|
|
|
|
|
|
|
|
|
|
Previous: FORRESTER RESEARCH INC, S-8, EX-23.1, 2000-06-06 |
Next: BREMER INVESTMENT FUNDS INC, N-30D, 2000-06-06 |
SEMI-ANNUAL REPORT
[GRAPHIC OMITTED]
================================================================================
BREMER INVESTMENT FUNDS, INC.
================================================================================
[GRAPHIC OMITTED]
Bremer Growth Stock Fund
Bremer Bond Fund
MARCH 31, 2000
TABLE OF CONTENTS
PAGE
Shareholder Letter........................................................... 1
Statement of Assets and Liabilities.......................................... 2
Statement of Operations...................................................... 3
Growth Stock Fund Statement of Changes in Net Assets......................... 4
Bond Fund Statement of Changes in Net Assets................................. 5
Growth Stock Fund Financial Highlights....................................... 6
Bond Fund Financial Highlights............................................... 7
Growth Stock Fund Schedule of Investments.................................... 8
Bond Fund Schedule of Investments............................................ 11
Notes to the Financial Statements............................................ 15
------------------------------------------------
NOTICE TO INVESTORS
Shares of the Funds are not deposits or obligations of, or
guaranteed or endorsed by, any bank, nor are they insured by
the Federal Deposit Insurance Corporation, the Federal Reserve
Board or any other agency. An investment in the Funds involves
investment risk, including possible loss of principal, due to
fluctuation in each Fund's net asset value.
May 2000
Dear Bremer Fund Shareholder:
The economy continued on its strong growth path through March 2000 but at a
slightly slowing pace. That environment translated into solid corporate earnings
as well as three more rate hikes by the Federal Reserve in order to stay ahead
of rising inflation, although few signs of that are evident yet.
Thus interest rates rose across the yield curve in the quarter ended December
31, 1999 and the Bremer Bond Fund fell 18 basis points in that period versus a
decline of 41 basis points for the Lehman Brothers Intermediate Gov't/Corp. Bond
Index. The next quarter had an inverted yield curve in response to Federal
Reserve rate increases with short rates to 5 years going up and mid to long term
rates falling slightly. That translated into an 0.89% return for the Fund and
1.26% increase for the index for the quarter. Thus, the six month returns to
March 31, 2000 were 0.70% for the Bond Fund and 0.84% for the index in a
difficult interest rate environment. The Bond Fund continues to increase credit
quality, improve liquidity and lengthen maturities slightly.
Stocks responded to strong corporate earnings in the latter months of 1999 and
the Bremer Growth Stock Fund returned 23.3% for the quarter versus 14.9% for the
S&P 500 Stock Index due to solid technology stock performance. That strong
earning performance also resulted in the fund rising another 5.9% in the quarter
ended March 31, 2000 even in the face of the Fed's tightening action. Thus the
Stock Fund returned 30.57% for the last six months to March 31, 2000 compared to
the index return of 17.51%!
The coming quarters should include continued above average investment market
volatility. However we do think that the Federal Reserve's action will take hold
in the new future and interest rates will eventually start to decline in a
slowing domestic economy. Corporate earnings growth should be sustainable though
at a more moderate level. Thus, the Bond Fund performance should improve while
the Stock Fund continues a bumpy though upward path toward more normalized
annual returns.
We appreciate being a part of your investment needs. Thank you for your
business.
Sincerely,
/s/ Steven A. Laraway
Steven A. Laraway
Chairman
================================================================================
BREMER INVESTMENT FUNDS, INC.
================================================================================
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
MARCH 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
---------------- ----------------
GROWTH BOND
STOCK FUND FUND
---------------- ----------------
<S> <C> <C>
ASSETS:
Investments, at market value
(Cost of $52,829,282 and $95,808,487, respectively) $99,272,850 $92,540,355
Dividends receivable 49,868 -
Interest receivable 19,469 1,129,543
Receivable for investments sold - 430,311
Receivable for fund shares issued - 471,130
Organizational expenses, net of accumulated amortization 9,947 9,947
Other assets 4,204 1,801
---------------- ----------------
Total assets 99,356,338 94,583,087
---------------- ----------------
LIABILITIES:
Payable to Investment Adviser 56,915 56,129
Dividends payable - 459,931
Accrued expenses and other liabilities 36,828 54,284
---------------- ----------------
Total liabilities 93,743 570,344
---------------- ----------------
NET ASSETS $99,262,595 $94,012,743
================ ================
NET ASSETS CONSIST OF:
Capital stock $51,314,531 $98,391,551
Accumulated undistributed net investment income (loss) (13,649) 43,722
Accumulated undistributed net realized gain (loss) on investments 1,518,145 (1,154,398)
Net unrealized appreciation (depreciation) on investments 46,443,568 (3,268,132)
---------------- ----------------
Total Net Assets $99,262,595 $94,012,743
================ ================
Shares outstanding
(100 million shares authorized for each Fund, $ .0001 par value) 4,980,403 9,751,277
================ ================
Net Asset Value, Redemption Price and Offering Price Per Share $19.93 $9.64
================ ================
</TABLE>
SEE NOTES TO THE FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
================================================================================
BREMER INVESTMENT FUNDS, INC.
================================================================================
STATEMENT OF OPERATIONS (UNAUDITED)
SIX MONTHS ENDED MARCH 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
---------------- ----------------
GROWTH BOND
STOCK FUND FUND
---------------- ----------------
<S> <C> <C>
INVESTMENT INCOME:
Dividend income (net of withholding tax of $882 and $0, respectively) $ 275,197 $ -
Interest income 113,313 3,148,993
---------------- ----------------
Total investment income 388,510 3,148,993
---------------- ----------------
EXPENSES:
Investment advisory fees 304,189 325,168
Administration fees 23,561 27,387
Shareholder servicing and accounting costs 33,989 47,311
Distribution fees 4,346 4,645
Custody fees 9,377 9,434
Federal and state registration 2,062 5,354
Professional fees 10,085 11,022
Reports to shareholders 1,098 1,729
Amortization of organizational expenses 2,745 2,745
Directors' fees and expenses 1,423 1,423
Other 844 1,068
---------------- ----------------
Total expenses 393,719 437,286
---------------- ----------------
NET INVESTMENT INCOME (LOSS) (5,209) 2,711,707
---------------- ----------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments 1,661,722 (1,047,162)
Change in unrealized appreciation (depreciation) on investments 21,536,312 (1,006,674)
---------------- ----------------
Net realized and unrealized gain (loss) on investments 23,198,034 (2,053,836)
---------------- ----------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $23,192,825 $ 657,871
================ ================
</TABLE>
SEE NOTES TO THE FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
================================================================================
BREMER INVESTMENT FUNDS, INC.
================================================================================
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
------------------------------------------------
GROWTH STOCK FUND
------------------------------------------------
Six Months Ended
March 31, 2000 Year Ended
(Unaudited) September 30, 1999
---------------------- ----------------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) ($5,209) $ 61,901
Net realized gain on investments 1,661,722 2,554,777
Change in unrealized appreciation on investments
and written option contracts 21,536,312 13,319,838
---------------------- ----------------------
Net increase in net assets resulting from operations 23,192,825 15,936,516
---------------------- ----------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income (68,454) (161,963)
Net realized gains (2,698,314) (301,927)
---------------------- ----------------------
Total dividends and distributions (2,766,768) (463,890)
---------------------- ----------------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold 18,289,633 15,715,001
Proceeds from shares issued to holders in reinvestment of
dividends 344,366 11,863
Cost of shares redeemed (7,113,738) (18,057,770)
---------------------- ----------------------
Net increase (decrease) in net assets resulting from
capital share transactions 11,520,261 (2,330,906)
---------------------- ----------------------
TOTAL INCREASE IN NET ASSETS 31,946,318 13,141,720
---------------------- ----------------------
NET ASSETS:
Beginning of period 67,316,277 54,174,557
---------------------- ----------------------
End of period $99,262,595 $67,316,277
====================== ======================
Undistributed Net Investment Income (Loss) included in
Net Assets at End of Period ($13,649) $60,013
====================== ======================
</TABLE>
SEE NOTES TO THE FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
================================================================================
BREMER INVESTMENT FUNDS, INC.
================================================================================
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
------------------------------------------------
BOND FUND
------------------------------------------------
Six Months Ended
March 31, 2000 Year Ended
(Unaudited) September 30, 1999
---------------------- ----------------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 2,711,707 $ 4,711,416
Net realized loss on investments (1,047,162) (26,953)
Change in unrealized depreciation on investments (1,006,674) (4,874,934)
---------------------- ----------------------
Net increase (decrease) in net assets resulting from operations 657,871 (190,471)
---------------------- ----------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income (2,711,707) (4,711,416)
Net realized gains (1,464) (296,994)
---------------------- ----------------------
Total dividends and distributions (2,713,171) (5,008,410)
---------------------- ----------------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold 15,792,099 31,135,209
Proceeds from shares issued to holders in reinvestment of
dividends 133,638 112,431
Cost of shares redeemed (11,845,838) (16,816,629)
---------------------- ----------------------
Net increase in net assets resulting from
capital share transactions 4,079,899 14,431,011
---------------------- ----------------------
TOTAL INCREASE IN NET ASSETS 2,024,599 9,232,130
---------------------- ----------------------
NET ASSETS:
Beginning of period 91,988,144 82,756,014
---------------------- ----------------------
End of period $94,012,743 $91,988,144
====================== ======================
Undistributed Net Investment Income included in
Net Assets at End of Period $43,722 $43,722
====================== ======================
</TABLE>
SEE NOTES TO THE FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
================================================================================
BREMER INVESTMENT FUNDS, INC.
================================================================================
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
GROWTH STOCK FUND
--------------------------------------------------------------------------------
Six Months Ended January 27, 19971
March 31, 2000 Year Ended Year Ended through
(Unaudited) September 30, 1999 September 30, 1998 September 30, 1997
----------------- ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD $15.73 $12.28 $11.90 $10.00
------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.00 0.02 0.04 0.03
Net realized and unrealized gain on investments 4.78 3.54 0.39 1.87
---- ---- ---- ----
Total from investment operations 4.78 3.56 0.43 1.90
---- ---- ---- ----
LESS DIVIDENDS AND DISTRIBUTIONS:
Dividends from net investment income (0.02) (0.04) (0.03) -
Distributions from net realized gains (0.56) (0.07) (0.02) -
----- ----- ----- ---
Total dividends and distributions (0.58) (0.11) (0.05) -
----- ----- ----- ---
NET ASSET VALUE, END OF PERIOD $19.93 $15.73 $12.28 $11.90
====== ====== ====== ======
TOTAL RETURN 30.57% 2 28.97% 3.61% 19.00% 2
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period $99,262,595 $67,316,277 $54,174,557 $51,103,642
Ratio of net expenses to average net assets 0.90% 3 0.89% 0.91% 1.05% 3
Ratio of net investment income to average net assets (0.01%)3 0.09% 0.27% 0.62% 3
Portfolio turnover rate 5.30% 16.74% 13.15% 11.30%
</TABLE>
1 COMMENCEMENT OF OPERATIONS.
2 NOT ANNUALIZED.
3 ANNUALIZED.
SEE NOTES TO THE FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
================================================================================
BREMER INVESTMENT FUNDS, INC.
================================================================================
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
BOND FUND
-------------------------------------------------------------------------------
Six Months Ended January 27, 19971
March 31, 2000 Year Ended Year Ended through
(Unaudited) September 30, 1999 September 30, 1998 September 30, 1997
---------------- ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD $9.86 $10.47 $10.18 $10.00
----- ------ ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.29 0.55 0.56 0.35
Net realized and unrealized gain (loss)
on investments (0.22) (0.57) 0.29 0.17
----- ----- ---- ----
Total from investment operations 0.07 (0.02) 0.85 0.52
---- ----- ---- ----
LESS DIVIDENDS AND DISTRIBUTIONS:
Dividends from net investment income (0.29) (0.55) (0.56) (0.34)
Distributions from net realized gains (0.00) (0.04) - -
----- ----- ---- ----
Total dividends and distributions (0.29) (0.59) (0.56) (0.34)
----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $9.64 $9.86 $10.47 $10.18
===== ===== ====== ======
TOTAL RETURN 0.70% 2 (0.22%) 8.59% 5.33% 2
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period $94,012,743 $91,988,144 $82,756,014 $73,683,643
Ratio of net expenses to average net assets 0.94% 3 0.90% 0.89% 1.01% 3
Ratio of net investment income to average net assets 5.84% 3 5.44% 5.46% 5.60% 3
Portfolio turnover rate 25.06% 58.62% 66.66% 38.35%
</TABLE>
1 COMMENCEMENT OF OPERATIONS.
2 NOT ANNUALIZED.
3 ANNUALIZED.
SEE NOTES TO THE FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
================================================================================
BREMER INVESTMENT FUNDS, INC.
================================================================================
SCHEDULE OF INVESTMENTS - MARCH 31, 2000 (UNAUDITED)
GROWTH STOCK FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ ------
<S> <C> <C>
------------------------------------------------------------------------
COMMON STOCKS - 96.6%
------------------------------------------------------------------------
APPAREL - 3.3%
60,000 Abercrombie & Fitch Company * $ 960,000
30,000 The Gap, Inc. 1,494,375
21,000 Intimate Brands, Inc. 861,000
---------------
3,315,375
---------------
BANKING & FINANCIAL SERVICES - 6.8%
13,125 Banc One Corporation 451,172
25,000 The Charles Schwab Corporation 1,420,313
25,000 Citigroup Inc. 1,482,812
12,000 Fannie Mae 677,250
18,000 Freddie Mac 795,375
10,000 Providian Financial Corporation 866,250
25,000 Wells Fargo & Company 1,023,437
---------------
6,716,609
---------------
BUSINESS SERVICE - 6.8%
15,000 Computer Associates International, Inc. 887,812
34,000 Equifax Inc. 858,500
25,000 FedEx Corporation * 975,000
19,000 First Data Corporation 840,750
36,000 IMS Health Incorporated 609,750
16,500 National Data Corporation 429,000
75,000 Novell, Inc. * 2,146,875
---------------
6,747,687
---------------
CAPITAL GOODS - 7.5%
15,000 The Boeing Company 569,063
19,000 Dover Corporation 909,625
10,600 Emerson Electric Company 560,475
25,000 General Electric Company 3,879,687
30,000 Tyco International Ltd. 1,496,250
---------------
7,415,100
---------------
COMMUNICATIONS & MEDIA - 2.8%
21,000 CBS Corporation * 1,189,125
34,500 The Interpublic Group of Companies, Inc. 1,630,125
---------------
2,819,250
---------------
COSMETICS & SOAP - 3.8%
20,000 Colgate-Palmolive Company 1,127,500
13,944 The Gillette Company 525,515
36,780 Kimberly-Clark Corporation 2,059,680
---------------
3,712,695
---------------
DRUGS - 2.0%
15,000 Merck & Company, Inc. 931,875
30,000 Pfizer Inc. 1,096,875
---------------
2,028,750
---------------
ENERGY - 5.1%
13,232 BP Amoco Plc ADR 702,123
35,000 El Paso Energy Corporation 1,413,125
26,800 Enron Corporation 2,006,650
ENERGY (CONTINUED) - 5.1%
11,881 Exxon Mobil Corporation $ 924,490
---------------
5,046,388
---------------
FOOD, BEVERAGE & TOBACCO - 1.4%
40,000 PepsiCo, Inc. 1,382,500
---------------
HEALTH CARE - 4.1%
20,000 Amgen Inc.* 1,227,500
40,332 Boston Scientific Corporation * 859,576
39,400 Medtronic, Inc. 2,026,637
---------------
4,113,713
---------------
INSURANCE - 3.1%
8,749 Aegon N.V. ADR 704,841
23,000 AFLAC Incorporated 1,047,938
12,500 American International Group, Inc. 1,368,750
---------------
3,121,529
---------------
RESTAURANT - 1.3%
34,000 McDonald's Corporation 1,277,125
---------------
RETAIL - GENERAL - 7.0%
21,100 Albertson's, Inc. 654,100
15,000 CVS Corporation 563,437
27,000 Saks Incorporated * 391,500
30,000 Target Corporation 2,242,500
36,000 Wal-Mart Stores, Inc. 1,998,000
44,000 Walgreen Company 1,133,000
---------------
6,982,537
---------------
SOFTWARE - 11.2%
8,000 America Online, Inc. * 538,000
37,000 Cognos, Inc. * 2,314,813
22,000 Microsoft Corporation * 2,337,500
55,000 Oracle Corporation * 4,293,438
53,500 Sterling Software, Inc. * 1,631,750
---------------
11,115,501
---------------
TECHNOLOGY - 23.7%
60,000 American Power Conversion Corporation * 2,572,500
100,000 Atmel Corporation * 5,162,500
100,000 Cisco Systems, Inc. * 7,731,250
12,500 Hewlett-Packard Company 1,657,031
26,000 Intel Corporation 3,430,375
11,000 Lexmark International Group, Inc. * 1,163,250
25,000 Lucent Technologies Inc. 1,518,750
5,900 Palm, Inc. * 264,763
---------------
23,500,419
---------------
TELECOMMUNICATIONS - 4.3%
35,000 American Telephone and Telegraph Corporation $ 1,968,750
31,500 MCI WorldCom, Inc. * 1,427,344
20,000 SBC Communications Inc. 840,000
---------------
4,236,094
---------------
TRAVEL & RECREATION - 2.4%
36,000 Carnival Corporation 893,250
35,000 The Walt Disney Company 1,448,125
---------------
2,341,375
---------------
TOTAL COMMON STOCKS (COST OF $49,429,079) 95,872,647
---------------
Principal
Amount
------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 3.4%
------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES - 3.4%
$ 4,837 American Family Financial Services, 5.7704% ** 4,837
3,040,134 Firstar Corporation, 5.8825% ** 3,040,134
114,810 Sara Lee, 5.7325% ** 114,810
90,138 Warner Lambert, 5.7710% ** 90,138
132,972 Wisconsin Corporate Central Credit Union, 5.8025 ** 132,972
17,312 Wisconsin Electric Power Company, 5.7704% ** 17,312
---------------
3,400,203
---------------
TOTAL SHORT-TERM INVESTMENTS (COST OF $3,400,203) 3,400,203
---------------
TOTAL INVESTMENTS - 100.0% (COST OF $52,829,282) 99,272,850
---------------
Other liabilities in excess of assets - 0.0% (10,255)
---------------
TOTAL NET ASSETS - 100.0% $ 99,262,595
===============
</TABLE>
* NON-INCOME PRODUCING SECURITY.
** VARIABLE RATE SECURITY. THE RATES LISTED ARE AS OF MARCH 31, 2000.
SEE NOTES TO THE FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
================================================================================
BREMER INVESTMENT FUNDS, INC.
================================================================================
SCHEDULE OF INVESTMENTS - MARCH 31, 2000 (UNAUDITED)
BOND FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
OR SHARES VALUE
----------------- ------
<S> <C> <C>
-----------------------------------------------------------------
LONG-TERM INVESTMENTS - 94.7%
-----------------------------------------------------------------
-----------------------------------------------------------------
CORPORATE BONDS & NOTES - 29.3%
-----------------------------------------------------------------
BANK & BANK HOLDING CO. - 3.3%
First Union National Bank - North Carolina##
$ 3,290,000 6.180%, 02/15/36 $ 3,079,730
---------------
FINANCIAL SERVICES - 19.0%
Associates Corporation, N.A.
2,000,000 6.450%, 10/15/01 1,974,850
Associates Corporation, N.A.
1,000,000 5.800%, 04/20/04 941,677
Ford Capital B.V.
1,000,000 9.375%, 05/15/01 1,022,130
Ford Motor Credit Company
1,000,000 8.200%, 02/15/02 1,013,062
General Electric Capital Corporation
1,000,000 6.267%, 07/23/03 974,308
Goldman Sachs Group
2,475,000 7.200%, 11/01/06 2,400,406
Lehman Brothers Holdings, Inc.
2,166,000 6.375%, 03/15/01 2,145,252
Merrill Lynch & Company
2,000,000 6.000%, 02/17/09 1,785,108
Norwest Asset Securities Corporation#
1,300,000 7.000%, 06/25/12 1,250,074
Reliastar Financial Corporation
2,008,000 7.125%, 03/01/03 1,967,063
St. Paul Companies, Inc.
1,000,000 7.370%, 08/20/07 981,387
Salomon, Inc.
1,450,000 6.250%, 05/15/03 1,400,243
---------------
17,855,560
---------------
FOOD, BEVERAGE & TOBACCO - 2.6%
Philip Morris Companies, Inc.
1,355,000 7.125%, 10/01/04 1,272,985
Supervalu, Inc.
1,250,000 6.560%, 06/09/05 1,168,015
---------------
2,441,000
---------------
TRAVEL AND ENTERTAINMENT - 2.0%
Hilton Hotels Corporation
2,000,000 7.700%, 07/15/02 1,952,604
---------------
UTILITIES - 2.4%
American Telephone and Telegraph#
1,500,000 5.625%, 03/15/04 1,413,777
Western Resources, Inc.
1,000,000 6.875%, 08/01/04 836,449
---------------
2,250,226
---------------
TOTAL CORPORATE BONDS &
NOTES (Cost of $28,706,283) 27,579,120
---------------
-----------------------------------------------------------------
ASSET BACKED SECURITIES - 2.4%
-----------------------------------------------------------------
COLLATERALIZED CREDIT CARD OBLIGATIONS - 2.4%
Metris Master Trust#
$1,250,000 Series 1997-1, Class A, 6.870%, 10/20/05 $ 1,245,606
Providian Master Trust#
1,000,000 Series 1999-2, Class A, 6.600%, 04/16/07 987,735
---------------
2,233,341
---------------
TOTAL ASSET BACKED SECURITIES (Cost of $2,227,910) 2,233,341
---------------
-----------------------------------------------------------------
NON-AGENCY MORTGAGE-BACKED
SECURITIES - 4.8%
-----------------------------------------------------------------
COLLATERALIZED MORTGAGE OBLIGATIONS - 4.8%
Chemical Mortgage Securities, Inc.#
1,127,000 Series 1994-1, Class A7, 6.250%, 01/25/09 1,079,562
Countrywide Mortgage Backed Securities, Inc.#
1,385,064 Series 1994-D, Class A9, 6.500%, 03/25/24 1,298,944
DLJ Mortgage Acceptance Corporation#
2,200,000 Series 1998-2, Class 2A10, 7.000%, 06/25/28 2,114,354
---------------
4,492,860
---------------
TOTAL NON- AGENCY MORTGAGE-BACKED
SECURITIES (Cost of $4,714,821) 4,492,860
---------------
-----------------------------------------------------------------
U.S. GOVERNMENT AGENCY AND
AGENCY-BACKED ISSUES - 45.5%
-----------------------------------------------------------------
Federal Farm Credit Bank
2,100,000 6.370%, 10/30/07 2,008,432
1,000,000 7.000%, 07/19/06# 981,136
---------------
2,989,568
---------------
Federal Home Loan Bank
1,500,000 6.000%, 05/08/03# 1,452,996
1,000,000 6.000%, 07/21/03# 966,318
2,076,533 5.946%, 05/24/04# 2,008,153
2,000,000 6.645%, 08/02/04# 1,954,034
1,250,000 6.150%, 10/14/04 1,206,140
2,000,000 7.125%, 02/15/05 2,004,346
1,750,000 6.120%, 08/26/08# 1,612,005
1,390,000 5.755%, 11/20/08# 1,250,583
---------------
12,454,575
---------------
Federal Home Loan Mortgage Corporation (FHLMC),
Participation Certificates
784,470 Pool #G40376, 6.000%, 06/01/01 777,873
1,223,453 Pool #C90290, 7.000%, 08/01/19 1,188,315
---------------
1,966,188
---------------
Federal Home Loan Mortgage Corporation (FHLMC),
361,697 Adjustable Rate Mortgage, Pool #845864, 7.056%*, 07/01/24 363,533
---------------
Federal Home Loan Mortgage Corporation (FHLMC),
Real Estate Mortgage Investment Conduits (REMIC)
$1,065,791 Series 1769, Class A, 6.500%, 5/15/08 $ 1,035,645
600,000 Series 1480, Class LE, 6.500%, 7/15/08 567,855
2,000,000 Series 2078, Class Z, 6.000%, 1/15/09 1,953,865
2,250,000 7.625%, 9/9/09 # 2,211,748
500,000 Series 24, Class VB, 6.500%, 7/25/10 468,665
1,600,000 Series 2102, Class TR, 6.000%, 10/15/11 1,510,392
1,000,000 Series 1466, Class PI, 7.000%, 08/15/20 988,113
2,000,000 Series 16, Class M, 7.000%, 08/25/23 1,917,827
---------------
10,654,110
---------------
Federal National Mortgage Association (FNMA),
Pass-Thru Certificates
2,085,699 Pool #303922, 6.000%, 05/01/16 1,957,804
1,233,507 Pool #323380, 6.500%, 10/01/28 1,158,097
171,318 Pool #211830, 7.000%, 04/01/23 168,409
---------------
3,284,310
---------------
Federal National Mortgage Association (FNMA),
Real Estate Mortgage Investment Conduits (REMIC)
500,000 Series 1993-134, Class L, 6.500%, 08/25/08 481,945
429,458 Series 1989-69, Class C, 7.600%, 10/25/19 429,237
407,764 Series 1992-125, Class J, 6.500%, 05/25/21 403,921
575,000 Series 1993-167, Class J, 6.750%, 12/25/22 547,311
272,459 Series 1992-150, Class FV, 5.562%, 05/25/21 270,289
2,100,000 Series 1993-38, Class V, 5.757%, 08/25/21 1,934,272
1,574,250 Series 1998-50, Class DN, 6.250%, 09/25/28 1,550,438
777,244 Series 1998-50, Class EN, 6.500%, 09/25/28 732,910
---------------
6,350,323
---------------
Government National Mortgage Association (GNMA),
1,485,193 Pool #521580, 7.000%, 11/15/14 1,465,896
57,887 Adjustable Rate Mortgages, Pool #859287, 6.625%*, 07/20/26 57,808
---------------
1,523,704
---------------
Structured Asset Mortgage Investments, Inc. (SAMII),#
2,000,000 Series 1998-12, Class A2, 6.050%, 02/25/29 1,959,382
---------------
Student Loan Marketing Association (SLMA),#
1,200,609 Series 1996-2, Class A1, 6.457%*, 10/25/04 1,197,757
---------------
TOTAL U.S. GOVERNMENT AGENCY AND
AGENCY-BACKED ISSUES (Cost of $44,224,299) 42,743,450
---------------
-----------------------------------------------------------------
U.S. TREASURY OBLIGATIONS - 12.7%
-----------------------------------------------------------------
U.S. Treasury Notes
$6,000,000 6.500%, 08/15/05 $ 6,039,378
2,000,000 6.625%, 06/30/01 2,001,250
---------------
8,040,628
---------------
U.S. Treasury Bonds
3,500,000 10.750%, 05/15/03 3,917,813
---------------
TOTAL U.S. TREASURY OBLIGATIONS (Cost of $12,402,031) 11,958,441
---------------
TOTAL LONG-TERM INVESTMENTS
(COST OF $92,275,344) 89,007,212
---------------
-----------------------------------------------------------------
SHORT-TERM INVESTMENTS - 3.7%
-----------------------------------------------------------------
-----------------------------------------------------------------
COMMERCIAL PAPER - 3.1%
-----------------------------------------------------------------
Norfolk Southern Corporation
1,500,000 6.050%, 05/31/00 1,484,875
---------------
Westways Funding I Ltd.
1,500,000 5.250%, 05/02/00 1,492,315
---------------
TOTAL COMMERCIAL PAPER (Cost of $2,977,190) 2,977,190
---------------
-----------------------------------------------------------------
VARIABLE RATE DEMAND NOTES - 0.6%
-----------------------------------------------------------------
6,222 American Family Financial Services, 5.7704% ** 6,222
522,043 Firstar Corporation, 5.8825% ** 522,043
27,688 Wisconsin Electric Power Company, 5.7704% * 27,688
---------------
TOTAL VARIABLE RATE DEMAND NOTES (Cost of $555,953) 555,953
---------------
TOTAL SHORT-TERM INVESTMENTS
(COST OF $3,533,143) 3,533,143
---------------
TOTAL INVESTMENTS - 98.4% + (COST OF $95,808,487) 92,540,355
---------------
Other assets in excess of liabilities - 1.6% 1,472,388
---------------
TOTAL NET ASSETS - 100.0% $ 94,012,743
===============
</TABLE>
# CALLABLE.
## PUTABLE.
* VARIABLE RATE SECURITY. THE RATES LISTED ARE AS OF MARCH 31, 2000.
SEE NOTES TO THE FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
================================================================================
BREMER INVESTMENT FUNDS, INC.
================================================================================
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 2000
--------------------------------------------------------------------------------
1. ORGANIZATION
Bremer Investment Funds, Inc. (the "Company") was incorporated on August 26,
1996, as a Maryland Corporation and is registered as an open-end management
investment company under the Investment Company Act of 1940. The Bremer
Growth Stock Fund and the Bremer Bond Fund (the "Funds") are separate,
diversified investment portfolios of the Company. The principal investment
objective of the Growth Stock Fund is long-term appreciation of capital.
Dividend income, if any, is a secondary consideration. The principal
investment objective of the Bond Fund is to maximize total return. In
addition to the Funds, the Company offers the Legacy Minnesota Municipal Bond
Fund. This report contains the information of all portfolios, except for the
Legacy Minnesota Municipal Bond Fund. Information with respect to this
portfolio is contained in a separate report. The assets and liabilities of
each portfolio are segregated and a shareholder's interest is limited to the
portfolio in which the shareholder owns shares. The Investment Adviser held
one share of the Growth Stock Fund capital stock and 9,999 shares of the Bond
Fund capital stock at $10 per share on January 15, 1997. The Funds commenced
operations on January 27, 1997.
The costs incurred in connection with the organization, initial registration
and public offering of shares, aggregating $27,332 and $27,332 for the Growth
Stock Fund and Bond Fund, respectively, have been paid by the Funds. These
costs are being amortized over the period of benefit, but not to exceed sixty
months from the Funds' commencement of operations.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. These
policies are in conformity with generally accepted accounting principles.
a) INVESTMENT VALUATION - Securities that are listed on a securities
exchange are valued at the last quoted sales price on the day the
valuation is made. Price information on listed stocks is taken from the
exchange where the security is primarily traded. Securities which are
listed on an exchange but which are not traded on the valuation date are
valued at the mean between the latest bid and asked prices. Unlisted
securities for which market quotations are readily available are valued
at the last sale price, or if no sale, at the mean between the latest bid
and asked price. Other assets and securities for which no quotations are
readily available are valued at fair value as determined by the
Investment Adviser under the supervision of the Board of Directors.
Instruments with a remaining maturity of 60 days or less are valued at
amortized cost, which approximates market value.
b) FEDERAL INCOME TAXES - No provision for federal income taxes has been
made since the Funds have complied to date with the provisions of the
Internal Revenue Code applicable to regulated investment companies and
intend to continue to so comply in future years and to distribute
investment company net taxable income and net realized gains to
shareholders.
c) WRITTEN OPTION ACCOUNTING - Each Fund may write call options on
securities either held in its portfolio, or which it has the right to
obtain without payment or further consideration, or for which it has
segregated cash in the amount of additional consideration. When a Fund
writes an option, an amount equal to the premium received is entered into
the Fund's accounting records as an asset and an equivalent liability.
The amount of the liability is subsequently marked-to-market to reflect
the current value of the option written. When an option expires, or if
the Fund enters into a closing purchase transaction, the Fund realizes a
gain (or loss if the cost of a closing transaction exceeds the premium
received when the option was sold).
d) INCOME AND EXPENSES - The Funds are charged for those expenses that are
directly attributable to each portfolio, such as advisory, administration
and certain shareholder service fees. Expenses that are not directly
attributable to a portfolio are typically allocated among the Company's
portfolios in proportion to their respective net assets, number of
shareholder accounts or net sales, where applicable.
e) DISTRIBUTIONS TO SHAREHOLDERS - Dividends from net investment income of
the Growth Stock Fund are declared and paid annually. Dividends from net
investment income of the Bond Fund are declared daily and paid monthly.
Distributions of the Funds' net realized capital gains, if any, will be
declared at least annually.
f) 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 revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
g) OTHER - Investment and shareholder transactions are recorded on trade
date. The Funds determine the gain or loss realized from the investment
transactions by comparing the original cost of the security lot sold with
the net sales proceeds. Dividend income is recognized on the ex-dividend
date or as soon as information is available to the Funds, and interest
income is recognized on an accrual basis. Generally accepted accounting
principles require that permanent financial reporting and tax differences
be reclassified to capital stock.
3. CAPITAL SHARE TRANSACTIONS
Transactions in shares of the Funds for the six months ended March 31, 2000,
were as follows:
GROWTH FUND BOND FUND
Shares sold 1,072,376 1,628,868
Shares issued
to holders in
reinvestment
of dividends 18,327 13,787
Shares redeemed (389,486) (1,223,321)
---------- ----------
Net increase 701,217 419,334
============ ===========
Transactions in shares of the Funds for the year ended September 30, 1999,
were as follows:
GROWTH FUND BOND FUND
Shares sold 1,010,029 3,087,449
Shares issued
to holders in
reinvestment
of dividends 771 11,219
Shares redeemed (1,143,764) (1,670,078)
-------------- --------------
Net increase
(decrease) (132,964) 1,428,590
=============== ==============
4. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of investments, excluding short-term
investments, by the Funds for the six months ended March 31, 2000, were as
follows:
GROWTH FUND BOND FUND
Purchases
U.S. Government $ 132,195 $ 14,943,450
Other 12,005,825 12,699,147
Sales
U.S. Government 0 16,688,304
Other 4,371,240 5,183,770
During the six months ended March 31, 2000, written option activity in the
Growth Stock Fund was as follows:
Number of
contracts Premium
----------- --------
Outstanding at
beginning of period 100 $10,301
Options written (100) (10,301)
---- -------
Outstanding at
end of period 0 $ 0
== ========
At March 31, 2000, gross unrealized appreciation and depreciation of
investments for tax purposes were as follows:
GROWTH FUND BOND FUND
Appreciation $ 49,786,939 $ 25,180
(Depreciation) (3,343,371) (3,293,312)
Net appreciation
(depreciation)
on investments $ 46,443,568 $(3,268,132)
============== ============
At March 31, 2000, the cost of investments for federal income tax purposes
was $52,829,282 and $95,808,487 for the Growth Stock Fund and Bond Fund,
respectively.
5. INVESTMENT ADVISORY AND OTHER AGREEMENTS
The Funds have entered into an Investment Advisory Agreement with Bremer
Trust, N.A., a wholly owned subsidiary of Bremer Financial Corporation.
Pursuant to its advisory agreement with the Funds, the Investment Adviser is
entitled to receive a fee, calculated daily and payable monthly, at the
annual rate of 0.70% as applied to the Funds' daily net assets.
Firstar Bank, N.A., a subsidiary of Firstar Corporation, a publicly held
bank holding company, serves as custodian for the Funds. Firstar Mutual Fund
Services, LLC, a wholly owned limited liability company of Firstar Bank,
N.A., serves as transfer agent, administrator and accounting services agent
for the Funds.
The Funds have adopted a written plan of distribution (the "Plan") in
accordance with Rule 12b-1 under the Investment Company Act of 1940. The
Plan authorizes the Funds to make payments in connection with the
distribution of shares at an annual rate of up to 0.25% of a Fund's average
daily net assets. On November 24, 1998, the Funds entered into an agreement
with Rafferty Capital Markets, Inc. to distribute the Funds' shares. The
currently approved rate is an annual rate of 0.01% of a Fund's average daily
net assets. Payments made pursuant to the Plan may only be used to pay
distribution and marketing expenses in the year incurred. For the six months
ended March 31, 2000, $4,346 and $4,645 was incurred pursuant to the
distribution agreement by the Growth Stock Fund and Bond Fund, respectively.
6. RELATED PARTIES
Bremer Trust, N.A. clients and Bremer Trust, N.A. affiliated clients held
4,792,044 and 9,688,701 outstanding shares of the Growth Stock Fund and Bond
Fund, respectively, as of March 31, 2000.
Investment Adviser
Bremer Trust, N.A.
Cold Spring Center
4150 Second Street South
St. Cloud, MN 56302-0986
Administrator, Dividend Paying Agent,
Shareholders' Servicing Agent
and Transfer Agent
Firstar Mutual Fund Services, LLC
615 East Michigan Street
Milwaukee, WI 53202
Custodian
Firstar Bank, N.A.
615 East Michigan Street
Milwaukee, WI 53202
Counsel
Briggs and Morgan
2400 IDS Center
80 South Eighth Street
Minneapolis, MN 55402
Independent Auditors
Arthur Andersen LLP
100 East Wisconsin Avenue
Milwaukee, WI 53202
Directors
Steven A. Laraway
Stan K. Dardis
John M. Bishop
John J. Feda
Barbara A. Grachek
|
|