December 31, 1997
Hotline 1-888-3KOBREN
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 c1997.
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).
Kobren Growth Fund (12/31/97)
Kobren Growth Fund (Ticker: KOGRX): 1997 was a particularly
challenging year for Kobren Growth Fund as our global
diversification strategy led to underperforming the S&P 500 Index
and our blended benchmark. Although we selected many excellent
individual funds, our allocation to international markets as well
as to a contrarian fund held us back somewhat.
In the latter half of 1997 we made a concerted effort to
emphasize "concentrated" funds. That is, funds which invest in
less than 50 stocks versus those that hold up to 1000 individual
positions. Two such large-cap funds that had a particularly
successful year were Oakmark (a value fund) and Janus Twenty (a
growth fund). These two funds represented approximately 30% of
Kobren Growth Fund since early in the first quarter and had a
total return for 1997 of 32.6% and 29.7%, respectively.
On the small-cap side we were very pleased by the
performance of both Neuberger & Berman Genesis Trust and Longleaf
Partners Small-Cap as both funds ranked among the best
small-cap value funds. During the fourth quarter we also added
Longleaf Partners Realty, a focused real estate fund which
provides a measure of diversification and excellent upside
potential.
We believe Kobren Growth Fund is well positioned entering
1998. Almost 50% of the fund is invested in focused underlying
funds and the international allocation has been significantly
reduced. As we canvass all of our managers, they report they are
still finding great companies to invest in. n
Kobren Moderate Growth Fund (12/31/97)
Kobren Conservative Allocation Fund (12/31/97)
Small Cap Value 21%
Large Cap Growth
17%
Large Cap Growth
27%
Kobren Moderate Growth Fund (Ticker: KOMGX): Although this fund
posted only fractional gains for the fourth quarter, 1997 proved
to be a very profitable year.especially given the moderate level
of risk inherent in the fund. Both our asset allocation decisions
as well as specific fund selections contributed to 1997's
impressive results.
On the domestic front, two small cap value holdings, Oakmark
Small-Cap and Skyline Special Equities, which by year-end
represented over 20% of the portfolio, returned 40.5% and 35.4%,
respectively. Both funds are run by proven stock pickers and
provide great value in this extended bull market. On the growth
side, PIMCo Cadence Capital Appreciation (run by Cadence Capital
in Boston) and Fidelity Advisor Growth Opportunities (run by
Fidelity's veteran stock picker George Vanderheiden) provide for
large-cap growth at a reasonable price - a strategy we believe is
well suited for this market. Our top holding for the year, Tweedy,
Browne Global Value employs a conservative international strategy.
With a 1997 return of 23% and the diversification this holding
provides, it remains our top fund entering 1998.
To dampen volatility in this growth fund, we maintained both a
real estate and bond position for the entire year. Both decisions
proved prudent as our largest real estate holding for the year,
Longleaf Partners Realty returned an impressive 29.7% and bond
yields steadily declined in the face of a slowing economy. n
Kobren Conservative Allocation Fund (Ticker: KOCAX):
This fund's returns were particularly pleasing in 1997 given the
risk averse strategy we employ when managing this fund. Our
largest holding for the year, Morgan Stanley Institutional Real
Estate, provided a solid 24.5% return with only a moderate level
of risk. Also, our three value oriented large cap funds, Franklin
Mutual Beacon, Scudder Growth and Income and T. Rowe Price Equity-
Income, all provided solid returns, and importantly with less risk
than the overall market. To provide international diversification
we selected the conservative Tweedy, Browne Global Value. It
ranked near the top of the international charts with a return of
23%.
As 1997 came to a close, 14% of the fund's investments were
committed to the small-cap market using two proven value based
stock pickers: Marty Whitman of Third Avenue Value and Dennis
Delafield of the Delafield Fund. Not only have their stock picks
been consistently impressive over the years, but each manager
places an equal emphasis on not losing money.
During late 1997, we continued to increase the conservative
components of the fund. However, with 70% of the fund still
committed to conservative equity and real estate funds, we expect
that Kobren Conservative Allocation will continue to produce solid
returns as the bull market matures. n
(Totals may not equal 100%)
(Totals may not equal 100%)
(Totals may not equal 100%)
Message To Shareholders
Turbulent Fourth Quarter Ends Another Profitable Year
We're pleased to report that while the fourth quarter was a bit of
a roller coaster ride, 1997 overall turned out to be another very
good year. Indeed, last year was one for the stock market history
books, as the Dow Jones Industrial Average rose by more than 20%
for the third consecutive year. And while 90% of all actively
managed domestic stock funds underperformed the S&P 500 Index,
most stock funds were able to post double digit gains. That's not
bad when you consider that inflation is just a couple of
percentage points!
The reason so many stock funds failed to beat the S&P 500
Index last year is the same reason they failed to beat the Index
in 1996. That is, much of the Index's gain was attributed to a few
dozen of the very largest public companies, which are not held in
most funds in nearly the same "weight" as in the Index.
Nevertheless, demand for shares of these large companies remained
strong (with some bumps during the second half) as investors
continued to plow money into the market. That is not to say these
companies were worth their stock price. But, it once again shows
that when there are more buyers than sellers.stock prices rise.
Diversification Remains Important
We remain committed to our diversified, actively managed
investment process. We are not market timers, and do not commit
100% of a fund to one sector of the stock market. Nor are we
momentum investors. We do not limit our investments to funds that
have recently performed extremely well, nor do we sell funds
simply because they have recently performed poorly. While this
approach often takes patience, it is the only way to succeed in
the market over the long term. Superior long-term past performance
is one of many factors considered when we purchase underlying
funds, but we are more interested in a fund's future potential
than its past performance.
At the end of 1997, we started to see a couple of cracks in
what had been a truly "nirvana-type" environment for the stock
market. After several years of relative calm, stock market
volatility began to rise. The movements of individual stocks and
the overall market has increased substantially over the past
several months, and we believe it will continue throughout 1998.
A second, but related factor that concerns us is corporate
earnings. While short-term stock price movements are reflective of
"auction market" forces, earnings are what drive stock prices over
the long term. And after a couple of stronger-than-expected years
of profit growth, we believe such growth in 1998 will slow
considerably. We felt this way before the Southeast Asia currency
crisis. Today the problem is even more acute.
1998 - The Year of the Stock Picker
In contrast to the last few years, we believe 1998 will be
the year of the stock picker. The overall market will remain
volatile and the broad based large cap indices may fail to post
double digit gains for the first time in three years. But, we
recognize that astute fund managers can still make money in this
market by building portfolios one stock at a time. Therefore, to
the extent possible, we have begun to steer the Kobren Insight
Funds toward mutual fund managers that have proven stock picking
prowess and who are not afraid to focus their portfolios on their
very best stock ideas. We believe that this focused approach is
appropriate as we enter 1998.
Let me close by extending my thanks to each shareholder who
together have invested over $120 million in our first full year of
operation. I started the Kobren Insight Funds to make investing
easy again and relieve you of the daily burden of selecting and
monitoring the thousands of funds available today. Judging from
your response, it was a much needed service. You can be sure my
staff and I will be working extremely hard over the next year to
help you achieve your financial goals.
Sincerely,
Eric M. Kobren
President and Portfolio Manager
Large Cap Value
30%
Small Cap
Value 14%
Large Cap Value
15%
Value of $10,000 invested 12/16/96
Since Inception
Total Return (%) One Year (12/16/96)
Kobren Growth: +15.0 +17.8
Blended Benchmark*: +25.1 +28.1
S&P 500 +33.4 +37.1
*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.
Since Inception
Total Return (%) One Year (12/24/96)
Kobren Moderate Growth: +23.3 +24.0
Blended Benchmark*: +24.3 +23.4
S&P 500 +33.4 +31.6
*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.
Since Inception
Total Return (%) One Year (12/30/96)
Kobren Conservative Alloc: +20.6 +20.4
Blended Benchmark*: +20.9 +19.7
S&P 500 +33.4 +31.1
*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.
Value of $10,000 invested 12/24/96
Value of $10,000 invested 12/30/96
Small Cap Growth
1%
*Based on total investments.
**Equities only, excludes real estate funds.
Portfolio of Investments
Kobren Growth Fund
December 31, 1997
Portfolio of Investments
Kobren Moderate Growth Fund
December 31, 1997
Portfolio of Investments
Kobren Conservative Allocation Fund
December 31, 1997
Statements of assets and Liabilities
Kobren Insight Funds
December 31, 1997
Statements of Operations
Kobren Insight Funds
For the Year Ended December 31, 1997
Statements of Changes in Net Assets
Kobren Insight Funds
For the Year Ended December 31, 1997
Kobren Moderate Growth Fund
Kobren Conservative Allocation Fund
Notes to Financial Statements
Kobren Insight Funds
December 31, 1997
Kobren Insight Funds - 1997 Annual Report
Kobren Insight Funds - 1997 Annual Report
See Notes to Financial Statements
See Notes to Financial Statements
See Notes to Financial Statements
See Notes to Financial Statements
See Notes to Financial Statements
See Notes to Financial Statements
See Notes to Financial Statements
See Notes to Financial Statements
See Notes to Financial Statements
Notes to Financial Statements
Notes to Financial Statements
Kobren Kobren Kobren
Growth Moderate Conservative
Fund Growth Fund Allocation Fund
ASSETS:
Investments, at value (Note 1)
See accompanying schedules $60,968,485 $41,921,185
$16,297,520
Cash 1,212 198 366
Dividends receivable 1,581,007 1,347,863 1,090,063
Interest receivable 3,291 131,084 102,255
Receivable for fund shares sold 86,119 93,784 54,725
Receivable due from Investment Adviser (Note 2) 5,922 11,322
18,457
Unamortized organization costs (Note 5) 16,616 8,308
8,377
Prepaid expenses and other assets 17,755 9,500 1,537
Total Assets 62,680,407 43,523,244 17,573,300
LIABILITIES:
Payable for fund shares redeemed 86,462 76,371 52,016
Investment advisory fee payable (Note 2) 39,094 27,182
10,745
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) 750 784 789
Accrued Trustees' fees and expenses (Note 2) 3,250 3,250
3,250
Accrued expenses and other payables 33,286 26,388 22,840
Total Liabilities 171,134 142,267 97,932
NET ASSETS $62,509,273 $43,380,977 $17,475,368
Investments, at cost $58,467,964 $39,939,716 $16,144,398
NET ASSETS consist of:
Accumulated net realized gain on investments sold 452,433
1,048,277 426,021
Net unrealized appreciation of investments 2,500,521
1,981,469 153,122
Par Value (Shares of beneficial interest, $.001 per share) 5,433
3,634 1,535
Paid-in capital in excess of par value 59,550,886 40,347,597
16,894,690
NET ASSETS $62,509,273 $43,380,977 $17,475,368
SHARES OUTSTANDING 5,432,609 3,633,723 1,534,728
Net asset value, offering and redemption price per share $11.51
$11.94 $11.39
An Annual Report On The Kobren Insight Funds
Insight Management, Inc.
Kobren Insight Funds
Large-Cap Value - 28.5%
313,671 MAS Pooled Value Fund $5,614,709
301,804 The Oakmark Fund 12,195,895
17,810,604 Large-Cap
Growth - 26.1%
207,167 CGM Focus Fund 1,943,226
169,984 Fidelity Advisor Growth Opportunity Fund, Class
T 7,215,811
230,611 Janus Twenty Fund 7,146,643
16,305,680
Small-Cap Value - 20.1%
221,209 Longleaf Partners Small-Cap Fund
4,906,412
343,530 Neuberger & Berman Genesis Trust Fund
7,633,232
1,328 Robertson Stephens Partners Fund
21,899
12,561,543
International - 15.4%
411,519 Artisan International Fund
5,127,531
128,938 Artisan International Fund, Institutional Class
1,605,277
92,296 Fidelity Hong Kong & China Fund
1,017,099
109,709 Hansberger Institutional Emerging Markets Fund
932,528
73,828 Morgan Stanley Institutional Emerging Markets
Fund, Class A 956,813
9,639,248
Real Estate - 5.4%
195,703 Longleaf Partners Realty Fund
3,395,448
Small-Cap Growth - 0.9%
1,443 RBB Fund Inc. Numeric Growth Fund
18,629
1,167 RBB Fund Inc. Numeric Investors Micro Cap Fund
18,296
21,813 Turner Small-Cap Fund 537,037
573,962
Money Market Fund - 1.1%
682,000 Dreyfus Cash Management Plus Fund
682,000
TOTAL INVESTMENTS
(Cost $58,467,964*) 97.5% 60,968,485
OTHER ASSETS AND LIABILITIES
(Net) 2.5 1,540,788
NET ASSETS 100.0% $62,509,273
Small-Cap Value - 20.2%
194,587 Skyline Special Equities Fund
$4,214,744
234,878 The Oakmark Small-Cap Fund
4,561,331
8,776,075
Large-Cap Growth - 16.4%
85,101 Fidelity Advisor Growth Opportunities Fund,
Class T 3,612,520 153,184 PIMCo
Cadence Capital Appreciation Fund, Institutional Class
3,497,180
7,109,700
International - 14.9%
394,689 Tweedy, Browne Global Value Fund
6,468,947
Large-Cap Value - 14.6%
54,335 Babson Value Fund 2,483,633
210,885 Franklin Mutual Qualified Fund, Class Z
3,833,885 6,317,518
Real Estate - 10.4%
166,720 Longleaf Partners Realty Fund
2,892,595
105,087 Morgan Stanley Institutional Real Estate Fund,
Class A 1,616,232
4,508,827 Bond -
3.9% 160,102 Vanguard
Fixed-Income Intermediate-Term U.S. Treasury Fund 1,708,283
Mid-Cap Growth - 2.5%
49,208 PIMCo Mid-Cap Growth Fund, Institutional Class
1,107,180
Money Market Fund - 1.3%
548,469 Dreyfus Cash Management Plus Fund
548,469
Total Mutual Funds (Cost $34,735,256)
36,544,999
Principal Amount
U.S. TREASURY OBLIGATIONS - 12.4%
U.S. Treasury Notes - 11.7%
$750,000 5.625% 11/30/99 749,648
1,500,000 7.250% 08/15/04 1,621,523
1,500,000 7.500% 02/15/05 1,648,418
1,000,000 6.500% 08/15/05 1,043,672
5,063,261
U.S. Treasury Bond - 0.7%
250,000 8.125% 05/15/19 312,925
Total U.S.
Treasury Obligations
(Cost $5,204,460) 5,376,186
TOTAL INVESTMENTS
(Cost $39,939,716*)
96.6% 41,921,185
OTHER ASSETS AND LIABILITIES (Net)
3.4 1,459,792
NET ASSETS 100.0 % $43,380,977
12/16/96 2/28/97 5/15/97 7/30/97 10/14/97
12/31/97
12/24/96 3/7/97 5/21/97 8/4/97 10/16/97
12/31/97
12/30/96 3/12/97 5/23/97 8/5/97 10/16/97
12/31/97
*Based on total investments.
*Based on total investments.
Kobren Growth Style Alloc (%)
Oakmark Large Cap Value 20.0
Neuberger & Berman Genesis Trust Small Cap Value 12.5
Fidelity Advisor Growth Opp'ty, Cl T Large Cap Growth
11.8
Janus Twenty Large Cap Growth 11.7
MAS Pooled Valued Large Cap Value 9.2
Artisan International International 8.4
Longleaf Partners Small-Cap Small Cap Value 8.0
Longleaf Partners Realty Real Estate 5.6
CGM Focus Large Cap Growth 3.2
Artisan International Inst'l Class International 2.6
Fidelity Hong Kong & China International 1.7
Morgan Stanley Inst'l Emerging Mkts International 1.6
Hansberger Inst'l Emerging Growth International 1.5
Dreyfus Cash Management Plus Money Market 1.1
Turner Small Cap Equity Small Cap Growth 0.9
Total Fund Assets $62,509,273
Kobren Moderate Growth Style Allocation
Tweedy, Browne Global Value International 15.4
Oakmark Small Cap Small Cap Value 10.9
Skyline Special Equities Small Cap Value 10.1
Franklin Mutual Qualified Large Cap Value 9.1
Fidelity Advisor Growth Opp'ty, Cl. T Large Cap Growth
8.6
PIMCo Cap App, Inst'l Large Cap Growth 8.3
Babson Value Large Cap Value 5.9
Longleaf Partners Realty Real Estate 6.9
Morgan Stanley Inst'l Real Estate Real Estate 3.9
Vanguard F/I Interm-Term U.S. Treas. Bond 4.1
Treasury Note, 7.50% 02/15/05 Bond 3.9
Treasury Note, 7.25% 08/15/04 Bond 3.9
PIMCo Mid-Cap Growth Inst'l. Cl. Mid Cap Growth 2.6
Treasury Note, 6.50% 08/15/05 Bond 2.5
Treasury Note, 5.625% 11/30/99 Bond 1.8
Dreyfus Cash Management Plus Money Market 1.3
Treasury Bond, 8.125% 05/15/19 Bond 0.7
Total Fund Assets $43,380,977
Kobren Conservative Allocation Style Alloc (%) Morgan
Stanley Inst'l Real Estate Real Estate 20.8
Franklin Mutual Beacon Large Cap Value 15.1
Tweedy, Browne Global Value International 10.3
Treasury Bond, 8.125% 08/15/19 Bond 9.6
Treasury Note, 7.25% 08/15/04 Bond 8.3
Third Avenue Value Small Cap Value 7.8
T. Rowe Price Equity-Income Large Cap Value 7.4
Scudder Growth and Income Large Cap Value 7.0
Treasury Note, 7.50% 02/15/05 Bond 6.7
Delafield Small Cap Value 6.4
Dreyfus Cash Management Plus Money Market 0.6
Total Fund Assets $17,475,368
Financials
Ind. Cyclicals
Services
Cons. Staples
Cons. Durables
Health
Technology
Energy
Retail
Utilities
0% 5% 10% 15% 20% 25%
**Equities only, excludes real estate funds.
Financials
Ind. Cyclicals
Services
Cons. Durables
Cons. Staples
Retail
Technology
Health
Energy
Utilities
0% 5% 10% 15% 20% 25%
**Equities only, excludes real estate funds.
Financials
Ind. Cyclicals
Services
Technology
Cons. Staples
Health
Cons. Durables
Energy
Retail
Utilities
0% 5% 10% 15% 20% 25%
Kobren Conservative Allocation
Blended Benchmark
S&P 500
Kobren Growth
Blended Benchmark
S&P 500
Kobren Moderate Growth
Blended Benchmark
S&P 500
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 December 31, 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.
Use of Estimates - The preparation of financial statements in
accordance with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts 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 other 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 or under the
direction of 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 pays
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 is offset by any 12b-1 fee and sub-transfer agent fee revenue
payable under agreements between Insight Brokerage Services, Inc.
(the Trust's distributor) and underlying funds. In addition,
certain 12b-1 fee and sub-transfer agent fee revenue will be used
to defray the costs associated with participation in certain no
transaction fee programs. 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 also 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 year ended December 31, 1997, the investment
adviser, administrator and transfer agent waived fees and/or
reimbursed expenses as follows:
Expenses reimbursed Expenses Waived Expenses
Waived
by Investment Adviser By Administrator By
Transfer Agent
Kobren Growth Fund $112,445 $6,381 $2,667
Kobren Moderate Growth Fund 129,689 6,381 2,667
Kobren Conservative Allocation Fund 153,292 6,381 2,667
For the year ended December 31, 1997, other reductions were as
follows:
Kobren Growth Fund $48,597
Kobren Moderate Growth Fund 17,090
No officer, director or employee of Insight Management,
Insight Brokerage Services, Inc., the Administrator, or any
affiliate 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 committee
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 year ended December 31, 1997, were
as follows:
Purchases Sales
Kobren Growth Fund $76,854,685 $17,579,128
Kobren Moderate Growth Fund 37,303,683 3,253,637
Kobren Conservative Allocation Fund 13,122,647 1,062,333
4. Shares of Beneficial Interest
As of December 31, 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:
Year Ended Period Ended
December 31, 1997 December 31, 1996*
Shares Amount Shares Amount
Kobren Growth Fund:
Shares Sold 6,040,941 $66,750,421 19,557 $200,000
Shares Reinvested 121,905 1,403,131 - -
Shares Redeemed (754,794) (8,847,204) - -
Net Increase 5,408,052 $59,306,348 19,557 $200,000
Kobren Moderate Growth Fund:
Shares Sold 3,867,539 $43,059,814 16,403 $165,000
Shares Reinvested 130,811 1,561,885 - -
Shares Redeemed (383,530) (4,460,468) - -
Net Increase 3,614,820 $40,161,231 16,403 $165,000
Kobren Conservative Allocation Fund:
Shares Sold 1,763,364 $19,397,323 14,000 $140,000
Shares Issued as Reinvestment
of Dividends 71,701 818,115 - -
Shares Redeemed (316,837) (3,484,213) - -
Net Increase 1,518,228 $16,731,225 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.
At December 31, 1997, Insight Management and its affiliates
owned 547,603, 455,696 and 7,928 shares of Kobren Growth Fund,
Kobren Moderate Growth Fund and Kobren Conservative Allocation
Fund, respectively.
5. Organization and Start Up Costs
Start up costs, including the fees and expenses of
registering and qualifying its shares for distribution under
federal and state securities regulations, were advanced by Insight
Management, and have been 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.
Large-Cap Value - 27.5%
174,311 Franklin Mutual Beacon Fund, Class Z
$2,461,274 41,667 Scudder Growth and
Income Fund 1,138,766
46,288 T. Rowe Price Equity-Income Fund
1,206,737
4,806,777
Real Estate - 19.4%
220,459 Morgan Stanley Institutional Real Estate Fund,
Class A 3,390,654
Small-Cap Value - 13.2%
174,311 Delafield Fund 1,041,121
40,282 Third Avenue ValueFund 1,267,285
2,308,406
International - 9.7%
102,903 Tweedy, Browne Global Value Fund
1,686,579
Money Market
Fund - 0.5% 90,265 Dreyfus Cash
Management Plus Fund 90,265
Total Mutual Funds (Cost $12,301,116)
12,282,681
Principal Amount U.S. TREASURY
OBLIGATIONS - 23.0%
U.S. Treasury Notes - 14.0%
$1,250,000 7.250% 08/15/04 1,351,270
1,000,000 7.500% 02/15/05 1,098,945
2,450,215
U.S. Treasury Bond - 9.0%
1,250,000 8.125% 08/15/19 1,564,624
Total U.S. Treasury Obligations
(Cost $3,843,282) 4,014,839
TOTAL INVESTMENTS (Cost $16,144,398*)
93.3% 16,297,520
OTHER ASSETS AND LIABILITIES
(Net) 6.7 1,177,848
NET ASSETS
100.0% $17,475,368
SHARES MUTUAL FUNDS - 84.2% VALUE (Note
1)
Kobren Kobren Kobren
Growth Moderate Conservative
Fund Growth Fund Allocation Fund
INVESTMENT INCOME:
Dividends $610,642 $610,483 $301,540
Interest 33,531 266,475 141,517
Total investment income 644,173 876,958 443,057
EXPENSES:
Investment advisory fee (Note 2) 324,325 178,947 66,652
Administration fee (Note 2) 67,500 67,500 67,500
Transfer agent fees (Note 2) 55,994 41,867 36,097
Custodian fees (Note 2). 3,702 3,801 3,368
Professional fees 18,919 18,389 18,370
Trustees' fees and expenses (Note 2) 12,250 12,250
12,250
Registration and filing fees 35,690 25,059 18,749
Amortization of organization costs (Note 5) 4,200 2,100
2,100
Amortization of start up costs (Note 5) 23,172 20,399
20,613
Other 7,390 5,617 5,251
Total expenses 553,142 375,929 250,950
Fees waived and/or expenses reimbursed by investment
adviser, administrator and transfer agent (Note 2) (121,493)
(138,736) (162,340)
Other reductions (Note 2) (48,597) (17,090) -
Net expenses 383,052 220,103 88,610
NET INVESTMENT INCOME 261,121 656,855 354,447
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS (Notes 1 and 4):
Net realized gain/(loss) from security transactions (1,716,593)
(52,046) 2,902
Short term capital gains distributions received 1,165,983
946,535 459,166
Long term capital gains distributions received 2,169,928
1,102,350 470,684
Change in unrealized appreciation of securities 2,499,144
1,981,333 153,396
Net realized and unrealized gain on investments 4,118,462
3,978,172 1,086,148
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $4,379,583 $4,635,027
$1,440,595
Kobren Kobren Kobren
Growth Moderate Conservative
Fund Growth Fund Allocation Fund
Net investment income $261,121 $656,855 $354,447
Net realized gain/(loss) on investments (1,716,593) (52,046)
2,902
Short term capital gains distributions received 1,165,983
946,535 459,166
Long term capital gains distributions received 2,169,928
1,102,350 470,684
Change in unrealized appreciation of investments 2,499,144
1,981,333 153,396
Net increase in net assets resulting from operations 4,379,583
4,635,027 1,440,595
Distribution to shareholders from:
Net investment income (261,121) (656,929) (354,446)
Short term capital gains (1,165,983) (946,535) (459,166)
Net realized gain on investments (902) (2,027)
(47,565)
Total Distributions (1,428,006) (1,605,491) (861,177)
Net increase in net assets from Fund share
transactions (Note 4) 59,306,348 40,161,231 16,731,225
Net increase in net assets 62,257,925 43,190,767 17,310,643
NET ASSETS:
Beginning of year 251,348 190,210 164,725
End of year $62,509,273 $43,380,977 $17,475,368
Kobren Kobren Kobren
Growth Moderate Conservative
Fund Growth Fund Allocation Fund
Net investment income/(loss) $(29) $74 $(1)
Net unrealized appreciation/(depreciation) of investments 1,377
136 (274)
Net increase/(decrease) in net assets resulting from
operations 1,348 210 (275)
Net increase in net assets from Fund share
transactions (Note 4) 200,000 165,000 140,000
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)
* 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 Year For the Period
Ended Ended
12/31/97 12/31/96(a)
Net asset value - beginning of year $10.24 $10.00
Net investment income 0.05 0.00 (d)
Short term capital gains 0.22 -
Net realized and unrealized gain on investments 1.05 0.24
Net increase in net assets resulting from
investment operations 1.32 0.24
Distributions from net investment income (0.05) -
Distributions from net realized short term capital gains (0.22)
-
Distributions from net realized long term capital gains (0.00)
(d) -
Total Distributions (0.27) -
Net asset value - end of year $11.51 10.24
Total return (b) 15.03% 2.40%
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of year (in 000's) $62,509 $251
Ratio of net investment income/(loss) to average net assets 0.60%
(.97)% (c) (e)
Ratio of operating expenses to average net assets after
reimbursements and reductions 0.89% 1.00% (c)
Portfolio turnover rate 43.00% .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 and other reductions 1.28%
.n/a (e)
Net investment income/(loss) per share before fees waived
and/or expenses reimbursed by investment adviser,
administrator and transfer agent and other reductions $0.02
($0.42)
(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.
For the Year For the Period
Ended Ended
12/31/97 12/31/96(a)
Net asset value - beginning of year $10.06 $10.00
Net investment income 0.19 0.00 (d)
Short term capital gains 0.27 -
Net realized and unrealized gain on investments 1.61 0.06
Net increase in net assets resulting from
investment operations 2.07 0.06
Distributions from net investment income (0.19) -
Distributions from net realized short term capital gains (0.27)
-
Distributions from net realized capital gains (0.00) (d)
-
Total Distributions (0.46) -
Net asset value - end of year $11.94 10.06
Total return (b) 23.25% 0.60%
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of year (in 000's) $43,381 $190
Ratio of net investment income to average net assets 2.76% 8.95%
(c) (e)
Ratio of operating expenses to average net assets after
reimbursements and reductions 0.92% 1.00% (c)
Portfolio turnover rate 14.00% .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 and other reductions 1.58%
.n/a (e)
Net investment income/(loss) per share before fees waived
and/or expenses reimbursed by investment adviser,
administrator and transfer agent and other reductions $0.14
($0.50)
(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.
For the Year For the Period
Ended Ended
12/31/97 12/31/96(a)
Net asset value - beginning of year $9.98 $10.00
Net investment income 0.57 0.00 (d)
Short term capital gains 0.04 -
Net realized and unrealized gain/loss on investments 1.44
(0.02)
Net increase/(decrease) in net assets resulting from
investment operations 2.05 (0.02)
Distributions from net investment income (0.57) -
Distributions from net realized short term capital gains (0.04)
-
Distributions from net realized capital gains (0.03)
-
Total Distributions (0.64) -
Net asset value - end of year $11.39 9.98
Total return (b) 20.64% (0.20)%
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of year (in 000's) $17,475 $165
Ratio of net investment/(loss) income to average net assets 3.99%
(1.00)%(c) (e)
Ratio of operating expenses to average net assets after
reimbursements and reductions 1.00% 1.00% (c)
Portfolio turnover rate 13.00% .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 and other reductions 2.82%
.n/a (e)
Net investment income/(loss) per share before fees waived
and/or expenses reimbursed by investment adviser,
administrator and transfer agent and other reductions $0.31
($0.56)
(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.
SHARES MUTUAL FUNDS - 97.5% VALUE (Note
1)
*For Federal income tax purposes, cost is $39,939,735 and
appreciation/(depreciation) is as follows:
Unrealized appreciation: $2,069,454
Unrealized depreciation: (88,004)
Net unrealized appreciation: $1,981,450
Unaudited Tax Information
Kobren Moderate Growth Fund paid $2,027 in long-term capital gains
for the fiscal year ended 12/31/97.
*For Federal income tax purposes, cost is $58,469,223 and
appreciation/(depreciation) is as follows:
Unrealized appreciation: $4,014,889
Unrealized depreciation: (1,515,627)
Net unrealized appreciation: $2,499,262
Unaudited Tax Information
Kobren Growth Fund paid $902 in long-term capital gains for the
fiscal year ended 12/31/97.
Unaudited Tax Information
Kobren Conservative Allocation Fund paid $44,141 in long-term
capital gains for the fiscal year ended 12/31/97.
*For Federal income tax purposes, cost is $16,144,918 and
appreciation/(depreciation) is as follows:
Unrealized appreciation: $381,867
Unrealized depreciation: (229,265)
Net unrealized appreciation: $152,602
SHARES MUTUAL FUNDS - 70.3% VALUE (Note
1)
For a fund share outstanding throughout the year.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Trustees
of Kobren Insight Funds:
We have audited the accompanying statements of assets and
liabilities of each of the series of Kobren Insight Funds
(comprised of Kobren Growth Fund, Kobren Moderate Growth Fund and
Kobren Conservative Allocation Fund (the "Funds")), including the
portfolios of investments, as of December 31, 1997, and the
related statements of operations for the year then ended and the
statements of changes in net assets and the financial highlights
for each of the periods indicated therein. These financial
statements and financial highlights are the responsibility of the
funds' management. Our responsibility is to express an opinion on
these financial statements and financial highlights based on our
audit.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities
owned as of December 31, 1997 by correspondence with the Custodian
and Brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial positions of the funds enumerated above as of December
31, 1997, the results of their operations for the year then ended,
the changes in their net assets for the periods indicated therein,
and the financial highlights for each of the periods indicated
therein, in conformity with generally accepted accounting
principles.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
February 18, 1998
An Annual Report On The Kobren Insight Funds
Insight Management, Inc.
Kobren Insight Funds
For a fund share outstanding throughout the year.
For a fund share outstanding throughout the year.
Kobren Insight Funds
For The Period Ended December 31, 1996 *
