<PAGE>
JUNDT U.S. EMERGING GROWTH FUND
SEMI-ANNUAL REPORT
JUNE 30, 1996
SEARCHING TODAY FOR THE GENIUSES OF TOMORROW-SM-
<PAGE>
LETTER TO SHAREHOLDERS
- -------------------------------------------------------------------------------
DEAR SHAREHOLDER,
The Jundt U.S. Emerging Growth Fund seeks to provide strong investment returns
by identifying and investing in 30 to 50 companies we believe to be among the
fastest-growing in America, with an emphasis on companies with annual revenues
less than $250 million. In a time of significant technological change,
opportunities for such investment are plentiful, and our challenge is to
identify and target those companies likely to lead an emerging segment. We
believe that such companies are capable of providing extraordinary long-term
returns through rapid growth but are subject to significant stock price
volatility. This aggressive growth investment strategy is most appropriate for
investors with a longer time horizon and who are willing to tolerate the risk of
significant volatility.
REVIEW OF THE FIRST HALF OF 1996 AND MARKET OUTLOOK
During the first six months since the Fund's inception on January 2, 1996, the
Jundt U.S. Emerging Growth Fund has posted returns better than the Russell 2000
Index, as shown in the attached graph. We are investing this Fund in companies
demonstrating rapid growth in revenues, typically greater than 25% annually.
In the midst of the recent stock market volatility, we rely on a long-term
approach to investment. We believe that the current economic outlook for a
steady slow-growth economy is positive for growth stocks. Investments in key
industries and specific companies that have demonstrated an ability to grow
their revenues faster than the economy may result in above average long-term
returns. Most of the companies in this Fund recently have reported results in
line with or above market expectations. The companies in which we invest are
generally changing their industries and the nature of everyday life in the U.S.
We believe that companies establishing corporate intranets and improving the
telecommunications infrastructure present an extraordinary investment
opportunity. The evolution of communications technology and the impact such
technology is having on the management of businesses have enabled many of the
leaders in these fields to flourish. We thus have over 42% of the Fund's net
assets invested in such emerging technology and telecommunications companies.
Approximately 18% is invested in growing national retailers and restaurants. We
identify concepts that have proven to be effective and profitable and management
teams that are capable of rolling out these chains rapidly into new markets.
Staples, Starbucks and Rainforest Cafe are prime examples of this strategy and
collectively represent 12% of the Fund's net assets. Approximately 28% of the
Fund's net assets is invested in medical technology and healthcare service
companies.
Thank you for allowing us to serve you by helping you invest in some of the
fastest growing companies in America. We respect our obligation to our
shareholders and pledge to you our most diligent efforts in the care of your
investment.
/s/ James R. Jundt
JAMES R. JUNDT
CHAIRMAN
<PAGE>
PERFORMANCE DATA
- --------------------------------------------------------------------------------
INDUSTRY SECTORS REPRESENTED IN THE FUND'S PORTFOLIO ON JUNE 30, 1996 (AS A
PERCENTAGE OF NET ASSETS)
- --------------------------------------------------------------------------------
RESTAURANTS/RETAIL INTERNET TECHNOLOGY
17.8% 14.0%
COMPUTER SERVICES/SOFTWARE MEDICAL DEVICES/DRUGS
17.4% 20.7%
HEALTHCARE SERVICES MISCELLANEOUS
6.8% 3.7%
TELECOMMUNICATIONS
10.7%
TOTAL RETURN BASED ON A $10,000 INVESTMENT
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS 1996
---------------------------------------------------------------------
JAN FEB MAR APR MAY JUNE
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
JUNDT U.S. EMERGING GROWTH FUND 11,050.00 12,060.00 12,260.00 15,220.00 16,630.00 14,990.00*
CLASS D SHARES*
RUSSELL 2000 INDEX 9,989.25 10,300.60 10,510.27 11,072.27 11,508.60 11,036.02
</TABLE>
*Does not reflect the deduction of the maximum front-end sales charge of 5.25%
<PAGE>
JUNDT ASSOCIATES' APPROACH TO GROWTH STOCK INVESTING
- --------------------------------------------------------------------------------
JUNDT ASSOCIATES IS GROWTH-ORIENTED; OUR FOCUS IS ON COMPANIES GENERATING
significant revenue increases. We believe the U.S. Economy's heterogeneous
nature and multitrillion dollar size generally afford investors significant
growth opportunities. We emphasize the fundamental prospects of individual
companies rather than macroeconomic trends. In the Fund, emphasis is placed on
smaller-capitalization companies, with at least half the equity securities
consisting of companies with annual revenues less than $250 million. Within
these parameters, the Fund's mission is to establish equity positions in 30 to
50 companies we believe to be among the fastest-growing corporations in America.
Particular emphasis is placed on companies that we believe will achieve annual
rates of revenue growth of 25% or greater.
<PAGE>
JUNDT U.S. EMERGING GROWTH FUND
SCHEDULE OF INVESTMENTS (UNAUDITED) JUNE 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS
INDUSTRY DESCRIPTION AND ISSUE NUMBER OF SHARES COST MARKET VALUE (a)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMPUTER SERVICES/SOFTWARE (11.4%)
- --------------------------------------------------------------------------------------------------------------
Axent Technologies, Inc. (b) 5,000 $ 70,000 $ 82,500
Documentum, Inc. (b) 9,000 299,000 274,500
Lernout & Hauspie Speech Products N.V. (ADR)* (b) 22,400 603,221 504,000
McAfee Associates, Inc. (b) 4,600 235,025 225,400
Siebel Systems, Inc. (b) 4,400 92,850 135,300
SS&C Technologies, Inc. (b) 8,100 148,929 123,525
-------------------------------
1,449,025 1,345,225
-------------------------------
DATABASE SOFTWARE (6.0%)
- --------------------------------------------------------------------------------------------------------------
Forte Software, Inc. (b) 9,600 394,384 501,600
Sapient Corporation (b) 5,000 105,000 211,250
-------------------------------
499,384 712,850
-------------------------------
HEALTHCARE SERVICES (6.8%)
- --------------------------------------------------------------------------------------------------------------
American Oncology Resources, Inc. (b) 9,000 187,125 195,750
Coventry Corporation (b) 20,800 394,341 327,600
Enterprise Systems, Inc. (b) 4,000 125,250 110,000
Express Scripts, Inc. (b) 3,800 183,790 174,800
-------------------------------
890,506 808,150
-------------------------------
INTERNET TECHNOLOGY (14.0%)
- --------------------------------------------------------------------------------------------------------------
Intuit, Inc. (b) 9,000 479,037 425,250
Netscape Communications Corp. (b) 4,500 204,850 280,125
Security Dynamics Technologies, Inc. (b) 2,600 257,235 213,850
Security First Network Bank (b) 10,000 200,000 330,000
UUNET Technologies, Inc. (b) 4,000 129,976 265,000
Verity, Inc. (b) 5,000 165,081 143,750
-------------------------------
1,436,179 1,657,975
-------------------------------
</TABLE>
See accompanying notes to schedule of investments.
<PAGE>
JUNDT U.S. EMERGING GROWTH FUND
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) JUNE 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
INDUSTRY DESCRIPTION AND ISSUE NUMBER OF SHARES COST MARKET VALUE (a)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MEDICAL DEVICES/DRUGS (20.7%)
- --------------------------------------------------------------------------------------------------------------
Biochem Pharma, Inc. (b) 15,500 $ 632,884 $ 581,250
Biogen, Inc. (b) 4,500 234,000 246,937
Dura Pharmaceuticals Inc. (b) 5,900 294,834 330,400
Genzyme Corp. (b) 7,500 456,313 376,875
Heartport, Inc. (b) 3,200 101,634 96,800
Optical Sensors, Inc. (b) 20,000 232,229 207,500
Target Therapeutics, Inc. (b) 14,900 679,146 610,900
-------------------------------
2,631,040 2,450,662
-------------------------------
MISCELLANEOUS (3.7%)
- --------------------------------------------------------------------------------------------------------------
HNC Software, Inc. (b) 6,300 237,810 291,375
Premiere Technologies, Inc. (b) 4,500 128,329 141,750
-------------------------------
366,139 433,125
-------------------------------
RESTAURANTS (13.7%)
- --------------------------------------------------------------------------------------------------------------
Boston Chicken, Inc. (b) 11,900 413,500 386,750
Rainforest Cafe, Inc. (b) 11,800 353,895 590,000
Starbucks Corp. (b) 23,000 574,881 649,750
-------------------------------
1,342,276 1,626,500
-------------------------------
RETAIL (4.1%)
- --------------------------------------------------------------------------------------------------------------
Garden Ridge Corporation (b) 4,000 222,880 202,000
Petco Animal Supplies, Inc. (b) 4,900 127,650 140,875
Staples, Inc. (b) 7,150 110,569 139,425
-------------------------------
461,099 482,300
-------------------------------
</TABLE>
See accompanying notes to schedule of investments.
<PAGE>
JUNDT U.S. EMERGING GROWTH FUND
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) JUNE 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS (CONCLUDED)
INDUSTRY DESCRIPTION AND ISSUE NUMBER OF SHARES COST MARKET VALUE (a)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
TELECOMMUNICATION INFRASTRUCTURES (5.3%)
- --------------------------------------------------------------------------------------------------------------
Shiva Corp. (b) 1,400 $ 62,039 $ 112,000
U.S. Robotics Corp. (b) 6,000 430,626 513,000
-------------------------------
492,665 625,000
-------------------------------
WIRELESS/TELECOMMUNICATION SERVICES (5.4%)
- --------------------------------------------------------------------------------------------------------------
Edify Corp. (b) 8,200 123,000 217,300
ICT Group, Inc. (b) 7,000 112,000 134,750
Sykes Enterprises, Inc. (b) 3,400 98,343 167,450
Teleport Communications Group Inc. (b) 6,500 110,995 124,313
-------------------------------
444,338 643,813
-------------------------------
TOTAL COMMON STOCKS (91.1%) 10,012,651 10,785,600
-------------------------------
</TABLE>
See accompanying notes to schedule of investments.
<PAGE>
JUNDT U.S. EMERGING GROWTH FUND
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONCLUDED) JUNE 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHORT-TERM SECURITIES
ISSUE PRINCIPAL AMOUNT COST MARKET VALUE (a)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
REPURCHASE AGREEMENTS (14.0%)
- --------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT WITH MERRILL LYNCH
GOVERNMENT SECURITIES INC., 5.20% ACQUIRED
ON 6/28/96 AND DUE 7/01/96 WITH ACCRUED INTEREST
OF $491 (COLLATERALIZED BY $1,185,000 U.S. TREASURY
BILL 5.20%, 12/12/96, VALUE $1,156,920) $1,134,000 $ 1,134,000 $ 1,134,000
Repurchase agreement with Norwest Bank,
Minnesota, N.A., 4.30% acquired on 6/28/96
and due 7/01/96 with accrued interest of
$189 (collateralized by $570,000
U.S. Treasury Bond 4.30%, 2/15/06, value
including accrued interest, $552,767) 527,000 527,000 527,000
-------------------------------
1,661,000 1,661,000
-------------------------------
MONEY MARKET FUNDS (0.1%)
- --------------------------------------------------------------------------------------------------------------
Investment in Prime Value Funds Treasury Fund 9,572 9,572 9,572
-------------------------------
TOTAL SHORT-TERM SECURITIES (14.1%) 1,670,572 1,670,572
-------------------------------
Total investments in securities (105.2%) $11,683,223(c) 12,456,172
Liabilities in excess of other assets (-5.2%) ----------- (619,923)
----------- -----------
NET ASSETS (100.0%) $11,836,249
-----------
-----------
</TABLE>
Notes to Schedule of Investments:
* American Depository Receipt (ADR).
(a) Securities are valued by procedures described in note 2 to the
financial statements.
(b) Presently non-income producing.
(c) Cost for federal income tax purposes as of June 30, 1996 was
$11,683,223. The aggregate gross unrealized appreciation of
investments in securities based on this cost were:
-------------------------------------------------------------------
Gross unrealized appreciation $1,417,695
Gross unrealized depreciation (644,746)
----------
Net unrealized appreciation $ 772,949
-------------------------------------------------------------------
<PAGE>
JUNDT U.S. EMERGING GROWTH FUND
FINANCIAL STATEMENTS (UNAUDITED) JUNE 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
<S> <C>
ASSETS
- --------------------------------------------------------------------------------------------------------------
Investment in securities, at market value (note 2)
including repurchase agreements of $1,661,000
(identified cost: $11,683,223) $12,456,172
Receivable for securities sold 883,500
Receivable from investment adviser (note 4) 52,276
Accrued interest receivable 680
Prepaid expenses 90,088
-----------
Total assets 13,482,716
-----------
LIABILITIES
- --------------------------------------------------------------------------------------------------------------
Payable for securities purchased 1,496,750
Payable for capital shares redeemed 56,782
Accrued investment management fee (note 4) 10,084
Accrued distribution fees (note 4) 5,920
Accrued administrative fee (note 4) 2,017
Accrued expenses and other liabilities 74,914
-----------
Total liabilities 1,646,467
-----------
Net assets applicable to outstanding capital stock $11,836,249
-----------
-----------
NET ASSETS CONSIST OF
- --------------------------------------------------------------------------------------------------------------
Class A capital stock, $0.01 Par value, 1 billion shares authorized $ 5,169,401
Class B capital stock, $0.01 Par value, 1 billion shares authorized 434,809
Class C capital stock, $0.01 Par value, 1 billion shares authorized 1,326,939
Class D capital stock, $0.01 Par value, 1 billion shares authorized 1,657,512
Net investment loss (55,537)
Net realized gain on investments 2,530,176
Unrealized appreciation on investments 772,949
-----------
Total, representing net assets applicable to outstanding capital stock $11,836,249
-----------
-----------
NET ASSET VALUE
- --------------------------------------------------------------------------------------------------------------
Class A - Based on net assets of $7,585,005 and 504,071
shares outstanding . $15.05
------
------
Class B - Based on net assets of $487,047 and 32,513 shares
outstanding........ $14.98
------
------
Class C - Based on net assets of $1,624,259 and 108,555 shares
outstanding ...... $14.96
------
------
Class D - Based on net assets of $2,139,938 and 142,795 shares
outstanding $14.99
------
------
- --------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
JUNDT U.S. EMERGING GROWTH FUND
FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED) JUNE 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS PERIOD FROM JANUARY 2, 1996
INCOME TO JUNE 30, 1996
- --------------------------------------------------------------------------------------------------------------
<S> <C>
Interest $ 20,690
----------
EXPENSES
- --------------------------------------------------------------------------------------------------------------
(note 4) Registration fees 44,969
Investment management fee 43,976
Transfer agent fees 27,051
Audit and legal fees 24,798
Reports to shareholders 23,500
Amortization of deferred organizational fees 9,911
Administrative fee 8,795
Custodian fees 8,759
Directors' fees 8,090
Distribution fees 4,678
Account maintenance fees 3,386
Miscellanous fees 2,474
----------
Total expenses before reimbursement 210,387
Reimbursement of expenses (134,160)
----------
Expenses after reimbursement 76,227
----------
- --------------------------------------------------------------------------------------------------------------
Investment loss-net (55,537)
----------
- --------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
- --------------------------------------------------------------------------------------------------------------
Net realized gain on investments (note 3) 2,530,176
Net unrealized appreciation on investments 772,949
----------
Net gain on investments 3,303,125
----------
- --------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $3,247,588
----------
----------
- --------------------------------------------------------------------------------------------------------------
</TABLE>
*Commencement of operations
See accompanying notes to financial statements.
<PAGE>
JUNDT U.S. EMERGING GROWTH FUND
FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED) JUNE 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
PERIOD FROM JANUARY 2, 1996
TO JUNE 30, 1996
- --------------------------------------------------------------------------------------------------------------
<S> <C>
OPERATIONS
- --------------------------------------------------------------------------------------------------------------
Investment loss-net $ (55,537)
Net realized gain on investments 2,530,176
Net unrealized appreciation on investments 772,949
-----------
Net increase in net assets resulting from operations 3,247,588
-----------
CAPITAL SHARE TRANSACTIONS
- --------------------------------------------------------------------------------------------------------------
Net increase from capital share transactions (note 5) 8,488,661
-----------
NET ASSETS
- --------------------------------------------------------------------------------------------------------------
Total increase in net assets 11,736,249
Net assets at beginning of period (note 1) 100,000
-----------
Net assets at end of period $11,836,249
-----------
Accumulated net investment loss $ (55,537)
-----------
-----------
- --------------------------------------------------------------------------------------------------------------
</TABLE>
*Commencement of operations
See accompanying notes to financial statements.
<PAGE>
JUNDT U.S. EMERGING GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) JUNE 30, 1996
- --------------------------------------------------------------------------------
1. ORGANIZATION
The Jundt U.S. Emerging Growth Fund (the "Fund") is a professionally managed,
diversified series of Jundt Funds, Inc. (the "Company"), an open-end management
investment company registered under the Investment Company Act of 1940 (as
amended). The Fund was incorporated under the laws of the State of Minnesota on
October 26, 1995 and commenced operations on January 2, 1996. The only
transaction of the Fund prior to commencement of operations was the sale of
9,700 shares of Class A and 100 shares of each of Class B, Class C and Class D
to the principal of the adviser for $100,000 ($10 per share). The Company offers
its shares in one series (Series A, which represents interests in the Fund) and
the Fund, in turn, currently offers its shares of common stock in four classes
(Class A, Class B, Class C and Class D). Class A shares are available for
investment only by: (a) directors, officers, employees and consultants of the
Fund (including partners and employees of outside legal counsel to the Fund),
the Fund's investment adviser, Jundt Associates, Inc. (the "Adviser"), and the
Fund's distributor, U.S. Growth Investments, Inc. (the "Distributor"), members
of their immediate families, and their direct lineal ancestors and descendants;
and (b) accounts for the benefit of any of the foregoing. Shares of Class B and
Class C may be subject to a contingent deferred sales charge when redeemed.
Shares of Class D are sold with a front-end sales charge, and sales of greater
than $1,000,000 are not subject to a front-end sales charge but may be subject
to a contingent deferred sales charge when redeemed. All classes of shares have
identical liquidation and other rights and the same terms and conditions except
that Class B, Class C and Class D shares bear certain expenses related to the
account maintenance of such shares, and Class B and Class C shares also bear
certain expenses related to the distribution of such shares. Shareholder
servicing costs attributable solely to a particular class will be allocated to
such class. Each class has exclusive voting rights with respect to matters
relating to its account maintenance and distribution expenditures and to certain
other matters relating exclusively to such class; otherwise, all classes of
shares have the same voting rights. The Fund's investment objective is to
provide long-term capital appreciation by investing primarily in a diversified
portfolio of equity securities of emerging growth companies that are believed by
the Adviser to have significant potential for growth in revenue and earnings.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies followed by the
Fund are as follows:
INVESTMENT IN SECURITIES
Investments in securities traded on U.S. securities exchanges or included in a
national market system are valued at the last quoted sales price as of the close
of business on the date of valuation or, lacking any sales, at the mean between
the most recently quoted bid and asked prices. Securities traded in the over-
the-counter market are valued at the mean between the most recently quoted bid
and asked prices. Other securities for which market quotations are not readily
available are valued at fair value in good faith by or under the direction of
the Board of Directors. Short-term securities with maturities of fewer than 60
days when acquired, or which subsequently are within 60 days of maturity, are
valued at amortized cost, which approximates market value.
Security transactions are accounted for on the date the securities are purchased
or sold. Realized gains and losses are calculated on the identified cost basis.
Dividend income is recognized on the ex-dividend date. Interest income,
including level-yield amortization of discount, is accrued daily.
<PAGE>
JUNDT U.S. EMERGING GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED) JUNE 30, 1996
- --------------------------------------------------------------------------------
FEDERAL TAXES
The Fund intends to comply with the requirements of the Internal Revenue Code
applicable to regulated investment companies and also intends to distribute all
of its investment company taxable income to shareholders. Therefore, no income
tax provision is required. In addition, on a calendar year basis, the Fund will
make sufficient distributions of its net investment income and realized gains,
if any, to avoid the payment of any federal excise taxes.
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily due to wash sales and net
operating losses. The character of distributions made during the period from net
investment income or net realized gains, if any, may differ from their ultimate
characterization for federal income tax purposes. Also, due to the timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the year the income or realized gains (losses) were recorded by the
Fund.
REPURCHASE AGREEMENTS
The Fund may enter into repurchase agreements with member banks of the Federal
Reserve System or primary dealers in U.S. Government securities. Under such
agreements, the bank or primary dealer agrees to repurchase the security
(U.S. Government securities) at a mutually agreed upon time and price. The
Fund takes possession of the underlying securities, marks to market such
securities daily and, if necessary, receives additional securities to ensure
that the contract is fully collateralized.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions are recorded as of the close of business on the ex-dividend date.
Such distributions are payable in cash or reinvested in additional shares of the
Fund.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
3. INVESTMENT SECURITY TRANSACTIONS
Purchases of securities and proceeds from sales, other than temporary
investments in short-term securities, for the period from January 2, 1996
(commencement of operations) to June 30, 1996 were $17,142,135 and $9,659,660,
respectively.
4. INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENTS AND TRANSACTIONS WITH
AFFILIATES
The Fund has entered into an investment advisory agreement with the Adviser. The
Adviser is responsible for the management of the Fund's portfolio and provides
the necessary personnel, facilities, equipment and certain other services
necessary to the operations of the Fund. For such services, the Fund pays a
monthly investment management fee calculated at the annualized rate of 1% of the
Fund's average daily net assets. The most restrictive state-imposed annual
expense limitation requires that the Adviser reimburse the Fund to the extent
the Fund's expenses (excluding interest, taxes, distribution fees, brokerage
fees and commissions, and extraordinary items) exceed 2.5% of the Fund's first
$30 million of average daily net assets, 2.0% of the next $70 million of average
daily net assets and 1.5% of the average daily net assets in excess thereof. The
Adviser's obligation to reimburse the Fund is limited to the amount of the
investment management fee.
<PAGE>
JUNDT U.S. EMERGING GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED) JUNE 30, 1996
- --------------------------------------------------------------------------------
The Adviser has voluntarily agreed to pay certain Fund expenses incurred during
the first year of the Fund's operations. Thereafter, such voluntary expense
reimbursements may be discontinued or modified at the Adviser's sole discretion.
The Fund has entered into an administration agreement with Princeton
Administrators, L.P. (the "Administrator") which provides the Administrator with
a monthly administrative fee in an amount equal to an annualized rate of 0.20%
of the Fund's average daily net assets not exceeding $600,000,000 and 0.175% of
the Fund's average daily net assets in excess of $600,000,000 subject to an
annual minimum fee of $125,000. For the period through December 31, 1996, the
Administrator has agreed to waive the annual minimum fee of $125,000. For its
fee, the Administrator provides certain administrative, accounting, clerical and
record keeping services for the Fund.
The Fund has entered into a distribution agreement with the Distributor, an
affiliate of the Adviser. The Distributor serves as the principal underwriter of
the Fund's shares. Pursuant to the Distribution Plans adopted by the Fund in
accordance with Rule 12b-1 under the Investment Company Act of 1940, the Fund
pays the Distributor ongoing account maintenance and distribution fees. The fees
are accrued daily and paid monthly at annual rates based upon the average daily
net assets of the shares as follows:
ACCOUNT DISTRIBUTION
MAINTENANCE FEE FEE
- --------------------------------------------------------------------------------
Class B 0.25% 0.75%
Class C 0.25% 0.75%
Class D 0.25% -
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
In addition to the investment management fee, the administrative fee and account
maintenance and distribution fees, the Fund is responsible for paying most other
operating expenses, including directors' fees and expenses, custodian fees,
registration fees, printing and shareholder reports, transfer agent fees and
expenses, legal, auditing and accounting services, insurance and other
miscellaneous expenses.
Legal fees of $10,847 for the period from January 2, 1996 (commencement of
operations) to June 30, 1996 were paid to a law firm of which the secretary of
the Fund is a partner. Certain officers and/or directors of the Fund are
officers and/or directors of the Adviser and/or the Distributor.
5. CAPITAL SHARE TRANSACTIONS
Net increase in net assets from capital share transactions was $8,488,661 for
the period from January 2, 1996 (commencement of operations) to June 30, 1996.
Transactions in capital shares for each class were as follows:
CLASS A:
FOR THE PERIOD FROM
JANUARY 2, 1996* DOLLAR
TO JUNE 30, 1996 SHARES AMOUNT
- --------------------------------------------------------------------------------
Shares sold 557,966 $6,039,865
Shares redeemed (63,595) (967,464)
----------------------------------------------
Net increase 494,371 $5,072,401
----------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
*Commencement of operations
<PAGE>
JUNDT U.S. EMERGING GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED) JUNE 30, 1996
- --------------------------------------------------------------------------------
CLASS B:
FOR THE PERIOD FROM
JANUARY 2, 1996* DOLLAR
TO JUNE 30, 1996 SHARES AMOUNT
- --------------------------------------------------------------------------------
Shares sold 32,583 $436,326
Shares redeemed (170) (2,517)
----------------------------------------------
Net increase 32,413 $433,809
----------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CLASS C:
FOR THE PERIOD FROM
JANUARY 2, 1996* DOLLAR
TO JUNE 30, 1996 SHARES AMOUNT
- --------------------------------------------------------------------------------
Shares sold 113,193 $1,394,243
Shares redeemed (4,738) (68,304)
----------------------------------------------
Net increase 108,455 $1,325,939
----------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CLASS D:
FOR THE PERIOD FROM
JANUARY 2, 1996* DOLLAR
TO JUNE 30, 1996 SHARES AMOUNT
- --------------------------------------------------------------------------------
Shares sold 144,107 $1,676,635
Shares redeemed (1,412) (20,123)
----------------------------------------------
Net increase 142,695 $1,656,512
----------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
*Commencement of operations
<PAGE>
JUNDT U.S. EMERGING GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONCLUDED) JUNE 30, 1996
- --------------------------------------------------------------------------------
6. FINANCIAL HIGHLIGHTS
Per share data for a share of capital stock outstanding throughout the period
and selected supplemental and ratio information for the
period indicated are as follows:
<TABLE>
<CAPTION>
PERIOD FROM 1/2/96*
TO 6/30/96 (UNAUDITED)
PER SHARE DATA CLASS A CLASS B CLASS C CLASS D
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $10.00 $10.00 $10.00 $10.00
---------------------------------------------------
Operations:
Investment loss-net (0.06) (0.07) (0.10) (0.07)
Net realized and unrealized gain on investments 5.11 5.05 5.06 5.06
---------------------------------------------------
Total from operations 5.05 4.98 4.96 4.99
---------------------------------------------------
Net asset value, end of period $15.05 $14.98 $14.96 $14.99
---------------------------------------------------
---------------------------------------------------
Total investment return (1) 50.50% 49.80% 49.60% 49.90%
Net assets at end of period (000s omitted) $7,585 $487 $1,624 $2,140
Ratio of expenses to average net assets 4.60%(2) 5.60%(2) 5.60%(2) 4.85%(2)
Ratio of expenses, excluding distribution fees,
to average net assets 4.60%(2) 4.60%(2) 4.60%(2) 4.60%(2)
Ratio of expenses, net of reimbursement,
to average net assets 1.55%(2) 2.55%(2) 2.55%(2) 1.80%(2)
Ratio of net investment loss to average net assets (1.05)%(2) (2.16)%(2) (2.15)%(2) (1.38)%(2)
Portfolio turnover rate (excluding short-term securities) 112% 112% 112% 112%
Average commission per share $0.06 $0.06 $0.06 $0.06
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations.
(1) Total investment return is based on the change in net asset value of a
share during the period, assumes reinvestment of distributions and excludes
the effects of sales loads.
Total investment returns for periods of less than one full year are not
annualized.
(2) Adjusted to an annual basis.
<PAGE>
INVESTMENT ADVISER
Jundt Associates, Inc.
1550 Utica Avenue South
Suite 950
Minneapolis, MN 55416
DISTRIBUTOR
U.S. Growth Investments, Inc.
1550 Utica Avenue South
Suite 950
Minneapolis, MN 55416
ADMINISTRATOR
Princeton Administrators, L.P.
P.O. Box 9095
Princeton, NJ08543-9095
TRANSFER AGENT
National Financial Data Services
P.O. Box 419168
Kansas City, MO 64141-6168
1-800-370-0612
CUSTODIAN
Norwest Bank Minnesota, N.A.
Sixth &Marquette
Minneapolis, MN 55479
INDEPENDENT AUDITORS
KPMGPeat Marwick LLP
4200 Norwest Center
Minneapolis, MN 55402
LEGAL COUNSEL
Faegre &Benson LLP
2200 Norwest Center
Minneapolis, MN 55402
THIS REPORT IS NOT AUTHORIZED FOR USE IN CONNECTION WITH AN OFFER TO BUY SHARES
OF THE FUND UNLESS ACCOMPANIED OR PRECEDED BY THE FUND'S CURRENT PROSPECTUS.
PAST PERFORMANCE SHOWN IN THIS REPORT SHOULD NOT BE CONSIDERED A REPRESENTATION
OF FUTURE PERFORMANCE. INVESTMENT RETURN AND PRINCIPAL VALUE OF SHARES WILL
FLUCTUATE SO THAT SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST.
GENERAL INFORMATION REGARDING THE FUND'S PORTFOLIO, UPDATED MONTHLY, IS
AVAILABLE BY CALLING PRINCETON ADMINISTRATORS, L.P., AT 1-800-543-6217 OR 1-609-
282-4600.
THE ACCOMPANYING FINANCIAL STATEMENTS AS OF JUNE 30, 1996 WERE NOT AUDITED AND,
ACCORDINGLY, NO OPINION IS EXPRESSED ON THEM.
