-----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, GKoumHYxyVyj1ML7QuIRFolDawzHU5VTCNgn8fXJUlV0WQXcCkZPNgIFXHvOiMR0 7XaAfMvho9QK8GjNmCpN5Q== 0001193125-03-058045.txt : 20031006 0001193125-03-058045.hdr.sgml : 20031006 20031006082444 ACCESSION NUMBER: 0001193125-03-058045 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20030731 FILED AS OF DATE: 20031006 EFFECTIVENESS DATE: 20031006 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PACIFIC CAPITAL FUNDS CENTRAL INDEX KEY: 0000896647 STATE OF INCORPORATION: MA FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-07454 FILM NUMBER: 03928862 BUSINESS ADDRESS: STREET 1: 3435 STELZER RD STREET 2: STE 1000 CITY: COLUMBUS STATE: OH ZIP: 43219 BUSINESS PHONE: 6144708000 N-CSR 1 dncsr.txt PACIFIC CAPITAL FUNDS (N-CSR) ----------------------------------- OMB APPROVAL ----------------------------------- OMB Number: 3235-0570 Expires: November 30, 2005 Estimated average burden hours per response. . . . . . . 5.0 ----------------------------------- 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 811-07454 --------- Pacific Capital Funds - ------------------------------------------------------------------------------ (Exact name of registrant as specified in charter) 111 South King Street Honolulu, HI 96813 - ------------------------------------------------------------------------------ (Address of principal executive offices) (Zip code) BISYS Fund Services, 3435 Stelzer Road Columbus, Ohio 43219 - ------------------------------------------------------------------------------ (Name and address of agent for service) Registrant's telephone number, including area code: 614-470-8000 ------------ Date of fiscal year end: July 31, 2003 ------------- Date of reporting period: July 31, 2003 ------------- Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. Item 1. Reports to Stockholders. Include a copy of the report transmitted to stockholders pursuant to Rule 30e-1 under the Act (17 CFR 270.30e-1). Pacific Capital Funds ------------------------------------------------------ Annual Report As of July 31, 2003 Pacific Capital Funds MANAGED BY THE ASSET MANAGEMENT GROUP OF [Graphic] Bank of Hawaii MUTUAL FUNDS: . ARE NOT FDIC INSURED . HAVE NO BANK GUARANTEE . MAY LOSE VALUE Table of Contents Letter to Shareholders Page 1 Fund Performance Review Page 3 Statements of Assets and Liabilities Page 29 Statements of Operations Page 32 Statements of Changes in Net Assets Page 35 Schedules of Portfolio Investments Page 39 Notes to Financial Statements Page 65 Financial Highlights Page 78 Report of Independent Auditors Page 89 Glossary of Terms Dow Jones Industrial Average is a price-weighted average based on the price-only performance of 30 blue chip stocks (The average is computed by adding the prices of the 30 stocks and dividing by a denominator, which has been adjusted over the years for stocks splits, stock dividends and substitutions of stocks). Gross Domestic Product is the measure of the market value of the goods and services produced by labor and property in the United States. Lehman Brothers Government/Credit Bond Index is composed of all bonds that are investment-grade rated Baa or higher by Moody's or BBB or higher by S&P, if unrated by Moody's. Issues must have at least one year to maturity. Total return comprises price appreciation/depreciation and income as a percentage of the original investment. Lehman Brothers 5-Year Municipal Bond Index tracks bonds with maturity range of four to six years. Lehman Brothers Municipal Bond Index is a broad benchmark for the tax-exempt bond market. The bonds tracked by this index must have a minimum credit rating of at least Baa. Merrill Lynch 1-5 Year U.S. Treasury Index is comprised of approximately 66 issues of U.S. Treasury securities maturing between one and five years Merrill Lynch Corporate/Government Master Index consists of issues which include corporate debt obligations rated BBB or better and publicly issued, non-convertible domestic debt of the U.S. government or any agency thereof. These quality parameters are based on composites of ratings assigned by Standard and Poor's Ratings Group and Moody's Investors Service, Inc. Only notes and bonds with a minimum maturity of one year are included. Merrill Lynch One-Year Treasury Index consists of yields on Treasury securities at a constant, the fixed maturities are constructed by the Treasury department, and are based on the most actively traded marketable Treasury securities. Yields on these issues are based on composite quotes reported by U.S. Government securities dealers to the Federal Reserve Bank of New York. To obtain the constant maturity yields, personnel at Treasury construct a yield curve each business day, and yield values are then read from the curve at fixed maturities. Morgan Stanley Capital International (MSCI), Europe, Australasia and Far East (EAFE) Index is comprised of a sample of companies representative of the market structure of 20 European and Pacific Basin countries. Morgan Stanley Capital International (MSCI), All Country (AC) Far East Free Index (excluding Japan) represents the 48 developed and emerging markets around the world that collectively comprise virtually all of the foreign equity stock markets. Nasdaq Composite Index is a market price only index that tracks the performance of domestic common stocks traded on the regular Nasdaq market as well as National Market System traded foreign common stocks and American Depository Receipts. Price-to-Earnings Ratio (P/E) - A valuation ratio of a company's current share price to its per-share earnings. A high P/E means high projected earnings in the future. This ratio gives an investor an idea of how much they are paying for a particular company's earning power. The Russell Universe - In 1984, Russell created the Russell family of stock indices as part of a more accurate and comprehensive system for evaluating the performance of investment managers. Russell now maintains 21 U.S. stock indices and has launched similar broad-market and style indices in Canada and Japan. Today, more than $214 billion is invested in funds modeling Russell's U.S. indices, and more than $1 trillion in funds is benchmarked against the global family of Russell indices. Russell 1000 Index measures the performance of the 1,000 largest companies in the Russell 3000 Index, which represents approximately 90% of the total market capitalization of the Russell 3000 Index. Russell 1000 Growth Index measures the performance of 1,000 securities found in the Russell universe with higher price-to-book ratios and higher forecasted growth values. Russell 2000(R) Growth Index tracks the performance of domestically traded common stocks of small- to mid-sized companies with higher price-to-book ratios and higher forecasted growth values. Russell 1000 Value Index measures the performance of the 1,000 largest of the 3,000 largest U.S.-domiciled companies (based on total market capitalization) with lower price-to-book ratios and lower forecasted growth values. Russell 2000 Value Index measures the performance of those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values. S&P 500 Stock Index is an unmanaged index of 500 selected common stocks, most of which are listed on the New York Stock Exchange, and is a measure of the U.S. stock market as a whole. Yield Curve - a graph of bond yields available at a given moment in time, with the dividend yield rising along the vertical line and bond durations moving outward along the horizontal line. A typical yield curve is rising, or positive, because bonds of longer duration pay more interest. Letter to Shareholders Dear Shareholders: The 12-month period between August 1, 2002 and July 31, 2003 was characterized by two very different environments. The economy struggled during the first eight months of the period, causing stocks to fall and helping bonds gain. The situation reversed itself during the final four months, however, as the economy showed signs of strength, the stock market surged and bonds lost ground. The Dow Jones Industrial Average/1/ gained 5.69% during the period, while the S&P 500 Index/1/ returned 10.64%. Economic Recap The economy began the period with relatively healthy growth, largely due to a great deal of stimulus from the Federal Reserve Board (the "Fed"). But a number of factors combined to drag on the economy, including rising oil prices, a strike by west-coast dockworkers and low corporate spending. Fears about the impending war with Iraq, as well as other geopolitical tensions, weighed heavily on business spending, as international instability clouded corporate leaders' outlook and caused them to delay spending initiatives. Low interest rates led to record levels of mortgage refinancing during this time. That refinancing activity boosted consumers' buying power, helping to prop up the economy. Even so, Gross Domestic Product/1/ (GDP) grew just 1.4% during the fourth calendar quarter of 2002. The Fed lowered short-term interest rates by 0.50 percentage points in November, marking the 12th time the Board had lowered interest rates during this easing cycle. The difficult economic environment continued into March, as the run-up to war cast a pall over business activity. Economic growth appeared to gain strength in the spring, however, after the invasion of Iraq cleared up the business outlook. The Fed became concerned during the spring about the possibility of deflation, a destructive economic environment characterized by falling prices. The Fed lowered short-term interest rates on June 25, from 1.25% to 1.00%, to reduce the risk of deflation. Stock Market Recap Stocks suffered during most of the period due to the cloudy economic outlook. Better-than-expected earnings reports in August helped push stocks higher, but the stock market soon slumped as it became clear that the economy was stagnating. The market repeated that cycle in the fall: Stocks rose in late October and early November when corporate profits beat expectations, but then fell due to the economic uncertainty that resulted from the run-up to war. The stock market then stagnated during most of the first calendar quarter of 2003. Stocks surged following the Iraq invasion. Investors anticipating an economic recovery bid up shares of highly cyclical stocks, particularly technology and biotechnology shares. Shares of small companies outperformed large stocks during that period. The rally lasted through June, and stocks traded in a fairly tight range during July as investors tried to determine the economy's strength. Bond Market Recap Fixed-income investments benefited from falling interest rates during the first ten months of the period. Investors wary of the struggling stock market sought bonds for their stability, pushing yields down and prices up. Bonds also benefited from the weak economy and the Fed's easing monetary policy, which especially boosted prices on short-term securities. Yields on Treasury bonds reached 40-year lows in that environment. Bond yields rose dramatically beginning in mid-June. Investors sold fixed-income securities out of concern that a stronger economy would lead to higher interest rates. Investors also shifted money from bonds to stocks, as bonds' very low yields looked less attractive than potential returns in the rising stock market. Yields on long-term bonds sustained the greatest increases in that environment. Short-term bonds' yields remained relatively stable, anchored by the Fed's indications that it would keep short-term interest rates low. Corporate bonds outperformed government bonds for the 12-month period, as investors prized the higher yields offered by corporate issues. /1/ See Glossary of Terms for additional information 1 Letter to Shareholders--continued Pacific Capital Funds Early in the period we positioned the Pacific Capital Equity Funds for an economic recovery. That strategy hurt returns prior to March, but boosted gains during the stock-market rally, as the Funds benefited from strong stock selection. We positioned the Pacific Capital Fixed-Income Funds defensively during the period, with durations shorter than those of their benchmarks. That strategy hurt relative performance until yields rose very late in the period. The Asset Management Group We instituted several changes during the period to enhance the management structure of the Pacific Capital Funds. First, we created our new Analytics and Risk Management Group in February. That group is comprised of officers who provide analytical support to the Funds' portfolio managers, to help the managers optimize the construction and risk profiles of their portfolios. The Analytics and Risk Management Group also analyzes the performance of the Funds to give managers detailed feedback on how various strategies contributed to returns. Next, we also implemented a team approach to managing the Funds, beginning on March 1, in which research analysts, trading and portfolio management all work together to support the investment process. That culmination of experience and ideas serves to improve efficiency and deliver consistent investment performance over time. In addition, we partnered with Chicago Equity Partners, a leading stock analysis firm, to provide additional resources to our research analysis team. Finally, we created our Investment Strategy Committee to provide our managers with a broad view of economic trends that could affect the Pacific Capital Funds. That committee is chaired by William Barton, Executive Vice President and Chief Investment Officer, who has 44 years of experience analyzing economic trends and their impact on financial markets. Thank you for your confidence in the Pacific Capital Funds. If you have any questions or would like a fund prospectus, please contact your registered investment consultant or call Pacific Capital Funds at (800) 258-9232. Sincerely, William Barton The Asset Management Group of Bank of Hawaii Executive Vice President Chief Investment Officer Howard Hodel The Asset Management Group of Bank of Hawaii Manager and Executive Vice President /1/ See Glossary of Terms page for additional information. NOTICE ABOUT DUPLICATE MAILINGS In order to reduce expenses of the Pacific Capital Funds incurred in connection with the mailing of prospectuses, prospectus supplements, semi-annual reports and annual reports to multiple shareholders at the same address, Pacific Capital Funds may in the future deliver one copy of a prospectus, prospectus supplement, semi-annual report or annual report to a single investor sharing a street address or post office box with other investors, provided that all such investors have the same last name or are believed to be members of the same family. This process, called "householding," will continue indefinitely unless you instruct us otherwise. If you share an address with another investor and wish to receive your own prospectus, prospectus supplements, semi-annual reports and annual reports, please call the Trust toll-free at (800) 258-9232. 2 Pacific Capital Growth Stock Fund The Equity Investment Team of The Asset Management Group of Bank of Hawaii Team members include Howard Hodel, Clyde Powers, Bill Carpenter, Teresa Yee, and Laughon Bryant. Mr. Hodel, Executive Vice President and Manager of the Adviser's registered investment unit, has served as head of Bank of Hawaii's Investment Services Group Analytics and Risk Management since January 2003. He previously served at Bank of America from 1994 to 2003 as the Managing Director of Market Risk Control Investments, and from 1987 to 1994 as Vice President in Corporate Finance. Mr. Powers, CFA, Vice President of the Adviser, joined the Adviser in 1997. He previously served as a Portfolio Manager for Amcore Investment Group from 1995 to 1997, and as Managing Director-Investment Operations for Union Capital Advisors from 1984 to 1995. Mr. Carpenter, Vice President of the Adviser, rejoined the Adviser in 1999. He previously served as a Small-Cap Analyst for Greenville Capital Management from 1996 to 1998, and as Portfolio Manager for First Hawaiian Bank's Trust Division from 1985 to 1995 and as the Risk Manager for Bank of Hawaii from 1980 to 1984. Ms. Yee, Vice President and Portfolio Manager of the Adviser, joined the Adviser in 1998. Previously she served as an Equity Analyst from 1993 to 1997 at CIBC Oppenheimer. Mr. Bryant, Assistant Vice President, has served the Adviser as a Securities Analyst since 1997. Previously, he served as Portfolio Manager from 1993 to 1997 in First Hawaiian Bank's Trust and Investment Division. How did the Fund perform compared to its benchmark? For the 12-month period ended July 31, 2003, the Fund returned 10.14% (Class A Shares without sales charge), trailing its benchmark, the Russell 1000 Growth Index/1/, at 11.64%. What were the major factors in the market that influenced the Fund's performance? The year ended July 31 was extremely volatile as investors focused on the impending war with Iraq, corporate malfeasance, a sputtering economy, and a Fed that couldn't force the economy higher despite cutting rates and providing ample liquidity. Near year-end however, consumer confidence improved, the job market started to stabilize, corporate America concluded their inventory liquidation, and capital spending showed signs of improving. Nasdaq/1/ was the best performing index for the period and information technology was the top sector. By the end of the period reported earnings were exceeding expectations, estimates for the balance of the year were raised, and the equity markets responded favorably. Good performance resulted from a slight overweight in technology and good equity selection. Throughout the year, we positioned the Fund for an improving economy by increasing the weights in information technology and the depressed financial sector. The Fund benefited from strong stock selection, including Sandisk, Express Scripts, Hispanic Broadcasting and Zimmer Holdings. The two sectors with negative returns for the period were energy and industrials.++/ / The Asset Management Group Fund Outlook The recent bear market was longer and deeper by historical standards than most other market declines. The market rally has surprised investors both in terms of breadth and magnitude and now may need to consolidate. However, we feel that the possibility for better conditions is on the horizon, supported by an improving economy, stronger reported earnings, ample liquidity, and unattractive alternatives. Therefore, at this time, we will maintain our overweight in economically sensitive sectors of the economy. /1/ See Glossary of Terms for additional information. ++ The portfolio composition is subject to change. 3 Pacific Capital Growth Stock Fund Fund Objective: The Fund, which seeks long-term growth of principal with a secondary objective of dividend income, primarily invests in shares of large, high-quality companies with two characteristics: above-average growth potential and exposure to large global markets. We seek to invest in such companies when their shares trade at attractive levels relative to their growth prospects. When appropriate, the Fund also may invest in shares of smaller firms that we believe demonstrate the potential for extraordinary growth. Growth of a $10,000 Investment [CHART] Class Y Shares Russell 1000 Standard and Class A Class B (No Sales Growth Poor's 500 Shares* Shares** Charge) (Index) Stock Index ------- -------- --------- ------------ ------------ 07/31/1993 $9,599 $10,000 $10,000 $10,000 $10,000 10,000 10,418 10,418 10,410 10,381 10,113 10,536 10,536 10,332 10,304 10,288 10,718 10,718 10,620 10,513 10,167 10,592 10,592 10,550 10,415 10,295 10,726 10,726 10,732 10,543 10,460 10,897 10,897 10,980 10,896 10,269 10,698 10,698 10,780 10,602 9,836 10,247 10,247 10,259 10,140 9,985 10,403 10,403 10,308 10,272 10,084 10,506 10,506 10,464 10,440 07/31/1994 9,923 10,338 10,338 10,154 10,182 10,181 10,607 10,607 10,502 10,519 10,503 10,942 10,942 11,087 10,947 10,247 10,675 10,675 10,936 10,683 10,393 10,827 10,827 11,194 10,928 10,093 10,514 10,516 10,836 10,527 10,170 10,595 10,598 11,017 10,680 10,440 10,877 10,891 11,252 10,958 10,687 11,134 11,151 11,724 11,383 10,942 11,400 11,419 12,066 11,720 11,210 11,679 11,700 12,330 12,061 11,547 12,030 12,044 12,760 12,538 07/31/1995 11,853 12,349 12,365 13,253 12,832 12,259 12,772 12,791 13,804 13,260 12,113 12,619 12,652 13,819 13,296 12,633 13,161 13,186 14,456 13,853 12,724 13,256 13,295 14,466 13,804 13,105 13,653 13,696 15,028 14,411 13,199 13,751 13,789 15,114 14,678 13,467 14,030 14,071 15,620 15,183 13,693 14,265 14,310 15,905 15,329 13,513 14,078 14,136 15,926 15,476 13,636 14,206 14,257 16,345 15,703 13,933 14,515 14,581 16,916 16,109 07/31/1996 13,927 14,509 14,578 16,939 16,175 13,272 13,827 13,885 15,946 15,455 13,513 14,078 14,140 16,358 15,783 14,349 14,949 15,017 17,549 16,669 14,473 15,078 15,150 17,655 17,126 15,620 16,272 16,366 18,980 18,426 15,146 15,779 15,861 18,609 18,065 16,119 16,793 16,895 19,914 19,187 16,087 16,759 16,865 19,779 19,342 15,311 15,951 16,044 18,709 18,538 16,609 17,304 17,416 19,951 19,644 17,471 18,201 18,321 21,391 20,850 07/31/1997 18,169 18,928 19,056 22,247 21,780 19,512 20,328 20,464 24,214 23,510 18,449 19,220 19,352 22,797 22,203 19,452 20,265 20,419 23,919 23,419 18,792 19,577 19,727 23,035 22,636 19,486 20,300 20,455 24,013 23,684 19,718 20,543 20,703 24,282 24,092 20,100 20,940 21,117 25,008 24,359 21,624 22,528 22,716 26,889 26,116 22,400 23,336 23,529 27,961 27,453 22,768 23,706 23,929 28,348 27,730 22,098 22,994 23,226 27,544 27,253 07/31/1998 23,465 24,405 24,673 29,231 28,360 23,333 24,268 24,549 29,037 28,058 18,995 19,748 19,986 24,679 24,001 20,678 21,460 21,737 26,575 25,539 21,848 22,679 23,005 28,711 27,616 23,623 24,514 24,866 30,895 29,290 26,734 27,711 28,143 33,681 30,978 27,755 28,759 29,229 35,659 32,273 26,153 27,089 27,551 34,030 31,270 28,084 29,070 29,591 35,822 32,521 27,174 28,104 28,637 35,868 33,781 26,467 27,368 27,896 34,766 32,983 07/31/1999 28,681 29,643 30,249 37,201 34,814 27,394 28,284 28,900 36,018 33,727 27,770 28,644 29,295 36,607 33,560 28,116 28,988 29,673 35,838 32,640 30,659 31,607 32,354 38,544 34,706 32,825 33,817 34,657 40,624 35,411 36,561 37,624 38,609 44,849 37,497 35,391 36,400 37,365 42,746 35,613 40,352 41,486 42,636 44,836 34,939 40,998 42,119 43,311 48,045 38,357 40,010 41,085 42,278 45,759 37,203 38,053 39,059 40,232 43,455 36,439 07/31/2000 41,482 42,562 43,880 46,748 37,338 39,788 40,768 42,067 44,799 36,754 42,490 43,533 44,956 48,855 39,037 40,171 41,127 42,510 44,234 36,976 39,828 40,747 42,151 42,141 36,820 35,452 36,253 37,533 35,929 33,917 35,385 36,176 37,456 34,792 34,083 34,814 35,575 36,862 37,196 35,292 30,198 30,849 32,000 30,881 32,074 26,830 27,326 28,382 27,521 30,042 29,845 30,419 31,633 31,001 32,377 29,736 30,304 31,520 30,545 32,594 07/31/2001 28,568 29,101 30,276 29,838 31,800 27,835 28,328 29,512 29,092 31,487 25,527 25,951 27,053 26,713 29,516 22,866 23,258 24,283 24,046 27,133 24,115 24,519 25,611 25,308 27,650 26,803 27,240 28,467 27,739 29,771 27,102 27,526 28,777 27,687 30,032 25,636 26,037 27,251 27,197 29,594 23,762 24,118 25,272 26,069 29,023 25,473 25,807 27,081 26,970 30,115 23,056 23,373 24,537 24,769 28,289 22,431 22,714 23,859 24,170 28,081 07/31/2002 20,693 20,938 22,021 21,934 26,080 18,738 18,962 19,958 20,728 24,047 18,846 19,048 20,071 20,790 24,205 17,163 17,329 18,262 18,634 21,575 18,493 18,675 19,703 20,343 23,473 19,199 19,363 20,467 21,448 24,855 17,842 17,988 19,025 19,966 23,394 17,407 17,558 18,573 19,482 22,781 17,299 17,415 18,431 19,392 22,439 17,543 17,673 18,714 19,753 22,657 18,982 19,076 20,240 21,214 24,524 19,851 19,964 21,173 22,273 25,816 07/31/2003 19,960 20,050 21,286 22,579 26,146 20,639 20,709 22,021 23,141 26,607 For performance purposes, the above graph has not been adjusted for CDSC charges. Average Annual Total Returns as of July 31, 2003
1 Year 5 Year 10 Year ------------------------------------------------------ Class A Shares* 5.70% -3.22% 7.51% ------------------------------------------------------ Class B Shares** 5.21% -3.21% 7.55% ------------------------------------------------------ Class Y Shares (No Sales Charge) 10.34% -2.15% 8.21% ------------------------------------------------------
*Reflects 4.00% Maximum Front-End Sales Charge. **Reflects Maximum Contingent Deferred Sales Charge of up to 5.00% (CDSC). The CDSC does not apply to performance over 6 years; therefore, the 10-year return does not reflect the CDSC, nor does the graph reflect the CDSC charges. Past performance is no guarantee of future results. Investment return and net asset value (NAV) will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than the original cost. The chart and table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The chart above represents a comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Fund's benchmark. The quoted performance of the Pacific Capital Growth Stock Fund includes the performance of certain common trust fund ("Commingled") accounts advised by The Asset Management Group of Bank of Hawaii and managed the same as the Fund in all material respects, for periods dating back to July 31, 1993, and prior to the Fund's commencement of operations on November 1, 1993, for the A Class, and on October 14, 1994, for the Y Class, as adjusted to reflect the expenses associated with the Fund. The Commingled accounts were not registered with the Securities and Exchange Commission under the Investment Company Act of 1940 and, therefore, were not subject to the investment restrictions imposed by law on registered mutual funds. If the Commingled accounts had been registered, the Commingled accounts' performance may have been adversely affected. Class B Shares were not in existence prior to March 2, 1998. Performance calculated for any period up to and through March 2, 1998, is based upon the performance of the Class A Shares, which does not reflect the higher 12b-1 fees or the contingent deferred sales charge (CDSC). Had the CDSC and higher 12b-1 fees been incorporated, total return figures may have been adversely affected. The performance of the Pacific Capital Growth Stock Fund is measured against the Russell 1000 Growth Index and the Standard & Poor's 500 stock Index. The Russell 1000 Growth Index measures the performance of 1,000 securities found in the Russell universe with higher price-to-book ratios and higher forecasted growth values and the Standard & Poor's 500 Stock Index measures the performance of the broad domestic stock universe. The index does not reflect the deduction of fees associated with a mutual fund, such as investment management and fund accounting fees. The Fund's performance reflects the deduction of fees for these value-added services. The Fund has changed its standardized benchmark from the S&P 500 Stock Index to the Russell 1000 Growth Index to provide a more appropriate market comparison for the Fund's performance. Investors cannot invest directly in an index, although they can invest in its underlying securities. 4 Pacific Capital Growth and Income Fund The Equity Investment Team of The Asset Management Group of Bank of Hawaii Team members include Howard Hodel, Clyde Powers, Bill Carpenter, Teresa Yee, and Laughon Bryant. Mr. Hodel, Executive Vice President and Manager of the Adviser's registered investment unit, has served as head of Bank of Hawaii's Investment Services Group Analytics and Risk Management since January 2003. He previously served at Bank of America from 1994 to 2003 as the Managing Director of Market Risk Control Investments, and from 1987 to 1994 as Vice President in Corporate Finance. Mr. Powers, CFA, Vice President of the Adviser, joined the Adviser in 1997. He previously served as a Portfolio Manager for Amcore Investment Group from 1995 to 1997, and as Managing Director--Investment Operations for Union Capital Advisors from 1984 to 1995. Mr. Carpenter, Vice President of the Adviser, rejoined the Adviser in 1999. He previously served as a Small-Cap Analyst for Greenville Capital Management from 1996 to 1998, and as Portfolio Manager for First Hawaiian Bank's Trust Division from 1985 to 1995 and as the Risk Manager for Bank of Hawaii from 1980 to 1984. Ms. Yee, Vice President and Portfolio Manager of the Adviser, joined the Adviser in 1998. Previously she served a an Equity Analyst from 1993 to 1997 at CIBC Oppenheimer. Mr. Bryant, Assistant Vice President, has served the Adviser as a Securities Analyst since 1997. Previously, he served as Portfolio Manager from 1993 to 1997 in First Hawaiian Bank's Trust and Investment Division. How did the Fund perform compared to its benchmark? For the 12-month period ended July 31, 2003, the Fund returned 8.31% (Class A Shares without sales charge), verses the S&P 500 Stock Index/1/ return of 10.64%. What were the major factors in the market that influenced the Fund's performance? The fiscal year has been very volatile with a host of fundamental and exogenous forces influencing market direction. The period began in selling mode as investors dumped stocks in the face of ongoing uncertainty with respect to the economy, Iraq, terrorism, and corporate malfeasance. After hitting a low on October 8, the market recovered some lost ground based on improving economic data as well as a reduction in short-term interest rates by the Federal Reserve Board. However, the rally was short-lived, and investors sold once again as confidence dipped with news of a possible west coast port shutdown and weaker than anticipated holiday retail sales. After a brief New Year's rally, the confluence of mounting geopolitical tension and anemic economic data created the "perfect storm" for the equity markets, which was characterized by another sell-off. This downdraft lasted until early March, at which time the market bounced off its lows due to news of the beginning of the long-awaited conflict in Iraq coupled with an improved earnings season for corporate America. The markets then went into rally mode for the rest of the spring up until the end of this reporting period (07/31/03) as investors began to discount a second half recovery based on continued improvement with respect to both economic data and corporate earnings. Throughout the reporting period, the Fund was positioned for an economic recovery, with heavier weightings in the more economically sensitive sectors of the market, including information technology, financials, health care, and consumer discretionary. Unfortunately, we were a few months early in our economic recovery call, which led to an underperformance for the first half of the reporting period. Once the economy responded earlier this year and continued to exhibit positive signals, the Fund's positioning started to pay-off with overall returns commensurate with the market for much of 2003.++ What major changes have occurred in the portfolio during the period covered by the report? The Fund has maintained a consistent approach to the market for the past year based on our top-down and bottom-up analysis. Our Chief Investment Officer, Bill Barton, and the equity management team have positioned the Fund around our outlook for a possible economic recovery in 2003, as we believe fiscal and monetary stimulus will serve to spark renewed and sustainable economic growth for the foreseeable future. We do, however, constantly review our outlook and will adjust the portfolio accordingly, if necessary. The Asset Management Group Fund Outlook The recent bear market was longer and deeper by historical standards than most other market declines. The market rally has surprised investors both in terms of breadth and magnitude and now may need to consolidate. However, we feel that the possibility for better conditions is on the horizon, supported by an improving economy, stronger reported earnings, ample liquidity, and unattractive alternatives. Therefore, at this time, we will maintain our overweight in economically sensitive sectors of the economy. ++ The portfolio composition is subject to change. /1/ See Glossary of Terms for additional information. 5 Pacific Capital Growth and Income Fund Fund Objective: The Fund seeks to provide long-term growth of principal with a secondary objective of current income by investing in a portfolio of large and medium-sized company shares broadly diversified across industries. We especially favor attractively valued stocks of companies we believe can deliver relatively strong growth within their respective market sectors. Growth of a $10,000 Investment [CHART] Class A Class B Class Y Shares Standard and Poor's Shares* Shares** (No Sales Charge) 500 Stock Index ------- -------- ----------------- ------------------- 07/31/1993 $ 9,600 $10,000 $10,000 $10,000 9,950 10,365 10,366 10,381 9,840 10,250 10,261 10,304 9,920 10,333 10,334 10,513 9,770 10,177 10,188 10,415 9,860 10,271 10,282 10,543 9,980 10,396 10,408 10,896 9,760 10,167 10,178 10,602 9,320 9,708 9,728 10,140 9,470 9,865 9,885 10,272 9,610 10,010 10,031 10,440 9,490 9,885 9,906 10,182 07/31/1994 9,760 10,167 10,188 10,519 10,170 10,594 10,627 10,947 9,910 10,323 10,355 10,683 9,990 10,406 10,439 10,928 9,752 10,158 10,190 10,527 9,882 10,294 10,328 10,680 10,154 10,577 10,601 10,958 10,491 10,929 10,956 11,383 10,641 11,084 11,124 11,720 10,935 11,390 11,434 12,061 11,260 11,730 11,766 12,538 11,317 11,788 11,838 12,832 07/31/1995 11,632 12,116 12,159 13,260 11,582 12,064 12,109 13,296 11,972 12,471 12,520 13,853 11,899 12,395 12,457 13,804 12,313 12,826 12,896 14,411 12,482 13,002 13,064 14,678 12,808 13,342 13,406 15,183 12,980 13,521 13,586 15,329 13,152 13,700 13,780 15,476 13,321 13,876 13,957 15,703 13,603 14,170 14,256 16,109 13,719 14,291 14,380 16,175 07/31/1996 13,022 13,564 13,652 15,455 13,293 13,847 13,939 15,783 14,058 14,643 14,733 16,669 14,142 14,732 14,835 17,126 15,175 15,807 15,920 18,426 14,777 15,393 15,504 18,065 15,811 16,469 16,588 19,187 15,648 16,300 16,420 19,342 14,982 15,606 15,724 18,538 15,883 16,545 16,682 19,644 16,890 17,594 17,743 20,850 17,681 18,418 18,575 21,780 07/31/1997 19,219 20,020 20,201 23,510 18,314 19,077 19,258 22,203 19,242 20,043 20,237 23,419 18,651 19,428 19,605 22,636 19,422 20,231 20,419 23,684 19,740 20,562 20,756 24,092 20,131 20,970 21,180 24,359 21,585 22,484 22,712 26,116 22,322 23,239 23,492 27,453 22,457 23,379 23,646 27,730 21,777 22,653 22,928 27,253 23,012 23,914 24,229 28,360 07/31/1998 22,890 23,786 24,113 28,058 18,880 19,572 19,865 24,001 20,436 21,176 21,494 25,539 21,843 22,615 22,975 27,616 23,373 24,181 24,594 29,290 25,371 26,234 26,696 30,978 26,087 26,966 27,464 32,273 24,586 25,402 25,891 31,270 26,101 26,937 27,486 32,521 26,349 27,181 27,762 33,781 25,702 26,492 27,080 32,983 27,561 28,401 29,038 34,814 07/31/1999 26,019 26,779 27,414 33,727 25,440 26,177 26,810 33,560 25,330 26,047 26,714 32,640 27,327 28,085 28,818 34,706 28,773 29,549 30,351 35,411 31,263 32,082 32,990 37,497 30,320 31,098 31,997 35,613 31,876 32,673 33,653 34,939 34,516 35,364 36,452 38,357 33,290 34,084 35,160 37,203 31,467 32,197 33,239 36,439 33,809 34,577 35,723 37,338 07/31/2000 33,526 34,265 35,425 36,754 35,695 36,464 37,744 39,037 32,944 33,641 34,845 36,976 32,489 33,149 34,349 36,820 29,251 29,834 30,953 33,917 29,949 30,512 31,689 34,083 31,281 31,851 33,095 35,292 26,773 27,241 28,348 32,074 24,328 24,754 25,754 30,042 26,408 26,858 27,969 32,377 26,573 26,992 28,142 32,594 25,770 26,169 27,297 31,800 07/31/2001 25,350 25,710 26,854 31,487 23,543 23,874 24,951 29,516 21,280 21,559 22,568 27,133 21,992 22,267 23,313 27,650 24,091 24,390 25,563 29,771 24,145 24,429 25,624 30,032 23,105 23,357 24,528 29,594 22,174 22,401 23,527 29,023 23,342 23,568 24,778 30,115 21,736 21,942 23,080 28,289 21,371 21,559 22,695 28,081 19,765 19,914 21,001 26,080 07/31/2002 18,050 18,173 19,173 24,047 18,086 18,192 19,211 24,205 16,170 16,260 17,190 21,575 17,454 17,542 18,556 23,473 18,440 18,517 19,597 24,855 17,217 17,293 18,313 23,394 16,851 16,891 17,908 22,781 16,613 16,662 17,676 22,439 16,760 16,796 17,831 22,657 18,105 18,135 19,267 24,524 18,965 18,977 20,175 25,816 19,093 19,091 20,330 26,146 07/31/2003 19,550 19,531 20,806 26,607 For performance purposes, the above graph has not been adjusted for CDSC charges. Average Annual Total Returns as of July 31, 2003
1 Year 5 Year 10 Year ------------------------------------------------------ Class A Shares* 4.00% -3.89% 6.93% ------------------------------------------------------ Class B Shares** 3.47% -3.99% 6.92% ------------------------------------------------------ Class Y Shares (No Sales Charge) 8.52% -2.91% 7.60% ------------------------------------------------------
*Reflects 4.00% Maximum Front-End Sales Charge. **Reflects Maximum Contingent Deferred Sales Charge of up to 5.00% (CDSC). The CDSC does not apply to performance over 6 years; therefore, the 10-year return does not reflect the CDSC, nor does the graph reflect the CDSC charges. Past performance is no guarantee of future results. Investment return and net asset value (NAV) will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than the original cost. The chart and table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares. The chart above represents a comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Fund's benchmark. The quoted performance of the Pacific Capital Growth and Income Fund ("Fund") includes the performance of certain common trust fund ("Commingled") accounts advised by The Asset Management Group of Bank of Hawaii and managed the same as the Fund in all material respects, for periods dating back to July 31, 1993, and prior to the Fund's commencement of operations on October 14, 1994, as adjusted to reflect the expenses associated with the Fund. The Commingled accounts were not registered with the Securities and Exchange Commission under the Investment Company Act of 1940 and, therefore, were not subject to the investment restrictions imposed by law on registered mutual funds. If the Commingled accounts had been registered, the Commingled accounts' performance may have been adversely affected. Class B Shares were not in existence prior to March 2, 1998. Performance calculated for any period up to and through March 2, 1998, is based upon the performance of the Class A Shares, which does not reflect the higher 12b-1 fees or the contingent deferred sales charge (CDSC). Had the CDSC and higher 12b-1 fees been incorporated, total return figures may have been adversely affected. The performance of the Pacific Capital Growth and Income Fund is measured against the Standard & Poor's 500 Stock Index, an unmanaged index generally representative of the broad domestic stock universe. The index does not reflect the deduction of fees associated with a mutual fund, such as investment management and fund accounting fees. The Fund's performance reflects the deduction of fees for these value-added services. Investors cannot invest directly in an index, although they can invest in its underlying securities. 6 Pacific Capital New Asia Growth Fund+ First State Investments Kes Visuvalingam, CFA and Director of Asian Equities for First State Investments Asia, is responsible for the day-to-day management of the Fund. Mr. Visuvalingam heads up a team of eight investment professionals based in Hong Kong and Singapore. He has 2 years prior experience with Murray Johnstone Asia and UBS Brinson Asset Management, based in London, Chicago and Singapore. He is assisted in the management of the Fund by Martin Lau and Ho Hsiu-Mei. Mr. Lau, CFA, is based in Hong Kong and has eight years of investment experience managing Greater China and regional portfolios. Ms. Hsiu-Mei, senior portfolio manager, has 12 years of investment experience, specifically in Asia Pacific and Taiwan equity markets. The Asian investment operations cooperate closely with the UK-based Global Emerging Markets team, headed by Angus Tulloch. Mr. Tulloch has over 20 years of investment experience, managing client assets for the firm since 1988. How did the Fund perform compared to its benchmark? The Fund declined 0.47% (Class A Shares without sales charge) for the 12-month period ended July 31, 2003, under-performing its benchmark the MSCI AC Far East ex-Japan Free Index/1/ which rose 6.8%. What were the major factors in the market that influenced Fund performance? The 12-months ended July 31, 2003 were characterised by extreme volatility in Asian (ex-Japan) markets. During the first half of the period, markets fell due to concerns about global growth (particularly in key destinations for Asian exports, including the U.S. and Europe), political tensions within the region, as well as rising geopolitical risk culminating in the Iraq war. However, Asia benefited from a post-Iraq relief rally in global equity markets that dominated much of the second half of the review period. This was given momentum by a rise in U.S. consumer and business confidence, leading to anticipation of a recovery in U.S. investment spending, which would in turn sustain demand for Asian exports. Asian markets initially lagged other regions as Hong Kong, China, Taiwan and Singapore grappled with the outbreak of Severe Acute Respiratory Syndrome (SARS), which had a profound affect on confidence, consumption and travel in the region. However, as SARS abated, Asian markets advanced and outperformed other regions from May to July. During the past 12-months, we have increased the Fund's exposure to Thai and Indian equity markets. Both markets are characterized as offering exposure to robust, long-term domestic demand. Exposure to India, in particular, in companies with high return on equity, undemanding valuations, strong management and very competitive franchises helped to enhance Fund performance. However, exposure to smaller technology stocks in Taiwan detracted from performance. Market liquidity was biased towards larger (though less competitive) stocks within the sector. These stocks are more reliant upon a broad-based cyclical recovery in demand, rather than growing their market share. Korean stock selection was another contributor to under-performance during the review period. Consumer and banking exposure in Korea proved to be less defensive in a slowing domestic demand environment. Nonetheless, the worst of the domestic slowdown seems to be nearing an end. A moderation in bad debt charges has led to a recent recovery in sentiment towards the financial sector, which has amongst the best fundamentals in the region. We maintain the view that selective Korean technology stocks are compelling from a growth and valuation perspective, in an otherwise lack luster global environment. Again, recent performance appears to vindicate this stance.++ First State Investments Fund Outlook It appears that the recent equity rally has translated into a broader anticipation of a second-half economic recovery in the U.S. Confidence has been buoyed by aggressive fiscal and monetary reflation, aided by a weaker U.S. dollar. /1/ See Glossary of Terms for additional information ++ The portfolio composition is subject to change + International investing involves increased risk and volatility. 7 Pacific Capital New Asia Growth Fund+--continued Nevertheless, structural risks remain in this cyclical recovery scenario. The twin (fiscal and current account) deficits and high consumer indebtedness in the U.S. are fundamental imbalances that could potentially keep economic growth sub-par, and demand for Asian exports weak. In addition, the strength of the Euro may hurt economic growth in the EC. With sustainable growth also elusive in Japan, the U.S. remains the determinant of global demand. The U.S. economy has been reliant on the consumer. However, recent rise in U.S. bond yields may end the mortgage-refinancing boom that has been pivotal in sustaining consumer expenditure. While there are signs of a pick up in capital investment, much of this seems to be replacement demand. It is premature to herald a new investment cycle that can take over from the consumer as the driver of growth. Given the uncertain global environment, we maintain our preference for Asia (ex-Japan) over other regions, based on the potential for superior growth, valuations, balance sheet quality and dividend yield. Euro currency strength has helped Asia's export price competitiveness as Asian currencies have largely tracked the weakening dollar. Despite lackluster global demand, Asian exporters continue to gain market share. The long-term theme of Asian consumer demand seems to be firmly intact--particularly in Thailand, India and China--in contrasts with weakness in other regions. With the peaking of credit card delinquencies, the foundations are also being established for a tentative recovery in Korean consumption. 8 Pacific Capital New Asia Growth Fund Fund Objective: The Fund's investment objective is long-term growth of capital. The Fund seeks to achieve this objective by investing in equity securities of rapidly growing companies located in the developing countries of Asia. The Fund may invest in these securities directly, or indirectly through other investment companies or trusts that invest the majority of their assets in the developing countries of Asia. The Fund does not limit its investments to any particular type or size of company. The Fund focuses on companies whose earnings the Sub-Adviser expects to grow or whose share price it believes is undervalued. Growth of a $10,000 Investment [CHART] Class A Class B Class Y Shares MSCI AC Far East Shares* Shares** (No Sales Charge) Free ex-Japan Index ------- -------- ----------------- ------------------- 02/15/1995 $ 9,479 $10,000 $10,000 $10,000 9,488 10,010 10,020 11,011 9,649 10,180 10,180 11,063 9,678 10,210 10,210 10,959 10,275 10,840 10,850 12,294 10,104 10,660 10,670 12,109 07/31/1995 10,626 11,210 11,220 12,300 10,408 10,980 11,000 11,715 10,427 11,000 11,010 11,918 10,265 10,830 10,850 11,737 10,038 10,590 10,610 11,614 10,501 11,079 11,111 12,192 11,522 12,156 12,178 13,309 11,639 12,279 12,302 13,264 11,444 12,074 12,096 13,370 11,872 12,525 12,558 13,745 11,989 12,648 12,682 13,611 11,716 12,361 12,394 13,337 07/31/1996 10,803 11,397 11,439 12,376 11,123 11,735 11,768 12,823 11,289 11,910 11,953 13,146 11,306 11,928 11,968 12,898 12,123 12,790 12,842 13,637 12,181 12,851 12,903 13,550 12,721 13,421 13,484 13,747 12,996 13,711 13,775 13,798 12,309 12,986 13,048 13,044 12,004 12,664 12,726 12,711 12,770 13,473 13,546 13,356 13,252 13,980 14,045 13,713 07/31/1997 13,645 14,395 14,470 13,780 12,122 12,789 12,861 11,243 12,240 12,913 12,986 11,158 9,863 10,405 10,463 8,436 9,381 9,897 9,955 7,900 9,179 9,684 9,742 7,546 8,465 8,930 8,986 6,911 10,047 10,600 10,662 8,496 9,740 10,264 10,347 8,289 9,102 9,592 9,672 7,435 7,992 8,422 8,485 6,284 7,090 7,461 7,531 5,600 07/31/1998 6,980 7,345 7,414 5,444 6,310 6,638 6,704 4,603 7,024 7,379 7,461 5,099 7,816 8,202 8,310 6,491 8,300 8,712 8,834 7,083 8,161 8,564 8,687 7,182 7,984 8,367 8,500 6,948 7,786 8,146 8,277 6,825 8,447 8,842 8,991 7,592 10,135 10,603 10,783 9,345 10,234 10,707 10,900 8,925 11,976 12,515 12,761 10,473 07/31/1999 11,656 12,167 12,410 10,072 11,932 12,457 12,715 10,237 11,116 11,588 11,836 9,417 11,778 12,272 12,551 9,871 14,016 14,601 14,951 10,855 16,079 16,733 17,140 11,644 16,167 16,814 17,234 11,394 16,255 16,895 17,339 10,793 17,049 17,707 18,182 11,306 14,899 15,470 15,899 10,385 14,094 14,636 15,044 9,542 14,645 15,204 15,630 9,996 07/31/2000 13,785 14,300 14,728 9,640 13,807 14,311 14,752 9,519 12,594 13,048 13,452 8,418 11,326 11,727 12,106 7,760 10,796 11,171 11,532 7,374 10,609 10,962 11,333 7,359 12,087 12,492 12,925 8,348 11,469 11,843 12,270 7,943 10,410 10,742 11,134 7,099 10,984 11,322 11,743 7,126 10,929 11,252 11,684 7,086 10,752 11,067 11,497 6,938 07/31/2001 10,388 10,684 11,111 6,674 9,958 10,232 10,654 6,567 8,116 8,343 8,687 5,523 8,767 8,981 9,366 5,806 10,179 10,441 10,888 6,607 11,017 11,287 11,790 7,206 11,193 11,461 11,977 7,502 11,248 11,507 12,035 7,523 11,921 12,191 12,761 8,071 12,087 12,411 12,937 8,188 11,888 12,202 12,738 8,029 11,293 11,588 12,094 7,598 07/31/2002 10,840 11,125 11,626 7,322 10,521 10,788 11,275 7,160 9,330 9,560 10,010 6,346 9,638 9,861 10,338 6,686 10,079 10,290 10,783 7,023 9,285 9,491 9,963 6,540 9,363 9,572 10,057 6,618 8,966 9,155 9,636 6,328 8,502 8,691 9,144 6,039 8,679 8,865 9,339 6,260 9,396 9,583 10,100 6,803 9,947 10,140 10,698 7,200 07/31/2003 10,790 10,985 11,611 7,820 For performance purposes the above graph has not been adjusted for CDSC. Average Annual Total Returns as of July 31, 2003
Since Inception 1 Year 5 Year (2/15/95) -------------------------------------------------------- Class A Shares* -5.65% 7.94% 0.90% -------------------------------------------------------- Class B Shares** -5.20% 8.24% 1.12% -------------------------------------------------------- Class Y Shares (No Sales Charge) -0.13% 9.39% 1.78% --------------------------------------------------------
*Reflects 5.25% Maximum Front-End Sales Charge. **Reflects Maximum Contingent Deferred Sales Charge of up to 5.00% (CDSC). The CSDC does not apply to performance over six years, the since inception return does not reflect the CDSC, nor does the graph reflect the CDSC charges. Past performance is no guarantee of future results. Investment return and net asset value (NAV) will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than the original cost. The chart and table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares. The chart above represents a comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Fund's benchmark. Class B Shares were not in existence prior to March 2, 1998. Performance calculated for any period up to and through March 2, 1998, is based upon the performance of the Class A Shares, which does not reflect the higher 12b-1 fees or the contingent deferred sales charge (CDSC). Had the CDSC and higher 12b-1 fees been incorporated, total return figures may have been adversely affected. The performance of the Pacific Capital New Asia Growth Fund is measured against the Morgan Stanley Capital International (MSCI) All Country (AC) Far East Free Index (excluding Japan), which is unmanaged and is generally representative of the 48 developed and emerging markets around the world that collectively comprise virtually all of the foreign equity stock markets. The index does not reflect the deduction of fees associated with a mutual fund, such as investment management and fund accounting fees. The Fund's performance reflects the deduction of fees for these value-added services. Investors cannot invest directly in an index, although they can invest in its underlying securities. 9 Pacific Capital Diversified Fixed Income Fund Janet E. Katakura Vice President and Portfolio Manager As Vice President, Ms. Katakura currently serves as Taxable Fixed-Income Team Leader. Ms. Katakura has 29 years prior experience in the investment industry, her most recent 20 years at The Asset Management Group of Bank of Hawaii. Prior to joining The Asset Management Group of Bank of Hawaii, Ms. Katakura held positions at Hawaiian Life Insurance Co., Ltd. and First National Bank of Boston. Ms. Katakura is a member of the Investment Society of Hawaii. How did the Fund perform compared to its benchmark? For the 12-month period ended July 31, 2003, the Fund returned 5.76% (Class A Shares without sales charge) versus its benchmark the Merrill Lynch Corporate & Government Master Index/1/ return of 6.89%. What were the major factors in the market that influenced the Fund's performance? Both geopolitical and economic events proved extremely influential on the bond market, resulting in a volatile 12-month period. During much of 2002, investors' confidence was shaken by corporate scandals, threat of war and dismal stock market performance, all of which contributed to the "flight to quality" inherent to government and highly rated corporate bonds--which are the focus of the Diversified Fixed Income Fund. Then, with the coming of the New Year, 2003, investors' appetite for risk increased, as economic releases indicated the economy was improving. In this environment of better-than-expected corporate financial health, lower quality bonds provided double-digit returns, reversing the trend of the last several years. In addition, investors reached down the credit curve to get a higher yield than what was available in the government market. Consequently, we have recently emphasized corporate bonds over government securities as we believe they will provide better return potential.++ The Asset Management Group Fund Outlook We believe the secular decline in interest rates that we have enjoyed over the last 20 may have finally bottomed. While we don't expect to see sizeable increases in rates over the near-term, we do anticipate that the longer-term trend may call for higher rates. With that in mind, we have become more defensive in our security selection, positioning the portfolio's duration at 10% shorter than the benchmark index. We will continue to overweight corporate bonds and have invested in bonds with sinking fund payments, which may help to provide cash flow to reinvest at the higher yields we anticipate. In this environment, we will continue to look for opportunities to enhance return potential. /1/ See Glossary of terms for additional information. ++ The portfolio composition is subject to change. 10 Pacific Capital Diversified Fixed Income Fund Fund Objective: The investment objective of the Diversified Fixed Income Fund is to seek a high level of current income. The Fund pursues its objective by investing primarily in high- quality corporate bonds and obligations issued or guaranteed by the U.S. Government, its agencies or instrumentalities. Growth of a $10,000 Investment [CHART] Class A Class B Class Y Shares Merrill Lynch Corporate & Shares* Shares** (No Sales Charge) Government Master Index ------- -------- ----------------- ------------------------- 07/31/1993 $ 9,602 $10,000 $10,000 $10,000 9,982 10,395 10,397 10,230 10,036 10,452 10,453 10,279 10,063 10,480 10,482 10,319 9,828 10,235 10,246 10,203 9,873 10,282 10,283 10,248 10,054 10,471 10,482 10,397 9,720 10,122 10,132 10,169 9,295 9,680 9,688 9,947 9,123 9,501 9,509 9,854 9,078 9,454 9,471 9,844 9,024 9,397 9,415 9,828 07/31/1994 9,241 9,623 9,641 10,003 9,213 9,595 9,622 10,014 9,024 9,397 9,424 9,871 8,933 9,303 9,348 9,861 8,889 9,258 9,350 9,840 8,995 9,368 9,462 9,913 9,188 9,568 9,663 10,098 9,471 9,864 9,970 10,319 9,538 9,934 10,042 10,397 9,675 10,076 10,196 10,538 10,201 10,624 10,748 10,979 10,281 10,707 10,834 11,069 07/31/1995 10,180 10,602 10,730 11,030 10,352 10,781 10,911 11,162 10,483 10,917 11,050 11,274 10,672 11,114 11,249 11,449 10,881 11,332 11,473 11,630 11,085 11,545 11,689 11,796 11,110 11,570 11,718 11,875 10,751 11,196 11,334 11,625 10,618 11,058 11,188 11,535 10,468 10,902 11,034 11,454 10,416 10,848 10,992 11,438 10,550 10,987 11,124 11,584 07/31/1996 10,551 10,989 11,138 11,611 10,508 10,943 11,084 11,583 10,686 11,129 11,273 11,784 10,952 11,405 11,554 12,055 11,180 11,644 11,807 12,277 11,002 11,458 11,612 12,146 10,981 11,436 11,603 12,162 10,997 11,453 11,611 12,176 10,803 11,250 11,420 12,051 10,963 11,418 11,580 12,229 11,047 11,504 11,681 12,335 11,171 11,634 11,803 12,485 07/31/1997 11,523 12,001 12,175 12,864 11,361 11,831 12,007 12,719 11,542 12,020 12,200 12,923 11,747 12,234 12,430 13,136 11,800 12,289 12,487 13,193 11,930 12,424 12,627 13,334 12,117 12,619 12,827 13,528 12,045 12,545 12,754 13,495 12,090 12,592 12,792 13,546 12,121 12,637 12,840 13,605 12,277 12,794 13,007 13,754 12,420 12,926 13,161 13,899 07/31/1998 12,396 12,894 13,138 13,912 12,724 13,241 13,486 14,175 13,097 13,609 13,881 14,571 12,957 13,467 13,748 14,491 13,021 13,513 13,807 14,555 13,079 13,567 13,860 14,604 13,133 13,616 13,933 14,710 12,760 13,222 13,531 14,339 12,816 13,272 13,605 14,429 12,810 13,259 13,603 14,477 12,652 13,075 13,414 14,319 12,576 12,988 13,349 14,276 07/31/1999 12,524 12,927 13,285 14,235 12,484 12,890 13,259 14,224 12,624 13,015 13,397 14,355 12,633 13,016 13,410 14,383 12,592 12,967 13,370 14,377 12,493 12,856 13,268 14,304 12,429 12,796 13,218 14,300 12,586 12,937 13,373 14,472 12,834 13,185 13,639 14,697 12,720 13,059 13,521 14,620 12,670 13,000 13,472 14,604 12,922 13,264 13,755 14,894 07/31/2000 13,036 13,360 13,865 15,044 13,228 13,561 14,085 15,255 13,289 13,616 14,154 15,320 13,392 13,700 14,252 15,420 13,662 13,967 14,541 15,699 13,974 14,278 14,875 16,013 14,126 14,425 15,054 16,249 14,290 14,599 15,231 16,425 14,369 14,657 15,305 16,514 14,180 14,468 15,121 16,373 14,243 14,510 15,178 16,473 14,305 14,564 15,261 16,545 07/31/2001 14,663 14,920 15,645 16,964 14,848 15,099 15,844 17,155 15,057 15,303 16,070 17,375 15,417 15,673 16,470 17,791 15,148 15,377 16,174 17,496 14,991 15,207 16,011 17,362 15,080 15,288 16,110 17,465 15,234 15,436 16,277 17,619 14,882 15,082 15,907 17,258 15,207 15,389 16,256 17,594 15,340 15,528 16,401 17,753 15,568 15,735 16,647 17,906 07/31/2002 15,854 16,015 16,956 18,163 16,169 16,323 17,295 18,558 16,554 16,702 17,708 18,959 16,429 16,566 17,579 18,782 16,303 16,427 17,449 18,775 16,731 16,849 17,924 19,263 16,703 16,810 17,899 19,254 16,974 17,074 18,191 19,592 16,988 17,075 18,208 19,567 17,085 17,162 18,300 19,762 17,506 17,575 18,768 20,305 17,453 17,512 18,702 20,231 07/31/2003 16,768 16,810 17,974 19,415 For performance purposes, the above graph has not been adjusted for CDSC charges. Average Annual Total Returns as of July 31, 2003
1 Year 5 Year 10 Year ------------------------------------------------------ Class A Shares* 1.51% 5.37% 5.30% ------------------------------------------------------ Class B Shares** 0.96% 5.28% 5.33% ------------------------------------------------------ Class Y Shares (No Sales Charge) 6.00% 6.47% 6.04% ------------------------------------------------------
*Reflects 4.00% Maximum Front-End Sales Charge. **Reflects Maximum Contingent Deferred Sales Charge of up to 5.00% (CDSC). The CDSC does not apply to performance over 6 years; therefore, the 10-year return does not reflect the CDSC, nor does the graph reflect the CDSC charges. Past performance is no guarantee of future results. Investment return and net asset value (NAV) will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than the original cost. The chart and table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares. The chart above represents a comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Fund's benchmark. The quoted performance of the Pacific Capital Diversified Fixed Income Fund includes the performance of certain common trust fund ("Commingled") accounts advised by The Asset Management Group of Bank of Hawaii and managed the same as the Fund in all material respects, for periods dating back to July 31, 1993, and prior to the Fund's commencement of operations on October 14, 1994, as adjusted to reflect the expenses associated with the Fund. The Commingled accounts were not registered with the Securities and Exchange Commission under the Investment Company Act of 1940 and, therefore, were not subject to the investment restrictions imposed by law on registered mutual funds. If the Commingled accounts had been registered, the Commingled accounts' performance may have been adversely affected. Class B Shares were not in existence prior to March 2, 1998. Performance calculated for any period up to and through March 2, 1998, is based upon the performance of the Class A Shares, which does not reflect the higher 12b-1 fees or the contingent deferred sales charge (CDSC). Had the CDSC and higher 12b-1 fees been incorporated, total return figures may have been adversely affected. The performance of the Pacific Capital Diversified Fixed Income Fund is measured against the Merrill Lynch Corporate & Government Master Index, an unmanaged index generally representative of the performance of corporate and U.S. Government bonds. The index does not reflect the deduction of fees associated with a mutual fund, such as investment management and fund accounting fees. The Fund's performance reflects the deduction of fees for these value-added services. Investors cannot invest directly in an index, although they can invest in its underlying securities. 11 Pacific Capital Ultra Short Government Fund Edward Haik Vice President and Portfolio Manager Mr. Haik serves as Vice President on the Taxable Fixed-Income Team at The Asset Management Group of Bank of Hawaii. Mr. Haik has 13 years prior experience in the investment industry, his most recent eight years at The Asset Management Group of Bank of Hawaii. Prior experience includes positions at Garban Tokyo, Ltd., Cantor Fitzgerald Securities, and Merrill Lynch. How did the Fund perform compared to its benchmark? For the 12-month period ended July 31, 2003, the Fund posted a gain of 1.67% (Class A Shares without sales charge) verses its benchmarks the Merrill Lynch 1-Year U.S. Treasury Bill Constant Maturity Index/1/ and the Merrill Lynch Six-Month U.S. Treasury Bill Index/1/, which returned 1.96% and 1.61%, respectively. What were the major factors in the market that influenced the Fund's performance? The 12-month period between August 1, 2002 and July 31, 2003 was characterized by two very different environments. During the first eight months, the economy struggled, causing stocks to fall and helping bonds gain. However, in the final four months, as the economy began to show signs of strength, the situation reversed as the stock market surged and bonds lost ground. Yields on long-term bonds sustained the greatest increases, while short-term bonds remained relatively stable, anchored by the Federal Reserve Board's indications to keep short-term rates low. During the period, the three-month to three-year yield curve/1/ predominantly rallied. Treasury-bill yields along the three- and six- month yield curve dropped the most, while Treasury-notes along the three-year yield curve experienced only a marginal decline. The Fund's (Class A Shares without sales charge) out-performance relative to the Merrill Lynch Six-Month U.S. Treasury Bill Index is largely a result of our Government Agency overweight. Slight under-performance for the Fund was primarily due to our underweight of corporates. Going forward, we will continue to maintain portfolio positions in callable Agency issues, as we anticipate that higher coupons offered by such securities may provide a yield advantage to the Fund in a rising rate environment.++ The Asset Management Group Fund Outlook The Fund maintained a neutral-to-long duration position for most of the fiscal year. We will likely take a more defensive neutral-to-short duration position throughout the coming year, as we believe the potential for a U.S. recovery, supported by an improving economy and stronger reported earnings, may lead to a somewhat rocky path for bonds. /1/ See Glossary of Terms page for additional information. ++ The portfolio composition is subject to change. 12 Pacific Capital Ultra Short Government Fund Fund Objective: The investment objective of the Ultra Short Government Fund is to provide investors with high current income consistent with preservation of capital. The Fund pursues its objective by investing primarily in short-term debt securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities. Growth of a $10,000 Investment [CHART] Class Y Shares Merrill Lynch Merrill Lynch Class A Class B (No Sales 12-Month 6-Month U.S. Shares* Shares** Charge) Treasury Index Treasury Bill Index ------- ------- --------- -------------- ------------------- 06/01/2000 $ 9,823 $10,000 $10,000 $10,000 $10,000 9,895 10,073 10,073 10,076 10,057 07/31/2000 9,947 10,126 10,126 10,136 10,106 10,018 10,192 10,200 10,200 10,161 10,076 10,246 10,273 10,261 10,216 10,127 10,292 10,328 10,312 10,271 10,197 10,367 10,401 10,386 10,330 10,299 10,454 10,497 10,485 10,396 10,389 10,539 10,602 10,605 10,481 10,443 10,598 10,659 10,661 10,524 10,501 10,650 10,720 10,740 10,584 10,535 10,678 10,757 10,789 10,627 10,588 10,714 10,813 10,854 10,678 10,608 10,738 10,836 10,885 10,706 07/31/2001 10,689 10,813 10,921 10,964 10,748 10,744 10,852 10,980 11,007 10,787 10,847 10,949 11,086 11,127 10,855 10,905 11,000 11,137 11,202 10,894 10,887 10,976 11,132 11,214 10,921 10,894 10,986 11,141 11,248 10,937 10,908 10,983 11,159 11,253 10,953 10,942 11,021 11,195 11,288 10,973 10,904 10,966 11,159 11,288 10,986 10,973 11,028 11,232 11,366 11,017 11,011 11,059 11,261 11,398 11,039 11,058 11,099 11,312 11,460 11,064 07/31/2002 11,127 11,162 11,396 11,511 11,084 11,152 11,191 11,424 11,523 11,100 11,186 11,218 11,462 11,569 11,124 11,210 11,235 11,488 11,594 11,142 11,210 11,217 11,491 11,597 11,162 11,254 11,254 11,527 11,641 11,178 11,263 11,256 11,539 11,650 11,191 11,280 11,267 11,559 11,671 11,201 11,290 11,269 11,582 11,692 11,216 11,299 11,282 11,594 11,705 11,225 11,320 11,285 11,607 11,720 11,239 11,329 11,287 11,629 11,743 11,255 07/31/2003 11,313 10,964 11,616 11,737 11,262 Average Annual Total Returns as of July 31, 2003
Since Inception 1 Year (6/1/00) ------------------------------------------------- Class A Shares* -0.07% 3.98% ------------------------------------------------- Class B Shares** -3.06% 2.95% ------------------------------------------------- Class Y Shares (No Sales Charge) 1.92% 4.85% -------------------------------------------------
*Reflects 1.75% Maximum Front-End Sales Charge. **Reflects Maximum Contingent Deferred Sales Charge of up to 5.00% (CDSC). Past performance is no guarantee of future results. Investment return and net asset value (NAV) will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than the original cost. The chart and table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares. The chart above represents a comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Fund's benchmark. Class A and Class B Shares were not in existence prior to August 1, 2000. Performance calculated for any period up to and through August 1, 2000, is based upon the performance of Class Y Shares, which does not reflect the higher 12b-1 fees or the contingent deferred sales charge (CDSC). Had the CDSC and higher 12b-1 fees been incorporated, total return figures may have been adversely affected. The Merrill Lynch 12-Month U.S. Treasury Index and the Merrill Lynch 6-Month U.S. Treasury Bill Index consist of yields on Treasury securities at a constant, the fixed maturities are constructed by the Treasury department, and are based on the most actively traded marketable Treasury securities. Yields on these issues are based on composite quotes reported by U.S. Government securities dealers to the Federal Reserve Bank of New York. To obtain the constant maturity yields, personnel at Treasury construct a yield curve each business day, and yield values are then read from the curve at fixed maturities. 13 Pacific Capital Short Intermediate U.S. Government Securities Fund Edward Haik Vice President and Portfolio Manager Mr. Haik serves as Vice President on the Taxable Fixed-Income Team at The Asset Management Group of Bank of Hawaii. Mr. Haik has 13 years prior experience in the investment industry, his most recent eight years at The Asset Management Group of Bank of Hawaii. Prior experience includes positions at Garban Tokyo, Ltd., Cantor Fitzgerald Securities, and Merrill Lynch. How did the Fund perform compared to its benchmark? For the 12-month period ended July 31, 2003, the Fund (Class A Shares without sales charge) posted a gain of 3.28% verses its benchmark the Merrill Lynch 1-5 Year U.S. Treasury Index/1/ return of 3.42%. What were the major factors in the market that influenced the Fund's performance? The 12-month period between August 1, 2002 and July 31, 2003 was characterized by two very different environments. During the first eight months, the economy struggled, causing stocks to fall and helping bonds gain. However, in the final four months, as the economy began to show signs of strength, the situation reversed as the stock market surged and bonds lost ground. During the period, the three-month to five-year yield curve predominantly rallied. Treasury-bill yields along the three- and six- month yield curve dropped the most, while Treasury-notes along the five-year yield curve experienced a marginal increase. While the Fund performed in line with its benchmark, primarily due to our Government Agency overweight and longer duration position, slight underperformance was largely a result of our corporate underweight. Going forward, we will continue to maintain portfolio positions in callable Agency issues, as we anticipate that higher coupons offered by such securities may provide a yield advantage for the Fund in a rising rate environment.++ The Asset Management Group Fund Outlook The Fund maintained a neutral-to-long duration position for most of the fiscal year. We will likely take a more defensive neutral-to-short duration position throughout the coming year, as we believe the potential for a U.S. recovery, supported by an improving economy and stronger reported earnings, may lead to a somewhat rocky path for bonds. /1/ See Glossary of terms for additional information. ++ The portfolio composition is subject to change. 14 Pacific Capital Short Intermediate U.S. Government Securities Fund Fund Objective: The primary investment objective of the Short Intermediate U.S. Government Securities Fund, a diversified portfolio, is to provide investors with a high level of current income, consistent with prudent risk of capital. The potential for some capital appreciation is a secondary consideration. The Fund pursues these objectives by investing primarily in U.S. Treasury securities and repurchase agreements that are collateralized by U.S. Treasury securities. The Fund maintains an average maturity of two to five years. The Fund focuses on maximizing income consistent with prudent investment risk within this maturity range. Growth of a $10,000 Investment [CHART] Merrill Lynch Class A Class Y Shares 1-5 Year U.S. Shares* (No Sales Charge) Treasury Index ------- ----------------- --------------- 12/13/1993 $ 9,775 $10,000 $10,000 9,790 10,015 10,037 9,869 10,096 10,120 9,672 9,894 10,016 9,485 9,703 9,920 9,389 9,605 9,863 9,391 9,607 9,876 9,374 9,590 9,895 07/31/1994 9,506 9,724 9,999 9,520 9,739 10,032 9,378 9,594 9,978 9,357 9,582 9,990 9,284 9,519 9,936 9,306 9,533 9,963 9,460 9,691 10,117 9,649 9,886 10,289 9,691 9,931 10,345 9,790 10,034 10,451 10,054 10,307 10,695 10,110 10,367 10,758 07/31/1995 10,101 10,359 10,785 10,177 10,440 10,859 10,242 10,509 10,919 10,359 10,630 11,026 10,500 10,780 11,144 10,600 10,884 11,241 10,685 10,985 11,343 10,543 10,830 11,261 10,443 10,741 11,227 10,390 10,689 11,214 10,369 10,670 11,222 10,466 10,772 11,316 07/31/1996 10,493 10,790 11,356 10,494 10,805 11,383 10,616 10,921 11,506 10,766 11,090 11,663 10,888 11,206 11,775 10,803 11,132 11,744 10,828 11,149 11,796 10,838 11,161 11,815 10,744 11,079 11,786 10,853 11,194 11,898 10,924 11,269 11,983 10,994 11,344 12,075 07/31/1997 11,219 11,566 12,249 11,151 11,510 12,233 11,270 11,634 12,345 11,402 11,774 12,459 11,426 11,801 12,484 11,526 11,905 12,579 11,696 12,071 12,727 11,645 12,034 12,723 11,672 12,064 12,770 11,733 12,129 12,829 11,808 12,209 12,904 11,881 12,287 12,979 07/31/1998 11,918 12,328 13,035 12,178 12,598 13,246 12,536 12,970 13,489 12,546 12,984 13,545 12,455 12,893 13,509 12,497 12,939 13,553 12,533 12,979 13,616 12,286 12,726 13,486 12,347 12,792 13,586 12,367 12,816 13,627 12,248 12,683 13,579 12,243 12,681 13,622 07/31/1999 12,252 12,707 13,651 12,274 12,719 13,688 12,374 12,838 13,787 12,370 12,837 13,815 12,364 12,834 13,833 12,316 12,787 13,830 12,259 12,731 13,803 12,345 12,823 13,901 12,477 12,948 14,018 12,486 12,960 14,038 12,524 13,003 14,095 12,671 13,172 14,269 07/31/2000 12,739 13,246 14,360 12,875 13,391 14,484 12,969 13,491 14,598 13,065 13,594 14,682 13,257 13,796 14,848 13,480 14,031 15,057 13,648 14,193 15,245 13,754 14,321 15,362 13,852 14,410 15,492 13,791 14,364 15,493 13,844 14,423 15,571 13,895 14,464 15,620 07/31/2001 14,086 14,681 15,846 14,189 14,776 15,955 14,434 15,048 16,263 14,577 15,201 16,451 14,459 15,081 16,350 14,426 15,036 16,317 14,453 15,081 16,362 14,533 15,168 16,469 14,397 15,014 16,293 14,586 15,228 16,520 14,675 15,323 16,617 14,820 15,479 16,783 07/31/2002 15,027 15,713 17,056 15,158 15,838 17,167 15,318 16,008 17,394 15,344 16,038 17,411 15,263 15,957 17,305 15,459 16,164 17,536 15,439 16,146 17,510 15,551 16,266 17,635 15,558 16,277 17,657 15,612 16,336 17,694 15,729 16,461 17,846 15,751 16,487 17,851 07/31/2003 15,520 16,248 17,639 Average Annual Total Returns as of July 31, 2003
Since Inception 1 Year 5 Year (12/13/93) --------------------------------------------------------- Class A Shares* 0.97% 4.95% 4.67% --------------------------------------------------------- Class Y Shares (No Sales Charge) 3.41% 5.68% 5.17% ---------------------------------------------------------
*Reflects 2.25% Maximum Front-End Sales Charge. Past performance is no guarantee of future results. Investment return and net asset value (NAV) will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than the original cost. The chart and table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares. The chart above represents a comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Fund's benchmark. The performance for the Class Y Shares of the Pacific Capital Short Intermediate U.S. Government Securities Fund prior to 10/14/94 is based on the performance of the Class A Shares. The performance of the Pacific Capital Short Intermediate U.S. Government Securities Fund is measured against the Merrill Lynch 1-5-Year U.S. Treasury Index, an unmanaged index which tracks the performance of Treasury bonds in a maturity range of one to five years. The index does not reflect the deduction of fees associated with a mutual fund, such as investment management and fund accounting fees. The Fund's performance reflects the deduction of fees for these value-added services. Investors cannot invest directly in an index, although they can invest in its underlying securities. 15 Pacific Capital Tax Free Securities Fund+ The Fixed Income Investment Team of The Asset Management Group of Bank of Hawaii Robert Crowell, Executive Vice President and Senior Portfolio Manager on the Fixed Income Investment Team, is responsible for the day-to-day management of the Tax Free Securities and the Tax Free Short Intermediate Securities Fund. Mr. Crowell has served with Bank of Hawaii for 33 years. As Chief Investment Officer of the Treasury Group, he managed the Bank's $3 billion investment portfolio. From 1984 to 1993, he served as principal of the Bank's Municipal Securities Dealer Operations. How did the Fund perform compared to its benchmark? For the 12-month period ended July 31, 2003, the Fund gained 3.54% (Class A Shares without sales charge) versus its benchmark the Lehman Brothers Municipal Bond Index/1/ return of 3.60%. What were the major factors in the market that influenced the Fund's performance? Fixed-income investments benefited from historically low interest rates during the first 10 months of the fiscal year, even dropping to ultra-low levels in June 2003. However, by July month-end, interest rates increased dramatically in the intermediate- to long-end of the yield curve, ending the year where they started with 10-year AAA bonds yielding just over 4.00%. The Federal Reserve Board reduced the overnight Fed funds rate from 1.75% at the beginning of the fiscal year to 1.00% on June 25, 2003, surprisingly ending the rally in long-term interest rates. The increase in rates at the end of the year explains the negative absolute return in the Fund for the latest quarter (-1.31% for the three-month period ended 7/31/03) and the moderate return of 3.54% (Class A Shares without sales charge) for the year. The Fund's (Class A Shares without sales charge) slight under-performance relative to the benchmark was largely a result of our defensive position, holding the portfolio duration slightly short of the index. However, the strong rebound in interest rates at the end of the fiscal year helped to boost our overall performance.++ The Asset Management Group Fund Outlook Being short the index helped to benefit Fund performance in the latest quarter. Going forward, we will continue to position the fund defensively for both credit quality and interest rate risk. Currently, we are wary of the affect on interest rates stemming from a potential U.S. recovery. While we remain cautious, interest rate levels are more attractive than they were in June and we are looking for opportunities to slowly scale into the market to maintain the Fund's income. /1/ See Glossary of terms for additional information. + The Fund's income may be subject to the federal alternative minimum tax and to certain state and local taxes. ++ The portfolio composition is subject to change. 16 Pacific Capital Tax-Free Securities Fund Fund Objective: The Tax-Free Securities Fund's investment objective is to seek high current income that is exempt from federal and Hawaii income tax. With this in mind, we tend to be more moderate on interest rate bets and look toward more consistent long-term performance. Our strategy is to select bonds that we believe provide good relative value and structural fit within the context of our interest rate outlook, while heavily emphasizing higher-quality bonds. The Fund intends to invest at least 50% to 60% of its holdings in Hawaiian municipal bonds. Our primary goal is to provide a high level of double tax-exempt income (free from federal and state taxes), while providing diversification through national issues from states that are economically sound and viable. Growth of a $10,000 Investment [CHART] Class A Class B Class Y Shares Lehman Brothers Municipal Shares* Shares** (No Sales Charge) Bond Index ------- -------- ----------------- ------------------------- 07/31/1993 $ 9,600 $10,000 $10,000 $10,000 9,711 10,116 10,117 10,208 9,814 10,223 10,224 10,324 9,804 10,213 10,224 10,344 9,693 10,097 10,107 10,253 9,916 10,330 10,331 10,469 10,019 10,436 10,447 10,589 9,739 10,145 10,156 10,314 9,311 9,699 9,708 9,895 9,358 9,748 9,767 9,979 9,423 9,816 9,825 10,066 9,348 9,738 9,757 10,004 07/31/1994 9,516 9,913 9,932 10,187 9,534 9,932 9,961 10,223 9,395 9,787 9,815 10,073 9,143 9,525 9,582 9,893 8,960 9,334 9,390 9,714 9,177 9,559 9,619 9,928 9,478 9,873 9,933 10,212 9,764 10,171 10,234 10,509 9,858 10,269 10,334 10,630 9,851 10,262 10,330 10,643 10,177 10,601 10,672 10,982 10,055 10,475 10,547 10,887 07/31/1995 10,152 10,575 10,650 10,990 10,240 10,667 10,745 11,130 10,300 10,730 10,810 11,200 10,458 10,894 10,977 11,362 10,646 11,090 11,179 11,551 10,779 11,228 11,320 11,662 10,838 11,290 11,374 11,750 10,736 11,184 11,281 11,670 10,554 10,994 11,092 11,521 10,517 10,955 11,045 11,489 10,496 10,934 11,027 11,484 10,605 11,047 11,144 11,609 07/31/1996 10,711 11,158 11,257 11,715 10,700 11,147 11,249 11,713 10,853 11,306 11,411 11,877 10,971 11,429 11,537 12,011 11,166 11,631 11,744 12,231 11,107 11,570 11,684 12,179 11,119 11,583 11,699 12,202 11,201 11,668 11,788 12,315 11,009 11,468 11,587 12,151 11,110 11,573 11,695 12,253 11,271 11,741 11,879 12,437 11,389 11,864 11,994 12,570 07/31/1997 11,712 12,201 12,336 12,918 11,572 12,055 12,203 12,796 11,701 12,189 12,330 12,949 11,746 12,235 12,390 13,032 11,810 12,302 12,461 13,109 12,006 12,507 12,682 13,300 12,152 12,659 12,839 13,437 12,128 12,634 12,816 13,441 12,119 12,617 12,810 13,453 12,019 12,529 12,707 13,392 12,234 12,762 12,937 13,604 12,290 12,813 12,999 13,657 07/31/1998 12,314 12,818 13,027 13,691 12,497 13,012 13,223 13,904 12,668 13,185 13,406 14,077 12,646 13,153 13,385 14,077 12,692 13,192 13,436 14,127 12,745 13,228 13,482 14,162 12,874 13,366 13,634 14,330 12,788 13,269 13,546 14,267 12,800 13,274 13,562 14,287 12,823 13,289 13,589 14,323 12,741 13,185 13,493 14,240 12,526 12,967 13,282 14,035 07/31/1999 12,562 12,999 13,323 14,085 12,431 12,857 13,187 13,973 12,429 12,848 13,188 13,978 12,260 12,665 13,013 13,827 12,394 12,796 13,157 13,974 12,317 12,709 13,079 13,869 12,244 12,626 13,005 13,810 12,402 12,780 13,162 13,970 12,662 13,041 13,453 14,276 12,574 12,942 13,363 14,191 12,500 12,857 13,288 14,118 12,811 13,170 13,620 14,492 07/31/2000 12,974 13,329 13,796 14,693 13,150 13,501 13,985 14,919 13,072 13,399 13,892 14,842 13,224 13,560 14,070 15,004 13,298 13,628 14,152 15,118 13,657 13,974 14,535 15,491 13,758 14,068 14,632 15,644 13,806 14,124 14,700 15,695 13,909 14,220 14,813 15,836 13,738 14,037 14,635 15,665 13,868 14,160 14,776 15,834 13,970 14,256 14,887 15,940 07/31/2001 14,152 14,433 15,083 16,176 14,399 14,676 15,350 16,443 14,329 14,582 15,264 16,387 14,499 14,746 15,463 16,574 14,336 14,584 15,292 16,434 14,207 14,431 15,145 16,278 14,435 14,667 15,405 16,560 14,618 14,844 15,602 16,760 14,356 14,569 15,327 16,432 14,639 14,847 15,632 16,752 14,704 14,904 15,705 16,854 14,878 15,070 15,893 17,033 07/31/2002 15,067 15,238 16,098 17,253 15,215 15,392 16,258 17,460 15,543 15,714 16,611 17,842 15,315 15,474 16,373 17,546 15,226 15,374 16,281 17,472 15,520 15,662 16,598 17,841 15,488 15,619 16,567 17,796 15,677 15,801 16,788 18,046 15,701 15,814 16,801 18,056 15,809 15,914 16,936 18,176 16,134 16,231 17,272 18,601 16,084 16,170 17,237 18,521 07/31/2003 15,601 15,674 16,710 17,873 For performance purposes, the above graph has not been adjusted for CDSC charges. Average Annual Total Returns as of July 31, 2003
1 Year 5 Year 10 Year ------------------------------------------------------ Class A Shares* -0.58% 4.00% 4.55% ------------------------------------------------------ Class B Shares** -1.10% 3.94% 4.60% ------------------------------------------------------ Class Y Shares (No Sales Charge) 3.80% 5.11% 5.27% ------------------------------------------------------
*Reflects 4.00% Maximum Front-End Sales Charge. **Reflects Maximum Contingent Deferred Sales Charge of up to 5.00% (CDSC). The CDSC does not apply to performance over 6 years; therefore, the 10-year return does not reflect the CDSC, nor does the graph reflect the CDSC charges. Past performance is no guarantee of future results. Investment return and net asset value (NAV) will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than the original cost. The chart and table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares. The chart above represents a comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Fund's benchmark. The quoted performance of the Pacific Capital Tax-Free Securities Fund includes the performance of certain common trust fund ("Commingled") accounts advised by The Asset Management Group of Bank of Hawaii and managed the same as the Fund in all material respects, for periods dating back to July 31, 1993, and prior to the Fund's commencement of operations on October 14, 1994, as adjusted to reflect the expenses associated with the Fund. The Commingled accounts were not registered with the Securities and Exchange Commission under the Investment Company Act of 1940 and, therefore, were not subject to the investment restrictions imposed by law on registered mutual funds. If the Commingled accounts had been registered, the Commingled accounts' performance may have been adversely affected. Class B Shares were not in existence prior to March 2, 1998. Performance calculated for any period up to and through March 2, 1998, is based upon the performance of the Class A Shares, which does not reflect the higher 12b-1 fees or the contingent deferred sales charge (CDSC). Had the CDSC and higher 12b-1 fees been incorporated, total return figures may have been adversely affected. The performance of the Pacific Capital Tax-Free Securities Fund is measured against the Lehman Brothers Municipal Bond Index, which is an unmanaged index generally representative of a broad range of maturities. The index does not reflect the deduction of fees associated with a mutual fund, such as investment management and fund accounting fees. The Fund's performance reflects the deduction of fees for these value-added services. Investors cannot invest directly in an index, although they can invest in its underlying securities. 17 Pacific Capital Tax Free Short Intermediate Securities Fund+ The Fixed Income Investment Team of The Asset Management Group of Bank of Hawaii Robert Crowell, Executive Vice President and Senior Portfolio Manager on the Fixed Income Investment Team, is responsible for the day-to-day management of the Tax Free Securities and the Tax Free Short Intermediate Securities Fund. Mr. Crowell has served with Bank of Hawaii for 33 years. As Chief Investment Officer of the Treasury Group, he managed the Bank's $3 billion investment portfolio. From 1984 to 1993, he served as principal of the Bank's Municipal Securities Dealer Operations. How did the Fund perform compared to its benchmark? For the 12-month period ended July 31, 2003, the Fund gained 2.62% (Class A Shares without sales charge) versus its benchmark the Lehman Brothers 5 Year Municipal Bond Index/1/ return of 3.96%. What were the major factors in the market that influenced the Fund's performance? Fixed-income investments benefited from historically low interest rates during the first 10 months of the fiscal year, even dropping to ultra-low levels in June 2003. However, by July month-end, interest rates increased dramatically in the intermediate- to long-end of the yield curve, ending the year where they started with 10-year AAA bonds yielding just over 4.00%. The Federal Reserve Board reduced the overnight fed funds rate from 1.75% at the beginning of the fiscal year to 1.00% on June 25, 2003, surprisingly ending the rally in long-term interest rates. The increase in rates at the end of the year explains the negative absolute return in the Fund for the latest quarter (-0.51% for the three-month period ended 7/31/03) and the moderate return of 2.62% (Class A Shares without sales charge) for the year. The Fund's (class A Shares without sales charge) under-performance relative to the benchmark was largely a result of our defensive position, holding the portfolio duration slightly short of the index. However, the strong rebound in interest rates at the end of the fiscal year allowed for some catch-up in performance for the 12-month period.++ The Asset Management Group Fund Outlook Being short the index helped to benefit Fund performance in the latest quarter. Going forward, we will continue to position the fund defensively for both credit quality and interest rate risk, as we are wary of the affect on interest rates stemming from a potential U.S. recovery. While we remain cautious, interest rate levels are more attractive than they were in June and we are looking for opportunities to slowly scale into the market to maintain the Fund's income. + The Fund's income may be subject to the federal alternative minimum tax and to certain state and local taxes. /1/ See Glossary of terms for additional information. ++ The portfolio composition is subject to change. 18 Pacific Capital Tax-Free Short Intermediate Securities Fund Fund Objective: The Tax-Free Short Intermediate Securities Fund seeks to provide a high level of tax-exempt income and more price stability than a long-term bond fund. The Fund also provides double tax-exempt income for residents of Hawaii--50% to 60% of the Fund's holdings are invested in Hawaiian municipal bonds--while fulfilling diversification through national municipal issues. Growth of a $10,000 Investment [CHART] Class A Class Y Shares Lehman Brothers 5-Year Shares* (No Sales Charge) Municipal Bond Index ------- ----------------- ---------------------- 07/31/1993 $ 9,772 $10,000 $10,000 9,871 10,102 10,144 9,911 10,142 10,221 9,911 10,152 10,247 9,891 10,132 10,194 9,990 10,234 10,345 10,059 10,305 10,437 9,950 10,193 10,267 9,802 10,041 10,054 9,842 10,091 10,116 9,871 10,122 10,167 9,861 10,112 10,161 07/31/1994 9,931 10,183 10,279 9,960 10,224 10,329 9,921 10,183 10,259 9,832 10,112 10,192 9,769 10,068 10,099 9,831 10,124 10,213 9,861 10,155 10,340 9,963 10,261 10,521 10,032 10,333 10,628 10,066 10,380 10,668 10,199 10,520 10,892 10,193 10,505 10,911 07/31/1995 10,286 10,602 11,044 10,379 10,701 11,145 10,422 10,747 11,172 10,445 10,783 11,241 10,520 10,854 11,343 10,551 10,889 11,402 10,613 10,955 11,516 10,591 10,935 11,484 10,538 10,871 11,403 10,540 10,887 11,402 10,520 10,868 11,398 10,581 10,932 11,465 07/31/1996 10,636 10,991 11,549 10,638 11,004 11,559 10,680 11,060 11,654 10,759 11,130 11,755 10,863 11,240 11,908 10,858 11,237 11,885 10,892 11,274 11,926 10,933 11,330 12,013 10,855 11,240 11,882 10,902 11,291 11,933 10,989 11,384 12,080 11,054 11,453 12,171 07/31/1997 11,174 11,580 12,386 11,141 11,548 12,323 11,207 11,618 12,432 11,240 11,655 12,497 11,282 11,702 12,536 11,360 11,808 12,643 11,439 11,892 12,758 11,447 11,892 12,779 11,448 11,907 12,790 11,379 11,827 12,737 11,493 11,959 12,889 11,526 11,984 12,933 07/31/1998 11,548 12,021 12,979 11,685 12,165 13,138 11,787 12,262 13,274 11,799 12,289 13,312 11,821 12,314 13,336 11,875 12,361 13,383 11,978 12,470 13,525 11,937 12,442 13,511 11,936 12,431 13,523 11,956 12,467 13,564 11,919 12,419 13,508 11,774 12,272 13,355 07/31/1999 11,831 12,334 13,438 11,805 12,310 13,433 11,839 12,348 13,481 11,802 12,312 13,448 11,872 12,387 13,527 11,845 12,362 13,482 11,808 12,327 13,477 11,843 12,365 13,521 11,953 12,482 13,644 11,890 12,444 13,613 11,865 12,396 13,609 12,073 12,615 13,858 07/31/2000 12,208 12,759 14,003 12,331 12,890 14,155 12,318 12,879 14,131 12,393 12,959 14,230 12,417 12,988 14,291 12,606 13,187 14,521 12,758 13,362 14,771 12,793 13,387 14,810 12,881 13,482 14,932 12,778 13,391 14,848 12,892 13,500 15,001 12,939 13,565 15,078 07/31/2001 13,050 13,671 15,241 13,174 13,816 15,446 13,208 13,841 15,493 13,293 13,933 15,620 13,208 13,848 15,496 13,124 13,777 15,420 13,311 13,962 15,669 13,404 14,075 15,846 13,200 13,852 15,508 13,413 14,091 15,866 13,470 14,153 15,973 13,578 14,269 16,147 07/31/2002 13,699 14,399 16,321 13,794 14,501 16,478 13,941 14,659 16,707 13,839 14,555 16,537 13,801 14,505 16,520 13,977 14,692 16,849 13,980 14,712 16,877 14,100 14,841 17,061 14,075 14,818 17,037 14,130 14,878 17,118 14,279 15,038 17,391 14,251 15,011 17,346 07/31/2003 14,058 14,799 16,968 Average Annual Total Returns as of July 31, 2003
1 Year 5 Year 10 Year ------------------------------------------------------ Class A Shares* 0.30% 3.55% 3.46% ------------------------------------------------------ Class Y Shares (No Sales Charge) 2.78% 4.25% 4.00% ------------------------------------------------------
*Reflects 2.25% Maximum Front-End Sales Charge. Past performance is no guarantee of future results. Investment return and net asset value (NAV) will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than the original cost. The chart and table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares. The chart above represents a comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Fund's benchmark. The quoted performance of the Pacific Capital Tax-Free Short Intermediate Securities Fund includes the performance of certain common trust fund ("Commingled") accounts advised by The Asset Management Group of Bank of Hawaii and managed the same as the Fund in all material respects, for periods dating back to July 31, 1993, and prior to the Fund's commencement of operations on October 14, 1994, as adjusted to reflect the expenses associated with the Fund. The Commingled accounts were not registered with the Securities and Exchange Commission under the Investment Company Act of 1940 and, therefore, were not subject to the investment restrictions imposed by law on registered mutual funds. If the Commingled accounts had been registered, the Commingled accounts' performance may have been adversely affected. The performance of the Pacific Capital Tax-Free Short Intermediate Securities Fund is measured against the Lehman Brothers 5-Year Municipal Bond Index, an unmanaged index that generally tracks bonds with a maturity range of four to six years. It is important to note that the Fund may invest only in bonds with maturities of five years or less. The index does not reflect the deduction of fees associated with a mutual fund, such as investment management and fund accounting fees. The Fund's performance reflects the deduction of fees for these value-added services. Investors cannot invest directly in an index, although they can invest in its underlying securities. 19 Pacific Capital International Stock Fund+ Nicholas-Applegate Capital Management The Fund is sub-advised by Nicholas-Applegate Capital Management (NACM); a management team led by Loretta Morris is responsible for the day-to-day management of the Fund. Ms. Morris, who is responsible for portfolio management and research at NACM since 1990, has 11 years prior investment experience, including portfolio management with Collins Associates. How did the Fund perform compared to its benchmark? For the 12 months ended July 31, 2003, the Fund delivered a return of 1.41% (Class A Shares without sales charge), versus 6.67% for the MSCI EAFE Index./1/ Stock selection in the United Kingdom, Japan and Australia hurt relative returns. The UK and Japan are the largest country weights in the Fund and both are underweight vs. the benchmark as of 7/31/03. Contributing positively to performance was stock selection in Israel, Switzerland, France and Germany. On a sector basis, strong stock selection in healthcare (drugs/pharmaceuticals), technology (software and semiconductors) and utilities added relative value. Stock selection in financials (money-center banks and investments), consumer discretionary and transportation holdings underperformed relative to the benchmark. Among the Fund's best-performing holdings during the period was Teva Pharmaceutical, an Israel-based manufacturer primarily of generic drugs, Credit Suisse, the largest Swiss banking and financial services concern, and Vodafone Group, a UK-based provider of wireless communications services. Teva advanced based on its strong competitive position as the world's #2 generic drugmaker with a robust pipeline. Credit Suisse advanced as a result of strength in the fixed-income market and improving results in its equity and private banking units. Vodafone continues to benefit from improving results, experiencing double-digit growth in subscribers and revenues and retaining a #1 or #2 position in every market in which it operates. What were the major factors in the market that influenced the Fund's performance? The international equity market became sharply oversold in the last half of 2002 with investor sentiment dampened by anemic growth rates, pessimism over financial services companies (particularly in Germany), the overhang of the Iraq situation and terrorism, debt downgrades from credit rating agencies. In first quarter of 2003, the international stock markets came under pressure as a combination of war worries and weak economic data spurred a sell-off in equities. "War trades" also heightened volatility as investors moved quickly into, then back out of, gold, oil and Treasury securities. A snap-back in late March erased almost all of January and February's losses, even though the MSCI EAFE Index finished the quarter down 8.8%, with much of the decline due to regained strength in the dollar. International equities continued to rise, starting in April, despite ongoing worries over the slow pace of growth in Europe and Japan's long-beleaguered financial and banking system. International stocks were buoyed by many of the same factors that drove U.S. stocks higher, including falling interest rates, modest inflation, fear of SARS and Iraq abating and data suggesting a rekindling of economic activity. In the last few months of the fiscal year, the euro and yen strengthened against the dollar, helping to boost returns. However, the European and Japanese economies remained weak relative to the /1/ See Glossary of Terms for additional information + International investing involves increased risk and volatility. 20 Pacific Capital International Stock Fund+--continued U.S., prompting the ECB's stimulative interest rate cut. The rally was largely driven by increased liquidity in the markets as central banks worldwide continued to pursue stimulative policies and corporations took advantage of low interest rates to refinance debt, cut costs, and improve cash flow. Markets were boosted in July by marginally stronger economic news in most major economies. Leading economic indicators improved even in continental Europe where business and consumer confidence have improved for several consecutive months. Investor confidence increased globally and the equity market rally resumed.++ What major changes have occurred in the portfolio during the period covered by the report? During the period we shifted holdings in the financial services sector from more retail-oriented stocks to those with more exposure to capital markets. We also added to technology, resulting in an over-weighting in information technology and telecommunications versus the benchmark. We trimmed our utilities weighting slightly below the benchmark. As the market began to rally, the reliable earnings growth of this sector became less attractive compared to the faster-growing financials, technology and telecom sectors. We also trimmed or sold several positions in the consumer discretionary sector vulnerable to a weaker U.S. dollar. In the last half of the fiscal year, we continued to add to the Japan portion of the portfolio. Japan has become more attractive. Loose liquidity conditions have triggered a sell-off in Japan's bond market in favor of equities. Nicholas Applegate Capital Management Fund Outlook Although economic data has remained mixed, it appears that the U.S. labor market is firming, corporate earnings are improving, the housing market is holding up, interest rates remain low, and capital equipment spending is on the upswing. Asian economies are being fed by strong Chinese growth, as China must import manufacturing equipment, chemicals, and construction materials to feed the boom in manufacturing. Meanwhile, higher wages are creating a middle class that demands consumer goods. Asian companies are the primary beneficiaries of this Chinese demand. The growth style of investing has been out of favor over the last several years. The most recent rally has been led by stocks with low valuations, but many of these value stocks have become fairly priced. Should the global economy continue to improve, investors may look to companies that are growing earnings beyond market expectations. At this point, we remain positive on international equities as favorable relative valuations, corporate cost cutting and restructuring, rampant liquidity, steady consumer spending, a rebound in capital spending and reallocation to equities may bode well for stock markets worldwide. ++ The portfolio composition is subject to change. 21 Pacific Capital International Stock Fund Fund Objective: Seeking long-term growth of capital, the International Stock Fund primarily invests in preferred and common stocks of foreign companies. The Fund may invest in these securities directly or through other investment companies or trusts. The Fund is not limited to any particular type of company or to any geographic region of the world. [CHART] Growth of a $10,000 Investment Class A Class B Class Y Shares MSCI EAFE/(R)/ Shares* Shares** (No Sales Charge) Index ------- -------- ----------------- ------------ 12/02/1998 $ 9,479 $10,000 $10,000 $10,000 9,943 10,490 10,490 10,397 10,464 11,031 11,040 10,369 9,962 10,500 10,520 10,124 10,322 10,871 10,900 10,549 10,692 11,251 11,300 10,979 10,256 10,791 10,840 10,416 11,033 11,601 11,660 10,824 07/31/1999 11,336 11,912 11,990 11,148 11,545 12,122 12,210 11,192 11,706 12,272 12,370 11,307 12,455 13,063 13,170 11,733 14,104 14,774 14,920 12,143 16,893 17,659 17,843 13,235 15,582 16,284 16,459 12,396 17,304 18,073 18,287 12,733 16,325 17,049 17,254 13,229 14,936 15,591 15,788 12,535 14,123 14,723 14,931 12,231 14,906 15,529 15,757 12,712 07/31/2000 14,241 14,837 15,065 12,182 14,750 15,354 15,602 12,290 13,781 14,340 14,580 11,694 12,890 13,399 13,640 11,420 12,254 12,727 12,969 10,994 12,650 13,133 13,387 11,388 12,283 12,743 12,999 11,382 11,242 11,652 11,902 10,530 10,335 10,704 10,947 9,833 11,046 11,444 11,708 10,522 10,666 11,042 11,308 10,159 10,238 10,587 10,857 9,748 07/31/2001 9,980 10,314 10,573 9,571 9,576 9,899 10,159 9,331 8,756 9,041 9,282 8,388 8,695 8,976 9,230 8,602 8,829 9,106 9,359 8,920 8,915 9,197 9,462 8,973 8,499 8,755 9,023 8,497 8,548 8,807 9,075 8,557 9,037 9,301 9,591 9,024 8,988 9,236 9,540 9,089 9,001 9,236 9,553 9,213 8,670 8,911 9,217 8,849 07/31/2002 7,801 8,028 8,313 7,976 7,703 7,937 8,223 7,960 6,968 7,171 7,436 7,107 7,225 7,430 7,720 7,490 7,421 7,638 7,926 7,831 7,164 7,366 7,655 7,568 6,907 7,093 7,384 7,253 6,772 6,963 7,255 7,087 6,686 6,872 7,165 6,953 7,250 7,443 7,771 7,642 7,703 7,898 8,249 8,113 7,837 8,028 8,391 8,313 07/31/2003 7,911 7,981 8,481 8,516 Average Annual Total Returns as of July 31, 2003
Since Inception 1 Year (12/2/98) ------------------------------------------------- Class A Shares* -3.87% -4.90% ------------------------------------------------- Class B Shares** -3.03% -4.72% ------------------------------------------------- Class Y Shares (No Sales Charge) 2.02% -3.47% -------------------------------------------------
*Reflects 5.25% Maximum Front-End Sales Charge. **Reflects Maximum Contingent Deferred Sales Charge of up to 5.00%. Past performance is no guarantee of future results. Investment return and net asset value (NAV) will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than the original cost. The chart and table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares. The chart above represents a comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Fund's benchmark. Class A Shares were not in existence prior to December 8, 1998. Performance calculated for any period up to and through December 8, 1998, is based upon the performance of Class Y Shares, which does not reflect the higher 12b-1 fees. Had the higher 12b-1 fees been incorporated, total return figures may have been adversely affected. Class B Shares were not in existence prior to December 20, 1998. Performance calculated for any period up to and through December 20, 1998, is based upon the performance of the Class Y Shares, which does not reflect the higher 12b-1 fees or the contingent deferred sales charge (CDSC). Had the CDSC and higher 12b-1 fees been incorporated, total return figures may have been adversely affected. The performance of the Pacific Capital International Stock Fund is measured against the Morgan Stanley Capital International (MSCI) Europe, Australasia and Far East (EAFE(R)) Index, which is unmanaged and is generally a sample of companies representative of the market structure of 20 European and Pacific Basin countries. The index does not reflect the deduction of fees associated with a mutual fund, such as investment management and fund accounting fees. The Fund's performance reflects the deduction of fees for these value-added services. Investors cannot invest directly in an index, although they can invest in its underlying securities. 22 Pacific Capital Value Fund The Equity Investment Team of The Asset Management Group of Bank of Hawaii Team members include Howard Hodel, Clyde Powers, Bill Carpenter, Teresa Yee, and Laughon Bryant. Mr. Hodel, Executive Vice President and Manager of the Adviser's registered investment unit, has served as head of Bank of Hawaii's Investment Services Group Analytics and Risk Management since January 2003. He previously served at Bank of America from 1994 to 2003 as the Managing Director of Market Risk Control Investments, and from 1987 to 1994 as Vice President in Corporate Finance. Mr. Powers, CFA, Vice President of the Adviser, joined the Adviser in 1997. He previously served as a Portfolio Manager for Amcore Investment Group from 1995 to 1997, and as Managing Director-Investment Operations for Union Capital Advisors from 1984 to 1995. Mr. Carpenter, Vice President of the Adviser, rejoined the Adviser in 1999. He previously served as a Small-Cap Analyst for Greenville Capital Management from 1996 to 1998, and as Portfolio Manager for First Hawaiian Bank's Trust Division from 1985 to 1995 and as the Risk Manager for Bank of Hawaii from 1980 to 1984. Ms. Yee, Vice President and Portfolio Manager of the Adviser, joined the Adviser in 1998. Previously she served a an Equity Analyst from 1993 to 1997 at CIBC Oppenheimer. Mr. Bryant, Assistant Vice President, has served the Adviser as a Securities Analyst since 1997. Previously, he served as Portfolio Manager from 1993 to 1997 in First Hawaiian Bank's Trust and Investment Division. How did the Fund perform compared to its benchmark? For the 12-months ended July 31, 2003, the Fund appreciated 6.07% (Class A Shares without sales charge), versus its benchmark the Russell 1000 Value Index/1/ return of 10.75%. What were the major factors in the market that influenced the Fund's performance? Over the course of the 12-month period, the war in Iraq, geopolitical tensions, Federal rate cuts, and improving fundamental and economic data coupled to create a very volatile environment for the stock market. A rebound in stocks towards the end of the period was led by the tech-heavy Nasdaq, as positive news on the economy and corporate earnings came to fruition. Investors cheered the better than expected data and started to discount a stronger recovery going into the second half of the year. The Value Fund's underperformance for the annual period was attributable to an overweight in the financial sector where stock selection led to relative under-performance in a stabilizing interest rate environment. Positive stock and sector selection in industrials and information technology during the year mitigated the relative underperformance. In particular, the Fund benefited from top performing holdings, including Ingersoll-Rand, Capital One Financial, and Tyco International.++ What major changes have occurred in the portfolio during the period covered by the report? In expectation of a strong economic recovery, the Fund made opportunistic trades to position the portfolio more heavily in economically sensitive areas throughout the year. New names were added in health care, financials, and information technology. A global rebalancing event that took place at the end of June resulted in the Fund trimming and eliminating positions across the board.++ The Asset Management Group Fund Outlook The recent bear market was longer and deeper by historical standards than most other market declines. However, the market was shown signs of positive advancement supported by stronger corporate earnings in an improving economy. Hence, our outlook at this time remains positive and we will maintain our overweight to economically sensitive sectors of the economy. /1/ See Glossary of terms for additional information. ++ The portfolio composition is subject to change. 23 Pacific Capital Value Fund Fund Objective: Seeking long-term growth capital first, and current income second, the Value Fund invests primarily in a diversified portfolio of common stocks of companies traded in the United States. The Fund focuses on mid to large-capitalization companies, specifically those believed to be undervalued relative to their peers. Growth of a $10,000 Investment [CHART] Class A Class B Class Y Shares Russell 1000 Shares* Shares** (No Sales Charge) Value Index ------- ------- ---------------- ------------ 12/01/1998 $ 9,597 $10,000 $10,000 $10,000 9,855 10,267 10,280 10,340 9,875 10,277 10,290 10,423 9,506 9,887 9,909 10,276 9,945 10,340 10,378 10,489 10,571 10,991 11,030 11,468 10,436 10,830 10,883 11,342 10,792 11,201 11,260 11,671 07/31/1999 10,395 10,788 10,856 11,330 10,022 10,392 10,461 10,909 9,696 10,047 10,132 10,528 10,177 10,538 10,624 11,134 10,200 10,548 10,651 11,047 10,717 11,082 11,194 11,100 10,362 10,701 10,823 10,738 10,423 10,754 10,886 9,940 11,490 11,853 12,012 11,153 11,169 11,525 11,684 11,023 11,078 11,420 11,588 11,139 10,894 11,219 11,397 10,630 07/31/2000 10,936 11,252 11,446 10,764 11,680 12,013 12,224 11,362 11,150 11,463 11,670 11,466 11,249 11,558 11,779 11,748 10,494 10,776 10,989 11,312 11,073 11,363 11,599 11,879 11,579 11,874 12,129 11,924 10,732 10,998 11,243 11,593 10,309 10,560 10,812 11,183 11,062 11,327 11,594 11,732 11,168 11,424 11,717 11,995 10,814 11,059 11,348 11,729 07/31/2001 10,755 10,998 11,292 11,704 10,272 10,487 10,774 11,235 9,530 9,721 10,009 10,444 9,728 9,915 10,211 10,355 10,246 10,451 10,767 10,957 10,421 10,609 10,942 11,215 10,068 10,256 10,587 11,128 9,820 10,001 10,327 11,146 10,434 10,609 10,971 11,673 10,034 10,195 10,545 11,273 9,998 10,147 10,507 11,330 9,313 9,453 9,788 10,679 07/31/2002 8,309 8,431 8,741 9,686 8,392 8,504 8,828 9,759 7,410 7,507 7,796 8,674 7,893 7,987 8,309 9,317 8,355 8,450 8,795 9,904 7,885 7,969 8,292 9,474 7,687 7,774 8,098 9,244 7,508 7,591 7,910 8,998 7,461 7,530 7,860 9,013 8,186 8,259 8,628 9,806 8,688 8,760 9,156 10,439 8,771 8,833 9,244 10,570 07/31/2003 8,813 8,726 9,294 10,727 Average Annual Total Returns as of July 31, 2003
Since Inception 1 Year (12/3/98) ------------------------------------------------- Class A Shares* 1.86% -2.67% ------------------------------------------------- Class B Shares** 1.22% -2.88% ------------------------------------------------- Class Y Shares (No Sales Charge) 6.32% -1.56% -------------------------------------------------
* Reflects 4.00% Maximum Front-End Sales Charge. ** Reflects Maximum Contingent Deferred Sales Charge of up to 5.00%. Past performance is no guarantee of future results. Investment return and net asset value (NAV) will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than the original cost. The chart and table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The chart above represents a comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Fund's benchmark. Class A Shares were not in existence prior to December 8, 1998. Performance calculated for any period up to and through December 8, 1998, is based upon the performance of Class Y Shares. Class B Shares were not in existence prior to December 13, 1998. Performance calculated for any period up to and through December 13, 1998, is based upon the performance of the Class Y Shares, which does not reflect the higher 12b-1 fees or the contingent deferred sales charge (CDSC). Had the CDSC and higher 12b-1 fees been incorporated, total return figures may have been adversely affected. The performance of the Pacific Capital Value Fund is measured against the Russell 1000 Value Index, unmanaged index is comprised of the securities that tend to exhibit low price-to-book and price-to-earnings ratios. The index does not reflect the deduction of fees associated with a mutual fund, such as investment management and fund accounting fees. The Fund's performance reflects the deduction of fees for these value-added services. Investors cannot invest directly in an index, although they can invest in its underlying securities. 24 Pacific Capital Small Cap Fund+ Nicholas-Applegate Capital Management The Fund is sub-advised by Nicholas-Applegate Capital Management (NACM); a management team led by Mark Stuckleman is responsible for the day-to-day management of the Fund. Mr. Stuckleman, Lead Portfolio Manager for NACM, has 12 years investment experience. Prior to joining NACM in 1995, Mr. Stuckleman was a senior quantitative analyst with Wells Fargo Bank's Investment Management Group. How did the Fund perform compared to its benchmark? In the 12 months ending July 31, 2003, the Fund returned 24.62% (Class A Shares without sales charge), outperforming the Russell 2000 Value Index/1/ return of 18.63%. The Fund's out-performance relative to the benchmark was largely a result of strong stock selection in technology, financials and airlines. In particular, transportation stocks were strong, with exposure to airlines contributing positively to performance. AAR Corp., a provider of aircraft parts and services, gained on the prospect of improving industry conditions. Continental Airlines benefited similarly during the period. Technology stocks rallied as tech spending showed signs of stabilizing. Within technology, defense communications contractor Titan Corp. gained on better-than-expected earnings. Positions in semiconductor related stocks, including graphics chipmaker ATI Technologies and ASE Test, contributed to positive performance with ASE Test rising on an improving revenue outlook. Avocent, which specializes in network server management systems, was also among the top performers. In the financials, First Essex Bancorp and BankAtlantic Bancorp were strong holdings. First Essex increased as it was acquired by Sovereign. These regional banks provide various products and services for consumer and commercial banking and real estate developing. Stock selection in the healthcare sector, drugs/pharmaceutical and hospitals, under-performed relative to the Russell 2000 Value Index. Highly levered utility stocks traded lower in July following gains earlier in the period in the face of rising longer-term interest rates. What were the major factors in the market that influenced the Fund's performance? In the first part of the fiscal year, investors focused primarily on potential U.S. military action in Iraq, accounting and insider trading scandals, and evidence of a weakening economy. As a result, the markets were volatile while generally trending downward. In September, selling pressure continued to intensify amid a weakening earnings picture, an escalation of the conflict in the Middle East and increasing talk of military action against Iraq. During the month, consensus earnings estimate continued to be revised downward as many companies lowered their guidance for the quarter as a whole. After a strong October, the U.S. stock market continued to power higher in November. Technology stocks staged a particularly strong rally. In November, the rally seemed to be driven by a lack of bad news rather than any particular good news. Iraq's welcoming of United Nations weapons inspectors seemed to relieve investor tensions regarding military action there, as Saddam Hussein showed more willingness to cooperate with UN mandates. January began in a promising fashion, with stocks rallying, but weaker-than-expected earnings reports and uncertainty over the Iraq situation soured investor sentiment. An initial rally was led by a proposal by President Bush to eliminate the double taxation of dividends, but the start of earnings /1/ See Glossary of Terms for additional information 25 Pacific Capital Small Cap Fund+--continued season stalled the rally. Bush's State of the Union address, which pledged increased healthcare spending and tax cuts, failed to resurrect the equity markets. The dark clouds of Iraq, North Korea and continued global economic weakness conspired to pressure the broad U.S. stock market in February. US equities declined for the third straight month. However, tech stocks, impelled by encouraging earnings growth projections, rebounded with the Nasdaq Composite Index/1/ advancing 1.3%. Equities ended March slightly positive following an extremely volatile month in which the market was obsessed by the military action in Iraq. The market, as measured by the S&P 500 Index/1/, fell 4.8% early in March as the prospect of war weighted heavily on investor sentiment. Economic news was generally weaker as consumer and business activity was muted by the war. Higher energy prices and poor weather in many parts of the country led to an overall weakening in all areas of the economy, including retail sales, home sales, manufacturing activity and unemployment. Consumer confidence fell to its lowest level since October 1993 and posted the ninth decline in 10 months. The U.S. stock market bounced back strongly in April as investor fears of a protracted military campaign in Iraq were not borne out. Gains were fueled by greater clarity regarding the Iraq situation and a solid earnings picture, which overcame weak economic reports. One factor behind the solid first quarter earnings was the lack of major blow-ups, in which companies miss estimates by a large margin and sell off. Also, moderating energy prices were a positive factor, and the effect of a weaker dollar may have been underestimated. During the last quarter of the reporting period, U.S. stocks surged as forward-looking investors began to anticipate the dual economic stimulus of a low-interest rate environment and tax-cut legislation passed by Congress and signed by President Bush. A decline in consumer confidence readings and persistent questions over the strength of the job market were offset by a speedy military victory in Iraq, declining fears over SARS, solid housing start figures, an uptick in capital equipment expenditures and a level of consumer price inflation that offset concerns over deflation. On the earnings front, companies reporting second quarter earnings in July were generally in line or ahead of expectations. Corporate earnings have shown signs of improvement. Analysts now project third and fourth quarter figures at 21.3% and 21.6%, respectively. What major changes have occurred in the portfolio during the period covered by the report? The Fund's holdings remain diversified across sectors and industries. During the period, as a result of our bottom-up stock selection process and capital appreciation, weightings of the healthcare and information technology sectors increased. The weighting in consumer discretionary and financials slightly declined. ++ The portfolio composition is subject to change. /1/ See Glossary of terms for additional information. + Small-capitalization funds typically carry additional risks since smaller companies generally have a higher risk of failure. Historically, smaller companies' stocks have experienced a greater degree of market volatility than average. 26 Pacific Capital Small Cap Fund+--continued As of 7/31/03, the Fund's largest under-weights, versus the Russell 2000 Value Index/1/, were in consumer discretionary and financials. Significant over-weights included healthcare and information technology.++ The Nicholas Applegate Fund Outlook Amid a mixed macroeconomic environment, the market has made a good run over the past few months. In retrospect, Wall Street analysts may have been somewhat overzealous in reducing earnings estimates for 2003, effectively lowering the bar of expectations and preparing the market for strength. We continue to be encouraged by positive developments in the markets. The federal government's fiscal and monetary policies are extraordinarily stimulative. Corporate earnings have finally stopped decelerating and there is greater comfort with expectations and guidance. Recently passed tax cut legislation is also stimulative, which may help improve prospects for economic growth in the second half of the year. At this time, we remain positive on U.S. equities as favorable relative valuations, corporate cost cutting and restructuring, rampant liquidity, steady consumer spending, a rebound in capital spending and reallocation to equities may bode well for stock markets worldwide. 27 Pacific Capital Small Cap Fund Fund Objective: Seeking long-term growth of capital, the Small Cap Fund primarily invests in a diversified portfolio of common stocks of smaller U.S. companies that the Sub- Adviser believes to be exhibiting solid fundamental strength and attractive valuations. Growth of a $10,000 Investment [CHART] Class A Class B Class Y Russell 2000 Shares* Shares** (No Sales Charge) Value Index ------- -------- ----------------- ------------ 12/01/1998 $ 9,479 $10,000 $10,000 $10,000 9,719 10,253 10,245 10,314 9,416 9,923 9,935 10,079 8,771 9,242 9,254 9,391 8,534 8,982 9,004 9,314 9,378 9,873 9,905 10,164 9,833 10,343 10,375 10,477 10,298 10,823 10,875 10,856 07/31/1999 10,108 10,613 10,675 10,598 9,767 10,253 10,325 10,211 9,454 9,923 9,995 10,007 9,179 9,623 9,704 9,807 9,435 9,883 9,975 9,857 9,560 10,015 10,116 10,160 9,283 9,716 9,825 9,895 9,086 9,498 9,617 10,499 9,825 10,267 10,386 10,549 10,173 10,620 10,761 10,611 10,094 10,537 10,688 10,449 10,291 10,734 10,896 10,754 07/31/2000 10,261 10,703 10,869 11,113 10,942 11,398 11,589 11,610 11,090 11,543 11,745 11,544 11,169 11,616 11,826 11,503 10,912 11,325 11,543 11,269 12,096 12,555 12,810 12,479 12,527 12,991 13,268 12,824 12,527 12,980 13,268 12,806 12,356 12,790 13,087 12,601 13,150 13,617 13,934 13,184 13,982 14,467 14,815 13,523 14,292 14,769 15,142 14,067 07/31/2001 14,394 14,868 15,253 13,752 14,245 14,711 15,106 13,704 12,877 13,279 13,648 12,191 13,261 13,671 14,063 12,510 13,967 14,387 14,810 13,409 15,131 15,590 16,048 14,230 15,271 15,727 16,200 14,418 15,294 15,739 16,224 14,506 16,618 17,089 17,639 15,593 16,987 17,462 18,039 16,141 16,468 16,920 17,490 15,608 16,180 16,607 17,184 15,262 07/31/2002 14,002 14,365 14,877 12,994 13,956 14,305 14,828 12,937 12,942 13,256 13,753 12,013 12,948 13,268 13,769 12,193 14,009 14,329 14,895 13,166 13,798 14,107 14,677 12,604 13,363 13,652 14,216 12,249 12,968 13,238 13,796 11,837 13,166 13,445 14,020 11,964 14,325 14,603 15,236 13,100 15,894 16,203 16,927 14,438 16,381 16,699 17,445 14,682 07/31/2003 17,449 17,575 18,591 15,414 Average Annual Total Returns as of July 31, 2003
Since Inception 1 Year (12/3/98) ------------------------------------------------- Class A Shares* 18.10% 12.68% ------------------------------------------------- Class B Shares** 19.74% 12.85% ------------------------------------------------- Class Y Shares (No Sales Charge) 24.96% 14.22% -------------------------------------------------
*Reflects 5.25% Maximum Front-End Sales Charge. **Reflects Maximum Contingent Deferred Sales Charge of up to 5.00%. Past performance is no guarantee of future results. Investment return and net asset value (NAV) will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than the original cost. The chart and table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares. The chart above represents a comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Fund's benchmark. Class A Shares were not in existence prior to December 8, 1999. Performance calculated for any period up to and through December 8, 1998, is based upon the performance of Class Y Shares. Class B Shares were not in existence prior to December 20, 1998. Performance calculated for any period up to and through December 20, 1998, is based upon the performance of the Class Y Shares, which does not reflect the higher 12b-1 fees or the contingent deferred sales charge (CDSC). Had the CDSC and higher 12b-1 fees been incorporated, total return figures may have been adversely affected. The performance of the Pacific Capital Small Cap Fund is measured against the Russell 2000 Value Index, an unmanaged index comprised of securities in the Russell 2000 Index with a less-than-average growth orientation. The index does not reflect the deduction of fees associated with a mutual fund, such as investment management and fund accounting fees. The Fund's performance reflects the deduction of fees for these value-added services. Investors cannot invest directly in an index, although they can invest in its underlying securities. 28 PACIFIC CAPITAL FUNDS Statements of Assets and Liabilities July 31, 2003
Growth Growth and New Asia Diversified Stock Income Growth Fixed Income Fund Fund Fund Fund ------------- ------------ ----------- ------------ ASSETS: Investments, at value (cost $272,570,496; $150,296,949; $22,848,733; and $237,382,796, respectively).................................... $ 275,799,459 $151,085,065 $25,560,177 $246,816,662 Foreign currency (cost $249,877).................................... -- -- 249,707 -- Interest and dividends receivable................................... 147,031 133,917 28,005 3,298,997 Receivable for capital shares issued................................ 1,197 240 -- 2,881 Receivable from brokers for investments sold........................ 1,817,841 -- 316,563 -- Prepaid expenses and other assets................................... 3,501 2,028 324 3,744 ------------- ------------ ----------- ------------ Total Assets.................................................... 277,769,029 151,221,250 26,154,776 250,122,284 ------------- ------------ ----------- ------------ LIABILITIES: Payable to custodian................................................ -- -- 158,845 -- Distributions payable............................................... -- -- -- 27,474 Payable for capital shares redeemed................................. 8,388 7,319 -- 25,805 Payable to brokers for investments purchased........................ 1,347,151 -- 312,490 -- Accrued expenses and other payables: Investment advisory fees.......................................... 188,182 102,488 8,619 95,817 Sub-investment advisory fees...................................... -- -- 10,774 -- Administration fees............................................... 3,633 1,988 317 3,308 Distribution fees................................................. 13,967 7,564 617 6,375 Other............................................................. 36,871 19,826 38,287 27,932 ------------- ------------ ----------- ------------ Total Liabilities............................................... 1,598,192 139,185 529,949 186,711 ------------- ------------ ----------- ------------ NET ASSETS: Capital (no par value).............................................. 406,217,168 190,283,676 28,854,759 237,842,727 Undistributed (distributions in excess of) net investment income.... -- 20,112 (2,574) (4,807) Accumulated net realized gains (losses) from investment and foreign currency transactions.............................................. (133,275,294) (40,009,839) (5,938,642) 2,663,787 Net unrealized appreciation from investments and foreign currency... 3,228,963 788,116 2,711,284 9,433,866 ------------- ------------ ----------- ------------ Net Assets...................................................... $ 276,170,837 $151,082,065 $25,624,827 $249,935,573 ============= ============ =========== ============ Net Assets Class A........................................................... $ 11,230,855 $ 5,547,985 $ 1,264,190 $ 8,840,694 Class B........................................................... 13,630,250 7,506,634 423,682 5,192,547 Class Y........................................................... 251,309,732 138,027,446 23,936,955 235,902,332 ------------- ------------ ----------- ------------ Total........................................................... $ 276,170,837 $151,082,065 $25,624,827 $249,935,573 ============= ============ =========== ============ Outstanding units of beneficial interest (shares) Class A........................................................... 1,477,880 519,064 129,392 783,685 Class B........................................................... 1,884,598 735,390 44,669 461,021 Class Y........................................................... 32,261,382 12,826,619 2,420,472 20,778,577 ------------- ------------ ----------- ------------ Total........................................................... 35,623,860 14,081,073 2,594,533 22,023,283 ============= ============ =========== ============ Net Asset Value Class A--redemption price per share............................... $ 7.60 $ 10.69 $ 9.77 $ 11.28 ============= ============ =========== ============ Class A--maximum sales charge..................................... 4.00% 4.00% 5.25% 4.00% ------------- ------------ ----------- ------------ Class A--Maximum offering price per share (100%/(100%-maximum sales charge) of net asset value adjusted to the nearest cent)... $ 7.92 $ 11.14 $ 10.31 $ 11.75 ============= ============ =========== ============ Class B--offering price per share*................................ $ 7.23 $ 10.21 $ 9.48 $ 11.26 ============= ============ =========== ============ Class Y--offering and redemption price per share.................. $ 7.79 $ 10.76 $ 9.89 $ 11.35 ============= ============ =========== ============
- -------- * Redemption price per share varies based on length of time shares are held. See notes to financial statements. 29 PACIFIC CAPITAL FUNDS Statements of Assets and Liabilities, Continued July 31, 2003
Ultra Short Short Intermediate Tax-Free Tax-Free Short Government U.S. Government Securities Intermediate Fund Securities Fund Fund Securities Fund ------------ ------------------ ------------ --------------- ASSETS: Investments, at value (cost $255,212,698; $91,764,796; $374,948,993; and $63,650,018, respectively)........... $257,334,194 $93,260,893 $405,890,582 $65,218,102 Cash.................................................... 563 160 -- -- Interest and dividends receivable....................... 1,201,450 926,987 4,570,565 591,785 Receivable for capital shares issued.................... 271 11,700 -- -- Receivable from brokers for investments sold............ -- -- 3,429,420 -- Prepaid expenses and other assets....................... 3,396 910 6,923 781 ------------ ----------- ------------ ----------- Total Assets........................................ 258,539,874 94,200,650 413,897,490 65,810,668 ------------ ----------- ------------ ----------- LIABILITIES: Distributions payable................................... 14,219 6,436 48,311 4,058 Payable for capital shares redeemed..................... -- 7,000 -- -- Payable to brokers for investments purchased............ 2,757,641 -- -- -- Accrued expenses and other payables: Investment advisory fees.............................. 41,615 22,698 163,028 21,666 Administration fees................................... 1,451 1,123 5,485 802 Distribution fees..................................... 4,371 1,048 6,650 498 Other................................................. 23,491 11,446 44,863 13,059 ------------ ----------- ------------ ----------- Total Liabilities................................... 2,842,788 49,751 268,337 40,083 ------------ ----------- ------------ ----------- NET ASSETS: Capital (no par value).................................. 253,572,666 92,625,993 381,300,657 64,202,492 Undistributed net investment income..................... 7,151 41 37 9 Accumulated net realized gains (losses) from investment transactions........................................... (4,227) 28,768 1,386,870 -- Net unrealized appreciation from investments............ 2,121,496 1,496,097 30,941,589 1,568,084 ------------ ----------- ------------ ----------- Net Assets.......................................... $255,697,086 $94,150,899 $413,629,153 $65,770,585 ============ =========== ============ =========== Net Assets Class A............................................... $ 12,786,913 $ 5,326,881 $ 11,828,935 $ 2,321,501 Class B............................................... 1,994,077 -- 4,642,743 -- Class Y............................................... 240,916,096 88,824,018 397,157,475 63,449,084 ------------ ----------- ------------ ----------- Total............................................... $255,697,086 $94,150,899 $413,629,153 $65,770,585 ============ =========== ============ =========== Outstanding units of beneficial interest (shares) Class A............................................... 1,248,501 534,135 1,100,741 224,151 Class B............................................... 194,694 -- 432,045 -- Class Y............................................... 23,510,888 8,889,682 36,815,166 6,092,897 ------------ ----------- ------------ ----------- Total............................................... 24,954,083 9,423,817 38,347,952 6,317,048 ============ =========== ============ =========== Net Asset Value Class A--redemption price per share................... $ 10.24 $ 9.97 $ 10.75 $ 10.36 ============ =========== ============ =========== Class A--maximum sales charge......................... 1.75% 2.25% 4.00% 2.25% ------------ ----------- ------------ ----------- Class A--Maximum offering price per share (100%/(100%-maximum sales charge) of net asset value adjusted to the nearest cent)........................ $ 10.42 $ 10.20 $ 11.20 $ 10.60 ============ =========== ============ =========== Class B--offering price per share*.................... $ 10.24 $ -- $ 10.75 $ -- ============ =========== ============ =========== Class Y--offering and redemption price per share...... $ 10.25 $ 9.99 $ 10.79 $ 10.41 ============ =========== ============ ===========
- -------- * Redemption price per share varies based on length of time shares are held. See notes to financial statements. 30 PACIFIC CAPITAL FUNDS Statements of Assets and Liabilities, Continued July 31, 2003
International Small Cap Stock Fund Value Fund Fund ------------- ------------ ----------- ASSETS: Investments, at value (cost $54,858,278; $208,001,055; and $72,902,677, respectively). $ 60,908,666 $214,072,276 $87,839,118 Foreign currency (cost $124,710)...................................................... 114,922 -- -- Interest and dividends receivable..................................................... 85,078 423,335 61,065 Receivable for capital shares issued.................................................. 4,603 -- 1,182 Receivable from brokers for investments sold.......................................... 1,638,821 -- 2,287,525 Reclaims receivable................................................................... 67,484 -- -- Prepaid expenses and other assets..................................................... 1,849 2,970 1,257 ------------ ------------ ----------- Total Assets...................................................................... 62,821,423 214,498,581 90,190,147 ------------ ------------ ----------- LIABILITIES: Payable to brokers for investments purchased.......................................... 761,686 -- 509,989 Accrued expenses and other payables: Investment advisory fees............................................................ 18,626 146,730 29,036 Sub-investment advisory fees........................................................ 34,054 -- 42,048 Administration fees................................................................. 823 2,836 1,170 Distribution fees................................................................... 772 1,564 2,364 Other............................................................................... 37,016 29,648 14,747 ------------ ------------ ----------- Total Liabilities................................................................. 852,977 180,778 599,354 ------------ ------------ ----------- NET ASSETS: Capital (no par value)................................................................ 101,126,101 255,790,454 74,785,060 Undistributed (distributions in excess of) net investment income...................... (539,640) 93,355 -- Accumulated net realized losses from investment, option, and foreign currency transactions......................................................................... (44,658,657) (47,637,227) (130,708) Net unrealized appreciation from investments and foreign currency..................... 6,040,642 6,071,221 14,936,441 ------------ ------------ ----------- Net Assets........................................................................ $ 61,968,446 $214,317,803 $89,590,793 ============ ============ =========== Net Assets Class A............................................................................. $ 874,434 $ 2,145,558 $ 1,595,328 Class B............................................................................. 536,350 1,291,481 2,475,508 Class Y............................................................................. 60,557,662 210,880,764 85,519,957 ------------ ------------ ----------- Total............................................................................. $ 61,968,446 $214,317,803 $89,590,793 ============ ============ =========== Outstanding units of beneficial interest (shares) Class A............................................................................. 135,346 291,154 120,448 Class B............................................................................. 85,941 177,628 192,079 Class Y............................................................................. 9,218,076 28,574,286 6,429,480 ------------ ------------ ----------- Total.............................................................................. 9,439,363 29,043,068 6,742,007 ============ ============ =========== Net Asset Value Class A-- redemption price per share................................................ $ 6.46 $ 7.37 $ 13.24 ============ ============ =========== Class A-- maximum sales charge...................................................... 5.25% 4.00% 5.25% ------------ ------------ ----------- Class A--Maximum offering price per share (100%/(100%-maximum sales charge) of net asset value adjusted to the nearest cent). $ 6.82 $ 7.68 $ 13.97 ============ ============ =========== Class B--offering price per share*.................................................. $ 6.24 $ 7.27 $ 12.89 ============ ============ =========== Class Y--offering and redemption price per share.................................... $ 6.57 $ 7.38 $ 13.30 ============ ============ ===========
- -------- * Redemption price per share varies based on length of time shares are held. See notes to financial statements. 31 PACIFIC CAPITAL FUNDS Statements of Operations For the Year Ended July 31, 2003
Growth Growth and New Asia Diversified Stock Income Growth Fixed Income Fund Fund Fund Fund ------------ ----------- ----------- ------------ Investment Income: Interest income.......................................................... $ 8,819 $ 1,463 $ 1,391 $12,133,189 Dividend income.......................................................... 1,856,735 2,208,853 587,856 44,939 Foreign tax withholding.................................................. -- -- (69,704) -- ------------ ----------- ----------- ----------- Total Investment Income.............................................. 1,865,554 2,210,316 519,543 12,178,128 ------------ ----------- ----------- ----------- Expenses: Investment advisory fees................................................. 1,951,135 1,095,498 102,192 1,454,107 Sub-investment advisory fees............................................. -- -- 90,161 -- Administration fees...................................................... 390,231 219,102 34,196 387,764 Distribution fees--Class A............................................... 81,083 39,953 9,658 53,797 Distribution fees--Class B............................................... 130,796 73,519 3,577 54,532 Accounting fees.......................................................... 76,968 45,396 17,100 81,551 Custodian fees........................................................... 28,466 20,172 86,705 24,239 Transfer agent fees...................................................... 113,095 76,845 48,261 65,232 Legal and audit fees..................................................... 40,837 24,787 10,648 40,330 Trustees' fees and expenses.............................................. 20,333 11,609 1,790 20,903 Registration and filing fees............................................. 13,853 12,542 987 2,723 Other.................................................................... 42,423 34,550 5,027 33,842 ------------ ----------- ----------- ----------- Total expenses before voluntary fee reductions....................... 2,889,220 1,653,973 410,302 2,219,020 Expenses voluntarily reduced: Investment advisory fees........................................... -- -- -- (363,527) Administration fees................................................ -- -- (2,138) -- Distribution fees--Class A......................................... (54,055) (26,635) (6,439) (35,864) ------------ ----------- ----------- ----------- Net Expenses......................................................... 2,835,165 1,627,338 401,725 1,819,629 ------------ ----------- ----------- ----------- Net Investment Income (Loss)............................................. (969,611) 582,978 117,818 10,358,499 ------------ ----------- ----------- ----------- Realized/Unrealized Gains (Losses) from Investments: Net realized gains (losses) from investment and foreign currency transactions............................................................ (17,023,619) (4,181,124) (1,615,763) 6,645,110 Net change in unrealized appreciation (depreciation) from investments and foreign currency........................................................ 47,151,913 17,295,259 2,477,911 (3,022,403) ------------ ----------- ----------- ----------- Net realized/unrealized gains from investments and foreign currency...... 30,128,294 13,114,135 862,148 3,622,707 ------------ ----------- ----------- ----------- Change in net assets resulting from operations........................... $ 29,158,683 $13,697,113 $ 979,966 $13,981,206 ============ =========== =========== ===========
See notes to financial statements. 32 PACIFIC CAPITAL FUNDS Statements of Operations, Continued For the Year Ended July 31, 2003
Ultra Short Short Intermediate Tax-Free Tax-Free Short Government U.S. Government Securities Intermediate Fund Securities Fund Fund Securities Fund ----------- ------------------ ----------- --------------- Investment Income: Interest income......................................... $ 6,188,092 $2,605,479 $21,604,161 $1,859,326 Dividend income......................................... -- -- 51,731 20,192 ----------- ---------- ----------- ---------- Total Investment Income............................. 6,188,092 2,605,479 21,655,892 1,879,518 ----------- ---------- ----------- ---------- Expenses: Investment advisory fees................................ 871,516 345,073 2,658,856 279,734 Administration fees..................................... 348,610 110,425 709,033 89,516 Distribution fees--Class A.............................. 110,178 22,551 90,316 17,106 Distribution fees--Class B.............................. 18,568 -- 50,789 -- Accounting fees......................................... 72,658 27,481 158,335 23,961 Custodian fees.......................................... 19,226 11,369 33,341 16,124 Transfer agent fees..................................... 62,504 29,192 67,835 28,382 Legal and audit fees.................................... 34,888 14,086 69,162 12,375 Trustees' fees and expenses............................. 18,574 5,749 38,834 4,732 Registration and filing fees............................ 2,062 1,414 3,269 504 Other................................................... 29,961 9,948 59,696 8,686 ----------- ---------- ----------- ---------- Total expenses before voluntary fee reductions...... 1,588,745 577,288 3,939,466 481,120 Expenses voluntarily reduced: Investment advisory fees.......................... (456,762) (158,870) (664,714) (55,946) Administration fees............................... (198,274) (17,302) -- (5,595) Distribution fees--Class A........................ (73,452) (15,034) (60,211) (11,404) ----------- ---------- ----------- ---------- Net Expenses........................................ 860,257 386,082 3,214,541 408,175 ----------- ---------- ----------- ---------- Net Investment Income................................... 5,327,835 2,219,397 18,441,351 1,471,343 ----------- ---------- ----------- ---------- Realized/Unrealized Gains (Losses) from Investments: Net realized gains (losses) from investment transactions (4,227) 253,411 1,612,128 72,749 Net change in unrealized depreciation from investments.. (1,315,978) (554,183) (2,831,954) (105,000) ----------- ---------- ----------- ---------- Net realized/unrealized losses from investments......... (1,320,205) (300,772) (1,219,826) (32,251) ----------- ---------- ----------- ---------- Change in net assets resulting from operations.......... $ 4,007,630 $1,918,625 $17,221,525 $1,439,092 =========== ========== =========== ==========
See notes to financial statements. 33 PACIFIC CAPITAL FUNDS Statements of Operations, Continued For the Year Ended July 31, 2003
International Value Small Cap Stock Fund Fund Fund ------------- ------------ ----------- Investment Income: Interest income............................................................... $ 1,055 $ 3,601 $ 2,168 Dividend income............................................................... 1,412,702 4,841,650 1,041,763 Foreign tax withholding....................................................... (164,020) -- -- ----------- ------------ ----------- Total Investment Income................................................... 1,249,737 4,845,251 1,043,931 ----------- ------------ ----------- Expenses: Investment advisory fees...................................................... 297,070 1,632,669 412,322 Sub-investment advisory fees.................................................. 292,784 -- 328,971 Administration fees........................................................... 86,080 326,537 108,871 Distribution fees--Class A.................................................... 8,882 14,732 9,307 Distribution fees--Class B.................................................... 5,356 12,171 19,645 Accounting fees............................................................... 33,178 65,877 25,257 Custodian fees................................................................ 103,615 26,980 21,590 Transfer agent fees........................................................... 54,358 53,290 55,510 Legal and audit fees.......................................................... 12,348 34,441 13,510 Trustees' fees and expenses................................................... 4,644 17,575 5,966 Registration and filing fees.................................................. 12,771 1,839 2,180 Other......................................................................... 9,325 27,459 10,695 ----------- ------------ ----------- Total expenses before voluntary fee reductions............................ 920,411 2,213,570 1,013,824 Expenses voluntarily reduced: Investment advisory fees................................................ (53,799) -- (68,043) Distribution fees--Class A.............................................. (5,922) (9,822) (6,204) ----------- ------------ ----------- Net Expenses.............................................................. 860,690 2,203,748 939,577 ----------- ------------ ----------- Net Investment Income......................................................... 389,047 2,641,503 104,354 ----------- ------------ ----------- Realized/Unrealized Gains (Losses) from Investments: Net realized losses from investment, option, and foreign currency transactions (7,799,455) (13,768,327) (126,637) Net change in unrealized appreciation from investments and foreign currency... 9,465,637 27,939,859 15,810,277 ----------- ------------ ----------- Net realized/unrealized gains from investments, options, and foreign currency. 1,666,182 14,171,532 15,683,640 ----------- ------------ ----------- Change in net assets resulting from operations................................ $ 2,055,229 $ 16,813,035 $15,787,994 =========== ============ ===========
See notes to financial statements. 34 PACIFIC CAPITAL FUNDS Statements of Changes in Net Assets
Growth Stock Fund Growth and Income Fund New Asia Growth Fund --------------------------- -------------------------- -------------------------- For the Year For the Year For the Year For the Year For the Year For the Year Ended Ended Ended Ended Ended Ended July 31, 2003 July 31, 2002 July 31, 2003 July 31, 2002 July 31, 2003 July 31, 2002 ------------- ------------- ------------- ------------- ------------- ------------- From Investment Activities: Operations: Net investment income (loss)..... $ (969,611) $ (1,924,959) $ 582,978 $ 195,770 $ 117,818 $ 18,958 Net realized losses from investment and foreign currency transactions........... (17,023,619) (81,090,991) (4,181,124) (32,025,695) (1,615,763) (1,454,850) Net change in unrealized appreciation (depreciation) from investments and foreign currency........................ 47,151,913 (29,407,716) 17,295,259 (20,154,879) 2,477,911 2,772,743 ------------ ------------- ------------ ------------ ----------- ----------- Change in net assets resulting from operations........................ 29,158,683 (112,423,666) 13,697,113 (51,984,804) 979,966 1,336,851 ------------ ------------- ------------ ------------ ----------- ----------- Distributions to Class A Shareholders: From net investment income....... -- -- (10,822) -- (1,795) -- Distributions to Class Y Shareholders: From net investment income....... -- -- (557,589) (190,225) (62,183) (360) ------------ ------------- ------------ ------------ ----------- ----------- Change in net assets from shareholder distributions......... -- -- (568,411) (190,225) (63,978) (360) ------------ ------------- ------------ ------------ ----------- ----------- Change in net assets from share transactions...................... 25,629,089 (42,031,476) 7,316,182 (2,276,778) 2,882,709 (2,168,323) ------------ ------------- ------------ ------------ ----------- ----------- Change in net assets............... 54,787,772 (154,455,142) 20,444,884 (54,451,807) 3,798,697 (831,832) ------------ ------------- ------------ ------------ ----------- ----------- Net Assets: Beginning of year................ 221,383,065 375,838,207 130,637,181 185,088,988 21,826,130 22,657,962 ------------ ------------- ------------ ------------ ----------- ----------- End of year...................... $276,170,837 $ 221,383,065 $151,082,065 $130,637,181 $25,624,827 $21,826,130 ============ ============= ============ ============ =========== ===========
See notes to financial statements. 35 PACIFIC CAPITAL FUNDS Statements of Changes in Net Assets, Continued
Diversified Fixed Ultra Short Short Intermediate U.S. Income Fund Government Fund Government Securities Fund -------------------------- -------------------------- -------------------------- For the Year For the Year For the Year For the Year For the Year For the Year Ended Ended Ended Ended Ended Ended July 31, 2003 July 31, 2002 July 31, 2003 July 31, 2002 July 31, 2003 July 31, 2002 ------------- ------------- ------------- ------------- ------------- ------------- From Investment Activities: Operations: Net investment income.............. $ 10,358,499 $ 12,036,822 $ 5,327,835 $ 8,031,414 $ 2,219,397 $ 2,221,250 Net realized gains (losses) from investment transactions........... 6,645,110 6,650,858 (4,227) 244,413 253,411 479,070 Net change in unrealized appreciation (depreciation) from investments....................... (3,022,403) 459,012 (1,315,978) 2,049,659 (554,183) 1,361,647 ------------ ------------ ------------ ------------ ----------- ----------- Change in net assets resulting from operations.......................... 13,981,206 19,146,692 4,007,630 10,325,486 1,918,625 4,061,967 ------------ ------------ ------------ ------------ ----------- ----------- Distributions to Class A Shareholders: From net investment income......... (289,985) (338,116) (327,809) (446,431) (88,244) (46,594) From net realized gains............ (66,756) -- (16,502) (4,025) (28,186) (5,775) Distributions to Class B Shareholders: From net investment income......... (180,337) (196,334) (27,122) (26,142) -- -- From net realized gains............ (52,356) -- (1,896) (339) -- -- Distributions to Class Y Shareholders: From net investment income......... (9,893,360) (11,502,867) (4,972,904) (7,558,841) (2,131,165) (2,174,656) From net realized gains............ (2,192,141) -- (225,728) (71,682) (675,526) (287,909) ------------ ------------ ------------ ------------ ----------- ----------- Change in net assets from shareholder distributions....................... (12,674,935) (12,037,317) (5,571,961) (8,107,460) (2,923,121) (2,514,934) ------------ ------------ ------------ ------------ ----------- ----------- Change in net assets from share transactions........................ 14,378,040 (15,450,255) 55,936,532 33,802,446 30,850,923 14,667,361 ------------ ------------ ------------ ------------ ----------- ----------- Change in net assets................. 15,684,311 (8,340,880) 54,372,201 36,020,472 29,846,427 16,214,394 ------------ ------------ ------------ ------------ ----------- ----------- Net Assets: Beginning of year.................. 234,251,262 242,592,142 201,324,885 165,304,413 64,304,472 48,090,078 ------------ ------------ ------------ ------------ ----------- ----------- End of year........................ $249,935,573 $234,251,262 $255,697,086 $201,324,885 $94,150,899 $64,304,472 ============ ============ ============ ============ =========== ===========
See notes to financial statements. 36 PACIFIC CAPITAL FUNDS Statements of Changes in Net Assets, Continued
Tax-Free Short Intermediate Tax-Free Securities Fund Securities Fund International Stock Fund -------------------------- -------------------------- -------------------------- For the Year For the Year For the Year For the Year For the Year For the Year Ended Ended Ended Ended Ended Ended July 31, 2003 July 31, 2002 July 31, 2003 July 31, 2002 July 31, 2003 July 31, 2002 ------------- ------------- ------------- ------------- ------------- ------------- From Investment Activities: Operations: Net investment income............ $ 18,441,351 $ 20,546,004 $ 1,471,343 $ 1,448,395 $ 389,047 $ 9,471 Net realized gains (losses) from investment, option, and foreign currency transactions........... 1,612,128 4,529,744 72,749 241,161 (7,799,455) (17,664,454) Net change in unrealized appreciation (depreciation) from investments and foreign currency........................ (2,831,954) 5,118,184 (105,000) 791,335 9,465,637 1,926,538 ------------ ------------ ----------- ----------- ----------- ------------ Change in net assets resulting from operations........................ 17,221,525 30,193,932 1,439,092 2,480,891 2,055,229 (15,728,445) ------------ ------------ ----------- ----------- ----------- ------------ Distributions to Class A Shareholders: From net investment income....... (473,346) (424,975) (54,650) (53,718) -- -- From net realized gains.......... (67,655) (97,187) (10,753) -- -- -- Distributions to Class B Shareholders: From net investment income....... (161,539) (183,108) -- -- -- -- From net realized gains.......... (31,494) (51,915) -- -- -- -- Distributions to Class Y Shareholders: From net investment income....... (17,806,466) (19,937,921) (1,416,693) (1,394,677) -- -- From net realized gains.......... (2,406,209) (4,419,228) (241,586) -- -- -- ------------ ------------ ----------- ----------- ----------- ------------ Change in net assets from shareholder distributions......... (20,946,709) (25,114,334) (1,723,682) (1,448,395) -- -- ------------ ------------ ----------- ----------- ----------- ------------ Change in net assets from share transactions...................... (45,601,269) (18,981,984) 14,299,296 9,134,779 7,741,956 (14,347,900) ------------ ------------ ----------- ----------- ----------- ------------ Change in net assets............... (49,326,453) (13,902,386) 14,014,706 10,167,275 9,797,185 (30,076,345) ------------ ------------ ----------- ----------- ----------- ------------ Net Assets: Beginning of year................ 462,955,606 476,857,992 51,755,879 41,588,604 52,171,261 82,247,606 ------------ ------------ ----------- ----------- ----------- ------------ End of year...................... $413,629,153 $462,955,606 $65,770,585 $51,755,879 $61,968,446 $ 52,171,261 ============ ============ =========== =========== =========== ============
See notes to financial statements. 37 PACIFIC CAPITAL FUNDS Statements of Changes in Net Assets, Continued
Value Fund Small Cap Fund -------------------------- -------------------------- For the Year For the Year For the Year For the Year Ended Ended Ended Ended July 31, 2003 July 31, 2002 July 31, 2003 July 31, 2002 ------------- ------------- ------------- ------------- From Investment Activities: Operations: Net investment income..................................... $ 2,641,503 $ 1,654,462 $ 104,354 $ 338,718 Net realized gains (losses) from investment transactions.. (13,768,327) (29,928,320) (126,637) 8,357,056 Net change in unrealized appreciation (depreciation) from investments.............................................. 27,939,859 (27,069,754) 15,810,277 (9,146,353) ------------ ------------ ----------- ----------- Change in net assets resulting from operations.............. 16,813,035 (55,343,612) 15,787,994 (450,579) ------------ ------------ ----------- ----------- Distributions to Class A Shareholders: From net investment income................................ (20,330) (10,639) (2,625) (2,859) From net realized gains................................... -- -- (150,765) (69,677) Distributions to Class B Shareholders: From net investment income................................ (3,545) -- -- (310) From net realized gains................................... -- -- (242,247) (82,711) Distributions to Class Y Shareholders: From net investment income................................ (2,538,440) (1,665,914) (195,037) (325,568) From net realized gains................................... -- -- (7,348,094) (5,158,310) ------------ ------------ ----------- ----------- Change in net assets from shareholder distributions......... (2,562,315) (1,676,553) (7,938,768) (5,639,435) ------------ ------------ ----------- ----------- Change in net assets from share transactions................ (2,253,114) 24,186,766 10,461,886 21,677,243 ------------ ------------ ----------- ----------- Change in net assets........................................ 11,997,606 (32,833,399) 18,311,112 15,587,229 ------------ ------------ ----------- ----------- Net Assets: Beginning of year......................................... 202,320,197 235,153,596 71,279,681 55,692,452 ------------ ------------ ----------- ----------- End of year............................................... $214,317,803 $202,320,197 $89,590,793 $71,279,681 ============ ============ =========== ===========
See notes to financial statements. 38 PACIFIC CAPITAL FUNDS Growth Stock Fund Schedule of Portfolio Investments July 31, 2003
Security Shares Description Value - --------- ----------------------------------- ------------ Common Stocks (95.3%) Advertising (1.1%) 42,180 Omnicom Group, Inc................. $ 3,116,258 ------------ Aerospace/Defense (1.0%) 53,000 Lockheed Martin Corp............... 2,774,020 ------------ Beverages (3.5%) 75,600 Anheuser-Busch Cos., Inc........... 3,917,592 124,444 PepsiCo, Inc....................... 5,733,135 ------------ 9,650,727 ------------ Business Equipment & Services (5.4%) 44,410 Affiliated Computer Services, Inc., Class A (b)....................... 2,200,516 215,560 BearingPoint, Inc. (b)............. 2,371,160 148,490 Concord EFS, Inc. (b).............. 2,020,949 109,520 First Data Corp.................... 4,135,475 65,570 Fiserv, Inc. (b)................... 2,559,853 47,287 Paychex, Inc....................... 1,538,246 ------------ 14,826,199 ------------ Computers & Peripherals (6.7%) 534,704 Cisco Systems, Inc. (b)............ 10,437,421 104,020 Dell, Inc. (b)..................... 3,503,394 162,630 EMC Corp. (b)...................... 1,730,383 23,140 Lexmark International, Inc. (b).... 1,484,894 26,150 SanDisk Corp. (b).................. 1,482,444 ------------ 18,638,536 ------------ Consumer Goods & Services (0.6%) 37,340 Clorox Co. (The)................... 1,620,183 ------------ Diversified Operations (0.8%) 16,070 3M Co.............................. 2,253,014 ------------ Electrical Equipment (4.4%) 430,093 General Electric Co................ 12,231,845 ------------ Electronic Components/Instruments (0.5%) 62,030 Jabil Circuit, Inc. (b)............ 1,429,792 ------------ Electronics--Semiconductors (8.4%) 222,740 Applied Materials, Inc. (b)........ 4,343,430 239,360 Intel Corp......................... 5,972,031 51,070 International Rectifier Corp. (b).. 1,409,532 34,730 KLA-Tencor Corp. (b)............... 1,793,805 118,170 Micron Technology, Inc. (b)........ 1,730,009 32,370 QLogic Corp. (b)................... 1,364,396 176,240 Skyworks Solutions, Inc. (b)....... 1,499,802 220,072 Taiwan Semiconductor Manufacturing Co., Ltd., ADR (b)........................... 2,200,716 148,580 Texas Instruments, Inc............. 2,803,705 ------------ 23,117,426 ------------ Entertainment (1.7%) 109,740 Viacom, Inc., Class B (b).......... 4,775,885 ------------ Financial Services (9.8%) 114,220 Capital One Financial Corp......... 5,472,280 156,000 Citigroup, Inc..................... 6,988,799 75,690 Fannie Mae......................... 4,847,188 38,340 Fifth Third Bancorp................ 2,109,083 48,370 Goldman Sachs Group, Inc........... 4,214,962
Security Shares Description Value --------- ---------------------------------- ------------ Common Stocks, continued Financial Services, continued 70,750 Morgan Stanley....................... $ 3,356,380 ------------ 26,988,692 ------------ Food Distributors (0.7%) 48,350 Performance Food Group Co. (b)....... 1,826,663 ------------ Food Processing & Packaging (1.0%) 89,010 Dean Foods Co. (b)................... 2,664,069 ------------ Health Care (4.8%) 75,955 Cardinal Health, Inc................. 4,158,536 48,300 First Health Group Corp. (b)......... 1,247,106 85,500 Lincare Holdings, Inc. (b)........... 3,112,200 55,410 UnitedHealth Group, Inc.............. 2,886,307 23,690 WellPoint Health Networks, Inc. (b)............................ 1,981,669 ------------ 13,385,818 ------------ Insurance (3.4%) 111,450 American International Group, Inc.... 7,155,090 45,140 Hartford Financial Services Group, Inc. (The).......................... 2,355,857 ------------ 9,510,947 ------------ Media--Radio Broadcasting (0.8%) 83,890 Hispanic Broadcasting Corp., Class A (b)......................... 2,196,240 ------------ Medical--Biotechnology (3.7%) 87,250 Amgen, Inc. (b)...................... 6,070,855 47,690 Charles River Laboratories International, Inc. (b)............. 1,772,160 98,990 Pharmaceutical Product Development, Inc. (b)............... 2,479,700 ------------ 10,322,715 ------------ Medical Instruments (2.3%) 89,990 Medtronic, Inc....................... 4,634,485 35,010 Zimmer Holdings, Inc. (b)............ 1,673,828 ------------ 6,308,313 ------------ Medical Services (2.4%) 48,550 Express Scripts, Inc. (b)............ 3,204,300 59,280 Quest Diagnostics, Inc. (b).......... 3,542,573 ------------ 6,746,873 ------------ Medical Supplies (0.8%) 41,690 Patterson Dental Co. (b)............. 2,230,415 ------------ Oil & Gas--Exploration & Production Services (0.8%) 68,700 National-Oilwell, Inc. (b)........... 1,264,080 23,110 Weatherford International Ltd. (b)... 838,200 ------------ 2,102,280 ------------ Packaging & Containers (0.4%) 49,300 Pactiv Corp. (b)..................... 973,675 ------------ Pharmaceuticals (8.7%) 58,920 Abbott Laboratories.................. 2,312,610 32,820 AmerisourceBergen Corp............... 2,070,614 35,390 Biovail Corp. (b).................... 1,358,622 81,950 Johnson & Johnson.................... 4,244,191 55,540 Lilly (Eli) & Co..................... 3,656,754
See notes to financial statements. 39 PACIFIC CAPITAL FUNDS Growth Stock Fund Schedule of Portfolio Investments, Continued July 31, 2003
Security Shares Description Value - --------- ------------------------------- ------------ Common Stocks, continued Pharmaceuticals, continued 312,544 Pfizer, Inc.................... $ 10,426,467 ------------ 24,069,258 ------------ Publishing (0.9%) 42,280 McGraw-Hill Cos., Inc. (The)... 2,569,778 ------------ Restaurants (1.7%) 39,100 Brinker International, Inc. (b) 1,368,500 119,090 Starbucks Corp. (b)............ 3,254,730 ------------ 4,623,230 ------------ Retail (10.1%) 26,290 AutoZone, Inc. (b)............. 2,188,905 83,550 Bed Bath & Beyond, Inc. (b).... 3,232,550 72,030 Kohl's Corp. (b)............... 4,274,981 122,410 Lowe's Cos., Inc............... 5,821,819 157,040 Wal-Mart Stores, Inc........... 8,780,105 107,790 Walgreen Co.................... 3,225,077 ------------ 27,523,437 ------------ Retail--Food Chain (0.5%) 25,760 Whole Foods Market, Inc. (b)... 1,313,142 ------------ Software & Computer Services (6.8%) 37,110 Mercury Interactive Corp. (b).. 1,460,650 375,870 Microsoft Corp................. 9,922,968 317,960 Oracle Corp. (b)............... 3,815,520 118,863 VERITAS Software Corp. (b)..... 3,660,980 ------------ 18,860,118 ------------
Security Shares Description Value --------- -------------------------- ------------ Common Stocks, continued Telecommunications--Services & Equipment (0.4%) 32,140 QUALCOMM, Inc.................. $ 1,203,964 ------------ Transportation (0.9%) 37,500 FedEx Corp..................... 2,414,625 ------------ Utilities--Telecommunications (0.3%) 21,980 Verizon Communications......... 766,223 ------------ Total Common Stocks (Cost $261,386,693) 263,034,360 ------------ Depositary Receipts (3.9%) 220,000 Nasdaq 100 Share Index (b)..... 7,002,600 39,150 S&P 500 Depositary Receipt..... 3,891,119 ------------ Total Depositary Receipts (Cost $9,312,423) 10,893,719 ------------ Investment Company (0.7%) 1,871,380 LEADER Money Market Fund, Institutional Shares.......... 1,871,380 ------------ Total Investment Company (Cost $1,871,380) 1,871,380 ------------ Total Investments (Cost $272,570,496) (a)--99.9% 275,799,459 Other assets in excess of liabilities--0.1% 371,378 ------------ Net Assets--100.0% $276,170,837 ============
- -------- (a) Represents cost for financial reporting purposes and differs from value by unrealized appreciation (depreciation) of securities as follows: Unrealized appreciation.... $ 31,344,667 Unrealized depreciation.... (28,115,704) ------------ Net unrealized appreciation $ 3,228,963 ============
Aggregate cost for federal income tax purposes is substantially the same. (b) Non-income producing security. ADR--American Depositary Receipt See notes to financial statements. 40 PACIFIC CAPITAL FUNDS Growth and Income Fund Schedule of Portfolio Investments July 31, 2003
Security Shares Description Value - ------- ---------------------------------- ------------- Common Stocks (96.5%) Aerospace/Defense (0.6%) 16,070 Alliant Techsystems, Inc. (b)..... $ 882,243 ------------- Banks (3.5%) 34,760 Bank of America Corp.............. 2,870,133 108,590 MBNA Corp......................... 2,420,471 ------------- 5,290,604 ------------- Beverages (3.6%) 37,640 Anheuser-Busch Cos., Inc.......... 1,950,504 33,750 Coca-Cola Co. (The)............... 1,517,738 41,515 PepsiCo, Inc...................... 1,912,596 ------------- 5,380,838 ------------- Business Equipment & Services (1.3%) 24,740 Deluxe Corp....................... 1,098,456 25,995 Paychex, Inc...................... 845,617 ------------- 1,944,073 ------------- Chemicals (1.0%) 32,740 E.I. du Pont de Nemours & Co...... 1,438,596 ------------- Computers & Peripherals (6.6%) 144,510 Cisco Systems, Inc. (b)........... 2,820,835 54,330 Dell, Inc. (b).................... 1,829,834 148,570 EMC Corp. (b)..................... 1,580,785 83,700 Hewlett-Packard Co................ 1,771,929 24,590 International Business Machines Corp............................. 1,997,938 ------------- 10,001,321 ------------- Consumer Goods & Services (1.5%) 25,120 Procter & Gamble Co............... 2,207,294 ------------- Data Processing (1.0%) 39,930 DST Systems, Inc. (b)............. 1,467,827 ------------- Diversified Operations (3.2%) 10,560 3M Co............................. 1,480,512 45,930 Honeywell International, Inc...... 1,298,900 27,130 United Technologies Corp.......... 2,040,990 ------------- 4,820,402 ------------- Electrical Equipment (4.5%) 239,560 General Electric Co............... 6,813,086 ------------- Electronic Components/Instruments (2.1%) 152,740 Flextronics International Ltd. (b) 1,680,140 110,090 Vishay Intertechnology, Inc. (b).. 1,464,197 ------------- 3,144,337 ------------- Electronics--Semiconductors (4.4%) 74,980 Applied Materials, Inc. (b)....... 1,462,110 128,280 Intel Corp........................ 3,200,586 38,340 Teradyne, Inc. (b)................ 630,693 74,674 Texas Instruments, Inc............ 1,409,098 ------------- 6,702,487 ------------- Entertainment (1.9%) 64,590 Viacom, Inc., Class B (b)......... 2,810,957 ------------- Financial Services (8.4%) 72,380 American Express Co............... 3,197,025 78,710 Citigroup, Inc.................... 3,526,208
Security Shares Description Value - ------- ---------------------------------- ------------- Common Stocks, continued Financial Services, continued 17,000 Fannie Mae........................ $ 1,088,680 28,980 Fifth Third Bancorp............... 1,594,190 42,905 J.P. Morgan Chase & Co............ 1,503,820 39,130 Morgan Stanley.................... 1,856,327 ------------- 12,766,250 ------------- Food Distributors (0.9%) 46,580 SYSCO Corp........................ 1,403,455 ------------- Health Care (1.6%) 27,270 AdvancePCS (b).................... 1,033,260 19,030 Anthem, Inc. (b).................. 1,436,956 ------------- 2,470,216 ------------- Insurance (5.5%) 77,585 American International Group, Inc. 4,980,957 68,540 Marsh & McLennan Cos., Inc........ 3,400,955 ------------- 8,381,912 ------------- Insurance--Life & Health (0.7%) 31,020 AFLAC, Inc........................ 995,122 ------------- Media--Cable TV (1.6%) 80,750 Comcast Corp., Class A (b)........ 2,448,340 ------------- Medical--Biotechnology (1.8%) 39,440 Amgen, Inc. (b)................... 2,744,235 ------------- Medical Instruments (2.2%) 37,490 Medtronic, Inc.................... 1,930,735 30,290 Zimmer Holdings, Inc. (b)......... 1,448,165 ------------- 3,378,900 ------------- Metal & Mineral Production (0.6%) 34,030 Alcoa, Inc........................ 945,013 ------------- Motorcycle Manufacturing (0.6%) 18,240 Harley-Davidson, Inc.............. 855,091 ------------- Oil & Gas--Exploration & Production Services (5.4%) 23,180 ChevronTexaco Corp................ 1,671,510 13,798 Devon Energy Corp................. 653,611 121,180 Exxon Mobil Corp.................. 4,311,584 32,470 Marathon Oil Corp................. 835,778 16,110 Schlumberger Ltd.................. 726,078 ------------- 8,198,561 ------------- Pharmaceuticals (7.0%) 21,000 AmerisourceBergen Corp............ 1,324,890 51,616 Johnson & Johnson................. 2,673,193 24,140 Lilly (Eli) & Co.................. 1,589,378 149,648 Pfizer, Inc....................... 4,992,257 ------------- 10,579,718 ------------- Real Estate (2.8%) 30,490 Healthcare Realty Trust, Inc...... 999,767 35,690 iStar Financial, Inc.............. 1,293,763 46,660 Simon Property Group, Inc......... 1,976,051 ------------- 4,269,581 -------------
See notes to financial statements. 41 PACIFIC CAPITAL FUNDS Growth and Income Fund Schedule of Portfolio Investments, Continued July 31, 2003
Security Shares Description Value - ------- ------------------------------------ ------------- Common Stocks, continued Restaurants (1.3%) 23,610 Applebee's International, Inc....... $ 753,159 45,976 Starbucks Corp. (b)................. 1,256,524 ------------- 2,009,683 ------------- Retail (9.9%) 37,040 Best Buy Co., Inc. (b).............. 1,616,796 45,430 Chico's FAS, Inc. (b)............... 1,233,425 51,390 Costco Wholesale Corp. (b).......... 1,904,000 57,190 Home Depot, Inc. (The).............. 1,784,328 40,120 Hot Topic, Inc. (b)................. 1,159,468 36,195 Kohl's Corp. (b).................... 2,148,173 87,380 Wal-Mart Stores, Inc................ 4,885,415 ------------- 14,731,605 ------------- Savings & Loans (0.7%) 26,810 Washington Mutual, Inc.............. 1,058,459 ------------- Software & Computer Services (4.7%) 204,310 Microsoft Corp...................... 5,393,784 146,990 Oracle Corp. (b).................... 1,763,880 ------------- 7,157,664 ------------- Transportation (1.3%) 30,370 United Parcel Service, Inc., Class B 1,915,740 -------------
Security Shares Description Value --------- -------------------------- ------------- Common Stocks, continued Utilities--Electric (0.6%) 15,230 Dominion Resources, Inc...... $ 915,323 ------------- Utilities--Telecommunications (3.7%) 39,380 ALLTEL Corp.................. 1,842,590 108,066 Verizon Communications....... 3,767,181 ------------- 5,609,771 ------------- Total Common Stocks (Cost $144,969,494) 145,738,704 ------------- Depositary Receipt (1.1%) 16,600 S&P 500 Depositary Receipt... 1,649,874 ------------- Total Depositary Receipt (Cost $1,630,968) 1,649,874 ------------- Investment Company (2.4%) 3,696,487 LEADER Money Market Fund, Institutional Shares........ 3,696,487 ------------- Total Investment Company (Cost $3,696,487) 3,696,487 ------------- Total Investments (Cost $150,296,949) (a)--100.0% 151,085,065 Liabilities in excess of other assets--0.0% (3,000 ------------- Net Assets--100.0% $ 151,082,065 =============
- -------- (a) Represents cost for financial reporting purposes and differs from value by unrealized appreciation (depreciation) of securities as follows: Unrealized appreciation.... $ 17,170,756 Unrealized depreciation.... (16,382,640) ------------ Net unrealized appreciation $ 788,116 ============
Aggregate cost for federal income tax purposes is substantially the same. (b) Non-income producing security. See notes to financial statements. 42 PACIFIC CAPITAL FUNDS New Asia Growth Fund Schedule of Portfolio Investments July 31, 2003
Security Shares Description Value - --------- -------------------------------------- ------------ Common Stocks (98.3%) China (10.1%) Automotive (1.2%) 592,000 Denway Motors Ltd...................... $ 316,902 ------------ Commercial Services (2.9%) 1,080,000 Anhui Expressway Co., Ltd., Class H.... 301,183 944,100 Zhejiang Expressway Co., Ltd., Class H. 444,860 ------------ 746,043 ------------ Containers & Packaging (0.9%) 208,000 Cosco Pacific Ltd...................... 220,021 ------------ Oil & Gas--Exploration & Production Services (1.6%) 235,000 CNOOC Ltd.............................. 405,263 ------------ Real Estate (1.0%) 270,000 China Resources Enterprise Ltd......... 244,062 ------------ Telecommunications (1.4%) 144,000 China Mobile Ltd....................... 370,189 ------------ Utilities--Electric (1.1%) 210,000 Huaneng Power International, Inc., Class H............................... 284,066 ------------ 2,586,546 ------------ Hong Kong (19.8%) Apparel/Textile (4.5%) 258,500 Esprit Holdings Ltd.................... 662,884 304,000 Texwinca Holdings Ltd.................. 243,613 88,500 Yue Yuen Industrial Holdings Ltd....... 257,015 ------------ 1,163,512 ------------ Banks (2.2%) 45,746 HSBC Holdings PLC...................... 561,615 ------------ Chemicals (1.2%) 350,000 Kingboard Chemical Holdings Ltd........ 302,914 ------------ Diversified--Conglomerates/Holding Cos. (2.1%) 44,300 Hutchison Whampoa Ltd.................. 289,682 52,000 Swire Pacific Ltd., Class A............ 240,023 ------------ 529,705 ------------ Electronic Components/Instruments (1.2%) 164,000 Techtronic Industries Co., Ltd......... 301,747 ------------ Financial Services (1.0%) 54,400 Dah Sing Financial Group............... 268,539 ------------ Metals (0.4%) 216,000 Lung Kee (Bermuda) Holdings Ltd........ 96,932 ------------ Real Estate (3.6%) 36,000 Cheung Kong Holdings Ltd............... 236,561 397,000 Hang Lung Group Ltd.................... 366,497 55,000 Sun Hung Kai Properties Ltd............ 326,506 ------------ 929,564 ------------ Retail (1.1%) 824,000 Giordano International Ltd............. 290,541 ------------ Transportation (0.2%) 12,200 Kowloon Motor Bus Holdings Ltd......... 55,218 ------------ Utilities--Electric (2.3%) 134,000 CLP Holdings Ltd....................... 589,313 ------------ 5,089,600 ------------
Security Shares Description Value - --------- ----------------------------------- ------------ Common Stocks, continued India (0.7%) Metals (0.7%) 9,140 Hindalco Industries Ltd., GDR (c).. $ 167,719 ------------ Malaysia (6.5%) Agricultural Operations (1.3%) 211,400 IOI Corp. Berhad................... 328,226 ------------ Banks (1.5%) 576,773 Public Bank Berhad, Local Shares... 332,404 58,250 Public Bank Berhad................. 39,702 ------------ 372,106 ------------ Building & Construction (0.5%) 77,000 Gamuda Berhad...................... 130,697 ------------ Diversified--Conglomerates/Holding Cos. (1.3%) 81,000 Genting Berhad..................... 330,395 ------------ Leisure (0.9%) 89,000 Tanjong PLC........................ 233,039 ------------ Telecommunications (1.0%) 170,000 Maxis Communications Berhad........ 268,421 ------------ 1,662,884 ------------ Philippines (0.9%) Real Estate (0.9%) 1,881,310 Ayala Land, Inc.................... 219,996 ------------ Singapore (9.1%) Banks (4.1%) 45,000 Oversea-Chinese Banking Corp., Ltd. 273,875 104,000 United Overseas Bank Ltd........... 780,844 ------------ 1,054,719 ------------ Beverages (0.8%) 36,000 Fraser & Neave Ltd................. 198,624 ------------ Consumer Goods & Services (0.6%) 388,000 Singapore Post Ltd. (b)............ 155,588 ------------ Electronic Components/Instruments (0.8%) 20,000 Venture Manufacturing Ltd.......... 203,629 ------------ Health Care (0.7%) 353,000 Parkway Holdings Ltd............... 167,655 ------------ Publishing (1.1%) 25,500 Singapore Press Holdings Ltd....... 274,131 ------------ Telecommunications (1.0%) 319,000 MobileOne Ltd...................... 268,540 ------------ 2,322,886 ------------ South Korea (28.4%) Automotive (1.0%) 8,440 Hyundai Motor Co., Ltd............. 251,663 ------------ Automotive Parts (1.0%) 9,100 Hyundai Mobis...................... 261,707 ------------ Banks (3.5%) 21,289 Kookmin Bank....................... 698,813 27,840 Koram Bank......................... 201,165 ------------ 899,978 ------------
See notes to financial statements. 43 PACIFIC CAPITAL FUNDS New Asia Growth Fund Schedule of Portfolio Investments, Continued July 31, 2003
Security Shares Description Value - ------- ------------------------------------ ------------ Common Stocks, continued South Korea, continued Business Equipment & Services (0.9%) 4,030 Sindo Ricoh Co., Ltd................ $ 231,798 ------------ Electronic Components/Instruments (12.9%) 10,520 Fine DNC Co., Ltd................... 176,884 3,600 Hankuk Electric Glass Co., Ltd...... 219,568 4,180 KH Vatec Co., Ltd................... 174,565 7,070 Samsung Electronics Co., Ltd........ 2,491,419 2,850 Samsung SDI Co., Ltd................ 264,358 ------------ 3,326,794 ------------ Electronics--Semiconductors (1.0%) 37,134 Osung LST Co., Ltd. (b)............. 263,917 ------------ Financial Services (1.0%) 19,290 Korea Exchange Bank Credit Services Co., Ltd........................... 119,776 10,530 Shinhan Financial Group Co., Ltd.... 132,461 ------------ 252,237 ------------ Insurance (0.8%) 4,010 Samsung Fire & Marine Insurance Co., Ltd................................ 200,075 ------------ Retail (1.0%) 1,370 Shinsegae Co., Ltd.................. 250,093 ------------ Steel (1.7%) 3,710 POSCO............................... 446,269 ------------ Telecommunication Equipment (1.1%) 11,940 You Eal Electronics Co., Ltd........ 289,776 ------------ Telecommunications (2.5%) 9,720 Korea Telecom Corp.................. 364,757 1,520 SK Telecom Co., Ltd................. 263,956 ------------ 628,713 ------------ 7,303,020 ------------ Taiwan (18.7%) Automotive Parts (0.9%) 97,000 Fine Blanking & Tool Co., Ltd....... 239,579 ------------ Chemicals (1.1%) 216,480 Formosa Plastic Corp................ 293,760 ------------ Computers & Peripherals (6.0%) 73,000 Asustek Computer, Inc............... 237,574 36,600 Benq Corp........................... 45,837 471,000 Chi Mei Optoelectronics Corp. (b)... 465,327 144,400 Chicony Electronics Co., Ltd........ 253,852
Security Shares Description Value - --------- ---------------------------------- ------------ Common Stocks, continued Taiwan, continued Computers & Peripherals, continued 117,000 Gigabyte Technology Co., Ltd....... $ 290,677 104,500 Quanta Computer, Inc............... 245,957 ------------ 1,539,224 ------------ Electronics--Semiconductors (8.5%) 483,000 Advanced Semiconductor Engineering, Inc. (b)............. 336,835 48,000 MediaTek, Inc...................... 573,248 34,310 Nanya Technology Corp. (b)......... 25,522 376,950 Powertech Technology, Inc. (b)..... 372,410 509,155 Taiwan Semiconductor Manufacturing Co., Ltd. (b)..................... 872,893 ------------ 2,180,908 ------------ Telecommunication Equipment (2.2%) 254,400 Zinwell Corp....................... 286,819 116,000 Zyxel Communications Corp. (b)..... 267,968 ------------ 554,787 ------------ 4,808,258 ------------ Thailand (4.1%) Banks (1.4%) 351,500 Kasikornbank Public Co., Ltd. (b).. 368,414 ------------ Building Materials (1.1%) 75,100 Siam Cement Public Co., Ltd........ 293,387 ------------ Real Estate (1.6%) 1,820,700 Land & Houses Public Co., Ltd., NVDR.............................. 377,325 ------------ 1,039,126 ------------ Total Common Stocks (Cost $22,525,571) 25,200,035 ------------ Equity Linked Notes (1.4%) India (1.4%) Metals (0.6%) 35,000 Tata Iron & Steel Co., Ltd. (b).... 157,500 ------------ Pharmaceuticals (0.8%) 11,410 Ranbaxy Laboratories Ltd. (b)...... 202,642 ------------ Total Equity Linked Notes (Cost $323,162) 360,142 ------------ Total Investments (Cost $22,848,733) (a)--99.7% 25,560,177 Other assets in excess of liabilities--0.3% 64,650 ------------ Net Assets--100.0% $ 25,624,827 ============
- -------- (a) Represents cost for financial reporting purposes and differs from value by unrealized appreciation (depreciation) of securities as follows: Unrealized appreciation.... $3,582,492 Unrealized depreciation.... (871,048) ---------- Net unrealized appreciation $2,711,444 ==========
Aggregate cost for federal income tax purposes is substantially the same. (b) Non-income producing security. (c) A portion of this security is restricted as to resale as of July 31, 2003. GDR--Global Depositary Receipt NVDR--Non-Voting Depositary Receipt PLC--Public Limited Company See notes to financial statements. 44 PACIFIC CAPITAL FUNDS Diversified Fixed Income Fund Schedule of Portfolio Investments July 31, 2003
Principal Security Amount Description Value - ----------- ----------------------------------- ------------- Corporate Bonds (44.6%) Banks--Domestic (4.0%) $ 2,975,000 Bank of New York Co., Inc., Series E, 2.20%, 5/12/06, MTN..... $ 2,955,294 1,750,000 Mercantile Safe Deposit & Trust, 5.70%, 11/15/11................... 1,792,231 1,350,000 U.S. Bancorp, 5.10%, 7/15/07....... 1,436,681 4,000,000 Wells Fargo Co., 3.12%, 8/15/08.... 3,871,783 ------------- 10,055,989 ------------- Consumer Goods & Services (3.2%) 1,145,000 Colgate-Palmolive Co., Series B, 7.60%, 5/19/25, MTN............... 1,358,256 3,765,000 Estee Lauder Cos., Inc., 6.00%, 1/15/12.................... 4,000,855 2,200,000 Procter & Gamble Co., 8.50%, 8/10/09.................... 2,686,750 ------------- 8,045,861 ------------- Electrical Equipment (1.2%) 3,000,000 General Electric Co., 5.00%, 2/1/13..................... 2,940,972 ------------- Financial Services (9.4%) 2,000,000 General Electric Capital Corp., 5.00%, 2/15/07, MTN............... 2,122,822 3,000,000 General Electric Capital Corp., 8.63%, 6/15/08.................... 3,610,290 2,000,000 General Motors Acceptance Corp., 4.50%, 7/15/06.................... 2,005,000 5,000,000 Goldman Sachs Group, Inc., 6.88%, 1/15/11.................... 5,581,400 2,500,000 Morgan Stanley Dean Witter & Co., 5.80%, 4/1/07................ 2,701,565 4,230,000 Pitney Bowes Credit Corp., 5.75%, 8/15/08.................... 4,597,553 3,000,000 US Central Credit Union, 2.75%, 5/30/08.................... 2,868,750 ------------- 23,487,380 ------------- Food Distributors (1.3%) 448,000 Ralston Purina Co., 7.88%, 6/15/25.................... 544,267 2,495,000 SYSCO Corp., 7.25%, 4/15/07........ 2,806,875 ------------- 3,351,142 ------------- Foreign Agency (1.2%) 3,000,000 Province of Ontario, 3.28%, 3/28/08 2,962,500 ------------- Oil & Gas--Exploration & Production Services (7.5%) 800,000 Amoco Argentina, 6.63%, 9/15/05.... 876,000 5,000,000 Amoco Co., 6.50%, 8/1/07........... 5,550,000 5,000,000 British Transco Finance, 6.63%, 6/1/18..................... 5,231,250 2,056,000 ChevronTexaco Corp., 8.11%, 12/1/04, Chevron Corp. Guaranteed........................ 2,163,940 4,477,000 Rowan Cos., Inc., Title XI Shipping Bonds, 5.88%, 3/15/12, U.S. Government Guaranteed............. 4,889,685 ------------- 18,710,875 -------------
Principal Security Amount Description Value - ----------- --------------------------------- ------------- Corporate Bonds, continued Pharmaceuticals (2.2%) $ 5,000,000 Zeneca Wilmington, Inc., 7.00%, 11/15/23................. $ 5,559,415 ------------- Restaurants (1.1%) 1,400,000 McDonald's Corp., 6.50%, 8/1/07.. 1,540,000 1,025,000 Wendy's International, Inc., 6.20%, 6/15/14.................. 1,091,625 ------------- 2,631,625 ------------- Retail (1.3%) 2,500,000 Wal-Mart Stores, Inc., 8.85%, 1/2/15................... 3,196,400 ------------- Sovereign Agency (2.1%) 5,000,000 Export Development Corp., 4.55%, 6/30/05.................. 5,253,685 ------------- Supranational Agency (4.9%) 920,000 African Development Bank, 6.88%, 10/15/15................. 1,044,571 3,000,000 Asian Development Bank, 5.59%, 7/16/18.................. 3,075,000 2,000,000 European Investment Bank, 4.88%, 9/6/06, MTN.............. 2,119,460 4,779,000 Inter-American Development Bank, 8.50%, 3/15/11.................. 6,006,070 ------------- 12,245,101 ------------- Telecommunications (2.7%) 4,075,000 GTE Southwest, Inc., First Mortgage Bond, 8.50%, 11/15/31................. 5,098,844 1,380,000 Southwestern Bell Telephone Co., 7.00%, 7/1/15................... 1,580,100 ------------- 6,678,944 ------------- Transportation (2.5%) 5,509,594 FedEx Corp., Pass Thru Certificates, 7.50%, 1/15/18.... 6,210,803 ------------- Total Corporate Bonds (Cost $106,167,868) 111,330,692 ------------- Private Placements (4.8%) Financial Services (0.9%) 2,146,867 Alter Moneta Receivables LLC, 2.56%, 3/15/11 (b).............. 2,147,958 ------------- Insurance (1.8%) 5,000,000 Monumental Global Funding II, 2.80%, 7/15/08 (b).............. 4,756,250 ------------- Minerals (0.9%) 2,000,000 North Finance (Bermuda) Ltd., 7.00%, 9/15/05 (b).............. 2,153,052 ------------- Tools & Accessories (1.2%) 3,000,000 Stanley Works, 4.90%, 11/1/12 (b) 2,921,250 ------------- Total Private Placements (Cost $12,263,917) 11,978,510 ------------- U.S. Government Agencies (28.7%) Federal Home Loan Bank (8.4%) 3,000,000 1.00%, 8/6/03.................... 2,999,417 5,000,000 6.50%, 11/15/05.................. 5,479,941
See notes to financial statements. 45 PACIFIC CAPITAL FUNDS Diversified Fixed Income Fund Schedule of Portfolio Investments, Continued July 31, 2003
Principal Security Amount Description Value ----------- --------------- ------------- U.S. Government Agencies, continued Federal Home Loan Bank, continued $ 5,000,000 2.00%, 2/6/06...... $ 5,000,325 3,000,000 4.88%, 11/15/06.... 3,190,845 1,000,000 5.80%, 9/2/08...... 1,098,002 3,000,000 7.63%, 5/14/10..... 3,563,157 ------------- 21,331,687 ------------- Federal Home Loan Mortgage Corp. (8.1%) 125,000 2.88%, 9/26/05..... 125,294 1,250,000 2.00%, 5/19/06..... 1,245,325 2,075,000 6.75%, 5/30/06..... 2,311,612 5,000,000 4.50%, 7/23/07..... 5,171,760 4,200,000 3.75%, 2/20/08..... 4,218,161 6,675,000 6.25%, 3/5/12...... 7,050,902 ------------- 20,123,054 ------------- Federal National Mortgage Assoc. (7.3%) 3,000,000 2.10%, 9/30/05..... 2,998,434 5,000,000 5.50%, 5/2/06...... 5,368,470 5,000,000 6.00%, 5/15/08..... 5,504,500 1,000,000 6.88%, 9/10/12..... 1,090,183 3,600,000 4.60%, 6/5/18...... 3,260,743 ------------- 18,222,330 ------------- Housing & Urban Development (1.3%) 2,950,000 6.41%, 8/1/14...... 3,181,820 ------------- Private Export Funding (1.7%) 565,000 7.11%, 4/15/07..... 641,981 3,100,000 6.67%, 9/15/09..... 3,510,750 ------------- 4,152,731 ------------- Small Business Administration Corp. (1.9%) 4,514,715 6.34%, 8/1/11...... 4,710,052 ------------- Total U.S. Government Agencies (Cost $68,883,605) 71,721,674 -------------
Shares or Principal Security Amount Description Value ---------- ---------------------------- ------------ U.S. Treasury Bonds (6.4%) $6,400,000 7.25%, 5/15/16.................. $ 7,782,503 2,850,000 7.88%, 2/15/21.................. 3,676,055 4,200,000 6.25%, 8/15/23.................. 4,612,784 ------------ Total U.S. Treasury Bonds (Cost $15,571,187) 16,071,342 ------------ U.S. Treasury Notes (12.1%) 4,300,000 7.25%, 8/15/04.................. 4,565,895 1,000,000 7.50%, 2/15/05.................. 1,090,196 5,415,000 6.50%, 5/15/05.................. 5,874,641 5,000,000 5.75%, 11/15/05................. 5,422,270 3,000,000 6.63%, 5/15/07.................. 3,409,455 9,000,000 5.63%, 5/15/08.................. 9,931,644 ------------ Total U.S. Treasury Notes (Cost $29,075,876) 30,294,101 ------------ Investment Companies (2.2%) 3,770,836 LEADER Money Market Fund, Institutional Shares........... 3,770,836 1,649,507 LEADER Treasury Money Market Fund, Institutional Shares..... 1,649,507 ------------ Total Investment Companies (Cost $5,420,343) 5,420,343 ------------ Total Investments (Cost $237,382,796) (a)--98.8% 246,816,662 Other assets in excess of liabilities--1.2% 3,118,911 ------------ Net Assets--100.0% $249,935,573 ============
- -------- (a) Represents cost for financial reporting purposes and differs from value by unrealized appreciation (depreciation) of securities as follows: Unrealized appreciation.... $11,561,128 Unrealized depreciation.... (2,127,262) ----------- Net unrealized appreciation $ 9,433,866 ===========
Aggregate cost for federal income tax purposes is substantially the same. (b) Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration normally to qualified institutional buyers. MTN--Medium Term Note See notes to financial statements. 46 PACIFIC CAPITAL FUNDS Ultra Short Government Fund Schedule of Portfolio Investments July 31, 2003
Principal Amount Security Description Value - ------------ --------------------------------------------------- ------------ U.S. Government Agencies (99.3%) Federal Farm Credit Bank (49.2%) $100,356,000 0.95%, 8/1/03....................................... $100,353,352 5,000,000 1.41%, 8/5/03....................................... 4,999,488 35,000 5.375%, 9/11/03..................................... 35,167 500,000 6.40%, 10/20/03..................................... 505,625 1,000,000 5.10%, 11/24/03..................................... 1,012,840 750,000 5.10%, 6/7/04....................................... 774,569 7,000,000 5.00%, 7/16/04...................................... 7,245,000 1,000,000 8.06%, 1/4/05....................................... 1,088,800 2,000,000 3.875%, 2/1/05...................................... 2,061,188 3,000,000 1.75%, 4/8/05....................................... 2,993,871 3,000,000 2.00%, 6/24/05...................................... 3,000,114 1,385,000 2.10%, 3/17/06...................................... 1,371,081 440,000 2.48%, 4/7/06....................................... 439,314 ------------ 125,880,409 ------------ Federal Home Loan Bank (40.6%) 10,000,000 0.99%, 8/13/03...................................... 9,996,424 5,000,000 4.125%, 8/15/03..................................... 5,006,147 1,270,000 5.575%, 9/2/03...................................... 1,274,864 250,000 5.60%, 9/2/03....................................... 250,963 5,000,000 5.125%, 9/15/03..................................... 5,024,882 3,500,000 6.375%, 11/14/03.................................... 3,553,074 800,000 5.40%, 11/20/03..................................... 810,489 3,000,000 5.375%, 1/5/04...................................... 3,055,251 1,000,000 3.20%, 2/13/04...................................... 1,011,110 2,000,000 5.25%, 2/13/04...................................... 2,043,960 250,000 5.40%, 3/1/04....................................... 256,208 2,000,000 1.41%, 3/8/04....................................... 2,000,148 2,000,000 1.425%, 3/8/04...................................... 2,000,144 1,500,000 4.875%, 4/16/04..................................... 1,539,158 9,000,000 4.875%, 5/14/04..................................... 9,258,659 1,500,000 3.375%, 6/15/04..................................... 1,527,414 8,000,000 4.75%, 6/28/04...................................... 8,253,263 1,000,000 2.25%, 8/13/04...................................... 1,009,049 2,500,000 4.625%, 8/13/04..................................... 2,584,375 6,000,000 6.25%, 8/13/04...................................... 6,300,000 200,000 6.00%, 9/15/04...................................... 210,202 1,650,000 1.40%, 9/17/04...................................... 1,649,477 1,500,000 3.625%, 10/15/04.................................... 1,538,139 2,500,000 4.31%, 10/15/04..................................... 2,515,625 1,435,000 3.375%, 11/15/04.................................... 1,469,081 1,000,000 4.125%, 11/15/04.................................... 1,032,500 1,500,000 4.125%, 1/14/05..................................... 1,550,832 500,000 1.875%, 2/15/05..................................... 500,454
Principal Amount Security Description Value - ----------- --------------------------------------------------- ------------ U.S. Government Agencies, continued Federal Home Loan Bank, continued $ 240,000 4.375%, 2/15/05..................................... $ 249,300 1,000,000 2.01%, 2/25/05...................................... 1,000,446 2,000,000 2.02%, 2/28/05...................................... 2,001,024 500,000 4.00%, 4/25/05...................................... 517,861 2,090,000 7.25%, 5/13/05...................................... 2,288,374 1,500,000 6.955%, 7/15/05..................................... 1,646,250 2,000,000 2.00%, 9/26/05...................................... 1,994,230 2,000,000 2.10%, 9/26/05...................................... 1,997,908 500,000 2.23%, 10/28/05..................................... 500,054 1,000,000 3.05%, 11/14/05..................................... 1,000,000 500,000 2.50%, 12/15/05..................................... 502,132 1,000,000 1.83%, 12/30/05..................................... 987,784 1,000,000 5.29%, 1/27/06...................................... 1,069,160 1,000,000 4.64%, 1/30/06...................................... 1,015,435 500,000 2.50%, 3/10/06...................................... 499,984 125,000 2.00%, 3/30/06...................................... 123,336 1,500,000 1.875%, 6/15/06..................................... 1,472,408 2,000,000 1.90%, 7/7/06....................................... 1,956,352 2,000,000 2.08%, 7/14/06...................................... 1,965,552 3,780,000 2.285%, 7/28/06..................................... 3,734,016 ------------ 103,743,498 ------------ Student Loan Marketing Assoc. (6.5%) 850,000 2.95%, 1/2/04....................................... 856,375 13,200,000 5.00%, 6/30/04...................................... 13,678,500 2,000,000 3.375%, 7/15/04..................................... 2,040,622 ------------ 16,575,497 ------------ Tennessee Valley Authority (3.0%) 7,500,000 4.75%, 7/15/04...................................... 7,725,000 ------------ Total U.S. Government Agencies (Cost $251,818,619) 253,924,404 ------------ U.S. Treasury Notes (1.3%) 2,000,000 3.00%, 1/31/04...................................... 2,019,922 399,000 1.25%, 5/31/05...................................... 395,805 1,000,000 2.00%, 5/15/06...................................... 994,063 ------------ Total U.S. Treasury Notes (Cost $3,394,079) 3,409,790 ------------ Total Investments (Cost $255,212,698) (a)--100.6% 257,334,194 Liabilities in excess of other assets--(0.6)% (1,637,108) ------------ Net Assets--100.0% $255,697,086 ============
- -------- (a) Represents cost for financial reporting purposes and differs from value by unrealized appreciation (depreciation) of securities as follows: Unrealized appreciation.... $2,285,269 Unrealized depreciation.... (163,773) ---------- Net unrealized appreciation $2,121,496 ==========
Aggregate cost for federal income tax purposes is substantially the same. See notes to financial statements. 47 PACIFIC CAPITAL FUNDS Short Intermediate U.S. Government Securities Fund Schedule of Portfolio Investments July 31, 2003
Principal Security Amount Description Value - ---------- ---------------- ----------- U.S. Government Agencies (84.3%) Federal Farm Credit Bank (25.8%) $9,252,000 0.95%, 8/1/03... $ 9,251,755 5,000,000 3.875%, 12/15/04 5,149,999 2,000,000 3.875%, 2/1/05.. 2,061,188 1,000,000 5.75%, 2/9/05... 1,058,920 1,000,000 1.75%, 4/8/05... 997,957 2,000,000 2.125%, 8/15/05. 2,003,378 500,000 5.10%, 11/9/05.. 531,572 10,000 6.50%, 11/22/05. 10,948 1,000,000 5.50%, 6/15/06.. 1,078,750 250,000 6.30%, 8/8/07... 278,081 200,000 6.52%, 9/24/07.. 224,412 500,000 3.625%, 11/19/07 501,024 200,000 4.00%, 12/24/07. 201,750 1,000,000 2.95%, 6/12/08.. 968,722 ----------- 24,318,456 ----------- Federal Home Loan Bank (55.4%) 200,000 5.40%, 11/20/03. 202,622 1,600,000 3.00%, 12/26/03. 1,612,590 1,000,000 3.20%, 2/13/04.. 1,011,110 1,000,000 5.25%, 2/13/04.. 1,021,980 1,500,000 3.375%, 6/15/04. 1,527,414 1,000,000 4.75%, 6/28/04.. 1,031,658 1,000,000 2.25%, 8/13/04.. 1,009,049 500,000 3.375%, 11/15/04 511,875 3,000,000 4.125%, 11/15/04 3,097,500 300,000 4.375%, 2/15/05. 311,625 1,500,000 5.25%, 5/13/05.. 1,589,435 500,000 6.955%, 7/15/05. 548,750 1,000,000 3.25%, 8/15/05.. 1,024,043 1,000,000 6.875%, 8/15/05. 1,098,181 15,000 6.34%, 10/19/05. 16,364 500,000 2.23%, 10/28/05. 500,054 100,000 6.50%, 11/15/05. 109,599 500,000 2.50%, 12/15/05. 502,132 1,000,000 5.29%, 1/27/06.. 1,069,160 1,000,000 4.64%, 1/30/06.. 1,015,435 1,000,000 2.60%, 2/24/06.. 1,001,954 500,000 2.50%, 3/10/06.. 499,984 2,000,000 2.50%, 3/24/06.. 1,998,772 7,000,000 2.125%, 5/15/06. 6,912,499 5,000,000 5.375%, 5/15/06. 5,373,089 500,000 1.90%, 7/7/06... 489,088 1,000,000 5.25%, 8/15/06.. 1,075,000
Principal Security Amount Description Value ---------- ---------------- ----------- U.S. Government Agencies, continued Federal Home Loan Bank, continued $ 150,000 4.61%, 11/6/06........ $ 158,250 1,000,000 4.875%, 11/15/06...... 1,063,615 2,000,000 6.79%, 2/5/07......... 2,253,376 3,000,000 4.875%, 2/15/07....... 3,185,649 890,000 5.00%, 3/8/07......... 950,357 365,000 6.995%, 4/2/07........ 414,629 500,000 4.875%, 5/15/07....... 530,864 1,500,000 7.625%, 5/15/07....... 1,741,758 210,000 7.325%, 5/30/07....... 241,287 255,000 6.50%, 8/15/07........ 285,609 355,000 4.10%, 8/27/07........ 355,783 1,260,000 3.175%, 10/2/07....... 1,250,990 425,000 3.45%, 11/5/07........ 426,057 500,000 4.25%, 11/7/07........ 504,222 225,000 3.50%, 11/15/07....... 225,844 1,000,000 3.375%, 2/15/08....... 995,115 250,000 3.50%, 4/15/08........ 248,523 1,000,000 6.185%, 5/6/08........ 1,115,124 ----------- 52,108,014 ----------- Student Loan Marketing Assoc. (1.4%) 1,000,000 3.375%, 7/15/04....... 1,020,311 250,000 5.85%, 6/1/07......... 274,023 ----------- 1,294,334 ----------- Tennessee Valley Authority (1.7%) 1,500,000 6.375%, 6/15/05....... 1,621,875 ----------- Total U.S. Government Agencies (Cost $77,885,580) 79,342,679 ----------- U.S. Treasury Notes (14.8%) 248,000 5.875%, 2/15/04....... 254,442 493,000 6.00%, 8/15/04........ 517,169 300,000 6.50%, 5/15/05........ 325,465 2,200,000 6.50%, 8/15/05........ 2,405,993 1,500,000 7.00%, 7/15/06........ 1,697,873 200,000 3.00%, 11/15/07....... 199,516 1,000,000 3.00%, 2/15/08........ 992,383 7,750,000 2.625%, 5/15/08....... 7,525,373 ----------- Total U.S. Treasury Notes (Cost $13,879,216) 13,918,214 ----------- Total Investments (Cost $91,764,796) (a)--99.1% 93,260,893 Other assets in excess of liabilities--0.9% 890,006 ----------- Net Assets--100.0% $94,150,899 ===========
- -------- (a) Represents cost for financial reporting purposes and differs from value by unrealized appreciation (depreciation) of securities as follows: Unrealized appreciation.... $2,044,211 Unrealized depreciation.... (548,114) ---------- Net unrealized appreciation $1,496,097 ==========
Aggregate cost for federal income tax purposes is substantially the same. See notes to financial statements. 48 PACIFIC CAPITAL FUNDS Tax-Free Securities Fund Schedule of Portfolio Investments July 31, 2003
Principal Security Amount Description Value - ------------ ------------------------------- ------------- Alternative Minimum Tax Paper (14.9%) Hawaii (14.9%) $ 3,000,000 Hawaii Airport System Revenue, 5.63%, 7/1/18, Callable 7/1/21 @ 100, FGIC............ $ 3,132,990 15,375,000 Hawaii Airport System Revenue, Second Series, 6.90%, 7/1/12, Escrowed to Maturity, MBIA.... 18,241,976 3,000,000 Hawaii Department of Budget & Finance Special Purpose Revenue, Hawaiian Electric Co., 5.70%, 7/1/20, Callable 7/1/10 @ 101, AMBAC........... 3,145,560 11,000,000 Hawaii Department of Budget & Finance Special Purpose Revenue, Hawaiian Electric Co., Series A, 6.60%, 1/1/25, Callable 1/1/05 @101, MBIA.... 11,690,250 5,000,000 Hawaii Department of Budget & Finance Special Purpose Revenue, Hawaiian Electric Co., Series A, 6.20%, 5/1/26, Callable 5/1/06 @ 101, MBIA... 5,449,650 7,200,000 Hawaii Department of Budget & Finance Special Purpose Revenue, Hawaiian Electric Co., Series A, 5.65%, 10/1/27, Callable 10/1/12 @ 101, MBIA.......................... 7,429,608 2,650,000 Hawaii Harbor Capital Improvement Revenue, 6.10%, 7/1/07, Callable 7/1/04 @102, FGIC.......................... 2,792,809 4,660,000 Hawaii Harbor Capital Improvement Revenue, 6.38%, 7/1/24, Callable 7/1/04 @ 102, FGIC.......................... 4,918,630 1,500,000 Hawaii Harbor System Revenue, Series B, 5.50%, 7/1/19, Callable 7/1/12 @ 100, AMBAC......................... 1,541,355 3,120,000 Hawaii Housing Finance & Development Corp., Single Family Mortgage Revenue, Series A, 6.00%, 7/1/26, Callable 7/1/04 @ 102, FNMA.......................... 3,165,365 ------------- Total Alternative Minimum Tax Paper (Cost $55,913,666) 61,508,193 ------------- Commercial Paper (0.2%) Hawaii (0.2%) 1,000,000 Honolulu City & County GO, 1.05%, Mandatory Put 8/7/03 @ 100.................. 1,000,000 ------------- Total Commercial Paper (Cost $1,000,000) 1,000,000 -------------
Principal Security Amount Description Value - ------------ --------------------------------- ------------- Municipal Bonds (82.8%) Arizona (1.7%) $ 1,000,000 Maricopa School District No. 69 Paradise Valley GO, 5.40%, 7/1/12, Callable 7/1/05 @ 101, MBIA............................ $ 1,071,500 1,000,000 Mesa GO, 5.00%, 7/1/13, FGIC..... 1,101,220 2,150,000 Phoenix Civic Improvement Corp. Revenue, 5.25%, 7/1/16, Callable 7/1/27 @ 100, MBIA..... 2,288,589 2,510,000 Scottsdale GO, 5.38%, 7/1/16, Callable 7/1/11 @ 101........... 2,696,568 ------------- 7,157,877 ------------- California (0.7%) 2,745,000 San Francisco City & County Airport Community International Airport Revenue, Second Series, 5.63%, 5/1/21, Callable 5/1/06 @ 101, FGIC..... 2,946,236 ------------- Colorado (0.6%) 600,000 Adams & Arapahoe Counties School District No. 28 GO, Series C, 5.35%, 12/1/15, Callable 12/1/06 @ 102, FGIC............................ 653,712 2,000,000 Colorado Housing & Finance Authority Revenue, Class I, Series A-1, 0.88%*, 10/1/30, FHLB............................ 2,000,000 ------------- 2,653,712 ------------- Connecticut (1.2%) 5,000,000 Connecticut State Health & Educational Facilities Authority Revenue, Series V-2, 0.82%*, 7/1/36.................. 5,000,000 ------------- Florida (6.3%) 3,000,000 Florida State Board of Education Capital Outlay GO, Series C, 5.88%, 6/1/20, Callable 6/1/10 @ 101, FGIC..................... 3,289,710 700,000 Florida State Board of Education Capital Outlay GO, Series 99E, 5.25%, 6/1/12, Callable 6/1/11 @ 101.................... 763,861 5,000,000 Florida State Turnpike Authority Revenue, Department of Transportation, Series A, 5.50%, 7/1/17, Callable 7/1/05 @ 101, FGIC.............. 5,444,700 3,500,000 Florida State Turnpike Authority Revenue, Department of Transportation, Series A, 5.75%, 7/1/17, Callable 7/1/10 @ 101.................... 3,843,980
See notes to financial statements. 49 PACIFIC CAPITAL FUNDS Tax-Free Securities Fund Schedule of Portfolio Investments, Continued July 31, 2003
Principal Security Amount Description Value - ------------ -------------------------------- ------------- Municipal Bonds, continued Florida, continued $ 2,000,000 Miami-Dade County Expressway Authority Toll System Revenue, 6.00%, 7/1/20, Prerefunded 7/1/10 @ 101, FGIC............. $ 2,320,040 4,875,000 Orange County Public Service Tax Revenue, 6.00%, 10/1/24, Callable 10/1/05 @ 102, FGIC........................... 5,354,651 3,725,000 Orlando Utilities Community Water & Electric Revenue, Series D, 6.75%, 10/1/17....... 4,526,173 ------------- 25,543,115 ------------- Georgia (2.6%) 390,000 Georgia Municipal Electric Authority Power Revenue, Series W, 6.60%, 1/1/18, Escrowed to Maturity, MBIA..... 476,112 6,420,000 Georgia Municipal Electric Authority Power Revenue, Series W, 6.60%, 1/1/18, MBIA........................... 7,708,365 2,330,000 Metropolitan Atlanta Rapid Transportation Authority Sales Tax Revenue, Series P, 6.25%, 7/1/11, AMBAC........... 2,735,676 ------------- 10,920,153 ------------- Hawaii (44.7%) 1,000,000 Hawaii County GO, Series A, 4.70%, 2/1/07, Callable 2/1/06 @ 101.5, FGIC........... 1,068,880 2,000,000 Hawaii County GO, Series A, 5.50%, 5/1/08, FGIC............ 2,223,920 1,000,000 Hawaii County GO, Series A, 4.90%, 2/1/09, Callable 2/1/06 @ 101.5, FGIC........... 1,073,430 1,810,000 Hawaii County GO, Series A, 5.00%, 2/1/10, Callable 2/1/06 @ 101.5, FGIC........... 1,927,704 2,095,000 Hawaii County GO, Series A, 5.10%, 2/1/13, Callable 2/1/06 @ 101.5, FGIC........... 2,242,006 605,000 Hawaii County GO, Series A, 5.60%, 5/1/13, FGIC............ 674,648 1,065,000 Hawaii County GO, Series A, 5.50%, 7/15/14, FGIC........... 1,170,499 2,320,000 Hawaii County GO, Series A, 5.20%, 2/1/15, Callable 2/1/06 @ 101.5, FGIC........... 2,484,279 1,340,000 Hawaii County GO, Series A, 5.50%, 7/15/15, FGIC........... 1,460,386 2,000,000 Hawaii County GO, Series A, 5.50%, 5/15/16, Callable 5/15/09 @ 101, FSA............. 2,164,880
Principal Security Amount Description Value - ------------ --------------------------------- ------------- Municipal Bonds, continued Hawaii, continued $ 3,000,000 Hawaii Department of Budget & Finance, Special Purpose Revenue, Hawaiian Electric Co., Series A, 4.95%, 4/1/12, MBIA............................ $ 3,202,110 2,000,000 Hawaii Department of Budget & Finance, Special Purpose Revenue, Hawaiian Electric Co., Series A, 5.50%, 12/1/14, Callable 12/1/09 @ 101, AMBAC........................... 2,175,720 1,700,000 Hawaii Department of Budget & Finance, Special Purpose Revenue, Kapiolani Health Care System, 6.30%, 7/1/08, Callable 8/31/03 @ 102, MBIA............. 1,737,400 3,680,000 Hawaii Department of Budget & Finance, Special Purpose Revenue, Kapiolani Health Care System, 6.40%, 7/1/13, Callable 8/31/03 @ 102, MBIA............. 3,761,107 1,455,000 Hawaii Department of Budget & Finance, Special Purpose Revenue, Queens Health System, Series A, 5.88%, 7/1/11, Callable 7/1/06 @ 102... 1,546,738 3,245,000 Hawaii Department of Budget & Finance, Special Purpose Revenue, Queens Health System, Series A, 6.05%, 7/1/16, Callable 7/1/06 @ 102... 3,387,131 3,500,000 Hawaii Department of Budget & Finance, Special Purpose Revenue, Queens Health System, Series B, 5.25%, 7/1/23, Callable 7/1/08 @ 102, MBIA..... 3,526,005 1,400,000 Hawaii Department of Transportation, Matson Terminal, Inc. Special Facility Revenue, 5.75%, 3/1/13, Callable 8/20/03 @ 102.......... 1,420,062 2,795,000 Hawaii Housing Finance & Development Corp., Single Family Mortgage Revenue, Series B, 5.70%, 7/1/13, Callable 7/1/04 @ 102, FNMA..... 2,880,779 1,325,000 Hawaii Housing Finance & Development Corp., Single Family Mortgage Revenue, Series B, 6.90%, 7/1/16, Callable 1/1/04 @ 100, FNMA..... 1,338,078 5,980,000 Hawaii Housing Finance & Development Corp., Single Family Mortgage Revenue, Series B, 5.85%, 7/1/17, Callable 7/1/04 @ 102, FNMA............................ 6,117,180
See notes to financial statements. 50 PACIFIC CAPITAL FUNDS Tax-Free Securities Fund Schedule of Portfolio Investments, Continued July 31, 2003
Principal Security Amount Description Value - ------------ ------------------------------ ------------- Municipal Bonds, continued Hawaii, continued $ 3,475,000 Hawaii Housing Finance & Development Corp., Single Family Mortgage Revenue, Series B, 7.00%, 7/1/31, Callable 1/1/04 @ 100, FNMA......................... $ 3,509,715 2,340,000 Hawaii Housing Finance & Development Corp., University of Hawaii Faculty Housing Project Revenue, 5.70%, 10/1/25, Callable 10/1/05 @ 101, AMBAC......... 2,485,174 2,000,000 Hawaii State GO, Series BZ, 6.00%, 10/1/12, FGIC......... 2,300,700 1,350,000 Hawaii State GO, Series CH, 4.75%, 11/1/11, MBIA......... 1,434,024 1,335,000 Hawaii State GO, Series CH, 4.75%, 11/1/13, MBIA......... 1,401,189 3,000,000 Hawaii State GO, Series CM, 6.50%, 12/1/13, FGIC......... 3,586,830 1,500,000 Hawaii State GO, Series CN, 6.25%, 3/1/08, FGIC.......... 1,710,240 4,000,000 Hawaii State GO, Series CN, 5.25%, 3/1/13, Callable 3/1/07 @ 102, FGIC........... 4,312,120 2,000,000 Hawaii State GO, Series CN, 5.50%, 3/1/14, Callable 3/1/07 @ 102, FGIC........... 2,186,220 4,975,000 Hawaii State GO, Series CN, 5.25%, 3/1/15, Callable 3/1/07 @ 102, FGIC........... 5,349,269 5,255,000 Hawaii State GO, Series CP, 5.00%, 10/1/12, Callable 10/1/07 @ 101, FGIC.......... 5,630,048 5,300,000 Hawaii State GO, Series CP, 5.00%, 10/1/13, Callable 10/1/07 @ 101, FGIC.......... 5,652,767 4,310,000 Hawaii State GO, Series CP, 5.00%, 10/1/15, Callable 10/1/07 @ 101, FGIC.......... 4,588,254 3,000,000 Hawaii State GO, Series CP, 5.00%, 10/1/16, Callable 10/1/07 @ 101, FGIC.......... 3,171,000 2,050,000 Hawaii State GO, Series CP, 5.00%, 10/1/17, Callable 10/1/07 @ 101, FGIC.......... 2,151,475 3,150,000 Hawaii State GO, Series CR, 5.00%, 4/1/16, Callable 4/1/08 @ 101, MBIA........... 3,318,242 5,500,000 Hawaii State GO, Series CR, 5.00%, 4/1/17, Callable 4/1/08 @ 101, MBIA........... 5,738,809 1,000,000 Hawaii State GO, Series CR, 4.75%, 4/1/18, Callable 4/1/08 @ 101, MBIA........... 1,018,220 2,200,000 Hawaii State GO, Series CS, 5.00%, 4/1/08, MBIA.......... 2,394,766
Principal Security Amount Description Value - ------------ ------------------------------ ------------- Municipal Bonds, continued Hawaii, continued $ 2,000,000 Hawaii State GO, Series CT, 5.88%, 9/1/16, Prerefunded 9/1/09 @ 101, FSA............ $ 2,320,380 2,000,000 Hawaii State GO, Series CT, 5.88%, 9/1/17, Prerefunded 9/1/09 @ 101, FSA............ 2,320,380 1,000,000 Hawaii State GO, Series CU, 5.50%, 10/1/17, MBIA......... 1,125,580 4,000,000 Hawaii State GO, Series CV, 5.00%, 8/1/20, Callable 8/1/11 @ 100, FGIC........... 4,047,240 3,000,000 Hawaii State GO, Series CV, 5.25%, 8/1/21, Callable 8/1/11 @ 100, FGIC........... 3,070,710 1,000,000 Hawaii State Highway Revenue, 5.25%, 7/1/14, Callable 7/1/08 @ 101, FGIC........... 1,066,600 2,000,000 Hawaii State Highway Revenue, 5.38%, 7/1/14, Callable 7/1/11 @ 100, FSA............ 2,158,020 2,325,000 Hawaii State Highway Revenue, 5.38%, 7/1/15, Callable 7/1/11 @ 100, FSA............ 2,500,584 1,250,000 Hawaii State Highway Revenue, 5.25%, 7/1/16, Callable 7/1/06 @ 102, MBIA........... 1,335,375 1,350,000 Hawaii State Highway Revenue, 5.38%, 7/1/17, Callable 7/1/10 @ 100, FSA............ 1,428,422 2,530,000 Hawaii State Highway Revenue, 5.38%, 7/1/18, Callable 7/1/10 @ 100, FSA............ 2,641,725 875,000 Honolulu City & County GO, Series A, 6.00%, 1/1/11, FGIC 994,578 2,125,000 Honolulu City & County GO, Series A, 6.00%, 1/1/11, Escrowed to Maturity, FGIC... 2,430,108 4,820,000 Honolulu City & County GO, Series A, 5.75%, 4/1/11, Escrowed to Maturity, FGIC... 5,452,673 465,000 Honolulu City & County GO, Series A, 5.75%, 4/1/12, Escrowed to Maturity, FGIC... 526,924 1,865,000 Honolulu City & County GO, Series A, 5.75%, 4/1/12, FGIC 2,098,778 1,010,000 Honolulu City & County GO, Series A, 5.00%, 11/1/12, Callable 11/1/05 @ 101, MBIA......................... 1,074,842 850,000 Honolulu City & County GO, Series A, 5.75%, 4/1/13, Escrowed to Maturity, FGIC... 964,478 3,345,000 Honolulu City & County GO, Series A, 5.75%, 4/1/13, FGIC 3,767,005 5,000 Honolulu City & County GO, Series A, 5.63%, 9/1/13, Callable 9/1/06 @ 102, FGIC.. 5,486
See notes to financial statements. 51 PACIFIC CAPITAL FUNDS Tax-Free Securities Fund Schedule of Portfolio Investments, Continued July 31, 2003
Principal Security Amount Description Value - ------------ -------------------------------- ------------- Municipal Bonds, continued Hawaii, continued $ 1,670,000 Honolulu City & County GO, Series A, 5.63%, 9/1/13, Prerefunded 9/1/08 @ 100, FGIC........................... $ 1,895,817 3,500,000 Honolulu City & County GO, Series A, 5.38%, 9/1/18, Callable 9/1/11 @ 100, FSA..... 3,676,225 1,000,000 Honolulu City & County GO, Series B, 5.13%, 7/1/10, Callable 7/1/09 @ 101, FGIC.... 1,086,880 295,000 Honolulu City & County GO, Series B, 5.25%, 10/1/12, Escrowed to Maturity, FGIC..... 324,922 640,000 Honolulu City & County GO, Series B, 5.25%, 10/1/12, FGIC........................... 699,763 2,595,000 Honolulu City & County GO, Series B, 5.13%, 7/1/18, Callable 7/1/09 @ 101, FGIC.... 2,672,201 2,500,000 Honolulu City & County GO, Series C, 5.13%, 7/1/16, Callable 7/1/09 @ 101, FGIC.... 2,631,250 2,000,000 Honolulu City & County Waste Water System Revenue, Junior Series, 5.00%, 7/1/23, Callable 7/1/09 @ 101, FGIC............. 1,982,480 2,320,000 Honolulu City & County Water GO, 6.00%, 12/1/11, Escrowed to Maturity, FGIC..... 2,688,277 935,000 Honolulu City & County Water GO, 6.00%, 12/1/14, Escrowed to Maturity, FGIC..... 1,089,023 1,340,000 Kauai County GO, Series C, 5.90%, 8/1/09, AMBAC........... 1,533,402 935,000 Maui County GO, 5.25%, 9/1/06, Callable 9/1/03 @ 101, FGIC.... 947,305 1,000,000 Maui County GO, 6.00%, 12/15/08, FGIC................. 1,158,230 1,180,000 Maui County GO, 5.13%, 12/15/10, Prerefunded 12/15/03 @ 101, FGIC........... 1,209,901 1,005,000 Maui County GO, Series A, 5.10%, 9/1/11, Callable 9/1/07 @ 101, FGIC............. 1,079,782 1,020,000 Maui County GO, Series A, 5.90%, 6/1/14, Prerefunded 6/1/06 @ 101, MBIA............. 1,140,340 1,160,000 Maui County GO, Series A, 5.13%, 3/1/15, Callable 3/1/08 @ 101, FGIC............. 1,235,702 2,040,000 Maui County GO, Series A, 5.38%, 3/1/17, Callable 3/1/08 @ 101, FGIC............. 2,187,247 1,125,000 Maui County GO, Series C, 5.25%, 3/1/18, FGIC............ 1,169,809
Principal Security Amount Description Value - ------------ --------------------------------- ------------- Municipal Bonds, continued Hawaii, continued $ 1,000,000 University of Hawaii System Revenue, Series A, 5.50%, 7/15/16, FGIC............ $ 1,089,070 1,205,000 University of Hawaii System Revenue, Series A, 5.50%, 7/15/22, Callable 7/15/12 @ 100, FGIC....................... 1,259,478 1,000,000 University of Hawaii System Revenue, Series A, 5.50%, 7/15/29, Callable 7/15/12 @ 100, FGIC....................... 1,027,690 ------------- 184,636,686 ------------- Illinois (0.8%) 3,230,000 Chicago GO, Series A, 5.38%, 1/1/14, Callable 7/1/12 @ 100, AMBAC........................... 3,496,960 ------------- Kansas (1.5%) 3,725,000 Burlington Pollution Control Revenue, Kansas Gas & Electric Co. Project, 7.00%, 6/1/31, Callable 9/15/03 @ 101, MBIA............................ 3,924,362 2,195,000 Kansas City Utilities System Revenue, 6.38%, 9/1/23, Callable 9/1/04 @ 102, FGIC..... 2,365,156 ------------- 6,289,518 ------------- Kentucky (0.3%) 1,250,000 Kentucky State Property & Buildings Commission Revenue, 2nd Series, 5.50%, 11/1/16, FSA............. 1,359,313 ------------- Massachusetts (1.6%) 1,000,000 Massachusetts State GO, Series C, 5.75%, 10/1/20, Prerefunded 10/1/10 @ 100................... 1,141,280 5,000,000 Massachusetts State GO, Series D, 5.25%, 11/1/17, MBIA............ 5,523,350 80,000 Massachusetts State Water Pollution Abatement Revenue, Series 2, 5.70%, 2/1/13, Callable 2/1/05 @ 102........... 85,788 ------------- 6,750,418 ------------- Michigan (4.1%) 3,000,000 Caledonia Community Schools GO, 5.50%, 5/1/23, Callable 5/1/10 @ 100, FGIC.............. 3,102,000 3,000,000 Michigan Municipal Building Authority Revenue, Clean Water Revolving Fund, 5.50%, 10/1/21, Callable 10/1/10 @ 101........................... 3,400,140 1,500,000 Michigan State Building Authority Revenue, Series II, 5.00%, 10/15/12, Callable 10/15/07 @ 101.................. 1,665,720
See notes to financial statements. 52 PACIFIC CAPITAL FUNDS Tax-Free Securities Fund Schedule of Portfolio Investments, Continued July 31, 2003
Principal Security Amount Description Value - ------------ ------------------------------- ------------- Municipal Bonds, continued Michigan, continued $ 3,000,000 Michigan State GO, 5.50%, 12/1/13................ $ 3,361,140 2,245,000 Michigan State Strategic Fund Ltd. Obligation Revenue, 6.95%, 5/1/11, FGIC........... 2,696,784 2,250,000 Saline Area Schools GO, 5.50%, 5/1/15, Callable 5/1/05 @ 101, FGIC............ 2,402,775 ------------- 16,628,559 ------------- Minnesota (0.3%) 1,000,000 St. Paul Special Assessment GO, Series B, 5.00%, 3/1/13....... 1,053,560 ------------- Missouri (0.5%) 2,000,000 University of Missouri Revenue, Series B, 5.38%, 11/1/16...... 2,137,680 ------------- New Mexico (0.4%) 1,625,000 Sante Fe Gross Receipts Tax Revenue, Series B, 5.63%, 6/1/16, Callable 6/1/06 @ 102, AMBAC......................... 1,773,590 ------------- New York (2.1%) 5,000,000 New York State Thruway Authority General Revenue, Series D, 5.50%, 1/1/16, Callable 1/1/07 @ 102......... 5,430,700 2,000,000 New York State Thruway Authority Revenue, Highway & Bridge Trust Fund, Series A, 5.80%, 4/1/18, Callable 4/1/10 @ 101, FSA............. 2,183,340 1,000,000 New York State Thruway Authority Revenue, Highway & Bridge Trust Fund, Series B, 5.25%, 4/1/12, AMBAC.......... 1,087,590 ------------- 8,701,630 ------------- Ohio (2.8%) 2,320,000 Cleveland Package Facilities Revenue, 5.50%, 9/15/16, Callable 9/15/06 @ 102, MBIA.......................... 2,502,932 3,165,000 Columbus Municipal Airport Authority Revenue, Port Columbus Improvement, Series B, 5.00%, 1/1/16, Callable 1/1/08 @ 101, AMBAC........... 3,245,011 1,000,000 Hamilton County Sales Tax Revenue, Series B, 5.25%, 12/1/18, AMBAC......... 1,046,280 1,000,000 Ohio State Building Authority, Adult Correction Facility Revenue, Series A, 5.50%, 10/1/14, FSA........... 1,087,490
Principal Security Amount Description Value - ------------ ------------------------------ ------------- Municipal Bonds, continued Ohio, continued $ 2,250,000 Ohio State Community Turnpike Revenue, Series B, 5.50%, 2/15/12, FSA.......... $ 2,490,098 1,000,000 Ohio State Water Development Authority Pollution Control Facilities Revenue, 5.50%, 12/1/15, Callable 6/1/05 @ 101, MBIA........... 1,085,520 ------------- 11,457,331 ------------- Oregon (2.1%) 3,100,000 Clackamas Community College District GO, 5.25%, 6/15/16, Callable 6/15/11 @ 100, FGIC......................... 3,286,031 5,000,000 Portland Sewer System Revenue, Series A, 5.75%, 8/1/18, Callable 8/1/10 @ 100, FGIC.. 5,455,700 ------------- 8,741,731 ------------- Puerto Rico (0.4%) 1,500,000 Puerto Rico Commonwealth Public Improvement GO, Series A, 5.50%, 7/1/13, FGIC......................... 1,681,170 ------------- Tennessee (1.6%) 4,730,000 Shelby County GO, Series A, 5.63%, 4/1/15, Callable 4/1/05 @ 101................. 5,032,625 1,600,000 Shelby County GO, Series B, 5.25%, 8/1/17, Callable 8/1/07 @ 101................. 1,701,936 ------------- 6,734,561 ------------- Virginia (2.8%) 3,650,000 Norfolk Water Revenue, 5.75%, 11/1/13, Callable 11/1/05 @ 102, MBIA.......... 4,011,971 1,750,000 Richmond GO, Series B, 5.20%, 1/15/14, Callable 1/15/06 @ 102, FGIC.......... 1,891,225 5,000,000 Virginia State Public School Authority Special Obligation Chesapeake School Financing Revenue, 5.63%, 6/1/15, Callable 6/1/05 @ 102........ 5,487,650 ------------- 11,390,846 ------------- Washington (3.7%) 3,475,000 Douglas County School District No. 206 Eastmont GO, 5.00%, 12/1/17, FGIC......... 3,567,539 3,000,000 King County Sewer Revenue, Second Series, 6.25%, 1/1/14, Callable 1/1/09 @ 101, FGIC.. 3,408,810
See notes to financial statements. 53 PACIFIC CAPITAL FUNDS Tax-Free Securities Fund Schedule of Portfolio Investments, Continued July 31, 2003
Principal Security Amount Description Value - ------------ ------------------------------ ------------- Municipal Bonds, continued Washington, continued $ 1,000,000 Snohomish County GO, 5.70%, 12/1/14, Callable 12/1/09 @ 100, MBIA.......... $ 1,098,170 2,880,000 Snohomish County Limited Tax GO, 5.25%, 12/1/12, Callable 12/1/11 @ 100, MBIA.......... 3,113,482 4,000,000 Washington State GO, Series A, 5.63%, 7/1/19, Callable 7/1/10 @ 100................. 4,288,920 ------------- 15,476,921 ------------- Total Municipal Bonds (Cost $317,184,505) 342,531,567 -------------
Security Shares Description Value ------- ------------------------------- ------------ Investment Company (0.2%) 850,822 Dreyfus Tax Exempt Cash Management Fund, Institutional Shares.......................... $ 850,822 ------------ Total Investment Company (Cost $850,822) 850,822 ------------ Total Investments (Cost $374,948,993) (a)--98.1% 405,890,582 Other assets in excess of liabilities--1.9% 7,738,571 ------------ Net Assets--100.0% $413,629,153 ============
- -------- * Variable rate security. Rate represents rate in effect on July 31, 2003. Maturity reflects final maturity date. (a) Represents cost for financial reporting purposes and differs from value by unrealized appreciation (depreciation) of securities as follows: Unrealized appreciation.... $30,970,553 Unrealized depreciation.... (28,964) ----------- Net unrealized appreciation $30,941,589 ===========
Aggregate cost for federal income tax purposes is substantially the same. AMBAC--Insured by AMBAC Indemnity Corporation FGIC--Insured by the Financial Guaranty Insurance Company FHLB--Insured by Federal Home Loan Bank collateral FNMA--Insured by Federal National Mortgage Association collateral FSA--Insured by Financial Security Assurance GO--General Obligation MBIA--Insured by MBIA, Inc. See notes to financial statements. 54 PACIFIC CAPITAL FUNDS Tax-Free Short Intermediate Securities Fund Schedule of Portfolio Investments July 31, 2003
Principal Security Amount Description Value - ----------- ----------------------------------- ------------ Alternative Minimum Tax Paper (9.1%) Hawaii (6.7%) $ 610,000 Hawaii Airport System Revenue, Second Series, 6.90%, 7/1/12, Escrowed to Maturity, MBIA........ $ 723,747 1,000,000 Hawaii State Airport System Revenue, 4.75%, 7/1/06, FGIC...... 1,058,330 585,000 Hawaii State Harbor Capital Improvements Revenue, 5.80%, 7/1/04, FGIC............... 609,915 1,885,000 Hawaii State Housing Finance & Development Corp., Single Family Mortgage Revenue, Series A, 4.75%, 7/1/06, FNMA..... 1,994,952 ------------ 4,386,944 ------------ Tennessee (0.8%) 500,000 Memphis-Shelby County Airport Authority Revenue, 4.00%, 11/15/03, MBIA............. 503,775 ------------ Utah (1.6%) 1,000,000 Utah State Board of Regents Student Loan Revenue, Series N, 5.90%, 11/1/07, Callable 11/1/05 @ 102, AMBAC............................. 1,084,880 ------------ Total Alternative Minimum Tax Paper (Cost $5,719,538) 5,975,599 ------------ Commercial Paper (3.0%) Hawaii (3.0%) 2,000,000 Honolulu City & County GO, 1.05%, 8/7/03..................... 2,000,000 ------------ Total Commercial Paper (Cost $2,000,000) 2,000,000 ------------ Municipal Bonds (85.7%) Connecticut (0.0%) 25,000 Connecticut State GO, Series E, 4.75%, 3/15/08, Prerefunded 3/15/04 @ 101.50.................. 25,950 ------------ Hawaii (44.0%) 775,000 Hawaii County GO, Series A, 5.20%, 5/1/04, FGIC............... 799,010 1,065,000 Hawaii County GO, Series A, 5.25%, 5/15/12, Callable 5/15/09 @ 101..................... 1,140,338 2,275,000 Hawaii Department of Budget & Finance, Special Purpose Revenue, Queens Health System, Series A, 0.85%*, 7/1/26.......... 2,275,000 2,000,000 Hawaii State Airport System Revenue, First Series, 5.60%, 7/1/04, MBIA............... 2,079,920 1,000,000 Hawaii State GO, Series CN, 6.25%, 3/1/08, FGIC............... 1,140,160 800,000 Hawaii State GO, Series CO, 6.00%, 9/1/05, FGIC............... 871,112 1,000,000 Hawaii State GO, Series CO, 6.00%, 9/1/06, FGIC............... 1,110,070 1,150,000 Hawaii State GO, Series CP, 5.50%, 10/1/07, FGIC.............. 1,277,167
Principal Security Amount Description Value - ----------- ---------------------------------- ------------ Municipal Bonds, continued Hawaii, continued $ 1,000,000 Hawaii State GO, Series CR, 5.25%, 4/1/13, Callable 4/1/08 @ 101, MBIA.......................... $ 1,072,780 1,000,000 Hawaii State GO, Series CS, 5.00%, 4/1/07, MBIA......................... 1,082,420 1,000,000 Hawaii State GO, Series CT, 5.25%, 9/1/07, FSA.......................... 1,098,910 1,000,000 Hawaii State GO, Series CU, 5.75%, 10/1/10, MBIA........................ 1,132,490 1,250,000 Hawaii State GO, Series CV, 5.50%, 8/1/08, FGIC......................... 1,393,800 1,000,000 Hawaii State GO, Series CZ, 5.25%, 7/1/12, FSA.......................... 1,091,270 1,000,000 Hawaii State Harbor System Revenue, Series A, 4.50%, 7/1/08, AMBAC....................................... 1,067,930 750,000 Hawaii State Highway Revenue, 4.85%, 7/1/09, FSA.......................... 814,830 1,200,000 Hawaii State Housing Finance & Development Corp., Single Family Mortgage Revenue, Series B, 4.80%, 7/1/07, FNMA............... 1,270,836 3,600,000 Honolulu City & County GO, Series A, 0.80%*, 1/1/10.................... 3,599,999 1,000,000 Honolulu City & County GO, Series B, 0.80%*, 1/1/05.................... 1,000,000 1,150,000 Honolulu City & County Waste Water System Revenue, 5.00%, 7/1/09, FGIC......................... 1,258,606 1,000,000 Honolulu City & County Waste Water System Revenue, Series SR, 5.00%, 7/1/07, AMBAC....................................... 1,085,850 1,125,000 Maui County GO, Series B, 5.375%, 9/1/13, Callable 9/1/12 @ 100, MBIA.......................... 1,231,830 ------------ 28,894,328 ------------ Idaho (1.5%) 1,000,000 Idaho Health Facilities Authority Revenue, St. Lukes Regional Medical Center Project, 0.90%*, 5/1/22.............................. 1,000,000 ------------ Kansas (3.3%) 1,075,000 Johnson County, Unified School District #233 GO, Series C, 5.00%, 9/1/05, FGIC......................... 1,148,509 1,000,000 Wyandotte County & Kansas City Unified Government Utility System Revenue, 4.50%, 9/1/03, MBIA........................................ 1,002,812 ------------ 2,151,321 ------------ Michigan (8.7%) 3,000,000 Eastern Michigan University Revenue, 0.90%*, 6/1/27, FGIC............... 2,999,999 1,000,000 Huron Valley School District GO, 3.00%, 5/1/05............................... 1,027,380
See notes to financial statements. 55 PACIFIC CAPITAL FUNDS Tax-Free Short Intermediate Securities Fund Schedule of Portfolio Investments, Continued July 31, 2003
Principal Security Amount Description Value - ----------- ------------------------------------- ------------ Municipal Bonds, continued Michigan, continued $ 1,500,000 Michigan State Building Authority Revenue, Series II, 5.00%, 10/15/12, Callable 10/15/07 @ 101...................... $ 1,665,720 ------------ 5,693,099 ------------ Minnesota (1.5%) 1,000,000 Cohasset Minnesota Power & Light Co. Project Revenue, Series A, 0.90%*, 6/1/20...................... 1,000,000 ------------ Mississippi (2.0%) 1,200,000 Mississippi State GO, 5.50%, 9/1/09.. 1,347,672 ------------ Missouri (6.1%) 2,000,000 Kansas City Industrial Development Authority Revenue, Ewing Marion Kaufman Foundation, 0.90%*, 4/1/27...................... 2,000,000 1,000,000 Missouri State Health & Educational Facilities Authority Revenue, Saint Louis University, Series A, 0.95%*, 10/1/09..................... 1,000,000 1,000,000 Missouri State Health & Educational Facilities Authority Revenue, Washington University, Series D, 0.90%*, 9/1/30...................... 1,000,000 ------------ 4,000,000 ------------ New Jersey (2.7%) 1,750,000 New Jersey State Transportation Corp., Capital Grant Revenue Anticipation Notes, Series B, 5.50%, 2/1/11, Continuously Callable @ 100, AMBAC............... 1,752,223 ------------ New York (4.8%) 1,000,000 Metropolitan Transportation Authority Revenue, Dedicated Tax Fund, Series A, 5.25%, 11/15/12, FSA...... 1,092,790 1,000,000 New York GO, Series F, 4.00%, 8/1/03 1,000,073
Shares or Principal Security Amount Description Value ---------- -------------------------------- ------------ Municipal Bonds, continued New York, continued $1,000,000 New York State Thruway Authority Revenue, Highway & Bridge Trust Fund, Series B, 5.25%, 4/1/12, AMBAC............ $ 1,087,590 ------------ 3,180,453 ------------ North Carolina (4.5%) 2,975,000 Durham GO, 0.90%*, 2/1/11........ 2,975,000 ------------ Pennsylvania (1.7%) 1,030,000 Philadelphia Water & Wastewater Revenue, Series B, 5.50%, 11/1/11, FGIC................... 1,147,410 ------------ Texas (1.6%) 1,000,000 Texas Municipal Power Agency Revenue, 3.75%, 9/1/05, Continuously Callable @ 100, AMBAC........................... 1,022,110 ------------ Utah (1.7%) 1,000,000 Utah State GO, Series F, 5.00%, 7/1/12, Prerefunded 7/1/07 @ 100.................... 1,096,360 ------------ Washington (1.6%) 1,000,000 Washington State GO, Series A, 5.80%, 9/1/08, Prerefunded 9/1/04 @ 100.................... 1,051,610 ------------ Total Municipal Bonds (Cost $55,025,513) 56,337,536 ------------ Investment Company (1.4%) 904,967 Dreyfus Tax Exempt Cash Management Fund, Institutional Shares.......................... 904,967 ------------ Total Investment Company (Cost $904,967) 904,967 ------------ Total Investments (Cost $63,650,018) (a)--99.2% 65,218,102 Other assets in excess of liabilities--0.8% 552,483 ------------ Net Assets--100.0% $ 65,770,585 ============
- -------- * Variable rate security. Rate represents rate in effect on July 31, 2003. Maturity reflects final maturity date. (a) Represents cost for financial reporting purposes and differs from value by unrealized appreciation (depreciation) of securities as follows: Unrealized appreciation.... $1,627,313 Unrealized depreciation.... (59,229) ---------- Net unrealized appreciation $1,568,084 ==========
Aggregate cost for federal income tax purposes is substantially the same. AMBAC--Insured by AMBAC Indemnity Corporation FGIC--Insured by the Financial Guaranty Insurance Company FNMA--Insured by Federal National Mortgage Association collateral FSA--Insured by Financial Security Assurance GO--General Obligation MBIA--Insured by MBIA, Inc. See notes to financial statements. 56 PACIFIC CAPITAL FUNDS International Stock Fund Schedule of Portfolio Investments July 31, 2003
Security Shares Description Value - ------- ---------------------------------- ------------ Common Stocks (94.2%) Australia (2.2%) Airlines (0.5%) 142,374 Qantas Airways Ltd................ $ 294,350 ------------ Multimedia (1.3%) 66,000 News Corp., Ltd. (The)............ 494,902 46,000 Publishing & Broadcasting Ltd..... 306,175 ------------ 801,077 ------------ Telecommunications (0.4%) 86,000 Telstra Corp., Ltd................ 260,847 ------------ 1,356,274 ------------ Belgium (0.5%) Beverages (0.5%) 12,800 Interbrew......................... 285,548 ------------ Bermuda (0.7%) Oil & Gas--Exploration & Production Services (0.7%) 4,700 Nabors Industries Ltd. (b)........ 168,260 7,300 Weatherford International Ltd. (b) 264,771 ------------ 433,031 ------------ Brazil (2.8%) Beverages (0.6%) 19,300 Companhia de Bebidas das Americas, ADR.............................. 383,105 ------------ Oil & Gas--Exploration & Production Services (0.6%) 19,400 Petroleo Brasileiro SA, ADR....... 393,626 ------------ Paper Products (0.3%) 7,500 Aracruz Celulose SA, ADR.......... 187,800 ------------ Telecommunications (1.3%) 31,500 Tele Norte Leste Participacoes SA, ADR.............................. 347,130 16,200 Telecomunicacoes Brasileiras SA, ADR.............................. 416,016 ------------ 763,146 ------------ 1,727,677 ------------ Canada (6.4%) Automotive Parts (0.6%) 4,700 Magna International, Inc., Class A 357,444 ------------ Banks (0.8%) 11,400 Bank of Nova Scotia............... 490,323 ------------ Food Distributors (0.6%) 8,000 Loblaw Cos., Ltd.................. 359,311 ------------ Metals (0.5%) 9,400 Alcan, Inc........................ 327,214 ------------ Oil & Gas--Exploration & Production Services (2.6%) 13,400 EnCana Corp....................... 462,541 6,000 Petro-Canada...................... 229,988 17,000 Precision Drilling Corp. (b)...... 617,101 7,100 Talisman Energy, Inc.............. 304,519 ------------ 1,614,149 ------------
Security Shares Description Value - --------- ---------------------------------- ------------ Common Stocks, continued Canada, continued Telecommunications (0.7%) 24,530 Telus Corp........................ $ 426,198 ------------ Transportation (0.6%) 7,300 Canadian National Railway Co...... 379,965 ------------ 3,954,604 ------------ China (1.9%) Oil & Gas--Exploration & Production Services (0.7%) 239,000 CNOOC Ltd......................... 412,161 ------------ Telecommunications (0.9%) 2,322,000 China Telecom Corp., Ltd., Class H 625,215 ------------ Transportation (0.3%) 390,000 Jiangsu Expressway Co., Ltd., Class H.......................... 160,015 ------------ 1,197,391 ------------ Denmark (0.5%) Telecommunications (0.5%) 11,200 TDC A/S........................... 321,500 ------------ Finland (1.6%) Paper Products (0.8%) 28,500 UPM-Kymmene Oyj................... 465,775 ------------ Telecommunications--Services & Equipment (0.8%) 17,500 Nokia Corp., Class A, ADR......... 267,750 16,300 Nokia Oyj......................... 249,879 ------------ 517,629 ------------ 983,404 ------------ France (5.0%) Automotive Parts (0.2%) 3,900 Compagnie Generale des Etablissements Michelin, Class B. 141,434 ------------ Banks (1.1%) 12,900 BNP Paribas SA.................... 701,587 ------------ Insurance (0.8%) 27,100 Axa............................... 466,687 ------------ Leisure (0.5%) 8,000 Accor SA.......................... 301,017 ------------ Oil & Gas--Exploration & Production Services (1.3%) 5,100 Total Fina SA, Class B............ 756,572 ------------ Telecommunication Equipment (0.8%) 49,200 Alcatel (b)....................... 493,963 ------------ Telecommunications (0.3%) 7,800 France Telecom SA (b)............. 206,226 ------------ 3,067,486 ------------ Germany (4.6%) Automotive (0.7%) 7,400 Bayerische Motoren Werke AG....... 287,353 392 Porsche AG........................ 160,161 ------------ 447,514 ------------
See notes to financial statements. 57 PACIFIC CAPITAL FUNDS International Stock Fund Schedule of Portfolio Investments, Continued July 31, 2003
Security Shares Description Value - ------- ------------------------------ ------------ Common Stocks, continued Germany, continued Chemicals (0.9%) 11,600 BASF AG....................... $ 551,632 ------------ Financial Services (0.5%) 2,700 Muenchener Rueckversicherungs- Gesellschaft AG.............. 305,418 ------------ Pharmaceuticals (0.6%) 6,000 Altana AG..................... 370,756 ------------ Retail (0.1%) 1,500 Metro AG...................... 55,377 ------------ Software & Computer Services (1.3%) 4,300 SAP AG........................ 504,314 27,000 T-Online International AG (b). 281,106 ------------ 785,420 ------------ Transportation (0.5%) 20,800 Deutsche Post AG.............. 310,202 ------------ 2,826,319 ------------ Hong Kong (1.3%) Real Estate (0.6%) 52,000 Cheung Kong Holdings Ltd...... 341,700 ------------ Utilities--Electric (0.7%) 102,000 CLP Holdings Ltd.............. 448,581 ------------ 790,281 ------------ Hungary (0.4%) Banks (0.4%) 28,900 OTP Bank Rt. (b).............. 270,376 ------------ Ireland (1.0%) Banks (1.0%) 53,300 Bank of Ireland............... 620,915 ------------ Israel (2.7%) Pharmaceuticals (2.7%) 10,000 Taro Pharmaceutical Industries Ltd. (b)..................... 545,700 19,200 Teva Pharmaceutical Industries Ltd., ADR.................... 1,100,928 ------------ 1,646,628 ------------ Italy (2.9%) Aerospace/Defense (0.4%) 396,600 Finmeccanica SpA.............. 271,407 ------------ Banks (0.6%) 81,700 UniCredito Italiano SpA....... 383,463 ------------ Oil & Gas--Exploration & Production Services (1.4%) 19,600 ENI SpA....................... 289,217 145,700 Snam Rete Gas SpA............. 560,854 ------------ 850,071 ------------ Television (0.5%) 32,000 Mediaset SpA.................. 287,060 ------------ 1,792,001 ------------
Security Shares Description Value - ------- ----------------------------------------- ------------ Common Stocks, continued Japan (18.3%) Advertising (0.4%) 87 Dentsu, Inc.............................. $ 276,420 ------------ Automotive (1.6%) 10,500 Honda Motor Co., Ltd..................... 405,035 22,300 Toyota Motor Corp........................ 564,230 ------------ 969,265 ------------ Banks (0.7%) 94 Mitsubishi Tokyo Financial Group, Inc. 417,968 ------------ Building Materials (0.8%) 74,000 Asahi Glass Co., Ltd..................... 503,380 ------------ Business Equipment & Services (1.0%) 13,000 Canon, Inc............................... 625,493 ------------ Chemicals (1.6%) 125,000 Asahi Kasei Corp......................... 379,526 17,400 Shin-Etsu Chemical Co., Ltd.............. 606,247 ------------ 985,773 ------------ Electrical & Electronic (3.8%) 9,700 Fanuc Ltd................................ 539,135 2,500 Keyence Corp............................. 465,386 56,000 Matsushita Electricl Industrial Co., Ltd. 661,994 9,000 Murata Manufacturing Co., Ltd............ 414,368 3,000 SMC Corp................................. 281,223 ------------ 2,362,106 ------------ Financial Services (1.3%) 49,000 Daiwa Securities Group, Inc.............. 283,728 41,000 Nomura Holdings, Inc..................... 544,195 ------------ 827,923 ------------ Insurance (1.1%) 74 Millea Holdings, Inc..................... 687,544 ------------ Manufacturing--Consumer Goods (0.7%) 22,000 Kao Corp................................. 412,460 ------------ Medical Equipment & Supplies (1.0%) 9,000 Hoya Corp................................ 645,817 ------------ Printing & Publishing (1.1%) 56,000 Dai Nippon Printing Co., Ltd............. 657,812 ------------ Real Estate (1.0%) 87,000 Mitsubishi Estate Co., Ltd............... 635,116 ------------ Telecommunications (1.6%) 140 Japan Telecom Holdings Co., Ltd.......... 429,715 130 KDDI Corp................................ 586,669 ------------ 1,016,384 ------------ Transportation (0.6%) 80 East Japan Railway Co.................... 351,072 ------------ 11,374,533 ------------ Netherlands (4.3%) Electronics--Semiconductors (0.7%) 33,500 ASML Holding NV (b)...................... 433,490 ------------ Insurance (1.3%) 42,600 ING Groep NV............................. 862,592 ------------
See notes to financial statements. 58 PACIFIC CAPITAL FUNDS International Stock Fund Schedule of Portfolio Investments, Continued July 31, 2003
Security Shares Description Value - ------ ------------------------------ ------------ Common Stocks, continued Netherlands, continued Oil & Gas--Exploration & Production Services (1.4%) 13,300 Royal Dutch Petroleum Co...... $ 579,614 6,100 Schlumberger Ltd.............. 274,927 ------------ 854,541 ------------ Transportation (0.9%) 28,800 TPG NV........................ 537,455 ------------ 2,688,078 ------------ Norway (1.1%) Oil & Gas--Exploration & Production Services (0.5%) 35,700 Statoil ASA................... 321,564 ------------ Telecommunications (0.6%) 78,750 Telenor ASA................... 345,697 ------------ 667,261 ------------ Russia (0.7%) Oil & Gas--Exploration & Production Services (0.7%) 6,000 OAO LUKOIL, ADR............... 428,400 ------------ Singapore (1.4%) Airlines (0.3%) 32,000 Singapore Airlines Ltd........ 196,576 ------------ Banks (0.6%) 53,000 DBS Group Holdings Ltd........ 343,666 ------------ Publishing (0.5%) 32,000 Singapore Press Holdings Ltd.. 344,008 ------------ 884,250 ------------ South Korea (5.2%) Banks (0.6%) 11,900 Kookmin Bank.................. 390,618 ------------ Chemicals (0.7%) 11,100 KG Chem Ltd................... 437,230 ------------ Electronic Components/Instruments (2.1%) 15,760 LG Electronics, Inc........... 676,859 3,400 Samsung Electronics Co., Ltd., GDR (c)...................... 599,250 ------------ 1,276,109 ------------ Steel (0.5%) 2,700 POSCO......................... 324,778 ------------ Telecommunications (1.3%) 3,200 SK Telecom Co., Ltd........... 555,697 13,600 SK Telecom Co., Ltd., ADR..... 263,976 ------------ 819,673 ------------ 3,248,408 ------------ Spain (2.1%) Electric Services (0.6%) 22,000 Endesa SA..................... 349,146 ------------ Oil & Gas--Exploration & Production Services (0.5%) 20,000 Repsol YPF SA................. 320,782 200 Repsol YPF SA, ADR............ 3,172 ------------ 323,954 ------------
Security Shares Description Value - ------ ---------------------------------- ------------ Common Stocks, continued Spain, continued Utilities--Telecommunications (1.0%) 51,408 Telefonica SA (b)................. $ 601,188 ------------ 1,274,288 ------------ Sweden (1.6%) Banks (0.9%) 52,000 Skandinaviska Enskilda Banken AB, Class A.......................... 563,521 ------------ Retail (0.7%) 19,600 Hennes & Mauritz AB, Class B...... 417,648 ------------ 981,169 ------------ Switzerland (6.2%) Banks (3.1%) 34,500 Credit Suisse Group............... 1,084,250 13,800 UBS AG............................ 808,099 ------------ 1,892,349 ------------ Building Materials (0.7%) 11,000 Holcim Ltd........................ 456,664 ------------ Insurance (0.3%) 4,400 Converium Holding AG.............. 209,104 ------------ Pharmaceuticals (2.1%) 16,858 Novartis AG....................... 650,132 7,600 Roche Holding AG.................. 633,795 ------------ 1,283,927 ------------ 3,842,044 ------------ Taiwan (0.6%) Electronics (0.1%) 3,592 Taiwan Semiconductor Manufacturing Co., Ltd., ADR (b)............... 35,920 ------------ Telecommunications (0.5%) 26,300 Chunghwa Telecom Co., Ltd., ADR... 362,677 ------------ 398,597 ------------ United Kingdom (17.8%) Airlines (0.3%) 70,700 British Airways PLC (b)........... 196,325 ------------ Airport Development (0.5%) 38,000 BAA PLC........................... 286,480 ------------ Banks (4.4%) 69,052 Barclays PLC...................... 519,746 65,700 HBOS PLC.......................... 818,474 46,428 Royal Bank of Scotland Group PLC.. 1,311,262 ------------ 2,649,482 ------------ Financial Services (1.1%) 35,400 Man Group PLC..................... 704,468 ------------ Food Products (0.4%) 44,410 Cadbury Schweppes PLC............. 269,128 ------------ Leisure (0.5%) 10,300 Carnival PLC...................... 327,161 ------------
See notes to financial statements. 59 PACIFIC CAPITAL FUNDS International Stock Fund Schedule of Portfolio Investments, Continued July 31, 2003
Security Shares Description Value - ------- ------------------------------------- ------------ Common Stocks, continued United Kingdom, continued Lodging (0.4%) 35,254 InterContinental Hotels Group PLC (b) $ 264,078 ------------ Manufacturing--Consumer Goods (0.7%) 25,200 Reckitt Benckiser PLC................ 463,409 Metals (1.4%) 148,372 BHP Billiton PLC..................... 885,433 ------------ Pharmaceuticals (1.3%) 42,700 GlaxoSmithKline PLC.................. 818,166 ------------ Real Estate (1.1%) 18,000 Berkeley Group PLC (The)............. 246,127 39,000 George Wimpey PLC.................... 221,925 24,500 Persimmon PLC........................ 205,971 ------------ 674,023 ------------ Retail (1.6%) 21,000 Kesa Electricals PLC (b)............. 69,201 91,875 Kingfisher PLC....................... 414,255 122,900 Tesco PLC............................ 425,238 ------------ 908,694 ------------ Telecommunications (2.4%) 632,000 mmO2 PLC (b)......................... 546,051 478,300 Vodafone Group PLC................... 907,235 ------------ 1,453,286 ------------ Television (0.9%) 49,700 British Sky Broadcasting Group PLC (b)............................. 562,827 ------------ Tobacco (0.4%) 17,500 Imperial Tobacco Group PLC........... 275,115 ------------ Utilities--Gas (0.4%) 61,600 BG Group PLC......................... 268,341 ------------ 11,006,416 ------------
Security Shares Description Value - --------- ----------------------------------- ----------- Common Stocks, continued United States (0.4%) Telecommunication Equipment (0.4%) 6,300 UTStarcom, Inc. (b)................ $ 268,191 ----------- Total Common Stocks (Cost $52,440,198) 58,335,070 ----------- Equity Linked Notes (3.1%) Taiwan (3.1%) Chemicals (0.7%) 303,500 Formosa Plastics Corp. (b)......... 412,760 ----------- Computers & Peripherals (1.2%) 117,100 Asustek Computer, Inc. (b)......... 380,575 190,000 Quanta Computer, Inc., Series C (b) 446,500 ----------- 827,075 ----------- Electronics--Semiconductors (0.4%) 297,000 Nanya Technology Corp. (b)......... 219,780 ----------- Semiconductors (0.8%) 284,000 Taiwan Semiconductor Manufacturing Co., Ltd. (b)..................... 485,640 ----------- Total Equity Linked Notes (Cost $1,784,180) 1,945,255 ----------- Option (0.0%) Hong Kong (0.0%) 1,030,000 Hong Kong Dollar Put, Expires 10/7/03........................... 312 ----------- Total Option (Cost $5,871) 312 ----------- Cash Sweep (1.0%) 628,029 Bank of New York................... 628,029 ----------- Total Cash Sweep (Cost $628,029) 628,029 ----------- Total Investments (Cost $54,858,278) (a)--98.3% 60,908,666 Other assets in excess of liabilities--1.7% 1,059,780 ----------- Net Assets--100.0% $61,968,446 ===========
- -------- (a) Represents cost for financial reporting purposes and differs from value by unrealized appreciation (depreciation) of securities as follows: Unrealized appreciation.... $ 7,310,348 Unrealized depreciation.... (1,259,960) ----------- Net unrealized appreciation $ 6,050,388 ===========
Aggregate cost for federal income tax purposes is substantially the same. (b) Non-income producing security. (c) Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration normally to qualified institutional buyers. AB--Aktiebolog (Swedish Stock Co.) ADR--American Depositary Receipt AG--Aktiengesellschaft (West German Stock Co.) GDR--Global Depositary Receipt NV--Naamloze Vennootschaap (Dutch Corp.) PLC--Public Limited Company SA--Societe Anonyme (French Corp.) SpA--Societa per Azioni (Italian Corp.) See notes to financial statements. 60 PACIFIC CAPITAL FUNDS Value Fund Schedule of Portfolio Investments July 31, 2003
Security Shares Description Value - ------- ---------------------------------- ------------- Common Stocks (98.0%) Aerospace/Defense (0.9%) 20,980 Northrop Grumman Corp............. $ 1,935,195 ------------- Banks (9.8%) 93,460 Bank of America Corp.............. 7,716,992 72,141 Bank of New York Co., Inc......... 2,172,887 57,240 Comerica, Inc..................... 2,774,995 120,911 FleetBoston Financial Corp........ 3,759,123 104,850 Wachovia Corp..................... 4,580,897 ------------- 21,004,894 ------------- Beverages (0.7%) 28,600 Anheuser-Busch Cos., Inc.......... 1,482,052 ------------- Business Equipment & Services (2.6%) 307,380 Cendant Corp. (b)................. 5,517,471 ------------- Chemicals (3.8%) 66,830 Air Products & Chemicals, Inc..... 3,106,258 43,270 Dow Chemical Co................... 1,527,431 79,926 E.I. du Pont de Nemours & Co...... 3,511,949 ------------- 8,145,638 ------------- Computers & Peripherals (3.4%) 188,943 Hewlett-Packard Co................ 3,999,923 40,230 International Business Machines Corp............................. 3,268,688 ------------- 7,268,611 ------------- Consumer Goods & Services (0.7%) 32,665 Kimberly-Clark Corp............... 1,580,986 ------------- Diversified Operations (7.3%) 171,370 Flowserve Corp. (b)............... 3,300,586 98,770 Honeywell International, Inc...... 2,793,216 63,240 Ingersoll-Rand Co., Ltd........... 3,430,138 51,600 ITT Industries, Inc............... 3,441,719 139,940 Tyco International Ltd............ 2,602,884 ------------- 15,568,543 ------------- Electronic Components/Instruments (1.9%) 269,620 Flextronics International Ltd. (b) 2,965,820 82,415 Vishay Intertechnology, Inc. (b).. 1,096,120 ------------- 4,061,940 ------------- Electronics--Semiconductors (1.1%) 58,800 Cypress Semiconductor Corp. (b)... 822,024 70,550 STMicroelectronics NV, ADR........ 1,509,065 ------------- 2,331,089 ------------- Entertainment (2.7%) 130,390 AOL Time Warner, Inc. (b)......... 2,011,918 85,085 Viacom, Inc., Class B (b)......... 3,702,899 ------------- 5,714,817 ------------- Financial Services (13.9%) 84,670 Capital One Financial Corp........ 4,056,540 237,193 Citigroup, Inc.................... 10,626,247 47,420 Fannie Mae........................ 3,036,777 132,165 J.P. Morgan Chase & Co............ 4,632,383 44,040 Lehman Brothers Holdings, Inc..... 2,786,411 100,330 Morgan Stanley.................... 4,759,655 ------------- 29,898,013 -------------
Security Shares Description Value - ------- ---------------------------------- ------------- Common Stocks, continued Food Processing & Packaging (1.0%) 93,090 ConAgra Foods, Inc................ $ 2,097,318 ------------- Health Care Facilities (1.0%) 83,370 Apria Healthcare Group, Inc. (b).. 2,164,285 ------------- Insurance (7.5%) 61,590 ACE Ltd........................... 2,031,854 56,970 American International Group, Inc. 3,657,474 65,600 Hartford Financial Services Group, Inc. (The)....................... 3,423,664 84,300 MetLife, Inc...................... 2,336,796 55,380 RenaissanceRe Holdings Ltd........ 2,358,634 134,669 Travelers Property Casualty Corp., Class B.......................... 2,173,558 ------------- 15,981,980 ------------- Insurance--Life & Health (2.5%) 111,720 Lincoln National Corp............. 4,171,625 79,600 UnumProvident Corp................ 1,080,968 ------------- 5,252,593 ------------- Media--Cable TV (3.5%) 144,355 Comcast Corp., Class A (b)........ 4,376,843 288,220 Liberty Media Corp., Class A (b).. 3,196,360 ------------- 7,573,203 ------------- Medical Instruments (1.0%) 30,640 C.R. Bard, Inc.................... 2,100,678 ------------- Medical Services (0.6%) 40,260 Laboratory Corp. of America Holdings (b)..................... 1,279,060 ------------- Metal & Mineral Production (1.4%) 110,620 Alcoa, Inc........................ 3,071,917 ------------- Oil & Gas--Exploration & Production Services (9.8%) 52,860 ChevronTexaco Corp................ 3,811,735 75,680 ConocoPhillips.................... 3,961,091 58,084 Devon Energy Corp................. 2,751,439 217,678 Exxon Mobil Corp.................. 7,744,984 39,900 National-Oilwell, Inc. (b)........ 734,160 61,730 Newfield Exploration Co. (b)...... 2,230,305 ------------- 21,233,714 ------------- Paper Products (0.4%) 20,470 Temple-Inland, Inc................ 949,603 ------------- Pharmaceuticals (1.2%) 57,050 Wyeth............................. 2,600,339 ------------- Publishing (2.2%) 35,250 Gannett Co., Inc.................. 2,708,257 33,270 McGraw-Hill Cos., Inc. (The)...... 2,022,151 ------------- 4,730,408 ------------- Restaurants (0.6%) 43,330 Yum! Brands, Inc. (b)............. 1,296,867 ------------- Retail (1.6%) 82,850 Pier 1 Imports, Inc............... 1,541,010 48,551 Target Corp....................... 1,860,474 ------------- 3,401,484 -------------
See notes to financial statements. 61 PACIFIC CAPITAL FUNDS Value Fund Schedule of Portfolio Investments, Continued July 31, 2003
Security Shares Description Value - ------- -------------------------- ------------- Common Stocks, continued Savings & Loans (2.9%) 155,055 Washington Mutual, Inc.... $ 6,121,571 ------------- Software & Computer Services (0.6%) 69,269 FileNET Corp. (b)......... 1,262,081 ------------- Telecommunications--Services & Equipment (0.6%) 187,510 RF Micro Devices, Inc. (b) 1,378,199 ------------- Tobacco (0.5%) 27,094 Altria Group, Inc......... 1,084,031 ------------- Utilities--Electric (5.4%) 69,900 Dominion Resources, Inc... 4,200,990 75,380 Exelon Corp............... 4,332,088 86,620 FirstEnergy Corp.......... 2,987,524 ------------- 11,520,602 -------------
Security Shares Description Value --------- ------------------------- ------------ Common Stocks, continued Utilities--Telecommunications (4.9%) 53,242 AT&T Corp................... $ 1,131,925 174,250 SBC Communications, Inc..... 4,070,480 150,161 Verizon Communications...... 5,234,612 ------------ 10,437,017 ------------ Total Common Stocks (Cost $203,974,978) 210,046,199 ------------ Investment Company (1.9%) 4,026,077 LEADER Money Market Fund, Institutional Shares....... 4,026,077 ------------ Total Investment Company (Cost $4,026,077) 4,026,077 ------------ Total Investments (Cost $208,001,055) (a)--99.9% 214,072,276 Other assets in excess of liabilities--0.1% 245,527 ------------ Net Assets--100.0% $214,317,803 ============
- -------- (a) Represents cost for financial reporting purposes and differs from value by unrealized appreciation (depreciation) of securities as follows: Unrealized appreciation.... $ 19,371,792 Unrealized depreciation.... (13,300,571) ------------ Net unrealized appreciation $ 6,071,221 ============
Aggregate cost for federal income tax purposes is substantially the same. (b) Non-income producing security. ADR--American Depositary Receipt NV--Naamloze Vennootschaap (Dutch Corp.) See notes to financial statements. 62 PACIFIC CAPITAL FUNDS Small Cap Fund Schedule of Portfolio Investments July 31, 2003
Security Shares Description Value ---------- --------------------------------------- ------------ Common Stocks (88.5%) Aerospace/Defense (2.5%) 177,100 AAR Corp............................... $ 1,434,510 64,200 Kaman Corp............................. 789,018 ------------ 2,223,528 ------------ Agricultural Services (1.3%) 46,800 Delta & Pine Land Co................... 1,156,428 ------------ Airlines (1.0%) 61,300 Continental Airlines, Inc., Class B (b) 896,819 ------------ Apparel (1.0%) 26,700 Kellwood Co............................ 877,095 ------------ Appliances (1.0%) 112,000 Applica, Inc........................... 919,520 ------------ Automotive (1.1%) 14,900 Oshkosh Truck Corp..................... 991,148 ------------ Banks (7.7%) 23,960 Associated Banc-Corp................... 900,417 30,700 Banknorth Group, Inc................... 847,320 25,200 Community Bank System, Inc............. 1,063,439 30,300 F.N.B. Corp............................ 955,965 33,400 FirstMerit Corp........................ 797,258 33,900 Greater Bay Bancorp.................... 664,101 30,300 Oak Hill Financial, Inc................ 892,335 56,200 Riggs National Corp.................... 909,316 ------------ 7,030,151 ------------ Building Materials (4.1%) 27,900 Ameron International Corp.............. 946,368 58,800 Dycom Industries, Inc. (b)............. 1,000,188 85,900 Louisiana-Pacific Corp. (b)............ 1,043,685 21,700 Quanex Corp............................ 687,890 ------------ 3,678,131 ------------ Business Equipment & Services (6.2%) 23,300 CACI International, Inc., Class A (b) 916,622 127,700 Danka Business Systems PLC, ADR (b)............................... 440,565 52,100 infoUSA, Inc. (b)...................... 468,900 29,900 PEC Solutions, Inc. (b)................ 670,956 37,500 RadiSys Corp. (b)...................... 577,500 95,100 Titan Corp. (The) (b).................. 1,458,834 46,200 Viad Corp.............................. 1,025,178 ------------ 5,558,555 ------------ Chemicals (1.2%) 77,000 OM Group, Inc.......................... 1,071,070 ------------ Commercial Services (1.9%) 45,300 Price Communications Corp. (b)......... 575,310 46,000 SOURCECORP, Inc. (b)................... 1,099,400 ------------ 1,674,710 ------------ Computers & Peripherals (1.4%) 52,400 ATI Technologies, Inc. (b)............. 650,808 17,800 Imation Corp........................... 635,282 ------------ 1,286,090 ------------ Consumer Services (0.9%) 188,400 Stewart Enterprises, Inc., Class A (b) 830,844 ------------
Security Shares Description Value ---------- --------------------------------------- ------------ Common Stocks, continued Diversified Operations (0.5%) 9,500 Actuant Corp., Class A (b)............. $ 462,650 ------------ Educational Services (0.5%) 21,600 Concorde Career Colleges, Inc. (b)..... 447,120 ------------ Electronic Components/Instruments (1.7%) 82,000 Power-One, Inc. (b).................... 868,380 21,500 Rogers Corp. (b)....................... 633,820 ------------ 1,502,200 ------------ Electronics--Semiconductors (3.4%) 245,100 Agere Systems, Inc., Class A (b)....... 688,731 133,700 ASE Test Ltd. (b)...................... 903,812 27,700 Photronics, Inc. (b)................... 508,295 20,900 Planar Systems, Inc. (b)............... 504,108 38,200 PMC-Sierra, Inc. (b)................... 468,332 ------------ 3,073,278 ------------ Food Processing & Packaging (1.4%) 25,900 Chiquita Brands International, Inc. (b) 396,270 43,350 Flowers Foods, Inc..................... 882,173 ------------ 1,278,443 ------------ Health Care (1.3%) 42,400 LifePoint Hospitals, Inc. (b).......... 1,196,952 ------------ Hotels & Lodging (0.8%) 45,400 Extended Stay America, Inc. (b)........ 679,184 ------------ Insurance (4.2%) 287,700 Meadowbrook Insurance Group, Inc. (b) 891,870 52,500 Phoenix Cos., Inc. (The)............... 491,400 21,700 Platinum Underwriters Holdings, Ltd. 586,985 28,300 RLI Corp............................... 915,788 33,100 Selective Insurance Group, Inc......... 842,726 ------------ 3,728,769 ------------ Machinery/Equipment (1.1%) 59,910 Gerber Scientific, Inc. (b)............ 507,438 29,800 Rofin-Sinar Technologies, Inc. (b)..... 441,040 ------------ 948,478 ------------ Manufacturing (1.8%) 38,200 Cooper Tire & Rubber Co................ 649,400 59,100 Tredegar Corp.......................... 930,825 ------------ 1,580,225 ------------ Media--Cable TV (0.3%) 59,700 Charter Communications, Inc., Class A (b)........................... 290,739 ------------ Medical--Biotechnology (1.2%) 13,400 CV Therapeutics, Inc. (b).............. 478,246 37,200 SangStat Medical Corp. (b)............. 595,572 ------------ 1,073,818 ------------ Medical Instruments (1.2%) 15,900 Inamed Corp. (b)....................... 1,055,760 ------------ Metals (3.3%) 90,000 Allegheny Technologies, Inc............ 679,500 45,000 Cleveland-Cliffs, Inc. (b)............. 886,500 85,000 Commonweath Industries, Inc............ 408,000
See notes to financial statements. 63 PACIFIC CAPITAL FUNDS Small Cap Fund Schedule of Portfolio Investments, Continued July 31, 2003
Security Shares Description Value ---------- ----------------------------------- ------------ Common Stocks, continued Metals, continued 57,800 Joy Global, Inc. (b)............... $ 912,662 5,600 Steel Technologies, Inc............ 60,256 ------------ 2,946,918 ------------ Multimedia (1.8%) 52,500 aQuantive, Inc. (b)................ 519,750 172,900 UnitedGlobalCom, Inc., Class A (b). 1,096,186 ------------ 1,615,936 ------------ Oil & Gas--Exploration & Production Services (1.7%) 155,500 Newpark Resources, Inc. (b)........ 747,955 37,000 Westport Resources Corp. (b)....... 767,750 ------------ 1,515,705 ------------ Pharmaceuticals (2.9%) 47,200 Andrx Corp. (b).................... 1,070,496 29,100 CIMA Labs, Inc. (b)................ 838,080 124,100 Medarex, Inc. (b).................. 689,996 ------------ 2,598,572 ------------ Publishing (0.9%) 22,400 Lee Enterprises, Inc............... 831,712 ------------ Raw Materials (1.1%) 42,100 Georgia Gulf Corp.................. 963,248 ------------ Real Estate (4.3%) 70,000 American Financial Realty Trust.... 1,031,800 39,000 Anworth Mortgage Asset Corp........ 599,820 21,100 Gables Residential Trust........... 669,925 78,700 Innkeepers USA Trust............... 645,340 23,800 Manufactured Home Communities, Inc. 871,080 ------------ 3,817,965 ------------ Recreational Products (0.8%) 18,400 Toro Co............................ 735,632 ------------ Retail (2.8%) 59,000 Duane Reade, Inc. (b).............. 988,250 27,300 Jo-Ann Stores, Inc., Class A (b)... 738,465 30,500 Men's Wearhouse, Inc. (The) (b).... 771,955 ------------ 2,498,670 ------------ Retail--Food Chain (0.9%) 51,100 Casey's General Stores, Inc........ 782,852 ------------ Savings & Loans (5.3%) 68,200 BankAtlantic Bancorp, Inc., Class A 951,390 68,050 Brookline Bancorp, Inc............. 1,013,265 25,200 First Essex Bancorp, Inc........... 1,251,432
Security Shares Description Value ---------- ------------------------------------ ------------ Common Stocks, continued Savings & Loans, continued 26,200 Parkvale Financial Corp............. $ 642,948 37,800 TierOne Corp. (b)................... 873,180 ------------ 4,732,215 ------------ Security & Protection Services (1.1%) 58,600 Brink's Co. (The)................... 963,384 ------------ Software & Computer Services (0.3%) 32,000 MSC.Software Corp. (b).............. 237,440 ------------ Telecommunications--Services & Equipment (3.1%) 75,600 Cincinnati Bell, Inc. (b)........... 426,384 22,600 Commonwealth Telephone Enterprises, Inc. (b).............. 858,800 70,300 Dobson Communications Corp., Class A (b)........................ 452,732 52,700 REMEC, Inc. (b)..................... 506,447 34,700 Tekelec (b)......................... 509,049 ------------ 2,753,412 ------------ Transportation (3.4%) 44,800 Genesee & Wyoming, Inc., Class A (b) 1,003,968 39,282 Heartland Express, Inc. (b)......... 997,763 71,700 SCS Transportation, Inc. (b)........ 1,076,217 ------------ 3,077,948 ------------ Utilities--Electric (1.3%) 28,000 Black Hills Corp.................... 859,320 52,900 Sierra Pacific Resources (b)........ 272,435 ------------ 1,131,755 ------------ Utilities--Gas (2.8%) 27,000 Energen Corp........................ 936,900 57,015 Southern Union Co. (b).............. 878,601 23,200 UGI Corp............................ 732,424 ------------ 2,547,925 ------------ Total Common Stocks (Cost $64,407,042) 79,262,994 ------------ Depositary Receipt (4.8%) 32,000 iShares Russell 2000 Value Index Fund............................... 4,329,600 ------------ Total Depositary Receipt (Cost $4,249,111) 4,329,600 ------------ Cash Sweep (4.7%) 4,246,524 Bank of New York.................... 4,246,524 ------------ Total Cash Sweep (Cost $4,246,524) 4,246,524 ------------ Total Investments (Cost $72,902,677) (a)--98.0% 87,839,118 Other assets in excess of liabilities--2.0% 1,751,675 ------------ Net Assets--100.0% $ 89,590,793 ============
- -------- (a) Represents cost for financial reporting purposes and differs from value by unrealized appreciation (depreciation) of securities as follows: Unrealized appreciation.... $17,394,205 Unrealized depreciation.... (2,457,764) ----------- Net unrealized appreciation $14,936,441 ===========
Aggregate cost for federal income tax purposes is substantially the same. (b) Non-income producing security. ADR--American Depositary Receipt See notes to financial statements. 64 PACIFIC CAPITAL FUNDS Notes to Financial Statements July 31, 2003 1. Organization Pacific Capital Funds (the "Trust") was organized on October 30, 1992, and is registered under the Investment Company Act of 1940, as amended ("the 1940 Act"), as an open-end management investment company established as a Massachusetts business trust. The Trust currently consists of the following investment portfolios (individually, a "Fund" and collectively, the "Funds"): Growth Stock Fund, Growth and Income Fund, New Asia Growth Fund, Diversified Fixed Income Fund, Ultra Short Government Fund, Short Intermediate U.S. Government Securities Fund, Tax-Free Securities Fund, Tax-Free Short Intermediate Securities Fund, International Stock Fund, Value Fund, and Small Cap Fund. The Trust is authorized to issue an unlimited number of shares without par value in three classes of shares for each Fund: Class A, Class B and Class Y. Each class of shares for each Fund has identical rights and privileges except with respect to sales charges, distribution (12b-1) fees paid by Class A and B shares, voting rights on matters affecting a single class of shares, and the exchange privileges of each class of shares. Effective June 1, 2003, the offering of Class B shares by all the Funds of the Trust was suspended. On and after June 1, 2003, investors are not able to make new purchases of Class B shares, except dividend or distribution reinvestments in Class B shares. 2. Significant Accounting Policies The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with generally accepted accounting principles in the United States ("GAAP"). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. Securities Valuation: Investments and options of the Funds for which the primary market is a national securities exchange are valued at the last reported sale price, or official closing price, on the day of valuation. In the absence of any sale of such securities on the valuation date, the valuations are based on the mean of the latest quoted bid and asked prices. Securities, including thinly traded, unlisted, and restricted securities, for which market quotations are not readily available, are valued at fair market value by The Asset Management Group of Bank of Hawaii (the "Advisor") under the supervision of the Trust's Board of Trustees. Investments in investment companies are valued at their respective net asset values as reported by such companies. Money market instruments and other debt securities maturing in 60 days or less are valued at either amortized cost, which approximates market value, or at original cost which combined with accrued interest, approximates market value. Under the amortized cost valuation method, the discount or premium is amortized on a constant basis to the maturity of the security. Investments in foreign securities, currency holdings and other assets and liabilities of New Asia Growth Fund and International Stock Fund are valued based on quotations from the primary market in which they are traded and translated from the local currency into U.S. dollars using current exchange rates. Securities Transactions and Related Income: Securities transactions are accounted for on the date the security is purchased or sold (trade date). Interest income is recognized on the accrual basis and includes, where applicable, the pro rata amortization of premium or accretion of discount. Dividend income is recorded on the ex-dividend date. Gains or losses realized from sales of securities are determined by comparing the identified cost of the security lot sold with the net sales proceeds. Continued 65 PACIFIC CAPITAL FUNDS Notes to Financial Statements, Continued July 31, 2003 Foreign Currency Translation: The accounting records of the Trust are maintained in U.S. dollars. Investment securities and other assets and liabilities of the New Asia Growth Fund and International Stock Fund denominated in a foreign currency are translated into U.S. dollars at current exchange rates. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars at the exchange rate on the date of the transactions. The New Asia Growth Fund and International Stock Fund do not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments and foreign currencies. Reported net realized foreign currency exchange gains or losses arise from sales and maturities of portfolio securities, sales of foreign currencies, currency exchange fluctuations between the trade and settlement dates of securities transactions, and the differences between the amounts of assets and liabilities recorded and the U.S. dollar equivalents of the amounts actually received or paid. Net unrealized foreign currency appreciation or depreciation arises from changes in the values of assets and liabilities, including investments in securities, resulting from changes in currency exchange rates. Forward Currency Exchange Contracts: The New Asia Growth Fund and International Stock Fund may enter into foreign currency exchange contracts to convert U.S. dollars to and from various foreign currencies. A foreign currency exchange contract is an obligation by a Fund to purchase or sell a specific foreign currency at a future date at a price (in U.S. dollars) set at the time of the contract. The Funds do not engage in "cross-currency" foreign exchange contracts (i.e., contracts to purchase or sell one foreign currency in exchange for another foreign currency). The Funds' foreign currency contracts might be considered spot (typically a contract of one week or less) contracts or forward (contract length over one week) contracts. Spot contracts are entered into for purposes of hedging against foreign currency fluctuations relating to a specific portfolio transaction, such as the delay between a security transaction trade date and settlement date. Forward contracts are entered into for purposes of hedging portfolio holdings or concentrations of such holdings. These Funds enter into foreign currency exchange contracts solely for spot or forward hedging purposes, and not for speculative purposes (i.e., the Funds do not enter into such contracts for the purpose of earning foreign currency gains). Foreign currency exchange contracts are adjusted daily by the prevailing spot or forward rate of the underlying currency, and any appreciation or depreciation is recorded for financial statement purposes as unrealized until the contract settlement date, at which time the Fund records realized gains or losses equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. A Fund could be exposed to risk if a counterparty is unable to meet the terms of a forward foreign exchange currency contract or if the value of the foreign currency changes unfavorably. Dividends to Shareholders: Dividends from net investment income are declared daily and paid monthly for the Diversified Fixed Income Fund, Ultra Short Government Fund, Short Intermediate U.S. Government Securities Fund, Tax-Free Securities Fund and Tax-Free Short Intermediate Securities Fund. Dividends from net investment income are declared and paid quarterly for the Growth Stock Fund, Growth and Income Fund, New Asia Growth Fund, International Stock Fund, Value Fund and Small Cap Fund. Distributable net realized capital gains, if any, are declared and distributed annually for all the Funds. The amounts of dividends from net investment income and of distributions from net realized gains are determined in accordance with federal income tax regulations, which may differ from GAAP. These "book/tax" differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are Continued 66 PACIFIC CAPITAL FUNDS Notes to Financial Statements, Continued July 31, 2003 reclassified within the composition of net assets based on their federal tax-basis treatment; temporary differences do not require reclassification. Concentration of Credit Risk: The Tax-Free Securities Fund and the Tax-Free Short Intermediate Securities Fund have a majority of their investments in the securities of issuers in Hawaii. Such concentration may subject the Fund to the effects of economic changes occurring within that State. The New Asia Growth Fund has a majority of its investments in securities of the Far East Asia region. Such concentration may subject the Fund to the effects of economic changes occurring within the region. Allocation Methodology: Expenses directly related to one Fund are charged to that Fund. Other operating expenses for the Funds or the Trust are prorated to the Funds on the basis of relative net assets or other appropriate basis. Income, expenses (other than expenses attributable to a specific share class), realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets. Class specific expenses are charged directly to the class incurring the expense. 3. Purchases and Sales of Securities Purchases and sales of securities (excluding short-term securities) for the year ended July 31, 2003 are as follows:
Purchases Sales ------------ ------------ Growth Stock Fund................................. $ 99,180,127 $ 75,352,838 Growth and Income Fund............................ 68,508,956 60,990,370 New Asia Growth Fund.............................. 27,100,589 22,643,931 Diversified Fixed Income Fund..................... 130,594,992 123,713,074 Ultra Short Government Fund....................... 59,223,139 21,785,000 Short Intermediate U.S. Government Securities Fund 43,004,889 11,329,112 Tax-Free Securities Fund.......................... 5,226,124 37,338,231 Tax-Free Short Intermediate Securities Fund....... 6,509,408 2,584,815 International Stock Fund.......................... 99,576,863 91,033,587 Value Fund........................................ 154,590,676 155,378,393 Small Cap Fund.................................... 68,403,828 71,350,175
4. Transactions with Affiliates Investment advisory services are provided to the Trust by the Advisor. For the Advisor's services, the Funds pay the Advisor as follows: Growth Stock Fund, Growth and Income Fund, and Value Fund--0.80% of the Funds' average daily net assets; New Asia Growth Fund and Ultra Short Government Fund--0.40% of the Funds' average daily net assets; Diversified Fixed Income Fund and Tax-Free Securities Fund--0.60% of the Funds' average daily net assets; Short Intermediate U.S. Government Securities Fund, Tax-Free Short Intermediate Securities Fund and Small Cap Fund--0.50% of the Funds' average daily net assets; International Stock Fund--0.45% of the Fund's average daily net assets. Certain Trustees and officers of the Trust are employees of either the Advisor or its affiliates and are not paid any fees directly by the Trust for serving in such capacities. Continued 67 PACIFIC CAPITAL FUNDS Notes to Financial Statements, Continued July 31, 2003 First State Investments (formerly First State (Hong Kong) LLC) is the Sub-Advisor to the New Asia Growth Fund. Nicholas-Applegate Capital Management ("NACM") is the Sub-Advisor to the International Stock Fund and the Small Cap Fund. For the Sub-Advisors' services, the Funds pay the Sub-Advisors as follows: New Asia Growth Fund--0.50% of the Fund's average daily net assets; International Stock Fund--0.65% of the first $50 million of the Fund's average daily net assets, and 0.60% of it's average daily net assets in excess of $50 million; Small Cap Fund--0.60% of the first $50 million of the Fund's average daily net assets, and 0.55% of it's average daily net assets in excess of $50 million. Prior to October 1, 2002, all sub-advisory fees were borne by the Advisor, and not the Funds. BISYS Fund Services Limited Partnership d/b/a BISYS Fund Services ("BISYS"), and BISYS Fund Services Ohio, Inc. ("BISYS Ohio") are subsidiaries of The BISYS Group, Inc. BISYS, with whom certain officers of the Trust are affiliated, serves the Trust as principal underwriter and distributor. Such officers are not paid any fees directly by the Funds for serving as officers of the Trust. BISYS Ohio serves the Trust as administrator. Under the terms of the administration agreement, BISYS Ohio's fees are computed at an annual rate of 0.16% of the average daily net assets of each Fund. The Trust has adopted for the Class A and Class B shares of each of the Funds a Class A Distribution Plan and a Class B Distribution Plan (the "Plans") pursuant to Rule 12b-1 under the 1940 Act. Under the Plans each Fund pays BISYS a fee which will not exceed on an annual basis, 0.75% and 1.00%, respectively, of the average daily net assets attributable to the Class A and Class B shares of each Fund. These fees are for payments BISYS makes to banks, including the Advisor or its affiliates, other institutions and broker/dealers, and for expenses BISYS and any of its affiliates or subsidiaries incur for providing distribution or shareholder service assistance. Effective January 1, 2003, the Pacific Capital New Asia Growth Fund and Pacific Capital International Stock Fund implemented a redemption fee. This fee may be assessed on redemptions and exchanges of Fund shares within 90 days from the date the Fund shares were acquired. This fee will not apply to Fund shares acquired prior to January 1, 2003. For the year ended July 31, 2003, BISYS, as the Trust's principal underwriter, received approximately $205,401 from commissions on sales of Class A and Class B shares, of which $6,612 was retained by the principal underwriter or other affiliated broker-dealer. BISYS Ohio serves the Trust as fund accountant. Under the terms of the fund accounting agreement, BISYS Ohio is entitled to receive a fixed-dollar fee per Fund and is reimbursed for certain out-of-pocket expenses incurred in providing fund accounting services. BISYS Ohio serves the Trust as transfer agent. Under the terms of the transfer agency agreement, BISYS Ohio is entitled to receive fees and reimbursement for certain out-of-pocket expenses incurred in providing transfer agent services. Fees may be voluntarily reduced or expenses reimbursed to assist the Funds in maintaining competitive expense ratios. These amounts are disclosed on the Statements of Operations. Continued 68 PACIFIC CAPITAL FUNDS Notes to Financial Statements, Continued July 31, 2003 5. Capital Share Transactions: Transactions in capital shares for the Trust were as follows:
Growth Stock Fund Growth and Income Fund ------------------------ ------------------------ Amount Shares Amount Shares ------------ ---------- ------------ ---------- For the Year Ended For the Year Ended July 31, 2003 July 31, 2003 ------------------------ ------------------------ Class A: Shares issued....... $ 794,002 116,111 $ 458,084 47,199 Dividends reinvested -- -- 9,875 1,028 Shares redeemed..... (2,226,355) (333,103) (1,003,144) (105,049) ------------ ---------- ------------ ---------- Net Change.......... $ (1,432,353) (216,992) $ (535,185) (56,822) ============ ========== ============ ========== Class B: Shares issued....... $ 408,072 62,518 $ 314,186 34,022 Shares redeemed..... (2,314,827) (357,992) (1,507,241) (163,869) ------------ ---------- ------------ ---------- Net Change.......... $ (1,906,755) (295,474) $ (1,193,055) (129,847) ============ ========== ============ ========== Class Y: Shares issued....... $ 97,236,084 14,135,813 $ 54,447,192 5,651,480 Dividends reinvested -- -- 50,111 5,086 Shares redeemed..... (68,267,887) (9,536,077) (45,452,881) (4,545,501) ------------ ---------- ------------ ---------- Net Change.......... $ 28,968,197 4,599,736 $ 9,044,422 1,111,065 ============ ========== ============ ========== For the Year Ended For the Year Ended July 31, 2002 July 31, 2002 ------------------------ ------------------------ Class A: Shares issued....... $ 969,671 107,597 $ 848,305 68,472 Shares redeemed..... (5,106,185) (577,794) (2,228,457) (188,859) ------------ ---------- ------------ ---------- Net Change.......... $ (4,136,514) (470,197) $ (1,380,152) (120,387) ============ ========== ============ ========== Class B: Shares issued....... $ 1,451,173 168,292 $ 682,498 58,504 Shares redeemed..... (3,524,287) (424,193) (2,058,843) (181,311) ------------ ---------- ------------ ---------- Net Change.......... $ (2,073,114) (255,901) $ (1,376,345) (122,807) ============ ========== ============ ========== Class Y: Shares issued....... $ 44,376,625 4,901,855 $ 39,496,238 3,277,090 Dividends reinvested -- -- 20,119 1,665 Shares redeemed..... (80,198,473) (8,814,396) (39,036,638) (3,166,989) ------------ ---------- ------------ ---------- Net Change.......... $(35,821,848) (3,912,541) $ 479,719 111,766 ============ ========== ============ ==========
Continued 69 PACIFIC CAPITAL FUNDS Notes to Financial Statements, Continued July 31, 2003 5. Capital Share Transactions (continued): Transactions in capital shares for the Trust were as follows:
New Asia Growth Fund Diversified Fixed Income Fund ------------------------ ---------------------------- Amount Shares Amount Shares ------------ ---------- ------------- ----------- For the Year Ended For the Year Ended July 31, 2003 July 31, 2003 ------------------------ ---------------------------- Class A: Shares issued....... $ 8,254,007 960,004 $ 10,551,678 916,978 Dividends reinvested 1,579 161 310,351 27,018 Shares redeemed..... (8,565,630) (986,327) (8,796,698) (762,287) ------------ ---------- ------------- ----------- Net Change.......... $ (310,044) (26,162) $ 2,065,331 181,709 ============ ========== ============= =========== Class B: Shares issued....... $ 55,524 6,676 $ 1,068,526 93,369 Dividends reinvested -- -- 212,372 18,528 Shares redeemed..... (55,546) (6,424) (1,113,027) (96,909) ------------ ---------- ------------- ----------- Net Change.......... $ (22) 252 $ 167,871 14,988 ============ ========== ============= =========== Class Y: Shares issued....... $ 16,884,508 1,948,497 $ 102,268,745 8,829,242 Dividends reinvested 14,297 1,536 2,893,514 252,121 Shares redeemed..... (13,706,030) (1,531,287) (93,017,421) (8,007,707) ------------ ---------- ------------- ----------- Net Change.......... $ 3,192,775 418,746 $ 12,144,838 1,073,656 ============ ========== ============= =========== For the Year Ended For the Year Ended July 31, 2002 July 31, 2002 ------------------------ ---------------------------- Class A: Shares issued....... $ 3,749,111 369,052 $ 1,893,293 173,497 Dividends reinvested -- -- 324,522 29,499 Shares redeemed..... (4,020,146) (391,088) (3,371,707) (308,107) ------------ ---------- ------------- ----------- Net Change.......... $ (271,035) (22,036) $ (1,153,892) (105,111) ============ ========== ============= =========== Class B: Shares issued....... $ 26,602 2,521 $ 1,036,961 94,634 Dividends reinvested -- -- 175,383 15,975 Shares redeemed..... (83,194) (9,384) (725,837) (66,187) ------------ ---------- ------------- ----------- Net Change.......... $ (56,592) (6,863) $ 486,507 44,422 ============ ========== ============= =========== Class Y: Shares issued....... $ 28,658,100 2,902,349 $ 95,790,472 8,681,877 Dividends reinvested 122 12 1,170,234 105,809 Shares redeemed..... (30,498,918) (3,061,180) (111,743,576) (10,114,575) ------------ ---------- ------------- ----------- Net Change.......... $ (1,840,696) (158,819) $ (14,782,870) (1,326,889) ============ ========== ============= ===========
Continued 70 PACIFIC CAPITAL FUNDS Notes to Financial Statements, Continued July 31, 2003 5. Capital Share Transactions (continued): Transactions in capital shares for the Trust were as follows:
Short Intermediate Ultra Short U.S. Government Government Fund Securities Fund -------------------------- ------------------------ Amount Shares Amount Shares ------------- ----------- ------------ ---------- For the Year Ended For the Year Ended July 31, 2003 July 31, 2003 -------------------------- ------------------------ Class A: Shares issued....... $ 10,153,475 986,435 $ 12,283,053 1,215,990 Dividends reinvested 344,808 33,490 61,059 6,055 Shares redeemed..... (11,737,626) (1,140,688) (9,104,516) (901,407) ------------- ----------- ------------ ---------- Net Change.......... $ (1,239,343) (120,763) $ 3,239,596 320,638 ============= =========== ============ ========== Class B: Shares issued....... $ 939,560 91,194 $ -- -- Dividends reinvested 26,819 2,605 -- -- Shares redeemed..... (361,943) (35,197) -- -- ------------- ----------- ------------ ---------- Net Change.......... $ 604,436 58,602 $ -- -- ============= =========== ============ ========== Class Y: Shares issued....... $ 192,951,426 18,738,665 $ 55,975,493 5,526,973 Dividends reinvested 1,254,423 121,766 606,943 60,296 Shares redeemed..... (137,634,410) (13,362,464) (28,971,109) (2,860,109) ------------- ----------- ------------ ---------- Net Change.......... $ 56,571,439 5,497,967 $ 27,611,327 2,727,160 ============= =========== ============ ========== For the Year Ended For the Year Ended July 31, 2002 July 31, 2002 -------------------------- ------------------------ Class A: Shares issued....... $ 10,252,262 999,926 $ 6,399,749 645,212 Dividends reinvested 451,375 43,982 49,686 5,019 Shares redeemed..... (11,745,912) (1,145,137) (5,440,001) (547,786) ------------- ----------- ------------ ---------- Net Change.......... $ (1,042,275) (101,229) $ 1,009,434 102,445 ============= =========== ============ ========== Class B: Shares issued....... $ 843,336 82,029 $ -- -- Dividends reinvested 23,595 2,299 -- -- Shares redeemed..... (330,887) (32,263) -- -- ------------- ----------- ------------ ---------- Net Change.......... $ 536,044 52,065 $ -- -- ============= =========== ============ ========== Class Y: Shares issued....... $ 237,413,965 23,172,347 $ 52,678,793 5,316,645 Dividends reinvested 3,293,865 320,758 407,401 41,275 Shares redeemed..... (206,399,153) (20,112,064) (39,428,267) (3,976,642) ------------- ----------- ------------ ---------- Net Change.......... $ 34,308,677 3,381,041 $ 13,657,927 1,381,278 ============= =========== ============ ==========
Continued 71 PACIFIC CAPITAL FUNDS Notes to Financial Statements, Continued July 31, 2003 5. Capital Share Transactions (continued): Transactions in capital shares for the Trust were as follows:
Tax-Free Short Intermediate Tax-Free Securities Fund Securities Fund ------------------------ ------------------------ Amount Shares Amount Shares ------------ ---------- ------------ ---------- For the Year Ended For the Year Ended July 31, 2003 July 31, 2003 ------------------------ ------------------------ Class A: Shares issued....... $ 2,148,066 195,318 $ 336,781 32,272 Dividends reinvested 455,258 41,614 64,372 6,171 Shares redeemed..... (2,409,293) (219,713) (228,995) (21,940) ------------ ---------- ------------ ---------- Net Change.......... $ 194,031 17,219 $ 172,158 16,503 ============ ========== ============ ========== Class B: Shares issued....... $ 199,331 18,133 $ -- -- Dividends reinvested 108,025 9,886 -- -- Shares redeemed..... (1,073,333) (98,782) -- -- ------------ ---------- ------------ ---------- Net Change.......... $ (765,977) (70,763) $ -- -- ============ ========== ============ ========== Class Y: Shares issued....... $ 32,547,775 2,951,050 $ 33,234,318 3,157,037 Dividends reinvested 2,413,368 222,567 334,244 32,033 Shares redeemed..... (79,990,466) (7,261,015) (19,441,424) (1,844,448) ------------ ---------- ------------ ---------- Net Change.......... $(45,029,323) (4,087,398) $ 14,127,138 1,344,622 ============ ========== ============ ========== For the Year Ended For the Year Ended July 31, 2002 July 31, 2002 ------------------------ ------------------------ Class A: Shares issued....... $ 4,195,139 390,368 $ 1,261,813 123,126 Dividends reinvested 434,420 40,696 52,675 5,142 Shares redeemed..... (1,399,399) (130,662) (931,139) (90,746) ------------ ---------- ------------ ---------- Net Change.......... $ 3,230,160 300,402 $ 383,349 37,522 ============ ========== ============ ========== Class B: Shares issued....... $ 1,003,730 93,546 $ -- -- Dividends reinvested 141,930 13,308 -- -- Shares redeemed..... (761,266) (71,405) -- -- ------------ ---------- ------------ ---------- Net Change.......... $ 384,394 35,449 $ -- -- ============ ========== ============ ========== Class Y: Shares issued....... $ 41,368,476 3,854,797 $ 21,292,806 2,071,550 Dividends reinvested 4,387,669 413,870 13,622 1,323 Shares redeemed..... (68,352,683) (6,348,340) (12,554,998) (1,218,877) ------------ ---------- ------------ ---------- Net Change.......... $(22,596,538) (2,079,673) $ 8,751,430 853,996 ============ ========== ============ ==========
Continued 72 PACIFIC CAPITAL FUNDS Notes to Financial Statements, Continued July 31, 2003 5. Capital Share Transactions (continued): Transactions in capital shares for the Trust were as follows:
International Stock Fund Value Fund ------------------------ ------------------------- Amount Shares Amount Shares ------------ ---------- ------------ ----------- For the Year Ended For the Year Ended July 31, 2003 July 31, 2003 ------------------------ ------------------------- Class A: Shares issued....... $ 15,931,966 2,721,226 $ 368,226 54,381 Dividends reinvested -- -- 20,160 2,949 Shares redeemed..... (16,261,026) (2,764,493) (375,626) (55,445) ------------ ---------- ------------ ----------- Net Change.......... $ (329,060) (43,267) $ 12,760 1,885 ============ ========== ============ =========== Class B: Shares issued....... $ 11,235 1,868 $ 174,581 25,618 Dividends reinvested -- -- 3,507 524 Shares redeemed..... (87,797) (14,984) (367,645) (54,333) ------------ ---------- ------------ ----------- Net Change.......... $ (76,562) (13,116) $ (189,557) (28,191) ============ ========== ============ =========== Class Y: Shares issued....... $ 18,694,187 3,153,781 $ 89,512,632 13,483,447 Dividends reinvested -- -- 43,711 6,378 Shares redeemed..... (10,546,609) (1,760,198) (91,632,660) (13,187,291) ------------ ---------- ------------ ----------- Net Change.......... $ 8,147,578 1,393,583 $ (2,076,317) 302,534 ============ ========== ============ =========== For the Year Ended For the Year Ended July 31, 2002 July 31, 2002 ------------------------ ------------------------- Class A: Shares issued....... $ 6,038,643 875,402 $ 1,092,784 128,030 Dividends reinvested -- -- 10,405 1,310 Shares redeemed..... (6,771,277) (968,071) (935,520) (114,192) ------------ ---------- ------------ ----------- Net Change.......... $ (732,634) (92,669) $ 167,669 15,148 ============ ========== ============ =========== Class B: Shares issued....... $ 50,474 7,096 $ 509,644 60,443 Shares redeemed..... (116,958) (16,418) (213,502) (25,473) ------------ ---------- ------------ ----------- Net Change.......... $ (66,484) (9,322) $ 296,142 34,970 ============ ========== ============ =========== Class Y: Shares issued....... $ 31,364,773 4,354,051 $ 77,678,106 9,457,545 Dividends reinvested -- -- 19,610 2,501 Shares redeemed..... (44,913,555) (6,191,769) (53,974,761) (6,457,303) ------------ ---------- ------------ ----------- Net Change.......... $(13,548,782) (1,837,718) $ 23,722,955 3,002,743 ============ ========== ============ ===========
Continued 73 PACIFIC CAPITAL FUNDS Notes to Financial Statements, Continued July 31, 2003 5. Capital Share Transactions (continued): Transactions in capital shares for the Trust were as follows:
Small Cap Fund ------------------------ Amount Shares ------------ ---------- For the Year Ended July 31, 2003 ------------------------ Class A: Shares issued....... $ 274,132 24,441 Dividends reinvested 145,154 13,895 Shares redeemed..... (242,169) (22,036) ------------ ---------- Net Change.......... $ 177,117 16,300 ============ ========== Class B: Shares issued....... $ 398,341 37,409 Dividends reinvested 233,202 22,863 Shares redeemed..... (390,963) (37,132) ------------ ---------- Net Change.......... $ 240,580 23,140 ============ ========== Class Y: Shares issued....... $ 39,167,209 3,446,523 Dividends reinvested 5,596,681 534,466 Shares redeemed..... (34,719,701) (3,135,575) ------------ ---------- Net Change.......... $ 10,044,189 845,414 ============ ========== For the Year Ended July 31, 2002 ------------------------ Class A: Shares issued....... $ 709,296 52,361 Dividends reinvested 71,233 5,623 Shares redeemed..... (609,029) (46,243) ------------ ---------- Net Change.......... $ 171,500 11,741 ============ ========== Class B: Shares issued....... $ 1,455,831 108,532 Dividends reinvested 80,425 6,464 Shares redeemed..... (170,257) (12,977) ------------ ---------- Net Change.......... $ 1,365,999 102,019 ============ ========== Class Y: Shares issued....... $ 54,148,882 4,089,207 Dividends reinvested 3,328,751 262,585 Shares redeemed..... (37,337,889) (2,737,517) ------------ ---------- Net Change.......... $ 20,139,744 1,614,275 ============ ==========
6. Federal Income Tax Information It is the policy of each Fund to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies as defined in applicable sections of the Internal Revenue Code, and to make Continued 74 PACIFIC CAPITAL FUNDS Notes to Financial Statements, Continued July 31, 2003 distributions from net investment income and from net realized gains sufficient to relieve it from all, or substantially all, federal income taxes. Withholding taxes on foreign dividends have been paid or provided for in accordance with applicable country's tax rules and rates. The tax character of distributions during the fiscal year ended July 31, 2003 was as follows (amounts in thousands):
Distribution Paid From ------------------------ Net Net Total Total Investment Long-Term Taxable Tax Exempt Distributions Income Capital Gains Distributions Distributions Paid ---------- ------------- ------------- ------------- ------------- Growth and Income Fund....................... $ 568 $ -- $ 568 $ -- $ 568 New Asia Growth Fund......................... 64 -- 64 -- 64 Diversified Fixed Income Fund................ 10,613 2,062 12,675 -- 12,675 Ultra Short Government Fund.................. 5,572 -- 5,572 -- 5,572 Short Intermediate U.S. Government Securities Fund........................................ 2,409 514 2,923 -- 2,923 Tax-Free Securities Fund..................... 243 2,395 2,638 18,309 20,947 Tax-Free Short Intermediate Securities Fund.. 60 193 253 1,471 1,724 Value Fund................................... 2,562 -- 2,562 -- 2,562 Small Cap Fund............................... 5,106 2,833 7,939 -- 7,939
The tax character of distributions during the fiscal year ended July 31, 2002 was as follows (amounts in thousands):
Distributions Paid From ------------------------ Net Net Total Tax Total Investment Long-Term Taxable Exempt Distributions Income Capital Gains Distributions Distributions Paid* ---------- ------------- ------------- ------------- ------------- Growth and Income Fund....................... $ 190 $ -- $ 190 $ -- $ 190 New Asia Growth Fund......................... --** -- -- -- -- Diversified Fixed Income Fund................ 12,042 -- 12,042 -- 12,042 Ultra Short Government Fund.................. 8,078 32 8,110 -- 8,110 Short Intermediate U.S. Gov't Securities Fund 2,514 -- 2,514 -- 2,514 Tax-Free Securities Fund..................... 185 4,512 4,697 20,422 25,119 Tax-Free Short Intermediate Securities Fund.. 2 -- 2 1,446 1,448 Value Fund................................... 1,677 -- 1,677 -- 1,677 Small Cap Fund............................... 2,011 3,628 5,639 -- 5,639 Balanced Fund................................ 3,501 -- 3,501 -- 3,501
* Total distributions paid differ from the Statements of Changes in Net Assets because for tax purposes dividends are recognized when actually paid. ** Less than $1,000. Continued 75 PACIFIC CAPITAL FUNDS Notes to Financial Statements, Continued July 31, 2003 As of July 31, 2003, the components of accumulated earnings/(deficit) on a tax basis was as follows (amounts in thousands):
Total Undistributed Undistributed Accumulated Unrealized Accumulated Ordinary Long-Term Accumulated Capital & Appreciation/ Earnings/ Income Capital Gains Earnings Other Losses (Depreciation)* (Deficit) ------------- ------------- ----------- ------------ --------------- ----------- Growth Stock Fund................. $ -- $ -- $ -- $(132,178) $ 2,131 $(130,047) Growth and Income Fund............ 20 -- 20 (39,468) 246 (39,202) New Asia Growth Fund.............. -- -- -- (5,584) 2,354 (3,230) Diversified Fixed Income Fund..... 1,120 3,724 4,844 (2,158) 9,434 12,120 Ultra Short Government Fund....... 21 -- 21 (4) 2,121 2,138 Short Intermediate U.S. Government Securities Fund.................. 15 20 35 -- 1,496 1,531 International Stock Fund.......... -- -- -- (44,954) 5,796 (39,158) Value Fund........................ 93 -- 93 (45,407) 3,841 (41,473) Small Cap Fund.................... -- -- -- (30) 14,835 14,805
* The differences between book-basis and tax basis unrealized appreciation/(depreciation) is attributable to the tax deferral of losses on wash sales for the Growth Stock Fund, Growth and Income Fund, New Asia Growth Fund, International Stock Fund, Value Fund, and Small Cap Fund.
Undistributed Total --------------------------------- Unrealized Accumulated Tax Exempt Ordinary Long-Term Accumulated Appreciation/ Earnings/ Income Income Capital Gains Earnings (Depreciation) (Deficit) ---------- -------- ------------- ----------- -------------- ----------- Tax-Free Securities Fund.............. $48 $--** $1,387 $1,435 $30,942 $32,377 Tax-Free Short Intermediate Securities Fund................................. 4 -- -- 4 1,568 1,572
** Less than $1,000. Capital Loss Carryforward On July 31, 2003, the Funds' most recent fiscal year end for tax purposes, the following Funds had net capital loss carryforwards to offset future net capital gains, if any:
Amount Expires ----------- ------- Growth Stock Fund............ $ 709,011 2009 38,902,738 2010 82,021,934 2011 Growth and Income Fund....... 7,912,252 2010 28,653,978 2011 New Asia Growth Fund......... 683,203 2007 400,314 2009 2,794,727 2010 529,712 2011 Diversified Fixed Income Fund 2,061,471 2004 58,103 2005 38,240 2006 International Stock Fund..... 1,431,316 2009 29,506,697 2010 9,834,840 2011 Value Fund................... 3,347,910 2010 36,042,699 2011 Small Cap Fund............... 29,610 2011
Continued 76 PACIFIC CAPITAL FUNDS Notes to Financial Statements, Continued July 31, 2003 Post October Loss Deferral Capital (and foreign currency) losses incurred after October 31 within a Fund's fiscal year are deemed to arise on the first business day of the following fiscal year for tax purposes. The following Funds have incurred and will elect to defer such capital losses (and foreign currency losses):
Post October Foreign Capital Losses Currency Losses -------------- --------------- Growth Stock Fund.......... $10,544,089 $ -- Growth and Income Fund..... 2,901,475 -- New Asia Growth Fund....... 1,173,295 2,574 Ultra Short Government Fund 4,227 -- International Stock Fund... 3,641,415 539,640 Value Fund................. 6,016,557 --
Dividend Received Deduction For corporate shareholders, the following percentages of the total ordinary income distributions paid during the fiscal year ended July 31, 2003 qualify for the corporate dividends received deduction for the following Funds:
Percentage ---------- Growth and Income Fund 100% Value Fund............ 100% Small Cap Fund........ 27%
Additional Tax Information (unaudited) For the fiscal year ended July 31, 2003, certain dividends paid by the Funds may be subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth Tax Relief Reconciliation Act of 2003. The Funds intend to designate the maximum amount allowable as taxed at a maximum rate of 15%. Complete information will be reported in conjunction with your 2003 Form 1099-DIV. For the year ended July 31, 2003, the following Funds paid qualified dividend income of (amounts in thousands):
Amount ------ Growth and Income Fund $ 283 Value Fund............ 1,502
Continued 77 PACIFIC CAPITAL FUNDS -- GROWTH STOCK FUND Financial Highlights (Selected data for a share of capital stock outstanding throughout the year)
Investment Activities Distributions ----------------------------------- -------------------------------- Net Asset Net Realized Net Asset Value, Net and Unrealized Total from Net Net Value, Beginning Investment Gains (Losses) Investment Investment Realized Total End of Total of Year Loss on Investments Activities Income Gains Distributions Year Return* - ----------------------------------------------------------------------------------------------------------------------------- CLASS A Year Ended July 31, 2003 $ 6.90 $(0.04) $ 0.74 $ 0.70 $ -- $ -- $ -- $ 7.60 10.14% Year Ended July 31, 2002 10.25 (0.08) (3.27) (3.35) -- -- -- 6.90 (32.68%) Year Ended July 31, 2001 19.73 (0.09) (4.67) (4.76) -- (4.72) (4.72) 10.25 (30.04%) Year Ended July 31, 2000 17.45 (0.11) 7.24 7.13 -- (4.85) (4.85) 19.73 45.24% Year Ended July 31, 1999 17.75 (0.08) 2.80 2.72 (0.01) (3.01) (3.02) 17.45 17.40% - ----------------------------------------------------------------------------------------------------------------------------- CLASS B Year Ended July 31, 2003 $ 6.62 $(0.09) $ 0.70 $ 0.61 $ -- $ -- $ -- $ 7.23 9.21% Year Ended July 31, 2002 9.89 (0.14) (3.13) (3.27) -- -- -- 6.62 (33.06%) Year Ended July 31, 2001 19.32 (0.16) (4.55) (4.71) -- (4.72) (4.72) 9.89 (30.51%) Year Ended July 31, 2000 17.28 (0.18) 7.07 6.89 -- (4.85) (4.85) 19.32 44.14% Year Ended July 31, 1999 17.72 (0.10) 2.67 2.57 -- (3.01) (3.01) 17.28 16.55% - ----------------------------------------------------------------------------------------------------------------------------- CLASS Y Year Ended July 31, 2003 $ 7.06 $(0.02) $ 0.75 $ 0.73 $ -- $ -- $ -- $ 7.79 10.34% Year Ended July 31, 2002 10.44 (0.05) (3.33) (3.38) -- -- -- 7.06 (32.38%) Year Ended July 31, 2001 19.95 (0.06) (4.73) (4.79) -- (4.72) (4.72) 10.44 (29.84%) Year Ended July 31, 2000 17.56 (0.08) 7.32 7.24 -- (4.85) (4.85) 19.95 45.56% Year Ended July 31, 1999 17.81 (0.06) 2.82 2.76 -- (3.01) (3.01) 17.56 17.72% - -----------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data ------------------------------------------------------------- Ratio of Net Ratio of Investment Ratio of Net Assets, Expenses Loss to Expenses End of to Average Average to Average Portfolio Year (000's) Net Assets Net Assets Net Assets** Turnover (a) - --------------------------------------------------------------------------------------- CLASS A Year Ended July 31, 2003 $ 11,231 1.35% (0.58%) 1.85% 33.11% Year Ended July 31, 2002 11,701 1.34% (0.80%) 1.86% 36.85% Year Ended July 31, 2001 22,182 1.33% (0.69%) 1.87% 97.27% Year Ended July 31, 2000 30,971 1.30% (0.70%) 1.84% 117.11% Year Ended July 31, 1999 17,417 1.32% (0.58%) 1.85% 81.02% - --------------------------------------------------------------------------------------- CLASS B Year Ended July 31, 2003 $ 13,630 2.10% (1.33%) 2.10% 33.11% Year Ended July 31, 2002 14,431 2.09% (1.55%) 2.11% 36.85% Year Ended July 31, 2001 24,084 2.08% (1.45%) 2.12% 97.27% Year Ended July 31, 2000 28,789 2.06% (1.46%) 2.10% 117.11% Year Ended July 31, 1999 9,988 2.06% (1.35%) 2.10% 81.02% - --------------------------------------------------------------------------------------- CLASS Y Year Ended July 31, 2003 $251,310 1.10% (0.33%) 1.10% 33.11% Year Ended July 31, 2002 195,252 1.09% (0.55%) 1.11% 36.85% Year Ended July 31, 2001 329,572 1.08% (0.44%) 1.12% 97.27% Year Ended July 31, 2000 504,125 1.05% (0.45%) 1.09% 117.11% Year Ended July 31, 1999 382,298 1.07% (0.32%) 1.11% 81.02% - ---------------------------------------------------------------------------------------
* Excludes sales charge for class A and contingent deferred sales charge for class B. ** During the period certain fees were voluntarily reduced. If such voluntary fee reductions had not occurred the ratios would have been as indicated. (a) Portfolio turnover is calculated on the basis of the Fund, as a whole, without distinguishing between the classes of shares issued. See notes to financial statements. 78 PACIFIC CAPITAL FUNDS -- GROWTH AND INCOME FUND Financial Highlights (Selected data for a share of capital stock outstanding throughout the year)
Investment Activities Distributions ------------------------------------ --------------------------------- Net Asset Net Net Realized Net Asset Value, Investment and Unrealized Total from Net Net Value, Beginning Income Gains (Losses) Investment Investment Realized Total End of Total of Year (Loss) on Investments Activities Income Gains Distributions Year Return* - ------------------------------------------------------------------------------------------------------------------------------- CLASS A Year Ended July 31, 2003 $ 9.89 $ 0.02 $ 0.80 $ 0.82 $(0.02) $ -- $(0.02) $10.69 8.31% Year Ended July 31, 2002 13.89 -- (4.00) (4.00) -- -- -- 9.89 (28.80%) Year Ended July 31, 2001 21.33 (0.03) (4.72) (4.75) -- (2.69) (2.69) 13.89 (24.39%) Year Ended July 31, 2000 18.89 (0.04) 5.16 5.12 -- (2.68) (2.68) 21.33 28.85% Year Ended July 31, 1999 18.72 (0.02) 2.38 2.36 -- (2.19) (2.19) 18.89 13.67% - ------------------------------------------------------------------------------------------------------------------------------- CLASS B Year Ended July 31, 2003 $ 9.50 $(0.05) $ 0.76 $ 0.71 $ -- $ -- $ -- $10.21 7.47% Year Ended July 31, 2002 13.44 (0.10) (3.84) (3.94) -- -- -- 9.50 (29.32%) Year Ended July 31, 2001 20.88 (0.14) (4.61) (4.75) -- (2.69) (2.69) 13.44 (24.97%) Year Ended July 31, 2000 18.66 (0.15) 5.05 4.90 -- (2.68) (2.68) 20.88 27.95% Year Ended July 31, 1999 18.68 (0.08) 2.25 2.17 -- (2.19) (2.19) 18.66 12.58% - ------------------------------------------------------------------------------------------------------------------------------- CLASS Y Year Ended July 31, 2003 $ 9.96 $ 0.04 $ 0.80 $ 0.84 $(0.04) $ -- $(0.04) $10.76 8.52% Year Ended July 31, 2002 13.97 0.03 (4.02) (3.99) (0.02) -- (0.02) 9.96 (28.60%) Year Ended July 31, 2001 21.39 0.01 (4.74) (4.73) --(b) (2.69) (2.69) 13.97 (24.19%) Year Ended July 31, 2000 18.90 --(b) 5.18 5.18 (0.01) (2.68) (2.69) 21.39 29.22% Year Ended July 31, 1999 18.75 0.03 2.34 2.37 (0.03) (2.19) (2.22) 18.90 13.69% - -------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data -------------------------------------------------------------- Ratio of Net Investment Ratio of Income Ratio of Net Assets, Expenses (Loss) to Expenses End of to Average Average to Average Portfolio Year (000's) Net Assets Net Assets Net Assets** Turnover (a) - --------------------------------------------------------------------------------------- CLASS A Year Ended July 31, 2003 $ 5,548 1.37% 0.24% 1.87% 46.92% Year Ended July 31, 2002 5,696 1.35% (0.03%) 1.88% 43.28% Year Ended July 31, 2001 9,669 1.35% (0.16%) 1.89% 43.24% Year Ended July 31, 2000 12,540 1.33% (0.22%) 1.87% 60.51% Year Ended July 31, 1999 9,593 1.35% (0.12%) 1.89% 65.56% - --------------------------------------------------------------------------------------- CLASS B Year Ended July 31, 2003 $ 7,507 2.12% (0.51%) 2.12% 46.92% Year Ended July 31, 2002 8,222 2.10% (0.79%) 2.13% 43.28% Year Ended July 31, 2001 13,282 2.10% (0.92%) 2.14% 43.24% Year Ended July 31, 2000 15,593 2.08% (0.99%) 2.12% 60.51% Year Ended July 31, 1999 8,265 2.09% (0.90%) 2.13% 65.56% - --------------------------------------------------------------------------------------- CLASS Y Year Ended July 31, 2003 $138,027 1.12% 0.49% 1.12% 46.92% Year Ended July 31, 2002 116,719 1.10% 0.20% 1.13% 43.28% Year Ended July 31, 2001 162,138 1.10% 0.09% 1.14% 43.24% Year Ended July 31, 2000 201,600 1.08% 0.03% 1.12% 60.51% Year Ended July 31, 1999 157,891 1.10% 0.15% 1.14% 65.56% - ---------------------------------------------------------------------------------------
* Excludes sales charge for class A and contingent deferred sales charge for class B. ** During the period certain fees were voluntarily reduced. If such voluntary fee reductions had not occurred the ratios would have been as indicated. (a) Portfolio turnover is calculated on the basis of the Fund, as a whole, without distinguishing between the classes of shares issued. (b) Less than $0.01 per share. See notes to financial statements. 79 PACIFIC CAPITAL FUNDS -- NEW ASIA GROWTH FUND Financial Highlights (Selected data for a share of capital stock outstanding throughout the year)
Investment Activities Distributions -------------------------------------- ------------------------------- Net Asset Net Realized Net Asset Value, Net and Unrealized Total from Net Net Value, Beginning Investment Gains (Losses) Investment Investment Realized Total End of Total of Year Income (Loss) on Investments Activities Income Gains Distributions Year Return* - --------------------------------------------------------------------------------------------------------------------------------- CLASS A Year Ended July 31, 2003 $ 9.83 $ 0.02 $(0.07) $(0.05) $(0.01) $-- $(0.01) $ 9.77 (0.47%) Year Ended July 31, 2002 9.42 (0.01) 0.42 0.41 -- -- -- 9.83 4.35% Year Ended July 31, 2001 12.50 (0.05) (3.03) (3.08) -- -- -- 9.42 (24.64%) Year Ended July 31, 2000 10.57 (0.17) 2.10 1.93 -- -- -- 12.50 18.26% Year Ended July 31, 1999 6.35 (0.05) 4.29 4.24 (0.02) -- (0.02) 10.57 66.99% - --------------------------------------------------------------------------------------------------------------------------------- CLASS B Year Ended July 31, 2003 $ 9.60 $(0.04) $(0.08) $(0.12) $ -- $-- $ -- $ 9.48 (1.25%) Year Ended July 31, 2002 9.22 (0.10) 0.48 0.38 -- -- -- 9.60 4.12% Year Ended July 31, 2001 12.34 (0.15) (2.97) (3.12) -- -- -- 9.22 (25.28%) Year Ended July 31, 2000 10.50 (0.13) 1. 97 1.84 -- -- -- 12.34 17.52% Year Ended July 31, 1999 6.34 (0.02) 4.18 4.16 -- -- -- 10.50 65.66% - --------------------------------------------------------------------------------------------------------------------------------- CLASS Y Year Ended July 31, 2003 $ 9.93 $ 0.05 $(0.06) $(0.01) $(0.03) $-- $(0.03) $ 9.89 (0.13%) Year Ended July 31, 2002 9.49 0.01 0.43 0.44 --(b) -- --(b) 9.93 4.64% Year Ended July 31, 2001 12.58 (0.02) (3.07) (3.09) -- -- -- 9.49 (24.56%) Year Ended July 31, 2000 10.60 (0.09) 2.07 1.98 -- -- -- 12.58 18.68% Year Ended July 31, 1999 6.37 (0.06) 4.33 4.27 (0.04) -- (0.04) 10.60 67.38% - ---------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data -------------------------------------------------------------- Ratio of Net Ratio of Investment Ratio of Net Assets, Expenses to Income (Loss) Expenses to End of Year Average to Average Average Portfolio (000's) Net Assets Net Assets Net Assets** Turnover (a) - ---------------------------------------------------------------------------------------- CLASS A Year Ended July 31, 2003 $ 1,264 2.10% 0.22% 2.61% 110.44% Year Ended July 31, 2002 1,530 1.96% (0.07%) 2.48% 70.55% Year Ended July 31, 2001 1,673 1.98% (0.40%) 2.53% 115.95% Year Ended July 31, 2000 2,704 1.99% (1.22%) 2.54% 172.57% Year Ended July 31, 1999 2,379 2.14% (0.52%) 2.78% 152.58% - ---------------------------------------------------------------------------------------- CLASS B Year Ended July 31, 2003 $ 424 2.85% (0.51%) 2.86% 110.44% Year Ended July 31, 2002 426 2.71% (0.91%) 2.74% 70.55% Year Ended July 31, 2001 473 2.73% (1.16%) 2.78% 115.95% Year Ended July 31, 2000 823 2.75% (1.94%) 2.80% 172.57% Year Ended July 31, 1999 311 2.82% (1.33%) 2.95% 152.58% - ---------------------------------------------------------------------------------------- CLASS Y Year Ended July 31, 2003 $23,937 1.85% 0.59% 1.86% 110.44% Year Ended July 31, 2002 19,870 1.71% 0.13% 1.73% 70.55% Year Ended July 31, 2001 20,512 1.73% (0.17%) 1.78% 115.95% Year Ended July 31, 2000 25,740 1.74% (0.95%) 1.79% 172.57% Year Ended July 31, 1999 15,954 1.90% (0.33%) 2.05% 152.58% - ----------------------------------------------------------------------------------------
* Excludes sales charge for class A and contingent deferred sales charge for class B. ** During the period certain fees were voluntarily reduced. If such voluntary fee reductions had not occurred the ratios would have been as indicated. (a) Portfolio turnover is calculated on the basis of the Fund, as a whole, without distinguishing between the classes of shares issued. (b) Less than $0.01 per share. See notes to financial statements. 80 PACIFIC CAPITAL FUNDS -- DIVERSIFIED FIXED INCOME FUND Financial Highlights (Selected data for a share of capital stock outstanding throughout the year)
Investment Activities Distributions ------------------------------------ -------------------------------- Net Asset Net Realized Net Asset Value, Net and Unrealized Total from Net Net Value, Beginning Investment Gains (Losses) Investment Investment Realized Total End of Total of Year Income on Investments Activities Income Gains Distributions Year Return* - ---------------------------------------------------------------------------------------------------------------------------- CLASS A Year Ended July 31, 2003 $11.22 $0.47 $ 0.17 $0.64 $(0.47) $(0.11) $(0.58) $11.28 5.76% Year Ended July 31, 2002 10.89 0.53 0.33 0.86 (0.53) -- (0.53) 11.22 8.13% Year Ended July 31, 2001 10.22 0.58 0.67 1.25 (0.58) -- (0.58) 10.89 12.48% Year Ended July 31, 2000 10.39 0.58 (0.17) 0.41 (0.58) -- (0.58) 10.22 4.09% Year Ended July 31, 1999 10.92 0.56 (0.43) 0.13 (0.56) (0.10) (0.66) 10.39 1.02% - ---------------------------------------------------------------------------------------------------------------------------- CLASS B Year Ended July 31, 2003 $11.20 $0.38 $ 0.17 $0.55 $(0.38) $(0.11) $(0.49) $11.26 4.96% Year Ended July 31, 2002 10.87 0.45 0.33 0.78 (0.45) -- (0.45) 11.20 7.34% Year Ended July 31, 2001 10.20 0.50 0.67 1.17 (0.50) -- (0.50) 10.87 11.68% Year Ended July 31, 2000 10.37 0.50 (0.17) 0.33 (0.50) -- (0.50) 10.20 3.34% Year Ended July 31, 1999 10.91 0.48 (0.44) 0.04 (0.48) (0.10) (0.58) 10.37 0.24% - ---------------------------------------------------------------------------------------------------------------------------- CLASS Y Year Ended July 31, 2003 $11.29 $0.50 $ 0.17 $0.67 $(0.50) $(0.11) $(0.61) $11.35 6.00% Year Ended July 31, 2002 10.96 0.56 0.33 0.89 (0.56) -- (0.56) 11.29 8.38% Year Ended July 31, 2001 10.28 0.61 0.68 1.29 (0.61) -- (0.61) 10.96 12.83% Year Ended July 31, 2000 10.45 0.61 (0.17) 0.44 (0.61) -- (0.61) 10.28 4.37% Year Ended July 31, 1999 11.00 0.59 (0.45) 0.14 (0.59) (0.10) (0.69) 10.45 1.10% - ----------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data ------------------------------------------------------------- Ratio of Net Ratio of Investment Ratio of Net Assets, Expenses Income Expenses to End of Year to Average to Average Average Portfolio (000's) Net Assets Net Assets Net Assets** Turnover (a) - -------------------------------------------------------------------------------------- CLASS A Year Ended July 31, 2003 $ 8,841 0.97% 4.04% 1.62% 52.53% Year Ended July 31, 2002 6,755 0.96% 4.86% 1.63% 71.59% Year Ended July 31, 2001 7,702 0.95% 5.43% 1.65% 58.91% Year Ended July 31, 2000 5,252 0.97% 5.70% 1.66% 84.65% Year Ended July 31, 1999 2,228 0.98% 5.08% 1.67% 60.00% - -------------------------------------------------------------------------------------- CLASS B Year Ended July 31, 2003 $ 5,193 1.72% 3.30% 1.87% 52.53% Year Ended July 31, 2002 4,997 1.71% 4.11% 1.88% 71.59% Year Ended July 31, 2001 4,367 1.70% 4.67% 1.90% 58.91% Year Ended July 31, 2000 2,760 1.71% 4.95% 1.90% 84.65% Year Ended July 31, 1999 2,078 1.72% 4.39% 1.91% 60.00% - -------------------------------------------------------------------------------------- CLASS Y Year Ended July 31, 2003 $235,902 0.72% 4.30% 0.87% 52.53% Year Ended July 31, 2002 222,500 0.71% 5.11% 0.88% 71.59% Year Ended July 31, 2001 230,523 0.70% 5.70% 0.90% 58.91% Year Ended July 31, 2000 241,169 0.71% 5.95% 0.90% 84.65% Year Ended July 31, 1999 199,413 0.73% 5.34% 0.92% 60.00% - --------------------------------------------------------------------------------------
* Excludes sales charge for class A and contingent deferred sales charge for class B. ** During the period certain fees were voluntarily reduced. If such voluntary fee reductions had not occurred the ratios would have been as indicated. (a) Portfolio turnover is calculated on the basis of the Fund, as a whole, without distinguishing between the classes of shares issued. See notes to financial statements. 81 PACIFIC CAPITAL FUNDS -- ULTRA SHORT GOVERNMENT FUND Financial Highlights (Selected data for a share of capital stock outstanding throughout the period)
Investment Activities Distributions ------------------------------------ ---------------------------------- Net Asset Net Realized Net Asset Value, Net and Unrealized Total from Net Net Value, Beginning Investment Gains (Losses) Investment Investment Realized Total End of of Period Income on Investments Activities Income Gains Distributions Period - ---------------------------------------------------------------------------------------------------------------------------- CLASS A Year Ended July 31, 2003 $10.31 $0.23 $(0.06) $0.17 $(0.23) $(0.01) $(0.24) $10.24 Year Ended July 31, 2002 10.20 0.30 0.11 0.41 (0.30) --(d) (0.30) 10.31 Year Ended July 31, 2001 (b) 10.02 0.55 0.18 0.73 (0.55) -- (0.55) 10.20 - ---------------------------------------------------------------------------------------------------------------------------- CLASS B Year Ended July 31, 2003 $10.31 $0.15 $(0.06) $0.09 $(0.15) $(0.01) $(0.16) $10.24 Year Ended July 31, 2002 10.21 0.22 0.10 0.32 (0.22) --(d) (0.22) 10.31 Year Ended July 31, 2001 (b) 10.02 0.48 0.19 0.67 (0.48) -- (0.48) 10.21 - ---------------------------------------------------------------------------------------------------------------------------- CLASS Y Year Ended July 31, 2003 $10.32 $0.26 $(0.06) $0.20 $(0.26) $(0.01) $(0.27) $10.25 Year Ended July 31, 2002 10.21 0.33 0.11 0.44 (0.33) --(d) (0.33) 10.32 Year Ended July 31, 2001 10.02 0.58 0.19 0.77 (0.58) -- (0.58) 10.21 Period Ended July 31, 2000 (c) 10.00 0.11 0.02 0.13 (0.11) -- (0.11) 10.02 - ----------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data ------------------------------------------------------------- Ratio of Net Net Assets, Ratio of Investment Ratio of End of Expenses Income to Expenses Total Period to Average Average to Average Portfolio Return* (000's) Net Assets Net Assets Net Assets** Turnover (a) - ------------------------------------------------------------------------------------------------------ CLASS A Year Ended July 31, 2003 1.67% $ 12,787 0.62% 2.23% 1.42% 17.41% Year Ended July 31, 2002 4.10% 14,116 0.62% 2.93% 1.42% 26.15% Year Ended July 31, 2001 (b) 7.46% 15,002 0.64% 5.20% 1.51% 8.22% - ------------------------------------------------------------------------------------------------------ CLASS B Year Ended July 31, 2003 0.91% $ 1,994 1.37% 1.46% 1.67% 17.41% Year Ended July 31, 2002 3.22% 1,403 1.37% 2.14% 1.67% 26.15% Year Ended July 31, 2001 (b) 6.79% 858 1.39% 4.48% 1.76% 8.22% - ------------------------------------------------------------------------------------------------------ CLASS Y Year Ended July 31, 2003 1.92% $240,916 0.37% 2.47% 0.67% 17.41% Year Ended July 31, 2002 4.35% 185,806 0.37% 3.16% 0.67% 26.15% Year Ended July 31, 2001 7.85% 149,445 0.39% 5.56% 0.76% 8.22% Period Ended July 31, 2000 (c) 1.27%(f) 47,483 0.40%(e) 6.38%(e) 1.28%(e) 0.00% - ------------------------------------------------------------------------------------------------------
* Excludes sales charge for class A and contingent deferred sales charge for class B. ** During the period certain fees were voluntarily reduced. If such voluntary fee reductions had not occurred the ratios would have been as indicated. (a) Portfolio turnover is calculated on the basis of the Fund, as a whole, without distinguishing between the classes of shares issued. (b) Period from August 1, 2000 (commencement of operations) to July 31, 2001. (c) Period from June 1, 2000 (commencement of operations) to July 31, 2000. (d) Less than $0.01 per share. (e) Annualized (f) Not Annualized See notes to financial statements. 82 PACIFIC CAPITAL FUNDS -- SHORT INTERMEDIATE U.S. GOVERNMENT SECURITIES FUND Financial Highlights (Selected data for a share of capital stock outstanding throughout the year)
Investment Activities Distributions ------------------------------------ -------------------------------- Net Asset Net Realized Net Asset Value, Net and Unrealized Total from Net Net Value, Beginning Investment Gains (Losses) Investment Investment Realized Total End of Total of Year Income on Investments Activities Income Gains Distributions Year Return* - ---------------------------------------------------------------------------------------------------------------------------- CLASS A Year Ended July 31, 2003 $10.06 $0.31 $ 0.02 $0.33 $(0.31) $(0.11) $(0.42) $ 9.97 3.28% Year Ended July 31, 2002 9.81 0.34 0.30 0.64 (0.34) (0.05) (0.39) 10.06 6.68% Year Ended July 31, 2001 9.30 0.45 0.51 0.96 (0.45) -- (0.45) 9.81 10.58% Year Ended July 31, 2000 9.42 0.44 (0.08) 0.36 (0.44) (0.04) (0.48) 9.30 3.97% Year Ended July 31, 1999 9.64 0.45 (0.18) 0.27 (0.45) (0.04) (0.49) 9.42 2.79% - ---------------------------------------------------------------------------------------------------------------------------- CLASS Y Year Ended July 31, 2003 $10.09 $0.33 $ 0.01 $0.34 $(0.33) $(0.11) $(0.44) $ 9.99 3.41% Year Ended July 31, 2002 9.83 0.37 0.31 0.68 (0.37) (0.05) (0.42) 10.09 7.03% Year Ended July 31, 2001 9.32 0.48 0.51 0.99 (0.48) -- (0.48) 9.83 10.84% Year Ended July 31, 2000 9.44 0.47 (0.08) 0.39 (0.47) (0.04) (0.51) 9.32 4.24% Year Ended July 31, 1999 9.66 0.48 (0.18) 0.30 (0.48) (0.04) (0.52) 9.44 3.05% - ----------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data -------------------------------------------------------------- Ratio of Net Ratio of Investment Ratio of Net Assets, Expenses Income to Expenses End of to Average Average to Average Portfolio Year (000's) Net Assets Net Assets Net Assets** Turnover (a) - --------------------------------------------------------------------------------------- CLASS A Year Ended July 31, 2003 $ 5,327 0.80% 2.93% 1.55% 17.50% Year Ended July 31, 2002 2,148 0.81% 3.44% 1.57% 62.60% Year Ended July 31, 2001 1,090 0.90% 4.66% 1.65% 107.46% Year Ended July 31, 2000 452 0.89% 4.78% 1.64% 48.99% Year Ended July 31, 1999 595 0.94% 4.65% 1.49% 63.27% - --------------------------------------------------------------------------------------- CLASS Y Year Ended July 31, 2003 $88,824 0.55% 3.23% 0.80% 17.50% Year Ended July 31, 2002 62,156 0.56% 3.69% 0.82% 62.60% Year Ended July 31, 2001 47,000 0.65% 4.96% 0.90% 107.46% Year Ended July 31, 2000 32,380 0.64% 5.04% 0.89% 48.99% Year Ended July 31, 1999 33,332 0.67% 4.89% 0.72% 63.27% - ---------------------------------------------------------------------------------------
* Excludes sales charge for class A. ** During the period certain fees were voluntarily reduced. If such voluntary fee reductions had not occurred the ratios would have been as indicated. (a) Portfolio turnover is calculated on the basis of the Fund, as a whole, without distinguishing between the classes of shares issued. See notes to financial statements. 83 PACIFIC CAPITAL FUNDS -- TAX-FREE SECURITIES FUND Financial Highlights (Selected data for a share of capital stock outstanding throughout the year)
Investment Activities Distributions ------------------------------------ -------------------------------- Net Asset Net Realized Net Asset Value, Net and Unrealized Total from Net Net Value, Beginning Investment Gains (Losses) Investment Investment Realized Total End of Total of Year Income on Investments Activities Income Gains Distributions Year Return* - ---------------------------------------------------------------------------------------------------------------------------- CLASS A Year Ended July 31, 2003 $10.86 $0.43 $(0.05) $0.38 $(0.43) $(0.06) $(0.49) $10.75 3.54% Year Ended July 31, 2002 10.74 0.45 0.23 0.68 (0.45) (0.11) (0.56) 10.86 6.47% Year Ended July 31, 2001 10.29 0.47 0.45 0.92 (0.47) -- (0.47) 10.74 9.07% Year Ended July 31, 2000 10.49 0.48 (0.15) 0.33 (0.48) (0.05) (0.53) 10.29 3.28% Year Ended July 31, 1999 10.84 0.48 (0.25) 0.23 (0.48) (0.10) (0.58) 10.49 2.00% - ---------------------------------------------------------------------------------------------------------------------------- CLASS B Year Ended July 31, 2003 $10.85 $0.35 $(0.04) $0.31 $(0.35) $(0.06) $(0.41) $10.75 2.86% Year Ended July 31, 2002 10.74 0.37 0.22 0.59 (0.37) (0.11) (0.48) 10.85 5.58% Year Ended July 31, 2001 10.29 0.39 0.45 0.84 (0.39) -- (0.39) 10.74 8.28% Year Ended July 31, 2000 10.49 0.40 (0.15) 0.25 (0.40) (0.05) (0.45) 10.29 2.54% Year Ended July 31, 1999 10.83 0.40 (0.24) 0.16 (0.40) (0.10) (0.50) 10.49 1.40% - ---------------------------------------------------------------------------------------------------------------------------- CLASS Y Year Ended July 31, 2003 $10.90 $0.46 $(0.05) $0.41 $(0.46) $(0.06) $(0.52) $10.79 3.80% Year Ended July 31, 2002 10.78 0.47 0.23 0.70 (0.47) (0.11) (0.58) 10.90 6.73% Year Ended July 31, 2001 10.33 0.49 0.45 0.94 (0.49) -- (0.49) 10.78 9.33% Year Ended July 31, 2000 10.53 0.50 (0.15) 0.35 (0.50) (0.05) (0.55) 10.33 3.55% Year Ended July 31, 1999 10.88 0.51 (0.25) 0.26 (0.51) (0.10) (0.61) 10.53 2.26% - ----------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data -------------------------------------------------------------- Ratio of Net Ratio of Investment Ratio of Net Assets, Expenses Income to Expenses End of to Average Average to Average Portfolio Year (000's) Net Assets Net Assets Net Assets** Turnover (a) - --------------------------------------------------------------------------------------- CLASS A Year Ended July 31, 2003 $ 11,829 0.96% 3.93% 1.61% 1.24% Year Ended July 31, 2002 11,765 0.94% 4.17% 1.61% 13.40% Year Ended July 31, 2001 8,413 0.95% 4.41% 1.64% 19.05% Year Ended July 31, 2000 6,832 0.95% 4.71% 1.64% 22.40% Year Ended July 31, 1999 4,795 0.96% 4.41% 1.65% 9.91% - --------------------------------------------------------------------------------------- CLASS B Year Ended July 31, 2003 $ 4,643 1.71% 3.18% 1.86% 1.24% Year Ended July 31, 2002 5,458 1.69% 3.42% 1.86% 13.40% Year Ended July 31, 2001 5,019 1.70% 3.65% 1.89% 19.05% Year Ended July 31, 2000 2,779 1.70% 3.97% 1.89% 22.40% Year Ended July 31, 1999 1,756 1.70% 3.68% 1.89% 9.91% - --------------------------------------------------------------------------------------- CLASS Y Year Ended July 31, 2003 $397,157 0.71% 4.18% 0.86% 1.24% Year Ended July 31, 2002 445,733 0.69% 4.42% 0.86% 13.40% Year Ended July 31, 2001 463,426 0.70% 4.66% 0.89% 19.05% Year Ended July 31, 2000 432,677 0.70% 4.96% 0.89% 22.40% Year Ended July 31, 1999 424,022 0.71% 4.66% 0.90% 9.91% - ---------------------------------------------------------------------------------------
* Excludes sales charge for class A and contingent deferred sales charge for class B. ** During the period certain fees were voluntarily reduced. If such voluntary fee reductions had not occurred the ratios would have been as indicated. (a) Portfolio turnover is calculated on the basis of the Fund, as a whole, without distinguishing between the classes of shares issued. See notes to financial statements. 84 PACIFIC CAPITAL FUNDS -- TAX-FREE SHORT INTERMEDIATE SECURITIES FUND Financial Highlights (Selected data for a share of capital stock outstanding throughout the year)
Investment Activities Distributions ------------------------------------ -------------------------------- Net Asset Net Realized Net Asset Value, Net and Unrealized Total from Net Net Value, Beginning Investment Gains (Losses) Investment Investment Realized Total End of Total of Year Income on Investments Activities Income Gains Distributions Year Return* - ---------------------------------------------------------------------------------------------------------------------------- CLASS A Year Ended July 31, 2003 $10.39 $0.25 $ 0.02 $0.27 $(0.25) $(0.05) $(0.30) $10.36 2.62% Year Ended July 31, 2002 10.18 0.29 0.21 0.50 (0.29) -- (0.29) 10.39 4.98% Year Ended July 31, 2001 9.86 0.35 0.32 0.67 (0.35) -- (0.35) 10.18 6.89% Year Ended July 31, 2000 9.95 0.35 (0.04) 0.31 (0.35) (0.05) (0.40) 9.86 3.19% Year Ended July 31, 1999 10.09 0.34 (0.09) 0.25 (0.34) (0.05) (0.39) 9.95 2.44% - ---------------------------------------------------------------------------------------------------------------------------- CLASS Y Year Ended July 31, 2003 $10.45 $0.28 $ 0.01 $0.29 $(0.28) $(0.05) $(0.33) $10.41 2.78% Year Ended July 31, 2002 10.23 0.32 0.22 0.54 (0.32) -- (0.32) 10.45 5.33% Year Ended July 31, 2001 9.91 0.38 0.32 0.70 (0.38) -- (0.38) 10.23 7.15% Year Ended July 31, 2000 10.00 0.37 (0.04) 0.33 (0.37) (0.05) (0.42) 9.91 3.44% Year Ended July 31, 1999 10.15 0.37 (0.10) 0.27 (0.37) (0.05) (0.42) 10.00 2.60% - ----------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data ------------------------------------------------------------- Ratio of Net Net Assets, Ratio of Investment Ratio of End of Expenses Income to Expenses Year to Average Average to Average Portfolio (000's) Net Assets Net Assets Net Assets** Turnover (a) - -------------------------------------------------------------------------------------- CLASS A Year Ended July 31, 2003 $ 2,322 0.97% 2.40% 1.58% 6.01% Year Ended July 31, 2002 2,157 0.98% 2.82% 1.61% 37.24% Year Ended July 31, 2001 1,732 0.98% 3.48% 1.63% 73.06% Year Ended July 31, 2000 1,458 0.98% 3.57% 1.63% 42.57% Year Ended July 31, 1999 878 0.98% 3.35% 1.63% 18.40% - -------------------------------------------------------------------------------------- CLASS Y Year Ended July 31, 2003 $63,449 0.72% 2.64% 0.83% 6.01% Year Ended July 31, 2002 49,599 0.73% 3.06% 0.86% 37.24% Year Ended July 31, 2001 39,857 0.73% 3.73% 0.88% 73.06% Year Ended July 31, 2000 41,371 0.73% 3.80% 0.88% 42.57% Year Ended July 31, 1999 47,668 0.73% 3.61% 0.88% 18.40% - --------------------------------------------------------------------------------------
* Excludes sales charge for class A. ** During the period certain fees were voluntarily reduced. If such voluntary fee reductions had not occurred the ratios would have been as indicated. (a) Portfolio turnover is calculated on the basis of the Fund, as a whole, without distinguishing between the classes of shares issued. See notes to financial statements. 85 PACIFIC CAPITAL FUNDS -- INTERNATIONAL STOCK FUND Financial Highlights (Selected data for a share of capital stock outstanding throughout the period)
Investment Activities Distributions ----------------------------------- ------------------------------------------- Net Asset Net Net Realized Net Asset Value, Investment and Unrealized Total from Net Net Value, Beginning Income Gains (Losses) Investment Investment Realized Total End of of Period (Loss) on Investments Activities Income Gains Distributions Period - -------------------------------------------------------------------------------------------------------------------------- CLASS A Year Ended July 31, 2003 $ 6.37 $ 0.03 $ 0.06 $ 0.09 $-- $ -- $ -- $ 6.46 Year Ended July 31, 2002 8.15 (0.04) (1.74) (1.78) -- -- -- 6.37 Year Ended July 31, 2001 14.55 (0.05) (3.77) (3.82) -- (2.58) (2.58) 8.15 Year Ended July 31, 2000 11.96 0.05 3.03 3.08 -- (0.49) (0.49) 14.55 Period Ended July 31, 1999 (b) 10.09 -- 1.87 1.87 -- -- -- 11.96 - -------------------------------------------------------------------------------------------------------------------------- CLASS B Year Ended July 31, 2003 $ 6.18 $(0.03) $ 0.09 $ 0.06 $-- $ -- $ -- $ 6.24 Year Ended July 31, 2002 7.94 (0.07) (1.69) (1.76) -- -- -- 6.18 Year Ended July 31, 2001 14.35 (0.11) (3.72) (3.83) -- (2.58) (2.58) 7.94 Year Ended July 31, 2000 11.90 0.04 2.90 2.94 -- (0.49) (0.49) 14.35 Period Ended July 31, 1999 (c) 10.20 (0.02) 1.72 1.70 -- -- -- 11.90 - -------------------------------------------------------------------------------------------------------------------------- CLASS Y Year Ended July 31, 2003 $ 6.44 $ 0.05 $ 0.08 $ 0.13 $-- $ -- $ -- $ 6.57 Year Ended July 31, 2002 8.19 (0.01) (1.74) (1.75) -- -- -- 6.44 Year Ended July 31, 2001 14.59 (0.02) (3.80) (3.82) -- (2.58) (2.58) 8.19 Year Ended July 31, 2000 11.98 (0.06) 3.16 3.10 -- (0.49) (0.49) 14.59 Period Ended July 31, 1999 (d) 10.00 -- 1.98 1.98 -- -- -- 11.98 - --------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data ----------------------------------------------------------------- Ratio of Net Ratio of Investment Ratio of Net Assets, Expenses to Income (Loss) Expenses to Total End of Period Average to Average Average Portfolio Return* (000's) Net Assets Net Assets Net Assets** Turnover (a) - ----------------------------------------------------------------------------------------------------------- CLASS A Year Ended July 31, 2003 1.41% $ 874 1.84% 0.43% 2.44% 178.04% Year Ended July 31, 2002 (21.84%) 1,137 1.81% (0.15%) 2.44% 244.40% Year Ended July 31, 2001 (29.92%) 2,210 1.75% (0.41%) 2.39% 213.53% Year Ended July 31, 2000 25.62% 4,362 1.66% (0.58%) 2.30% 214.18% Period Ended July 31, 1999 (b) 18.53%(f) 265 1.94%(e) (0.19%)(e) 2.61%(e) 156.46% - ----------------------------------------------------------------------------------------------------------- CLASS B Year Ended July 31, 2003 0.97% $ 536 2.59% (0.36%) 2.69% 178.04% Year Ended July 31, 2002 (22.17%) 612 2.56% (0.95%) 2.69% 244.40% Year Ended July 31, 2001 (30.48%) 860 2.50% (1.15%) 2.64% 213.53% Year Ended July 31, 2000 24.56% 1,202 2.43% (1.10%) 2.57% 214.18% Period Ended July 31, 1999 (c) 16.67%(f) 102 2.76%(e) (1.08%)(e) 2.91%(e) 156.46% - ----------------------------------------------------------------------------------------------------------- CLASS Y Year Ended July 31, 2003 2.02% $ 60,558 1.59% 0.74% 1.69% 178.04% Year Ended July 31, 2002 (21.37%) 50,422 1.56% 0.03% 1.69% 244.40% Year Ended July 31, 2001 (29.82%) 79,177 1.50% (0.14%) 1.64% 213.53% Year Ended July 31, 2000 25.65% 109,962 1.45% (0.49%) 1.59% 214.18% Period Ended July 31, 1999 (d) 19.90%(f) 81,253 1.65%(e) 0.03%(e) 1.79%(e) 156.46% - -----------------------------------------------------------------------------------------------------------
* Excludes sales charge for class A and contingent deferred sales charge for class B. ** During the period certain fees were voluntarily reduced. If such voluntary fee reductions had not occurred the ratios would have been as indicated. (a) Portfolio turnover is calculated on the basis of the Fund, as a whole, without distinguishing between the classes of shares issued. (b) Period from December 8, 1998 (commencement of operations) to July 31, 1999. (c) Period from December 20, 1998 (commencement of operations) to July 31, 1999. (d) Period from December 2, 1998 (commencement of operations) to July 31, 1999. (e) Annualized (f) Not Annualized See notes to financial statements. 86 PACIFIC CAPITAL FUNDS -- VALUE FUND Financial Highlights (Selected data for a share of capital stock outstanding throughout the period)
Investment Activities Distributions ----------------------------------- --------------------------------- Net Asset Net Net Realized Net Asset Value, Investment and Unrealized Total from Net Net Value, Beginning Income Gains (Losses) Investment Investment Realized Total End of of Period (Loss) on Investments Activities Income Gains Distributions Period - --------------------------------------------------------------------------------------------------------------------------- CLASS A Year Ended July 31, 2003 $ 7.02 $ 0.07 $ 0.35 $ 0.42 $(0.07) $ -- $(0.07) $ 7.37 Year Ended July 31, 2002 9.13 0.04 (2.11) (2.07) (0.04) -- (0.04) 7.02 Year Ended July 31, 2001 10.73 0.04 (0.22) (0.18) (0.05) (1.37) (1.42) 9.13 Year Ended July 31, 2000 10.37 0.03 0.50 0.53 (0.04) (0.13) (0.17) 10.73 Period Ended July 31, 1999 (b) 10.05 0.01 0.78 0.79 (0.02) (0.45) (0.47) 10.37 - --------------------------------------------------------------------------------------------------------------------------- CLASS B Year Ended July 31, 2003 $ 6.93 $ 0.02 $ 0.34 $ 0.36 $(0.02) $ -- $(0.02) $ 7.27 Year Ended July 31, 2002 9.04 (0.02) (2.09) (2.11) -- -- -- 6.93 Year Ended July 31, 2001 10.65 (0.02) (0.22) (0.24) --(e) (1.37) (1.37) 9.04 Year Ended July 31, 2000 10.34 (0.03) 0.47 0.44 --(e) (0.13) (0.13) 10.65 Period Ended July 31, 1999 (c) 9.90 (0.01) 0.91 0.90 (0.01) (0.45) (0.46) 10.34 - --------------------------------------------------------------------------------------------------------------------------- CLASS Y Year Ended July 31, 2003 $ 7.03 $ 0.09 $ 0.35 $ 0.44 $(0.09) $ -- $(0.09) $ 7.38 Year Ended July 31, 2002 9.15 0.06 (2.12) (2.06) (0.06) -- (0.06) 7.03 Year Ended July 31, 2001 10.74 0.07 (0.22) (0.15) (0.07) (1.37) (1.44) 9.15 Year Ended July 31, 2000 10.38 0.07 0.49 0.56 (0.07) (0.13) (0.20) 10.74 Period Ended July 31, 1999 (d) 10.00 0.04 0.83 0.87 (0.04) (0.45) (0.49) 10.38 - ---------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data ------------------------------------------------------------- Ratio of Net Investment Net Assets, Ratio of Income Ratio of End of Expenses (Loss) to Expenses Total Period to Average Average to Average Portfolio Return* (000's) Net Assets Net Assets Net Assets** Turnover (a) - ------------------------------------------------------------------------------------------------------- CLASS A Year Ended July 31, 2003 6.07% $ 2,146 1.32% 1.05% 1.82% 77.62% Year Ended July 31, 2002 (22.74%) 2,032 1.30% 0.48% 1.82% 48.18% Year Ended July 31, 2001 (1.66%) 2,504 1.31% 0.49% 1.85% 79.05% Year Ended July 31, 2000 5.21% 1,355 1.30% 0.30% 1.85% 120.42% Period Ended July 31, 1999 (b) 7.81%(g) 178 1.60%(f) (0.01%)(f) 2.15%(f) 113.72% - ------------------------------------------------------------------------------------------------------- CLASS B Year Ended July 31, 2003 5.22% $ 1,291 2.07% 0.31% 2.07% 77.62% Year Ended July 31, 2002 (23.34%) 1,427 2.05% (0.28%) 2.07% 48.18% Year Ended July 31, 2001 (2.25%) 1,544 2.06% (0.26%) 2.10% 79.05% Year Ended July 31, 2000 4.30% 1,018 2.06% (0.37%) 2.10% 120.42% Period Ended July 31, 1999 (c) 8.94%(g) 472 2.44%(f) (0.71%)(f) 2.48%(f) 113.72% - ------------------------------------------------------------------------------------------------------- CLASS Y Year Ended July 31, 2003 6.32% $210,881 1.07% 1.30% 1.07% 77.62% Year Ended July 31, 2002 (22.59%) 198,862 1.05% 0.71% 1.07% 48.18% Year Ended July 31, 2001 (1.34%) 231,106 1.06% 0.76% 1.10% 79.05% Year Ended July 31, 2000 5.44% 203,366 1.05% 0.66% 1.09% 120.42% Period Ended July 31, 1999 (d) 8.56%(g) 75,464 1.28%(f) 0.40%(f) 1.32%(f) 113.72% - -------------------------------------------------------------------------------------------------------
* Excludes sales charge for class A and contingent deferred sales charge for class B. ** During the period certain fees were voluntarily reduced. If such voluntary fee reductions had not occurred the ratios would have been as indicated. (a) Portfolio turnover is calculated on the basis of the Fund, as a whole, without distinguishing between the classes of shares issued. (b) Period from December 8, 1998 (commencement of operations) to July 31, 1999. (c) Period from December 13, 1998 (commencement of operations) to July 31, 1999. (d) Period from December 3, 1998 (commencement of operations) to July 31, 1999. (e) Less than $0.01 per share. (f) Annualized (g) Not Annualized See notes to financial statements. 87 PACIFIC CAPITAL FUNDS -- SMALL CAP FUND Financial Highlights (Selected data for a share of capital stock outstanding throughout the period)
Investment Activities Distributions -------------------------------------- -------------------------------------------- Net Asset Net Realized Net Asset Value, Net and Unrealized Total from Net Net Value, Beginning Investment Gains (Losses) Investment Investment Realized Total End of of Period Income (Loss) on Investments Activities Income Gains Distributions Period - ------------------------------------------------------------------------------------------------------------------------------ CLASS A Year Ended July 31, 2003 $12.15 $(0.01) $ 2.59 $ 2.58 $(0.02) $(1.47) $(1.49) $13.24 Year Ended July 31, 2002 13.47 0.03 (0.36) (0.33) (0.03) (0.96) (0.99) 12.15 Year Ended July 31, 2001 10.40 0.05 3.90 3.95 (0.08) (0.80) (0.88) 13.47 Year Ended July 31, 2000 10.66 0.02 0.10 0.12 (0.03) (0.35) (0.38) 10.40 Period Ended July 31, 1999 (b) 10.07 (0.01) 0.60 0.59 -- -- -- 10.66 - ------------------------------------------------------------------------------------------------------------------------------ CLASS B Year Ended July 31, 2003 $11.92 $(0.08) $ 2.52 $ 2.44 $ -- $(1.47) $(1.47) $12.89 Year Ended July 31, 2002 13.29 (0.06) (0.35) (0.41) --(e) (0.96) (0.96) 11.92 Year Ended July 31, 2001 10.31 (0.03) 3.82 3.79 (0.01) (0.80) (0.81) 13.29 Year Ended July 31, 2000 10.61 (0.03) 0.08 0.05 --(e) (0.35) (0.35) 10.31 Period Ended July 31, 1999 (c) 9.78 (0.03) 0.86 0.83 -- -- -- 10.61 - ------------------------------------------------------------------------------------------------------------------------------ CLASS Y Year Ended July 31, 2003 $12.18 $ 0.03 $ 2.60 $ 2.63 $(0.04) $(1.47) $(1.51) $13.30 Year Ended July 31, 2002 13.49 0.06 (0.35) (0.29) (0.06) (0.96) (1.02) 12.18 Year Ended July 31, 2001 10.42 0.08 3.88 3.96 (0.09) (0.80) (0.89) 13.49 Year Ended July 31, 2000 10.67 0.05 0.10 0.15 (0.05) (0.35) (0.40) 10.42 Period Ended July 31, 1999 (d) 10.00 -- 0.67 0.67 -- -- -- 10.67 - ------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data ----------------------------------------------------------------- Ratio of Net Ratio of Investment Ratio of Net Assets, Expenses to Income (Loss) Expenses to Total End of Period Average to Average Average Portfolio Return* (000's) Net Assets Net Assets Net Assets** Turnover (a) - ---------------------------------------------------------------------------------------------------------- CLASS A Year Ended July 31, 2003 24.62% $ 1,595 1.60% (0.08%) 2.20% 105.27% Year Ended July 31, 2002 (2.72%) 1,265 1.58% 0.20% 2.20% 81.67% Year Ended July 31, 2001 40.28% 1,245 1.65% 0.31% 2.29% 90.31% Year Ended July 31, 2000 1.51% 330 1.66% 0.30% 2.31% 98.73% Period Ended July 31, 1999 (b) 5.91%(g) 93 1.84%(f) (0.26%)(f) 2.50%(f) 60.08% - ---------------------------------------------------------------------------------------------------------- CLASS B Year Ended July 31, 2003 23.74% $ 2,476 2.35% (0.83%) 2.45% 105.27% Year Ended July 31, 2002 (3.38%) 2,013 2.33% (0.61%) 2.44% 81.67% Year Ended July 31, 2001 38.92% 890 2.40% (0.46%) 2.54% 90.31% Year Ended July 31, 2000 0.85% 214 2.41% (0.45%) 2.55% 98.73% Period Ended July 31, 1999 (c) 8.56%(g) 82 2.59%(f) (1.00%)(f) 2.73%(f) 60.08% - ---------------------------------------------------------------------------------------------------------- CLASS Y Year Ended July 31, 2003 24.96% $85,520 1.35% 0.19% 1.45% 105.27% Year Ended July 31, 2002 (2.47%) 68,001 1.33% 0.47% 1.45% 81.67% Year Ended July 31, 2001 40.34% 53,558 1.40% 0.67% 1.54% 90.31% Year Ended July 31, 2000 1.82% 36,962 1.41% 0.52% 1.55% 98.73% Period Ended July 31, 1999 (d) 6.75%(g) 31,812 1.52%(f) 0.08%(f) 1.66%(f) 60.08% - ----------------------------------------------------------------------------------------------------------
* Excludes sales charge for class A and contingent deferred sales charge for class B. ** During the period certain fees were voluntarily reduced. If such voluntary fee reductions had not occurred the ratios would have been as indicated. (a) Portfolio turnover is calculated on the basis of the Fund, as a whole, without distinguishing between the classes of shares issued. (b) Period from December 8, 1998 (commencement of operations) to July 31, 1999. (c) Period from December 20, 1998 (commencement of operations) to July 31, 1999. (d) Period from December 3, 1998 (commencement of operations) to July 31, 1999. (e) Less than $0.01 per share. (f) Annualized (g) Not Annualized See notes to financial statements. 88 PACIFIC CAPITAL FUNDS Report of Independent Auditors The Board of Trustees and Shareholders Pacific Capital Funds We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of the Pacific Capital Funds (comprised of Growth Stock Fund, Growth and Income Fund, New Asia Growth Fund, Diversified Fixed Income Fund, Ultra Short Government Fund, Short Intermediate U.S. Government Securities Fund, Tax-Free Securities Fund, Tax-Free Short Intermediate Securities Fund, International Stock Fund, Value Fund and Small Cap Fund) (the Funds) as of July 31, 2003, the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years then ended and the financial highlights for each of the periods indicated therein. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of July 31, 2003, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the respective portfolios constituting the Pacific Capital Funds at July 31, 2003, the results of their operations for the year then ended, the changes in their net assets for each of the two years then ended and their financial highlights for each of the periods indicated therein, in conformity with accounting principles generally accepted in the United States. /s/ Ernst & Young LLP Columbus, Ohio September 5, 2003 89 PACIFIC CAPITAL FUNDS Trustees and Executive Officers of the Pacific Capital Funds (unaudited) Interested Trustees. The table below sets forth certain information about each of the Trustees of the Trust who are "interested persons" of the Trust as defined by the 1940 Act.
Term of Number of Office; Portfolios Position(s) Term in Fund Name, Address Held with Served in Principal Occupation(s) Complex Other Directorships and Age Trust Office During Past 5 Years Overseen Held by Trustee - ------------- ----------- ------------ --------------------------- ---------- ------------------------------------- Donna Tanoue* Trustee and Indefinite; Vice Chairman of Bank of 11 Member of the Boards of the Bank of 111 South King Street, Chairperson Since: 4/02 Hawaii--Investment Hawaii (since 2001), Bankoh Honolulu, Hawaii 96813 Services Group (since Investment Services, Inc. (since Age: 49 2002); Self-employed 2001), Hawaii Community Consultant (2001-2002); Foundation (since 2002), Kaneohe Chairman of Federal Ranch Co., Ltd. (since 2002), Hawaii Deposit Insurance Corp. Theatre Center (since 2002). (1998-2001) Douglas Philpotts**, Trustee Indefinite; Retired. Formerly Director, 11 Trustee of Cash Assets Trust, U.S. 55 Dowsett Avenue Since: 10/92 Chairman of the Board and Treasuries Cash Assets Trust, Tax- Honolulu, Hawaii 96817 President of Hawaiian Trust Free Cash Assets Trust, and Hawaiian Age: 71 Co., Ltd. (until 1994), a Tax-Free Trust (registered investment predecessor of The Asset companies) (since 1993); Trustee of Management Group of The Strong Foundation (support of Bank of Hawaii. programs for Hawaiian youth) (since 1974).
- -------- * Ms. Tanoue is an "interested person," as defined by the 1940 Act, because of her employment with The Asset Management Group of Bank of Hawaii, the investment adviser to the Trust. ** Mr. Philpotts may be deemed to be an "interested person," as defined by the 1940 Act, because of his ownership, as trustee of a revocable trust, of common stock of Bank of Hawaii. 90 PACIFIC CAPITAL FUNDS Independent Trustees. The table below sets forth certain information about the Trustees of the Trust who are not "interested persons" of the Trust as defined in the 1940 Act.
Term of Number of Office; Portfolios Position(s) Term in Fund Name, Address Held with Served in Principal Occupation(s) Complex Other Directorships and Age Trust Office During Past 5 Years Overseen Held by Trustee - ------------- ----------- ------------ --------------------------- ---------- -------------------------------------- Richard W. Gushman, II Trustee Indefinite; President and Chief 11 Trustee of Cash Assets Trust, Tax- 700 Bishop Street, Since: 10/92 Executive Officer of Free Cash Assets Trust, U.S. Suite 200 OKOA, Inc., (commercial Treasuries Cash Assets Trust, and Honolulu, Hawaii 96813 real estate) (since 1972); Hawaiian Tax-Free Trust (registered Age: 57 Managing Partner of investment companies) (since 1993); Summit Financial Director of Oceanic Cablevision, Inc. Resources (financial (since 1998), Servco Pacific, Inc. services company); Trustee (distribution of automotive and other (since 2000) and Chairman products), Outrigger Hotels, Inc. of the Board (since 2002) (since 2000), and American Savings of the Estate of James Bank (2002); Trustee of Hawaii Campbell (real estate Pacific University (since 1997); Board holdings)*** member of Aloha United Way, Boys and Girls Club of Honolulu, and other charitable and civic organizations. Stanley W. Hong Trustee Indefinite; President of Waste 11 Trustee of Cash Assets Trust, Tax- 4976 Poola Street Since: 10/92 Management of Hawaii, Free Cash Assets Trust, U.S. Honolulu, Hawaii 96821 Inc. (landfill management) Treasuries Cash Assets Trust, and Age: 67 (since 2002); President and Hawaiian Tax-Free Trust (registered Chief Executive Officer of investment companies) (since 1993); The Chamber of Commerce Trustee of The King Williams Charles of Hawaii (1996-2002) Lunalilo Trust Estate (since 2001); Board member of several other corporate and community organizations. Russell K. Okata Trustee Indefinite; Executive Director of the 11 Trustee of Cash Assets Trust, Tax- 1015 Wilder Avenue, #203 Since: 10/92 Hawaii Government Free Cash Assets Trust, U.S. Honolulu, Hawaii 96822 Employees Association Treasuries Cash Assets Trust, and Age: 59 (since 1981) Hawaiian Tax-Free Trust (registered investment companies) (since 1993); Vice President of the Hawaii State AFL-CIO (since 1972) and the American Federation of State, County & Municipal Employees, AFL-CIO (since 1981); Chairman of the Royal State Group (since 1988); Member of the Boards of Blood Bank of Hawaii, Bishop Museum, Public Schools of Hawaii Foundation, and other community organizations. Oswald K. Stender Trustee Indefinite; Retired 11 Trustee of Cash Assets Trust, Tax- 1056 Maunawili Since: 10/92 Free Cash Assets Trust, U.S. Kailua, Hawaii 96734 Treasuries Cash Assets Trust and Age: 71 Hawaiian Tax-Free Trust (registered investment companies) (since 1993); Director of Hawaiian Electric Industries, Inc., a public utility holding company (since 1993); former Trustee of the Bernice Pauahi Bishop Estate (operation of school for children of Hawaiian ancestry) (1990- 1999); Board member of various housing and real estate associations and community organizations.
91 - -------- *** The Estate of James Campbell has entered into a credit agreement with a group of commercial banks, one of which is Bank of Hawaii, for which BNP Paribas acts as administrative agent. The agreement provides for a variety of term and revolving loans with a total lending commitment of $430 million, of which Bank of Hawaii's commitment is approximately $45 million, and is for a period of two years with certain rights of extension. The Trustees of the Trust (other than Mr. Gushman) who are not "interested persons" of the Trust as defined in the 1940 Act have determined that these are not material relationships that might impair Mr. Gushman's independence, and that he should continue to be classified as a "disinterested" Trustee of the Trust pursuant to the 1940 Act. The Statement of Additional Information includes additional information about the Trustees of the Trust and is available, without charge, upon request, by calling (800) 258-9232. 92 PACIFIC CAPITAL FUNDS Executive Officers. The table below sets forth certain information about each of the Trust's executive officers.
Term of Office Position(s) Held and Length of Name, Address and Age with Trust Time Served Principal Occupation(s) During Past 5 Years - --------------------- ---------------- -------------- ---------------------------------------------------------- William P. Henry, Jr. President Indefinite; Executive Vice President of Bank of Hawaii (2003); 130 Merchant Street Since 12/02 President of Trinity Solutions, Inc. and advisor to CEO of Suite 240 Bank of Hawaii (2001-2002); Senior Vice President, Honolulu, Hawaii 96813 Strategic Business Development of Jubilee Tech Age: 39 International (2000); Senior Manager of Marakon Associates (1991-1998). Irimga McKay Executive Indefinite; Executive Vice President, Client Services of BISYS Fund 3435 Stelzer Road Vice President Since: 12/02 Services (since 1988). Columbus, Ohio 43219 Age: 43 Andrew Spencer Executive Vice Indefinite; Vice President and Manager of Bank of Hawaii-- 130 Merchant Street President Since: 6/01 Investment Products Division (since 2001); Assistant Vice Suite 240 President of M&T Bank (1998-2001); Manager of Xerox Honolulu, Hawaii 96813 Corporation--Product Development (1988-1998). Age: 38 Jenna Alexander Vice President Indefinite; Product Manager, Investment Products Division of Bank of 130 Merchant Street Since: 3/03 Hawaii (since 2000). Marketing Director, Megaxess, Inc. Suite 240 (1998-2000) Honolulu, Hawaii 96813 Age: 27 Alaina Metz Vice President Indefinite; Vice President, Regulatory Services of BISYS Fund 3435 Stelzer Road Since: 9/96 Services--Blue Sky Compliance (since 1995). Columbus, Ohio 43219 Age: 36 Mark Sichley Vice President Indefinite; Vice President, Client Services of BISYS Fund Services 3435 Stelzer Road Since: 6/02 (since 1987). Columbus, Ohio 43219 Age: 45 Nadeem Yousaf Treasurer Indefinite; Vice President, Financial Services of BISYS Fund Services 3435 Stelzer Road Since: 6/00 (since 1999); Director of Canadian Operations, Investors Columbus, Ohio 43219 Bank and Trust (1997-1999); Assistant Manager-- Age: 34 Investment Management Services Group of PricewaterhouseCoopers LLP (1994-1997).
93 PACIFIC CAPITAL FUNDS Special Meeting of Shareholders (unaudited) A Special Meeting of shareholders of the Pacific Capital Growth and Income Fund (the "Fund") was held on May 8, 2003 at 60 State Street, Suite 1300, Boston, Massachusetts 02109, for the purpose of seeking approval to change the fundamental investment objectives of the Fund to make long term capital appreciation the primary objective and current income the secondary objective (the "Proposal"). As of the record date, there were 14,998,681.950 shares of the Fund outstanding and entitled to vote at the Special Meeting. A majority of the outstanding voting shares of the Fund approved the Proposal by the following votes:
FOR AGAINST ABSTAIN 12,078,761.069 shares 60,671.128 shares 17,549.249 shares
94 INVESTMENT ADVISER The Asset Management Group of Bank of Hawaii 111 South King Street Honolulu, HI 96813 SUB-ADVISERS Nicholas-Applegate Capital Management 600 West Broadway San Diego, CA 92102 First State Investments 3 Exchange Square 8 Connaught Place Central Hong Kong DISTRIBUTOR BISYS Fund Services 3435 Stelzer Road Columbus, OH 43219 LEGAL COUNSEL Paul, Hastings,Janofsky & Walker LLP 515 South Flower Street Los Angeles, CA 90071 INDEPENDENT AUDITORS Ernst & Young LLP 41 South High Street, Suite 1100 Columbus, OH 43215 ADMINISTRATOR AND TRANSFER AGENT BISYS Fund Services Ohio, Inc. 3435 Stelzer Road Columbus, OH 43219 [GRAPHIC]Pacific Capital Funds MANAGED BY THE ASSET MANAGEMENT GROUP OF [GRAPHIC] Bank of Hawaii The Pacific Capital Funds are distributed by BISYS Fund Services. This document must be preceded or accompanied by a current prospectus for the Pacific Capital Funds, which you should read carefully before you invest or send money. PCR-0006 9/03 Item 2. Code of Ethics. Disclose whether, as of the end of the period covered by the report, the registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. If the registrant has not adopted such a code of ethics, explain why it has not done so. The registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. This code of ethics is included as Exhibit 10 (a)(1). Item 3. Audit Committee Financial Expert. (a) (1) Disclose that the registrant's board of directors has determined that the registrant either: (i) Has at least one audit committee financial expert serving on its audit committee; or (ii) Does not have an audit committee financial expert serving on its audit committee. (2) If the registrant provides the disclosure required by paragraph (a)(1)(i) of this Item, it must disclose the name of the audit committee financial expert and whether that person is "independent." In order to be considered "independent" for purposes of this Item, a member of an audit committee may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee: (i) Accept directly or indirectly any consulting, advisory, or other compensatory fee from the issuer; or (ii) Be an "interested person" of the investment company as defined in Section 2(a)(19) of the Act (15 U.S.C. 80a- 2(a)(19)). (3) If the registrant provides the disclosure required by paragraph (a)(1)(ii) of this Item, it must explain why it does not have an audit committee financial expert. The Registrant's Board of Trustees has determined that no member of the Board's audit committee qualifies as an audit committee financial expert ("ACFE"). After evaluating the matter, the Board concluded that it was not necessary to add a Trustee to the Board who qualified as an ACFE, as the business experience of the current independent members of the Board was adequate to exercise their oversight responsibilities. Item 4. Principal Accountant Fees and Services. (a) Disclose, under the caption Audit Fees, the aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years. (b) Disclose, under the caption Audit-Related Fees, the aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported under paragraph (a) of this Item. Registrants shall describe the nature of the services comprising the fees disclosed under this category. (c) Disclose, under the caption Tax Fees, the aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning. Registrants shall describe the nature of the services comprising the fees disclosed under this category. (d) Disclose, under the caption All Other Fees, the aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) of this Item. Registrants shall describe the nature of the services comprising the fees disclosed under this category. (e) (1) Disclose the audit committee's pre-approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X. (2) Disclose the percentage of services described in each of paragraphs (b) through (d) of this Item that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X. (f) If greater than 50 percent, disclose the percentage of hours expended on the principal accountant's engagement to audit the registrant's financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full-time, permanent employees. (g) Disclose the aggregate non-audit fees billed by the registrant's accountant for services rendered to the registrant, and rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant. (h) Disclose whether the registrant's audit committee of the board of directors has considered whether the provision of nonaudit services that were rendered to the registrant's investment adviser (not including any subadviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant's independence. Only effective for annual reports with periods ending on or after December 15, 2003. Item 5. Audit Committee of Listed Registrants. Not applicable. Item 6. [Reserved] Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. A closed-end management investment company that is filing an annual report on this Form N-CSR must, unless it invests exclusively in non-voting securities, describe the policies and procedures that it uses to determine how to vote proxies relating to portfolio securities, including the procedures that the company uses when a vote presents a conflict between the interests of its shareholders, on the one hand, and those of the company's investment adviser; principal underwriter; or any affiliated person (as defined in Section 2(a)(3) of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(3)) and the rules thereunder) of the company, its investment adviser, or its principal underwriter, on the other. Include any policies and procedures of the company's investment adviser, or any other third party, that the company uses, or that are used on the company's behalf, to determine how to vote proxies relating to portfolio securities. Not applicable. Item 8. [Reserved] Item 9. Controls and Procedures. (a) Disclose the conclusions of the registrant's principal executive and principal financial officers, or persons performing similar functions, regarding the effectiveness of the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Act (17 CFR 270.30a-3(c))) as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Exchange Act (17 CFR 240.13a-15(b) or 240.15d-15(b)). In the opinion of the principal executive officer and principal financial officer, based on their evaluation, the registrant's disclosure controls and procedures are adequately designed and are operating effectively to ensure (i) that material information relating to the registrant, including its consolidated subsidiaries, is made known to them by others within those entities, particularly during the period in which this report is being prepared; and (ii) that information required to be disclosed by the registrant on Form N-CSR is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. (b) Disclose any change in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that occurred during the registrant's last 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. There were no changes 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 have materially affected or are reasonably likely to materially affect, the registrant's internal control over financial reporting. Item 10. Exhibits. (a) File the exhibits listed below as part of this Form. Letter or number the exhibits in the sequence indicated. (a)(1) Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy the Item 2 requirements through filing of an exhibit. The code of ethics that is the subject of the disclosure required by Item 2 is attached hereto. (a)(2) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2 under the Act (17 CFR 270.30a-2). Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. (b) A separate or combined certification for each principal executive officer and principal officer of the registrant as required by Rule 30a-2(b) under the Act of 1940. Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) Pacific Capital Funds By (Signature and Title)* /s/ Nadeem Yousaf ------------------------------------- Nadeem Yousaf, Treasurer Date October 1, 2003 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* /s/ William P. Henry, Jr. ------------------------------------- William P. Henry, Jr., President Date October 1, 2003 By (Signature and Title)* /s/ Nadeem Yousaf ------------------------------------- Nadeem Yousaf, Treasurer Date October 1, 2003 * Print the name and title of each signing officer under his or her signature. EX-99.CODE ETH 3 dex99codeeth.txt CODE OF ETHICS Exhibit 99.CODE ETH PACIFIC CAPITAL FUNDS SUPPLEMENTAL CODE OF ETHICS FOR PRINCIPAL OFFICERS AND SENIOR FINANCIAL OFFICERS The Board of Trustees (the "Board") of Pacific Capital Funds (the "Trust") has adopted this Supplemental Code of Ethics (the "Code") for the Trust's Principal Officers and Senior Financial Officers (the "Officers") to guide and remind the Officers of their responsibilities to the Trust, other Officers, shareholders of the Trust, and governmental authorities. Officers are expected to act in accordance with the guidance and standards set forth in this Code. For the purposes of this Code, the Trust's Principal Officers and Senior Financial Officers shall include: the Principal Executive Officer; the Principal Financial Officer; the Principal Accounting Officer; the Controller; and any persons performing similar functions on behalf of the Trust, regardless of whether such persons are employed by the Trust or a third party. This Code is intended to serve as the code of ethics described in Section 406 of The Sarbanes-Oxley Act of 2002 and Form N-CSR. To the extent that an Officer is subject to the Trust's code of ethics adopted pursuant to Rule 17j-1 of the Investment Company Act of 1940, as amended (the "Rule 17j-1 Code"), this Code is intended to supplement and be interpreted in the context of the Rule 17j-1 Code. This Code also should be interpreted in the context of all applicable laws, regulations, the Trust's Agreement and Declaration of Trust and Bylaws, as amended, and all other governance and disclosure policies and documents adopted by the Board. All Officers must become familiar and fully comply with this Code. Because this Code cannot and does not cover every applicable law or provide answers to all questions that might arise, all Officers are expected to use common sense about what is right and wrong, including a sense of when it is proper to seek guidance from others on the appropriate course of conduct. The purpose of this Code is to set standards for the Officers that are reasonably designed to deter wrongdoing and are necessary to promote: (i) honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; (ii) full, fair, accurate, timely, and understandable disclosure in reports and documents that the Trust files with, or submits to, the Securities and Exchange Commission (the "SEC") and in any other public communications by the Trust; (iii) compliance with applicable governmental laws, rules and regulations; (iv) the prompt internal reporting of violations of the Code to the appropriate persons as set forth in the Code; and (v) accountability for adherence to the Code. 1. Honest and Ethical Conduct (a) Honesty, Diligence and Professional Responsibility Officers are expected to observe both the form and the spirit of the ethical principles contained in this Code. Officers must perform their duties and responsibilities for the Trust: (i) with honesty, diligence, and a commitment to professional and ethical responsibility; (ii) carefully, thoroughly and in a timely manner; and (iii) in conformity with applicable professional and technical standards. Officers who are certified public accountants are expected carry out their duties and responsibilities in a manner consistent with the principles governing the accounting profession, including any guidelines or principles issued by the Public Company Accounting Oversight Board or the American Institute of Certified Public Accountants from time to time. (b) Objectivity / Avoidance of Undisclosed Conflicts of Interest Officers are expected to maintain objectivity and avoid undisclosed conflicts of interest. In the performance of their duties and responsibilities for the Trust, Officers must not subordinate their judgment to personal gain and advantage, or be unduly influenced by their own interests or by the interests of others. Officers must avoid participation in any activity or relationship that constitutes a conflict of interest unless that conflict has been completely disclosed to affected parties. Further, Officers should avoid participation in any activity or relationship that could create the appearance of a conflict of interest. A conflict of interest would generally arise if an Officer directly or indirectly participated in any investment, interest, association, activity or relationship that may impair or appear to impair the Officer's objectivity. Any Officer who may be involved in a situation or activity that might be a conflict of interest or give the appearance of a conflict of interest should consider reporting such situation or activity using the reporting procedures set forth in Section 4 of this Code The Audit Committee will not be responsible for monitoring or enforcing this conflict of interest policy, but rather each Officer is responsible for self-compliance with this conflict of interest policy. (c) Preparation of Financial Statements Officers must not knowingly make any misrepresentations regarding the Trust's financial statements or any facts in the preparation of the Trust's financial statements, and must comply with all applicable laws, standards, principles, guidelines, rules and regulations in the preparation of the Trust's financial statements. This section is intended to prohibit: (i) making, or permitting or directing another to make, materially false or misleading entries in the Trust's financial statements or records; (ii) failing to correct the Trust's financial statements or records that are materially false or misleading when he or she has the authority to record an entry; and (iii) signing, or permitting or directing another to sign, a document containing materially false or misleading financial information. Officers must be scrupulous in their application of generally accepted accounting principles. No Officer may (i) express an opinion or state affirmatively that the financial statements or other financial data of the Trust are presented in conformity with generally accepted accounting principles, or (ii) state that he or she is not aware of any material modifications that should be made to such statements or data in order for them to be in conformity with generally accepted accounting principles, if such statements or data contain any departure from generally accepted accounting principles then in effect in the United States. Officers must follow the laws, standards, principles, guidelines, rules and regulations established by all applicable governmental bodies, commissions or other regulatory agencies in the preparation of financial statements, records and related information. If an Officer prepares financial statements, records or related information for purposes of reporting to such bodies, commissions or regulatory agencies, the Officer must follow the requirements of such organizations in addition to generally accepted accounting principles. If an Officer and his or her supervisor have a disagreement or dispute relating to the preparation of financial statements or the recording of transactions, the Officer should take the following steps to ensure that the situation does not constitute an impermissible subordination of judgment: (iv) The Officer should consider whether (i) the entry or the failure to record a transaction in the records, or (ii) the financial statement presentation or the nature or omission of disclosure in the financial statements, as proposed by the supervisor, represents the use of an acceptable alternative and does not materially misrepresent the facts or result in an omission of a material fact. If, after appropriate research or consultation, the Officer concludes that the matter has authoritative support and/or does not result in a material misrepresentation, the Officer need do nothing further. (v) If the Officer concludes that the financial statements or records could be materially misstated as a result of the supervisor's determination, the Officer should follow the reporting procedures set forth in Section 4 of this Code. (d) Obligations to the Independent Auditor of the Trust In dealing with the Trust's independent auditor, Officers must be candid and not knowingly misrepresent facts or knowingly fail to disclose material facts, and must respond to specific inquiries and requests by the Trust's independent auditor. Officers must not take any action, or direct any person to take any action, to fraudulently influence, coerce, manipulate or mislead the Trust's independent auditor in the performance of an audit of the Trust's financial statements for the purpose of rendering such financial statements materially misleading. 2. Full, Fair, Accurate, Timely and Understandable Disclosure It is the Trust's policy to provide full, fair, accurate, timely, and understandable disclosure in reports and documents that the Trust files with, or submits to, the SEC and in any other public communications by the Trust. The Trust has designed and implemented Disclosure Controls and Procedures to carry out this policy. Officers are expected to use their best efforts to promote, facilitate, and prepare full, fair, accurate, timely, and understandable disclosure in all reports and documents that the Trust files with, or submits to, the SEC and in any other public communications by the Trust. Officers must review the Trust's Disclosure Controls and Procedures to ensure they are aware of and carry out their duties and responsibilities in accordance with the Disclosure Controls and Procedures and the public reporting obligations of the Trust. Officers are responsible for monitoring the integrity and effectiveness of the Trust's Disclosure Controls and Procedures. 3. Compliance with Applicable Laws, Rules and Regulations Officers are expected to know, respect and comply with all laws, rules and regulations applicable to the conduct of the Trust's business. If an Officer is in doubt about the legality or propriety of an action, business practice or policy, the Officer should seek advice from the Officer's supervisor or the Trust's legal counsel. In the performance of their work, Officers must not knowingly be a party to any illegal activity or engage in acts that are discreditable to the Trust. Officers are expected to promote the Trust's compliance with applicable laws, rules and regulations. To promote such compliance, Officers may establish and maintain mechanisms to educate employees carrying out the finance and compliance functions of the Trust about any applicable laws, rules or regulations that affect the operation of the finance and compliance functions and the Trust generally. 4. Reporting of Illegal or Unethical Behavior Officers should promptly report any conduct or actions by an Officer that do not comply with the law or with this Code. Officers and the Trust shall adhere to the following reporting procedures: (i) Any Officer who questions whether a situation, activity or practice is acceptable must immediately report such practice to the Principal Executive Officer of the Trust (or to an Officer who is the functional equivalent of this position) or to the Trust's legal counsel. The person receiving the report shall consider the matter and respond to the Officer within a reasonable amount of time. (ii) If the Officer is not satisfied with the response of the Principal Executive Officer or counsel, the Officer must report the matter to the Chairman of the Audit Committee. If the Chairman is unavailable, the Officer may report the matter to any other member of the Audit Committee. The person receiving the report shall consider the matter, refer it to the full Audit Committee if he or she deems appropriate, and respond to the Officer within a reasonable amount of time. (iii) If, after receiving a response, the Officer concludes that appropriate action was not taken, he or she should consider any responsibility that may exist to communicate to third parties, such as regulatory authorities or the Trust's independent auditor. In this matter, the Officer may wish to consult with his or her own legal counsel. (iv) The Audit Committee and the Trust will not be responsible for monitoring or enforcing this reporting of violations policy, but rather each Officer is responsible for self-compliance with this reporting of violations policy. (v) To the extent possible and as allowed by law, reports will be treated as confidential. (vi) If the Audit Committee determines that an Officer violated this Code, failed to report a known or suspected violation of this Code, or provided intentionally false or malicious information in connection with an alleged violation of this Code, the Trust may take disciplinary action against any such Officer to the extent the Audit Committee deems appropriate. No Officer will be disciplined for reporting a concern in good faith. (vii) The Trust and the Audit Committee may report violations of the law to the appropriate authorities. 5. Accountability and Applicability All Officers will be held accountable for adherence to this Code. On an annual basis, within 30 days of the beginning of each calendar year, each Officer shall certify in writing his or her receipt, familiarity and commitment to compliance with this Code, by signing the Acknowledgment Form (Appendix A to this Code). This Code is applicable to all Officers, regardless of whether such persons are employed by the Trust or a third party. If an Officer is aware of a person ("Potential Officer") who may be considered an Officer as defined by this Code, the Officer should inform legal counsel to the Trust of such Potential Officer so that a determination can be made regarding whether such Potential Officer has completed or should complete an Acknowledgment Form. However, the absence of such a determination will not be deemed to relieve any person of his or her duties under this Code. 6. Disclosure of this Code This Code shall be disclosed by at least one of the following methods in the manner prescribed by the SEC, unless otherwise required by law: (i) by filing a copy of the Code with the SEC; (ii) by posting the text of the Code on the Trust's website; or (iii) by providing, without charge, a copy of the Code to any person upon request. 7. Waivers Any waiver of this Code, including an implicit waiver, that has been granted to an Officer, may be made only by the Board or a committee of the Board to which such responsibility has been delegated, and must be disclosed by the Trust in the manner prescribed by law and as set forth above in Section 6 (Disclosure of this Code). 8. Amendments This Code may be amended by the affirmative vote of a majority of the Board. Any amendment of this Code, must be disclosed by the Trust in the manner prescribed by law and as set forth above in Section 6 (Disclosure of this Code), unless such amendment is deemed to be technical, administrative, or otherwise non-substantive. Any amendments to this Code will be provided to the Officers. Approved by the Board of Trustees on June 24, 2003. Appendix A PACIFIC CAPITAL FUNDS Certification and Acknowledgment of Receipt of Supplemental Code of Ethics for Principal Officers and Senior Financial Officers I acknowledge and certify that I have received a copy of the Pacific Capital Funds' Supplemental Code of Ethics for Principal Officers and Senior Financial Officers (the "Code"). I understand and agree that it is my responsibility to read and familiarize myself with the policies and procedures contained in the Code and to abide by those policies and procedures. I acknowledge my commitment to comply with the Code. ___________________________________ _____________________________ Officer Name (Please Print) Officer Signature _____________________________ Date EX-99.CERT 4 dex99cert.txt 302 CERTIFICATIONS Exhibit 99.CERT CERTIFICATIONS I, William P. Henry, Jr., certify that: 1. I have reviewed this report on Form N-CSR of Pacific Capital Funds (the "registrant"); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. October 1, 2003 /s/ William P. Henry, Jr. - --------------- ------------------------------ Date William P. Henry, Jr. President, Pacific Capital Funds CERTIFICATIONS I, Nadeem Yousaf, certify that: 1. I have reviewed this report on Form N-CSR of Pacific Capital Funds (the "registrant"); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. October 1, 2003 /S/ Nadeem Yousaf - ---------------- -------------------------------- Date Nadeem Yousaf Treasurer, Pacific Capital Funds EX-99.906CERT 5 dex99906cert.txt 906 CERTIFICATIONS Exhibit 99.906CERT This certification is provided pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. (S) 1350, and accompanies the report on Form N-CSR for the period ended July 31, 2003 of Pacific Capital Funds (the "Registrant"). Each of the undersigned, being the Principal Executive Officer and Principal Financial Officer of the Registrant, hereby certifies that, to such officer's knowledge,: 1. the Form N-CSR fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 ( 15 U.S.C. 78m(a) or 78o(d)); and 2. the information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant. October 1, 2003 - ----------------- Date /s/ William P. Henry, Jr. ------------------------------------- William P. Henry, Jr. President, Pacific Capital Funds /s/ Nadeem Yousaf ------------------------------------- Nadeem Yousaf Treasurer, Pacific Capital Funds A signed original of this written statement required by Section 906 has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----