage solutions also contributed positively to performance, notably EMC Corp., the leader in enterprise storage systems; Network Appliance, which makes specialized devices designed to provide file service for data-intensive networks; and Veritas Software, the leader in data storage management software. The Fund also benefited from companies supplying leading-edge software solutions that take advantage of the Internet to deliver competitive advantages to their customers. Among the better performers were Verisign, which provides digital certificate services that secure e-commerce and communications over the Internet; Siebel Systems, the leader in customer relationship management software that automates corporate sales forces; and Agile Software, whose collaborative software products help automate commerce between manufacturers and their suppliers and customers. Surveys of information technology managers at major companies confirm that e-commerce spending, which has been strong all year, should continue to grow rapidly for the foreseeable future. We remain, therefore, optimistic about the outlook for select vendors of e-commerce solutions and view corrections as buying opportunities. Elsewhere in technology, semiconductor and semiconductor equipment stocks such as Intel, Applied Materials, KLA-Tencor and Lam Research, strong early in the year, weakened considerably in the last few months. We significantly reduced our exposure to this industry in a timely fashion. Microsoft has been disappointing, but we continue to hold this leading company in anticipation of accelerating sales of Windows 2000 next year. Technology is an exciting but risky area in which to invest because the pace of change is so fast, the market is so competitive and the stocks are so volatile. Nevertheless, we remain overweighted in this increasingly important sector, and we will continue to focus on innovative companies with strong, forward-looking management teams, leading products or services, defensible barriers to competition and rapidly growing, sustainable revenues and earnings. In healthcare, the Fund has benefited from its focus on biotechnology and selected pharmaceuticals. Fund winners included Genentech, PE Corp.-PE Biosystems Group, Amgen and American Home Products. Bristol Myers Squibb was our main disappointment and has been sold. Because of regulatory, reimbursement and pricing uncertainties, especially as we approach the elections, we have been underweighted and very selective in the healthcare sector. We are positive on a long-term basis, however, and favor those companies that have innovative new products coming onto the market that we believe may generate substantial new revenue and shareholder value. Energy services holdings such as ENSCO International and Nabors Industries were strong, reflecting positive supply/demand fundamentals. Though it is tempting to take some profits, we have elected to stay with this winning sector because the earnings outlook is only getting brighter. Generally, the consumer sector was disappointing. In particular, the Fund's radio broadcasting stocks were down as advertising revenues slowed over the latter half of the fiscal year. Although this trend is likely to persist for another quarter or two, we are holding higher-quality companies such as Clear Channel Communications and Hispanic Broadcasting, which now offer good value. In the retail sector, very few companies showed good results, and the Fund's results, likewise, were mixed. We had some success in Radio Shack, but Best Buy and Circuit City were disappointing and were sold. In general, retail sales trends have been lackluster, and we continue to be underweighted in this sector. Summary Again, the Fund's good results were driven more by individual stock selection than by the weighting given to various sectors. Because we employ a fundamentally research-driven, bottom-up approach to portfolio management, the Fund's results are consistent with our growth-oriented investment philosophy. Every day presents us with new opportunities in rapidly growing companies. Rarely have there been so many companies addressing such open-ended business opportunities as there are today. Regardless of the stock market's short-term ups and downs, we are excited about the fundamental outlook for the great growth companies that are leading us into the future, and we will continue to focus on the best of them. Past performance is no guarantee of future results. (1) 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. (2) The Nasdaq Composite Index is an unmanaged index, which consists of the common stocks of over 5000 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. 37 Berger Funds 37 Berger Funds o September 30, 2000 Combined Annual Report PERFORMANCE OVERVIEW - -------------------------------------------------------------------------------- Berger Growth Fund Comparison of Change in Value of Berger Growth Fund vs. S&P 500 Index AVERAGE ANNUAL TOTAL RETURNS AS OF SEPTEMBER 30, 2000 One Year 60.93% Five Year 21.01% Ten Year 23.39% Berger Growth Fund $81,806 S&P 500 Index $58,987 [GRAPH] Past performance is no guarantee of future results. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS
September 30, 2000 ------------------ Shares Value - ------ ------------------ Common Stock (98.95%) Computer - Manufacturers (3.71%) 529,380 Handspring, Inc.* $ 36,560,306 306,418 Sun Microsystems, Inc.* 35,774,301 ------------ 72,334,607 ------------ Computer - Memory Devices (5.90%) 596,278 EMC Corp.* 59,106,056 422,920 Network Appliance, Inc.* 53,869,435 18,380 StorageNetworks, Inc. 1,878,206 ------------ 114,853,697 ------------ Computer Software - Desktop (1.99%) 642,910 Microsoft Corp.* 38,735,327 ------------ Computer Software - Enterprise (4.79%) 76,687 Oracle Corp. Japan 17,667,231 418,160 Siebel Systems, Inc.* 46,546,435 204,869 VERITAS Software Corp.* 29,091,398 ------------ 93,305,064 ------------ September 30, 2000 ------------------ Shares Value - ------ ------------------ Common Stock (98.95%) - continued Electronics - Military Systems (1.33%) 698,730 General Motors Corp. - Class H* $ 25,978,781 ------------ Electronics - Miscellaneous Components (0.78%) 485,646 RF Micro Devices, Inc.* 15,237,143 ------------ Electronics - Miscellaneous Products (1.32%) 295,680 Gemstar - TV Guide International, Inc.* 25,779,600 ------------ Electronics - Scientific Instruments (1.53%) 255,170 PE Corp. - PE Biosystems Group 29,727,305 ------------ Electronics - Semiconductor Equipment (2.37%) 491,216 Applied Materials, Inc.* 29,135,249 387,574 ASM Lithography Holding NV - NY Reg.* 12,523,484 131,160 Teradyne, Inc.* 4,590,600 ------------ 46,249,333 ------------
38 38 Berger Funds o September 30, 2000 Combined Annual Report Berger Growth Fund - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS
September 30, 2000 ------------------ Shares Value - ------ ------------------ Common Stock (98.95%) - continued Electronics - Semiconductor Manufacturing (6.98%) 274,240 Analog Devices, Inc. $ 22,641,940 333,280 Applied Micro Circuits Corp.* 69,009,790 285,248 Intel Corp. 11,855,620 680,985 STMicroelectronics NV - NY Shares* 32,431,910 ------------ 135,939,260 ------------ Finance - Investment Brokers (1.61%) 884,325 Schwab (Charles) Corp. 31,393,537 ------------ Financial Services - Miscellaneous (1.12%) 157,780 Capital One Financial Corp. 11,054,461 84,240 Providian Financial Corp. 10,698,480 ------------ 21,752,941 ------------ Household - Audio/Video (0.97%) 187,472 Sony Corp. - Spon. ADR 18,922,955 ------------ Internet - ISP/Content (3.07%) 581,488 America Online, Inc.* 31,254,980 190,300 Infospace, Inc.* 5,756,575 193,375 Internet Initiative Japan Inc. - Spon. ADR* 7,952,546 164,014 Yahoo!, Inc.* 14,925,274 ------------ 59,889,375 ------------ Internet - Network Security/Solutions (9.08%) 1,137,792 Cisco Systems, Inc.* 62,863,008 208,980 Juniper Networks, Inc.* 45,753,558 303,840 Sapient Corp.* 12,362,490 275,740 VeriSign, Inc.* 55,854,583 ------------ 176,833,639 ------------ Internet - Software (2.36%) 348,190 Agile Software Corp.* 31,315,338 487,860 Vignette Corp.* 14,574,817 ------------ 45,890,155 ------------ Media - Cable TV (5.11%) 1,066,220 AT&T Corp. - Liberty Media Group - Class A* 19,191,960 976,530 EchoStar Communications Corp. - Class A* 51,511,957 369,546 Time Warner, Inc. 28,916,974 ------------ 99,620,891 ------------ Media - Radio/TV (2.07%) 438,402 Clear Channel Communications, Inc.* 24,769,713 560,910 Hispanic Broadcasting Corp.* 15,635,366 ------------ 40,405,079 ------------ September 30, 2000 ------------------ Shares Value - ------ ------------------ Common Stock (98.95%) - continued Medical - Biomedical/Genetics (5.72%) 483,389 Amgen, Inc.* $ 33,754,147 272,663 Genentech, Inc.* 50,630,110 620,900 Immunex Corp.* 27,009,150 ------------ 111,393,407 ------------ Medical - Ethical Drugs (3.07%) 729,172 American Home Products Corp. 41,243,791 410,130 Pfizer, Inc. 18,430,216 ------------ 59,674,007 ------------ Medical - Products (1.32%) 364,480 Guidant Corp.* 25,764,180 ------------ Oil & Gas - Drilling (5.40%) 1,027,507 ENSCO International, Inc. 39,302,142 939,928 Nabors Industries, Inc.* 49,252,227 283,391 Transocean Sedco Forex, Inc. 16,613,797 ------------ 105,168,166 ------------ Oil & Gas - Field Services (2.23%) 421,987 Halliburton Co. 20,650,988 276,569 Schlumberger Ltd. 22,765,085 ------------ 43,416,073 ------------ Oil & Gas - Production/Pipeline (1.45%) 323,167 Enron Corp. 28,317,528 ------------ Retail - Apparel/Shoe (0.47%) 411,970 Limited, Inc. 9,089,088 ------------ Retail - Major Discount Chains (1.03%) 574,286 Costco Wholesale Corp.* 20,064,117 ------------ Retail/Wholesale Computers/Cellular (1.00%) 300,000 RadioShack Corp. 19,387,500 ------------ Telecommunications - Cellular (1.44%) 241,004 VoiceStream Wireless Corp.* 27,971,526 ------------ Telecommunications - Equipment (15.47%) 249,610 Corning, Inc. 74,134,170 364,730 Corvis Corp.* 22,265,626 278,332 JDS Uniphase Corp.* 26,354,561 1,128,968 Nokia Corp. - Spon. ADR 44,947,038 459,620 Nortel Networks Corp. 27,376,116 191,350 Redback Networks, Inc.* 31,369,440 152,282 SDL,Inc.* 46,902,856 259,603 Sycamore Networks, Inc.* 28,037,124 ------------ 301,386,931 ------------
39 Berger Funds 39 Berger Funds o September 30, 2000 Combined Annual Report - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS
September 30, 2000 ------------------ Shares/Par Value Value - ---------------- ------------------ Common Stock (98.95%) - continued Telecommunications - Services (3.99%) 1,338 NTT DoCoMo, Inc. $ 38,407,335 690,350 Qwest Communications International, Inc.* 33,179,946 241,800 Sonera Corp. - Spon. ADR 6,105,450 -------------- 77,692,731 -------------- Utilities - Electric Power (0.27%) 165,600 Southern Energy, Inc. 5,195,700 -------------- Total Common Stock (Cost $1,295,932,934) 1,927,369,643 -------------- Repurchase Agreement (1.38%) $26,793,000 State Street Repurchase Agreement, 6.32% dated September 29, 2000, to be repurchased at $26,807,111 on October 2, 2000, collateralized by FHLB Agency Note, 6.00% - August 15, 2002 with a value of $27,329,733 26,793,000 -------------- Total Repurchase Agreement (Cost $26,793,000) 26,793,000 -------------- Total Investments (Cost $1,322,725,934) (100.33%) 1,954,162,643 Total Other Assets, Less Liabilities (-0.33%) (6,390,160) -------------- Net Assets (100.00%) $1,947,772,483 --------------
* Non-income producing security. ADR - American Depositary Receipt. FHLB - Federal Home Loan Bank. See notes to financial statements. 40 40 Berger Funds o September 30, 2000 Combined Annual Report Ticker Symbol BBINX Fund Number 349 Berger PORTFOLIO MANAGER COMMENTARY BANK OF IRELAND ASSET International Fund MANAGEMENT (U.S) LTD. - -------------------------------------------------------------------------------- Performance The Berger International Fund (the "Fund") gained 9.43% for the year ended September 30, 2000, compared with the 3.42% gain for its benchmark, the MSCI EAFE Index.(1) World equity markets registered exceptional gains toward the end of 1999, fueled by a combination of low interest rates and rising commodity prices. There was significant divergence in the performance of those markets in the first part of 2000, however. Half of the markets in the 22 countries that comprise the MSCI World Index2 registered gains and half of the markets registered losses (as measured in U.S. dollars). Rising interest rates in all markets except Japan also served as a drag on returns. Global markets continued to decline over the last six months, with the majority of the markets in the MSCI World Index posting negative performance. The last three months started well with a number of blue-chip European companies posting better than expected profits for the first half of the year and economic data revealing stronger-than-expected activity, particularly in the core European economies. By the end of August, though, the weakness of the Euro combined with an uptake in commodity prices, particularly energy, was pushing producer price inflation in the Eurozone higher. Elsewhere, poor supply-and-demand conditions have contributed to the Japanese market's malaise this year. The Japanese markets were unable to shrug off concerns about corporate profit growth that began with several US companies and quickly rippled around the world. Other Asian markets remained sluggish, despite good economic indicators in Hong Kong. Period in Review For the first six months of the fiscal year, performance was aided by the Fund's investment in telecommunications, media and technology stocks. But over the last six months, performance was hurt by these same investments. The most significant decline came from stocks in the Growth in Telecommunications theme. Telecom Italia, which had performed well earlier this year, succumbed to the general sector sentiment and fell sharply during the last three months, despite reporting earnings in line with market expectations. Koninklijke KPN NV and Telefonaktiebolaget LM Ericsson were two other holdings that performed well in the first half of the fiscal year, but took a dive in the second half of the fiscal year. KPN was dogged by several concerns, including disappointing earnings news. Ericsson, who holds nearly half of all third-generation mobile license contracts that have been awarded to date, was hit hard when concerns emerged that profit margins on these contracts may come under some pressure. Semiconductor companies were impacted globally as sales of personal computer and mobile phone handsets slowed. This negatively impacted two Japanese-quoted companies in the Restructuring Opportunities theme, NEC and Hitachi. Although neither company is a pure semiconductor play, they were unable to avoid the sector's general downturn despite significant earnings upgrades announced by both companies in September. On a more upbeat note, stocks in the Asian Cyclical Recovery theme performed well, led by Hong Kong-quoted companies. Competition has reduced mortgage costs in Hong Kong over the past two years, and residential property prices and transaction volumes are rising. Cheung Kong and Sun Hung Kai Properties, among the region's largest property developers, were beneficiaries of this trend. Stocks in the Growth in Healthcare Needs theme were positive most of the year, particularly pharmaceutical stocks such as AstraZeneca, the UK pharmaceutical company, and Glaxo Wellcome. Despite continued regulatory delays in its proposed merger, Glaxo Wellcome was boosted by an increase in sales and profits. Summary Technology stocks continue to weaken relative to broader market indices, as investors become increasingly more discriminating in selecting stocks in this sector. The euphoria of last year has disappeared, and bankruptcies are increasing as the availability of new capital is restricted to the more viable enterprises. We welcome this development as a return to rationality, and we continue to expect a consequent broadening of market performance. The positive aspect of an economic slowdown is a more benign outlook for interest rates. The greatest threat to this outlook comes from oil prices. To date, oil prices have not fed through to any significant extent into broad measures of inflation. But, if prices persist at current levels and threaten to feed into wage rates, the outlook for interest rates would deteriorate. On balance, we do not anticipate that this will occur; however, it does represent a potential threat to equity and bond markets. Past performance is no guarantee of future results. (1)The Morgan Stanley Capital International EAFE Index represents major overseas stock markets. It is an unmanaged index. One cannot invest directly in an index. 41 Berger Funds 41 Berger Funds o September 30, 2000 Combined Annual Report PERFORMANCE OVERVIEW - -------------------------------------------------------------------------------- Berger International Fund Comparison of Change in Value of Berger International Fund vs. MSCI EAFE Index AVERAGE ANNUAL TOTAL RETURNS AS OF SEPTEMBER 30, 2000 One Year 9.43% Five Year 10.92% Ten Year 12.91% Berger International Fund $33,680 MSCI EAFE Index $25,831 [GRAPH] 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. Investments in the Fund are not insured by the Federal Deposit Insurance Corporation, are not deposits and are not obligations of, or endorsed or guaranteed in any way by, any bank. Past performance is no guarantee of future results. Fund performance shown reflects the unusually favorable market conditions that existed in 1999 which likely are not sustainable as market conditions change. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. 42 42 Berger Funds o September 30, 2000 Combined Annual Report Ticker Symbol BEOOX Berger Growth and Fund Number 44 Income Fund PORTFOLIO MANAGER COMMENTARY STEVEN J. FOSSEL - -------------------------------------------------------------------------------- Performance The Berger Growth and Income Fund (the "Fund") had an exceptional year, gaining 56.09% for the year ended September 30, 2000, versus 13.27% for the Standard & Poor's (S&P) 500 Index.1 The fact that the Fund significantly outperformed its benchmark can be attributed to two factors--our rigorous stock selection process and our concentration on high-quality, large-capitalization stocks with excellent growth prospects. The Fund stayed focused all year on what we believed were the best-positioned companies in sectors with strong growth outlooks, especially technology, communications and energy. We remained underweighted in more competitive, slower-growth sectors such as basic industries, capital goods and transportation. Period in Review Technology, the sector in which we see the best long-term growth prospects, continued to be the Fund's largest weighting. We recognized that Corning, Nortel and Juniper would benefit from strong demand for bandwidth and build-out of communications infrastructure. This build-out is being driven by consumer use of the Internet and the demand for high bandwidth applications. Similarly, we believe that Nokia, the leading provider of handsets, and Qwest, which has the most complete fiber-optic network, will receive a boost from the same trends. In other areas of technology, the Fund substantially benefited from its position in storage companies, which, in turn, are riding the tide of growth in data storage needs created by the burgeoning information revolution. We positioned the Fund in leading storage companies, including EMC Corp., Network Appliance and Veritas Software. Our holdings in semiconductor companies that serve growing communications markets, such as Applied Micro Circuits and STMicroelectronics, also contributed positively to the performance of the Fund this year. Compared with the index, the Fund is overweighted in the energy sector, which is not typical in a growth and income fund. This serves as a good counterbalance to our technology holdings. We have positioned our energy holdings primarily in service companies that not only can benefit from the strong supply characteristics in the oil and natural gas markets, but that also can gain market share and grow faster than competitors. Two of these companies, Enron and ENSCO International, were the largest contributors to Fund performance in this sector. Prudent stock picking in healthcare and financial services also contributed to the Fund's strong performance over the year. Genentech and Amgen were our largest and best-performing healthcare holdings, reflecting both companies' continued rollout of new and exciting products. Among financial stocks, we continue to see more growth in capital market plays such as Schwab and Morgan Stanley Dean Witter than in traditional banking franchises, which have been slowed by the Federal Reserve Board's repeated interest rate increases. On the downside, several of our retail and consumer stocks turned in disappointing results. Among retailers, both Best Buy and Gap declined. We believe Gap's issues will be difficult to overcome in the short term, so we eliminated our position in this stock. We continue to hold Best Buy, however, because we believe the company is well-positioned to benefit from consumer electronics spending over the holiday season. Radio stocks such as Hispanic Broadcasting underperformed because of a slowing in advertising revenues, and we sold our position because we believed there were better uses for the Fund's assets. In the beginning of the year, the Fund benefited from positions in several Japanese multinational companies such as Toyota and Sony. We took profits in the stocks during the year and redeployed the proceeds into companies we are able to monitor more closely through frequent management contacts. Summary Again the Fund's good results were driven more by individual stock selection than by the weighting given to various sectors. Because we employ a fundamentally research-driven, bottom-up approach to portfolio management, the Fund's results are consistent with our growth-oriented investment philosophy. Every day presents us with new opportunities in leading companies. Rarely have so many blue-chip companies addressed such growth opportunities as they do today. Regardless of the stock market's short-term ups and downs, we are excited about the fundamental outlook for the great growth companies that are leading us into the future, and we will continue to focus on the best of them. Past performance is no guarantee of future results. (1) 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. 43 Berger Funds 43 Berger Funds o September 30, 2000 Combined Annual Report PERFORMANCE OVERVIEW - -------------------------------------------------------------------------------- Berger Growth and Income Fund Comparison of Change in Value of Berger Growth and Income Fund vs. S&P 500 Index AVERAGE ANNUAL TOTAL RETURNS AS OF SEPTEMBER 30, 2000 One Year 56.09% Five Year 25.97% Ten Year 23.22% Berger Growth and Income Fund $80,690 S&P 500 Index $58,987 [GRAPH] Past performance is no guarantee of future results. Fund performance shown reflects the unusually favorable market conditions that existed in 1999 which likely are not sustainable as market conditions change. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS
September 30, 2000 ------------------ Shares Value - ------ ------------------ Common Stock (77.42%) Banks - Money Center (1.29%) 166,700 Bank of New York Co., Inc. $ 9,345,618 -------------- Banks - Super Regional (2.78%) 201,450 Fifth Third Bancorp. 10,853,118 414,840 Firstar Corp. 9,282,045 -------------- 20,135,163 -------------- Commercial Services - Advertising (0.94%) 93,880 Omnicom Group, Inc. 6,847,372 -------------- Computer - Manufacturers (1.63%) 101,012 Sun Microsystems, Inc.* 11,793,151 -------------- Computer - Memory Devices (4.50%) 156,632 EMC Corp.* 15,526,147 134,116 Network Appliance, Inc.* 17,083,025 -------------- 32,609,172 -------------- Computer Software - Desktop (1.61%) 194,020 Microsoft Corp.* 11,689,705 -------------- September 30, 2000 ------------------ Shares Value - ------ ------------------ Common Stock (77.42%) - continued Computer Software - Enterprise (0.92%) 85,000 Oracle Corp.* $ 6,693,750 -------------- Diversified Operations (2.69%) 174,200 Pharmacia Corp. 10,484,662 173,830 Tyco International Ltd. 9,017,431 -------------- 19,502,093 -------------- Electrical - Equipment (2.02%) 253,940 General Electric Co. 14,649,163 -------------- Electronics - Semiconductor Equipment (0.98%) 119,724 Applied Materials, Inc.* 7,101,129 -------------- Electronics - Semiconductor Manufacturing (5.93%) 87,260 Analog Devices, Inc.* 7,204,403 72,870 Applied Micro Circuits Corp.* 15,088,644 197,786 Intel Corp. 8,220,480 152,658 STMicroelectronics NV - NY Shares* 7,270,337 111,350 Texas Instruments, Inc. 5,254,328 -------------- 43,038,192 --------------
44 44 Berger Funds o September 30, 2000 Combined Annual Report Berger Growth and Income Fund - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS
September 30, 2000 ------------------ Shares Value - ------ ------------------ Common Stock (77.42%) - continued Finance - Consumer/Commercial Loans (1.02%) 193,770 Associates First Capital Corp. - Class A $ 7,363,260 -------------- Finance - Investment Brokers (2.68%) 123,240 Morgan Stanley Dean Witter & Co. 11,268,757 229,470 Schwab (Charles) Corp. 8,146,185 -------------- 19,414,942 -------------- Finance - Mortgage & Related Services (1.71%) 229,610 Freddie Mac 12,413,290 -------------- Internet - ISP/Content (0.65%) 51,530 Yahoo!, Inc.* 4,689,230 -------------- Internet - Network Security/Solutions (3.80%) 286,738 Cisco Systems, Inc.* 15,842,274 57,920 VeriSign, Inc.* 11,732,420 -------------- 27,574,694 -------------- Media - Cable TV (3.99%) 564,690 AT&T Corp. - Liberty Media Group - Class A* 10,164,420 192,570 Comcast Corp. - Special Class A* 7,883,334 138,917 Time Warner, Inc. 10,870,255 -------------- 28,918,009 -------------- Media - Radio/TV (1.22%) 151,280 Viacom, Inc. - Class B* 8,849,880 -------------- Medical - Biomedical/Genetics (3.62%) 179,320 Amgen, Inc.* 12,521,579 73,900 Genentech, Inc.* 13,722,306 -------------- 26,243,885 -------------- Medical - Ethical Drugs (3.77%) 284,230 American Home Products Corp. 16,076,759 250,300 Pfizer, Inc. 11,247,856 -------------- 27,324,615 -------------- Medical - Products (1.16%) 119,430 Guidant Corp.* 8,442,208 -------------- Oil & Gas - Drilling (2.97%) 359,530 ENSCO International, Inc. 13,752,022 149,020 Nabors Industries, Inc.* 7,808,648 -------------- 21,560,670 -------------- Oil & Gas - Field Services (3.18%) 286,980 Halliburton Co. 14,044,083 109,900 Schlumberger Ltd. 9,046,143 -------------- 23,090,226 -------------- September 30, 2000 ------------------ Shares/Par Value Value - ---------------- ------------------ Common Stock (77.42%) - continued Oil & Gas - International Integrated (1.41%) 139,170 Total Fina SA - Spon. ADR $ 10,220,296 -------------- Oil & Gas - Production/Pipeline (3.16%) 188,770 Enron Corp. 16,540,971 151,090 Williams Cos., Inc. 6,383,552 -------------- 22,924,523 -------------- Oil & Gas - U.S. Exploration & Production (1.25%) 136,920 Anadarko Petroleum Corp. 9,099,703 -------------- Retail - Apparel/Shoe (0.70%) 228,530 Limited, Inc. 5,041,943 -------------- Retail - Consumer Electronics (1.17%) 133,360 Best Buy Co., Inc.* 8,485,030 -------------- Retail - Major Discount Chains (0.91%) 188,830 Costco Wholesale Corp.* 6,597,248 -------------- Retail/Wholesale Computers/Cellular (1.10%) 123,330 RadioShack Corp. 7,970,201 -------------- Telecommunications - Equipment (8.96%) 65,129 Corning, Inc. 19,343,313 171,810 Lucent Technologies, Inc. 5,250,943 387,484 Nokia Corp. - Spon. ADR 15,426,706 219,840 Nortel Networks Corp. 13,094,220 61,068 QUALCOMM, Inc.* 4,351,095 69,912 Sycamore Networks, Inc.* 7,550,496 -------------- 65,016,773 -------------- Telecommunications - Services (1.18%) 175,250 Nippon Telegraph & Telephone Corp. - Spon. ADR 8,587,250 -------------- Utility - Electric Power (1.29%) 180,000 Constellation Energy Group, Inc. 8,955,000 12,100 Southern Energy, Inc.* 379,637 -------------- 9,334,637 -------------- Utility - Telephone (1.23%) 171,600 ALLTEL Corp. 8,955,375 -------------- Total Common Stock (Cost $397,571,497) 561,522,396 -------------- Corporate Debt - Convertible (15.63%) Computer Software - Enterprise (3.99%) $3,172, 000 Siebel Systems, Inc. - 144A 5.50%, 9/15/2006 15,332,655 3,324,000 VERITAS Software Corp. 1.86%, 8/13/2006 13,661,640 -------------- 28,994,295 --------------
45 Berger Funds 45 Berger Funds o September 30, 2000 Combined Annual Report - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS
September 30, 2000 ------------------ Shares/Par Value Value - ---------------- ------------------ Corporate Debt - Convertible (15.63%) - continued Electronics - Semiconductor Equipment (0.87%) $5,637,000 ASM Lithography Holding NV - 144A 4.25%, 11/30/2004 $ 6,341,625 -------------- Electronics - Semiconductor Manufacturing (0.72%) 2,698,000 Conexant Systems, Inc. 4.25%, 5/1/2006 5,193,650 -------------- Internet - ISP/Content (1.26%) 1,114,000 America Online, Inc. 4.00%, 11/15/2002 9,140,370 -------------- Internet - Network Security/Solutions (3.12%) 8,508,000 Juniper Networks, Inc. 4.75%, 3/15/2007 13,112,955 8,486,000 Redback Networks, Inc. - 144A 5.00%, 4/1/2007 9,504,320 -------------- 22,617,275 -------------- Media - Cable TV (2.72%) 14,831,000 EchoStar Communications Corp. - Class A - 144A 4.875%, 1/1/2007 19,706,691 -------------- Media - Radio/TV (1.74%) 11,504,000 Clear Channel Communications, Inc. 2.625%, 4/1/2003 12,625,640 -------------- Oil & Gas - Drilling (0.58%) 6,061,000 Nabors Industries, Inc. - 144A 0.00%, 6/20/2020* 4,227,564 -------------- Telecommunications - Services (0.63%) 3,384,000 Level Three Communications, Inc. 6.00%, 9/15/2009 4,547,250 -------------- Total Corporate Debt - Convertible (Cost $78,080,584) 113,394,360 -------------- Preferred Stock - Convertible (3.84%) Telecommunications - Cellular (1.43%) 61,970 Omnipoint Corp. - 144A, 7.00% 10,348,990 -------------- Telecommunications - Services (2.41%) 221,800 Qwest Communications International, Inc., 5.75% 17,466,750 -------------- Total Preferred Stock - Convertible (Cost $20,891,921) 27,815,740 -------------- September 30, 2000 ------------------ Par Value Value - --------- ------------------ Repurchase Agreement (3.47%) $25,166,000 State Street Repurchase Agreement, 6.32% dated September 29, 2000, to be repurchased at $25,179,254 on October 2, 2000, collateralized by FFCB Agency Note, 5.88% - July 2, 2001 with a value of $25,672,894 $ 25,166,000 -------------- Total Repurchase Agreement (Cost $25,166,000) 25,166,000 -------------- Total Investments (Cost $521,710,002) (100.36%) 727,898,496 Total Other Assets, Less Liabilities (-0.36%) (2,625,999) -------------- Net Assets (100.00%) $ 725,272,497 --------------
* Non-income producing security. ADR - American Depositary Receipt. FFCB - Federal Farm Credit Bank. 144A - Resale is restricted to qualified institutional buyers. See notes to financial statements. 46 46 Berger Funds o September 30, 2000 Combined Annual Report Ticker Symbol BEBAX Berger Fund Number 213 Balanced Fund PORTFOLIO MANAGER COMMENTARY STEVEN L. FOSSEL - -------------------------------------------------------------------------------- Performance The Berger Balanced Fund (the "Fund") had another year of strong performance, gaining 30.08% for the year ended September 30, 2000, versus 13.27% for the Standard & Poor's (S&P) 500 Index.1 The Fund was able to outperform the S&P 500 Index even though we invest in a balance of equity and fixed-income securities. As of September 30, 2000, the Fund was invested 63% in equities, 35% in fixed income and 2% in cash. Compared with a year ago, this represents an increase in the equity portion of the Fund and a decrease in cash. Market volatility prompted these changes as it created opportunities to put cash to work in selected high-quality growth companies priced at reasonable valuations. Period in Review We believe that the Fund's solid outperformance can be accounted for by prudent stock-picking rather than by large sector betting. In keeping with our growth philosophy, we were overweighted in technology this year and held a number of the top-performing stocks in this sector. We recognized that Corning and Qwest Communications International would benefit from strong demand for bandwidth and similarly, that semiconductor chip and wireless handset manufacturers such as QUALCOMM would receive a boost from strength in their end markets. Oracle, a leading enterprise software company, was aided by growth in corporate information management needs and accordingly was one of the top contributors to the Fund's performance over the year. Energy was another area of emphasis for the Fund. We believe that the tight supply and demand situation for oil and natural gas will continue to create opportunities for the best-positioned companies in this sector. Two of those companies, Enron and Transocean Sedco Forex, Inc., contributed strongly to the Fund's gain this year. In both the healthcare and financial services sectors, the Fund benefited from careful stock-picking despite our underweighting in these areas over the year. Genentech was our largest and best-performing healthcare holding, reflecting the continued rollout of new and exciting products. Among financial stocks, we continue to see more growth in capital market plays such as Citigroup and Morgan Stanley Dean Witter than in traditional banking franchises, which have been slowed by the Federal Reserve Board's repeated interest rate increases. On the downside, several of our retail and consumer stocks turned in disappointing results. Among retailers, Nordstrom and Gap made merchandising blunders that were not easily correctable, and we eliminated them from the portfolio. Among consumer companies, Procter & Gamble and Dial experienced slowing growth and were also sold during the year. The fixed-income portion of the Fund continues to be positioned conservatively to provide income and reduce risk and volatility in the overall portfolio. The average duration and maturity remains relatively short--about three years. Agency securities make up nearly half of the Fund's fixed-income holdings and the other half is concentrated in investment-grade corporate bonds and U.S. Treasury securities. Summary We believe the fixed-income portion of the portfolio will continue to provide both stability and income, while the equity portion will focus on high-quality growth investments. Strong gains on the equity side of the portfolio produced most of the Fund's solid total return for the year. These results were driven more by individual stock selection than by the weighting given to various sectors. Because we employ a fundamentally research-driven, bottom-up approach to portfolio management, the Fund's results are consistent with our growth-oriented investment philosophy. Every day presents us with new opportunities in high-quality companies. Rarely have there been so many companies addressing growth opportunities as there are today. Regardless of the stock market's short-term ups and downs, we are excited about the fundamental outlook for blue-chip companies that are leading us into the future, and we will continue to focus on the best of them. Past performance is no guarantee of future results. (1) 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. 47 Berger Funds 47 Berger Funds o September 30, 2000 Combined Annual Report PERFORMANCE OVERVIEW - -------------------------------------------------------------------------------- Berger Balanced Fund Comparison of Change in Value of Berger Balanced Fund vs. S&P 500 Index AVERAGE ANNUAL TOTAL RETURNS AS OF SEPTEMBER 30, 2000 One Year 30.08% Life of Fund (9/30/97) 41.66% Berger Balanced Fund $28,428 S&P 500 Index $15,787 [GRAPH] Past performance is no guarantee of future results. Fund performance shown reflects the unusually favorable market conditions that existed in 1999 which likely are not sustainable as market conditions change. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Life of Fund performance includes returns for the last quarter of 1997, which reflect a higher-than-normal level of trading activity undertaken to pursue equity opportunities available as the Advisor was beginning to implement the Fund's long-term approach to equity management. - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS
September 30, 2000 ------------------ Shares Value - ------ ------------------ Common Stock (63.00%) Banks - Money Center (1.85%) 60,653 Citigroup, Inc. $ 3,279,052 ------------ Banks - Super Regional (1.94%) 55,000 Firstar Corp. 1,230,625 47,900 Wells Fargo & Co. 2,200,406 ------------ 3,431,031 ------------ Computer - Manufacturers (1.19%) 18,000 Sun Microsystems, Inc.* 2,101,500 ------------ Computer - Memory Devices (0.84%) 15,000 EMC Corp.* 1,486,875 ------------ Computer Software - Desktop (1.77%) 51,960 Microsoft Corp.* 3,130,590 ------------ Computer Software - Enterprise (1.93%) 43,400 Oracle Corp.* 3,417,750 ------------ September 30, 2000 ------------------ Shares Value - ------ ------------------ Common Stock (63.00%) - continued Diversified Operations (2.73%) 41,388 Pharmacia Corp. $ 2,491,040 45,000 Tyco International Ltd. 2,334,387 ------------ 4,825,427 ------------ Electrical - Equipment (3.04%) 93,150 General Electric Co. 5,373,590 ------------ Electronics - Military Systems (1.77%) 84,000 General Motors Corp. - Class H* 3,123,120 ------------ Electronics - Semiconductor Equipment (2.55%) 37,240 Applied Materials, Inc.* 2,208,797 39,240 ASM Lithography Holding NV - NY Reg.* 1,267,942 49,560 Lam Research Corp.* 1,037,662 ------------ 4,514,401 ------------
48 48 Berger Funds o September 30, 2000 Combined Annual Report Berger Balanced Fund - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS
September 30, 2000 ------------------ Shares Value - ------ ------------------ Common Stock (63.00%) - continued Electronics - Semiconductor Manufacturing (2.63%) 12,000 Analog Devices, Inc.* $ 990,750 33,800 Intel Corp. 1,404,812 47,600 Texas Instruments, Inc. 2,246,125 ------------ 4,641,687 ------------ Finance - Investment Brokers (1.82%) 16,000 Morgan Stanley Dean Witter & Co. 1,463,000 49,205 Schwab (Charles) Corp. 1,746,777 ------------ 3,209,777 ------------ Finance - Mortgage & Related Services (1.01%) 33,000 Freddie Mac 1,784,062 ------------ Internet - ISP/Content (1.36%) 26,800 America Online, Inc.* 1,440,500 10,600 Yahoo!, Inc.* 964,600 ------------ 2,405,100 ------------ Internet - Network Security/Solutions (1.15%) 36,800 Cisco Systems, Inc.* 2,033,200 ------------ Media - Cable TV (2.58%) 85,000 AT&T Corp. - Liberty Media Group* 1,530,000 55,000 Comcast Corp. - Special Class A 2,251,562 10,000 Time Warner, Inc. 782,500 ------------ 4,564,062 ------------ Media - Radio/TV (0.66%) 20,000 Viacom, Inc. - Class A* 1,170,000 ------------ Medical - Biomedical/Genetics (2.24%) 24,830 Amgen, Inc.* 1,733,832 12,000 Genentech, Inc.* 2,228,250 ------------ 3,962,082 ------------ Medical - Ethical Drugs (2.88%) 42,320 American Home Products Corp. 2,393,725 60,000 Pfizer, Inc. 2,696,250 ------------ 5,089,975 ------------ Medical - Products (1.04%) 26,000 Guidant Corp.* 1,837,875 ------------ Oil & Gas - Drilling (2.50%) 40,000 Nabors Industries, Inc.* 2,096,000 39,750 Transocean Sedco Forex, Inc. 2,330,343 ------------ 4,426,343 ------------ Oil & Gas - Field Services (1.49%) 53,790 Halliburton Co. 2,632,348 ------------ September 30, 2000 ------------------ Shares Value - ------ ------------------ Common Stock (63.00%) - continued Oil & Gas - International Integrated (1.38%) 33,340 Total Fina SA - Spon. ADR $ 2,448,406 ------------ Oil & Gas - Machinery/Equipment (0.83%) 20,000 Cooper Cameron Corp.* 1,473,750 ------------ Oil & Gas - Production/Pipeline (3.05%) 42,190 Enron Corp. 3,696,898 40,000 Williams Cos., Inc. 1,690,000 ------------ 5,386,898 ------------ Oil & Gas - U.S. Exploration & Production (0.94%) 25,000 Anadarko Petroleum Corp. 1,661,500 ------------ Retail - Apparel/Shoe (0.50%) 40,000 Limited, Inc. 882,500 ------------ Retail - Consumer Electronics (1.38%) 38,360 Best Buy Co., Inc.* 2,440,655 ------------ Retail - Drug Stores (1.33%) 61,800 Walgreen Co. 2,344,537 ------------ Retail - Super/Mini-Markets (1.26%) 47,610 Safeway, Inc.* 2,222,791 ------------ Retail/Wholesale Computers/Cellular (0.73%) 20,000 RadioShack Corp. 1,292,500 ------------ Telecommunications - Equipment (5.27%) 11,010 Corning, Inc. 3,269,970 35,000 Lucent Technologies, Inc. 1,069,687 48,000 Motorola, Inc. 1,356,000 36,080 Nokia Corp. - Spon. ADR 1,436,435 18,000 Nortel Networks Corp. 1,072,125 15,600 QUALCOMM, Inc.* 1,111,500 ------------ 9,315,717 ------------ Telecommunications - Services (2.78%) 75,640 Qwest Communications International, Inc.* 3,635,447 42,000 Worldcom, Inc.* 1,275,750 ------------ 4,911,197 ------------ Utility - Electric Power (1.40%) 50,000 Constellation Energy Group, Inc. 2,487,500 ------------ Utility - Telephone (1.18%) 40,000 ALLTEL Corp. 2,087,500 ------------ Total Common Stock (Cost $91,695,198) 111,395,298 ------------
49 Berger Funds 49 Berger Funds o September 30, 2000 Combined Annual Report Berger Balanced Fund - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS
September 30, 2000 ------------------ Par Value Value - --------- ------------------ Corporate Debt - Non-Convertible (12.29%) Banks - Foreign (0.90%) $1,600,000 Barclays Bank PLC - 5.95%, 7/15/2001 $ 1,589,203 ------------ Banks - Super Regional (1.72%) 3,000,000 Wells Fargo & Co. - 7.25%, 8/24/2005 3,039,279 ------------ Computer - Manufacturers (1.09%) 2,000,000 IBM Corp. - 5.625%, 4/12/2004 1,931,450 ------------ Finance - Consumer/Commercial Loans (3.90%) 2,000,000 Boeing Capital Corp. - 6.21%, 8/15/2003 1,956,900 2,000,000 Ford Motor Credit Corp. - 6.125%, 4/28/2003 1,956,846 2,000,000 General Electric Capital Corp. - 5.89%, 5/11/2001 1,991,244 1,000,000 General Motors Acceptance Corp. - 5.60%, 4/30/2002 981,566 ------------ 6,886,556 ------------ Finance - Investment Brokers (1.43%) 1,045,000 Bear Stearns Co., Inc. - 6.50%, 8/1/2002 1,037,410 1,000,000 Merrill Lynch & Co. - 5.71%, 1/15/2002 986,408 500,000 Merrill Lynch & Co. - 6.02%, 5/11/2001 498,065 ------------ 2,521,883 ------------ Finance - Investment Management (1.15%) 2,000,000 Morgan Stanley Dean Witter & Co. - 8.10%, 6/24/2002 2,041,798 ------------ Insurance - Diversified (0.72%) 1,275,000 Transamerica Financial Corp. - 6.125%, 11/1/2001 1,264,300 ------------ Medical - Drugs/Diversified (1.11%) 2,000,000 Warner Lambert Co. - 5.75%, 1/15/2003 1,963,462 ------------ Retail - Super/Mini-Markets (0.27%) 500,000 Albertson's, Inc. - 6.55%, 8/1/2004 483,951 ------------ Total Corporate Debt - Non-Convertible (Cost $22,135,764) 21,721,882 ------------ September 30, 2000 ------------------ Shares/Par Value Value - ---------------- ------------------ Preferred Stock - Convertible (0.27%) Utility - Electric Power (0.27%) 10,200 TXU Corp., 9.25% $ 476,212 ------------ Total Preferred Stock - Convertible (Cost $510,000) 476,212 ------------ U.S. Government Agency Obligations (18.74%) $15,000,000 FHLMC Discount Note - 6.25%, 7/15/2004 14,869,515 5,000,000 FNMA Discount Note - 5.75%, 4/15/2003 4,915,355 5,000,000 FNMA Discount Note - 7.125%, 2/15/2005 5,111,920 8,000,000 FNMA Discount Note - 7.40%, 7/1/2004 8,232,704 ------------ Total U.S. Government Agency Obligations (Cost $32,432,689) 33,129,494 ------------ U.S. Treasury Notes (3.33%) $2,000,000 U.S. Treasury Note - 4.25%, 11/15/2003 1,904,376 4,000,000 U.S. Treasury Note - 5.75%, 8/15/2003 3,980,000 ------------ Total U.S. Treasury Notes (Cost $5,839,554) 5,884,376 ------------ Repurchase Agreement (1.77%) $3,134,000 State Street Repurchase Agreement, 6.32% dated September 29, 2000, to be repurchased at $3,135,651 on October 2, 2000, collateralized by FNMA Agency Note, 6.40% - September 27, 2001 with a value of $3,199,926 $ 3,134,000 ------------ Total Repurchase Agreement (Cost $3,134,000) 3,134,000 ------------ Total Investments (Cost $155,747,205) (99.40%) 175,741,262 Total Other Assets, Less Liabilities (0.60%) 1,056,471 ------------ Net Assets (100.00%) $176,797,733 ------------
* Non-income producing security. ADR - American Depositary Receipt. FHLMC - Federal Home Loan Mortgage Corp. FNMA - Federal National Mortgage Association. PLC - Public Limited Company. See notes to financial statements. 50 50 Berger Funds o September 30, 2000 Combined Annual Report Financial Statements - -------------------------------------------------------------------------------- Statements of Assets and Liabilities
Berger Berger Information New Generation Berger September 30, 2000 Technology Fund Fund Select Fund - ------------------ --------------- --------------- --------------- Assets Investments, at cost $ 87,217,749 $ 732,099,672 $ 90,323,388 --------------- --------------- --------------- Investments, at value $ 133,480,019 $ 867,896,047 $ 120,714,477 Cash 632,234 1,471,559 88,186 Receivables Investment securities sold -- 10,954,703 -- Fund shares sold 309,613 9,739,283 2,018,607 Dividends 3,212 53,894 64,250 Interest 2,183 50,219 1,930 Due from Advisor -- -- -- Investment held as collateral for securities loaned 12,941,691 211,786,170 21,840,676 Deferred organization costs 5,612 -- -- --------------- --------------- --------------- Total Assets 147,374,564 1,101,951,875 144,728,126 --------------- --------------- --------------- Liabilities Payables Investment securities purchased 498,950 21,816,690 260,815 Fund shares redeemed 46,517 6,389,465 161,920 Collateral on securities loaned 12,941,691 211,786,170 21,840,676 Accrued investment advisory fees 91,923 575,499 72,423 Accrued custodian and accounting fees 2,940 13,773 2,228 Accrued transfer agent fees 21,064 67,623 20,068 Accrued 12b-1 fees 14,942 172,133 24,141 Accrued audit fees 9,985 13,685 12,285 Accrued shareholder reporting fees 2,691 64,251 2,151 Other accrued expenses 4,992 1,651 174 --------------- --------------- --------------- Total Liabilities 13,635,695 240,900,940 22,396,881 --------------- --------------- --------------- Net Assets Applicable to Shares Outstanding $ 133,738,869 $ 861,050,935 $ 122,331,245 --------------- --------------- --------------- Components of Net Assets Capital (par value and paid in surplus) $ 89,070,139 $ 560,619,696 $ 63,286,014 Undistributed net investment income/(Accumulated net investment loss) (1,192) (27,673) (5,507) Undistributed net realized gain (loss) on securities and foreign currency transactions (1,592,348) 164,662,537 28,659,649 Net unrealized appreciation on securities and foreign currency transactions 46,262,270 135,796,375 30,391,089 --------------- --------------- --------------- $ 133,738,869 $ 861,050,935 $ 122,331,245 --------------- --------------- --------------- Shares Outstanding 7,586,159(1) 22,666,462 4,844,826 --------------- --------------- --------------- Shares Authorized (par value $0.01) Unlimited Unlimited Unlimited --------------- --------------- --------------- Net Asset Value, Offering and Redemption Price Per Share N/A N/A $ 25.25 --------------- --------------- --------------- Net Assets: Investor Shares $ 72,173,334 $ 853,153,818 N/A --------------- --------------- --------------- Institutional Shares $ 61,565,535 $ 7,897,117 N/A --------------- --------------- --------------- Shares Outstanding: Investor Shares 4,102,042(1) 22,456,846 N/A --------------- --------------- --------------- Institutional Shares 3,484,117(1) 209,616 N/A --------------- --------------- --------------- Net Asset Value, Offering and Redemption Price Per Share: Investor Shares $ 17.59(1) $ 37.99 N/A --------------- --------------- --------------- Institutional Shares $ 17.67(1) $ 37.67 N/A --------------- --------------- ---------------
(1) Amounts adjusted to reflect a 7-for-1 share split, effective October 17, 2000 (See Note 7). See notes to financial statements. 51 Financial Statements 51 Berger Funds o September 30, 2000 Combined Annual Report - --------------------------------------------------------------------------------
Berger Berger Berger Small Company Small Cap Mid Cap September 30, 2000 Growth Fund Value Fund Growth Fund - ------------------ --------------- --------------- --------------- Assets Investments, at cost $ 1,064,178,598 $ 1,617,623,425 $ 101,865,910 --------------- --------------- --------------- Investments, at value $ 1,456,551,310 $ 1,732,653,688 $ 122,611,346 Cash 562,885 390,047 48,743 Receivables Investment securities sold 50,682,427 6,527,445 1,796,051 Fund shares sold 25,283,882 7,505,539 425,319 Dividends 7,399 1,186,187 978 Interest 20,237 27,407 1,970 Due from Advisor -- 42,609 -- Investment held as collateral for securities loaned 276,332,924 -- 31,322,911 Deferred organization costs -- -- -- --------------- --------------- --------------- Total Assets 1,809,441,064 1,748,332,922 156,207,318 --------------- --------------- --------------- Liabilities Payables Investment securities purchased 43,166,549 22,425,070 2,125,236 Fund shares redeemed 13,741,833 3,183,874 69,713 Collateral on securities loaned 276,332,924 -- 31,322,911 Accrued investment advisory fees 952,854 1,105,846 74,125 Accrued custodian and accounting fees 22,615 26,095 1,970 Accrued transfer agent fees 200,420 42,259 12,635 Accrued 12b-1 fees 296,548 177,538 24,709 Accrued audit fees 16,285 16,285 10,985 Accrued shareholder reporting fees 281,873 5,311 561 Other accrued expenses 2,339 2,313 177 --------------- --------------- --------------- Total Liabilities 335,014,240 26,984,591 33,643,022 --------------- --------------- --------------- Net Assets Applicable to Shares Outstanding $ 1,474,426,824 $ 1,721,348,331 $ 122,564,296 --------------- --------------- --------------- Components of Net Assets Capital (par value and paid in surplus) $ 781,729,532 $ 1,454,941,352 $ 84,525,990 Undistributed net investment income/(Accumulated net investment loss) (124,093) 18,669,230 (1,744) Undistributed net realized gain (loss) on securities and foreign currency transactions 300,448,673 132,707,486 17,294,614 Net unrealized appreciation on securities and foreign currency transactions 392,372,712 115,030,263 20,745,436 --------------- --------------- --------------- $ 1,474,426,824 $ 1,721,348,331 $ 122,564,296 --------------- --------------- --------------- Shares Outstanding 198,394,425 69,346,467 2,970,142 --------------- --------------- --------------- Shares Authorized (par value $0.01) Unlimited Unlimited Unlimited --------------- --------------- --------------- Net Asset Value, Offering and Redemption Price Per Share N/A N/A $ 41.27 --------------- --------------- --------------- Net Assets: Investor Shares $ 1,468,540,704 $ 859,030,375 N/A --------------- --------------- --------------- Institutional Shares $ 5,886,120 $ 862,317,956 N/A --------------- --------------- --------------- Shares Outstanding: Investor Shares 197,602,732 34,671,489 N/A --------------- --------------- --------------- Institutional Shares 791,693 34,674,978 N/A --------------- --------------- --------------- Net Asset Value, Offering and Redemption Price Per Share: Investor Shares $ 7.43 $ 24.78 N/A --------------- --------------- --------------- Institutional Shares $ 7.43 $ 24.87 N/A --------------- --------------- ---------------
Berger Berger Mid Cap Berger Growth and September 30, 2000 Value Fund Growth Fund Income Fund - ------------------ --------------- --------------- --------------- Assets Investments, at cost $ 29,592,443 $ 1,322,725,934 $ 521,710,002 --------------- --------------- --------------- Investments, at value $ 33,180,441 $ 1,954,162,643 $ 727,898,496 Cash 98,010 95,501 4,902,520 Receivables Investment securities sold 1,226,563 -- -- Fund shares sold 70,690 605,262 1,332,036 Dividends 44,420 106,495 384,322 Interest 521 9,407 743,482 Due from Advisor -- -- -- Investment held as collateral for securities loaned 9,270,659 -- -- Deferred organization costs -- -- -- --------------- --------------- --------------- Total Assets 43,891,304 1,954,979,308 735,260,856 --------------- --------------- --------------- Liabilities Payables Investment securities purchased 1,530,180 4,530,701 9,091,027 Fund shares redeemed 29,259 733,906 150,776 Collateral on securities loaned 9,270,659 -- -- Accrued investment advisory fees 20,271 1,086,894 428,956 Accrued custodian and accounting fees 939 28,754 10,890 Accrued transfer agent fees 9,157 333,141 125,714 Accrued 12b-1 fees 6,758 395,117 146,105 Accrued audit fees 10,685 22,318 15,685 Accrued shareholder reporting fees 577 73,168 18,193 Other accrued expenses 44 2,826 1,013 --------------- --------------- --------------- Total Liabilities 10,878,529 7,206,825 9,988,359 --------------- --------------- --------------- Net Assets Applicable to Shares Outstanding $ 33,012,775 $ 1,947,772,483 $ 725,272,497 --------------- --------------- --------------- Components of Net Assets Capital (par value and paid in surplus) $ 24,515,021 $ 1,052,076,878 $ 441,663,632 Undistributed net investment income/(Accumulated net investment loss) 175,087 (347,362) (64,921) Undistributed net realized gain (loss) on securities and foreign currency transactions 4,734,669 264,606,258 77,485,292 Net unrealized appreciation on securities and foreign currency transactions 3,587,998 631,436,709 206,188,494 --------------- --------------- --------------- $ 33,012,775 $ 1,947,772,483 $ 725,272,497 --------------- --------------- --------------- Shares Outstanding 2,287,592 93,328,114 33,881,737 --------------- --------------- --------------- Shares Authorized (par value $0.01) Unlimited 200,000,000 100,000,000 --------------- --------------- --------------- Net Asset Value, Offering and Redemption Price Per Share $ 14.43 $ 20.87 $ 21.41 --------------- --------------- --------------- Net Assets: Investor Shares N/A N/A N/A --------------- --------------- --------------- Institutional Shares N/A N/A N/A --------------- --------------- --------------- Shares Outstanding: Investor Shares N/A N/A N/A --------------- --------------- --------------- Institutional Shares N/A N/A N/A --------------- --------------- --------------- Net Asset Value, Offering and Redemption Price Per Share: Investor Shares N/A N/A N/A --------------- --------------- --------------- Institutional Shares N/A N/A N/A --------------- --------------- ---------------
Berger Balanced September 30, 2000 Fund - ------------------ --------------- Assets Investments, at cost $ 155,747,205 --------------- Investments, at value $ 175,741,262 Cash 883 Receivables Investment securities sold 2,189,874 Fund shares sold 434,260 Dividends 66,687 Interest 913,342 Due from Advisor -- Investment held as collateral for securities loaned 1,046,640 Deferred organization costs -- --------------- Total Assets 180,392,948 --------------- Liabilities Payables Investment securities purchased 2,205,156 Fund shares redeemed 172,774 Collateral on securities loaned 1,046,640 Accrued investment advisory fees 101,646 Accrued custodian and accounting fees 3,086 Accrued transfer agent fees 14,904 Accrued 12b-1 fees 36,301 Accrued audit fees 12,285 Accrued shareholder reporting fees 2,169 Other accrued expenses 254 --------------- Total Liabilities 3,595,215 --------------- Net Assets Applicable to Shares Outstanding $ 176,797,733 --------------- Components of Net Assets Capital (par value and paid in surplus) $ 137,504,359 Undistributed net investment income/(Accumulated net investment loss) 160,081 Undistributed net realized gain (loss) on securities and foreign currency transactions 19,139,236 Net unrealized appreciation on securities and foreign currency transactions 19,994,057 --------------- $ 176,797,733 --------------- Shares Outstanding 9,124,276 --------------- Shares Authorized (par value $0.01) Unlimited --------------- Net Asset Value, Offering and Redemption Price Per Share $ 19.38 --------------- Net Assets: Investor Shares N/A --------------- Institutional Shares N/A --------------- Shares Outstanding: Investor Shares N/A --------------- Institutional Shares N/A --------------- Net Asset Value, Offering and Redemption Price Per Share: Investor Shares N/A --------------- Institutional Shares N/A ---------------
52 52 Berger Funds o September 30, 2000 Combined Annual Report Financial Statements - -------------------------------------------------------------------------------- Statements of Operations
Berger Berger Information New Generation Berger For the Year Ended September 30, 2000 Technology Fund Fund Select Fund - ------------------------------------- --------------- -------------- ------------- Investment Income Income Dividends $ 44,719 $ 202,879 $ 107,905 Interest 158,887 303,366 319,866 Securities lending income 63,988 771,214 116,672 ------------- ------------- ------------- Total Income 267,594 1,277,459 544,443 ------------- ------------- ------------- Expenses Investment advisory fees 848,717 6,068,735 998,698 Accounting fees 26,170 96,611 19,209 Custodian fees 14,887 61,276 10,103 Transfer agent fees 151,528 720,920 145,136 Registration fees 66,428 102,550 41,044 12b-1 fees (Investor Shares or single-class funds only) 114,997 1,809,687 332,899 Audit fees 16,725 20,725 18,725 Legal fees 2,076 16,735 3,364 Directors'/Trustees' fees and expenses 5,344 38,629 7,401 Shareholder reporting fees 56,587 300,279 57,459 Amortization of deferred organization costs 3,711 -- -- Interest expense 366 198,388 5,884 Other expenses 1,831 14,937 3,258 ------------- ------------- ------------- Gross Expenses 1,309,367 9,449,472 1,643,180 Less fees waived by Advisor -- (14,052) -- Less fees paid indirectly -- (1,575) (12,097) Less earnings credits (7,787) (58,915) (11,403) ------------- ------------- ------------- Net Expenses 1,301,580 9,374,930 1,619,680 ------------- ------------- ------------- Net Investment Income (Loss) (1,033,986) (8,097,471) (1,075,237) ------------- ------------- ------------- Net Realized and Unrealized Gain on Securities and Foreign Currency Transactions Net realized gain (loss) on securities and foreign currency transactions (1,565,150) 177,147,820 29,900,230 Net realized gain on distributions from investment companies -- -- -- Net change in unrealized appreciation on securities and foreign currency transactions 38,489,519 63,212,050 22,159,622 ------------- ------------- ------------- Net Realized and Unrealized Gain on Securities and Foreign Currency Transactions 36,924,369 240,359,870 52,059,852 ------------- ------------- ------------- Net Increase in Net Assets Resulting from Operations $ 35,890,383 $ 232,262,399 $ 50,984,615 ------------- ------------- ------------- Foreign taxes withheld $ 1,828 -- $ 529 ------------- ------------- -------------
See notes to financial statements. 53 Financial Statements 53 Berger Funds o September 30, 2000 Combined Annual Report - --------------------------------------------------------------------------------
Berger Berger Berger Small Company Small Cap Mid Cap For the Year Ended September 30, 2000 Growth Fund Value Fund Growth Fund - ------------------------------------- ------------- ------------- ------------- Investment Income Income Dividends $ 137,482 $ 27,840,458 $ 30,069 Interest 4,698,516 7,000,007 291,497 Securities lending income 655,051 -- 100,624 ------------- ------------- ------------- Total Income 5,491,049 34,840,465 422,190 ------------- ------------- ------------- Expenses Investment advisory fees 10,139,725 9,858,372 726,893 Accounting fees 144,531 147,211 16,457 Custodian fees 105,532 118,218 15,252 Transfer agent fees 1,428,657 432,055 124,115 Registration fees 110,386 248,956 36,430 12b-1 fees (Investor Shares or single-class funds only) 3,123,553 1,544,027 242,298 Audit fees 24,725 24,725 16,725 Legal fees 29,094 34,306 1,998 Directors'/Trustees' fees and expenses 66,075 64,981 5,313 Shareholder reporting fees 690,588 235,562 43,496 Amortization of deferred organization costs -- -- -- Interest expense 42,268 25,663 16,669 Other expenses 25,497 22,036 1,030 ------------- ------------- ------------- Gross Expenses 15,930,631 12,756,112 1,246,676 Less fees waived by Advisor (13,851) (224,272) -- Less fees paid indirectly -- -- -- Less earnings credits (104,514) (82,378) (11,538) ------------- ------------- ------------- Net Expenses 15,812,266 12,449,462 1,235,138 ------------- ------------- ------------- Net Investment Income (Loss) (10,321,217) 22,391,003 (812,948) ------------- ------------- ------------- Net Realized and Unrealized Gain on Securities and Foreign Currency Transactions Net realized gain (loss) on securities and foreign currency transactions 325,582,758 131,799,172 18,335,737 Net realized gain on distributions from investment companies -- -- -- Net change in unrealized appreciation on securities and foreign currency transactions 245,661,268 95,023,362 17,019,658 ------------- ------------- ------------- Net Realized and Unrealized Gain on Securities and Foreign Currency Transactions 571,244,026 226,822,534 35,355,395 ------------- ------------- ------------- Net Increase in Net Assets Resulting from Operations $ 560,922,809 $ 249,213,537 $ 34,542,447 ------------- ------------- ------------- Foreign taxes withheld -- -- -- ------------- ------------- -------------
Berger Berger Mid Cap Berger Growth and For the Year Ended September 30, 2000 Value Fund Growth Fund Income Fund - ------------------------------------- ------------- ------------- ------------- Investment Income Income Dividends $ 508,045 $ 3,258,462 $ 2,985,313 Interest 67,046 1,269,005 2,951,976 Securities lending income 9,852 -- -- ------------- ------------- ------------- Total Income 584,943 4,527,467 5,937,289 ------------- ------------- ------------- Expenses Investment advisory fees 191,402 12,518,985 4,361,730 Accounting fees 15,542 183,096 65,512 Custodian fees 18,565 128,123 49,533 Transfer agent fees 55,510 2,016,091 628,806 Registration fees 26,033 45,617 58,532 12b-1 fees (Investor Shares or single-class funds only) 63,801 4,526,533 1,468,475 Audit fees 16,225 33,725 23,725 Legal fees 676 45,994 15,130 Directors'/Trustees' fees and expenses 1,396 101,100 32,304 Shareholder reporting fees 16,003 767,118 226,201 Amortization of deferred organization costs -- -- -- Interest expense 712 54,544 22,208 Other expenses 842 52,710 14,489 ------------- ------------- ------------- Gross Expenses 406,707 20,473,636 6,966,645 Less fees waived by Advisor -- -- -- Less fees paid indirectly -- (26,357) (7,151) Less earnings credits (6,085) (109,575) (52,008) ------------- ------------- ------------- Net Expenses 400,622 20,337,704 6,907,486 ------------- ------------- ------------- Net Investment Income (Loss) 184,321 (15,810,237) (970,197) ------------- ------------- ------------- Net Realized and Unrealized Gain on Securities and Foreign Currency Transactions Net realized gain (loss) on securities and foreign currency transactions 4,847,820 285,513,582 80,409,828 Net realized gain on distributions from investment companies 20,100 -- -- Net change in unrealized appreciation on securities and foreign currency transactions 1,477,900 511,850,542 135,808,985 ------------- ------------- ------------- Net Realized and Unrealized Gain on Securities and Foreign Currency Transactions 6,345,820 797,364,124 216,218,813 ------------- ------------- ------------- Net Increase in Net Assets Resulting from Operations $ 6,530,141 $ 781,553,887 $ 215,248,616 ------------- ------------- ------------- Foreign taxes withheld $ 797 $ 123,439 $ 101,520 ------------- ------------- -------------
Berger Balanced For the Year Ended September 30, 2000 Fund - ------------------------------------- ------------- Investment Income Income Dividends $ 598,237 Interest 3,649,733 Securities lending income 48,931 ------------- Total Income 4,296,901 ------------- Expenses Investment advisory fees 1,151,278 Accounting fees 22,848 Custodian fees 13,555 Transfer agent fees 139,136 Registration fees 42,062 12b-1 fees (Investor Shares or single-class funds only) 411,171 Audit fees 18,725 Legal fees 4,163 Directors'/Trustees' fees and expenses 9,242 Shareholder reporting fees 56,007 Amortization of deferred organization costs -- Interest expense 3,984 Other expenses 3,397 ------------- Gross Expenses 1,875,568 Less fees waived by Advisor -- Less fees paid indirectly (6,318) Less earnings credits (12,512) ------------- Net Expenses 1,856,738 ------------- Net Investment Income (Loss) 2,440,163 ------------- Net Realized and Unrealized Gain on Securities and Foreign Currency Transactions Net realized gain (loss) on securities and foreign currency transactions 20,090,218 Net realized gain on distributions from investment companies -- Net change in unrealized appreciation on securities and foreign currency transactions 13,290,443 ------------- Net Realized and Unrealized Gain on Securities and Foreign Currency Transactions 33,380,661 ------------- Net Increase in Net Assets Resulting from Operations $ 35,820,824 ------------- Foreign taxes withheld $ 6,435 -------------
54 54 Berger Funds o September 30, 2000 Combined Annual Report Financial Statements - -------------------------------------------------------------------------------- Statements of Changes in Net Assets
Berger Information Technology Fund --------------------------------------------------- Year Ended Period from Year Ended September 30, March 1, 1999 to February 28, 2000 September 30, 1999 1999 --------------- ------------------ --------------- From Operations Net investment income (loss) $ (1,033,986) $ (131,128) $ (85,891) Net realized gain (loss) on securities and foreign currency transactions (1,565,150) 388,198 123,091 Net realized gain on futures contracts -- -- -- Net realized gain on distributions from investment companies -- -- -- Net change in unrealized appreciation on securities and foreign currency transactions 38,489,519 4,446,738 2,901,441 --------------- --------------- --------------- Net Increase in Net Assets Resulting from Operations 35,890,383 4,703,808 2,938,641 --------------- --------------- --------------- From Dividends and Distributions to Shareholders Dividends 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 securities and foreign currency transactions: Investor Shares and single-class Funds only -- -- -- Institutional Shares -- (240,971) -- Distributions in excess of net realized gains on securities and foreign currency transactions: Investor Shares and single-class Funds only (72,678) -- -- Institutional Shares (153,075) -- -- --------------- --------------- --------------- Net Decrease in Net Assets from Dividends and Distributions to Shareholders (225,753) (240,971) -- --------------- --------------- --------------- From Fund Share Transactions (Note 5) Proceeds from shares sold 119,071,235 9,473,739 8,406,475 Net asset value of shares issued in reinvestment of dividends and distributions 225,245 240,876 -- Payments for shares redeemed (46,127,009) (1,718,686) (1,572,857) --------------- --------------- --------------- Net Increase (Decrease) in Net Assets Derived from Fund Share Transactions 73,169,471 7,995,929 6,833,618 --------------- --------------- --------------- Net Increase in Net Assets 108,834,101 12,458,766 9,772,259 Net Assets Beginning of period 24,904,768 12,446,002 2,673,743 --------------- --------------- --------------- End of period $ 133,738,869 $ 24,904,768 $ 12,446,002 --------------- --------------- --------------- Undistributed net investment income/(Accumulated net investment loss) $ (1,192) -- -- --------------- --------------- --------------- Transactions in Fund Shares(1) (Note 5) Shares sold 7,431,977 1,276,247 1,633,989 Shares issued to shareholders in reinvestment of dividends and distributions 14,252 31,528 -- Shares redeemed (2,893,562) (238,112) (290,955) --------------- --------------- --------------- Net Increase (Decrease) in Shares 4,552,667 1,069,663 1,343,034 Shares outstanding, beginning of period 3,033,492 1,963,829 620,795 --------------- --------------- --------------- Shares outstanding, end of period 7,586,159 3,033,492 1,963,829 --------------- --------------- ---------------
(1) Share data for Berger Information Technology Fund have been adjusted to reflect a 7-for-1 share split, effective October 17, 2000 (See Note 7). See notes to financial statements. 55 Financial Statements 55 Berger Funds o September 30, 2000 Combined Annual Report - --------------------------------------------------------------------------------
Berger New Generation Fund --------------------------------- Years Ended September 30, 2000 1999 --------------- --------------- From Operations Net investment income (loss) $ (8,097,471) $ (2,457,353) Net realized gain (loss) on securities and foreign currency transactions 177,147,820 70,131,198 Net realized gain on futures contracts -- -- Net realized gain on distributions from investment companies -- -- Net change in unrealized appreciation on securities and foreign currency transactions 63,212,050 62,553,374 --------------- --------------- Net Increase in Net Assets Resulting from Operations 232,262,399 130,227,219 --------------- --------------- From Dividends and Distributions to Shareholders Dividends 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 securities and foreign currency transactions: Investor Shares and single-class Funds only (71,664,764) (4,495,277) Institutional Shares (146,231) -- Distributions in excess of net realized gains on securities and foreign currency transactions: Investor Shares and single-class Funds only -- -- Institutional Shares -- -- --------------- --------------- Net Decrease in Net Assets from Dividends and Distributions to Shareholders (71,810,995) (4,495,277) --------------- --------------- From Fund Share Transactions (Note 5) Proceeds from shares sold 946,576,329 266,445,474 Net asset value of shares issued in reinvestment of dividends and distributions 67,721,581 4,318,823 Payments for shares redeemed (644,983,039) (178,904,170) --------------- --------------- Net Increase (Decrease) in Net Assets Derived from Fund Share Transactions 369,314,871 91,860,127 --------------- --------------- Net Increase in Net Assets 529,766,275 217,592,069 Net Assets Beginning of period 331,284,660 113,692,591 --------------- --------------- End of period $ 861,050,935 $ 331,284,660 --------------- --------------- Undistributed net investment income/(Accumulated net investment loss) $ (27,673) $ (17,460) --------------- --------------- Transactions in Fund Shares(1) (Note 5) Shares sold 25,633,117 12,508,663 Shares issued to shareholders in reinvestment of dividends and distributions 1,991,235 305,888 Shares redeemed (17,811,606) (8,938,999) --------------- --------------- Net Increase (Decrease) in Shares 9,812,746 3,875,552 Shares outstanding, beginning of period 12,853,716 8,978,164 --------------- --------------- Shares outstanding, end of period 22,666,462 12,853,716 --------------- ---------------
Berger Select Fund --------------------------------- Years Ended September 30, 2000 1999 --------------- --------------- From Operations Net investment income (loss) $ (1,075,237) $ 267,758 Net realized gain (loss) on securities and foreign currency transactions 29,900,230 26,109,272 Net realized gain on futures contracts -- 613,845 Net realized gain on distributions from investment companies -- -- Net change in unrealized appreciation on securities and foreign currency transactions 22,159,622 8,283,724 --------------- --------------- Net Increase in Net Assets Resulting from Operations 50,984,615 35,274,599 --------------- --------------- From Dividends and Distributions to Shareholders Dividends 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 (120,494) (102,138) Distributions from net realized gains on securities and foreign currency transactions: Investor Shares and single-class Funds only (24,429,656) (4,692,942) Institutional Shares -- -- Distributions in excess of net realized gains on securities and foreign currency transactions: Investor Shares and single-class Funds only -- -- Institutional Shares -- -- --------------- --------------- Net Decrease in Net Assets from Dividends and Distributions to Shareholders (24,550,150) (5,062,839) --------------- --------------- From Fund Share Transactions (Note 5) Proceeds from shares sold 69,127,672 135,890,110 Net asset value of shares issued in reinvestment of dividends and distributions 23,772,870 4,474,373 Payments for shares redeemed (98,355,421) (110,795,590) --------------- --------------- Net Increase (Decrease) in Net Assets Derived from Fund Share Transactions (5,454,879) 29,568,893 --------------- --------------- Net Increase in Net Assets 20,979,586 59,780,653 Net Assets Beginning of period 101,351,659 41,571,006 --------------- --------------- End of period $ 122,331,245 $ 101,351,659 --------------- --------------- Undistributed net investment income/(Accumulated net investment loss) $ (5,507) $ 113,316 --------------- --------------- Transactions in Fund Shares(1) (Note 5) Shares sold 2,789,149 8,477,635 Shares issued to shareholders in reinvestment of dividends and distributions 969,530 290,230 Shares redeemed (4,200,334) (6,617,655) --------------- --------------- Net Increase (Decrease) in Shares (441,655) 2,150,210 Shares outstanding, beginning of period 5,286,481 3,136,271 --------------- --------------- Shares outstanding, end of period 4,844,826 5,286,481 --------------- ---------------
Berger Small Company Growth Fund --------------------------------- Years Ended September 30, 2000 1999 --------------- --------------- From Operations Net investment income (loss) $ (10,321,217) $ (7,513,231) Net realized gain (loss) on securities and foreign currency transactions 325,582,758 189,375,085 Net realized gain on futures contracts -- -- Net realized gain on distributions from investment companies -- -- Net change in unrealized appreciation on securities and foreign currency transactions 245,661,268 119,733,366 --------------- --------------- Net Increase in Net Assets Resulting from Operations 560,922,809 301,595,220 --------------- --------------- From Dividends and Distributions to Shareholders Dividends 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 securities and foreign currency transactions: Investor Shares and single-class Funds only (193,050,831) (105,864,218) Institutional Shares (107,996) -- Distributions in excess of net realized gains on securities and foreign currency transactions: Investor Shares and single-class Funds only -- -- Institutional Shares -- -- --------------- --------------- Net Decrease in Net Assets from Dividends and Distributions to Shareholders (193,158,827) (105,864,218) --------------- --------------- From Fund Share Transactions (Note 5) Proceeds from shares sold 1,359,540,857 237,959,062 Net asset value of shares issued in reinvestment of dividends and distributions 189,000,774 102,148,841 Payments for shares redeemed (1,117,515,779) (421,943,412) --------------- --------------- Net Increase (Decrease) in Net Assets Derived from Fund Share Transactions 431,025,852 (81,835,509) --------------- --------------- Net Increase in Net Assets 798,789,834 113,895,493 Net Assets Beginning of period 675,636,990 561,741,497 --------------- --------------- End of period $ 1,474,426,824 $ 675,636,990 --------------- --------------- Undistributed net investment income/(Accumulated net investment loss) $ (124,093) $ (84,091) --------------- --------------- Transactions in Fund Shares(1) (Note 5) Shares sold 188,217,874 59,395,752 Shares issued to shareholders in reinvestment of dividends and distributions 30,337,350 30,583,466 Shares redeemed (159,164,729) (106,782,836) --------------- --------------- Net Increase (Decrease) in Shares 59,390,495 (16,803,618) Shares outstanding, beginning of period 139,003,930 155,807,548 --------------- --------------- Shares outstanding, end of period 198,394,425 139,003,930 --------------- ---------------
Berger Small Cap Value Fund --------------------------------- Years Ended September 30, 2000 1999 --------------- --------------- From Operations Net investment income (loss) $ 22,391,003 $ 6,803,460 Net realized gain (loss) on securities and foreign currency transactions 131,799,172 11,471,038 Net realized gain on futures contracts -- -- Net realized gain on distributions from investment companies 557,430 Net change in unrealized appreciation on securities and foreign currency transactions 95,023,362 42,568,780 --------------- --------------- Net Increase in Net Assets Resulting from Operations 249,213,537 61,400,708 --------------- --------------- From Dividends and Distributions to Shareholders Dividends from net investment income: Investor Shares and single-class Funds only (4,123,328) (554,980) Institutional Shares (5,601,904) (1,033,592) Distributions in excess of net investment income: Investor Shares and single-class Funds only -- -- Distributions from net realized gains on securities and foreign currency transactions: Investor Shares and single-class Funds only (4,761,704) (6,307,111) Institutional Shares (5,368,562) (4,874,484) Distributions in excess of net realized gains on securities and foreign currency transactions: Investor Shares and single-class Funds only -- -- Institutional Shares -- -- --------------- --------------- Net Decrease in Net Assets from Dividends and Distributions to Shareholders (19,855,498) (12,770,167) --------------- --------------- From Fund Share Transactions (Note 5) Proceeds from shares sold 1,093,487,869 740,240,947 Net asset value of shares issued in reinvestment of dividends and distributions 15,420,635 9,947,049 Payments for shares redeemed (405,327,916) (211,660,639) --------------- --------------- Net Increase (Decrease) in Net Assets Derived from Fund Share Transactions 703,580,588 538,527,357 --------------- --------------- Net Increase in Net Assets 932,938,627 587,157,898 Net Assets Beginning of period 788,409,704 201,251,806 --------------- --------------- End of period $ 1,721,348,331 $ 788,409,704 --------------- --------------- Undistributed net investment income/(Accumulated net investment loss) $ 18,669,230 $ 6,759,547 --------------- --------------- Transactions in Fund Shares(1) (Note 5) Shares sold 49,373,113 36,191,725 Shares issued to shareholders in reinvestment of dividends and distributions 735,730 532,011 Shares redeemed (18,359,280) (10,560,918) --------------- --------------- Net Increase (Decrease) in Shares 31,749,563 26,162,818 Shares outstanding, beginning of period 37,596,904 11,434,086 --------------- --------------- Shares outstanding, end of period 69,346,467 37,596,904 --------------- ---------------
56 56 Berger Funds o September 30, 2000 Combined Annual Report Financial Statements - -------------------------------------------------------------------------------- Statements of Changes in Net Assets
Berger Mid Cap Growth Fund --------------------------------- Years Ended September 30, 2000 1999 --------------- --------------- From Operations Net investment income (loss) $ (812,948) $ (121,812) Net realized gain on securities and foreign currency transactions 18,335,737 2,534,503 Net realized gain on futures contracts -- -- Net realized gain on distributions from investment companies -- -- Net change in unrealized appreciation on securities and foreign currency transactions 17,019,658 4,040,333 --------------- --------------- Net Increase in Net Assets Resulting from Operations 34,542,447 6,453,024 --------------- --------------- From Dividends and Distributions to Shareholders Dividends from net investment income -- -- Distributions in excess of net investment income -- -- Distributions from net realized gains on securities and foreign currency transactions (2,604,437) (87,008) --------------- --------------- Net Decrease in Net Assets from Dividends and Distributions to Shareholders (2,604,437) (87,008) --------------- --------------- From Fund Share Transactions Proceeds from shares sold 134,338,287 23,393,763 Net asset value of shares issued in reinvestment of dividends and distributions 2,525,230 84,722 Payments for shares redeemed (71,787,343) (8,577,110) --------------- --------------- Net Increase (Decrease) in Net Assets Derived from Fund Share Transactions 65,076,174 14,901,375 --------------- --------------- Net Increase in Net Assets 97,014,184 21,267,391 Net Assets Beginning of period 25,550,112 4,282,721 --------------- --------------- End of period $ 122,564,296 $ 25,550,112 --------------- --------------- Undistributed net investment income/(Accumulated net investment loss) $ (1,744) $ (405) --------------- --------------- Transactions in Fund Shares Shares sold 3,669,336 1,247,919 Shares issued to shareholders in reinvestment of dividends and distributions 70,380 6,375 Shares redeemed (1,940,540) (475,129) --------------- --------------- Net Increase (Decrease) in Shares 1,799,176 779,165 Shares outstanding, beginning of period 1,170,966 391,801 --------------- --------------- Shares outstanding, end of period 2,970,142 1,170,966 --------------- ---------------
See notes to financial statements. 57 Financial Statements 57 Berger Funds o September 30, 2000 Combined Annual Report - --------------------------------------------------------------------------------
Berger Mid Cap Value Fund --------------------------------- Years Ended September 30, 2000 1999 --------------- --------------- From Operations Net investment income (loss) $ 184,321 $ 126,159 Net realized gain on securities and foreign currency transactions 4,847,820 2,470,373 Net realized gain on futures contracts -- 116,325 Net realized gain on distributions from investment companies 20,100 62,909 Net change in unrealized appreciation on securities and foreign currency transactions 1,477,900 3,004,508 --------------- --------------- Net Increase in Net Assets Resulting from Operations 6,530,141 5,780,274 --------------- --------------- From Dividends and Distributions to Shareholders Dividends from net investment income (78,818) (116,337) Distributions in excess of net investment income -- -- Distributions from net realized gains on securities and foreign currency transactions (2,231,863) -- --------------- --------------- Net Decrease in Net Assets from Dividends and Distributions to Shareholders (2,310,681) (116,337) --------------- --------------- From Fund Share Transactions Proceeds from shares sold 16,224,571 9,641,513 Net asset value of shares issued in reinvestment of dividends and distributions 2,272,484 114,595 Payments for shares redeemed (12,621,747) (12,212,494) --------------- --------------- Net Increase (Decrease) in Net Assets Derived from Fund Share Transactions 5,875,308 (2,456,386) --------------- --------------- Net Increase in Net Assets 10,094,768 3,207,551 Net Assets Beginning of period 22,918,007 19,710,456 --------------- --------------- End of period $ 33,012,775 $ 22,918,007 --------------- --------------- Undistributed net investment income/(Accumulated net investment loss) $ 175,087 $ 69,584 --------------- --------------- Transactions in Fund Shares Shares sold 1,178,675 792,667 Shares issued to shareholders in reinvestment of dividends and distributions 187,190 10,513 Shares redeemed (961,433) (1,032,615) --------------- --------------- Net Increase (Decrease) in Shares 404,432 (229,435) Shares outstanding, beginning of period 1,883,160 2,112,595 --------------- --------------- Shares outstanding, end of period 2,287,592 1,883,160 --------------- ---------------
Berger Growth Fund --------------------------------- Years Ended September 30, 2000 1999 --------------- --------------- From Operations Net investment income (loss) $ (15,810,237) $ (5,553,325) Net realized gain on securities and foreign currency transactions 285,513,578 296,796,365 Net realized gain on futures contracts -- 4,015,058 Net realized gain on distributions from investment companies -- -- Net change in unrealized appreciation on securities and foreign currency transactions 511,850,546 181,661,229 --------------- --------------- Net Increase in Net Assets Resulting from Operations 781,553,887 476,919,327 --------------- --------------- From Dividends and Distributions to Shareholders Dividends from net investment income -- -- Distributions in excess of net investment income -- -- Distributions from net realized gains on securities and foreign currency transactions (294,401,149) (100,312,667) --------------- --------------- Net Decrease in Net Assets from Dividends and Distributions to Shareholders (294,401,149) (100,312,667) --------------- --------------- From Fund Share Transactions Proceeds from shares sold 98,534,404 125,981,311 Net asset value of shares issued in reinvestment of dividends and distributions 287,586,198 97,500,281 Payments for shares redeemed (259,294,552) (553,122,803) --------------- --------------- Net Increase (Decrease) in Net Assets Derived from Fund Share Transactions 126,826,050 (329,641,211) --------------- --------------- Net Increase in Net Assets 613,978,788 46,965,449 Net Assets Beginning of period 1,333,793,695 1,286,828,246 --------------- --------------- End of period $ 1,947,772,483 $ 1,333,793,695 --------------- --------------- Undistributed net investment income/(Accumulated net investment loss) $ (347,362) $ (241,972) --------------- --------------- Transactions in Fund Shares Shares sold 5,006,842 8,690,069 Shares issued to shareholders in reinvestment of dividends and distributions 16,039,370 7,075,507 Shares redeemed (13,463,692) (37,344,829) --------------- --------------- Net Increase (Decrease) in Shares 7,582,520 (21,579,253) Shares outstanding, beginning of period 85,745,594 107,324,847 --------------- --------------- Shares outstanding, end of period 93,328,114 85,745,594 --------------- ---------------
Berger Growth and Income Fund --------------------------------- Years Ended September 30, 2000 1999 --------------- --------------- From Operations Net investment income (loss) $ (970,197) $ (797,736) Net realized gain on securities and foreign currency transactions 80,409,828 65,478,686 Net realized gain on futures contracts -- -- Net realized gain on distributions from investment companies -- -- Net change in unrealized appreciation on securities and foreign currency transactions 135,808,985 46,438,095 --------------- --------------- Net Increase in Net Assets Resulting from Operations 215,248,616 111,119,045 --------------- --------------- From Dividends and Distributions to Shareholders Dividends from net investment income -- -- Distributions in excess of net investment income -- (257,511) Distributions from net realized gains on securities and foreign currency transactions (56,432,967) (61,153,780) --------------- --------------- Net Decrease in Net Assets from Dividends and Distributions to Shareholders (56,432,967) (61,411,291) --------------- --------------- From Fund Share Transactions Proceeds from shares sold 278,763,933 72,124,316 Net asset value of shares issued in reinvestment of dividends and distributions 54,706,474 58,191,986 Payments for shares redeemed (146,369,933) (101,997,289) --------------- --------------- Net Increase (Decrease) in Net Assets Derived from Fund Share Transactions 187,100,474 28,319,013 --------------- --------------- Net Increase in Net Assets 345,916,123 78,026,767 Net Assets Beginning of period 379,356,374 301,329,607 --------------- --------------- End of period $ 725,272,497 $ 379,356,374 --------------- --------------- Undistributed net investment income/(Accumulated net investment loss) $ (64,921) $ (64,432) --------------- --------------- Transactions in Fund Shares Shares sold 13,568,085 4,849,258 Shares issued to shareholders in reinvestment of dividends and distributions 2,939,628 4,775,021 Shares redeemed (7,387,883) (7,022,370) --------------- --------------- Net Increase (Decrease) in Shares 9,119,830 2,601,909 Shares outstanding, beginning of period 24,761,907 22,159,998 --------------- --------------- Shares outstanding, end of period 33,881,737 24,761,907 --------------- ---------------
Berger Balanced Fund --------------------------------- Years Ended September 30, 2000 1999 --------------- --------------- From Operations Net investment income (loss) $ 2,440,163 $ 1,437,031 Net realized gain on securities and foreign currency transactions 20,090,218 12,467,719 Net realized gain on futures contracts -- 75,053 Net realized gain on distributions from investment companies -- -- Net change in unrealized appreciation on securities and foreign currency transactions 13,290,443 6,836,202 --------------- --------------- Net Increase in Net Assets Resulting from Operations 35,820,824 20,816,005 --------------- --------------- From Dividends and Distributions to Shareholders Dividends from net investment income (2,346,203) (1,397,262) Distributions in excess of net investment income -- -- Distributions from net realized gains on securities and foreign currency transactions (13,392,214) (3,773,574) --------------- --------------- Net Decrease in Net Assets from Dividends and Distributions to Shareholders (15,738,417) (5,170,836) --------------- --------------- From Fund Share Transactions Proceeds from shares sold 111,347,036 170,043,914 Net asset value of shares issued in reinvestment of dividends and distributions 14,489,177 4,755,161 Payments for shares redeemed (91,887,017) (98,398,671) --------------- --------------- Net Increase (Decrease) in Net Assets Derived from Fund Share Transactions 33,949,196 76,400,404 --------------- --------------- Net Increase in Net Assets 54,031,603 92,045,573 Net Assets Beginning of period 122,766,130 30,720,557 --------------- --------------- End of period $ 176,797,733 $ 122,766,130 --------------- --------------- Undistributed net investment income/(Accumulated net investment loss) $ 160,081 $ 66,148 --------------- --------------- Transactions in Fund Shares Shares sold 5,768,094 10,911,427 Shares issued to shareholders in reinvestment of dividends and distributions 791,317 333,300 Shares redeemed (4,823,413) (6,169,658) --------------- --------------- Net Increase (Decrease) in Shares 1,735,998 5,075,069 Shares outstanding, beginning of period 7,388,278 2,313,209 --------------- --------------- Shares outstanding, end of period 9,124,276 7,388,278 --------------- ---------------
58 58 Berger Funds o September 30, 2000 Combined Annual Report Berger International Fund - -------------------------------------------------------------------------------- Statement of Assets and Liabilities
September 30, 2000 ------------------ Assets Investment in Berger International Portfolio ("Portfolio"), at value $ 35,941,281 Receivable from fund shares sold 11,764,500 ------------------ Total Assets 47,705,781 ------------------ Liabilities Payable for fund shares redeemed 9,262,437 Accrued administrative services fee 11,064 Accrued 12b-1 fees 7,537 ------------------ Total Liabilities 9,281,038 ------------------ Net Assets Applicable to Shares Outstanding $ 38,424,743 ------------------ Components of Net Assets Capital (par value and paid in surplus) $ 29,548,481 Accumulated net investment loss (48,044) Undistributed net realized gain on securities and foreign currency transactions 2,234,477 Net unrealized appreciation on securities and foreign currency transactions 6,689,829 ------------------ $ 38,424,743 ------------------ Shares Outstanding (Unlimited Shares Authorized, Par Value $0.01) 2,807,010 ------------------ Net Asset Value, Offering and Redemption Price Per Share $ 13.69 ------------------
Statement of Operations
Year Ended September 30, 2000 ------------------ Net Investment Income Allocated from Portfolio Dividends (net of foreign tax withholding of $65,034) $ 421,878 Interest 53,358 Securities lending income 14,829 Portfolio expenses (net of earnings credits totaling $7,040) (273,689) ------------------ Net Investment Income Allocated from Portfolio 216,376 ------------------ Fund Expenses Administrative services fee 95,451 Registration fees 48,633 12b-1 fees 72,719 ------------------ Total Fund Expenses 216,803 ------------------ Net Investment Loss (427) ------------------ Net Realized and Unrealized Gain on Securities and Foreign Currency Transactions Allocated from Portfolio Net realized gain on securities and foreign currency transactions 2,421,652 Net change in unrealized appreciation on securities and foreign currency transactions 859,365 ------------------ Net Realized and Unrealized Gain on Securities and Foreign Currency Transactions Allocated from Portfolio 3,281,017 ------------------ Net Increase in Net Assets Resulting from Operations $ 3,280,590 ------------------
See notes to financial statements. 59 Financial Statements 59 Berger Funds o September 30, 2000 Combined Annual Report - -------------------------------------------------------------------------------- Statements of Changes in Net Assets
Years Ended September 30, 2000 1999 - ------------------------- -------------- -------------- From Operations Net investment loss $ (427) $ (1,020) Net realized gain (loss) on securities and foreign currency transactions allocated from Portfolio 2,421,652 (480,189) Net change in unrealized appreciation on securities and foreign currency transactions allocated from Portfolio 859,365 5,758,774 -------------- -------------- Net Increase in Net Assets Resulting from Operations 3,280,590 5,277,565 -------------- -------------- From Dividends and Distributions to Shareholders Dividends from net investment income -- (768,790) Distributions in excess of net realized gains on securities and foreign currency transactions -- (31,977) -------------- --------------- Net Decrease in Net Assets from Dividends and Distributions to Shareholders -- (800,767) -------------- -------------- From Fund Share Transactions Proceeds from shares sold 308,789,618 64,254,931 Net asset value of shares issued in reinvestment of dividends and distributions -- 784,624 Payments for shares redeemed (296,659,050) (63,014,956) -------------- -------------- Net Increase in Net Assets Derived from Fund Share Transactions 12,130,568 2,024,599 -------------- -------------- Net Increase in Net Assets 15,411,158 6,501,397 Net Assets Beginning of period 23,013,585 16,512,188 -------------- -------------- End of period $ 38,424,743 $ 23,013,585 -------------- -------------- Accumulated net investment loss $ (48,044) $ (91,381) -------------- -------------- Transactions in Fund Shares Shares sold 21,602,443 5,362,766 Shares issued to shareholders in reinvestment of dividends and distributions -- 68,500 Shares redeemed (20,635,259) (5,233,010) -------------- -------------- Net Increase in Shares 967,184 198,256 Shares outstanding, beginning of period 1,839,826 1,641,570 -------------- -------------- Shares outstanding, end of period 2,807,010 1,839,826 -------------- --------------
See notes to financial statements. 60 60 Berger Funds o September 30, 2000 Combined Annual Report Notes to Financial Statements September 30, 2000 - -------------------------------------------------------------------------------- 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 Growth Fund ("Growth") (formerly Berger 100 Fund), Berger Growth and Income Fund ("BG&I"), Berger Balanced Fund ("BBAL"), and Berger International Fund ("BBIF") (formerly Berger/BIAM International Fund) (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"). Growth 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 commenced operations on August 16, 1999 and October 16, 1999, respectively. BBIF is one of three series established under the Berger Worldwide Funds Trust ("BBWF Trust") (formerly the Berger/BIAM Worldwide Funds Trust), a Delaware business trust. BBIF invests all of its investable assets in the Berger International Portfolio (the "Portfolio"), a series of Berger Worldwide Portfolios Trust ("BBWP Trust"). The value of such investment reflects BBIF's proportionate interest in the net assets of the Portfolio (12% at September 30, 2000). 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. On January 19, 2000, Berger LLC ("Berger") and Bank of Ireland Asset Management (U.S.) Limited ("BIAM") entered into an agreement to dissolve BBOI Worldwide LLC ("BBOI"), the former advisor to the Portfolio. This agreement was approved by shareholders on May 5, 2000. Upon approval of the new management agreement, Berger became the Fund's advisor and BIAM continues to be responsible for the day-to-day management of the Fund's portfolio as sub-advisor. The dissolution of BBOI had no effect on the investment advisory services to or on the fees borne by BBIF for advisory services. Additionally, BBIF was renamed Berger International Fund and the Berger/BIAM Worldwide Funds Trust was renamed Berger Worldwide Funds Trust. 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. Prices of foreign securities are converted to U.S. dollars using exchange rates determined prior to the close of the Exchange. 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. 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 used in computing the Funds' net asset values are determined as of the earlier of such market close or the closing time of 61 Notes to Financial Statements 61 Berger Funds o September 30, 2000 Combined Annual Reports - -------------------------------------------------------------------------------- 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, which will not be reflected in the computation of net asset value. 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. 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 except 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. Dividend income is recorded net of foreign taxes withheld. Interest income is recorded on the accrual basis and includes accretion of discount. 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 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. Expenses directly attributable to BBIF are charged against the operations of the Fund. Common Expenses Certain expenses, which 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. 62 62 Berger Funds o September 30, 2000 Combined Annual Report Notes to Financial Statements September 30, 2000 - -------------------------------------------------------------------------------- 2. Agreements Berger serves as investment advisor to TECH, BNG, BSEL, BSCG, BSCV, BMCG, BMCV, Growth, BG&I and BBAL pursuant to agreements that provide for an investment advisory fee to be paid to Berger according to the following schedule:
Average Daily Fund Net Assets Annual Rate - ---- ------------------ ----------- BSEL, BMCG, BMCV, First $500 million .75% Growth, 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%
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 & 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 reimburse BNG; Inst and BSCG; Inst to the extent that each class' transfer agency and registration fees, in aggregate, exceed .20% of the class' average daily net assets in any fiscal year. The Funds (excluding BBIF) have entered into administrative services agreements with Berger. Berger currently provides administrative services to the Funds at no cost. Pursuant to an Administrative Services Agreement, whereby Berger serves as the administrator to BBIF, BBIF pays Berger a fee at an annual rate equal to the lesser of 0.45% of its average daily net assets or Berger's annual cost to provide or procure such services plus 0.02% of BBIF's average daily net assets. Under the Agreement, Berger is responsible at its own expense, for providing or procuring administrative services reasonably necessary for the operation of BBIF, excluding legal and registration fees. 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 State Street Bank and Trust Company ("State Street"), which also serves as the Funds' custodian. 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. State Street's fees for custody, recordkeeping and pricing are subject to reduction by credits earned by each Fund, based on the cash balances of each Fund held by State Street as custodian. DST Systems, Inc. ("DST"), an affiliate of Berger through a degree of common ownership, provides shareholder accounting services to the Funds. 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 year ended September 30, 2000, the following Funds earned such credits:
Fund Credits - ---- ------- BNG $ 1,575 BSEL 12,097 Growth 26,357 BG&I 7,151 BBAL 6,318
Certain officers and/or directors of Berger are also officers and/or directors/trustees of the Funds. Directors/Trustees who are not affiliated with Berger are compensated for their services according to a fee schedule, allocated among the entire Berger Funds complex, which includes an annual fee component and a per meeting fee component. For the year ended September 30, 2000, such directors'/trustees' fees and expenses totaled $331,788 for the Funds. The Funds (except BBIF) 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 various funds advised by Berger until distribution in accordance with the Plan. 63 Notes to Financial Statements 63 Berger Funds o September 30, 2000 Combined Annual Report - -------------------------------------------------------------------------------- 3. Investment Transactions Purchases and Sales Purchases and sales proceeds of investment securities (excluding short-term securities) during the year ended September 30, 2000, were as follows:
Fund Purchases Sales - -------- -------------- -------------- TECH $ 102,173,206 $ 35,820,232 BNG 1,352,854,733 1,054,395,339 BSEL 152,862,531 201,220,464 BSCG 1,207,811,397 1,062,988,651 BSCV 1,484,288,028 792,618,981 BMCG 191,767,217 135,138,400 BMCV 35,518,853 31,409,241 Growth 1,245,935,050 1,452,366,970 BG&I 530,060,255 423,473,266 BBAL 153,675,014 125,157,197 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 $5,799,375 and sales of $14,158,432 of long-term U.S. government securities during the year ended September 30, 2000. 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, 2000, the federal tax cost of securities and the composition of net unrealized appreciation (depreciation) of investment securities were as follows:
Gross Gross Federal Unrealized Unrealized Net Fund Tax Cost Appreciation Depreciation Appreciation - ---- -------------- -------------- -------------- -------------- TECH $ 87,217,749 $ 55,183,357 $ (8,921,087) $ 46,262,270 BNG 732,099,672 227,906,354 (92,109,979) 135,796,375 BSEL 90,523,596 37,347,346 (7,156,465) 30,190,881 BSCG 1,089,210,590 454,445,598 (87,104,878) 367,340,720 BSCV 1,617,640,815 229,953,126 (114,940,253) 115,012,873 BMCG 102,428,289 30,184,159 (10,001,102) 20,183,057 BMCV 29,929,141 5,117,084 (1,865,784) 3,251,300 Growth 1,323,696,586 704,008,373 (73,542,316) 630,466,057 BG&I 523,352,845 229,618,580 (25,072,929) 204,545,651 BBAL 156,484,669 26,301,662 (7,045,069) 19,256,593 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 and Forward Contracts Each Fund may hold certain types of forward foreign currency exchange contracts and/or futures contracts 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. In addition, there can be no assurance that a liquid secondary market will exist for the instrument. Upon entering a futures 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. Realized and unrealized gains or losses on forward foreign currency contracts are included in Net Realized and Unrealized Gain (Loss) on Securities and Foreign Currency Transactions in the Statement of Operations. At September 30, 2000, the Funds had no outstanding futures or forward currency contracts. Securities Lending Under an agreement with State Street, TECH, BNG, BSEL, BSCG, BMCG, BMCV, BBAL and the Portfolio have the ability to lend securities to brokers, dealers and other authorized financial institutions. Loans of portfolio securities are collateralized by cash remitted from the borrower of such securities in an amount equal to at least 102% of the market value of the loaned securities at the time the loan is made. The cash collateral received is invested in a money market fund and is evaluated daily to ensure that its market value exceeds the current market value of the loaned securities. Income generated by such investment, net of any rebates paid to the borrower, is split among the Fund and State Street, as lending agent. At September 30, 2000, the Funds had securities on loan with the following market values:
Fund Value - ---- ------------ TECH $ 12,497,216 BNG 204,318,027 BSEL 21,312,569 BSCG 267,832,084 BMCG 30,332,345 BMCV 8,864,817 BBAL 1,024,298 BBIF(1) N/A
(1) See the Portfolio's Notes to Financial Statements for market value of securities on loan. 64 64 Berger Funds o September 30, 2000 Combined Annual Report Notes to Financial Statements September 30, 2000 - -------------------------------------------------------------------------------- Repurchase Agreements Repurchase agreements held by a Fund are fully collateralized by U.S. government or government agency 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 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 Securities 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, 2000, 1%, 56%, 1%, 17%, 5%, 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, 2000, the following percentages of capital gain distributions were considered long-term capital gains:
Fund % - ---- --- TECH 100 BNG 21 BSEL 1 BSCG 58 BSCV 65 BMCG 6 BMCV 2 Growth 25 BG&I 14 BBIF --
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 year ended September 30, 2000, the following reclassifications were made among the components of net assets:
Undistributed Undistributed Paid-in Net Investment Net Realized Fund Capital Income Gains - ---- ------------ -------------- ------------- TECH $ (1,102,043) $ 1,032,794 $ 69,249 BNG -- 8,087,258 (8,087,258) BSEL -- 1,076,908 (1,076,908) BSCG 247,413 10,281,215 (10,528,628) BSCV (2,580) (756,088) 758,668 BMCG -- 811,609 (811,609) BMCV -- -- -- Growth 64,475 15,704,847 (15,769,322) BG&I (11,326) 969,708 (958,382) BBAL 27 (27) -- BBIF (531,868) 43,764 488,104
During the year ended September 30, 2000, BBIF paid $65,034 of foreign taxes on $495,256 of foreign source income. The Fund will make the foreign tax credit election to pass through these taxes to shareholders. During the current year, BBIF utilized capital loss carryovers on the amount of $593,333 to offset realized gains for federal tax purposes. TECH incurred and elected to defer post-October 31 net capital and/or currency losses of $1,592,349 to the year ended September 30, 2001. 4. Line of Credit The Funds, excluding BBIF, are party to an ongoing agreement with certain banks that allows the funds managed by Berger, collectively, to borrow up to $150 million, subject to certain conditions, for temporary or emergency purposes. Interest, based on the Federal Funds Rate, is charged to the specific party that executes the borrowing. 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. No Funds had line of credit borrowings outstanding at September 30, 2000. 65 Notes to Financial Statements 65 Berger Funds o September 30, 2000 Combined Annual Report - -------------------------------------------------------------------------------- 5. 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
Year Ended Period from July 2, 1999(1) September 30, 2000(2) to September 30, 1999(2) --------------------------- --------------------------- Investor Shares Shares sold 5,166,413 $ 86,580,176 600,747 $ 4,639,114 Shares issued to shareholders in reinvestment of dividends and distributions 4,578 72,263 -- -- Shares redeemed (1,655,003) (26,504,399) (14,693) (115,896) ------------ ------------ ------------ ------------ 3,515,988 $ 60,148,040 586,054 $ 4,523,218 ------------ ------------ ------------ ------------
Year Ended Period from March 1, 1999 Year Ended September 30, 2000(2) to September 30, 1999(2) February 28, 1999(2) --------------------------- --------------------------- --------------------------- Institutional Shares Shares sold 2,265,564 $ 32,491,059 675,500 $ 4,834,625 1,633,989 $ 8,406,475 Shares issued to shareholders in reinvestment of dividends and distributions 9,674 152,982 31,528 240,876 -- -- Shares redeemed (1,238,559) (19,622,610) (223,419) (1,602,790) (290,955) (1,572,857) ------------ ------------ ------------ ------------ ------------ ------------ 1,036,679 13,021,431 483,609 3,472,711 1,343,034 6,833,618 ------------ ------------ ------------ ------------ ------------ ------------ Total Increase from Capital Share Transactions 4,552,667 $ 73,169,471 1,069,663 $ 7,995,929 1,343,034 $ 6,833,618 ------------ ------------ ------------ ------------ ------------ ------------
Berger New Generation Fund
Year Ended Year Ended September 30, 2000 September 30, 1999 ----------------------------- ----------------------------- Investor Shares Shares sold 25,431,722 $ 939,029,531 12,495,220 $ 266,105,602 Shares issued to shareholders in reinvestment of dividends and distributions 1,986,901 67,575,369 305,888 4,318,823 Shares redeemed (17,802,050) (644,629,776) (8,938,999) (178,904,170) ------------- ------------- ------------- ------------- 9,616,573 $ 361,975,124 3,862,109 $ 91,520,255 ------------- ------------- ------------- -------------
Year Ended Period from August 16, 1999(1) September 30, 2000 to September 30, 1999 ----------------------------- ------------------------------ Institutional Shares Shares sold 201,395 $ 7,546,798 13,443 $ 339,872 Shares issued to shareholders in reinvestment of dividends and distributions 4,334 146,212 -- -- Shares redeemed (9,556) (353,263) -- -- ------------- ------------- ------------- ------------- 196,173 7,339,747 13,443 339,872 ------------- ------------- ------------- ------------- Total Increase from Capital Share Transactions 9,812,746 $ 369,314,871 3,875,552 $ 91,860,127 ------------- ------------- ------------- -------------
(1) Commencement of operations for the share class. (2) All per share data for Berger Information Technology Fund has been adjusted to reflect a 7-for-1 share split, effective October 17, 2000 (See Note 7). 66 66 Berger Funds o September 30, 2000 Combined Annual Report Notes to Financial Statements September 30, 2000 - -------------------------------------------------------------------------------- 5. Capital Share Transactions (continued)
Berger Small Company Growth Fund Year Ended Year Ended September 30, 2000 September 30, 1999 ------------------------------- --------------------------------- Investor Shares Shares sold 187,392,906 $ 1,353,692,255 59,395,752 $ 237,959,062 Shares issued to shareholders in reinvestment of dividends and distributions 30,319,794 188,892,806 30,583,466 102,148,841 Shares redeemed (159,113,844) (1,117,175,763) (106,782,836) (421,943,412) ------------- --------------- --------------- --------------- 58,598,856 $ 425,409,298 (16,803,618) $ (81,835,509) ------------- --------------- --------------- --------------- Period from October 16, 1999(1) to September 30, 2000 ------------------------------- Institutional Shares Shares sold 824,968 $ 5,848,602 Shares issued to shareholders in reinvestment of dividends and distributions 17,556 107,968 Shares redeemed (50,885) (340,016) ------------- --------------- 791,639 5,616,554 ------------- ------------- Total Increase (Decrease) from Capital Share Transactions 59,390,495 $ 431,025,852 (16,803,618) $ (81,835,509) ------------- --------------- --------------- --------------- Berger Small Cap Value Fund Year Ended Year Ended September 30, 2000 September 30, 1999 ------------------------------- --------------------------------- Investor Shares Shares sold 26,730,624 $ 592,798,683 18,450,177 $ 379,815,718 Shares issued to shareholders in reinvestment of dividends and distributions 374,603 7,844,197 305,000 5,696,711 Shares redeemed (10,297,490) (227,188,582) (7,062,053) (141,792,819) ------------- --------------- --------------- --------------- 16,807,737 373,454,298 11,693,124 243,719,610 ------------- --------------- --------------- --------------- Institutional Shares Shares sold 22,642,489 500,689,186 17,741,548 360,425,229 Shares issued to shareholders in reinvestment of dividends and distributions 361,127 7,576,438 227,011 4,250,338 Shares redeemed (8,061,790) (178,139,334) (3,498,865) (69,867,820) ------------- --------------- --------------- --------------- 14,941,826 330,126,290 14,469,694 294,807,747 ------------- --------------- --------------- --------------- Total Increase from Capital Share Transactions 31,749,563 $ 703,580,588 26,162,818 $ 538,527,357 ------------- --------------- --------------- ---------------
(1) Commencement of operations for the share class. 6. Other Matters Effective March 31, 2000, the trustees of the OMNI Trust approved closing both share classes of BSCV to new investors. During the period in which the Fund is closed, Berger shall reduce the 12b-1 fee payable by BSCV; Inv by the amount of such fee that is not utilized by Berger to provide or to compensate third party administrators or other companies for providing shareholder services to shareholders in connection with the distribution of shares. 7. Subsequent Events The Board of Trustees of BIP Trust approved a 7-for-1 split of the shares of TECH;Inv and TECH;Inst to shareholders of record on October 16, 2000. Shareholders received six additional fund shares on October 17, 2000 for every one fund share owned on record date. The share and per share data presented in these financial statements have been restated to reflect this split. 67 Notes to Financial Statements 67 Berger Funds o September 30, 2000 Combined Annual Report Berger International Portfolio - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS
September 30, 2000 ------------------ Country/Shares Company Industry Value - -------------- ------- -------- ------------------ Common Stock (97.17%) Australia (3.34%) 61,520 Brambles Industries Ltd. Transport $ 1,611,960 166,490 National Australia Bank Ltd. Banks 2,305,724 299,690 News Corp. Ltd. Media & Photography 4,230,633 286,745 Telstra Corp. Ltd. Telecommunications Services 940,356 189,620 Westpac Banking Corp. Ltd. Banks 1,312,665 ------------------ 10,401,338 ------------------ China (0.74%) 11,284,000 PetroChina Co. Ltd. Oil & Gas 2,301,291 ------------------ Denmark (0.54%) 30,765 Tele Danmark - Class B Telecommunications Services 1,692,204 ------------------ France (11.31%) 91,035 Alcatel Alsthom Information Technology Hardware 5,827,173 92,312 Aventis SA Pharmaceuticals 6,927,692 51,773 AXA Insurance 6,765,136 34,250 Michelin - Class B Automobiles 952,538 52,663 Total Fina SA - Class B Oil & Gas 7,709,063 95,028 Vivendi Diversified Industrials 7,064,398 ------------------ 35,246,000 ------------------ Germany (4.45%) 38,150 Bayer AG Chemicals - Commodity 1,419,723 52,150 Bayerische HypoVereinsbank AG Banks 2,854,680 138,497 Bayerische Motoren Werke AG Automobiles 4,738,311 94,463 E.On AG Diversified Industrials 4,870,640 ------------------ 13,883,354 ------------------ Hong Kong (2.67%) 227,000 Cheung Kong Real Estate 2,744,218 371,000 China Mobile Ltd.* Telecommunications Services 2,462,610 434,000 China Unicom Ltd.* Telecommunications Services 971,396 226,000 Sun Hung Kai Properties Ltd. Real Estate 2,130,626 ------------------ 8,308,850 ------------------ Italy (2.63%) 411,566 ENI S.p.A. Oil & Gas 2,180,229 566,607 Telecom Italia S.p.A. Telecommunications Services 6,023,098 ------------------ 8,203,327 ------------------ Japan (16.03%) 18,000 ACOM Co. Ltd. Specialty & Other Finance 1,500,069 77,000 Bank of Tokyo-Mitsubishi Ltd. Banks 910,495 173,000 Canon, Inc. Electronic & Electrical Equipment 7,673,225 83,000 Fuji Photo Film Co. Ltd. Media & Photography 2,782,165 472,000 Hitachi Ltd. Information Technology Hardware 5,480,698 30,000 Hoya Corp. Electronic & Electrical Equipment 2,352,886 26,700 Murata Manufacturing Co. Ltd. Information Technology Hardware 3,683,781 193,000 NEC Corp.+ Information Technology Hardware 4,387,379 221 Nippon Telegraph & Telephone Corp.+ Telecommunications Services 2,169,174
68 68 Berger Funds o September 30, 2000 Combined Annual Report Berger International Portfolio - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS
September 30, 2000 ------------------ Country/Shares Company Industry Value - -------------- ------- -------- ------------------ Common Stock (97.17%) - continued Japan (16.03%) - continued 126 NTT DoCoMo, Inc. Telecommunication Services $ 3,616,834 11,200 Rohm Co. Ltd. Information Technology Hardware 3,070,808 55,000 Shiseido Co. Ltd. Personal Care & Household Products 683,457 8,800 SMC Corp. Engineering & Machinery 1,478,957 28,600 Sony Corp. Household Goods & Textiles 2,902,504 87,000 Takeda Chemical Industries Pharmaceuticals 5,751,933 13,900 Takefuji Corp. Specialty & Other Finance 1,531,645 ------------------ 49,976,010 ------------------ Netherlands (12.79%) 204,180 ABN Amro Holdings NV Banks 4,759,141 158,137 Elsevier NV Media & Photography 1,773,163 56,877 Fortis NV Banks 1,742,519 28,670 Heineken NV Beverages 1,594,702 172,417 ING Groep NV Banks 11,490,091 164,930 Koninklijke Ahold NV Food & Drug Retailers 4,678,664 129,247 Koninklijke KPN NV Electronics & Electrical Equipment 2,816,300 90,541 Philips Electronics NV Household Goods & Textiles 3,898,607 60,480 Royal Dutch Petroleum Co. Oil & Gas 3,657,214 73,490 TNT Post Group NV Support Services 1,709,701 34,860 VNU NV Media & Photography 1,754,339 ------------------ 39,874,441 ------------------ Portugal (0.26%) 257,750 Electricidade de Portugal SA Electricity 814,691 ------------------ Singapore (0.98%) 164,026 Development Bank of Singapore Ltd.* Banks 1,810,462 41,000 Oversea-Chinese Banking Corp. Ltd.* Banks 259,269 65,000 Singapore Press Holdings Ltd.* Media & Photography 975,280 ------------------ 3,045,011 ------------------ South Korea (0.45%) 15,620 Korea Telecom Corp. - Spon. ADR Telecommunication Services 525,222 47,300 Pohang Iron & Steel Co. Ltd. - Spon. ADR Steel & Other Materials 880,962 ------------------ 1,406,184 ------------------ Spain (2.56%) 346,322 Banco De Santander SA* Banks 3,803,750 210,886 Telefonica SA* Telecommunication Services 4,179,993 ------------------ 7,983,743 ------------------ Sweden (1.27%) 261,190 Telefonaktiebolaget LM Ericsson - Class B Information Technology Services 3,973,863 ------------------ Switzerland (9.32%) 2,052 Lonza AG Reg. Packaging 973,971 3,680 Nestle SA Food Producers and Processors 7,677,774 3,401 Novartis AG Reg. Pharmaceuticals 5,223,210 493 Roche Holding AG Pharmaceuticals 4,342,857 2,992 Swiss Re Insurance 5,722,167 38,452 Union Bank of Switzerland AG Reg. Banks 5,125,447 ------------------ 29,065,426 ------------------
69 International Portfolio 69 Berger Funds o September 30, 2000 Combined Annual Report - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS
September 30, 2000 ------------------ Country/Shares/Par Value Company Industry Value - ------------------------ ------- -------- ------------------ Common Stock (97.17%) - continued United Kingdom (27.83%) 238,303 Allied Zurich PLC Insurance $ 2,705,945 89,105 AstraZeneca PLC Pharmaceuticals 4,662,930 246,150 Barclays PLC Banks 6,804,071 376,030 Cable & Wireless PLC Telecommunications Services 5,358,126 328,010 Cadbury Schweppes PLC Food Producers & Processors 1,937,359 420,794 Diageo PLC Beverages 3,756,029 197,356 Emi Group PLC - Class B Media & Photography 1,573,646 210,285 Glaxo Wellcome PLC Pharmaceuticals 6,359,184 367,298 Granada Compass PLC* Leisure, Entertainment & Hotels 3,433,091 84,826 Granada Media PLC* Leisure, Entertainment & Hotels 564,896 461,800 Hilton Group PLC Leisure, Entertainment & Hotels 1,322,875 672,164 Invensys PLC Engineering & Machinery 1,466,445 519,847 Lloyds TSB Group PLC Banks 4,843,597 295,300 Marconi PLC Telecommunications Equipment 4,033,372 100,570 Pearson PLC Media & Photography 2,790,348 116,400 Peninsular & Orient Steam Navigation Co. PLC Transport 1,022,664 345,965 Prudential PLC Life Assurance 4,715,166 63,610 Railtrack Group PLC Transport 1,041,645 174,650 Reuters Group PLC Media & Photography 3,306,128 82,800 RMC Group PLC Construction & Building Materials 721,349 924,804 Shell Transport & Trading Co. PLC Oil & Gas 7,524,271 77,900 3i Group PLC Investment Co. 1,935,908 144,600 TI Group PLC Engineering & Machinery 740,902 3,392,850 Vodafone Group PLC Telecommunications Services 12,649,997 124,500 WPP Group PLC Media & Photography 1,489,077 ------------------ 86,759,021 ------------------ Total Common Stock (Cost $254,336,160) 302,934,754 ------------------ Repurchase Agreement (0.56%) $1,761,000 State Street Repurchase Agreement, 6.32% dated September 29, 2000, to be repurchased at $1,761,927 on October 2, 2000, collateralized by FNMA Agency Note, 5.96% - October 18, 2000 with a value of $1,797,187 1,761,000 ------------------ Total Repurchase Agreement (Cost $1,761,000) 1,761,000 ------------------ Total Investments (Cost $256,097,160) (97.73%) 304,695,754 Total Other Assets, Less Liabilities (2.27%) 7,072,204 ------------------ Net Assets (100.00%) $ 311,767,958 ------------------
Outstanding Forward Foreign Currency Contracts
Contract Maturity Value on Unrealized Currency Amount Date September 30, 2000 Appreciation ------------ ----------- ---------- ------------------ ------------ Sell Japanese Yen 173,160,000 10/5/2000 $ 1,604,671 $ 30,333 Sell Japanese Yen 283,256,000 10/23/2000 2,631,146 32,399 Sell Japanese Yen 231,538,000 10/30/2000 2,152,780 9,358 ------------------ ------------ $ 6,388,597 $ 72,090 ------------------ ------------
* Non-income producing security. + - Security is designated as collateral for forward foreign currency contracts. ADR - American Depositary Receipt. FNMA - Federal National Mortgage Association. PLC - Public Limited Company. See notes to financial statements. 70 70 Berger Funds o September 30, 2000 Combined Annual Report Berger International Portfolio - -------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES
September 30, 2000 ------------------ Assets Investments, at cost $ 256,097,160 ------------------ Investments, at value $ 304,695,754 Cash 795 Foreign cash (cost $1,913,932) 1,909,957 Receivables Investment securities sold 1,372,229 Contributions 14,947,873 Dividends 772,457 Interest 618 Net unrealized appreciation on forward currency contracts 72,090 Investment held as collateral for securities loaned 27,253,232 ------------------ Total Assets 351,025,005 ------------------ Liabilities Payables Investment securities purchased 880,420 Withdrawals 10,869,945 Collateral on securities loaned 27,253,232 Accrued investment advisory fees 225,578 Accrued custodian and accounting fees 7,047 Accrued audit fees 20,600 Other accrued expenses 225 ------------------ Total Liabilities 39,257,047 ------------------ Net Assets $ 311,767,958 ------------------
STATEMENT OF OPERATIONS
Year Ended September 30, 2000 ------------------ Investment Income Dividends (net of foreign tax withholding of $710,642) $ 4,640,591 Interest 569,045 Securities lending income 163,942 ------------------ Total Income 5,373,578 ------------------ Expenses Investment advisory fees 2,816,443 Accounting fees 69,223 Custodian fees 135,655 Registration fees 271 Audit fees 33,625 Legal fees 5,618 Trustees' fees and expenses 17,890 Shareholder reporting fees 7,771 Other expenses 12,234 ------------------ Gross Expenses 3,098,730 Less earnings credits (69,131) ------------------ Net Expenses 3,029,599 ------------------ Net Investment Income 2,343,979 ------------------ Net realized and unrealized gain on securities and Foreign Currency Transactions Net realized gain on securities and foreign currency transactions 27,968,844 Net change in unrealized appreciation on securities and foreign currency transactions (844,495) ------------------ Net Realized and Unrealized Gain on Securities and Foreign Currency Transactions 27,124,349 ------------------ Net Increase in Net Assets Resulting from Operations $ 29,468,328 ------------------
See notes to financial statements. 71 International Portfolio 71 Berger Funds o September 30, 2000 Combined Annual Report - -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS
Years Ended September 30, 2000 1999 - ------------------------- -------------- -------------- From Operations Net investment income $ 2,343,979 $ 1,669,631 Net realized gain (loss) on securities and foreign currency transactions 27,968,844 (5,205,587) Net change in unrealized appreciation (depreciation) on securities and foreign currency transactions (844,495) 58,159,547 -------------- -------------- Net Increase in Net Assets Resulting from Operations 29,468,328 54,623,591 -------------- -------------- From Transactions in Investors' Beneficial Interest Contributions 450,398,066 161,557,439 Withdrawals (433,309,806) (128,565,460) -------------- -------------- Net Increase in Net Assets Derived from Investors' Beneficial Interest Transactions 17,088,260 32,991,979 -------------- -------------- Net Increase in Net Assets 46,556,588 87,615,570 Net Assets Beginning of period 265,211,370 177,595,800 -------------- -------------- End of period $ 311,767,958 $ 265,211,370 -------------- --------------
Years Ended September 30, Period from -------------------------------------------- October 11, 1996(1) 2000 1999 1998 to September 30, 1997 ------------ ------------ ------------ --------------------- Ratios/Supplementary Data Net assets, end of period (in thousands) $ 311,768 $ 265,211 $ 177,596 $ 122,217 Net expense ratio to average net assets(3) 0.97% 1.00% 1.00% 0.89%(2) Ratio of net investment income to average net assets 0.73% 0.75% 3.45% 1.63%(2) Gross expense ratio to average net assets 0.97% 1.01% 1.04% 1.10%(2) Portfolio turnover rate(4) 31% 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. 72 72 Berger Funds o September 30, 2000 Combined Annual Report Notes to Financial Statements September 30, 2000 - -------------------------------------------------------------------------------- 1. Organization and Significant Accounting Policies Organization The Berger 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 Worldwide Portfolios Trust (the "Trust"), which was organized as a Delaware business trust on May 31, 1996. Currently there are three investors in the Portfolio: the Berger International Fund, the International Equity Fund and the Berger International CORE Fund. On January 19, 2000, Berger LLC ("Berger") and Bank of Ireland Asset Management (U.S.) Limited ("BIAM") entered into an agreement to dissolve BBOI. This agreement was approved by shareholders on May 5, 2000. The dissolution of BBOI had no effect on the investment advisory services provided to the Portfolio. Upon approval of the new management agreement, Berger became the Portfolio's advisor and BIAM continues to be responsible for the day-to-day management of the Portfolio's investments as sub-advisor. In connection with the dissolution, the Portfolio was renamed Berger International Portfolio from Berger/BIAM International Portfolio. Additionally, the Trust was renamed Berger Worldwide Portfolios Trust from Berger/BIAM Worldwide Portfolios Trust. 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. Prices of foreign securities are converted to U.S. dollars using exchange rates determined prior to the close of the Exchange. 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. 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. Dividend income is recorded net of foreign taxes withheld. Interest income is recorded on the accrual basis and includes accretion of discount. 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 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 BBOI, prior to its dissolution, rendered investment advisory services to the Portfolio pursuant to an agreement that provided for an investment advisory fee to be paid to BBOI at the annual rate of .90% of the Portfolio's average daily net assets. Effective May 12, 2000 in connection with the dissolution of BBOI, investment advisory fees charged to the Portfolio by Berger were reduced according to the following schedule: Average Daily Net Assets Annual Rate
Average Daily Net Assets Annual Rate ------------- ----------- First $500 million .85% Next $500 million .80% Over $1 billion .75%
Berger pays BIAM a sub-advisory fee from the investment advisory fee it receives from the Portfolio. Berger is also responsible for providing for or arranging for all managerial and administrative services necessary for the operations of the Portfolio. 73 Notes to Financial Statements 73 Berger Funds o September 30, 2000 Combined Annual Report - -------------------------------------------------------------------------------- The Portfolio has entered into recordkeeping and pricing agreements with State Street Bank and Trust Company ("State Street"), which also serves as the Portfolio's custodian. 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 funds in the Berger Funds complex. State Street's fees for custody, recordkeeping and pricing are subject to reduction by credits earned by the Portfolio, based on the cash balances of the Portfolio held by State Street as custodian. Certain officers and trustees of the Trust are officers and directors of Berger. Trustees who are not affiliated with Berger are compensated for their services according to a fee schedule, allocated among all of the funds in the Berger Funds complex, 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, 2000, totaled $17,890. 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 funds managed by Berger until distribution in accordance with the Plan. 3. Investment Transactions Purchases And Sales Purchases and sales proceeds of investment securities (excluding short-term securities) during the year ended September 30, 2000 were as follows:
Purchases Sales --------- ----- $ 114,062,605 $ 93,732,363
There were no purchases or sales of long-term U.S. government securities during the year ended September 30, 2000. Unrealized Appreciation, Unrealized Depreciation And Federal Tax Cost Of Securities. At September 30, 2000, the federal tax cost of securities and the composition of net unrealized appreciation (depreciation) of investment securities held were as follows:
Gross Unrealized Gross Unrealized Net Federal Tax Cost Appreciation Depreciation Appreciation - ---------------- ---------------- ---------------- ------------ $256,740,056 $ 61,913,161 $ (13,957,463) $ 47,955,698
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 and unrealized gains or losses on these securities are included in Net Realized and Unrealized Gain (Loss) on Securities and Foreign Currency Transactions in the Statement of Operations. Securities Lending Under an agreement with State Street, the Portfolio has the ability to lend securities to brokers, dealers and other authorized financial institutions. Loans of portfolio securities are collateralized by cash remitted from the borrower of such securities in an amount equal to at least 102% of the market value of the loaned securities at the time the loan is made. The cash collateral received is invested in a money market fund and is evaluated daily to ensure that its market value exceeds the current market value of the loaned securities. Income generated by such investment, net of any rebates paid to the borrower, is split among the Portfolio and State Street as lending agent. At September 30, 2000, the Portfolio had securities on loan with a market value of $25,904,366. Repurchase Agreements Repurchase agreements held by the Portfolio are fully collateralized by U.S. government and government agency 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 Securities and Foreign Currency Transactions in the Statement of Operations includes fluctuations from currency exchange rates and fluctuations in market value of securities. 4. Line of Credit The Portfolio, along with certain other funds managed by Berger, 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, based on the Federal Funds Rate, is charged to the specific party that executes the borrowing. 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, 2000, the Portfolio had no borrowings outstanding on the line of credit. 74 74 Berger Funds o September 30, 2000 Combined Annual Report Financial Highlights - -------------------------------------------------------------------------------- Berger Information Technology Fund - Investor Shares For a Share Outstanding Throughout the Period
Period from Year Ended July 2, 1999(1) to September 30, 2000(2) September 30, 1999(2) --------------------- --------------------- Net asset value, beginning of period $ 8.21 $ 7.64 ------------ ------------ From investment operations Net investment income (loss) (0.00)(5) (0.00)(5) Net realized and unrealized gains (losses) from investments and foreign currency transactions 9.43 0.57 ------------ ------------ Total from investment operations 9.43 0.57 ------------ ------------ Less dividends and distributions Distributions (from capital gains) (0.05) -- ------------ ------------ Total dividends and distributions (0.05) -- ------------ ------------ Net asset value, end of period $ 17.59 $ 8.21 ------------ ------------ Total Return(6) 114.97% 7.46% ------------ ------------ Ratios/supplemental data: Net assets, end of period (in thousands) $ 72,173 $ 4,811 Net expense ratio to average net assets(3) 1.63% 1.83%(4) Ratio of net investment loss to average net assets (1.36)% (1.58)%(4) Gross expense ratio to average net assets 1.63% 2.16%(4) Portfolio turnover rate(6) 38% 31%
(1) Commencement of investment operations for Investor Shares. (2) All per share data has been adjusted to reflect a 7-for-1 share split, effective October 17, 2000 (See Note 7). (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. (6) Not annualized. Berger Information Technology Fund - Institutional Shares For a Share Outstanding Throughout the Period
Period from Year Ended March 1, 1999 to September 30, 2000(2) September 30, 1999(2) --------------------- --------------------- Net asset value, beginning of period $ 8.21 $ 6.34 ---------- ---------- From investment operations Net investment income (loss) (0.00)(5) (0.00)(5) Net realized and unrealized gains (losses) from investments and foreign currency transactions 9.51 1.97 ---------- ---------- Total from investment operations 9.51 1.97 ---------- ---------- Less dividends and distributions Distributions (from capital gains) (0.05) (0.10) ---------- ---------- Total dividends and distributions (0.05) (0.10) ---------- ---------- Net asset value, end of period $ 17.67 $ 8.21 ---------- ---------- Total Return(6) 115.86% 31.30% ---------- ---------- Ratios/Supplemental Data: Net assets, end of period (in thousands) $ 61,566 $ 20,094 Net expense ratio to average net assets(3) 1.03% 1.49%(4) Ratio of net investment loss to average net assets (0.76)% (1.22)%(4) Gross expense ratio to average net assets 1.03% 1.94%(4) Portfolio turnover rate(6) 38% 31%
Period from Year Ended April 8, 1997(1) to February 28, 1999(2) February 28, 1998(2) -------------------- -------------------- Net asset value, beginning of period $ 4.31 $ 2.86 ---------- ---------- From investment operations Net investment income (loss) (0.04) (0.01) Net realized and unrealized gains (losses) from investments and foreign currency transactions 2.07 1.46 ---------- ---------- Total from investment operations 2.03 1.45 ---------- ---------- Less dividends and distributions Distributions (from capital gains) -- -- ---------- ---------- Total dividends and distributions -- -- ---------- ---------- Net asset value, end of period $ 6.34 $ 4.31 ---------- ---------- Total Return(6) 47.13% 50.75% ---------- ---------- Ratios/Supplemental Data: Net assets, end of period (in thousands) $ 12,446 $ 2,674 Net expense ratio to average net assets(3) 1.50% 1.50%(4) Ratio of net investment loss to average net assets (1.19)% (1.01)%(4) Gross expense ratio to average net assets 2.67% 12.17%(4) Portfolio turnover rate(6) 35% 33%
(1) Commencement of investment operations for Investor Shares. (2) All per share data has been adjusted to reflect a 7-for-1 share split, effective October 17, 2000 (See Note 7). (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. (6) Not annualized. See notes to financial statements. 75 Financial Highlights 75 Berger Funds o September 30, 2000 Combined Annual Report - -------------------------------------------------------------------------------- Berger New Generation Fund - Investor Shares For a Share Outstanding Throughout the Period
Years Ended September 30, 2000 1999 1998 ------------ ------------ ------------ Net asset value, beginning of period $ 25.77 $ 12.66 $ 14.72 ------------ ------------ ------------ From investment operations Net investment income (loss) (0.00)(6) (0.00)(6) -- Net realized and unrealized gains (losses) from investments and foreign currency transactions 16.77 13.61 (2.06) ------------ ------------ ------------ Total from investment operations 16.77 13.61 (2.06) ------------ ------------ ------------ Less dividends and distributions Dividends (from net investment income) -- -- -- Distributions (from capital gains) (4.55) (0.50) -- ------------ ------------ ------------ Total dividends and distributions (4.55) (0.50) 0.00 ------------ ------------ ------------ Net asset value, end of period $ 37.99 $ 25.77 $ 12.66 ------------ ------------ ------------ Total Return(2) 67.16% 110.82% (13.99)% ------------ ------------ ------------ Ratios/Supplemental Data: Net assets, end of period (in thousands) $ 853,154 $ 330,938 $ 113,693 Net expense ratio to average net assets(3) 1.30% 1.54% 1.72% Ratio of net investment income (loss) to average net assets (1.11)% (1.29)% (1.37)% Gross expense ratio to average net assets 1.30% 1.54% 1.72% Portfolio turnover rate(2) 149% 168% 243%
Period from March 29, 1996(1) to 1997 September 30, 1996 ------------ ------------ Net asset value, beginning of period $ 11.82 $ 10.00 ------------ ------------ From investment operations Net investment income (loss) (0.13) 0.56 Net realized and unrealized gains (losses) from investments and foreign currency transactions 3.64 1.26 ------------ ------------ Total from investment operations 3.51 1.82 ------------ ------------ Less dividends and distributions Dividends (from net investment income) (0.61) -- Distributions (from capital gains) -- -- ------------ ------------ Total dividends and distributions (0.61) 0.00 ------------ ------------ Net asset value, end of period $ 14.72 $ 11.82 ------------ ------------ Total Return(2) 31.53% 18.20% ------------ ------------ Ratios/Supplemental Data: Net assets, end of period (in thousands) $ 190,164 $ 116,912 Net expense ratio to average net assets(3) 1.89% 1.90%(4) Ratio of net investment income (loss) to average net assets (1.51)% 12.35%(4) Gross expense ratio to average net assets 1.89% 2.09%(4) Portfolio turnover rate(2) 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 anticipated during this period as a result of portfolio transactions undertaken in response to volatile markets and the short tax year for its initial period of operations. (6) Amount represents less than $0.01 per share. Berger New Generation Fund - Institutional Shares For a Share Outstanding Throughout the Period
Period from Year Ended August 16, 1999(1) September 30, 2000 to September 30, 1999 ------------------ --------------------- Net asset value, beginning of period $ 25.79 $ 23.29 ---------- ---------- From investment operations Net investment income (loss) (0.00)(5) (0.00)(5) Net realized and unrealized gains (losses) from investments and foreign currency transactions 16.41 2.50 ---------- ---------- Total from investment operations 16.41 2.50 ---------- ---------- Less dividends and distributions Distributions (from capital gains) (4.53) -- ---------- ---------- Total dividends and distributions (4.53) -- ---------- ---------- Net asset value, end of period $ 37.67 $ 25.79 ---------- ---------- Total Return(2) 65.68% 10.73% ---------- ---------- Ratios/Supplemental Data: Net assets, end of period (in thousands) $ 7,897 $ 347 Net expense ratio to average net assets(3) 1.17% 1.02%(4) Ratio of net investment loss to average net assets (0.95)% (0.85)%(4) Gross expense ratio to average net assets 1.57% 1.02%(4) Portfolio turnover rate(2) 149% 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. 76 76 Berger Funds o September 30, 2000 Combined Annual Report Financial Highlights - -------------------------------------------------------------------------------- Berger Select Fund For a Share Outstanding Throughout the Period
Period from Years Ended September 30, December 31, 1997(1) 2000 1999 to September 30, 1998 ------------ ------------ --------------------- Net asset value, beginning of period $ 19.17 $ 13.26 $ 10.00 ------------ ------------ ------------ From investment operations Net investment income (0.00)(6) 0.01 0.07 Net realized and unrealized gains (losses) from investments and foreign currency transactions 10.55 6.80 3.19 ------------ ------------ ------------ Total from investment operations 10.55 6.81 3.26 ------------ ------------ ------------ Less dividends and distributions Dividends (from net investment income) (0.02) (0.05) -- Dividends (in excess of net investment income) -- (0.01) -- Distributions (from capital gains) (4.45) (0.84) -- ------------ ------------ ------------ Total dividends and distributions (4.47) (0.90) -- ------------ ------------ ------------ Net asset value, end of period $ 25.25 $ 19.17 $ 13.26 ------------ ------------ ------------ Total Return(2) 55.73% 53.06% 32.60% ------------ ------------ ------------ Ratios/Supplemental Data: Net assets, end of period (in thousands) $ 122,331 $ 101,352 $ 41,571 Gross/Net expense ratio to average net assets(3) 1.23% 1.29% 1.48%(5) Ratio of net investment income (loss) to average net assets (0.81)% 0.27% 1.13%(5) Portfolio turnover rate(2) 123% 696% 1,486%(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. (6) Amount represents less than $0.01 per share. See notes to financial statements. 77 Financial Highlights 77 Berger Funds o September 30, 2000 Combined Annual Report - -------------------------------------------------------------------------------- Berger Small Company Growth Fund - Investor Shares For a Share Outstanding Throughout the Period
Years Ended September 30, 2000 1999 1998 1997 1996 ---------- ----------- ---------- --------- --------- Net asset value, beginning of period $ 4.86 $ 3.61 $ 5.33 $ 4.74 $ 3.61 ---------- ----------- ---------- --------- --------- From investment operations Net investment income (loss) (0.00)(1) (0.00)(1) -- (0.05) (0.03) Net realized and unrealized gains (losses) from investments and foreign currency transactions 3.85 1.95 (1.24) 0.84 1.16 ---------- ----------- ---------- --------- --------- Total from investment operations 3.85 1.95 (1.24) 0.79 1.13 ---------- ----------- ---------- --------- --------- Less dividends and distributions Dividends (from net investment income) -- -- -- -- -- Distributions (from capital gains) (1.28) (0.70) (0.48) (0.20) -- ---------- ----------- ---------- --------- --------- Total dividends and distributions (1.28) (0.70) (0.48) (0.20) -- ---------- ----------- ---------- --------- --------- Net asset value, end of period $ 7.43 $ 4.86 $ 3.61 $ 5.33 $ 4.74 ---------- ----------- ---------- --------- --------- Total Return 84.27% 62.78% (24.70)% 17.68% 31.30% ---------- ----------- ---------- --------- --------- Ratios/Supplemental Data: Net assets, end of period (in thousands) $1,468,541 $ 675,637 $ 561,741 $ 902,685 $ 871,467 Net expense ratio to average net assets(2) 1.27% 1.60% 1.48% 1.67% 1.68% Ratio of net investment loss to average net assets (0.83)% (1.21)% (1.01)% (1.09)% (0.97)% Gross expense ratio to average net assets 1.27% 1.60% 1.59% 1.67% 1.68% Portfolio turnover rate 92% 128% 97% 111% 91%
(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. Berger Small Company Growth Fund - Institutional Shares For a Share Outstanding Throughout the Period
Period from October 16, 1999(1) September 30, 2000 ------------------- Net asset value, beginning of period $ 4.87 ------------ From investment operations Net investment income (0.00)(5) Net realized and unrealized gains (losses) from investments and foreign currency transactions 3.86 ------------ Total from investment operations 3.86 ------------ Less dividends and distributions Distributions (from capital gains) (1.30) ------------ Total dividends and distributions (1.30) ------------ Net asset value, end of period $ 7.43 ------------ Total Return(3) 84.87% ------------ Ratios/Supplemental Data: Net assets, end of period (in thousands) $ 5,886 Net expense ratio to average net assets(4) 1.05%(2) Ratio of net investment loss to average net assets (0.47)%(2) Gross expense ratio to average net assets 1.59%(2) Portfolio turnover rate(3) 92%
(1) Commencement of investment operations for Institutional Shares. (2) Annualized. (3) Not annualized. (4) Net expenses represent gross expenses reduced by fees waived and/or reimbursed by the Advisor. (5) Amount represents less than $0.01 per share. See notes to financial statements. 78 78 Berger Funds o September 30, 2000 Combined Annual Report Financial Highlights - -------------------------------------------------------------------------------- Berger Small Cap Value Fund - Investor Shares For a Share Outstanding Throughout the Period
Period from Years Ended September 30, February 14, 1997(1) to 2000 1999 1998 September 30, 1997 ----------- ----------- ----------- ----------------------- Net asset value, beginning of period $ 20.94 $ 17.58 $ 22.28 $ 17.24 ----------- ----------- ----------- ----------- From investment operations Net investment income (loss) 0.30 (0.02) 0.42 0.03 Net realized and unrealized gains (losses) from investments and foreign currency transactions 3.97 4.26 (2.58) 5.01 ----------- ----------- ----------- ----------- Total from investment operations 4.27 4.24 (2.16) 5.04 ----------- ----------- ----------- ----------- Less dividends and distributions Dividends (from net investment income) (0.20) (0.07) (0.17) -- Distributions (from capital gains) (0.23) (0.81) (2.37) -- ----------- ----------- ----------- ----------- Total dividends and distributions (0.43) (0.88) (2.54) -- ----------- ----------- ----------- ----------- Net asset value, end of period $ 24.78 $ 20.94 $ 17.58 $ 22.28 ----------- ----------- ----------- ----------- Total Return(2) 20.77% 24.69% (10.98)% 29.23% ----------- ----------- ----------- ----------- Ratios/Supplemental Data: Net assets, end of period (in thousands) $ 859,030 $ 374,063 $ 108,465 $ 55,211 Net expense ratio to average net assets(3) 1.19% 1.37% 1.56% 1.66%(4) Ratio of net investment income to average net assets 1.69% 1.36% 0.87% 0.60%(4) Gross expense ratio to average net assets(3) 1.23% 1.37% 1.56% 1.66%(4) Portfolio turnover rate(2) 72% 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
Period from Years Ended September 30, January 1, 1997 to 2000 1999 1998 September 30, 1997 ----------- ----------- ----------- ------------------ Net asset value, beginning of period $ 21.00 $ 17.63 $ 22.33 $ 16.48 ----------- ----------- ----------- ----------- From investment operations Net investment income (loss) 0.33 0.04 0.45 0.07 Net realized and unrealized gains (losses) from investments and foreign currency transactions 4.01 4.28 (2.55) 5.78 ----------- ----------- ----------- ----------- Total from investment operations 4.34 4.32 (2.10) 5.85 ----------- ----------- ----------- ----------- Less dividends and distributions Dividends (from net investment income) (0.24) (0.14) (0.23) -- Distributions (from capital gains) (0.23) (0.81) (2.37) -- ----------- ----------- ----------- ----------- Total dividends and distributions (0.47) (0.95) (2.60) -- ----------- ----------- ----------- ----------- Net asset value, end of period $ 24.87 $ 21.00 $ 17.63 $ 22.33 ----------- ----------- ----------- ----------- TOTAL RETURN(2) 21.09% 25.18% (10.65)% 33.50% ----------- ----------- ----------- ----------- Ratios/Supplemental Data: Net assets, end of period (in thousands) $ 862,318 $ 414,347 $ 92,787 $ 58,450 Gross/Net expense ratio to average net assets(3) 0.88% 1.01% 1.19% 1.34%(1) Ratio of net investment income to average net assets 1.99% 1.69% 1.26% 0.63%(1) Portfolio turnover rate(2) 72% 66% 69% 81% Years Ended December 31, 1996 1995 ----------- ----------- Net asset value, beginning of period $ 14.57 $ 12.75 ----------- ----------- From investment operations Net investment income (loss) 0.12 0.09 Net realized and unrealized gains (losses) from investments and foreign currency transactions 3.62 3.23 ----------- ----------- Total from investment operations 3.74 3.32 ----------- ----------- Less dividends and distributions Dividends (from net investment income) (0.11) (0.09) Distributions (from capital gains) (1.72) (1.41) ----------- ----------- Total dividends and distributions (1.83) (1.50) ----------- ----------- Net asset value, end of period $ 16.48 $ 14.57 ----------- ----------- TOTAL RETURN(2) 25.58% 26.07% Ratios/Supplemental Data: Net assets, end of period (in thousands) $ 36,041 $ 31,833 Gross/Net expense ratio to average net assets(3) 1.48% 1.64% Ratio of net investment income to average net assets 0.69% 0.64% Portfolio turnover rate(2) 69% 90%
(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. 79 Financial Highlights 79 Berger Funds o September 30, 2000 Combined Annual Report - -------------------------------------------------------------------------------- Berger Mid Cap Growth Fund For a Share Outstanding Throughout the Period
Period from Years Ended September 30, December 31, 1997(1) 2000 1999 to September 30, 1998 ----------- ----------- --------------------- Net asset value, beginning of period $ 21.82 $ 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 20.75 11.10 0.93 ----------- ----------- ----------- Total from investment operations 20.75 11.10 0.93 ----------- ----------- ----------- Less dividends and distributions Distributions (from capital gains) (1.30) (0.21) -- ----------- ----------- ----------- Total dividends and distributions (1.30) (0.21) -- ----------- ----------- ----------- Net asset value, end of period $ 41.27 $ 21.82 $ 10.93 ----------- ----------- ----------- Total Return(2) 95.98% 102.76% 9.30% ----------- ----------- ----------- Ratios/Supplemental Data: Net assets, end of period (in thousands) $ 122,564 $ 25,550 $ 4,283 Net expense ratio to average net assets(3) 1.28% 1.78% 2.00%(4) Ratio of net investment loss to average net assets (0.84)% (1.03)% (0.82)%(4) Gross expense ratio to average net assets 1.28% 1.78% 2.46%(4) Portfolio turnover rate(2) 150% 178% 262%
(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) Annualized. (5) Amount represents less than $0.01 per share. Berger Mid Cap Value Fund For a Share Outstanding Throughout the Period
Period from Years Ended September 30, August 12, 1998(1) 2000 1999 to September 30, 1998 ---------- ---------- --------------------- Net asset value, beginning of period $ 12.17 $ 9.33 $ 10.00 ---------- ---------- ---------- From investment operations Net investment income 0.08 0.07 0.03 Net realized and unrealized gains (losses) from investments and foreign currency transactions 3.46 2.83 (0.70) ---------- ---------- ---------- Total from investment operations 3.54 2.90 (0.67) ---------- ---------- ---------- Less dividends and distributions Dividends (from net investment income) (0.04) (0.06) -- Dividends (from capital gains) (1.24) -- -- ---------- ---------- ---------- Total dividends and distributions (1.28) (0.06) -- ---------- ---------- ---------- Net asset value, end of period $ 14.43 $ 12.17 $ 9.33 ----------- ----------- ----------- Total Return(2) 31.11% 31.12% (6.70)% ---------- ---------- ---------- Ratios/Supplemental Data: Net assets, end of period (in thousands) $ 33,013 $ 22,918 $ 19,710 Gross/Net expense ratio to average net assets(3) 1.59% 1.62% 1.68%(4) Ratio of net investment income to average net assets 0.72% 0.54% 2.30%(4) Portfolio turnover rate(2) 129% 154% 25%
(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) Annualized. See notes to financial statements. 80 80 Berger Funds o September 30, 2000 Combined Annual Report Financial Highlights - -------------------------------------------------------------------------------- Berger Growth Fund For a Share Outstanding Throughout the Period
Years Ended September 30, 2000 1999 1998 1997(1) 1996(1) ------------ ------------ ------------ ------------ ------------ Net asset value, beginning of period $ 15.56 $ 11.99 $ 21.51 $ 19.64 $ 18.89 ------------ ------------ ------------ ------------ ------------ From investment operations Net investment loss -- (0.00)(2) -- (0.09) (0.08) Net realized and unrealized gains (losses) from investments and foreign currency transactions 8.89 4.55 (2.57) 4.73 1.76 ------------ ------------ ------------ ------------ ------------ Total from investment operations 8.89 4.55 (2.57) 4.64 1.68 ------------ ------------ ------------ ------------ ------------ Less dividends and distributions Distributions (from capital gains) (3.58) (0.98) (6.95) (2.77) (0.93) ------------ ------------ ------------ ------------ ------------ Total dividends and distributions (3.58) (0.98) (6.95) (2.77) (0.93) ------------ ------------ ------------ ------------ ------------ Net asset value, end of period $ 20.87 $ 15.56 $ 11.99 $ 21.51 $ 19.64 ------------ ------------ ------------ ------------ ------------ Total Return 60.93% 38.96% (16.08)% 26.50% 9.36% ------------ ------------ ------------ ------------ ------------ Ratios/Supplemental Data: Net assets, end of period (in thousands) $ 1,947,772 $ 1,333,794 $ 1,286,828 $ 1,889,048 $ 2,012,706 Gross/Net expense ratio to average net assets(3) 1.13% 1.36% 1.38% 1.41% 1.42% Ratio of net investment loss to average net assets (0.87)% (0.38)% (0.38)% (0.40)% (0.43)% Portfolio turnover rate 70% 274% 280% 200% 122%
(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, 2000 1999 1998 1997 1996 --------- --------- --------- --------- -------- Net asset value, beginning of period $ 15.32 $ 13.60 $ 16.72 $ 14.06 $ 12.89 --------- --------- --------- --------- -------- From investment operations Net investment income (loss) -- (0.00)(3) 0.04 0.14 0.20 Net realized and unrealized gains (losses) from investments and foreign currency transactions 8.27 4.53 (0.30) 4.28 1.17 --------- --------- --------- --------- -------- Total from investment operations 8.27 4.53 (0.26) 4.42 1.37 --------- --------- --------- --------- -------- Less dividends and distributions Dividends (from net investment income) -- -- (0.03) (0.13) (0.20) Dividends (in excess of net investment income) -- (0.01) (0.01) -- -- Distributions (from capital gains) (2.18) (2.80) (2.82) (1.63) -- --------- --------- --------- --------- -------- Total dividends and distributions (2.18) (2.81) (2.86) (1.76) (0.20) --------- --------- --------- --------- -------- Net asset value, end of period $ 21.41 $ 15.32 $ 13.60 $ 16.72 $ 14.06 --------- --------- --------- --------- -------- Total Return 56.09% 38.67% (1.60)% 34.56% 10.66% --------- --------- --------- --------- -------- Ratios/Supplemental Data: Net assets, end of period (in thousands) $ 725,272 $ 379,356 $ 301,330 $ 357,023 $315,538 Gross/Net expense ratio to average net assets(1) 1.18% 1.35% 1.44% 1.51% 1.56% Ratio of net investment income (loss) to average net assets (0.17)% (0.22)% 0.25% 0.87% 1.39% Portfolio turnover rate 74% 173% 417%(2) 173% 112%
(1) Net expenses represent gross expenses reduced by fees waived and/or reimbursed by the Advisor. (2) Portfolio turnover was greater than expected during this period due to active trading undertaken in response to market conditions that existed at the time. (3) Amount represents less than $0.01 per share. See notes to financial statements 81 Financial Highlights 81 Berger Funds o September 30, 2000 Combined Annual Report - -------------------------------------------------------------------------------- Berger Balanced Fund For a Share Outstanding Throughout the Period
Years Ended September 30, 2000 1999 1998(1) ----------- ----------- ----------- Net asset value, beginning of period $ 16.62 $ 13.28 $ 10.00 ----------- ----------- ----------- From investment operations Net investment income 0.28 0.23 0.22 Net realized and unrealized gains from investments and foreign currency transactions 4.57 4.69 5.17 ----------- ----------- ----------- Total from investment operations 4.85 4.92 5.39 ----------- ----------- ----------- Less dividends and distributions Dividends (from net investment income) (0.27) (0.23) (0.21) Distributions (from capital gains) (1.82) (1.35) (1.90) ----------- ----------- ----------- Total dividends and distributions (2.09) (1.58) (2.11) ----------- ----------- ----------- Net asset value, end of period $ 19.38 $ 16.62 $ 13.28 ----------- ----------- ----------- Total Return 30.08% 39.41% 56.77% ----------- ----------- ----------- Ratios/Supplemental Data: Net assets, end of period (in thousands) $ 176,798 $ 122,766 $ 30,721 Net expense ratio to average net assets(2) 1.14% 1.23% 1.50% Ratio of net investment income to average net assets 1.48% 1.63% 1.81% Gross expense ratio to average net assets 1.14% 1.23% 1.57% Portfolio turnover rate 82% 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 International Fund For a Share Outstanding Throughout the Period
Period from Years Ended September 30, November 7, 1996(1) to 2000(7) 1999 1998 September 30, 1997 ---------- ---------- ---------- ---------- Net asset value, beginning of period $ 12.51 $ 10.06 $ 11.46 $ 10.00 ---------- ---------- ---------- ---------- From investment operations Net investment income (loss) (0.00)(8) (0.07) 0.50 0.05 Net realized and unrealized gains (losses) from investments and foreign currency transactions allocated from Portfolio 1.18 3.01 (1.46) 1.41 ---------- ---------- ---------- ---------- Total from investment operations 1.18 2.94 (0.96) 1.46 ---------- ---------- ---------- ---------- Less dividends and distributions Dividends (from net investment income) -- (0.47) (0.06) -- Distributions (from capital gains) -- (0.02) (0.38) -- ---------- ---------- ---------- ---------- Total dividends and distributions -- (0.49) (0.44) -- ---------- ---------- ---------- ---------- Net asset value, end of period $ 13.69 $ 12.51 $ 10.06 $ 11.46 ---------- ---------- ---------- ---------- Total Return(3) 9.43% 29.64% (8.46)% 14.60% ---------- ---------- ---------- ---------- Ratios/Supplemental Data: Net assets, end of period (in thousands) $ 38,425 $ 23,014 $ 16,515 $ 18,673 Net expense ratio to average net assets(4),(5) 1.71% 1.76% 1.80% 1.90%(2) Ratio of net income (loss) to average net assets (0.00)% (0.01)% 2.20% 0.61%(2) Gross expense ratio to average net assets(5) 1.71% 1.77% 1.83% 1.99%(2) Portfolio turnover rate(3),(6) 31% 16% 17% 17%
(1) Commencement of investment operations. (2) Annualized. (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) Represents the portfolio turnover rate of the Portfolio. All of the investable assets of the Fund are invested in the Portfolio. (7) Per share calculations for the period were based on average shares outstanding. (8) Amount represents less than $0.01 per share. See notes to financial statements. 82 82 Berger Funds o September 30, 2000 Combined Annual Report Report of Independent Accountants - -------------------------------------------------------------------------------- To the Boards of Directors/Trustees and Shareholders of Berger Growth Fund, Inc., Berger Growth and Income Fund, Inc., Berger Omni Investment Trust, Berger Investment Portfolio Trust and Berger Worldwide Funds Trust, and to the Board of Trustees and Investors of Berger 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/supplementary data, as applicable, present fairly, in all material respects, the financial position of Berger Growth Fund, Inc. (formerly 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 International Fund (formerly Berger/BIAM International Fund; one of the funds constituting Berger Worldwide Funds Trust formerly Berger/BIAM Worldwide Funds Trust) and Berger International Portfolio (formerly Berger/BIAM International Portfolio; the sole portfolio comprising Berger Worldwide Portfolios Trust formerly Berger/BIAM Worldwide Portfolios Trust) (collectively the "Funds") at September 30, 2000, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the periods indicated and the financial highlights or ratios/supplementary data for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights or ratios/supplementary 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 auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at September 30, 2000 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. 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 8, 2000 83 Financial Highlights 83 Berger Funds o September 30, 2000 Combined Annual Report Other Matters (Unaudited) - -------------------------------------------------------------------------------- A special meeting of shareholders of Berger International Fund was held on May 5, 2000, at which shareholders approved the following proposals: Proposal 1. Approval of a new investment advisory agreement naming Berger LLC ("Berger") as investment advisor to the Berger International Portfolio, replacing BBOI Worldwide LLC; and Proposal 2. Approval of a new Sub-Advisory Agreement between Berger and Bank of Ireland Asset Management (U.S.) Limited. The following is a report of the votes cast:
Withheld/ For Against Abstain Total --------- ---------- ------------- ------------- Proposal 1 1,425,311 6,248 15,529 1,447,088 Proposal 2 1,413,013 11,366 22,709 1,447,088
84 Shareholders with questions should write to: PreSorted Standard Berger Funds, c/o Berger LLC U.S. Postage [BERGER FUNDS LOGO] P.O. Box 5005, Denver, CO 80217 PAID or call 800-551-5849. PERMIT NO. 1 Visit our Web site at bergerfunds.com. Houston, Texas
210 University Blvd Denver, CO 80206 COMAR -----END PRIVACY-ENHANCED MESSAGE-----