-----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, JvAlysbyfTi7r/KRHTVx7lulDQs3eylEztUySu2qrFLA4Fre3xNfmf5V2+P70604 XTVgEbuJyZlm2iD16OJabw== 0001193125-04-147772.txt : 20040827 0001193125-04-147772.hdr.sgml : 20040827 20040827115418 ACCESSION NUMBER: 0001193125-04-147772 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20040630 FILED AS OF DATE: 20040827 DATE AS OF CHANGE: 20040827 EFFECTIVENESS DATE: 20040827 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PARK AVENUE PORTFOLIO CENTRAL INDEX KEY: 0000837910 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-05641 FILM NUMBER: 041001254 BUSINESS ADDRESS: STREET 1: 7 HANOVER SQUARE 19-C CITY: NEW YORK STATE: NY ZIP: 10003 BUSINESS PHONE: 2125988818 MAIL ADDRESS: STREET 1: 7 HANOVER SQUARE 19-C CITY: NEW YORK STATE: NY ZIP: 10004 FORMER COMPANY: FORMER CONFORMED NAME: GUARDIAN U S GOVERNMENT TRUST DATE OF NAME CHANGE: 19920703 N-CSRS 1 dncsrs.txt GUARDIAN PARK AVENUE PORTFOLIO UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-05641 - -------------------------------------------------------------------------------- The Park Avenue Portfolio - -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) 7 Hanover Square New York, N.Y. 10004 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Frank L. Pepe Thomas G. Sorell The Park Avenue Portfolio The Park Avenue Portfolio 7 Hanover Square 7 Hanover Square New York, N.Y. 10004 New York, N.Y. 10004 - -------------------------------------------------------------------------------- (Name and address of agents for service) Registrant's telephone number, including area code: (800) 221-3253 - -------------------------------------------------------------------------------- Date of fiscal year end: December 31 - -------------------------------------------------------------------------------- Date of reporting period: June 30, 2004 - -------------------------------------------------------------------------------- ITEM 1. REPORTS TO STOCKHOLDERS. The Semiannual Report to Stockholders follows. (Guardian Logo) The Park Avenue Portfolio(R) Semiannual Report to Shareholders June 30, 2004 The Guardian Park Avenue Fund(R) The Guardian UBS Large Cap Value Fund(SM) The Guardian Park Avenue Small Cap Fund(SM) The Guardian UBS Small Cap Value Fund(SM) The Guardian Asset Allocation Fund(SM) The Guardian S&P 500 Index Fund(SM) The Guardian Baillie Gifford International Growth Fund(SM)* The Guardian Baillie Gifford Emerging Markets Fund(SM) The Guardian Investment Quality Bond Fund(SM) The Guardian Low Duration Bond Fund(SM) The Guardian High Yield Bond Fund(SM) The Guardian Tax-Exempt Fund(SM) The Guardian Cash Management Fund(SM) *Formerly known as The Guardian Baillie Gifford International Fund Star Burst Graphic Sign Up for E-Delivery! To get future shareholder reports online and eliminate paper, go to www.guardianinvestor.com - -------------------------------------------------------------------------------- Dear Shareholder: [PHOTO] Thomas G. Sorell Thomas G. Sorell, C.F.A. Chief Investment Officer QUICK FACTS .. Stocks posted meager returns during the first half of the year, while the bond market was essentially flat. .. The Fed officially began the process of moving away from an accommodative monetary policy when it raised the target Fed Funds rate on June 30. .. The Fed and investors are likely to closely follow inflation data to determine the extent and pace of future rate hikes. .. We believe that investors should consider gravitating to higher quality stocks and bonds. Concerns and Uncertainties Drive the Markets The first two quarters of the year proved to be a study in contrasts. In the first three months, investors questioned whether the strong economic expansion that occurred in the latter half of 2003 was sustainable. While extensive monetary and fiscal stimulus helped drive solid Gross Domestic Product (GDP) growth in the first quarter 2004, a weak labor market led to fears of a "jobless recovery." This proved to be the driving factor in the markets, causing bond yields to fall and fixed income securities to outperform their equity counterparts. (Gross Domestic Product measures the value of goods and services produced in an economy). Investor psychology then abruptly changed in the second quarter. In April, the Labor Department reported that 308,000 new jobs were created in March, significantly higher than expected. This was followed by impressive job growth in April and May. Confidence grew that economic growth was sustainable as first quarter 2004 GDP increased 3.9%. However, a series of economic reports indicating increasing inflationary risks turned investor focus to concerns about inflation and rising interest rates. The Fed eventually raised rates from 1.00% to 1.25% on June 30, the first such increase in four years. The preoccupation with interest rates overshadowed strong corporate fundamentals and the equity market rose only modestly during the second quarter. Bond yields were sharply higher, especially in the short end of the curve, as the market priced in a series of rate hikes. All told, the U.S. bond market posted its worst quarterly return in a decade. Looking at the first six months of the year, the S&P 500 Index gained 3.44% and the Lehman Aggregate Bond Index returned 0.15%. Overseas, the MSCI EAFE advanced 4.86%, emerging market equities, as measured by the MSCI EMF Free Index fell 0.78%, and the JP Morgan Global Government Bond Index returned 0.41%. (The S&P 500 Index is an index of 500 primarily large-cap U.S. stocks that is generally considered to be representative of U.S. stock market activity. The Lehman Brothers Aggregate Bond Index is generally considered to be representative of U.S. bond market activity. The Morgan Stanley Capital International (MSCI) Index for Europe, Australasia, and Far East (EAFE) is an index that is generally considered to be representative of international stock market activity. The JP Morgan Global Government Bond Index tracks total return of government bonds in developed countries globally. The bonds included in the index are weighted according to their market capitalization. The index is unhedged and expressed in terms of $US. The S&P 500 Index, the Lehman Brothers Aggregate Bond Index, the MSCI EAFE Index and the JP Morgan Global Government Bond Index all are unmanaged indices that are not available for direct investment. There are no expenses associated with the indexes.) All Eyes on the Fed Thus far, the Fed has been relatively forthcoming by telegraphing its policy shifts as the economy has gained momentum. Key statements, such as "be patient in removing its policy accommodation," "policy accommodation can be removed at a pace that is likely to be measured," and "will respond to changes in economic prospects as needed to fulfill its obligation to maintain price stability" have been carefully scrutinized by market participants around the world. We currently believe that the Fed will continue to institute 25 basis point rate hikes during its regular meetings and that the Fed Funds rate will be 2.0- 21/4% by year-end. This has already been factored into short-term interest rates. Given signs that inflation has already started to take hold, as indicated by the rising CPI (The Consumer Price Indexes (CPI) program produces monthly data on changes in the prices paid by urban consumers for a representative basket of goods and services) and PPI (The Producer Price Index (PPI) program measures the average change over time in the selling prices received by domestic producers for their output), we believe that it is likely that rates will continue to rise in 2005 as well. Should inflation remain relatively under control, we believe the Fed will be able to maintain a "measured pace" in raising rates. Market Outlook Now that we have a clear picture of the interest rate environment and the official handover of power in Iraq is behind us, investors may set their sights on the fundamental factors that generally drive the markets, namely the macro-economic situation and corporate profits. However, just as the prospect for rising rates overshadowed the markets in the second quarter, the outlook for inflation will likely do the same in the coming months. Investors may also be distracted as we get closer to the November presidential election. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- While the future is impossible to predict, we do know that corporate profits currently remain strong. According to First Call, profit growth among the companies in the S&P 500 Index was an exceptional 26% in the first quarter and is projected to be roughly 22% in the second quarter. With a P/E of 17 times forward earnings, the market is at the higher end of its historical range, although not excessively so. We estimate that with 2004 GDP between 3 1/2-4% and manageable inflation, it is possible that stocks could produce mid- to upper single-digit returns by the end of the year. Lower profits or an acceleration of inflation and Fed hikes would likely lower the returns for stocks in the second half of 2004. In terms of individual equities, we believe that investors who are suitable for these securities should consider shifting their focus from more speculative stocks into higher quality companies with predictable growth prospects, we believe that these stocks should outperform during periods of rising interest rates and declining earnings growth and we are beginning to see this trend developing in the market. Looking at the bond market, the Fed (and investors) will carefully monitor upcoming inflation data to ascertain to what level--and how quickly--rates will rise. With this tightening cycle likely to continue for quite some time, we continue to believe that fixed income investors' coupon return will be diminished by the decline in principal value, dependent on a bond's maturity. Shorter-term bonds are likely to suffer less in principal losses as interest rates rise. Internationally, we expect economic growth in Asia will continue to be strong, despite China's efforts to cool its economy and ward off inflation. While European growth may strengthen in 2005, industry experts believe that it will likely still lag other established economies. Given the mounting U.S. trade deficit, we believe that the dollar should remain under pressure during the second half of the year. This could provide a welcome boost in returns for U.S. investors that hold foreign stock and bonds. Reinforce the Benefits of Professional Advice Given the unsettled market environment, we believe now is an ideal time to proactively contact your financial advisor. When the markets are falling or stagnant, it can be all too easy for investors to overreact. We believe this situation actually represents a compelling opportunity for you to meet with your financial advisor and carefully review your financial portfolios. In doing so, you can determine whether your current asset allocation mix is appropriate given your financial objectives and risk profile. As you might notice, we updated the style of your semiannual report in order to present fund information in an easier to read format. We thank you for your business, confidence and trust to manage your investments and look forward to serving your financial needs in the future. /s/ Thomas G. Sorell Thomas G. Sorell, CFA President, The Park Avenue Portfolio Chief Investment Officer, Guardian Investor Services LLC Please note that the opinions and outlooks about the markets in general and any specific securities expressed in this issue reflect the viewpoints of Tom Sorell as of July, 2004. Keep in mind that market conditions are constantly evolving and that past performance is not a guarantee of future results. This shareholder letter is not part of the funds' financial report and is submitted for the general information of Park Avenue Portfolio shareholders. This letter is not authorized for distribution to prospective investors unless preceded or accompanied by a prospectus. Please consider the funds' investment objectives, risks, fees and charges carefully before investing. Shares of The Park Avenue Portfolio family of mutual funds are not deposits or obligations of, or guaranteed or endorsed by, any bank or depository institution, nor are they insured by the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Association (NCUA), the Federal Reserve Board, or any other agency. Investment in the funds involves risks, including possible loss of the principal amount invested. Fund shares are subject to market fluctuations and, when redeemed, may be worth more or less than their original cost. Guardian Investor Services LLC (GIS) is the distributor of The Park Avenue Portfolio family of mutual funds. GIS is an indirect wholly owned subsidiary of The Guardian Life Insurance Company of America (Guardian Life), New York, NY. GIS is located at 7 Hanover Square, New York, NY 10004. 800-221-3253 GIS is a member: NASD, SIPC. - -------------------------------------------------------------------------------- THE PARK AVENUE PORTFOLIO Table of Contents
Schedule Fund of Highlights Investments - ------------------------------------------------------ ---------- ----------- The Guardian Park Avenue Fund 2 15 - ----------------------------------------------------------------------------- The Guardian UBS Large Cap Value Fund 3 17 - ----------------------------------------------------------------------------- The Guardian Park Avenue Small Cap Fund 4 18 - ----------------------------------------------------------------------------- The Guardian UBS Small Cap Value Fund 5 20 - ----------------------------------------------------------------------------- The Guardian Asset Allocation Fund 6 22 - ----------------------------------------------------------------------------- The Guardian S&P 500 Index Fund 7 25 - ----------------------------------------------------------------------------- The Guardian Baillie Gifford International Growth Fund 8 31 - ----------------------------------------------------------------------------- The Guardian Baillie Gifford Emerging Markets Fund 9 34 - ----------------------------------------------------------------------------- The Guardian Investment Quality Bond Fund 10 37 - ----------------------------------------------------------------------------- The Guardian Low Duration Bond Fund 11 41 - ----------------------------------------------------------------------------- The Guardian High Yield Bond Fund 12 43 - ----------------------------------------------------------------------------- The Guardian Tax-Exempt Fund 13 48 - ----------------------------------------------------------------------------- The Guardian Cash Management Fund 14 50 - ----------------------------------------------------------------------------- Financial Statements 52 - ----------------------------------------------------------------------------- Notes to Financial Statements 61 - ----------------------------------------------------------------------------- Financial Highlights 76 - -----------------------------------------------------------------------------
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- About Your Semiannual Report Information About Indexes: Index returns are provided for comparative purposes and are quoted throughout the following fund information. Please note that indices are not available for direct investment and the returns do not reflect the fees and expenses that have been deducted from the Fund. In addition, the return figures for the index do not reflect sales charges that an investor may pay when purchasing or redeeming shares of a Fund. . The S&P 500 Index is an unmanaged index of 500 primarily large cap U.S. stocks that is generally considered to be representative of U.S. stock market activity. . The Russell 1000 Value Index measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values. The Russell 1000 Index measures the performance of the 1,000 largest companies in the Russell 3000 Index. The Russell 1000 Index represents approximately 92% of the total market capitalization of the Russell 3000 Index. . The Russell 2000 Index is an unmanaged index that is generally considered to be representative of small capitalization issues in the U.S. stock market. . The Russell 2000 Value Index measures the performance of those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values. The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index. The Russell 2000 Index represents approximately 8% of the total market capitalization of the Russell 3000 Index. . The Morgan Stanley Capital International (MSCI) Europe, Australasia and Far East (EAFE) Growth Index is an unmanaged index that is generally considered to be representative of the international growth stock market activity. . The Morgan Stanley Capital International (MSCI) Emerging Markets Free (EMF) Index is an unmanaged index that is generally considered to be representative of the stock market activity of emerging markets. The MSCI EMF Index is a market capitalization weighted index composed of companies representative of the market structure of 22 emerging market countries of Europe, Latin America and the Pacific Basin. The MSCI EMF Index excludes closed markets and those shares in otherwise free markets that may not be purchased by foreigners. . The Lehman Brothers Aggregate Bond Index is an unmanaged index that is generally considered to be representative of U.S. bond market activity. . The Lehman Brothers U.S. Government 1-3 Year Bond Index is an unmanaged index that is generally considered to be representative of U.S. short duration bond market activity. . The Lehman Brothers Corporate High Yield Bond Index is an unmanaged index that is generally considered to be representative of U.S. corporate high yield bond market activity. . The Lehman Brothers Municipal Bond Index is an unmanaged index that is generally considered to be representative of U.S. municipal bond activity. . The Lehman Brothers 3-Month Treasury Bill Index is generally considered representative of the average yield of three-month Treasury Bills. - -------------------------------------------------------------------------------- .. The Guardian Park Avenue Fund Semiannual Report To Shareholders - -------------------------------------------------------------------------------- [PHOTO] Richard Goldman Richard Goldman, Portfolio Manager Objective: Long-term growth of capital Inception: June 1, 1972 Net assets at June 30, 2004: $1,205,651,147 Portfolio: At least 80% common stocks and securities convertible into common stocks - -------------------------------------------------------------------------------- Top Ten Holdings (As of 6/30/04)
Percentage of Company Total Net Assets ----------------------------------------------------------------------- Pfizer, Inc. 4.93% ----------------------------------------------------------------------- General Electric Co. 4.42% ----------------------------------------------------------------------- Microsoft Corp. 3.92% ----------------------------------------------------------------------- American Int'l. Group, Inc. 3.27% ----------------------------------------------------------------------- Procter & Gamble Co. 2.70% ----------------------------------------------------------------------- Devon Energy Corp. 2.66% ----------------------------------------------------------------------- Colgate-Palmolive Co. 2.62% ----------------------------------------------------------------------- Phelps Dodge Corp. 2.58% ----------------------------------------------------------------------- Cisco Systems, Inc. 2.39% ----------------------------------------------------------------------- Citigroup, Inc. 2.38%
Sector Weightings vs. Index (As of 6/30/04) [CHART] The Guardian Park Avenue Fund S&P 500 Index Financials 21.60% 20.28% Information Technology 18.20% 17.23% Consumer Staples 14.40% 11.14% Health Care 13.80% 13.31% Energy 10.20% 6.57% Industrials 10.10% 11.47% Consumer Discretionary 5.50% 10.94% Materials 3.50% 2.97% Utilities 1.50% 2.67% Telecommunication Services 0.80% 3.42% Cash 0.40% 0.00% Average Annual Total Returns (For periods ended 6/30/04)
Inception Since Date YTD 1-Yr 3-Yr 5-Yr 10-Yr Inception - -------------------------------------------------------------------------------------------- Class A Shares (w/o sales charge) (6/1/72) 0.72 12.38 -4.36 -6.02 8.50 13.08 (w/ sales charge) (6/1/72) -3.81 7.32 -5.82 -6.88 8.00 12.92 - -------------------------------------------------------------------------------------------- Class B Shares (w/o sales charge) (5/1/96) 0.28 11.28 -5.29 -6.90 -- 4.37 (w/ sales charge) (5/1/96) -2.72 8.28 -5.93 -7.09 -- 4.37 - -------------------------------------------------------------------------------------------- Class C Shares (w/o sales charge) (8/7/00) 0.14 11.06 -5.50 -- -- -13.78 (w/ sales charge) (8/7/00) -0.86 10.06 -5.50 -- -- -13.78 - -------------------------------------------------------------------------------------------- Class K Shares (w/o sales charge) (5/15/01) 0.60 12.07 -4.66 -- -- -5.60 (w/ sales charge) (5/15/01) -0.40 11.07 -4.66 -- -- -5.60 - -------------------------------------------------------------------------------------------- S&P 500 Index 3.44 19.11 -0.69 -2.20 11.81 11.14 Since Class A shares inception
- -------------------------------------------------------------------------------- About information contained in this report: .. All performance data quoted is historical and the results represent past performance and neither guarantee nor predict future investment results. To obtain performance data current to the most recent month (availability within 7 business days of the most recent month end), please call us at 1-800-221-3253 or visit our website at www.guardianinvestor.com. Current performance may be higher or lower than the performance quoted here. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. .. It is important to consider the Fund's investment objectives, risks, fees and expenses carefully before investing. All funds involve some risk, including possible loss of principal amount invested. .. Please see the "About Your Semiannual Report" page for a description of the S&P 500 Index. .. Total return figures are historical and assume the reinvestment of dividends and distributions and the deduction of all Fund expenses. The return figures shown do not reflect the deduction of taxes that a shareholder may pay on distributions or redemption of shares. Total return figures for Class A shares do not take into account the current maximum sales charge of 4.5%, except where noted. Total return figures for Class B, Class C and Class K shares do not take into account the contingent deferred sales charge applicable to such shares (maximum 3% for Class B shares and 1% for Class C and Class K shares), except where noted. Prior to August 25, 1988, Class A shares of the Fund were offered at a higher sales charge, so that actual returns would have been somewhat lower. Please refer to the Financial Statements, accompanying Notes to Financial Statements, and Financial Highlights sections of this report for specific information about the fees and expenses borne by the Fund. - -------------------------------------------------------------------------------- 2 .. The Guardian UBS Large Cap Value Fund Semiannual Report To Shareholders - -------------------------------------------------------------------------------- The Guardian UBS Large Cap Value Fund is managed by a team of investment professionals from the Fund's sub-advisor, UBS Global Asset Management (Americas) Inc., with many years of experience in large cap value investment management. Objective: Seeks to maximize total return, consisting of capital appreciation and current income Inception: February 3, 2003 Net assets at June 30, 2004: $88,225,121 Portfolio: At least 80% in equity securities issued by companies with a large market capitalization at the time of purchase - -------------------------------------------------------------------------------- Top Ten Holdings (As of 6/30/04)
Percentage of Company Total Net Assets -------------------------------------------------------------------------- Citigroup, Inc. 5.32% -------------------------------------------------------------------------- Exxon Mobil Corp. 5.21% -------------------------------------------------------------------------- J.P. Morgan Chase & Co. 4.42% -------------------------------------------------------------------------- Wells Fargo & Co. 4.22% -------------------------------------------------------------------------- Nextel Comm., Inc. 4.22% -------------------------------------------------------------------------- Morgan Stanley 3.98% -------------------------------------------------------------------------- UnitedHealth Group 3.29% -------------------------------------------------------------------------- Illinois Tool Works, Inc. 3.11% -------------------------------------------------------------------------- Federal Home Loan Mortgage Corp. 3.09% -------------------------------------------------------------------------- ConocoPhillips 2.91%
Sector Weightings vs. Index (As of 6/30/04) [CHART] The Guardian UBS Large Cap Value Fund Russell 1000 Value Index Financials 34.26% 36.41% Industrials 10.05% 6.96% Health Care 9.42% 4.21% Consumer Discretionary 8.69% 11.55% Utilities 8.11% 5.29% Energy 8.01% 10.77% Telecommunication Services 7.44% 5.21% Materials 6.59% 6.33% Information Technology 4.52% 7.55% Consumer Staples 2.91% 5.72% Average Annual Total Returns (For periods ended 6/30/04)
Inception Since Date YTD 1-Yr 3-Yr 5-Yr 10-Yr Inception - ------------------------------------------------------------------------------------------ Class A Shares (w/o sales charge) (2/3/03) 2.98 19.02 -- -- -- 24.02 (w/ sales charge) (2/3/03) -1.65 13.66 -- -- -- 20.02 - ------------------------------------------------------------------------------------------ Class B Shares (w/o sales charge) (2/3/03) 2.54 18.11 -- -- -- 23.09 (w/ sales charge) (2/3/03) -0.46 15.11 -- -- -- 21.12 - ------------------------------------------------------------------------------------------ Class C Shares (w/o sales charge) (2/3/03) 2.54 18.11 -- -- -- 23.09 (w/ sales charge) (2/3/03) 1.54 17.11 -- -- -- 23.09 - ------------------------------------------------------------------------------------------ Class K Shares (w/o sales charge) (2/3/03) 2.79 18.78 -- -- -- 23.68 (w/ sales charge) (2/3/03) 1.79 17.78 -- -- -- 22.68 - ------------------------------------------------------------------------------------------ Russell 1000 Value Index 3.94 21.13 -- -- -- 25.53 Since Class A shares inception
- -------------------------------------------------------------------------------- About information contained in this report: .. All performance data quoted is historical and the results represent past performance and neither guarantee nor predict future investment results. To obtain performance data current to the most recent month (availability within 7 business days of the most recent month end), please call us at 1-800-221-3253 or visit our website at www.guardianinvestor.com. Current performance may be higher or lower than the performance quoted here. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. .. It is important to consider the Fund's investment objectives, risks, fees and expenses carefully before investing. All funds involve some risk, including possible loss of principal amount invested. .. Please see the "About Your Semiannual Report" page for a description of the Russell 1000 Value Index. .. Total return figures are historical and assume the reinvestment of dividends and distributions and the deduction of all Fund expenses. The return figures shown do not reflect the deduction of taxes that a shareholder may pay on distributions or redemption of shares. Total return figures for Class A shares do not take into account the current maximum sales charge of 4.5%, except where noted. Total return figures for Class B, Class C and Class K shares do not take into account the contingent deferred sales charge applicable to such shares (maximum 3% for Class B shares and 1% for Class C and Class K shares), except where noted. Please refer to the Financial Statements, accompanying Notes to Financial Statements, and Financial Highlights sections of this report for specific information about the fees and expenses borne by the Fund. - -------------------------------------------------------------------------------- 3 .. The Guardian Park Avenue Small Cap Fund Semiannual Report To Shareholders - -------------------------------------------------------------------------------- [PHOTO] Matthew Ziehl Matthew Ziehl, C.F.A., Portfolio Manager Objective: Long-term growth of capital Inception: May 1, 1997 Net assets at June 30, 2004: $208,604,318 Portfolio: At least 85% in a diversified portfolio of common stocks issued by companies with a small market capitalization at the time of initial purchase - -------------------------------------------------------------------------------- Top Ten Holdings (As of 6/30/04)
Percentage of Company Total Net Assets --------------------------------------------------------------------------- Investors Financial Svcs. Corp. 3.00% --------------------------------------------------------------------------- American Medical Systems Hldgs., Inc. 2.74% --------------------------------------------------------------------------- Energy Partners Ltd. 2.39% --------------------------------------------------------------------------- Financial Federal Corp. 2.38% --------------------------------------------------------------------------- Piper Jaffray Cos., Inc. 2.33% --------------------------------------------------------------------------- Cost Plus, Inc. 2.25% --------------------------------------------------------------------------- Boston Private Financial Hldgs., Inc. 2.19% --------------------------------------------------------------------------- Movie Gallery, Inc. 2.18% --------------------------------------------------------------------------- Federal Agricultural Mortgage Corp. 2.10% --------------------------------------------------------------------------- Direct General Corp. 1.98%
Sector Weightings vs. Index (As of 6/30/04) [CHART] The Guardian Park Avenue Small Cap Fund Russell 2000 Index Financials 21.60% 20.49% Information Technology 20.80% 18.92% Consumer Discretionary 13.90% 14.62% Industrials 13.70% 14.89% Health Care 13.70% 14.02% Energy 6.60% 4.51% Materials 4.20% 5.53% Consumer Staples 2.20% 2.98% Telecommunication Services 1.90% 1.20% Utilities 0.70% 2.84% Cash 0.70% 0.00% Average Annual Total Returns (For periods ended 6/30/04)
Inception Since Date YTD 1-Yr 3-Yr 5-Yr 10-Yr Inception - ------------------------------------------------------------------------------------------ Class A Shares (w/o sales charge) (5/1/97) 3.89 30.21 6.92 9.63 -- 10.01 (w/ sales charge) (5/1/97) -0.79 24.35 5.29 8.63 -- 9.31 - ------------------------------------------------------------------------------------------ Class B Shares (w/o sales charge) (5/6/97) 3.47 29.01 5.92 8.64 -- 8.56 (w/ sales charge) (5/6/97) 0.47 26.01 5.32 8.50 -- 8.56 - ------------------------------------------------------------------------------------------ Class C Shares (w/o sales charge) (8/7/00) 3.37 28.80 5.74 -- -- -1.05 (w/ sales charge) (8/7/00) 2.37 27.80 5.74 -- -- -1.05 - ------------------------------------------------------------------------------------------ Class K Shares (w/o sales charge) (5/15/01) 3.79 29.84 6.62 -- -- 6.66 (w/ sales charge) (5/15/01) 2.79 28.84 6.62 -- -- 6.66 - ------------------------------------------------------------------------------------------ Russell 2000 Index 6.76 33.37 6.24 6.63 -- 9.29 Since Class A shares inception
- -------------------------------------------------------------------------------- About information contained in this report: .. All performance data quoted is historical and the results represent past performance and neither guarantee nor predict future investment results. To obtain performance data current to the most recent month (availability within 7 business days of the most recent month end), please call us at 1-800-221-3253 or visit our website at www.guardianinvestor.com. Current performance may be higher or lower than the performance quoted here. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. .. It is important to consider the Fund's investment objectives, risks, fees and expenses carefully before investing. All funds involve some risk, including possible loss of principal amount invested. Small-cap investing entails special risks, as small-cap stocks have tended to be more volatile and to drop more in down markets than large-cap stocks. This may happen because small companies may be limited in terms of product lines, financial resources and management. .. Please see the "About Your Semiannual Report" page for a description of the Russell 2000 Index. .. Total return figures are historical and assume the reinvestment of dividends and distributions and the deduction of all Fund expenses. The return figures shown do not reflect the deduction of taxes that a shareholder may pay on distributions or redemption of shares. Total return figures for Class A shares do not take into account the current maximum sales charge of 4.5%, except where noted. Total return figures for Class B, Class C and Class K shares do not take into account the contingent deferred sales charge applicable to such shares (maximum 3% for Class B shares and 1% for Class C and Class K shares), except where noted. Please refer to the Financial Statements, accompanying Notes to Financial Statements, and Financial Highlights sections of this report for specific information about the fees and expenses borne by the Fund. - -------------------------------------------------------------------------------- 4 .. The Guardian UBS Small Cap Value Fund Semiannual Report To Shareholders - -------------------------------------------------------------------------------- The Guardian UBS Small Cap Value Fund is managed by a team of investment professionals from the Fund's sub-advisor, UBS Global Asset Management (Americas) Inc., with many years of experience in small cap value investment management. Objective: Seeks to maximize total return, consisting of capital appreciation and current income Inception: February 3, 2003 Net assets at June 30, 2004: $41,916,513 Portfolio: At least 80% in equity securities issued by companies with a small market capitalization at the time of initial purchase - -------------------------------------------------------------------------------- Top Ten Holdings (As of 6/30/04)
Percentage of Company Total Net Assets ----------------------------------------------------------------------- Equitable Resources, Inc. 2.97% ----------------------------------------------------------------------- AmerUs Group Co. 2.45% ----------------------------------------------------------------------- McGrath Rentcorp 2.26% ----------------------------------------------------------------------- IndyMac Bancorp, Inc. 2.24% ----------------------------------------------------------------------- Renal Care Group, Inc. 2.13% ----------------------------------------------------------------------- Offshore Logistics, Inc. 1.82% ----------------------------------------------------------------------- Harris Corp. 1.82% ----------------------------------------------------------------------- Regal-Beloit Corp. 1.80% ----------------------------------------------------------------------- Park Electrochemical Corp. 1.70% ----------------------------------------------------------------------- Oceaneering Int'l., Inc. 1.68%
Sector Weightings vs. Index (As of 6/30/04) [CHART] The Guardian UBS Small Cap Value Fund Russell 2000 Value Index Financials 21.65% 21.22% Information Technology 19.03% 22.68% Industrials 17.67% 10.82% Consumer Discretionary 16.78% 13.70% Health Care 14.63% 12.07% Energy 4.20% 4.26% Materials 3.02% 8.50% Consumer Staples 2.29% 2.91% Utilities 0.73% 2.93% Telecommunication Services 0.00% 0.91% Average Annual Total Returns (For periods ended 6/30/04)
Inception Since Date YTD 1-Yr 3-Yr 5-Yr 10-Yr Inception - ----------------------------------------------------------------------------------------- Class A Shares (w/o sales charge) (2/3/03) 5.39 24.31 -- -- -- 18.72 (w/ sales charge) (2/3/03) 0.65 18.72 -- -- -- 24.82 - ----------------------------------------------------------------------------------------- Class B Shares (w/o sales charge) (2/3/03) 5.04 23.30 -- -- -- 28.00 (w/ sales charge) (2/3/03) 2.04 20.30 -- -- -- 38.38 - ----------------------------------------------------------------------------------------- Class C Shares (w/o sales charge) (2/3/03) 5.04 23.30 -- -- -- 28.00 (w/ sales charge) (2/3/03) 4.04 22.30 -- -- -- 28.00 - ----------------------------------------------------------------------------------------- Class K Shares (w/o sales charge) (2/3/03) 5.41 24.16 -- -- -- 28.79 (w/ sales charge) (2/3/03) 4.41 23.16 -- -- -- 27.79 - ----------------------------------------------------------------------------------------- Russell 2000 Value Index 7.83 35.17 -- -- -- 41.26 Since Class A shares inception
- -------------------------------------------------------------------------------- About information contained in this report: .. All performance data quoted is historical and the results represent past performance and neither guarantee nor predict future investment results. To obtain performance data current to the most recent month (availability within 7 business days of the most recent month end), please call us at 1-800-221-3253 or visit our website at www.guardianinvestor.com. Current performance may be higher or lower than the performance quoted here. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. .. It is important to consider the Fund's investment objectives, risks, fees and expenses carefully before investing. All funds involve some risk, including possible loss of principal amount invested. Small-cap investing entails special risks, as small-cap stocks have tended to be more volatile and to drop more in down markets than large-cap stocks. This may happen because small companies may be limited in terms of product lines, financial resources and management. .. Please see the "About Your Semiannual Report" page for a description of the Russell 2000 Value Index. .. Total return figures are historical and assume the reinvestment of dividends and distributions and the deduction of all Fund expenses. The return figures shown do not reflect the deduction of taxes that a shareholder may pay on distributions or redemption of shares. Total return figures for Class A shares do not take into account the current maximum sales charge of 4.5%, except where noted. Total return figures for Class B, Class C and Class K shares do not take into account the contingent deferred sales charge applicable to such shares (maximum 3% for Class B shares and 1% for Class C and Class K shares), except where noted. Please refer to the Financial Statements, accompanying Notes to Financial Statements, and Financial Highlights sections of this report for specific information about the fees and expenses borne by the Fund. - -------------------------------------------------------------------------------- 5 .. The Guardian Asset Allocation Fund Semiannual Report To Shareholders - -------------------------------------------------------------------------------- [PHOTO] Jonathan C. Jankus Jonathan C. Jankus, C.F.A., Co-Portfolio Manager [PHOTO] Stewart Johnson Stewart Johnson, Co-Portfolio Manager Objective: Long-term total investment return consistent with moderate investment risk Inception: February 16, 1993 Net assets at June 30, 2004: $162,488,991 Portfolio: Generally purchases shares of The Guardian S&P 500 Index, The Guardian Park Avenue, The Guardian Investment Quality Bond and/or The Guardian Cash Management Funds. Also invests in individual securities and uses futures to manage allocations among the equity, debt and money market asset classes. - -------------------------------------------------------------------------------- Portfolio Composition by Asset Class (As of 6/30/04) [CHART] The Guardian Asset The Guardian Asset Allocation Fund, Allocation Fund, June 30, 2004 December 31, 2003 Cash 0.37% 0.59% Fixed Income 0.05% 0.00% Common Stocks 99.58% 99.41% Average Annual Total Returns (For periods ended 6/30/04)
Inception Since Date YTD 1-Yr 3-Yr 5-Yr 10-Yr Inception - -------------------------------------------------------------------------------------------- Class A Shares (w/o sales charge) (2/16/93) 2.99 18.10 0.44 0.58 9.25 8.69 (w/ sales charge) (2/16/93) -1.64 12.79 -1.09 -0.34 8.75 8.25 - -------------------------------------------------------------------------------------------- Class B Shares (w/o sales charge) (5/1/96) 2.52 17.02 -0.44 -0.28 -- 6.54 (w/ sales charge) (5/1/96) -0.48 14.02 -1.11 -0.48 -- 6.54 - -------------------------------------------------------------------------------------------- Class C Shares (w/o sales charge) (8/7/00) 2.47 16.86 -0.69 -- -- -3.79 (w/ sales charge) (8/7/00) 1.47 15.86 -0.69 -- -- -3.79 - -------------------------------------------------------------------------------------------- Class K Shares (w/o sales charge) (5/15/01) 2.84 17.72 0.01 -- -- -1.28 (w/ sales charge) (5/15/01) 1.84 16.72 0.01 -- -- -1.28 - -------------------------------------------------------------------------------------------- Custom Index: 60% S&P 500 Index, 40% Lehman Aggregate Bond Index 2.13 11.36 2.50 1.76 10.38 9.55 Since Class A shares inception
.. The Custom Index total return data is comprised of 60% of the S&P 500 Index and 40% of the Lehman Brothers Aggregate Bond Index to reflect a 60/40 neutral weighting of the Fund. Please see the "About Your Semiannual Report" page for a description of the S&P 500 Index and the Lehman Brothers Aggregate Bond Index. - -------------------------------------------------------------------------------- About information contained in this report: .. All performance data quoted is historical and the results represent past performance and neither guarantee nor predict future investment results. To obtain performance data current to the most recent month (availability within 7 business days of the most recent month end), please call us at 1-800-221-3253 or visit our website at www.guardianinvestor.com. Current performance may be higher or lower than the performance quoted here. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. .. It is important to consider the Fund's investment objectives, risks, fees and expenses carefully before investing. All funds involve some risk, including possible loss of principal amount invested. .. Total return figures are historical and assume the reinvestment of dividends and distributions and the deduction of all Fund expenses. The return figures shown do not reflect the deduction of taxes that a shareholder may pay on distributions or redemption of shares. Total return figures for Class A shares do not take into account the current maximum sales charge of 4.5%, except where noted. Total return figures for Class B, Class C and Class K shares do not take into account the contingent deferred sales charge applicable to such shares (maximum 3% for Class B shares and 1% for Class C and Class K shares), except where noted. Please refer to the Financial Statements, accompanying Notes to Financial Statements, and Financial Highlights sections of this report for specific information about the fees and expenses borne by the Fund. - -------------------------------------------------------------------------------- 6 .. The Guardian S&P 500 Index Fund Semiannual Report To Shareholders - -------------------------------------------------------------------------------- [PHOTO] Jonathan C. Jankus Jonathon C. Jankus, C.F.A., Co-Portfolio Manager [PHOTO] Stewart Johnson Stewart Johnson, Co-Portfolio Manager Objective: Seeks to track the investment performance of the Standard & Poor's 500 Composite Stock Price Index ("the S&P 500 Index") Inception: August 7, 2000 Net assets at June 30, 2004: $167,090,121 Portfolio: Common stocks of companies included in the S&P 500 Index, which emphasizes securities issued by large U.S. companies - -------------------------------------------------------------------------------- Top Ten Holdings (As of 6/30/04)
Percentage of Company Total Net Assets ----------------------------------------------------------------------- General Electric Co. 3.01% ----------------------------------------------------------------------- Microsoft Corp. 2.84% ----------------------------------------------------------------------- Exxon Mobil Corp. 2.68% ----------------------------------------------------------------------- Pfizer, Inc. 2.42% ----------------------------------------------------------------------- Citigroup, Inc. 2.19% ----------------------------------------------------------------------- Wal-Mart Stores, Inc. 2.09% ----------------------------------------------------------------------- American Int'l. Group, Inc. 1.71% ----------------------------------------------------------------------- Intel Corp. 1.65% ----------------------------------------------------------------------- Bank of America Corp. 1.59% ----------------------------------------------------------------------- Johnson & Johnson 1.51%
Sector Weightings vs. Index (As of 6/30/04) [CHART] The Guardian S&P 500 Index Fund S&P 500 Index Financials 20.26% 20.28% Information Technology 17.18% 17.23% Health Care 13.25% 13.31% Consumer Discretionary 10.80% 10.94% Consumer Staples 11.19% 11.14% Industrial 11.41% 11.47% Energy 6.32% 6.57% Telecommunication Services 3.41% 3.42% Materials 3.02% 2.97% Utilities 2.82% 2.67% Cash 0.34% 0.00% Average Annual Total Returns (For periods ended 6/30/04)
Inception Since Date YTD 1-Yr 3-Yr 5-Yr 10-Yr Inception - ------------------------------------------------------------------------------------------- Class A Shares (w/o sales charge) (8/7/00) 3.08 18.35 -1.20 -- -- -5.37 (w/ sales charge) (8/7/00) -1.56 13.02 -2.70 -- -- -6.48 - ------------------------------------------------------------------------------------------- Class B Shares (w/o sales charge) (8/7/00) 2.78 17.54 -2.03 -- -- -6.15 (w/ sales charge) (8/7/00) -0.22 14.54 -2.69 -- -- -6.64 - ------------------------------------------------------------------------------------------- Class C Shares (w/o sales charge) (8/7/00) 2.77 17.56 -2.07 -- -- -6.18 (w/ sales charge) (8/7/00) 1.77 16.56 -2.07 -- -- -6.18 - ------------------------------------------------------------------------------------------- Class K Shares (w/o sales charge) (5/15/01) 2.91 17.89 -1.72 -- -- -3.13 (w/ sales charge) (5/15/01) 1.91 16.89 -1.72 -- -- -3.13 - ------------------------------------------------------------------------------------------- S&P 500 Index 3.44 19.11 -0.69 -- -- -4.98 Since Class A shares inception
- -------------------------------------------------------------------------------- About information contained in this report: .. All performance data quoted is historical and the results represent past performance and neither guarantee nor predict future investment results. To obtain performance data current to the most recent month (availability within 7 business days of the most recent month end), please call us at 1-800-221-3253 or visit our website at www.guardianinvestor.com. Current performance may be higher or lower than the performance quoted here. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. .. It is important to consider the Fund's investment objectives, risks, fees and expenses carefully before investing. All funds involve some risk, including possible loss of principal amount invested. .. Please see the "About Your Semiannual Report" page for a description of the S&P 500 Index. .. Total return figures are historical and assume the reinvestment of dividends and distributions and the deduction of all Fund expenses. The return figures shown do not reflect the deduction of taxes that a shareholder may pay on distributions or redemption of shares. Total return figures for Class A shares do not take into account the current maximum sales charge of 4.5%, except where noted. Total return figures for Class B, Class C and Class K shares do not take into account the contingent deferred sales charge applicable to such shares (maximum 3% for Class B shares and 1% for Class C and Class K shares), except where noted. Please refer to the Financial Statements, accompanying Notes to Financial Statements, and Financial Highlights sections of this report for specific information about the fees and expenses borne by the Fund. - -------------------------------------------------------------------------------- 7 .. The Guardian Baillie Gifford International Growth Fund Semiannual Report To Shareholders - -------------------------------------------------------------------------------- [PHOTO] Menzies R. Robin Menzies, Portfolio Manager Objective: Long-term growth of capital Inception: February 16, 1993 Net assets at June 30, 2004: $50,610,040 Portfolio: At least 80% in a diversified portfolio of common stocks and convertible securities of companies domiciled outside the United States - -------------------------------------------------------------------------------- Top Ten Holdings (As of 6/30/04)
Percentage of Company Country Total Net Assets - ------------------------------------------------------------------------------------- Vodafone Group United Kingdom 3.37% - ------------------------------------------------------------------------------------- Total S.A. France 2.82% - ------------------------------------------------------------------------------------- BP PLC United Kingdom 2.70% - ------------------------------------------------------------------------------------- Nokia OYJ Finland 2.67% - ------------------------------------------------------------------------------------- Imperial Tobacco United Kingdom 2.60% - ------------------------------------------------------------------------------------- Asahi Glass Co. Japan 2.09% - ------------------------------------------------------------------------------------- L'Oreal S.A. France 2.07% - ------------------------------------------------------------------------------------- GlaxoSmithKline PLC United Kingdom 2.04% - ------------------------------------------------------------------------------------- UBS AG Switzerland 1.96% - ------------------------------------------------------------------------------------- Porsche AG Germany 1.91%
Sector Weightings vs. Index (As of 6/30/04) [CHART] The Guardian Baillie Gifford MSCI EAFE International Growth Fund Growth Index Financials 20.1% 15.6% Information Technology 14.7% 12.1% Industrials 12.1% 10.5% Consumer Discretionary 13.9% 13.4% Health Care 6.3% 14.2% Consumer Staples 11.0% 11.7% Energy 10.1% 3.9% Materials 4.1% 5.6% Utilities 0.0% 2.3% Telecommunication Services 5.8% 10.7% Cash 1.9% 0.0% Average Annual Total Returns (For periods ended 6/30/04)
Inception Since Date YTD 1-Yr 3-Yr 5-Yr 10-Yr Inception - -------------------------------------------------------------------------------------------- Class A Shares (w/o sales charge) (2/16/93) 2.04 21.24 -1.91 -3.70 3.65 5.59 (w/ sales charge) (2/16/93) -2.55 15.78 -3.40 -4.58 3.17 5.16 - -------------------------------------------------------------------------------------------- Class B Shares (w/o sales charge) (5/1/96) 1.53 20.02 -3.04 -4.74 -- 1.03 (w/ sales charge) (5/1/96) -1.47 17.02 -3.69 -4.93 -- 1.03 - -------------------------------------------------------------------------------------------- Class C Shares (w/o sales charge) (8/7/00) 1.62 19.95 -3.01 -- -- -8.97 (w/ sales charge) (8/7/00) 0.62 18.95 -3.01 -- -- -8.97 - -------------------------------------------------------------------------------------------- Class K Shares (w/o sales charge) (5/15/01) 2.05 21.12 -2.04 -- -- -3.78 (w/ sales charge) (5/15/01) 1.05 20.12 -2.04 -- -- -3.78 - -------------------------------------------------------------------------------------------- MSCI EAFE Growth Index 2.72 26.80 2.06 -3.02 2.04 4.40 Since Class A shares inception
- -------------------------------------------------------------------------------- About information contained in this report: .. All performance data quoted is historical and the results represent past performance and neither guarantee nor predict future investment results. To obtain performance data current to the most recent month (availability within 7 business days of the most recent month end), please call us at 1-800-221-3253 or visit our website at www.guardianinvestor.com. Current performance may be higher or lower than the performance quoted here. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. .. It is important to consider the Fund's investment objectives, risks, fees and expenses carefully before investing. All funds involve some risk, including possible loss of principal amount invested. .. Please see the "About Your Semiannual Report" page for a description of the Morgan Stanley Capital International (MSCI) Europe, Australasia and Far East (EAFE) Growth Index. .. Total return figures are historical and assume the reinvestment of dividends and distributions and the deduction of all Fund expenses. The return figures shown do not reflect the deduction of taxes that a shareholder may pay on distributions or redemption of shares. Total return figures for Class A shares do not take into account the current maximum sales charge of 4.5%, except where noted. Total return figures for Class B, Class C and Class K shares do not take into account the contingent deferred sales charge applicable to such shares (maximum 3% for Class B shares and 1% for Class C and Class K shares), except where noted. .. International investing has special risks relating to changes in currency rates, foreign taxation, differences in auditing and other financial standards, political uncertainty and greater volatility. Please refer to the Financial Statements, accompanying Notes to Financial Statements, and Financial Highlights sections of this report for specific information about the fees and expenses borne by the Fund. .. Prior to May 1, 2004, this Fund was known as The Guardian Baillie Gifford International Fund. - -------------------------------------------------------------------------------- 8 .. The Guardian Baillie Gifford Emerging Markets Fund Semiannual Report To Shareholders - -------------------------------------------------------------------------------- [PHOTO] Edward H. Hocknell Edward H. Hocknell, Portfolio Manager Objective: Long-term capital appreciation Inception: May 1, 1997 Net assets at June 30, 2004: $79,520,309 Portfolio: At least 80% in a portfolio of common stocks and convertible securities issued by companies in emerging markets - -------------------------------------------------------------------------------- Top Ten Holdings (As of 6/30/04)
Percentage of Company Country Total Net Assets - -------------------------------------------------------------------------------------- Samsung Electronics Co. Ltd. South Korea 3.56% - -------------------------------------------------------------------------------------- America Movil S.A. de C.V. ADR Mexico 2.88% - -------------------------------------------------------------------------------------- Sasol Ltd. South Africa 2.82% - -------------------------------------------------------------------------------------- Samsung Corp. South Korea 2.61% - -------------------------------------------------------------------------------------- LUKOIL ADR Russia 2.59% - -------------------------------------------------------------------------------------- Hon Hai Precision Inds. Co. Ltd. Taiwan 2.26% - -------------------------------------------------------------------------------------- Telecom. Norte Leste Participacoes ADR Brazil 2.12% - -------------------------------------------------------------------------------------- Turkiye Garanti Bankasi AS Turkey 2.10% - -------------------------------------------------------------------------------------- Anglo American Platinum Corp. South Africa 2.02% - -------------------------------------------------------------------------------------- Itausa-Investimentos Itau S.A. Brazil 1.97%
Sector Weightings vs. Index (As of 6/30/04) [CHART] The Guardian Baillie Gifford Emerging Markets Fund MSCI EMF Index Materials 18.2% 15.8% Telecommunication Services 16.8% 12.0% Energy 13.4% 11.7% Industrials 11.3% 6.8% Information Technology 11.2% 16.7% Financials 10.5% 17.5% Consumer Discretionary 8.9% 7.3% Consumer Staples 5.3% 5.8% Cash 2.0% 0.0% Health Care 1.7% 3.1% Utilities 0.7% 3.3% Average Annual Total Returns (For periods ended 6/30/04)
Inception Since Date YTD 1-Yr 3-Yr 5-Yr 10-Yr Inception - ------------------------------------------------------------------------------------------- Class A Shares (w/o sales charge) (5/1/97) -1.70 32.24 11.95 8.70 -- 3.04 (w/ sales charge) (5/1/97) -6.12 26.29 10.24 7.70 -- 2.38 - ------------------------------------------------------------------------------------------- Class B Shares (w/o sales charge) (5/6/97) -2.19 30.72 10.69 7.13 -- 1.17 (w/ sales charge) (5/6/97) -5.12 27.72 10.14 6.98 -- 1.17 - ------------------------------------------------------------------------------------------- Class C Shares (w/o sales charge) (8/7/00) -2.18 30.77 10.79 -- -- 3.21 (w/ sales charge) (8/7/00) -3.16 29.77 10.79 -- -- 3.21 - ------------------------------------------------------------------------------------------- Class K Shares (w/o sales charge) (5/15/01) -1.87 31.74 11.63 -- -- 11.97 (w/ sales charge) (5/15/01) -2.85 30.74 11.63 -- -- 11.97 - ------------------------------------------------------------------------------------------- MSCI EMF Index -0.78 33.51 13.10 3.27 -- -0.03 Since Class A shares inception
- -------------------------------------------------------------------------------- About information contained in this report: .. All performance data quoted is historical and the results represent past performance and neither guarantee nor predict future investment results. To obtain performance data current to the most recent month (availability within 7 business days of the most recent month end), please call us at 1-800-221-3253 or visit our website at www.guardianinvestor.com. Current performance may be higher or lower than the performance quoted here. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. .. It is important to consider the Fund's investment objectives, risks, fees and expenses carefully before investing. All funds involve some risk, including possible loss of principal amount invested. International investing has special risks relating to changes in currency rates, foreign taxation, differences in auditing and other financial standards, political uncertainty and greater volatility. These risks are even greater when investing in emerging markets. .. Please see the "About Your Semiannual Report" page for a description of the Morgan Stanley Capital International (MSCI) Emerging Markets Free (EMF) Index. .. Total return figures are historical and assume the reinvestment of dividends and distributions and the deduction of all Fund expenses. The return figures shown do not reflect the deduction of taxes that a shareholder may pay on distributions or redemption of shares. Total return figures for Class A shares do not take into account the current maximum sales charge of 4.5%, except where noted. Total return figures for Class B, Class C and Class K shares do not take into account the contingent deferred sales charge applicable to such shares (maximum 3% for Class B shares and 1% for Class C and Class K shares), except where noted. Please refer to the Financial Statements, accompanying Notes to Financial Statements, and Financial Highlights sections of this report for specific information about the fees and expenses borne by the Fund. - -------------------------------------------------------------------------------- 9 .. The Guardian Investment Quality Bond Fund Semiannual Report To Shareholders - -------------------------------------------------------------------------------- [PHOTO] Howard W. Chin Howard W. Chin, Co-Portfolio Manager [PHOTO] Rob Crimmins Robert Crimmins, Co-Portfolio Manager Objective: High level of current income and capital appreciation without undue risk to principal Inception: February 16, 1993 Net assets at June 30, 2004: $160,879,801 Portfolio: At least 80% in different kinds of investment grade bonds, such as corporate bonds, mortgage-backed and asset-backed securities, and obligations of the U.S. government and its agencies - -------------------------------------------------------------------------------- Top Ten Holdings (As of 6/30/04)
Maturity Percentage of Company Coupon Date Total Net Assets - -------------------------------------------------------------------------------------- U.S. Treasury Notes 4.375% 5/15/2007 5.36% - -------------------------------------------------------------------------------------- FHLMC 5.500% 12/1/2033 4.28% - -------------------------------------------------------------------------------------- U.S. Treasury Bonds 6.000% 2/15/2026 3.84% - -------------------------------------------------------------------------------------- FNMA (30 yr. TBA) 5.000% N/A 3.30% - -------------------------------------------------------------------------------------- Citigroup Global Markets Hldgs, Inc. 1.100% 7/15/2004 3.11% - -------------------------------------------------------------------------------------- FHLMC 5.500% 12/1/2033 2.68% - -------------------------------------------------------------------------------------- U.S. Treasury Notes 4.750% 5/15/2014 2.31% - -------------------------------------------------------------------------------------- FNMA (30 yr. TBA) 5.500% N/A 2.29% - -------------------------------------------------------------------------------------- FNMA 3.250% 1/15/2008 2.20% - -------------------------------------------------------------------------------------- Proctor & Gamble Co. 1.020% 7/15/2004 2.05%
Sector Allocation (As of 6/30/04) [CHART] The Guardian Investment The Guardian Investment Quality Bond Fund, Quality Bond Fund, June 30, 2004 December 31, 2003 Mortgage Backed Securities 37.06% 38.03% Corporate Notes/Bonds 26.14% 35.69% Treasury Notes/Bonds 13.77% 1.94% CMOs 6.81% 4.37% CMBs 3.86% 9.18% Short-Term 4.90% 0.78% Asset Backed Securities 4.76% 5.98% Govt. Agencies 2.70% 4.03% Average Annual Total Returns (For periods ended 6/30/04)
Inception Since Date YTD 1-Yr 3-Yr 5-Yr 10-Yr Inception - ------------------------------------------------------------------------------------------- Class A Shares (w/o sales charge) (2/16/93) 0.01 0.19 6.17 6.45 6.58 5.81 (w/ sales charge) (2/16/93) -4.49 -4.32 4.55 5.47 6.09 5.38 - ------------------------------------------------------------------------------------------- Class B Shares (w/o sales charge) (8/7/00) -0.36 -0.47 5.41 -- -- 6.15 (w/ sales charge) (8/7/00) -3.35 -3.46 4.81 -- -- 5.72 - ------------------------------------------------------------------------------------------- Class C Shares (w/o sales charge) (8/7/00) -0.36 -0.56 5.42 -- -- 6.15 (w/ sales charge) (8/7/00) -1.36 -1.55 5.42 -- -- 6.15 - ------------------------------------------------------------------------------------------- Class K Shares (w/o sales charge) (5/15/01) -0.19 -0.21 5.75 -- -- 5.71 (w/ sales charge) (5/15/01) -1.19 -1.21 5.75 -- -- 5.71 - ------------------------------------------------------------------------------------------- Lehman Brothers Aggregate Bond Index 0.15 0.32 6.36 6.95 7.39 6.75 Since Class A shares inception
- -------------------------------------------------------------------------------- About information contained in this report: .. All performance data quoted is historical and the results represent past performance and neither guarantee nor predict future investment results. To obtain performance data current to the most recent month (availability within 7 business days of the most recent month end), please call us at 1-800-221-3253 or visit our website at www.guardianinvestor.com. Current performance may be higher or lower than the performance quoted here. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. .. It is important to consider the Fund's investment objectives, risks, fees and expenses carefully before investing. All funds involve some risk, including possible loss of principal amount invested. Investing in bond funds exposes you to the general risk of investing in the debt markets. Duration is a measure of bond price sensitivity to a given change in interest rates. Generally, the lower a bond's duration, the greater its price sensitivity to a given change in interest rates. Bond funds are subject to interest rate risk. When interest rates rise, bond prices generally fall, and when interest rates fall, bond prices generally rise. Currently, interest rates are at historically low levels. Please keep in mind that in this kind of environment, the risk that bond prices may fall when interest rates rise is potentially greater. .. Please see the "About Your Semiannual Report" page for a description of the Lehman Brothers Aggregate Bond Index. .. Total return figures are historical and assume the reinvestment of dividends and distributions and the deduction of all Fund expenses. The return figures shown do not reflect the deduction of taxes that a shareholder may pay on distributions or redemption of shares. Total return figures for Class A shares do not take into account the current maximum sales charge of 4.5%, except where noted. Total return figures for Class B, Class C and Class K shares do not take into account the contingent deferred sales charge applicable to such shares (maximum 3% for Class B shares and 1% for Class C and Class K shares), except where noted. Since June 1, 1994, the investment adviser for the Fund has assumed certain ordinary operating expenses for the Fund. Without this assumption of expenses, returns would have been lower. Please refer to the Financial Statements, accompanying Notes to Financial Statements, and Financial Highlights sections of this report for specific information about the fees and expenses borne by the Fund. - -------------------------------------------------------------------------------- 10 .. The Guardian Low Duration Bond Fund Semiannual Report To Shareholders - -------------------------------------------------------------------------------- [PHOTO] Howard W. Chin Howard W. Chin, Co-Portfolio Manager [PHOTO] Rob Crimmins Robert Crimmins, Co-Portfolio Manager Objective: Seeks a high level of current income, consistent with preservation of capital Inception: July 30, 2003 Net assets at June 30, 2004: $32,351,844 Portfolio: At least 80% in investment grade corporate and government bonds, and asset- and mortgage-backed securities - -------------------------------------------------------------------------------- Top Ten Holdings (As of 6/30/04)
Maturity Percentage of Company Coupon Date Total Net Assets - ------------------------------------------------------------------------------------------- U.S. Treasury Notes 3.375% 12/15/2008 7.35% - ------------------------------------------------------------------------------------------- U.S. Treasury Notes 2.625% 3/15/2009 6.98% - ------------------------------------------------------------------------------------------- Time Warner, Inc. 5.625% 5/1/2005 3.17% - ------------------------------------------------------------------------------------------- Residential Asset Mtg. Prods., Inc. 2.140% 2/25/2030 1.83% - ------------------------------------------------------------------------------------------- Cox Comm., Inc. 7.750% 8/15/2006 1.68% - ------------------------------------------------------------------------------------------- Avalon Bay Communities, Inc. 6.800% 7/15/2006 1.67% - ------------------------------------------------------------------------------------------- British Telecom. PLC 7.875% 12/15/2005 1.65% - ------------------------------------------------------------------------------------------- Northrop Grumman Corp. 7.000% 3/1/2006 1.64% - ------------------------------------------------------------------------------------------- Nisource Fin. Corp. 7.625% 11/15/2005 1.64% - ------------------------------------------------------------------------------------------- MBNA America Bank NA 6.500% 6/20/2006 1.64%
Sector Allocation (As of 6/30/04) [CHART] The Guardian Low Duration The Guardian Low Duration Bond Fund, Bond Fund, June 30, 2004 December 31, 2003 Corporate Notes/Bonds 67.25% 72.79% Treasury Notes/Bonds 15.91% 10.90% Asset Backeds 7.19% 8.26% CMOs 6.56% 4.44% CMBs 2.22% 1.79% Taxable Municipals 0.00% 1.62% Short-Term 0.87% 0.20% Average Annual Total Returns (For periods ended 6/30/04)
Inception Since Date YTD 1-Yr 3-Yr 5-Yr 10-Yr Inception - ---------------------------------------------------------------------------------------------- Class A Shares (w/o sales charge) (7/30/03) 0.21 -- -- -- -- 1.20 (w/ sales charge) (7/30/03) -4.30 -- -- -- -- -3.35 - ---------------------------------------------------------------------------------------------- Class B Shares (w/o sales charge) (7/30/03) -0.16 -- -- -- -- 0.51 (w/ sales charge) (7/30/03) -3.16 -- -- -- -- -2.49 - ---------------------------------------------------------------------------------------------- Class C Shares (w/o sales charge) (7/30/03) -0.16 -- -- -- -- 0.51 (w/ sales charge) (7/30/03) -1.16 -- -- -- -- -0.49 - ---------------------------------------------------------------------------------------------- Class K Shares (w/o sales charge) (7/30/03) 0.01 -- -- -- -- 0.83 (w/ sales charge) (7/30/03) -0.99 -- -- -- -- -0.17 - ---------------------------------------------------------------------------------------------- Lehman Brothers U.S. Government 1-3 Year Bond Index 0.28 -- -- -- -- 0.90 Since Class A shares inception
- -------------------------------------------------------------------------------- About information contained in this report: .. All performance data quoted is historical and the results represent past performance and neither guarantee nor predict future investment results. To obtain performance data current to the most recent month (availability within 7 business days of the most recent month end), please call us at 1-800-221-3253 or visit our website at www.guardianinvestor.com. Current performance may be higher or lower than the performance quoted here. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. .. It is important to consider the Fund's investment objectives, risks, fees and expenses carefully before investing. All funds involve some risk, including possible loss of principal amount invested. Investing in bond funds exposes you to the general risk of investing in the debt markets. Duration is a measure of bond price sensitivity to a given change in interest rates. Generally, the lower a bond's duration, the greater its price sensitivity to a given change in interest rates. Bond funds are subject to interest rate risk. When interest rates rise, bond prices generally fall, and when interest rates fall, bond prices generally rise. Currently, interest rates are at historically low levels. Please keep in mind that in this kind of environment, the risk that bond prices may fall when interest rates rise is potentially greater. .. Low duration bond funds may not be a suitable alternative to money market funds because, unlike money market funds, low duration bond funds do not seek to maintain a stable net asset value and, as a result, are a riskier asset class. .. Please see the "About Your Semiannual Report" page for a description of the Lehman Brothers U.S. Government 1-3 Year Bond Index. .. Total return figures are historical and assume the reinvestment of dividends and distributions and the deduction of all Fund expenses. The return figures shown do not reflect the deduction of taxes that a shareholder may pay on distributions or redemption of shares. Total return figures for Class A shares do not take into account the current maximum sales charge of 4.5%, except where noted. Total return figures for Class B, Class C and Class K shares do not take into account the contingent deferred sales charge applicable to such shares (maximum 3% for Class B shares and 1% for Class C and Class K shares), except where noted. Please refer to the Financial Statements, accompanying Notes to Financial Statements, and Financial Highlights section of this report for specific information about the fees and expenses borne by the Fund. - -------------------------------------------------------------------------------- 11 .. The Guardian High Yield Bond Fund Semiannual Report To Shareholders - -------------------------------------------------------------------------------- [PHOTO] Peter J.Liebst Peter J. Liebst, Portfolio Manager Objective: Seeks current income. Capital appreciation is a secondary objective. Inception: September 1, 1998 Net assets at June 30, 2004: $71,751,151 Portfolio: At least 80% is invested in corporate bonds and other debt securities that, at the time of purchase, are rated below investment grade or are unrated. - -------------------------------------------------------------------------------- Top Ten Holdings (As of 6/30/04)
Maturity Percentage of Company Coupon Date Total Net Assets - -------------------------------------------------------------------------------------- Allegheny Energy Supply 7.800% 3/15/2011 2.03% - -------------------------------------------------------------------------------------- Sierra Pacific Resources 8.625% 3/15/2014 1.82% - -------------------------------------------------------------------------------------- Houghton Mifflin Co. 9.875% 2/1/2013 1.45% - -------------------------------------------------------------------------------------- Merisant Co. 9.500% 7/15/2013 1.44% - -------------------------------------------------------------------------------------- Six Flags, Inc. 9.625% 6/1/2014 1.39% - -------------------------------------------------------------------------------------- Premium Standard Farms, Inc. 9.250% 6/15/2011 1.39% - -------------------------------------------------------------------------------------- United Rentals NA, Inc. 7.750% 11/15/2013 1.37% - -------------------------------------------------------------------------------------- Jafra Cosmetics 10.750% 5/15/2011 1.29% - -------------------------------------------------------------------------------------- El Paso Production Hldg. 7.750% 6/1/2013 1.23% - -------------------------------------------------------------------------------------- Charter Comm. Hldgs. 10.250% 1/15/2010 1.20%
Bond Quality (As of 6/30/04) [CHART] The Guardian High Yield The Guardian High Yield Bond Fund, Bond Fund, June 30, 2004 December 31, 2003 Short-Term 6.42% 2.08% BBB 0.00% 0.98% BB 17.80% 19.77% B 64.94% 70.85% CCC 10.84% 6.32% Average Annual Total Returns (For periods ended 6/30/04)
Inception Since Date YTD 1-Yr 3-Yr 5-Yr 10-Yr Inception - --------------------------------------------------------------------------------------------- Class A Shares (w/o sales charge) (9/1/98) 1.23 8.71 7.74 3.33 -- 4.47 (w/ sales charge) (9/1/98) -3.33 3.82 6.10 2.38 -- 3.65 - --------------------------------------------------------------------------------------------- Class B Shares (w/o sales charge) (9/1/98) 0.86 8.06 6.98 2.49 -- 3.54 (w/ sales charge) (9/1/98) -2.14 5.06 6.39 2.31 -- 3.39 - --------------------------------------------------------------------------------------------- Class C Shares (w/o sales charge) (6/7/00) 0.86 8.06 6.98 -- -- 3.71 (w/ sales charge) (6/7/00) -0.14 7.06 6.98 -- -- 3.71 - --------------------------------------------------------------------------------------------- Class K Shares (w/o sales charge) (5/15/01) 1.17 8.43 7.36 -- -- 6.26 (w/ sales charge) (5/15/01) 0.17 7.43 7.36 -- -- 6.26 - --------------------------------------------------------------------------------------------- Lehman Brothers Corporate High Yield Bond Index 1.36 10.33 9.30 5.06 -- 5.18 Since Class A shares inception
- -------------------------------------------------------------------------------- About information contained in this report: .. All performance data quoted is historical and the results represent past performance and neither guarantee nor predict future investment results. To obtain performance data current to the most recent month (availability within 7 business days of the most recent month end), please call us at 1-800-221-3253 or visit our website at www.guardianinvestor.com. Current performance may be higher or lower than the performance quoted here. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. .. It is important to consider the Fund's investment objectives, risks, fees and expenses carefully before investing. All funds involve some risk, including possible loss of principal amount invested. Investing in bond funds exposes you to the general risk of investing in the debt markets. Duration is a measure of bond price sensitivity to a given change in interest rates. Generally, the lower a bond's duration, the greater its price sensitivity to a given change in interest rates. Bond funds are subject to interest rate risk. When interest rates rise, bond prices generally fall, and when interest rates fall, bond prices generally rise. Currently, interest rates are at historically low levels. Please keep in mind that in this kind of environment, the risk that bond prices may fall when interest rates rise is potentially greater. .. Investing in high yield bonds involves special risks because investments in lower rated and unrated debt securities are subject to greater loss of principal and interest than higher rated securities. .. Please see the "About Your Semiannual Report" page for a description of the Lehman Brothers Corporate High Yield Bond Index. .. Total return figures are historical and assume the reinvestment of dividends and distributions and the deduction of all Fund expenses. The return figures shown do not reflect the deduction of taxes that a shareholder may pay on distributions or redemption of shares. Total return figures for Class A shares do not take into account the current maximum sales charge of 4.5%, except where noted. Total return figures for Class B, Class C and Class K shares do not take into account the contingent deferred sales charge applicable to such shares (maximum 3% for Class B shares and 1% for Class C and Class K shares), except where noted. Please refer to the Financial Statements, accompanying Notes to Financial Statements, and Financial Highlights sections of this report for specific information about the fees and expenses borne by the Fund. - -------------------------------------------------------------------------------- 12 .. The Guardian Tax-Exempt Fund Semiannual Report To Shareholders - -------------------------------------------------------------------------------- [PHOTO] Alexander M. Grant, Jr. Alexander M. Grant, Jr., Portfolio Manager Objective: Seeks to maximize current income exempt from federal income taxes, consistent with the preservation of capital Inception: February 16, 1993 Net assets at June 30, 2004: $87,947,358 Portfolio: At least 80% in investment grade municipal debt obligations - -------------------------------------------------------------------------------- Top Ten Holdings (As of 6/30/04)
Maturity Percentage of Company Coupon Date Total Net Assets - ------------------------------------------------------------------------------------- California St. Dept. Wtr. Resources Pwr. Supply Rev. 1.040% 5/1/2022 4.55% - ------------------------------------------------------------------------------------- New York St. Housing Fin. Agy. Rev. 6.000% 11/1/2006 3.89% - ------------------------------------------------------------------------------------- California St. Econ. G.O. Ser. B 5.000% 7/1/2023 3.68% - ------------------------------------------------------------------------------------- Fairfax Cnty., VA Ref. Pub. Impt. Ser. A 4.250% 6/1/2008 3.59% - ------------------------------------------------------------------------------------- Illinois St. Unemployment Insurance 5.000% 12/15/2007 3.04% - ------------------------------------------------------------------------------------- Puerto Rico Pub. Bldgs. Auth. Rev. Ref. Gov't. Facs. Ser. K 4.500% 7/1/2022 2.84% - ------------------------------------------------------------------------------------- Puerto Rico Pub. Fin. Corp. Comwlth. Approp. Ser. A 5.750% 8/1/2027 2.49% - ------------------------------------------------------------------------------------- Florida St. Brd. of Ed. Lottery Rev. Ser. A 5.500% 7/1/2017 2.46% - ------------------------------------------------------------------------------------- Harris Cnty., TX Ref. Ser. B 5.000% 8/15/2032 2.45% - ------------------------------------------------------------------------------------- Puerto Rico Pub. Bldgs. Auth. Rev. Ref. Gov't. Facs. Ser. J 5.000% 7/1/2036 2.45%
Sector Allocation (As of 6/30/04) [CHART] The Guardian The Guardian Tax-Exempt Fund, Tax-Exempt Fund, June 30, 2004 December 31, 2003 Insured Bonds 45.38% 52.07% Revenue Bonds 32.27% 27.10% State General Obligation Bonds 10.08% 4.72% Local General Obligation Bonds 7.43% 14.31% Short-Term 4.84% 1.80% Average Annual Total Returns (For periods ended 6/30/04)
Inception Since Date YTD 1-Yr 3-Yr 5-Yr 10-Yr Inception - ------------------------------------------------------------------------------------------- Class A Shares (w/o sales charge) (2/16/93) -1.39 -0.52 5.45 5.80 5.88 5.03 (w/ sales charge) (2/16/93) -5.83 -5.00 3.84 4.83 5.39 4.61 - ------------------------------------------------------------------------------------------- Class C Shares (w/o sales charge) (8/7/00) -1.76 -1.27 4.66 -- -- 5.34 (w/ sales charge) (8/7/00) -2.74 -2.26 4.66 -- -- 5.34 - ------------------------------------------------------------------------------------------- Lehman Brothers Municipal Bond Index -0.68 0.76 5.42 5.87 6.44 6.08 Since Class A shares inception
- -------------------------------------------------------------------------------- About information contained in this report: .. All performance data quoted is historical and the results represent past performance and neither guarantee nor predict future investment results. To obtain performance data current to the most recent month (availability within 7 business days of the most recent month end), please call us at 1-800-221-3253 or visit our website at www.guardianinvestor.com. Current performance may be higher or lower than the performance quoted here. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. .. It is important to consider the Fund's investment objectives, risks, fees and expenses carefully before investing. All funds involve some risk, including possible loss of principal amount invested. .. Please see the "About Your Semiannual Report" page for a description of the Lehman Brothers Municipal Bond Index. .. Total return figures are historical and assume the reinvestment of dividends and distributions and the deduction of all Fund expenses. The return figures shown do not reflect the deduction of taxes that a shareholder may pay on redemption of shares. Total return figures for Class A shares do not take into account the current maximum sales charge of 4.5%, except where noted. Total return figures for Class C shares do not take into account the contingent deferred sales charges applicable to such shares (maximum of 1%) except where noted. Since June 1, 1994, the investment adviser for the Fund has assumed certain ordinary operating expenses for the Fund. Without this assumption of expenses, returns would have been lower. Please refer to the Financial Statements, accompanying Notes to Financial Statements, and Financial Highlights sections of this report for specific information about the fees and expenses borne by the Fund. - -------------------------------------------------------------------------------- 13 .. The Guardian Cash Management Fund Semiannual Report To Shareholders - -------------------------------------------------------------------------------- [PHOTO] Alexander M. Grant, Jr. Alexander M. Grant, Jr., Portfolio Manager Objective: Seeks as high a level of current income as is consistent with liquidity and preservation of capital Inception: November 3, 1982 Net assets at June 30, 2004: $497,405,816 Portfolio: Short-term money market investments - -------------------------------------------------------------------------------- Sector Allocation (As of 6/30/04) [CHART] The Guardian Cash Management Fund Repurchase Agreements 9.19% Taxable Municipals 21.65% Commercial Paper 69.16% Portfolio Statistics (As of 6/30/04) Average Maturity (days) 30 - -------------------------------------------------------- Effective 7-day yield With subsidy 0.32% Without subsidy 0.26% - -------------------------------------------------------- Current 7-day yield With subsidy 0.32% Without subsidy 0.26%
Annualized historical yields for the 7-day periods ended June 30, 2004. Effective yield assumes reinvested income. Yields will vary as interest rates change. Average Annual Total Returns (For periods ended 6/30/04)
Inception Since Date YTD 1-Yr 3-Yr 5-Yr 10-Yr Inception - -------------------------------------------------------------------------------------------- Class A Shares (w/o sales charge) (11/3/82) 0.13 0.26 0.85 2.54 3.62 5.13 - -------------------------------------------------------------------------------------------- Class B Shares (w/o sales charge) (5/1/96) 0.13 0.25 0.42 2.13 -- 3.07 (w/ sales charge) (5/1/96) -2.87 -2.75 -0.25 1.95 -- 3.07 - -------------------------------------------------------------------------------------------- Class C Shares (w/o sales charge) (8/7/00) 0.13 0.25 0.42 -- -- 1.29 (w/ sales charge) (8/7/00) -0.87 -0.75 0.42 -- -- 1.29 - -------------------------------------------------------------------------------------------- Class K Shares (w/o sales charge) (5/15/01) 0.08 0.16 0.57 -- -- 0.66 (w/ sales charge) (5/15/01) -0.92 -0.84 0.57 -- -- 0.66 - -------------------------------------------------------------------------------------------- Lehman Brothers 3 Month T-Bill Index 0.47 0.97 1.71 3.31 4.36 5.67 Since Class A shares Inception
- -------------------------------------------------------------------------------- About information contained in this report: .. All performance data quoted is historical and the results represent past performance and neither guarantee nor predict future investment results. To obtain performance data current to the most recent month (availability within 7 business days of the most recent month end), please call us at 1-800-221-3253 or visit our website at www.guardianinvestor.com. Current performance may be higher or lower than the performance quoted here. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. .. It is important to consider the Fund's investment objectives, risks, fees and expenses carefully before investing. All funds involve some risk, including possible loss of principal amount invested. .. Please see the "About Your Semiannual Report" page for a description of the Lehman Brothers 3-Month Treasury Bill Index. .. Total return figures are historical and assume the reinvestment of dividends and distributions and the deduction of all Fund expenses. The return figures shown do not reflect the deduction of taxes that a shareholder may pay on distributions or redemption of shares. Total return figures for Class A shares do not take into account the current maximum sales charge of 4.5%, except where noted. Total return figures for Class B, Class C and Class K shares do not take into account the contingent deferred sales charge applicable to such shares (maximum 3% for Class B shares and 1% for Class C and Class K shares), except where noted. Since June 1, 1994, the investment adviser for the Fund has assumed certain ordinary operating expenses of the Fund. Without these expense assumptions, the returns would have been lower. The yield figures cited represent yield for Class A shares. Please refer to the Financial Statements, accompanying Notes to Financial Statements, and Financial Highlights sections of this report for specific information about the fees and expenses borne by the Fund. .. Shares of The Guardian Cash Management Fund are not issued or guaranteed by the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Association (NCUA), the Federal Reserve Board or any other agency. Although the Fund seeks to preserve the value of an investment at $1.00 per share, it is possible to lose money by investing in the Fund. - -------------------------------------------------------------------------------- 14 .. The Guardian Park Avenue Fund Schedule of Investments June 30, 2004 (Unaudited) Common Stocks -- 99.6% Shares Value -------------------------------------------------------------- Aerospace and Defense -- 1.7% 224,100 United Technologies Corp. $ 20,500,668 ------------------------------------------------------------- Air Freight and Logistics -- 2.0% 312,800 United Parcel Svc., Inc. 23,513,176 ------------------------------------------------------------- Beverages -- 2.8% 352,100 Coca-Cola Co. 17,774,008 307,800 PepsiCo., Inc. 16,584,264 --------------- 34,358,272 ------------------------------------------------------------- Biotechnology -- 1.1% 251,200 Amgen, Inc.* 13,707,984 ------------------------------------------------------------- Capital Markets -- 9.1% 205,200 Goldman Sachs Group, Inc. 19,321,632 351,300 Lehman Brothers Hldgs., Inc. 26,435,325 709,900 Mellon Financial Corp. 20,821,367 437,000 Merrill Lynch & Co., Inc. 23,589,260 406,100 State Street Corp. 19,915,144 --------------- 110,082,728 ------------------------------------------------------------- Commercial Banks -- 5.2% 245,500 Bank of America Corp. 20,774,210 196,000 M & T Bank Corp. 17,110,800 426,500 Wells Fargo & Co. 24,408,595 --------------- 62,293,605 ------------------------------------------------------------- Communications Equipment -- 2.4% 1,216,600 Cisco Systems, Inc.* 28,833,420 ------------------------------------------------------------- Computers and Peripherals -- 3.0% 481,700 Dell, Inc.* 17,254,494 1,026,300 EMC Corp.* 11,699,820 344,700 Hewlett Packard Co. 7,273,170 --------------- 36,227,484 ------------------------------------------------------------- Diversified Financial Services -- 2.4% 618,166 Citigroup, Inc. 28,744,719 ------------------------------------------------------------- Diversified Telecommunication Services -- 0.8% 282,400 Verizon Comm. 10,220,056 ------------------------------------------------------------- Electric Utilities -- 0.9% 161,700 FPL Group, Inc. 10,340,715 ------------------------------------------------------------- Electronic Equipment and Instruments -- 0.9% 441,200 Jabil Circuit, Inc.* 11,109,416 ------------------------------------------------------------- Energy Equipment and Services -- 3.5% 395,100 Nabors Inds., Inc. 17,866,422 636,700 Noble Corp. 24,124,563 --------------- 41,990,985 ------------------------------------------------------------- Food and Staples Retailing -- 3.5% 255,900 Costco Wholesale Corp. 10,509,813 316,700 Sysco Corp. 11,360,029 376,700 Wal-Mart Stores, Inc. 19,874,692 --------------- 41,744,534 ------------------------------------------------------------- Food Products -- 2.0% 166,100 Bunge Ltd. 6,467,934 209,800 Hershey Foods Corp. 9,707,446 245,800 McCormick & Co., Inc. 8,357,200 --------------- 24,532,580 ------------------------------------------------------------- Gas Utilities -- 0.6% 357,000 NiSource, Inc. 7,361,340 -------------------------------------------------------------
---------------------------------------------------------- Shares Value ---------------------------------------------------------- Health Care Equipment and Supplies -- 3.9% 308,800 Boston Scientific Corp.* $ 13,216,640 123,200 C.R. Bard, Inc. 6,979,280 117,900 Guidant Corp. 6,588,252 225,090 Hospira, Inc.* 6,212,484 278,100 Medtronic, Inc. 13,549,032 --------------- 46,545,688 --------------------------------------------------------- Hotels, Restaurants and Leisure -- 2.9% 524,600 Carnival Corp. 24,656,200 559,800 Hilton Hotels Corp. 10,445,868 --------------- 35,102,068 --------------------------------------------------------- Household Products -- 5.3% 539,700 Colgate-Palmolive Co. 31,545,465 597,400 Procter & Gamble Co. 32,522,456 --------------- 64,067,921 --------------------------------------------------------- Industrial Conglomerates -- 4.4% 1,644,400 General Electric Co. 53,278,560 --------------------------------------------------------- Information Technology Services -- 2.1% 421,000 First Data Corp. 18,742,920 433,200 Unisys Corp.* 6,012,816 --------------- 24,755,736 --------------------------------------------------------- Insurance -- 4.9% 103,400 Ambac Financial Group, Inc. 7,593,696 553,500 American Int'l. Group, Inc. 39,453,480 178,200 Chubb Corp. 12,149,676 --------------- 59,196,852 --------------------------------------------------------- Internet and Catalog Retail -- 0.8% 179,600 Amazon.com, Inc.* 9,770,240 --------------------------------------------------------- Machinery -- 2.0% 116,100 Caterpillar, Inc. 9,222,984 215,500 Deere & Co. 15,115,170 --------------- 24,338,154 --------------------------------------------------------- Media -- 0.5% 155,800 Viacom, Inc. 5,565,176 --------------------------------------------------------- Metals and Mining -- 3.5% 329,200 Alcoa, Inc. 10,873,476 401,700 Phelps Dodge Corp. 31,135,767 --------------- 42,009,243 --------------------------------------------------------- Oil and Gas -- 6.7% 258,700 ChevronTexaco Corp. 24,346,257 486,400 Devon Energy Corp. 32,102,400 302,800 Exxon Mobil Corp. 13,447,348 234,700 Occidental Petroleum Corp. 11,361,827 --------------- 81,257,832 --------------------------------------------------------- Pharmaceuticals -- 8.8% 227,300 Abbott Laboratories 9,264,748 155,600 Forest Laboratories, Inc.* 8,811,628 183,840 Johnson & Johnson 10,239,888 1,732,240 Pfizer, Inc. 59,381,187 514,500 Wyeth 18,604,320 --------------- 106,301,771 --------------------------------------------------------- Semiconductors and Semiconductor Equipment -- 3.9% 253,700 Analog Devices, Inc. 11,944,196 1,038,500 Intel Corp. 28,662,600
- -------------------------------------------------------------------------------- See notes to financial statements. 15 .. The Guardian Park Avenue Fund Schedule of Investments (Continued) June 30, 2004 (Unaudited)
-------------------------------------------------------------- Shares Value -------------------------------------------------------------- 125,500 KLA-Tencor Corp.* $ 6,197,190 -------------- 46,803,986 ------------------------------------------------------------ Software -- 6.0% 1,653,100 Microsoft Corp. 47,212,536 2,071,600 Oracle Corp.* 24,714,188 -------------- 71,926,724 ------------------------------------------------------------ Specialty Retail -- 1.3% 405,800 Bed, Bath & Beyond, Inc.* 15,603,010 ------------------------------------------------------------ Tobacco -- 0.7% 175,500 Altria Group, Inc. 8,783,775 ------------------------------------------------------------ Total Common Stocks (Cost $1,069,452,894) 1,200,868,418 ------------------------------------------------------------ Repurchase Agreement -- 1.1% Principal Amount Value -------------------------------------------------------------- $ 13,399,000 State Street Bank and Trust Co. repurchase agreement, dated 6/30/2004, maturity value $13,399,502 at 1.35%, due 7/1/2004 (1) (Cost $13,399,000) $ 13,399,000 ------------------------------------------------------------ Total Investments -- 100.7% (Cost $1,082,851,894) 1,214,267,418 Liabilities in Excess of Cash, Receivables and Other Assets -- (0.7)% (8,616,271) ------------------------------------------------------------ Net Assets -- 100% $1,205,651,147 ------------------------------------------------------------
* Non-income producing security. (1)The repurchase agreement is fully collateralized by U.S. Government and/or agency obligations based on market prices at the date of the portfolio. - -------------------------------------------------------------------------------- See notes to financial statements. 16 .. The Guardian UBS Large Cap Value Fund Schedule of Investments June 30, 2004 (Unaudited) Common Stocks -- 96.8% Shares Value --------------------------------------------------------- Aerospace and Defense -- 3.1% 21,400 Boeing Co. $ 1,093,326 18,000 Northrop Grumman Corp. 966,600 6,900 United Technologies Corp. 631,212 ------------ 2,691,138 --------------------------------------------------------- Airlines -- 0.3% 41,000 Delta Airlines, Inc. 291,920 --------------------------------------------------------- Auto Components -- 1.3% 21,800 Johnson Controls, Inc. 1,163,684 --------------------------------------------------------- Biotechnology -- 1.1% 18,600 Cephalon, Inc.* 1,004,400 --------------------------------------------------------- Building Products -- 2.3% 63,600 Masco Corp. 1,983,048 --------------------------------------------------------- Capital Markets -- 11.8% 100,500 J.P. Morgan Chase & Co. 3,896,385 73,400 Mellon Financial Corp. 2,152,822 66,500 Morgan Stanley 3,509,205 20,800 Northern Trust Corp. 879,424 ------------ 10,437,836 --------------------------------------------------------- Commercial Banks -- 8.1% 19,928 Bank of America Corp. 1,686,307 33,100 PNC Financial Svcs. Group 1,756,948 65,000 Wells Fargo & Co. 3,719,950 ------------ 7,163,205 --------------------------------------------------------- Commercial Services and Supplies -- 0.6% 20,300 Equifax, Inc. 502,425 --------------------------------------------------------- Construction Materials -- 1.8% 35,500 Martin Marietta Materials, Inc. 1,573,715 --------------------------------------------------------- Diversified Financial Services -- 5.3% 100,900 Citigroup, Inc. 4,691,850 --------------------------------------------------------- Diversified Telecommunication Services -- 3.3% 44,100 BellSouth Corp. 1,156,302 72,600 SBC Comm., Inc. 1,760,550 ------------ 2,916,852 --------------------------------------------------------- Electric Utilities -- 6.8% 54,900 American Electric Power, Inc. 1,756,800 45,900 CMS Energy Corp.* 419,067 43,400 Exelon Corp. 1,444,786 47,000 FirstEnergy Corp. 1,758,270 34,000 Pepco Hldgs., Inc. 621,520 ------------ 6,000,443 --------------------------------------------------------- Food and Staples Retailing -- 3.2% 46,600 Albertson's, Inc. 1,236,764 38,300 Costco Wholesale Corp. 1,572,981 ------------ 2,809,745 --------------------------------------------------------- Health Care Providers and Services -- 3.8% 5,400 Quest Diagnostics, Inc. 458,730 46,600 UnitedHealth Group 2,900,850 ------------ 3,359,580 --------------------------------------------------------- Household Products -- 1.3% 16,700 Kimberly-Clark Corp. 1,100,196 --------------------------------------------------------- Information Technology Services -- 1.1% 21,200 First Data Corp. 943,824 --------------------------------------------------------- Insurance -- 4.9% 26,400 AFLAC, Inc. 1,077,384 24,400 American Int'l. Group, Inc. 1,739,232 22,400 Hartford Financial Svcs. Group, Inc. 1,539,776 ------------ 4,356,392 ---------------------------------------------------------
----------------------------------------------------------- Shares Value ----------------------------------------------------------- Machinery -- 3.1% 28,600 Illinois Tool Works, Inc. $ 2,742,454 --------------------------------------------------------- Media -- 7.1% 10,000 Gannett Co., Inc. 848,500 69,500 Interpublic Group Cos., Inc.* 954,235 125,000 Time Warner, Inc.* 2,197,500 64,500 Viacom, Inc. 2,303,940 ----------- 6,304,175 --------------------------------------------------------- Multi-Utilities and Unregulated Power -- 1.4% 35,000 Sempra Energy 1,205,050 --------------------------------------------------------- Oil and Gas -- 8.1% 33,700 ConocoPhillips 2,570,973 103,600 Exxon Mobil Corp. 4,600,876 ----------- 7,171,849 --------------------------------------------------------- Paper and Forest Products -- 1.0% 30,000 MeadWestvaco Corp. 881,700 --------------------------------------------------------- Pharmaceuticals -- 4.6% 40,500 Bristol-Myers Squibb Corp. 992,250 22,700 Johnson & Johnson 1,264,390 49,700 Wyeth 1,797,152 ----------- 4,053,792 --------------------------------------------------------- Road and Rail -- 4.1% 46,400 Burlington Northern Santa Fe 1,627,248 59,800 CSX Corp. 1,959,646 ----------- 3,586,894 --------------------------------------------------------- Thrifts and Mortgage Finance -- 3.1% 43,100 Federal Home Loan Mortgage Corp. 2,728,230 --------------------------------------------------------- Wireless Telecommunication Services -- 4.2% 139,500 Nextel Comm., Inc.* 3,719,070 --------------------------------------------------------- Total Common Stocks (Cost $67,560,611) 85,383,467 --------------------------------------------------------- Exchange-Traded Fund -- 1.2% 9,600 S&P Depositary Receipts Trust Series 1 exp. 12/31/2099 (Cost $1,009,544) $ 1,099,488 --------------------------------------------------------- Repurchase Agreement -- 2.1% Principal Amount Value ----------------------------------------------------------- $ 1,861,000 State Street Bank and Trust Co. repurchase agreement, dated 6/30/2004, maturity value $1,861,070 at 1.35%, due 7/1/2004 (1) (Cost $1,861,000) $ 1,861,000 --------------------------------------------------------- Total Investments -- 100.1% (Cost $ 70,431,155) 88,343,955 Liabilities in Excess of Cash, Receivables and Other Assets -- (0.1)% (118,834) --------------------------------------------------------- Net Assets -- 100% $88,225,121 ---------------------------------------------------------
* Non-income producing security. (1)The repurchase agreement is fully collateralized by U.S. Government and/or agency obligations based on market prices at the date of the portfolio. - -------------------------------------------------------------------------------- See notes to financial statements. 17 .. The Guardian Park Avenue Small Cap Fund Schedule of Investments June 30, 2004 (Unaudited) Common Stocks -- 99.3% Shares Value ------------------------------------------------------------ Aerospace and Defense -- 2.7% 58,200 Aviall, Inc. $ 1,106,382 143,000 EDO Corp. 3,449,160 55,800 Sypris Solutions, Inc. 1,070,802 ------------- 5,626,344 ----------------------------------------------------------- Air Freight and Logistics -- 1.2% 48,500 UTi Worldwide, Inc. 2,555,465 ----------------------------------------------------------- Airlines -- 1.6% 198,100 Skywest, Inc. 3,448,921 ----------------------------------------------------------- Auto Components -- 1.2% 67,200 American Axle & Mfg. Hldgs., Inc. 2,443,392 ----------------------------------------------------------- Beverages -- 0.7% 47,400 Cott Corp.* 1,535,760 ----------------------------------------------------------- Biotechnology -- 4.1% 139,000 Cell Therapeutics, Inc.* 1,024,430 74,400 ILEX Oncology, Inc.* 1,859,256 120,100 Immunicon Corp.* 943,986 87,000 Keryx Biopharmaceuticals, Inc.* 1,101,420 98,200 Nabi Biopharmaceuticals* 1,396,404 113,500 Protein Design Labs., Inc.* 2,171,255 ------------- 8,496,751 ----------------------------------------------------------- Capital Markets -- 5.3% 143,500 Investors Financial Svcs. Corp. 6,253,730 107,500 Piper Jaffray Cos., Inc.* 4,862,225 ------------- 11,115,955 ----------------------------------------------------------- Chemicals -- 0.8% 46,300 Georgia Gulf Corp. 1,660,318 ----------------------------------------------------------- Commercial Banks -- 3.4% 197,300 Boston Private Financial Hldgs., Inc. 4,569,468 55,500 Southwest Bancorp. of Texas, Inc. 2,448,660 ------------- 7,018,128 ----------------------------------------------------------- Commercial Services and Supplies -- 2.2% 35,000 Banta Corp. 1,554,350 192,400 Labor Ready, Inc.* 2,982,200 ------------- 4,536,550 ----------------------------------------------------------- Communications Equipment -- 1.9% 347,200 Arris Group, Inc.* 2,062,368 219,000 Symmetricom, Inc.* 1,949,100 ------------- 4,011,468 ----------------------------------------------------------- Computers and Peripherals -- 2.2% 51,800 Applied Films Corp.* 1,503,236 46,900 PalmOne, Inc.* 1,630,713 74,700 Synaptics, Inc.* 1,430,505 ------------- 4,564,454 ----------------------------------------------------------- Containers and Packaging -- 0.5% 25,700 Silgan Hldgs., Inc. 1,035,967 ----------------------------------------------------------- Diversified Financial Services -- 3.0% 98,300 Encore Capital Group, Inc.* 1,298,543 140,600 Financial Federal Corp.* 4,957,556 ------------- 6,256,099 ----------------------------------------------------------- Diversified Telecommunication Services -- 1.2% 322,700 TALK America Hldgs., Inc.* 2,475,109 ----------------------------------------------------------- Electronic Equipment and Instruments -- 3.8% 77,700 Benchmark Electronics, Inc.* 2,261,070
------------------------------------------------------------ Shares Value ------------------------------------------------------------ 152,700 Merix Corp.* $ 1,731,618 156,400 Plexus Corp.* 2,111,400 43,000 Varian, Inc.* 1,812,450 ------------- 7,916,538 ------------------------------------------------------------ Energy Equipment and Services -- 1.8% 396,800 Key Energy Svcs., Inc.* 3,745,792 ------------------------------------------------------------ Food and Staples Retailing -- 1.4% 30,800 Performance Food Group Co.* 817,432 74,900 United Natural Foods, Inc.* 2,165,359 ------------- 2,982,791 ------------------------------------------------------------ Gas Utilities -- 0.7% 51,500 AGL Resources, Inc. 1,496,075 ------------------------------------------------------------ Health Care Equipment and Supplies -- 5.3% 169,300 American Medical Systems Hldgs., Inc.* 5,705,410 107,400 Immucor, Inc.* 3,495,870 180,500 Synovis Life Technologies, Inc.* 1,940,375 ------------- 11,141,655 ------------------------------------------------------------ Hotels, Restaurants and Leisure -- 2.6% 84,000 Penn National Gaming, Inc.* 2,788,800 96,900 Red Robin Gourmet Burgers, Inc.* 2,652,153 ------------- 5,440,953 ------------------------------------------------------------ Household Durables -- 0.7% 41,600 Jarden Corp.* 1,497,184 ------------------------------------------------------------ Information Technology Services -- 1.1% 173,500 Keane, Inc.* 2,375,215 ------------------------------------------------------------ Insurance -- 2.9% 127,900 Direct General Corp. 4,126,054 59,000 ProAssurance Corp.* 2,012,490 ------------- 6,138,544 ------------------------------------------------------------ Internet Software and Services -- 2.7% 173,800 Netegrity, Inc.* 1,470,348 206,000 S1 Corp.* 2,047,640 119,700 United Online, Inc.* 2,107,917 ------------- 5,625,905 ------------------------------------------------------------ Machinery -- 4.1% 70,000 CLARCOR, Inc. 3,206,000 90,000 Trinity Inds., Inc. 2,861,100 90,900 Watts Water Technologies, Inc. 2,449,755 ------------- 8,516,855 ------------------------------------------------------------ Media -- 2.1% 209,100 Gray Television, Inc. 2,904,399 24,300 Media General, Inc. 1,560,546 ------------- 4,464,945 ------------------------------------------------------------ Metals and Mining -- 2.9% 159,400 Century Aluminum Co.* 3,951,526 366,300 Hecla Mining Co.* 2,087,910 ------------- 6,039,436 ------------------------------------------------------------ Multiline Retail -- 1.3% 173,300 99 Cents Only Stores* 2,642,825 ------------------------------------------------------------ Oil and Gas -- 4.8% 326,400 Energy Partners Ltd.* 4,993,920 57,600 Forest Oil Corp.* 1,573,632 140,900 Magnum Hunter Resources, Inc.* 1,462,542
- -------------------------------------------------------------------------------- See notes to financial statements. 18 .. The Guardian Park Avenue Small Cap Fund Schedule of Investments (Continued) June 30, 2004 (Unaudited)
--------------------------------------------------------- Shares Value --------------------------------------------------------- 138,000 Range Resources Corp. $ 2,014,800 ------------ 10,044,894 --------------------------------------------------------- Pharmaceuticals -- 4.3% 38,200 Medicis Pharmaceutical Corp. 1,526,090 190,200 Pain Therapeutics, Inc.* 1,533,012 101,900 Penwest Pharmaceuticals Co.* 1,305,339 47,300 Salix Pharmaceuticals Ltd.* 1,558,535 68,200 Taro Pharmaceutical Inds. Ltd. 2,966,700 ------------ 8,889,676 --------------------------------------------------------- Real Estate -- 3.4% 75,400 Arden Realty, Inc. 2,217,514 55,400 Federal Realty Investment Trust 2,304,086 68,100 Home Pptys., Inc. 2,654,538 ------------ 7,176,138 --------------------------------------------------------- Road and Rail -- 1.9% 185,925 Werner Enterprises, Inc. 3,923,017 --------------------------------------------------------- Semiconductors and Semiconductor Equipment -- 4.0% 102,800 Credence Systems Corp.* 1,418,640 110,100 Mattson Technology, Inc.* 1,323,402 168,100 Pericom Semiconductor Corp.* 1,800,351 92,700 Sigmatel, Inc.* 2,693,862 98,400 Silicon Storage Technology, Inc.* 1,013,520 ------------ 8,249,775 --------------------------------------------------------- Software -- 5.2% 243,500 Borland Software Corp.* 2,067,315 95,400 Bottomline Technologies, Inc.* 1,006,470 29,200 FactSet Research Systems, Inc. 1,380,284 285,900 Lawson Software, Inc.* 2,024,172 59,200 Manhattan Assoc., Inc.* 1,828,096 123,500 RSA Security, Inc.* 2,528,045 ------------ 10,834,382 --------------------------------------------------------- Specialty Retail -- 6.0% 144,800 Cost Plus, Inc.* 4,698,760 96,400 Group 1 Automotive, Inc.* 3,201,444 233,000 Movie Gallery, Inc. 4,555,150 ------------ 12,455,354 --------------------------------------------------------- Thrifts and Mortgage Finance -- 3.6% 182,800 Federal Agricultural Mortgage Corp.* 4,374,404 178,398 W Hldg. Co., Inc. 3,063,094 ------------ 7,437,498 --------------------------------------------------------- Wireless Telecommunication Services -- 0.7% 49,100 Western Wireless Corp.* 1,419,481 --------------------------------------------------------- Total Common Stocks (Cost $176,011,942) 207,235,609 ---------------------------------------------------------
Repurchase Agreement -- 2.5% Principal Amount Value ------------------------------------------------------------ $ 5,214,000 State Street Bank and Trust Co. repurchase agreement, dated 6/30/2004, maturity value $5,214,196 at 1.35%, due 7/1/2004 (1) (Cost $5,214,000) $ 5,214,000 ---------------------------------------------------------- Total Investments -- 101.8% (Cost $181,225,942) 212,449,609 Liabilities in Excess of Cash, Receivables and Other Assets -- (1.8)% (3,845,291) ---------------------------------------------------------- Net Assets -- 100% $208,604,318 ----------------------------------------------------------
* Non-income producing security. (1)The repurchase agreement is fully collateralized by U.S. Government and/or agency obligations based on market prices at the date of the portfolio. - -------------------------------------------------------------------------------- See notes to financial statements. 19 .. The Guardian UBS Small Cap Value Fund Schedule of Investments June 30, 2004 (Unaudited) Common Stocks -- 95.9% Shares Value ---------------------------------------------------------- Aerospace and Defense -- 2.5% 23,700 Esterline Technologies Corp.* $ 699,861 10,800 Triumph Group, Inc.* 344,844 ------------ 1,044,705 ---------------------------------------------------------- Airlines -- 1.9% 36,200 Mesa Air Group, Inc.* 292,858 44,500 Pinnacle Airlines Corp.* 502,850 ------------ 795,708 ---------------------------------------------------------- Auto Components -- 1.0% 11,300 American Axle & Mfg. Hldgs., Inc. 410,868 ---------------------------------------------------------- Biotechnology -- 0.8% 16,300 Alkermes, Inc.* 221,680 7,700 Vicuron Pharmaceuticals, Inc.* 96,712 ------------ 318,392 ---------------------------------------------------------- Building Products -- 0.4% 14,500 Apogee Enterprises, Inc. 150,800 ---------------------------------------------------------- Chemicals -- 1.5% 17,300 Lubrizol Corp. 633,526 ---------------------------------------------------------- Commercial Banks -- 8.3% 14,600 Boston Private Financial Hldgs., Inc. 338,136 37,100 Colonial BancGroup, Inc. 674,107 15,600 Cullen/Frost Bankers, Inc. 698,100 11,800 First BanCorp. 480,850 15,500 South Financial Group, Inc. 439,270 23,500 Trustmark Corp. 679,620 4,700 Vineyard National Bancorp Co. 187,483 ------------ 3,497,566 ---------------------------------------------------------- Commercial Services and Supplies -- 5.5% 19,200 Jackson Hewitt Tax Svc., Inc.* 336,000 13,900 John H. Harland Co. 407,965 25,600 McGrath Rentcorp 945,920 21,400 Mobile Mini, Inc.* 607,974 ------------ 2,297,859 ---------------------------------------------------------- Communications Equipment -- 1.8% 15,000 Harris Corp. 761,250 ---------------------------------------------------------- Computers and Peripherals -- 1.0% 130,500 Quantum Corp.* 404,550 ---------------------------------------------------------- Electric Utilities -- 1.2% 19,400 Hawaiian Electric Inds., Inc. 506,340 ---------------------------------------------------------- Electrical Equipment -- 1.8% 33,900 Regal-Beloit Corp. 754,614 ---------------------------------------------------------- Electronic Equipment and Instruments -- 3.5% 26,300 Methode Electronics, Inc. 341,111 25,700 Newport Corp.* 415,569 28,300 Park Electrochemical Corp. 714,575 ------------ 1,471,255 ---------------------------------------------------------- Energy Equipment and Services -- 3.5% 20,600 Oceaneering Int'l., Inc.* 705,550 27,100 Offshore Logistics, Inc.* 762,052 ------------ 1,467,602 ---------------------------------------------------------- Food Products -- 1.0% 23,700 Hain Celestial Group, Inc.* 428,970 ---------------------------------------------------------- Gas Utilities -- 1.3% 18,500 AGL Resources, Inc. 537,425 ----------------------------------------------------------
--------------------------------------------------------- Shares Value --------------------------------------------------------- Health Care Equipment and Supplies -- 3.7% 32,400 Candela Corp.* $ 317,520 12,500 Haemonetics Corp.* 370,625 3,600 ICU Medical, Inc.* 120,708 18,000 Mentor Corp. 617,220 31,100 Theragenics Corp.* 143,682 ------------ 1,569,755 ------------------------------------------------------ Health Care Providers and Services -- 4.4% 4,850 Coventry Health Care, Inc.* 237,165 11,900 Molina Healthcare, Inc.* 454,342 9,000 RehabCare Group, Inc.* 239,670 27,000 Renal Care Group, Inc.* 894,510 ------------ 1,825,687 ------------------------------------------------------ Hotels, Restaurants and Leisure -- 1.9% 28,400 Bally Total Fitness Hldg. Corp.* 142,000 20,900 CBRL Group, Inc. 644,765 ------------ 786,765 ------------------------------------------------------ Household Durables -- 5.4% 38,000 Department 56, Inc.* 585,200 24,600 Furniture Brands Int'l., Inc. 616,230 12,300 Libbey, Inc. 341,448 6,600 Ryland Group, Inc. 516,120 5,100 Stanley Furniture Co., Inc. 214,761 ------------ 2,273,759 ------------------------------------------------------ Industrial Conglomerates -- 1.3% 16,500 ALLETE, Inc. 549,450 ------------------------------------------------------ Information Technology Services -- 1.3% 40,800 Computer Task Group, Inc.* 161,160 45,400 SM&A* 392,710 ------------ 553,870 ------------------------------------------------------ Insurance -- 4.1% 24,800 AmerUs Group Co. 1,026,720 9,100 Donegal Group, Inc. 182,364 12,500 Selective Insurance Group, Inc. 498,500 ------------ 1,707,584 ------------------------------------------------------ Internet Software and Services -- 1.0% 99,900 Tumbleweed Comm. Corp.* 425,574 ------------------------------------------------------ Machinery -- 1.3% 2,100 Gardner Denver, Inc.* 58,590 10,200 Harsco Corp. 479,400 ------------ 537,990 ------------------------------------------------------ Media -- 1.8% 23,600 Radio One, Inc.* 377,836 20,000 Saga Comm., Inc.* 365,000 ------------ 742,836 ------------------------------------------------------ Metals and Mining -- 1.6% 13,900 Quanex Corp. 676,930 ------------------------------------------------------ Multi-Utilities and Unregulated Power -- 3.0% 24,100 Equitable Resources, Inc. 1,246,211 ------------------------------------------------------ Oil and Gas -- 1.6% 22,700 Cimarex Energy Co.* 686,221 ------------------------------------------------------ Personal Products -- 1.2% 20,300 Nu Skin Enterprises, Inc. 513,996 ------------------------------------------------------
- -------------------------------------------------------------------------------- See notes to financial statements. 20 .. The Guardian UBS Small Cap Value Fund Schedule of Investments (Continued) June 30, 2004 (Unaudited)
--------------------------------------------------------- Shares Value --------------------------------------------------------- Pharmaceuticals -- 0.3% 18,500 Advancis Pharmaceutical Corp.* $ 125,615 ------------------------------------------------------ Real Estate -- 5.1% 20,507 Government Pptys. Trust, Inc. 214,298 28,600 Innkeepers USA Trust 294,866 14,700 Parkway Pptys., Inc. 653,415 8,000 SL Green Realty Corp. 374,400 22,700 Thornburg Mortgage, Inc. 611,765 ------------ 2,148,744 ------------------------------------------------------ Road and Rail -- 3.5% 19,950 Genesee & Wyoming, Inc.* 472,815 22,400 Werner Enterprises, Inc. 472,640 13,100 Yellow Roadway Corp.* 522,166 ------------ 1,467,621 ------------------------------------------------------ Semiconductors and Semiconductor Equipment -- 1.8% 26,300 Dupont Photomasks, Inc.* 534,679 17,900 Integrated Silicon Solution, Inc.* 218,559 ------------ 753,238 ------------------------------------------------------ Software -- 3.1% 25,300 Mentor Graphics Corp.* 391,391 34,200 MSC.Software Corp.* 306,090 26,200 Reynolds & Reynolds Co. 606,006 ------------ 1,303,487 ------------------------------------------------------ Specialty Retail -- 5.5% 12,200 Hollywood Entertainment Corp.* 162,992 16,100 Linens'n Things, Inc.* 471,891 6,900 Michaels Stores, Inc. 379,500 41,900 Party City Corp.* 523,331 17,300 Rent-A-Center, Inc.* 517,789 7,600 Sharper Image Corp.* 238,564 ------------ 2,294,067 ------------------------------------------------------ Thrifts and Mortgage Finance -- 6.0% 21,400 Accredited Home Lenders Hldg. Co.* 602,410 10,500 Independence Community Bank Corp. 382,200 29,700 IndyMac Bancorp, Inc. 938,520 48,100 Ocwen Financial Corp.* 579,124 ------------ 2,502,254 ------------------------------------------------------ Total Common Stocks (Cost $32,918,928) 40,173,084 ------------------------------------------------------ Exchange-Traded Fund -- 0.9% 2,200 iShares Russell 2000 Value Index Fund (Cost $370,712) $ 379,060 ------------------------------------------------------ Mutual Fund -- 1.1% 34,100 Apollo Investment Corp.* (Cost $503,772) $ 469,557 ------------------------------------------------------
Repurchase Agreement -- 2.1% Principal Amount Value ----------------------------------------------------------- $ 896,000 State Street Bank and Trust Co. repurchase agreement, dated 6/30/2004, maturity value $896,034 at 1.35%, due 7/1/2004 (1) (Cost $896,000) $ 896,000 ---------------------------------------------------------- Total Investments -- 100.0% (Cost $34,689,412) 41,917,701 Liabilities in Excess of Cash, Receivables and Other Assets -- (0.0)% (1,188) ---------------------------------------------------------- Net Assets -- 100% $41,916,513 ----------------------------------------------------------
* Non-income producing security. (1)The repurchase agreement is fully collateralized by U.S. Government and/or agency obligations based on market prices at the date of the portfolio. - -------------------------------------------------------------------------------- See notes to financial statements. 21 .. The Guardian Asset Allocation Fund Schedule of Investments June 30, 2004 (Unaudited) Common Stocks -- 14.3% Shares Value --------------------------------------------------- Aerospace and Defense -- 0.3% 3,044 Boeing Co. $ 155,518 2,736 Honeywell Int'l., Inc. 100,220 1,046 Lockheed Martin Corp. 54,476 1,212 Northrop Grumman Corp. 65,084 1,924 Raytheon Co. 68,821 318 United Technologies Corp. 29,091 ------------- 473,210 --------------------------------------------------- Air Freight and Logistics -- 0.1% 2,119 United Parcel Svc., Inc. 159,285 --------------------------------------------------- Airlines -- 0.0% 2,503 Southwest Airlines Co. 41,975 --------------------------------------------------- Automobiles -- 0.2% 5,835 Ford Motor Co. 91,318 2,438 General Motors Corp. 113,586 1,219 Harley-Davidson, Inc. 75,505 ------------- 280,409 --------------------------------------------------- Beverages -- 0.4% 2,438 Anheuser-Busch Cos., Inc. 131,652 4,595 Coca-Cola Co. 231,955 3,197 Coca-Cola Enterprises, Inc. 92,681 2,867 PepsiCo., Inc. 154,474 2,305 The Pepsi Bottling Group, Inc. 70,395 ------------- 681,157 --------------------------------------------------- Biotechnology -- 0.2% 2,242 Amgen, Inc.* 122,346 917 Biogen Idec, Inc.* 58,000 1,035 Chiron Corp.* 46,203 1,726 MedImmune, Inc.* 40,388 ------------- 266,937 --------------------------------------------------- Building Products -- 0.0% 2,608 Masco Corp. 81,317 --------------------------------------------------- Capital Markets -- 0.5% 2,547 Bank of New York, Inc. 75,086 8,048 Charles Schwab Corp. 77,341 1,000 Goldman Sachs Group, Inc. 94,160 5,066 J.P. Morgan Chase & Co. 196,409 980 Lehman Brothers Hldgs., Inc. 73,745 2,356 Mellon Financial Corp. 69,101 410 Merrill Lynch & Co., Inc. 22,132 3,352 Morgan Stanley 176,885 57 State Street Corp. 2,795 ------------- 787,654 --------------------------------------------------- Chemicals -- 0.2% 567 Dow Chemical Co. 23,077 3,035 E.I. Du Pont de Nemours & Co. 134,815 1,085 Monsanto Co. 41,772 1,174 PPG Inds., Inc. 73,363 1,770 Rohm & Haas Co. 73,597 ------------- 346,624 --------------------------------------------------- Commercial Banks -- 0.8% 7,097 Bank of America Corp. 600,548 1,872 BB&T Corp. 69,208 2,217 Fifth Third Bancorp 119,230 1,410 KeyCorp 42,145 3,312 U.S. Bancorp 91,279 4,992 Wachovia Corp. 222,144
------------------------------------------------------------ Shares Value ------------------------------------------------------------ 3,950 Wells Fargo & Co. $ 226,058 ------------- 1,370,612 ------------------------------------------------------ Commercial Services and Supplies -- 0.2% 5,396 Cendant Corp. 132,094 1,807 Cintas Corp. 86,140 1,630 Pitney Bowes, Inc. 72,128 2,779 Waste Management, Inc. 85,176 ------------- 375,538 ------------------------------------------------------ Communications Equipment -- 0.4% 15,125 Cisco Systems, Inc.* 358,462 6,482 Corning, Inc.* 84,655 6,075 Motorola, Inc. 110,869 2,384 QUALCOMM, Inc. 173,984 ------------- 727,970 ------------------------------------------------------ Computers and Peripherals -- 0.5% 4,776 Dell, Inc.* 171,076 5,386 EMC Corp.* 61,400 8,215 Hewlett Packard Co. 173,337 4,066 Int'l. Business Machines 358,418 12,916 Sun Microsystems, Inc.* 56,055 ------------- 820,286 ------------------------------------------------------ Consumer Finance -- 0.2% 1,972 American Express Co. 101,321 146 Capital One Financial Corp. 9,984 4,750 MBNA Corp. 122,503 2,265 SLM Corp. 91,619 ------------- 325,427 ------------------------------------------------------ Distributors -- 0.1% 2,967 Genuine Parts Co. 117,731 ------------------------------------------------------ Diversified Financial Services -- 0.3% 11,373 Citigroup, Inc. 528,844 ------------------------------------------------------ Diversified Telecommunication Services -- 0.4% 1,564 ALLTEL Corp. 79,170 1,989 AT & T Corp. 29,099 5,078 BellSouth Corp. 133,145 5,290 SBC Comm., Inc. 128,283 1,710 Sprint Corp. (FON Group) 30,096 4,971 Verizon Comm. 179,900 ------------- 579,693 ------------------------------------------------------ Electric Utilities -- 0.2% 1,705 Entergy Corp. 95,497 1,050 Exelon Corp. 34,955 1,214 FPL Group, Inc. 77,635 1,395 Progress Energy, Inc. 61,450 2,650 Southern Co. 77,247 1,292 TXU Corp. 52,339 ------------- 399,123 ------------------------------------------------------ Electrical Equipment -- 0.1% 424 Cooper Inds. Ltd. 25,190 1,106 Emerson Electric Co. 70,286 ------------- 95,476 ------------------------------------------------------ Electronic Equipment and Instruments -- 0.1% 2,990 Agilent Technologies, Inc.* 87,547 4,723 Solectron Corp.* 30,558 ------------- 118,105 ------------------------------------------------------
- -------------------------------------------------------------------------------- See notes to financial statements. 22 .. The Guardian Asset Allocation Fund Schedule of Investments (Continued) June 30, 2004 (Unaudited)
-------------------------------------------------------- Shares Value -------------------------------------------------------- Energy Equipment and Services -- 0.1% 2,205 Baker Hughes, Inc. $ 83,018 1,681 Schlumberger Ltd. 106,761 ------------- 189,779 ------------------------------------------------------- Food and Staples Retailing -- 0.5% 840 Albertson's, Inc. 22,294 2,620 CVS Corp. 110,092 2,409 Kroger Co.* 43,844 1,099 Safeway, Inc.* 27,849 10,695 Wal-Mart Stores, Inc. 564,268 ------------- 768,347 ------------------------------------------------------- Food Products -- 0.3% 2,194 Archer-Daniels-Midland Co. 36,815 2,621 Campbell Soup Co. 70,453 2,662 ConAgra Foods, Inc. 72,087 928 General Mills, Inc. 44,108 2,424 H.J. Heinz Co. 95,021 1,334 Hershey Foods Corp. 61,724 2,012 Kellogg Co. 84,202 1,269 W.M. Wrigley Jr. Co. 80,010 ------------- 544,420 ------------------------------------------------------- Health Care Equipment and Supplies -- 0.5% 2,128 Baxter Int'l., Inc. 73,437 2,122 Becton Dickinson & Co., Inc. 109,920 2,932 Boston Scientific Corp.* 125,490 272 C.R. Bard, Inc. 15,409 2,016 Guidant Corp. 112,654 1,756 Medtronic, Inc. 85,552 1,442 St. Jude Medical, Inc.* 109,087 1,188 Stryker Corp. 65,340 884 Zimmer Hldgs., Inc. 77,969 ------------- 774,858 ------------------------------------------------------- Health Care Providers and Services -- 0.2% 998 AmerisourceBergen Corp. 59,660 746 Cigna Corp. 51,332 306 HCA, Inc. 12,727 3,629 Health Management Associates, Inc. 81,362 1,178 McKesson Corp. 40,441 1,512 Tenet Healthcare Corp.* 20,276 929 Wellpoint Health Networks, Inc.* 104,057 ------------- 369,855 ------------------------------------------------------- Hotels, Restaurants and Leisure -- 0.2% 2,190 Carnival Corp. 102,930 2,751 McDonald's Corp. 71,526 2,943 Starbucks Corp.* 127,962 ------------- 302,418 ------------------------------------------------------- Household Products -- 0.3% 614 Clorox Co. 33,021 1,955 Kimberly-Clark Corp. 128,795 5,120 Procter & Gamble Co. 278,733 ------------- 440,549 ------------------------------------------------------- Industrial Conglomerates -- 0.7% 2,236 3M Co. 201,262 23,903 General Electric Co. 774,457 6,224 Tyco Int'l. Ltd. 206,264 ------------- 1,181,983 ------------------------------------------------------- Information Technology Services -- 0.3% 2,142 Automatic Data Processing, Inc. 89,707 2,525 Electronic Data Systems Corp. 48,354
----------------------------------------------------------- Shares Value ----------------------------------------------------------- 4,416 First Data Corp. $ 196,600 957 Paychex, Inc. 32,423 1,608 Sabre Hldgs. Corp. 44,558 ------------- 411,642 ---------------------------------------------------------- Insurance -- 0.7% 2,353 AFLAC, Inc. 96,026 2,008 Allstate Corp. 93,472 5,515 American Int'l. Group, Inc. 393,109 1,281 Chubb Corp. 87,339 186 Loews Corp. 11,153 1,308 Manulife Financial Corp. 52,974 2,164 Marsh & McLennan Cos., Inc. 98,202 2,884 MetLife, Inc. 103,391 1,253 Progressive Corp. 106,881 687 St. Paul Travelers Cos., Inc. 27,836 ------------- 1,070,383 ---------------------------------------------------------- Internet Software and Services -- 0.0% 1,884 Yahoo! Inc.* 68,446 ---------------------------------------------------------- Leisure Equipment and Products -- 0.1% 1,149 Eastman Kodak Co. 31,000 3,448 Mattel, Inc. 62,926 ------------- 93,926 ---------------------------------------------------------- Machinery -- 0.2% 1,626 Caterpillar, Inc. 129,169 1,491 Deere & Co. 104,579 2,138 Dover Corp. 90,010 ------------- 323,758 ---------------------------------------------------------- Media -- 0.5% 2,046 Clear Channel Comm., Inc. 75,600 3,217 Comcast Corp. -- Class A* 90,172 216 Comcast Corp. -- Class A Special* 5,964 629 Gannett Co., Inc. 53,371 1,395 New York Times Co. 62,370 11,612 Time Warner, Inc.* 204,139 77 Tribune Co. 3,507 4,849 Viacom, Inc. 173,206 5,567 Walt Disney Co. 141,903 ------------- 810,232 ---------------------------------------------------------- Metals and Mining -- 0.0% 2,364 Alcoa, Inc. 78,083 ---------------------------------------------------------- Multiline Retail -- 0.1% 1,602 Kohl's Corp.* 67,733 481 Target Corp. 20,428 ------------- 88,161 ---------------------------------------------------------- Multi-Utilities and Unregulated Power -- 0.1% 3,468 AES Corp.* 34,437 4,604 Duke Energy Corp. 93,415 1,682 Public Svc. Enterprise Group, Inc. 67,331 ------------- 195,183 ---------------------------------------------------------- Oil and Gas -- 0.8% 1,406 Anadarko Petroleum Corp. 82,392 294 Burlington Resources, Inc. 10,637 2,887 ChevronTexaco Corp. 271,695 1,233 ConocoPhillips 94,066 3,136 El Paso Corp. 24,712 14,298 Exxon Mobil Corp. 634,974 2,571 Unocal Corp. 97,698 3,916 Williams Cos., Inc. 46,600 ------------- 1,262,774 ----------------------------------------------------------
- -------------------------------------------------------------------------------- See notes to financial statements. 23 .. The Guardian Asset Allocation Fund Schedule of Investments (Continued) June 30, 2004 (Unaudited)
-------------------------------------------------------- Shares Value -------------------------------------------------------- Paper and Forest Products -- 0.1% 2,952 Georgia-Pacific Corp. $ 109,165 ------------------------------------------------------- Personal Products -- 0.1% 2,752 Avon Products, Inc. 126,977 2,784 Gillette Co. 118,042 ------------- 245,019 ------------------------------------------------------- Pharmaceuticals -- 1.0% 1,116 Allergan, Inc. 99,904 6,462 Bristol-Myers Squibb Corp. 158,319 3,549 Eli Lilly & Co. 248,111 1,774 Forest Laboratories, Inc.* 100,462 6,872 Johnson & Johnson 382,770 1,779 King Pharmaceuticals, Inc.* 20,370 17,915 Pfizer, Inc. 614,126 3,875 Schering-Plough Corp. 71,610 ------------- 1,695,672 ------------------------------------------------------- Real Estate -- 0.1% 2,383 Plum Creek Timber Co., Inc. 77,638 1,972 Simon Ppty. Group, Inc. 101,400 ------------- 179,038 ------------------------------------------------------- Road and Rail -- 0.1% 2,352 Burlington Northern Santa Fe 82,485 1,674 Union Pacific Corp. 99,519 ------------- 182,004 ------------------------------------------------------- Semiconductors and Semiconductor Equipment -- 0.6% 2,923 Altera Corp.* 64,949 754 Analog Devices, Inc. 35,498 4,648 Applied Materials, Inc.* 91,194 1,688 Broadcom Corp.* 78,948 13,630 Intel Corp. 376,188 1,448 KLA-Tencor Corp.* 71,502 549 Linear Technology Corp. 21,669 794 Maxim Integrated Products, Inc. 41,621 3,302 Micron Technology, Inc.* 50,554 1,503 Texas Instruments, Inc. 36,343 2,346 Xilinx, Inc. 78,145 ------------- 946,611 ------------------------------------------------------- Software -- 0.6% 1,802 Adobe Systems, Inc. 83,793 3,590 Computer Associates Int'l., Inc. 100,736 23,245 Microsoft Corp. 663,877 2,830 Siebel Systems, Inc.* 30,224 2,739 VERITAS Software Corp.* 75,870 ------------- 954,500 ------------------------------------------------------- Specialty Retail -- 0.3% 1,416 Bed, Bath & Beyond, Inc.* 54,445 1,930 Best Buy Co., Inc. 97,928 3,143 Home Depot, Inc. 110,634 2,415 Lowe's Cos., Inc. 126,908 432 Staples, Inc. 12,662 5,047 The Gap, Inc. 122,390 ------------- 524,967 ------------------------------------------------------- Textiles, Apparel and Luxury Goods -- 0.1% 1,255 NIKE, Inc. 95,066 ------------------------------------------------------- Thrifts and Mortgage Finance -- 0.2% 1,850 Federal National Mortgage Assn. 132,016 4,145 Washington Mutual, Inc. 160,163 ------------- 292,179 -------------------------------------------------------
--------------------------------------------------------------- Shares Value --------------------------------------------------------------- Tobacco -- 0.2% 5,316 Altria Group, Inc. $ 266,066 509 UST, Inc. 18,324 ------------- 284,390 --------------------------------------------------------------- Wireless Telecommunication Services -- 0.1% 12,777 AT & T Wireless Svcs., Inc.* 182,967 --------------------------------------------------------------- Total Common Stocks (Cost $24,127,994) 23,243,748 --------------------------------------------------------------- Mutual Funds -- 81.3% Equity -- 73.6% 15,277,311 The Guardian S&P 500 Index Fund, Class A (1)+ $ 119,621,343 --------------------------------------------------------------- Fixed Income -- 7.7% 1,264,491 The Guardian Investment Quality Bond Fund, Class A (2) 12,467,877 --------------------------------------------------------------- Total Mutual Funds (Cost $144,499,729) 132,089,220 --------------------------------------------------------------- U.S. Government Security -- 1.1% Principal Amount Value --------------------------------------------------------------- $ 1,900,000 U.S. Treasury Bill 0.94%, 7/29/2004 (3) (Cost $1,898,611) $ 1,898,611 --------------------------------------------------------------- Repurchase Agreement -- 3.4% $ 5,498,000 State Street Bank and Trust Co. repurchase agreement, dated 6/30/2004, maturity value $5,498,206 at 1.35%, due 7/1/2004 (4) (Cost $5,498,000) $ 5,498,000 --------------------------------------------------------------- Total Investments -- 100.1% (Cost $176,024,334) 162,729,579 Liabilities in Excess of Cash, Receivables and Other Assets -- (0.1)% (240,588) --------------------------------------------------------------- Net Assets -- 100% $ 162,488,991 ---------------------------------------------------------------
* Non-income producing security. + The Guardian S&P 500 Index Fund financials are included herein. (1)Majority-owned subsidiary. (2)Affiliated issuer. (3)The U.S. Treasury Bill is segregated as collateral to cover margin requirements on open futures contracts. (4)The repurchase agreement is fully collateralized by U.S. Government and/or agency obligations based on market prices at the date of the portfolio. Purchased (P)/Sold (S) Futures Contracts Unrealized Appreciation/ Contracts Type Description Expiration (Depreciation) ------------------------------------------------------------- 114 S U.S. Treasury Notes, 5 Year 9/2004 $ (57,000) 67 P S&P 500 Index 9/2004 77,050 ------------ $ 20,050 -------------------------------------------------------------
- -------------------------------------------------------------------------------- See notes to financial statements. 24 .. The Guardian S&P 500 Index Fund Schedule of Investments June 30, 2004 (Unaudited) Common Stocks -- 97.2% ---------------------------------------------------- Shares Value ---------------------------------------------------- Aerospace and Defense -- 1.9% 12,788 Boeing Co. $ 653,339 3,125 General Dynamics Corp. 310,313 2,343 Goodrich Corp. 75,749 13,224 Honeywell Int'l., Inc. 484,395 6,804 Lockheed Martin Corp. 354,352 5,740 Northrop Grumman Corp. 308,238 6,629 Raytheon Co. 237,119 2,645 Rockwell Collins, Inc. 88,131 7,755 United Technologies Corp. 709,428 -------------- 3,221,064 ---------------------------------------------------- Air Freight and Logistics -- 1.0% 4,550 FedEx Corp. 371,689 810 Ryder Systems, Inc. 32,457 17,015 United Parcel Svc., Inc. 1,279,018 -------------- 1,683,164 ---------------------------------------------------- Airlines -- 0.1% 1,785 Delta Airlines, Inc. 12,709 12,232 Southwest Airlines Co. 205,131 -------------- 217,840 ---------------------------------------------------- Auto Components -- 0.2% 945 Cooper Tire & Rubber Co. 21,735 2,085 Dana Corp. 40,866 8,041 Delphi Corp. 85,878 4,365 Goodyear Tire & Rubber Co.* 39,678 2,858 Johnson Controls, Inc. 152,560 1,852 Visteon Corp. 21,613 -------------- 362,330 ---------------------------------------------------- Automobiles -- 0.7% 28,159 Ford Motor Co. 440,688 8,879 General Motors Corp. 413,673 4,838 Harley-Davidson, Inc. 299,666 -------------- 1,154,027 ---------------------------------------------------- Beverages -- 2.6% 525 Adolph Coors Co. 37,979 11,891 Anheuser-Busch Cos., Inc. 642,114 1,990 Brown-Forman Corp. 96,057 37,132 Coca-Cola Co. 1,874,424 7,664 Coca-Cola Enterprises, Inc. 222,179 25,965 PepsiCo., Inc. 1,398,994 4,359 The Pepsi Bottling Group, Inc. 133,124 -------------- 4,404,871 ---------------------------------------------------- Biotechnology -- 1.1% 19,558 Amgen, Inc.* 1,067,280 5,022 Biogen Idec, Inc.* 317,642 2,723 Chiron Corp.* 121,555 3,379 Genzyme Corp.* 159,928 3,661 MedImmune, Inc.* 85,667 -------------- 1,752,072 ---------------------------------------------------- Building Products -- 0.2% 3,186 American Standard Cos., Inc.* 128,428 7,483 Masco Corp. 233,320 -------------- 361,748 ---------------------------------------------------- Capital Markets -- 3.4% 11,877 Bank of New York, Inc. 350,134 1,537 Bear Stearns Cos., Inc. 129,584 19,889 Charles Schwab Corp. 191,133
------------------------------------------------------- Shares Value ------------------------------------------------------- 5,500 E*TRADE Financial Corp.* $ 61,325 1,600 Federated Investors, Inc. 48,544 3,801 Franklin Resources, Inc. 190,354 7,166 Goldman Sachs Group, Inc. 674,750 31,680 J.P. Morgan Chase & Co. 1,228,234 3,184 Janus Capital Group, Inc. 52,504 4,199 Lehman Brothers Hldgs., Inc. 315,975 6,309 Mellon Financial Corp. 185,043 15,654 Merrill Lynch & Co., Inc. 845,003 16,508 Morgan Stanley 871,127 3,195 Northern Trust Corp. 135,085 5,114 State Street Corp. 250,791 1,728 T. Rowe Price Group, Inc. 87,091 -------------- 5,616,677 ------------------------------------------------------- Chemicals -- 1.5% 3,281 Air Products & Chemicals, Inc. 172,088 14,085 Dow Chemical Co. 573,260 15,009 E.I. Du Pont de Nemours & Co. 666,700 1,083 Eastman Chemical Co. 50,067 4,653 Ecolab, Inc. 147,500 1,823 Engelhard Corp. 58,901 685 Great Lakes Chemical Corp. 18,536 1,497 Hercules, Inc.* 18,248 1,377 Int'l. Flavors & Fragrances, Inc. 51,500 3,976 Monsanto Co. 153,076 2,774 PPG Inds., Inc. 173,347 5,132 Praxair, Inc. 204,818 3,834 Rohm & Haas Co. 159,418 1,093 Sigma-Aldrich 65,154 -------------- 2,512,613 ------------------------------------------------------- Commercial Banks -- 6.1% 5,373 AmSouth Bancorporation 136,850 31,488 Bank of America Corp. 2,664,515 17,177 Bank One Corp. 876,027 8,563 BB&T Corp. 316,574 4,202 Charter One Financial, Inc. 185,687 2,548 Comerica, Inc. 139,834 8,646 Fifth Third Bancorp 464,982 1,845 First Horizon Nat'l. Corp. 83,892 3,600 Huntington Bancshares, Inc. 82,440 6,165 KeyCorp 184,272 1,800 M & T Bank Corp. 157,140 3,714 Marshall & Ilsley Corp. 145,180 9,265 National City Corp. 324,368 2,405 North Fork Bancorporation, Inc. 91,510 4,177 PNC Financial Svcs. Group 221,715 3,484 Regions Financial Corp. 127,340 4,873 SouthTrust Corp. 189,121 4,276 SunTrust Banks, Inc. 277,897 4,926 Synovus Financial Corp. 124,727 30,104 U.S. Bancorp 829,666 2,982 Union Planters Corp. 88,894 20,178 Wachovia Corp. 897,921 25,987 Wells Fargo & Co. 1,487,236 1,438 Zions Bancorporation 88,365 -------------- 10,186,153 ------------------------------------------------------- Commercial Services and Supplies -- 1.1% 4,995 Allied Waste Inds., Inc.* 65,834 2,845 Apollo Group, Inc.* 251,185 1,581 Avery Dennison Corp. 101,200 15,262 Cendant Corp. 373,614 2,425 Cintas Corp. 115,600
- -------------------------------------------------------------------------------- See notes to financial statements. 25 .. The Guardian S&P 500 Index Fund Schedule of Investments (Continued) June 30, 2004 (Unaudited)
----------------------------------------------------- Shares Value ----------------------------------------------------- 997 Deluxe Corp. $ 43,370 2,052 Equifax, Inc. 50,787 2,604 H & R Block, Inc. 124,159 1,707 Monster Worldwide, Inc.* 43,904 3,634 Pitney Bowes, Inc. 160,804 4,423 R.R. Donnelley & Sons Co. 146,047 2,547 Robert Half Int'l., Inc. 75,824 8,974 Waste Management, Inc. 275,053 -------------- 1,827,381 ---------------------------------------------------- Communications Equipment -- 3.0% 11,132 ADC Telecomm., Inc.* 31,615 2,400 Andrew Corp.* 48,024 6,102 Avaya, Inc.* 96,351 7,613 CIENA Corp.* 28,320 106,642 Cisco Systems, Inc.* 2,527,415 2,380 Comverse Technology, Inc.* 47,457 20,197 Corning, Inc.* 263,773 18,734 JDS Uniphase Corp.* 71,002 67,556 Lucent Technologies, Inc.* 255,362 35,440 Motorola, Inc. 646,780 1,349 QLogic Corp.* 35,870 12,102 QUALCOMM, Inc. 883,204 2,311 Scientific Atlanta, Inc. 79,729 5,897 Tellabs, Inc.* 51,540 -------------- 5,066,442 ---------------------------------------------------- Computers and Peripherals -- 3.5% 6,053 Apple Computer, Inc.* 196,965 38,726 Dell, Inc.* 1,387,165 36,868 EMC Corp.* 420,295 4,621 Gateway, Inc.* 20,794 46,798 Hewlett Packard Co. 987,438 26,281 Int'l. Business Machines 2,316,670 1,823 Lexmark Int'l. Group, Inc.* 175,974 1,379 NCR Corp.* 68,385 5,702 Network Appliance, Inc.* 122,764 46,932 Sun Microsystems, Inc.* 203,685 -------------- 5,900,135 ---------------------------------------------------- Construction and Engineering -- 0.0% 1,050 Fluor Corp. 50,054 ---------------------------------------------------- Construction Materials -- 0.0% 1,439 Vulcan Materials Co. 68,424 ---------------------------------------------------- Consumer Finance -- 1.3% 19,651 American Express Co. 1,009,668 3,450 Capital One Financial Corp. 235,911 19,217 MBNA Corp. 495,607 4,111 Providian Financial Corp.* 60,308 7,101 SLM Corp. 287,236 -------------- 2,088,730 ---------------------------------------------------- Containers and Packaging -- 0.2% 813 Ball Corp. 58,577 1,504 Bemis Co., Inc. 42,488 2,261 Pactiv Corp.* 56,389 2,781 Sealed Air Corp.* 148,144 697 Temple-Inland, Inc. 48,267 -------------- 353,865 ---------------------------------------------------- Distributors -- 0.1% 2,486 Genuine Parts Co. 98,645 ---------------------------------------------------- Diversified Financial Services -- 2.4% 78,862 Citigroup, Inc. 3,667,083 2,359 Moody's Corp. 152,533
------------------------------------------------------------- Shares Value ------------------------------------------------------------- 5,116 Principal Financial Group, Inc. $ 177,934 -------------- 3,997,550 ------------------------------------------------------------ Diversified Telecommunication Services -- 2.7% 4,514 ALLTEL Corp. 228,499 12,198 AT & T Corp. 178,457 28,012 BellSouth Corp. 734,475 1,992 CenturyTel, Inc. 59,840 6,319 Citizens Comm. Co.* 76,460 30,623 Qwest Comm. Int'l., Inc.* 109,936 50,060 SBC Comm., Inc. 1,213,955 21,364 Sprint Corp. (FON Group) 376,006 41,885 Verizon Comm. 1,515,818 -------------- 4,493,446 ------------------------------------------------------------ Electric Utilities -- 1.8% 1,753 Allegheny Energy, Inc.* 27,014 2,471 Ameren Corp. 106,154 6,284 American Electric Power, Inc. 201,088 4,248 CenterPoint Energy, Inc. 48,852 2,886 CiNergy Corp. 109,668 1,896 CMS Energy Corp.* 17,310 3,075 Consolidated Edison, Inc. 122,262 2,578 DTE Energy Co. 104,512 4,648 Edison Int'l. 118,849 3,618 Entergy Corp. 202,644 9,904 Exelon Corp. 329,704 5,049 FirstEnergy Corp. 188,883 2,907 FPL Group, Inc. 185,903 6,344 PG&E Corp.* 177,251 1,212 Pinnacle West Capital Corp. 48,953 2,692 PPL Corp. 123,563 4,069 Progress Energy, Inc. 179,239 12,246 Southern Co. 356,971 2,624 TECO Energy, Inc. 31,462 4,937 TXU Corp. 199,998 6,601 Xcel Energy, Inc. 110,303 -------------- 2,990,583 ------------------------------------------------------------ Electrical Equipment -- 0.4% 2,786 American Power Conversion Corp. 54,745 1,359 Cooper Inds. Ltd. 80,738 6,564 Emerson Electric Co. 417,142 1,094 Power-One, Inc.* 12,012 2,645 Rockwell Automation, Inc. 99,214 767 Thomas & Betts Corp.* 20,886 -------------- 684,737 ------------------------------------------------------------ Electronic Equipment and Instruments -- 0.5% 7,382 Agilent Technologies, Inc.* 216,145 2,726 Jabil Circuit, Inc.* 68,641 2,802 Molex, Inc. 89,888 2,010 PerkinElmer, Inc. 40,280 7,816 Sanmina-SCI Corp.* 71,126 12,349 Solectron Corp.* 79,898 3,132 Symbol Technologies, Inc. 46,166 1,336 Tektronix, Inc. 45,451 2,568 Thermo Electron Corp.* 78,940 2,045 Waters Corp.* 97,710 -------------- 834,245 ------------------------------------------------------------ Energy Equipment and Services -- 0.9% 2,317 B.J. Svcs. Co.* 106,211 5,564 Baker Hughes, Inc. 209,485 6,355 Halliburton Co. 192,302 2,092 Nabors Inds., Inc. 94,600
- -------------------------------------------------------------------------------- See notes to financial statements. 26 .. The Guardian S&P 500 Index Fund Schedule of Investments (Continued) June 30, 2004 (Unaudited)
--------------------------------------------------------- Shares Value --------------------------------------------------------- 2,008 Noble Corp. $ 76,083 1,317 Rowan Cos., Inc.* 32,043 9,003 Schlumberger Ltd. 571,780 5,572 Transocean, Inc.* 161,254 -------------- 1,443,758 -------------------------------------------------------- Food and Staples Retailing -- 3.4% 5,902 Albertson's, Inc. 156,639 7,059 Costco Wholesale Corp. 289,913 6,301 CVS Corp. 264,768 11,800 Kroger Co.* 214,760 7,230 Safeway, Inc.* 183,208 1,885 Supervalu, Inc. 57,700 9,731 Sysco Corp. 349,051 66,196 Wal-Mart Stores, Inc. 3,492,501 15,872 Walgreen Co. 574,725 2,010 Winn-Dixie Stores, Inc. 14,472 -------------- 5,597,737 -------------------------------------------------------- Food Products -- 1.3% 9,568 Archer-Daniels-Midland Co. 160,551 6,069 Campbell Soup Co. 163,135 8,628 ConAgra Foods, Inc. 233,646 5,846 General Mills, Inc. 277,860 5,823 H.J. Heinz Co. 228,262 3,920 Hershey Foods Corp. 181,378 6,444 Kellogg Co. 269,682 1,968 McCormick & Co., Inc. 66,912 12,269 Sara Lee Corp. 282,064 3,730 W.M. Wrigley Jr. Co. 235,177 -------------- 2,098,667 -------------------------------------------------------- Gas Utilities -- 0.1% 2,616 KeySpan Corp. 96,007 674 NICOR, Inc. 22,896 4,276 NiSource, Inc. 88,171 527 Peoples Energy Corp. 22,213 -------------- 229,287 -------------------------------------------------------- Health Care Equipment and Supplies -- 2.1% 3,019 Applera Corp.-Applied Biosystems Group 65,663 755 Bausch & Lomb, Inc. 49,128 9,370 Baxter Int'l., Inc. 323,359 3,689 Becton Dickinson & Co., Inc. 191,090 3,846 Biomet, Inc. 170,916 12,482 Boston Scientific Corp.* 534,230 1,442 C.R. Bard, Inc. 81,689 4,822 Guidant Corp. 269,453 2,380 Hospira, Inc.* 65,688 18,280 Medtronic, Inc. 890,601 653 Millipore Corp.* 36,810 2,817 St. Jude Medical, Inc.* 213,106 6,194 Stryker Corp. 340,670 3,813 Zimmer Hldgs., Inc. 336,307 -------------- 3,568,710 -------------------------------------------------------- Health Care Providers and Services -- 2.1% 2,336 Aetna, Inc. 198,560 1,854 AmerisourceBergen Corp. 110,832 2,046 Anthem, Inc.* 183,240 6,958 Cardinal Health, Inc. 487,408 6,800 Caremark Rx, Inc.* 223,992 2,221 Cigna Corp. 152,827 1,165 Express Scripts, Inc.* 92,303 7,462 HCA, Inc. 310,345 3,671 Health Management Associates, Inc. 82,304
------------------------------------------------------- Shares Value ------------------------------------------------------- 2,389 Humana, Inc.* $ 40,374 3,317 IMS Health, Inc. 77,750 1,456 Manor Care, Inc. 47,582 4,085 McKesson Corp. 140,238 4,011 Medco Health Solutions, Inc.* 150,413 1,738 Quest Diagnostics, Inc. 147,643 6,941 Tenet Healthcare Corp.* 93,079 9,720 UnitedHealth Group 605,070 2,438 Wellpoint Health Networks, Inc.* 273,080 -------------- 3,417,040 ------------------------------------------------------- Hotels, Restaurants and Leisure -- 1.3% 9,614 Carnival Corp. 451,858 2,575 Darden Restaurants, Inc. 52,916 1,649 Harrah's Entertainment, Inc. 89,211 5,226 Hilton Hotels Corp. 97,517 5,356 Int'l. Game Technology 206,742 3,443 Marriott Int'l., Inc. 171,737 20,021 McDonald's Corp. 520,546 6,148 Starbucks Corp.* 267,315 3,141 Starwood Hotels & Resorts Worldwide, Inc. 140,874 1,623 Wendy's Int'l., Inc. 56,545 4,234 Yum! Brands, Inc.* 157,589 -------------- 2,212,850 ------------------------------------------------------- Household Durables -- 0.5% 1,127 Black & Decker Corp. 70,021 2,084 Centex Corp. 95,343 2,219 Fortune Brands, Inc. 167,379 618 KB Home 42,413 2,782 Leggett & Platt, Inc. 74,307 1,066 Maytag Corp. 26,128 3,827 Newell Rubbermaid, Inc. 89,935 2,046 Pulte Homes, Inc. 106,453 811 Snap-On, Inc. 27,209 1,228 Stanley Works 55,972 933 Whirlpool Corp. 64,004 -------------- 819,164 ------------------------------------------------------- Household Products -- 2.0% 3,390 Clorox Co. 182,314 8,248 Colgate-Palmolive Co. 482,096 7,704 Kimberly-Clark Corp. 507,539 39,416 Procter & Gamble Co. 2,145,807 -------------- 3,317,756 ------------------------------------------------------- Industrial Conglomerates -- 4.3% 11,794 3M Co. 1,061,578 155,451 General Electric Co. 5,036,612 2,056 Textron, Inc. 122,024 31,210 Tyco Int'l. Ltd. 1,034,299 -------------- 7,254,513 ------------------------------------------------------- Information Technology Services -- 1.2% 2,100 Affiliated Computer Svcs., Inc.* 111,174 9,179 Automatic Data Processing, Inc. 384,416 2,951 Computer Sciences Corp.* 137,015 2,482 Convergys Corp.* 38,223 7,704 Electronic Data Systems Corp. 147,532 14,105 First Data Corp. 627,955 2,689 Fiserv, Inc.* 104,575 6,010 Paychex, Inc. 203,619 1,910 Sabre Hldgs. Corp. 52,926 3,991 SunGard Data Systems, Inc.* 103,766 4,516 Unisys Corp.* 62,682 -------------- 1,973,883 -------------------------------------------------------
- -------------------------------------------------------------------------------- See notes to financial statements. 27 .. The Guardian S&P 500 Index Fund Schedule of Investments (Continued) June 30, 2004 (Unaudited)
---------------------------------------------------------- Shares Value ---------------------------------------------------------- Insurance -- 4.5% 4,286 ACE Ltd. $ 181,212 7,659 AFLAC, Inc. 312,564 10,558 Allstate Corp. 491,475 1,504 Ambac Financial Group, Inc. 110,454 40,006 American Int'l. Group, Inc. 2,851,628 4,649 Aon Corp. 132,357 2,889 Chubb Corp. 196,972 2,424 Cincinnati Financial Corp. 105,492 4,261 Hartford Financial Svcs. Group, Inc. 292,901 2,226 Jefferson-Pilot Corp. 113,081 2,766 Lincoln Nat'l. Corp. 130,693 2,851 Loews Corp. 170,946 7,934 Marsh & McLennan Cos., Inc. 360,045 2,115 MBIA, Inc. 120,809 11,297 MetLife, Inc. 404,997 3,436 Progressive Corp. 293,091 8,227 Prudential Financial, Inc. 382,309 1,823 SAFECO Corp. 80,212 10,367 St. Paul Travelers Cos., Inc. 420,278 1,831 Torchmark Corp. 98,508 4,975 UnumProvident Corp. 79,102 2,213 XL Capital Ltd. 166,993 -------------- 7,496,119 ---------------------------------------------------------- Internet and Catalog Retail -- 0.5% 9,856 eBay, Inc.* 906,259 ---------------------------------------------------------- Internet Software and Services -- 0.4% 20,122 Yahoo! Inc.* 731,032 ---------------------------------------------------------- Leisure Equipment and Products -- 0.2% 1,223 Brunswick Corp. 49,898 4,324 Eastman Kodak Co. 116,662 2,426 Hasbro, Inc. 46,094 6,117 Mattel, Inc. 111,635 -------------- 324,289 ---------------------------------------------------------- Machinery -- 1.4% 5,238 Caterpillar, Inc. 416,107 841 Crane Co. 26,399 571 Cummins, Inc. 35,688 4,676 Danaher Corp. 242,451 3,730 Deere & Co. 261,622 2,911 Dover Corp. 122,553 2,354 Eaton Corp. 152,398 4,671 Illinois Tool Works, Inc. 447,902 2,653 Ingersoll-Rand Co. 181,226 1,256 ITT Inds., Inc. 104,248 1,366 Navistar Int'l. Corp.* 52,946 2,467 PACCAR, Inc. 143,061 1,735 Pall Corp. 45,440 1,682 Parker-Hannifin Corp. 100,012 -------------- 2,332,053 ---------------------------------------------------------- Media -- 3.5% 9,260 Clear Channel Comm., Inc. 342,157 34,494 Comcast Corp. -- Class A* 966,867 1,237 Dow Jones & Co., Inc. 55,789 4,065 Gannett Co., Inc. 344,915 5,651 Interpublic Group Cos., Inc.* 77,588 1,337 Knight-Ridder, Inc. 96,264 2,816 McGraw-Hill Cos., Inc. 215,621 690 Meredith Corp. 37,922 2,319 New York Times Co. 103,683 2,999 Omnicom Group, Inc. 227,594 69,818 Time Warner, Inc.* 1,227,400
------------------------------------------------------------ Shares Value ------------------------------------------------------------ 5,202 Tribune Co. $ 236,899 4,887 Univision Comm., Inc.* 156,042 26,391 Viacom, Inc. 942,687 31,096 Walt Disney Co. 792,637 -------------- 5,824,065 ----------------------------------------------------------- Metals and Mining -- 0.7% 13,096 Alcoa, Inc. 432,561 1,132 Allegheny Technologies, Inc. 20,433 3,526 Freeport-McMoran Copper & Gold, Inc. 116,887 6,419 Newmont Mining Corp. 248,800 1,128 Nucor Corp. 86,585 1,425 Phelps Dodge Corp. 110,452 1,892 United States Steel Corp. 66,447 1,195 Worthington Inds., Inc. 24,533 -------------- 1,106,698 ----------------------------------------------------------- Multiline Retail -- 1.0% 1,561 Big Lots, Inc.* 22,572 1,201 Dillards, Inc. 26,782 4,737 Dollar General Corp. 92,656 2,900 Family Dollar Stores, Inc. 88,218 2,840 Federated Department Stores, Inc. 139,444 4,629 J.C. Penney Co., Inc. 174,791 5,280 Kohl's Corp.* 223,238 4,265 May Department Stores Co. 117,245 2,637 Nordstrom, Inc. 112,363 3,694 SearsRoebuck & Co. 139,486 13,845 Target Corp. 587,997 -------------- 1,724,792 ----------------------------------------------------------- Multi-Utilities and Unregulated Power -- 0.7% 10,232 AES Corp.* 101,604 4,708 Calpine Corp.* 20,338 2,335 Constellation Energy Group, Inc. 88,496 4,770 Dominion Resources, Inc. 300,892 13,778 Duke Energy Corp. 279,556 4,647 Dynegy, Inc.* 19,796 3,650 Public Svc. Enterprise Group, Inc. 146,109 3,727 Sempra Energy 128,321 -------------- 1,085,112 ----------------------------------------------------------- Office Electronics -- 0.1% 11,648 Xerox Corp.* 168,896 ----------------------------------------------------------- Oil and Gas -- 5.5% 1,272 Amerada Hess Corp. 100,730 4,276 Anadarko Petroleum Corp. 250,573 4,912 Apache Corp. 213,918 966 Ashland, Inc. 51,014 6,212 Burlington Resources, Inc. 224,750 16,244 ChevronTexaco Corp. 1,528,723 10,367 ConocoPhillips 790,898 3,471 Devon Energy Corp. 229,086 10,252 El Paso Corp. 80,786 1,669 EOG Resources, Inc. 99,656 100,880 Exxon Mobil Corp. 4,480,081 1,350 Kerr-McGee Corp. 72,589 2,048 Kinder Morgan, Inc. 121,426 4,449 Marathon Oil Corp. 168,350 5,890 Occidental Petroleum Corp. 285,135 1,169 Sunoco, Inc. 74,372 3,975 Unocal Corp. 151,050 1,800 Valero Energy Corp. 132,768 7,802 Williams Cos., Inc. 92,844 -------------- 9,148,749 -----------------------------------------------------------
- -------------------------------------------------------------------------------- See notes to financial statements. 28 .. The Guardian S&P 500 Index Fund Schedule of Investments (Continued) June 30, 2004 (Unaudited)
------------------------------------------------------ Shares Value ------------------------------------------------------ Paper and Forest Products -- 0.5% 3,965 Georgia-Pacific Corp. $ 146,626 7,547 Int'l. Paper Co. 337,351 1,413 Louisiana-Pacific Corp. 33,417 2,831 MeadWestvaco Corp. 83,203 3,511 Weyerhaeuser Co. 221,614 -------------- 822,211 ------------------------------------------------------ Personal Products -- 0.6% 1,201 Alberto-Culver Co. 60,218 6,846 Avon Products, Inc. 315,875 15,165 Gillette Co. 642,996 -------------- 1,019,089 ------------------------------------------------------ Pharmaceuticals -- 7.7% 23,802 Abbott Laboratories 970,169 1,885 Allergan, Inc. 168,745 29,523 Bristol-Myers Squibb Corp. 723,313 17,027 Eli Lilly & Co. 1,190,357 5,593 Forest Laboratories, Inc.* 316,732 45,393 Johnson & Johnson 2,528,390 3,608 King Pharmaceuticals, Inc.* 41,312 33,762 Merck & Co., Inc. 1,603,695 4,100 Mylan Laboratories, Inc. 83,025 117,992 Pfizer, Inc. 4,044,766 22,681 Schering-Plough Corp. 419,145 1,463 Watson Pharmaceuticals, Inc.* 39,355 20,017 Wyeth 723,815 -------------- 12,852,819 ------------------------------------------------------ Real Estate -- 0.4% 1,513 Apartment Investment & Management Co. 47,100 6,439 Equity Office Pptys. Trust 175,141 4,460 Equity Residential 132,596 2,659 Plum Creek Timber Co., Inc. 86,630 2,678 ProLogis 88,160 3,160 Simon Ppty. Group, Inc. 162,487 -------------- 692,114 ------------------------------------------------------ Road and Rail -- 0.4% 5,663 Burlington Northern Santa Fe 198,601 3,037 CSX Corp. 99,523 5,523 Norfolk Southern Corp. 146,470 3,900 Union Pacific Corp. 231,855 -------------- 676,449 ------------------------------------------------------ Semiconductors and Semiconductor Equipment -- 3.5% 6,069 Advanced Micro Devices, Inc. 96,497 5,686 Altera Corp.* 126,343 5,668 Analog Devices, Inc. 266,849 25,199 Applied Materials, Inc.* 494,404 4,283 Applied Micro Circuits Corp.* 22,786 4,595 Broadcom Corp.* 214,908 99,614 Intel Corp. 2,749,346 3,041 KLA-Tencor Corp.* 150,165 4,550 Linear Technology Corp. 179,589 5,783 LSI Logic Corp.* 44,067 4,899 Maxim Integrated Products, Inc. 256,806 8,530 Micron Technology, Inc.* 130,594 6,136 National Semiconductor Corp.* 134,931 2,577 Novellus Systems, Inc.* 81,021 2,246 NVIDIA Corp.* 46,043 3,235 PMC-Sierra, Inc.* 46,422 2,493 Teradyne, Inc.* 56,591 26,280 Texas Instruments, Inc. 635,450 5,339 Xilinx, Inc. 177,842 -------------- 5,910,654 ------------------------------------------------------
--------------------------------------------------------- Shares Value --------------------------------------------------------- Software -- 4.4% 3,464 Adobe Systems, Inc. $ 161,076 1,611 Autodesk, Inc. 68,967 3,499 BMC Software, Inc.* 64,732 2,659 Citrix Systems, Inc.* 54,137 9,148 Computer Associates Int'l., Inc. 256,693 5,272 Compuware Corp.* 34,795 4,446 Electronic Arts, Inc.* 242,529 3,242 Intuit, Inc.* 125,076 1,159 Mercury Interactive Corp.* 57,753 165,976 Microsoft Corp. 4,740,275 6,727 Novell, Inc.* 56,440 80,487 Oracle Corp.* 960,210 3,803 Parametric Technology Corp.* 19,015 5,561 PeopleSoft, Inc.* 102,878 6,843 Siebel Systems, Inc.* 73,083 4,500 Symantec Corp.* 197,010 6,433 VERITAS Software Corp.* 178,194 -------------- 7,392,863 --------------------------------------------------------- Specialty Retail -- 2.3% 4,489 AutoNation, Inc.* 76,762 1,333 AutoZone, Inc.* 106,773 4,634 Bed, Bath & Beyond, Inc.* 178,177 4,823 Best Buy Co., Inc. 244,719 1,654 Boise Cascade Corp. 62,257 2,929 Circuit City Stores, Inc. 37,931 34,767 Home Depot, Inc. 1,223,798 8,155 Limited Brands 152,498 12,053 Lowe's Cos., Inc. 633,385 4,230 Office Depot, Inc.* 75,759 2,665 RadioShack Corp. 76,299 2,265 Sherwin-Williams Co. 94,111 7,453 Staples, Inc. 218,447 13,490 The Gap, Inc. 327,132 2,083 Tiffany & Co. 76,759 7,969 TJX Cos., Inc. 192,372 2,834 Toys R Us, Inc.* 45,146 -------------- 3,822,325 --------------------------------------------------------- Textiles, Apparel and Luxury Goods -- 0.3% 2,039 Jones Apparel Group, Inc. 80,500 1,864 Liz Claiborne, Inc. 67,067 4,106 NIKE, Inc. 311,029 649 Reebok Int'l. Ltd. 23,351 1,473 V.F. Corp. 71,735 -------------- 553,682 --------------------------------------------------------- Thrifts and Mortgage Finance -- 1.8% 4,327 Countrywide Financial Corp. 303,972 10,495 Federal Home Loan Mortgage Corp. 664,333 14,854 Federal National Mortgage Assn. 1,059,981 2,276 Golden West Financial Corp. 242,053 1,532 MGIC Investment Corp. 116,218 13,818 Washington Mutual, Inc. 533,927 -------------- 2,920,484 --------------------------------------------------------- Tobacco -- 1.1% 32,351 Altria Group, Inc. 1,619,167 1,345 R.J. Reynolds Tobacco Hldgs., Inc. 90,909 2,362 UST, Inc. 85,032 -------------- 1,795,108 --------------------------------------------------------- Trading Companies and Distributors -- 0.1% 2,244 W.W. Grainger, Inc. 129,030 ---------------------------------------------------------
- -------------------------------------------------------------------------------- See notes to financial statements. 29 .. The Guardian S&P 500 Index Fund Schedule of Investments (Continued) June 30, 2004 (Unaudited)
---------------------------------------------------------- Shares Value ---------------------------------------------------------- Wireless Telecommunication Services -- 0.6% 42,798 AT & T Wireless Svcs., Inc.* $ 612,867 16,542 Nextel Comm., Inc.* 441,010 ------------- 1,053,877 ---------------------------------------------------------- Total Common Stocks (Cost $162,022,034) $ 162,348,930 ---------------------------------------------------------- U.S. Government Securities -- 0.2% Principal Amount Value ---------------------------------------------------------- U.S. Treasury Bills $ 200,000 0.98% due 9/9/2004 (1) $ 199,623 200,000 1.0625% due 8/26/2004 (1) 199,669 ---------------------------------------------------------- Total U.S. Government Securities (Cost $399,292) 399,292 ---------------------------------------------------------- Repurchase Agreement -- 2.4% $ 4,009,000 State Street Bank and Trust Co. repurchase agreement, dated 6/30/2004, maturity value $4,009,150 at 1.35%, due 7/1/2004 (2) (Cost $4,009,000) $ 4,009,000 ---------------------------------------------------------- Total Investments -- 99.8% (Cost $166,430,326) 166,757,222 Cash, Receivables and Other Assets Less Liabilities -- 0.2% 332,899 ---------------------------------------------------------- Net Assets -- 100% $ 167,090,121 ----------------------------------------------------------
* Non-income producing security. (1)The U.S. Treasury Bill is segregated as collateral to cover margin requirements on open futures contracts. (2)The repurchase agreement is fully collateralized by U.S. Government and/or agency obligations based on market prices at the date of the portfolio. Purchased Futures Contracts Unrealized Contracts Description Expiration Appreciation ----------------------------------------------- 14 S&P 500 Index 9/2004 $ 7,638 -----------------------------------------------
- -------------------------------------------------------------------------------- See notes to financial statements. 30 .. The Guardian Baillie Gifford International Growth Fund Schedule of Investments June 30, 2004 (Unaudited) Common Stocks -- 94.5% Shares Value ----------------------------------------------------------- Australia -- 3.5% Beverages -- 0.3% 53,400 Fosters Group Ltd. $ 175,199 Commercial Banks -- 0.3% 13,354 Australia and NZ Banking Group Ltd. 169,682 Construction and Engineering -- 0.3% 20,000 Leighton Hldgs. Ltd. 126,369 Containers and Packaging -- 0.3% 32,066 Amcor Ltd. 155,355 Food and Staples Retailing -- 0.3% 20,506 Woolworths Ltd. 162,492 Media -- 0.3% 15,700 News Corp. Ltd. 138,378 Metals and Mining -- 0.9% 53,406 BHP Billiton Ltd. 465,145 Oil and Gas -- 0.4% 15,200 Woodside Petroleum Ltd. 176,127 Real Estate -- 0.4% 19,000 Westfield Hldgs. Ltd.* 203,386 ------------- 1,772,133 ----------------------------------------------------------- Denmark -- 1.0% Commercial Banks -- 1.0% 21,990 Danske Bank AS 521,658 ----------------------------------------------------------- Finland -- 2.7% Communications Equipment -- 2.7% 93,390 Nokia OYJ 1,349,173 ----------------------------------------------------------- France -- 11.6% Beverages -- 1.6% 6,320 Pernod-Ricard S.A. 809,101 Health Care Equipment and Supplies -- 1.9% 14,540 Essilor Int'l. S.A. 950,204 Media -- 1.7% 30,860 Vivendi Universal S.A.* 857,064 Oil and Gas -- 2.8% 7,490 Total S.A. 1,429,663 Personal Products -- 2.1% 13,091 L'Oreal S.A. 1,046,864 Pharmaceuticals -- 1.5% 12,000 Sanofi-Synthelabo S.A. 761,556 ------------- 5,854,452 ----------------------------------------------------------- Germany -- 5.3% Automobiles -- 0.8% 9,210 Bayerische Motoren Werke AG 408,024 Commercial Banks -- 1.0% 6,217 Deutsche Bank AG 489,060 Machinery -- 0.8% 11,178 MAN AG 408,205 Software -- 1.8% 5,460 SAP AG 906,241 Textiles, Apparel and Luxury Goods -- 0.9% 3,770 Adidas-Salomon AG 450,636 ------------- 2,662,166 ----------------------------------------------------------- Hong Kong -- 2.9% Commercial Banks -- 1.0% 208,500 BOC Hong Kong Hldgs. Ltd 355,533 13,000 Hang Seng Bank Ltd. 166,673 ------------- 522,206 Distributors -- 0.2% 78,000 Li & Fung Ltd. 114,004
-------------------------------------------------------------- Shares Value -------------------------------------------------------------- Diversified Financial Services -- 0.2% 50,000 Hong Kong Exchanges & Clearing Ltd. $ 102,889 Real Estate -- 1.5% 59,000 Cheung Kong Hldgs. Ltd. 434,953 39,000 Sun Hung Kai Properties Ltd. 320,012 ------------ 754,965 ------------ 1,494,064 -------------------------------------------------------------- Ireland -- 3.2% Airlines -- 0.7% 53,280 Ryanair Hldgs. PLC* 297,244 2,225 Ryanair Hldgs. PLC ADR* 72,935 ------------ 370,179 Commercial Banks -- 1.1% 34,010 Allied Irish Banks PLC 526,130 Construction Materials -- 1.4% 33,360 CRH PLC 705,438 ------------ 1,601,747 -------------------------------------------------------------- Italy -- 2.4% Insurance -- 1.0% 27,170 Riunione Adriatica di Sicurta SPA 493,458 Oil and Gas -- 1.4% 35,990 ENI SPA 715,459 ------------ 1,208,917 -------------------------------------------------------------- Japan -- 23.1% Auto Components -- 1.2% 33,000 Bridgestone Corp. 618,684 Automobiles -- 1.7% 21,900 Toyota Motor Corp. 885,253 Building Products -- 2.1% 102,000 Asahi Glass Co. 1,058,759 Commercial Banks -- 0.9% 104 UFJ Hldgs., Inc.* 458,439 Diversified Financial Services -- 1.0% 7,800 Promise Co. 519,310 Diversified Telecommunication Services -- 0.7% 67 Nippon Tele. & Tel. Corp. 357,227 Electronic Equipment and Instruments -- 2.9% 26,000 Alps Electric Co. Ltd. 369,034 2,400 Keyence Corp. 546,308 6,600 Kyocera Corp. 558,928 ------------ 1,474,270 Household Products -- 1.0% 22,000 Kao Corp. 529,151 Insurance -- 1.0% 52,000 Mitsui Sumitomo Insurance Co. 487,448 Leisure Equipment and Products -- 1.3% 49,500 Konica Corp. 681,760 Machinery -- 1.1% 20,000 Daikin Inds. Ltd. 535,918 Multiline Retail -- 0.4% 16,000 Takashimaya Co. Ltd. 184,663 Office Electronics -- 1.9% 29,000 Brother Inds. Ltd. 280,333 13,000 Canon, Inc. 683,616 ------------ 963,949 Road and Rail -- 1.2% 120,000 Tokyu Corp. 613,471 Semiconductors and Semiconductor Equipment -- 0.9% 3,900 Rohm Co. Ltd. 465,810
- -------------------------------------------------------------------------------- See notes to financial statements. 31 .. The Guardian Baillie Gifford International Growth Fund Schedule of Investments (Continued) June 30, 2004 (Unaudited)
------------------------------------------------------------- Shares Value ------------------------------------------------------------- Specialty Retail -- 0.9% 11,900 Yamada Denki Co., Ltd. $ 442,937 Tobacco -- 1.2% 76 Japan Tobacco, Inc. 589,401 Trading Companies and Distributors -- 1.2% 82,000 Mitsui & Co. Ltd. 612,685 Wireless Telecommunication Services -- 0.5% 128 NTT DoCoMo, Inc. 228,268 ------------ 11,707,403 ---------------------------------------------------------- Netherlands -- 1.9% Household Durables -- 0.7% 13,650 Philips Electronics (KON) 367,957 Insurance -- 1.2% 47,865 Aegon NV 577,796 ------------ 945,753 ---------------------------------------------------------- New Zealand -- 0.4% Diversified Telecommunication Services -- 0.4% 53,400 Telecom. Corp. of New Zealand 198,600 ---------------------------------------------------------- People's Republic of China -- 0.7% Oil and Gas -- 0.7% 807,500 CNOOC Ltd. 341,648 ---------------------------------------------------------- Russia -- 0.6% Oil and Gas -- 0.6% 2,840 LUKOIL ADR 296,780 ---------------------------------------------------------- Singapore -- 0.4% Electronic Equipment and Instruments -- 0.4% 19,000 Venture Corp. Ltd. 198,687 ---------------------------------------------------------- South Africa -- 0.4% Metals and Mining -- 0.4% 5,200 Anglo American Platinum Corp. 196,422 ---------------------------------------------------------- South Korea -- 0.7% Semiconductors and Semiconductor Equipment -- 0.7% 1,800 Samsung Electronics Co. Ltd. GDR 370,350 ---------------------------------------------------------- Spain -- 1.9% Commercial Banks -- 1.1% 9,830 Banco Popular Espanol S.A. 555,829 Tobacco -- 0.8% 13,140 Altadis S.A. 406,548 ------------ 962,377 ---------------------------------------------------------- Sweden -- 4.2% Communications Equipment -- 1.8% 302,580 LM Ericsson* 892,543 Machinery -- 2.4% 24,860 Atlas Copco AB 850,578 10,600 SKF AB 389,436 ------------ 1,240,014 ------------ 2,132,557 ---------------------------------------------------------- Switzerland -- 4.2% Commercial Banks -- 2.0% 14,100 UBS AG 993,949 Commercial Services and Supplies -- 0.8% 8,410 Adecco S.A. 419,190 Electrical Equipment -- 1.4% 134,300 ABB Ltd.* 734,847 ------------ 2,147,986 ---------------------------------------------------------- United Kingdom -- 23.4% Commercial Banks -- 5.1% 69,800 Barclays PLC 594,424
---------------------------------------------------------- Shares Value ---------------------------------------------------------- 55,000 HSBC Hldgs. $ 817,619 27,764 Royal Bank of Scotland 799,294 23,000 Standard Chartered PLC 374,437 ------------ 2,585,774 Hotels, Restaurants and Leisure -- 2.5% 11,000 Carnival PLC 534,044 28,678 Compass Group 174,948 112,000 Hilton Group PLC 560,404 ------------ 1,269,396 Metals and Mining -- 0.7% 40,000 BHP Billiton PLC 346,989 Multiline Retail -- 0.7% 13,000 Next PLC 335,369 Oil and Gas -- 3.4% 58,000 BG Group PLC 357,241 155,000 BP PLC 1,368,469 ------------ 1,725,710 Pharmaceuticals -- 2.9% 10,000 Astrazeneca 448,512 51,002 GlaxoSmithKline PLC 1,031,871 ------------ 1,480,383 Software -- 0.3% 41,000 Sage Group 138,624 Tobacco -- 3.6% 33,000 British American Tobacco PLC 511,211 61,000 Imperial Tobacco 1,313,773 ------------ 1,824,984 Wireless Telecommunication Services -- 4.2% 265,000 mmO2* 445,588 778,650 Vodafone Group 1,704,526 ------------ 2,150,114 ------------ 11,857,343 ---------------------------------------------------------- Total Common Stocks (Cost $37,251,718) 47,820,216 ---------------------------------------------------------- Preferred Stocks -- 3.1% Brazil -- 1.2% Metals and Mining -- 0.4% 4,800 Comp. Vale Do Rio Doce ADR $ 187,680 Oil and Gas -- 0.8% 16,500 Petroleo Brasileiro S.A. ADR 415,800 ------------ 603,480 ---------------------------------------------------------- Germany -- 1.9% Automobiles -- 1.9% 1,440 Porsche AG 964,823 ---------------------------------------------------------- Total Preferred Stocks (Cost $1,056,862) 1,568,303 ---------------------------------------------------------- Convertible Bond -- 0.5% Principal Amount Value ---------------------------------------------------------- Japan -- 0.5% Commercial Banks -- 0.5% (Yen) 12,000,000 SMFG Finance 2.25% due 7/11/2005 (Cost $88,073) $ 263,964 ----------------------------------------------------------
- -------------------------------------------------------------------------------- See notes to financial statements. 32 .. The Guardian Baillie Gifford International Growth Fund Schedule of Investments (Continued) June 30, 2004 (Unaudited) Repurchase Agreement -- 2.8% Principal Amount Value ------------------------------------------------------------ $ 1,405,000 State Street Bank and Trust Co. repurchase agreement, dated 6/30/2004, maturity value $1,405,014 at 0.35%, due 7/1/2004 (1) (Cost $1,405,000) $ 1,405,000 ----------------------------------------------------------- Total Investments -- 100.9% (Cost $39,801,653) 51,057,483 Liabilities in Excess of Cash, Receivables and Other Assets -- (0.9)% (447,443) ----------------------------------------------------------- Net Assets -- 100% $ 50,610,040 -----------------------------------------------------------
* Non-income producing security. (1)The repurchase agreement is fully collateralized by U.S. Government and/or agency obligations based on market prices at the date of the portfolio. Glossary of Terms: ADR -- American Depositary Receipt. GDR -- Global Depositary Receipt. - -------------------------------------------------------------------------------- See notes to financial statements. 33 .. The Guardian Baillie Gifford Emerging Markets Fund Schedule of Investments June 30, 2004 (Unaudited) Common Stocks -- 92.9% Shares Value ------------------------------------------------------------------ Argentina -- 0.1% Distributors -- 0.1% 11,480 Imp. Y Exp. Patagonia* $ 48,851 --------------------------------------------------------------- Brazil -- 5.5% Diversified Telecommunication Services -- 2.1% 132,600 Telecom. Norte Leste Participacoes ADR 1,687,998 Metals and Mining -- 1.5% 49,600 Comp. Siderurgica Nacional S.A. ADR 603,136 12,300 Comp. Vale Do Rio Doce ADR 584,865 ------------ 1,188,001 Oil and Gas -- 1.2% 33,000 Petroleo Brasileiro S.A. ADR 926,310 Paper and Forest Products -- 0.7% 17,800 Votorantim Celulose e Papel S.A. ADR 566,040 ------------ 4,368,349 --------------------------------------------------------------- Chile -- 1.4% Electric Utilities -- 0.8% 102,725 Enersis S.A. ADR* 612,241 Food and Staples Retailing -- 0.6% 26,700 Cencosud S.A. ADR* 492,721 ------------ 1,104,962 --------------------------------------------------------------- Hong Kong -- 1.5% Household Durables -- 0.5% 1,428,000 TCL Int'l. Hldgs. Ltd. 443,978 Internet Software and Services -- 0.5% 1,600,000 Tom.Com Ltd.* 365,142 Oil and Gas -- 0.5% 850,000 Panva Gas Hldgs. Ltd.* 367,803 ------------ 1,176,923 --------------------------------------------------------------- India -- 4.0% Chemicals -- 0.9% 36,500 Reliance Inds. Ltd. GDR 728,175 Commercial Banks -- 0.9% 27,500 HDFC Bank Ltd. ADR 738,650 Metals and Mining -- 2.2% 40,000 Hindalco Inds. Ltd. GDR+ 874,000 170,000 Vedanta Resources PLC* 886,826 ------------ 1,760,826 ------------ 3,227,651 --------------------------------------------------------------- Indonesia -- 3.2% Diversified Telecommunication Services -- 2.0% 1,840,000 PT Indonesian Satellite Corp. Tbk (Indosat)* 787,956 985,000 Telekomunikasi Indonesia 775,508 ------------ 1,563,464 Metals and Mining -- 1.2% 15,859,000 PT Bumi Resources Tbk 970,202 ------------ 2,533,666 --------------------------------------------------------------- Israel -- 3.8% Chemicals -- 1.0% 176,100 Makhteshim-Agan Inds. Ltd. 819,452 Commercial Banks -- 1.1% 315,000 Bank Hapoalim Ltd. 837,900 Information Technology Services -- 0.1% 3,100 Radware Ltd.* 52,855 Internet Software and Services -- 1.0% 30,400 Check Point Software Technologies Ltd.* 820,496
-------------------------------------------------------------- Shares Value -------------------------------------------------------------- Pharmaceuticals -- 0.6% 11,300 Taro Pharmaceutical Inds. Ltd. $ 491,550 ------------ 3,022,253 -------------------------------------------------------------- Malaysia -- 5.9% Automobiles -- 0.6% 215,000 Proton Hldgs. Berhad* 452,631 Diversified Telecommunication Services -- 0.3% 78,000 Telekom Malaysia Berhad 214,077 Food Products -- 1.7% 420,000 IOI Corp. Berhad 900,790 188,000 IOI Oleochemical Inds. Berhad 460,105 ------------ 1,360,895 Hotels, Restaurants and Leisure -- 0.8% 201,800 Tanjong PLC 663,816 Media -- 1.1% 700,000 Astro All Asia Networks PLC* 843,684 Tobacco -- 0.8% 50,000 British American Tobacco Malaysia Berhad 664,474 Transportation Infrastructure -- 0.6% 800,000 PLUS Expressways Berhad 473,684 ------------ 4,673,261 -------------------------------------------------------------- Mexico -- 10.6% Commercial Banks -- 0.4% 98,200 Grupo Fin. Banorte S.A. de C.V. 349,057 Construction and Engineering -- 0.6% 150,000 Consorcio Ara S.A. de C.V.* 431,098 Construction Materials -- 1.8% 48,700 Cemex S.A. de C.V. ADR 1,417,170 Diversified Telecommunication Services -- 2.0% 271,000 Grupo Carso Global Telecom.* 394,712 34,600 Telefonos de Mexico S.A. ADR 1,151,142 ------------ 1,545,854 Media -- 0.8% 76,000 TV Azteca S.A. de C.V. ADR 656,640 Multiline Retail -- 1.4% 365,475 Wal-Mart de Mexico S.A. de C.V. 1,083,640 Transportation Infrastructure -- 0.3% 14,400 Grupo Aeroportuario del Sureste S.A. de C.V. ADR 266,400 Wireless Telecommunication Services -- 3.3% 62,900 America Movil S.A. de C.V. ADR 2,287,673 191,000 America Telecom S.A. de C.V.* 367,610 ------------ 2,655,283 ------------ 8,405,142 -------------------------------------------------------------- People's Republic of China -- 7.2% Automobiles -- 0.8% 1,880,000 Denway Motors Ltd. 680,924 Diversified Telecommunication Services -- 1.1% 2,440,000 China Telecom Corp. Ltd. 852,469 Oil and Gas -- 2.9% 3,540,000 CNOOC Ltd. 1,497,750 1,760,000 PetroChina Co. Ltd. 812,339 ------------ 2,310,089 Transportation Infrastructure -- 1.4% 1,536,000 Zhejiang Expressway Co. Ltd. 1,092,965 Wireless Telecommunication Services -- 1.0% 1,050,000 China Unicom Ltd. 827,916 ------------ 5,764,363 --------------------------------------------------------------
- -------------------------------------------------------------------------------- See notes to financial statements. 34 .. The Guardian Baillie Gifford Emerging Markets Fund Schedule of Investments (Continued) June 30, 2004 (Unaudited)
---------------------------------------------------------------- Shares Value ---------------------------------------------------------------- Poland -- 1.0% Commercial Banks -- 1.0% 25,000 Bank Pekao S.A. $ 833,941 ---------------------------------------------------------------- Russia -- 6.5% Metals and Mining -- 0.6% 64,000 Peter Hambro Mining PLC* 482,667 Oil and Gas -- 4.1% 19,700 LUKOIL ADR 2,058,650 40,952 OAO Gazprom ADR 1,175,322 ------------ 3,233,972 Wireless Telecommunication Services -- 1.8% 7,900 Mobile Telesystems ADR 963,800 5,100 VimpelCom ADR 491,895 ------------ 1,455,695 ------------ 5,172,334 ---------------------------------------------------------------- South Africa -- 6.6% Metals and Mining -- 2.0% 42,435 Anglo American Platinum Corp. 1,602,916 Oil and Gas -- 2.8% 145,100 Sasol Ltd. 2,241,350 Paper and Forest Products -- 1.8% 91,000 Sappi Ltd. 1,385,193 ------------ 5,229,459 ---------------------------------------------------------------- South Korea -- 16.6% Chemicals -- 1.2% 86,000 Cheil Inds., Inc. 997,317 Commercial Services and Supplies -- 1.2% 39,500 S1 Corp. 922,977 Industrial Conglomerates -- 2.2% 131,000 Hanwha Corp. 872,956 114,040 Samsung Techwin Co. Ltd.* 889,226 ------------ 1,762,182 Insurance -- 1.6% 35,620 Oriental Fire & Marine Insurance Co. Ltd. 487,058 12,500 Samsung Fire & Marine Ins. Co. Ltd. 799,438 ------------ 1,286,496 Marine -- 1.1% 195,000 Samsung Heavy Inds. Co. Ltd. 874,167 Media -- 0.9% 5,300 Cheil Comms., Inc. 720,121 Metals and Mining -- 1.1% 117,200 Dongkuk Steel Mill Co. Ltd. 903,723 Pharmaceuticals -- 1.1% 14,100 Yuhan Corp. 866,378 Semiconductors and Semiconductor Equipment -- 3.6% 12,150 Samsung Electronics Co. Ltd. GDR+ 2,499,862 800 Samsung Electronics Co. Ltd. 330,247 ------------ 2,830,109 Trading Companies and Distributors -- 2.6% 170,200 Samsung Corp. 2,076,867 ------------ 13,240,337 ---------------------------------------------------------------- Sweden -- 0.7% Personal Products -- 0.7% 16,640 Oriflame Cosmetics S.A.* 594,760 ---------------------------------------------------------------- Taiwan -- 14.6% Building Products -- 2.0% 1,550,000 Asia Cement Corp. 866,746 1,520,000 Taiwan Cement Corp. 687,210 ------------ 1,553,956
-------------------------------------------------------------- Shares Value -------------------------------------------------------------- Construction and Engineering -- 0.4% 667,000 CTCI Corp. $ 329,334 Distributors -- 0.3% 355,000 National Petroleum Co. Ltd. 237,582 Diversified Financial Services -- 1.3% 2,047,000 SinoPac Hldgs. 1,071,600 Electronic Equipment and Instruments -- 3.3% 484,000 Hon Hai Precision Inds. Co. Ltd. 1,799,524 500,000 Synnex Technology Int'l. Corp. 810,529 ------------ 2,610,053 Health Care Equipment and Supplies -- 0.0% 800 Pihsiang Machinery Mfg. Co., Ltd. 1,678 Machinery -- 0.7% 1,071,000 Yungtay Engineering Co., Ltd. 570,223 Multiline Retail -- 1.2% 2,200,000 Far Eastern Dept. Stores Ltd. 945,568 Paper and Forest Products -- 0.7% 1,200,000 Chung Hwa Pulp Corp. 571,089 Semiconductors and Semiconductor Equipment -- 2.9% 1,070,000 Nanya Technology Corp. 827,483 1,935,000 United Microelectronics Corp. 1,438,876 ------------ 2,266,359 Wireless Telecommunication Services -- 1.8% 1,491,800 Taiwan Cellular Corp. 1,419,917 ------------ 11,577,359 -------------------------------------------------------------- Thailand -- 0.2% Wireless Telecommunication Services -- 0.2% 71,000 Advanced Info Service Public Co. Ltd. 154,537 -------------------------------------------------------------- Turkey -- 2.6% Commercial Banks -- 2.1% 560,000,000 Turkiye Garanti Bankasi AS* 1,669,249 Industrial Conglomerates -- 0.5% 81,540,377 Koc Hldg. A.S. 368,016 ------------ 2,037,265 -------------------------------------------------------------- Venezuela -- 0.9% Diversified Telecommunication Services -- 0.9% 35,000 Comp. Anonima Nacional Tel. de Venezuela ADR 705,250 -------------------------------------------------------------- Total Common Stocks (Cost $65,057,765) 73,870,663 -------------------------------------------------------------- Preferred Stocks -- 5.1% Brazil -- 5.1% Commercial Banks -- 2.0% 1,351,577 Itausa-Investimentos Itau S.A. $ 1,568,561 Diversified Telecommunication Services -- 0.4% 1,719,000 Celular CRT Participacoes S.A.* 299,246 Food Products -- 0.0% 4,700,000 Comp. Lorenz S.A.* 0 Metals and Mining -- 0.6% 13,000 Comp. Vale Do Rio Doce 505,206 Oil and Gas -- 1.9% 59,600 Petroleo Brasileiro S.A. ADR 1,501,920 Road and Rail -- 0.2% 12,300 All America Latina Logistica* 206,190 -------------------------------------------------------------- Total Preferred Stocks (Cost $2,874,173) 4,081,123 --------------------------------------------------------------
- -------------------------------------------------------------------------------- See notes to financial statements. 35 .. The Guardian Baillie Gifford Emerging Markets Fund Schedule of Investments (Continued) June 30, 2004 (Unaudited) Repurchase Agreement -- 1.5% Principal Amount Value -------------------------------------------------------- $ 1,179,000 State Street Bank and Trust Co. repurchase agreement, dated 6/30/2004, maturity value $1,179,011 at 0.35%, due 7/1/2004 (1) (Cost $1,179,000) $ 1,179,000 -------------------------------------------------------- Total Investments -- 99.5% (Cost $69,110,938) 79,130,786 Cash, Receivables and Other Assets Less Liabilities -- 0.5% 389,523 -------------------------------------------------------- Net Assets -- 100% $ 79,520,309 --------------------------------------------------------
* Non-income producing security. + Rule 144A restricted security. (1)The repurchase agreement is fully collateralized by U.S. Government and/or agency obligations based on market prices at the date of the portfolio. Glossary of Terms: ADR -- American Depositary Receipt. GDR -- Global Depositary Receipt. - -------------------------------------------------------------------------------- See notes to financial statements. 36 .. The Guardian Investment Quality Bond Fund Schedule of Investments June 30, 2004 (Unaudited) Asset Backed Securities -- 4.8% Principal Amount Value ------------------------------------------------------------- $ 1,280,000 Aesop Funding II LLC 2003-2A A3 3.61% due 6/20/2009+ $ 1,260,802 1,200,000 Ameriquest Mtg. Secs. Inc. 2003-5 A6 4.541% due 7/25/2033 1,176,732 105,627 Amresco 1997-1 MIF 7.42% due 3/25/2027 105,461 1,700,000 CNH Equipment Tr. 2003-A A4B 2.57% due 9/15/2009 1,657,995 1,600,000 Residential Funding Mortgage Secs. 2003-HS3 AI2 3.15% due 7/25/2018 1,564,880 1,900,000 Vanderbilt Acquisition Loan Tr. 2002-1 A3 5.70% due 9/7/2023 1,921,911 ------------------------------------------------------------- Total Asset Backed Securities (Cost $7,822,845) 7,687,781 ------------------------------------------------------------- Collateralized Mortgage Obligations -- 6.9% FHLMC H006 A2 $ 1,995,713 2.837% due 2/15/2010 $ 1,959,944 2693 QE 3,000,000 5.50% due 9/15/2028 (1) 3,037,230 2430 GD 710,307 6.50% due 11/15/2030 721,612 2744 VC 1,206,357 5.50% due 4/15/2011 1,252,425 2744 PC 1,500,000 5.50% due 1/15/2031 1,571,687 FNMA 2003-74 ZK 745,157 3.50% due 8/25/2033 736,229 2001-51 PH 1,310,000 6.00% due 8/25/2030 1,359,349 385,718 GNMA 2003-75 WF 2.61% due 5/20/2033 (2) 386,045 ------------------------------------------------------------- Total Collateralized Mortgage Obligations (Cost $11,181,073) 11,024,521 ------------------------------------------------------------- Commercial Mortgage Backed Securities -- 4.0% $ 856,442 First Union National Bank Comm'l. Mtg. Tr. 2000-C2 A1 6.94% due 10/15/2032 $ 913,607 997,366 GMAC Comm'l. Mtg. Sec., Inc. 1997-C1 A3 6.869% due 7/15/2029 1,068,480 1,700,000 Greenwich Capital Comm'l. Funding Corp. 2004-GG1 A7 5.317% due 6/10/2036 (2) 1,697,345 1,165,000 Midland Realty Acceptance Corp. 1996-C1 C 7.927% due 8/25/2028 (1) 1,259,327
----------------------------------------------------------- Principal Amount Value ----------------------------------------------------------- $ 1,377,252 Mortgage Capital Funding, Inc. 1997-MC1 A3 7.288% due 7/20/2027 $ 1,420,878 ----------------------------------------------------------- Total Commercial Mortgage Backed Securities (Cost $6,494,980) 6,359,637 ----------------------------------------------------------- Corporate Bonds -- 25.1% Aerospace and Defense -- 0.5% $ 300,000 Lockheed Martin Corp. 8.50% due 12/1/2029 $ 376,308 100,000 Northrop Grumman Corp. 7.125% due 2/15/2011 112,377 250,000 TRW, Inc. 7.75% due 6/1/2029 291,351 ------------- 780,036 ----------------------------------------------------------- Automotive -- 1.6% 500,000 DaimlerChrysler NA Hldg. 4.05% due 6/4/2008 490,263 Ford Motor Credit Co. 500,000 6.50% due 1/25/2007 525,364 500,000 7.00% due 10/1/2013 504,733 400,000 7.375% due 10/28/2009 426,890 295,000 General Motors Corp. 8.375% due 7/15/2033 312,255 250,000 Lear Corp. 8.11% due 5/15/2009 284,762 ------------- 2,544,267 ----------------------------------------------------------- Chemicals -- 0.2% 400,000 Potash Corp. 4.875% due 3/1/2013 383,287 ----------------------------------------------------------- Energy -- 1.3% 350,000 Canadian Oil Sands Ltd. 5.80% due 8/15/2013+ 349,559 500,000 Pioneer Natural Resources Co. 7.20% due 1/15/2028 532,465 269,000 Pride Int'l., Inc. 9.375% due 5/1/2007 274,380 600,000 RAS Laffan Liquefied Natural Gas 3.437% due 9/15/2009+ 586,200 350,000 Western Oil Sands, Inc. 8.375% due 5/1/2012 379,750 ------------- 2,122,354 ----------------------------------------------------------- Energy-Refining -- 0.4% 500,000 Tosco Corp. 8.125% due 2/15/2030 616,689 ----------------------------------------------------------- Entertainment -- 0.6% 900,000 Time Warner, Inc. 7.57% due 2/1/2024 971,856 ----------------------------------------------------------- Environmental -- 0.6% 800,000 Waste Management, Inc. 7.375% due 8/1/2010 898,825 ----------------------------------------------------------- Finance Companies -- 1.9% 500,000 Capital One Bank 5.75% due 9/15/2010 513,842 500,000 CIT Group, Inc. 1.48% due 5/18/2007 (2) 499,406 200,000 General Electric Capital Corp. 6.75% due 3/15/2032 215,003
- -------------------------------------------------------------------------------- See notes to financial statements. 37 .. The Guardian Investment Quality Bond Fund Schedule of Investments (Continued) June 30, 2004 (Unaudited)
------------------------------------------------------------- Principal Amount Value ------------------------------------------------------------- General Motors Acceptance Corp. $ 500,000 6.125% due 9/15/2006 $ 520,680 395,000 6.875% due 9/15/2011 404,992 400,000 Household Finance Corp. 6.375% due 11/27/2012 424,112 375,000 MBNA America Bank Nat'l. 7.125% due 11/15/2012 413,511 ------------- 2,991,546 ---------------------------------------------------------- Financial -- 0.8% 400,000 Goldman Sachs Group, Inc. 5.70% due 9/1/2012 405,754 400,000 Lehman Brothers Hldgs., Inc. 6.625% due 1/18/2012 434,336 400,000 Morgan Stanley 6.60% due 4/1/2012 430,626 ------------- 1,270,716 ---------------------------------------------------------- Financial-Banks -- 2.0% 425,000 Bank America Corp. 4.875% due 9/15/2012 414,103 750,000 Citigroup, Inc. 5.625% due 8/27/2012 770,932 300,000 City Nat'l. Corp. 5.125% due 2/15/2013 291,290 450,000 J.P. Morgan Chase & Co. 5.75% due 1/2/2013 457,362 200,000 Regions Financial Corp. 6.375% due 5/15/2012 213,992 250,000 Sovereign Bank 5.125% due 3/15/2013 237,651 300,000 Wells Fargo Bank NA 6.45% due 2/1/2011 327,089 500,000 Zions Bancorp 6.00% due 9/15/2015 504,125 ------------- 3,216,544 ---------------------------------------------------------- Food and Beverage -- 0.5% 850,000 Kellogg Co. 2.875% due 6/1/2008 813,648 ---------------------------------------------------------- Gaming -- 0.4% 500,000 Int'l. Game Technology 8.375% due 5/15/2009 588,219 ---------------------------------------------------------- Home Construction -- 0.8% 500,000 D.R. Horton, Inc. 5.875% due 7/1/2013 475,000 500,000 Lennar Corp. 9.95% due 5/1/2010 556,145 300,000 Ryland Group, Inc. 5.375% due 6/1/2008 302,250 ------------- 1,333,395 ---------------------------------------------------------- Industrial-Other -- 1.3% 2,000,000 Aramark Svcs., Inc. 7.10% due 12/1/2006 2,150,814 ---------------------------------------------------------- Media-Cable -- 1.0% 400,000 AT & T Broadband Corp. 9.455% due 11/15/2022 514,152 1,000,000 Comcast Cable Comm., Inc. 6.875% due 6/15/2009 1,091,250 ------------- 1,605,402 ----------------------------------------------------------
------------------------------------------------------- Principal Amount Value ------------------------------------------------------- Media-NonCable -- 0.8% $ 150,000 News America Hldgs. 8.00% due 10/17/2016 $ 177,299 1,150,000 Scholastic Corp. 5.75% due 1/15/2007 1,203,052 ------------- 1,380,351 ------------------------------------------------------- Merchandising-Supermarkets -- 1.1% 500,000 Delhaize America, Inc. 7.375% due 4/15/2006 526,888 650,000 Kroger Co. 7.25% due 6/1/2009 722,090 500,000 Safeway, Inc. 6.15% due 3/1/2006 522,791 ------------- 1,771,769 ------------------------------------------------------- Metals and Mining -- 0.3% 500,000 Glencore Funding LLC 6.00% due 4/15/2014+ 463,770 ------------------------------------------------------- Natural Gas-Pipelines -- 1.8% 1,700,000 Consolidated Natural Gas Co. 7.25% due 10/1/2004 1,721,109 250,000 Duke Energy Field Svcs. 8.125% due 8/16/2030 293,143 500,000 Plains All American Pipeline 5.625% due 12/15/2013+ 474,631 400,000 Teppco Partners LP 6.125% due 2/1/2013 406,771 ------------- 2,895,654 ------------------------------------------------------- Paper and Forest Products -- 0.2% 250,000 Packaging Corp. of America 5.75% due 8/1/2013 247,901 150,000 Weyerhaeuser Co. 6.00% due 8/1/2006 157,817 ------------- 405,718 ------------------------------------------------------- Railroads -- 0.4% 200,000 CSX Corp. 4.875% due 11/1/2009 201,049 450,000 Norfolk Southern Corp. 6.75% due 2/15/2011 492,215 ------------- 693,264 ------------------------------------------------------- Real Estate Investment Trust -- 0.8% 100,000 EOP Operating LP 7.00% due 7/15/2011 108,991 500,000 Istar Financial, Inc. 6.00% due 12/15/2010 496,874 200,000 Liberty Ppty. LP 7.25% due 3/15/2011 223,878 200,000 Prologis 5.50% due 3/1/2013 198,220 100,000 Regency Centers LP 6.75% due 1/15/2012 108,676 125,000 Simon Ppty. Group LP 4.90% due 1/30/2014 116,676 ------------- 1,253,315 ------------------------------------------------------- Retailers -- 0.2% 300,000 Staples, Inc. 7.375% due 10/1/2012 337,877 ------------------------------------------------------- Services -- 0.3% 500,000 PHH Corp. 7.125% due 3/1/2013 546,051 -------------------------------------------------------
- -------------------------------------------------------------------------------- See notes to financial statements. 38 .. The Guardian Investment Quality Bond Fund Schedule of Investments (Continued) June 30, 2004 (Unaudited)
------------------------------------------------------------- Principal Amount Value ------------------------------------------------------------- Technology -- 0.8% $ 200,000 IBM Corp. 5.875% due 11/29/2032 $ 194,737 1,000,000 Jabil Circuit, Inc. 5.875% due 7/15/2010 1,032,996 ------------- 1,227,733 ------------------------------------------------------------- Utilities-Electric and Water -- 1.3% 350,000 American Electric Power, Inc. 5.25% due 6/1/2015 335,758 250,000 FirstEnergy Corp. 6.45% due 11/15/2011 259,190 400,000 Oncor Electric Delivery Co. 7.25% due 1/15/2033 443,514 300,000 Progress Energy, Inc. 7.00% due 10/30/2031 308,726 200,000 Public Service Electric Gas Co. 5.125% due 9/1/2012 199,696 500,000 Xcel Energy, Inc. 3.40% due 7/1/2008 482,625 ------------- 2,029,509 ------------------------------------------------------------- Wireless Communications -- 1.1% 250,000 AT & T Wireless Svcs., Inc. 8.125% due 5/1/2012 289,038 650,000 Tritel PCS, Inc. 10.375% due 1/15/2011 750,843 690,000 Verizon Wireless Capital LLC 5.375% due 12/15/2006 719,352 ------------- 1,759,233 ------------------------------------------------------------- Wireline Communications -- 1.6% 250,000 Deutsche Telekom Int'l. Finance BV 8.75% due 6/15/2030 (2) 304,284 France Telecom S.A. 325,000 8.75% due 3/1/2011 (2) 376,617 150,000 9.50% due 3/1/2031 (2) 188,253 600,000 Sprint Capital Corp. 8.375% due 3/15/2012 689,597 200,000 Telecom Italia Capital 5.25% due 11/15/2013+ 193,569 300,000 Telus Corp. 8.00% due 6/1/2011 340,969 400,000 Verizon Global Funding Corp. 7.75% due 12/1/2030 449,272 ------------- 2,542,561 ------------------------------------------------------------- Yankee -- 0.5% 700,000 Pemex Master Tr. 7.875% due 2/1/2009 (2) 761,250 ------------------------------------------------------------- Total Corporate Bonds (Cost $39,480,700) 40,355,653 ------------------------------------------------------------- Mortgage Pass-Through Securities -- 37.2% FHLMC $ 1,400,000 5.50%, (30 yr. TBA) $ 1,393,437 11,223,053 5.50%, 2033 11,208,482 1,171,691 6.50%, 8/1/2032 1,222,102 19,794 7.00%, 8/1/2008 20,995 FNMA 290,000 5.50%, (15 yr. TBA) 296,525 5,500,000 5.00%, (30 yr. TBA) 5,310,937 3,700,000 5.50%, (30 yr. TBA) 3,681,500 2,800,000 6.00%, (30 yr. TBA) 2,857,750 2,950,000 6.50%, (30 yr. TBA) 3,070,767
-------------------------------------------------------------- Principal Amount Value -------------------------------------------------------------- $ 6,407,164 5.00%, 2018 $ 6,431,823 6,953,688 5.00%, 2034 6,725,169 566,405 5.50%, 12/1/2014 583,035 2,786,301 5.50%, 6/1/2033 2,781,020 1,198,329 5.50%, 5/1/2034 1,194,149 782,408 6.00%, 10/1/2013 817,690 555,596 6.00%, 4/1/2016 579,744 2,711,786 6.00%, 2/1/2034 2,779,384 286,097 6.50%, 8/1/2016 302,420 980,705 6.50%, 11/1/2017 1,036,655 2,248,813 6.50%, 2032 2,343,236 9,094 7.00%, 2/1/2009 9,638 64,021 7.00%, 2012 68,015 210,052 7.00%, 9/1/2014 223,175 3,619 7.00%, 8/1/2023 3,851 2,162 7.00%, 12/1/2027 2,291 52,334 7.00%, 12/1/2028 55,436 782,760 7.00%, 2032 826,717 241 7.50%, 5/1/2027 258 160,217 7.50%, 12/1/2029 171,805 636,746 7.50%, 2/1/2031 683,167 277,375 8.00%, 2030 301,591 GNMA 1,307,293 6.00%, 2033 1,341,918 1,249,909 6.50%, 2032 1,307,536 187,183 8.00%, 2030 205,205 ----------------------------------------------------------- Total Mortgage Pass-Through Securities (Cost $60,494,281) 59,837,423 ----------------------------------------------------------- Sovereign Debt Securities -- 0.7% $ 200,000 Pemex Project Funding Master Tr. 2.82% due 6/15/2010+(2) $ 200,900 475,000 Republic of South Africa 6.50% due 6/2/2014 479,750 500,000 United Mexican States 8.00% due 9/24/2022 519,250 ----------------------------------------------------------- Total Sovereign Debt Securities (Cost $1,182,895) 1,199,900 ----------------------------------------------------------- U.S. Government Securities -- 16.5% U.S. Government Agency Securities -- 2.9% FHLMC $ 335,000 4.50%, 1/15/2014 $ 318,372 FNMA 345,000 1.02%, 7/20/2004++ 344,771 3,600,000 3.25%, 1/15/2008 3,537,950 450,000 4.625%, 10/15/2013 433,313 ------------- 4,634,406 ----------------------------------------------------------- U.S. Treasury Bonds and Notes -- 13.6% U.S. Treasury Bonds 2,670,000 5.375%, 2/15/2031 2,692,842 5,735,000 6.00%, 2/15/2026 6,179,686 U.S. Treasury Notes 769,000 4.00%, 6/15/2009 775,579 8,340,000 4.375%, 5/15/2007 8,620,174 3,677,000 4.75%, 5/15/2014 3,715,351 ------------- 21,983,632 ----------------------------------------------------------- Total U.S. Government Securities (Cost $26,528,968) 26,618,038 -----------------------------------------------------------
- -------------------------------------------------------------------------------- See notes to financial statements. 39 .. The Guardian Investment Quality Bond Fund Schedule of Investments (Continued) June 30, 2004 (Unaudited) Commercial Paper -- 10.1% Principal Amount Value ----------------------------------------------------------------- Automotive -- 1.9% $ 3,000,000 Toyota Motor Credit Co. 1.04% due 7/15/2004 (1) $ 2,998,787 ----------------------------------------------------------------- Beverage -- 1.8% 2,900,000 Coca-Cola Enterprises, Inc. 1.12% due 7/15/2004 (1) 2,898,737 ----------------------------------------------------------------- Diversified Financial Services -- 3.1% 5,000,000 Citigroup Global Markets Hldgs., Inc. 1.10% due 7/15/2004 (1) 4,997,861 ----------------------------------------------------------------- Household Products -- 2.1% 3,300,000 Procter & Gamble Co. 1.02% due 7/15/2004 (1) 3,298,691 ----------------------------------------------------------------- Media -- 1.2% 2,000,000 Tribune Co. 1.10% due 7/15/2004 (1) 1,999,144 ----------------------------------------------------------------- Total Commercial Paper (Cost $16,193,220) 16,193,220 ----------------------------------------------------------------- Repurchase Agreement -- 3.3% $ 5,368,000 State Street Bank and Trust Co. repurchase agreement, dated 6/30/2004, maturity value $5,368,201 at 1.35%, due 7/1/2004 (1)(3) (Cost $5,368,000) $ 5,368,000 ----------------------------------------------------------------- Total Investments -- 108.6% (Cost $174,746,962) 174,644,173 Payables for Mortgage Pass-Throughs Delayed Delivery Securities (1) -- (12.4)% (19,974,305) Cash, Receivables and Other Assets Less Liabilities -- 3.8% 6,209,933 ----------------------------------------------------------------- Net Assets -- 100% $ 160,879,801 -----------------------------------------------------------------
+ Rule 144A restricted security. ++Discount note. The rate shown is the effective yield at date of purchase. (1)Securities are segregated to cover forward mortgage purchases. (2)Floating rate note. The rate shown is the rate in effect at June 30, 2004. (3)The repurchase agreement is fully collateralized by U.S. Government and/or agency obligations based on market prices at the date of the portfolio. - -------------------------------------------------------------------------------- See notes to financial statements. 40 .. The Guardian Low Duration Bond Fund Schedule of Investments June 30, 2004 (Unaudited) Asset Backed Securities -- 7.1% Principal Amount Value ------------------------------------------------------------ $ 500,000 Chase Manhattan Auto Owner Tr. 2003-A A4 2.06% due 12/15/2009 $ 484,447 400,000 PP&L Transition Bond Co. LLC 1999-1 A7 7.05% due 6/25/2009 433,337 Residential Asset Mtg. Prods., Inc. 2003-RZ3 A3 600,000 2.14% due 2/25/2030 593,522 2002-RS5 AI4 495,000 4.428% due 9/25/2030 498,130 300,000 Residential Funding Mortgage Secs. 2003-HS3 AI2 3.15% due 7/25/2018 293,415 ------------------------------------------------------------ Total Asset Backed Securities (Cost $2,317,769) 2,302,851 ------------------------------------------------------------ Collateralized Mortgage Obligations -- 6.5% FHLMC 2430 GD $ 181,128 6.50% due 11/15/2030 $ 184,011 2744 VC 296,062 5.50% due 4/15/2011 307,368 1650 J 495,000 6.50% due 6/15/2023 521,068 FNMA 2003-74 ZK 132,892 3.50% due 8/25/2033 131,300 2002-55 PC 360,000 5.50% due 4/25/2026 366,808 2001-51 PH 255,000 6.00% due 8/25/2030 264,606 210,796 GNMA 2002-93 NV 4.75% due 2/20/2032 206,245 119,315 Prudential Home Mtg. Secs. Co. 1993-60 A3 6.75% due 12/25/2023 119,159 ------------------------------------------------------------ Total Collateralized Mortgage Obligations (Cost $2,115,580) 2,100,565 ------------------------------------------------------------ Commercial Mortgage Backed Securities -- 2.2% $ 325,925 GMAC Comm'l. Mtg. Sec., Inc. 1997-C1 A3 6.869% due 7/15/2029 $ 349,164 225,000 Midland Realty Acceptance Corp. 1996-C1 C 7.927% due 8/25/2028 (1) 243,218 121,004 Morgan Stanley Capital I 1999-WF1 A1 5.91% due 11/15/2031 125,781 ------------------------------------------------------------ Total Commercial Mortgage Backed Securities (Cost $733,846) 718,163 ------------------------------------------------------------ Corporate Bonds -- 64.0% Aerospace and Defense -- 1.6% $ 500,000 Northrop Grumman Corp. 7.00% due 3/1/2006 $ 532,068 ------------------------------------------------------------ Automotive -- 6.4% 500,000 DaimlerChrysler NA Hldg. 7.40% due 1/20/2005 513,535
-------------------------------------------------------- Principal Amount Value -------------------------------------------------------- $ 500,000 Delphi Corp. 6.55% due 6/15/2006 $ 525,565 500,000 Ford Motor Credit Co. 7.50% due 3/15/2005 516,655 500,000 General Motors Acceptance Corp. 5.25% due 5/16/2005 511,196 ------------ 2,066,951 -------------------------------------------------------- Energy -- 4.0% 500,000 Anadarko Petroleum Corp. 6.50% due 5/15/2005 515,393 250,000 Pride Int'l., Inc. 10.00% due 6/1/2009 263,750 500,000 Repsol Int'l. Fin. BV 7.45% due 7/15/2005 525,044 ------------ 1,304,187 -------------------------------------------------------- Entertainment -- 3.2% 1,000,000 Time Warner, Inc. 5.625% due 5/1/2005 1,024,492 -------------------------------------------------------- Finance Companies -- 9.7% 500,000 American General Fin. Corp. 5.875% due 12/15/2005 522,760 500,000 Capital One Bank 6.875% due 2/1/2006 527,372 500,000 CIT Group, Inc. 6.625% due 6/15/2005 518,639 500,000 General Electric Capital Corp. 6.80% due 11/1/2005 526,870 500,000 Household Fin. Corp. 6.50% due 1/24/2006 527,027 500,000 MBNA America Bank NA 6.50% due 6/20/2006 529,277 ------------ 3,151,945 -------------------------------------------------------- Financial -- 2.4% 500,000 Bear Stearns Cos., Inc. 3.00% due 3/30/2006 499,519 250,000 Lehman Brothers Hldgs., Inc. 6.25% due 5/15/2006 263,783 ------------ 763,302 -------------------------------------------------------- Financial-Banks -- 0.8% 250,000 KeyCorp 4.625% due 5/16/2005 254,177 -------------------------------------------------------- Food and Beverage -- 3.2% 500,000 Kellogg Co. 6.00% due 4/1/2006 524,760 500,000 Kraft Foods, Inc. 4.625% due 11/1/2006 511,969 ------------ 1,036,729 -------------------------------------------------------- Home Construction -- 0.9% 250,000 Lennar Corp. 9.95% due 5/1/2010 278,073 -------------------------------------------------------- Lodging -- 0.8% 250,000 Marriott Int'l., Inc. 6.875% due 11/15/2005 263,241 -------------------------------------------------------- Media-Cable -- 1.7% 500,000 Cox Comm., Inc. 7.75% due 8/15/2006 543,388 -------------------------------------------------------- Natural Gas-Pipelines -- 1.6% 500,000 Duke Energy Field Svcs. 7.50% due 8/16/2005 524,947 --------------------------------------------------------
- -------------------------------------------------------------------------------- See notes to financial statements. 41 .. The Guardian Low Duration Bond Fund Schedule of Investments (Continued) June 30, 2004 (Unaudited)
------------------------------------------------------------ Principal Amount Value ------------------------------------------------------------ Paper and Forest Products -- 0.8% $ 250,000 Abitibi-Consolidated, Inc. 8.30% due 8/1/2005 $ 258,737 ------------------------------------------------------------ Real Estate Investment Trust -- 7.1% 505,000 Avalon Bay Communities, Inc. 6.80% due 7/15/2006 541,187 EOP Operating LP 500,000 6.625% due 2/15/2005 512,477 500,000 6.63% due 4/13/2005 515,070 300,000 Gables Realty LP 6.80% due 3/15/2005 307,370 400,000 Simon Ppty. Group LP 6.875% due 10/27/2005 418,506 ------------ 2,294,610 ------------------------------------------------------------ Restaurants -- 0.8% 250,000 YUM! Brands, Inc. 7.45% due 5/15/2005 259,673 ------------------------------------------------------------ Services -- 0.8% 250,000 Cendant Corp. 6.875% due 8/15/2006 267,126 ------------------------------------------------------------ Supermarkets -- 2.4% 250,000 Kroger Co. 7.375% due 3/1/2005 257,895 500,000 Safeway, Inc. 3.80% due 8/15/2005 504,805 ------------ 762,700 ------------------------------------------------------------ Utilities-Electric and Water -- 6.9% 500,000 Dominion Resources, Inc. 2.80% due 2/15/2005 501,555 500,000 National Rural Utilities Coop. Fin. 3.00% due 2/15/2006 500,631 250,000 Niagara Mohawk Power Corp. 6.625% due 7/1/2005 260,675 500,000 Nisource Fin. Corp. 7.625% due 11/15/2005 530,399 425,000 PSEG Power LLC 6.875% due 4/15/2006 450,897 ------------ 2,244,157 ------------------------------------------------------------ Wireless Communications -- 1.6% 498,000 AT & T Wireless Svcs., Inc. 6.875% due 4/18/2005 514,890 ------------------------------------------------------------ Wireline Communications -- 7.3% 500,000 British Telecom. PLC 7.875% due 12/15/2005 534,581 500,000 Deutsche Telekom Int'l. Fin. BV 8.25% due 6/15/2005 525,714 250,000 Qwest Corp. 7.20% due 11/1/2004 251,875 500,000 Sprint Capital Corp. 7.90% due 3/15/2005 518,301 500,000 Telefonica Europe BV 7.35% due 9/15/2005 526,947 ------------ 2,357,418 ------------------------------------------------------------ Total Corporate Bonds (Cost $20,783,257) 20,702,811 ------------------------------------------------------------
Sovereign Debt Security -- 1.6% --------------------------------------------------------- Principal Amount Value --------------------------------------------------------- $ 500,000 Petroleos Mexicanos 6.50% due 2/1/2005 (Cost $510,816) $ 510,500 --------------------------------------------------------- U.S. Government Securities -- 15.7% U.S. Treasury Notes -- 15.7% U.S. Treasury Notes $ 2,375,000 2.625%, 3/15/2009 $ 2,259,775 2,410,000 3.375%, 12/15/2008 2,379,311 430,000 4.00%, 6/15/2009 433,124 --------------------------------------------------------- Total U.S. Government Securities (Cost $5,151,926) 5,072,210 --------------------------------------------------------- Repurchase Agreement -- 0.9% $ 284,000 State Street Bank and Trust Co. repurchase agreement, dated 6/30/2004, maturity value $284,011 at 1.35%, due 7/1/2004 (2) (Cost $284,000) $ 284,000 --------------------------------------------------------- Total Investments -- 98.0% (Cost $31,897,194) 31,691,100 Cash, Receivables and Other Assets Less Liabilities -- 2.0% 660,744 --------------------------------------------------------- Net Assets -- 100% $ 32,351,844 ---------------------------------------------------------
(1)Floating rate note. The rate shown is the rate in effect at June 30, 2004. (2)The repurchase agreement is fully collateralized by U.S. Government and/or agency obligations based on market prices at the date of the portfolio. - -------------------------------------------------------------------------------- See notes to financial statements. 42 .. The Guardian High Yield Bond Fund Schedule of Investments June 30, 2004 (Unaudited) Corporate Bonds -- 90.3% Rating Principal Moody's/ Amount S&P* Value - ----------------------------------------------------------- Aerospace and Defense -- 2.8% Comm. & Power Inds., Inc. $ 671,000 Sr. Sub. Nt. 8.00% due 2/1/2012 B3/B- $ 671,000 K & F Ind., Inc. 417,000 Sr. Sub. Nt. Ser. B 9.625% due 12/15/2010 B3/B 457,136 Sequa Corp. 800,000 Sr. Nt. 8.875% due 4/1/2008 B1/BB- 842,000 ---------- 1,970,136 - ----------------------------------------------------------- Automotive -- 3.5% Keystone Automotive Operations 522,000 Sr. Sub. Nt.+ 9.75% due 11/1/2013 B3/B- 558,540 Tenneco Automotive, Inc. 298,000 Sr. Sec. Nt. Ser. B 10.25% due 7/15/2013 B2/B- 336,740 596,000 Sr. Sub. Nt. Ser. B 11.625% due 10/15/2009 B3/B- 640,700 TRW Automotive, Inc. 248,000 Sr. Nt. 9.375% due 2/15/2013 B1/BB- 279,620 United Components, Inc. 667,000 Sr. Sub. Nt. 9.375% due 6/15/2013 B3/B 680,340 ---------- 2,495,940 - ----------------------------------------------------------- Banking -- 0.5% Western Financial Bank 350,000 Sub. Cap. Debt. 9.625% due 5/15/2012 B1/BB- 385,000 - ----------------------------------------------------------- Building Materials -- 1.8% Associated Materials, Inc. 745,000 Sr. Disc. Nt. (1)+ 0/11.25% due 3/1/2014 Caa1/B- 499,150 Norcraft Cos. Fin. 343,000 Sr. Sub. Nt.+ 9.00% due 11/1/2011 B3/B- 361,865 Ply Gem Inds., Inc. 447,000 Sr. Sub. Nt.+ 9.00% due 2/15/2012 B3/B- 455,940 ---------- 1,316,955 - ----------------------------------------------------------- Chemicals -- 7.4% BCP Caylux Hldgs. Luxembourg SCA 745,000 Sr. Sub. Nt.+ 9.625% due 6/15/2014 B3/B- 772,006 Equistar Chemicals LP 670,000 Sr. Nt. 10.125% due 9/1/2008 B2/B+ 733,650 HMP Equity Hldgs. Corp. 372,000 Sr. Disc. Nt. (2)+ 9.83% due 5/15/2008 NR/CCC+ 215,760 Huntsman Advanced Materials 373,000 Sr. Sec. Nt.+ 11.00% due 7/15/2010 B2/B 420,557 Huntsman Int'l. LLC 224,000 Sr. Nt. 9.875% due 3/1/2009 B3/B- 241,920
- -------------------------------------------------------------- Rating Principal Moody's/ Amount S&P* Value - -------------------------------------------------------------- Huntsman LLC $ 373,000 Sr. Nt.+ 11.50% due 7/15/2012 B3/CCC+ $ 377,663 Koppers, Inc. 584,000 Sec. Nt. 9.875% due 10/15/2013 B2/B 639,480 Lyondell Chemical Co. 372,000 Sr. Sub. Nt. 10.875% due 5/1/2009 B3/B- 388,740 Millennium America, Inc. 484,000 Sr. Nt. 9.25% due 6/15/2008 B1/BB- 520,300 Nalco Co. 298,000 Sr. Sub. Nt.+ 8.875% due 11/15/2013 Caa1/B- 312,155 Nalco Finance Hdgs., Inc. 292,000 Sr. Nt. (1)+ 0/9.00% due 2/1/2014 Caa2/B- 195,640 Resolution Performance Product 298,000 Sr. Sec. Nt. 8.00% due 12/15/2009 B2/B+ 309,175 150,000 Sr. Sec. Nt. 9.50% due 4/15/2010 B3/B- 154,500 ---------- 5,281,546 - -------------------------------------------------------------- Construction Machinery -- 2.7% Joy Global, Inc. 140,000 Sr. Sub. Nt. 8.75% due 3/15/2012 B1/B+ 156,800 NMHG Hldg. Co. 140,000 Sr. Nt. 10.00% due 5/15/2009 B3/B+ 154,000 Terex Corp. 285,000 Sr. Sub. Nt. 9.25% due 7/15/2011 B3/B 310,650 285,000 Sr. Sub. Nt. 10.375% due 4/1/2011 B3/B 317,775 United Rentals NA, Inc. 1,043,000 Sr. Sub. Nt. 7.75% due 11/15/2013 B2/B+ 985,635 ---------- 1,924,860 - -------------------------------------------------------------- Consumer Products -- 4.1% Bombardier Recreational Products 286,000 Sr. Sub. Nt.+ 8.375% due 12/15/2013 B3/B- 283,855 Elizabeth Arden, Inc. 410,000 Sr. Sub. Nt. 7.75% due 1/15/2014 B3/B- 417,175 Jafra Cosmetics 828,000 Sr. Sub. Nt. 10.75% due 5/15/2011 B3/B- 923,220 Rayovac Corp. 745,000 Sr. Sub. Nt. 8.50% due 10/1/2013 B3/B- 782,250 Syratech Corp. 596,000 Sr. Nt. 11.00% due 4/15/2007 Caa1/NR 518,520 ---------- 2,925,020 - -------------------------------------------------------------- Electric -- 11.4% Allegheny Energy Supply 1,490,000 Nt. 7.80% due 3/15/2011 B3/CCC+ 1,456,475
- -------------------------------------------------------------------------------- See notes to financial statements. 43 .. The Guardian High Yield Bond Fund Schedule of Investments (Continued) June 30, 2004 (Unaudited)
- --------------------------------------------------------- Rating Principal Moody's/ Amount S&P* Value - --------------------------------------------------------- Calpine Corp. $ 745,000 Sr. Sec. Nt.+ 8.75% due 7/15/2013 NR/B $ 610,900 Calpine Generating Co. 745,000 Sec. Nt.+ 11.50% due 4/1/2011 B3/CCC+ 655,600 Dynegy Hldgs., Inc. 745,000 Sr. Sec. Nt.+ 10.125% due 7/15/2013 B3/B- 806,462 Edison Mission Energy 745,000 Sr. Nt. 10.00% due 8/15/2008 B2/B 795,288 Mission Energy Hldg. 745,000 Sr. Sec. Nt. 13.50% due 7/15/2008 Caa2/CCC 833,469 NRG Energy, Inc. 596,000 Sec. Nt.+ 8.00% due 12/15/2013 B2/B+ 601,960 Reliant Energy, Inc. 298,000 Sec. Nt. 9.25% due 7/15/2010 B1/B 318,115 Reliant Resources, Inc. 745,000 Sec. Nt. 9.50% due 7/15/2013 B1/B 802,737 Sierra Pacific Resources 1,341,000 Sr. Nt.+ 8.625% due 3/15/2014 B2/B- 1,307,475 ---------- 8,188,481 - --------------------------------------------------------- Energy -- 3.3% Belden & Blake Corp. 447,000 Sr. Sub. Nt. Ser. B 9.875% due 6/15/2007 Caa2/CCC+ 458,175 Chesapeake Energy Corp. 149,000 Sr. Nt.+ 7.50% due 6/15/2014 Ba3/BB- 153,470 Dresser, Inc. 447,000 Sr. Nt. 9.375% due 4/15/2011 B2/B 478,290 Newpark Resources, Inc. 700,000 Sr. Sub. Nt. Ser. B 8.625% due 12/15/2007 B2/B+ 710,500 Pride Int'l., Inc. 219,000 Sr. Nt.+ 7.375% due 7/15/2014 Ba2/BB- 221,190 Western Oil Sands, Inc. 298,000 Sr. Sec. Nt. 8.375% due 5/1/2012 Ba2/BB+ 323,330 ---------- 2,344,955 - --------------------------------------------------------- Entertainment -- 2.0% Intrawest Corp. 447,000 Sr. Nt. 7.50% due 10/15/2013 B1/B+ 436,943 Six Flags, Inc. 1,005,000 Sr. Nt.+ 9.625% due 6/1/2014 B3/B- 999,975 ---------- 1,436,918 - --------------------------------------------------------- Environmental -- 0.5% Allied Waste NA, Inc. 335,000 Sr. Nt. 7.875% due 4/15/2013 Ba3/BB- 350,075 - ---------------------------------------------------------
- -------------------------------------------------------------- Rating Principal Moody's/ Amount S&P* Value - -------------------------------------------------------------- Food and Beverage -- 6.8% American Seafood Group LLC $ 560,000 Sr. Sub. Nt. 10.125% due 4/15/2010 B3/B $ 672,000 B & G Foods, Inc. 350,000 Sr. Sub. Nt. Ser. D 9.625% due 8/1/2007 B3/CCC+ 356,125 Del Monte Corp. 635,000 Sr. Sub. Nt. 9.25% due 5/15/2011 B2/B 693,737 Merisant Co. 968,000 Sr. Sub. Nt.+ 9.50% due 7/15/2013 B3/B- 1,030,920 Michael Foods, Inc. 373,000 Sr. Sub. Nt. 8.00% due 11/15/2013 B3/B- 385,123 Premium Standard Farms, Inc. 969,000 Sr. Nt. 9.25% due 6/15/2011 B1/BB 998,070 Seminis Vegetable Seeds, Inc. 670,000 Sr. Sub. Nt. 10.25% due 10/1/2013 B3/B- 728,625 ---------- 4,864,600 - -------------------------------------------------------------- Gaming -- 0.4% Sun Int'l. Hotels Ltd. 285,000 Sr. Sub. Nt. 8.875% due 8/15/2011 B2/B 304,238 - -------------------------------------------------------------- Health Care -- 3.2% Fisher Scientific Int'l., Inc. 382,000 Sr. Sub. Nt. 8.125% due 5/1/2012 B2/B+ 408,740 Fresenius Medical Care 570,000 Capital Tr. 7.875% due 6/15/2011 Ba2/BB- 604,200 Medical Device Mfg., Inc. 366,000 Sr. Sub. Nt.+ 10.00% due 7/15/2012 Caa1/B- 373,320 National Nephrology Assocs., Inc. 288,000 Sr. Sub. Nt.+ 9.00% due 11/1/2011 B1/B 329,760 PerkinElmer, Inc. 560,000 Sr. Sub. Nt. 8.875% due 1/15/2013 Ba3/BB- 611,800 ---------- 2,327,820 - -------------------------------------------------------------- Home Construction -- 1.3% Beazer Homes USA, Inc. 149,000 Sr. Nt. 8.375% due 4/15/2012 Ba1/BB 157,195 Meritage Corp. 286,000 Sr. Nt. 9.75% due 6/1/2011 Ba3/BB- 314,600 Standard Pacific Corp. 149,000 Sr. Sub. Nt. 9.25% due 4/15/2012 Ba3/B+ 160,175 WCI Communities, Inc. 280,000 Sr. Sub. Nt. 9.125% due 5/1/2012 Ba3/B 302,400 ---------- 934,370 - --------------------------------------------------------------
- -------------------------------------------------------------------------------- See notes to financial statements. 44 .. The Guardian High Yield Bond Fund Schedule of Investments (Continued) June 30, 2004 (Unaudited)
- ------------------------------------------------------------ Rating Principal Moody's/ Amount S&P* Value - ------------------------------------------------------------ Industrial-Other -- 0.9% General Cable Corp. $ 575,000 Sr. Nt. 9.50% due 11/15/2010 B2/B $ 618,125 - ------------------------------------------------------------ Lodging -- 0.4% John Q. Hammons Hotels LP 280,000 1st Mtg. Nt. Ser. B 8.875% due 5/15/2012 B2/B 303,800 - ------------------------------------------------------------ Media-Cable -- 4.4% Charter Comm. Hldgs. 1,043,000 Sr. Nt. 10.25% due 1/15/2010 Ca/CCC- 860,475 Charter Comm. Hldgs. II 744,000 Sr. Nt.+ 10.25% due 9/15/2010 Caa1/CCC- 749,580 Charter Comm. Operating LLC 372,000 Sr. Nt.+ 8.00% due 4/30/2012 B2/B- 359,910 CSC Hldgs., Inc. 373,000 Sr. Debt. Ser. B 8.125% due 8/15/2009 B1/BB- 387,920 Insight Comm., Inc. 298,000 Sr. Disc. Nt. (1) 0/12.25% due 2/15/2011 Caa2/B- 268,200 Insight Midwest LP 52,000 Sr. Nt. 10.50% due 11/1/2010 B2/B+ 56,680 321,000 Sr. Nt.+ 10.50% due 11/1/2010 B2/B+ 349,890 Kabel Deutschland GmbH 146,000 Sr. Nt.+ 10.625% due 7/1/2014 B3/B 150,015 ---------- 3,182,670 - ------------------------------------------------------------ Media-NonCable -- 4.3% American Media Operations, Inc. 570,000 Sr. Sub. Nt. Ser. B 10.25% due 5/1/2009 B2/B- 591,375 Dex Media East LLC 540,000 Sr. Sub. Nt. 12.125% due 11/15/2012 Caa1/B 630,450 DirecTV Hldgs. Finance 278,000 Sr. Nt. 8.375% due 3/15/2013 B1/BB- 307,537 Houghton Mifflin Co. 1,043,000 Sr. Sub. Nt. 9.875% due 2/1/2013 B3/B 1,043,000 R.H. Donnelley Fin. Corp. I 465,000 Sr. Sub. Nt.+ 10.875% due 12/15/2012 B2/B+ 539,400 ---------- 3,111,762 - ------------------------------------------------------------ Metals and Mining -- 1.8% AK Steel Corp. 372,000 Sr. Nt. 7.75% due 6/15/2012 B3/B+ 335,730 671,000 Sr. Nt. 7.875% due 2/15/2009 B3/B+ 627,385 Luscar Coal Ltd. 286,000 Sr. Nt. 9.75% due 10/15/2011 Ba3/BB 321,750 ---------- 1,284,865 - ------------------------------------------------------------
- -------------------------------------------------------------- Rating Principal Moody's/ Amount S&P* Value - -------------------------------------------------------------- Natural Gas-Pipelines -- 5.0% El Paso Natural Gas $ 670,000 Sr. Nt. 7.625% due 8/1/2010 B1/B- $ 686,750 El Paso Partners 372,000 Sr. Sub. Nt. Ser. B 8.50% due 6/1/2011 B1/BB- 402,690 El Paso Production Hldg. 965,000 Sr. Nt. 7.75% due 6/1/2013 B3/B- 885,387 Gulfterra Energy Partners 32,000 Sr. Sub. Nt. Ser. B 8.50% due 6/1/2010 B1/BB- 34,800 Northwest Pipeline Corp. 208,000 Sr. Nt. 8.125% due 3/1/2010 B1/B+ 224,120 Southern Natural Gas Co. 623,000 Nt. 7.35% due 2/15/2031 B1/B- 557,585 Transcontinental Gas Pipeline Corp. 180,000 Nt. Ser. B 7.00% due 8/15/2011 B1/B+ 184,500 Williams Cos., Inc. 600,000 Nt. 8.125% due 3/15/2012 B3/B+ 640,500 ---------- 3,616,332 - -------------------------------------------------------------- Noncaptive Consumer -- 0.8% Dollar Financial Group, Inc. 559,000 Sr. Nt. 9.75% due 11/15/2011 B3/B 584,155 - -------------------------------------------------------------- Non Sovereign -- 0.5% Gazprom OAO 328,000 Nt.+ 9.625% due 3/1/2013 NR/BB- 337,430 - -------------------------------------------------------------- Packaging -- 0.9% Crown European Hldgs. S.A. 355,000 Sec. Nt. 9.50% due 3/1/2011 B1/B+ 386,950 Silgan Hldgs., Inc. 298,000 Sr. Sub. Nt. 6.75% due 11/15/2013 B1/B+ 289,060 ---------- 676,010 - -------------------------------------------------------------- Paper and Forest Products -- 4.1% Georgia-Pacific Corp. 447,000 Sr. Nt. 9.375% due 2/1/2013 Ba2/BB+ 511,815 Graphic Packaging Int'l., Inc. 522,000 Sr. Sub. Nt. 9.50% due 8/15/2013 B3/B- 566,370 Millar Western Forest 298,000 Sr. Nt. 7.75% due 11/15/2013 B3/B+ 299,490 Stone Container Corp. 745,000 Sr. Nt. 8.375% due 7/1/2012 B2/B 778,525 Tembec Inds., Inc. 745,000 Sr. Nt. 8.625% due 6/30/2009 Ba3/BB- 754,312 ---------- 2,910,512 - --------------------------------------------------------------
- -------------------------------------------------------------------------------- See notes to financial statements. 45 .. The Guardian High Yield Bond Fund Schedule of Investments (Continued) June 30, 2004 (Unaudited)
- ----------------------------------------------------------- Rating Principal Moody's/ Amount S&P* Value - ----------------------------------------------------------- Retailers -- 4.1% Cole National Group, Inc. $ 280,000 Sr. Sub. Nt. 8.875% due 5/15/2012 B3/B $ 298,900 CSK Auto, Inc. 143,000 Sr. Nt.+ 7.00% due 1/15/2014 B2/B- 136,208 J.C. Penney Co., Inc. 596,000 Nt. 8.00% due 3/1/2010 Ba3/BB+ 666,030 720,000 Nt. 9.00% due 8/1/2012 Ba3/BB+ 849,600 Petco Animal Supplies, Inc. 285,000 Sr. Sub. Nt. 10.75% due 11/1/2011 B2/B+ 319,200 Rite Aid Corp. 280,000 Sr. Nt. 11.25% due 7/1/2008 Caa1/B- 308,700 Sonic Automotive, Inc. 373,000 Sr. Sub. Nt. 8.625% due 8/15/2013 B2/B+ 388,852 ---------- 2,967,490 - ----------------------------------------------------------- Supermarkets -- 0.4% Pathmark Stores, Inc. 284,000 Sr. Sub. Nt. 8.75% due 2/1/2012 B2/B 284,000 - ----------------------------------------------------------- Technology -- 2.9% AMI Semiconductor, Inc. 361,000 Sr. Sub. Nt. 10.75% due 2/1/2013 B3/B 421,468 Amkor Technologies, Inc. 298,000 Sr. Nt.+ 7.125% due 3/15/2011 B1/B 279,375 Da-Lite Screen Co., Inc. 224,000 Sr. Nt.+ 9.50% due 5/15/2011 B2/B- 232,960 Iron Mountain, Inc. 700,000 Sr. Sub. Nt. 8.625% due 4/1/2013 B3/B 742,000 New Asat (Finance) Ltd. 373,000 Sr. Nt.+ 9.25% due 2/1/2011 B3/B 369,270 ---------- 2,045,073 - ----------------------------------------------------------- Textile -- 2.8% Oxford Inds., Inc. 300,000 Sr. Nt.+ 8.875% due 6/1/2011 B2/B 316,500 Russell Corp. 350,000 Sr. Nt. 9.25% due 5/1/2010 B1/BB- 371,875 St. John Knits Int'l., Inc. 750,000 Sr. Sub. Nt. 12.50% due 7/1/2009 B3/B- 804,375 William Carter Co. 422,000 Sr. Sub. Nt. Ser. B 10.875% due 8/15/2011 B3/B+ 477,915 ---------- 1,970,665 - -----------------------------------------------------------
- -------------------------------------------------------------- Rating Principal Moody's/ Amount S&P* Value - -------------------------------------------------------------- Transportation -- 0.7% Omi Corp. $ 220,000 Sr. Nt. 7.625% due 12/1/2013 B1/B+ $ 215,600 Teekay Shipping Corp. 280,000 Sr. Nt. 8.875% due 7/15/2011 Ba2/BB- 309,750 ----------- 525,350 - -------------------------------------------------------------- Wireless Communications -- 3.0% Centennial Cell Comm. Corp. 700,000 Sr. Nt. 10.125% due 6/15/2013 Caa1/CCC 722,750 Inmarsat Finance PLC 75,000 Nt.+ 7.625% due 6/30/2012 B2/B 72,563 Nextel Comm., Inc. 700,000 Sr. Nt. 7.375% due 8/1/2015 B2/BB 707,000 Nextel Partners, Inc. 350,000 Sr. Nt. 8.125% due 7/1/2011 Caa1/B- 357,000 Ubiquitel Operating Co. 298,000 Sr. Nt.+ 9.875% due 3/1/2011 Caa1/CCC 298,000 ----------- 2,157,313 - -------------------------------------------------------------- Wireline Communications -- 1.6% Qwest Corp. 855,000 Debt. 7.20% due 11/10/2026 Ba3/BB- 735,300 Qwest Svcs. Corp. 355,000 Nt.+ 13.50% due 12/15/2010 Caa1/B 412,688 ----------- 1,147,988 - -------------------------------------------------------------- Total Corporate Bonds (Cost $63,066,628) 64,774,454 - -------------------------------------------------------------- Sovereign Debt Security -- 0.7% Federative Republic of Brazil $ 575,000 Nt. B2/B+ 9.25% due 10/22/2010 (Cost $569,626) $ 544,812 - -------------------------------------------------------------- Warrant -- 0.0% Shares Value - -------------------------------------------------------------- XM Satellite Radio, Inc. 330 exp. 3/15/2010 (Cost $66,660) $ 18,150 - --------------------------------------------------------------
- -------------------------------------------------------------------------------- See notes to financial statements. 46 .. The Guardian High Yield Bond Fund Schedule of Investments (Continued) June 30, 2004 (Unaudited) Repurchase Agreement -- 6.4% Principal Amount Value - -------------------------------------------------------------------- $ 4,571,000 State Street Bank and Trust Co. repurchase agreement, dated 6/30/2004, maturity value $4,571,171 at 1.35% due 7/1/2004 (3) (Cost $4,571,000) $ 4,571,000 - ----------------------------------------------------------------- Total Investments -- 97.4% (Cost $68,273,914) 69,908,416 Cash, Receivables and Other Assets Less Liabilities -- 2.6% 1,842,735 - ----------------------------------------------------------------- Net Assets -- 100% $71,751,151 - -----------------------------------------------------------------
* Unaudited. + Rule 144A restricted security. (1)Step-up bond. (2)Discount note. The rate shown is the effective yield at date of purchase. (3)The repurchase agreement is fully collateralized by U.S. Government and/or agency obligations based on market prices at the date of the portfolio. - -------------------------------------------------------------------------------- See notes to financial statements. 47 .. The Guardian Tax-Exempt Fund Schedule of Investments June 30, 2004 (Unaudited) Municipal Bonds -- 106.6% Rating Principal Moody's/ Amount S&P* Value - ----------------------------------------------------------------- Alabama -- 1.2% $ 1,000,000 Alabama 21st Century Auth. Tobacco Settlement Rev., 5.25% due 12/1/2009 Baa1/A- $ 1,014,970 - ----------------------------------------------------------------- Alaska -- 0.3% 250,000 Northern Tobacco Securitization Corp., 5.40% due 6/1/2008 Baa2/BBB 248,685 - ----------------------------------------------------------------- Arizona -- 7.2% 1,500,000 Mesa, AZ Street & Hwy. Rev., 5.125% due 7/1/2023 Aaa/AAA 1,539,510 1,500,000 Phoenix, AZ Civic Impt. Corp. Wtr. Sys. Rev., 5.50% due 7/1/2020 Aaa/AAA 1,610,085 1,000,000 Phoenix, AZ G.O. Ser. B, 5.375% due 7/1/2020 Aa1/AA+ 1,069,220 1,910,000 Tempe, AZ Excise Tax Rev., 5.00% due 7/1/2009 Aaa/AAA 2,067,269 ----------- 6,286,084 - ----------------------------------------------------------------- Arkansas -- 1.3% 1,000,000 Arkansas St. G.O. Fed. Hwy. Grant Ser. A, 5.50% due 8/1/2011 Aa2/AA 1,099,790 - ----------------------------------------------------------------- California -- 14.8% 4,000,000 California St. Dept. Wtr. Resources Pwr. Supply Rev., 1.04% due 5/1/2022 (1) Aaa/AA- 4,000,000 3,000,000 California St. Econ. G.O. Ser. B, 5.00% due 7/1/2023 Aa3/AA- 3,235,530 California St. G.O., 500,000 1.00% due 5/1/2033 (1) Aaa/A 500,000 2,000,000 5.25% due 11/1/2027 A3/BBB 1,999,840 2,000,000 California St. Pub. Wks. Brd. Dept. of Mental Hlth., 5.50% due 6/1/2023 Baa1/BBB- 2,042,760 1,250,000 Metropolitan Wtr. Dist. South California Wtrwks. Rev. Ser. B-1, 5.00% due 10/1/2029 Aaa/AAA 1,242,812 ----------- 13,020,942 - ----------------------------------------------------------------- Colorado -- 2.8% 1,120,000 La Plata Cnty., CO Sch. Dist., 5.25% due 11/1/2015 Aaa/NR 1,220,677 1,205,000 Teller Cnty., CO Sch. Dist., 5.00% due 12/1/2016 Aaa/AAA 1,282,385 ----------- 2,503,062 - ----------------------------------------------------------------- Florida -- 5.4% 2,000,000 Florida St. Brd. of Ed. Lottery Rev. Ser. A, 5.50% due 7/1/2017 Aaa/AAA 2,167,400 1,500,000 Florida St. Brd. of Ed. Lottery Rev. Ser. C, 5.25% due 7/1/2016 Aaa/AAA 1,619,070 1,000,000 Lakes By The Bay South Community, 6.25% due 5/1/2034 NR/NR 998,950 ----------- 4,785,420 - -----------------------------------------------------------------
- ------------------------------------------------------------------ Rating Principal Moody's/ Amount S&P* Value - ------------------------------------------------------------------ Georgia -- 1.6% $ 1,000,000 Fulton Cnty., GA Dev. Auth. Rev. Georgia Tech. Foundation Ser. A, 5.125% due 11/1/2021 Aa1/AA+ $ 1,035,390 350,000 Gainesville, GA Wtr. & Swg. Rev., 5.25% due 11/15/2018 Aaa/AAA 370,311 ------------ 1,405,701 - --------------------------------------------------------------- Idaho -- 2.0% 1,625,000 Boise City, ID Urban Renewal Agy. Lease, 6.00% due 8/15/2023 Aaa/AAA 1,783,860 - --------------------------------------------------------------- Illinois -- 4.2% 1,000,000 Chicago, IL Brd. of Ed. Ser. A, 5.25% due 12/1/2018 Aaa/AAA 1,056,970 2,500,000 Illinois St. Unemployment Insurance, 5.00% due 12/15/2007 Aaa/AAA 2,676,725 ------------ 3,733,695 - --------------------------------------------------------------- Iowa -- 2.1% 1,955,000 Tobacco Settlement Auth. IA Rev. Ser. B, 5.50% due 6/1/2011 Baa3/BBB 1,864,210 - --------------------------------------------------------------- Maryland -- 3.5% 1,500,000 Prince Georges Cnty., MD Industrial Dev. Auth. Ref., 5.00% due 6/30/2019 Aaa/AAA 1,563,915 1,500,000 Prince Georges Cnty., MD Pub. Impt. Ser. A, 5.00% due 10/1/2021 Aa2/AA 1,546,905 ------------ 3,110,820 - --------------------------------------------------------------- Massachusetts -- 5.1% 2,000,000 Massachusetts Bay Trans. Auth. Rev. Ser. A, 5.00% due 7/1/2027 Aa1/AAA 1,975,760 1,500,000 Massachusetts St. Special Obligation Rev., 5.25% due 1/1/2028 Aaa/AAA 1,526,910 1,000,000 Massachusetts St. Wtr. Resources Auth. Rev. Ser.A, 5.00% due 8/1/2029 Aaa/AAA 984,510 ------------ 4,487,180 - --------------------------------------------------------------- Minnesota -- 1.7% 1,500,000 St. Paul, MN Port Auth. Lease Rev., 5.125% due 12/1/2027 Aa2/AA+ 1,514,970 - --------------------------------------------------------------- New Mexico -- 1.3% 1,000,000 New Mexico St. Hwy. Comm. Tax Rev. Preref., 6.00% due 6/15/2010 (2) Aa2/AA+ 1,129,950 - --------------------------------------------------------------- New York -- 5.4% 1,255,000 New York City Industrial Dev. Agy., 5.25% due 3/1/2018 Aaa/AAA 1,334,718 3,200,000 New York St. Housing Fin. Agy. Rev., 6.00% due 11/1/2006 A3/A+ 3,422,944 ------------ 4,757,662 - ---------------------------------------------------------------
- -------------------------------------------------------------------------------- See notes to financial statements. 48 .. The Guardian Tax-Exempt Fund Schedule of Investments (Continued) June 30, 2004 (Unaudited)
- ----------------------------------------------------------------- Rating Principal Moody's/ Amount S&P* Value - ----------------------------------------------------------------- North Dakota -- 1.2% $ 1,000,000 North Dakota St. Wtr. Comm. Rev., 5.75% due 8/1/2020 Aaa/AAA $ 1,095,140 - ----------------------------------------------------------------- Ohio -- 3.8% 750,000 Ohio St. Bldg. Auth. Disalle Gov't. Ctr. Ser. A, 6.00% due 10/1/2005 Aa2/AA 787,748 1,300,000 Ohio St. Higher Ed. Fac. Comm., 5.50% due 12/1/2020 Aaa/AAA 1,389,570 1,050,000 Univ. of Cincinnati, OH General Rcpts. Ser. A, 5.50% due 6/1/2011 Aaa/AAA 1,172,976 ----------- 3,350,294 - ----------------------------------------------------------------- Pennsylvania -- 2.5% Delaware River Port Auth. PA & NJ, 1,000,000 5.10% due 1/1/2020 Aaa/AAA 1,038,410 1,000,000 6.00% due 1/1/2017 Aaa/AAA 1,119,570 ----------- 2,157,980 - ----------------------------------------------------------------- Puerto Rico -- 12.0% 1,000,000 Puerto Rico Comwlth. Pub. Impt. Ser. A, 5.25% due 7/1/2017 Baa1/A- 1,054,170 1,000,000 Puerto Rico Muni. Fin. Agency Ser. A, 5.25% due 8/1/2021 Aaa/AAA 1,053,710 1,500,000 Puerto Rico Pub. Bldgs. Auth. Rev. Gov't. Facs. Ser. I, 5.50% due 7/1/2020 Baa1/A- 1,586,175 2,000,000 Puerto Rico Pub. Bldgs. Auth. Rev. Ref. Gov't. Facs. Ser. J, 5.00% due 7/1/2036 Aaa/AAA 2,152,560 2,400,000 Puerto Rico Pub. Bldgs. Auth. Rev. Ref. Gov't. Facs. Ser. K, 4.50% due 7/1/2022 Baa1/A- 2,499,288 2,000,000 Puerto Rico Pub. Fin. Corp. Comwlth. Approp. Ser. A, 5.75% due 8/1/2027 Baa2/BBB+ 2,188,320 ----------- 10,534,223 - ----------------------------------------------------------------- South Carolina -- 4.8% 350,000 Charleston Cnty., SC Sch. Dist. Ref. Ser. B, 5.00% due 2/1/2016 Aa1/AA+ 365,676 1,250,000 Charleston, SC Wtrwks. & Swr. Rev., 5.25% due 1/1/2018 Aa3/AA- 1,314,700 1,500,000 Charleston, SC Wtrwks. & Swr. Rev. Ser. B, 5.00% due 1/1/2028 Aa3/AA- 1,485,660 1,000,000 Mount Pleasant, SC Wtr. & Swr. Rev. Ref. & Impt., 5.25% due 12/1/2019 Aaa/AAA 1,062,010 ----------- 4,228,046 - ----------------------------------------------------------------- Tennessee -- 2.8% 700,000 Knox Cnty., TN Pub. Impt. G.O., 5.375% due 5/1/2020 Aa2/AA 738,479 1,700,000 Tennessee Housing Dev. Agy. Mtg. Fin. Ser. A, 5.20% due 7/1/2023 Aa2/AA 1,717,000 ----------- 2,455,479 - -----------------------------------------------------------------
- ----------------------------------------------------------------- Rating Principal Moody's/ Amount S&P* Value - ----------------------------------------------------------------- Texas -- 4.7% $ 2,000,000 Harris Cnty., TX Ref. Ser. B, 5.00% due 8/15/2032 Aaa/AAA $ 2,155,920 2,000,000 Texas St. Wtr. Finl. Assistance Ser. C & D, 5.00% due 8/1/2027 Aa1/AA 1,959,700 ----------- 4,115,620 - ----------------------------------------------------------------- Virginia -- 7.5% 3,000,000 Fairfax Cnty., VA Ref. Pub. Impt. Ser. A, 4.25% due 6/1/2008 Aaa/AAA 3,155,160 1,500,000 Riverside, VA Regional Jail Auth. Rev., 5.00% due 7/1/2021 Aaa/AAA 1,536,960 1,790,000 Virginia St. Pub. Sch. Auth. Ser. A, 5.00% due 8/1/2019 Aa1/AA+ 1,861,099 ----------- 6,553,219 - ----------------------------------------------------------------- Washington -- 5.3% 1,250,000 Cowlitz Cnty., WA Sch. Dist. G.O., 5.50% due 12/1/2019 Aaa/NR 1,335,200 1,250,000 Snohomish Cnty., WA G.O., 5.375% due 12/1/2019 Aaa/AAA 1,329,487 2,000,000 Tobacco Settlement Auth. WA Rev., 6.25% due 6/1/2011 Baa3/BBB 1,984,420 ----------- 4,649,107 - ----------------------------------------------------------------- Wisconsin -- 2.1% Badger Tobacco Asset Securitization Corp., 1,000,000 5.75% due 6/1/2012 Baa3/BBB 951,770 1,000,000 6.00% due 6/1/2017 Baa3/BBB 905,610 ----------- 1,857,380 - ----------------------------------------------------------------- Total Municipal Bonds (Cost $92,369,079) 93,743,489 - ----------------------------------------------------------------- Total Investments -- 106.6% (Cost $92,369,079) 93,743,489 Liabilities in Excess of Cash, Receivables and Other Assets -- (6.6)% (5,796,131) - ----------------------------------------------------------------- Net Assets -- 100% $87,947,358 - -----------------------------------------------------------------
* Unaudited. (1)Variable rate demand notes. (2)Pre-refunded. Glossary: G.O. -- General Obligation. - -------------------------------------------------------------------------------- See notes to financial statements. 49 .. The Guardian Cash Management Fund Schedule of Investments June 30, 2004 (Unaudited) Corporate Bonds -- 1.8% Principal Maturity Amount Date Value - ------------------------------------------------------------------ Capital Markets -- 1.1% $ 5,000,000 Goldman Sachs Group, Inc. 7.50% 1/28/2005 $ 5,175,595 - ------------------------------------------------------------------ Wireline Communications -- 0.7% 3,500,000 NYNEX Capital Funding 8.75% 12/1/2004 3,607,320 - ------------------------------------------------------------------ Total Corporate Bonds (Cost $8,782,915) 8,782,915 - ------------------------------------------------------------------ Municipal Bonds -- 2.2% $ 6,000,000 Connecticut St. Ref. Ser. B 5.97% 8/1/2004 $ 6,023,340 5,000,000 New York St. Urban Dev. Corp. Rev. 2.08% 12/15/2004 5,018,809 - ------------------------------------------------------------------ Total Municipal Bonds (Cost $11,042,149) 11,042,149 - ------------------------------------------------------------------ U.S. Government Securities -- 5.4% U.S. Government Agency Securities -- 5.4% FHLB $ 4,000,000 1.125% 10/1/2004 $ 3,999,045 6,000,000 1.44% 3/8/2005 6,000,000 7,000,000 2.23% 7/6/2005 7,000,000 10,000,000 FNMA 1.65% 5/16/2005 10,000,000 - ------------------------------------------------------------------ Total U.S. Government Securities (Cost $26,999,045) 26,999,045 - ------------------------------------------------------------------ Commercial Paper -- 59.2% ASSET BACKED -- 2.0% $ 10,000,000 Sheffield Receivables Corp. 1.24% 7/1/2004 $ 10,000,000 - ------------------------------------------------------------------ FINANCIAL -- 22.1% Capital Markets -- 3.0% $ 10,000,000 Goldman Sachs Group, Inc. 1.25% 7/2/2004 $ 9,999,653 5,000,000 J.P. Morgan Chase & Co. 1.18% 7/13/2004 4,998,033 ------------- 14,997,686 - ------------------------------------------------------------------ Diversified Financial Services -- 3.0% 10,000,000 Citigroup Global Markets Hldgs., Inc. 1.15% 7/1/2004 10,000,000 5,000,000 Credit Suisse First Boston 1.20% 7/21/2004 4,996,667 ------------- 14,996,667 - ------------------------------------------------------------------ Finance Companies -- 3.0% Private Export Funding Corp. 10,000,000 1.05% 7/13/2004 9,996,500 5,000,000 1.05% 8/24/2004 4,992,125 ------------- 14,988,625 - ------------------------------------------------------------------ Financial-Banks -- 7.1% 10,000,000 Dexia Delaware LLC 1.29% 7/29/2004 9,989,966
- ---------------------------------------------------------------- Principal Maturity Amount Date Value - ---------------------------------------------------------------- $ 10,000,000 HVB Finance 1.22% 7/26/2004 $ 9,991,528 15,000,000 Societe Generale NA 1.43% 7/1/2004 15,000,000 ------------- 34,981,494 - ---------------------------------------------------------------- Financial-Other -- 6.0% 10,000,000 American General Fin. Corp. 1.19% 7/12/2004 9,996,364 10,000,000 Barton Capital Corp. 1.20% 7/12/2004 9,996,333 10,000,000 Govco, Inc. 1.30% 7/21/2004 9,992,778 ------------- 29,985,475 - ---------------------------------------------------------------- TOTAL FINANCIAL 109,949,947 - ---------------------------------------------------------------- INDUSTRIAL -- 35.1% Auto Components -- 3.0% $ 15,000,000 Johnson Controls, Inc. 1.50% 7/1/2004 $ 15,000,000 - ---------------------------------------------------------------- Automobiles -- 3.0% 15,000,000 BMW US Capital Corp. 1.45% 7/1/2004 15,000,000 - ---------------------------------------------------------------- Beverage -- 2.0% Coca-Cola Enterprises, Inc. 5,000,000 1.25% 7/21/2004 4,996,528 5,000,000 1.26% 7/26/2004 4,995,625 ------------- 9,992,153 - ---------------------------------------------------------------- Chemicals -- 3.0% 15,000,000 Air Products & Chemicals 1.43% 7/1/2004 15,000,000 - ---------------------------------------------------------------- Education -- 1.0% 5,000,000 Northwestern University 1.18% 7/13/2004 4,998,033 - ---------------------------------------------------------------- Food and Staples Retailing -- 2.2% 10,600,000 Wal-Mart Stores, Inc. 1.23% 7/7/2004 10,597,827 - ---------------------------------------------------------------- Food Products -- 2.0% Sara Lee Corp. 5,000,000 1.10% 7/1/2004 5,000,000 5,000,000 1.45% 7/2/2004 4,999,799 ------------- 9,999,799 - ---------------------------------------------------------------- Health Care Equipment and Supplies -- 1.0% 5,000,000 Medtronic, Inc. 1.19% 7/6/2004 4,999,174 - ---------------------------------------------------------------- Household Durables -- 3.0% 15,000,000 Fortune Brands, Inc. 1.43% 7/1/2004 15,000,000 - ---------------------------------------------------------------- Household Products -- 3.0% Procter & Gamble Co. 5,000,000 1.15% 7/14/2004 4,997,923 10,000,000 1.42% 7/1/2004 10,000,000 ------------- 14,997,923 - ---------------------------------------------------------------- Media -- 2.1% 10,200,000 Gannett Co., Inc. 1.22% 7/9/2004 10,197,235 - ----------------------------------------------------------------
- -------------------------------------------------------------------------------- See notes to financial statements. 50 .. The Guardian Cash Management Fund Schedule of Investments (Continued) June 30, 2004 (Unaudited)
- --------------------------------------------------------------- Principal Maturity Amount Date Value - --------------------------------------------------------------- Metals and Mining -- 1.0% $ 5,000,000 Rio Tinto Ltd. 1.20% 7/8/2004 $ 4,998,833 - --------------------------------------------------------------- Multiline Retail -- 2.0% 10,000,000 Target Corp. 1.30% 7/7/2004 9,997,833 - --------------------------------------------------------------- Multi-Utilities and Unregulated Power -- 2.2% 10,640,000 Boston Edison Co. 1.30% 7/6/2004 10,638,079 - --------------------------------------------------------------- Oil and Gas -- 4.6% 8,000,000 Boc Group, Inc. 1.43%+ 7/1/2004 8,000,000 Koch Industries 5,000,000 1.19% 7/15/2004 4,997,686 10,000,000 1.41% 7/1/2004 10,000,000 ------------- 22,997,686 - --------------------------------------------------------------- TOTAL INDUSTRIAL 174,414,575 - --------------------------------------------------------------- Total Commercial Paper (Cost $294,364,522) 294,364,522 - --------------------------------------------------------------- Floating Rate Notes and Bonds -- 22.5% Principal Reset Amount Date* Value - --------------------------------------------------------------- California -- 4.4% $ 13,590,000 California Housing Fin. Agency 1.16% 7/14/2004 $ 13,590,000 8,100,000 Sacramento Cnty., CA 1.14% 7/14/2004 8,100,000 ------------- 21,690,000 - --------------------------------------------------------------- Colorado -- 2.8% Colorado Housing & Fin. Auth. 7,900,000 1.15% 7/14/2004 7,900,000 6,000,000 1.15% 7/14/2004 6,000,000 ------------- 13,900,000 - --------------------------------------------------------------- Connecticut -- 1.6% 8,000,000 Connecticut St. Housing & Fin. Auth. 1.12% 7/8/2004 8,000,000 - --------------------------------------------------------------- Financial-Other -- 2.0% 10,000,000 Countrywide Home Loan 1.684% 9/24/2004 10,000,634 - --------------------------------------------------------------- Florida -- 1.6% 8,000,000 Miami Dade Cnty. Florida Aviation 1.45% 7/14/2004 8,000,000 - --------------------------------------------------------------- Michigan -- 0.8% 4,000,000 Michigan St. Housing Dev. Auth. 1.15% 7/14/2004 4,000,000 - --------------------------------------------------------------- New York -- 3.5% 17,530,000 New York City Transitional 1.15% 7/14/2004 17,530,000 - ---------------------------------------------------------------
- ------------------------------------------------------------------ Principal Reset Amount Date* Value - ------------------------------------------------------------------ Utah -- 4.7% Utah Housing Corp. Single Family $ 4,040,000 1.15% 7/14/2004 $ 4,040,000 4,200,000 1.15% 7/14/2004 4,200,000 1,500,000 1.15% 7/14/2004 1,500,000 5,865,000 1.15% 7/14/2004 5,865,000 Utah St. Housing Fin. Agency 3,035,000 1.15% 7/14/2004 3,035,000 4,730,000 1.15% 7/14/2004 4,730,000 ------------- 23,370,000 - ------------------------------------------------------------------ Washington -- 1.1% 5,595,000 Seattle, WA 1.55% 9/1/2004 5,595,000 - ------------------------------------------------------------------ Total Floating Rate Notes and Bonds (Cost $112,085,634) 112,085,634 - ------------------------------------------------------------------ Repurchase Agreement -- 9.2% Principal Amount Value - ------------------------------------------------------------------ $ 45,848,000 State Street Bank and Trust Co. repurchase agreement, dated 6/30/2004, maturity value $45,849,719 at 1.35% due 7/1/2004 (1) (Cost $45,848,000) $ 45,848,000 - ------------------------------------------------------------------ Total Investments -- 100.3% (Cost $499,122,265) 499,122,265 Liabilities in Excess of Cash, Receivables and Other Assets -- (0.3)% (1,716,449) - ------------------------------------------------------------------ Net Assets -- 100% $ 497,405,816 - ------------------------------------------------------------------
* Floating rate note. The rate shown is the rate in effect at June 30, 2004. + Rule 144A restricted security. (1)The repurchase agreement is fully collateralized by U.S. Government and/or agency obligations based on market prices at the date of the portfolio. - -------------------------------------------------------------------------------- See notes to financial statements. 51 .. The Park Avenue Portfolio Statements of Assets and Liabilities June 30, 2004 (Unaudited) - ------------------------------------------
The Guardian The Guardian The Guardian The Guardian The Guardian Park Avenue UBS Large Park Avenue UBS Small Asset Fund Cap Value Small Cap Cap Value Allocation -------------- Fund Fund Fund Fund ------------ ------------ ------------ ------------ ASSETS Investments, at identified cost (includes majority- owned subsidiary of $132,417,998 and non- controlled affiliated issue of $12,081,730 for GAAF)................................................ $1,082,851,894 $70,431,155 $181,225,942 $34,689,412 $176,024,334 ============== ============ ============ ============ ============ Investments, at market -- Note 1 (includes majority- owned subsidiary of $119,621,343 and non- controlled affiliated issue of $12,467,877 for GAAF)................................................ 1,214,267,418 88,343,955 212,449,609 41,917,701 162,729,579 Cash.................................................. 688 409 155 862 670 Foreign Currency (cost $34,800 GBGIF and $1,150,575 GBGEMF, respectively)..................... -- -- -- -- -- Receivable for securities sold........................ 2,629,800 -- 2,702,747 177,989 -- Dividends receivable.................................. 950,653 57,632 82,081 17,787 66,840 Receivable for fund shares sold....................... 147,153 769 530,272 7,478 83,670 Interest receivable................................... 502 70 196 34 205 Receivable for variation margin -- Note 1............. -- -- -- -- 78,234 Dividend reclaim receivable........................... -- -- -- -- -- Other assets.......................................... 10,168 1,109 1,637 684 1,646 -------------- ------------ ------------ ------------ ------------ Total Assets....................................... 1,218,006,382 88,403,944 215,766,697 42,122,535 162,960,844 -------------- ------------ ------------ ------------ ------------ LIABILITIES Payable for securities purchased...................... 9,420,277 -- 6,376,618 85,834 -- Payable for fund shares redeemed...................... 1,741,757 -- 530,253 359 306,245 Accrued expenses...................................... 320,570 57,474 48,192 56,872 58,594 Payable for variation margin -- Note 1................ -- -- -- -- 57,000 Accrued foreign capital gains tax..................... -- -- -- -- -- Distributions payable................................. -- -- -- -- -- Payable for forward mortgage securities purchased -- Note 7............................................... -- -- -- -- -- Due to GIS............................................ 872,631 121,349 207,316 62,957 50,014 -------------- ------------ ------------ ------------ ------------ Total Liabilities.................................. 12,355,235 178,823 7,162,379 206,022 471,853 -------------- ------------ ------------ ------------ ------------ Net Assets......................................... $1,205,651,147 $88,225,121 $208,604,318 $41,916,513 $162,488,991 ============== ============ ============ ============ ============ COMPONENTS OF NET ASSETS Shares of beneficial interest, at par................. $ 402,759 $ 69,561 $ 107,959 $ 33,084 $ 150,278 Additional paid-in capital............................ 1,769,656,520 67,458,528 157,907,658 31,710,697 227,700,530 Undistributed/(distribution in excess) of net investment income.................................... 302,517 (56,883) (937,543) (199,504) 522,978 Accumulated net realized gain/(loss) on investments and foreign currency related transactions............ (696,126,173) 2,841,114 20,302,577 3,143,947 (52,556,808) Net unrealized appreciation/(depreciation) of investment and foreign currency related transactions......................................... 131,415,524 17,912,801 31,223,667 7,228,289 (13,327,987) -------------- ------------ ------------ ------------ ------------ Net Assets......................................... $1,205,651,147 $88,225,121 $208,604,318 $41,916,513 $162,488,991 ============== ============ ============ ============ ============ NET ASSETS Class A............................................... $1,042,827,233 $23,081,931 $166,967,430 $11,421,913 $114,614,949 Class B............................................... $ 148,648,389 $22,033,957 $ 22,716,634 $10,333,122 $ 31,542,761 Class C............................................... $ 6,556,974 $21,381,622 $ 8,426,905 $ 9,921,971 $ 8,063,401 Class K............................................... $ 7,618,551 $21,727,611 $ 10,493,349 $10,239,507 $ 8,267,880 Shares of Beneficial Interest Outstanding -- $0.01 Par Value Class A............................................... 34,629,770 1,817,971 8,545,629 895,573 10,595,485 Class B............................................... 5,161,573 1,739,216 1,241,561 820,095 2,921,459 Class C............................................... 230,781 1,687,454 463,506 787,484 745,997 Class K............................................... 253,728 1,711,455 545,212 805,279 764,830 Net Asset Value Per Share Class A............................................... $30.11 $12.70 $19.54 $12.75 $10.82 Class B............................................... $28.80 $12.67 $18.30 $12.60 $10.80 Class C............................................... $28.41 $12.67 $18.18 $12.60 $10.81 Class K............................................... $30.03 $12.70 $19.25 $12.72 $10.81 Maximum Offering Price Per Share Class A (Net Asset Value x 104.71%)*.................. $31.53 $13.30 $20.46 $13.35 $11.33 Class A (Net Asset Value x 103.09%)*.................. -- -- -- -- --
*Based on sale of less than $100,000. On sale of $100,000 or more, the offering price is reduced. **No load is charged on Class A shares. - -------------------------------------------------------------------------------- See notes to financial statements. 52
The Guardian The Guardian The Guardian The Guardian The Guardian The Guardian The Guardian The Guardian S&P 500 Baillie Gifford Baillie Gifford Investment Low Duration High Yield Tax-Exempt Cash Index International Emerging Quality Bond Fund Bond Fund Management Fund Growth Fund Markets Fund Bond Fund ------------ Fund ------------ Fund - ------------ --------------- --------------- ------------ ------------ ------------ $166,430,326 $ 39,801,653 $69,110,938 $174,746,962 $31,897,194 $ 68,273,914 $92,369,079 $499,122,265 ============ =============== =============== ============ ============ ============ ============ ============ 166,757,222 51,057,483 79,130,786 174,644,173 31,691,100 69,908,416 93,743,489 499,122,265 90,883 236 301 72,396 54,350 80,287 139,667 122,470 -- 34,814 1,155,832 -- -- -- -- -- -- -- 317,960 4,904,102 731,710 1,438,945 986,640 -- 182,482 67,672 128,178 -- -- -- -- -- 224,151 5,484 65,386 41,848 55,513 2,254 45,745 152,850 150 3,107 11 1,882,757 367,859 1,448,497 866,667 715,159 16,100 -- -- -- -- -- -- -- -- 76,538 -- -- -- -- -- -- 1,494 970 767 2,251 519 912 1,244 5,487 - ------------ --------------- --------------- ------------ ------------ ------------ ------------ ------------ 167,272,482 51,246,304 80,799,221 181,547,527 32,901,051 72,879,311 95,783,452 500,118,231 - ------------ --------------- --------------- ------------ ------------ ------------ ------------ ------------ -- 436,843 1,066,151 -- 433,876 1,013,519 7,722,150 -- 45,407 118,402 142,496 359,726 -- 13,713 5,000 2,212,848 44,301 58,901 35,125 62,789 81,293 30,220 37,594 143,678 -- -- -- -- -- -- -- -- -- -- 408 -- -- -- -- -- -- -- -- 139,445 393 -- 5,483 410 -- -- -- 19,974,305 -- -- -- -- 92,653 22,118 34,732 131,461 33,645 70,708 65,867 355,479 - ------------ --------------- --------------- ------------ ------------ ------------ ------------ ------------ 182,361 636,264 1,278,912 20,667,726 549,207 1,128,160 7,836,094 2,712,415 - ------------ --------------- --------------- ------------ ------------ ------------ ------------ ------------ $167,090,121 $ 50,610,040 $79,520,309 $160,879,801 $32,351,844 $ 71,751,151 $87,947,358 $497,405,816 ============ =============== =============== ============ ============ ============ ============ ============ $ 213,367 $ 44,577 $ 66,931 $ 163,171 $ 32,593 $ 98,654 $ 88,064 $ 4,974,058 263,200,209 80,260,608 65,496,041 160,466,813 32,566,505 87,749,926 85,903,425 492,431,758 147,605 124,178 987 -- -- -- -- -- (96,805,593) (41,082,159) 3,948,280 352,607 (41,160) (17,731,931) 581,459 -- 334,533 11,262,836 10,008,070 (102,790) (206,094) 1,634,502 1,374,410 -- - ------------ --------------- --------------- ------------ ------------ ------------ ------------ ------------ $167,090,121 $ 50,610,040 $79,520,309 $160,879,801 $32,351,844 $ 71,751,151 $87,947,358 $497,405,816 ============ =============== =============== ============ ============ ============ ============ ============ $135,978,639 $ 31,468,797 $48,478,113 $122,641,778 $ 8,976,478 $ 42,574,986 $77,756,332 $469,516,649 $ 12,802,356 $ 6,288,941 $ 9,504,158 $ 17,020,938 $ 8,031,782 $ 9,891,855 -- $ 9,929,301 $ 9,680,520 $ 5,674,585 $ 9,754,030 $ 11,098,558 $ 7,733,245 $ 9,441,425 $10,191,026 $ 8,621,871 $ 8,628,606 $ 7,177,717 $11,784,008 $ 10,118,527 $ 7,610,339 $ 9,842,885 -- $ 9,337,995 17,357,296 2,705,210 3,989,331 12,439,020 904,374 5,853,122 7,785,924 469,516,649 1,637,872 592,854 849,017 1,726,933 809,155 1,360,596 -- 9,929,301 1,239,493 533,569 868,994 1,126,002 779,077 1,298,918 1,020,465 8,621,871 1,101,995 626,050 985,723 1,025,194 766,697 1,352,741 -- 9,337,995 $7.83 $11.63 $12.15 $9.86 $9.93 $7.27 $9.99 $1.00 $7.82 $10.61 $11.19 $9.86 $9.93 $7.27 -- $1.00 $7.81 $10.64 $11.22 $9.86 $9.93 $7.27 $9.99 $1.00 $7.83 $11.47 $11.95 $9.87 $9.93 $7.28 -- $1.00 $8.20 $12.18 $12.72 $10.32 -- $7.61 $10.46 N/A** -- -- -- -- $10.24 -- -- --
- -------------------------------------------------------------------------------- 53 .. The Park Avenue Portfolio Statements of Operations Six Months Ended June 30, 2004 (Unaudited) - ------------------------------------------
The Guardian The Guardian The Guardian The Guardian The Guardian Park Avenue UBS Large Park Avenue UBS Small Asset Fund Cap Value Small Cap Cap Value Allocation ------------ Fund Fund Fund Fund ------------ ------------ ------------ ------------ INVESTMENT INCOME Dividends (includes $534,706 from a majority-owned subsidiary and $407,301 from a non-controlled affiliate for GAAF)....................................... $ 8,329,792 $ 886,389 $ 450,633 $ 290,998 $1,088,497 Interest................................................... 52,568 11,691 17,696 4,418 26,889 Less: Foreign tax withheld................................. -- -- (1,962) (283) (29) ------------ ------------ ------------ ------------ ------------ Total Income............................................ 8,382,360 898,080 466,367 295,133 1,115,357 ------------ ------------ ------------ ------------ ------------ Expenses: Investment advisory fees -- Note 2......................... 3,142,683 356,555 768,045 201,626 535,362 Administrative fees -- Class A -- Note 2................... 1,179,456 27,752 204,558 13,503 145,813 Administrative fees -- Class B -- Note 2................... 195,945 26,943 28,476 12,515 40,178 Administrative fees -- Class C -- Note 2................... 8,248 26,197 10,279 12,080 9,868 Administrative fees -- Class K -- Note 2................... 9,303 26,504 12,702 12,309 10,049 12b-1 fees -- Class B -- Note 3............................ 587,834 80,830 85,427 37,545 120,534 12b-1 fees -- Class C -- Note 3............................ 24,745 78,590 30,838 36,241 29,605 12b-1 fees -- Class K -- Note 3............................ 14,884 42,407 20,323 19,694 16,079 Transfer agent fees -- Class A............................. 713,069 15,931 75,524 15,776 80,269 Transfer agent fees -- Class B............................. 233,365 15,436 28,952 15,266 32,088 Transfer agent fees -- Class C............................. 17,563 12,300 15,755 15,048 16,111 Transfer agent fees -- Class K............................. -- 58 -- 40 -- Custodian fees............................................. 111,183 46,020 56,954 42,629 51,395 Printing expense........................................... 68,118 6,360 8,386 4,268 8,148 Registration fees.......................................... 45,814 41,562 34,423 41,583 34,550 Trustees' fees -- Note 2................................... 44,064 2,779 5,371 1,258 5,260 Legal fees................................................. 21,383 874 2,486 497 2,586 Insurance expense.......................................... 18,187 1,558 2,522 881 2,539 Audit fees................................................. 13,824 13,825 11,362 11,362 11,362 Loan commitment fees -- Note 9............................. 10,092 622 1,299 291 1,277 Other...................................................... 1,678 227 228 225 432 ------------ ------------ ------------ ------------ ------------ Total Expenses before Reimbursement and Custody credits........................................ 6,461,438 823,330 1,403,910 494,637 1,153,505 Less: Expenses assumed by investment adviser -- Note 2...................................... -- -- -- -- (634,866) Custody credits -- Note 1............................... -- -- -- -- -- ------------ ------------ ------------ ------------ ------------ Expenses Net of Reimbursement and Custody credits................................................ 6,461,438 823,330 1,403,910 494,637 518,639 ------------ ------------ ------------ ------------ ------------ Net Investment Income/(Loss)................................ 1,920,922 74,750 (937,543) (199,504) 596,718 ------------ ------------ ------------ ------------ ------------ REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES -- NOTE 4 Net realized gain/(loss) on investments -- Note 1.......... 38,300,169 2,885,995 20,812,292 3,155,277 1,277,472 Net realized gain on sale of affiliated underlying funds..................................................... -- -- -- -- 75,349 Net realized gains received from affiliated underlying funds..................................................... -- -- -- -- 46,786 Realized foreign capital gains tax......................... -- -- -- -- -- Net realized gain/(loss) on foreign currency related transactions -- Note 1.................................... -- -- -- -- -- Net change in unrealized appreciation/(depreciation) on investments -- Note 4..................................... (31,592,987) (656,646) (12,349,534) (932,806) 3,204,083 Unrealized foreign capital gains tax....................... -- -- -- -- -- Net change in unrealized appreciation of futures contracts -- Note 1....................................... -- -- -- -- (605,651) Net change in unrealized appreciation from translation of other assets and liabilities denominated in foreign currencies -- Note 1...................................... -- -- -- -- -- ------------ ------------ ------------ ------------ ------------ Net Realized and Unrealized Gain/(Loss) on Investments and Foreign Currencies......................... 6,707,182 2,229,349 8,462,758 2,222,471 3,998,039 ------------ ------------ ------------ ------------ ------------ NET INCREASE/(DECREASE) IN NET ASSETS FROM OPERATIONS........................................... $ 8,628,104 $2,304,099 $ 7,525,215 $2,022,967 $4,594,757 ============ ============ ============ ============ ============
- -------------------------------------------------------------------------------- See notes to financial statements. 54
The Guardian The Guardian The Guardian The Guardian The Guardian The Guardian The Guardian The Guardian S&P 500 Baillie Gifford Baillie Gifford Investment Low Duration High Yield Tax-Exempt Cash Index International Emerging Quality Bond Fund Bond Fund Management Fund Growth Fund Markets Fund Bond Fund ------------ Fund ------------ Fund - ------------ --------------- --------------- ------------ ------------ ------------ $1,307,253 $ 778,906 $ 1,125,820 -- -- -- -- -- 18,410 9,368 6,069 $ 4,082,821 $ 486,109 $ 2,927,134 $ 1,892,184 $2,961,032 (115) (68,169) (123,855) -- -- -- -- -- - ------------ --------------- --------------- ------------ ------------ ------------ ------------ ------------ 1,325,548 720,105 1,008,034 4,082,821 486,109 2,927,134 1,892,184 2,961,032 - ------------ --------------- --------------- ------------ ------------ ------------ ------------ ------------ 203,182 206,587 411,025 429,632 71,895 212,976 222,782 1,295,739 166,171 40,354 62,415 166,197 11,135 52,700 98,445 611,370 15,309 8,157 12,378 22,182 9,830 12,334 -- 14,033 11,555 7,101 12,533 13,967 9,537 11,644 12,946 10,918 10,146 8,946 15,430 12,470 9,440 12,062 -- 11,547 45,928 24,472 37,132 66,547 29,491 37,001 -- 42,101 34,664 21,304 37,600 41,901 28,610 34,933 38,840 32,755 16,233 14,314 24,689 19,952 15,104 19,299 -- 18,475 23,479 49,936 22,573 43,098 14,221 17,809 18,417 185,870 18,841 22,056 17,609 19,789 13,331 16,401 -- 14,075 15,647 15,942 16,066 15,269 13,358 14,834 14,775 3,655 356 37 -- 179 -- 102 -- 805 73,998 103,965 146,420 67,427 34,932 50,526 37,056 71,652 7,623 6,911 4,863 11,712 3,554 5,257 5,292 30,184 42,992 38,322 34,374 41,089 31,891 35,593 17,970 51,907 4,687 2,137 1,894 6,911 1,052 2,309 3,105 19,860 1,989 1,094 844 3,861 497 1,108 995 11,437 2,260 1,055 1,052 3,583 679 1,276 1,639 9,695 11,362 13,923 13,923 11,362 12,183 13,848 11,362 10,940 1,237 456 506 1,362 247 546 692 -- 236 1,380 450 437 227 230 232 490 - ------------ --------------- --------------- ------------ ------------ ------------ ------------ ------------ 707,895 588,449 873,776 998,927 311,214 552,788 484,548 2,447,508 (180,317) -- -- (139,942) (110,195) (159,836) (53,767) (151,376) -- -- -- -- -- -- (13,207) -- - ------------ --------------- --------------- ------------ ------------ ------------ ------------ ------------ 527,578 588,449 873,776 858,985 201,019 392,952 417,574 2,296,132 - ------------ --------------- --------------- ------------ ------------ ------------ ------------ ------------ 797,970 131,656 134,258 3,223,836 285,090 2,534,182 1,474,610 664,900 - ------------ --------------- --------------- ------------ ------------ ------------ ------------ ------------ 114,570 552,665 7,247,543 494,239 (27,413) 1,362,449 592,384 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 58,390 -- -- -- -- -- -- 13,845 (57,097) -- -- -- -- -- 4,086,552 309,448 (9,738,760) (3,817,555) (297,759) (3,076,875) (3,400,006) -- -- -- (14,696) -- -- -- -- -- (19,180) -- -- -- -- -- -- -- -- 1,181 2,241 -- -- -- -- -- - ------------ --------------- --------------- ------------ ------------ ------------ ------------ ------------ 4,181,942 877,139 (2,502,379) (3,323,316) (325,172) (1,714,426) (2,807,622) -- - ------------ --------------- --------------- ------------ ------------ ------------ ------------ ------------ $4,979,912 $1,008,795 $(2,368,121) $ (99,480) $ (40,082) $ 819,756 $(1,333,012) $ 664,900 ============ =============== =============== ============ ============ ============ ============ ============
- -------------------------------------------------------------------------------- 55 .. The Park Avenue Portfolio Statements of Changes in Net Assets
The Guardian The Guardian Park Avenue Fund UBS Large Cap Value Fund ------------------------------ ------------------------- Period from February 3, Six Months Year Ended Six Months 2003+ to Ended December 31, Ended December 31, June 30, 2004 2003 June 30, 2004 2003 (Unaudited) (Audited) (Unaudited) (Audited) -------------- -------------- ------------- ------------ INCREASE/(DECREASE) IN NET ASSETS From Operations: Net investment income/(loss)........................ $ 1,920,922 $ 7,520,558 $ 74,750 $ 251,856 Net realized gain/(loss) on investments and foreign currency related transactions.............. 38,300,169 (76,280,304) 2,885,995 4,603,444 Net change in unrealized appreciation/ (depreciation) of investments and foreign currency related transactions...................... (31,592,987) 310,795,254 (656,646) 18,569,447 -------------- -------------- ------------- ------------ Net Increase in Net Assets Resulting from Operations......................................... 8,628,104 242,035,508 2,304,099 23,424,747 -------------- -------------- ------------- ------------ Dividends and Distributions to Shareholders from: Net investment income Class A............................................ (6,443,966) (7,367,278) (79,899) (130,506) Class B............................................ -- -- -- (25,664) Class C............................................ -- -- -- (25,489) Class K............................................ (37,574) (20,780) (52,463) (69,468) Net realized gain on investments and foreign currency related transactions Class A............................................ -- -- (789,751) (412,361) Class B............................................ -- -- (760,042) (408,262) Class C............................................ -- -- (737,416) (397,214) Class K............................................ -- -- (744,507) (398,772) -------------- -------------- ------------- ------------ Total Dividends and Distributions to Shareholders (6,481,540) (7,388,058) (3,164,078) (1,867,736) -------------- -------------- ------------- ------------ From Capital Share Transactions: Net increase/(decrease) in net assets from capital share transactions -- Note 8....................... (109,003,783) (221,597,031) 4,258,045 63,270,044 Redemption fees..................................... -- -- -- -- -------------- -------------- ------------- ------------ (109,003,783) (221,597,031) 4,258,045 63,270,044 -------------- -------------- ------------- ------------ Net Increase/(Decrease) in Net Assets (106,857,219) 13,050,419 3,398,066 84,827,055 NET ASSETS: Beginning of period.................................... 1,312,508,366 1,299,457,947 84,827,055 -- -------------- -------------- ------------- ------------ End of period*......................................... $1,205,651,147 $1,312,508,366 $88,225,121 $84,827,055 ============== ============== ============= ============ * Includes undistributed/(distributions in excess) of net investment income of.............................. $ 302,517 $ 4,863,135 $ (56,883) $ 729
The Guardian Park Avenue Small Cap Fund -------------------------- Six Months Year Ended Ended December 31, June 30, 2004 2003 (Unaudited) (Audited) ------------- ------------ INCREASE/(DECREASE) IN NET ASSETS From Operations: Net investment income/(loss)........................ $ (937,543) $ (1,352,534) Net realized gain/(loss) on investments and foreign currency related transactions.............. 20,812,292 16,253,102 Net change in unrealized appreciation/ (depreciation) of investments and foreign currency related transactions...................... (12,349,534) 44,032,029 ------------- ------------ Net Increase in Net Assets Resulting from Operations......................................... 7,525,215 58,932,597 ------------- ------------ Dividends and Distributions to Shareholders from: Net investment income Class A............................................ -- -- Class B............................................ -- -- Class C............................................ -- -- Class K............................................ -- -- Net realized gain on investments and foreign currency related transactions Class A............................................ (2,048,142) -- Class B............................................ (298,188) -- Class C............................................ (110,554) -- Class K............................................ (130,032) -- ------------- ------------ Total Dividends and Distributions to Shareholders (2,586,916) -- ------------- ------------ From Capital Share Transactions: Net increase/(decrease) in net assets from capital share transactions -- Note 8....................... 2,643,073 526,138 Redemption fees..................................... -- -- ------------- ------------ 2,643,073 526,138 ------------- ------------ Net Increase/(Decrease) in Net Assets 7,581,372 59,458,735 NET ASSETS: Beginning of period.................................... 201,022,946 141,564,211 ------------- ------------ End of period*......................................... $208,604,318 $201,022,946 ============= ============ * Includes undistributed/(distributions in excess) of net investment income of.............................. $ (937,543) $ --
+ Commencementof operations. - -------------------------------------------------------------------------------- See notes to financial statements. 56
The Guardian The Guardian The Guardian The Guardian Baillie Gifford UBS Small Cap Value Fund Asset Allocation Fund S&P 500 Index Fund International Growth Fund - ------------------------- -------------------------- -------------------------- ------------------------- Period from February 3, Six Months 2003+ to Six Months Year Ended Six Months Year Ended Six Months Year Ended Ended December 31, Ended December 31, Ended December 31, Ended December 31, June 30, 2004 2003 June 30, 2004 2003 June 30, 2004 2003 June 30, 2004 2003 (Unaudited) (Audited) (Unaudited) (Audited) (Unaudited) (Audited) (Unaudited) (Audited) - ------------- ------------ ------------- ------------ ------------- ------------ ------------- ------------ $ (199,504) $ (172,665) $ 596,718 $ 1,589,028 $ 797,970 $ 1,531,499 $ 131,656 $ 112,017 3,155,277 4,660,235 1,399,607 2,070,307 114,570 (317,473) 566,510 (4,580,776) (932,806) 8,161,095 2,598,432 33,756,586 4,067,372 32,458,190 310,629 18,741,326 - ------------- ------------ ------------- ------------ ------------- ------------ ------------- ------------ 2,022,967 12,648,665 4,594,757 37,415,921 4,979,912 33,672,216 1,008,795 14,272,567 - ------------- ------------ ------------- ------------ ------------- ------------ ------------- ------------ -- -- (1,340,355) (1,836,307) (605,231) (1,405,045) (89,371) (63,805) -- -- (105,509) (225,527) (18,577) (50,103) -- -- -- -- (8,015) (29,885) (13,872) (36,942) -- -- -- -- (68,620) (81,064) (23,636) (55,604) -- -- (538,495) (651,609) -- -- -- -- -- -- (492,139) (632,339) -- -- -- -- -- -- (473,674) (613,490) -- -- -- -- -- -- (482,287) (614,867) -- -- -- -- -- -- - ------------- ------------ ------------- ------------ ------------- ------------ ------------- ------------ (1,986,595) (2,512,305) (1,522,499) (2,172,783) (661,316) (1,547,694) (89,371) (63,805) - ------------- ------------ ------------- ------------ ------------- ------------ ------------- ------------ 3,147,282 28,596,499 (8,149,312) (19,929,631) 5,084,616 5,064,300 (1,513,046) (26,483,377) -- -- -- -- -- -- 17,349 127,145 - ------------- ------------ ------------- ------------ ------------- ------------ ------------- ------------ 3,147,282 28,596,499 (8,149,312) (19,929,631) 5,084,616 5,064,300 (1,495,697) (26,356,232) - ------------- ------------ ------------- ------------ ------------- ------------ ------------- ------------ 3,183,654 38,732,859 (5,077,054) 15,313,507 9,403,212 37,188,822 (576,273) (12,147,470) 38,732,859 -- 167,566,045 152,252,538 157,686,909 120,498,087 51,186,313 63,333,783 - ------------- ------------ ------------- ------------ ------------- ------------ ------------- ------------ -------------- $41,916,513 $38,732,859 $162,488,991 $167,566,045 $167,090,121 $157,686,909 $50,610,040 $51,186,313 ============= ============ ============= ============ ============= ============ ============= ============ $ (199,504) $ -- $ 522,978 $ 1,448,759 $ 147,605 $ 10,951 $ 124,178 $ 81,893
- -------------------------------------------------------------------------------- 57 .. The Park Avenue Portfolio Statements of Changes in Net Assets (Continued)
The Guardian Baillie Gifford The Guardian Emerging Markets Fund Investment Quality Bond Fund ------------------------- -------------------------- Six Months Year Ended Six Months Year Ended Ended December 31, Ended December 31, June 30, 2004 2003 June 30, 2004 2003 (Unaudited) (Audited) (Unaudited) (Audited) ------------- ------------ ------------- ------------ INCREASE/(DECREASE) IN NET ASSETS From Operations: Net investment income................................. $ 134,258 $ 135,000 $ 3,223,836 $ 6,938,090 Net realized gain/(loss) on investments and foreign currency related transactions........................ 7,248,836 2,248,314 494,239 5,743,920 Net change in unrealized appreciation/ (depreciation) of investments and foreign currency related transactions........................ (9,751,215) 22,845,347 (3,817,555) (3,814,085) ------------- ------------ ------------- ------------ Net Increase/(Decrease) in Net Assets Resulting from Operations...................................... (2,368,121) 25,228,661 (99,480) 8,867,925 ------------- ------------ ------------- ------------ Dividends and Distributions to Shareholders from: Net investment income Class A.............................................. (116,609) -- (2,593,137) (5,833,151) Class B.............................................. -- -- (279,771) (526,000) Class C.............................................. -- -- (176,208) (292,345) Class K.............................................. (11,893) -- (174,720) (286,594) Net realized gain on investments and foreign currency related transactions Class A.............................................. -- -- (461,219) (4,189,420) Class B.............................................. -- -- (64,275) (528,307) Class C.............................................. -- -- (41,400) (318,457) Class K.............................................. -- -- (37,611) (278,194) ------------- ------------ ------------- ------------ Total Dividends and Distributions to Shareholders........................................ (128,502) -- (3,828,341) (12,252,468) ------------- ------------ ------------- ------------ From Capital Share Transactions: Net increase/(decrease) in net assets from capital share transactions -- Note 8......................... 7,719,244 1,751,043 (18,127,920) (23,611,845) Redemption fees....................................... 4,836 -- -- -- ------------- ------------ ------------- ------------ 7,724,080 1,751,043 (18,127,920) (23,611,845) ------------- ------------ ------------- ------------ Net Increase/(Decrease) in Net Assets................. 5,227,457 26,979,704 (22,055,741) (26,996,388) NET ASSETS: Beginning of period...................................... 74,292,852 47,313,148 182,935,542 209,931,930 ------------- ------------ ------------- ------------ End of period*........................................... $79,520,309 $74,292,852 $160,879,801 $182,935,542 ============= ============ ============= ============ * Includes undistributed/(distributions in excess) of net investment income of.................................... $ 987 $ (4,769) $ -- $ --
The Guardian Low Duration Bond Fund ------------------------------ Six Months Period from Ended July 30, 2003+ to June 30, 2004 December 31, 2003 (Unaudited) (Audited) ------------- ----------------- INCREASE/(DECREASE) IN NET ASSETS From Operations: Net investment income................................. $ 285,090 $ 179,570 Net realized gain/(loss) on investments and foreign currency related transactions........................ (27,413) (14,521) Net change in unrealized appreciation/ (depreciation) of investments and foreign currency related transactions........................ (297,759) 91,665 ------------- ----------------- Net Increase/(Decrease) in Net Assets Resulting from Operations...................................... (40,082) 256,714 ------------- ----------------- Dividends and Distributions to Shareholders from: Net investment income Class A.............................................. (99,759) (62,296) Class B.............................................. (58,766) (35,675) Class C.............................................. (56,960) (35,327) Class K.............................................. (69,605) (46,272) Net realized gain on investments and foreign currency related transactions Class A.............................................. -- -- Class B.............................................. -- -- Class C.............................................. -- -- Class K.............................................. -- -- ------------- ----------------- Total Dividends and Distributions to Shareholders........................................ (285,090) (179,570) ------------- ----------------- From Capital Share Transactions: Net increase/(decrease) in net assets from capital share transactions -- Note 8......................... 1,301,559 31,298,313 Redemption fees....................................... -- -- ------------- ----------------- 1,301,559 31,298,313 ------------- ----------------- Net Increase/(Decrease) in Net Assets................. 976,387 31,375,457 NET ASSETS: Beginning of period...................................... 31,375,457 -- ------------- ----------------- End of period*........................................... $32,351,844 $31,375,457 ============= ================= * Includes undistributed/(distributions in excess) of net investment income of.................................... $ -- $ --
+ Commencementof operations. - -------------------------------------------------------------------------------- See notes to financial statements. 58
The Guardian The Guardian The Guardian High Yield Bond Fund Tax-Exempt Fund Cash Management Fund - ------------------------- -------------------------- --------------------------- Six Months Year Ended Six Months Year Ended Six Months Year Ended Ended December 31, Ended December 31, Ended December 31, June 30, 2004 2003 June 30, 2004 2003 June 30, 2004 2003 (Unaudited) (Audited) (Unaudited) (Audited) (Unaudited) (Audited) - ------------- ------------ ------------- ------------ ------------- ------------- $ 2,534,182 $ 4,839,189 $ 1,474,610 $ 3,146,743 $ 664,900 $ 2,386,552 1,362,449 2,660,574 592,384 3,094,286 -- -- (3,076,875) 4,375,476 (3,400,006) (1,854,464) -- -- - ------------- ------------ ------------- ------------ ------------- ------------- 819,756 11,875,239 (1,333,012) 4,386,565 664,900 2,386,552 - ------------- ------------ ------------- ------------ ------------- ------------- (1,559,130) (3,002,350) (1,337,536) (2,868,086) (631,730) (2,318,884) (327,746) (628,715) -- -- (14,564) (33,161) (309,602) (581,123) (137,074) (278,657) (11,319) (19,118) (337,704) (627,001) -- -- (7,287) (15,389) -- -- (31,804) (2,827,113) -- -- -- -- -- -- -- -- -- -- (4,183) (372,638) -- -- -- -- -- -- -- -- - ------------- ------------ ------------- ------------ ------------- ------------- (2,534,182) (4,839,189) (1,510,597) (6,346,494) (664,900) (2,386,552) - ------------- ------------ ------------- ------------ ------------- ------------- 1,961,561 6,584,315 213,149 (31,055,047) (63,181,728) (133,887,227) 145 -- -- -- -- -- - ------------- ------------ ------------- ------------ ------------- ------------- 1,961,706 6,584,315 213,149 (31,055,047) (63,181,728) (133,887,227) - ------------- ------------ ------------- ------------ ------------- ------------- 247,280 13,620,365 (2,630,460) (33,014,976) (63,181,728) (133,887,227) 71,503,871 57,883,506 90,577,818 123,592,794 560,587,544 694,474,771 - ------------- ------------ ------------- ------------ ------------- ------------- $71,751,151 $71,503,871 $87,947,358 $ 90,577,818 $497,405,816 $ 560,587,544 ============= ============ ============= ============ ============= ============= $ -- $ -- $ -- $ -- $ -- $ --
- -------------------------------------------------------------------------------- 59 .. The Guardian Investment Quality Bond Fund Statement of Cash Flows Six Months Ended June 30, 2004 (Unaudited) - ------------------------------------------ Cash flows from operating activities: Net decrease in net assets resulting from operations................... $ (99,480) Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities: Purchases of long-term securities................................. (162,917,776) Proceeds from sales of long-term securities....................... 182,508,549 Proceeds from mortgage securities' paydown........................ 10,163,208 Gain on proceeds from mortgage securities' paydown................ 255,769 Premium amortization/discount accretion, net...................... 187,761 Purchases of short-term investments, net.......................... (9,381,244) Increase in receivables for securities sold....................... (4,904,102) Increase in receivables........................................... (268,055) Decrease in other assets.......................................... 2,078 Decrease in accrued expenses...................................... (363) Decrease in distributions payable................................. (40,926) Decrease in due to GIS............................................ (19,569) Net realized gain on investments.................................. (494,239) Net change in unrealized appreciation of investments.............. 3,817,555 ------------- Net cash provided by operating activities....................... 18,809,166 ------------- Cash flows from financing activities: Proceeds from fund shares sold..................................... 6,813,744 Payments for fund shares redeemed.................................. (28,910,589) Cash distributions paid............................................ (524,990) Proceeds from the financing of dollar roll transactions, net....... 3,788,774 ------------- Net cash used in financing activities........................... (18,833,061) ------------- Decrease in Cash....................................................... (23,895) Cash Beginning of period.................................................... 96,291 ------------- End of period.......................................................... $ 72,396 ============= Supplemental disclosure of cash flow information Non-cash financing activities not included above: Reinvestment of distributions...................................... $ 3,303,351 =============
- -------------------------------------------------------------------------------- See notes to financial statements. 60 .. The Park Avenue Portfolio Notes to Financial Statements June 30, 2004 (Unaudited) - -------------------------------------------------------------------------------- 61 [_] The Guardian Park Avenue Fund [_] The Guardian UBS Large Cap Value Fund [_] The Guardian Park Avenue Small Cap Fund [_] The Guardian UBS Small Cap Value Fund [_] The Guardian Asset Allocation Fund [_] The Guardian S&P 500 Index Fund [_] The Guardian Baillie Gifford International Growth Fund [_] The Guardian Baillie Gifford Emerging Markets Fund [_] The Guardian Investment Quality Bond Fund [_] The Guardian Low Duration Bond Fund [_] The Guardian High Yield Bond Fund [_] The Guardian Tax-Exempt Fund [_] The Guardian Cash Management Fund Note 1. Organization and Accounting Policies The Park Avenue Portfolio (the Portfolio) is a diversified open-end management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act), which is organized as a business trust under the laws of the Commonwealth of Massachusetts. The Portfolio consists of thirteen series, namely: The Guardian Park Avenue Fund (GPAF); The Guardian UBS Large Cap Value Fund (GULCVF); The Guardian Park Avenue Small Cap Fund (GPASCF); The Guardian UBS Small Cap Value Fund (GUSCVF); The Guardian Asset Allocation Fund (GAAF); The Guardian S&P 500 Index Fund (GSP500F); The Guardian Baillie Gifford International Growth Fund (formerly The Guardian Baillie Gifford International Fund) (GBGIF); The Guardian Baillie Gifford Emerging Markets Fund (GBGEMF); The Guardian Investment Quality Bond Fund (GIQBF); The Guardian Low Duration Bond Fund (GLDBF); The Guardian High Yield Bond Fund (GHYBF); The Guardian Tax-Exempt Fund (GTEF); and The Guardian Cash Management Fund (GCMF). The series are collectively referred to herein as the "Funds". On February 3, 2003, GULCVF and GUSCVF commenced operations. GULCVF sold 937,500 shares for each of Class A, Class B, Class C and Class K shares to The Guardian Life Insurance Company of America (Guardian Life) for $9,375,000 each. GUSCVF sold 437,500 shares for each of Class A, Class B, Class C and Class K shares to Guardian Life for $4,375,000 each. On July 30, 2003, GLDBF commenced operations. GLDBF sold 750,000 shares for each of Class A, Class B, Class C and Class K shares to Guardian Life for $7,500,000 each. The Funds offer up to five classes of shares: Class A, Class B, Class C, Class K and the Institutional Class. Each of the Funds offers Class A shares. Class A shares are sold with an initial sales load of up to 4.50% (up to 3.00% for GLDBF and 0.00% for GCMF) and an administrative fee of up to .25% on an annual basis of the Funds' average daily net assets. A redemption fee of 2% is imposed on purchases of Class A shares of GBGIF, GBGEMF and GHYBF if redeemed within 60 days of purchase, except for shares held in omnibus accounts. Class B shares are offered by all of the Funds, except for GTEF. Class B shares are sold without an initial sales load but are subject to a 12b-1 fee of .75% and an administrative fee of .25% on an annual basis of each Fund's Class B average daily net assets, and a contingent deferred sales load (CDSL) of up to 3% imposed on certain redemptions. Each of the Funds offers Class C shares. Class C shares are sold without an initial sales load but are subject to a 12b-1 fee of .75% and an administrative fee of .25% on an annual basis of each Fund's Class C average daily net assets, and a CDSL of up to 1% imposed on certain redemptions. Class K shares are offered by all of the Funds, except for GTEF. Class K shares are sold without an initial sales load but are subject to a 12b-1 fee of .40% and an administrative fee of .25% on an annual basis of each Fund's Class K average daily net assets, and a CDSL of up to 1% imposed on certain redemptions. Institutional Class shares are offered by GPAF, GPASCF, GAAF, GSP500F, GBGIF, GBGEMF, GIQBF and GHYBF. As of June 30, 2004, none of the Funds had issued Institutional Class shares. Institutional Class shares are offered at net asset value, without an initial or a CDSL. All classes of shares for each Fund represent interests in the same portfolio of investments, have the same rights and are generally identical in all respects except that each class bears its separate distribution and certain class expenses, and has exclusive voting rights with respect to any matter to which a separate vote of any class is required. The preparation of financial statements in conformity with accounting principles generally accepted in the United States (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and .. The Park Avenue Portfolio Notes to Financial Statements (Continued) June 30, 2004 (Unaudited) liabilities at the date of the financial statements and the reported amounts of income, gains (losses) and expenses during the reporting period. Actual results could differ from those estimates. Significant accounting policies of the Funds are as follows: Investments Securities listed on domestic or foreign securities exchanges are valued at the last sale price on such exchanges, or if no sale occurred, at the mean of the bid and asked prices. Securities that are traded on the NASDAQ National Securities Market are valued at the NASDAQ Official Closing Price. In GAAF, investments in the underlying Funds are valued at the closing net asset value of each underlying Fund on the day of valuation. Pursuant to valuation procedures approved by the Board of Trustees, certain debt securities may be valued each business day by an independent pricing service (Service). Debt securities for which quoted bid prices are readily available and representative of the bid side of the market, in the judgment of the Service, are valued at the bid price, except for GTEF. In GTEF, debt securities are valued at the mean between the bid and asked prices obtained by the Service. Other debt securities that are valued by the Service are carried at fair value as determined by the Service, based on methods which include consideration of: yields or prices of securities of comparable quality, coupon, maturity and type; indications as to values from dealers; and general market conditions. Futures contracts are valued at the settlement prices established by the boards of trade or exchanges on which they are traded. Other securities, including securities for which market quotations are not readily available (such as certain mortgage backed securities, restricted securities and foreign securities subject to a "significant event") are valued at fair value as determined in good faith by or under the direction of the Funds' Board of Trustees. A "significant event" is an event that will affect the value of a portfolio security that occurs after the close of trading in the security's primary trading market or exchange but before the Funds' NAV is calculated. Investing outside of the U.S. may involve certain considerations and risks not typically associated with domestic investments, including the possibility of political and economic unrest and different levels of governmental supervision and regulation of foreign securities markets. Repurchase agreements are carried at cost which approximates market value (see Note 5). Short-term securities held by the Funds are valued on an amortized cost basis which approximates market value but does not take into account unrealized gains and losses. GCMF values its investments based on amortized cost in accordance with Rule 2a-7 under the 1940 Act. Investment transactions are recorded on the date of purchase or sale. Security gains or losses are determined on an identified cost basis. Interest income, including amortization/accretion of premium/discount, is accrued daily. Dividend income is recorded on the ex-dividend date. All income, expenses (other than class-specific expenses) and realized and unrealized gains or losses are allocated daily to each class of shares based upon the relative value of shares of each class. Class-specific expenses, which include any items that are specifically attributed to a particular class, are charged directly to such class. For the six months ended June 30, 2004, distribution, administrative and transfer agent fees were the only class-specific expenses. Foreign Currency Translation GPAF, GULCVF, GPASCF, GUSCVF, GAAF, GBGIF, GBGEMF and GHYBF are permitted to buy international securities that are not U.S. dollar denominated. Their books and records are maintained in U.S. dollars as follows: (1) The foreign currency market value of investment securities and other assets and liabilities stated in foreign currencies are translated into U.S. dollars at the current rate of exchange. (2) Security purchases and sales, income and expenses are translated at the rate of exchange prevailing on the respective dates of such transactions. The resulting gains and losses are included in the Statement of Operations as follows: Gains and losses attributable to foreign currency exchange rates on sales of securities are recorded for financial statement purposes as net realized gains and losses on investments. Realized foreign exchange gains and losses, which result from changes in foreign exchange rates between the date on which a Fund earns dividends and interest or pays foreign withholding taxes or other expenses and the date on which U.S. dollar equivalent amounts are actually received or paid, are included in net realized gains or losses - -------------------------------------------------------------------------------- 62 .. The Park Avenue Portfolio Notes to Financial Statements (Continued) June 30, 2004 (Unaudited) on foreign currency related transactions. Realized foreign exchange gains and losses which result from changes in foreign exchange rates between the trade and settlement dates on security and currency transactions are also included in net realized gains or losses on foreign currency related transactions. Net currency gains and losses from valuing other assets and liabilities denominated in foreign currency at the period end exchange rate are reflected in net change in unrealized appreciation or depreciation from translation of other assets and liabilities denominated in foreign currencies. Forward Foreign Currency Contracts GPAF, GULCVF, GPASCF, GUSCVF, GAAF, GBGIF, GBGEMF and GHYBF may enter into forward foreign currency contracts in connection with planned purchases or sales of securities, or to hedge against changes in currency exchange rates affecting the values of its investments that are denominated in a particular currency. A forward foreign currency contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated forward exchange rate. Risks may arise from the potential inability of a counterparty to meet the terms of a contract and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar. Fluctuations in the value of forward foreign currency contracts are recorded for book purposes as unrealized gains or losses from translation of other assets and liabilities denominated in foreign currencies by the Funds. When forward contracts are closed, the Funds will record realized gains or losses equal to the difference between the values of such forward contracts at the time each was opened and the values at the time each was closed. Such amounts are recorded in net realized gains or losses on foreign currency related transactions. The Funds will not enter into a forward foreign currency contract if such contract would obligate the applicable Funds to deliver an amount of foreign currency in excess of the value of the Funds' portfolio securities or other assets denominated in that currency. Futures Contracts GULCVF, GUSCVF, GAAF, GSP500F, GBGIF, GBGEMF, GIQBF, GLDBF, GHYBF and GTEF may enter into financial futures contracts for the delayed delivery of securities, currency or contracts based on financial indices at a fixed price on a future date. In entering into such contracts, the Funds are required to deposit either in cash or securities an amount equal to a certain percentage of the contract amount. Subsequent payments are made or received by the Funds each day, depending on the daily fluctuations in the value of the underlying security, and are recorded for financial statement purposes as variation margins by the Funds. The daily changes in the variation margin are recognized as unrealized gains or losses by the Funds. The Funds' investments in financial futures contracts are designed to hedge against anticipated future changes in interest or exchange rates or securities prices. In addition, GAAF may enter into financial futures contracts for non-hedging purposes. Should interest or exchange rates or securities prices or prices of futures contracts move unexpectedly, the Funds may not achieve the anticipated benefits of the financial futures contracts and may realize a loss. Dividend Distributions Dividends from net investment income are declared and accrued daily and are paid monthly for GIQBF, GLDBF, GHYBF and GTEF, and declared and paid semi-annually for GPAF, GULCVF, GPASCF, GUSCVF, GAAF, GSP500F, GBGIF and GBGEMF. Net realized short-term and long-term capital gains for these Funds will be distributed at least annually. Dividends from GCMF's net investment income, which includes any net realized capital gains or losses, are declared and accrued daily and paid monthly on the last business day of each month. All dividends and distributions are recorded on the ex-dividend date. Such distributions are determined in conformity with federal income tax regulations. Differences between the recognition of income on an income tax basis and recognition of income based on GAAP may cause temporary overdistributions of net realized gains and net investment income. Taxes Each Fund has qualified and intends to remain qualified to be taxed as a "regulated investment company" under the provisions of the U.S. Internal Revenue Code (Code), and as such will not be subject to federal income tax on taxable income (including any realized capital gains) which is distributed in accordance with the provisions of the Code. Therefore, no federal income tax provision is required. Withholding taxes on foreign interest, dividends and capital gains in GBGIF and GBGEMF have been provided for in accordance with the applicable country's tax rules and rates. Expense Reductions GTEF has entered into an arrangement with its custodian whereby credits realized as a result of uninvested cash - -------------------------------------------------------------------------------- 63 .. The Park Avenue Portfolio Notes to Financial Statements (Continued) June 30, 2004 (Unaudited) balances were used to reduce a portion of the Fund's expenses. During the period, GTEF's custodian fees were reduced by $13,207 under this arrangement. GTEF could have employed the uninvested assets to produce income if GTEF has not entered into such arrangement. Reclassification of Capital Accounts The treatment for financial statement purposes of distributions made during the year from net investment income and net realized gains may differ from their ultimate treatment for federal income tax purposes. These differences primarily are caused by differences in the timing of the recognition of certain components of income or capital gains, and the recharacterization of foreign exchange gains or losses to either ordinary income or realized capital gains for federal income tax purposes. Where such differences are permanent in nature, they are reclassified in the components of net assets based on their ultimate characterization for federal income tax purposes. Any such reclassifications will have no effect on net assets, results of operations, or net asset value per share of the Funds. Note 2. Investment Advisory Agreements and Payments to or from Related Parties The Funds (except GBGIF and GBGEMF) have an investment advisory agreement with Guardian Investor Services LLC (GIS), an indirect wholly-owned subsidiary of Guardian Life. Fees for investment advisory are at an annual rate of .50% of the average daily net assets of each Fund, except for GPASCF, GSP500F, GHYBF and GLDBF, which pay GIS an annual rate of .75%, .25%, .60% and .45%, respectively, of their average daily net assets. GAAF is subject to a contractual annual advisory fee of .65% of its average daily net assets. However, GIS has agreed to a waiver of .15% of GAAF's annual advisory fee when GAAF is operated as a "fund of funds" so that GAAF's effective advisory fee is .50% of its average daily net assets. There are no duplicative advisory and administrative service fees charged to GAAF on assets invested in other Guardian Funds. Under an SEC exemptive order, advisory and administrative fees are paid at the underlying Fund level. GULCVF pays investment advisory fees to GIS at an annual rate of .83% of its average daily net assets. GUSCVF pays investment advisory fees to GIS at an annual rate of 1.00% of its average daily net assets for the first $50 million and an annual rate of .95% of its average daily net assets in excess of $50 million. GIS has entered into a sub-investment advisory agreement with UBS Global Asset Management (Americas), Inc. (UBS Global AM). UBS Global AM is responsible for the day-to-day management of GULCVF and GUSCVF. GIS continually monitors and evaluates the performance of UBS Global AM. As compensation for its services, GIS pays UBS Global AM at an annual rate of .43% of GULCVF's average daily net assets and at an annual rate of .60% for the first $50 million and at an annual rate of .55% in excess of $50 million of GUSCVF's average daily net assets. Payment of sub-investment advisory fees does not represent a separate or additional expense to GULCVF or GUSCVF. For the six months ended June 30, 2004, GIS voluntarily assumed a portion of the ordinary operating expenses (excluding interest expense associated with reverse repurchase agreements and securities lending) that exceeded a percentage of the average daily net assets of the respective Funds, by class, as follows:
Fund Class A Class B Class C Class K - ---- ------- ------- ------- ------- GSP500F .53% 1.28% 1.28% 0.93% GIQBF .85% 1.60% 1.60% 1.25% GLDBF .80% 1.55% 1.55% 1.20% GHYBF .85% 1.60% 1.60% 1.25% GTEF .85% N/A 1.60% N/A GCMF .85% 1.60% 1.60% 1.25%
For the six months ended June 30, 2004, GIS voluntarily assumed a portion of certain Funds' expenses based on their respective average daily net assets as follows:
- -------------------------------------------------- GSP500F* - -------------------------------------------------- Class A Class B Class C Class K ------- ------- ------- ------- Ordinary Operating Expenses .19% .19% .19% .16% 12b-1 Fees -- .27% .30% -- ---- ---- ---- ---- .19% .46% .49% .16% ==== ==== ==== ==== - -------------------------------------------------- GIQBF* - -------------------------------------------------- Class A Class B Class C Class K ------- ------- ------- ------- Ordinary Operating Expenses .14% .14% .14% .07% 12b-1 Fees -- .15% .20% -- ---- ---- ---- ---- .14% .29% .34% .07% ==== ==== ==== ====
- -------------------------------------------------------------------------------- 64 .. The Park Avenue Portfolio Notes to Financial Statements (Continued) June 30, 2004 (Unaudited)
- -------------------------------------------------- GLDBF* - -------------------------------------------------- Class A Class B Class C Class K ------- ------- ------- ------- Ordinary Operating Expenses .75% .75% .75% .43% 12b-1 Fees -- .02% .03% -- ---- ---- ---- ---- .75% .77% .78% .43% ==== ==== ==== ==== - -------------------------------------------------- GHYBF* - -------------------------------------------------- Class A Class B Class C Class K ------- ------- ------- ------- Ordinary Operating Expenses .40% .40% .40% .31% 12b-1 Fees -- .24% .23% -- ---- ---- ---- ---- .40% .64% .63% .31% ==== ==== ==== ==== - -------------------------------------------------- GTEF* - -------------------------------------------------- Class A Class C ------- ------- Ordinary Operating Expenses .12% .12% 12b-1 Fees -- .24% ---- ---- .12% .36% ==== ==== - -------------------------------------------------- GCMF* - -------------------------------------------------- Class A Class B Class C ------- ------- ------- Administrative Fees .06% .23% .06% ==== ==== ====
* Annualized. For the six months ended June 30, 2004, GIS voluntarily assumed $180,317, $139,942, $110,195, $159,836, $53,767 and $240,089 of the ordinary operating expenses of GSP500F, GIQBF, GLDBF, GHYBF, GTEF and GCMF, respectively. The Portfolio, on behalf of GBGIF and GBGEMF, has an investment management agreement with Guardian Baillie Gifford Limited (GBG), a Scottish corporation owned by The Guardian Insurance & Annuity Company, Inc. (GIAC), a wholly-owned subsidiary of Guardian Life and Baillie Gifford Overseas Limited (BG Overseas). GBG is responsible for the overall investment management of GBGIF and GBGEMF's portfolios, subject to the supervision of the Portfolio's Board of Trustees. GBG has entered into a sub-investment management agreement with BG Overseas pursuant to which BG Overseas is responsible for the day-to-day management of GBGIF and GBGEMF. GBG continually monitors and evaluates the performance of BG Overseas. As compensation for its services, GBGIF and GBGEMF pay GBG annual investment management fees of .80% and 1.00%, respectively, of their average daily net assets. One half of these fees is payable by GBG to BG Overseas for its services. Payment of the sub-investment management fee does not represent a separate or additional expense to GBGIF or GBGEMF. The Guardian Fund Complex pays trustees who are not "interested persons" (as defined in the 1940 Act) fees consisting of a $5,000 per meeting fee and an annual retainer of $30,500, allocated among all funds in the Guardian Fund Complex based on relative average daily net assets. Board committee members also receive a fee of $2,000 per committee meeting, which also is allocated among all funds in the Guardian Fund Complex based on relative average daily net assets. Additional compensation is paid to the Chairmen of the Nominating and Governance Committee and the Audit Committee, respectively. GIS pays compensation to certain trustees who are interested persons. Certain officers and trustees of the Funds are affiliated with GIS. GAAF received $942,007 in dividends from other Guardian mutual funds. Park Avenue Securities LLC (PAS), a wholly-owned subsidiary of GIAC and an affiliate of GIS distributes the Portfolio's shares as a retail broker-dealer. For the six months ended June 30, 2004, PAS received $314,980 for brokerage commissions from the Portfolio. Administrative Services Agreement Pursuant to the Administrative Services Agreement adopted by the Funds on behalf of the Class A, Class B, Class C and Class K shares, each of the Funds, except GPAF, pays GIS an administrative service fee at an annual rate of .25% of the Funds' average daily net assets. GPAF pays this fee to GIS at an annual rate of up to .25% of the average daily net assets for which a "dealer of record" has been designated. For the six months ended June 30, 2004, GPAF Class A shares paid an annualized rate of .22% of its average daily net assets pursuant to the Administrative Services Agreement. Note 3. Underwriting Agreement and Distribution Plan The Portfolio has entered into an Underwriting Agreement with GIS pursuant to which GIS serves as the principal underwriter for shares of the Funds. - -------------------------------------------------------------------------------- 65 .. The Park Avenue Portfolio Notes to Financial Statements (Continued) June 30, 2004 (Unaudited) For the six months ended June 30, 2004, aggregate front-end sales charges for the sale of Class A shares paid to GIS were as follows:
Fund Commissions Fund Commissions - ---- ----------- ------ ----------- GPAF $17,697 GBGEMF $ 593 GULCVF 55 GIQBF 2,125 GPASCF 2,428 GLDBF 766 GAAF 2,113 GHYBF 429 GSP500F 3,778 GTEF 1,425 GBGIF 308
Under Distribution Plans adopted by the Portfolio pursuant to Rule 12b-1 under the 1940 Act (the "12b-1 Plans"), each Fund is authorized to pay a monthly 12b-1 fee for certain classes of shares at an annual rate of .75% of average daily net assets of the Fund's Class B and Class C shares and .40% of average daily net assets of the Fund's Class K shares as compensation for distribution-related services provided to the Class B, Class C and Class K shares of those Funds. GIS is entitled to retain any CDSL imposed on certain Class B, Class C and Class K share redemptions. For the six months ended June 30, 2004, GIS received CDSL charges on Class B, Class C and Class K as follows:
Fund Class B Class C Class K - ---- -------- ------- ------- GPAF $101,267 $ 30 $ 18 GULCVF 850 -- 23 GPASCF 7,333 280 39 GUSCVF 1,065 -- -- GAAF 17,257 21 29 GSP500F 5,256 752 23 GBGIF 4,982 -- -- GBGEMF 2,549 -- 9 GIQBF 10,980 645 29 GLDBF 392 -- -- GHYBF 1,514 385 2 GTEF -- 1,103 -- GCMF 12,888 -- 284
Note 4. Investment Transactions Purchases and proceeds from sales of securities (excluding short-term securities) for the six months ended June 30, 2004 were as follows:
- ---------------------------------- GPAF GULCVF - ---------------------------------- Purchases $460,001,595 $13,946,955 Proceeds 567,723,721 12,361,820 - ---------------------------------- GPASCF GUSCVF - ---------------------------------- Purchases $103,205,532 $13,329,277 Proceeds 103,688,839 12,335,156 - ---------------------------------- GAAF GSP500F - ---------------------------------- Purchases $ -- $ 2,406,321 Proceeds 9,201,657 242,296 - ---------------------------------- GBGIF GBGEMF - ---------------------------------- Purchases $ 5,759,169 $38,626,230 Proceeds 7,789,815 30,099,439 - ---------------------------------- GIQBF GLDBF - ---------------------------------- Purchases $162,850,040 $ 9,412,012 Proceeds 182,508,549 7,738,060 - ---------------------------------- GHYBF GTEF - ---------------------------------- Purchases $ 33,415,660 $90,086,860 Proceeds 34,931,828 82,291,802 - ----------------------------------
The cost of investments owned at June 30, 2004 for federal income tax purposes was substantially the same as the cost for financial reporting purposes for the Funds. The gross unrealized appreciation and depreciation of investments excluding foreign currency and futures at June 30, 2004 were as follows:
GPAF GULCVF ---- ------ Appreciation $145,040,779 $18,719,418 (Depreciation) (13,625,255) (806,617) ------------ ----------- Net Unrealized Appreciation $131,415,524 $17,912,801 ============ =========== GPASCF GUSCVF ------ ------ Appreciation $ 37,415,938 $ 8,282,188 (Depreciation) (6,192,271) (1,053,899) ------------ ----------- Net Unrealized Appreciation $ 31,223,667 $ 7,228,289 ============ ===========
- -------------------------------------------------------------------------------- 66 .. The Park Avenue Portfolio Notes to Financial Statements (Continued) June 30, 2004 (Unaudited)
GAAF GSP500F ---- ------- Appreciation $ 2,953,045 $ 27,156,226 (Depreciation) (16,247,801) (26,829,330) ------------ ------------ Net Unrealized Appreciation/(Depreciation) $(13,294,756) $ 326,896 ============ ============ GBGIF GBGEMF ----- ------ Appreciation $ 11,796,802 $ 14,503,793 (Depreciation) (540,972) (4,483,945) ------------ ------------ Net Unrealized Appreciation $ 11,255,830 $ 10,019,848 ============ ============ GIQBF GLDBF ----- ----- Appreciation $ 1,651,722 $ 24,557 (Depreciation) (1,754,512) (230,651) ------------ ------------ Net Unrealized Depreciation $ (102,790) $ (206,094) ============ ============ GHYBF GTEF ----- ---- Appreciation $ 2,584,043 $ 1,819,579 (Depreciation) (949,541) (445,169) ------------ ------------ Net Unrealized Appreciation $ 1,634,502 $ 1,374,410 ============ ============
Note 5. Repurchase Agreements The collateral for repurchase agreements is either cash or fully negotiable U.S. government securities. Repurchase agreements are fully collateralized (including the interest earned thereon) and such collateral is marked-to-market daily while the agreements remain in force. If the value of the collateral falls below the value of the repurchase price plus accrued interest, the applicable Fund will require the seller to deposit additional collateral by the next business day. If the request for additional collateral is not met, or the seller defaults, the applicable Fund maintains the right to sell the collateral and may claim any resulting loss against the seller. Note 6. Reverse Repurchase Agreements GAAF, GIQBF, GLDBF and GHYBF may enter into reverse repurchase agreements with banks or third party broker-dealers to borrow short-term funds. Interest on the value of reverse repurchase agreements issued and outstanding is based upon competitive market rates at the time of issuance. At the time GAAF, GIQBF, GLDBF and GHYBF enter into a reverse repurchase agreement, the Funds establish and segregate cash, U.S. government securities or liquid, unencumbered securities that are marked-to-market daily. The value of such segregated assets must be at least equal to the value of the repurchase obligation (principal plus accrued interest), as applicable. Reverse repurchase agreements involve the risk that the buyer of the securities sold by GAAF, GIQBF, GLDBF and GHYBF may be unable to deliver the securities when the Funds seek to repurchase them. Note 7. Dollar Roll Transactions GAAF, GIQBF, GLDBF and GHYBF may enter into dollar roll transactions with financial institutions to take advantage of opportunities in the mortgage market. A dollar roll transaction involves a sale by the Fund of securities that it holds with an agreement by the Fund to repurchase similar securities at an agreed upon price and date. The securities repurchased will bear the same interest as those sold, but generally will be collateralized at the time of delivery by different pools of mortgages with different prepayment histories than those securities sold. During the period between the sale and repurchase, the Fund will not be entitled to receive interest and principal payments on the securities sold. Dollar roll transactions involve the risk that the buyer of the securities sold by GAAF, GIQBF, GLDBF and GHYBF may be unable to deliver the securities when the Funds seek to repurchase them. Note 8. Shares of Beneficial Interest There is an unlimited number of $0.01 par value shares of beneficial interest authorized, divided into five classes, designated as Class A, Class B, Class C, Class K and Institutional Class shares. As of June 30, 2004: (i) GPAF, GPASCF, GAAF, GSP500F, GBGIF, GBGEMF, GIQBF and GHYBF offered all five classes; (ii) GTEF offered Class A and Class C shares; and (iii) GULCVF, GUSCVF, GLDBF and GCMF offered Class A, Class B, Class C and Class K shares. Through June 30, 2004, no Institutional Class shares of the Funds were sold. - -------------------------------------------------------------------------------- 67 .. The Park Avenue Portfolio Notes to Financial Statements (Continued) June 30, 2004 (Unaudited) Transactions in shares of beneficial interest were as follows: [_] The Guardian Park Avenue Fund Six Months Six Months Ended Year Ended Ended Year Ended June 30, 2004 December 31, 2003 June 30, 2004 December 31, 2003 (Unaudited) (Audited) (Unaudited) (Audited) - ----------------------------------------------------------------------------------------------------- Shares Amount - ----------------------------------------------------------------------------------------------------- Class A Shares sold 663,908 2,688,100 $ 20,231,098 $ 71,466,076 Shares issued in reinvestment of dividends 208,908 259,185 6,246,373 7,135,022 Shares repurchased (3,928,838) (10,027,084) (118,840,983) (268,695,546) - ---------------------------------------------------------------------------------------------------- Net decrease (3,056,022) (7,079,799) $ (92,363,512) $(190,094,448) - ---------------------------------------------------------------------------------------------------- Class B Shares sold 85,616 236,579 $ 2,488,142 $ 6,081,629 Shares repurchased (678,321) (1,463,661) (19,527,858) (37,424,241) - ---------------------------------------------------------------------------------------------------- Net decrease (592,705) (1,227,082) $ (17,039,716) $ (31,342,612) - ---------------------------------------------------------------------------------------------------- Class C Shares sold 6,908 15,063 $ 198,793 $ 370,651 Shares repurchased (9,529) (29,394) (271,109) (741,440) - ---------------------------------------------------------------------------------------------------- Net decrease (2,621) (14,331) $ (72,316) $ (370,789) - ---------------------------------------------------------------------------------------------------- Class K Shares sold 15,088 7,291 $ 457,904 $ 198,820 Shares issued in reinvestment of dividends 1,260 756 37,573 20,780 Shares repurchased (784) (310) (23,716) (8,782) - ---------------------------------------------------------------------------------------------------- Net increase 15,564 7,737 $ 471,761 $ 210,818 - ---------------------------------------------------------------------------------------------------- [_] The Guardian UBS Large Cap Value Fund Six Months Period from Six Months Period from Ended February 3, 2003+ to Ended February 3, 2003+ to June 30, 2004 December 31, 2003 June 30, 2004 December 31, 2003 (Unaudited) (Audited) (Unaudited) (Audited) - ----------------------------------------------------------------------------------------------------- Shares Amount - ----------------------------------------------------------------------------------------------------- Class A Shares sold 62,663 1,959,608 $ 809,942 $ 19,415,494 Shares issued in reinvestment of dividends and distributions 68,715 42,951 867,186 542,073 Shares repurchased (5,935) (310,031) (76,998) (3,709,638) - ---------------------------------------------------------------------------------------------------- Net increase 125,443 1,692,528 $ 1,600,130 $ 16,247,929 - ---------------------------------------------------------------------------------------------------- Class B Shares sold 42,189 1,946,976 $ 547,598 $ 19,255,790 Shares issued in reinvestment of distributions 60,200 34,101 758,518 432,709 Shares repurchased (33,338) (310,912) (429,150) (3,705,050) - ---------------------------------------------------------------------------------------------------- Net increase 69,051 1,670,165 $ 876,966 $ 15,983,449 - ---------------------------------------------------------------------------------------------------- Class C Shares sold 3,866 1,902,265 $ 50,000 $ 18,753,050 Shares issued in reinvestment of distributions 58,525 33,316 737,415 422,703 Shares repurchased -- (310,518) -- (3,700,000) - ---------------------------------------------------------------------------------------------------- Net increase 62,391 1,625,063 $ 787,415 $ 15,475,753 - ---------------------------------------------------------------------------------------------------- Class K Shares sold 17,816 1,905,775 $ 229,576 $ 18,794,718 Shares issued in reinvestment of dividends and distributions 63,151 36,999 796,969 468,239 Shares repurchased (2,543) (309,743) (33,011) (3,700,044) - ---------------------------------------------------------------------------------------------------- Net increase 78,424 1,633,031 $ 993,534 $ 15,562,913 - ----------------------------------------------------------------------------------------------------
+ Commencement of operations. - -------------------------------------------------------------------------------- 68 .. The Park Avenue Portfolio Notes to Financial Statements (Continued) June 30, 2004 (Unaudited) [_] The Guardian Park Avenue Small Cap Fund Six Months Six Months Ended Year Ended Ended Year Ended June 30, 2004 December 31, 2003 June 30, 2004 December 31, 2003 (Unaudited) (Audited) (Unaudited) (Audited) - -------------------------------------------------------------------------------------------------------------------- Shares Amount - -------------------------------------------------------------------------------------------------------------------- Class A Shares sold 818,066 1,813,369 $ 16,009,351 $ 28,850,596 Shares issued in reinvestment of distributions 106,953 -- 2,012,855 -- Shares repurchased (782,447) (1,819,099) (15,183,839) (27,392,677) - -------------------------------------------------------------------------------------------------------------------- Net increase/(decrease) 142,572 (5,730) $ 2,838,367 $ 1,457,919 - -------------------------------------------------------------------------------------------------------------------- Class B Shares sold 90,500 125,391 $ 1,663,209 $ 1,962,819 Shares issued in reinvestment of distributions 15,791 -- 278,387 -- Shares repurchased (146,715) (203,610) (2,665,819) (2,928,195) - -------------------------------------------------------------------------------------------------------------------- Net decrease (40,424) (78,219) $ (724,223) $ (965,376) - -------------------------------------------------------------------------------------------------------------------- Class C Shares sold 9,216 9,592 $ 169,070 $ 145,248 Shares issued in reinvestment of distributions 6,278 -- 109,991 -- Shares repurchased (5,786) (18,489) (106,569) (322,464) - -------------------------------------------------------------------------------------------------------------------- Net increase/(decrease) 9,708 (8,897) $ 172,492 $ (177,216) - -------------------------------------------------------------------------------------------------------------------- Class K Shares sold 12,990 13,855 $ 248,821 $ 218,871 Shares issued in reinvestment of distributions 7,014 -- 130,031 -- Shares repurchased (1,173) (452) (22,415) (8,060) - -------------------------------------------------------------------------------------------------------------------- Net increase 18,831 13,403 $ 356,437 $ 210,811 - -------------------------------------------------------------------------------------------------------------------- [_] The Guardian UBS Small Cap Value Fund Six Months Period from Six Months Period from Ended February 3, 2003+ to Ended February 3, 2003+ to June 30, 2004 December 31, 2003 June 30, 2004 December 31, 2003 (Unaudited) (Audited) (Unaudited) (Audited) - -------------------------------------------------------------------------------------------------------------------- Shares Amount - -------------------------------------------------------------------------------------------------------------------- Class A Shares sold 66,732 932,267 $ 882,736 $ 9,277,024 Shares issued in reinvestment of distributions 41,777 50,375 521,855 648,829 Shares repurchased (5,883) (189,695) (77,473) (2,437,582) - -------------------------------------------------------------------------------------------------------------------- Net increase 102,626 792,947 $ 1,327,118 $ 7,488,271 - -------------------------------------------------------------------------------------------------------------------- Class B Shares sold 16,006 921,249 $ 208,969 $ 9,123,598 Shares issued in reinvestment of distributions 39,614 49,148 489,236 628,105 Shares repurchased (7,443) (198,479) (96,158) (2,529,505) - -------------------------------------------------------------------------------------------------------------------- Net increase 48,177 771,918 $ 602,047 $ 7,222,198 - -------------------------------------------------------------------------------------------------------------------- Class C Shares sold 2,146 891,366 $ 27,779 $ 8,777,985 Shares issued in reinvestment of distributions 38,360 48,004 473,742 613,488 Shares repurchased -- (192,392) -- (2,454,478) - -------------------------------------------------------------------------------------------------------------------- Net increase 40,506 746,978 $ 501,521 $ 6,936,995 - -------------------------------------------------------------------------------------------------------------------- Class K Shares sold 19,120 890,722 $ 247,135 $ 8,771,733 Shares issued in reinvestment of distributions 38,707 47,849 482,286 614,865 Shares repurchased (982) (190,137) (12,825) (2,437,563) - -------------------------------------------------------------------------------------------------------------------- Net increase 56,845 748,434 $ 716,596 $ 6,949,035 - --------------------------------------------------------------------------------------------------------------------
+ Commencement of operations. - -------------------------------------------------------------------------------- 69 .. The Park Avenue Portfolio Notes to Financial Statements (Continued) June 30, 2004 (Unaudited) [_] The Guardian Asset Allocation Fund Six Months Six Months Ended Year Ended Ended Year Ended June 30, 2004 December 31, 2003 June 30, 2004 December 31, 2003 (Unaudited) (Audited) (Unaudited) (Audited) - ---------------------------------------------------------------------------------------------------------- Shares Amount - ---------------------------------------------------------------------------------------------------------- Class A Shares sold 413,736 1,015,158 $ 4,476,027 $ 9,497,451 Shares issued in reinvestment of dividends 119,550 186,765 1,288,749 1,766,807 Shares repurchased (1,128,777) (3,099,656) (12,170,525) (28,129,262) - ---------------------------------------------------------------------------------------------------------- Net decrease (595,491) (1,897,733) $ (6,405,749) $(16,865,004) - ---------------------------------------------------------------------------------------------------------- Class B Shares sold 67,267 249,644 $ 721,936 $ 2,356,152 Shares issued in reinvestment of dividends 9,323 22,830 100,315 215,963 Shares repurchased (265,207) (619,271) (2,845,205) (5,507,970) - ---------------------------------------------------------------------------------------------------------- Net decrease (188,617) (346,797) $ (2,022,954) $ (2,935,855) - ---------------------------------------------------------------------------------------------------------- Class C Shares sold 10,585 10,197 $ 112,916 $ 95,189 Shares issued in reinvestment of dividends 740 3,114 7,985 29,460 Shares repurchased (8,997) (40,895) (96,254) (367,270) - ---------------------------------------------------------------------------------------------------------- Net increase/(decrease) 2,328 (27,584) $ 24,647 $ (242,621) - ---------------------------------------------------------------------------------------------------------- Class K Shares sold 18,827 20,906 $ 202,392 $ 191,338 Shares issued in reinvestment of dividends 6,371 8,578 68,619 81,064 Shares repurchased (1,515) (15,129) (16,267) (158,553) - ---------------------------------------------------------------------------------------------------------- Net increase 23,683 14,355 $ 254,744 $ 113,849 - ---------------------------------------------------------------------------------------------------------- [_] The Guardian S&P 500 Index Fund Six Months Six Months Ended Year Ended Ended Year Ended June 30, 2004 December 31, 2003 June 30, 2004 December 31, 2003 (Unaudited) (Audited) (Unaudited) (Audited) - ---------------------------------------------------------------------------------------------------------- Shares Amount - ---------------------------------------------------------------------------------------------------------- Class A Shares sold 909,491 1,236,886 $ 7,043,460 $ 8,356,406 Shares issued in reinvestment of dividends 8,431 16,294 65,791 119,186 Shares repurchased (502,536) (898,109) (3,892,676) (5,898,251) - ---------------------------------------------------------------------------------------------------------- Net increase 415,386 355,071 $ 3,216,575 $ 2,577,341 - ---------------------------------------------------------------------------------------------------------- Class B Shares sold 146,546 335,881 $ 1,134,916 $ 2,276,274 Shares issued in reinvestment of dividends 2,296 6,681 17,886 48,558 Shares repurchased (95,743) (162,230) (743,803) (1,045,467) - ---------------------------------------------------------------------------------------------------------- Net increase 53,099 180,332 $ 408,999 $ 1,279,365 - ---------------------------------------------------------------------------------------------------------- Class C Shares sold 141,547 216,791 $ 1,087,190 $ 1,471,332 Shares issued in reinvestment of dividends 1,740 5,016 13,537 36,385 Shares repurchased (59,700) (90,706) (463,429) (626,275) - ---------------------------------------------------------------------------------------------------------- Net increase 83,587 131,101 $ 637,298 $ 881,442 - ---------------------------------------------------------------------------------------------------------- Class K Shares sold 106,744 42,861 $ 825,640 $ 288,767 Shares issued in reinvestment of dividends 3,030 7,640 23,637 55,604 Shares repurchased (3,551) (2,533) (27,533) (18,219) - ---------------------------------------------------------------------------------------------------------- Net increase 106,223 47,968 $ 821,744 $ 326,152 - ----------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- 70 .. The Park Avenue Portfolio Notes to Financial Statements (Continued) June 30, 2004 (Unaudited) [_] The Guardian Baillie Gifford International Growth Fund Six Months Six Months Ended Year Ended Ended Year Ended June 30, 2004 December 31, 2003 June 30, 2004 December 31, 2003 (Unaudited) (Audited) (Unaudited) (Audited) - ------------------------------------------------------------------------------------------------------------ Shares Amount - ------------------------------------------------------------------------------------------------------------ Class A Shares sold 436,297 10,537,973 $ 5,158,929 $ 97,112,928 Shares issued in reinvestment of dividends 7,506 5,562 87,669 55,072 Shares repurchased (550,025) (13,119,742) (6,501,497) (123,103,708) - ---------------------------------------------------------------------------------------------------------- Net decrease (106,222) (2,576,207) $(1,254,899) $ (25,935,708) - ---------------------------------------------------------------------------------------------------------- Class B Shares sold 24,215 37,373 $ 265,051 $ 344,699 Shares repurchased (56,743) (92,815) (608,745) (815,798) - ---------------------------------------------------------------------------------------------------------- Net decrease (32,528) (55,442) $ (343,694) $ (471,099) - ---------------------------------------------------------------------------------------------------------- Class C Shares sold 6,223 1,537 $ 68,506 $ 27,531 Shares repurchased (2,375) (3,434) (25,130) (28,063) - ---------------------------------------------------------------------------------------------------------- Net increase/(decrease) 3,848 (1,897) $ 43,376 $ (532) - ---------------------------------------------------------------------------------------------------------- Class K Shares sold 6,051 3,672 $ 72,308 $ 51,596 Shares repurchased (1,119) (53) (12,788) (489) - ---------------------------------------------------------------------------------------------------------- Net increase 4,932 3,619 $ 59,520 $ 51,107 - ---------------------------------------------------------------------------------------------------------- [_] The Guardian Baillie Gifford Emerging Markets Fund Six Months Six Months Ended Year Ended Ended Year Ended June 30, 2004 December 31, 2003 June 30, 2004 December 31, 2003 (Unaudited) (Audited) (Unaudited) (Audited) - ------------------------------------------------------------------------------------------------------------ Shares Amount - ------------------------------------------------------------------------------------------------------------ Class A Shares sold 896,619 2,873,147 $11,997,765 $ 26,734,981 Shares issued in reinvestment of dividends 9,454 -- 113,730 -- Shares repurchased (433,607) (2,744,885) (5,395,458) (25,296,414) - ---------------------------------------------------------------------------------------------------------- Net increase 472,466 128,262 $ 6,716,037 $ 1,438,567 - ---------------------------------------------------------------------------------------------------------- Class B Shares sold 57,201 150,218 $ 695,001 $ 1,342,915 Shares repurchased (28,886) (119,951) (342,680) (1,037,985) - ---------------------------------------------------------------------------------------------------------- Net increase 28,315 30,267 $ 352,321 $ 304,930 - ---------------------------------------------------------------------------------------------------------- Class C Shares sold 38,659 44,398 $ 455,840 $ 373,501 Shares repurchased (1,448) (46,386) (18,126) (397,512) - ---------------------------------------------------------------------------------------------------------- Net increase/(decrease) 37,211 (1,988) $ 437,714 $ (24,011) - ---------------------------------------------------------------------------------------------------------- Class K Shares sold 16,940 9,274 $ 215,110 $ 86,943 Shares issued in reinvestment of dividends 1,004 -- 11,893 -- Shares repurchased (735) (4,707) (8,995) (55,386) - ---------------------------------------------------------------------------------------------------------- Net increase 17,209 4,567 $ 218,008 $ 31,557 - ----------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- 71 .. The Park Avenue Portfolio Notes to Financial Statements (Continued) June 30, 2004 (Unaudited) [_] The Guardian Investment Quality Bond Fund Six Months Six Months Ended Year Ended Ended Year Ended June 30, 2004 December 31, 2003 June 30, 2004 December 31, 2003 (Unaudited) (Audited) (Unaudited) (Audited) - ---------------------------------------------------------------------------------------------------------------------------- Shares Amount - ---------------------------------------------------------------------------------------------------------------------------- Class A Shares sold 574,113 3,296,812 $ 5,784,428 $ 34,079,857 Shares issued in reinvestment of dividends and distributions 254,605 802,794 2,548,930 8,219,350 Shares repurchased (2,612,818) (6,470,579) (26,214,852) (66,786,391) - ---------------------------------------------------------------------------------------------------------------------------- Net decrease (1,784,100) (2,370,973) $(17,881,494) $(24,487,184) - ---------------------------------------------------------------------------------------------------------------------------- Class B Shares sold 57,416 350,698 $ 582,465 $ 3,646,670 Shares issued in reinvestment of dividends and distributions 32,798 98,401 328,005 1,005,080 Shares repurchased (184,457) (506,012) (1,845,016) (5,234,314) - ---------------------------------------------------------------------------------------------------------------------------- Net decrease (94,243) (56,913) $ (934,546) $ (582,564) - ---------------------------------------------------------------------------------------------------------------------------- Class C Shares sold 4,897 51,395 $ 49,656 $ 533,062 Shares issued in reinvestment of dividends and distributions 21,413 58,874 214,094 600,919 Shares repurchased (11,058) (45,445) (110,908) (467,508) - ---------------------------------------------------------------------------------------------------------------------------- Net increase 15,252 64,824 $ 152,842 $ 666,473 - ---------------------------------------------------------------------------------------------------------------------------- Class K Shares sold 37,053 26,977 $ 374,410 $ 279,706 Shares issued in reinvestment of dividends and distributions 21,205 55,230 212,322 564,721 Shares repurchased (5,084) (5,155) (51,454) (52,997) - ---------------------------------------------------------------------------------------------------------------------------- Net increase 53,174 77,052 $ 535,278 $ 791,430 - ---------------------------------------------------------------------------------------------------------------------------- [_] The Guardian Low Duration Bond Fund Six Months Period from Six Months Period from Ended July 30, 2003+ to Ended July 30, 2003+ to June 30, 2004 December 31, 2003 June 30, 2004 December 31, 2003 (Unaudited) (Audited) (Unaudited) (Audited) - ---------------------------------------------------------------------------------------------------------------------------- Shares Amount - ---------------------------------------------------------------------------------------------------------------------------- Class A Shares sold 145,690 844,512 $ 1,462,621 $ 8,444,850 Shares issued in reinvestment of dividends 9,778 6,175 97,839 61,772 Shares repurchased (94,715) (7,066) (946,011) (70,762) - ---------------------------------------------------------------------------------------------------------------------------- Net increase 60,753 843,621 $ 614,449 $ 8,435,860 - ---------------------------------------------------------------------------------------------------------------------------- Class B Shares sold 35,653 768,810 $ 356,640 $ 7,688,450 Shares issued in reinvestment of dividends 5,866 3,565 58,690 35,669 Shares repurchased (4,739) -- (47,387) -- - ---------------------------------------------------------------------------------------------------------------------------- Net increase 36,780 772,375 $ 367,943 $ 7,724,119 - ---------------------------------------------------------------------------------------------------------------------------- Class C Shares sold 14,190 755,679 $ 141,755 $ 7,556,708 Shares issued in reinvestment of dividends 5,680 3,529 56,822 35,314 Shares repurchased -- (1) -- (10) - ---------------------------------------------------------------------------------------------------------------------------- Net increase 19,870 759,207 $ 198,577 $ 7,592,012 - ---------------------------------------------------------------------------------------------------------------------------- Class K Shares sold 5,114 750,005 $ 51,025 $ 7,500,050 Shares issued in reinvestment of dividends 6,957 4,625 69,604 46,272 Shares repurchased (4) -- (39) -- - ---------------------------------------------------------------------------------------------------------------------------- Net increase 12,067 754,630 $ 120,590 $ 7,546,322 - ----------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations. - -------------------------------------------------------------------------------- 72 .. The Park Avenue Portfolio Notes to Financial Statements (Continued) June 30, 2004 (Unaudited) [_] The Guardian High Yield Bond Fund Six Months Six Months Ended Year Ended Ended Year Ended June 30, 2004 December 31, 2003 June 30, 2004 December 31, 2003 (Unaudited) (Audited) (Unaudited) (Audited) - ---------------------------------------------------------------------------------------------------------------------------- Shares Amount - ---------------------------------------------------------------------------------------------------------------------------- Class A Shares sold 202,869 1,700,337 $ 1,497,905 $ 11,968,468 Shares issued in reinvestment of dividends 209,675 413,138 1,542,800 2,932,687 Shares repurchased (275,662) (1,462,685) (2,037,767) (10,413,890) - ---------------------------------------------------------------------------------------------------------------------------- Net increase 136,882 650,790 $ 1,002,938 $ 4,487,265 - ---------------------------------------------------------------------------------------------------------------------------- Class B Shares sold 25,999 112,748 $ 190,791 $ 794,370 Shares issued in reinvestment of dividends 41,143 83,788 302,590 593,996 Shares repurchased (51,680) (97,832) (380,235) (688,181) - ---------------------------------------------------------------------------------------------------------------------------- Net increase 15,462 98,704 $ 113,146 $ 700,185 - ---------------------------------------------------------------------------------------------------------------------------- Class C Shares sold 13,068 63,604 $ 96,620 $ 454,494 Shares issued in reinvestment of dividends 42,042 81,823 309,069 580,074 Shares repurchased (7,489) (47,186) (55,417) (339,768) - ---------------------------------------------------------------------------------------------------------------------------- Net increase 47,621 98,241 $ 350,272 $ 694,800 - ---------------------------------------------------------------------------------------------------------------------------- Class K Shares sold 26,484 10,354 $ 196,040 $ 75,093 Shares issued in reinvestment of dividends 45,887 88,340 337,702 627,000 Shares repurchased (5,187) (4) (38,392) (28) - ---------------------------------------------------------------------------------------------------------------------------- Net increase 67,184 98,690 $ 495,350 $ 702,065 - ---------------------------------------------------------------------------------------------------------------------------- [_] The Guardian Tax-Exempt Fund Six Months Six Months Ended Year Ended Ended Year Ended June 30, 2004 December 31, 2003 June 30, 2004 December 31, 2003 (Unaudited) (Audited) (Unaudited) (Audited) - ---------------------------------------------------------------------------------------------------------------------------- Shares Amount - ---------------------------------------------------------------------------------------------------------------------------- Class A Shares sold 90,774 746,166 $ 935,490 $ 7,845,141 Shares issued in reinvestment of dividends and distributions 130,961 531,383 1,334,081 5,543,478 Shares repurchased (197,314) (4,350,043) (2,025,872) (45,456,417) - ---------------------------------------------------------------------------------------------------------------------------- Net increase/(decrease) 24,421 (3,072,494) $ 243,699 $(32,067,798) - ---------------------------------------------------------------------------------------------------------------------------- Class C Shares sold 4,228 49,048 $ 42,800 $ 518,954 Shares issued in reinvestment of dividends and distributions 13,733 62,083 139,865 646,799 Shares repurchased (21,034) (14,571) (213,215) (153,002) - ---------------------------------------------------------------------------------------------------------------------------- Net increase/(decrease) (3,073) 96,560 $ (30,550) $ 1,012,751 - ----------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- 73 .. The Park Avenue Portfolio Notes to Financial Statements (Continued) June 30, 2004 (Unaudited) [_] The Guardian Cash Management Fund Six Months Ended Year Ended June 30, 2004 December 31, 2003 (Unaudited) (Audited) - -------------------------------------------------------------------------- Shares @ $1 per share - -------------------------------------------------------------------------- Class A Shares sold 91,051,373 234,972,577 Shares issued in reinvestment of dividends 629,198 2,306,769 Shares repurchased (151,484,997) (366,117,487) - -------------------------------------------------------------------------- Net decrease (59,804,426) (128,838,141) - -------------------------------------------------------------------------- Class B Shares sold 2,197,500 5,150,561 Shares issued in reinvestment of dividends 13,767 30,959 Shares repurchased (4,780,442) (11,168,541) - -------------------------------------------------------------------------- Net decrease (2,569,175) (5,987,021) - -------------------------------------------------------------------------- Class C Shares sold 132,705 436,733 Shares issued in reinvestment of dividends 11,296 19,006 Shares repurchased (607,661) (700,634) - -------------------------------------------------------------------------- Net decrease (463,660) (244,895) - -------------------------------------------------------------------------- Class K Shares sold 1,437,263 3,114,743 Shares issued in reinvestment of dividends 7,263 15,352 Shares repurchased (1,788,993) (1,947,265) - -------------------------------------------------------------------------- Net increase/(decrease) (344,467) 1,182,830 - --------------------------------------------------------------------------
- -------------------------------------------------------------------------------- 74 Note 9. Line of Credit A $100,000,000 line of credit available to all of the Funds and other related Guardian Funds has been established with State Street Bank and Trust Company and Bank of Montreal. The rate of interest charged on any borrowing is based upon the prevailing Federal Funds rate at the time of the loan plus .50% calculated on a 360 day basis per annum. For the six months ended June 30, 2004, none of the Funds borrowed against this line of credit. The Funds are obligated to pay State Street Bank and Trust Company and Bank of Montreal a commitment fee computed at a rate of .08% per annum on the average daily unused portion of the revolving credit. .. The Park Avenue Portfolio Notes to Financial Statements (Continued) June 30, 2004 (Unaudited) Note 10. Investments in Affiliates/1/ A summary of GAAF transactions in affiliated securities during the six months ended June 30, 2004 is set forth below:
Balance of Balance of Dividends Shares Gross Shares Included Net Realized Held Purchases Gross Held Value in Gains from December 31, and Sales and June 30, June 30, Dividend Underlying Name of Issuer 2003 Additions Reductions 2004 2004 Income Funds -------------- ------------ --------- ---------- ---------- ------------ --------- ------------ Non-Controlled Affiliates The Guardian Investment Quality Bond Fund, Class A 2,190,079 -- 925,588 1,264,491 $ 12,467,877 $534,706 $46,786 Majority-Owned Subsidiary The Guardian S&P 500 Index Fund, Class A 15,277,311 -- -- 15,277,311 119,621,343 407,301 --
Net Realized Gain Name of Issuer on Sales -------------- ------------ Non-Controlled Affiliates The Guardian Investment Quality Bond Fund, Class A $75,349 Majority-Owned Subsidiary The Guardian S&P 500 Index Fund, Class A --
/1/Affiliated issuers, as defined in the 1940 Act, include issuers in which the Fund held 5% or more of the outstanding voting securities. Majority-owned subsidiaries include issuers on which the Fund held 50% or more of the outstanding voting securities. - -------------------------------------------------------------------------------- 75 .. The Park Avenue Portfolio Financial Highlights Selected data for a share of beneficial interest outstanding throughout the periods indicated:
Net Realized & Unrealized Gain/(Loss) on Investments Increase/ Net Asset Net and Foreign (Decrease) Dividends Value, Investment Currency from from Net Beginning Income/ Related Investment Investment of Period (Loss) Transactions Operations Income --------- ---------- -------------- ---------- ---------- The Guardian Park Avenue Fund Class A: Six months ended 6/30/2004+................ $30.08 $ 0.09 $ 0.13 $ 0.22 $(0.19) Year ended 12/31/2003...................... 25.03 0.23 5.00 5.23 (0.18) Year ended 12/31/2002...................... 32.00 0.17 (7.06) (6.89) (0.08) Year ended 12/31/2001...................... 41.18 0.12 (9.06) (8.94) (0.03) Year ended 12/31/2000...................... 59.42 (0.09) (10.57) (10.66) (0.00)++ Year ended 12/31/1999...................... 51.88 0.13 15.04 15.17 (0.08) Class B: Six months ended 6/30/2004+................ 28.72 (0.15) 0.23 0.08 -- Year ended 12/31/2003...................... 23.99 (0.16) 4.89 4.73 -- Year ended 12/31/2002...................... 30.88 (0.20) (6.69) (6.89) -- Year ended 12/31/2001...................... 40.08 (0.23) (8.76) (8.99) -- Year ended 12/31/2000...................... 58.57 (0.43) (10.48) (10.91) -- Year ended 12/31/1999...................... 51.59 (0.31) 14.84 14.53 -- Class C: Six months ended 6/30/2004+................ 28.37 (0.11) 0.15 0.04 -- Year ended 12/31/2003...................... 23.75 (0.16) 4.78 4.62 -- Year ended 12/31/2002...................... 30.64 (0.19) (6.70) (6.89) -- Year ended 12/31/2001...................... 39.85 (0.25) (8.75) (9.00) -- Period from 8/7/2000+++ to 12/31/2000...... 58.01 (0.11) (12.59) (12.70) -- Class K: Six months ended 6/30/2004+................ 30.00 0.02 0.16 0.18 (0.15) Year ended 12/31/2003...................... 24.96 0.11 5.02 5.13 (0.09) Year ended 12/31/2002...................... 31.93 0.05 (7.02) (6.97) -- Period from 5/15/2001+++ to 12/31/2001..... 35.55 0.00 (3.41) (3.41) -- The Guardian UBS Large Cap Value Fund Class A: Six months ended 6/30/2004+................ 12.82 0.04 0.34 0.38 (0.05) Period from 2/3/2003+++ to 12/31/2003...... 10.00 0.08 3.06 3.14 (0.07) Class B: Six months ended 6/30/2004+................ 12.80 (0.01) 0.33 0.32 -- Period from 2/3/2003+++ to 12/31/2003...... 10.00 0.00 3.06 3.06 (0.01) Class C: Six months ended 6/30/2004+................ 12.80 (0.01) 0.33 0.32 -- Period from 2/3/2003+++ to 12/31/2003...... 10.00 0.00 3.06 3.06 (0.01) Class K: Six months ended 6/30/2004+................ 12.83 0.02 0.33 0.35 (0.03) Period from 2/3/2003+++ to 12/31/2003...... 10.00 0.05 3.07 3.12 (0.04) The Guardian Park Avenue Small Cap Fund Class A: Six months ended 6/30/2004+................ 19.05 (0.07) 0.80 0.73 -- Year ended 12/31/2003...................... 13.30 (0.10) 5.85 5.75 -- Year ended 12/31/2002...................... 15.74 (0.07) (2.37) (2.44) -- Year ended 12/31/2001...................... 16.93 (0.06) (1.13) (1.19) -- Year ended 12/31/2000...................... 17.48 (0.05) (0.37) (0.42) -- Year ended 12/31/1999...................... 12.80 (0.07) 4.75 4.68 -- Class B: Six months ended 6/30/2004+................ 17.93 (0.15) 0.76 0.61 -- Year ended 12/31/2003...................... 12.64 (0.24) 5.53 5.29 -- Year ended 12/31/2002...................... 15.10 (0.20) (2.26) (2.46) -- Year ended 12/31/2001...................... 16.39 (0.20) (1.09) (1.29) -- Year ended 12/31/2000...................... 17.06 (0.20) (0.34) (0.54) -- Year ended 12/31/1999...................... 12.61 (0.19) 4.64 4.45 -- Class C: Six months ended 6/30/2004+................ 17.83 (0.16) 0.75 0.59 -- Year ended 12/31/2003...................... 12.59 (0.27) 5.51 5.24 -- Year ended 12/31/2002...................... 15.07 (0.22) (2.26) (2.48) -- Year ended 12/31/2001...................... 16.39 (0.21) (1.11) (1.32) -- Period from 8/7/2000+++ to 12/31/2000...... 19.37 (0.08) (2.77) (2.85) -- Class K: Six months ended 6/30/2004+................ 18.79 (0.10) 0.80 0.70 -- Year ended 12/31/2003...................... 13.15 (0.14) 5.78 5.64 -- Year ended 12/31/2002...................... 15.62 (0.11) (2.36) (2.47) -- Period from 5/15/2001+++ to 12/31/2001..... 15.71 (0.07) (0.02) (0.09) --
+Unaudited. ++Rounds to less than $0.01. +++Commencement of operations. - -------------------------------------------------------------------------------- 76
Distributions from Ratios/Supplemental Data Net Realized -------------------------------------------------- Gain on Net Investments Net Asset Net Assets, Investment and Foreign Value, End of Expenses Income/(Loss) Portfolio Currency Related End of Total Period to Average to Average Turnover Transactions Period Return* (000's Omitted) Net Assets Net Assets Rate - ---------------- --------- ------- --------------- ---------- ------------- --------- -- $30.11 0.72%(a) $1,042,827 0.90%(b) 0.43%(b) 37% -- 30.08 20.95 1,133,468 0.89 0.72 74 -- 25.03 (21.56) 1,120,351 0.87 0.51 60 $(0.21) 32.00 (21.75) 1,779,818 0.83 0.31 143 (7.58) 41.18 (18.62) 2,589,059 0.79 (0.16) 108 (7.55) 59.42 30.25 3,334,722 0.77 0.24 74 -- 28.80 0.28 (a) 148,648 1.85(b) (0.52)(b) 37 -- 28.72 19.72 165,274 1.84 (0.24) 74 -- 23.99 (22.31) 167,471 1.83 (0.44) 60 (0.21) 30.88 (22.46) 274,761 1.75 (0.61) 143 (7.58) 40.08 (19.34) 431,206 1.67 (1.03) 108 (7.55) 58.57 29.13 507,764 1.67 (0.66) 74 -- 28.41 0.14 (a) 6,557 2.08(b) (0.75)(b) 37 -- 28.37 19.45 6,622 2.12 (0.52) 74 -- 23.75 (22.49) 5,884 2.07 (0.67) 60 (0.21) 30.64 (22.62) 7,594 1.96 (0.81) 143 (5.46) 39.85 (21.79)(a) 8,222 2.18(b) (1.29)(b) 108 -- 30.03 0.60 (a) 7,619 1.20(b) 0.14 (b) 37 -- 30.00 20.58 7,145 1.20 0.41 74 -- 24.96 (21.83) 5,752 1.21 0.19 60 (0.21) 31.93 (9.63)(a) 7,229 1.22(b) 0.02 (b) 143 (0.45) 12.70 2.98 (a) 23,082 1.49(b) 0.60 (b) 15 (0.25) 12.82 31.48 (a) 21,705 1.59(b) 0.78 (b) 45 (0.45) 12.67 2.54 (a) 22,034 2.24(b) (0.15)(b) 15 (0.25) 12.80 30.65 (a) 21,378 2.33(b) 0.03 (b) 45 (0.45) 12.67 2.54 (a) 21,382 2.21(b) (0.12)(b) 15 (0.25) 12.80 30.65 (a) 20,801 2.33(b) 0.04 (b) 45 (0.45) 12.70 2.79 (a) 21,728 1.75(b) 0.34 (b) 15 (0.25) 12.83 31.22 (a) 20,944 1.88(b) 0.49 (b) 45 (0.24) 19.54 3.89 (a) 166,967 1.21(b) (0.76)(b) 51 -- 19.05 43.23 160,049 1.27 (0.67) 105 -- 13.30 (15.50) 111,803 1.25 (0.45) 108 -- 15.74 (7.03) 139,774 1.28 (0.37) 131 (0.13) 16.93 (2.35) 150,022 1.25 (0.31) 125 -- 17.48 36.56 119,032 1.34 (0.48) 92 (0.24) 18.30 3.47 (a) 22,717 2.12(b) (1.67)(b) 51 -- 17.93 41.85 22,989 2.21 (1.61) 105 -- 12.64 (16.29) 17,189 2.19 (1.40) 108 -- 15.10 (7.87) 20,876 2.18 (1.27) 131 (0.13) 16.39 (3.11) 24,977 2.12 (1.18) 125 -- 17.06 35.29 22,430 2.23 (1.36) 92 (0.24) 18.18 3.37 (a) 8,427 2.25(b) (1.80)(b) 51 -- 17.83 41.62 8,092 2.39 (1.79) 105 -- 12.59 (16.46) 5,824 2.40 (1.60) 108 -- 15.07 (8.05) 6,752 2.34 (1.43) 131 (0.13) 16.39 (14.67)(a) 7,033 2.22(b) (1.12)(b) 125 (0.24) 19.25 3.79 (a) 10,493 1.52(b) (1.06)(b) 51 -- 18.79 42.89 9,893 1.55 (0.96) 105 -- 13.15 (15.81) 6,748 1.55 (0.75) 108 -- 15.62 (0.57)(a) 7,959 1.61(b) (0.77)(b) 131
* Excludes the effect of sales load. (a)Not annualized. (b)Annualized. - -------------------------------------------------------------------------------- 77 .. The Park Avenue Portfolio Financial Highlights (Continued) Selected data for a share of beneficial interest outstanding throughout the periods indicated:
Net Realized & Unrealized Gain/(Loss) on Investments Increase/ Net Asset Net and Foreign (Decrease) Dividends Value, Investment Currency from from Net Beginning Income/ Related Investment Investment of Period (Loss) Transactions Operations Income --------- ---------- -------------- ---------- ---------- The Guardian UBS Small Cap Value Fund Class A: Six months ended 6/30/2004+............... $12.71 $(0.04) $ 0.71 $ 0.67 -- Period from 2/3/2003++ to 12/31/2003...... 10.00 (0.01) 3.60 3.59 -- Class B: Six months ended 6/30/2004+............... 12.61 (0.08) 0.70 0.62 -- Period from 2/3/2003++ to 12/31/2003...... 10.00 (0.09) 3.58 3.49 -- Class C: Six months ended 6/30/2004+............... 12.61 (0.08) 0.70 0.62 -- Period from 2/3/2003++ to 12/31/2003...... 10.00 (0.10) 3.59 3.49 -- Class K: Six months ended 6/30/2004+............... 12.68 (0.04) 0.71 0.67 -- Period from 2/3/2003++ to 12/31/2003...... 10.00 (0.03) 3.59 3.56 -- The Guardian Asset Allocation Fund Class A: Six months ended 6/30/2004+............... 10.63 0.06 0.26 0.32 $(0.13) Year ended 12/31/2003..................... 8.45 0.14 2.20 2.34 (0.16) Year ended 12/31/2002..................... 10.84 0.17 (2.38) (2.21) (0.18) Year ended 12/31/2001..................... 13.00 0.30 (1.61) (1.31) (0.18) Year ended 12/31/2000..................... 14.77 0.45 (0.29) 0.16 (0.44) Year ended 12/31/1999..................... 14.78 0.37 1.47 1.84 (0.37) Class B: Six months ended 6/30/2004+............... 10.57 0.01 0.26 0.27 (0.04) Year ended 12/31/2003..................... 8.41 0.05 2.18 2.23 (0.07) Year ended 12/31/2002..................... 10.77 0.09 (2.37) (2.28) (0.08) Year ended 12/31/2001..................... 12.95 0.19 (1.59) (1.40) (0.11) Year ended 12/31/2000..................... 14.72 0.32 (0.27) 0.05 (0.33) Year ended 12/31/1999..................... 14.73 0.23 1.47 1.70 (0.23) Class C: Six months ended 6/30/2004+............... 10.56 (0.00)+++ 0.26 0.26 (0.01) Year ended 12/31/2003..................... 8.39 0.02 2.19 2.21 (0.04) Year ended 12/31/2002..................... 10.77 0.05 (2.38) (2.33) (0.05) Year ended 12/31/2001..................... 12.94 0.17 (1.64) (1.47) (0.03) Period from 8/7/2000++ to 12/31/2000...... 14.72 0.15 (0.78) (0.63) (0.23) Class K: Six months ended 6/30/2004+............... 10.60 0.04 0.26 0.30 (0.09) Year ended 12/31/2003..................... 8.43 0.09 2.19 2.28 (0.11) Year ended 12/31/2002..................... 10.82 0.13 (2.39) (2.26) (0.13) Period from 5/15/2001++ to 12/31/2001..... 12.06 0.11 (0.68) (0.57) -- The Guardian S&P 500 Index Fund Class A: Six months ended 6/30/2004+............... 7.63 0.04 0.20 0.24 (0.04) Year ended 12/31/2003..................... 6.04 0.08 1.59 1.67 (0.08) Year ended 12/31/2002..................... 7.90 0.10 (1.86) (1.76) (0.10) Year ended 12/31/2001..................... 9.07 0.06 (1.17) (1.11) (0.06) Period from 7/25/2000++ to 12/31/2000..... 10.06 0.03 (0.99) (0.96) (0.03) Class B: Six months ended 6/30/2004+............... 7.62 0.01 0.20 0.21 (0.01) Year ended 12/31/2003..................... 6.03 0.03 1.59 1.62 (0.03) Year ended 12/31/2002..................... 7.88 0.02 (1.85) (1.83) (0.02) Year ended 12/31/2001..................... 9.05 0.01 (1.18) (1.17) (0.00)+++ Period from 7/25/2000++ to 12/31/2000..... 10.06 0.00 (1.01) (1.01) -- Class C: Six months ended 6/30/2004+............... 7.61 0.01 0.20 0.21 (0.01) Year ended 12/31/2003..................... 6.03 0.03 1.58 1.61 (0.03) Year ended 12/31/2002..................... 7.88 0.02 (1.85) (1.83) (0.02) Year ended 12/31/2001..................... 9.05 0.01 (1.17) (1.16) (0.01) Period from 7/25/2000++ to 12/31/2000..... 10.06 0.00 (1.01) (1.01) -- Class K: Six months ended 6/30/2004+............... 7.63 0.03 0.19 0.22 (0.02) Year ended 12/31/2003..................... 6.04 0.06 1.59 1.65 (0.06) Year ended 12/31/2002..................... 7.90 0.05 (1.86) (1.81) (0.05) Period from 5/15/2001++ to 12/31/2001..... 8.59 0.02 (0.69) (0.67) (0.02)
+Unaudited. ++Commencement of operations. +++Rounds to less than $0.01. - -------------------------------------------------------------------------------- 78
Distributions from Ratios/Supplemental Data Net Realized ---------------------------------------------------------------------------- Gain on Net Investments Net Asset Net Assets, Expenses GAAF Investment and Foreign Value, End of Expenses Waived/ Gross Income/(Loss) Portfolio Currency Related End of Total Period to Average Subsidized Expense to Average Turnover Transactions Period Return* (000's Omitted) Net Assets(a) by GIS Ratio(b) Net Assets Rate - ---------------- --------- ------- --------------- ------------- ---------- -------- ------------- --------- $(0.63) $12.75 5.39%(c) $ 11,422 2.05%(d) -- -- (0.59)%(d) 31% (0.88) 12.71 35.76 (c) 10,081 2.17(d) -- -- (0.07)(d) 94 (0.63) 12.60 5.04 (c) 10,333 2.82(d) -- -- (1.35)(d) 31 (0.88) 12.61 34.76 (c) 9,737 2.91(d) -- -- (0.81)(d) 94 (0.63) 12.60 5.04 (c) 9,922 2.82(d) -- -- (1.36)(d) 31 (0.88) 12.61 34.76 (c) 9,422 2.91(d) -- -- (0.81)(d) 94 (0.63) 12.72 5.41 (c) 10,240 2.16(d) -- -- (0.70)(d) 31 (0.88) 12.68 35.46 (c) 9,492 2.35(d) -- -- (0.25)(d) 94 -- 10.82 2.99 (c) 114,615 0.41(d) 0.77%(d) 0.89%(d) 0.94 (d) 0 -- 10.63 27.87 118,988 0.43 0.77 0.97 1.25 0 -- 8.45 (20.64) 110,593 0.42 0.73 0.95 1.60 4 (0.67) 10.84 (10.23) 169,386 0.47 0.63 0.93 2.44 51 (1.49) 13.00 1.00 227,228 0.46 0.60 1.10 3.07 11 (1.48) 14.77 12.99 227,031 0.48 0.58 1.08 2.48 16 -- 10.80 2.52 (c) 31,543 1.22(d) 0.77(d) 1.70(d) 0.13 (d) 0 -- 10.57 26.65 32,863 1.27 0.77 1.81 0.43 0 -- 8.41 (21.31) 29,064 1.25 0.73 1.78 0.78 4 (0.67) 10.77 (10.99) 44,813 1.28 0.63 1.74 1.62 51 (1.49) 12.95 0.26 51,024 1.28 0.60 1.91 2.29 11 (1.48) 14.72 12.09 40,914 1.31 0.58 1.91 1.66 16 -- 10.81 2.47 (c) 8,063 1.43(d) 0.77(d) 1.91(d) (0.06)(d) 0 -- 10.56 26.39 7,857 1.51 0.77 2.06 0.19 0 -- 8.39 (21.70) 6,470 1.50 0.73 2.03 0.58 4 (0.67) 10.77 (11.48) 8,080 1.46 0.63 1.92 1.43 51 (0.92) 12.94 (4.18)(c) 8,544 1.49(d) 0.55(d) 2.07(d) 2.61 (d) 11 -- 10.81 2.84 (c) 8,268 0.67(d) 0.77(d) 1.15(d) 0.70 (d) 0 -- 10.60 27.20 7,859 0.68 0.77 1.22 1.04 0 -- 8.43 (21.05) 6,126 0.70 0.73 1.22 1.39 4 (0.67) 10.82 (4.85)(c) 7,619 0.75(d) 0.72(d) 1.29(d) 1.57 (d) 51 -- 7.83 3.08 (c) 135,979 0.53(d) 0.19(d) -- 1.10 (d) 0 -- 7.63 27.78 129,228 0.53 0.25 -- 1.26 4 -- 6.04 (22.35) 100,129 0.53 0.13 -- 1.03 10 -- 7.90 (12.25) 276,645 0.53 0.10 -- 0.87 1 (0.00)(e) 9.07 (9.53)(c) 167,487 0.53(d) 0.21(d) -- 0.71 (d) 4 -- 7.82 2.78 (c) 12,802 1.28(d) 0.46(d) -- 0.35 (d) 0 -- 7.62 26.94 12,070 1.28 0.61 -- 0.51 4 -- 6.03 (23.22) 8,472 1.28 0.52 -- 0.33 10 -- 7.88 (12.87) 9,705 1.28 0.47 -- 0.09 1 (0.00)(e) 9.05 (10.00)(c) 7,677 1.28(d) 0.47(d) -- (0.04)(d) 4 -- 7.81 2.77 (c) 9,681 1.28(d) 0.49(d) -- 0.35 (d) 0 -- 7.61 26.77 8,796 1.28 0.67 -- 0.51 4 -- 6.03 (23.21) 6,175 1.28 0.57 -- 0.33 10 -- 7.88 (12.87) 7,598 1.28 0.49 -- 0.09 1 (0.00)(e) 9.05 (10.00)(c) 7,296 1.28(d) 0.47(d) -- (0.04)(d) 4 -- 7.83 2.91 (c) 8,629 0.93(d) 0.16(d) -- 0.70 (d) 0 -- 7.63 27.31 7,594 0.93 0.21 -- 0.86 4 -- 6.04 (23.00) 5,722 0.93 0.10 -- 0.68 10 -- 7.90 (7.76)(c) 7,383 0.93(d) 0.15(d) -- 0.47 (d) 1
* Excludes the effect of sales load. (a)After expenses subsidized by GIS and do not include the expenses of the underlying Funds. (b)Amounts include the expenses of the underlying Funds. (c)Not annualized. (d)Annualized. (e)Rounds to less than $0.01. - -------------------------------------------------------------------------------- 79 .. The Park Avenue Portfolio Financial Highlights (Continued) Selected data for a share of beneficial interest outstanding throughout the periods indicated:
Net Realized & Unrealized Gain/(Loss) on Investments Increase/ Net Asset Net and Foreign (Decrease) Dividends Value, Investment Currency from from Net Beginning Income/ Related Investment Investment of Period (Loss) Transactions Operations Income --------- ---------- -------------- ---------- ---------- The Guardian Baillie Gifford International Growth Fund Class A: Six months ended 6/30/2004+..................... $11.43 $ 0.06 $ 0.17 $ 0.23 $(0.03) Year ended 12/31/2003........................... 8.90 0.18 2.33 2.51 (0.01) Year ended 12/31/2002........................... 11.09 0.06 (2.25) (2.19) -- Year ended 12/31/2001........................... 14.28 0.01 (3.20) (3.19) -- Year ended 12/31/2000........................... 23.36 (0.06) (5.52) (5.58) -- Year ended 12/31/1999........................... 18.41 0.01 6.68 6.69 -- Class B: Six months ended 6/30/2004+..................... 10.45 (0.07) 0.23 0.16 -- Year ended 12/31/2003........................... 8.22 (0.16) 2.36 2.20 -- Year ended 12/31/2002........................... 10.38 (0.19) (1.97) (2.16) -- Year ended 12/31/2001........................... 13.54 (0.20) (2.96) (3.16) -- Year ended 12/31/2000........................... 22.61 (0.11) (5.46) (5.57) -- Year ended 12/31/1999........................... 17.97 (0.12) 6.47 6.35 -- Class C: Six months ended 6/30/2004+..................... 10.47 (0.01) 0.18 0.17 -- Year ended 12/31/2003........................... 8.24 (0.08) 2.28 2.20 -- Year ended 12/31/2002........................... 10.40 (0.09) (2.07) (2.16) -- Year ended 12/31/2001........................... 13.55 (0.12) (3.03) (3.15) -- Period from 8/7/2000++ to 12/31/2000............ 19.19 (0.09) (2.20) (2.29) -- Class K: Six months ended 6/30/2004+..................... 11.24 0.04 0.19 0.23 -- Year ended 12/31/2003........................... 8.76 0.00 2.45 2.45 -- Year ended 12/31/2002........................... 10.94 (0.00) (2.18) (2.18) -- Period from 5/15/2001++ to 12/31/2001........... 12.96 (0.04) (1.98) (2.02) -- The Guardian Baillie Gifford Emerging Markets Fund Class A: Six months ended 6/30/2004+..................... 12.39 0.04 (0.25) (0.21) (0.03) Year ended 12/31/2003........................... 8.07 0.05 4.27 4.32 -- Year ended 12/31/2002........................... 8.45 0.01 (0.39) (0.38) -- Year ended 12/31/2001........................... 8.31 0.01 0.13 0.14 -- Year ended 12/31/2000........................... 11.13 (0.55) (2.05) (2.60) (0.22) Year ended 12/31/1999........................... 6.66 (0.07) 4.72 4.65 (0.18) Class B: Six months ended 6/30/2004+..................... 11.44 (0.02) (0.23) (0.25) -- Year ended 12/31/2003........................... 7.55 (0.04) 3.93 3.89 -- Year ended 12/31/2002........................... 7.98 (0.10) (0.33) (0.43) -- Year ended 12/31/2001........................... 7.97 (0.10) 0.11 0.01 -- Year ended 12/31/2000........................... 10.65 0.08 (2.76) (2.68) -- Year ended 12/31/1999........................... 6.44 (0.27) 4.48 4.21 -- Class C: Six months ended 6/30/2004+..................... 11.47 (0.02) (0.23) (0.25) -- Year ended 12/31/2003........................... 7.56 (0.04) 3.95 3.91 -- Year ended 12/31/2002........................... 8.00 (0.09) (0.35) (0.44) -- Year ended 12/31/2001........................... 7.98 (0.09) 0.11 0.02 -- Period from 8/7/2000++ to 12/31/2000............ 9.92 (0.08) (1.86) (1.94) -- Class K: Six months ended 6/30/2004+..................... 12.19 0.02 (0.25) (0.23) (0.01) Year ended 12/31/2003........................... 7.97 0.03 4.19 4.22 -- Year ended 12/31/2002........................... 8.36 (0.03) (0.36) (0.39) -- Period from 5/15/2001++ to 12/31/2001........... 8.35 (0.06) 0.07 0.01 --
+Unaudited. ++Commencement of operations. - -------------------------------------------------------------------------------- 80
Distributions from Ratios/Supplemental Data Net Realized -------------------------------------------------- Distributions Gain on Net in Excess Investments and Net Asset Net Assets, Investment of Net Foreign Value, End of Expenses Income/(Loss) Portfolio Investment Currency Related Redemption Tax Return End of Total Period to Average to Average Turnover Income Transactions Fees of Capital Period Return* (000's Omitted) Net Assets Net Assets Rate - ------------- ---------------- ---------- ---------- --------- ------- --------------- ---------- ------------- --------- -- -- $0.00(a) -- $11.63 2.04%(b) $ 31,469 2.01%(c) 0.77%(c) 11% -- -- 0.03 -- 11.43 28.57 32,126 1.93 0.50 44 -- -- -- -- 8.90 (19.75) 47,948 1.62 0.29 45 -- -- -- -- 11.09 (22.34) 80,856 1.53 0.06 63 -- $(3.26) -- $(0.24) 14.28 (23.81) 94,482 1.45 (0.29) 78 $(0.03) (1.71) -- -- 23.36 37.21 148,727 1.44 (0.03) 54 -- -- 0.00(a) -- 10.61 1.53 (b) 6,289 3.13(c) (0.34)(c) 11 -- -- 0.03 -- 10.45 27.13 6,535 3.19 (1.00) 44 -- -- -- -- 8.22 (20.81) 5,598 2.87 (0.98) 45 -- -- -- -- 10.38 (23.34) 8,228 2.62 (1.05) 63 -- (3.26) -- (0.24) 13.54 (24.56) 12,747 2.43 (1.27) 78 -- (1.71) -- -- 22.61 36.16 15,623 2.45 (1.03) 54 -- -- 0.00(a) -- 10.64 1.62 (b) 5,675 3.02(c) (0.22)(c) 11 -- -- 0.03 -- 10.47 27.06 5,546 3.10 (0.93) 44 -- -- -- -- 8.24 (20.77) 4,381 2.85 (0.99) 45 -- -- -- -- 10.40 (23.25) 5,530 2.60 (1.04) 63 -- (3.11) -- (0.24) 13.55 (11.72)(b) 7,208 2.51(c) (1.52)(c) 78 -- -- 0.00(a) -- 11.47 2.05 (b) 7,178 2.11(c) 0.69 (c) 11 -- -- 0.03 -- 11.24 28.31 6,979 2.13 0.04 44 -- -- -- -- 8.76 (19.93) 5,407 1.86 0.01 45 -- -- -- -- 10.94 (15.59)(b) 6,753 1.84(c) (0.60)(c) 63 -- -- 0.00(a) -- 12.15 (1.70)(b) 48,478 1.84(c) 0.62 (c) 39 -- -- -- -- 12.39 53.53 43,561 2.10 0.57 74 -- -- -- -- 8.07 (4.50) 27,356 2.10 (0.04) 81 -- -- -- -- 8.45 1.68 19,777 2.39 (0.19) 101 -- -- -- -- 8.31 (23.88) 18,439 2.18 (0.86) 101 -- -- -- -- 11.13 69.91 32,940 2.43 (1.07) 96 -- -- 0.00(a) -- 11.19 (2.19)(b) 9,504 2.85(c) (0.40)(c) 39 -- -- -- -- 11.44 51.52 9,389 3.20 (0.54) 74 -- -- -- -- 7.55 (5.39) 5,965 3.21 (1.16) 81 -- -- -- -- 7.98 0.13 6,023 3.51 (1.28) 101 -- -- -- -- 7.97 (25.16) 6,105 3.79 (2.54) 101 -- -- -- -- 10.65 65.37 2,320 5.07 (3.70) 96 -- -- 0.00(a) -- 11.22 (2.18)(b) 9,754 2.82(c) (0.38)(c) 39 -- -- -- -- 11.47 51.72 9,540 3.17 (0.51) 74 -- -- -- -- 7.56 (5.50) 6,306 3.12 (1.08) 81 -- -- -- -- 8.00 0.25 6,486 3.34 (1.12) 101 -- -- -- -- 7.98 (19.56)(b) 6,466 3.49(c) (2.31)(c) 101 -- -- 0.00(a) -- 11.95 (1.87)(b) 11,784 2.15(c) 0.29 (c) 39 -- -- -- -- 12.19 52.95 11,803 2.38 0.29 74 -- -- -- -- 7.97 (4.67) 7,685 2.36 (0.32) 81 -- -- -- -- 8.36 0.12 (b) 8,020 2.63(c) (1.23)(c) 101
* Excludes the effect of sales load. (a)Rounds to less than $ 0.01. (b)Not annualized. (c)Annualized. - -------------------------------------------------------------------------------- 81 .. The Park Avenue Portfolio Financial Highlights (Continued) Selected data for a share of beneficial interest outstanding throughout the periods indicated:
Net Realized & Unrealized Gain/(Loss) on Investments Increase/ Net Asset and Foreign (Decrease) Dividends Value, Net Currency from from Net Beginning Investment Related Investment Investment of Period Income Transactions Operations Income --------- ---------- -------------- ---------- ---------- The Guardian Investment Quality Bond Fund Class A: Six months ended 6/30/2004+............... $10.09 $0.20 $(0.19) $ 0.01 $(0.20) Year ended 12/31/2003..................... 10.28 0.35 0.11 0.46 (0.35) Year ended 12/31/2002..................... 9.86 0.44 0.45 0.89 (0.44) Year ended 12/31/2001..................... 9.61 0.50 0.30 0.80 (0.50) Year ended 12/31/2000..................... 9.33 0.60 0.28 0.88 (0.60) Year ended 12/31/1999..................... 9.99 0.53 (0.63) (0.10) (0.53) Class B: Six months ended 6/30/2004+............... 10.09 0.16 (0.19) (0.03) (0.16) Year ended 12/31/2003..................... 10.28 0.27 0.11 0.38 (0.27) Year ended 12/31/2002..................... 9.86 0.37 0.45 0.82 (0.37) Year ended 12/31/2001..................... 9.60 0.43 0.31 0.74 (0.43) Period from 8/7/2000++ to 12/31/2000...... 9.41 0.22 0.19 0.41 (0.22) Class C: Six months ended 6/30/2004+............... 10.09 0.16 (0.19) (0.03) (0.16) Year ended 12/31/2003..................... 10.28 0.27 0.11 0.38 (0.27) Year ended 12/31/2002..................... 9.86 0.37 0.45 0.82 (0.37) Year ended 12/31/2001..................... 9.60 0.43 0.31 0.74 (0.43) Period from 8/7/2000++ to 12/31/2000...... 9.41 0.22 0.19 0.41 (0.22) Class K: Six months ended 6/30/2004+............... 10.10 0.18 (0.19) (0.01) (0.18) Year ended 12/31/2003..................... 10.29 0.31 0.11 0.42 (0.31) Year ended 12/31/2002..................... 9.87 0.40 0.45 0.85 (0.40) Period from 5/15/2001++ to 12/31/2001..... 9.68 0.28 0.24 0.52 (0.28) The Guardian Low Duration Bond Fund Class A: Six months ended 6/30/2004+............... 10.02 0.11 (0.09) 0.02 (0.11) Period from 7/30/2003++ to 12/31/2003..... 10.00 0.08 0.02 0.10 (0.08) Class B: Six months ended 6/30/2004+............... 10.02 0.07 (0.09) (0.02) (0.07) Period from 7/30/2003++ to 12/31/2003..... 10.00 0.05 0.02 0.07 (0.05) Class C: Six months ended 6/30/2004+............... 10.02 0.07 (0.09) (0.02) (0.07) Period from 7/30/2003++ to 12/31/2003..... 10.00 0.05 0.02 0.07 (0.05) Class K: Six months ended 6/30/2004+............... 10.02 0.09 (0.09) 0.00 (0.09) Period from 7/30/2003++ to 12/31/2003..... 10.00 0.06 0.02 0.08 (0.06) The Guardian High Yield Bond Fund Class A: Six months ended 6/30/2004+............... 7.45 0.27 (0.18) 0.09 (0.27) Year ended 12/31/2003..................... 6.69 0.54 0.76 1.30 (0.54) Year ended 12/31/2002..................... 7.19 0.55 (0.50) 0.05 (0.55) Year ended 12/31/2001..................... 7.66 0.69 (0.47) 0.22 (0.69) Year ended 12/31/2000..................... 8.98 0.77 (1.32) (0.55) (0.77) Year ended 12/31/1999..................... 9.84 0.78 (0.84) (0.06) (0.78) Class B: Six months ended 6/30/2004+............... 7.45 0.24 (0.18) 0.06 (0.24) Year ended 12/31/2003..................... 6.69 0.48 0.76 1.24 (0.48) Year ended 12/31/2002..................... 7.18 0.50 (0.49) 0.01 (0.50) Year ended 12/31/2001..................... 7.66 0.64 (0.48) 0.16 (0.64) Year ended 12/31/2000..................... 8.97 0.68 (1.31) (0.63) (0.68) Year ended 12/31/1999..................... 9.83 0.67 (0.84) (0.17) (0.67) Class C: Six months ended 6/30/2004+............... 7.45 0.24 (0.18) 0.06 (0.24) Year ended 12/31/2003..................... 6.69 0.48 0.76 1.24 (0.48) Year ended 12/31/2002..................... 7.18 0.50 (0.49) 0.01 (0.50) Year ended 12/31/2001..................... 7.65 0.64 (0.47) 0.17 (0.64) Period from 8/7/2000++ to 12/31/2000...... 8.47 0.28 (0.82) (0.54) (0.28) Class K: Six months ended 6/30/2004+............... 7.45 0.26 (0.17) 0.09 (0.26) Year ended 12/31/2003..................... 6.69 0.51 0.76 1.27 (0.51) Year ended 12/31/2002..................... 7.19 0.53 (0.50) 0.03 (0.53) Period from 5/15/2001++ to 12/31/2001..... 7.68 0.39 (0.49) (0.10) (0.39)
+Unaudited. ++Commencement of operations. - -------------------------------------------------------------------------------- 82
Distributions from Ratios/Supplemental Data Net Realized ------------------------------------------------------------------------------------ Gain on Expenses Net Investments Net Asset Net Assets, (excluding Investment and Foreign Value, End of Expenses interest expense) Expenses Income Portfolio Currency Related End of Total Period to Average to average Subsidized to Average Turnover Transactions Period Return* (000's Omitted) Net Assets(a)(b) Net Assets(a) by GIS Net Assets Rate - ---------------- --------- ------- --------------- ---------------- ----------------- ---------- ---------- --------- $(0.04) $ 9.86 0.01%(c) $122,642 0.85%(d) 0.85%(d) 0.14%(d) 3.90%(d) 97% (0.30) 10.09 4.53 143,536 0.85 0.85 0.11 3.40 257 (0.03) 10.28 9.25 170,658 0.85 0.85 0.08 4.37 275 (0.05) 9.86 8.55 144,900 0.86 0.85 0.09 5.11 414 -- 9.61 9.81 124,805 0.85 0.85 0.09 6.41 344 (0.03) 9.33 (1.02) 139,661 0.81 0.80 0.13 5.49 271 (0.04) 9.86 (0.36)(c) 17,021 1.60(d) 1.60(d) 0.29(d) 3.15(d) 97 (0.30) 10.09 3.75 18,374 1.60 1.60 0.27 2.65 257 (0.03) 10.28 8.43 19,308 1.60 1.60 0.27 3.58 275 (0.05) 9.86 7.86 13,036 1.61 1.60 0.31 4.31 414 -- 9.60 4.40 (c) 8,493 1.60(d) 1.60(d) 0.34(d) 5.78(d) 344 (0.04) 9.86 (0.36)(c) 11,099 1.60(d) 1.60(d) 0.34(d) 3.15(d) 97 (0.30) 10.09 3.75 11,206 1.60 1.60 0.35 2.66 257 (0.03) 10.28 8.44 10,753 1.60 1.60 0.36 3.64 275 (0.05) 9.86 7.85 9,090 1.61 1.60 0.36 4.36 414 -- 9.60 4.39 (c) 8,356 1.60(d) 1.60(d) 0.34(d) 5.78(d) 344 (0.04) 9.87 (0.19)(c) 10,119 1.25(d) 1.25(d) 0.07(d) 3.50(d) 97 (0.30) 10.10 4.11 9,820 1.25 1.25 0.05 3.00 257 (0.03) 10.29 8.81 9,213 1.25 1.25 0.03 4.00 275 (0.05) 9.87 5.43 (c) 8,436 1.26(d) 1.25(d) 0.08(d) 4.48(d) 414 -- 9.93 0.21 (c) 8,976 0.80(d) -- 0.75(d) 2.24(d) 24 -- 10.02 0.99 (c) 8,457 0.80(d) -- 1.20(d) 1.87(d) 97 -- 9.93 (0.16)(c) 8,032 1.55(d) -- 0.77(d) 1.49(d) 24 -- 10.02 0.67 (c) 7,743 1.55(d) -- 1.20(d) 1.11(d) 97 -- 9.93 (0.16)(c) 7,733 1.55(d) -- 0.78(d) 1.49(d) 24 -- 10.02 0.67 (c) 7,611 1.55(d) -- 1.21(d) 1.11(d) 97 -- 9.93 0.01 (c) 7,610 1.20(d) -- 0.43(d) 1.84(d) 24 -- 10.02 0.82 (c) 7,565 1.20(d) -- 0.97(d) 1.46(d) 97 -- 7.27 1.23 (c) 42,575 0.85(d) -- 0.40(d) 7.40(d) 49 -- 7.45 20.11 42,589 0.85 -- 0.42 7.59 153 -- 6.69 0.96 33,894 0.85 -- 0.45 8.17 69 -- 7.19 2.87 33,797 0.85 -- 0.47 9.21 141 -- 7.66 (6.53) 38,646 0.85 -- 0.38 9.03 163 (0.02) 8.98 (0.63) 54,178 0.75 -- 0.40 8.34 152 -- 7.27 0.86 (c) 9,892 1.60(d) -- 0.64(d) 6.64(d) 49 -- 7.45 19.22 10,018 1.60 -- 0.72 6.85 153 -- 6.69 0.35 8,336 1.60 -- 0.77 7.42 69 -- 7.18 1.96 8,182 1.60 -- 0.78 8.42 141 -- 7.66 (7.32) 7,567 1.74 -- 0.77 8.37 163 (0.02) 8.97 (1.78) 3,184 1.87 -- 1.00 7.22 152 -- 7.27 0.86 (c) 9,441 1.60(d) -- 0.63(d) 6.65(d) 49 -- 7.45 19.22 9,316 1.60 -- 0.71 6.85 153 -- 6.69 0.35 7,710 1.60 -- 0.77 7.42 69 -- 7.18 2.09 7,657 1.60 -- 0.71 8.43 141 -- 7.65 (6.42)(c) 7,491 1.60(d) -- 0.63(d) 8.74(d) 163 -- 7.28 1.17 (c) 9,843 1.25(d) -- 0.31(d) 7.00(d) 49 -- 7.45 19.63 9,581 1.25 -- 0.33 7.20 153 -- 6.69 0.55 7,944 1.25 -- 0.35 7.77 69 -- 7.19 (1.31)(c) 7,893 1.25(d) -- 0.41(d) 8.36(d) 141
* Excludes the effect of sales load. (a)After expenses subsidized by GIS. (b)Expense ratio includes interest expense associated with reverse repurchase agreements. (c)Not annualized. (d)Annualized. - -------------------------------------------------------------------------------- 83 .. The Park Avenue Portfolio Financial Highlights (Continued) Selected data for a share of beneficial interest outstanding throughout the periods indicated:
Net Realized & Unrealized Gain/(Loss) on Investments Increase/ Net Asset and Foreign (Decrease) Dividends Value, Net Currency from from Net Beginning Investment Related Investment Investment of Period Income Transactions Operations Income --------- ---------- -------------- ---------- ---------- The Guardian Tax-Exempt Fund Class A: Six months ended 6/30/2004+............... $10.31 $ 0.17 $(0.32) $(0.15) $ (0.17) Year ended 12/31/2003..................... 10.51 0.37 0.18 0.55 (0.37) Year ended 12/31/2002..................... 10.09 0.40 0.61 1.01 (0.40) Year ended 12/31/2001..................... 10.10 0.41 0.06 0.47 (0.41) Year ended 12/31/2000..................... 9.40 0.43 0.70 1.13 (0.43) Year ended 12/31/1999..................... 10.13 0.40 (0.73) (0.33) (0.40) Class C: Six months ended 6/30/2004+............... 10.31 0.13 (0.32) (0.19) (0.13) Year ended 12/31/2003..................... 10.51 0.29 0.18 0.47 (0.29) Year ended 12/31/2002..................... 10.09 0.32 0.61 0.93 (0.32) Year ended 12/31/2001..................... 10.10 0.34 0.06 0.40 (0.34) Period from 8/7/2000++ to 12/31/2000...... 9.77 0.14 0.33 0.47 (0.14) The Guardian Cash Management Fund Class A: Six months ended 6/30/2004+............... 1.000 0.001 -- -- (0.001) Year ended 12/31/2003..................... 1.000 0.004 -- -- (0.004) Year ended 12/31/2002..................... 1.000 0.009 -- -- (0.009) Year ended 12/31/2001..................... 1.000 0.032 -- -- (0.032) Year ended 12/31/2000..................... 1.000 0.056 -- -- (0.056) Year ended 12/31/1999..................... 1.000 0.044 -- -- (0.044) Class B: Six months ended 6/30/2004+............... 1.000 0.001 -- -- (0.001) Year ended 12/31/2003..................... 1.000 0.002 -- -- (0.002) Year ended 12/31/2002..................... 1.000 0.002 -- -- (0.002) Year ended 12/31/2001..................... 1.000 0.025 -- -- (0.025) Year ended 12/31/2000..................... 1.000 0.052 -- -- (0.052) Year ended 12/31/1999..................... 1.000 0.044 -- -- (0.044) Class C: Six months ended 6/30/2004+............... 1.000 0.001 -- -- (0.001) Year ended 12/31/2003..................... 1.000 0.002 -- -- (0.002) Year ended 12/31/2002..................... 1.000 0.002 -- -- (0.002) Year ended 12/31/2001..................... 1.000 0.025 -- -- (0.025) Period from 8/7/2000++ to 12/31/2000...... 1.000 0.020 -- -- (0.020) Class K: Six months ended 6/30/2004+............... 1.000 0.001 -- -- (0.001) Year ended 12/31/2003..................... 1.000 0.002 -- -- (0.002) Year ended 12/31/2002..................... 1.000 0.005 -- -- (0.005) Period from 5/15/2001++ to 12/31/2001..... 1.000 0.013 -- -- (0.013)
+Unaudited. ++Commencement of operations. - -------------------------------------------------------------------------------- 84
Distributions from Ratios/Supplemental Data Net Realized ---------------------------------------------------------------- Gain on Net Investments Net Asset Net Assets, Investment and Foreign Value, End of Expenses Expenses Income Portfolio Currency Related End of Total Period to Average Subsidized to Average Turnover Transactions Period Return* (000's Omitted) Net Assets(a) by GIS Net Assets Rate - ---------------- --------- ------- --------------- ------------- ---------- ---------- --------- $(0.00)(b) $ 9.99 (1.39)%(c) $ 77,756 0.88%(d)(e) 0.12%(e) 3.40%(e) 94% (0.38) 10.31 5.34 80,025 0.89(d) 0.09 3.52 68 (0.19) 10.51 10.20 113,852 0.87(d) 0.06 3.85 99 (0.07) 10.09 4.78 107,676 0.91(d) 0.09 4.03 181 -- 10.10 12.29 97,185 0.88(d) 0.07 4.43 124 (0.00)(b) 9.40 (3.29) 97,908 0.86(d) 0.08 4.11 144 (0.00)(b) 9.99 (1.76)(c) 10,191 1.63(d)(e) 0.36(e) 2.65(e) 94 (0.38) 10.31 4.54 10,553 1.64(d) 0.36 2.77 68 (0.19) 10.51 9.37 9,741 1.62(d) 0.37 3.11 99 (0.07) 10.09 3.99 8,783 1.66(d) 0.37 3.28 181 -- 10.10 4.87 (c) 8,391 1.65(d)(e) 0.31(e) 3.62(e) 124 -- 1.000 0.13 (c) 469,517 0.85(e) 0.06(e) 0.26(e) -- -- 1.000 0.37 529,321 0.85 0.05 0.38 -- -- 1.000 0.95 658,159 0.85 0.02 0.94 -- -- 1.000 3.27 606,045 0.85 0.04 3.13 -- -- 1.000 5.69 462,183 0.85 0.07 5.57 -- -- 1.000 4.45 390,106 0.85 0.09 4.41 -- -- 1.000 0.13 (c) 9,929 1.60(e) 0.23(e) 0.26(e) -- -- 1.000 0.21 12,498 1.60 0.16 0.21 -- -- 1.000 0.23 18,485 1.60 0.37 0.22 -- -- 1.000 2.48 15,685 1.60 0.12 2.37 -- -- 1.000 5.34 11,860 1.14 0.63 5.25 -- -- 1.000 4.45 13,782 0.85 0.93 4.41 -- -- 1.000 0.13 (c) 8,622 1.60(e) 0.06(e) 0.26(e) -- -- 1.000 0.21 9,086 1.60 0.05 0.21 -- -- 1.000 0.22 9,330 1.60 0.25 0.22 -- -- 1.000 2.48 8,492 1.60 0.04 2.47 -- -- 1.000 2.03 (c) 8,193 1.60(e) 0.13(e) 5.06(e) -- -- 1.000 0.08 (c) 9,338 1.25(e) -- 0.16 -- -- 1.000 0.18 9,682 1.25 -- 0.18 -- -- 1.000 0.55 8,500 1.25 -- 0.54 -- -- 1.000 1.26 (c) 8,125 1.25(e) 0.01(e) 1.99(e) --
* Excludes the effect of sales load. (a)After expenses subsidized by GIS. (b)Rounds to less than $0.01. (c)Not annualized. (d)Before offset of custody credits. Including the custody credits in Class A, the expense ratio is 0.80% for 1999 and 0.85% for 2000, 2001, 2002, 2003 and 6/30/2004; in Class C the expense ratio is 1.60% for 2000, 2001, 2002, 2003 and 6/30/2004. (e)Annualized. - -------------------------------------------------------------------------------- 85 .. Trustees Dennis J. Manning, CLU, ChFC -- Chair Frank J. Fabozzi, Ph.D. Arthur V. Ferrara, CLU Leo R. Futia, CLU William W. Hewitt, Jr Sidney I. Lirtzman, Ph.D. Carl W. Schafer Robert G. Smith, Ph.D. .. Officers Thomas G. Sorell -- President Joseph A. Caruso Howard W. Chin Robert J. Crimmins, Jr. Richard A. Cumiskey Richard A. Goldman Alexander M. Grant, Jr. Edward H. Hocknell Jonathan C. Jankus Stewart M. Johnson Peter J. Liebst R. Robin Menzies Nydia Morrison John B. Murphy Karen L. Olvany Frank L. Pepe Richard T. Potter, Jr. Robert A. Reale Donald P. Sullivan, Jr. Mathew P. Ziehl Shares of the Funds are not deposits or obligations of, or guaranteed or endorsed by, any bank or depository institution, nor are they federally insured by the Federal Deposit Insurance Corporation, The Federal Reserve Board, the National Credit Union Association or any other agency. They involve investment risk, including possible loss of principal amount invested. This report is authorized for distribution to the public only when accompanied or preceded by a current prospectus for the funds which comprise The Park Avenue Portfolio. .. Investment Adviser & Distributor Guardian Investor Services LLC 7 Hanover Square New York, New York 10004 .. Custodian of Assets State Street Bank and Trust Company Custody Division 1776 Heritage Drive North Quincy, Massachusetts 02171 .. Shareholder Servicing Agent, Transfer Agent & Dividend Paying Agent for State Street Bank and Trust Company Boston Financial Data Services Post Office Box 219611 Kansas City, Missouri 64121-9611 .. Independent Auditors Ernst & Young LLP 200 Clarendon Street Boston, MA 02116 .. Proxy Voting Policies and Procedures A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities, as well as information regarding how each Fund voted proxies relating to portfolio securities during the 12-month period ended June 30, 2004, is available without charge upon request by calling 800-221-3253 or by logging on to www.guardianinvestor.com or the Securities and Exchange Commission's website at www.sec.gov. [LOGO] Guardian Guardian Investor Services LLC 7 Hanover Square New York, New York 10004 PRSRT STANDARD U.S. POSTAGE PAID [LOGO] Guardian BOWNE FULFILLMENT SOLUTIONS Guardian Investor Services LLC 7 Hanover Square New York, NY 10004
EB 011566 (6/04) ITEM 2. CODE OF ETHICS. Not applicable for semiannual reports. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT Not applicable for semiannual reports. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable for semiannual reports. ITEM 5. AUDIT COMMITTE OF LISTED REGISTRANTS. Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS Not applicable. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASES. Not applicable. ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. None. ITEM 10. CONTROLS AND PROCEDURES. a) The registrant's certifying officers have evaluated the registrant's disclosure controls and procedures within 90 days of this filing and have concluded that the registrant's disclosure controls and procedures were effective, as of that date, in ensuring that information required to be disclosed by the registrant in this Form N-CSR was recorded, processed, summarized, and reported timely. (b) The registrant's certifying officers are aware of no changes in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 11. EXHIBITS. (a)(1) Not applicable. (a)(2) Separate certifications by the registrant's certifying officers, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and required by Rule 30a-2(a) under the Investment Company Act of 1940, are attached. (a)(3) Not applicable. (b) A certification by the registrant's certifying officers, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and required by Rule 30a-2(b) under the Investment Company Act of 1940, is attached. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. The Park Avenue Portfolio By: /s/ Thomas G. Sorell ---------------------------- Thomas G. Sorell President of The Park Avenue Portfolio Date: August 27, 2004 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ Thomas G. Sorell ---------------------------- Thomas G. Sorell President of The Park Avenue Portfolio Date: August 27, 2004 By: /s/ Frank L. Pepe ---------------------------- Frank L. Pepe Vice President and Treasurer of The Park Avenue Portfolio Date: August 27, 2004 EX-99.CERT 2 dex99cert.txt CERTIFICATONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Thomas G. Sorell, certify that: 1. I have reviewed this report on Form N-CSR of The Park Avenue Portfolio; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-2(C) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: August 27, 2004 /s/ Thomas G. Sorell ----------------------------- Thomas G. Sorell President of The Park Avenue Portfolio CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Frank L. Pepe, certify that: 1. I have reviewed this report on Form N-CSR of The Park Avenue Portfolio; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-2(C) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: August 27, 2004 /s/ Frank L. Pepe ----------------------------- Frank L. Pepe Vice President and Treasurer of The Park Avenue Portfolio EX-99.906CERT 3 dex99906cert.txt CERTIFICATION UNDER SECTION 906 OF THE SARBANES-OXLEY ACT CERTIFICATION UNDER SECTION 906 OF SARBANES-OXLEY ACT OF 2002 Name of Issuer: The Park Avenue Portfolio In connection with the Report on Form N-CSR for the above named issuer, the undersigned hereby certifies, to the best of his knowledge, that: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer. Date: August 27, 2004 /s/ Thomas G. Sorell ------------------------------------ Thomas G. Sorell President of The Park Avenue Portfolio Date: August 27, 2004 /s/ Frank L. Pepe ------------------------------------ Frank L. Pepe Vice President and Treasurer of The Park Avenue Portfolio -----END PRIVACY-ENHANCED MESSAGE-----