Insight Management, Inc.
A Semi-annual Report On The Kobren Insight Funds
June 30, 1997
Hotline 1-888-3KOBREN
Kobren Insight Funds
[PICTURE OF ERIC M. KOBREN]
Kobren Insight Funds
Message To Shareholders
A Picture-Perfect Market Is Not Without Its Risks After a modest first quarter
performance, stock prices soared into record territory during the second quarter
as a picture-perfect economic landscape emerged. In fact, everything that could
go right for the market, did. While the economy
continued to grow moderately, the Fed took notice and decided not to raise
interest rates. In addition, strong demand for stocks and healthy mutual fund
cash inflows, coupled with the fear of portfolio underperformance, drove
institutional money managers to invest their idle cash; no matter how expensive
stocks were becoming. Together, these four factors ignited a stock market buying
frenzy, but also increased market volatility.
Some Historical Perspective This year's second quarter was the S&P 500's
fourth-best quarter since 1946 (up 17.5%), and stretched
valuation levels higher. Typically, gains of this magnitude occur on two
different occasions: when the economy is poised to climb out of a recession or
when the economy is in the later stages of a sustained period of growth. The
economy is now in its seventh year of expansion, but is just beginning to
exhibit signs of slowing. Corporate profits remain healthy, but unfortunately,
most fund managers didn't foresee the powerful rally in large, "expensive"
growth stock names. As a result, most funds significantly underperformed the
broad, large-cap market indexes.
On the positive side, after a disappointing first quarter, small-cap and
international stock funds advanced sharply. Investors finally seemed to notice
what we've been pointing out for some time _ that small-cap stock valuations are
compelling, and that investors should look beyond the U.S. to find cheaper
growth opportunities. Additionally, bonds became more attractive relative to
stocks last quarter, as long-term interest rates moved toward 7%. And, after
taking a breather during the first half of '97, the fundamentals for real estate
investment trusts, REITs, continue to look attractive.
Investment Strategy
Our current investment outlook and our sensitivity to today's high market
valuations have led us to adopt a well-diversified mix of underlying funds.
Indeed, our exposure to large-cap growth stocks _ particularly those that have
led the Dow above 8000 and the S& P 500 into record territory in July _ is
restrained. Furthermore, 1997 is proving to be a very difficult year for active
fund managers, particularly those whose strict investment discipline prohibits
them from overpaying for stocks, or chasing today's "hottest" investment theme.
In fact, it's interesting to note that fewer than 5% of the growth funds we
track are beating the S& P 500 this year.
Still, we continue to ask ourselves this question: How can things get better
than this? The economy is growing, prices are stable, everyone is working and
consumer confidence is high. Frankly, this can't continue forever.
While we are comfortable accepting the fact that certain variables of the
economic cycle have changed in recent years, we are not going to "bet the ranch"
that economic and market cycles no longer exist, and that stock prices can move
infinitely higher. We recognize that stocks can remain overvalued for long
periods of time and so we remain committed to stock fund investing. With this in
mind, we have been careful to keep well diversified within the equity market. In
our more conservative funds, we have taken steps to protect against the greater
risks inherent in today's expensive equity market by diversifying into bond and
real estate funds. While we would like to be able to "call the market," we don't
own a crystal ball. We believe that over the long term stock and bond markets
are very efficient at processing important economic and corporate financial data
and incorporating this information into the overall price level. Despite the
increased volatility of the financial markets, we intend to adhere to our
discipline of managing the overall risk in our funds, while striving to achieve
returns that best meet our shareholders' long-term objectives.
Sincerely,
Eric M. Kobren
President and Portfolio Manager
<PAGE>
Kobren Growth Fund (6/30/97)
Kobren Growth Fund (Ticker: KOGRX): The second
quarter produced robust returns across a wide range of
investment styles. While the market remained large-cap
biased, our portfolio benefited from its exposure to small-cap and foreign funds
as they showed signs of life.
Janus Twenty and Oakmark comprise over 30% of fund assets and had another great
quarter. Up 17.8% and 15.2%, respectively, during the second quarter, these
funds complement each other well, and serve as an anchor for the portfolio. The
small-cap sector is also an important component of our strategy at almost 25% of
assets. Fifteen percent of the fund is invested in Longleaf Partners Small-Cap
and Neuberger & Berman Genesis. These two value funds performed well during the
second quarter (up 9.7% and 18.8%, respectively) and are well positioned to
benefit from a continued small-cap advance. Elsewhere, Robertson Stephens
Contrarian was hurt by declining gold stocks and from its short positions.
Nevertheless, we remain confident in Manager Paul Stephens and own this fund as
a global total return play that can perform well during a more challenging
market environment. Overseas, our top-performing fund was
Warburg Pincus Int'l Equity , which gained 13.8% for the quarter. It benefited
from its 22% exposure to the Japanese market - a strong international performer.
[THE FOLLOWING TABLE WAS DEPICTED AS A LINE GRAPH IN THE PRINTER MATERIAL]
Value of $10,000 invested 12/16/96
YTD Since Inception
Total Return (%) 6/30/97 (12/16/96)
Kobren Growth: +12.8 +15.6
Blended Benchmark*: +16.4 +19.3
*Benchmark consists of the following: 65% S&P 500 (large cap
U.S. stocks),10% Russell 2000 (small cap U.S. stocks), 15%
EAFE (Morgan Stanley's Europe Australasia Far East Index) and
10% bonds (Salomon Bros. Investment Grade Bond Index). This
"neutral" allocation should approximate the Fund's asset allocation over
long periods of time.
[THE FOLLOWING TABLE WAS DEPICTED AS A PIE GRAPH IN THE PRINTER MATERIAL]
Asset Allocation
International 21%
Cash 1%
U.S. Stocks 78%
[THE FOLLOWING TABLE WAS DEPICTED AS A LINE GRAPH IN THE PRINTER MATERIAL]
Style Allocation
International 21%
Small Cap Value 25%
Large Cap Growth 26%
Small Cap Growth 0%
Large Cap Value 27%
Cash 1%
Top Holdings
Kobren Growth Fund Style Alloc (%)
Oakmark Large Cap Value 17.5
Janus Twenty Large Cap Growth 14.1
Fidelity Advisor Growth Opp'ty, CL T Large Cap Growth 12.2
Robertson Stephens Contrarian Small Cap Value 9.7
MAS Value Large Cap Value 9.6
Artisan International International 9.0
Warburg Pincus Inst'l Int'l Equity International 7.9
Longleaf Partners Small-Cap Small Cap Value 7.7
Neuberger & Berman Genesis Trust Small Cap Value 7.3
Morgan Stanley Inst'l Asian Equity, CL A International 2.8
Dreyfus Cash Managment Plus Money Market 1.3
Hansberger Inst'l Emerging Markets International 1.0
Total Fund Assets $52,813,312
[THE FOLLOWING TABLE WAS DEPICTED AS A BAR GRAPH IN THE PRINTER MATERIAL]
Top Sectors (Totals may not equal 100%)
Cash 1%
International 21%
Large Cap Growth 26%
Small Cap Growth 0%
Small Cap Value 25%
Large Cap Value 27%
Kobren Insight Funds - 1997 Semi-Annual Report
Kobren Moderate Growth Fund (6/30/97)
Kobren Moderate Growth Fund (Ticker: KOMGX): On an absolute basis, the Fund
performed very well during the second quarter, especially given its focus on
downside risk. As such, we increased the bond allocation to 18% and extended the
average maturity of our holdings. As the Fund's assets grew and as bond yields
rose, we began to purchase individual Treasury notes and bonds at a low cost to
shareholders. These purchases proved to be very timely as interest rates
declined. The Fund increased its small-cap exposure by purchasing Oakmark
Small-Cap and adding to Skyline Special Equities . Both of these top-ranked
funds are value-oriented and don't have the risk associated with "growthier"
funds. Although both funds are closed to new investors, we can continue to add
to our existing positions. Another defensive measure includes a modest reduction
in Babson Value . While this fund was up 12.2% during the second quarter,
several of its large-cap holdings were beginning to look expensive, thereby
increasing the fund's risk. International diversification was provided through a
15% position in Tweedy, Browne Global Value , one of the better-performing and
lowest-risk international funds available. (It rose 10.1% during the quarter.)
During each meeting with the fund's management team we were increasingly
impressed with the firm's strict value discipline.
[THE FOLLOWING TABLE WAS DEPICTED AS A LINE GRAPH IN THE PRINTER MATERIAL]
Value of $10,000 invested 12/16/96
YTD Since Inception
Total Return (%) (6/30/97) (12/24/96)
Kobren Moderate Growth: +12.6 +13.3
Blended Benchmark*: +14.7 +13.8
*Benchmark consists of the following: 65% S&P 500 (large cap
U.S. stocks), 5% EAFE (Morgan Stanley's Europe Australasia Far
East Index), 25% bonds (Salomon Bros. Investment Grade Bond Index)
and 5% cash (90-day Treasury Bill return). This "neutral" allocation
should approximate the Fund's asset allocation over long periods of time.
[THE FOLLOWING TABLE WAS DEPICTED AS A PIE GRAPH IN THE PRINTER MATERIAL]
Top Holdings
Asset Allocation
International 15%
Cash 4%
U.S. Stocks 63%
[THE FOLLOWING TABLE WAS DEPICTED AS A PIE GRAPH IN THE PRINTER MATERIAL]
Style Allocation
Large Cap
Growth 18%
Small Cap Value 15%
[THE FOLLOWING TABLE WAS DEPICTED AS A BAR GRAPH IN THE PRINTER MATERIAL] Top
Sectors* (Totals may not equal 100%) *Equities only, excludes real estate funds
Large Cap Value 18% Cash 4% Bonds 18% International 15% Real Estate 12%
Top Holdings
Kobren Moderate Growth Fund Style Alloc (%)
Tweedy, Browne Global Value International 15.1
Fidelity Advisor Growth Opp'ty, CL T Large Cap Growth 9.3
Franklin Mutual Qualified, CL Z Large Cap Value 9.1
Babson Value Large Cap Value 8.7
PIMCO Cadence Cap App, Inst'l Large Cap Growth 8.7
Longleaf Partners Realty Real Estate 8.3
Oakmark Small-Cap Small Cap Value 8.1
Skyline Special Equities Small Cap Value 7.7
Vanguard F/I Interm-Term U.S. Treas Bonds 6.0
Treasury Note, 7.25% 08/15/04 Money Market 4.9
Dreyfus Cash Management Plus Money Market 4.5
Treasury Note, 7.50% 02/15/05 Bond 4.0
Morgan Stanley Inst'l Real Estate, CL A Real Estate 3.8
Treasury Note, 6.50% 08/15/05 Bond 3.7
Total Fund Assets $26,625,717
Kobren Insight Funds - 1997 Semi-Annual Report
Kobren Conservative Allocation Fund (6/30/97)
Kobren Conservative Allocation Fund
(Ticker: KOCAX):
This Fund has taken a more balanced approach to the market. As a result, it has
only 41% of its assets in U.S. stock funds (excluding real estate). Also, we are
moving closer to our Benchmark's bond allocation as U.S.
stocks are getting more expensive. We are very cognizant of this Fund's
objective of seeking growth in a risk-averse manner. Given this objective, we
continue to emphasize real estate funds in place of bonds and stock funds.
(Historically, real estate funds have a low correlation to both these asset
classes.) However, in the case of bonds, we did extend maturities, thereby
profiting from the recent decline in interest rates. Our best-performing fund
for the second quarter was Scudder Growth & Income. It led all other fund
holdings thanks to its 15.3% return. This was achieved through a combination of
Manager Rob Hoffman's large-cap stock focus and his growth at a reasonable price
discipline. A new addition to the portfolio in the second quarter was Third
Avenue Value . In searching out a fund for conservative small-cap value
exposure, we were impressed by veteran Manager Marty Whitman, whose long-term
track record is quite impressive. During the second quarter this fund returned
13.3%.
[THE FOLLOWING TABLE WAS DEPICTED AS A LINE GRAPH IN THE PRINTER MATERIAL]
Value of $10,000 invested 12/16/96
YTD Since Inception
Total Return (%) (6/30/97) (12/30/96)
Kobren Conservative Alloc: +10.7 +10.5
Blended Benchmark*: +11.6 +10.5
*Benchmark consists of the following: 50% S&P 500 (large cap
U.S. stocks), 40% bonds (Salomon Bros. Investment Grade Bond
Index) and 10% cash (90-day Treasury Bill return). This "neutral"
allocation should approximate the Fund's asset allocation over long periods
of time.
[THE FOLLOWING TABLE WAS DEPICTED BY A PIE CHART IN THE PRINTER MATERIAL]
Asset Allocation
International 10%
Cash 3%
U.S. Stocks 66%
Bonds 21%
[THE FOLLOWING TABLE WAS DEPICTED BY A PIE CHART IN THE PRINTER MATERIAL]
Style Allocation
Small Cap Value 9%
Cash 3%
Top Holdings
Top Holdings
Kobren Conservative Allocation Fund Style Alloc (%)
Morgan Stanley Inst'l Real Estate, Cl A Real Estate 20.9
Franklin Mutual Beacon, CL Z Large Cap Value 15.6
Treasury Note, 7.25% 08/15/04 Bond 11.9
Scudder Growth and Income Large Cap Value 10.1
Tweedy, Browne Global Value International 9.9
T. Rowe Price Equity-Income Large Cap Value 9.8
Third Avenue Value Small Cap Value 8.8
Treasury Note, 7.50% 02/15/05 Bond 6.0
PIMCO Low Duration Bonds 3.3
Dreyfus Cash Management Plus Money Market 2.4
Total Fund Assets $8,799,360
[THE FOLLOWING TABLE WAS DEPICTED BY A BAR CHART IN THE PRINTER MATERIAL] Top
Sectors* (Totals may not equal 100%) *Equities only, excludes real estate funds
Bonds 21% Large Cap Value 36% Real Estate 21% International 10%
Insight Management, Inc. is the registered investment adviser for the Kobren
Insight Funds, and Insight Brokerage Services, Inc., a NASD broker/dealer, is
the distributor for the Funds. Performance data reflects past performance and is
not a guarantee of future results. Cumulative total return figures include
reinvestment of all distributions. Investment return and principal value will
fluctuate with market conditions and an investor's shares when redeemed may be
worth more or less than their original cost. International investing has special
risks, including currency fluctuation, political and economic instability, and
the volatility of emerging markets. Benchmarks are a blend of unmanaged indices
in which an individual cannot invest. The adviser absorbs certain expenses of
each Kobren Insight Fund, without which total return would have been lower.
Portfolio holdings are also subject to change. Copyright © 1997.
Reproductions in whole or in part are prohibited except by permission. Data
sources: Insight Management, Inc. and Morningstar. Postmaster: Send address
changes to Kobren Insight Funds, P.O. Box 5146, Westborough, MA 01581-9936. This
report must be preceded or accompanied by a prospectus. Please read it carefully
before investing. You may obtain a prospectus by calling a Kobren Insight Fund
representative at 1-800-4KOBREN (1-800-456-2736).
<PAGE>
Kobren Insight Funds
Kobren Growth Fund
Portfolio of Investments - June 30, 1997
(unaudited)
<TABLE>
<CAPTION>
Large-Cap Value - 27.1%
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
267,950 MAS Value Fund $5,061,581
237,984 Oakmark Fund 9,224,246
------------------
14,285,827
------------------
Large-Cap Growth - 26.3%
- ---------------------------------------------------------------------------------------------------------------------------------
159,002 Fidelity Advisor Growth Opportunities Fund, Class T 6,461,850
226,443 Janus Twenty Fund 7,443,169
------------------
13,905,019
------------------
Small-Cap Value - 24.8%
- ---------------------------------------------------------------------------------------------------------------------------------
194,773 Longleaf Partners Small-Cap Fund 4,080,492
200,042 Neuberger & Berman Genesis Trust Fund 3,876,812
325,284 Robertson Stephens Contrarian Fund 5,136,242
1,328 Robertson Stephens Partners Fund 21,089
------------------
13,114,635
------------------
International - 20.8%
- ---------------------------------------------------------------------------------------------------------------------------------
327,288 Artisan International Fund 4,739,135
47,278 Hansberger Institutional Emerging Markets Fund 536,605
77,397 Morgan Stanley Institutional Asian Equity Fund, Class A 1,482,925
223,945 Warburg Pincus Institutional International Equity Fund 4,181,061
------------------
10,939,726
------------------
Small-Cap Growth - 0.0%**
- ---------------------------------------------------------------------------------------------------------------------------------
884 Turner Small-Cap Fund 19,938
1,443 RBB Numeric Growth Fund 20,880
------------------
40,818
------------------
Money Market Fund - 1.4%
- ---------------------------------------------------------------------------------------------------------------------------------
737,630 Dreyfus Cash Management Plus Fund 737,630
------------------
TOTAL INVESTMENTS
(Cost $49,406,403*) 100.4 % 53,023,655
OTHER ASSETS AND LIABILITIES
(Net) (0.4) (210,343)
-------- ------------------
NET ASSETS % $52,813,312
100.0 % $52,813,312
======== ==================
<FN>
* Aggregate cost for Federal tax purposes
** Amount represents less than 0.1%
</FN>
</TABLE>
<PAGE>
Kobren Insight Funds
Kobren Moderate Growth Fund
Portfolio of Investments
June 30, 1997 (unaudited)
<TABLE>
<CAPTION>
Large-Cap Growth - 18.0%
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C>
<C> <C> <C>
60,708 Fidelity Advisor Growth Opportunities Fund, Class T $2,466,097
109,116 PIMCO Advisors Cadence Capital Appreciation Fund, Institutional Class 2,312,161
-------------------
4,778,258
--------------------
--------------------
Large-Cap Value - 17.9%
- --------------------------------------------------------------------------------------------------------------------------------
54,064 Babson Value Fund 2,321,494
132,013 Franklin Mutual Qualified Fund, Class Z 2,438,273
--------------------
4,759,767
--------------------
Small-Cap Value - 15.9%
- --------------------------------------------------------------------------------------------------------------------------------
93,031 Skyline Special Equities Fund 2,064,367
122,653 Oakmark Small-Cap Fund 2,166,047
--------------------
4,230,414
--------------------
International - 15.1%
- --------------------------------------------------------------------------------------------------------------------------------
236,416 Tweedy, Browne Global Value Fund 4,023,799
--------------------
Real Estate - 12.1%
- --------------------------------------------------------------------------------------------------------------------------------
136,370 Longleaf Partners Realty 2,218,732
63,480 Morgan Stanley Institutional Real Estate Fund, Class A 1,014,417
--------------------
3,233,149
--------------------
Bond - 6.0%
- --------------------------------------------------------------------------------------------------------------------------------
155,267 Vanguard Fixed-Income Intermediate-Term U.S. Treasury Fund 1,603,911
--------------------
Money Market Fund - 4.5%
- --------------------------------------------------------------------------------------------------------------------------------
1,193,137 Dreyfus Cash Management Plus Fund 1,193,137
--------------------
Total Mutual Funds (Cost $22,137,979) 23,822,435
Principal
Amount
- -----------------
U.S. TREASURY NOTES - 12.6%
$1,000,000 6.50% due 08/15/05 998,047
1,250,000 7.25% due 08/15/04 1,304,272
1,000,000 7.50% due 02/15/05 1,059,375
--------------------
Total U.S. Treasury Notes (Cost $3,349,004) 3,361,694
--------------------
TOTAL INVESTMENTS
(Cost $25,486,983*) 102.1 % 27,184,129
OTHER ASSETS AND LIABILITIES
(Net) (2.1) (558,412)
------------ --------------------
NET ASSETS 100.0 % $26,625,717
============ ====================
<FN>
*Aggregate cost for Federal tax purposes
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Kobren Insight Funds
Kobren Conservative Allocation Fund
Portfolio of Investments
June 30, 1997 (unaudited)
<S> <C>
<C> <C> <C>
Large-Cap Value - 35.4%
- --------------------------------------------------------------------------------------------------------------------------------
94,341 Franklin Mutual Beacon Fund, Class Z $1,375,497
32,748 Scudder Growth and Income Fund 884,842
34,302 T. Rowe Price Equity-Income Fund 861,335
-------------------
3,121,674
-------------------
Real Estate - 20.9%
- --------------------------------------------------------------------------------------------------------------------------------
114,883 Morgan Stanley Institutional Real Estate Fund, Class A 1,835,837
------------------
International - 9.9%
- --------------------------------------------------------------------------------------------------------------------------------
51,193 Tweedy, Browne Global Value Fund 871,306
-------------------
Small-Cap Value - 8.8%
- --------------------------------------------------------------------------------------------------------------------------------
25,904 Third Avenue Value Fund 775,309
-------------------
Bond - 3.3%
- --------------------------------------------------------------------------------------------------------------------------------
28,548 PIMCO Low Duration Fund 288,623
-------------------
Money Market Fund - 2.4%
- --------------------------------------------------------------------------------------------------------------------------------
208,235 Dreyfus Cash Management Plus Fund 208,235
-------------------
Total Mutual Funds (Cost $6,693,992) 7,100,984
Principal
Amount
- ------------------
U.S. TREASURY NOTES - 17.9%
$1,000,000 7.25% due 08/15/04 1,043,418
500,000 7.50% due 02/15/05 529,687
-------------------
Total U.S. Treasury Notes (Cost $1,558,359) 1,573,105
-------------------
TOTAL INVESTMENTS
(Cost $8,252,351*) 98.6 % 8,674,089
OTHER ASSETS AND LIABILITIES
(Net) 1.4 125,271
----- -------------------
NET ASSETS 100.0 % $8,799,360
====== ===================
<FN>
*Aggregate cost for Federal tax purposes
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Kobren Insight Funds
Statements of Assets and Liabilities June 30, 1997
<S> <C> <C> <C>
Kobren Kobren Kobren
Growth Moderate Conservative
Fund Growth Fund Allocation Fund
------------- --------------- -----------------
ASSETS:
Investments, at value (Note 1)
See accompanying schedules $ 53,023,655 $ 27,184,129 $ 8,674,089
Cash 909 191 786
Dividends receivable - 13,326 5,145
Interest receivable 8,226 96,005 43,329
Receivable for Fund shares sold 483,252 356,288 50,000
Receivable due from Investment Adviser (Note 2) - 29,452 56,543
Unamortized organization costs (Note 5) 18,733 9,367 9,436
Deferred offering costs (Note 5) 11,361 10,001 10,321
Prepaid expenses and other assets 15,120 7,825 7,039
------------- --------------- -----------------
Total Assets 53,561,256 27,706,584 8,856,688
------------- --------------- -----------------
LIABILITIES:
Payable for Fund shares redeemed 42,554 - 2,710
Payable for investment securities purchased 600,000 1,022,467 -
Investment advisory fee payable (Note 2) 25,756 - -
Administration fee payable (Note 2) 5,625 5,625 5,625
Transfer agent fees payable (Note 2) 2,667 2,667 2,667
Custodian fees payable (Note 2) 2,792 2,575 2,305
Organization costs payable (Note 5) 21,000 10,500 10,500
Offering costs payable (Note 5) 24,386 20,510 20,754
Accrued Trustees' fees and expenses (Note 2) 1,333 1,333 1,333
Accrued expenses and other payables 21,831 15,190 11,434
------------- --------------- -----------------
Total Liabilities 747,944 1,080,867 57,328
------------- --------------- -----------------
NET ASSETS $ 52,813,312 $ 26,625,717 $ 8,799,360
------------- --------------- -----------------
Investments, at cost $ 49,406,403 $ 25,486,983 $ 8,252,351
------------- --------------- -----------------
NET ASSETS consist of:
Undistributed net investment income/(accumulated net
investment loss) $ (92,630) $ 18,344 $ 19,028
Accumulated net realized gain/(loss) on investments sold 5,338 (45,046) (350)
Net unrealized appreciation of investments 3,617,252 1,697,146 421,738
Par Value (Shares of beneficial interest, $.001 per share) 4,569 2,351 800
Paid-in capital in excess of par value 49,278,783 24,952,922 8,358,144
------------- --------------- -----------------
NET ASSETS $ 52,813,312 $ 26,625,717 $ 8,799,360
------------- --------------- -----------------
SHARES OUTSTANDING 4,568,514 2,350,965 800,028
------------- --------------- -----------------
Net asset value, offering and redemption price per share $11.56 $11.33 $11.00
======= ======= ======
</TABLE>
<TABLE>
<CAPTION>
Kobren Insight Funds
Statements of Operations
For the Period Ended June 30, 1997
Kobren Kobren Kobren
Growth Moderate Conservative
Fund Growth Fund Allocation Fund
<S> <C> <C> <C>
------------- --------------- -----------------
INVESTMENT INCOME:
Dividends $ 23,023 $ 18,332 $ 17,904
Interest 15,792 53,559 26,959
------------- --------------- -----------------
Total investment income 38,815 71,891 44,863
------------- --------------- -----------------
EXPENSES:
Investment advisory fee (Note 2) 98,585 40,561 15,207
Administration fee (Note 2) 33,750 33,750 33,750
Transfer agent fees (Note 2) 29,494 20,349 18,163
Custodian fees (Note 2) 2,542 2,325 2,055
Professional fees 6,791 6,636 6,617
Trustees' fees and expenses (Note 2) 6,333 6,333 6,333
Amortization of organization costs (Note 5) 2,083 1,041 1,041
Amortization of offering costs (Note 5) 11,812 10,397 10,291
Other 21,903 11,741 7,615
------------- --------------- -----------------
Subtotal 213,293 133,133 101,072
Fees waived and/or reimbursed by investment adviser,
administrator and transfer agent (Note 2) (81,877) (79,061) (80,798)
------------- --------------- -----------------
Total expenses 131,416 54,072 20,274
------------- --------------- -----------------
NET INVESTMENT INCOME/(LOSS) (92,601) 17,819 24,589
------------- --------------- -----------------
NET REALIZED AND UNREALIZED GAIN/
(LOSS) ON INVESTMENTS (Notes 1 and 4): Net realized gain/(loss) from:
Security transactions 5,338 (45,046) (350)
Capital Gains Distributions Received - 451 15,857
Change in unrealized appreciation of securities 3,615,875 1,697,010 422,012
------------- --------------- -----------------
Net realized and unrealized gain on investments 3,621,213 1,652,415 437,519
------------- --------------- -----------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 3,528,612 $ 1,670,234 $ 462,108
------------- --------------- -----------------
</TABLE>
<TABLE>
<CAPTION>
Kobren Insight Funds
Statements of Changes in Net Assets
Period Ended June 30, 1997
Kobren Kobren Kobren
Growth Moderate Conservative
Fund Growth Fund Allocation Fund
<S> <C> <C> <C>
------------- --------------- -----------------
Net investment income/(loss) $ (92,601) $ 17,819 $ 24,589
Net realized gain/(loss) on investments 5,338 (45,046) (350)
Capital gains distributions received - 451 15,857
Change in unrealized appreciation of investments 3,615,875 1,697,010 422,012
------------- --------------- -----------------
Net increase in net assets resulting from operations 3,528,612 1,670,234 462,108
Distributions to shareholders from net investment income - - (21,417)
Net increase in net assets from Fund share transactions 49,033,352 24,765,273 8,193,944
------------- --------------- -----------------
Net increase in net assets 52,561,964 26,435,507 8,634,635
NET ASSETS:
Beginning of period 251,348 190,210 164,725
------------- --------------- -----------------
End of period $ 52,813,312 $ 26,625,717 $ 8,799,360
------------- --------------- -----------------
Undistributed net investment income/(accumulated net
investment loss) $ (92,630) $ 18,344 $ 19,028
------------- --------------- -----------------
Kobren Kobren Kobren
Growth Moderate Conservative
Fund Growth Fund Allocation Fund
------------- --------------- -----------------
Net investment income/(loss) $ (29) $ 74 $ (1)
Net unrealized appreciation/(depreciation) of
investments during the period 1,377 136 (274)
------------- --------------- -----------------
Net increase/(decrease) in net assets resulting from 1,348 210 (275)
operations
Net increase in net assets from fund share transactions 200,000 165,000 140,000
(Note 4)
------------- --------------- -----------------
Net increase in net assets 201,348 165,210 139,725
NET ASSETS:
Beginning of period (original capital November 6, 1996) 50,000 25,000 25,000
------------- --------------- -----------------
End of period $ 251,348 $ 190,210 $ 164,725
------------- --------------- -----------------
Undistributed net investment income/(accumulated net
investment loss) $ (29) $ 74 $ (1)
------------- --------------- -----------------
<FN>
* Kobren Growth Fund, Kobren Moderate Growth Fund and Kobren Conservative Allocation Fund
commenced
operations on December 16, 1996, December 24, 1996 and December 30,
1996, respectively.
</FN>
</TABLE>
------------
<PAGE>
<TABLE>
<CAPTION>
Kobren Insight Funds
Kobren Growth Fund
Financial Highlights
<S> <C> <C>
For the Six Months For the Period
Ended Ended
6/30/97 (unaudited) 12/31/96(a)
---------------------- --------------
Net asset value - beginning of period $ 10.24 $ 10.00
------------------ --------------
Net investment income/(loss) (0.02) 0.00 (d)
Net realized and unrealized gain on investments 1.34 0.24
------------------ --------------
Net increase in net assets resulting from investment 1.32 0.24
operations
------------------ --------------
Net asset value - end of period $ 11.56 $ 10.24
================== ==============
Total return (b) 12.89% 2.40%
================== ==============
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $52,813 $251
Ratio of net investment income to average net assets (.70)% (c) (.97)% (c)(e)
Ratio of net operating expenses to average net assets 1.00% (c) 1.00% (c)
Portfolio turnover rate 1.46% n/a (e)
Ratio of operating expenses to average net assets before fees waived and/or
expenses reimbursed by investment adviser,
administrator
and transfer agent 1.62% (c) n/a (e)
Net investment loss per share before fees waived and/or expenses
reimbursed by investment adviser, administrator and ($0.04) ($0.42)
transfer agent
<FN>
(a) The Kobren Growth Fund commenced operations on December 16, 1996.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Amount represents less than $0.01 per share.
(e) Since Kobren Growth Fund was in operation for a short period of time,
these ratios are not meaningful.
</FN>
</TABLE>
<TABLE>
<CAPTION>
Kobren Insight Funds
Kobren Moderate Growth Fund
Financial Highlights
<S> <C> <C>
For the Six Months For the Period
Ended Ended
6/30/97 (unaudited) 12/31/96(a)
-------------------- ----------------
Net asset value - beginning of period $ 10.06 $ 10.00
------------------ --------------
Net investment income 0.00 (d) 0.00 (d)
Net realized and unrealized gain on investments 1.27 0.06
------------------ --------------
Net increase in net assets resulting from investment 1.27 0.06
operations
------------------ --------------
Net asset value - end of period $ 11.33 $ 10.06
================== ==============
Total return (b) 12.62% 0.60%
================== ==============
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $26,626 $190
Ratio of net investment income to average net assets 0.34% (c) 8.95% (c)(e)
Ratio of net operating expenses to average net assets 1.00% (c) 1.00% (c)
Portfolio turnover rate 9.88% n/a (e)
Ratio of operating expenses to average net assets before fees waived and/or
expenses reimbursed by investment adviser,
administrator
and transfer agent 2.46% (c) n/a (e)
Net investment loss per share before fees waived and/or expenses
reimbursed by investment adviser, administrator and ($0.01) ($0.50)
transfer agent
<FN>
(a) The Kobren Moderate Growth Fund commenced operations on December 24, 1996.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Amount represents less than $0.01 per share.
(e) Since Kobren Moderate Growth Fund was in operation for a short
period of time, these ratios are not meaningful.
</FN>
</TABLE>
<TABLE>
<CAPTION>
Kobren Insight Funds
Kobren Conservative Allocation Fund
Financial Highlights
<S> <C> <C>
For the Six Months For the Period
Ended Ended
6/30/97 (unaudited) 12/31/96(a)
--------------------- ---------------
Net asset value - beginning of period $ 9.98 $ 10.00
------------------ --------------
Net investment income 0.07 0.00 (d)
Net realized and unrealized gain/(loss) on investments 1.00 (0.02)
------------------ --------------
Net increase/(decrease) in net assets resulting from
investment operations 1.07 (0.02)
Distributions from net investment income (0.05) -
================== ==============
Net asset value - end of period $ 11.00 $ 9.98
================== ==============
Total return (b) 10.77% (.20)%
================== ==============
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $8,799 $165
Ratio of net investment income/(loss) to average net assets 1.99% (c) (1.00)% (c)(e)
Ratio of net operating expenses to average net assets 1.00% (c) 1.00% (c)
Portfolio turnover rate 19.00% n/a (e)
Ratio of operating expenses to average net assets before fees waived and/or
expenses reimbursed by investment adviser,
administrator
and transfer agent 4.99% (c) n/a (e)
Net investment loss per share before fees waived and/or expenses
reimbursed by investment adviser, administrator and ($0.07) ($0.56)
transfer agent
<FN>
(a) The Kobren Conservative Allocation Fund commenced operations on December 30, 1996.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Amount represents less than $0.01 per share.
(e) Since Kobren Conservative Allocation Fund was in operation for a
short period of time, these ratios are not meaningful.
</FN>
</TABLE>
<PAGE>
Notes to Financial Statements (unaudited)
Kobren Insight Funds
June 30, 1997
1. Significant Accounting Policies
Kobren Insight Funds (the "Trust") was organized on September 13, 1996, as
a Massachusetts business trust. The Trust is registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as a no-load,
open-end diversified management investment company. As of June 30, 1997,
the Trust offers shares of three funds, Kobren Growth Fund, Kobren Moderate
Growth Fund and Kobren Conservative Allocation Fund (individually, a "fund"
and collectively, the "funds"). Each fund seeks to achieve its investment
objective by investing primarily in shares of other investment companies
("underlying funds") but also may invest directly in securities that are
suitable investments for that fund.
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from those estimates. The
following is a summary of significant accounting policies followed by the
funds in the preparation of their financial statements.
Portfolio Valuation - The underlying funds are valued according to their
stated net asset value. Each fund's investment securities are valued at the
last sale price on the securities exchange or national securities market on
which such securities primarily are traded. Securities not listed on an
exchange or national securities market, or securities in which there were
no transactions, are valued at the average of the most recent bid and asked
prices. Bid price is used when no asked price is available. Short-term
investments are valued at amortized cost, which approximates market value.
Any securities or other assets for which recent market quotations are not
readily available are valued at fair value as determined in good faith by
the Board of Trustees.
Dividends and Distributions - It is the policy of Kobren Growth Fund and
Kobren Moderate Growth Fund to declare and pay dividends from net
investment income annually. Kobren Conservative Allocation Fund has a
policy of paying such dividends quarterly. Each fund will distribute net
realized capital gains (including net short-term capital gains), unless
offset by any available capital loss carryforward, annually. Additional
distributions of net investment income and capital gains for each fund may
be made in order to avoid the application of a 4% non-deductible excise tax
on certain undistributed amounts of ordinary income and capital gain.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally
accepted accounting principles. These differences are due primarily to
differing treatments of income and gain on various investment securities
held by a fund, timing differences and differing characterizations of
distributions made by a fund.
Securities Transactions and Investment Income - Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the specific identified cost basis. Dividend
income is recognized on the ex-dividend date. Dividend income on foreign
securities is recognized as soon as a fund is informed of the ex-dividend
date. Interest income is recognized on the accrual basis.
Federal Income Tax - Each fund intends to qualify as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"), by complying with the provisions available to certain
investment companies, as defined in applicable sections of the Code, and to
make distributions of taxable income to shareholders sufficient to relieve
each fund from all or substantially all federal income taxes.
Expenses - Certain of the Trust's other expenses are allocated equally to
those funds which make up the Trust. Other expenses of the Trust are
allocated among the funds based upon relative net assets of each fund.
Operating expenses directly attributable to a fund are charged to that
fund's operations.
2. Investment Advisory Fee, Administration Fee and Other Transactions
The Trust has entered into an investment advisory agreement (the "Advisory
Agreement") with Insight Management, Inc. ("Insight Management"). The
Advisory Agreement provides that each fund will pay Insight Management a
fee, computed daily and paid monthly, at the annual rate of 0.75% of each
fund's average daily net assets. This fee will be offset by any 12b-1 fee
and advisory fee revenue payable under agreements between Insight Brokerage
Services, Inc.,
Kobren Insight Funds - 1997 Semi-Annual
Report
Notes to Financial Statements (unaudited)
(the Trust's distributor) and underlying funds. Insight Management has
voluntarily agreed to limit each fund's other operating expenses to 0.25%
of each fund's average daily net assets until January 1, 2001.
The Trust has also entered into an administration agreement (the
"Administration Agreement") with First Data Investor Services Group, Inc.
("the Administrator"), a wholly-owned subsidiary of First Data
Corporation. The Administrator also serves as the Trust's transfer agent
and dividend paying agent. Boston Safe Deposit and Trust Company, an
indirect wholly-owned subsidiary of Mellon Bank Corporation, serves as
the Trust's custodian. Insight Brokerage Services, Inc., an affiliate of
Insight Management, serves as distributor of the funds' shares and pays
all distribution costs.
No distribution fees are paid by the funds.
For the six months ended June 30, 1997, the investment adviser,
administrator and transfer agent waived fees and/or reimbursed expenses
as follows:
Expenses reimbursed Expenses waived Expense waived
by Investment Adviser by Administrator by Transfer Agent
Kobren Growth Fund $72,829 $6,381 $2,667
Kobren Moderate Growth Fund 70,013 6,381 2,667
Kobren Conservative Allocation Fund 71,750 6,381 2,667
No officer, director or employee of Insight Management, Insight Brokerage
Services, Inc., the Administrator, or any affil-iate thereof, receives
any compensation from the Trust for serving as a trustee or officer of
the Trust. Each Trustee who is not an "affiliated person" receives an
annual fee of $5,000 plus $1,000 for each board meeting attended and $500
for each commit-tee meeting attended. The Trust also reimburses
out-of-pocket expenses incurred by each Trustee in attending such
meetings.
3. Purchases and Sales
The aggregate amount of purchases and sales of underlying funds and
investment securities, other than U.S. government and short-term
securities, for the six months ended June 30, 1997, were as follows:
Purchases Sales
Kobren Growth Fund $48,811,773 $375,338
Kobren Moderate Growth Fund 21,857,516 1,056,404
Kobren Conservative Allocation Fund 7,106,307 767,800
At June 30, 1997, aggregate gross unrealized appreciation for all
underlying funds and securities in which there was an excess of value
over tax cost and aggregate gross unrealized depreciation for all
underlying funds and securities in which there was an excess of tax cost
over value for Federal income tax purposes were as follows:
Tax Basis Tax Basis
Unrealized Unrealized
Appreciation Depreciation
Kobren Growth Fund $3,944,579 $327,327
Kobren Moderate Growth Fund 1,703,083 5,937
Kobren Conservative Allocation Fund 421,894 156
Kobren Insight Funds - 1997 Semi-Annual Report
Notes to Financial Statements (unaudited)
4. Shares of Beneficial Interest
As of June 30, 1997, an unlimited number of shares of beneficial interest,
having a par value of $0.001, were authorized for the Trust. Changes in
shares of beneficial interest were as follows:
Six Months Period Ended
Ended June 30, 1997 December 31, 1996*
Shares Amount Shares Amount
Kobren Growth Fund:
Shares Sold 4,675,620 $50,482,413 19,557 $200,000
Shares Redeemed (131,663) (1,449,061) - -
Net Increase 4,543,957 $49,033,352 19,557 $200,000
Six Months Period Ended
Ended June 30, 1997 December 31, 1996*
Shares Amount Shares Amount
Kobren Moderate Growth Fund:
Shares Sold 2,471,442 $26,286,209 16,403 $165,000
Shares Redeemed (139,380) (1,520,936) - -
Net Increase 2,332,062 $24,765,273 16,403 $165,000
Six Months Period Ended
Ended June 30, 1997 December 31, 1996*
Shares Amount Shares Amount
Kobren Conservative Allocation Fund:
Shares Sold 949,762 $9,935,888 14,000 $140,000
Shares Issued as Reinvestment
of Dividends 1,912 19,349 - -
Shares Redeemed (168,146) (1,761,293) - -
Net Increase 783,528 $8,193,944 14,000 $140,000
* Kobren Growth Fund, Kobren Moderate Growth Fund and Kobren Conservative
Allocation Fund commenced operations on December 16, 1996, December 24,
1996, and December 30, 1996, respectively.
For the six months ended June 30, 1997, Insight Management and its
affiliates owned 422,925, 433,865 and 7,537 shares of Kobren Growth Fund,
Kobren Moderate Growth Fund and Kobren Conservative Allocation Fund,
respectively.
5. Organization Costs
Offering costs, including the fees and expenses of registering and
qualifying its shares for distribution under Federal and state securities
regulations, have been advanced by Insight Management, and are being
amortized over the one-year period from the date upon which each fund
commenced its operations. Expenses incurred in connection with the
organization of each fund are being amortized on a straight-line basis over
a period not to exceed sixty months from the date upon which each fund
commenced its operations.
6. Risk Factors of the Funds
Investing in underlying funds through a fund involves additional and
duplicative expenses and certain tax results that would not be present if
an investor were to make a direct investment in the underlying funds. A
fund, together with the other funds and any "affiliated persons" (as such
term is defined in the 1940 Act) may purchase only up to 3% of the total
outstanding securities of an underlying fund. Accordingly, when the Trust,
Insight Management or their affiliates hold shares of any of the underlying
funds, each fund's ability to invest fully in shares of such underlying
funds may be restricted, and Insight Management must then, in some
instances, select alternative investments for the fund that would not have
been its first choice.
This report is sent to shareholders of Kobren Insight Funds for their
information. It is not a Prospectus, circular or representation intended
for use in the purchase or sale of
shares of the Funds or of any securities mentioned in the report.
