N-CSRS 1 cni_ncsrs0308combined.txt CNI CHARTER FUNDS, SAR 0308 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 811-07923 CNI CHARTER FUNDS (Exact name of registrant as specified in charter) ________ 400 North Roxbury Drive Beverly Hills, CA 90210 (Address of principal executive offices) (Zip code) SEI Investments Distributors 1 Freedom Valley Drive Oaks, PA 19456 (Name and address of agent for service) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 1-888-889-0799 DATE OF FISCAL YEAR END: SEPTEMBER 30, 2008 DATE OF REPORTING PERIOD: MARCH 31, 2008 ITEM 1. REPORTS TO STOCKHOLDERS. CNI CHARTER FUNDS(SM) [LOGO](R) [GRAPHIC OMITTED] March 31, 2008 2008 SEMI-ANNUAL REPORT Large Cap Value Equity Fund Large Cap Growth Equity Fund RCB Small Cap Value Fund Multi-Asset Fund Corporate Bond Fund Government Bond Fund California Tax Exempt Bond Fund High Yield Bond Fund Prime Money Market Fund Government Money Market Fund California Tax Exempt Money Market Fund [GRAPHIC OMITTED] This report and the financial statements contained herein are provided for the general information of the shareholders of the CNI Charter Funds. This report is not authorized for distribution to prospective investors in the CNI Charter Funds unless preceded or accompanied by an effective prospectus. Please remember that past performance is no guarantee of future results. Shares of CNI Charter Funds are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC or any other agency and involve investment risks, including the possible loss of the principal amount invested. TABLE OF CONTENTS CNI Charter Funds Semi-Annual Report 2 Letter to Our Shareholders 4 Equity Funds Investment Adviser's Report 5 Fixed Income Funds Investment Adviser's Report 6 Schedules of Investments 48 Statements of Assets & Liabilities 51 Statements of Operations 54 Statements of Changes in Net Assets 58 Financial Highlights 61 Notes to Financial Statements 68 Disclosure of Fund Expenses 70 Approval of Investment Advisory Agreements -------------------------------------------------------------------------------- The Funds file their complete schedules of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q within sixty days after the end of the period. The Funds' Form N-Q is available on the Commission's website at http://www.sec.gov, and may be reviewed and copied at the Commission's Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.The most current Form N-Q is also available on the Funds' website at www.cnicharterfunds.com and without charge, upon request, by calling 1-888-889-0799. A description of the policies and procedures that the Funds use to determine how to vote proxies relating to the Funds' portfolio securities, and information on how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ending June 30 is available (1) without charge, upon request, by calling 1-888-889-0799, (2) on the Funds' website at www.cnicharterfunds.com, and (3) on the Securities and Exchange Commission's website at www.sec.gov. CNI CHARTER FUNDS | PAGE 1 letter to our shareholders MARCH 31, 2008 -------------------------------------------------------------------------------- We are pleased to provide you with the CNI Charter Funds Semi-Annual Report for the six months ended March 31, 2008, a period in which a slowdown in U.S. economic growth negatively affected both domestic and international equity markets. Most fixed income investors enjoyed positive gains, however, as the Federal Reserve lowered short-term interest rates. The underlying investment philosophy of CNI Charter Funds is to pursue the long-term goals and objectives specified for each of the Funds without being swayed by short-term trends and fads. All Funds are managed with an active yet disciplined style that seeks to achieve competitive rates of return consistent with their respective, prescribed risk parameters. City National Asset Management, Inc., as Investment Manager to the Funds, utilizes in-depth research that takes advantage of the most advanced investment technology, fundamental valuation, and quantitative tools to determine the most attractive sectors and securities within each Fund's area of concentration. This approach has served shareholders well overall during the complex economic, financial, and geopolitical environment we encountered in the six months ended March 31, 2008. The six months ended March 31, 2008 produced negative returns in most equity markets, both domestically and internationally. Fixed income securities, as measured by the Lehman Brothers Aggregate Bond Index showed healthy, albeit single digit, gains for the period overall. This was not evident across all fixed income sectors as the more risky "high yield" securities lost ground as well. -------------------------------------------------------------------------------- Six-Month October 2007 - Index Watch: March 2008 EQUITIES: S&P 500 Stock Index ................................................ - 12.5% Dow Jones Industrials .............................................. - 10.6% NASDAQ ............................................................. - 15.3% Russell 2000 Value Index ........................................... - 13.3% MSCI EAFE Index .................................................... - 10.5% BONDS: Lehman Brothers Aggregate Bond Index: .............................. + 5.1% Citigroup High Yield Market Index .................................. - 4.2% -------------------------------------------------------------------------------- The economic landscape continued to deteriorate over this time period, with many economists fearing the U.S. actually entered a recession. The consensus for real economic growth this calendar year is forecast to be 1.4%, with most of that growth occurring in the second half of the year. Corporate profit growth is expected to be negative this year (-2.7%) but return to a positive 5.2% during 2009. Inflation has remained relatively high but is expected to slow to a 2% rate by the fourth quarter of this year. The Federal Open Market Committee continued to lower rates during the past six months (currently at 2.0%) in order to stimulate growth and increase liquidity. The U.S. Treasury yield curve (i.e., the curve of yields of Treasury Securities with differing maturity dates) steepened over this time period due to the Fed's aggressive easing. The-3 month T-bill dropped 250 basis points over this period while the 10-year bond dropped a little over 110 basis points. As of March 31, the 3-month T-bill yielded 1.3% and the 10-year bond yielded 3.4%. Most expect this spread between the 3-month and 10-year bond to remain unchanged during the remainder of 2008. The U.S. Dollar continued to post losses versus the Euro and Yen but gained against the Pound Sterling over this past six months. The Dollar should appreciate later this year, however, as economic growth in the U.S. stabilizes and foreign economies face the prospect of slower growth. CNI CHARTER FUND PERFORMANCE AND HIGHLIGHTS (ALL RETURNS LISTED REFER TO INSTITUTIONAL CLASS SHARES) By adhering to our basic investment discipline and maintaining the appropriate amount of risk control in the various portfolios, the Funds continue to provide returns that are competitive in their respective investment arenas. Returns for three of the four bond-oriented Funds were positive. The CORPORATE BOND FUND returned 3.7%, CNI CHARTER FUNDS | PAGE 2 -------------------------------------------------------------------------------- the GOVERNMENT BOND FUND returned 4.4%, and the CALIFORNIA TAX EXEMPT BOND FUND gained 1.7%. The HIGH YIELD BOND FUND lost 4.1% during the six-month period. All of the equity-oriented Funds lost ground during the six-month period as one would expect given the negative economic environment. The LARGE CAP VALUE EQUITY FUND fell 14.0%, the LARGE CAP GROWTH EQUITY FUND lost 8.3%, and the RCB SMALL CAP VALUE FUND lost 24.8%. Lastly, all three Money Market Funds steered clear of liquidity and credit concerns to turn in competitive yields for the six months ending March 31, 2008. The PRIME MONEY MARKET FUND gained 1.9%, the GOVERNMENT MONEY MARKET FUND gained 1.8% and the CALIFORNIA TAX EXEMPT MONEY MARKET FUND rose 1.1%. The following pages contain important information and details on the assets and financial condition of the Funds. Please read them carefully and if you have any questions about this report or CNI Charter Funds, please call your investment professional or contact us at (888) 889-0799. Thank you for choosing CNI Charter Funds. Sincerely, /s/ Richard A. Weiss Richard A. Weiss PRESIDENT CITY NATIONAL ASSET MANAGEMENT, INC. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. CERTAIN SHAREHOLDERS MAY BE SUBJECT TO THE ALTERNATIVE MINIMUM TAX (AMT). FEDERAL INCOME TAX RULES APPLY TO ANY CAPITAL GAIN DISTRIBUTIONS. FUND EXPENSES HAVE BEEN WAIVED DURING THE PERIOD ON WHICH THE PERFORMANCE IS BASED. WITHOUT WAIVERS, PERFORMANCE WOULD BE LOWER. THIS INFORMATION MUST BE PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS. PLEASE READ THE PROSPECTUS CAREFULLY BEFORE INVESTING. INVESTING IN MUTUAL FUNDS INVOLVES RISK, INCLUDING POSSIBLE LOSS OF PRINCIPAL. IN ADDITIONAL TO THE NORMAL RISKS ASSOCIATED WITH INVESTING, INVESTMENTS IN SMALLER COMPANIES TYPICALLY EXHIBIT HIGHER VOLATILITY. AN INVESTMENT IN THE FUNDS IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. -------------------------------------------------------------------------------- *NOT FDIC INSURED *NO BANK GUARANTEE *MAY LOSE VALUE -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- INTRODUCING THE CNI CHARTER MULTI-ASSET FUND -------------------------------------------------------------------------------- High market volatility makes many investors turn to cash. But by doing so, they often miss out on market opportunity. Now the CNI Charter Multi-Asset Fund (which commenced operations on 10/1/07) offers a way to potentially lessen the impact of market downturns and "stay in the game." Designed for investors who seek limited downside risk and positive returns over the long term, this fund offers distinct advantages: o ACTIVE RISK CONTROL o EXCEPTIONAL DIVERSIFICATION o REFINED ASSET ALLOCATION o PROFESSIONAL MANAGEMENT o LIQUIDITY ...all wrapped up in the convenience of a single fund. For more information about the Multi-Asset Fund or other CNI Charter Funds visit www.cnicharterfunds.com. -------------------------------------------------------------------------------- CNI CHARTER FUNDS | PAGE 3 investment adviser's report MARCH 31, 2008 -------------------------------------------------------------------------------- EQUITY FUNDS The equity market, as measured by the S&P 500, fell 12.5% over the six months ending March 31, 2008. The market reached an all time high in early September 2007, returning to price levels not seen in over seven and a half years. That was the high point of the period as prices proceeded to fall due to concerns over the mortgage and housing market as well as the effects of a slowing economy. During this time period, growth indices generally outperformed value indices, on a relative basis, with the S&P 500/Citigroup Growth Index down 11.1% and the S&P 500/Citigroup Value Index down 13.8%. All of the CNI Charter Equity Funds lost ground in this negative environment, but most remained competitive relative to their investment and competitive benchmarks. ALL RETURNS FOR CNI CHARTER FUNDS STATED BELOW ARE FOR INSTITUTIONAL CLASS SHARES: o The LARGE CAP GROWTH EQUITY FUND fell 8.3%. This performance beat both the S&P 500/Citigroup Growth Index return of -11.1% and the Lipper Large Cap Growth Funds Classification return of -11.7%. o The LARGE CAP VALUE EQUITY FUND lost 14.0%. This performance slightly lagged behind the S&P 500/Citigroup Value Index return of -13.8% and the Lipper Large Cap Value Funds Classification return of -13.7%. o The RCB SMALL CAP VALUE FUND tumbled 24.8%. This performance trailed the Russell 2000 Value Index and the Lipper Small Cap Value Funds Classification, each of which returned -13.3% over this six-month period. LOOKING FORWARD The economy is expected to contract until the middle of the year. The Federal Reserve has lowered short-term rates over the past six months to address both the economic growth and credit/liquidity concerns. This monetary easing has most economists believing that the level of economic activity will start to increase over the second half of 2008. Earnings have been negatively affected by Financial and Consumer Discretionary stocks, but remain positive outside of those sectors. Earnings yields on equities remain attractive relative to fixed income securities and suggest that equities provide a buying opportunity at these price levels. Still, caution remains in the marketplace as equity investors continue to monitor corporate earnings and look for additional signs that better times lay ahead for the equity market. The CNI Charter Equity Funds continue to provide a disciplined investment approach with the constant goal of achieving superior investment results. Sincerely, /s/ Brian L. Garbe Brian L. Garbe DIRECTOR OF RESEARCH CITY NATIONAL ASSET MANAGEMENT, INC. THIS MATERIAL REPRESENTS THE MANAGER'S ASSESSMENT OF THE PORTFOLIO AND MARKET ENVIRONMENT AT A SPECIFIC POINT IN TIME AND SHOULD NOT BE RELIED UPON BY THE READER AS RESEARCH OR INVESTMENT ADVICE. CNI CHARTER FUNDS | PAGE 4 investment adviser's report MARCH 31, 2008 -------------------------------------------------------------------------------- FIXED INCOME FUNDS The credit markets were front and center during the first quarter of 2008 as the problems which began with sub-prime mortgages continued to spread. Concerns mounted about worldwide structural liquidity and the Federal Reserve Board had its hands full on a number of fronts. Each Fixed Income fund in the CNI Charter Fund family was appropriately positioned and we have weathered the credit and liquidity crunch reasonably well thus far. However, the stresses that have appeared in the credit markets have not been resolved, and we would not be surprised to see additional crisis situations in the months ahead. On the monetary front, the Federal Open Market Committee (FOMC) lowered the bank borrowing rate (Fed Funds Rate) by 2% in the first quarter in an effort to stimulate the economy. The Fed also established a "Primary Dealer Credit Facility" that allows non-bank/primary dealers to borrow directly from the Fed at the discount rate (currently 2.5%) in order to bolster liquidity in the financial system. Federal regulators also have allowed the Government Sponsored Enterprises (GSE) and Federal Home Loan Bank to add more mortgages to their portfolios in order to mitigate counterparty risk and provide further liquidity for mortgage securities. Various proposals aimed at helping homeowners facing default are currently being discussed in Washington D.C.. STRATEGIES OUTLOOK FOR BOND FUNDS U.S. government securities benefited from strong demand in the first quarter, while corporate bonds were hurt as investor anxiety produced higher risk premiums, wider yield spreads and general under-performance for this sector. While our bond funds were of course affected by the intense market volatility, the disciplined investment process and active risk management of the CNI Charter Funds helped us steer clear of problems that damaged other fund families. We responded to mounting inflationary pressures and the steepening yield curve by reducing our average maturities modestly. We also anticipate corporate spreads to narrow and corporate bonds to perform better for most of the credit crunch is behind us. Strategically, in the CORPORATE BOND FUND, we continue to avoid lower quality credits and those companies highly levered to the consumer given our concern of the weakness in the economy. We are maintaining a higher average quality posture than the Lehman Intermediate Corporate Index in this environment. The GOVERNMENT BOND FUND continues to benefit from attractive yields offered by agency securities compared with yields of U.S. Treasuries. We are utilizing U.S. Government Agency issue mortgages to capture higher yields without taking on credit risk. The CALIFORNIA TAX EXEMPT BOND FUND maintains a slightly longer maturity profile than its benchmark while keeping credit quality high. This positioning should continue to benefit the Fund by protecting investors from reinvestment risk while also positioning it for a steeper yield curve by reducing maturities outside of 10 years. In this slow growth environment, the HIGH YIELD BOND FUND has come under pressure with the credit crunch and risk premiums in the market. Going forward, this strategy should benefit when yield spreads narrow as most of the credit crisis is behind us. This Fund retains its strategic posture of excellent sector allocation as well as a quality bias versus its competitors. STRATEGIC OUTLOOK FOR MONEY MARKET FUNDS Our outlook for our investment grade strategies is to be diligent in risk management and position for a steepening yield curve as the economy remains soft and inflation remains a concern going forward. Sincerely, /s/ Rodney J. Olea Rodney J. Olea DIRECTOR OF FIXED INCOME CITY NATIONAL ASSET MANAGEMENT, INC. THIS MATERIAL REPRESENTS THE MANAGER'S ASSESSMENT OF THE PORTFOLIO AND MARKET ENVIRONMENT AT A SPECIFIC POINT IN TIME AND SHOULD NOT BE RELIED UPON BY THE READER AS RESEARCH OR INVESTMENT ADVICE. CNI CHARTER FUNDS | PAGE 5 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- LARGE CAP VALUE EQUITY FUND SECTOR WEIGHTINGS*: [THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.] Financials 26.5% Industrials 12.3% Consumer Staples 12.2% Healthcare 11.0% Utilities 8.9% Telecommunication Services 6.8% Consumer Discretionary 6.3% Information Technology 4.4% Energy 4.2% Materials 3.9% Short-Term Investments 3.5% * Percentages based on total investments. -------------------------------------------------------------------------------- DESCRIPTION SHARES VALUE (000) -------------------------------------------------------------------------------- COMMON STOCK [97.6%] AEROSPACE & DEFENSE [4.6%] Goodrich 16,400 $ 943 Lockheed Martin 13,000 1,291 Northrop Grumman 17,000 1,323 Raytheon 25,200 1,628 ----------------------------------------------------------------------------- TOTAL AEROSPACE & DEFENSE 5,185 ============================================================================= AIR FREIGHT & LOGISTICS [0.8%] FedEx 9,600 890 ============================================================================= AUTO COMPONENTS [0.2%] Johnson Controls 7,900 267 ============================================================================= BEVERAGES [3.2%] Coca-Cola 29,600 1,802 Coca-Cola Enterprises 20,000 484 Molson Coors Brewing, Cl B 15,400 809 Pepsi Bottling Group 15,000 509 ----------------------------------------------------------------------------- TOTAL BEVERAGES 3,604 ============================================================================= BUILDING PRODUCTS [0.3%] Masco 16,500 327 ============================================================================= CAPITAL MARKETS [3.8%] Bank of New York Mellon 6,500 271 Goldman Sachs Group 11,200 1,852 Morgan Stanley 27,000 1,234 State Street 11,200 885 ----------------------------------------------------------------------------- TOTAL CAPITAL MARKETS 4,242 ============================================================================= DESCRIPTION SHARES VALUE (000) -------------------------------------------------------------------------------- CHEMICALS [2.4%] Dow Chemical 36,000 $ 1,327 PPG Industries 14,000 847 Rohm & Haas 8,600 465 ----------------------------------------------------------------------------- TOTAL CHEMICALS 2,639 ============================================================================= COMMERCIAL BANKS [6.3%] BB&T 14,500 465 Keycorp 10,400 228 PNC Financial Services Group 14,300 938 SunTrust Banks 12,400 684 US Bancorp 48,000 1,553 Wachovia 26,400 713 Wells Fargo 84,960 2,472 ----------------------------------------------------------------------------- TOTAL COMMERCIAL BANKS 7,053 ============================================================================= COMMUNICATIONS EQUIPMENT [0.6%] Corning 27,200 654 ============================================================================= COMPUTERS & PERIPHERALS [1.1%] Hewlett-Packard 27,700 1,265 ============================================================================= CONTAINERS & PACKAGING [0.5%] Ball 11,400 524 ============================================================================= DIVERSIFIED FINANCIAL SERVICES [6.6%] Bank of America 75,896 2,877 Citigroup 42,786 917 JPMorgan Chase 83,200 3,573 ----------------------------------------------------------------------------- TOTAL DIVERSIFIED FINANCIAL SERVICES 7,367 ============================================================================= DIVERSIFIED TELECOMMUNICATION SERVICES [6.8%] AT&T 119,417 4,574 Verizon Communications 83,509 3,044 ----------------------------------------------------------------------------- TOTAL DIVERSIFIED TELECOMMUNICATION SERVICES 7,618 ============================================================================= ELECTRIC UTILITIES [4.7%] Duke Energy 22,000 393 Edison International 26,500 1,299 Entergy 12,200 1,331 FPL Group 17,300 1,085 PPL 24,100 1,107 ----------------------------------------------------------------------------- TOTAL ELECTRIC UTILITIES 5,215 ============================================================================= SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 6 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- LARGE CAP VALUE EQUITY FUND (CONTINUED) DESCRIPTION SHARES VALUE (000) -------------------------------------------------------------------------------- FOOD & STAPLES RETAILING [4.6%] Costco Wholesale 8,700 $ 565 Kroger 40,300 1,024 Safeway 31,600 927 Supervalu 25,100 753 Wal-Mart Stores 35,500 1,870 ----------------------------------------------------------------------------- TOTAL FOOD & STAPLES RETAILING 5,139 ============================================================================= FOOD PRODUCTS [2.5%] Archer-Daniels-Midland 22,400 922 ConAgra Foods 20,000 479 General Mills 13,200 791 Sara Lee 42,500 594 ----------------------------------------------------------------------------- TOTAL FOOD PRODUCTS 2,786 ============================================================================= HEALTH CARE EQUIPMENT & SUPPLIES [1.0%] Baxter International 19,400 1,122 ============================================================================= HEALTH CARE PROVIDERS & SERVICES [4.1%] Aetna 27,600 1,161 AmerisourceBergen, Cl A 15,800 647 Cigna 20,500 832 McKesson 23,600 1,236 UnitedHealth Group 11,200 385 WellPoint* 7,200 318 ----------------------------------------------------------------------------- TOTAL HEALTH CARE PROVIDERS & SERVICES 4,579 ============================================================================= HOUSEHOLD DURABLES [0.7%] Whirlpool 8,700 755 ============================================================================= HOUSEHOLD PRODUCTS [2.0%] Procter & Gamble 31,500 2,207 ============================================================================= INDEPENDENT POWER PRODUCERS & ENERGY TRADERS [1.1%] Constellation Energy Group 13,400 1,183 ============================================================================= INDUSTRIAL CONGLOMERATES [2.7%] General Electric 47,500 1,758 Tyco International 27,600 1,216 ----------------------------------------------------------------------------- TOTAL INDUSTRIAL CONGLOMERATES 2,974 ============================================================================= INSURANCE [9.5%] ACE 24,600 1,355 Aflac 9,600 624 DESCRIPTION SHARES VALUE (000) -------------------------------------------------------------------------------- American International Group 36,400 $ 1,574 Assurant 9,600 584 Chubb 27,100 1,341 Hartford Financial Services Group 12,300 932 MetLife 17,100 1,030 Prudential Financial 15,300 1,197 Travelers 27,000 1,292 Unum Group 31,000 682 ----------------------------------------------------------------------------- TOTAL INSURANCE 10,611 ============================================================================= IT SERVICES [0.6%] Electronic Data Systems 38,200 636 ============================================================================= LIFE SCIENCES TOOLS & SERVICES [0.9%] PerkinElmer 42,900 1,040 ============================================================================= MACHINERY [1.3%] Caterpillar 10,600 830 Eaton 8,400 669 ----------------------------------------------------------------------------- TOTAL MACHINERY 1,499 ============================================================================= MEDIA [3.5%] CBS, Cl B 38,750 856 Comcast, Cl A 36,200 700 Time Warner 83,800 1,175 Walt Disney 35,900 1,126 ----------------------------------------------------------------------------- TOTAL MEDIA 3,857 ============================================================================= MULTILINE RETAIL [1.0%] Macy's 12,400 286 Target 15,500 785 ----------------------------------------------------------------------------- TOTAL MULTILINE RETAIL 1,071 ============================================================================= MULTI-UTILITIES [3.2%] Dominion Resources 16,200 661 PG&E 19,600 722 Public Service Enterprise Group 27,000 1,085 Sempra Energy 20,700 1,103 ----------------------------------------------------------------------------- TOTAL MULTI-UTILITIES 3,571 ============================================================================= OFFICE ELECTRONICS [0.2%] Xerox 12,500 187 ============================================================================= SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 7 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- LARGE CAP VALUE EQUITY FUND (CONCLUDED) DESCRIPTION SHARES VALUE (000) -------------------------------------------------------------------------------- OIL, GAS & CONSUMABLE FUELS [4.2%] Chevron 20,240 $ 1,728 ConocoPhillips 16,080 1,225 Occidental Petroleum 24,400 1,785 ----------------------------------------------------------------------------- TOTAL OIL, GAS & CONSUMABLE FUELS 4,738 ============================================================================= PAPER & FOREST PRODUCTS [1.1%] International Paper 24,500 667 MeadWestvaco 20,400 555 ----------------------------------------------------------------------------- TOTAL PAPER & FOREST PRODUCTS 1,222 ============================================================================= PHARMACEUTICALS [5.1%] Abbott Laboratories 14,200 783 Bristol-Myers Squibb 66,000 1,406 Merck 22,000 835 Pfizer 95,500 1,999 Wyeth 15,500 647 ----------------------------------------------------------------------------- TOTAL PHARMACEUTICALS 5,670 ============================================================================= REAL ESTATE INVESTMENT TRUSTS [0.6%] Host Hotels & Resorts 41,000 653 ============================================================================= ROAD & RAIL [2.7%] CSX 31,400 1,761 Norfolk Southern 12,600 684 Union Pacific 4,300 539 ----------------------------------------------------------------------------- TOTAL ROAD & RAIL 2,984 ============================================================================= SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT [1.1%] Applied Materials 26,500 517 Texas Instruments 24,000 679 ----------------------------------------------------------------------------- TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 1,196 ============================================================================= SOFTWARE [1.0%] Microsoft 37,500 1,064 ============================================================================= SPECIALTY RETAIL [0.8%] Best Buy 12,200 506 Sherwin-Williams 8,200 418 ----------------------------------------------------------------------------- TOTAL SPECIALTY RETAIL 924 ============================================================================= DESCRIPTION SHARES VALUE (000) -------------------------------------------------------------------------------- TEXTILES, APPAREL & LUXURY GOODS [0.2%] Jones Apparel Group 20,300 $ 272 ============================================================================= TOTAL COMMON STOCK (Cost $103,048) 108,790 ========================================================================= CASH EQUIVALENTS [3.6%] Fidelity Institutional Domestic Money Market Portfolio, Cl I, 3.140%** 2,085,213 2,085 Goldman Sachs Financial Square Funds - Government Fund, 2.640%** 1,886,223 1,887 ----------------------------------------------------------------------------- TOTAL CASH EQUIVALENTS (Cost $3,972) 3,972 ========================================================================= TOTAL INVESTMENTS [101.2%] (Cost $107,020) $ 112,762 ========================================================================= PERCENTAGES ARE BASED ON NET ASSETS OF $111,454 ($ THOUSANDS). * NON-INCOME PRODUCING SECURITY. ** THE RATE SHOWN REPRESENTS THE 7-DAY EFFECTIVE YIELD AS OF MARCH 31, 2008. CL -- CLASS SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 8 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- LARGE CAP GROWTH EQUITY FUND SECTOR WEIGHTINGS*: [THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.] Energy 22.3% Information Technology 21.4% Healthcare 16.6% Consumer Staples 13.8% Industrials 7.1% Financials 6.6% Consumer Discretionary 5.8% Materials 2.9% Utilities 2.7% Short-Term Investments 0.8% * Percentages based on total investments. -------------------------------------------------------------------------------- DESCRIPTION SHARES VALUE (000) -------------------------------------------------------------------------------- COMMON STOCK [97.7%] AEROSPACE & DEFENSE [3.1%] Boeing 6,000 $ 446 L-3 Communications Holdings 3,000 328 Lockheed Martin 4,100 407 Precision Castparts 3,600 368 ----------------------------------------------------------------------------- TOTAL AEROSPACE & DEFENSE 1,549 ============================================================================= BEVERAGES [3.0%] Coca-Cola 7,600 463 PepsiCo 14,500 1,047 ----------------------------------------------------------------------------- TOTAL BEVERAGES 1,510 ============================================================================= BIOTECHNOLOGY [5.0%] Biogen Idec* 7,000 432 Genentech* 5,800 471 Genzyme-General Division* 6,500 484 Gilead Sciences* 22,100 1,139 ----------------------------------------------------------------------------- TOTAL BIOTECHNOLOGY 2,526 ============================================================================= CAPITAL MARKETS [2.7%] Franklin Resources 4,500 437 Goldman Sachs Group 3,400 562 T Rowe Price Group 7,000 350 ----------------------------------------------------------------------------- TOTAL CAPITAL MARKETS 1,349 ============================================================================= CHEMICALS [1.0%] Hercules 11,400 209 Monsanto 2,700 301 ----------------------------------------------------------------------------- TOTAL CHEMICALS 510 ============================================================================= DESCRIPTION SHARES VALUE (000) -------------------------------------------------------------------------------- COMMERCIAL BANKS [0.2%] Synovus Financial 8,300 $ 92 ============================================================================= COMMERCIAL SERVICES & SUPPLIES [1.0%] Robert Half International 12,400 319 RR Donnelley & Sons 6,300 191 ----------------------------------------------------------------------------- TOTAL COMMERCIAL SERVICES & SUPPLIES 510 ============================================================================= COMMUNICATIONS EQUIPMENT [2.1%] Qualcomm 25,500 1,045 ============================================================================= COMPUTERS & PERIPHERALS [4.5%] Apple* 6,375 915 Hewlett-Packard 3,823 175 IBM 10,200 1,174 ----------------------------------------------------------------------------- TOTAL COMPUTERS & PERIPHERALS 2,264 ============================================================================= DIVERSIFIED FINANCIAL SERVICES [1.1%] CME Group, Cl A 1,200 563 ============================================================================= ELECTRIC UTILITIES [1.2%] Edison International 12,300 603 ============================================================================= ENERGY EQUIPMENT & SERVICES [8.3%] Baker Hughes 4,500 308 BJ Services 11,300 322 ENSCO International 10,300 645 National Oilwell Varco* 6,100 356 Noble 15,100 750 Schlumberger 11,300 983 Smith International 6,200 398 Transocean 3,428 464 ----------------------------------------------------------------------------- TOTAL ENERGY EQUIPMENT & SERVICES 4,226 ============================================================================= FOOD & STAPLES RETAILING [3.8%] Sysco 16,100 467 Wal-Mart Stores 27,575 1,453 ----------------------------------------------------------------------------- TOTAL FOOD & STAPLES RETAILING 1,920 ============================================================================= FOOD PRODUCTS [2.8%] Campbell Soup 9,700 329 General Mills 4,300 258 Kellogg 16,200 851 ----------------------------------------------------------------------------- TOTAL FOOD PRODUCTS 1,438 ============================================================================= SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 9 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- LARGE CAP GROWTH EQUITY FUND (CONTINUED) DESCRIPTION SHARES VALUE (000) -------------------------------------------------------------------------------- HEALTH CARE EQUIPMENT & SUPPLIES [3.0%] Bard (C.R.) 3,200 $ 308 Stryker 12,800 833 Zimmer Holdings* 4,900 382 ----------------------------------------------------------------------------- TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 1,523 ============================================================================= HEALTH CARE PROVIDERS & SERVICES [2.2%] Cardinal Health 4,600 242 McKesson 4,300 225 UnitedHealth Group 18,700 642 ----------------------------------------------------------------------------- TOTAL HEALTH CARE PROVIDERS & SERVICES 1,109 ============================================================================= HEALTH CARE TECHNOLOGY [0.4%] Cerner* 4,900 183 ============================================================================= HOTELS, RESTAURANTS & LEISURE [0.1%] Starbucks* 4,400 77 ============================================================================= HOUSEHOLD PRODUCTS [4.0%] Colgate-Palmolive 10,400 810 Procter & Gamble 17,202 1,206 ----------------------------------------------------------------------------- TOTAL HOUSEHOLD PRODUCTS 2,016 ============================================================================= INDEPENDENT POWER PRODUCERS & ENERGY TRADERS [1.5%] AES* 15,000 250 Constellation Energy Group 5,600 494 ----------------------------------------------------------------------------- TOTAL INDEPENDENT POWER PRODUCERS & ENERGY TRADERS 744 ============================================================================= INSURANCE [2.0%] Aflac 6,600 429 American International Group 14,000 605 ----------------------------------------------------------------------------- TOTAL INSURANCE 1,034 ============================================================================= INTERNET & CATALOG RETAIL [0.6%] Amazon.Com* 4,400 314 ============================================================================= INTERNET SOFTWARE & SERVICES [4.1%] eBay* 21,175 632 Google, Cl A* 2,300 1,013 Yahoo!* 15,000 434 ----------------------------------------------------------------------------- TOTAL INTERNET SOFTWARE & SERVICES 2,079 ============================================================================= DESCRIPTION SHARES VALUE (000) -------------------------------------------------------------------------------- MACHINERY [2.9%] Caterpillar 10,700 $ 838 Danaher 4,100 312 Manitowoc 7,900 322 ----------------------------------------------------------------------------- TOTAL MACHINERY 1,472 ============================================================================= MEDIA [2.1%] Comcast, Cl A 18,150 351 DIRECTV Group* 12,700 315 McGraw-Hill 5,300 196 Time Warner 13,100 183 ----------------------------------------------------------------------------- TOTAL MEDIA 1,045 ============================================================================= METALS & MINING [1.8%] Freeport-McMoRan Copper & Gold 6,800 654 Nucor 4,200 285 ----------------------------------------------------------------------------- TOTAL METALS & MINING 939 ============================================================================= MULTILINE RETAIL [0.7%] Target 7,500 380 ============================================================================= OIL, GAS & CONSUMABLE FUELS [13.5%] Anadarko Petroleum 3,200 202 Apache 3,300 399 Chevron 18,000 1,536 Exxon Mobil 32,000 2,707 Occidental Petroleum 8,200 600 Sunoco 6,700 351 Valero Energy 2,000 98 XTO Energy 15,500 959 ----------------------------------------------------------------------------- TOTAL OIL, GAS & CONSUMABLE FUELS 6,852 ============================================================================= PHARMACEUTICALS [5.8%] Forest Laboratories* 2,200 88 Johnson & Johnson 25,164 1,632 Pfizer 26,400 553 Wyeth 16,050 670 ----------------------------------------------------------------------------- TOTAL PHARMACEUTICALS 2,943 ============================================================================= REAL ESTATE INVESTMENT TRUSTS [0.3%] Simon Property Group 1,500 139 ============================================================================= REAL ESTATE MANAGEMENT & DEVELOPMENT [0.2%] CB Richard Ellis Group, Cl A* 5,100 110 ============================================================================= SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 10 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- LARGE CAP GROWTH EQUITY FUND (CONCLUDED) DESCRIPTION SHARES VALUE (000) -------------------------------------------------------------------------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT [2.5%] Applied Materials 8,450 $ 165 Intel 11,700 248 MEMC Electronic Materials* 6,500 461 Texas Instruments 14,400 407 ----------------------------------------------------------------------------- TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 1,281 ============================================================================= SOFTWARE [7.9%] Adobe Systems* 10,100 359 Autodesk* 10,600 334 Citrix Systems* 8,275 243 Microsoft 57,180 1,623 Oracle* 43,265 846 Symantec* 37,700 626 ----------------------------------------------------------------------------- TOTAL SOFTWARE 4,031 ============================================================================= SPECIALTY RETAIL [1.8%] Autozone* 2,500 285 Best Buy 9,200 381 Lowe's 10,600 243 ----------------------------------------------------------------------------- TOTAL SPECIALTY RETAIL 909 ============================================================================= TEXTILES, APPAREL & LUXURY GOODS [0.5%] Coach* 8,800 265 ============================================================================= TOTAL COMMON STOCK (Cost $44,563) 49,550 ========================================================================= CASH EQUIVALENTS [0.8%] Fidelity Institutional Domestic Money Market Portfolio, Cl I, 3.140%** 112,796 113 Goldman Sachs Financial Square Funds - Government Fund, 2.640%** 291,637 292 ----------------------------------------------------------------------------- TOTAL CASH EQUIVALENTS (Cost $405) 405 ========================================================================= TOTAL INVESTMENTS [98.5%] (Cost $44,968) $ 49,955 ========================================================================= PERCENTAGES ARE BASED ON NET ASSETS OF $50,707 ($ THOUSANDS). * NON-INCOME PRODUCING SECURITY. ** THE RATE SHOWN REPRESENTS THE 7-DAY EFFECTIVE YIELD AS OF MARCH 31, 2008. CL -- CLASS SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 11 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- RCB SMALL CAP VALUE FUND SECTOR WEIGHTINGS*: [THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIALS.] Financials 28.0% Consumer Discretionary 20.7% Information Technology 10.2% Consumer Staples 9.5% Energy 9.3% Materials 6.8% Industrials 6.1% Short-Term Investment 4.3% Telecommunication Services 2.7% Healthcare 2.4% * Percentages based on total investments. -------------------------------------------------------------------------------- DESCRIPTION SHARES VALUE (000) -------------------------------------------------------------------------------- COMMON STOCK [93.0%] AUTO COMPONENTS [2.6%] GenTek* 34,615 $ 1,041 ============================================================================= CHEMICALS [2.3%] Spartech 107,800 911 ============================================================================= COMMERCIAL BANKS [1.5%] Boston Private Financial Holdings 58,500 620 ============================================================================= COMMERCIAL SERVICES & SUPPLIES [1.4%] PHH* 32,900 573 ============================================================================= DIVERSIFIED CONSUMER SERVICES [2.1%] Coinstar* 29,300 825 ============================================================================= ELECTRONIC EQUIPMENT [1.9%] LoJack* 60,000 758 ============================================================================= ENERGY EQUIPMENT & SERVICES [2.2%] Carbo Ceramics 22,100 886 ============================================================================= FOOD PRODUCTS [4.2%] Ralcorp Holdings* 28,700 1,669 ============================================================================= HOTELS, RESTAURANTS & LEISURE [8.4%] IHOP 33,700 1,614 Triarc, Cl B 250,000 1,728 ----------------------------------------------------------------------------- TOTAL HOTELS, RESTAURANTS & LEISURE 3,342 ============================================================================= HOUSEHOLD PRODUCTS [5.4%] Central Garden & Pet, Cl A* 484,400 2,151 ============================================================================= DESCRIPTION SHARES VALUE (000) -------------------------------------------------------------------------------- INSURANCE [16.3%] Alleghany* 4,794 $ 1,637 Conseco* 160,800 1,640 Hilb Rogal & Hobbs 26,725 841 White Mountains Insurance Group 5,000 2,400 ----------------------------------------------------------------------------- TOTAL INSURANCE 6,518 ============================================================================= INTERNET SOFTWARE & SERVICES [2.2%] United Online 85,200 900 ============================================================================= LIFE SCIENCES TOOLS & SERVICES [2.3%] PerkinElmer 38,700 939 ============================================================================= MACHINERY [4.4%] Actuant, Cl A 30,300 915 IDEX 27,600 847 ----------------------------------------------------------------------------- TOTAL MACHINERY 1,762 ============================================================================= MEDIA [8.5%] Cox Radio, Cl A* 66,500 790 Fisher Communications* 41,647 1,297 LodgeNet Interactive* 212,270 1,293 ----------------------------------------------------------------------------- TOTAL MEDIA 3,380 ============================================================================= METALS & MINING [1.9%] Novamerican Steel* 253,300 742 ============================================================================= MULTILINE RETAIL [1.8%] 99 Cents Only Stores* 75,000 742 ============================================================================= OIL, GAS & CONSUMABLE FUELS [7.1%] Edge Petroleum* 290,000 1,169 Rosetta Resources* 85,300 1,678 ----------------------------------------------------------------------------- TOTAL OIL, GAS & CONSUMABLE FUELS 2,847 ============================================================================= REAL ESTATE INVESTMENT TRUSTS (REITS) [7.7%] Annaly Capital Management 89,800 1,376 Capital Trust, Cl A 27,400 738 Chimera Investment 75,000 923 Deerfield Capital 26,507 37 ----------------------------------------------------------------------------- TOTAL REAL ESTATE INVESTMENT TRUSTS (REITS) 3,074 ============================================================================= SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 12 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- RCB SMALL CAP VALUE FUND (CONCLUDED) DESCRIPTION SHARES/FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- SOFTWARE [6.1%] Fair Isaac 75,400 $ 1,623 PLATO Learning* 279,700 819 ----------------------------------------------------------------------------- TOTAL SOFTWARE 2,442 ============================================================================= WIRELESS TELECOMMUNICATION SERVICES [2.7%] iPCS 45,500 1,062 ============================================================================= TOTAL COMMON STOCK (Cost $42,047) 37,184 ======================================================================= CORPORATE BONDS [2.8%] FINANCIAL SERVICES [2.5%] LaBranche (A) 9.500%, 05/15/09 $ 1,000 1,015 ============================================================================= LABORATORY EQUIPMENT [0.3%] Sea Containers, Ser B (B) 10.750%, 10/15/06 250 104 ============================================================================= TOTAL CORPORATE BONDS (Cost $1,256) 1,119 ======================================================================= REPURCHASE AGREEMENT (C) [4.3%] Morgan Stanley 4.500%, dated 03/31/08, to be repurchased on 04/01/08, repurchase price $1,731,654 (collateralized by U.S.Treasury obligations, ranging in par value) 1,731 1,731 ----------------------------------------------------------------------------- TOTAL REPURCHASE AGREEMENT (Cost $1,731) 1,731 ======================================================================= WARRANTS [0.1%] Novamerican Steel,* Expires 03/07/11 72,000 33 ----------------------------------------------------------------------------- TOTAL WARRANTS (Cost $104) 33 ======================================================================= TOTAL INVESTMENTS [100.2%] (Cost $45,138) $ 40,067 ======================================================================= DESCRIPTION -------------------------------------------------------------------------------- PERCENTAGES ARE BASED ON NET ASSETS OF $39,977 ($ THOUSANDS). * NON-INCOME PRODUCING SECURITY. (A) SECURITY EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT OF 1933.THIS SECURITY MAY BE RESOLD IN TRANSACTIONS EXEMPT FROM REGISTRATION NORMALLY TO QUALIFIED INSTITUTIONS. ON MARCH 31, 2008, THE VALUE OF THIS SECURITY AMOUNTED TO $1,015 (000), REPRESENTING 2.5% OF THE NET ASSETS OF THE FUND. (B) IN DEFAULT ON INTEREST PAYMENTS. (C) TRI-PARTY REPURCHASE AGREEMENT. CL -- CLASS SER -- SERIES SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 13 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- MULTI-ASSET FUND^ TYPE OF SECURITY WEIGHTINGS*: [THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.] Exchange Traded Funds 49.8% Cash Equivalent 15.4% Registered Investment Company 12.5% Affiliated Investment Funds 11.6% Commercial Paper 6.2% Repurchase Agreement 4.5% * Percentages based on total investments. -------------------------------------------------------------------------------- DESCRIPTION SHARES VALUE (000) -------------------------------------------------------------------------------- EXCHANGE TRADED FUNDS [49.4%] Consumer Staples Select Sector SPDR Fund 12 $ 343 Health Care Select Sector SPDR Fund 7 206 iPath Dow Jones-AIG Commodity Index Total Return Fund 18 1,088 iShares Lehman TIPS Bond Fund 20 2,232 iShares MSCI EAFE Index Fund 16 1,148 Market Vectors Gold Miners Fund 30 1,456 Powershares DB Agricultural Fund 42 1,532 SPDR S&P 500 Fund, Ser 1 20 2,624 SPDR S&P Biotech Fund 4 211 Utilities Select Sector SPDR Fund 8 318 ----------------------------------------------------------------------------- TOTAL EXCHANGE TRADED FUNDS (Cost $11,571) 11,158 ========================================================================= REGISTERED INVESTMENT COMPANY [12.3%] T. Rowe Price International Bond Fund 258 2,791 ----------------------------------------------------------------------------- TOTAL REGISTERED INVESTMENT COMPANY (Cost $2,656) 2,791 ========================================================================= AFFILIATED INVESTMENT FUNDS [11.5%] CNI Corporate Bond Fund, Institutional Class 110 1,132 CNI Government Bond Fund, Institutional Class 139 1,463 ----------------------------------------------------------------------------- TOTAL AFFILIATED INVESTMENT FUNDS (Cost $2,575) 2,595 ========================================================================= CASH EQUIVALENT [15.3%] Goldman Sachs Financial Square Funds-Government Fund, 2.640%* 3,454,119 3,454 ----------------------------------------------------------------------------- TOTAL CASH EQUIVALENT (Cost $3,454) 3,454 ========================================================================= DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- COMMERCIAL PAPER (A) [6.2%] BANKS [2.2%] Westpac 2.619%, 05/09/08 $ 500 $ 498 ============================================================================= DRUGS [1.3%] AstraZeneca 2.933%, 06/27/08 300 298 ============================================================================= INVESTMENT BANKER/BROKER DEALER [2.7%] JPMorgan Chase 3.020%, 06/06/08 300 298 Merrill Lynch 4.052%, 04/16/08 300 300 ----------------------------------------------------------------------------- TOTAL INVESTMENT BANKER/BROKER DEALER 598 ============================================================================= TOTAL COMMERCIAL PAPER (Cost $1,394) 1,394 ========================================================================= REPURCHASE AGREEMENT (B) [4.4%] Barclays 2.300%, dated 03/31/08, repurchased on 04/01/08, repurchase price $1,000,064 (collateralized by a Fannie Mae obligation, par value $1,005,000, 4.875%, 02/20/18; with total market value $1,020,630) 1,000 1,000 --------------------------------------------------------------------------- TOTAL REPURCHASE AGREEMENT (Cost $1,000) 1,000 ========================================================================= TOTAL INVESTMENTS [99.1%] (Cost $22,650) $ 22,392 ========================================================================= PERCENTAGES ARE BASED ON NET ASSETS OF $22,595 ($ THOUSANDS). ^ FUND COMMENCED OPERATIONS ON OCTOBER 1, 2007. * THE RATE SHOWN REPRESENTS THE 7-DAY EFFECTIVE YIELD AS OF MARCH 31, 2008. (A) RATE REPORTED IS THE EFFECTIVE YIELD AT TIME OF PURCHASE. (B) TRI-PARTY REPURCHASE AGREEMENT. EAFE -- EUROPE, AUSTRALIA AND THE FAR EAST (MARKETS) MSCI -- MORGAN STANLEY COMPOSITE INDEX SER -- SERIES SPDR -- STANDARD & POOR'S DEPOSITORY RECEIPTS TIPS -- TREASURY INFLATED PROTECTION SECURITIES SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 14 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- CORPORATE BOND FUND ISSUER INDUSTRY WEIGHTINGS*: [THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.] Financial 37.2% Industrial 26.8% U.S. Government 11.5% Bank 9.0% Commercial Paper 4.5% Telephone 4.4% Utilities 2.6% Short-Term Investment 2.2% Gas Transmission 1.0% Foreign Government 0.7% Transportation 0.1% * Percentages based on total investments. -------------------------------------------------------------------------------- DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- CORPORATE BONDS [77.8%] AIR TRANSPORTATION [0.0%] Federal Express, Ser A2 7.890%, 09/23/08 $ 31 $ 31 ============================================================================= AUTOMOTIVE [0.9%] DaimlerChrysler 5.875%, 03/15/11 570 583 ============================================================================= BANKS [9.0%] Bank of America 5.300%, 03/15/17 1,000 993 Bankers Trust 7.250%, 10/15/11 500 567 Barclays Bank (A) 6.050%, 12/04/17 1,000 975 Deutsche Bank 7.500%, 04/25/09 500 518 Wachovia Bank 4.800%, 11/01/14 1,270 1,201 Wells Fargo 4.625%, 08/09/10 1,000 1,027 Wells Fargo, MTN 4.000%, 08/15/08 765 765 ----------------------------------------------------------------------------- TOTAL BANKS 6,046 ============================================================================= BEAUTY PRODUCTS [1.3%] Avon Products 7.150%, 11/15/09 800 848 ============================================================================= COMMUNICATION & MEDIA [4.3%] AOL Time Warner 6.750%, 04/15/11 415 427 Comcast Cable Communications Holdings 8.375%, 03/15/13 440 489 DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- News America Holdings 9.250%, 02/01/13 $ 450 $ 522 Walt Disney, MTN 5.700%, 07/15/11 1,395 1,479 ----------------------------------------------------------------------------- TOTAL COMMUNICATION & MEDIA 2,917 ============================================================================= COMPUTER SYSTEM DESIGN & SERVICES [2.9%] Cisco Systems 5.500%, 02/22/16 1,000 1,035 IBM, MTN 4.375%, 06/01/09 900 919 ----------------------------------------------------------------------------- TOTAL COMPUTER SYSTEM DESIGN & SERVICES 1,954 ============================================================================= DRUGS [1.5%] Abbott Laboratories 5.375%, 05/15/09 1,000 1,023 ============================================================================= ELECTRICAL SERVICES [2.6%] American Electric Power 5.250%, 06/01/15 490 485 Iowa Electric Light & Power 6.000%, 10/01/08 200 202 WPS Resources 7.000%, 11/01/09 1,000 1,040 ----------------------------------------------------------------------------- TOTAL ELECTRICAL SERVICES 1,727 ============================================================================= FINANCE AUTO LOANS [4.3%] American Honda Finance, MTN (A) 5.125%, 12/15/10 1,000 1,047 Toyota Motor Credit 4.350%, 12/15/10 1,800 1,856 ----------------------------------------------------------------------------- TOTAL FINANCE AUTO LOANS 2,903 ============================================================================= FINANCIAL SERVICES [14.4%] American General Finance, MTN 5.750%, 09/15/16 500 460 American General Finance, Ser I, MTN 4.625%, 05/15/09 1,000 992 AXA Financial 7.750%, 08/01/10 1,000 1,094 Boeing Capital 6.500%, 02/15/12 930 1,009 CIT Group 5.400%, 03/07/13 1,000 801 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 15 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- CORPORATE BOND FUND (CONTINUED) DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- General Electric Capital, Ser A, MTN 6.875%, 11/15/10 $ 250 $ 271 6.000%, 06/15/12 1,540 1,642 HSBC Finance 5.250%, 04/15/15 1,250 1,193 John Deere Capital, MTN 4.625%, 04/15/09 750 759 MBNA 4.625%, 09/15/08 430 432 National Rural Utilities, Ser C, MTN 7.250%, 03/01/12 1,000 1,088 ----------------------------------------------------------------------------- TOTAL FINANCIAL SERVICES 9,741 ============================================================================= FOOD, BEVERAGE & TOBACCO [6.6%] Anheuser-Busch 7.500%, 03/15/12 1,190 1,347 Bottling Group 5.500%, 04/01/16 1,000 1,039 4.625%, 11/15/12 1,435 1,496 General Mills 6.000%, 02/15/12 560 588 ----------------------------------------------------------------------------- TOTAL FOOD, BEVERAGE & TOBACCO 4,470 ============================================================================= FOREIGN GOVERNMENTS [0.7%] United Mexican States, MTN 5.875%, 01/15/14 450 481 ============================================================================= INSURANCE [4.0%] Aflac 6.500%, 04/15/09 1,150 1,190 Berkshire Hathaway Finance 4.125%, 01/15/10 1,475 1,503 ----------------------------------------------------------------------------- TOTAL INSURANCE 2,693 ============================================================================= INVESTMENT BANKER/BROKER DEALER [13.1%] Citigroup 5.850%, 08/02/16 1,000 972 5.500%, 02/15/17 250 234 Credit Suisse 5.500%, 08/15/13 1,250 1,304 Goldman Sachs Group 5.625%, 01/15/17 1,260 1,209 Jefferies Group 5.500%, 03/15/16 665 610 DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- JPMorgan Chase 7.125%, 06/15/09 $ 675 $ 697 6.750%, 02/01/11 500 531 JPMorgan Chase, MTN (B) 6.010%, 06/28/09 1,000 1,009 Merrill Lynch, Ser C, MTN 4.250%, 02/08/10 1,275 1,245 Morgan Stanley 6.750%, 04/15/11 30 31 3.875%, 01/15/09 1,000 1,000 ----------------------------------------------------------------------------- TOTAL INVESTMENT BANKER/BROKER DEALER 8,842 ============================================================================= PETROLEUM & FUEL PRODUCTS [2.3%] ConocoPhillips 6.375%, 03/30/09 305 313 ConocoPhillips Canada Funding I 5.625%, 10/15/16 600 629 Duke Capital 5.500%, 03/01/14 625 634 ----------------------------------------------------------------------------- TOTAL PETROLEUM & FUEL PRODUCTS 1,576 ============================================================================= RETAIL [4.4%] Home Depot 5.250%, 12/16/13 1,000 979 Kohl's 6.300%, 03/01/11 1,000 1,024 Kroger 5.500%, 02/01/13 450 465 Target 5.875%, 07/15/16 500 518 ----------------------------------------------------------------------------- TOTAL RETAIL 2,986 ============================================================================= TELEPHONES & TELECOMMUNICATIONS [4.4%] BellSouth 4.200%, 09/15/09 1,000 1,006 Deutsche Telekom International Finance 5.250%, 07/22/13 475 469 New Cingular Wireless Services 8.125%, 05/01/12 400 448 Verizon Communications 5.550%, 02/15/16 1,000 995 Verizon Global Funding 7.250%, 12/01/10 25 27 ----------------------------------------------------------------------------- TOTAL TELEPHONES & TELECOMMUNICATIONS 2,945 ============================================================================= SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 16 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- CORPORATE BOND FUND (CONTINUED) DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- WASTE DISPOSAL [1.1%] Waste Management 6.875%, 05/15/09 $ 735 $ 754 ============================================================================= TOTAL CORPORATE BONDS (Cost $51,903) 52,520 ========================================================================= U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS [7.8%] FFCB REMIC, Ser IA4, Cl 1 5.770%, 02/21/14 971 1,007 FHLMC REMIC, Ser 2982, Cl NB 5.500%, 02/15/29 340 350 FHLMC REMIC, Ser R004, Cl A1 5.125%, 12/15/13 853 864 FHLMC REMIC, Ser R015, Cl AN 3.750%, 02/15/13 977 971 FNMA REMIC, Ser 2002-56, Cl MC 5.500%, 09/25/17 976 1,013 FNMA REMIC, Ser 2006-B1, Cl AB 6.000%, 06/25/16 145 147 FNMA REMIC, Ser 2007-B1, Cl BE 5.450%, 12/25/20 919 940 ----------------------------------------------------------------------------- TOTAL U.S. GOVERNMENT MORTGAGE- BACKED OBLIGATIONS (Cost $5,181) 5,292 ========================================================================= MUNICIPAL BONDS [3.0%] CALIFORNIA [1.4%] City of Industry, Sales Tax Project, RB, MBIA 5.000%, 01/01/12 955 983 ============================================================================= WISCONSIN [1.6%] De Pere Unified School District, GO, FGIC Pre-Refunded @ 100 (C) 4.500%, 10/01/11 995 1,060 ============================================================================= TOTAL MUNICIPAL BONDS (Cost $2,019) 2,043 ========================================================================= DESCRIPTION FACE AMOUNT (000)/SHARES VALUE (000) -------------------------------------------------------------------------------- U.S. GOVERNMENT AGENCY OBLIGATIONS [2.7%] FHLMC 5.500%, 09/15/11 $ 460 $ 501 5.125%, 04/18/11 1,250 1,335 ----------------------------------------------------------------------------- TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (Cost $1,794) 1,836 ========================================================================= U.S. TREASURY OBLIGATION [0.9%] U.S.Treasury Inflation Index 2.000%, 01/15/14 571 618 ----------------------------------------------------------------------------- TOTAL U.S. TREASURY OBLIGATION (Cost $587) 618 ========================================================================= MORTGAGE-BACKED SECURITY [0.1%] Residential Asset Mortgage Products, Ser 2003-RS5, Cl AI4 3.700%, 09/25/31 92 91 ----------------------------------------------------------------------------- TOTAL MORTGAGE-BACKED SECURITY (Cost $91) 91 ========================================================================= COMMERCIAL PAPER [4.5%] BANKS [1.5%] Westpac 2.751%, 04/03/08 1,000 1,000 ============================================================================= FINANCIAL SERVICES [1.5%] Rabobank USA Financial 2.500%, 04/01/08 1,016 1,016 ============================================================================= SPECIAL PURPOSE BANKS [1.5%] Dexia Delaware 2.540%, 04/01/08 1,000 1,000 ============================================================================= TOTAL COMMERCIAL PAPER (Cost $3,016) 3,016 ========================================================================= CASH EQUIVALENT [2.2%] Goldman Sachs Financial Square Funds-Government Fund, 2.640%* 1,446,792 1,447 ----------------------------------------------------------------------------- TOTAL CASH EQUIVALENT (Cost $1,447) 1,447 ========================================================================= SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 17 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- CORPORATE BOND FUND (CONCLUDED) DESCRIPTION VALUE (000) -------------------------------------------------------------------------------- TOTAL INVESTMENTS [99.0%] (Cost $66,038) $ 66,863 ========================================================================= PERCENTAGES ARE BASED ON NET ASSETS OF $67,552 ($ THOUSANDS). * THE RATE SHOWN REPRESENTS THE 7-DAY EFFECTIVE YIELD AS OF MARCH 31, 2008. (A) SECURITY EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT OF 1933. THESE SECURITIES MAY BE RESOLD IN TRANSACTIONS EXEMPT FROM REGISTRATION NORMALLY TO QUALIFIED INSTITUTIONS. ON MARCH 31, 2008, THE VALUE OF THESE SECURITIES AMOUNTED TO $2,022 (000), REPRESENTING 3.0% OF THE NET ASSETS OF THE FUND. (B) FLOATING RATE SECURITY -- THE RATE REPORTED IS THE RATE IN EFFECT ON MARCH, 31, 2008. (C) PRE-REFUNDED SECURITY -- THE MATURITY DATE SHOWN IS THE PRE-REFUNDED DATE. CL -- CLASS FFCB -- FEDERAL FARM CREDIT BANK FGIC -- FINANCIAL GUARANTY INSURANCE COMPANY FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION GO -- GENERAL OBLIGATION MBIA -- MUNICIPAL BOND INVESTMENT ASSOCIATION MTN -- MEDIUM TERM NOTE RB -- REVENUE BOND REMIC -- REAL ESTATE MORTGAGE INVESTMENT CONDUIT SER -- SERIES SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 18 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- GOVERNMENT BOND FUND TYPE OF SECURITY WEIGHTINGS*: [THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.] U.S. Government Mortgage-Backed Obligations 67.1% U.S. Government Agency Obligations 19.0% U.S. Treasury Obligation 13.0% Short-Term Investments 0.9% * Percentages based on total investments. -------------------------------------------------------------------------------- DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS [66.8%] FFCB REMIC, Ser IA2, Cl 1 5.220%, 10/21/13 $1,325 $ 1,427 FFCB REMIC, Ser IA3, Cl 1 5.370%, 09/25/13 3,738 3,842 FFCB REMIC, Ser IA4, Cl 1 5.770%, 02/21/14 1,582 1,642 FFCB REMIC, Ser IA8, Cl 1 4.650%, 01/21/14 3,472 3,476 FHLMC REMIC, Ser R002, Cl AH 4.750%, 07/15/15 1,924 1,939 FHLMC REMIC, Ser R003, Cl AG 5.125%, 10/15/15 2,058 2,088 FHLMC REMIC, Ser R005, Cl AB 5.500%, 12/15/18 2,338 2,390 FHLMC REMIC, Ser R007, Cl AC 5.875%, 05/15/16 1,936 1,967 FHLMC REMIC, Ser R009, Cl AK 5.750%, 12/15/18 2,197 2,243 FHLMC REMIC, Ser R010, Cl AB 5.500%, 12/15/19 5,125 5,275 FHLMC REMIC, Ser R011, Cl AB 5.500%, 12/15/20 1,771 1,816 FHLMC REMIC, Ser R012, Cl AB 5.500%, 12/15/20 1,791 1,835 FHLMC REMIC, Ser R013, Cl AB 6.000%, 12/15/21 2,591 2,663 FHLMC REMIC, Ser R014, Cl AL 5.500%, 10/15/14 1,284 1,302 DESCRIPTION FACE AMOUNT (000)/SHARES VALUE (000) -------------------------------------------------------------------------------- FHLMC REMIC, Ser R015, Cl AN 3.750%, 02/15/13 $1,466 $ 1,456 FNMA ARM (A) 4.559%, 03/01/34 799 806 FNMA REMIC, Ser 119, Cl DG 5.500%, 01/25/36 1,375 1,388 FNMA REMIC, Ser R009, Cl AJ 5.750%, 12/15/18 2,634 2,696 GNMA ARM (A) 5.000%, 08/20/35 86 87 4.500%, 04/20/35 821 829 GNMA REMIC, Ser 31, Cl PB 5.500%, 02/16/32 3,677 3,766 -------------------------------------------------------------------------- TOTAL U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS (Cost $44,077) 44,933 ==================================================================== U.S. GOVERNMENT AGENCY OBLIGATIONS [18.9%] FHLB 5.250%, 10/14/11 2,500 2,541 5.000%, 12/11/15 2,500 2,680 FNMA 7.125%, 06/15/10 2,000 2,204 6.625%, 09/15/09 4,000 4,248 5.500%, 03/15/11 1,000 1,076 -------------------------------------------------------------------------- TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (Cost $12,220) 12,749 ==================================================================== U.S. TREASURY OBLIGATION [12.9%] U.S.Treasury Notes 6.000%, 08/15/09 8,200 8,699 -------------------------------------------------------------------------- TOTAL U.S. TREASURY OBLIGATION (Cost $8,672) 8,699 ==================================================================== CASH EQUIVALENT [0.9%] Goldman Sachs Financial Square Funds-Government Fund, 2.640%* 592,968 593 -------------------------------------------------------------------------- TOTAL CASH EQUIVALENT (Cost $593) 593 ==================================================================== TOTAL INVESTMENTS [99.5%] (Cost $65,562) $ 66,974 ==================================================================== SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 19 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- GOVERNMENT BOND FUND (CONCLUDED) DESCRIPTION -------------------------------------------------------------------------------- PERCENTAGES ARE BASED ON NET ASSETS OF $67,306 ($ THOUSANDS). * THE RATE SHOWN REPRESENTS THE 7-DAY EFFECTIVE YIELD AS OF MARCH 31, 2008. (A) THE RATE REPORTED IS THE EFFECTIVE YIELD AT TIME OF PURCHASE. CL -- CLASS ARM -- ADJUSTABLE RATE MORTGAGE FFCB -- FEDERAL FARM CREDIT BANK FHLB -- FEDERAL HOME LOAN BANK FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION GNMA -- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION MTN -- MEDIUM TERM NOTE REMIC -- REAL ESTATE MORTGAGE INVESTMENT CONDUIT SER -- SERIES SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 20 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT BOND FUND ISSUER INDUSTRY WEIGHTINGS*: [THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.] Education 23.6% General Revenue 18.8% General Obligation 12.8% Public Facilities 11.3% Water 10.2% Healthcare 6.6% Industrial Development 5.4% Utilities 3.5% Short-Term Investment 3.2% Transportation 1.9% Equipment 0.9% Aiport 0.8% Housing 0.7% Power 0.3% * Percentages based on total investments. -------------------------------------------------------------------------------- DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- MUNICIPAL BONDS [95.8%] ALABAMA [1.4%] Jefferson County, Public Building Authority, RB, AMBAC Callable 04/01/16 @ 100 5.125%, 04/01/19 $500 $ 469 ============================================================================= CALIFORNIA [80.6%] Azusa, Redevelopment Agency, Mortgage-Backed Securities Program, Ser A, RB, ETM 6.875%, 10/01/12 200 234 Bay Area, Infrastructure Financing Authority, State Payment Acceleration Project, RB, XLCA Callable 08/01/11 @ 100 5.000%, 08/01/14 500 518 Bay Area, Infrastructure Financing Authority, State Payment Acceleration Project, RB, FGIC Callable 08/01/14 @ 100 5.000%, 08/01/17 350 364 Beverly Hills, Unified School District Authority, Ser B, GO Pre-Refunded @ 101 (A) 4.700%, 06/01/08 50 51 Big Bear Lake, Water Authority, RB, MBIA 6.000%, 04/01/11 200 211 Burbank, Public Financing Authority, Golden State Redevelopment Project, Ser A, TA, AMBAC Callable 12/01/13 @ 100 5.250%, 12/01/18 100 106 DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- Burbank, Public Financing Authority, Golden State Redevelopment Project, Ser A, TA, AMBAC Pre-Refunded @ 100 (A) 5.250%, 12/01/13 $ 75 $ 84 California State, Department of Water Resources, Water Systems Project J-2, RB 7.000%, 12/01/12 500 589 California State, Economic Recovery Authority, Ser A, GO 5.250%, 01/01/11 500 533 California State, Educational Facilities Authority, Pooled College & University Projects, Ser A, RB 4.300%, 04/01/09 100 101 California State, GO Callable 02/01/12 @ 100 5.000%, 02/01/18 175 181 California State, GO Pre-Refunded @ 100 (A) 5.250%, 09/01/10 165 175 California State, GO Pre-Refunded @ 100 (A) 5.250%, 09/01/10 10 11 California State, GO Pre-Refunded @ 100 (A) 5.250%, 09/01/10 25 27 California State, GO Pre-Refunded @ 100 (A) 5.250%, 10/01/10 20 21 California State, GO Pre-Refunded @ 100 (A) 5.250%, 10/01/10 50 54 California State, GO Pre-Refunded @ 100 (A) 5.000%, 02/01/12 400 426 California State, GO Pre-Refunded @ 100 (A) 5.250%, 04/01/12 200 218 California State, GO 5.000%, 04/01/10 215 225 California State, Health Facilities Financing Authority, Cedars-Sinai Medical Center Projects, Ser A, RB Pre-Refunded @ 101 (A) 6.250%, 12/01/09 490 528 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 21 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT BOND FUND (CONTINUED) DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- California State, Health Facilities Financing Authority, Valley Care Project, Ser A, RB Pre-Refunded @ 100 (A) 5.375%, 05/01/12 $500 $ 548 California State, Infrastructure & Economic Authority, Bay Area Toll Bridges Project, Ser A, RB, FSA Pre-Refunded @ 100 (A) 5.250%, 07/01/13 125 139 California State, Infrastructure & Economic Authority, Energy Efficiency Master Trust Project, Ser A, RB 5.000%, 03/01/11 315 336 California State, Public Works Board Lease, Department of Corrections Project, Ser A, RB Callable 09/01/08 @ 101 5.250%, 09/01/15 250 255 California State, Public Works Board Lease, Department of Corrections Project, Ser B, RB, MBIA Callable 09/01/08 @ 101 5.000%, 09/01/21 100 101 California State, Public Works Board Lease, Department of Corrections Project, Ser C, RB Callable 12/01/13 @ 100 5.500%, 06/01/16 500 545 California State, Public Works Board Lease, Department of Corrections-Administration Project, Ser A, RB, AMBAC Callable 03/01/12 @ 100 5.250%, 03/01/18 155 161 California State, Public Works Board Lease, Department of Corrections-State Prisons Project, Ser A, RB, AMBAC 5.250%, 12/01/13 600 635 California State, Public Works Board Lease, Department of General Services - Butterfield Street Project, Ser A, RB 5.000%, 06/01/10 500 523 California State, Public Works Board Lease, Department of Mental Health Project, Ser A, RB 5.250%, 06/01/13 200 216 DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- California State, Public Works Board Lease, Various University Projects, Ser A, RB, MBIA 5.500%, 06/01/14 $250 $ 273 California State, University of California, Ser K, RB, MBIA Pre-Refunded @ 101 (A) 5.000%, 09/01/08 150 154 California Statewide, Communities Development Authority, Irvine-UCI East Apartments Project, RB Pre-Refunded @ 100 (A) 5.625%, 05/15/15 360 414 Carlsbad, Public Financing Authority, Municipal Golf Course Project, Ser A, RB, AMBAC 4.500%, 09/01/16 350 372 Castaic Lake, Water Agency, Water Systems Improvement Project, Ser A, COP, MBIA 7.000%, 08/01/13 300 352 Chaffey, Unified High School District, Ser B, GO, FGIC Pre-Refunded @ 101 (A) 5.500%, 08/01/10 400 433 Coachella Valley, Water District Authority, Flood Control Project, COP, AMBAC Callable 05/05/08 @ 102 5.000%, 10/01/11 250 255 Compton, Community College District, Ser 2004-A, GO, MBIA Callable 07/01/14 @ 100 5.250%, 07/01/21 605 633 Contra Costa County, Public Financing Authority, Medical Center Project, Ser B, RB, MBIA 5.000%, 06/01/11 250 267 Corona, Public Financing Authority, City Hall Project, Ser B, RB, MBIA Callable 09/01/12 @ 100 5.250%, 09/01/16 350 375 Culver City, Redevelopment Finance Authority, TA, AMBAC 5.500%, 11/01/14 75 78 Eastern California, Municipal Water District, Ser A, COP, MBIA 5.000%, 07/01/14 500 549 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 22 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT BOND FUND (CONTINUED) DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- Escondido, Union School District, Refunding & Financing Project, COP, MBIA 4.750%, 07/01/19 $735 $ 753 Fresno, Unified School District, Election 2001 Project, Ser D, GO, MBIA Callable 08/01/13 @ 102 5.000%, 08/01/17 200 214 Fruitvale, School District, GO, FSA Callable 08/01/09 @ 102 5.000%, 08/01/19 200 207 Golden State, Tobacco Settlement, Ser A, RB Callable 06/01/09 @ 100 5.000%, 06/01/19 250 251 Golden State, Tobacco Settlement, Ser A, RB, AMBAC Callable 06/01/10 @ 100 5.000%, 06/01/20 500 498 Golden State, Tobacco Settlement, Ser B, RB, FGIC Pre-Refunded @ 100 (A) 5.500%, 06/01/13 100 110 Golden State, Tobacco Settlement, Ser B, RB Pre-Refunded @ 100 (A) 5.600%, 06/01/10 170 180 Hanford, Joint Unified High School District, Election 2004 Project, Ser A, GO, FSA Callable 02/01/17 @ 100 4.500%, 08/01/18 200 208 Hawthorne, School District, COP, FSA Pre-Refunded @ 101 (A) 6.000%, 11/01/10 485 532 Indio, Public Financing Authority, Public Capital Improvement Project, Ser B, RB, AMBAC (B) 3.800%, 11/01/37 500 503 Kern, High School District, GO, ETM 7.100%, 08/01/12 290 340 Los Angeles County, Capital Asset Leasing, Ser A, RB 3.250%, 06/01/10 310 312 Los Angeles, Municipal Improvement Authority, Central Library Project, RB, MBIA Callable 06/01/12 @ 100 5.500%, 06/01/18 500 530 DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- Los Angeles, Municipal Improvement Authority, Central Library Project, Ser A, RB, MBIA 5.250%, 06/01/13 $230 $ 254 Los Angeles, Ser A, GO, MBIA 4.000%, 09/01/09 250 256 Los Angeles, Unified School District, Ser A-1, GO, MBIA Callable 07/01/14 @ 100 5.000%, 07/01/17 125 134 Los Angeles, Wastewater Systems Authority, RB, FSA 4.500%, 06/01/09 250 257 Los Angeles, Wastewater Systems Authority, Sub-Ser B, RB, MBIA 5.000%, 06/01/10 500 525 Metropolitan Water District, Southern California Waterworks Authority, RB 5.750%, 07/01/09 500 522 Metropolitan Water District, Southern California Waterworks Authority, Ser A, RB, MBIA 5.250%, 07/01/11 200 216 Metropolitan Water District, Southern California Waterworks Authority, Ser A, RB 5.750%, 07/01/21 280 317 North Orange County, Community College District, Ser A, GO, MBIA Pre-Refunded @ 101 (A) 5.375%, 08/01/12 525 582 Northern California, Transmission Resource Authority, Ore Transmission Project, Ser A, RB, MBIA 7.000%, 05/01/13 250 281 Oakland, Redevelopment Agency, Central District Redevelopment Project, TA, AMBAC 5.500%, 02/01/14 475 508 Oakland, Ser A, GO, MBIA Callable 01/15/13 @ 100 5.000%, 01/15/21 500 510 Oakland, State Building Authority, Elihu M Harris Project, Ser A, RB, AMBAC Pre-Refunded @ 101 (A) 5.500%, 04/01/08 100 101 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 23 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT BOND FUND (CONTINUED) DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- Oakland, Unified School District, GO, FGIC 5.000%, 08/01/16 $250 $ 263 Oakley, Civic Center Project, COP 4.000%, 05/01/12 230 238 Oxnard, School District, Election 2006 Project, Ser A, GO, CIFG 6.750%, 08/01/11 300 335 Palm Springs, Financing Authority, Public Capital Improvement Lease Project, RB, AMBAC Callable 04/01/17 @ 100 5.000%, 04/01/20 470 485 Pinole, Redevelopment Agency, Pinole Vista Redevelopment Project, TA, FSA Callable 08/01/09 @ 101 5.250%, 08/01/14 100 104 R E Badger, Water Facilities Financing Authority, RB, MBIA 4.000%, 10/01/15 250 259 Redwoods, Community College District, 2004 Election Project, Ser A, GO, MBIA Callable 08/01/14 @ 100 5.000%, 08/01/23 420 429 Riverside, Water Authority, RB Callable 10/01/08 @ 101 5.375%, 10/01/12 90 92 Riverside,Water Authority, RB Pre-Refunded @ 101 (A) 5.375%, 10/01/08 10 10 Roseville, Joint Unified High School District, Election 2004 Project, Ser A, GO, FGIC Callable 08/01/14 @ 100 5.000%, 08/01/20 500 523 Rowland, Unified School District, Ser A, GO Callable 08/01/16 @ 100 5.000%, 08/01/20 290 308 Sacramento, City Unified School District, Ser A, GO, FSA 4.250%, 07/01/09 75 77 San Diego, Unified School District, Election 1998 Project, Ser E, GO, FSA Callable 07/01/13 @ 101 5.250%, 07/01/16 100 110 DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- San Francisco (City & County), Airports Commission Authority, Second Ser-27B, RB, FGIC Callable 05/01/11 @ 100 5.250%, 05/01/12 $250 $ 262 San Francisco (City & County), GO Callable 06/15/10 @ 102 5.000%, 06/15/11 235 251 San Jose, Unified School District, Ser A, GO, FSA Callable 08/01/11 @ 101 5.375%, 08/01/19 150 159 San Ysidro, School District, Election 1997 Project, Ser C, GO, MBIA 6.000%, 08/01/11 205 225 Sanger, Unified School District, GO, MBIA 5.350%, 08/01/15 250 263 Santa Margarita, Dana Point Authority, Ser A, RB, AMBAC Callable 08/01/14 @ 100 5.000%, 08/01/15 165 180 Santa Monica, Community College District, 2004 Election Project, Ser A, GO, MBIA Pre-Refunded @ 100 (A) 5.000%, 05/01/15 400 444 Santa Monica, Public Financing Authority, Public Safety Facilities Project, RB Callable 07/01/09 @ 101 5.250%, 07/01/14 100 104 Solano County, COP, MBIA Pre-Refunded @ 100 (A) 5.250%, 11/01/12 100 110 Southern Kern, Unified School District, Ser A, GO, FGIC Callable 11/01/13 @ 100 4.500%, 11/01/18 220 230 Tamalpais, Unified High School District, GO, MBIA Callable 08/01/11 @ 101 4.875%, 08/01/17 100 104 ----------------------------------------------------------------------------- TOTAL CALIFORNIA 26,937 ============================================================================= SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 24 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT BOND FUND (CONTINUED) DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- ILLINOIS [0.6%] Illinois State, Civic Center Authority, RB, FSA Callable 12/15/10 @ 100 5.500%, 12/15/14 $200 $ 213 ============================================================================= MISSOURI [0.7%] St Louis, Parking Facilities Authority, Downtown Parking Facilities Project, Sub-Ser A, RB Pre-Refunded @ 100 (A) 6.000%, 02/01/12 200 221 ============================================================================= NEW JERSEY [1.1%] New Jersey State, Turnpike Authority, Ser C, RB, MBIA, ETM 6.500%, 01/01/16 315 362 ============================================================================= NEW MEXICO [1.2%] Santa Fe, Educational Facilities Authority, College of Santa Fe Project, RB Pre-Refunded @ 100 (A) 5.750%, 10/01/14 350 400 ============================================================================= NEW YORK [1.7%] New York State, Local Assistance Correction Authority, Ser E, RB 6.000%, 04/01/14 500 552 ============================================================================= SOUTH CAROLINA [2.5%] Columbia, Tourism Development Fee Pledge Project, COP, AMBAC Callable 06/01/13 @ 100 5.250%, 06/01/16 350 377 South Carolina, Jobs & Economic Development Authority, Palmetto Health Project, Ser C, RB Pre-Refunded @ 100 (A) 6.875%, 08/01/13 400 474 ----------------------------------------------------------------------------- TOTAL SOUTH CAROLINA 851 ============================================================================= DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- TEXAS [3.2%] Carroll, Independent School District, GO 6.375%, 02/15/21 $430 $ 520 San Angelo, Waterworks & Sewer System Authority, Refunding & Improvements Projects, RB, FSA Callable 04/01/11 @ 100 5.250%, 04/01/19 100 104 Travis County, Health Facilities Development Authority, Ascension Health Credit Project, Ser A, RB, MBIA Pre-Refunded @ 101 (A) 6.250%, 11/15/09 400 430 ----------------------------------------------------------------------------- TOTAL TEXAS 1,054 ============================================================================= UTAH [0.4%] Central Utah, Water Conservancy District, Ser D, GO Pre-Refunded @ 100 (A) 4.600%, 04/01/09 140 144 ============================================================================= PUERTO RICO [2.4%] Puerto Rico, Electric Power Authority, Ser CC, RB, MBIA Callable 05/05/08 @ 102 5.250%, 07/01/09 100 102 Puerto Rico, Highway & Transportation Authority, RB, FSA 5.500%, 07/01/09 250 259 Puerto Rico, Municipal Finance Agency, Ser A, RB, FSA Callable 05/05/08 @ 102 5.250%, 07/01/10 130 132 Puerto Rico, Public Buildings Authority, Government Facilities Project, Ser J, RB, AMBAC Callable 07/01/12 @ 100 (B) 5.000%, 07/01/36 300 305 ----------------------------------------------------------------------------- TOTAL PUERTO RICO 798 ============================================================================= TOTAL MUNICIPAL BONDS (Cost $31,891) 32,001 ======================================================================= SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 25 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT BOND FUND (CONCLUDED) DESCRIPTION SHARES VALUE (000) -------------------------------------------------------------------------------- CASH EQUIVALENT [3.1%] Federated California Municipal Money Market Fund, Cl I, 2.250%* 1,046,376 $ 1,046 ----------------------------------------------------------------------------- TOTAL CASH EQUIVALENT (Cost $1,046) 1,046 ========================================================================= TOTAL INVESTMENTS [98.9%] (Cost $32,937) $ 33,047 ========================================================================= PERCENTAGES ARE BASED ON NET ASSETS OF $33,423 ($ THOUSANDS). * THE RATE SHOWN REPRESENTS THE 7-DAY EFFECTIVE YIELD AS OF MARCH 31, 2008. (A) PRE-REFUNDED SECURITY -- THE MATURITY DATE SHOWN IS THE PRE-REFUNDED DATE. (B) FLOATING RATE SECURITY -- THE RATE REPORTED IS THE RATE IN EFFECT ON MARCH 31, 2008. AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY CIFG -- CDC IXIS FINANCIAL GUARANTEE CL -- CLASS COP -- CERTIFICATE OF PARTICIPATION ETM -- ESCROWED TO MATURITY FGIC -- FINANCIAL GUARANTEE INSURANCE COMPANY FSA -- FINANCIAL SECURITY ASSISTANCE GO -- GENERAL OBLIGATION MBIA -- MUNICIPAL BOND INSURANCE ASSOCIATION RB -- REVENUE BOND SER -- SERIES TA -- TAX ALLOCATION XLCA -- XL CAPITAL ASSURANCE SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 26 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- HIGH YIELD BOND FUND ISSUER INDUSTRY WEIGHTINGS*: [THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.] Industrial 71.7% Financial 10.0% Utilities 5.8% Gas Transmission 5.1% Telephone 4.5% Short-Term Investments 1.3% Transportation 1.1% Commercial Paper 0.3% Common Stock 0.2% * Percentages based on total investments. -------------------------------------------------------------------------------- DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- CORPORATE BONDS [96.4%] AEROSPACE & DEFENSE [1.1%] DRS Technologies 6.625%, 02/01/16 $100 $ 98 Esterline Technologies 7.750%, 06/15/13 100 101 L-3 Communications 5.875%, 01/15/15 100 96 TransDigm 7.750%, 07/15/14 100 100 ----------------------------------------------------------------------------- TOTAL AEROSPACE & DEFENSE 395 ============================================================================= AIRLINES [0.4%] DAE Aviation Holdings (A) 11.250%, 08/01/15 150 148 ============================================================================= APPAREL/TEXTILES [0.8%] Hanesbrands (C) 8.204%, 12/15/14 100 89 Levi Strauss 9.750%, 01/15/15 100 99 Phillips-Van Heusen 7.250%, 02/15/11 75 75 ----------------------------------------------------------------------------- TOTAL APPAREL/TEXTILES 263 ============================================================================= AUTO RENT & LEASE [1.4%] Avis Budget Car Rental 7.750%, 05/15/16 100 81 H&E Equipment Services 8.375%, 07/15/16 100 82 Hertz 10.500%, 01/01/16 150 140 RSC Equipment Rental 9.500%, 12/01/14 100 84 DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- United Rentals North America 6.500%, 02/15/12 $100 $ 91 ----------------------------------------------------------------------------- TOTAL AUTO RENT & LEASE 478 ============================================================================= AUTOMOTIVE [1.6%] General Motors 7.700%, 04/15/16 200 146 7.125%, 07/15/13 350 269 UCI Holdco 12.491%, 12/15/13 175 152 ----------------------------------------------------------------------------- TOTAL AUTOMOTIVE 567 ============================================================================= AUTOPARTS [1.1%] Accuride 8.500%, 02/01/15 150 122 Asbury Automotive Group 7.625%, 03/15/17 100 79 Pep Boys 7.500%, 12/15/14 100 85 TRW Automotive (A) 7.250%, 03/15/17 100 91 ----------------------------------------------------------------------------- TOTAL AUTOPARTS 377 ============================================================================= BEAUTY PRODUCTS [0.3%] Chattem 7.000%, 03/01/14 100 97 ============================================================================= BROADCASTING & CABLE [6.2%] Allbritton Communications 7.750%, 12/15/12 150 147 Atlantic Broadband Finance 9.375%, 01/15/14 100 88 Barrington Broadcasting Group (A) 10.500%, 08/15/14 100 89 Bonten Media Acquisition (A) 9.000%, 06/01/15 150 116 Cablevision Systems, Ser B 8.000%, 04/15/12 250 243 Charter Communications Holdings II 10.250%, 09/15/10 300 273 CSC Holdings 7.625%, 07/15/18 100 91 Echostar DBS 6.625%, 10/01/14 200 182 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 27 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- HIGH YIELD BOND FUND (CONTINUED) DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- Fisher Communications 8.625%, 09/15/14 $150 $ 152 Kabel Deutschland 10.625%, 07/01/14 200 196 Local TV Finance (A) 9.250%, 06/15/15 100 80 Mediacom Capital 7.875%, 02/15/11 150 134 Nexstar Finance Holdings (D) 11.785%, 04/01/13 200 194 Olympus Communications (B) 10.625%, 07/15/04 100 -- Quebecor Media (A) 7.750%, 03/15/16 75 68 Videotron Ltee 6.875%, 01/15/14 100 92 ----------------------------------------------------------------------------- TOTAL BROADCASTING & CABLE 2,145 ============================================================================= BUILDING & CONSTRUCTION [2.2%] Ainsworth Lumber 6.750%, 03/15/14 100 58 DR Horton 5.625%, 01/15/16 125 104 Esco (A) 8.625%, 12/15/13 50 48 Interline Brands 8.125%, 06/15/14 50 48 International Utility Structures (B) 10.750%, 02/01/08 100 1 KB Home 8.625%, 12/15/08 50 50 Nortek 8.500%, 09/01/14 200 148 Panolam Industries International 10.750%, 10/01/13 250 194 Ply Gem Industries 9.000%, 02/15/12 150 110 ----------------------------------------------------------------------------- TOTAL BUILDING & CONSTRUCTION 761 ============================================================================= BUSINESS SERVICES [0.9%] Corrections 7.500%, 05/01/11 100 101 FTI Consulting 7.625%, 06/15/13 50 51 Geo Group 8.250%, 07/15/13 150 151 ----------------------------------------------------------------------------- TOTAL BUSINESS SERVICES 303 ============================================================================= DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- CHEMICALS [3.7%] Basell (A) 8.375%, 08/15/15 $250 $ 182 Georgia Gulf 9.500%, 10/15/14 150 116 Huntsman International 7.875%, 11/15/14 115 122 Innophos 8.875%, 08/15/14 100 97 Momentive Performance Materials 9.750%, 12/01/14 100 90 Mosaic (A) 7.375%, 12/01/14 75 80 Nalco 8.875%, 11/15/13 150 154 Nova Chemicals 6.500%, 01/15/12 150 140 Polymer Holdings (D) (E) 12.000%, 07/15/14 250 210 Terra Capital, Ser B 7.000%, 02/01/17 100 99 ----------------------------------------------------------------------------- TOTAL CHEMICALS 1,290 ============================================================================= CIRCUIT BOARDS [0.1%] Viasystems 10.500%, 01/15/11 50 46 ============================================================================= COAL MINING [0.5%] Alpha Natural Resources 10.000%, 06/01/12 150 157 ============================================================================= COMMERCIAL SERVICES [2.1%] ARAMARK 8.500%, 02/01/15 100 101 8.411%, 02/01/15 (C) 100 88 Iron Mountain 8.750%, 07/15/18 150 156 8.625%, 04/01/13 100 101 Mobile Mini 6.875%, 05/01/15 75 62 Mobile Services Group 9.750%, 08/01/14 150 140 Tube City IMS 9.750%, 02/01/15 100 88 ----------------------------------------------------------------------------- TOTAL COMMERCIAL SERVICES 736 ============================================================================= SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 28 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- HIGH YIELD BOND FUND (CONTINUED) DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- COMPUTER SYSTEM DESIGN & SERVICES [0.4%] Activant Solutions 9.500%, 05/01/16 $100 $ 84 Unisys 12.500%, 01/15/16 65 64 ----------------------------------------------------------------------------- TOTAL COMPUTER SYSTEM DESIGN & SERVICES 148 ============================================================================= CONGLOMERATE [0.3%] KAR Holdings 8.750%, 05/01/14 100 89 ============================================================================= CONSUMER PRODUCTS & SERVICES [4.4%] Central Garden & Pet 9.125%, 02/01/13 100 81 Jarden 7.500%, 05/01/17 75 66 Johnsondiversey Holdings (D) 10.670%, 05/15/13 200 192 Johnsondiversey, Ser B 9.625%, 05/15/12 150 148 Libbey Glass (C) 11.913%, 06/01/11 100 98 MSX International (A) 12.500%, 04/01/12 100 80 Prestige Brands 9.250%, 04/15/12 90 87 Sealy Mattress 8.250%, 06/15/14 200 167 Southern States Cooperative (A) 10.500%, 11/01/10 200 204 Spectrum Brands 7.375%, 02/01/15 300 195 Steinway Musical Instruments (A) 7.000%, 03/01/14 100 85 Visant Holding 8.750%, 12/01/13 100 93 Yankee Acquisition, Ser B 9.750%, 02/15/17 50 40 ----------------------------------------------------------------------------- TOTAL CONSUMER PRODUCTS & SERVICES 1,536 ============================================================================= CONTAINERS & PACKAGING [2.6%] Aleris International 10.000%, 12/15/16 50 32 Crown Americas 7.750%, 11/15/15 150 154 DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- Exopack Holding 11.250%, 02/01/14 $100 $ 91 Graham Packaging 9.875%, 10/15/14 100 84 Intertape Polymer US 8.500%, 08/01/14 50 42 Owens Brockway Glass Container 6.750%, 12/01/14 150 149 Plastipak Holdings (A) 8.500%, 12/15/15 100 91 Solo Cup 8.500%, 02/15/14 200 169 Stone Container Finance 7.375%, 07/15/14 100 83 ----------------------------------------------------------------------------- TOTAL CONTAINERS & PACKAGING 895 ============================================================================= DIVERSIFIED OPERATIONS [0.8%] Bombardier (A) 8.000%, 11/15/14 75 77 Trinity Industries 6.500%, 03/15/14 200 194 ----------------------------------------------------------------------------- TOTAL DIVERSIFIED OPERATIONS 271 ============================================================================= EDUCATIONAL SERVICES [0.3%] Education Management 10.250%, 06/01/16 60 48 8.750%, 06/01/14 60 50 ----------------------------------------------------------------------------- TOTAL EDUCATIONAL SERVICES 98 ============================================================================= ELECTRIC UTILITIES [5.1%] Allegheny Energy Supply 7.800%, 03/15/11 200 212 Aquila 7.625%, 11/15/09 100 104 Calpine Generating (B) 11.070%, 04/01/10 200 8 CMS Energy 6.875%, 12/15/15 150 149 Edison Mission Energy 7.000%, 05/15/17 150 149 Energy Future Holdings (A) 10.875%, 11/01/17 550 555 ESI Tractebel Acquisition, Ser B 7.990%, 12/30/11 51 52 Mirant North America 7.375%, 12/31/13 150 152 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 29 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- HIGH YIELD BOND FUND (CONTINUED) DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- NRG Energy 7.375%, 02/01/16 $100 $ 98 Reliant Energy 7.625%, 06/15/14 200 199 Sierra Pacific Resources 8.625%, 03/15/14 70 74 ----------------------------------------------------------------------------- TOTAL ELECTRIC UTILITIES 1,752 ============================================================================= ENERGY & POWER [0.4%] Aventine Renewable Energy Holdings 10.000%, 04/01/17 100 64 VeraSun Energy (A) 9.375%, 06/01/17 100 69 ----------------------------------------------------------------------------- TOTAL ENERGY & POWER 133 ============================================================================= ENTERTAINMENT & GAMING [10.5%] AMC Entertainment 11.000%, 02/01/16 100 94 Buffalo Thunder Development Authority (A) 9.375%, 12/15/14 100 75 CCM Merger (A) 8.000%, 08/01/13 175 147 Choctaw Resort Development Enterprise (A) 7.250%, 11/15/19 188 164 Chukchansi Economic Development Authority (A) 8.000%, 11/15/13 150 135 Circus & Eldorado Joint Venture/ Silver Legacy Capital 10.125%, 03/01/12 150 151 Fontainebleau Las Vegas Holdings (A) 10.250%, 06/15/15 150 106 Gaylord Entertainment 8.000%, 11/15/13 100 93 Greektown Holdings (A) 10.750%, 12/01/13 125 114 Herbst Gaming 8.125%, 06/01/12 150 27 Indianapolis Downs & Capital (A) 11.000%, 11/01/12 100 87 Inn of the Mountain Gods Resort & Casino 12.000%, 11/15/10 150 145 DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- Isle of Capri Casinos 7.000%, 03/01/14 $200 $ 142 Jacobs Entertainment 9.750%, 06/15/14 75 56 Mashantucket Western Pequot Tribe (A) 8.500%, 11/15/15 150 132 MGM Mirage 8.500%, 09/15/10 200 206 6.750%, 09/01/12 100 93 6.000%, 10/01/09 100 99 Mohegan Tribal Gaming Authority 7.125%, 08/15/14 150 123 MTR Gaming Group, Ser B 9.750%, 04/01/10 200 193 OED/Diamond Jo 8.750%, 04/15/12 100 88 Penn National Gaming 6.875%, 12/01/11 100 94 Pinnacle Entertainment (A) 7.500%, 06/15/15 100 79 San Pasqual Casino (A) 8.000%, 09/15/13 100 93 Scientific Games 6.250%, 12/15/12 100 93 Seminole Hard Rock Entertainment (A) (C) 7.848%, 03/15/14 100 79 Seneca Gaming 7.250%, 05/01/12 100 94 Shingle Springs Tribal Gaming Authority (A) 9.375%, 06/15/15 100 89 Snoqualmie Entertainment Authority (A) 9.150%, 02/01/14 100 82 Speedway Motorsports 6.750%, 06/01/13 100 98 Tunica-Biloxi Gaming Authority (A) 9.000%, 11/15/15 125 121 Waterford Gaming (A) 8.625%, 09/15/14 92 88 Wynn Las Vegas Capital (A) 6.625%, 12/01/14 175 168 ----------------------------------------------------------------------------- TOTAL ENTERTAINMENT & GAMING 3,648 ============================================================================= SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 30 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- HIGH YIELD BOND FUND (CONTINUED) DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- FINANCIAL SERVICES [2.4%] Ford Motor Credit 7.375%, 10/28/09 $200 $ 182 7.375%, 02/01/11 200 167 GMAC 6.875%, 08/28/12 100 76 6.750%, 12/01/14 425 301 TECO Finance, MTN (A) 6.572%, 11/01/17 100 101 ----------------------------------------------------------------------------- TOTAL FINANCIAL SERVICES 827 ============================================================================= FOOD, BEVERAGE & TOBACCO [2.2%] Alliance One International 8.500%, 05/15/12 75 70 Beverages & More (A) 9.250%, 03/01/12 100 94 Chiquita Brands International 7.500%, 11/01/14 100 85 Constellation Brands 8.375%, 12/15/14 150 155 Del Monte 8.625%, 12/15/12 50 51 Land O' Lakes 8.750%, 11/15/11 6 6 Leiner Health Products (B) 11.000%, 06/01/12 100 -- Le-Nature's (A) (B) 9.000%, 06/15/13 150 33 National Beef Packing 10.500%, 08/01/11 100 95 Pilgrim's Pride 8.375%, 05/01/17 100 88 Smithfield Foods, Ser B 8.000%, 10/15/09 100 102 ----------------------------------------------------------------------------- TOTAL FOOD, BEVERAGE & TOBACCO 779 ============================================================================= GAS/NATURAL GAS [2.2%] Colorado Interstate Gas 6.800%, 11/15/15 150 155 El Paso 7.000%, 05/15/11 275 279 7.000%, 06/15/17 150 154 Targa Resources 8.500%, 11/01/13 200 184 ----------------------------------------------------------------------------- TOTAL GAS/NATURAL GAS 772 ============================================================================= DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- INSURANCE [0.3%] USI Holdings (A) (C) 9.230%, 11/15/14 $125 $ 90 ============================================================================= MACHINERY [1.1%] Baldor Electric 8.625%, 02/15/17 125 124 Terex 8.000%, 11/15/17 50 50 7.375%, 01/15/14 100 99 Trimas 9.875%, 06/15/12 115 100 ----------------------------------------------------------------------------- TOTAL MACHINERY 373 ============================================================================= MEDICAL PRODUCTS & SERVICES [2.2%] Advanced Medical Optics 7.500%, 05/01/17 100 86 Bio-Rad Laboratories 7.500%, 08/15/13 100 100 Community Health Systems 8.875%, 07/15/15 150 151 HCA 9.250%, 11/15/16 50 52 5.750%, 03/15/14 100 82 ReAble Therapeutics Finance (A) 10.875%, 11/15/14 25 24 Tenet Healthcare 9.250%, 02/01/15 200 187 Vanguard Health Holding II 9.000%, 10/01/14 100 96 ----------------------------------------------------------------------------- TOTAL MEDICAL PRODUCTS & SERVICES 778 ============================================================================= METALS & MINING [1.5%] American Rock Salt 9.500%, 03/15/14 150 153 Freeport-McMoRan Copper & Gold 8.250%, 04/01/15 125 132 Noranda Aluminum Acquisition (A) 9.360%, 05/15/15 150 118 Novelis 7.250%, 02/15/15 150 133 ----------------------------------------------------------------------------- TOTAL METALS & MINING 536 ============================================================================= SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 31 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- HIGH YIELD BOND FUND (CONTINUED) DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- MISCELLANEOUS BUSINESS SERVICES [2.0%] Affinion Group 11.500%, 10/15/15 $150 $ 145 Allied Security Escrow 11.375%, 07/15/11 150 129 Carriage Services 7.875%, 01/15/15 200 194 Compagnie Generale de Geophysique 7.500%, 05/15/15 100 101 Lamar Media 6.625%, 08/15/15 100 88 MCBC Holdings (A) (C) 11.521%, 10/15/14 50 45 ----------------------------------------------------------------------------- TOTAL MISCELLANEOUS BUSINESS SERVICES 702 ============================================================================= MISCELLANEOUS MANUFACTURING [2.9%] AGY Holding (A) 11.000%, 11/15/14 100 90 Altra Industrial Motion 9.000%, 12/01/11 100 94 American Railcar Industries 7.500%, 03/01/14 50 44 Coleman Cable 9.875%, 10/01/12 100 83 Dresser-Rand Group 7.375%, 11/01/14 133 130 General Cable 7.125%, 04/01/17 100 96 Hawker Beechcraft Acquisition 8.500%, 04/01/15 100 103 Koppers Holdings (C) 9.875%, 11/15/14 250 217 MAAX 9.750%, 06/15/12 200 44 Mueller Water Products 7.375%, 06/01/17 100 86 ----------------------------------------------------------------------------- TOTAL MISCELLANEOUS MANUFACTURING 987 ============================================================================= PAPER & RELATED PRODUCTS [3.4%] Abitibi-Consolidated of Canada (A) 13.750%, 04/01/11 100 102 Appleton Papers, Ser B 9.750%, 06/15/14 100 95 Catalyst Paper 7.375%, 03/01/14 250 188 Cellu Tissue Holdings 9.750%, 03/15/10 100 92 DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- Domtar 7.125%, 08/15/15 $150 $ 141 Georgia-Pacific 7.700%, 06/15/15 100 94 Newark Group 9.750%, 03/15/14 200 160 Norampac Industries 6.750%, 06/01/13 100 85 Smurfit Kappa Funding 7.750%, 04/01/15 150 131 Verso Paper Holdings 9.125%, 08/01/14 100 97 ----------------------------------------------------------------------------- TOTAL PAPER & RELATED PRODUCTS 1,185 ============================================================================= PETROLEUM & FUEL PRODUCTS [10.8%] Atlas Pipeline Partners 8.125%, 12/15/15 200 203 Chesapeake Energy 6.875%, 01/15/16 100 99 6.250%, 01/15/18 100 95 Cimarex Energy 7.125%, 05/01/17 100 99 Clayton Williams Energy 7.750%, 08/01/13 150 130 Comstock Resources 6.875%, 03/01/12 150 144 Dynegy Holdings 7.750%, 06/01/19 100 93 6.875%, 04/01/11 100 98 Forest Oil 8.000%, 06/15/08 150 151 8.000%, 12/15/11 100 104 Frontier Oil (A) 6.625%, 10/01/11 150 148 Helix Energy Solutions Group (A) 9.500%, 01/15/16 100 100 MarkWest Energy Partners, Ser B 8.500%, 07/15/16 150 151 Newfield Exploration 6.625%, 09/01/14 150 148 OPTI Canada 7.875%, 12/15/14 100 98 Pacific Energy Partners 7.125%, 06/15/14 100 106 Parker Drilling 9.625%, 10/01/13 150 158 Petroplus Finance (A) 7.000%, 05/01/17 150 134 Plains Exploration & Production 7.750%, 06/15/15 150 150 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 32 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- HIGH YIELD BOND FUND (CONTINUED) DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- Pride International 7.375%, 07/15/14 $100 $ 104 Regency Energy Partners 8.375%, 12/15/13 65 66 SemGroup (A) 8.750%, 11/15/15 175 160 Southern Star Central 6.750%, 03/01/16 100 96 Southwestern Energy (A) 7.500%, 02/01/18 100 104 Swift Energy 7.625%, 07/15/11 100 99 Tesoro 6.625%, 11/01/15 100 93 Whiting Petroleum 7.000%, 02/01/14 300 297 Williams 7.625%, 07/15/19 50 53 6.375%, 10/01/10 (A) 150 154 Williams Partners 7.250%, 02/01/17 100 101 ----------------------------------------------------------------------------- TOTAL PETROLEUM & FUEL PRODUCTS 3,736 ============================================================================= PRINTING & PUBLISHING [2.6%] Dex Media (D) 8.647%, 11/15/13 200 144 Dex Media West, Ser B 8.500%, 08/15/10 100 97 Idearc 8.000%, 11/15/16 150 97 MediMedia USA (A) 11.375%, 11/15/14 50 52 R.H. Donnelley 6.875%, 01/15/13 200 122 R.H. Donnelley, Ser A-2 6.875%, 01/15/13 50 31 Reader's Digest Association (A) 9.000%, 02/15/17 75 50 Sheridan Group 10.250%, 08/15/11 150 132 Valassis Communications 8.250%, 03/01/15 140 115 Warner Music Group 7.375%, 04/15/14 100 77 ----------------------------------------------------------------------------- TOTAL PRINTING & PUBLISHING 917 ============================================================================= REAL ESTATE [0.2%] Realogy 10.500%, 04/15/14 100 67 ============================================================================= DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- REAL ESTATE INVESTMENT TRUSTS [0.4%] Host Marriott, Ser O 6.375%, 03/15/15 $150 $ 140 ============================================================================= RETAIL [2.8%] Buffets (B) 12.500%, 11/01/14 100 3 Claire's Stores 9.625%, 06/01/15 100 51 Group 1 Automotive 8.250%, 08/15/13 100 94 Landry's Restaurants 9.500%, 12/15/14 100 97 Leslie's Poolmart 7.750%, 02/01/13 100 91 NPC International 9.500%, 05/01/14 100 90 OSI Restaurant Partners (A) 10.000%, 06/15/15 100 63 Penske Auto Group 7.750%, 12/15/16 100 87 Rare Restaurant Group (A) 9.250%, 05/15/14 100 83 Rite Aid 8.125%, 05/01/10 100 98 Sbarro 10.375%, 02/01/15 50 42 Suburban Propane Partners 6.875%, 12/15/13 100 98 True Temper Sports 8.375%, 09/15/11 150 90 ----------------------------------------------------------------------------- TOTAL RETAIL 987 ============================================================================= RUBBER & PLASTIC [0.7%] Cooper Tire & Rubber 8.000%, 12/15/19 100 93 Cooper-Standard Automotive 8.375%, 12/15/14 50 38 Goodyear Tire & Rubber 9.000%, 07/01/15 98 104 ----------------------------------------------------------------------------- TOTAL RUBBER & PLASTIC 235 ============================================================================= SEMICONDUCTORS [1.1%] Amkor Technology 9.250%, 06/01/16 100 96 Flextronics International 6.250%, 11/15/14 100 92 Freescale Semiconductor 10.125%, 12/15/16 150 101 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 33 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- HIGH YIELD BOND FUND (CONTINUED) DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- Sensata Technologies 8.000%, 05/01/14 $100 $ 88 ----------------------------------------------------------------------------- TOTAL SEMICONDUCTORS 377 ============================================================================= STEEL & STEEL WORKS [1.5%] AK Steel 7.750%, 06/15/12 150 151 ArcelorMittal USA 6.500%, 04/15/14 150 154 Gerdau Ameristeel 10.375%, 07/15/11 100 105 Ryerson (A) 12.000%, 11/01/15 75 71 Steel Dynamics (A) 7.375%, 11/01/12 50 51 ----------------------------------------------------------------------------- TOTAL STEEL & STEEL WORKS 532 ============================================================================= TELEPHONES & TELECOMMUNICATIONS [5.8%] American Tower 7.125%, 10/15/12 150 153 Broadview Networks Holdings 11.375%, 09/01/12 100 95 Centennial Communications 10.125%, 06/15/13 100 99 8.125%, 02/01/14 50 47 Cincinnati Bell 8.375%, 01/15/14 150 141 Citizens Communications 7.125%, 03/15/19 100 87 Fairpoint Communications (A) 13.125%, 04/01/18 100 96 Intelsat 9.000%, 08/15/14 96 97 Level 3 Financing 9.250%, 11/01/14 125 102 MetroPCS Wireless 9.250%, 11/01/14 100 92 Nordic Telephone (A) 8.875%, 05/01/16 50 48 Qwest 7.625%, 06/15/15 289 282 Radio One 8.875%, 07/01/11 100 81 Rogers Wireless 9.625%, 05/01/11 100 111 7.250%, 12/15/12 50 54 Suncom Wireless 8.500%, 06/01/13 150 156 DESCRIPTION FACE AMOUNT (000)/SHARES VALUE (000) -------------------------------------------------------------------------------- Time Warner Telecom Holdings 9.250%, 02/15/14 $100 $ 101 Virgin Media Finance 9.125%, 08/15/16 150 134 West 11.000%, 10/15/16 55 46 ----------------------------------------------------------------------------- TOTAL TELEPHONES & TELECOMMUNICATIONS 2,022 ============================================================================= TRANSPORTATION SERVICES [2.2%] Kansas City Southern Railway 9.500%, 10/01/08 100 101 Navios Maritime Holdings 9.500%, 12/15/14 100 100 Pegasus Solutions (A) 10.500%, 04/15/15 100 80 Ship Finance International 8.500%, 12/15/13 200 203 Stena 7.000%, 12/01/16 200 190 Swift Transportation (A) (C) 12.619%, 05/15/15 200 80 ----------------------------------------------------------------------------- TOTAL TRANSPORTATION SERVICES 754 ============================================================================= WASTE DISPOSAL [0.9%] Allied Waste North America, Ser B 7.125%, 05/15/16 225 224 Waste Services 9.500%, 04/15/14 100 96 ----------------------------------------------------------------------------- TOTAL WASTE DISPOSAL 320 ============================================================================= TOTAL CORPORATE BONDS (Cost $36,968) 33,449 ======================================================================= COMMON STOCK [0.2%] BROADCASTING & CABLE [0.2%] Olympus* (E) 8,500 9 Time Warner Cable, Cl A* 1,967 49 ----------------------------------------------------------------------------- TOTAL BROADCASTING & CABLE 58 ============================================================================= BUILDING & CONSTRUCTION SUPPLIES [0.0%] Dayton Superior* 149 1 ============================================================================= SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 34 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- HIGH YIELD BOND FUND (CONCLUDED) DESCRIPTION SHARES/FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- PAPER & FOREST PRODUCTS [0.0%] Tembec* 5,625 $ 20 ============================================================================= TOTAL COMMON STOCK (Cost $221) 79 ======================================================================= CASH EQUIVALENTS [1.3%] Evergreen Select Money Market Fund, Institutional Class, 5.250%** 223,303 224 Fidelity Institutional Domestic Money Market Portfolio, Cl I, 3.140%** 223,303 223 ----------------------------------------------------------------------------- TOTAL CASH EQUIVALENTS (Cost $447) 447 ======================================================================= COMMERCIAL PAPER [0.3%] Hawker Beechcraf 9.750%, 04/01/17 $75 80 ----------------------------------------------------------------------------- TOTAL COMMERCIAL PAPER (Cost $80) 80 ======================================================================= TOTAL INVESTMENTS [98.2%] (Cost $37,716) $ 34,055 ======================================================================= PERCENTAGES ARE BASED ON NET ASSETS OF $34,689 ($ THOUSANDS). * NON-INCOME PRODUCING SECURITY. ** THE RATE SHOWN REPRESENTS THE 7-DAY EFFECTIVE YIELD AS OF MARCH 31, 2008. (A) SECURITY EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT OF 1933. THESE SECURITIES MAY BE RESOLD IN TRANSACTIONS EXEMPT FROM REGISTRATION NORMALLY TO QUALIFIED INSTITUTIONS. ON MARCH 31, 2008, THE VALUE OF THESE SECURITIES AMOUNTED TO $5,871 (000), REPRESENTING 16.9% OF THE NET ASSETS OF THE FUND. (B) IN DEFAULT ON INTEREST PAYMENTS. RATE SHOWN REPRESENTS THE LAST COUPON RATE PRIOR TO DEFAULT. (C) FLOATING RATE SECURITY -- THE RATE REPORTED IS THE RATE IN EFFECT ON MARCH, 31, 2008. (D) STEP BOND -- THE RATE REPORTED IS THE RATE IN EFFECT ON MARCH 31, 2008. THE COUPON ON A STEP BOND CHANGES ON A SPECIFIC DATE. (E) SECURITY IS FAIR VALUED. CL -- CLASS MTN -- MEDIUM TERM NOTE SER -- SERIES AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 35 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- PRIME MONEY MARKET FUND TYPE OF SECURITY WEIGHTINGS*: [THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.] Commercial Paper 44.9% Repurchase Agreements 24.8% Certificates of Deposit 12.4% Corporate Bonds 10.5% U.S. Government Agency Obligations 7.3% Cash Equivalent 0.1% * Percentages are based on total investments. -------------------------------------------------------------------------------- DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- COMMERCIAL PAPER (A) [44.9%] AGRICULTURAL PRODUCTS [1.1%] Archer Daniels 2.830%, 07/21/08 $ 27,800 $ 27,560 ============================================================================= BANKS [22.5%] Bank of America 2.630%, 09/11/08 50,000 49,413 Bank of Ireland (B) 3.029%, 07/07/08 50,000 49,597 BNP Paribas 2.936%, 07/08/08 50,000 49,605 Depfa Bank (B) 2.943%, 08/19/08 50,000 49,436 HSBC 2.940%, 06/04/08 50,000 49,741 Lloyds Bank 4.744%, 04/28/08 40,000 39,861 Natexis (B) 2.964%, 07/07/08 50,000 49,605 Rabobank USA 2.666%, 06/02/08 50,000 49,772 UBS Finance 2.967%, 05/01/08 50,000 49,877 Wells Fargo 2.427%, 04/30/08 75,000 74,854 Westpac Banking 4.693%, 01/02/09 40,000 40,000 ----------------------------------------------------------------------------- TOTAL BANKS 551,761 ============================================================================= CONSUMER PRODUCTS [2.3%] Kimberly-Clark (B) 2.204%, 04/24/08 55,700 55,622 ============================================================================= DIVERSIFIED MANUFACTURING [2.0%] Siemens Capital 2.263%, 06/12/08 50,000 49,775 ============================================================================= DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- FINANCE AUTO LOANS [1.6%] Toyota Motor Credit 4.583%, 04/30/08 $ 40,000 $ 39,856 ============================================================================= FINANCIAL SERVICES [6.1%] American Express 2.500%, 09/17/08 50,000 49,420 Dexia Delaware 3.328%, 04/22/08 50,000 49,904 General Electric Capital 2.625%, 10/30/08 50,000 49,240 ----------------------------------------------------------------------------- TOTAL FINANCIAL SERVICES 148,564 ============================================================================= PERSONAL CREDIT INSTITUTION [2.0%] ING Funding 2.665%, 09/08/08 48,200 47,637 ============================================================================= PHARMACEUTICALS [3.3%] Astrazeneca (B) 2.994%, 07/31/08 37,570 37,197 Pfizer (B) 4.494%, 05/22/08 45,000 44,720 ----------------------------------------------------------------------------- TOTAL PHARMACEUTICALS 81,917 ============================================================================= SECURITY BROKERS & DEALERS [4.0%] Citigroup Funding 4.828%, 06/25/08 50,000 49,445 Merrill Lynch 3.031%, 09/18/08 50,000 49,296 ----------------------------------------------------------------------------- TOTAL SECURITY BROKERS & DEALERS 98,741 ============================================================================= TOTAL COMMERCIAL PAPER (Cost $1,101,433) 1,101,433 ======================================================================= CORPORATE BONDS [10.5%] BANKS [6.5%] ANZ National International, MTN (B) 4.265%, 05/16/08 40,000 39,976 Barclays (C) 3.376%, 02/05/09 50,000 50,000 KeyBank 6.500%, 04/15/08 18,927 18,935 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 36 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- PRIME MONEY MARKET FUND (CONTINUED) DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- National Australian Bank, MTN (B) (C) 3.270%, 02/19/09 $ 50,000 $ 50,000 ----------------------------------------------------------------------------- TOTAL BANKS 158,911 ============================================================================= FINANCIAL SERVICES [2.6%] American Honda, MTN (B) (C) 3.058%, 05/12/08 30,000 30,022 3.225%, 02/05/09 35,000 35,000 ----------------------------------------------------------------------------- TOTAL FINANCIAL SERVICES 65,022 ============================================================================= INSURANCE [0.5%] Metropolitan Life Global Funding I (B) 2.600%, 06/19/08 12,000 11,932 ============================================================================= SECURITY BROKERS & DEALERS [0.9%] Credit Suisse USA (C) 3.186%, 06/02/08 22,000 22,004 ============================================================================= TOTAL CORPORATE BONDS (Cost $257,869) 257,869 ======================================================================= U.S. GOVERNMENT AGENCY OBLIGATIONS [7.3%] FHLB 5.125%, 07/23/08 8,275 8,285 FHLB DN (D) 2.133%, 04/18/08 75,000 74,931 4.226%, 05/21/08 25,000 24,856 3.863%, 12/23/08 47,729 46,417 FHLMC DN (D) 4.322%, 04/28/08 25,000 24,921 ----------------------------------------------------------------------------- TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (Cost $179,410) 179,410 ======================================================================= CERTIFICATES OF DEPOSIT [12.4%] Bank of America (B) 3.010%, 04/01/08 50,000 50,000 Bank of Ireland 2.869%, 01/26/09 50,000 50,000 Bank of Nova Scotia 3.000%, 05/01/08 50,000 49,998 Deutsche Bank 3.050%, 04/30/08 50,000 50,000 DESCRIPTION FACE AMOUNT (000)/SHARES VALUE (000) -------------------------------------------------------------------------------- Royal Bank of Scotland 3.100%, 05/07/08 $ 50,000 $ 50,002 Toronto Dominion Bank 2.610%, 10/20/08 53,500 53,544 ----------------------------------------------------------------------------- TOTAL CERTIFICATES OF DEPOSIT (Cost $303,544) 303,544 ======================================================================= CASH EQUIVALENT [0.1%] Goldman Sachs Financial Square Funds-Government Fund, 2.640%* 2,872,158 2,872 ----------------------------------------------------------------------------- TOTAL CASH EQUIVALENT (Cost $2,872) 2,872 ======================================================================= REPURCHASE AGREEMENTS (E) [24.9%] Barclays 2.300%, dated 03/31/08, repurchased on 04/01/08, repurchase price $259,516,515 (collateralized by U.S. Government agency obligations, ranging in par value $8,457,000- $105,690,000, 3.500%- 5.410%, 02/05/10-01/13/23; with total market value $284,690,140) 259,500 259,500 Deutsche Bank 2.250%, dated 03/31/08, repurchased on 04/01/08, repurchase price $150,009,375 (collateralized by U.S. Government agency obligations, ranging in par value $30,809,000- $59,000,000, 1.847%- 4.750%,04/16/08-01/15/26; with total market value $153,000,085) 150,000 150,000 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 37 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- PRIME MONEY MARKET FUND (CONCLUDED) DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- JPMorgan Chase 2.450%, dated 03/31/08, repurchased on 04/01/08, repurchase price $204,013,611 (collateralized by U.S. Government agency obligations, ranging in par value $12,575,000- $90,000,000, 4.875%- 5.500%, 01/14/11-10/15/20; with total market value $204,000,974) $200,000 $ 200,000 ----------------------------------------------------------------------------- TOTAL REPURCHASE AGREEMENTS (Cost $609,500) 609,500 ======================================================================= TOTAL INVESTMENTS [100.1%] (Cost $2,454,628) $ 2,454,628 ======================================================================= PERCENTAGES ARE BASED ON NET ASSETS OF $2,453,259 ($ THOUSANDS). * THE RATE SHOWN REPRESENTS THE 7-DAY EFFECTIVE YIELD AS OF MARCH 31, 2008. (A) THE RATE REPORTED IS THE EFFECTIVE YIELD AT TIME OF PURCHASE. (B) SECURITY EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT OF 1933. THESE SECURITIES MAY BE RESOLD IN TRANSACTIONS EXEMPT FROM REGISTRATION NORMALLY TO QUALIFIED INSTITUTIONS. ON MARCH 31, 2008, THE VALUE OF THESE SECURITIES AMOUNTED TO $503,107(000), REPRESENTING 20.5% OF THE NET ASSETS OF THE FUND. (C) FLOATING RATE SECURITY. THE RATE REPORTED IS THE RATE IN EFFECT ON MARCH, 31, 2008. (D) ZERO COUPON SECURITY. THE RATE REPORTED IS THE EFFECTIVE YIELD AT TIME OF PURCHASE. (E) TRI-PARTY REPURCHASE AGREEMENT. DN -- DISCOUNT NOTE FHLB -- FEDERAL HOME LOAN BANK FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION MTN -- MEDIUM TERM NOTE SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 38 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- GOVERNMENT MONEY MARKET FUND TYPE OF SECURITY WEIGHTINGS*: [THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.] U.S. Government Agency Obligations 71.8% Repurchase Agreements 28.2% * Percentages are based on total investments. -------------------------------------------------------------------------------- DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- U.S. GOVERNMENT AGENCY OBLIGATIONS [71.8%] FAMC, MTN 4.700%, 10/16/08 $ 10,000 $ 10,000 FFCB 3.000%, 04/15/08 1,800 1,798 3.375%, 07/15/08 12,000 11,939 FHLB 4.125%, 04/18/08 99,630 99,601 4.350%, 04/28/08 22,710 22,710 4.800%, 05/02/08 25,000 24,996 4.300%, 06/03/08 17,550 17,550 2.750%, 06/06/08 50,000 50,000 4.750%, 06/11/08 25,000 25,013 5.125%, 06/18/08 25,240 25,273 2.700%, 07/07/08 50,000 50,000 2.700%, 07/08/08 50,000 50,101 5.000%, 07/16/08 25,000 25,037 5.125%, 07/23/08 50,000 50,060 2.600%, 08/06/08 25,000 25,000 5.125%, 08/08/08 100,000 100,541 5.250%, 08/14/08 25,000 25,111 2.935%, 08/15/08 (A) 20,000 20,005 3.875%, 08/22/08 50,000 50,262 5.250%, 12/24/08 40,000 40,604 2.900%, 03/17/09 50,000 50,000 FHLB DN (B) 1.953%, 04/01/08 213,995 213,995 1.751%, 04/02/08 100,000 99,995 2.262%, 04/11/08 200,000 199,875 1.927%, 04/15/08 200,000 199,850 1.847%, 04/16/08 190,674 190,527 2.133%, 04/18/08 39,000 38,961 2.134%, 04/23/08 100,000 99,870 2.003%, 04/25/08 100,000 99,867 2.004%, 04/30/08 150,000 149,758 2.719%, 05/14/08 50,000 49,839 5.214%, 06/13/08 12,533 12,407 2.563%, 08/13/08 50,000 49,529 2.051%, 09/19/08 49,000 48,527 FHLMC DN (B) 2.641%, 05/09/08 23,000 22,936 3.522%, 11/10/08 50,000 48,941 FNMA 4.000%, 07/25/08 14,500 14,464 5.000%, 09/15/08 47,565 47,676 FNMA DN (B) 2.207%, 05/07/08 108,400 108,162 ----------------------------------------------------------------------------- TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (Cost $2,470,780) 2,470,780 ======================================================================= DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- REPURCHASE AGREEMENTS (C) [28.1%] Barclays 2.300%, dated 03/31/08, repurchased on 04/01/08, repurchase price $444,228,379 (collateralized by U.S. Government agency obligations, ranging in par value $28,935,000- $96,117,000, 4.750%-5.375%, 01/16/09-02/15/17; with total market value $453,084,007) $444,200 $ 444,200 Deutsche Bank 2.250%, dated 03/31/08, repurchased on 04/01/08, repurchase price $425,026,563 (collateralized by U.S. Government agency obligations, ranging in par value $2,070,000- $187,499,500, 4.700%-6.000%, 05/15/08-12/11/25; with total market value $433,500,005) 425,000 425,000 UBS Warburg 2.300%, dated 03/31/08, repurchased on 04/01/08, repurchase price $100,006,389 (collateralized by a Freddie Mac obligation, par value $102,035,000, 4.170%, 04/07/08; with total market value $102,004,390) 100,000 100,000 ----------------------------------------------------------------------------- TOTAL REPURCHASE AGREEMENTS (Cost $969,200) 969,200 ======================================================================= TOTAL INVESTMENTS [99.9%] (Cost $3,439,980) $ 3,439,980 ======================================================================= PERCENTAGES ARE BASED ON NET ASSETS OF $3,443,188 ($ THOUSANDS). (A) THE RATE REPORTED IS THE EFFECTIVE YIELD AT TIME OF PURCHASE. (B) ZERO COUPON SECURITY. THE RATE REPORTING IS THE EFFECTIVE YIELD AT TIME OF PURCHASE. (C) TRI-PARTY REPURCHASE AGREEMENT. DN -- DISCOUNT NOTE FAMC -- FEDERAL AGRICULTURAL MORTGAGE CORPORATION FFCB -- FEDERAL FARM CREDIT BANK FHLB -- FEDERAL HOME LOAN BANK FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION MTN -- MEDIUM TERM NOTE SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 39 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT MONEY MARKET FUND ISSUER INDUSTRY WEIGHTINGS*: [THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.] General Obligation 18.4% Education 12.8% Water 11.5% Power 11.4% General Revenue 11.2% Industrial Development 8.6% Transportation 8.5% Healthcare 5.4% Utilities 5.0% Public Facilities 4.0% Short-Term Investment 1.5% Housing 1.4% Equipment 0.3% * Percentages based on total investments. -------------------------------------------------------------------------------- DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- MUNICIPAL BONDS [89.9%] CALIFORNIA [83.8%] ABAG, Finance Authority for Non-Profit Corporations, Public Policy Institute, Ser A, RB (A) (B) (C) 2.050%, 11/01/31 $ 2,870 $ 2,870 ABAG, Finance Authority for Non-Profit Corporations, Ser C, COP (A) (B) (C) 0.920%, 10/01/27 5,120 5,120 ABAG, Finance Authority for Non-Profit Corporations, Ser D, COP (A) (B) (C) 0.920%, 10/01/27 2,840 2,840 Anaheim, Multi-Family Housing Authority, Heritage Village Apartments Project, Ser A, RB (A) (B) (E) 1.940%, 07/15/33 4,685 4,685 Berkeley, YMCA Project, RB 1.900%, 06/01/23 1,795 1,795 California State, Bay Area Governments Association, Windemere Ranch Assessment Project, Ser 1, SAB Pre-Refunded @ 102 (D) 7.300%, 09/02/08 9,865 10,222 California State, Bay Area Toll Authority, San Francisco Bay Area Project, Ser B, RB, AMBAC (A) (B) 3.250%, 04/01/39 4,500 4,500 DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- California State, Bay Area Toll Authority, San Francisco Bay Area Project, Ser B-1, RB, AMBAC (A) (B) 3.250%, 04/01/45 $10,285 $ 10,285 California State, Bay Area Toll Authority, San Francisco Bay Area Project, Ser G-2, RB, AMBAC (A) (B) 2.450%, 04/01/47 4,800 4,800 California State, Community College Financing Authority, Ser A, TRAN 4.500%, 06/30/08 7,500 7,515 California State, Daily Kindergarten University Project, Ser A-1, GO (A) (B) (C) 0.900%, 05/01/34 13,600 13,600 California State, Daily Kindergarten University Project, Ser A-2, GO (A) (B) (C) 1.050%, 05/01/34 6,730 6,730 California State, Daily Kindergarten University Project, Ser A-3, GO (A) (B) (C) 1.400%, 05/01/34 2,200 2,200 California State, Daily Kindergarten University Project, Ser B-1, GO (A) (B) (C) 0.900%, 05/01/34 1,700 1,700 California State, Daily Kindergarten University Project, Ser B-3, GO (A) (B) (C) 1.090%, 05/01/34 2,300 2,300 California State, Department of Water Resource & Power, Ser B-1, RB (A) (B) (C) 0.900%, 05/01/22 7,870 7,870 California State, Department of Water Resource & Power, Ser B-5, RB (A) (B) (C) 0.920%, 05/01/22 1,000 1,000 California State, Department of Water Resource & Power, Ser B-6, RB (A) (B) (C) 1.090%, 05/01/22 1,725 1,725 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 40 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT MONEY MARKET FUND (CONTINUED) DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- California State, Department of Water Resource & Power, Ser C-15, RB (A) (B) (C) 1.600%, 05/01/22 $ 5,000 $ 5,000 California State, Department of Water Resource & Power, Sub-Ser F-2, RB (A) (B) (C) 0.900%, 05/01/20 11,655 11,655 California State, Department of Water Resource & Power, Sub-Ser F-3, RB (A) (B) (C) 0.900%, 05/01/21 1,600 1,600 California State, Department of Water Resource & Power, Sub-Ser F-4, RB (A) (B) (C) 0.900%, 05/01/22 6,775 6,775 California State, Department of Water Resource & Power, Sub-Ser G-1, RB (A) (B) (C) 1.720%, 05/01/11 1,000 1,000 California State, Department of Water Resource & Power, Sub-Ser G-3, RB, FSA (B) (C) 1.750%, 05/01/16 11,050 11,050 California State, Department of Water Resource & Power, Sub-Ser G-4, RB, FSA (B) (C) 1.900%, 05/01/16 10,000 10,000 California State, Department of Water Resources, Ser C-7, RB, FSA (B) (C) 1.750%, 05/01/22 4,100 4,100 California State, Department of Water Resources, Sub-Ser F-1, RB (A) (B) (C) 1.087%, 05/01/19 2,300 2,300 California State, Economic Development Financing Authority, KQED Incorporated Project, RB (A) (B) (C) 1.950%, 04/01/20 1,200 1,200 California State, Economic Recovery Authority, Ser C, GO (B) (C) 0.920%, 07/01/23 16,335 16,335 California State, Economic Recovery Authority, Ser C-1, GO (B) (C) 1.400%, 07/01/23 13,590 13,590 DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- California State, Economic Recovery Authority, Ser C-16, GO, FSA (B) (C) 1.750%, 07/01/23 $ 3,700 $ 3,700 California State, Economic Recovery Authority, Ser C-4, GO (B) (C) 1.050%, 07/01/23 12,780 12,780 California State, Educational Facilities Authority, Chapman University Project, RB (A) (B) (C) 1.950%, 12/01/30 1,000 1,000 California State, Educational Facilities Authority, Stanford University Project, Ser S-4, RB (B) (C) 0.800%, 11/01/50 2,700 2,700 California State, Educational Facilities Authority, University of San Francisco Project, RB (A) (B) (C) 1.900%, 05/01/30 5,100 5,100 California State, Health Facilities Financing Authority, Adventist Health Systems Project, Ser B, RB (A) (B) (C) 0.900%, 09/01/25 4,400 4,400 California State, Health Facilities Financing Authority, Adventist Hospital Project, Ser A, RB, MBIA (B) (C) 1.850%, 09/01/28 10,990 10,990 California State, Health Facilities Financing Authority, Adventist Hospital Project, Ser B, RB, MBIA (B) (C) 1.850%, 09/01/28 6,135 6,135 California State, Health Facilities Financing Authority, Catholic Healthcare Project, Ser B, RB, MBIA (B) (C) 3.250%, 07/01/16 5,570 5,570 California State, Health Facilities Financing Authority, Catholic Healthcare Project, Ser C, RB, MBIA (B) (C) 3.250%, 07/01/20 13,150 13,150 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 41 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT MONEY MARKET FUND (CONTINUED) DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- California State, Infrastructure & Economic Authority, Contemporary Jewish Museum Project, RB (A) (B) (C) 0.900%, 12/01/36 $ 5,000 $ 5,000 California State, Infrastructure & Economic Authority, India Community Center Project, RB (A) (B) (C) 0.900%, 12/01/36 1,700 1,700 California State, Infrastructure & Economic Authority, J Paul Getty Trust Project, Ser B, RB (B) (C) 0.900%, 10/01/23 7,190 7,190 California State, Infrastructure & Economic Authority, J Paul Getty Trust Project, Ser B, RB (B) (C) 0.800%, 04/01/33 6,200 6,200 California State, Infrastructure & Economic Authority, J Paul Getty Trust Project, Ser D, RB (B) (C) 0.900%, 04/01/33 3,700 3,700 California State, Infrastructure & Economic Authority, RAND Corporation Project, Ser B, RB, AMBAC (B) (C) 1.750%, 04/01/42 6,935 6,935 California State, RAN 4.000%, 06/30/08 19,000 19,035 California State, Ser A-1, GO (A) (B) (C) 1.400%, 05/01/33 4,050 4,050 California State, Ser A-2, GO (A) (B) (C) 0.850%, 05/01/33 18,350 18,350 California State, Ser A-3, GO (A) (B) (C) 0.920%, 05/01/33 4,700 4,700 California State, Ser B, Sub-Ser B-6, GO (A) (B) (C) 0.900%, 05/01/40 14,655 14,655 California State, Ser B, Sub-Ser B-7, GO (A) (B) (C) 0.900%, 05/01/40 19,075 19,075 DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- California State, Ser B-1, GO (A) (B) (C) 1.770%, 05/01/33 $ 7,000 $ 7,000 California State, Ser B-3, GO (A) (B) (C) 1.930%, 05/01/33 6,100 6,100 California State, Ser C-2, GO (A) (B) (C) 1.950%, 05/01/33 7,700 7,700 California State, Sub-Ser B-3, GO (A) (B) (C) 1.600%, 05/01/40 3,145 3,145 California State, Sub-Ser B-4, GO (A) (B) (C) 1.700%, 05/01/40 6,480 6,480 California State, Weekly Kindergarten University Project, Ser A-8, GO (A) (B) (C) 1.750%, 05/01/34 12,400 12,400 California State, Weekly Kindergarten University Project, Ser B-5, GO (A) (B) (C) 1.950%, 05/01/34 11,825 11,825 California Statewide, Communities Development Authority, Masters College Project, RB (A) (B) (C) 1.950%, 02/01/37 3,000 3,000 California Statewide, Communities Development Authority, North Peninsula Jewish Project, RB (A) (B) (C) 0.900%, 07/01/34 6,100 6,100 California Statewide, Communities Development Authority, Park Century School Project, RB (A) (B) (C) 1.950%, 11/01/32 4,000 4,000 East Bay, Municipal Utilities District Authority, Sub-Ser A, RB, FSA (B) (C) 1.900%, 06/01/25 9,960 9,960 East Bay, Municipal Utilities District Authority, Sub-Ser C2, RB (B) (C) 1.750%, 06/01/26 5,000 5,000 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 42 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT MONEY MARKET FUND (CONTINUED) DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- East Bay, Municipal Utilities District Authority, Sub-Ser C3, RB (B) (C) 1.750%, 06/01/26 $ 2,775 $ 2,775 East Bay, Municipal Utilities District Authority, Sub-Ser, RB, MBIA Pre-Refunded @ 101 (D) 5.000%, 06/01/08 1,000 1,013 East Bay, Municipal Utilities District Authority, Sub-Ser, RB, MBIA Pre-Refunded @ 101 (D) 5.000%, 06/01/08 700 710 Eastern California, Municipal Water District, Ser B, COP, MBIA (B) (C) 3.250%, 07/01/33 27,545 27,545 Fremont, Family Center Finance Project, COP (A) (B) (C) 1.930%, 08/01/28 4,130 4,130 Fremont, Office Building Improvement & Fire Equipment Project, COP (A) (B) (C) 1.930%, 08/01/30 3,280 3,280 Fresno, Palm Lakes Apartment Project, RB (A) (B) (C) 2.100%, 05/01/15 3,615 3,615 Glendale, Police Building Project, COP (B) (C) 1.850%, 06/01/30 14,100 14,100 Grant, Joint Union High School District, School Facility Bridge Funding Program, COP, FSA (B) (C) 2.100%, 09/01/34 1,000 1,000 Huntington Beach, Union High School District, School Facility Bridge Funding Program, COP, FSA (B) (C) 2.100%, 09/01/28 1,890 1,890 Irvine Ranch,Water District #140-240-105-250, GO (A) (B) (C) 1.090%, 04/01/33 4,125 4,125 Irvine Ranch,Water District #140-240-105-250, GO (A) (B) (C) 0.900%, 01/01/21 3,100 3,100 DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- Irvine Ranch,Water District Authority, Capital Improvement Project, COP (A) (B) (C) 0.920%, 08/01/16 $ 1,700 $ 1,700 Irvine, Improvement Board, Act 1915 Project, District #03-19, Ser A, SAB (A) (B) (C) 1.090%, 09/02/29 9,388 9,388 Irvine, Improvement Board, Act 1915 Project, District #03-19, Ser B, SAB (A) (B) (C) 0.900%, 09/02/29 3,629 3,629 Irvine, Improvement Board, Act 1915 Project, District #04-20, Ser A, RB (A) (B) (C) 1.100%, 09/02/30 6,760 6,760 Irvine, Improvement Board, Act 1915 Project, District #05-21, Ser A, RB (A) (B) (C) 0.900%, 09/02/31 11,680 11,680 Irvine, Improvement Board, Act 1915 Project, District #07-22, Ser A, RB (A) (B) (C) 0.900%, 09/02/32 17,050 17,050 Irvine, Improvement Board, Act 1915 Project, District #85-7, Ser A, SAB, FSA (B) (C) 0.900%, 09/02/32 3,420 3,420 Irvine, Improvement Board, Act 1915 Project, District #87-8, SAB (A) (B) (C) 1.100%, 09/02/24 2,845 2,845 Irvine, Improvement Board, Act 1915 Project, District #89-10, SAB (A) (B) (C) 1.110%, 09/02/15 3,280 3,280 Irvine, Improvement Board, Act 1915 Project, District #93-14, SAB (A) (B) (C) 0.900%, 09/02/25 4,100 4,100 Las Virgenes, Unified School District, COP, FSA (B) (C) 1.850%, 07/01/33 7,960 7,960 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 43 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT MONEY MARKET FUND (CONTINUED) DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- Lemon Grove, Multifamily Housing Authority, Hillside Terrace Project, Ser A, RB (B) (C) (E) 1.720%, 02/15/31 $ 4,955 $ 4,955 Los Angeles County, Metropolitan Transportation Authority, Proposition C, Ser A, RB, MBIA (B) (C) 3.250%, 07/01/20 17,500 17,500 Los Angeles County, TRAN 4.500%, 06/30/08 6,000 6,013 Los Angeles, Department of Water & Power, Sub-Ser B-1, RB (B) (C) 1.470%, 07/01/35 7,000 7,000 Los Angeles, Department of Water & Power, Sub-Ser B-2, RB (B) (C) 1.090%, 07/01/35 17,250 17,250 Los Angeles, TRAN 4.500%, 06/30/08 7,000 7,014 Los Angeles, Unified School District, Ser A, GO, FGIC Pre-Refunded @ 102 (D) 5.000%, 07/01/08 1,000 1,027 Los Angeles, Unified School District, Ser A-1,TRAN 4.000%, 12/29/08 17,500 17,608 Los Angeles, Water & Power Resource Authority, Power System Project, Sub-Ser A-7, RB (B) (C) 1.600%, 07/01/35 15,000 15,000 Los Angeles, Water & Power Resource Authority, Sub-Ser B-2, RB (B) (C) 1.350%, 07/01/34 12,600 12,600 Los Angeles,Water & Power Resource Authority, Sub-Ser B-3, RB (B) (C) 0.900%, 07/01/34 24,750 24,750 Los Angeles,Water & Power Resource Authority, Sub-Ser B-6, RB (B) (C) 0.950%, 07/01/34 12,900 12,900 Moorpark, Unified School District, Ser A, COP, FSA (B) (C) 2.100%, 11/01/28 1,000 1,000 DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- Oakland, Capital Equipment Project, COP (A) (B) (C) 1.850%, 12/01/15 $ 3,300 $ 3,300 Oakland-Alameda County, Coliseum Project, Ser C-1, RB (A) (B) (C) 1.930%, 02/01/25 15,000 15,000 Orange County, Apartment Development Authority, Riverbend Apartments Project, Ser B, RB (B) (C) (E) 1.940%, 12/01/29 5,000 5,000 Orange County, Improvement Board Act, Assessment District No. 01-1, Ser A, SAB (A) (B) (C) 1.100%, 09/02/33 500 500 Orange County, Improvement Board Act, Assessment District No. 88, SAB (A) (B) (C) 0.950%, 09/02/18 1,100 1,100 Orange County, Sanitation District Authority, Ser A, COP (B) (C) 1.100%, 08/01/29 10,420 10,420 Orange County, Sanitation District Authority, Ser B, COP (B) (C) 1.100%, 08/01/30 1,400 1,400 Orange County, Water District Authority, Ser A, COP (B) (C) 1.930%, 08/01/42 2,800 2,800 Pasadena, Public Financing Authority, Rose Bowl Refinancing & Improvement Project, RB (A) (B) (C) 1.650%, 12/01/23 17,425 17,425 Riverside County, Public Facilities Authority, Ser C, COP (A) (B) (C) 1.950%, 12/01/15 13,500 13,500 Riverside, Unified School District, School Facility Bridge Funding Project, Ser C, COP, FSA (B) (C) 2.100%, 09/01/27 1,610 1,610 Sacramento County, Ser A, TRAN 4.250%, 07/09/08 5,000 5,008 Sacramento County, TRAN 4.500%, 07/09/08 6,400 6,420 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 44 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT MONEY MARKET FUND (CONTINUED) DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- San Diego County, Museum of Art Project, COP (A) (B) (C) 1.950%, 09/01/30 $ 1,400 $ 1,400 San Diego County, Regional Transportation Commission, Ser B, RB (B) (C) 1.800%, 04/01/38 13,650 13,650 San Diego County, Regional Transportation Commission, Ser C, RB (B) (C) 1.800%, 04/01/38 5,000 5,000 San Diego, Unified School District, Ser A, TRAN 4.500%, 07/22/08 6,000 6,015 San Francisco (City & County), Moscone Center Expansion Project, Ser 2, RB, AMBAC (B) (C) 4.500%, 04/01/30 1,125 1,125 San Francisco (City & County), Unified School District, TRAN 4.000%, 11/14/08 4,000 4,016 San Francisco, Bay Area Toll Authority, Ser A, RB, AMBAC (B) (C) 4.500%, 04/01/36 12,450 12,450 San Francisco, Bay Area Toll Authority, Ser A-1, RB, AMBAC (B) (C) 4.500%, 04/01/45 5,000 5,000 San Francisco, Bay Area Toll Authority, Ser C, RB, AMBAC (B) (C) 4.750%, 04/01/25 5,650 5,650 San Francisco, Bay Area Toll Authority, Ser G-3, RB, AMBAC (B) (C) 2.450%, 04/01/47 5,000 5,000 San Francisco, Bay Area Transit Financing Authority, RB Pre-Refunded @ 101 (D) 5.500%, 07/01/08 1,285 1,309 San Jose, Redevelopment Agency, Merged Area Redevelopment Project, Ser A, RB (A) (B) (C) 1.890%, 07/01/26 7,750 7,750 Santa Clara County, Financing Authority, VMC Facility Replacement Project, Ser B, RB (B) (C) 1.750%, 11/15/25 13,475 13,475 DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- Santa Clara Valley, Transportation Authority, Ser A, RB, AMBAC (B) (C) 3.750%, 06/01/26 $ 6,300 $ 6,300 Santa Cruz County, Board of Education, TRAN 4.250%, 06/30/08 3,000 3,004 Santa Cruz County, TRAN 4.500%, 07/11/08 5,000 5,011 Santa Monica-Malibu, Unified School District, Election of 2006 Project, Ser A, GO 4.000%, 08/01/08 4,000 4,008 Sequoia, Unified High School District, TRAN 4.250%, 07/03/08 3,000 3,004 Southern California, Metropolitan Water District Authority, Ser 1, RB (B) (C) 1.090%, 07/01/35 13,900 13,900 Southern California, Metropolitan Water District Authority, Ser A, RB (B) (C) 1.630%, 07/01/25 3,800 3,800 Southern California, Metropolitan Water District Authority, Ser B, RB (B) (C) 1.750%, 07/01/27 4,200 4,200 Southern California, Metropolitan Water District Authority, Ser C-1, RB (B) (C) 1.100%, 07/01/36 6,500 6,500 Southern California, Metropolitan Water District Authority, Ser C-1, RB (B) (C) 1.950%, 07/01/30 5,000 5,000 Southern California, Metropolitan Water District Authority, Ser C-2, RB (B) (C) 0.800%, 07/01/36 9,200 9,200 Southern California, Metropolitan Water District Authority, Ser C-3, RB (B) (C) 1.920%, 07/01/30 8,395 8,395 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 45 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT MONEY MARKET FUND (CONTINUED) DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- Southern California, Metropolitan Water District Authority, Water Works Authorization Project, Ser B, RB (B) (C) 1.750%, 07/01/28 $ 8,900 $ 8,900 Southern California, Public Power Authority, Southern Transmission Project, Ser A, RB, FSA (B) (C) 2.050%, 07/01/23 6,000 6,000 Turlock, Irrigation District, Capital Improvement & Refunding Project, COP (A) (B) (C) 0.950%, 01/01/31 9,760 9,760 Tustin, Unified School District, Community Facilities Project, District #97-1, Special Tax Pre-Refunded @ 102 (D) 6.375%, 09/01/08 2,000 2,065 University of California, Regents Medical Center, Ser B-1, RB (B) (C) 1.100%, 05/15/32 1,800 1,800 Ventura County,TRAN 4.500%, 07/01/08 5,000 5,011 Western Riverside County, Regional Wastewater Authority, Regional Wastewater Treatment Project, RB (A) (B) (C) 1.100%, 04/01/28 1,500 1,500 ----------------------------------------------------------------------------- TOTAL CALIFORNIA 991,580 ============================================================================= COLORADO [0.4%] Colorado, Educational & Cultural Facilities Authority, National Jewish Federal Board Program, Ser A-1, RB (A) (B) (C) 1.300%, 09/01/33 3,110 3,110 Colorado, Educational & Cultural Facilities Authority, National Jewish Federal Board Program, Ser A-4, RB (A) (B) (C) 1.300%, 02/01/34 1,550 1,550 ----------------------------------------------------------------------------- TOTAL COLORADO 4,660 ============================================================================= DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- CONNECTICUT [1.9%] Connecticut State, Health & Educational Facility Authority, Yale University Project, Ser V-1, RB (B) (C) 1.150%, 07/01/36 $ 3,000 $ 3,000 Connecticut State, Health & Educational Facility Authority, Yale University Project, Ser V-2, RB (B) (C) 1.150%, 07/01/36 700 700 Connecticut State, Health & Educational Facility Authority, Yale University Project, Ser X-2, RB (B) (C) 1.745%, 07/01/37 6,000 6,000 Connecticut State, Health & Educational Facility Authority, Yale University Project, Ser Y-2, RB (B) (C) 1.150%, 07/01/35 10,000 10,000 Connecticut State, Health & Educational Facility Authority, Yale University Project, Ser Y-3, RB (B) (C) 1.150%, 07/01/35 3,000 3,000 ----------------------------------------------------------------------------- TOTAL CONNECTICUT 22,700 ============================================================================= ILLINOIS [1.1%] Illinois State, Development Finance Authority, Museum Contemporary Art Project, RB (A) (B) (C) 2.150%, 02/01/29 2,300 2,300 Illinois State, Finance Authority, Northwestern Memorial Project, Sub-Ser B-1, RB (B) (C) 1.250%, 08/15/38 5,000 5,000 Illinois State, Finance Authority, Northwestern University Project, Sub-Ser A, RB (B) (C) 1.950%, 12/01/34 4,600 4,600 University of Illinois, Auxiliary Facilities Systems Project, Ser B, RB, FSA (B) (C) 2.050%, 04/01/35 1,000 1,000 ----------------------------------------------------------------------------- TOTAL ILLINOIS 12,900 ============================================================================= SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 46 schedule of investments MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT MONEY MARKET FUND (CONCLUDED) DESCRIPTION FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- MASSACHUSETTS [2.0%] Massachusetts State, Development Finance Agency, Harvard University Project, Ser HH, RB (B) (C) 1.500%, 07/15/33 $ 5,950 $ 5,950 Massachusetts State, Health & Educational Facilities Authority, Harvard University Project, Ser R, RB (B) (C) 0.800%, 11/01/49 17,045 17,045 ----------------------------------------------------------------------------- TOTAL MASSACHUSETTS 22,995 ============================================================================= NORTH CAROLINA [0.3%] North Carolina State, Educational Facilities Finance Agency, Charlotte Day School Project, RB (A) (B) (C) 2.100%, 08/01/20 3,135 3,135 ============================================================================= VIRGINIA [0.4%] University of Virginia, Ser A, RB (B) (C) 2.050%, 06/01/34 4,965 4,965 ============================================================================= TOTAL MUNICIPAL BONDS (Cost $1,062,935) 1,062,935 ============================================================================= COMMERCIAL PAPER (F) [1.3%] California State, College & University Improvements, Ser B, RB 2.060%, 06/02/08 10,000 10,000 Contra Costa, Water District Authority, Ser A, RB 2.700%, 04/07/08 6,150 6,150 ----------------------------------------------------------------------------- TOTAL COMMERCIAL PAPER (Cost $16,150) 16,150 ======================================================================= TOTAL INVESTMENTS [91.2%] (Cost $1,079,085) $ 1,079,085 ======================================================================= DESCRIPTION -------------------------------------------------------------------------------- PERCENTAGES ARE BASED ON NET ASSETS OF $1,182,667 ($ THOUSANDS). (A) SECURITIES ARE HELD IN CONJUNCTION WITH A LETTER OF CREDIT FROM A MAJOR BANK OR FINANCIAL INSTITUTION. (B) FLOATING RATE SECURITY -- THE RATE REPORTED IS THE RATE IN EFFECT ON MARCH 31, 2008. (C) PUT AND DEMAND FEATURE -- THE DATE REPORTED IS THE FINAL MATURITY, NOT THE NEXT RESET OR PUT DATE. (D) PRE-REFUNDED SECURITY -- THE MATURITY DATE SHOWN IS THE PRE-REFUNDED DATE. (E) SECURITIES ARE COLLATERALIZED UNDER AN AGREEMENT FROM FHLMC/FNMA. (F) THE RATE REPORTED IS THE EFFECTIVE YIELD AT TIME OF PURCHASE. ABAG -- ASSOCIATION OF BAY AREA GOVERNMENTS AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY COP -- CERTIFICATE OF PARTICIPATION FGIC -- FINANCIAL GUARANTY INSURANCE COMPANY FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION FSA -- FINANCIAL SECURITY ASSISTANCE GO -- GENERAL OBLIGATION MBIA -- MUNICIPAL BOND INVESTMENT ASSOCIATION RAN -- REVENUE ANTICIPATION NOTE RB -- REVENUE BOND SAB -- SPECIAL ASSESSMENT BOND SER -- SERIES TRAN -- TAX & REVENUE ANTICIPATION NOTE SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 47 statements of assets and liabilities (000) MARCH 31, 2008 (UNAUDITED) --------------------------------------------------------------------------------
Large Cap Value Large Cap Growth RCB Small Cap Multi-Asset Equity Fund Equity Fund Value Fund Fund* ----------------------------------------------------------------- ASSETS: Cost of securities (including repurchase agreements) $ 107,020 $ 44,968 $ 45,138 $ 22,650 ==================================================================================================================================== Investments in securities, at value $ 112,762 $ 49,955 $ 38,336 $ 21,392 Repurchase agreements at value -- -- 1,731 1,000 Receivable for investment securities sold 1,652 989 -- 162 Income receivable 209 35 187 35 Receivable for capital shares sold 150 73 69 -- Deferred offering costs -- -- -- 58 Prepaid expenses 5 2 7 -- ------------------------------------------------------------------------------------------------------------------------------------ Total Assets 114,778 51,054 40,330 22,647 ------------------------------------------------------------------------------------------------------------------------------------ LIABILITIES: Payable for investment securities purchased 3,059 279 254 -- Payable for income distributions 146 21 -- 33 Payable for capital shares redeemed 26 -- 9 -- Investment adviser fees payable 58 28 29 9 Shareholder servicing & distribution fees payable 26 14 51 7 Administrative fees payable 4 2 2 1 Accrued expenses 5 3 8 2 ------------------------------------------------------------------------------------------------------------------------------------ Total Liabilities 3,324 347 353 52 ------------------------------------------------------------------------------------------------------------------------------------ NET ASSETS $ 111,454 $ 50,707 $ 39,977 $ 22,595 ==================================================================================================================================== NET ASSETS Paid-in Capital (unlimited authorization -- $0.01 par value) $ 103,907 $ 47,907 $ 43,618 $ 23,100 Undistributed net investment income -- 10 210 -- Accumulated net realized gain (loss) on investments 1,805 (2,197) 1,220 (247) Net unrealized appreciation (depreciation) on investments 5,742 4,987 (5,071) (258) ------------------------------------------------------------------------------------------------------------------------------------ NET ASSETS $ 111,454 $ 50,707 $ 39,977 $ 22,595 ==================================================================================================================================== Institutional Class Shares ($Dollars): Net Assets $98,074,424 $37,781,860 $ 4,979,585 $10,400,220 Total shares outstanding at end of period 10,739,448 4,658,079 262,245 978,224 Net asset value, offering and redemption price per share (net assets / shares outstanding) $ 9.13 $ 8.11 $ 18.99 $ 10.63 Class N Shares ($Dollars): Net Assets $13,379,764 $12,924,765 $ 5,404,874 $12,195,397 Total shares outstanding at end of period 1,467,623 1,610,143 289,261 1,147,497 Net asset value, offering and redemption price per share (net assets / shares outstanding) $ 9.12 $ 8.03 $ 18.69 $ 10.63 Class R Shares ($Dollars): Net Assets $ -- $ -- $29,592,772 $ -- Total shares outstanding at end of period -- -- 1,585,686 -- Net asset value and redemption price per share (net assets / shares outstanding) $ -- $ -- $ 18.66 $ -- Maximum offering price per share (net asset value / 96.50%) $ -- $ -- $ 19.34 $ --
* FUND COMMENCED OPERATIONS ON OCTOBER 1, 2007. AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 48 statements of assets and liabilities (000) MARCH 31, 2008 (UNAUDITED) --------------------------------------------------------------------------------
California Corporate Government Tax Exempt High Yield Bond Fund Bond Fund Bond Fund Bond Fund ------------------------------------------------------------- ASSETS: Cost of securities $ 66,038 $ 65,562 $ 32,937 $ 37,716 ================================================================================================================================ Investments in securities, at value $ 66,863 $ 66,974 $ 33,047 $ 34,055 Income receivable 784 399 456 850 Receivable for capital shares sold 149 152 -- 154 Prepaid expenses 2 2 1 1 -------------------------------------------------------------------------------------------------------------------------------- Total Assets 67,798 67,527 33,504 35,060 -------------------------------------------------------------------------------------------------------------------------------- LIABILITIES: Payable for income distributions 188 165 56 81 Payable for capital shares redeemed 15 15 10 9 Payable for investment securities purchased -- -- -- 100 Investment adviser fees payable 23 21 5 20 Shareholder servicing & distribution fees payable 14 15 7 13 Administrative fees payable 3 3 1 1 Payable to custodian -- -- -- 146 Accrued expenses 3 2 2 1 -------------------------------------------------------------------------------------------------------------------------------- Total Liabilities 246 221 81 371 -------------------------------------------------------------------------------------------------------------------------------- NET ASSETS $ 67,552 $ 67,306 $ 33,423 $ 34,689 ================================================================================================================================ NET ASSETS: Paid-in Capital (unlimited authorization -- $0.01 par value) $ 67,268 $ 66,446 $ 33,341 $ 39,072 Undistributed (distribution in excess of) net investment income 2 (1) 1 1 Accumulated net realized loss on investments (543) (551) (29) (723) Net unrealized appreciation (depreciation) on investments 825 1,412 110 (3,661) -------------------------------------------------------------------------------------------------------------------------------- NET ASSETS $ 67,552 $ 67,306 $ 33,423 $ 34,689 ================================================================================================================================ Institutional Class Shares ($Dollars): Net Assets $66,843,958 $64,223,171 $32,999,268 $15,085,916 Total shares outstanding at end of period 6,471,861 6,089,137 3,218,982 1,839,308 Net asset value, offering and redemption price per share (net assets / shares outstanding) $ 10.33 $ 10.55 $ 10.25 $ 8.20 Class N Shares ($Dollars): Net Assets $ 708,511 $ 3,082,932 $ 423,703 $19,603,233 Total shares outstanding at end of period 68,547 291,684 41,223 2,390,098 Net asset value, offering and redemption price per share (net assets / shares outstanding) $ 10.34 $ 10.57 $ 10.28 $ 8.20
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 49 statements of assets and liabilities (000) MARCH 31, 2008 (UNAUDITED) --------------------------------------------------------------------------------
California Prime Government Tax Exempt Money Money Money Market Fund Market Fund Market Fund ------------------------------------------------- ASSETS: Cost of securities (including repurchase agreements) $ 2,454,628 $ 3,439,980 $ 1,079,085 =============================================================================================================================== Investments in securities, at value $ 1,845,128 $ 2,470,780 $ 1,079,085 Repurchase agreements at value 609,500 969,200 -- Income receivable 3,647 7,674 4,393 Prepaid expenses 80 105 39 Cash -- 85 100,426 ------------------------------------------------------------------------------------------------------------------------------- Total Assets 2,458,355 3,447,844 1,183,943 ------------------------------------------------------------------------------------------------------------------------------- LIABILITIES: Payable for income distributions 3,469 2,380 535 Shareholder servicing & distribution fees payable 947 1,330 448 Investment adviser fees payable 498 712 211 Administrative fees payable 90 124 42 Trustees' fees payable 5 4 2 Accrued expenses 87 106 38 ------------------------------------------------------------------------------------------------------------------------------- Total Liabilities 5,096 4,656 1,276 ------------------------------------------------------------------------------------------------------------------------------- NET ASSETS $ 2,453,259 $ 3,443,188 $ 1,182,667 =============================================================================================================================== NET ASSETS: Paid-in Capital (unlimited authorization -- $0.01 par value) $ 2,453,165 $ 3,443,165 $ 1,182,666 Undistributed net investment income 4 7 -- Accumulated net realized gain on investments 90 16 1 ------------------------------------------------------------------------------------------------------------------------------- NET ASSETS $ 2,453,259 $ 3,443,188 $ 1,182,667 =============================================================================================================================== Institutional Class Shares ($Dollars): Net Assets $ 549,614,478 $ 48,833,043 $ 150,166,687 Total shares outstanding at end of period 549,642,123 48,834,001 150,168,585 Net asset value, offering and redemption price per share (net assets / shares outstanding) $ 1.00 $ 1.00 $ 1.00 Class N Shares ($Dollars): Net Assets $1,247,000,251 $3,065,239,815 $ 882,619,974 Total shares outstanding at end of period 1,247,027,740 3,065,218,234 882,621,780 Net asset value, offering and redemption price per share (net assets / shares outstanding) $ 1.00 $ 1.00 $ 1.00 Class S Shares ($Dollars): Net Assets $ 656,643,977 $ 329,115,027 $ 149,880,355 Total shares outstanding at end of period 656,587,417 329,113,290 149,876,722 Net asset value and redemption price per share (net assets / shares outstanding) $ 1.00 $ 1.00 $ 1.00
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 50 statements of operations FOR THE SIX MONTHS ENDED MARCH 31, 2008 (UNAUDITED) --------------------------------------------------------------------------------
Large Cap Value Large Cap Growth RCB Small Cap Multi-Asset Equity Fund Equity Fund Value Fund Fund (000) (000) (000) (000)* ----------------------------------------------------------------- INCOME: Dividend Income $ 1,493 $ 371 $ 543 $ 184 Interest income -- -- -- 78 ---------------------------------------------------------------------------------------------------------------------------- Total Investment Income 1,493 371 543 262 ---------------------------------------------------------------------------------------------------------------------------- EXPENSES: Investment Advisory Fee 364 185 214 35 Shareholder Servicing Fees--Institutional Class 128 53 9 9 Shareholder Servicing Fees--Class N(1) 38 36 19 17 Shareholder Servicing Fees--Class R(1) -- -- 89 -- Administration Fee 28 13 12 3 Trustee Fees 2 1 1 -- Professional Fees 7 3 3 1 Transfer Agent Fees 5 2 2 1 Custody Fees 3 1 2 2 Printing Fees 2 1 1 -- Registration Fees 1 1 1 -- Insurance and Other Expenses 4 2 2 37 ---------------------------------------------------------------------------------------------------------------------------- Total Expenses 582 298 355 105 ---------------------------------------------------------------------------------------------------------------------------- Less, Waiver of: Shareholder Servicing Fees--Class R(1) -- -- (20) -- Transfer Agent Fees (5) (2) (2) (1) ---------------------------------------------------------------------------------------------------------------------------- Net Expenses 577 296 333 104 ---------------------------------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME 916 75 210 158 ---------------------------------------------------------------------------------------------------------------------------- Net Realized Gain (Loss) from Securities Transactions 1,806 184 1,865 (247) Net Change in Unrealized Depreciation on Investments (20,275) (5,282) (16,272) (258) ---------------------------------------------------------------------------------------------------------------------------- NET DECREASE IN NET ASSETS FROM OPERATIONS $(17,553) $(5,023) $(14,197) $(347) ============================================================================================================================
* FUND COMMENCED OPERATIONS ON OCTOBER 1, 2007. (1) INCLUDES CLASS SPECIFIC DISTRIBUTION EXPENSES. AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 51 statements of operations FOR THE SIX MONTHS ENDED MARCH 31, 2008 (UNAUDITED) --------------------------------------------------------------------------------
California Corporate Government Tax Exempt High Yield Bond Fund Bond Fund Bond Fund Bond Fund (000) (000) (000) (000) ------------------------------------------------- INCOME: Interest Income $1,642 $1,517 $ 615 $ 1,585 Dividend Income 15 23 6 8 ------------------------------------------------------------------------------------------------------------------------------ Total Income 1,657 1,540 621 1,593 ------------------------------------------------------------------------------------------------------------------------------ EXPENSES: Investment Advisory Fee 130 132 46 134 Shareholder Servicing Fees--Institutional Class 80 73 42 20 Shareholder Servicing Fees--Class N(1) 2 7 2 55 Administration Fee 15 14 8 8 Trustee Fees 1 1 1 -- Professional Fees 4 3 2 2 Transfer Agent Fees 2 2 1 1 Custody Fees 1 1 1 1 Printing Fees 1 1 1 1 Registration Fees 1 1 -- -- Insurance and Other Expenses 2 2 1 1 ------------------------------------------------------------------------------------------------------------------------------ Total Expenses 239 237 105 223 ------------------------------------------------------------------------------------------------------------------------------ Less, Waivers of: Investment Advisory Fees -- (17) (17) (14) Transfer Agent Fees (2) (2) (1) (1) ------------------------------------------------------------------------------------------------------------------------------ Net Expenses 237 218 87 208 ------------------------------------------------------------------------------------------------------------------------------ NET INVESTMENT INCOME 1,420 1,322 534 1,385 ------------------------------------------------------------------------------------------------------------------------------ Net Realized Gain (Loss) from Securities Transactions (66) 18 13 105 Net Change in Unrealized Appreciation (Depreciation) on Investments 991 1,231 19 (2,986) ------------------------------------------------------------------------------------------------------------------------------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $2,345 $2,571 $ 566 $(1,496) ==============================================================================================================================
(1) INCLUDES CLASS SPECIFIC DISTRIBUTION EXPENSES. AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 52 statements of operations FOR THE SIX MONTHS ENDED MARCH 31, 2008 (UNAUDITED) --------------------------------------------------------------------------------
California Prime Government Tax Exempt Money Money Money Market Fund Market Fund Market Fund (000) (000) (000) --------------------------------------- INCOME: Interest Income $47,431 $60,221 $14,056 Dividend Income 10 -- -- ------------------------------------------------------------------------------------------------ Total Income 47,441 60,221 14,056 ------------------------------------------------------------------------------------------------ EXPENSES: Investment Advisory Fee 2,727 3,812 1,379 Shareholder Servicing Fees--Institutional Class 592 70 152 Shareholder Servicing Fees--Class N(1) 3,959 9,551 2,723 Shareholder Servicing Fees--Class S(1) 2,437 1,219 646 Administration Fee 512 688 240 Trustee Fees 32 42 15 Professional Fees 111 153 56 Transfer Agent Fees 84 113 39 Custody Fees 41 57 23 Printing Fees 34 48 20 Registration Fees 35 44 21 Insurance and Other Expenses 63 96 35 ------------------------------------------------------------------------------------------------ Total Expenses 10,627 15,893 5,349 ------------------------------------------------------------------------------------------------ Less Waiver of: Investment Advisory Fees -- -- (253) Shareholder Servicing Fees--Class N(1) (1,475) (3,558) (978) Shareholder Servicing Fees--Class S(1) (257) (128) (59) Transfer Agent Fees (84) (113) (39) ------------------------------------------------------------------------------------------------ Net Expenses 8,811 12,094 4,020 ------------------------------------------------------------------------------------------------ NET INVESTMENT INCOME 38,630 48,127 10,036 ------------------------------------------------------------------------------------------------ Net Realized Gain From Securities Transactions 300 17 -- ------------------------------------------------------------------------------------------------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $38,930 $48,144 $10,036 ================================================================================================
(1) INCLUDES CLASS SPECIFIC DISTRIBUTION EXPENSES. AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 53 statements of changes in net assets FOR THE SIX MONTHS ENDED MARCH 31, 2008 (UNAUDITED) AND THE YEAR ENDED SEPTEMBER 30, 2007 --------------------------------------------------------------------------------
Large Cap Value Large Cap Growth Equity Fund (000) Equity Fund (000) ---------------------- ----------------------- 2008 2007 2008 2007 ------------------------------------------------------------------------------- ----------------------- OPERATIONS: Net Investment Income (Loss) $ 916 $ 2,036 $ 75 $ 252 Net Realized Gain (Loss) from Security Transactions 1,806 5,793 184 1,288 Net Change in Unrealized Appreciation (Depreciation) on Investments (20,275) 8,799 (5,282) 5,813 -------------------------------------------------------------------------------- ---------------------- Net Increase (Decrease) in Net Assets Resulting from Operations (17,553) 16,628 (5,023) 7,353 -------------------------------------------------------------------------------- ---------------------- DIVIDENDS AND DISTRIBUTIONS FROM: Net Investment Income: INSTITUTIONAL CLASS (813) (1,807) (67) (212) CLASS N (98) (232) (5) (34) Realized Capital Gains: INSTITUTIONAL CLASS (4,754) (4,815) -- -- CLASS N (736) (687) -- -- CLASS R -- -- -- -- -------------------------------------------------------------------------------- ---------------------- Total Dividends and Distributions (6,401) (7,541) (72) (246) -------------------------------------------------------------------------------- ---------------------- CAPITAL SHARE TRANSACTIONS:(1) INSTITUTIONAL CLASS: Shares Issued 14,280 21,253 3,267 10,554 Shares Issued from Merger(2) -- -- -- 1,372 Shares Issued in Lieu of Dividends and Distributions 4,069 4,589 23 70 Shares Redeemed (9,501) (16,697) (7,499) (7,459) -------------------------------------------------------------------------------- ---------------------- Increase (Decrease) in Net Assets from Institutional Class Share Transactions 8,848 9,145 (4,209) 4,537 -------------------------------------------------------------------------------- ---------------------- CLASS N: Shares Issued 307 4,148 536 3,787 Shares Issued from Merger(2) -- -- -- 1,547 Shares Issued in Lieu of Dividends and Distributions 598 728 3 23 Shares Redeemed (1,559) (1,944) (1,375) (2,359) -------------------------------------------------------------------------------- ---------------------- Increase (Decrease) in Net Assets from Class N Share Transactions (654) 2,932 (836) 2,998 -------------------------------------------------------------------------------- ---------------------- CLASS R: Shares Issued -- -- -- -- Shares Issued in Lieu of Dividends and Distributions -- -- -- -- Shares Redeemed -- -- -- -- -------------------------------------------------------------------------------- ---------------------- Increase (Decrease) in Net Assets from Class R Share Transactions -- -- -- -- ================================================================================ ====================== Net Increase (Decrease) in Net Assets from Share Transactions 8,194 12,077 (5,045) 7,535 -------------------------------------------------------------------------------- ---------------------- Total Increase (Decrease) in Net Assets (15,760) 21,164 (10,140) 14,642 -------------------------------------------------------------------------------- ---------------------- NET ASSETS: Beginning of Period 127,214 106,050 60,847 46,205 -------------------------------------------------------------------------------- ---------------------- End of Period $111,454 $127,214 $ 50,707 $60,847 ================================================================================ ====================== Undistributed (Distributions in Excess of) Net Investment Income $ -- $ (5) $ 10 $ 7 -------------------------------------------------------------------------------- ----------------------
* FUND COMMENCED OPERATIONS ON OCTOBER 1, 2007. (1) SEE NOTE 9 FOR SHARES ISSUED AND REDEEMED. (2) SEE NOTE 8. AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 54 --------------------------------------------------------------------------------
RCB Small Cap Multi-Asset Value Fund (000) Fund (000) ---------------------- ------------ 2008 2007 2008* ------------------------------------------------------------------------------------------- ------------ OPERATIONS: Net Investment Income (Loss) $ 210 $ (87) $ 158 Net Realized Gain (Loss) from Security Transactions 1,865 9,056 (247) Net Change in Unrealized Appreciation (Depreciation) on Investments (16,272) (1,504) (258) -------------------------------------------------------------------------------------------- -------- Net Increase (Decrease) in Net Assets Resulting from Operations (14,197) 7,465 (347) -------------------------------------------------------------------------------------------- -------- DIVIDENDS AND DISTRIBUTIONS FROM: Net Investment Income: INSTITUTIONAL CLASS -- (2) (76) CLASS N -- -- (82) Realized Capital Gains: INSTITUTIONAL CLASS (1,426) (213) -- CLASS N (1,567) (165) -- CLASS R (6,612) (730) -- -------------------------------------------------------------------------------------------- -------- Total Dividends and Distributions (9,605) (1,110) (158) -------------------------------------------------------------------------------------------- -------- CAPITAL SHARE TRANSACTIONS:(1) INSTITUTIONAL CLASS: Shares Issued 727 2,351 10,663 Shares Issued from Merger(2) -- -- -- Shares Issued in Lieu of Dividends and Distributions 1,255 188 6 Shares Redeemed (2,661) (8,112) (20) -------------------------------------------------------------------------------------------- -------- Increase (Decrease) in Net Assets from Institutional Class Share Transactions (679) (5,573) 10,649 -------------------------------------------------------------------------------------------- -------- CLASS N: Shares Issued 82 620 13,315 Shares Issued from Merger(2) -- -- -- Shares Issued in Lieu of Dividends and Distributions 1,250 136 31 Shares Redeemed (1,918) (2,427) (895) -------------------------------------------------------------------------------------------- -------- Increase (Decrease) in Net Assets from Class N Share Transactions (586) (1,671) 12,451 -------------------------------------------------------------------------------------------- -------- CLASS R: Shares Issued 4,881 5,384 -- Shares Issued in Lieu of Dividends and Distributions 6,293 690 -- Shares Redeemed (5,889) (15,167) -- -------------------------------------------------------------------------------------------- -------- Increase (Decrease) in Net Assets from Class R Share Transactions 5,285 (9,093) -- ============================================================================================ ======== Net Increase (Decrease) in Net Assets from Share Transactions 4,020 (16,337) 23,100 -------------------------------------------------------------------------------------------- -------- Total Increase (Decrease) in Net Assets (19,782) (9,982) 22,595 -------------------------------------------------------------------------------------------- -------- NET ASSETS: Beginning of Period 59,759 69,741 -- -------------------------------------------------------------------------------------------- -------- End of Period $ 39,977 $ 59,759 $22,595 ============================================================================================ ======== Undistributed (Distributions in Excess of) Net Investment Income $ 210 $ -- $ -- -------------------------------------------------------------------------------------------- -------- Corporate Bond Government Fund (000) Bond Fund (000) ---------------------- ---------------------- 2008 2007 2008 2007 ------------------------------------------------------------------------------- ---------------------- OPERATIONS: Net Investment Income (Loss) $ 1,420 $ 2,601 $ 1,322 $ 2,087 Net Realized Gain (Loss) from Security Transactions (66) (149) 18 (168) Net Change in Unrealized Appreciation (Depreciation) on Investments 991 209 1,231 413 ------------------------------------------------------------------------------- ---------------------- Net Increase (Decrease) in Net Assets Resulting from Operations 2,345 2,661 2,571 2,332 ------------------------------------------------------------------------------- ---------------------- DIVIDENDS AND DISTRIBUTIONS FROM: Net Investment Income: INSTITUTIONAL CLASS (1,399) (2,546) (1,270) (1,976) CLASS N (18) (49) (55) (96) Realized Capital Gains: INSTITUTIONAL CLASS -- -- -- -- CLASS N -- -- -- -- CLASS R -- -- -- -- ------------------------------------------------------------------------------- ---------------------- Total Dividends and Distributions (1,417) (2,595) (1,325) (2,072) ------------------------------------------------------------------------------- ---------------------- CAPITAL SHARE TRANSACTIONS:(1) INSTITUTIONAL CLASS: Shares Issued 9,966 14,720 14,196 21,995 Shares Issued from Merger(2) -- -- -- -- Shares Issued in Lieu of Dividends and Distributions 250 498 356 570 Shares Redeemed (6,498) (8,362) (4,126) (5,878) ------------------------------------------------------------------------------- ---------------------- Increase (Decrease) in Net Assets from Institutional Class Share Transactions 3,718 6,856 10,426 16,687 ------------------------------------------------------------------------------- ---------------------- CLASS N: Shares Issued 6 214 714 1,002 Shares Issued from Merger(2) -- -- -- -- Shares Issued in Lieu of Dividends and Distributions 7 23 21 30 Shares Redeemed (360) (528) (339) (194) ------------------------------------------------------------------------------- ---------------------- Increase (Decrease) in Net Assets from Class N Share Transactions (347) (291) 396 838 ------------------------------------------------------------------------------- ---------------------- CLASS R: Shares Issued -- -- -- -- Shares Issued in Lieu of Dividends and Distributions -- -- -- -- Shares Redeemed -- -- -- -- ------------------------------------------------------------------------------- ---------------------- Increase (Decrease) in Net Assets from Class R Share Transactions -- -- -- -- =============================================================================== ====================== Net Increase (Decrease) in Net Assets from Share Transactions 3,371 6,565 10,822 17,525 ------------------------------------------------------------------------------- ---------------------- Total Increase (Decrease) in Net Assets 4,299 6,631 12,068 17,785 ------------------------------------------------------------------------------- ---------------------- NET ASSETS: Beginning of Period 63,253 56,622 55,238 37,453 ------------------------------------------------------------------------------- ---------------------- End of Period $67,552 $63,253 $67,306 $55,238 =============================================================================== ====================== Undistributed (Distributions in Excess of) Net Investment Income $ 2 $ 1 $ (1) $ -- ------------------------------------------------------------------------------- ----------------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 55 statements of changes in net assets FOR THE SIX MONTHS ENDED MARCH 31, 2008 (UNAUDITED) AND THE YEAR ENDED SEPTEMBER 30, 2007 --------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT HIGH YIELD BOND FUND (000) BOND FUND (000) ---------------------- --------------------- 2008 2007 2008 2007 -------------------------------------------------------------------------------- --------------------- OPERATIONS: Net Investment Income $ 534 $ 951 $ 1,385 $ 2,936 Net Realized Gain (Loss) from Security Transactions 13 1 105 427 Net Change in Unrealized Appreciation (Depreciation) on Investments 19 14 (2,986) (638) ------------------------------------------------------------------------------- ---------------------- Net Increase (Decrease) in Net Assets Resulting from Operations 566 966 (1,496) 2,725 ------------------------------------------------------------------------------- ---------------------- DIVIDENDS AND DISTRIBUTIONS FROM: Net Investment Income: INSTITUTIONAL CLASS (522) (922) (649) (1,375) CLASS N (11) (29) (791) (1,505) CLASS S -- -- -- -- Realized Capital Gains: INSTITUTIONAL CLASS -- -- -- -- CLASS N -- -- -- -- Class S -- -- -- -- ------------------------------------------------------------------------------- ---------------------- Total Dividends and Distributions (533) (951) (1,440) (2,880) ------------------------------------------------------------------------------- ---------------------- CAPITAL SHARE TRANSACTIONS:(1) INSTITUTIONAL CLASS: Shares Issued 4,260 15,567 723 1,609 Shares Issued in Lieu of Dividends and Distributions 177 334 362 849 Shares Redeemed (5,263) (8,190) (1,846) (6,173) ------------------------------------------------------------------------------- ---------------------- Increase (Decrease) in Net Assets from Institutional Class Share Transactions (826) 7,711 (761) (3,715) ------------------------------------------------------------------------------- ---------------------- CLASS N: Shares Issued 100 58 1,539 1,427 Shares Issued in Lieu of Dividends and Distributions 1 5 424 904 Shares Redeemed (609) (273) (835) (2,135) ------------------------------------------------------------------------------- ---------------------- Increase (Decrease) in Net Assets from Class N Share Transactions (508) (210) 1,128 196 ------------------------------------------------------------------------------- ---------------------- CLASS S: Shares Issued -- -- -- -- Shares Issued in Lieu of Dividends and Distributions -- -- -- -- Shares Redeemed -- -- -- -- ------------------------------------------------------------------------------- ---------------------- Increase (Decrease) in Net Assets from Class S Share Transactions -- -- -- -- ------------------------------------------------------------------------------- ---------------------- Net Increase (Decrease) in Net Assets from Share Transactions (1,334) 7,501 367 (3,519) ------------------------------------------------------------------------------- ---------------------- Total Increase (Decrease) in Net Assets (1,301) 7,516 (2,569) (3,674) ------------------------------------------------------------------------------- ---------------------- NET ASSETS: Beginning of Period 34,724 27,208 37,258 40,932 ------------------------------------------------------------------------------- ---------------------- End of Period $33,423 $34,724 $34,689 $37,258 =============================================================================== ====================== Undistributed Net Investment Income $ 1 $ -- $ 1 $ 56 ------------------------------------------------------------------------------- ----------------------
(1) SEE NOTE 9 FOR SHARES ISSUED AND REDEEMED. AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 56 --------------------------------------------------------------------------------
PRIME MONEY GOVERNMENT MONEY MARKET FUND (000) MARKET FUND (000) ----------------------------- -------------------------- 2008 2007 2008 2007 --------------------------------------------------------------------------------------- -------------------------- OPERATIONS: Net Investment Income $ 38,630 $ 73,660 $ 48,127 $ 106,410 Net Realized Gain (Loss) from Security Transactions 300 192 17 (1) Net Change in Unrealized Appreciation (Depreciation) on Investments -- -- -- -- ---------------------------------------------------------------------------------------- --------------------------- Net Increase (Decrease) in Net Assets Resulting from Operations 38,930 73,852 48,144 106,409 ---------------------------------------------------------------------------------------- --------------------------- DIVIDENDS AND DISTRIBUTIONS FROM: Net Investment Income: INSTITUTIONAL CLASS (8,881) (19,843) (992) (2,098) CLASS N (18,750) (33,868) (42,019) (92,518) CLASS S (11,006) (19,939) (5,125) (11,780) Realized Capital Gains: INSTITUTIONAL CLASS -- -- -- -- CLASS N -- -- -- -- Class S -- -- -- -- ---------------------------------------------------------------------------------------- --------------------------- Total Dividends and Distributions (38,637) (73,650) (48,136) (106,396) ---------------------------------------------------------------------------------------- --------------------------- CAPITAL SHARE TRANSACTIONS:(1) INSTITUTIONAL CLASS: Shares Issued 1,039,554 1,324,934 314,421 532,859 Shares Issued in Lieu of Dividends and Distributions 1,744 3,872 2 4 Shares Redeemed (930,382) (1,278,386) (313,449) (537,787) ---------------------------------------------------------------------------------------- --------------------------- Increase (Decrease) in Net Assets from Institutional Class Share Transactions 110,916 50,420 974 (4,924) ---------------------------------------------------------------------------------------- --------------------------- CLASS N: Shares Issued 1,877,839 2,695,734 3,475,823 5,523,344 Shares Issued in Lieu of Dividends and Distributions 7,950 12,208 27,732 62,437 Shares Redeemed (1,509,472) (2,477,866) (2,729,459) (5,235,257) ---------------------------------------------------------------------------------------- --------------------------- Increase (Decrease) in Net Assets from Class N Share Transactions 376,317 230,076 774,096 350,524 ---------------------------------------------------------------------------------------- --------------------------- CLASS S: Shares Issued 843,109 1,873,534 345,220 775,804 Shares Issued in Lieu of Dividends and Distributions -- -- -- -- Shares Redeemed (806,747) (1,577,751) (337,167) (686,827) ---------------------------------------------------------------------------------------- --------------------------- Increase (Decrease) in Net Assets from Class S Share Transactions 36,362 295,783 8,053 88,977 ---------------------------------------------------------------------------------------- --------------------------- Net Increase (Decrease) in Net Assets from Share Transactions 523,595 576,279 783,123 434,577 ---------------------------------------------------------------------------------------- --------------------------- Total Increase (Decrease) in Net Assets 523,888 576,481 783,131 434,590 ---------------------------------------------------------------------------------------- --------------------------- NET ASSETS: Beginning of Period 1,929,371 1,352,890 2,660,057 2,225,467 ---------------------------------------------------------------------------------------- --------------------------- End of Period $ 2,453,259 $ 1,929,371 $ 3,443,188 $ 2,660,057 ======================================================================================== =========================== Undistributed Net Investment Income $ 4 $ 11 $ 7 $ 16 ---------------------------------------------------------------------------------------- --------------------------- CALIFORNIA TAX EXEMPT MONEY MARKET FUND (000) ----------------------------- 2007 2006 ---------------------------------------------------------------------------------------- OPERATIONS: Net Investment Income $ 10,036 $ 22,975 Net Realized Gain (Loss) from Security Transactions -- -- Net Change in Unrealized Appreciation (Depreciation) on Investments -- -- ---------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets Resulting from Operations 10,036 22,975 ---------------------------------------------------------------------------------------- DIVIDENDS AND DISTRIBUTIONS FROM: Net Investment Income: INSTITUTIONAL CLASS (1,312) (2,775) CLASS N (7,140) (17,180) CLASS S (1,584) (3,020) Realized Capital Gains: INSTITUTIONAL CLASS -- -- CLASS N -- -- Class S -- -- ---------------------------------------------------------------------------------------- Total Dividends and Distributions (10,036) (22,975) ---------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS:(1) INSTITUTIONAL CLASS: Shares Issued 1,131,674 2,517,017 Shares Issued in Lieu of Dividends and Distributions -- -- Shares Redeemed (1,070,744) (2,512,794) ---------------------------------------------------------------------------------------- Increase (Decrease) in Net Assets from Institutional Class Share Transactions 60,930 4,223 ---------------------------------------------------------------------------------------- CLASS N: Shares Issued 1,261,063 2,143,730 Shares Issued in Lieu of Dividends and Distributions 5,444 13,108 Shares Redeemed (1,079,205) (2,092,998) ---------------------------------------------------------------------------------------- Increase (Decrease) in Net Assets from Class N Share Transactions 187,302 63,840 ---------------------------------------------------------------------------------------- CLASS S: Shares Issued 173,165 390,230 Shares Issued in Lieu of Dividends and Distributions -- -- Shares Redeemed (202,203) (318,443) ---------------------------------------------------------------------------------------- Increase (Decrease) in Net Assets from Class S Share Transactions (29,038) 71,787 ---------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Share Transactions 219,194 139,850 ---------------------------------------------------------------------------------------- Total Increase (Decrease) in Net Assets 219,194 139,850 ---------------------------------------------------------------------------------------- NET ASSETS: Beginning of Period 963,473 823,623 ---------------------------------------------------------------------------------------- End of Period $ 1,182,667 $ 963,473 ======================================================================================== Undistributed Net Investment Income $ -- $ -- ----------------------------------------------------------------------------------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 57 financial highlights FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD FOR THE SIX MONTHS ENDED MARCH 31, 2008 (UNAUDITED) AND THE YEAR OR PERIOD ENDED SEPTEMBER 30, --------------------------------------------------------------------------------
NET NET REALIZED AND DISTRIBUTIONS NET ASSET NET UNREALIZED DIVIDENDS FROM ASSET VALUE INVESTMENT GAINS (LOSSES) FROM NET REALIZED VALUE BEGINNING INCOME ON INVESTMENT CAPITAL END TOTAL OF PERIOD (LOSS) SECURITIES INCOME GAINS OF PERIOD RETURN++ -------------------------------------------------------------------------------------------------------- Large Cap Value Equity Fund Institutional Class (commenced operations on January 14, 2000) 2008* $11.21 $ 0.08^ $ (1.59)^ $(0.08) $(0.49) $ 9.13 (13.98)% 2007 10.36 0.19^ 1.38^ (0.19) (0.53) 11.21 15.60 2006 9.54 0.13^ 1.21^ (0.13) (0.39) 10.36 14.50 2005 8.77 0.10^ 1.13^ (0.10) (0.36) 9.54 14.39 2004 7.41 0.08^ 1.36^ (0.08) -- 8.77 19.40 2003 6.04 0.07 1.37 (0.07) -- 7.41 24.03 Class N (commenced operations on April 13, 2000) 2008* $11.19 $ 0.07^ $ (1.58)^ $(0.07) $(0.49) $ 9.12 (14.02)% 2007 10.35 0.16^ 1.37^ (0.16) (0.53) 11.19 15.24 2006 9.53 0.11^ 1.20^ (0.10) (0.39) 10.35 14.24 2005 8.76 0.09^ 1.12^ (0.08) (0.36) 9.53 14.14 2004 7.41 0.05^ 1.36^ (0.06) -- 8.76 19.01 2003 6.04 0.06 1.37 (0.06) -- 7.41 23.75 -------------------------------------------------------------------------------------------------------- Large Cap Growth Equity Fund Institutional Class (commenced operations on January 14, 2000) 2008* $ 8.86 $ 0.01^ $ (0.75)^ $(0.01) $ -- $ 8.11 (8.32)% 2007 7.75 0.05^ 1.10^ (0.04) -- 8.86 14.91 2006 7.43 0.02^ 0.32^ (0.02) -- 7.75 4.59 2005 6.76 0.04^ 0.67^ (0.04) -- 7.43 10.55 2004 6.37 0.01^ 0.38^ --^^ -- 6.76 6.20 2003 5.25 0.01^ 1.12^ (0.01) -- 6.37 21.51 Class N (commenced operations on March 28, 2000) 2008* $ 8.77 $ --^ $ (0.74)^ $ --^^ $ -- $ 8.03 (8.41)% 2007 7.68 0.01^ 1.10^ (0.02) -- 8.77 14.51 2006 7.35 --^ 0.33^ --^^ -- 7.68 4.55 2005 6.69 0.02^ 0.67^ (0.03) -- 7.35 10.28 2004 6.32 (0.01)^ 0.38^ --^^ -- 6.69 5.87 2003 5.21 (0.01)^ 1.12^ -- -- 6.32 21.31 -------------------------------------------------------------------------------------------------------- RCB Small Cap Value Fund Institutional Class (commenced operations on October 3, 2001) 2008* $30.79 $ 0.12^ $ (6.93)^ $ -- $(4.99) $18.99 (24.83)% 2007 28.25 0.02^ 3.00^ (0.01) (0.47) 30.79 10.65 2006 28.58 0.06^ 0.05^ (0.07) (0.37) 28.25 0.40 2005 27.30 0.07^ 2.58^ -- (1.37) 28.58 9.87 2004 21.92 0.06^ 5.40^ -- (0.08) 27.30 24.97 2003 15.06 (0.04)^ 6.90^ -- -- 21.92 45.55 Class N (commenced operations on October 3, 2001) 2008* $30.42 $ 0.09^ $ (6.83)^ $ -- $(4.99) $18.69 (24.92)% 2007 27.98 (0.05)^ 2.96^ -- (0.47) 30.42 10.37 2006 28.31 (0.01)^ 0.05^ --^^ (0.37) 27.98 0.17 2005 27.13 0.00^ 2.55^ -- (1.37) 28.31 9.55 2004 21.84 (0.02)^ 5.39^ -- (0.08) 27.13 24.64 2003 15.04 (0.08)^ 6.88^ -- -- 21.84 45.21 Class R (commenced operations on September 30, 1998) 2008* $30.38 $ 0.10^ $ (6.83)^ $ -- $(4.99) $18.66 (24.92)% 2007 27.93 (0.05)^ 2.97^ -- (0.47) 30.38 10.43 2006 28.27 (0.01)^ 0.04^ --^^ (0.37) 27.93 0.14 2005 27.09 0.01^ 2.54^ -- (1.37) 28.27 9.56 2004 21.81 (0.02)^ 5.38^ -- (0.08) 27.09 24.63 2003 15.02 (0.07)^ 6.86^ -- -- 21.81 45.21 -------------------------------------------------------------------------------------------------------- Multi-Asset Fund Institutional Class (commenced operations on October 1, 2007) 2008* $11.00 $ 0.13^ $ (0.39)^ $(0.11) $ -- $10.63 (2.38)% Class N (commenced operations on October 1, 2007) 2008* $11.00 $ 0.12^ $ (0.39)^ $(0.10) $ -- $10.63 (2.46)% RATIO OF EXPENSES RATIO TO AVERAGE NET OF NET NET ASSETS ASSETS RATIO INVESTMENT (EXCLUDING END OF EXPENSES INCOME (LOSS) WAIVERS & PORTFOLIO OF PERIOD TO AVERAGE TO AVERAGE RECOVERED TURNOVER (000) NET ASSETS(1)(2) NET ASSETS(1) FEES)(1) RATE ------------------------------------------------------------------------------------- Large Cap Value Equity Fund Institutional Class (commenced operations on January 14, 2000) 2008* $ 98,074 0.95% 1.60% 0.96% 21% 2007 110,024 0.96 1.73 0.97 24 2006 92,946 0.96 1.36 0.97 31 2005 42,974 0.96 1.12 0.97 34 2004 38,344 0.97 0.92 0.97 36 2003 33,016 1.00 1.12 1.00 39 Class N (commenced operations on April 13, 2000) 2008* $ 13,380 1.20% 1.34% 1.21% 21% 2007 17,190 1.21 1.47 1.22 24 2006 13,104 1.21 1.13 1.22 31 2005 10,664 1.21 0.87 1.22 34 2004 6,281 1.22 0.64 1.22 36 2003 1,792 1.25 0.84 1.25 39 ------------------------------------------------------------------------------------- Large Cap Growth Equity Fund Institutional Class (commenced operations on January 14, 2000) 2008* $ 37,782 0.98% 0.33% 0.99% 15% 2007 45,784 0.99 0.52 1.00 30 2006 35,842 0.99 0.27 1.00 34 2005 34,164 0.98 0.57 1.00 27 2004 25,575 1.01 0.10 1.01 50 2003 22,249 1.05 0.16 1.03 43 Class N (commenced operations on March 28, 2000) 2008* $ 12,925 1.23% 0.08% 1.24% 15% 2007 15,063 1.24 0.28 1.25 30 2006 10,363 1.24 0.03 1.25 34 2005 8,278 1.23 0.33 1.25 27 2004 5,223 1.26 (0.14) 1.26 50 2003 1,965 1.30 (0.09) 1.29 43 ------------------------------------------------------------------------------------- RCB Small Cap Value Fund Institutional Class (commenced operations on October 3, 2001) 2008* $ 4,979 1.19% 0.94% 1.20% 43% 2007 9,062 1.19 0.08 1.20 57 2006 13,435 1.20 0.20 1.21 66 2005 13,975 1.18 0.26 1.20 41 2004 8,955 1.21 0.23 1.20 40 2003 6,236 1.24 (0.20) 1.24 65 Class N (commenced operations on October 3, 2001) 2008* $ 5,405 1.44% 0.69% 1.45% 43% 2007 9,753 1.44 (0.16) 1.45 57 2006 10,470 1.45 (0.04) 1.46 66 2005 12,754 1.43 0.01 1.45 41 2004 7,551 1.49 (0.07) 1.48 40 2003 2,384 1.49 (0.45) 1.49 65 Class R (commenced operations on September 30, 1998) 2008* $ 29,593 1.32% 0.84% 1.45% 43% 2007 40,944 1.44 (0.17) 1.45 57 2006 45,836 1.45 (0.04) 1.46 66 2005 57,787 1.43 0.02 1.45 41 2004 36,473 1.49 (0.07) 1.48 40 2003 14,267 1.49 (0.41) 1.49 65 ------------------------------------------------------------------------------------- Multi-Asset Fund Institutional Class (commenced operations on October 1, 2007) 2008* $ 10,400 1.37% 2.34% 1.39% 47% Class N (commenced operations on October 1, 2007) 2008* $ 12,195 1.64% 2.24% 1.65% 47%
* FOR THE SIX MONTHS ENDED MARCH 31, 2008. ++ RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED. FEE WAIVERS ARE IN EFFECT; IF THEY HAD NOT BEEN IN EFFECT, PERFORMANCE WOULD HAVE BEEN LOWER.TOTAL RETURN FIGURES DO NOT INCLUDE APPLICABLE SALES LOADS. RETURNS SHOWN DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. ^ PER SHARE CALCULATIONS ARE BASED ON AVERAGE SHARES OUTSTANDING THROUGHOUT THE PERIOD. ^^ AMOUNT REPRESENTS LESS THAN $0.01 PER SHARE. (1) ANNUALIZED FOR PERIODS LESS THAN ONE YEAR. (2) RATIO INCLUDES WAIVERS AND PREVIOUSLY WAIVED INVESTMENT ADVISORY FEES RECOVERED. THE IMPACT OF THE RECOVERED FEES MAY CAUSE A HIGHER NET EXPENSE RATIO. AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 58 --------------------------------------------------------------------------------
NET NET REALIZED AND DISTRIBUTIONS NET ASSET UNREALIZED DIVIDENDS FROM ASSET VALUE NET GAINS (LOSSES) FROM NET REALIZED VALUE BEGINNING INVESTMENT ON INVESTMENT CAPITAL END TOTAL OF PERIOD INCOME SECURITIES INCOME GAINS OF PERIOD RETURN++ ------------------------------------------------------------------------------------------------------------------- Corporate Bond Fund Institutional Class (commenced operations on January 14, 2000) 2008* $10.18 $0.23^ $ 0.15^ $(0.23) $ -- $10.33 3.71% 2007 10.17 0.45^ --^ (0.44) -- 10.18 4.57 2006 10.27 0.42^ (0.10)^ (0.42) -- 10.17 3.19 2005 10.60 0.40^ (0.27)^ (0.40) (0.06) 10.27 1.26 2004 10.89 0.41^ (0.18)^ (0.41) (0.11) 10.60 2.15 2003 10.65 0.46 0.24 (0.46) -- 10.89 6.74 Class N (commenced operations on April 13, 2000) 2008* $10.18 $0.21^ $ 0.16^ $(0.21) $ -- $10.34 3.68% 2007 10.17 0.42^ 0.01^ (0.42) -- 10.18 4.30 2006 10.27 0.39^ (0.10)^ (0.39) -- 10.17 2.93 2005 10.61 0.37^ (0.28)^ (0.37) (0.06) 10.27 0.91 2004 10.89 0.37^ (0.16)^ (0.38) (0.11) 10.61 1.99 2003 10.65 0.44 0.23 (0.43) -- 10.89 6.47 ------------------------------------------------------------------------------------------------------------------- Government Bond Fund Institutional Class (commenced operations on January 14, 2000) 2008* $10.33 $0.23^ $ 0.22^ $(0.23) $ -- $10.55 4.36% 2007 10.28 0.46^ 0.05^ (0.46) -- 10.33 5.04 2006 10.40 0.41^ (0.12)^ (0.41) -- 10.28 2.89 2005 10.62 0.31^ (0.16)^ (0.31) (0.06) 10.40 1.42 2004 10.93 0.25^ (0.17)^ (0.25) (0.14) 10.62 0.81 2003 11.02 0.36^ (0.07)^ (0.37) (0.01) 10.93 2.68** Class N (commenced operations on April 13, 2000) 2008* $10.35 $0.21^ $ 0.22^ $(0.21) $ -- $10.57 4.22% 2007 10.30 0.44^ 0.04^ (0.43) -- 10.35 4.77 2006 10.42 0.39^ (0.12)^ (0.39) -- 10.30 2.63 2005 10.64 0.29^ (0.17)^ (0.28) (0.06) 10.42 1.16 2004 10.95 0.23^ (0.17)^ (0.23) (0.14) 10.64 0.55 2003 11.01 0.33^ (0.04)^ (0.34) (0.01) 10.95 2.71** ------------------------------------------------------------------------------------------------------------------- California Tax Exempt Bond Fund Institutional Class (commenced operations on January 14, 2000) 2008* $10.24 $0.16^ $ 0.01^ $(0.16) $ -- $10.25 1.69% 2007 10.25 0.31^ (0.01)^ (0.31) -- 10.24 2.98 2006 10.26 0.29^ 0.03^ (0.29) (0.04) 10.25 3.18 2005 10.41 0.28^ (0.11)^ (0.28) (0.04) 10.26 1.65 2004 10.60 0.27^ (0.06)^ (0.27) (0.13) 10.41 2.00 2003 10.83 0.31 (0.04) (0.31) (0.19) 10.60 2.63 Class N (commenced operations on April 13, 2000) 2008* $10.27 $0.15^ $(0.01)^ $(0.15) $ -- $10.28 1.55% 2007 10.27 0.28^ --^ (0.28) -- 10.27 2.82 2006 10.29 0.26^ 0.02^ (0.26) (0.04) 10.27 2.81 2005 10.44 0.25^ (0.11)^ (0.25) (0.04) 10.29 1.39 2004 10.62 0.24^ (0.05)^ (0.24) (0.13) 10.44 1.84 2003 10.85 0.27 (0.02) (0.29) (0.19) 10.62 2.37 ------------------------------------------------------------------------------------------------------------------- High Yield Bond Fund Institutional Class (commenced operations on January 14, 2000) 2008* $ 8.91 $0.34^ $(0.70)^ $(0.35) $ -- $ 8.20 (4.08)% 2007 8.96 0.70^ (0.06)^ (0.69) -- 8.91 7.27 2006 9.04 0.68^ (0.08)^ (0.68) -- 8.96 6.90 2005 9.31 0.71^ (0.27)^ (0.71) -- 9.04 4.85 2004 8.95 0.72^ 0.36^ (0.72) -- 9.31 12.47 2003 8.16 0.76 0.79 (0.76) -- 8.95 19.75 Class N (commenced operations on January 14, 2000) 2008* $ 8.91 $0.33^ $(0.70)^ $(0.34) $ -- $ 8.20 (4.23)% 2007 8.96 0.68^ (0.07)^ (0.66) -- 8.91 6.95 2006 9.04 0.65^ (0.08)^ (0.65) -- 8.96 6.58 2005 9.31 0.69^ (0.27)^ (0.69) -- 9.04 4.54 2004 8.95 0.70^ 0.35^ (0.69) -- 9.31 12.14 2003 8.16 0.74 0.78 (0.73) -- 8.95 19.39 RATIO OF EXPENSES RATIO TO AVERAGE NET OF NET NET ASSETS ASSETS RATIO INVESTMENT (EXCLUDING END OF EXPENSES INCOME WAIVERS & PORTFOLIO OF PERIOD TO AVERAGE TO AVERAGE RECOVERED TURNOVER (000) NET ASSETS(1)(2) NET ASSETS(1) FEES)(1) RATE ----------------------------------------------------------------------------------------- Corporate Bond Fund Institutional Class (commenced operations on January 14, 2000) 2008* $66,844 0.73% 4.37% 0.74% 9% 2007 62,210 0.74 4.39 0.75 30 2006 55,290 0.75 4.14 0.75 25 2005 51,193 0.75 3.80 0.76 25 2004 47,080 0.75 3.82 0.79 57 2003 42,256 0.75 4.30 0.78 66 Class N (commenced operations on April 13, 2000) 2008* $ 708 0.98% 4.12% 0.99% 9% 2007 1,043 0.99 4.13 1.00 30 2006 1,332 1.00 3.88 1.00 25 2005 1,530 1.00 3.55 1.01 25 2004 1,522 1.00 3.51 1.04 57 2003 830 1.00 4.00 1.03 66 ----------------------------------------------------------------------------------------- Government Bond Fund Institutional Class (commenced operations on January 14, 2000) 2008* $64,223 0.70% 4.33% 0.76% 16% 2007 52,606 0.70 4.50 0.77 83 2006 35,671 0.70 4.04 0.78 62 2005 28,132 0.70 2.98 0.79 58 2004 20,901 0.70 2.39 0.81 169 2003 15,596 0.70 3.26 0.81 54 Class N (commenced operations on April 13, 2000) 2008* $ 3,083 0.95% 4.08% 1.01% 16% 2007 2,632 0.95 4.25 1.02 83 2006 1,782 0.95 3.81 1.03 62 2005 554 0.95 2.70 1.04 58 2004 436 0.95 2.14 1.06 169 2003 18 0.95 3.00 1.06 54 ----------------------------------------------------------------------------------------- California Tax Exempt Bond Fund Institutional Class (commenced operations on January 14, 2000) 2008* $32,999 0.50% 3.15% 0.61% 31% 2007 33,802 0.50 3.04 0.62 43 2006 26,074 0.50 2.85 0.62 43 2005 22,768 0.50 2.70 0.63 54 2004 17,789 0.50 2.55 0.65 51 2003 14,546 0.50 2.91 0.65 68 Class N (commenced operations on April 13, 2000) 2008* $ 424 0.75% 2.88% 0.86% 31% 2007 922 0.75 2.78 0.87 43 2006 1,134 0.75 2.59 0.87 43 2005 1,487 0.75 2.43 0.88 54 2004 2,439 0.75 2.29 0.90 51 2003 732 0.75 2.62 0.90 68 ----------------------------------------------------------------------------------------- High Yield Bond Fund Institutional Class (commenced operations on January 14, 2000) 2008* $15,086 1.00% 7.94% 1.09% 11% 2007 17,137 1.00 7.73 1.10 26 2006 20,887 1.00 7.58 1.10 23 2005 22,588 1.00 7.71 1.11 46 2004 22,860 1.00 7.87 1.14 35 2003 13,387 1.00 8.84 1.13 36 Class N (commenced operations on January 14, 2000) 2008* $19,603 1.30% 7.66% 1.39% 11% 2007 20,121 1.30 7.44 1.40 26 2006 20,045 1.30 7.28 1.40 23 2005 21,028 1.30 7.41 1.41 46 2004 20,655 1.30 7.56 1.44 35 2003 16,878 1.30 8.44 1.43 36
* FOR THE SIX MONTHS ENDED MARCH 31, 2008. ** TOTAL RETURN FOR CLASS N OF THE GOVERNMENT BOND FUND IS GREATER THAN THAT OF THE INSTITUTIONAL CLASS DUE TO A LARGE REDEMPTION OF CLASS N SHARES DURING THE YEAR. ++ RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED. FEE WAIVERS ARE IN EFFECT; IF THEY HAD NOT BEEN IN EFFECT, PERFORMANCE WOULD HAVE BEEN LOWER. RETURNS SHOWN DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. ^ PER SHARE CALCULATIONS ARE BASED ON THE AVERAGE SHARES OUTSTANDING THROUGHOUT THE PERIOD. (1) ANNUALIZED FOR PERIODS LESS THAN ONE YEAR. (2) RATIO INCLUDES WAIVERS AND PREVIOUSLY WAIVED INVESTMENT ADVISORY FEES RECOVERED.THE IMPACT OF THE RECOVERED FEES MAY CAUSE A HIGHER NET EXPENSE RATIO. AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 59 financial highlights FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD FOR THE SIX MONTHS ENDED MARCH 31, 2008 (UNAUDITED) AND THE YEAR OR PERIOD ENDED SEPTEMBER 30, --------------------------------------------------------------------------------
RATIO OF EXPENSES RATIO TO AVERAGE NET NET NET OF NET NET ASSETS ASSET DIVIDENDS ASSET ASSETS RATIO INVESTMENT (EXCLUDING VALUE NET FROM NET VALUE END OF EXPENSES INCOME WAIVERS & BEGINNING INVESTMENT INVESTMENT END TOTAL OF PERIOD TO AVERAGE TO AVERAGE RECOVERED OF PERIOD INCOME INCOME OF PERIOD RETURN++ (000) NET ASSETS(1)(2) NET ASSETS(1) FEES)(1) ----------------------------------------------------------------------------------------------------------------------------------- Prime Money Market Fund Institutional Class (commenced operations on March 23, 1998) 2008* $1.00 $0.019 $(0.019) $1.00 1.92% $ 549,615 0.58% 3.75% 0.58% 2007 1.00 0.047 (0.047) 1.00 4.85 438,639 0.59 4.74 0.60 2006 1.00 0.041 (0.041) 1.00 4.17 388,171 0.59 4.12 0.60 2005 1.00 0.021 (0.021) 1.00 2.10 332,393 0.60 2.05 0.61 2004 1.00 0.006 (0.006) 1.00 0.58 367,209 0.63 0.59 0.63 2003 1.00 0.007 (0.007) 1.00 0.68 287,087 0.63 0.68 0.64 Class N (commenced operations on October 18, 1999) 2008* $1.00 $0.018 $(0.018) $1.00 1.81% $1,247,000 0.80% 3.55% 1.08% 2007 1.00 0.045 (0.045) 1.00 4.62 870,537 0.81 4.52 1.10 2006 1.00 0.039 (0.039) 1.00 3.94 640,366 0.81 3.95 1.10 2005 1.00 0.019 (0.019) 1.00 1.87 312,452 0.82 1.94 1.11 2004 1.00 0.004 (0.004) 1.00 0.36 201,058 0.85 0.35 1.13 2003 1.00 0.005 (0.005) 1.00 0.46 205,191 0.85 0.47 1.14 Class S (commenced operations on October 26, 1999) 2008* $1.00 $0.017 $(0.017) $1.00 1.71% $ 656,644 1.00% 3.39% 1.08% 2007 1.00 0.043 (0.043) 1.00 4.41 620,195 1.01 4.32 1.10 2006 1.00 0.037 (0.037) 1.00 3.73 324,353 1.01 3.74 1.10 2005 1.00 0.017 (0.017) 1.00 1.67 203,502 1.02 1.70 1.11 2004 1.00 0.002 (0.002) 1.00 0.21 115,761 1.00 0.21 1.13 2003 1.00 0.003 (0.003) 1.00 0.29 118,624 1.03 0.29 1.14 ----------------------------------------------------------------------------------------------------------------------------------- Government Money Market Fund Institutional Class (commenced operations on April 3, 2000) 2008* $1.00 $0.018 $(0.018) $1.00 1.79% $ 48,833 0.59% 3.55% 0.60% 2007 1.00 0.047 (0.047) 1.00 4.77 47,858 0.60 4.67 0.61 2006 1.00 0.040 (0.040) 1.00 4.08 52,782 0.60 4.11 0.61 2005 1.00 0.020 (0.020) 1.00 2.05 32,039 0.61 1.97 0.62 2004 1.00 0.006 (0.006) 1.00 0.57 43,608 0.63 0.56 0.64 2003 1.00 0.007 (0.007) 1.00 0.70 56,841 0.63 0.68 0.64 Class N (commenced operations on June 21, 1999) 2008* $1.00 $0.017 $(0.017) $1.00 1.68% $3,065,240 0.81% 3.30% 1.10% 2007 1.00 0.044 (0.044) 1.00 4.54 2,291,138 0.82 4.45 1.11 2006 1.00 0.038 (0.038) 1.00 3.86 1,940,602 0.82 3.78 1.11 2005 1.00 0.018 (0.018) 1.00 1.82 1,895,412 0.83 1.80 1.12 2004 1.00 0.004 (0.004) 1.00 0.35 1,857,676 0.85 0.35 1.14 2003 1.00 0.005 (0.005) 1.00 0.48 2,060,860 0.85 0.48 1.14 Class S (commenced operations on October 6, 1999) 2008* $1.00 $0.016 $(0.016) $1.00 1.58% $ 329,115 1.01% 3.15% 1.10% 2007 1.00 0.042 (0.042) 1.00 4.33 321,061 1.02 4.24 1.11 2006 1.00 0.036 (0.036) 1.00 3.65 232,083 1.02 3.60 1.11 2005 1.00 0.016 (0.016) 1.00 1.62 227,905 1.03 1.61 1.12 2004 1.00 0.002 (0.002) 1.00 0.20 263,086 1.00 0.21 1.14 2003 1.00 0.003 (0.003) 1.00 0.30 191,539 1.03 0.31 1.14 ----------------------------------------------------------------------------------------------------------------------------------- California Tax Exempt Money Market Fund Institutional Class (commenced operations on April 3, 2000) 2008* $1.00 $0.011 $(0.011) $1.00 1.12% $ 150,167 0.55% 2.16% 0.61% 2007 1.00 0.030 (0.030) 1.00 3.01 89,237 0.55 2.97 0.62 2006 1.00 0.026 (0.026) 1.00 2.62 85,014 0.55 2.60 0.62 2005 1.00 0.015 (0.015)** 1.00 1.51 73,211 0.55 1.46 0.63 2004 1.00 0.005 (0.005) 1.00 0.52 79,413 0.55 0.51 0.65 2003 1.00 0.006 (0.006) 1.00 0.62 87,820 0.55 0.59 0.65 Class N (commenced operations on June 21, 1999) 2008* $1.00 $0.010 $(0.010) $1.00 1.00% $ 882,620 0.78% 1.97% 1.11% 2007 1.00 0.027 (0.027) 1.00 2.78 695,318 0.78 2.73 1.12 2006 1.00 0.024 (0.024) 1.00 2.39 631,478 0.78 2.36 1.12 2005 1.00 0.013 (0.013)** 1.00 1.28 569,671 0.78 1.25 1.13 2004 1.00 0.003 (0.003) 1.00 0.29 505,029 0.78 0.29 1.15 2003 1.00 0.004 (0.004) 1.00 0.41 539,182 0.76 0.41 1.15 Class S (commenced operations on November 12, 1999) 2008* $1.00 $0.009 $(0.009) $1.00 0.90% $ 149,880 0.98% 1.84% 1.11% 2007 1.00 0.025 (0.025) 1.00 2.57 178,918 0.98 2.55 1.12 2006 1.00 0.022 (0.022) 1.00 2.18 107,131 0.98 2.17 1.12 2005 1.00 0.011 (0.011)** 1.00 1.08 88,182 0.98 1.09 1.13 2004 1.00 0.002 (0.002) 1.00 0.15 33,520 0.91 0.15 1.15 2003 1.00 0.003 (0.003) 1.00 0.27 24,002 0.89 0.27 1.15
* FOR THE SIX MONTHS ENDED MARCH 31, 2008. ** INCLUDES A REALIZED CAPITAL GAIN DISTRIBUTION OF LESS THAN $0.001. ++ RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED. FEE WAIVERS ARE IN EFFECT; IF THEY HAD NOT BEEN IN EFFECT, PERFORMANCE WOULD HAVE BEEN LOWER. RETURNS SHOWN DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. (1) ANNUALIZED FOR PERIODS LESS THAN ONE YEAR. (2) RATIO INCLUDES WAIVERS AND PREVIOUSLY WAIVED INVESTMENT ADVISORY FEES RECOVERED. THE IMPACT OF THE RECOVERED FEES MAY CAUSE A HIGHER NET EXPENSE RATIO. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. CNI CHARTER FUNDS | PAGE 60 notes to financial statements MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- 1. ORGANIZATION: CNI Charter Funds, a Delaware statutory trust (the "Trust"), is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company with 17 portfolios. The financial statements included herein are those of the Large Cap Value Equity Fund, Large Cap Growth Equity Fund, RCB Small Cap Value Fund (collectively, the "Equity Funds"); Corporate Bond Fund, Government Bond Fund, California Tax Exempt Bond Fund, High Yield Bond Fund (collectively, the "Fixed Income Funds"); Prime Money Market Fund, Government Money Market Fund and California Tax Exempt Money Market Fund (collectively, the "Money Market Funds"); and Multi-Asset Fund (each a "Fund," collectively, the "Funds"). The Equity and Fixed Income Funds and the Multi-Asset Fund are registered to offer Institutional and Class N Shares; in addition, the RCB Small Cap Value Fund is registered to offer Class R Shares. The Money Market Funds are registered to offer Institutional, Class N and Class S Shares. The assets of each Fund are segregated, and a shareholder's interest is limited to the Fund in which shares are held. The Funds' prospectuses provide descriptions of each Fund's investment objectives, policies and strategies. Class N and Institutional Class shares of the Multi-Asset Fund commenced operations on October 1, 2007. Effective January 31, 2008, Class A shares of the Funds were redesignated as Class N shares. There were no changes to the rights, fees or expenses of the Class A shares or services provided to Class A shareholders in connection with the change in designation to Class N. On April 5, 2005, the Board of Trustees of CNI Charter Funds (the "Trust") approved the reorganization of the AHA Limited Maturity Fixed Income Fund, AHA Full Maturity Fixed Income Fund, AHA Balanced Fund, AHA Diversified Equity Fund, and AHA Socially Responsible Equity Fund series of AHA Investment Funds, Inc. (the "Predecessor AHA Funds") into newly established corresponding series of the Trust (the "AHA Funds"). The reorganization was approved by shareholders of the Predecessor AHA Funds and was effective on October 3, 2005. Class N and Institutional Class shares of the AHA Funds are offered through separate prospectuses. To request a prospectus for the AHA Funds, shareholders can call 1-800-445-1341 or write to CNI Charter Funds, c/o SEI Investments Distribution Co., One Freedom Valley Drive, Oaks, Pennsylvania 19456. 2. SIGNIFICANT ACCOUNTING POLICIES: The following is a summary of significant accounting policies followed by the Funds. USE OF ESTIMATES - The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. SECURITY VALUATION - Securities listed on a securities exchange, market or automated quotation system for which quotations are readily available (except for securities traded on NASDAQ) are valued at the last quoted sale price on the primary exchange or market (foreign or domestic) on which they are traded, or, if there is no such reported sale, at the most recent quoted bid price. For securities traded on NASDAQ, the NASDAQ Official Closing Price is used. If available, debt securities are priced based upon valuations provided by independent, third-party pricing agents. Such values generally reflect the last reported sales price if the security is actively traded. The third-party pricing agents may also value debt securities at an evaluated bid price by employing methodologies that utilize actual market transactions, broker-supplied valuations, or other methodologies designed to identify the market value for such securities. Debt obligations with remaining maturities of sixty days or less may be valued at their amortized cost, which approximates market value. The prices for foreign securities are reported in local currency and converted to U.S. dollars using currency exchange rates. Prices for most securities held in the Funds are provided daily by recognized independent pricing agents. If a security price cannot be obtained from an independent, third-party pricing agent, the Funds seek to obtain a bid price from at least one independent broker. Securities for which market prices are not "readily available" are valued in accordance with Fair Value Procedures established by the Funds' Board of Trustees. The Funds' Fair Value Procedures are implemented through a Fair Value Committee (the "Committee") designated by the Funds' Board of Trustees. Some of the more common reasons that may necessitate that a security be valued using Fair Value Procedures include: the security's trading has been halted or suspended; the security has been de-listed from a national exchange; the security's primary trading market is temporarily closed at a time when under normal conditions it would be open; for international securities, market events occur after the close of the foreign markets that make closing prices not representative of fair value; or the security's primary pricing source is not able or willing to provide a price. When a security is valued in accordance with the Fair Value Procedures, the Committee will determine the value after taking into consideration relevant information reasonably available to the Committee. CNI CHARTER FUNDS | PAGE 61 notes to financial statements MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- SECURITY TRANSACTIONS AND RELATED INCOME - Security transactions are accounted for on the trade date of the security purchase or sale. Costs used in determining net realized capital gains and losses on the sale of securities are those of the specific securities sold. Interest income is recognized on the accrual basis and dividend income is recognized on the ex-dividend date. Purchase discounts and premiums on securities held by the Funds are accreted and amortized to maturity using the scientific method. REPURCHASE AGREEMENTS - Securities pledged as collateral for repurchase agreements are held by each Fund's custodian bank until maturity of the repurchase agreements. Provisions of the agreements and procedures adopted by the investment adviser require that the market value of the collateral, including accrued interest thereon, is sufficient in the event of default by the counterparty. The Funds also invest in tri-party repurchase agreements. Securities held as collateral for tri-party repurchase agreements are maintained by the broker's custodian bank in a segregated account until maturity of the repurchase agreement. Provisions of the agreements require that the market value of the collateral, including accrued interest thereon, is sufficient in the event of default. If the counterparty defaults and the value of the collateral declines or if the coun-terparty enters into an insolvency proceeding, realization of the collateral by the Fund may be delayed or limited. TBA TRANSACTIONS - The Funds may engage in "to be announced" ("TBA") security transactions. Such transactions involve a commitment by the Funds to purchase or sell securities for a predetermined price or yield, with payment and delivery taking place beyond the customary settlement period. The Funds record TBA securities on the trade date and maintain security positions such that sufficient liquid assets will be available to make payments for the securities purchased. EXPENSE ALLOCATION - Common expenses incurred by the Funds are allocated among the Funds (i) based upon relative average daily net assets, (ii) as incurred on a specific identification basis, or (iii) equally among the Funds, depending on the nature of the expenditure. CLASSES - Class-specific expenses are borne by that class. Income, non class-specific expenses, and realized and unrealized gains/losses are allocated to the respective class on the basis of relative net asset value each day. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS - Dividends from net investment income are declared daily and paid to shareholders monthly for the Fixed Income and Money Market Funds. Dividends from net investment income are declared and paid quarterly for the Large Cap Value Equity, Large Cap Growth Equity and Multi-Asset Funds. For the RCB Small Cap Value Fund, dividends from net investment income are declared and paid annually. Distributions from net realized capital gains are distributed to shareholders at least annually. 3. ADMINISTRATION, TRANSFER AGENT, DISTRIBUTION AND SHAREHOLDER SERVICES AGREEMENTS: Pursuant to an administration agreement (the "Agreement"), SEI Investments Global Funds Services (the "Administrator"), a wholly owned subsidiary of SEI Investments Company, acts as the Trust's Administrator. Under the terms of the Agreement dated April 1, 1999, as amended April 1, 2008, the Administrator is entitled to receive an annual fee of 0.065% of aggregate average daily net assets of the Trust not exceeding $2.5 billion, 0.045% of aggregate average daily net assets of the Trust exceeding $2.5 billion but not exceeding $5 billion, 0.025% of aggregate average daily net assets of the Trust exceeding $5 billion but not exceeding $7.5 billion, and 0.02% of aggregate average daily net assets of the Trust exceeding $7.5 billion. Each Fund is subject to a minimum annual fee of $90,000, which may be reduced at the sole discretion of the Administrator. The Trust has adopted a Rule 12b-1 Distribution Plan ("the Plan") with respect to Class N, Class S and Class R Shares that allows each Fund to pay distribution and servicing fees. SEI Investments Distribution Co. (the "Distributor") receives a distribution fee, computed daily and paid monthly, at the annual rate of 0.50% of the average daily net assets of the Class N Shares and Class S Shares of the Money Market Funds and 0.25% of the Class N Shares of the Equity Funds, Fixed Income Funds and the Multi-Asset Fund and the Class R Shares of the RCB Small Cap Value Fund, with the exception of 0.30% charged to the Class N Shares of the High Yield Bond Fund, which may be used by the Distributor to provide compensation for sales support and distribution-related activities. The Trust and the Distributor are parties to a Distribution Agreement dated April 1, 1999. SEI Institutional Transfer Agency, a division of SEI Investments Fund Management Corporation, serves as Transfer Agent for the Trust and provides services at an annual rate of $15,000 per share class. The Transfer Agent has voluntarily agreed to waive these fees except with respect to the RCB Small Cap Value Fund, from which the Transfer Agent began receiving fees commencing February 1, 2008. Citigroup Fund Services, LLC serves as the Sub-Transfer Agent for the RCB Small Cap Value Fund. U.S. Bank, N.A. serves as Custodian for the Trust. The Custodian plays no role in determining the investment CNI CHARTER FUNDS | PAGE 62 -------------------------------------------------------------------------------- policies of the Trust or which securities are to be purchased or sold by the Trust. The Trust has entered into Shareholder Servicing Agreements that permit payment of compensation to City National Bank ("CNB") and its affiliates, which provide certain shareholder support for their customers who own Institutional Class, Class N, Class S or Class R Shares. In consideration for such services, a shareholder servicing fee is charged at the annual rate of up to 0.25% of each Fund's average daily net assets. CNB has agreed to voluntarily waive portions of its shareholder servicing fees with respect to certain Funds. For the six months ended March 31, 2008, CNB received Shareholder Servicing fees from the Trust in the amount of $6,063,448. Certain officers of the Trust are also officers of City National Asset Management, Inc. ("CNAM," or the "Adviser") or the Administrator. Such officers are paid no fees by the Trust for serving as officers of the Trust. 4. INVESTMENT ADVISORY FEES AND OTHER AGREEMENTS: CNAM, a wholly owned subsidiary of CNB, serves as the Investment Manager for the Funds. Under the terms of the current agreement, the Adviser receives an annual fee equal to 0.62% of the average daily net assets of the Large Cap Value Equity Fund, 0.65% of the average daily net assets of the Large Cap Growth Equity Fund, 0.85% of the average net assets of the RCB Small Cap Value Fund, 0.50% of the average daily net assets of the Multi-Asset Fund, 0.40% of the average daily net assets of the Corporate Bond Fund, 0.43% of the average daily net assets of the Government Bond Fund, 0.27% of the average daily net assets of the California Tax Exempt Bond Fund, 0.75% of the average daily net assets of the High Yield Bond Fund, 0.25% of the average daily net assets of the Prime Money Market Fund, 0.26% of the average daily net assets of the Government Money Market Fund, and 0.27% of the average daily net assets of the California Tax Exempt Money Market Fund. REED, CONNER & BIRDWELL, LLC acts as the Investment Sub-Adviser on behalf of the RCB Small Cap Value Fund. HSBC HALBIS PARTNERS (USA), INC. acts as the Investment Sub-Adviser on behalf of the High Yield Bond Fund. Sub-Adviser fees are paid by the Adviser. The Adviser has voluntarily agreed to limit its fees or reimburse expenses to the extent necessary to keep operating expenses at or below certain percentages of the Funds' respective average daily net assets. The Adviser has voluntarily agreed to maintain these limitations until further notice to the Trust. The voluntary expense limitations (expressed as percentages of average daily net assets) are as follows: Large Cap Large Cap RCB Value Growth Small Cap Multi- Equity Equity Value Asset Fund Fund Fund Fund -------------------------------------------------------------------------------- Institutional Class 1.00% 1.05% 1.24% 1.75% Class N 1.25% 1.30% 1.49% 2.00% Class R -- -- 1.49% -- -------------------------------------------------------------------------------- California Corporate Government Tax Exempt High Yield Bond Bond Bond Bond Fund Fund Fund Fund -------------------------------------------------------------------------------- Institutional Class 0.75% 0.70% 0.50% 1.00% Class N 1.00% 0.95% 0.75% 1.30% -------------------------------------------------------------------------------- Prime California Money Government Tax Exempt Market Money Market Money Market Fund Fund Fund -------------------------------------------------------------------------------- Institutional Class 0.63% 0.63% 0.55% Class N 0.85% 0.85% 0.78% Class S 1.05% 1.05% 0.98% -------------------------------------------------------------------------------- Any fee reductions or expense reimbursements may be repaid to the Adviser within three years after occurrence, subject to certain restrictions and only if such repayments do not cause the Funds' expense ratios, at the time of repayment, to exceed the amounts shown in the preceding table. As of March 31, 2008, fees which were previously waived by the Adviser which may be subject to possible future reimbursement to the Adviser were as follows: Potential Amount of Fund Recovery (000) Expiration -------------------------------------------------------------------------------- Government Bond $ 9 2008 23 2009 31 2010 17 2011 California Tax Exempt Bond 13 2008 28 2009 34 2010 17 2011 High Yield Bond 21 2008 38 2009 35 2010 14 2011 California Tax Exempt Money Market 216 2008 516 2009 494 2010 253 2011 -------------------------------------------------------------------------------- 5. INVESTMENT TRANSACTIONS: The cost of security purchases and proceeds from the sale and maturities of securities, other than temporary investments CNI CHARTER FUNDS | PAGE 63 notes to financial statements MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- in short-term securities for the six months ended March 31, 2008, were as follows for the Equity Funds, Multi-Asset Fund and Fixed Income Funds: Purchases Sales & Maturities -------------------------------------------------------------------------------- U.S. Gov't Other U.S. Gov't Other Fund (000) (000) (000) (000) -------------------------------------------------------------------------------- Large Cap Value Equity $ -- $27,984 $ -- $24,684 Large Cap Growth Equity -- 8,125 -- 13,099 RCB Small Cap Value -- 21,211 -- 25,103 Multi-Asset -- 22,092 -- 5,024 Corporate Bond 3,579 3,772 1,339 4,346 Government Bond 22,948 -- 9,447 -- California Tax Exempt Bond -- 10,349 -- 11,852 High Yield Bond -- 4,059 -- 3,504 -------------------------------------------------------------------------------- 6. FEDERAL TAX INFORMATION: It is each Fund's intention to continue to qualify as a regulated investment company for Federal income tax purposes and distribute all of its taxable income and net capital gains. Accordingly, no provisions for Federal income taxes are required. The Funds may be subject to taxes imposed by countries in which they invest, with respect to their investments in issuers existing or operating in such countries. Such taxes are generally based on income earned. The Funds accrue such taxes when the related income is earned. The timing and characterization of certain income and capital gains distributions are determined annually in accordance with Federal tax regulations, which may differ from accounting principles generally accepted in the United States of America. As a result, net investment income (loss) and net realized gain (loss) on investment transactions for a reporting period may differ significantly from distributions during such period. These book/tax differences may be temporary or permanent. To the extent these differences are permanent in nature, they are charged or credited to undistributed net investment income (loss), accumulated net realized gain (loss), or paid-in capital, as appropriate, in the period that the differences arise. The tax character of dividends and distributions declared during the years ended September 30, 2007 and September 30, 2006 are shown below: Tax Exempt Ordinary Long-term Income Income Capital Gain Total Fund (000) (000) (000) (000) -------------------------------------------------------------------------------- Large Cap Value Equity 2007 $ -- $ 2,039 $5,502 $ 7,541 2006 -- 1,252 3,789 5,041 Large Cap Growth Equity 2007 -- 246 -- 246 2006 -- 101 -- 101 RCB Small Cap Value 2007 -- 2 1,108 1,110 2006 -- 66 1,121 1,187 Corporate Bond 2007 -- 2,595 -- 2,595 2006 -- 2,221 -- 2,221 Government Bond 2007 -- 2,072 -- 2,072 2006 -- 1,324 -- 1,324 California Tax Exempt Bond 2007 950 1 -- 951 2006 724 26 68 818 High Yield Bond 2007 -- 2,880 -- 2,880 2006 -- 3,020 -- 3,020 Prime Money Market 2007 -- 73,650 -- 73,650 2006 -- 43,643 -- 43,643 Government Money Market 2007 -- 106,396 -- 106,396 2006 -- 85,649 -- 85,649 California Tax Exempt Money Market 2007 22,975 -- -- 22,975 2006 19,281 -- -- 19,281 As of September 30, 2007, the components of Distributable Earnings/(Accumulated Losses) on a tax basis were as follows:
Undistributed Undistributed Undistributed Capital Tax-Exempt Ordinary Long-term Loss Income Income Capital Gain Carryforwards Fund (000) (000) (000) (000) ------------------------------------------------------------------------------------------------------ Large Cap Value Equity Fund $ -- $ 420 $ 5,489 $ -- Large Cap Growth Equity Fund -- 57 -- (2,377) RCB Small Cap Value Fund -- 2,432 6,538 -- Corporate Bond Fund -- 229 -- (335) Government Bond Fund -- 205 -- (434) California Tax Exempt Bond Fund 89 -- -- (34) High Yield Bond Fund -- 291 -- (827) Prime Money Market Fund -- 7,002 -- (210) Government Money Market Fund -- 9,211 -- -- California Tax Exempt Money Market Fund 2,164 -- -- -- Unrealized Other Total Post-October Appreciation Temporary Distributable Earnings Losses (Depreciation) Differences (Accumulated Losses) Fund (000) (000) (000) (000) ------------------------------------------------------------------------------------------------------------- Large Cap Value Equity Fund $ -- $ 26,017 $ (425) $ 31,501 Large Cap Growth Equity Fund -- 10,268 (53) 7,895 RCB Small Cap Value Fund -- 11,191 -- 20,161 Corporate Bond Fund (143) (165) (230) (644) Government Bond Fund (132) 181 (206) (386) California Tax Exempt Bond Fund (8) 92 (90) 49 High Yield Bond Fund -- (676) (235) (1,447) Prime Money Market Fund -- -- (6,991) (199) Government Money Market Fund (1) -- (9,195) 15 California Tax Exempt Money Market Fund -- -- (2,163) 1
CNI CHARTER FUNDS | PAGE 64 -------------------------------------------------------------------------------- For tax purposes, the losses in the Funds can be carried forward for a maximum of eight years to offset any future net realized capital gains. At September 30, 2007, the breakdown of capital loss carryforwards is as follows:
Expiring September 30, ----------------------------------------------------------------------------------------------------- 2008 2009 2010 2011 2012 2014 2015 Total Fund (000) (000) (000) (000) (000) (000) (000) (000) ----------------------------------------------------------------------------------------------------- Large Cap Growth Equity Fund $122 $122 $373 $1,638 $122 $ -- $ -- $2,377 Corporate Bond Fund -- -- -- -- -- 64 271 335 Government Bond Fund -- -- -- -- -- 59 375 434 California Tax Exempt Bond Fund -- -- -- -- -- -- 34 34 High Yield Bond Fund -- -- -- 558 -- 269 -- 827 Prime Money Market Fund -- -- 210 -- -- -- -- 210
During the year ended September 30, 2007, the following Funds had utilized capital loss carryforwards to offset capital gains amounting to: Amount Fund (000) ------------------------------------------------------------------------------- Large Cap Growth Equity $ 1,288 High Yield Bond Fund 407 Prime Money Market Fund 193 ------------------------------------------------------------------------------- Post-October losses represent losses realized on investments and foreign currency transactions from November 1, 2006 through September 30, 2007 that, in accordance with Federal income tax regulations, the Funds have elected to defer and treat as having arisen in the following fiscal year. The aggregate gross unrealized appreciation on securities, the aggregate gross unrealized depreciation on securities and the net unrealized appreciation/(depreciation) for tax purposes at March 31, 2008 for each of the Equity and Fixed Income Funds were as follows:
Aggregate Aggregate Net Gross Gross Unrealized Federal Unrealized Unrealized Appreciation Tax Cost Appreciation Depreciation (Depreciation) Fund (000) (000) (000) (000) ------------------------------------------------------------------------------------- Large Cap Value Equity $107,020 $13,996 $ (8,254) $ 5,742 Large Cap Growth Equity 44,968 7,963 (2,976) 4,987 RCB Small Cap Value 45,141 4,935 (10,009) (5,074) Multi-Asset 22,650 287 (545) (258) Corporate Bond 66,036 1,365 (538) 827 Government Bond 65,562 1,433 (21) 1,412 California Tax Exempt Bond 32,937 345 (235) 110 High Yield Bond 37,716 265 (3,926) (3,661)
7. CONCENTRATION OF CREDIT RISK In the normal course of business, the Funds enter into contracts that provide general indemnifications. The Funds' maximum exposure under these arrangements is dependent on future claims that may be made against the Funds and, therefore, cannot be established; however, based on experience, the risk of loss from such claim is considered remote. The Multi-Asset Fund may invest in exchange-traded notes ("ETNs") as a non-principal investment strategy. ETNs are unsecured debt obligations of investment banks which are traded on exchanges and the returns of which are linked to the performance of market indexes. In addition to trading ETNs on exchanges, investors may redeem ETNs directly with the issuer on a weekly basis, typically in a minimum amount of 50,000 units, or hold the ETNs until maturity. ETNs are riskier than ordinary unsecured debt securities and have no principal protection. The Fund will generally invest in ETNs which are linked to commodities indexes. The Fund's investment in an ETN may be influenced by many unpredictable factors, including highly volatile commodities prices, changes in supply and demand relationships, weather, agriculture, trade, changes in interest rates, and monetary and other governmental policies, action and inaction. Investing in ETNs is not equivalent to investing directly in index components or the relevant index itself. Because ETNs are debt securities, they possess credit risk; if the issuer has financial difficulties or goes bankrupt, the investor may not receive the return it was promised. CALIFORNIA TAX EXEMPT FUNDS - SPECIFIC RISKS The ability of issuers to pay interest on, and repay principal of, California municipal securities may be affected by economic and political developments in the State of California. Certain securities are backed by letters of credit from various financial institutions and financial guaranty assurance agencies. These letters of credit enhance the credit quality of the individual securities; however, if any of the financial institutions or financial guaranty assurance agencies' credit quality should deteriorate, it could cause the individual security's credit quality to change. Additionally, if any of the Funds concentrate their letters of credit in any one financial institution, the risk of credit quality deterioration increases. 8. FUND MERGER On April 15, 2007, the assets of the Technology Growth Fund were reorganized into the Large Cap Growth Fund. In this merger, 635,779 shares of the Technology Growth Fund were exchanged for 351,181 shares of the Large Cap Growth Fund in a tax-free exchange. The value of the Technology Growth Fund on April 15, 2007 was $2,920,545. Upon the business combination of such Funds on April 15, 2007, the value of the Technology Growth Fund, which included accumulated realized losses of $1,428,382, and unrealized appreciation of $335,437, combined with the Large Cap Growth Fund was $56,094,352. CNI CHARTER FUNDS | PAGE 65 notes to financial statements MARCH 31, 2008 (UNAUDITED) -------------------------------------------------------------------------------- 9. CAPITAL SHARES ISSUED AND REDEEMED: Capital share activity for the six months ended March 31, 2008 (Unaudited) and the year ended September 30, 2007 were as follows:
Large Cap Value Large Cap Growth RCB Small Cap Multi-Asset Equity Fund (000) Equity Fund (000) Value Fund (000) Fund (000) ----------------- ----------------- ---------------- ----------- 2008 2007 2008 2007 2008 2007 2008 -------------------------------------------------------- ----------------- ---------------- ----------- CAPITAL SHARES ISSUED AND REDEEMED: INSTITUTIONAL CLASS: Shares Issued 1,465 1,943 389 1,265 32 74 979 Shares Issued from merger(1) -- -- -- 164 -- -- -- Shares Issued in Lieu of Dividends and Distributions 400 433 3 8 55 6 1 Shares Redeemed (942) (1,531) (900) (893) (119) (262) (2) -------------------------------------------------------- ----------------- ---------------- ----------- Net Institutional Class Transactions 923 845 (508) 544 (32) (182) 978 ======================================================== ================= ================ =========== CLASS N: Shares Issued 31 379 61 461 3 20 1,226 Shares Issued from merger(1) -- -- -- 187 -- -- -- Shares Issued in Lieu of Dividends and Distributions 59 69 -- 3 55 5 3 Shares Redeemed (158) (179) (169) (283) (90) (78) (82) -------------------------------------------------------- ----------------- ---------------- ----------- Net Class N Transactions (68) 269 (108) 368 (32) (53) 1,147 ======================================================== ================= ================ =========== CLASS R: Shares Issued -- -- -- -- 213 171 -- Shares Issued in Lieu of Dividends and Distributions -- -- -- -- 280 23 -- Shares Redeemed -- -- -- -- (255) (487) -- -------------------------------------------------------- ----------------- ---------------- ----------- Net Class R Transactions -- -- -- -- 238 (293) -- ======================================================== ================= ================ ===========
California High Yield Corporate Bond Government Bond Tax Exempt Bond Bond Fund (000) Fund (000) Fund (000) Fund (000) --------------- --------------- --------------- ------------ 2008 2007 2008 2007 2008 2007 2008 2007 ------------------------------------------------------ --------------- --------------- ------------ CAPITAL SHARES ISSUED AND REDEEMED: INSTITUTIONAL CLASS: Shares Issued 967 1,450 1,358 2,138 412 1,526 85 177 Shares Issued in Lieu of Dividends and Distributions 24 49 34 55 17 33 42 94 Shares Redeemed (633) (824) (394) (572) (511) (803) (212) (679) ------------------------------------------------------ --------------- --------------- ------------ Net Institutional Class Transactions 358 675 998 1,621 (82) 756 (85) (408) ====================================================== =============== =============== ============ CLASS N: Shares Issued -- 21 68 97 10 6 179 157 Shares Issued in Lieu of Dividends and Distributions 1 2 2 3 -- 1 50 100 Shares Redeemed (35) (52) (32) (19) (59) (27) (98) (236) ------------------------------------------------------ --------------- --------------- ------------ Net Class N Transactions (34) (29) 38 81 (49) (20) 131 21 ====================================================== =============== =============== ============
(1) SEE NOTE 8 IN THE NOTES TO FINANCIAL STATEMENTS. AMOUNTS DESIGNATED AS "--" ARE EITHER 0 OR HAVE BEEN ROUNDED TO 0. CNI CHARTER FUNDS | PAGE 66 --------------------------------------------------------------------------------
California Prime Government Tax Exempt Money Market Money Market Money Market Fund (000) Fund (000) Fund (000) ----------------------- ----------------------- ------------------------ 2008 2007 2008 2007 2008 2007 ------------------------------------------------------------------------------------------------------------------------------------ CAPITAL SHARES ISSUED AND REDEEMED: INSTITUTIONAL CLASS: Shares Issued 1,039,554 1,324,934 314,421 532,859 1,131,674 2,517,017 Shares Issued in Lieu of Dividends and Distributions 1,744 3,872 2 4 -- -- Shares Redeemed (930,382) (1,278,386) (313,449) (537,787) (1,070,744) (2,512,794) -------------------------------------------------------------------------------- ------------------------ ------------------------ Net Institutional Class Transactions 110,916 50,420 974 (4,924) 60,930 4,223 ================================================================================ ======================== ======================== CLASS N: Shares Issued 1,877,839 2,695,734 3,475,823 5,523,344 1,261,063 2,143,730 Shares Issued in Lieu of Dividends and Distributions 7,950 12,208 27,732 62,437 5,444 13,108 Shares Redeemed (1,509,472) (2,477,866) (2,729,459) (5,235,257) (1,079,205) (2,092,998) -------------------------------------------------------------------------------- ------------------------ ------------------------ Net Class N Transactions 376,317 230,076 774,096 350,524 187,302 63,840 ================================================================================ ======================== ======================== CLASS S: Shares Issued 843,109 1,873,534 345,220 775,804 173,165 390,230 Shares Redeemed (806,747) (1,577,751) (337,166) (686,827) (202,203) (318,443) -------------------------------------------------------------------------------- ------------------------ ------------------------ Net Class S Transactions 36,362 295,783 8,054 88,977 (29,038) 71,787 ================================================================================ ======================== ========================
AMOUNTS DESIGNATED AS "--" ARE EITHER 0 OR HAVE BEEN ROUNDED TO 0. 10. NEW ACCOUNTING PRONOUNCEMENTS On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB Interpretation No. 48,"Accounting for Uncertainty in Income Taxes" ("FIN 48"). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Fund's tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 was required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. Based on its analysis, management has determined that the adoption of FIN 48 did not have a material impact to the Fund's financial statements upon adoption. However, management's conclusions regarding FIN 48 may be subject to review and adjustment at a later date based on factors including, but not limited to, further implementation guidance expected from the FASB, and on-going analyses of and changes to tax laws, regulations and interpretations thereof. In September 2006, FASB issued Statement on Financial Accounting Standards (SFAS) No. 157, "Fair Value Measurements. "This standard establishes a single authoritative definition of fair value, sets out a framework for measuring fair value and requires additional disclosures about fair value measurements. SFAS No. 157 applies to fair value measurements already required or permitted by existing standards. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. The changes to current generally accepted accounting principles from the application of this Statement relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurements. As of March 31, 2008, the Funds do not believe the adoption of SFAS No. 157 will impact the amounts reported in the financial statements; however, additional disclosures may be required about the inputs used to develop the measurements and the effect of certain of the measurements reported in the financial statements for a fiscal period. CNI CHARTER FUNDS | PAGE 67 disclosure of fund expenses (UNAUDITED) -------------------------------------------------------------------------------- All mutual funds have operating expenses. As a shareholder of a Fund, your investment is affected by these ongoing costs, which include (among others) costs for portfolio management, administrative services, class-specific distribution fees and shareholder reports like this one. It is important for you to understand the impact of these costs on your investment returns. Operating expenses such as these are deducted from the Fund's gross income and directly reduce your final investment return. These expenses are expressed as a percentage of the Fund's average net assets; this percentage is known as the Fund's expense ratio. The following examples use the expense ratio and are intended to help you understand the ongoing costs (in dollars) of investing in your Fund and to compare these costs with those of other mutual funds. The examples are based on an investment of $1,000 made at the beginning of the period shown and held for the entire period. The table below illustrates your Fund's costs in two ways: ACTUAL FUND RETURN. This section helps you to estimate the actual expenses that your Fund incurred over the period. The "Expenses Paid During Period" column shows the actual dollar expense cost incurred by a $1,000 investment in the Fund, and the "Ending Account Value" number is derived from deducting that expense cost from the Fund's gross investment return. You can use this information, together with the actual amount you invested in the Fund, to estimate the expenses you paid over that period. Simply divide your actual account value by $1,000 to arrive at a ratio (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply that ratio by the number shown for your Fund under "Expenses Paid During Period." HYPOTHETICAL 5% RETURN. This section helps you compare your Fund's costs with those of other mutual funds. It assumes that the Fund had an annual 5% return before expenses during the year, but that the expense ratio (Column 3) for the period is unchanged. This example is useful in making comparisons because the Securities and Exchange Commission requires all mutual funds to make this 5% calculation. You can assess your Fund's comparative cost by comparing the hypothetical result for your Fund in the "Expenses Paid During Period" column with those that appear in the same charts in the shareholder reports for other funds. NOTE: Because the return is set at 5% for comparison purposes - NOT your Fund's actual return - the account values shown do not apply to your specific investment. BEGINNING ENDING EXPENSES ACCOUNT ACCOUNT ANNUALIZED PAID VALUE VALUE EXPENSE DURING 10/1/07 3/31/08 RATIOS PERIOD* ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ LARGE CAP VALUE FUND ------------------------------------------------------------------------------ ACTUAL FUND RETURN Institutional Class $1,000.00 $ 860.20 0.95% $4.42 Class N 1,000.00 859.80 1.20% 5.58 HYPOTHETICAL 5% RETURN Institutional Class $1,000.00 $1,020.25 0.95% $4.80 Class N 1,000.00 1,019.00 1.20% 6.06 BEGINNING ENDING EXPENSES ACCOUNT ACCOUNT ANNUALIZED PAID VALUE VALUE EXPENSE DURING 10/1/07 3/31/08 RATIOS PERIOD* ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ LARGE CAP GROWTH FUND ------------------------------------------------------------------------------ ACTUAL FUND RETURN Institutional Class $1,000.00 $ 916.80 0.98% $4.70 Class N 1,000.00 915.90 1.23% 5.89 HYPOTHETICAL 5% RETURN Institutional Class $1,000.00 $1,020.10 0.98% $4.95 Class N 1,000.00 1,018.85 1.23% 6.21 * Expenses are equal to the Fund's annualized expense ratio multiplied by the average account value over the period, multiplied by 183/366 (to reflect one-half year period). CNI CHARTER FUNDS | PAGE 68 --------------------------------------------------------------------------------
BEGINNING ENDING EXPENSES ACCOUNT ACCOUNT ANNUALIZED PAID VALUE VALUE EXPENSE DURING 10/1/07 3/31/08 RATIOS PERIOD* ---------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------- RCB SMALL CAP VALUE FUND ---------------------------------------------------------------------------------------- ACTUAL FUND RETURN Institutional Class $1,000.00 $ 751.70 1.19% $5.21 Class N 1,000.00 750.80 1.44% 6.30 Class R 1,000.00 750.80 1.32% 5.78 HYPOTHETICAL 5% RETURN Institutional Class $1,000.00 $1,019.05 1.19% $6.01 Class N 1,000.00 1,017.80 1.44% 7.26 Class R 1,000.00 1,018.40 1.32% 6.66 ---------------------------------------------------------------------------------------- MULTI-ASSET FUND ---------------------------------------------------------------------------------------- ACTUAL FUND RETURN Institutional Class $1,000.00 $ 976.20 1.37% $6.73 Class N 1,000.00 975.40 1.64% $8.05 HYPOTHETICAL 5% RETURN Institutional Class $1,000.00 $1,018.15 1.37% $6.91 Class N 1,000.00 1,016.80 1.64% 8.27 ---------------------------------------------------------------------------------------- CORPORATE BOND FUND ---------------------------------------------------------------------------------------- ACTUAL FUND RETURN Institutional Class $1,000.00 $1,037.10 0.73% $3.72 Class N 1,000.00 1,036.80 0.98% $4.99 HYPOTHETICAL 5% RETURN Institutional Class $1,000.00 $1,021.35 0.73% $3.69 Class N 1,000.00 1,020.10 0.98% 4.95 ---------------------------------------------------------------------------------------- GOVERNMENT BOND FUND ---------------------------------------------------------------------------------------- ACTUAL FUND RETURN Institutional Class $1,000.00 $1,043.60 0.70% $3.58 Class N 1,000.00 1,042.20 0.95% 4.85 HYPOTHETICAL 5% RETURN Institutional Class $1,000.00 $1,021.50 0.70% $3.54 Class N 1,000.00 1,020.25 0.95% 4.80 ---------------------------------------------------------------------------------------- CALIFORNIA TAX-EXEMPT BOND FUND ---------------------------------------------------------------------------------------- ACTUAL FUND RETURN Institutional Class $1,000.00 $1,016.90 0.50% $2.52 Class N 1,000.00 1,015.50 0.75% 3.78 HYPOTHETICAL 5% RETURN Institutional Class $1,000.00 $1,022.50 0.50% $2.53 Class N 1,000.00 1,021.25 0.75% 3.79
BEGINNING ENDING EXPENSES ACCOUNT ACCOUNT ANNUALIZED PAID VALUE VALUE EXPENSE DURING 10/1/07 3/31/08 RATIOS PERIOD* ---------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------- HIGH YIELD BOND FUND ---------------------------------------------------------------------------------------- ACTUAL FUND RETURN Institutional Class $1,000.00 $ 959.20 1.00% $4.90 Class N 1,000.00 957.70 1.30% 6.36 HYPOTHETICAL 5% RETURN Institutional Class $1,000.00 $1,020.00 1.00% $5.05 Class N 1,000.00 1,018.50 1.30% 6.56 ---------------------------------------------------------------------------------------- PRIME MONEY MARKET FUND ---------------------------------------------------------------------------------------- ACTUAL FUND RETURN Institutional Class $1,000.00 $1,019.20 0.58% $2.93 Class N 1,000.00 1,018.10 0.80% 4.04 Class S 1,000.00 1,017.10 1.00% 5.04 HYPOTHETICAL 5% RETURN Institutional Class $1,000.00 $1,022.10 0.58% $2.93 Class N 1,000.00 1,021.00 0.80% 4.04 Class S 1,000.00 1,020.00 1.00% 5.05 ---------------------------------------------------------------------------------------- GOVERNMENT MONEY MARKET FUND ---------------------------------------------------------------------------------------- ACTUAL FUND RETURN Institutional Class $1,000.00 $1,017.90 0.59% $2.98 Class N 1,000.00 1,016.80 0.81% 4.08 Class S 1,000.00 1,015.80 1.01% 5.09 HYPOTHETICAL 5% RETURN Institutional Class $1,000.00 $1,022.05 0.59% $2.98 Class N 1,000.00 1,020.95 0.81% 4.09 Class S 1,000.00 1,019.95 1.01% 5.10 ---------------------------------------------------------------------------------------- CALIFORNIA TAX EXEMPT MONEY MARKET FUND ---------------------------------------------------------------------------------------- ACTUAL FUND RETURN Institutional Class $1,000.00 $1,011.20 0.55% $2.77 Class N 1,000.00 1,010.00 0.78% 3.92 Class S 1,000.00 1,009.00 0.98% 4.92 HYPOTHETICAL 5% RETURN Institutional Class $1,000.00 $1,022.25 0.55% $2.78 Class N 1,000.00 1,021.10 0.78% 3.94 Class S 1,000.00 1,020.10 0. 98% 4.95
* Expenses are equal to the Fund's annualized expense ratio multiplied by the average account value over the period, multiplied by 183/366 (to reflect one-half year period). CNI CHARTER FUNDS | PAGE 69 approval of investment advisory agreements (UNAUDITED) -------------------------------------------------------------------------------- The Board of Trustees (the "Board") of CNI Charter Funds (the "Trust") is comprised of five Trustees, four of whom are independent of the Trust's investment advisers and sub-advisers (the "Independent Trustees"). In August, 2007, the Board and the Independent Trustees approved amendment of the Trust's advisory agreement (the "Agreement") with City National Asset Management, Inc. ("CNAM") to add the new Multi-Asset Fund series of the Trust (the "Fund"). GENERAL INFORMATION The following information summarizes the Board's considerations associated with its review of the amended Agreement. In connection with their deliberations, the Board considered such information and factors as they believed, in light of the legal advice furnished to them and their own business judgment, to be relevant. As described below, the Board considered the nature, quality and extent of the various investment advisory and administrative services to be performed by CNAM with respect to the Fund. In considering these matters, the Independent Trustees discussed the approval of the Agreement with management and in private sessions with counsel at which no representatives of CNAM were present. The Board reviewed extensive materials regarding investment results of CNAM's portfolio managers, advisory fee and expense comparisons, financial information provided by CNAM, descriptions of various functions such as compliance monitoring and portfolio trading practices, and information about the personnel CNAM proposed would provide investment management and administrative services to the Fund. They also took into account information they received at past Board meetings with respect to these matters. In deciding to approve amendment of the Agreement, the Board and the Independent Trustees did not identify a single factor as controlling and this summary does not describe all of the matters considered. However, the Board and the Independent Trustees concluded that each of the various factors referred to below favored such approval. CNAM NATURE, EXTENT AND QUALITY OF SERVICES In reviewing the services to be provided by CNAM to the Fund, the Board considered a variety of matters, including the background, education and experience of CNAM's key portfolio management and operational personnel; its overall financial strength and stability; its resources and efforts to retain, attract and motivate capable personnel to serve the Fund; and the overall general quality and depth of its organization. The Board also took into account the experience, capability and integrity of its senior management; its investment philosophy and processes; its brokerage, trading and soft dollar practices; its disaster recovery and contingency planning; and its commitment and systems in place with regard to compliance with applicable laws and regulations. INVESTMENT PERFORMANCE The Board assessed the performance of City National Bank's Multi-Asset Portfolio ("MAP") separate account product, which was managed using substantially the same investment strategies and personnel as would be used with respect to the Fund. The Board noted that the annual returns of the MAP strategy for the one-, two- and three-year periods ending June 30, 2007 were higher than the returns of the Lipper Flexible Funds category, PIMCO All Asset Fund (a similarly managed fund), Lehman TIPS Index and Consumer Price Index plus 5% (CPI + 5%) benchmark, except for the Lipper Flexible Funds category for the one-year period. The Board determined that CNAM, Inc. would likely be able to provide high quality services to the Fund. ADVISORY FEES AND FUND EXPENSES The Board determined that the proposed advisory fee and projected total expenses of the Fund were reasonable. They noted that CNAM did not provide advisory services to clients other than the Trust but that the proposed fee to be charged by CNAM to the Fund was lower than that charged by City National Bank to institutional clients for its MAP strategy. CNI CHARTER FUNDS | PAGE 70 -------------------------------------------------------------------------------- They also noted that the projected "all-in" expense ratios of both classes of the Multi-Asset Fund, which included the expenses of underlying funds, were significantly below the average "all-in" expense ratios of the funds of funds in the Lipper Flexible Funds category. The Board also considered information prepared by CNAM relating to its projected costs and profits in managing the Fund, as well as the benefits received by CNAM and its affiliates as a result of CNAM's proposed relationship with the Fund, including advisory fees paid to CNAM, fees paid to City National Bank and City National Securities, Inc. for providing certain shareholder servicing and sub-distribution services to the Trust, and the intangible benefits of any favorable publicity arising in connection with the Fund's performance. They also noted that as the Fund would be newly organized, its asset levels would not be so substantial that they could lead to significant economies of scale. CONCLUSIONS Based on their review, including their consideration of each of the factors referred to above, the Board and the Independent Trustees concluded that the compensation proposed to be paid to CNAM by the Fund pursuant to the Agreement is fair and reasonable in light of the nature and quality of the services to be provided by CNAM to the Fund and its shareholders, and that approval of the amended Agreement was in the best interest of the Fund and its shareholders. CNI CHARTER FUNDS | PAGE 71 notes -------------------------------------------------------------------------------- [GRAPHIC OMITTED] THANK YOU for your investment with CNI Charter Funds. We value the trust you have placed in us to help you achieve your financial goals. -------------------------------------------------------------------------------- For more information on CNI Charter Funds, including charges and expenses, visit cnicharterfunds.com or call 1-888-889-0799 for a free prospectus. Read it carefully before you invest or send money. -------------------------------------------------------------------------------- CNI CHARTER FUNDS(SM) [LOGO](R) CNI-SA-002-0400 ITEM 2. CODE OF ETHICS. Not applicable for semi-annual report. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable for semi-annual report. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable for semi-annual report. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable to open-end management investment companies. ITEM 6. SCHEDULE OF INVESTMENTS. Not applicable. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable to open-end management investment companies. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. Effective for closed-end management investment companies for fiscal years ending on or after December 31, 2005 ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable to open-end management investment companies. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. CNI Charter Funds (the "Fund") has adopted the following procedures by which shareholders may recommend nominees to the Fund's Board of Trustees. The Fund has a Nominating Committee comprised solely of persons who are not considered "interested persons" of the Fund within the meaning of the Investment Company Act of 1940. The Committee periodically reviews such issues as the Board's composition, responsibilities, committees, compensation and other relevant issues, and recommends any appropriate changes to the full Board of Trustees. While the Committee normally is able to identify from its own resources an ample number of qualified candidates, it will consider shareholder suggestions of persons to be considered as nominees to fill future vacancies on the Board, so long as the shareholder or shareholder group submitting a proposed nominee: (a) beneficially owns more than 5% of the Fund's voting shares and has held such shares continuously for two years, and (b) is not an adverse holder. No eligible shareholder or shareholder group may submit more than one independent Board member nominee each year. Such suggestions must be sent in writing to the Fund 's Secretary, and must be accompanied by the shareholder's contact information, the nominee's contact information and number of Fund shares owned by the nominee, all information regarding the nominee that would be required to be disclosed in solicitations of proxies for elections of directors required under the Securities Exchange Act of 1934, and a notarized letter from the nominee stating his or her intention to serve as a nominee and be named in the Fund's proxy statement, if so designated by the Committee and the Board of Trustees. ITEM 11. CONTROLS AND PROCEDURES. (a) The certifying officers, whose certifications are included herewith, have evaluated the registrant's disclosure controls and procedures within 90 days of the filing date of this report. In their opinion, based on their evaluation, the registrant's disclosure controls and procedures are adequately designed, and are operating effectively to ensure, that information required to be disclosed by the registrant in the reports it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. (b) There were no significant changes in the registrant's internal control over financial reporting that occurred during the registrant's last fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting. ITEMS 12. EXHIBITS. (a)(1) Not applicable for semi-annual report. (a)(2) A separate certification for the principal executive officer and the principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(a)), are filed herewith. (b) Officer certifications as required by Rule 30a-2(b) under the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(b)) also accompany this filing as an Exhibit. -------------------------------------------------------------------------------- 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) CNI Charter Funds By (Signature and Title)* /s/ Richard A. Weiss --------------------------- Richard A. Weiss, President & CEO Date May 27, 2008 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/ Richard A. Weiss --------------------------- Richard A. Weiss, President & CEO Date May 27, 2008 By (Signature and Title)* /s/ Eric Kleinschmidt --------------------------- Eric Kleinschmidt, Controller and COO Date May 27, 2008 * Print the name and title of each signing officer under his or her signature.