N-30D 1 e-6017.txt ANNUAL REPORT DATED 10/31/2000 [LOGO] ANNUAL REPORT October 31, 2000 Classes A, B, C, and M INTERNATIONAL EQUITY FUNDS Pilgrim Worldwide Growth Pilgrim Global Corporate Leaders Pilgrim International Value Pilgrim International Pilgrim International Core Growth Pilgrim International SmallCap Growth Pilgrim Emerging Markets Value Pilgrim Emerging Countries Pilgrim Worldwide Emerging Markets Pilgrim Global Technology Pilgrim Asia-Pacific Equity Pilgrim SmallCap Asia Growth Pilgrim Troika Dialog Russia PRECIOUS METALS FUNDS Pilgrim Gold Pilgrim Silver INTERNATIONAL INCOME FUND Pilgrim Global Income ------- Pilgrim Funds ------- TABLE OF CONTENTS -------------------------------------------------------------------------------- Letter to Shareholders .......................................... 1 Portfolio Managers' Reports: International Equity Funds ................................. 2 Precious Metals Funds ...................................... 28 International Income Fund .................................. 32 Index Descriptions .............................................. 34 Report of Independent Accountants ............................... 35 Statements of Assets and Liabilities ............................ 36 Statements of Operations ........................................ 42 Statements of Changes in Net Assets ............................. 47 Financial Highlights ............................................ 57 Notes to Financial Statements ................................... 73 Portfolios of Investments ....................................... 92 Shareholder Meetings ............................................ 135 Tax Information ................................................. 137 ------- Pilgrim Funds ------- LETTER TO SHAREHOLDERS -------------------------------------------------------------------------------- Dear Shareholder: We are pleased to present the October 31, 2000 Annual Report for the International ING Pilgrim Funds. On September 1, 2000 ING Groep N.V.(NYSE: ING) acquired Reliastar Financial Corp., the indirect parent company of Pilgrim Investments, Inc. Adviser to the Funds, Pilgrim Securities, Inc. Distributor to the Funds and Pilgrim Group, Inc, Administrator to the Funds. In conjunction with the acquisition the Adviser, Distributor and Administrator changed their names to ING Pilgrim Investments, Inc., ING Pilgrim Securities, Inc. and ING Pilgrim Group, Inc. effective September 8, 2000. Our fund family now has many funds of varying types which provide core investment choices for the serious investor. As our fund family has grown, we have taken steps to rationalize the reporting for similar funds. We have conformed all of our International Funds to an October 31 year end for financial reporting purposes. There are thirteen International Equity Funds, one International Income Fund and two Precious Metals Funds included in this Annual Report. At ING Pilgrim, we are dedicated to providing core investments for the serious investor. We believe that the key to success is matching quality core investments to the individual needs of investors. Core investments are the foundation of every portfolio and the basis of other important investment decisions. Pilgrim prides itself on providing a family of core investments designed to help you reach your financial goals. Our goal is for every investor to have a successful investment experience.SM Sincerely, ING Pilgrim Group, Inc. December 28, 2000 1 ------------- International Equity Funds ------------- Portfolio PILGRIM WORLDWIDE GROWTH FUND Managers' Report -------------------------------------------------------------------------------- Portfolio Management Team: Mary Lisanti, Portfolio Manager; Philip A. Schwartz, Portfolio Manager; Richard T. Saler, Portfolio Manager. Goal: The Fund seeks to invest at least 65% of its assets in equity securities of issuers located in at least three countries, one of which may be the U.S. The Fund generally invests at least 75% of its assets in common and preferred stocks, warrants and convertible securities. The fund may invest in countries with emerging securities markets when portfolio managers believe they present attractive opportunities. US Market: The Fund seeks to invest in equity securities the portfolio managers feel have above-average prospects for growth. The portfolio managers emphasize a growth approach by searching for companies that they believe are managing change advantageously and may be poised to exceed growth expectations. The portfolio managers focus on both a "bottom-up" analysis that evaluates the financial condition and competitiveness of individual companies and a "top-down" thematic approach and sell discipline. The portfolio managers seek to identify themes that reflect the major social, economic and technological trends that they believe are likely to shape the future of business and commerce over the next three to five years. They also seek to provide a framework for identifying the industries and companies they believe may benefit most. Foreign Markets: The portfolio managers primarily use "bottom-up" fundamental analysis to identify stocks, which they believe offer good value relative to their peers in the same industry, sector or region. They also use "top-down" analysis to identify important themes or issues which may affect the investment environment in regions or sectors, and to estimate market risks. The portfolio managers focus on various factors, including valuation, catalysts to stock price appreciation, quality of management and financial measures. Market Overview: US Market: In what is proving to be an extremely difficult year for equity investors, US markets continued to struggle during the month of October. Evidence that the US economy has slowed significantly appeared not just in macroeconomic data, but also in the earnings performance and outlook for many of the leading companies in the US and the world. While the Consumer Price Index showed a higher than expected gain of 0.50% in September, economic growth and manufacturing activity slowed significantly. Third quarter GDP reported economic growth of 2.70%, well below the expected 3.50% growth, and the National Association of Purchasing Management Index indicated a contraction in manufacturing activity with a reading of 48.3. Meanwhile, the Euro sank to an all-time low before a central bank intervention spurred a recovery late in October. As retailers voiced concerns over weak Christmas sales and other third quarter reports disappointed the markets, investors became very defensive during the month. The slowdown in the rate of change in earnings growth for technology stocks became apparent, and investors shunned the sector in favor of safer sectors such as consumer staples, basic materials, and transportation. The slowing economy and earnings growth in the technology sector weighed heavily on the US stock market in October. All of the major US indices were dragged lower during the month with the exception of the Dow Jones Industrial Average, which was helped mainly by General Electric's acquisition of fellow index-component Honeywell. The DJIA rose 3.00% in October but has now lost 4.58% in 2000. The NASDAQ Composite slumped again, falling 8.26% during the month; the technology-heavy benchmark has now lost 17.19% this year. Smaller stocks fared no better, as the Russell 2000 Index dropped 4.46% in October and has a loss of 0.47% in 2000. The S&P Midcap still has a year to date gain of 18.07% despite dropping 3.39% during the month. Foreign Markets: Structural reform and technology themes were among the positive factors driving foreign markets higher in the first six months of the fiscal year ended October 31, 2000. In the fiscal second half, concerns over rising oil prices, higher interest rates and a declining Euro caused a correction in technology shares. Sentiment was further dampened by earnings disappointments in a range of industries, along with concerns about the future strength of economic growth. The MSCI World Index gained 1.40% in the period. European markets declined as the European Central Bank raised interest rates in order to bolster the Euro. Technology heavy markets, such as Sweden and Finland, were especially weak later in the fiscal year after posting strong gains in the first half. The MSCI Japan Index fell by 7.60% during the year, relating to concerns over the sustainability of economic recovery. Many leading stocks in Japan also declined in tandem with the global technology correction. Performance: For the year ended October 31, 2000, the Pilgrim Worldwide Growth Fund's class A shares, excluding sales charges, provided a total return of 14.94% versus a gain in the MSCI World Index of 1.39% for the same period. However, The Fund fell 8.28% in October and has now lost 15.27% in the year 2000, trailing the benchmark MSCI World Index, which fell 1.66% in October and is now down 8.79% for the year. US Market: Domestically, during October, the Fund received a positive contribution from financial stocks but was dragged lower by the energy and telecommunications sectors. Among the individual stocks that contributed to performance were Adobe Systems, Comverse Technology, Microsoft, and Fannie Mae. Foreign Markets: With respect to overseas equities, lower exposure to European markets and the Euro contributed positively throughout the period. Market Outlook: US Market: While October may have been a difficult month for US markets, there are more things about the market that are clearly known. First, the economy has clearly slowed. Second, earnings growth in the technology sector is slowing while picking up in other sectors, and third, there is a shift where the users of technology are gaining more benefit from the producers of technology. While the market may be under pressure until the presidential race is resolved, we feel that the market is in the process of forming a bottom, and interest rates will probably decline from here. While the aggregate benchmarks may be challenging, active portfolio managers will have an opportunity to significantly outperform the major indices. There is a tremendous amount of secular change occurring in today's global economy, as companies struggle to adapt to rapid technological innovation. These secular changes are more powerful than the cyclical changes, and identification of these changes will be the key to navigating equity markets going forward. Foreign Markets: In the year going forward, the developing global economic slowdown is at risk of further adversely affecting earnings. In the medium and longer-term, international markets remain attractive. The positive themes of restructuring and the growing equity culture abroad are still very much in place, and will continue to spur earnings growth. 2 Portfolio Managers' Report PILGRIM WORLDWIDE GROWTH FUND -------------------------------------------------------------------------------- Portfolio Strategy: US Market: In this environment, we believe that Fund is well positioned to benefit going forward. Not all companies will be successful despite the continued growth in the US economy (albeit at a slower rate), and therefore, broad sector investments will not result in the returns of the recent past. This "market of stocks" with a wide dispersion of returns within individual sectors will create a very different market environment from the "stock market" of the last few years. In this environment, the combination of a top-down thematic approach and bottoms-up research with a focus on identifying inflection points will provide a formula for identifying stocks within the broader market that will flourish in the changing economy. Foreign Markets: The fund will continue to emphasize securities of countries that are expected to provide the best opportunities for meeting the Fund's investment objective.
4/19/93 10/93 10/94 10/95 10/96 10/97 10/98 10/99 10/31/00 ------ ------ ------ ------ ------ ------ ------ ------ ------ Pilgrim Worldwide Growth Fund Class A With Sales Charge 9,427 10,732 11,689 12,471 14,296 17,421 19,728 32,483 37,336 Pilgrim Worldwide Growth Fund Class A Without Sales Charge 10,000 11,384 12,400 13,229 15,165 18,480 20,927 34,458 39,606 MSCI World Index 10,000 10,932 11,824 13,010 15,200 17,822 20,618 25,840 26,200
Average Annual Total Returns for the periods ended October 31, 2000 ------------------------------------------------------ Since Inception Since Inception of Class A and C of Class B 1 Year 5 Year 4/19/93 5/31/95 ------ ------ ------- ------- Including Sales Charge: Class A (1) 8.32% 23.06% 19.09% -- Class B (2) 9.18% 23.61% -- 23.25% Class C (3) 13.24% 23.76% 19.28% -- Excluding Sales Charge: Class A 14.94% 24.52% 20.03% -- Class B 14.18% 23.78% -- 23.33% Class C 14.24% 23.76% 19.28% -- MSCI World Index 1.39% 15.03% 13.70%(4) 14.63%(5) Based on a $10,000 initial investment, the graph and table above illustrate the total return of Pilgrim Worldwide Growth Fund against the MSCI World Index. The Index has an inherent performance advantage over the Fund since it has no cash in its portfolio, imposes no sales charges and incurs no operating expenses. An investor cannot invest directly in an index. The Fund's performance is shown both with and without the imposition of sales charges. Total returns reflect the fact that the Investment Adviser has contractually agreed to waive or defer its management fee and to pay other operating expenses otherwise payable by the Fund, subject to possible later reimbursement during a three-year period. Total returns would have been lower had there been no deferral to the Fund. Performance data represents past performance and is no assurance of future results. Investment return and principal value of an investment in the Fund will fluctuate. Shares, when sold, may be worth more or less than their original cost. This letter contains statements that may be "forward-looking" statements. Actual results may differ materially from those projected in the "forward-looking" statements. The views expressed in this report reflect those of the portfolio manager, only through the end of the period as stated on the cover. The portfolio manager's views are subject to change at any time based on market and other conditions. Portfolio holdings are subject to change daily. (1) Reflects deduction of the maximum Class A sales charge of 5.75%. (2) Reflects deduction of the Class B deferred sales charge of 5%, 2% and 2%, respectively, for the 1 year, 5 year and since inception returns. (3) Reflects deduction of the Class C deferred sales charge of 1.00% for the 1 year return. (4) Since inception performance for the index is shown from 05/01/93. (5) Since inception performance for the index is shown from 06/01/95. Principal Risk Factor(s): Price volatility and other risks that accompany an investment in growth-oriented foreign equities. Sensitive to currency exchange rates, international political and economic conditions and other risks that affect foreign securities. The Fund may also invest in small and medium sized companies, which may be more susceptible to price availability than larger companies. Risks of foreign investing are generally intensified for investments in emerging markets. See accompanying index descriptions on page 34. 3 ------------- International Equity Funds ------------- Portfolio PILGRIM GLOBAL CORPORATE LEADERS Managers' Report -------------------------------------------------------------------------------- Portfolio Management Team: Alan Wapnick, Portfolio Manager, Philip A. Schwartz, Portfolio Manager; Richard T. Saler, Portfolio Manager. Goal: The Fund seeks to invest at least 65% of its assets in a diversified portfolio of blue chip securities that the portfolio managers believe represents "corporate leaders" in their respective industries. The Fund may invest in securities of companies and governments of the following regions: Asia (including Japan), Europe, Latin America, Africa, North America (including U.S. and Canada), and other areas and countries as the advisor decides from time to time. Market Overview: Structural reform and technology themes were among the positive factors driving foreign markets higher in the first six months of the fiscal year ended October 31, 2000. In the fiscal second half, concerns over rising oil prices, higher interest rates and a declining Euro caused a correction in technology shares. Sentiment was further dampened by earnings disappointments in a range of industries, along with concerns about the future strength of economic growth. The MSCI World Index gained 1.39% in the period. European markets declined as the European Central Bank raised interest rates in order to bolster the Euro. Technology heavy markets, such as Sweden and Finland, were especially weak later in the fiscal year after posting strong gains in the first half. The MSCI Japan Index fell by 7.60% during the year, relating to concerns over the sustainability of economic recovery. Many leading stocks in Japan also declined in tandem with the global technology correction. Performance: For the year ended October 31, 2000, the Fund's Class A shares, excluding sales charges, provided a total return of 3.74% versus a gain in the MSCI World Index of 1.39% for the same period. Portfolio Strategy: Contributing to the positive relative performance were a number of factors. In the fiscal first half, the Fund participated in the strong gains of the telecom, media and technology sectors. Stocks such as, Cisco, NEC and Ericsson rose significantly, but also helped performance by outperforming during the correction in the year's second half. The Fund also maintained positions in out of favor consumer non-durables, such as Nestle, Novartis and Diageo. These latter positions were especially helpful as money rotated out of technology and back into "old economy" sectors. Exposure to energy stocks also contributed positively to performance. Market Outlook: In the year going forward, the developing global economic slowdown is at risk of further adversely affecting earnings. The Fund will continue to emphasize the well-established, large-capitalization companies that offer a high degree of visibility. In the medium and longer-term international markets remain attractive. The positive themes of restructuring and the growing equity culture abroad are still very much in place, and will continue to spur earnings growth. 4 Portfolio Managers' Report PILGRIM GLOBAL CORPORATE LEADERS --------------------------------------------------------------------------------
10/31/90 10/91 10/92 10/93 10/94 10/95 10/96 10/97 10/98 10/99 10/31/00 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Pilgrim Global Corporate Leaders Class A With Sales Charge 9,422 10,634 10,035 13,080 14,718 14,533 17,169 19,092 20,845 26,636 27,632 Pilgrim Global Corporate Leaders Class A Without Sales Charge 10,000 11,287 10,650 13,882 15,622 15,425 18,223 20,264 22,124 28,270 29,328 MSCI World Index 10,000 11,643 11,100 14,172 15,329 16,862 19,706 23,105 26,730 33,501 33,967
Average Annual Total Returns for the periods ended October 31, 2000 -------------------------------------- 1 Year 5 Years 10 Years ------ ------- -------- Including Sales Charge: Class A (1) -2.19% 12.38% 10.70% Excluding Sales Charge: Class A 3.74% 13.71% 11.36% MSCI World Index 1.39% 15.03% 13.01% Based upon a $10,000 initial investment, the graph and table above illustrate the total return of Pilgrim Global Corporate Leaders Fund against the MSCI World Index. The Index has an inherent performance advantage over the Fund since it has no cash in its portfolio, imposes no sales charges and incurs no operating expenses. An investor cannot invest directly in an index. The Fund's performance is shown both with and without the imposition of the sales charges. Performance data represents past performance and is no assurance of future results. Investment return and principal value of an investment in the Fund will fluctuate. Shares, when sold, may be worth more or less than their original cost. This letter contains statements that may be "forward-looking" statements. Actual results may differ materially from those projected in the "forward-looking" statements. The views expressed in this report reflect those of the portfolio manager, only through the end of the period as stated on the cover. The portfolio manager's views are subject to change at any time based on market and other conditions. Portfolio holdings are subject to change daily. (1) Reflects deduction of the maximum Class A sales charge of 5.75%. Principal Risk Factor(s): Price volatility and other risks that accompany an investment in foreign equities. Sensitive to currency exchange rates, international political and economic conditions and other risks that affect foreign securities. Risks of foreign investing are generally intensified for investments in emerging markets. See accompanying index descriptions on page 34. 5 ------------- International Equity Funds ------------- Portfolio PILGRIM INTERNATIONAL VALUE FUND Managers' Report -------------------------------------------------------------------------------- Portfolio Management Team: Charles Brandes, CFA, Managing Partner; Jeff Busby, CFA, Managing Partner; Brandes Investment Partners, L.P. Goal: The Fund seeks to maximize long-term capital appreciation by investing primarily in non-U.S. companies with market capitalizations greater than $1 billion. The Fund may hold up to 25% of its assets in companies with smaller market capitalizations. The portfolio managers apply a company-by-company search for businesses that have determinable value and which, in their estimation, are currently priced below their actual value. Undervalued businesses may translate into undervalued stocks, providing what they believe to be an above-average chance for profit. Market Overview: For much of the first half of the period, solid returns among technology stocks lifted international indices to record highs. Between November 1, 1999 and March 31, 2000, gains for technology-related stocks lifted the MSCI EAFE Index 12.80%. By mid-March, however, amid concerns over higher interest rates and escalating valuation levels, investors began to shed what had been top-performing tech stocks and purchased issues in long-overlooked value sectors. Aggressive interest-rate hikes by the European Central Bank during the second quarter and the slumping euro weighed on investor confidence. As international markets fell during the summer, investors refocused on attractively priced issues. Between March 31 and the end of the period, the MSCI EAFE Index fell 13.70%. Amid these developments, emerging markets were especially vulnerable. Late in the period, stock market weakness in emerging nations was exacerbated by steep rises in oil prices. Emerging markets, many of which are net importers of oil, tend to be more sensitive to rising prices than some developed nations. Performance: For the year ended October 31, 2000, the Fund's Class A shares, excluding sales charges, provided a total return of 18.56% compared to a decline in the MSCI EAFE Index of 2.66% for the same period. Portfolio Strategy: Stock selection across a wide range of countries and sectors contributed to the Fund's significant outperformance versus the benchmark in the period. Despite overall market weakness in Japan for much of the period, the Fund's holdings in this country were among the strongest performers. Top-performing Japanese holdings included Kyocera (industrial components) and Nippon Mitsubishi (energy sources). Generally, holdings in these countries also had a positive influence on returns: Canada; Brazil; Germany; and France. With respect to sectors, stock selection in the insurance, electrical & electronics, energy sources, industrial components, and telecommunications industries tended to boost Fund returns. Among the best performing holdings in the period were Sun Life Financial (Canada -- financial services) and Alcatel (France -- electrical & electronics). Holdings in the United Kingdom and in the metals industry generally were the weakest performers during the period and detracted from overall results. The continued application of our company-by-company research and analysis changed the composition of the Fund slightly during the period. We reduced or completely eliminated positions in the insurance and electrical & electronics industries that reached price levels consistent with our estimation of the underlying business values. We redeployed assets to undervalued companies in the food & household products and beverages & tobacco industries, lifted Fund weightings in these areas. With respect to countries, we reduced exposure in France, Germany, and Japan and increased the Fund's weighting on a stock-by-stock basis in the United Kingdom. Market Outlook: The sharp declines that characterized certain segments of international markets in the period have no effect on the execution of our proven approach. We continue to find and hold what we believe are world-class businesses selling at bargain prices. Over the long term, we remain confident the strengths of these undervalued companies will be recognized. 6 Portfolio Managers' Report PILGRIM INTERNATIONAL VALUE FUND --------------------------------------------------------------------------------
3/6/95 10/95 10/96 10/97 10/98 10/99 10/31/00 ------ ------ ------ ------ ------ ------ ------ Pilgrim International Value Fund Class A With Sales Charge 9,427 9,993 11,216 14,000 15,381 20,388 24,171 Pilgrim International Value Fund Class A Without Sales Charge 10,000 10,600 11,897 14,851 16,316 21,627 25,640 MSCI EAFE Index 10,000 10,870 12,044 12,636 13,894 17,141 16,684
Average Annual Total Returns for the periods ended October 31, 2000 ----------------------------------------------------- Since inception Since Inception of Class A and C of Class B 1 Year 5 Year 03/6/95 04/18/97 ------ ------ ------- -------- Including Sales Charge: Class A (1) 11.74% 17.91% 16.87% -- Class B (2) 12.69% -- -- 18.14% Class C (3) 16.76% 18.53% 17.33% -- Excluding Sales Charge: Class A 18.56% 19.32% 18.10% -- Class B 17.69% -- -- 18.71% Class C 17.76% 18.53% 17.33% -- MSCI EAFE Index -2.66% 8.95% 9.45%(4) 9.23%(5) Based on a $10,000 initial investment, the graph and table above illustrate the total return of Pilgrim International Value Fund against the MSCI EAFE Index. The Index has an inherent performance advantage over the Fund since it has no cash in its portfolio, imposes no sales charges and incurs no operating expenses. An investor cannot invest directly in an index. The Fund's performance is shown both with and without the imposition of sales charges. Total returns reflect the fact that the Investment Adviser has contractually agreed to waive or defer its management fees and to pay other operating expenses otherwise payable by the Fund, subject to possible later reimbursement during a three-year period. Total returns would have been lower has there been no deferral to the Fund. Performance data represents past performance and is no assurance of future results. Investment return and principal value of an investment in the Fund will fluctuate. Shares, when sold, may be worth more or less than their original cost. This letter contains statements that may be "forward-looking" statements. Actual results may differ materially from those projected in the "forward-looking" statements. The views expressed in this report reflect those of the portfolio manager, only through the end of the period as stated on the cover. The portfolio manager's views are subject to change at any time based on market and other conditions. Portfolio holdings are subject to change daily. (1) Reflects deduction of the maximum Class A sales charge of 5.75%. (2) Reflects deduction of the Class B deferred sales charge of 5% and 3%, respectively, for the 1 year and since inception returns. (3) Reflects deduction of the Class C deferred sales charge of 1% for the 1 year return. (4) Since inception performance for the index is shown from 03/01/95. (5) Since inception performance for the index is shown from 05/01/97. Principal Risk Factor(s): In exchange for higher growth potential, investing in stocks of smaller companies may entail greater price volatility than those of larger companies. Price volatility and other risks that accompany an investment in foreign equities. Sensitive to currency exchange rates, international political and economic conditions and other risks that affect foreign securities. The risks of foreign investing are generally intensified for investing in emerging markets. See accompanying index descriptions on page 34. 7 ------------- International Equity Funds ------------- Portfolio PILGRIM INTERNATIONAL FUND Managers' Report -------------------------------------------------------------------------------- Portfolio Management Team: Philip A. Schwartz, Portfolio Manager; Richard T. Saler, Portfolio Manager. Goal: The Fund seeks to invest at least 65% of its assets in equity securities of issuers located in countries outside the U.S. The Fund generally invests at least 75% of its assets in common and preferred stocks, warrants and convertible securities. The Fund may invest in companies located in countries with emerging securities markets when the portfolio managers believe they present attractive investment opportunities. The portfolio managers primarily use "bottom-up" fundamental analysis to identify stocks which they believe offer good value relative to their peers in the same industry, sector or region. They also use "top-down" analysis to identify important themes or issues which may affect the investment environment in regions or sectors, and to estimate regional market risks. The portfolio managers focus on various factors, including valuation of the companies, catalysts to stock price appreciation, quality of management and financial measures. Market Overview: Structural reform and technology themes were among the positive factors driving foreign markets higher in the first six months of the fiscal year ended October 31, 2000. In the fiscal second half, concerns over rising oil prices, higher interest rates and a declining Euro caused a correction in technology shares. Sentiment was further dampened by earnings disappointments in a wide range of industries, and questions about the future strength of economic growth. The MSCI EAFE Index declined 2.66% in the period, with a Dollar translation effect accounting for much of the decline. European markets declined as the European Central Bank raised interest rates in order to bolster the Euro. Technology heavy markets, such as Sweden and Finland, were especially weak later in the fiscal year after posting strong gains in the first half. The MSCI Japan Index fell by 7.60% during the year, relating to concerns over the sustainability of economic recovery. Many leading stocks in Japan also declined in tandem with the global technology correction. Performance: For the year ended October 31, 2000, the Fund's class A shares, excluding sales charges, provided a total return of 10.53% versus a decline in the MSCI EAFE Index of 2.66% for the same period. Portfolio Strategy: Contributing to the positive relative performance were a number of factors. In the fiscal first half, smaller and mid-sized technology and telecom companies offered better value relative to more established names and delivered strong gains. The fund also maintained positions in out of favor consumer non-durables, such as Diageo, Novartis and Swedish Match. These latter positions were especially helpful as money rotated out of technology and back into "old economy" sectors. The Fund also benefited from a low weighting in large telecom companies in the second half. Overall, the decline in technology stocks not only ended the easy financing of questionable companies, but also re-focused the market's attention to companies with higher earnings visibility. Also helping performance was a higher weighting in energy stocks. Market Outlook: In the year going forward, the developing global economic slowdown is at risk of further adversely affecting earnings. The Fund will emphasize companies with higher visibility, and seek to reduce holdings with potential earnings disappointments. The managers will, however, carefully seek opportunities in telecom and technology sectors as value begins to emerge. In the medium and longer-term international markets remain attractive. The positive themes of restructuring and the growing equity culture abroad are still very much in place, and should continue to spur earnings growth. 8 Portfolio Managers' Report PILGRIM INTERNATIONAL FUND --------------------------------------------------------------------------------
1/3/94 10/94 10/95 10/96 10/97 10/98 10/99 10/31/00 ------ ------ ------ ------ ------ ------ ------ ------ Pilgrim International Fund Class A With Sales Charge 9,425 10,603 10,113 11,546 12,395 13,495 17,410 19,242 Pilgrim International Fund Class A Without Sales Charge 10,000 11,250 10,730 12,251 13,151 14,318 18,471 20,416 MSCI EAFE Index 10,000 11,276 11,268 12,485 13,100 14,403 17,769 17,295
Average Annual Total Returns for the periods ended October 31, 2000 ----------------------------------------- Since Inception 1 Year 5 Year 01/03/94 ------ ------ -------- Including Sales Charge: Class A (1) 4.20% 12.39% 10.06% Excluding Sales Charge: Class A 10.53% 13.73% 11.02% MSCI EAFE Index -2.66% 8.95% 8.35%(2) Based on a $10,000 initial investment, the graph and table above illustrate the total return of Pilgrim International Fund against the MSCI EAFE Index. The Index has an inherent performance advantage over the Fund since it has no cash in its portfolio, imposes no sales charges and incurs no operating expenses. An investor cannot invest directly in an index. The Fund's performance is shown both with and without the imposition of sales charges. Total returns reflect the fact that the Investment Adviser has contractually agreed to waive or defer its management fees and to pay other operating expenses otherwise payable by the Fund, subject to possible later reimbursement during a three-year period. Total returns would have been lower had there been no deferral to the Fund. Performance data represents past performance and is no assurance of future results. Investment return and principal value of an investment in the Fund will fluctuate. Shares, when sold, may be worth more or less than their original cost. This letter contains statements that may be "forward-looking" statements. Actual results may differ materially from those projected in the "forward-looking" statements. The views expressed in this report reflect those of the portfolio manager, only through the end of the period as stated on the cover. The portfolio manager's views are subject to change at any time based on market and other conditions. Portfolio holdings are subject to change daily. (1) Reflects deduction of the maximum Class A sales charge of 5.75%. (2) Since inception performance for the index is shown from 01/01/94. Principal Risk Factor(s): In exchange for higher growth potential, investing in stocks of smaller companies may entail greater price volatility than those of larger companies. Price volatility and other risks that accompany an investment in growth-oriented foreign equities. Sensitive to currency exchange rates, international political and economic conditions and other risks that affect foreign securities. The risks of foreign investing are generally intensified for investing in emerging markets. See accompanying index descriptions on page 34. 9 ------------- International Equity Funds ------------- PILGRIM INTERNATIONAL Portfolio CORE GROWTH FUND Managers' Report -------------------------------------------------------------------------------- Portfolio Management Team: Philip A. Schwartz, Portfolio Manager; Richard T. Saler, Portfolio Manager. Goal: The Fund seeks to invest at least 65% of its assets in equity securities of issuers located in countries outside the U.S. The Fund generally invests at least 75% of its assets in common and preferred stocks, warrants and convertible securities. The Fund may invest in companies located in countries with emerging securities markets when the portfolio managers believe they present attractive investment opportunities. The portfolio managers primarily use a "bottom-up" fundamental analysis to identify stocks which they believe offer good value relative to their peers in the same industry sector or region. The portfolio managers will invest at least 65% of the Fund's net assets in companies which, based upon a fundamental analysis of a company's earnings prospects, they believe will experience faster earnings per share growth than that of other companies located in one or more of the same market, sector or industry. They also use "top-down" analysis to identify important themes or issues which may affect the investment environment in regions or sectors, and to estimate regional market risks. The portfolio managers focus on various factors, including valuation of the companies, catalysts to stock price appreciation, quality of management and financial measures. Market Overview: Structural reform and technology themes were among the positive factors driving foreign markets higher in the first six months of the fiscal year ended October 31, 2000. In the fiscal second half, concerns over rising oil prices, higher interest rates and a declining Euro caused for a correction in technology shares. Sentiment was further dampened by earnings disappointments in a wide range of industries, and questions about the future strength of economic growth. The MSCI EAFE Index declined 2.66% in the period, with a Dollar translation effect accounting for much of the decline. European markets declined as the European Central Bank raised interest rates in order to bolster the Euro. Technology heavy markets, such as Sweden and Finland, were especially weak later in the fiscal year after posting strong gains in the first half. The MSCI Japan Index fell by 7.60% during the year, relating to concerns over the sustainability of economic recovery. Many leading stocks in Japan also declined in tandem with the global technology correction. Performance: For the year ended October 31, 2000, the Fund's Class A shares, excluding sales charges, provided a total return of 3.51% versus a decline in the MSCI EAFE Index of 2.66% for the same period. Portfolio Strategy: Contributing to positive relative performance was a strong showing by several leading technology companies in the first half of the fiscal year. Nokia, Ericcson and Nortel Networks were up enough early in the year to soften the effects of the technology correction later in the year. The Fund benefited from a relatively large weighting in energy shares as well, and an underweight position in telecom services. Overall, the decline in technology stocks not only ended the easy financing of questionable companies, but also re-focused the market's attention to companies with higher earnings visibility. Market Outlook: In the year going forward, the developing global economic slowdown is at risk of further adversely affecting earnings. The Fund will emphasize companies with higher visibility, and seek to reduce holdings with potential earnings disappointments. The managers will, however, carefully seek opportunities in telecom and technology sectors as value begins to emerge. In the medium and longer-term international markets remain attractive. The positive themes of restructuring and the growing equity culture abroad are still very much in place, and should continue to spur earnings growth. 10 Portfolio PILGRIM INTERNATIONAL Managers' Report CORE GROWTH FUND --------------------------------------------------------------------------------
2/28/97 10/97 10/98 10/99 10/31/00 ------ ------ ------ ------ ------ Pilgrim International Core Growth Fund Class A With Sales Charge 9,427 11,139 12,060 16,598 17,181 Pilgrim International Core Growth Fund Class A Without Sales Charge 10,000 11,816 12,793 17,607 18,225 MSCI EAFE Index 10,000 10,412 11,448 14,124 13,747
Average Annual Total Returns for the periods ended October 31, 2000 -------------------------------------- Since Inception 1 Year 02/28/97 ------ -------- Including Sales Charge: Class A (1) -2.45% 15.89% Class B (2) -2.27% 16.50% Class C (3) 1.67% 16.89% Excluding Sales Charge Class A 3.51% 17.77% Class B 2.61% 17.04% Class C 2.65% 16.89% MSCI EAFE Index -2.66% 9.07%(4) Based on a $10,000 initial investment, the graph and table above illustrate the total return of Pilgrim International Core Growth Fund against the MSCI EAFE Index. The Index has an inherent performance advantage over the Fund since it has no cash in its portfolio, imposes no sales charges and incurs no operating expenses. An investor cannot invest directly in an index. The Fund's performance is shown both with and without the imposition of sales charges. Total returns reflect the fact that the Investment Adviser has contractually agreed to waive or defer its management fee and to pay other operating expenses otherwise payable by the Fund, subject to possible later reimbursement during a three-year period. Total returns would have been lower had there been no deferral to the Fund. Performance data represents past performance and is no assurance of future results. Investment return and principal value of an investment in the Fund will fluctuate. Shares, when sold, may be worth more or less than their original cost. This letter contains statements that may be "forward-looking" statements. Actual results may differ materially from those projected in the "forward-looking" statements. The views expressed in this report reflect those of the portfolio manager, only through the end of the period as stated on the cover. The portfolio manager's views are subject to change at any time based on market and other conditions. Portfolio holdings are subject to change daily. (1) Reflects deduction of the maximum Class A sales charge of 5.75%. (2) Reflects deduction of the Class B deferred sales charge of 5% and 3%, respectively, for the 1 year and since inception returns. (3) Reflects deduction of the Class C deferred sales charge of 1.00% for 1 year return. (4) Since inception performance for the index is shown from 03/01/97. Principal Risk Factor(s): Price volatility and other risks that accompany an investment in growth-oriented foreign equities. Sensitive to currency exchange rates, international political and economic conditions and other risks that affect foreign securities. Risks of foreign investing are generally intensified for investments in emerging markets. See accompanying index descriptions on page 34. 11 ------------- International Equity Funds ------------- PILGRIM INTERNATIONAL Portfolio SMALLCAP GROWTH FUND Managers' Report -------------------------------------------------------------------------------- Portfolio Management Team: Catherine Somhegyi, Chief Investment Officer,Loretta J. Morris, Partner, Portfolio Manager; Randall S. Kahn, CFA, Portfolio Manager; Lawrence S. Speidell, CFA, Partner, Director of Global/Systematic Portfolio Management and Research; Pedro V. Marcal, Partner, Portfolio Manager; Ernesto Ramos, Ph.D., Portfolio Manager; Jason Campbell, Portfolio Manager; Jessica Goncalves, Portfolio Manager; Melisa Grigolite, Portfolio Manager; Christopher Angioletti, Portfolio Manager; Jon Borchardt, Investment Analyst; John Casarietti, Investment Analyst; Rebecca Hagstrom, CFA, Investment Analyst; Christopher Herrera, Investment Analyst; Theodora Jamison, Investment Analyst; David Lopez, Investment Analyst; Eric Sagmeister, Investment Analyst; Andrew Parmet, Investment Analyst; Jacob Pozharny, Investment Analyst; Rolf Schild, Investment Analyst; Nicholas-Applegate, Capital Management. Goal: The Fund seeks to maximize long-term capital appreciation through investing primarily in companies located outside the United States corresponding to the lower 25% market capitalization within each country. Market Overview: International small-cap stocks registered declines for the four months ended October 31, 2000. A variety of factors sent equity prices lower including higher energy prices, rising interest rates in Europe, a slowing US economy and continuing structural problems in Japan. In Japan, positive developments, such as the continued rise in the country's industrial production and increasing job offers, were overshadowed by worries over the impact of a United States-led global economic slowdown of Asian economies, which rely heavily on exports. Japan is one of Asia's top exporters. The European Central Bank (ECB), which sets monetary policy for the 11-nation euro zone, raised short-term interest rates by one-quarter point in early October. The move was aimed at stifling inflationary pressures that are exacerbated by a weak euro and high oil prices. Rising interest rates make it more expensive for consumers and companies to borrow money, which tends to curb spending and ease inflationary pressures. The Salomon EPAC EMI Index dropped 11.00% for the four month period ended October 31, 2000. Performance: For the year ended October 31, 2000, the Fund's Class A shares, excluding sales charge, provided a total return of 27.62% versus a decline of 2.17% for the Salomon EPAC EMI Index. Portfolio Specifics: Stock selection in the technology, energy and healthcare services sectors had a positive contribution to performance. On the country level, stock selection and underweighting in Japan relative to the benchmark helped returns, as did investments in Switzerland. Holdings in the United Kingdom and Germany were negative contributors to performance. The Fund also had a significant weighting in Canada, where the benchmark had no exposure. We are finding particularly exciting opportunities on a company-by-company basis among energy companies, such as Anderson Exploration and Petro-Canada. Market Outlook: We remain optimistic about the investment potential for international small cap stocks due to many positive factors, including: * Continued advances in technology and structural reforms that are reshaping the world's business landscape and creating opportunities for smaller companies. * The emergence of stock markets such as Neuer Markt in Germany, Nouveau Marche in France, Mothers Exchange in Japan, and Nasdaq Japan which provide new avenues for investors to gain access to smaller, high-growth companies outside the United States. In this environment, we are confident that by adhering to our strict investment philosophy we will seek to continue to identify international companies with superior growth prospects. 12 Portfolio PILGRIM INTERNATIONAL Managers' Report SMALLCAP GROWTH FUND --------------------------------------------------------------------------------
8/31/94 10/94 10/95 10/96 10/97 10/98 10/99 10/31/00 ------ ----- ----- ------ ------ ------ ------ ------ Pilgrim International SmallCap Growth Fund Class A With Sales Charge 9,427 9,374 9,064 10,556 12,882 14,898 26,255 33,506 Pilgrim International SmallCap Growth Fund Class A Without Sales Charge 10,000 9,944 9,615 11,198 13,666 15,803 27,851 35,543 Salomon EPAC EMI Index 10,000 9,882 9,398 10,529 10,048 10,161 11,994 11,734
Average Annual Total Returns for the periods ended October 31, 2000 ---------------------------------------------------- Since Inception Since Inception of Class B of Class A & C 1 Year 5 Year 5/31/95 08/31/94 ------ ------ ------- -------- Including Sales Charge: Class A (1) 20.29% 28.36% -- 21.65% Class B (2) 21.98% 28.98% 26.80% -- Class C (3) 25.92% 29.08% -- 21.93% Excluding Sales Charge: Class A 27.62% 29.88% -- 22.82% Class B 26.98% 29.12% 26.87% -- Class C 26.92% 29.08% -- 21.93% Salomon EPAC EMI Index -2.17% 4.54% 4.12%(4) 2.63%(5) Based on a $10,000 initial investment, the graph and table above illustrate the total return of Pilgrim International SmallCap Growth Fund against the Salomon EPAC EMI Index. The Index has an inherent performance advantage over the Fund since it has no cash in its portfolio, imposes no sales charges and incurs no operating expenses. An investor cannot invest directly in an index. The Fund's performance is shown both with and without the imposition of sales charges. Total returns reflect the fact that the Investment Adviser has contractually agreed to waive or defer its management fee and to pay other operating expenses otherwise payable by the Fund, subject to possible later reimbursement during a three-year period. Total returns would have been lower had there been no deferral to the Fund. Performance data represents past performance and is no assurance of future results. Investment return and principal value of an investment in the Fund will fluctuate. Shares, when sold, may be worth more or less than their original cost. This letter contains statements that may be "forward-looking" statements. Actual results may differ materially from those projected in the "forward-looking" statements. The views expressed in this report reflect those of the portfolio manager, only through the end of the period as stated on the cover. The portfolio manager's views are subject to change at any time based on market and other conditions. Portfolio holdings are subject to change daily. (1) Reflects deduction of the maximum Class A sales charge of 5.75%. (2) Reflects deduction of the Class B deferred sales charge of 5%, 2% and 2%, respectively, for the 1 year, 5 year and since inception returns. (3) Reflects deduction of the Class C deferred sales charge of 1.00% for the 1 year return. (4) Since inception performance for the index is shown from 06/01/95. (5) Since inception performance for the index is shown from 09/01/94. Principal Risk Factor(s): In exchange for higher growth potential, investing in stocks of smaller companies may entail greater price volatility than investing in larger companies. Price volatility and other risks that accompany an investment in growth-oriented foreign equities. Sensitive to currency exchange rates, international political and economic conditions and other risks that affect foreign securities. Risks of foreign investing are generally intensified for investments in emerging markets. See accompanying index descriptions on page 34. 13 ------------- International Equity Funds ------------- Portfolio PILGRIM EMERGING MARKETS VALUE FUND Managers' Report -------------------------------------------------------------------------------- Portfolio Management Team: Charles Brandes, CFA, Managing Partner; Ian Sunder, CFA, Portfolio Manager; Brandes Investment Partners, L.P. Goal: The Fund seeks to maximize long-term capital appreciation by investing primarily in companies located in countries with emerging markets, including companies that may be smaller and lesser-known. The portfolio managers apply a company-by-company search for businesses that have determinable value and which, in their estimation, are currently priced below their actual value. Undervalued businesses may translate into undervalued stocks, providing what they believe to be an above-average chance for profit. Market Overview: Similar to developed overseas markets, stocks in emerging countries surged during the first few months of the period. During the five months ended March 31, 2000, the MSCI EMF Index declined 27.50%. Growth stocks, extending on gains from recent years, continued to hold investor favor. Value stocks were largely overlooked. During the second quarter, a variety of developments dragged emerging equity markets lower including fears over higher interest rates, currency concerns, political instability, and slumping technology stocks. Investors reevaluated the growth prospects and valuations associated with many issues that contributed to markets' solid advances. As a result, they shed high-multiple growth stocks, especially in the technology sector, and refocused on more attractively priced issues. While steep declines for tech stocks dragged the Index down, value stocks showed their mettle. Later in the period, soaring oil prices proved a significant detriment to stocks in emerging markets. Many emerging countries, as net importers of oil, faced heavy constraints on economic output due to higher fuel costs. In addition, expectations that a similar drag on economies worldwide would crimp imports drained investor optimism, as many emerging nations are export-dependent. Later in the period, as worries over corporate profitability and economic slowing surfaced, higher-multiple stocks continued to tumble. From April 1, 2000 to the end of the period, the MSCI EMF fell 27.50%. Performance: For the year ended October 31, 2000, the Fund's Class A shares, excluding sales charges, gained 0.60% compared to a decline in the MSCI EMF Index of 8.81% for the same period. During the five months ended March 31, 2000, the MSCI EMF Index declined 27.50%. Growth stocks, extending on gains from recent years, continued to hold investor favor. Value stocks were largely overlooked. Portfolio Strategy: Stock selection, especially in Brazil, was the primary reason the Fund outperformed the benchmark by such a significant margin during the period. Among the best-performing holdings in Brazil were Companhia de Bebidas das Americas (beverages & tobacco), Petroleo Brasileiro (energy sources), and Telecomunicacoes de Sao Paulo (telecommunications). Generally, holdings in the following countries also contributed to strong returns: Mexico, Russia, Turkey, and Hungary. Stock selection in the following sectors also had a positive influence on returns in the period: energy sources, utilities, electrical & electronic, and telecommunications. Among the better-performing holdings in these industries were Telefonica de Argentina (Argentina -- telecommunications), Shandong Huaneng Power (China -- utilities), and Solid Group (Philippines -- electrical & electronic). Declines among holdings in Hong Kong, India, and South Africa, as well as within the food & household products, multi-industry, and textile industries negatively affected results. The continued application of our bottom-up stock selection resulted in changes in the Fund's composition during the period. We reduced exposure in a number of industries and increased weighting in the following sectors on a stock-specific basis: utilities; beverages & tobacco; and energy sources. With respect to countries, we trimmed exposure in the Philippines and India and increased weighting in Brazil and China. Market Outlook: We believe the developments that contributed to declines in emerging markets over the short term will have little long-term effect on the fundamental strengths of portfolio holdings. We remain confident that the portfolios' strengths will be recognized over the long term. In addition, evidence of continued emphasis on enhancing shareholder equity, privatization, and reduced barriers to trade among emerging markets create an environment conducive to long-term capital appreciation. 14 Portfolio Managers' Report PILGRIM EMERGING MARKETS VALUE FUND -------------------------------------------------------------------------------- 1/1/98 10/98 10/99 10/31/00 ------ ----- ------ ------ Pilgrim Emerging Markets Value Fund Class A With Sales Charge 9,425 7,248 10,254 10,316 Pilgrim Emerging Markets Value Fund Class A Without Sales Charge 10,000 7,690 10,880 10,945 MSCI EMF Index 10,000 6,994 10,115 9,224 Average Annual Returns for the periods ended October 31, 2000 -------------------------------------- Since Inception 1 Year 01/01/98 ------ -------- Including Sales Charge: Class A(1) -5.17% 1.10% Class B(2) -4.92% 1.49% Class C(3) -1.09% 2.45% Excluding Sales charge Class A 0.60% 3.24% Class B -0.12% 2.52% Class C -0.09% 2.45% MSCI EMF Index -8.81% -2.81% Based on a $10,000 initial investment, the graph and table above illustrate the total return of Pilgrim Emerging Markets Value Fund against the MSCI EMF Index. The Index has an inherent performance advantage over the Fund since it has no cash in its portfolio, imposes no sales charges and incurs no operating expenses. An investor cannot invest directly in an index. The Fund's performance is shown both with and without the imposition of sales charges. Performance data represents past performance and is no assurance of future results. Investment return and principal value of an investment in the Fund will fluctuate. Shares, when sold, may be worth more or less than their original cost. This letter contains statements that may be "forward-looking" statements. Actual results may differ materially from those projected in the "forward-looking" statements. The views expressed in this report reflect those of the portfolio manager, only through the end of the period as stated on the cover. The portfolio manager's views are subject to change at any time based on market and other conditions. Portfolio holdings are subject to change daily. (1) Reflects deduction of the maximum Class A sales charge of 5.75%. (2) Reflects deduction of the Class B deferred sales charge of 5% and 4%, respectively, for the 1 year and since inception returns. (3) Reflects deduction of a deferred sales charge of 1% for the 1 year return. Principal Risk Factor(s): Price volatility and other risks that accompany an investment in equities from emerging countries. Sensitive to currency exchange rates, international political and economic conditions and other risks that affect foreign securities. See accompanying index descriptions on page 34. 15 ------------- International Equity Funds ------------- Portfolio PILGRIM EMERGING COUNTRIES FUND Managers' Report -------------------------------------------------------------------------------- Portfolio Management Team: Richard Saler, Portfolio Manager; Philip Schwartz, Portfolio Manager Goal: The Fund seeks to invest at least 65% of its assets in securities of issues located in at least three countries with emerging securities markets. In selecting stocks, the Advisor uses a "bottom-up" fundamental analysis to indentify companies which it believes have good earnings growth prospects and that can be bought at a price which seems reasonable. Market Overview: It was a difficult year for emerging market equities. The MSCI Emerging Market Free Index declined 8.81%. Among the worst performing markets were Indonesia (-57%), Philippines (-49%), and Thailand (-43%). Latin America fared much better than Asia as Brazil gained 39% and Mexico advanced 18%. Part of the dismal returns in Asia can be attributed to weak currencies, political unrest, and a slowing of economic reform. Latin America benefitted from a strong US economy and progress on economic and political reform. Performance: For the year ended October, 31, 2000, the Fund's Class A shares excluding sales charges, declined 0.55% versus a decline of 8.81% for the MSCI EMF Index. Portfolio Specifics: Performance was aided by a relatively large weighing in Latin America. However, poorly performing technology and telecommunication shares pulled returns lower. Defensive stocks such as Israel's Teva Pharmaceutical were among the highest returning stocks in the portfolio. Other strong performers included Mexico's Grupo Televisa and Tubos de Acero de Mexico. Market Outlook: After a long period of underperformance, emerging markets appear to offer excellent long term value. Downside risk also appears limited due to cheap currencies and a lack of speculative excess in most developing economies. The major risk to emerging market stocks would be a further spike in oil prices or a hard US economic landing. Long term investors may want to ignore this short term noise and add to quality companies which are now selling at attractive price levels. Asian markets such as Korea and Taiwan look particularly inviting after the steep declines suffered by many leading global companies. 16 Portfolio Managers' Report PILGRIM EMERGING COUNTRIES FUND --------------------------------------------------------------------------------
11/28/94 10/95 10/96 10/97 10/98 10/99 10/31/00 ------ ------ ------ ------ ------ ------ ------ Pilgrim Emerging Countries Fund Class A With Sales Charge 9,427 9,617 11,641 13,267 9,825 13,637 13,562 Pilgrim Emerging Countries Fund Class A Without Sales Charge 10,000 10,202 12,348 14,074 10,422 14,466 14,387 MSCI EMF Index 10,000 8,501 9,052 8,284 5,717 9,010 7,540
Average Annual Total Returns for the periods ended October 31, 2000 ---------------------------------------------------- Since Inception Since Inception of Class A and C of Class B 1 Year 5 Year 11/28/94 05/31/95 ------ ------ -------- -------- Including Sales Charge: Class A (1) -6.26% 5.85% 5.27% -- Class B (2) -6.14% 6.27% -- 6.23% Class C (3) -2.18% 6.58% 5.42% -- Excluding Sales Charge: Class A -0.55% 7.12% 6.33% -- Class B -1.20% 6.58% -- 6.37% Class C -1.19% 6.58% 5.42% -- MSCI EMF Index -8.81% -2.37% -4.66%(4) -2.95%(5) Based on a $10,000 initial investment, the graph and table above illustrate the total return of Pilgrim Emerging Countries Fund against the MSCI EMF Index. The Index has an inherent performance advantage over the Fund since it has no cash in its portfolio, imposes no sales charges and incurs no operating expenses. An investor cannot invest directly in an index. The Fund's performance is shown both with and without the imposition of sales charges. Total returns reflect the fact that the Investment Adviser has contractually agreed to waive or defer its management fees and to pay other operating expenses otherwise payable by the Fund, subject to possible later reimbursement during a three-year period. Total returns would have been lower had there been no deferral to the Fund. Performance data represents past performance and is no assurance of future results. Investment return and principal value of an investment in the Fund will fluctuate. Shares, when sold, may be worth more or less than their original cost. This letter contains statements that may be "forward-looking" statements. Actual results may differ materially from those projected in the "forward-looking" statements. The views expressed in this report reflect those of the portfolio manager, only through the end of the period as stated on the cover. The portfolio manager's views are subject to change at any time based on market and other conditions. Portfolio holdings are subject to change daily. (1) Reflects deduction of the maximum Class A sales charge of 5.75%. (2) Reflects deduction of the Class B deferred sales charge of 5%, 2% and 2%, respectively, for the 1 year, 5 year and since inception returns. (3) Reflects deduction of the Class C deferred sales charge of 1.00% for the 1 year return. (4) Since inception performance for the index is shown from 12/01/94. (5) Since inception performance for the index is shown from 06/01/95. Principal Risk Factor(s): Sensitive to currency exchange rates, international political and economic conditions and other risks that affect foreign securities. Risks of foreign investing are generally intensified for investments in emerging markets. See accompanying index descriptions on page 34. 17 ------------- International Equity Funds ------------- PILGRIM WORLDWIDE Portfolio EMERGING MARKETS FUND Managers' Report -------------------------------------------------------------------------------- Portfolio Management Team: Richard Saler, Portfolio Manager; Philip Schwartz, C.F.A., Portfolio Manager Goal: The Fund seeks to invest at least 65% of its assets in securities of issues located in at least three countries with emerging securities markets. In selecting stocks, the Advisor uses a "bottom-up" fundamental analysis to indentify companies which it believes have good earnings growth prospects and that can be bought at a price which seems reasonable. Market Overview: It was a difficult year for emerging market equities.The MSCI EAFE Index declined 2.66%. Among the worst performing markets were Indonesia (-57%), Philippines (-49%), and Thailand (-43%). Latin America fared much better than Asia as Brazil gained 39% and Mexico advanced 18%. Part of the dismal returns in Asia can be attributed to weak currencies, political unrest, and a slowing of economic reform. Latin America benefitted from a strong US economy and progress on economic and political reform. Performance: For one year ended October, 31, 2000, the Fund's Class A shares, exluding sales charges, declined 5.10% versus a decline of 2.66% for the MSCI EAFE Index. Portfolio Specifics: Performance was aided by a relatively large weightings in Technoloy stocks which enjoyed sharp gains up until March of 2000. Much of the large outperformance was lost as technology stocks suffered large declines over the last six months. Especially hard hit in the second half were smaller companies in South Korea and India which had previously enjoyed spectacular gains. Market Outlook: After a long period of underperformance emerging markets appear to offer excellent long term value. Downside risk also appears limited due to cheap currencies and a lack of speculative excess in most developing economies. The major risk to emerging market stocks would be a further spike in oil prices and or a hard US economic landing. Long term investors may want to ignore this short term noise and add to quality companies which are now selling at attractive price levels. Asian markets such as Korea and Taiwan look particularly inviting after the steep declines suffered by many global leading companies. 18 Portfolio PILGRIM WORLDWIDE Managers' Report EMERGING MARKETS FUND --------------------------------------------------------------------------------
10/31/90 10/91 10/92 10/93 10/94 10/95 10/96 10/97 10/98 10/99 10/31/00 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Pilgrim Worldwide Emerging Markets Fund Class A With Sales Charge 9,428 12,509 13,231 17,883 21,315 17,297 18,293 17,311 11,210 15,338 14,556 Pilgrim Worldwide Emerging Markets Fund Class A Without Sales Charge 10,000 13,268 14,033 18,968 22,608 18,346 19,402 18,361 11,890 16,269 15,440 MSCI EAFE Index 10,000 10,732 9,347 12,887 14,225 14,216 15,751 16,526 18,171 22,417 21,820
Average Annual Total Returns for the periods ended October 31, 2000 -------------------------------------- 1 Year 5 Years 10 Years ------ ------- -------- Including Sales Charge: Class A (1) -10.53% -4.53% 3.83% Excluding Sales Charge: Class A -5.10% -3.39% 4.44% MSCI EAFE Index -2.66% 8.95% 8.11% Based on a $10,000 initial investment, the graph and table above illustrate the total return of Pilgrim Worldwide Emerging Markets Fund against the MSCI EAFE Index. The Index has an inherent performance advantage over the Fund since it has no cash in its portfolio, imposes no sales charges and incurs no operating expenses. An investor cannot invest directly in an index. The Fund's performance is shown both with and without the imposition of sales charges. Total returns reflect the fact that the Investment Adviser has contractually agreed to waive or defer its management fee and to pay other operating expenses otherwise payable by the Fund, subject to possible later reimbursement during a three-year period. Total returns would have been lower had there been no deferral to the Fund. Performance data represents past performance and is no assurance of future results. Investment return and principal value of an investment in the Fund will fluctuate. Shares, when sold, may be worth more or less than their original cost. This letter contains statements that may be "forward-looking" statements. Actual results may differ materially from those projected in the "forward-looking" statements. The views expressed in this report reflect those of the portfolio manager, only through the end of the period as stated on the cover. The portfolio manager's views are subject to change at any time based on market and other conditions. Portfolio holdings are subject to change daily. (1) Reflects deduction of the maximum Class A sales charge of 5.75%. Principal Risk Factor(s): Sensitive to currency exchange rates, international political and economic conditions and other risks that affect foreign securities. Risks of foreign investing are generally intensified for investments in emerging markets. See accompanying index descriptions on page 34. 19 ------------- International Equity Funds ------------- Portfolio Managers' Report PILGRIM GLOBAL TECHNOLOGY FUND -------------------------------------------------------------------------------- Portfolio Management Team: Richard Saler, Portfolio Manager; Philip Schwartz, C.F.A., Portfolio Manager Goal: The Fund seeks long term growth of capital by investing at least 80% of its total assets in equity equivalents of technology or information infrastructure related companies. Market Overview: Technology stocks have taken investors for a roller coaster ride over the last year. After enjoying spectacular gains in the calender fourth quarter of 1999 and into the first quarter of 2000, technology stocks have since declined sharply. Investors became overly optimistic on even the most speculative business plans and as valuations soared to the sky a sharp fall became inevitable. Performance: The Fund has not been in existence for one year. Since inception (12/27/99) through October 31, 2000, the Fund's Class A shares, excluding sales charges declined 21.40%. The PSE Technology Index gained 4.72% for the period ended October 31, 2000. Portfolio Specifics: A heavy weighting in internet related companies along with a high exposure to smaller companies in Japan, South Korea, and India contributed the bulk of the negative returns. Larger more established companies such as French telecom supplier Alcatel and Japan's Sony were strong performers. Market Outlook: Given the sharp fall in technology equity prices the long term outlook has improved greatly. Those companies which can execute and deliver strong earnings growth are now priced to deliver attractive long term returns.The risk remains high however due to a slowdown in global growth. Emphasis must be placed on financially sound companies most likely to deliver high growth in sales and profits. The internet, mobile telephone and broadband applications will continue to offer exciting long term investment opportunities. 20 Portfolio Managers' Report PILGRIM GLOBAL TECHNOLOGY FUND -------------------------------------------------------------------------------- 12/27/99 10/31/00 ------ ------ Pilgrim Global Technology Fund Class A With Sales Charge 9,425 7,408 Pilgrim Global Technology Fund Class A Without Sales Charge 10,000 7,860 PSE Technology Index 10,000 10,472 Total Returns Since Inception 12/27/99 --------------- Including Sales Charge: Class A (1) -25.92% Excluding Sales Charge: Class A -21.40% PSE Technology Index 4.72% Based on a $10,000 initial investment, the graph and table above illustrate the total return of Pilgrim Global Technology Fund against the PSE Technology Index. The Index has an inherent performance advantage over the Fund since it has no cash in its portfolio, imposes no sales charges and incurs no operating expenses. An investor cannot invest directly in an index. The Fund's performance is shown both with and without the imposition of sales charges. Total returns reflect the fact that the Investment Adviser has contractually agreed to waive or defer its management fee and to pay other operating expenses otherwise payable by the Fund, subject to possible later reimbursement during a three-year period. Total returns would have been lower had there been no deferral to the Fund. Performance data represents past performance and is no assurance of future results. Investment return and principal value of an investment in the Fund will fluctuate. Shares, when sold, may be worth more or less than their original cost. This letter contains statements that may be "forward-looking" statements. Actual results may differ materially from those projected in the "forward-looking" statements. The views expressed in this report reflect those of the portfolio manager, only through the end of the period as stated on the cover. The portfolio manager's views are subject to change at any time based on market and other conditions. Portfolio holdings are subject to change daily. (1) Reflects deduction of the maximum Class A sales charge of 5.75%. Principal Risk Factor(s): International investing involves special risks considerations including currency fluctuations, lower liquidity, political and economic uncertainties and differences in accounting standards. The Fund concentrates its investments in information technology-related companies and will tend to experience greater volatility than funds with more diversified portfolios. See accompanying index descriptions on page 34. 21 ------------- International Equity Funds ------------- Portfolio PILGRIM ASIA-PACIFIC EQUITY FUND Managers' Report -------------------------------------------------------------------------------- Portfolio Management Team: David Stuart, Regional CIO, Asia Pacific; Marcus Pakenham, Director; Sam Lau, Director; Richard Wong, Associate Director; Leilani Lam, Associate Director; Simon Yap, Associate Director; Seng-Keong Wan, Senior Investment Manager; Vernon Yu, Senior Investment Manager; Losa Mak, Investment Manager; Krista Yue, Investment Manager; Tytus Michalski, Investment Manager; Martha Wang, Executive; HSBC Asset Management (Americas), Inc., HSBC Asset Management (Hong Kong) Limited and HSBC Asset Management (Europe) Limited. Goal: The Fund seeks long-term capital appreciation by investing in equity securities listed on stock exchanges in the Asia-Pacific region or issued by companies based in this region. Market Overview: For the period ended October 31, 2000, Asian markets were weak with the exception of Hong Kong and Malaysia. Rallies in the US and NASDAQ helped equities performances before 2000, but concerns on interest rate hikes and high valuations of tech companies erased much of the gains subsequently. Higher oil prices and profit warnings of tech companies in the US and Europe did not help. Hong Kong (+12.36%) performed well due to its safe haven status in addition to positive economic news, China's WTO entry, and hope of peaking interest rates. Massive fund raising activities and bearish property market outlook undermined the market. Malaysia edged up 1.28% on improving fundamentals and MSCI's re-inclusion. Profit taking took place on market's outperformance and amid uncertainties over bank mergers and slow corporate restructuring. The index was held up by local funds. Singapore eased 2.69% as funds moved out of the country on MSCI changes. Allowing foreign strategic investment in Singtel was positive. Political uncertainties clouded Taiwan, Thailand, Indonesia and the Philippines. Taiwan dropped 28.06% on rising margins position, cross strait tension, and financial scandals. Softer than expected demand for PCs also sidelined investors. Thailand weakened 31.28% due to disappointing debt restructuring, banks' capital raising activities, and lower 2000 GDP forecasts. Better-than-expected corporate earnings and steady economic recovery failed to lift sentiment. Indonesia fell 31.74%, affected by MSCI-related asset re-allocation, the removal of Indonesia from the FTSE Index and a weakening currency. The Philippines declined 36.75% in the absence of any major reform progress. Disappointing economic and fiscal data as well as negative corporate interim results hurt market sentiment. Korea plunged 38.28% due to weakened outlook on semiconductors and asset sale failure despite improved sentiment after the historical meeting between the North and South Korea, government measures for normalising liquidity flows and encouraging financial sector reform. Performance: For the year ended October 31, 2000, the Fund's Class A shares excluding sales charges declined 28.30% compared to a decline of 21.38% for the MSCI Far East Free ex-Japan Index, a performance measurement of Far East markets excluding Japan. Portfolio Specifics: Asset allocation was overall positive although being overweight Korea and Taiwan was a slight drag. For stock selection, the main drag came from Taiwan where premium of GDR collapsed and the Fund does not have QFII status. Our current strategy is defensive increasing allocation to cash. We are likely to become less defensive over the next few months and build up positions in the preferred North Asian markets. Market Outlook: The global backdrop for Asian equities remains difficult. There are signs of slowing growth in the US, Europe and Asia. We expect global growth of 3% in 2001 after 4% in 2000. Credit spreads have also widened for lower quality credits and in emerging markets. The earnings downgrades of US technology companies have also adversely affected Asian markets. In Asia, more sustainable growth levels are expected after two years of fast recovery from the Asian crisis. Our forecast growth rates for 2001 are reasonable, which should allow interest rates to remain reasonably stable. Earnings growth will be lower in 2001 but still robust. Share price declines have been heavy in some markets. We believe many of these falls were overdone. We believe Asia offers moderate economic growth in 2001, a reasonably stable interest rate environment and attractive market valuations. 22 Portfolio Managers' Report PILGRIM ASIA-PACIFIC EQUITY FUND --------------------------------------------------------------------------------
8/31/95 10/95 10/96 10/97 10/98 10/99 10/31/00 ------ ------ ------ ------ ------ ------ ------ Pilgrim Asia-Pacific Equity Fund Class A With Sales Charge 9,425 9,312 9,597 6,142 4,713 6,587 4,723 Pilgrim Asia-Pacific Equity Fund Class A Without Sales Charge 10,000 9,880 10,182 6,517 5,001 6,989 5,011 MSCI Far East Free ex-Japan Index 10,000 10,019 11,010 7,201 5,541 8,426 6,624
Since Inception 1 Year 5 Year 09/01/95 ------ ------ -------- Including Sales Charge: Class A(1) -32.38% -13.72% -13.51% Class B(2) -32.44% -13.76% -13.39% Class M(3) -31.21% -13.84% -13.63% Excluding Sales Charge: Class A -28.30% -12.70% -12.51% Class B -28.89% -13.41% -13.22% Class M -28.68% -13.22% -13.04% MSCI Far East Free ex-Japan Index -21.38% -7.94% -7.66% Based on a $10,000 initial investment, the graph and table above illustrate the total return of Pilgrim Asia-Pacific Equity Fund against the MSCI Far East Free ex-Japan Index. The Index has an inherent performance advantage over the Fund since it has no cash in its portfolio, imposes no sales charges and incurs no operating expenses. An investor cannot invest directly in an index. The Fund's performance is shown both with and without the imposition of sales charges. Total returns reflect the fact that the Investment Adviser has contractually agreed to waive or defer its management fee and to pay other operating expenses otherwise payable by the Fund, subject to possible later reimbursement during a three-year period. Total returns would have been lower had there been no deferral to the Fund. Performance data represents past performance and is no assurance of future results. Investment return and principal value of an investment in the Fund will fluctuate. Shares, when sold, may be worth more or less than their original cost. This letter contains statements that may be "forward-looking" statements. Actual results may differ materially from those projected in the "forward-looking" statements. The views expressed in this report reflect those of the portfolio manager, only through the end of the period as stated on the cover. The portfolio manager's views are subject to change at any time based on market and other conditions. Portfolio holdings are subject to change daily. (1) Reflects deduction of the maximum Class A sales charge of 5.75%. (2) Reflects deduction of the Class B deferred sales charge of 5%, 2% and 2%, respectively, for the 1 year, 5 year and since inception returns. (3) Reflects deduction of the Class M deferred sales charge of 3.50% for the 1 year return. Principal Risk Factor(s): Price volatility and other risks that accompany an investment in foreign equities and in securities of issuers in a single region. Sensitive to currency exchange rates, international political and economic conditions and other risks that affect foreign securities. See accompanying index descriptions on page 34. 23 ------------- International Equity Funds ------------- Portfolio PILGRIM SMALLCAP ASIA GROWTH FUND Manager's Report -------------------------------------------------------------------------------- Portfolio Manager: Christina Lam, Vice President of Insinger Asset Management (U.S.) Inc. (Insinger) Goal: The Fund seeks long-term capital appreciation primarily by investing in equity securities and equity equivalents of companies in the Asia Region having market capitalizations of less than $1 billion. Market Overview: For the period ended October 31, 2000, the stockmarkets in the region were adversely affected by the decline in the Euro and rising oil prices that broke a 10-year record high of US $37/barrel. In addition, a string of profit warnings from US technology companies further hurt investor sentiment in this sector. Performance: For the year ended October 31, 2000, the Fund's Class A shares, excluding sales charges, declined 23.32% compared to a decline in the MSCI Far East Free ex-Japan Index of 21.38% and a decline in the MSCI EAFE Index of 2.66% for the same period. Portfolio Specifics: The net asset value of the Fund decreased 23.32% during the period under review, compared with a drop of 21.38% in the MSCI Far East Free ex-Japan Index. At the end of the period under review, the Fund had overweight positions in China, Hong Kong, Korea, Taiwan and Thailand. Market Outlook: While investors remain cautious amidst continuing profit warnings, the resolution of the outcome of the U.S. presidental elections and expectations of lower U.S. interest rates have resulted in an improvement in sentiment in the region. The year ahead is expected to be yet another challenging one for Asia, since the region's growth will undoubtedly slow as the result of a broader global slowdown. However, we believe that opportunities exist and we remain optimistic. Despite WTO challenges, we believe that China offers the most compelling domestic demand recovery potential. Hong Kong will be positively impacted by the prospects of lower U.S. interest rates. While commentators have complained about the pace of restructuring in Korea, this continues to proceed. Valuations are attractive and many of Korea's larger companies should see improving margins and profitability in 2001. Stock selection remains focused on reasonably-priced companies in Asia that are well-managed, have adjusted to the new environment, are willing to restructure their operations and are benefiting from the economic recovery in the region. In terms of asset allocation, the Fund is expected to maintain overweight positions in China, Hong Kong, Korea and Singapore. 24 Portfolio Manager's Report PILGRIM SMALLCAP ASIA GROWTH FUND --------------------------------------------------------------------------------
7/3/95 10/95 10/96 10/97 10/98 10/99 10/31/00 ------ ------ ------ ------ ------ ------ ------ Pilgrim SmallCap Asia Growth Fund Class A With Sales Charge 9,425 9,152 10,129 8,185 5,038 7,051 5,406 Pilgrim SmallCap Asia Growth Fund Class A Without Sales Charge 10,000 9,710 10,747 8,684 5,345 7,481 5,736 MSCI Far East Free ex-Japan Index 10,000 9,693 10,652 6,969 5,361 8,151 6,409 MSCI EAFE Index 10,000 10,147 11,243 11,796 12,970 16,001 15,575
Average Annual Total Returns for the period ended October 31, 2000 ------------------------------------- Since Inception 1 Year 5 Years 07/03/95 ------ ------- -------- Including Sales Charge: Class A (1) -27.78% -11.05% -10.90% Excluding Sales Charge: Class A -23.32% -9.99% -9.90% MSCI Far East Free ex-Japan Index -21.38% -7.94% -8.00%(2) MSCI EAFE Index -2.66% 8.95% 8.66%(2) Based on a $10,000 initial investment, the graph and table above illustrate the total return of Pilgrim SmallCap Asia Growth Fund against the MSCI Far East Free ex-Japan Index and MSCI EAFE Index. The Indices have an inherent performance advantage over the Fund since they have no cash in their portfolios, impose no sales charges and incur no operating expenses. An investor cannot invest directly in an index. The Fund's performance is shown both with and without the imposition of sales charges. Total returns reflect the fact that the Investment Adviser has contractually agreed to waive or defer its management fee and to pay other operating expenses otherwise payable by the Fund, subject to possible later reimbursement during a three-year period. Total returns would have been lower had there been no deferral to the Fund. Performance data represents past performance and is no assurance of future results. Investment return and principal value of an investment in the Fund will fluctuate. Shares, when sold, may be worth more or less than their original cost. This letter contains statements that may be "forward-looking" statements. Actual results may differ materially from those projected in the "forward-looking" statements. The views expressed in this report reflect those of the portfolio manager, only through the end of the period as stated on the cover. The portfolio manager's views are subject to change at any time based on market and other conditions. Portfolio holdings are subject to change daily. (1) Reflects deduction of the maximum Class A sales charge of 5.75%. (2) Since inception performance for the index is shown from 07/01/95. Principal Risk Factor(s): Price volatility and other risks that accompany an investment in equity securities of issuers in a single region. Sensitive to currency exchange rates, international political and economic conditions and other risks that affect foreign securities. See accompanying index descriptions on page 34. 25 ------------- International Equity Funds ------------- Portfolio PILGRIM TROIKA DIALOG RUSSIA FUND Managers' Report -------------------------------------------------------------------------------- Portfolio Management Team: Timothy McCarthy, Chief Investment Officer and Portfolio Manager, Oleg Larichev, Portfolio Manager, Ruben Vardanian, Chairman of Troika Dialog Asset Management, Pavel Teplukhin, President of Troika Dialog Asset Management. Goal: The Fund seeks to maximize long-term capital appreciation through investments in Russian securities. Market Overview: High prices for oil and other natural resource commodities exported by Russia, have had a very positive effect on Russia's macro-economic fundamentals. The enormous trade surplus at approximately 25% of GDP has helped to shore up Central Bank reserves, which have increased over 100% during the last 12 months to more then $25 billion. The strong hard currency reserve build-up has also caused a real appreciation in the ruble of more than 9% year-to-date. The improved export numbers combined with the lingering effects of a low ruble cost base for most Russian companies has yielded triple digit earnings growth and increased tax collections for the budget, which has been running a surplus for the last six months. All of this has occurred in an environment of declining inflation, which is at approximately 18%. Global factors external to Russia have had a negative effect on the global emerging markets in general. Russia's strong underlying macro-economic factors, however, have provided its equity markets with superior performance relative to other emerging markets. For example, the MSCI Emerging Market Index declined by 25.02% year-to-date and the MSCI Emerging Eastern Europe Index declined by 14.57% year-to-date, while the RTS Index gained 7.83% year-to-date. When looking for global factors most influential on the Russian market, it is interesting to note that oil is not the most prevalent. It is the level of global risk capital available for emerging markets, in general, that is most important. The amount of global risk capital is clearly illustrated by the JP Morgan Brandy Bond Index, which has a .45 correlation to the RTS Index, while oil prices have only a .34 correlation. We have seen a period of relative political calm in which various governmental organs have acted cohesively and productively. Much of the hoped for reform oriented legislation proposed by President Vladimir Putin's liberal economic advisors, German Gref and Andrei Illiarnov, has been passed. This has included an extremely forward looking tax code with a flat tax rate of 13%, a consolidation of approximately 30 different social taxes into one social tax, a lowering of the arduous 4% turnover tax to 1% and a simplification of customs tariffs. We have seen the political power previously delegated to corrupt regional administrations under the Yeltsin administration, taken back by the Putin administration. With the creation of an executive branch oversight committee to monitor regional administrations and legislation providing this structure with the right to dismiss corrupt regional officials for violating federal laws, Putin now has the legal, political and executive teeth necessary to begin what is expected to be a difficult process of rooting corruption out of government. The parliament also recently passed the 2001 budget, which will be the first planned surplus budget ever. Performance: For the year ended October 31, 2000, the Fund's Class A shares, excluding sales charges, have appreciated by 82.86% compared to the RTS Index of 100 stocks return of 94.35%. The Moscow Times Index had a gain of 102.84% during the same period. The RTX Index comprised of the eight most liquid shares declined by 7.73% during the same period. During this period of global emerging market risk adversity, the more liquid stocks as expressed by the RTX Index under-performed the broader and less liquid market. The Fund's slight underperformance relative to the broader RTS Index is therefore attributable to the Fund's preference towards liquidity, as it is open for redemptions on a daily basis. Portfolio Specifics: Oil companies were an obvious beneficiary of high oil prices, but since approximately 30% of Russian GDP is derived from oil and gas production, virtually the entire economy is a play on oil. This is why we have reduced our oil sector exposure down to approximately 42%, which is approximately 20% less than the RTS Index weighting in the oil sector. Within the oil sector we have reduced exposure to first tier stocks selling at a premium to the sector average in favor of smaller companies selling at a discount to the sector average. Wireless telecommunications and competitive local exchange carriers are our favorites with the telecommunications sector, which makes up about 23% of the portfolio. Metals producers, which have benefited from a lower ruble denominated cost base and higher commodities prices, have become extremely profitable. Unfortunately, the sector is not widely held and corporate governance problems inhibit stock selection within the sector. We continue to underweight electrical utilities due to uncertainties over a planned restructuring of the primary holding company, Unified Energy Systems, as well as political and social pressures to keep tariffs below the costs of many electricity producers. Market Outlook: We remain optimistic about continued political stability and the reform process. We believe that the efforts of the Putin administration to curtail corruption and to push through the necessary reforms will pay-off in terms of increased amounts of foreign direct investment, portfolio investment and improved corporate governance. We have seen the fixed income market outperform the equity market over the last six months, implying lower sovereign risk which has not yet been priced into equities. We expect a turn-around in global capital flows favoring emerging markets to occur late in the fourth quarter and we believe that this turnaround will trigger a re-rating in equities, closing the gap with Russian fixed income securities. 26 Portfolio Managers' Report PILGRIM TROIKA DIALOG RUSSIA FUND --------------------------------------------------------------------------------
7/3/96 10/96 10/97 10/98 10/99 10/31/00 ------ ------ ------ ------ ------ ------ Pilgrim Troika Dialog Russia Fund Class A With Sales Charge 9,425 8,227 16,951 2,434 3,860 7,059 Pilgrim Troika Dialog Russia Fund Class A Without Sales Charge 10,000 8,729 17,986 2,583 4,096 7,490 Moscow Times Index 10,000 9,433 23,697 3,057 5,736 11,634 Russian Tradings Systems Index 10,000 8,719 20,685 2,921 4,893 9,509
Average Annual Total Returns for the period ended October 31, 2000 ------------------------------------- Since Inception 1 year 3 year 07/03/96 ------ ------ -------- Including Sales Charge: Class A (1) 72.29% -26.78% -7.73% Excluding Sales Charge: Class A 82.86% -25.32% -6.46% Moscow Times Index 102.84% -22.44% 2.32%(2) Russian Tradings Systems Index 94.35% -22.47% -1.76%(2) Based on a $10,000 initial investment, the graph and table above illustrate the total return of Pilgrim Troika Dialog Fund against the Moscow Times Index and Russian Tradings Systems Index. The indices have an inherent performance advantage over the Fund since they have no cash in their portfolio, impose no sales charge and incur no operating expenses. An investor cannot invest directly in an index. The Fund's performance is shown both with and without the imposition of the maximum sales load. Total returns reflect the fact that the Investment Adviser has contractually agreed to waive or defer its management fee and to pay other operating expenses otherwise payable by the Fund, subject to possible later reimbursement during a three-year period. Total returns would have been lower had there been no deferral to the Fund. Performance data represents past performance and is no assurance of future results. Investment return and principal value of an investment in the Fund will fluctuate. Shares, when sold, may be worth more or less than their original cost. This letter contains statements that may be "forward-looking" statements. Actual results may differ materially from those projected in the "foward-looking" statements. The views expressed in this report reflect those of the portfolio manager, only through the end of the period as stated on the cover. The portfolio manager's views are subject to change at any time based on market and other conditions. Portfolio holdings are subject to change daily. (1) Reflects deduction of the maximum Class A sales charge of 5.75%. (2) Since inception performances for the indices is shown from 06/28/96. Principal Risk Factor(s): Price volatility and other risks that accompany an investment in equity securities of issuers in a single region. Sensitive to currency exchange rates, international political and economic conditions and other risks that affect foreign securities. See accompanying index descriptions on page 34. 27 ------------ Precious Metals Funds ------------ Portfolio PILGRIM GOLD FUND Manager's Report -------------------------------------------------------------------------------- Portfolio Manager: James A. Vail, CFA Goal: The Fund seeks long-term capital appreciation and hedges against the loss of buying power of the US Dollar as may be obtained through investment in gold bullion and securities of companies engaged in the mining or processing of gold throughout the world. The Fund seeks to invest 65% of its assets in gold and the equity securities of companies engaged in mining or processing of gold. The Fund may also invest in other precious metals, including platinum, palladium and silver. Less than half of the value of the Fund's assets will be invested in gold bullion or other precious metals. Market Overview: Since 1988, gold bullion has traded in a range of $250-$300 per ounce. Two factors have contributed to gold's malaise. Central Banks globally have sold or leased their reserves to producers and speculators who have put pressure on the metal. Secondly, the strength of the US dollar has reduced the demand for gold either as jewelry or as an investment. The latter issue provides the foundation for higher metal prices in the future, Presently; the US Dollar accounts for about 77% of world banks' reserves. The dollar can be compared to an over priced, extended growth stock, priced for perfection. Should the dollar weaken against other currencies, we expect gold prices to strengthen and coupled with a large short position, result in substantially higher bullion prices. Performance: For the year ended October 31, 2000, the Fund's Class A shares, excluding sales charges, declined 32.01% compared to a decline of 9.22% for Gold Bullion and a gain of 6.09% for the S&P 500 Index in the same period. Portfolio Strategy: The Fund's generally better performance relative to the Philadelphia Stock Exchange Gold and Silver Index can be traced to its holdings of platinum and palladium shares both in South Africa and North America. South African holdings, IMPALA Platinum and Anglo American Platinum, returned over 60% in the 12 months ended October 31, 2000. In North America, Stillwater Mining also produced above average returns. Market Outlook: Looking ahead, the fundamental supply demand balance remains positive for gold and the US dollar is not expected to sustain its strength against other currencies. In addition, the low gold price environment has resulted in many companies and mines operating at extremely narrow profit margins leading to questions of their economic viability. This could lead to greater corporate activity. Within this framework, the Fund will remain invested in the world's leading gold producers. The Fund will limit its exposure to heavily hedged producers in an attempt to capture as much of the upside potential as possible in a rising gold price environment. The Fund will also consider investing in smaller and intermediate gold producers in an effort to enhance overall performance through greater sensitivity to gold prices and potential corporate actions. 28 Portfolio Manager's Report PILGRIM GOLD FUND --------------------------------------------------------------------------------
10/31/90 10/91 10/92 10/93 10/94 10/95 10/96 10/97 10/98 10/99 10/31/00 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Pilgrim Gold Fund Class A With Sales Charge 9,417 9,342 7,512 11,474 13,661 11,319 13,716 8,790 7,673 7,673 5,217 Pilgrim Gold Fund Class A Without Sales Charge 10,000 9,920 7,977 12,184 14,507 12,019 14,565 9,334 8,148 8,148 5,540 S&P 500 Index 10,000 13,350 14,679 16,872 17,525 22,158 27,497 36,327 44,315 55,688 59,081 Gold Bullion 10,000 9,419 8,940 9,733 10,284 10,252 10,168 8,344 7,833 8,004 7,266
Average Annual Total Returns for the period ended October 31, 2000 ------------------------------------- 1 Year 5 Years 10 Years ------ ------- -------- Including Sales Charge: Class A (1) -35.86% -15.37% -6.30% Excluding Sales Charge: Class A -32.01% -14.35% -5.74% S&P 500 Index 6.09% 21.67% 19.44% Gold Bullion -9.22% -7.11% -3.35% Based on a $10,000 initial investment, the graph and table above illustrate the total return of Pilgrim Gold Fund against the S&P 500 Index and Gold Bullion. The Indices have an inherent performance advantage over the Fund since they have no cash in their portfolio, impose no sales charges and incur no operating expenses. An investor cannot invest directly in an index. The Fund's performance is shown both with and without the imposition of sales charges. Total returns reflect the fact that the Investment Adviser has contractually agreed to waive or defer its management fee and to pay other operating expenses otherwise payable by the Fund, subject to possible later reimbursement during a three-year period. Total returns would have been lower had there been no deferral to the Fund. Performance data represents past performance and is no assurance of future results. Investment return and principal value of an investment in the Fund will fluctuate. Shares, when sold, may be worth more or less than their original cost. This letter contains statements that may be "forward-looking" statements. Actual results may differ materially from those projected in the "forward-looking" statements. The views expressed in this report reflect those of the portfolio manager, only through the end of the period as stated on the cover. The portfolio manager's views are subject to change at any time based on market and other conditions. Portfolio holdings are subject to change daily. (1) Reflects deduction of the maximum Class A sales charge of 5.75%. Principal Risk Factor(s): Price volatility due to non-diversification and concentration in the gold/precious metals industry. The market for gold and other precious metals is widely unregulated and is located in foreign countries that have the potential for instability. Precious metals earn no income, have higher transaction/storage costs and realize gain only with an increase in market price. See accompanying index descriptions on page 34. 29 ------------ Precious Metals Funds ------------ Portfolio PILGRIM SILVER FUND Manager's Report -------------------------------------------------------------------------------- Portfolio Manager: James A. Vail, CFA Goal: The Fund's investment objective is to maximize total return on its assets from long term growth of capital and income principally through investment in a portfolio of securities which are engaged in the exploration, mining, processing, fabrication or distribution of silver and in silver bullion. Investment Strategy: The Fund will invest in the securities of established silver related companies domiciled in the United States, Canada, and Mexico as well as other silver producing countries throughout the world. At least 80% of the Fund's assets will be invested in established silver related companies, which have been in business for more than three years. Additionally, the Fund has the ability to significantly increase its exposure to silver by increasing its holding of silver bullion. Market Overview: Despite a favorable supply demand imbalance, silver prices remain under pressure. Inventory reductions from overseas governments and domestic investors have prevented prices from reflecting the positive fundamentals. Inspite of its precious nature, silver is essentially an industrial metal with major uses in photography and jewelry. As such silver's demand will be influence by overall global economic trends. As we move forward, the imbalance between supply and demand should lead to higher silver prices. In addition, inventories at the London Metal Exchange and Comex are at historically low levels, which would enhance the favorable outlook for higher silver prices. Performance: For the year ended October 31, 2000, the Fund's Class A shares, excluding sales charges, lost 26.52% compared to a decline of 8.76% for Silver Bullion and a gain of 6.09% for the S&P 500 Index for the same period. Portfolio Strategy: In this generally negative silver environment, the Fund's conservative cash position contributed to its better relative performance compared to the Philadelphia Gold and Silver Index. Market Outlook: Looking ahead, the fundamental supply demand balance remains positive for silver. In general, however, 80% of the world's silver is a by-product of other metal production. As a result, the Fund's future performance will depend on global industrial production and the production outlook for copper, zinc and gold. The Fund remains invested in the world's largest silver producers and looks for opportunities where silver production is a growing aspect of other global mining entities. 30 Portfolio Manager's Report PILGRIM SILVER FUND --------------------------------------------------------------------------------
1/2/92 10/92 10/93 10/94 10/95 10/96 10/97 10/98 10/99 10/31/00 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Pilgrim Silver Fund Class A With Sales Charge 9,420 8,732 13,116 15,507 14,565 15,689 13,572 10,657 10,767 7,911 Pilgrim Silver Fund Class A Without Sales Charge 10,000 9,269 13,923 16,462 15,462 16,654 14,407 11,312 11,429 8,398 S&P 500 Index 10,000 10,281 11,818 12,275 15,520 19,259 25,444 31,039 39,005 41,381 Silver Bullion 10,000 9,726 11,399 14,219 14,259 12,836 12,810 13,448 14,128 12,891
Average Annual Total Returns for the period ended October 31, 2000 ------------------------------------- Since Inception 1 Year 5 Year 01/02/92 ------ ------ -------- Including Sales Charge: Class A (1) -30.78% -12.55% -2.62% Excluding Sales Charge: Class A -26.52% -11.49% -1.96% S&P 500 Index 6.09% 21.67% 17.44%(2) Silver Bullion -8.76% -2.43% 2.35%(3) Based on a $10,000 initial investment, the graph and table above illustrate the total return of Pilgrim Silver Fund against the S&P 500 Index and Silver Bullion. The Indices have an inherent performance advantage over the Fund since they have no cash in their portfolio, impose no sales charges and incur no operating expenses. An investor cannot invest directly in an index. The Fund's performance is shown both with and without the imposition of sales charges. Total returns reflect the fact that the Investment Adviser has contractually agreed to waive or defer its management fee and to pay other operating expenses otherwise payable by the Fund, subject to possible later reimbursement during a three-year period. Total returns would have been lower had there been no deferral to the Fund. Performance data represents past performance and is no assurance of future results. Investment return and principal value of an investment in the Fund will fluctuate. Shares, when sold, may be worth more or less than their original cost. This letter contains statements that may be "forward-looking" statements. Actual results may differ materially from those projected in the "forward-looking" statements. The views expressed in this report reflect those of the portfolio manager, only through the end of the period as stated on the cover. The portfolio manager's views are subject to change at any time based on market and other conditions. Portfolio holdings are subject to change daily. (1) Reflects deduction of the maximum Class A sales charge of 5.75%. (2) Since inception performance for the index is shown from 01/01/92. (3) Since inception performance for the index is shown from 12/31/91. Principal Risk Factor(s): Price volatility due to non-diversification and concentration in stocks in the silver industry. The market for silver is limited and widely unregulated and is located in foreign countries that have the potential for instability. Precious metals earn no income, have higher transaction/storage costs, and realize gain only with an increase in market price. See accompanying index descriptions on page 34. 31 ------------- International Income Funds ------------- Portfolio PILGRIM GLOBAL INCOME FUND Managers' Report -------------------------------------------------------------------------------- Portfolio Management Team: Denis P. Jamison, C.F.A., Roseann G. McCarthy, Co-Portfolio Managers Goal: The Fund seeks to provide high current income. Capital appreciation is a secondary objective. The Fund invests in a combination of foreign and domestic fixed income securities. These securities can be investment grade, lower rated, or non-rated. Also, the Fund owns both dollar-denominated and non-dollar debt securities. A significant portion of the Fund's assets will be invested in emerging market sovereign and corporate bonds. Management looks to balance the risks between dollar and non-dollar debt as well as between developed market and emerging market debt in order to mitigate the price volatility associated with any one market sector. Market Overview: Two factors have dominated the global bond market this year: (1) the steep decline in the value of the Euro versus the U.S. Dollar, and (2) the widening of yield spreads between government securities -- particularly U.S. Treasury debt -- and lower rated bonds. For example, the Lehman U.S. Treasury Bond Index returned 8.10% for the first nine months of this year. This compares with a 6.50% decline in the non-U.S. Global Treasury Index and a -0.70% decline in the return from U.S. high yield corporate debt. One sector of the high yield bond market has shown considerable strength; the Lehman Emerging Market Debt Index is up 12.30% this year. Strong economic growth and improved fiscal policies in Brazil and Mexico as well as increased stability in Russia have attracted investors to the dollar-denominated bonds of these borrowers. However, in recent months, even these markets have fallen victim to increased investor risk aversion; the yield spreads between these debt securities and U.S. Treasury bonds widened and their price performance suffered. The key element underlying the trends in the global bond market is strong U.S. economic growth relative to that of other developed markets. This growth has resulted in high returns on capital whether invested in the booming U.S. communications and technology markets or in domestic debt whose yields have been inflated by tight U.S. monetary policies. Recent economic reports suggest a slowing in domestic business expansion. If so, we could see a reversal in the market trends of the last year. Performance: For the period ended October 31, 2000, the Fund's Class A shares, excluding sales charges, declined 3.57% compared to a decline of 5.24% for the Lehman Brothers Global Treasury Index. The Fund had a particularly difficult October, declining 3.20% in value compared with a -1.00% reversal for the Index. Portfolio Specifics: Losses on domestic high yield debt and the decline in the value of the Euro were the primary causes of the Fund's negative returns this year. Two domestic credits held by the Fund became distressed during the year -- Archibald Candy and Clark Materials. The latter declared bankruptcy and there may be little assets available to bondholders. At the start of the year, about 42% of the Fund's assets were invested in Scandinavian, Greek, or Eastern European debt. The 12% fall in the value of the Euro impacted the U.S. dollar value of these bonds. Finally, in late September, the Fund's single largest shareholder liquidated its investment; the Fund's assets fell from $30.7 million to $16.5 million. This prompted significant sales of Fund assets and these transactions impacted relative performance. The Fund's Class A shares fell in value by 3.20% during the month compared with a 1.30% decline for the Lehman Brothers Global Treasury Index. Market Outlook: Indications are clear that the U.S. economy is slowing. For example, third quarter GDP growth slowed to 2.70% compared with 5.60% in the prior period. This opens the door to lower short-term interest rates in 2001 and implies a lower rate of return on capital invested in the U.S. The Euro has been significantly undervalued on a purchasing parity basis versus the U.S. Dollar all year. It's capital flows, however, that determine exchange ratios. During the first nine months of this year, investors were buying U.S. Dollars to fund both acquisitions and security purchases. This activity is likely to mitigate as the economy slows. Accordingly, we look for the Euro to strengthen and take with it the Eastern European currencies. We anticipate maintaining a high non-dollar exposure; currently, the Fund has a 62% exposure in foreign currencies. 32 Portfolio Managers' Report PILGRIM GLOBAL INCOME FUND --------------------------------------------------------------------------------
10/31/90 10/91 10/92 10/93 10/94 10/95 10/96 10/97 10/98 10/99 10/31/00 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Pilgrim Global Income Fund Class A With Sales Charge 9,521 10,578 11,072 12,612 11,960 13,865 15,809 16,663 17,811 18,072 17,426 Pilgrim Global Income Fund Class A Without Sales Charge 10,000 11,111 11,629 13,247 12,562 14,563 16,605 17,502 18,708 18,982 18,304 Lehman Brothers Global Treasury Index 10,000 11,105 12,491 13,919 14,287 16,571 17,711 16,783 16,283 18,374 18,954
1 Year 5 Year 10 Year ------ ------ ------- Including Sales Charge: Class A(1) -8.16% 3.67% 5.71% Excluding Sales Charge: Class A -3.57% 4.68% 6.23% Lehman Brothers Global Treasury Index -5.24% 2.72% 6.60% Based on a $10,000 initial investment, the graph and table above illustrate the total return of Pilgrim Global Income Fund against the Lehman Brothers Global Treasury Index. The Index has an inherent performance advantage over the Fund since it has no cash in its portfolio, impose no sales charges and incur no operating expenses. An investor cannot invest directly in an index. The Fund's performance is shown both with and without the imposition of sales charges. Total returns reflect the fact that the Investment Adviser has contractually agreed to waive or defer its management fee and to pay other operating expenses otherwise payable by the Fund, subject to possible later reimbursement during a three-year period. Total returns would have been lower had there been no deferral to the Fund. Performance data represents past performance and is no assurance of future results. Investment return and principal value of an investment in the Fund will fluctuate. Shares, when sold, may be worth more or less than their original cost. This letter contains statements that may be "forward-looking" statements. Actual results may differ materially from those projected in the "forward-looking" statements. The views expressed in this report reflect those of the portfolio manager, only through the end of the period as stated on the cover. The manager's views are subject to change at any time based on market and other conditions. Portfolio holdings are subject to change daily. (1) Reflects deduction of the maximum Class A sales charge of 4.75%. Principal Risk Factor(s): Through investment in bonds, the Fund may expose you to certain risks which may cause you to lose money. Junk bonds have a higher risk of default, tend to be less liquid, and may be more difficult to value. The Fund could lose money because of foreign government actions, political instability, or lack of adequate and accurate information. Currency and investment risks tend to be higher in emerging markets. See accompanying index descriptions on page 34. 33 ------- Pilgrim Funds ------- INDEX DESCRIPTIONS -------------------------------------------------------------------------------- The S&P 500 Index is a widely recognized index of 500 common stocks. The Dow Jones Industrial Average is a price-weighted average of 30 blue-chip stocks that are generally the leaders of their industry. The NASDAQ Composite Index is a broad-based capitalization-weighted index of all NASDAQ National Market & SmallCap stocks. The Russell 2000 Index consists of the smallest 2000 companies in the Russell 3000 Index. The Philadelphia Stock Exchange Gold and Silver Index (XAU) is a capitalization-weighted index which includes the leading companies involved in the mining of gold and silver. The FTSE 100 Index is a capitalization-weighted index of the 100 most highly capitalized companies traded on the London Stock Exchange. The MSCI EAFE Index consists of more than 1,400 securities in the U.S., Europe, Canada, Australia, New Zealand, and the Far East. It is a generally accepted index for major overseas markets. The MSCI Emerging Markets Free (EMF) Index is comprised of companies representative of the market structure of 22 emerging countries in Europe, Latin America and the Pacific Rim Basin. The MSCI World Index consists of more than 1,400 securities located in the U.S., Europe, Canada, Australia, New Zealand and the Far East. The Salomon EPAC Extended Market Index measures the performance of securities of smaller-capitalized companies in 22 countries excluding the U.S. and Canada. The MSCI Far East Free ex-Japan Index measures performance of securities listed on exchanges in the Far East markets excluding Japan. The Moscow Times Index is an index that measures the performance of the 50 most liquid and highly capitalized Russian stocks. The Russian Trading Systems Index is a capitalization weighted index that is comprised of 100 stocks traded on the Russian Trading Systems. The RTX Russian Traded Index is a capitalization-index of 8 Russian blue chip stocks. The Lehman Brothers Global Treasury Index is an unmanaged index that is comprised of 19 countries with an average maturity of 7.46 years. The Gold Bullion is a commodity traded on the New York Mercantile Exchange. The Silver Bullion is a commodity traded on the New York Mercantile Exchange. The Pacific Stock Exchange (PSE) Technology Index is a price-weighted index of the top 100 U.S. technology stocks. All indices are unmanaged. An investor cannot invest directly in an index 34 ------- Pilgrim Funds ------- REPORT OF INDEPENDENT AUDITORS -------------------------------------------------------------------------------- To the Shareholders and Trustees of the Pilgrim Mayflower Trust and the Shareholders and Board of Directors of Pilgrim Mutual Funds, Pilgrim Advisory Funds, Inc., Pilgrim Global Corporate Leaders Fund, Inc., Pilgrim International Fund, Inc., Pilgrim Worldwide Emerging Markets Fund, Inc., Pilgrim Global Technology Fund, Inc., Pilgrim SmallCap Asia Growth Fund, Inc. Pilgrim Troika Dialog Russia Fund, Inc., Pilgrim Gold Fund, Inc., Pilgrim Silver Fund, Inc. and Pilgrim Global Income Fund: In our opinion, the accompanying statements of assets and liabilities, including the portfolios of investments, 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 Pilgrim International Core Growth Fund, Pilgrim Worldwide Growth Fund, Pilgrim International SmallCap Growth Fund and Pilgrim Emerging Countries Fund, four of the twelve funds comprising Pilgrim Mutual Funds (collectively, "PMF"), Pilgrim International Value Fund and Pilgrim Emerging Markets Value Fund, two of the six funds comprising Pilgrim Mayflower Trust, (collectively, "PMT"), Pilgrim Asia-Pacific Equity Fund, one of the three funds comprising Pilgrim Advisory Funds, Inc., (collectively, "PAF"), Pilgrim Global Corporate Leaders Fund, Inc. (formerly Lexington Global Corporate Leaders Fund, Inc.), Pilgrim International Fund, Inc. (formerly Lexington International Fund, Inc.), Pilgrim Worldwide Emerging Markets Fund, Inc. (formerly Lexington Worldwide Emerging Markets Fund, Inc.), Pilgrim Global Technology Fund, Inc. (formerly Lexington Global Technology Fund, Inc.), Pilgrim SmallCap Asia Growth Fund, Inc. (formerly Lexington SmallCap Asia Growth Fund, Inc.), Pilgrim Troika Dialog Russia Fund, Inc. (formerly Lexington Troika Dialog Russia Fund, Inc.), Pilgrim Gold Fund, Inc. (formerly Lexington Goldfund, Inc.), Pilgrim Silver Fund, Inc. (formerly Lexington Silver Fund, Inc.), and Pilgrim Global Income Fund (formerly Lexington Global Income Fund, Inc.), (each a "Fund" collectively, the "Funds") at October 31, 2000, and the results of each of their operations for the periods then ended, the changes in each of their net assets and financial highlights for each of the periods presented except as described below, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of PMF, PMT, PAF and the Funds' management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2000 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. For all periods ended prior to and including December 31, 1999 for Pilgrim Global Corporate Leaders Fund, Inc., Pilgrim International Fund, Inc., Pilgrim Worldwide Emerging Markets Fund, Inc., Pilgrim Global Technology Fund, Inc., Pilgrim SmallCap Asia Growth Fund, Inc., Pilgrim Troika Dialog Russia Fund, Inc., Pilgrim Gold Fund, Inc., Pilgrim Silver Fund, Inc., and Pilgrim Global Income Fund the statements of operations and of changes in net assets and financial highlights were audited by other auditors whose reports dated February 17, 2000 expressed unqualified opinions on those financial statements and financial highlights. For all periods ended prior to and including June 30, 2000 for Pilgrim International Core Growth Fund, Pilgrim Worldwide Growth Fund, Pilgrim International SmallCap Growth Fund, Pilgrim Emerging Countries Fund and Pilgrim Asia-Pacific Fund the statements of operations and of changes in net assets and financial highlights were audited by other auditors whose report dated August 4, 2000 expressed unqualified opinions on those financial statements and financial highlights. PRICEWATERHOUSECOOPERS LLP Denver, Colorado December 29, 2000 35 ------------- International Equity Funds ------------- STATEMENTS OF ASSETS AND LIABILITIES as of October 31, 2000 --------------------------------------------------------------------------------
Global Worldwide Corporate International Growth Leaders Value International Fund Fund Fund Fund -------------- -------------- -------------- -------------- ASSETS: Investments in securities, at value* $ 572,643,199 $ 15,201,490 $1,912,520,584 $ 27,547,450 Short-term securities, at amortized cost 50,195,499 987,930 -- 2,963,790 Repurchase agreements -- -- 125,011,000 -- Cash 46,206 543,465 10,249 672,619 Foreign currency, at value** 349 -- 1,366,994 331,082 Receivable for investments sold 12,435,780 4,962 -- -- Receivable for shares of beneficial interest sold 21,978,147 257,795 18,891,380 243,463 Dividends and interest receivable 518,450 32,755 4,441,300 77,982 Unrealized appreciation of forward currency contracts -- -- 158,553 -- Receivable due from affilitate -- -- -- -- Other receivable -- 26,597 -- 135 Prepaid expenses 190,020 1,768 99,629 27,497 -------------- -------------- -------------- -------------- Total Assets 658,007,650 17,056,762 2,062,499,689 31,864,018 -------------- -------------- -------------- -------------- LIABILITIES: Payable for investments purchased 4,818,844 -- 63,902,107 379,460 Payable for shares of beneficial interest reacquired 20,182,180 434 4,935,786 499,445 Investment advisory fee payable 532,375 13,969 1,624,499 25,850 Distribution fee payable 274,306 3,492 1,089,059 5,913 Transfer agent fee payable 97,619 7,180 576,601 6,601 Administrative services fee payable -- 1,397 162,450 2,585 Unrealized depreciation of forward foreign currency contracts -- -- 360,454 -- Accrued expenses 211,495 136,797 932,779 126,090 -------------- -------------- -------------- -------------- Total Liabilities 26,116,819 163,269 73,583,735 1,045,944 -------------- -------------- -------------- -------------- NET ASSETS $ 631,890,831 $ 16,893,493 $1,988,915,954 $ 30,818,074 ============== ============== ============== ============== NET ASSETS WERE COMPRISED OF: Paid-in-capital $ 573,190,225 $ 11,637,343 $1,676,493,307 $ 29,139,374 Undistributed (distribution in excess of) net investment income (587,286) -- 10,143,582 (44,363) Accumulated net realized gain/loss on investments, foreign currency and futures contracts 12,812,487 1,530,223 239,137,225 2,540,339 Net unrealized appreciation (depreciation) of investments, foreign currency and futures contracts 46,475,405 3,725,927 63,141,840 (817,276) -------------- -------------- -------------- -------------- Net Assets $ 631,890,831 $ 16,893,493 $1,988,915,954 $ 30,818,074 ============== ============== ============== ============== *Cost $ 526,165,276 $ 11,473,931 $1,849,228,137 $ 28,366,256 **Cost of foreign currency 347 -- 1,366,994 324,061 International International Emerging Core SmallCap Markets Growth Growth Value Fund Fund Fund -------------- -------------- -------------- ASSETS: Investments in securities, at value* $ 72,119,660 $ 646,634,200 $ 12,919,368 Short-term securities, at amortized cost 3,000,000 -- -- Repurchase agreements -- 39,589,000 116,000 Cash 936,917 3,423,106 10,726 Foreign currency, at value** 4,044 7,413,742 1,745 Receivable for investments sold 954,615 13,474,241 -- Receivable for shares of beneficial interest sold 5,157,680 24,671,502 3,204 Dividends and interest receivable 153,759 700,546 52,601 Unrealized appreciation of forward currency contracts -- -- -- Receivable due from affilitate 20,391 3,357 -- Other receivable 167,736 154,046 55,700 Prepaid expenses 24,347 148,178 1,148 -------------- -------------- -------------- Total Assets 82,539,149 736,211,918 13,160,492 -------------- -------------- -------------- LIABILITIES: Payable for investments purchased -- 30,334,701 -- Payable for shares of beneficial interest reacquired 152,673 2,593,933 1,161 Investment advisory fee payable 66,075 572,690 11,310 Distribution fee payable 30,015 226,605 8,313 Transfer agent fee payable 24,241 146,734 7,998 Administrative services fee payable -- -- -- Unrealized depreciation of forward foreign currency contracts -- -- -- Accrued expenses 113,531 534,667 14,020 -------------- -------------- -------------- Total Liabilities 386,535 34,409,330 42,802 -------------- -------------- -------------- NET ASSETS $ 82,152,614 $ 701,802,588 $ 13,117,690 ============== ============== ============== NET ASSETS WERE COMPRISED OF: Paid-in-capital $ 75,262,552 $ 642,802,543 $ 10,675,826 Undistributed (distribution in excess of) net investment income 742,176 (3,454,110) 143,820 Accumulated net realized gain/loss on investments, foreign currency and futures contracts 3,821,020 34,362,301 3,240,882 Net unrealized appreciation (depreciation) of investments, foreign currency and futures contracts 2,326,866 28,091,854 (942,838) -------------- -------------- -------------- Net Assets $ 82,152,614 $ 701,802,588 $ 13,117,690 ============== ============== ============== *Cost $ 69,778,215 $ 618,598,454 $ 13,862,207 **Cost of foreign currency 4,112 7,360,991 1,748
See Accompanying Notes to Financial Statements 36
Global International International Emerging Worldwide Corporate International Core SmallCap Markets Growth Leaders Value International Growth Growth Value Fund Fund Fund Fund Fund Fund Fund ------------ -------------- ------------ -------------- ----------- ------------ ---------- Class A: Net assets $246,589,814 $ 16,893,493 $920,591,095 $ 30,652,690 $23,588,259 $273,392,970 $4,548,854 ------------ -------------- ------------ -------------- ----------- ------------ ---------- Shares authorized unlimited 1,000,000,000 unlimited 1,000,000,000 unlimited unlimited unlimited ------------ -------------- ------------ -------------- ----------- ------------ ---------- Par value $ 0.00 $ 0.001 $ 0.01 $ 0.001 $ 0.00 $ 0.00 $ 0.01 ------------ -------------- ------------ -------------- ----------- ------------ ---------- Shares outstanding 9,355,074 1,570,579 55,201,299 2,732,579 1,127,662 7,578,351 442,984 ------------ -------------- ------------ -------------- ----------- ------------ ---------- Net asset value and redemption value per share (net assets/shares outstanding) $ 26.36 $ 10.76 $ 16.68 $ 11.22 $ 20.92 $ 36.08 $ 10.27 ============ ============== ============ ============== =========== ============ ========== Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $ 27.97 $ 11.29 $ 17.69 $ 11.90 $ 22.19 $ $37.28 $ 10.90 ============ ============== ============ ============== =========== ============ ========== Class B: Net assets $126,756,201 n/a $437,764,707 $ 80,347 $19,116,474 $126,861,025 $4,100,600 ------------ -------------- ------------ -------------- ----------- ------------ ---------- Shares authorized unlimited n/a unlimited 1,000,000,000 unlimited unlimited unlimited ------------ -------------- ------------ -------------- ----------- ------------ ---------- Par value $ 0.00 n/a $ 0.01 $ 0.001 $ 0.00 $ 0.00 $ 0.01 ------------ -------------- ------------ -------------- ----------- ------------ ---------- Shares outstanding 4,293,287 n/a 26,643,010 7,180 915,669 3,334,092 402,969 ------------ -------------- ------------ -------------- ----------- ------------ ---------- Net asset value and offering price per share (net assets/shares outstanding)* $ 29.52 n/a $ 16.43 $ 11.19 $ 20.88 $ 38.05 $ 10.18 ============ ============== ============ ============== =========== ============ ========== Class C: Net assets $213,842,768 n/a $605,678,290 $ 85,037 $25,501,161 $136,829,717 $4,468,236 ------------ -------------- ------------ -------------- ----------- ------------ ---------- Shares authorized unlimited n/a unlimited 1,000,000,000 unlimited unlimited unlimited ------------ -------------- ------------ -------------- ----------- ------------ ---------- Par value $ 0.00 n/a $ 0.01 $ 0.001 $ 0.00 $ 0.00 $ 0.00 ------------ -------------- ------------ -------------- ----------- ------------ ---------- Shares outstanding 8,144,711 n/a 36,915,901 7,588 1,216,504 3,917,302 440,910 ------------ -------------- ------------ -------------- ----------- ------------ ---------- Net asset value and offering price per share (net assets/shares outstanding)* $ 26.26 n/a $ 16.41 $ 11.21 $ 20.96 $ 34.93 $ 10.13 ============ ============== ============ ============== =========== ============ ========== Class Q: Net assets $ 44,702,048 n/a $ 24,881,862 n/a $13,946,720 $164,718,876 n/a ------------ -------------- ------------ -------------- ----------- ------------ ---------- Shares authorized unlimited n/a unlimited n/a unlimited unlimited n/a ------------ -------------- ------------ -------------- ----------- ------------ ---------- Par value $ 0.00 n/a $ 0.00 n/a $ 0.00 $ 0.00 n/a ------------ -------------- ------------ -------------- ----------- ------------ ---------- Shares outstanding 1,471,824 n/a 1,491,611 n/a 640,881 4,313,811 n/a ------------ -------------- ------------ -------------- ----------- ------------ ---------- Net asset value, offering and redemption price per share (net assets/shares outstanding) $ 30.37 n/a $ 16.68 $ n/a $ 21.76 $ 38.18 $ n/a ============ ============== ============ ============== =========== ============ ==========
* Redemption price varies by length of time shares are held. 37 ------------- International Equity Funds ------------- STATEMENTS OF ASSETS AND LIABILITIES as of October 31, 2000 --------------------------------------------------------------------------------
Worldwide SmallCap Troika Emerging Emerging Global Asia-Pacific Asia Dialog Countries Markets Technology Equity Growth Russia Fund Fund Fund Fund Fund Fund ------------- ------------- ------------ ------------ ------------ ------------ ASSETS: Investments in securities, at value* $ 178,469,338 $ 65,682,399 $ 8,081,484 $ 15,915,505 $ 3,604,993 $ 48,695,767 Short-term securities, at amortized cost 22,926,151 10,373,265 -- -- -- 1,975,860 Repurchase agreements -- -- -- 740,000 -- -- Cash 462,292 7,191,386 890,502 384,977 84,311 1,515,939 Foreign currency, at value** 978,708 10,214 -- 17,794 262,624 -- Receivable for investments sold 1,499,911 2,867,168 5,626 -- -- 2,917,207 Receivable for shares of beneficial interest sold 2,229,516 133,873 3,338 4,079,282 718,805 84,843 Dividends and interest receivable 143,582 235,212 3,868 5,209 -- 134,179 Receivable due from affiliate 47,232 -- 47,814 21,810 66,511 -- Other receivable 40,470 10 -- -- 8,911 -- Prepaid expenses 55,627 7,951 1,677 19,183 17,219 23,013 ------------- ------------- ------------ ------------ ------------ ------------ Total Assets 206,852,827 86,501,478 9,034,309 21,183,760 4,763,374 55,346,808 ------------- ------------- ------------ ------------ ------------ ------------ LIABILITIES: Payable for investments purchased 9,664,247 4,287,199 -- 552,202 -- 1,145,428 Payable for shares of beneficial interest reacquired 1,349,243 131,226 3,338 1,638,106 2,885 250,464 Investment advisory fee payable 205,526 69,430 9,673 18,494 4,676 58,565 Distribution fee payable 41,090 80,458 1,935 8,027 935 2,749 Transfer agent fee payable 56,725 11,747 4,630 6,196 7,114 10,917 Administrative services fee payable 34,063 6,943 -- -- 1,085 4,685 Estimated tax liability on Indian investments 1,597,233 88,692 -- -- -- -- Accrued expenses 306,974 329,430 126,536 100,645 116,951 237,448 ------------- ------------- ------------ ------------ ------------ ------------ Total Liabilities 13,255,101 5,005,125 146,112 2,323,670 133,646 1,710,256 ------------- ------------- ------------ ------------ ------------ ------------ NET ASSETS $ 193,597,726 $ 81,496,353 $ 8,888,197 $ 18,860,090 $ 4,629,728 $ 53,636,552 ============= ============= ============ ============ ============ ============ NET ASSETS WERE COMPRISED OF: Paid-in capital $ 237,061,309 $ 127,760,983 $ 13,147,443 $ 47,359,237 $ 15,455,160 $139,492,226 Undistributed (distribution in excess) net investment income) (58,147) (92,507) -- 296,231 -- -- Accumulated net realized gain/loss on investments, foreign currency and future contracts (net of foreign tax on the sale of indian investments of $1,323,652, $0, $0, $0, $0 and $0, respectively -- Note 2) (49,128,400) (11,424,744) (238,770) (23,797,507) (9,795,911) (68,683,576) Net unrealized appreciation (depreciation) of investments, and other assets, liabilities and forward contracts denominated in foreign currencies (net of estimated tax liability on Indian investments of $273,581, $88,692, $0, $0, $0 and $0, respectively -- see Note 2) 5,722,964 (34,747,379) (4,020,476) (4,997,871) (1,029,521) (17,172,098) ------------- ------------- ------------ ------------ ------------ ------------ Net Assets $ 193,597,726 $ 81,496,353 $ 8,888,197 $ 18,860,090 $ 4,629,728 $ 53,636,552 ============= ============= ============ ============ ============ ============ *Cost 172,476,656 100,068,422 12,101,862 20,913,515 4,632,559 65,867,865 **Cost of foreign currency 978,697 4,253 -- 17,828 264,581 --
See Accompanying Notes to Financial Statements 38
Worldwide SmallCap Troika Emerging Emerging Global Asia-Pacific Asia Dialog Countries Markets Technology Equity Growth Russia Fund Fund Fund Fund Fund Fund ----------- ----------- -------------- ----------- -------------- -------------- Class A: Net assets $59,541,217 $81,496,353 $ 8,888,197 $ 8,471,247 $ 4,629,728 $ 53,636,552 ----------- ----------- -------------- ----------- -------------- -------------- Shares authorized unlimited unlimited 1,000,000,000 24,000,000 1,000,000,000 1,000,000,000 ----------- ----------- -------------- ----------- -------------- -------------- Par value $ 0.00 $ 0.01 $ 0.001 $ 1.00 $ 0.001 $ 0.001 ----------- ----------- -------------- ----------- -------------- -------------- Shares outstanding 3,646,780 9,314,219 1,130,652 1,697,869 809,868 7,497,260 ----------- ----------- -------------- ----------- -------------- -------------- Net asset value and redemption per share (net assets/shares outstanding) $ 16.33 $ 8.75 $ 7.86 $ 4.99 $ 5.72 $ 7.15 =========== =========== ============== =========== ============== ============== Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $ 17.32 $ 9.28 $ 8.34 $ 5.29 $ 6.07 $ 7.59 =========== =========== ============== =========== ============== ============== Class B: Net assets $22,707,035 n/a n/a $ 7,678,394 n/a n/a ----------- ----------- -------------- ----------- -------------- -------------- Shares authorized unlimited n/a n/a 20,000,000 n/a n/a ----------- ----------- -------------- ----------- -------------- -------------- Par value $ 0.00 n/a n/a $ 1.00 n/a n/a ----------- ----------- -------------- ----------- -------------- -------------- Shares outstanding 1,383,679 n/a n/a 1,598,652 n/a n/a ----------- ----------- -------------- ----------- -------------- -------------- Net asset value offering and redemption price per share (net assets/shares outstanding)* $ 16.41 n/a n/a $ 4.80 n/a n/a =========== =========== ============== =========== ============== ============== Class C: Net assets $22,455,463 n/a n/a n/a n/a n/a ----------- ----------- -------------- ----------- -------------- -------------- Shares authorized unlimited n/a n/a n/a n/a n/a ----------- ----------- -------------- ----------- -------------- -------------- Par value $ 0.00 n/a n/a n/a n/a n/a ----------- ----------- -------------- ----------- -------------- -------------- Shares outstanding 1,419,906 n/a n/a n/a n/a n/a ----------- ----------- -------------- ----------- -------------- -------------- Net asset value offering and redemption price per share (net assets/shares outstanding)* $ 15.81 n/a n/a n/a n/a n/a =========== =========== ============== =========== ============== ============== Class M: Net assets n/a n/a n/a $ 2,710,449 n/a n/a ----------- ----------- -------------- ----------- -------------- -------------- Shares authorized n/a n/a n/a 12,000,000 n/a n/a ----------- ----------- -------------- ----------- -------------- -------------- Par value n/a n/a n/a $ 1.00 n/a n/a ----------- ----------- -------------- ----------- -------------- -------------- Shares outstanding n/a n/a n/a 558,552 n/a n/a ----------- ----------- -------------- ----------- -------------- -------------- Net asset value and redemption price per share (net assets/shares outstanding) n/a n/a n/a $ 4.85 n/a n/a =========== =========== ============== =========== ============== ============== Maximum offering price per share (net asset value plus sales charge of 3.50% of offering price) n/a n/a n/a $ 5.03 n/a n/a =========== =========== ============== =========== ============== ============== Class Q: Net assets $88,894,011 n/a n/a n/a n/a n/a ----------- ----------- -------------- ----------- -------------- -------------- Shares authorized unlimited n/a n/a n/a n/a n/a ----------- ----------- -------------- ----------- -------------- -------------- Par value $ 0.00 n/a n/a n/a n/a n/a ----------- ----------- -------------- ----------- -------------- -------------- Shares outstanding 5,288,407 n/a n/a n/a n/a n/a ----------- ----------- -------------- ----------- -------------- -------------- Net asset value offering and redemption price per share (net assets/shares outstanding) $ 16.81 n/a n/a n/a n/a n/a =========== =========== ============== =========== ============== ==============
* Redemption price varies by length of time shares held. 39 ----------------------- International Income & Precious Metals Funds ----------------------- STATEMENTS OF ASSETS AND LIABILITIES as of October 31, 2000 --------------------------------------------------------------------------------
Global Gold Silver Income Fund Fund Fund ------------- ------------- ------------- ASSETS: Investments in securities, at value* $ 35,294,236 $ 10,514,367 $ 13,948,071 Short-term securities, at amortized cost 4,445,685 3,457,755 296,048 Cash 421,784 788,377 110,698 Foreign cash, at value -- -- 88,120 Receivable for investments sold 1,091,083 82,049 14,341 Receivable for shares of beneficial interest sold 4,500 29,508 24,946 Dividends and interest receivable 25,003 14,979 553,904 Other receivable 3,777 1,055 27,157 Prepaid expenses 2,533 5,505 365 ------------- ------------- ------------- Total Assets 41,288,601 14,893,595 15,063,650 ------------- ------------- ------------- LIABILITIES: Payable for shares of beneficial interest reacquired 48,680 60,106 216 Payable to custodian 903,957 -- -- Investment advisory fee payable 36,282 13,308 13,506 Payable due to affiliate 3,560 Payable for future variation margin -- -- 2,347 Distribution fee payable 4,998 3,327 1,366 Transfer agent fee payable -- -- 1,877 Administrative services fee payable 3,628 1,331 1,351 Accrued expenses 161,082 121,084 135,944 ------------- ------------- ------------- Total Liabilities 1,158,627 202,716 156,607 ------------- ------------- ------------- NET ASSETS $ 40,129,974 $ 14,690,879 $ 14,907,043 ============= ============= ============= NET ASSETS WERE COMPRISED OF: Paid-in-capital $ 136,490,064 $ 36,157,609 $ 20,873,224 Undistributed net investment income 49,339 177,221 -- Accumulated net realized gain/loss on investments foreign currency and future contracts (82,878,255) (14,137,606) (1,056,127) Net unrealized appreciation (depreciation) of investments foreign currency and future contracts (13,531,174) (7,506,345) (4,910,054) ------------- ------------- ------------- Net Assets $ 40,129,974 $ 14,690,879 $ 14,907,043 ============= ============= ============= * Cost of securities $ 48,831,126 $ 18,020,694 $ 18,811,991 ** Cost of foreign currency -- -- 87,933
See Accompanying Notes to Financial Statements 40
Global Gold Silver Income Fund Fund Fund -------------- -------------- -------------- Class A: Net assets $ 40,129,974 $ 14,690,879 $ 14,904,297 -------------- -------------- -------------- Shares authorized 1,000,000,000 1,000,000,000 1,000,000,000 -------------- -------------- -------------- Par value $ 0.001 $ 0.001 $ 0.001 -------------- -------------- -------------- Shares outstanding 17,712,791 6,874,136 1,695,605 -------------- -------------- -------------- Net asset value and redemption value per share (net assets/shares outstanding) $ 2.27 $ 2.14 $ 8.79 ============== ============== ============== Maximum offering price per share (net asset value plus sales charge of 5.75%, 5.75% and 4.75% of offering price for Gold Fund, Silver Fund and Global Income Fund, respectively) $ 2.40 $ 2.27 $ 9.23 ============== ============== ============== Class C: Net assets n/a n/a $ 2,746 -------------- -------------- -------------- Shares authorized n/a n/a unlimited -------------- -------------- -------------- Par value $ n/a $ n/a $ 0.00 -------------- -------------- -------------- Shares outstanding n/a n/a 290 -------------- -------------- -------------- Net asset value and offering price per share (net assets/shares outstanding)* $ n/a $ n/a $ 9.47 ============== ============== ==============
* Redemption price varies by length of time shares are held. 41 ------------- International Equity Funds ------------- STATEMENTS OF OPERATIONS --------------------------------------------------------------------------------
Global Worldwide Corporate Growth Leaders Fund Fund ------------------------------ ------------------------------ For the For the For the For the period year period year July 1, 2000 ended January 1, 2000 ended to October 31, June 30, to October 31, December 31, 2000 2000 2000 1999 ------------- ------------- ------------- ------------- INVESTMENT INCOME: Dividends (net of foreign taxes) $ 1,232,902 $ 2,256,981 $ 147,665 $ 206,149 Interest 772,158 1,470,882 41,640 23,187 Other income -- -- -- -- ------------- ------------- ------------- ------------- Total investment income 2,005,060 3,727,863 189,305 229,336 ------------- ------------- ------------- ------------- EXPENSES: Investment advisory and management fees 2,199,958 4,327,642 151,843 176,043 Distribution fees: Class A 296,248 515,322 11,029 -- Class B 451,319 770,751 -- -- Class C 791,255 1,751,460 -- -- Class Q 42,066 94,045 -- -- Transfer agent fees and expenses 320,899 628,483 22,798 37,323 Administrative service fee -- 24,761(1) 4,411 -- Custodian and fund accounting expenses 156,540 348,012 13,217 25,700 Printing and postage expenses 54,489 160,859 21,832 19,724 Registration fees 34,569 43,713 13,965 11,888 Professional fees 13,284 51,263 30,327 40,984 Trustee expenses 6,150 18,000 101,767 16,691 Miscellaneous expenses 25,996 133,553 15,670 16,199 ------------- ------------- ------------- ------------- 4,392,773 8,867,864 386,859 344,552 Less: Waived and reimbursed fees/(recoupment) (25,414) -- 26,595 -- ------------- ------------- ------------- ------------- Total expenses 4,418,187 8,867,864 360,264 344,552 ------------- ------------- ------------- ------------- Net investment income (loss) (2,413,127) (5,140,001) (170,959) (115,216) ------------- ------------- ------------- ------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY: Net realized gain (loss) on investments (1,077,591) 32,664,018 1,726,013 1,026,581 Net realized gain (loss) on foreign currency (3,632,015) (1,744,754) (22,390) (40,254) Net change in unrealized appreciation (depreciation) of investments and foreign currency (78,001,428) 91,792,764 (3,925,391) 5,088,015 ------------- ------------- ------------- ------------- Net realized and unrealized gain (loss) on investments and foreign currency (82,711,034) 122,712,028 (2,221,768) 6,074,342 ------------- ------------- ------------- ------------- Increase (decrease) in net assets resulting from operations $ (85,124,161) $ 117,572,027 $ (2,392,727) $ 5,959,126 ============= ============= ============= ============= International Value International Fund Fund ------------- ------------------------------ For the For the For the year period year ended January 1, 2000 ended October 31, to October 31, December 31, 2000 2000 1999 ------------- ------------- ------------- INVESTMENT INCOME: Dividends (net of foreign taxes) $ 40,782,003 $ 339,999 $ 311,047 Interest 3,610,484 117,417 86,308 Other income -- -- -- ------------- ------------- ------------- Total investment income 44,392,487 457,416 397,355 ------------- ------------- ------------- EXPENSES: Investment advisory and management fees 15,936,553 228,277 224,416 Distribution fees: Class A 2,119,691 24,640 17,424 Class B 3,859,074 38 -- Class C 4,868,323 56 -- Class Q 35,847 -- -- Transfer agent fees and expenses 1,593,655 21,910 32,485 Administrative service fee 1,755,565 21,803 -- Custodian and fund accounting expenses 1,318,066 50,865 68,545 Printing and postage expenses 159,365 9,559 25,911 Registration fees 356,967 18,555 11,513 Professional fees 98,014 24,777 30,200 Trustee expenses 41,980 100,827 17,379 Miscellaneous expenses 33,498 8,432 16,382 ------------- ------------- ------------- 32,176,598 509,739 444,255 Less: Waived and reimbursed fees/(recoupment) -- -- -- ------------- ------------- ------------- Total expenses 32,176,598 509,739 444,255 ------------- ------------- ------------- Net investment income (loss) 12,215,889 (52,323) (46,900) ------------- ------------- ------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY: Net realized gain (loss) on investments 239,567,326 2,619,862 6,827,590 Net realized gain (loss) on foreign currency (910,801) (53,626) (107,950) Net change in unrealized appreciation (depreciation) of investments and foreign currency (41,147,980) (5,596,890) 2,440,717 ------------- ------------- ------------- Net realized and unrealized gain (loss) on investments and foreign currency 197,508,545 (3,030,654) 9,160,357 ------------- ------------- ------------- Increase (decrease) in net assets resulting from operations $ 209,724,434 $ (3,082,977) $ 9,113,457 ============= ============= =============
---------- (1) Reflected as shareholder service fee in the June 30, 2000 financial statements. See Accompanying Notes to Financial Statements 42 ------------- International Equity Funds ------------- STATEMENTS OF OPERATIONS --------------------------------------------------------------------------------
International International Emerging Core SmallCap Markets Growth Growth Value Fund Fund Fund ------------------------------ ------------------------------ ------------- For the For the For the For the For the period year period year year July 1, 2000 ended July 1, 2000 ended ended to October 31, June 30, to October 31, June 30, October 31, 2000 2000 2000 2000 2000 ------------- ------------- ------------- ------------- ------------- INVESTMENT INCOME: Dividends (net of foreign taxes) $ 297,428 $ 499,020 $ 798,529 $ 1,791,777 $ 595,814 Interest 68,680 205,365 1,298,101 2,145,159 15,402 ------------- ------------- ------------- ------------- ------------- Total investment income 366,108 704,385 2,096,630 3,936,936 611,216 ------------- ------------- ------------- ------------- ------------- EXPENSES: Investment advisory and management fees 288,517 698,942 2,362,535 4,285,711 181,790 Distribution fees: Class A 26,372 65,630 330,792 559,207 23,410 Class B 70,469 173,309 453,253 796,853 44,830 Class C 89,573 194,645 486,408 798,961 58,928 Class Q 13,294 35,869 138,277 293,086 -- Transfer agent fees and expenses 58,126 168,428 319,534 561,375 18,179 Administrative service fee -- 9,609(1) -- 28,293(1) 21,960 Custodian and fund accounting expenses 72,758 194,978 234,069 494,344 17,452 Printing and postage expenses 11,439 28,436 79,286 167,665 1,818 Registration fees 11,737 78,072 46,499 83,587 33,042 Professional fees 3,075 11,733 120,947 54,085 24,183 Trustee expenses 1,722 5,000 12,177 34,991 10,755 Miscellaneous expenses 2,105 55,204 29,142 43,176 2,959 ------------- ------------- ------------- ------------- ------------- 649,187 1,719,855 4,612,919 8,201,334 439,306 Less: Waived and reimbursed fees/(recoupment) 41,295 212,567 (15,793) -- -- ------------- ------------- ------------- ------------- ------------- Total expenses 607,892 1,507,288 4,628,712 8,201,334 439,306 ------------- ------------- ------------- ------------- ------------- Net investment income (loss) (241,784) (802,903) (2,532,082) (4,264,398) 171,910 ------------- ------------- ------------- ------------- ------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY: Net realized gain (loss) on investments (net of foreign tax on the sale of Indian investments of $0, $0, $784,263, $0 and $0, respectively -- Note 2) 923,712 8,378,791 (4,911,433) 60,928,025 3,362,922 Net realized gain (loss) on foreign currency (1,359,550) (485,310) (8,476,248) (2,124,426) (128,508) Net change in unrealized appreciation (depreciation) of investments and foreign currency (net of change in estimated tax liability on Indian investments of $0, $0, $0, $0 and $0, respectively -- Note 2) (10,007,118) 7,236,744 (73,243,053) 73,844,281 (2,689,917) ------------- ------------- ------------- ------------- ------------- Net realized and unrealized gain (loss) on investments and foreign currency (10,442,956) 15,130,225 (86,630,734) 132,647,880 544,497 ------------- ------------- ------------- ------------- ------------- Increase (decrease) in net assets resulting from operations $ (10,684,740) $ 14,327,322 $ (89,162,816) $ 128,383,482 $ 716,407 ============= ============= ============= ============= =============
---------- (1) Reflected as shareholder service fee in the June 30, 2000 financial statements. See Accompanying Notes to Financial Statements 43 ------------- International Equity Funds ------------- STATEMENTS OF OPERATIONS --------------------------------------------------------------------------------
Worldwide Emerging Emerging Countries Markets Fund Fund ---------------------------- ---------------------------- For the For the For the For the period year period year July 1, 2000 ended January 1, 2000 ended to October 31, June 30, to October 31, December 31, 2000 2000 2000 1999 ------------ ------------ ------------ ------------ INVESTMENT INCOME: Dividends (net of foreign taxes) $ 679,961 $ 1,758,417 $ 532,092 $ 892,812 Interest 175,362 283,787 396,671 160,425 ------------ ------------ ------------ ------------ Total investment income 855,323 2,042,204 928,763 1,053,237 ------------ ------------ ------------ ------------ EXPENSES: Investment advisory and management fees 969,468 2,773,339 1,171,197 785,431 Distribution fees: Class A 79,524 226,595 262,807 196,336 Class B 90,642 295,635 -- -- Class C 88,953 276,850 -- -- Class M -- -- -- -- Class Q 92,178 249,693 -- -- Transfer agent fees and expenses 131,281 517,621 83,991 107,824 Administrative service fee -- 14,946(1) 41,058 -- Custodian and fund accounting expenses 265,723 682,516 392,925 286,989 Printing and postage expenses 34,563 81,878 197,473 64,800 Registration fees 15,170 77,620 26,246 21,369 Professional fees 12,423 39,069 28,709 35,039 Trustee expenses 5,043 15,000 100,295 20,260 Miscellaneous expenses 195,725 89,734 201,745 54,868 ------------ ------------ ------------ ------------ 1,980,693 5,340,496 2,506,446 1,572,916 Less: Waived and reimbursed fees 100,513 346,154 -- -- Redemption fee proceeds -- -- -- -- ------------ ------------ ------------ ------------ Total expenses 1,880,180 4,994,342 2,506,446 1,572,916 ------------ ------------ ------------ ------------ Net investment income (loss) (1,024,857) (2,952,138) (1,577,683) (519,679) ------------ ------------ ------------ ------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY: Net realized gain (loss) on investments (net of foreign tax on the sale of Indian investments of $1,489,942, $4,489,899, $0, $0, $0 and $0, respectively -- Note 2 ) (10,974,819) 39,798,714 30,477,562 8,199,636 Net realized gain (loss) on foreign currency (1,941,282) (303,058) (9,442,252) (177,571) Net change in unrealized appreciation (depreciation) of investments and foreign currency (net of change in estimated tax liability on Indian investments of $273,581, $860,486, $88,692, $0, $0 and $0, respectively -- see note 2) (33,354,364) (3,851,223) (76,866,834) 60,956,572 ------------ ------------ ------------ ------------ Net realized and unrealized gain (loss) on investments and foreign currency (46,270,465) 35,644,433 (55,831,524) 68,978,637 ------------ ------------ ------------ ------------ Increase (decrease) in net assets resulting from operations $(47,295,322) $ 32,692,295 $(57,409,207) $ 68,458,958 ============ ============ ============ ============
Global Technology Fund ----------------------------- For the For the period period(2) January 1, 2000 ended to October 31, December 31, 2000 1999 ----------- ----------- INVESTMENT INCOME: Dividends (net of foreign taxes) $ 31,910 $ -- Interest 39,660 -- ----------- ----------- Total investment income 71,570 -- ----------- ----------- EXPENSES: Investment advisory and management fees 102,819 -- Distribution fees: Class A 6,343 -- Class B -- -- Class C -- -- Class M -- -- Class Q -- -- Transfer agent fees and expenses 23,674 -- Administrative service fee 2,537 -- Custodian and fund accounting expenses 32,145 -- Printing and postage expenses 25,452 -- Registration fees 27,916 -- Professional fees 23,085 1,500 Trustee expenses 100,782 -- Miscellaneous expenses 14,061 16,557 ----------- ----------- 358,814 18,057 Less: Waived and reimbursed fees 133,778 -- Redemption fee proceeds 11,109 -- ----------- ----------- Total expenses 213,927 18,057 ----------- ----------- Net investment income (loss) (142,357) (18,057) ----------- ----------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY: Net realized gain (loss) on investments (net of foreign tax on the sale of Indian investments of $1,489,942, $4,489,899, $0, $0, $0 and $0, respectively -- Note 2 ) (133,293) -- Net realized gain (loss) on foreign currency (513) -- Net change in unrealized appreciation (depreciation) of investments and foreign currency (net of change in estimated tax liability on Indian investments of $273,581, $860,486, $88,692, $0, $0 and $0, respectively -- see note 2) (4,020,476) -- ----------- ----------- Net realized and unrealized gain (loss) on investments and foreign currency (4,154,282) -- ----------- ----------- Increase (decrease) in net assets resulting from operations $(4,296,639) $ (18,057) =========== =========== ---------- (1) Reflected as shareholder service fee in the June 30, 2000 financial statements. (2) The Fund commenced operations on December 27, 1999. See Accompanying Notes to Financial Statements 44 ------------- International Equity Funds ------------- STATEMENTS OF OPERATIONS --------------------------------------------------------------------------------
SmallCap Troika Asia-Pacific Asia Dialog Equity Growth Russia Fund Fund Fund ------------------------- -------------------------- --------------------------- For the For the For the For the For the For the period year period year period year July 1, 2000 ended January 1, 2000 ended January 1, 2000 ended to October 31, June 30, to October 31, December 31, to October 31, December 31, 2000 2000 2000 1999 2000 1999 ----------- ----------- ----------- ----------- ----------- ------------ INVESTMENT INCOME: Dividends (net of foreign taxes) $ 471,686 $ 429,859 $ 111,940 $ 170,012 $ 190,496 $ 132,013 Interest 15,419 74,595 19,085 23,628 492,305 2,226,744 ----------- ----------- ----------- ----------- ----------- ------------ Total investment income 487,105 504,454 131,025 193,640 682,801 2,358,757 ----------- ----------- ----------- ----------- ----------- ------------ EXPENSES: Investment advisory and management fees 96,557 413,123 116,528 167,228 740,035 444,970 Distribution fees: Class A 8,148 34,682 5,110 -- 170,532 61,804 Class B 25,647 138,885 -- -- -- Class C -- -- -- -- -- Class M 7,729 39,665 -- -- -- -- Class Q -- -- -- -- -- Transfer agent fees and expenses 23,241 119,865 28,792 46,915 64,107 82,677 Administrative service fee 8,549 6,210(1) 2,044 35,801 Custodian and fund accounting expenses 41,454 131,764 36,655 59,911 401,625 343,928 Printing and postage expenses 7,134 11,979 17,216 30,657 28,423 59,977 Registration fees 11,136 36,084 16,938 21,394 18,630 21,198 Professional fees 1,722 4,847 23,967 33,881 45,880 63,559 Trustee expenses 861 2,183 99,886 16,586 131,801 47,142 Miscellaneous expenses 7,938 36,536 30,400 25,473 46,076 57,900 ----------- ----------- ----------- ----------- ----------- ------------ 240,116 975,823 377,536 402,045 1,682,910 1,183,155 Less: Waived and reimbursed fees 50,371 145,502 133,713 67,545 -- -- Redemption fee proceeds -- -- 465,732 387,770 ----------- ----------- ----------- ----------- ----------- ------------ Total expenses 189,745 830,321 243,823 334,500 1,217,178 795,385 ----------- ----------- ----------- ----------- ----------- ------------ Net investment income (loss) 297,360 (325,867) (112,798) (140,860) (534,377) 1,563,372 ----------- ----------- ----------- ----------- ----------- ------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY: Net realized gain (loss) on investments (net of foreign tax on sale of Indian investments of $0, $4,489,899, $0, $0, $0 and $0, respectively -- Note 2) (13,832) 7,546,867 1,381,553 2,483,913 8,296,765 (27,725,310) Net realized gain (loss) on foreign currency (69,352) (47,823) (44,791) (131,303) (118,397) (7,739,434) Net change in unrealized appreciation (depreciation) of investments and foreign currency (8,020,905) (5,113,014) (4,414,361) 2,576,380 (4,834,914) 66,709,158 ----------- ----------- ----------- ----------- ----------- ------------ Net realized and unrealized gain (loss) on investments and foreign currency (8,104,089) 2,386,030 (3,077,599) 4,928,990 3,343,454 31,244,414 ----------- ----------- ----------- ----------- ----------- ------------ Increase (decrease) in net assets resulting from operations $(7,806,729) $ 2,060,163 $(3,190,397) $ 4,788,130 $ 2,809,077 $ 32,807,786 =========== =========== =========== =========== =========== ============
---------- (1) Reflected as shareholder service fee in the June 30, 2000 financial statements. See Accompanying Notes to Financial Statements 45 ----------------------- International Income & Precious Metals Funds ----------------------- STATEMENTS OF OPERATIONS --------------------------------------------------------------------------------
Global Gold Silver Income Fund Fund Fund ---------------------------- -------------------------- -------------------------- For the For the For the For the For the For the period year period year period year January 1, 2000 ended January 1, 2000 ended January 1, 2000 ended to October 31, December 31, to October 31, December 31, to October 31, December 31, 2000 1999 2000 1999 2000 1999 ------------ ------------ ----------- ----------- ----------- ----------- INVESTMENT INCOME: Dividends (net of foreign taxes) $ 994,673 $ 977,174 $ 407,477 $ 466,796 $ -- $ -- Interest 113,277 193,852 183,811 210,793 2,664,406 4,475,808 ------------ ------------ ----------- ----------- ----------- ----------- Total investment income 1,107,950 1,171,026 591,288 677,589 2,664,406 4,475,808 ------------ ------------ ----------- ----------- ----------- ----------- EXPENSES: Investment advisory and management fees 439,593 583,491 167,432 261,004 240,175 334,433 Distribution fees: Class A 63,622 75,410 10,728 -- 30,197 40,884 Transfer agent fees and expenses 117,312 174,169 47,120 97,868 18,891 43,177 Administrative service fee 11,744 12,274 22,154 Custodian and fund accounting expenses 47,369 109,894 20,859 68,619 38,624 82,008 Printing and postage expenses 70,753 59,842 34,618 35,196 18,422 32,348 Registration fees 20,166 25,444 18,213 12,899 17,148 16,449 Professional fees 37,991 80,503 28,782 38,837 47,994 34,786 Trustee expenses 102,844 17,583 102,037 16,642 100,869 18,056 Miscellaneous expenses 71,082 59,824 23,429 18,986 47,986 19,589 ------------ ------------ ----------- ----------- ----------- ----------- 982,476 1,186,160 465,492 550,051 582,460 621,730 Less: Waived and reimbursed fees -- -- 53,262 -- -- -- ------------ ------------ ----------- ----------- ----------- ----------- Total expenses 982,476 1,186,160 412,230 550,051 582,460 621,730 ------------ ------------ ----------- ----------- ----------- ----------- Net investment income (loss) 125,474 (15,134) 179,058 127,538 2,081,946 3,854,078 ------------ ------------ ----------- ----------- ----------- ----------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY: Net realized loss on investments (8,421,625) (25,580,452) (4,714,924) (641,295) (746,692) (309,304) Net realized loss on foreign currency (2,091,095) (8,439) (623,115) (293) (1,467,917) (1,437,952) Net change in unrealized depreciation of investments and foreign currency (10,053,228) 32,389,359 (1,018,732) 2,489,979 (1,034,374) (2,297,809) ------------ ------------ ----------- ----------- ----------- ----------- Net realized and unrealized loss on investments and foreign currency (20,565,948) 6,800,468 (6,356,771) 1,848,391 (3,248,983) (4,045,065) ------------ ------------ ----------- ----------- ----------- ----------- Net decrease in net assets resulting from operations $(20,440,474) $ 6,785,334 $(6,177,713) $ 1,975,929 $(1,167,037) $ (190,987) ============ ============ =========== =========== =========== ===========
---------- (1) Reflected as shareholder service fee in the June 30, 2000 financial statements. See Accompanying Notes to Financial Statements 46 ------------- International Equity Funds ------------- STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------------------------------------------
Worldwide Growth Fund ----------------------------------------------------------------- For the period For the year For the period For the year July 1, 2000 ended April 1, 1999 ended to October 31, June 30, to June 30, March 31, 2000 2000 1999 1999 ------------- ------------- ------------- ------------- From Operations: Net investment income (loss) $ (2,413,127) $ (5,140,001) $ (238,891) $ (1,461,258) Net realized gain (loss) from investments (1,077,591) 32,664,018 5,142,968 34,678,990 Net realized gain (loss) on foreign currency (3,632,015) (1,744,754) (317,798) (229,650) Net change in unrealized appreciation (depreciation) of investments and foreign currency (78,001,428) 91,792,764 20,367,556 12,614,021 ------------- ------------- ------------- ------------- Increase (decrease) in net assets resulting from operations (85,124,161) 117,572,027 24,953,835 45,602,103 Distributions to shareholders: From net investment income: Class A -- -- -- -- Class B -- -- -- -- Class C -- -- -- -- Class M -- -- -- -- Class Q -- -- -- -- Retail Classes -- -- -- (136,708)(1) Advisory and Institutional Classes -- -- -- (337,084)(1) From realized gain from investments -- (37,665,102) -- (21,269,643)(2) ------------- ------------- ------------- ------------- Total distributions -- (37,665,102) -- (21,743,435) ------------- ------------- ------------- ------------- From Capital Share Transactions: Net proceeds from sales of shares 187,453,816 664,789,596 53,831,659 242,170,764 Net asset value of shares issued to shareholders in reinvestment of dividends -- 33,052,649 -- 5,494,245 ------------- ------------- ------------- ------------- 187,453,816 697,842,245 53,831,659 247,665,009 Cost of shares redeemed (130,618,094) (337,872,684) (106,485,390)(3) (168,874,579) ------------- ------------- ------------- ------------- Net increase (decrease) in net assets derived from capital share transactions 56,835,722 359,969,561 (52,653,731) 78,790,430 ------------- ------------- ------------- ------------- Net increase (decrease) in net assets (28,288,439) 439,876,486 (27,699,896) 102,649,098 Net Assets: Beginning of period 660,179,270 220,302,784 248,002,680 145,353,582 ------------- ------------- ------------- ------------- End of period $ 631,890,831 $ 660,179,270 $ 220,302,784 $ 248,002,680 ============= ============= ============= ============= Undistributed (distribution in excess) net investment income $ (587,286) $ -- $ -- $ (7,189,744) ============= ============= ============= ============= Global Corporate Leaders Fund ---------------------------------------------- For the period Year For the year January 1, 2000 ended ended to October 31, December 31, December 31, 2000 1999 1998 ------------ ------------ ------------ From Operations: Net investment income (loss) $ (170,959) $ (115,216) $ (14,935) Net realized gain (loss) from investments 1,726,013 1,026,581 5,303,730 Net realized gain (loss) on foreign currency (22,390) (40,254) 121,618 Net change in unrealized appreciation (depreciation) of investments and foreign currency (3,925,391) 5,088,015 231,415 ------------ ------------ ------------ Increase (decrease) in net assets resulting from operations (2,392,727) 5,959,126 5,641,828 Distributions to shareholders: From net investment income: Class A -- (1,147,467) (1,176,896) Class B -- -- -- Class C -- -- -- Class M -- -- -- Class Q -- -- -- Retail Classes -- -- -- Advisory and Institutional Classes -- -- -- From realized gain from investments -- (123,607) (3,427,660) ------------ ------------ ------------ Total distributions -- (1,271,074) (4,604,556) ------------ ------------ ------------ From Capital Share Transactions: Net proceeds from sales of shares 4,872,027 2,893,261 4,884,051 Net asset value of shares issued to shareholders in reinvestment of dividends -- 917,731 4,402,616 ------------ ------------ ------------ 4,872,027 3,810,992 9,286,667 Cost of shares redeemed (5,203,040) (6,684,363) (27,606,682) ------------ ------------ ------------ Net increase (decrease) in net assets derived from capital share transactions (331,013) (2,873,371) (18,320,015) ------------ ------------ ------------ Net increase (decrease) in net assets (2,723,740) 1,814,681 (17,282,743) Net Assets: Beginning of period 19,617,233 17,802,552 35,085,295 ------------ ------------ ------------ End of period $ 16,893,493 $ 19,617,233 $ 17,802,552 ============ ============ ============ Undistributed (distribution in excess) net investment income $ -- $ (269) $ 334,184 ============ ============ ============
---------- (1) As reflected in the June 30, 2000 Annual Report. (2) Includes distributions from realized gains from both retail classes along with advisory and institutional classes. (3) Includes Class I redemptions of $80,662,778. See Accompanying Notes to Financial Statements 47 ------------- International Equity Funds ------------- STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------------------------------------------
International Value Fund International Fund ---------------------------------- -------------------------------------------- Year Year For the period For the year For the year Ended Ended January 1, 2000 Ended Ended October 31, October 31, to October 31, December 31, December 31, 2000 1999 2000 1999 1998 --------------- --------------- ------------ ------------ ------------ From Operations: Net investment income (loss) $ 12,215,889 $ 3,580,736 $ (52,323) $ (46,900) $ 75,759 Net realized gain (loss) from investments 239,567,326 49,724,160 2,619,862 6,827,590 1,294,568 Net realized gain (loss) on foreign currency (910,801) 3,476,523 (53,626) (107,950) 80,197 Net change in unrealized appreciation (depreciation) of investments and foreign currency (41,147,980) 128,073,707 (5,596,890) 2,440,717 2,145,676 --------------- --------------- ------------ ------------ ------------ Increase (decrease) in net assets resulting from operations 209,724,434 184,855,126 (3,082,977) 9,113,457 3,596,200 Distributions to Shareholders: From net investment income: Class A (3,809,622) (2,447,955) (1,681,140) (46,770) (116,960) Class B (593,913) (638,225) -- -- -- Class C (828,109) (652,956) -- -- -- Class Q -- -- -- -- -- From realized gain from investments (53,012,739) (28,295,922) (159,635) (5,598,256) (695,462) --------------- --------------- ------------ ------------ ------------ Total distributions (58,244,383) (32,035,058) (1,840,775) (5,645,026) (812,422) --------------- --------------- ------------ ------------ ------------ From Capital Share Transactions: Net proceeds from sales of shares 1,843,922,647 765,122,980 22,887,629 5,619,698 11,440,387 Net asset value of shares issued to shareholders in reinvestment of dividends 44,206,140 25,417,235 1,011,365 4,382,040 669,485 --------------- --------------- ------------ ------------ ------------ 1,888,128,787 790,540,215 23,898,994 10,001,738 12,109,872 Cost of shares redeemed (1,091,605,981) (397,092,669) (13,461,366) (12,165,686) (10,843,052) --------------- --------------- ------------ ------------ ------------ Net increase (decrease) in net assets derived from capital share transactions 796,522,806 393,447,546 10,437,628 (2,163,948) 1,266,820 --------------- --------------- ------------ ------------ ------------ Net increase in net assets 948,002,857 546,267,614 5,513,876 1,304,483 4,050,598 Net Assets: Beginning of period 1,040,913,097 494,645,483 25,304,198 23,999,715 19,949,117 --------------- --------------- ------------ ------------ ------------ End of period $ 1,988,915,954 $ 1,040,913,097 $ 30,818,074 $ 25,304,198 $ 23,999,715 =============== =============== ============ ============ ============ Undistributed (distribution in excess of) net investment income $ 10,143,582 $ 3,538,149 $ (44,363) $ 220,248 $ 154,188 =============== =============== ============ ============ ============
See Accompanying Notes to Financial Statements 48 ------------- International Equity Funds ------------- STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------------------------------------------
International Core Growth Fund ----------------------------------------------------------------- For the period Year For the period For the year July 1, 2000 Ended April 1, 1999 Ended to October 31, June 30, to June 30, March 31, 2000 2000 1999 1999 ------------- ------------- ------------- ------------- From Operations: Net investment income (loss) $ (241,784) $ (802,903) $ 69,633 $ (310,557) Net realized gain from investments 923,712 8,378,791 4,193,951 793,552 Net realized loss on foreign currency (1,359,550) (485,310) (280,912) (1,322,452) Net change in unrealized appreciation (depreciation) of investments and foreign currency (10,007,118) 7,236,744 4,018,188 13,512,294 ------------- ------------- ------------- ------------- Increase (decrease) in net assets resulting from operations (10,684,740) 14,327,322 8,000,860 12,672,837 Distributions to Shareholders: From net investment income: Class A -- -- -- -- Class B -- -- -- -- Class C -- -- -- -- Class Q -- -- -- -- Retail Classes -- -- -- (205,129)(1) Advisory and Institutional Classes -- (1,678) -- (29,622)(1) From realized gain from investments -- (2,936,042) -- (168,744)(2) ------------- ------------- ------------- ------------- Total distributions -- (2,937,720) -- (403,495) ------------- ------------- ------------- ------------- From Capital Share Transactions: Net proceeds from sales of shares 66,836,057 192,088,330 35,644,077 173,884,589 Net asset value of shares issued to shareholders in reinvestment of dividends -- 2,747,516 -- 228,203 ------------- ------------- ------------- ------------- 66,836,057 194,835,846 35,644,077 174,112,792 Cost of shares redeemed (61,845,481) (164,147,202) (160,094,007)(3) (82,311,581) ------------- ------------- ------------- ------------- Net increase (decrease) in net assets derived from capital share transactions 4,990,576 30,688,644 (124,449,930) 91,801,211 ------------- ------------- ------------- ------------- Net increase (decrease) in net assets (5,694,164) 42,078,246 (116,449,070) 104,070,553 Net Assets: Beginning of period 87,846,778 45,768,532 162,217,602 58,147,049 ------------- ------------- ------------- ------------- End of period $ 82,152,614 $ 87,846,778 $ 45,768,532 $ 162,217,602 ============= ============= ============= ============= Undistributed (distribution in excess of) net investment income $ 742,176 $ -- $ 69,633 $ (647,924) ============= ============= ============= =============
---------- (1) As reflected in the June 30, 2000 Annual Report. (2) Includes distributions from realized gains from both retail classes along with advisory and institutional classes. (3) Includes Class I redemptions of $112,851,333. See Accompanying Notes to Financial Statements 49 ------------- International Equity Funds ------------- STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------------------------------------------
International Small Cap Growth Fund ----------------------------------------------------------------------- For the period Year For the period For the year July 1, 2000 Ended April 1, 1999 ended to October 31, June 30, to June 30, March 31, 2000 2000 1999 1999 --------------- --------------- ------------- ------------- From Operations: Net investment income (loss) $ (2,532,082) $ (4,264,398) $ (217,461) $ (725,193) Net realized gain (loss) from investments (4,911,433) 60,928,025 5,411,890 8,536,211 Net realized gain (loss) on foreign currency (8,476,248) (2,124,426) (79,978) (310,687) Net change in unrealized appreciation (depreciation) of investments and foreign currency (73,243,053) 73,844,281 11,694,205 14,357,916 --------------- --------------- ------------- ------------- Increase (decrease) in net assets resulting from operations (89,162,816) 128,383,482 16,808,656 21,858,247 From Dividends to Shareholders: From net investment income: Class A -- -- -- -- Class B -- -- -- -- Class C -- -- -- -- Class Q -- -- -- -- Retail Classes -- -- -- -- Advisory and Institutional Classes -- -- -- (76,552)(1) From realized gain from investments -- (17,147,337) -- (4,000,132)(2) --------------- --------------- ------------- ------------- Total distributions -- (17,147,337) -- (4,076,684) --------------- --------------- ------------- ------------- From Capital Share Transactions: Net proceeds from sales of shares 443,296,214 1,305,859,725 48,190,262 194,823,908 Net asset value of shares issued to shareholders in reinvestment of dividends -- 15,848,417 -- 3,425,742 --------------- --------------- ------------- ------------- 443,296,214 1,321,708,142 48,190,262 198,249,650 Cost of shares redeemed (370,749,870) (832,581,584) (103,559,352)(3) (142,304,879) --------------- --------------- ------------- ------------- Net increase (decrease) in net assets derived from capital share transactions 72,546,344 489,126,558 (55,369,090) 55,944,771 --------------- --------------- ------------- ------------- Net increase (decrease) in net assets (16,616,472) 600,362,703 (38,560,434) 73,726,334 Net Assets: Beginning of period 718,419,060 118,056,357 156,616,791 82,890,457 --------------- --------------- ------------- ------------- End of period $ 701,802,588 $ 718,419,060 $ 118,056,357 $ 156,616,791 =============== =============== ============= ============= Accumulated net investment loss $ (3,454,110) $ -- $ -- $ (1,982,021) =============== =============== ============= =============
---------- (1) As reflected in the June 30, 2000 Annual Report. (2) Includes distributions from realized gains from both retail classes along with advisory and institutional classes. (3) Includes Class I redemptions of $73,163,306. See Accompanying Notes to Financial Statements 50 ------------- International Equity Funds ------------- STATEMENTS OF CHANGES IN NET ASSETS -------------------------------------------------------------------------------- Emerging Markets Value Fund ------------------------------ For the period For the year November 1, 1999 ended to October 31, October 31, 2000 1999 ------------ ------------ From Operations: Net investment income (loss) $ 171,910 $ 142,115 Net realized gain (loss) from investments 3,362,922 926,219 Net realized gain (loss) on foreign currency (128,508) (9,987) Net change in unrealized appreciation (depreciation) of investments and foreign currency (2,689,917) 3,931,451 ------------ ------------ Increase (decrease) in net assets resulting from operations 716,407 4,989,798 Distributions to Shareholders: From net investment income: Class A (98,414) (68,673) Class B (13,808) (40,034) Class C (33,528) (39,146) Retail Classes -- -- Advisory and Institutional Classes -- -- From realized gain from investments (803,574) -- ------------ ------------ Total distributions (949,324) (147,853) ------------ ------------ From Capital Share Transactions: Net proceeds from sales of shares 3,593,599 10,710,032 Net asset value of shares issued to shareholders in reinvestment of dividends 775,209 101,215 ------------ ------------ 4,368,808 10,811,247 Cost of shares redeemed (10,796,459) (5,576,842) ------------ ------------ Net increase (decrease) in net assets derived from capital share transactions (6,427,651) 5,234,405 ------------ ------------ Net increase (decrease) in net assets (6,660,568) 10,076,350 Net Assets: Beginning of period 19,778,258 9,701,908 ------------ ------------ End of period $ 13,117,690 $ 19,778,258 ============ ============ Undistributed net investment income $ 143,820 $ 124,077 ============ ============
Emerging Countries Fund ----------------------------------------------------------------- For the period For the year For the period For the year July 1, 2000 ended April 1, 1999 ended to October 31, June 30, to June 30, March 31, 2000 2000 1999 1999 ------------- ------------- ------------- ------------- From Operations: Net investment income (loss) $ (1,024,857) $ (2,952,138) $ (30,573) $ (444,466) Net realized gain (loss) from investments (10,974,819) 39,798,714 11,704,157 (82,042,109) Net realized gain (loss) on foreign currency (1,941,282) (303,058) (465,273) (1,781,198) Net change in unrealized appreciation (depreciation) of investments and foreign currency (33,354,364) (3,851,223) 51,126,351 10,517,870 ------------- ------------- ------------- ------------- Increase (decrease) in net assets resulting from operations (47,295,322) 32,692,295 62,334,662 (73,749,903) Distributions to Shareholders: From net investment income: Class A -- -- -- -- Class B -- -- -- -- Class C -- -- -- -- Retail Classes -- -- -- (105,494)(1) Advisory and Institutional Classes -- -- -- (676,244)(1) From realized gain from investments -- -- -- (1,117,064)(2) ------------- ------------- ------------- ------------- Total distributions -- -- -- (1,898,802) ------------- ------------- ------------- ------------- From Capital Share Transactions: Net proceeds from sales of shares 66,531,341 250,385,738 38,136,033 234,887,012 Net asset value of shares issued to shareholders in reinvestment of dividends -- -- -- 1,499,434 ------------- ------------- ------------- ------------- 66,531,341 250,385,738 38,136,033 236,386,446 Cost of shares redeemed (80,132,252) (211,768,273) (199,492,674)(3) (160,102,083) ------------- ------------- ------------- ------------- Net increase (decrease) in net assets derived from capital share transactions (13,600,911) 38,617,465 (161,356,641) 76,284,363 ------------- ------------- ------------- ------------- Net increase (decrease) in net assets (60,896,233) 71,309,760 (99,021,979) 635,658 Net Assets: Beginning of period 254,493,959 183,184,199 282,206,178 281,570,520 ------------- ------------- ------------- ------------- End of period $ 193,597,726 $ 254,493,959 $ 183,184,199 $ 282,206,178 ============= ============= ============= ============= Undistributed net investment income $ (58,147) $ -- $ -- $ (2,164,624) ============= ============= ============= =============
---------- (1) As reflected in the June 30, 2000 Annual Report. (2) Includes distributions from realized gains from both retail classes along with advisory and institutional classes. (3) Includes Class I redemptions of $167,510,018. See Accompanying Notes to Financial Statements 51 ------------- International Equity Funds ------------- STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------------------------------------------
Worldwide Emerging Markets Fund ----------------------------------------------- For the period Year For the year January 1, 2000 ended ended to October 31, December 31, December 31, 2000 1999 1998 ------------- ------------- ------------- From Operations: Net investment income (loss) $ (1,577,683) $ (519,679) $ 1,130,655 Net realized gain (loss) from investments 30,477,562 8,199,636 (36,473,430) Net realized loss on foreign currency (9,442,252) (177,571) (100,717) Net change in unrealized appreciation (depreciation) of investments and foreign currency (76,866,834) 60,956,572 891,315 ------------- ------------- ------------- Increase (decrease) in net assets resulting from operations (57,409,207) 68,458,958 (34,552,177) Distributions to Shareholders: From net investment income: Class A -- (286,571) (870,294) Class B -- -- -- Class C -- -- -- Retail Classes -- -- -- Advisory and Institutional Classes -- -- -- From realized gain from investments -- -- -- ------------- ------------- ------------- Total distributions -- (286,571) (870,294) ------------- ------------- ------------- From Capital Share Transactions: Net proceeds from sales of shares 217,321,414 99,235,547 55,113,742 Net asset value of shares issued to shareholders in reinvestment of dividends -- 268,725 806,004 ------------- ------------- ------------- 217,321,414 99,504,272 55,919,746 Cost of shares redeemed (233,409,624) (78,005,927) (92,859,973) ------------- ------------- ------------- Net increase (decrease) in net assets derived from capital share transactions (16,088,210) 21,498,345 (36,940,227) ------------- ------------- ------------- Net increase (decrease) in net assets (73,497,417) 89,670,732 (72,362,698) Net Assets: Beginning of period 154,993,770 65,323,038 137,685,736 ------------- ------------- ------------- End of period $ 81,496,353 $ 154,993,770 $ 65,323,038 ============= ============= ============= Distribution in excess of net investment income $ (92,507) $ (119,233) $ 281,164 ============= ============= =============
See Accompanying Notes to Financial Statements 52 ------------- International Equity Funds ------------- STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------------------------------------------
Global Technology Fund Asia-Pacific Equity Fund ------------------------------ ----------------------------------------------- For the period For the period For the period For the year For the year January 1, 2000 ended July 1, 2000 ended ended to October 31, December 31, to October 31, June 30, June 30, 2000 1999(1) 2000 2000 1999 ------------- ------------- ------------- ------------- ------------- From Operations: Net investment income (loss) $ (142,357) $ -- $ 297,360 $ (325,867) $ (83,355) Net realized gain (loss) from investments (133,293) -- (13,832) 7,546,867 (6,593,623) Net realized gain on foreign currency (513) -- (69,352) (47,823) (76,798) Net change in unrealized appreciation (depreciation) of investments and foreign currency (4,020,476) -- (8,020,905) (5,113,014) 20,223,587 ------------- ------------- ------------- ------------- ------------- Increase (decrease) in net assets resulting from operations (4,296,639) -- (7,806,729) 2,060,163 13,469,811 From Capital Share Transactions: Net proceeds from sales of shares 14,993,431 100,000 20,603,558 103,757,205 137,827,549 Cost of shares redeemed (1,908,595) -- (21,639,119) (110,675,525) (143,882,119) ------------- ------------- ------------- ------------- ------------- Net increase (decrease) in net assets derived from capital share transactions 13,084,836 100,000 (1,035,561) (6,918,320) (6,054,570) ------------- ------------- ------------- ------------- ------------- Net increase (decrease) in net assets 8,788,197 100,000 (8,842,290) (4,858,157) 7,415,241 Net Assets: Beginning of period 100,000 -- 27,702,380 32,560,537 25,145,296 ------------- ------------- ------------- ------------- ------------- End of period $ 8,888,197 $ 100,000 $ 18,860,090 $ 27,702,380 $ 32,560,537 ============= ============= ============= ============= ============= Undistributed net investment income $ -- $ -- $ 296,231 $ -- $ -- ============= ============= ============= ============= =============
---------- (1) The Fund commenced operations on December 27, 1999. See Accompanying Notes to Financial Statements 53 ------------- International Equity Funds ------------- STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------------------------------------------
SmallCap Asia Growth Fund -------------------------------------------- For the period For the year For the year January 1, 2000 ended ended to October 31, December 31, December 31, 2000 1999 1998 ------------ ------------ ------------ From Operations: Net investment income (loss) $ (112,798) $ (140,860) $ (30,606) Net realized gain (loss) from investments 1,381,553 2,483,913 (11,201,991) Net realized gain (loss) on foreign currency (44,791) (131,303) 33,627 Net change in unrealized appreciation (depreciation) of investments and foreign currency (4,414,361) 2,576,380 8,154,959 ------------ ------------ ------------ Increase (decrease) in net assets resulting from operations (3,190,397) 4,788,130 (3,044,011) From Capital Share Transactions: Net proceeds from sales of shares 26,449,435 33,047,205 37,640,881 Net asset value of shares issued to shareholders in reinvestment of dividends -- -- -- ------------ ------------ ------------ 26,449,435 33,047,205 37,640,881 Cost of shares redeemed (33,021,682) (41,720,654) (30,186,041) ------------ ------------ ------------ Net increase (decrease) in net assets derived from capital share transactions (6,572,247) (8,673,449) 7,454,840 ------------ ------------ ------------ Net increase (decrease) in net assets (9,762,644) (3,885,319) 4,410,829 Net Assets: Beginning of period 14,392,372 18,277,691 13,866,862 ------------ ------------ ------------ End of period $ 4,629,728 $ 14,392,372 $ 18,277,691 ============ ============ ============ Distribution in excess of net investment income $ -- $ (15,182) $ (45,666) ============ ============ ============
See Accompanying Notes to Financial Statements 54 ------------- International Equity Funds ------------- STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------------------------------------------
Troika Dialog Russia Fund ----------------------------------------------- For the period For the year For the year January 1, 2000 ended ended to October 31, December 31, December 2000 1999 1998 ------------- ------------- ------------- From Operations: Net investment income (loss) $ (534,377) $ 1,563,372 $ 1,067,794 Net realized gain (loss) from investments 8,296,765 (27,725,310) (48,990,439) Net Realized Gain (Loss) on foreign currency (118,397) (7,739,434) 148,661 Net change in unrealized appreciation (depreciation) of investments and foreign currency (4,834,914) 66,709,158 (55,947,144) ------------- ------------- ------------- Increase (decrease) in net assets resulting from operations 2,809,077 32,807,786 (103,721,128) Distributions to Shareholders: From net investment income: Class A -- (586,463) (472,886) From realized gain from investments -- -- (1,834,702) ------------- ------------- ------------- Total distributions -- (586,463) (2,307,588) ------------- ------------- ------------- From Capital Share Transactions: Net proceeds from sales of shares 54,557,755 43,183,175 46,991,263 Net asset value of shares issued to shareholders in reinvestment of dividends -- 554,553 2,202,785 Redemption fee proceeds 390,342 167,637 367,463 Net assets received in connection with reorganization -- -- -- ------------- ------------- ------------- 54,948,097 43,905,365 49,561,511 Cost of shares redeemed (63,131,621) (36,262,949) (62,258,817) ------------- ------------- ------------- Net increase in net assets derived from capital share transactions (8,183,524) 7,642,416 (12,697,306) ------------- ------------- ------------- Net increase in net assets (5,374,447) 39,863,739 (118,726,022) Net Assets: Beginning of period 59,010,999 19,147,260 137,873,282 ------------- ------------- ------------- End of period $ 53,636,552 $ 59,010,999 $ 19,147,260 ============= ============= ============= Undistributed (distribution in excess of) net investment income $ -- $ (70,843) $ (67,185) ============= ============= ============= Gold Fund ---------------------------------------------- For the period For the year For the year January 1, 2000 ended ended to October 31, December 31, December 31, 2000 1999 1998 ------------ ------------ ------------ From Operations: Net investment income (loss) $ 125,474 $ (15,134) $ 45,698 Net realized gain (loss) from investments (8,421,625) (25,580,452) (9,781,557) Net Realized Gain (Loss) on foreign currency (2,091,095) (8,439) (16,099) Net change in unrealized appreciation (depreciation) of investments and foreign currency (10,053,228) 32,389,359 6,918,845 ------------ ------------ ------------ Increase (decrease) in net assets resulting from operations (20,440,474) 6,785,334 (2,833,113) Distributions to Shareholders: From net investment income: Class A (15,287) -- (52,416) From realized gain from investments -- -- -- ------------ ------------ ------------ Total distributions (15,287) -- (52,416) ------------ ------------ ------------ From Capital Share Transactions: Net proceeds from sales of shares 15,323,872 31,794,471 51,873,043 Net asset value of shares issued to shareholders in reinvestment of dividends 13,994 -- 46,630 Redemption fee proceeds -- -- Net assets received in connection with reorganization -- 17,841,616 -- ------------ ------------ ------------ 15,337,866 49,636,087 51,919,673 Cost of shares redeemed (27,268,213) (34,746,635) (51,899,941) ------------ ------------ ------------ Net increase in net assets derived from capital share transactions (11,930,347) 14,889,452 19,732 ------------ ------------ ------------ Net increase in net assets (32,386,108) 21,674,786 (2,865,797) Net Assets: Beginning of period 72,516,082 50,841,296 53,707,093 ------------ ------------ ------------ End of period $ 40,129,974 $ 72,516,082 $ 50,841,296 ============ ============ ============ Undistributed (distribution in excess of) net investment income $ 49,339 $ 12,833 $ (83,069) ============ ============ ============
See Accompanying Notes to Financial Statements 55 -------------- Precious Metal Funds and International Income Fund -------------- STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------------------------------------------
Silver Fund -------------------------------------------- For the period Year For the year January 1, 2000 ended ended to October 31, December 31, December 31, 2000 1999 1998 ------------ ------------ ------------ From Operations: Net investment income (loss) $ 179,058 $ 127,538 $ (91,766) Net realized loss from investments (4,714,924) (641,295) (570,668) Net realized loss on foreign currency (623,115) (293) (898) Net change in unrealized appreciation (depreciation) of investments and foreign currency (1,018,732) 2,489,979 (5,092,621) ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations (6,177,713) 1,975,929 (5,755,953) Distributions to Shareholders: From net investment income: Class A (63,919) (63,027) -- Return of Capital -- -- -- From realized gain from investments -- -- -- ------------ ------------ ------------ Total distributions (63,919) (63,027) -- ------------ ------------ ------------ From Capital Share Transactions: Net proceeds from sales of shares 2,661,034 6,914,213 7,289,065 Net asset value of shares issued to shareholders in reinvestment of dividends 59,054 58,564 -- Redemption fee proceeds -- -- ------------ ------------ ------------ 2,720,088 6,972,777 7,289,065 Cost of shares redeemed (7,200,933) (9,032,468) (10,893,893) ------------ ------------ ------------ Net increase (decrease) in net assets derived from capital share transactions (4,480,845) (2,059,691) (3,604,828) ------------ ------------ ------------ Net increase (decrease) in net assets (10,722,477) (146,789) (9,360,781) Net Assets: Beginning of period 25,413,356 26,560,145 34,920,926 ------------ ------------ ------------ End of period $ 14,690,879 $ 25,413,356 $ 25,560,145 ============ ============ ============ Undistributed net investment income $ 177,221 $ 63,221 $ (997) ============ ============ ============ Global Income Fund -------------------------------------------- For the period For the year For the year January 1, 2000 ended ended to October 20, December 31, December 31, 2000 1999 1998 ------------ ------------ ------------ From Operations: Net investment income (loss) $ 2,081,946 $ 3,854,078 3,618,708 Net realized loss from investments (746,692) (309,304) 690,546 Net realized loss on foreign currency (1,467,917) (1,437,952) (847,222) Net change in unrealized appreciation (depreciation) of investments and foreign currency (1,034,374) (2,297,809) (1,141,496) ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations (1,167,037) (190,987) 2,320,536 Distributions to Shareholders: From net investment income: Class A (216,437) (2,726,456) (2,758,226) Return of Capital (255,473) -- -- From realized gain from investments -- (163,274) (624,804) ------------ ------------ ------------ Total distributions (471,910) (2,889,730) (3,383,030) ------------ ------------ ------------ From Capital Share Transactions: Net proceeds from sales of shares 5,884,880 9,855,762 24,156,657 Net asset value of shares issued to shareholders in reinvestment of dividends 548,207 2,637,633 3,013,322 Redemption fee proceeds -- -- ------------ ------------ ------------ 6,433,087 12,493,395 27,169,979 Cost of shares redeemed (21,582,756) (14,123,581) (13,368,656) ------------ ------------ ------------ Net increase (decrease) in net assets derived from capital share transactions (15,149,669) (1,630,186) 13,801,323 ------------ ------------ ------------ Net increase (decrease) in net assets (16,788,616) (4,710,903) 12,738,829 Net Assets: Beginning of period 31,695,659 36,406,562 23,667,733 ------------ ------------ ------------ End of period $ 14,907,043 $ 31,695,659 $ 36,406,562 ============ ============ ============ Undistributed net investment income $ -- $ (397,592) $ (134,882) ============ ============ ============
See Accompanying Notes to Financial Statements 56 FINANCIAL HIGHLIGHTS PILGRIM WORLDWIDE GROWTH FUND -------------------------------------------------------------------------------- Selected data for a share of beneficial interest outstanding throughout each period.
Class A ----------------------------------------------------------------------------- Four Three months Year months ended Ended ended Year ended March 31, October 31, June 30, June 30, --------------------------------------- 2000(6)(7) 2000 1999(1) 1999 1998 1997 1996 -------- ------- ------ ------ ------ ------ ------ Per Share Operating Performance: Net asset value, beginning of period $ 29.98 23.58 21.39 19.33 16.88 16.57 14.29 Income from investment operations: Net investment income (loss) $ (0.07) (0.15) -- (0.02) 0.04 (0.16) (0.07) Net realized and unrealized gain (loss) on investments $ (3.55) 9.62 2.19 5.78 5.33 2.20 2.86 Total from investment operations $ (3.62) 9.47 2.19 5.76 5.37 2.04 2.79 Less distributions from: Net investment income $ -- -- -- (0.06) -- -- (0.12) Net realized gains on investments $ -- (3.07) -- (3.64) (2.92) (1.73) (0.39) Total distributions $ -- (3.07) -- (3.70) (2.92) (1.73) (0.51) Net asset value, end of period $ 26.36 29.98 23.58 21.39 19.33 16.88 16.57 Total Return(3): % (12.07) 42.43 10.24 33.56 34.55 12.51 19.79 Ratios/Supplemental Data: Net assets, end of period (000's) $ 246,590 235,341 66,245 49,134 38,647 24,022 23,481 Ratios to average net assets: Net expenses after expense reimbursement(recoupment)(4)(5) % 1.61 1.67 1.75 1.86 1.86 1.85 1.85 Gross expenses prior to expense reimbursement(recoupment)(4) % 1.61 1.67 1.75 2.02 2.21 2.17 2.17 Net investment income (loss) after expense reimbursement(recoupment)(4)(5) % (0.71) (0.79) (0.03) (0.62) (0.69) (0.93) (0.35) Portfolio turnover % 71 169 57 247 202 182 132 Class B --------------------------------------------------------------------------------- Four Three months Year months May 31, ended Ended ended Year ended March 31, 1995(2) to October 31, June 30, June 30, ---------------------------- March 31, 2000(6)(7) 2000 1999(1) 1999 1998 1997 1996 -------- ------- ------ ------ ------ ------ ------ Per Share Operating Performance: Net asset value, beginning of period 33.66 26.64 24.21 20.10 16.02 14.34 12.50 Income from investment operations: Net investment income (loss) (0.15) (0.28) (0.03) (0.08) (0.17) (0.14) (0.05) Net realized and unrealized gain (loss) on investments (3.99) 10.76 2.46 6.25 5.44 1.82 1.89 Total from investment operations (4.14) 10.48 2.43 6.17 5.27 1.68 1.84 Less distributions from: Net investment income -- -- -- (0.01) -- -- -- Net realized gains on investments -- (3.46) -- (2.05) (1.19) -- -- Total distributions -- (3.46) -- (2.06) (1.19) -- -- Net asset value, end of period 29.52 33.66 26.64 24.21 20.10 16.02 14.34 Total Return(3): (12.27) 41.54 10.04 32.74 34.03 11.72 14.72 Ratios/Supplemental Data: Net assets, end of period (000's) 126,756 130,988 27,938 18,556 10,083 5,942 1,972 Ratios to average net assets: Net expenses after expense reimbursement(recoupment)(4)(5) 2.26 2.32 2.40 2.51 2.51 2.50 2.50 Gross expenses prior to expense reimbursement(recoupment)(4) 2.26 2.32 2.40 2.67 2.70 4.81 9.50 Net investment income (loss) after expense reimbursement(recoupment)(4)(5) (1.37) (1.44) (0.68) (1.31) (1.37) (1.62) (1.28) Portfolio turnover 71 169 57 247 202 182 132 Class C ------------------------------------------------------------------------------ Four Three months Year months ended Ended ended Year ended March 31, October 31, June 30, June 30, --------------------------------------- 2000(6)(7) 2000 1999(1) 1999 1998 1997 1996 -------- ------- ------ ------ ------ ------ ------ Per Share Operating Performance: Net asset value, beginning of period $ 29.92 23.69 21.52 19.05 16.92 16.76 14.44 Income from investment operations: Net investment loss $ (0.13) (0.33) (0.04) (0.20) (0.19) (0.28) (0.21) Net realized and unrealized gain (loss) on investments $ (3.53) 9.65 2.21 5.83 5.41 2.23 2.92 Total from investment operations $ (3.66) 9.32 2.17 5.63 5.22 1.95 2.71 Less distributions from: Net investment income $ -- -- -- (0.01) -- -- (0.01) Net realized gains on investments $ -- (3.09) -- (3.15) (3.09) (1.79) (0.38) Total distributions $ -- (3.09) -- (3.16) (3.09) (1.79) (0.39) Net asset value, end of period $ 26.26 29.92 23.69 21.52 19.05 16.92 16.76 Total Return(3): % (12.23) 41.48 10.08 32.73 33.72 11.81 18.95 Ratios/Supplemental Data: Net assets, end of period (000's) $ 213,843 239,432 111,250 98,470 84,292 70,345 71,155 Ratios to average net assets: Net expenses after expense reimbursement(recoupment)(4)(5) % 2.26 2.32 2.40 2.51 2.51 2.50 2.50 Gross expenses prior to expense reimbursement(recoupment)(4) % 2.26 2.32 2.40 2.67 2.77 2.61 2.57 Net investment loss after expense reimbursement (recoupment)(4)(5) % (1.37) (1.44) (0.68) (1.28) (1.34) (1.57) (0.99) Portfolio turnover % 71 169 57 247 202 182 132
---------- (1) Effective May 24, 1999, Pilgrim Investments Inc., became the Investment Manager of the Fund, concurrently Nicholas-Applegate Capital Management was appointed as sub-advisor and the Fund changed its fiscal year-end to June 30. (2) Commencement of offering of shares. (3) Total return is calculated assuming reinvestment of all dividends and capital gain distributions at net asset value and excluding the deduction of sales charges. Total return for less than one year is not annualized. (4) Annualized for periods less than one year. (5) The Investment Manager has agreed to limit expenses excluding interest, taxes, brokerage and extraordinary expenses, subject to possible reimbursement to ING Pilgrim Investments, Inc. within three years. (6) Effective October 1,2000, ING Pilgrim Investments, Inc., became the Investment Manager of the Fund, replacing Nicholas-Applegate Capital Management. (7) The Fund changed its fiscal year-end from June 30 to October 31. See Accompanying Notes to Financial Statements 57 FINANCIAL PILGRIM GLOBAL CORPORATE LEADERS FUND HIGHLIGHTS -------------------------------------------------------------------------------- Selected data for a share of beneficial interest outstanding throughout each period.
Class A ----------------------------------------------------------------- Ten months ended Year ended December 31, October 31, ----------------------------------------------- 2000(3)(5) 1999 1998 1997 1996 1995 -------- ------- ------ ------ ------ ------ Per Share Operating Performance: Net asset value, beginning of period $ 12.29 9.46 10.59 11.28 11.32 11.17 Income from investment operations: Net investment income (loss) $ (0.11) (0.02) 0.99 0.03 0.01 0.09 Net realized and unrealized gain (loss) on investments $ (1.42) 3.67 1.02 0.73 1.84 1.10 Total from investment operations $ (1.53) 3.65 2.01 0.76 1.85 1.19 Less distributions from: Net investment income $ -- (0.74) (0.80) (0.09) (0.16) (0.29) In excess of net investment income $ -- -- -- -- -- (0.13) Net realized gains on investments $ -- (0.08) (2.34) (1.36) (1.73) (0.62) Total distributions $ -- (0.82) (3.14) (1.45) (1.89) (1.04) Net asset value, end of period $ 10.76 12.29 9.46 10.59 11.28 11.32 Total Return(1): % (12.45) 39.06 19.06 6.90 16.43 10.69 Ratios/Supplemental Data: Net assets, end of period (000's) $ 16,893 19,617 17,803 35,085 37,223 53,614 Ratios to average net assets: Net expenses after expense reimbursement(2)(4) % 1.98 1.96 2.12 1.75 1.90 1.67 Gross expenses prior to expense reimbursement(2) % 2.12 -- -- -- -- -- Net investment income (loss) after expense reimbursement(2)(4) % (0.94) (0.65) (0.06) 0.23 0.11 0.48 Portfolio turnover % 3 13 137 177 128 166
---------- (1) Total return is calculated assuming reinvestment of all dividends and capital gain distributions at net asset value and excluding the deduction of sales charges. Total return for less than one year is not annualized. (2) Annualized for periods less than one year. (3) The Fund changed its fiscal year-end from December 31 to October 31. (4) The Investment Manager has agreed to limit expenses excluding interest, taxes, brokerage and extraordinary expenses. (5) Effective July 26, 2000, Pilgrim Investments, Inc. became the Investment Manager of the Fund. See Accompanying Notes to Financial Statements 58 FINANCIAL HIGHLIGHTS PILGRIM INTERNATIONAL VALUE FUND -------------------------------------------------------------------------------- Selected data for a share of beneficial interest outstanding throughout each period.
Class A Class B ---------------------------------------------- ------------------------------------- Year ended October 31, Year ended October 31, ---------------------------------------------- ------------------------------------- 2000 1999 1998 1997 1996 2000 1999 1998 1997(1) -------- ------- ------- ------ ------ -------- ------- ------- ------ Per Share Operating Performance: Net asset value, beginning of period $ 14.75 11.88 10.90 9.05 8.10 14.57 11.76 10.87 10.00 Income from investment operations: Net investment income (loss) $ 0.15 0.08 0.11 (0.09) 0.14 0.07 0.01 0.07 (0.02) Net realized and unrealized gains on investments $ 2.58 3.58 0.96 2.30 0.85 2.51 3.51 0.91 0.89 Total from investment operations $ 2.73 3.66 1.07 2.21 0.99 2.58 3.52 0.98 0.87 Less distributions from: Net investment income $ (0.11) (0.12) -- (0.14) (0.04) (0.03) (0.04) -- -- Net realized gains on investments $ (0.69) (0.67) (0.09) (0.22) -- (0.69) (0.67) (0.09) -- Total distributions $ (0.80) (0.79) (0.09) (0.36) (0.04) (0.72) (0.71) (0.09) -- Net asset value, end of period $ 16.68 14.75 11.88 10.90 9.05 16.43 14.57 11.76 10.87 Total Return(2): % 18.56 32.55 9.86 27.59 12.15 17.69 31.55 9.16 8.70 Ratios/Supplemental Data: Net assets, end of period (000's) $ 920,591 451,815 211,018 60,539 16,777 437,765 278,871 145,976 59,185 Ratios to average net assets: Net expenses after expense reim- bursement (3)(4) % 1.64 1.68 1.74 1.80 1.85 2.34 2.41 2.47 2.50 Gross expenses prior to expense reimbursement(3) % 1.64 1.68 1.74 2.07 2.82 2.34 2.41 2.47 2.58 Net investment income (loss) after expense reimbursement(3)(4) % 1.14 0.92 1.62 0.46 1.52 0.45 0.18 0.69 (0.71) Portfolio turnover % 34 29 32 26 74 34 29 32 26 Class C ---------------------------------------------- Year ended October 31, ---------------------------------------------- 2000 1999 1998 1997 1996 -------- ------- ------- ------ ------ Per Share Operating Performance: Net asset value, beginning of the period $ 14.55 11.75 10.86 8.93 8.05 Income from investment operations: Net investment income (loss) $ 0.07 -- 0.06 (0.06) 0.05 Net realized and unrealized gains on investments $ 2.52 3.51 0.92 2.20 0.86 Total from investment operations $ 2.59 3.51 0.98 2.14 0.91 Less distributions from: Net investment income $ (0.04) (0.04) -- (0.04) (0.03) Net realized gains on investments $ (0.69) (0.67) (0.09) (0.17) -- Total distributions $ (0.73) (0.71) (0.09) (0.21) (0.03) Net asset value, end of period $ 16.41 14.55 11.75 10.86 8.93 Total Return(2): % 17.76 31.50 9.07 25.92 11.39 Ratios and Supplemental Data: Net assets, end of period (000's) $ 605,678 310,227 137,651 62,103 14,530 Ratios to average net assets: Net expenses after expense reimbursement (3)(4) % 2.34 2.41 2.47 2.50 2.50 Gross expenses prior to expense reimbursement(3) % 2.34 2.41 2.47 2.74 3.71 Net investment income (loss) after expense reimbursement(3)(4) % 0.46 0.19 0.68 (0.23) 0.62 Portfolio turnover % 34 29 32 26 74
---------- (1) Classes A and C commenced operations on March 6, 1995, and Class B commenced operations on April 17, 1997. (2) Total return is calculated assuming reinvestment of all dividends and capital gains distributions at net asset value and excluding the deduction of sales charges. Total return for less than one year is not annualized. (3) Annualized for periods less than one year. (4) Expenses calculated net of advisor reimbursement See Accompanying Notes to Financial Statements 59 FINANCIAL PILGRIM INTERNATIONAL FUND HIGHLIGHTS -------------------------------------------------------------------------------- Selected data for a share of beneficial interest outstanding throughout each period.
Class A Class B Class C ---------------------------------------------------- ---------- ------------ Ten months August 22, September 15, ended Year ended December 31, 2000(1) to 2000(1) to October 31, -------------------------------------- October 31, October 31, 2000(4)(6) 1999 1998 1997 1996 1995 2000(4) 2000(4) ---------- ---- ---- ---- ---- ---- ------- ------- Per Share Operating Performance: Net asset value, beginning of period $ 13.45 11.61 10.10 10.86 10.60 10.37 12.28 11.67 Income from investment operations: Net investment income (loss) $ 0.19 (0.01) 0.17 0.07 (0.02) (0.01) (0.05) (0.04) Net realized and unrealized gain (loss) on investments $ (1.48) 5.46 1.74 0.10 1.45 0.61 (1.04) (0.42) Total from investment operations $ (1.29) 5.45 1.91 0.17 1.43 0.60 (1.09) (0.46) Less distributions from: Net investment income $ (0.86) (0.03) (0.06) (0.13) (0.20) -- -- -- In excess of net investment income $ -- -- -- -- -- (0.35) -- -- Net realized gains on investments $ (0.08) (3.58) (0.34) (0.80) (0.97) (0.02) -- -- Total distributions $ (0.94) (3.61) (0.40) (0.93) (1.17) (0.37) -- -- Net asset value, end of period $ 11.22 13.45 11.61 10.10 10.86 10.60 11.19 11.21 Total Return(2): % (10.22) 47.85 19.02 1.61 13.57 5.77 (8.88) (3.94) Ratios/Supplemental Data: Net assets, end of period (000's) $ 30,653 25,304 24,000 19,949 18,891 17,855 80 85 Ratios to average net assets: Net expenses after expense reimbursement(3)(5) % 2.23 1.98 1.75 1.75 2.45 2.45 2.76 2.96 Gross expenses prior to expense reimbursement(3) % 2.23 1.98 2.25 2.15 2.45 2.46 2.76 2.96 Net investment income (loss) after expense reimbursement(3)(5) % (0.23) (0.21) 0.35 0.53 (0.39) (0.12) (7.02) (3.97) Portfolio turnover % 113 144 144 123 114 138 113 113
---------- (1) Commencement of offering of shares. (2) Total return is calculated assuming reinvestment of all dividends and capital gain distributions at net asset value and excluding the deduction of sales charges. Total return for less than one year is not annualized. (3) Annualized for periods less than one year. (4) The Fund changed its fiscal year-end from December 31 to October 31. (5) The Investment Manager has agreed to limit expenses excluding interest, taxes, brokerage and extraordinary expenses. (6) Effective July 26, 2000 Pilgrim Investments, Inc. became the Investment Manager of the Fund. See Accompanying Notes to Financial Statements 60 FINANCIAL HIGHLIGHTS PILGRIM INTERNATIONAL CORE GROWTH FUND -------------------------------------------------------------------------------- Selected data for a share of beneficial interest outstanding throughout each period.
Class A ------------------------------------------------------------------ Four Three months Year months February 28, ended Ended ended Year ended March 31, 1997(1) to October 31, June 30, June 30, -------------------- March 31, 2000(6)(7) 2000 1999(2) 1999 1998 1997 ---------- ---- ------- ---- ---- ---- Per Share Operating Performance: Net asset value, beginning of period $ 23.84 18.92 17.71 17.01 12.73 12.50 Income from investment operations: Net investment income (loss) $ (0.03) (0.17) 0.04 (0.01) (0.02) -- Net realized and unrealized gain (loss) on investments $ (2.89) 6.25 1.17 1.02 4.56 0.23 Total from investment operations $ (2.92) 6.08 1.21 1.01 4.54 0.23 Less distributions from: Net investment income $ -- -- -- (0.18) -- -- Net realized gains on investments $ -- (1.16) -- (0.13) (0.26) -- Total distributions $ -- (1.16) -- (0.31) (0.26) -- Net asset value, end of period $ 20.92 23.84 18.92 17.71 17.01 12.73 Total Return(3): % (12.25) 32.83 6.83 5.90 36.10 1.76 Ratios/Supplemental Data: Net assets, end of period (000's) $ 23,588 23,003 12,409 21,627 12,664 2 Ratios to average net assets: Net expenses after expense reimbursement(4)(5) % 1.76 1.85 1.77 1.89 1.96 1.95 Gross expenses prior to expense reimbursement(4) % 1.90 2.16 1.86 2.13 3.02 4,579.78 Net investment income (loss) after expense reimbursement(4)(5) % (0.48) (0.83) 0.50 (0.51) (0.45) -- Portfolio turnover % 73 200 67 214 274 76 Class B ------------------------------------------------------------------ Four Three months Year months February 28, ended Ended ended Year ended March 31, 1997(1) to October 31, June 30, June 30, -------------------- March 31, 2000(6)(7) 2000 1999(2) 1999 1998 1997 ---------- ---- ------- ---- ---- ---- Per Share Operating Performance: Net asset value, beginning of period 23.83 19.08 17.89 17.10 12.68 12.50 Income from investment operations: Net investment income (loss) (0.09) (0.30) -- (0.16) (0.11) -- Net realized and unrealized gain (loss) on investments (2.86) 6.21 1.19 1.05 4.66 0.18 Total from investment operations (2.95) 5.91 1.19 0.89 4.55 0.18 Less distributions from: Net investment income -- -- -- (0.03) -- -- Net realized gains on investments -- (1.16) -- (0.07) (0.13) -- Total distributions -- (1.16) -- (0.10) (0.13) -- Net asset value, end of period 20.88 23.83 19.08 17.89 17.10 12.68 Total Return(3): (12.38) 31.62 6.65 5.24 35.31 1.44 Ratios/Supplemental Data: Net assets, end of period (000's) 19,116 21,543 12,034 11,033 7,942 1 Ratios to average net assets: Net expenses after expense reimbursement(4)(5) 2.41 2.50 2.36 2.53 2.61 2.59 Gross expenses prior to expense reimbursement(4) 2.56 2.81 2.45 2.77 3.04 16,000.25 Net investment income (loss) after expense reimbursement(4)(5) (1.16) (1.48) (0.09) (1.13) (1.32) -- Portfolio turnover 73 200 67 214 274 76 Class C -------------------------------------------------------------------- Four Three months Year months February 28, ended Ended ended Year ended March 31, 1997(1) to October 31, June 30, June 30, -------------------- March 31, 2000(6)(7) 2000 1999(2) 1999 1998 1997 ---------- ---- ------- ---- ---- ---- Per Share Operating Performance: Net asset value, beginning of period $ 23.93 19.14 17.94 17.16 12.68 12.50 Income from investment operations: Net investment loss $ (0.08) (0.27) -- (0.05) (0.07) -- Net realized and unrealized gain (loss) on investments $ (2.89) 6.22 1.20 0.94 4.55 0.18 Total from investment operations $ (2.97) 5.95 1.20 0.89 4.48 0.18 Less distributions from: Net investment income $ -- -- -- (0.11) -- -- Net realized gains on investments $ -- (1.16) -- -- -- -- Total distributions $ -- (1.16) -- (0.11) -- -- Net asset value, end of period $ 20.96 23.93 19.14 17.94 17.16 12.68 Total Return(3): % (12.41) 31.73 6.69 5.22 35.25 1.44 Ratios/Supplemental Data: Net assets, end of period (000's) $ 25,501 26,734 11,936 10,400 3,517 43 Ratios to average net assets: Net expenses after expense reimbursement(4)(5) % 2.41 2.50 2.36 2.55 2.61 2.41 Gross expenses prior to expense reimbursement(4) % 2.56 2.81 2.45 2.79 5.10 25.55 Net investment income (loss) after expense reimbursement(4)(5) % (1.16) (1.48) (0.09) (1.19) (1.27) (0.07) Portfolio turnover % 73 200 67 214 274 76
---------- (1) Commencement of operations. (2) Effective May 24, 1999, Pilgrim Investments, Inc., became the Investment Manager of the Fund, concurrently Nicholas-Applegate Capital Management was appointed as sub-advisor and the Fund changed its fiscal year-end to June 30. (3) Total return is calculated assuming reinvestment of all dividends and capital gain distributions at net asset value and excluding the deduction of sales charges. Total return for less than one year is not annualized. (4) Annualized for periods less than one year. (5) The Investment Manager has agreed to limit expenses, excluding, interest, taxes, brokerage and extraordinary expenses, subject to possible reimbursement to ING Pilgrim Investments, Inc. within three years. (6) Effective October 1,2000, ING Pilgrim Investments, Inc., became the Investment Manager of the Fund, replacing Nicholas-Applegate Capital Management. (7) The Fund changed its fiscal year-end from June 30 to October 31. See Accompanying Notes to Financial Statements 61 FINANCIAL PILGRIM INTERNATIONAL SMALLCAP GROWTH FUND HIGHLIGHTS -------------------------------------------------------------------------------- Selected data for a share of beneficial interest outstanding throughout each period.
Class A ------------------------------------------------------------------ Four Three months Year months ended Ended ended Year ended March 31, October 31, June 30, June 30, ------------------------------- 2000(1) 2000 1999(2) 1999 1998 1997 1996 ------- ---- ------- ---- ---- ---- ---- Per Share Operating Performance: Net asset value, beginning of period $ 40.94 23.80 21.03 19.29 14.92 13.15 11.51 Income from investment operations: Net investment income (loss) $ (0.10) (0.18) (0.03) 0.02 (0.15) 0.04 (0.02) Net realized and unrealized gain (loss) on investments $ (4.76) 19.38 2.80 3.21 5.36 1.88 1.79 Total from investment operations $ (4.86) 19.20 2.77 3.23 5.21 1.92 1.77 Less distributions from: Net investment income $ -- -- -- -- -- (0.01) (0.13) Net realized gains on investments $ -- (2.06) -- (1.49) (0.84) (0.14) -- Total distributions $ -- (2.06) -- (1.49) (0.84) (0.15) (0.13) Net asset value, end of period $ 36.08 40.94 23.80 21.03 19.29 14.92 13.15 Total Return(4): % (11.90) 82.89 13.17 17.26 36.31 14.67 15.46 Ratios/Supplemental Data: Net assets, end of period (000's) $ 273,393 278,480 37,490 25,336 11,183 5,569 1,056 Ratios to average net assets: Net expenses after expense reimbursement (recoupment)(5)(6) % 1.67 1.67 1.84 1.94 1.96 1.95 1.95 Gross expenses prior to expense reimbursement (recoupment)(5) % 1.67 1.67 1.86 2.08 2.75 3.76 10.06 Net investment income (loss) after expense reimbursement (recoupment)(5)(6) % (0.80) (0.76) (0.69) (0.82) (1.56) (1.05) (0.27) Portfolio turnover % 56 164 44 146 198 206 141 Class B -------------------------------------------------------------------- Four Three months Year months May 31, ended Ended ended Year ended March 31, 1995(3) to October 31, June 30, June 30, ---------------------- March 31, 2000(1) 2000 1999(2) 1999 1998 1997 1996 ------- ---- ------- ---- ---- ---- ---- Per Share Operating Performance: Net asset value, beginning of period 43.27 25.33 22.43 20.16 15.89 13.96 12.50 Income from investment operations: Net investment income (loss) (0.20) (0.37) (0.07) (0.20) (0.15) (0.15) (0.02) Net realized and unrealized gain (loss) on investments (5.02) 20.50 2.97 3.46 5.56 2.09 1.48 Total from investment operations (5.22) 20.13 2.90 3.26 5.41 1.94 1.46 Less distributions from: Net investment income -- -- -- -- -- (0.01) -- Net realized gains on investments -- (2.19) -- (0.99) (1.14) -- -- Total distributions -- (2.19) -- (0.99) (1.14) (0.01) -- Net asset value, end of period 38.05 43.27 25.33 22.43 20.16 15.89 13.96 Total Return(4): (12.05) 81.63 12.93 16.55 35.73 13.96 11.68 Ratios/Supplemental Data: Net assets, end of period (000's) 126,861 132,028 19,331 16,158 12,033 5,080 1,487 Ratios to average net assets: Net expenses after expense reimbursement (recoupment)(5)(6) 2.32 2.32 2.49 2.59 2.61 2.60 2.60 Gross expenses prior to expense reimbursement (recoupment)(5) 2.32 2.32 2.51 2.73 2.98 4.89 16.15 Net investment income (loss) after expense reimbursement (recoupment)(5)(6) (1.46) (1.41) (1.34) (1.45) (2.20) (1.66) (0.64) Portfolio turnover 56 164 44 146 198 206 141 Class C ----------------------------------------------------------------- Four Three months Year months ended Ended ended Year ended March 31, October 31, June 30, June 30, ------------------------------- 2000(1) 2000 1999(2) 1999 1998 1997 1996 ------- ---- ------- ---- ---- ---- ---- Per Share Operating Performance: Net asset value, beginning of period 39.71 23.34 20.60 18.53 14.87 13.05 11.32 Income from investment operations: Net investment income (loss) (0.18) (0.31) (0.06) (0.10) (0.11) (0.16) 0.01 Net realized and unrealized gain (loss) on investments (4.60) 18.69 2.80 3.09 5.09 1.98 1.72 Total from investment operations (4.78) 18.38 2.74 2.99 4.98 1.82 1.73 Less distributions from: Net investment income -- -- -- -- -- -- -- Net realized gains on investments -- (2.01) -- (0.92) (1.32) -- -- Total distributions -- (2.01) -- (0.92) (1.32) -- -- Net asset value, end of period 34.93 39.71 23.34 20.60 18.53 14.87 13.05 Total Return(4): (12.04) 80.89 13.31 16.55 35.63 13.98 15.30 Ratios/Supplemental Data: Net assets, end of period (000's) 136,830 144,068 18,354 13,226 8,014 3,592 933 Ratios to average net assets: Net expenses after expense reimbursement (recoupment)(5)(6) 2.32 2.32 2.49 2.59 2.61 2.60 2.60 Gross expenses prior to expense reimbursement (recoupment)(5) 2.32 2.32 2.51 2.73 3.38 3.95 16.15 Net investment income (loss) after expense reimbursement (recoupment)(5)(6) (1.46) (1.41) (1.34) (1.45) (2.18) (1.67) (1.02) Portfolio turnover 56 164 44 146 198 206 141
---------- (1) The Fund changed its fiscal year-end from June 30 to October 31. (2) Effective May 24, 1999, Pilgrim Investments, Inc., became the Investment Manager of the Fund, concurrently Nicholas-Applegate Capital Management was appointed as sub-advisor and the Fund changed its fiscal year-end to June 30. (3) Commencement of offering of shares. (4) Total return is calculated assuming reinvestment of all dividends and capital gain distributions at net asset value and excluding the deduction of sales charges. Total return for less than one year is not annualized. (5) Annualized for periods less than one year. (6) The Investment Manager has agreed to limit expenses excluding interest, taxes, brokerage and extraordinary expenses, subject to possible reimbursement to ING Pilgrim Investments, Inc. within three years. See Accompanying Notes to Financial Statements 62 FINANCIAL HIGHLIGHTS PILGRIM EMERGING MARKETS VALUE FUND -------------------------------------------------------------------------------- Selected data for a share of beneficial interest outstanding throughout each period.
Class A Class B Class C ------------------------------ ---------------------- ----------------------- Year ended October 31, Year ended October 31, Year ended October 31, ------------------------------ ---------------------- ----------------------- 2000 1999 1998(1) 2000 1999 1998(1) 2000 1999 1998(1) ---- ---- ------- ---- ---- ------- ---- ---- ------- Per Share Operating Performance: Net asset value, beginning of period $ 10.68 7.69 10.00 10.60 7.65 10.00 10.56 7.63 10.00 Income from investment operations: Net investment income $ 0.22 0.12 0.12 0.07 0.08 0.09 0.07 0.04 0.09 Net realized and unrealized gain (loss) on investments $ (0.08) 3.01 (2.43) (0.01) 2.97 (2.44) (0.01) 3.00 (2.46) Total from investment operations $ 0.14 3.13 (2.31) 0.06 3.05 (2.35) 0.06 3.04 (2.37) Less distribution from: Net investment income $ (0.11) (0.14) -- (0.04) (0.10) -- (0.05) (0.11) -- Net realized gains on investments $ (0.44) -- -- (0.44) -- -- (0.44) -- -- Total distributions $ (0.55) (0.14) -- (0.48) (0.10) -- (0.49) (0.11) -- Net asset value, end of period $ 10.27 10.68 7.69 10.18 10.60 7.65 10.13 10.56 7.63 Total Return(2): % 0.60 41.48 (23.10) (0.12) 40.41 (23.50) (0.09) 40.49 (23.70) Ratios/Supplemental Data: Net assets, end of period (000's) $ 4,549 9,281 3,815 4,101 3,823 3,583 4,468 6,674 2,304 Ratios to average net assets: Net expenses after expense reimbursement(3)(4) % 1.98 2.06 1.80 2.75 2.70 2.50 2.71 2.71 2.50 Gross expenses prior to expense reimbursement(3) % 1.98 2.21 3.88 2.75 2.93 4.74 2.71 2.91 4.87 Net investment income after expense reimbursement(3)(4) % 1.37 1.36 3.38 0.61 0.67 2.55 0.62 0.62 2.60 Portfolio turnover % 32 38 7 32 38 7 32 38 7
---------- (1) Class A, B and C commenced operations on January 1, 1998. (2) Total return is calulated assuming reinvestments of all dividends and capital gain distributions at net asset value and excluding the deduction of sales charges. Total return for less than one year is not annualized. (3) Annualized for periods less than one year (4) Expenses calculated net of advisor reimbursement. See Accompanying Notes to Financial Statements 63 FINANCIAL PILGRIM EMERGING COUNTRIES FUND HIGHLIGHTS -------------------------------------------------------------------------------- Selected data for a share of beneficial interest outstanding throughout each period.
Class A ------------------------------------------------------------------- Four Three months Year months ended Ended ended Year Ended March 31, October 31, June 30, June 30, -------------------------------- 2000(6)(7) 2000 1999(2) 1999 1998 1997 1996 ---------- ---- ------- ---- ---- ---- ---- Per Share Operating Performance: Net asset value, beginning of period $ 20.17 16.74 13.43 17.39 17.20 14.03 11.00 Income from investment operations: Net investment income (loss) $ (0.24) (0.20) (0.05) (0.06) 0.03 (0.06) (0.04) Net realized and unrealized gain (loss) on investments $ (3.60) 3.63 3.36 (3.81) 1.22 3.51 3.15 Total from investment operations $ (3.84) 3.43 3.31 (3.87) 1.25 3.45 3.11 Less distributions from: Net investment income $ -- -- -- (0.02) -- -- (0.02) Net realized gains on investments $ -- -- -- (0.07) (1.06) (0.28) (0.06) Total distributions $ -- -- -- (0.09) (1.06) (0.28) (0.08) Net asset value, end of period $ 16.33 20.17 16.74 13.43 17.39 17.20 14.03 Total Return(3): % (19.04) 20.49 24.65 (22.23) 8.06 24.79 28.43 Ratios/Supplemental Data: Net assets, end of period (000's) $ 59,541 75,311 53,483 47,180 71,014 38,688 4,718 Ratio to average net assets: Net expenses after expense reimbursement(4)(5) % 2.23 2.19 2.13 2.27 2.26 2.25 2.25 Gross expenses prior to expense reimbursement(4) % 2.38 2.34 2.66 2.56 2.48 3.08 6.72 Net investment income (loss) after expense reimbursement(4)(5) % (1.31) (1.15) (1.30) (0.25) 0.55 (1.14) (0.35) Portfolio turnover % 94 211 67 213 243 176 118 Class B -------------------------------------------------------------------- Four Three months Year months May 31, ended Ended ended Year Ended March 31, 1995(1) to October 31, June 30, June 30, --------------------- March 31, 2000 2000 1999(2) 1999 1998 1997 1996 ---------- ---- ------- ---- ---- ---- ---- Per Share Operating Performance: Net asset value, beginning of period 20.30 16.98 13.64 17.64 17.29 14.02 12.50 Income from investment operations: Net investment income (loss) (0.23) (0.35) (0.07) (0.22) (0.07) (0.11) (0.04) Net realized and unrealized gain (loss) on investments (3.66) 3.67 3.41 (3.70) 1.26 3.47 1.56 Total from investment operations (3.89) 3.32 3.34 (3.92) 1.19 3.36 1.52 Less distributions from: Net investment income -- -- -- -- -- -- -- Net realized gains on investments -- -- -- (0.08) (0.84) (0.09) -- Total distributions -- -- -- (0.08) (0.84) (0.09) -- Net asset value, end of period 16.41 20.30 16.98 13.64 17.64 17.29 14.02 Total Return(3): (19.16) 19.55 24.49 (22.23) 7.47 24.00 12.16 Ratios/Supplemental Data: Net assets, end of period (000's) 22,707 30,322 26,342 22,338 38,796 24,558 3,557 Ratio to average net assets: Net expenses after expense reimbursement(4)(5) 2.98 2.84 2.75 2.91 2.91 2.90 2.90 Gross expenses prior to expense reimbursement(4) 3.12 2.99 3.28 3.20 3.06 3.66 7.58 Net investment income (loss) after expense reimbursement(4)(5) (1.01) (1.80) (1.92) (0.80) (0.20) (1.77) (1.05) Portfolio turnover 94 211 67 213 243 176 118 Class C ------------------------------------------------------------------ Four Three months Year months ended Ended ended Year Ended March 31, October 31, June 30, June 30, ------------------------------- 2000(6)(7) 2000 1999(2) 1999 1998 1997 1996 ---------- ---- ------- ---- ---- ---- ---- Per Share Operating Performance: Net asset value, beginning of period $ 19.56 16.35 13.14 16.98 16.81 13.71 10.79 Income from investment operations: Net investment loss $ (0.22) (0.32) (0.07) (0.27) (0.12) (0.10) (0.05) Net realized and unrealized gain (loss) on investments $ (3.53) 3.53 3.28 (3.49) 1.26 3.37 2.97 Total from investment operations $ (3.75) 3.21 3.21 (3.76) 1.14 3.27 2.92 Less distributions from: Net investment income $ -- -- -- -- -- -- -- Net realized gains on investments $ -- -- -- (0.08) (0.97) (0.17) -- Total distributions $ -- -- -- (0.08) (0.97) (0.17) -- Net asset value, end of period $ 15.81 19.56 16.35 13.14 16.98 16.81 13.71 Total Return(3): % (19.17) 19.63 24.43 (22.21) 7.47 23.94 27.30 Ratios/Supplemental Data: Net assets, end of period (000's) $ 22,456 29,610 24,230 19,246 36,986 29,376 4,345 Ratio to average net assets: Net expenses after expense reimbursement(4)(5) % 2.98 2.84 2.75 2.90 2.91 2.90 2.90 Gross expenses prior to expense reimbursement(4) % 3.09 2.99 3.28 3.19 3.09 3.12 6.23 Net investment loss after expense reimbursement(4)(5) % (0.95) (1.80) (1.92) (0.77) (0.26) (1.75) (1.06) Portfolio turnover % 94 211 67 213 243 176 118
---------- (1) Commencement of offering of shares. (2) Effective May 24, 1999, Pilgrim Investments, Inc., became the Investment Manager of the Fund, concurrently Nicholas-Applegate Capital Management was appointed as sub-advisor and the Fund changed its fiscal year-end to June 30. (3) Total return is calculated assuming reinvestment of all dividends and capital gain distributions at net asset value and excluding the deduction of sales charges. Total return for less than one year is not annualized. (4) Annualized for periods less than one year. (5) The Investment Manager has agreed to limit expenses excluding interest, taxes, brokerage and extraordinary expenses, subject to possible reimbursement to ING Pilgrim Investments, Inc. within three years. (6) Effective October 1,2000, ING Pilgrim Investments, Inc., became the Investment Manager of the Fund, replacing Nicholas-Applegate Capital Management. (7) The Fund changed its fiscal year-end from June 30 to October 31. See Accompanying Notes to Financial Statements 64 FINANCIAL HIGHLIGHTS PILGRIM WORLDWIDE EMERGING MARKETS FUND -------------------------------------------------------------------------------- Selected data for a share of beneficial interest outstanding throughout each period.
Class A ----------------------------------------------------------- Ten months ended Year ended December 31, October 31, --------------------------------------------- 2000(1)(4) 1999 1998 1997 1996 1995 ---------- ---- ---- ---- ---- ---- Per Share Operating Performance: Net asset value, beginning of period 15.10 7.13 10.18 11.49 10.70 11.47 Income from investment operations: Net investment income (loss) (0.17) (0.05) 0.12 0.01 -- 0.08 Net realized and unrealized gain (loss) on investments (6.18) 8.05 (3.08) (1.32) 0.79 (0.76) Total from investment operations (6.35) 8.00 (2.96) (1.31) 0.79 (0.68) Less distributions from: Net investment income -- (0.03) (0.09) -- -- (0.08) In excess of net investment income -- -- -- -- -- (0.01) Total distributions -- (0.03) (0.09) -- -- (0.09) Net asset value, end of period 8.75 15.10 7.13 10.18 11.49 10.70 Total Return(2): (42.05) 112.58 (29.06) (11.40) 7.38 (5.93) Ratios/Supplemental Data: Net assets, end of period (000's) 81,496 154,994 65,323 137,686 254,673 265,544 Ratios to average net assets: Expenses(3) 2.15 2.00 1.85 1.82 1.76 1.88 Net investment income (loss) (3) (1.34) (0.66) 1.14 0.09 (0.01) 0.70 Portfolio turnover 241 184 107 112 86 93
---------- (1) The Fund changed its fiscal year-end from December 31 to October 31. (2) Total return is calculated assuming reinvestment of all dividends and capital gain distributions at net asset value and excluding the deduction of sales charges. Total return for less than one year is not annualized. (3) Annualized for periods less than one year. (4) Effective July 26, 2000, Pilgrim Investments, Inc. became the Investment Manager of the Fund See Accompanying Notes to Financial Statements 65 FINANCIAL PILGRIM GLOBAL TECHNOLOGY FUND HIGHLIGHTS -------------------------------------------------------------------------------- Class A ---------- Ten months ended October 31, 2000(3)(5) ---------- Per Share Operating Performance: Net asset value, beginning of period $ 10.00 Income from investment operations: Net investment loss $ (0.13) Net realized and unrealized loss on investments $ (2.01) Total from investment operations $ (2.14) Net asset value, end of period $ 7.86 Total Return(1): % (21.40) Ratios/Supplemental Data: Net assets, end of period (000's) $ 8,888 Ratios to average net assets: Net expenses after redemption fee proceeds and expense reimbursement (2)(4) % 2.60 Gross expenses prior to redemption fee proceeds and expense reimbursement(2) % 4.23 Net investment loss after redemption fee proceeds and expense reimbursement(2)(4) % (1.73) Portfolio turnover % 162 ---------- (1) Total return is calculated assuming reinvestment of all dividends and capital gain distributions at net asset value and excluding the deduction of sales charges. Total return for less than one year is not annualized. (2) Annualized for periods less than one year. (3) The Fund changed its fiscal year-end from December 31 to October 31. (4) The Investment Manager has agreed to limit expenses excluding interest, taxes, brokerage and extraordinary expenses. (5) Effective July 26, 2000, Pilgrim Investments, Inc. became the Investment Manager of the Fund. See Accompanying Notes to Financial Statements 66 FINANCIAL HIGHLIGHTS PILGRIM ASIA-PACIFIC EQUITY FUND -------------------------------------------------------------------------------- Selected data for a share of beneficial interest outstanding throughout each period.
Class A --------------------------------------------------------- Four months September 1, ended Year Ended June 30, 1995(1) to October 31, ------------------------------- June 30, 2000(5) 2000 1999 1998 1997 1996 ------- ---- ---- ---- ---- ---- Per Share Operating Performance: Net asset value, beginning of period $ 7.23 7.22 4.46 10.93 10.35 10.00 Income from investment operations: Net investment income (loss) $ 0.08 (0.05) -- 0.03 0.02 0.03 Net realized and unrealized gain (loss) on investments $ (2.32) 0.06 2.76 (6.50) 0.58 0.34 Total from investment operations $ (2.24) 0.01 2.76 (6.47) 0.60 0.37 Less distributions: In excess of net investment income $ -- -- -- -- -- (0.02) Tax return of capital $ -- -- -- -- (0.02) -- Total distributions $ -- -- -- -- (0.02) (0.02) Net asset value, end of period $ 4.99 7.23 7.22 4.46 10.93 10.35 Total Return(2): % (30.98) 0.14 61.88 (59.29) 5.78 3.76 Ratios/Supplemental Data: Net assets, end of period (000's) $ 8,471 11,726 14,417 11,796 32,485 18,371 Ratios to average net assets: Net expenses after expense reimbursement(3)(4) % 2.05 2.11 2.00 2.00 2.00 2.00 Gross expenses prior to expense reimbursement(3) % 2.71 2.55 2.98 2.80 2.54 3.47 Net investment income (loss) after expense reimbursement(3)(4) % 4.28 (0.56) 0.01 0.38 0.00 0.33 Portfolio turnover % 13 138 111 81 38 15 Class B --------------------------------------------------------- Four months September 1, ended Year Ended June 30, 1995(1) to October 31, ------------------------------- June 30, 2000(5) 2000 1999 1998 1997 1996 ------- ---- ---- ---- ---- ---- Per Share Operating Performance: Net asset value, beginning of period 6.97 7.02 4.37 10.83 10.31 10.00 Income from investment operations: Net investment income (loss) 0.07 (0.11) (0.04) (0.03) (0.07) (0.01) Net realized and unrealized gain (loss) on investments (2.24) 0.06 2.69 (6.43) 0.59 0.32 Total from investment operations (2.17) (0.05) 2.65 (6.46) 0.52 0.31 Less distributions: In excess of net investment income -- -- -- -- -- -- Tax return of capital -- -- -- -- -- -- Total distributions -- -- -- -- -- -- Net asset value, end of period 4.80 6.97 7.02 4.37 10.83 10.31 Total Return(2): (31.13) (0.71) 60.64 (59.65) 5.04 3.19 Ratios/Supplemental Data: Net assets, end of period (000's) 7,678 12,228 12,959 9,084 30,169 17,789 Ratios to average net assets: Net expenses after expense reimbursement(3)(4) 2.80 2.86 2.75 2.75 2.75 2.75 Gross expenses prior to expense reimbursement(3) 3.45 3.30 3.73 3.55 3.29 4.10 Net investment income (loss) after expense reimbursement(3)(4) 3.48 (1.31) (0.74) (0.39) (0.79) (0.38) Portfolio turnover 13 138 111 81 38 15 Class M -------------------------------------------------------- Four months September 1, ended Year Ended June 30, 1995(1) to October 31, ------------------------------- June 30 2000(5) 2000 1999 1998 1997 1996 ------- ---- ---- ---- ---- ---- Per Share Operating Performance: Net asset value, beginning of period $ 7.04 7.07 4.40 10.86 10.32 10.00 Income from investment operations: Net investment income (loss) $ 0.07 (0.11) (0.02) -- (0.05) -- Net realized and unrealized gain (loss) on investments $ (2.26) 0.08 2.69 (6.46) 0.59 0.33 Total from investment operations $ (2.19) (0.03) 2.67 (6.46) 0.54 0.33 Less distributions: In excess of net investment income $ -- -- -- -- -- (0.01) Total distributions $ -- -- -- -- -- (0.01) Net asset value, end of period $ 4.85 7.04 7.07 4.40 10.86 10.32 Total Return(2): % (31.11) (0.42) 60.68 (59.48) 5.26 3.32 Ratios/Supplemental Data: Net assets, end of period (000's) $ 2,711 3,749 5,184 4,265 11,155 6,476 Ratios to average net assets: Net expenses after expense reimbursement(3)(4) % 2.53 2.61 2.50 2.50 2.50 2.50 Gross expenses prior to expense reimbursement(3) % 3.18 3.05 3.48 3.30 3.04 3.88 Net investment income (loss) after expense reimbursement(3)(4) % 3.72 (1.06) (0.49) (0.07) (0.55) (0.16) Portfolio turnover % 13 138 111 81 38 15
---------- (1) Commencement of operations. (2) Total return is calculated assuming reinvestment of all dividends and capital gain distributions at net asset value and excluding the deduction of sales charges. Total return for less than one year is not annualized. (3) Annualized for periods less than one year. (4) The Investment Manager has agreed to limit expenses excluding interest, taxes, brokerage and extraordinary expenses, subject to possible reimbursement to ING Pilgrim Investments, Inc. within three years. (5) The Fund changed it fiscal year-end from June 30 to October 31. See Accompanying Notes to Financial Statements 67 FINANCIAL PILGRIM SMALLCAP ASIA GROWTH FUND HIGHLIGHTS -------------------------------------------------------------------------------- Selected data for a share of beneficial interest outstanding throughout each period.
Class A -------------------------------------------------------- Ten months ended Year ended December 31, October 31, ------------------------------------------ 2000(4)(6) 1999 1998 1997 1996 1995(1) ---------- ---- ---- ---- ---- ------- Per Share Operating Performance: Net asset value, beginning of period $ 8.95 5.69 7.06 12.24 9.76 10.00 Income from investment operations: Net investment income (loss) $ (0.15) (0.10) -- (0.05) (0.05) 0.02 Net realized and unrealized gain (loss) on investments $ (3.08) 3.36 (1.37) (5.13) 2.54 (0.24) Total from investment operations $ (3.23) 3.26 (1.37) (5.18) 2.49 (0.22) Less distributions from: Net investment income $ -- -- -- -- -- (0.02) In excess of net investment income $ -- -- -- -- (0.01) -- Total distributions $ -- -- -- -- (0.01) (0.02) Net asset value, end of period $ 5.72 8.95 5.69 7.06 12.24 9.76 Total Return(2): % (36.09) 57.29 (19.41) (42.32) 25.50 4.39 Ratios/Supplemental Data: Net assets, end of period (000's) $ 4,630 14,392 18,278 13,867 23,796 8,936 Ratios to average net assets: Net expenses after expense reimbursement(3)(5) % 2.63 2.50 2.50 2.30 2.42 1.75 Gross expenses prior to expense reimbursement(3) % 4.07 3.00 2.86 2.30 2.64 3.51 Net investment income (loss) after expense reimbursement (3)(5) % (1.21) (1.05) (0.21) (0.32) (0.64) 0.52 Portfolio turnover % 108 173 193 187 176 40
---------- (1) The Fund commenced operations on July 3, 1995. (2) Total return is calculated assuming reinvestment of all dividends and capital gain distributions at net asset value and excluding the deduction of sales charges. Total return for less than one year is not annualized. (3) Annualized for periods less than one year. (4) The Fund changed its fiscal year-end from December 31 to October 31 (5) The Investment Manager has agreed to limit expenses excluding interest, taxes, brokerage and extraordinary expenses. (6) Effective July 26, 2000 Pilgrim Investments, Inc. became the Investment Manger of the Fund See Accompanying Notes to Financial Statements 68 FINANCIAL HIGHLIGHTS PILGRIM TROIKA DIALOG RUSSIA FUND -------------------------------------------------------------------------------- Selected data for a share of beneficial interest outstanding throughout each period.
Class A ---------------------------------------------------------- Ten months ended Year ended December 31, October 31, ------------------------------------------- 2000(4)(6) 1999 1998 1997 1996(1) ---------- ---- ---- ---- ------- Per Share Operating Performance: Net asset value, beginning of period $ 6.74 2.64 17.50 11.24 12.12 Income from investment operations: Net investment income (loss) $ (0.07) 0.18 0.15 (0.01) (0.05) Net realized and unrealized gain (loss) on investments $ 0.48 3.99 (14.70) 7.57 (0.51) Total from investment operations $ 0.41 4.17 (14.55) 7.56 (0.56) Less distributions from: Net investment income $ -- (0.07) (0.07) -- -- Net realized gains on investments $ -- -- (0.24) (1.30) (0.32) Total distributions $ -- (0.07) (0.31) (1.30) (0.32) Net asset value, end of period $ 7.15 6.74 2.64 17.50 11.24 Total Return(2): % 6.08 159.76 (82.99) 67.50 (9.01) Ratios/Supplemental Data: Net assets, end of period (000's) $ 53,637 59,011 19,147 137,873 13,846 Ratios to average net assets: Net expenses after redemption fee proceeds and expense reimbursement(3)(5) % 1.40 2.23 1.84 1.85 2.65 Gross expenses prior to redemption fee proceeds and expense reimbursement(3) % 2.85 3.32 2.64 2.89 5.07 Net investment income (loss) after redemption fee proceeds and expense reimbursement(3)(5) % (0.90) 4.39 1.36 (0.11) (1.27) Portfolio turnover % 52 91 66 67 116
---------- (1) The Fund's commencement of operations was June 3, 1996 with the investment of its initial capital. The Fund's registration statement with the Securities and Exchange Commission became effective on July 3, 1996. Financial results prior to the effective date of the Fund's registration statement are not presented in this Financial Highlights Table. (2) Total return is calculated assuming reinvestment of all dividends and capital gain distributions at net asset value and excluding the deduction of sales charges.Total return for less than one year is not annualized. (3) Annualized for periods less than one year. (4) The Fund changed its fiscal year-end from December 31 to October 31. (5) The Investment Manager has agreed to limit expenses excluding, interest, taxes, brokerage and extraordinary expenses. (6) Effective July 26, 2000 Pilgrim Investments, Inc. became the Investment Manager of the fund. See Accompanying Notes to Financial Statements 69 FINANCIAL PILGRIM GOLD FUND HIGHLIGHTS -------------------------------------------------------------------------------- Selected data for a share of beneficial interest outstanding throughout each period.
Class A ------------------------------------------------------------------- Ten months ended Year ended December 31, October 31, ---------------------------------------------------- 2000(3)(4) 1999 1998 1997 1996 1995 ---------- ---- ---- ---- ---- ---- Per Share Operating Performance: Net asset value, beginning of period $ 3.29 3.03 3.24 5.97 6.24 6.37 Income from investment operations: Net investment income (loss) $ 0.01 (0.01) -- -- 0.02 -- Net realized and unrealized gain (loss) on investments $ (1.03) 0.27 (0.21) (2.52) 0.50 (0.12) Total from investment operations $ (1.02) 0.26 (0.21) (2.52) 0.52 (0.12) Less distributions from: Net investment income $ -- -- -- (0.21) (0.79) (0.01) Total distributions $ -- -- -- (0.21) (0.79) (0.01) Net asset value, end of period $ 2.27 3.29 3.03 3.24 5.97 6.24 Total Return(1): % (30.98) 8.58 (6.39) (42.98) 7.84 (1.89) Ratios/Supplemental Data: Net assets, end of period (000's) $ 40,130 72,516 50,841 53,707 109,287 135,779 Ratios to average net assets: Expenses (2) % 2.18 1.94 1.74 1.65 1.60 1.70 Net investment income (loss) (2) % 0.28 (0.02) 0.08 0.17 (0.32) 0.07 Portfolio turnover % 27 79 29 38 31 40
---------- (1) Total return is calculated assuming reinvestment of all dividends and capital gain distributions at net asset value and excluding the deduction of sales charges. Total return for less than one year is not annualized. (2) Annualized for periods less than one year. (3) The Fund changed its fiscal year-end from December 31 to October 31. (4) Effective July 26, 2000, Pilgrim Investments, Inc. became the Investment Manager of the Fund. See Accompanying Notes to Financial Statements 70 FINANCIAL HIGHLIGHTS PILGRIM SILVER FUND -------------------------------------------------------------------------------- Selected data for a share of beneficial interest outstanding throughout each period.
Class A ------------------------------------------------------------------------------ Ten months Six months ended Year ended ended Year ended June 30, October 31, December 31, December 31, ------------------------------------ 2000(4)(6) 1999 1998(1) 1998 1997 1996 1995 ---------- ---- ------- ---- ---- ---- ---- Per Share Operating Performance: Net asset value, beginning of period $ 2.96 2.73 3.26 3.95 4.46 4.00 3.92 Income from investment operations: Net investment income (loss) $ 0.03 0.01 (0.01) (0.02) (0.04) (0.03) (0.03) Net realized and unrealized gain (loss) on investments $ (0.84) 0.23 (0.52) (0.66) (0.43) 0.51 0.11 Total from investment operations $ (0.81) 0.24 (0.53) (0.68) (0.47) 0.48 0.08 Less distributions from: Net investment income $ (0.01) (0.01) -- (0.01) (0.04) -- -- In excess of net investment income $ -- -- -- -- -- (0.02) -- Total distributions $ (0.01) (0.01) -- (0.01) (0.04) (0.02) -- Net asset value, end of period $ 2.14 2.96 2.73 3.26 3.95 4.46 4.00 Total Return(2): % (27.45) 8.70 (16.26) (17.32) (10.76) 12.02 2.04 Ratios/Supplemental Data: Net assets, end of period (000's) $ 14,691 25,413 25,560 34,921 42,035 73,945 65,517 Ratios to average net assets: Net expenses after expense reimbursement(3)(5) % 2.46 2.11 2.37 1.90 1.96 1.73 1.82 Gross expenses prior to expense reimbursement(3) % 2.78 -- -- -- -- -- -- Net investment income (loss) after expense reimbursement(3)(5) % 1.07 0.49 (0.61) (0.54) (0.78) (0.72) (0.83) Portfolio turnover % 9 29 6 29 19 44 44
---------- (1) The Fund changed its fiscal year-end from June 30 to December 31. (2) Total return is calculated assuming reinvestment of all dividends and capital gain distributions at net asset value and excluding the deduction of sales charges. Total return for less than one year is not annualized. (3) Annualized for periods less than one year. (4) The Fund changed its fiscal year-end from December 31 to October 31. (5) The Investment Manager has agreed to limit expenses excluding interest, taxes, brokerage and extraordinary expenses. (6) Effective July 26, 2000 Pilgrim Investments, Inc. became the Investment Manager of the Fund. See Accompanying Notes to Financial Statements 71 FINANCIAL PILGRIM GLOBAL INCOME FUND HIGHLIGHTS -------------------------------------------------------------------------------- Selected data for a share of beneficial interest outstanding throughout each period.
Class A Class C ----------------------------------------------------------------- ------------- Ten months September 26, ended Year ended December 31, 2000(4) to October 31, -------------------------------------------------- October 31, 2000(1)(6) 1999 1998 1997 1996 1995 2000 ---------- ---- ---- ---- ---- ---- ---- Per Share Operating Performance: Net asset value, beginning of period $ 9.45 10.36 10.58 11.22 10.75 9.80 8.94 Income from investment operations: Net investment income $ 1.15 1.16 0.90 1.04 1.01 0.96 -- Net realized and unrealized gain (loss) on investments $ (1.50) (1.20) (0.07) (0.50) 0.36 0.95 0.73 Total from investment operations $ (0.35) (0.04) 0.83 0.54 1.37 1.91 0.73 Less distributions from: Net investment income $ (0.21) (0.82) (0.87) (0.91) (0.86) (0.96) -- Return of capital $ (0.10) -- -- -- -- -- -- Net realized gains $ -- (0.05) (0.18) (0.27) (0.04) -- -- Total distributions $ (0.31) (0.87) (1.05) (1.18) (0.90) (0.96) -- Net asset value, end of period $ 8.79 9.45 10.36 10.58 11.22 10.75 9.47 Total Return(2): % (5.06) (0.31) 8.21 5.00 13.33 20.10 8.35 Ratios/Supplemental Data: Net assets, end of period (000's) $ 14,904 31,696 36,407 23,668 29,110 12,255 3 Ratios to average net assets: Net expenses after expense reimbursement(3)(5) % 2.42 1.86 1.50 1.50 1.50 2.75 -- Gross expenses prior to expense reimbursement(3) % 2.42 1.86 1.89 2.17 2.33 3.07 -- Net investment income (loss) after expense reimbursement(3)(5) % 8.69 11.52 11.38 9.66 10.32 9.80 -- Portfolio turnover % 23 25 45 118 72 165 23
---------- (1) The Fund changed its fiscal year-end from December 31 to October 31. (2) Total return is calculated assuming reinvestment of all dividends and capital gain distributions at net asset value and excluding the deduction of sales charges. Total return for less than one year is not annualized. (3) Annualized for periods less than one year. (4) Commencement of offering of shares (5) The Investment Manager has agreed to limit expenses excluding interest, taxes, brokerage and extraordinary expenses. (6) Effective July 26, 2000 Pilgrim Investments, Inc became the Investment Manager of the Fund. See Accompanying Notes to Financial Statements 72 ------- Pilgrim Funds ------- NOTES TO FINANCIAL STATEMENTS as of October 31, 2000 -------------------------------------------------------------------------------- NOTE 1 -- ORGANIZATION Organization. The Pilgrim Funds are comprised of Pilgrim Mutual Funds ("PMF"), Pilgrim Advisory Funds, Inc. ("PAF"), Pilgrim Mayflower Trust ("PMT"), Pilgrim Global Corporate Leaders Fund ("Global Corporate Leaders") (formerly Lexington Global Corporate Leaders Fund Inc.), Pilgrim International Fund ("International") (formerly Lexington International Fund Inc.), Pilgrim Worldwide Emerging Markets Fund ("Worldwide Emerging Markets") (formerly Lexington Worldwide Emerging Markets Fund Inc.), Pilgrim Global Technology Fund ("Global Technology") (formerly Lexington Global Technology Fund Inc.), Pilgrim SmallCap Asia Growth Fund ("SmallCap Asia Growth") (formerly Lexington SmallCap Asia Growth Fund Inc.), Pilgrim Troika Dialog Russia Fund ("Troika Dialog Russia") (formerly Lexington Troika Dialog Russia Fund), Pilgrim Gold Fund ("Gold") (formerly Lexington Goldfund Inc.), Pilgrim Silver Fund ("Silver") (formerly Lexington Silver Fund Inc.), and Pilgrim Global Income Fund ("Global Income") (formerly Lexington Global Income Fund Inc.), which are each open-end investment management companies registered under the Investment Company Act of 1940, as amended. PMF is a Delaware business trust organized in 1992 with twelve separate series (Portfolios). The "Funds" in this annual report are Pilgrim Worldwide Growth Fund ("Worldwide Growth"), Pilgrim International Core Growth Fund ("International Core Growth"), Pilgrim International SmallCap Growth Fund ("International SmallCap Growth"), and Pilgrim Emerging Countries Fund ("Emerging Countries"). PAF is a Maryland Corporation organized in 1995 with three separate series (Portfolios). The "Fund" in this annual report is Pilgrim Asia-Pacific Equity Fund. PMT is a Massachusetts business trust organized in 1992 with six separate series (Portfolios). The "Funds" in this annual report are Pilgrim International Value Fund and Pilgrim Emerging Markets Value Fund. The investment objective of each Fund is described in each Fund's prospectus. Each Fund offers one or more of the following classes of shares: Class A, Class B, Class C, Class M and Class Q. The separate classes of shares differ principally in the applicable sales charges (if any), distribution fees and shareholder servicing fees. Shareholders of each class also bear certain expenses that pertain to that particular class. All shareholders bear the common expenses of the Fund and earn income from the portfolio pro rata based on the average daily net assets of each class, without distinction between share classes. Dividends are determined separately for each class based on income and expenses allocable to each class. Realized gains are allocated to each class pro rata based on the net assets of each class on the date of distribution. No class has preferential dividend rights. Differences in per share dividend rates generally result from the relative weighting of pro rata income and realized gain allocations and from differences in separate class expenses, including distribution, and shareholder servicing fees. Class B shares, along with their pro rata reinvested dividend shares, automatically convert to Class A shares approximately eight years after purchase. Prior to April 30, 2000, Pilgrim Advisors, Inc. ("Pilgrim Advisors") served as investment advisor to certain of the Funds. On April 30, 2000, Pilgrim Advisors merged with Pilgrim Investments. Pilgrim Advisors and Pilgrim Investments, Inc. were sister companies and shared certain resources and investment personnel. Prior to July 26, 2000, Lexington Management Corporation ("Lexington") served as investment advisor to certain of the former Lexington Funds. On July 26, 2000, ReliaStar Financial Corp. ("Reliastar") acquired Lexington Global Asset Managers, Inc., the parent company of Lexington, and ING Pilgrim Investments, Inc. was approved as Adviser to the Funds formerly advised by Lexington. On September 1, 2000, ING Groep N.V. (NYSE: ING) acquired ReliaStar, the indirect parent company of Pilgrim Investments, Inc., Adviser to the Funds, Pilgrim Securities, Inc., Distributor to the Funds and Pilgrim Group, Inc., Administrator to the Funds. In conjunction with the acquisition the Adviser, Distributor and Administrator changed their names to ING Pilgrim Investments, Inc., ING Pilgrim Securities, Inc., and ING Pilgrim Group, Inc. ("PGI") effective September 8, 2000. Reorganizations. Before a shareholder approved reorganization effective July 24, 1998, the funds 73 ------- Pilgrim Funds ------- NOTES TO FINANCIAL STATEMENTS as of October 31, 2000 (Continued) -------------------------------------------------------------------------------- comprising PMF invested all of their assets in corresponding portfolios of Nicholas-Applegate Investment Trust, an arrangement known as a "master/feeder" structure. Upon the reorganization, the Institutional Portfolio series of the Trust were renamed Funds and were authorized to issue multiple classes of shares, and their outstanding shares were classified as Class I shares. At the same time, the A, B, C and Advisory Portfolios of the Trust transferred their assets to the corresponding Funds, and their shareholders received Class A, B, C and Q shares of the Funds on a tax-free basis. Effective May 7, 1999 and concurrent with the change in investment adviser from Nicholas Applegate Capital Management to Pilgrim Investments, Inc., the Institutional Classes of PMF were transferred in a tax free reorganization to new funds being managed by Nicholas-Applegate Capital Management. NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES The following significant accounting policies are consistently followed by the Funds in the preparation of their financial statements, and such policies are in conformity with generally accepted accounting principles for investment companies. A. Security Valuation. Investments in equity securities traded on a national securities exchange or included on the NASDAQ National Market System are valued at the last reported sale price. Securities traded on an exchange or NASDAQ for which there has been no sale, securities traded in the over-the-counter-market and gold and silver bullion are valued at the mean between the last reported bid and ask prices. All investments quoted in foreign currencies will be valued daily in U.S. dollars on the basis of the foreign currency exchange rates prevailing at the time such valuation is determined by each Fund's custodian. Securities for which market quotations are not readily available are valued at their respective fair values as determined in good faith and in accordance with policies set by the Board of Directors. Investments in securities maturing in less than 60 days are valued at cost, which, when combined with accrued interest, approximates value. B. Security Transactions and Revenue Recognition. Securities transactions are accounted for on the trade date. Realized gains and losses are reported on the basis of identified cost of securities delivered. Interest income is recorded on an accrual basis. Dividend income is recorded on the ex-dividend date, or for certain foreign securities, when the information becomes available to the funds. Premium amortization and discount accretion are determined by the effective yield method. C. Foreign Currency Translation. The books and records of the Funds are maintained in U.S. dollars. Any foreign currency amounts are translated into U.S. dollars on the following basis: (1) Market value of investment securities, other assets and liabilities -- at the exchange rates prevailing at the end of the day. (2) Purchases and sales of investment securities, income and expenses -- at the rates of exchange prevailing on the respective dates of such transactions. Although the net assets and the market values are presented at the foreign exchange rates at the end of the day, the Funds do not isolate the portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gains or losses from investments. For securities which are subject to foreign withholding tax upon disposition, liabilities are recorded on the statement of assets and liabilities for the estimated tax withholding based on the securities current market value. Upon disposition, realized gains or losses on such securities are recorded net of foreign withholding tax. Reported net realized foreign exchange gains or losses arise from sales and maturities of short-term securities, sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund's books, and the U.S. dollar equivalent of the amounts 74 ------- Pilgrim Funds ------- NOTES TO FINANCIAL STATEMENTS as of October 31, 2000 (Continued) -------------------------------------------------------------------------------- actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end, resulting from changes in the exchange rate. Foreign security and currency transactions may involve certain considerations and risks not typically associated with investing in U.S. companies and the U.S. Government. These risks include but are not limited to re-evaluation of currencies and future adverse political and economic developments which could cause securities and their markets to be less liquid and prices more volatile than those of comparable U.S. companies and the U.S. Government. D. Foreign Currency Transactions. Certain funds may enter into foreign currency exchange transactions to convert to and from different foreign currencies and to and from the U.S. dollar in connection with the planned purchases or sales of securities. The Funds either enter into these transactions on a spot basis at the spot rate prevailing in the foreign currency exchange market or use forward foreign currency contracts to purchase or sell foreign currencies. When the contract is fulfilled or closed, gains or losses are realized. Until then, the gain or loss is included in unrealized appreciation or depreciation. Risks may arise upon entering into forward contracts from the potential inability of counterparties to meet the terms of their forward contracts and from unanticipated movements in the value of foreign currencies relative to the U.S. dollar. Each Fund may enter into futures contracts involving foreign currency, interest rates, securities and securities indices, for hedging purposes only. A futures contract obligates the seller of the contract to deliver and the purchaser of the contract to take delivery of the type of foreign currency, financial instrument or security called for in the contract at a specified future time for a specified price. Upon entering into such a contract, a Fund is required to deposit and maintain as collateral such initial margin as required by the exchange on which the contract is traded. Pursuant to the contract, a Fund agrees to receive from or pay to the broker an amount equal to the daily fluctuations in the value of the contract. Such receipts or payments are known as variation margins and are recorded as unrealized gains or losses by the Fund. When the contract is closed, the Fund 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. There were no open futures contracts at October 31, 2000. E. Distributions to Shareholders. The Funds record distributions to their shareholders on ex-date. Each Fund pays dividends and capital gains, if any annually. Pilgrim Global Income Fund pays dividends quarterly, if any. The amount of distributions from net investment income and net realized capital gains are determined in accordance with federal income tax regulations, which may differ from generally accepted accounting principles. These "book/tax" differences are either considered temporary or permanent in nature. Key differences are the treatment of short-term capital gains, foreign currency transactions, organization costs and other temporary differences. To the extent that these differences are permanent in nature, such amounts are reclassified within the capital accounts based on their federal tax-basis treatment; temporary differences do not require reclassifications. Distributions which exceed net investment income and net realized capital gains for financial reporting purposes but not for tax purposes, are reported as distributions in excess of net investment income and/or net realized capital gains. To the extent they exceed net investment income and/or net realized capital gains for tax purposes, they are reported as distributions of paid-in capital. Accordingly, amounts as of October 31, 2000 have been increased (decreased) through reclassification as follows: Accumlated Undistributed net realized (Distribution gains (losses) is excess) on investments Paid-in net investment and foreign capital income currency transactions ------- ------ --------------------- Worldwide Growth $(2,583,533) $1,823,273 $ 760,260 Global Corporate Leaders -- 171,228 (171,228) 75 ------- Pilgrim Funds ------- NOTES TO FINANCIAL STATEMENTS as of October 31, 2000 (Continued) -------------------------------------------------------------------------------- Accumlated Undistributed net realized (Distribution gains (losses) is excess) on investments Paid-in net investment and foreign capital income currency transactions ------- ------ --------------------- International Value -- $ (378,812) $ 378,812 International -- 1,468,852 (1,468,852) International Core $(2,726,638) 983,960 1,742,678 International SmallCap Growth -- (922,028) 922,028 Emerging Markets Value -- (6,417) 6,417 Emerging Countries (3,127,882) 966,710 2,161,172 WorldwideEmerging Markets (5,674,996) 1,604,409 4,070,587 Global Technology (37,393) 142,357 (104,964) Asia-Pacific Equity (2,905) (1,129) 4,034 SmallCap Asia Growth (200,905) 127,980 72,925 Troika (723,617) 605,220 118,397 Gold 12,838,107 (73,681) (12,764,426) Silver (954,860) (1,139) 955,999 Global Income (255,473) (1,212,444) 1,467,917 F. Federal Income Taxes. It is the policy of the Funds, to comply with the requirements of the Internal Revenue Code that are applicable to regulated investment companies and to distribute substantially all of their net investment income and any net realized capital gains to their shareholders. Therefore, a federal income tax provision is not required. In addition, by distributing during each calendar year substantially all of its net investment income and net realized capital gains, each Fund intends not to be subject to any federal excise tax. The Board of Directors/Trustees intends to offset any net capital gains with any available capital loss carryforward until each carryforward has been fully utilized or expires. In addition, no capital gain distribution shall be made until the capital loss carryforward has been fully utilized or expires. Capital loss carryforwards were as follows at October 31, 2000: Amount Expiration Dates ------ ---------------- Worldwide Growth $ 3,925,607 October 2008 International SmallCap Growth 10,815,771 October 2008 Emerging Countries 48,415,929 October 2006 to 2008 Worldwide Emerging Markets 11,424,744 October 2006 Asia-Pacific Equity 23,797,507 October 2007 to 2008 SmallCap Asia Growth 9,778,022 October 2007 Troika 62,419,331 October 2006 to 2007 Gold 81,765,466 October 2001 to 2008 Silver 14,137,606 October 2002 to 2008 Global Income 1,055,996 October 2007 to 2008 At October 31, 2000, Silver had $954,860 of capital loss carryforwards expired. G. Use of Estimates. Management of the Funds has made certain estimates and assumptions relating to the reporting of assets, liabilities, income, and expenses to prepare these financial statements in conformity with generally accepted accounting principles. Actual results could differ from these estimates. H. Repurchase Agreements. Each Fund may invest in repurchase agreements only with government securities dealers recognized by the Board of Governors of the Federal Reserve System or with member banks of the Federal Reserve System. Under such agreements, the seller of the security agrees to repurchase it at a mutually agreed upon time and price. The resale price is in excess of the purchase price and reflects an agreed upon interest rate for the period of time the agreement is outstanding. The period of the repurchase agreements is usually short, from overnight to one week, while the underlying securities generally have longer maturities. Each Fund will always receive as collateral securities acceptable to it whose market value is equal to at least 100% of the amount being invested by the Fund. If the seller defaults, a Fund might incur a loss or delay in the realization of proceeds if the value of security collateralizing the repurchase agreement declines, and it might incur disposition costs in liquidating the collateral. I. Deferred Organization Expenses. Expenses incurred in connection with the organization and registration of Asia-Pacific Equity Fund under the Investment Company Act of 1940 and the Securities Act of 1933 76 ------- Pilgrim Funds ------- NOTES TO FINANCIAL STATEMENTS as of October 31, 2000 (Continued) -------------------------------------------------------------------------------- are being amortized by the Fund over a period of five years from the date of commencement of its operations. J. Securities Lending. Each Fund had the option to temporarily loan 331|M/3% of its total assets to brokers, dealers or other financial institutions in exchange for a negotiated lender's fee. The borrower is required to fully collateralize the loans with cash, letters of credit or U.S. Government securities. NOTE 3 -- INVESTMENT TRANSACTIONS For the periods ended October 31, 2000, the cost of purchases and proceeds from the sales of securities, excluding short-term securities, were as follows: Purchases Sales --------- ----- Worldwide Growth (1) $ 471,483,817 $455,557,275 Global Corporate Leaders (2) 539,129 1,277,449 International Value (3) 1,220,243,069 499,152,324 International (2) 35,009,602 25,746,787 International Core Growth (1) 61,346,868 58,790,704 International SmallCap Growth (1) 457,484,733 370,312,350 Emerging Markets Value (3) 5,536,260 12,214,229 Emerging Countries (1) 209,290,711 238,753,252 Worldwide Emerging Markets (2) 304,250,718 280,517,243 Global Technology (2) 26,841,728 14,739,867 Asia-Pacific Equity (1) 3,144,358 6,679,913 SmallCap Asia Growth (2) 10,869,988 16,828,594 Troika Dialog Russia (2) 32,851,783 25,655,070 Gold (2) 13,859,362 37,615,875 Silver (2) 1,513,709 19,626,641 Global Income (2) 3,820,155 12,387,642 ---------- (1) For the period July 1, 2000 thru October 31, 2000 (2) For the period January 1, thru October 31, 2000 (3) For the year ended October 31, 2000 NOTE 4 -- REDEMPTION FEE INCOME -- GLOBAL TECHNOLOGY AND TROIKA DIALOG RUSSIA A fee is charged on the redemption of shares equal to 2% of the redemption price of shares of the Fund held less than 365 days that are being redeemed. Redemption fee proceeds will be applied to the Fund's aggregate expenses allocable to providing custody and redemption services, including transfer agent fees, postage, printing, telephone costs and employment costs relating to the handling and processing of redemptions. Any excess fee proceeds will be added to the Fund's capital. Total redemption fee proceeds for the ten months ended October 31, 2000 were $11,109 and $856,074, respectively for Global Technology and Troika. The amount available for offset against Fund expenses was $11,109 and $465,732, respectively for Global Technology and Troika and is set forth in the statement of operations. Excess fee proceeds of $390,342 for Troika was added to the Fund's capital. NOTE 5 -- INVESTMENT MANAGEMENT AND ADMINISTRATIVE FEES Each of the Funds has entered into an Investment Management Agreement with ING Pilgrim Investments, Inc. ("the Manager"), a wholly-owned subsidiary of PGI. The investment management agreements compensate the Manager with a fee, computed daily and payable monthly, based on the average daily net assets of each Fund, at the following annual rates: As a percent of average net assets ---------------------------------- Worldwide Growth 1.00% on first $500 million; 0.90% on next $500 million; and 0.85% in excess of $1 billion Global Corporate Leaders 1.00% International Value 1.00% International 1.00% International Core Growth 1.00% on first $500 million; 0.90% on next $500 million; and 0.85% in excess of $1 billion International SmallCap Growth 1.00% on first $500 million; 0.90% on next $500 million; and 0.85% in excess of $1 billion Emerging Markets Value 1.00% Emerging Countries 1.25% Worldwide Emerging Markets 1.00% Global Technology 1.25% Asia-Pacific Equity 1.25% SmallCap Asia Growth 1.25% Troika Dialog Russia 1.25% Gold 1.00% on first $50 million; 0.75% thereafter Silver 1.00% on first $30 million; 0.75% thereafter Global Income 1.00% For the period ended October 31, 2000 the Advisor earned $25,393,277 in investment management fees.(A) On July 31, 2000, Pilgrim Investments, Inc. notified Nicholas-Applegate Capital Management ("NACM") of its intention to terminate NACM as sub-advisor to the Worldwide Growth, International Core Growth and Emerging Countries effective September 30, 2000. October 1, 2000, ING Pilgrim Investments, Inc. began advising the Funds directly. PGI (the "Administrator") serves as administrator to Global Corporate Leaders, International Value, 77 ------- Pilgrim Funds ------- NOTES TO FINANCIAL STATEMENTS as of October 31, 2000 (Continued) -------------------------------------------------------------------------------- International, Worldwide Emerging Markets, Global Technology, SmallCap Asia Growth, Troika Dialog Russia, Gold, Silver and Global Income Funds. The Funds paid the Administrator a fee calculated at an annual rate of 0.10% of each Fund's average daily net assets. International Value and Emerging Markets Value also pay an annual shareholder account servicing fee of $5.00, payable semi-annually, for each account of beneficial owners of shares. For the period ended October 31, 2000 the Administrator earned $1,939,900 in administrative and account servicing fees.(B) ---------- (A) Prior to July 26, 2000, the former Lexington Funds paid Lexington the same fees for investment management. (B) Prior to July 26, 2000, the former Lexington Funds did not pay an administrative fee to Lexington. NOTE 6 -- DISTRIBUTION FEES Each share class of the Funds has adopted a Plan pursuant to Rule 12b-1 under the 1940 Act (the "12b-1 Plans"), whereby ING Pilgrim Securities, Inc. (the "Distributor") is reimbursed or compensated (depending on the class of shares) by the Funds for expenses incurred in the distribution of each Funds' shares. Pursuant to the 12b-1 Plans, the Distributor is entitled to payment each month for actual expenses incurred in the distribution and promotion of each Fund's shares, including the printing of prospectuses and reports used for sales purposes, expenses of preparation and printing of sales literature and other such distribution related expenses, including any distribution or service fees paid to securities dealers who have executed a distribution agreement with the Distributor. Under the 12b-1 Plans, each class of shares of the Fund pays the Distributor the following annual fees: Class A Class B Class C Class M Class Q ------- ------- ------- ------- ------- Worldwide Growth 0.35% 1.00% 1.00% N/A 0.25% Global Corporate Leaders 0.25 N/A N/A N/A N/A International Value 0.30 1.00 1.00 N/A 0.25 International 0.25 1.00 1.00 N/A 0.25 International Core Growth 0.35 1.00 1.00 N/A 0.25 International SmallCap Growth 0.35 1.00 1.00 N/A 0.25 Emerging Markets Value 0.30 1.00 1.00 N/A N/A Emerging Countries 0.35 1.00 1.00 N/A 0.25 Worldwide Emerging Markets 0.25 N/A N/A N/A N/A Global Technology 0.25 N/A N/A N/A N/A Asia-Pacific Equity 0.25 1.00 N/A 0.75% N/A SnallCap Asia Growth 0.25 1.00 N/A N/A 0.25 Troika Dialog Russia 0.25 N/A N/A N/A N/A Gold 0.25 N/A N/A N/A N/A Silver 0.25 N/A N/A N/A N/A Global Income 0.25 1.00 1.00 N/A 0.25 Prior to July 26, 2000, the former Lexington Funds had a Distribution Plan ("the Plan") which allowed payments to finance activities associated with the distribution of the Fund's shares. The Plan provided that the Fund paid distribution fees on a reimbursement basis, including payments to Lexington Funds Distributor, Inc. ("LFD"), the Fund's distributor, in amounts not exceeding 0.25% per annum of the Fund's average daily net assets. Fees paid to the Distributor by class during the period ended October 31, 2000 are shown in the accompanying Statements of Operations. For the period ended October 31, 2000, the Distributor earned $15,177,352 in Distributor fees. The Distributor also receives the proceeds of the initial sales charge paid by shareholders upon the purchase of Class A shares, and the contingent deferred sales charge paid by shareholders upon certain redemptions for Class A, Class B, and Class C shares. For the period ended October 31, 2000, the Distributor earned the following amounts in sales charges: Class A Class B Class C Class M Shares Shares Shares Shares ------ ------ ------ ------ Initial Sales Charges $779,776 N/A N/A $132 Contingent deferred sales charges $117,808 $ 0 $340,042 N/A NOTE: International Value and Emerging Markets were for the year ended October 31, 2000. International Core Growth, International SmallCap Growth, Emerging Countries, Asia-Pacific Equity, and Worldwide Growth were for the period from July 1, 2000 to October 31, 2000. Worldwide Emerging Markets, Global Technology, Global Corporate Leaders, SmallCap Asia Growth, Troika Dialog Russia, Global Income, Gold, and Silver were for the period from August 1, 2000 to October 31, 2000. NOTE 7 -- SHAREHOLDER SERVICING FEES Each of the Funds has entered into a Service Agreement with PGI whereby PGI will act as Shareholder Service Agent for each Fund. The agreement provides that PGI will be compensated for incoming and outgoing shareholder telephone calls and letters, and all reasonable out-of-pocket expenses incurred in connection with the performance of such services. Fees accrued during the year ended October 31, 2000 are shown in the accompanying Statements of Operations. 78 ------- Pilgrim Funds ------- NOTES TO FINANCIAL STATEMENTS as of October 31, 2000 (Continued) -------------------------------------------------------------------------------- NOTE 8 -- EXPENSE WAIVERS For the following Funds, the Investment Manager has voluntarily agreed to limit expenses, excluding interest, taxes, brokerage and extraordinary expenses to the levels listed below: Maximum Operating Expense Limit (as a percentage of average net assets) ----------------------------------------------- Class A Class B Class C Class M Class Q ------- ------- ------- ------- ------- Worldwide Growth 1.85% 2.50% 2.50% N/A 1.60% Global Corporate Leaders 2.75% N/A N/A N/A N/A International Value N/A N/A N/A N/A N/A International 2.75 3.50% 3.50% N/A 2.75% International Core Growth 1.95 2.60 2.60 N/A 1.65 International SmallCap Growth 1.95 2.60 2.60 N/A 1.65 Emerging Markets Value N/A N/A N/A N/A N/A Emerging Countries 2.25 2.90 2.90 N/A 1.90 Worldwide Emerging Markets 2.75 N/A N/A N/A N/A Global Technology 2.75 N/A N/A N/A N/A Asia-Pacific Equity 2.00 2.75 N/A 2.50% N/A SmallCap Asia Growth 2.75 3.50 N/A N/A N/A Troika Dialog Russia 3.35 4.10 N/A N/A N/A Gold 2.75 N/A N/A N/A N/A Silver 2.75 N/A N/A N/A N/A Global Income 2.75 3.50 3.50 N/A 2.75 NOTE 9 -- CREDIT FACILITY The Pilgrim Funds, Pilgrim Equity Trust and Pilgrim Mayflower Trust have entered into an unsecured committed revolving line of credit agreement with State Street Bank and Trust Company for an aggregate amount of $50,000,000. In addition, Pilgrim Investment Funds, Inc., Pilgrim Advisory Funds, Inc., Pilgrim Bank & Thrift Fund, Inc., Pilgrim Government Securities Income Fund, Inc. and Pilgrim Mutual Funds have entered into an unsecured committed revolving line of credit agreement ("the Credit Agreements") with State Street Bank and Trust Company for an aggregate amount of $75,000,000. The proceeds may be used only to (1) temporarily finance the purchase and sale of securities; (2) finance the redemption of shares of an Investor in the Funds; and (3) enable the Funds to meet other emergency expenses as defined in the Credit Agreements. Each Fund pays its pro rata share of an annual commitment fee plus interest on its specific borrowings. As of and for the periods ended October 31, 2000 there was no balance outstanding under the credit facility. NOTE 10 -- CAPITAL SHARES Transactions in capital shares and dollars were as follows:
Class A Shares ------------------------------------------------------------------ Four Months Year Three Months Year Ended Ended Ended Ended October 31, June 30, June 30, March 31, 2000 2000 1999 1999 ------------- ------------- ------------ ------------- Worldwide Growth (Number of Shares) Shares sold 4,005,399 14,001,807 1,172,285 5,575,910 Shares issued as reinvestment of dividends 422,437 86 96,384 -- Shares redeemed (2,499,778) (9,384,459) (660,100) (5,374,372) ------------- ------------- ------------ ------------- Net increase in shares outstanding 1,505,621 5,039,785 512,271 297,922 ============= ============= ============ ============= Worldwide Growth ($) Shares sold $ 116,318,819 $ 404,667,268 $ 26,425,907 $ 110,310,826 Shares issued as reinvestment of dividends 10,797,545 -- 1,739,418 -- Shares redeemed (73,218,592) (273,872,546) (14,957,153) (107,031,318) ------------- ------------- ------------ ------------- Net increase in shares outstanding $ 43,100,227 $ 141,592,267 $ 11,468,754 $ 5,018,926 ============= ============= ============ ============= Class B Shares -------------------------------------------------------------- Four Months Year Three Months Year Ended Ended Ended Ended October 31, June 30, June 30, March 31, 2000 2000 1999 1999 ------------ ------------ ----------- ------------ Worldwide Growth (Number of Shares) Shares sold 631,926 2,987,911 353,077 544,757 Shares issued as reinvestment of dividends 192,099 -- 39,170 Shares redeemed (230,519) (336,704) (70,889) (319,228) ------------ ------------ ----------- ------------ Net increase in shares outstanding 401,407 2,843,306 282,188 264,699 ============ ============ =========== ============ Worldwide Growth ($) Shares sold $ 20,649,472 $ 95,993,252 $ 9,019,106 $ 11,616,885 Shares issued as reinvestment of dividends 5,534,613 -- 799,305 Shares redeemed (7,450,350) (10,888,095) (1,811,055) (6,778,733) ------------ ------------ ----------- ------------ Net increase in shares outstanding $ 13,199,122 $ 90,639,770 $ 7,208,051 $ 5,637,457 ============ ============ =========== ============
79 ------- Pilgrim Funds ------- NOTES TO FINANCIAL STATEMENTS as of October 31, 2000 (Continued) --------------------------------------------------------------------------------
Class C Shares --------------------------------------------------------------- Four Months Year Three Months Year Ended Ended Ended Ended October 31, June 30, June 30, March 31, 2000 2000 1999 1999 ------------ ------------- ----------- ------------ Worldwide Growth (Number of Shares) Shares sold 1,218,370 3,546,660 316,937 1,258,419 Shares issued as reinvestment of dividends -- 554,745 -- 117,737 Shares redeemed (1,075,019) (797,116) (195,915) (1,224,596) ------------ ------------- ----------- ------------ Net increase (decrease) in shares outstanding 143,351 3,304,289 121,022 151,560 ============ ============= =========== ============ Worldwide Growth ($) Shares sold $ 34,976,677 $ 103,794,801 $ 7,199,228 $ 23,846,842 Shares issued as reinvestment of dividends -- 14,207,022 -- 2,145,255 Shares redeemed (31,067,826) (22,853,219) (4,443,951) (22,854,997) ------------ ------------- ----------- ------------ Net increase (decrease) in shares outstanding $ 3,908,851 $ 95,148,604 $ 2,755,277 $ 3,137,100 ============ ============= =========== ============ Class Q Shares -------------------------------------------------------------- Four Months Year Year Year Ended Ended Ended Ended October 31, June 30, June 30, March 31, 2000 1999 1999 1999 ------------ ------------ ------------ ----------- Worldwide Growth (Number of Shares) Shares sold 458,143 1,816,105 430,631 350,299 Shares issued as reinvestment of dividends -- 85,463 -- 4,352 Shares redeemed (562,214) (873,920) (180,058) (89,828) ------------ ------------ ------------ ----------- Net increase (decrease) in shares outstanding (104,071) 1,027,648 250,573 264,823 ============ ============ ============ =========== Worldwide Growth ($) Shares sold $ 15,506,281 $ 60,334,275 $ 11,187,418 $ 7,773,616 Shares issued as reinvestment of dividends -- 2,513,469 -- 89,521 Shares redeemed (18,881,326) (30,258,824) (4,610,453) (1,884,358) ------------ ------------ ------------ ----------- Net increase (decrease) in shares outstanding $ (3,375,045) $ 32,588,920 $ 6,576,965 $ 5,978,779 ============ ============ ============ =========== Class A Shares -------------------------------------------- Ten Months Year Year Ended Ended Ended October 31, December 31, December 31, 2000 1999 1998 ----------- ----------- ------------ Global Corporate Leaders (Number of Shares) Shares sold 426,731 284,800 417,735 Shares issued as reinvestments of dividends -- 78,562 459,871 Shares redeemed (451,817) (648,697) (2,311,185) ----------- ----------- ------------ Net decrease in shares outstanding (25,086) (285,335) (1,433,579) =========== =========== ============ Global Corporate Leaders ($) Shares sold $ 4,872,027 $ 2,893,261 $ 4,884,051 Shares issued as reinvestments of dividends -- 917,731 4,402,616 Shares redeemed (5,203,040) (6,684,363) (27,606,682) ----------- ----------- ------------ Net decrease in shares outstanding $ (331,013) $(2,873,371) $(18,320,015) =========== =========== ============
80 ------- Pilgrim Funds ------- NOTES TO FINANCIAL STATEMENTS as of October 31, 2000 (Continued) --------------------------------------------------------------------------------
Class A Shares Class B Shares --------------------------------- ------------------------------- Year Year Ended Ended October 31, October 31, --------------------------------- ------------------------------- 2000 1999 2000 1999 --------------- ------------- ------------- ------------- International Value (Number of Shares) Shares sold 83,175,007 37,389,180 9.796,492 8,274,008 Shares issued as reinvestments of dividends 1,328,930 1,139,195 622,312 520,861 Shares redeemed (59,935,901) (25,654,229) (2,916,805) (2,066,590) --------------- ------------- ------------- ------------- Net increase in shares outstanding 24,568,036 12,874,146 7,501,999 6,728,279 =============== ============= ============= ============= International Value ($) Shares sold $ 1,354,284,766 $ 491,487,619 $ 157,186,306 $ 111,215,626 Shares issued as reinvestments of dividends 21,993,188 13,398,457 10,213,421 6,044,049 Shares redeemed (975,073,293) (331,576,463) (46,780,828) (26,329,963) --------------- ------------- ------------- ------------- Net increase in shares outstanding $ 401,204,661 $ 173,309,613 $ 120,618,899 $ 90,929,712 =============== ============= ============= ============= Class C Shares Class Q Shares ------------------------------- ----------------------------- Year Year Ended Ended October 31, October 31, ------------------------------- ----------------------------- 2000 1999 2000 2000 ------------- ------------- ------------ ------------ International Value (Number of Shares) Shares sold 19,178,129 12,104,834 1,548,084 913,289 Shares issued as reinvestments of dividends 732,571 515,060 -- -- Shares redeemed (4,309,599) (3,018,495) (56,473) (1,321) ------------- ------------- ------------ ------------ Net increase in shares outstanding 15,601,101 9,601,399 1,491,611 911,968 ============= ============= ============ ============ International Value ($) Shares sold $ 307,905,636 $ 162,419,735 $ 24,545,939 13,989,768 Shares issued as reinvestments of dividends 11,999,531 5,974,729 -- -- Shares redeemed (68,808,206) (39,186,243) (943,654) (21,126) ------------- ------------- ------------ ------------ Net increase in shares outstanding $ 251,096,961 $ 129,208,221 $ 23,602,285 $ 13,968,642 ============= ============= ============ ============ Class A Shares Class B Shares Class C Shares ---------------------------------------------- ----------- -------------- Ten Months Year Year Ten Months Ten Months Ended Ended Ended Ended Ended October 31, December 31, December 31, October 31, October 31, 2000 1999 1998 2000 2000 ------------ ------------ ------------ --------- ------- International (Number of Shares) Shares sold 1,779,250 416,856 1,005,127 17,961 7,588 Shares issued as reinvestment of dividends 81,693 329,564 58,468 -- -- Shares redeemed (1,009,539) (933,028) (970,855) (10,781) -- ------------ ------------ ------------ --------- ------- Net increase (decrease) in shares outstanding 851,404 (186,608) 92,740 7,180 7,588 ============ ============ ============ ========= ======= International ($) Shares sold $ 22,592,548 $ 5,619,698 $ 11,440,387 $ 206,897 $88,184 Shares issued as reinvestment of dividends 1,011,365 4,382,040 669,485 -- -- Shares redeemed (13,336,314) (12,165,686) (10,843,052) (125,052) -- ------------ ------------ ------------ --------- ------- Net increase (decrease) in shares outstanding $ 10,267,599 $ (2,163,948) $ 1,266,820 $ 81,845 $88,184 ============ ============ ============ ========= =======
81 ------- Pilgrim Funds ------- NOTES TO FINANCIAL STATEMENTS as of October 31, 2000 (Continued) --------------------------------------------------------------------------------
Class A Shares ---------------------------------------------------------------- Four Months Year Three Months Year Ended Ended Ended Ended October 31, June 30, June 30, March 31, 2000 2000 1999 1999 ------------ ------------- ------------ ------------ International Core Growth (Number of Shares) Shares sold 1,609,319 5,045,863 1,699,541 4,111,884 Shares issued as reinvestment of dividends 33,304 -- 5,819 Shares redeemed (1,446,511) (4,770,319) (2,264,636) (3,641,067) ------------ ------------- ------------ ------------ Net increase in shares outstanding 162,808 308,848 (565,095) 476,636 ============ ============= ============ ============ International Core Growth ($) Shares sold $ 35,660,867 $ 121,096,575 $ 30,866,314 $ 72,899,494 Shares issued as reinvestment of dividends 740,357 -- 109,877 Shares redeemed (32,390,856) (114,696,068) (41,080,307) (65,603,216) ------------ ------------- ------------ ------------ Net increase in shares outstanding $ 3,270,011 $ 7,140,864 $(10,213,993) $ 7,406,155 ============ ============= ============ ============ Class B Shares ---------------------------------------------------------- Four Months Year Three Months Year Ended Ended Ended Ended October 31, June 30, June 30, March 31, 2000 2000 1999 1999 ----------- ------------ --------- ----------- International Core Growth (Number of Shares) Shares sold 177,101 458,137 47,812 317,938 Shares issued as reinvestment of dividends 30,801 -- 2,484 Shares redeemed (165,362) (215,896) (33,706) (168,120) ----------- ------------ --------- ----------- Net increase in shares outstanding 11,739 273,042 14,106 152,302 =========== ============ ========= =========== International Core Growth ($) Shares sold $ 4,037,626 $ 11,335,788 $ 888,899 $ 5,553,372 Shares issued as reinvestment of dividends 689,313 -- 47,437 Shares redeemed (3,765,765) (5,138,991) (610,199) (2,893,130) ----------- ------------ --------- ----------- Net increase in shares outstanding $ 271,861 $ 6,886,110 $ 278,700 $ 2,707,679 =========== ============ ========= =========== Class C Shares ------------------------------------------------------------- Four Months Year 3 Months Year Ended Ended Ended Ended October 31, June 30, June 30, March 31, 2000 2000 1999 1999 ------------ ------------ ----------- ----------- International Core Growth (Number of Shares) Shares sold 1,025,108 1,618,402 113,784 455,651 Shares issued as reinvestment of dividends 33,214 -- 1,471 Shares redeemed (925,675) (1,158,306) (69,740) (82,349) ------------ ------------ ----------- ----------- Net increase (decrease) in shares outstanding 99,433 493,310 44,044 374,773 ============ ============ =========== =========== International Core Growth ($) Shares sold $ 23,241,494 $ 39,015,970 $ 2,117,597 $ 7,964,267 Shares issued as reinvestment of dividends 745,659 -- 28,148 Shares redeemed (21,161,483) (27,691,220) (1,298,517) (1,412,367) ------------ ------------ ----------- ----------- Net increase (decrease) in shares outstanding $ 2,080,011 $ 12,070,409 $ 819,080 $ 6,580,048 ============ ============ =========== =========== Class Q Shares ------------------------------------------------------------- Four Months Year Three Months Year Ended Ended Ended Ended October 31, June 30, June 30, March 31, 2000 2000 1999 1999 ----------- ------------ ----------- ------------ International Core Growth (Number of Shares) Shares sold 165,852 780,577 93,649 581,442 Shares issued as reinvestment of dividends -- 24,738 -- 1,463 Shares redeemed (193,498) (615,038) (228,977) (67,954) ----------- ------------ ----------- ------------ Net increase (decrease) in shares outstanding (27,646) 190,277 (135,328) 514,951 =========== ============ =========== ============ International Core Growth ($) Shares sold $ 3,896,070 $ 20,639,997 $ 1,771,267 $ 10,297,873 Shares issued as reinvestment of dividends -- 572,187 -- 31,169 Shares redeemed (4,527,377) (16,620,923) (4,253,651) (1,185,061) ----------- ------------ ----------- ------------ Net increase (decrease) in shares outstanding $ (631,307) $ 4,591,261 $(2,482,384) $ 9,143,981 =========== ============ =========== ============
82 ------- Pilgrim Funds ------- NOTES TO FINANCIAL STATEMENTS as of October 31, 2000 (Continued) --------------------------------------------------------------------------------
Class A Shares ------------------------------------------------------------------ Ten Months Year Three Months Year Ended Ended Ended Ended October 31, June 30, June 30, March 31, 2000 2000 1999 1999 ------------- ------------- ------------ ------------- International SmallCap Growth (Number of Shares) Shares sold 7,284,746 18,367,774 1,367,921 4,953,991 Shares issued as reinvestment of dividends -- 169,910 -- 41,096 Shares redeemed (6,508,231) (13,311,135) (997,179) (4,370,199) ------------- ------------- ------------ ------------- Net increase in shares outstanding 776,515 5,226,549 370,742 624,888 ============= ============= ============ ============= International SmallCap Growth ($) Shares sold $ 281,224,096 $ 753,445,372 $ 30,182,958 $ 101,529,799 Shares issued as reinvestment of dividends -- 5,544,302 -- 811,876 Shares redeemed (252,360,434) (552,362,495) (22,024,759) (90,418,518) ------------- ------------- ------------ ------------- Net increase in shares outstanding $ 28,863,662 $ 206,627,179 $ 8,158,199 $ 11,923,157 ============= ============= ============ ============= Class B Shares --------------------------------------------------------------- Ten Months Year Three Months Year Ended Ended Ended Ended October 31, June 30, June 30, March 31, 2000 2000 1999 1999 ------------ ------------- ----------- ------------ International SmallCap Growth (Number of Shares) Shares sold 647,440 2,668,131 98,528 574,326 Shares issued as reinvestment of dividends 85,395 -- 21,611 Shares redeemed (364,779) (465,407) (55,682) (472,298) ------------ ------------- ----------- ------------ Net increase in shares outstanding 282,661 2,288,119 42,846 123,639 ============ ============= =========== ============ International SmallCap Growth ($) Shares sold $ 27,240,137 $ 110,600,703 $ 2,333,350 $ 12,177,504 Shares issued as reinvestment of dividends 2,953,812 -- 452,596 Shares redeemed (15,204,196) (20,315,971) (1,302,925) (9,959,007) ------------ ------------- ----------- ------------ Net increase in shares outstanding $ 12,035,941 $ 93,238,544 $ 1,030,425 $ 2,671,093 ============ ============= =========== ============ Class C Shares --------------------------------------------------------------- Ten Months Year Three Months Year Ended Ended Ended Ended October 31, June 30, June 30, March 31, 2000 2000 1999 1999 ------------ ------------- ----------- ------------ International SmallCap Growth (Number of Shares) Shares sold 1,025,749 4,361,314 146,271 660,257 Shares issued as reinvestment of dividends -- 80,888 -- 13,435 Shares redeemed (736,411) (1,600,661) (34,123) (464,252) ------------ ------------- ----------- ------------ Net increase in shares outstanding 289,338 2,841,541 112,148 209,440 ============ ============= =========== ============ International SmallCap Growth ($) Shares sold $ 38,976,927 $ 174,228,168 $ 3,168,229 $ 12,933,840 Shares issued as reinvestment of dividends -- 2,568,991 -- 258,146 Shares redeemed (28,136,442) (63,584,070) (740,072) (9,055,952) ------------ ------------- ----------- ------------ Net increase in shares outstanding $ 10,840,485 $ 113,213,089 $ 2,428,157 $ 4,136,034 ============ ============= =========== ============ Class Q Shares ---------------------------------------------------------------- Ten Months Year Three Months Year Ended Ended Ended Ended October 31, June 30, June 30, March 31, 2000 2000 1999 1999 ------------ ------------- ------------ ------------ International SmallCap Growth (Number of Shares) Shares sold 2,318,401 6,375,425 529,877 1,567,046 Shares issued as reinvestment of dividends -- 154,058 -- 12,918 Shares redeemed (1,788,278) (4,450,408) (269,090) (563,058) ------------ ------------- ------------ ------------ Net increase in shares outstanding 530,123 2,079,075 260,787 1,016,906 ============ ============= ============ ============ International SmallCap Growth ($) Shares sold $ 95,855,054 $ 267,585,482 $ 12,505,725 $ 32,536,160 Shares issued as reinvestment of dividends -- 4,781,312 -- 249,737 Shares redeemed (75,048,798) (196,319,048) (6,328,290) (11,408,948) ------------ ------------- ------------ ------------ Net increase in shares outstanding $ 20,806,256 $ 76,047,746 $ 6,177,435 $ 21,376,949 ============ ============= ============ ============ Class A Shares Class B Shares Class C Shares --------------------------- ----------------------------- ----------------------------- Year Year Year Ended Ended Ended October 31, October 31, October 31, --------------------------- ----------------------------- ----------------------------- 2000 1999 2000 1999 2000 1999 ----------- ----------- ----------- ------------- ----------- ------------- Emerging Markets Value (Number of Shares) Shares sold 113,319 655,250 110,879 8,274,008 83,040 12,104,834 Shares issued as reinvestment of dividends 30,132 4,477 11,603 520,861 23,727 515,060 Shares redeemed (569,672) (286,580) (80,104) (2,066,590) (297,693) (3,018,495) ----------- ----------- ----------- ------------- ----------- ------------- Net increase (decrease) in shares outstanding (426,221) 373,147 42,378 6,728,279 (190,926) 9,601,399 =========== =========== =========== ============= =========== ============= Emerging Markets Value ($) Shares sold $ 1,315,229 $ 5,675,647 $ 1,283,093 $ 111,215,626 $ 995,277 $ 162,419,735 Shares issued as reinvestment of dividends 357,971 33,577 137,491 6,044,049 279,747 5,974,729 Shares redeemed (6,439,155) (2,642,410) (913,790) (26,329,963) (3,443,514) (39,186,243) ----------- ----------- ----------- ------------- ----------- ------------- Net increase (decrease) in shares outstanding $(4,765,955) $ 3,066,814 $ 506,794 $ 90,929,712 $(2,168,490) $ 129,208,221 =========== =========== =========== ============= =========== =============
83 ------- Pilgrim Funds ------- NOTES TO FINANCIAL STATEMENTS as of October 31, 2000 (Continued) --------------------------------------------------------------------------------
Class A Shares ---------------------------------------------------------------- Four Months Year Three Months Year Ended Ended Ended Ended October 31, June 30, June 30, March 31, 2000 2000 1999 1999 ------------ ------------- ------------ ------------ Emerging Countries (Number of Shares) Shares sold 2,018,292 7,123,710 1,064,600 3,262,352 Shares issued as reinvestment of dividends -- -- -- 17,479 Shares redeemed (2,106,144) (6,583,130) (1,382,928) (3,852,081) ------------ ------------- ------------ ------------ Net increase (decrease) in shares outstanding (87,852) 540,580 (318,328) (572,250) ============ ============= ============ ============ Emerging Countries ($) Shares sold $ 37,136,028 $ 142,495,750 $ 16,015,629 $ 45,426,994 Shares issued as reinvestment of dividends -- -- -- 277,913 Shares redeemed (39,399,667) (131,430,829) (20,693,691) (51,942,286) ------------ ------------- ------------ ------------ Net increase (decrease) in shares outstanding $ (2,263,639) $ 11,064,921 $ (4,678,062) $ (6,237,379) ============ ============= ============ ============ Class B Shares ------------------------------------------------------------ Four Months Year Three Months Year Ended Ended Ended Ended October 31, June 30, June 30, March 31, 2000 2000 1999 1999 ----------- ----------- ----------- ------------ Emerging Countries (Number of Shares) Shares sold 72,083 261,876 82,535 382,174 Shares issued as reinvestment of dividends -- -- -- 7,286 Shares redeemed (181,835) (320,122) (168,473) (951,609) ----------- ----------- ----------- ------------ Net increase (decrease) in shares outstanding (109,752) (58,246) (85,938) (562,149) =========== =========== =========== ============ Emerging Countries ($) Shares sold $ 1,296,696 $ 5,287,628 $ 1,322,669 $ 5,698,657 Shares issued as reinvestment of dividends -- -- -- 118,138 Shares redeemed (3,310,448) (6,237,718) (2,572,889) (12,756,398) ----------- ----------- ----------- ------------ Net increase (decrease) in shares outstanding $(2,013,752) $ (950,090) $(1,250,220) $ (6,939,603) =========== =========== =========== ============ Class C Shares ------------------------------------------------------------ Four Months Year Three Months Year Ended Ended Ended Ended October 31, June 30, June 30, March 31, 2000 2000 1999 1999 ----------- ----------- ----------- ------------ Emerging Countries (Number of Shares) Shares sold 80,835 395,139 116,572 521,678 Shares issued as reinvestment of dividends -- -- -- 5,264 Shares redeemed (174,804) (363,300) (99,525) (1,239,995) ----------- ----------- ----------- ------------ Net increase (decrease) in shares outstanding (93,969) 31,839 17,047 (713,053) =========== =========== =========== ============ Emerging Countries ($) Shares sold $ 1,412,550 $ 7,854,682 $ 1,744,612 $ 7,326,720 Shares issued as reinvestment of dividends -- -- -- 82,205 Shares redeemed (3,092,478) (6,755,539) (1,481,896) (16,381,157) ----------- ----------- ----------- ------------ Net increase (decrease) in shares outstanding $(1,679,928) $ 1,099,143 $ 262,716 $ (8,972,232) =========== =========== =========== ============ Class Q Shares --------------------------------------------------------------- Four Months Year Three Months Year Ended Ended Ended Ended October 31, June 30, June 30, March 31, 2000 2000 1999 1999 ------------ ------------ ------------ ------------ Emerging Countries (Number of Shares) Shares sold 1,364,617 4,383,749 1,208,239 4,616,946 Shares issued as reinvestment of dividends -- -- -- 36,438 Shares redeemed (1,825,785) (3,235,471) (459,541) (3,431,547) ------------ ------------ ------------ ------------ Net increase (decrease) in shares outstanding (461,168) 1,148,278 748,698 1,221,837 ============ ============ ============ ============ Emerging Countries ($) Shares sold $ 26,686,067 $ 94,747,678 $ 19,053,123 $ 65,385,070 Shares issued as reinvestment of dividends -- -- -- 593,577 Shares redeemed (34,329,659) (67,344,187) (7,234,180) (45,346,860) ------------ ------------ ------------ ------------ Net increase (decrease) in shares outstanding $ (7,643,592) $ 27,403,491 (11,818,943) $ 20,631,787 ============ ============ ============ ============
Class A Shares ------------------------------ Ten Months Year Ended Ended October 31, December 31, 2000 1999 ------------- ------------ Worldwide Emerging Markets (Number of Shares) Shares sold 14,046,296 9,845,634 Shares issued as reinvestment of dividends -- 29,543 Shares redeemed (15,189,999) (8,770,026) ------------- ------------ Net increase (decrease) in shares outstanding (1,143,703) 1,105,151 ============= ============ Worldwide Emerging Markets ($) Shares sold $ 217,321,414 $ 99,235,547 Shares issued as reinvestment of dividends -- 268,725 Shares redeemed (233,409,624) (78,005,927) ------------- ------------ Net increase (decrease) in shares outstanding $ (16,088,210) $ 21,498,345 ============= ============ 84 ------- Pilgrim Funds ------- NOTES TO FINANCIAL STATEMENTS as of October 31, 2000 (Continued) -------------------------------------------------------------------------------- Class A Shares ------------ Ten Months Ended October 31, 2000 ------------ Global Technology (Number of Shares) Shares sold 1,296,778 Shares issued as reinvestment of dividends -- Shares redeemed (176,126) ------------ Net increase in shares outstanding 1,120,652 ============ Global Technology ($) Shares sold $ 14,993,431 Shares issued as reinvestment of dividends -- Shares redeemed (1,908,595) ------------ Net increase in shares outstanding $ 13,084,836 ============ Class A Shares ---------------------------------------------- Four Months Year Year Ended Ended Ended October 31, June 30, June 30, 2000 2000 1999 ------------ ------------ ------------- Asia-Pacific Equity (Number of Shares) Shares sold 2,793,903 9,625,972 25,333,718 Shares issued as reinvestment of dividends -- -- -- Shares redeemed (2,717,440) (10,000,540) (25,985,521) ------------ ------------ ------------- Net increase (decrease) in shares outstanding 76,463 (374,568) (651,803) ============ ============ ============= Asia-Pacific Equity ($) Shares sold $ 17,553,287 $ 71,934,635 $ 120,602,739 Shares issued as reinvestment of dividends -- -- -- Shares redeemed (17,612,355) (75,845,503) (124,586,962) ------------ ------------ ------------- Net increase (decrease) in shares outstanding $ (59,068) $ (3,910,868) $ (3,984,223) ============ ============ =============
Class B Shares Class M Shares --------------------------------------------- --------------------------------------------- Four Months Year Year Four Months Year Year Ended Ended Ended Ended Ended Ended October 31, June 30, June 30, October 31, June 30, June 30, 2000 1999 1999 2000 1999 1999 ----------- ------------ ------------ ----------- ------------ ----------- Asia-Pacific Equity (Number of Shares) Shares sold 286,379 2,243,981 2,652,841 263,666 2,025,542 692,204 Shares issued as reinvestment of dividends -- -- -- -- -- -- Shares redeemed (441,432) (2,335,887) (2,886,015) (237,827) (2,226,145) (927,629) ----------- ------------ ------------ ----------- ------------ ----------- Net increase (decrease) in shares outstanding (155,053) (91,906) (233,174) 25,839 (200,603) (235,425) =========== ============ ============ =========== ============ =========== Asia-Pacific Equity ($) Shares sold $ 1,779,638 $ 16,295,675 $ 13,490,585 $ 1,270,633 $ 15,526,895 $ 3,734,225 Shares issued as reinvestment of dividends -- -- -- -- -- -- Shares redeemed (2,748,440) (17,125,978) (14,427,377) (1,278,324) (17,704,044) (4,867,780) ----------- ------------ ------------ ----------- ------------ ----------- Net increase (decrease) in shares outstanding $ (968,802) $ (830,303) $ (936,792) $ (7,691) $ (2,177,149) $(1,133,555) =========== ============ ============ =========== ============ =========== Class A Shares ---------------------------------------------- Ten Months Year Year Ended Ended Ended October 31, December 31, December 31, 2000 1999 1998 ------------ ------------ ------------ SmallCap Asia Growth (Number of Shares) Shares sold 3,364,111 4,713,297 6,328,082 Shares issued as reinvestment of dividends -- -- -- Shares redeemed (4,161,853) (6,319,697) (5,043,321) ------------ ------------ ------------ Net decrease in shares outstanding (797,742) (1,606,400) 1,284,761 ============ ============ ============ SmallCap Asia Growth ($) Shares sold $ 26,449,435 $ 33,047,205 $ 37,640,881 Shares issued as reinvestment of dividends -- -- -- Shares redeemed (33,021,682) (41,720,654) (30,186,041) ------------ ------------ ------------ Net decrease in shares outstanding $ (6,572,247) $ (8,673,449) $ 7,454,840 ============ ============ ============
85 ------- Pilgrim Funds ------- NOTES TO FINANCIAL STATEMENTS as of October 31, 2000 (Continued) --------------------------------------------------------------------------------
Class A Shares ---------------------------------------------- Ten Months Year Year Ended Ended Ended October 31, December 31, December 31, 2000 1999 1998 ------------ ------------ ------------ Troika Dialog Russia (Number of Shares) Shares sold 6,948,006 9,870,288 6,682,804 Shares issued as reinvestment of dividends -- 146,380 893,025 Shares redeemed (8,205,646) (8,524,306) (8,192,746) ------------ ------------ ------------ Net increase (decrease) in shares outstanding (1,257,640) 1,492,362 (616,917) ============ ============ ============ Troika Dialog Russia ($) Shares sold $ 54,557,755 $ 43,183,175 $ 46,991,263 Shares issued as reinvestment of dividends -- 554,533 2,202,785 Redemption fee proceeds 390,342 167,637 367,463 Shares redeemed (63,131,621) (36,262,949) (62,258,817) ------------ ------------ ------------ Net increase (decrease) in shares outstanding $ (8,183,524) $ 7,642,396 $(12,697,306) ============ ============ ============ Class A Shares ---------------------------------------------- Ten Months Year Year Ended Ended Ended October 31, December 31, December 31, 2000 1999 1998 ------------ ------------ ------------ Gold (Number of Shares) Shares sold 5,296,727 10,050,258 15,653,921 Shares issued as reinvestment of dividends 5,467 6,190,600 15,753 Shares redeemed (9,603,010) (10,982,141) (15,516,610) ------------ ------------ ------------ Net increase (decrease) in shares outstanding (4,300,816) 5,258,717 153,064 ============ ============ ============ Gold ($) Shares sold $ 15,323,872 $ 31,794,471 $ 51,873,043 Shares issued as reinvestment of dividends 13,994 17,841,616 46,630 Shares redeemed (27,268,213) (34,746,635) (51,899,941) ------------ ------------ ------------ Net increase (decrease) in shares outstanding $(11,930,347) $ 14,889,452 $ 19,732 ============ ============ ============ Class A Shares -------------------------------------------- Ten Months Year Year Ended Ended Ended October 31, December 31, December 31, 2000 1999 1998 ----------- ----------- ------------ Silver (Number of Shares) Shares sold 984,009 2,363,039 2,505,470 Shares issued as reinvestment of dividends 24,103 19,980 -- Shares redeemed (2,731,043) (3,155,876) (3,855,059) ----------- ----------- ------------ Net decrease in shares outstanding (1,722,931) (772,857) (1,349,589) =========== =========== ============ Silver ($) Shares sold $ 2,661,034 $ 6,914,213 $ 7,289,065 Shares issued as reinvestment of dividends 59,054 58,564 -- Shares redeemed (7,200,933) (9,032,468 (10,893,893) ----------- ----------- ------------ Net decrease in shares outstanding $(4,480,845) $(2,059,691) $ (3,604,828) =========== =========== ============
86 ------- Pilgrim Funds ------- NOTES TO FINANCIAL STATEMENTS as of October 31, 2000 (Continued) --------------------------------------------------------------------------------
Class A Shares Class C Shares ---------------------------------------------- -------------- Ten Months Year Year 10 months Ended Ended Ended Ended October 31, December 31, December 31, October 31 2000 1999 1998 2000 ------------ ------------ ------------ ------ Global Income (Number of Shares) Shares sold 643,969 988,458 2,299,211 290 Shares issued as reinvestment of dividends 59,047 271,656 270,497 -- Shares redeemed (2,362,163) (1,417,988) (1,263,118) -- ------------ ------------ ------------ ------ Net increase (decrease) in shares outstanding (1,659,147) (157,874) 1,306,590 290 ============ ============ ============ ====== Global Income ($) Shares sold $ 5,882,011 $ 9,855,762 $ 24,156,657 $2,869 Shares issued as reinvestment of dividends 548,207 2,637,633 3,013,322 -- Shares redeemed (21,582,756) (14,123,581) (13,368,656) -- ------------ ------------ ------------ ------ Net increase (decrease) in shares outstanding $(15,152,538) $ (1,630,186) $ 13,801,323 $2,869 ============ ============ ============ ======
87 ------- Pilgrim Funds -------- NOTES TO FINANCIAL STATEMENTS as of October 31, 2000 (Continued) -------------------------------------------------------------------------------- NOTE 11 -- CHANGE IN FUND'S YEAR-END Effective October 31, 2000 Worldwide Growth, International Core Growth, International SmallCap Growth, Emerging Countries and Asia-Pacific Equity changed their fiscal year-end from June 30 to October 31. Effective October 31, 2000, Global Corporate Leaders, International, Worldwide Emerging Markets, Global Technology, SmallCap Asia Growth, Troika Dialog Russia, Gold, Silver and Global Income changed their fiscal year-end from December 31 to October 31. This change was done to facilitate the administration of the Funds. NOTE 12 -- ILLIQUID SECURITIES Pursuant to guidelines adopted by the Fund's Board of Directors, the following securities have been deemed to be illiquid. The Funds currently limit investment in illiquid securities to 15% of the Fund's net assets, at market value, at time of purchase.
Initial Percent Acquisition of Net Fund Security Shares Date Value Assets ---- -------- ------ ---- ----- ------ SmallCap Asia Growth Asia World Online 124,700 12/15/99 $ 48,175 1.04% Troika Dialog Russia Alfa Cement 38,000 3/25/97 573 0.00 Aviastar 65,000,000 6/25/97 42,193 0.08 Bashinformsvyaz 6,831,400 6/9/97 437,292 0.82 Chelyaben Pfd 450,000 2/26/97 3,150 0.01 Chelyabinskvyazinform 24,610 12/9/96 553,725 1.03 Moscow RegionElectrosvyaz 1,100 10/11/00 220,000 0.41 Gostinny Dvor 7,000 10/6/97 313 0.00 Irkutskelektrosviaz 270,000 2/17/97 143,100 0.27 Komienergo 5,500,000 8/5/97 21 0.00 Komitek Oil Co. 21 7/9/97 9 0.00 Krasnoyarskelectrosviaz 46,000 7/2/97 82,800 0.15 Lensvyaz 9,500 2/14/97 57,950 0.11 Megionneftegaz 96,982 2/14/97 242,455 0.45 Moscow City Telephone Network Pfd 189,500 8/16/97 255,825 0.48 Novosibirsk Telephone 20,383 7/17/97 224,213 0.42 Novosibirskelectrosvyaz 20,000 4/29/97 29,000 0.05 Permenergo Pfd 24,600 8/15/97 7,704 0.01 Purneftegaz 26,070 8/15/00 59,961 0.11 Rostov Region Electrosvyaz 238,125 1/27/00 228,600 0.43 Sakhalinmorneftegaz 180,300 8/16/00 766,275 1.43 Samarasvyazinform Pfd 9,300 11/20/96 88,350 0.16 Samarasvyazinform 28,000 8/1/96 1,008,000 1.88 Samson 23,800 7/9/97 168 0.00 Smolensksvyazinform Pfd 100,000 8/6/97 2,610 0.01 St Petersburg Telephone Pfd 110,000 10/3/97 20,900 0.04 St Petersburg Telephone 350,000 2/17/97 175,000 0.33 Sverdlovskenergo 1,335,000 6/18/96 54,735 0.10 Trade House Gum 235,000 2/16/00 340,750 0.64 Trade House Gum ADR 10,000 2/16/00 29,000 0.05 Transneft Pfd 1,800 7/27/97 185 0.00 Tyumentelecom 214,000 3/5/97 139,100 0.26 Tyumentelecom Ffd 279,099 2/6/97 27,910 0.05 Udmurtneft Pfd 4,000 1/20/97 80,000 0.15 Uralsvyazinform 10,000,000 8/8/97 113,000 0.21 Uralsvyazinform ADR 42,500 6/17/97 104,588 0.19 Uraltelecom 5,000 6/17/97 23,846 0.04 ---------- ----- $5,563,301 10.37% ========== =====
88 ------- Pilgrim Funds -------- NOTES TO FINANCIAL STATEMENTS as of October 31, 2000 (Continued) -------------------------------------------------------------------------------- NOTE 13 -- FORWARD FOREIGN CURRENCY CONTRACTS AS OF OCTOBER 31, 2000 FOR THE PILGRIM INTERNATIONAL VALUE FUND. Currency In Net to Settlement Exchange Unrealized Purchase Date For Value$ Depreciation -------- ---- --- ------ ------------ British Pound USD GBP 3,131,226 11/1/00 4,498,318 4,543,249 $ 44,931 GBP 1,709,917 11/2/00 2,453,560 2,481,002 27,442 GBP 3,633,747 11/2/00 5,214,064 5,272,382 58,318 Japanese Yen JP4 2,940,951,000 11/10/00 27,313,219 26,952,765 (360,454) Swiss Francs CHF 4,694,527 11/1/00 2,598,688 2,611,554 12,864 CHF 6,711,447 11/2/00 3,718,562 3,733,560 14,998 ---------- $ (201,901) ---------- NOTE 14 -- Foreign Taxes Withheld For the period ended October 31, 2000, the Funds had foreign taxes withheld which have been deducted from dividend income: Worldwide Growth(1) $ 100,499 Global Corporate Leaders(2) 14,581 International Value(3) 5,170,145 International(2) 39,256 International Core Growth(1) -- International SmallCap Growth(1) 101,407 Emerging Markets Value(3) 49,432 Emerging Countries(1) 56,592 Worldwide Emerging Markets(2) 94,237 Global Technology(2) 4,325 Asia-Pacific Equity(1) 15,944 SmallCap Asia Growth(2) 11,503 Troika(2) 7,123 Gold(2) 31,502 Silver(2) 7,763 Global Income(2) -- ---------- (1) For the period July 1, 2000 thru October 31, 2000 (2) For the period January 1, 2000 thru October 31, 2000 (3) For the year ended October 31, 2000 89 ------- Pilgrim Funds ------- NOTES TO FINANCIAL STATEMENTS as of October 31, 2000 (Continued) -------------------------------------------------------------------------------- NOTE 15 -- SUBSEQUENT EVENTS Subsequent to October 31, 2000, the following Funds declared dividends of:
Per Share Fund Name Type Amount Payable Date Record Date --------- ---- ------ ------------ ----------- Worldwide Growth Class A STCG $ 0.8196 November 20, 2000 November 15, 2000 Class B STCG $ 0.9178 November 20, 2000 November 15, 2000 Class C STCG $ 0.8161 November 20, 2000 November 15, 2000 Class Q STCG $ 0.9444 November 20, 2000 November 15, 2000 Class A LTCG $ 0.2542 November 20, 2000 November 15, 2000 Class B LTCG $ 0.2846 November 20, 2000 November 15, 2000 Class C LTCG $ 0.2531 November 20, 2000 November 15, 2000 Class Q LTCG $ 0.2929 November 20, 2000 November 15, 2000 International Core Growth Class A STCG $ 0.1544 November 20, 2000 November 15, 2000 Class B STCG $ 0.1540 November 20, 2000 November 15, 2000 Class C STCG $ 0.1546 November 20, 2000 November 15, 2000 Class Q STCG $ 0.1606 November 20, 2000 November 15, 2000 Class A LTCG $ 0.8903 November 20, 2000 November 15, 2000 Class B LTCG $ 0.8881 November 20, 2000 November 15, 2000 Class C LTCG $ 0.8915 November 20, 2000 November 15, 2000 Class Q LTCG $ 0.9529 November 20, 2000 November 15, 2000 Class A NII $ 0.4099 November 20, 2000 November 15, 2000 Class B NII $ 0.3146 November 20, 2000 November 15, 2000 Class C NII $ 0.3320 November 20, 2000 November 15, 2000 Class Q NII $ 0.4177 November 20, 2000 November 15, 2000 International SmallCap Growth Class A STCG $ 0.9984 November 20, 2000 November 15, 2000 Class B STCG $ 1.0530 November 20, 2000 November 15, 2000 Class C STCG $ 0.9665 November 20, 2000 November 15, 2000 Class Q STCG $ 1.0572 November 20, 2000 November 15, 2000 Class A LTCG $ 1.4849 November 20, 2000 November 15, 2000 Class B LTCG $ 1.5661 November 20, 2000 November 15, 2000 Class C LTCG $ 1.4375 November 20, 2000 November 15, 2000 Class Q LTCG $ 1.5724 November 20, 2000 November 15, 2000 Class A NII $ 0.2335 November 20, 2000 November 15, 2000 Class B NII $ 0.0716 November 20, 2000 November 15, 2000 Class C NII $ 0.0916 November 20, 2000 November 15, 2000 Class Q NII $ 0.2461 November 20, 2000 November 15, 2000 Asia Pacific Equity Class A NII $ 0.0932 November 20, 2000 November 15, 2000 Class B NII $ 0.0523 November 20, 2000 November 15, 2000 Class C NII $ 0.0854 November 20, 2000 November 15, 2000
90 ------- Pilgrim Funds ------- NOTES TO FINANCIAL STATEMENTS as of October 31, 2000 (Continued) --------------------------------------------------------------------------------
Per Share Fund Name Type Amount Payable Date Record Date --------- ---- ------ ------------ ----------- International Value All Classes STCG $ 0.5311 November 20, 2000 November 15, 2000 All Classes LTCG $ 1.3496 November 20, 2000 November 15, 2000 Class A NII $ 0.1419 November 20, 2000 November 15, 2000 Class B NII $ 0.0278 November 20, 2000 November 15, 2000 Class C NII $ 0.0366 November 20, 2000 November 15, 2000 Class Q NII $ 0.1446 November 20, 2000 November 15, 2000 Emerging Markets Value All Classes STCG $ 0.9118 November 20, 2000 November 15, 2000 All Classes LTCG $ 1.5850 November 20, 2000 November 15, 2000 Class A NII $ 0.1568 November 20, 2000 November 15, 2000 Class B NII $ 0.0935 November 20, 2000 November 15, 2000 Class C NII $ 0.0842 November 20, 2000 November 15, 2000 Global Corporate Leaders All Classes STCG $ 0.0738 November 20, 2000 November 15, 2000 All Classes LTCG $ 0.9588 November 20, 2000 November 15, 2000 International All Classes STCG $ 0.4583 November 20, 2000 November 15, 2000 All Classes LTCG $ 0.4764 November 20, 2000 November 15, 2000 Gold All Classes NII $ 0.0034 November 20, 2000 November 15, 2000 Silver All Classes NII $ 0.0262 November 20, 2000 November 15, 2000
NII -- Net investment income STCG -- Short-term capital gain LTCG -- Long-term capital gain On November 29, 2000, a proxy statement was filed with the Securities and Exchange Commission ("SEC") for the reorganization of Global Corporate Leaders into Worldwide Growth. On November 30, 2000, a proxy statement was filed with the SEC for the reorganization of Silver into Gold. On December 1, 2000, a proxy statement was filed with the SEC for the reorganization of Global Income into Strategic Income. On December 4, 2000, a proxy statement was filed with the SEC for the reorganization of Emerging Markets Value and Worldwide Emerging Markets into Emerging Countries. On December 13, 2000 a proxy statement was filed with the SEC for the reorganization of SmallCap Asia Growth into Asia-Pacific Equity. On December 15, 2000 a proxy was filed with the SEC for the reorganization of Global Technology into ING Global Information Technology Fund. Upon approval, proxy statements will be mailed to the shareholders. On November 3, 2000, ING Pilgrim Investments, Inc. notified HSBC Asset Management (America) Inc. and HSBC Asset Management (Hong Kong) Limited (collectively, HSBC) of its intention to terminate HSBC as sub-advisor to the Asia-Pacific Equity fund effective January 1, 2001. Beginning January 2, 2001, ING Pilgrim Investments, Inc. will advise the Fund directly. On November 3, 2000, ING Pilgrim Investments, Inc. notified Troika Dialog Asset Management ("Troika") of its intention to terminate Troika as sub-advisor to the Troika Dialog Asset Management Fund effective January 1, 2001. Beginning January 2, 2001, ING Pilgrim Investments, Inc. will advise the Fund directly. On November 3, 2000, Insinger Asset Management (Asia), Inc. notified ING Pilgrim Investments, Inc. of its intention to terminate its sub-advisor relationship with SmallCap Asia Fund effective January 1, 2001. Beginning January 2, 2001, ING Pilgrim Investment, Inc. will advise the Fund directly. 91 Pilgrim Worldwide Growth Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 -------------------------------------------------------------------------------- Shares Value -------------------------------------------------------------------------------- COMMON STOCKS: 89.79% BERMUDA: 0.54% 101,050 @ Tycom Ltd. ADR $3,385,175 ---------- Total Bermuda 3,385,175 ---------- BRAZIL: 0.48% 72,711 Tele Norte Leste Participacoes SA ADR 1,608,731 19,300 Telecomunicacoes Brasileiras SA ADR 1,413,725 ---------- Total Brazil 3,022,456 ---------- CANADA: 4.89% 117,450 Abitibi-Consolidated Inc. 1,027,687 67,000 Alberta Energy Co., Ltd. 2,467,267 138,800 @ Anderson Exploration Ltd. 2,544,288 18,400 @ Ballard Power Systems, Inc. 1,978,000 125,800 @ Biovail Corp. 5,291,463 145,500 Bombardier Inc. 2,281,326 28,500 @ C-Mac Industries Inc. 1,581,750 66,700 @ Celestica Inc. 4,750,874 13,500 Magna Int'l, Inc. 603,633 155,400 Nortel Networks Corp. 7,070,700 46,400 @ Precision Drilling Corp. 1,328,200 ---------- Total Canada 30,925,188 ---------- CHINA: 0.37% 10,700,000 PetroChina Co., Ltd. 2,250,032 5,000 PetroChina Co., Ltd. ADR 105,938 ---------- Total China 2,355,970 ---------- DENMARK: 0.55% 16,300 Novo-Nordisk A/S 3,457,210 ---------- Total Denmark 3,457,210 ---------- FINLAND: 0.40% 45,100 Elisa Communications OYJ 1,251,494 29,250 Nokia OYJ ADR 1,250,437 ---------- Total Finland 2,501,931 ---------- FRANCE: 5.35% 48,300 Accor SA 1,955,099 44,000 Alcatel SA 2,684,632 44,100 Aventis SA 3,180,978 8,900 Groupe Danone 1,244,659 30,700 France Telecom 3,209,610 98,300 Sanofi-Synthelabo SA 5,171,880 33,700 Schneider Electric SA 2,194,884 76,700 STMicroelectronics NV ADR 3,983,606 84,000 Societe Television Francaise 4,583,460 21,370 Total Fina Elf SA 3,057,492 67,800 @ Vivendi Environnement 2,531,545 ---------- Total France 33,797,845 ---------- GERMANY: 1.04% 71,500 Dresdner Bank AG 2,979,139 52,800 E.ON AG 2,682,989 21,500 Intershop Communications 930,490 ---------- Total Germany 6,592,618 ---------- GREECE: 0.44% 74,600 Alpha Bank SA 2,757,232 ---------- Total Greece 2,757,232 ---------- HONG KONG: 1.22% 330,000 Cheung Kong (Holdings) 3,649,506 325,800 @ Hutchison Whampoa 4,052,135 ---------- Total Hong Kong 7,701,641 ---------- IRELAND: 0.92% 237,500 Allied Irish Banks PLC 2,418,511 64,900 @ Elan Corp PLC ADR 3,370,744 ---------- Total Ireland 5,789,255 ---------- ISRAEL: 0.75% 80,500 Teva Pharmaceutical Industries ADR 4,759,563 ---------- Total Israel 4,759,563 ---------- ITALY: 1.69% 279,600 Alleanza Assicurazioni SpA 3,708,509 346,400 Edison SpA 3,262,902 284,600 Riunione Adriatica di Sicurta SpA 3,736,186 ---------- Total Italy 10,707,597 ---------- JAPAN: 6.37% 90,000 Daikin Industries 1,740,366 40,600 Fanuc 3,646,428 118,000 Fujitsu Ltd. 2,102,296 15,600 @ Itochu Techno Science 3,708,601 48,000 Konami Co. 4,047,106 185,000 Mitsui Fudosan 2,241,397 25,100 Murata Manufacturing Co., Ltd. 3,004,225 88,000 NEC Corp. 1,677,496 198,000 Nippon Sheet Glass 3,012,235 131 Nippon Telegraph & Telephone Corp. 1,192,164 119,000 Nomura Securities Co., Ltd. 2,524,722 89 NTT Docomo Inc. 2,194,107 104,000 Pioneer Corp. 3,221,555 398,000 Sanyo Electric Co., Ltd. 3,027,448 36,700 Sony Corp. 2,932,906 ---------- Total Japan 40,273,052 ---------- MEXICO: 0.14% 16,200 Telefonos de Mexico SA ADR 873,787 ---------- Total Mexico 873,787 ---------- NETHERLANDS: 3.10% 116,800 Koninklijke Ahold NV 3,392,758 45,200 Akzo Nobel NV 2,057,839 54,050 @ ASM Lithography Holding NV ADR 1,503,266 58,865 Konnklijke Phillips Electronics ADR 2,350,921 53,400 Numico NV 2,496,871 36,700 @ Qiagen NV 1,572,753 52,600 Royal Dutch Petroleum Co. 3,119,637 61,700 Unilever NV 3,094,396 ---------- Total Netherlands 19,588,441 ---------- PORTUGAL: 0.77% 548,800 Portugal Telecom 4,889,975 ---------- Total Portugal 4,889,975 ---------- SINGAPORE: 0.84% 97,000 Flextronics International 3,686,000 162,000 Singapore Airlines Ltd. 1,623,413 ---------- Total Singapore 5,309,413 ---------- SOUTH KOREA: 0.23% 64,720 Korea Electric Power Corp. 1,445,176 ---------- Total South Korea 1,445,176 ---------- See Accompanying Notes to Financial Statements 92 Pilgrim Worldwide Growth Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued) -------------------------------------------------------------------------------- Shares Value -------------------------------------------------------------------------------- SPAIN: 1.32% 183,000 Altadis SA $ 2,740,937 332,600 Banco Santander Central Hispano SA 3,223,232 145,700 Endesa SA 2,373,908 501 Telefonica SA ADR 29,027 ----------- Total Spain 8,367,104 ----------- SWEDEN: 1.34% 131,000 Telefonaktiebolaget LM Ericsson ADR 1,817,625 303,900 Nordic Baltic Holding AB 2,281,006 278,100 Svenska Handelsbanken 4,369,535 ----------- Total Sweden 8,468,166 ----------- SWITZERLAND: 1.37% 1,600 Nestle SA 3,315,531 17,200 UBS AG 2,382,510 6,100 Zurich Financial Services AG 2,952,270 ----------- Total Switzerland 8,650,311 ----------- UNITED KINGDOM: 8.66% 214,300 BAA PLC 1,781,677 421,042 BAE Systems PLC 2,391,715 66,900 Barclays PLC 1,914,191 687,800 BG Group PLC 2,754,378 643,600 Billiton PLC 2,455,975 171,300 Cable & Wireless PLC 2,423,339 949,400 Centrica PLC 3,264,749 185,000 CMG PLC 3,054,683 330,500 Diageo PLC 3,119,399 287,600 @ Energis PLC 2,459,942 268,000 HSBC Holdings 3,728,427 687,800 @ Lattice Group PLC 1,467,005 186,600 Logica PLC 5,520,534 22,800 Reuters Group PLC ADR 2,687,550 154,400 Rio Tinto PLC 2,497,896 208,100 Royal Bank of Scotland Group PLC 4,671,051 140,000 Sema Group PLC 1,767,256 398,400 Shell Transport & Trading Co. 3,205,333 13,200 @ Shire Pharmaceuticals PLC ADR 829,950 649,100 Vodafone Group PLC 2,700,644 ----------- Total United Kingdom 54,695,694 ----------- UNITED STATES: 47.01% 71,800 Adobe Systems, Inc. 5,461,288 158,000 AES Corp. 8,927,000 18,100 @ Amdocs Ltd. 1,173,106 123,300 America Online, Inc. 6,218,019 63,200 @ Applied Micro Circuits Corp. 4,826,900 74,800 @ Ariba Inc. 9,452,850 246,680 @ AT&T - Liberty Media Corp. 4,440,240 32,100 Baker Hughes, Inc. 1,105,765 55,200 Baxter Int'l, Inc. 4,536,750 57,192 @ BEA Systems Inc. 4,103,526 55,300 Bristol-Myers Squibb Co. 3,369,844 57,541 Chase Manhattan Corp. 2,618,116 107,500 @ CIENA Corp. 11,300,938 183,700 @ Cisco Systems, Inc. 9,896,838 250,066 Citigroup, Inc. 13,159,723 158,000 Comcast Corp. 6,438,500 59,400 @ Comverse Technology Inc. 6,637,950 109,899 Corning, Inc. 8,407,273 106,500 EMC Corp-Mass 9,485,156 168,000 Enron Corp. 13,786,500 62,800 @ Extreme Networks 5,208,475 68,200 @ Fannie Mae 5,251,400 160,703 Gap, Inc. 4,148,146 124,400 @ Genentech, Inc. 10,263,000 158,000 HCA -- The Healthcare Co. 6,310,125 33,600 @ Idec Pharmaceuticals Corp. 6,589,800 116,619 @ JDS Uniphase Corp. 9,489,871 45,200 Juniper Networks, Inc. 8,814,000 81,040 Merck & Co., Inc. 7,288,535 77,443 @ Microsoft Corp. 5,333,887 259,400 @ Oracle Corp. 8,560,200 129,172 Pfizer, Inc. 5,578,616 80,500 @ Qualcomm, Inc. 5,241,305 286,700 Santa Fe Int'l Corp. 10,464,550 55,456 Schering-Plough Corp. 2,866,382 78,100 Schlumberger Ltd. 5,945,362 139,200 @ Siebel Systems, Inc. 14,607,300 106,500 @ Sun Microsystems, Inc. 11,808,187 41,000 Transocean Sedco Forex, Inc. 2,173,000 76,287 UnitedHealth Group, Inc. 8,343,891 76,788 @ Veritas Software Corp. 10,828,307 180,800 @ Weatherford Int'l, Inc. 6,599,200 ----------- Total United States 297,059,821 ----------- Total Common Stocks (Cost $519,946,830) 567,374,621 ----------- PREFERRED STOCKS: 0.84% BRAZIL: 0.38% 382,810 Banco Bradesco SA $ 2,366,243 ----------- Total Brazil 2,366,243 ----------- GERMANY: 0.46% 14,400 SAP AG 2,902,335 ----------- Total Germany 2,902,335 ----------- Total Preferred Stocks (Cost $6,218,446) 5,268,578 ----------- Total Long-Term Investments (Cost $526,165,276) 572,643,199 ----------- Principal Amount Value -------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS: 7.94% COMMERCIAL PAPER: 7.94% $25,200,000 Federal National Mortgage Association Notes, 6.430%, due 11/02/00 $ 25,195,499 25,000,000 Nestle Capital Corp. Years 1 & 2, 6.350%, due 11/01/00 25,000,000 ------------ Total Short-Term Investments (Cost $50,195,499) 50,195,499 ------------ Total Investments in Securities (Cost $ 576,360,775)* 98.57% $622,838,698 Other Assets and Liabilities-Net 1.43% 9,052,133 ------ ------------ Net Assets 100.00% $631,890,831 ====== ============ ---------- @ Non-income producing security ADR -- American Depository Receipt * Cost for federal income tax purposes is $578,375,834. Net unrealized appreciation consists of: Gross Unrealized Appreciation $ 72,403,674 Gross Unrealized Depreciation (27,940,810) ------------ Net Unrealized Appreciation $ 44,462,864 ============ See Accompanying Notes to Financial Statements 93 Pilgrim Worldwide Growth Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued) -------------------------------------------------------------------------------- Percentage of Industry Net Assets -------- ---------- Aerospace/Defense 0.38% Airlines 0.26% Auto Parts & Equipment 0.10% Banks 5.65% Beverages 0.49% Biotechnology 2.92% Building Materials 0.75% Chemicals 0.33% Computers 7.88% Diversified Financial Services 3.31% Electric 2.53% Electrical Components & Equipment 0.48% Electronics 3.28% Energy -- Alternate Sources 0.31% Engineering & Construction 0.28% Environmental Control 0.40% Food 2.14% Forest Products & Paper 0.16% Gas 1.18% Hand/Machine Tools 0.35% Healthcare -- Products 0.72% Healthcare -- Services 2.32% Holding Companies -- Diversified 0.64% Home Furnishings 0.97% Insurance 1.65% Internet 2.63% Lodging 0.31% Media 2.87% Mining 0.78% Miscellaneous Manufacturing 0.79% Oil & Gas Producers 4.86% Oil & Gas Services 2.16% Pharmaceuticals 7.15% Pipelines 2.18% Real Estate 0.93% Retail 0.66% Semiconductors 1.39% Software 7.12% Telecommunications 16.88% Tobacco 0.44% Short-Term Investments 7.94% Other Assets and Liabilities, Net 1.43% ------ NET ASSETS 100.00% ====== See Accompanying Notes to Financial Statements 94 Pilgrim Global Corporate Leaders Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 -------------------------------------------------------------------------------- Shares Value -------------------------------------------------------------------------------- COMMON STOCKS: 89.98% AUSTRALIA: 1.72% 27,800 @ News Corp. $ 290,796 ---------- Total Australia 290,796 ---------- CANADA: 1.82% 4,200 Four Seasons Hotels, Inc. 306,854 ---------- Total Canada 306,854 ---------- FRANCE: 4.94% 2,630 Axa 348,164 1,020 Cap Gemini 162,728 4,500 Vivendi 323,444 ---------- Total France 834,336 ---------- GERMANY: 5.29% 2,211 DaimlerChrysler AG 101,881 2,004 Deutsche Bank AG 164,073 1,500 @ SAP AG 302,326 6,500 Volkswagen AG 324,721 ---------- Total Germany 893,001 ---------- JAPAN: 11.13% 9,000 Canon, Inc. 357,146 6,000 Ito Yokado Co. 271,090 18,000 NEC Corp. 343,124 129,000 @ Nippon Steel Corp. 209,256 37 @ Nippon Telephone & Telegraph Corp. 336,718 1,600 Sony Corp. 127,865 3,000 Tokyo Electron 234,798 ---------- Total Japan 1,879,997 ---------- NETHERLANDS: 4.98% 4,000 @ Aegon NV 158,858 12,500 Kon Ahold NV 363,095 5,400 Royal Dutch Petroleum 320,267 ---------- Total Netherlands 842,220 ---------- SWEDEN: 1.58% 20,000 @ LM Ericsson 266,205 ---------- Total Sweden 266,205 ---------- SWITZERLAND: 7.89% 174 Nestle SA 360,564 264 @ Novartis AG 400,494 29 @ Roche Holdings AG 264,898 2,220 @ UBS AG 307,510 ---------- Total Switzerland 1,333,466 ---------- UNITED KINGDOM: 8.37% 41,000 @ BP Amoco 347,713 22,700 @ British Telecom 266,127 31,300 @ Diageo 295,423 19,800 @ Rio Tinto 320,326 44,500 @ Vodafone Group 185,147 ---------- Total United Kingdom 1,414,736 ---------- UNITED STATES: 42.26% 13,800 Alcoa Inc. 395,888 8,400 American Express Co. 504,000 5,300 American Home Products Corp. 336,550 5,437 American Int'l Group Inc. 532,826 1 @ Avaya, Inc. 9 9,800 @ Cisco Systems, Inc. 527,975 10,267 Citigroup, Inc. 540,283 5,100 Coca Cola Co. 307,912 10,700 Walt Disney Co. 383,194 4,100 Exxon Mobil Corp. 365,669 8,400 General Electric Co. 460,425 9,200 Intel Corp. 414,000 9,200 Interpublic Group Cos., Inc. 395,025 5,300 Lucent Technologies, Inc. 123,556 4,000 @ Microsoft Corp. 275,625 7,800 Morgan Stanley Dean Witter & Co. 626,438 3,700 Procter & Gamble Co. 264,319 2,100 Schlumberger, Ltd. 159,863 3,750 Unilever NV 190,547 7,400 Wal Mart Stores, Inc. 335,775 ---------- Total United States 7,139,879 ---------- Total Common Stocks (Cost $11,473,931) 15,201,490 ---------- Total Long Term Investments (Cost $11,473,931) 15,201,490 ---------- Principal Amount Value -------------------------------------------------------------------------------- SHORT TERM INVESTMENTS: 5.85% U.S. TREASURY OBLIGATIONS: 5.85% $1,000,000 U.S. Treasury Bills 6.120%, due 1/11/2001 $ 987,930 ----------- Total Short-Term Investments (Cost $987,930) 987,930 ----------- Total Investments in Securities (Cost $ 12,461,861)* 95.83% $16,189,420 Other Assets and Liabilities-Net 4.17% 704,073 ------ ----------- Net Assets 100.00% $16,893,493 ====== =========== ---------- @ Non-income producing security * Cost for federal income tax purposes is the same as for financial statement purposes. Net unrealized appreciation consists of: Gross Unrealized Appreciation $ 4,247,649 Gross Unrealized Depreciation (520,090) ----------- Net Unrealized Appreciation $ 3,727,559 =========== See Accompanying Notes to Financial Statements 95 Pilgrim Global Corporate Leaders Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued) -------------------------------------------------------------------------------- Percentage of Industry Net Assets -------- ---------- Advertising 2.34% Auto Manufacturers 2.53% Banks 2.79% Beverages 3.57% Commercial Services 1.91% Computers 0.96% Cosmetics/Personal Care 1.56% Diversified Financial Services 9.89% Electronics 2.03% Food 5.41% Home Furnishings 0.76% Insurance 6.16% Iron/Steel 1.24% Lodging 1.82% Media 3.99% Mining 4.24% Miscellaneous Manufacturing 2.73% Office/Business Equipment 2.11% Oil & Gas Producers 6.12% Oil & Gas Services 0.95% Pharmaceuticals 5.93% Retail 3.59% Semiconductors 3.84% Software 3.42% Telecommunications 10.09% Short-Term Investments 5.85% Other Assets & Liabilities, Net 4.17% ------ NET ASSETS 100.00% ====== See Accompanying Notes to Financial Statements 96 Pilgrim International Value Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 -------------------------------------------------------------------------------- Shares Value -------------------------------------------------------------------------------- COMMON STOCK: 96.15% BRAZIL: 8.00% 805,500 Banco Bradesco SA ADR $31,579,899 3,958,900 Centrais Eletricas Brasileiras SA ADR 35,161,762 1,224,200 Cia de Bebidas das Americas ADR 27,621,013 1,472,300 Petroleo Brasileiro SA ADR 39,044,660 532,786 Tele Norte Leste Participacoes SA ADR 11,787,890 191,000 Telecomunicacoes Brasileiras SA ADR 13,990,750 ----------- Total Brazil 159,185,974 ----------- CHINA: 1.17% 110,680,000 PetroChina Co., Ltd. 23,274,163 ----------- Total China 23,274,163 ----------- DENMARK: 2.05% 282,180 Den Danske Bank 40,865,340 ----------- Total Denmark 40,865,340 ----------- FRANCE: 5.49% 549,500 Alcatel SA 33,527,394 225,800 Eridania Beghin-Say 17,369,806 1,130,100 Michelin (C.G.D.E.) 32,702,011 179,492 Total Fina Elf SA 25,680,642 ----------- Total France 109,279,853 ----------- GERMANY: 6.93% 4,322,900 BASF AG 32,667,231 3,169,000 Bayerische Motoren Werke AG 38,016,964 1,092,300 Deutsche Telekom 41,016,483 515,200 E.ON AG 26,179,470 ----------- Total Germany 137,880,148 ----------- HONG KONG: 2.94% 17,970,586 First Pacific Co. 4,055,421 2,980,695 Jardine Matheson Holdings, Ltd. 16,542,857 6,146,000 Swire Pacific, Ltd. 37,905,193 ----------- Total Hong Kong 58,503,471 ----------- IRELAND: 2.92% 2,012,800 Allied Irish Banks PLC 20,496,754 1,133,300 Bank of Ireland 37,526,267 ----------- Total Ireland 58,023,021 ----------- ITALY: 3.80% 10,687,800 ENI-Ente Nazionale Idrocarburi SpA 57,864,501 1,529,200 Telecom Italia SpA 17,713,328 ----------- Total Italy 75,577,829 ----------- JAPAN: 15.30% 1,462,533 Bank of Tokyo-Mitsubishi, Ltd. 19,485,365 654,000 Daiichi Pharmaceutical Co., Ltd. 18,580,397 2,997,000 Daiwa House Industry Co., Ltd. 18,814,508 1,878,900 Hitachi, Ltd. 20,146,754 3,700 Japan Tobacco, Inc. 25,431,884 3,249,000 Komatsu, Ltd. 14,411,548 875,000 Matsushita Electric Industrial Co., Ltd. 25,420,428 10,636,000 Mitsubishi Heavy Industries, Ltd. 41,329,461 7,603,000 Nippon Mitsubishi Oil Corp. 40,901,444 3,099 Nippon Telegraph & Telephone Corp. 28,202,420 4,674,400 Tokio Marine & Fire Insurance Co. 51,664,084 ----------- Total Japan 304,388,293 ----------- MEXICO: 1.86% 684,060 Telefonos de Mexico SA ADR 36,896,486 ----------- Total Mexico 36,896,486 ----------- NETHERLANDS: 0.75% 328,000 Akzo Nobel N.V. 14,932,990 ----------- Total Netherlands 14,932,990 ----------- NEW ZEALAND: 0.75% 6,751,466 Telecom Corp. of New Zealand, Ltd. 14,941,184 ----------- Total New Zealand 14,941,184 ----------- PORTUGAL: 1.65% 3,684,816 Portugal Telecom SA 32,832,830 ----------- Total Portugal 32,832,830 ----------- SINGAPORE: 1.35% 2,285,191 DBS Group Holdings, Ltd. 26,933,584 ----------- Total Singapore 26,933,584 ----------- SOUTH AFRICA: 1.06% 765,000 De Beers Consolidated Mines, Ltd. 21,042,887 ----------- Total South Africa 21,042,887 ----------- SOUTH KOREA: 1.77% 1,055,000 @ Korea Electric Power Corp. ADR 12,857,813 120,000 @ Korea Telecom ADR 4,425,000 1,131,600 Pohang Iron & Steel Co. ADR 17,893,425 ----------- Total South Korea 35,176,238 ----------- SPAIN: 2.91% 2,002,000 Banco Bilbao Vizcaya Argentaria SA 12,492,480 2,096,000 Telefonica SA 39,966,633 294,000 Union Electrica Fenosa SA 5,436,355 ----------- Total Spain 57,895,468 ----------- SWITZERLAND: 5.26% 17,900 Nestle SA 37,092,512 165,700 Swisscom AG 42,079,467 52,476 Zurich Financial Services AG 25,397,379 ----------- Total Switzerland 104,569,358 ----------- UNITED KINGDOM: 29.46% 980,000 Allied Domecq PLC 5,065,626 6,809,000 BAE Systems PLC 38,678,294 1,265,000 BOC Group PLC 17,620,327 9,121,200 British American Tobacco PLC 63,922,142 3,645,100 British Telecommunications PLC 42,733,948 2,436,507 Cadbury Schweppes PLC 15,060,156 23,251,000 Corus Group PLC 20,916,332 6,159,012 Diageo PLC 58,131,370 2,945,600 HSBC Holdings PLC 40,979,305 3,478,800 Imperial Chemical Industries PLC 21,300,712 5,429,000 @ Innogy Holdings PLC 15,754,408 5,429,000 International Power PLC 21,898,625 19,303,898 Invensys PLC 46,074,765 14,994,750 Marks & Spencer PLC 41,772,713 1,633,500 Reckitt Benckiser PLC 21,473,338 1,330,000 Rolls-Royce PLC 3,454,274 2,824,809 Royal & Sun Alliance Insurance Group PLC 20,103,900 6,267,100 Safeway PLC 26,052,143 1,835,400 South African Breweries PLC 11,051,750 7,959,000 Unilever PLC 53,843,039 ----------- Total United Kingdom 585,887,167 ----------- See Accompanying Notes to Financial Statements 97 Pilgrim International Value Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued) -------------------------------------------------------------------------------- Shares Value -------------------------------------------------------------------------------- VENEZUELA: 0.73% 759,700 Compania Anonima Nacional Telefonos de Venezuela ADR $ 14,434,300 ------------- Total Venezuela 14,434,300 ------------- Total Common Stocks (Cost $1,849,228,137) 1,912,520,584 ------------- Total Long Term Investments (Cost $1,849,228,137) 1,912,520,584 ------------- Principal Amount Value -------------------------------------------------------------------------------- SHORT TERM INVESTMENTS: 6.29% Repurchase Agreement: 6.29% $125,011,000 State Street Bank & Trust Repurchase Agreement, 6.450% due 11/01/00 (Collateralized by $19,415,000 U.S. Treasury Notes, 7.500% Due 02/15/05, Value $19,807,851, $52,798,000 U.S. Treasury Notes, 7.500% Due 02/15/05, Value $53,854,950, $52,798,000 U.S. Treasury Notes, 7.500% Due 02/15/05, Value $53,854,950) $ 125,011,000 -------------- Total Short-Term Investments (Cost $125,011,000) 125,011,000 -------------- Total Investments in Securities (Cost $ 1,974,239,137)* 102.44% $2,037,531,584 Other Assets and Liabilities-Net -2.44% (48,615,630) ------- -------------- Net Assets 100.00% $1,988,915,954 ======= ============== ---------- @ Non-income producing security ADR -- American Depository Receipt * Cost for federal income tax purposes is $1,974,255,211. Net unrealized appreciation consists of: Gross Unrealized Appreciation $ 232,136,496 Gross Unrealized Depreciation (168,860,123) -------------- Net Unrealized Appreciation $ 63,276,373 ============== See Accompanying Notes to Financial Statements 98 Pilgrim International Value Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued) -------------------------------------------------------------------------------- Percentage of Industry Net Assets -------- ---------- Aerospace/Defense 2.12% Agriculture 0.87% Auto Manufacturers 1.91% Auto Parts & Equipment 1.65% Banks 11.58% Beverages 5.12% Chemicals 4.35% Electric 4.58% Electrical Components & Equipment 1.01% Food 6.64% Holding Companies-Diversified 2.94% Home Builders 0.95% Home Furnishings 1.28% Household Products/Wares 1.08% Insurance 4.89% Iron/Steel 1.95% Machinery-Construction & Mining 0.73% Mining 1.06% Miscellaneous Manufacturing 5.71% Oil & Gas Producers 9.39% Pharmaceuticals 0.93% Retail 2.10% Telecommunications 18.83% Tobacco 4.49% Short-Term Investments 6.28% Other Assets and Liabilities, Net -2.44% ------ NET ASSETS 100.00% ====== See Accompanying Notes to Financial Statements 99 Pilgrim International Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 -------------------------------------------------------------------------------- Shares Value -------------------------------------------------------------------------------- COMMON STOCKS: 87.95% AUSTRALIA: 0.58% 78,900 Foster's Brewing Group Ltd. $ 178,723 --------- Total Australia 178,723 --------- BELGIUM: 1.66% 16,700 Fortis (B) 511,595 --------- Total Belgium 511,595 --------- CANADA: 2.49% 20,000 @ Industrial-Alliance Life Insurance Co. 441,899 33,400 Placer Dome Inc. 271,375 5,600 @ Mediagrif Interactive Technologies Inc. 54,075 --------- Total Canada 767,349 --------- DENMARK: 1.96% 1,530 Novo-Nordisk A/S 324,511 5,900 Tele Danmark A/S 279,206 --------- Total Denmark 603,717 --------- FRANCE: 10.03% 5,100 Alcatel SA 311,173 3,450 Aventis SA 245,924 500 Aventis SA 36,066 2,430 Axa 321,687 2,900 France Telecom 303,189 6,100 Infogrames Entertainment 127,600 3,500 Rexel SA 243,548 6,280 Societe Generale 356,524 8,044 Total Fina Elf SA ADR 576,152 7,930 Vivendi SA 569,980 --------- Total France 3,091,843 --------- GERMANY: 3.07% 1,910 Allianz AG 649,141 3,611 Deutsche Bank AG 297,237 --------- Total Germany 946,378 --------- HONG KONG: 3.50% 27,500 Hang Seng Bank 323,519 644,000 @ I-CABLE Communications Ltd. 235,338 226,000 Mandarin Oriental 144,640 546,000 South China Morning Post 374,548 --------- Total Hong Kong 1,078,045 --------- IRELAND: 0.75% 29,500 @ Ryanair Holdings PLC 231,562 --------- Total Ireland 231,562 --------- ISRAEL: 1.05% 5,500 Teva Pharmaceutical Industries ADR 325,359 --------- Total Israel 325,359 --------- ITALY: 0.97% 10,000 Banca Fideuram SpA 153,766 10,000 Mediolanum SpA 146,553 --------- Total Italy 300,319 --------- JAPAN: 14.83% 106,000 Bunka Shutter 205,948 17,000 Daifuku Co. Ltd. 140,220 11,000 Fujitsu Limited 195,977 3,000 Hoya Corporation 247,995 33,000 Isetan Co. Ltd. 280,356 3,700 Jafco Co. Ltd. 393,346 11,000 Matsushita Electric Industrial Co. 319,571 57 Mizuho Holding Inc. 438,281 2,500 Murata Manufacturing Co. Ltd. 299,226 22 Nippon Telegraph & Telephone Corp. 200,211 25,000 Nomura Securities Co. Ltd. 530,404 3,700 Otsuka Kagu 301,792 4,400 Sony Corporation 351,629 59,000 Sumitomo Realty & Developmnt 338,487 43,000 Toto Ltd. 326,298 --------- Total Japan 4,569,741 --------- MEXICO: 0.69% 136,800 Banacci O 212,585 --------- Total Mexico 212,585 --------- NETHERLANDS: 8.40% 14,600 ABN Amro Holding NV 338,235 11,100 Koninklijke Ahold NV 322,428 10,515 Koninklijke Philips Electronics NV 413,225 5,000 Royal Dutch Petroleum Co. 296,543 13,500 Unilever NV 677,056 8,400 Unique Int'l NV 171,078 20,500 @ United Pan-Europe Communications NV ADR 369,000 --------- Total Netherlands 2,587,565 --------- NEW ZEALAND: 0.97% 417,000 Fletcher Challenge Building 297,688 --------- Total New Zealand 297,688 --------- NORWAY: 0.79% 17,700 Petroleum Geo-Services A/S 244,164 --------- Total Norway 244,164 --------- PORTUGAL: 2.39% 100,005 Portugal Telecom 465,118 212,222 Electricidade de Portugal SA 271,566 --------- Total Portugal 736,684 --------- SWEDEN: 3.39% 212,222 Swedish Match AB 728,482 23,800 Telefonaktiebolaget LM Ericsson 316,784 --------- Total Sweden 1,045,266 --------- SWITZERLAND: 9.71% 2,460 Charles Voegele Holding AG 462,550 179 Nestle SA 370,925 396 Novartis 600,741 64 Roche Holding AG 584,602 243 Swiss Re 479,214 1,430 UBS AG 198,081 610 Zurich Financial Services AG 295,227 --------- Total Switzerland 2,991,340 --------- TAIWAN: 0.77% 10,500 @ Taiwan Semiconductor Manufacturing Co. Ltd. ADR 238,219 --------- Total Taiwan 238,219 --------- See Accompanying Notes to Financial Statements 100 Pilgrim International Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued) -------------------------------------------------------------------------------- Shares Value -------------------------------------------------------------------------------- UNITED KINGDOM: 18.53% 17,700 Barclays PLC $ 506,445 27,700 British Telecommunications PLC 324,747 46,100 Cadbury Schweppes PLC 284,946 20,400 Capita Group PLC 155,397 286,100 Corus Group PLC 257,372 56,500 Diageo PLC 533,271 26,200 Enterprise Oil PLC 207,181 96,300 FKI PLC 249,062 21,600 Glaxo Wellcome PLC 621,794 27,600 Pizzaexpress PLC 264,505 33,100 Provident Financial PLC 422,152 28,200 Reckitt Benckiser PLC 370,706 38,800 Reed Int'l PLC 358,611 15,560 Rio Tinto PLC 251,731 26,500 Scottish & Newcastle PLC 181,485 108,526 Vodafone Group PLC 451,533 36,500 Whitbread PLC 268,770 ---------- Total United Kingdom 5,709,708 ---------- UNITED STATES: 1.42% 1,400 @ Mercury Interactive Corp. 155,356 3,700 Schlumberger Ltd. 281,663 ---------- Total United States 437,019 ---------- Total Common Stocks (Cost $28,060,384) 27,104,869 ---------- PREFERRED STOCKS: 1.44% GERMANY: 1.44% 8,030 Rhoen Klinikum AG 442,581 ---------- Total Germany 442,581 ---------- Total Preferred Stock (Cost $305,872) 442,581 ---------- Long Term Investments (Cost $28,366,256) 27,547,450 ---------- Principal Amount Value -------------------------------------------------------------------------------- SHORT TERM INVESTMENTS: 9.61% U.S. TREASURY OBLIGATIONS: 9.61% $3,000,000 U.S. Treasury Bills 6.120%, due 01/11/01 $ 2,963,790 ----------- Total Short-Term Investments (Cost $2,963,790) 2,963,790 ----------- Total Investments in Securities (Cost $31,330,046) 99.00% $30,511,240 Other Assets and Liabilities-Net 1.00% 306,834 ------ ----------- Net Assets 100.00% $30,818,074 ====== =========== ---------- @ Non-income producing security ADR -- American Depository Receipt * Cost for federal income tax purposes is $31,418,935. Net unrealized depreciation consists of: Gross Unrealized Appreciation $1,783,446 Gross Unrealized Depreciation (2,691,140) ---------- Net Unrealized Depreciation $ (907,694) ========== See Accompanying Notes to Financial Statements 101 Pilgrim International Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued) -------------------------------------------------------------------------------- Percentage of Industry Net Assets -------- ---------- Airlines 0.75% Banks 7.98% Beverages 2.90% Building Materials 1.63% Commercial Services 2.91% Computers 0.64% Diversified Financial Services 5.94% Electric 0.88% Electronics 3.10% Food 5.37% Healthcare-Services 2.24% Home Furnishings 2.18% Household Products/Wares 1.20% Housewares 1.06% Insurance 7.57% Internet 0.18% Iron/Steel 0.84% Lodging 0.47% Machinery-Diversified 0.45% Media 3.14% Mining 1.70% Miscellaneous Manufacturer 0.81% Oil & Gas Producers 3.50% Oil & Gas Services 1.71% Pharmaceuticals 8.89% Real Estate 1.10% Retail 5.12% Semiconductors 0.77% Software 0.92% Telecommunications 9.80% Tobacco 2.36% Venture Capital 1.28% Short-Term Investments 9.61% Other Assets and Liabilities, Net 1.00% ------ NET ASSETS 100.00% ====== See Accompanying Notes to Financial Statements 102 Pilgrim International Core Growth Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 -------------------------------------------------------------------------------- Shares Value -------------------------------------------------------------------------------- COMMON STOCKS: 86.13% BRAZIL: 0.51% 18,868 Tele Norte Leste Participacoes SA ADR $ 417,455 ---------- Total Brazil 417,455 ---------- CANADA: 7.99% 60,100 Abitibi-Consolidated, Inc. 525,875 17,500 Alberta Energy Co., Ltd. 644,435 39,000 @ Anderson Exploration, Ltd. 714,894 5,000 @ Ballard Power Systems, Inc. 537,500 27,000 @ Biovail Corp. 1,135,687 37,500 Bombardier, Inc. 587,971 14,600 @ Celestica, Inc. 1,039,921 3,600 Magna Int'l, Inc. 160,969 19,300 Nortel Networks Corp. 878,150 11,900 @ Precision Drilling Corp. 340,638 ---------- Total Canada 6,566,040 ---------- CHINA: 0.71% 2,770,000 PetroChina Co., Ltd. 582,485 ---------- Total China 582,485 ---------- DENMARK: 1.06% 4,100 Novo-Nordisk A/S 869,605 ---------- Total Denmark 869,605 ---------- FINLAND: 1.16% 11,339 Elisa Communications OYJ 314,659 15,000 Nokia OYJ ADR 641,250 ---------- Total Finland 955,909 ---------- FRANCE: 10.20% 13,000 Accor SA 526,217 11,100 Alcatel SA 677,259 8,600 Aventis SA 620,327 7,900 France Telecom 825,926 2,400 Groupe Danone 335,638 24,800 Sanofi-Synthelabo SA 1,304,808 8,900 Schneider Electric SA 579,658 20,000 Societe Television Francaise 1,091,300 19,600 ST Microelectronics NV 1,017,975 5,374 Total Fina Elf SA 768,880 17,000 @ Vivendi Environnement 634,753 ---------- Total France 8,382,741 ---------- GERMANY: 2.03% 18,400 Dresdner Bank AG 766,660 13,000 E.ON AG 660,584 5,500 @ Intershop Communications AG 238,032 ---------- Total Germany 1,665,276 ---------- GREECE: 0.90% 20,100 Alpha Bank SA 742,900 ---------- Total Greece 742,900 ---------- HONG KONG: 2.77% 109,000 Cheung Kong (Holdings) 1,205,443 85,800 Hutchison Whampoa 1,067,137 ---------- Total Hong Kong 2,272,580 ---------- IRELAND: 1.80% 60,500 Allied Irish Banks PLC 616,084 16,600 @ Elan Corp PLC ADR 862,162 ---------- Total Ireland 1,478,246 ---------- ISRAEL: 1.43% 19,900 Teva Pharmaceutical Industries ADR 1,176,588 ---------- Total Israel 1,176,588 ---------- ITALY: 3.39% 75,000 Alleanza Assicurazioni SPA 994,772 88,100 Edison SPA 829,855 72,900 Riunione Adriatica di Sicurta SPA 957,020 ---------- Total Italy 2,781,647 ---------- JAPAN: 13.39% 29,000 Daikin Industries 560,784 10,700 Fanuc 961,004 32,000 Fujitsu, Ltd. 570,114 2,800 Hoya Corp. 231,462 4,000 Itochu Techno-Science Corp. 950,923 12,000 Konami Corp. 1,011,777 48,000 Mitsui Fudosan 581,552 6,000 Murata Manufacturing Co., Ltd. 718,141 34,000 NEC Corp. 648,123 51,000 Nippon Sheet Glass 775,879 34 Nippon Telegraph & Telephone Corp. 309,417 31,000 Nomura Securities Co., Ltd. 657,701 23 NTT Docomo, Inc. 567,016 28,000 Pioneer Corp. 867,342 82,000 Sanyo Electric Co., Ltd. 623,746 2,700 Sony Corp. ADR 224,100 9,300 Sony Corp. 743,216 ---------- Total Japan 11,002,297 ---------- MEXICO: 0.28% 4,200 Telefonos de Mexico SA ADR 226,538 ---------- Total Mexico 226,538 ---------- NETHERLANDS: 6.65% 11,800 Akzo Nobel NV 537,223 29,400 @ ASM Lithography Holding NV 817,688 29,700 Koninklijke Ahold NV 862,713 14,740 Koninklijke Philips Electronics NV 588,679 14,100 Numico NV 659,286 9,400 @ Qiagen NV 402,831 13,400 Royal Dutch Petroleum Co. 794,736 15,900 Unilever NV 797,421 ---------- Total Netherlands 5,460,577 ---------- PORTUGAL: 1.44% 132,700 Portugal Telecom 1,182,397 ---------- Total Portugal 1,182,397 ---------- SINGAPORE: 1.64% 24,400 @ Flextronics Int'l, Ltd. 927,200 42,000 Singapore Airlines, Ltd. 420,885 ---------- Total Singapore 1,348,085 ---------- SOUTH KOREA: 0.48% 17,720 Korea Electric Power Corp. 395,682 ---------- Total South Korea 395,682 ---------- SPAIN: 2.63% 46,900 Altadis SA 702,458 86,300 Banco Santander Central Hispano SA 836,335 38,300 Endesa SA 624,027 ---------- Total Spain 2,162,820 ---------- SWEDEN: 3.03% 83,700 Nordic Baltic Holding AB 628,234 58,300 Svenska Handelsbanken 916,015 68,100 Telefonaktiebolaget LM Ericsson ADR 944,888 ---------- Total Sweden 2,489,137 ---------- See Accompanying Notes to Financial Statements 103 Pilgrim International Core Growth Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued) -------------------------------------------------------------------------------- Shares Value -------------------------------------------------------------------------------- SWITZERLAND: 3.15% 400 Nestle SA $ 828,883 300 Swatch Group AG 397,196 4,400 UBS AG 609,479 1,560 Zurich Financial Services AG 755,007 ---------- Total Switzerland 2,590,565 ---------- UNITED KINGDOM: 16.81% 56,500 BAA PLC 469,738 107,798 BAE Systems PLC 612,343 18,200 Barclays PLC 520,751 147,200 BG Group PLC 589,480 163,900 Billiton PLC 625,442 34,200 Cable & Wireless PLC 483,819 270,800 Centrica PLC 931,213 48,600 CMG PLC 802,474 84,900 Diageo PLC 801,322 67,000 @ Energis PLC 573,074 70,800 HSBC Holdings PLC 984,972 147,200 @ Lattice Group PLC 313,962 47,900 Logica PLC 1,417,115 5,800 Reuters Group PLC ADR 683,675 39,300 Rio Tinto PLC 635,799 54,100 Royal Bank of Scotland Group PLC 1,214,339 35,000 Sema Group PLC 441,814 100,900 Shell Transport & Trading Co. 811,792 3,300 @ Shire Pharmaceuticals PLC ADR 207,488 166,200 Vodafone Group PLC 691,491 ---------- Total United Kingdom 13,812,103 ---------- UNITED STATES: 2.68% 9,300 @ Amdocs, Ltd. 602,756 4,700 @ Comverse Technology, Inc. 525,225 14,100 Santa Fe Int'l Corp. 514,650 10,500 Transocean Sedco Forex, Inc. 556,500 ---------- Total United States 2,199,131 ---------- Total Common Stocks (Cost $68,171,413) 70,760,804 ---------- Shares Value -------------------------------------------------------------------------------- PREFERRED STOCKS: 1.66% BRAZIL: 0.75% 99,190 Banco Bradesco SA $ 613,117 ----------- Total Brazil 613,117 ----------- GERMANY: 0.91% 3,700 SAP AG 745,739 ----------- Total Germany 745,739 ----------- Total Preferred Stocks (Cost $1,606,802) 1,358,856 ----------- Total Long-Term Investments (Cost $69,778,215) 72,119,660 ----------- Principal Amount Value -------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS: 3.65% COMMERCIAL PAPER: 3.65% $ 3,000,000 Nestle Capital Corp., 6.350% due 11/01/00 $ 3,000,000 ----------- Total Short-Term Investments (Cost $3,000,000) 3,000,000 ----------- Total Investments in Securities (Cost $72,778,215) 91.44% $75,119,660 Other Assets and Liabilities-Net 8.56% 7,032,954 ------ ----------- Net Assets 100.00% $82,152,614 ====== =========== @ Non-income producing security ADR -- American Depository Receipt Cost for federal income tax purposes is $73,497,023. Net unrealized appreciation consists of: Gross Unrealized Appreciation $ 6,203,935 Gross Unrealized Depreciation (4,581,298) ----------- Net Unrealized Appreciation $ 1,622,637 ============ See Accompanying Notes to Financial Statements 104 Pilgrim International Core Growth Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued) -------------------------------------------------------------------------------- Percentage of Industry Net Assets -------- ---------- Financials 17.85% Information Technology 15.66% Industrials 9.37% Health Care 8.29% Telecommunication Services 7.88% Consumer Discretionary 7.19% Energy 6.97% Consumer Staples 6.07% Utilities 5.68% Materials 2.83% Short-Term Investments 3.65% Other Assets and Liabilities, Net 8.56% ------ NET ASSETS 100.00% ====== See Accompanying Notes to Financial Statements 105 Pilgrim International SmallCap Growth Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 -------------------------------------------------------------------------------- Shares Value -------------------------------------------------------------------------------- COMMON STOCKS: 88.53% AUSTRIA: 0.36% 90,800 Austria Technologie & Systemtecknik AG $ 2,535,041 ----------- Total Austria 2,535,041 ----------- CANADA: 8.28% 473,200 @ Anderson Exploration, Ltd. 8,674,043 110,000 @ ATS Automation Tooling Systems 1,951,555 152,100 @ Canadian Hunter Exploration, Ltd. 3,186,383 203,700 @ Certicom Corp. 6,734,435 46,700 @ C-Mac Industries, Inc. 2,591,850 256,800 @ Cognos, Inc. 10,657,200 77,500 @ Descartes Systems Group, Inc. 3,138,750 88,000 @ Descartes Systems Group, Inc. 3,566,088 409,700 Petro-Canada, Ltd. 8,582,913 82,200 @ Pivotal Corp. 4,950,835 95,100 @ RIO Alto Exploration, Ltd. 1,612,498 294,900 @ Tesco Corp. 2,442,216 ----------- Total Canada 58,088,766 ----------- DENMARK: 5.05% 441,500 GN Store Nord 8,558,641 96,100 ISS A/S 5,917,555 112,300 NEG Micon A/S 5,826,615 279,600 Vestas Wind Systems AS 15,144,535 ----------- Total Denmark 35,447,346 ----------- FINLAND: 1.23% 394,700 @ F-Secure OYJ 2,244,115 156,500 Sampo Insurance Co., Ltd. 6,374,686 ----------- Total Finland 8,618,801 ----------- FRANCE: 6.09% 265,500 Air France 4,731,371 44,100 Altran Technologies SA 9,015,267 57,000 @ Business Objects SA ADR 4,491,422 53,500 Coflexip Stena Offshore 6,197,116 32,427 Galeries Lafayette 5,231,089 128,800 Pechiney SA 4,809,188 30,800 Rexel SA 2,143,225 71,808 Rhodia SA 886,335 59,200 @ Wavecom SA ADR 5,150,400 ----------- Total France 42,655,413 ----------- GERMANY: 9.04% 80,100 @ ADVA AG Optical Networking $ 5,879,655 88,600 @ Aixtron 11,879,387 50,900 Altana AG 6,130,058 44,400 @ D Logistics AG 3,127,262 56,700 Depfa Deutsche Pfandbriefbank AG 4,185,580 76,800 @ Direkt Anlage Bank AG 3,388,970 59,700 Merck KGAA 2,269,633 70,000 @ Schneider Technologies AG 3,498,780 374,000 @ Senator Entertainment AG 6,077,761 88,200 SGL Carbon 5,389,700 32,300 Singulus Technologies 1,301,965 101,800 @ Suess Microtec 2,863,746 60,000 Tecis Holding AG 4,338,045 59,000 @ Telesens AG 3,104,180 ----------- Total Germany 63,434,722 ----------- HONG KONG: 1.93% 4,534,000 China Resources Enterprise 5,145,006 5,428,000 Cosco Pacific, Ltd. 4,001,923 3,719,000 New World Development 4,410,918 ----------- Total Hong Kong 13,557,847 ----------- IRELAND: 0.03% 65,500 @ Parthus Technologies 224,288 ----------- Total Ireland 224,288 ----------- ITALY: 4.84% 422,900 Arnoldo Mondadori Editore SPA 4,952,449 716,500 Autogrill SPA 7,910,368 515,500 Class Editori SPA 7,261,728 4,911,500 Parmalat Finanziaria SPA 7,085,431 1,302,700 Saipem SPA 6,787,596 ----------- Total Italy 33,997,572 ----------- JAPAN: 16.65% 1,158,000 @ All Nippon Airways $ 3,618,916 496,000 Alps Electric Co. 9,818,632 1,102,000 Citizen Watch Co., Ltd. 10,816,497 171,000 Credit Saison 3,620,126 328,000 Daiichi Pharmaceutical Co., Ltd. 9,318,609 937,000 Fujikura, Ltd. 8,260,954 496,000 Hitachi Cable, Ltd. 5,845,722 937,000 Komatsu, Ltd. 4,156,239 198,400 Meitec Corp. 8,327,655 827,000 NGK Insulators 10,951,886 386,000 Nippon Electric Glass Co., Ltd. 8,985,382 46,000 Nippon System Development 4,987,215 165,400 Nitto Denko Corp. 5,593,420 13,600 OBIC Business Consultants 1,358,567 1,158,000 OKI Electric Industry Co. 6,887,614 110,000 Ono Pharmaceutical Co., Ltd. 4,385,282 1,323,000 Sumitomo Osaka Cement Co. 5,638,042 243,000 Ushio, Inc. 4,231,316 ----------- Total Japan 116,802,074 ----------- LUXEMBOURG: 1.13% 51,200 @ Thiel Logistik AG 7,907,597 ----------- Total Luxembourg 7,907,597 ----------- MEXICO: 0.24% 370,922 @ Corporation Interamericana de Entretenimiento SA 1,675,695 ----------- Total Mexico 1,675,695 ----------- NETHERLANDS: 0.72% 85,500 Fugro NV 5,038,968 ----------- Total Netherlands 5,038,968 ----------- NORWAY: 4.90% 361,100 @ Frontline, Ltd. 5,954,122 320,400 Schibsted ASA 4,868,671 700,000 Storebrand 4,903,545 372,800 @ TGS Nopec Geophysical Co. ASA 4,740,856 346,700 Tomra Systems ASA 13,936,750 ----------- Total Norway 34,403,944 ----------- See Accompanying Notes to Financial Statements 106 Pilgrim International SmallCap Growth Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued) -------------------------------------------------------------------------------- Shares Value -------------------------------------------------------------------------------- SINGAPORE: 1.61% 772,000 Overseas Union Bank $ 3,736,264 780,000 Venture MFG (Singapore), Ltd. 7,549,963 ----------- Total Singapore 11,286,227 ----------- SOUTH KOREA: 1.10% 59,000 Hankuk Electric Glass 3,734,505 102,140 Samsung SDI Co., Ltd. 3,977,848 ----------- Total South Korea 7,712,353 ----------- SPAIN: 3.05% 158,700 Acciona SA 5,003,097 338,900 Centros Comerciales Carrefour SA 4,293,729 556,100 Grupo Dragados SA 5,403,331 323,200 Indra Sistemas SA 3,252,814 374,700 SOL Melia SA 3,427,723 ----------- Total Spain 21,380,694 ----------- SWEDEN: 2.99% 875,400 Enea Data AB 4,248,962 381,800 HIQ Int'l AB 3,094,963 147,500 JM AB 3,365,591 107,300 @ PerBio Science AB 1,089,934 162,100 @ Pyrosequencing AB 2,011,589 37,600 Svenska Cellulosa AB 774,190 1,081,900 Swedish Match AB 3,713,777 402,000 @ Telelogic AB 2,655,245 ----------- Total Sweden 20,954,251 ----------- SWITZERLAND: 9.42% 1,500 Ascom Holding AG 5,077,603 37,300 Gretag Imaging Group 6,702,214 5,690 @ Kudelski SA 7,660,102 24,280 @ Logitech Int'l SA 7,428,794 6,600 SEZ Holding AG 3,836,782 4,600 Straumann Holding AG 9,941,589 12,900 Swisslog Holding AG 7,104,473 11,020 Synthes-Stratec, Inc. 7,019,304 5,500 Tecan Group AG 5,905,096 22,700 Unaxis Holding AG 5,461,588 ----------- Total Switzerland 66,137,545 ----------- UNITED KINGDOM: 9.50% 75,600 @ Autonomy Corp. PLC $ 2,661,120 455,000 @ Baltimore Technologies PLC 3,502,265 275,300 @ Celltech Group PLC 5,472,414 1,073,800 Cookson Group PLC 2,921,305 935,900 @ Eidos PLC 3,798,847 1,216,900 Enterprise Oil PLC 9,622,847 271,000 @ Future Network PLC (The) 1,749,772 900,000 International Power PLC 3,630,275 44,582 Johnson Matthey PLC 696,265 581,100 Matalan PLC 5,480,453 495,400 @ Pharmagene PLC 1,890,445 90,940 Psion PLC 550,229 1,043,800 @ Regus PLC 4,743,416 2,132,400 Safeway PLC 8,864,322 1,193,600 Spirent PLC 11,066,540 ----------- Total United Kingdom 66,650,515 ----------- UNITED STATES: 0.40% 104,000 @ OpenTV Corp. 2,795,000 ----------- Total United States 2,795,000 ----------- Total Common Stocks (Cost $596,448,900) 621,304,659 ----------- PREFERRED STOCKS: 3.61% GERMANY: 3.61% 137,100 Henkel KGAA 8,296,427 45,500 MLP AG 6,158,505 1,400 Porsche AG 4,716,520 195,600 Prosieben SAT.1 Media AG 6,158,089 ----------- Total Germany 25,329,541 ----------- Total Preferred Stocks (Cost $ 22,149,554) 25,329,541 ----------- Total Long-Term Investments (Cost $618,598,454) 646,634,200 ----------- Principal Amount Value -------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS: 5.64% Repurchase Agreements: 5.64% $39,589,000 State Street Repurchase Agreement, 6.450% due 11/10/00 (collateralized by $30,355,000 U.S. Treasury Notes, 8.75% due 05/15/17, value $40,382,471) $ 39,589,000 ------------ Total Short-Term Investments (Cost $39,589,000) 39,589,000 ------------ Total Investments in Securities (Cost $658,187,454) 97.78% $686,223,200 Other Assets and Liabilities-Net 2.22% 15,579,388 ------ ------------ Net Assets 100.00% $701,802,588 ====== ============ @ Non-income producing security ADR American Depository Receipt * Cost for federal, Income tax purposes is $667,459,528. Net unrealized appreciation consists of: Gross Unrealized Appreciation $ 76,712,881 Gross Unrealized Depreciation (57,949,209) ------------ Net Unrealized Appreciation $ 18,763,672 ============ See Accompanying Notes to Financial Statements 107 Pilgrim International Small Cap Growth Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued) -------------------------------------------------------------------------------- Percentage of Industry Net Assets -------- ---------- Airlines 1.19% Auto Manufacturers 0.67% Banks 1.13% Biotechnology 0.71% Building Materials 0.80% Chemicals 1.69% Commercial Services 1.41% Computers 5.61% Diversified Financial Services 2.50% Electric 0.52% Electrical Components & Equipment 5.60% Electronics 7.57% Engineering & Construction 4.59% Entertainment 0.24% Environmental Control 1.99% Food 2.27% Forest Products & Paper 0.11% Healthcare-Products 3.26% Holding Companies-Diversified 0.73% Home Furnishings 0.50% Household Products/Wares 1.18% Housewares 0.53% Insurance 1.61% Lodging 0.49% Machinery-Construction & Mining 0.59% Machinery-Diversified 1.48% Media 4.43% Metal Fabricate/Hardware 0.69% Miscellaneous Manufacturing 1.37% Oil & Gas Producers 4.51% Oil & Gas Services 2.87% Pharmaceuticals 3.93% Real Estate 0.68% Retail 4.81% Semiconductors 2.91% Software 7.99% Telecommunications 7.16% Tobacco 0.53% Transportation 1.29% Short-Term Investments 5.64% Other Assets and Liabilities, Net 2.22% ------ NET ASSETS 100.00% ====== See Accompanying Notes to Financial Statements 108 Pilgrim Emerging Markets Value Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 -------------------------------------------------------------------------------- Shares Value -------------------------------------------------------------------------------- COMMON STOCKS: 98.49% ARGENTINA: 6.63% 183,370 @ Grupo Financiero Galicia SA $ 273,279 40,500 Massalin Particulares 315,966 16,330 Telecom Argentina SA ADR 280,672 --------- Total Argentina 869,917 --------- BRAZIL: 22.85% 37,490 @ Centrail Geradoras Sul Do Brasil ADR 289,756 1,880 Brasil Telecom Participacoes SA ADR 101,872 17,790 Cemig ADR 270,148 6,500 Centrais Eletric DE STA CAT ADR 224,795 33,900 Centrais Eletricas Brasileiras SA ADR 301,090 16,600 CIA de Bebidas das Americas ADR 374,537 41,370 CIA Paranaense de Energia ADR 374,916 10,300 Copene-Petroquimica do Nordeste SA ADR 199,156 11,230 Petroleo Brasileiro SA ADR 297,814 3,239 Tele Norte Leste Participacoes SA ADR 71,663 12,110 Unibanco - Uniao de Bancos Brasileiros GDR 305,778 36,300 Usinas Sider de Minas Gerais-Old ADR 186,408 --------- Total Brazil 2,997,933 --------- CHILE: 6.03% 10,900 A.F.P. Provida SA ADR 231,625 13,400 Banco Santiago ADR 264,650 35,200 Quinenco SA ADR 294,800 --------- Total Chile 791,075 --------- CHINA: 10.28% 1,407,000 Beijing Datang Power Generation Co., Ltd. $ 335,558 25,630 Beijing Yanhua Petrochemical ADR 131,354 1,426,000 Beijing Yanhua Petrochemical 140,790 472,000 Guangdong Kelon Electric 88,360 368,100 Huaneng Power Int'l, Inc. 143,955 1,508,000 PetroChina Co., Ltd. 317,107 25,110 Shandong Huaneng Power ADR 190,836 --------- Total China 1,347,960 --------- COLOMBIA: 0.60% 34,700 Banco Ganadero ADR 78,075 --------- Total Colombia 78,075 --------- ESTONIA: 0.98% 8,400 @ Eesti Telekom GDR 128,520 --------- Total Estonia 128,520 --------- GREECE: 2.46% 14,100 Hellenic Telecommunications Organization SA ADR 123,375 11,400 Hellenic TLCM 199,135 --------- Total Greece 322,510 --------- HONG KONG: 5.07% 45,900 Dairy Farm Int'l Holdings ADR 94,095 108,900 @ Dairy Farm Int'l Holdings 44,649 400,680 First Pacific Co. 90,421 31,938 Jardine Matheson Holdings, Ltd. 177,256 262,000 Shangri-La Asia, Ltd. 258,674 --------- Total Hong Kong 665,095 --------- HUNGARY: 0.50% 4,300 Mol Magyar Olaj- es Gazipari Rt. GDR 65,145 --------- Total Hungary 65,145 --------- INDIA: 1.15% 20,500 Videsh Sanchar Nigam, Ltd. ADR 151,188 --------- Total India 151,188 --------- INDONESIA: 0.96% 18,000 Indosat (Persero) TBK ADR 127,125 --------- Total Indonesia 127,125 --------- ISRAEL: 5.43% 140,700 Bank Leumi Le $ 276,369 8,640 ECI Telecom, Ltd. 204,120 15,610 Koor Industries, Ltd. ADR 232,199 --------- Total Israel 712,688 --------- LUXEMBOURG: 1.94% 30,860 Quilmes Industrial SA ADR 254,595 --------- Total Luxembourg 254,595 --------- MEXICO: 8.13% 14,470 @ Grupo Financiero Inbursa SA ADR 269,889 24,050 Panamerican Beverages, Inc. 396,825 7,400 Telefonos de Mexico SA ADR 399,137 --------- Total Mexico 1,065,851 --------- PANAMA: 2.45% 12,800 Banco Latinoamericano de Exportaciones 320,800 --------- Total Panama 320,800 --------- PHILIPPINES: 1.71% 10,000 Philippine Long Distance Telephone ADR 155,000 3,993,595 RFM Corp. 69,488 --------- Total Philippines 224,488 --------- POLAND: 0.65% 22,000 Polski Koncern Naftowy Orlen 84,278 --------- Total Poland 84,278 --------- RUSSIA: 2.43% 2,900 Lukoil-Holding ADR 154,860 20,360 OAO Gazprom ADR 163,898 --------- Total Russia 318,758 --------- SINGAPORE: 2.51% 27,916 DBS Group Holdings, Ltd. 329,022 --------- Total Singapore 329,022 --------- SOUTH AFRICA: 6.03% 15,400 De Beers Consolidated Mines, Ltd. 423,609 96,800 Iscor, Ltd. 153,616 28,000 Sasol, Ltd. 214,396 --------- Total South Africa 791,621 --------- See Accompanying Notes to Financial Statements 109 Pilgrim Emerging Markets Value Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued) -------------------------------------------------------------------------------- Shares Value -------------------------------------------------------------------------------- SOUTH KOREA: 5.10% 29,530 Korea Electric Power Corp. ADR $ 359,897 8,400 Korea Telecom ADR 309,750 ---------- Total South Korea 669,647 ---------- UNITED KINGDOM: 2.91% 63,300 South African Breweries PLC 381,157 ---------- Total United Kingdom 381,157 ---------- VENEZUELA: 1.69% 11,680 Compania Anonima Nacional Telefonos de Venezuela ADR 221,920 ---------- Total Venezuela 221,920 ---------- Total Common Stocks (Cost $13,862,207) 12,919,368 ---------- Total Long Term Investments (Cost $13,862,207) 12,919,368 ---------- Principal Amount Value -------------------------------------------------------------------------------- SHORT TERM INVESTMENTS: 0.88% REPURCHASE AGREEMENT: 0.88% $ 116,000 State Street Bank & Trust Repurchase Agreement, 6.45% due 11/01/00 (Collateralized by $125,000 U.S. Treasury Notes, 4.750% Due 11/15/08, Market Value $119,375) $ 116,000 ----------- Total Short-Term Investments (Cost $116,000) 116,000 ----------- Total Investments in Securities (Cost $13,978,207)* 99.37% $13,035,368 Other Assets and Liabilities-Net 0.63% 82,322 ------ ----------- Net Assets 100.00% $13,117,690 ====== =========== @ Non-income producing security ADR -- American Depository Receipt GDR -- Global Depository Receipt * Cost for federal income tax purposes is the same as for financial statement purposes. Net unrealized depreciation consists of: Gross Unrealized Appreciation $ 2,119,364 Gross Unrealized Depreciation (3,062,203) ----------- Net Unrealized Depreciation $ (942,839) =========== See Accompanying Notes to Financial Statements 110 Pilgrim Emerging Markets Value Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued) -------------------------------------------------------------------------------- Percentage of Industry Net Assets -------- ---------- Banks 12.00% Beverages 10.73% Chemicals 3.59% Diversified Finan Services 5.91% Electric 18.99% Food 1.59% Gas 1.25% Holding Companies-Diversified 4.29% Home Furnishings 0.67% Investment Companies 1.77% Iron/Steel 2.59% Lodging 1.97% Mining 3.23% Miscellaneous Manufacturing 0.64% Oil & Gas Producers 8.00% Telecommunications 18.86% Tobacco 2.41% Short-Term Investments 0.88% Other Assets and Liabilities, Net 0.63% ------ NET ASSETS 100.00% ====== See Accompanying Notes to Financial Statements 111 Pilgrim Emerging Countries Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 -------------------------------------------------------------------------------- Shares Value -------------------------------------------------------------------------------- COMMON STOCKS: 90.89% ARGENTINA: 0.43% 57,500 @ Grupo Financiero Galicia SA ADR $ 837,344 ---------- Total Argentina 837,344 ---------- BELGIUM: 1.02% 64,700 Fortis (B) 1,982,050 ---------- Total Belgium 1,982,050 ---------- BRAZIL: 11.00% 28,000 Brasil Telecom Participacoes SA ADR 1,517,250 51,200 Companhia Brasileira de Distribuicao Grupo Pao de Acucar ADR 1,824,000 49,000 Cia de Bebidas das Americas ADR 1,105,563 193,700 Cia Paranaense de Energia ADR 1,755,406 65,000 Centrais Eletricas Brasileiras SA 1,154,269 33,030 Empresa Bras de Aeronautica ADR 955,806 101,100 Embratel Participacoes SA ADR 1,636,556 139,510 @ Petroleo Brasileiro SA ADR 4,054,509 29,200 Tele Celular Sul Participacoes SA ADR 735,475 131,909 Tele Norte Leste Participacoes SA ADR 2,918,487 50,700 @ Telesp Celular Participacoes SA ADR 1,603,387 50,175 Unibanco -- Uniao de Bancos Brasileiros GDR 1,266,919 44,900 Votorantim Celulose e Papel SA ADR 774,525 ---------- Total Brazil 21,302,152 ---------- CHILE: 0.65% 82,200 Compania Telecomunicaciones de Chile SA ADR 1,253,550 ---------- Total Chile 1,253,550 ---------- CHINA: 2.47% 4,200,000 Beijing Capital Int'l Airport $ 963,970 13,220,000 @ China Petroleum & Chemical Corp 2,593,486 7,600,000 Zhejiang Expressway Co. 1,227,850 ---------- Total China 4,785,306 ---------- CZECH REPUBLIC: 0.71% 36,480 @ Ceske Radiokomunikace GDR 1,368,000 ---------- Total Czech Republic 1,368,000 ---------- EGYPT: 0.20% 20,000 @ Mobinil-Egyptian Mobile Netork 395,666 ---------- Total Egypt 395,666 ---------- FRANCE: 1.95% 30,500 Alcatel SA 1,860,938 13,300 Total Fina Elf SA 1,902,885 ---------- Total France 3,763,823 ---------- GERMANY: 2.08% 6,100 Allianz AG 2,068,256 24,000 Deutsche Bank AG 1,964,951 ---------- Total Germany 4,033,207 ---------- GREECE: 2.87% 75,900 Alpha Bank SA 2,805,280 40,000 National Bank Of Greece SA 1,520,392 70,000 Hellenic Telecommunications Organization SA 1,222,761 ---------- Total Greece 5,548,433 ---------- HONG KONG: 4.00% 749,900 @ China Mobile (Hong Kong) Ltd 4,807,668 73,000 @ China Unicom ADR 1,496,500 220,000 @ China Unicom 441,467 1,362,000 Cosco Pacific Ltd. 1,004,167 ---------- Total Hong Kong 7,749,802 ---------- HUNGARY: 1.80% 90,000 Matav Rt. ADR 2,115,000 30,000 OTP Bank Rt. GDR 1,378,500 ---------- Total Hungary 3,493,500 ---------- INDIA: 3.28% 170,000 Hindustan Lever Ltd. $ 645,053 12,400 @ Infosys Technologies Ltd. 1,897,760 330,000 Mahanagar Telephone Nigam 993,276 240,000 Reliance Industries Ltd. 1,553,122 23,900 @ Wipro Ltd. ADR 1,257,737 ---------- Total India 6,346,948 ---------- ISRAEL: 3.46% 32,600 @ AudioCodes Ltd 1,289,737 671,900 Bank Hapoalim Ltd. 1,699,636 19,650 @ Orbotech Ltd. 1,040,222 45,000 Teva Pharmaceutical Industries ADR 2,660,625 ---------- Total Israel 6,690,220 ---------- ITALY: 1.02% 134,800 Mediolanum SPA 1,975,538 ---------- Total Italy 1,975,538 ---------- JAPAN: 1.79% 87,000 Nomura Securities Co Ltd 1,845,805 20,300 Sony Corp. 1,622,288 ---------- Total Japan 3,468,093 ---------- MALAYSIA: 3.40% 500,000 MAA Holdings Bhd 1,000,000 612,000 Malayan Banking Berhad 2,448,000 125,000 Nestle (Malaysia) Berhad 661,184 500,000 Tenaga Nasional Berhad 1,618,421 600,000 United Engineers (Malaysia) 852,632 ---------- Total Malaysia 6,580,237 ---------- See Accompanying Notes to Financial Statements 112 Pilgrim Emerging Countries Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued) -------------------------------------------------------------------------------- Shares Value -------------------------------------------------------------------------------- MEXICO: 13.80% 105,725 Cemex SA ADR $ 2,233,441 84,635 Coca-Cola Femsa SA ADR 1,623,934 234,430 @ Corp Interamericana de Entretenimiento SA 1,059,072 51,600 Fomento Economico Mexicano SA ADR 1,970,475 1,998,000 @ GPO Fin Banamex AC ADR 3,104,866 87,000 Grupo Elektra SA ADR 897,188 79,850 @ Grupo Iusacell S.A de C.V. ADR 1,038,050 36,435 @ Grupo Televisa SA ADR 1,972,044 148,201 Telefonos de Mexico SA ADR 7,993,591 44,100 Tubos de Acero de Mexico SA ADR 670,761 131,600 TV Azteca SA DE CV ADR 1,645,000 1,045,000 @ Walmart de Mexico/Mexico City 2,513,464 ----------- Total Mexico 26,721,886 ----------- NETHERLANDS: 1.05% 51,700 Koninklijke Philips Electronics NV 2,031,742 ----------- Total Netherlands 2,031,742 ----------- POLAND: 0.84% 15,000 @ Bank Pekao SA GDR 151,125 14,000 Prokom Software SA 551,383 185,000 Telekomunikacja Polska SA GDR 929,625 ----------- Total Poland 1,632,133 ----------- RUSSIA: 3.24% 52,000 @ Mobile Telesystems ADR 1,436,500 55,000 Lukoil-Holding ADR 2,923,250 150,000 Surgutneftegaz ADR 1,920,000 ----------- Total Russia 6,279,750 ----------- SOUTH AFRICA: 1.67% 75,500 Impala Platinum Holdings Ltd. 3,234,987 ----------- Total South Africa 3,234,987 ----------- SOUTH KOREA: 6.62% 40,000 H&CB $ 961,758 70,000 Korea Electric Power Corp. 1,563,077 200,000 LG Engineering & Construction Ltd. 728,791 22,000 Pohang Iron & Steel Co. 1,278,418 40,000 Samsung Electro-Mechanics 1,280,000 15,000 Samsung Electronics 1,879,121 42,000 Samsung Securities Co. Ltd. 760,615 45,000 Shinsegae Department Store 2,072,967 10,730 SK Telecom 2,287,495 ----------- Total South Korea 12,812,242 ----------- SWEDEN: 1.97% 613,000 Swedish Match AB 2,104,210 127,900 Telefonaktiebolaget LM Ericsson 1,702,381 ----------- Total Sweden 3,806,591 ----------- SWITZERLAND: 1.96% 929 Nestle SA 1,925,080 1,227 Novartis 1,861,387 ----------- Total Switzerland 3,786,467 ----------- TAIWAN: 2.12% 100,000 @ Taiwan Semiconductor Manufacturing Co. Ltd. ADR 2,268,750 140,000 @ United Microelectronics ADR 1,592,500 35,000 @ Via Technologies Inc/Taiwan 251,390 ----------- Total Taiwan 4,112,640 ----------- THAILAND: 0.70% 2,607,000 @ Thai Farmers Bank 1,347,631 ----------- Total Thailand 1,347,631 ----------- TURKEY: 5.01% 65,000,000 Aksigorta 1,285,743 20,000,000 @ Anadolu Efes Biracilik Ve Malt Sanayii AS 1,172,187 109,542,700 Hurriyet Gazeteci 1,316,146 30,000,000 KOC Holding AS 1,912,130 140,000,000 Turkiye Garanti Bankasi 1,435,929 25,000,000 @ Turkcell Iletisim Hizmet AS 1,098,925 170,000,000 Yapi VE Kredi Bankasi 1,469,629 ----------- Total Turkey 9,690,689 ----------- UNITED KINGDOM: 9.78% 69,200 Barclays PLC $ 1,980,000 167,700 British Telecommunications PLC 1,966,059 209,100 Diageo PLC 1,973,575 566,565 @ Dimension Data Holdings PLC 4,877,658 63,300 Glaxo Wellcome PLC 1,822,207 168,500 Provident Financial PLC 2,149,023 143,400 Reckitt Benckiser PLC 1,885,079 548,200 Vodafone Group PLC 2,280,839 ----------- Total United Kingdom 18,934,440 ----------- UNITED STATES: 0.00% 267 @ Winbond Electronics Corp. 2,596 ----------- Total United States 2,596 ----------- Total Common Stock (Cost $169,480,039) 175,967,663 ----------- PREFERRED STOCK: 1.29% BRAZIL: 1.29% 18,767 Banco Itau SA 1,459,874 45,200 CVRD-Companhia Vale do Rio Doce 1,041,801 ----------- Total Brazil 2,501,675 ----------- Total Preferred Stock (Cost $2,996,617) 2,501,675 ----------- Total Long Term Investments (Cost $172,476,656) 178,469,338 ----------- See Accompanying Notes to Financial Statements 113 Pilgrim Emerging Countries Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued) -------------------------------------------------------------------------------- Principal Amount Value -------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS: 11.85% U.S. GOVERNMENT SECURITIES: 7.20% $ 8,000,000 Federal National Mortgage Association, 6.430%, due 11/02/00 $ 7,998,571 6,000,000 U.S. Treasury Bill, 6.120%, due 01/11/01 5,927,580 ------------ 13,926,151 ------------ COMMERCIAL PAPER: 4.65% 9,000,000 Nestle Capital Corp., 6.350%, due 11/01/00 9,000,000 ------------ Total Short-Term Investments (Cost $22,926,151) 22,926,151 ------------ Total Investments in Securities (Cost $195,402,807)* 104.03% $201,395,489 Other Assets and Liabilities-Net -4.03% (7,797,763) ------- ------------ Net Assets 100.00% $193,597,726 ======= ============ @ Non-income producing security ADR -- American Depository Receipt GDR -- Global Depository Receipt * Cost for federal income tax purposes is $196,173,515. Net unrealized appreciation consists of: Gross Unrealized Appreciation $ 14,421,993 Gross Unrealized Depreciation (9,200,019) ------------ Net Unrealized Appreciation $ 5,221,974 ============ See Accompanying Notes to Financial Statements 114 Pilgrim Emerging Countries Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued) -------------------------------------------------------------------------------- Percentage of Industry Net Assets -------- ---------- Aerospace/Defense 0.50% Banks 11.31% Beverages 3.04% Building Materials 1.16% Chemicals 0.80% Commercial Services 1.15% Diversified Financial Services 3.91% Electric 3.15% Electrical Components & Equipment 0.97% Electronics 2.25% Engineering & Construction 1.32% Entertainment 0.55% Food 2.28% Forest Products & Paper 0.40% Holding Companies-Diversified 2.65% Home Furnishings 0.84% Household Products/Wares 1.31% Insurance 3.26% Iron/Steel 0.66% Metal Fabricate/Hardware 0.35% Mining 2.21% Oil & Gas Producers 6.91% Pharmaceuticals 3.27% Retail 2.83% Semiconductors 2.13% Software 3.79% Sovereign 4.13% Telecommunications 23.96% Tobacco 1.09% Short-term Investments 11.85% Other Assets and Liabilities, Net -4.03% ------- Net Assets 100.00% ======= See Accompanying Notes to Financial Statements 115 Pilgrim Worldwide Emerging Markets Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 -------------------------------------------------------------------------------- Shares Value -------------------------------------------------------------------------------- COMMON STOCKS: 79.24% ARGENTINA: 0.45% 25,225 @ Grupo Financiero Galicia SA $ 367,339 ---------- Total Argentina 367,339 ---------- BRAZIL: 10.54% 12,280 Brasil Telecom Participacoes SA ADR 665,422 28,515 Centrais Eletricas Brasileiras SA 506,369 21,500 Cia de Bebidas das Americas ADR 485,094 75,770 Cia Paranaense de Energia ADR 686,665 16,460 Companhia Brasileira de Distribuicao Grupo Pao de Acucar ADR 586,387 44,350 Embratel Participacoes SA ADR 717,916 14,500 Empresa Bras de Aeronautica ADR 419,594 53,200 @ Petroleo Brasileiro SA ADR 1,546,125 12,810 Tele Celular Sul Participacoes SA ADR 322,652 50,870 Tele Norte Leste Participacoes SA ADR 1,125,499 22,240 Telesp Celular Participacoes SA ADR 703,340 22,000 Unibanco - Uniao de Bancos Brasileiros GDR 555,500 15,400 Votorantim Celulose e Papel SA Adr 265,650 ---------- Total Brazil 8,586,213 ---------- CHILE: 0.49% 26,300 Compania Telecomunicaciones de Chile SA ADR 401,075 ---------- Total Chile 401,075 ---------- CHINA: 5.91% 5,260,000 @ China Petroleum & Chemical Corp. $1,031,902 178,800 PetroChina Ltd. ADR 3,788,325 ---------- Total China 4,820,227 ---------- CZECH REBPUBLIC: 0.46% 10,000 @ Ceske Radiokomunikace GDR 376,250 ---------- Total Czech Republic 376,250 ---------- EGYPT: 0.61% 25,000 @ Mobinil-Egyptian Mobile Netork 494,582 ---------- Total Egypt 494,582 ---------- FRANCE: 0.98% 5,600 Total Fina Elf SA 801,215 ---------- Total France 801,215 ---------- GREECE: 3.16% 40,000 Alpha Bank SA 1,478,409 30,000 Hellenic Telecommunications Organization SA 524,040 15,000 National Bank Of Greece SA 570,147 ---------- Total Greece 2,572,596 ---------- HONG KONG: 1.49% 24,500,000 @ China Star Entertainment 669,124 3,590,000 Yuxing Infotech Holdings Ltd. 547,776 ---------- Total Hong Kong 1,216,900 ---------- HUNGARY: 1.29% 25,000 Matav Rt. ADR 587,500 10,000 OTP Bank Rt. GDR 459,500 ---------- Total Hungary 1,047,000 ---------- INDIA: 7.22% 216,600 @ Fujitsu ICIM Ltd. 551,383 46,850 HCL Technologies Ltd. 1,189,677 250,000 @ Satyam Computer Services 1,639,716 42,400 @ Television Eighteen India Ltd. 423,774 360,000 Videsh Sanchar Nigam Ltd. 1,621,518 8,800 @ Wipro Ltd. ADR 463,100 ---------- Total India 5,889,168 ---------- ISRAEL: 2.11% 170,000 Bank Hapoalim Ltd. $ 430,031 7,300 @ Nice Systems Ltd. ADR 341,275 16,000 Teva Pharmaceutical Industries ADR 946,000 ---------- Total Israel 1,717,306 ---------- ITALY: 1.02% 56,800 Mediolanum SPA 832,423 ---------- Total Italy 832,423 ---------- MEXICO: 10.47% 116,500 Cemex SA 489,757 27,150 Coca-Cola Femsa S.A. ADR 520,941 75,000 @ Corp Interamericana de Entretenimiento SA 338,824 16,550 Fomento Economico Mexicano SA ADR 632,003 27,930 Grupo Elektra SA GDR 288,028 639,000 @ Grupo Financiero Banamex Accival SA ADR 992,998 25,560 @ Grupo Iusacell S.A de C.V. ADR 332,280 11,700 Grupo Televisa SA GDR 633,262 47,435 Telefonos de Mexico SA ADR 2,558,525 13,780 Tubos de Acero de Mexico SA ADR 209,594 58,035 TV Azteca SA DE CV Adr 725,437 334,000 Walmart de Mexico/Mexico City 803,346 ---------- Total Mexico 8,524,995 ---------- POLAND: 0.52% 5,000 @ Bank Pekao SA GDR 50,375 75,000 Telekomunikacja Polska SA GDR 376,875 ---------- Total Poland 427,250 ---------- PORTUGAL: 1.83% 408,545 @ Pararede SGPS SA 1,494,240 ---------- Total Portugal 1,494,240 ---------- RUSSIA: 3.49% 17,000 Lukoil-Holding ADR 888,250 22,000 @ Mobile Telesystems ADR 607,750 106,000 Moscow Telephone 583,000 60,000 Surgutneftegaz ADR 768,000 ---------- Total Russia 2,847,000 ---------- See Accompanying Notes to Financial Statements 116 Pilgrim Worldwide Emerging Markets Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued) -------------------------------------------------------------------------------- Shares Value -------------------------------------------------------------------------------- SINGAPORE: 1.87% 90,000 @ ST Assembly Test Services Ltd. ADR $1,524,375 ---------- Total Singapore 1,524,375 ---------- SOUTH AFRICA: 1.31% 671,900 @ Ixchange Technology Holdings 577,562 2,649,000 @ Metropolis Transactive Holdings Ltd. 87,579 5,100,000 @ Paradigm Capital Holdings Ltd. 249,547 2,085,100 @ Union Alliance Media Ltd. 151,660 ---------- Total South Africa 1,066,348 ---------- SOUTH KOREA: 9.49% 526,836 @ C&Tel Co Ltd. 351,996 74,000 Hyundai Electronics Industries 454,734 137,000 Korea Electric Power Corp. 3,059,165 55,000 Korea Telecom ADR 2,028,125 101,396 LG Electronics 1,412,853 264,300 Mirae Co. Ltd. 425,203 ---------- Total South Korea 7,732,076 ---------- SWEDEN: 1.09% 258,000 Swedish Match AB 885,622 ---------- Total Sweden 885,622 ---------- SWITZERLAND: 0.96% 516 Novartis 782,784 ---------- Total Switzerland 782,784 ---------- TAIWAN: 3.12% 269,982 @ Cosmo Electronics Corp. 316,790 2,855,000 @ RF-Link System Inc. 587,794 40,000 @ Taiwan Semiconductor Manufacturing Co. Ltd. ADR 907,500 754,000 @ Winbond Electronics Corp. 730,656 ---------- Total Taiwan 2,542,740 ---------- THAILAND: 0.46% 3,493,293 KR Precision Public Company Ltd. 373,062 ---------- Total Thailand 373,062 ---------- TURKEY: 4.70% 25,000,000 Aksigorta $ 494,516 7,500,000 @ Anadolu Efes Biracilik Ve Malt Sanayii AS 439,570 56,840,000 Dogan Sirketler Grubu Hldgs 978,586 10,000,000 KOC Holding AS 637,377 8,000,000 @ Turkcell Iletisim Hizmet AS 351,656 40,000,000 @ Turkiye Garanti Bankasi 410,265 60,000,000 Yapi VE Kredi Bankasi 518,693 ---------- Total Turkey 3,830,663 ---------- UNITED KINGDOM: 3.99% 29,100 Barclays PLC 832,630 70,500 British Telecommunications PLC 826,519 88,000 Diageo PLC 830,581 26,700 Glaxo Wellcome PLC 768,609 ---------- Total United Kingdom 3,258,339 ---------- UNITED STATES: 0.21% 85,000 @ Uproar Inc. 173,115 ---------- Total United States 173,115 ---------- Total Common Stocks (Cost $98,877,683) 64,584,903 ---------- PREFERRED STOCKS: 1.35% BRAZIL: 1.35% 8,233 Banco Itau SA 640,440 19,830 CVRD-Companhia Vale do Rio Doce 457,056 ---------- Total Brazil 1,097,496 ---------- Total Preferred Stocks (Cost $1,190,739) 1,097,496 ---------- Total Long Term Investments (Cost $100,068,422) 65,682,399 ---------- Principal Amount Value -------------------------------------------------------------------------------- SHORT TERM INVESTMENTS: 12.73% $10,500,000 U.S. Treasury Bills: 6.120% due 01/11/01 $ 10,373,265 ------------ Total Short-Term Investments (Cost $10,373,265) 10,373,265 ------------ Total Investments in Securities (Cost $110,441,687)* 93.32% 76,055,664 Other Assets and Liabilities-Net 6.68% 5,440,689 ------ ------------ Net Assets 100.00% $ 81,496,353 ====== ============ @ Non-income producing security ADR- American Depository Receipts GDR- Global Depository Receipts * Cost for federal income tax purposes is $110,534,194. Net unrealized depreciation consists of: Gross Unrealized Appreciation $ 3,849,163 Gross Unrealized Depreciation (38,327,693) ------------ Net Unrealized Depreciation $(34,478,530) ============ See Accompanying Notes to Financial Statements 117 Pilgrim Worldwide Emerging Markets Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued) -------------------------------------------------------------------------------- Percentage of Industry Net Assets -------- ---------- Aerospace/Defense 0.51% Banks 7.29% Beverages 2.79% Building Materials 0.60% Computers 1.81% Diversified Financial Services 1.97% Electric 5.22% Electrical Components & Equipment 1.73% Electronics 0.39% Entertainment 1.24% Food 0.72% Forest Products & Paper 0.33% Holding Companies-Diversified 3.51% Home Furnishings 0.72% Insurance 1.63% Internet 1.03% Media 2.19% Metal Fabricate/Hardware 0.26% Mining 0.56% Oil & Gas Producers 10.81% Pharmaceuticals 3.06% Retail 1.77% Semiconductors 4.96% Software 5.31% Telecommunications 19.09% Tobacco 1.09% Short-Term Investments 12.73% Other Assets and Liabilities, Net 6.68% ------ NET ASSETS 100.00% ====== See Accompanying Notes to Financial Statements 118 Pilgrim Global Technology Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 -------------------------------------------------------------------------------- Shares Value -------------------------------------------------------------------------------- COMMON STOCKS: 90.92% BERMUDA: 3.38% 26,000 @ FLAG Telcom Holdings, Ltd. $ 300,625 --------- Total Bermuda 300,625 --------- FINLAND: 1.76% 7,100 Sonera OYJ 156,411 --------- Total Finland 156,411 --------- FRANCE: 4.49% 6,400 Alcatel SA 399,200 --------- Total France 399,200 --------- GERMANY: 3.42% 499 @ Adlink Internet Media AG 3,049 4,000 @ Elmos Semiconductor AG 132,382 4,000 @ Infineon Technologies AG 168,939 --------- Total Germany 304,370 --------- HONG KONG: 0.34% 200,000 Yuxing Infotech Holdings, Ltd. 30,517 --------- Total Hong Kong 30,517 --------- ISRAEL: 0.26% 2,500 @ Orckit Communications, Ltd. 12,344 2,500 @ Tioga Technologies, Ltd. 10,547 --------- Total Israel 22,891 --------- JAPAN: 23.42% 5,200 Capcom Co., Ltd. 201,109 1,400 Citizen Electronics Co. 102,002 12,000 Fujitsu, Ltd. 213,793 600 Hikari Tsushin Inc. 10,173 9,000 Matsushita Electric Industrial Co. 261,467 28,000 Mitsubishi Electric Corp. 201,182 13 NTT Data Corp. 101,269 13 NTT Docomo Inc. 320,488 600 Softbank Corp. 36,017 3,800 Sony Corp. 303,680 5,000 Square Co., Ltd. 174,128 2,000 Tokyo Electron, Ltd. 156,532 --------- Total Japan 2,081,840 --------- NETHERLANDS: 5.99% 6,305 Koninklijke Philips Electronics NV $ 247,778 8,000 @ United Pan-Europe Communications NV 140,189 12,000 @ World Online International NV 144,092 --------- Total Netherlands 532,059 --------- PORTUGAL: 2.56% 2,000 @ Impreza SGPS 15,869 58,002 @ Pararede SGPS S.A. 212,140 --------- Total Portugal 228,009 --------- SOUTH KOREA: 3.81% 5,000 Korea Telecom ADR 184,375 47,900 Mirae Co. Limited ADR 154,178 --------- Total South Korea 338,553 --------- SPAIN: 3.11% 14,500 @ Telefonica S.A. 276,487 --------- Total Spain 276,487 --------- SWEDEN: 2.22% 14,800 Telefonaktiebolaget LM Ericsson 196,992 --------- Total Sweden 196,992 --------- SWITZERLAND: 2.56% 9,000 Swisscom AG ADR 227,250 --------- Total Switzerland 227,250 --------- TAIWAN: 1.31% 5,120 @ Taiwan Semiconductor Manufacturing Co. Limited 116,160 --------- Total Taiwan 116,160 --------- UNITED KINGDOM: 3.05% 65,200 Vodafone Group, PLC 271,271 --------- Total United Kingdom 271,271 --------- UNITED STATES: 29.24% 1,500 @ Agilent Technologies, Inc. $ 69,469 0 @ Avaya Inc. -- 4,500 @ Caliper Technologies Corp., NMS 253,547 2,500 @ Conexant Systems, Inc. 65,859 8,000 @ Electronic Arts, Inc. 399,750 6,300 @ Entrust Technologies, Inc. 193,528 7,900 @ Intersil Holding Corp. 378,706 20,000 @ Litronic, Inc. 142,500 6,000 Lucent Technologies, Inc. 139,875 9,000 @ Motient Corp. 108,844 500 @ New Focus, Inc. 31,734 4,000 @ Phone.com, Inc. 370,375 25,000 @ Saflink Corp. 32,031 5,900 @ Vitesse Semiconductor Corp. 412,631 --------- Total United States 2,598,849 --------- Total Common Stocks (Cost $12,101,862) 8,081,484 --------- Total Long-Term Investments (Cost $12,101,862) 8,081,484 --------- Total Investments in Securities (Cost $12,101,962)* 90.92% $8,081,484 ------ ---------- Other Assets and Liabilities-Net 9.08% 806,714 Net Assets 100.00% $8,888,197 ------ ---------- @ Non-income producing security ADR American Depository Receipt * Cost for federal income tax purposes is $12,340,632. Net unrealized depreciation consists of: Gross Unrealized Appreciation $ 216,328 Gross Unrealized Depreciation (4,475,476) ----------- Depreciation Net Unrealized $(4,259,148) =========== See Accompanying Notes to Financial Statements 119 Pilgrim Global Technology Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued) -------------------------------------------------------------------------------- Percentage of Industry Net Assets -------- ---------- Advertising Services 0.03% Audio/Video Products 6.36% Cellular Telecommunications 6.66% Computer Services 1.95% Computers-Integrated Systems 2.41% Electric Products-Miscellaneous 2.26% Electronic Components-Semiconductor 11.35% Electronic Components-Miscellaneous 4.30% Electronic Measurement Instruments 0.78% Enterprise Software/Service 2.39% Entertainment Software 8.71% Internet Content-Entertainment 1.62% Internet Incubators 0.41% Internet Security 2.18% Internet Telephony 4.17% Multimedia 0.18% Networking Products 1.57% Semicon Components-Integrated Circuits 5.95% Semiconductor Equipment 3.50% Telecommunication Equipment 6.95% Telecommunication Services 7.78% Telecommunications Equiptment Fiber Optics 3.74% Telephone-Integrated 5.67% Other Assets and Liabilities, Net 9.08% ------ NET ASSETS 100.00% ====== See Accompanying Notes to Financial Statements 120 Pilgrim Asia-Pacific Equity Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 -------------------------------------------------------------------------------- Shares Value -------------------------------------------------------------------------------- COMMON STOCKS: 83.62% HONG KONG: 31.93% 150,000 Bank of East Asia $ 338,505 85,000 Cheung Kong Holdings 940,024 276,000 China Everbright Ltd. 245,955 304,000 China Merchants Holdings Int'l Co. Ltd. 210,488 131,500 @ China Mobile Hong Kong Ltd. 843,057 1,250,000 China National Aviation 189,127 110,000 @ China Unicom 220,733 48,000 Citic Pacific Ltd. 192,640 70,000 DAO Heung Bank Group Ltd. 353,635 80,700 Hutchison Whampoa 1,003,706 750,000 JCG Holdings Ltd. 399,040 555,972 @ Pacific Century CyberWorks Ltd. 427,699 40,000 Sun Hung Kai Properties Ltd. 328,247 60,000 Television Broadcasts Ltd. 328,504 ---------- Total Hong Kong 6,021,360 ---------- INDONESIA: 0.51% 90,000 Gudang Garam Tbk (Pt) 96,634 ---------- Total Indonesia 96,634 ---------- MALAYSIA: 3.98% 85,000 @ Malayan Banking Berhad 340,000 103,000 Resorts World Berhad 180,250 71,000 Tenaga Nasional Berhad 229,816 ---------- Total Malaysia 750,066 ---------- SINGAPORE: 15.40% 33,000 @ Chartered Semiconductor Manufacturing Ltd. $ 142,800 60,000 City Developments Ltd. 276,718 64,035 DBS Group Holdings Ltd 754,726 520,000 @ Pacific Century 399,704 60,000 Singapore Airlines Ltd. 601,264 20,000 Singapore Press Holdings 285,828 200,000 Singapore Telecommunications 331,378 68,000 @ ST Assembly Test Services Ltd 111,894 ---------- Total Singapore 2,904,312 ---------- SOUTH KOREA: 14.41% 25,000 H&CB 601,099 15,000 @ Hyundai Electronics Industries 92,176 25,000 Korea Electric Power Corp. 558,242 11,530 Korea Telecom ADR 425,168 5,860 Samsung Electronics 734,110 1,440 SK Telecom 306,989 ---------- Total South Korea 2,717,784 ---------- TAIWAN: 15.36% 7,510 ACER GDR 31,167 44,590 Asustek Computer Inc. GDR 244,128 21,843 China Steel Corp. 251,194 28,365 Far Eastern Textile Co. Ltd. GDR 229,757 32,123 HON HAI Precision Industry GDR 370,218 2,300 Siliconware Precision Inds 138,303 30,036 Ritek Corporation GDR 112,932 22,760 Siliconware Precision Industries Ltd. ADR 91,036 16,822 Synnex Technology Int'l Corp. GDR 140,043 32,678 @ Taiwan Semiconductor Manufacturing Co. Ltd. ADR 741,391 39,000 United Microelectronics ADR 443,625 10,550 @ Winbond Electronics Corp. GDR 102,599 ---------- Total Taiwan 2,896,393 ---------- THAILAND: 2.03% 27,500 @ Advanced Info Service Public Co Ltd. $ 226,198 7,500 @ Siam Cement 70,552 170,000 @ Thai Farmers Bank 87,878 ---------- Total Thailand 384,628 ---------- Total Common Stocks (Cost $20,659,007) 15,771,177 ---------- PREFERRED STOCK: 0.66% THAILAND: 0.66% 300,000 @ Siam Commercial Bank Ltd. 124,404 ---------- Total Thailand 124,404 ---------- Total Preferred Stock (Cost $254,508) 124,404 ---------- WARRANTS: 0.11% THAILAND: 0.11% 274,000 @ Siam Commercial Bank Ltd. 19,924 ---------- Total Thailand 19,924 ---------- Total Warrants (Cost $0) 19,924 ---------- Total Long Term Investments (Cost $20,913,515) 15,915,505 ---------- See Accompanying Notes to Financial Statements 121 Pilgrim Asia-Pacific Equity Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued) -------------------------------------------------------------------------------- Principal Amount Value -------------------------------------------------------------------------------- SHORT TERM INVESTMENTS: 3.92% REPURCHASE AGREEMENT: 3.92% $ 740,000 State Street Bank & Trust Repurchase Agreement, 6.450% due 11/01/2000 (Collateralized by $5,845,000 U.S. Treasury Notes, 7.875% Due 11/15/04, Market Value $6,246,844) $ 740,000 ----------- Total Short-Term Investments (Cost $740,000) 740,000 ----------- Total Investments in Securities (Cost $21,653,515) 88.31% $16,655,505 Other Assets and Liabilities-Net 11.69% 2,204,585 ------ ----------- Net Assets 100.00% $18,860,090 ====== =========== @ Non-income producing security ADR American Depository Receipt GDR Global Depository Receipt * Cost for federal income tax purposes is the same as for financial statement purposes. Net unrealized depreciation consists of: Gross Unrealized Appreciation $ 417,765 Gross Unrealized Depreciation (5,415,775) ----------- Net Unrealized Depreciation $(4,998,010) =========== See Accompanying Notes to Financial Statements 122 Pilgrim Asia-Pacific Equity Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued) -------------------------------------------------------------------------------- Percentage of Industry Net Assets -------- ---------- Airlines 3.19% Banks 13.89% Building Materials 0.37% Chemicals 1.12% Computers 1.51% Diversified Financial Services 3.42% Electric 4.18% Electrical Companies & Equipment 3.89% Electronics 3.26% Entertainment 0.96% Holding Companies-Diversified 6.34% Internet 2.12% Iron/Steel 1.33% Media 3.26% Real Estate 12.68% Semiconductors 9.88% Telecommunications 12.48% Tobacco 0.51% Short-Term Investments 3.92% Other Assets and Liabilities, Net 11.69% ------ NET ASSETS 100.00% ====== See Accompanying Notes to Financial Statements 123 Pilgrim SmallCap Asia Growth Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued) -------------------------------------------------------------------------------- Shares Country/Issuer Value -------------------------------------------------------------------------------- COMMON STOCKS: 77.87% CHINA: 3.09% 600,000 Beijing Datang Power Gen. Co. Ltd. $ 143,095 --------- Total China 143,095 --------- HONG KONG: 31.16% 376,000 @ APT Satellite Holdings Ltd. 206,103 124,700 @ Asiaworld Online 48,175 70,000 Bank of East Asia 157,969 13,000 Cheung Kong (Holdings) 143,768 22,000 @ China Mobile (Hong Kong) Ltd. 141,044 650,000 China National Aviation 98,346 70,000 @ China Unicom 140,467 30,000 Citic Pacific Ltd. 120,400 70,000 Hong Kong Exchanges and Clearing Ltd. 122,067 13,200 Hutchison Whampoa 164,175 130,000 Pacific Century CyberWorks Ltd. 100,013 --------- Total Hong Kong 1,442,527 --------- SINGAPORE: 10.18% 11,000 DBS Group Holdings Ltd. 129,648 127,000 @ Neptune Orient Lines 107,744 17,650 Oversea-Chinese Banking Corp. 112,555 8,500 Singapore Press Holdings 121,475 --------- Total Singapore 471,422 --------- SOUTH KOREA: 12.80% 5,000 Korea Electric Power Corp. 111,648 2,500 Korea Telecom 147,253 1,000 Samsung Electronics 125,275 0 Samsung Fire & Marine INS 3 10,000 Shinhan Bank 100,220 9,000 SK Corp. 108,396 --------- Total South Korea 592,795 --------- TAIWAN: 15.25% 100,000 Acer Inc. $ 82,972 82,845 @ Advanced Semiconductor Engineering Inc. 95,156 20,240 Asustek Computer Inc. 100,887 112,000 Far Eastern Textile Co. Ltd. 92,206 27,750 @ Ritek Corp. 53,266 120 @ Stark Technology Inc. 736 38,400 @ Taiwan Semiconductor Manufacturing Co. Ltd. 116,508 60,000 United Microelectronics 105,882 60,000 @ Winbond Electronics Corp. 58,142 --------- Total Taiwan 705,755 --------- THAILAND: 1.78% 33,600 PTT Exploration & Production Public Co. Ltd. 82,454 --------- Total Thailand 82,454 --------- UNITED KINGDOM: 3.61% 12,000 HSBC Holdings PLC $ 166,945 --------- Total United Kingdom 166,945 --------- Total Common Stocks (Cost $4,632,559) 3,604,993 --------- Total Long Term Investments (Cost $4,632,559) 3,604,993 --------- Total Investments in Securities (Cost $4,632,559) 77.87% $ 3,604,993 Other Assets and Liabilities-Net 22.13% 1,024,735 ------ ----------- Net Assets 100.00% $ 4,629,728 ====== =========== @ Non-income producing security ADR -- American Depository Receipt * Cost for federal income tax purposes is $4,650,448. Net unrealized depreciation consists of: Gross Unrealized Appreciation $ 345,967 Gross Unrealized Depreciation (1,391,422) ----------- Net Unrealized Depreciation $(1,045,455) =========== See Accompanying Notes to Financial Statements 124 Pilgrim SmallCap Asia Growth Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued) -------------------------------------------------------------------------------- Percentage of Industry Net Assets -------- ---------- Banks 14.41% Computers 2.94% Distribution/Wholesale 0.02% Diversified Financial Services 2.64% Electric 5.50% Electrical Components & Equipment 2.71% Electronics 2.18% Holding Companies-Diversified 6.15% Insurance 0.00% Internet 3.21% Media 2.62% Oil&Gas Producers 4.12% Real Estate 5.23% Semiconductors 8.11% Telecommunications 13.71% Textiles 1.99% Transportation 2.33% Other Assets and Liabilities, Net 22.13% ------ NET ASSETS 100.00% ====== See Accompanying Notes to Financial Statements 125 Pilgrim Troika Dialog Russia Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 -------------------------------------------------------------------------------- Shares Value -------------------------------------------------------------------------------- COMMON STOCKS: 63.29% Aerospace/Defense: 0.08% 65,000,000 @ Aviastar $ 42,193 ---------- Airlines: 1.09% 2,446,350 Aeroflot 583,454 ---------- Brewery: 3.62% 47,800 @ Sun Interbrew, Ltd. 101,408 1,135,350 @ Sun Interbrew, Ltd. GDR 1,841,424 ---------- 1,942,832 ---------- Building Materials: 0.01% 38,000 @ Alfa Cement 573 21,900 @ Materiel CIMT Lorraine** 435 ---------- 1,008 ---------- Cellular Telecommunications: 4.37% 120,964 @ Vimpel Communications ADR 2,343,677 2 Vimpel Communications 52 ---------- 2,343,729 ---------- Electricity: 5.39% 5,500,000 @ Komienergo 21 40,050,000 Mosenergo 1,273,590 50,000 Mosenergo Spons Adr 159,000 20,000 @ Novosibirskelectrosviaz 29,000 1,335,000 Sverdlovskenergo 54,735 10,900,000 Unified Energy Sys -rues 1,376,670 ---------- 2,893,016 ---------- Food: 0.00% 23,800 @ Samson 168 ---------- Gas Distribution: 0.51% 35,000 Gazprom ADR 274,750 ---------- Medical Equipment: 0.02% 11,200,000 Zvezda 9,308 ---------- Mining: 2.63% 183,000 Norilsk Nickel 1,409,100 ---------- Oil Companies-Exploration & Production: 1.88% 96,982 Megionneftegaz 242,455 180,300 Sakhalinmorneftegaz 766,275 ---------- 1,008,730 ---------- Oil Companies - Integrated: 27.17% 278,700 Ao Tatneft Sponsored ADR $2,856,674 21 @ Komitek Oil Co. 9 83,000 Lukoil Co. Spons ADR 4,411,450 38,000 Lukoil Holdings 505,400 26,070 @ Purneftegaz 59,961 279,000 @ Surgutneftegaz 71,480 213,000 Surgutneftegaz ADR 2,726,400 1,876,000 Tatneft 942,690 1,708,686 Yukos Holdings 2,998,743 ---------- 14,572,807 ---------- Oil and Gas Drilling: 0.02% 5,384,500 Rosneftegazstroy ADR 10,769 ---------- Retail: 0.69% 7,000 @ Gostinny Dvor 313 235,000 Trade House Gum 340,750 10,000 Trade House Gum ADR 29,000 ---------- 370,063 ---------- Steel Pipe & Tube Manufacturing: 0.09% 1,002,000 @ Chelyabinsk Pipe Works 48,096 ---------- Telecommunication Services: 8.76% 6,831,400 Bashinformsvyaz 437,292 129,600 @ Golden Telecom, Inc. 2,000,700 270,000 @ Irkutskelektrosviaz 143,100 85,300 Kubanelectrosvyaz 810,350 9,500 Lensviaz 57,950 656,000 Nizhnovsviyazinform 772,922 20,383 @ Novosibirsk Telephone 224,213 20,000 St. Petersburg MMT 9,519 10,000,000 Uralsvyazinform 113,000 42,500 Uralsvyazinform ADR 104,588 5,000 Uraltelecom 23,846 ---------- 4,697,480 ---------- Telephone-Integrated: 3.66% 24,610 Chelyabinskvyazinform 553,725 20,000 Rostelecom Sponsored ADR 171,250 898,904 Rostelekom 1,240,488 ---------- 1,965,463 ---------- Telephone-Local: 3.30% 1,100 @ Moscow Region Electrosvyaz $ 220,000 238,125 Rostov Region Electrosvyaz 228,600 28,000 Samarasvyazinform 1,008,000 350,000 St. Petersburg Telephone 175,000 214,000 Tyumentelecom 139,100 ---------- 1,770,700 ---------- Total Common Stocks (Cost $49,019,765) 33,943,666 ---------- PREFERRED STOCKS: 24.05% Electricity: 3.17% 450,000 @ Chelyaben 3,150 46,000 Krasnoyarskenergo 82,800 24,600 Permenergo 7,704 32,861,738 Unified Energy System 1,606,939 ---------- 1,700,593 ---------- Mining: 5.73% 433,000 Norilsk Nickel 3,074,300 ---------- Oil Companies-Exploration & Production: 0.15% 4,000 @ Udmurtneft 80,000 ---------- Oil Companies-Integrated: 13.97% 40,000 Lukoil-Holding Pfd. ADR 888,000 213,750 Lukoil-Holding 2,372,625 95,000 Surgutneftegaz ADR 1,254,000 22,570,000 Surgutneftegaz 2,979,240 ---------- 7,493,865 ---------- Pipeline Oil Transportation: 0.00% 1,800 @ Transneft 185 ---------- Telecommunication Services: 0.73% 189,500 Moscow City Telephone Network 255,825 427,000 @ Nizhnovsvyazinform 134,563 100,000 Smolensksvyazinform 2,610 ---------- 392,998 ---------- Telephone-Integrated: 0.04% 50,000 Rostelecom 23,000 ---------- Telephone-Local: 0.26% 9,300 Samarasvyazinform 88,350 110,000 St. Petersburg Telephone 20,900 279,099 Tyumentelecom 27,910 ---------- 137,160 ---------- Total Preferred Stocks (Cost $15,047,855) 12,902,101 ---------- See Accompanying Notes to Financial Statements 126 Pilgrim Troika Dialog Russia Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued) -------------------------------------------------------------------------------- Shares Value -------------------------------------------------------------------------------- GOVERNMENT BONDS: 3.45% Russian Federation Bond: 3.45% 5,000,000 Russian $1,850,000 ---------- Federation Bond 2.500%, Due 3/31/2030 (Cost $1,800,245) Total Government Bonds (Cost $1,850,000) 1,800,245) ---------- Total Long Term Investments (Cost $65,867,865) 48,695,767 ---------- Principal Amount Value -------------------------------------------------------------------------------- SHORT TERM INVESTMENTS: 3.68% U.S. Treasury Obligations: 3.68% $2,000,000 U.S. Treasury Bills 6.120%, due 01/11/01 $ 1,975,860 ------------ Total Short-Term Investments (Cost $1,975,860) 1,975,860 ------------ Total Investments in Securities (Cost $67,843,725)* 94.47% $ 50,671,627 Other Assets and Liabilities-Net 5.53% 2,964,925 ------ ------------ Net Assets 100.00% $ 53,636,552 ====== ============ @ Non-income producing security ** Investment in France ADR -- American Depository Receipt GDR -- Global Depository Receipt * Cost for federal income tax purposes is $74,107,970. Net unrealized depreciation consists of: Gross Unrealized Appreciation $ 2,101,176 Gross Unrealized Depreciation (25,537,519) ------------ Net Unrealized Depreciation $(23,436,343) ============ See Accompanying Notes to Financial Statements 127 Pilgrim Troika Dialog Russia Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued) -------------------------------------------------------------------------------- Percentage of Industry Net Assets -------- ---------- Aerospace/Defense 0.08% Airlines 1.09% Brewery 3.62% Building Material 0.00% Cellular Telecommunications 4.37% Electric 8.56% Food 0.00% Gas Distribution 0.51% Medical Equipment 0.02% Mining 8.36% Oil Companies-Exploration & Production 2.03% Oil Comp-Integrated 41.14% Oil & Gas Drilling 0.02% Pipeline Oil Transportation 0.00% Retail 0.69% Russian Bond 3.45% Steel Pipe and Tube Manufacturing 0.09% Telecom Services 9.49% Telephone-Integrated 3.71% Telephone-Local 3.56% Short-Term Investments 3.68% Other Assets and Liabilities, Net 5.53% ------ NET ASSETS 100.00% ====== See Accompanying Notes to Financial Statements 128 Pilgrim Gold Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 -------------------------------------------------------------------------------- Shares Value -------------------------------------------------------------------------------- COMMON STOCKS: 81.66% AUSTRALIA 4.99% 527,172 Newcrest Mining $1,038,387 2,002,539 Normandy Mining, Ltd. 965,355 ---------- Total Australia 2,003,742 ---------- CANADA 37.75% 443,000 Agnico Eagle Mines, Ltd. 2,353,438 130,000 Barrick Gold Corp. 1,738,750 700,000 @ Claude Resources, Inc. 210,802 136,500 Franco Nevada Mining, Ltd. 1,251,064 541,400 @ Goldcorp, Inc. 3,243,083 250,000 @ Great Basin Gold, Ltd. 270,049 523,600 @ Iamgold Corp. 925,512 470,000 @ Meridian Gold, Inc. 2,369,231 75,000 @ North Amern Palladium, Ltd. 466,448 285,500 Placer Dome, Inc. 2,319,688 ---------- Total Canada 15,148,065 ---------- SOUTH AFRICA 26.09% 71,749 Anglo American Platinum 2,799,100 33,749 Angloglold 959,577 477,900 Goldfields, Ltd. 1,422,002 200,000 Goldfields, Ltd. ADR 593,750 641,656 Harmony Gold Mining 2,448,097 52,460 Impala Platinum 2,247,780 ---------- Total South Africa 10,470,306 ---------- UNITED STATES 12.83% 177,600 @ Freeport McMoran Copper & Gold, Inc. 1,376,400 453,570 Homestake Mining Co. 1,870,976 140,170 Newmont Mining Corp. 1,901,056 ---------- Total United States 5,148,432 ---------- Total Common Stocks (Cost $45,190,181) 32,770,545 ---------- WARRANTS: 0.00% 200,000 @ Claude Resources, Inc. (Expires 12/31/2010) -- ---------- Total Warrants (Cost $0) -- ---------- Shares/Ounces Value -------------------------------------------------------------------------------- COMMODITIES: 6.29% 9,513 @ Gold Bullion 2,523,691 ---------- Total Commodities (Cost $3,640,945) 2,523,691 ---------- Total Long Term Investments (Cost $48,831,126) 35,294,236 ---------- Principal Amount Value -------------------------------------------------------------------------------- SHORT TERM INVESTMENTS: 11.08% U.S. TREASURY BILLS: 11.08% $4,500,000 United States Treasury Bills, 6.120%, Due 01/11/01 (Cost $4,445,685) $ 4,445,685 ------------ Total Short-Term Investments (Cost $4,445,685) 4,445,685 ------------ Total Investments in Securities (Cost $53,276,811)* 99.03% $ 39,739,921 Other Assets and Liabilities-Net 0.97% 390,053 ------ ------------ Net Assets 100.00% $ 40,129,974 ====== ============ @ Non-income producing security ADR -- American Depository Receipt * Cost for federal income tax purposes is $54,389,600. Net unrealized depreciation consists of: Gross Unrealized Appreciation $ 2,072,724 Gross Unrealized Depreciation (16,722,403) ------------ Net Unrealized Depreciation $(14,649,679) ============ See Accompanying Notes to Financial Statements 129 Pilgrim Gold Fund PORTFOLIO OF INVESTMENTS as of October 31,2000 (Continued) -------------------------------------------------------------------------------- Percentage of Industry Net Assets -------- ---------- Gold Bullion 6.29% Gold Mining 64.49% Metal-Diversified 3.43% Platinum 13.74% Short-Term Investments 11.08% Other Assets and Liabilities, Net 0.97% ------ NET ASSETS 100.00% ====== See Accompanying Notes to Financial Statements 130 Pilgrim Silver Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 -------------------------------------------------------------------------------- Shares Country/Issuer Value -------------------------------------------------------------------------------- COMMON STOCKS: 63.19% CANADA: 12.74% 213,000 @ Meridian Gold, Inc. $1,065,000 25,000 @ North American Palladium Ltd. 155,483 300,000 @ Silver Standard Resources, Inc. 324,059 50,000 @ Silver Standard Resources, Inc. 58,594 350,000 @ Tiomin Resources, Inc. 206,219 75,000 @ Western Copper Holdings Ltd. 63,830 ---------- Total Canada 1,873,185 ---------- IRELAND: 1.52% 375,000 @ Ivernia West 223,083 ---------- Total Ireland 223,083 ---------- MEXICO: 17.36% 645,000 @ Industrias Penoles SA 752,753 404,016 @ Nueva Grupo Mexico 1,343,551 290,056 @ Sanluis Corp. SA 454,990 ---------- Total Mexico 2,551,294 ---------- PERU: 6.94% 157,009 @ Buenaventura SA 1,019,017 ---------- Total Peru 1,019,017 ---------- POLAND: 3.73% 51,000 @ KGHM Polska Miedz SA GDR 548,250 ---------- Total Poland 548,250 ---------- UNITED KINGDOM: 3.99% 9,000 @ Rio Tinto Place ADR 586,125 ---------- Total United Kingdom 586,125 ---------- UNITED STATES: 16.91% 95,000 @ Apex Silver Mines Ltd. $ 866,874 250,600 @ Coeur D'alene Mines Corp. 250,600 99,000 @ Freeport-McMoran Copper & Gold, Inc. 773,438 143,500 @ Homestake Mining Co. 591,937 ---------- Total United States 2,482,849 ---------- Total Common Stocks (Cost $16,567,413) 9,283,803 ---------- COMMODITIES: 8.38% 259,613 @ Silver Bullion 1,230,564 ---------- Total Commodities (Cost $1,453,281) 1,230,564 ---------- Total Long Term Investments (Cost $18,020,694) 10,514,367 ---------- Principal Amount Value -------------------------------------------------------------------------------- SHORT TERM INVESTMENTS: 23.54% U.S. Treasury Bills: 23.54% $3,500,000 U.S. Treasury Bills 6.120%, due 01/11/01 (Cost $3,457,755) $ 3,457,755 ------------ Total Short-Term Investments (Cost $3,457,755) 3,457,755 ------------ Total Investments in Securities (Cost $21,478,449)* 95.11% $ 13,972,122 Other Assets and Liabilities-Net 4.89% 718,757 ------ ------------ Net Assets 100.00% $ 14,690,879 ====== ============ @ Non-income producing security ADR -- American Depository Receipt GDR -- Global Depository Receipt * Cost for federal income tax purposes is the same as for financial statement purposes. Net unrealized depreciation consists of: Gross Unrealized Appreciation $ 363,981 Gross Unrealized Depreciation (7,870,308) ------------ Net Unrealized Depreciation $ (7,506,327) ============ See Accompanying Notes to Financial Statements 131 Pilgrim Silver Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued) -------------------------------------------------------------------------------- Percentage of Industry Net Assets -------- ---------- Auto/Truck Parts & Equipment-Replacement 3.09% Diversified Minerals 3.99% Gold Mining 11.28% Metal-Copper 0.43% Metal-Diversified 5.14% Other-Non-ferrous 21.05% Platinum 1.06% Precious Metals 1.71% Silver Bullion 8.38% Silver Mining 15.44% Short-Term Investments 23.54% Other Assets and Liabilities, Net 4.89% ------ NET ASSETS 100.00% ====== See Accompanying Notes to Financial Statements 132 Pilgrim Global Income Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 -------------------------------------------------------------------------------- Principal Amount Value -------------------------------------------------------------------------------- CORPORATE BONDS: 93.56% DENMARK: 5.69% 3,365,000 Danskekredit, 6.000%, due 10/01/29 $ 360,310 4,573,000 Realkredit Danmark A/S, 6.000%, due 10/01/29 489,657 1,000 Unikredit Realkredit, 6.000%, due 10/01/29 107 ---------- Total Denmark 850,074 ---------- DOMINICAN REPUBLIC: 4.03% 200,000 Dominican Republic Bond, 5.750%, 08/30/24 132,000 500,000 Tricom SA, 11.375%, due 09/01/04 468,750 ---------- Total Dominican 600,750 ---------- GREECE: 9.26% 310,000,000 Hellenic Republic Government Bond, 12.000%, due 02/12/03 803,935 200,000,000 Hellenic Republic Government Bond, 8.800%, due 06/19/07 577,144 ---------- Total Greece 1,381,079 ---------- HUNGARY: 11.00% 300,000,000 Hungary Government Bond, 12.500%, due 09/24/02 990,867 200,000,000 Hungary Government Bond, 16.000, due 11/24/00 648,811 ---------- Total Hungary 1,639,678 ---------- PHILIPPINES: 6.36% 50,000,000 Philippine Government Bond, 18.000%, due 11/26/08 947,576 ---------- Total Philippines POLAND: 18.01% 4,500,000 Poland Government Bond, 12.000%, due 06/12/01 927,795 4,000,000 Poland Government Bond, 12.000%, due 02/12/03 768,751 5,000,000 Poland Treasury Bill 987,690 ---------- Total Poland 2,684,236 ---------- 5,100,000 Eskom, Ltd., 11.000%, due 06/01/08 $ 580,053 2,000,000 South Africa Government Bond, 12.000%, due 02/28/05 255,953 ---------- Total South Africa 836,006 ---------- UNITED STATES: 33.60% 548,064 ABN Amro Mortgage Corp., 6.708%, 04/25/28 302,928 300,000 Archibald Candy Corp., 10.250%, due 07/01/04 168,375 549,647 BA Mortgage Securities, Inc., 7.250%, due 10/25/27 320,169 950,000 Clark Material Handling Corp., 10.750%, due 11/15/06 52,250 166,119 DLJ Mortgage Acceptance Corp., 7.250%, 09/25/11 120,229 906,646 Norwest Asset Securities Corp., 7.500%, 05/25/27 554,188 423,581 PNC Mortgage Securities Corp., 1999-1 Series 2b4 6.250%, due 02/25/14 320,863 141,193 PNC Mortgage Securities Corp., 1999-1 Series 2b5 6.250%, due 02/25/14 88,246 141,193 PNC Mortgage Securities Corp., 1999-1 Series 2b6 6.250%, due 02/25/14 28,415 1,260,119 PNC Mortgage Securities Corp., 1998-1 Series 1b6 6.500%, due 11/25/28 228,397 680,134 PNC Mortgage Securities Corp., 6.625%, due 03/25/28 340,067 256,548 PNC Mortgage Securities Corp., 1998-2 Series 4b6 6.750%, due 12/25/27 71,833 484,361 PNC Mortgage Securities Corp., 2000-4 Series Cb4 6.811%, due 06/25/30 350,556 605,451 PNC Mortgage Securities Corp., 2000-4 Series Cb5 6.811%, due 06/25/30 $328,457 605,451 PNC Mortgage Securities Corp., 2000-4 Series Cb6 6.811%, due 06/25/30 124,874 678,937 PNC Mortgage Securities Corp., 1997 Series Cmd 7.250%, due 09/25/12 388,691 272,093 Residential Asset Securitization Trust, 7.250%, due 09/25/12 221,074 1,000,000 United States Treasury Note/Bond, 5.75%, due 08/15/10 999,060 ---------- Total United States 5,008,672 ---------- Total Corporate Bonds (Cost $18,811,991) 13,948,071 ---------- SHORT TERM INVESTMENTS: 1.99% Government Obligations: 1.99% $ 300,000 U.S. Treasury Bill, 6.080%, due 01/18/01 296,048 ----------- Total Short-Term Investments (Cost $296,048) 296,048 ----------- Total Investments in Securities (Cost $19,108,039)* 95.55% $14,244,119 Other Assets and Liabilities-Net 4.45% 662,924 ------ ----------- Net Assets 100.00% $14,907,043 ====== =========== * Cost for federal income tax purposes is $19,108,170. Net unrealized depreciation consists of: Gross Unrealized Appreciation $ 622 Gross Unrealized Depreciation (4,864,673) ----------- Net Unrealized Depreciation $(4,864,051) =========== See Accompanying Notes to Financial Statements 133 Pilgrim Global Income Fund PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued) -------------------------------------------------------------------------------- % Total Industry Investments -------- ----------- Foreign Governments & Agencies 51.11% Financial Services 28.57% Government & Agency 6.70% Financial -- Miscellaneous 5.70% Transportation 1.48% Short-term Investments 1.99% Other Assets and Liabilities, Net 4.45% ------ TOTAL BY INDUSTRY 100.00% ====== See Accompanying Notes to Financial Statements 134 SHAREHOLDER MEETING (Unaudited) -------------------------------------------------------------------------------- A special meeting of shareholders of the former Lexington Funds was held in Saddle Brook, New Jersey on July 21, 2000. A brief description of each matter voted upon as well as the results are outline below:
Shares Shares voted against Shares Broker voted for or withheld abstained non-vote Total --------- ------------- --------- -------- ---------- 1. To elect eleven (11) Directors or Trustees, as the case may be, to hold office until the election and qualification of their successors: (a) Al Burton 31,106,277 2,440,203 -- -- 33,546,480 Paul S. Doherty 31,133,530 2,412,950 -- -- 33,546,480 Robert B. Goode, Jr. 31,124,988 2,421,492 -- -- 33,546,480 Alan L. Gosule 31,152,538 2,393,942 -- -- 33,546,480 Walter H. May 31,151,129 2,395,351 -- -- 33,546,480 Jock Patton 31,149,524 2,396,956 -- -- 33,546,480 David W.C. Putnam 31,144,248 2,402,232 -- -- 33,546,480 John R. Smith 31,102,788 2,443,692 -- -- 33,546,480 Robert W. Stallings 31,160,104 2,386,376 -- -- 33,546,480 John G. Turner 31,156,146 2,390,334 -- -- 33,546,480 David W. Wallace 31,096,855 2,449,625 -- -- 33,546,480 2. To approve a new Investment Management Agreement between each Fund and Pilgrim Investments, Inc. ("Pilgrim"), an indirect, wholly-owned subsidiary of ReliaStar Financial Corp. ("ReliaStar"), to take effect upon the completion of the proposed acquisition of Lexington Global Asset Managers, Inc. by ReliaStar. Lexington Global Corporate Leaders Fund, Inc. 1,219,941 25,630 35,074 -- 1,280,645 Lexington Global Technology Fund, Inc. (a) 1,125,427 6,521 981 -- 1,132,929 Lexington Goldfund, Inc. 9,536,260 863,506 711,559 -- 11,111,325 Lexington International Fund, Inc. 1,736,342 9,215 2,100 -- 1,747,657 Lexington Silver Fund, Inc. 4,146,057 174,069 266,322 -- 4,586,448 Lexington Small Cap Asia Growth Fund, Inc. 914,635 32,395 17,680 -- 964,710 Lexington Troika Dialog Russia Fund, Inc. 4,558,999 286,854 371,179 -- 5,217,032 Lexington Worldwide Emerging Markets Fund, Inc. 4,443,056 216,017 290,353 -- 4,949,426 Lexington Global Income Fund 2,494,958 32,717 28,729 -- 2,556,404 3. To approve a new Investment Management Agreement between each Fund and Pilgrim to take effect upon the completion of the proposed acquisition of ReliaStar by ING Groep N.V. ("ING"). Lexington Global Corporate Leaders Fund, Inc. 1,218,098 25,529 37,018 -- 1,280,645 Lexington Global Technology Fund, Inc. 1,125,427 6,521 981 -- 1,132,929 Lexington Goldfund, Inc. 9,502,997 881,062 727,266 -- 11,111,325 Lexington International Fund, Inc. 1,735,120 10,437 2,100 -- 1,747,657 Lexington Silver Fund, Inc. 3,997,000 319,938 269,510 -- 4,586,448 Lexington Small Cap Asia Growth Fund, Inc. 915,312 31,978 17,420 -- 964,710 Lexington Troika Dialog Russia Fund, Inc. 4,632,367 211,570 373,095 -- 5,217,032 Lexington Worldwide Emerging Markets Fund, Inc. 4,454,828 198,989 295,609 -- 4,949,426 Lexington Global Income Fund 2,494,750 32,717 28,937 -- 2,556,404 4.a. To approve a new Sub-Adviser Agreement between Pilgrim and Crosby Asset Management (US) Inc., with no effective change in the fees from current Sub-Adviser Agreement, to take effect upon the completion of the proposed acquisition of Lexington Global Asset Managers, Inc. by ReliaStar: Lexington Small Cap Asia Growth Fund, Inc. 915,051 32,240 17,419 -- 964,710 4.b. To approve a new Sub-Adviser Agreement between Pilgrim and Crosby Asset Management (US) Inc., with no effective change in the fees from current Sub-Adviser Agreement, to take effect upon the completion of the proposed acquisition of ReliaStar by ING: Lexington Small Cap Asia Growth Fund, Inc. 915,311 31,979 17,420 -- 964,710 5.a. To approve a new Sub-Adviser Agreement between Pilgrim and Insinger Asset Management N.V., with no effective change in the fees from current Sub-Adviser Agreement, to take effect upon the acquisition of certain regulatory approvals and the completion of the proposed acquisition of Lexington Global Asset Managers, Inc. by ReliaStar: Lexington Small Cap Asia Growth Fund, Inc. 915,311 31,687 17,711 -- 964,709
135 SHAREHOLDER MEETING (Unaudited) Continued --------------------------------------------------------------------------------
Shares Shares voted against Shares Broker voted for or withheld abstained non-vote Total --------- ------------- --------- -------- ---------- 5.b. To approve a new Sub-Adviser Agreement between Pilgrim and Insinger Asset Management N.V., with no effective change in the fees from current Sub-Adviser Agreement, to take effect upon the acquisition of certain regulatory approvals and the completion of the proposed acquisition of ReliaStar by ING: Lexington Small Cap Asia Growth Fund, Inc. 915,051 31,979 17,680 -- 964,710 6.a. To approve a new Sub-Adviser Agreement between Pilgrim and Troika Dialog Asset Management (Cayman Islands) Ltc., with no effective change in the fees from current Sub-Adviser Agreement, to take effect upon the completion of the proposed acquisition of Lexington Global Asset Managers, Inc. by ReliaStar: Lexington Troika Dialog Russia Fund, Inc. 4,634,485 215,952 366,595 -- 5,217,032 6.b. To approve a new Sub-Adviser Agreement between Pilgrim and Troika Dialog Asset Management (Cayman Islands) Ltc., with no effective change in the fees from current Sub-Adviser Agreement, to take effect upon the completion of the proposed acquisition of ReliaStar by ING: Lexington Troika Dialog Russia Fund, Inc. 4,614,297 211,387 391,348 -- 5,217,032 7. To ratify the selection of KPMG LLP as each Fund's independent public accountants for the fiscal year ending December 31, 2000: Lexington Global Corporate Leaders Fund, Inc. 1,231,614 17,014 32,017 -- 1,280,645 Lexington Global Technology Fund, Inc. (a) 1,127,365 3,648 1,826 -- 1,132,839 Lexington Goldfund, Inc. 10,174,034 316,825 620,466 -- 11,111,325 Lexington International Fund, Inc. 1,737,672 9,041 944 -- 1,747,657 Lexington Silver Fund, Inc. 4,238,498 101,927 246,023 -- 4,586,448 Lexington Small Cap Asia Growth Fund, Inc. 925,312 21,979 17,419 -- 964,710 Lexington Troika Dialog Russia Fund, Inc. 4,753,485 107,280 356,267 -- 5,217,032 Lexington Worldwide Emerging Markets Fund, Inc. 4,586,591 113,578 249,257 -- 4,949,426 Lexington Global Income Fund 2,526,321 13,870 16,213 -- 2,556,404 8. To approve a new Service and Distribution Plan for each Fund which would impose on each Fund a fee on an annualized basis of 0.25% of the average daily net assets: Lexington Global Corporate Leaders Fund, Inc. 1,162,690 27,430 36,034 54,491 1,280,645 Lexington Global Technology Fund, Inc. (a) 1,090,298 5,616 2,222 34,703 1,132,839 Lexington Goldfund, Inc. 7,834,170 851,202 771,516 1,654,437 11,111,325 Lexington International Fund, Inc. 1,690,303 11,644 2,100 43,610 1,747,657 Lexington Silver Fund, Inc. 3,079,659 229,820 280,764 996,205 4,586,448 Lexington Small Cap Asia Growth Fund, Inc. 754,360 33,151 17,419 159,780 964,710 Lexington Troika Dialog Russia Fund, Inc. (b) 3,569,893 355,195 402,983 897,242 5,225,313 Lexington Worldwide Emerging Markets Fund, Inc. 3,473,117 249,287 320,013 907,009 4,949,426 Lexington Global Income Fund 2,144,034 23,453 35,514 353,403 2,556,404 9. To approve Amended and Restated Articles of Incorporation for each of the following Funds, each a Maryland corporation: Lexington Global Corporate Leaders Fund, Inc. 1,167,060 23,681 35,413 54,491 1,280,645 Lexington Global Technology Fund, Inc. (a) 1,091,031 5,813 1,292 34,703 1,132,839 Lexington Goldfund, Inc. (c) 8,489,594 728,388 825,149 1,632,376 11,675,507 Lexington International Fund, Inc. 1,693,412 8,916 1,719 43,610 1,747,657 Lexington Silver Fund, Inc. (c) 3,247,675 202,781 284,698 979,932 4,715,086 Lexington Small Cap Asia Growth Fund, Inc. 763,483 24,027 17,420 159,780 964,710 Lexington Troika Dialog Russia Fund, Inc. (c) 3,695,817 296,281 391,927 874,197 5,258,222 Lexington Worldwide Emerging Markets Fund, Inc. (c) 3,749,363 215,444 359,735 869,508 5,194,050 10. To approve an Amended and Restated Declaration of Trust for Lexington Global Income Fund, a Massachusetts business trust: Lexington Global Income Fund 2,147,245 19,161 36,595 353,403 2,556,404
---------- (a) The Special Meeting of Shareholders for Lexington Global Technology Fund, Inc. was adjourned until July 31, 2000 to transact all business as set forth in the Proxy Statement. (b) The Special Meeting of Shareholders for Lexington Troika Dialog Russia Fund, Inc. was adjourned until July 31, 2000 to permit the further solicitation of shareholders for their proxies relating to this proposal. (c) The Special Meeting of Shareholders for Lexington Goldfund, Inc., Lexington Silver Fund, Inc., Lexington Troika Dialog Russia Fund, Inc. and Lexington Worldwide Emerging Markets Fund, Inc. was adjourned until August 30, 2000 to permit the further solicitation of shareholders for their proxies relating to this proposal. 136 Pilgrim Funds -------------- TAX INFORMATION (Unaudited) -------------------------------------------------------------------------------- Dividends paid during the period ended October 31, 2000 were as follows: Fund Name Type Per Share Amount --------- ---- ---------------- International Value Fund(1) All Classes STCG $ 0.1570 All Classes LTCG $ 0.5303 -------- $ 0.6873 ======== International Value Fund(1) Class A NII $ 0.1134 Class B NII $ 0.0291 Class C NII $ 0.0358 Emerging Markets Value Fund(1) All Classes STCG $ 0.2317 All Classes LTCG $ 0.2039 -------- $ 0.4356 ======== Emerging Markets Value Fund(1) Class A NII $ 0.1127 Class B NII $ 0.0390 Class C NII $ 0.0543 International Fund(2) All Classes NII $ 0.8625 Gold Fund(2) All Classes NII $ 0.0008 Silver Fund(2) All Classes NII $ 0.0086 Global Income Fund(2) Class A NII $ 0.1901 Class A ROC $ 0.1027 ---------- (1) For the period ended October 31, 2000. (2) For the period from January 1, 2000 to October 31, 2000. NII -- Net investment income STCG -- Short-term capital gain LTCG -- Long-term capital gain ROC -- Return of capital The above figure may differ from those cited elsewhere in this report due to differences in the calculation of income and gains for Securities and Exchange Commissions (book) purposes and Internal Revenue Service (tax) purposes. The foreign taxes paid or withheld per share, $14,581, $5,170,145, $39,256, $49,532, $1,886,233, $94,237 and $11,503 in total and $0.01, $0.04, $0.01, $0.04, $0.16, $0.01, and $0.01 per share for the Global Corporate Leaders, International Value, International, Emerging Markets Value, Emerging Countries, Worldwide Emerging Markets, and the SmallCap Asia Growth Funds, respectively, represents taxes incurred by the funds from foreign sources. Foreign taxes paid or withheld should be included in taxable income with an offsetting deduction from gross income or as a credit for taxes paid to foreign governments. You should consult your tax advisor regarding the appropriate treatment of foreign taxes paid. Shareholders are strongly advised to consult their own tax advisers with respect to the tax consequences of their Investments in the Funds. In January 2001, shareholders, excluding corporate shareholders, will receive an IRS Form 1099 DIV regarding the federal tax status of the dividends and distributions received by them in calendar 2000. 137 INVESTMENT MANAGER ING Pilgrim Investments, Inc. 7337 E. Doubletree Ranch Road Scottsdale, Arizona 85258 ADMINISTRATOR ING Pilgrim Group, Inc. 7337 E. Doubletree Ranch Road Scottsdale, Arizona 85258 TRANSFER AGENT DST Systems, Inc. P.O. Box 419368 Kansas City, Missouri 64141-6368 CUSTODIAN Brown Brothers Harriman 40 Water Street Boston, Massachusetts 02109-3661 LEGAL COUNSEL Dechert 1775 Eye Street, N.W. Washington, D.C. 20006 INDEPENDENT ACCOUNTANTS PricewaterhouseCoopers LLP 1670 Broadway, Suite 1000 Denver, Colorado 80202 Prospectus containing more complete information regarding the Funds, including charges and expenses, may be obtained by calling ING Pilgrim Securities, Inc. Distributor at 1-800-334-3444. Please read the prospectus carefully before you invest or send money. INTLAN103100-122900