NOTES TO FINANCIAL STATEMENTS
JULY 31, 1999
HighMark Funds ("HighMark" or "the Funds") was organized as a Massachusetts business trust under a
Declaration of Trust dated March 10, 1987. Prior to December 4, 1996, HighMark was known as The
The Funds are registered under the Investment Company Act of 1940, as amended, as a diversified open-end
investment company with fourteen funds: the Growth Fund, the Value Momentum Fund, the Income Equity Fund,
the Balanced Fund, the Emerging Growth Fund, the Small Cap Value Fund, the International Equity Fund, the
California Intermediate Tax-Free Bond Fund, the Bond Fund, the Intermediate-Term Bond Fund, (collectively
the "Non-Money Market Funds") and the 100% U.S. Treasury Money Market Fund, the U.S. Government
Money Market Fund, the Diversified Money Market Fund and the California Tax-Free Money Market Fund
(collectively the "Money Market Funds"). HighMark is registered to offer three classes of shares, Class A and
Class B shares (collectively called the "Retail Shares") and Fiduciary Shares. The Funds' prospectuses provide a
description of each Fund's investment objectives, policies and strategies.
2. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies
followed by the Funds.
BASIS OF PRESENTATION OF STATEMENTS -- The HighMark Funds acquired the Stepstone Funds in a
series of tax-free business combinations. While each Fund now exists legally as a HighMark Fund, a number of
the surviving funds for accounting purposes are Stepstone Funds. In accordance with generally accepted
accounting principles, the financial statements presented herein represent those of the accounting survivors.
Accordingly, the financial highlights presented reflect prior periods beginning on the first day of the accounting
survivor's fiscal year (August 1, 1996 and February 1, 1997, respectively).
SECURITY VALUATION -- Investment securities held by the Money Market Funds are stated at amortized