-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QYlewpE6kA4RY0Z6W4q/dfagq1s7lsWritSgoaUC3ao5S4rjyK4JjJFRYtrtyHiI VFdrTMYKfAdrAe4hY+7VXQ== 0001012709-00-000011.txt : 20000202 0001012709-00-000011.hdr.sgml : 20000202 ACCESSION NUMBER: 0001012709-00-000011 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19991031 FILED AS OF DATE: 20000110 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FREMONT MUTUAL FUNDS INC CENTRAL INDEX KEY: 0000837389 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: MD FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-05632 FILM NUMBER: 504359 BUSINESS ADDRESS: STREET 1: 50 BEALE STREET SUITE 100 CITY: SAN FRANCISCO STATE: CA ZIP: 94105 BUSINESS PHONE: 8005484539 MAIL ADDRESS: STREET 1: 50 BEALE STREET SUITE 100 CITY: SAN FRANCISCO STATE: CA ZIP: 45202 FORMER COMPANY: FORMER CONFORMED NAME: SIERRA MUTUAL FUNDS INC DATE OF NAME CHANGE: 19881113 N-30D 1 FREMONT MUTUAL FUNDS, INC. - ANNUAL REPORT FREMONT MUTUAL FUNDS, INC. ANNUAL REPORT [GRAPHIC OMITTED] October 31, 1999 FREMONT [LOGO] FUNDS A MESSAGE FROM MICHAEL H. KOSICH, PRESIDENT OF FREMONT MUTUAL FUNDS, INC. [PHOTO] Dear Fellow Shareholder, As we close fiscal 1999, the global economic picture couldn't be much brighter. The long dormant Japanese economy is finally showing signs of life, emerging market Asia is recovering, European economies have regained momentum, and like Old Man River, the U.S. economy just keeps rolling along. From this perspective, the future of the world's equities markets looks quite promising. However, investors often have trouble seeing the forest through all the trees. For example, as I write, U.S. equities investors are more focused on what the Federal Reserve is likely to do over the next three months than on the favorable long term impact of a strong global economy on stocks. Everyone is tuned into their favorite financial news program waiting for the release of the latest monthly economic reports (often revised next month) and Fed Chairman Alan Greenspan's most recent comments (generally revised in his next speech). We think this is the wrong approach. Speculators try to take advantage of market gyrations and short term performance trends. Investors ignore the short term vicissitudes of the market and stick with well conceived programs designed to achieve their long term financial objectives. Case in point, I recently spoke with a shareholder who bought the Fremont U.S. Micro-Cap Fund in October 1997, following a year in which the Fund had gained more than 40%. He then sold in October 1998, after the Fund had declined around 25% in the midst of a bear market for small company stocks. Of course, he was sitting on the sidelines this year as Micro-Cap posted a phenomenal 110.46% return. I suggested to him that if he had focused more on Bob Kern's outstanding long term track record and less on trailing 12-month results he could have avoided an all too common investment mistake. I would offer the same advice to shareholders having similar experiences with Fremont's International Growth and Emerging Markets Funds over the last several years. Select your mutual fund investments carefully and be patient. Good things come to those who wait. In closing, we extend our condolences to the family and co-workers of Bruce Bee (Portfolio Manager of the Fremont International Small Cap Fund) who passed away this summer. We have lost a friend and a fine portfolio manager. On December 16, 1999, we merged the Fremont International Small Cap Fund into the Fremont International Growth Fund, a move we believe preserved the fundamental character of our shareholders' international stock commitments. Sincerely, /s/ Michael H. Kosich Michael H. Kosich President - -------------------------------------------------------------------------------- TABLE OF CONTENTS - -------------------------------------------------------------------------------- FUND PROFILES AND LETTERS TO SHAREHOLDERS Fremont Global Fund ....................................................... 2 Fremont International Growth Fund ......................................... 4 Fremont Emerging Markets Fund ............................................. 6 Fremont U.S. Micro-Cap Fund ............................................... 8 Fremont U.S. Small Cap Fund ............................................... 10 Fremont Growth Fund ....................................................... 12 Fremont Real Estate Securities Fund ....................................... 14 Fremont Bond Fund ......................................................... 16 Fremont Money Market Fund ................................................. 18 Fremont California Intermediate Tax-Free Fund ............................. 20 Report of Independent Accountants ......................................... 22 STATEMENTS OF INVESTMENTS IN SECURITIES AND NET ASSETS Fremont Global Fund ....................................................... 23 Fremont International Growth Fund ......................................... 35 Fremont Emerging Markets Fund ............................................. 37 Fremont U.S. Micro-Cap Fund ............................................... 38 Fremont U.S. Small Cap Fund ............................................... 40 Fremont Growth Fund ....................................................... 41 Fremont Real Estate Securities Fund ....................................... 43 Fremont Bond Fund ......................................................... 44 Fremont Money Market Fund ................................................. 47 Fremont California Intermediate Tax-Free Fund ............................. 50 Notes to Statements of Investments in Securities and Net Assets, Portfolio Abbreviations & Currency Abbreviations ....................... 52 Country Diversification ................................................... 53 COMBINED FINANCIAL STATEMENTS Statements of Assets and Liabilities ...................................... 54 Statements of Operations .................................................. 58 Statements of Changes in Net Assets ....................................... 62 FINANCIAL HIGHLIGHTS ...................................................... 66 NOTES TO FINANCIAL STATEMENTS ............................................. 72 TAX DESIGNATION ........................................................... 83 - -------------------------------------------------------------------------------- FREMONT GLOBAL FUND - -------------------------------------------------------------------------------- The Fremont Asset Allocation Committee, Portfolio Managers 0for Fremont Global Fund [PHOTO] Dave Redo, Bob Haddick, Sandie Kinchen, Al Kirschbaum, Pete Landini and Andrew Pang. - ------------ FUND PROFILE - ------------ Fremont Global Fund offers conservative investors a balanced approach to global investing. The Fund management team understands the reward potential and perhaps more importantly, the risks in global financial markets. Through country diversification, prudent allocation between stocks, bonds and cash, and disciplined securities selection, the Fund seeks to maximize total return (including income and capital gains) while reducing risk by investing in multiple categories of U.S. and foreign securities. The Fund's portfolio management team employs a three-step investment process. First, economic growth, inflation, and interest rate forecasts are developed to identify those regions and individual countries offering the best investment opportunities. Second, financial market data is examined to determine the most advantageous mix of stocks, bonds and cash. Finally, the portfolio managers select individual securities based on intensive quantitative and fundamental analysis. To Our Shareholders, For the six- and twelve-month periods ended October 31, 1999, Fremont Global Fund returned 4.85% and 17.37% compared to the Lipper Global Flexible Fund Average's 6.35% and 16.51% gains. Shifting economic trends altered the global financial market landscape during fiscal 1999. Asian economies recovered much faster than anticipated, and the Japanese and many emerging market Asian stock markets staged "worst to first" rallies. European economies and equities markets stalled in the first half of this reporting period before regaining momentum in the second half. The one economic constant over the last twelve months--the strength of the U.S. economy--resulted in an about face in the U.S. equities market, as enthusiasm generated by improving corporate profits gave way to concerns spawned by rising interest rates. We also saw changes in global fixed income markets. The long moribund Japanese bond market came roaring back to life, while the U.S. bond market started fiscal 1999 like a lion and exited like a lamb, as the Federal Reserve reversed course on monetary policy. During the year, we responded to these changing economic and market tides. Most of the changes we initiated worked in our favor. Our decision in early May to under-weight U.S. equities reduced portfolio volatility as the market retreated from its highs through the summer and early fall. Shortening the duration in our domestic bond portfolio also helped preserve assets as interest rates climbed. Our decision to devote a portion of our domestic equities assets to small cap stocks under the direction of Kern Capital Management's Bob and David Kern paid off handsomely. Over the short term, a few of our strategic decisions worked against us--we remained modestly under-weighted in Japanese equities, did not own any Japanese bonds, and held a little more cash than usual. In the coming year, we believe the markets will validate these choices. The end result was good absolute and relative returns. Looking ahead, unless we see evidence of the U.S. economy slowing and some indication the Federal Reserve is moving toward a more - -------------------------------------------------------------------------------- GROWTH OF $10,000 (1) [GRAPHIC OMITTED] 10/31/99 -------- S&P 500 INDEX $67,793 FREMONT GLOBAL FUND $29,578 SALOMON NON-US GOVT. BOND INDEX (CURRENCY HEDGED) $23,592 LEHMAN BROS. INTERMEDIATE GOVT./CORP. BOND INDEX $22,714 MSCI EAFE INDEX $19,732 AVERAGE ANNUAL RETURNS FOR PERIODS ENDED 10/31/99 1 YEAR 5 YEARS 10 YEARS SINCE INCEPTION (11/18/88) - -------------------------------------------------------------- 17.37% 12.01% 10.03% 10.41% ANNUAL RETURNS TOP TEN HOLDINGS 11/18/88-10/31/89* +13.71% S&P 500 Futures, 11/01/89-10/31/90 -2.64% 54 Contracts, Exp. Dec. 1999 .......... 2.6% 11/01/90-10/31/91 +18.38% 30-yr. U.S. Treasury Bond Futures, 11/01/91-10/31/92 +7.10% 49 Contracts, Exp. Dec. `99 ........... 0.8% 11/01/92-10/31/93 +17.51% Microsoft Corp. .......................... 0.7% 11/01/93-10/31/94 +1.74% U.S.A. Treasury Notes, 6.500%, 10/15/06 .. 0.7% 11/01/94-10/31/95 +12.78% Government of Sweden, 6.000%, 02/09/05 ... 0.7% 11/01/95-10/31/96 +13.72% Caisse D'Amort Dette, 5.125%, 10/25/08 ... 0.7% 11/01/96-10/31/97 +13.01% Government of France, 8.500%, 10/25/19 ... 0.7% 11/01/97-10/31/98 +3.62% Deutschland Republic, 5.625%, 01/04/28 ... 0.7% 11/01/98-10/31/99 +17.37% General Electric Co. ..................... 0.6% Powergen, 8.500%, 07/03/06 ............... 0.6% TOTAL .......................... 8.8% *Unannualized 1Assumes initial investment of $10,000 on inception date, November 18, 1988. Performance data illustrated is historical. Past performance is not predictive of future performance. Share price and return will vary so that a gain or loss may be realized when shares are sold. All performance figures assume reinvestment of dividends. Management fees and other expenses are 8 8 included in the Fund's performance; however, fees and expenses are not incorporated in the S&P 500 Index, the Salomon Non-U.S. Government Bond Index (currency hedged), the Lehman Bros. Intermediate Government/Corporate Bond Index, or the Morgan Stanley Capital International EAFE Index. - -------------------------------------------------------------------------------- 2 FREMONT MUTUAL FUNDS accommodative monetary posture, we will remain under-weighted in U.S. equities and maintain a relatively short duration in the Fund's domestic bond portfolio. Overseas, we continue to favor Europe and the UK, where approximately 55% of the Fund's international equities assets reside and where we also see the best fixed income opportunities over the short term. The UK and the new Euroland should enjoy moderate economic growth with low inflation--the kind of economy that propelled the U.S. stock and bond markets through much of this decade. We are happy with our Japanese equities investments, but not anxious to increase our exposure in what was one of last year's best performing markets. We doubt the already deeply indebted Japanese government can afford to continue to carry the economy on its back and believe that the much ballyhooed restructuring of Japanese corporations may have as many short term negatives (higher unemployment and even more anemic consumer spending) as long term positives. We will probably remain cautious in emerging market Asia, where we see some political and - -------------------------------------------------------------------------------- FREMONT GLOBAL FUND GEOGRAPHIC DIVERSIFICATION AS OF 10/31/99 - -------------------------------------------------------------------------------- [GRAPHIC OMITTED] CANADA 2.7% UNITED STATES 58.0% EMERGING MARKETS LATIN AMERICA 1.8% EUROPE 26.9% JAPAN 6.6% PACIFIC RIM 4.0% economic roadblocks that may slow the current recovery. We will be looking to spend some of our cash as opportunities evolve. As is our custom, we will provide a few examples of the Fund's holdings. On the domestic equities front, our "blue chip" growth stock bias is typified by our investment in Intel Corp. Intel is the worldwide market leader in higher end microprocessors. Demand for personal computers has been increasing recently, which translates directly into increased demand for Intel's products. The latest in its Pentium series, Pentium III, is now being shipped to the leading PC manufacturers. Dynamic random access memory (DRAM) prices have been increasing, another plus for the company. Intel is also the largest producer of flash memory devices, (chips that retain information even when the power in the device is turned off), used in mobile phones and electronic organizers. Via its recent acquisition of DSP Communications, it has made further inroads into the fast growing communications chip market. Intel is at the top of its class and, we believe, capable of staying there for years to come. On the bond side, we have recently been buying U.S. Treasury Inflation Indexed Bonds (TIIs). The ten-year TII has a real yield of 4.1%, and when an estimated 2.5% inflation adjustment component is added, we are getting a 6.5% nominal yield. This is materially higher than the current nominal yield on a straight 10-year Treasury. In conclusion, as evidenced by the Global Fund's attractive absolute returns and competitive results relative to its benchmark, fiscal 1999 was a good year. While we can never be certain of what the global financial markets hold in store for us in fiscal 2000, we believe we have positioned the portfolio appropriately relative to our analysis of economic and market trends. Sincerely, /s/ Dave Redo /s/ Pete Landini /s/ Robert J.Haddick /s/ Sandie Kinchen /s/ Al Kirschbaum /s/ Andrew Pang Fremont Asset Allocation Committee Portfolio Managers FREMONT MUTUAL FUNDS 3 - -------------------------------------------------------------------------------- FREMONT INTERNATIONAL GROWTH FUND - -------------------------------------------------------------------------------- The Portfolio Management Team Capital Guardian Trust Company [PHOTO] Nancy J. Kyle, David I. Fisher, Nilly Sikorsky, Hartmut Giesecke, Lionel M. Sauvage, Robert Ronus, Rudolf M. Staehlin, and Richard N. Havas - ------------ FUND PROFILE - ------------ Under the stewardship of Capital Guardian Trust Company (CGTC), the Fremont International Growth Fund is a diversified portfolio of international equities believed to have superior capital appreciation potential. CGTC's parent company, The Capital Group Companies, has one of the investment industry's most elaborate and successful global intelligence networks. CGTC employs a multiple portfolio manager system. Eight individual portfolio managers and the collective research analyst team are each given a portion of the portfolio's assets to manage. The investment styles of the portfolio managers vary. However, they have a unifying investment objective: superior long term returns versus the same benchmark index. The entire portfolio is carefully monitored to ensure sufficient regional and country diversification. To Our Shareholders, For the six- and twelve-month periods ended October 31, 1999, the Fremont International Growth Fund returned 15.73% and 38.70% compared to the Morgan Stanley Capital International Europe, Australia, and Far East (EAFE) Index's 6.73% and 23.03% gains. Our Japanese investments were among the portfolio's best performers in fiscal 1999. We had a neutral weighting in Japan relative to the EAFE benchmark, but were probably over-weighted versus our peer group, many of whom had given up on the Japanese stock market after years of under-performance. Our stock selections, primarily export oriented technology and consumer electronics companies, continued to perform well in the second half, even with the yen rising against the dollar. This is a function of innovation and the world class quality of their products. We believe they can continue to prosper despite the strong yen. Many investors seem to believe the turnaround in the Japanese economy and stock market will be short-lived. The consensus seems to be that without the already debt laden government's ongoing economic pump priming, the economy would still be in trouble. In fact, a lot of government spending on infrastructure has been wasteful, producing "roads and bridges to nowhere". We think the government may allocate capital more productively in the future, focusing on technology and telecommunications. More importantly, the stock market will do a lot better job allocating capital to more productive sectors of the economy. In addition, a strong Japanese stock market should increase domestic consumer confidence and spending. We think corporate restructuring will also have a positive effect on the Japanese economy and stock market. We are mindful, however, that restructuring in itself is no panacea. The restructuring of fundamentally sound businesses can be quite productive, helping to improve return on equity and profits. But, simply closing plants and cutting jobs doesn't impress us. Good companies should be growing-- not shrinking. So, in our equities research, we are careful to distinguish between corporate restructurings that - -------------------------------------------------------------------------------- GROWTH OF $10,000 (1) [GRAPHIC OMITTED] 10/31/99 -------- MSCI EAFE INDEX $16,163 FREMONT INTERNATIONAL GROWTH FUND $15,332 AVERAGE ANNUAL RETURNS FOR PERIODS ENDED 10/31/99 1 YEAR 3 YEARS 5 YEARS SINCE INCEPTION (3/1/94) - ----------------------------------------------------------- 38.70% 11.82% 8.43 7.83% ANNUAL RETURNS TOP TEN HOLDINGS 3/1/94-10/31/94* +2.30% Mannesmann Ag ........................... 2.7% 11/01/94-10/31/95 +0.13% Ntt Mobile Communication Network 11/01/95-10/31/96 +7.07% (Ntt Docomo) ......................... 2.5% 11/01/96-10/31/97 -0.01% Nokia Ab, Adr ........................... 2.3% 11/01/97-10/31/98 +0.80% Tokyo Electron Ltd. ..................... 1.9% 11/01/98-10/31/99 +38.70% Sony Corp. .............................. 1.6% Murata Manufacturing Co. Ltd. ........... 1.5% Taiwan Semiconductor Manufacturing Co. Ltd., Adr .......... 1.4% Advantest Corp. ......................... 1.4% Nec Corp. ............................... 1.4% Asm Lithography Holding Nv .............. 1.4% Total ......................... 18.1% *Unannualized 1Assumes initial investment of $10,000 on inception date, March 1, 1994. Performance data illustrated is historical. Past performance is not predictive of future performance. Share price and return will vary so that a gain or loss may be realized when shares are sold. All 8 8performance figures assume reinvestment of dividends. Management fees and other expenses are included in the Fund's performance; however, fees and expenses are not incorporated in the Morgan Stanley Capital International EAFE Index. - -------------------------------------------------------------------------------- 4 FREMONT MUTUAL FUNDS are giving good companies in good businesses more flexibility to grow and improve operating results, and restructurings that may grab headlines, but will have little long term benefit for the company and its shareholders. European economies and stock markets struggled in first half fiscal 1999 before regaining momentum in the second half. We expect good earnings trends over the next year for European portfolio holdings in the telecommunications, publishing/media, and financial service industries. We also like the earnings prospects for a select group of industrial cyclical stocks. This year, we had one major disappointment in Europe resulting from government interference in the free market process. Our investment in Telecom Italia, which is being taken over by Olivetti, did not live up to its full potential, because the government wanted control to remain with an Italian company and discouraged a competing bid from Deutsche Telecom. As it stands today, we will be getting debt heavy Tecnost stock (an Olivetti subsidiary) for our stake in - -------------------------------------------------------------------------------- FREMONT INTERNATIONAL GROWTH FUND GEOGRAPHIC DIVERSIFICATION AS OF 10/31/99 - -------------------------------------------------------------------------------- [GRAPHIC OMITTED] CANADA 3.5% UNITED STATES 14.2% EMERGING MARKETS LATIN AMERICA 1.9% EMERGING MARKETS AFRICA 0.6% EUROPE 46.0% JAPAN 27.3% PACIFIC RIM 6.5% Telecom Italia. We believe our clients and the rest of Telecom Italia's shareholders are getting shortchanged in this transaction. We hope such economic provincialism will ultimately be eliminated in the new Euroland. Let's return to Japan for an example of a current portfolio holding. NTT DoCoMo, the cellular telephone spin off from Nippon Telephone and Telegraph (NTT), is one of the few pure domestic companies among our Japanese holdings. With most of the debt and pension liabilities retained by parent NTT, DoCoMo began its life as an independent company with an exceptionally strong balance sheet. The company is doing a great job adding new customers in the fast growing Japanese cellular telephone market. I-mode, DoCoMo's new cellular telephone featuring internet connectivity, is being well received in the market. We are forecasting 15-20% average annual cash flow growth for DoCoMo over the next several years, and at the close of this reporting period, the stock was trading at around 21 times enterprise value/earnings before interest, taxation, depreciation, and amortization (EBITDA). We believe this is an attractive valuation given DoCoMo's growth potential. In closing, we are pleased with the Fremont International Growth Fund's absolute and relative performance in fiscal 1999. All of us here at Capital Guardian have a single objective--superior long-term investment performance. Each of the members of our investment team has the freedom to exercise our independent judgment on stocks that will help the Fund meet this goal. Collectively, we pledge our best efforts on your behalf. Sincerely, /S/ Nancy J. Kyle Nancy Kyle and Capital Guardian Trust Company's Portfolio Counselors Team FREMONT MUTUAL FUNDS 5 - -------------------------------------------------------------------------------- FREMONT EMERGING MARKETS FUND - -------------------------------------------------------------------------------- Henry Thornton Portfolio Manager Colonial First State Investments [PHOTO] Henry Thornton - ------------ FUND PROFILE - ------------ Fremont Emerging Markets Fund employs a bottom-up stock picking approach in building a diversified portfolio of emerging market companies. The Fund focuses on the stocks of companies with rapid, sustainable earnings growth trading at reasonable market valuations. Portfolio risk is further reduced by country diversification. Fund management establishes a country allocation policy and each regional investment team conducts rigorous fundamental research, including company visits, to select individual stocks within each market. Liquidity is also carefully monitored. Portfolio Manager Henry Thornton is Head of Emerging Markets for London based Colonial First State Investments. He has devoted his entire professional career to emerging market investing. To Our Shareholders, For the six- and twelve-month periods ended October 31, 1999, the Fremont Emerging Markets Fund returned 17.60% and 36.16% compared to the Morgan Stanley Capital International Emerging Markets Free (MSCI-EMF) Index's 7.23% and 44.62%, and the IFC Investable Index's 7.26% and 43.08% respective gains. We are pleased to report excellent absolute returns for full-year fiscal 1999 and are encouraged by the Fund's superior performance relative to its index benchmarks in the second half. Our over-weighting in Asia, concentration in economically sensitive sectors, and bias toward larger cap stocks deserve much of the credit for the Fund's strong finish this year. At the close of fiscal 1999, some 50% of the Fund's assets are invested in Asia, primarily Taiwan, Korea, Thailand, and India. We favor large "blue chip" cyclicals in industries such as semiconductors, energy, and basic materials, which we believe will be prime beneficiaries of the ongoing economic recovery in the Pacific Rim. In addition to excellent growth prospects, many of these companies are restructuring with an eye to improving profitability. Greater demand, more pricing power, and the shifting focus from share of market to share of profits, should result in accelerating earnings. Following is an illustration of the kind of Asian company we favor. Korea's Pohang Iron and Steel Company Ltd. (POSCO) is the world's largest steel company and one of the lowest cost producers in the industry. It's business is primarily domestic, selling steel to Korean automakers and shipbuilders. With Korea's strong economic rebound, demand is increasing and so are steel prices. We believe this will translate into a 20% plus earnings gain for the company next year and a mid teens earnings growth rate over the next three years. If we are right, this $12 billion market cap company should attract some attention, particularly in the US, where its ADR trades on the NYSE. Right now, POSCO looks very cheap to us trading at approximately 10 times next year's earnings estimates and under 5 times projected cash flow. We remain under-weighted in - -------------------------------------------------------------------------------- GROWTH OF $10,000 (1) [GRAPHIC OMITTED] 10/31/99 -------- FREMONT EMERGING MARKETS FUND $9,266 MSCI EMERGING MARKETS FREE $8,569 AVERAGE ANNUAL RETURNS FOR PERIODS ENDED 10/31/99 1 YEAR 3 YEARS SINCE INCEPTION (6/24/96) - ------------------------------------------------ 36.16% -2.25% -2.25% ANNUAL RETURNS TOP TEN HOLDINGS 6/24/96-10/31/96* -3.12% Samsung Electronics Ltd., GDR .......... 4.3% 11/01/96-10/31/97 +12.55% Phoenix Pulp & Paper Public Co. Ltd. ... 4.3% 11/01/97-10/31/98 -37.59% Infosys Technologies Ltd. .............. 3.5% 11/01/98-10/31/99 +36.16% China Steel Corp., GDR ................. 3.4% Matav RT, ADR .......................... 3.1% Pohang Iron and Steel Co. Ltd. ......... 3.0% Videsh Sanchar Nigam Ltd., GDR ......... 2.7% Telefonos de Mexico SA (Class L), ADR .. 2.7% Petroleo Brasileiro SA, ADR ............ 2.7% Great Wall Technology Co. .............. 2.5% TOTAL ........................ 32.2% *Unannualized 1Assumes initial of $10,000 on inception date, June 24, 1996. Performance data illustrated is historical. Past performance is not predictive of future performance. Share price and return will vary so that a gain or loss may be realized when shares are sold. All performance figures 8 8assume reinvestment of dividends. Management fees and other expenses are included in the Fund's performance; however, fees and expenses are not incorporated in the MSCI Emerging Markets Free Index. - -------------------------------------------------------------------------------- 6 FREMONT MUTUAL FUNDS Europe. Greece looks extremely overvalued and recent foreign direct investment into countries like Poland has not yet shown itself in rising exports. We are also still under-weighted in Latin America, where economic recovery is trailing Asia. Our investments are primarily in Mexico and Brazil, the two largest economies in the region. Latin American telecommunications, natural resource, and cyclical industrial stocks should do better in the year ahead as these economies gradually pick up steam. With one very good year on the books, the current debate is whether we are nearing the end of a bear market rally or in the early stages of a prolonged bull market. While we are hardly unbiased, we favor the latter scenario because of five key factors: 1. Commodities prices are recovering. Emerging market nations supply the developed world with raw materials and lower cost industrial commodities. Global economic growth prospects are good and while we don't expect to see a boom in commodity prices, they should continue to trend up in the year ahead. 2. The emerging market financial - -------------------------------------------------------------------------------- FREMONT EMERGING MARKETS FUND GEOGRAPHIC DIVERSIFICATION AS OF 10/31/99 - -------------------------------------------------------------------------------- [GRAPHIC OMITTED] UNITED STATES 3.5% EMERGING MARKETS LATIN AMERICA 20.4% EMERGING MARKETS AFRICA 9.7% EMERGING MARKETS EUROPE 14.5% MIDDLE EAST 1.4% EMERGING MARKETS ASIA 20.1% PACIFIC RIM 30.4% crisis is over. While progress is uneven, emerging market governments are undertaking the fiscal and monetary reforms needed for greater economic stability. 3. The corporate world is changing. Emerging market companies are finally recognizing that growth for growth's sake is the wrong goal and that increasing profitability is what really matters. In the mid 1990's Return on Equity (ROE) in the U.S. and emerging markets was similar at about 10%. By 1999, U.S. ROE had almost doubled and emerging market ROE's had been halved. Not surprisingly, the U.S. equities market has outperformed and is currently trading at nearly three times the price/book value ratio of emerging markets stocks. An increasing number of the companies we visit list improving ROE as their primary goal and are taking legitimate steps to achieve this objective. If they are successful, we should see higher price to book valuations in the emerging markets. 4. Emerging market economies are recovering and this will be reflected in rapid earnings growth. 5. Finally, emerging market stocks are under-owned. After 5 years of under-performance relative to developed nation stock markets and last year's near collapse, institutional investors have been very reluctant to venture back into the emerging markets. With the U.S. and most European stock markets stumbling this year, and the emerging markets putting up some great numbers, investment capital should begin to flow back in. The first law of the financial markets is that money follows returns. In closing, the emerging markets have come roaring back and the Fund has delivered an attractive return in fiscal 1999. We believe this is a meaningful turnaround and that emerging market equities will be a productive source of investment profits in the years ahead. Sincerely, /s/ Henry Thornton Henry Thornton Portfolio Manager FREMONT MUTUAL FUNDS 7 - -------------------------------------------------------------------------------- FREMONT U.S. MICRO-CAP FUND - -------------------------------------------------------------------------------- Robert E. Kern, Jr. Portfolio Manager Kern Capital Management LLC [PHOTO] Robert E. Kern, Jr. - ------------ FUND PROFILE - ------------ The U.S. micro-cap stock market is a breeding ground for entrepreneurially-managed companies with exceptional growth prospects. With minimal Wall Street research coverage and low institutional ownership, micro-cap stocks represent the least efficient sector of the domestic equities market. This inefficiency creates attractive investment opportunities for the research-driven stock pickers managing the Fremont U.S. Micro-Cap Fund. Since the investment potential of micro-cap stocks is largely determined by the business prospects for individual companies rather than macro-economic trends, the Fund's focus is on bottom-up stock selection. Fund management analyzes financial statements, the company's competitive position, and meets with key corporate decision makers to discuss strategies for future growth. Robert E. Kern, Jr. is nationally recognized as a pioneer and leading practitioner of micro-cap research and portfolio management. To Our Shareholders, For the six- and twelve-month periods ended October 31, 1999, the Fremont U.S. Micro-Cap Fund gained 43.95% and 110.46% compared to the Russell 2000's - -0.25% and 14.87% returns. Fiscal 1999 was a particularly gratifying year for us in that the Fund posted impressive gains in a rather uninspiring small company stock market. More than any other year in my investment career, fiscal 1999 validated our thesis that successful micro-cap investing is all about stock selection. As evidenced by the Fund's performance relative to the benchmark index, it was not the asset class that mattered or even industry group concentration. It was buying the right companies, at the right price, at the right time, and just as importantly, avoiding mistakes. This is a function of research--not just analyzing balance sheets and income statements, but meeting with corporate managements, reviewing business plans, and assessing their ability to effectively execute growth strategies. This year, as in past and we hope future years, our focus on truly innovative small companies also deserves credit for our success. Innovative new products and services translate into extraordinary growth potential and investor interest. We work hard to identify innovative young companies ahead of the competition. When we succeed, and our stock selections attract the attention of other institutional investors, their performance can be quite spectacular. For example, this year, several of our holdings performed so well that they quickly graduated from the micro-cap asset class. Briefly reviewing fiscal 1999, our decision in the dark days of August/September 1998 to concentrate the portfolio in those stocks we had the greatest degree of confidence in and that we felt would perform the best when the market turned around paid off handsomely in the first half. One of the biggest challenges in the second half was making decisions on stocks that had performed extraordinarily well. It takes courage to sell stocks that keep advancing. However, when portfolio holdings reached valuations exceeding economic reality, we scaled back. In retrospect, in some cases, we sold too early. In other cases, our - -------------------------------------------------------------------------------- GROWTH OF $10,000 (1) [GRAPHIC OMITTED] 10/31/99 -------- FREMONT U.S. MICRO-CAP FUND $42,179 RUSSELL 2000 INDEX $19,246 AVERAGE ANNUAL RETURNS FOR PERIODS ENDED 10/31/99 1 YEAR 3 YEARS 5 YEARS SINCE INCEPTION (6/30/94) - ------------------------------------------------------------ 110.46% 27.57% 32.42% 30.96% ANNUAL RETURNS TOP TEN HOLDINGS 6/30/94-10/31/94* +3.60% Netopia, Inc. ....................... 6.1% 11/01/94-10/31/95 +38.68% ArthroCare Corp. .................... 5.5% 11/01/95-10/31/96 +41.46% Photon Dynamics, Inc. ............... 3.9% 11/01/96-10/31/97 +28.80% TeleTech Holdings, Inc. ............. 3.2% 11/01/97-10/31/98 -23.45% Anaren Microwave, Inc. .............. 2.8% 11/01/98-10/31/99 +110.46% Puma Technology, Inc. ............... 2.5% Rare Medium Group, Inc. ............. 2.4% New Era of Networks, Inc. ........... 2.4% Ancor Communications, Inc. .......... 2.3% California Amplifier, Inc. .......... 2.3% TOTAL ..................... 33.4% *Unannualized 1Assumes initial investment of $10,000 on inception date, June 30, 1994. Performance data illustrated is historical. Past performance is not predictive of future performance. Share price and return will vary so that a gain or loss may be realized when shares are sold. All performance 8 8figures assume reinvestment of dividends. Management fees and other expenses are included in the Fund's performance; however, fees and expenses are not incorporated in the Russell 2000 Index. - -------------------------------------------------------------------------------- 8 FREMONT MUTUAL FUNDS timing was quite good. Regardless of where the chips ultimately fall, we believe exercising valuation discipline is the only prudent way to invest in what can be a quite volatile asset class. In the second fiscal half, we did alter our sector allocation. We pared back our consumer stock holdings in response to higher mortgage rates, higher energy prices, and a slumping stock market--all factors that may erode consumer confidence and restrain consumer spending going forward. We increased our commitment to technology, particularly in the communications arena, where we are finding some very promising small companies with exciting new broadband technologies for faster internet access and transmission. We are largely steering clear of computer component companies, whose earnings are likely to be disrupted by erratic order patterns due to the Y2K phenomenon. Although we have not yet increased our allocation to healthcare, we are encouraged by the very good performance of our holdings in the second half, following a disappointing first half. We like to remind shareholders that - -------------------------------------------------------------------------------- FREMONT U.S. MICRO-CAP FUND PORTFOLIO DIVERSIFICATION AS OF 10/31/99 - -------------------------------------------------------------------------------- BUSINESS EQUIPMENT & SERVICES (17.4%) TECHNOLOGY (EQUIPMENT) (17.4%) SHORT TERM SECURITIES (16.1%) HEALTH CARE (10.5%) OTHER (10.3%) RETAIL (8.0%) TECHNOLOGY (COMPONENTS) (7.3%) TECHNOLOGY (SOFTWARE) (6.8%) CONSUMER NON-DURABLES (6.2%) innovation is not limited to glamorous sectors like technology. We occasionally find truly innovative companies in somewhat mundane industries. Jore Corporation, which became a public company in September 1999, is a great example. Jore is a leading manufacturer of innovative power tool accessories including a patented quick change drilling and driving system and a full range of hex-shank drill bits, screwdriver heads, etc. Jore has also developed a drill bit machining center that automates all aspects of drill bit production resulting in improved quality and lower manufacturing costs. But perhaps the most innovative thing Jore is doing is on the marketing front. Currently Jore builds small power tool accessories for the Sears' Craftsman brand. In April 1999, Jore licensed from the Stanley Works the exclusive right to sell power tool accessories using the highly respected StanleyTM brand. They expect to rollout these Stanley brand products in stores like Home Depot, Lowes and other big hardware retailers in 2000 and 2001. Jore's revenues, which were slightly over $10 million in 1996, are forecasted to exceed $55 million in 1999 and reach $100 million within the next two years. The combination of strong revenue growth and improving profitability is expected to result in accelerating earnings growth for Jore. Although Jore is a recent addition to the Fund's portfolio, it is a truly innovative micro-cap company in product development, manufacturing processes, and marketing, and has the potential to become one of the Fund's successful long-term investments. In closing, fiscal 1999 will be a very hard act to follow. This does not diminish our enthusiasm and commitment to finding small companies with big futures. The Kern Capital Management investment team will continue to strive to generate attractive investment returns for Fremont U.S. Micro-Cap Fund shareholders and justify the confidence you've shown in our abilities. Sincerely, /s/ Robert E. Kern, Jr. Robert E. Kern, Jr. Portfolio Manager FREMONT MUTUAL FUNDS 9 - -------------------------------------------------------------------------------- FREMONT U.S. SMALL CAP FUND - -------------------------------------------------------------------------------- David G. Kern, CFA, Portfolio Manager Kern Capital Management LLC [PHOTO] David G. Kern, CFA - ------------ FUND PROFILE - ------------ U.S. small cap stocks offer tremendous opportunity to professional investors dedicated to hands on fundamental research. Through rigorous fundamental analysis, including visits with corporate managements, their suppliers, customers and competitors, Fund management strives to identify small relatively unknown companies with the potential to become larger and more successful over time. Research is concentrated in industries with the greatest level of innovation such as technology, healthcare, consumer, and services. The research process focuses on answering three basic questions: how attractive is the business; how strong is management; and how much is the company worth? Portfolio Manager David G. Kern co-founded Kern Capital Management LLC, a firm dedicated exclusively to small company stock research and portfolio management. To Our Shareholders, For the six- and twelve-month periods ended October 31, 1999, the Fremont U.S. Small Cap Fund returned 33.78% and 84.60% versus the Russell 2000 Index's - -0.25% and 14.87% returns. As reflected in the Fund's excellent absolute and relative returns, fiscal 1999 was a great year for us. We had a high stock picking batting average, a strong IPO market, and committed very few errors. We also made some timely strategic decisions. In the midst of the market chaos in August/September 1998, we concentrated the portfolio in what we viewed as the most innovative companies. This enhanced performance when the small cap market rebounded in calendar fourth quarter 1998. In early 1999, we took profits in some big winners, whose valuations began defying economic reality. For example, we scaled out of most of our software holdings, when we saw evidence that industry fundamentals were deteriorating. This allowed us to preserve substantial gains when software stocks hit the skids this summer. The combination of picking some very good stocks, avoiding mistakes, and making timely sell decisions allowed us to achieve excellent results in a challenging small-cap stock market. We remain focused on high quality small companies in the most innovative sectors of the American economy--technology, healthcare, consumer, services, and special situations (our grab bag category for innovative companies in traditionally non-innovative industries such as energy and finance). Although consumer was our strongest portfolio sector in first half fiscal 1999, we have reduced our commitment in response to changing economic trends. We think higher interest rates, higher mortgage payments, rising grocery prices, and bigger home heating bills will dent consumer confidence and temper consumer spending. We have increased our commitment to the technology sector, with a strong bias to internet oriented communications technology. The internet is still in its infancy and the demand for technologies that can enhance internet access and transmission speed is - -------------------------------------------------------------------------------- GROWTH OF $10,000 (1) [GRAPHIC OMITTED] 10/31/99 -------- FREMONT U.S. SMALL CAP FUND $16,420 RUSSELL 2000 INDEX $ 9,782 AVERAGE ANNUAL RETURNS FOR PERIODS ENDED 10/31/99 1 YEAR SINCE INCEPTION (9/24/97) - ------------------------------------ 84.60% 26.64% ANNUAL RETURNS TOP TEN HOLDINGS 9/24/97-10/31/97* -4.06% TeleTech Holdings, Inc. ......... 6.6% 11/01/97-10/31/98 -7.29% Netopia, Inc. ................... 5.5% 11/01/98-10/31/99 +84.60% Emulex Corp. .................... 5.1% Calpine Corp. ................... 4.1% ACTV, Inc. ...................... 3.9% VeriSign, Inc. .................. 3.8% Anaren Microwave, Inc. .......... 3.4% New Era of Networks, Inc. ....... 3.1% Cinar Corp. (Class B) ........... 2.8% Rare Medium Group, Inc. ......... 2.8% TOTAL ................. 41.1% *Unannualized 1Assumes initial investment of $10,000 on inception date, September 24, 1997. Performance data illustrated is historical. Past performance is not predictive of future performance. Share price and return will vary so that a gain or loss may be realized when shares are sold. All 8 8performance figures assume reinvestment of dividends. Management fees and other expenses are included in the Fund's performance; however, fees and expenses are not incorporated in the Russell 2000 Index. - -------------------------------------------------------------------------------- 10 FREMONT MUTUAL FUNDS exploding. We've identified what we believe to be some exceptional investment opportunities in this arena. We are still treading lightly in the healthcare category. Growth is slowing, there is more competition, and margins are still being squeezed. We have been under-weighted in healthcare since the Fund's inception, and will remain that way until we see some evidence of improving industry fundamentals. In past shareholder letters, we've discussed innovative companies in exciting growth industries. This time, we've chosen an exciting company in a less innovative industry --power generation. The electric utilities industry is being deregulated and consumers are now being given their choice of power generation companies. You may have already received a notice from your local electric utility advising you of this new option. The winners will be the lowest cost producers. Calpine is an independent power generator using state-of-the-art "combined cycle combustion" technology (mixing natural gas with steam) to - -------------------------------------------------------------------------------- FREMONT U.S. SMALL CAP FUND SECTOR DIVERSIFICATION AS OF 10/31/99 - -------------------------------------------------------------------------------- [GRAPHIC OMITTED] TECHNOLOGY (SOFTWARE) (20.2%) SHORT TERM SECURITIES (12.6%) OTHER (8.6%) CONSUMER SERVICES (6.5%) RETAIL (6.6%) BUSINESS EQUIPMENT & SERVICES (13.5%) TECHNOLOGY (EQUIPMENT) (12.9%) TECHNOLOGY (COMPONENTS) (12.1%) HEALTH CARE (7.0%) generate electricity. Calpine's cost for generating a megawatt of electricity is currently the lowest in the industry. Calpine's current generating capacity is about 3,300 megawatts. We are forecasting 1999 earnings per share of $1.50 at this capacity level. The company has just raised $600 million via a secondary stock and convertible preferred offering. The proceeds will be used to finance Calpine's goal of increasing generating capacity to 16,000 megawatts by the end of 2003. This will make Calpine one of the largest power generators in the U.S. We are projecting annual earnings growth of at least 30% over the next several years. Calpine stock has made a nice move since we bought it last year, but at about 28 times next year's earnings, its valuation remains attractive given the growth prospects. In conclusion, we can't promise you 80% plus returns every year. We can promise that the Kern Capital Management investment team will continue to do the things that are responsible for our success. We are a research driven organization. We don't just crunch numbers. We go out and meet with corporate decision makers, review their growth strategies and judge their ability to execute them effectively. In short, we do everything we can to identify the most innovative small companies with the best risk/reward characteristics. We are confident this discipline will continue to reward Fremont U.S. Small Cap Fund shareholders. Sincerely, /s/ David G. Kern David G. Kern Portfolio Manager FREMONT MUTUAL FUNDS 11 - -------------------------------------------------------------------------------- FREMONT GROWTH FUND - -------------------------------------------------------------------------------- W. Kent Copa, Debra McNeill, and Peter Landini Fremont Investment Advisors, Inc. [PHOTO] W. Kent Copa, CFA - ------------ FUND PROFILE - ------------ The Fremont Growth Fund invests principally in large capitalization U.S. stocks. The goal is to outperform the Standand & Poor's 500 and the average of its large-cap growth stock fund peer group. Superior earnings growth generally translates into superior stock performance. However, stocks with excellent earnings records often trade at high valuations and unanticipated earnings disappointments can result in sharp declines. In short, reward potential is accompanied by a somewhat higher level of risk. Through quantitative analysis, the portfolio management team seeks to identify stocks with superior earnings growth prospects trading at reasonable valuations. The goal is to build a diversified portfolio with favorable risk/reward characteristics. Portfolio Co-Managers Ken Copa, Debra McNeill, and Peter Landini have a combined 41 years of professional investment experience. To Our Shareholders, For the six- and twelve-month periods ended October 31, 1999, the Fremont Growth Fund returned 2.40% and 24.24% compared to the Standard & Poor's 500 Index's 2.74% and 25.66% gains. The Lipper Growth Fund Average advanced 4.62% and 29.11% over these same time periods. We are pleased the Fund once again delivered solid returns in fiscal 1999 and retained its 4 Star Morningstar ranking. We are somewhat disappointed over having modestly under-performed the S&P 500 and our peer group benchmark. Most of this shortfall came in calendar first quarter 1999, a period in which a relative handful of high flyers propelled the S&P, while most of its component stocks languished. In extremely narrow markets, the Fund's diversification strategies may restrain relative performance. In a more normalized market environment, we believe the Fund's diversification posture will work to our advantage. Importantly, the portfolio still has the fundamental characteristics we believe will lead to superior long- term relative performance. At the close of this reporting period, the portfolio had a projected 5-year average earnings growth rate of 20.6% versus the S&P 500's 17.6% and a price/trailing earnings ratio of 26.0 compared to the S&P's 30.2%. Better expected earnings growth at a cheaper price is the cornerstone of our investment discipline. Our over-weighting in the technology sector was a strong positive throughout the year. Microsoft, our largest holding, was up 76%, Oracle, EMC Corp, and Cisco Systems more than doubled, and Sun Microsystems gained more than 200% over the last twelve months. We believe technology will remain the pre-eminent growth sector in the economy and continue to present some of the best investment opportunities. Our selections in the retail sector also buoyed returns, with Best Buy, Home Depot, and Wal-Mart leading the way. Disappointments include food and beverage companies such as Smithfield Food, Suiza Food, and Coca Cola, all of which declined in fiscal 1999. Price competition put pressure on profit margins and restrained earnings growth. Our healthcare invest- - -------------------------------------------------------------------------------- GROWTH OF $10,000 (1) 10/31/99 -------- S&P 500 INDEX $ 38,005 FREMONT GROWTH FUND $ 31,538 AVERAGE ANNUAL RETURNS FOR PERIODS ENDED 10/31/99 1 YEAR 5 YEARS SINCE INCEPTION (8/14/92) - ------------------------------------------------ 24.24% 21.93% 17.27% ANNUAL RETURNS TOP TEN HOLDINGS 8/14/92-10/31/92* +2.00% Microsoft Corp. .......................... 4.4% 11/01/92-10/31/93 +12.80% General Electric Co. ..................... 4.3% 11/01/93-10/31/94 +1.72% Ford Motor Co. ........................... 2.9% 11/01/94-10/31/95 +28.12% Intel Corp. .............................. 2.7% 11/01/95-10/31/96 +22.06% Wal-Mart Stores, Inc. .................... 2.5% 11/01/96-10/31/97 +29.26% Citigroup, Inc. .......................... 2.2% 11/01/97-10/31/98 +7.30% Cisco Systems, Inc. ...................... 2.2% 11/01/98-10/31/99 +24.24% Federal National Mortgage Association .... 2.0% MCI WorldCom, Inc. ....................... 2.0% Keyspan Corp. ............................ 1.9% TOTAL .......................... 27.1% *Unannualized 1Assumes initial investment of $10,000 on inception date, August 14, 1992. Performance data illustrated is historical. Past performance is not predictive of future performance. Share price and return will vary so that a gain or loss may be realized when shares are sold. All 8 8performance figures assume reinvestment of dividends. Management fees and other expenses are included in the Fund's performance; however, fees and expenses are not incorporated in the S&P 500 Index. - -------------------------------------------------------------------------------- 12 FREMONT MUTUAL FUNDS ments also disappointed, most notably McKesson HBOC, which was down sharply due to accounting irregularities and falling earnings. Finally, our over-weighting in financial stocks was a slight drag on relative performance. This group performed well early in fiscal 1999, declined as interest rates trended higher through the summer, and closed the fiscal year strong as the repeal of the Glass- Steagall Act opened the door for further consolidation in the financial services industry. Since we remain over-weighted in technology, we have chosen to detail one of our tech holdings as an example of our investment philosophy at work. Some companies succeed purely on the basis of the quality of their products. Others make it to the top of the class through outstanding service to their clients. EMC Corp., the industry leader in the data storage and networking business, excels at both. How good are EMC's systems? Despite premium pricing, they have garnered more than 30% of the market. Clearly, EMC's customers believe they are getting their money's worth and more. EMC protects its dominant position in the market by smoth- - -------------------------------------------------------------------------------- FREMONT GROWTH FUND SECTOR DIVERSIFICATION AS OF 10/31/99 - -------------------------------------------------------------------------------- [GRAPHIC OMITTED] TECHNOLOGY (24.3%) SHORT-TERM SECURITIES (2.1%) OTHER (16.6%) CONSUMER NON-DURABLES (4.8%) ENERGY (7.3%) RETAIL (8.5%) FINANCIAL SERVICES (17.0%) HEALTH CARE (10.0%) UTILITIES (9.4%) ering its customers with service--a critical element for any company selling complex technologies. Not only is EMC the best company in its industry, but the industry itself is growing like a weed. As the Information Age accelerates, companies are generating more and more data, which must be stored and made readily accessible to users. Driven in part by the internet--almost every large company is building a www. presence--the demand for data storage and networking systems is exploding. Demand, as measured by potential revenue gains for EMC, is expected to grow by 40% over the next three years. We believe this will translate into annual earnings growth exceeding 30% for EMC. EMC stock performed quite well in fiscal 1999, but has been restrained somewhat by concern that its recent acquisition of Data General may result in an earnings "hiccup". We believe any earnings dislocation resulting from the acquisition will be shortlived and that the purchase of Data General will help EMC expand its already formidable position in its industry. World class competitors in fast growth industries don't come cheap and EMC has a well above market average price/earnings ratio. However, relative to its earnings growth prospects and to the P/Es of other leading companies in other exciting technology sectors, EMC's valuation appears quite reasonable. In closing, fiscal 1999 was another good year for the Fremont Growth Fund. We achieved our primary goal of delivering strong returns to shareholders. Due to an unusually narrow market half way through this year's race, the S&P 500 broke the tape a small step ahead of us. However, we look forward to competing again next year and believe we can come out on top in fiscal 2000. Sincerely, /s/ Kent Copa /s/ Debra McNeill /s/ Peter Landini Kent Copa, Debra McNeill, & Peter Landini Portfolio Co-Managers FREMONT MUTUAL FUNDS 13 - -------------------------------------------------------------------------------- FREMONT REAL ESTATE SECURITIES FUND - -------------------------------------------------------------------------------- John Kramer & Paul Gray Portfolio Co-Managers Kensington Investment Group [PHOTO] John Kramer - ------------ FUND PROFILE - ------------ The commercial real estate industry is in the early stages of a major transformation. Privately held real estate empires are being replaced by financially strong, well managed, publicly traded companies, that buy, sell and manage commercial property throughout the U.S. In the process, stock market investors are being given an unprecedented opportunity to participate in an industry that has generated enormous wealth. Portfolio Co-Managers John Kramer and Paul Gray monitor macro-economic trends, supply/demand dynamics and industry fundamentals in allocating assets to real estate securities (primarily Real Estate Investment Trusts or REITs) in different commercial sectors including office, apartment, retail, hotel and industrial. Individual securities selection is based on the analysis of the company's acquisition, development and operating records; earnings and dividend growth potential; and valuation relative to other publicly traded real estate companies. To Our Shareholders, For the twelve-month period ended October 31, 1999, the Fremont Real Estate Fund declined 0.07%, compared to the National Association of Real Estate Investment Trusts (NAREIT) Composite Index's 8.41% loss. While we are disappointed the Fund did not provide a positive return in what has been a very difficult market for real estate securities, we are pleased to have finished in the top 5% of the domestic REIT funds tracked by Bloomberg Data Services. I commend our research team for finding ways to generate positive returns in a sector which is down over 8% over the last twelve months. Additionally, for the six-month period ended October 31, 1999, the Fund declined 5.48% compared to NAREIT's 10.92% loss. In 1999, rising interest rates put pressure on stocks in all sectors, including REITs. Despite good earnings growth and sound industry fundamentals, REITs re-tested 1998 lows. High dividend yields and the fact that 90% of all REITs met or exceeded analysts earnings' expectations was not sufficient to buoy the group. REITs are now trading at prices well below where they were when news of Warren Buffett's substantial REIT investments became public in April of this year. Why have REITs retreated despite attractive yields, good earnings growth and favorable industry fundamentals? Our best guess is that many investors still view real estate as a highly cyclical "boom and bust" business. We challenge this perception. The discipline imposed by the public capital markets on the commercial real estate industry has curtailed the speculative excesses of the past. While different cities and types of properties have experienced varied rates of growth, the overall picture is one of a healthy supply and demand balance. Occupancy rates for most property types are near 90%. U.S. economic growth continues to fuel increased demand for space. Construction of new properties is generally in line with projected demand growth. This "equilibrium" market points toward steadily increasing rental revenues, good earnings and secure dividends. Presently, REIT dividends are quite high, averaging close to 9%. Cash flow is even higher, because REITs only pay out about 70 cents of every - -------------------------------------------------------------------------------- GROWTH OF $10,000 (1) 10/31/99 -------- FREMONT REAL ESTATE SECURITIES FUND $8,117 NAREIT ALL INDEX $7,529 AVERAGE ANNUAL RETURNS FOR PERIODS ENDED 10/31/99 1 YEAR SINCE INCEPTION (12/31/97) - ------------------------------------- - -0.07% -10.76% ANNUAL RETURNS TOP TEN HOLDINGS 12/31/97-10/31/98* -18.78% Koger Equity, Inc. ....................... 6.1% 11/01/98-10/31/99 -0.07% Banyan Strategic Realty Trust ............ 5.5% First Union Real Estate Investments ...... 5.4% Burnham Pacific Properties, Inc. ......... 5.1% Malan Realty Investor, Inc. .............. 4.3% Walden Residential Properties, Inc. ...... 4.3% American Industrial Properties REIT ...... 4.0% Wellsford Real Properties, Inc. .......... 3.9% Sunstone Hotel Investors, Inc. ........... 3.5% Mack-Cali Realty Corp. ................... 3.5% TOTAL .......................... 45.6% *Unannualized 1Assumes initial investment of $10,000 on inception date, December 31, 1997. Performance data illustrated is historical. Past performance is not predictive of future performance. Share price and return will vary so that a gain or loss may be realized when shares are sold. 8 8All performance figures assume reinvestment of dividends. Management fees and other expenses are included in the Fund's performance; however, fees and expenses are not incorporated in the National Association of Real Estate Investments Trusts(R) (NAREIT) ALL Index. - -------------------------------------------------------------------------------- 14 FREMONT MUTUAL FUNDS $1 of Funds from Operations as dividends. The remainder is retained in the business. This is the highest ratio of cash being retained in ten years. Barring a very dramatic slowdown in the U.S. economy, cash flow should remain quite strong. Low valuations and negative sentiment in a sound industry is like the ringing of a dinner bell for value-driven investors such as ourselves. Today's REIT market is truly appetizing. As mentioned earlier, dividend yields are close to 9%. REIT price/earnings multiples (8.2x) are a third of the S&P 500's P/E (25.5x). Meanwhile, projected earnings growth rates for REITs, while slowing somewhat, remain around 9%, only modestly lower than the S&P 500's 11%. Earnings growth should continue to support solid dividend growth. In addition, REITs are trad ing at about a 15% discount to the prices at which they could sell their underlying properties. The last two times we saw this kind of discount to break-up value (1992 and 1994), REITs produced returns approximating 18% in the succeeding years. While REITs may remain weak over the short term, the longer term return - -------------------------------------------------------------------------------- FREMONT REAL ESTATE SECURITIES FUND SECTOR DIVERSIFICATION AS OF 10/31/99 - -------------------------------------------------------------------------------- [GRAPHIC OMITTED] SHORT-TERM SECURITIES (9.8%) OTHER (20.9%) REIT (HOTELS) (6.0%) REIT (OFFICE) (30.7%) REIT (COMMUNITY CENTERS) (15.3%) REIT (DIVERSIFIED) (10.9%) REIT (APARTMENTS) (6.4%) potential from here seems compelling. One needs only to look at the NAREIT Index's 10.5% gain in calendar second quarter 1999 to see the kind of upside potential available from these price levels when sentiment turns positive. The challenge is staying invested in what we view as terrific bargains, knowing the sector may drift lower before the portfolio's substantial upside potential is realized. Anecdotal evidence is building that the REIT market is in the process of forming a bottom. Selling pressure is abating. The price decline in calendar third quarter 1999 came on significantly lower trading volumes than prior declines. "Smart money" is also lining up on the buy side. In addition to Warren Buffett's announcement that he had taken sizable stakes in several REITs earlier this year, management led buy-outs and merger activity continues to pick up. Let us give you an example. Earlier this year we began accumulating Walden Residential Properties, Inc, a Southeast and Southwest regional apartment REIT, at prices in the high teens. Walden's fundamentals were solid, it was yielding around 10%, and we believed it was trading at a material discount to its break-up value. Privately held Olympus Real Estate also thought it was a bargain and has agreed to buy Walden at $23.25 per share in a deal that should close in December or January. While we don't expect all our portfolio holdings to be bought out, we do favor fundamentally cheap companies that could prove to be attractive takeover or leveraged buyout candidates. The 20% premium to market Olympus paid for Walden provides an illustration of the upside potential of portfolio holdings that may attract opportunistic business buyers. In closing, we urge patience. We have done a good job preserving shareholder assets in what has been a particularly difficult period for real estate securities. We believe our rigorous research and disciplined stock selection will be equally effective when the market turns in our favor. Sincerely, /s/ John Kramer /s/ Paul Gray John Kramer and Paul Gray Portfolio Co-Managers FREMONT MUTUAL FUNDS 15 - -------------------------------------------------------------------------------- FREMONT BOND FUND - -------------------------------------------------------------------------------- Bill Gross Portfolio Manager Founder & Managing Director Pacific Investment Management Company (PIMCO) [PHOTO] Bill Gross - ------------ FUND PROFILE - ------------ The Fremont Bond Fund invests in high quality corporate, mortgage-backed, hedged international, and government bonds. The Fund's goal is to consistently provide attractive risk-adjusted returns relative to the broad fixed-income market. The Fund's investment philosophy embodies three key principles: First, portfolio strategy is driven by longer-term trends in interest rates. Three-to five-year economic, demographic, and political forecasts are updated annually to identify the long-term interest rate trend. Second, consistent performance is achieved by avoiding extreme swings in portfolio maturity/duration. Finally, emphasis is placed on adding value through the analysis of traditional variables such as sector, coupon, and quality. Portfolio Manager Bill Gross, founder and managing director of Pacific Investment Management Company (PIMCO), has 28 years of professional fixed income investment experience. In addition to serving as the sub-advisor to the Fremont Bond Fund, PIMCO manages over $180 billion in fixed income investments for institutional clients. To Our Shareholders, For the year ended October 31, 1999, the Fremont Bond Fund posted modest gains. The Fund returned 0.01% versus 0.52% for the Lehman Brothers Aggregate Index. The relatively flat performance was primarily the result of a difficult bond market environment. The return on a bond consists of price changes (which move inversely with interest rates) and coupon income. The income serves as a cushion in a declining price environment. Over the past 12 months, adverse price changes eroded nearly all of the coupon income as interest rates rose by approximately 1.4%. In the U.S., despite the decline in bond prices, we had several sector strategies in place which had a positive impact overall. Throughout the year, we maintained an emphasis on the mortgage sector. Although higher rates negatively affected mortgage prices, higher coupons on these securities more than offset declining prices and the allocation had a positive impact on performance. Corporate bonds, however, were flat as concerns regarding credit counteracted higher coupons, and our modest exposure to this sector added little to returns. Outside of the U.S., both developed and emerging markets turned in strong performance. Although we had limited exposure to these sectors, the bonds we did own outperformed Treasury securities and enhanced returns. Looking forward, we expect the current U.S. economic expansion to continue, albeit at a slower rate than in the first half of 1999. Higher mortgage rates will slow consumption by reducing refinancing activity, giving consumers less opportunity to lower mortgage payments and boost cash flow. Corporate profits will be squeezed by higher borrowing costs and wage pressures stemming from tight labor markets. These factors, along with relatively low capacity utilization, will curb growth in investment spending. Faster growth in Europe and recovery in Asia will boost U.S. exports, partially offsetting the impact of slower consumer and investment spending. - -------------------------------------------------------------------------------- GROWTH OF $10,000 (1) 10/31/99 -------- FREMONT BOND FUND $15,305 LEHMAN BROS. AGGREGATE BOND INDEX $14,816 AVERAGE ANNUAL RETURNS FOR PERIODS ENDED 10/31/99 1 YEAR 5 YEARS SINCE INCEPTION (4/30/93) - ------------------------------------------------ 0.01% 8.78% 6.76% ANNUAL RETURNS TOP TEN HOLDINGS 4/30/93-10/31/93* +5.15% FNMA CMO, 7.200%, 05/25/23 ............ 8.1% 11/01/93-10/31/94 -4.42% 30-yr U.S.Treasury Bond Futures, 11/01/94-10/31/95 +16.49% 69 Contracts, Exp. Dec. `99 ......... 8.0% 11/01/95-10/31/96 +8.18% GNMA CMO, 6.500%, 06/20/28 ............. 7.1% 11/01/96-10/31/97 +9.54% 30-yr U.S. Treasury Bond Futures, 11/01/97-10/31/98 +10.31% 50 Contracts, Exp. Mar. `00 ......... 6.4% 11/01/98-10/31/99 +0.01% RFMSI CMO, 7.000%, 11/25/27 ............ 5.2% General Motors Acceptance Corp., 5.750%, 11/10/2003 .................. 4.5% FHLMC CMO, 6.500%, 09/25/18 ............ 4.3% 90-day Euro Dollar Futures, 128 Contracts, Exp. Sept. `00 ....... 3.6% 90-day Euro Dollar Futures, 128 Contracts, Exp. Dec. `00 ........ 3.6% Republic of Phillipines, 9.500%, 10/21/24 .................... 2.9% TOTAL ........................ 53.7% *Unannualized 1Assumes initial investment of $10,000 on inception date, April 30, 1993. Performance data illustrated is historical. Past performance is not predictive of future performance. Share price and return will vary so that a gain or loss may be realized when shares are sold. All 8 8performance figures assume reinvestment of dividends. Management fees and other expenses are included in the Fund's performance; however, fees and expenses are not incorporated in the Lehman Bros. Aggregate Bond Index. - -------------------------------------------------------------------------------- 16 FREMONT MUTUAL FUNDS While we expect inflation to remain benign over the long term, the inflation rate will trend upward over the next several months after a sharp decline last year. Productivity gains that have contained wage inflation during this expansion will not be sustainable as growth moderates late in the business cycle. Global economic recovery will continue to put upward pressure on commodity prices, reversing the strong deflationary trend we saw last year. Oil prices have doubled this year, and the effect of this increase will continue to filter through the economy over the next several months. In an environment of sustainable, moderate growth and contained inflation, we expect interest rates to remain near current levels. Enhancing yield will be critical for generating superior portfolio returns as interest rates remain range-bound. Managing credit risk will also be important, given high levels of individual and corporate indebtedness and prospects for slower growth. Mortgages are one source of incremental yield that presents virtually no credit risk. - -------------------------------------------------------------------------------- FREMONT BOND FUND PORTFOLIO CREDIT QUALITY AS OF 10/31/99 - -------------------------------------------------------------------------------- [GRAPHIC OMITTED] AAA (54.0%) AA (4.7%) A (17.5%) BBB (11.1%) BB (12.7%) Corporate, high yield and emerging market bonds offer attractive yield premiums but would suffer adverse price performance should credit quality deteriorate further. Investments in these sectors therefore need to be made selectively. Developed non-U.S. markets provide limited opportunity for yield enhancement given generally higher U.S. real yields. Sincerely, /s/ William H. Gross Bill Gross Portfolio Manager Fremont Bond Fund FREMONT MUTUAL FUNDS 17 - -------------------------------------------------------------------------------- FREMONT MONEY MARKET FUND - -------------------------------------------------------------------------------- Norman Gee Portfolio Manager Fremont Investment Advisors, Inc. [PHOTO] Norman Gee - ------------ FUND PROFILE - ------------ Fremont Money Market Fund invests primarily in high-quality short-term debt securities (commercial paper) issued by U.S. corporations and U.S. subsidiaries of foreign corporations. The Fund will also take small positions in other investment-grade short-term debt instruments such as Yankee CDs (dollar denominated certificates of deposit in foreign banks). Portfolio Manager Norman Gee strives to add value through price-sensitive trading and by identifying undervalued high quality money market securities. He will also make conservative adjustments to the portfolio's average maturity relative to the market in attempting to enhance total portfolio yield. To Our Shareholders, For the six- and twelve-month periods ended October 31, 1999, the Fremont Money Market Fund returned 2.43% and 4.89% compared to the IBC Money Market First Tier Taxable Average's 2.19% and 4.43%. We are pleased to report the Fremont Money Market Fund once again finished in the top quartile of comparable funds in the IBC money market fund universe. In Fremont's Semi-Annual Report published in May, 1999, I suggested that the Federal Reserve would not endanger what appeared to be a fragile recovery in Asia by hiking rates in the next six months. Asia regained its economic footing much more quickly than I anticipated, and with the U.S. economy continuing to barrel along, Mr. Greenspan pulled the trigger much sooner than I had expected. Although at around 70 days, the Fund had a modestly higher average maturity than its peer group, it continued to perform well despite two 25 basis point Fed rate hikes. Because the portfolio was "barbelled" (heavy weightings on the short and long end of the maturity spectrum), we had plenty of short-term investments that we were able to roll over into higher yielding securities as interest rates increased. Looking ahead, I believe the Fed will continue to tighten in response to growing evidence of inflationary pressures on the economy. Ironically, five years ago, investors couldn't quite accept the fact that inflation had gone away. Today, they are reluctant to believe it is coming back. Even if it isn't yet reflected in the reported numbers, we see plenty of anecdotal evidence that wages will be rising. Help wanted signs appear to be a permanent fixture in every shop window here in the Bay Area and unions have been getting most of what they have asked for in recent labor settlements. The prices of industrial commodities are moving higher--the natural result of the recovery in Asia, some momentum in Europe, and our own still robust economy. The Consumer Price - -------------------------------------------------------------------------------- GROWTH OF $10,000 (1) [GRAPHIC OMITTED] 10/31/99 -------- FREMONT MONEY MARKET FUND $17,877 90-DAY U.S. T-BILLS $17,876 IBC FIRST TIER TAXABLE PRIME AVERAGE $17,096 AVERAGE ANNUAL RETURNS FOR PERIODS ENDED 10/31/99 1 YEAR 5 YEARS 10 YEARS SINCE INCEPTION (11/18/88) - -------------------------------------------------------------- 4.89% 5.38% 5.12% 5.45% ANNUAL RETURNS TOP TEN HOLDINGS 11/18/88-10/31/89* +8.52% New York Times Co. .................... 1.4% 11/01/89-10/31/90 +7.99% Akzo Nobel, Inc. ...................... 1.3% 11/01/90-10/31/91 +6.51% Federal Farm Credit Corp. ............. 1.3% 11/01/91-10/31/92 +3.73% Federal Home Loan Bank ................ 1.3% 11/01/92-10/31/93 +2.66% Deutsche Bank NY ...................... 1.3% 11/01/93-10/31/94 +3.49% MetLife Funding, Inc. ................. 1.3% 11/01/94-10/31/95 +5.84% Deutsche Bank NY ...................... 1.3% 11/01/95-10/31/96 +5.34% Panasonic Finance Corp. ............... 1.3% 11/01/96-10/31/97 +5.39% PACCAR Financial Corp. ................ 1.3% 11/01/97-10/31/98 +5.45% General Motors Acceptance Corp. ....... 1.3% 11/01/98-10/31/99 +4.89% TOTAL ....................... 13.1% *Unannualized 1Assumes initial investment of $10,000 on inception date, November 18, 1988. Performance data illustrated is historical. Past performance is not predictive of future performance. All performance figures assume reinvestment of dividends. Management fees and other expenses are included in the Fund's performance; however, fees and expenses are not incorporated in the 8 8U.S. 90-Day T-Bill Index. An investment in Fremont Money Market Fund is neither insured nor guaranteed by the FDIC or any other government agency. Although the Fund seeks to preserve the net asset value at $1.00 per share, it is possible to lose money by investing in the Fund. - -------------------------------------------------------------------------------- 18 FREMONT MUTUAL FUNDS Index (CPI) has been trending higher. Some economists are downplaying the rise, suggesting we ignore the food and energy component of the CPI. Considering we all have to eat and buy gas for the car, I don't see the logic in this argument. Also, despite recent years' sharp rise in new home building, inventories of new homes are at 20 year lows. Demand may drop somewhat with higher mortgage rates, but people still need a roof over their heads, so housing prices should continue to trend higher. I'm not trying to be an alarmist on inflation. We are not headed back to the dark days of the 1970's. However, I do believe we will see an inflation rate in the 3%-3.25% range by second half 2000. The forward looking Federal Reserve appears to agree with me. I think the Fed will continue to tighten interest rates, perhaps waiting until Y2K issues are resolved early next year before pumping the brakes again. Currently, there are two interesting phenomena in the money markets, both related to Y2K jitters. First, very - -------------------------------------------------------------------------------- FREMONT MONEY MARKET FUND GEOGRAPHIC DIVERSIFICATION AS OF 10/31/99 - -------------------------------------------------------------------------------- [GRAPHIC OMITTED] OTHER (2%) NEW ZEALAND (3%) NETHERLANDS (3%) LUXEMBOURG (3%) JAPAN (3%) SWITZERLAND (5%) FRANCE (7%) UNITED STATES (46%) GERMANY (14%) UNITED KINGDOM (14%) few corporations are issuing paper maturing in the last two weeks of December and the first two weeks of January. Although we will probably see more inventory as we approach the new millennium, right now the shelves are relatively bare. Secondly, and herein lies an opportunity we are taking advantage of, commercial paper maturing in late January, 2000 and beyond yields 50 basis points more than paper coming due in December, 1999. Corporations are paying a very nice premium to lock up cash through the perceived Y2K danger period. Once we get past the transition without the world ending, I think yields will come down. Rather than loading up on paper due in late January, we have been buying paper maturing in March to lock in these higher yields for a longer period. In closing, with the Federal Reserve responding aggressively to inflationary pressures, the money markets have been a little more lively in second half fiscal 1999. We believe money market yields will continue to trend higher in the year ahead as the Fed tries to slow the economy. We will continue to focus on strategies that will enhance the Fund's yield and keep it near the top of its class. Sincerely, /s/ Norman Gee Norman Gee Portfolio Manager FREMONT MUTUAL FUNDS 19 - -------------------------------------------------------------------------------- FREMONT CALIFORNIA INTERMEDIATE TAX-FREE FUND - -------------------------------------------------------------------------------- Arno A. Rayner & William C. Williams Portfolio Co-Managers Rayner Associates, Inc. [PHOTO] Arno A. Rayner - ------------ FUND PROFILE - ------------ Portfolio Co-Managers Arno Rayner and William Williams believe active duration management, opportunistic sector allocation, and individual security selection can enhance municipal bond portfolio returns. Credit quality is always first priority. The Fund holds only investment grade rated securities and selective non-rated bonds, which after internal credit analysis are believed to deserve an investment grade rating. Founded in 1976, sub-advisor Rayner Associates, Inc. manages over $135 million in fixed income assets for private and public clients. To Our Shareholders, In the six- and twelve-month periods ended October 31, 1999, the Fremont California Intermediate Tax Free Fund declined 2.01% and 0.68% compared to the Lehman Brothers Municipal 5-Year State General Obligation (GO) Index's -0.80% and 1.10% returns. With the Federal Reserve taking back most of what it had given during last Fall's global liquidity crisis and inflationary fears sending market interest rates higher, all sectors of the fixed income market struggled in fiscal 1999. However, due to the very favorable supply/demand characteristics of the California municipal securities market, our portfolio held up quite well, posting only a modest decline. Of course, as bond prices have fallen, yields have increased. This is presenting strategic opportunities to enhance income to shareholders. The California economy will likely slow in 2000, with Gross State Product growing at approximately 3.5% versus 1999's projected 6% and 1998's 5.8%. However, this is still an attractive rate of economic expansion, and may continue to exceed national Gross Domestic Product growth in the year ahead. The year 2000 will be the seventh straight year up year for the California economy, which at approximately $1.1 trillion, is now the 8th largest in the world. All of the state's leading industries remain quite healthy. The technology sector is robust, housing starts and infrastructure construction remain strong, agriculture is doing well, and tourism is thriving. As Asia continues to recover, international trade, which is responsible for 1.5 million jobs and represents approximately 25% of the California economy, will also regain momentum. Unemployment is at a modest 5.6%, and while new job growth may decline somewhat in the year ahead, we don't see unemployment rising. California state tax surplus are projected to come in around $4 billion this year and we expect to see another state budget surplus. We have no idea what will happen to it, but no one in Sacramento seems to be talking about lowering state income taxes. - -------------------------------------------------------------------------------- GROWTH OF $10,000 (1) [GRAPHIC OMITTED] 10/31/99 -------- LEHMAN MUNI 5-YEAR STATE G.O. INDEX $16,841 FREMONT CALIFORNIA INTERMEDIATE TAX-FREE FUND $16,838 AVERAGE ANNUAL RETURNS FOR PERIODS ENDED 10/31/99 1 YEAR 5 YEARS SINCE INCEPTION (11/16/90) - ------------------------------------------------- - -0.68% 6.04% 5.99% ANNUAL RETURNS TOP TEN HOLDINGS 11/01/90-10/31/91* +9.36% Sacramento Municipal Utilities District .. 3.0% 11/01/91-10/31/92 +7.37% Yucaipa School Facilities 11/01/92-10/31/93 +11.37% Finance Authority ..................... 2.5% 11/01/93-10/31/94 -3.94% City of L.A., Wastewater System .......... 2.3% 11/01/94-10/31/95 +12.77% East Bay Municipal Utility District ...... 2.3% 11/01/95-10/31/96 +4.63% City of Industry, 11/01/96-10/31/97 +6.75% Urban Development Agency .............. 1.9% 11/01/97-10/31/98 +7.16% Fremont Calif. Unified School District 11/01/98-10/31/99 -0.68% (Alameda) ............................. 1.8% Orange County Transportation Authority .............. 1.7% Santa Monica-Malibu Unified School District ....................... 1.7% San Francisco Calif. City and County ..... 1.7% Modesto Calif. Irrigation District ....... 1.7% TOTAL .......................... 20.6% *Unannualized 1Assumes initial investment of $10,000 on inception date, November 16, 1990. Performance data illustrated is historical. Past performance is not predictive of future performance. Share price and return will vary so that a gain or loss may be realized when shares are sold. 8 8 All performance figures assume reinvestment of dividends. Management fees and other expenses are included in the Fund's performance; however, fees and expenses are not incorporated in the Lehman Bros. 5-Year State G.O. Index. - -------------------------------------------------------------------------------- 20 FREMONT MUTUAL FUNDS So, California municipal securities should still provide excellent after-tax return advantages to state residents in higher tax brackets. We will likely see a modest uptick in inflation. We are forecasting the California Consumer Price Index to come in around 2.6% versus 2.4% for 1999. We expect this to be below national inflation rates. So, California municipal bond investors will likely also enjoy higher "real rates of return" (the spread between bond yields and inflation). Currently we favor AAA rated insured revenue bonds, which make up about 60% of the portfolio. At the close of this reporting period, approximately 82% of our holdings are rated AA or better and the portfolio is rated AA by both Moody's and Standard & Poors. As bond prices have come down, we have been pursuing a strategy designed to enhance income. We are selling lower yielding bonds and using the proceeds to buy higher coupon securities. For example, we recently "swapped" $1 million (par value) of Irvine Improvement District 4.20%'s - -------------------------------------------------------------------------------- FREMONT CALIFORNIA INTERMEDIATE TAX-FREE FUND PORTFOLIO CREDIT QUALITY AS OF 10/31/99 - -------------------------------------------------------------------------------- [GRAPHIC OMITTED] NOT RATED (1.6%) A (16.3%) AA (22.5%) AAA (59.6%) of 9/2/05 for $1 million (par value) of Los Angeles Metropolitan Transit District 5.0%'s of 7/1/15. In the process, we picked up 80 basis points (0.8%) in coupon rate and 85 basis points (0.85%) in yield. This swap generated a capital gain, which we will offset by taking a loss in one of our older portfolio holdings, with the proceeds once again going to a higher coupon alternative. This strategy is increasing the average maturity of the portfolio, but at about 8.9 years, it is still below the Fund's 10 year maximum. The portfolio's average duration (a standard measure of interest rate risk) is at a relatively conservative 6.5 years. At the close of this reporting period, the portfolio had an average coupon rate of 5.4% and an average yield to maturity of 5.3%. This compares to 5.3% and 4.2% at the close of fiscal 1998. In closing, it has been a difficult 12 months for fixed income investors. Bond prices have declined across the board. However, the great beauty of bonds is that what the market takes away in the form of lower prices, it gives back in the form of higher yields. We have been repositioning the portfolio to exploit higher yielding opportunities and to enhance income to shareholders. We are not bond market forecasters. We won't pretend to know where the market is headed over the short term. We will, however, attempt to take maximum advantage of whatever the market is offering. Over the longer term, we are confident this will produce attractive returns. Sincerely, /s/ Arno A. Rayner /s/ William Williams Arno A. Rayner and William Williams Portfolio Co-Managers FREMONT MUTUAL FUNDS 21 - -------------------------------------------------------------------------------- REPORT OF INDEPENDENT ACCOUNTANTS - -------------------------------------------------------------------------------- TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF FREMONT MUTUAL FUNDS, INC. In our opinion, the accompanying statements of assets and liabilities, including the statements of investments in securities and net assets, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of each of the funds constituting Fremont Mutual Funds, Inc., (hereafter referred to as the "Funds") at October 31, 1999, and the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the periods presented, in conformity with generally accepted accounting principles. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Funds' management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with generally accepted auditing standards, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 1999 by correspondence with the custodian and brokers, provide a reasonable basis for the opinion expressed above. PricewaterhouseCoopers LLP San Francisco, California December 9, 1999 22 FREMONT MUTUAL FUNDS FREMONT GLOBAL FUND OCTOBER 31, 1999 STATEMENT OF INVESTMENTS IN SECURITIES AND NET ASSETS Country Value Shares Security Description Code (Note 1) - -------------------------------------------------------------------------------- STOCKS 55.8% BUSINESS EQUIPMENT & SERVICES 3.3% 50 Flughafen Wien AG AS $ 1,730 170,100 Laidlaw, Inc. CN 1,052,070 6,597 Moore Corp. Ltd. CN 57,168 2,526 Nova Chemical Corp. CN 49,700 125 Danisco AS DK 5,212 * 65 ISS International Service System AS (Class B) DK 3,494 150 Metra Oyj (Class B) FI 2,847 940 Sonera Group Oyj FI 28,294 115 Tieto Corp. FI 4,001 2,800 Havas Advertising SA FR 786,719 1,000 SAP AG GM 363,734 700 SAP AG (Preferred) GM 302,732 200 Csk Corp. JP 9,214 85,000 Fujitsu Ltd. JP 2,561,666 1,000 Kinden Corp. JP 9,214 1,000 Mitsubishi Logistics Corp. JP 10,673 2,137 Getronics NV NL 106,794 100 Oce NV NL 1,661 606 TNT Post Group NV NL 15,462 120 Vedior NV NL 2,024 225 Merkantildata ASA NO 1,911 933 INAPA-Investimentos Participacoes e Gestao SA PT 8,145 5,671 Jeronimo Martins, SGPS SA PT 158,681 85 Sonae Investimentos SGPS SA PT 2,846 600,000 Informatics Holdings Ltd. SG 292,507 5,522 Autopistas Concesionaria Espanola SA SP 59,674 200 Prosegur, CIA de Seguridad SA SP 1,645 3,027 Sociedad General de Aguas de Barcelona SA SP 48,445 * 225 NetCom Systems AB (Class B) SW 9,361 160 WM-Data AB SW 6,735 * 8 Societe Generale de Surveillance Holdings SA (Bearer Shares) SZ 8,727 * 20 Societe Generale de Surveillance Holdings SA (Registered Shares) SZ 5,454 48,800 Invensys PLC UK 240,222 125,253 Misys PLC UK 1,048,886 46,100 Rentokil Initial PLC UK 153,813 * 7,000 24/7 Media, Inc. US 302,313 * 16,000 America Online, Inc. US 2,075,000 * 4,500 AMFM Inc. US 315,000 * 16,200 Arguss Holdings, Inc. US 238,950 * 38,400 Boston Communications Group, Inc. US 194,400 * 19,000 Ceridian Corp. US 416,813 4,000 Cintas Corp. US 241,000 * 11,200 Computer Outsourcing Services, Inc. US 114,800 * 9,500 Computer Sciences Corp. US 652,531 * 8,100 Corporate Executive Board Co. US 305,775 * 11,500 Dendrite International, Inc. US 360,813 * 1,000 Digital Lava, Inc. US 3,000 9,000 Equifax, Inc. US 243,000 * 5,000 Exodus Communications, Inc. US 430,000 * 14,000 Fiserv, Inc. US 448,000 33,000 GATX Corp. US 1,095,188 * 10,200 internet.com LLC US 204,000 11,000 Interpublic Group of Cos., Inc. US 446,875 15,000 National Data Corp. US 360,000 * 9,000 Net Perceptions, Inc. US 144,000 * 34,400 NewsEdge Corp. US 374,100 * 8,000 Nova Corp. US 208,000 12,850 Paychex, Inc. US 505,969 Country Value Shares Security Description Code (Note 1) - -------------------------------------------------------------------------------- BUSINESS EQUIPMENT & SERVICES (CONT.) 5,000 PE Corp.-PE Biosystems Group US $ 324,375 * 14,500 Pinnacle Holdings, Inc. US 348,000 * 76,600 Rare Medium Group, Inc. US 1,129,850 * 11,000 Robert Half International, Inc. US 297,688 * 7,100 RoweCom, Inc. US 188,594 * 23,500 Shuffle Master, Inc. US 208,563 * 12,000 SunGard Data Systems, Inc. US 293,250 * 157,400 TeleTech Holdings, Inc. US 2,233,113 * 12,000 Unisys Corp. US 291,000 * 13,400 Winfield Capital Corp. US 237,013 * 3,500 Zomax, Inc. US 97,563 ------------ 22,749,997 ------------ CAPITAL GOODS 2.2% 30 VA Technologie AG AS 2,011 120 Wienerberger Baust NPV AS 2,767 5 Bekaert NV BE 2,699 130 FLS Industries AS (Class B) DK 3,503 30 NKT Holding AS DK 1,936 20 Kone Corp. (Class B) FI 2,920 350 Rautaruukki OY FI 2,251 * 200 Valmet-Rauma Oyj FI 2,267 1,815 Heidelberger Zement AG GM 138,254 2,500 Linde AG GM 130,206 3,000 MAN AG GM 99,790 9,300 Siemens AG GM 833,424 2,000 Johnson Electric Holdings Ltd. HK 10,812 30,071 CRH PLC IR 569,084 8,250 DCC PLC IR 60,886 360 Italcementi SPA IT 4,558 1,000 Amada Co. Ltd. JP 7,678 3,000 Asahi Glass Co. Ltd. JP 23,870 20,000 Bridgestone Corp. JP 550,917 1,000 Daikin Industries Ltd. JP 11,038 1,000 Daiwa House Industry JP 9,156 200 Hirose Electronics JP 34,917 8,000 Hitachi Ltd. JP 86,534 2,000 Kajima Corp. JP 7,045 4,000 Kawasaki Heavy Industries Ltd. JP 5,490 2,000 Komatsu Ltd. JP 11,633 1,000 Koyo Seiko Co. Ltd. JP 10,692 3,000 Kubota Corp. JP 11,949 15,000 Mabuchi Motors Co. JP 2,217,103 1,000 Minebea Co. Ltd. JP 13,485 7,000 Mitsubishi Electric Corp. JP 38,766 8,000 Mitsubishi Heavy Industries JP 31,404 25,000 Murata Manufacturing Co. Ltd. JP 3,215,280 1,000 Nishimatsu Construction Co. Ltd. JP 5,269 2,000 Obayashi Corp. JP 11,997 2,000 Sekisui House Ltd. JP 21,672 2,000 Shimizu Corp. JP 7,179 200 SMC Corp. JP 33,765 2,000 Taiheiyo Cement Corp. JP 4,377 2,000 The Furukawa Electric Co. Ltd JP 14,589 870,000 IJM Corp. Berhad MY 650,211 * 130 Kvaerner ASA NO 2,457 90 Tomra Systems ASA NO 3,448 600 Fisher & Paykel Industries Ltd. NZ 1,826 1,600 Fletcher Challenge Building NZ 1,980 2,000 Keppel Corp. SG 5,441 4,000 Sembcorp Industries Ltd. SG 5,056 The accompanying notes are an integral part of these financial statements. FREMONT MUTUAL FUNDS 23 FREMONT GLOBAL FUND OCTOBER 31, 1999 Country Value Shares Security Description Code (Note 1) - -------------------------------------------------------------------------------- CAPITAL GOODS (CONT.) 100 ACS,Actividades de Construccion y Servicios SA SP $ 2,404 3,945 Grupo Dragados SA SP 41,883 75 Portland Valderrivas SA SP 2,076 250 Uralitta SA SP 1,892 2,922 Zardoya Otis SA SP 32,905 265 Atlas Copco AB (Class A) SW 7,006 130 Atlas Copco AB (Class B) SW 3,389 410 Sandvik AB (Class A) SW 10,564 145 Sandvik AB (Class B) SW 3,763 245 Skanska AB (Class B) SW 8,984 200 SKF AB (Class A) SW 3,862 135 SKF AB (Class B) SW 2,747 240 Trelleborg AB SW 2,193 295 Abb AG SZ 474,931 * 326 ABB Ltd. SZ 32,528 10 Forbo Holding AG SZ 4,455 25 Georg Fischer AG SZ 7,869 45 Holderbank Financiere Glarus AG SZ 14,903 5 Schindler Holding AG SZ 7,688 5 Schindler Holding AG (Registered Shares) SZ 7,984 20 Sika Finanz AG SZ 5,967 * 20 Sulzer AG SZ 14,062 * 33,100 Adept Technology, Inc. US 227,563 34,000 General Electric Co. US 4,609,125 * 30,400 IMPCO Technologies, Inc. US 389,500 * 57,800 Miller Industries, Inc. US 140,888 ------------ 14,984,723 ------------ CONSUMER DURABLES 1.9% 2,312 Magna International, Inc. (Class A) CN 105,048 20,000 Renault SA FR 1,037,431 5,500 Volkswagen AG GM 323,275 1,800 Volkswagen AG (Preferred) GM 63,290 66,000 Waterford Wedgwood PLC IR 70,280 1,020 Fiat SPA IT 32,353 171 Fiat SPA RNC IT 2,664 1,500 Magneti Marelli SPA IT 5,282 * 9,370 Olivetti SPA IT 18,276 1,000 Casio Computer Co. Ltd. JP 6,872 1,000 Citizen Watch Co. Ltd. JP 7,074 * 2,000 Dainippon Screen Mfg. Co. Ltd JP 10,385 2,000 Denso Corp. JP 42,806 700 Fanuc Ltd. JP 54,420 1,000 Fuji Photo Film JP 32,153 2,000 Honda Motor Co. Ltd. JP 84,461 500 Kyocera Corp. JP 47,989 1,000 NGK Spark Plug Co. JP 8,149 1,000 Nikon Corp. JP 23,803 * 8,000 Nissan Motor Co. Ltd. JP 47,989 1,000 Olympus Optical Co. Ltd. JP 13,533 1,000 Pioneer Electronic Corp. JP 17,862 10,000 Rohm Co. Ltd. JP 2,245,897 300 Sega Enterprises Ltd. JP 5,390 3,000 Sharp Corp. JP 47,797 1,000 Sony Corp. JP 156,061 1,000 Tostem Corp. JP 22,411 1,000 Toyo Seikan Kaisha Ltd. JP 21,787 10,000 Toyota Motor Corp. JP 346,482 1,000 Yamaha Corp. JP 6,719 3,000 Yokogawa Electric Corp. JP 21,019 Country Value Shares Security Description Code (Note 1) - -------------------------------------------------------------------------------- CONSUMER DURABLES (CONT.) 7,289 Koninklijke (Royal) Philips Electronics NV NL $ 749,267 10,000 Philips Electronics NV NL 1,039,375 151,000 Cycle & Carriage Ltd. SG 513,482 12,295 Electrolux AB SW 245,654 9,515 Securitas AB SW 141,423 300 Volvo AB (Class A) SW 7,840 660 Volvo AB (Class B) SW 17,087 65 S.M.H. AG (Registered Shares) SZ 10,678 15 The Swatch Group AG SZ 11,966 16,200 GKN PLC UK 259,740 9,000 Federal-Mogul Corp. US 226,125 53,500 Ford Motor Co. US 2,935,813 5,800 General Motors Corp. US 407,450 13,500 Harley-Davidson, Inc. US 800,719 * 12,400 Jore Corp. US 144,150 8,000 Maytag Corp. US 320,500 4,000 Whirlpool Corp. US 278,750 ------------ 13,038,977 ------------ CONSUMER NON-DURABLES 3.0% 45 Austria Tabak AG AS 2,028 75 Carlsberg AS (Class A) DK 2,819 60 Carlsberg AS (Class B) DK 2,323 400 Raisio Group PLC FI 2,610 6,510 LVMH FR 1,969,822 484 LVMH, ADR FR 29,282 18,500 Societe BIC SA FR 906,962 11,000 Adidas-Saloman AG GM 808,912 3,350 Continental AG GM 72,581 40,000 Wella AG GM 1,104,906 18,700 Greencore Group PLC IR 53,823 13,365 Kerry Group PLC IR 165,566 3,875 Benetton Group SPA IT 8,579 625 Bulgari SPA IT 4,415 400 Marzotto SPA IT 3,488 3,120 Parmalat Finanziaria SPA IT 4,108 4,085 Pirelli SPA IT 9,389 2,000 Ajinomoto Co. JP 22,440 1,000 Asahi Breweries Ltd. JP 14,234 1,000 Katokichi Co. Ltd. JP 17,900 1,000 Kikkoman Corp. JP 8,225 3,000 Kirin Brewery Co. Ltd. JP 34,380 1,000 Kuraray Co. Ltd. JP 13,437 1,000 Meiji Seika JP 7,285 2,000 Mitsubishi Rayon Co. Ltd. JP 5,048 1,000 Nippon Meat Packers, Inc. JP 12,410 1,000 Snow Brand Milk Products Co. Ltd. JP 4,828 1,000 Takara Shuzo Co. Ltd. JP 13,898 2,000 Teijin Ltd. JP 10,212 4,000 Toray Industries, Inc. JP 22,075 1,000 Yamazaki Baking Co. Ltd. JP 12,237 400 Heineken NV NL 20,449 * 13,397 Unilever NV (Preferred) NL 70,905 12,684 Unilever NV CVA NL 842,483 1,025 Lion Nathan Ltd. NZ 2,210 100 Unicer-Uniao Cervejeira SA (Registered Shares) PT 1,898 2,000 Fraser & Neave Ltd. SG 8,546 135 Azucarera Ebro Agricolas SA SP 2,417 80 Cortefiel SA SP 2,094 * 200 S.A. El Aguila SP 1,894 3,290 Tabacalera SA SP 54,284 The accompanying notes are an integral part of these financial statements. 24 FREMONT MUTUAL FUNDS FREMONT GLOBAL FUND OCTOBER 31, 1999 Country Value Shares Security Description Code (Note 1) - -------------------------------------------------------------------------------- CONSUMER NON-DURABLES (CONT.) 200 Viscofan industria Navarra De Envolturas Celulosicas SA SP $ 1,643 875 Swedish Match AB SW 3,209 938 Nestle SA (Registered Shares) SZ 1,812,144 84,931 President Enterprises, GDR TW 558,421 19,200 Bass PLC UK 209,855 25,950 British American Tobacco PLC UK 173,378 34,600 Cadbury Schweppes PLC UK 225,768 * 400,000 Coca-Cola Beverages PLC UK 775,779 59,334 Diageo PLC UK 602,682 42,053 Unilever PLC UK 390,173 18,000 Anheuser Busch Cos., Inc. US 1,292,625 * 9,200 Audiovox Corp. (Class A) US 187,450 33,000 ConAgra, Inc. US 860,063 4,000 Dial Corp. US 93,500 10,300 Eastman Kodak Co. US 710,056 * 12,700 Fairfield Communities, Inc. US 155,575 * 141,500 Hanover Direct, Inc. US 380,281 9,000 Heinz (H.J.) & Co. US 429,750 * 27,100 McNaughton Apparel Group, Inc. US 215,106 * 24,200 NBTY, Inc. US 195,113 48,000 Philip Morris Cos., Inc. US 1,209,000 12,000 Procter & Gamble Co. US 1,258,500 4,000 Quaker Oats Co. US 280,000 * 21,000 Smithfield Foods, Inc. US 477,750 * 42,100 Sterling Vision, Inc. US 78,938 * 25,100 Steven Madden Ltd. US 307,475 15,000 SYSCO Corp. US 576,563 * 26,800 The Topps Co., Inc. US 262,975 * 15,600 Wesley Jessen VisionCare, Inc. US 419,250 ------------ 20,500,424 ------------ CONSUMER SERVICES 2.7% 400,000 TAB Ltd. AU 689,148 * 50,900 Cinar Corp. (Class B) CN 884,388 * 16,000 Club Mediterranee SA FR 1,605,910 10,875 Hachette Filipacchi Medias FR 549,198 2,000,000 China Hong Kong Photo Products Holdings Ltd. HK 249,710 1,500,000 Ng Fung Hong Ltd. HK 864,011 1,000 Television Broadcasts Ltd. HK 5,342 20,652 Independent Newspapers PLC IR 109,411 250 Jurys Hotel Group PLC IR 2,161 2,570 Mediaset SPA IT 25,714 280 Mondadori (Arnoldo) Editore SPA IT 5,258 2,000 Dai Nippon Printing Co. Ltd. JP 36,491 200 Namco Ltd. JP 9,444 40,000 Secom Co. JP 4,292,159 2,000 Toppan Printing Co. Ltd. JP 24,551 100 Trans Cosmos, Inc. JP 12,717 400,000 Resorts World Berhad MY 1,147,368 15,893 Elsevier NV NL 151,307 36,616 Wolters Kluwer NV NL 1,226,457 200 Schibsted ASA NO 2,171 1,000 Singapore Press Holdings Ltd. SG 17,153 240 Sol Melia SA SP 2,745 2 Kuoni Reisen AG SZ 8,543 10 Moevenpick Holding AG SZ 4,600 29,100 British Sky Broadcasting Group PLC UK 312,322 * 10,000 Freeserve PLC UK 22,764 38,002 Granada Group PLC UK 301,995 25,200 Reed International PLC UK 147,347 Country Value Shares Security Description Code (Note 1) - -------------------------------------------------------------------------------- CONSUMER SERVICES (CONT.) 26,100 Reuters Group PLC UK $ 241,301 23,800 Scottish & Newcastle PLC UK 221,602 * 50,700 ACTV, Inc. US 801,694 * 4,000 Adelphia Communications Corp. US 218,500 * 35,100 American Classic Voyages Co. US 877,500 17,100 Cash America International, Inc. US 161,381 13,000 CBS Corp. US 634,563 * 1,000 First Cash Financial Services, Inc. US 9,375 * 27,200 Homeseekers.com, Inc. US 244,800 9,000 Marriott International, Inc. US 303,188 16,000 Royal Caribbean Cruises Ltd. US 849,000 12,000 Starwood Hotels & Resorts Worldwide, Inc. US 275,250 43,000 Wiley (John) & Sons (Class A) US 725,625 * 17,400 ZipLink, Inc. US 206,625 ------------ 18,480,789 ------------ ENERGY 1.5% 55 OMV AG AS 5,324 2,632 Total Cie Francaise des Petroles SA (Class B) FR 356,577 * 2,632 Total Fina SA, Strip VVPR FR 28 17,395 ENI SPA IT 101,968 4,000 Nippon Mitsubishi Oil Corp. JP 17,660 2,700 Royal Dutch Petroleum Co. NL 161,773 485 Norsk Hydro ASA NO 19,385 * 180 Petroleum Geo-Services NO 2,689 200 Smedvig ASA NO 1,992 1,200 Fletcher Challenge Energy NZ 2,770 16,035 Repsol SA SP 331,352 163,852 British Petroleum PLC UK 1,591,605 11,000 Burmah Castrol PLC UK 189,836 28,000 Apache Corp. US 1,092,000 2,500 Devon Energy Corp. US 97,188 10,000 El Paso Energy Corp. US 410,000 27,000 Exxon Corp. US 1,999,688 * 16,600 Global Industries Ltd. US 132,800 * 6,100 Nabors Industries, Inc. US 138,394 * 19,000 Noble Drilling Corp. US 421,563 13,000 Sempra Energy US 265,688 22,000 Texaco, Inc. US 1,350,250 37,000 USX-Marathon Group US 1,077,625 * 10,400 UTI Energy Corp. US 199,550 ------------ 9,967,705 ------------ FINANCIAL SERVICES (BANKS) 4.1% 4,500 Bank Austria AG AS 224,265 104,343 Westpac Banking Corp. Ltd. AU 669,941 645 Kredietbank NV BE 33,321 25,000 The Toronto-Dominion Bank CN 573,472 1,215 Den Danske Bank DK 138,712 115 Unidanmark AS (Class A) DK 8,970 2,000 Merita PLC (Class A) FI 11,618 8,637 Bayerische Vereinsbank AG GM 564,571 8,888 Deutsche Bank AG GM 635,047 9,600 Dresdner Bank AG GM 493,918 4,200 Hang Seng Bank Ltd. HK 45,682 65,219 Allied Irish Banks PLC IR 818,249 1,610 Banca Intesa SPA IT 3,106 575 Banca Popolare di Milano IT 3,874 5,035 Banco Intesa SPA IT 21,552 81,425 Instituto Bancario San Paolo di Torino IT 1,057,627 1,240 Mediobanca SPA IT 12,786 The accompanying notes are an integral part of these financial statements. FREMONT MUTUAL FUNDS 25 FREMONT GLOBAL FUND OCTOBER 31, 1999 Country Value Shares Security Description Code (Note 1) - -------------------------------------------------------------------------------- FINANCIAL SERVICES (BANKS) (CONT.) 10,570 Unicredito Italiano SPA IT $ 49,591 6,000 Asahi Bank Ltd. JP 53,326 12,000 Bank of Tokyo-Mitsubishi Ltd. JP 199,021 3,000 Bank of Yokohama Ltd. JP 16,844 1,000 Chiba Bank Ltd. JP 5,471 9,000 Fuji Bank Ltd. JP 123,524 6,000 Industrial Bank of Japan JP 81,198 3,000 Mitsubishi Trust & Banking Corp. JP 40,397 11,000 Sakura Bank Ltd. JP 94,596 8,000 Sumitomo Bank JP 128,842 1,000 The 77 Bank Ltd. JP 11,882 1,000 The Gunma Bank Ltd. JP 7,506 2,000 The Joyo Bank Ltd. JP 9,790 2,000 The Shizuoka Bank Ltd. JP 22,651 6,000 Tokai Bank Ltd. JP 52,404 450,000 Malayan Banking Berhad MY 1,527,632 1,822 ABN Amro Holding NV NL 44,162 1,150 Christiania Bank Og Kreditkasse NO 5,610 1,340 Den Norske Bank ASA NO 5,202 11,930 Banco Comerical Portugues SA PT 336,833 255 Banco Espirito Santo E Comercial De Lisboa SA PT 6,646 1,130 BPI-SGPS SA PT 4,527 1,163 DBS GROUP Holdings Ltd. SG 13,159 * 223,594 Oversea-Chinese Banking Corp. Ltd. (Local Shares) SG 1,682,170 15,899 United Overseas Bank Ltd. (Foreign Registered) SG 120,570 50,400 Banco Bilbao Vizcaya SA SP 679,087 71,368 Banco Santander Central Hispano SA SP 742,651 13,455 Corporacion Bancaria de Espana SA SP 299,316 14,497 ForeningSparbanken AB (Series A) SW 231,367 1,280 Skandinaviska Enskilda Banken SW 13,177 1,410 Svenska Handelsbanken AB (Class A) SW 19,583 210 Svenska Handelsbanken AB (Class B) SW 2,661 1,185 Credit Suisse Group SZ 228,154 900 UBS AG SZ 262,288 * 24,285 Thai Farmers Bank (Warrants) TH 5,410 20,100 Abbey National PLC UK 392,802 20,700 Barclays PLC UK 635,200 51,800 Halifax Group PLC UK 661,100 237,879 HSBC Holdings PLC UK 2,934,289 72,000 Lloyds TSB Group PLC UK 995,233 14,203 Royal Bank Of Scotland UK 326,350 29,600 Bank of America Corp. US 1,905,500 17,800 Bank One Corp. US 668,613 37,000 Capital One Financial Corp. US 1,961,000 11,000 Chase Manhattan Corp. US 961,125 12,000 Firstar Corp. US 352,500 200,000 KBC Bank NV US 210,860 29,000 MBNA Corp. US 801,125 22,000 National City Corp. US 649,000 17,000 PNC Bank Corp. US 1,013,625 19,000 Washington Mutual, Inc. US 682,813 16,000 Wells Fargo Co. US 766,000 1,000 Zions Bancorp. US 58,9 ------------ 28,420,032 ------------ FINANCIAL SERVICES (OTHER) 4.8% 15 Generali Hldng Vienna AG AS 2,447 70,000 Lend Lease Corp. Ltd. AU 805,927 * 1,560 Fortis (Class B) BE 52,795 * 7,812 Fortis (Class B), Strip Vvr BE 82 Country Value Shares Security Description Code (Note 1) - -------------------------------------------------------------------------------- FINANCIAL SERVICES (OTHER) (CONT.) 868 Fortis AG CVG BE $ 4,676 50 Groupe Bruxelles Lambert SA BE 8,677 15,000 Canada Life Financial Corp. CN 197,274 45 Pohjola Group Insurance Corp. FI 2,420 40 Pohjola Insurance Group (Class A) FI 2,151 200 Sampo Insurance Co. Ltd. (Class A) FI 6,958 * 114 Axa-Ctf De Valeur Garant FR 721 20,572 Axa-UAP FR 2,908,503 8,420 Union des Assurances Federales FR 1,086,570 700 AMB Aachener & Muenchener Beteiligungs AG GM 59,041 750 Axa Colonia Konzern AG GM 75,119 3,120 Muenchener Rueckversicherungs- Gesellschaft AG GM 706,238 * 60 Muenchener Rueckversicherungs- Gesellschaft AG (Warrant) GM 2,499 5,000 Cheung Kong (Holdings) Ltd. HK 45,373 7,000 New World Development Co. Ltd. HK 13,245 5,000 Sun Hung Kai Properties Ltd. HK 40,385 10,285 Wharf Holdings HK 29,720 23,639 Irish Permanent PLC IR 241,749 2,235 Assicurazioni Generali SPA IT 71,869 8,720 Istituto Nazionale delle Assicurazioni (INA) IT 26,523 1,310 Riunione Adriatica di Sicurta SPA IT 12,113 265 Societa Assicuratrice Industriale IT 2,780 10,160 Unione Immobiliare SPA IT 5,238 400 Acom Co. Ltd. JP 43,766 800 Aiful Corp. JP 124,388 400 Credit Saison Co. Ltd. JP 9,847 54,000 Daiwa Securities Co. Ltd. JP 576,850 3,000 Mitsubishi Estate Co. Ltd. JP 30,089 2,000 Mitsui Fudosan JP 14,953 92,000 Mitsui Marine and Fire Insurance Co. Ltd. JP 610,155 1,000 Nichido Fire & Marine Insurance Co. Ltd. JP 6,152 10,000 Nichiei Co. Ltd. (Kyoto) JP 518,284 200 Orix Corp. JP 26,874 700 Shohkoh Fund & Co. Ltd. JP 428,640 3,100 Takefuji Corp. JP 401,670 230,000 The Nikko Securities Co. Ltd. JP 2,163,355 39,000 The Nomura Securities Co. Ltd. JP 644,198 92,000 The Sumitomo Marine & Fire Insurance Co. Ltd. JP 710,817 80,000 The Yasuda Fire & Marine Insurance Co. Ltd. JP 542,087 4,000 Tokio Marine & Fire Insurance Co. Ltd. JP 52,404 740 Aegon NV NL 68,461 10,000 Aegon NV (New York Shares) NL 919,375 1,707 ING Groep NV NL 100,927 * 590 Storebrand ASA NO 4,106 3,000,000 SM Prime Holdings PH 531,172 100 Companhia de Seguros Tranquilidade PT 2,793 3,750 DBS Land Ltd. SG 6,952 1,215 Corporacion Mapfre SP 20,752 * 300 Inmobiliaria Urbis SA SP 1,670 99 Metrovacesa SA SP 2,112 3,260 Vallehermoso SA SP 28,218 245 Drott AB SW 2,358 470 Fastighets AB Balder SW 5,611 175 OM Gruppen AB SW 2,260 1,115 Skandia Forsakrings AB SW 24,859 350 Schweizerische Rueckversicherungs- Gesellschaft (Swiss Registered) SZ 726,771 215 Zurich Allied AG SZ 121,925 25,950 Allied Zurich PLC UK 314,981 The accompanying notes are an integral part of these financial statements. 26 FREMONT MUTUAL FUNDS FREMONT GLOBAL FUND OCTOBER 31, 1999 Country Value Shares Security Description Code (Note 1) - -------------------------------------------------------------------------------- FINANCIAL SERVICES (OTHER) (CONT.) 17,500 Commercial Union PLC UK $ 255,415 15,600 Land Securities PLC UK 194,865 78,800 Legal & General Group PLC UK 220,177 27,400 Prudential Corp. PLC UK 429,856 24,195 Royal & Sun Alliance Insurance Group PLC UK 164,834 9,000 Ace Ltd. US 174,938 19,000 Alliance Capital Management L.P. US 521,313 5,000 American Express Co. US 770,000 13,750 American International Group, Inc. US 1,415,391 1,500 Aon Corp. US 53,250 20,800 Associates First Capital Corp. US 759,200 53,250 Citigroup, Inc. US 2,882,156 * 11,100 Concord EFS, Inc. US 300,394 5,000 Federal Home Loan Mortgage Corp. US 270,313 39,000 Federal National Mortgage Association US 2,759,250 5,000 H&R Block, Inc. US 212,813 9,000 J.P. Morgan & Co. US 1,177,875 7,000 MGIC Investment Corp. US 418,250 12,900 Morgan Stanley, Dean Witter and Co. US 1,423,031 14,000 Providian Financial Corp. US 1,526,000 4,000 ReliaStar Financial Corp. US 171,750 2,500 T. Rowe Price Associates, Inc. US 88,750 6,000 TCF Financial Corp. US 177,000 8,000 UnumProvident Corp. US 263,500 ------------ 32,831,246 ------------ HEALTH CARE 5.3% 165 Nova Nordisk AS (Class B) DK 19,844 70 Instrumentarium Corp. FI 2,421 1,650 Beiersdorf AG GM 111,334 2,300 Merck KGaA GM 79,415 1,650 Schering AG GM 195,357 * 7,000 Elan Corp. PLC, ADR IR 180,250 1,000 Chugai Pharmaceutical Co. Ltd. JP 11,901 1,000 Daiichi Pharmaceutical Co. Ltd. JP 14,349 1,000 Eisai Co. Ltd. JP 27,498 109,000 Sankyo Co. Ltd. JP 3,107,112 1,000 Shionogi & Co. Ltd. JP 9,204 1,000 Taisho Pharmaceutical Co. Ltd. JP 41,655 34,000 Takeda Chemical Industries JP 1,954,698 1,000 Yamanouchi Pharmaceutical Co. Ltd. JP 45,398 * 96,500 Grupo Casa Autrey SA de CV, ADR MX 729,781 150 Fabrica Espanola de Productos Quimicos y Farmaceuticos SA SP 1,762 1,691 Novartis AG (Registered Shares) SZ 2,533,500 196 Roche Holding AG SZ 2,356,946 7 Roche Holding AG (Bearer Shares) SZ 122,355 47,700 Glaxo Wellcome PLC UK 1,408,059 76,067 SmithKline Beecham PLC UK 980,186 35,698 Zeneca Group PLC UK 1,609,407 15,000 Abbott Laboratories US 605,625 * 7,900 Advance Paradigm, Inc. US 336,738 * 6,000 Alza Corp. (Class A) US 256,875 * 18,600 ArthroCare Corp. US 1,348,500 7,000 Becton Dickinson & Co. US 177,625 * 13,500 Biogen, Inc. US 1,000,688 10,000 Boston Scientific Corp. US 201,250 24,000 Bristol-Myers Squibb Co. US 1,843,500 1,000 Cardinal Health, Inc. US 43,125 * 28,100 Cytyc Corp. US 1,116,975 Country Value Shares Security Description Code (Note 1) - -------------------------------------------------------------------------------- HEALTH CARE (CONT.) * 6,000 Forest Laboratories, Inc. (Class A) US $ 275,250 * 8,000 Fusion Medical Technologies, Inc. US 88,500 * 33,700 Gene Logic, Inc. US 216,944 * 32,300 Genelabs Technologies, Inc. US 103,966 * 4,800 Gilead Sciences, Inc. US 303,300 * 7,500 Immunex Corp. US 472,500 21,000 IMS Health, Inc. US 609,000 16,000 Johnson & Johnson US 1,676,000 17,000 Lilly (Eli) & Co. US 1,170,875 24,000 McKesson HBOC, Inc. US 481,500 * 45,100 Mediconsult.com, Inc. US 267,781 * 5,000 MedImmune, Inc. US 560,000 17,300 Medtronic, Inc. US 599,013 26,000 Merck & Co. US 2,068,625 * 9,700 NeoPharm, Inc. US 133,375 * 7,200 Oxford Health Plans, Inc. US 85,050 52,000 Pfizer, Inc. US 2,054,000 * 11,600 Quintiles Transnational Corp. US 215,325 26,000 Schering Plough Corp. US 1,287,000 * 11,700 Sunrise Assisted Living, Inc. US 128,700 13,000 Warner-Lambert Co. US 1,037,563 * 8,000 Women First HealthCare, Inc. US 59,500 ------------ 36,367,100 ------------ MULTI-INDUSTRY 0.7% 10 D'Ieteren SA BE 4,597 10 Dolmen Computer Applications NV BE 192 * 195 Kesko Oyj FI 2,224 100 Stockmann AB FI 1,845 4,375 Preussag AG GM 237,316 272,000 First Pacific Co. Ltd. HK 157,549 9,000 Hutchison Whampoa HK 90,359 3,500 Swire Pacific Ltd. (Class A) HK 17,345 50,000 Larsen & Toubro Ltd., GDR IN 1,085,000 * 4,000 Itochu Corp. JP 14,742 4,000 Marubeni Corp. JP 12,746 4,000 Mitsubishi Corp. JP 28,794 4,000 Mitsui & Co. Ltd. JP 29,600 1,000 Onward Kashiyama Co. Ltd. JP 15,721 3,000 Sumitomo Corp. JP 21,941 100 Toho Co. Ltd. JP 15,549 200 Uni-Charm Corp. JP 11,690 * 93,584 Renong Berhad MY 54,673 * 155,000 Renong Berhad (Warrants) MY 29,776 300,000 YTL Corporation Berhad MY 572,368 325 Orkla ASA (Series A) NO 4,544 1,980 Corporacion Financiera Alba SA SP 57,615 80 Adecco SA SZ 48,574 20,100 Allied-Signal, Inc. US 1,144,444 9,400 Minnesota Mining & Manufacturing Co. US 893,588 ------------ 4,552,792 ------------ RAW MATERIALS 2.4% 50 Boehler - Uddeholm AG AS 2,098 120 Radex-Heraklith Industriebeteiligungs AG AS 3,378 10,917 North Ltd. AU 21,107 45 Cimenteries CBR Cementbedrijven BE 4,782 20 Glaverbel SA BE 2,130 180 Solvay SA BE 13,844 315 UCB SA BE 11,773 The accompanying notes are an integral part of these financial statements. FREMONT MUTUAL FUNDS 27 FREMONT GLOBAL FUND OCTOBER 31, 1999 Country Value Shares Security Description Code (Note 1) - -------------------------------------------------------------------------------- RAW MATERIALS (CONT.) 70 Union Miniere SA BE $ 2,576 80,000 Abitibi-Consolidated, Inc. CN 973,289 7,564 Alcan Aluminum Ltd. CN 248,055 9,500 Barrick Gold Corp. CN 174,658 4,419 Canadian Occidental Petroleum Ltd. CN 86,500 7,010 Inco Ltd. CN 141,029 10,100 Noranda, Inc. CN 133,175 7,300 Placer Dome, Inc. CN 91,790 1,700 Potash Corporation of Saskatchewan, Inc. CN 76,259 400 Outokumpu Oyj FI 4,588 570 Upm-Kymmene Oyj FI 18,029 17,000 Ciments Francais FR 1,089,724 9,100 BASF AG GM 412,068 10,450 Bayer AG GM 428,578 * 2,500 Degussa-huels AG GM 94,623 * 5,186,000 PT Dynaplast ID 701,323 87,395 Jefferson Smurfit Group PLC IR 227,587 400 Burgo (Cartiere) SPA IT 2,952 5,603 Montedison SPA IT 10,013 1,600 Snia SPA IT 1,672 264,000 Asahi Chemical Industry Co. Ltd. JP 1,596,314 2,000 Dainippon Ink and Chemicals, Inc. JP 7,678 1,000 Ebara Corp. JP 11,940 1,000 Fujikura Ltd. JP 6,191 1,000 Inax Corp. JP 6,680 1,000 Kaneka Corp. JP 13,101 2,000 Kao Corp. JP 61,042 * 9,000 Kawasaki Steel Corp. JP 20,386 1,000 Kokuyo Co. Ltd. JP 18,169 1,000 Kyowa Hakko Kogyo JP 7,179 5,000 Mitsubishi Chemical Corp. JP 22,699 * 3,000 Mitsubishi Materials Corp. JP 7,918 1,000 Mitsui Mining & Smelting Co. Ltd. JP 5,615 1,000 NGK Insulators. Ltd. JP 9,492 2,000 Nippon Paper Industries Co. Ltd. JP 15,549 617,000 Nippon Steel Corp. JP 1,569,296 * 7,000 NKK Corp. JP 5,778 3,000 Oji Paper Co. Ltd. JP 21,163 131,000 Sekisui Chemical Co. Ltd JP 645,004 1,000 Shin-Etsu Chemical Co. Ltd. JP 41,271 1,000 Shiseido Co. Ltd. JP 15,261 4,000 Sumitomo Chemical Co. JP 25,684 2,000 Sumitomo Electric Industries JP 26,893 1,000 Sumitomo Forestry Co. JP 6,728 * 9,000 Sumitomo Metal Industries Ltd. JP 8,811 2,000 Tosoh Corp. JP 8,945 1,000 Toto Ltd. JP 7,621 * 24,921 Cemex SA de CV MX 560,723 140,000 Kimberly-Clark de Mexico SA MX 441,815 80,000 Rothmans of Pall Mall (Malaysia) Berhad MY 557,895 370 Akzo Nobel NV NL 15,970 130 Buhrmann NV NL 2,246 60 Koninklijke Hoogovens NV NL 3,353 150 Dyno Industrier ASA NO 3,620 70 Norske Skogindustrier ASA (Class A) NO 2,726 3,105 Carter Holt Harvey Ltd. NZ 3,938 277 Cimpor-Cimentos de Portugal, SGPS SA PT 4,605 400 Portucel Industrial-Empresa Produtora de Celulosa SA PT 2,741 * 32,398 Hansol Paper Ltd., GDR SK 159,560 Country Value Shares Security Description Code (Note 1) - -------------------------------------------------------------------------------- RAW MATERIALS (CONT.) 115 Acerinox SA SP $ 3,504 * 200 Asturiana de Zinc SA SP 2,277 120 Empresa Nacional de Celulosas SA SP 2,252 235 AGA AB SW 4,094 270 AGA AB (Class A) SW 4,638 150 Granges AB SW 2,878 160 SSAB Svenskt Stal AB (Class A) SW 1,998 200 SSAB Svenskt Stal AB (Class B) SW 2,461 25 Alusuisse-Lonza Holding AG SZ 15,278 1,414 Holderbank Financiere Glarus AG (Class B) SZ 1,744,039 * 25 Lonza AG (Rights) SZ 14,621 19,805 BOC Group PLC UK 424,797 18,000 Imperial Chemical Industries, Inc. UK 179,728 31,600 Rio Tinto PLC UK 540,672 18,000 AK Steel Holding Corp. US 311,625 9,000 EOG Resources, Inc. US 187,313 1,500 Newfield Exploration Co. US 44,156 37,650 Northern Technologies International Corp. US 225,900 31,550 Reliance Steel & Aluminum US 662,550 62,000 Worthington Industries, Inc. US 1,030,750 ------------ 16,334,731 ------------ RETAIL 3.6% 180,000 Coles Myer Ltd. AU 895,892 * 100 Colruyt NV BE 5,493 115 Delhaize - Le Lion SA BE 8,105 3,650 Pinault-Printemps-Redoute SA FR 697,678 5,000 Hornbach Holding AG GM 216,132 2,000 Karstadt AG GM 91,935 3,780 Metro AG GM 200,259 28,000 Fyffes PLC IR 50,185 480 La Rinascente SPA IT 3,340 200 Aoyama Trading Co. JP 6,392 * 2,000 Daiei, Inc. JP 6,872 1,000 Daimaru, Inc. JP 4,933 1,000 Hankyu Department Stores, Inc. JP 5,471 1,000 Isetan Co. Ltd. JP 7,150 1,000 Ito-Yokado Co. Ltd. JP 80,046 1,000 Jusco Co. Ltd. JP 23,323 1,000 Marui Co. Ltd. JP 18,908 1,000 Mycal Corp. JP 4,741 * 1,000 Seiyu Ltd. JP 4,175 1,000 Takashimaya Co. Ltd. JP 8,974 * 200,000 Cifra SA de CV (Series C) MX 311,429 * 50,599 Cifra SA de CV (Series V) MX 79,000 24,000 Gucci Group NL 1,938,000 135 Hagemeyer NV NL 2,774 12,598 Koninklijke Ahold NV NL 387,836 * 460 TelePizza SA SP 2,464 1,800 Hennes & Mauritz AB (Series B) SW 47,916 30 Valora Holding AG SZ 7,649 16,800 Boots Company PLC UK 172,854 31,800 J. Sainsbury PLC UK 190,903 27,999 Kingfisher PLC UK 306,257 47,300 Marks & Spencer PLC UK 217,873 109,764 Tesco PLC UK 325,637 19,000 The Great Universal Stores PLC UK 144,275 * 30,600 Abercrombie & Fitch Co. (Class A) US 833,850 * 6,200 American Eagle Outfitters, Inc. US 265,438 * 5,300 AnnTaylor Stores Corp. US 225,581 The accompanying notes are an integral part of these financial statements. 28 FREMONT MUTUAL FUNDS FREMONT GLOBAL FUND OCTOBER 31, 1999 Country Value Shares Security Description Code (Note 1) - -------------------------------------------------------------------------------- RETAIL (CONT.) * 9,500 Bed Bath & Beyond, Inc. US $ 316,469 * 9,500 Best Buy Co., Inc. US 527,844 * 15,800 Buca, Inc. US 193,550 7,000 Circuit City Stores US 298,813 * 7,000 Consolidated Stores Corp. US 128,188 * 18,500 David's Bridal, Inc. US 183,844 4,000 Dayton-Hudson Corp. US 258,500 15,400 Deb Shops, Inc. US 323,400 11,000 Dollar General Corp. US 290,125 10,000 Family Dollar Stores, Inc. US 206,250 26,250 Gap, Inc. US 974,531 * 33,400 Genesco, Inc. US 442,550 33,000 Home Depot, Inc. US 2,491,500 * 9,500 Kohls Corp. US 710,719 21,000 Lowe's Cos., Inc. US 1,155,000 * 13,300 NPC International US 159,600 * 24,000 Office Depot, Inc. US 298,500 * 11,600 Outback Steakhouse, Inc. US 266,800 * 52,700 Rent-Way, Inc. US 876,138 * 24,450 Staples, Inc. US 542,484 * 10,000 Starbucks Corp. US 271,875 8,000 Tandy Corp. US 503,500 19,000 Texas Industries, Inc. US 680,438 2,000 The Estee Lauder Cos., Inc. US 93,250 41,000 The TJX Cos., Inc. US 1,112,125 * 14,100 Uno Restaurant Corp. US 161,269 59,000 Wal-Mart Stores, Inc. US 3,344,563 * 10,700 Zales Corp. US 448,063 ------------ 25,059,628 ------------ SHELTER 0.8% * 63,000 Thyssen Krupp AG GM 1,481,186 * 1,459,000 Filinvest Land, Inc. PH 123,706 212,000 City Developments Ltd. SG 1,097,322 700,000 Keppel Land Ltd. SG 990,069 800,000 Wing Tai Holdings Ltd. SG 702,979 2,460 Fomento de Construcciones y Contratas SA SP 61,857 23,000 Centex Corp. US 616,688 17,000 Masco Corp. US 518,500 12,600 Modtech Holdings, Inc. US 66,938 ------------ 5,659,245 ------------ TECHNOLOGY 12.1% 30 Barco NV BE 3,890 * 2,200 Newbridge Networks Corp. CN 42,840 24,000 Nortel Networks Corp. CN 1,466,458 40 Bang & Olufsen Holding A/S (Class B) DK 2,099 80 GN Store Nord AS DK 2,734 * 8,000 Epcos AG, ADR GM 326,000 455 Sirti SPA IT 2,470 300 Advantest Corp. JP 45,206 52,000 Canon, Inc. JP 1,472,310 5,000 Matsushita Electric Industrial Co. Ltd. JP 105,336 4,000 NEC Corp. JP 81,006 1,000 Omron Corp. JP 20,923 5,000 Sanyo Electric Co. Ltd. JP 23,995 20,000 Shinko Electric Industries Co. Ltd. JP 1,017,372 100 Softbank Corp. JP 41,559 33,000 Tokyo Electron Ltd. JP 2,742,874 Country Value Shares Security Description Code (Note 1) - -------------------------------------------------------------------------------- TECHNOLOGY (CONT.) * 2,000 ASM Lithography Holding NV NL $ 145,250 6,000 Singapore Technologies Engineering Ltd. SG 8,703 53,350 Telefonaktiebolaget LM Ericsson (Class B) SW 2,222,863 45 ABB Group SZ 14,194 330 Swisscom AG SZ 100,726 * 62,450 Ritek Corp., GDR TW 833,708 * 30,000 Synnex Technology International, GDR TW 591,900 * 35,000 Taiwan Semiconductor Manufacturing Co. Ltd., ADR TW 1,211,875 30,400 British Aerospace PLC UK 178,626 52,200 General Electric PLC UK 570,972 * 85,000 Powerchip Semiconductor, GDR UK 909,500 * 11,000 3Com Corp. US 319,000 * 14,000 ADC Telecommunications, Inc. US 619,938 6,000 Adobe Systems, Inc. US 419,625 * 9,000 Altera Corp. US 437,625 * 13,500 Analog Devices, Inc. US 717,281 * 40,300 Anaren Microwave, Inc. US 1,380,275 * 30,600 Ancor Communcations, Inc. US 969,638 * 3,700 ANTEC Corp. US 179,450 * 8,000 Applied Materials, Inc. US 718,500 * 5,000 Applied Micro Circuits Corp. US 389,063 * 16,900 BMC Software, Inc. US 1,084,769 44,100 Boeing Co. US 2,031,356 * 3,000 Broadcom Corp. US 383,438 20,300 Cabletron Systems, Inc. US 336,219 * 11,000 Cadence Design Systems, Inc. US 167,063 * 28,400 California Amplifier, Inc. US 536,050 * 2,500 Check Point Software Technologies Ltd. US 289,219 * 7,000 CIENA Corp. US 246,750 * 38,000 Cisco Systems, Inc. US 2,812,000 * 5,800 Citrix Systems, Inc. US 371,925 37,000 Compaq Computer Corp. US 703,000 14,000 Computer Associates International, Inc. US 791,000 * 23,200 Compuware Corp. US 645,250 * 5,500 Comverse Technology, Inc. US 624,250 * 4,000 Conexant Systems, Inc. US 373,500 7,200 Cordant Technologies, Inc. US 224,550 * 1,400 Critical Path, Inc. US 64,050 * 31,500 Datalink Corp. US 415,406 * 38,000 Dell Computer Corp. US 1,524,750 * 500 DoubleClick, Inc. US 70,000 * 13,400 Elantec Semiconductor, Inc. US 286,425 * 6,000 Electronic Arts, Inc. US 484,875 * 22,500 EMC Corp. US 1,642,500 * 6,900 Emulex Corp. US 1,075,969 * 27,200 Exigent International, Inc. US 95,200 * 7,000 Gateway, Inc. US 462,438 9,500 General Dynamics Corp. US 526,656 * 7,000 General Instrument Corp. US 376,688 * 11,700 Genesys Telecommunications Laboratories, Inc. US 574,763 10,000 Hewlett-Packard Co. US 740,625 * 24,700 Information Resource Engineering, Inc. US 444,600 * 1,500 InfoSpace.com, Inc. US 83,438 * 1,500 Inktomi Corp. US 152,156 * 8,500 Integrated Measurement Systems, Inc. US 103,594 42,000 Intel Corp. US 3,252,375 20,000 International Business Machines Corp. US 1,967,500 * 7,000 Intuit, Inc. US 203,875 5,000 Jabil Circuit, Inc. US 261,250 The accompanying notes are an integral part of these financial statements. FREMONT MUTUAL FUNDS 29 FREMONT GLOBAL FUND OCTOBER 31, 1999 Country Value Shares Security Description Code (Note 1) - -------------------------------------------------------------------------------- TECHNOLOGY (CONT.) * 8,000 JDS Uniphase Corp. US $ 1,335,000 * 4,000 KLA-Tencor Corp. US 316,750 * 2,600 Kopin Corp. US 109,200 10,500 Legato Systems, Inc. US 564,375 * 10,500 Lexmark International Group, Inc. US 819,656 9,500 Linear Technology Corp. US 664,406 * 5,000 LSI Logic Corp. US 265,938 33,000 Lucent Technologies, Inc. US 2,120,250 * 5,000 Lycos, Inc. US 267,500 * 8,500 Maxim Integrated Products, Inc. US 670,969 * 28,700 MDSI Mobile Data Solutions, Inc. US 408,975 * 8,000 Micrel, Inc. US 435,000 * 55,200 Microsoft Corp. US 5,109,450 * 27,600 MTI Technology Corp. US 467,475 * 47,500 Netopia, Inc. US 2,535,313 4,600 Netro Corp. US 104,938 * 4,000 Network Appliance, Inc. US 296,000 * 9,600 Network Associates, Inc. US 175,800 * 35,400 New Era of Networks, Inc. US 1,148,288 * 15,000 Novell, Inc. US 300,938 * 22,500 Oracle Systems Corp. US 1,070,156 * 33,400 Orckit Communications Ltd. US 920,588 * 20,000 Parametric Technology Corp. US 381,250 * 8,200 PC-Tel, Inc. US 246,000 * 11,200 Peregrine Systems, Inc. US 491,400 * 30,900 Photon Dynamics, Inc. US 934,725 * 5,100 Pixar, Inc. US 194,119 * 5,000 PMC-Sierra, Inc. US 471,250 * 3,900 Powerwave Technologies, Inc. US 253,744 * 19,600 Princeton Video Image, Inc. US 101,675 * 16,700 Puma Technology, Inc. US 617,900 * 6,500 QUALCOMM, Inc. US 1,447,875 * 3,800 Quest Software, Inc. US 280,250 * 400 RealNetworks, Inc. US 43,875 * 13,000 Sanmina Corp. US 1,170,813 * 4,000 Siebel Systems, Inc. US 439,250 * 16,200 SmartForce US 334,125 * 17,700 Spectrum Control, Inc. US 137,175 * 9,000 Sun Microsystems, Inc. US 952,313 3,000 Symbol Technologies, Inc. US 119,250 * 8,000 Tellabs, Inc. US 506,000 * 14,000 Teradyne, Inc. US 539,000 12,000 Texas Instruments, Inc. US 1,077,000 14,528 United Technologies Corp. US 878,944 * 10,400 VeriSign, Inc. US 1,284,400 * 9,000 Veritas Software Corp. US 970,875 * 5,000 VISX, Inc. US 312,813 * 19,200 Vitesse Semiconductor Corp. US 880,800 7,000 Xerox Corp. US 196,000 * 13,100 Xilinx, Inc. US 1,029,988 ------------ 83,165,030 ------------ TRANSPORTATION 0.7% 80 Austrian Airlines Osterreichische Luftverkehrs AG AS 1,704 60 Compagnie Maritime Belge SA BE 3,100 2 A/S Dampskibsselskabet Svendborg DK 29,073 2 D/S 1912 (Class B) DK 20,281 100 Finnlines Oyj FI 2,657 * 800,000 Eurotunnel SA FR 1,028,997 8,400 Deutsche Lufthansa AG GM 175,794 Country Value Shares Security Description Code (Note 1) - -------------------------------------------------------------------------------- TRANSPORTATION (CONT.) 8,000 Cathay Pacific Airways HK $ 16,270 * 13,345 Ryanair Holdings PLC IR 109,743 3,345 Alitalia SPA IT 9,257 10 East Japan Railway Co. JP 61,330 1,000 Hankyu Corp. JP 3,446 5,000 Japan Airlines Co. Ltd. JP 16,796 4,000 Kinki Nippon Railway Co. Ltd. JP 18,543 2,000 Mitsui O.S.K. Lines Ltd. JP 4,357 1,000 Nagoya Railroad Co. Ltd. JP 2,860 3,000 Nippon Express Co. Ltd. JP 21,250 3,000 Nippon Yusen Kabushiki Kaisha JP 12,957 1,000 Odakyu Electic Railway Co. Ltd. JP 3,119 3,000 Tobu Railway Co. Ltd. JP 9,415 3,000 Tokyu Corp. JP 8,206 76,000 Yamato Transport Co. Ltd. JP 2,188,310 61 IHC Caland NL 2,653 75 Koninklijke Luchtvaart Maatschapij NV NL 2,048 200 Bergesen d.y. ASA (Class A) NO 3,231 200 Bergesen d.y. ASA (Class B) NO 3,090 300 SAS Norge ASA NO 2,758 6,780 Brisa-Auto Estradas de Portugal SA PT 267,698 2,000 Singapore Airlines Ltd. SG 21,186 50 SAirGroup SZ 10,530 22,687 BAA PLC UK 166,120 17,916 Peninsular and Oriental Steam Navigation Co. UK 256,481 10,000 Kansas City Southern Industries, Inc. US 474,375 ------------ 4,957,635 ------------ UTILITIES 6.7% * 65 Oesterreichische Elektrizitaetswirtschafts AG (Class A) AS 9,430 190,000 Telstra Corp. Ltd. AU 967,124 1,232 Electrabel NPV BE 407,334 2,019 Tractebel BE 353,779 9,069 Enersis SA, ADR CL 204,053 20,000 BCE, Inc. CN 1,188,745 3,148 BCT.Telus Communications, Inc. CN 65,686 1,049 BCT.Telus Communications, Inc. (Class A) CN 21,425 30,600 Rogers Cantel Mobile Communications, Inc. CN 873,513 38,900 Teleglobe, Inc. CN 920,084 6,800 Transalta Corp. CN 89,662 12,681 TransCanada Pipelines Ltd. CN 152,986 6,180 Tele Danmark AS DK 376,001 2,635 Nokia Oyj FI 302,283 8,200 Alcatel FR 1,283,821 15,300 France Telecom SA FR 1,481,613 34,500 Deutsche Telekom GM 1,594,971 17,150 Mannesmann AG GM 2,652,519 8,500 RWE AG GM 349,949 7,550 Veba AG GM 413,520 13,000 Viag AG GM 241,772 100,000 China Telecom (Hong Kong) Ltd. HK 342,390 5,500 CLP Holdings Ltd. HK 25,203 15,000 Hong Kong & China Gas Co. Ltd. HK 19,887 26,000 Hong Kong Telecommunications HK 59,403 1,380 Edison SPA IT 11,479 1,510 Italgas SPA IT 6,257 284,460 Telecom Italia Mobile (TIM) SPA IT 1,781,443 3,420 Telecom Italia Mobile (TIM) SPA (Savings Shares) IT 11,899 The accompanying notes are an integral part of these financial statements. 30 FREMONT MUTUAL FUNDS FREMONT GLOBAL FUND OCTOBER 31, 1999 Country Value Shares Security Description Code (Note 1) - -------------------------------------------------------------------------------- UTILITIES (CONT.) 8,040 Telecom Italia SPA IT $ 69,593 1,965 Telecom Italia SPA (Savings Shares) IT 9,675 2,500 Kansai Electric Power JP 46,766 157 Nippon Telegraph & Telephone Corp. JP 2,410,980 6,000 Osaka Gas Co. JP 20,098 1,500 Tohoku Electric Power Co., Inc. JP 23,438 4,000 Tokyo Electric Power JP 89,452 7,000 Tokyo Gas Co. JP 16,595 14,000 Telefonos de Mexico SA (Class L), ADR MX 1,197,000 300,000 Telekom Malaysia Berhad MY 923,684 614 Koninklijke KPN NV NL 31,584 3,720 Telecom Corporation of New Zealand Ltd. NZ 14,983 97,766 Manila Electric Co. (Class B) PH 268,186 14,900 Philippine Long Distance Telephone Co. PH 310,262 11,320 EDP-Electricidade de Portugal SA PT 176,395 11,515 Portugal Telecom SA PT 514,747 13,000 Singapore Telecommunications Ltd. SG 24,725 20,000 Korea Electric Power Corp., ADR SK 315,000 16,375 Endesa SA SP 328,537 7,575 Gas Natural SDG SA SP 166,116 15,355 Iberdrola SA SP 224,376 * 54,387 Telefonica SA SP 896,801 5,260 Union Electrica Fenosa SA SP 77,140 55,800 BG PLC UK 309,760 89,368 British Telecommunications PLC UK 1,622,348 35,400 Cable & Wireless PLC UK 413,975 23,476 National Power PLC UK 158,778 20,900 ScottishPower PLC UK 193,741 16,800 United Utilities PLC UK 166,503 3,500 Vodafone Airtouch PLC, ADR UK 167,781 175,720 Vodafone Group PLC UK 820,230 * 33,000 AES Corp. US 1,862,438 3,000 ALLTEL Corp. US 249,750 38,000 Ameren Corp. US 1,436,875 35,700 AT&T Corp. US 1,668,975 19,000 Bell Atlantic Corp. US 1,233,813 34,200 BellSouth Corp. US 1,539,000 * 20,600 Calpine Corp. US 1,187,075 24,400 Coastal Corp. US 1,027,850 40,000 FPL Group, Inc. US 2,012,500 * 29,100 MCI WorldCom, Inc. US 2,497,144 3,000 Nextel Communications, Inc. US 258,563 60,000 Puget Sound Energy, Inc. US 1,327,500 * 6,000 Qwest Communications International, Inc. US 216,000 * 15,700 SBA Communications Corp. US 153,075 28,264 SBC Communications, Inc. US 1,439,644 ------------ 46,327,682 ------------ TOTAL STOCKS (Cost $325,975,932) 383,397,736 ------------ Value Face Amount Security Description (Note 1) - -------------------------------------------------------------------------------- BONDS 28.5% FOREIGN CORPORATE BONDS 7.1% AUS $4,000,000 Commonwealth Bank Australia, 6.750%, 12/01/07 $ 2,520,291 CAN $ 140,000 Beneficial Canada, Inc., 6.350%, 04/01/2002 94,413 2,000,000 Oesterreichische Kontrollbank (Republic of Austria), 9.000%, 06/19/02 1,446,680 2,000,000 Toyko Electric Power, 10.500%, 06/14/01 1,446,068 DKK 2,000 Realkredit Danmark, 5.000%, 10/01/29 243 66,000 Unikredit Realkredit, 5.000%, 10/01/29 8,010 E 3,000,000 Alcatel, 4.375%, 02/17/09 2,822,730 Allgemeine Hypotheekbank 2,100,000 5.000%, 09/02/09 2,116,889 80,000 5.500%, 01/17/07 85,103 34,650 Axa SA, 2.500%, 01/01/14 36,365 4,601,626 Caisse D'Amort Dette, 5.125% 10/25/08 4,754,222 Depfa Pfandbriefbank 2,000,000 4.500%, 11/12/02 2,103,118 380,000 5.500%, 01/15/10 398,471 3,000,000 Deutsche Telecom, 5.250%, 05/20/08 3,031,956 2,000,000 HSBC Holdings PLC, 5.500%, 07/15/09 2,001,905 Hypotheekbank In Essen 390,000 4.250%, 07/06/09 368,867 110,000 4.750%, 08/11/08 109,780 230,000 Rheinische Hypobank AG, 4.000%, 09/15/06 224,981 (pound) 2,000,000 Abbey National Treasury Service, 6.500%, 03/05/04 3,226,880 2,500,000 Powergen, 8.500%, 07/03/06 4,357,184 2,000,000 Railtrack PLC, 9.125%, 03/25/06 3,591,923 (Y) 28,000,000 Korea Development Bank, 2.700%, 08/16/02 269,167 SHL Corp. Ltd. 6,000,000 0.493%, 10/25/03 59,333 5,000,000 0.793%, 12/25/24 48,004 $ 3,000,000 AES China Generating Co., 10.125%, 12/15/06 1,665,660 2,000,000 Asia Pulp & Paper International Finance, 10.250%, 10/01/00 1,880,000 90,000 Banco Nacional Commercio Exte, 7.250%, 02/02/04 82,071 40,000 Bancomext Trust Division, 8.000%, 08/05/03 38,350 3,000,000 Cemex SA de CV, 10.750%, 07/15/00 3,079,650 200,000 Deutsche Bank Finance NV, 5.218%, 12/17/03 199,580 15,000 Flag Ltd., 8.250%, 01/30/08 13,275 3,000,000 Grupo Televisa (callable 05/15/01 @106.625), 0.000% to 05/15/01, 13.250% thereafter, 05/15/08 2,565,000 3,000,000 Guangdong Enterprises, 8.875%, 05/22/07 680,220 12,000 Orange PLC, 8.000%, 08/01/08 12,015 Petroleos Mexicanos 140,000 8.850%, 09/15/07 127,400 150,000 9.375%, 12/02/08 152,820 2,000,000 Rabobank Nederland, 6.250%, 12/30/99 2,000,000 15,000 Rogers Cantel, Inc., 8.300%, 10/01/07 15,038 100,000 Sanwa Bank Ltd., 8.350%, 07/15/09 101,571 1,000,000 Sony Corp., 6.125%, 03/04/03 986,349 ------------ 48,721,582 ------------ The accompanying notes are an integral part of these financial statements. FREMONT MUTUAL FUNDS 31 FREMONT GLOBAL FUND OCTOBER 31, 1999 Value Face Amount Security Description (Note 1) - -------------------------------------------------------------------------------- FOREIGN GOVERNMENT BONDS 12.1% CAN$ Government of Canada 4,550,000 6.000%, 06/01/08 $ 3,081,680 4,000,000 8.000%, 06/01/23 3,323,591 100,000 9.000%, 12/01/04 76,600 2,000,000 Japan Highway Public Corp., 7.875%, 09/27/02 1,413,580 2,000,000 Republic of Finland, 9.500%, 09/15/04 1,530,619 DM 6,000,000 United Mexican States, 8.125%, 09/10/04 3,444,558 DKK 20,000,000 Denmark-Bullet, 6.00%, 11/15/02 2,933,159 1,700,000 Kingdom of Denmark, 7.000%, 11/15/07 263,760 E 2,000,000 Bundesrepublic Deutschland, 6.500%, 10/14/05 2,274,758 2,324,052 Buoni Poliennali Del Tes, 6.750%, 02/01/07 2,658,519 Deutschland Republic 652,000 4.500%, 07/04/09 651,348 633,000 5.375%, 01/04/10 678,784 4,601,626 5.625%, 01/04/28 4,691,395 Government of France 3,048,980 6.000%, 10/25/25 3,278,830 4,417,470 8.500%, 10/25/19 6,154,673 565,000 Government of Netherlands, 6.000%, 01/15/06 625,940 3,208,096 Government of Spain, 6.000%, 01/31/08 3,507,102 Netherlands Government 2,546,000 3.750%, 07/15/09 2,371,533 560,000 5.750% 02/15/07 611,367 500,000 7.500% 04/15/10 614,393 320,000 7.500%, 01/15/23 405,189 100,000 Portugual Government Bond, 3.950%, 07/15/09 93,337 2,906,920 Republic of Austria, 5.625%, 07/15/07 3,116,867 120,000 Republic of Philippines, 8.000%, 09/17/04 129,919 100,000 Treuhandanstalt, 7.500%, 09/09/04 117,651 (pound) 2,000,000 European Investment Bank, 6.000%, 11/26/04 3,160,972 GRD Hellenic Republic 761,000,000 6.600%, 01/15/04 2,371,358 700,000,000 8.600%, 03/26/08 2,441,819 1,000,000,000 8.800%, 06/19/07 3,492,470 (Y) Japanese Government Bond 32,000,000 3.000%, 09/20/05 338,827 145,000,000 3.300%, 06/20/06 1,563,450 30,200,000 3.400%, 06/20/05 326,174 30,200,000 4.000%, 06/20/05 335,681 NOK 1,200,000 European Investment Bank, 5.375%, 08/28/07 144,966 NZ $ 1,100,000 Government of New Zealand, 7.000%, 07/15/09 554,795 7,000,000 Inter-American Develepmont Bank, 5.75%, 04/15/04 3,313,737 2,000,000 International Bank of Reconstruction & Development, 7.250%, 04/09/01 1,024,848 New Zealand Government Bond 100,000 4.500%, 02/15/16 50,276 800,000 5.500%, 04/15/03 391,241 810,000 10.000%, 03/15/02 443,495 SEK Government of Sweden 3,000,000 5.000%, 01/15/04 360,846 40,000,000 6.000%, 02/09/05 4,987,681 SGD 400,000 Singapore Government, 4.375%, 01/15/09 235,835 $ 100,000 Alberta Province Alta, 9.250%, 04/01/00 101,430 3,000,000 Ontario Global, 7.000%, 08/04/2005 3,028,650 Republic of Kazakhstan 2,000,000 9.250%, 12/20/99 2,004,700 2,000,000 13.625%, 10/18/04 1,975,000 Value Face Amount Security Description (Note 1) - -------------------------------------------------------------------------------- FOREIGN GOVERNMENT BONDS (CONT.) $ 50,400 Republic of the Philippines, 6.000%, 12/01/09 $ 41,076 United Mexican States 80,000 6.520%, 06/27/02 78,600 2,000,000 11.500%, 05/15/26 2,236,500 ------------ 83,053,579 ------------ U.S. CORPORATE BONDS 3.9% (Y) 17,000,000 General Motors Acceptance Corp., 0.340%, 07/26/02 163,082 $ 12,000 AES Corp., 10.250%, 07/15/06 12,090 13,000 Beckman Instruments, Inc., 7.100%, 03/04/03 12,565 3,000,000 BellSouth Telecommunications, Inc., 6.375%, 06/01/28 2,610,690 3,000,000 BP America, Inc., 5.750%, 07/30/01 2,969,907 12,000 Buckeye Technologies, Inc., 8.000%, 10/15/10 11,040 Building Materials Corp. 7,000 7.750%, 07/15/05 6,353 7,000 8.000%, 10/15/07 6,388 15,000 Calpine Corp., 7.875%, 04/01/08 14,213 15,000 Century Communications Corp., 0.000%, 03/15/03 10,556 15,000 CMS Energy Corp., 8.125%, 05/15/02 14,983 15,000 CSC Holdings, Inc., 9.875%, 04/01/23 15,488 15,000 Echostar DBS Corp., 9.250%, 02/01/06 14,942 3,000,000 Export-Import Bank of Korea, 7.100%, 03/15/07 2,922,060 2,000,000 Ford Brasil LTDA, 9.250%, 01/22/07 1,876,140 2,000,000 Frank Russell Co., 5.625%, 01/15/09 1,787,220 9,000 Garden State Newspapers, 8.750%, 10/01/09 8,303 General Electric Capital Corp. 300,000 5.185%, 04/17/00 299,730 2,500,000 8.850%, 03/01/07 2,765,025 12,000 Hollinger International Publishing, 8.625%, 03/15/05 11,700 50,000 J.P. Morgan & Co., 3.356%, 02/15/12 44,335 15,000 Jones Intercable, Inc., 8.875%, 04/01/07 15,750 15,000 K Mart Corp., 9.350%, 01/02/20 14,438 100,000 Kroger Co., 6.411%, 10/01/10 99,753 3,000,000 Lehman Brothers Holdings, Inc., 7.375%, 05/15/07 3,014,640 100,000 Limited, Inc., 6.281%, 11/22/00 100,000 15,000 McLeodusa, Inc., 8.125%, 02/15/09 13,953 10,000 MGM Grand, Inc., 6.950%, 02/01/05 9,216 2,000,000 Monsanto Co., 6.500%, 12/01/18 1,765,310 9,000 Navistar International, 8.000%, 02/01/08 8,618 9,000 Polymer Group, Inc., 9.000%, 07/01/07 8,640 9,000 Silgan Holdings, Inc., 9.000%, 06/01/09 8,528 30,000 Sprint Capital Corp., 5.875%, 05/01/04 28,673 1,000,000 Sun Microsystems, 7.500%, 8/15/06 1,011,150 3,000,000 Sunamerica, Inc., 6.750%, 10/01/07 2,932,380 9,000 TV Guide, Inc., 8.125%, 03/01/09 8,820 15,000 Unisys Corp., 12.000%, 04/15/03 16,088 2,000,000 Whirlpool Corp, 9.000%, 03/01/03 2,115,320 6,000 World Color Press, Inc., 8.375%, 11/15/08 5,850 ------------ 26,753,937 ------------ U.S. GOVERNMENT & AGENCY BONDS 4.9% (pound) 2,000,000 FHLB, 5.625%, 06/10/03 3,177,079 FHLMC $ 3,000,000 6.450%, 04/29/09 2,848,590 3,000,000 8.250%, 09/15/03 2,872,980 FNMA The accompanying notes are an integral part of these financial statements. 32 FREMONT MUTUAL FUNDS FREMONT GLOBAL FUND OCTOBER 31, 1999 Shares/ Value Face Amount Security Description (Note 1) - -------------------------------------------------------------------------------- U.S. GOVERNMENT & AGENCY BONDS (CONT.) $ 3,000,000 5.750%, 02/15/08 $ 2,819,070 3,000,000 6.000%, 02/19/04 2,915,610 U.S. Treasury Inflationary Protection Note 1,773,584 3.625%, 7/15/02 1,762,499 2,037,648 3.875%, 01/15/09 1,998,806 980,000 U.S. Treasury Bond, 12.500%, 08/15/14 1,408,446 U.S. Treasury Notes + 150,000 5.500%, 02/29/00 150,141 + 4,200,000 5.625%, 05/15/08 4,052,328 340,000 6.000%, 8/15/04 340,796 5,000,000 6.500%, 10/15/06 5,088,300 4,000,000 6.625%, 05/15/07 4,104,360 60,000 9.250%, 02/15/16 76,350 ------------ 33,615,355 ------------ COLLATERALIZED MORTGAGE OBLIGATIONS 0.4% 199,006 Amresco Residential Securities Mortgage Loan, Series 1999-1 A, 5.876%, 06/25/30 199,006 200,000 Bank of America Mortgage Securities, 1999-5-A4, 6.500% 05/25/2029 183,500 200,000 Charter Financial, Inc., 6.590%, 02/25/02 199,750 300,000 Crusade Global Trust, 1999-1 A2, 5.774%, 02/15/30 300,094 284,605 FHLMC, 6.500%, 08/15/23 282,203 250,000 Government Lease Trust, 4.000%, 05/18/11 175,663 70,000 PSB Lending Home Loan Owner Trust, 6.830%, 05/20/18 69,741 289,482 Salomon Brothers Mortgage Securities, 5.683%, 06/25/29 289,391 100,000 Structured Asset Securities Corp., 1999-C3-A, 5.810%, 11/20/01 100,000 100,000 Salomon Borthers Mortgage Securities, 1999-AQ2-A1, 5.960%, 11/10/29 100,000 380,000 United Panam Mortgage Loan Asset Backed Certificates, 1999-2-A2, 5.866%, 10/25/29 380,000 ------------ 2,279,348 ------------ MORTGAGE BACKED OBLIGATIONS 0.1% GNMA I TBA 300,000 6.500%, 01/21/29 285,984 310,000 7.000%, 01/25/30 303,122 350,000 GNMA TBA, 7.000%, 01/22/29 342,234 ------------ 931,340 ------------ TOTAL BONDS (Cost $208,087,515) 195,355,141 ------------ OTHER SECURITIES 0.1% 2,000 Put Option on the U.K. Gilt, 6.000%, Strike @ 160.000, Exp. 12/10/00 160,868 48,000 Put Option on the U.S. Treasury Note, 5.250%, Strike @102.359, Exp. 12/06/99 130,128 13,000 Put Option on the U.S. Treasury Note, 5.625%, Strike @108.813, Exp. 12/06/99 149,474 3,900 Call Option on the Bundesrepublic Government Bond, 4.700%, Stike @65.000, Exp. 01/18/00 85,032 1,900 Put Option on the U.K. Gilt, 8.000%, Strike @ 170.000, Exp. 01/18/00 77,252 9,600 Call Option on the U.K. Gilt, 8.000%, Strike @ 95.000, Exp. 02/16/00 159,850 ------------ TOTAL OTHER SECURITIES (Cost $811,278) 762,604 ------------ Value Face Amount Security Description (Note 1) - -------------------------------------------------------------------------------- SHORT-TERM SECURITIES 16.8% $ 2,700,000 Abbey National North America Corp., CP, 5.350%(a), 12/15/99 $ 2,682,345 2,700,000 AT&T Corp., CP, 5.290%(a), 12/10/99 2,684,527 2,700,000 Atlantis One Funding, CP, 6.000%(a), 01/18/00 2,664,900 2,700,000 BP America, CP, 5.230%(a), 11/19/99 2,692,940 700,000 Ciesco LP, CP, 5.300%(a), 11/23/99 697,733 2,700,000 Du Pont (E.I.) de Nemours & Co., CP, 5.270%(a), 11/12/99 2,695,652 300,000 Du Pont (E.I.) de Nemours & Co., CP, 5.300%(a), 11/04/99 299,868 5,000,000 Fellbacher Bank, CP, 5.280%(a), 11/02/99 4,999,267 2,700,000 Ford Motor Credit Corp., CP, 5.280%(a), 12/16/99 2,682,180 6,000,000 Ford Motor Credit Corp., CP, 5.250%(a), 11/04/99 5,997,375 2,700,000 GE Captial Services, CP, 5.290%(a), 12/13/99 2,683,337 2,700,000 General Mills, Inc., CP, 5.270%(a), 12/03/99 2,687,352 2,700,000 General Motors Acceptance Corp., CP, 5.260%(a), 12/17/99 2,681,853 2,700,000 Halifax PLC, CP, 5.330%(a), 12/08/99 2,685,209 5,500,000 Inter Telecom Satellite, CP, 5.350%(a), 11/01/99 5,500,000 **5,000,000 Invensys PLC, CP, 5.270%(a), 11/05/99 4,997,072 2,700,000 KFW International Finance, CP, 5.280%(a), 11/01/99 2,700,000 **4,000,000 Koch Industries, Inc., CP, 5.230%(a), 11/03/99 3,998,838 2,700,000 Lucent Technologies, Inc., CP, 5.260%(a), 11/05/99 2,698,422 2,700,000 Merita NA, CP, 5.350%(a), 12/14/99 2,682,746 6,000,000 Merrill Lynch & Co., Inc., CP, 5.250%(a), 11/08/99 5,993,875 4,000,000 Merrill Lynch & Co., Inc., CP, 5.329%(a), 11/09/99 3,995,271 **3,000,000 Queen's Health Systems, CP, 5.330%(a), 11/04/99 2,998,668 **6,000,000 Queen's Health Systems, CP, 5.310%(a), 11/10/99 5,992,035 1,000,000 SBC Communications, CP, 5.290%(a), 11/10/99 998,677 16,500,000 UBS, Inc., CP, 5.310%(a), 11/01/99 16,500,000 + 1,460,000 U.S. Treasury Bill, 4.640%, 12/16/99 1,451,696 2,700,000 Xerox Corp., CP, 5.280%(a), 11/19/99 2,692,872 353,447 Repurchase Agreement, State Street Bank and Trust Co., 5.050%, 11/01/99 (Maturity Value $353,595) (Cost $353,447) Collateral: FNMA, 5.300%, 01/08/01 353,447 545,048 Repurchase Agreement, State Street Bank and Trust Co., 5.050%, 11/01/99 (Maturity Value $545,278) (Cost $545,048) Collateral: FHLB, 0.000%, 01/28/04 545,048 353,512 Repurchase Agreement, State Street Bank and Trust Co., 5.050%, 11/01/99 (Maturity Value $318,029) (Cost $353,512) Collateral: FHLB, 5.250%%, 08/24/01 353,512 476,644 Repurchase Agreement, State Street Bank and Trust Co., 5.050%, 11/01/99 (Maturity Value $476,845) (Cost $476,644) Collateral: FHLB, 5.450%, 01/28/04 476,644 The accompanying notes are an integral part of these financial statements. FREMONT MUTUAL FUNDS 33 FREMONT GLOBAL FUND OCTOBER 31, 1999 Value Face Amount Security Description (Note 1) - -------------------------------------------------------------------------------- SHORT-TERM SECURITIES (CONT.) $ 434,693 Repurchase Agreement, State Street Bank and Trust Co., 5.050%, 11/01/99 (Maturity Value $434,876) (Cost $434,693) Collateral: FHLMC, 5.250%, 02/16/01 $ 434,693 482,663 Repurchase Agreement, State Street Bank and Trust Co., 5.050%, 11/01/99 (Maturity Value $482,866) (Cost $482,663) Collateral: FHLB, 6.315%, 08/24/01 482,663 7,964,278 Repurchase Agreement, State Street Bank and Trust Co., 5.050%, 11/01/99 (Maturity Value $7,967,630) (Cost $7,964,278) Collateral: FHLB, 5.450%, 01/28/04 7,964,278 2,605,954 Repurchase Agreement, State Street Bank and Trust Co., 5.050%, 11/01/99 (Maturity Value $1,572,493) (Cost $2,605,954) Collateral: FNMA, 6.000%, 09/24/01 2,605,954 ------------ TOTAL SHORT-TERM SECURITIES (Cost $115,250,949) 115,250,949 ------------ TOTAL INVESTMENTS (Cost $650,125,674), 101.2% 694,766,430 ------------ OTHER ASSETS AND LIABILITIES, NET, (1.2)% (7,958,412) ------------ NET ASSETS, 100.0% $686,808,018 ============ The accompanying notes are an integral part of these financial statements. 34 FREMONT MUTUAL FUNDS FREMONT INTERNATIONAL GROWTH FUND OCTOBER 31, 1999 STATEMENT OF INVESTMENTS IN SECURITIES AND NET ASSETS Country Value Shares Security Description Code (Note 1) - -------------------------------------------------------------------------------- STOCKS 87.7% BUSINESS EQUIPMENT & SERVICES 2.0% 12,200 Teleglobe, Inc. CN $ 288,561 7,000 Fujitsu Ltd. JP 210,961 * 118 Societe Generale de Surveillance Holdings SA (Bearer Shares) SZ 128,716 120,900 Invensys PLC UK 595,140 ------------ 1,223,378 ------------ CAPITAL GOODS 5.1% 27,000 Bombardier, Inc. (Class B) CN 476,212 8,600 Siemens AG GM 770,693 8,000 Fuji Machine Manufacturing Co. Ltd. JP 372,397 * 47,000 Mitsubishi Heavy Industries JP 184,499 7,000 Murata Manufacturing Co. Ltd. JP 900,278 11,000 THK Co. Ltd. JP 360,015 ------------ 3,064,094 ------------ CONSUMER DURABLES 6.8% 7,800 Bayerische Motoren Werke AG GM 250,818 2,000 DaimlerChrysler AG GM 156,247 9,920 Fiat SPA IT 314,806 * 52,000 Mitsubishi Motors Corp. JP 270,007 31,000 Nikon Corp. JP 737,883 3,100 Nintendo Co. Ltd. JP 492,418 * 43,000 Nissan Motor Co. Ltd. JP 257,942 6,300 Sony Corp. JP 983,185 400 Sony Corp., ADR JP 63,900 19,000 Suzuki Motor Co. Ltd. JP 288,857 15,600 GKN PLC UK 250,120 ------------ 4,066,183 ------------ CONSUMER NON-DURABLES 7.1% 45,463 Coca-Cola Amatil Ltd. AU 140,408 500 Christian Dior SA FR 89,721 1,100 Groupe Danone FR 281,235 200 LVMH FR 60,517 3,600 Societe BIC SA FR 176,490 16,000 Asahi Breweries Ltd. JP 227,738 8,000 Kao Corp. JP 244,169 3,800 Sony Music Entertainment (Japan), Inc. JP 495,652 6,000 Uni-Charm Corp. JP 350,705 9,000 PanAmerican Beverages (Class A) MX 144,563 7,000 Heineken NV NL 357,861 1,300 Heineken Holding NV (Class A) NL 47,285 4,300 Orkla ASA (Series A) NO 60,125 * 614 Orkla ASA (Series A)-(Rights) NO 8,099 25,795 South African Breweries PLC SA 225,929 168 Compagnie Financiere Richemont AG SZ 321,472 100 Nestle SA (Registered Shares) SZ 193,192 65,300 Cadbury Schweppes PLC UK 426,089 423 Reckitt & Coleman PLC UK 5,138 29,200 Tate & Lyle PLC UK 191,253 22,400 Unilever PLC UK 207,830 ------------ 4,255,471 ------------ Country Value Shares Security Description Code (Note 1) - -------------------------------------------------------------------------------- CONSUMER SERVICES 4.0% 29,700 News Corp. Ltd. AU $ 214,911 20,300 The Thompson Corp. CN 592,595 5,400 Lagardere S.C.A. FR 219,189 1,000 Societe Television Francaise 1 FR 314,181 1,400 Societe Europeene des Satellites LU 178,598 15,000 Singapore Press Holdings Ltd. SG 257,298 27,600 EMI Group PLC UK 217,064 19,000 Reuters Group PLC UK 175,660 4,166 Reuters Group PLC, ADR UK 230,432 ------------ 2,399,928 ------------ ENERGY 3.0% 59,579 Broken Hill Proprietary Co. Ltd. AU 616,147 50,800 Santos Ltd. AU 130,634 2,000 Total Cie Francaise des Petroles SA (Class B) FR 270,955 71,400 ENI SPA IT 418,540 19,000 Sasol Ltd. SA 130,842 27,300 Shell Transport & Trading Co. UK 209,320 ------------ 1,776,438 ------------ FINANCIAL SERVICES 12.3% 889 Australia & New Zealand Banking Group Ltd. AU 5,871 43,368 QBE Insurance Group Ltd. AU 181,259 34,768 Westpac Banking Corp. Ltd. AU 223,230 10,000 Uniao de Bancos Brasileiros SA, GDR BR 231,250 18,000 Bank of Nova Scotia CN 411,065 5,900 Clarica Life Insurance Co. CN 95,439 * 600 Fairfax Financial Holdings Ltd. CN 86,454 200 Royal Bank of Canada CN 8,625 2,000 Banque Nationale de Paris (BNP) FR 176,068 1,900 Compagnie Financiere de Paribas FR 198,314 3,344 Deutsche Bank AG GM 238,929 * 3,600 Dresdner Bank AG GM 185,219 6,000 Dresdner Bank AG (Warrants) GM 142,520 13,700 Assicurazioni Generali SPA IT 440,539 550 Aiful Corp. JP 85,517 43,000 Mitsui Marine and Fire Insurance Co. Ltd. JP 285,181 4,000 Nichiei Co. Ltd. (Kyoto) JP 207,314 1,400 Orix Corp. JP 188,118 50,000 Sakura Bank Ltd. JP 429,984 700 Shohkoh Fund & Co. Ltd. JP 428,640 15,000 The Nomura Securities Co. Ltd. JP 247,769 13,920 ABN Amro Holding NV NL 337,398 9,252 Aegon NV NL 855,947 3,000 ING Groep NV NL 177,375 21,050 DBS Group Holdings Ltd. SG 238,182 3,600 Banco Popular Espanol SA SP 242,911 12,600 ForeningSparbanken AB (Series A) SW 201,092 51 Schweizerische Rueckversicherungs- Gesellschaft (Swiss Registered) SZ 105,901 8,700 Barclays PLC UK 266,968 10,500 Lloyds TSB Group PLC UK 145,138 42,576 Royal & Sun Alliance Insurance Group PLC UK 290,058 ------------ 7,358,275 ------------ The accompanying notes are an integral part of these financial statements. FREMONT MUTUAL FUNDS 35 FREMONT INTERNATIONAL GROWTH FUND OCTOBER 31, 1999 Country Value Shares Security Description Code (Note 1) - -------------------------------------------------------------------------------- HEALTH CARE 5.2% * 12,580 Sanofi Synthelabo SA FR $ 556,387 5,000 Takeda Chemical Industries JP 287,456 318 Novartis AG (Registered Shares) SZ 476,436 18,767 AstraZeneca Group PLC UK 846,090 9,000 Glaxo Wellcome PLC UK 265,672 15,461 AstraZeneca Group PLC, ADR US 707,340 ------------ 3,139,381 ------------ MULTI-INDUSTRY 2.4% 4,175 Preussag AG GM 226,468 43,000 Hutchison Whampoa Ltd. HK 431,716 182,000 Singapore Technologies Engineering Ltd. SG 263,990 53,800 TI Group PLC UK 364,314 43,300 Tomkins PLC UK 145,716 ------------ 1,432,204 ------------ RAW MATERIALS 5.2% 37,600 WMC Ltd. AU 161,470 16,700 Upm-Kymmene Oyj FI 528,204 1,500 Compagnie de Saint-Gobain FR 260,939 5,500 Pechiney SA FR 308,488 * 5,400 Degussa-Huels AG GM 204,387 3,200 Henkel KGaA GM 216,933 19,000 Mitsui Chemicals, Inc. JP 189,653 6,469 DSM NV NL 245,530 4,790 Pohang Iron & Steel Co. Ltd., ADR SK 159,866 1,319 Holderbank Financiere Glarus AG SZ 436,835 9,600 BOC Group PLC UK 205,910 95,100 Corus Group PLC UK 180,534 ------------ 3,098,749 ------------ RETAIL 2.3% 55,109 Coles Myer Ltd. AU 274,287 1,500 Carrefour SA FR 278,335 12,000 Jusco Co. Ltd. JP 279,873 10,000 Mycal Corp. JP 47,413 13,800 Dixons Group PLC UK 244,735 21,600 Kingfisher PLC UK 236,264 ------------ 1,360,907 ------------ SHELTER 0.4% * 11,100 Thyssen Krupp AG GM 260,971 ------------ 260,971 ------------ TECHNOLOGY 19.3% * 5,400 Newbridge Networks Corp. CN 105,152 400 Nortel Networks Corp. CN 24,618 12,300 Nokia AB, ADR FI 1,421,419 1,200 Nokia Oyj FI 137,662 * 1,600 Epcos AG GM 65,755 60,000 Johnson Electric Holdings Ltd. HK 324,366 5,810 Advantest Corp. JP 875,487 4,000 Fanuc Ltd. JP 310,970 3,700 Hirose Electronics JP 645,964 2,300 Keyence Corp. JP 616,998 8,000 Meitec Corp. JP 300,221 43,000 NEC Corp. JP 870,813 3,000 Rohm Co. Ltd. JP 673,769 Shares/ Country Value Face Amount Security Description Code (Note 1) - -------------------------------------------------------------------------------- TECHNOLOGY (CONT.) 14,000 Tokyo Electron Ltd. JP $ 1,163,643 41,000 Toshiba Corp. JP 258,144 * 11,900 ASM Lithography Holding NV NL 861,039 4,500 Samsung Electro-Machanics Co. SK 217,591 4,410 Samsung Electronics, GDR SK 373,748 100 Telefonaktiebolaget LM Ericsson (Class B) SW 4,167 8,900 Telefonaktiebolaget LM Ericsson, ADR SW 380,475 33,680 Asustek Computer, Inc. TW 474,888 * 25,338 Taiwan Semiconductor Manufacturing Co. Ltd., ADR TW 877,328 6,700 STMicroelectronics NV (New York Shares) US 608,863 ------------ 11,593,080 ------------ UTILITIES 12.6% 10,600 Deutsche Telekom GM 490,049 10,700 Mannesmann AG GM 1,654,924 80,000 Hong Kong Telecommunications HK 182,778 * 5,000 Bord Telecom Eireann PLC IR 20,862 63,000 Telecom Italia Mobile (TIM) SPA IT 394,540 30,000 Telecom Italia Mobile (TIM) SPA (Savings Shares) IT 104,376 63,200 Telecom Italia SPA IT 311,170 14,334 Telecom Italia SPA (Savings Shares) IT 124,072 57 NTT Mobile Communication Network, Inc. (NTT DoCoMo) JP 1,515,405 8,800 Telefonos de Mexico SA (Class L), ADR MX 752,400 2,000 Portugal Telecom SA PT 89,405 2,000 Telecel-Comunicacoes Pessoais SA PT 260,201 * 31,140 Telefonica SA SP 513,475 1,646 Swisscom AG SZ 502,410 * 9,800 COLT Telecom Group PLC UK 293,475 * 14,600 Orange PLC UK 363,307 ------------ 7,572,849 ------------ TOTAL STOCKS (Cost $40,821,862) 52,601,908 ------------ SHORT-TERM SECURITIES 11.5% $ 6,912,608 Repurchase Agreement, State Street Bank and Trust Co., 5.050%, 11/01/99 (Maturity $6,915,517) (Cost $6,912,608) Collateral: FHLB, 5.450%, 01/28/04 6,912,608 ------------ TOTAL SHORT-TERM SECURITIES (Cost $6,912,608) 6,912,608 ------------ TOTAL INVESTMENTS (Cost $47,734,470), 99.2% 59,514,516 ------------ OTHER ASSETS AND LIABILITIES, NET, 0.8% 459,143 ------------ NET ASSETS, 100.0% $ 59,973,659 ============ The accompanying notes are an integral part of these financial statements. 36 FREMONT MUTUAL FUNDS FREMONT EMERGING MARKETS FUND OCTOBER 31, 1999 STATEMENT OF INVESTMENTS IN SECURITIES AND NET ASSETS Country Value Shares Security Description Code (Note 1) - -------------------------------------------------------------------------------- STOCKS 96.3% BUSINESS EQUIPMENT & SERVICES 1.4% 196,700 ITE Group PLC UK $ 164,881 ------------ 164,881 ------------ CAPITAL GOODS 1.3% * 6,000,000 Eregli Demir ve Celik Fabrikalari T.A.S. TU 149,760 ------------ 149,760 ------------ CONSUMER DURABLES 3.4% 30,500 Tata Engineering and Locomotive Co. Ltd. IN 195,200 6,200 LG Electronics SK 203,135 ------------ 398,335 ------------ CONSUMER NON-DURABLES 1.8% 17,000 Companhia Cervejaria Brahma, ADR BR 212,500 ------------ 212,500 ------------ CONSUMER SERVICES 1.8% * 5,000 Grupo Televisa SA, GDR MX 212,500 ------------ 212,500 ------------ ENERGY 7.5% 19,500 Petroleo Brasileiro SA, ADR BR 311,674 3,400 Lukoil Holding, ADR RU 106,250 12,000 Surgutneftegaz, ADR RU 99,900 30,000 Sasol Ltd. SA 206,593 * 20,000 PTT Exploration and Production Public Co. Ltd. (Foreign Registered) TH 146,095 ------------ 870,512 ------------ FINANCIAL SERVICES 5.5% * 15,300 Komercni Banka AS, GDR CZ 129,401 * 58,300 Grupo Financiero Banamex Accival SA MX 144,040 65,000 Standard Bank Investment Corp. Ltd. SA 222,222 * 8,900 Kookmin Bank SK 138,749 ------------ 634,412 ------------ HEALTH CARE 4.0% 4,000 Gedeon Richter Ltd., GDR HU 182,517 14,000 Ranbaxy Laboratories Ltd., GDR IN 281,400 ------------ 463,917 ------------ MULTI-INDUSTRY 2.6% 55,300 ALFA SA de CV (Class A) MX 210,683 450,000 Enka Holding Yatirim AS TU 88,920 ------------ 299,603 ------------ RAW MATERIALS 20.2% 10,000 Companhia Vail do Rio Doce, ADR BR 195,027 45,000 Cemex SA MX 201,106 18,000 KGHM Polska Miedz SA, GDR PO 226,800 4,800 Anglo American PLC SA 255,531 24,400 Sappi Ltd. SA 202,191 10,500 Pohang Iron & Steel Co. Ltd. SK 350,438 * 741,600 Phoenix Pulp & Paper Public Co. Ltd. TH 499,459 24,000 China Steel Corp., GDR TW 403,800 ------------ 2,334,352 ------------ Shares/ Country Value Face Amount Security Description Code (Note 1) - -------------------------------------------------------------------------------- SHELTER 1.9% * 571,600 Golden Land Property Development Public Co. Ltd. TH $ 222,096 ------------ 222,096 ------------ TECHNOLOGY (COMPONENTS) 13.1% * 486,000 Great Wall Technology Co. CH 297,142 4,700 Chartered Semiconductor Manufacturing, ADR SG 155,981 * 1,373,000 Vestel Elektronik Sanayi ve Ticaret AS TU 168,494 20,000 Asustek Computer, Inc. TW 209,962 * 30,000 Hon Hai Precision Industry TW 205,233 * 110,000 Siliconware Precision Industries Co. TW 197,667 * 64,000 Taiwan Semiconductor Manufacturing Co. TW 284,489 ------------ 1,518,968 ------------ TECHNOLOGY (EQUIPMENT) 4.4% 5,950 Samsung Electronics Ltd., GDR SK 504,263 ------------ 504,263 ------------ TECHNOLOGY (SOFTWARE) 6.6% 2,700 Infosys Technologies Ltd., ADR IN 407,700 3,200 Pentafour Software & Exports Ltd. IN 91,200 * 520 Satyam Infoway Ltd., ADR IN 20,150 * 50,000 Dimension Data Holdings Ltd. SA 242,572 ------------ 761,622 ------------ UTILITIES 20.8% 3,000 Telecomunicacoes Brasileiras SA, ADR BR 233,625 7,500 Telesp Celular Participacoes SA, ADR BR 184,688 48,000 China Telecom (Hong Kong) Ltd. HK 164,345 12,500 Matav RT, ADR HU 360,156 20,000 Videsh Sanchar Nigam Ltd., GDR IN 319,500 10,000 Partner Communications Co. Ltd., ADR IS 157,500 * 12,300 Grupo Iusacell SA (Series L), ADR MX 146,064 3,700 Telefonos de Mexico SA (Class L), ADR MX 316,350 6,500 Philippine Long Distance Telephone Co., ADR PH 133,656 9,400 Korea Electric Power Corp., ADR SK 148,050 19,000 SK Telecom Co. Ltd., ADR SK 248,188 ------------ 2,412,122 ------------ TOTAL STOCKS (Cost $9,715,349) 11,159,843 ------------ SHORT-TERM SECURITIES 5.4% $ 629,185 Repurchase Agreement, State Street Bank and Trust Co., 5.050%, 11/01/99 (Maturity $629,450) (Cost $629,185) Collateral: FFCB, 6.000%, 10/01/01 629,185 ------------ TOTAL SHORT-TERM SECURITIES (Cost $629,185) 629,185 ------------ TOTAL INVESTMENTS (Cost $10,344,534), 101.7% 11,789,028 ------------ OTHER ASSETS AND LIABILITIES, NET, (1.7)% (201,060) ------------ NET ASSETS, 100.0% $ 11,587,968 ============ The accompanying notes are an integral part of these financial statements. FREMONT MUTUAL FUNDS 37 FREMONT U.S. MICRO-CAP FUND OCTOBER 31, 1999 STATEMENT OF INVESTMENTS IN SECURITIES AND NET ASSETS Value Shares Security Description (Note 1) - -------------------------------------------------------------------------------- STOCKS 83.9% BUSINESS EQUIPMENT & SERVICES 17.4% * 228,800 Arguss Holdings, Inc. $ 3,374,800 * 477,200 Boston Communications Group, Inc. 2,415,825 * 140,700 Computer Outsourcing Services, Inc. 1,442,175 * 84,000 Corporate Executive Board Co. 3,171,000 * 305,700 Datalink Corp. 4,031,419 * 11,400 Digital Lava, Inc. 34,200 * 131,400 internet.com LLC 2,628,000 * 123,800 Net Perceptions, Inc. 1,980,800 * 445,300 NewsEdge Corp. 4,842,638 * 270,100 NuCO2, Inc. 1,890,700 * 481,400 Rare Medium Group, Inc. 7,100,650 * 95,400 RoweCom, Inc. 2,534,063 * 200,400 SBA Communications Corp. 1,953,900 * 311,700 Shuffle Master, Inc. 2,766,338 * 662,000 TeleTech Holdings, Inc. 9,392,125 * 80,800 Winfield Capital Corp. 1,429,150 * 42,600 Zomax, Inc. 1,187,475 ------------ 52,175,258 ------------ CAPITAL GOODS 2.3% * 226,900 Adept Technology, Inc. 1,559,937 * 304,300 IMPCO Technologies, Inc. 3,898,844 * 626,400 Miller Industries, Inc. 1,526,850 ------------ 6,985,631 ------------ CONSUMER DURABLES 0.6% * 168,100 Jore Corp. 1,954,163 ------------ 1,954,163 ------------ CONSUMER NON-DURABLES 6.2% * 125,600 Audiovox Corp. (Class A) 2,559,100 * 316,500 McNaughton Apparel Group, Inc. 2,512,219 * 497,000 Sterling Vision, Inc. 931,875 * 325,100 Steven Madden Ltd. 3,982,475 * 359,100 The Topps Company, Inc. 3,523,669 * 185,200 Wesley Jessen VisionCare, Inc. 4,977,250 ------------ 18,486,588 ------------ CONSUMER SERVICES 5.8% * 240,100 American Classic Voyages Co. 6,002,500 201,600 Cash America International, Inc. 1,902,600 * 163,900 Cinar Corp. (Class B) 2,847,763 * 49,100 First Cash, Inc. 460,313 * 363,300 Homeseekers.com, Inc. 3,269,700 * 243,300 ZipLink, Inc. 2,889,188 ------------ 17,372,064 ------------ ENERGY 0.9% * 141,100 UTI Energy Corp. 2,707,356 ------------ 2,707,356 ------------ Value Shares Security Description (Note 1) - -------------------------------------------------------------------------------- HEALTH CARE 10.5% * 224,650 ArthroCare Corp. $ 16,287,125 * 154,600 Cytyc Corp. 6,145,350 * 78,000 Fusion Medical Technologies, Inc. 862,875 * 374,300 Gene Logic, Inc. 2,409,556 * 493,300 Genelabs Technologies, Inc. 1,587,809 * 260,900 Mediconsult.com, Inc. 1,549,094 * 131,900 NeoPharm, Inc. 1,813,625 * 110,000 Women First HealthCare, Inc. 818,125 ------------ 31,473,559 ------------ RAW MATERIALS 0.5% 258,950 Northern Technologies International Corp.(b) 1,553,700 ------------ 1,553,700 ------------ RETAIL 8.0% * 215,900 Buca, Inc. 2,644,775 * 249,000 David's Bridal, Inc. 2,474,438 187,900 Deb Shops, Inc. 3,945,900 * 392,800 Genesco, Inc. 5,204,600 * 179,100 NPC International, Inc. 2,149,200 * 373,400 Rent-Way, Inc. 6,207,775 * 131,800 Uno Restaurant Corp. 1,507,463 ------------ 24,134,151 ------------ SHELTER 0.2% * 98,000 Modtech Holdings, Inc. 520,625 ------------ 520,625 ------------ TECHNOLOGY (COMPONENTS) 7.3% * 241,200 Anaren Microwave, Inc. 8,261,100 * 351,600 California Amplifier, Inc. 6,636,450 * 181,500 Elantec Semiconductor, Inc. 3,879,563 * 32,700 Kopin Corp. 1,373,400 * 239,600 Spectrum Control, Inc. 1,856,900 ------------ 22,007,413 ------------ TECHNOLOGY (EQUIPMENT) 17.4% * 212,700 Ancor Communcations, Inc. 6,739,931 * 253,150 Information Resource Engineering, Inc. 4,556,700 * 103,400 Integrated Measurement Systems, Inc. 1,260,188 * 166,900 MTI Technology Corp. 2,826,869 * 337,350 Netopia, Inc. 18,006,056 * 233,800 Orckit Communications Ltd. 6,444,113 * 376,300 Photon Dynamics, Inc. 11,383,075 * 232,800 Princeton Video Image, Inc. 1,207,650 ------------ 52,424,582 ------------ TECHNOLOGY (SOFTWARE) 6.8% * 317,500 Exigent International, Inc.(b) 1,111,250 * 349,000 MDSI Mobile Data Solutions, Inc. 4,973,250 * 218,800 New Era of Networks, Inc. 7,097,319 * 197,000 Puma Technology, Inc. 7,289,000 ------------ 20,470,819 ------------ TOTAL STOCKS (Cost $185,189,077) 252,265,909 ------------ The accompanying notes are an integral part of these financial statements. 38 FREMONT MUTUAL FUNDS FREMONT U.S. MICRO-CAP FUND OCTOBER 31, 1999 Value Shares Security Description (Note 1) - -------------------------------------------------------------------------------- SHORT-TERM SECURITIES 11.9% $ 6,200,000 American Honda Finance Corp., CP, 5.330%, 11/01/99 $ 6,200,000 5,000,000 Fellbacher Bank, CP, 5.280%(a), 11/02/99 4,999,267 6,000,000 Merrill Lynch & Co., Inc., CP, 5.320%(a), 11/03/99 5,998,227 6,000,000 Merrill Lynch & Co., Inc., CP, 5.320%(a), 11/05/99 5,996,453 6,000,000 Mobil Corp., CP, 5.300%(a), 11/08/99 5,993,816 4,000,000 Queen's Health Systems, CP, 5.310%(a), 11/04/99 3,998,230 2,500,000 Union Bank of Switzerland Finance, Inc., CP, 5.310%(a), 11/01/99 2,500,000 13,603 Repurchase Agreement, State Street Bank and Trust Co., 5.050%, 11/01/99 (Maturity Value $13,608) (Cost $13,603) Collateral: FNMA, 5.800%, 03/15/02 13,603 ------------ TOTAL SHORT-TERM SECURITIES (Cost $35,699,596) 35,699,596 ------------ TOTAL INVESTMENTS (Cost $220,888,673), 95.8% 287,965,505 ------------ OTHER ASSETS AND LIABILITIES, NET, 4.2% 12,537,154 ------------ NET ASSETS, 100% $300,502,659 ============ The accompanying notes are an integral part of these financial statements. FREMONT MUTUAL FUNDS 39 FREMONT U.S. SMALL CAP FUND OCTOBER 31, 1999 STATEMENT OF INVESTMENTS IN SECURITIES AND NET ASSETS Value Shares Security Description (Note 1) - -------------------------------------------------------------------------------- STOCKS 87.4% BUSINESS EQUIPMENT & SERVICES 13.5% 18,600 National Data Corp. $ 446,400 * 6,792 Nova Corp. 176,592 * 18,300 Pinnacle Holdings, Inc. 439,200 * 55,200 Rare Medium Group, Inc. 814,200 * 138,600 TeleTech Holdings, Inc. 1,966,388 * 7,900 Winfield Capital Corp. 139,731 ------------ 3,982,511 ------------ CONSUMER NON-DURABLES 3.3% * 16,300 Fairfield Communities, Inc. 199,675 * 198,500 Hanover Direct, Inc. 533,469 * 29,500 NBTY, Inc. 237,844 ------------ 970,988 ------------ CONSUMER SERVICES 6.5% * 10,700 24/7 Media, Inc. 462,106 * 25,050 American Classic Voyages Co. 626,250 * 48,000 Cinar Corp. (Class B) 834,000 ------------ 1,922,356 ------------ ENERGY 1.2% * 20,300 Global Industries Ltd. 162,400 * 8,600 Nabors Industries, Inc. 195,113 ------------ 357,513 ------------ HEALTH CARE 7.0% * 10,700 Advance Paradigm, Inc. 456,088 * 11,000 Cytyc Corp. 437,250 * 6,600 Gilead Science, Inc. 417,038 * 40,700 Mediconsult.com, Inc. 241,656 * 12,000 NeoPharm, Inc. 165,000 * 15,700 Oxford Health Plans, Inc. 185,456 * 16,500 Sunrise Assisted Living, Inc. 181,500 ------------ 2,083,988 ------------ RETAIL 6.6% * 8,800 American Eagle Outfitters 376,750 * 7,400 AnnTaylor Stores Corp. 314,963 * 4,600 Outback Steakhouse, Inc. 105,800 * 35,100 Rent-Way, Inc. 583,538 * 13,700 Zales Corp. 573,688 ------------ 1,954,739 ------------ TECHNOLOGY (COMPONENTS) 12.1% * 29,000 Anaren Microwave, Inc. 993,250 28,800 Cabletron Systems 477,000 * 9,700 Emulex Corp. 1,512,595 * 7,400 Micrel, Inc. 402,375 * 3,000 Powerwave Technologies, Inc. 195,188 ------------ 3,580,408 ------------ Shares/ Value Face Amount Security Description (Note 1) - -------------------------------------------------------------------------------- TECHNOLOGY (EQUIPMENT) 12.9% * 20,400 Ancor Communications, Inc. $ 646,425 * 5,200 ANTEC Corp. 252,200 27,000 MTI Technology Corp. 457,313 * 30,500 Netopia, Inc. 1,627,938 * 5,700 Netro Corp. 130,031 * 25,600 Orckit Communications Ltd. 705,600 ------------ 3,819,507 ------------ TECHNOLOGY (SOFTWARE) 20.2% * 72,300 ACTV, Inc. 1,143,244 * 1,050 Critical Path, Inc. 48,038 * 14,100 Genesys Telecommunications Laboratories, Inc. 692,663 * 28,700 New Era of Networks, Inc. 930,956 * 11,600 PC-Tel, Inc. 348,000 * 15,300 Peregrine Systems, Inc. 671,288 * 7,000 Pixar, Inc. 266,438 * 4,700 Quest Software, Inc. 346,625 * 19,700 SmartForce 406,313 * 9,200 VeriSign, Inc. 1,136,200 ------------ 5,989,765 ------------ UTILITIES 4.1% * 20,800 Calpine Corp. 1,198,593 ------------ 1,198,593 ------------ TOTAL STOCKS (Cost $18,859,332) 25,860,368 ------------ SHORT-TERM SECURITIES, 15.3% $ 4,513,744 Repurchase Agreement, State Street Bank & Trust Co., 5.050%, 11/01/99 (Maturity Value $4,515,644) (Cost $4,513,744) Collateral: FHLB, 5.450%, 01/28/04 4,513,744 ------------ TOTAL SHORT-TERM SECURITIES (Cost $4,513,744) 4,513,744 ------------ TOTAL INVESTMENTS (Cost $23,373,076), 102.7% 30,374,112 ------------ OTHER ASSETS AND LIABILITIES, NET, (2.7)% (795,218) ------------ NET ASSETS, 100.0% $ 29,578,894 ============ The accompanying notes are an integral part of these financial statements. 40 FREMONT MUTUAL FUNDS FREMONT GROWTH FUND OCTOBER 31, 1999 STATEMENT OF INVESTMENTS IN SECURITIES AND NET ASSETS Value Shares Security Description (Note 1) - -------------------------------------------------------------------------------- STOCKS 97.9% BUSINESS EQUIPMENT & SERVICES 3.8% 19,000 America Online, Inc. $ 2,464,062 34,000 GATX Corp. 1,128,375 38,000 Insituform Technologies, Inc. 909,625 72,900 Republic Services, Inc. 893,025 ------------ 5,395,087 ------------ CAPITAL GOODS 4.2% 44,800 General Electric Co. 6,073,200 ------------ 6,073,200 ------------ CONSUMER DURABLES 2.9% 74,300 Ford Motor Co. 4,077,213 ------------ 4,077,213 ------------ CONSUMER NON-DURABLES 4.8% 20,900 Anheuser Busch Cos., Inc. 1,500,882 15,300 Coca-Cola Co. 902,700 12,000 Eastman Kodak Co. 827,250 21,600 Pepsico, Inc. 749,250 48,800 Philip Morris Cos., Inc. 1,229,150 5,400 Procter & Gamble Co. 566,325 20,000 Smithfield Foods, Inc. 455,000 18,000 Suiza Foods Corp. 649,125 ------------ 6,879,682 ------------ CONSUMER SERVICES 1.9% 14,000 CBS Corp. 683,375 17,000 Royal Caribbean Cruises Ltd. 902,062 8,600 Viacom, Inc. (Class B) 384,850 42,400 Wiley (John) & Sons (Class A) 715,500 ------------ 2,685,787 ------------ ENERGY 7.3% 30,000 Apache Corp. 1,170,000 10,000 El Paso Energy Corp. 410,000 33,100 Exxon Corp. 2,451,469 95,000 KeySpan Corp. 2,671,875 37,000 MidAmerican Energy Holdings Co. 1,244,125 19,000 Texaco, Inc. 1,166,125 43,000 USX-Marathon Group 1,252,375 ------------ 10,365,969 ------------ Value Shares Security Description (Note 1) - -------------------------------------------------------------------------------- FINANCIAL SERVICES 17.0% 13,250 American International Group, Inc. $ 1,363,922 22,600 Associates First Capital Corp. 824,900 38,729 Bank of America Corp. 2,493,179 19,000 Bank One Corp. 713,687 22,000 Capital One Financial Corp. 1,166,000 13,000 Chase Manhattan Corp. 1,135,875 58,200 Citigroup, Inc. 3,150,075 9,200 Federal Home Loan Mortgage Corp. 497,375 41,300 Federal National Mortgage Association 2,921,975 25,600 Fleet Financial Group, Inc. 1,116,800 21,000 Lincoln National Corp. 968,625 35,850 MBNA Corp. 990,356 8,000 J. P. Morgan & Co., Inc. 1,047,000 15,700 Morgan Stanley, Dean Witter and Co. 1,731,906 19,000 PNC Bank Corp. 1,132,875 12,000 Providian Financial Corp. 1,308,000 15,000 Washington Mutual, Inc. 539,063 25,600 Wells Fargo Co. 1,225,600 ------------ 24,327,213 ------------ HEALTH CARE 10.0% 14,800 Abbott Laboratories 597,550 28,200 Bristol-Myers Squibb Co. 2,166,112 15,000 Cardinal Health, Inc. 646,875 27,000 Conseco, Inc. 656,438 18,600 Johnson & Johnson 1,948,350 16,200 Lilly (Eli) & Co. 1,115,775 16,247 McKesson HBOC, Inc. 325,955 26,000 Merck & Co. 2,068,625 53,600 Pfizer, Inc. 2,117,200 27,000 Schering Plough Corp. 1,336,500 15,400 Warner-Lambert Co. 1,229,113 ------------ 14,208,493 ------------ MULTI-INDUSTRY 1.2% 20,500 Allied-Signal, Inc. 1,167,219 7,000 Corning, Inc. 550,375 ------------ 1,717,594 ------------ RAW MATERIALS 1.9% 4,300 Dow Chemical Co. 508,475 31,550 Reliance Steel & Aluminum Co. 662,550 25,400 W.R. Grace & Co. 379,413 68,000 Worthington Industries, Inc. 1,130,500 ------------ 2,680,938 ------------ The accompanying notes are an integral part of these financial statements. FREMONT MUTUAL FUNDS 41 FREMONT GROWTH FUND OCTOBER 31, 1999 Value Shares Security Description (Note 1) - -------------------------------------------------------------------------------- RETAIL 8.5% 21,000 Abercrombie & Fitch Co. (Class A) $ 572,250 11,000 Best Buy Co., Inc. 611,187 12,200 Dayton-Hudson Corp. 788,425 36,000 Duane Reade, Inc. 967,500 25,000 Gap, Inc. 928,125 32,500 Home Depot, Inc. 2,453,750 18,600 Lowe's Cos., Inc. 1,023,000 15,600 Papa John's International, Inc. 583,050 18,000 Texas Industries, Inc. 644,625 64,200 Wal-Mart Stores, Inc. 3,639,338 ------------ 12,211,250 ------------ TECHNOLOGY (COMPONENTS) 3.8% 21,800 EMC Corp. 1,591,400 50,000 Intel Corp. 3,871,875 ------------ 5,463,275 ------------ TECHNOLOGY (EQUIPMENT) 11.9% 48,000 Boeing Co. 2,211,000 38,500 Compaq Computer Corp. 731,500 45,800 Dell Computer Corp. 1,837,725 13,400 Hewlett-Packard Co. 992,438 25,200 International Business Machines Corp. 2,479,050 39,600 Lucent Technologies, Inc. 2,544,300 10,000 Motorola, Inc. 974,375 5,000 QUALCOMM, Inc. 1,113,750 10,400 Sun Microsystems, Inc. 1,100,450 10,000 Tellabs, Inc. 632,500 15,000 Texas Instruments, Inc. 1,346,250 17,800 United Technologies Corp. 1,076,900 ------------ 17,040,238 ------------ TECHNOLOGY (SOFTWARE) 8.6 % 41,500 Cisco Systems, Inc. 3,071,000 15,600 Computer Associates International, Inc. 881,400 23,800 Compuware Corp. 661,938 68,200 Microsoft Corp. 6,312,763 28,150 Oracle Systems Corp. 1,338,884 ------------ 12,265,985 ------------ TRANSPORTATION 0.7% 30,800 Burlington Northern Sante Fe Corp. 981,750 ------------ 981,750 ------------ Shares/ Value Face Amount Security Description (Note 1) - -------------------------------------------------------------------------------- UTILITIES 9.4% 70,000 Azurix Corp. $ 984,375 22,400 AES Corp. 1,264,200 38,300 AT&T Corp. 1,790,525 19,200 Bell Atlantic Corp. 1,246,800 32,600 BellSouth Corp. 1,467,000 25,500 Coastal Corp. 1,074,187 11,900 GTE Corp. 892,500 32,900 MCI WorldCom, Inc. 2,823,231 19,000 Otter Tail Power Co. 798,000 21,500 SBC Communications, Inc. 1,095,156 ------------ 13,435,974 ------------ TOTAL STOCKS (Cost $112,145,392) 139,809,648 ------------ SHORT-TERM SECURITIES 2.0% $ 2,000,000 Novartis Finance Corp., CP, 5.350%(a), 11/01/99 2,000,000 + 250,000 U.S. Treasury Bill, 4.640%, 12/16/99 248,578 541,939 Repurchase Agreement, State Street Bank and Trust Co., 5.050%, 11/01/99 (Maturity Value $542,167) (Cost $541,939) Collateral: FNMA, 6.000%, 09/24/01 541,939 ------------ TOTAL SHORT-TERM SECURITIES (Cost $2,790,517) 2,790,517 ------------ TOTAL INVESTMENTS (Cost $114,935,909), 99.9% 142,600,165 ------------ OTHER ASSETS AND LIABILITIES, NET, 0.1% 158,698 ------------ NET ASSETS, 100.0% $142,758,863 ============ The accompanying notes are an integral part of these financial statements. 42 FREMONT MUTUAL FUNDS FREMONT REAL ESTATE SECURITIES FUND OCTOBER 31, 1999 STATEMENT OF INVESTMENTS IN SECURITIES AND NET ASSETS Value Shares Security Description (Note 1) - -------------------------------------------------------------------------------- STOCKS 90.2% REITs (APARTMENTS) 6.4% 16,600 Associated Estates Realty Corp. $ 143,175 12,315 Equity Residential Properties Trust 514,921 63,000 Walden Residential Properties, Inc. 1,350,563 ------------ 2,008,659 ------------ REITs (COMMUNITY CENTERS) 15.3% 14,100 Agree Realty Corp. 218,550 160,800 Burnham Pacific Properties, Inc. 1,608,000 71,800 Developers Diversified Realty Corp. 1,023,150 104,500 Malan Realty Investors, Inc. 1,358,500 44,400 Ramco-Gershenson Properties Trust 604,950 ------------ 4,813,150 ------------ REITs (DIVERSIFIED) 10.9% 53,400 Aegis Realty, Inc. 467,250 333,640 First Union Real Estate Investments 1,709,905 47,900 Glenborough Realty Trust, Inc. 625,694 4,000 Pacific Gulf Properties, Inc. 81,000 17,300 Vornado Realty Trust 548,194 ------------ 3,432,043 ------------ REITs (HEALTH CARE) 2.4% * 60,400 Brookdale Living Communities, Inc. 747,450 ------------ 747,450 ------------ REITs (HOTELS) 6.0% 17,500 FelCor Suite Hotels, Inc. 297,500 9,600 Host Marriot Corp. 86,400 116,100 Sunstone Hotel Investors, Inc. 1,110,206 50,000 Winston Hotels, Inc. 406,250 ------------ 1,900,356 ------------ REITs (MORTGAGE BACKED) 0.7% * 30,000 Chastain Capital Corp. 211,875 ------------ 211,875 ------------ REITs (OFFICE) 30.7% 377,400 Banyan Strategic Realty Trust 1,745,475 6,100 Boston Properties, Inc. 181,856 64,000 Brandywine Realty Trust 1,076,000 5,400 CarrAmerica Realty Corp. 120,150 100,900 Corporate Office Properties Trust 731,525 5,000 Corporate Office Properties Trust (Preferred B) 115,000 32,900 Equity Office Properties Trust 727,913 10,000 Highwoods Properties, Inc. 241,875 124,700 Koger Equity, Inc. 1,932,850 42,400 Mack-Cali Realty Corp. 1,091,800 48,300 Prentiss Properties Trust 1,035,431 16,200 Prime Group Realty Trust 232,875 23,900 SL Green Realty Corp. 434,681 ------------ 9,667,431 ------------ REITs (OFFICE/INDUSTRIAL) 5.1% 109,500 American Industrial Properties REIT 1,259,250 15,900 PS Business Parks, Inc. 359,738 ------------ 1,618,988 ------------ Shares/ Value Face Amount Security Description (Note 1) - -------------------------------------------------------------------------------- REITs (REGIONAL MALLS) 3.3% 70,200 Glimcher Realty Trust $ 1,039,838 ------------ 1,039,838 ------------ REITs (SELF STORAGE) 1.5% 20,000 Public Storage, Inc. 482,500 ------------ 482,500 ------------ NON-REITs (DIVERSIFIED) 5.2% * 35,000 Catellus Development Corp. 411,250 * 147,500 Wellsford Real Properties, Inc. 1,216,875 ------------ 1,628,125 ------------ NON-REITs (HOTELS) 0.8% * 100,000 Homestead Village, Inc. 262,500 ------------ 262,500 ------------ NON-REITs (OFFICE) 1.9% 33,300 TrizecHahn Corp. 616,048 ------------ 616,048 ------------ TOTAL STOCKS (Cost $30,568,428) 28,428,963 ------------ SHORT-TERM SECURITIES 9.6% $ 3,019,455 Repurchase Agreement, State Street Bank and Trust Co., 5.050%, 11/01/99 (Maturity Value $3,020,725) (Cost $3,019,455) Collateral: FNMA, 6.000%, 09/24/01 3,019,455 ------------ TOTAL SHORT-TERM SECURITIES (Cost $3,019,455) 3,019,455 ------------ TOTAL INVESTMENTS (Cost $33,587,883), 99.8% 31,448,418 ------------ OTHER ASSETS AND LIABILITIES, NET, 0.2% 50,794 ------------ NET ASSETS, 100.0% $ 31,499,212 ============ The accompanying notes are an integral part of these financial statements. FREMONT MUTUAL FUNDS 43 FREMONT BOND FUND OCTOBER 31, 1999 STATEMENT OF INVESTMENTS IN SECURITIES AND NET ASSETS
Coupon Maturity Value Face Amount Issuer Rate Date (Note 1) - ------------------------------------------------------------------------------------------------------------------------------ BONDS 117.7% FIXED RATE AND ADJUSTABLE RATE MORTGAGE SECURITIES 14.2% $ 411,536 FHLMC ................................................................ 6.500% 01/01/26 $ 396,873 121,941 FHLMC ................................................................ 6.500% 03/01/26 117,597 413,993 FHLMC ................................................................ 6.500% 04/01/26 399,242 212,385 FHLMC ................................................................ 6.500% 04/01/26 204,818 144,823 FHLMC ................................................................ 6.500% 04/01/26 139,663 136,730 FHLMC ................................................................ 6.500% 05/01/26 131,859 213,291 FHLMC ................................................................ 8.250% 08/01/17 220,266 4,280,000 FHLMC GOLD TBA ....................................................... 6.000% 01/19/30 3,987,088 3,200,000 FHLMC GOLD TBA ....................................................... 6.500% 01/19/30 3,062,000 280,659 FNMA ................................................................. 8.500% 05/01/25 290,744 302,157 FNMA ARM ............................................................. 7.356% 11/01/23 307,680 3,590,770 GNMA ................................................................. 6.000% 01/15/24 3,332,794 1,549,865 GNMA ................................................................. 6.000% 01/15/24 1,438,517 35,005 GNMA ................................................................. 6.500% 02/15/24 33,468 708,970 GNMA ................................................................. 6.500% 03/15/24 677,834 31,548 GNMA ................................................................. 6.500% 06/15/24 30,162 112,958 GNMA ................................................................. 8.000% 06/15/25 115,520 174,143 GNMA II ARM .......................................................... 6.125% 11/20/24 176,599 746,505 GNMA II ARM .......................................................... 6.125% 10/20/25 757,098 1,161,751 GNMA II ARM .......................................................... 6.125% 11/20/26 1,180,967 7,046,162 GNMA II ARM .......................................................... 6.125% 10/20/27 7,156,699 143,360 GNMA II ARM .......................................................... 6.375% 04/20/21 144,973 751,837 GNMA II ARM .......................................................... 6.375% 03/20/24 762,982 1,144,293 GNMA II ARM .......................................................... 6.625% 08/20/25 1,158,059 ------------ 26,223,502 ------------ COLLATERALIZED MORTGAGE OBLIGATIONS 44.2% 5,000,000 BA Mortgage Securities, Inc. CMO, 1998-4, PAC-1, REMIC ............... 6.600% 08/25/28 4,808,550 1,431,854 Chase Mortgage Finance Corp. CMO, 1993-H2-A4, REMIC .................. 7.000% 07/25/24 1,431,037 2,033,156 Chase Mortgage Finance Corp. CMO, 1995-A, Class A, REMIC ............. 6.205% 04/25/25 2,038,068 500,000 Chase Mortgage Finance Corp. CMO, 1998-S6-A17, REMIC ................. 6.750% 10/25/28 468,298 4,933,491 Countrywide Home Loans CMO, 1997-7-A3 ................................ 6.250% 08/25/14 4,635,804 817,519 FHLMC CMO, 1018 0Z, PAC-1 (11), REMIC ................................ 7.000% 11/15/20 814,502 5,301,000 FHLMC CMO, Series T-011-A5 SEQ ....................................... 6.500% 01/25/15 5,190,315 8,000,000 FHLMC CMO, Series T-011-A6 SEQ ....................................... 6.500% 09/25/18 7,739,680 15,000,000 FNMA CMO, 1992-131KA, PAC (11), REMIC ................................ 8.000% 01/25/22 15,289,397 200,000 FNMA CMO, 1993-11J, PAC, REMIC ....................................... 7.500% 02/25/08 203,583 8,649,649 FNMA CMO, 1993-21-Z .................................................. 7.200% 05/25/23 8,154,975 4,769,809 FNMA CMO, 1997-77-G .................................................. 6.500% 05/18/23 4,725,020 8,000,000 GNMA CMO, 1998-15-C, REMIC ........................................... 6.500% 06/20/28 7,223,488 749,069 Morgan Stanley Mortgage Trust CMO, 40-8, PAC (11), REMIC ............. 7.000% 07/20/21 747,929 1,998,391 Norwest Securities Corp. CMO, 1999-25-A4 ............................. 6.500% 10/25/29 1,842,886 4,900,000 PNC Mortgage Securities Corp. CMO, 1999-4-1A8, PAC (11) .............. 6.200% 06/25/29 4,718,504 10,000,000 Residential Funding Mortgage Securities I, Inc. CMO, 1997-S17-A5 ..... 7.000% 11/25/27 9,471,600 2,031,275 Securitized Asset Sales, lnc. CMO, 1993-2A9, PAC (11), REMIC ......... 6.200% 07/25/08 1,999,526 ------------ 81,503,162 ------------
The accompanying notes are an integral part of these financial statements. 44 FREMONT MUTUAL FUNDS FREMONT BOND FUND OCTOBER 31, 1999
Coupon Maturity Value Face Amount Issuer Rate Date (Note 1) - ------------------------------------------------------------------------------------------------------------------------------ CORPORATE BONDS 44.8% $ 1,000,000 AES Corp. ............................................................ 10.250% 07/15/06 $ 1,007,500 5,000,000 Associates Corp. ..................................................... 5.750% 11/01/03 4,827,250 4,000,000 BankAmerica Corp., FRN ............................................... 5.530% 03/05/01 3,985,744 500,000 Bear Stearns Co., Inc., FRN .......................................... 6.224% 02/06/01 500,596 1,100,000 Beckman Instruments, Inc. ............................................ 7.100% 03/04/03 1,063,227 1,000,000 Buckeye Technologies, Inc. ........................................... 8.000% 10/15/10 920,000 700,000 Building Materials Corp. ............................................. 7.750% 07/15/05 635,250 700,000 Building Materials Corp. ............................................. 8.000% 10/15/07 635,250 1,000,000 Citicorp, FRN ........................................................ 5.530% 08/13/02 1,001,460 2,000,000 Citicorp, FRN ........................................................ 5.540% 11/12/02 2,003,000 738,000 Delta Air Lines, Inc. (Sinking Fund Bond) ............................ 9.450% 02/14/06 787,520 1,478,000 Delta Air Lines, Inc. (Sinking Fund Bond) ............................ 9.450% 02/26/06 1,577,868 5,000,000 Ford Motor Credit, FRN ............................................... 5.499% 04/28/05 4,952,725 2,000,000 Ford Motor Credit, FRN ............................................... 5.565% 02/13/03 1,988,388 3,000,000 Ford Motor Credit, FRN ............................................... 5.748% 03/05/01 2,997,435 2,600,000 General Motors Acceptance Corp., FRN ................................. 5.438% 04/29/02 2,588,136 2,500,000 General Motors Acceptance Corp., FRN ................................. 5.568% 08/18/03 2,477,090 10,000,000 General Motors Acceptance Corp., FRN ................................. 5.750% 11/10/03 9,608,300 2,000,000 Goldman Sachs Group, FRN ............................................. 5.690% 11/24/00 1,998,080 3,000,000 Goldman Sachs Group, FRN ............................................. 5.711% 02/22/02 2,985,018 5,000,000 Goldman Sachs Group, FRN ............................................. 6.516% 01/16/03 5,013,700 5,000,000 Household Finance Corp. .............................................. 5.820% 06/17/05 4,937,075 1,100,000 Lehman Brothers Holdings, Inc., MTN .................................. 6.072% 05/07/02 1,103,784 800,000 Lehman Brothers Holdings, Inc., MTN .................................. 6.375% 05/07/02 786,080 7,980,000 MCI Worldcom, Inc. ................................................... 6.125% 08/15/01 7,941,616 1,865,000 Nabisco, Inc. ........................................................ 6.000% 02/15/01 1,841,370 5,000,000 Noram Energy Corp. ................................................... 6.375% 11/01/03 4,811,190 3,000,000 Popular, Inc. ........................................................ 6.200% 04/30/01 2,969,700 2,400,000 Texas Utilities ...................................................... 5.940% 10/15/01 2,372,899 225,000 Time Warner, Inc. .................................................... 7.975% 08/15/04 231,543 450,000 Time Warner, Inc. .................................................... 8.110% 08/15/06 472,176 450,000 Time Warner, Inc. .................................................... 8.180% 08/15/07 472,406 1,000,000 United Airlines ...................................................... 10.670% 05/01/04 1,111,508 ------------ 82,604,884 ------------ FOREIGN GOVERNMENT BONDS 5.5% NZ $ 800,000 Interamerican Development Bank ....................................... 5.750% 04/15/04 380,786 600,000 Government of New Zealand ............................................ 5.500% 04/15/03 293,431 600,000 Government of New Zealand ............................................ 10.000% 03/15/02 328,515 US $ 5,000,000 Republic of Argentina, FRN ........................................... 11.447% 04/10/05 4,500,000 2,000,000 Republic of Korea .................................................... 7.555% 04/08/00 2,007,500 2,579,000 Republic of Philippines .............................................. 9.500% 10/21/24 2,614,461 ------------ 10,124,693 ------------ FOREIGN CORPORATE BONDS 4.5% 3,000,000 Nacional Financiera SNC .............................................. 8.693% 12/01/00 2,985,000 E 5,000,000 Tecnost International NV ............................................. 4.534% 06/23/04 5,394,168 ------------ 8,379,168 ------------ U.S. GOVERNMENT BONDS 4.5% + 1,530,000 U.S. Treasury Note ................................................... 5.500% 02/29/00 1,531,435 3,148,320 U.S. Treasury Inflation Protection Note .............................. 3.625% 07/15/02 3,128,643 1,144,198 U.S. Treasury Inflation Protection Note .............................. 3.625% 01/15/08 1,103,794 1,946,873 U.S. Treasury Inflation Protection Note .............................. 3.875% 01/15/09 1,909,762 614,928 U.S. Treasury Inflation Protection Note .............................. 3.875% 04/15/29 588,794 ------------ 8,262,428 ------------ TOTAL BONDS (Cost $221,106,266) 217,097,837 ------------
The accompanying notes are an integral part of these financial statements. FREMONT MUTUAL FUNDS 45 FREMONT BOND FUND OCTOBER 31, 1999
Shares/ Discount Maturity Value Face Amount Issuer/Security Description Rate Date (Note 1) - ------------------------------------------------------------------------------------------------------------------------------ COMMON STOCK 0.2% 21,000 Northeast Utilities System............................................ $ 437,064 ------------ TOTAL COMMON STOCK (Cost $437,210) 437,064 ------------ OTHER SECURITIES 0.4% 110,000 Call Option on U.S. Treasury Note 4.750%, Strike @88.781, Exp. 11/22/99 ...................................................... 739,090 ------------ TOTAL OTHER SECURITIES (Cost $770,000) 739,090 ------------ SHORT-TERM SECURITIES 0.7% + $ 90,000 U.S. Treasury Bill ................................................... 4.680% 02/17/2000 88,736 + 10,000 U.S. Treasury Bill ................................................... 4.700% 02/17/2000 9,859 + 170,000 U.S. Treasury Bill ................................................... 4.740% 02/17/2000 167,583 + 98,380 U.S. Treasury Bill ................................................... 4.860% 02/17/2000 98,380 861,472 Repurchase Agreement, State Street Bank and Trust Co., 5.050%, 11/01/99 (Maturity value $861,834) (Cost $ 861,472) Collateral: FNMA, 6.000%, 09/24/01 861,472 ------------ TOTAL SHORT-TERM SECURITIES (Cost $1,226,030) 1,226,030 ------------ TOTAL INVESTMENTS (Cost $223,539,506), 119.0% 219,500,021 ------------ OTHER ASSETS AND LIABILITIES, NET, (19.0)% (35,064,978) ------------ NET ASSETS, 100% $184,435,043 ============
The accompanying notes are an integral part of these financial statements. 46 FREMONT MUTUAL FUNDS FREMONT MONEY MARKET FUND OCTOBER 31, 1999 STATEMENT OF INVESTMENTS IN SECURITIES AND NET ASSETS
Discount Maturity Value Face Amount Issuer Rate Date (Note 1) - ------------------------------------------------------------------------------------------------------------------------------ COMMERCIAL PAPER 91.2% BUSINESS EQUIPMENT & SERVICES 3.9% **$10,000,000 Invensys PLC ......................................................... 5.340% 11/10/1999 $ 9,986,650 ** 10,000,000 Invensys PLC ......................................................... 5.820% 01/31/2000 9,852,883 10,000,000 PACCAR Financial Corp. ............................................... 5.220% 11/05/1999 9,994,200 ------------ 29,833,733 ------------ CAPITAL GOODS 0.9% 1,700,000 Hubbell, Inc. ........................................................ 5.350% 11/01/1999 1,700,000 5,000,000 IBM Credit Corp. ..................................................... 5.230% 11/02/1999 4,999,274 ------------ 6,699,274 ------------ CONSUMER DURABLES 14.3% 10,000,000 CBA (Delaware) Finance, Inc. ......................................... 5.330% 12/02/1999 9,954,103 10,000,000 DaimlerChrysler North America Holding ................................ 5.300% 11/30/1999 9,957,306 10,000,000 DaimlerChrysler North America Holding ................................ 5.980% 01/20/2000 9,867,111 10,000,000 Ford Motor Credit Corp. .............................................. 5.330% 12/20/1999 9,927,453 5,000,000 General Electric Capital Corp. ....................................... 5.270% 03/17/2000 4,899,724 10,000,000 General Electric Capital Corp. ....................................... 5.670% 03/14/2000 9,788,950 10,000,000 General Electric Capital Corp. ....................................... 5.760% 02/16/2000 9,828,800 10,000,000 General Motors Acceptance Corp. ...................................... 5.320% 11/08/1999 9,989,656 10,000,000 General Motors Acceptance Corp. ...................................... 5.990% 01/26/2000 9,856,906 ** 10,000,000 Panasonic Finance Corp. .............................................. 5.300% 11/04/1999 9,995,583 5,000,000 Sharp Electronics Corp. .............................................. 5.350% 11/15/1999 4,989,597 10,000,000 Sharp Electronics Corp. .............................................. 5.380% 11/18/1999 9,974,594 ------------ 109,029,783 ------------ CONSUMER NON-DURABLES 4.0% ** 10,000,000 Cargill Global Funding PLC ........................................... 5.420% 01/21/2000 9,878,050 ** 10,000,000 Diageo Capital PLC ................................................... 5.780% 02/29/2000 9,807,333 ** 6,000,000 Diageo Capital PLC ................................................... 5.880% 02/28/2000 5,883,380 5,000,000 Golden Peanut Co. .................................................... 5.750% 02/22/2000 4,909,757 ------------ 30,478,520 ------------ CONSUMER SERVICES 6.7% 5,000,000 New York Times Co. ................................................... 5.300% 12/01/1999 4,977,917 11,000,000 New York Times Co. ................................................... 5.320% 11/17/1999 10,973,991 10,000,000 Stanford, Leland Junior University ................................... 5.320% 11/24/1999 9,966,011 5,000,000 Stanford, Leland Junior University ................................... 5.540% 02/11/2000 4,921,517 10,000,000 Stanford, Leland Junior University ................................... 5.670% 02/22/2000 9,822,025 10,000,000 Yale University ...................................................... 5.300% 11/15/1999 9,979,389 ------------ 50,640,850 ------------ FINANCIAL SERVICES (BANKS) 11.7% 10,000,000 Abbey National North America Corp. ................................... 5.250% 12/07/1999 9,947,500 10,000,000 Abbey National North America Corp. ................................... 5.340% 12/08/1999 9,945,117 5,000,000 Abbey National North America Corp. ................................... 5.365% 12/03/1999 4,976,156 10,000,000 Banque Et Caisse D'Epargne De L'Etat ................................. 5.340% 11/19/1999 9,973,300 5,000,000 Banque Et Caisse D'Epargne De L'Etat ................................. 5.360% 11/19/1999 4,986,600 10,000,000 Banque Et Caisse D'Epargne De L'Etat ................................. 5.990% 01/19/2000 9,868,553 10,000,000 FCE Bank PLC ......................................................... 5.330% 12/16/1999 9,933,375 5,000,000 FCE Bank PLC ......................................................... 6.050% 01/13/2000 4,938,964 10,000,000 Halifax PLC .......................................................... 4.800% 12/21/1999 9,933,333 5,000,000 Halifax PLC .......................................................... 5.330% 01/04/2000 4,952,622 10,000,000 Halifax PLC .......................................................... 5.700% 02/01/2000 9,854,333 ------------ 89,309,853 ------------ FINANCIAL SERVICES (OTHER) 30.2% ** 5,000,000 Allianz of America Finance Corp. ..................................... 5.350% 12/06/1999 4,973,993 ** 5,000,000 Allianz of America Finance Corp. ..................................... 5.350% 12/06/1999 4,973,993 ** 5,000,000 Allianz of America Finance Corp. ..................................... 5.360% 12/10/1999 4,970,967 ** 10,000,000 Allianz of America Finance Corp. ..................................... 5.960% 02/17/2000 9,821,200 10,000,000 American Express Credit Corp. ........................................ 5.900% 02/18/2000 9,821,361 10,000,000 American General Finance Corp. ....................................... 5.330% 12/17/1999 9,931,894 10,000,000 Associates Financial Services ........................................ 5.980% 01/31/2000 9,848,839
The accompanying notes are an integral part of these financial statements. FREMONT MUTUAL FUNDS 47 FREMONT MONEY MARKET FUND OCTOBER 31, 1999
Discount Maturity Value Face Amount Issuer Rate Date (Note 1) - ------------------------------------------------------------------------------------------------------------------------------ FINANCIAL SERVICES (OTHER) (CONT.) $ 10,000,000 Associates First Capital BV .......................................... 5.330% 11/09/1999 $ 9,988,156 10,000,000 Dresdner U.S. Finance, Inc. .......................................... 5.190% 11/22/1999 9,969,725 ** 10,000,000 Hancock, John Capital Corp. .......................................... 5.800% 01/03/2000 9,898,500 10,000,000 HVB Finance .......................................................... 5.750% 01/10/2000 9,888,194 10,000,000 J.P. Morgan & Co., Inc. .............................................. 5.650% 02/07/2000 9,846,194 10,000,000 J.P. Morgan & Co., Inc. .............................................. 5.850% 04/17/2000 9,727,000 5,000,000 J.P. Morgan & Co., Inc. .............................................. 5.950% 02/24/2000 4,904,965 ** 10,000,000 Marsh USA, Inc. ...................................................... 5.590% 02/11/2000 9,841,617 3,000,000 Merrill Lynch & Co., Inc. ............................................ 5.330% 11/02/1999 2,999,556 5,000,000 Merrill Lynch & Co., Inc. ............................................ 5.340% 11/02/1999 4,999,258 10,000,000 MetLife Funding, Inc. ................................................ 5.300% 11/03/1999 9,997,056 10,000,000 MetLife Funding, Inc. ................................................ 5.970% 01/27/2000 9,855,725 5,000,000 MetLife Funding, Inc. ................................................ 5.980% 02/03/2000 4,921,928 ** 9,458,000 Swiss Re Financial Products .......................................... 5.320% 11/16/1999 9,437,035 ** 5,000,000 Swiss Re Financial Products .......................................... 5.340% 11/29/1999 4,979,233 ** 5,084,000 Swiss Re Financial Products .......................................... 5.350% 12/31/1999 5,038,668 ** 5,000,000 Swiss Re Financial Products .......................................... 5.850% 03/30/2000 4,878,125 10,000,000 Transamerica Finance Corp. ........................................... 6.000% 01/20/2000 9,866,667 10,000,000 Transamerica Finance Corp. ........................................... 6.000% 01/24/2000 9,860,000 10,000,000 UBS Finance (Delaware), Inc. ......................................... 4.900% 12/13/1999 9,942,833 5,000,000 UBS Finance (Delaware), Inc. ......................................... 5.200% 12/22/1999 4,963,167 10,000,000 USAA Capital Corp. ................................................... 5.690% 02/23/2000 9,819,817 ------------ 229,965,666 ------------ FOREIGN GOVERNMENT BONDS 9.8% 5,000,000 Caisse d'Amortissement de la Dette Sociale ........................... 5.280% 12/03/1999 4,976,533 5,000,000 Caisse d'Amortissement de la Dette Sociale ........................... 5.340% 11/08/1999 4,994,808 10,000,000 Caisse d'Amortissement de la Dette Sociale ........................... 5.350% 12/28/1999 9,915,292 ** 10,000,000 Dairy Investments (Bermuda) Ltd. ..................................... 5.500% 02/04/2000 9,854,861 ** 10,000,000 Dairy Investments (Bermuda) Ltd. ..................................... 5.800% 02/25/2000 9,813,111 10,000,000 Electricite de France ................................................ 5.150% 12/23/1999 9,925,611 5,000,000 Electricite de France ................................................ 5.330% 12/01/1999 4,977,792 10,000,000 Electricite de France ................................................ 5.730% 01/18/2000 9,875,850 10,000,000 Export Development Corp. ............................................. 4.850% 01/28/2000 9,881,444 ------------ 74,215,302 ------------ HEALTH CARE 0.5% ** 4,000,000 Queen's Health Systems ............................................... 5.330% 11/04/1999 3,998,223 ------------ 3,998,223 ------------ RAW MATERIALS 5.9% 10,000,000 Akzo Nobel, Inc. ..................................................... 5.300% 11/23/1999 9,967,611 10,000,000 Akzo Nobel, Inc. ..................................................... 5.370% 11/01/1999 10,000,000 ** 5,000,000 Henkel Corp. ......................................................... 5.310% 12/07/1999 4,973,450 ** 10,000,000 Rio Tinto America, Inc. .............................................. 5.320% 11/12/1999 9,983,744 ** 10,000,000 Rio Tinto America, Inc. .............................................. 6.000% 01/11/2000 9,881,667 ------------ 44,806,472 ------------ UTILITIES 3.3% ** 5,500,000 France Telecom ....................................................... 5.980% 02/02/2000 5,415,034 10,000,000 National Rural Utilities Cooperative Finance Corp. ................... 5.770% 02/14/2000 9,831,708 10,000,000 National Rural Utilities Cooperative Finance Corp. ................... 5.800% 01/25/2000 9,863,056 ------------ 25,109,798 ------------ TOTAL COMMERCIAL PAPER (Cost $694,087,474) 694,087,474 ------------
The accompanying notes are an integral part of these financial statements. 48 FREMONT MUTUAL FUNDS FREMONT MONEY MARKET FUND OCTOBER 31, 1999
Coupon Maturity Value Face Amount Issuer Rate Date (Note 1) - ------------------------------------------------------------------------------------------------------------------------------ OTHER SHORT-TERM SECURITIES 8.6% $ 10,000,000 Bayerische Hypo-und Vereinsbank AG, YCD .............................. 5.100% 04/12/2000 $ 9,984,217 5,500,000 Bayerische Landesbank Girozentrale, YCD .............................. 6.250% 03/15/2000 5,512,741 10,000,000 Deutsche Bank NY, YCD ................................................ 5.050% 02/09/2000 9,996,519 10,000,000 Deutsche Bank NY, YCD ................................................ 5.200% 05/10/2000 9,997,985 10,000,000 FFCB, AN ............................................................. 5.520% 06/22/2000 10,000,000 10,000,000 FHLB, AN ............................................................. 4.900% 01/14/2000 9,999,939 10,000,000 FNMA, AN ............................................................. 5.120% 05/12/2000 9,983,601 44,406 Repurchase Agreement, State Street Bank and Trust Co., 5.050%, 11/01/99 (Maturity Value $44,425) (Cost $44,406) Collateral: FNMA, 5.310%, 05/18/01 44,406 ------------ TOTAL OTHER SHORT-TERM SECURITIES (Cost $65,519,408) 65,519,408 ------------ TOTAL INVESTMENTS (Cost $759,606,882), 99.8% 759,606,882 ------------ OTHER ASSETS AND LIABILITIES, NET, 0.2% 1,342,887 ------------ NET ASSETS, 100.0% $760,949,769 ============
The accompanying notes are an integral part of these financial statements. FREMONT MUTUAL FUNDS 49 FREMONT CALIFORNIA INTERMEDIATE TAX-FREE FUND OCTOBER 31, 1999 STATEMENT OF INVESTMENTS IN SECURITIES AND NET ASSETS
Coupon Maturity Value Face Amount Issuer Rate Date (Note 1) - ------------------------------------------------------------------------------------------------------------------------------ MUNICIPAL BONDS 98.2% $ 1,000,000 City of Anaheim, Public Finance Authority Revenue Bond, Anaheim Electric Utility Projects .................................... 5.600% 10/01/16 $ 987,580 500,000 Berkeley Unified School District, Revenue Refunding Ser. 1998 (FGIC Insured) ............................................. 4.550% 08/01/10 474,515 1,000,000 Big Bear Area Regional Wastewater Agency, California Revenue ......... 5.000% 04/01/10 992,350 235,000 California Health Facilities Financial Authority Revenue, Kaiser Permanente Ser. B ............................................. 5.250% 10/01/13 225,248 200,000 California Health Facilities Financial Authority Revenue, UCSF - Stanford Health Care Ser. A ................................... 5.000% 11/15/18 176,954 1,000,000 California State Dept. of Veterans Affairs, Home Purchase Revenue 1991 Ser. A .................................... 6.450% 08/01/00 1,020,890 1,015,000 California Dept of Water Resources, Central Valley Project Revenue.... 4.750% 12/01/16 896,844 1,000,000 California State Dept. of Water Resources, Central Valley Project Revenue Ser. H .............................. 6.400% 12/01/00 1,030,910 500,000 California State Dept. of Water Resources, Central Valley Project Revenue Ser. M .............................. 4.800% 12/01/07 502,555 500,000 California State Dept. of Water Resources, Central Valley Project Revenue Ser. T .............................. 5.125% 12/01/12 490,635 1,000,000 California State Public Works Board, Lease Revenue Refunding, Trustees of The California State University, 1995 Ser. B............ 5.600% 04/01/06 1,046,250 1,000,000 California State Public Works Board, Lease Revenue Dept. of Corrections, Prison D ..................................... 5.100% 06/01/06 1,017,800 1,000,000 Contra Costa Transportation Authority, Sales Tax Revenue 1991 Ser. A ...................................... 6.400% 03/01/01 1,032,360 1,000,000 Contra Costa Water Authority, Water Treatment Revenue Refunding 1993 Ser. A (FGIC Insured) ....... 5.300% 10/01/05 1,034,710 1,000,000 Contra Costa Water District, Water Revenue Ser. F (FGIC Insured) ..... 5.250% 10/01/08 1,017,950 1,500,000 East Bay CA MUD, Water System Subordinated Revenue Ser. 1998 ......... 5.250% 06/01/14 1,458,975 1,300,000 Fremont California Unified School District Alameda County Refunding Ser. A (FGIC Insured) .................................... 4.700% 08/01/15 1,155,843 1,000,000 City of Fairfield, Water Revenue (AMBAC Insured) ..................... 5.250% 04/01/14 972,860 1,225,000 City of Industry, Urban Development Agency Tax Allocation (MBIA Insured) 5.250% 05/01/12 1,216,682 1,000,000 City of Los Angeles, Convention & Exhibition Center Authority, Lease Revenue Bonds Refunding Ser. A ............................... 5.200% 08/15/09 1,011,130 1,000,000 Los Angeles Dept. of Water & Power, Electric Plant Revenue Refunding . 5.500% 09/01/07 1,031,870 1,000,000 Los Angeles Dept. of Water & Power, Electric Plant Revenue ........... 4.700% 10/15/06 1,000,240 1,000,000 Los Angeles Dept. of Water & Power, Waterworks Revenue Refunding ..... 5.625% 04/15/08 1,029,760 1,500,000 City of Los Angeles, Wastewater System Revenue Ser. A (MBIA Insured) . 5.000% 12/01/11 1,464,705 1,000,000 City of Los Angeles, Wastewater System Revenue Ser. B (MBIA Insured) . 5.700% 06/01/23 972,290 1,000,000 Los Angeles County Public Works Finance Authority, Lease Revenue Ser. B (MBIA Insured) ................................ 5.250% 09/01/09 1,019,400 500,000 Los Angeles County Public Works Finance Authority, Regional Park and Open Space District Ser. A ....................... 5.000% 10/01/04 512,575 1,000,000 Los Angeles County Public Works Finance Authority, Regional Park and Open Space District Ser. A ....................... 5.000% 10/01/16 911,920 500,000 Los Angeles County Public Works Finance Authority, Regional Park and Open Space District Ser. A ....................... 5.500% 10/01/11 507,810 750,000 Los Angeles County Sanitation District Finance Authority, 1993 Ser. A 5.250% 10/01/06 772,838 440,000 Los Angeles Municipal Improvement Corporate Lease, Special Tax-Police Emergency Revenue Ser. D ........................ 5.000% 09/01/12 424,019 1,000,000 Los Angeles County Transportation Authority, Sales Tax Revenue........ 5.000% 07/01/15 924,590 1,000,000 M-S-R Public Power Agency, San Juan Project Revenue Ser. F............ 5.650% 07/01/03 1,045,510 1,000,000 Metropolitan Water District of Southern California, Waterworks GO Refunding 1993 Ser. A ................................ 5.250% 03/01/05 1,037,340 1,000,000 Modesto High School District, 1993 GO Refunding (FGIC Insured)........ 5.300% 08/01/04 1,038,820 1,000,000 Modesto Irrigation District Finance Authority, Domestic Water Project Revenue 1992 Ser. A (AMBAC Insured).......... 5.650% 09/01/03 1,057,930 500,000 Northern California Power Agency, Geothermal Project #3, Escrowed to Maturity Ser. A ........................................ 5.600% 07/01/06 526,800 500,000 Northern California Power Agency, Geothermal Project #3 Ser. A........ 5.600% 07/01/06 516,660 1,000,000 Orange County Transportation Authority, Measure M Sales Tax Revenue First Ser. 1992 ........................................ 6.000% 02/15/06 1,070,890 1,000,000 Orange County Transportation Authority, Measure M Sales Tax Revenue Second Senior Ser. 1994 (FGIC Insured) . 5.000% 02/15/08 1,010,410 500,000 City of Pasadena, GO Refunding Police and Jail Building 1993 ......... 5.000% 06/01/07 500,105 1,000,000 Rancho Cucamonga RDA, 1994 Tax Allocation Refunding (MBIA Insured) ... 5.000% 09/01/07 1,013,830 1,000,000 City of Riverside, Electric Revenue Refunding 1993 ................... 5.000% 10/01/06 1,012,990 1,000,000 City of Riverside, Electric Revenue Refunding 1993 (AMBAC Insured).... 5.000% 10/01/13 955,040 315,000 City of Riverside, Electric Revenue Refunding ........................ 6.100% 10/01/00 322,040 685,000 City of Riverside, Electric Revenue .................................. 6.100% 10/01/00 699,995 1,000,000 Sacramento MUD, Electric Revenue 1991 Ser. Y ......................... 6.250% 09/01/00 1,022,240 2,000,000 Sacramento MUD, Electric Revenue 1997 Ser. L ......................... 5.125% 07/01/15 1,886,640 1,000,000 Sacramento County Sanitation District Finance Authority, Revenue Bond (MBIA Insured) ........................................ 5.000% 12/01/08 1,007,000
The accompanying notes are an integral part of these financial statements. 50 FREMONT MUTUAL FUNDS FREMONT CALIFORNIA INTERMEDIATE TAX-FREE FUND OCTOBER 31, 1999
Coupon Maturity Value Face Amount Issuer Rate Date (Note 1) - ------------------------------------------------------------------------------------------------------------------------------ MUNICIPAL BONDS (CONT.) $ 1,000,000 Sacramento County Sanitation District Finance Authority, Revenue Bond (MBIA Insured) ........................................ 5.125% 12/01/13 $ 950,810 1,000,000 San Bernardino County Transportation Authority, Sales Tax Revenue 1992 Ser. A (FGIC Insured) ....................... 6.000% 03/01/03 1,052,540 1,000,000 City and County of San Francisco RDA, Lease Revenue Ser. 1991 (George R. Moscone Convention Center) (AMBAC Insured) .............. 6.200% 10/01/00 1,023,430 1,000,000 City and County of San Francisco International Airport, Revenue Second Ser. Issue 1 (AMBAC Insured) ........................ 6.100% 05/01/03 1,058,160 1,000,000 City and County of San Francisco Sewer, Revenue Refunding Ser. 1992 (AMBAC Insured) ........................ 5.800% 10/01/05 1,052,040 1,000,000 City and County of San Francisco RDA, Tax Allocation 1997 Ser. B ..... 5.700% 08/01/14 1,049,240 1,000,000 City of San Jose, Finance Authority (Convention Center Refunding Project) 1993 Ser. C (MBIA Insured) ......................................... 5.750% 09/01/03 1,039,010 500,000 San Jose-Santa Clara Water Financing Authority, Sewer Revenue......... 5.250% 11/15/12 496,490 1,000,000 Santa Margarita/Dana Point Authority Orange County, Revenue Bond Ser. A 5.375% 08/01/04 1,041,570 330,000 San Mateo County Sewer Revenue Ser. A (FGIC Insured) ................. 4.850% 08/01/17 293,924 1,000,000 San Mateo County Transit District Ser. A (MBIA Insured)............... 4.500% 06/01/13 896,700 1,000,000 Santa Monica-Malibu Unified School District, Public School Facilities Reconstruction Projects ................... 5.500% 08/01/18 1,059,440 1,000,000 Southern California Public Power Authority, Mead-Phoenix Project Revenue 1994 Ser. A (AMBAC Insured)............ 4.750% 07/01/08 995,370 1,000,000 Southern California Public Power Authority, Mead-Adelanto Project Revenue 1994 Ser. A (AMBAC Insured)........... 4.750% 07/01/09 983,580 1,000,000 Southern California Public Power Authority, Palo Verde Power Projects Revenue 1993 Ser. A ...................... 5.100% 07/01/06 1,004,870 1,000,000 University of California, Housing System Revenue 1993 Ser. A (MBIA Insured) .............................................. 5.500% 11/01/08 1,033,780 500,000 University of California, Research Facilities Revenue 1995 Ser. C (AMBAC Insured) ............................................. 5.100% 09/01/07 510,000 1,000,000 West & Central Basin Finance Authority, West Basin Water Revenue Refunding Project (AMBAC Insured) ......... 5.125% 08/01/06 1,025,450 250,000 Vacaville California Public Financing Authority Tax Allocation Revenue 5.100% 09/01/11 243,975 1,000,000 City of Whittier, Solid Waste Revenue Ser. A (AMBAC Insured).......... 5.375% 08/01/14 982,930 1,500,000 Yucaipa School Facilities Finance Authority, 1995 Sweetwater Refunding (MBIA Insured) ........................... 6.000% 09/01/10 1,570,350 ------------ TOTAL MUNICIPAL BONDS (Cost $62,652,067) 63,422,957 ------------ Shares - ------------------------------------------------------------------------------------------------------------------------------ SHORT-TERM SECURITIES 0.0% 838 Provident Institutional Fund: Municipal Fund for California Investors, Inc. ......................................... 838 ------------ TOTAL SHORT-TERM SECURITIES (Cost $838) 838 ------------ TOTAL INVESTMENTS (Cost $62,652,905), 99.2% 63,423,795 ------------ OTHER ASSETS & LIABILITIES, NET, 0.8% 495,018 ------------ NET ASSETS, 100.0% $ 63,918,813 ============
The accompanying notes are an integral part of these financial statements. FREMONT MUTUAL FUNDS 51 FREMONT MUTUAL FUNDS, INC. NOTES TO STATEMENTS OF INVESTMENTS IN SECURITIES AND NET ASSETS The following footnotes and abbreviations are a reference point for the Statements of Investments in Securities and Net Assets on pages 24 through 52. * Non-income producing security ** These transactions are generally issued to institutional investors. Any resale must be in an exempt transaction pursuant to Section 4(2) of the Securities Act of 1933. (a) Represents discount rate or yield to maturity at the date of acquisition. (b) As of October 31, 1999, these securities represent ownership of at least 5% of the voting securities of the issuer and are, therefore, affiliates as defined in the Investment Company Act of 1940; See Note 2 of "Notes to Financial Statements." + On deposit with broker for initial margin on futures contracts (Note 1). PORTFOLIO ABBREVIATIONS ADR American Depository Receipt AMBAC American Municipal Bond Assurance Corp. AN Agency Note CMO Collateralized Mortgage Obligation CP Commercial Paper FFCB Federal Farm Credit Bank FGIC Financial Guaranty Insurance Corp. FHLB Federal Home Loan Bank FHLMC Federal Home Loan Mortgage Corp. FNMA Federal National Mortgage Association FRN Floating Rate Note GDR Global Depository Receipt GNMA Government National Mortgage Association GO General Obligation MBIA Municipal Bond Investor Assurance Corp. MTN Medium Term Note MUD Municipal Utility District RDA Redevelopment Agency REIT Real Estate Investment Trust REMIC Real Estate Mortgage Investment Conduit TBA To Be Announced YCD Yankee Certificate of Deposit CURRENCY ABBREVIATIONS AUS$ Australian Dollar (pound) British Pound CAN$ Canadian Dollar DKK Danish Kroner GRD Greek Drachmas E Euro DM German Deutschemark (Y) Japanese Yen NOK Norwegian Kroner NZ$ New Zealand Dollar SGD Singapore Dollar SEK Swedish Krona $ U.S. Dollar The accompanying notes are an integral part of these financial statements. 52 FREMONT MUTUAL FUNDS FREMONT MUTUAL FUNDS, INC. NOTES TO STATEMENTS OF INVESTMENTS IN SECURITIES AND NET ASSETS OCTOBER 31, 1999 COUNTRY DIVERSIFICATION Country Country International Emerging Real Estate Code Name Global Growth Markets Bond Securities Fund - -------------------------------------------------------------------------------- AR Argentina -- -- -- 2.5% -- AS Austria 0.7% -- -- -- -- AU Australia 1.0% 3.3% -- -- -- BE Belgium 0.1% -- -- -- -- BR Brazil -- 0.4% 9.8% -- -- CH China -- -- 2.6% -- -- CN Canada 2.7% 3.5% -- -- 2.0% CZ Czech Republic -- -- 1.1% -- -- DK Denmark 0.5% -- -- -- -- FI Finland 0.3% 3.5% -- -- -- FR France 3.9% 5.3% -- -- -- GM Germany 5.6% 8.1% -- -- -- GR Greece 1.2% -- -- -- -- HK Hong Kong 0.4% 1.6% 1.4% -- -- HU Hungary -- -- 4.7% -- -- ID Indonesia 0.3% -- -- -- -- IN India 0.2% -- 11.4% -- -- IR Ireland 0.4% -- -- -- -- IS Israel -- -- 1.4% -- -- IT Italy 0.9% 3.5% -- -- -- JP Japan 6.6% 27.3% -- -- -- LU Luxembourg -- 0.3% -- -- -- MX Mexico 1.8% 1.5% 10.6% 1.6% -- MY Malaysia 0.8% -- -- -- -- NL Netherlands 2.1% 4.8% -- 3.0% -- NO Norway -- 0.1% -- -- -- NZ New Zealand 0.7% -- -- 0.6% -- PH Philippines 0.2% -- 1.2% 1.4% -- PO Poland -- -- 2.0% -- -- PT Portugal 0.2% 0.6% -- -- -- RU Russia -- -- 1.8% -- -- SA South Africa -- 0.6% 9.7% -- -- SG Singapore 0.8% 1.3% 1.4% -- -- SK South Korea 0.1% 1.3% 13.8% 1.1% -- SP Spain 1.1% 1.3% -- -- -- SW Sweden 1.2% 1.0% -- -- -- SZ Switzerland 1.6% 3.6% -- -- -- TH Thailand -- -- 7.5% -- -- TU Turkey -- -- 3.5% -- -- TW Taiwan 0.5% 2.3% 11.2% -- -- UK United Kingdom 6.1% 10.6% 1.4% -- -- US United States 58.0% 14.2% 3.5% 89.8% 98.0% ----- ----- ----- ----- ----- Total 100.0% 100.0% 100.0% 100.0% 100.0% ===== ===== ===== ===== ===== The Fremont Funds not listed above include 100% securities denominated in U.S. dollars. The accompanying notes are an integral part of these financial statements. FREMONT MUTUAL FUNDS 53 FREMONT MUTUAL FUNDS, INC. OCTOBER 31, 1999 STATEMENT OF ASSETS AND LIABILITIES (All numbers in thousands except net asset value per share)
INTERNATIONAL EMERGING U.S. U.S. REAL ESTATE GLOBAL GROWTH MARKETS MICRO-CAP SMALL CAP GROWTH SECURITIES FUND FUND FUND FUND FUND FUND FUND ------------------------------------------------------------------------------- ASSETS: Investments in securities at cost $ 650,126 $ 47,734 $ 10,345 $ 220,889 $ 23,373 $ 114,936 $ 33,588 ========= ========= ========= ========= ========= ========= ========= Investments in securities at value (Note 1) 694,766 59,515 11,789 287,966 30,374 142,600 31,448 Cash 2,469 83 385 27 119 -- -- Dividends and interest receivable 5,980 83 11 12 2 166 122 Receivable for securities sold 10,222 -- 4 2,883 244 300 -- Receivable from sale of fund shares 1,079 2,272 118 11,883 215 -- 43 Variation margin receivable 1,071 -- -- -- -- 136 -- Unrealized appreciation on foreign currency contracts (Note 1) 1,918 53 -- -- -- -- -- Unamortized organization costs (Note 3) -- -- 6 -- 10 -- 7 --------- --------- --------- --------- --------- --------- --------- TOTAL ASSETS 717,505 62,006 12,313 302,771 30,964 143,202 31,620 --------- --------- --------- --------- --------- --------- --------- LIABILITIES: Bank overdraft -- -- -- -- -- 100 -- Liabilities for options written (Note 4) 7 -- -- -- -- -- -- Payable for securities purchased 25,262 27 548 1,637 1,346 -- -- Payable for fund shares redeemed 642 1,722 163 209 1 212 74 Unrealized depreciation on foreign currency contracts (Note 1) 4,202 208 -- -- -- -- -- Accrued expenses: Investment advisory, administrative and distribution fees 424 66 13 422 34 76 34 Other 160 9 1 -- 4 55 13 --------- --------- --------- --------- --------- --------- --------- TOTAL LIABILITIES 30,697 2,032 725 2,268 1,385 443 121 --------- --------- --------- --------- --------- --------- --------- NET ASSETS $ 686,808 $ 59,974 $ 11,588 $ 300,503 $ 29,579 $ 142,759 $ 31,499 ========= ========= ========= ========= ========= ========= ========= Net assets consist of: Paid in capital $ 591,364 $ 46,452 $ 16,333 $ 232,866 $ 22,579 $ 107,878 $ 40,535 Undistributed net investment income (loss) 2,575 91 -- -- -- 99 -- Unrealized appreciation (depreciation) on investments, futures and options 45,150 11,781 1,444 67,078 7,001 27,717 (2,139) Unrealized (depreciation) on foreign currency contracts and other assets and liabilities (2,289) (154) (1) -- -- -- -- Accumulated net realized gain (loss) 50,008 1,804 (6,188) 559 (1) 7,065 (6,897) --------- --------- --------- --------- --------- --------- --------- NET ASSETS $ 686,808 $ 59,974 $ 11,588 $ 300,503 $ 29,579 $ 142,759 $ 31,499 ========= ========= ========= ========= ========= ========= ========= SHARES OF CAPITAL STOCK OUTSTANDING 46,565 4,609 1,445 10,594 1,880 9,094 4,196 ========= ========= ========= ========= ========= ========= ========= NET ASSET VALUE PER SHARE $ 14.75 $ 13.01 $ 8.02 $ 28.36 $ 15.74 $ 15.70 $ 7.51 ========= ========= ========= ========= ========= ========= =========
The Global Fund received premiums of $17 on written options. The accompanying notes are an integral part of these financial statements. 54 and 55 FREMONT MUTUAL FUNDS FREMONT MUTUAL FUNDS, INC. OCTOBER 31, 1999 STATEMENT OF ASSETS AND LIABILITIES (CONT.) (All numbers in thousands except net asset value per share)
CALIFORNIA INTERMEDIATE BOND MONEY MARKET TAX-FREE FUND FUND FUND ------------------------------------ ASSETS: Investments in securities at cost $ 223,540 $ 759,607 $ 62,653 ========= ========= ========= Investments in securities at value (Note 1) 219,500 759,607 63,424 Cash 16 -- -- Dividends and interest receivable 2,289 1,543 829 Receivable for securities sold 6,996 -- -- Receivable from sale of fund shares 1,457 5,579 2 Variation margin receivable 202 -- -- Unrealized appreciation on foreign currency contracts (Note 1) 185 -- -- --------- --------- --------- TOTAL ASSETS 230,645 766,729 64,255 --------- --------- --------- LIABILITIES: Bank overdraft -- -- 87 Liabilities for options written (Note 4) 55 -- -- Dividends payable to shareholders 33 8 222 Reverse repurchase agreement (Note 1) 24,031 -- -- Payable for interest due to reverse repurchase agreement (Note 1) 27 -- -- Payable for securities purchased 21,781 -- -- Payable for fund shares redeemed 160 5,464 -- Accrued expenses: Investment advisory, administrative and distribution fees 77 228 27 Other 46 79 -- --------- --------- --------- TOTAL LIABILITIES 46,210 5,779 336 --------- --------- --------- NET ASSETS $ 184,435 $ 760,950 $ 63,919 ========= ========= ========= Net assets consist of: Paid in capital $ 194,790 $ 760,950 $ 63,141 Undistributed net investment income 30 -- -- Unrealized appreciation (depreciation) on investments, futures and options (3,715) -- 771 Unrealized appreciation on foreign currency contracts and other assets and liabilities 204 -- -- Accumulated net realized gain (loss) (6,874) -- 7 --------- --------- --------- NET ASSETS $ 184,435 $ 760,950 $ 63,919 ========= ========= ========= SHARES OF CAPITAL STOCK OUTSTANDING 19,095 760,950 5,991 ========= ========= ========= NET ASSET VALUE PER SHARE $ 9.66 $ 1.00 $ 10.67 ========= ========= =========
The Bond Fund received premiums of $450 on written options. The accompanying notes are an integral part of these financial statements. 56 FREMONT MUTUAL FUNDS FREMONT MUTUAL FUNDS, INC. OCTOBER 31, 1999 This page left blank intentionally. The accompanying notes are an integral part of these financial statements. FREMONT MUTUAL FUNDS 57 FREMONT MUTUAL FUNDS, INC. YEAR ENDED OCTOBER 31, 1999 STATEMENT OF OPERATIONS (All numbers in thousands)
INTERNATIONAL EMERGING U.S. U.S. REAL ESTATE GLOBAL GROWTH MARKETS MICRO-CAP SMALL CAP GROWTH SECURITIES FUND FUND FUND FUND FUND FUND FUND --------------------------------------------------------------------------------- INVESTMENT INCOME: Interest $ 20,087 $ 106 $ 47 $ 1,646 $ 106 $ 884 $ 125 Dividends 4,176 592 28 59 6 1,563 1,777 --------- --------- --------- --------- --------- --------- --------- TOTAL INCOME* 24,263 698 75 1,705 112 2,447 1,902 --------- --------- --------- --------- --------- --------- --------- EXPENSES: Investment advisory and administrative fees (Note 2) 4,909 521 107 3,638 174 968 327 Shareholder servicing fees 164 51 30 -- 39 138 103 Custody fees 268 32 26 -- 18 19 15 Distribution fees (Note 2) -- 113 23 -- 38 -- 82 Accounting fees 199 24 15 -- 12 36 15 Audit and legal fees 46 22 23 -- 17 20 18 Directors' fees (Note 2) 5 5 5 -- 5 5 5 Registration fees 23 10 11 -- 13 13 11 Reports to shareholders 43 5 10 -- 5 27 31 Other 3 6 8 -- 5 3 6 --------- --------- --------- --------- --------- --------- --------- TOTAL EXPENSES BEFORE REDUCTIONS 5,660 789 258 3,638 326 1,229 613 Earned credits (Note 2) (8) (2) -- -- -- (4) (1) Expenses waived and/or reimbursed by Advisor (Note 2) -- (107) (118) -- (99) -- (123) --------- --------- --------- --------- --------- --------- --------- TOTAL NET EXPENSES 5,652 680 140 3,638 227 1,225 489 --------- --------- --------- --------- --------- --------- --------- NET INVESTMENT INCOME (LOSS) 18,611 18 (65) (1,933) (115) 1,222 1,413 --------- --------- --------- --------- --------- --------- --------- REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS AND FOREIGN CURRENCY: Net realized gain (loss) from: Investments 45,009 2,435 (1,163) 62,303 2,059 11,223 (2,698) Futures 20,734 -- -- -- -- 5,255 -- Options (13) -- -- -- -- -- -- Foreign currency transactions (4,263) (346) (7) -- -- -- -- Net unrealized appreciation (depreciation) on: Investments 15,623 13,260 4,021 79,635 6,869 15,054 1,057 Translation of assets and liabilities in foreign currencies 8,831 149 (4) -- -- -- -- --------- --------- --------- --------- --------- --------- --------- Net realized and unrealized gain (loss) from investments and foreign currency 85,921 15,498 2,847 141,938 8,928 31,532 (1,641) --------- --------- --------- --------- --------- --------- --------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 104,532 $ 15,516 $ 2,782 $ 140,005 $ 8,813 $ 32,754 $ (228) ========= ========= ========= ========= ========= ========= =========
*Net of foreign taxes withheld of $537 for the Global Fund, $79 for the International Growth Fund and $93 for the Emerging Markets Fund. The accompanying notes are an integral part of these financial statements. 58 and 59 FREMONT MUTUAL FUNDS FREMONT MUTUAL FUNDS, INC. YEAR ENDED OCTOBER 31, 1999 STATEMENT OF OPERATIONS (CONT.) (All numbers in thousands)
CALIFORNIA INTERMEDIATE BOND MONEY MARKET TAX-FREE FUND FUND FUND ------------------------------------- INVESTMENT INCOME: Interest $ 14,003 $ 38,300 $ 3,371 --------- --------- --------- TOTAL INCOME 14,003 38,300 3,371 --------- --------- --------- EXPENSES: Investment advisory and administrative fees (Note 2) 1,132 2,647 339 Shareholder servicing fees 60 128 23 Custody fees 45 49 3 Accounting fees 58 147 29 Audit and legal fees 20 20 22 Directors' fees (Note 2) 5 5 5 Registration fees 17 36 3 Reports to shareholders 15 18 5 Interest expense (Note 1) 394 -- -- Other 24 65 7 --------- --------- --------- TOTAL EXPENSES BEFORE REDUCTIONS 1,770 3,115 436 Earned credits (Note 2) -- (1) (10) Expenses waived and/or reimbursed by Advisor (Note 2) (138) (357) (124) --------- --------- --------- TOTAL NET EXPENSES 1,632 2,757 302 --------- --------- --------- NET INVESTMENT INCOME 12,371 35,543 3,069 --------- --------- --------- REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS AND FOREIGN CURRENCY: Net realized gain (loss) from: Investments (3,703) -- 7 Futures (1,578) -- -- Options (124) -- -- Foreign currency transactions (226) -- -- Net unrealized appreciation (depreciation) on: Investments (7,778) -- (3,492) Translation of assets and liabilities in foreign currencies 365 -- -- --------- --------- --------- Net realized and unrealized loss from investments and foreign currency (13,044) -- (3,485) --------- --------- --------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ (673) $ 35,543 $ (416) ========= ========= =========
The accompanying notes are an integral part of these financial statements. 60 FREMONT MUTUAL FUNDS FREMONT MUTUAL FUNDS, INC. OCTOBER 31, 1999 This page left blank intentionally. The accompanying notes are an integral part of these financial statements. FREMONT MUTUAL FUNDS 61 FREMONT MUTUAL FUNDS, INC. OCTOBER 31, 1999 STATEMENT OF CHANGES IN NET ASSETS FOR THE YEARS ENDED OCTOBER 31, 1999 AND 1998 (ALL NUMBERS IN THOUSANDS)
GLOBAL INTERNATIONAL GROWTH FUND FUND ----------------------- ----------------------- 1999 1998 1999 1998 --------- --------- --------- --------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss) $ 18,611 $ 18,836 $ 18 $ 215 Net realized gain (loss) from investments and transactions in written options 65,730 38,842 2,435 3,620 Net realized gain (loss) from foreign currency transactions (4,263) 560 (346) 83 Net unrealized appreciation (depreciation) on investments 15,623 (24,416) 13,260 (3,717) Net unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currencies 8,831 (9,032) 149 (301) --------- --------- --------- --------- Net increase (decrease) in net assets from operations 104,532 24,790 15,516 (100) --------- --------- --------- --------- Distributions to shareholders from: Net investment income (22,322) (11,426) (38) -- Net realized gains (50,845) (13,937) (4,043) (390) --------- --------- --------- --------- Total distributions to shareholders (73,167) 25,363 (4,081) (390) --------- --------- --------- --------- From capital share transactions: Proceeds from shares sold 232,092 357,906 146,675 37,476 Value of shares issued on merger (Note 8) 4,265 -- -- -- Payments for shares redeemed (283,633) (416,588) (140,831) (34,395) Reinvested dividends 71,554 24,673 1,072 389 --------- --------- --------- --------- Net increase (decrease) in net assets from capital share transactions 24,278 (34,009) 6,916 3,470 --------- --------- --------- --------- Net increase (decrease) in net assets 55,643 (34,582) 18,351 2,980 NET ASSETS AT BEGINNING OF PERIOD 631,165 665,747 41,623 38,643 --------- --------- --------- --------- NET ASSETS AT END OF PERIOD $ 686,808 $ 631,165 $ 59,974 $ 41,623 ========= ========= ========= ========= Capital transactions in shares: Sold 16,028 25,153 12,515 3,452 Shares issued on merger (Note 8) 301 -- -- -- Redeemed (19,575) (29,228) (12,039) (3,190) Reinvested dividends 5,142 1,721 106 40 --------- --------- --------- --------- Net increase (decrease) from capital share transactions 1,896 (2,354) 582 302 ========= ========= ========= =========
The accompanying notes are an integral part of these financial statements. 62 FREMONT MUTUAL FUNDS FREMONT MUTUAL FUNDS, INC. OCTOBER 31, 1999 EMERGING MARKETS U.S. MICRO-CAP U.S. SMALL CAP FUND FUND FUND - ----------------------- ----------------------- ----------------------- 1999 1998 1999 1998 1999 1998 - --------- --------- --------- --------- --------- --------- $ (65) $ 133 $ (1,933) $ (1,803) $ (115) $ (33) (1,163) (4,995) 62,303 (6,096) 2,059 (865) (7) (180) -- -- -- -- 4,021 (1,181) 79,635 (24,169) 6,869 379 (4) 12 -- -- -- -- - --------- --------- --------- --------- --------- --------- 2,782 (6,211) 140,005 (32,068) 8,813 (519) - --------- --------- --------- --------- --------- --------- -- -- -- -- -- (2) -- (179) (53,551) (8,525) (1,080) -- - --------- --------- --------- --------- --------- --------- -- (179) (53,551) (8,525) (1,080) (2) - --------- --------- --------- --------- --------- --------- 12,523 12,790 448,130 209,089 21,646 6,554 -- -- -- -- -- -- (12,459) (10,012) (397,680) (227,375) (8,190) (4,018) -- 179 43,583 7,388 1,023 2 - --------- --------- --------- --------- --------- --------- 64 2,957 94,033 (10,898) 14,479 2,538 - --------- --------- --------- --------- --------- --------- 2,846 (3,433) 180,487 (51,491) 22,212 2,017 8,742 12,175 120,016 171,507 7,367 5,350 - --------- --------- --------- --------- --------- --------- $ 11,588 $ 8,742 $ 300,503 $ 120,016 $ 29,579 $ 7,367 ========= ========= ========= ========= ========= ========= 1,731 1,570 17,299 10,749 1,611 672 -- -- -- -- -- -- (1,769) (1,377) (15,663) (11,337) (630) (401) -- 19 1,614 374 69 -- - --------- --------- --------- --------- --------- --------- (38) 212 3,250 (214) 1,050 271 ========= ========= ========= ========= ========= ========= The accompanying notes are an integral part of these financial statements. FREMONT MUTUAL FUNDS 63 FREMONT MUTUAL FUNDS, INC. OCTOBER 31, 1999 STATEMENT OF CHANGES IN NET ASSETS For the Years Ended October 31, 1999 and 1998 (All numbers in thousands)
GROWTH REAL ESTATE SECURITIES FUND FUND ----------------------- ----------------------- 1999 1998 1999 1998 --------- --------- --------- --------- Increase (decrease) in net assets: From operations: Net investment income $ 1,222 $ 2,043 $ 1,413 $ 788 Net realized gain (loss) from investments and transactions in written options 16,478 19,371 (2,698) (4,253) Net realized gain (loss) from foreign currency transactions -- -- -- -- Net unrealized appreciation (depreciation) on investments 15,054 (10,948) 1,057 (3,196) Net unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currencies -- -- -- -- --------- --------- --------- --------- Net increase (decrease) in net assets from operations 32,754 10,466 (228) (6,661) --------- --------- --------- --------- Distributions to shareholders from: Net investment income (1,431) (1,813) (1,587) (572) Net realized gains (28,835) (3,057) -- -- Return of capital distribution -- -- (349) -- --------- --------- --------- --------- Total distributions to shareholders (30,266) (4,870) (1,936) (572) --------- --------- --------- --------- From capital share transactions: Proceeds from shares sold 196,253 150,855 14,832 48,481 Payments for shares redeemed (233,327) (149,496) (16,374) (8,253) Reinvested dividends 17,970 4,779 1,723 487 --------- --------- --------- --------- Net increase (decrease) in net assets from capital share transactions (19,104) 6,138 181 40,715 --------- --------- --------- --------- Net increase (decrease) in net assets (16,616) 11,734 (1,983) 33,482 Net assets at beginning of period 159,375 147,641 33,482 -- --------- --------- --------- --------- Net assets at end of period $ 142,759 $ 159,375 $ 31,499 $ 33,482 ========= ========= ========= ========= Capital transactions in shares: Sold 12,281 9,485 1,854 5,047 Redeemed (14,665) (9,426) (2,069) (915) Reinvested dividends 1,237 314 217 62 --------- --------- --------- --------- Net increase (decrease) from capital share transactions (1,147) 373 2 4,194 ========= ========= ========= =========
The accompanying notes are an integral part of these financial statements. 64 FREMONT MUTUAL FUNDS FREMONT MUTUAL FUNDS, INC. OCTOBER 31, 1999 BOND MONEY MARKET CALIFORNIA INTERMEDIATE FUND FUND TAX-FREE FUND - ------------------------- ------------------------- ------------------------ 1999 1998 1999 1998 1999 1998 - ----------- ----------- ----------- ----------- ----------- ---------- $ 12,371 $ 8,053 $ 35,543 $ 28,765 $ 3,069 $ 2,981 (5,405) 4,415 -- -- 7 19 (226) 518 -- -- -- -- (7,778) 1,035 -- -- (3,492) 1,520 365 (148) -- -- -- -- - ---------- ---------- ----------- ----------- ---------- ---------- (673) 13,873 35,543 28,765 (416) 4,520 - ---------- ---------- ----------- ----------- ---------- ---------- (12,356) (8,128) (35,543) (28,765) (3,069) (2,981) (3,911) (2,852) -- -- (19) (29) -- -- -- -- -- -- - ---------- ---------- ----------- ----------- ---------- ---------- (16,267) (10,980) (35,543) (28,765) (3,088) (3,010) - ---------- ---------- ----------- ----------- ---------- ---------- 142,138 234,884 1,395,544 1,514,353 6,886 4,170 (184,556) (110,815) (1,387,157) (1,258,495) (4,045) (8,717) 15,792 10,737 35,272 28,281 571 2,739 - ---------- ---------- ----------- ----------- ---------- ---------- (26,626) 134,806 43,659 284,139 3,412 (1,808) - ---------- ---------- ----------- ----------- ---------- ---------- (43,566) 137,699 43,659 284,139 (92) (298) 228,001 90,302 717,291 433,152 64,011 64,309 - ---------- ---------- ----------- ----------- ---------- ---------- $ 184,435 $ 228,001 $ 760,950 $ 717,291 $ 63,919 $ 64,011 ========== ========== =========== =========== ========== ========== 14,118 22,744 1,395,179 1,514,353 617 376 (18,442) (10,770) (1,387,157) (1,258,495) (369) (783) 1,578 1,043 35,637 28,281 52 247 - ---------- ---------- ----------- ----------- ---------- ---------- (2,746) 13,017 43,659 284,139 300 (160) ========== ========== =========== =========== ========== ========== The accompanying notes are an integral part of these financial statements. FREMONT MUTUAL FUNDS 65 FREMONT MUTUAL FUNDS, INC. FINANCIAL HIGHLIGHTS - OCTOBER 31, 1999
GLOBAL FUND YEAR ENDED OCTOBER 31 - --------------------------------------------------------------------------------------------------------------------- 1999 1998 1997 1996 1995 ------------------------------------------------------------------ SELECTED PER SHARE DATA for one share outstanding during the period NET ASSET VALUE, BEGINNING OF PERIOD $ 14.13 $ 14.16 $ 15.11 $ 14.24 $ 13.13 ---------- ---------- ---------- ---------- ---------- INCOME FROM INVESTMENT OPERATIONS Net investment income .41 .34 .45 .39 .40 Net realized and unrealized gain 1.89 .17 1.31 1.49 1.24 ---------- ---------- ---------- ---------- ---------- Total investment operations 2.30 .51 1.76 1.88 1.64 ---------- ---------- ---------- ---------- ---------- LESS DISTRIBUTIONS From net investment income (.50) (.25) (.52) (.44) (.50) From net realized gains (1.18) (.29) (2.19) (.57) (.03) ---------- ---------- ---------- ---------- ---------- Total distributions (1.68) (.54) (2.71) (1.01) (.53) ---------- ---------- ---------- ---------- ---------- NET ASSET VALUE, END OF PERIOD $ 14.75 $ 14.13 $ 14.16 $ 15.11 $ 14.24 ========== ========== ========== ========== ========== TOTAL RETURN 17.37% 3.62% 13.01% 13.72% 12.78% RATIOS AND SUPPLEMENTAL DATA Net assets, end of period (000s omitted) $ 686,808 $ 631,165 $ 665,747 $ 572,150 $ 482,355 Ratio of expenses to average net assets .86% .85% .85% .87% .88% Ratio of net investment income to average net assets 2.85% 2.80% 2.66% 2.66% 2.98% Portfolio turnover rate 113% 75% 48% 71% 83% INTERNATIONAL GROWTH FUND YEAR ENDED OCTOBER 31 - --------------------------------------------------------------------------------------------------------------------- 1999 1998 1997 1996 1995 ------------------------------------------------------------------ SELECTED PER SHARE DATA for one share outstanding during the period NET ASSET VALUE, BEGINNING OF PERIOD $ 10.34 $ 10.37 $ 10.40 $ 9.72 $ 9.79 ---------- ---------- ---------- ---------- ---------- INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) --8 .05 .02 (.02) .10 Net realized and unrealized gain (loss) 3.69 .03 (.02) .71 (.09) ---------- ---------- ---------- ---------- ---------- Total investment operations 3.69 .08 -- .69 .01 ---------- ---------- ---------- ---------- ---------- LESS DISTRIBUTIONS From net investment income (.01) -- -- (.01) (.08) From net realized gains (1.01) (.11) (.03) -- -- ---------- ---------- ---------- ---------- ---------- Total distributions (1.02) (.11) (.03) (.01) (.08) ---------- ---------- ---------- ---------- ---------- NET ASSET VALUE, END OF PERIOD $ 13.01 $ 10.34 $ 10.37 $ 10.40 $ 9.72 ========== ========== ========== ========== ========== TOTAL RETURN 38.70%1 .80%1 -0.01% 7.07% 0.13% RATIOS AND SUPPLEMENTAL DATA Net assets, end of period (000s omitted) $ 59,974 $ 41,623 $ 38,643 $ 35,273 $ 32,156 Ratio of net expenses to average net assets2 1.50% 1.50% 1.50% 1.50% 1.50% Ratio of gross expenses to average net assets2 1.74% 1.65% 1.50% 1.50% 1.50% Ratio of net investment income (loss) to average net assets .04% .53% .34% -.20% 1.19% Portfolio turnover rate 76% 106% 95% 74% 32%
For footnote references, see "Notes to Financial Highlights" on page 73. The accompanying notes are an integral part of these financial statements. 66 FREMONT MUTUAL FUNDS FREMONT MUTUAL FUNDS, INC. OCTOBER 31, 1999
EMERGING MARKETS FUND YEAR ENDED OCTOBER 31 PERIOD FROM - ----------------------------------------------------------------------------------------- 6/24/96 TO 1999 1998 1997 10/31/96 ---------- ---------- ---------- ---------- SELECTED PER SHARE DATA for one share outstanding during the period NET ASSET VALUE, BEGINNING OF PERIOD $ 5.89 $ 9.58 $ 9.62 $ 10.00 ---------- ---------- ---------- ---------- INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) (.04) .09 .17 .10 Net realized and unrealized gain (loss) 2.17 (3.64) 1.03 (.41) ---------- ---------- ---------- ---------- Total investment operations 2.13 (3.55) 1.20 (.31) ---------- ---------- ---------- ---------- LESS DISTRIBUTIONS From net investment income -- -- (.06) (.07) From net realized gains -- (.14) (1.18) -- ---------- ---------- ---------- ---------- Total distributions -- (.14) (1.24) (.07) ---------- ---------- ---------- ---------- NET ASSET VALUE, END OF PERIOD $ 8.02 $ 5.89 $ 9.58 $ 9.62 ========== ========== ========== ========== TOTAL RETURN1 36.16% -37.59% 12.55% -3.12% RATIOS AND SUPPLEMENTAL DATA Net assets, end of period (000s omitted) $ 11,588 $ 8,742 $ 12,175 $ 3,772 Ratio of net expenses to average net assets2 1.50% 1.50% .26% -- Ratio of gross expenses to average net assets2 2.77% 2.34% 2.63% 4.95%* Ratio of net investment income (loss) to average net assets -.70% .99% 2.04% 3.32%* Portfolio turnover rate 148% 135% 208% 7% U.S. MICRO-CAP FUND YEAR ENDED OCTOBER 31 - --------------------------------------------------------------------------------------------------------------------- 1999 1998 1997 1996 1995 ------------------------------------------------------------------ SELECTED PER SHARE DATA for one share outstanding during the period NET ASSET VALUE, BEGINNING OF PERIOD $ 16.34 $ 22.69 $ 19.63 $ 14.34 $ 10.34 ---------- ---------- ---------- ---------- ---------- INCOME FROM INVESTMENT OPERATIONS Net investment (loss) (.18) (.25) (.10) (.04) (.05) Net realized and unrealized gain (loss) 17.94 (4.86) 5.60 5.83 4.05 ---------- ---------- ---------- ---------- ---------- Total investment operations 17.76 (5.11) 5.50 5.79 4.00 ---------- ---------- ---------- ---------- ---------- LESS DISTRIBUTIONS From net investment income -- -- -- -- -- From net realized gains (5.74) (1.24) (2.44) (.50) -- ---------- ---------- ---------- ---------- ---------- Total distributions (5.74) (1.24) (2.44) (.50) -- ---------- ---------- ---------- ---------- ---------- NET ASSET VALUE, END OF PERIOD $ 28.36 $ 16.34 $ 22.69 $ 19.63 $ 14.34 ========== ========== ========== ========== ========== TOTAL RETURN 110.46% -23.45% 28.80%1 41.46%1 38.68%1 RATIOS AND SUPPLEMENTAL DATA Net assets, end of period (000s omitted) $ 300,503 $ 120,016 $ 171,507 $ 102,481 $ 7,792 Ratio of net expenses to average net assets3 1.82% 1.94% 1.88% 1.96% 2.04% Ratio of gross expenses to average net assets3 1.82% 1.94% 1.90% 2.22% 2.50% Ratio of net investment (loss) to average net assets -.97% -1.22% -.67% -.51% -.67% Portfolio turnover rate 164% 170% 125% 81% 144%
For footnote references, see "Notes to Financial Highlights" on page 73. The accompanying notes are an integral part of these financial statements. FREMONT MUTUAL FUNDS 67 FREMONT MUTUAL FUNDS, INC. FINANCIAL HIGHLIGHTS - OCTOBER 31, 1999
U.S. SMALL CAP FUND YEAR ENDED OCTOBER 31 PERIOD FROM - --------------------------------------------------------------------------- 9/24/97 TO 1999 1998 10/31/97 ---------- ---------- ---------- SELECTED PER SHARE DATA for one share outstanding during the period NET ASSET VALUE, BEGINNING OF PERIOD $ 8.87 $ 9.57 $ 10.00 ---------- ---------- ---------- INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) (.02) (.04) .02 Net realized and unrealized gain (loss) 7.49 (.66) (.42) ---------- ---------- ---------- Total investment operations 7.47 (.70) (.40) ---------- ---------- ---------- LESS DISTRIBUTIONS From net investment income -- --4 (.02) From net realized gains (.60) --4 (.01) ---------- ---------- ---------- Total distributions (.60) --4 (.03) ---------- ---------- ---------- NET ASSET VALUE, END OF PERIOD $ 15.74 $ 8.87 $ 9.57 ========== ========== ========== TOTAL RETURN1 84.60% -7.29% -4.06% RATIOS AND SUPPLEMENTAL DATA Net assets, end of period (000s omitted) $ 29,579 $ 7,367 $ 5,350 Ratio of net expenses to average net assets2 1.50% 1.50% 1.50%* Ratio of gross expenses to average net assets2 2.15% 2.85% 3.32%* Ratio of net investment income (loss) to average net assets -.75% -.52% 1.81%* Portfolio turnover rate 161% 273% 8% GROWTH FUND YEAR ENDED OCTOBER 31 - --------------------------------------------------------------------------------------------------------------------- 1999 1998 1997 1996 1995 ---------- ---------- ---------- ---------- ---------- SELECTED PER SHARE DATA for one share outstanding during the period NET ASSET VALUE, BEGINNING OF PERIOD $ 15.56 $ 14.96 $ 15.02 $ 13.06 $ 10.46 ---------- ---------- ---------- ---------- ---------- INCOME FROM INVESTMENT OPERATIONS Net investment income .14 .20 .20 .10 .13 Net realized and unrealized gain 3.20 .87 3.43 2.65 2.74 ---------- ---------- ---------- ---------- ---------- Total investment operations 3.34 1.07 3.63 2.75 2.87 ---------- ---------- ---------- ---------- ---------- LESS DISTRIBUTIONS From net investment income (.16) (.17) (.22) (.08) (.17) From net realized gains (3.04) (.30) (3.47) (.71) (.10) ---------- ---------- ---------- ---------- ---------- Total distributions (3.20) (.47) (3.69) (.79) (.27) ---------- ---------- ---------- ---------- ---------- NET ASSET VALUE, END OF PERIOD $ 15.70 $ 15.56 $ 14.96 $ 15.02 $ 13.06 ========== ========== ========== ========== ========== TOTAL RETURN 24.24% 7.30% 29.26% 22.06% 28.12%1 RATIOS AND SUPPLEMENTAL DATA Net assets, end of period (000s omitted) $ 142,759 $ 159,375 $ 147,641 $ 78,624 $ 59,632 Ratio of net expenses to average net assets5 .82% .82% .85% .92% .97% Ratio of gross expenses to average net assets5 .82% .82% .85% .92% 1.01% Ratio of net investment income to average net assets .82% 1.25% 1.44% .75% 1.02% Portfolio turnover rate 80% 111% 48% 129% 108%
For footnote references, see "Notes to Financial Highlights" on page 73. The accompanying notes are an integral part of these financial statements. 68 FREMONT MUTUAL FUNDS FREMONT MUTUAL FUNDS, INC. FINANCIAL HIGHLIGHTS - OCTOBER 31, 1999 REAL ESTATE SECURITIES FUND - --------------------------------------------- YEAR ENDED OCTOBER 31 DECEMBER 31, 1999 1997 ---------- ---------- SELECTED PER SHARE DATA for one share outstanding during the period NET ASSET VALUE, BEGINNING OF PERIOD $ 7.98 $ 10.00 ---------- ---------- INCOME FROM INVESTMENT OPERATIONS Net investment income .35 .19 Net realized and unrealized (loss) (.34) (2.07) ---------- ---------- Total investment operations .01 (1.88) ---------- ---------- LESS DISTRIBUTIONS From net investment income (.39) (.14) From net realized gains -- -- Return of capital distribution (.09) -- ---------- ---------- Total distributions (.48) (.14) ---------- ---------- NET ASSET VALUE, END OF PERIOD $ 7.51 $ 7.98 ========== ========== TOTAL RETURN1 -.07% -18.78% RATIOS AND SUPPLEMENTAL DATA Net assets, end of period (000s omitted) $ 31,499 $ 33,482 Ratio of net expenses to average net assets2,6 1.50% 1.09%* Ratio of gross expenses to average net assets2,6 1.88% 1.80%* Ratio of net investment income to average net assets 4.32% 4.10%* Portfolio turnover rate 198% 196%
BOND FUND YEAR ENDED OCTOBER 31 - --------------------------------------------------------------------------------------------------------------------- 1999 1998 1997 1996 1995 ---------- ---------- ---------- ---------- ---------- SELECTED PER SHARE DATA for one share outstanding during the period NET ASSET VALUE, BEGINNING OF PERIOD $ 10.44 $ 10.23 $ 9.99 $ 10.13 $ 9.29 ---------- ---------- ---------- ---------- ---------- INCOME FROM INVESTMENT OPERATIONS Net investment income .60 .60 .67 .67 .65 Net realized and unrealized gain (loss) (.60) .41 .25 .11 .83 ---------- ---------- ---------- ---------- ---------- Total investment operations -- 1.01 .92 .78 1.48 ---------- ---------- ---------- ---------- ---------- LESS DISTRIBUTIONS From net investment income (.60) (.62) (.66) (.70) (.64) From net realized gains (.18) (.18) (.02) (.22) -- ---------- ---------- ---------- ---------- ---------- Total distributions (.78) (.80) (.68) (.92) (.64) ---------- ---------- ---------- ---------- ---------- NET ASSET VALUE, END OF PERIOD $ 9.66 $ 10.44 $ 10.23 $ 9.99 $ 10.13 ========== ========== ========== ========== ========== TOTAL RETURN1 .01% 10.31% 9.54% 8.18% 16.49% RATIOS AND SUPPLEMENTAL DATA Net assets, end of period (000s omitted) $ 184,435 $ 228,001 $ 90,302 $ 70,577 $ 86,343 Ratio of net expenses to average net assets2,7 .60% .60% .61% .68% .60% Ratio of gross expenses to average net assets2,7 .67% .72% .76% .83% .75% Ratio of net investment income to average net assets 6.01% 5.92% 6.40% 6.82% 6.69% Portfolio turnover rate 298% 256% 191% 154% 21%
For footnote references, see "Notes to Financial Highlights" on page 73. The accompanying notes are an integral part of these financial statements. FREMONT MUTUAL FUNDS 69 FREMONT MUTUAL FUNDS, INC. FINANCIAL HIGHLIGHTS - OCTOBER 31, 1999
MONEY MARKET FUND YEAR ENDED OCTOBER 31 - --------------------------------------------------------------------------------------------------------------------- 1999 1998 1997 1996 1995 ---------- ---------- ---------- ---------- ---------- SELECTED PER SHARE DATA for one share outstanding during the period NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ---------- ---------- ---------- ---------- ---------- INCOME FROM INVESTMENT OPERATIONS Net investment income .05 .05 .05 .05 .06 ---------- ---------- ---------- ---------- ---------- Total investment operations .05 .05 .05 .05 .06 ---------- ---------- ---------- ---------- ---------- LESS DISTRIBUTIONS From net investment income (.05) (.05) (.05) (.05) (.06) ---------- ---------- ---------- ---------- ---------- Total distributions (.05) (.05) (.05) (.05) (.06) ---------- ---------- ---------- ---------- ---------- NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ========== ========== ========== ========== ========== TOTAL RETURN1 4.89% 5.45% 5.39% 5.34% 5.84% RATIOS AND SUPPLEMENTAL DATA Net assets, end of period (000s omitted) $ 760,950 $ 717,291 $ 433,152 $ 329,652 $ 299,312 Ratio of net expenses to average net assets2 .37% .29% .30% .31% .30% Ratio of gross expenses to average net assets2 .42% .44% .45% .46% .45% Ratio of net investment income to average net assets 4.83% 5.33% 5.26% 5.22% 5.70% CALIFORNIA INTERMEDIATE TAX-FREE FUND YEAR ENDED OCTOBER 31 - --------------------------------------------------------------------------------------------------------------------- 1999 1998 1997 1996 1995 ---------- ---------- ---------- ---------- ---------- SELECTED PER SHARE DATA for one share outstanding during the period NET ASSET VALUE, BEGINNING OF PERIOD $ 11.25 $ 10.99 $ 10.80 $ 10.86 $ 10.13 ---------- ---------- ---------- ---------- ---------- INCOME FROM INVESTMENT OPERATIONS Net investment income .51 .51 .51 .52 .53 Net realized and unrealized gain (loss) (.58) .26 .20 (.03) .73 ---------- ---------- ---------- ---------- ---------- Total investment operations (.07) .77 .71 .49 1.26 ---------- ---------- ---------- ---------- ---------- LESS DISTRIBUTIONS From net investment income (.51) (.51) (.51) (.52) (.53) From net realized gains -- -- (.01) (.03) -- ---------- ---------- ---------- ---------- ---------- Total distributions (.51) (.51) (.52) (.55) (.53) ---------- ---------- ---------- ---------- ---------- NET ASSET VALUE, END OF PERIOD $ 10.67 $ 11.25 $ 10.99 $ 10.80 $ 10.86 ========== ========== ========== ========== ========== TOTAL RETURN1 -.68% 7.16% 6.75% 4.63% 12.77% RATIOS AND SUPPLEMENTAL DATA Net assets, end of period (000s omitted) $ 63,919 $ 64,011 $ 64,309 $ 51,156 $ 50,313 Ratio of net expenses to average net assets2 .45% .47% .49% .51% .50% Ratio of gross expenses to average net assets2 .64% .67% .69% .73% .72% Ratio of net investment income to average net assets 4.59% 4.55% 4.72% 4.86% 5.08% Portfolio turnover rate 6% 9% 6% 6% 18%
For footnote references, see "Notes to Financial Highlights" on page 73. The accompanying notes are an integral part of these financial statements. 70 FREMONT MUTUAL FUNDS FREMONT MUTUAL FUNDS, INC. NOTES TO FINANCIAL HIGHLIGHTS - OCTOBER 31, 1999 The following notes are being used as referenced items in the Financial Highlights of the Funds presented on pages 66 through 70: 1 Total return would have been lower had the advisor not waived and/or reimbursed expenses. 2 See Note 2 of "Notes to Financial Statements." 3 Management fees were voluntarily waived from February 1, 1995 to January 8, 1997. 4 Distributions are less than $0.01 per share. 5 Administrative fees were voluntarily waived from August 14, 1992 to March 31, 1995. 6 Operating expenses were voluntarily limited to 0.50% prior to July 1, 1998. 7 Administrative fees were voluntarily waived in their entirety prior to March 1, 1998. 8 Less than $0.01. * Annualized The accompanying notes are an integral part of these financial statements. FREMONT MUTUAL FUNDS 71 FREMONT MUTUAL FUNDS, INC. NOTES TO FINANCIAL STATEMENTS - OCTOBER 31, 1999 1. SIGNIFICANT ACCOUNTING POLICIES Fremont Mutual Funds, Inc. (the "Investment Company") is an open-end investment company authorized to issue ten billion shares of $.0001 par value capital stock. These shares are currently offered in twelve series, ten of which are covered by this report: o the GLOBAL FUND o the INTERNATIONAL GROWTH FUND o the EMERGING MARKETS FUND o the U.S. MICRO-CAP FUND o the U.S. SMALL CAP FUND o the GROWTH FUND o the REAL ESTATE SECURITIES FUND o the BOND FUND o the MONEY MARKET FUND o the CALIFORNIA INTERMEDIATE TAX-FREE FUND (the California Intermediate Tax-Free Fund is available only to residents of Arizona, California, Colorado, Nevada, New Mexico, Oregon, Texas, Utah and Washington) Each of the Funds maintains a totally separate investment portfolio. Significant accounting policies followed by the Funds are in conformity with generally accepted accounting principles for investment companies and are summarized below. On September 28, 1999, the Board of Directors for the Investment Company approved a proposal to merge the Fremont International Small Cap Fund into the Fremont International Growth Fund, subject to shareholder approval. A. SECURITY VALUATION Investments, including options, are stated at value based on recorded closing sales on a national securities exchange or, in the absence of a recorded sale, at the mean between the last reported bid and asked prices or at fair value as determined by the Board of Directors. Short-term notes and similar securities are included in investments at amortized cost, which approximates value. Securities which are primarily traded on foreign exchanges are generally valued at the closing values of such securities on their respective exchanges or the most recent price where no closing value is available. Securities in the Money Market Fund have a remaining maturity of not more than 397 days and its entire portfolio has a weighted average maturity of not more than 90 days. As such, all of the Fund's securities are valued at amortized cost, which approximates value. If the Fund's portfolio had a remaining weighted average maturity of greater than 90 days the portfolio would be stated at value based on recorded closing sales on a national securities exchange or, in the absence of a recorded sale, at the mean between the bid and asked prices. B. SECURITY TRANSACTIONS Security transactions are accounted for as of trade date. Realized gains and losses on security transactions are determined on the basis of specific identification for both financial statement and federal income tax purposes. C. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS Dividends are recorded on the ex-dividend date, except that certain dividends from foreign securities in the Global Fund, the International Growth Fund and the Emerging Markets Fund are recorded when the Fund is informed of the ex-dividend date. Interest income and estimated expenses are accrued daily. Bond discount and premium are amortized as required by the Internal Revenue Code, as amended. The Investment Company accounts for the assets of each Fund separately and allocates general expenses of the Investment Company to each Fund based upon the relative net assets of each Fund or the nature of the services performed and their applicability to each Fund. Distributions to shareholders are recorded on the ex-dividend date. Dividends received by the Real Estate Securities Fund from its securities may be a return of capital. Such distributions reduce the cost basis of the securities, and any distributions in excess of the cost basis are recognized as realized gains. Distributions to shareholders made by the California Intermediate Tax-Free Fund during the year ended October 31, 1999, excluding capital gains distributions, were of tax-exempt income. D. INCOME TAXES The Funds' policy is to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all taxable income and net capital gains, if any, to shareholders. Therefore, no income tax provision is required. Each Fund is treated as a separate entity in the determination of compliance with the Internal Revenue Code and distributes taxable income and net realized gains, if any, in accordance with schedules described in their respective Prospectuses. The portfolio of the California Intermediate Tax-Free Fund is composed solely of issues that qualify for tax-exempt status for both federal and State of California income tax purposes. Income dividends and capital gain distributions paid to shareholders are determined in accordance with income tax regulations which may differ from generally accepted accounting principles and, therefore, may differ from the information presented in the financial statements. These differences are primarily due to differing treatments for foreign currency transactions, losses deferred due to wash sale rules, classification of gains/losses related to paydowns and certain futures and options transactions. 72 FREMONT MUTUAL FUNDS FREMONT MUTUAL FUNDS, INC. NOTES TO FINANCIAL STATEMENTS - OCTOBER 31, 1999 Permanent differences will be reclassified to paid in capital. Temporary differences, which will reverse in subsequent periods, will not be reclassified and will remain in undistributed net investment income. Any taxable income or gain remaining at fiscal year end is distributed in the following year. For Federal income tax purposes, certain funds have capital loss carryovers at October 31, 1999. Capital loss carryovers result when a fund has net capital losses during a tax year. These are carried over to subsequent years and may reduce distributions of realized gains in those years. Unused capital loss carryovers expire in eight years. The following funds have capital loss carryovers at October 31, 1999: EMERGING REAL ESTATE MARKETS SECURITIES BOND CAPITAL LOSS CARRYOVERS FUND FUND FUND --------------------------------------------------------------------------- Expiring in: 2006 $ 5,018,887 $ 2,868,690 $ -- 2007 1,168,895 3,381,180 6,473,496 --------------------------------------------------------------------------- $ 6,187,782 $ 6,249,870 $ 6,473,496 Capital loss carryovers of $5,239,292 and $765,089 for the U.S. Micro Cap Fund and the U.S. Small Cap Fund, respectively, at October 31, 1998 were utilized in the current year. Capital loss carryover of $479,317 for the Fremont Select Fund at October 31, 1998 was utilized by the Global Fund in the current year (See Note 8). E. ACCOUNTING ESTIMATES The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the amounts of income and expense during the reporting period. Actual results could differ from those estimates. F. FOREIGN CURRENCY TRANSLATION The market values of foreign securities, currency holdings, and other assets and liabilities of the Global Fund, the International Growth Fund, the Emerging Markets Fund and the Bond Fund are translated to U.S. dollars based on the daily exchange rates. Purchases and sales of securities, income and expenses are translated at the exchange rate on the transaction date. For those Funds which are allowed by the terms of their respective prospectuses to invest in securities and other transactions denominated in foreign currencies, currency gain (loss) will occur when such securities and transactions are translated into U.S. dollars. Certain transactions which result in realized currency gain (loss) are reported on the Statements of Operations as Net Realized Gain (Loss) from Foreign Currency Transactions. These are: currency gain (loss) from the sale or maturity of forward currency contracts and from the disposition of foreign currency; and the realization of currency fluctuations between trade and settlement dates on security transactions and between accrual and receipt dates on net investment income. Realized currency gain (loss) from the sale, maturity or disposition of foreign securities is not separately reported from the economic or market component of the gain (loss) and is included under the caption Net Realized Gain (Loss) from Investments. Activity related to foreign currency futures and options on foreign currency is, likewise, reported under this heading, as these instruments are used to hedge the foreign currency risks associated with investing in foreign securities. Consistent with the method of reporting realized currency gain (loss), unrealized currency gain (loss) on investments is not separately reported from the underlying economic or market component, but included under the caption Net Unrealized Appreciation (Depreciation) on Investments. Unrealized currency gain (loss) on other net assets is reported under Net Unrealized Appreciation (Depreciation) on Translation of Assets and Liabilities in Foreign Currencies. G. FORWARD FOREIGN CURRENCY CONTRACTS A forward foreign currency contract is an obligation to purchase or sell a currency against another currency at a future date and price as agreed upon by the parties. These contracts are not traded on organized commodities or securities exchanges. Losses may arise due to changes in the value of the foreign currencies or if the counterparty does not perform under the contract. The Funds may and do use forward foreign currency contracts to facilitate the settlement of foreign securities. A commitment by a Fund to purchase a currency forward allows the Fund to have the local currency on hand to settle foreign security purchases on the payment date. Likewise, a commitment to sell a currency forward allows the Fund to take the foreign currency proceeds from the sale of foreign securities and exchange it for U.S. dollars at a predetermined price. In addition, the Global Fund, the International Growth Fund and the Bond Fund use such contracts to manage their respective currency exposure. Contracts to receive generally are used to acquire exposure to foreign currencies, while contracts to deliver are used to hedge a fund's investments against currency fluctuations. A contract to receive or deliver can also be used to offset a previous contract. When required, the Funds will segregate assets in an amount sufficient to cover obligations under the hedge contract. FREMONT MUTUAL FUNDS 73 FREMONT MUTUAL FUNDS, INC. NOTES TO FINANCIAL STATEMENTS - OCTOBER 31, 1999 The market risk involved in these contracts is in excess of the amounts reflected in the Funds' Statements of Assets and Liabilities since only the change in the underlying values is reflected (as an Asset if appreciated or as a Liability if depreciated) and not the actual underlying values. At October 31, 1999, the underlying values for open foreign currency contracts were as follows:
NET UNREALIZED TO RECEIVE FOREIGN SETTLEMENT INITIAL APPRECIATION (TO DELIVER) CURRENCY DATE VALUE CURRENT VALUE (DEPRECIATION) ------------ -------- ---- ----- ------------- -------------- GLOBAL FUND (4,500,000) Australian Dollar 11/12/99 $(2,934,000) $ (2,872,530) $ 61,470 43,000 Australian Dollar 11/23/99 28,356 27,438 (918) (16,000) Australian Dollar 02/10/00 (10,635) (10,234) 401 30,000 Australian Dollar 02/17/00 19,855 19,143 (712) (61,000) Australian Dollar 02/24/00 (39,586) (39,020) 566 (9,000,000) British Pound 11/12/99 (14,566,950) (14,804,100) (237,150) (136,000) British Pound 11/30/99 (224,006) (223,693) 313 3,051,500 British Pound 12/20/99 5,031,710 5,021,243 (10,467) (2,140,000) British Pound 01/20/00 (3,575,544) (3,522,654) 52,890 (152,000) Canadian Dollar 01/19/00 (103,309) (103,578) (269) 221,000 Danish Krone 11/02/99 31,276 31,343 67 (221,000) Danish Krone 11/02/99 (30,563) (31,356) (793) (235,000) Danish Krone 11/09/99 (33,239) (33,359) (120) (336,000) Danish Krone 11/16/99 (48,585) (47,716) 869 499,000 Danish Krone 11/16/99 71,449 70,865 (584) (458,000) Danish Krone 11/23/99 (66,626) (65,071) 1,555 (1,374,000) Danish Krone 11/30/99 (196,839) (195,295) 1,544 (221,000) Danish Krone 11/30/99 (31,330) (31,412) (82) 1,076,000 Danish Krone 11/30/99 154,171 152,939 (1,232) 847,000 Danish Krone 11/30/99 122,577 120,389 (2,188) (893,000) Danish Krone 01/11/00 (129,046) (127,351) 1,695 1,693,000 Danish Krone 01/11/00 244,354 241,440 (2,914) (741,000) Danish Krone 01/18/00 (105,231) (105,708) (477) 1,004,000 Danish Krone 01/18/00 145,930 143,226 (2,704) (1,026,000) Danish Krone 02/03/00 (146,067) (146,469) (402) 2,438 Euro 11/02/99 2,565 2,571 6 (712) Euro 11/02/99 (748) (750) (2) (49,000,000) Euro 11/12/99 (53,022,900) (51,734,200) 1,288,700 954,000 Euro 11/30/99 1,005,554 1,008,569 3,015 (578,000) Euro 11/30/99 (604,788) (611,062) (6,274) (75,000) Euro 11/30/99 (78,974) (79,290) (316) 7,440,200 Euro 12/20/99 7,853,875 7,878,428 24,553 558,000 Euro 12/20/99 588,829 590,866 2,037 (932,000) Euro 12/20/99 (997,007) (986,895) 10,112 93,000 Euro 01/24/00 100,695 98,729 (1,966) (3,335,000) Euro 01/24/00 (3,556,277) (3,540,436) 15,841 16,977,324 Japanese Yen 11/02/99 162,774 162,946 172 (1,400,000,000) Japanese Yen 11/12/99 (12,394,316) (13,466,718) (1,072,402) (3,100,000,000) Japanese Yen 11/12/99 (27,057,694) (29,819,161) (2,761,467) (228,968,600) Japanese Yen 12/20/99 (2,179,097) (2,216,326) (37,229) (133,322,000) Japanese Yen 12/20/99 (1,286,023) (1,290,504) (4,481) (28,898,000) Japanese Yen 01/18/00 (278,240) (281,109) (2,869) (16,247,000) Japanese Yen 02/14/00 (152,977) (158,709) (5,732) (18,502,000) Japanese Yen 02/22/00 (180,621) (177,579) 3,042 (1,201,000) Japanese Yen 02/22/00 (11,826) (11,746) 80 (13,200,000) New Zealand Dollar 11/12/99 (6,962,340) (6,702,564) 259,776 (6,400,000) New Zealand Dollar 11/12/99 (3,396,416) (3,249,728) 146,688 (2,083,000) New Zealand Dollar 11/19/99 (1,081,077) (1,057,997) 23,080 (103,000) New Zealand Dollar 02/04/00 (53,098) (52,443) 655
74 FREMONT MUTUAL FUNDS FREMONT MUTUAL FUNDS, INC. NOTES TO FINANCIAL STATEMENTS - OCTOBER 31, 1999
NET UNREALIZED TO RECEIVE FOREIGN SETTLEMENT INITIAL APPRECIATION (TO DELIVER) CURRENCY DATE VALUE CURRENT VALUE (DEPRECIATION) ------------ -------- ---- ----- ------------- -------------- GLOBAL FUND (1,036,000) Norwegian Krone 02/08/00 $(132,312) $ (132,354) $ (42) (CONT.) (185,000) Norwegian Krone 02/15/00 (23,986) (23,635) 351 99,000 Singapore Dollar 02/02/00 59,989 59,585 (404) (96,000) Singapore Dollar 02/02/00 (57,103) (58,231) (1,128) (597,000) Singapore Dollar 02/09/00 (353,463) (362,323) (8,860) 201,000 Singapore Dollar 02/16/00 121,936 122,057 121 (42,000,000) Swedish Krona 11/12/99 (5,143,277) (5,125,326) 17,951 69,000 Swedish Krona 11/22/99 8,516 8,425 (91) (5,757,900) Swiss Franc 12/20/99 (3,805,919) (3,806,624) (705) 1,816,000 Swiss Franc 12/20/99 1,237,732 1,200,582 (37,150) 328,200 Swiss Franc 12/20/99 216,191 216,977 786 ----------- $(2,283,794) =========== INT. GROWTH FUND (387,017) Australian Dollar 01/19/00 (255,586) (247,273) $ 8,313 (7,325) British Pound 11/04/99 (11,897) (12,048) (151) (24,241) British Pound 11/04/99 (39,375) (39,874) (499) (121,336) British Pound 01/28/00 (200,982) (199,731) 1,251 (180,707) Canadian Dollar 12/07/99 (120,866) (122,905) (2,039) (156,159) Canadian Dollar 01/28/00 (105,435) (106,390) (955) (355,788) Canadian Dollar 03/23/00 (238,962) (242,577) (3,615) 11,026 Euro 11/04/99 11,897 11,631 (266) 36,491 Euro 11/04/99 39,374 38,494 (880) 112,380 Euro 12/07/99 120,866 118,831 (2,035) 606,167 Euro 12/08/99 628,231 641,021 12,790 (695,427) Euro 12/08/99 (723,522) (736,449) (12,927) 112,597 Euro 12/20/99 116,952 119,195 2,243 (111,470) Euro 12/20/99 (115,973) (118,002) (2,029) 247,390 Euro 01/19/00 255,586 262,456 6,870 622,215 Euro 01/20/00 669,659 660,170 (9,489) 252,197 Euro 01/20/00 274,233 267,581 (6,652) 98,666 Euro 01/28/00 105,435 104,744 (691) 188,080 Euro 01/28/00 200,982 199,665 (1,317) 227,399 Euro 03/23/00 238,962 242,248 3,286 152,679 Euro 03/31/00 160,175 162,786 2,611 203,438 Euro 03/31/00 213,426 216,907 3,481 (75,940,592) Japanese Yen 12/08/99 (628,231) (733,513) (105,282) 75,940,592 Japanese Yen 12/08/99 723,522 733,513 9,991 (12,247,220) Japanese Yen 12/20/99 (116,952) (118,548) (1,596) 12,247,220 Japanese Yen 12/20/99 115,973 118,548 2,575 (71,455,228) Japanese Yen 01/20/00 (669,659) (695,293) (25,634) (28,968,650) Japanese Yen 01/20/00 (274,233) (281,878) (7,645) (29,548,160) Japanese Yen 02/28/00 (274,000) (289,262) (15,262) (196,992,000) South Korean Won 03/31/00 (160,175) (164,228) (4,053) (6,937,920) Taiwan Dollar 03/31/00 (213,426) (218,586) (5,160) ----------- $ (154,766) =========== BOND FUND (5,130,000) Euro 11/30/99 (5,569,282) (5,421,897) $ 147,385 (1,208,000) New Zealand Dollar 11/05/99 (636,870) (613,471) 23,399 (793,000) New Zealand Dollar 01/21/00 (415,631) (403,740) 11,891 1,303,000 New Zealand Dollar 02/11/00 662,380 664,530 2,150 ----------- $ 184,825 ===========
FREMONT MUTUAL FUNDS 75 FREMONT MUTUAL FUNDS, INC. NOTES TO FINANCIAL STATEMENTS - OCTOBER 31, 1999 H. FUTURES A futures contract is an agreement between two parties to buy or sell a security or financial interest at a set price on a future date and is standardized and exchange-traded. Upon entering into such a contract, the purchaser is required to pledge to the broker an amount of cash or securities equal to the minimum "initial margin" requirements of the exchange on which the contract is traded. Pursuant to the contract, the purchaser agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as "variation margin" and are recorded by the purchaser as unrealized gains or losses. When the contract is closed, the purchaser records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The market risk involved in these contracts is in excess of the amounts reflected in the Funds' Statements of Assets and Liabilities. The Funds use futures contracts to seek appreciation or to reduce principal volatility. At October 31, 1999, the open futures contracts were as follows: NET UNREALIZED CONTRACTS EXPIRATION APPRECIATION TO BUY DATE (DEPRECIATION) ------ ---- -------------- GLOBAL FUND 10-yr. U.S. Treasury Note 19 Dec '99 $ 4,461 10-yr. U.S. Treasury Bond 2 Mar '00 (2,617) 30-yr. U.S. Treasury Bond 49 Dec '99 (15,065) CAC 40 10 Euro Index Future 31 Dec '99 96,938 DAX Index Future 13 Dec '99 9,039 Euro Bond Future 54 Dec '99 (44,326) Euro Notional 10-yr. Bond Future 33 Dec '99 5,014 Japanese 10-yr. Bond Future (SIMEX) 1 Dec '99 13,176 Long Gilt Future 11 Dec '99 (40,399) New FTSE 100 Index Future 30 Dec '99 7,967 Nikkei 300 Index Future (Osaka) 143 Dec '99 109,937 S&P 500 Index 54 Dec '99 233,209 TOPIX Index Future 17 Dec '99 122,221 ----------- $ 499,555 =========== GROWTH FUND S&P 500 Index 9 Dec '99 $ 51,660 ----------- $ 51,660 =========== BOND FUND 5-yr. U.S. Treasury Note 33 Dec '99 $ (8,969) 30-yr. U.S. Treasury Bond 69 Dec '99 (83,394) 30-yr. U.S. Treasury Bond 50 Mar '00 120,438 90-day Euro Dollar 128 Sep '00 (49,610) 90-day Euro Dollar 128 Dec '00 (4,988) ----------- $ (26,523) =========== Various U.S. Treasury securities, as footnoted on the Statement of Investments, were held by brokers to satisfy the initial margin requirements related to these contracts. I. OPTIONS Certain Funds may enter into options contracts. An option contract is a contract in which the writer of the option grants the buyer of the option the right to purchase from (call option) or sell to (put option) the writer a designated instrument at a specified price within a specified period of time. Certain options, including options on indices, will require cash settlement by a Fund if the option is exercised. If a Fund writes an option and the option expires unexercised, the Fund will realize a capital gain to the extent of the amount received for the option (the "premium"). If a Fund elects to close out the option, it will recognize a gain or loss based on the difference between the cost of closing the option and the initial premium received. If a Fund purchases an option and allows the option to expire, it will realize a loss to the extent of the premium paid. If a Fund elects to close out the option, it will recognize a gain or loss equal to the difference between the cost of acquiring the option and the amount realized upon the sale of the option. The gain or loss recognized by a Fund upon the exercise of a written call or purchased put option is adjusted for the amount of option premium. If a written put or purchased call option is exercised, a Fund's cost basis of the acquired security or currency would be the exercise price adjusted for the amount of the option premium. 76 FREMONT MUTUAL FUNDS FREMONT MUTUAL FUNDS, INC. NOTES TO FINANCIAL STATEMENTS - OCTOBER 31, 1999 The liability representing a Fund's obligation under an exchange traded written option or investment in the purchased option is valued at the last sale price or, in absence of a sale, the mean between the closing bid and ask prices or at the most recent ask price (bid for purchased options) if no bid and ask prices are available. Over-the-counter written or purchased options are valued using dealer-supplied quotations. When a Fund writes a covered call option, the Fund forgoes, in exchange for the premium, the opportunity to profit during the option period from an increase in the market value of the underlying security or currency above the exercise price. When a Fund writes a put option, it accepts the risk of a decline in the market value of the underlying security or currency below the exercise price. Over-the-counter options have the risk of the potential inability of counterparties to meet the terms of their contracts. A Fund's maximum exposure to purchased options is limited to the premium initially paid. In addition, certain risks may arise upon entering into options contracts, including the risk that an illiquid secondary market will limit a Fund's ability to close out an option contract prior to the expiration date, and that a change in the value of the option contract may not correlate exactly with changes in the value of the securities or currencies hedged. J. REPURCHASE AGREEMENTS As part of its cash reserve position, each Fund may enter into repurchase agreements through which the Fund acquires a security (the "underlying security") from the seller, a well-established securities dealer, or a bank that is a member of the Federal Reserve System. At that time, the bank or securities dealer agrees to repurchase the underlying security at the same price, plus a specified amount of interest at a later date, generally for a period of less than one week. The seller must maintain on a daily basis, with the Fund's custodian, collateral equal to at least 100% of the repurchase price, including accrued interest. At October 31, 1999, all outstanding repurchase agreements held by the Funds, had been entered into on October 29, 1999. K. REVERSE REPURCHASE AGREEMENTS During the year ended October 31, 1999, the Fremont Bond Fund entered into reverse purchase agreements with certain brokers. Reverse pruchase agreements involve the sale of a portfolio-eligible security by the Fund, coupled with and agreement to repurchase the security at a specified date and price. Reverse repurchase agreements involve the risk that the market value of securities pledged as collateral may decline below the repurchase price of the securities sold by the Fund which it is obligated to repurchase. Such transactions are accounted for as a borrowing by the Fund and are subject to the Fund's overall restriction on borrowing under which it must maintain asset coverage of at least 300%. The difference between the selling price and the repurchase price is accounted for as interest expense. At October 31, 1999, outstanding reverse repurchase agreements for the Fremont Bond Fund, which were collateralized by mortgage-backed securities, were as follows:
COLLATERAL AMOUNT OF REVERSE INTEREST MATURITY COST OF VALUE OF ISSUER COUNTERPARTY REPURCHASE AGREEMENTS RATE DATE COLLATERAL COLLATERAL ------------------------------------------------------------------------------------------------------------------------- FNMA Goldman Sachs & Co. $14,667,000 5.740% 01/26/00 $15,532,031 $15,277,800 FHA Goldman Sachs & Co. 6,805,000 5.740% 01/26/00 6,979,533 7,088,791 FHA Goldman Sachs & Co. 2,559,000 5.740% 01/26/00 2,766,224 2,665,158 ----------- ----------- $24,031,000 $25,031,749 =========== ===========
FNMA - Federal National Mortgage Association FHA - Federal Housing Authority For the year ended October 31, 1999, the Fremont Bond Fund had an average amount outstanding of $16,490,500 and a maximum amount outstanding of $24,031,000. L. SWAP AGREEMENTS During the year ended October 31, 1999, the Fremont Bond Fund entered into a swap agreement to protect the value of specific foreign fixed income securities. In a swap transaction, two parties agree to exchange the returns earned or realized on particular predetermined investments. The swap agreement entered by the Fund calculates the obligations of the parties to the agreement on a "net basis". The Fund's obligations will generally be equal only to the net amount to be paid or received under the agreement based on the relative values of the positions held by each party (the "net amount"). The Fund's obligations under the swap agreement will be accrued daily and any accrued but unpaid net amounts owed to a swap counterparty will be covered by the maintenance of a segregated account consisting of cash, U.S. Government securities, or high-grade debt obligations, to avoid any potential leveraging of the Fund's portfolio. The Fund bears the risk of loss of the amount expected to be received under the swap agreement in the event of the default or bankruptcy of the swap counterparty. The Fund can enter into swap agreements only with counterparties that would be eligible for consideration as repurchase agreement counterparties under the Fund's repurchase agreement guidelines. FREMONT MUTUAL FUNDS 77 FREMONT MUTUAL FUNDS, INC. NOTES TO FINANCIAL STATEMENTS - OCTOBER 31, 1999 The Fund records a net receivable or payable for the amount expected to be received or paid under the agreement. At October 31, 1999, the Fremont Bond Fund has a net payable of $42,943 due to a swap agreement. At October 31,1999, the Fremont Bond Fund had the following open swap agreements:
CREDIT NET NOTIONAL DEFAULT TERMINATION RECEIVABLE/ UNDERLYING SECURITY AMOUNT RATE DATE (PAYABLE) ------------------------------------------------------------------------------------------------ Republic of Argentina, 11.450%, 04/10/05 $ 1,700,000 5.70% 03/28/01 $(25,400) Republic of Argentina, 11.450%, 04/10/06 800,000 6.15% 03/28/01 $(17,543) ----------- -------- $ 2,500,000 $(42,943) =========== ========
2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES INVESTMENT ADVISOR The Funds each have entered into an investment management and administrative services agreement with Fremont Investment Advisors, Inc. (the "Advisor"), a majority-owned subsidiary of Fremont Investors, Inc. Under this agreement, the Advisor supervises and implements each Fund's investment activities and provides administrative services as necessary to conduct Fund business. For its advisory and administrative services, the Advisor receives a fee based on the average daily net assets of the Funds as described below.
ADVISORY FEE ADMINISTRATIVE FEE Global Fund 0.60% on all net assets 0.15% on all net assets International Growth Fund* 1.00% on all net assets 0.15% on all net assets Emerging Markets Fund* 1.00% on all net assets 0.15% on all net assets U.S. Micro-Cap Fund 2.50% on first $30 million -- 2.00% on next $70 million 1.50% on balance over $100 million U.S. Small Cap Fund* 1.00% on all net assets 0.15% on all net assets Growth Fund 0.50% on all net assets 0.15% on all net assets Real Estate Securities Fund* 1.00% on all net assets -- Bond Fund* 0.40% on all net assets 0.15% on all net assets Money Market Fund* 0.30% on first $50 million 0.15% on all net assets 0.20% on balance over $50 million California Intermediate Tax-Free Fund* 0.40% on first $25 million 0.15% on all net assets 0.35% on next $25 million 0.30% on next $50 million 0.25% on next $50 million 0.20% on balance over $150 million
*The Advisor has voluntarily waived and/or reimbursed some of its fees for these Funds. The waivers are voluntary and may be changed in the future. The Advisor is contractually obligated to limit the Funds' expenses until March 1, 2000. Investors Fiduciary Trust Company ("IFTC") serves as custodian and investment accounting agent for the Fremont Funds. All fees charged by IFTC are paid by the Funds, subject to the limitations listed above. Fees for custody services are subject to reductions by credits earned on the cash balances of the Funds held by IFTC as custodian. Ratios of expenses have been disclosed both before and after the impact of these various waivers, reimbursements and credits under each Fund's Financial Highlights table. For the Bond Fund and the Money Market Fund, all fees waived in the past cannot be recouped in the future. 78 FREMONT MUTUAL FUNDS FREMONT MUTUAL FUNDS, INC. NOTES TO FINANCIAL STATEMENTS - OCTOBER 31, 1999 For the International Growth Fund, the Emerging Markets Fund, the U.S. Small Cap Fund, the Real Estate Securities Fund and the California Intermediate Tax-Free Fund, to the extent management fees are waived and/or other expenses are reimbursed by the Advisor, a Fund may reimburse the Advisor for any reductions in the Fund's expenses during the three years following that reduction if such reimbursement is requested by the Advisor, if such reimbursement can be achieved within the foregoing expense limit, and if the Board of Directors approves the reimbursement at the time of the request as not inconsistent with the best interests of the Fund. For the International Growth Fund, the Emerging Markets Fund, the U.S. Small Cap Fund and the Real Estate Securities Fund the Advisor has voluntarily limited the total operating expenses to 1.50% of average net assets. For the year ended October 31, 1999, the Advisor reimbursed expenses of $106,709, $118,271, $98,755 and $122,813, respectively, for the International Growth Fund, the Emerging Markets Fund, the U.S. Small Cap Fund and the Real Estate Securities Fund. The Advisor has not recouped waivers and reimbursements of $125,397, $79,206, $194,288 and $258,068, respectively, from the International Growth Fund, the Emerging Markets Fund, the U.S. Small Cap Fund and the Real Estate Securities Fund as of October 31, 1999. For the Bond Fund, the Advisor has voluntarily waived 0.05% out of the 0.15% administrative free beginning on March 1, 1999. Prior to March 1, 1999, the Advisor voluntarily waived 0.10% out of the 0.15% administrative fee. For the year ended October 31, 1999, the Advisor waived administrative fees of $138,173 for the Bond Fund. For the Money Market Fund, the Advisor voluntarily waived the entire administrative fee until February 28, 1999. Beginning on March 1, 1999, the administrative fee waiver was removed. For the four months ended February 28, 1999, the Advisor waived administrative fees of $357,340 for the Money Market Fund. For the California Intermediate Tax-Free Fund, the Advisor has voluntarily limited the total operating expenses to 0.49% of average net assets beginning March 1, 1999. Prior to March 1, 1999, the Advisor voluntarily reduced the advisory and administrative fees to 0.30% and 0.005%, respectively, of average net assets. For the year ended October 31, 1999, the Advisor waived advisory, administrative fees and other expenses of $12,329, $38,965 and $73,152 respectively, for the California Intermediate Tax-Free Fund. The Advisor has not recouped waivers and reimbursements of $40,238 for the California Intermediate Tax-Free Fund as of October 31, 1999. Under the terms of the Advisory agreement, the Advisor receives a single management fee from the U.S. Micro-Cap Fund, and is obligated to pay all expenses of the Fund except extraordinary expenses (as determined by a majority of the disinterested directors) and interest, brokerage commissions, and other transaction charges relating to the investing activities of the Fund. Pursuant to Rule 12b-1 under the Investment Company Act of 1940, the International Growth Fund, the Emerging Markets Fund, the U.S. Small Cap Fund and the Real Estate Securities Fund have adopted a plan of distribution under which the Funds may directly compensate the Advisor for certain distribution-related expenses. The annual limitation for compensation to the Advisor pursuant to the plan of distribution is 0.25% of a Fund's average daily net assets. All payments are reviewed by the Board of Directors. AFFILIATED COMPANY TRANSACTIONS Investments in portfolio companies, 5% or more of whose outstanding voting securities are held by a Fund, are defined in the Investment Act of 1940 as affiliated companies. The U.S. Micro-Cap Fund had investments in such affiliated companies. A summary of transactions for each issuer who is an affiliate during the year ended October 31, 1999, follows:
SHARE AGGREGATE AGGREGATE NET SHARE BALANCE PURCHASE SALES REALIZED BALANCE VALUE ISSUER 10/31/98 COST COST GAIN/(LOSS) INCOME 10/31/99 10/31/99 - ------ -------- ---- ---- ----------- ------ -------- -------- Exigent International, Inc. -- $ 1,478,575 $ -- $ -- $ -- 317,500 $ 1,111,250 MDSI Technologies International Corp. 337,700 $ 1,337,696 $ 1,465,341 $ (295,068) $ -- 349,000 $ 4,973,250 Northern Technologies International Corp. 171,600 $ 598,692 $ -- $ -- $ 25,740 258,950 $ 1,553,700 Richey Electronics, Inc. 206,200 $ -- $ 2,165,100 $ 164,813 $ -- -- $ -- V-One Corp. 561,400 $ -- $ 1,246,163 $(2,369,232) $ -- -- $ -- ---------------------------------------------------- ----------- $ 3,414,963 $ 4,876,604 $(2,499,487) $ 25,740 $ 7,638,200 ==================================================== ===========
FREMONT MUTUAL FUNDS 79 FREMONT MUTUAL FUNDS, INC. NOTES TO FINANCIAL STATEMENTS - OCTOBER 31, 1999 OTHER RELATED PARTIES At October 31, 1999, Fremont Investors, Inc., and its affiliated companies including their employee retirement plans, its principal shareholder and members of his family, including trusts, owned directly or indirectly the following approximate percentages of the various Funds: % OF SHARES OUTSTANDING ----------- Global Fund 62% International Growth Fund 72% Emerging Markets Fund 51% U.S. Small Cap Fund 31% Growth Fund 27% Real Estate Securities Fund 4% Bond Fund 59% Money Market Fund 83% California Intermediate Tax-Free Fund 70% Certain officers and/or directors of the Funds are also officers and/or directors of the Advisor and/or Fremont Investors, Inc. None of the officers and/or directors so affiliated receive compensation for services as officers and/or directors of the Funds. 3. ORGANIZATION COSTS Costs incurred by each Fund, if any, in connection with its organization have been deferred and are amortized on a straight-line basis over a period of five years (60 months). 4. PURCHASES AND SALES/MATURITIES OF INVESTMENT SECURITIES Aggregate purchases and aggregate proceeds from sales and maturities of securities for the year ended October 31, 1999 were as follows: PURCHASES PROCEEDS --------- -------- LONG-TERM SECURITIES EXCLUDING U.S. GOVERNMENT SECURITIES: Global Fund $ 561,400,910 $ 605,912,248 International Growth Fund 32,663,146 34,960,186 Emerging Markets Fund 14,266,164 12,679,126 U.S. Micro-Cap Fund 294,319,354 274,719,700 U.S. Small Cap Fund 32,334,138 21,675,414 Growth Fund 104,772,789 127,084,862 Real Estate Securities Fund 61,342,722 59,719,782 Bond Fund 99,250,298 44,704,441 California Intermediate Tax-Free Fund 7,740,509 3,696,230 LONG-TERM U.S. GOVERNMENT SECURITIES: Global Fund $ 62,194,677 $ 65,458,780 Bond Fund 639,435,535 654,713,054 Transactions in written put and call options for the year ended October 31, 1999 for the Global Fund and the Bond Fund were as follows:
GLOBAL FUND BOND FUND AMOUNT OF PREMIUMS NUMBER OF CONTRACTS AMOUNT OF PREMIUMS NUMBER OF CONTRACTS ------------------ ------------------- ------------------ ------------------- Options outstanding at October 31, 1998 $ -- -- $ -- -- Options sold 18,548 57 851,722 4,658 Options cancelled in closing purchase transactions -- -- -- -- Options expired prior to exercise (1,650) (30) (354,334) (2,368) Options exercised -- -- (47,266) (1,100) ---------- ----- ---------- ----- Options outstanding at October 31, 1999 $ 16,898 27 $ 450,122 1,190 ========== ===== ========== =====
80 FREMONT MUTUAL FUNDS FREMONT MUTUAL FUNDS, INC. NOTES TO FINANCIAL STATEMENTS - OCTOBER 31, 1999 The following written options were outstanding at October 31, 1999:
NUMBER OF EXERCISE EXPIRATION NAME OF ISSUER CONTRACTS PRICE DATE VALUE -------------- --------- ----- ---- ----- GLOBAL FUND CALL OPTIONS: CBOT December 30-year U.S. Treasury Bond Futures 10 110.00 11/20/99 $ 625 CBOT December 30-year U.S. Treasury Bond Futures 10 120.00 11/20/99 156 PUT OPTIONS: LIF 3-month Euribor 5 96.00 09/18/00 2,267 LIF 90-day U.K. Libor 2 93.00 09/20/00 4,314 ------- $ 7,362 ======= BOND FUND CALL OPTIONS: CBOT December 30-year U.S. Treasury Bond Futures 576 120.00 11/20/99 $ 9,000 PUT OPTIONS: CBOT December 30-year U.S. Treasury Bond Futures 558 110.00 11/20/99 34,875 CME December 90-day Euro Dollar Futures 31 94.00 12/13/99 8,138 CME December 90-day Euro Dollar Futures 4 94.25 12/13/99 2,850 CME December 90-day Euro Dollar Futures 21 93.50 12/18/00 262 ------- $55,125
CBOT - Chicago Board of Trade CME - Chicago Mercantile Exchange LIF - London International Financial Futures Exchange The Global Fund and the Bond Fund received premiums of $16,898 and $450,122 on these contracts and has an unrealized gain of $9,536 and $394,997, respectively. The notional value underlying these contracts for the Global Fund and the Bond Fund are $6,500,000 and $169,800,000, respectively. 5. PORTFOLIO CONCENTRATIONS There are certain investment concentrations of risk which may subject each Fund more significantly to economic changes occurring in certain segments, industries or countries. 6. UNREALIZED APPRECIATION (DEPRECIATION) - TAX BASIS At October 31, 1999, the cost of securities for Federal income tax purposes and the gross aggregate unrealized appreciation and/or depreciation based on that cost were as follows:
GROSS AGGREGATE UNREALIZED -------------------------- COST APPRECIATION DEPRECIATION NET ---- ------------ ------------ --- Global Fund $ 651,544,097 $ 79,911,473 $ (36,689,140) $ 43,222,333 International Growth Fund 47,927,057 13,707,707 (2,120,248) 11,587,459 Emerging Markets Fund 10,344,534 1,767,851 (323,357) 1,444,494 U.S. Micro-Cap Fund 221,938,003 85,926,213 (19,898,711) 66,027,502 U.S. Small Cap Fund 23,634,685 8,485,488 (1,746,061) 6,739,427 Growth Fund 115,336,194 33,240,611 (5,976,640) 27,263,971 Real Estate Securities Fund 34,234,031 753,158 (3,538,771) (2,785,613) Bond Fund 223,602,270 1,569,123 (5,671,373) (4,102,250) Money Market Fund 759,606,882 -- -- -- California Intermediate Tax-Free Fund 62,652,905 1,635,472 (864,582) 770,890
FREMONT MUTUAL FUNDS 81 FREMONT MUTUAL FUNDS, INC. NOTES TO FINANCIAL STATEMENTS - OCTOBER 31, 1999 7. LINE OF CREDIT The Investment Company has a Line of Credit Arrangement ("LOC") with State Street Bank and Trust Company, to be used for extraordinary or emergency purposes, primarily to cover redemption payments. Each Fund's borrowings cannot exceed 20% of each Fund's net assets. Combined borrowings of all Funds cannot exceed the $75 million limit on the total line of credit. Each Fund is subject to the annual fees and interest on the unpaid balance based on prevailing market rates as defined in the LOC. At October 31, 1999, there were no such borrowings outstanding. Borrowing activity for the year ended October 31,1999 was as follows: AVERAGE MAXIMUM AMOUNT AMOUNT INTEREST OUTSTANDING OUTSTANDING EXPENSE ----------- ----------- ------- International Growth Fund $ 207,849 $ 727,000 $ 373 Emerging Markets Fund 266,697 642,000 1,302 U.S. Micro Cap Fund 325,000 325,000 198 Growth Fund 1,029,520 2,222,300 755 Real Estate Securities Fund 323,900 374,800 95 Money Market Fund 2,940,000 2,940,000 1,323 California Tax-Free Fund 392,438 912,000 1,759 ------- $ 5,805 ======= 8. SIGNIFICANT EVENTS The Fremont Select Fund ceased operation effective March 31, 1999. The Fremont Select Fund was reorganized and merged its net assets into the Fremont Global Fund. This merger was accomplished by a tax-free exchange of 300,539 shares valued at $14.19 per share of the Fremont Global Fund for the net assets of the Fremont Select Fund which aggregated $4,264,654, including $93,621 of unrealized depreciation. The combined net assets of the Fremont Global Fund immediately after the merger were $646,818,959. 82 FREMONT MUTUAL FUNDS FREMONT MUTUAL FUNDS, INC. TAX DESIGNATION (UNAUDITED) In accordance with the Internal Revenue Code, the Funds are making the following designations: LONG-TERM CAPITAL GAIN DIVIDENDS: Fremont Global Fund $41,632,444 Fremont International Growth Fund 3,612,809 Fremont Growth Fund 20,857,824 Fremont Bond Fund 2,622,442 Fremont California Intermediate Tax-Free Fund 18,742 CORPORATE DIVIDEND RECEIVED DEDUCTIONS: Fremont Global Fund 7% Fremont Growth Fund 64% Fremont California Real Estate Securities Fund 93% The Fremont International Growth Fund is designating $78,751 as foreign taxes eligible for pass-through treatment to shareholders. Please refer to the 1999 1099s for purposes of filing tax returns. FREMONT MUTUAL FUNDS 83 FREMONT MUTUAL FUNDS, INC. OCTOBER 31, 1999 This page left blank intentionally. The accompanying notes are an integral part of these financial statements. 84 FREMONT MUTUAL FUNDS FREMONT [LOGO] FUNDS 50 Beale Street, Suite 100 San Francisco, CA 94105 www.fremontfunds.com [GRAPHIC OMITTED] Distributed by First Fund Distributors, Inc., San Francisco, CA 94105 BR008-9912 -----END PRIVACY-ENHANCED MESSAGE-----